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ECONOMY | 05-10-2023 15:29

Business world recalculates in face of Milei wave – early retirement ahead?

One sector is "worried" by the advance of a mood which could affect business institutions. A new ‘grieta’ chasm has opened up between the "prebendarios" (those living off the state) and "autónomos" (self-financing). A youthful sector of the economic elite already backs the libertarian.

“The system has broken down,” reasons the chief of a farming lobby representing one of Argentina’s most dynamic productive sectors. Inland tours have left it clear that the Javier Milei wave does not respond to a warning or passing anger but to the impossibility of traditional leadership finding it to pick up daily needs and transform them into proposals. The fear of the “business caste” – known within political circles as the ‘círculo rojo’ – is that the splinters of the old politics are beginning a process of early retirement for some trade union and business leaders, accelerating a renewal which was not on the agenda.

The institutional and political crisis has destabilised the government agenda, as has the scandal unleashed by the controversial trip by former Buenos Aires Province Cabinet Chief Martín Insaurralde, which has also left out on a limb the representatives of the historic business world used to dealing with presidents when it comes to re-elections.  

“Of course it affects us. The bad image of business was always used when things weren’t working out for the government at the time,” a private-sector bigwig admitted to Perfil.

Ever since Milei consolidated his ascent on the public scene, a grieta rift has been installed among the círculo rojo establishment, the historic company owners who financed the libertarian as an outsider alternative to the government on the one hand and their heirs or the creators of new technologies to whom changing times come more naturally.

 “There are scared businessmen because the system with which they used to negotiate has broken down. We youngsters see this situation as something much more natural without falling into paralysis. We are also part of the new,” a young businesswoman who owns a firm based in the north of the country told Perfil.

A couple of years ago Milei visited a member of the Grupo de los Seis (or G6, formed by industry, construction, local banks, retailers, farmers and Bolsa stock exchange representatives) “to get to know the needs of the sector and to begin cultivating support within the Argentine business world.” Dollarisation and shuttering the Central Bank were already part of the model he preached to the establishment but many Argentine owners reacted almost unanimously: “What can we learn from a loony who just screams on TV?”

During a visit to the Buenos Aires Province hinterland, a group of wealthy ranchers began to show their preference for “Milei Presidente.” Anti-Peronist, even more so after their struggle against Kirchnerism, today they see the libertarian as both a tactical and ideological vote also sustained by the “disappointment” caused by the Mauricio Macri government.

“Kirchnerism robbed everything but we also had a rough time under Cambiemos,” said one of the farmers to justify himself.

 

Worries of the state-linked “red circle”

The private sector needs to be differentiated between a “prebendario” caste doing business on the basis of state contacts and the self-financing “autónomos.” Within the economic elite there is a sector which will be able to survive social persecutions and political accusations by sustaining themselves with their own productive capacity. The fear is that opening up to world markets, as promoted by Milei, will leave them competitively adrift.

“We won’t last a minute because we come with a debt burden which is not ours but which we will have to face to gain access to dollars at the official exchange rate. If they open up to imports, many of our companies will go bankrupt. We hope that Milei takes into account that state protection does not mean privilege but smart trading with the world,” a leading member of the UIA (Unión Industrial Argentina) expressed in alarm.

 “Businessmen get a bad press and we have to see how we can change people’s minds to show ourselves as job-givers and creators of wealth. But for Milei it’s all caste, except for those who take his side and stop being caste, as happened with the trade unionist Luis Barrionuevo. But he will not be able to destroy everything and he will need the private sector to resolve the problems which he will have to face if he becomes president. But the state-linked prebendario sectors are going to have a very rough time,” the owner of a Greater Buenos Aires factory told Perfil

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Ariel Maciel

Ariel Maciel

Editor de Economía Política en Perfil.com - Mail: [email protected]

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