Daniel Funes de Rioja, B20 Chair : Interview

Interview : Daniel Funes de Rioja

How might the G20 and B20 presidency help build trust in Argentina’s long-term growth stability?

DANIEL FUNES DE RIOJA: The G20 and the B20 are going to be extremely important in both the domestic and international communities. In the end, Argentina will be reliable when stable long-term policies are in place and our society perceives globalisation and being an important part of the world as necessary. Due to our history, with highly variable movements on economic, political and social fronts, the G20 process could be a great catalyst for a new spirit, philosophy and commitment to be instilled from Argentina towards the world, and vice versa.

We are convinced that there is a serious and responsible government in place, with space for debate and dialogue with all political actors. This is the only way to generate a necessary strategic plan for Argentina’s reinsertion into the world, similar to what Chile, Peru and Colombia have done in the past. Our society is ripe for this, and it is our responsibility as organisers to ensure that the both the G20 and the B20 have a direct, real and positive impact on our society and business community, especially small and medium-sized enterprises, as we need them to be an active part of this undertaking.

In what ways is Argentina developing its human capital according to future labour needs?

FUNES DE RIOJA: Education, business and employment must be inextricably linked. There is a significant challenge, not only in research and development, but also in terms of technical training. These areas must be updated, because we will need to focus on filling the gap to meet the demands of both the modern and the future world. We want and need a level of commitment that encompasses entrepreneurship and workers alike. We are starting to see more technological production models in the automotive industry, for example, with more sophisticated automated processes. The same situation applies to the food processing industry.

Industry 4.0 has already begun, and it will keep expanding as foreign direct investment levels continue to increase. We have to prepare for a future in which there might be less need for workers in production processes. The government, companies, unions and academia should design a strategic technical training plan for the future of the country.

What are the priorities to lower labour costs, and how might Brazil’s reforms affect this?

FUNES DE RIOJA: Argentina has a formal labour market of around 11m workers. About 65% of this is private, 32% public – which is double the rate of any other country – and the rest goes to miscellaneous categories, mainly self-employment. This means that there is an alarming 35% of the labour market taking part in informal activities. Therefore, from a general point of view, reforms will not bring greater instability to the market because it is already unstable. Our labour regulations are old, obsolete and Fordist, in that they are highly regulated in the individual aspect and strongly concentrated on the collective.

We have challenges to address in productivity, absenteeism, high rates of litigation and elevated labour taxes. These are particularly pronounced in the labour-intensive industries that are concentrated in the northern and eastern regions. The Brazilian reform generates a productivity challenge in integrated spaces such as Mercosur. Then we have to actively respond to domestic challenges with a long-term policy that integrates all members of society.

We need more flexible labour regulations with an agile recruitment and dismissal regime, and adequate funding systems. In essence, we must adapt to a new reality in the 21st century. Unions will more than likely play an important role in this transition, but we need to find common ground to move forward.