Pandemic: the province that benefited the most from the closure of borders experienced a boom at the end of the year


With the borders closed with Paraguay and Brazil, Christmas sales grew 50% in Misiones when the average for the entire country was a decrease of 10%, according to CAME Credit: Gentileza CCIP

POSADAS.- Missions closed 2020 as the province where it occurred the greatest economic reactivation of the country, from the closure of borders by the coronavirus, with a month of December where businesses exploded in customers and sales for Christmas and New Years.





Therefore, the governor Oscar Herrera and Ahuad returned to the charge to ask the president Alberto Fernandez that the project that declares a Missions as a special customs territory, with a different tax treatment that allows you to lower taxes such as VAT or Profits, equating the tax burden with Paraguay and Brazil.



The governor forged an agreement with the main chambers and business sectors so that, in exchange for national tax benefits, goals of increased investment and job creation are established. He also launched a plan to locate technology investments with an ambitious name: Silicon Missions.


It must be taken into account that the economic “miracle” of Misiones is explained by the unprecedented situation of having the borders closed with these two border giants since March, which prevented money from leaking to cities like Encarnación, Ciudad del Este and a dozen towns on the other side of the Paraná River, where prices are often cheaper -even with a depreciated peso-, for the lower tax pressure and labor charges in that country.


Oscar Herrera Ahuad and Alberto Fernández
Oscar Herrera Ahuad and Alberto Fernández


The flight of foreign currency also occurs with the purchases that Argentines make in Brazil, which has a regime of duty-free shops and other incentives to compete with Paraguay.

Record Christmas sales

“Christmas sales grew by 50 in turnover in 2020 compared to last year, when at the country level they had a 10% drop in turnover”, commented the Minister of Finance of Misiones, Adolfo Safran.

In effect, according to CAME, Christmas retail sales nationwide registered an average fall in turnover of 10.1%. In Misiones, on the other hand, all indicators of economic activity are positive, above inflation and above the activity registered before the pandemic.


Since July, the provincial collection has doubled versus 2019 in Misiones;  more than double that of Córdoba, the province that follows.  Politikón Consultant Report
Since July, the provincial collection has doubled versus 2019 in Misiones; more than double that of Córdoba, the province that follows. Politikón Consultant Report Credit: Consultant Politikón

The Economic Confederation of Missions (CEM), released a survey that it carried out among 500 businesses throughout the province that showed for December a 28% growth in sales, measured in quantities; and 56% in turnover, compared to the last month of 2019.

“Misiones suffers from a unique phenomenon at the national level: it has 90% of its borders with Brazil and Paraguay and only 10% with Corrientes. If it is equipped with the necessary tools, it can generate more revenue at the three levels, increase registered employment and generate much-needed foreign currency for the country, “he told THE NATION, Alejandro Haene, holder of the CEM and expert in tax matters.


While local sales grow, the tourism sector in Iguazú went through one of its worst years due to the closure of borders and limits on circulation
While local sales grow, the tourism sector in Iguazú went through one of its worst years due to the closure of borders and limits on circulation

Another eloquent fact of the economic boom that Misiones is experiencing is the collection of the General Revenue Directorate. Two weeks ago the data of tax collection, which grew 100% or more each month since last July, inclusive. In November the province raised $ 3.669 million; this is, more than Corrientes, Chaco and Formosa together. Between January and November, Misiones increased its collection by 77% compared to 2019, when the second best province is Córdoba, with 31.9%, according to an analysis carried out by the consulting firm Politikón Chaco.

The presidential veto and the local bet

20 days ago, the president Alberto Fernández vetoed Article 123 of the National Budget that provided for the creation of special customs zones in border regions. This article had been carefully negotiated between Misiones and the Nation, but at the last moment the President eliminated it with a stroke of the pen, giving priority to fiscal urgencies.

Despite the great disappointment that was generated by that veto in Misiones, the governor avoided entering into conflict with the national government: in the last week of December, the missionary deputies gave the Casa Rosada four decisive votes to sanction the questioned reform in the formula for updating pensions.

In Misiones they want to show this unusual economic growth for a year of crisis and, above all, show in the offices of Buenos Aires that lowering taxes can raise more and generate more economic activity and employment.

It is an old chimera of productive development, which is never carried out due to the continuous fiscal urgencies of Argentina, which since 1961 had a fiscal deficit in every year except for the period 2003-2008, according to a study by IDESA.

In March 1990, the Roque González de Santa Cruz bridge was inaugurated, which connects Posadas with Encarnación, and is the second or third border crossing in the country behind the Ezeiza airport and the Tancredo Neves bridge, which connects Iguazú with Foz.


In Misiones there is a logging boom, linked to construction
In Misiones there is a logging boom, linked to construction

In the province they do accounts and point out that that year there was no check tax, workers did not pay Profits, VAT was 13% and there were less than a third of the number of current retirees, which allowed the system to finance itself largely due to contributions from employees and employers and not with more taxes to fund the Anses.

That is why Misiones wants to show the numbers of its remarkable resurgence and offer itself as a laboratory for a different politics. “With the closed border, the economy was greatly enhanced, if they give us the necessary tools we will be a model province, a little watch in terms of economic activity and the dynamism that we are going to have. We have a great economic diversification, with forestry industry, yerbatera industry, tealera, fish farming, agribusiness, small agricultural enterprises, tourism, “he explained to THE NATION Sergio Bresiski, holder of the Chamber of Commerce and Industry of Posadas and businessman of construction materials.

Bresiski is one of the businessmen who is meeting regularly with colleagues from all sectors to generate a debate about what the province could become if it is given tax benefits to compete with neighboring countries.

“We have to generate a cluster business and have decided which province we want by 2030, in what we are going to invest, what new sectors we are going to create and what tools of the State we are going to need, beyond the tax. We don’t want a little summer, something specific, we want to change history and generate something different, “explained Bresiski.

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