The economist, registered in the developmental or current structural, working in the period K as a national proxy, was between 2005 and 2008; then presumed by Banco Nación, tan In February 2010 he took the Central Bank Presidency, until November 2013, confirms its strict criticisms in the Cambiemos government scheme, despite the fact that inflation continues to slow down, activity grew again and the economy began to generate net jobs; among other economic policy achievements.
In the special edition of the FIDE Magazine, to commemorate 40 years since the Development Research Foundation that his uncle, Rogelio Frigerio – the current Minister of Work and Public Works, has been devised – Mercedes Marcó del Pont, in his capacity as president, as in a new interview with Infobae, "the contradictions in financial capitalism that invite us to review the classic theory and recognize the constraints of the Keynesian or neo-Keynesian approach to think comprehensively about the problems of our underdevelopment."
And he added at work that he had been born a few weeks ago: "Standing here and now, with the wonderful experience that he composed the 3 presidential orders that extended between 2003 and 2015, It is necessary to assume the restrictions of growth policies, with the support of demand, if there is no simultaneous transformation of Argentina's productive structure and that alternatives are not discussed to reduce the drainage of the rest outside i & c process of internal compilation. "
– How do you see today's economy, following financial and financial policy adjustments, after the IMF agreements in June and last September?
– If I had to take stock of government control, we would say that we were a more advanced, more unequal country, than at the end of the previous government. And something that worries me is very much that we are a smallest country, we have lost sovereign ability to say in our main economic variables. I look forward to many of what Central Bank does. I'm thinking about it because we have deregulated, because technological abilities have been destroyed; unequal, not only because they are reflected not only by official income indicators, but also by some regional ones. And because In a short period we have lost sovereignty, when it is generally related to more geopolitical issues, but who decides on economic policy? Who decides how much the dollar should be worth? The market decides, those who want to make a financial timbrelNo one else
– That is a cultural issue, it is not now. That is why the Central Bank was obliged to follow a policy of a financial restriction where the interest rate is undesirable and extremely high, because of that market demanded to stop offsetting. to locate in dollars. What else could he have to do, or would it suggest?
– That is why, although it sounds incorrectly politically, if we really want to consider a policy that is thinking about a development, in a growth strategy, we have to tackle the issue of bimonetarism, because it is And finally, what does that mean is that wealth, surplus generated in the Argentina economy, which is being dollar and filtering out of a productive collection. And thinking about how to get out of this trap, how to negotiate with the IMF from December 10, 2019, clearly I'm aiming for a different government, because the continuity of the current It is dead, in my opinion, is how they reconstruct conditions for growth.
– What conditions would be for growth?
– Obviously, return the internal market as a priority, as the international market is very complicated, but not just drinking but also an investment. What are the production sources of savings collected in Argentina, what are the limits if those savings are dollar and go? That is why I think that the nickname of the exchange rate trap was wrong, when all the restrictions that appeared were the regulation of domestic drainage produced in-house. There is a huge challenge for development to make the economy-generated returns return to a reproductive investment. Now, the first definition is that we have to adjust the rules of the game so that it is more convenient for the capital to invest in the productive economy and not in financial assets as it happens under the this system.
– In recent work, the economist Mario Teijeiro reflected the risk of securing legal stability when the starting point on procurement rights is completely contrary to economic growth. Do you see society and political, business and union leadership, who are mature enough to discuss the need to modernize the economy?
– What's happening is that the reforms we are talking about: labor, social security, among others, refers to the abolition of the rights that orthodoxy has always given, and in fact they are failed. When you look at all the "side by side" policies, namely: tax repayments, relaxation, removing some restrictions for capital to enter the country, they have not led to more productive investment.
– In Argentina!
– In Argentina and not in the world-
– In the US, that policy rose under the presidency of Ronald Reagan of the longest growing cycle in its history …
– In the US, what is produced from the late 70s and early 80s is, obviously, a change in the process of accumulating capital, where profitability is becoming increasingly in financial settings, not in the real economy . This is the circle of the financial name, which today continues to characterize capitalism. That is why I realized a lot of what was the concept of the game where the rules of the game (we had many other things) encouraged production of profitability in the field of production and labor, not in the money. The data of the large Indec companies that match 2017 have just come out and show that the profitability rate of the companies, nationally and overseas, falls sharply during the Mauricio Macri Government.
– With a hand in your heart, do you believe that the profitability of companies can be attributed to what was done in 2017, or reflecting the inert effect of the constraints that governed until the end of 2015, such as the restriction on imports, and the exaggeration of delays in public service rates and the exchange rate for trade?
– Immediately, all that of my opinion was that he was not in virtue of the administration of trade in an increasingly protective world, in a world where phenomena for neoliberalism are a lack and Import replacement policies, today is the rule. China has been doing it for a long time and today the US also promotes it, and in this framework, Argentina has decided to "open up to the world". Therefore, I believe that we should consider ourselves as a "intelligent" trade trade, with investment commitments, with technological innovation commitments; and for that, we must start by guaranteeing the internal market, and that requires the resubmission of the income from the work, both assets and multiple who retired. And the truth is that I do not believe that it eliminates rights, I do not believe, sincerely, that the Argentine problem must be involved in labor cost issues.
– Whether to eliminate rights or improve rights in perspective, to access tasks that are paid better because of their productivity and competitiveness better? That's what was seen in the world, even in China.
– China is the anti-example, because it is a country that has a specialty path of non-labor rights and very low wages, a major re-integration of social inclusion and working conditions. Basically, China is rebuilding an internal market now with better revenue, and that's responding to a step of import insert that we have to be very careful. In Argentina, we have a model that finds its limits as early. I think that there is a terrible reading of the international context. Among other things because Liberal models always wear outside sector crises, because their approach undermines the dominance of the external sector (TheEditor's note: balance of money), and always attend the financial issue, as if it were axis of all the problems, and in fact, where did this economic model? from the external sector.
– If the reason or result is that liberal or neolobic models occur after the failure of the popular models that use privilege, over investment and exports, when they run out of good prices in terms of Good international bonus materials? Because 12 years ending with the last 5 in death, depreciation, stocks, exchange rate and tariff arrears …
– How is an economic death for 12 years? It was the highest growth step …
– In terms of Néstor Kirchner, after the late depression of 2002 …
– No, no, also from 2010 and beginning in 2011, greatly in the context of what is happening in the region and the world after the crisis with the slowdown of the growth of economic activity and global trade. And in this regard I do not highlight the need to identify and tackle the problems, but not as this government did. We had a problem of inadequate foreign exchange; of inflation, of inadequate investment.
– Also a flooding problem and subsequent drought that weakens to the maximum supply of export products …
– I refer to the problems that they make under the control of economic policy. Could they be addressed? Of course, identifying the problems and not giving up the best of State assets. I believe that the State continues to have a fundamental role in the development process that is contrary to what nebiberalism believes that it is the best market in the marketplace. allocate resource distribution. That's what Macrismo did: everything opened, deregulated everything and said: "Here are the conditions for future investments", and never came to them.
The truth is to look at the official data, the decline in internal and external investment is common, with the exception of some hinges, which contrast to the profitability of the financial sector, it is immoral to see what is happening in the real economy. And when I look, and I noticed, for example, that the IMF agenda asks the Government that I am very concerned with the adjustment of the Central Bank Charter, because when we modified it in 2012 , among the things we did He had to change the mandate and say: "you have to deal with the financial task, but also with growth and employment". What is the Fund asking for the Government? Let him write in writing what Federico Sturzenegger had been doing for a long time, to return to the BCRA mandate, that is, to underwent growth and employment to financial stability.
– As a former president of the Central Bank do you believe that financial stability is a necessary condition to be able to move on to the economic growth and sustainability phase?
– Tell the paradox, The Monetary Fund said, in the rounds of discussions that he had with economists and politicians: "we will not propose to offer a development project, we are proposing a price stabilization scheme". How bad it was, she came to offer a stabilization plan and Argentina has the highest value drop after the Convertibility crisis, and has the highest inflation rate since the early 90's. You need to see how it is stabilized.
– That table before the Agreement with the IMF …
– No, no, the decline in April's work begins, but later, with the arrival of the Fund in June, what does it say ?: "let it float", let & # 39 ; The market decided at the rate of exchange rate, not the economic policy And it rushed until it finished with the increase in referral rates to more than 70% annually in the first months of October. So, naïf would not think that swap stability up to the beginning last week had to tie with a wire, where speculation goes by identifying a lot of investors give the best to the.
In the coming weeks the IMF will be preparing to pay another USD 10 billion in March, so in the short term, the exchange risk should not be as high, but everyone knows that the million dollar questions continue until October? After or how much earlier? There is an assurance and, unfortunately, this economic policy is a continuation and that will endow another exchange crisis.
If he had chosen a level of interest rates more to meet the needs of the real economy, not most of the weight-maker, he believes that the capital outflow would have continued and also worsening the recession, the decline in value and the fall in employment? How do you think you can go out of the current picture without accelerating inflation?
– – We are about what economic literature defines as "impossible treatment": if the capital account, the exchange market is released, freedom degrees are lost to control the level of the exchange rate and & # 39; the interest rate. Especially in Argentina, more than in most countries, the dollar has become one of the main financial assets, and is increasingly disconnected from & # 39; i role in external balance, activity, overseas trade. No, it's now in hand that's right for us to dolerize or dolerize based on the location of pressure location or not. So, I believe you have to regulate. It will have to be done better, in an integral way; but the IMF must be worried because of Statute it does not prohibit giving money to a country to fund a capital flight.
The truth, this is something that the next government will have to sit down to discuss with IMF technicians, because the Fund would have to incorporate into its analysis, because & # 39 ; n His help must be related to a balance of payments, but do not carry the drain.
– But, precisely, of Agreement II with the Monetary Fund, from October to date, a notable fall is a capital outflow and a dollar purchase for savings, and the Central Bank is committed to interrupting the exchange market as a buyer only when the price falls off the non-interference zone, and only if it's more than the ceiling, which is 30% led; and also the spring rate of interest rate, through daily Leliq tender.
– I read a lot of the central Bank monthly balance, for me, it's vitally important to know what is happening with the economy. What you see, from the increase in the benchmark interest rate, is that the dollarization goes down a bit, but dollars up, companies and individuals sold dollars. Why do they sell dollars, because they depend on the weight? I think it's because they're doing a financial bike.
– Do not see it as a financial need for pesos and the effect of the high cost of credit, and so it's less expensive to accumulated uncontrolled dollars?
– In some ie companies, because annual rates can not be paid 100% in line of overdraft. But this dad dolphin does not respond to amazing reasons of replacing the economy. Therefore, the question is, as it is clear that this does not fit with balance; namely that a new bubble had to build around the Leliq and the deposits in pesos: in September they represented USD 19,000 million and now almost USD 30,000 million, they grow at a rate of 80%. That is why it happens, because the economy is being referred ?, No !, If the credit decreases; if the money falls because economic activity is falling. This is reasonably rational, there is a very good financial business, companies are doing and also physical persons. Now, I wonder when the uncertainty before the elections strengthens what will happen with those fixed terms in pesos; with Lecap the Exchequer? That is, big pockets of pesos are over. There is really much devaluation, but the incredible interest paid has recommended that the stock of potential liquid assets can be rapidly dolled.
– At the Central Bank and Finance argues that it faces that momentum with a supply of dollars accrued with buying around 1,000,000 million between January and the first half of February. Seasonal dissolution of cereal exports and oil seed; selling the potential of up to USD 10,000 million from the Treasury to pay for the maturity of debt in pesos; and sales reserves if the price of the dollar exceeds the ceiling of the 30% nonintervention zone at the current market level; and spring rate rates that rose to more than 70% per annum and dropped to less than 44% per annum, but back ago when the dollar quote was trying to escape.
– I believe there is no awareness of what the exchange rate runs when they start in Argentina. And as you say, with a dollar quoted in the top band of the non-interference zone suggests an end year level of $ 60, "depreciation mother". The Fund will tell the Central Bank not to intervene by selling below that level. And above that limit, which will reach you with the sale of up to USD 150 million a day?
– But given the spring interest rate, before reaching $ 60, absorb liquidity through the Leliq, the air navigation level of more than 100% per annum, as it happened on the exit of the Convertibility, in the first months of 2002.
– – Many talk about the "bomb" of the Leliq, but what worries me is that the Leliq is motivated to install fixed-term pesos, as the banks have a dollar limit. The problem is what will happen to the liquidity that financial entities do when doing business with the money they get essentially in the private sector, when they & I want to dollarize. That is why the question is, what happens when those pesos want to return to the dollar? And we do not know that Argentina is not convergence to balance, and that the IMF gives all the meat in the gap to be able to reach peace in the October elections. And then the next government must renegotiate debt.
– This might be, or another political sign …
– Certainly, and I think there is a conscience about the inconsistency of this scheme. And I will return to the point of reforming the Central Bank Organic Charter, because when you look longer in the long term, you can see that the financial base, in real terms, in the last 14 years was never as low as he is now, that is, He has made such a financial crunch so strong. And you have to go back the same to find a real interest rate of this type. Financial adaptation of this intimidating nature. So all the arguments that are being made for an inflation case are "the small machine", the process of default, the truth is that all the papers are burned. We continue to have a historical inflation rate.
– You know better than me that the effects of the changes in the financial and financial policies will be affected in a minimum period of 8 months and can mature in up to 2 years, with fewer than 5 has elapsed since the adoption of the basic financial civil liability commitment and no financial money …
– No-one ignores, and the Government knows, that inflation acceleration is directly related to the reduction in value. And this does nothing more than confirming all the empirical and theoretical evidence that, which means that a speed acceleration problem is associated with what is happening with exchange rate across Latin America, and especially in Argentina. And, "on wet rain" the tariffs. So, if you analyze what happened to wholesale prices, the user, and the dollar, there are depreciation and disks. That is, two policy decisions that are part of this Government's strategy.
Therefore, what is worrying to me is that, since it is clear that inflation has no central explanation, even so in the case of unreaded countries that have the characteristics of Argentina, due to the breadth of financial policies, the Fund can come and ask to change the Organic Charter of the Central Bank, downgrading the growth of GDP and employment. What does that mean in practice? Among other things, prevent freedom degrees to determine the credit channel. When we changed the Organic Charter in 2012, it was precisely that it had powers to determine interest rates; to be able to lead the credit by creating norms for banks to allocate part of holding private savings to productive credit, SMEs or for investment.
– Is the IMF recommendation referring solely to writing a ban on the Central Bank that finances the National Treasury?
– Several things are said in the IMF Memorandum. One is "reinforcing the independence of the Central Bank". In fact, the alleged autonomy of the "political power" ends in dependence on financial power. The implications of BCRA's ability to regulate credit conditions are not small.
And the other concern that they want to move is about the possibility of the BCRA funding the Treasury. That is crazy, practically all of the world's central banks can finance the Treasury directly or indirectly. They do it in USA, Canada, Japan, India, among others. In fact, by Statud the US Federal Reserve has to transfer all proceeds, after paying administrative expenses and the content of the capital forecasts. Why requires this to be adapted, especially when there is a period of Federico Sturzenegger in the presidency of the BCRA, there is a self-restriction in the profit transfers or Transactional Proxies to the National Treasury (ATN). That commitment had centralized with the arrival of the IMF, to such a point, in 2018 resigned Treasury funding for more than $ 100 billion, and that was free funding . And now it's replaced with Lecap, Boncer, Letes …
– Bonus festival …
– The bond festival, that's why I think it's a very worrying application. And what do they talk about when they say we need to improve Central Bank's independence and transparency? In 2017 the Central Bank had a negative consequence. The asset net asset ratio, they told us that we did nothing, almost half of what was the average throughout our government platform. The BCRA is now less strong.
– In this situation, what are the economic policy recommendations, and what would be their effects?
– The first thing that must be stated is how the rules of the game are rebuilt, so that the surplus, to the Argentine savings, is more convenient to produce goods and services. In order to do so, the forms on financial assets must endeavor to compete as promptly as profitable as the productive sector. Then you have to lower interest rates. If you're asking me, how does the interest rate decrease without provoking a capital flight? You must regulate the release. And you have interest rates consistent with the profitability of the productive sector. We have to reconstruct conditions so that there is an improvement for those who want to save in pesos.
– That is the permanent dysotomy, the attractive rate to invest in the real economy, it is not the same that save in a financial asset, to decide to defer existing usage when searching for the benefit of the future. How do you achieve that balance?
– One can provoke to disrupt the markets. We did, for example when We told the banks that the percentage of the deposits, namely the savings of Argentina, must go to the real economy, to small and medium-sized enterprises, to the investment, and they must get a cap at interest rates, the rate went down of interest. Then, there are, there are other interest rates for other operations. And we also offer that the savings can not be paid less than a certain level of rate, because we know the profitability of the banks, it's a very high, of the highest in the world. That does not mean they do not earn money, but not at the expense of productive activity.
I think that we have to reconsider, in fact, how to converge towards a financial balance, by looking at which sectors to be taxed, and especially if there are incredible returns as it had recently contacted close to the financial issue. It seems essential to the operation of the internal market. When you talk so much about the "departure to the Portuguese" it seems to me that you do not refer so much to the restructuring, that it was not in Portugal, but to say "we must grow back to regain the ability to face our commitments "
– How can domestic use be encouraged, without exacerbating inflation tensions?
– I believe that we need to consider how the distribution bid is administered. What needs to be taken out of the horizon of expectations is clear, as it has always had an impact, and even more so now, is the question of the devaluation. That is why I put so much emphasis on the need for external balance. It seems to me, in the short term, that there is scope to redefine a policy of replacing intelligent imports, in a manner expressed frequently with scientific-technological capabilities. In fact, the industry operates at 50% of its potential. It is essential to promote the shock of investment in a way that is consistent with the improvement of the use, attending what is happening with the supply, and improving productivity.
Re-thinking about competitiveness in systemic terms, and improving productivity is essential. Because of that there must be an investment, which is not sufficient enough, especially in the trading sectors. There is a need to reconcile a consensus around another project to the current one. I believe that this Government has made a lot of social and economic harm, and that 4 years would now be very bad for a country. Moreover, the challenge of the development is becoming increasingly difficult. That is why I started by saying that this is a more underdeveloped and less autonomous country. I believe that we have to regain sovereignty in the management of economic policies, and we have to sit down with the IMF, but based on a different proposal.
– We will also have to sit with the rest of the political leadership, as it is a country that has been reluctant to seek consensus. How do you think it can be achieved?
– It seems to me that the unit does not have to be a photograph to beat Mauricio Macri. The unit always requires what was proposed Rogelio Frigerio (current Minister of Interior Interior) sectarian and social class league. Sit with the entrepreneurs and identify what the challenges are, their commitments, what conditions are produced, but also what their responsibilities will be; the same as the labor sector. The consensus should not be just between the political leadership, but also with the business sector from industry, agriculture, services, trade union organizations and social organizations.
It seems to me that this consensus must be promoted by giving the axis, although it may seem like simplification, in work and production. Which rules of the game, what conditions, what difficulties? Nothing worse than volunteering. I also believe that we must be aware that this suggests a comprehensive review of this economic model. It can not be broken.
– He mentioned that we will have to talk to the Fund again. If Kirchnerism returns to the government, it would break again with the IMF, that is, it would cancel all debts with the reserves in the Central Bank, or do you consider that, given the financial constraints, just need to re-negotiate the maturity of the debt?
– Our government did not break with the Fund, canceling the debt in advance.
– – Debt was the cheapest in the market …
– That's the best win for Argentina. We can not explain what could be done later if we had not removed the IMF intensity. It was not a financial cost of the debt. Things done: strategic management of natural resources has been restored; Social Security Recovery; it could affect the labor market, try to improve, to devote salaries; Many things that would have been impossible under the protection of the Fund. That is for me to restore a huge sovereignty, which we have lost.
Then, indeed, it will be difficult. But also for the IMF, because it will not fail again in Argentina. It is a result of a strong failure in the country, and also in many other people who are truly overwhelming troika programs. That is why it would also be interesting for him to leave viable repayment, but without sacrificing growth.