Argentina Rising

AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST #Argentina #TheWorldfolio Friday, April 28, 2017 01 ARGENTINA RISING President Mauricio Macri’s message of integration with the international community has drawn the praise of foreign investors and world leaders. Will it be enough to break with historical trends at home and establish long-term, inclusive growth? A century ago, Argentina was “Our society looks at our one of the world’s ten wealthiest nations, as the grand buildings past of cyclical crises and towering over the streets of Bue- at the examples of coun- nos Aires attest. From the ornate tries that have been able Teatro Colón from 1908, one of to develop sustainably and the world’s finest opera houses, to the French-style Retiro railway sees that we can achieve station from 1915, the city’s ar- much more if we come chitecture speaks to the glory of together and try to imple- this once-eminent nation. But as ment not only economic a result of economic mismanage- ment by successive governments, and political change, but Argentina is no longer synonymous also changes in values” with prosperity, and instead has seen its reputation damaged by MAURICIO MACRI, the hyperinflation of 1989-90, the economic meltdown of 2001 and President of Argentina its run on banks, to its headline- grabbing loan default in 2014 with a group of holdout bondholders. notion of being integrated to the From the local and international world in terms of investment, investment outlook, however, it trade, technology and ideas has seems as if better days are on the to be reinforced by every area in way. President Mauricio Macri, the state,” says Mr. Peña. elected in late 2015 on a platform There is another goal on the of change and the country’s first “There is an innovative out creditors. It was a key decision or unfelt. The government faces transformation. Argentina re- horizon for Argentina, and one center-right leader to come to that affected the way everyone a major test in upcoming mid- cently hosted the World Economic which would have been unthink- power since it returned to democ- political process underway. regarded Argentina; it was proof term elections in October, when Forum Latin America this month, able just a couple of years ago: to racy in 1983, has pledged to make We are a young govern- that we wanted to join the world Argentines will take to the polls and come 2018, it will be the first become a member of the OECD. Argentina “normal” again through ment, born out of the 21st once more.” as a vote of confidence to the South American country to assume “Our goal is to take as little time a pro-business investment agenda century, and which doesn’t In an exclusive interview with long-term goals put in place by presidency of the G20. as possible,” says Mr. Caputo. “In to sustainably grow the economy The Worldfolio, President Macri the administration. To Mercosur, the near-moribund the case of Chile, the process took and create jobs in order to reduce come with the ties of the emphasizes, “Cambiemos is not “The Cambiemos coalition is regional club of which Argentina three years. We are putting a lot poverty. past” a force trying to impose change conscious of its political weak- forms a part along with Brazil, of effort into this, and we have a The government has moved on Argentine society, but rather ness if it doesn’t win the mid- Paraguay and Uruguay, the Macri lot of support from the interna- quickly with reforms but cautious- MARCOS PEÑA, a representation of a change that terms, and it is also conscious of administration has injected new tional community.” ly. President Macri’s Cambiemos has already occurred and continues the fact that the previous four enthusiasm. Argentina, which for- While strides have been made (Let’s Change) coalition does not Chief of Staff to consolidate in the society itself. non-Peronist government did not merly blocked expansion of the in putting Argentina on the path hold a majority in Congress, and The changes that global society has serve out their full terms. There- regional trading bloc, recently to sustainable development, needs to garner support from the undergone in the last couple of dec- fore, political stability and con- proposed a free-trade agreement everyone in the government ac- opposition to advance its agenda. bond sale to date, which not only ades – globalization, new forms of tinuity is a central theme,” says between Mercosur and the Pacif- cepts that there are challenges The government’s early reforms netted it $16.5 billion in a hugely- communications and production, to Javier González Fraga, President ic Alliance at a summit in Chile. ahead. “We have to live up to created enthusiasm with voters oversubscribed offering, paid off name a few – have also taken place of Banco de la Nación Argentina, “With its extremely large market, our promise of a different type and investors alike, as it quickly holdout creditors from its previous in Argentina. Our society looks at our the country’s national bank. endowed resources, and human of government: a more honest dismantled currency and trade default, placing it firmly back into past of cyclical crises and at the ex- Working on political consensus and natural diversity, Mercosur is one, one that is closer to reality controls, committed to strengthen the international capital markets. amples of countries that have been has been key to building stability an enticing market for any global and has a more pragmatic view,” democratic institutions, and over- “There was a before and after in able to develop sustainably and sees in the country. “There is an innova- player,” asserts Vice President explains Mr. Peña. Thus far, how- hauled the government statistics the relationship with financial and that we can achieve much more if tive political process underway,” Gabriela Michetti. “Therefore, we ever, the international commu- agency to restore its credibility. multilateral global institutions,” we come together and try to imple- says Marcos Peña, Chief of Staff. must strengthen Mercosur as a nity has reacted to Argentina’s In perhaps the biggest win for says Luis Caputo, Minister of Fi- ment not only economic and political “We are a young government, platform for interaction with the change: “A dozen of heads of the economy, Argentina finally cut nance. “We had already removed change, but also changes in values.” born out of the 21st century, and rest of the world.” state and heads of government a deal with the holdout investors to the FX restrictions, which had been Argentina’s transformation has which doesn’t come with the ties Ms. Michetti adds that the visited Argentina in 2016, which return the economy to the interna- well-received by the international not come without challenges. The of the past.” President has asked every mem- comes to show that the world tional bond market. What ensued community, but the game changer administration encountered the With problems at home gradu- ber of government to work on acknowledges this new period was the largest emerging market was the agreement with the hold- first resistance early in its term ally being ironed out, Argentina transforming Mercosur into a of trust, solidifying institutions as it began to remove energy simultaneously looks to its region real customs union rather than and strengthening the rule of Produced by The Worldfolio: and transport subsidies, which and the world to integrate itself in one hampered by protectionism law,” says President Macri. And Project Director: Joy Zoltobroda. Editorial Director: Nicolas Carver (@worldtempo) together were costing the gov- the global community. The remain- and red tape. as the government continues to Project Coordinator: Florencia Icardi. Regional Directors: Leandro Cabanillas and ernment a staggering 4 percent der of Mauricio Macri’s term will Argentina is also looking fur- implement its reforms, for many Fatima Ruiz Moreno. Chief Editor: Jonathan Meaney of GDP. Many of its changes are in be dotted with high-profile events ther afield to build trade ties, from investors, Argentina is well and the short-term either unpopular, to draw attention to the country’s the U.S. to Asia and beyond. “The truly back on the table. This special supplement was prepared for the Advertising Department of The Washington Post by The Worldfolio. The production of this supplement did not involve the news or editorial staff of The Washington Post. For more information, contact The Worldfolio +44 20 8544 8094 AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST 02 Friday, April 28, 2017 THE WORLDFOLIO REFORMS INJECT FOREIGN CAPITAL INTO THE ECONOMY, THOUGH CHALLENGES REMAIN Argentina’s return to the global lending market has injected a shot in the arm into the economy. The next hurdles include reducing both the budget deficit and inflation The news generated by Mauricio Mr. Macri can look back with Macri’s business-friendly Cambie- some satisfaction at results so far, mos (“Let’s Change”) government despite a recent drop in his approval since entering office in late 2015 ratings. When elected, the fiscal have been warmly received by the deficit was at a preoccupying 5.4 international investment communi- percent of GDP, Argentina was iso- ty. The deal with holdout bondhold- lated from global capital markets, ers in 2016, and the anticipated 3-4 its foreign reserves were depleting percent GDP growth for 2017 have rapidly and economic growth was enticed investors to make a move stagnant. on South America’s second-largest Early reforms included lifting economy. foreign currency controls which al- lowed Argentines to access foreign “The game changer was currency at their will, striking an the agreement with the agreement with holdout bondholders which brought the country back holdout creditors…it was a to international capital markets for key decision that affected the first time in 15 years, and pub- the way everyone regarded lishing credible economic statistics Argentina” as a base from which to make sound fiscal and monetary policy.

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