Entrepreneurs who warn of the resurgence of inflation: “It's a bad fact for those who see investments”

The Argentine Industrial Union released a “white paper” on a federal industrial development proposal on Tuesday, which is discussed at the national level by various government officials. Rioha's president Daniel Funes raised concerns about a new rise in inflation, saying that it was “necessary and appropriate” to resolve negotiations with the IMF. “It's a bad fact for us who see investments,” he said.

The document, released on Tuesday by the manufacturing entity, was compiled jointly by all regions and sectors, including a diagnosis of economic and industrial realities, objectives to be achieved within four years, and proposals to be carried out in various areas.

Industry policy proposals include tax simplification, tax incentives, economic incentives, reduction of litigation and formal employment incentives, encouraging new employment, dynamic collective bargaining and productivity incentives, strengthening work-learning relationships, simplifying tax investment incentives for small and medium-sized enterprises, financing for small and medium-sized enterprises, and promoting export development.

During the presentation at the press conference, Funes de Rioja consulted on the latest inflation data for February, which was the highest figure in five years: 4.7% overall and 7.5% for food. “One of the cross-cut buildings is related to macroeconomic stability, which points to many problems,” said UIA President. He commented on the rise in prices.

In this regard, he recognized the agreement on the “dynesia and relationship of inflation” shared by President Alberto Fernández, Minister Martin Guzman, and was also included as part of negotiations with the IMF. “For those of us who think about investment and growth, inflation (from February) is not a good fact, but a bad fact. We believe in stability because we talk about productive investment and speculation.”

He also said: “Inflation in Argentina is not surprising, we have social actors who can adapt to the private sector, such as surviving SMEs are more exposed to volatile processes such as inflation.” On the other hand, in relation to the consequences of this high inflation, he stated that “if there is one characteristic, it is a characteristic of uncertainty.” Funes de Rioja said: “We believe that the uncertainty of the pandemic and the international stage and its impact, and the measures taken by the United States, the European Union and Russia have also added more uncertainty factors.

Daniel Funes de Rioja and Miguel Ángel Rodríguez, President and Vice President of UIA, published a “White Paper” on Industry Policy.

Miguel Ángel Rodríguez, vice president of UIA, said: “In order to accommodate inflation as a parameter according to our economy, we must face inflation and it is essential to put macroeconomics in a box.” Meanwhile, Diego Coatz, chief economist of companies, said: “There is a high inertia in recent years. This phenomenon of high inflation is further aggravated by the global situation. We need a program that eliminates the lack of predictability and makes expectations better.” He said.

Regarding the agreement with the Monetary Fund, the head of the UIA said that “it was necessary and desirable to resolve the Argentine debt issue.” “In order for the production owner model to flourish, we needed a solution to avoid default to come up with a series of proposals that we believe in.” He replied.

On the other hand, in connection with tensions between governments and food producers over international price shocks and the possible increase in export duties, Funes de Rioja, president of Copal, the industrial center of the food sector, said that food is “in price policycare, since there will be subsequent companies by company. I think that the conversation will return and concerns about higher costs will be communicated, which will lead to the pursuit of rationality. We have worked to reduce the tax burden on food through the return of resources from the low-income sector.” The management said.

In other matters such as the tax system, Funes de Rioja often raises critical positions about the current situation, and the industry “white paper” refers to this aspect. “We have a vision for the medium term, not the short term or the short term. We have a tax vision that informality should be narrow. This is a very serious problem. We want a fairer tax regime, that companies are fairer because they exist, and that in Argentina the formalization is higher. The benefit is that it is related to formalization and that informality is not a different path or the only possible path.” He said.

On the other hand, Funes de Rioja commented on the gradual lifting of double compensation and the prohibition of dismissal, “all restrictive rules eventually hinder employment. For small businesses, this is true. There is no euphoria about dismissal (after the gradual elimination of these measures) and the more incentives to create private employment that is genuine, formal, registered and socially protected, the less barriers, the better.” He concluded.

Finally, due to the lack of import dollars, the President of the Industrial Union admitted that “there was stress and anxiety, but it solved the problem.” On the part of the administration, he added, “It is unfair to say that we have not given proper listening.”

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