Milei’s Government has been applying exponential increases in utility rates which have been carried out well above salary levels and inflation itself. light, gas, transport, water, along with communicationsamong others, are essential services for the subsistence of households and are proving priceless for many families. In just one quarter, the poverty increased from 44.9% in the fourth quarter of 2023 to 54.8% in the first quarter of 2024 (9.9 percentage points).
According to the Rates and Subsidies Observatory of the Interdisciplinary Institute of Political Economy (IIEP) dependent on the UBA and CONICET, in July the rates for water, electricity, gas and transportation came to represent 15% of the average salaryreaching an amount of about $142,645. Meanwhile, other studies such as the one by the Center for Consumer Education, Services and Advice (CESyAC), estimated that if a typical family needed $1,352,395 to pay their June expenses in the City of Buenos Aires, two thirds must be allocated to paying for services, almost $890,000, including expenses on telephone, internet and health.
While the minimum wage increased only 68% between December ($156,000) and August ($262,432.93) and inflation accumulated a rise of 126% until June, the IIEP shows that the cost of The public services basket of AMBA increased by 374% only until the month of June, with rate increases ranging from 230% for electricity to 1,208% for gas and an average inflation of 126% until June. In August, there will be more increases in water (5.16% average), electricity (4%) and gas (4%), cell phones (5% and 6%), fuels (3%) and prepaid (8%). Along with this, in the AMBA the national government announced that it will eliminate all subsidies from September.
Behind the rate hikes is the objective of reducing economic subsidies to privatized companies in order to achieve the “fiscal balance” which requires the International Monetary Fund. A continuity of the adjustment which had already begun to be addressed through segmentations and rate increases, by former Economy Ministers Sergio Massa and Martín Guzmán, during the management of the Front of Alland the extraordinary rate increases applied during the government of Mauricio Macri.
But the reduction of these subsidies always occurs under the budget to guarantee corporate profitswho are “untouchable”, without even an investigation into their destination and the investments madeIn this way, the government and the IMF seek transferring costs to working families through hefty rate hikesand they doubly hit purchasing power due to the inflationary effects of these increases on the rest of the products in the basic basket.
With yours: millionaire profits from privatized companies
The government imposed these rate hikes without any questioning of what each service provider did with the multi-million dollar subsidies granted by the national government since 2002, which amounted to almost 3 points of GDP in 2014, while hundreds of thousands of families are left without electricity when there are high or low temperatures, and public transportation is of a very poor quality.
He subsidy scheme which governed essentially during the Kirchner governments had the role of guaranteeing the profits of the energy companies without touching the privatization schemeBut it also sought to directly guarantee cheap energy to large companies such as Techint, Arcor and many others: it is not households, but companies that are the main consumers of gas and electricity.
According to a report by the consulting firm PxQ, energy subsidies (considering electricity, gas and others) would amount to US$ 6,744 million dollars in 2024, 30% less than what was verified during 2023. Likewise, in terms of the Gross Domestic Product (GDP), they represent 1.0 percentage points this year, verifying a decrease of 0.5 pp compared to the previous year, and 1.3 pp less compared to 2021.
Essentially through the State, previously through subsidies, and now mainly through the exorbitant fees that each worker must pay, The profit rate of private borrowers is being sustained and financeds. Neither scheme offers a rational response between the needs of the working class and the development possibilities existing in the country and the region.
While the pockets of the working class suffer from high tariffs, privatized companies earned millions in the first months of the year. According to a report by CIFRA, Metrogas earned 19.116 million pesos in the first quarter of 2024, an increase of 1,630% compared to the same period in 2023, and Edenor 50.867 million pesos in the first three months of the year.
That is, both companies earned $769,000,000 per day in 2024. A sum very far from what an average worker or a retiree earns, where the minimum salary in July, including the bonus, was $285,622.
End the looting
Argentina, even with its economy tied to imperialism, was one of the first countries in the world to conquer an integrated hydrocarbon industry. Not only that: Gas del Estado became the third company of its kind in the world.
But the public companies managed by the capitalist State were emptied by the “contractor nation”. With the Menemist privatization, the national energy production that integrated extraction, production, transportation and distribution was dismembered.
Under the private management model, whether with subsidies or rate hikes, companies, which are the ones who are making a killing, disinvest, imposing the decline of the energy system. Or they only invest partially when they can charge a very high price for each peso they pay, as happened during the years of Carlos Menem and Fernando De la Rúa.
An essential service
Public services are an essential right for working people. Their provision must be decoupled from the logic of corporate profit.
The current state of dismemberment of the energy network lacks rationality. In order to establish rational planning, it is necessary to nationalize the national energy system, that is, all productive stages: from resource extraction, electricity generation, transportation to distribution to users.
This way out is the opposite of returning to the old Segba or Gas del Estado to be exposed once again to the emptying of the “contractor nation” or the “Public Works Club”. The expropriation or withdrawal of concessions from private companies must be without any type of compensation: we cannot do as Axel Kicillof did, who compensated Repsol after years of plundering.
On the contrary, an audit in which the accounting books of companies are opened must establish the reparation that they must pay to the working people for the decline to which they pushed the system.
All hydrocarbon production and the entire energy system must be nationalized and managed by specialized workers and technicians. The participation of popular user committees is also essential. For the implementation of a sustainable national plan to guarantee the population a cheap and quality service, on the way to lowering energy costs based on productive development and carrying out the energy transition.
Source: www.laizquierdadiario.com
