22/06/2020

International flows and the comprehensive health of Argentina

"To translate internal needs into external possibilities to expand a society's power of control over its destiny". This is how the former Brazilian Foreign Minister Celso Lafer famously visualized the task of foreign policy. To take advantage of these external possibilities, our country must encourage the international flow of goods and services, the financial and technological, of ideas and culture, and of companies and people across borders. In the face of the Covid-19 crisis, numerous flows have been abruptly and absolutely stopped globally and in Argentina. This transitory immobility cannot lead us either to conceptual or real immobility in our international relations nor to the temptation of isolation.

Although the emergency of the Covid-19 pandemic has forced several international flows to stop for health reasons, it is necessary to fight for this transitory immobility to affect the nation's integral health the least possible. Thus, it is the integral health of the country that we must take into account when conceptualizing how to interact with the world in the post-pandemic. Especially, given the delicate economic context that preceded Covid-19 and that later became even more fragile with this virus. Thus, in our global relationship we must avoid the tendencies to generate autonomy through distance, already experienced in the last military stage and during the Kirchner governments. On the contrary, we must generate greater degrees of autonomy through participation at the global level or, better still, through the diversification of our flow of international exchanges.

In a surprising manner, the flow of a virus has made the flow of people, including businessmen, students, academics, intellectuals, artists, and tourists, stop. This has a daily effect on the economy and comprehensive health of nations, including ours, where it has been decided to cancel the movement of people until September the 1st, thus creating an additional element of paralysis.

Fortunately, the pandemic has accelerated the flow of ideas and cultural experiences through virtual media, helping to improve the comprehensive health of our citizens. Thus, in the same way that we can enjoy operas in the New York Metropolitan or concerts of the Berlin Philharmonic, we can also see, from anywhere in the world, the plays of the Cervantes and San Martín theaters, as well as cultural events of the Modern Museum. Furthermore, the exchange of ideas is visible in the participation of the Head of Government, Horacio Rodríguez Larreta, in a virtual meeting with the mayors of the main cities of the world, to discuss the best way to face the challenge of Covid-19 at an urban level. Or, also, in the virtual and international meetings whose objective is to prepare the Bienalsur 2021, which will have a global and diversified impact.

By supporting these cultural platforms and other multiple uses, the continuous development of technologies and companies in the field of information science must be promoted through the flux of technological knowledge. These technology services companies have taken advantage of their strengths at the local level to successfully react to the challenges posed by the Covid-19 where, for example, several productive sectors had to abruptly turn to virtual sales. Parallel to this forced acceleration -or to this digitization by default-, the opportunity for companies like Mercado Libre remains high, both nationally and internationally. As a reference, in the USA the percentage of online sales over total sales grew in the last 8 weeks by about 11 percentage points (from 16% to 27%), the same amount it had grown in the last 10 years (from 5% to 16%). These developments at the private level must be complemented with technological knowledge flows applied to improve the comprehensive health of our country, by institutions of the public sector. A critical area in research and development should be the field of artificial intelligence, but aimed at helping make our human resources more productive instead of replacing them.

Conceptualizing and defining what should be the most effective international flow of goods and services for our country seems as a titanic challenge from the view of the present extremely fragile economic moment. In a global scenario where there are probably lesser degrees of interdependence, but where strategic autonomy should not be confused with self-sufficiency and/or isolation, a deep reflection exercise is necessary on how the productive sectors that export or can export should be strengthened. If, on the one hand, it is necessary to export to -among other objectives- obtain foreign currency, sectors that cannot sustain themselves over time should not be encouraged, given the few resources that will be available to the State. In turn, it is time to look for opportunities to increase exports to markets and sectors where global suppliers self-restrict their exports for economic or logistical reasons.

Another challenge arises in terms of ensuring a positive impact in the flow of capital to the country. On the one hand, it is necessary to have the determination to be able to conceptualize a development vision, sustainable in the macroeconomic field, that can attract Argentine capital abroad, or direct foreign productive investments. On the other hand, the negative impact of foreign speculative capital must be limited, imposing measures that allow these capitals to leave, at least, only after one year of entering the country. In turn, an agreement must be reached so that the State cannot borrow incrementally, unless the motive was infrastructure works. In this way, it will only be possible to indebt future generations on works from which they will benefit, and not due to payments of general expenses corresponding to the generations that preceded them.

In terms of international flows that ensure the comprehensive health of the nation, perhaps the most critical test is to ensure that the exchange of ideas continues both politically and in an open manner. Particularly those who reject populist and/or authoritarian temptations, and those who defend the liberties of citizens. At this point it seems appropriate to recall what was written by the classic Greek historian and keen analyst of the Peloponnesian wars, Thucydides: "The secret to happiness is freedom, and the secret to freedom is courage".

Patricio Carmody is a Specialist in International Relations and consulting member of CARI and CIPPEC. He has engaged in postgraduate studies at Dartmouth College, at Harvard and Columbia universities, and at the Ecole des Hautes Etudes Internationales in París.