Tango 2017
What can be said about the richest country in
the world, measured in Natural Resources per inhabitant? How can a country that
had the same GDP x cápita as Austria and Italy in the late 1960s go through 30
years of instability, to resurface and go through a new period of stagnation
(2012 - 2016)? Argentina is well known for Tango, football and meat. Little is
it known that it has a fantastic public education system at University level,
and that it houses a world class health system. Human Resources appear as the
country's main asset, but are they correctly capitalized? Recent comments from
the current Minister of Science and Technology "I am not here to defend
the scientists"[1] offer
a cloud of doubts. The truth is, the country does not have a long term
mentality. Recently elected president Mauricio Macri promised the greatest
industrialization plan since the 1960s, where there would not be engineers to
cover the job positions. But where is the plan?
Predictions of a 1% growth failed to present a slowdown
of -2% GDP in 2016. After a bad economic year, Finance Minister Alfonso Prat-Gay
has been recently fired (namely to take the blame for bad economic
performance). Some lights for 2016 though:
- The issue with the Vulture Funds was finally
arranged, giving the country access to International Capital Markets for the
first time since 2001.
- The black market to purchase USD at an
unofficial rate (in the same manner as Venezuela) was eliminated, giving room
to a normalization of the currency exchange rate.
- Inflation and unemployment figures,
previously faked, have been cleaned and are now accurate.
These are not minor issues. They all converge
to the normalization of the economy and aim to present a more serious image to attract
capital investments. Mauricio Macri expected that investments would pour in
very shortly after his election, but this never happened. He forgot, as I
always explain, that BEFORE attracting massive investments he must make sure to
communicate to the WORLD what it is that Argentina has to offer!!! The goal
should be to attract long term genuine capital investment, and not only
speculative funds. In my releases "Revolution 4.0 and the Man of Tomorrow
- Post-Industrialism, Inequality and the Knowledge Based Economy - Part 2"
I name 20 measures that should be taken in Argentina in order to climb up to
the top 10 nations over the NeXT 15 years. Quite clearly, Argentina does have
the POTENTIAL to clear it... But will the politicians, or society as a whole,
understand how to do it? While scientists are treated like garbage and
knowledge is not valued, other countries like Singapore, the UK and the US do
understand that it is through investment in education, science and technology
that the future will be built! Having a great university system is a great
thing, but there must be more efforts to connect the world of knowledge, of the
ideas, to the private sector. Knowledge must be materialized into value which
in turn creates wealth. In that way, societies' great investment in education
(through taxes) is actually channeled back to them through job positions,
growth and an increase of the standard of living.
In order to attract those desired investments,
Mauricio Macri should present a proper strategic industrialization plan. University
Students, professors and actors in the private sector should be invited to
participate, it is after all THEM who will execute the industrialization plan! Discussions
about income tax are futile, the same as the series of adjustments in the National Budget in order to balance Fiscal Deficit which have nothing but launched the country into recession and contributed to a rise
in the unemployment rate. Jobs must be created in the private sector in
parallel to lay-offs in the public sector, as the economy becomes more dynamic.
If anything, Macri has failed in transmitting a VISION of industrialization. It
is not clear which NEW industries will be developed, and HOW this will be done!
Meanwhile, the economy has lost 200.000 job positions only in 2016. As I always
explain, a healthy economy is constantly adding high-value positions to the
private sector, the Job Report[2]
being the most important indicator of growth. While Macri debates himself in
political discussions and quarrels with the Unions it might be that, as the
Economist says, that 2017 will prove even more challenging than 2016[3].
Cristian Bøhnsdalen
CMO/CFO & Co-Founder @ITRevolusjonen
