Juan Carlos de Pablo referred to the proposal of presidential candidate Javier Milei to dollarize the Argentine economy. What did he say
By iProfessional
21/04/2023 – 07,11hs
The economist Juan Carlos de Pablo referred to the proposal of the presidential candidate Javier Milei to dollarize the Argentine economy. Although he defended his colleague’s proposal regarding the reforms that he should make, he said that, dGiven the reality of the country, it would be better to legalize the so-called blue dollar.
“We have a bi-monetary system that works perfectly. What should be done is to legalize the blue. That the person who does not qualify to buy the official dollar, instead of going to a cave, can go to the corner and buy blue with the exchange gap that it exists,” said de Pablo in a conference he gave for the Planexware company.
Dollarization: what does Juan Carlos de Pablo think?
Regarding the fascination with dollarization, the economist pointed out that the basis of the passion lies in the fact that the Government stops running a fiscal deficit. However, history indicates that when a good is missing, the demand for the substitute increases, which, in the Argentine case, would be quasi currencies.
“If you say ‘let’s finish the party’ of the public sector by dollarizing, you did not read the story: forcing a change in fiscal matters with exchange restrictions does not work. Milei is saying it: First generation reforms are needed first before dollarizing,” she added.
In this sense, he said that price distortions need to be corrected before applying a stabilization policy. “A few days before the Austral Plan, Commerce called companies to see if they would authorize more increases. At first glance it seemed that they were crazy, but if you are going to freeze, you need prices to be up to date,” de Pablo pointed out.
Dollarization: what does Juan Carlos de Pablo think?
On the other hand, he said that Whoever takes office in December of this year will have no choice but to shrink the State: “It is not an ideological question. Was it in Carlos Menem’s blood to privatize? I don’t know. What matters is the context,” he said.
Regarding the scenarios that open up, de Pablo pointed out that the probability of Milei winning the elections is very low, like the ruling party reelection. “The president no longer exists, the vice no longer exists and there appears the role of Sergio Massa, who has no reference above him, who gives him some sign. It is not that economic policy became independent of politics, but that it remains in hands of the one who has the executive responsibility, of the one who says we are going to see what we can do and the objective is to arrive”, he pointed out.
“Imagine that Massa said that he is going to draw up a development plan? Who believes him? Let’s play the morons that out there it works. They are in a position of extreme political weakness with few tools. They don’t even know if they arrive. The rest of us have to make decisions as they arrive and, if they don’t arrive, we screw ourselves,” said the economist.
Finally, he referred to the fear that in August there is an exchange rate episode as happened in 2019 and said that the situation is not similar.
“If they stay Together for Change and Milei as the polls say, what is the problem? It is good that, between August and December, they can do anything barbaric, but transferring what happened from 2019 to 2023 does not seem like a good idea to me. In a credible country, if that result occurs, everyone goes out to set up factories. I don’t expect that or chaos,” he concluded.
