OP-ED EDITORIAL

Editorial: Simplifying can be simplistic

Born in this century, Macri’s PRO seems to feel that 19th-century legislation has no place in the 21st – for example, this decree consigns to the scrap-heap an 1888 law for the control of veterinary diseases and an 1891 law against locusts (a recurrent plague) largely due to their vintage.

President Mauricio Macri.
President Mauricio Macri. Foto:COURTESY PRESIDENCY.
Having tried to whisk a controversial pension reform silently through Congress in the Christmas prelude, the Mauricio Macri administration is at it again in the new year, sneaking through an omnibus deregulatory mega-decree in the midst of the summer holidays. This is not to say that the two cases are comparable or that either legislation is necessarily bad – simply to call for more open government.

The pension reform, clearly negative for retirement and family benefits in the short term, might yet prove positive if it cuts the fiscal deficit and shifts social spending toward the youngest age-groups, although nearly half of them live below the poverty line. The deregulatory decree, however, need do nothing more than deliver on its aims to cut red tape and lower the “Argentine cost” in order to justify itself.

Given how over-regulated and clogged with red tape and middlemen the Argentine economy is, it becomes highly likely that many (perhaps even most) of the 170 items in this megadecree deserve only uncritical approval and applause. Yet both the modernising spirit and the trust in the free market underlying this decree need to be questioned. Born in this century, Macri’s PRO seems to feel that 19th-century legislation has no place in the 21st – for example, this decree consigns to the scrap-heap an 1888 law for the control of veterinary diseases and an 1891 law against locusts (a recurrent plague) largely due to their vintage. But if even the laissez-faire society of pre-Radical and pre-Peronist Argentina thought that something was worth regulating, then it probably was and remains worth regulating, even if updating is needed – veterinary disease and food quality control are valid concerns.

Another constant strand in this decree is an import-friendly tendency. “Import-friendly” is automatically a bad word for some in this highly protectionist country – opening up one of the most closed economies in the world should not be blindly rejected but having said that, a record 2017 trade deficit of around US$9 billion should perhaps invite more caution and less dogmatism on this front. This decree is clearly a backlash against the over-regulated economy of the Kirchnerite decade but there is also a basic misconception here which could defeat the purpose of attracting overseas investment. Kirchnerism is often criticised as an orgy of state intervention, and there is much truth in this, but the opposite occurred with the regulatory agencies for public services – these were co-opted and emasculated in order to allow free rein for crony capitalism (cynically described as “experts in regulated markets”), something lying at the heart of most of the ongoing corruption trials. This vacuum in the regulatory framework deeply worries overseas investors – Kirchnerism may have left an excess of bad regulation but it also left a lack of good regulation and this is not going to be solved by a deregulatory decree. It might be taking institutional respect to extremes to insist on all this decree going through Congress – in any developed country administrative ordinances vastly outnumber parliamentary laws and that is the proper sphere for most items – but it could only be improved by a wider debate. The Macri administration makes a great song and dance about politics of dialogue and consensus (normally under duress and usually on the basis of allowing the other side to express its opinion rather than actually listening to it) but this underhand manoeuvre shows up a darker side. A broad debate might well show Macri to be right on most points, but debate itself must not be dodged.




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