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Debate on the efficiency of government

Monday, February 10th 2003 - 20:00 UTC
Full article

The debate about private or government control of public utilities is back in Argentina and polls indicate public opinion is divided on the issue but with a majority demanding at least a greater government regulatory presence.

According to a Ispsos-Mora Araujo poll published last Sunday in Buenos Aires daily La Nación two thirds of those interviewed were against the current regime governing privatized public utilities.

The poll that included 1,200 people and was done between January 17/22, shows three main categories: those who favour privatization 33%; those who feel the need for a new "government (regulatory) presence" 38%, and 29% "purist" who want to return to the government run public utilities.

"It's not actually a jump to the past, but rather the demand for a modern, efficient administrator", says Mr. Manuel Mora Araujo head of the consulting company.

The debate re-emerged in Argentina politics when Justicialista presidential candidate Nestor Kirchner proposed it was time "to recover the trains, review the contracts and get them rolling again". Mr. Adolfo Rodríguez Sáa another Justicialista presidential hopeful also talked about rebuilding the railway network and starting a government run oil company to compete with YPF-Repsol, sold to Spanish interests in 1998/99.

Mr. Mora Araujo points out to some of the reasons that have influenced the debate can be traced to: loss of trust in private companies world wide, particularly since they seem an obstacle for more closely integrated societies; the banking system discredit which from financial corporations extended to the whole big business system, and finally the ongoing debate in Argentina regarding public utilities rates.

However there still is some confusion in the debate because while former president Carlos Menem pushed forward and preaches giving priority to the private sector, his electorate, among the lowest income of the population, openly supports "government run companies".

Similarly the higher middle class supports an open economy, private companies but prefers to vote left wing or Socialist oriented candidates who stand for the opposite.

As to how far to open the economy, 26% of those interviewed favour a wide open economy; 32% want a closed economy under the slogan "live with our own resources", while 42% hold the middle ground.

Categories: Mercosur.

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