Subsidies and social plans: Gabriel Boric puts Argentina as the example that should not be followed in economics

A harsh criticism of the countries that extend aid such as direct transfers was made this morning by the president of Chile, Gabriel Boricwhen asked about the measures in which the government is working within the scope of the Chile Supports plan, to promote the inclusive reactivation of the economy.

“Here we cannot expect solutions to the structural problems of inequality of Chilean society are resolved with direct transfers, because that is bread for today and hunger for tomorrow”, affirmed the president, in an interview with Radio Cooperativa.

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borik referred to the series of direct support that, during the most critical period of the pandemicwere promoted to help families in the midst of the crisis, such as the Universal Emergency Family Income (IFE), or 10% withdrawals. In this sense, he affirmed that “when we raised the universal IFE In April 2020 we were in a situation where the State, as a result of the sanitary measures, rightly told the citizenry that they could not move, and therefore, it was necessary to have universal support”. But she warned that “That is not sustainable over time, and countries that act irresponsibly in fiscal terms end up going bankrupt and end up doing a lot of damage to the majority of their population”.

Chilean President Gabriel Boric (right) shakes hands with Argentine President Alberto Fernández before a meeting at the Casa Rosada on April 4, 2022. (ESTEBAN COLLAZO / AFP).

“On these issues we have to be precise, we cannot put everyone in the same bag. I believe that when state aid becomes chronic, as has happened in some sister countries, it ends up distorting the economyand that ends up doing more harm to the population”assured.

After that, Boric referred to the case of Argentina. “I recently went to our sister country Argentina, where salaries in the regulated sector had risen by 74% in the last month, inflation is 70%, and the level of informality is about two thirds.. So, if we are not responsible today, where universal aid was delivered, withdrawal policies were carried out, but there is a time when that must be stopped”.

In line with the above, he mentioned: “Here what we have to do is strengthen employment, point towards structural changes in the development model, we certainly have to support the middle class, and those who need it most, through, for example, the protected basic basket, or through specific subsidies targeted at the productive sectors that have been left behind, such as the world of tourism, improve laws such as the one of payment to 30 days or of insolvency, so that the SMEs can have greater participation in the market”.

“Here there are structural measures that we have to take while we have a short-term agenda such as the minimum wage, protected basic basket, containment of fuel prices. Do not tell me that nothing is being done,” said the Chilean president.

Source: Elcomercio