Antonio Aracre, the CEO of Syngenta, who a few months ago proposed a "soybean dollar" to determine the liquidation of foreign exchange and allow the Central Bank to rebuild its reserves, now plans a shock plan that -he said- would be effective in cutting a instead of the inflationary acceleration.
With the passage of time, Aracre has become one of the main backers of the Government from the business sector. Syngenta is one of the most relevant multinationals in the agro-industrial sector. It is a Swiss company that was bought by ChemChina, the second largest supplier of inputs and technologies for agriculture in the world.
The businessman never hid his political preference and, indeed, he had a friendly relationship with former minister Martín Guzmán.
The executive of Syngenta believes that -after the success of the "soybean dollar"- that until now it has allowed the Central Bank to accumulate purchases for about u$s2,350 million during the next month, it will be the time to let go of what is really defines as el "Step 2".
No more or less than a stabilization plan that he was able to cut with the process of inflationary acceleration, which was unstoppable.
Aracre has contacts with different members of the economic office to show them their idea. In the last hours, by now, in Sergio Massa's own team, he reported that the cuestion came on giving tours in the minister's head. Even though these same sources emphasize that there is no decision taken.
Despite the efforts of the Government, inflation remains at worrying levels.
How would the stabilization plan be?
The CEO of Syngenta says without changes: Argentina needs a "phase of" to take advantage of the increase in the reserves of the Central Bank. A stabilization plan -of shock- that works as a real "anti-indexing tourniquet".
Aracre supposes that the Government would have to put it on its way in the next few weeks, without major delays, to prevent the inflationary wave from continuing to grow.
It would basically consist of a total freeze of prices and wages -including the official dollar price- for six months.
Before starting the program, Aracre proposes an "equalization of all the relative prices of the economy". The main points prior to the freezing process:
- An update of wages to prevent the freeze from ending with a crystallization in the loss of the purchasing power of workers.
- An additional increase in tariffs for the sectors with higher income.
- A final acceleration of the "crawling peg" (daily mini-devaluations), with the objective that the official exchange rate will hold a freeze for the next 180 days.
According to Aracre, the idea would be that this set of measures be taken by a presidential decree that will go through the Congress for its approval. "The voluntary agreements do not work; they do not work. Here they have to be a measure of obligatory compliance, with penalties for quienes in the lo hagan", he states.
