The member of the Center for Argentine Political Economy (CEPA) Guido Bambini explained in detail the main points of the Incentive Regime for Large Investments (RIGI), registered in the Base Law which is currently being discussed in committees in the Senate of the Nation.
In this regard, the economist stated that the regulations grant too many benefits to the foreign private sector to the detriment of the local industrial network, which is one of the main job generators registered in the country, among other detrimental effects for the national economy. “It consolidates a scheme where the industrial productive development of Argentina is mortgaged”assured Bambini in AM750.
The so-called Incentive Regime for Large Investments is one of the articles of the Base Law that generated the most controversies in various sectors of the opposition. Cristina Kirchner He called it the “Legal statute of colonialism, 21st century version” this Tuesday, during the Inauguration of the Women’s Hall at the Patria Institute. For his part, the radical senator Martin Lousteau He also focused on the regulations during the debate in committees in the Senate and said: “We are giving away money that does not seem to trigger investments but we lose future revenue“.
The most controversial points of the RIGI
According to the CEPA member, the regulations are designed for the mining, hydrocarbon and agricultural sectors. Three vectors of the economy that, despite their great growth, produced only 17 thousand direct jobs in 15 years.
This regime establishes benefits in tax, fiscal and exchange terms for large foreign companies, such as a ten-point reduction in Income Tax, exemption from the payment of Gross Income and export duties (withholdings).
“Doesn’t ask for anything in return: neither technology transfer nor supplier development and allows importing even used goods at zero rate. The word merchandise also appears in the text, so They could even import the clothes worn by the workers of these large enterprises“said the specialist, in dialogue with Gustavo Campanaand highlighted that it does not force foreign private companies to hire local labor either.
Another controversial item is that it establishes International Center for Settlement of Investment Disputes (ICSID), a World Bank institution based in Washington, as the competent body to resolve legal conflicts between the national State and private parties that adhere to the RIGI.
“We have a history of many trial losses in international courts. If I remember correctly, We have lost 89% of the trials that the Argentine State has with private parties“Bambini warned.
It should be remembered that Argentina was sued before the ICSID on many occasions, for example, for the nationalization of the exAFJP in 2008 or the expropriation of Aerolíneas Argentinas from the Spanish company Marsans in the same year.
Finally, the economist explained that this regime provides fiscal stability for foreign private companies for 30 years. “In general, large multinationals plan their investments for ten years, You are giving them much more than what they ask for and you are committing future collections.“he concluded.
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