An investigation by the Córdoba Stock Exchange revealed that Argentines pay much more expensive for clothing and other products such as PCs than in neighboring countriessuch as Brazil and Mexico.
According to the survey, the study warned about “inefficient protectionism” and pointed out that “despite the fiscal cost assumed by the Government to promote national industry, the substitution of local imports is insufficient and, in many cases, increases the price assumed by consumers“.
According to the entity, “with the argument that local production allows savings in costs and foreign exchange, The Government states that no sector is superfluous and promotes, directly and indirectly, regulations and measures to protect and promote the national industryfocused on import substitution, as has already happened on several occasions throughout Argentine history”.
In this context, the Economic Research Institute (IIE) of the Córdoba Stock Exchange estimated that this year andl cost of promotion schemes It will mean around 0.8% of GDP, which is equivalent to 30% of the fiscal deficit goal agreed with the International Monetary Fund (IMF) or the budget of all public works carried out by the Nation in relation to energy, transportation, education , housing and water in 2021. However, they stated “Countries are not competitive to produce everything.”
Technology is more expensive in Argentina
According to the investigation, the study concluded that “the prices of the models [de computadoras] marketed in Argentina are more expensive in dollars than those manufactured in the other two countries”, Mexico and Brazil.
“This is a basic concept of the modern economy, which the IIE ratified with a study in which it evaluated the prices of products that have protection from the State, and reached the conclusion that measures implemented by the Government, in many cases, increase the price assumed by consumers”.
“Con Brazil there is only one computer model that matches, and costs up to 10% more expensive in the local market; while with Mexico there are more varieties in common, and the values are between 19% and 86% higher at the local level,” he specified. The best-selling model costs between 11% and 21% more than its equivalent in Brazil and is 58 % more expensive than Mexico.
“The only product that was stopped being manufactured during the Macri government, computers, is the one that grows above inflation. Computers have not been manufactured in Tierra del Fuego for seven years,” they detail from the electronics industry.
Computer prices are much more expensive in Argentina.
“This is happening because of the decision to have stopped manufacturing computers in the country, where today some educational ones are made and nothing else”, they added and explained that, in addition, at a global level, due to the high demand, those who decide choose to send products to other latitudes first because they take time to pay here and there are usually problems. ” They send when they want and when they can, which means that there is little supply in the market. At times like these, prices skyrocket and the products that are available are not new or state-of-the-art, as is the case with cell phones or televisions, whose prices grow below the information average,” they detail from the industry.
Clothes, shoes and dresses, also more expensive
Beyond the electronic ones, the Stock Exchange pointed out that “Among the most protected are also the textile and clothing sectors.”
“Non-Automatic Licenses (LNA) are the main tool applied in this case: since 2017 there has been a gradual reduction of NLAs, mainly for the first links. Today they affect an average of 56% for the entire value chain. garments have almost absolute protection: 94 percent“.
“In April, when the general Consumer Price Index (CPI) was 6%, the prices of clothing and footwear increased 9.9%. In the year-on-year comparison, the values are 58% and 73.4%, respectively”. As with the electronics“Argentines pay more for clothing than their peers in the region.”
Clothes in Argentina, increasingly expensive.
“A dress costs just a little more than in Brazil and 25% more than in Mexico. A jean, 29% more than in Brazil and 36% more than in Mexico. In dress shoes, the gap is 59% with a Brazilian pair and 38% with a Mexican”. Sports shoes present the greatest general difference: 50% more than in Brazil and Mexico. Likewise, in the local market they also cost more than in New York, London or Tokyo.
“Las sneakers have the largest overall difference: 50% more than in Brazil and Mexico. Likewise, in the local market they also cost more than in New York, London or Tokyo, three of the most expensive cities in the world”, says the report, adding: “The results prove that the import substitution is inefficient, since it does not lower the cost assumed by local consumers; on the contrary, on more than one occasion, it increases them”.
“The development of industries focused on the final links of the value chain does not allow us to eliminate dependence on imports and, naturally, they present a lower added value to production.
How to gain competitiveness?
In order to gain competitiveness and improve the quality of life of the population “it should promote the development of industries that take advantage of international trade hand in hand with specialization”.
“This will allow the creation of more and better jobs, and that Argentines have access to more products and services of better quality and at a better price“, pointed out the study by Fabio Ventre, Deputy Director of the Economic Research Institute of the Córdoba Stock Exchange and researchers Miranda Bandoni and Valentina Vijarra.
Last March, the Cordoba Stock Exchange had issued a harsh statement in which it stated that businessmen are not to blame for inflation and criticized the “ineffective measures” of the government. And at the beginning of last month, the president of the entity, Manuel Tagle, said in an interview with Infobae that the government must stop applying “failed recipes” and warned about the risk of spiraling inflation, although he also criticized the idea of ”dollarizing” the economy.