We have to say it with all the letters: the proposal is an extremely dangerous trap for the working people. With the promise of “we will all have dollars” the first and most important thing is hidden: at what exchange rate will all existing pesos be exchanged? Those who propose dollarization hide the answer, answering “whatever the market establishes.”
We are going to reveal the reality: change all the pesos in circulation, plus the deposits in Dollars, plus all the bonds and letters in pesos (the so-called “internal debt”), it could not be done at less than 450 pesos per dollar. Dollarization will be preceded by a catastrophic devaluation. Today the average salary is 40,000 pesos; it will be 88 dollars. A minimum pension would become $72. This is what we’re talking about. That Argentine workers earn the lowest wages in the world.
We have listened to libertarians, like the current legislator Ramiro Mara, maintaining that this does not matter, because immediately “investments would come” and wages would grow. It is a complete fallacy. The promise of future investments is something that we have been hearing for years, and in practice it only ends up materializing in inflows of short-term financial funds, willing to speculate without any productive basis. But, second, because if some transnational company decides to set up a subsidiary in Argentina seduced by semi-slavery wages, the first thing it will do is leave if these begin to rise. All the examples of the maquilas installed in Mexico or other places in Latin America certify this experience.
“Stability at any cost” does not work. Let us remember what happened in the Menem era. Convertibility, which was much less than dollarization, was carried out at the cost of millions of unemployed and record poverty. The fixed exchange rate and openness only served to increase the deindustrialization, concentration, and foreignization of our economy, which had already been growing since the dictatorship. And it did not prevent new crises, since the foreign debt continued to grow and led to the disaster that gave rise to the popular rebellion of December 2001. Incidentally: Menem’s proposal was to go directly from convertibility to dollarization. If no progress was made in that direction, it was precisely because the people in the street imposed non-payment of the debt.
Finally, it is not true that dollarization will end inflation and crises. As an example we have Ecuador, dollarized since 1998, and which continued to be subject to inflationary processes and IMF adjustments, such as the one at the end of 2019, which also gave rise to a huge popular insurrection.
In short, it is a proposal that covers up a super-adjustment of salaries and pensions, at the same time that it subjects us even more to the semi-colonization of our country.
Economist. Teacher and Researcher UBA. Leader of the Socialist Left
Source: Ambito
