Minister Martín Guzmán, this Tuesday at the AmCham Summit. To his right is the head of JP Morgan Argentina, Facundo Gómez Minujin.
certainly in a way unintentionalbut this Monday the Minister of Economy Martin Guzmanhowsoever endorsed and justified the government’s tariff policy by former president Mauricio Macri, conducted by the former Minister of Energy Juan Jose Arangurenapplied from the beginning of his mandate of strong adjustment to public service rates, under the certainty that it was necessary lower the subsidy to reduce the financial deficit which they inherited in the second government of Cristina Fernández de Kirchner.
Guzmán’s endorsement follows this statement made in the form of a question: “In which country do energy subsidies account for 4 points of GDP? In which country in the world has a deficit financed by a currency that people no longer want?
Beyond that the message is drone to the vice presidentGuzmán also pointed out the need to change rate charts to President Alberto Fernández, who made the freezing of electricity, gas, water and public transport a workhorse of legislative elections last year.
Last year, Guzmán mentioned the need to change the rate scheme and pointed out, as is well known, that subsidies on public services they favor the rich users more than the poor.
But in that case La Cámpora officials collided that they will not admit the increases because they could put in doubt the electoral result in 2021, which in any case has been very bad for the ruling party.
The pro-rich subsidy was shown in a report released in 2016 by the Center for Distributive, Labor and Social Studies (CEDLAS), which concluded, based on the evidence, that each of the households of the three poorest deciles received, during the CFK government, half the money as subsidy received by each of the households of the three richest deciles.
What each household pays for each electricity or gas bill covers approximately 20% of the real cost of the service. During the Macri government, thanks to strong percentage increases, invoices represent between 60% and 70% of cost. Now, thanks to fixed rates and high inflation, it’s back to 20%. In other words, the government of Alberto Fernández he wasted the adjustment made by his predecessor. And now Guzmán seems to recognize it.
Source: Clarin
