The Promise of Argentina’s Economic Transition
Source: Institutional Investor
By: Neil Brown
At a time when populist politics are driving many countries away from investment-friendly policies, Argentina is quickly moving in the opposite direction. Latin America’s fourth-largest economy is starting to reopen for business. In trips we at KKR have made this year, we’ve seen small things — like not needing a fistful of U.S. dollars to manage a dual exchange rate, running into U.S. President Barack Obama’s entourage on the street in Buenos Aires and seeing the evident optimism in local businessmen — that indicate how much change is afoot.
It is still early days in President Mauricio Macri’s tenure. So far we have been impressed by his team’s clear focus on normalizing Argentina’s economy and reintegrating into the global system. Prior to the country’s general election last October and runoff in November, people were wondering whether meaningful reform would happen at all. That question has been answered: Macri has decisively turned away from the economic policies of former president Cristina Fernández de Kirchner. Now the questions are how deep the reforms will be and whether they will provoke a popular backlash.
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