Isela Costantini: “Inflation is the main fire that Argentina must put out”

Isela Costantini does not speak much to the press. After his tenure at Aerolineas Argentinas, known as one of the most influential executives in the world, he led GST Financial Group and opted for low profile.

Five years after his departure from the flag carrier, Costantini led a growing finance holding company. The final bet is the purchase of insurer Met Life’s operations in Argentina, whose merger and merger process with the company he heads takes more than six months. In the dialogue with ClarionCostantini evaluated the business’s financial potential in a difficult situation.

– He landed at ST Group in 2017. At that time the projections for the economy were very different from the present. What bet is the group making to continue investing in Argentina?

– The shareholders are in the real economy: concessionaires, farms, energy, oil … But when I entered I said: I’ll make a line, let’s fix the financial, we can work together but separately to be able to organize. good. They continue to have an investment interest in Argentina. What I’m trying to do is fix what structured growth is. There is a combination between the DNA of shareholders who want to find a way to thrive in the country and the peace of mind that there is a team that can fulfill those ambitions. Sometimes you want to do the x thing but you can’t find anything that will help you. The fact is that we have a very well armed team, which can really take on a new company, carry out the whole process of buying a company, how to integrate that company into the organization.

– Regarding expectations, do you see more appetite of international investors for the country in the face of a new electoral scenario?

– There will always be an appetite for opportunities in countries like Argentina. The issue is who wants to bet in the long run. One sees that throughout the life of the country, foreign investors are coming in, but whoever wants to join must be prepared to face our ups and downs and in that sense it is important that they see that within the ups and downs of curve can be improved. This is an interesting country in terms of quantity. It doesn’t stop, but it does have risks. The issue of credibility and the anticipation of what will happen next year in the election is still an important point. That weighs on any country, it happens in Chile, it happens in Colombia. Politics in countries is still closely related to economics and monetary policy. Investors may come from abroad who know or can ally with people or interact with those who are here and know the market and how to govern Argentina. At the bank and in our SGR, 45% of our clients are SMEs. We don’t see too many people interested in going to invest.

– What do SMEs need today? Do you see the rebound from last year’s activity continuing?

– They need customized financing. We’ve been a bit of a financial consultant. The investor in it is not stuck, he needs to keep his business running. We continue to see interest in continued investment. If we look at what the capital market is, we have grown significantly from 2020 to 2021 and this year we are growing more. I don’t know how much we’re stealing from the market, or if the market is growing itself. But we saw no slowdown in that matter.the

-Do you consider that the Monetary Fund agreement was able to clear expectations for the economy?

– I think, as a person you need to have hope to continue developing. It’s very important to close the deal, regardless of whether it’s good or not, but say “done” and see what the next step is. And the need and the ambition come and see how we move forward. I think this is an important milestone, because if it is not closed we will talk about other measures and other political, economic and social situations. But there is still a series of questions coming up to advance the situation

-In that sense, do you see that the Government has the capacity to achieve the goals set?

– I do not know if there is an option not to comply with the Fund. The question is how do we trust ourselves as a society, with all the difficulties we have. The poor don’t care about the IMF, they don’t care about inflation, they think if tomorrow they will have something to eat. Whether there is inflation or not, you don’t have a problem. In this scenario, it is up to those who can contribute how to deliver what is needed so that we continue to have a clear terrain of credibility to build everything that needs to be built.

– And at that point, do you think, credibility can be affected by insiders within the Government?

There must be a vocation to unite the positions. The one who chooses politics is because he has a vocation for the public. This should be the vocation to one, to one outside the Government. I experienced it from the inside and the dynamics were very complex: there was a lot of interest. But leadership is needed to try to contain as much as possible. This is a difficult thing. I have a theory that crises have always existed, in the country and in each other’s personal lives. But the secret is that we can have a plan so that at the beginning of the crisis we know how to act. It is very difficult to put out fires anywhere. No dying fire. The big challenge is how to provide a little bit of stability

– How do you evaluate the leadership of the President and his Minister of Economy?

I think it’s easy to give an opinion from the outside. There are many things one misses. I feel a lot of focus has been given to the Fund discussion. There was so much urgency in closing that agreement that looking at how it would be managed or what the economic plan was was not the priority at the time. But that is what is seen from the outside. Beyond the internal, period, one expects a plan of how to manage the economy.

– Of all the fires you mentioned, which do you think is the most immediate?

Inflation, which in turn leads to a domino effect of what is returned. This is the most important thing. I think, there are things that are starting to become endemic: when someone sees a society that is accustomed to inflation and doesn’t make any noise to see that we have inflation of 50% 60%. There is an issue with us that is beyond the Government. I think, at this level of inflation, everyone is getting lost in what is the right price level of things.

– Business life, life insurance and retirement, have to do with the long term. How is it developing in a highly volatile country like ours?

The Argentine spends his time thinking about the dollar and how I save on the dollar. Now we are also talking about crypto, a lot of young people are going to crypto. But we from the sector have a need to continue to work on raising awareness on other forms of savings, such as retirement insurance or life insurance with savings. We need to talk to young people to help them understand that waiting for retirement is useless and when that time comes they realize that how much they have contributed is useless and they have other ways of aging to ensure that the lifestyle they have now can have when they are older.

– Is that change of consciousness possible?

One might say that if you are worried about how you are paying your bills on a day-to-day basis, how are you going to think about the future. But when someone realizes that this is a situation that has been repeated over years and generations and listens to the father, the grandfather has gone through the same … You have the opportunity to do something different and to invest a way to guarantee these savings. . Now when it comes to accessing dollars as a way of saving, it is more restricted and more difficult than buying a policy and that I can ensure that by paying it every month in pesos I will have something insured. There are easier options than thinking of a thousand alternatives to beat inflation.

– At this time, are there medium and long-term options in the capital market? Or is everyone put into indexed debt?

In the bank, we do a lot in the short term, but in the management company more options appear in the medium term. There are uses. It is not the country that will provide the medium and long-term guarantee. But now I think that with a threat of world war, there are so many variables that the long term is in doubt in all countries. Now there is more risk in that long period than in the last three years. For example, the pandemic, with no one imagining what it would generate in the short term. The meanings of danger and lasting peace of mind have changed.