Right Vs Left

[Jeremias]

Argentines use "gringo" A LOT.

Some Argentines have started using gringo, occasionally and during the last decade (because of influence of foreign movies), but not in a serious, offensive way. Well, except for Heinze. Much more used, is 'yanki'.
As to Italians, they are called Tanos, certainly not gringos. In BsAs in any case.

 

[Matiasba]

I still maintain that one of the problems with Peronism, no matter which moment in time you decide is "real" peronism, is that the deal that was made between old money, labor unions, the church and the military, is still basically how things are decided. The church, I suppose, has much less power than it did, but the old money families have always had a disproportionate say.

Hence, the statement "argentina is not competitve" when referring to exports, is received belief, but not true. Argentina is not competitive except where the powers that be insist they be allowed to compete.

For instance wine, olive oil, and agricultural products are allowed to export at competitive prices, because the wealthy own those producers. But small PYME type industries have barrier after barrier to export.
I know several small businesses in Argentina who have at various times done well exporting- and the barriers have never been price, or quality, or design- they have always been Argentine government friction on duties, export fees, shipping logistics, and so on. It would be easy enough for the government to still prevent cheap chinese imports IN, but encourage exports OUT. But they dont. The financial system is crippled and outmoded, and many of the results are not doing the slightest to capture unpaid taxes, stop capital flight, or end corruption, but they do make it impossible for Argentine PYMEs to export.

The government should be focusing on Value Added manufacturing, rather than taxing raw material exports. It should be hosting trade expos abroad, and setting up a common Argentine Amazon shipping and distribution hub in, say, New Jersey or Miami- where all small PYMEs can easily export in bulk and one shipping center will sell to the entire USA thru Amazon and Ebay. It would be a bargain, compared to the export income, the jobs, and the general boost to the argentine economy.

There are several sectors that Argentina is very competitive in- textiles, clothing, shoes, leather goods, furniture, jewelry, small scale industrial design housewares- I know people in many of them who have against all odds, exported and made money. But always its an uphill climb, because of Argentine Government hurdles. Thats stupid, and, as I mentioned earlier, those hurdles are far lower for wine or fruits or other products that benefit oligarchs, but employ fewer at lower wages in the provincias.

Yes its true that Arg is competitive in some sectors, but thats agro industry. Olive oil, or wine, or leather, or meat, or soy.... a ton of ANY of these products worths a lot less than a ton of Mercedes benz, or Hyundai.
I meant manufactured industry, heavy industry, not commodities, not shoes or leather or furniture... cars, planes, computer stuff, we dont have a lot (we used to have a lot more) and what we have is not competitive for export (expensive, due the high salaries, because of the unions, or peronism, thats why they always want to devaluate, and also crappy, not high quality) so we import from China, hiper competitive, low salaries, very cheap products, and we end paying chinese jobs instead for argentine jobs.

 

[Matiasba]

Some Argentines have started using gringo, occasionally and during the last decade (because of influence of foreign movies), but not in a serious, offensive way. Well, except for Heinze. Much more used, is 'yanki'.
As to Italians, they are called Tanos, certainly not gringos. In BsAs in any case.

No.
In the entire Argentina we call gringo to the foreigner since decades. Gringo Heinze is one example, gringo Scotta, there are more.
To the italian, the blue eyes or blonde or white skin, or german, or british, or french, it has been like thhis for decades.

And what you say about movies is true.

 

[Dougie]

For instance wine, olive oil, and agricultural products are allowed to export at competitive prices, because the wealthy own those producers. But small PYME type industries have barrier after barrier to export.
I know several small businesses in Argentina who have at various times done well exporting- and the barriers have never been price, or quality, or design- they have always been Argentine government friction on duties, export fees, shipping logistics, and so on. It would be easy enough for the government to still prevent cheap chinese imports IN, but encourage exports OUT. But they dont. The financial system is crippled and outmoded, and many of the results are not doing the slightest to capture unpaid taxes, stop capital flight, or end corruption, but they do make it impossible for Argentine PYMEs to export.

Very true! I know some people that have pymes that manufacture leather goods and jewelry and their products are high quality and well priced for the international market and the hoops that they need to jump through to export are ridiculous. You'd think the government is disincentivizing it. Taxes, export fees, high shipping fees, high banking fees, etc. A few years ago the government started something called "Exporta Simple" to try to bring down the costs and paperwork for pymes to export, but it doesn't go far enough at all. Still not so simple.

The wealthy, well capitalized corporations are the ones that benefit from all these regulations, taxes and fees because they are the only ones that have the money to deal with it.

 

[Dougie]

Cars, planes, computer stuff, we dont have a lot (we used to have a lot more) and what we have is not competitive for export (expensive, due the high salaries, because of the unions, or peronism, thats why they always want to devaluate, and also crappy, not high quality) so we import from China, hiper competitive, low salaries, very cheap products, and we end paying chinese jobs instead for argentine jobs.

Crappy, low quality products are also a consequence of decades of import substitution policies.

 

[antipodean]

For instance wine, olive oil, and agricultural products are allowed to export at competitive prices, because the wealthy own those producers. But small PYME type industries have barrier after barrier to export.
I know several small businesses in Argentina who have at various times done well exporting- and the barriers have never been price, or quality, or design- they have always been Argentine government friction on duties, export fees, shipping logistics, and so on. It would be easy enough for the government to still prevent cheap chinese imports IN, but encourage exports OUT. But they dont. The financial system is crippled and outmoded, and many of the results are not doing the slightest to capture unpaid taxes, stop capital flight, or end corruption, but they do make it impossible for Argentine PYMEs to export.

The government should be focusing on Value Added manufacturing, rather than taxing raw material exports. It should be hosting trade expos abroad, and setting up a common Argentine Amazon shipping and distribution hub in, say, New Jersey or Miami- where all small PYMEs can easily export in bulk and one shipping center will sell to the entire USA thru Amazon and Ebay. It would be a bargain, compared to the export income, the jobs, and the general boost to the argentine economy.

There are several sectors that Argentina is very competitive in- textiles, clothing, shoes, leather goods, furniture, jewelry, small scale industrial design housewares- I know people in many of them who have against all odds, exported and made money. But always its an uphill climb, because of Argentine Government hurdles. Thats stupid, and, as I mentioned earlier, those hurdles are far lower for wine or fruits or other products that benefit oligarchs, but employ fewer at lower wages in the provincias.

No business is naturally uncompetitive. A lack of competitiveness is always the result of a choice. Unfortunately as you point out in the Argentine case, this choice is more often than not made by the government.

Being competitive exporting goods and services in a global market requires consideration of:

• First rule of competition is that competition does not depend on you, it depends on your competitor (Argentina needs to get its head out of its own ass)
• Access to FX and ability to use that FX (to buy quality components, materials, equipment and services that Argentina simply does not or cannot produce, get goods to market abroad and market goods abroad)
• Cost of labour is a critical factor in the cost of goods sold (high-tech production employs few, but pays well vs. basic goods employ more but pays poor, plus it competes with lower cost countries with poorer human rights. Argentina actually has a fairly "low cost" professional service sector which could be exported but ...)
• Reciprocity is usually required to access foreign markets (this means giving market access as well as taking it)
• Nimbleness and adaptability are needed to react to changes you cannot control (this means enabling businesses to adapt quickly and ending things that become outdated and/ or cannot innovate to focus resource on adapting to new things that do actually work)
• Quick response times are needed to get goods to market and react to demand (this means less red-tape, better productivity from workers, less government involvement in the process, and most of all it it needs to be worth the time of businesses in the first place)
• Skills and innovation are what make the most money ("Manufactured" things and services that make the most money are things people abroad genuinely want that they can't get cheaper or better elsewhere which generally implies having a niche or innovation. Yet many of the best of Argentine minds go abroad to earn more money and live easier lives and those that remain don't have the money to fund meaningful R&D programs to let their ideas take off and many more suffer an education that offers no real global or modern perspective)
• Investment is essential (Argentina can't do it on it's own. It's glory days are over and it is a poor state just pretending to be something and printing monopoly money while no-one is looking. This means it needs to attract foreign and domestic private investment, and opening these wallets requires trust, rule of law and political discipline)

All of the above points however go to the heart of what Peronism and also Argentine Unions fear and resist the most. Thus we run into the brick wall time and again as if frozen in time and Argentina fails to be competitive - as any global ranking will attest to year after year.

Curiously none of the above actually requires an end to the social safety net or social conscience, nor reducing quality of life for workers. In-fact the above points are fundamental to modern social democracies, which Argentina claims to want to be. The money a country makes from market participation actually funds and strengthens their social programs which in turn strengthens their economies.

I do think however for wine, fruit, olives the real reason is that they are simply not big employers (few political votes involved) and they produce in surplus and have saturated local markets where they don't need to worry about competing in the first place (try buying Chablis here...)

"Fortunately" (?) with the economic carnage we are beginning to see in Argentina including mass unemployment, structural reforms should be less of scary prospect for unions and the government as the country needs to rebuild anyway to get people back into work. The trillion dollar question will be if the government really will take advantage of this opportunity to make changes for the future in this direction or will just take us on another ideological vuelta.

 

[Alpinista]

1) the 90s peronism wasnt in fact peronism. They did the exact opposite of historic peronism, they did everything ANTI peronist. In fact, the whole spectrum of historical antiperonist political actors, supported them. They used the party to get to power and then do the exact opposite they said in campaign. And given that we came from hiperinflation and took it down to zero in two years, poor people voted for them. But that was not magic, we paid a huge cost, and still do it today.
2) protectionism is Argentinas model. Same as Brazil. Opposite to Chile, opposite to Mexico, for instance. With Brazil as partners, we can in some level avoid the necessity of import. That worked for some time. Now not. They should have made that alliance stronger. There were huge oportunities and that did not happen. Now its almost impossible, but with time who knows.
Regarding the jobs. It wont be easy, we know. But it will be better than now. Or the last years. The jobs will have to come from the exterior, clearly, some good investment to put us in movement.
3) international companies come, do the money and take it home. They do their bussiness, do not employ THAT much, and they take the money to never return it, or re invest it, or grow, or believe in the country. Same as big local companies. They take advantage of local market, and when the bad cycle begins, run away. Furthermore, because of their size, in some way, they provoke this crisis.

Im not friend of the open up thing. We did it several times. All of them with catastrofic results (the last was Macris).
Im confident though, in our internal force, I will give a chance to someone with good ideas, as this government supposed to be.

This is what I am talking about: taking over responsibility. Whether Nestor actually famously he said it or not (El mejor presidente desde Peron), the Kirchners were certainly not opposed to Menem at the time.
And when exactly did Macri "open up" things? Unfortunately, he didn't. He couldn't. (gradualismo ... ) Argentina is for more than one hundred on the path of constant decline. During this time it went more and more into economic isolationism and protectionism, never became an open, free trade state. But people here really believe that it was the "neoliberals" ....

 

[Alpinista]

I would also point out that, in Finland, the government owns all or majority parts of all liquor stores, the airline, the major oil refining and distribution company, the electric companies which generate and distribute power, and has a much tighter control on suppliers and subcontractors to the government than Argentina- mostly segments are owned and run by the supermanagerial class for profit in Argentina.
By any standard, Argentina even before Macri was far more neoliberal than Argentina.

The term neoliberal does not mean open borders to trade- obviously the weird Peronist heritage of Argentina is heavily focused on restricting imports and taxing exports, which is rare, globally. But that economic isolationsim- the reason you cant just transfer money from bank to bank, order from Amazon, or buy an iphone for a reasonable price- does not instantly mean that Macri was not feathering the beds of his peers. He certainly was.

I assume you wanted to say: "By any standard, Argentina even before Macri was far more neoliberal than FINLAND"?

It is funny that you mention the airlines. I don't think that Finland is subsidizing its airline on an annual basis? They might receive a bailout in times like these, but certainly not on a regular basis. I also don't think that the Finnish Young Socialists are extorting Finnair's competitors in Helsinki. And I certainly don't think that the crew members of the Finnair are obliged to stay for overinflated prices at the hotels which the president owns.

And indeed, neoliberalism does mean open borders to trade. It does mean deregulation, globalization and free trade. What you refer to is simply government spending (which is admittedly also one of the factors, but certainly not the defining one).

I have no problem that you are opposed to free trade and capitalism. I am simply wondering why two facts are constantly being ignored and denied:
1) Argentina's economic model (whatever that exactly is) is not working
2) Argentina's way can certainly not be described as (neo)liberal. This was never the case over the last 100 years. It was always a highly protected market

On a positive note, Argentina is still doing better than Venezuela:

La Argentina se ubicó en el puesto 62 sobre 63 países en un ranking de competitividad: sólo superó a Venezuela

Ambos países se ubicaron en las peores posiciones de una clasificación donde América Latina fue la región peor rankeada. Chile quedó registrado como el país latinoamericano más competitivo, en el lugar 38

www.infobae.com

 

[toongeorges]

so we import from China, hiper competitive, low salaries, very cheap products, and we end paying chinese jobs instead for argentine jobs.

It appears that the average salary in China has surpassed the average salary in Argentina, so even with the loan handicap China remains competitive in Argentina.

 

[Ries]

I assume you wanted to say: "By any standard, Argentina even before Macri was far more neoliberal than FINLAND"?

It is funny that you mention the airlines. I don't think that Finland is subsidizing its airline on an annual basis? They might receive a bailout in times like these, but certainly not on a regular basis. I also don't think that the Finnish Young Socialists are extorting Finnair's competitors in Helsinki. And I certainly don't think that the crew members of the Finnair are obliged to stay for overinflated prices at the hotels which the president owns.

And indeed, neoliberalism does mean open borders to trade. It does mean deregulation, globalization and free trade. What you refer to is simply government spending (which is admittedly also one of the factors, but certainly not the defining one).

I have no problem that you are opposed to free trade and capitalism. I am simply wondering why two facts are constantly being ignored and denied:
1) Argentina's economic model (whatever that exactly is) is not working
2) Argentina's way can certainly not be described as (neo)liberal. This was never the case over the last 100 years. It was always a highly protected market

On a positive note, Argentina is still doing better than Venezuela:

La Argentina se ubicó en el puesto 62 sobre 63 países en un ranking de competitividad: sólo superó a Venezuela

Ambos países se ubicaron en las peores posiciones de una clasificación donde América Latina fue la región peor rankeada. Chile quedó registrado como el país latinoamericano más competitivo, en el lugar 38

www.infobae.com

I am not even vaguely opposed to free trade, or capitalism. I have been, in fact, a corporation for 20 years now. But I do not believe that "capitalism" is one thing- it is a one word description of dozens of different economic policies that can be implemented in and infinite variety of ways. Most European countries, in fact ALL developed countries, have a mix of tariffs, duties, trade restrictions, government support of specific industries, and government / labor agreements.

The devil, as always, is in the details.

No country practices true "free trade".

Argentina could do better.

The initial agreement between the ogliarchs, the government, and the sindicatos was made 80 odd years ago, and the global economy, and Argentina, were very different places.
The labor force was mostly recent immigrants, who had relatively little education, and were poor. Now, we have an argentina with a much more educated workforce, and industrialized agriculture and manufacturing that does not require thousands of manual laborers.

But the export model is still based on 1950s realities.
Nobody ever does well exporting raw materials.
Value Added is where its at- look at the Chinese, who have been raising wages 10% to 15% a year for a decade now, and using government mandates to offshore cheap manual labor factories to Indonesia, Bangladesh, and Vietnam. They figured out a long time ago that investing in high tech value added exports is better for everybody.
But not here- we still have the soybean farmers running the economy. Because they are rich, and their parents were rich, and their kids went to Harvard.

The Aerolinas history is a good example- nationalized/privatized/nationalized/privatized, and repeat. Each time, privatize the profits, nationalize the losses.
The sindicatos assisted in the dismantlement of the national rail network, and still to this day resist modernizing it- even though, globally, its clear the future is in high speed rail, not in 50 year old Diesel Mercedes trucks driving 100km an hour on Ruta 3.
Argentina has a unique situation where the rail right of ways are all still there, easily reclaimed, at a fraction of the cost of building national network of autopistas.
And yet- nada.

Or, we see a push by a couple of wealthy guys to export lithium so the chinese can make money making electric car batteries to sell back to us.
Argentina has a good engineering education system- freelance argentine software engineers work online for global customers. Many expat argentine engineers work globally. There is no reason the government couldnt set up a state agency to develop battery manufacturing with local lithium salts, and export a high value added product.

This is not a capitalist versus socialist issue.
Its a problem of traditional power structures resisting change.
And taxing soybean exports, as the K government did, is a stupid way to keep things running.