thepoliticsandeconomicsofdevelopment.docVIP

The Politics and Economics of Development Business 487 Prof. Marvin Zonis Argentina Country Report 24 April 2000 William Dauska Susanna Matter Troy Meinhard Brad Simon Unislawa Wszolek Sponsors: CNA Financial Deutsche Bank Diamond Technology Partners Pfizer Executive Summary We believe that Argentina will be a good place for investment over the next 3 to 5 year period, with even better prospects in the long run. Argentina’s investment climate will grow increasingly business friendly as new laws are passed which aim at reforming current impediments. With the peaceful transfer power following the recent presidential elections, Argentina has shown both itself and the world that its newfound democracy is firmly embedded. While the new government may not be as strong as the previous regime, it is still in a position to enact legislation that will have a significant and positive impact on the economy. However, it is critical that the government uses its influence quickly and decisively. It is imperative that the government wins the trust of the general populace, giving them confidence that it can have a positive impact on their lives. Based on our analysis of primary and secondary research, we believe that the following factors are of critical importance to the near-term (3-5 year) prospects for Argentina’s economy: Economic Investment and growth will increase when Argentina consistently controls its deficit spending, balances its current account, and insulates itself from the economic volatility triggered by other “emerging market” economies in the midst of financial distress. Access to domestic debt and equity markets is highly constrained and inefficient. Alternative financing structures are proliferating, but successful investments are still highly contingent upon participation from the global financial community and multinational corporations. Argentina will attract cost effective, diversified, and sustainable investment when participants