The government’s response to the surge in power outages caused by the heat wave has been very consistent with how Kirchner governments deal with problems. Fireworks and finger pointing at the ‘culprit’an entity which, depending on the case, can be the agricultural oligarchy, international banks, currency traders, price makers, wild opposition or, to sum up, neoliberalism. Never a mea culpa.
A current case: the whole world is talking about inflation and what central banks are doing to contain it. Here we are talking about inflation but not about the Central Bank, but about the controls that a second-line official will announce. The same thing happens with power outages.O. There has been talk of criminal complaints, of abandonment of people, of “everyone ran away”. Nor were they mentioned, by the government, to the rates.
The cost of domestic electricity paid by users served by Edenor and Edesur it is the cheapest in the countryNot to mention compared to other countries. But that specific figure is not taken into account in understanding why electricity is cut off in half of the city of Buenos Aires and in various areas of the suburbs.
The rate freeze is not just a key feature of the economic model K, but also a inescapable explanation to talk about energy deficit and finally fiscal deficit and inflation. The free tariffs are the counterpart to the billions of dollars that have gone and will go to cover the energy deficit with imported energy.
Without anyone being offended, just to summarize: “It’s taxes, stupid.” It is the most obvious answer to identify the problem. “It’s the economy, stupid,” was the surgical phrase Bill Clinton came up with to undermine his electoral rival George Bush Sr. in 1992.
The Economist Nicholas Gadano he summed up the matter with a simple bar graph that references several increases since December 10, 2019, the first day of the Alberto Fernández government.
– He distribution charge that Edenor and Edesur receive, i.e. how much they pocket to bring the energy to the end user, increased less than 50%
– THE consumer prices measured by the INDEC it has risen almost 350%.
– He official exchange rate grown up 220%
– The index of Wages from INDEC, near 290%
– THE wholesale inflation it was almost 330%
– The prices of naphtha YPF has gone up 250%
It is quite obvious that the cost of electricity has become cheaper in real terms for the pockets of wage earners. The downside is that it becomes difficult to maintain the investments necessary to guarantee a service of acceptable quality.
Not to mention the tariffs, the Government advances with a administrative intervention. At the forefront of this intervention, and perhaps to cure the shapes, they put a “Engineer”. The Ministry of Energy defended the designation of George Ferraramayor of Avellaneda, saying it was “manager of an energy company” whose name he could not remember. This assignment, assuming it actually existed, was not published on Ferraresi’s own website, where it is said that after graduating as an engineer from the UTN of Avellaneda he became head of Safety and Hygiene at the “Garrahan” Hospital.
As an inspector, Ferraresi will be able to verify “in the area” what the problem is with the electricity service.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.