Argentina´s profile
In recent years, export-oriented services have strengthened, mainly due to highly trained human resources and the competitive exchange rate.
Argentina is the third largest economy in Latin America after Brazil and Mexico.
The country bears a diversified economy and a competitive advantage in sectors such as agribusiness and technological services with high penetration in relevant international markets.
Besides, “Vaca Muerta”, the second largest shale gas reserve in the world and the fourth most important in shale oil is found in Argentina.
It is also worth mentioning “the lithium triangle” shared with Bolivia and Chile, where Argentina has the second largest lithium reserve in the world.
On the other hand, the primary sector is well-known worldwide for its high productivity and the use of state-of-the-art technology.
Argentina´s main trading partners (in terms of imports and exports) are Brazil, China and the United States.
The country population is mostly young; in fact, 55% of its inhabitants are under the age of 35. As regards education, almost 80% of its population attains a high school level whereas admission rate to college education is in the region of 45%, which means that Argentineans between 25 and 59 years of age, currently have, on average, a schooling rate of 11.2 years, being this, one of the highest indicators in Latin America.
Regarding English level of its population, according to the “EFL English Proficiency Index”, Argentina is ranked 25th (out of 100 countries) in terms of average quality, which positions the country as the one with the highest level in Latin America.
In the last years, exportation of services have grown significantly mainly due to the county´s highly qualified human resources and the competitive exchange rate.
The argentine Central Bank (hereinafter “BCRA”) is the entity in charge of setting forth the monetary policies in the country.
Its main task is to promote monetary stability, employment as well as economic and financial development based on social equity (within the framework of the policies defined by the national government).
The current exchange policy follows a “crawling peg” scheme, through which the Central Bank performs slight daily depreciations aiming to avoid appreciation of the actual exchange rate.
In each of the rounds, the BCRA intervenes in the market either to support the exchange rate by satisfying the demand or by buying in order to increase the stock of reserves when the offer is higher.
At present, there are also barriers to the capital flow and for the purchase of foreign currency (hoarding) for individuals owing to shortage of international reserves.
Foreign investors and investments are protectedby argentine legislation. Both, argentine and international regulations guarantee that Argentina is a safe destination for foreign investment and investors. In this sense, Argentina has signed 60 bilateral treaties of investment promotion and protection as well as enacted foreign investment Law # 21.382 to protect such activities.
Additionally, Argentina joined the CIADI in 1994 and has had an Investment Committee observer from the OECD since 1996. The country is also a member of the Multilateral Investment Guarantee Agency (MIGA) and the World Bank Group that offers insurance policies for foreign investment to human or legal persons established in the member countries.
The national Executive Branch has decided to adopt measures described as “transitory and urgent” in an attempt to tighten the exchange rate regime, reduce volatility of financial variables and contain the impact of fluctuations of financial flows on the real economy.
For such purposes, on September 1st, 2019 The Urgency Decree PEN #609/2019 was issued by the Executive setting forth, among other things, that the proceeds from the exports of goods and services must be transferred to the country in foreign currency and/or traded in the foreign exchange market under the terms and conditions set forth by the BCRA.
Likewise, it was also decided that the BCRA will determine in which cases access to foreign currency as well as transfers abroad will require prior authorization based on objective guidelines according to the conditions prevailing in the foreign exchange market and telling between the situation of human persons and that of legal persons. At the same time, the BCRA has been empowered to establish regulations tending to avoid incompliance of the provisions of this measure.
