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# #TheWorldfolio Friday, April 28, 2017 01 ARGENTINA RISING

President ’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 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 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,” . “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

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 bondhold- ers 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. Luis Caputo was President Mac- Luis Caputo, ri’s envoy sent to New York to settle Minister of Finance the dispute with the holdouts and take Argentina out of default. Mr. However, Mr. Macri is finding it Caputo insists that the deal was tough to navigate between support- a “game changer” for Argentina’s ers of rapid change and those wor- economy as it allowed national and ried about the political and social provincial governments to borrow President Macri (left) swears in his Ministers of Finance and the Treasury, Luis Caputo and Nicolás Dujovne, respectively implications of going too fast. from abroad once again, allowing While the administration has ar- them to inject foreign capital into soon followed from other compa- 2018 a tax reform that aims to has accelerated since that forecast to accompany development. “We gued that its subsidy cuts and gov- badly needed public infrastructure nies including Aeropuertos Argen- have a simpler and more efficient was made. In February, consumer need to lift one-third of Argentines ernment employee layoffs were nec- projects. Immediately following the tina 2000 (AA2000) and Pampa tax system,” says Minister of the prices rose 2.5 percent from Janu- out of poverty not by populism or essary to return to growth, critics deal came Argentina’s successful Energía. AA2000 issued a $400m Treasury Nicolás Dujovne. ary’s 1.3 percent, and may pick up social welfare plans but by creating and the opposition have responded sovereign debt sale of $16.5 billion. bond at 6.95 percent, the lowest Other priorities include the further as additional power and jobs for solid economic develop- with mass demonstrations and con- The private sector later respond- rate of any Argentine corporation. now autonomous Central Bank’s gasoline subsidy cuts bite. ment and moving people out of the frontations from trade unions. The ed in April 2016 with Grupo Super- Next on the government’s fight against inflation, developing The Central Bank is targeting informal economy,” asserts IDEA’s resulting difficult political climate vielle’s first foreign equity offering agenda is to overhaul the “inef- domestic capital markets, forg- inflation of no more than 17 per- president, Ignacio Stegmann, who will put the Cambiemos coalition to in two years for the country, when ficient and unfair” tax regime and ing trade pacts, boosting foreign cent by end-2017, 8-12 percent is an SME manager himself. Delfín the test as it faces voters in mid- it launched its IPO on the New York present a draft in June. “Our goal investment, whose levels that are in 2018 and 5 percent in 2019, Jorge Ezequiel Carballo, Vice Pres- term elections set for October. Stock Exchange. Corporate issues is to propose to the Congress in far below those in other big Latin when the government plans to ident of Argentina’s second-largest American countries, and helping have shrunk the still-gaping defi- private bank, Banco Macro, sees small and medium-sized enter- cit to 2.2 percent of GDP. Its vice high potential returns for foreign prises to export and integrate president, Demian Reidel, stresses investors. “We have very attractive themselves in the global value the vitality of the institution’s au- sectors for investors from energy, chain. The number of SMEs sell- tonomy to successfully curb and infrastructure, and logistics, where ing abroad slumped to 6,000 last reduce inflation. “In the end, how there has been minimal investment year from 15,000 in 2011. credible the targets are depends on for the past 15 years.” “Our job is to develop enough the autonomy of the Central Bank, credit, and to spread that credit among other factors. From a legal “Our goal is to propose to among the SMEs,” says Finance standpoint, this has been eroded as the Congress in 2018 a tax Minister Caputo. the previous government used the Central Bank to finance its spend- reform that aims to have a ing” he says. simpler and more efficient “Brazil is undergoing But pressure is building. Early this tax system” political turmoil at the month, conflicts with labor unions erupted in the first general strike moment, while Chile is that the administration has faced, Nicolás Dujovne, second-guessing the paralyzing transportation and pro- Minister of the Treasury policies that have been ductivity nation-wide for 24 hours. implemented in the past The IMF sees potential problems Argentine companies’ shortage of ahead, saying the architects of eco- foreign capital could be eased this years. Mexico faces the nomic reform “should be sensitive year if U.S. index provider MSCI Trump effect and Colombia to its impact on growth, jobs, and upgrades Argentina’s investment faces its own challenges. the most vulnerable segments of the grade from frontier to emerging Peru and Argentina stand population.” market. It already meets key crite- The OECD, too, while encouraged ria on the size of its top companies out as being different” by the changes and forecasting good and ease of capital movement. In growth ahead, says that “downside March, Moody’s raised Argentina’s Gabriel Martino, risks from an unfavorable external sovereign credit rating outlook to President, HSBC Argentina environment and domestic chal- positive from stable, signifying re- lenges may affect the outlook. Sus- duced lending risk. tained inflationary pressures could Internationally, the recent require a tighter monetary policy changes make Argentina a source Argentina has trade agreements that could delay the recovery.” of good news for the region. “Bra- with only 10 percent of the global “Poverty and inequality remain zil is undergoing political turmoil GDP, while some neighbors have high by OECD standards. Invest- at the moment, while Chile is them with 90 percent, notes Ho- ment growth has been stagnant, second-guessing the policies that racio Reyser, Secretary of Interna- resulting in an important infra- have been implemented in the past tional Economic Relations at the structure gap,” it said in an end- years. Mexico faces the Trump ef- foreign ministry. 2016 report. fect, and Colombia faces its own IMF officials visited Argentina Between 2015 and 2016, the challenges. Peru and Argentina last September for the first time number of Argentines living in stand out as being different,” says in a decade, and praised the gov- poverty grew by 1.5 million, the HSBC Argentina’s President, Ga- ernment’s “ambitious and much- Pontifical Catholic University of briel Martino. needed” reforms. Argentina said in a recent report, Government challenges include “Important progress has been putting pressure on the Macri improving productivity and foreign made already in 2016. The peso administration to move faster on sales if investment and exports are is now market-determined and growing the economy. “Our goal to become the key economic growth exchange controls have been es- of zero poverty has to do with our drivers instead of consumption, as sentially eliminated. The increase vision for the country: that true was the case during Cristina Kirch- in utility tariffs has brought prices development is not achieved by ner’s presidency, he says. more in line with underlying costs. economic growth alone, but with “If Chile exports $50 billion worth The settlement with creditors has the added element of ensuring so- of metals, why can’t Argentina do the allowed a return to international cial inclusion,” explains Minister of same, given that we share the Andes capital markets by both the private Social Development Carolina Stan- Mountains? The same happens with and public sector. ley, who calls for the private sector food and energy—we used to export “Medium-term fiscal and infla- involvement in order to reduce the gas in the 1990s and we are now tion targets have been announced poverty rate, by creating jobs. importing it,” adds Mr. Martino. in conjunction with a transition Minister Stanley has presented Finance Minister Caputo ac- toward a modern system of infla- this argument at the Coloquio knowledges it may be hard for tion targeting. Finally, the national IDEA, a yearly gathering of the Argentines to think in a long-term statistics agency is being rebuilt, private sector hosted by the entre- basis while their day-to-day life is allowing for the publication of im- preneurial advocacy group, IDEA. becoming tougher. proved and credible statistics,” the Although the private sector and “As the economy starts recover- IMF said in November. the government in Argentina have ing and people realize that all the Recent data shows Argentina historically been at arm’s length at measures we have taken were for is no longer in recession, and the best, or mired in crony capitalism their benefit, they will have it easier IMF is forecasting 2.7 percent GDP at worst, some voices from the pri- at accepting we did the right thing,” growth this year, although inflation vate sector today indicate the need he concludes. AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST THE WORLDFOLIO Friday, April 28, 2017 03

IT TAKES TWO TO TANGO The government has outlined $260 billion worth of potential investment projects. After passing market-friendly reforms, the country is counting on local investors to invest and set the tone for foreigners to do the same

After a decade of relative isola- essary in order to start building tion from the global community, confidence in Argentina again,” the sudden return of Argentina to explains Alejandro Bulgheroni, the investment map with Mauri- Honorary Chairman of PAE. cio Macri’s early reforms caused Mr. Bulgheroni, though, adds euphoria and exuberance among that he believes more still needs the investors. to be done in order for other com- By the time Argentina con- panies to emulate PAE. cluded its global CEO-studded “Now that the business envi- Business & Investment Forum ronment is more favorable for in September 2016, the finance investment, efforts should be ministry had announced $30 bil- focused on unleashing the poten- lion in pledged investments. Final tial the country has, starting with execution and realization of these agribusiness, energy and mining,” investments however, has proven he stresses. more cumbersome, with barely “I believe that we should be $4.7 billion in FDI finally entering looking at redefining the coun- the economy in all of 2016. try’s economic rules with a Indeed, after spending a dec- sector-by-sector approach. If ade out of the investment equa- the right business settings are tion, Argentina is playing catch achieved, then foreign invest- up with the rest of region. Juan ments will consequently show Procaccini, President of the up.” newly consolidated Argentina Mr. Bulgheroni cites the exam- Investment and Trade Promotion ple of the energy industry, where Agency affirms that the country the risk is generally higher for needs $25 billion of investment a investors, more of a long-term year for sustained development. commitment, and prone to great- While this figure is far above er market fluctuations than other Argentina’s current figures, it is sectors such as agriculture. on par with the average of its “Therefore, investors look for 15 years that we can go to the already here and know Argentina ministration, he adds: “In terms “Investors know [the neighbors. predictability in terms of regu- international capital markets to has changed.” of the magnitude of change, the economic problems] will The government has identified lations, which is something the raise funds. In January, Pampa Demonstrating Argentina’s government is managing well so be fixed, especially those more than $260 billion worth government is working on,” he attempted to raise $500 mil- change will be vital as Argentina far, President Macri accepts that of projects where Argentina says. lion, yet we received offers for moves forward and presents the he has to make changes within who are already here requires capital input across a This sentiment has been ech- $4 billion.” results of its reform agenda both a framework of stability, and the and know Argentina has range of sectors, including $75 oed by other industry leaders The boost in private domestic to foreign investors and the local government is respecting this changed” billion in infrastructure and a as well. “Local businesses must investment is not limited to the electorate, according to Carlos and making them gradually. further $75 billion in energy and take the first step. Foreign inves- energy sector. IRSA Group, Ar- Giovanelli, a partner at Inverlat, “Much progress has been mining. tors are waiting for us to set the gentina’s largest real estate de- one of Latin America’s largest pri- made, especially on the macro- Juan Procaccini, It is not just greater foreign example,” says Marcelo Mindlin, velopment firm, has been more vate investment companies, and economic front, but there is still President, Argentina capital the government is after, President of Pampa Energía – a active this year than in any other president of the food production a long journey ahead, because Investment and Trade but local investment as well. Ar- shell company a decade ago and year in the past decade, says the giant Havanna SA. Stressing the the path towards consolidation Promotion Agency gentina knows that in order to es- now one of the prime energy company’s president, Eduardo long-term vision of the Macri ad- of growth is slow to reach.” tablish foreign confidence in the players in the country. Elsztain. economy, local investors must set “Pampa has been one of the “We think this is a moment of the example before international greatest Argentine examples in great opportunity. We are devel- firms follow suit. investment: not only in buying oping more square feet now than The country’s largest private companies such as Petrobras Ar- we were before. For example, our hydrocarbons company is doing gentina and IECSA (a local lead- new technological center devel- just that. Encouraged by the new ing infrastructure company), but opment, with Mercado Libre stable business environment, also in our investments in produc- (the region’s e-commerce giant) Pan American Energy (PAE) an- ing 300 MW more gas this year, as our anchor tenant, was our nounced $1.4 billion worth of oil and our property developments. biggest acquisition in the last 25 and gas investments last July. “It is an excellent opportunity years. We are also doubling the “The Macri reforms were nec- because this is the first time in rental size of Alto Palermo (the company’s major shopping mall in ). “We used to have no access to equity or credit for more than ten years, and were financing our projects with our own capital, but we now have regained ac- cess to credit and to equity. This is very positive for our business, because it means we can grow faster.” The government of Argentina has confidently announced that it expects to double 2016’s ac- tual FDI total by the end of this year, largely due to upcoming tenders for renewable and non- renewable energy projects. U.S. firms alone are set to invest $2.3 billion in Argentina during 2017, including more than $100 million each from General Motors, Dow Chemical, AES Corp and Ford “Local business people “This is a moment of op- Motor Company. must take the first step. It portunity. We have been And while some companies will is an excellent opportunity more active this year than want to wait to see a true reac- because this is the first time in any other year in the past tivation of the economy before taking the plunge with major in 15 years that we can go decade. We are developing investments, Mr. Procaccini is to the international capital more real estate now than confident that the reforms im- markets to raise funds” ever before” plemented have set the founda- tion for long-term growth and that this has been confirmed by Marcelo Mindlin, Eduardo Elsztain, the active investors, “they know President, Pampa Energía President, IRSA Group and [the economic problems] will be Banco Hipotecario fixed, especially those who are

Buenos Aires’ Unicorns Buenos Aires has the distinction success is a testament to the than 10,000 people,” boasts as the origin of more unicorn Argentine excellence in the tech Mayor Horacio Rodríguez companies (startups that now sector which has been a driver Larreta. make $1 billion) than any other for the internationalization of the The relationship appears to be city in Latin America. economy, and their success has symbiotic, according to Globant The city’s unicorn entrepreneurs not gone without notice. CEO Martín Migoya: “[the have brought their companies to Recognizing the potential, the government’s support] shows dominate their region, and in city government has begun to that there is a new generation some cases, the world. While invest in its technology district of businesspeople that, in spite the headquarters of Globant, to spur more tech startups. of the headwinds and adversity, Mercado Libre, OLX, and “More than 210 companies can build companies that grow Despegar may resemble Silicon have already settled. This has in the long and are globally Valley over Buenos Aires, their resulted in employment for more competitive.” AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST 04 Friday, April 28, 2017 THE WORLDFOLIO Banks poised to play greater role in new economic era Moody’s Investors Service has kept Argentina’s banking system outlook at stable, citing the country’s strengthening economy and the creation of new opportunities for businesses and banks

For Argentina’s bankers, the last sector, Argentina must convince “Under the new govern- been very positive. Argentines two decades have been a wild its customers that keeping their ment, and an autonomous bestow great value on owning ride indeed. A 2001 run on all money in banks is safe – no small their homes, and the demand Central Bank, they have put banks in the system, a freeze in feat given the ‘corralito’ of 2001 is still very large; many people deposits, and a currency devalua- is still fresh in the minds of many. forth the policy that sav- want to have access to their first tion devastated local players and Its large informal sector is also ings must be rewarded in home. The access to financing drove some foreign institutions an issue, and initiatives need to real terms. As long as the will come when Argentines start from the country. Later, under be put in place to bank the un- trusting our own currency.” government continues to the Kirchner presidencies, the banked. “The informal economy Central Bank endured frequent is quite large in Argentina, and deepen this policy, savings Renewed interest in executive interventions. “The small shops avoid paying taxes will stay in Argentina” capital markets Central Bank’s independence has because they would be forced The new climate is gradually been eroded over the last decade. to shut down if they did not do bringing confidence back. “Un- Patricio Supervielle, Upon taking office we started so,” says Mr. Escasany. der the previous administration, working on making it independ- Patricio Supervielle, President President, Grupo there weren’t as many incen- ent and stronger again,” remarks of Grupo Supervielle, adds that Supervielle tives. The current government Demian Reidel, the Central Bank’s “Argentina has such a low credit has put more focus on invest- current vice president. penetration and such a modest book, putting its balance sheet ment, and entrepreneurship is The financial sector has a long financial system because sav- to work on closing the hous- less stigmatized today. There way to go when compared to ings were penalized. Under the ing gap in the country. This is is more appetite for generat- the region. Argentina’s banking new government, and an autono- something of a step change ing investment, and it shows,” penetration accounts for just 15 mous Central Bank, they have for the state-owned bank; in says Carlos Giovanelli, President percent of GDP compared to 68 put forth the policy that savings the past, its lending profile has of Havanna SA, which recently percent and 63 percent in Brazil must be rewarded in real terms. been more oriented toward the raised 158 million pesos ($11 and Chile respectively. Private As long as the government con- public sector rather than SME million) in the country’s first sector lending represents just 12 tinues to deepen this policy, sav- or mortgage lending. And where local IPO since 2013. percent of GDP, versus an aver- ings will stay in Argentina.” Banco Nación goes, the rest of Another IPO, this time for age of 52 percent in the rest of As Delfín Jorge Ezequiel Car- Argentina’s banks swiftly follow. Grupo Supervielle, brought in Latin America and 89.6 percent ballo, Vice President of Banco “We will deliberately direct both local and foreign inves- in other emerging markets. Sav- Macro, points out, Argentine an increasing percentage of our tors, showing that for many, ings have been negligible due to entrepreneurs have shown loans to mortgages,” says Juan Argentina’s banking sector is capital flight, and mortgages themselves to be able to adapt Curutchet, President of Banco a safe bet once again. “This is are extremely hard to come by, to changing circumstances in a Provincia - the second largest very good news for the country with most Argentines obliged way that is not seen elsewhere bank in the nation by value and and means a complete change “The bank holds 28 per- “Argentina is a great place to pay for their homes upfront, around the world. “This new gov- deposits which is publicly owned of plans and corporate govern- often in dollars because of the ernment has to convince them cent of all deposits and 11 to invest in because it has by the province of Buenos Aires ance. Our leadership has become historic instability of the peso. that this time, the model will percent of loans, but despite what an investor is look- government. “Only 3 percent of multifaceted as we bring in in- Giving autonomy to the Central not go under, and that it is a its financial solidity, it’s still ing for. The only exception our total loans are in mortgages. vestors and give them a voice,” Bank, Argentina’s return to the good idea to invest. The private We are planning to actively ad- says Mr. Supervielle. far from reaching its objec- is confidence, which has international capital markets sector is naturally skeptical. The dress the people who want to The next step for Argentina is and a tax amnesty law which government has to play a strong tive. It is my mission to put been lost due to economic buy a house.” In 2015, Banco to expand its local capital mar- will allow Argentines to bring role in communicating the direc- Banco Nación at the service mismanagement over Provincia had only approved a kets offering, which is part of back money stashed overseas is tion it is taking and its reasons.” of productive activity and time” total of 300 mortgages, but it the plan already underway by slowly bringing back confidence Banco Macro is putting in expects to triple this figure this BYMA, the newly-consolidat- real estate sector growth” in the banking system. place an aggressive expansion year. “This is not much, but it ed stock exchange. “We hope “Argentina is a great place to plan to take advantage of the Eduardo J. Escasany, is still a big change. People will to integrate all of Argentina’s invest in because it has what an new economic reality. “Banco Javier González Fraga, President, Grupo start asking about mortgages markets in order to be able to investor is looking for. The only Macro is a large bank, but we President, Banco Nación Financiero Galicia and comparing prices between compete with the North Ameri- exception is confidence, which understand that we clearly have banks. I expect Banco Provincia can exchanges,” says Ernesto has been lost due to economic to grow geographically. Argen- to play an increasing role in the Allaria, President of BYMA. mismanagement over time. As tine banks are mainly focused that reason, the Central Bank homes. Banco Nación, the larg- market.” The bourse, which is basing its William Pitt puts it, ‘Confidence on the consumer side, but we has launched an index-linked est state-owned bank, is playing For Banco Hipotecario, the business model around that of is a plant of slow growth’,” says know that the big opportunities loan to transform the mortgage a central role in the roll-out of country’s foremost mortgage Brazil’s Bovespa, wants the na- Eduardo Escasany, President of are in corporate banking, which market. “Our mortgage market this initiative, having already put lender, new opportunities are tion’s strongest companies to Grupo Financiero Galicia, the will see enormous growth,” says is almost inexisten, which is in 30 billion pesos ($2 billion) to opening up in property lending. list on the market and attract country’s largest private sector Mr. Carballo. why we have created an infla- the plan, and with a further 30 “The banking sector is very dy- top-quality foreign capital. commercial bank ranked by de- Foreign players are also in- tion index currency called UVA billion pesos set aside for vari- namic at the moment. We have “The Argentine capital mar- posits, assets or loans. creasingly eyeing the potential (unidad de valor adquisitivo, a ous real estate investment plans a low credit to GDP ratio when ket could be 20 times bigger “We used to have an illogical of Argentina’s domestic market coefficient which adjusts both set out by the government. compared to our neighbors, but than what it is. Brazil’s GDP is economic policy, with no refer- for financial services, as demon- the quotas and the capital to Javier González Fraga, the it will go up as inflation con- three times that of Argentina, ence prices which made it very strated by the recent entry into inflation), so that people can bank’s president, points out that tinues decelerating and confi- but Brazil trades $2 billion on difficult to valuate salaries, or American online payments giant obtain real loans and hopefully this is just the beginning. “The dence makes Argentines bring its market, while Argentina companies, or anything. We now Paypal, whose link-up with local incentivize the growth of the bank holds 28 percent of all de- their savings back to the coun- trades around $20 million,” have prices and economic stabil- bank Banco Comafi will allow Ar- mortgage market here,” says Mr. posits and 11 percent of loans, try,” says Eduardo Elsztain, the adds Mr. Allaria. One recur- ity, thanks to the reforms made gentine SME exporters to receive Reidel. The newly-announced but despite its financial solidity, bank’s president, who is also rent theme unites every area during 2016. There are still many and withdraw foreign payments continuation of the Plan PRO- it’s still far from reaching its ob- president of IRSA Group. of the financial sector in Ar- issues that need to be solved, in pesos or dollars. CREAR by President Macri, a jective. It is my mission to put Banco Hipotecario’s project to gentina: there is a lot of room though this is a marathon, not social housing program enacted Banco Nación at the service of buy up unused land and obtain for growth. And thus far, all a sprint,” says Gabriel Martino, Recovery of the home by the previous government and productive activity and real es- finance to develop properties indications are that the finan- President of HSBC Argentina. mortgage market expanded last year, means a fur- tate sector growth.” upon it became the motor of the cial sector in the country has Trust here is the key word. One of the goals of Macri is to ther $3 billion will be earmarked He adds that the bank aims PROCREAR program. “The deliv- an unprecedented opportunity In order to build up its banking reduce the housing deficit. For to help Argentines buy their own to double or even triple its loan ery of the solution of housing has to reach its full potential. AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST THE WORLDFOLIO Friday, April 28, 2017 05 $33.2 billion for transport infrastructure through 2019 The new National Transport Plan aims to close Argentina’s infrastructure gap to make the economy regionally and globally competitive.

Ranked a paltry 87th out of 140 “The public-private partnership ments in airports across the coun- countries in the world by the World law is quite important for boost- try, Argentines are set to take to Economic Forum for competitive- ing long-term investment from the skies. ness in infrastructure – behind Ivory the private sector,” says Mr. Rey- “Brazil used to have just one main Coast and just ahead of Albania – ser. “Argentina has almost zero airline, but after they opened up to Argentina’s creaking infrastructure, participation from the private competition, the network became from unreliable power distribution sector in infrastructure, as op- stronger. Brazilians who were not to poor transport links, is holding it posed to countries like Colombia used to flying started doing so, and back. Meanwhile, Chile and Brazil that have $30-40 billion destined the Brazilian market more than dou- rank 45th and 74th respectively, to finance infrastructure. This is bled within 10 years. Our vision is demonstrating the extent to which a level that Argentina could cer- to be the leader in the market in a Argentina lost out to its neighbors tainly achieve with this PPP law.” five-year period, losing market share in terms of foreign direct invest- The government’s objective is to but in a market that is twice the size. ment under the mismanagement attract more than $5 billion a year Instead of having 80 percent of our of previous administrations. in investments through these part- current eight million passengers per The country’s infrastructure woes nerships, which are widely seen as year market, we would rather have are multiple: during harvest time, Ar- more attractive to investors than 60 percent share of a 15 million pas- gentine farmers struggle to get their the previous system in Argentina, senger market,” says Mr. Dell’Acqua. crops to market along clogged roads. which managed private participa- Minister Dietrich adds that inter- Getting products out to export mar- tion in public projects through a national airlines have already started kets is an exercise in patience, given concession scheme. to react positively to the changes in cargo trains are both unreliable and For Minister of Transport Guill- Minister of Transport Guillermo Dietrich and President of Argentine Freight Trains Ezequiel Lemos over- Argentina’s aviation sector. “They are limited, and international links via ermo Dietrich, who is leading the see the arrival of new locomotives for the reactivated Belgrano Freight Line showing it by improving frequency. air and land are less than optimal. president’s ambitious plan, the po- They are all analyzing how to improve Meanwhile, the country’s natural gas tential is enormous. “We are con- World Bank has recently approved competitive edge. Our infrastructure were lowered but not eliminated, their business in the country.” pipelines have no more capacity as necting the whole country with a $125 million loan as part of the investments are aimed at recovering there will be a larger production Righting past wrongs is key demand outpaces domestic produc- highways, railways and airports,” initiative, to which the government our competitiveness and achieving of maize which has come down to for the air transport sector. Mr. tion. Power outages have become a he explains. “There are over 1,116 is adding a further $25 million. This the objective of feeding 600 mil- zero export tax. One hectare of land Dell’Acqua recalls that during the fact of life, particularly during the kms (693 miles) of highways cur- will be used to build new and rehabil- lion people by 2019,” says Ricardo produces 6,600 pounds of soybean previous administration, the desti- summer months. Unless Argentina rently under construction, however itate existing water infrastructure. Buryaile, Minister of Agribusiness. but 17,600 pounds of maize.” nation of Córdoba was ignored due addresses its infrastructure deficit, we target to build a grand total of The private sector has reacted to the Last year’s floods devastated to political differences between it will be unable to reach its full eco- 2,800 kilometers (1,739 miles) government’s opening to investment. vast tracts of farmland, leading to Aviation Sector Growth the national and provincial lead- nomic potential. across the country by 2019. This “We also have large investments a surge in the price of soybeans, Boosting air transport is a major fac- ership. The result left Argentina’s “The infrastructure deficit ham- is the most ambitious road plan in and continuous improvements in and were widely attributed to the tor of the country-wide infrastruc- second-largest city without an air pers the productive development of the history of Argentina.” Tucumán, Iguazú, and Jujuy. In the building of clandestine irrigation ture development plan. “Argentina hub, instead concentrating flights the country. We see that for the first While Minister Dietrich feels medium term, our idea is to focus canals in the absence of proper is a remote country, away from the in and out of Buenos Aires. “When time in many years there is a govern- the palpable interest in the scope on Formosa and Catamarca,” says water infrastructure. The govern- normal routes of connectivity. For our Aerolíneas started in- ment that wants to improve the pro- and speed of his projects, inves- Matías Patanian, CEO of Aeropuer- ment’s plans to invest $10 billion own development, it is vital that we creasing the flight frequency to ductivity and competitivness of the tors and observers know that tos Argentina 2000 (AA2000), the over four years in projects including develop our domestic connectivity, Córdoba, the city responded quite economy by investing in infrastruc- historically, public works projects country’s largest airport operator. canals, storm drains and warning as well as our links to the region and well. We doubled both the flight ture and not through means such have been a cesspool of corrup- Meanwhile, in a bid to put Argen- systems should mitigate the impact the world. Currently, Argentines fly frequency and passenger num- as manipulating monetary policy,” tion and inefficiency. In response, tina firmly back on the trade map of floods in the future. What’s more, much less than our neighbors, even bers,” adds Mr. Dell’Acqua. remarks Francisco Ortega, Director Mr. Dietrich is outlining his new as a link between Mercosur and the better road, rail and air infrastruc- with a larger population. Argentina New investments from AA2000 of McKinsey Argentina. case for transparency. Pacific Alliance, the country is set ture linking farms not only with the does not have a strong network,” will see further expansion. “We are “The most difficult part of the “We are working every single to start work on the Agua Negra rest of Argentina but to the rest of says Mario Dell’Acqua, President of making large investments in airports job has been done,” says Horacio day in order to rebuild trust,” he cross-border tunnel project to Chile. the world, mean more farmers can national flag carrier Aerolíneas Ar- such as Córdoba and Mendoza, and Reyser, Secretary of International says, adding that the government The project, which will connect Ar- export their goods. gentinas. The airline is currently go- we want to see new companies set- Economic Relations at the Foreign has changed completely the way in gentina’s San Juan province to Co- Today, the country is estimated to ing through a major transformation ting up there, as well as in [the Bue- Ministry, referring to Argentina’s which tenders are held. “They are quimbo in Chile, will open up a new produce around 100 million metric by putting in place professional man- nos Aires airports of] Aeroparque progress in boosting competitive- now published online, so everyone trade corridor between the Atlantic tons of soybeans, corn, wheat, and agement and establishing processes and Ezeiza,” says Mr. Patanian. ness through measures including has access to them. Rules are now town of Porto Alegre in Brazil and related crops. Analysts predict that in order to reduce its dependence These investments have been freeing capital controls and lower- the same for everyone, and all stake the Pacific port of Coquimbo. the combination of cuts in export from government subsidies. While made possible by the company’s suc- ing subsidies to curb inflation and holders have access to the condi- Sergio Uñac, Governor of San taxes and other economic measures the Macri-era leadership has been cessful international debt placement cut the fiscal deficit. The next step tions for any tender.” Juan, sees enormous economic po- coupled with better infrastructure in able to cut the airline’s budget deficit on the capital markets of $400 mil- is to close the infrastructure gap. For the neglected North of Ar- tential for Argentina’s producers as the northern provinces will see this in half in the first year, Aerolíneas lion at a rate of 6.95 percent, the low- Realizing that tackling the issue gentina, there is a special program a result. “Chile has free trade agree- figure jump to 160 million metric Argentinas will still cost local tax- est achieved recently by will require an enormous amount of which aims to tackle the geographic ments with various countries. Those tons by 2025. payers around $180 million in 2017, any Argentine corporation to date. investment which can only be met by inequity which has plagued the coun- agreements cover 7,000 products, Little by little, public reforms are according to local press. However, “There was an enormous amount of tapping all possible sources, Presi- try – and threatened stability – for while at the moment they are only opening the way for private sector the government is confident that investor interest and the placement dent Macri launched the National so long. “Despite the North’s integral exporting 4,000. Through the tun- investment in agribusiness. Roberto with the new management they can was oversubscribed to the extent Transport Plan, which aims to in- role in the foundation of our country, nel, we can provide them the 3,000 Urquía, Director of Aceitera General turn the company around. that for a placement of up to $400 vest $33.2 billion in infrastructure it has consistently been neglected remaining products for re-export,” Deheza (AGD), one of the country’s He adds that Argentines drive million, $2.6 billion in offers were between 2016 and 2019. This will by all governments ever since. This adds Mr. Uñac. most prominent value-added agri- three times longer distances than received,” says Mr. Patanian. include a large contribution from is why we have gotten to work on businesses, says, “We are working people in other countries in the Of course, the focus is not solely the private sector. Projects range Plan Belgrano,” said President Macri Benefits to Agribusiness on the logistics aspect, as it is a region, with all of the consequenc- upon opening up new routes for from airport upgrades to new while visiting Salta province. Perhaps the largest beneficiaries significant proportion of the final es that that brings – from lost the country’s flag carrier. AA2000 roads and railway lines, as well as Plan Belgrano includes $16 bil- of Argentina’s renewed focus on cost of our production. As a con- working time to higher risks of plans to open up a purpose-built tunnels through the Andes to create lion of infrastructure investment infrastructure development will be sequence of the reduction of taxes accidents. But as a result of the terminal at Ezeiza airport for low- transport links with Chile. And with over the next decade. The idea is to its farmers. “Historically, Argentina on maize exports, we are building new government’s deregulation cost airlines, and also aims to keep new legislation in place, optimism bring roads, railways and air routes has been a champion for food pro- and inland elevator in Pampa del of air transport, which brought on investing in the capital’s airports abounds about the chance of com- up to international standards as well duction. However, due to the lack of Infierno, in Chaco province. Since with it the entrance of low cost to bring in more international and pleting all the work needed. as invest in water and sanitation. The investment, the sector has lost its taxes on soybean and its derivatives airlines, and the massive invest- regional players. AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST 06 Friday, April 28, 2017 THE WORLDFOLIO

Resetting relations with the provinces Buenos Aires works with the governors to fulfill the constitutional promise of federalism and develop regional economies

As the world’s eighth-largest coun- However, a proposal by the op- try, Argentina is as varied as it is position party, of which Mr. Uñac The Minister of the Interior and six provincial governors vast. This land of many contrasts has is a member, to reinstate mining from various political parties present investment terrain spanning Pampas grassland, opportunities and the new cooperation between the two taxes and export duties, looked set rainforests, the Andes mountain levels of government to dampen investor enthusiasm range and glacial lakes, and each for Argentina’s mines, potentially of its 23 provinces – and autono- setting San Juan back. In a move mous city, Buenos Aires – boasts widely seen as indicative of the new its own unique identity. While the Argentine ethos of respect for the provinces and the capital have their rule of law and open dialogue, Mr. own constitutions, they exist under Uñac went to the central govern- a federal system, and the relation- ment, bringing in his party and other ship between them and the central stakeholders, and was successful in government has often been frac- pushing the Upper Chamber to de- tious. But under President Macri’s cline the opposition’s proposal. “The administration, a new focus on es- role of the provinces is transcenden- tablishing an open dialogue between tal. We live in a federal country, as the national government and the established by the Constitution, but provinces has been made a priority nonetheless we have to make this in order to ensure the development a reality.” of Argentina’s regional economies. “This is a federal country,” points out , Minister of the “The role of the provinces is Interior, who is charged with repre- transcendental. We live in senting the national government in Credit: Ministry of the Interior) a federal country, as estab- its relations with the provinces. “In lished by the Constitution, recent years, this had been forgotten nos Aires,” says Horacio Rodríguez non-Peronist to govern the province late the cities in the countryside to to produce products for the rest and Argentina has in-effect become Larreta, the city’s mayor. “This is a in a generation. “For the first time in offset this imbalance. If the agricul- of the country and for exports as but nonetheless we have to a unitary state with power concen- huge challenge and opportunity for 25 years, the national government tural sector grows, this is positive well. We are working on regional make this a reality” trated in the central government in us.” Security has long been one of has started to work as a team with for the whole country as it stops and sectorial growth, complement- order to subdue politically those ju- the most contentious issues for the the provincial government. They no the flow of people migrating to the ing other sectors of the country, Sergio Uñac, risdictions with which it disagreed.” city, and the citizens of Buenos Aires longer see us as political adversar- big cities,” says Roberto Urquía, Di- and integrating our producers in As only five of the 23 provinces are eagerly received this move. Coopera- ies and are working alongside us rector of AGD, one of the country’s the value chains,” says Governor Governor, San Juan governed by the Cambiemos (Let’s tion with the national government toward common goals. This gives largest value-added agribusinesses. Rosana Bertone. Province Change) coalition, building political has also granted Mayor Larreta the Province of Buenos Aires an One example of agricultural de- With ever-strengthening ties be- consensus around the country is key greater authority through the trans- enormous potential,” says Ms. Vid- velopment is that of Grupo Lucci. tween the provincial and national San Juan stands out among Ar- to maintaining stability. fer of previously federal land, untying al. Through coordination with the Based in Tucuman, long amongst governments, the economic devel- gentine provinces in that it has been Miguel Lifschitz, the governor his hands to develop infrastructure national government, the Buenos the most underdeveloped Argentine opment of the “new” Argentina is set running a fiscal balance for the past of Santa Fe province, who is not projects, and urbanize city slums. Aires has been able to issue $4.5 provinces, Lucci has become one of to reach every corner of the country. several years, with numbers for the a member of Cambiemos, explains billion in foreign debt to finance the largest producers of lemons in the first quarter of 2017 its best yet. As that, “we have political differences “For the first time in 25 public projects province-wide. world. Currently 80% of the world’s San Juan a result, it is not looking to the inter- with the government, but we be- All of these decisions are helping lemons originate from this province, Located in the Cuyo Region in national capital markets to help with lieve that that cannot be in any years, the national govern- Argentina to combat the inequities putting it on the global investment the west of Argentina, the min- further growth. “In principle, given way an obstacle when it comes to ment has started to work brought about by its geographical map for global executives like Muhtar ing province of San Juan shares that we have a balanced budget, we coordinating policies with the state as a team with the provin- divide. The country, which simplis- Kent of Coca-Cola, who visited in a long border with Chile. As one are not considering issuing bonds,” and when it comes to us having a cial government. They no tically speaking is made up of a 2016, and later followed up with a of the few provinces to have fully says Mr. Uñac. cordial and respectful relationship.” poor, moderately populated north, $1 billion investment. The company approved open pit mining, San It is, however, receiving foreign in- Today, the government is working longer see us as political a middle-income, densely populated is currently going through a diversi- Juan is a major draw for extrac- vestment in its transformative infra- to recover the principle of federal- adversaries” center, and a wealthy and lightly fication process contributing to the tive industries investors, although structure projects. “We are currently ism. “Part of this recovery comes populated south “boasts very strong development of other provinces in as Governor Sergio Uñac is keen undertaking the bidding process for about because the provinces have María Eugenia Vidal, natural resources across various sec- the North of the country. “Because to point out, San Juan doesn’t an energy generation project, where greater autonomy and a direct link tors – from mining to agribusiness of the inelasticity of lemon demand, accept just any mining company. dual-purpose dykes will be built to with the rest of the world,” says Governor, Buenos Aires to energy – however has been very it was not easy for us to continue to “We do not tolerate irresponsible irrigate our agricultural land and Minister Frigerio. For him, greater Province under-penetrated in terms of invest- grow in Tucumán, says Daniel Lucci, mining. Our government is present generate energy for the province.” autonomy comes with greater re- ment over the past ten years,” as Director of the company. “We have in the sector and we ensure that The province will also be home to sponsibility. “We have brought back The country’s largest province, Juan Procaccini, President of the diversified, but in keeping with the regulations are implemented.” On the Agua Negra Tunnel, which will a very important instrument, the Buenos Aires, home to 40 percent Argentina Investment and Trade typical activities of the region. We more than one occasion, provincial connect Argentina with the Chilean fiscal responsibility law, where the of Argentina’s population, was on Promotion Agency points out. started with sugarcane in Tucumán authorities have halted production coast via the Coquimbo Port, joining provinces commit themselves to the verge of bankruptcy when cur- “The result is a relatively new and then went on into livestock in when informed of cyanide leakage the Atlantic and the Pacific trade gradually decrease the deficit along rent Governor María Eugenia Vidal market, which at the moment has Santiago del Estero and Catamarca. to ensure public safety. routes. As Mercosur moves closer to with the national government.” came into office. Her daunting task less competition. Very few coun- In parallel, we developed agriculture: San Juan celebrated when, late signing a free trade agreement with Little by little, the central govern- of fighting organized crime, clean- tries can compete with such bullet soy, wheat and corn. Undoubtedly last year, the national government the Pacific Alliance, this $1.6 billion ment is devolving powers to the sub- ing house in the government, and points for investment.” By driving with this government it has become moved to unify mining regulations investment by the IDB will revolu- national governments, enabling Ar- building much-needed infrastruc- regional economic development, easier to reach the U.S. market, which under a proposed federal law as tionize commerce in the region, with gentina’s regions to make decisions ture has been one of the most the country hopes to lift more peo- is our objective.” part of an effort to jump-start in- benefits reaching as far as Brazil, in their own best interests. “One of watched political stories of the ple out of poverty and boost trade. In the southernmost province of vestment in the sector. The regu- Paraguay and Uruguay. the first decisions President Macri new administration. Previously “As 75 percent of the population Tierra del Fuego, economic diversi- lations included the elimination of “The Agua Negra Tunnel and the made after being elected is the deputy mayor of the city of Bue- in Argentina is concentrated into fication has become the new norm. foreign export tax on minerals that Port of Coquimbo will enable us to transfer of the management of the nos Aires and a trusted confidant five cities, this leaves the ‘interior’ of “We have consolidated a strong rendered projects in other countries reach the Asian market, which is Federal Police to the City of Bue- of Mauricio Macri, Vidal is the first the country anemic. We must popu- industrial hub which enables us more attractive. growing both in population and AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST THE WORLDFOLIO Friday, April 28, 2017 07

purchasing power. As a result of says Mr. Peppo. . In 2016, Chaco Mr. Passalacqua has played an this tunnel, San Juan is going to went to the debt market for the active role in Argentina’s recent for- undergo substantial changes,” first time, taking out a $250 loan ays into international relationship- resurrecting ‘the dead cow’ says Mr. Uñac, adding that the in- at 9.5 percent. Governor Peppo’s building, accompanying President creased goods transport through successful execution of his public Macri on his state visit to Brazil in Argentina looks to secure its energy self-sufficiency through billion-dollar the province will bring with it em- works projects will be key if the February and travelling with Minis- investments in the Vaca Muerta basin, Latin America’s largest shale ployment and investment. province wants better rates in the ter Rogelio Frigerio to Washington development, and in renewable energies such as wind and solar power But beyond mining and infra- future. While the difficult task will D.C. as part of the IDB meetings. structure, this province, dotted take time, light began to show in “We have travelled to vari- In Argentina, whose resources of gentina’s energy production coming with vineyards, has diversified its March, when Moody’s upgraded the ous countries around the world conventional oil and gas pale in from renewable sources, by 2025. economy into tourism and agroin- provinces investment rating from showing them the opportunities comparison to its neighbors like For this to happen, the government dustry. “San Juan has a lot to offer. Caa3 to B3. Still an unfavorable rat- Misiones has to offer. For example, Brazil and Venezuela, one of the top needs to attract around $20 billion Tourism is still underexploited, and ing, but Mr. Peppo is quick to point we have managed to get a Polish priorities for the administration of in investment in renewables over there is the potential to double the out that Chaco was the only prov- company to come and invest here, President Mauricio Macri is secur- the next decade. growth it has had so far,” says Mr. ince to receive such an upgrade, creating employment for the peo- ing future energy self-sufficiency Argentina’s potential in wind and Uñac. And with a world-class uni- and outlines his plan. “Our foreign ple of Misiones. We will keep on – and crucial to that goal is the solar is huge, but until now very lit- versity with over 15,000 students debt will be used to finance public travelling and demonstrating the Vaca Muerta (“Dead Cow”) basin tle investment has been made due studying degrees from engineer- infrastructure projects to ensure favorable conditions of Misiones in in Neuquén province. to the unfavorable business climate ing to the Arts, architecture and long-term growth, not to cover ad- order to attract more investment Containing some of the world’s under previous administrations. social sciences, San Juan’s human ministrational costs such as paying and more and better jobs,” says Mr. largest shale deposits, Vaca Muer- However, thanks to the improv- resources are among the best in employee salaries.” Currently, there Passalacqua. ta’s estimated reserves are at 308 ing regulatory environment under the country, making it an obvious are 200 infrastructure projects un- trillion cubic feet of gas and 16 the Macri administration, renew- choice for investors. derway throughout the province to “We will keep on travelling billion barrels of oil. Among the able energy has been identified by install basic services to fill the gaps and demonstrating the companies vying for a piece of the the World Bank as one of the most Chaco for citizens and businesses alike. meat in Neuquén are ExxonMobil, Miguel Gutiérrez, attractive sectors for investment. favorable conditions of In the north of the country, the Primarily known for producing Chevron, Total, Petrobras, and Win- President , YPF “The regulatory framework province of Chaco seeks to inject cotton, this is one sector where Misiones in order to attract tershall. which Macri’s administration has foreign and domestic capital to Chaco has been able to create a ful- more investment and more Vaca Muerta failed to take off implemented was overdue for many grow its economy, with its gov- ly integrated value chain: from the and better jobs” under the previous administration years, and has provided normalcy ernor Domingo Peppo prioritizing design to the finished product. The of Cristina Kirchner. But efforts by for the sector,” says President of development over politics. While a Governor now wants to emulate President Macri to resurrect the Pampa Energía, Marcelo Mindlin. member of the Peronist opposition the success with other products. Hugo Passalacqua, “dead cow” appear to have paid off. “Last year the government success- to the President’s Cambiemos coa- “Our objective is to incorporate Governor, Misiones Due to the high cost and complexi- fully tendered projects in thermal lition, Mr. Peppo is cooperating to added value and transform raw Province ties of extracting unconventional oil and renewable energy. Over this attract private investment, which materials into products that can and gas, technology and productiv- year and the next, the private sec- he hopes will be lured to Chaco by be sold domestically or exported,” For him, attracting foreign in- ity was critical to success. The latter tor will be investing in 6,000 MW the public investment he has put he says, adding that his govern- vestment is now easier because came in February’s landmark deal – half renewable and half thermal. in infrastructure to make the econ- ment is putting in place training the nation is opening up to the between the national and provincial It is clear that the private sector is omy more competitive, as well as programs to improve the level world, but he cautions that the governments together with the la- leading the drive in clean energy. the province’s natural advantages of human resources to meet the public sector now needs to work bor unions and energy companies. Pampa Energía was awarded 400 for logistics. needs of investors. For him, Chaco’s quickly to put in place the right This finally unlocked the door as MW of projects in Plan Renovar “The province has numerous strength comes from its plurality. infrastructure and security envi- companies became convinced of the Alejandro Phase 1. It gives us the opportunity strengths,” says Mr. Peppo. “First, Regional and national migrations ronment to smooth the path for conditions in place, with a number Bulgheroni, Honorary to later go to the next round of Plan a strategic location with respect to of workers and families have given new business. “We need to work of them announcing a fresh wave Chairman, Pan American Renovar with more strength.” Mercosur and great accessibility to the province a unique character, together,” he says. “I believe that of investments in the basin. These Last year, Pampa Energía bought Energy the Paraná-Paraguay Waterway. made up of a mix of cultures, from the President has a historic oppor- include Shell, which announced a up Brazilian oil giant Petrobras’ We have two fully operational Spanish to Italian, Paraguayan and tunity to finally unify Argentina.” $300 million joint venture with Ar- Argentinean business, making it ports: Barranquera and Las Pal- native peoples. The economy of Misiones is gentine national oil company YPF, cording to Mr. Bulgheroni. “This is now one of the largest energy mas, the latter of which we have Although officially opposed to based around agriculture and tour- and Argentina’s Tecpetrol, part of because we invested when no one companies in Argentina. In Janu- recently renovated in an infrastruc- Mr. Macri’s party, Mr. Peppo has ism. Indeed, the province is home the Techint Group, which said in else did. Because of this, we also ary, Pampa was Argentina’s second ture overhaul. Second is our human argued for working with the na- to fully half of Argentina’s biodi- March that it would invest $2.3 bil- have the largest oil reserve in the company of the year to issue a for- capital, with our three universities tional government to achieve com- versity, which the government sees lion in the Vaca Muerta shale fields country. Our investing partners fol- eign bond in 2017, which was eight that attract students from outside mon goals, and believes that “the as an important responsibility. Its through 2019. “There are companies low our advice because we are also times oversubscribed. the province and the region. Finally, possibility of creating dialogue and star attraction is the world-famous that don’t even operate in Argen- risking our own money in a country “After covering our acquisition of our government’s commitment to building relationships with the na- Iguazú Falls, and with the dereg- tina that want to come here now in which we have a lot at stake.” Petrobras Argentina, we will care- accompany private investments tional government has permitted ulation of air transport, Misiones because we have been able to put While Argentina’s largest energy fully invest the remaining $600 with our support.” to some extent the implementa- hopes to see an increase in local Vaca Muerta back on the invest- player YPF is state-controlled, its million in capital in production of tion of a program of activities of and international tourists. “We ment map by reducing production President Miguel Gutiérrez is quick natural gas and new generation,” “The province has nu- which we can meet achieve com- have always dreamed of being costs to $40 a barrel,” claims Miguel to point out that, unlike other NOCs adds Mr. Mindlin. “By using this mon ground. I believe in a tripartite able to increase the connectivity Gutiérrez, President of YPF. in the region, 49 percent of YPF money wisely, we will grow our merous strengths ... Our partnership: the public sector, the of our province; therefore, we got “Argentina has large reserves is held by private investors, and is market value and strengthen our objective is to incorporate private sector, and the education started working with the national of unconventional hydrocarbons listed on the New York Stock Ex- possibilities of doing a new round added value and trans- and knowledge institutions. The re- government on in this initiative in and this is an attractive invest- change. of financing for more growth.” form raw materials into lationship between the three parts March 2016. Now that it has been ment opportunity,” says Alejandro “We make up approximately 50 YPF, which previously invested has to be fluid in order to generate passed, we are very satisfied this is Bulgheroni, Honorary Chairman of percent of the market, so changes nothing in renewables, is now in- products that can be sold opportunities.” the key for the tourism sector and Pan American Energy (PAE). “Com- in the industry directly affect us, vesting in wind power in Chubut domestically or exported” to generate jobs for the people of panies will start bringing new tech- such as the price fluctuations. While Province, and is exploring new pro- Misiones Misiones,” says Mr. Passalacqua. nology and equipment. Once one or 2016 has been a year of transition, jects in solar and thermal power Domingo Peppo, One of Argentina’s smallest prov- Misiones will increase the number two start doing this, the others will we believe that the future will be generation to diversify its energy inces, Misiones is arguably its most of flights from 11 to 24 including follow very fast.” much better as we can move for- portfolio. Governor, Chaco Province international, with 91 percent of low-cost airlines. Nonetheless, the In March, PAE announced that ward with a much clearer horizon in A former YPF Vice President its territory bordering Brazil and plan now is for Misiones to diver- it had re-entered the Vaca Muerta the regulatory environment.” before she started her own re- With Argentina’s aperture to Paraguay. As a result, as Hugo Pas- sify its economy into industry. “We shale formation after mobilizing a newable energy consultancy com- global capital markets and federal salacqua, the province’s governor, have recently put out a tender for drilling rig. Once drilling has been Renewable Energy pany, Luft Energia, Doris Capurro reforms granting greater autonomy points out, Argentina’s newfound the port, which is going to be very completed, PAE will mobilize sup- Aside from shale oil and gas, invest- agrees, “As the country’s leading to the provinces, the international focus on external relations is important for the south of Brazil. plies, services and equipment for its ment in renewable energy is also a energy company, YPF can be the investor faces a palette of opportu- very much in Misiones’ interest. We have a 100-hectare industrial partner, Canadian-based Madalena key priority for the government of example for renewables, and di- nities. “The perception of Argentina “Although Argentina itself is a park and we are expecting to see Energy, to complete the well in 19 Mauricio Macri. Last year President versify its own energy mix. They is positive. Argentina was closed, cocktail of ethnicities, Misiones is foreign investment there,” adds Mr. stages of hydraulic fracks. Macri launched the first phase of can generate their own power for but it has now opened up to the unusual. It’s a large confluence of Passalacqua. “Our aim is to work Since 2001, Pan American En- Plan Renovar, the program that will their facilities to operate below world. We are conscious that we diverse ethnic realities. We under- in conjunction with the public and ergy has increased its conventional put in place the national promise set the ground with the above-the- need to maintain our identity and stand very well what international private sectors, as two parts of the oil and gas production in Argentina out by the Renewable Energy Law, ground energy. There is good wind our autonomy in order to benefit,” relations mean.” same society.” from 8 percent to 18 percent, ac- mandating for 20 percent of Ar- on top of Vaca Muerta!” AN ADVERTISING SUPPLEMENT TO THE WASHINGTON POST 08 Friday, April 28, 2017 THE WORLDFOLIO Tourism industry looks set to reach new heights

The government of Mauricio Macri has prioritized the development of tourism as a key driver of economic growth and job creation, and is adopting a number of important measures in order to reach its target of 9 million foreign visitors by the end of 2019

Located in Neuquén Province, Villa La Angostura is one of Patagonia’s loveliest spots

Between 2013 and 2015, the loss vices for foreign guests. The gov- economic growth. There is a plan to routes for three airlines: Alas del of 3.1 million domestic tourists and “Foreign investors ernment expects the measure to create an eco-tourism corridor along Sur, American Jet, and Andes. the slump in arrivals from Brazil, its should be encouraged help attract 95,000 new tourists the littoral region of Misiones, Chaco, Meanwhile, Europe’s number largest source market, hit Argen- by our local example, in the first year, who would spend Formosa, and Corrientes, which will one low-cost airline Ryanair has tina hard. But after some difficult around $70 million and would help see the construction of new hotels, announced that “it is only a mat- with Argentine years, Argentina’s tourism industry to create 8,000 new jobs. This is roads and other infrastructure. A ter of time” before it starts oper- looks to be on the rise again. companies having estimated to increase by 2019 to thriving tourism industry would pro- ating in the country. The arrival of Fresh impetus was given to the already invested $1 120,000 tourists, spending $90 vide vital employment opportunities these low-cost airlines is a signal sector when President Mauricio billion in 2016” million. U.S. travelers can enjoy fur- for these poorer regions, whose of their confidence in the potential Macri unveiled the National Tour- ther savings thanks to the removal potential for tourism development of Argentina’s tourism industry. ism Plan last May, which aims to of the $160 visa fee, which came lies in their wealth of biodiversity, “International airlines are op- boost foreign tourists to 9 million, Gustavo Santos, into permanent effect in August. natural beauty and ancient cultural timistic about the process Ar- foreign tourism receipts to $8 bil- Minister of Tourism Key to the government’s 2019 heritage. gentina is undergoing, and they lion, and domestic tourists to 70 targets will be promotion and Another key factor will be im- are showing it by improving fre- million by the end of 2019. new technologies, incentivizing adopted by the government of marketing. As well as marketing proving international and domes- quency. They are all analyzing how Hitting these targets will raise entrepreneurs and promoting the President Macri in 2016, which has already-popular destinations such tic connectivity. The arrival of to improve their business in the tourism employment by 28 per- training and quality in every Ar- made a stay in Argentina consider- as Buenos Aires, Patagonia and the low-cost carriers is set to give a country,” says Transport Minister cent by generating “300,000 new gentine destination,” says Tourism ably cheaper for foreign visitors. In wine region of Mendoza, the govern- major boost to the tourism indus- Guillermo Dietrich, who adds that, jobs during the four years across Minister Gustavo Santos. September, Mr. Macri signed a de- ment wants to promote and develop try. In February, The National Civil “We are connecting the whole the entire value chain of the tour- The increases can partly be at- cree to remove the 21 percent VAT lesser-known regions in the North, Aviation Administration (ANAC) country with highways, trains ism industry: innovating, applying tributed to an important measure charge on all accommodation ser- as part of its drive to boost regional approved a total of 41 new air and airports.”

Taking a trip to Argentina in winter Winter in the southern hemisphere is from June to September. In winter, Argentina has varying climates, from mild temperatures in the north to snow and ice in the south, giving visitors a varied choice of things to see and do, from skiing and glacier sightseeing to wine tasting and jungle trekking.

Skiing and glacial wonders in Patagonia Winter wine tasting in Mendoza A tropical winter at Iguazu Falls

Ruggedly beautiful Patagonia is a trek to explore in winter, but prepare to Mendoza is one of Argentina’s most important wine regions, accounting Once you’re done skiing and taking in the glaciers in Patagonia, and sipping bundle up. Patagonia offers some of the best skiing in South America. One of for nearly two-thirds of the country’s entire wine production, which makes Malbec in Mendoza, finish your adventure at one of the natural wonders most popular ski resorts is Cerro Catedral in Bariloche, which is situated in it a hotspot for wine tourism. The upside of taking a trip here in winter is of the entire world: Iguazu Falls. “Poor Niagra,” were the first words of Northern Patagonia. Here you can ski down the mountain at your leisure (Cerro avoiding the summer crowds, meaning visitors can get some great deals on Eleanor Roosevelt when she first laid eyes on the masterpiece of nature. is perfect for beginner and advanced skiers), while taking in breathtaking views wine tours and accommodation. You can still visit any winery in winter in Named a UNESCO World Heritage site in 1984, the 275 individual cascades of Lake Nahuel Huapi and the cathedral located in the beautiful village at the Mendoza and many put together winter activities especially for visitors at come together to produce vast sprays of water in a dazzling array of roaring bottom. Millions of dollars have been spent in recent years on infrastructure to this time of year, whom, because of the smaller numbers, they can give that white foam and rainbows. turn Cerro Catedral into a modern, world-class ski resort. extra bit of personal attention. The surrounding subtropical rainforest has over 2,000 species of vascular A Patagonian highlight includes Perito Moreno Glacier. A UNESCO World If you are looking for a nice change from the standard winery tour and plants and is home to the typical wildlife of the region: tapirs, giant Heritage Site, the glacier is one of Argentina’s natural wonders and tasting, Bodegas Norton, established in 1895, offers several activities such anteaters, howler monkeys, ocelots, jaguars and caymans, making this an contrary to the vast majority of the world’s glaciers, Perito Moreno not only as “creciendo junto al vino” (growing up with wine), where you will be able ideal trip for nature and wildlife enthusiasts. does not recede, but expands yearly. The glacier is best experienced in the to taste wines from fermentation tanks or oak barrels. Another activity The littoral region where Iguazu Falls National Park is situated has a jungle summer months, accessed via the town of El Calafate. After a short boat offered is “enólogo por un día” (winemaker for a day), where you can make climate, which means that the winter is less hot than the rest of the year ride across the bay, experience an ice-trekking excursion on the majestic your own wine and design your label, and then, a judge from the winery will and therefore a great time for a visit if you’re looking to avoid the summer iceform crossing towering ice peaks, huge crevasses, turquoise blue creeks choose the best wine. heat. In addition to less heat, during the winter you will also find smaller and icy lagoons. Later, visit the spectacular catwalks and balconies which crowds at Iguazu. offer breathtaking views of the panorama.