Another development path is possible

A program like the one proposed by the Phoenix Plan demands a State with the capacity to make decisions with a solid foundation. No peripheral country achieved substantial levels of growth by the mere operation of markets.

This document, which is summarized below, specifies an update of the general guidelines that have governed the Phoenix Plan, 20 years after the creation of this reflection group. Argentina has not only had difficulties in staying on the path of growth with equity, but has also relapsed into perverse indebtedness. Our task then remains fully valid.

In the document we have outlined a set of contributions for the formulation of a strategy that allows us to travel a virtuous path. We understand that the general guidelines we propose are unavoidable. They propose an articulation between the use of primary resources and the development of capacities in modern industrial and service sectors. All this underpinned by a solid network that ensures inclusion and the closing of the pronounced social gap.

This path is then possible to the extent that it becomes conviction for a crucial majority of actors. This is the battle that must be fought if we aspire to a pattern of sustained, equitable, and environmentally sustainable development, which aims to end today’s unacceptable levels of poverty. We work from this Public Lecture so that the majorities address and win this battle.

The development project that we propose is articulated in great pillars that support it and, in turn, in transversal axes that contain it.

The pillars are:

1. The productive matrix.
2. Large-scale agriculture and family farming.
3. Scientific and technological development.
4. The energy transition.
5. Collective infrastructure and services.

The transversal axes are:

1. Employment, income distribution, and social policies.
2. Regional economies and territorial reorganization.
3. International trade.
4. Credit Policy.
5. Environment.

Main ideas:

• Argentina is not a poor country, but a country deranged by erroneous or inconsistent economic policies. The country has sufficient human and material resources to face a process of sustainable and inclusive growth.
• To this end, there are experiences in various fields—from modern farming to satellite and nuclear development—that show ample technical and organizational capabilities.
• Beyond possible restrictions or “traps”, it is the lack of investment that constitutes the real impediment to achieving a desirable path.
• It is not by subordinating the country to the dictates of international finance, in the search for providing “friendly signals,” that a robust investment flow will be achieved. The experiences of 1976-81, 1989-2001, and 2015-19 are eloquent in terms of the results obtained, characterized by stagnation and over-indebtedness.
• The only alternative approach since the military dictatorship took place between 2003 and 2015. Although significant achievements were recorded (it was the longest period in which Argentina did not maintain agreements with the International Monetary Fund), it failed to constitute a sustainable pattern, so it clashed with external constraints.
• The configuration of a viable program of growth demands above all the conviction that another path is possible. This conviction must be translated into active state policies. No peripheral country achieved substantial levels of growth by the mere operation of markets.
• It is above all a question of structuring a coherent, macroeconomically based program with clarity in terms of the objectives and goals to be achieved. In the macroeconomic sphere, it is essential to overcome bi-monetarism, as it is a way that generates expectations of speculative profits that threaten investments.
• Growth must be based on a pattern that combines natural comparative advantages—both agricultural and mining—and modern industrial and service development. The endowment of natural resources is not sufficient to accommodate the entire population, but it constitutes an undoubted potential that must be exploited in conditions of environmental sustainability.
• This strategy demands policies aimed at sectors and production chains, carefully designed, considering the desired scenario, in terms of productivity and currency balance. Priority will be given to those options that involve profound technological changes.
• The energy transition to renewable sources will be able to take advantage of the window open for natural gas, a resource that in its unconventional form is abundant. It is necessary to define, in any case, whether the long-term option will be towards fully electric mobility or if the hydrogen alternative will be used.
• On infrastructure and public services, strong regulatory frameworks, including sectoral policy objectives, will be targeted. The participation of the State will respond to particular criteria in each case. Both criteria of sovereignty and the desirability of constituting entrepreneurial capacity within the scope of the State will be taken into account.
• It will tend to the formalization and dignification of employment by combating precarious forms of labor insertion. In this regard, small and medium-sized enterprises will have a preponderant role.
• Trade policy will aim to design an adequate insertion of Argentina. It is not through indiscriminate openings that sustainable growth can be structured. This means resorting to the trade regulation tools available. An agreement such as the one proposed with the European Union does not seem to be a desirable way in so far as it implies renouncing instruments of a development strategy, obtaining in return a mere opening of markets for primary products.
• The financial system must abandon the configuration adopted since the 1977 reform (universal banking, predominantly foreign and linked to financial arbitrage) and aim towards a supply of credit aimed at production. A deeper banking system can contribute financing to the desired development model.
• Progress will be made in the preservation of the environment by taking into account the emission of greenhouse gases, the dumping of industrial waste, deforestation and the use of toxic pesticides.
• The international context has changed considerably since the pandemic and now because of the war in Ukraine. This is the crisis of hyper globalization. To this is added the loss of thickness of Mercosur both by the content of trade relations and by the orientations of the current governments. Argentina’s relations with the world must be developed in this complex scenario, and agreements signed by the 2015-2019 government are also on the agenda that, if implemented, entail integration without margins for negotiation (mainly, the agreement with the European Union). The positioning will be that of “Active Non-alignment”.
• A program like the one proposed by the Phoenix Plan demands a State with capacities for decision-making with solid foundation. On the other hand, a good part of the economic elites and various social actors have shown a particular myopia, which has led to the mere defense of particular interests, without the ability to participate in any project of greater breadth of vision. It is up to political actors to build the space for this inclusive economic and social project. This demands the conviction that there is an alternative to a socio-economic orthodoxy that led us to failure again and again.

[1] Public Lecture Plan Fénix, Faculty of Economic Sciences-UBA.

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