The national government has stripped the country's INVAP space and nuclear technology institute of US$ 1 billion in funding. The Mauricio Macri administration is currently engaged in a broad cost-cutting exercise aimed at reducing the fiscal deficit.
The funding cuts will affect contracts for satellite, nuclear and radar development projects. INVAP is based in Bariloche, in the Andes mountain area, in Western Argentina.
"I trust in the technical capacity of INVAP, but the contracts that the national government has envisioned with INVAP were from a time of magic there is no money [to fund them]," President Mauricio Macri said Friday during a brief visit to Bariloche.
"It will have a strong impact on Argentina's technological capacity", opposition Senator Miguel Pichetto (Justicialist Party) said Wednesday, questioning the decision.
In June, the International Monetary Fund (IMF) granted Argentina a US$50 billion stand-by loan package aimed at appeasing a currency crisis. In exchange, the Macri government committed to reducing the country's fiscal deficit to 1.7 percent this year and 1.3 percent in 2019.
The government is expected to pursue drastic spending cuts in all sectors of the State with sackings, the prohibition of new hires, and cancellations of public works projects, among other measures which the INVAP has also been subject to, despite its international prestige.
"The INVAP is key to the training of advanced professionals and it positions us in a place of privilege in our continental area," Pichetto stressed, considering the government's decision "dramatic".
Founded in 1970, the INVAP hires some 1,400 employees, mostly scientists and technicians, and partly relies on commercial sales for its funding.
Last year it allocated about 80 percent of its development funding to the national projects and the rest to exports.
It has previously exported nuclear reactors to Australia, Egypt, Algeria and Peru, as well as having built the geostationary satellites Arsat-1 and Arsat-2, which were launched in 2014 and 2015 respectively.
The organism recently secured a contract with the Netherlands for the construction of a research reactor for medicinal use.
On August 1, it plans to ship the Saocom 1A Earth observation satellite for monitoring natural disasters, which is produced in collaboration with the Italian Space Agency (ASI), to a military base in California.
The three-tonne 4.5 by 1.5 metre satellite will form part of the Italo Argentino System of Satellites for Emergency Management (SIASGE).