Since President Mauricio Macri’s election in 2015, the global community has been closely watching South America’s second largest economy for signs of stability and economic growth.
Positive signs persist in this first half of 2017. The OECD June 2017 economic forecast indicates that Argentina has exited recession and points to wide-ranging structural reforms as a boost to inclusive growth.[1] Additionally, Argentina recently received $9.75bn in bids from investors for a $2.74bn century bond placement with an 8% yield.[2] The Macri government intends to continue to invest a great deal of time and effort in reintroducing Argentina to the world with a view to fomenting foreign investment having already visited the governments of China and US, and is scheduled to meet with German business leaders and politicians later this year.
On a recent trip to Buenos Aires, Argentina, Al Cardenas, Partner at Squire Patton Boggs and the Chair of the firm’s Latin America practice, Pedro Gamundi, Santo Domingo Partner, and Loana Martín, Washington DC associate, held a series of meetings with a range of government officials and executives from Argentina’s major corporations. Overall, the sentiment was highly optimistic as recent reforms and export activity show signs of taking hold and confidence in the Macri Administration’s ability to turn the country around runs hot. The Agencia Argentina de Inversiones y Comercio Internacional reiterated that the Macri Administration will continue to promote investment in agribusiness, as well as the energy, infrastructure and mining sectors. The Administration’s commitment is evidenced by the recent auction of concessions at Vaca Muerta, the Ministry of Energy and Mines’ recent publication of draft rules that allow renewable energy companies to enter into power purchase agreements with private offtakers, as well as the planning of another renewable energy auction in October 2017 (although the proposed month is not certain).
However, the road to recovery is long and “trust-issues” continue to loom but we will continue to monitor developments in the region.
[1] OECD Argentina – Economic forecast summary (June 2017). http://www.oecd.org/eco/outlook/argentina-economic-forecast-summary.htm?_sm_au_=iVVWk087Vr0808pN
[2] Financial Times “The rush for Argentina’s 100-year bond points to an investment bubble” https://www.ft.com/content/0c73b8f4-5670-11e7-9fed-c19e2700005f
Our Latin American practice assists clients throughout the world by providing both outbound and inbound legal and public policy services to and from Latin America. Argentina is one of the firm’s dedicated 9 Country Desks, which consist of lawyers who have intimate knowledge of the local environment and understand the unique aspect of distribution networks, government procedures, employee benefit plans, environmental law, and tax, customs and legal systems. In addition to Argentina, the Country Desks include Brazil, Colombia, Chile, Cuba, Mexico, Panama/Central America, Peru and Venezuela as well as assistance from throughout the more than 30 nations comprising Latin America.
As a full-service firm with a nearly 30 year history in Latin America, we have the depth and breadth of capabilities and experience to offer guidance doing business in Argentina, both inbound and outbound. Please get in touch with Al, Pedro or Loana to learn more about Squire Patton Boggs’ service.
