Why do countries fail? the railway debacle in Argentina.

PDF VERSION Why do countries fail the railway debacle in Argentina

“Why nations fail: The origins of Power, Prosperity and Poverty”, is a book published in 2012 by economists Daron Acemoglu, and James A. Robinson,

Book tries to explain why some countries, even in adverse weather conditions, can develop, boost their economies, beat poverty and guarantee their population a future.

Everything begins with good administration, a road map with a patriotic spirit, embracing those citizens who fought for freedom and the development of their peoples.

But a mantle of realism and analysis is also essential to be able to interpret and develop the potentials that each of the sovereign countries have.

Each of these countries has economies based on the power of their territories, that is, mining, agribusiness, fishing, tourism, technology, to give a few examples. But logistics, and how to get that raw material, products, public transport with the greatest efficiency and at the lowest cost is fundamental in a process that must unfailingly lead to the interconnection of the country. Because if a Republic is not interconnected with each other, ultimately we are talking about a lack of internal coordination that was not only the entire economy but also the interconnection between peoples.

In reference to the above, the transport par excellence should be the railway, primarily in cargo transport as well as passengers – although the developed aeronautical industry has a more dynamic version of this type of transport -.

For the railway to be a success and to be installed quickly, efficiently and cheaply, the ideal scenario is the plains territory. that is to say, the countries whose geography has a great content of plains are very benefited in this sense.

The Argentine Republic is ranked number 8 among the countries with the largest plain in the world, preceded by Russia, Canada, China, the United States, Brazil, India and Australia. [1]

But beyond this geographical data not used those benefits of its territory to be able to exploit them to their maximum splendor. In other words, in contrast to the great powers that became strong due to their railway interconnection, which allows not only to carry passengers from one place to another, but also products, raw materials to different locations in a country, but also to arrive with a low cost of transport. to the ports, allowing the development of regional economies in an equal manner. Instead of expanding and modernizing its railway system, Argentina went from having 47,000 km of railway tracks in the 1950s to only 18,000 km.[2]

Although the reduction has been systematic, in the 1990s, a privatization process carried out by President Carlos Menem produced the dismantling of practically 30% of the Argentine railway system under the slogan “branch that stops a branch that closes ”. This not only caused many towns to be disconnected at a social level but also at an economic level. In other words, the towns and productive regions far from the 3 main ports of Argentina (main exit for export), had to look for alternative methods to transport their products, making them considerably more expensive.

Although the Argentine railway system was not characterized by having a good administration because it was generally in the charge of officials appointed by the Government in power without experience in the matter, as well as permanent union conflicts that did not guarantee its full operation, the decision of Canceling not only affected that present but also the future of the Republic. Because added to the high tax pressure that the industry, national and the agricultural sector has, there is a greater increase in logistics and bureaucracy – this generates loss of time and more costs -, having to implement other transportation alternatives such as the truck and in some cases the cargo plane in order to continue.

These realities generate different effects: the disappearance of some towns where their lives depended on the railroad, the increase in the cost of passenger transport and, above all, the increase in the cost of manufactured products and raw materials. Therefore, some industries could not continue, others had to compulsorily reinvent themselves and those that continued had to transfer the new costs and the new times to the final prices. This means a higher internal cost that generates a very internal problem that can be solved in Argentina, which is called inflation, and a higher external cost that means a competitive disadvantage with respect to international markets, which decided to adopt inverse policies, that is, to invest in tools that allow products to national have lower cost and thus win international markets.

In these times where there is a process – supported by the computer and technological revolution – of decentralization of large cities to improve the quality of life of citizens, better productivity in industries, well, and ensure that uprooting does not generate social conflicts, well generating new towns and new industries guaranteeing federalism, Argentina with 2.78 million square kilometers still sees the epicenter of the capital of what was the Viceroyalty of the Río de la Plata in colonial times.

In accordance with what has been proposed, in order to grow, it is unfailing to think inward first, to unite the territory through a modern railway intercommunication system where at each station a town, its industries and the power of regional economies are reborn. That is what federalism is about, that growth is throughout the territory, allowing the generation of new private jobs, new study centers to train these new labor demands and that the citizen has the freedom to develop his life itself.

In short, as I mentioned at the beginning, countries fail not because of their people but because of the wrong policies of their rulers and the lack of a medium- and long-term structural perspective.

By Diego Migliorisi

Lawyer, real estate broker

Master in political communication

Founder AALCC and 1770 Argentina

Vice President of the Technology Committee of the Inter-American Federation of Lawyers

[1] https://www.geografiainfinita.com/2019/06/los-paises-mas-grandes-del-mundo-en-superficie/

[2]https://revistavial.com/nuevas-tendencias-en-transporte-ferroviario-mitos-y-realidades-2/#:~:text=947%2C%20su%20red%20ferroviaria%20total,y%20angosta%20con% 201%20m.