From
Miguel Peirano
Former Minister of Economy. Chief Executive Officer of the Argentine Chamber of Energy (CADE)
The present confronts us with restrictions due to the lack of foreign currency of which negative consequences impact on everyone’s daily life.
However, there are reasons to carefully analyze the scenario for the next few years, especially the currency flow of our economy.
On the one hand, by the demand for foreign currency, obligations due to payment needs due to the state’s indebtedness to private individuals and to the IMF are growing.
It also affects a very significant commercial debt of private companiesin dollars, plus private financial commitments and untransferred dividends to pending parent companies.
As is known, there are industrial sectors that require global inputs and services, as well as considering other activities, such as tourism, which may be net foreign exchange seekers.
But, on the other hand, one has to consider that the external sector will have a supply of dollars due to various factors.
External investors can generate a positive foreign exchange balance from investments in the real economywhich -a priori-, can be short-lived, but can extend over time if a positive scenario is displayed.
The agricultural sector maintains its enormous potential as an export generator and there are industrial branches, the knowledge economy and services in general which are gaining foreign markets.
Another sector that will generate foreign currency for the country and cause a substantial turnaround in the face of external restrictions is the energy sector.
Our country has significant energy resources which will make it an exporting country, with a trade balance in surplus. There is enormous growth potential in the exploration, production and marketing of natural gas and oil and alternative energies.
To the existence of conventional resources was added the development of unconventional ones, Vaca Muerta being a reality clear with extraordinary potential: outside the United States, it is the largest unconventional resource on the planet.
In a framework of coherent ground rules, and considering a “conservative” scenario, the CADE projections indicate this the energy industry is able to deliver a trade surplus of about $7 billion from 2025 to 2026approximately $10,000 million in 2027 and more than $12,000 million by 2030.
If we introduce more “optimistic” assumptions – although they are also realistic – these figures are improved and trade surpluses of about $20-30 billion could be accounted for in 2030. Beyond the assumptions, the various projections by industry experts show a very important flow of foreign currency.
To achieve these levels of the sector’s trade balance, very important investments are also needed by companies operating in the country. In this sense, the projections show investment levels around $7,000 million annually, a figure that would increase significantly if liquefaction plants were built. It is another factor in foreign exchange income.
The different scenarios and projections are linked to the coherence of economic and sectoral policies, the evolution of international prices and the progress of inevitable infrastructural works, such as gas pipelines, oil pipelines and liquefaction plants.
On the other hand, the growth we aim for will require planning between the state and the private sector in order to ensure the necessary infrastructure, training of human resources, access to inputs and technology.
Our country must be active actor in the energy transition process. We have a window of opportunity that we must exploit to advance development, generating more jobs and quality development at the federal level.
In short, the energy sector can help Argentina significantly improve its external accounts and overcome current restrictions. However, the country’s development is not an automatic process. The possibility that natural resources are linked to a better quality of life is linked to the ability to make decisions at all levels, such as education, economy, innovation and international integration.
At an economic level, the extraordinary natural resources at our disposal must be transformed into increasingly competitive productions, integrated into value chains and generating a sectorally diversified economy with more qualified employment.
Source: Clarin
