Companies Flee Argentina, and Coronavirus Is Just One Reason

[Sequoia1321]

Bloomberg - Are you a robot?

Recent article from Bloomberg, sounds like lots of companies are leaving Argentina. Seems to me these sort of issues might take a long time to fix, and might get worse before they get better. What are your thoughts about the future and what can be done to fix it, and if you think it will get improved?

 

[Renzi]

It's interesting that companies are moving to Brazil, and not unexpected. Bolsonaro is overseeing record deforestation and most that land is going to business interests. It's hard to compete with that, and in the short term, it's cheaper than moving factories to Xinjiang to take advantage of the fresh supply of prison labor (as opposed to dealing with"confrontational" labor unions).

In the UN's Human Development Index, Argentina (47) is still far higher than Brazil (79, puts it one place lower than Venezuela!). So Brazil is probably not the best place to look for solutions.

 

[Sequoia1321]

It's interesting that companies are moving to Brazil, and not unexpected. Bolsonaro is overseeing record deforestation and most that land is going to business interests. It's hard to compete with that, and in the short term, it's cheaper than moving factories to Xinjiang to take advantage of the fresh supply of prison labor (as opposed to dealing with"confrontational" labor unions).

In the UN's Human Development Index, Argentina (47) is still far higher than Brazil (79, puts it one place lower than Venezuela!). So Brazil is probably not the best place to look for solutions.

If you were president there, assuming president can do much, or the ruling party, legislator, etc., what would you do to solve Argentina's problems?

 

[antipodean]

If you were president there, assuming president can do much, or the ruling party, legislator, etc., what would you do to solve Argentina's problems?

Emigrate.

 

[jblaze5779]

If you were president you would have to tell poor people "no". You'd also have to tell them to get to work. You'd have to tell rich people "no" and tell them to quit stealing from the country. You'd have to tell unions that they should temper their expectations. You would need to fire most of the public sector worker and make them shift to the private sector. You would have to convince the foreign markets that argentina is good for any money lent to it.

In short you would never be elected president.

 

[Renzi]

If you were president you would have to tell poor people "no". You'd also have to tell them to get to work. You'd have to tell rich people "no" and tell them to quit stealing from the country. You'd have to tell unions that they should temper their expectations. You would need to fire most of the public sector worker and make them shift to the private sector. You would have to convince the foreign markets that argentina is good for any money lent to it.

In short you would never be elected president.

I have to agree with this. If the state intervenes too much, you get Venezuela, if it intervenes too little, you get Mexico. If multinational corporations don't like one president's policies, they'll move shop elsewhere (like the above article) and sink the economy. Basically foreign companies and creditors hold all the cards in Argentina and the president can do very little other than appease the side that gets him/her elected and pass the debt onto the next president.

 

[on the brink]

If you were president there, assuming president can do much, or the ruling party, legislator, etc., what would you do to solve Argentina's problems?

The first thing I would do is eliminate the "listas sabanas", and set up voting for individual district representatives. That would make them accountable to the electorate, and responsive to their constituent's needs.

And if I were the USA president I'd work to eliminate the Electoral College, and district jerrymandering as well.

 

[gracielle]

The first thing I would do is eliminate the "listas sabanas", and set up voting for individual district representatives. That would make them accountable to the electorate, and responsive to their constituent's needs.

The chances of that happening are less likely than seeing a snowy day in CABA during the month of July.
The last time that happened was on July 9, 2007. Prior to that was in 1918.

 

[on the brink]

Same for the chances of doing away with the Electoral College - more's the pity.

 

[Alpinista]

It's interesting that companies are moving to Brazil, and not unexpected. Bolsonaro is overseeing record deforestation and most that land is going to business interests. It's hard to compete with that, and in the short term, it's cheaper than moving factories to Xinjiang to take advantage of the fresh supply of prison labor (as opposed to dealing with"confrontational" labor unions).

In the UN's Human Development Index, Argentina (47) is still far higher than Brazil (79, puts it one place lower than Venezuela!). So Brazil is probably not the best place to look for solutions.

I certainly dont think that the companies move to Brazil because they deforest their jungles (which is a disaster, btw). And it doesn't have to do anything with human development index either. And it is also not case the case that Brazil is particularly business friendly (just one example: administratively, they have one of the most complex tax codes you could find on this planet. Consumer good groups in Brazil have bigger VAT departments than people working in marketing).
With all its deficiencies, Brazil is simply the more attractive option if you want to operate in the protectionist Mercosur market (the lesser of two evils).
Here we have a situation that it is nearly impossible to make money. Who would invest here? The International Red Cross?
You have criminal organizations in the form of trade unions which make life impossible to you as an investor. You have a 50% inflation and all indications say that it will sky rocket over the next twelve months. You have a socialist government that has absolutely no idea what it is doing. You have laws here that make it virtually impossible to lay off people and adapt (which means that companies only hire people VERY reluctantly). In short: you must be total mad if you invest here in Argentina.
But from a leftist point of view: is it in fact not a good thing that international companies are leaving? So the soulless corporations no longer exploit the poor, hard working people of Argentina and transfer abroad the riches of this proud country?