Hear
It was not just another day for the country’s main business leaders. While Congress seeks to put an end to the extensive journey of the Bases Law, in the Institute for Business Development of Argentina (IDEA) They commented on the “unprecedented” nature of their prolonged debate, while concluding that at President Javier Milei “we must let him govern.”
“The Ley Bases is a step. Is it enough? Probably not,” said Gabriela Renaudo, country manager of Visa Argentina and Southern Cone, who will chair the next IDEA colloquium to be held on October 16, 17 and 18.. Regarding the roadmap for the country, the representatives of the main companies agreed that the axes of the meeting, in the midst of a stage of tension, emergencies and challenges for the country, will be: “insertion of Argentina into the world and competitiveness; employment; social; role of the State; and fiscal.”
Regarding the diet that the originally named “Omnibus Law” was subjected to, which resulted in the “Bases Law”, the executive director of IDEA, Daniel González, said that “a Bases Law that has become law is much better than an ambitious project that is not a law”. He pointed out that the lifting of the restrictions is still pending, as well as a more in-depth tax reform than that proposed by the Government’s “limited” fiscal package.
The support of the executives gathered at IDEA to the ruling party was explained by Renaudo with a metaphor: “We took the right highway, but it was full of potholes”. These obstacles along the way would be the aftershocks of the adjustment. On this subject, he described the first quarter of the year as “very hard” and ventured that “In June there would begin to be a recovery in consumption”.
The first months of the year show sharp declines in economic activity in interannual terms. According to Indec, the industrial index for April registered a cumulative decline of 15.4%; the construction index, 32%. In addition, in this sector, according to the Argentine Chamber of Construction (Camarco), at least 100,000 jobs were lost. In parallel, Scentia data on consumption in supermarkets show a reduction of 10%.
Despite these negative numbers, IDEA expressed that they have an optimistic view of Milei’s management, “as long as he can govern.” In fact, the person who will chair the colloquium said that The business agenda “is beginning to align” with that of the Government, in reference to fiscal discipline and deregulatory measures. Based on this, they decided that the motto of the colloquium is: “If not now when”.
Renaudo mentioned that this motto is intended to be a an appeal to the business community to encourage them to invest, a feature that is linked to the tools that the Government is seeking to attract fresh dollars to Argentina. One of them is the Regime of Incentives for Large Investments (RIGI). IDEA supports this initiative, although they understand that “that alone will not save us.”
In that sense, González celebrated the fiscal corrections carried out by Milei, stating that “Without an orderly macro, nothing is enough to reverse the decline,” although he also announced some of the proposals that the business community will make public in October: elimination or reduction of “distortive taxes”, such as Gross Income, credit taxes and foreign trade levies.
In the labor aspect, IDEA representatives commented that the contribution of the Bases Law is “positive”although they also noted that it would be important to eliminate the capitalization of interest, which in many cases multiplies the value of compensation by amounts higher than inflation. “That is a labor cost, not a salary cost,” González said.
Regarding the size of the State, Renaudo’s vision seems to differ from libertarian orthodoxy, which seeks to reduce it to its minimum expression. The president of the next colloquium said that The discussion will not focus on the size of the State, but on its efficiency, “in what things it is useful and in what things it is not.”
For his part, González stressed a “change” that he sees more noticeably in society and not so much in “politics.” The executive director of IDEA said that before it was impossible to suggest a labor reform and “the fact that people are starting to talk about it today shows an opportunity.”
In this way, the executives of the main companies operating in the country launched their classic colloquium with a spirit of support for Milei, although with the signal that more structural changes are still needed.
