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Source: Linkedin News
By: Aldo Leporati
For some weary observers the peso’s problems were a sign that Argentina is always just one step from crisis. For others it’s all part of the recovery. People underestimate the complexity of the balancing act that Argentina is carrying out. There will be swings in sentiment and twists in the road because it’s a tricky situation.
Long road ahead it remains to see how the peso’s moves will spill out into the rest of the economy but many of the specific sectors will be unaffected. The overall feeling is that any international investment in Argentina is going to be long term and will face bumps on the way. In most sectors the bullish rational is that industries were starved of investment for so long there is a pentup demand and potential that can now finally be realized by international and local capital.
The investors have started arriving, although more slowly than hoped. The good news is that now, Argentina is on the radar of international investors and there is huge appetite to look at opportunities. This Argentine government has had a very promising start and there are many sectors, in particular energy and infrastructure that require massive investment. Investors need to see sound and responsible economic policies with strong fundamentals, and with that they will have the necessary confidence in the country to make investment decisions, either to set up or buy a company, hire staff and bring technology. As part of the macro normalization, the government is trying to push for tax and labor reforms because the cost of doing business in Argentina is still high and many things must still be done to have a more business-friendly environment.
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