Suzie Wylie looks at the motives behind the Argentinian government's expropriation of one oil company.
The Law of Hydrocarbon Sovereignty passed through the Argentinian National Congress in May with almost complete support across the political spectrum. It formalised the expropriation of the Spanish multinational Repsol's shares in the oil company YPF. It was met with condemnation and the threat of reprisals from the Spanish government and the European Union.
While vilified as a crazed populist in the right wing press, president Cristina Fernandez de Kirchner is enjoying huge backing for a move seen as a renationalisation of the nation's key oil company. What led the Argentinian government to take this drastic step?
For 90 years YPF was the main state-owned oil company. It provided jobs and security for tens of thousands of workers. Then came the devastating privatisations of the 1990s. Entire communities were made unemployed, sowing the seeds for the crisis of 2001-2.
For many Argentinians, the renationalisation is a reversal of those damaging economic policies and a rejection of asset-stripping multinationals. As such, it should be supported. One recent survey found 65 percent of the population are in favour of the state taking over key industries in the country.
The hypocrisy of Repsol is plain to see. They claim the action is "theft" while 90 percent of their profits from Argentina have gone to shareholders and they use tax havens to avoid paying taxes in Spain. Argentina has gone from being a net exporter to an importer of oil. The outcome of privatisation is clear - loss of energy self-sufficiency and a devastating fall in reserves due to lack of exploration and mass unemployment.
No wonder the expropriation is popular. The law talks about "national sovereignty and independence, economic development with social equality, creation of employment, control of key strategic natural resources".
But, sadly, the reality is considerably less radical. The so-called nationalisation is a forced buyout of 51 percent of the YPF share package. The question of compensation is still being debated. The government could still agree to pay Repsol for its shares in YPF.
The Petersen Group (led by the multi-billionaire Eskenazi family) still own 25 percent of YPF without having paid a single peso. They actively participated in the pillaging and remain a major shareholder.
The discovery of shale (non-conventional) oil at Vaca Muerta in NeuquALT+0233n could make it one of the largest and highest quality reserves in the world, potentially in excess of 22,000 million barrels. The new YPF management have already approached multinationals Exxon, Chevron and Total to discuss joint projects. All this hardly represents an act of national liberation, and is not even a return to the parameters of state capitalist companies before the neoliberal era.
Having said that, state control is better than an unregulated, unplanned neoliberal model. Demands for 100 percent nationalisation and democratic control in the hands of the workers should be supported. The choice is not just between a "serious" national capitalism with a progressive government and "colonial" globalised capital.
Kirchner is facing growing opposition on a number of political fronts.
Some prominent intellectuals previously wedded to her new-developmentalist economic model recently split ranks over issues such as vicious state repression of social movements and controversial plans for a "mega-mine". Conflict over salary cuts, lack of investment in transport and the recent withdrawal of subsidies for utilities such as electricity and more is intensifying.
In the mass resistance to the crisis of 2001-2, thousands of workers organised to take their factories and workplaces back under democratic control. This gave a glimpse of the possibility of radically challenging the relations of private profit and exploitation under capitalism.
Rather than choosing one set of exploiters over another, the social movements that have exploded over the last couple of years offer the hope of much more profound and democratic change. But this will require an understanding that a state with a progressive leadership is not the real agent of change, but will always end up maintaining the domination of capital.
Suzie Wylie lives in Buenos Aires, Argentina