On the Country´s Efforts to Develop Its Presence on the Global Stage
What message does the G20 presidency send to local and foreign investors about Argentina?
PEDRO VILLAGRA DELGADO: Organising the G20 Summit is both a challenge and a privilege for Argentina, and it certainly represents a vote of confidence. At the same time, it sends a strong message to the international community that our country is returning to normal economic and fiscal policies, as well as embracing the long-term growth targets set forth by President Mauricio Macri’s administration. This truly represents a paradigm shift in how Argentina approaches its national economy, including multiple and significant outcomes in business and social spheres. The G20 is the perfect opportunity to show our commitment to this change. The world will be looking at us in 2018, and we are determined to prove that we are ready to deliver.
The local private sector will also be paying close attention to the G20 Summit, participating actively through the Business 20 Engagement Group. This will act as an incentive for the government to converge with global economic growth policies and promote an environment of trust among international players as Argentina re-enters the global arena.
What would be the immediate consequences of Argentina’s entry into the OECD?
VILLAGRA: Argentina is in the process of re-establishing numerous links with the international community. Today, we have the right conditions to enter the OECD, and we have received substantial support from the organisation. An important consequence of Argentina’s entry into the OECD would be the incorporation of certain standards and guidelines in terms of regulatory framework, processes and best practices. This would facilitate not only the best relations within the OECD, but also provide a referential benchmark for international investors. We are working to establish the right set of rules and regulations to guarantee compliance and facilitate greater investment.
To what extent can the government boost transparency and promote the formal economy?
VILLAGRA: This is a central pillar of any advanced democracy. Argentina is already taking important steps to bring in the necessary legal and judicial framework, which, in the end, will serve to boost trust from investors.
Progress mainly involves simplifying bureaucratic procedures, as an excess of red tape hinders business activity. This has a direct impact on the performance of the country’s small and medium-sized enterprises (SMEs) in particular, who are less able to shoulder the disproportionally high cost of bureaucracy. Since SMEs account for more than 40% of Argentina’s total GDP, it is here that we need to channel our efforts.
How is Argentina balancing efforts to foster greater regional market integration with efforts to build individual alliances with strategic partner countries?
VILLAGRA: From a commercial standpoint, Mercosur provides a suitable framework for greater trade activity, which obviously has a positive impact on our economy. However, Argentina is on a long-term path for growth, and we are looking to explore new alliances together with our Mercosur partners. The problem in the past has been that Mercosur members have not always maintained a common goal, and each country has a track record of prioritising individual interests over those of the block.
This being said, the world today is in a different situation, one that allows for Mercosur to regain momentum and for its success to become a recognisable target for member countries. We certainly need to not only strengthen ties from within, but also build new alliances with other regional blocs, such as the Pacific Alliance and the EU. The culmination of such efforts will be another central pillar for the establishment of clear rules to follow, but at an international level.