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#CouncilARG 2019 Recap: Argentina – Economic and Political Perspectives

Felipe Solá. (Matías Baglietto/Guillermo Llamos)

Congressman Felipe Solá. (Matías Baglietto/Guillermo Llamos)

December 03, 2019



Jorge Luis Di Fiori of the Chamber of Commerce and Services of Argentina opened AS/COA’s sixteenth annual Latin American Cities Conference in Buenos Aires by stressing the need for ongoing training in the labor force, as well as the fact that development requires solidifying institutions, as well as revitalizing a culture of work and ethical values.

AS/COA President and CEO Susan Segal’s remarks emphasized her unconditional dedication to Argentina dating back to 1983. She applauded the institutional transition taking place in the country, noting it demonstrates the strength of its democracy. The energy sector with Vaca Muerta—as well as the technology and services, agriculture, mining, and industry sectors—create opportunities for investment and employments. These sectors also open the door to entrepreneurial innovation and employment in SMEs, which are fundamental for Argentine growth. Segal also noted that Council of the Americas counts in its membership 240 companies from around the world, including Argentina, Europe, and the United States, and representing various productive sectors. Council of the Americas is, has been, and will always be a friend to Argentina, she said. 

Mayor of the City of Buenos Aires Horacio Rodríguez Larreta said that, with a reelection victory behind him, his government will keep working together with both the government of the Buenos Aires province and the national government. He also spoke about his city’s accomplishments, which have been recognized by the fact that, for the fifth year in a row, The Economist has named it the best city to live in in Latin America. Rodríguez Larreta said he will continue his work to transform the capital into an attractive site for investment. 

Felipe Solá, national congressman for Buenos Aires province and potential future foreign affairs minister of Argentina in the incoming government of Alberto Fernández, discussed Argentina’s position in Latin America’s geopolitical context. He said that the new government wants to participate in Mercosur in order to “debate, listen to, and respect the other governments.” For the deputy, Latin American unity is of greater importance than disputes over countries such as Bolivia or Venezuela. On the subject of Argentina’s economy, he said that foreign trade will return to the foreign affairs ministry, stressing that ambassadors are helpful in this area because trade is not just about statistics but also the strong support of the private sector.

The conference happened to occur on the same day that the Trump administration in Washington announced impending steel tariffs against Argentina and Brazil. In that context, Segal and McLarty Associates’ Nelson Cunningham, who also served as a special adviser on Western Hemisphere Affairs to former U.S. President Bill Clinton, discussed how the U.S.-China trade war affects other countries—Argentina included. "We have to understand everything Trump does in the context of the election that will be held 11 months from now,” said Cunningham, noting that Trump is seeking to show American farmers he is protecting them from China’s trade policies. Cunningham and Segal also discussed not only the U.S. impeachment process but the race for the Democratic nomination, with Cunningham noting there is a healthy battle between the left and center-left in the Democratic Party and that voters will make sensible choices during elections. 

In a panel on technology and investment in Argentina, SoftBank’s Andy Freire moderated a panel with MercadoLibre’s Sean Summers and SAP’s Claudio Muruzabal. Freire talked about unicorns, defined as privately held companies with a value of more than $1 billion, adding that we’ve seen 20 unicorns in the region in recent years and six of them were from Argentina. Summers said that a 2003 Knowledge Economy Law—established during the government of Néstor Kirchner and renewed by succeeding administrations—helped Argentina to do contracting with a regional and global view. Muruzabal, who said that the creativity of the professional Argentine surpasses that of other regions, noted that, still, for there to be more companies like MercadoLibre there is a great deal more work to do, including training staff to cover positions. 

Next up, Governor of the Province of Neuquén Omar Gutiérrez spoke of a strategy to secure public and private investment, saying that those who opted to sign contracts for 38 areas of Vaca Muerta did so because of the confidence they had in the stability and internationally competitive rules of the game. He forecast that, from 2023–2024, Vaca Muerta can produce roughly $26 billion in oil and gas and said new infrastructure projects are needed. "With gas we have to penetrate new markets…but today we have a bottleneck, and we need to take a qualitative and quantitative jump,” he said. 

In the second panel of the day, CIPPEC’s Julia Pomares moderated a panel with National Senator-elect for the Buenos Aires province Jorge Taiana and National Congressman for Buenos Aires province José Ignacio de Mendiguren about the future of Argentina, in which participants discussed the challenge of breaking a cycle of crisis, even amid what Taiana described as a bleak global economic outlook. He added that, to improve the lives of Argentines, it’s important to revitalize domestic consumption and boost exports. Meanwhile, the congressman said that macroeconomic stability is needed, adding that what Argentina sells to the world is worth little while what it buys is worth a great deal, feeding the cycle of crisis.

In the close of the conference, Argentine Treasury Minister Hernán Lacunza spoke of Argentina’s monetary policy of the last few years, saying that the most important legacy of the Macri government is the institutional pillars that were built on the economic front, noting that difficult measures—such as imposing currency controls—were taken “that were necessary to avoid greater ills.” Lacunza also spoke of the damaged economy outgoing President Mauricio Macri received when he took office in 2015, adding that the fact that monetary prudence was not enough to stop inflation doesn’t mean it wasn’t necessary. He said that what is true is that there will be sufficient reserves to enter into negotiation with creditors. Lacunza also had words of caution for the next government, saying loan default is not a legitimate or practical option.