Argentina to Return Some Industries to Private Sector

DAVOS, Switzerland — Argentina plans to begin returning petrochemical and steel companies to the private sector this year, Undersecretary of Finance Juan Sommer said today.

He said a list of companies will be issued “in the next few days” in Argentina.

Sommer said the planned sale to private owners will have a “profound effect” on the overall industrial structure of the country.

He told a meeting of businessmen in this Swiss town that the privatization will also shift some of the country’s foreign debt from the public to the private sector.

At present, Sommer said, almost 90% of Argentina’s $48-billion debt is in the hands of the public sector. He declined to estimate the proceeds of the sales.

Ubaldo Aguirre, Argentina’s financial representative in Europe, said more than a dozen companies could be involved.

Aguirre said some mining companies related to the steel industry also may be sold to the private sector.

The government is now in the process of presenting a budget to the Argentine congress for approval. Sommer said some of the proceeds from the sell-offs will be devoted to health and education.

He said the expansion of the private sector will require the government to restructure incentives in its tax system, but he did not give further details.

Referring to future debt reschedulings, Sommer said a country like Argentina must be given enough funding to spur growth rather than just enough to service debt.