Friday, November 23rd 2012 - 23:20 UTC

Mujica calls for prudence with salaries: “look at what is happening on the other side (Argentina)”

Uruguayan president Jose Mujica appealed to workers and entrepreneurs to avoid an escalation of salaries and prices which leads “to all sort of fiddling” as is happening in Argentina.

Uruguayan president: “no fiddling with numbers please”

The appeal follows a salary agreement in the beverage distribution sector which is above the cap established by the government in the salaries round with the purpose of keeping annual inflation below two digits.

“We have an example of what is happening on the other side. The Argentine project might like or not, but that’s not the question. The fact is inflation is out of control and has forced them to fiddle all around and they can’t find the way out”, said Mujica.

He added that “we don’t have much margin and we want to make sustainable what we have achieved so far, that is a high employment rate and a better re-distribution of national income”

“Yes we would like to increase salaries 10%, 20% but in the situation we are, doing that would be harmful for people on low incomes, fixed incomes or without organizations to defend them”, because of the inflationary impact.

Earlier this month the beverage distribution sector reached an agreement with a salary increase of 10.16%, above the government’s guidelines. This comes at a moment when other unions kept to the guidelines and inflation in the last twelve months to October reached 9.11%.

The Uruguayan government is pressed to keep to the two digit cap otherwise the round of labour negotiations instead of being annual would become quarterly causing additional turbulence to what is an already agitated environment.

With this in mind the administration of President Mujica reached an agreement with the main supermarkets that dominate 70% of the retail market to offer a basic basket of 200 products at August prices frozen until next January.

The government from its side will keep public utility rates frozen, including fuel, power and urban transport for a similar period, hoping that the two combined can make the local stats office INE show that 2012 will end with consumer prices inflation below 10%.

This has raised complaints from the small retailers who argue they have no guarantees that suppliers will keep to that spirit, or might even try to compensate with them the ‘sacrifice’ they are making with their larger clients.

Nevertheless the government seems to have transformed inflation into a ‘numerical’ challenge for what is left of the year.

But economists, advisors and private universities have pointed out that the problem of inflation is not prices, but rather the consequence and the main cause can be found in government spending.

In effect despite almost eight years of sustained growth, on average above 5%, the Uruguayan government has not been able to contain spending and the budget deficit, according to official data, now stands at 2.8% of GDP.

For the last two months Mujica and members of his economic team have said that “inflation has become the priority” of the government, with the Central bank repeatedly increasing the basic rate which now stands at 9% with the purpose of deterring mainly consumer credit.


47 comments Feed

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1 redpoll (#) Nov 24th, 2012 - 12:02 am Report abuse
Basic bucolilic common sense but none the worse for all that
2 British_Kirchnerist (#) Nov 24th, 2012 - 12:35 am Report abuse
Seems the policy he is defending is reasonable enough, but dissapointed to see him hit out at Argentina, given the close friendship and solidarity that usually exists between him and Cristina. Wonde if Astori has got to him?
3 Troy Tempest (#) Nov 24th, 2012 - 12:40 am Report abuse

Sounds like responsible, conservative economic policies and a good broad, understanding of how they work.

Unfortunately, Argentina, with its runaway 25% inflation rate, is a glaring example of what could happen.
4 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 12:46 am Report abuse
Isolationism and let's get rid of all these backstabbing nations around the world.
5 Troy Tempest (#) Nov 24th, 2012 - 12:56 am Report abuse
@04 Nozzy
“Isolationism and let's get rid of all these backstabbing nations around the world.”

“Isolationism” - nobody is stopping you. Good luck.

“let's get rid of all these backstabbing nations” - what does that mean? Attack Uruguay??
6 ptolemy (#) Nov 24th, 2012 - 12:56 am Report abuse
Well, he's just calling a spade a spade when he sees it.
7 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 12:59 am Report abuse
get rid in the isolationism sense means “stop having relations with them”. I'm sick and tired of everyone criticizing Argentina when the rest of the countries of this planet are in the toilet.
8 ptolemy (#) Nov 24th, 2012 - 01:04 am Report abuse
Go total isolation then,..but of course you would have to lock your people within the country. I don't think that would go over to well, a bit too nazi.
9 Joe Bloggs (#) Nov 24th, 2012 - 01:07 am Report abuse
4 whatever your name is at this moment

You keep promising this isolation model- and trust me when I say we welcome it- but you're still fucking here.
10 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 01:11 am Report abuse
Isolationism does not mean “dont talk to strangers”, it means “don't trust them and don't have dealings with them”.

'don't talk to them or look at them' becomes xenophobia.
11 Troy Tempest (#) Nov 24th, 2012 - 01:16 am Report abuse
@10 Nozzy

”Isolationism does not mean “dont talk to strangers”, it means “don't trust them and don't have dealings with them”.

I understand and respect your sentiments.

However, if you still allow your population to have access to internet news, they may start to feel that they are 'missing out'.

Would they be free to leave? Could they cash out and take their possessions?
12 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 01:21 am Report abuse

Sure. Missing out on what I'm not sure though. An isolationist country can still trade or barter.

The USA and Argentina were in fact isolationist in the 1880s-1910s period, before WWI. They exported and traded, but had no alliances with anyone, and kept to themselves... funny that is when they those countries did their best in terms of creating wealth and avoiding war.

In fact Condorito admitted that my description fits the “Chilean” model: trade and barter, but don't get involved in alliances with anyone or political unions (Mercosur exhibit A).

Chile has had its best years by following this model, which is not a Chilean invention, but a rework on what was Argentina's model in the lat 19th to mid 20th century (and the USA's until WWII).
13 Troy Tempest (#) Nov 24th, 2012 - 01:24 am Report abuse
@12 Nozzy

Are you saying we might all be better off if you tidied up your affairs and withdrew from the UN ?
14 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 01:26 am Report abuse
“tidied up our affairs”, sure (except paying the vultures). Pay everyone else, satisfy the small bondholdes, pay the Paris Club, and absolutely get out of the UN, and IMF.
15 Troy Tempest (#) Nov 24th, 2012 - 01:34 am Report abuse
Thanks for a direct answer. I don't know if that would satisfy everyone. Remember too, that what you call “vulture Funds” are in majority held by Italian pensioners and other small bond holders.
16 Joe Bloggs (#) Nov 24th, 2012 - 01:35 am Report abuse

Sounds like a great idea.
17 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 01:37 am Report abuse
The vulture funds bought these bonds from those small bondholders because they were “distressed” sellers.

If someone can prove to me that the bonds currently controlled by Singer are really owned by retail investors, I may rethink my position.

I still don't think they should get 100%, it was a default afterall.
18 Ayayay (#) Nov 24th, 2012 - 01:54 am Report abuse
Singer seemed willing to compromise (he offered various compromises on the boat) -until- he had to go to court.
He's American, right? Fair negotiation is the norm, bet he'd lower it to 60-75 and still make a good avg profit
19 Pirate Love (#) Nov 24th, 2012 - 02:04 am Report abuse
@17 If like you say “isolation” is key, surely that would mean foreign businesses along with their employment,investment, technology and world aid leaving argentina also,
may i just ask what backward pre-industrial century would you like argentina to be returned to? it suits me, argentina is already halfway there anyway!
20 Troy Tempest (#) Nov 24th, 2012 - 02:08 am Report abuse
@19 PL

Perhaps North Korea could exchange consultations for soy?
21 Nostrolldamus The 2nd (#) Nov 24th, 2012 - 02:14 am Report abuse

Your attitude is exhibit A of my isolationist stance. We don't need or care for unwarranted arrogance. We can survive in isolation much better than your country I bet.

We have the food, you don't. All your other investment and tech will go ferk all when your stomachs are growling, because Britain due to size and climate doesn't have a chance in he!! to make enough food for even 1/7 of the country.
22 redpoll (#) Nov 24th, 2012 - 02:42 am Report abuse
Nostril Have a sneeze. I t might clear your blocked sinuses. Then if it doesnt work off to Pyongyang for treatment
23 Pirate Love (#) Nov 24th, 2012 - 03:20 am Report abuse
how much is the daily basic food basket in argentina these days? 8 pesos per person per day? lets just hope they havent got families to feed :)

i ate out for a dinner again, a huge Farm roast with 4 cooked meats,
3 people for under £10(6,000,000 pesos i think), you cant beat that.
and all local british produce too, who would have thought....

why would the UK want isolation to join the ranks of retarded countries?
The UK is part of a much global community and enjoys the benefits of trade,
to the point where The UK does not see growing food for ourselves as vital, when we have trade agreements that brings food in, that would mean we have a surplus if we did both,not very good management i think you would agree, which we would end up giving to aid anyway.
why grow your own when we Do Not NEED To!

I agree with you argentina should keep its food, and starve the rest of the world out of existence to every man woman and child because the rest of the world is powerless to grow their own, only argentina has food and the intelligence and the means to grow food, yet argentina still has high poverty and hunger i just dont get it , do you?? that is i dont get hungry, do you mick??
The point is isolation would be a mistake, Trade is the answer.
Bon apetite! poppet!
24 KFC de Pollo (#) Nov 24th, 2012 - 05:51 am Report abuse
With this in mind the administration of President Mujica reached an agreement with the main supermarkets that dominate 70% of the retail market to offer a basic basket of 200 products at August prices frozen until next January.

why the f*ck are supermarkets in Uruguay not competing with one another on prices offering the customer the best deal...
25 Gordo1 (#) Nov 24th, 2012 - 07:00 am Report abuse
Economics in Argentina surely are based on the premise that the best bargain available is to buy an Argentine for what he truly is worth and then sell him for what he says he is worth!
26 stick up your junta (#) Nov 24th, 2012 - 08:31 am Report abuse
We have the food, you don't. All your other investment and tech will go ferk all when your stomachs are growling, because Britain due to size and climate doesn't have a chance in he!! to make enough food for even 1/7 of the country.

I love that old Argie chestnut
Dying from hunger in food-exporting Argentina
27 Troy Tempest (#) Nov 24th, 2012 - 09:05 am Report abuse
@21 and yet, your children starve.

Oh, they are Wichi Indians from Salta, like PH ??

I bet ALEX has something to say about this crime!
28 British_Kirchnerist (#) Nov 24th, 2012 - 09:58 am Report abuse
#24 And you say you're a socialist party member?!
29 ChrisR (#) Nov 24th, 2012 - 01:54 pm Report abuse
Mujica has no worldly sense or even experience of other countries except the local nut jobs, particularly The Dark Country. I only wish he had, my wife and I cannot put up our income, never mind three times a year like UTE has raised its prices in the last 12 months without even a blink from the government.

This leads him into making foolish decisions because he can’t think more than one step ahead.

The small businesses are correct in saying the supermarkets will just pass the problem down to them, they will pay for it or lose all the business.

You do not have to look farther than Tesco, et al, to see how they work. Progressively load the suppliers until they are reliant on keeping the business to make a meagre profit: then announce to the public that Tesco are reducing prices for their benefit. Tesco then tell the suppliers how much discount they must now give them in order for the ‘price reductions’ to work. What do the suppliers do? They have to bend over and take it without complaint. Tesco of course (until this year) goes on from strength to strength.

The alternative, which is starting to happen at least with Devoto, is they stop supplying things when the prices go up. Devoto are masters at this and putting prices up for the summer season visitors: the problem is of course they never come back down when the season ends.

The government also run a super-tanker of a clerical service when, for only 3 million of us we just need a rowing boat. But of course it keeps the unemployment low even if it causes inflation.

The fiscal drag in Uruguay is completely unsustainable, doing something about it will be difficult given the power of the unions and the employment legislation but without tackling the core problems inflation will never go away. “For the last two months Mujica and members of his economic team have said that “inflation has become the priority” of the government is just laughable and underlines the veracity of what I have said.
30 Anbar (#) Nov 24th, 2012 - 02:16 pm Report abuse
“”“”i ate out for a dinner again, a huge Farm roast with 4 cooked meats,
3 people for under £10(6,000,000 pesos i think), you cant beat that.
and all local british produce too, who would have thought....“”“””

if you think comparing a meal-out to the nation's ability to feed itself is, in any way, shape or form, rational or useful, then you are totally deluded.

Britian hasnt been able to feed itself for over a century and Argentina has the capability for feeding the world... it can, and eventually will, become a food-superpower...and Tobias' point is rock bloody solid.

He's also right that your sort of arrogant disdain for even sensible suggestions is a ruddy good example of why isolationist countries do crop-up..and some even succeed.

Not everything has to be wrong with a person or country to argue against them fcol...

(Argentina wont, of course, until it sorts out its suicidal-politics, but that's beside the point)
31 HoldthePhone (#) Nov 24th, 2012 - 03:16 pm Report abuse
“because Britain due to size and climate doesn't have a chance in he!! to make enough food for even 1/7 of the country.”

Erm I think as it stands currently, in terms of home production, the UK is around 60% self-sufficient in food overall, and around 74% self-sufficient in the types of food that can be grown here.

Of the food that is imported, 68% of it comes from other EU states.

Also it is generally agreed that the impacts of climate change will be quite favourable for the UK and much of Northern Europe with possible yield increases of around 50%.

Jaggard, K.W., Qi, A & Ober, E.., 2010, Possible changes to arable crop yields by 2050, Philosophical Transactions of the Royal Society, Vol 365, pg. 2835-2851
32 Pirate Love (#) Nov 24th, 2012 - 03:34 pm Report abuse
@30 did i say i was comparing? no! thats your assumption i was merely pointing out that isolation is not the answer and The UK isnt starving, not now not ever as nostril suggests, regardless if argentina decides to isolate itself food will always be put on the UK table wether its brought in or home grown, the same cannot be said about argentina, had nice weather lately? , even if they believe they can blackmail the rest of the world over food dream on there is plenty of fish in the sea, get it? Argentina can not even maintain its navy or drag its people out of poverty or sell its lemons nevermind monopolize the world food market, maybe if they got their act together with a radical government change then maybe,but not in isolation as that would mean no import or export, stuck in time while the rest of the world moves on, a great outlook!
33 Brit Bob (#) Nov 24th, 2012 - 03:43 pm Report abuse
Quote from the President of Uruguay: 'To all sorts of fiddling as is happening in Argentina.'

Nicely put.
34 Britworker (#) Nov 24th, 2012 - 05:06 pm Report abuse
It makes me laugh the way these South American leaders are so nice to each other face to face and the slag each other off when they are back home. Maybe he knows she is on her way out and not worth defending anymore?
35 briton (#) Nov 24th, 2012 - 08:10 pm Report abuse
Tired of everyone criticizing Argentina
Sadly it CFK that does the criticising is it not,

The British government says we are all friends,
May we suggest you take your blindfold off..

36 ElaineB (#) Nov 24th, 2012 - 08:46 pm Report abuse
@2 They have never been friends. Where do you get your information?

Mujica once said something fairly innocuous about CFKC always being late and cancelling at the last moment - completely true, she is renowned for it - and referred to her being a typical woman. CFKC threw an almighty hissy fit and refused to take phone calls from him, ignored him, refused to meet with him and generally behaved like a spoilt brat for quite some time. There is no love lost between the two leaders.
37 redpoll (#) Nov 24th, 2012 - 10:48 pm Report abuse
@36 Thanks Elaine for your comment , especially as it comes from a lady. We all know that but if I had said it our resident trolls would have immediately labeled me a macho sexist yoruga pig
38 ynsere (#) Nov 24th, 2012 - 11:09 pm Report abuse
Chris R @ 29
It seems your honeymoon with Uruguay is drawing to an end. Not to worry, it happens to everyone who moves abroad by choice. The books say you will now go through a negative phase and eventually reach equilibrium.
39 Nostrolldamus The 2nd (#) Nov 25th, 2012 - 04:31 am Report abuse

Ok good for you brits.

If proper policies that are farmer friendly and that encourage planting and competition are fully implemented, according to a joint U.N-COPAL study, Argentina can feed 10% of the planet yearly, or about 650 million inhabitants.

If experimental low latitude techniques are implemented, and the mostly unusued far northern Gran Chaco can be turned to agriculture and large-scale cattling (western Chaco and Formosa, Northern Santiago del Estero, eastern Salta... which currently are very low yield grazing country), add 150 million to that.

800 million people, that is 20 times our population.

That is by far the most productive country on the planet when the necessary reforms are commited.
40 ChrisR (#) Nov 25th, 2012 - 09:52 am Report abuse
38 ynsere

Thank you for your concern.

No, I am an engineer; you are mistaking fact for disappointment. If you believe I am in any way unhappy here you need to remember one thing: only idiots and argie trolls go round all day with a stupid grin on their face.

The rest of us have to deal with reality, not fantasy. I do get frustrated for the ordinary people who have to pick the bill up for what is best described as incompetence. Pepe and his people are supposed to be running a country, a great country, it is not easy and requires vision and strong leadership especially at times like these with The Dark Country doing its best to screw us.

I mean, look at the fiasco with Pluna! Not only had no-one done any due diligence, Pepe thought he had pulled a masterstroke by selling the planes without the routes ‘because they will have to pay for those extra’ AND they wanted more than the new price for second-hand planes! What planet are these people living on; it isn’t the same as the one I am living on.

Uruguay is a great country with great, open minded people; I just wish the government were up to providing them the government that is required to take the country forward.
41 Joe Bloggs (#) Nov 25th, 2012 - 11:22 am Report abuse

A South American version of the iron curtain huh? Good luck. I wish you all the best with that endeavour. Good luck turning all of your land into food producing acres. How much is that going to cost or is your government just going to order everyone to do it for free? Or perhaps the people all think like you and will simply WANT to do it for free. Will your NBC defence systems be placed around this same food producing land?

If nothing else, whatever you're calling yourself at this moment, you are an ideas man.
42 Nostrolldamus The 2nd (#) Nov 25th, 2012 - 05:23 pm Report abuse
Who's talking about an iron courtain? those are strange anglo-saxon nomenclatures.

I'm talking about an SOPM, Synthetic Osmotic Permeable Membrane. Constant equilibrium balancing what comes in with what comes out. And keeping anything undesirable (like alliances and friendship with foreigners), completely out.

It sure beats the alternative “be friends and trust all foreigners naively”, just like we did in the 1990s.
43 briton (#) Nov 25th, 2012 - 07:55 pm Report abuse
what makes you think we are anglo saxon.
44 Troy Tempest (#) Nov 25th, 2012 - 10:53 pm Report abuse
@42 Nozzy

“It sure beats the alternative “be friends and trust all foreigners naively”, just like we did in the 1990s.”

We were perhaps the naive ones in the 90's.

I am sure you were never “friends” with anyone.
45 Nostrolldamus The 2nd (#) Nov 26th, 2012 - 01:12 am Report abuse

If you say so, I didn't say it.

Your countries are despotic, arrogant, and racialist when it comes to Argentina. No respect is deserved when holding such laughable attitudes.
46 Yanqui-Ingles-Killer (#) Nov 26th, 2012 - 01:46 am Report abuse
Mujica deserves to die. HE is an idiot. Uruguay is filth compared to Argentina. What has he been drinking?
47 Troy Tempest asshole (#) Nov 26th, 2012 - 04:50 pm Report abuse
sorry about my comments

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