The contradictions of economic policy and the government’s decisions are increasingly impactful. One way to look at it is with everyday advertisements that hurt common sense. For example, with the resources allocated for education and for war. The public universities cut off the power to the cloisters at night to give signs of the enormous budgetary suffocation, at the same time that they decide to do million-dollar purchases of rusty fighter planes with no obvious functionality for society.
Economic policy doesn’t have money for really important things like investment in public universities, but there are plenty of dollars for a supersonic jet that has no reason to exist? It is one more of the dead ends that the Milei government insists on entering.
The economic team’s speech about the need to make a enormous adjustment to retirees, formal and informal workers and university students while funds are squandered to purchase military weapons to curry favor with the United States, it causes problems from every point of view. Using some words from the Scottish philosopher David Hume, all the arguments to try to justify this speech end up being a mountain of gold. Or put in other terms, arguments that do not exist.
Inconsistencies are everywhere. For example, Argentina intends to get closer to USA with the purchase of these war planes because he bets that it is one of the keys to start receiving new financing (fresh funds for reserves). However, the power of the West laughs at the government and does not offer any strong support.
One way to see it is that the economic team met in recent days with the main authorities of the Monetary Fund. The organization’s directors once again highlighted some points about the local macro (such as the moderation in the monthly inflation rate), but the statements are useless if they do not materialize in the arrival of new currencies. Everything indicates that the Agreements are far from being finalized.
The market reactions show the scenario perfectly. Versions circulate in the reports of consulting firms and stock agencies that suggest that the IMF has no intention of releasing new fresh funds for the country. Last week, investors directly ruled out that Argentina could receive 15 billion dollars from the IMF to unify the exchange rate before the middle of this year.
The latter generates tensions on several fronts for economic policy. The main one is that the government still has not resolved the problem of international reserves, which in recent months have been artificially inflating (from the brake on import payments and the accumulation of debt with importers through Bopreal). Without financing, the promise of releasing exchange controls evaporates and adds another source of conflict to a worn-out economy and the social mood that is beginning to heat up.
#Argentina
