Argentina's "anything-but-Libertarian exchange controls..." IMF meets in BsAs

[FrankPintor]

This is exactly the same thinking as companies that won't lower prices a little to increase profits by increasing sales volume.

The fact that the best government ever also shares this thinking reassures me no end.

 

[Redpossum]

One frustrating thing about Argentina's economy is that there are lost opportunities for revenue everywhere. Argentine government leaves so much money on the table.

1.) My persistent hobbyhorse - The Mile 201 Issue

2.) Regain government monitoring over imports and exports - thanks to Menem, the big Ag exporters are not directly monitored by the federal government. They instead report to the government on the amounts they export, sort of on an "honor system", and they cheat as hugely as you would expect. This became obvious with the recent bankruptcy of Vicentín. I know, it sounds crazy, but Menem gave away the store in the 90's.

3.) Regain sovereignty over the Argentine waterways. Build or buy new dredgers and reclaim control of which channels are maintained where. Argentina currently has zero dredgers, and the whole thing is controlled by foreign interests. The only incoming channel for large ships goes first to Montevideo, and only then to the port of Buenos Aires. That was not the case prior to Menem.

4.) Reclaim federal control over resource extraction. In the 90's this was farmed out to the provincial governments by, guess who? Menem.

There are many more, but these are the top 4 moneymakers that I can think of right now.

 

[Ries]

export taxes are a pretty sad revenue stream to depend on.
But the rich people in Argentina have successfully resisted tax reform for decades, and they pull milei's strings today, too.
Argentina makes most of its revenue from IVA tax which is highly regressive, and from export taxes on major ag products and raw materials. It also has a widespread tax on workers paychecks, but only about half work in the white and pay these taxes.
It has a very low amount of income from corporate taxes, or personal income taxes- much less of a percentage than most industrialized nations.
This is intentional, and it means the really wealthy, who own pretty much everything, pay very low taxes, while the working class pays a disproportionate amount.
100 or so families own all the major corporations, the utilities, the communications and tv networks, the press, ypf, and more.
They own something like 90% of the arable land.
They have no interest in a progressive tax system, and so we have a ridiculous 25% tax on food exports.

 

[elhombresinnombre]

The fact that the best government ever also shares this thinking reassures me no end.

Are you channeling Voltaire? Are we now living the best of all possible lives under the best of all possible governments in this, the best of all possible worlds?

 

[FrankPintor]

One frustrating thing about Argentina's economy is that there are lost opportunities for revenue everywhere. Argentine government leaves so much money on the table.

1.) My persistent hobbyhorse - The Mile 201 Issue

2.) Regain government monitoring over imports and exports - thanks to Menem, the big Ag exporters are not directly monitored by the federal government. They instead report to the government on the amounts they export, sort of on an "honor system", and they cheat as hugely as you would expect. This became obvious with the recent bankruptcy of Vicentín. I know, it sounds crazy, but Menem gave away the store in the 90's.

3.) Regain sovereignty over the Argentine waterways. Build or buy new dredgers and reclaim control of which channels are maintained where. Argentina currently has zero dredgers, and the whole thing is controlled by foreign interests. The only incoming channel for large ships goes first to Montevideo, and only then to the port of Buenos Aires. That was not the case prior to Menem.

4.) Reclaim federal control over resource extraction. In the 90's this was farmed out to the provincial governments by, guess who? Menem.

There are many more, but these are the top 4 moneymakers that I can think of right now.

I had to google Mile 201, and I found this nice explanation of the problem:

Conflicto en altamar. Los mitos de la pesca en la milla 201 y por qué es una bomba de tiempo ambiental

Los buques que están en el borde de la Zona Económica Exclusiva Argentina carecen de regulaciones, depredan el recurso y abaratan el precio internacional

www-lanacion-com-ar.translate.goog

It doesn't look like there's any solution within reach, though.

 

[FrankPintor]

Are you channeling Voltaire? Are we now living the best of all possible lives under the best of all possible governments in this, the best of all possible worlds?

Channeling Voltaire? We're only allowed to channel dead economists now, and maybe the occasional dead English Mastiff

 

[Redpossum]

Sangran las empresas del consumo masivo | La caída en ventas y exportaciones les pegan a frigoríficos y lácteas

La carne está en consumos históricamente bajos y el dólar planchado perjudica las ventas externas, por lo cual el sector está reduciendo personal. El caso Sancor evidencia por qué el modelo Milei derrumba los negocios de volumen.

www-pagina12-com-ar.translate.goog

The usual Google Translate deal, banner is in Castellano and story will initially appear in that tongue, but wait a few seconds and it will change to English.

Meat consumption is at historically low levels and the low dollar is hurting foreign sales, which is why the sector is cutting staff. The Sancor case shows why the Milei model is destroying volume businesses.​

Javier Milei's idea of a primary economy, focused on purely export-oriented activities, began to bury the volume businesses linked to mass consumption . As the official income policy tends to wage negotiations below a stable but expensive food inflation, in addition to price increases for services that break the pocket, sales will have much more moderate growth in the following years. That is, they will go from moving at a significant speed to a rather low cruising speed. This phenomenon, which is first seen in the lower household spending on essential goods, has already begun to make the companies that produce basic food baskets and fresh products bleed.


This week, two specific events occurred that show the crisis that food producers are going to go through. The best known, the 350 layoffs at the Sancor dairy. The other, a looming crisis at national meat packing plants, which due to the drop in sales and the low dollar (which affects exports), have already started laying off workers. According to Página I12 , this is a process of laying off contracted and temporary workers. In addition, most national meat packing plants have also reduced their slaughter rate given that there is no consumption.

Since the government does not look at these types of conflicts linked to the market performance in labor-intensive segments, the winners in this crisis were the Brazilian meatpackers. With more financial backing to resist, companies like Marfrig and JBS, the former Swift, are taking a good part of the slice of a market with a majority of national companies. This crisis has already caused officials in the meat sector to ask the government for a solution. Requests in vain.

 

[daveholman]

Sangran las empresas del consumo masivo | La caída en ventas y exportaciones les pegan a frigoríficos y lácteas

La carne está en consumos históricamente bajos y el dólar planchado perjudica las ventas externas, por lo cual el sector está reduciendo personal. El caso Sancor evidencia por qué el modelo Milei derrumba los negocios de volumen.

www-pagina12-com-ar.translate.goog

The usual Google Translate deal, banner is in Castellano and story will initially appear in that tongue, but wait a few seconds and it will change to English.

Meat consumption is at historically low levels and the low dollar is hurting foreign sales, which is why the sector is cutting staff. The Sancor case shows why the Milei model is destroying volume businesses.​

Javier Milei's idea of a primary economy, focused on purely export-oriented activities, began to bury the volume businesses linked to mass consumption . As the official income policy tends to wage negotiations below a stable but expensive food inflation, in addition to price increases for services that break the pocket, sales will have much more moderate growth in the following years. That is, they will go from moving at a significant speed to a rather low cruising speed. This phenomenon, which is first seen in the lower household spending on essential goods, has already begun to make the companies that produce basic food baskets and fresh products bleed.


This week, two specific events occurred that show the crisis that food producers are going to go through. The best known, the 350 layoffs at the Sancor dairy. The other, a looming crisis at national meat packing plants, which due to the drop in sales and the low dollar (which affects exports), have already started laying off workers. According to Página I12 , this is a process of laying off contracted and temporary workers. In addition, most national meat packing plants have also reduced their slaughter rate given that there is no consumption.

Since the government does not look at these types of conflicts linked to the market performance in labor-intensive segments, the winners in this crisis were the Brazilian meatpackers. With more financial backing to resist, companies like Marfrig and JBS, the former Swift, are taking a good part of the slice of a market with a majority of national companies. This crisis has already caused officials in the meat sector to ask the government for a solution. Requests in vain.

In a normal country, meat packers would be shoring up domestic consumption by lowering prices to keep their abbatoirs and employees busy. After all, it has to be significantly less expensive to move product to cities in Argentina than to other countries.
Again...a somewhat lower profit margin, but higher volume.

 

[Redpossum]

In a normal country, meat packers would be shoring up domestic consumption by lowering prices to keep their abbatoirs and employees busy. After all, it has to be significantly less expensive to move product to cities in Argentina than to other countries.
Again...a somewhat lower profit margin, but higher volume.

Certainly that is what Perón would have done. It is what any reasonable government would demand.

I was chatting with a taxi driver some while ago, talk turned to politics and he was expressing his discontent at the situation. Being ironic, I asked him "so, you're not a fan of the Peronists?". He did that snorting air through the nose sound that argentinos use to express disdain or disgust, and replied quite seriously, "Lo de Perón, no este porquería".

 

[Quilombo]

Related to the original topic, we were told last week the cepo ends this year, but today while Milei was claiming his tirade in Davos was doctored (lol) he said the cepo ends next year. So which is it. because the BCRA is running on fumes and besides a devaulation that Caputo says will never happen, I'm not sure how they plan to meet dollar denominated maturities without another IMF loan.