Far from the euphoria that Javier Milei shows for the approval of the Bases Law, Analysts and large businessmen are cautious about the consequences of the new legislation. The distrust that Milei and the economic plan generate in them weighs more than what the businessmen achieved in Congress. On the other hand, there are many who They warn that the RIGI law is so poorly designed that it could be another shot in the foot for the Government. Federico Sturzenegger assured the president that he would generate a shower of investments that would guarantee his re-election. But if analyzed in detail it can be concluded that The result of the law may be the opposite of what the minister without portfolio promised. Less foreign currency and less revenue.
To begin with, many of the investments that will come were already programmed and under analysis. It is difficult to evaluate a priori which ones will be carried out due to the fact that the law is going to be promulgated. Even those that come through the RIGI will have to import most of the inputs, so the dollars will arrive and go in imports immediately. Besides the most important investments will take at least a couple of years to arrive. But there is something worse: there are investments that will be made by companies that were already in the country that will use their pesos to buy dollars from the central office to invest. It must be taken into account that there are large multinationals that have been restricted from issuing dividends for at least two years. In that case, since they use their pesos to buy dollars to import, dollars are directly lost. Besides, Since the tax advantage is very large, in investments that would have been the same there is a net loss of potential revenue.
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In tax matters, the wording of the law will undoubtedly generate a drop in revenue because there will be Argentine businessmen who were paying 35% of profits plus the rest of the national, provincial and municipal taxes that can now use another Public Limited Company that buys the company from the current one to make an investment in which they will pay only 25%. of profits and all the rest of the taxes will be deducted from there. That is to say, the more they comply with the new law, the less it will collect. Companies that do not go through the process of changing their SA to comply with the law will be at a clear disadvantage compared to the rest and may disappear. In other words, the incentive to change companies to obtain the benefit is very important. It may also happen that those who find themselves at a disadvantage before the law in tax matters prosecute it and end up becoming an obstacle for new investors who will prefer to wait for the outcome.
This is the problem when a law is written by a law firm that represents the interests of a particular company or sector and is not made by a government that must see the total picture of the economy. Just as it came out of the Senate, the law could result in lower tax collection and a meager net income of foreign currency.
There are also no great expectations of dollar income from money laundering. The constant rises and falls of the Personal Property Tax are an obstacle. But the most important thing is that Mauricio Macri’s money laundering was gigantic. It is difficult to think that the next one will add volume and of those who launder, the majority will prefer to leave the money outside since it is not mandatory to bring it
Beyond RIGI and money laundering, the government continues to have the same problems as before the vote in the Senate. It lacks dollars and to get them it would have to devalue to attract foreign currency from the countryside. If it devalues, prices will go down and you will pay a high cost in the image of the government. In fiscal matters it continues to have a strong dependence on a tax as distorting as the Country tax. It was Milei who asked the Fund to demand that the country replace the Income Tax as it existed until mid-2023. From that effort the Fund document was born. And worst of all: she entered a hyper-recession from which there is no foreseeable way out.
Even orthodox economists such as Domingo Cavallo, Carlos Melconian and Miguel Angel Broda warn that the plan is recessive and sow doubts about the exchange rate policy and the sustained external restriction. It is difficult to think that a government that doubled indigence and sharply increased poverty would win an election if it does not come out of the recession. Even more urgent: a government without governors and with a very limited legislative presence is sustained by popular support. If you lose it because the recession continues and employment collapses, you are in trouble. On the other hand, there is a looming danger: on Thursday a report from the International El Niño Phenomenon Center was released that predicts a 70% chance of drought for the next sowing.
Repression, persecution and prison
Although they cause enormous economic damage, The biggest problem with far-right governments is not the economy: it is democracy. Milei is a different president, but his leaders are the same as always: that is why some methods are repeated. DNU 70/2023 and the Base Law were drafted by the law firms of the same corporations that promoted the government of the dictator Jorge Rafael Videla and that of Mauricio Macri. In all cases, the repression, persecution and imprisonment of the opponents was necessary. Today it is not necessary to disappear those who fight. It is enough to defame them and persecute them with corrupt judges until they become civilian dead. When they denounce and defame social organizations, they aim to break the organization of the most humble; When they repress and imprison protesters, they try to generate fear to break the organization of the protest.
They are afraid of the organized people and work to break the bond of solidarity. The government imprisons protesters and denounces journalists: those who fight. The persecution against politicians is no longer so strong, who are generally silent or tweet about lighter topics. If we talk about first-level leaders, only Juan Grabois and Axel Kicillof spoke out against arbitrary arrests. Patricia Bullrich took over the street and repressed at will because the CGT or the Evita Movement or La Cámpora were not there in an organic way. There are leaders who speculate on letting Milei waste away alone, but the damage she does to society in many cases is irreversible.
On Wednesday in the vicinity of Congress they went hunting: they took those who live on the street, the street vendors, the neighbor who wanted to get home and also those who went to protest. Relatives of the detainees reported that they were beaten, stripped naked and humiliated. They held the detainees incommunicado for 24 hours and one of the people was asphyxiated during her arrest. Judicial sources assure that none of those arrested had anything to do with the burning of cars. Those are seen passing through the fences and being received by the police. In other words, what the government called terrorist operations was carried out by police infiltrators. Those who are detained are political prisoners.
The government that on March 24 made a video in which it only talked about the guerrillas and did not mention state terrorism, today calls terrorists and accuses the current generation of fighters of a coup d’état. Everything is photographed, everything is filmed: we saw the infiltrators being received by the police: they are the ones who burned cars. A high source from the Buenos Aires Ministry of Security pointed out to The uncovering: ”It was not a coup d’état, but they are not just contraventions either. “People don’t want more protests.”. If they believe that people accept and applaud repression, they will continue to do so.
The government inherits the vices of persecution and repression from Macri and adds its cruelty. Milei doesn’t care about people who suffer from hunger or those who die from cancer. It’s not original either. Human beings mutate faster and faster, driven by technological advances. This full-speed advancement of technology is called singularity: it is exponential growth at an advanced stage. Virtual relationships break the bonds of solidarity and empathy for the other. There are no hugs or kisses in a virtual relationship. You don’t walk hand in hand, you don’t touch: you don’t feel. The other is no longer a friend but an enemy or at least someone distant, alien. Networks and their anonymity release the original cruelty that was buried under centuries of civilization. The feeling is cruelty. The same technology frees us from obstacles, solves our problems. We don’t have to try hard or think too much. We are becoming less intelligent. Jorge Alemán talks about an anthropological change. The new homo is crueler and stupider. Like Milei and a good part of her followers. At least those who live on the networks.
It’s politics
In political matters, the government makes a mistake if it believes that the worst is over. The majority of the friendly opposition was waiting for the Bases Law to move on to another stage. A top source from the PRO told this medium: “Everything is improvised, they don’t care about the State or politics. I don’t see what the driving sector is in the short term, I don’t like RIGI, we are going to lose revenue. No one can rule alone with the sister. The sums from the PRO are at their own expense; not from the party. “2025 will find us in different places with the government.” Another senior leader in this case from the City Government warns: “Jorge is worried because he is not giving us the money that corresponds to us. He wants to go to court to ask that the accounts of Banco Nación be seized. The moment will be when they do not put it in the 2025 budget. There he rots.”
Peronism navigates without strong leadership. Cristina’s waning power is barely enough to try to block the growth of new actors. Most of the governors are not comfortable with her leadership and some demonstrate it with her actions. A leader who assures that she will not return to power is not seductive. She is hardly scary. Cristina grows bigger when she goes deeper into the themes, when she shows the way, and shrinks when she prioritizes Máximo’s career to the detriment of other actors with greater possibilities of arriving. Kicillof, Grabois and even Martin Llaryora are of age to exercise power, they are fresh, without the wear and tear that Cristina, gladeador of a thousand battles, carries. If the replacement occurs naturally, Peronism has every possibility of preventing Milei from doing more damage. Otherwise you run the risk of ending up divided and inconsequential.
