Alexander Diaz he is the president of Amcham, the United States Chamber of Commerce in Argentina. Since 2016 AmCham has been carrying out the Summit, an appeal to the entire business sector. “This year we’re looking The new administration proposes its public policies for the business sector. The second objective is that the multiple sectors of politics – governors, senators, trade unionists – say how they will contribute to the construction of a vital Argentina”, says Díaz. On this path, Minister Luis Caputo, judge of the Court, will pass through the Summit on Supremo Horacio Rosatti and governors such as Ignacio Torres and Martín Llaryora, among others. The presence of the president Javier Milei is to be confirmed. Thus, on March 12, more than 2,000 people will participate in the Summit to discuss topics such as education, healthcare, bioeconomy and energy.
-How have the expectations of the business sector changed after the new management?
-Expectations have changed completely. Today there are already clear indicators of the direction of this government. Among the changes made is the elimination of import systems and programs such as Fair Prices or Compre Nacional. A concept has been renewed that no longer exists in the world but that Argentina did not have, namely the free commercial administration of companies. It’s a 180 degree change, highly rated.
-Are you worried about governance?
-We believe that Argentina has learned in these 40 years that there should be no governance problems. We do not see the risk that the president will not fulfill his mandateIn any case it will have to coexist with the other spaces. We see no risk of arriving at the De La Rúa situation or the early delivery of Alfonsín.
-The Monetary Fund spoke very insistently about the social situation. How important do you think it is for the government to pay attention to this aspect?
-Any government that finds itself in a situation of strong social weakness should consider this circumstance. In Argentina there is a serious social problem which will evidently worsen in these months due to the loss of purchasing power. Pensioners have lost just 30% in these three months. But thanks to the current update clause, we believe that the adjustment for inflation will allow a recovery of 12-14 points in the last months of the year, with which that lost 30% will become 18%. With this level of inflation, it is in some ways the worst time to generate an adjustment. It is a good idea to eliminate intermediaries and adapt the food distribution system so that it actually reaches the most vulnerable sectors. The problem is that we are in a very precarious situation. I want to think that you will be able to make the necessary changes. Argentina did not have many alternatives other than transformation.
-What do you think will happen this year with investing?
-There are three types of investors. On the one hand, speculative investors who invest through financial instruments. Bonds are already recovering and country risk is decreasing, but Argentina must lower by 400 basis points and today it is at 1500. These investments will depend on signs of stabilization and recovery of confidence. Secondly, the production investment of companies already present in Argentina will depend on the segment. The installed capacity in consumption is sufficient, especially after the decline in the first two months, which means that there are no large investments in infrastructure, nor in mass consumption in these sectors of industry, nor in particular in manufacturing. And then there is the third group, the companies that are not in Argentina. In this sense I don’t see 2024 as an investment year. We have to wait, at best, until 2025 and see how the economy will behave in the second half of 2024.
-Could the rise in stocks be a turning point to attract more investments?
-The rise in shares gives you the certainty that you don’t have today. For example, today it is not possible to issue dividends. But for this the State must set other conditions. Now it is necessarybut not enough. Then another element appears, which is trust.
-This government wants to change many rules through a DNU. What kind of certainty does the private sector have that the next government will not back down?
-The challenge of this administration is cultural: to replace the world’s agreed upon concepts in the midst of an absolutely vulnerable and destroyed social structure. What there has been less of in the last twenty years is social justice. Today we have more poor people, fewer private employees, more public employees. We continue to argue about whether the state should be big or small and we lose sight of the fact that the state must be efficient. Today, Argentina’s tax burden is in line with that of OECD countries. That is, we have a public health, education and security service like Bangladesh, and the private system has the same fiscal cost as Norway with 40 or 50% informality. That’s why they have to change the tax burden. Until this happens, there will be no employability for small businesses.
-How will the bilateral relationship with this administration evolve and how decisive will be who will be the next president of the United States?
-It is clear that the relationship between Argentina and the United States It is the most important of the last 20 years. I think the Democratic administration understands this Argentina is the carrier partner of the Southern Cone. This is very clear and I would say that it started in April 2023 with the bilateral between Alberto Fernández and President Biden. This shows that it was not the presidents’ problem. From the American point of view, a potential Trump victory changes nothing with Argentina. Milei is very aligned with the West, so I don’t think there is any negative relationship with Donald Trump’s appearance beyond the global view of him.
-Are you worried about Milei’s confrontational style?
– You may or may not like the conflicting style or manner. But it is not up to us to make this assessment. We measure the results: not so much the how, but the what. Yes, that’s clear it’s going in the right direction, So we wait for the results to be achieved. In any case, the key will be the speed of the transformation, but not the conviction to do it.
Source: Clarin
