What is the role of the private sector in the city’s infrastructure development through public-private partnerships (PPPs)?
MARTÍN MURA: A decade ago, Buenos Aires invested around 5-6% of its budget on infrastructure projects. Today, through austerity measures and improvements in public spending, the city can afford to invest more than 20% on infrastructure works. We are experiencing the continuity of a long-term project, which is now beginning to bear fruit, and is transforming the city.
At the end of 2017 the PPP law announced by the national government came into effect in the capital, with some minor modifications to adapt it to the particularities of the city. Currently, all large-scale infrastructure projects in Buenos Aires have the possibility of using a PPP financing scheme.
Collaboration between sectors through such projects is also very varied. The most important of these could be our waste-to-energy project, which combines inputs from the energy and environmental sectors, as well as the economy.
How is transparency in public spending being promoted and how would you assess current levels of transparency?
MURA: The city is a pioneer in the control of transparency. According to our current city laws, all purchases are published online, with the exception of public works, which will be made available in the future. The budget of the city is increasing, and therefore we should insist on the complete transparency of our accounts, proactively providing information for anyone who wants to know how and when public funds are used.
However, it should be noted that the statistics and census management of the city has been the only pillar of transparency during the past decade until 2015, and was the central point of reference until the National Institute of Statistics and Census was re-established. Nonetheless, as recent developments show, we are committed to ensuring transparency in all areas of the government of Buenos Aires.
What measures are in place to achieve the city’s fiscal policy goals?
MURA: Buenos Aires does not take debt to cover current expenses, only to finance large-scale infrastructure works such as the Paseo del Bajo or the Villa Olímpica.
Due to Argentina’s long-standing market closure up until the end of 2015, access to multilateral financing was not an option. The majority of the city’s debt – 95% – was in dollars, while tax collection was in Argentine pesos. Following the reopening of the country to international markets, we have now achieved a currency mix that is 50/50 dollars and pesos.
Alongside other indicators, the city is fiscally sustainable, without default, and rated AAA, and thus we have been able to issue a 10-year bond in pesos, the only example in the country.
All this is combined with a plan to gradually decrease taxes, ratified by adherence to the fiscal consensus led by the national government. By 2022 the city of Buenos Aires will have reduced its fiscal resources by 11%, which will significantly improve the overall competitiveness of our industries and productive sectors.
What efforts are being made to enhance the impact of knowledge-based services (KBS) on economic development?
MURA: Professional services, in general, currently represents 96% of the city’s total exports, and there is a clear commitment particularly to KBS in Buenos Aires,. Looking to the future, the development of the knowledge is focused on the education of our younger generations. Through the Ministry of Education, we have incorporated innovation and technology as a vital part of the curriculum to ensure the future development of our economy.
Aside from generating the necessary technological and programming knowledge for the digital world that is already becoming a reality, we are working to strengthen our entrepreneurial spirit, encouraging and facilitating the creation of companies in the coming decades.
Today, financing is the biggest hurdle for the entrepreneur and we are confident that as the macroeconomic normalisation of the country materialises, better mechanisms of economical and long-term financing will emerge.
On a separate note, the city’s investment agency provides the necessary tools for KBS start-ups to reach new clients, both domestically and internationally, and to find the best financing mechanisms available.
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