Jorge Remes Lenicov: “Poverty is not solved with subsidies, but with jobs, investment and savings”

Former Minister of the Economy Jorge Remes Lenicov He returns to the center of the debate with a document intended to provoke debate and controversy, with an axis of reference: why has Argentina failed to grow or overcome its problems since the return of democracy to end of 1983?

In a telephone interview with Infobae, this 72-year-old economist who was minister with Eduardo Duhalde both in the province of Buenos Aires and in the Nation, affirmed that poverty is not reduced with subsidies and that the origin of inflation cannot continue to be discussed or blamed on the International Monetary Fund (IMF) or the dictatorship for current problems.

This Wednesday, Indec reported that poverty reached 42% at the end of 2020, the highest level since 2004, at the end of the crisis after the triggering of convertibility.

Docente -dirige una maestría sobre Economía Mundial en la Universidad de San Martín-, Remes Lenicov se mantiene activo con charlas para direntes políticos y empresarios creates that, if no se llega a determinados consensos, se profundizará el actual éxodo de jóvenes y de empresas from the country.

– Why in this document do you make a historic cut of weak growth since the return of democracy at the end of 1983?

– Because almost all of us aspire to a return to democracy, but it has been a period of low growth; the dictatorship is already far behind and not to mention the period of import substitution; the responsibility lies with the major political parties, the PJ, the UCR and Cambiemos, not the military. The other is a closed stage; we must now discuss what has happened since 1983, because there is no debate on the causes and the results. We have to generate a discussion and come to some kind of agreement, because if we go to the opposite poles, we will not go anywhere. And I see this in our experience, but also in the whole world, as it happened in Spain after Franco, or in Israel between Labor and Likud; but we like to be different. What is serious is that this discussion is ideologized, which is the antinomy of politics. Ideology claims that reality adapts to its way of thinking, with no room for discussion. I tried to make a contribution to see if we could find a point of agreement between the Argentines. If other countries could, why not us?

The responsibility for the non-growth of the economy rests with the big political parties, PJ, UCR and Cambiemos, and not with the military; it’s a closed stage

– What is the third possible path between populism and neoliberalism that you describe in the document as instruments of failure?

– It exists, because otherwise we will never be able to get out of the problems we have. For example, we know that there is poverty, but we do not discuss how to solve it; The course is not disputed either: do we want a market economy or, on the contrary, a state that absorbs everything? I am leaning on a more moderate path, like other countries. If we agree on the diagnosis, we can agree on the instruments, but for the moment we are in layers. Other societies have achieved macroeconomic and social balance, such as in Uruguay and Chile, where governments change, but not at the heart of the journey.

– Why has it not been possible to reduce poverty or reintegrate them into the system for 25 years?

– I think that the subsidies should be in return, or else bring the children to school, but poverty is not solved with subsidies, but by generating investments and for that, it is necessary to encourage savings. Argentina needs an investment of 22% of GDP, but it has 15%, which only serves to replace capital. And the other central factor is the stagnation of productivity over the past 20 years; you need to discuss this agenda.

– Is the exit a semi-parliamentary regime as happened in 2002 to reach a consensus?

– I have heard this diagnosis many times, but many countries with presidential regimes can make these deals. You don’t have to put more threads into existing ones. Presidentialism is distorted by the large number of decrees of necessity and urgency. In 2002, there was the situation of two leaders who agreed, plus the Argentine Dialogue. But what I wouldn’t want to repeat is that the two times severe measures were taken were with Menem in 1989 and with Duhalde in 2002, when we were on the brink; the cost is very high: to go and come back from the abyss. To anticipate, we have to negotiate and discuss policies, because we have a legislative structure that is not consistent with the fourth industrial revolution, while many here aspire to the second, despite the fact that 70 years have passed! In general, all political leaders have traveled, unlike in the 1970s, almost everyone knows the rest of the world, but they have very old and anachronistic behaviors. Here, the model countries are caught, but they forget the processes necessary to achieve it. Asia already has better wages than Latin America, but we still think it was in the 60s when we asked that there were no Asian wages …

What should not be repeated is that the two times severe measures were taken were with Menem in 1989 and with Duhalde in 2002, when we were on the brink.

– Why the debate on the causes of inflation?

– It’s ideological, many still argue whether businessmen cause it, but it’s an old problem because the subject has not been tackled academically for 25 years; World Bank says with inflation above 20% it is not possible to grow and Argentina has over 20% and has not risen for a decade. We think the problem is the IMF, but it’s not like that, it’s about acting and fighting inflation like the rest of the region has done, except from Venezuela and Argentina.

– Here, the IMF is always pointed out as the culprit

– But, beyond the IMF, is inflation of 40% per year sustainable? At this level, saving and investing are not viable. The IMF is another matter, it’s like going to buy something and then discuss the sale price; You have to go to the IMF with your own agenda and discuss it. Usually the person making the adjustment is insulted, but nothing is said about who made the adjustment, ie the bad guy. But that’s natural: mismatch is followed by adjustment.

– However, it is a Peronist government that must face an adjustment

– But I don’t know what fate they want for the economy, because the minister says one thing and the president another and everyone has a quota of power, even if it gives the feeling that Cristina has more than anything. The government must have one voice. It hurts the economy that there are differences between the three, because people who want to create jobs must have some idea of ​​where we are going, because if they don’t go to another country, or if they take money out of the system, or if young people go to other countries with better prospects, such as Australia or the United States. To create a future, one must generate measures, the word in itself is not worth it, because the word has passed, not only from the current government, but in general. The word has been devalued.

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