Why does less investment reach the country than the Pacific Alliance?

ADN EMPRESARIO – Argentina only receives 29.1% of direct foreign investment with respect to the Pacific Alliance. According to a work presented in the last hours by the economists of the Fundación Libertad y Progreso where this figure is exposed, it is also detailed that “between 1990 and 1999 it was able to receive more than all that Chile, Colombia and Peru added.”

In the last 20 years, Argentina went from representing 101.1% of the Foreign Direct Investment (FDI) of the Pacific Alliance, to only 29.1% for the 2016-2019 period.

In the 1990s, while Argentina received an average of US $ 6,478 million from FDI, in the countries of the Pacific Alliance they totaled US $ 6,406 million.

For the Fundación Libertad y Progreso, “populism and measures such as the stocks led investments to migrate to other countries in the region; and that is why between 2011-2015 the FDI that Argentina received was only 22.3% of the dollars per investment that reached countries in the region ”.

From the entity they assure that, “in addition, some capital escaped” disguised “as FDI so that the investment was actually less than that reported. Between 2016-2019, the trend improved slightly for Argentina, receiving about 29.1% of FDI compared to the countries of the Pacific Alliance. This marginal improvement responds to a greater extent to a fall in FDI at the regional level than to a one-off increase in Argentina, which was also reduced ”.

The “healthiest” tool for generating dollars that promote sustained development is dollars per FDI. Along these lines, the Mercosur-European Union agreement represents a new opportunity to recover the level of investment in Argentina since the EU is the second most important trading partner for Argentina (after Brazil).

Between both blocks they concentrate 34% of the FDI stock; the blocks add up to 25% of the global GDP and represent 750 million inhabitants, concentrate 37% of world exports and generate an amount of US $ 95,000 million between the blocks.

They say of FLyP that “the Argentine potential with the Mercosur-EU agreement is within reach. However, the country must regain competitiveness, which will imply structural reforms and a paradigm shift. In this framework, a good renegotiation of the debt with the IMF can serve as an engine of credibility to face the reforms and lead the country to a long-term sustainable development”.