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The critical axes of the economy for 2024: hunger, wages and inflation.

The critical axes of the economy for 2024: hunger, wages and inflation.

There are two economic nonsense that were installed: “the exchange rate delay” and “the lag” that justify many of the economic policies of the current government. But do heterodox or popular national economists have critical thinking? No, it is clear that they use the same conceptualizations to analyze an “economic” reality that ends them. leading to the conclusion that it is a matter of “graduation”. Therefore, the economic policy recommendations end not being adequate to reality.

Starting with the “exchange delay” taking sophisticated indices and they conclude that our products are cheap compared to those produced by another economy, therefore, there is no other option than to be “competitive” and to do so we must “correct the exchange rate”, these last two ideas mean devalueand there is a general consensus that this, always, but always, liquefy salarybut generates more income for exporters and agents linked to that production-export. On the other hand, importers have a double mechanism of action; One, import at the preferential dollar and market the good at the illegal dollar. Thus generating “permanent expectations” of devaluation. Can stability be achieved with a constant correction of the exchange rate? Clearly not, lowering the rate, as is happening in Brazil and Chile, did not generate the stampede of the illegal dollarIn fact, he seems to be behaving differently than projected, but there are still those who are betting on his actions. The issue is that Argentina’s export products are wage goods that the entire working class consumes and that generates many internal tensions in the productive structure.

The tension is, if the rate goes up, food goes up and household goods become more expensive. How much further can salary stretch? Which is on average at $500,000 because to this context we must add that the drop in consumption of all employees implies lower sales by SMEs and cooperatives, the large ones are self-sufficient and access the external export and financing market, we are talking about the cereal and oilseed and food and beverage sectors, which are the main generators of foreign currency in the country. They earn by selling, with the expectation of devaluation, to the internal market and the external market. The price of the drink that pairs with the bitter is 2 dollars here and in the United States, but do workers in Argentina earn on average $1,500 to $2,000? No, and other comparisons could be made, but now questions arise: What is the technological innovation so that the cola drink is the same as in the United States? It would be good for COPAL and AMCHAM to shed light on these issues.

The second is “the lag” that comes from the monetarist school, an effect that was not palpable when it was carried out, the current president says that they “spent everything” and 18 months later we are suffering the inflationary consequences. Economic commentators say one month “inflation went down” and the next “inflation went up”, but strictly taking the “monetarist view” (Milton Friedman), if they spent everything and that generated inflation, who are the confused ones? Let’s take it as true that emission generates inflation, inflation in June 2021 was 37–40%, now in January of this year it reached 230% (data from the city, INDEC data is missing) and the city of Buenos Aires gives us another data , food and beverages had an inflation of 300%. Are we no longer close to a hyper? Let’s stop focusing on the monthly data, it is a data, the one that shows reality is the interannual data. In June 2021, a certain Funes de Rioja, from COPAL, takes over the UIA, and since then inflation has not stopped. Fact, not story.

Therefore, all that issuance was due to inflation, so why do we talk about lag? Inflation since June 2021 was eroding the salary throughout this period, the devaluation of August 2023 was contained, but the current management directly devalued in December 2023 and did not take compensatory measures that would not cause salaries to fall even further. The lag that the president speaks of does not exist. But he arrived and taking the 2023 budget, he doubled the food card, the AUH and the work boost. The problem is not the price signal and market failures exist. The middle class that did not fill the refrigerator is now selling it because, along with other social actors, they only heard from the president saying: There is no money.

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Inflation in the City of Buenos Aires the last 10 years.

In this context There is no measure that will regulate the increase in prices. It seems that this government’s priority is to create the conditions for a recession: lower wages, lower consumption and lower sales. Economic Darwinism, the largest are going to absorb in their sector and dominant positions will be consolidated. Reaffirm imperfect competition: monopoly. In Argentina there are 10,000 exporting companies, in total there are 560,000 companies, therefore, wouldn’t the internal market be the engine of development instead of the export model proposed by some specialists who only see the problem in the dollar and not in the productive structure?

Returning to our present “Walk, lady, look for a price” the Lita de Lázzari that we carry inside. But, although he understands economics, what is manifested to him, the price signals; It is difficult for him to understand the phenomenon (land, labor and capital and their remuneration) and in wanting to understand it he uses the concepts of “exchange delay” or “lag”, thus ending up more confused than when he started walking and discussing the “theft of a GDP.” ”.

We are in a social, economic and productive emergency, bordering on hyperinflation, recession and hunger. But The solution is not found in the decree presented or the failed omnibus law which remained as Rappi Law.

Let’s not leave without observing the hunger data in Argentina, the FAO measures insecurity moderate food intake (AMI) and severe food intake (IAG)the first refers to a person who does not have enough money or resources to eat a healthy diet, is uncertain about the ability to obtain food, and probably skipped a meal or ran out of food occasionally. In Argentina as of 2015, the AMI doublesreaching around 16 million people in 2019 and adding around 700,000 by the end of 2022. The situation therefore reaches 35.8% of the population total.

In the case of IAG, it is the person who ran out of food and went entire days without eating several times during the year. In Argentina in 2015 there were around 2.5 million people in this situation. The management of Macri-Caputo-Dujovne-Sturzenegger-Bullrich and Marco Peña Braun, doubled the IAGBy 2019, the figure rose to 5.7 million and by the end of 2022 there were about 5.9 million, adding 200,000 people to this worrying situation.

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Number of people with moderate food insecurity.

Number of people with moderate food insecurity.

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Number of people with severe food insecurity.

Number of people with severe food insecurity.

With this inflationary and hunger panorama, the government of Javier Milei does not focus on the issue and in fact decides to move forward with measures that will directly aggravate the possibility of accessing sufficient food for important portions of the population. According to the National Agrarian Group “The problem of hunger is on a global scale and is becoming increasingly complex. To take a real dimension of the situation, it is enough to recover the latest UN positions on the matter. The documents state that we are facing “the most important humanitarian hunger crisis in history and with no foreseeable end.” Likewise, the entity has been strengthening its World Food Program without hope of being able to reverse the situation. By 2024, it is estimated that 18 of the 22 highest-risk territories will directly see their populations reduced due to famine.”

To close, An outlook to follow in March is whether the increases will continue, because the harvest in January lost 20,000,000 tons (soybeans and corn) and prices are lower than in 2023, the foreign currency income projections were 41,000 and rose to 26,000 million dollars. Will exporters ask for compensation as happened? with the foot? The only relevant gap is that of salaries and price escalation. As the National Chair of Economics said “Neither Keynesians, nor Liberals: Nationals”, We will have to give it a more national and less imported look.

Source: Ambito

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