Repsol “pursued a policy of pillage, not of production, not of exploration”, the Argentine president thundered on Monday. “They practically made the country unviable with their business policies, not resource policies.” Such was Cristina Fernández’s sulphurous stance as she announced her government was renationalising YPF, the country’s largest oil group.
There are of course many convoluted reasons behind the Argentine government’s contentious decision to reverse the privatisation of a few years ago. But objective observers will agree that this was not part of an overarching development strategy, nor a manifestation of resource nationalism – nor indeed any other carefully crafted initiative forming part of a broader design. Rather, cronyism, rifts between rival oligarchs, political expediency, populism and the wish to please a public resentful of the privatisations of the 1990s all played into the decision.
Given Argentina’s record with nationalisations, there is widespread scepticism that the government will run YPF efficiently. In the past decade, the Buenos Aires water company, the national airline, Aerolíneas Argentinas and several electricity companies that had been privatised in the 1990s have been renationalised with politically charged arguments similar to those used to justify Repsol’s takeover.