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Adjustment as the first condition for growth?

Adjustment as the first condition for growth?

The numbers don’t give, what do we do? Do we reduce the structure as much as possible to return to a positive balance or do we encourage the productive and commercial area to grow and return to a healthy situation?

This situation that can happen to us in companies happens in the country. There are logically other options to reverse a situation but it serves, I believe, to illustrate the following reflection on the eternal hurricane in which SMEs have to navigate.

Labor laws that are not just old, they are bad. A suffocating tax pressure at the national, provincial and municipal levels that, as they manage very poorly, look for a backup wheel in the private sector. There are no credits to improve productivity or to finance the operation, there is a lack of a clear exchange rate policy, infrastructure and a long-term economic plan. An image of a country that has been deteriorating little by little due to populist leaders who negotiate for their own benefit with countries that are not necessarily the ones that are best for the productive sector to create agreements.

These variables and others are what SME entrepreneurs must deal with. The current situation is bad, very bad. A cost structure that grows month by month and decreasing consumption.

I recently read that in Argentina we have the smallest number of SMEs per 1,000 thousand inhabitants in all of Latin America, only before Venezuela. We have 14 SMEs per thousand inhabitants, Chile has more than three times as many and Uruguay two and a half times as many.

Always navigating a choppy and capricious sea produces this. SMEs sink and are lost at the bottom of the sea.

The numbers are not working for the country or for the companies. We all agree that previous bad administrations led us to this present and that ordering the numbers is an obligation if we want to move forward. The point, or rather the problem, is not the what, but the how.

We have a structure in pesos that is increasing at the rate of inflation and income that is decreasing at the rate of the market decline and/or by having a practically fixed exchange rate for more than 4 months. How do you sustain a business like this?

What we all mostly agree on, the how is where we have doubts because the hurricane is taking us to murky waters in which due to the rain, wind and color of the water we do not know where we are going.

Without credit, SMEs are sustained in many cases by the contribution of their shareholders, but that is a patch for a long-term project, it is a palliative to an agony. Proof of this is our position in the ranking in which we only “beat” Venezuela. Bolivia, Paraguay, Nicaragua, are countries that have more SMEs per thousand inhabitants. Tragic for a country that knew how to be a lighthouse in the region.

Supporting small and medium-sized businesses to grow is nothing more than accelerating a virtuous ecosystem of greater employment and tax collection. It is uncomfortable to write because of the obviousness of the statement but nevertheless it is never done, perhaps in the future it will be done but it is not being done now either because the option that always wins is to hang or leave SMEs adrift with the promise that then everything will improve.

We are all very hopeful that Argentina will be a better place to work and live but we have to reach that moment because SMEs are very hard hit. It would be important for them to support us so that when the rebound comes, and we know it will come, we stay alive and can enhance the inertia. Without any shipwreck.

Having a direction is key, the numbers in order are very relevant, but it is also important to have an incentive to continue betting on a country that decades ago left us aside and forgot that together with SMEs the growth of the country will be greater and better, since the SMEs are the ones that can make growth, in addition to higher, sustainable.

CEO Argensun Foods

Source: Ambito

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