Argentina

Final Project Based on Argentina

Fahad Feroz INB-372

International
Business
Promotion of
Argentina for great
investment
Destination
Submitted To:
Fahad Feroz (FDF)
Senior Lecturer
Department of Marketing
School of Business and Economics (SBE)

Group: The
Mavericks
Name ID
Saifur Rahman 1621171030
Farah Muntaha 2012084630
Md Zubayer Faiaz 2011074630
Misbahul Islam 2012465630
Tanzila Tamrin Promi 2011194630
 Recommendation Letter
Fahad Feroz
Senior Lecturer
Department of Marketing

School of Business & Economics, (SBE)

North South University,

Dhaka, Bangladesh.

Subject: Group assignment submission about Argentina

Honorable and prestigious

Sir

It is our utmost and privilege to complete and submit this assignment based on one of the
renowned countries of Latin America which is Argentina. We analyzed the existing business
scenario of Argentina in basis of their geographic, demographic and economics basis, which is a
process improvement tool that International investors can use to enhance their investment in
Argentina. In this research material we are focused on Location of the country (For geographic
advantage and disadvantage), Tribes/Clothing/Celebration/Food/Holidays, Economic Situation
(Based on per capita GDP), Ally of Argentina, Import export ratio, HOFSTEDE’s cultural
dimensions, Literacy Rate, Legal Risk, Political Risk. Economic Risk, Corruption Perception
Index (CPI), top 5 local companies, top 5 foreign companies, highest potential and why
Argentina is suitable for investment.

We are very grateful to work this interesting and challenging assignment. Our experience was
amazing and you give us open opportunity to filed in this business analysis for a country. We
have been satisfied by your immediate response along with us as a faculty member, as a parent
and as our close coordinators.

Sincerely,

The Members of Group Mavericks

 Contribution Table

Name Participation part

-Location of the country (Where is your country located in the

world map? Does your country enjoy and advantage / disadvantage
Misbahul Islam because of the location it is in?)

- Tribes/Clothing/Celebration/Food/Holidays

-Economic Situation (GDP? GDP per capita? Trend in the last five
years?)
Farah Muntaha
- Which country is your biggest ally and why? What is your primary
export / import? From and to which country? Is your country a
member of any Trade Blocs? Which one? What advantage are they
getting as a result of that Trade Bloc? What is your country offering
to your partner countries of your Trade Blocs?

- HOFSTEDE’s cultural dimensions

Tanzila Tamrin
Promi - Literacy Rate

-Legal Risk/Political System (Risk)/Economic Risk (Foreign direct

inflow in your country in the last 5 years? From where? Foreign
Md Zubayer Faiaz direct outflow from your country in the last 5 years? To where?
--Where do you stand in the Corruption Perception Index (CPI)?)

-Name top 5 local companies? Name top 5 foreign companies that

Saifur rahman have established themselves in your country?

-Which industry has the highest potential?

-On which industry you want to invest and why?

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Thanks To all our Family members, Honorable
faculty, librarian, and staffs of
North-South University
 Table of Content
Preface____________________________________________________________1

Positional Advantages________________________________________________3
Tribes____________________________________________________________4
North East region:________________________________________________4
North West region:_______________________________________________4
South region:____________________________________________________4
Central region:___________________________________________________4
Clothing__________________________________________________________6
Food_____________________________________________________________8
Celebration______________________________________________________10
Oktoberfest:____________________________________________________10
Vendimia:______________________________________________________11
Gualeguaychú Carnival:___________________________________________11
Buenos Aires Carnival:____________________________________________13
Tango Festival:__________________________________________________14
Holidays_________________________________________________________15

Economic Situation_________________________________________________16
Export-Imports___________________________________________________20
Allies___________________________________________________________23
Trade Blocs______________________________________________________25

HOFSTEDE’s cultural dimensions______________________________________28

Power Distance___________________________________________________29
Individualism_____________________________________________________30
Masculinity______________________________________________________31
Uncertainty Avoidance_____________________________________________32
 Long Term Orientation_____________________________________________33
Indulgence_______________________________________________________34

Literacy Rate______________________________________________________36

Legal Risks________________________________________________________38

Political Risks______________________________________________________39

Economic Risks_____________________________________________________40
1. Foreign Direct Inflow____________________________________________________________40

2. Foreign Direct Inflow____________________________________________________________41

3. CPI (Corruption Perceptions Index_ ________________________________________________42

5 local Companies__________________________________________________42
1. TELECOM ARGENTINA:________________________________________42
2. BANCO MACRO:______________________________________________42
3. BODEGAS ESMERALDA:________________________________________43
4. YPF SOCIEDAD ANONIMA:______________________________________43
5. S.A. SAN MIGUEL:_____________________________________________43

5 Foreign Companies________________________________________________47
1. Coca Cola:___________________________________________________47
2. Uniliver:____________________________________________________47
3. British American Tobacco:______________________________________47
4. Nestle:_____________________________________________________47
5. Walmart:___________________________________________________47

Highest potential Industries__________________________________________48

Food Processing and Beverages Industry_______________________________48
Service Sector____________________________________________________49
Electronics and Appliances__________________________________________50
Textile Industry___________________________________________________52
Oil Industry______________________________________________________53
Best Investment Industry for Argentina_________________________________54

References________________________________________________________55
 Preface
Argentina a South American country which is the 8 th largest country in the whole world whilst it
is the 4th largest in America and 2nd largest in South America. Argentina shares its border with
five countries where a vast border is shared with Chile in the west. In the North, the country
shares the border with Bolivia and Paraguay, followed by Brazil in the northeast and Uruguay in
the east. The total area of Argentina is 2,780,400 square kilometers. The country shares its
maritime borders with the Falkland Islands of United-kingdom. The population is 45.4 million
(2020), and the capital is Buenos Aires. Argentina is the largest Spanish-speaking country in the
world. Argentina has a good economic stronghold in South America, and the country is ranked
2nd in the economy among the South American countries. The country is also ranked second in
the Human Development Index. The official name of Argentina is "Republica Argentina."

Figure 1 ARGENTINA OFFICIAL FLAG

Argentina, a Spain colonized country, achieved its independence in 1816. Argentina is a

democratic republic country which is comprised of different national and ethnic groups of
people, mostly immigrants from Italy and Spain. After their independence, the country faced

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various political ups and downs, conflicts between civilian and military force, clash between
conservatives and liberals. When they adopted democracy again in 1983 after many internal and
external conflicts, the country started to come into a stable situation politically and economically.
Now Argentina is one of the most economically flourished countries in South America.

Argentina is recognized as a middle power in the economy, and since the country has good
economic flourishment, which is mostly because of the trade based on export-import of various
commodities and natural resources. The country's main export and import partners are Brazil,
China, and the US. Since Brazil is their neighboring country, they export and import the most
from that country.

Figure 2 Position of Argentina in world map

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 Positional Advantages
Argentina is a country enriched with vast natural resources. The country enjoys the benefit of
natural resources, mainly zinc, lead, tin, iron ore, copper petroleum, etc. According to the
statistics of 2016, the country's 3.2% of GDP, which is $17.8 billion came from the mining
sector. Due to its geographical position, Argentina has rated the 8 th country in the world as a
country possessing farmable land. The agriculture sector is booming because of the adaptation of
technology, and the frontier rise is 10 million hectares from the last 60 years. The country is the
prime exporters of products like soy, corn, wheat, fruits like apples, lemons, etc. In last year the
country exported 15 million tons of animal and vegetable products to the European Union. This
has been made possible because of the vast lands suitable for farming and animal husbandry.
Besides all these, the country has a 4000 km Atlantic shoreline and many rivers for fishing. The
country exports its rural management, and since the country has vast resources, foreign investors
are ready to invest in expanding their business in such a prospering region. Among the export-
import partners of Argentina, the country enjoys massive facilities from the country brazil vice-
versa. As because they share borders, the transition of products is a lot easier compared to other
countries. Brazil imports 17% and exports 29% in Argentina, which is the highest among all
other countries. As the country has vast lands which are yet left to explore so foreign and internal
companies took it as an opportunity for various long-term investments. Argentina is also
benefited from the tourism sector. Thousands of people visit this nice country every year for
relaxation and entertainment. The country Argentina enjoys various positional advantages
because of its massive natural resources and maritime area, cultivable lands, and vast areas
suitable for industries and other things.

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Tribes
Since Argentina is a Spain colonized country, the country is mixed with people from various
nations. In Argentina, 95% of people are European descendants, mostly from Spain, Germany,
and Italy. Most of the indigenous people live in the rural community, and they represent 3-5% of
the total population. Buenos Aires and the area beside it hold most of the indigenous people in
the country. In,

North East region: Charrua, Lule, Mocovi, Toba etc.

North West region: Atama, Ava-Guarani, Chane, Chorote, Chulpu etc.

South region: Mapuche, Ona, Yamana eic.

Central region: Atacama, Mapuche, Aua Guarani, Kolla etc.

The indigenous people speak their own language and practice their own culture. They have the
freedom to exercise their own religions.

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Page 5 of 71
Guarani Tribe

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Clothing
In Argentina, in daily lifestyle, men usually wear jeans and shirts, sometimes jerseys. On the
other hand, females prefer jeans and regular feminine outfits. Apart from these, every country
has its own clothing culture, and since Argentina is a huge country comprised of various diverse
people, their traditional clothing has become an immense part of their history and culture.

These are some traditional clothing styles of Argentina. Guacho a traditional cowboy outfit wore
by the Argentine, Alpargatas a traditional rope sole colorful shoes and it is still very popular in
their country, Bombachas a traditional durable cotton unisex pants used especially in horse
riding, cattle ranching, Pancho a special sweater which doesn't have any shoulders and it is still
popular among the argentine people.

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Traditional Clothing

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Food
Argentina is a country of diversified food habits. When the residents of a country are diversified,
it is bound to see the variation in the food habits among the people. Among that diversified food,
the most popular dish all over Argentina is a special dish of barbequed beef named 'Asado.'
Some other famous food items are chorizo (pork sausage), mollejas (a sweet bread), etc. In some
places, goat and lamb are famous than beef. A whole lamb is barbequed in a traditional system in
an open fire called 'Asado a la estaca.' Another famous drink is called 'Mate' which is a very
special drink and it is drunk on every special and happy occasion. It is also a ritual to drink mate
in social gatherings and celebrations.

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Argentinian ASADO

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Celebration
Celebration: Being a huge country and a people of various cultures, Argentine people have
varieties of festivals and holidays. They have several exciting, fun, acquainted festivals
celebrated all over the year. Most of their festivals are comprised of music, dance, lots of fun
partying, etc.

Some of their top prior festivals are described below:

Oktoberfest: It is a German beer festival celebrated in the city of Cordoba, where mostly
German immigrants reside. It is a fun festival where a special German beer is made and
celebrated in a cheerful manner. When the Germans came, they brought the festival with them,
and till then, it is celebrated in Argentina every October.

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Vendimia: It is a festival celebrated on the joy of the harvest of the grapes to the process of the
preparation of wine. It is celebrated in the month of March where they drink. Dance, listen to
music, and celebrate in a fancy manner. The festival takes place in the city of Menzoda, which is
known as the capital of wine.

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Gualeguaychú Carnival: It is a celebration that takes place all over Argentina, but the main
charm of this festival is in the city Gualeguaychú beside Buenos Aires. The festival is named
after the city, and it is a festival of Catholic origin. All over the country remains in a festive
mood party, parades, concerts. People dance, sing, drink, and party all day at this festival.

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Buenos Aires Carnival: It is a festival celebrated in the month of February in the capital
city of Argentina. It is a celebration where parades are done in fancy costumes. Various customs
like water bombs, murga parades, etc., are practiced. Murga is a special type of song, and while
parading, they dance wearing their traditional costumes, sing and celebrate in the Murga parade.

Tango Festival: It is a huge festival celebrated in August in Argentina. People from the whole
world come to the city Buenos Aires celled the central city of Tango celebration to celebrate this
festival. It is mainly a dancing festival. Dancing partners, whether they are pro or amateur, come
into the city and take part in the festival. It is a festival prolonging for mostly two weeks.

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Holidays
Alongside their weekends, Argentina celebrates a few holidays all over the year. Usually, on a
special day or on a historically emphasized day like, Independence Day, revolution day, etc.,
they exercise the right of a holiday. Alongside, on special occasions and festivals like every other
citizen of the world, the Argentines also get a day off to relax and celebrate with their family.

Name Date
New Year’s Day January-01

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Memorial Day March-24
Malvinas Day April-02
Labor Day May-01
May 1810 Revolution Day May-25
Independence Day July-09
Immaculate Conception’s Day December-08
Christmas Eve December-24
Christmas December-25
New Year’s Eve December-31

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 Economic Situation
The country, Argentina has a population of 44.94 million people, according to 2019. It is
developing country and is the second largest national economy in South America behind Brazil.
Moreover, the country’s Gross Domestic Product (GDP) was 445.4 billion US dollars and the
GDP per capita was 9,912.28 US dollars according to 2019. The GDP and GDP per capita of the
country has decreased by 2.088% and 3.55% respectively according to the World Bank from
2018. Argentina’s currency declined by about 50% in 2018 to more than 38 Argentine pesos per
US dollar and as of that year, is under a stand-by program from the International Monetary fund.

In 2019, it fell further by 25%. Also, the country has a decline in the GDP of 10%, because of the
COVID-19 situation. According to World Bank, Argentina has a labour force of 19,180.36
thousand of people as of 2020. Moreover, the unemployment rate is 11.4%. Nevertheless, South
America’s second largest has been expected to recover in the next years, with the IMF’s April
2021 estimates predicting growth of 5.8% for 2021 and 2.55% for 2022, subject to post-
pandemic recovery.

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Now, the country’s top trading partner countries for exports were Brazil, United States, China,
Chile, and Vietnam and for imports they were Brazil, China, United States, Germany, and
Paraguay.

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Export-Imports
According to the Observatory of Economic Complexity (OEC), the country Argentina has the
45th largest economy around the globe. Again, in 2018, this country became the 29 th largest
importer of consumer goods from the United States and exported a total of 61.6 billion dollars’
worth of goods in the world. Again, we know that, Argentina is the world’s 5th largest wheat
producer and exporter in the world. Also, it is one of the world’s main crop producing nations –
responsible for up to 54% of their exports – making crops in general, the main export of
Argentina. These crops are – wheat, soybeans, corn, barley, rice, flax seed, sugarcane, cotton,
citrus fruits, and grapes. Here, Brazil is the largest exporter of this country. According to OEC,
the top exports of this country are Soybean Meal ($8.81B), Corn ($6.19B), Soybeans ($3.47B),
Delivery Trucks ($3.83B), and Soybean Oil ($3.38), exporting mostly to Brazil ($10.3B), China
($6.94B), United States ($4.44B), Chile ($3.15B), and Vietnam ($2.83B).
Moreover, Brazil is also the largest importer of Argentina. The top imports of this country are
Cars ($2.33B), Petroleum ($2.25B), Vehicle Parts ($2.07B), Petroleum Gas ($1.54B), and
Soybeans ($1.38B), importing mostly from Brazil ($9.83B), China ($8.47B), United States
($6.82B), Germany ($2.73B), and Paraguay ($1.74B).

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Allies
We know that, Argentina is a member of G20, WTO, Bairns Group, Commission for the
conservation of Antarctic Marine Living Resources, the Antarctic Treaty, International Whaling
Commission, United Nations (UN), and UN specialized agencies.
Again, this country is a member of regional organizations, such as, the Community of Latin
American and Caribbean States (CELAC) and the Organisation of American States (OAS). Also,
this country participates alongside Australia in the Forum for East Asia-Latin America
Cooperation (FEALAC) and is an observer of the Pacific Alliance.

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Furthermore, Argentina – United States relations are the bilateral relations between Argentina
and the United States. Here, the two countries have maintained bilateral relations since the
United States formally recognized the United Provinces of the Rio de la Plata, the predecessor to
Argentina. This cooperation includes science and technology initiatives in the fields of space,
peaceful uses of nuclear energy, and the environment.

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Trade Blocs
We realize that, a trade bloc is a type of intergovernmental agreement where barriers to trade that
are reduced or eliminated among the participating states. Again, trade blocs can be stand-alone
agreements between several states. Now, Argentina is a member of the Southern Common
Market (MERCOSUR – Mercado Comun del Sur), which commenced its force in January 1991.
It is the country’s most important trade and political arrangement. The other members of the bloc
are Brazil, Paraguay, and Uruguay and the associate members are Ecuador, Guyana, Peru,
Bolivia, Chile, Colombia, and Surinum.

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Moreover, Argentina has been a WTO member since 1 January 1995 and a member of GATT
since 11 October 1967. The organization, WTO (World Trade Organization) is the only global
international organization dealing with the rules of trade between nations. At its heart are the
WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in
their parliaments. The goal is to ensure that trade flows as smoothly, predictably, and freely as
possible.

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 HOFSTEDE’s cultural dimensions
Greet Hofstede is popular for his research on popular frameworks of cross-cultural dimensions.
Hofstede’s cultural dimensions in case of the country, Argentina, are described below-

Cultural Dimension Argentina percentage (%)

Power Distance 49

Individualism 46

Masculinity 56

Uncertainty Avoidance 86

Long Term Orientation 20

Indulgence 61

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Power Distance
The dimension in which a society believes in inequality among its members is referred to as
power distance.
In the power distance factor, Argentina has a score of 49. At this level, influential members
assume that their subordinates are primarily unequal. When assessing the influence of the
members of this society, a variety of factors are considered. The society's differences are
recognized, and subordinates are often obligated to act and behave in accordance with the
hierarchical order.

Individualism
In this dimension, the degree to which a person has the right or pressure to think only about his
or her own family and rights (individualist society) or the need to act as a community member in
the society and behave and make decisions collectively (collectivist society) is indicated.

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Argentina has a ranking of 46 in the individualism dimension, putting it in the middle of the
pack. Argentina is following individualist traits in this case, but collectivist traits are also
present. Individualist characteristics are followed in urban areas, and some Argentina residents
adopt the traits of their extended family or in-groups.

Masculinity
Performance, wealth, and materialistic things are all part of masculine culture. Being the best and
creating an egotistical theme can describe masculine culture quietly. Feminine culture, on the
other hand, emphasizes the importance of partnerships and life quality. The signs of a feminine

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culture are, caring for others, no sign of gender inequality, as well as admirable things that a
person enjoys doing.
Argentina stands in 56 in masculinity culture. Therefore, Argentina's culture can be defined as
more masculine. Argentina operates in a highly competitive and results-oriented atmosphere. To
achieve anything in this culture, people tend to be competitive and a bit more decisive.

Uncertainty Avoidance
Uncertainty avoidance can be defined as the process where members of a society think about
unpredictable events that can occur in the future, and whether the culture wants to prepare and

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plan for them or simply prevent them. The higher the ranking, the less you fear uncertain events
and the more you expect to deal with them.
Argentina, with an 86 in uncertainty avoidance, clearly demonstrates that it has a culture of
careful planning and coping with unpredictable future events. They usually have stringent rules
and regulations in place to cope with any unexpected circumstance. They have regulations and
laws for certain activities to prevent uncertain activities and violation of rules. The people of
Argentina are bound to follow and obey these rules and regulations.

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Long Term Orientation
Long-term-oriented societies are typically more concerned with the future; however, short-term-
oriented societies are more concerned with the past and present. People in long-term-oriented
societies have the characteristic of upholding long-standing practices and norms, and they act in
a conventional manner in the present. People in a short-term-oriented culture, on the other hand,
act in a completely different way.
With a score of 20 in the long-term orientation factor, Argentina has shown that they are an
extremely short-term-oriented society that behaves historically and strictly adheres to social
responsibilities, with people more concentrated on the present and little regard for the future.

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Indulgence
The dimension by which the limit of any culture of controlling its people’s desires, ambitions
and stimuluses is known as the dimension of Indulgence. The higher score in this dimension
reflects the more urge to fulfill the desires of the people of that certain culture. The higher score
refers to weak control and that defines indulgence.
Argentina scored 62 in the dimension of indulgence. This leads to the conclusion that Argentina
is an indulgent country. People of Argentina tend to have less control in case of fulfilling their
wishes, desires, and urges. They are optimistic and have the importance of leisure time in their
life and love to have fun and enjoy the life.

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 Literacy Rate

In Argentina the literacy rates are very high. Literacy skills are the basic skills a person needs in
their daily life. A person may not be able to read a book or an important document if the basic
literacy skills are not good. This skill is one of the very basic needs of a person to set their life in
straight path. The literacy rate is 99 % in Argentina. The adult literacy rate is an adult person of
age 15 and above may or may not have the capability of reading writing and understanding.

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The above graph shows the literacy rate of Argentina of the years 2010-2018. The rate has
fluctuated from 99 percent. Sometimes it increased and sometimes it decreased. In the year. The
literacy rate declined 0.12% from the 2-year span of 2016-2018. In 2016 it was 99.13% while in
2018 it was 99%. Similarly, the rate increased 0.19% from the time period of 2014-2015. But if
we overlook the minor fractions the literacy rate of adult in Argentina is 99% approximate and it
is constant in the last 10 years.

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 Legal Risks
Every country has its own legal system, and in order to carry out action, they must adhere to the
laws of that legal system. Argentina is no exception. Argentina has a common law legal
framework and certain specific rules, such as labor laws and work laws. Strong employment laws
are practiced in Argentina, which favors the employees rather than employers. International
investors face obvious legal risks when doing business in the here because they are mostly
unaware of the country's stringent labor laws. To avoid the harassment of strict jobs and labor
regulations, a foreign investor must have a local recruiter for the hiring process. Another legal
danger is Argentina's complex tax regime, since it is one of the most heavily taxed countries in
the world. Employers and investors could suffer legal and financial consequences as a result of a
faulty recruitment process. The challenges that investors may face if they want to invest and start
a business in Argentina are known as legal risks.

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 Political Risks
The state of a country's political climate has a major impact on its various industries. In the case
of Argentina, the political climate is characterized by a high degree of bureaucracy, which is not
good news for any investor looking to invest in Argentina, but rather a danger for doing business
in Argentina. The high level of bureaucracy will make it difficult for investors to do business
because different procedures take longer and are more complicated. For international investors,
procedures such as forming firms, financial statements, and a slew of other procedures in
Argentina must be nothing short of a nightmare. Furthermore, according to a World Bank report,
higher levels of bureaucracy lead to higher levels of corruption, with Argentina serving as an
excellent example. Corruption can harm any country's ease of doing business procedures and
transactions. Argentina was ranked 126th out of 190 countries in The World Bank's 2019 Ease of
Doing Business Index. The ranking is unsatisfactory for investors, and given the problems,
investors and foreign investors may be hesitant to do business in Argentina, and these are
unquestionably political risks in the business world.

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 Economic Risks
Argentina, a South American country, has the world's second-largest economy. Despite having
the world's second-largest economy, Argentina's economy still has some instabilities, and the
country's history of economic instability makes investing in Argentina a risky proposition.
Argentina has history of monetary emergencies. It has defaulted on its debt held by foreigner
multiple times since 1816. Argentina's default in 2001 took 15 years to assess. Since joining the
IMF in 1956, Argentina has also participated in 21 IMF projects. The IMF was aware of the
possible risks, but it was unable to guarantee that Argentina's debt would be realistic under the
trend figure scenario, with Argentina's external debt expected to reach $285 billion by the end of
2019, an increase of more than $100 billion since 2015. Therefore, given previous monetary
crises, it's reasonable to conclude that the presence of uncertainty can arise at any time, posing
economic risks to investors. As a result, foreign investors are hesitant to invest in Argentina,
even though it has one of the strongest economies in South America.

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Argentina has abundant natural resources, a well-educated population, an export-oriented
agriculture sector, and a diverse manufacturing base. Argentina's economic output has
historically been very erratic, with high economic growth interspersed with severe recessions,
especially since the late twentieth century, as income inequality and poverty have increased. The
FTSE Global Equity Index (2018) classifies Argentina as an emerging market, and it is one of
the G-20 major economies.

The country was once a major player on the global scene. From the very inception of
organizations like World Bank, World Trade Organization and United Nations, Argentina was
active as one the founding members. It also has second highest rating on the United Nations
Human Development Index, in Latin America.

Foreign Direct Inflow

Although there is economic insecurity and other recurring issues, the Argentine government
continuously looks for foreign direct investment. Currently the openness for foreign investment
is in the developing phase. But Argentina possesses strong assets e.g., considerable natural
resources like gas, copper and oil and highly skilled and actively competitive workforce.
Investments have been mainly oriented towards manufacturing, mine and oil extraction, trade,
banking and other financial entities, information and communication and agriculture.

Main Invested Sectors 2016, in %

Manufacturing 35.0

Mine and oil extraction 22.3

Retail and wholesale 10.9

Other financial entities 9.1

Banking 6.0

Information and communication 5.0

Agriculture 2.4

Source: Central Bank of Argentina - Latest available data.

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The main representatives for Argentina’s FDI inflows are:

 US,
 Spain and the
 Netherlands

These three countries represent more than the half of Argentine FDI inflows. There are other
countries who have invested in Argentina as well. These are:

 Brazil
 Chile
 Switzerland
 Uruguay
 France,
 Germany
 Canada

Main Investing Countries 2016, in %

USA 23.0
Spain 18.0
The Netherlands 12.0

Brazil 6.0

Chile 5.0

Switzerland 5.0

Uruguay 5.0
France 4.0
Germany 3.0

Canada 3.0

Source: Central Bank of Argentina - Latest available data.

For several years the Argentine economy have witnessed instable FDI inflows. From an online
article ‘Argentina: Foreign investment’, it attracted the attention regarding the fact that
UNCTAD's 2020 World Investment Report, FDI inflows to Argentina fell by half to USD 6,2
billion in 2019 (from USD 11,8 billion in 2018), owing to the country's worsening economic

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crisis. Similarly, the stock of FDI fell in 2019, to USD 69,2 billion (a drop of USD 15 billion
when compared to 2010).
There are other issues as well. Argentina's FDI has been affected by their domestic economic
problems. That led to many foreign companies wanting to freeze their investment plans.
Depleting foreign investments heavily affected the inflows in the year 2020, prior to the COVID-
19 pandemic.

Argentina's net FDI inflows (as a percentage of GDP) were 1.37 percent in 2019. The percentage
of 3.56 was in the year of 2015 and 2016 then in 2017, 2.68 percent refers to the decrease of the
percentage and then sudden fall of the percentage was faced in 2018 and it was 1.22 percent and
then it increased in the year of 2019 slightly.

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Foreign Direct Outflow
In collaboration with the National Investment and Trade Promotion Agency, the National
Directorate for Investment Promotion, under the Under Secretary for Trade and Investment
Promotion at the MFA, helps the Argentine companies to extend their business internationally.
Though Argentina has no limitations on domestic companies investing abroad but it does not
encourage outward investment.

Argentina's net FDI outflows (as a percentage of GDP) were 1.36 percent in 2019. While in
2015, it had the percentage of 2.86 and it decreased and it was 2.80 and 2.56 in the years of 2016
and 2017 but it had a great fall in the percentage and it became 0.79 percent in 2018 and then it
rose to 1.36 percent in 2019.

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CPI (Corruption Perceptions Index)
Corruption is still a major issue in Argentina. Argentina has long been plagued by pervasive and
endemic corruption. Despite Argentina's strong legislative and institutional structure for fighting
corruption, corruption remains a serious problem in both the public and private sectors.
The concept of Corruption Perceptions Index or CPI quite fascinating. It can be defined as an
index which analyses how corrupt the government of each country is and scores the countries
based on that. Transparency International, a German company publishes the CPI annually. The
index was launched in 1995 and as of today the scores of around 180 countries are published
based on the corruption rate. The goal of this organization is to stop every form of public
corruption.
The scoring system is ranges from 0 to 100. The countries with lower scores denote high levels
of corruption whereas scores higher scores up to 100 indicates low levels of corruption. The
methodology for scoring the countries on the index is interesting as well. Author Kenton tried to
explain in this way that a country must be evaluated by at least three sources in order to be
included in the CPI. Transparency International evaluates the accuracy and adequacy of these
methodologies by requiring sources to record their data collection processes and calculation
approach.

 Argentina’s Position in the CPI (Last 10 Years)

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From what we can see from the bar graph given above Argentina’s position in the CPI can be
described as an interesting one. It is evident that in the past few years the corruption rate was
higher specially in the year 2012 to 2015 when the country had consecutively lower positions.
Then from 2016 to 2019 it can be assumed that the corruption declined a bit. The lowest position
Argentina achieved on the CPI was 66 which was in the year 2019. It could suggest that in that
particular year the rate of corruption was lesser compared to the previous years. But
unfortunately, that did not last for long and in the following year Argentina fell from 66 to 78 th
position denoting a rise of corruption. In the year 2020 the Argentina’s CPI score was 42.
Argentina has ranked 78th among 180 countries whole over the world in 2020.

5 local Companies
The Argentine market excels in different sectors and there are hundreds of companies. Some of
them are briefly discussed below:

1. TELECOM ARGENTINA: Telecom Argentina S.A. is one of the largest local

telecommunications company in northern Argentina, including the entire city of Buenos
Aires. It was briefly known as Sociedad Licenciataria Norte S.A., but it soon changed its
name and is now commonly known as "Telecom" in Argentina. The company’s services
include providing mobile communication services, fixed line services, cable operator
services.

Company Business:
 Communication Services
 Telecom
 Utilities
 Mobile Services
 Fixed Line Service
 Telecom Equipment
 Television Services

2. BANCO MACRO: Banco Macro is Argentina's second largest privately owned

bank. Banco Macro was granted commercial banking license by the Central Bank of
Argentina in 1988 and served as a wholesale bank until 1995, becoming a leader in the
Argentine corporate bond industry. During this time, it focused on money market
transactions, trading of government and corporate bonds, and financial services for
medium and large businesses.

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 Company Business:
 Banking service
 Financial service

3. BODEGAS ESMERALDA: Bodegas Esmeralda S.A. has been in business for

over a half-century. Esmeralda, the founder's daughter, inspired the company's name. It
is situated in the province of Junín, one of Mendoza's most traditional wine-growing
regions. It is a significant producer and exporter of high-quality wines.
Company Business:
 Beverages
 Alcoholic beverages

4. YPF SOCIEDAD ANONIMA: YPF was created as a state enterprise outside of

the Soviet Union in 1922, under President Hipólito Yrigoyen's administration, and was
the first state oil company to become vertically integrated. It is an Argentine energy
company that is vertically integrated in oil and gas exploration and development, as well
as the transportation, refining, and distribution of gas and petroleum products.

Company Business:
 Energy
 Chemicals
 Oil and Gas
 Petrochemicals
 Natural Gas Generation
 Petroleum

5. S.A. SAN MIGUEL: S.A. San Miguel is a Fruits and vegetables manufacturing
company. San Miguel specializes in production and distribution of citrus and processed
foods.
Company Business:
 Consumer Defensive
 Agriculture Products
 Agriculture Related

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Telecom Argentina

BANCO MACRO

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BODEGAS ESMERALDA

YPF SOCIEDAD ANONIMA

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Page 50 of 71
 5 Foreign Companies
Argentina's laws do not impose limits on foreign investments, which allows investors to invest
openly. International investors in Argentina have the same legal rights as domestic companies
and individuals, according to the country's constitution. Foreign companies can also invest
without the need for pre-approval or registration. Some of the popular foreign companies in
Argentina are:

1. Coca Cola: Coca-Cola has been operating in Argentina for 75 years, with 10
manufacturing plants and four bottling firms. Coca-Cola, Coca-Cola Light, Sprite, Fanta,
Powerade, Cepita, Bonaqua, and Aquarius are among the brands available from the
company.

2. Uniliver: UNILEVER DE ARGENTINA S.A. is a Soap & Other Detergent

Manufacturing company based in Munro, BUENOS AIRES, Argentina. UNILEVER DE
ARGENTINA S.A. employs 3,783 people in all its locations and generates $1.03 billion
in revenue (USD). The UNILEVER DE ARGENTINA S.A. corporate family consists of
886 businesses.

3. British American Tobacco: British American Tobacco is one of the world's largest
multinational corporations, with products sold in over 200 markets and manufactured in
44 factories across 42 countries. Globally, the firms recruit over 55,000 employees.
Employees' cultural and professional diversity distinguishes BAT and enriches its
industry and innovation daily.

4. Nestle: NESTLE ARGENTINA S.A. is a Dairy Products Manufacturing company

based in Vicente López, BUENOS AIRES, Argentina. NESTLE ARGENTINA S.A.
employs a total of 1,927 people in all its locations and generates $506.09 million in
revenue (USD). The NESTLE ARGENTINA S.A. corporate family consists of 1,996
firms.

5. Walmart: Walmart Argentina's eCommerce platform, walmartonline.com.ar, was

launched in 2011 and now offers 20,000 SKUs and accounts for 4% of total revenue.
Under the “Mes de la Tierra” (Earth Month) program, Walmart Argentina exclusively
introduced the latest GE Lighting LED lamp line in its stores. This device saves 90

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 percent of the energy used by standard halogen lamps while maintaining lighting
efficiency.

Highest potential Industries

According to World Bank’s published a list of the highest producing countries based on total
output value, Argentina has the world’s 31st most valuable sector, according to the 2019 ranking.
Argentina’s industry is diverse and dominated by a wide and comparatively prosperous domestic
market. Argentina’s main industries include food processing, car manufacturing, textiles, energy
production, and mining. The country possesses a prosperous chemical industry as well. The most
popular industries of Argentina are mentioned below:

Food Processing and Beverages Industry

Agriculture continues to be an important part of Argentina’s economy, as crops and livestock
provide a large portion of the country’s domestic food needs. These items also serve as raw
materials for the expanding food processing industry. The agriculture sector is dominated by
crop and livestock exports. Argentina’s agriculture started to diversify beyond conventional
products such as beef and sheep in the 1980s. Many food-based oils as well as specialty crops are
now grown. Argentina’s main agricultural products, in addition to beef, include sunflower seeds,

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lemons, soybeans, oranges, corn, tobacco, peanuts, tea, and wheat. Buenos Aires is home to most
of the food manufacturing and beverage businesses. Food processing and packaging has long
been one of Argentina’s oldest and most significant industries. Starting with the processing and
packaging of meat for export, the food processing and beverage industry has expanded into a
wide range of foods and beverages for global markets.

Service Sector
The service sector is now the most important sector of the Argentine economy. The economic
liberalizations of the 1980s and 1990s fueled much of the growth in the service sector. The
service sector contributes the most to total GDP, accounting for more than 60% of total GDP.
Argentina has a well-developed service sector that includes financial, insurance, social,
corporate, real estate, communication services, tourism, and transportation.

Service Sector

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Electronics and Appliances
The availability of necessary capital in Argentina has significantly improved the efficiency of the
country's largest industries. To meet the rising global and local market demands, the creative
sector in the appliances and electronics industry continues to develop and modernize. Argentina's
appliances and electronics industries are among the few that produce many home appliances.

Electronics and Appliances

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Textile Industry
The textile sector has been identified as one of Argentina’s most important sectors, with a 75
percent increase in 2002. People’s and visitors’ buying power grew as a result of favorable
political and economic circumstances. The Argentina garment industry, estimated to be worth
$12 billion, has bolstered the apparel market, prompting global fashion brand stars to import
high-quality clothing fabrics from Argentina. The Argentina Apparel Industrial Chamber boasts
over 11,500 manufacturing garment firms owned by local families, with an annual export
volume of $2.7 billion.

Textile Industry

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Oil Industry
Argentina, an oil-rich nation, has tried and failed several times to build on its resources. The
unfavorable energy policies of the subsequent Argentine administration, as well as a shortage of
foreign resources, have been two of the primary factors that have dramatically reduced export oil
production in recent years. However, with the discoveries and improvements to the country's
hydrocarbon regulations, Argentina's oil industry has thrived so far. Argentina's oil sector has
long enjoyed government funding. Petroleum fuel exports began at an all-time low of 800,000
barrels in the 1990s, but gradually increased after the discovery of oil deposits at Rio Negro
Norte.

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 Best Investment Industry for
Argentina
Seeing all the industries and their prowess it can be said that Argentina’s industry is solid. From
Food and Beverages to Electronics or Oil, they have made a lot of developments in their
industries over the few years. But The most successful industry to be invested on is more likely
to be The Food processing and Beverages Industry. The reasons for investing in that sector are:
 Being a significant agricultural producer
 Argentina is well-positioned to benefit from increasing global demand for food products
 Being the fastest-growing product category in E-commerce
 One of the sectors with more competitive advantages in our country
 Providing organic food items to meet public demand
 Advertisement opportunities
Although food and beverage industry doesn’t seem like a prosperous industry on the first look
but given Argentina’s rich natural resources and agriculture, the investment is more likely to be a
successful one.

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The END

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