What SMEs need today: x-ray of a sector in free fall

What SMEs need today: x-ray of a sector in free fall

The vast majority of Argentines were convinced at the end of 2023 that the economic situation of the country was critical. Combining high inflation, lack of inputs and relative pricess, very high poverty rates, industry and commerce suffocated by the burden of increasing tax pressure, accentuated the precariousness of the economy and the lack of investments, added to an archaic labor system incapable of generating employment and confidence, making it almost impossible to see an exit with a promising future and we only guess a new and deeper crisis. That majority chose the imperative need for a change in the course of the country’s politics and economy, after decades of using the same recipes that led us to the economic decline of a country that has everything to grow, this being to a large extent the feeling of the industrialists Metallurgical SMEs.

During the past decades, each government that took office promised to defend the SMEs already to the industry, but the reality was different. Stressed by increasingly uncontrolled spending, they sought to increase or create new taxes as one of the quickest solutions. They did it to levels that were impossible to sustain, an economic recipe that increasingly sank our sector, preventing us from competing with the rest of the world. We ended up exporting taxes and not processed products, something that no one was going to buy from us, and thus we were left as the only one. resource an internal market that was shrinking day by day.

Protection by tariffs or import obstacles were the only tools that governments proposed to (according to their view) protect us and, in the process, collect more taxes. They did not understand that this also made all our products more expensive and made us less and less competitive due to the weight of the tax burden. The Argentine industry had to adapt to this scenario, we adapted to the rules or we disappeared. This is how many industries disappeared.

One quarter of the new Government has passed and we can summarize that we have hope. There is a government concerned with organizing the accounts, lowering public spending and therefore tax pressure, added to the interest in changing the current labor legislation, which for decades has only enabled the trial industry, the break of SMEsthe impossibility of generating employment and the economic and political strengthening of Unions that ended up unbalancing the necessary labor justice.

That hope is fading in the current situation; today we continue to have the domestic market as our main market, which was reduced due to the drop in income and credit. We know that it is a transition towards the organization of the economy, but in the meantime, our sales fell an average of 14% compared to the same period in 2023 and we have a utilization of the installed capacity of around 50%, observing with concern the lack of progress on the issues that most concern us due to political differences. Precisely these political differences make us live in a complex situation in certain territories, as is the case in the Province of Buenos Aires with an economic policy diametrically opposed to the national government, where to maintain public expenses, taxes were increased well above inflation and added the forced taxation of the large IIBB advance contributors, further deepening the difficulty of companies in having their own resources.

These unresolved political differences mean that essential measures are postponed so that the economy begins to function fully. Without a reduction in tax pressure and without a profound change in labor laws, the fate of our SMEs It is faced with a possible economic opening in the future.

We need there to be political agreements that allow the productive forces of the country to be developed, without pettiness or individualism, without cracks or useless oppositions, it is time to listen to our leaders like Manuel Belgrano who maintained “My blood boils, seeing so many obstacles, so many difficulties that would be quickly overcome if there was a little interest in the Homeland.”

The metallurgical industrialists are in favor of the Government’s measures and we fully support the May Pact, proposed to Governors and political leaders.

SMEs: How could we oppose points that will allow us to lower costs and improve our competitiveness in the future?

We must emphasize that first the 9 initial points of the Decalogue must be resolved to move on to the last point that proposes the full opening to international trade of Argentina, which is not only healthy but necessary, but that it must be done before making the changes. profound changes demanded by the economy, the labor system and politics, will lead to the irreparable destruction of our industry by preventing it from competing on equal terms.

The current needs should not prevent us from seeing the evils that can occur if opening-up measures are taken before removing the burden that years of protectionism have added to us in Argentina.

A new Argentine industry will be possible when the different political forces understand that it is not about protecting the industry with tariffs, but rather giving them an environment of predictability, avoiding burdening them with taxes and giving them the necessary economic and financial tools to develop as happens in other countries. parts of the world. The metallurgical industries are willing to face the challenge, but first they must get off our backs. As the libertarian motto says, “Don’t tread on me.”

Secretary General of the Chamber of Small and Medium Metallurgical Industries (CAMIMA).

Source: Ambito

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