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Inversiones En Argentina

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Inversiones en Argentina

Inversiones en Argentina

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  • 1. Why invest in Argentina? Naturally Talented To Meet Global Market Needs Daniel Falcón, Director ProsperAr, Argentina's Investment Development Agency September 2009 Frankfurt , Germany
  • 2. Vigorous expansion During 2003-2008, Argentina has taken advantage of a favorable global environment to consolidate growth and expand its production and export capacity Selected Economies: GDP growth 2003-2008 8.5% annual GDP growth over the six year period of 2003-2008 Six years of twin fiscal and current account surpluses Average 2003-2006 2007 2008 Sustained increase in foreign 13.0 reserves 10.7 9.0 8.9 9.3 8.9 8.7 Steady rise in savings (26.7% in 7.7 7.3 6.8 2008) 5.7 5.8 5.3 5.7 5.1 Exports of goods and services 4.2 4.5 4.0 4.0 3.2 doubled over a six year period to hit 1.8 a historical high of US$82.1 billion in 2008 China India Argentina Brazil Chile Colombia Mexico Source: ProsperAr based on IMF and INDEC Argentina’s Investment Development Agency
  • 3. Solid foundations for sustainable growth Declining debt levels and record-high international reserve accumulation contribute to a more stable and predictable economy, even in the current global context Public sector total and external debt International Reserves (as a % of GDP) (in billions of US$) 160 50 46.2 46.4 46.1 140 Public Sector Total Debt 45 120 40 Public Sector External Debt 100 35 32.0 30 26.5 27.826.5 28.1 80 24.3 25 19.3 19.4 19.6 60 20 17.9 17.6 14.1 40 15 10.5 10 20 5 0 0 dec-94 dec-95 dec-96 dec-97 dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08 Aug-09 2002 2003 2004 2005 2006 2007 2008 Source: ProsperAr based on Ministry of Economy and Finance Source: ProsperAr based on Argentine Central Bank Argentina’s Investment Development Agency
  • 4. Rapid investment growth Domestic and foreign investment grew rapidly over the past six years and gross fixed capital investment reached record rates as a percentage of GDP Gross Fixed Capital Investment as a % of GDP Foreign Direct Investment (in constant and current prices) (in millions of US$ dollars) 25 23.4 24.2 23.3 23.1 22.6 21.5 21.6 19.2 19.8 12,000 20 17.7 9,753 15.1 10,000 15 14.3 8,000 6,473 6,000 5,265 5,537 10 4,125 4,000 5 1,652 2,000 0 0 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 GFCI/GDP current prices GFCI/GDP constant prices Source: ProsperAr based on INDEC Argentina’s Investment Development Agency Source: ProsperAr based on INDEC
  • 5. Global crisis, global impact The financial and economic crisis has impacted developing economies through two main channels: financial and commercial Financial channel: • Global credit crunch: Lack of liquidity and expensive financing • Global FDI fell 14.2% in 2008 and • Risk aversion and “flight to quality” 44% during the IQ2009 behavior • Cross-border M&A sales in • Growing uncertainty leading to lower developing countries fell 35.7% during investment levels and postponement of the IQ2009 investment projects Commercial channel: • Global trade volumes are expected • Lower global trade flows negatively to contract by12.2% in 2009 affecting exports • Emerging economies are expected to • Reductions in prices, particularly suffer a 6.5% fall in their exports commodities Source: ProsperAr based on UNCTAD and World Bank Argentina’s Investment Development Agency
  • 6. Impact of the global crisis on investment While it has not been immune, Argentina stands strong to face the current global crisis Gross Fixed Capital Formation (% Change, IQ 2009) Economic activity began to slowdown during the 4th quarter of 2008 and the first Turkey -29.7 quarter of 2009, but remains positive. Russia -16.3 Thailand -15.8 Investment has fallen in line with other Japan -14.9 economies worldwide as a result of the global Singapore -14.8 downturn and the postponement of US -14.5 investment projects in the light of growing Argentina -14.2 uncertainty. Brazil -14 Mexico -11.8 Malaysia -10.8 Chile -9.3 S. Korea -6.2 India 6.4 China 28.6 -30 -20 -10 0 10 20 30 Source: ProsperAr based on UNCTAD Argentina’s Investment Development Agency
  • 7. Impact of the global crisis on foreign trade Argentina recorded a smaller decline in exports compared with the major economies of the region and the world Total Exports (% Change, I Sem. 2009/08) 0% -5% ✓ The decline in exports of -10% manufactured goods is also lower in -15% Argentina than in the major -20% economies -25% Brazil China Argentina -30% U.S.(*) -21.7% -21.3% -22.8% -35% -24.9% EU (27) Canada (*) -31.7% -40% Chile -45% -38.2% -37.6% *Figures from EU (27) and Canada correspond to the first five months. Sources: ProsperAr based on INDEC, SECEX , Central Bank of Chile, National Bureau of Statistics of China, Ministry of Development, Brazil’s Secretariat of Foreign Trade, Australian Bureau of Statistics, Centre of International Economy, and IMF Argentina’s Investment Development Agency
  • 8. Balanced external accounts Argentina is the only country in the region expected to maintain current account surpluses in 2009 and 2010 Current Account Surplus IMF's Current Account Projections 2009-2010 (as a percentage of GDP) (as a percentage of GDP) 7 Argentina 6 Paraguay Uruguay 5 South America 4 Brazil 2010 Bolivia 2009 3 Mexico Peru 2 Ecuador Colombia 1 Chile C h ile 0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 2003 2004 2005 2006 2007 2008 IQ 2009 Source: ProsperAr based on INDEC and “Regional Economic Outlook 2009”, IMF Argentina’s Investment Development Agency
  • 9. Sustained Global Demand Commodity prices of Argentine exports (particularly food) have experienced a lower volatility during the last year, as a result of the current and future structural global demand Commodity Price Indexes (2005=100) Commodity Price Indexes (2008F=100) 300 220 Copper Soybean 200 250 Wheat Petroleum 180 Aluminum Coal 200 160 140 150 120 100 100 80 50 60 Agriculture Metals Fuels 40 0 20 2008O 2008J 2009J 2008A 2008A 2008D 2009A 2008F 2009F 2008O 2008A 2008A 2008D 2009A 2008F 2009F 2008J 2009J Source: ProsperAr based on IMF Argentina’s Investment Development Agency
  • 10. Structural Changes in Global Demand High growth and structural changes in the main markets for Argentine products facilitate Argentina's rapid recovery and future sustainable growth Three-Way Process in Asia GDP Growth Projections Urbanization Change in Industrialization Eating Habits 2009 2010 China 6.5% 8.5% India 4.5% 5.6% growing demand for Argentina's production Source: ProsperAr based on IMF rapid recovery + sustained growth Argentina’s Investment Development Agency
  • 11. Great Business Investing companies in Argentina achieve record profitability levels Profits of the Top 500 companies in Argentina (as a % of sales) 14.6 13.8 11.9 11.5 9.5 2003 2004 2005 2006 2007 Source: ProsperAr based on Balance of Payments data, and Survey of Big Companies, INDEC Argentina’s Investment Development Agency
  • 12. Leading Companies Invest in Argentina More than a thousand TNCs, half of the Fortune 100, operate with a long-standing tradition and long-term vision Argentina’s Investment Development Agency
  • 13. Recent Investments High profitability reassures big players to increase their commitment and attracts more leading companies to invest in Argentina Argentina’s Investment Development Agency
  • 14. Human Capital Highly talented and skilled labor force is a structural competitive advantage Gross Entry Ratio to Tertiary Education (% of new entrants) ✓ Ranked 1st in Guggenheim research fellowships, receiving the largest 0 10 20 30 40 50 60 70 80 90 number of scholarships in Latin United States 82 America (2009) Spain 66 ✓ Over 85,000 graduates from higher Italy 65 education programs and 6,100 Argentina 65 postgraduates per year ✓ 106 universities throughout the Europe & Central Asia 51 Chile 43 country Uruguay 42 Latin America & Caribbean 30 ✓ Ranked 4th in the Global World 24 Entrepreneurship Monitor (2008) ✓ Ranked 5th worldwide in terms of Middle East 24 Brazil 24 quantity of ‘Think Tanks’ and East Asia & P 21 nominated as a Regional Think Tank South of Asia 9 Hub by the University of Sub-Saharan Africa 5 Pennsylvania (2008) Source: ProsperAr based on World Bank, GEM 2008 and University Yearbook 2009, Ministry of Education Argentina’s Investment Development Agency
  • 15. Outstanding Performance, Today and Tomorrow Argentina is the most innovative country in South America and ranks high in the developing world Innovation Prospects Ranking 2009-2013 (Innovation Performance Index: highest=1, lowest=82) Japan 1 Switzerland 2 Ireland 20 Russia 39 Argentina 42 Chile 47 China 46 Mexico 48 Brazil 49 India 52 Colombia 62 Peru 67 Ecuador 69 Source: ProsperAr based on Innovation Index, Economist Intelligence Argentina’s Investment Development Agency
  • 16. High Returns on Knowledge Produced Scientists are the most prolific in terms of knowledge production in the region (as measured by science publications) Science Publications per 100 Full Time Reserachers Science Publications per Million Dollar Spent in (Full-time or equivalent - 2007 or last available year) R&D (2007 or last available year) 25 6 21 5 17 4 13 3 8 2 4 1 0 0 Argentina Brazil Mexico Chile Argentina Chile Brazil Mexico Source: ProsperAr based on the Argentine Center of Information on Science and Technology (CAICYT) Argentina’s Investment Development Agency
  • 17. Investment Opportunities Across Sectors in Argentina: An Overview Machinery Sector Agro-Industry Wine Industry Health Industry Biotechnology Professional Creative and Value IT Industry Industry Added Services Argentina’s Investment Development Agency
  • 18. Agro Industry Leading global producer & exporter of food commodities and products Argentine Share in Global Exports and Global Position (export % and position) Natural honey 24.5 Pears 18.2 Lemon juice, concentrated 73.3 Safflower seeds 32.0 Soybean oil 50.2 Grape juice 20.5 Sunflower oil 23.3 Lemons and limes 14.7 Soybeans 11.6 Safflower oil 12.0 Powdered whole milk 9.9 Sunflower seeds 1.3 0 10 20 30 40 50 60 70 80 Source: ProsperAr based on FAO data Argentina’s Investment Development Agency
  • 19. Agro Industry High agricultural efficiency and productivity Soybean Production Yield 2007 Wheat Production Yield 2007 (Hectograms/Hectare) (Hectograms/Hectare) 29,711 28,270 28,066 27,046 24,369 23,010 23,220 10,562 hectograms hectograms S. da lia a in U. na ra nt st Ca S. a lia ge a Au ad in U. ra Ar nt n st Ca ge Au Ar Source: ProsperAr based on FAO Argentina’s Investment Development Agency
  • 20. Machinery Sector An innovative cluster with a long-standing tradition Agro Machinery Cluster 40,000 employees (80% skilled labor) More than 100 years of expertise Cluster US$850 million production in 2007 650 factories A growing production of high-tech precision agro- Know-how to produce innovative components equipment for new agronomic practices like “Direct Sowing” Source: ProsperAr based on Argentine Chamber of Agricultural Machinery and Strat Consulting Argentina’s Investment Development Agency
  • 21. Wine Industry Unique terroir, tradition and freedom to innovate Wine Exports (in millions of dollars and in million of liters) 5th largest producer in the world 700 Fastest growing exporter 450 in the world (22.3% per 400 600 year, 2002-2008) 350 500 7th largest millions of liters millions of US$ 300 domestic 400 250 market 300 200 150 200 100 100 50 7th largest 0 0 exporter in the world 01 02 03 05 06 07 08 04 20 20 20 20 20 20 20 20 Millions of liters US$ millions Source: National Vitiviniculture Institute (INV) Argentina’s Investment Development Agency
  • 22. Wine Industry Quality-Value advantage positions Argentine wines globally Traditional and High Potential Markets Growing Sophistication and Value Added Glass-Bottled Wine Exports by Country Destination Export Growth by Price Segment compound (2008) annual growth rate (2002-2008) U.K. Netherlands Icon 237% 9.3% Canada 7.1% 10.4% Brazil 7.7% Ultra 44% Latin America Premium 5.2% Others 15.4% Super Other Europe 35% 4.6% Premium Asiatic Countries 3.8% Nordic Countries Premium 24% Mexico 3.7% Russia 2.5% 1.2% Russia United States 29.0% 1.2% Popular 25% Premium Source: Wine of Argentina and Wine Area Argentina’s Investment Development Agency
  • 23. Health Industry Applied knowledge Clinical Research Investments in the ✓ The rate of clinical trials per 100,000 Pharmaceutical Industry (millions of US$) inhabitants is 1.45, nearly double the average (0.79) in Latin America. ✓ Competitive advantages due to solid hospital infrastructure and hi-tech equipment. 91.8 +170% ✓ Creation of the clinical trial registry in 2009: critical tool for researchers, experts, patients 65.8 and donors. 49.6 44.9 ✓ Focus on the more advanced phases of 34.0 37.2 clinical trials. Share of Clinical Trials by Phase (in %) Phase I Phase II 1% 18% 2002 2003 2004 2005 2006 2007 Phase IV Phase III 68% 13% Source: ProsperAr based on CEPAL (2008) and CAEME Argentina’s Investment Development Agency
  • 24. Biotechnology Applied research and first-class scientists Biotechnology Sales ✓ More than 35 bioscience research institutes (by sector) operating in private companies and universities ✓ Highest number of biotechnology companies per capita in Latin America Food Ingredients ✓ Leader in GMO applications accounting for 17% 15% of world GMO crop area Human Health 11% ✓ Integrated with industrial production (agricultural Animal Health 25% and pharmaceutical industries) Inoculants ✓ High-calibre scientists and researchers 8% Biotechnology Investment Incentives: accelerated depreciation of income tax and early return of VAT Seeds & Plants for capital goods and equipment 41% Source: Biotec Sur, International Service for the Acquisition of Agri-biotech Applications (ISAAA) and Bisang, Gutman, Lavarello, Sztulwark and Diaz (2006) Argentina’s Investment Development Agency
  • 25. Professional and Value Added Services High quality at competitive costs ✓ Buenos Aires as the 14th most attractive city Record Levels of Exports of Value in the emerging world for outsourcing Added Professional Services = activities (“Global Services” index) US$4.9 billion (2008) ✓ Argentina ranks among the top 20 most attractive locations for outsourcing Cultural & Entertainment (ATKearney’s Offshore Location (US$419 mn) IT Attractiveness Index) (US$770 mn) ✓ A location with the presence of leading companies: Globant, Atento, Teletech, Teleperformance, Motorola, Microsft, HP, IBM, Citibank, Repsol, CapGemini, Tata Consulting and Nextel Business, Professional & Technical (US$3,7oo mn) Source: ProsperAr based on Balance of Payments data, INDEC, ATKearney Consulting and Global Services Magazine Argentina’s Investment Development Agency
  • 26. Professional and Value Added Services Strong advantages make Argentina a global center for skilled outsourcing Minimal time difference with the ✓ High penetration and best English levels in US and main European cities the region (Cambridge ESOL exams) ✓ Other languages spoken: Italian, German, Portuguese and French ✓ Cultural similarities with European markets ✓ Competitive costs ✓ World renowned creativity (advertising and design) ✓ Native Spanish speakers reaching out to a population of 500 million people that speak the language worldwide Argentina Time Zone = GMT -3 hours Source: ProsperAr based on Balance of Payments data, INDEC, ATKearney Consulting and Global Services Magazine Argentina’s Investment Development Agency
  • 27. IT Industry Thriving growth driven by innovative local firms and leading global companies Growing Software Production & Exports ✓ 1,600 software companies (in millions of US$) (60% SMEs) ✓ Young and dynamic sector: 2,500 40% of the SMEs started operations SALES EXPORTS +152% after 2002 and 85% after 1991 2,000 ✓ In 2008 exports accounted for 1,500 28.6% of total sales ✓ 55% of all software companies +364% 1,000 export ✓ Leading international presence: 500 IBM, NEC, Siemens, Google, Oracle, SAP, Intel, Motorola and Sabre 0 Holdings 2003 2004 2005 2006 2007 2008 Source: ProsperAr based on Cessi and INDEC Argentina’s Investment Development Agency
  • 28. IT Industry Talented labor force and public support ✓ Available and affordable high skilled IT Hot Spots labor force ✓ 243 IT degrees offered locally Santa Fe ✓ Some 70,000 students enrolled in university-level informatics programs Cordoba Gualeguaychu ✓ Public-Private cooperation networks Mendoza Rosario ✓ Software Promotion Law (2004) Buenos Aires ✓ Diverse attractive locations Mar Del Plata Tandil IT Industry Investment Incentives: 10-year tax stability; tax credit up to 70% of employers’ contributions; 60% reduction in income taxes. Source: ProsperAr based on Cessi and other sources Argentina’s Investment Development Agency
  • 29. Creative Industry Diverse and attractive segments Advertising Music Publishing HOT SECTORS Videogames Audiovisual Fashion Design Argentina’s Investment Development Agency
  • 30. Creative Industry A flourishing cluster Cultural GDP 2005 2006 2007 Export boom: Annual growth rate 19.6% 18.6% 15.0% US$500 million in 2007, double 2002 values As a % of total GDP 2.6% 2.8% 3.0% Source: ProsperAr based on SINCA. Advertising The Gunn Report 2008 The most awarded countries in the world in 2008 Argentina in Top 3 : TV & Gunns One of the three best places in Print Interactive Total Cinema Blazing(*) the world to look for ideas. And U.S. (1) 149 52 91 39 331 one of the three best to produce Great Britain (2) 124 39 45 4 212 them, according to Argentina (3) 99 21 2 7 129 The Gunn Report. Germany (4) 47 35 31 6 119 Japan (5) 42 1 60 14 117 Source: ProsperAr based on The Gunn Report 2008. (*) Note: Gunns Blazing tallies all awards given under the various labels of Integrated, Mixed Media, Innovative, Content and Contact, Titanium, and other advertising award catagories. Argentina’s Investment Development Agency
  • 31. Not only good businesses, also a place to enjoy, visit and live
  • 32. See, Experience, Enjoy! Exciting and dynamic culture ✓ Rich urban life with an endless array of cultural activities ✓ 928 museums, 2,813 theaters and 448 cinemas ✓ Buenos Aires chosen World Book Capital 2011 by UNESCO ✓ 2,191 public libraries ✓ A myriad of restaurants, coffee stores and pubs ✓ The World Capital for enjoying Soccer and Polo Argentina’s Investment Development Agency
  • 33. Live Argentina Remarkable living standards ✓ Buenos Aires, together with Berlin and Montreal, appointed as City of Design under the UNESCO Global Alliance's Creative Cities Network ✓ Buenos Aires nominated as the best city to live in Latin America in The Economist’s Liveability Survey (2009) ✓ 11th in Quality of Life Index elaborated by the trade publication International Living (2008) Argentina’s Investment Development Agency
  • 34. Explore Argentina Breathtaking views, magnificent natural scenes UNESCO World Heritage Sites ✓The Glaciers ✓Jesuit Missions of the Guaraní's ✓Iguazu Falls & National Park ✓Cave Cueva de las Manos, Pinturas River ✓Peninsula Valdes ✓Ischigualasto and Talampaya Natural Parks ✓Jesuit Block and Estancias of Cordoba ✓Quebrada de Humahuaca Source: ProsperAr based on UNESCO Argentina’s Investment Development Agency
  • 35. ProsperAr Professional assistance for your business to succeed in Argentina Our group of professionals can assist you by: ✓Providing timely and relevant information on business sectors and geographical locations in Argentina ✓Help identify investment and innovation opportunities in strategic sectors ✓Troubleshoot red tape and obstacles; facilitate the whole investment process ✓Assist in building partnerships between foreign investors and local companies Argentina’s Investment Development Agency
  • 36. Argentina: Naturally Talented to Meet Global Market Needs Thank you! Danke schön! To learn more about how investing in Argentina can benefit you, please contact us: www.prosperar.gov.ar info@prosperar.gov.ar + 5411-4328-9510 Argentina’s Investment Development Agency