The shock mode with which Javier Milei’s government presented itself to society was the devaluation of the peso, followed by an explosion of inflation and the promise of moving from deficit to fiscal surplus in twelve months. She took office in Congress with the discussion of the Omnibus Law and the mega DNU, which are nothing other than a deregulation shock and in a certain form of reorganization of economic activity. The famous debate on the role of the state. Or how present the State must be in the lives of Argentines.
The previous paragraph serves as a pretext to talk about what is happening in the province in recent days La Rioja. Governor Ricardo Quintela – who gave away money weeks before the presidential election – he said it now the money is not enough and that to correct the problem he is willing to issue its own, almost virtual currency. A return, in digital mode, to the last years of the last century, when shortly before the fall of Convertibility the provinces issued their own coins.
The initiative formally presented before the Rioja legislature on Tuesday states that “the currency would operate with a percentage in cash and a percentage in bonds. These bonds are received by the province to pay for services, fees and taxes. As far as trade is concerned, we have to agree with the Chamber of Commerce to receive this currency as a form of payment,” Quintela explained.
Quintela is interesting because La Rioja is a total example of the current state. Add the currency of the State of Rioja to a unique panorama. La Rioja has one of the highest rates of public employment in relation to the population of the provincebut it also stands out because it is in the provincial territory Almost 40 provincial public companies operate. The sectors are very varied, from agri-food to glass, passing through public transport, telecommunications, textiles, nursery and mining, among others.
The list of Riojan public companies
These are the companies: Agro-Andean; Agroarauco; Waters of Rioja; Alpha; Agrogenetics of Rioja; Aminga wineries and estates; BR Financial Services; Rioja ceramics; Los Llanos pig; Colonia Rioja Cunícola; DRIPSA; EDELAR; ELONGA; Energy and Minerals; ERSA; Riojana federal; Fogaplar; Fruits of St. Nicholas; Rioja Farms; Horticulture of Rioja; Internet for all; Kayne; Rioja Telecommunications; La Rioja Viticola; Ledlar; Arauco Wind Park; Doors of the Sun; Riodecò; Rioja buses; Rioja Road; NOA Textile, Triangle of the Sun; Vallesol; Rioja glasses; Vivero Del Oeste Riojano and Vivero San Gabriel.
For the opposition, yes the commercial arm of government cronyism. For the Government, a way to generate authentic work for the population of Rioja. Little information is available on the performance of these companies.
The contrast between the Rioja government’s passion for the creation of public enterprises and Quintela’s fierce opposition to lithium extraction reach that province, which years ago also rejected mining projects in the region near the municipality of Famatina. Quintela It rejects the arrival of businesses that generate private, registered and good quality employment. Something similar happened inside Chubut: The government refused to authorize a mining project with investments worth hundreds of millions of dollars.
On quasi-money and employment, a recent report by Mediterranean Foundationprepared by the economist Jorge Vasconcelosit is directly lapidary.
“There would be significant consequences If implemented: a) firstly, since economic agents will try to get rid of these documents before other currencies, the speed of circulation will increase, increasing the discount imposed by the market on the value of these bonds; b) consequence of the two factors described, the local population will suffer a further inflationary hit to the tax due to the dynamics of devaluation of the peso itself; c) but, furthermore, businesses established in the province will see national taxes become more expensive in terms of quasi-money (which will be the predominant currency in which they will charge for the sale of their goods and services), because in order to pay (national taxes) “They will have to trade local bonds below par.”
The report concludes that registered private employment is a rarity in La Rioja. So much so that in the last decade private employment has grown by 0% and public employment by 68%. It is the state present in Rioja mode.
Source: Clarin
