Liberalization and Nationalization in South America: A Comparative Analysis of Economics Impact Through Telecommunications and Electricity Sectors

Abstract

To achieve better levels of development, the for of the countries must be strengthened, particularly in strategic sectors such as telecommunications and electricity. By the other hand, the universal access to electricity and telecommunications, are considered nowadays as basic factors of welfare and social equality. With this argumentation, the structural reforms about the 1980s promoted the resizing of State scope and encouraging private-enterprise participation. Over time, the most important criticisms of the economic model adopted during the eighties were its results, which, far from promoting equality, would have caused greater inequity. Then, some countries under populist governments, gone back to active state intervention in the economy, including sectors of public services among others the electrical and telecommunications. This phenomenon, during the last of 90 decade and beginnings of this century led to existence of two groups of countries in South America: by one side, countries with neo-populist governments (Argentina, Bolivia, Brazil, Ecuador, and Venezuela) and, on the other hand, countries that persisted with the reforms adopted during the eighties for to adopt market oriented economies (Chile, Colombia, Paraguay, Peru, and Uruguay), disparagingly named neo liberals by the early. The electrical and telecommunications sectors are considered pillars of the development and basic human right. Taking this on mind, one would expect that in the neo-populist governments, since its speech is based in a strong defense of poor population, should achieve higher levels of welfare than the liberal States, particularly in the infrastructure sectors named above. To prove this, in the present work, by comparing the general economic performance and particularly in both mentioned sectors between 2000 to 2015, through analysis of selected indicators it has been found quantitative evidence that those South American countries that are operating under the market model, have reached a better performance than the other ones. Furthermore, in both sectors under analysis, particularly in the telecommunications, it has been established that the first group countries (with neo-populist governments), the cost of access to services turns out to be more onerous than in those of the second group.