“We highlight the need, more than anything, for medium-long-term consensus to be solidly built,” said this Thursday the World Bank economist, Daniel Reyes, When asked about the project Law Bases. The manager offered a press conference to refer to a work on the Argentine economy and stated that the country “went through very abrupt changes in the direction of its public policies”.
In reference to the fiscal issue, Reyes pointed out that “Argentina went through countless fiscal rules, many of which have not been complied with in recent decades.” And I add: “Not to mention, for example, in tax matters.” In this regard, he gave as an example export duties.
He specified that from 2002 to 2021, “On average, Argentina had 5 regulatory changes per year for this tax, which extends to more than 7 changes per year in the last 4 or 5 years. In other words, the volatility in the rules of the game of tax, fiscal and macroeconomic policy has been enormous.”
The multilateral organization places “a lot of emphasis” on the need for the “Argentina recover the fiscal policy tool for macroeconomic stabilization.”
Monetary politics
Daniel Reyes He also urged that Argentina recover monetary and fiscal policy. He maintained that “our diagnosis, and which is the consensus of the majority of analysts, is that fiscal policy has dominated monetary policy given the fiscal imbalances of recent decades. So naturally If Argentina manages to recover fiscal sustainability, it will recover the degrees of freedom so that monetary policy can once again fulfill its stabilizing role.”
In this sense, he commented that “Argentina in the last, I would encourage me, almost 100 years, has never managed to combine at the same time a sustainable fiscal policy, a free exchange rate and a relatively high insertion into international trade. It was never able to do those three things at the same time in a sustainable way, which other countries have been able to do. So, trying to move towards that direction, it seems to us that it will surely be super relevant to achieve this slightly more stable and inclusive growth.”.
He concluded by saying that “the idea of return to fiscal sustainability and once again give a degree of freedom to monetary policyof course, “It’s the right direction.”
The importance of the private sector
When asked about Ambit, World Bank economist Julian Folgar maintained that “We place the private sector as fundamental in the development process. “We believe that there is a very strong possibility due to the comparative advantages that Argentina has in various sectors, agriculture, the services sector.”
He added that “It is important to involve the private sector in the development process, which we believe is a role that the State has to play, particularly when there are market failures.” He pointed out the importance of human capital by improving access and quality of education.
He concluded that “Although the private sector has to be at the center of the development agenda, there are public policy tools that are necessary to create a business climate that leads to medium-term development”.
The World Bank considers that the country has sectors with competitive advantages such as biotechnology and automobile manufacturing. Particularly, in biotechnology, the agency considers that it is essential to have a stable trade policy, which allows companies to have access to good quality imported inputs and at the same time continue to invest in human capital.
Source: Ambito
