The budgetary debate can reorient the resources.

Publicado en Ene 4, 2013 - 5:34pm [1.787 lecturas] .

Felipe Valenzuela S., Sociologist Labor Area ICAL

January, 4, 2013

When we speak of budget, we are referring to what the State assigns for expenditure on a fixed period, that is to say to what is known as fiscal expenditure. This expenditure is part of fiscal policy and jointly with monetary policy (which is assigned to generate the monetary offer on behalf of the State), constitute the main tools for the conduction of economy. The expenditure is part of the internal added demand, important factor of the gross internal product.

For several decades our country has kept a moderate fiscal expenditure and managed it with an approach based on the non-existence of deficit and even generating – since the government of Ricardo Lagos – a surplus year after year with characteristics of a ‘‘ structural surplus “. This situation responds to the application of formulae corresponding to the neo-classical school of economy, that contrarily to its classic predecessor that was devoted to the study of the formation of the capital, outlines the existence of flexibility of prices, that contemplates the prices of the goods, services and work force, and will cause as consequence a balance that will produce full employment of productive resources. It supposes that the total value of what is produced in society is equivalent to the joint revenues of the group of economic agents (individuals and companies) and therefore it is not possible that this added demand is deteriorated and/or diminished. This perfection implies that the participation of the State in the economy is not necessary  and if it  should exist it should be of marginal character, which means – amongst other things – that the fiscal policy  should consider  maintaining a low intensity expenditure, and that the assignment of  resources is passed over to the private sector.

In the last three decades Chile has followed these rules almost religiously, in correspondence with a stage of capitalism in which these norms have been fixed by ruling organisms of the international economy:  International Monetary Fund (FMI), the World Bank (BM) and the World Organization of Trade (OMC).  Organisms that are not only of normative character, but rather  intervene directly in the internal economy of the countries by means of pressures expressed  through the conditions of financing of the States and in the important task of surveillance so that their economies follow the policies lain down in what has been called “The Washington Consensus”, that in 1989 pointed out amongst  other measures: the end of the deficit in the fiscal budgets; a classification of these; privatizations of state-owned companies; liberalization of the  financial interest rates (which Chile had already started in the 70 ’s decade); tributary reforms;  but especially the liberalization of the external trade that would facilitate  the installation of a new international division of  labor.

This new division of Labor on a planetary scale localizes Chile in the role of supplier of raw materials or commodities.  This begins a new phase called neo- extractivist.  This represents a return to a similar situation which our country maintained from its foundation until entered into the twentieth century. The difference rests on that it produces a sensation of economic boost, originated by a change in the terms of exchange due to a displacement of the chains of valuation to Asia. This has kept prices interesting, mainly of copper, that have implied  the maintenance of a flow of foreign currencies, that added to an approach of surveillance of  macroeconomic balances,  allowed  for maintaining a reduced fiscal budget for many years.

Es bueno discutir estos temas en el conjunto de la sociedad en forma simultánea a los debates que se dan en el parlamento en torno a la ley de presupuesto enviada cada año por el ejecutivo, porque se puede procurar la reorientación de recursos que la población efectivamente necesita, y además para ganar acuerdos sobre asuntos estructurales que no se contemplan en los proyectos de las cuentas públicas de cada año.

The above-mentioned means that Chile maintains very low expenditure levels regarding the Gross Domestic Product (GDP). In fact, in 2011 it represented 21.1%, which only localizes it above countries such as Bangladesh, Cambodia, Central African Republic and in América, to the Dominican Republic and Guatemala that only destined 13.7% last year, or Peru that spent 17.3% of the GDP. Of course the contrast to this is represented by countries like Sweden which contributes  with 52.5%; Austria with 49%; and United States with a 38.9% and close by  Brazil that  spent in the same year 41% of its  Product[1].

When examining these figures it seems that the orthodoxy of that already distant consensus drawn up  in the capital of the United States is  being left behind and this same country activates its economy through  the road of expenditure, feeding it amongst other things with the savings that our country places in that market. Savings regarding which the ministers of  Treasury do not bother to hide their satisfaction every time that it corresponds to  send  the Bill of Budget as a sign of “responsibility and seriousness “ in the fiscal management.

It is good to discuss these topics with society as a whole simultaneously to the debates that are given in  parliament regarding the Bill of Treasury that is sent every year by  the executive, because you can offer the reorientation of resources that the population indeed needs, and also to win concordances with more than enough structural matters that are not contemplated in the projects of the public bills of every year.

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