Depending on whom you ask, Argentina can either be a land of endless opportunity or a mirage luring investors with an exaggerated sense of optimism.
Atlantans doing business there land somewhere in the middle, albeit with the consensus that the South American country’s recent progress is real and promising.
“The picture is fine, but the movie is encouraging,” said Guillermo Wasserman, an Argentine principal for international law firm Wasserman West, said during a World Trade Center Atlanta forum on the country Feb. 21.
In other words, the long-term growth trajectory is looking positive, even if the route to get there isn’t crystal-clear.
Gradual change has already taken root. Argentina has always had good laws on the books, but it’s now enforcing them more evenly and predictably, Mr. Wasserman said. And some reforms that would have been unthinkable under the previous populist Kirchner government — like shoring up the pension system and removing subsidies for electricity and gas — have already been achieved despite proving unpopular among rank-and-file Argentines.
The question in the last two years has been whether the government of President Mauricio Macri, who won the 2016 elections, would have the staying power to enact his ambitious economic agenda.
Since then, Argentina has returned to financial markets with a flourish after a long period of self-imposed isolation. But that speed has come with political risk.
“The medicine could kill the patient,” Mr. Wasserman said, as too much reform too quickly could prove unpalatable to voters. Inflation stood at about 20 percent in 2017, and much of the low-hanging economic fruit is already gone.
Mr. Wasserman, who is fond of analogies, compared Argentina’s work so far to an airplane trying to crack the sound barrier and get to cruising speed.
“I think we are at the point where we are struggling to pass it, and we are not quite there yet,” he said.
Last fall, at least one key question about the future was answered. Mr. Macri’s Cambiemos coalition received 40 percent of votes in the mid-term elections, gaining legislative seats and influence as well as outperforming expectations in local races like the all-important Buenos Aires mayoral contest.
Christian Louis, senior vice president for international corporate banking at BBVA, a Spanish bank with offices in Atlanta and across the Americas, said the result could give investors confidence that Mr. Macri’s reform agenda is sustainable, reducing political risk.
“Businesses start to say, ‘We can see a path ahead,’ and you can start to plan on that. That’s great for Argentina,” Mr. Louis said.
The change in climate has been stark, said David Campos, an Atlanta-based vice president focused on Latin America for Kimberly-Clark Corp.’s professional division.
“Literally two years ago, it was going the way of Venezuela,” Mr. Campos said, citing Mr. Macri’s unexpected victory as Argentina’s turning point. “The election of Macri completely changed the game.”
That said, Kimberly-Clark has always bet on the country for the long run, he added. With more than 1,000 employees and a global innovation hub based there, the company is “bullish” on the future, though it’s also no stranger to the fits and starts the country has experienced in the past — including political upheaval and dire financial crises.
A positive side effect from all this, though, is a class of executives that have learned to adapt quickly to challenges.
“The managers and leaders we get from Argentina are able to turn the ship on a dime, “ Mr. Campos said.
That same flexibility, paired with Argentina’s strong (and free) higher education institutions, has helped forge a healthy innovation ecosystem. Despite limited access to capital, a thriving software scene has presented itself to the U.S. as a closer (and more culturally congruent) alternative to traditional outsourcing destinations like India.
The country is home to four of nine Latin American “unicorns”: private tech companies with a billion-dollar valuation, said Mariano Saldaña, managing director of Lanin Technologies LLC, the Atlanta office of the Argentine software firm. Surprisingly to some, Argentina has a lot of bilingual talent as well, Mr. Saldaña said.
“Maybe I’m the exception that confounds the rule,” he said jokingly, “but I’m trying very hard.”
Josh Weinrobe, a media consultant who worked with Argentina often during 12 years with Atlanta-based Turner Broadcasting, agreed that the country’s entrepreneurial scene has been shaped by its unique history.
“It’s very vibrant,” Mr. Weinrobe said, adding that Atlanta firms in technology and entertainment should begin to pursue partnerships with Argentine counterparts.
Santiago Bellasi, whose MK Element Consulting works with major international companies on their Argentine operations, says optimism is returning somewhat thanks to sentiments like these. Labor unrest is down, even if technical labor reform is far off. Practical matters like sending money across borders or getting access to U.S. dollars have become much less cumbersome.
Mr. Bellasi said he’s bullish on opportunities in technology, energy (especially oil and gas in the Vaca Muerta region in the south) and agribusiness, a traditional strong suit of a country that has plentiful land and water.
He added that a recovery in Brazil, Argentina’s neighbor and top trading partner, will help “lift all boats” in the region, cautioning investors to look at a regional strategy if they’re considering an Argentine office.
To wrap up, other panelists added words of advice for market entry, from crafting a clear exit strategy in advance to the necessity of finding suitable business partners on the ground.
Overall, they seemed to land on a common sentiment: Don’t jump the gun, but don’t be too gun-shy either.
Karen Loch, president of the World Trade Center Atlanta, moderated the panel discussion.