Argentina may require research by privatised firms

Send to a friend

The details you provide on this page will not be used to send unsolicited email, and will not be sold to a 3rd party. See privacy policy.

[BUENOS AIRES] Argentinean public service companies will be required to carry out their own research and development, rather than rely on technical knowledge imported from abroad, if a proposed law presented to the country’s Congress last month is approved.

Under the proposal, every privately held company in the public sector would have to build their own research teams and laboratories for science and technology development, to make up for their current use of foreign technology.

“Our idea is to correct the way the privatisations were carried out,” says Lilia Puig de Stubrin, head of the Argentinean parliament’s science and technology committee.

Until the presidency of Carlos Menem, which began in 1989, all public services were supplied by state-owned companies. These maintained their own research laboratories and skilled scientists.

In November 1990, full-scale privatisation began, and the largest state companies were sold to foreign buyers. The production and distribution of petroleum and natural gas, as well as water, electricity and telecommunications suppliers all went to private hands, followed by trains, airlines and health care. Their research divisions were subsequently closed down as the privatised companies sourced new technology from overseas.

Now, two congressional committees — one on science and technology, and the other on public works — have each given their approval to a draft law that asks the government’s executive branch to require these companies to start new research and development projects in the country when their contracts come up for renewal, either this year or next. Backing of the cross-party committee suggests wider political support is likely.

“I worked in the public sector at the time the privatisations started, and saw how all those research laboratories were shut down,” explains Puig de Stubrin. “Brazil handled it in a different way: they invested some of the funds obtained in the privatisations to maintain research divisions in the country, and made the new service companies invest in them.”

“Our country must have a policy to regain its technological capabilities and its innovation system,” she adds. “This is a good time to do it, as most contracts are up for renewal. Of course, we would give these companies some kind of compensation in the form of tax relief.”

The proposed bill is now waiting, with many others, to be voted on in the next few months by the Congress’s lower house. If approved, it would then need to be passed by the Senate and signed by the government to become law.