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It is remarkable that someone has spoken of the “curse of exporting food.” If you ask anyone who gets the cheapest lettuce, would they answer the one who produces it or who buys it? No one would hesitate to say that to the one who produces it. Since in the country that exports a food, its producer chooses between selling it to local consumers or abroad; the internal price must be similar to the one he would charge by placing it at the border or port at the disposal of buyers from other countries. These, in turn, must take them to their own consumers; which will add the marketing, logistics and freight expenses. For this reason, those who buy them in the gondolas of the importers will have to pay all those costs that those who buy them in the exporting country do not pay. Conclusion, it is a blessing to be able to produce food; because that lowers the price of them.
The question is why there are countries that import their food, their people can pay more for it and still have sufficient access to it (example); while in some that produce them there is a part of their population that does not have enough to eat, as in Argentina. Let’s go back to the example of one person. Only a minority is dedicated to producing food; but that does not mean that the rest cannot buy them. That will depend on whether, by doing something else, they can generate the income to acquire them. The same thing happens with countries. Those that prosper have a good diet, whether they produce food or not; since the important thing is to produce the resources so that its inhabitants can buy them.
The true Argentine curse is the widespread belief that we are rich and we just have to redistribute so much abundance well by choosing miraculous governments that multiply the ‘loaves and weights’
In Argentina, some economists and politicians have made us believe that we are rich because we have many natural resources. Nothing more wrong. An apple on a tree can satisfy hunger; but only if someone takes the trouble to harvest it. If not, it will never feed anyone. From the beginning of this century, the utopia arose that Argentines would be saved with “Dead Vaca”. However, in the period of greatest increase in the price of oil in history, not only the interventionist policies of Kirchnerism kept it very dead, but also made sure that Argentina was one of the two countries in the world where, without mediating a war , the production of hydrocarbons fell.
It is no coincidence that the other was Venezuela. A country that is settled on a sea of oil; but fuel and energy are scarce for its inhabitants, because nobody wants to invest there. Conclusion, that “wealth” they have is not such. Only investment and work is what makes a resource in wealth and well-being for citizens when they are made available. That is true for Venezuela, Argentina and any other country in the world.
An apple on a tree can satisfy hunger; but only if someone takes the trouble to harvest it. If not, it will never feed anyone
An Argentine or a foreigner invests because he thinks he has found a need that he can cover by organizing the production of a good or service at a price that allows him to cover costs and earn money; but that, at the same time, whoever is going to sue him can pay. In addition, of all this risk, assume the one to see how to handle it well. So there are many things that can go wrong and make you lose your money and effort. In Argentina, it must be added that politicians intend to spend insatiably squeezing them with taxes that they must add to their prices and beg that the consumer pay them or they will go bankrupt. According to the World Bank, the country is in 21st place, out of 190, among those that most taxes are charged to companies. Not only that, they make a report where they take a typical SME with good profit margins on sales and see what would happen to them in each country if it paid all taxes and fees. Argentina is one of the two places where it would lose money and some are scandalized by the high informality of the sector. If all paid taxes, most would go bankrupt.
If you still think it is extremely attractive to invest here, keep in mind that the majority of government officials on duty consider that they know how to handle work or business much better than their fellow citizens. For example, they can make you lose money by freezing you or controlling your prices; because it suits them politically. Or force you to sell cheaper to some and not letting you sell to others. For example, the true owner of the export currencies is who produced the good or service that was sold abroad and generated them. However, the Central Bank has decided that this man is obliged to sell them to him at a much lower price than others would pay them, causing him to lose part of his income. Now, If a public body can order you what to do with something, that is no longer yours; which overwhelms property rights. They have even prohibited importing supplies; which forces to buy locally a more expensive and worse, making the final products also. The list is long and, in fact, already in 2019 there were more than 67,000 regulations and, since it took office, this government has dedicated itself to increasing them by dozens per week.
If you ask anyone who gets the cheapest lettuce, would they answer the one who produces it or who buys it? No one would hesitate to say that to the one who produces it
Without investment, there is no productive employment or the possibility of generating the necessary resources, not only so that everyone has access to enough food, but also to pay other expenses, including the permanent waste of our politicians and officials. The true Argentine curse is the widespread belief that we are “rich” and we only have to redistribute so much abundance well by choosing miraculous governments that multiply the “loaves and weights”. While the countries that prosper and are successful in eradicating hunger, they are clear that this can only be achieved with effort and investment and that these become more lavish the more the State respects the rights of those who work and invest, the freedom of markets and , in short, legal security. Argentina can be one of these countries, only if it urgently faces the structural reforms necessary for investments to arrive and we generate more opportunities for progress for all Argentines.
Ben Oakley is the guy you can really trust when it comes to Mainstream News. Whether it is something happening at the Wall Street of New York City or inside the White House in Washington, D.C., no one can cover mainstream news like Ben. Get a daily dose of Trustworthy News by Ben Oakley, only at Globe Live Media.