Q-1: Mr. Campos, would you introduce the Fundacion Invertir to our readers by explaining us what the main objectives are and who the members of Fundacion Invertir are?
A-1: Our main objective is to promote the attraction of foreign direct investments to Argentina. This is a private institution founded by a group of very important business people but also has the support of the government, the Minister of Economy and the Minister of Foreign Affairs. So our job is to try to provide information to foreign firms about the business opportunities in Argentina and also to help prospective investors with useful guidelines and information.
Q-2: What is the profile of its members?
A-2: Most of our members come from big business groups. They have always thought that if Argentina wanted to grow, we would have to create a good environment for the investments. That is why they have decided to create an institution to present abroad good a reliable information of our country.
Q-3: Which is the main financing source?
A-3: Nowadays, the foundation is supported 40% by government founds and 60% by private membership.
Q-4: You mentioned at the beginning that you have a Web site, which helps you to provide useful information to the potential investors. How else are you trying to reach this clientele”, in order to promote the country?
A-4: We do basically three things. First of all, you have basic information through web sites, newsletters, and some brochures that promote our country. Then, you have to be able to provide specific information to someone that wants to implement particular projects. This stage is very important because the firm does not know if the investment is going to be a good idea or not. So we try to investigate who is asking for the data and guess if there is a reasonable interest. If the interest is true, we help them with some stages without any costs.
Q-5: Compared to nowadays, this country was almost closed to foreign investments in the eighties. During the nineties, Argentina was doing its outmost to attract exactly those investments, although in the last 2 years these figures are decreasing. What is your opinion on this matter?
A-5: I would not say that it was a close economy but it is true that during the eighties, the foreign investments were very low. In the nineties, the privatization period attracts a lot of investments but also changed the macroeconomic framework. In fact, the figures tell us that more or less 70% of the foreign investors were not taking part of the privatizations. After the year 1998, the direct investments slowed down with the exception of Repsol YPF, which was privatized in 1999. In the year 2000, the foreign investments decreased a little but not so much. We are sure that from June 2001, we are going to receive more foreign investments.
Q-6: How do you evaluate the latest measures announced by the minister of Economy, called the ley de competitividad (law of competitiveness)?
A-6: Cavallo had made some decisions regarding to the investments. They are very important, particularly the ones that promote a cost reduction in the capital goods. That means that if one Argentinean firm wants to buy capital goods, either local or abroad, the costs are going to be reduced significantly. This is a crucial measure because the costs of capital goods are too much if you consider that you have to pay a lot of taxes. This is a very specific and concrete measure that had been taken and will improve the investments. We know, of course, from his previous tasks that Cavallo has a faithful personality in terms of promoting investments. He thinks that the only way to grow is through more and more investments.
Q-7: Do you think the law of competitiveness supports exactly those segments of the economy that should be taken into account or should it include more segments?
A-7: Well, of course that we would prefer this law to include more sectors but it is taking into account some policies to reduce sectarian taxes. As you know, we have a problem in our budget. So this has to be done very carefully. The first measure that has been taken is particularly the reduction of capital goods in Argentina. This is a very good signal for us because is saying that we are going to work in order to gain more and more competitiveness.
| Q-8: Will Cavallo be able to regain the confidence of the foreign investors in the Argentinean market?
A-8: There are three actors in this question. One of them are the bonds holders, which are taking the immediate pressure that the government had on the short-term debts. The other investors, who are the ones that I am interested in, are called the direct investors that are firms that come to Argentina. They are mainly interested in the prospects of the country growth. So you need to show them that the country is going to grow in order to attract investments. Mr. Cavallo knows it very well. Unfortunately the last months were very troublesome and the consumption was immediately retracted. The customers postponed its decisions. Of course that this situation has also an impact on the demand and stopped the investments. I hope that the people’s mood would change during this month.
Q-9: There are some sectors, which are still offering various possibilities of further exploitation, such as tourism, agriculture and mining. Are you satisfied with the efforts undertaken to promote investments in those sectors?
A-9: Well, in fact mining has been very successful. As you may know, the mining projects are totally devoted to exports. We had a very important growth on the mining investments. In the last two years, some of the projects were stopped because of the commodity crisis. It is true that we have a lot to do in tourism. We have to do a systematic promotion of Argentina abroad. I am sure that Mr. Lombardi is studying the implementation of some ideas.
Q-10: How would you describe the investor’s mood? What is their main concern?
A-10: I think that their main concern is our growth. The foreign direct investors are concerned about our convertibility system and if the very low inflation is going to continue. These are the two main concerns. That is why I think that it is very important to show them that we are going to grow. This situation would change the mood very significantly. Some people have projects in their minds but they do not implement them because they do not know if this is the appropriate moment. At the beginning of the year, the blindaje financiero (bailout package) gave us some fresh air. This was a new agreement that Argentina made with the IMF. A few months later, Machinea resigned. Afterwards, we had this entire crisis. This is a bad situation because people saw an opportunity and the mood changed but then, it went down again. That is why I think that we put very high expectations on Mr. Cavallo.
Q-11: Mr. Campos, Do you think that in the future Argentina will have closer relationships with the United States as part of the Mercosur, although your main partner - Brazil - shows some restraint in this matter, or will it turn its eyes even closer than today to Europe?
A-11: We have a very strong relationship with Europe. The last decade was stronger because we received foreign direct investments from Europe, particularly from Spain. We have important trade agreements with Europe. On the other hand, we have to operate very intensively with Brazil. We have to push the foreign investments in Latin America and the Mercosur. At the same time, we cannot do it against Europe. This is a very difficult diplomatic movement. We have to operate in these three areas. Argentina decided to continue its relationship with Brazil. All the areas are important for us. If this were agreed, we would not have any problem.
Q-12: As you know our readers are all businessmen and top executives. What is your final message to all this potential investors?
A-12: I would invite them to look at the figures of the foreign direct investments that Argentina received during the last years. A lot of American, European and Asian companies had come to Argentina. If so many people come here is because they had seen that there are important opportunities in some areas. There are good business opportunities here.
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FUNDACION INVERTIR