The Argentine government will seek financing for a pipeline that can carry the precious fuel from Vaca Muerta to Brazil. It is necessary to warn that the provinces of the Argentine northeast are taking the first steps regarding the arrival of natural gas.
The initiative is aimed at obtaining dollars that are undoubtedly much needed. Now, why are these currencies required? They can be used only to pay external financial commitments that enable short-term credit, indebtedness and flight, or to import goods and services of all kinds, or for capital goods and raw materials destined for an accelerated development process, beginning by sectors that are identified as critical.
Notwithstanding the fact that there are voices, mostly interested, who affirm that Vaca Muerta could turn Argentina into little more than a country of the Persian Gulf, a serious country with long-term planning manages its reserves in a balanced manner Oil should not be soybeans , whose boom in the early 2000s was practically squandered in terms of investment for future takeoff. Today we can say that, in the best of cases, it avoided further decline.
Frondizi understood, before taking office as President, that the problem of oil (or gas) and foreign currency had to be addressed in another way. Instead of exporting oil for foreign exchange, what should be done was to extract and use our oil for industrial development and save foreign exchange. In other words, the dollars we need we can obtain not only by exporting wheat and meat at that time, but mainly by not importing. Fuel imports absorbed 30% of the foreign currency available to the country. In recent years, of every 100 dollars that are imported, approximately 20 are spent on fuel, without taking into account that Argentina has not grown for 15 years. If it did, it would need a lot more. That is to say: Argentina is possibly tying itself to international commitments that could put future governments facing the dilemma of complying with international commitments or delaying growth, which is equal to less work and less wages, or admitting the paralysis of the country, as Rogelio Julio Frigerio once said.
Let us also remember that around the year 1960, Argentina and Brazil had a similar GDP, so Argentina was almost four times Brazil’s in GDP per capita. Today Brazil approximately quadruples Argentina’s GDP. Average per capita, Argentina’s GDP is still somewhat higher
Frondizi under the suggestive heading of “The oil that is left over”, in his work “Petróleo y Nación” from 1963 deals with the issue of exports precisely to Brazil. But only after supplying the internal market and, more than that, after anticipating the additional reserves that the accelerated development of Argentina would require.
While Argentina is building a gas pipeline to export, it should expand its oil refining capacity and, if it must be exported, naphtha and other derivatives such as fertilizers, plastic raw materials and countless finished products whose production requires gas as fuel. This creates thousands of jobs that would otherwise be generated outside the country. International relations did not show such ingenuity, however “strategic ally” our neighbor may be and given the asymmetries that we have mentioned.
The export, in any case, should be carried out with the maximum possible added value. For which an industrialization strategy is essential. A topic that is being debated again today in the most improvised places like Davos. Argentina needs to find it quickly.
*Director of the Center for Development Studies (CEPADE).
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