FDI in Argentina after the crisis ~Stefan Stoev ~Babawande Afolabi “The Ever Wavering Tide”

Presentation Overview  The Framework  Down the Memory Lane  The Crisis  Post-Crisis  FDI after the Crisis  Conclusion  References

The Framework… Even though the Argentine FDI has recovered after the financial crisis, it is still a subject of fluctuations.

Down the Memory Lane…  Pre 1990s  Hyper inflation  Floating exchange rate  Negative GDP growth

 Carlos Menem  Convertibility Plan  Curb in Inflation  Increase in FDI inflow  Increase in GDP Down the Memory Lane…

 Negative account balance  Budget Deficit  Huge Borrowing  External Factors Down the Memory Lane…

The Crisis (2001/2002)…  Default on the outstanding public debt  Increase in unemployment and increased poverty  Lost confidence in the country’s financial system  Reduced FDI

Post Crisis…  Currency floated and Depreciated  Trade deficit turned into surplus  Government deficit turned into surplus  Economic growth reached 9%  FDI picked up

FDI After the Crisis…  There is still a lack of confidence “What is frustrating isn’t just that the first image of the country has tended to obscure the second, it’s that many foreign economists still are looking for excuses not to acknowledge the success story.” Alfonso Prat-Gay Central Bank President

FDI after the Crisis YearAmount (US$Billion)  Mounting Shortfall in Gas and Power Production  Speculation about current economic growth  Government controls *

FDI after the Crisis…  Concentrated in the Construction industry till 2004  Now concentrated in the Manufacturing industry  Increased investment in the energy sector

Conclusion Even though the FDI has risen quite beyond the fall of 2001, it’s still contending with inconsistency and gradually lagging behind when compared to fellow Brazilian and Mexican big economies.

The Economist, The Economist Intelligence Unit. Retrieved May 30, 2007 from Encyclopedia Britannica (2007). Argentina. Retrieved May 30, 2007 from Central bank of Argentina (2007). Monetary Policy. Retrieved May 29, 2007 from Argentine Government (2007). Economy. Retrieved May 29, 2007 from Background notes. Argentina, Retrieved May 29, 2007 from Proquest (2007), Investors in Argentina feel burned. Retrieved May 29, 2007 from Data Processing Information Architects (2007). Argentina FDI. Retrieved May 29, 2007 from References…