President Mauricio Macri’s government wanted to send one clear message to the more than 1,900 business leaders and potential investors on Tuesday: Argentina has changed. And it is eager for business.

“Your trust and presence in this forum ratifies this new chapter that we’ve started. A chapter in which the country is on its feet again, in which Argentines see each other and the world with optimism,” Macri said as he opened the Argentina Investment and Business Forum. “A chapter with clear rules of the game, of sanity.”

The president was the first to strike a theme that would be repeated throughout the day: long gone are the days of protectionism, currency controls and distorted prices. And that, in turn, will help the country get out of its deep downturn.

“We are starting to see strong signs that we’re leaving the recession behind,” he said.

There was room for a little nationalism, too, by way of a video that showed an array of Argentines proudly proclaiming “We are Argentina.”

How much this optimism is warranted will largely depend on whether investors will dig into their pockets. Expectations are high. Argentina is trying to lure investors, with opportunities across nine sectors worth US $240 billion. And two areas make up more than 70 percent of the total: infrastructure and energy.

Total Investment Opportunities in Argentina Across 9 Areas

Transportation Infrastructure Federal Infrastructure & Public Works Power & Renewable Energy
US$80 billion US $60 billion US $35 billion
Mining Oil & Gas Real Estate and Urban Development
US$30 billion US $25 billion US $5 billion
Agribusiness Telecom & High Tech Tourism
US$2 billion US $2 billion US $1 billion

Source: Argentina Investment + Trade Promotion Agency

One of Macri’s promises is that his government will take on the biggest infrastructure spending in the history of the country, mostly in transportation infrastructure. There’s certainly plenty of need. Less than 35 percent of the country’s roads are paved, according to official figures. And only five percent of freight is transported by rail.

The government is trying to woo in businesses in part by emphasizing transparency and public tender processes, promising that the days of crony capitalism running public works is long gone.

The government is also pinning much of its investment hopes on energy, with a particular focus on electricity generation. The country doesn’t just have a shortage of energy but is also highly reliant on fossil fuels, making it an anomaly in a region that has seen interest in renewable energy soar.

Opportunities of investment in power and renewable energy

Renewables US $15 billion
Hydroelectric US $10 billion
Thermal US $4-5.4 billion
Nuclear US $2.8 billion
Power grid US $5 billion

Source: Argentina Investment + Trade Promotion Agency

There’s lots of optimism for the renewables sector after a tender last week received offers to install 6,366MW, more than six times the stated goal of 1,000MW. Energy Minister Juan José Aranguren was sure to point out the evident investor interest, which was also evidenced in an earlier tender for thermal energy, illustrates what a great opportunity Argentina represents for investors.

Photo via Clarín
Photo via Clarín

 

Beyond renewables, Argentina is also seeking to develop its oil and gas reserves. Mere hours after Aranguren was talking of the need to replace fossil fuels with cleaner energy sources, he was in another panel trying to woo investors to the hydrocarbons sector. And he got plenty of industry help from Executive Director of Shell Argentina Teofilo Lacroze and YPF Chairman Miguel Gutiérrez, among others.

The goal of the panel was to sell two main opportunities for investment in oil and gas: developing the Vaca Muerta formation, which holds the world’s second largest shale gas and fourth largest shale oil reserves in the world, and securing concessions for offshore oil and gas reserves.

While optimism was the name of the game at the Centro Cultural Kirchner, some are skeptical of the government’s strategy.

“To use investment as the sole engine for an economy is a delusion,” said former Economy Minister Roberto Lavagna in an interview with El Cronista. “As a society, our ruling class continues to struggle to find a middle point. We either fall into the populism of encouraging consumption without caring about investments, which is very shortsighted, or in the other extreme, we sacralize investments.”

Others, like economist Miguel Angel Broda, believe the real challenge is to achieve sustainable economic recovery, regardless of the short-term signals. During a macroeconomy panel, Broda said that he believes “there’s a good perspective for a cyclical economic recovery, but we have to see if this recovery is sustainable over time, and to determine the normal growth rate for a country that wants to be normal after seventy years of decline.”

But for now, there’s no place for skepticism on the government’s side. Today, hundreds of one-on-one meetings are scheduled between ministers and the most important business leaders. Their hope: that companies’ interest in investing in Argentina will solidify into several big fat checks.

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