Tuesday, May 07, 2013

Cristina Feranández defends her reindustrialization policy

Cristina Fernández' government is under pressure from various oligopolists and their friends in the IMF to devalue the Argetine peso. (Raúl Dellatorre, "Hablan de devaluación para asustar a la gente" Página/12 07.05.2013) The argument made by the devaluacionistas is based around domestic inflation, something that resonates heavily with affluent Americans, who go into a panic when inflation gets into the 5% range.

But the US and the EU countries, especially the eurozone countries under Germany's austerity hammer, would be lucky to have inflation as a problem. With interest rates up against the zero lower bound in both places, inflation is no immediate danger, though the guardians of conservative economic policy started predicting inflationary doom when the ECB recently dropped interest rates a bit. (Daniel Eckert und Holger Zschäpitz, Die EZB riskiert die nächste Spekulationsblase Die Welt 04.05.13)

As Cristina makes clear here, what's really at stake is Argentina's program of reindustrialization. The dominant neoliberal consensus in Europe and America favors the financialization of economies and the free movement of capital, which makes countries highly vulnerable to speculative attacks, as Argentina experienced dramatically in 2001. But industry provides not only good-paying jobs, it provides far greater diversification than Argentina experienced under its long and drastic experiment with neoliberalism, which the military dictatorship of 1976-83 initiated there. Heavily dependent on agricultural exports and highly vulnerable to international movement of capital, they were highly vulnerable to speculation and instability.

Here is the video of Cristina's statement (Spanish) from the Casa Rosada, 06 de MAY. Creación del certificado al estímulo de la producción agropecuaria. Cristina Fernández:

The policy of reindustrialization requires striking a balance between keeping the currency low enough to maintain export competition but high enough not to bring "imported inflation," which would too severely restrict industries' access to raw materials and machinery they have to import. In the neoliberal international free market, neither the prosperity of workers nor the national economic strength of an individual country is a priority.

As Dellatorre reports, Cristina flatly rejects the deflationary strategy at this point:

"Están volviendo con esto porque están en período electoral; cada vez que hay elecciones aparecen con la economía o los escándalos, ya es típico", postuló la presidenta. Pero a todos ellos les aclaró que, "al menos, mientras yo sea Presidenta, los que pretenden ganar plata a costa de devaluaciones que tenga que pagar el pueblo van a tener que esperar otro gobierno, no con nosotros".

[They are coming back with this because we are in an election period; every time there are elections, they appear with the economy and the scandals, it's just typical," suggested the President. But to all of them she explained that, "at least, while I am President, those who try to make money at the cost of devaluations for which the people have to pay will have to wait for another government, not with us."]
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