What seemed like a 180-degree turn became a 360-degree turn: the Argentine economy climbed steps until it reached the same place it had reached more than 35 years ago, in what was maliciously called the “lost decade,” characterized due to a lot of instability in a framework of very high inflation. That is, what draws the attention of foreign investors and economic analysts to how local companies and consumers manage to survive in an extremely adverse environment: heavy tax burden for those who are in formality, a bureaucratic tangle that slows down production and mediates decisions. , a financial system that does not provide credit and a legal-institutional framework that distrusts investors and producers as contributors of added value. And as icing on the cake, an absolute leadership position in the embarrassing annual inflation ranking: 211% in 2023 and a projection of 50% for the January-March quarter, which would reduce the post-devaluation price jump of last December 12 by 100%.
Precisely because of this inherited resilience and what was learned through bankruptcies and erosion of profitability, the adaptation to the new vertigo that the Argentine economy entered when emerging from the pandemic, can be highlighted. some lines of decision that try to adapt to the new scenario and not go bankrupt in the attempt:
1.UVA financial placements. Positive fixed interest rates have not existed for a long time in Argentina. As a way of financing public credit through bills and bonds placed to the banks that in turn supported them with fixed terms in their retail public and companies, the only ones that won in that game were the entities that lived thanks to the “spread”. ” financial. And the State itself could obtain cheaper funds that way. But the continued redness of the fiscal deficit also exhausted this type of placement due to the fear of an expansive overflow that would suddenly turn to the dollar. The other alternative was for savers to sacrifice the rate, but secure their capital by indexing it with the UVA coefficient, the same one used to update mortgage loans. The inflationary acceleration of the second half of 2022 and the jump in December after the devaluation pushed the CPI to reach a record of 25.5%, which is why demand for this coverage exploded (+150% since 11/12). To mitigate their demand, the minimum term was set at 180 days and thus, although it is medium term, there is adequate coverage that gains in security what it loses in liquidity.
2.Salary negotiation. Another old lesson from the dizzying ’80s is to analyze, when choosing a job or changing, what the update is as opposed to the current salary. With three-digit annual inflation, not only the agreed salary is important but also the frequency and magnitude of the update established in the sectoral joint venture or the terms of the internal agreement, in the case of a hired professional or a specific niche. Recently, for example, the Union of Loading and Unloading Workers of the Argentine Republic (UTCyDRA), the union under which Mercado Libre staff is included, agreed to a 51% increase for the first quarter of the year that will be applied in three installments. 17% with automatic inflation clause for all eligible personnel. During last year, for example, a salary reference that would have projected the same inflation as the previous year (94.5%) and would have had only one annual update, would have lost 37% of its purchasing power.
3.Collection of materials. Another way to compensate for price fluctuations is to tie the destination of savings to the value of the good that you want to acquire in the future. Savings for specific purposes but, unlike self-saving plans, they must lack fine print and have no administration costs. Construction is a sector in which, although labor is the most important input, the cost of materials, often with a strong predominance of imported inputs, is subject to devaluation, or shortages due to supply difficulties. To this end, some yards and construction materials firms enabled the possibility of stockpiling to facilitate “savings” on the goods that are needed and withdraw everything when it is paid for later. “The collection of materials is presented as an especially attractive investment option for those involved in construction projects. By purchasing materials during favorable market times, investors can capitalize on future price increases and shortages, thus maximizing their potential profits.”he explained Federico Lawlerregional manager of Bercomat family, a leading company in the sector.
4.Money in account. Another way to get the most out of excess liquidity is for oil companies to invite their clients to transfer money in advance and thus obtain benefits that, in the case of YPF, For example, it is 12% for premium fuels and with weekly limits ($1,200). Shell launched a similar system, but with the attraction of being able to use account accounts. Payment Marketin constant dispute with the banks to return some interest to savers who see their salary accounts liquidate faster and faster throughout the month.
5.Opportunity to build loyalty. When everything goes up, the announcement of a voluntary retraction by a company is a sign that exchanges present profit for future profitability by building customer loyalty. For example, in the midst of increases of between 40 and 50% for January in private medicine, Boreal Health decided that the increases would be at the rate of salaries (with the RIPTE index) so as not to affect the pockets of its more than 250 thousand members so much. “We live, depend, function and grow on the basis of the internal market and for us the internal market is the registered workers and they are feeling the impact of the increase in prices, which is the only thing that was released, but salaries were not adjusted. ” express Mario Koltanpresident of the entity.
Lessons that both at an individual level (to regulate fees) and at a collective level (by joint ventures or with a mass of clients) it is necessary to compare not only amounts but also the time factor. A circle.
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by Tristán Rodríguez Loredo
