Probably President Alberto Fernández, Martín Guzmán, Matías Kulfas, Santiago Cafiero, Daniel Filmus, and Juan Manzur; know how to take advantage of the proposal in this historic opportunity to implement it. Argentina is coming out of the precipice, but the world will enter a period of slowdown in the world growth rate, with high inflation. Paradoxically, our country can become “the best option for productive investment in the world.” This time it is not Keynes. This time it’s creativity. Right now, when everything is possible.
May 2003 was the right time to apply stimuli to aggregate demand and we did so. May 2022, 19 years later, productive investment and foreign trade are the keys to controlling inflation and long-term growth. More supply requires more suppliers to be able to continue supplying a growing demand that usually ends in external restriction.
The international financial system is inflexible, we are going for industrialization and foreign trade with original proposals. A design tailored to our unique profile and Argentine needs. We will leave behind the threatening and permanent possibility of default, through an original project of exports and investments with companies from a complementary expert and rich country, which does not present ideological controversies.
Argentina needs productive investment to continue generating employment in the midst of a country and a world that needs food. New investments are possible, because investors are where they perceive potential for activity and growth. No option other than “growth” will restore trust.
An “unexplored” alternative
We were never able to carry it out because “for the world”, Argentina remained in default with the vulture funds or was restructuring its external debt. Today Japan does not have the obstacle of its legislation that stops investments when the Paris Club is a brake. That was what the president of a Japanese conglomerate in Argentina told us 13 years ago.
Capital investments, expansion of supply in the domestic market and a strong industrial trade surplus; are the keys to the slowdown in the rate of inflation and a sustained growth in wages.
We could successfully renegotiate the conditions agreed with the IMF, but it is necessary to demonstrate that the real economy is a guarantee. The generation of an annex flow -non-existent before-, to consider the growing rescheduling or cancellation, is possible from a “boom of investments and industrial exports”.
Abandoning the Matrix Economy
The Matrix economy is the context of relationships and economic events artificially created and controlled by our “matrixeconomists”, from whom we have to flee.
Our natural wealth offers you landing strip to the Japanese boldness. We just need to get rid of the prejudice “it is not possible”, to immediately face a disruptive agreement with Japanese companies, obtaining investments, industrial and commercial know-how from the main exporting industrial model in the world. The country that created the food concept decades ago: “fresh, natural and healthy”.
We need a strategic alliance to export industry. Imagine signing an agreement with a conglomerate of Japanese companies. See how the capitals and financing we need come back and get excited.
From now on you have to compete with Japanese companies!
Exports of food products can be industrialized by Japanese companies in Argentina. We needed those who would do it better, with economies of scale (industrialize, export to new markets and lower the price of food in the domestic market).
We had already said it in the summer, after the pandemic there will be disruptions to shape a more dynamic world. The war accelerated the disruptive process. We will be able to use the knowledge, experience and creativity of the country that knows best. Doing business with Japanese companies is choosing a “distinguished alliance”. There are already more than 70 companies of Japanese origin in Argentina such as Mitsubishi Corporation, Itochu, Marubeni, Mitsui, Sumitomo, Toyota Tsusho, Sojitz, Kataoka, etc.
The Experience of Innovation and Creativity
We are trapped with the oligopoly of food companies for which competition does not exist. The Japanese are not afraid of competition. We can also mention that the vocation of the industrialist today is semi-absent in Argentina.
Let’s think about more supply and billing, through revolutionary business transformation actions. There are abundant arguments to think that this is the most appropriate solution to the problems of the Argentine economy. “Innovation kills experts in Matrixconomia”.
We ask oligopolies to compete
We have food restrictions and an enormous prosperity dormant due to ignorance, ideological resistance, lack of exploration, courage and faith in our resources. Let’s add to this attitude, lack of business interest, encouraged by the temptation of financial gain 46 years ago.
Upping the ante, we follow the logic and can negotiate an “Argentine-Japanese pilot agreement” with the participation of Mercosur, to reach Mexico, granting Japanese industrial companies the location of an “international export marketing fund.”
Given our commercial potential -almost virgin-, a proposal of this type, in the current moment of stagnation that Japan is going through, added to the food shortage in the world; would be of unsurpassed scrupulousness. Argentine trading odds are capitalized. Japanese companies invest and absorb workers in the food industry.
A business where you win everywhere
We are going to lower the price of food for Argentines with higher production (increase in supply) and based on the best technology in the world; for all this we increase productivity.
For Japanese companies it represents the possibility of industrial integration vertically in our country, from the raw material to the export of finished agro-food (its specialty). Clearly, there will be many new product families. Its business portfolio will be diversified to compete with the Europeans that subsidize a certain inefficiency in its activities, compensating at the same time for its excessive focus on electronics, metalworking, and information technology, which are now highly saturated and commoditized.
Japan lacks natural resources, we have in abundance. A non-existent horizon opens up, including the possibility of manufacturing and exporting, including-not exclusively-to Japan, their own products, in addition to activating the exporting key they have in Southeast Asia.
“Made in Argenjapan”
Japanese companies exporting to Japan their own manufacture of Argentine food. -Who can doubt the standards of quality, production and health if a Japanese company puts its stamp? – For Argentina, managing to incorporate companies versed in manufacturing exports, which provide investments, technology and know-how, is a masterful move. For Japanese companies, entering new markets and opening investments is lucid and rational.
We said it in January that the configuration of the global economy-as soon as the FED rates rise-will reduce the chances of entering the voluntary credit markets. It will be a while before we can come back with any bond issues.
We have to initiate an innovative strategy that leads to a better use of resources. Finding substitute and genuine foreign exchange financing has nothing against it. The slowdown in domestic consumption due to inflation and lack of financing can make an explosive cocktail.
The last chance to try something without pain
Imagine the following scenario: We sign an agreement with Japanese companies authorizing benefits for direct investment, for imports intended for development and the export of products “Made in Argentina”. In exchange and as an “entry premium” they can guarantee an issue of Argentine bonds “ARGENJAPANS”, with export guarantees. In exchange, Argentina guarantees Japan the fulfillment of the amortization with the “excess surplus” -created- of our trade balance. Mechanisms: escrow account or trust.
Incentives for Japanese companies
We offer an internal market with unsatisfied demand, but we also pay a management commission or “management fee” to Japanese companies that export – based on the increase in current exports – for the next 10 years. It is more reasonable than paying commissions to the bank to continue making exchanges and commissions. By using the Japanese industrial-exporter know-how, for a determined and foreseen time (in addition to the externalities to which Japanese companies that settle in Argentina have access), we stimulate the interest of diversifying the export offer of Japanese companies. We foresee an option at the end of the agreement for them to renew the terms for 10 more years, in exchange for a decreasing fee through the payment of a premium in advance of the next ones, to redeem the issued titles.
A solid option with reliable partners reduces sovereign risk, lowers the interest burden and consequently the fiscal deficit generated by debt services. Judo to the food crisis, we knock down the enemy (the food crisis) taking advantage of its own momentum to exponentially boost the agri-food supply and international trade forever.
Professor of Postgraduate UBA and Masters in private universities. Master in International Economic Policy, Doctor in Political Science, author of 6 books.
Source: Ambito
