Effects of YPF Nationalization - Research Paper Example

The nationalization has also severed Argentina’s social relations with other countries that threatened to impose stringent political and economic sanctions on Argentina. Nationally, the social effects of the nationalization include an increase in the amount of taxes paid by Argentines (Cassidy, 2012). The government is also restricting currency flight, which is growing at an alarming rate as more and more Argentines lose faith in the country’s economic prospects. As a consequence, Argentines continue to encounter immense restrictions, particularly with regard to making investments.

The Argentine President infuriated Argentina’s allies such as Spain but also won the favor of a massive portion of Argentines who consider the expropriation of Repsol as serving Argentina’s interests. The Argentine government’s decision to wrench control from Repsol continues to instigate fear amongst Argentines, as well as other people in the region. This is largely because YPF is a prominent company, which contributes substantially to the economy of South America. Therefore, other South American countries are bound to be adversely affected by Argentina’s move to nationalize YPF.

As a consequence, these nations are likely to consider the Argentina government as irresponsible with the country’s and region’s wellbeing. . In essence, the nationalization of YPF will cause detrimental effects to the government’s capacity to provide its citizens with proper social services. On the other hand, Argentina is likely to suffer fuel scarcity as a consequence of the nationalization. This is because the country does not have the capacity to explore its vast oil and gas resources.

Oil and gas scarcity will, in turn, result in increased living costs on the people of Argentina. Effects of the Nationalization on society in Argentina The nationalization of YPF serves to move Argentina back to the status of a net energy exporter while at the same time having immense sovereign power over the country’s energy industry, as well as natural resources. This perception towards the effects of YPF’s nationalization on Argentina’s social environment is quite distinct from the former signals, which indicated that the Argentine government was moving towards a wholesome nationalization of the country’s oil and gas resources.

As a consequent, the nation recognized that it its domestic investor pool was quite inadequate, and the country seriously required foreign expertise, as well as foreign investments to enable it tap its energy resources (Romero, 2012). This was especially the case regarding Vaca Muerta’s immense shale oil and gas reserves. In essence, all these moves signify Argentina’s growing appreciation for its sovereignty both socially and economically as the country is no longer afraid to invite a clash with other nations in its fight for its rights.

Reception YPF’s nationalization was warmly welcomed by Argentines who thought that the government could have expropriated 100%, not just a portion of it. Most Argentines believe that the