Federal Capital (Paco Urondo Agency, BAE Journal published in the 11/26/2010)
past few weeks showed excellent news from the economic point of view that affirm the success of the path initiated by Néstor Kirchner in 2003. First, the Paris Club agreed to debt rescheduling without interference from the International Monetary Fund. In this way, Argentina finally begins to emerge from default by Rodriguez Saa declared the week was president of the Nation.
With the assumption of Nestor Kirchner to the presidency in May 2003 began a dual process of public sector external debt reduction along with the output of default, which made him a difficult target to conquer. But at the same time, it is trying to achieve in a macroeconomic model that does not involve the permanent adjustment of public expenditure traduciciría in a steady increase in unemployment and poverty, which made it even more difficult.
small task: leave the default, reduce debt and generate an economic model to reduce unemployment, poverty and improve income distribution and without the audit of the Fund. For orthodox economists mission impossible. To these economists was easier to follow in the Fund to continue borrowing to allow us to quickly leave the default and is the international financial organization to decide which were the economic policies that we apply.
Economic independence has its costs. Being financially independent means that you must generate your own resources to sustain the model and decide yourself what are the effective policies to generate growth and social inclusion. It's easier in the short run to open the doors to the international organization to obtain resources immediately and that is the IMF thinks the economic policies. But also more costly in the long term. The best example of this was the decade of the nineties.
think that neoliberal economists called populist governments (such as Néstor Kirchner and Cristina Fernandez) who favor the short term on length. Indeed, public investment is increasing, according to these economists, a populist measure because it generates profits in the short term but mortgaging the future because it will lead to a fiscal deficit that sooner or later require an adjustment policy. However, governments that orthodox economists considered as serious (examples, the government prevailed in the nineties) were the ones who ultimately had a pre-eminence of the lake short term resources to accept the international financial system and Fund allowed a short-term relief in exchange for adjustment policies imposed by the international body that led to structural problems and long term would end in the worst crisis in Argentina's economic history, namely the 2001 crisis.
In contrast, governments "populist" initiated in 2003 preferred a more difficult, but today have positive results in sight. In 2005 he completed the first exchange of public debt in a successful manner in which approximately 80% of private foreign creditors accepted the new bond debt and also resulted in a debt reduction of approximately 60,000 million dollars in debt external public. Resources have been used to pay debt service, after the exchange were willing to increase continued public investment that generated jobs and growth
In 2006, the Fund paid 10,000 million dollars that was owed to some of the reserves of the Central Bank of Argentina. The payment to the international financial organization not only implied a reduction of external debt but also avoid the audit of the IMF to permanently translated "recommendations" of orthodox adjustment policies. The year 2006 was, in this sense, a key year in the recovery of economic independence for the consolidation of re-industrialization model with social inclusion.
Finally, in 2010 there was the new exchange of debt for those bondholders who did not accept the first and also ended in a successful exit allowing default to private creditors. There was only debt with the Paris Club. The year ends and the Paris Club agrees to renegotiate the debt without the intervention of the Fund and Argentina wanted. A symptom of recovery of economic independence. Thus, success is closing out the history of default while the process of debt reduction. A more difficult but more sustainable and lasting.
also latter week unveiled three more positive news. On the one hand, strong growth in tax revenues and resources of social security system that allows among other things support the increase in public spending, the fiscal surplus and give an increase of 500 pesos for pensioners receiving the minimum retirement . Admittedly, this increase is only once, but it adds to the price increases in pensions that were produced by law this year.
On the other hand, the latest data again yield a trade surplus and is expected to close year with a positive trade balance of close to 10,000 million dollars. Again, this surplus translated into commercial throughout 2010 in a positive balance of current account balance of payments allowed to continue with the policy of accumulating reserves by the Central Bank of Argentina, reaching the record level of reserves about 52,000 million dollars.
Importantly, the increase in reserves came in a year in which used part of the reserves (close to 6,000 million dollars) for external debt reduction policy. In other words, public debt was paid with reservations and those that not only did not fall but also continued to grow. I remember the debate of the summer again where the opposition refused to use reserves to pay debt, arguing, like when payment to the IMF, the Central Bank reserves would run out and that this would create inter alia an increase in confidence in Argentina's economy.
But also this week unveiled the industrial output data, which again recorded a significant increase thus supporting the process of re-industrialization that has occurred in Argentina since 2003. The manufacturing sector in 2010 was again one of the core activities, together with the construction, fueled by the strong economic expansion that has occurred over this year.
But the most important that you knew this week was the unemployment rate. Indeed, in the third quarter of 2010 unemployment in Argentina was 7.5%, one of the lowest unemployment rate in the last 20 years. And this is the most significant figure. For the other data are positive provided that will lead to a better life for Argentines. And the current decade was characterized precisely by the reduction of unemployment, underemployment, poverty, homelessness and social inequality.
XXI Century for Argentines began with one of the worst economic and social crisis in its history. There was despair. The IMF are demanding new adjustments, more privatization, more reduction of wages and pensions. However, with the assumption of Nestor Kirchner to the presidency was the most notable: politics again take precedence over the economy and economic policies were not set or from the IMF, nor from the palace of finance but rather from the Casa Rosada. The message was clear: it is politics that will set from now on the fate of Argentina. The policy came to make sense as a space for transformation of the country's destiny.
From this phenomenon, the result produced two most important and which are closely related. On the one hand, there was from the standpoint of economic and social re-industrialization process with domestic market growth and a strong social inclusion. But on the other hand, youth turned to politics after the revaluation of politics as a central outline of society and the economy Argentina.
This decade is a counterpoint to the eighties of last century. The eighties began with an unusual ferment due to the end of the dictatorship and the return of democracy with a strong youth participation in politics. However, ended with a strong depoliticization of society to feel betrayed because the submission to the large economic powers such as the IMF (the application of structural adjustment plans imposed by international organizations) and the military (endpoint laws and due obedience) . And since the economic crisis ended with hyperinflation that early departure meant Alfonsin government. is no coincidence the name under which characterized the decade of the eighties: the lost decade. In this sense, the present decade that involved the other way may be referred to as the decade so wonderful.
The author is an economist of the Study Group of National Economy and Popular (GEENaP). Www.geenap.com.ar (Paco Agency Urondo)
0 comments:
Post a Comment