Mario Blejer: "Argentina is a rich country, it's another fable, because it's not"

At the age of 70, Mario Blejer has acquired a new pbadion that manages to disconnect from economic reality: he writes music for liturgies, in which he incorporates Latin American rhythms, such as tango and zamba. He started a year ago with his orchestra and today, he has already delivered more than 500 USB sticks with nearly 80 songs. But the music does not distract him from his role as Vice President of Banco Hipotecario. When the work ends and tranquility invades the iconic building created by Clorindo Testa, former president of the

central bank

to receive
THE NATION in his office and although he prefers not to make any forecasts, he is cautious about giving success to the tranquility of today's exchange rates.

-What badysis do you make of the current economy?

-The Argentinian economy is not separate from what is happening in the rest of the world. The improvement of the international economy, even if it is very little dynamic and very unprofitable, immediately affects the local economy. It seems to me that the stabilization of the exchange rate imbalance has been achieved, in part, by the improvement of the world and the flow of capital, but also by the consequence of a more entrenched expectation. On the foreign exchange market, the situation is favorable. This is not great, but it is positive. All this makes a partial improvement. But, of course, all the problems we have encountered remain: relative price imbalances, macro and micro imbalances, income distribution problems and poverty.

-You say that a little improved the international context. How long can it last?

-The context has improved because some variables have really improved, such as the greater normalization of the money market: the rates, which were negative, start to be positive or zero, which is good from the point of view of standardization, although the cost of credit is higher. But active policies must be taken to prevent undesirable situations. The huge amount of money thrown on the market to get out of the crisis has pushed up the prices of real badets (metals,
immovable) and not the price of goods and services, depending on how it was distributed. It is an imbalance that can create a problem of excess supply of money in the world, which creates inflation and causes capital movements.

-What will happen to Brazil?

– Growth in Brazil is one of the crucial factors for the development of Argentina. The problem is that they create too many positive expectations, like the ones we created at the beginning, and it's a problem we already know that does not end well, because it's better to create expectations slightly negative than to create false expectations.

-At time to attract investment, how do you compete in Brazil?

-There is a contest, but to control it, you have to be more efficient and not close. Argentina has spent 70 years or more in which it can not break out of this growth pattern seen. Sometimes it is aggravated by a sharp increase in demand, which then causes inflation and delays in investment. The rest of the Latin American countries, with few exceptions, overcame this problem.

-Because?

– Argentina is a rich country, it's another fable, it's not a rich country. Rich countries are those who can offer a high standard of living to their citizens. Because if being rich means having natural resources, Switzerland would be poor. There are natural resources that you need to know how to exploit, but it is not the only thing. Here, there are also excellent human resources.

-Why is not it?

-We can not get out of this process in which wages go up, prices go up, competition in Argentina falls and then protection is demanded and finally it is devalued. Try not to devalue first, appear tablitas, a fixed exchange rate, whatever. You could regain your competitiveness with more productivity, new products, new markets, new processes and better investment capabilities. But Argentina spent 70 years during which it could not maintain its competitiveness without devaluing. The question is why we can not have a situation more similar to other countries in which the exchange rate is not the only instrument to maintain competitiveness.

– Can you be optimistic that this time really comes out of this cycle?

-I think it will come out, but the question is not that, but when and how. Obviously, there will be a way, but I do not know if we will come out of this situation with the same devaluation model or if we will take advantage of the opportunity to invest more.

– What is the inflation rate of 47.6%?

Inflation is a problem that comes from the same model: prices go up and wages rise, then reincorporate to the market and an inflationary dynamic is formed. When I say that we have to find a way to gain competitiveness without devaluing, I say that we have to find a way to control inflation.

-How do you evaluate the monetary aggregates policy?

-I do not know how it works, we'll see.

-For three months of implementation and the foreign exchange market has remained stable …

– The market is calm, but know that this is partly because of the system and partly because of the greater monetary tranquility that prevails in the rest of the world: all the international currency variables have started to converge on something more normal.

– The objectives must be achieved and if they are outdated, they are badly chosen?

– A prominent economist, Václav Klaus, Prime Minister of the Czech Republic, was asked about the reforms to be undertaken as a matter of priority and the fact that it was a shock or a shock. a gradualism. He said that he had never understood this duality because he had only done what he could when he could. That's what you need to do: you must be opportunistic.

– Is it difficult to govern in the country?

-All is difficult. The economy exists because there is a shortage. You have to know how to define the priorities, which means that some receive and some do not. Some pay and others pay, it is difficult everywhere.

– Did the government prioritize the reduction of inflation before the resumption of activity?

-I do not know, but inflation is still high and there is no growth.

– Would you be ready to be president of the BCRA?

-No, I went there.

– How was the experience?

-It was very important and this year, they found a lot of the phrase "you have to let greed make you panic". I should write a book with this title. I have heard it so many times. But there are people who still do not understand it, because they say that if raising the interest rate to 80 or 90% will increase the demand for local currency a little, it would be better to establish it at 500%. Greed and panic are reasonable: if I raise the rate to 500%, it will increase panic and not greed. So I have to clarify that.