With all eyes drawn to a soaring country risk rating and an exchange rate reaching record highs, high-level market analysts, government officials and opposition political figures gathered in New York Thursday for a somewhat unfortunately timed investment conference on opportunities in Argentina.
The Argentina Outlook. Investments Forecast: Challenges and Opportunities conference, hosted by the Argentine lawyer associations of Columbia, Buenos Aires, and New York, took place at the Columbia University in New York City.
Mauricio Macri’s chief advisor, José Torello, Peronist Senator Miguel Pichetto, and the CEO of Vista Oil & Gas, Gastón Remy, among others, were eager to transmit to the audience their confidence that business-friendly policies would continue to remain in place despite recent financial turbulence and new polls casting doubt over the president’s chances of winning re-election in October. All present were keen to assure investors that there was no turning back from Argentina’s current path.
However, the peso was never far from people’s minds. As many in the audience looked at their phones, to check whether the peso was breaking through the 47-peso-per-dollar mark, a video featuring attorney for the Argentine Treasury, Bernardo Saravia Frías, began to play.
Frías, who was unable to attend personally, opened with the phrase: “I won’t refer to the exchange, inflation or interest rate.” Instead, the official plunged into an analysis of the rule of law, addressing the separation of powers, and explaining how a lack of respect for the country’s institutions, which he said was caused by populism, was to blame for Argentina’s current crisis. Saravia Frías told the audience that Argentina was at a turning-point.
“President Macri’s government has made many changes, thinking of the long-term instead of the short-term, that will transform Argentina once and for all,” he said.
Later, as he was quizzed about Argentina’s sharp downturn in the financial markets, HSBC’s Head of Global Banking for the Americas, Gerardo Mato posited that it was the fear of the unknown, indicating observers were unsure who would win October’s presidential vote.
Mato, however, at the same time said he believed that the government should start focusing more on fostering growth. “If local investors aren’t investing, then international investors won’t either,” he said.
None of the speakers assessed the possibility of whether the government’s current economic model may be in part to blame for the country’s ongoing financial crisis, with all indicating the path ahead was the correct one.
“It’s important to consolidate this process, of modern and intelligent capitalism,” said Miguel Pichetto, the influential Senate majority leader.
Pichetto is aligned with the Alternativa Federal (“Federal Alternative”) Peronist coalition, which is trying to position itself as a rival to former president Cristina Fernández de Kirchner’s Unidad Ciudadana, the Kirchnerite Peronist faction.
Although Pichetto said he was committed to the trajectory currently in place, he admitted he didn’t wholly agree with the government’s free-trade policy.
Yet, the senator for Río Negro Province promised investors that there would never be a space for a “Chavista model” in Argentina.
“If Cristina [Fernández de] Kirchner makes it to a run-off election against Macri, the current government will win,” he declared confidently.
Pichetto did offer criticism of the government though. He said that Cambiemos (Let’s Change) had made an error in attempting to change the rules for production subsidies it had agreed to previously with gas producers. “When you create a subsidy programme, you need to fulfill your obligations,” he said pointedly.
Despite the cuts, Gastón Remy, the CEO of Vista Oil & Gas, projected enthusiasm, saying that the shale gas and oil industry would continue to be ripe for investment under any conditions. Vista recently announced that it had reached record daily production levels of 6,500 barrels this month, with one of the most productive wells in the Vaca Muerta formation kicking into gear.
Finally, addressing rumours and growing demands for Cambiemos to consider fielding Buenos Aires Province Governor Maria Eugenia Vidal as the coalition’s presidential candidate in October – Torello began his speech saying that the government was confident that it would win the presidential elections in October.
“The country is a paradise for investments,” Torello said confidently, stressing that the current financial value of Argentina’s bonds has nothing to do with reality.
“Once the government makes it past these elections, things will begin to calm down as investors will see that there will be continuity of policies,” Torello concluded.