Economy Argentina’s Ruined Railways Will Force Milei to Confront Poverty - Bloomberg

[Larry]

Last time Argentina tried to privatize railroads in the 1990's failed miserably. I'm not sure what the train rides will go to. The cost of commuter trains are 10 cents and subway fares 6 cents. Any guesses how expensive public transport will get and the end result? You can guess it's not going to turn out good.

Source:

Argentina’s Ruined Railways Will Force Milei to Confront Poverty

Those living off state subsidies in ghost towns abandoned by the once-robust train service fear the pain of the new president’s spending cuts will be acute

www.bloomberg.com

 

[Betsy Ross]

I read that article this morning after you posted it. I think the key points of that article are below and they are quite shocking! This will be painful but if Argentina is going to repair itself they MUST stop this nonsense.

Even by Latin American standards, Argentina is an outlier. Public spending is equivalent to 38% of GDP, more than the 35% regional average and well above the 24% seen in the country between 1993 and 2005, according to IMF data. Government jobs like the ones at Argentina’s train service have been the main driver of overspending since the mid 2000s, according to an analysis by economist Milagros Gismondi.

“There isn’t a real consciousness that you have to lower spending in Argentina,” says Gismondi, who was chief of staff at the economy ministry in 2019. “It’s not normal to operate with more train employees than in the United States,” she adds, and unless Argentines understand that’s not sustainable “we’ll continue from one crisis to another.”

Argentina’s state spending spree goes far beyond its railways, though. Governments have added nearly a million jobs to the public payroll since 2012, three times the gains seen in the private sector, labor ministry data show. Welfare has also ballooned. The number of social security recipients who haven’t contributed to the system spiked above 5 million in 2020 from just 172,000 in 2002, according to a report by Andres Schipani at CIAS, a university think tank.

 

[Billy Goat]

No doubt all these needed fixes are going to have a LOT of Argentines complaining. I think it starts with getting rid of many employees that don't really do much. But then they will figure out that they just need to stop many of these commuter train services between areas. And even if the numbers are low, many people depend on them. Ain't no way any private company will want to buy these companies because without subsidies by Argentina, no way they can make any money. And locals won't be able to pay the non-subsidized prices. So no one is going to be able to afford it. There in lies the problem Milei faces.

 

[Hornie Todongs]

Something tells me hitchhiking is going to become more popular all across Argentina!

 

[Vero]

No doubt if public transport prices skyrocket chaos will ensue. Most locals depend on it to get to/from work. They are already cash strapped and struggling.