In addition to giving a special speech at the edition of the World Economic Forum held in Buenos Aires between Tuesday and Wednesday, Javier Milei received the leadership working for the famous business meeting mechanism that meets January after January in the luxurious Swiss village of Davos. Among them were former Norwegian Foreign Minister Børge Brende, now president of the WEF, and Marisol Argueta, regional director of the World Economic Forum.
After a speech in which he attacked the legendary Forum earlier this year, the Milei government asked produced in Argentina a version that is the one that happened yesterday. And this was the second time that Davos met in Buenos Aires as during the Macri government. Yesterday Milei assured him will be in Davos at the end of January for the new edition of the Forum whose motto is “Collaboration in the intelligence era”.
In his speech Milei delighted the ears of investors by saying that he had succeeded in putting a brake on the State. Clarion interviewed Brende this Wednesday at Alvear Icon, where tight security showed little sympathy for the press. The official said he was optimistic about the country’s progress and warned that the risk is that the reforms undertaken will lead to regression.
What are the most attractive things about Argentina today in best terms and the most dangerous things that Argentina reflects in the world for investments?
Today we had with us more than 50 business people from 16 countries. And many of these things came up in the discussion. I think what is good for Argentina, which has had the lowest foreign direct investment of any major economy for the last 15 years, is that we are seeing a change. I think what’s obvious is the mining sector. There is great interest in copper and lithium. I think that even in the energy sector there are many opportunities related to shale gas in general. First, there is already a strong agricultural sector accounting for 50% of soy and beef exports. I think there is interest in investing in modernization and technology as well. Today we also heard that there is interest in using Argentina as a center for new technologies, artificial intelligence machine learning, because these centers need a lot of energy. So here there is energy available and there are human resources. The tricky thing is that Argentina’s economy is not out of the woods yet. This year it is contracting. For next year we expect growth above 3%. Sure, that’s fine. Inflation has come down a lot, but it’s still there and remains high. What international companies that are looking at reforms tell us. They see that the reforms are sincere. But what is also the risk that Argentines will tire of the reforms and then return to a situation without reforms? And what impact will it have on your investments? I think it’s a question.
What does it mean that the change is so extreme that there is a fear of a return to the populism and protectionism of the past, as during the Kirchner government?
I phrased it a little differently than that. I’m trying not to get involved in Argentine politics. This is not the role of the World Economic Forum. But what we hear is that there is a lot of interest in investing in Argentina. And I think a lot of companies also understand that this might be the right time because if the economy starts to really grow, things are going to get more expensive as well. So, as we know, investors also want to intervene when they see something moving in the right direction. And there is optimism among global companies, interest in Argentina, Argentina. That’s for sure. But what I’m also saying is that if billions of American dollars are invested in the country and now there is deregulation, there will be less bureaucracy. There is also a policy that invites you to look. They would like that, if they invested their money, we would also like these reforms to continue.
This is why the fear is that the reforms are not complete…
I believe that reforms are not easy even for the Argentine people. The reforms continue today. But obviously if you are in a situation where you will see the results of the reforms. Welcome to the future. First of all, people may feel tired and even frustrated. But what companies have said today is that they think there’s no going back.
National or international companies?
All companies said they believe their reforms will continue. And, of course, there can always be a question of pace and speed. More than ten months have passed so far. There have been fundamental reforms. And I think this will also be something that companies will follow very closely. But these are things that are up to the Argentine people to decide. You know, we’re just looking at it.
What has been said about the much-cited “exchange rate trap” in Argentina which, despite promises, the Government has not yet opened?
That wasn’t one of the questions asked by the international business community today, because the way we did it was we also had a lot of cabinet members. All ministers were present and answered questions from the national business community. So this regulation of capital inflow has not emerged and capital outflow has not emerged as an important issue in such matters. What has emerged is how all the infrastructure and reforms will continue. What are the investment opportunities in the mining sector, what are the investments, the opportunities in infrastructure? What else these specific questions.
Both the state government. The United States and financial organizations, including the International Monetary Fund, asked the Milei government, given the enormous adjustment of the economy, to remember the most vulnerable. Is this a problem between you?
This is a very challenging balancing act because fiscal measures had to be taken because the deficit was huge and 200% inflation was hurting the poor the most. So that had to be under control too. But what is incredibly important for the government is that growth returns because without growth, the government will have no money to spend in the future on either education or infrastructure. That’s why I think it’s good to predict 3.5% growth in Argentina next year. And with growth also comes the opportunity for government to prioritize. Where do you want to prioritize? Do you want to invest it in science, education, healthcare? But we at the World Economic Forum don’t go in and make concrete recommendations about it. But for my part, what I know from what has been very clear is that if the economy doesn’t grow…. Combined with this type of hyperinflation, it’s a toxic situation. And the Argentine economy needed to be stabilized. And now it starts growing again. Then Argentina too will be able to make its own decisions. Where do you want to allocate this money? So you want to reduce your deficit further? Do you want to give it as a tax cut to the people? Or do you want to do more social programming? But this depends on Argentine decision-makers.
What differences do you find between the Milei who went to Davos and shouted at everyone that they were communists and socialists and the one you saw now at your rally?
I had a meeting with the president before I went to the meeting where he spoke. And then we had a meeting at the presidential palace and then I financed it very practically. We finance it by looking at what needs to be done in Argentina to recover growth and control inflation. When we were at the presidential palace, he also said that he appreciates cabinet meetings where they are very granular and when they can get into the necessary policy actions. So I see that today the president was very practical and very involved in the details of the reforms and was less concerned with geopolitics. It was more about the economic reforms in Argentina, how they are going. In Davos he confirmed his participation (next meeting in January) as we can also guarantee that he will meet future investors. And there’s a lot of interest as we’re hosting a lunch for 30 global CEOs that I think will be like half an hour after we open that there’s a lot of global interest in Argentina. And let’s also not forget that despite its great economic challenges, it is still a G20 economy, it is still a large economy with, you know, vast resources. Yes, 50 million, 48 million people, vast resources. So I think the president is now capitalizing on that momentum. And today it exerts a lot of fascination on the international business community.
Speaking of the G20, don’t you think that the anti-multilateralist, anti-consensus and ultra-conservative discourse of the Milei government regarding gender policies and the fight against poverty and climate change could ill-welcome the most liberal and progressive investors?
That’s why I think it’s true that politics in today’s world is complicated. Sometimes it even becomes identity politics. And this is something that we are seeing in many parts of the world, not only in the United States, but also in Europe. But I would say that given the size of Argentina, the ongoing economic reforms and the opportunities, I think what I heard today with the CEOs and the works council is that they have focused more on this. The other things, as we know, are not so interesting. And furthermore, if we look at the situation from a bird’s eye perspective, we consider the United States which is now the most successful global economy. It’s growing and they have a very polarized political system. But the economy is still doing well. So there are a lot of paradoxes here. So it’s nothing the forum can get into. We are as careful as the press in this.
So, if ten months have passed since the Milei government, what are companies waiting for to announce investments that they have not yet announced?
I think this is now like a snowball effect. You know, at first the snowball is very small, but if it starts rolling it goes faster and gets bigger. So what Argentina has to hope for is that the interest now is such that we can see a snowball effect. However, I wouldn’t say we are facing a snowball effect, but now there is a potential snowball buildup and those mountains can start rolling if things go right.
Source: Clarin
