Comment Re:think globally (Score 1) 203
I didn't say we borrowed 80 million. NML bought the DEFAULTED bonds for 80 million. They bought worthless papers, from someone with terrible credit. And they sued, to collect 100% payment.
That's NOT how it works, man. On one hand, you have the "free market" buying and selling, and on the other hand, you have a judge ruling on the price of bonds. WTF? Let's put it another way: Why should Argentina pay a lot more interest than, say, Germany? Because there's a chance that Argentina won't pay? Obviously not. Since a judge can order you to pay in full.
As for Repsol, Argentina has paid for it already. The clown we have for minister of economy said, at one point, "Repsol won't receive a single cent". Then he, himself, negotiated something like a payment of 6 billion dollars for it in bonds (when the valuation was estimated in 5 billion). This was criticized because he overpaid. They did this to allow Repsol to sell the 6 billion in bonds for an estimated market value of 5 billion. (In my opinion, Argentina should have paid Repsol what repsol paid to the Argentinian government in the 90s for YPF: One Dollar. In fact, make it 10. Make it 100. Hell, let's make it 1 million dollars - man, that's a great return: pay 1 dollar, do nothing, then get paid 1 million 10 years later!)
The problem with Repsol is a lot deeper and it's only part of the problems with private investment in Argentina. Especially in the privatization business that happened in the early 90s. Argentina recently "found" an oil field, Vaca Muerta. I say "found" because it was known about for decades. In all these years, Repsol never bothered to exploit it. They simply used the existing wells and tapped the "easy" oil. Argentina's energy demands were higher than that so we import a lot of fuel.
Another case is electricity. In Buenos Aires, Edenor and Edesur exploited the already existing grid. They did not invest anything in over 20 years. Last summer there was a blackout that left a neighborhood without electricity for over a week. Edenor said it's because of Argentina's import restriction policies. The truth is, over 10 years ago, before any restrictions, a similar event happened. An entire neighborhood without power for over a week. So Edenor claims it's because the Argentine government has "frozen the cost of electricity". It's bullshit again, since Edenor/Edesur both receive several hundred million dollars a year in subsidies.
Then there's the telephone communications business. ENTel was split into two (Telecom+Telefonica) in 1990 or 91. For several years the situation didn't improve - at all. Until they started replacing the lines. Then it was great: service was excellent (in most cities), and it Just Worked. ENTel is remembered because of its terrible service (actually most of it was self-sabotage by their own employees who had been told if the company was privatized they'd get higher salaries - oops, most were fired).
Aerolineas Argentinas is the best example of this too. Aerolineas owned over 20 planes, 3 simulators, dozens of buildings across the world (in airports and outside), employeed thousands of people, and operated at a loss of about 1 million dollars a year. It was privatized. After 10 years of privatizations, Aerolineas leases all its planes, owns no simulators, liquidated most of their buildings, employs hundreds (not thousands) of people, and.. it operates at a loss of over 1 million dollars a year.
I could keep giving you examples here, but it's not needed. The pattern is pretty clear here: Own a privatized company, liquidate everything you can, and funnel ALL earnings outside the country. If the company needs some sort of investment, you only do it if it's critical (like Telecom, who could simply not operate because the lines were in terrible state), and all investments you do through a loan taken in Argentina and paid in Argentina (and then not pay it, take it to an extreme situation, and threaten to fire all employees. Then they go out to the street, protest, and the government takes care of the debt). You NEVER bring any money to Argentina.
And the best part: if the government tries to do anything about it, like jail executives or take over the company, you go to CNN, Financial Times, Bloomberg, etc. and whine that the "government of Argentina is trying to steal a private company".
The problem is a combination of both corruption from the Argentinian government that lets these characters do whatever they please with privatized companies, and the "free market" propaganda system, that makes you believe that Argentina is some sort of bully that wats to take over companies. And of course, it's only the propaganda system that says this sort of things. Or do you believe S&P or Fitch are so innocent they don't know how these companies (like Repsol and Marsans) operate in Argentina? Of course they know. But they shield themselves in the "technically what they're doing isn't illegal" argument.
Argentina is in serious need of investment right now. But what we need is real investors. People who want to start a business here AND make it grow - not some "get rich quick" type who wants to buy an already existing company to cash it out. The problem is no foreign investor ever wanted to do that. This is not new, it's not because of this government or the previous one. It's been like this since the early days, when England built a ton of infrastructure here (railroads mostly) to facilitate the transport of goods: Argentina supplied raw materials and England sold us manufactured stuff (England sold us BRICKS. Man, that's ridiculous). England was also clever (and shitty) enough to provide Brazil with a different rail gauge so there couldn't be trade between Brazil and Argentina.
So basically this country will never leave this situation. We have been like this for 200 years. This isn't going to change.
