Leonardo Perez Bustos / Director of the consulting firm Neodelfos

The World Bank labeled the Tierra del Fuego regime a “failed industrial policy,” questioned its fiscal cost, and cast doubt on its impact on productive development. However, behind this technical diagnosis lies a much deeper debate: can the future of Argentina’s far south be defined by an economic logic that ignores its strategic and geopolitical value?

The simultaneous implementation of World Bank recommendations, International Monetary Fund demands, and President Javier Milei's policy of indiscriminate import liberalization create a high-risk scenario for Tierra del Fuego. Under the guise of correcting economic "distortions," a converging pressure is consolidating, jeopardizing not only Tierra del Fuego's industrial sub-regime but also employment, productive sustainability, and Argentina's strategic presence in the far south.

It is striking that these organizations so severely criticize the Tierra del Fuego regime while failing to mention international experiences where states maintain far more aggressive industrial promotion policies. From the United States' massive subsidies to its technology industry, to China's state planning, to the European Union's regional incentives, or South Korea's development model, the pattern is clear: no major power has left its development to the free market. However, these same instruments are labeled as "distortive" when applied in peripheral economies.

This double standard becomes even more evident when considering the case of the United Kingdom in the Malvina Islands. There, it maintains an illegitimate presence through multi-billion dollar military investment, guaranteeing control of a disputed territory and unilaterally managing strategic resources such as fishing and hydrocarbon exploration. Faced with this scheme—which combines subsidies, a strong state presence, and illegal control of resources—neither the World Bank nor the IMF raises any objections. In this case, their silence is also a form of political positioning.

The World Bank's recent pronouncements leave no room for ambiguity. The organization characterizes the Tierra del Fuego regime as a "failed industrial policy," questions its fiscal cost, and maintains that it has not generated substantial improvements in productivity or technological development. The problem lies in constructing a critique based on an entirely biased approach.

The report starts from a narrow premise: analyzing Tierra del Fuego solely through parameters of economic efficiency. But Tierra del Fuego is not just another industrial hub. It is a strategic territory. The document itself acknowledges—albeit tangentially—that the regime was designed to leverage its geographic location, promote population growth, and generate employment. In other words, it admits that its objective was never solely productive; it was, above all, geopolitical.

In fact, if we look closely at the period before the implementation of Law 19640, back in 1970 the population of the Argentine side of Tierra del Fuego was 13,527, while on the Chilean side it was 5,309. After 55 years, under the economic promotion regime and the industrial sub-regime, the Argentine side has 200,000 inhabitants, representing a growth of 1,378%, while the Chilean side has 8,500 inhabitants with a growth of 60%.

The objective pursued by the special economic regime was clear and in that sense it was absolutely efficient.

However, this component is precisely what disappears from the technical analysis of the IMF and the World Bank. Because when this variable is eliminated, the result is predictable: the system appears inefficient. But this conclusion doesn't stem from an error in the data, but rather from a prior decision about which variables to consider and which to omit.

Meanwhile, the IMF's demands are moving in the same direction: reducing tax exemptions, cutting tax expenditures, and reviewing the benefits associated with the Tierra del Fuego tax regime. The convergence of both positions is no coincidence. It creates a framework of international pressure that is pushing for the gradual dismantling of a system that allowed the population and sustenance of the far south of Argentina for more than 50 years.

This framework also cannot overlook a structural element of the global order: the historic strategic alliance between the United States and the United Kingdom, which has shaped a significant portion of geopolitical decisions in the West over the past few decades. This relationship is directly linked to the functioning of organizations such as the International Monetary Fund and the World Bank, where the United States wields decisive influence and veto power. In this context, it is difficult to consider it a coincidence that the recommendations and impositions of these organizations align with the strategic interests of the major powers in the South Atlantic. The orientation of their analyses is not neutral; it reflects a global power structure where economics and geopolitics operate in a coordinated manner.

The question then moves beyond the technical realm and into the political sphere. What happens if the regime weakens without an alternative to sustain economic activity? The answer is well-known: a drop in production, job losses, internal migration, and ultimately, depopulation. And depopulation in Tierra del Fuego is not a neutral fact. It represents a redefinition of Argentina's territorial balance.

Less than 600 kilometers from the Malvina Islands and in a key area for Antarctic projection, any decline in population density directly impacts the country's sovereign capacity. In this context, maintaining a population is not an economic distortion, but a strategic decision.

The World Bank argues that companies survive thanks to government transfers, not productivity improvements. This may be a biased interpretation. But it overlooks a crucial dimension: these transfers don't just sustain businesses; they sustain the population, infrastructure, and development in a remote territory. And sustaining the population in Tierra del Fuego is not a design flaw; it's a matter of state policy.

Reducing the debate to whether the system is expensive or inefficient ignores its original purpose. Because when the economy in this case is analyzed without geopolitics, decisions cease to be strategic and become functional to interests that don't necessarily align with national interests.

In Tierra del Fuego, for the Fuegians that margin of error does not exist and what is at stake is not just a sub-industrial regime, it is the Argentine presence in the south of the world.