The world is fragmenting and America is ramping up its industrial policies

“Industrial policy is in style” in a world where populism and international tensions mark a global geography. America’s “deflationary act” raises taxes, industry leaves China to invest in Mexico, Canada and Europe “Do something similar in the UK, that’s the argument.”

“Politics is not good in the world,” Chilean Andres Velasco, dean of the London School of Economics and Political Science, said ahead of the 60th Idea Colloquium in Mar del Plata, France.

He revisited the war in Ukraine, and noted that it’s “two hours” by plane from Qew, “from London to Buenos Aires.” He reviewed the “autocracy” in China, whose tensions with Taiwan “could be a disaster,” in the Middle East. The ongoing war “this time is not only between Israel and its neighbors” but also includes Iran.

“Asset prices do not reflect these risks,” warned Velasco Brenes. He pointed out that while this was seen in oil prices, it was not registered in US, European or Chinese stock markets.

Expert mentions Latin America’s “non-traditional export”: Is the populism lurking in India, Hungary or Turkey today “going back to America?”

“Many populists are becoming increasingly authoritarian,” he warned, “may win elections” when they “govern badly,” and “ultimately the economy when the politics are bad.”

Velasco France asked: “Can the world prosper if liberal democracy is weakened?” He explained that “the basic reality of the world is that it has begun to fragment again” and that “they have stepped into globalization.” He gave the example of the tariff increase for electric cars in the US.

He also warned that this fragmentation would have “national security implications” in a world where countries do not want TikTok to “keep behavioral data”.

“If the world is divided into two blocks, what will the rest do?” he asked. He raised the question: “Are we aligning ourselves with Western democracies…? Chile sells 70% of its copper to China,” Trans-Andean said. “That’s going to mean a dilemma for governments,” he said, referring to Argentine soybeans.

“Industrial policy is in style” as it has not been in Latin America since the 70s. “On this continent, industrial policy has gone badly because of inefficiency and corruption”, but instead it has produced results in Korea or Taiwan, he said.

After warning that America’s “Detection Act” — approved in August 2022 — “has nothing to do with inflation,” the expert asked himself. Is there good or bad? “With Trump or Harris, there will be one anyway,” he warned.

Despite debt at 85/90% of its GDP, “the world is growing less, China is much less, the exception is the United States,” warned Andrés Velasco Brañes.

“China is no longer very poor” and will “grow slowly,” the expert said, adding that Beijing’s forecast of 5% growth this year is “not very credible.” “What’s going to happen in Argentina soybeans is not very promising” in this framework, he said. Likewise, he warned that China would no longer be a “major lender” for infrastructure projects.

“Latin America will grow less,” said the dean of the School of Public Policy at the London School of Economics and Political Science. A diplomat with the host country, he exemplified: “Chile has lost at least half of its capacity to grow.” For example, he pointed out that fiber optics could replace copper in the medium term.

He said we can never forget the litigants who “corrode us in this area”. He pointed to the international question of the return of higher rates in Washington after 25 years of 0% financing.

To balance the forecast, he pointed out that “there are many investments from manufacturing companies in China and are not going to do so anymore”; Moving on to “Mexico and the Caribbean,” it suggested two related advantages: trade agreements with Washington (which includes Mexico, Colombia, and Peru) and the use of the English language.

After noting that “the world is in a green transition,” he said, “There’s an alternative, talent and a long tradition here,” that “requires investment. Who’s going to provide the “trillions”?” Colloquium.

He maintained that “it is not possible to export a lot of goods”, but recognized that in addition to natural resources, the country has “huge potential in services” within the framework of the knowledge economy. “I can export a product without exporting labour,” he noted.

Role of Entrepreneurs

Gabriela Renato, President of the 60th Partnership, Treasurer of IDEA and Group Manager of Visa Argentina and the Southern Cone Region, asked the businessmen attending the 60th negotiations that the proposals prepared by the fifty CEOs since December “are not in Mar del Plata”. and creators of “value and competitiveness”.

In this sense, he proposed “for Argentina to assume a leading role in a new horizon”. He said he asked Chat-GPT about Argentina in 1965 – the year of the first talks – and he replied that answers could come from the present: the government was trying to stabilize the economy and inflation in the face of strong social pressure. And agriculture is a major growth factor.

“I thought I made a mistake in my haste,” he joked. Out of a total of 25 calendar years since 1950, “we are the country with the most years of recession in the world,” he recalled. “In 50 years the growth rate averaged 1.8% per year; the rest of Latin America was 3 .2% while our GDP rate would be 60% higher,” he noted.

“This is going to be an important year to address the issues,” he said. He highlighted that one out of every two Argentines and 7 out of every 10 children in the country are poor; “It should hurt us. It is up to us as leaders to contribute to the development of the country,” he said, based on the creation of quality private employment.