Ha-Joon Chang is a South Korean economist recognized worldwide for his skepticism about IMF recipes and the defense of your country’s experience as an “alternative” model of development. During a visit to Argentina, the professor in London did not had a break: met with President Alberto Fernández, pre-candidates Daniel Scioli, Eduardo de Pedro and Martín Lousteau, spoke with Axel Kicillof and spoke before the industrialists of the UIA.
In his presentation marathon, Chang suggested it Argentina can follow the example of South Koreathat is, to become a developed country following a mix of protectionist and free-market measures. But he lavished criticism on both sides of the rift questioning both the policies applied after 2001 based on the appreciation of the dollar and a deepening of fiscal adjustment with the support of the Fund, without industrial policy or regulations.
“Brazil had very sophisticated industrial policies, but overvaluing the currency is like giving aspirin to someone with heart problems, on the contrary, lowering the current and trade deficit, reducing inflation, butor if they don’t invest it’s not goodyou solved the financial crises in the early 2000s, you accumulated reserves, you created a space to intervene and you ruined it, you did nothing,” he told the University of San Martín (UNSAM).
and discussed the exchange rate policy in the midst of the current reserve crisis and the electoral tensions due to the economic direction: “This time if they repeat the same recipe, if they cut public spending, devalue, receive money from the Chinese and the IMF, they generate a macro space And they spoil it with trips to Miamithey’ll have to do the same in 7 or 8 years, so you can’t just look at one side of the coin, you have to find a balance.”
Chang traveled to Argentina several times and visited as a tourist. This time it wasn’t like that. Accompanied by the mathematician and businessman Sebastian Ceria, head of the FUNDAR think tanktoured the case studies – today he was at the University of Quilmes – and tried to convince his listeners with information: the leap in per capita income in Korea, which went from 11% of Argentina’s in 1962 to represent 400 %. “How did that happen? Industrial policy,” he hammered out.
One of the witness cases it tried to “sell” to the UIA is that of the South Korean automaker Hyundaicompany that was born as a construction company and in the 70s launched its first model, supported by subsidies and import restrictions until 1988, and today it is the world’s third largest automobile manufacturer. “He drew a parallel that SMEs are like babies, you have to teach them to walk and talk, and then let them walk on their own,” said one industrialist.
Before a commission made up of Daniel Funes from Rioja, Miguen Angel Rodríguez, Martín Rapallini and Alejandro Gentile, the speaker explained his thesis on how developed countries have used protectionism to subsequently prevent others from doing so. “It’s like someone who has reached the top with a ladder then kicks it down so no one else can climb it,” he said. And he assured that in the early years, inflation can be positive.
But the Korean model, which at the time had several adepts in some sectors of activity for its own rapid expansion on the basis of low wages and a rigid labor regimeor – the democratic transition only took place in 1987 – it no longer arouses the same enthusiasm. “I don’t see it in Argentina because we are contaminated by inflation and we have to forcefully stop it,” said one of the industrialists who listened attentively.
It was in his academic presentations that the economist delved into investment policies. “Lowering taxes and removing regulations isn’t always the answer. Investors are also looking for infrastructure, development, skilled manpower: it’s not so much the taxes but what you get with them», he warned, and assured that Argentina has little investment in research and development: «only 0.5% of GDP, and remains in the academic sphere”.
Finally, he left a warning on the work flexibility: “If labor laws are lowered, the quality of the workforce is destroyed. If companies can work 15 hours a day, it means they will be tired and will not produce well. With these regulations, companies will suffer because they will have an advantage and other companies will have to do the same and all will have a drop in quality. Paradoxically, having regulations is good for business.”
Source: Clarin
