The increase in poverty is explained by the promotion of capital flight

The country's capital outflows have reached over US $ 80 billion in the past four years. In other words, between 16 and 20% of GDP, which implies that 4 to 5% of GDP per year was subtracted from the national income devoted to the Argentine economy. Would it be possible that so much of the wealth generated disappears without ceasing to have serious economic and social consequences? It is obvious that what is left of the country does not produce spin-offs in the national economy.

The government ignored the crisis in the external sector. During the first two long years of government, he has not ceased to focus on the increase in the trade and tourism deficit linked to the dangerous increase in the current account deficit. Many fewer expressed concern about the country's exit from savings. He never considered implementing structural policies. It is only in recent weeks that he has tried to improve the situation with short-term policies, when the crisis threatened to lead the country to hyperinflation.

Capital outflows were facilitated by the removal of any restrictions on the country's exit of currencies and the lifting of the exporters' obligation to liquidate them. It is also necessary to take into account the absolute deregulation of the inflow of capital swallowed, which has sometimes generated trade offsets, then trade exchanges, where the funds entered have left the country with vertiginity by realizing the enormous gains in accumulated dollars.

In order to finance capital flight, as we know, disproportionate foreign currency debt has been used and the inflow of capital has been facilitated. The massive debt contracted by the Treasury has not been sold to the market, but to the Central Bank. In this way, it involves public spending and its heavy interests, a quasi-fiscal deficit. In other words, the policy pursued vis-à-vis the external sector has strengthened the fiscal imbalance and therefore the inflationary pressures it generates. On the other hand, the irresponsible policy facilitated trade that led to sharp devaluations that obviously had a significant impact on prices.

External imbalance and capital flight are structural problems of the Argentine economy. In this sense, it can be noted that the disintegration of the industrial apparatus and its weak export capacity have always determined that an expansion of the economy led to an external crisis.

The flight of capital is the product of the reiteration of economic policies that have led to the destruction of confidence in the national currency and even in the Argentine banking system. It also has to do with cultural factors. The level of experience and knowledge of Argentines leads them to not be easy prey for policies that result in an expropriation of savings in pesos.

But these structural problems can be attacked with long-term and short-term policies. In the long run, dollar debt is fundamental. Also a policy of promotion and diversification of exports integrating an increasing added value in order to reinforce the entrance of currencies resulting from foreign trade. On the other hand, in the openly protectionist world of today, it is clear that import substitution policies are in place despite their being challenged.

Foreign sector regulatory policies that do not necessarily involve absolute exchange control are fully valid in the short term. Tariff restrictions and import duties, tourism spending and the purchase of foreign exchange for savings, setting tight deadlines for the liquidation of exporters' currencies, are useful measures to deal with crises.

The government, by lifting all its short- and long-term policies in the face of foreign exchange shortages and debt and speculation financing, has created the conditions for crisis, devaluation and inflationary leaps. .

The fall in real wages, unemployment and high inflation are historically explained by the flight of capital and the indebtedness of the country. Beyond the bad economic policies of national history, there is no doubt that the soaring capital flight and debt during the economic management of the last dictatorship of there is more than 40 years explains the deterioration of society. Cavallo's nationalize foreign debt and validate the breakout only postpone an economic disaster that Alfonsin could not handle. The new debt and flight cycle during convertibility has resulted in the biggest crisis of the Argentine economy, causing high unemployment and exclusion that affects us today. hui.

Some believe that feeding the outcasts and fighting poverty are the cause of the problems of the national economy when the problem lies in the looting policies repeatedly applied in recent decades.