What opportunities can Argentina offer to foreign investors?
Argentina offers an extraordinary investment opportunity, with an economy that is undergoing its sixth consecutive year of steady growth at an average annual rate of 8.8%, placing the country among the fastest growing economies worldwide.
This economic expansion is based on solid macroeconomic fundamentals: twin surpluses (fiscal and current account balances), prudent monetary policy and accumulation of foreign exchange reserves, a flexible and competitive exchange rate, the highest investment and saving levels (as a percentage of GDP) in 30 years, employment growth, and rising exports and foreign direct investment.
This pattern of sustainable and socially inclusive economic growth has resulted in the revaluation of the structural factors that give Argentina a competitive edge: skilled human resources, a long industrial tradition and a vibrant cultural life.
In addition, as a full member of MERCOSUR, Argentina offers tariff-free access to a large and growing regional market, providing investors with an additional incentive to locate in Argentina.
In this context, a variety of activities emerge as attractive investment opportunities. These activities are by no means limited to the primary sector, but extend to the industrial and service sectors, and go beyond our country’s ‘traditional’ activities (food, basic metals, chemistry, leather, wood and textiles) and their value chains (automobiles, machinery, plastics, furniture, clothing). They also include a wide array of new products and sectors, whether knowledge-based or design-based, which encompass products as different as software, biotechnology, biofuels, tourism and real estate development, and television content for export, among others.
What are the National Investment Development Agency’s (ProsperAr’s) main objectives and competencies?
PropserAr is an institution created to attract and facilitate foreign investment and to strengthen the local productive capacity. The agency is part of the public institutional network geared towards the design and implementation of instruments and programmes that enhance the country’s competitiveness, innovation, research and development capabilities, and the internationalisation of its local companies.
ProsperAr articulates public policies in an environment of public-private collaboration. To this end, we have developed five main programmes to: provide services to investors, contribute to the optimisation of Argentina’s investment and innovation environment, attract and generate investment, communicate Argentina’s advantages, and promote the creation, growth and internationalisation of local companies.
What are the results so far?
During its first year of operation (2007), ProsperAr has facilitated investments for $6.1bn, responded to more than 750 inquiries from local and foreign investors, performed 16 investment promotion missions, and participated in more than 40 events with the business community.
From its inception, the agency has been the country’s strategic gateway for international investors, and an organisation that is experiencing a growing demand from local entrepreneurs who contact ProsperAr for assistance in the decision-making and investment development processes. In this context it is worth mentioning that foreign direct investment has increased by more than 13% in 2007, while gross fixed capital formation has increased by 14% during the same period. The data available for the first quarter of 2008 reveal that this trend continues unabated. Investment has continued to grow with gross fixed capital formation increasing by 20% in the first quarter of 2008.
What is ProsperAr’s strategy for the future?
ProsperAr will continue to promote Argentina as an investment destination and to contribute to the country’s strategic positioning as a differential and attractive investment option, as well as with its role as an investment facilitator.
Moreover, the Agency intends to further develop additional investment promotion/ development mechanisms, among which there will be financial instruments aimed at improving financial access for productive investments, providing funds for entrepreneurs (a seed capital fund and a venture capital fund) and enhancing growth prospects for pioneer and innovative companies.