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Montag, 16. Dezember 2013

Clarin And the economy has also lost its spell

And the economy has also lost its spell
Sunday, December 15, 2013
By Alcadio Oña
An ex-minister with access to the climate in the offices of power says: “They are disoriented, overwhelmed by the problems and without much capacity for a response.”
Inside the Central Bank, the atmosphere is not very different: worry reigns, they improvise and run behind events without ever getting in front of them, as proven in the exchange rate policy.  At the top, Juan Carlos Fábrega, the boss, has little of his own game, and some decisions that that are fully on his turf are not coming from his ideas: it’s evident, there are others giving orders.
None of what the sources say contradicts what may be perceived on the outside and is expressed in the unhinged firing of officials: that is, that the expectations created by the ministerial shuffling are already running out and are showing that little or nothing has changed. Moreover, after the reshuffle new complications jumped up, many serious and unexpected, such as the looting, the police rebellion, death and fear.
They are virtuous, because they involve a different air in methods, daily press conferences from the Cabinet Chief deliver less and less. Often, they are waves of statements of little specific substance and lacking any precision on what the government is holding as its roadmap.
Nor is it clear why or for what reason Axel Kicillof rose up, if he experiments with more of the same and in bigger doses, there are doubts gathering about his capacity to lead and even appears ill-equipped for all that he is taking on.  The rumors agree that he landed there by the hand of Máximo Kirchner.
Someone who occupied a relevant position in the Central Bank puts his finger directly on a sensitive zone: "I have the suspicion that are putting makeup on the stock of reserves. There was a press report that differed by US$300 million dollars from the real amount, which came to be known after 48 hours and only seen by the analysts. Coqui (by Jorge Capitanich) said in three days it had increased by 20 million, but he hid that it had been influenced by the increase in value of gold."
Since they have started to falling without a rest, the BCRA-denominated assets are a key fact in exchange rate movements and the formation of expectations. But if the alleged maneuvers exist, it would be before a copy of the practices of the INDEC.
Soon, the dollars provided by the grain producers will being to be noted, under an enviable exchange rate assurance, and the dollars being brought in by the Chevron-YPF duo. The question is whether the time that is gained this way will serve to improve the panorama.
There are already higher doses of the same halt on online purchases and the squeeze on car imports, proof that urgency reigns, although in the case of the terminals they are passing on the costs by taking it out of production and employment. A similar medicine is being applied to the factories in Tierra del Fuego.
Now the targeting of cars and electronics also bears the stamp of the late reactions, as Kirchnerism has lived the entire time with a strong deficit in the foreign exchange balance of both sectors, without doing anything to turn them around and shrink the every growing energy bill.
Part of this picture dominated by urgency was the search for investment by Kicillof and Julio De Vido in China and Russia. With dollars as the goal, they will  have returned with a harvest limited to mere promises.
Meanwhile, the asset deterioration of Central Bank is on course like a runaway train.  It now has reserves of little more than US$30 billion and faces a liability estimated at 500 billion pesos. At the end of 2009, the ratio was US$48 billion against 200 billion pesos. Again, the Kirchnerist model.
Guillermo Moreno never passed a test in price control class. His last lesson consisted of keeping them more or less contained until the elections of October: "Then I go," he used to say to employers.
He went, effectively, and -- what happened? Two things: one, the INDEC said inflation was 0.9% in November, as Moreno would have done.
So says an analyst: "Since the middle of last month we have been seeing a true jubilee, pushed on, also, by the prospect of a price regulation, Kicillof-style.”  For December a real rate of 3 to 3.5% is projected, mostly in food products, which would lift the annual rate to 28%.
The dislocation in salary structure, which deepened during the K-era, represents another problem for the government, that pulsates in the background of the conflicts with the provincial police and what could come up with the rest of the State agencies and dependencies.
According to an INDEC survey, towards the second quarter of this year the average net salary in the provincial public sector amounted to 6,700 pesos a month and 6,100 in the municipalities. For the central administration of the nation, it’s up at 10.400, and 10,000 in the autonomous city of Buenos Aires.
Without warning, there is a gap of 50% between comparable jobs.
That wages agreed to under pressure for the provincial police have been increased from 33 to 100% is another sign of distortions and the delay that had accumulated. And one more, if the government also gives 8,000 pesos to the security forces that depend on the Nation. Finally, and in the way that is, reality ends up being imposed when there are unsustainable situations.
At the top of the remunerations are the oil companies, with salaries of between 24,000 and 33,000 pesos. And in the background are 4 million retirees, who are paid just 2,477: this is how things really are, even though the government preaches that since 2003 it has increased them by 1,551%.
This scenario reveals deep inequalities and balances and imbalances often associated with the pressure capacity of each element.
No one can validate violence or disrespect for democratic authorities, but it is hard to believe the explanations that the government gives. And it is well known that with the wrong diagnosis comes the wrong medicine.
Surely, there are a few and varied causes, but among those that cannot be put aside are the halting economy, inflation and an unequal and fragmented society.
The official statistics themselves add that a quarter of young people under 25 years are unemployed. Many or most of them have parents who have for a long time been unaware of what a stable job is, which means it is not too much to say, because work bring order, fixing the scales of values and where respect for hierarchies is weighed.
Another fact that also speaks of the future arises from the PISA test, done among 15 year-old boys from all over the world.  The latest one showed the poor quality of education in Argentina and reported, for example, that here, two of every three students do not know math.
The State can be big, powerful and interventionist, but it is proven that this does not guarantee public policies that are successful and projected towards the long-term. Governments should deal with such questions, and the sooner the better.

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