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Argentina: a strategic destination for productive investment. Undersecretariat for Investment Development and Trade Promotion Ministry of Foreign Affairs and Worship 2013. Why invest in Argentina?. Why invest in Argentina?. Sustainable economic growth Attractive business profitability

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Argentina: a strategic destination for productive investment

Undersecretariat for Investment Development and Trade Promotion

Ministry of Foreign Affairs and Worship

2013



Why invest in Argentina?

  • Sustainable economic growth

  • Attractive business profitability

  • Strength to face the global crisis

  • Strategic location

  • Openness to the world

  • Diversified economy

  • Abundant and diverse natural resources

  • Skilled and highly creative workforce

  • High levels of scientific, technological and productive innovation

  • Modern infrastructure and high-quality connectivity


Sustainable economic growth a dynamic economic model based on social inclusion

1

Sustainable economic growthA dynamic economic model based on social inclusion

.

Argentina boasts the highest economic growth in the region

  • One of the fastest-growing countries worldwide: leader in Latin America for the past decade.

  • Sustainable macroeconomy: sustained external surplus, accumulated international reserves, substantial reduction in public debt and fiscal solvency.

  • Record investment rate for the last 30 years in 2011 (22.8% in 2012).

  • Record-high exports close to US$ 100 billion for goods and services in 2011 (US$ 96 billion in 2012).

  • Dynamic domestic market: private consumption has grown at an average rate of 7% per year in real terms since 2003.

Average growth rate of GDP

(2003-2012)

Source: Ministry of Foreign Affairs and Worship (MREC) based on IMF


1

Sustainable economic growthA dynamic economic model based on social inclusion

Argentina ranks as a very high human development country (UNDP)

  • Five million new jobs created; a decrease in unemployment levels from 21.5% in 2002 to 7.2% in 2013.

  • Economic policies prioritize socioeconomic integration and social inclusion as primary goals.

  • Improved income distribution: the Gini ratio reduced from 0.53 in 2003 to 0.42 in 2012.

  • Inclusion of the most vulnerable age groups into social security coverage; substantial reduction in poverty and indigence levels.

  • Ranked as a Very High Human Development country in the United Nations 2012 Human Development Index.

GDP per capita (PPP)

In thousands of currentinternational US$ (2012)

Source: MREC based on IMF


Attractive business profitability productive investment delivering high returns

2

Attractive business profitabilityProductive investment delivering high returns

Argentina offers high profitability for FDI

  • High profitability in a wide range of productive sectors.

  • New record-high profits from Foreign Direct Investment (FDI) as a percentage of assets, with the annual average exceeding 9% in the last four years.

  • Profits over sales above 13% for the 500 non-financial private companies in 2006-2011.

  • More than 2,000 multinational companies operating in diverse sectors share a long-term vision and renewed investment commitments.

FDI profits (as a percentage of assets)

Source: MREC based on Argentina’s National Institute of Statistics and Censuses (INDEC)


2

Attractive business profitabilityProductive investment delivering high returns

Profitability as a percentage of assets

(2010)

Argentina offers profitable opportunities in a wide range of sectors

Source: MREC based on Argentina’s Federal Administration of Public Revenues (AFIP)


Strength to face the global crisis effective public policies aimed at fostering demand

3

Strength to face the global crisisEffective public policies aimed at fostering demand

.

Argentina registers sustained growth in the face of the global crisis

  • An inclusion-based model for growth, in which the strong and dynamic domestic market is one of the key pillars.

  • Proven ability to sustain the economic growth cycle from the on-start of the global crisis, exceeding the average of emerging countries.

  • Low level of public debt and high level of international reserves, increasing capacity to implement counter-cyclical public policies.

  • Job protection and social inclusion policies drive domestic demand and production.

  • Investment promotion initiatives such as credits facilities for the productive sector and a construction plan to build 400,000 homes.

Annual average variation of GDP

(2008-2012)

Source: MREC based on IMF


Strength to face the global crisis effective public policies aimed at fostering demand1

3

Strength to face the global crisisEffective public policies aimed at fostering demand

Public debt as a % of GDP and variation in percentage points (2007-2012)

+41%

+28%

Argentina is pursuing its debt reduction goal despite the global crisis

-20%

+4%

Source: MREC based on IMF


Strategic location strong ties with latin america

4

Strategic locationStrong ties with Latin America

Argentina is part of a dynamic region strengthening its ties

Intra-MERCOSUR exports and MERCOSUR exports to the world - 2002=100 index - In millions of US$ - Annual average growth rate 2002-2012

  • Located in a region endowed with resources to meet current and future local and global demands.

  • Strategic player within the main food exporting region in the world.

  • Share of world resources: 27% of potable water; 12% of arable lands; 21% of native forests; and sufficient hydrocarbon resources to satisfy demand for more than 100 years.

  • A motor for Latin America’s increased integration in terms of economy, politics, society and culture.

  • High economic growth, an expanding domestic market and a dynamic middle-class.

+18.6%

+13.6%

Source: MREC based on the Center for International Economy (CEI), INDEC and IMF


Strategic location strong ties with latin america1
Strategic location Strong ties with Latin America

Full MERCOSUR member, together with Brazil, Paraguay, Uruguay and Venezuela:

Preferential access (0% tariff) to a regional market of 279 million inhabitants and aggregate GDP of US$ 3.6 trillion.

Great industrial complementarity and opportunities to deepen productive specialization.

Member of UNASUR (Union of South American Nations); ALADI (Latin American Integration Association); and ECLAC (Commission for Latin America and the Caribbean).

Regional leader in the defense of the democratic institutions in Latin America

Open and welcoming immigration policies in place with other countries in the region.

Member countries

Associated countries

Associated countries

(under ratification process)

4


Openness to the world global economic integration
Openness to the worldGlobal economic integration

G-20 Member.

Active presence in several international organizations, including the World Trade Organization, G77+China, United Nations, UNCTAD, ECLAC and FAO, among others.

Global economic insertion and expanding South-South cooperation ties.

Strengthening of the bilateral relations with the BRICS as well as other developing countries.

Highly dynamic exports, with values tripling over the past eight years.

Diversified export basket with shipments to more than 150 destinations.

Trade growth with the rest of the world (2003-2012) of 14.6% per year.

One of the countries with the least restrictive FDI legislation in the world: 11th worldwide, 2nd in G-20 and 2nd in Latin America (OECD).

Open multicultural society without ethnic or religious conflicts.

5

Argentina expands its exports in all economic sectors

Exports by major items

In millions of US$ (2002-2012)

Source: MREC based on CEI


Diversified economy investment opportunities in every productive sector of the economy
Diversified economyInvestment opportunities in every productive sector of the economy

Diversified productive matrix with investment opportunities in every sector.

Great technological development in the agrifood value chain, including innovation in seeding, direct sowing, precision agriculture, agricultural machinery production, silo bag storage and vaccine development for animal health, among others.

Leading country in the international food market, with exports exceeding US$ 25 billion (2012).

One of the world’s main exporters of oils, cereals, meat, fruit, honey and wine.

High sanitation and environmental standards that meet the most demanding requirements from global food and beverage consumers.

Industrial structure with a strong tradition in countless diverse productive sectors: agroindustry, textiles, footwear and handbags, chemicals and pharmaceuticals, capital goods, durable consumer goods, automotive and auto parts.

6


Diversified economy investment opportunities in every productive sector of the economy1
Diversified economyInvestment opportunities in every productive sector of the economy

6

Argentina has a diversified economic structure

  • Dynamic growth of industrial exports (13% per year in 2003-2012), gaining share in total external sales.

  • Accelerated development of renewable energies, biotechnology, software, creative industries and other frontier sectors.

  • Main tourism destination in South America, with almost six million tourists per year in 2011.

  • Highest proportion of FDI projects with high technological intensity in South America (ECLAC).

  • Increase in the productive capacity of domestic and foreign companies, with 97% of FDI flows being directed to new projects and expansion (compared to 43% in the 1990s).

Gross added value per sector

Average growth rate per year (2003- 2012)

*Including: Financial intermediation; Public Administration and Defense; Teaching, health and social work; Other community. Social, personal and domestic services.

Source: MREC based on INDEC


Abundant and diverse natural resources rich resources available for sustainable development
Abundant and diverse natural resourcesRich resources available for sustainable development

7

  • Second largest country in Latin America; 8th in the world:3.8 million km2.

  • Highest agricultural productivity levels in the world.

  • Vast extension of fertile land for agriculture: 9th largest extension of agricultural area in the world with 147 million hectares of arable lands (FAO).

  • Ample forest resources: more than 33 million hectares of native forests and 1.2 million hectares of planted forests (FAO).

  • 4,500 km of mountain ranges with mining resources: gold, copper, lithium, carbon, lead, zinc, tin, silver and potassium.

  • 4,700 km coast along the Atlantic Ocean with rich fisheries.


7

Abundant and diverse natural resourcesRich resources available for sustainable development

Exports – Main products (2010)

  • Vast oil and gas resources with exploration and exploitation opportunities.

  • Ranked 2nd and 4th worldwide in shale gas and shale oil reserves.

  • High development potential for hydraulic energy, which accounts for more than one third of the country’s total electricity output.

  • Promising developments in renewable energy (wind, biofuel, solar, geothermal, biomass).

Source: MREC based on FAO


Skilled and highly creative workforce argentine talent
Skilled and highly creative workforceArgentine talent

8

  • Workforce internationally renowned for its skill set, creativity and versatility.

  • More than 99,000 graduates from higher education programs and almost 11,000 postgraduate students from 115 universities across the country enter the labor market each year.

  • Economically active population (EAP) with the highest education level in Latin America.

  • Latin American country with the highest number of Nobel Prizes awarded in science (three prizes).

  • Highest level of public investment in education in the region (equal to 6% of GDP).

  • The most dynamic work productivity in the region in recent years (ECLAC).


8

Skilled and highly creative workforceArgentine talent

Argentina bets on education

Public spending on education to GDP - in %

(2011)

EAP’s average number of years of education in urban areas (2011)

Argentina’s workers have the highest education level in the region

Source: MREC based on ECLAC


High level of scientific, technological and productive innovationToward greater competitiveness and higher added value

9

  • Development of knowledge and technological skills at the service of productive activity.

  • Creation of the Ministry of Science, Technology and Productive Innovation in 2007.

  • Scientific and Technological Pole (opened in 2011) recognized for its contribution to scientific development, production and dissemination of knowledge.

  • Fifty five per cent increase in the number of R&D professionals over the period 2003-2011.

  • Highest ratio of researchers to the economically active population (EAP) and ranked 3rd in terms of the number of R&D technicians, measured as total number per million inhabitants in Latin America (World Bank).


High level of scientific, technological and productive innovationToward greater competitiveness and higher added value

9

Argentina invests in R&D

  • About 500 researchers and 1,000 research fellows join the National Technical and Scientific Research Council (CONICET) each year.

  • Largest number of nuclear plants in Latin America: Atucha I, El Embalse and Atucha II.

  • Development of aerospace projects led by INVAP, a public company of world renown for satellite development and other space projects.

  • One of a few countries in the world with multispecies cloning capacities.

Investment in science, technology and R&D activities

2003-2010 (% of GDP)

Investment in Sc & Tech

Investment in R&D

Source: MREC based on the Ministry of Science, Technology and Productive Innovation


Modern infrastructure and high quality connectivity a strong network in expansion
Modern infrastructure and high-quality connectivity innovationA strong network in expansion

10

  • Public investment at a historic high (going from 0.7% of total public spending in 2002 to 3.5% in 2011).

  • Well-developed transport and infrastructure system: more than 39,322 kilometers of national roads and 195,837 kilometers of provincial roads; one of thelongest rail road networks in the world(36,000 kilometers); 43 ports and 54 airports.

  • High rates of internet penetration into companies and homes.

  • 2nd country in Latin America with the highest number of mobile lines per 100 inhabitants (World Bank, 2011).


Modern infrastructure and high quality connectivity a strong network in expansion1
Modern infrastructure and high-quality connectivity innovationA strong network in expansion

10

Investment rates at constant prices

Linked series: total, public and private investment (% of GDP)

Argentina increases its productive capacity

Source: MREC based on the Ministry of Economy (MECON)


Thank you! innovation


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