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By Mario Hernandez
"I think the issue to highlight as a difference is that the agro-export model of the generation of 1880 was based on the natural advantage that Argentina offered, instead of the natural advantage of the land, we have a spectacular technological application of biotechnology."
Mario Hernandez (MH): We were listening to statements from family members and lawyers after the ruling in the trial for the Ituzaingó neighborhood annex in Córdoba. I wanted to consult you about this primary export model that reminds me of the development model promoted by the generation of 1880.
Julio Gambina (JG): In other conditions. That model was based on the comparative advantages of the fertility of the land. What there is now is a very important technological package applied to agricultural development and at that time the link was with the hegemonic power of the moment, England, and now it is with China, a country that is not a hegemonic power worldwide but the one with the largest growth in recent times based on a strong presence of transnational capital. I think the issue to highlight as a difference is that the agro-export model of the 1880 generation was based on the natural advantage that Argentina offered, instead of the natural advantage of the land, we have a spectacular technological application of biotechnology.
Monsanto, one of the world's leading companies, is releasing seed, which suggests that Argentina is one of the most advanced countries for the development of these technologies and highly profitable investments on a global scale.
But it is not only agriculture, but also mining, something that was not there in 1880. Argentina has never been a mining power, only in recent years as a result of the changes in the 90s, there has been a strong link with mining that today is one of the main production and export items in Argentina. The latest records show La Alumbrera in Catamarca at the head of exports, even above the soy complex led by the Cargill group.
Copper and gold exports are beginning to be very important, with which Argentina has been generating a primary export development linked to the fertility of the earth, pesticides and mining that has the format of open-pit mega-mining.
What is burdensome is the deterioration of common goods or, as historically said, of natural resources, because whether it is due to sojisation or mega-mining, there is deterioration of the soils. With the latter there is directly destruction of environmental conditions. The blasting of open-pit mega-mining destroys the mountain. It is interesting to see pictures of what is left after mining. In the case of Bajo La Alumbrera, which is ending its cycle of exploitation, there remains a crater, it looks like a great amphitheater where there used to be a mountain and that is going to be the panorama that will cover the entire Andes mountain range.
In the case of agriculture, in addition to the issue of soil, there is what is known as fumigated towns. It is the most prominent issue because it is not only a criticism of agricultural production.
The model of 1880 led to the emergence in the following century, in 1914, the Agrarian Federation in defense of the small tenants who claimed the land, now the protesters are not so much the producers, many of whom have turned towards the production of soybeans, but the effect is felt by the neighboring towns who, due to the empire of the fumigations, see that some diseases are occurring in the areas with the highest concentration of soy in Santa Fe, Córdoba and Buenos Aires. There, an urban-type movement is becoming general in protest against the production model that is generalized with the extension of soy cultivation.
The sojization was developed during the Kirchner administration
MH: I understand that a law in this regard is about to be debated in Santa Fe.
JG: So is. There are many legal debates. Let us bear in mind that Santa Fe has the main port of departure for soybeans, which is Rosario. It is not only a question of planting, but of a very large concentration of trucks, which generates greater environmental pollution, destruction of roads and all this favored by the privatization conditions of the 90s.
Perhaps one of the main producers of soybean oil in Argentina, Aceitera General Deheza de Córdoba, shows the complete cycle of privatization and the development of soybean biotechnology because it transports its production from the interior of Córdoba to the port of Rosario through railways privatized themselves and puts them in a port terminal that is also their own, because the ports were also privatized. The sojization scheme that Argentina lives from 1996 on, less than 20 years, is a matter of origin of the Menem government but it already has more years of Kirchner administration than Menem administration.
What Menem, Cavallo and Felipe Solá originally developed is projected with large harvests favored by international prices.
MH: Product of the great drought currently affecting the United States.
JG: First was the Argentine drought of last year. Argentina is the third largest producer in the world, Brazil the 2nd and the USA 1st, with which the Argentine drought also generated a rise in prices in the conjuncture and a horizon of high prices in the medium term, so there are many expectations not only with soy but also with corn, two export products of Argentina. Corn is consumed very little in our country and soybeans almost nothing, so almost all of it and a good part of it are used for export, to produce agro-industrials, for example oil, which is also a strategic input for the production of biofuels , which has motivated 15 days ago that the Ministry of Economy authorized, curiously, the import of soybeans.
MH: It caught my attention that you wrote in a recent note, "Agricultural production, between food and energy", that Argentina being the main world producer of biodiesel, it imports soybeans.
JG: The point is that there is idle capacity. There is greater installed industrial capacity than that which can be supplied with the supply of national soybeans. Soybean production is not only growing due to the export and production of beans, but also due to industrial development, in this case of biodiesel and the measure was compensated with the increase in withholdings that has generated a very strong replica of the sector that states that they are taking away some advantages since the retentions were much lower compared to soybeans. If these are in the order of 35%, biodiesel was at 14% and now it has risen to 24%, which is why it continues to be promoted with respect to the export of soybeans.
From this development, an increase appears on the side of public accounts in a situation of fiscal deterioration. The increase in international prices of export products generates very important tax revenues. If last year some US $ 8,500 million entered through withholdings, the calculation for this year and the next is US $ 11,000 million, a more than important figure considering that they are not co-participating resources, only a part serves as a fund soybean that is distributed directly from the Nation to the municipalities and is applied to infrastructure works in the provinces, which makes the reiteration and deepening of the consensus of the mayors very favorable, regardless of the political party. In recent years, as a result of the significant mass of resources that were distributed via soybean fund, there has ended up being infrastructure growth in the towns that materializes in schools, hospitals, etc., which is one of the most visible elements in local consensus towards the municipal authorities.
International prices and the extension of the harvest come to alleviate a fiscal crisis that is being increasingly burdensome for the provinces and these conditions of the world economy mean that adjustments that some sectors are proposing that should be made in the country may be postponed for the Nation. public spending.
The foundational changes of the 90s remain today
MH: You spoke of the 90s referring to the politics of Menemism. In relation to the fiscal crisis that is spreading like an oil slick throughout the country affecting its main provinces such as Buenos Aires, Santa Fe and Córdoba, you point out that behind this fiscal crisis are the structural and institutional phenomena of the 90. Could you develop the idea?
JG: Argentina changed profoundly in the 90s and these foundational changes are maintained, that is, they have not been modified, even with the partial expropriation of YPF and the nationalization of the AFJPs.
All the re-nationalizations that were made have to do more with problems of private companies than with decisions to advance in a project that modifies the institutional changes of the 90s. I am going to believe that this happens, for example, when the telephone companies are stationary , which they are not jokingly thinking because they are accumulating large profits. When the financial regime is modified, it continues to favor the transnationalization of the banking system and banks are great beneficiaries of this economic model. I will believe in the changes when the laws that enabled open-pit mega-mining in the 90's are modified. When the conditions of the exporting soybean model are changed. At the industrial level, when the plans of “Assembling Argentina” are changed, an assembly plant in favor of large multinational companies in the automotive industry, where foreign terminals assemble in our country with auto parts that come from abroad.
There is a very strong structural change in the 90s that is the basis of the economic growth of these years. If you look at the most dynamic sectors of economic growth they have to do with soy, back add corn, etc., but centrally soy as the standard bearer for changes in agriculture. That has to do with the changes in Menem's times, but the benefits in terms of profitability are reaping today.
Mega-mining Argentina is also the product of changes in the 90s, the codes of mining legislation were formulated between 1993/6 when the Chilean-Argentine agreement was closed, these changes attracted investments that did not bear fruit in Menem times but a posteriori.
The automotive industry after the devaluation caused by duhaldism, despite the fact that Néstor Kirchner many times said that he was not the government of the default nor of devaluation, which are the two original sins that allowed the great economic growth between 2002 and the present. Without default, there would have been no fiscal tranquility in the past years and without devaluation there would have been no competitiveness of local production, at least until 2007/8, when the crisis in the world economy broke out.
The benefits of these last 10 years have a lot to do with these structural changes and there are no significant changes, despite those measures that I mentioned to you.
The institutional regime that defines the Argentine economy has to do with the general changes in the 90s. It was the adaptation of our country to the demands of the world economy and not in vain today Argentina is strongly functional to the export of soybeans, copper, of gold, land and water that go with mining and soy production. I would even dare to say that the great growth in construction, which is not for single family housing or popular housing but in general for speculation, has to do with the rents accumulated in the last 10/15 years by sectors higher consumption capacity and the boom soybean-mining that allows the growth of construction in large cities.
Is a boom property other than that of the United States or Spain, which entered into crisis in recent years because it was associated with mortgage loans, while in Argentina there is not a significant mortgage loan but rather liquid income from sectors that have the capacity for speculative investment in the real estate sector, although those buildings are empty. The number of vacant homes in Buenos Aires, Rosario, Córdoba, Tucumán, Mendoza, in the main Argentine cities is impressive, associated with a gigantic housing deficit that is now trying to be resolved with the Procrear plan, raising as good news just 100,000 loans in a prolonged process for a housing deficit that must be multiplied several times by that figure.
Boden 2012: social wealth was delivered in dollars to external creditors
MH: You were critical of the end of the corralito.
JG: Yes. The corralito and the corralón developed at the end of 2001 and beginning of 2002, already in the solution of that last year, had very clear beneficiaries, mainly in the large debtors of the financial system and banks. These large investors and not the small savers were granted the bonds, which meant public debt paid by society as a whole.
Sin is original. The corralito and corralón solution was made to benefit the big ones and revive economic activity. Consider that the reduction in banking activities at the end of 2001 affected the normal functioning of the circulation of money, a key issue for capitalism to function. What was done with this public debt was to transfer the cost of the exit from the crisis to society as a whole, so in May 2002 the unemployment record shot up with 21.5% and poverty reached 57% of the population. Argentina had never had such levels of unemployment and poverty. That was the product of 10 years of convertibility but, above all, because of its departure, which was a devaluation that transferred resources from the fixed income sectors, mainly workers, to investors, to entrepreneurs who are the ones who show the benefits of large incomes economic.
Many small savers who received these securities sold them at a low value in 2002/3/4 depending on their needs to get money and when Boden 12 expired, we found that of the last US $ 2.3 billion that were paid, US $ 1,700 million went to foreign holders of these securities, that is, the closing of the corralito was a party for holders of securities who in the world are afraid that Spain will not pay them, that Greece or Italy will not pay them, there is fear in Europe. The note of the own titles of Germany and a year ago of the USA is lowered It is a moment when the world is afraid for the payment of sovereign debts but Argentina pays them and more than 70% to external creditors. You have to think that a small part of the collectors were small savers who held the securities until maturity. 10 years ago Duhalde stated that 'the one who invested in dollars will charge in dollars', which was not the case, except for the external creditors holding the Boden 12 and we add, today, beyond the evaluation of its meaning, there are restrictions on the purchase of dollars and, nevertheless, the Argentine social wealth was delivered in dollars to external creditors.
The question would be whether this policy of strict compliance with the payment of the debt is so important, if that is the loss of debt or if it were not, it would be necessary to continue discussing its strong conditioning character and think about another treatment. It is never too late to investigate the problems of origin of the debt and contribute to a demand of the peoples of the world against public indebtedness that historically benefits large banks and investors, ultimately large transnational capital.
In Europe, the youngest generate the greatest resistance
MH: Is there any new information regarding the global crisis, particularly in Europe?
JG: No. The new data is that as the times and the problems lengthen, the blackmail of the governments and the big capitals for the adjustment grows. Week after week there are announcements of adjustment in public spending. There are popular mobilizations, but the general trend is to adjust public employment, lower wages, extend the working age and postpone retirement, reduce the pension income of retirees in all European countries and, therefore, the IMF authorities and the European Central Bank (ECB) press for governments to manage the crisis, the adjustment and deteriorate the response capacity of the people.
A trade union structure, anchored in the tradition of another era, has not found the ways to respond, that is why the movements of indignant people have become widespread and it is young people in Europe, who do not even have access to the first job, who generate the greatest resistances and are showing a new situation in the European social and world popular movement where there are diverse sectors that protest against the adjustment and the mechanisms of exploitation that are being generated.
MH: When you were talking about Boden 12 you left me thinking about the level of reserves of the Central Bank.
JG: US $ 1,700 million came out because they had to be paid abroad and reserves fell to US $ 45,000 million, which is still highly debatable because there is no amount of debt that the Central Bank itself maintains. Every time he buys dollars, he issues pesos and immediately afterwards he draws letters (Letes) which means onerous debt from the Central Bank to withdraw pesos, which reduces the international reserves in the accounting.
The same occurs when individuals withdraw deposits in dollars because a portion is computed in the reserves. So the current level is quite debatable. Last year there was a trade surplus of US $ 10 billion and despite that, reserves did not grow but, on the contrary, have been falling. They had exceeded US $ 50,000 million and progressively fell to US $ 45,000 million and will continue to do so because in December, US $ 3,300 million of a bond linked to GDP growth that was issued to resolve the debt swap in 2005 expires.
MH: How do you see the association between PDVSA de Venezuela and YPF?
JG: PDVSA is one of the few oil companies in the region that has a non-traditional growth and development model compared to transnational oil companies such as Petrobras. At the same time, YPF develops, like Venezuela due to problems of technological dependence, agreements with US transnationals. It is the case of Chevron that is being negotiated now, which have the technology for the s hale oil or the shale gas. I wonder if beyond taking advantage of these technological developments in the conjuncture, the rapprochement with Venezuela and its incorporation into Mercosur, it will be able to promote autonomous developments and push for the new integration that is being developed in Latin America to advance to try to eliminate issues of technological dependence that link the production of natural resources in the region to the technological development of the US and Europe.
The great absentee is the construction of a political subject
MH: For my part, I believe that we have updated the national and international economic situation, I do not know if you have any pending issues.
JG: The issue that always needs to be discussed is the lack of political alternative.
MH: I understand that you are going to be talking about that tomorrow at the Faculty of Economic Sciences.
JG: At this time, the V Conference on Critical Economy began until Saturday. Tomorrow I will share a panel with Claudio Katz and Demián Panigo at 7:30 p.m. in the Aula Magna. It is part of the debate that is going to take place and I think these Conference are very interesting to discuss.
Economic ideas, criticism of what is happening in the alternative sense today, what is lacking, the great absence is the construction of a political-social subject that can embody a project of deep transformations. I say this for Argentina and it is valid for the whole of Latin America and the world.
MH: We will see each other tomorrow and on Saturday I will be speaking about the movement of self-managed factories and I also think that the closing with the presence of Atilio Borón and Ricardo Napurí will be very important, on Saturday from 6:00 p.m.
JG: I would say that the most important thing is the number of young professionals and intellectuals registered and who have presented more than 300 papers.