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February 20, 2017
Friday, December 23, 2016

‘Macri’s appeal to the business elite didn’t secure its support’

By Leandro Renou
For the Herald

In his UCA office in Puerto Madero, Agustín Salvia draws from Chilean experience to give an example of an economic policy tool which improved the quality of life for some of the population.

“Chile resolved its housing by using the private financial sector. It did so by convincing the middle class to place money in building societies which yielded significant interest rates in a context of low inflation. Those banks borrowed the money for public housing from the private sector at an interest rate regulated by the state. Here the housing market and loans are absolutely private. The private sector needs other rules and conditions — it needs to understand that if it lends, it will not go broke,” he said. “But these ideas are a step ahead. You need to understand that there is a crisis in Argentina but it’s time to start thinking about the day after.”

So the problem is more political than economic?

Well, I don’t know. The thing is that it would be illogical to ask this today of the government in this economic context because the government is very weak in order to make these changes. If they had to regulate the banks today so that they extended more loans, they couldn’t do it because at the moment you cannot lower interest rates much without worsening the crisis.

There is a big debate as to what so-called “populist” governments and their opposites like Macri do well and what they do badly ...

The present government is more heterodox than orthodox. It is driving almost the same model as the previous government after changing some macro-economic variables. Its policies and logic might be different but there hasn’t been much change in economic behaviour. It tried at first to set a different course in economic policy, freeing prices before, during and after the devaluation without having closed any supermarket or intervening in any market. They were mistaken and suffered an extraordinary inflation and did not know what to do about it. Macri’s government practises heterodox policy with a fiscal deficit. The question is how much real power can you control and what alliances do you have to make to move ahead with a different policy. What is happening in the region is that rightist movements have arisen to criticize populist governments. If they succeed in forming an alliance of classes and political power capable of implementing a project of development with less poverty and more social integration on a capitalistic and free-market basis, they will show that they can be successful with an alternative model to populism. That’s what at stake for the new politics. The Mexican government is heterodox and so is the Colombian and so is the Chilean even if some people call them liberal. But the difference is that they aim at a new alliance of classes and power.

And how does the Argentine government fit into that map?

Macri is encountering the frustration that despite appealing to a political and economic élite which the previous government could not reach, it has not secured a commitment and an active adhesion from that élite for its policies — hence the disappointment with businessmen. But what should the position of his political alliance have been? Boys, here you all have to make some sacrifices like businessmen elsewhere? The Brazilian industrial bourgeoisie extended this credit to Luiz Inácio Lula Da Silva and then took it away from him. And that logic is burning away some of the Let’s Change electorate. In this context the best thing the Anses social security administration and the Labour Ministry can do is mass produce projects to maintain the social peace, which is possible today from a political viewpoint.

@leandrorenou

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