¡Exprópiese! Let's follow the kleptocracy's takeover of YPF

[innonimatu]

That's very true, but if we compare the development of Vale and Petrobras, we see that Vale clearly outperformed their state-owned counterpart. The same is also true for CSN, Usiminas and other privatized companies.

State-owned companies here are really poorly run. In Petrobras virtually all their directors (maybe literally all) are politicians with zero experience in the oil business. Many mid-level managers are politicians as well. Hell, the former president was a Workers' Party politician from Bahia who had never seen a barrel of oil in his life. Of course results won't be great, or even good.

That's probably not a fair comparison at this point: Vale's main product was booming right after it got privatized, whereas oil only seriously rose in price more recently. Did not stock markets recently after the partial privatization started "valuing" Petrobras very high, higher than Vale (?). just because it announced big oil finds?

As for politics and management in such a critical business as oil: states will always interfere, or oil companies will interfere with state policies, pick your poison. Same for any other very important resource in the context of each country. But in theory there's no need for states to interfere in state-owned companies beyond setting high-level policy goals (desired returns, sectors to invest on or to leave alone, the kind of thing that private owners are supposed to do). Technical issues may and should be left to the company once it is set up and running smoothly.
I see no one complaining about Saudi Aramco, or Statoil, to pick two examples from very different countries, being poorly run. I'll agree that as a rule is a very bad idea to staff even the top position of these companies (or any company) with people unfamiliar to the business, but that's something you can find also in privately owned oil companies: look at BP, for example. So, rather than privatizing, shouldn't you be calling for the brazilian state to get its act together in managing its assets? Because if it doesn't then privatizing those won't fix anything, the interference and bad policies will remain (both ways).
Personally, I haven't noticed any newsworthy trouble with Brazil's management of its state oil company anyway. But I'm not trying to pick up news about that.

We tried that route and the results were less than formidable...

Well, you do have local industry that came out of those policies. Namely... Vale and Petrobras! Could brazilian private parties in the less developed Brazil of the 1940s/50s have set up Petrobras, for example? Or would it have been replaced with foreign investment from Mobil, Chevron, Shell, or some other company? And where might the later have led Brazil? One or the rare nations that kept relying exclusively on foreign oil companies was Nigeria, and I don't think it is an example to follow. Every other developing country that I can think of either set up its own national company or let in foreign ones (inherited infrastructure from colonial times) and later at some point nationalized them!

 

[luiz]

That's probably not a fair comparison at this point: Vale's main product was booming right after it got privatized, whereas oil only seriously rose in price more recently. Did not stock markets recently after the partial privatization started "valuing" Petrobras very high, higher than Vale (?). just because it announced big oil finds?

Petrobras is still more valuable than Vale, and has always been except for a brief period. It's a larger company, with more employees, more assets, etc. The fact that Vale managed to surpass it for a while, and the fact it has consistently been more profitable, are the ones I was hinting at.

Petrobras' results are quite poor when compared to its big oil peers. It's a mediocre and poorly run company, with gigantic assets and government-granted privileges.

As for politics and management in such a critical business as oil: states will always interfere, or oil companies will interfere with state policies, pick your poison. Same for any other very important resource in the context of each country. But in theory there's no need for states to interfere in state-owned companies beyond setting high-level policy goals (desired returns, sectors to invest on or to leave alone, the kind of thing that private owners are supposed to do). Technical issues may and should be left to the company once it is set up and running smoothly.
I see no one complaining about Saudi Aramco, or Statoil, to pick two examples from very different countries, being poorly run. I'll agree that as a rule is a very bad idea to staff even the top position of these companies (or any company) with people unfamiliar to the business, but that's something you can find also in privately owned oil companies: look at BP, for example. So, rather than privatizing, shouldn't you be calling for the brazilian state to get its act together in managing its assets? Because if it doesn't then privatizing those won't fix anything, the interference and bad policies will remain (both ways).

It's true that some state-owned companies behave in a professional manner, like Statoil. But Norway is Norway and Brazil is Brazil. Even if we have a good government that allows Petrobras to be managed by technicians, it's just a few years away from a new government that will use it as a job source for political allies and an endless cash cow. Privatization is the only way to remove that temptation. Of course, because of its size and nature the government would necessarily retain much influence, as it does with Vale (they just recently forced their CEO out).

Personally, I haven't noticed any newsworthy trouble with Brazil's management of its state oil company anyway. But I'm not trying to pick up news about that.

It's as I said. From mid-level managers all the way to the President, the company is plagued with politicians who never saw a barrel of oil. The company was shamelessly used in several elections since 2003, financing millionaire campaigns for government officials. Pretty much all ministers in the government receive a paycheck from Petrobras, because they are "members of the board" (Dilma herself received a millionaire compensation from Petrobras for doing nothing during Lula's government, I don't know if she retained it after being elected. The most important minister, Guido Mantega, still receives his Petrobras paycheck).

Well, you do have local industry that came out of those policies. Namely... Vale and Petrobras! Could brazilian private parties in the less developed Brazil of the 1940s/50s have set up Petrobras, for example? Or would it have been replaced with foreign investment from Mobil, Chevron, Shell, or some other company? And where might the later have led Brazil? One or the rare nations that kept relying exclusively on foreign oil companies was Nigeria, and I don't think it is an example to follow. Every other developing country that I can think of either set up its own national company or let in foreign ones (inherited infrastructure from colonial times) and later at some point nationalized them!

I think the US, Canada and Australia are fine examples of countries that explored vast natural resources through mostly private enterprise. I think the way they explored their resources compares very favorably with how we explored ours. Australia in particular is essentially a "Brazil that worked".

 

[Takhisis]

Well, now it's a law and in yet another mockery of Congress, its own members are claiming that it's only because of the Presidentess that this has been done. They're in effect saying that they're not capable of proposing new bills on their own *tears hair off scalp*

I sadly agree; both Brazil and Paraguay would be far better off if Paraguay had simply been absorbed as a province of the Empire. We killed everybody and destroyed everything, so we might as well have taken responsibility for the whole damn thing. I suppose the Emperor was not keen on absorbing such wasteland, but if he knew how much that place would screw his country over in the next century, he would have done it.

Actually, it'd have been beter for both sides to just let Paraguay be, their political non-system would have fallen apart of its own accord.

 

[innonimatu]

I think the US, Canada and Australia are fine examples of countries that explored vast natural resources through mostly private enterprise. I think the way they explored their resources compares very favorably with how we explored ours. Australia in particular is essentially a "Brazil that worked".

Actually, Australia at least is very much suffering from the "dutch disease", it'll just take some more time for it to become obvious. Resource exports money can get a country going for a long time, but they always run out, and the financial problems created by this bounty will kick in.

 

[Takhisis]

Resource exports money can get a country going for a long time, but they always run out, and the financial problems created by this bounty will kick in.

That's as good an explanation as any of what's been happening here: tax the farmers and to hell with everything else. Yesterday's presidentessial speech has informed us that universities shouldn't ask for money even though my very own classroom leaks and drips water everywhere even when there are no clouds in sight, just for one tiny example.

 

[innonimatu]

That's as good an explanation as any of what's been happening here: tax the farmers and to hell with everything else. Yesterday's presidentessial speech has informed us that universities shouldn't ask for money even though my very own classroom leaks and drips water everywhere even when there are no clouds in sight, just for one tiny example.

But you're first complaining of taxes (which were not approved, afaik), then complaining for lack of more money for the universities! You can't have your cake and eat it too.

Getting back a little, about the inflation numbers complaints and because I believe that somewhere in these discussions over Argentina a certain graph from The Economist was shown, I want to link to another person who is of the opinion that the attacks on the current Argentinian government are very suspicious.

I'm currently reading a rather lengthy book back from the 1970s about Allende's government in Chile and I can see some parallels between the war waged on his government by the privately controlled media there, and the wars waged by some media groups against Argentina's and Venezuela's governments. Of course, Kirchner is no Allende, and the parallels are more interesting in Venezuela, anyway. That really deserves an update on another thread, I'll post it when I'm finished with that reading. Suffice to say, I'm taking anything published or said about Argentina with a cartload of salt.

I cannot believe that the majority of Argentinians who experienced first hand the lies of the 90s and the collapse it brought in 2001 are so naive as to have maintained, for over a decade since then, their support for a government that is, should we believe what you say, screwing them. They, that majority who keeps voting for her, must be feeling their lot keeps improving. Moreover, we know that it wasn't an improvement built on cheap credit, because Argentina couldn't pull that dirty trick after the crisis. This alone makes me doubt very much any claims that Argentina is somehow being mismanaged by its government.

 

[Takhisis]

Spoiler @innonimatu :

The support wavers: in the 2003 elections Kirchner had 22% of the vote and got to the ballotage/second round, in 2007 they won with only 45% of the vote, in the 2009 midterm elections they suffered a disastrous defeat with about ⅓ of the vote -Néstor Kirchner himself had run for Deputy- and a year later he died and everyone started bowing to the Dowager Empress. So, where's this maintained support?
Don't try to apply first-world logic to a semi-feudal country, it just doesn't work.

Let's see: crime rates are up, prices are skyrocketing by the minute, imports are barred, you can't buy more of one unit, maybe two, of any article because of supply problems, if you report any of this you are a terrorist.
The Executive disregards Congress via ruling by decree and the judiciary by not carrying out any sentences while holding all the provinces in thrall.
They also bankrolled and coordinated the initiative to get hooligan gangs in 2010 to the football World Cup. Is directly associating with gun runners and drug dealers bad for you? or is the ban on books a good thing? This is only a fraction.

As for the money, it was gotten by taxing the crap out of farmers, riding the tailwind of rising soybean prices, and also by issuing new foreign debt. The main creditor of the new debt system is Mr. Hugo Chávez himself.
And/or letting the provinces issue their own debt.

Now, can we get back on topic?

This is the new CEO for YPF as ordered by the Presidentess, back in '99:

Link to video.
Ring any bells? Oh wait, he's showing support for the takeover. Yaaaayyy!!

 

[innonimatu]

There's not much to say on-topic yet, is there? That has not already been said, at least.

The issue of Argentinas' economy over the past decade, however, can be talked about at length. For example, not only were the tax increases on some agricultural exports where you say the money might have come from rejected, afaik, but the weight of commodity exports in the overall economy has been diminuishing anyway, despite its rise in value - simply because the rest of the economy has grown so much. Which makes the whole story of Argentina supposedly having ridden a commodity boom hard to justify.

 

[Takhisis]

The importance of agribusiness has decreased temporarily because of a long-lasting drought throughout the past few months which in the past couple days has turned into at least 700,000 hectares being under flood. The further, mobile tax increases were rejected. Before the Kirchners came to power were at around 10%, now it's as I said above, 35% + 21% VAT + Net Income + Income Tax.
Also, the burden of proof has officially been inverted as anyone who wants to perform a currency exchange has to prove they haven't acquired it dodgily as well as proving that they're within the arbitrary limits set by them. As a result of this nonsense, the real estate market has taken a turn for the worse.

Anyway, more 'on-topic' stuff (did you read my above a couple weeks ago about the government's maladministration of also taken-over Aerolíneas Argentinas?).
Repsol and the Texas Yale Capital Corporation (another stockholder) are filing suit before a U.S. court (none other than Thomas Griesa's) mainly because of a clause in the original contract stating that if anyone wanted to acquire more than 15% of the shares in the company they had to bid for hte entire amount… and this was a clause established by the state back then. I don't think it'll come to much but, still…

 

[innonimatu]

The importance of agribusiness has decreased temporarily because of a long-lasting drought throughout the past few months which in the past couple days has turned into at least 700,000 hectares being under flood. The further, mobile tax increases were rejected. Before the Kirchners came to power were at around 10%, now it's as I said above, 35% + 21% VAT + Net Income + Income Tax.

So they did squeeze some more taxes from there. I was wondering where the state had gotten funds in the early 2000s, as both industry and services were a total wreck after the years of the peg.
What were the spending priorities in those days, btw?

Also, the burden of proof has officially been inverted as anyone who wants to perform a currency exchange has to prove they haven't acquired it dodgily as well as proving that they're within the arbitrary limits set by them. As a result of this nonsense, the real estate market has taken a turn for the worse.

Seems like an excellent idea all around. Hadn't you complained of widespread corruption? Legally acquired money - the kind that pays taxes - has a paper trail, storing those documents for a number of years is already an obligation, no? The rest, well, I can see how this might worry some people.
And cheaper housing? Bad for some, good for others...

Repsol and the Texas Yale Capital Corporation (another stockholder) are filing suit before a U.S. court (none other than Thomas Griesa's) mainly because of a clause in the original contract stating that if anyone wanted to acquire more than 15% of the shares in the company they had to bid for hte entire amount… and this was a clause established by the state back then. I don't think it'll come to much but, still…

That's an amazing discovery Repsol made now, after having traded company shares for years with other groups without a care for that clause!
Where did I see that kind of acting before? Oh, yes, the portuguese privatizations and its rules... this way one day, that way another, depending on which minister or state secretary was employed by the contenders... seems like the methods are similar everywhere. And did Repsol pay for YPF by mortgaging YPF itself, too? I'm asking because that's another classical trick.

 

[Takhisis]

Heh, a little over 6% of the total shares has now come into Repsol's poer after the Eskenazis logically defaulted on some payments.

So they did squeeze some more taxes from there. I was wondering where the state had gotten funds in the early 2000s, as both industry and services were a total wreck after the years of the peg.
What were the spending priorities in those days, btw?

Government salaries, paying back those who'd helped them get in power, subsidising anythign within reach and putting people on perennial doles. And, of coruse, on buying off newspapers to 'create trust' by using official ads as a way to hand out money. Publish good news and you get bonuses. Publish bad enws and there's no ads and no money for you. No, I'm not joking.

Seems like an excellent idea all around. Hadn't you complained of widespread corruption? Legally acquired money - the kind that pays taxes - has a paper trail, storing those documents for a number of years is already an obligation, no? The rest, well, I can see how this might worry some people.
And cheaper housing? Bad for some, good for others...

So, guilty until proven innocent? Normal everyday people are barred from getting foreign currency and strangely enough, officials are not… and rant about how they should be allowed to keep them.
Meanwhile the peso is devaluing all the time in neighbouring countries as is to be expected.

Companies can't import anything unless they export the same amount so the dollars don't leave the country… if you want to bring in a foreign artist to perform you have to 'export' an Argentine artist to do the same abroad, if you want to brign in foreign cars you have to export wheat or oats… but that's the relatively more comedic side.
One of the more troublesome effects of all these import and currency controls is that hospitals don't have the required equipment and drugs. :suicide:

That's an amazing discovery Repsol made now, after having traded company shares for years with other groups without a care for that clause!
Where did I see that kind of acting before? Oh, yes, the portuguese privatizations and its rules... this way one day, that way another, depending on which minister or state secretary was employed by the contenders... seems like the methods are similar everywhere. And did Repsol pay for YPF by mortgaging YPF itself, too? I'm asking because that's another classical trick.

Erm, no, there was always a 'floating' percentage of 15% or more that was allowed to circulate on stock exchanges. The controlling interests were the ones with restrictions.

 

[innonimatu]

Government salaries, paying back those who'd helped them get in power, subsidising anythign within reach and putting people on perennial doles.

So, pouring the money back into the argentinian economy. Good. That should keep demand for goods. and thus its production, going inside Argentina.

And, of coruse, on buying off newspapers to 'create trust' by using official ads as a way to hand out money. Publish good news and you get bonuses. Publish bad enws and there's no ads and no money for you. No, I'm not joking.

Looks like they haven't bought La Nacion you keep linking to... and for a scandal they find ministers with a few tens of thousands of dollars? They look like choir boys compared with any european ministers...

About capital controls, you're pissed... yes, they are inconvenient for people doing business across borders. But what is the alternative to Argentina? You end the capital controls and borrow money from abroad? Right at a time when the world's financial system is an unmanageable, unstable mess! Then what? Have the lessons of the borrowing and capital flight in the 90s been forgotten already?

 

[JohannaK]

Such an interesting discussion... I would intervene, but I know nothing of Argentinian economy. Although I'm outraged because the larger shareholder of REPSOL is LaCaixa, which used to be the largest Catalan (not sure if Spanish) savings bank, and now is one of the largest ordinary banks of Spain, and one of those with the less problems.

 

[Takhisis]

So, pouring the money back into the argentinian economy. Good. That should keep demand for goods. and thus its production, going inside Argentina.

Pouring the money 'back'… hhmm, no. The money would've been in Argentina anyway. By 'subsidy' read 'bribe'. It's too common a euphemism these days.

Looks like they haven't bought La Nacion you keep linking to... and for a scandal they find ministers with a few tens of thousands of dollars? They look like choir boys compared with any european ministers...

Him. Read the related articles and it climbs into millions, including for Her Majesty herself.
Even twenty-four thousand dollars is much more than anyoen is allowed to exchange in a year. And, casually (my mistake, forgot the counterpart story) Her Majesty has said that a grandpa who wanted a mere ten dollars (as a present for his grandchildren) and has had to file an injunction is 'stingy' in a public speech. Apparently he's a bad grandpa for not giving the grandkids more money. Coming from a multimillionaire, it's not exactly surprising.

About capital controls, you're pissed... yes, they are inconvenient for people doing business across borders. But what is the alternative to Argentina? You end the capital controls and borrow money from abroad? Right at a time when the world's financial system is an unmanageable, unstable mess! Then what? Have the lessons of the borrowing and capital flight in the 90s been forgotten already?

No 'business across borders' means, for example, that people die because there are no medicines. That everything and eanything is captured by customs such as, say, the various Olympic teams not being able to train because they have nothing to train with. Yet, the Presidentess gets to spend hundreds of thousands on each outing on Loboutin, Luois Vuitton, etc. Really sound and consistent policy.

Such an interesting discussion... I would intervene, but I know nothing of Argentinian economy. Although I'm outraged because the larger shareholder of REPSOL is LaCaixa, which used to be the largest Catalan (not sure if Spanish) savings bank, and now is one of the largest ordinary banks of Spain, and one of those with the less problems.

But we could use an insight on what the Españish newspapers write about this country's… eccentrities.

 

[Bootstoots]

Is Argentina's postal system working properly? I ask because my lab (I'm a grad student in biology) is getting a plasmid (piece of DNA used in genetic engineering) shipped from researchers in Argentina. It's pretty critical to our work this summer. With all the import/export restrictions, are there also problems shipping items through the mail?

 

[Takhisis]

No it isn't working, I'll answer better in private.

 

[Cutlass]

Do the international parcel shipping companies (FedEx, UPS, others) have freedom to work there?

 

[JohannaK]

To be honest, it's been a bit too much time for the press here. Sometimes, here and there, there is something... but not that much. Recently, I can only remember Kicillof on the news. There were more news today, but I was eating lunch and didn't pay much attention to it. My grandpa said "The most corrupt country" or something like that. Also, my father says that Kicillof is the Presidentess' "querido".

 

[innonimatu]

No 'business across borders' means, for example, that people die because there are no medicines. That everything and eanything is captured by customs such as, say, the various Olympic teams not being able to train because they have nothing to train with. Yet, the Presidentess gets to spend hundreds of thousands on each outing on Loboutin, Luois Vuitton, etc. Really sound and consistent policy.

I must say that I really, really cant believe that. People dying because there are no authorizations to import medicines? Documented cases, and proof that it's not just some isolated incident of someone who couldn't import some fake "wonder drug" because it wasn't approved?

 

[Bootstoots]

We got the plasmid today, completely undisturbed and on time! We're actually having more trouble getting a strain of a common toadstool sent through domestic mail and another strain of the same fungus from Canada (both need USDA approval to be shipped) than we did getting a plasmid for transformation of said fungus shipped from Argentina in E. coli. Go figure.