Argentina is trying to export its way out of the economic crisis

The Argentine government is adamant in its widely held disgusting claim that it can double exports over the next five years, despite the struggling economy suspending one of its key exports in the last month. beef,

Argentina is one of the countries most affected by the coronavirus, which deepened the economic crisis that occurred three years ago. Inflation is around 49%, negotiations are underway with Armenia IMF: Investors are worried about the repayment of the $ 44 billion loan.

Even so, Production Minister Matthias Kulfas argues that the economy is turning a corner.

“This is a crucial moment when many investments are maturing that will allow for a significant jump in exports,” Kulfas told the Financial Times.

Kulfas argues that new projects in areas such as mining, energy, manufacturing, and the automotive industry could double exports to $ 65 billion over the next five years.

Private economists and analysts dismiss the forecast as too rosy. Although the IMF forecasts 5.8 percent growth this year, as the agricultural power plant benefits from booming commodity prices, last year the economy shrank by 10 percent. It will return to where it was before the epidemic.

Kulfas cited investment announcements of $ 20 billion when President Alberto Fernandez took office in December 2019. He said the new mining projects could boost exports by $ 12 billion, while Argentina’s growing knowledge economy would bring in an additional $ 4 billion in the coming years. ,

“The fact is that there is potential, and so is international demand. That is the reality. Then we will see how much success we have achieved [ensuring that all these projects] In fact, go ahead, “said Kulfas, emphasizing that a lot depends on how fast the projects develop.

While many agree that export promotion is the easiest way to ensure sustainable economic growth in a country with an endemic foreign exchange deficit, Argentina is persistently struggling to do so. Since 1950, the economy has been experiencing recurring crises.

“At the pace at which they are going, I do not see Argentina anywhere [to doubling exports in the next five years]”- said local economist Martin Rapet.

Rape, however, agrees that the government is focusing on the right areas. “What I do not see is evidence that they are going to pursue a policy to make this happen,” he added, fearing that other more radical leaders of the various ruling coalitions could thwart Kulfas’ efforts.

Beef exports were suspended for 30 days last month after local prices doubled over the past year, hurting domestic consumption of one of the country’s most significant products. Many officials were concerned that this could hurt the government’s popularity ahead of the key midterm elections in November.

One of the local producers mocks Kulfas’ hopes of doubling beef exports in the current conditions: “It will not happen [export taxes] և Controlled exchange rate. “We are losing customers every day, some of them will be difficult to return.”

The government’s desire to intervene in all sectors of the economy, from price controls, currency controls, tariff freezes to threats of nationalization, has frightened many that private investment needed to boost exports will not be possible in the near future. Added to these fears is the growing influence of the vice president, the former leader Christina Fernandez, which was known for its constant interference in the economy.

Kulfas agreed that policy predictability is essential for investment. “It simply came to our notice then. “Unfortunately, our starting point was very negative,” he said, pointing to the need to restructure Argentina’s public debt, which “creates a great deal of uncertainty”, as well as the inflated fiscal deficit and the depleted foreign exchange reserves.

While the government is trying to rectify these problems, Kulfas insists that investment has continued and the economy is recovering. He notes that the industrial sector is already producing more results than in 2019, before the coronavirus was launched.

“We have an economy that is moving at different speeds today. There are sectors, such as industry, construction and agriculture, which are growing, in some cases growing a lot, and other industries. [such as tourism] “They were badly injured,” Kulfas said.

He denied that foreign companies had emigrated from Argentina since taking over Fernandez. He said last year Walmart’s dismissal was due to an international restructuring plan, and the local company that bought the business continued to invest.

“We see the opposite [of an exodus]”Many areas are positioned because they see that Argentina is at a turning point,” he said.

Even so, Emily Hersh, director of the financial advisory firm DCDB Group, a financial advisory firm based in Buenos Aires, is skeptical. “Very deep pockets do not want to invest serious money in Argentina now.”

Whether or not Argentina’s economically viable recovery continues this year will largely depend on its ability to modernize its economy, says Kulfas, who focuses on developing new areas of lithium, renewable energy and healing cannabis.

“Many ask me. Do you really think this is the time for a digitalization program? ,,[or]talk about the green revolution. And I say yes. It is now. Because with each passing year, we will be able to keep up with the changing world. “, բաց skip the train.”

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button