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The Poor Factory

2021-09-01T09:35:56.253Z


If we do not recover our industrial destiny, we will never defeat poverty. Daniel Larriqueta 08/31/2021 21:12 Clarín.com Opinion Updated 08/31/2021 9:12 PM José Alfredo Martínez de Hoz arrived at the Ministry of Economy as the main protagonist of the “Process” in March 1976. He knew what he wanted to do. Using the dictatorial protection of the military officials, he would carry out a structural modification of the economy and the social balances of Argentina. At that


Daniel Larriqueta

08/31/2021 21:12

  • Clarín.com

  • Opinion

Updated 08/31/2021 9:12 PM

José Alfredo Martínez de Hoz arrived at the Ministry of Economy as the main protagonist of the “Process” in March 1976. He knew what he wanted to do.

Using the dictatorial protection of the military officials, he would carry out a structural modification of the economy and the social balances of Argentina.

At that time, we were the leading industrial power in Latin America, surpassing Brazil and Mexico. We had the highest per capita income, a very low poverty and unemployment rate, and a first-rate education.

This powerful industry was based in Greater Buenos Aires and in smaller manufacturing belts of Córdoba and Rosario. But the primacy of Buenos Aires in volume, quality, specialties and urbanization allowed it to be considered the "industrial province" of Argentina.

Martínez de Hoz pointed to the structure of that province, due to a simple but long-term diagnosis that affected nothing less than the balance of power in the country. With the insistent assertion that a major part of the industry was "artificial" - an argument that was already half a century old - the path of suppression could be traversed. For the minister, the matter had more substance: the "artificial" industries concealed a highly damaging pact that explained the continuing problems of the country. The pact consisted in that the industrialists were assured large profits thanks to a tough protection against foreign competition and that benefit allowed them to arrange good sectorial wages with the union leadership.

Businessmen and trade unionists shared the bargain of protection against consumers and all public purchases and investments.

And together they were strong enough to dictate the rules of government.

And they kept alive the electoral power of Peronism.

That pact had to be broken and the minister would come to that.

And the destructive combo was simple and straightforward, erase protection as much as possible, reducing tariffs and keeping the value of the dollar low to favor imports.

Videla-Martínez de Hoz did it. Whole loaves of industry collapsed, starting with tens of thousands of small businesses that had less resistance and that meant myriads of blue-collar jobs especially from Greater Buenos Aires, our "industrial province." And the river of the unemployed would be at the same time the river of the poor that already overwhelmed the Alfonsín government. And we went from a poverty of one digit to two in continuous growth. It was the new problem in Argentina, a direct result of industrial destruction.

A short time later, Menem-Cavallo insisted on the recipe with the presumption that a liquidation program for the less "competitive" sectors or specialties would heal the country and they repeated the gestures and reaped the results, relying on the sale of the "jewels of the grandmother ”- state companies - and the abandonment of the future to the maneuvers of financial capital.

We stopped being productive and became financial and handed over to the liquidation tens of thousands of companies that had managed to survive, and essential levers of the country's structure, such as the railways.

Remember?

"Branch that stops, branch that closes" decided the President in a rapture of efficiency.

The great national policy was reduced to accounting results.

The social consequences of this second industrial scrapping came immediately.

Poverty rates rose so much that we were scared, especially when we passed the value of 30%, something never seen in our country.

And the Greater Buenos Aires became a "problem".

The beloved "industrial province" hit rock bottom, it was no longer a land of entrepreneurship but a field of failure and social injustice.

And we had 2001 that showed us the ruin of the productive country while they made us believe that our bank tellers manufactured dollars.

But it wasn't all the damage.

Those same instruments, low protection and a cheap dollar exchange rate, appeared for the third time, the day before yesterday, in 2016-17, also anesthetized by the usual financial games that, as in 1976 and 1991, financed a fictitious present against a ruined future.

Plus the unmistakable canopy of that populist maneuver: a huge foreign debt, capable of making the country lethargic for years.

These three negative models, lived in forty years, are enough to sow discouragement, and the anomie that confuses us, prohibits us from dreaming and starting again on the path of doing.

But as measurable, it has structurally destroyed the sources of well-being and equality.

There is no mystery, the economic structure of the country has changed.

In 1975, before the first attack, the industry represented 50% of the national GDP.

Today, the industry does not reach 20%.

Gigantic modification!

And there are the poor, especially in Greater Buenos Aires, growing in inverse proportion to the disappearance of the industry, until now exceeding 40%!

Forty years ago we had 50 from industry and 10 from poor, now 20 from industry and 40 from poor.

It is another country.

It is commendable that many sociologists, political scientists, and some economists work hard to study and propose "solutions" for poverty.

But it is a very big issue and it has structural roots, which I have counted.

And it not only carries short-term economic and social damage, but also a condemnation of the essential values ​​of Argentina, the dignity of the people, access to all the rights of progress, the universality of education and health.

We have to get to the bottom of it: if we do not recover our industrial destiny, we will never defeat poverty.

Daniel Larriqueta is an economist, historian and writer.

Source: clarin

All news articles on 2021-09-01

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