MilHojas
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The four main takeaways from Argentina Week in New York
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JMHarris
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If the purpose was to attract foreign investment, the event failed. The only announcement from a foreign company came from a Canadian mining firm.
Also, at the event Milei called two of Argentina's leading industrialists names. Why? Not a good look when you are in front of an audience looking for reassurance about your economic reforms.
I don't doubt that the event was "wonderful," as Caputo said. It is always wonderful to deslomarse in New York. Just ask Adorni.
Also, at the event Milei called two of Argentina's leading industrialists names. Why? Not a good look when you are in front of an audience looking for reassurance about your economic reforms.
I don't doubt that the event was "wonderful," as Caputo said. It is always wonderful to deslomarse in New York. Just ask Adorni.
SlowWalker
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I don't think the purpose of this event was to announce deals. Over the last few months Argentina has taken a back seat in the headlines given current events.
$8.5B in USD debt has been raised by domestic companies in foreign debt markets to finance projects since October. These events are probably more directed to the finance community to show them what companies and projects are doing that will likely raise money to fund the expansions. It will also be a time to act as a reminder and advertise what has been going on in the country (labour reform), and what is in the pipeline.
In terms of the calling them names, is it proper for a member of government or bureaucrat to do that? No. But I think two things, 1) he is trying to apply pressure to these guys to realize the times are changing and to be more competitive, not to try to assume or continue the way of the past, and 2) like the article says, the businessmen don't care. They take it on the chin and move-on. For what they lose in manufacturing they likely make back more in their oil and gas and other investments. Its just part of the show.
Ries
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Globally, there are two general approaches to foreign investment in resource extraction, which seems to be what Milei focuses on.
On the one hand we have the "let capitalism do its thing" approach, where foreign companies are given tax cuts, special deals, and exceptions to rules to encourage them to invest and hire locally.
We see the results of that approach in places like Nigeria, with horrible pollution, a few very rich people getting richer, and zero postive affects for the poor, except for the ones who break the pipelines and sell stolen gas and oil.
Same thing with the wonderful Gold mines in Papua New Guinea, which is polluting the drinking water of the still very poor local residents, on a scale seldom seen.
On the other end of the spectrum, we have Norway, which strictly regulates oil drilling in the North Sea, and charges a 50% tax on profits (net, not gross) Somehow, oil companies keep investing there, even though they pay an average Norwegian oil worker around $100,000 USD a year, vs the roughly $9000 USD per year. And Norway invests all that money in a Sovereign Wealth Fund that benefits all Norwegians.
Or Australia, which charges a corporate tax on profits from Bauxite exports of a minimum of 30%.
Australian bauxite miners make around $100,000 USD a year, while in India, the 5th largest bauxite mining country, they make $6500 usd a year.
So when the government actually charges higher taxes, they still get the investments, and better paying jobs, but the resulting oil, or bauxite, still sells for the same global daily price.
A government can knuckle under, or play hardball.
The commodity prices of the raw materials is not affected- only the amount of money that stays in the country, vs is wired immediately to somewhere else.
On the one hand we have the "let capitalism do its thing" approach, where foreign companies are given tax cuts, special deals, and exceptions to rules to encourage them to invest and hire locally.
We see the results of that approach in places like Nigeria, with horrible pollution, a few very rich people getting richer, and zero postive affects for the poor, except for the ones who break the pipelines and sell stolen gas and oil.
Same thing with the wonderful Gold mines in Papua New Guinea, which is polluting the drinking water of the still very poor local residents, on a scale seldom seen.
On the other end of the spectrum, we have Norway, which strictly regulates oil drilling in the North Sea, and charges a 50% tax on profits (net, not gross) Somehow, oil companies keep investing there, even though they pay an average Norwegian oil worker around $100,000 USD a year, vs the roughly $9000 USD per year. And Norway invests all that money in a Sovereign Wealth Fund that benefits all Norwegians.
Or Australia, which charges a corporate tax on profits from Bauxite exports of a minimum of 30%.
Australian bauxite miners make around $100,000 USD a year, while in India, the 5th largest bauxite mining country, they make $6500 usd a year.
So when the government actually charges higher taxes, they still get the investments, and better paying jobs, but the resulting oil, or bauxite, still sells for the same global daily price.
A government can knuckle under, or play hardball.
The commodity prices of the raw materials is not affected- only the amount of money that stays in the country, vs is wired immediately to somewhere else.
