Continuing the programme of economic reforms started in 1989, president Menem's last full year of government before elections in 1999 will be characterized by the privatization of most publicly held companies and the selling of shareholdings in those privatized companies in which the government holds a participation, principally in the electric and banking sectors.
Among the most important companies to be privatized are the National Mortgage Bank (Banco Hipotecario Nacional) and some nuclear energy stations. The government expects to obtain around US$3 billion for the sale of the National Mortgage Bank, but a substantial part of the funds will go to a trust fund and not the national budget. The privatization of Banco de la Nación Argentina was also announced in 1997, but it seems increasingly unlikely because of political and economic pressure. The government's interest in Caja Nacional de Ahorro y Seguro may also be offered for sale.
The most important privatizations, from an economic and political point of view, that remain undecided, are the DNI Public Tender (Licitación de los Documentos Nacionales de Identidad), which will grant the concession to implement the immigration control and personal identification system; and the PCS (Personal Communication Service). Both have been delayed after national and international pressure, which questioned the legality and transparency of the procedures. Privatization of the 33 airports, on the other hand, is reaching a final decision, as three of the four bidders were summoned to improve their offers on January 23 1998.
Privatization on a provincial and national level is set to make 1998 another attractive year for local and foreign investors. Economic reform continues forcefully, despite criticisms of the transformation process and the difficulties of establishing an emerging market where investments and true competition are legally protected.
Juan Pablo Alvarado