World Economy

Argentina’s Macri Seeks Help From Int’l CEOs

Mauricio MacriMauricio Macri

At a business conference in Buenos Aires, Argentina’s President Mauricio Macri has asked international CEOs to take another look at his country. Foreign investment is desperately needed to revive its shrinking economy.

Macri won the Argentine presidency last year by promising his free-market policies would bring a wave of foreign investment, DW reported.

So far the wave has been more like a trickle. Companies agree with Macri’s policies, which have included export tax cuts and floating the peso currency, but they are waiting for signs that he can halt the boom-bust cycles that have hobbled Argentina for decades. His job this week is to convince them.

“You are in the right place at the perfect moment,” Macri said in a speech opening the three-day conference. “We can’t change everything in a day or in a year or during one presidency,” he added. “What’s important is that we’ve starting going in the right direction.”

Chief executive officers at the conference include the CEO’s of BP, Coca-Cola and US food processing giant Archer Daniels Midland. Germany’s Minister for Economic Affairs, Sigmar Gabriel, is the most prominent politician in attendance. They are in Buenos Aires to judge whether Macri has put Argentina on a sustainable growth path.

Macri inherited a state nearly bankrupted by eight years of free-spending populism under former president Cristina Fernandez, who is from a left-leaning faction of the powerful Peronist party.

A series of economic crises has forced non-Peronist presidents to leave office before the end of their terms over recent decades, a fate Macri and his center-right Cambiemos party hope to avoid.

Analysts in a central bank poll expect inflation of 41% this year and 19.8% in 2017. They see gross domestic product shrinking 1.5% this year before rebounding to 3.2% growth in 2017.

After his December inauguration, Macri ditched currency controls, cut energy subsidies to try to get the government’s budget under control and issued sovereign bonds, ending Argentina’s 15-year banishment from the international bond market.

But investors, remembering Argentina’s long history of instability, are waiting for signs that Macri’s policies are here to stay.