Last week, businessmen, politicians, analysts and financial experts were the protagonists of the 45th Annual Convention of the Argentine Institute of Financial Executives (IAEF). The traditional meeting is a thermometer of how the establishment sees reality. What was seen was that two feelings dominated the mood of the audience: the desire to believe in the Government and the fear of how the economic plan will impact the reality of companies. Meanwhile, among the officials who passed through the stage, what caught the most attention was the fear that comes from thinking about lifting the restrictionsbeyond the desire to do so, and the decision not to deviate from the “crawling peg”.
“Government, governance and governability” were the “three G’s” that President Javier Milei was asked to say at one point during the event. And several voices pointed out that we must consider where we are going, what the objective is, what we want to achieve. The rise of technology and the knowledge economy was something that was very present throughout the congress. Everyone sees this niche as a great potential for Argentina.
AND The support of the majority of the executives who participated in the program proposed by Luis Caputo was striking.driven primarily by a desire for change, for a new business landscape to open up for local companies. “We need the political class to commit to the change that people want, to rise to the occasion,” he said. Diago Cazorlapresident of the IAEF, in his opening speech. He also welcomed the approval of the Bases law as a great step by the Government. Although there were some conflicting opinions among those present regarding this position and many dared to express some doubts about it.
The governors’ view
For its part, The governors stressed the importance of embracing the principle of fiscal responsibility and opening up space for the private sector to invest. They also stressed the need for the country to stabilise and get moving on the path to growth.
Poverty is something that worries the representatives of the provinces a lot, largely generated by the adjustment and cuts in spending carried out by the Government, and they are focused on how to continue with public works without national funds. In this regard, they stressed the importance of private commitment and many hope that the RIGI will give them a hand in this regard.
The “crawling-peg” and the trap: the dilemma
Also, throughout the week A former central banker told this newspaper that it is striking that the government does not listen to warnings about the need to make changes in the monetary policy.“They will die with their boots on,” he said. And the issue of the cepo is omnipresent: “We must end the cepo now because it is a tourniquet to deal with an emergency, but it cannot go on forever,” he said in his speech. Cambiemos deputy Martín Tetaz within the framework of IAEF.
“We need a more competitive industry, with an exchange rate and tax policies that favor the development of companies. and investment,” he told Scope In the last few days, a representative of the sector spoke in the corridors. Governor Alfredo Cornejo also insisted that “the RIGI is promoting investments, but the elimination of the restriction will be the step towards investment arriving” when he spoke at the convention.
But President Milei said in his closing speech that he cannot set dates to get out of the cepo and pointed out that the Government “moves forward by objectives, which depend on the decisions of individuals.” The truth is that what was present throughout the congress was the need for the integration of the different sectors of the economy and politics, but the industrialists are the ones that are most punished by the Government at this time.
The industry is concerned but willing to engage in dialogue
Many industrialists see deregulation as a double-edged sword. They think it can benefit them, but they fear, for example, that it will open up space for unfair competition or that some prices will skyrocket and they will have to go back, as happened with prepaid health insurance. The same thing happens with the reduction of the PAIS tax on imports, because, although it can lower costs on the one hand, it is a threat to the national industry on the other. And no one takes their eye off the government’s idea of modifying the antidumping law; they fear an extreme change in the deregulation path.
The agro-industrial, energy and mining sectors are those that express the most enthusiasm for the future.since the RIGI favors them, as well as the knowledge economy and some crypto ventures. Industrialists speak with caution after the words of President Milei a few days before, in which he had severely punished the industry and highlighted the role of the countryside at the very headquarters of the Industrial Union (UIA).
“We believe that we need to sit down with the Government and explain that we are being severely punished by the tax burden.“We are not unaware of the situation in the countryside in terms of tax pressure,” said an industrialist to this newspaper. He said that businessmen in the sector believe in the official proposal, but are concerned that there is no progress in a path more similar to that of Brazil, with strong productive and export promotion.
He also noted that It is necessary to generate consumption and that “Argentina has to aim to improve competitiveness”For him, that is the great challenge we face in the future in a country that “has record tax pressure” and he emphasized that, until now, we have always had a very disorganized country in economic matters, with the focus always on the macro.
The fear of lifting the restrictions and the frustration it generates
Meanwhile, for the Government, It is frustrating not to be able to lift the clamp, This is what Vladimir Wering confessed in Mendoza, and there is fear every time they are asked about the subject. They are afraid that the same thing will happen to them as in 2018, with Mauricio Macri, when, with the restrictions already lifted, the parallel exchange rate skyrocketed and they had to go back.
“We can’t afford for it to go wrong,” said one official. And that is the prevailing sentiment in the government, that they cannot lift it until they are sure that exchange rates will not skyrocket.
Source: Ambito
