November 21, 2014
Córdoba expands debt, long term investment
9 out of 10 pesos are spent on keeping the district running, report says
Córdoba province’s spending slightly exceeds its income, while nine out of 10 pesos are spent only on keeping the district running, according to a recent report on the implementation of the 2014 budget during the first three months of the year.
The provincial administration received 37.3 percent more funds up to March this year compared with the same period of 2013, while spending increased by 38.9 percent. The numbers are not entirely negative, however, as the economic performance of the province led by Governor José Manuel de la Sota last year registered a surplus of 1.1 billion pesos.
This scenario for the country’s second largest province was outlined in a report published last week by the non-profit Argentine Association of Budget and Public Finance Administration (ASAP).
Unlike Buenos Aires province — an effectively unmanageable sub-country of more than 15 million inhabitants — Córdoba’s long-term investment strategy seems to be essentially intact.
The province expects its capital expenditure for 2014 to clock in at around 6.7 billion pesos — a 124-percent increase on last year.
The provincial government has allocated only 15.6 percent more funds for wages than it did for 2013 — which clearly falls short of what is actually needed, especially after last year’s major wage hikes for security forces following the now infamous December sit-ins.
ASAP experts point out that the mean salary increases for this year came in at around 31.61 percent — almost double than what was budgeted for the year.
“This will probably lead to budget extensions or revisions,” the report said.
The province is pulling in a lot of its resources to pay its obligations. According to ASAP, Córdoba’s debt amounts to 14.966 billion pesos.
Like many other districts, the province ruled by De la Sota has suffered from January’s steep devaluation of the peso, as the local government also has debt denominated in foreign currency.
Most of the debt (37.1 percent) is owed to the federal government and to the Agencia Córdoba Investión y Financiamiento (ACIF), a part-private, part state-run organisation.
Last year, the Cristina Fernández de Kirchner administration signed an agreement with governors of 17 provinces to refinance their debts of up to 75 billion pesos, holding back claims from provinces regarding financial problems.
Córdoba Governor José Manuel de la Sota — who questioned the agreement by sending text messages to Cabinet Chief Jorge Capitanich — was the main absentee from the meeting, which took place on December 28.