The data of the economic depression: science is the university “and the productive system”

Let’s look at some recent data, the Economic growth projection is -3.5% for this year, according to the World Bank. GDP is the annual production of new goods and services, this -3.5%, tells us that: first, Nothing new was produced and no new services were offered, but rather they were destroyed; and second, that we are heading towards an economic depression. The IDEPI-UNPAZ economic growth report shows that since the 2nd quarter of 2023 the data has been negative, four consecutive quarters. It is a very similar situation to the one experienced by the economy during the 2008/09 subprime crisis, but there was a significant recovery; here the horizon is different with the policies of Milei and Caputo.

Salaries continue to lose out to inflation, this first semester they have not even been equal, the salary of the unregistered lost 110% to inflation and that of the registered decreased by 20% and finally the registered public employees are falling by 80%. With adjusted salaries there is no recovery of consumption, therefore, there are no sales in businesses and industries, which confirms the projected fall of the -3.5% if we exclude agriculture, the fall could be -6% for 2024.

Returning to the moments of GDP decline, a third moment with four consecutive quarters of contraction was between 2018 and early 2019, the year in which Cambiemos lost the election (Lousteau, Carrio, Bullrich, Lacunza, Sturzenegger, Macri, Pichetto, Reidel, Dujovne, Stolbizer, Negri, Morales, Puerta, etc.). But it had a positive quarter to close that last semester of 2019 in recession; the situation worsened because with the change of government the pandemic came and there were another four consecutive quarters of GDP decline.

There were measures in that pandemic period (2020-2023) that supported the economy, but it was not enough, although there was a fifth quarter with recovery, then it began to decline. But this fifth moment (Milei-Macri-Caputo) of four quarters with consecutive decline, the horizon seems to be more complicated, taking into account the current measures.

Let’s take some data, on the IDEPI-UNPAZ manufacturing board, according to its divisions that provides information for the first half of the year, compared to previous years, The only manufacturing sectors that did not fall as much, but fell, were oil refining, coke and nuclear fuel -1.4% and Other transportation equipment -7.4%, this fall is comparable to the same period of the pandemic.

The other divisions show greater contractions even if we compare them with the time of the pandemic, when the economy came to a complete standstill. This stoppage is not due to the pandemic but rather a decision by Milei, Macri, Caputo and the IMF. It is the agreement with the International Monetary Fund that some in the previous government approved. The second year with economic growth in recession and economic depression and wages far from recovery is only anticipating greater unemployment and poverty.

If inflation is a monetary phenomenon that occurs at all times and in all places, then they have not understood that it is a productive structure, nor that we are on the periphery of the system, they cannot distinguish a delivery note from an invoice. Taking some ideas from the first French economists, if the economic system is like the blood system, they have self-inflicted a cardiac arrest and to turn on the defibrillator they do not know how much light they will get with two or three attempts to revive the economy.

Milei and Caputo have not read Turgot or Quesnay, or even the mercantilists who bought cheap and sold dearly and who contributed to the process of the industrial revolution. Milei and Caputo only see the economy from a monetary and financial perspective, so production is a third plane and they would not know how to generate the conditions for an economic recovery. They are colonial administrators, as happened in India; they are the Indian soldiers of the 18th and 19th centuries in the service of France, Portugal and Great Britain (China and the United States?). These soldiers were the sepoys.

In this government, what we are witnessing is the deindustrialization of the Argentine economy, which has been planned since DNU 70/2023, with the clear objective of reducing all productive capacities and leaving the exploitation of national resources to foreign capital and some national suppliers, postponing the development of strategic sectors for the national economy. The result of this process will be the improvement of other economies and the fracture of the Argentine community in social terms, a greater inequality between qualified and less qualified workers. An Argentina of exclusion.

For all the above, the conditions are being generated for an economic depression with salary and fiscal adjustments, a halt to public works and a lack of funding for the university system. An example of this is that in these first eight months of Macri and Milei’s administration, the situation of science in Argentina is worrying. This week, the National Interuniversity Council (CIN) reported that “I have made presentations to the CICYT authorities, an exhaustive survey of pending projects and programs: More than 400 projects and programs from 52 national universities, 1 university institute and 1 provincial university require a urgent care.

After seeing the repression of retirees by Patria Bullrich, as in 2001 she cut 13% of public employees, retirees, will there be a salary cut in the Public Administration? The outlook is bleak. The responses of the Undersecretary Mg. Paula Nahirñak and Dr. Alicia Caballero and other officials, to date have not provided solutions, the issue of funds for the scientific technological system, that is, the university system, is at a standstill, as is the economy.

The University Financing Law is in progress, pending in the Senate for immediate approval. Vice President Villaruel does not seem to have as a priority the solution to the demands of the university system, many wore ponchos and worked for the empire in power.

But returning to the CIN news, regarding At PRIUNAR (Argentine university research program), the new authorities of SSPU (Undersecretariat of University Policies) reactivated the program. The 7 committees for the area of ​​knowledge have already been formed. This advance represents an important step towards resuming the categorization process, which is essential for the development of research in universities..

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Taking as a basis the University Financing Law – which the Senate should discuss in the next few days – the plenary session of the CIN The government has agreed to a budget project for next year that includes reasonable increases for the normal functioning of the system. It is announced that a budget will be submitted that stipulates a final total of 7.190 billion pesos, an amount that represents 1% of the national Gross Domestic Product (GDP).

The president of the CINadded: “When this started, we all had doubts about facing closures, fees and vouchers; but none of that happened: what happened was that a dismantling of the fees of our universities began.” A peaceful march was also held in front of the building of the Scientific and Technological Promotion Agency, called by the Network of Authorities of Institutes of Science and Technology of Argentina (RAICYT).

The current government policy is destroying the productive capacities of the country. Today, many researchers have decided to continue their training in other economies, after years of training in the university and scientific system that has prepared them for the challenges of the 21st century. These researchers seem to recall the exodus of scientists, such as the Night of the Batons in the sixties, which in turn coincides with the same orthodox ultra-liberal policy. Milei has nothing new in economic or political terms.

On the other hand, the Government is already beginning to “measure the oil” in this regard in this second half of 2024. The debt maturities in foreign currency in 2025 (about US$24 billion) and the strategy to accelerate the decline in inflation raise doubts. Also the exchange rate mechanisms such as the 2% monthly crawling peg and the dollar blend. The IMF and exporters are pushing to devalue the currency and do not consider the impact on salaries, which would be a greater adjustment.

Caputo went to the Middle East to seek funds, when Milei, in his speech, aligned himself with Netanyahu in the face of the genocide of 40,000 Palestinians. Saudi Arabia is an ally of the US, but recently joined the BRICS. The funds are not going to come, the adjustment seems to recall the tragedy of 2001. On September 15, the presentation of the 2025 budget is coming up, which will surely be a greater adjustment for all workers. Hope? Difficult when hunger is becoming a pandemic.