The association of small and medium-sized entrepreneurs of the national industry, Argentine Industrial SMEspresented the third edition of the monthly report of the IPA Observatorywhere they warned about the crisis of the sectorwhich involves to 98% of the total companies in the countryafter the first 100 days of Javier Milei as president, as a result of, among other aspects, a strong tax, financial, fiscal, logistical and labor pressure.
In this sense, Daniel Rosatopresident of the entity, harshly criticized the opening of food imports arranged by the National Government in recent weeks. “There are things that are not understood. The Government says that there are no dollars and foreign currencies are used for this. Argentina has to grow from work and production, not bringing imported products. If we know that when that happened, at other times, it meant unemployment and destruction of the national industry, The question then is: Why do we make the same mistake again?“he warned in a virtual press conference.
Online, he highlighted that this measure generates “very unfair unfair competition” and targeted the president, as well as the Minister of Economy, Luis Caputo, due to the lack of dialogue with companies in the sector. “We cannot compete due to economic variables that we did not create. We are not price makers, inflation is not our fault. They believe that by allowing the entry of products they will lower prices, and the reality is that We have the same numbers as before assuming this government. All that, at the cost of recession and taking away the purchasing power of employees. For SMEs it is essential to be heard and we have been asking for meetings that were not conceived for us,” he expressed.
“In January several industrial entrepreneurs said that ‘they saw a light’ in what the government planned with respect to the effort, but what happens is that This adjustment, which was going to fall on caste and politics, is falling directly on the sector that generates the most employment in Argentina. The Government has to modify these issues, based on dialogue with us, not with large companies“, Shooting.
It is worth remembering that, a few weeks ago, the management of Freedom Advances determined instruments and facilities for those companies that wish to import food and products from the basic basketas they are access to foreign currency In differential terms, the reduction in payment termswith an important difference in relation to, to mention, the cases of inputs for production, as well as the elimination of the collection of profit perceptions and VAT.
All this, in the midst of a challenging context for the industrycharacterized by the considerable increase in energy rates and the abrupt decrease in domestic consumption from the loss of purchasing power of income, among other relevant factors.
According to the report of IPA Observatory“all summer long, Sales in the domestic market showed the collapse of the purchasing power of salaries, pensions and transfers from the State to households (from social plans to energy subsidies).” At the same time, he assured that “this will not rebound: as the President himself proudly admits, the liquefaction of those incomes (which to a large extent are expenses for the State) It is part of the fiscal adjustment. Even if from a certain moment the liquefaction ends, that does not imply that what has already been lost (what has already been liquefied) is recovered.”
For the economist, responsible for the Macroeconomic Area of the Consulting Firm SME Brand and Director of EPICA Consultants, Martin Kalos“this measure of the Government It has to do with an ideological issue y adds to all other inequalities that the industry has been suffering, added to the lack of predictabilitybecause from one day to the next it has to compete on the shelf with imported products with better conditions in their countries of origin.
“The Argentine industry is in survival mode. The sectors most oriented to the external market are already growing despite this recession, but the internal market is the one that is clearly falling. And the question that arises is How is the recovery going to happen? and there you will have to seer if the debacle prevails due to the fall in consumption as a result of the fall in purchasing powerand to which now is going to be added an increase in unemployment, if measures are not taken to address this sooner“he emphasized.
In the document, the organization emphasized the fact that “Argentina is self-sufficient in food” since “it produces enough enough to feed almost nine entire Argentine populationswhich leaves a huge exportable balance.” However, during the dialogue with the media, Rosato revealed that There are companies that went from exporting 80% of production to 0% and had to lay off 50% of their plant.something that could be repeated in many more, he stated, in the next 90 days.
According to the data released, in Argentina, The food sector has around 14,000 companies, covering various subsectors such as bakeries, meats, pastas and dairy products. And these, in turn, They depend on some 60,000 raw material supply companies, distributed in sectors such as livestock, cereal and oilseed crops, and industrial crops. “This productive framework spreads even furthersince these supplier companies also They are linked to various sectors of the economy, such as the chemical industry, transportation, storage, telecommunications, agricultural machinery and financial intermediation.“, detailed the text.
In accordance with these numbers and the line that connects entire industries around food production, and according to Pablo Bercovich, director of the Marca PyME Consulting and one of the authors of the document, the measure implemented by the management of Freedom Advances will have a significant impact on employment close up 80 thousand SMEswhich represent between 15% and 20% of the total in the countryspecific “almost one in five companies in all of Argentina”.
“Free competition It is not achieved simply by ‘opening the markets’sino providing an adequate framework to compete. The National Government diagnoses, correctly, that the incentives in recent decades many times they went in the opposite direction to generate greater competitiveness of national production. Take charge of that situation requires thinking about a transition strategy (quickly, with an increasingly lower fiscal cost) that allow national companies to compete on equal terms with foreign ones“, concluded the letter.
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