Alfonso Prat Gay: “The government must take responsibility for what it has done”

Alfonso Prat Gay, former president of the Central Bank at the time of Duhalde and Lavagna and Minister of Economy of Macri, was yesterday the most awaited figure of the forum organized by the agricultural fund Adblick, led by José Demicheli. The setting was the Town Hall auditorium, located in the heart of the technology district.

It was preceded by several testimonies on what it means to innovate in Argentina. in it instead of using the pen there was talk of pushing the pencil to achieve sustainable production levels.

Prat Gay began by saying he returned to Argentina on January 6, 2002, just as Remes Lenicov announced the end of convertibility. “I returned from a great time in London with my family in an Argentina that was hell. That December I assumed the post of president of the central bank. He recalled that during his administration of him inflation has come down since From 40% to 3.7% in 2003 and from 6% in 2004.

“Since then, poverty has more crystallized. A transitional remedy was proposed as the plans that became permanent and killed the culture of work. It has not solved it, it has aggravated poverty ”.

called the entrepreneurs to engage. “We can’t lower our arms. Argentina has immense potential, we lack generosity, commitment and more dedication. we are in one milestone and we must prepare to see serious things ahead. For the first time it is up to populism to take responsibility for what it has done, So far Peronism He was able to arrive with just enough and handed over the poisoned chalice. Today on the bench is the person with the most power and with an institutional position like that of vice president. This is very important for those who break their back every day and see that they have always liked them and must now be held responsible ”.

And he referred to four Argentines who They live together but they don’t talk, in reference to a work by the economist Jorge Katz. The first is knowledge and innovation, which account for 15% of GDP. The second, the laggard, who is the producer of labor-intensive goods representing 35% of GDP, with low productivity and a lot of protectionism.

Another is Argentina of natural resources such as Vaca Muerta, lithium. And there is the one that hurts the most, that of 40% of the population who are excluded from it. “The four can unite to move forward”.

-You say that a labor with pain awaits us, what do you mean ?, Clarín asked him.

-The government does not command, it changes the pieces but not the policies, it does not have a program. For him it doesn’t matter Massa, Guzmán or Batakis. He kicks the problems. Massa has brought forward 2 trillion pesos of maturity of the internal debt. You have to do something different.

-What do you mean?

-For a credible program. It is not enough to promise not to broadcast, the cemetery is full of public officials who say they would not broadcast. You have to explain how you will do it. The coherence of an overall program and incentive structure is necessary to solve it.

-If they come to the government in 2023, will gradualism return?

-It will depend on what we have in Congress. In 2015 we had only a third of the deputies and a fifth of the Senate, there was no other way than gradualism.

– Do you think it should be devalued?

-The government must find a solution that is definitive because Massa cannot get the funds, whoever is on the other side does the math and observes that the problems are not solved. When we raised stocks in 2015, in a week and without graduality, we did it when we were sure we had the resources and adjusted the exchange rate because that was part of the problem. Cristina does not make us understand that the change is part of the problem.

-How do you describe the problem?

– They maintained negative real rates and a deficit they shouldn’t have had, from 2007 to 2015 and from 2019 onwards.

-How do interest rates work?

-The rate is still below the expected inflation, every time the rate rises the Central has remunerated liabilities of 170% of the monetary base and if it rises by 10% it implies that it will have to issue 20% more than the monetary base of the l ‘next year, this is inflationary.

– Do you think the exchange rate touches with such high inflation?

What is not recommended is to have reached a place with a short blanket. Anything they play in isolation and not within the framework of the program becomes complicated. The Central raises the rate, but since it has a mountain of onerous liabilities, what is the expectation of the market: it thinks that they will have to issue more and generate more inflation. We saw it in the 1980s.

-How does politics affect?

– We have seen the President say that Nisman committed suicide when he was convinced that Nisman had been murdered and that Cristina, deep down, knew he had been murdered. We have seen him blatantly lie. Not only does he contradict himself in his capacity as president from his previous stage, but he contradicts himself every day. The government is going through a crisis of confidence and brings Massa as its savior, who appears in the spotlight of the group as the least reliable political leader.