Argentina: Open For Business
Government Reduces Corruption, Rolls Back Foreign Exchange Restrictions, Reduces Taxes on Exports
For fifteen years, Argentina bided its time, waiting for the right moment to take its place in the international economy. But last month Argentina announced that it was open to the world and international investors responded by rushing across the threshold.
The Argentina Business and Investment Forum (ABIF) was a three-day event that drew over 2,000 companies and 400 government representatives from 65 countries to Argentina for the first time.
Argentina set the stage for new investments by striking a deal with U.S. creditors, returning the country to the global bond markets for the first time since 2001. The government is breaking from the past by reducing the corruption that held the country back, rolling back restrictions on buying U.S. dollars and reducing taxes on exports.
The reforms led to the government selling $16.5 billion in bonds, a record amount for an emerging-market sovereign government. Opening the national cash register made it possible for Argentine corporations to sell debt to foreign creditors.
As WPP CEO Martin Sorrell put it, “Argentina is back open for business.”
Excited international suitors have anted up to the tune of more than $4 billion in international debt so far. ABIF saw even greater commitments from global corporations. The high attendance at ABIF highlighted the range of investment opportunities offered in Argentina, including in sectors such as agribusiness, biotechnology, and energy, among others.
Bob Dudley, CEO of BP was there, and now he’s looking to increase investments in Argentina after witnessing the tremendous change taking place in 2016. “I’m really encouraged by what I hear and what I see [in Argentina]. I think there’s a great future here… I’m excited about it,” said Dudley.
Joe Kaeser, CEO of German industrial conglomerate Siemens, signed a letter of intent to participate in up to $5.6 billion of energy, transportation and infrastructure projects in Argentina. “We will help the country to bring it to the level it belongs to,” said Kaeser. Siemens’ investment is looking to add 3,000 jobs, including training 700 young people in new skills.
More than only financial investment, ABIF is about “countries coming together,” Kaeser said. “I’m a happy man today because we can help rebuild the country.”
ABIF was the platform that allowed the for the Undersecretariat for Investment Development and Trade Promotion to meet with global companies big and small chart a course to working within Argentina, such as providing information on business sectors and geographical locations, identifying investment opportunities, delivering personalized assistance at every project stage, and assisting in building partnerships between international investors and local companies.
ABIF marked Argentina’s return to the world of business. This was my country’s opportunity to show the world, local and international companies that Argentina is committed to transparency and a clear path forward for investors.
“This is a time of enormous enthusiasm, of historic transformation in the world,” said Cabinet Chief Marcos Peña. He sees Argentina’s economic rebirth as an inspiration to other countries in its forward-looking enthusiasm for the country’s possibilities. “This gives us great opportunities to face global challenges that previously seemed so distant,” said Peña.
“It reminds me of engines just starting up,” said BP’s Dudley.
With its past in the rear view mirror, Argentina is ready to drive into the future.
Juan Procaccini is president of Argentina’s Investment and Trade Promotion Agency.
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