Aerolíneas Argentinas costs more than the security plan

The central government has decided to send the national gendarmerie to help with the Buenos Aires metropolitan area security crisis. It is an opportunistic measure which leads to neglect the objectives of this semi-militar force, as well as overlapping functions with the local police. A genuine way to truly improve the security of all the citizens (not only the people of Buenos Aires) is to stop public overspending in subsidies and to transfer those funds to the provincial governments for them to improve the local police.

The gendarmerie is a mixed national security force since it helps with national defense as well with internal matters. It’s in this context that 4,500 members have been assigned to enforce security in the Buenos Aires Metropolitan Area.  The measure adopted is clearly opportunistic and lacks strategic thinking since the gendarmerie is a force financed with national taxes and now will be destined to help only one city, a clear discrimination against the rest of the country who is also suffering from the same insecurity crisis.

The institutional order should be respected, something clearly not taken into account by the recent decision, since a national force is operating on the provincial police jurisdiction. A more effective strategy would imply reducing fiscal centralism by increasing the volume of automatic fund transferences to the provinces in order to improve the quality of their police.

There is no need to make great efforts to generate the funds required to improve the provincial police forces. The following example states this point:

·  In 2013, $3.120 million were destined to subsidize Aerolíneas Argentinas.

·  If those resources were distributed between provinces according to the size of their population then the Province of Buenos Aires would receive $1.310 million.

· This would imply a similar cost as that of the current Buenos Aires gendarmerie program which requires $1,263 millions in order to carry it out.

The previous example puts in evidence that merely reducing Aerolíneas Argentinas wasteful spending would release the resources required to solve the insecurity crisis. The Province of Buenos Aires would receive a similar amount as that destined to the gendarmerie aimed to help in the security crisis. This would be achieved without the current overlapping of functions between the Buenos Aires police and the gendarmerie, which would let it focus on its functions which are guarding the frontier and guaranteeing national security. Another positive aspect of the proposed policy is that the rest of the provinces would also be benefited.

Since the country adopts a federal system (according to its constitution), most of the functions of government are transferred to the provinces. The fiscal centralism of the last decade contradicts this mandate. The population has never paid higher taxes, nonetheless the quality and quantity of public services has not improved. The centralization has led to carelessness in the provision of fundamental services (like security) and wasteful spending of public resources on activities of low and sometimes null social returns.

Better quality, lower prices and more coverage could be achieved if the subsidies directed to Aerolíneas Argentinas were to be eliminated in conjunction with an improvement in the regulation in the airlines sector. Small subsidies directed to non profitable routes would be sufficient to improve coverage. In parallel, relocating public funds wasted on Aerolíneas Argentinas, the provinces would be able to improve their police forces. For example, this measure could lead to a 12% budget increase in the provincial police force of Buenos Aires and an 8% budget increase in the police forces of Santa Fe and Córdoba. Better security and increased air coverage would mean an increase in the welfare of the population and more production in the interior of the country.

The insecurity problem is a clear effect of the low quality in government management. Something similar happens with the current state of affairs in the provision of health and education, as well as infrastructure. The current situation is not solved by overlapping national and provincial roles of governments, like it was done by sending the gendarmerie to carry out the tasks assigned to the Buenos Aires police in order to solve the insecurity problem. A real solution would imply eliminating the institutional disorder created by the centralization of fiscal resources. The first step to achieve this objective would mean reducing the central government’s wasteful spending which clearly manifests in the many existing economic subsidies.