The Limited Times

Now you can see non-English news...

The incredible case of the minister who announces works that will not be done


Highlights: Gabriel Katopodis is the Minister of Public Works in Argentina's government. He is accused of cutting off resources, in the middle of the government's adjustment plan. Kirchnerism has the habit of not saving and spending thinking about the coming election, says Pablo Coste. Coste: The way of managing the State, which is also a way of understanding the state, emerges in data from a work by specialists recently published on the site Economic Alchemies. The key to the model passes from end to end through the box, that is, through a combo.

They are part of a raid by Gabriel Katopodis that started in March and accumulates 67 acts. The problem is that they are cutting off resources, in the middle of the government's adjustment plan

It is nothing new, at this point in the film, the enormous weight that Kirchnerism assigns to the State in its strategies of power and in the preservation of power, although sometimes, too many times, what they ostentatiously call "present State" looks quite similar to an absent State. In fact, to a State above all functional to political objectives.

The key to the model passes from end to end through the box, that is, through a combo where they send the large tax revenues that can be obtained, the tax pressure at the top and, in the end, public spending pulling to record levels.

All very exciting, except for some details: as has happened and happens with other governments, Kirchnerism has the habit of not saving and spending thinking about the coming election, its strength is not the management or order of public accounts and, obviously, not always anything in silver or the economy accompanies.

This way of managing the State, which is also a way of understanding the State, emerges, clearly, in data from a work by specialists recently published on the site Economic Alchemies.

It reveals that in times of super soybeans at unprecedented international prices and withholdings that pumped resources to pasture, total public spending took a historic leap.

It went from representing just over 13% of GDP in 2006 to 24% in 2015, which is said to be a large deployment of funds that started at the end of the government of Néstor K. and spread between the first and second presidency of Cristina K.

As if not if the implications of the move were not fully understood, put into today's values those eleven percentage points of GDP earned for what the power and the objectives of power decided are equivalent to US $ 60,000 million long or, if you prefer, about 6,000 million dollars per year.

For greater abundance, it is worth adding the stark contrast with the US $ 1,700 million below zero, in red, that mark the net reserves of the Central Bank. That is, what little remains of those years of super soy in a place drilled by unpredictability.

There we have another example of how Kirchnerism manages and values the resources of the State. The one that follows sounds similar to what is called the absent state.

During the boom years, when total spending climbed to 24% of GDP, public investment and infrastructure were never allocated more than a meagre 2.9% and it was only for two years out of a series of 16 that began in 2007. Full Christianity already, lately under the reign of fiscal adjustment the series registers 1% of GDP in 2020; 1.4% in 2021 and 1.6% last year.

In Latin America the average is around 2.8% and the advisable for countries like Argentina is 4%.

A not so rare oddity, with an unconcealable smell of electoral propaganda, is the one that stars in this film the Minister of Public Works. Contrary to the tight panorama that reports from his own government begin to show and to feel himself, Gabriel Katopodis spends his time announcing investments non-stop, goes from inauguration to inauguration, sometimes three per day, and accumulates 67 acts since March.

Some functions have been enlivened by Alberto Fernández, Axel Kicillof, Wado de Pedro, Minister Tolosa Paz and even by Foreign Minister Cafiero. And there is never a lack of mayors who enter the cast, most obviously of the Kirchner stick.

The fact is that the efforts of Katopodis face a growing problem called adjustment, as was evident in the real 43% drop that last year hit the turns of the Nation to the province and the cuts of 26% and 28%, also of the real type, that shake it in the first months of 2023.

Result: the works are paralyzed, suspended or enter the zone of limbo, as construction companies say. In the flip enter homes, roads and environmental and urban sanitation works. Also debts of the ministry itself with suppliers and contractors that are accumulating.

Even so, the great card that Katopodis maintains and to which he bets is the weight of Buenos Aires within the Kirchnerist strategy, very clear in Cristina's manifest decision to preserve and strengthen the power and political capital that she has harvested there.

For now, the Province continues to receive a large box that is managed and administered from the Casa Rosada. It is a mountain of silver that arises from an old K trick: underestimating the estimated revenues in the National Budget, especially tax collection. Thus, only in the first quarter of 2023, the maneuver left no less than $ 284,700 million free and available.

According to spreadsheets included in a work of the consulting firm Aerarium, the office of the always privileged governor Axel Kicillof already received $ 107,000 million, that is, 37.6% of the total. Part of a game known as the "discretionary transfers", for the Autonomous City there was a modest 8% and even more modest 5% and 6.5% for Santa Fe and Chaco respectively.

Where the scythe of the mercilessly short adjustment now is in a package that was the centerpiece of the K model: the mountain of subsidies, especially to electricity and gas, which banked very long periods of frozen tariffs and in fact benefited high-income sectors more than low-income ones.

Data from official sources record years in which the account of subsidies, above indiscriminate, increased by 93%, 45 percentage points above inflation, and represented 4% of GDP or double public investment. In what category of State K does this management of limited resources that borders on waste fall?

There is revealed, again and in fact, the role that the so-called capital expenditures have in the model.

This is how key infrastructure investments in any development plan ended up on the sidelines: from roads, bridges and ports to renewable energy and railways. Just like those destined to attend basic, absent or precarious services, such as drinking water, sewers and sewerage.

But since they are works of slow political performance, something happens here that happens elsewhere: they are kicked forward and spent on what performs quickly.

In the meantime, certain classical forms of underdevelopment continue to gain ground. And it may happen, as it happens, that capital expenditures are cornered by some adjustment program, whether it comes from the Monetary Fund or from the impossibility of continuing to sustain already unsustainable fiscal deficits.

Seen the complete picture and some of its consequences, it is difficult to find where a slogan and a comment that Cristina Kirchner fired these days come in. And also where she puts herself, the vice president.

He said in one case: "It is essential, more than ever, to build a government program that will make Argentines and Argentina fall in love again."

And in the next he proposed "that the IMF allow us to develop our own program of growth, industrialization and technological innovation, if it is not going to be impossible to pay it."

Rarities, again. Cristina talks about building a government program when she has been in government for more than three years. And it makes a claim for the same to the IMF after an agreement with the IMF that has already completed a long year.

Source: clarin

All business articles on 2023-05-27

You may like

Life/Entertain 2023-08-14T13:38:13.947Z

Trends 24h


© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.