by Carlos Pissolito
"We have to wage war in the way that we can. If we do not have money, meat and a piece of tobacco, we will not be short ; when the our clothes are done with, we will dress with the clothes that our women work for us and if not, we will walk naked like our fellow Indians. Let us be free and nothing else matters".
General José de San Martín
The global situation: As happens with almost all crises that do not end catastrophically. Someday they end. Most likely, that will happen with the covid-19 pandemic. Obviously, she will leave unresolved lingering effects. Among them, one of the most important will be the deep and widespread global and local economic recession .
In this sense, the measures adopted by the governments of almost all countries are aimed at alleviating the negative economic effects of the pandemic; such as credits for companies, extensions in the payment of taxes and even direct delivery of money to those most in need. Although this is intended to keep agriculture, industries, institutions running and not increase unemployment; we believe that these measures will not be sufficient, because the system is heading for an irremediable bankruptcy and that it was pre-existing when the plague arrived.
The situation in Argentina: Argentina is in a particular situation. Partly, due to the continued economic failures; but, also, to its successes and its peculiarities.
To begin with the latter, let us remember that, as Niall Ferguson, a renowned British historian, writer and professor specializing in economic history, maintains, Argentina is a kind of laboratory in which interesting questions occur and that many times, they anticipate those that happen worldwide. (1)
To continue, we must admit that Argentina's foreign debt never had an administrative, economic or financial justification. Additionally, the imminent global financial crisis has made it impossible to pay. Under the simple foundation that the collector agency, is on the verge of bankruptcy itself.
Today, it is not only a decision that can or should be made. It is one that is imposed on us by the very global situation. Since there would be no place for insubordination , as proposed by Dr. Marcelo Gullo. Simply because there is no one to do it against. Global financial powers, including the IMF, our creditors, and the economies of the countries from which they operate, are collapsing.
To continue, it is necessary to recreate the criteria of the Argentine economy when it was successful. We refer, specifically, to the economic theories developed by Silvio Gesell that allowed President Julio A Roca, during his second presidency, to overcome the so-called Panic of 1890. (2)
With the money not used for the payment of the external debt and its services, it must be used to reactivate our productive apparatus, for this:
Reactivate the real economy through measures aimed at drastically reducing national, provincial and municipal taxes, especially VAT on food, fuel and public service fees. For the purposes, that families and SMEs have capital to return to function. An issue that, in fact, has already been caused by the breakdown of our payment chain, both for individuals and businesses, in the context of the crisis caused by the pandemic.
Put in place all the productive state infrastructure available to the country, from the military factories to the shipyards, through the medicinal laboratories. Also, high-tech joint ventures like INVAP.
Redesign and put into operation all the strategic transport modes available to serve national development; such as the railway, air and sea, promoting, among others, the railways, Aerolineas Argentinas and recreating ELMA (sealinner) .
Guard and exploit our Argentine Sea to; on the one hand, avoid its depredation by foreign fishing agents and; on the other, to develop and strengthen our fishing industry.
Nationalize the administration of our mining resources by creating a state agency that has the technical capacity to monitor and control the powerful mining companies that operate in several of our provinces.
Nationalize foreign trade, in order to use it as a reciprocal tool in trade with the Region and with the rest of the World.
With regard to the necessary financial instruments, we have the experience we used after the last crisis of 2001. As the ways the provinces found to finance themselves, through the use of so-called quasi-currencies. Those that, to a large extent, respond to the concept of “sealed money” invented by Silvio Gesell. A reality that seems to be about to repeat itself.
Through these quasi-currencies, the National State will be able to suppress the decrease in its tax collection so that all the productive entities of the Nation can devote all its resources to the production of goods and services.
Once productive activities have been restored, it will be necessary to establish a new tax system that is fairer and more in line with the new realities.
As a final conclusion, we can remember that Argentina, due to its geopolitical location and history, has done well when the World has done poorly. This was the case during both world wars.
Therefore, the time has come for us Argentines to prefer our own, although this opportunity, like almost all of us, is bald.
(*) Colonel (R) Argentine Army: Graduate In Strategy and Organization and Postgraduate in Defense at the Institute of World Politics of the USA. He was deputy military attache in the US and director of the Argentine Center for Peace Operations Training. He gives international conferences on complex crisis management and reform of the Defense and Security sector. He is the author of several books and numerous articles on these topics.
Notes:
(1) See: “La Geopolítica de la Deuda Externa”. https://espacioestrategico.blogspot.com/2020/02/la-geopolitica-de-la-deuda-externa.html
(2) We refer to those already mentioned, the Argentine banker Ernesto Tornquist and the Argentine-German economist Silvio Gesell. Both are the intellectual responsible for the fact that during the 2nd presidency of Julio A. Roca, the 1890 economic crisis caused by the default of the loan contracted with the Baring bank in 1822 could be conjured, in the terms that we have already explained. At that time, the economic world revolved around the Pound Sterling backed by the gold standard. But both Tornquist and Gesell advised Roca to leave Argentina to get out of the crisis. Roca listened to them and for this, the government created the National Currency Peso, unifying the Argentine monetary system. The experience was successful. After that successful experience, which attracted worldwide attention, Gesell enjoyed the rare honor that one of the greatest economists in history, J.M. Keynes argued that his ideas were based on his; since he affirmed that posterity owes more to them than to those of Karl Marx. Our last mention of Keynes is not accidental. Well, as we all know, it was his ideas that inspired American President Franklin D. Roosevelt to bring his country out of the Great Depression of 1929.
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