Argentine privatizations in the 1990's are the antithesis of the 1940's nationalizations. In many economic activities, the breaking of the raison d'etre of the State was not a mere consequence of an ideological trend but was due to deep and legitimate reasons. State companies - road sector included -moved irreversibly away from the original idea, social welfare maximization, towards the achievement of their own particular objectives. The lack of State resources during the 1980's and the weakening of the users' right of the road property led the road sector to a terminal situation, which reached its definite crisis in 1989 with a runaway inflation of 4,929 percent, and again the following year with a 1,347 percent inflation. The Argentine road system was on the verge of a generalized breakdown in 1990: its deterioration pace fed itself back at an annual rate of 10 percent of its length, and the state maintenance capacity reached 3.5 percent a year. Thus, only a little more than 25 percent of the 30,000 km roadway system was in a good condition. This was particularly worrying for the ways of transport responsible for 92 percent passenger and 85 percent goods transport. One way or another, and within such critical context, it was necessary to resort to private investment. (A)
Samenvatting