The Argentine government will make cuts in education, health and public works, in addition to other portfolios, to try to reduce the country’s fiscal deficit. But, at the same time, it will increase investment in state-owned companies, as decided by the country’s Ministry of Economy last week.
It is estimated that the 34 state-owned companies have around 90,000 employees, double the number of the Judiciary and Legislative powers combined. Most of the budget goes to salaries, according to balance sheets made at the end of the second quarter. According to the analysis by Laura Serra, economist at the Argentine newspaper La Nacion, despite so much investment, most state-owned companies are under-executed.
Public companies are in the eye of the hurricane because the losses they generate contribute to deepening the fiscal deficit, a structural problem in Argentina, but remain unharmed by state cuts.
A third of what was cut from the main government portfolios, such as education and health, is equivalent to the investment in state-owned companies of 37,000 million pesos (more than 1.3 trillion reais).
“Recently, the Executive Branch announced a revenue freeze for the national public sector. But since the end of 2020, 135,000 people have entered the state. We have more and more State, but more and more poverty. Of course, just spending more will not solve the situation of these compatriots”, sums up Senator Martín Lousteau (from the Radical Evolution party).
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