Without cash, the opportunity is in management and in private work

Argentina's economic policy faces a severe constraint in its efforts to stimulate activity, with limited room to increase public spending or significantly cut taxes, two traditional fiscal tools of stimulus. As a result, the government has shifted focus toward managing existing resources more efficiently rather than expanding them. The primary challenge now lies in how to manage what already exists, rather than simply increasing expenditure. The country’s accumulated primary surplus over the past twelve months dropped to just 1% of GDP, far below the 1.8% recorded at the end of 2024. This decline was driven by weak tax collection and the tax cuts implemented by the current administration. In this context, the main opportunity emerges not from increased spending but from better management of available resources. After more than thirty months in power, the current administration has yet to launch an ambitious infrastructure program funded through concessions, public-private partnerships, multilateral organizations, and capital markets. This situation has drawn criticism from some quarters, particularly among those who view the state’s role as central to economic growth. However, there is growing recognition that mobilizing private investment without compromising fiscal balance represents a viable alternative. The distinction is crucial: it is not about reviving the old model of publicly funded public works, which historically led to deficits, but about channeling private investment while maintaining fiscal stability. The difference between these models determines whether a country operates in deficit or surplus. The country’s foreign exchange reserves have surpassed $50 billion, and the government continues to strengthen its financial strategy. An ambitious infrastructure program would offer dual benefits. First, it could support construction and employment, two sectors heavily impacted by the current economic climate. Second, in the long term, such projects would eliminate bottlenecks that currently hinder productivity in transportation, ports, railways, energy, and logistics. These bottlenecks are structural issues, as even countries with world-class natural resources can fail to capitalize on them without efficient infrastructure and logistics systems. This diagnosis aligns with the message conveyed by the International Monetary Fund (IMF). Its Managing Director emphasized that macroeconomic stabilization is only the first step and highlighted infrastructure as one of the essential pillars for Argentina to become a developed economy. She argued that the nation’s vast potential in oil production, mining, and agriculture will only translate into real output, exports, jobs, and development if supported by modern infrastructure, efficient logistics, and predictable rules that encourage long-term investment. This agenda must also include education, human capital formation, respect for the rule of law and property rights, and a financial system capable of converting savings into credit for investment. The case of energy provides a clear illustration of why infrastructure is critical. The expansion of capacity to transport oil from Vaca Muerta has already changed the country’s export profile. The Duplicar Plus pipeline, now operational, has increased the capacity to evacuate oil to the Atlantic from 225,000 to 540,000 barrels per day. Construction is underway on another project aimed at removing bottlenecks in the northern part of the basin, and a subsequent phase would bring the system close to 900,000 barrels per day. Additionally, a new export route is set to open by 2027, connecting the Neuquén basin to the Atlantic coast with a capacity of 550,000 barrels per day.