2024-01-17 01:08:03
The omnibus law It has a chapter on “export rights.” His brief article explains “the industrial policy” of Milei who, like Moliere’s character, “has industrial policy without knowing it.”
The legislators will ratify or rectify said policy in the pertinent part.
Government It proposes, without explicit objectives, tools of an industrial policy that is an “export industry.”
The proposal discourages the export of manufacturing added value with a high-impact tool: the entire manufacturing industry will have a 15% export duty.
A surprising example: the leather industry, in principle, would have 15% withholdings, while “bovine leather”, the raw material, would have 0%. This will be the case until what is meant by “bovine leather export complex” is made explicit. The world upside down? What relationship will “bovine leather” have with the knowledge economy?
Neither in the foundations nor in the articles of the project does it indicate the existence of “an industrial policy.” But Yes, a tax rule is established that defines it.
In the manufacturing industry – not “agribusiness” – following a long sequence of “industricides” in recent decades, links of national production in its value chain were destroyed.
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As a consequence of this strategy, most of the export manufacturing industry, which is supplied with imported products to which it adds value, processes national products that in turn are made up of imported inputs and national products that are also quoted in dollars.
Any devaluation, in the current structure of national export manufacturing, implies a similar increase in most inputs.
That is the cost reality of the manufacturing industry following the “industricides.” Imposing a 15% export duty is, in fact, deciding to mutilate the export manufacturing industry by overestimating, from the ministerial office, the exchange benefits, without taking into account the devaluation impact on its costs. Consequence? Decrease in production, dollar income and salaries. Unintended effects of imposing export duties without taking into account the cost structure. The reason? It is easier to “hunt taxes in the zoo”: tax malice is the disease of Argentine fiscal policy.
This is a “new case” with very serious consequences. The check tax is a booby trap that induces people to live in black: then the money laundering will come and in this law even without paying a penny, without fiscally residing in the country and without saying where you come from. And if we dollarize – as the delegation of legislative powers threatens – it will be too late for regrets and we will say: “welcome corrupt and drug traffickers dollars.”
The deputies are threatened by the PEN – at the request of the Ministry of Economy and its vision as a financial operator – to provide it with tax resources aimed at eliminating the fiscal deficit. Sensible goal.
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But these proposed instruments are not, because they have consequences of SUCH severity that, far from contributing to improving public accounts, they will stifle production that, in the economic process, generates enormous fiscal resources.
This improvised measure of 15% withholdings on industrial exports – without studying the impact on effective customs protection (PAE) – puts exports and production levels of these sectors at risk.
All policies and objectives and instruments. “Objectives” without instruments is not “a policy”: without instruments there are no consequences.
If “objectives” are not expressed, but “instruments” are imposed, you have a “policy” of impact, but hidden. This is the case.
Instruments referring to the productive apparatus affect, either positively or negatively, the generation of added value, promote or discourage production and employment, and affect, through production, the regional level where they are located.
In economics, the consequences of the measures cannot be avoided. The “unconscious” or “hidden” objective, if there are measures, has unforeseen consequences and therefore the inability to repair the damage. This is the case.
The legislator will reject or endorse the consequences of these unusual (unique in the world) export duties on manufacturing, which show an improvisation: taking a month’s dose in one day does not hasten the cure, but instead produces “iatrogenicity.”
The goal, fiscal balance, does not justify the means that, in this case, it is mutilations to the export industry that will end up lowering revenue. The consequences will be inevitable.
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