At the time it was still not known why some countries were prosperous and others were not, despite the overwhelming consequences for the well-being of humanity.
It was only a few years ago that the answers began to be discovered. One of them became known in 2017 after the US Congress became interested in knowing the reasons why the island of Puerto Rico was poor, unlike the rest of its other states, the continental ones. For that, he appointed a Board under the PROMESA Act.
Their conclusions coincided with the results of my research, published in the book “Full Employment” (May 2018) and inspired by my entrepreneurial experience, my background in the Department of Economics of the Argentine Industrial Union and what Paul A. Samuelson: “Economics is a scientific discipline that is in permanent development and in which there is still a lot to explore.”
The main reason why previous presidents were unsuccessful in solving underdevelopment in decades is that all underestimated entrepreneurs and businessmen in their role as true generators of wealth and employment. It is in this direction that Mario Vargas Llosa recently expressed: “Legislators and rulers for the first time in the history of humanity can choose whether their countries are poor or developed.”
Take for example Argentina, a once very rich country, currently stagnant. The figures are chilling: more than 50% multidimensional poverty (47% in the first half of 2020, according to INDEC); 50% annual inflation; lack of dollars; debt of US $ 345 billion; poor wages; very high real unemployment, with only 40% of the Economically Active People; prohibition of firing and double severance pay that caused the dismissal of countless SMEs and that make it even more difficult to hire staff.
The result: 12 years ago 600,000 businesses were operating, 95% of which were SMEs. However, at present, despite population growth, they are estimated at 500,000 – and they also work at half-speed.
The pandemic that was added to the aforementioned panorama had a terrible government treatment. Luckily, it is expected that it will soon be resolved, as experts assure, with vaccines and social care, but what will not recover are the small businesses that ceased to exist.
But not all is lost. We now know how to overcome stagnation and transform our country into one of the most developed. For it, we must eliminate the causes that discourage employment -fundamental key for the growth of nations-. And how could workers be better protected? With the Unemployment Insurance in force, but changing its benefits to the real amounts received by workers who lose their jobs.
At the same time, the compensation clauses of the Labor Contract Law (LCT), its annexes and the special statutes must be replaced, all causing stagnation, by a “New Unemployment Insurance”, initially financed by employers with 8.33% of wages.
Among the aforementioned, the Article 256 of the LCT, which by allowing claims for two years, gave rise to the “Mafia of Labor Lawsuits”, fatal for SMEs.
Other reforms that affect growth will undoubtedly be necessary. Of all of them stands out the elimination of check tax, that affects the operation of banks, fundamental institutes in economic development.
If these measures are implemented, an accumulation of local and foreign investments will begin to take place, which will create a large number of new ventures with the consequent creation of jobs, many jobs.
As the number of workers increases, more wealth will be created and wages will improve; this is essential for growth, since societies do it from the bottom up.
With these initiatives, so simple and obvious, we will be able to eliminate the worst enemy that our country has had for decades, with growth at rates even higher than the Chinese of 15%, without recession.
Thus in a short time we will once again be one of the most developed countries, without inflation due to greater fiscal resources, with dollars, lower taxes, less unemployment and millions of Argentines who will stop being poor.
Entrepreneur and author of the book “Full Employment”
