A bill passed by the Lower HouseFriday, August 7, 2009
Tierra del Fuego hails electronic goods bill
By Guillermo Háskel, Herald staff.
A bill passed by the Lower House on Wednesday night which its supporters say is designed to put Tierra del Fuego province on an equal footing with the Brazilian city of Manaus regarding the manufacturing of some electronic goods, will lead to the creation of 2,000 jobs in Argentina's southernmost province if passed into law, a top Tierra del Fuego official said.
Provincial Economy Minister Rubén Bahntje told the Herald in the early hours of yesterday that last year the province lost more than 1,000 out of the 4,000 electronic sector jobs it had.
Private economists say Argentina is in a recession made more severe by the global financial crisis.
The minister highlighetd that contrary to what some deputies argued during the debate, the federal tax bill will not mean the loss of jobs elsewhere in the country, as the products manufactured in Tierra del Fuego are not manufactured in other provinces.
That is the reason why notebooks were left out of the bill, as they are being manufatured in other places, the minister said. Netbooks were also not included in the value added tax hike (from 10 percent to 21 percent). The bill applies to monitors, plasmas, LCD and cell phones.
“The notion spread that this would lead to the losss of jobs elsewhere in the country, but people visiting Tierra del Fuego will be able to verify that, unlike some deputies said, it is not true that industry in the province just consists of filling boxes with ready-made products. There are state-of-the art assembly lines,” the minister said.
The bill was passed by 136 votes against 61; 18 lawmakers abstained. The bill was backed by the Victory Front coalition of President Cristina Fernández de Kirchner, the Radical Party, the Neuquén Popular Movement and the centre-left Solidarity and Equality (SI) party while the centre-right PRO party. The Civic Coalition abstained.
“This is a bill aimed at putting Tierra del Fuego on an equal footing with the enhancement programme of Manaus,” Bahntje told the Herald in the Congress building after the Lower House's debate attended by Governor Fabiana Ríos.
The overwhleming majority of the products manufactured will be sold in mainland Argentina and companies in Tierra del Fuego have the installed capacity to satisfy the entire national demand for monitors, the minister said.
Regrettably, he added, “at the last minute we had to leave out notebooks and netbooks because there was a tough opposition from importers and we had to accept that for the bill to succeed,” he said. “But the competition here is with importers and between buying a cellphone made in Brazil or in Argentina we should start buying Argentine ones.”
The bill, which has to be approved by the Senate, is similar to that of Manaus, he said, adding that: “Regrettably, we in the 1990s destroyed our industry while Brazil has had a serious industrial policy over the past three decades.”
Bahntje said that the electronic sector shifts rapidly and that “we need to renew the approved product lines every six months. We cannot wait two years for the approval of new ones.”
A report in La Nación newspaper said that if passed into law the bill will lead companies to invest 40 million dollars in the province and that the initiative will mean a 130-million-dollar surplus.
PRO deputy Esteban Bullrich criticized the bill arguing that it will lead to higher prices for Argentine residents who buy technological products and that it will also lead to a digital gap as it blocks imports.
But Lower House Budget Committeee Chairman Gustavo Marconato, of the ruling Victory Front, defended the bill saying that it is a programme to replace imports, enhance local industry and protect jobs “to recover from the consequences of the 1990s, when many companies went banrkrupt.
This is not about subsidies. This is a tax-break programme aimed at supporting Tierra del Fuego, its factories and workers, to put it on an equal footing with Manaus.”