Argentina in the swamp, the scenario so feared by entrepreneurs

In the first month of Javier Milei, in which his officials live at a dizzying pace in a flow of days that seem to evaporate, no one celebrated December’s 25.5% inflation. “It’s not to drag anyone around” In Economy they mentioned the presidential statement in clear reproach.

With the trust of a long friendship and dialogues in his apartment on Avenida Libertador, the economist Juan Carlos de Pablo told him: “You work as president but Don’t make statements about inflation, make noise. You will capitalize if you can mobilize the private sector.” Dante Sica agrees: “What determines the success of a stability program is the private investments, consumption comes later. We need to reset and capture investment.”

Those who hang out with the President observe him with too many issues at the same time. In his famous novel Fortuna, Hernán Díaz writes: “Authority and money are surrounded by calm, the power of a person is measured by the silence that surrounds him”. That doesn’t seem to be the case.

According to one political analyst, changing expectations is crucial: “Macri told the world ‘change is me’, for Milei change is the virulent and powerful economic shock”.

Perhaps this is why the debates in the commission continued due to the doubt whether the new framework could be put in place in a Congress in which Milei has just 15% of the deputies and 10% of the Senate. The project revealed rifts and unthinkable alliances emerged, as in the fishery that united the opposing provinces of Patagonia with Mar del Plata. “It’s just the tip of the iceberg” one governor suggested.

The Cuyo region now leads the wine battle with retentions of 8% rising to 35%. “In the world there are surpluses and this it leaves us out of the market. Last year wine exports decreased by 25%,” said José Zuccardi.

“They sent an encyclopedia. It’s true that Milei is unique but she doesn’t eat glass. The libertarians have understood that they cannot get there without negotiating,” a representative said. There are reforms, as Miguel Pichetto promised to the Patagonians, which go into ordinary session. That is, they hardly change.

That encyclopedia, for example, includes the elimination of the cold zone gas rate subsidy, a trust fund that accumulates $2,004 million. “It is fiscally sound and very helpful to the people,” his defenders sent Milei via WhatsApp. The President replied: “I watch it with my team, a giant hug.”

The hearing on the gas tariff was also analyzed. Fernando Navajas, from Fiel, is alarmed: “Transporters and distributors ask for their share of recomposition and behind them comes most of the subsidies for production costs and behind them comes the taxes. And when added together, $7,000 raise requests can easily add up to $70,000. AND This doesn’t close, it doesn’t pass the affordability test of the average family. It sends more than half the population into energy poverty.”

There will be a sharp contraction in demand as predicted by multinationals dedicated to mass consumption. These managers are also preparing a reduction in their offer, a scenario that implies an adjustment of personnel.

Many say they are making daily decisions at the point of sale with an 8% drop in food products in 2023 and fear a shock if Luis Caputo fails to contain the official dollar at $800. a year of painful transition celebrating deregulations. “People’s incomes have exploded. In 2017 the average was $1,500. Today there are 400”, explains Sica.

The economy is wary of harvest dollars, but prices, due to good weather and higher yields, are falling. According to Pablo Andreani the harvest would have arrived 30.4 billion dollars instead of the estimated 35,000 dollars, with wheat falling from $375 a ton to $240, and corn from $280 to $210; soybean oil, from US$ 1,100 to 830 e bean, US$550 to US$450.

Meanwhile they have begun movements in various business leaders. At Arcor, Alfredo Pagani, Luis’ brother, who took over as president in May 2023, changes key management positions. In Aluar and Fate, Javier Madanes Quintanilla stepped aside and appointed Martín Levinas, who held the role of financial director, as CEO.

The collapse of productivity in numerous sectors forces us to change processes in the face of the foreseeable opening of imports, which places us faced with the dilemma of whether to compete or die. And the complaint about the Government’s lack of important interlocutors is shared.

Many know that Macri’s former industry minister, Francisco Cabrera, pulls the strings of that secretariat. And Julio Cordero, labor law lawyer at Techint, does it in Travaglio.

Some companies are going to exit, but in consideration of what they define as value “obscenely low resources”, They prefer to wait. Others are waiting to enter.

Among other things, there was a reason why the Extended Facilities Credit was relaunched and, after board approval, allowed disbursements of $4.7 billion.

“It clarifies one of the main unknowns about the foreign sector for the first part of the year. With that amount, the Argentina covers 83% of commitments with the organization from last December to April this year. The conditions of the exemption are the ratification of the government’s fiscal objective, an adjustment of 5 points of GDP, of which 2/3 depend on the Executive and 1/3 on laws awaiting approval; along with the target of net reserve accumulation of $7.3 billion in the calendar year, less demanding than assumed”, said Jorge Vasconcelos.

On the external level, Lula continues the agreement with the European Union, which would revitalize Mercosur. Daniel Scioli says that the Brazilian asked him to explain what Milei expressed and asked him for speeches that he translated into Portuguese. Scioli celebrates his birthday this Saturday at La Ñata, a family reunion at which His friend and support Guillermo Francos will not be missing.

Brazil chairs the G20 with a summit taking place in November in Rio. Lula spoke about the fight against poverty, climate change and improving global governance. Milei agrees and his sherpa, Federico Pinedo, begins campaigning for the WTO, the Trade Organization, to work.

Meanwhile Diana Mondino tries to make up for the insults against China, such as the refusal to be part of the BRICS. For Milei it was unacceptable to join what he interprets as Beijing’s political move to be an alternative to the Group of Seven, rather than a free trade zone. China did not respond. Its current ambassador, Wang Weig, is considered a mandarin for his sophistication. Wang found himself in agreement with Mondino.

On the 15th the President lands in Davos. He will be the figure of the Forum. Few businessmen goMarcos and Alessandro Bulgheroni, between them. After all, the subsidiary Axion has some merits on the planet Milei: it lowered the price of gasoline despite declining sales.