Zombie Firms Cost Billions | Empresas zombi cuestan miles de millones

By Erbol:

Zombie Companies and the ‘Industrialization Scam’ Wasted US$2.595 Billion

Lupo presented the figures of the “waste.”

The government presented on Monday the figures of what it called the “great waste” and “corruption” of MAS governments in initiatives such as the creation of state-owned companies that ended up bankrupt, becoming “zombies,” and the “scam” of the industrialization promised by the blue party.

Minister José Luis Lupo said that the total amount of this waste calculated so far is US$2.595 billion, of which US$1.463 billion corresponds to unviable or bankrupt public companies, while US$1.132 billion are losses from industrial plants that never operated.

He explained that this corruption accounts for part of the depletion of the Central Bank’s International Reserves, since the institution financed projects that ultimately resulted in losses.

Lupo said that with the squandered resources it would have been possible to build 30 fourth-level hospitals, around four to five thousand kilometers of highways, 700 to 900 mega educational units, or 30 gas exploration wells.

According to Lupo, MAS governments increased the number of state-owned companies to 67, but only three are profitable: YPFB, ENDE, and Comibol. He noted that these three were inherited by MAS from previous administrations.

Damage to Companies

Lupo detailed that in state-owned companies that have already closed, such as the Ecebol cement company, the Army construction company, Enatex, and Boltur, losses of US$122 million have already been recorded.

As for the “zombie” companies, damage totaling US$1.294 billion has been calculated in ventures such as the San Buenaventura Sugar Mill, Lithium Yacimientos, the Hydrocarbons Industrialization Company, Yacana, and Quipus.

In addition, the previous government invested US$91.5 million in initiatives related to chemistry, pharmaceuticals, coca, and ecological oils.

The total in this area amounts to US$1.463 billion.

Damage from Industrialization

The government denounced that the “industrialization scam” caused US$1.132 billion in economic damage due to 60 unviable plants.

“What are these plants? They are in biofuels, construction and manufacturing, fertilizers and agro-inputs, pharmaceutical industry, lithium, mining, basic chemistry, and food. A large part of these activities can be carried out by the private sector, but the State created a narrative to be able to loot the country. These are issues such as potato chip plants, soy, quinoa, rice, cereals, and so on,” he stated.

What Will Be Done?

Lupo announced that the “tap” on these economic losses will be shut off and that every cent spent will be audited.

“For this, a fiscal reengineering is necessary to stop the hemorrhaging of these resources, restructure public companies, guarantee fiscal viability, and obviously carry out an absolutely responsible and serious audit in order to launch a rigorous investigation and determine who authorized these investments without any feasibility,” he explained.

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