On the 28th and the 29th of October, Cartagena in Colombia will hold the Ibero-American Summit. This summit of the head of states may be a good chance for Mauricio Macri, Argentina’s president, to boost the renowned stability of his country.
After years of economic turmoil, the election of Mauricio Macri in 2015 promised a more stable government in Argentina and a more inviting country for business and foreign investors. Macri always underlined his liberal tendencies and support for free market.
Ahead of his visit to the EU in July this year, Macri stated his beliefs in free market: “We believe in and working toward integration, to dynamize the Mercosur [South America’s trading block], to converge with the Pacific Alliance [another South American trading block], so that the process with the European Union progresses, because we believe that the future lies in the creation of new networks and not by raising walls”.
Such a statement was very welcomed around the world, especially after years of domination by the Kirchner couple and their protectionist policies. Macri, helped by an important US strategic consultancy, has been promoting his plans to spur the Argentinian economy and to implement his reforms.
However, despite Macri’s promises of liberalizations and open market, there is a sector where his actions went in the opposite direction: telecommunication.
The main media group in Argentina is Grupo Clarin. The group was strongly opposed by the Kirchners during their mandates. In particular, two laws were aimed at Grupo Clarin with the undeclared aim to block any further expansion of the group, which owns the largest cable operator in the country, plus several other media assets, from TV to printed press). The Media Law of 2009 and the Telecommunications Law of 2014 were the two most problematic piece of legislations, as they forbade convergence between difference services.
Perhaps as an anti-Kirchner reflection, Macri was, even before taking office, a supporter of the Grupo Clarin. As soon as he held office, Macri pushed for regulation of the sector. Surely it was a long-awaited law and was clearly beneficial for Clarin. However, the law didn’t pass the Congress of the Argentine Nation.
In spite of this setback, Macri issued a Necessity and Urgency Decree (or DNU), a special presidential decree that becomes almost immediately law, bypassing the Congress of the Argentine Nation. The DNU 267/2015 modifies the legislative framework in the sector.
The new law bans mobile and fixed telephone companies from entering Pay-TV market for a period of two years (extendable to three), forbids satellite providers (but not cable) from providing bundle offers of cable TV, telephony, and internet and exempts cable providers (but not satellite providers) from complying with the previous Media Law obligations.
Victor Moreno Catena, former Secretary General of the Conference of Ministers of Justice of Ibero-American Countries, described the law as “an absolutely protectionist measure promoted by a Government which claims to be liberal and intends to attract foreign investments by investing significant resources, both material and personal, to convince investors”.
The law is a huge gift for Clarin which is already present in all three sectors of telecommunications, while is a problem for other providers, especially foreign ones. The main group hit by this new law is the Spanish giant Telefonica but also the Mexican group America Movil and the US group AT&T are suffering from it. These companies already operate in Argentina, but under the new law, they can’t offer the whole service package that they would normally offers in other countries.
With this law, Macri has raised a silent barrier which blocks the entry of foreign competition in the telecommunication sector and protects the Group Clarin. Plus, it also contradicts the main principles of Macri’s liberal policies.
Macri is only waiting for a new government to be formed in Spain to visit the country. In Spain he will most likely once again promote is liberal policies in order to attract foreign investors. However, he may not found an audience willing to listen.