Low inflation and surplus, necessary but not sufficient

In these two years, the issue of the fiscal surplus has reached the level of a deity to be placed on altars. It should be remembered that since 1900, there have only been 11 years with a fiscal surplus. Indeed, we had them in some years of the first decade of the last century, in 1920, during Yrigoyen's first administration. In the early years of Menem's presidency, they were the result of privatization revenues, not a genuine surplus. And in Néstor Kirchner's administrations, although in this case, it should be remembered that debt service payments were not made.

In the same period, the United States had a fiscal surplus for only 15 years. In the 20th century, during the Carter administration and during Bill Clinton's second presidency. This tells us, considering the performance of our economy and that of the United States, that the fiscal deficit alone is not the key to economic growth. Because to say, as some members of the ruling party vociferously and in their sewer-like manners, that the country has been in decline for a century is a fallacy, since objective data show important stages of growth and development.

In reality, although not the only cause, the country's economic history shows that our main problem is the balance of payments . More foreign currency coming in than going out, to put it bluntly. The country concluded a 15-year growth cycle in 1948, despite the Great Depression that affected international trade and tax revenue, and until 1963, it experienced a "sawtooth" period: one year there was growth and the next there was a recession, because exports stagnated, but imports grew, and there were limitations on obtaining external financing that were only overcome during the Frondizi administration.

From 1963, Argentina would have 11 consecutive years of GDP growth until the 1974 crisis , with the Yom Kippur War affecting us, among other factors. Those eleven years are the result of a substantial improvement in exports, that is, the acquisition of genuine dollars. Furthermore, the external financing sought for energy projects, for example, is only used to cover imported equipment. As a perverse example, during Menem's second term, we borrowed abroad in dollars to cover the pension deficit. Nonsense.

In this century, economic policy, except during the Cambiemos government, has had an anti-export bias, as evidenced by export restrictions. The performance of Brazilian production and exports demonstrates the contrast. In 20 years, Brazil has tripled soybean production, while we remain at the same level. The argument is fiscal, but if we increase production and exports, there will be fiscal revenue from the income tax, and the domestic economy will develop, expanding agricultural frontiers with new lands or incorporating millions of hectares into irrigation, thus reducing climate risk.

The lack of dollars is reflected in the Central Bank's negative reserves and in external restrictions, as the "corral lock" on businesses remains in place. Instead of promoting exports, the government first downplayed the importance of having positive reserves, which it had also pledged to achieve upon receiving the new assistance from the International Monetary Fund.

Now Minister Caputo says he's going to raise reserves, but instead of genuine ones, it's through new debt at grotesque rates. It seems to be the minister's specialty, who is more of a trader than a statesman.

In addition to the tax burden, export taxes, and outdated labor laws, the productive sectors, along with their lawsuit industry, face competitiveness problems stemming from infrastructure deficiencies. This is not just due to the lack of highways, but also the deterioration of existing routes in more than half of the national network and the absence of rail rehabilitation and modernization plans, essential for mining in the Andes mountain range.

The decline in public employment, despite applying the "chainsaw" instead of the scalpel that allows selecting what should be eliminated, is only 58,000 jobs, reaching 102,231, adding the small adjustment in provinces and municipalities, which is where the excessive increase in personnel occurred since 2003, when we jumped from just over two million two hundred thousand agents to almost four million.

On the other hand, 101,231 jobs have been lost in the formal sector of the economy, including self-employed workers, micro-entrepreneurs, and jobs in family homes. The gastronomy, hotel, and construction sectors are the most affected; the total number of jobs lost is 539,039.

Inflation has fallen, but we still face serious structural problems that have not been addressed, including a long-term program that achieves basic agreements while avoiding political risk.

* The author is president of the Argentine Academy of History.