That Whole Privatization Thing? We Were Just Kidding.

As we noted in our last post, Argentina's current administration sometimes acts slightly at odds with its stated goal of increasing foreign investment in the country. Before we're accused of being wildeyed Washington Consensus types, let me just say that the main goal of a country shouldn't be keeping international capital happy--it should be caring for its citizens. Still, sometimes money and welfare have similar interests. Like, say, exporting beef from beef-producing Argentina, which can create jobs, etc.

Yesterday's invest-in-us-well-don't news was that Kirchner et al revoked the 30-year contract it had with French giant Suez to run Buenos Aires's water service, Aguas Argentinas, and turned it back into a state-owned utility. Now, this had been expected for a while--Suez had been agitating for price increases ever since the 2001 currency crisis cut the prices they could charge by 2/3, and in September they announced they were going to leave--but the fact that Kirchner couldn't find any other company to take over the service suggests the lack of corporate eagerness to work with Argentina. This analysis piece in Clarín points to the apparently improvised nature of the government takeover, the recent history of re-stating utilities and services, and the rumors that the national airline, Aerolíneas Argentinas, and the former state petroleum company, YPF (now part of Spanish firm Repsol), will be next.