22 September 2006

In the dark

"Argentina is growing at Chinese rates" is a favorite of many a politician and journalist, meaning Argentina's GDP is increasing at a fast pace (around 9% per year since 2004). This is good news in principle, but you do know what happens when you get a puppy -- it eventually grows into a hungry beast (more or less the same as when you get a baby, only the baby is much more problematic). Puppies need food and countries need energy.

Argentina, by an ancestral tradition, never does anything preemptively. "We need to focus on urgent matters, such as refurbishing the presidential plane", says president after president. Argentina wholeheartedly embraces the "live the moment" philosophy. We're always either in an emergency or recovering from it. Asking an Argentine ruler to do futurology is akin to suggesting tarot cards.

Argentina needs energy. You can't grow without it; even if you're not doing anything but having babies (which raise your expenses, and therefore the national GDP), you need energy to extract the oil needed to produce plastic used in toys, and feed the machines that fell down trees for nice cradles, and transport those things around. You need power to keep an increasing population warm in winter and cool in summer. Argentina, with its socio-politico-economical collapse and all, neglected energy investment and now it is suffering.

Of course that also has to do with the fact that the government has forced (through laws or price controls) oil producers and gas sellers to keep prices lower than they'd want, and burdened them with export taxes. They're still making gobs of money and they're all basically insensitive corporate crybabies ("We only made 50% profit this year!", "It's because of you that we can't we give ourselves billions in stock options!", "Of course some people won't be able to pay triple for gas, but you can't distort the market like this!") but they're still have a right not to invest, and they aren't. No oil prospection, no new refineries, no new powerlines, no new power plants, nothing.

The other day the governor of Santa Fe announced the construction of two power plants in a place north of Rosario, but those won't be ready soon. Argentina also arranged that Paraguay will pay its 11-gigadollar debt to the Yaciretá Dam project with energy (8,000 GW per year for 40 years), but that's not much, it seems.

In the meantime, while we were still suffering brief blackouts, Minister of Federal Planning Julio De Vido assured last week that "no way" there will be blackout during the summer. Maybe he didn't check the air conditioning sales stats -- everybody's getting their big cooling machine, since last summer was torrid, global warming or not. President Kirchner has been repeating, mantra-like, "There is no energy crisis", and you know you can't contradict the president, lest you want to be struck by lightning or beaten to death by penguins.

Yesterday, however, Luis El Halli Obeid, president of EPE (our horrid partly state-owned provincial electric power company), admitted that "it would be a mistake to say that [blackouts] will not occur." Talk about candor... The fact that that amounted to say "I'm not doing my job and should be fired immediately" seems not to have intimidated Obeid.

So are we to trust Obeid or De Vido? Well none of course. What I would actually do to them cannot be published in this forum, but the pillory seems like a good idea.

1 comment:

  1. We have also read in last Saturday's Clarin that the current state of public infrastructures would not support the result of private sector real estate development boom. When all the new apartments are ready for occupation, we may be in real trouble on many fronts.

    Meanwhile, I am puzzled why the capital city of a country experiencing this level of growth still looks like shit in most parts - has any of the growth ended up in some Swiss bank account rather than here?


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