TheDonald
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From a sustainable economic recovery standpoint, Macri is the best thing that has happened to Argentina in decades. Unfortunately, he inherited an economic hole that is abysmally deep - far deeper than he thought. Inflation is the result of many factors, but a considerable portion of the current high inflation is due to the medicine that the Argentine economy must take to heal.
The increase in transportation and utility costs have been enormous contributors to the current inflation. But let's break that down. Take gas. The average gas bill in BA has skyrocketed during Macri's tenure. Previously, a 3-bedroom apartment in San Telmo got a gas bill for the equivalent of $10US...and that's for 2 months in winter!!!
This means consumers were paying below the cost of production. Who made up the difference? Under Argentina's socialist regimes, the Argentine government made up the difference by printing money and forcing the gas companies into bare bones operations. That's why gas pipes rupture in Centro. That's why gas lines get cut in buildings and remain unrepaired for years. That's why customer service is awful.
Think of what it takes to run gas distribution. First, you either have to buy gas from a neighbor country or pump it out of the ground in your own territory. This is incredibly expensive. Then the gas goes through a processor, which removes the impurities. Then it goes through a fracionator, which separates the gas into various components, like propane, butane, ethan and methane (gas in your home is mostly methane). Then the gas gets shipped into cities and towns for distribution. In the city, it goes to a distribution center and from there, using complex pipes and pumps and meters, it goes to your home. There is an army of employees to keep it all working and provide customer service.
This is enormously expensive and it requires millions upon millions of dollars in annual upkeep and improvement. According to my reading and people I have talked to, gas companies in Argentina were given less than bare bones subsidies from the state. So they were running on life support for years.
Macri sought to catch this up. To have consumers pay closer to the cost of production, like every other developed country in the world. That way, the gas companies could maintain their infrastructure and invest for the future. Now imagine this policy across the water business, the electricity business, public transportation. That's what Macri sought - a balanced economic relationship between service providers and consumers. To make the consumer pay for the cost of production. To take the state out as benefactor of the public service business, like every other developed nation. Over the long term, Argentina would have enjoyed a higher standard of living and a healthier economy. His policy was absolutely spot on. But the implementation has proven too painful for Argentines to bear. The hole dug by years of corrupt socialist policy is too deep. Now, Argentines will likely reverse Macri's appropriate economic policies via votes at the ballot box.
I haven't even mentioned corruption at these state-financed enterprises. But you all know the drill....
The increase in transportation and utility costs have been enormous contributors to the current inflation. But let's break that down. Take gas. The average gas bill in BA has skyrocketed during Macri's tenure. Previously, a 3-bedroom apartment in San Telmo got a gas bill for the equivalent of $10US...and that's for 2 months in winter!!!
This means consumers were paying below the cost of production. Who made up the difference? Under Argentina's socialist regimes, the Argentine government made up the difference by printing money and forcing the gas companies into bare bones operations. That's why gas pipes rupture in Centro. That's why gas lines get cut in buildings and remain unrepaired for years. That's why customer service is awful.
Think of what it takes to run gas distribution. First, you either have to buy gas from a neighbor country or pump it out of the ground in your own territory. This is incredibly expensive. Then the gas goes through a processor, which removes the impurities. Then it goes through a fracionator, which separates the gas into various components, like propane, butane, ethan and methane (gas in your home is mostly methane). Then the gas gets shipped into cities and towns for distribution. In the city, it goes to a distribution center and from there, using complex pipes and pumps and meters, it goes to your home. There is an army of employees to keep it all working and provide customer service.
This is enormously expensive and it requires millions upon millions of dollars in annual upkeep and improvement. According to my reading and people I have talked to, gas companies in Argentina were given less than bare bones subsidies from the state. So they were running on life support for years.
Macri sought to catch this up. To have consumers pay closer to the cost of production, like every other developed country in the world. That way, the gas companies could maintain their infrastructure and invest for the future. Now imagine this policy across the water business, the electricity business, public transportation. That's what Macri sought - a balanced economic relationship between service providers and consumers. To make the consumer pay for the cost of production. To take the state out as benefactor of the public service business, like every other developed nation. Over the long term, Argentina would have enjoyed a higher standard of living and a healthier economy. His policy was absolutely spot on. But the implementation has proven too painful for Argentines to bear. The hole dug by years of corrupt socialist policy is too deep. Now, Argentines will likely reverse Macri's appropriate economic policies via votes at the ballot box.
I haven't even mentioned corruption at these state-financed enterprises. But you all know the drill....
