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"How is inflation or fiscal deficit helping private sectors?" A bunch of private actors are closely entrenched with state actors who allows them to access mass
by 234235dfasdf 3y ago
"How is inflation or fiscal deficit helping private sectors?"
A bunch of private actors are closely entrenched with state actors who allows them to access massive amounts of cheap dollars easily, the currently named "dolár oficial".
There are several ways in which private actors get a premium over the "blue" dollar by accessing cheap dollars ("oficial")
- Granted massive imports by the BCRA (which are usually fraudulent, just actually importing a little of the declared goods, the Aduana has A LOT to do with this)
- A closed market which allows the private actors (in conjunction with government officials), to do not compite with cheaper imported goods, and also allows them to fully control the market, increasing the prices even more (because by all means, they are the only sellers, so if they reduce the offer, they increase the prices inside the country).
- The state actors are actually almost the 50% of the demand in most of the country for every given good at sell (because public employed people are close to 50% of the formally employed consumers in almost every state - "province" - in Argentina). So, many private actors are actually - not in front of the public opinion - playing along with state actors to keep the state salaries high or pushing for them to be raised to meet the inflation levels.
- The (probably worst) private actors cashing out from the state and the inflation cycles, are the direct providers for the state infrastructure ("obra pública"), which are an internationally known source of corruption (by overpricing work, good, whatever they provide to the state), illegal enrichment, an obvious way to wash money from every other illegal activity inside and outside the country.
There are probably more (clever) ways in which private actors enrich themselves greatly by pivoting over the inflation cycles (i.e. financial schemes everywhere).
The cycle of inflation in Argentina is just a too good source of money for everybody except the citizens, that its probability of going away are little to none.
Argentina has lots of money, because of soja and now minerals and oil, and the inflation gives some main private actor a way too clever way to confiscate money from the actual owners of those earnings (i.e. taxes and dollar to pesos automatic conversion for exported goods, which effectively legally steals money in several ways, from the real owners of the goods and the earnings).
But beside the exported goods regulations to extract money, there are lots of internal regulations at all levels, which pivot over inflation to keep the money flowing from workers and not-involved private actors (mostly PyMES), to the rober barons - private actors - and their partners, the state actors (politicians in executive positions mostly, but not exclusively).