07/28/2021 11:31 AM
Clarín.com
Economy
Updated 07/28/2021 11:37 AM
As usual, the former Minister of Economy of the Menemism, Domingo Cavallo, analyzed the current problem facing the economy.
"The current crisis is more difficult to resolve" than hyperinflation, he assured. And he warned that
"if the government devalues without being convinced and united, a Rodrigazo could occur
.
"
The former Minister of Economy assured that the economic situation today "is very complicated."
"We have been living in stagflation for ten years
,
" he
said.
And according to his vision "it is the most complicated economic problem to solve, rather than hyperinflation."
"When a phenomenon of hyperinflation occurs, as occurred between 88 and 90, it is evident that
the organization of the economy and the management that was carried out up to that moment must be completely changed
,
" he
mentioned.
In an event organized by the Argentine Business Forum, the economist assured that an agreement with the IMF should include economic and opening reforms but that
"they should not be imposed."
“It is a dramatic, serious phenomenon. But if you find a way to point out a new economic organization and convince people that from that moment the rules are going to change, explain them well and people believe you,
you can't stop the hyper ”
, he analyzed. And he added: "We have been living in stagflation for ten years, which is the most difficult economic problem to solve, rather than hyperinflation."
Then he elaborated on why a stagflation is more complicated to solve than a hyper one.
"A stagflation is more complicated because
people are not convinced that big changes are needed.
Rather, they think of solutions that are patches, which are very partial. One fixes one and the other is deranged, which is what happened along the way. of the last ten years, "said Cavallo.
In that sense, he opined that Argentina is in "a particularly difficult situation."
"The Government continues to rely on controls, interventions, nationalization, economic shutdowns that are the cause that we are so bad," he said.
The former head of the Treasury during the '90s also spoke of the Minister of Economy Martín Guzmán.
“He entered the Government with the mission and the idea of normalizing the debt, which was certainly something that was needed.
But in all other aspects
his opinions
do
not influence,
I do not know them, but I imagine them because he is a professional economist related to a Nobel laureate like (Joseph) Stiglitz, so it cannot be said that he does not know economic theory ", he opined .
The role of Axel Kicillof
In that sense, Cavallo said that "the Government has other members and has a great intellectual influence from the people around Cristina Kirchner" as is the case of Governor Axel Kicillof, who, in his opinion,
"has completely different ideas from the conventional ones. that have allowed many countries of the world to progress ”.
“Since she appointed Kicillof as economy minister, she became convinced of something completely different
.
(He started a) march towards socialist but old ideas, not socialist after the fall of the Berlin wall ”, he declared.
His diagnosis was conclusive: "The Government continues to rely on controls, interventions, nationalization, and shutdowns of the economy that
are the cause of us being so bad."
Finally, when asked about a possible devaluation after the elections next October, the father of the convertibility system said that
"something will have to be done because the exchange rate will be behind.
If they follow Kicillof's recommendations, they will try to recover it gradually. "
Will there be a devaluation after the October elections?
Going forward, the former Menem official does not believe that the Government can change the situation.
"I do not see that this situation will change much whatever the result.
It may change from 2023, unless as a result of the result the
Government decides to make a 180-degree turn
in the way it approaches the economy. I do not think it will. that could happen. If Alberto Fernández had all the power and did not have Cristina managing it behind the scenes, maybe one could conceive that he would hit that turn, "he reflected.
However, for Cavallo,
"you need great political leadership and a great ability to persuade people.
It is Cristina herself who could take that turn. She
once understood how a well-organized economy works
,
" he
concluded.
What was the Rodrigazo
The rodrigazo was an inflationary explosion. It began in June 1975
, when the newly assumed Minister of Economy, Celestino Rodrigo,
abruptly
tried to correct
a series of pressures and imbalances
accumulated since 1973 by the governments of Cámpora, Perón and Isabel Perón.
To eliminate the distortion of relative prices, the then minister attempted a shock policy that included a strong devaluation of the currency and increases in public tariffs of up to 180%, and ceilings on wage increases agreed in collective bargaining, the purpose of which was to delay real wages.
The measures triggered inflation,
which went from 24% in 1974 to 182% in 1975,
beginning a decade and a half of inflation rates above 100% per year.
This also produced a shortage of a large number of essential products, such as food, fuel and other supplies for transportation.
The Rodrigazo took place during the presidency of María Estela Martínez de Perón and the management of the then strong man of the Peronist government, José López Rega.
YN
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