camberiu
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- Mar 24, 2012
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I think you are absolutely right. There are two separate issues here:
1 - protection of a local industry, of the local jobs, etc.
2 - the various mistakes the government makes in trying to implement it
I think your premiss that the trade barriers are in place to "protect local industry" is wrong. That might be the excuse, but I hardly think that is the real motivator. The real motivator is to maintain dollar servers at all costs.
Cristina's power is centered on the current clientelistic relationship the government has with the electorate, specially the lower classes.
The reality is that Cristina buy votes, via all the "para todos" initiative. That requires lots of funds. However Argentina has been locked out of the international markets since the 2002 default, so she can't finance it that way. The other option is through massive money printing, which is what she is doing. The side effect of that is that Argentinians are dumping pesos and buying dollars. So there are very few reserves. Without dollars, the clientelistic model fails and politically expensive reforms become necessary.
So the reality is that it is all about preserving dollars and the current model that keeps her in power. All this talk about protecting the industry is all BS.