The Economist Carlos Melconian outlined today the main maxims that the economic program who is working with the Ieral of the Mediterranean Foundation and referred to the expressions of different political leaders who in recent days have spoken of dollarize the Argentine economy.
“Everyone who has a dollarization project has to call David Copperfield to fix the balance of the Central Bank, which is what I call the Church because it is a matter of faith: we have zero reserves and very high liabilities”he stated during a ceremony at the Buenos Aires City Stock Exchange.
At the event, he presented “the titles” of what the program would be, among which was the monetary regime.
“It is essential that a currency meets all the conditions to be a currency, voluntarily. This implies legally recognize the bi-monetary nature of the Argentine economy”. assured.
“Without currency, there is no local capital market. Without a local capital market, there is no financing for private investment by small and medium-sized companies, nor for access to durable goods and housing for families”, he added.
On the other hand, he said regarding the exchange market that any free exchange regime open to full capital mobility is a point of arrival, not departure.
“We have to go to a new exchange rate regime. I told former president Mauricio Macri that I didn’t know if that had to be done on December 10, not even well assumed, and it cost me dearly. But you have to think of alternatives without stupidities. Without reservations in the Central Bank, talking about dollarization is nonsense. But it is necessary to give the freedom to choose and legally recognize bi-monetary status”, he continued.
In the presence of former officials such as the former head of the AFIP, Alberto Abad, the former deputy Facundo Moyano and businessmen such as Eduardo Eurnekian, Cristiano Rattazzi, José Urtubey, Martín Cabrales, Rodolfo D’Onofrio, Miguel Acevedo, Guillermo Stanley and Mario Grinman, Melconian clarified that no leader was invited to the presentation because he did not want to make the act political.
“We are working on an ambitious program with a federal and productive vision that installs Argentina in the world that is capitalist, Western and progressive. This is not a macroeconomic program to stabilize, but reforms to grow, create jobs and improve the quality of life. It is 100% nonpartisan and we are not working for any electoral candidate. We start almost two years before the mandate renewal and this will be made available to whoever wins. We do not know who is going to be president and who is going to continue it. Argentina has to think of a program that continues”, he advanced.
In accordance with this, he anticipated that the next government will also be a coalition government and will have to face an investment rate that only replenishes capital and the return of stagflation. “In 80 years the average inflation was 145%, with which anyone who says that lowering inflation is easy is expelled from the team,” he claimed.
Another item he emphasized is that even without labor reform there are 8 million informal workers and he said that 50% of poverty is macroeconomic and the other 50% structural, with which it could be lowered in the short and medium term to the half.
“Public spending is the mother of the sheep. It increased 50% since 2008 and is unfundable. The flip side is debt and inflation. If I charge you cheap for the bus and electricity, I have to charge you 60% inflation”, assured and proposed a guide for a reform of public spending.
“It no longer goes to the subsidy. This format is no more. We are testing since 2013. We have to introduce rationality. We are involved in all the issues and they are all difficult. We must prioritize public investment, lower the cost of state administration and professionalize and improve social assistance”, he continued.
Finally, he insisted that the program is not a patch and has to be accompanied by a cultural battle. “For almost 40 years as a consultant, I have seen failures of these things that were left halfway or failed due to lack of experience. We do not underestimate the situation. At this point I am not a seller of colored mirrors, but we are very confident in the future. It is totally healthy to have profitability and money, it is what gives employment. It is a battle in which I am going to take the lead, ”he closed.
In addition to Melconian, other economists such as Rodolfo Santángelo, Camilo Tiscornia, Gabriel Rubinstein, Juan Luis Bour, Enrique Szewach and Pablo Goldin were present.