Welcome to the knowledge economy labyrinth
Argentina's politicians, ministers and officials have created an environment where tech entrepreneurs better know about bureaucratic procedures than software or AI
But that is the extreme case probably, other interventions on prices, even in predominantly market economies, create a mismatch between consumer’s preferences and entrepreneur’s decisions.
In the last couple of decades, Argentina and other countries in the region have shown an entrepreneurial boom in the field, precisely, of the knowledge economy, that is software, robotics, nanotechnologies, satellites and others. These are basically export industries.
The irony is that even though they are a “knowledge” economy, increasingly the kind of knowledge they need is not one related to science and engineering but to bureaucratic rules, controls and taxation.
A recent decision by Argentina’s Central Bank has created what now the media calls the “dollar tech”, that is, one more exchange rate besides the many others already in place. Now the dollar tech is not just a simple exchange rate that differs from the “official” controlled one; it may be the outcome of a mess of regulations that require as much knowledge in the rules themselves as in the technology behind it.
For example, the Central Bank has created a “promotion system for the knowledge economy”, according to which companies may freely dispose of their dollars for up to 20% of a direct foreign investment. That is, 80% must go through the official dollar which gives them half the price of the market one. Not only that, companies must have a specific bank account for these dollars.
Then, there is the dollar tech for exports, which means that exporters will be able to have free disposal of their dollars coming from exports, only for 30% of those coming from an increase in exports from last year; and they must use they funds to pay employees.
Finally, with regard to taxes on companies related to salaries, what is called employer’s contributions, they can access to a bond with a fiscal credit of 70% of those contributions. The ministry will later say how can they spend this bond, and companies that export at least 70% of their annual sales, they will be able to transfer the bond.
Anyway, the thing is that politicians, ministers and Central Bank officials cannot avoid their desire of achieving a certain outcome as designed by their bureaucratic creative minds. They end up in a labyrinth, where many brilliant tech entrepreneurs will get lost or will become, step by step, bureaucratic experts.
Instead of having consumers or companies in their minds they will have government officials and bureaucratic procedures. And the alternative is so simple; it is the one available in most other countries: just one price for the dollar and forget the percentages for this or that. But then, the outcome may be different from what bureaucrats desire, and it certainly will be much better.