sábado, 26 de octubre de 2002

Argentina, economic innovation is the sustainable plan

There is an only manner to exhibit viability for a banker, to demonstrate him that the debtor will have payment capacity in the future. The main objective of a banker’s forecast is to determine in the long term the consequences from the present plan action and then to provide alternatives to support a consistent and sustainable plan. It’s clear so that a long-term financial plan is subordinated to the integral plan of country’s transactions. In fact, this is the most frequent case of any corporation to get suitable financing. A strategy and an integral action plan. When the financial performance begins with conflict so many times, it ends up affecting economic situation as in companies. This has been happening in Argentina for years. Obviously, the priority of traditional approach should change. It is necessary to develop a commercial strategy that establishes a sustainable plan with a consistent structure of financing. It is not possible to be only applied constant poultice to an extremely weak patient. When the papers are reversed and for getting the financial agreement is more important than the long-term strategy, take place inevitably the defaults and they are the consequence of the own imprudence. It seems a contradiction, IMF requests to Argentina, which Argentina by itself would have to yearn for, a maintainable plan. Would it make sense to reach at unfulfilled agreements again? We have beaten all the record of breach with assistance from IMF. The focus has always been financial; in short or medium term it never was a sustainable plan. The businesses of a corporation and a country need to be maintainable in the long term. In the private sector it sounds interesting a financing agreement in consistent form with the yield rate of the project. The criteria to analyze a country agreement do not differ, except in its terminology. One analyzes growth rates of instead of yield, fiscal sector instead of cash flow and both cut rate of financing.

Finally, satisfaction of the bonds holder will depend on future growth rates of the issued country. It is difficult to determine forecast accurately, but without a doubt it is more interesting and maintainable to do it with a plan that adds a new factor of growth. This is only possible to get it with a marginal factor; a "boom of exports".

Change of Expectations: Good news. It shines essential to make high proposals allow re-positioning international expectations and they anticipate a reversion in economy cycles. Fundamentals, country risk index, stock exchange Index, the asset value models, etc.; they do not always agree with the reality. Sometimes they are exorbitantly high, other very paltry low. - What would it have to happen so that the indicators, which anticipate the things, abruptly change in Argentina? There is a high degree of correlation between expectations and their verification in future periods. As much in consumption as in other variables, these indicators have become important publications at the time of making decisions.

There are sufficient international and domestic threats to Argentina that justifies a creative challenge. With another "only orthodox" plan it reaffirms and increases unemployment and excess capacity, generating an unimaginable social conflict. The social conditioning is strong to extend the application of contractive measures as the most traditionalistic sectors propose. If the social situations become anarchy, some countries and corporations would not wish to make any treatment with Argentina. This can include "not to buy"

Today, the size of the Argentine companies does not present advantages to face anything in solitary way. We do not have volumes. It does not exist vocation neither preparation for exporting. This is incompatible with the high necessity to generate foreign currencies and employment. We have an enormous ignorance about exports markets.

During the last twenty-five years we have been private of budget support for fostering promotion. From the Financial Reformation of 1977 that eliminated the promotional credits for the manufacturing exports, getting new markets, sales of plants with vacant possession, etc.

We have seen frustrating experiences of exporting partnerships between national colleagues, due to the individualistic culture and the lack of capital in producers´ associations.

By virtue of the harmony that would have to reign in a local partnership between pairs, it would be necessary the partners were free of rivalries and disputes.

What will we say in conferences in a couple of years? – How will we be able to maintain the fact of not innovating, having reached bad results?

viernes, 18 de octubre de 2002

Violent Market-Injection Strategic


Granting Japan the "Rent of a Fund for Marketing of Argentine Exports”

The Japan’s Opportunity

Preference Tariff

We give Japan all necessary things to impel the investments that aim to the exports. Clearly without incurring in donation attitudes as questioned at ingenuous opening of the nineties. Simply a system by which Argentina is committed to grant tariff advantages in order to facilitate the placing of Japanese product "made in Argentina".

Preferences as Direct and Specific Foreign Investor for New Exports

(Primary and Derivatives)

The Japanese investment will be part of the global process of the alliance. Therefore it will be significant because it will reveal, from our part more than other thing, the dynamic of the economic process emergent of all proposals. Not only Japan, every investor, invests in a country when the conditions are attractive and the development and profits perspective are considered with a sufficient safety margin. Since the debate in which sovereignty is again in the center of political discussion, compatibility of the Japanese investment is absolutely dissuasive of any doubt that moves away the disappointment of the critic sectors of foreign investments we have experienced. This is necessary to set criteria and to obtain support for public policy.


Japan will be able to compensate its "excessive focus" in electronics – mechanic-metallurgy and computer science. It will diversify its products portfolio and Argentina will send new food developments for a starving world. Japan will take advantage of its experience in industrial and exports integration processes.

A country that reached that the old "Made in Japan", synonymous of low quality, become the paradigm of excellence and innovation, can do much.

A great possibility is opened itself, to enter new markets to compete with European in land foods. The World-wide Trade Organization proposes for 2050 a world without import tariffs. We are just in time. Its commercial leadership in the SEA area will consolidate before that. It could possibly, if wishes so, manufacture its own foods for internal consumption.

Threats That Japan Suffers Today

Its excessive "focus" in electronics – mechanic-metallurgy and computer science. Now its products portfolio is a commodity. Japan lacks natural resources to diversify its supply (foods, energy and sowing lands). Japan imports and spends money in those items that doesn’t have. It will save in this.

Argentina’s Opportunity

We shall receive foreign direct investment instead of financial investment. The buying power improvement compares to ones abroad constitutes one of the most important justification than today we must recover, after the strong devaluation of our currency. Even more, when the main parties and politicians have accepted the autarkic positions are unconceivable at the present time. In respect of possible questions on “if this alliance could cause problems with our main partner. Mercosur? Clearly, the answer is negative. Considering reciprocity and commercial ethics, it is not possible, since the foreign capital that is invested in Brazil, receives as general principle equal legal processing as Brazilian laws grant to national capital, specially being prohibited any type of discrimination, not taken into account in the foreign investments regime, regulated by law from 1962.

Imports of Essential Good not produced in the country

It will be only possible having financial resources and now we are not clearly having foreign currencies and any other financing, which does not come from exports, and capitals that are related to the export. An inadequate handling of the foreign investments caused a fall in the buying power in the long-term. A ferocious devaluation partly has to do with the outflow of capitals, royalty and dividends payments that strongly surpassed the income from exports or the fall in imports as a consequence of substitution of imports in the last years.

The International Japanese companies that come to settle or to be associated to export, will give rise to an own currency flow in both directions. The Japanese companies do not have as main objective the quick return in record time to their headquarters. Also it is possible to infer from its observation, Japanese companies that are associates to local companies, always looked for maximizing their profits in the medium and long term. They search to increase market share more than outlandish profits in the short term. It will create Joint Ventures and Trading Companies together with local companies. We will industrialize primary products and foods "adding value" instead of selling grains, crude oil and meat. The employment will grow; we will improve our international perspective.

Import Technology, Know How and Capitalize Our Exporting Patrimony in the Long Term.

In respect of introduction of new technology, this fact could constitute a profit business for Argentina in the medium term. For taking off, our industry needs to implement developments verified for food manufacture. For that reason, the technology as much as investments they are two indispensable tools. We have already proved with intermediate positions trying to create a capital market, with AFJP (pension funds) and other types to aim cash flows to the production, the experience were frustrating. We have as an example, Japanese companies that at the end of the war received USA capitals, and they not only contributed with their technology, but financial resources as well. The strong saving capacity and capitalization of those corporations, supported by rigorous development plans, allowed the Japanese capitals slowly retook the control of the main companies. In addition it also made possible that Japan developed own technologies and since twenty years it has been an exporter of know how to such industrial centers that before supplied them. With the plan running a phenomenal explosion of foreign exchange took place.

Incorporate the Best Production Practices (the inventors of the Kaizen, Kamban, and Just in Time, Quality Circles, Jidohhka, and Deming).

In order to understand the magnitude of which we would be incorporating we review some basic concepts. If we watched them under a retrospective manner will allow us to understand more about how in only forty years from the end of the war, Japan reached the second position as worldwide economic leader. Kaizen means improvement and it is a key of Japanese competitive advantage. In addition it means continuous improvement in personal, familiar, social life and in the work. When it is applied at work, it is continuous improvement that involves all, businessmen, managers and workers equally.

Operations Scale, reduction of production costs, Just in Time is a technique developed for the production control and the stocks that is part of the Toyota’s system production. It was created to avoid the waste of production. Warusa-Kagen is a term that means the observation of the things that still are not a problem, but they do not go absolutely well. The worker is who becomes a first grade of improvement and prevention. Kamban means signboard. This is a communication tool in the “Just in Time” system of production and stocks control. We could follow analyzing the benefits that means to incorporate the technology and the practices that reached highest productivity; best quality and flexible technologies for manufacture practices in a very short time, by means of an alliance with Japan. To better prices of exports in an economy as Argentina, better internal prices that benefit our local consumers. As a result, it would grow the employment based on the activity levels and it is going to generate a virtuous circle of production and employment.

Immediate access to Traditional Markets of Japan

The increasing importance of Asian markets for the Japanese exports, those fully surpasses the exports volume to the United States, endorses the strategic interest of Japan and ours to join, to participate in the consolidation of that economic geography base of domestic consumers in the Asian Pacific area. The direct foreign investments made in the region by Japan, show that trade with Asia will continue increasing, since a significant percentage belongs to the commerce "intra-company" of the conglomerates and its regional subsidiaries. Could we go into markets together with Japan and its subsidiaries in the region, to diversify and commercialize new products from Argentina’s plants? The answer is yes.

We could extend its product portfolio with product lines or families that are absolutely lacking in it. Commerce and investment affect the slight joint of industrial and technological Japanese policy. This situation contributes to explain why we could copy the Asian model (taking into consideration the differences of the case) that has become a region more and more centered in commerce and investment joints together Japan, with so favorable results. The idea is to place us in Japan’s hand since today it is the dominant player in Asia, technological leader in the region, main supplier of capital assets, "the main exporting center", its main financing source and external assistant in development and more and more main exports destination.

Healthful Business Relations

Japanese companies have made sure not only profits of participant companies, but a maintained increase the regional productivity, as well as improvement of living conditions and consumption in all countries in which they conducted its actions. We observed that despite being an eminently private process headed by the own companies, the growth of the Japanese direct investment is a fundamental component of the industrial and technological policy of Japan. Frequently it has been reinforced by assistance development programs handle by the Japanese government. The growth in Japanese direct investment is the immediate and non-accidental result of maturity of the own internal market and the increasing necessity to beat local limitations in the economic growth.

Increase of local costs of production, saturation in the internal market, technological development, protectionism and commercial barriers that other countries apply.

Appropriation of "Cultural Know How" from Asian Markets

After the Japanese government lifts restrictions to capital flows toward outside, the national companies began to take action with extreme aggressiveness in order to grow in sales and to produce even more in the regional markets of the Asian east. In this way they exceeded the American investments. How they do? They invest whenever possible in majority subsidiaries to make sure cheaper supplying sources for they production, a big part of them are exported. Between 1977 and 1988, the direct investment of Japan in the region of Southeast Asia quickly grew more than twice with regard to the United States that was tripled. In that period the exports reached the sidereal number of 32 billion dollars. Exports to third countries, as well as the direct sales in the local market of receiving country, have continued being the main attraction for new investments from Japan. At the same time that countries as Korea, Indonesia or Malaysia arose as receiving for investment for the manufactures production, for many Japanese companies the Southeast Asia quickly became its main inputs source for the production and provisions for exporting to other regions of the world.

Long-term Planning:

The enormous exports of Argentine products made by the alliance with Japan must be made with increasing levels of added value. It is a central objective of industrial policy and economic planning in general, since with this proposal in the future, we aspired to generate currency income from financing sources unknown.

Since the mechanisms of market by themselves cannot guarantee stable and necessary foreign currency income based on a mere interchange of goods and services to serve the renegotiation of national debt, this proposal occupies an absent and interesting space for all interested sectors. I am proposing to use the commerce capacity intra Japanese company with its own channel of distribution of the subsidiaries in all parts of the world. In addition, this will grant huge advantages for barrier of imports in biggest and protectionist countries. For example in the United States 73 percent of Japanese products that enter the country, do it through Japanese companies that are settled down. Everything is made within the legal channels of commerce and competition, but full optimizing the existing possibilities.

"Pro industrial” influences from Japanese Companies

Repeating that peculiar strategy government-industry practices by Japan, with approved goals by consensus in the long term, in which the essential is not the speculation and fictional immediacy, but the well being, the balanced development of society and economy as a whole, will represent a decisive and influential paper for Argentineans of the last generations. Creating and teaching the results and verifying the best standard of living that offers this option, we could have an own cultural dynamics of affection for production and work, which certainly we have left on one side. We could replicate the Japan Productivity Center, a labor University that has a program to educate the union executives in strong concepts of businesses administration, so that they could negotiate better with management and could work in a close way.

jueves, 10 de octubre de 2002

A Cultural Transformation in Argentina

We needed a change in conceptual vision. We finally began to play in two leagues simultaneously. The Combat League in a short term and the Match League of Long Term. This burst of a productive economy of exports, is not other thing that recognition and correction of our derivations. The irruption of a commercial- productive focus changes the way to do businesses and therefore the form to plan the life of Argentine citizens. We passed from twenty-five years depositing money for thirty days to strategic plans and productive development. We had first “the mother country contractor”, but later the “bank contractor”. Before the privatizations, the industrialists were suspected because they made businesses with the state. After the privatizations and the financial opening the banks lived doing businesses lending money to the state.
Why must we finish the “exclusively financial focus” in Argentina?
(Paraphrasing Bill Clinton in his electoral campaign) It is the clumsy culture!
The financial focus is an approach that has much to do with the Anglo-American culture and by the way it is useful to them. This perspective applied to businesses allows admitting the free circulation of capital, without of uncontrolled or excessive volatileness risks. This form to operate is related and requires what I could call a " conscience of own thing " as a country and individual citizens. For these cultures transcendental thing is the foundation. From their origins, they are countries with societies founded on Biblical principles emanated from "the Reformation", in time they made flexible, but always present in the popular thought. Respect by the private ownership in their communities, personal and familiar dependency of the own effort and the aid of God. The degree of necessary controls in a society with those original bases, is noticeably inferior to ones from a society that has lived without foundations by many years, in a permanent instability situation (historical reference: - from few years of independence, we already lived the anarchy) "every man for him self" could be written in the knavery manuals of the leadership in general. From the evaded one of his social layer, to the exaggerated conscientious public employee with three last names of his ancestry, although so foolish and rogue as the first one. Clearly, these are not economic problems but it influences and takes effect on the economy’s operations in a categorical and decisive way.
Living on foundations, is intimately bound to the reformist ethics, where people believe in the system because in consistent form, they are mainly confident and with a higher level of commitment than the average of the countries whose foundation is less solid. It’s for that reason this citizen are more confidant and his legal system works. A previous electoral survey in the United States showed that the ninety and nine percents of the voters would not vote by a non-believer President or without an explicit religious commitment. Is it truth that nobody imagines in Argentina a capable President to request pardon publicly? I could mention even the humiliating examples of a North American President, giving to details of his affair before the television cameras to the whole country. Later, a population that after listening to him forgave him and increased his popularity in vertiginous way. For many reasons that situation is not possible to live it here in Argentina today. I would like to imagine to a civil employee apologizes, but it does not happen. The ex- minister of the Convertibility, Domingo Cavallo, affirmed in the United States that he would never more accept to be Minister of Economy, wont he? In addition, "he does not have anything for regretting". An ex-
President and present possible candidate says: "my government was a most successful". The founding President of “cacerolazo” (hit the pot) or the phrase "all of you go away" said soon after his final leaving by helicopter: "a plot decided to finish my government". In addition another candidate for President, pretends that he was not Minister of the ex-
President De La Rúa during two thirds of its mandate. Three ladies with strong mass media image, two recognized Representative plus an ex- Minister and at this time all of them are candidates, that made campaign pre-electoral with De La Rúa, they never mentioned their political responsibility. A private university that it had recognized authorities and professors as Minister of Economy, Vice Minister, President of the Central Bank (BCRA), as thus also other civil employees in the economic and financial area, they do not assume responsibilities. The President of this university declared in a non-impartial mass media that all the misfortunes of Argentina are in the Congress and the politicians for those he and his training center were dedicated. It seems that in Argentina, nobody is mistaken nor regrets his errors. And much less one is prepared to apologize. Then on this way, the executives or bureaucrats of those societies of reformist origin do not consider reasonable to help. Remember that for its conformation, God and/or the personal effort are the one in charge to help, each one makes his part. Although it is a universal law and non-reformist, a principle to request aid is the following: first it is necessary to lament the errors, to assume them and then to request tolerance. Our politicians and economists, when they were in power, did not do it and they haven’t still done it. Those, who allowed the practice to take money cash and to spend it over the possibilities, and left the disadvantage to the next, they have not perturbed at least. This is long questionable. But by other side, moneylenders and bond investors, ambitious to yield crude and unrealizable profit, must become a reconsideration