It recently turned 16 years old to the day that a group of former secretaries Energy achieved something atypical in Argentine political leadership: consensus. But the strange fact was that the consensus was reached between ideologically heterogeneous people from different political spheres and with different beliefs in the Argentine energy sector. They agreed and expressed this in a framework document for the sector entitled “Energy Consensus”, which was presented on September 14, 2009 in the Aula Magna of the Faculty of Law.
It took 6 years for the company to be completed Any politician would be interested in this proposal, which aims to introduce government measures in the energy sector. It was during the 2015 election campaign that the majority of political parties, with the exception of Kirchnerism, signed the document pledging to abide by it regardless of who should govern. In 2017, the Senate of the Nation awarded the group of former energy ministers the Domingo Faustino Sarmiento Honorary Diploma for this initiative. Unfortunately, when Kirchnerism entered its fourth term in 2019, it ignored the agreement signed by the main democratic forces and reinstated vigorous populism, with all the known consequences.
What motivated the consensus of the former secretaries? The chronic lack of private investment in the industry due to the great uncertainty that politics generated in the medium and long term. They came to the obvious conclusion that the cause of this uncertainty was that volatile government policies replaced predictable state policies that extend beyond the mandatory presidential terms. Investment projects in the energy industry usually require terms of more than 10 years, which is why state policy did not offer any security. Postmodernism applied to investment projects has never worked. Less populism, fueled by a past consistent with its ideology and a present without a future.
10 years have passed and many of the proposals have been agreed in the document of the former secretaries were outdated, but the concept of state policy remains more relevant than ever. Its application in the situation in which our country finds itself is fundamental, especially given the lack of direct investment in a system such as electricity, which has been decapitalized by the energy populism of the last 20 years and is on the verge of collapse.
It is not enough to extol the benefits of a liberal republican system. Structural changes and the political arrangements that support them are needed over time, over decades. Hence the validity of state policy, which applies regardless of the government in power. A policy that gives the country predictability, not only for the necessary investors to value its resources on a global scale, but also to make the daily lives of Argentines more livable.
As well as The former state secretaries achieved this for part of the economy in 2009Today, the majority of political forces belonging to a capitalist democracy, regardless of whether they are left or right, should promote programmatic agreements in the various branches of government and then formalize them politically and institutionally in the National Congress. In addition to the Trump administration and the IMF, multilateral organizations, investment funds, business people and all developed countries that are interested in investing in Argentina are also explicitly demanding this. It was also the will of the citizens that was expressed in the eloquent message in the elections on October 26th.
The current government may be under pressure from the critical situation it inherited Taking advantage of the popular support it registered in the elections that brought it to power, it had to impose measures rather than agree to them. It is likely that he would have had no other alternative in the weak political context in which he took office, without a political organization, without legislators, governors or mayors and in the face of the persistent dismissal harassment of Kirchnerist Peronism.
The overwhelming result in the midterm elections gave him gave the government the political strength it needed to begin the necessary and urgent structural reforms in the second part of its term. If the consensus of the political parties belonging to the capitalist-democratic system were reached for these reforms, the necessary conditions for a predictable and stable future would be created. For our country it could mean the end of 80 years of decadence.
The energy is the engine of economic development, the potential generator of foreign exchange on a large scale and promoters of the well-being of citizens. In response to the disruptive paradigm shift that energy underwent on a global scale, there is an urgent need to reformulate state policies as they moved from the historical situation of “scarcity” to a situation of “abundance” due to the emergence of climate change caused by human activities, the development of renewable energies and the exploitation of unconventional oil, as in Vaca Muerta. But in Argentina this abundance will only be a fact as long as we do not have the financial means to appreciate it.
The characteristics and objectives of the electricity, oil and gas sectorsvary widely and any government policy proposal for the sector must take this into account. Electricity is of primary and essential importance for the domestic market because it is a component that contributes to economic productivity and because it is directly related to the quality of life of the population. On the other hand, oil and gas, which are abundant in Argentina’s tiny market, are almost exclusively aimed at exporting the largest possible quantities during the energy transition.
After passing through three segments, the electricity reaches the end consumer: production, transport and distribution, the latter two being regulated. All three are being decapitalized by the interventionism, the political control of tariffs and the corruption practiced in the four K governments. To get an idea of the scale of the problem, suffice it to say that just to return to the quality of electricity supply of 2002, around $20 billion would have to be invested in the entire chain, but there are still no adequate conditions for investors.
The oil and gas sector must focus on achieving competitiveness in the controversial international market, especially gas such as LNG or liquefied natural gas. Within four years, oil exports will be greater than domestic consumption. With gas the same thing can happen in 8 years. That is, we will move from “living with ourselves” at the expense of the captive customer to “living from the international market,” which sets the price independently of local bureaucracy. Selling in these markets requires eliminating the whims to which national and regional governments, unions and even companies were accustomed when there was only the single market and price was defined by incorporating inefficiencies and political favors.
These realities require Important structural changes that last for decades should therefore have the character of state policies that set the course for sustainable development. The path will be determined by the upcoming regulatory reforms and privatizations of the sector, which will streamline and promote transactions and contracts between private parties and give the state the role of intermediary, without abandoning its non-delegable function of ensuring competition, environmental regulations and relations with users, where natural monopolies remain.
Industrial engineer, former Minister of Energy and former Director of YPF
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