That's bullcrap. It's not believable. People are not innately stupid, and they do not keep, time and again, voting against their interests,
not after going through one of the deepest national economic crisis in the world. All those unemployed people with no money, no income, and nothing left to sell - no way to sustain themselves - back in 2001 who came out to the streets and toppled a government were just "hired thugs"? Way to dismiss the people when it comes out to actually do something!
The
fact is that the Kirchners kept being reelected. The
fact is that Argentina has, according to all economic data, improved its economy remarkably fast after it broke with its dollar peg, started re-regulating international trade, and ended internal "austerity" for the sake of paying back lenders. And the data to prove it is available:election records and economic data accepted by international institutions. You can say that the present Argentinian politicians are also corrupt, and I can believe that. But the recent governments have been far, far better than the ones of the 80s and 90s. Argentina's economy
sunk into a total economic collapse under those; it has
improved greatly over that legacy during the past decade.
You, Luiz and Takhisis, keep trying to paint a picture of mismanagement and corruption by the present government:
prove it with hard facts, instead of linking to the usual political theatrics in newspapers. I'll start with some numbers, from the World Bank's databases (freely available
online, feel free to data-mine them). I'll compare the situation in 2002, when the government changed, to that of 2010, latest full set of data for all variables and already likely to have been reviewed as necessary.
1)
On the economy at large. Argentina's GDP has risen from $102 billion to $369 billion (all values in current US dollars). Do you accept that, a
uniquely good performance even compared to oil-exporting countries that had a windfall Argentina didn't? Or do you claim that it is a lie, and in that case what are the numbers you will put forth and are able to back?
2)
On the economy, corrected for PPP. GDP per capita,
corrected for purchasing power parity, has risen from $7912 to $16012. Again, do you accept this, of will you put forth different numbers?
3)
On interest rates. Lending interest rates were, after a spike in 2002-3, relatively stable at 7%-100% (high of 19% and 16% in 2008 and 2009, back to 11% in 2010); deposit rates rose from an average 3% in 2004 to 9% in 2010, also with some spikes (11-12%) in 2008-9. No rampart inflation at all, no unusual devaluation of savings compared to interest rates (which are a better benchmark that official numbers of inflation).
Do you accept this, or will you put forth different numbers to argue your past claims of high inflation and devaluation of savings?
4)
On labour. The labour force rose from ~16 million in 2002 to ~18 million in 2010. Labour participation rate rose from 58% to 61%. Employment to population ration rose from 48% to 56%. Employment for the ages 15-24 rose from 27% to 34%. Unemployment rate fell from 18% to 9%. Youth unemployment fell from 35% (2002, no data for 2002) to 21%. These are all, I cannot stress enough, absolutely enviable results, compared to what we're seeing in the US and Western Europe. Europe in particular keeps going in the opposite direction, with several countries very much imitating Argentina in the late 1990s. Comments?
5)
On poverty. The GINI index (a measure of inequality of income) has fallen from 54 to 44, that improvement becoming faster in recent years. The income share of the lowest 20% of the population rode modestly, from 3% to 4%. The share of the highest 20% fell from 58% to 49%. The share of the highest 10% fell from 40% to 32%. Looks like the middle income majority of the population should have reasons to be pleased. Urban poverty (according to national criteria) fell from 54% during the crisis to 10%.
6)
On trade and balance of payments. Profit remittances on FDI (flow out of the country) has risen from a residual value in 2002 (capital controls) to $1 billion in 2003, $5 billions in 2005 and $8 billions in 2010. A large portion of this was YPF's yearly profits, the vast majority of which was extracted out of the country rather than reinvested (by the ay, oil and gas production declined as a consequence of that).
Net trade on goods and services has been relatively stable, declined from $15 billion in 2002 to $13 billion in 2010. The current account balance, taking into account interests on remaining debt and capital movements (chiefly among those the outflow of profits) has been also positive since 2002 (before it was deeply negative, in the tens of billions) but becoming increasingly bleak, falling from 9% of GDP (following the moratorium on debt in 2002) to 1% of GDP in 2010.
Also, no one in the world had put forth any evidence of large scale electoral fraud in Argentina. You claimed it, prove it providing credible sources.
As as a further addendum, because this is about YPF, check the numbers for foreign investment on the energy sector, and compare them to the yearly posted profits of YPF. Virtually all its profit was being extracted by the vulture capitalists who bought it, in what was clearly a strategy of making off with as much as possible as fast as possible. Whether it was because the fraudulent nature of the privatizations and the likelihood of its reversion hung over the new owners, or because Repsol had gone into debt financing its expansion and needed to squeeze some cow for cash quick, I don't know. Probably both. What becomes evident is that the new private owners reinvested even less of theprofits in developing the business that the corrupt state of the 1970s! And every production fell, turning Argentina from an exporter to an importer,. Now I understand more of the reasons for the government to retake control of the company. I've given you the numbers and the links to check them (investment is in the world bank's database, for example, and YPF's accounts are public). But for any fan of quick of newspaper pieces,
here's one:
There are sound reasons for this move, and the government will most likely be proved right once again. Repsol, the Spanish oil company that currently owns 57% of Argentina's YPF, hasn't produced enough to keep up with Argentina's rapidly growing economy. From 2004 to 2011, Argentina's oil production has actually declined by almost 20% and gas by 13%, with YPF accounting for much of this. And the company's proven reserves of oil and gas have also fallen substantially over the past few years.
The lagging production is not only a problem for meeting the needs of consumers and businesses, it is also a serious macroeconomic problem. The shortfall in oil and gas production has led to a rapid rise in imports. In 2011 these doubled from the previous year to $9.4bn, thus cancelling out a large part of Argentina's trade surplus. A favourable balance of trade has been very important to Argentina since its default in 2001. Because the government is mostly shut out of borrowing from international financial markets, it needs to be careful about having enough foreign exchange to avoid a balance of payments crisis. This is another reason that it can no longer afford to leave energy production and management to the private sector.
So why the outrage against Argentina's decision to take – through a forced purchase – a controlling interest in what for most of the enterprise's history was the national oil company? Mexico nationalised its oil in 1938, and, like a number of Opec countries, doesn't even allow foreign investment in oil. Most of the world's oil and gas producers, from Saudi Arabia to Norway, have state-owned companies. The privatisations of oil and gas in the 1990s were an aberration; neoliberalism gone wild. Even when Brazil privatised $100bn of state enterprises in the 1990s, the government kept majority control over energy corporation Petrobras.
As Latin America has achieved its "second independence" over the past decade-and-a-half, sovereign control over energy resources has been an important part of the region's economic comeback. Bolivia renationalised its hydrocarbons industry in 2006, and increased hydrocarbon revenue from less than 10% to more than 20% of GDP (the difference would be about two-thirds of current government revenue in the US). Ecuador under Rafael Correa greatly increased its control over oil and its share of private companies' production.
