The 7 points raised by the UIA to ensure the transition of the economy and recover activity

That was the diagnosis made this Wednesday by Martín Rappallini, president of the Argentine Industrial Union (UIA), during the Industry Day event held at the Elea Laboratory. In front of representatives of the sector, he said that Argentina needs to build a “bridge” between the economy that is being left behind and the competitive economy that seeks to build.

Rappallini raised seven points that the entity considers central to going through the transition. Activity and credit, Argentine cost, unfair competition, energy, late payment, infrastructure and labor modernization are the axes that, according to the UIA, should accompany the opening and stabilization process.

The first point is placed on economic activity. The president of the UIA stated that stabilization cannot be measured solely due to the evolution of inflation and warned about companies that are currently working below capacity.

According to their data, industrial production is 10% below 2022 levelswith sectors that register falls of between 25% and 30%. Added to this is the impact on employment: from August 2023, the industry lost 90,000 jobs registered employees.

For the UIA, one of the central instruments to get through this scenario It is credit recovery. The entity claims financing for working capitalinvestment, housing and consumption, with the aim that savings can be transformed back into investment, production and employment.

The second axis points directly to the costs faced by companies that today compete with firms from all over the world. He called for accelerating the reduction of the so-called “Argentine cost”, which includes the tax burden, logistics costs and other factors that affect competitiveness.

In tax matters, the UIA proposes advance taxes that accumulate throughout the productive chainsuch as Gross Income, Stamps, municipal taxes, tax on credits and debits and the charge on business income.

The specific proposal is to move towards a Federal Industrial Fiscal Pactwhich involves the Nation, provinces and municipalities in a gradual and coordinated reduction of the burden on production.

The third point is related to imports and the conditions under which national products compete.

According to the Argentine Industrial Union, the economic opening It must occur within rules that are the same for everyone. Rappallini warned against practices such as dumpingexport subsidies, under-invoicing and informality.

It also focused on smuggling. He said that in some sectors the products that enter through irregular circuits already represent between 30% and 50% of the market.

The entity demands, in this sense, a State that controls and enforces the rules to guarantee conditions of competition. I need us to just base it on the text I sent you earlier.

The entity considers that Vaca Muerta development can become an advantage competitive for all Argentine production and not only on a platform to export hydrocarbons. The claim points to guarantee supply, infrastructure and competitive prices for industries from all over the country.

Also take into account the impact that rates had during this year. According to Rappallini, some industries, particularly SMEs, received gas and energy bills that reached multiplied by three and even five times.

For this reason, the UIA requested some supporting mechanism that would cushion this impact and facilitate financing.

The fifth point is related to the debts accumulated by companies.

Rappallini linked the problem to the sharp rise in interest rates last year and with the drop in activitywhich made compliance difficult banking and tax obligationsespecially for small and medium-sized businesses.

The UIA proposes mechanisms to reschedule bank and tax debts, regularize delinquency situations and accompany companies who are going through temporary difficulties.

He also claimed, as an extraordinary measurethe suspension of embargoes to prevent companies with liquidity problems from being unable to continue operating.

At the same time, he asked accelerate the return of balances in favor accumulated by companies, which considers resources necessary to sustain working capital.

The focus is on routes, ports, railways, electricity networks and gas pipelines, connectivity and border crossings.

According to what they propose, the deficiencies in this infrastructure are part of the Argentine cost because they directly impact the final price of the products and on the possibility of competing in the domestic and foreign markets.

The proposal is accelerate concessions and tenderspromote public-private investment schemes and mobilize private capital towards routes, ports, railways, energy and connectivity.

The last axis points to the job market. Rappallini highlighted the new labor legislation and maintained that it opens an opportunity to update relations between workers and companies.

The challenge is to bring these tools to companies and advance in updating collective agreements which, as he stated, were designed decades ago for a different productive reality.

The other claim is to reduce labor litigation. The entity maintains that the uncertainty linked to trials can discourage hiring and investment.