2024-02-18 04:00:20
In a remembered comic strip, a character, Mafalda, observing workers operating a deep well on the sidewalk, asks them if they were looking for the roots of the national being. The angry response was: NO, baby! We’re looking for a gas leak! to which the girl reflected: As always, the urgent replaces the important!
At the level of reality, Minister Caputo will be able to be content with the current results he shows regarding fiscal balance (welcome!). Which are urgent and not a small thing. However, to give them sustainability, – what is important – a good part of the modifications proposed in the recently aborted “Bases” law must be materialized.
This failed step had begun with a true political success when the Government obtained general approval of the bill, but was frustrated by the subsequent refusal of hawks and former dialogueists to approve the powers of the Executive to launch this transformative attempt, as by For example, the power to dispose of the so-called trust funds, (29) currently with meager controls, which concentrate an annual budget close, estimated, to two percentage points of the Gross Domestic Product (GDP) of the country.
For its part, the “Bases” law project was more than just a new effort to achieve a State without deficit. It also meant, if approved, a profound cultural change in Argentina, and for which many chapters had previously achieved a political and social consensus that was unthinkable just a few years ago.
Although the frustrated fate of the law has generated certain unease, not only in the Government, but in an important part of the population, those who wanted to see the expected transformations materialize, the statements of the President and his ministers show a renewed spirit, encouraged due to the initial results of the fiscal program, despite the fact that the recommended change inevitably implies the need to have a legal instrument to make it effective, this was and is the “Bases” law.
In this sense, many analysts, and also the markets, insist that without structural reforms and new tax engineering, fiscal balance and the eventual drop in inflation may be a transitory result.
Public spending must inevitably be adjusted to a level of income that is sustainable over time with a tax system that does not suffocate the private sector. It is worth remembering that in the K governments, consolidated public spending expanded from 29.5% to 46.3% of GDP and the total number of public employees, which was 2.2 million in 2003, rose to more than 3.5 million in 20 years.
It is essential to move away from a closed economy towards a market economy integrated with the world.
From a conjunctural point of view, the problem that the Government faces is that as time passes, it may lose popularity, which is the basis of its political power. Although inflation is falling, this slowdown is at the cost of a very strong recession.
It is to be hoped that the Government combines its recognized desire for transformation, with the implementation of the measures that lead to that objective, using the most suitable tools towards that end, either from the point of view of its conception, or through the best strategy and the best executors.
It is up to the opposition to have the patriotic attitude to contribute towards that destiny. And to the population, who can have enough temperance to facilitate this transit.
All of them are requirements to overcome an era of long decades of backwardness and confinement, a product of populism and demagoguery that have condemned the country, throughout the ages.
Difficult future, but not impossible.
*Economist. Honorary President of the Grameen Argentina Foundation.
1708229618
#urgent #important