Only a river separates Argentina from Uruguay, but in terms of trust it is a sea

Argentina and Uruguay, separated by the Río de La Plata (EFE / Raúl Martínez)

The title of the note says: “While Argentina reaches a country risk of 1,900 points, Uruguay gets debt at less than 1%.” Only one river separates Argentina from Uruguay, but in terms of trust it is a sea.

Trust is the raw material of markets and also of relationships between people that begin with words. To have a word is to comply. They say that when there is a word there is already a pre-contract. The letter of a contract is the documented word, stamped and signed. If the word and the contracts have no value, everything is worth less. It cannot be normal for us to live in a country where the will to comply is in doubt.

Country risk may well be considered then a metaphor for mistrust. There are countries where never in their lives their citizens will find out that there is a world index that measures risk.

Here we live the risk and we are so used that the alert no longer puts us on alert. Anesthesia before the risk should be a pathological and mental state. For us it is total normality.

Measuring risk is one of those efforts of the market to quantify and put in terms of indicators the danger of an economic crisis or an abrupt change in the political system of a country or its legal security, that is to say that the rules are followed or that don’t change all the time. It is the way to determine if there is a climate for business. Those that require predictable ecosystems. Nobody gambles on the future in the midst of convulsions. In Argentina we get used to living without being able to foresee.

That is why the high risk of the country is high interest rate to ask for money. Basically because they don’t believe us. They charge us the risk. We have no credit. We have no confidence. The current government spent almost two years showing signs of not wanting to recover it. The paradox of needing dollars but not trying to make them want to return. Getting stubborn to the point of closing vital taps for any healthy economy, that is to say that it wants to function minimally, but not taking sensible measures so that the currencies flow, and above all emitting all the wrong signals.

We get so used to this situation that we should be shocked not to be shocked. Then, the contrast with a neighbor, immediate, close, who is crossing a puddle, although the river is large, slaps us, challenges us for the difference. Of course, trust begins at home.

It is not known if he is in command or is sent (EFE / Juan Ignacio Roncoroni)
It is not known if he is in command or is sent (EFE / Juan Ignacio Roncoroni)

How to think that the country can have credit if the word of the President who goes and returns with the wind has no credibility. If it is not known if they send it or they send it. Or rather, it is known.

That 18% interest that becomes more expensive to request a loan on this side of the Rio de la Plata says that the country has no credit. Neither credit nor faith. And he even speaks of doubt about his good faith.

The news indicates that today Uruguay agreed to a historic loan, issuing samurai bonds in yen in Japan for the equivalent of 442 million dollars at a rate of 0.71%. Money with almost no cost. The report indicates that in addition to obtaining the lowest rate in its history, Uruguay has just received the approval of the International Monetary Fund, which made a review of its economy through the so-called “article IV”, as corresponds to each member country once a year.

The Fund also spoke about Argentina today. A few hours after the President demanded a mea culpa for the loan to the Macri government, already in the middle of the negotiation for an understanding. Kristalina Georgieva He stated “There is still a lot to do for an agreement.” The head of the IMF specified that they are “thinking of a balanced program that is an Argentine program. Not a program of the Fund. Only a program that Argentina supports widely and is its own is likely to be successful, ”he said.

Argentina is unable to outline a plan for itself. The Fund comes to ask for it. But it could be requested by any Argentine who in turn tries to minimize the sketch of a plan or a project for his life instead of thinking if he makes the decision to withdraw his savings from the bank, which he has in dollars because in the peso neither you can trust. How will you be confident. It is true, this government did not invent country risk, but for two years it has been trying to multiply it.

* Editorial by Cristina Pérez in “Confessions at night” (Radio Miter)


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