Message from the UIA to Milei: “The economy cannot be measured only by inflation; you have to look at activity”

The head of the UIA marked 7 points of that bridge, among them, credit, the reduction of the Argentine cost (with a reduction in taxes), unfair competition, accessible energy, mechanisms against late payments by companies, accelerating investment in infrastructure and reducing labor litigation.

“The economy cannot be measured solely by the evolution of inflation. we have to look at the activity“, he highlighted, and called to include the industry in the country to be developed. He also asked look at the micro and not just the macroeconomics.

Rappallini had a section against the “forms” of public debate by elliptically targeting the President and his ministers: “We must leave behind the disqualifications and attacks towards those who produce. We can have differences, even debate what policies Argentina needs, but respect has to be a fundamental part of our democratic coexistence”.

“A country can have capital, even natural resources and, consequently, accumulated wealth. But when loses its ability to transform, it also loses its ability to generate wealth.”he added.

United States and many countries around the world They realized that they need industries, rebuild supplier chains, repatriate their production, develop strategic technologies and recover productive capacities,” he said, describing the policies defended by Donald Trump.

The leader gave an account of recent years: “During the last decades, Argentina built a model in which the State sought to become the main engine of the economy and progressively occupied the center of its operation.”

And he recalled that thus, “public spending grew, taxes increased, regulations multiplied, export duties, controls and subsidies appeared and, when resources were no longer enough to sustain that scheme, monetary issuance was the last tool.”

“To sustain this operation, the State went towards capturing the income of all productive sectors: industry, the countryside, commerce and services. More and more resources were needed. And thus we became the world champions of tax pressure”.

According to Rapallini, this context caused the competitiveness of those who produce to deteriorate.

“Taxes, regulations, logistical costs and deficient infrastructure, financial restrictions, price distortions and permanent rule changes accumulated until they became increasingly difficult to compete from Argentina. Therefore, we arrive today with a deeply distorted structure – called Argentine cost – that we have to transform if we want to grow again.

The head of the UIA stated that “changing a system that worked for decades takes time and we must understand where we stand. Stabilization is necessary and is deeply impacting the economy. Today the fiscal order and the decline in inflation coexist, with a greater openingand an industrial sector that is going through a period of strong contraction.”

For the leader, the industry must recover activity, adapt to much more aggressive international competition and reduce internal costs.

“The numbers show this reality. In terms of production, we are 10% below the levels of 2022, with sectors that register falls of between 25 and up to 30%. This poor performance is also reflected in the labor market. Since August 2023, the industry has lost 90,000 registered salaried jobs.

Regarding the opening of imports, Rapallini stressed that those who suffer from it are the ones who need the conditions and tools to go through the transformation.

“In these last two years, while services increased around 400% and the general price level around 190%, industrial prices grew only 140%. The industry was one of the main pillars of this disinflation process. The industry is putting its shoulder to the task of stabilization.

“Therefore, the industrial sector, The UIA calls for a bridge between the economy we are leaving behind and the competitive economy we want to build.”