Despite the economic crisis and the scarcity of fresh funds to finance infrastructure works and alleviate social emergencies, our country registers serious delays in the execution of the loans granted by different international credit organizations during the past decade. A dozen reports from the General Auditor of the Nation (AGN) who also warned that in several cases These sub-executions go hand in hand with significant consulting expenses.
These audits come to light at a time when the new Minister of the Economy, Serge Massapressured by the lack of foreign currency and the fall in reserves of the Central Bank (BCRA), assumes the coordination of relations with the Inter-American Development Bank (IDB)the World Bank (WB) and other multilateral organizations with credits granted to Argentina, a task that previously fell to Gustavo Belizthe former Secretary of Strategic Affairs. It is a million-dollar portfolio of loans with which the Executive Power finances infrastructure, health and support projects for social programs throughout the country.
At the request of the agencies, the AGN is in charge of controlling the financial statements of a large part of their credits. Technical teams produce per year fifty reportsand although they are later approved by the auditors because the accounting balances do not offer objections, the truth is that in most of them there are significant delays in the execution of loans. An irregularity that, as verified by the AGN, is not attributable to a particular jurisdiction, but it is transversal to the different requesting ministries.
There are other striking cases. One of them is the programComprehensive Improvement for Border Settlements”, aimed at improving the habitat in vulnerable border areas of northern Argentina. To do this, in 2017 the then Ministry of the Interior, Public Works and Housing contracted a loan of $25 million, of which 20 million came from Fonplata and the remaining amount from the Argentine State. The AGN detected that, after the second exercise, only 1.3% of the loan (US$325,658) was executed, of which 20% was used to pay consulting expenses ($59,954). Not a penny was allocated to the comprehensive improvement of the habitat or to the domain regularization of the area.
There is more. In 2019, the International Bank for Reconstruction and Development (IBRD) granted the Ministry of Agriculture, Livestock and Fisheries a loan for US$150 million for the program “Comprehensive management of the risks of the agro-industrial system”aimed at adopting risk mitigation and transfer actions and attention to agricultural emergency situations. So far, according to the AGN, 1.16% of the loan has been executedand the deadline for the last disbursement will be in 2024. In consultancy expenses were allocated just over US$210,000.
The examples happen. A credit of US$311 million from the IBRD of the year 2018 to be assigned to the runners program of Northwest highway development only ran on a 17,26%. Another loan, in this case for just over US$20 million, granted by IFAD in 2017 to develop the goat chainswas executed in a 11,4%. Meanwhile, the IBRD credit for US$240 million to boost the supply of renewable energy in rural areas it was only executed in a 29%. The credit had been granted in 2015.
“In the AGN we observe that, in general, the execution of the loans granted by the international credit organizations has a lot of delay”, warned the radical Jesus Rodriguez, president of the Audit, to complete: “In the case of credits for public works, these delays are due, in part, to the delays that these projects may have. Nevertheless, there is also bad planning: there are wallets that they have contracted credits, but when they have to make their contribution as a local counterpart, they realize that it exceeds the ceiling of the expense they have. Then, the disbursement stops.”
These delays in the execution of international loans they are not harmless. Not only because the start-up of the different programs is delayed -which, in general, target the most vulnerable population-, but also because it affects the possibility of obtaining new financing from these sources. In fact, one of the objectives of Massa’s trip to the United States is to unlock the disbursement of loans already granted and obtain more financing in the midst of the current currency crisis.
It doesn’t seem like a simple matter. Two weeks ago, a group of Republican senators sent him a carta to the American president Joe Biden in which they requested that their administration exercise due due diligence (a thorough audit) on any loans given to the given country “its long history of defaulting and anti-growth economic policies” and its association with “rogue regimes around the world,” alluding to Russia and Iran.
“It is evident that the strange foreign policy of our country conspires against the possibility of obtaining more financing from international credits,” Rodríguez ironized.
Beyond the political affiliation of the seven auditors that make up the AGN, the truth is that government officials and opponents agree that the local execution of credits that come from world organizations leaves much to be desired. the official Javier Fernandezpresident of the Public Debt Supervision Commission of the Audit, warns in each of his reports about the high expenses of external consultancy that demand these credits.
Indeed, in a special review that he presented last March, he warned that, out of 17 IDB and IBRD loans contracted between 2016 and 2017, the level of spending on administration and consultancies was 8% on average, when the criteria of the control body indicates that they should be between 1% and 2%.
For his part, Rodríguez warns that many of the credits destined to finance public works present poor planning, since the responsible portfolios do not adjust to the public investment law, which establishes a procedure and mechanism to select investment projects. “Many of the works that are financed with international credits do not have the profitability analysis that justifies it, as has been the case of the Néstor Kirchner and Jorge Cepernic dams, in Santa Cruz”he struck.