Kirchner defends failed tax plan

Argentina's president has "no regrets" over grain tax rejected by the senate.

    Kirchner's proposal of a hike in taxes led to farm strikes and food shortages [EPA]

    The tax proposal sparked protests, road blockades and sporadic food shortages across Argentina as farmers raised their objections.

    Kirchner withdrew the hike after the senate, which is dominated by Kirchner supporters, voted down the measure on July 17, with Fernandez's own vice president casting the decisive vote.

    As the world's third-biggest exporter of soy beans and corn, and the biggest exporter of soy oils and soy meal, which is used for animal feed, Kirchner said high agricultural profits in the face of soaring world food prices still "should be taken up as an instrument of economic policy".

    Cabinet changes

    She also ruled out any further changes to her cabinet following the failure to push the legislation through the senate, and said she would continue to fight for fairer wealth distribution.

    The opposition has called for wider changes to the cabinet.

    Analysts said that Kirchner's decision to speak to the media was a sign that she was trying to rehabilitate her image after losing the battle with agricultural producers.

    Kirchner emphasised the importance of foreign investment in Argentina and denied that Nestor Kirchner, the former president, runs her presidency. However, she do not make any major policy announcements.

    She also expressed disappointment with the latest Doha round of World Trade Organisation talks which collapsed on July 29.

    "When one enters into a discussion of mutual interests one has to be sufficiently pragmatic to delete dogma and ideology. The topic was and continues to be, how much do developing countries put towards this negotiation?" Kirchner asked.

    "In terms of real growth, it doesn't sound like a good business deal because that is what it means for the emerging countries."

    SOURCE: Agencies


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