Only 2% of the army’s budget is destined to investments - IDESA

Informe Nº: 06/02/2018

Only 2% of the army’s budget is destined to investments

The odds of finding the ARA San Juan submarine’s crew alive are vanishing. If no miracle happens, experts say that the ship fate would have been tragic. The efforts made by Argentines and the solidarity of specialized military and civilian forces of many countries were very much appreciated and heart-touching. Leaving differences among them aside, they deployed resources and logistical efforts to collaborate in the search.

The unfortunate fate of the military ship leads to reflection and to a critical analysis of the armed forces’ situation. Management failures and weaknesses are very easy to see and it is natural to tend to relate them with the deep crisis in which the armed forces fell after the last military coup.

Not invalidating this argument, it is useful to look at the way in which the resources in the armed forces are administered. According to the 2018 Budget, the armed forces will have a total budget of AR$21 billion, which will be distributed as follows:

  • 88% will be used to pay salaries.
  • Another 10% will be allocated to the purchase of supplies.
  • Only 2% will be applied to investments of which only half will be in machinery and equipment.

These data are quite suggestive about the way the armed forces use their funds. They operate as an institution focused on paying wages. The budget allocated to investments is very limited and the share destined to machinery and equipment, which is the most related to technological modernization, is negligible (1% of the budget). Under these conditions that are opposed to a modern military force –in USA, for example, wages represent only a third of military spending– the current limitations and weaknesses showed in logistic and military power should not be taken as a surprise.

Unfortunately this situation is not the exception but the rule within the Argentine public sector. Due to the oversized staff and higher salary levels that the public sector pays in comparison with the private sector for similar positions and qualifications, state agencies end up allocating most of their budgets to salary expenses. The counterpart is the scarcity of inputs and the postponement of investments. For example, it is common that in public education system the expenditure on personnel (teachers and administrative personnel) represents 90% of the budget, resulting in chronic lack of teaching material and investment in building and technological updates are generally financed from donations or not done at all. A similar situation can be seen in the public health system where wages also represent more than 90% of the budget, coexisting with the chronic lack of supplies and modern equipment.

Prioritizing personnel and their salaries is the main factor that explains the inability of the state to provide good services. An organization so focused on its employees, to the point of neglecting inputs and investment, cannot offer good quality services. Personnel without inputs are unproductive and the scarce of investment means that there is no innovation and adoption of new and good practices. The situation is not solved with more funds. Budget increases only contribute to the enormous pressure of many people to be hired by the state, which leads to prioritizing increases in the number of employees instead of their professionalism.

The members of the submarine’s crew are more victims than heroes. Their disappearance was not an act of courage for supreme ideals but a result of a routine trip that ended in tragedy due to an environment marked by inoperability, lack of planning and obsolete equipment. It is not an exceptional situation but an extreme and visible case of the damage that the state’s malfunction generates daily. Many more and anonymous are the citizen victims of the consequences of a public sector captured by vested interests.

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