More than 1,500 foreign business leaders set to arrive next month in Buenos Aires

More than 1,500 foreign business leaders and representatives from governments and global organizations will arrive next month to Buenos Aires for the “Forum on Investment and Business in Argentina,” a three-day government-led summit to lure foreign investment.

Described as President Mauricio Macri’s “Mini-Davos,” such an event was initially discussed at the World Economic Forum, the international gathering between governments and private companies held in Davos, Switzerland earlier this year. Macri’s presence there marked the first time since 2003 that Argentina was represented at the annual forum.

The summit will be held between September 12 and 15 and will focus on investment projects in Argentina, mainly regarding renewable energy, oil and natural gas, agriculture, industrial services, mining, transport and logistics, public works and infrastructure, telecommunications and technology, tourism and real-estate.

Many foreign business leaders have already said yes to the invite such as the heads of BP (Bob Dudley), Export-Import Bank (Fred Hochberg), Siemens (Joe Kaeser), Coca-Cola (Muhtar Kent), Boeing (Donna Hrinak) and Dow (Andrew Liveris). They will be welcomed at a reception at Teatro Colón on September 12, with the forum officially kicking off the next day.

Macri will open and close the forum, which will have working sessions — most of them taking place behind closed-doors — over Argentina’s investment potential. There will also be an “innovation day” on September 15 that will feature “success stories” of countries which are moving forward on innovation, the main example being Silicon Valley in San José and San Francisco bay areas of the United States.

The Agency of Investment and International Commerce, led by Juan Procaccini, an economist with expertise in investment, will be organizing the event. For Procaccini, the meeting will serve “to show the changes and reforms Argentina is making, including the most ambitious infrastructure plan in its history.”

“We have identified four major sectors in need of investment: energy, mining, infrastructure and agriculture,” Procaccini said last week.

Attracting foreign investment has been a pillar of Macri’s administration, which has often blamed the previous Cristina Fernández de Kirchner government for “cutting Argentina off from the world.” With that in mind, Macri has paid off the so-called “vulture funds,” attended the World Economic Forum and removed the foreign currency restrictions — all in order to gain more international credibility and attract investment.

Nevertheless, results haven’t paid off yet. Stubbornly high inflation and fiscal deficit and a larger-than- expected economic drop for this year have delayed the arrival of capital flows, experts agree, while claiming more time will be needed for projects to be carried out.

In the first half of the year, foreign direct investment (FDI) reached US$1.3 billion, according to Central Bank data. While the amount almost equals the annual investment for 2015, it only represents less than five percent of the US$30.1 billion in investment announcements as calculated by the Finance Ministry.

When looking at each sector, the US$1.3 billion invested in the first six months of the year was focused on oil (US$336 million), communications (US$247 million), food, drinks and tobacco (US$179 million) and the vehicle industry (US$111 million). Another US$900 million arrived in the country but only for bonds and financial asset investment.

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) said Argentina will shrink by 1.5 percent this year, a greater contraction than initially expected — a forecast shared by the International Monetary Fund (IMF).

Date: August 16, 2016