The economist highlighted that in the last 35 years the different governments increased informality, self-employment and the public sector
The former president of the Banco de la Nación Argentina (BNA) Carlos Melconian He targeted the national government for its handling of the economic crisis and demanded a “dose of honesty.”
“The Minister of Economy (Martín Guzmán) continues to lie to the people. I don’t understand, because he is an educated person. His first task is to clarify, to put light,” said the economist linked to macrismo.
“People punish lies”, stressed the economist, when noticing the urgency of releasing the figures and an accurate diagnosis of the economic situation. “Nobody dares to say that this makes poor people. There is a lot of hypocrisy. At some point this is going to translate into a phenomenon where 80% of the people go to vote blank,” warned Melconian, in dialogue with the signal of Cable TV All News.
“Today we went back to 1990 with 42% poverty, only surpassed in 2001, and to this is added the indigence and unemployment rate, with a formidable deterioration of two key variables. First, the formal labor rate in Argentina collapsed. There is a new de facto labor relationship created by the market, “he explained. The economist stressed that in the last 35 years, different governments have increased informality, self-employment and the public sector.
“The second key element of this whole movie is that the investment rate collapsed like never in history. So, you have de facto labor relations and productive investment that is not replenished, “he said.
And in that sense, he warned: “The uniform diagnosis says that taxes, public spending, informality have risen and that you have poorer people. What is the story like? For this to become a torch race, it must be reconciled with the politics”.
Without going into an analysis of the economic situation, Melconian reviewed the last 30 years of Argentina. Pointed out how inflation has been 7,500 percent since 2001. “We are talking about that the average quality of life of the Argentine has regressed to 2004 or 1990”, remarked the economist.
“I do not want to hold it exclusively with this year, because the Government had the imponderable of the pandemic. That is undoubted, we have hit bottom. Now, it didn’t resolve the political issue either. They started badly from day one, “Melconian completed.
Life with the gap and on Mars
Guzman He told the senators in November that “according to the last BCRA balance sheet, the reserves in dollars net of reserve requirements are US $ 28,365 million, the rest of the items such as the swap with China, the SDR and gold have different degrees of liquidity”. And regarding the point of the use of reserve requirements by the Central Bank to finance the exchange market and the loss of reserves, the minister was blunt in his answer: “Clearly lace is not used, today there are US $ 11,158 million of reserves “.
After that intervention by the minister, Melconian, director of MacroView, spoke at the end of November during a webinar organized by Balanz Capital. For the former president of Banco Nación, net reserves are around the u $ s3,500 million, but the liquid ones are negative in “minus 600 million”.
Melconian stated that the official aspiration is to avoid a devaluation of the official dollar to cushion greater consequences on the inflation rate. “The jumps in unofficial dollars influence the formation of prices but the most direct link is the official dollar”, says “Melco”.
For the economist, the “dollar at $ 80 is fine.” He points out that it is equivalent (in today’s pesos) to Cristina Kirchner’s parallel dollar (2012-2015 average: 72 pesos, peak 80 pesos in 2014). And the crawling peg is taking it while the unofficial dollar at 150 pesos / 170 is in overshooting, and exceeds (today’s pesos) that of the worst moment of the 2002 crisis (June 2002. 133).
“First there is a gap, then you lose reserves and then it comes outcome“Melconian said.” With a gap around 100% there is no life on Mars, “he added.
Do a little more time
For Melconian, the government “can keep going to the corner flag” and try to stretch the outcome. But he cautions that eight months (until the harvest dollars roll in) is too long to “hold out” in this type of crisis. “Seen with a pragmatic mindset, with the exchange gap at 30/40% there was life; with 80 or 100% no“.
Thinking about the plan to “hold on”, the economist says that the government can “do a little more time”: place similar dollar bonds (imperfect), get the odd dollar (or yuan) borrowed, the BCRA can sell (although it should not ) dollars not owned as it happened in 2015 or different official exchange rates can be “invented”. “But an outcome is unavoidable,” he remarks.
“With the BCRA’s net reserves at less than US $ 4 billion (almost all gold), the margin to sell its own dollars is almost exhausted. And the chance that the IMF will seriously lend fresh money is low, “Melconian recalls.” As time passed and the mess deepened, the when of the outcome loses relative relevance and the how much of the nominal correction and how and with whom to perform this surgery. It can be an exchange rate correction, inflationary or a mix. It’s a chicken and egg issue, “says the Macroview partner.
“Any nominal movement (of the official dollar or prices) that aims to decompress and not complicate the situation further has to come with antibiotics,” he concluded.