The people and YPF

A symbol of Argentine independence gets reshaped

Most Argentines agree that Cristina did the right thing when she deprived Repsol of its share of YPF and, for good measure, made many of the firm’s Spanish executives flee the country to avoid being grilled by government heavies. As far as the majority is concerned, any oil that can be found in this part of the world, especially the huge quantities that are locked in Patagonian shale, is Argentine so foreigners have no business tampering with it. Though some leftists think Cristina did not go far enough (to their mind, she should have nationalized every last drop of the stuff) the general view seems to be that, thanks to the takeover, the country now enjoys “hydrocarbon sovereignty” and can therefore face the future with renewed confidence.

Government spokesmen are doing their best to persuade the populace that it is the sole owner of the country’s natural resources and that privatization was wicked because it meant giving large chunks of them to unscrupulous individuals linked to nasty multinational corporations that are interested in nothing but making a profit. In theory, this may be the case, but in real life it does not work out that way. In Argentina, public ownership means entrusting what supposedly belongs to “the people” to venal politicians and their friends who, needless to say, make the most of what to them is an irresistible opportunity to get rich.

Here, the “public sector” was in effect privatized long before Carlos Menem and his men arrived on the scene and decided that flogging off some wretchedly inefficient state monopolies would help give them the ready cash they needed to keep the show on the road. Ideology had nothing to do with it; like the late Néstor Kirchner and his spouse, Menem was a pragmatist who played it by ear. Should Cristina come to the conclusion that her government could make a packet by selling YPF, or Enarsa for that matter, to the Chinese who are currently rolling in money, she would be only too happy to go ahead. To justify what her critics would describe as a U-turn, she would only have to repeat what she said, in her usual vehement manner, back in the 1990s when she thought privatization was patriotic.

When YPF was in the hands of its rightful owners, the people, it was widely regarded as the worst run enterprise in the entire world, the only sizable oil company that managed to lose money while all the others were raking it in. That unflattering judgment was based on a misunderstanding. The people in charge of YPF, whether political appointees or military chieftains such as General Suárez Mason —­ who, among other things, saw it shed six billion dollars a year, earning it an entry in the record books — were more interested in milking what for them was a wonderfully productive cash cow than in looking for oil, finding it, and then using it or selling it.

They, and the union bosses who connived with them because YPF gave jobs to tens of thousands of otherwise unemployable workers, cannot be considered failures. From their point of view, the bigger the losses, the more successful they were. They could get away with the gigantic scam because then, as now, YPF was in some way sacred, a symbol of Argentine independence, so it was considered sacrilegious, not to say downright unpatriotic, to pry too deeply into its affairs or judge its performance according to criteria may be appropriate for private concerns but which in its case would have been out of place. So if Julio De Vido, Axel Kicilloff and the rest of them make a mess of things as is more than likely if their business dealings so far tell us anything, they will be hotly defended not only by their political allies but also by much of the pro-government “progressive” intelligentsia.

Cristina has assured us that YPF will be managed as a private, not a public firm, no doubt because she does not want opposition parliamentarians poking their noses into what, if her propagandists’ efforts (that logo in which YPF has been replaced by CFK) are anything to go by, many assume has just been added to her own business empire. Despite such quibbling, most people both here and abroad see the takeover as yet another advance by the state into what free-enterprisers regard as private territory. That may bother the markets, but here a majority want the state to do more, not less; few days go by without someone somewhere complaining that the state has abandoned common folk to their fate and pray for it to return.

When well-meaning leftists say they think the state should play a far bigger role in the economy, what they have in mind are the institutions of that name that exist in countries like France, Germany and Japan but, unfortunately, are rarely to be found in most of Latin America. In the developed world, the state tends to be elitist and the people who occupy the top jobs are recruited from among the brainiest graduates of institutions such as France’s ruthlessly selective École Nationale d’Administration. Here, they tend to be individuals chosen for their “loyalty” to whoever happens to be in power. For governments like Argentina’s current one, mere ability is something to be frowned on; anyone suspected of possessing too much of it either has to be exceptionally good at ingratiating himself or herself with a notoriously touchy president, or willing to keep a suitably low profile and refrain from embarrassing the many mediocrities who by all accounts surround her.