2024-01-01 07:05:00
In 2011, the birth certificate for the Investment Contracts was issued. These, in short, grant tax shields in exchange for investments in machines, infrastructure and similar for the country, which go hand in hand with greater generation of labor.
Every government and every minister in the sector since then has used these and the amount subscribed as an irrefutable sign that this or that administration has been effective in attracting new investments for the country. On August 1, 2015, it was said that $1,949 million had been generated so far this year. In June 2019, it was mentioned that since December 2017, $1,405 million in investment contracts had been concluded. Later, a year ago, it was mentioned that in 18 months of government, $7,235 million had been signed in these documents. That is, adding only these values, there would be at least $10.5 billion in investment contracts between 2015 and 2022.
Intuitively, these values should be reflected in the stock of physical capital of the economy, in an increase of this over time. The national accounts allow us to measure this variable through the Gross Fixed Capital Formation (FBKF) and what is appropriate here is to see what the numbers indicate.
The figures reflect that the FBKF for the years 2014, 2019 and 2022 were $27.7, $26.9 and $24.5 billion, respectively. Now, if we see these values as a percentage of GDP, the trend does not differ. The FBKF begins in 2014 with 27.2% of GDP, decreases in 2019 to 24.9% and reaches its lowest value in 2022 with 21.3%. This clearly indicates that investment in physical capital, far from growing, has decreased from 2014 to 2022, even despite the gale of investment contracts.
The investment contracts apparently have not generated what was expected, however, the State has surely collected less taxes from each of the beneficiaries of these contracts. This is something that needs to be reviewed.
#Investment #Contracts #Illusion