Axel van Trotsenburg: "Reform takes time in Argentina and the world" – 23/02/2019

Axel van Trotsenburg He is the new vice president of the World Bank for the region. In Argentina, he spent three days and held meetings at the Ministry of Finance, the Central Bank and visited Bank-financed projects in the country. Thursday, he visited the press room Clarin Thursday, accompanied by the team of the bank office in Buenos Aires. Van Trotsenburg lived in Argentina years ago, when he was director of the Southern Cone Bank. He resides today in Washington. Then a summary of the conversation.

– The World Bank and agencies have supported government policies. Why do not we see the results yet? Were there any errors?

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– In recent years, we have supported Argentina through investment programs and government policies. Basically, the type of reforms that the country is conducting today takes time. Frankly, this does not only happen in Argentina, but also in the world and even in fast-growing Asian countries. Here, there was a significant decline in poverty, even though now we are going through a difficult period and this trend has stopped. It is time to see how to avoid a worsening of the situation, a key problem in Argentina, Brazil and other countries.

-What is the role of the bank in the country?

– The World Bank is not a short term partner of Argentina. We do not enter or leave a country. We have been in Argentina since the beginning of their activities and we have always had programs. We have accompanied plans over the past fifteen years, such as the Heads of State and Heads of State program which was urgent at one point and which was subsequently modified. We now have a universal coverage and universal allocation program. We have a logic to maintain. Everyone wants the situation to improve and there are challenges for growth, as in the whole region.

– Argentina's per capita income remains stagnant nearly eight years ago and that of its neighbors has increased, why?

– Many factors still play in situations like this. The price of raw materials and how countries can be more or less subject to crises such as the financial crisis of 2008. Compared to the first, Chile has managed the period of abundance of 2000. In the face of the financial crisis, countries like Bolivia were less affected because they were more isolated. In addition, many economies have emerged more quickly from the 2008 crisis because they have implemented stimulus packages in China, although their debt has now increased. The investment climate and the private sector's appetite for investment are another problem that is also affecting growth. Some countries have a more favorable environment for investment and others less. Here, the issue of productivity plays an important role, something very sensitive for the region from Mexico to Argentina. And it is something delicate, because it touches on structural problems such as regulation, competition, the labor market.

– Neither productivity nor the reasons why we are not growing are problems present in the Argentine debate. We talk every day about the dollar, the inflation and we always turn on the same thing, how can this trap be broken?

– You must stimulate this debate. In Asia, the bank and China have agreed to prepare a book for 2030. In Vietnam, we have acted in the same way for 2035. How to adopt a vision that defines what the country wants to be in the next 20 or 30 years? What are the restrictions to grow? When we stop thinking about what can happen with the peso in the coming days and where we work where to locate the country in 2030 or 2040, a course is defined.

– What is there when the contexts are unstable and sends the urgency?

– You must be right. If a country faces short-term challenges, it will take more time than I indicate. Take the example of a newspaper, how many pages does an editor or his director want to devote to long and medium term issues, among those we call structural, and how many of them are cyclical? ? There are problems that have a journalistic interest and it is very fair for the work of the editors. In short, there are costs and benefits to choose from and not to publish. However, it seems important to me, even for journalism, to force this exchange, to submit to public debate longer-term issues that break short-term discussions, help to improve institutions and build consensus. When we adopt a more ambitious vision, we see that the objectives of the various sectors of society converge.

– Increasing productivity sometimes seems to require more work and to earn the same. What are economists referring to?

– Never the idea is to produce more and earn less. One is to leverage all the efficiencies of the economy to create jobs and lead a decent life with fair wages. Let's take an example: higher education and better quality automatically implies better wages. A person who enters the labor market earns more if she has a high school education or higher than only with a primary education. It's so automatic. We do not propose that wages be low but that there is more competitiveness and better education.

– What changes in the bank with the departure of Jim Yong Kim and the arrival of David Malpbad, Donald Trump man?

-There are two candidates up to now. The United States, David Malpbad, Treasury and one from Lebanon, Ziad Hayek. The appointment will be open until March 14 and we are waiting for the election of the chair as soon as possible. The bank's situation today is stronger than in 2012, when Jim took office. We have the ability to respond to requests from countries by granting loans worth US $ 50 billion after the capital increase in recent years. The infrastructure gaps are huge and can not be solved by the public sector. The only way for the bank is to be behind the private sector in relation to these investments.

An old acquaintance of Argentina

Axel van Trotsenburg He was recently appointed Vice President of the World Bank for Latin America. He will be responsible for the bank's relations with 31 countries. This Dutchman is returning to a known region. He has been Director for Colombia and Mexico between 2007 and 2009 and Director for Argentina, Chile, Paraguay and Uruguay from 2002 to 2007. "I lived in Buenos Aires and it was Was a place that my family and I loved. "