| Work Detail |
The brake on public works is eloquent if observed from the state accounting numbers. Between the end of 2023 and the last data available last February, 2,117 projects that were no longer financed with national funds fell by the wayside.
The figures arise from state documentation. At the end of 2023, there were 2,417 works in progress with national resources. Last February, that number fell to 300 projects. It is a drop of 87.6%, according to the Public Investment Project Bank.
The cut in spending on public works, translated as capital transfers, reached 82.3% in real terms until last February, according to a report by the Argentine Association of Budget and Public Financial Administration (ASAP). This reduction was one of the keys of Javier Mileis government to obtain a financial surplus in the first two months of the year.
The numbers cited analyze the development of large and small-scale works, as well as the purchase of equipment.
“It is prioritized to finish strategic works that have to do with road safety, prisons, flood control and that at the same time are of national size and importance,” described a source from the Ministry of Public Works.
As detailed by the Ministry of Economy, in February capital expenditures amounted to $80,579.1 million. In January, $77,104.7 million. Therefore, so far this year these expenditures totaled $157,683.8 million. That is, 34.8% less in nominal terms compared to the same period in 2023. In real terms, the drop exceeds 80%.
This situation reflects the chronicle of an announced adjustment. Before he came to power, the then candidate, Javier Milei, anticipated that there would be no public works during his administration and supported the Chilean model. In fact, he classified the Argentine Chamber of Construction (CAC) as the “Argentine Chamber of Corruption.”
Once installed in the Casa Rosada, it was the Minister of Economy, Luis Caputo, who announced that “there is no money to pay for more public works.” Two months later, the Government made official the elimination of the Ministry of Infrastructure after the departure of Guillermo Ferraro and the Secretariat of Public Works was left in charge of the person who said that there are no more funds for them: Caputo.
On March 4, the authorities of the Argentine Chamber of Construction met with the President. In an official statement, the business entity held this dialogue after declaring a “state of emergency” for the sector on February 1. At that time, only 52 days had passed since the new government. On that occasion, the CAC warned about “an extreme crisis” that could lead to “the destruction of the productive network and more than 200,000 layoffs.”
Eliminating the fiscal deficit was classified by the President as “the mother of all battles.” Even the original version of the Base Law stipulated empowering the Executive Branch to provide “for emergency reasons the renegotiation or, where appropriate, termination of contracts of any type that generate obligations for the State, entered into prior to December 10.” December 2023 by any decentralized body or entity of the National Public Administration.”
Without an “omnibus law”, but with a financial surplus, the cuts in public works worked as an effective pair of scissors on the State accounts.
The financial surplus of the first two months was accompanied by a drop in transfers to the provinces, which explain a good part of the 82.3% reduction in capital spending. In real terms, the adjustment in this segment reached 92.4%, as analyzed by ASAP. It is another chapter of adjustment in public works.
In turn, the aforementioned study qualifies as “significant” the contraction in retirements and pensions, whose items decreased 34.8% in real terms in the first two months of the year.
Despite the slowdown in public works, last week the state company Energía Argentina (Enarsa) opened the envelopes to put out to tender the last section of the reversal of the Northern Gasduct, the most important infrastructure project of the year. It would fulfill the function of changing the flow of gas and replacing imports from Bolivia with production in Vaca Muerta, a reason that the Government considered “strategic” enough so that the progress of the specifications does not stop.
The expansion of the Néstor Kirchner Gasduct is another of the important public works. The latest official information in this regard is from October of last year, when the Ministry of Energy announced that it approved the tender for the purchase of pipes for section II, which connects the city of Salliqueló, in the south of the province of Buenos Aires, with that of San Jerónimo, in Santa Fe.
Almost five months after that approval, LA NACION consulted the current management at the head of the Ministry of Energy to find out details about the progress of this work, but did not receive a response.
Regarding the review of public spending, Enarsa, which is the state company that leads the tenders linked to the Néstor Kirchner Gasduct, did not receive funds in the form of capital transfers in February, ASAP reports.
In parallel with the adjustment of spending in this area, current transfers also suffered the “chainsaw” effect. They fell 19.9% ??in real terms during the first two months of the year. In this sense, Empowering Work represented the source of the largest percentage cut with 69.8% in real terms. At the same time, energy and transportation subsidies fell 60.1% and 42.1% respectively in real terms.
The latter impacted the increases in fare prices. In the case of electricity, the increase rose to 165% in February; In transportation, the minimum bus ticket went from $52.96 to $270 since the Milei government began.
State companies were no strangers to the presidential concept that “there is no money,” a mantra that was repeated so many times among the ranks of La Libertad Avanza. An example of this is the case of Aysa, which so far this year has also not received money from the Government. This contrasted with the first two months of 2023, when $2.3 billion had been transferred.
The Argentine Postal Service constitutes another case of spending reduction for the Government, which cut its current transfers to the company by 67.7% in real terms. In transportation the situation is repeated, although with an adjustment of 42.1%. In this way, the Government obtained a financial surplus.
Source: https://www.lanacion.com.ar/ |
