Federal Capital (Paco Urondo Agency, published in Buenos Aires Economico 03 / 09/2010)
Within macroeconomic models are frequent writings on how to influence the economy interest rates, fluctuations in the various markets for goods, work, monetary policy, the twin surpluses, and so on. But often left out the importance of public investment, especially by orthodox economists, who analyze the state sector investment as an expense, not to determine what role it occupies and has occupied in the different models. However, during Argentina's economic history has been significant public investment for each economic model.
Thus, in Argentina's history have been developed four economic models: the agro-export model (1860/1880-1930), the import substitution industrialization (1930-1976), the neoliberal model of financial recovery (1976-2003) and the current economic model (2003-present) . In each, public investment has had different orientations.
During the agro-export model state investment was directed in favor of large landowners and the establishment of political leadership, who through the PAN (National Autonomist Party) elected to the Presidents discretion. In this context, the investment is earmarked for example the creation of national army with 6,000 troops that were distributed throughout the country and which in 1879 the minister of war, Julio Argentino Roca, carried out the so-called "desert campaign" to increase the amount of land available for large landowners.
addition, investments are earmarked for public works such as the extension of roads, railways, bridges and ports, complementing the investment being made by British private equity, who invested because of the broad benefits they have under the national state. These investments allowed the construction of the infrastructure necessary for the consolidation of agro-export model and to make productive the vast tracts of land he had purchased the oligarchy.
Between 1889 and 1908 he built the Teatro Colon, an architectural marvel that we born in the twentieth century and was one of the most important theaters in the world and representing the interests of the aristocracy and also showed the cultural colonialism time, because they invested a lot of money imitating the theaters in developed countries.
Thus, public investment in the agro-export model had a central role in increasing social inequality, because it was aimed to benefit a few and develop a model that generated a double heterogeneity Internal increasing social and regional differentiation.
With the 1929 economic crisis is "collapsed" the agro-export model and was very marked degree of economic dependency that had at that time. Indeed, the crisis of the central countries automatically moved to the national economy because in the agro-export model of growth depended on foreign markets in general and Britain in particular.
protectionism of developed countries which led to the collapse of Argentina's exports of primary products to the central countries and the consequent reduction in imports by the lack of foreign exchange forced to construct the model of industrialization by import substitution. That is, begin to produce manufactured goods that previously were imported from industrialized countries. In this new model of development, public investment decisively changed course. While it did not occur in the first years are called "infamous decade", this shift in state investment was mainly from the arrival of Juan Domingo Peron to power.
The paradigm shift in investment meant that the state began to invest for the popular sectors. Peron and from the Secretariat Labour and began to take far-reaching measures for the most vulnerable: the established social insurance and pensions, benefiting two million people, the status of rural workers who established the minimum wage and tried to improve the feeding conditions living and working in rural employees and annual leave pay, for the whole complex which then created for the workers to go with their families (such as hotels Chapadmalal and Dam complex in Córdoba).
In the 40s begin to nationalize public services are acquired railroads, telephones, German companies that were the basis of group DINIE (National Industries of the State), among others. Through the planned five-year plans how and where he should be oriented public investment. Establishing the National Energy Company, who was responsible for the installation of 37 hydropower plants. Through Fiscal Oilfields began the exploitation of the mines of Rio Turbio. State gas was created.
All these measures were completed to enshrine in the 1949 Constitution, which states that the State owned utilities nature and source of energy for our country. Investment grew health, education and housing. Increased public employment.
Thus, the investment during the Peronist economic model was for the State to acquire resources to improve the living standards of workers, increase wages and to giving them rights that for so many years had been denied.
However, the March 24, 1976 the meeting of commanders overthrew the then president of Argentina Maria Estela Martinez de Peron, which meant a new turn in economic policy. It ended the stage of import substitution to move to financial recovery neoliberal model, where investment State began to consider it as an expense.
Initially, the military dictatorship began to dismantle the state-owned companies such as YPF who performed outsourcing to private companies (Esso and Shell) to exploit the areas that had been previously analyzed by the state company, removing resources so that the State: it used to be able to collect, was now concentrated in private companies. On the other hand, there was a staggering public debt policy. Indeed, external debt rose from 8,000 million to? 46,000 million in about seven years.
In 90 deepened the neoliberal model imposed in the mid 70's, inter alia, transferring public enterprises to the private sector. Gave not only businesses but also were granted exclusively, which did not make any kind of investment with respect to the commitments they had made also leaving the state without resources.
In this context, began a process of steady reduction in public investment, which led inter alia to increase social inequality, poverty, homelessness and unemployment, ie, increasing exclusion and marginalization of large sectors of society in Argentina. With the advent
de Néstor Kirchner a la presidencia, el 25 de mayo de 2003, se terminó con 30 años de neoliberalismo y se construyó un nuevo modelo económico caracterizado por la reindustrialización de la economía argentina y el aumento de la inclusión social, en el que la inversión pública volvió a ser uno de los ejes centrales de la política macroeconómico.
En el nuevo modelo de desarrollo se instrumentó una política fiscal expansiva con un aumento permanente de la inversión del Estado en la construcción de infraestructura y política de subsidios para la contención de precios. Uno de los resultados más destacados de la política fiscal es el crecimiento continuo del mercado from increasing domestic demand and the creation of more than 4 million jobs.
addition, there were sustained increases in pensions, wages and income, resulting in a sharp increase in the minimum wage and mobile, regular improvements in pensions and universal child allowance which was the most ambitious social plan Latin America.
In this new context is being conducted from the national government's strategic plan consists of residential land development, highways and roads, water and sewers, water works, schools and universities, energy infrastructure, and so on. Again, in the current economic model of public investment has been of utmost importance to include the marginalized sectors of society after thirty years of neoliberalism.
In short, the public investment policy has been central for the different business models to benefit one or another sector of society in Argentina. Next year will choose between two different models: those who want to strengthen public investment in favor of the popular sectors, or those who want a small state investment and to benefit a minority group of individuals.
The author is a member of the Study Group of National Economy and Popular (GEENaP) www.geenap.com.ar
(Paco Agency Urondo) Thus, in Argentina's history have been developed four economic models: the agro-export model (1860/1880-1930), the import substitution industrialization (1930-1976), the neoliberal model of financial recovery (1976-2003) and the current economic model (2003-present) . In each, public investment has had different orientations.
During the agro-export model state investment was directed in favor of large landowners and the establishment of political leadership, who through the PAN (National Autonomist Party) elected to the Presidents discretion. In this context, the investment is earmarked for example the creation of national army with 6,000 troops that were distributed throughout the country and which in 1879 the minister of war, Julio Argentino Roca, carried out the so-called "desert campaign" to increase the amount of land available for large landowners.
addition, investments are earmarked for public works such as the extension of roads, railways, bridges and ports, complementing the investment being made by British private equity, who invested because of the broad benefits they have under the national state. These investments allowed the construction of the infrastructure necessary for the consolidation of agro-export model and to make productive the vast tracts of land he had purchased the oligarchy.
Between 1889 and 1908 he built the Teatro Colon, an architectural marvel that we born in the twentieth century and was one of the most important theaters in the world and representing the interests of the aristocracy and also showed the cultural colonialism time, because they invested a lot of money imitating the theaters in developed countries.
Thus, public investment in the agro-export model had a central role in increasing social inequality, because it was aimed to benefit a few and develop a model that generated a double heterogeneity Internal increasing social and regional differentiation.
With the 1929 economic crisis is "collapsed" the agro-export model and was very marked degree of economic dependency that had at that time. Indeed, the crisis of the central countries automatically moved to the national economy because in the agro-export model of growth depended on foreign markets in general and Britain in particular.
protectionism of developed countries which led to the collapse of Argentina's exports of primary products to the central countries and the consequent reduction in imports by the lack of foreign exchange forced to construct the model of industrialization by import substitution. That is, begin to produce manufactured goods that previously were imported from industrialized countries. In this new model of development, public investment decisively changed course. While it did not occur in the first years are called "infamous decade", this shift in state investment was mainly from the arrival of Juan Domingo Peron to power.
The paradigm shift in investment meant that the state began to invest for the popular sectors. Peron and from the Secretariat Labour and began to take far-reaching measures for the most vulnerable: the established social insurance and pensions, benefiting two million people, the status of rural workers who established the minimum wage and tried to improve the feeding conditions living and working in rural employees and annual leave pay, for the whole complex which then created for the workers to go with their families (such as hotels Chapadmalal and Dam complex in Córdoba).
In the 40s begin to nationalize public services are acquired railroads, telephones, German companies that were the basis of group DINIE (National Industries of the State), among others. Through the planned five-year plans how and where he should be oriented public investment. Establishing the National Energy Company, who was responsible for the installation of 37 hydropower plants. Through Fiscal Oilfields began the exploitation of the mines of Rio Turbio. State gas was created.
All these measures were completed to enshrine in the 1949 Constitution, which states that the State owned utilities nature and source of energy for our country. Investment grew health, education and housing. Increased public employment.
Thus, the investment during the Peronist economic model was for the State to acquire resources to improve the living standards of workers, increase wages and to giving them rights that for so many years had been denied.
However, the March 24, 1976 the meeting of commanders overthrew the then president of Argentina Maria Estela Martinez de Peron, which meant a new turn in economic policy. It ended the stage of import substitution to move to financial recovery neoliberal model, where investment State began to consider it as an expense.
Initially, the military dictatorship began to dismantle the state-owned companies such as YPF who performed outsourcing to private companies (Esso and Shell) to exploit the areas that had been previously analyzed by the state company, removing resources so that the State: it used to be able to collect, was now concentrated in private companies. On the other hand, there was a staggering public debt policy. Indeed, external debt rose from 8,000 million to? 46,000 million in about seven years.
In 90 deepened the neoliberal model imposed in the mid 70's, inter alia, transferring public enterprises to the private sector. Gave not only businesses but also were granted exclusively, which did not make any kind of investment with respect to the commitments they had made also leaving the state without resources.
In this context, began a process of steady reduction in public investment, which led inter alia to increase social inequality, poverty, homelessness and unemployment, ie, increasing exclusion and marginalization of large sectors of society in Argentina. With the advent
de Néstor Kirchner a la presidencia, el 25 de mayo de 2003, se terminó con 30 años de neoliberalismo y se construyó un nuevo modelo económico caracterizado por la reindustrialización de la economía argentina y el aumento de la inclusión social, en el que la inversión pública volvió a ser uno de los ejes centrales de la política macroeconómico.
En el nuevo modelo de desarrollo se instrumentó una política fiscal expansiva con un aumento permanente de la inversión del Estado en la construcción de infraestructura y política de subsidios para la contención de precios. Uno de los resultados más destacados de la política fiscal es el crecimiento continuo del mercado from increasing domestic demand and the creation of more than 4 million jobs.
addition, there were sustained increases in pensions, wages and income, resulting in a sharp increase in the minimum wage and mobile, regular improvements in pensions and universal child allowance which was the most ambitious social plan Latin America.
In this new context is being conducted from the national government's strategic plan consists of residential land development, highways and roads, water and sewers, water works, schools and universities, energy infrastructure, and so on. Again, in the current economic model of public investment has been of utmost importance to include the marginalized sectors of society after thirty years of neoliberalism.
In short, the public investment policy has been central for the different business models to benefit one or another sector of society in Argentina. Next year will choose between two different models: those who want to strengthen public investment in favor of the popular sectors, or those who want a small state investment and to benefit a minority group of individuals.
The author is a member of the Study Group of National Economy and Popular (GEENaP) www.geenap.com.ar
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