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Thu May 3, 2012
Argentina Takes Over Spanish Energy Firm YPF
Originally published on Thu May 3, 2012 10:31 am
DAVID GREENE, HOST:
NPR's business news starts with control of the energy.
(SOUNDBITE OF MUSIC)
GREENE: In South America, a shift towards political populism has led to the nationalism of an oil company in Argentina and an electricity provider in Bolivia. Both of the companies seized are Spanish. The nationalizations are hitting Spain during a time of deep economic crisis. And as we'll hear in a few minutes from reporter Lauren Frayer, they sparked a lot of anger in Spain.
But first to Juan Forero in Argentina, the takeovers may have popular support in South America, but they're raising some questions about the impact on foreign investment.
JUAN FORERO, BYLINE: It all began here in the Argentine capital two weeks ago. There was a rousing speech by President Cristina Fernandez de Kirchner about ensuring resource sovereignty. And pro-government groups chanted their approval as she announced the take-over of the energy company YPF, the biggest oil and gas firm in the country.
(SOUNDBITE OF CHANTING AND CLAPPING)
FORERO: Some analysts, though, are warning that moves like Argentina's are designed more for short-term political gain, rather than as a long-term strategy.
Before the YPF seizure, the president had seen her poll numbers tumble as Argentina continued to cope with high inflation, capital flight and a serious money crunch.
Among those critical of the government's policies is Claudio Loser, an Argentine economist who's now a consultant in Washington.
CLAUDIO LOSER: This was a movement that is being received very, very well by the general population and even the opposition parties in the country.
FORERO: But Loser says that Argentina's move could have negative, long-term consequences - leaving the country without the capital to develop its oil fields and driving away other companies and investors.
LOSER: What I would say is that Argentina may not fall into a collapse but it will, sort of, fade into mediocrity, and this is already a serious problem in today's world.
FORERO: There was little criticism, though, in Argentina's congress. One lawmaker after another praised the takeover in a debate that began yesterday and lasted until just past midnight today.
JOSE CIAMPINI, LAWMAKER: (Foreign language spoken)
FORERO: Jose Ciampini, a lawmaker from remote Patagonia where YPF operates, told his colleagues that neo-liberal market reforms are on the way out. And he said that by nationalizing YPF, the president was ensuring that the energy industry would answer to the people.
Since the president's party controls congress, it's a given that lawmakers will soon vote to support the president's expropriation.
Juan Forero, NPR News, Buenos Aires. Transcript provided by NPR, Copyright National Public Radio.