Renationalisation: the Argentine case shows it can be done

Renationalisation: the Argentine case shows it can be done
Javier Lewkowicz 20 March 2015


Argentina has completed multiple, successful renationalisations in the past decade. It can be done... when the political will is there.


[font size=1]
President Kirchner. Flickr/Ministerio de Cultura de la Nacion
[/font]
Many South American countries are currently going through a period of so-called post neo-liberalism, a quest to re-establish the state as the principal mechanism of social integration. The path chosen, however, has varied in many respects, one of which is exemplified by nationalisation. Argentina, Venezuela and Bolivia all deployed measures to change company ownership, but each country’s policy was based on its own particular rationale. Venezuela directly expropriated and nationalised hundreds of private businesses that had not been previously privatised, the impetus to do so having been very weak during the 1990s. Bolivia undertook nationalisation of strategic sectors, most importantly hydrocarbons and telecommunications, a policy Evo Morales had anticipated during in his presidential campaign. It also took over four power companies and a metallurgy plant. Brazil, Ecuador and Uruguay, on the other hand, reasserted state control in the economy but not through significant nationalisation.

Argentina’s case is noteworthy in this regard. It begins back in the early 90s with the Freudian slip of erstwhile Minister of Public Works Roberto Dromi, who, on unveiling his privatisation plan, famously declared that nothing that should belong to the state would remain in state hands. So began the sale of an unprecedented number of state-owned assets. Radio, television, telephone, tolls, roads and railways, and the national airline passed into private hands along with steel, petrochemicals, shipbuilding, electricity and hydroelectric plants, oil and gas, mortgage lending, and social security. Not for nothing was the country considered the IMF’s top student. The neoliberal explosion of 2001 inaugurated a new period, in which private enterprises were not renationalised across the board but on a case-by-case basis. For the most part, this occurred in response to poor management that jeopardized the businesses in question and sometimes, in a more indirect manner, the nation’s socio-economic stability.

In November 2003, the newly minted government of President Néstor Kirchner tackled the first transfer of a private company back to the public sector. Argentina’s postal service, which had been in the hands of the Macri group, was nationalised in response to mounting unpaid license fees and the discovery that the severance pay of 3,000 laid-off workers had been recorded in the company books as an investment. The radio spectrum was nationalised a few months later after its owners defaulted on a promised $300 million investment. The two moves were decisive because the country was still recovering from an economic crisis and the government needed to send a confident message that it was determined to initiate policy.

But the icing on the cake came in 2006 when, after years of corporate neglect, Aguas Argentinas, the water supply and sanitation system run by the French group Suez, allowed contaminated water to be distributed throughout the southwest region of Buenos Aires. The government seized the opportunity to shift water management to state-owned Aysa, and from that moment on progress was dramatic. Where there were 3 million inhabitants without access to potable water in metropolitan Buenos Aires in 2006, the company now aims to achieve 100 percent coverage by the end of this year and complete sewage coverage by 2019.

More:
https://www.opendemocracy.net/ourkingdom/javier-lewkowicz/renationalisation-argentine-case-shows-it-can-be-done