Interview with Argentina’s Ambassador to the UK, Carlos Sersale Di Cerisano
How strong are the economic ties between the UK and Argentina?
Ambassador Sersale Di Cerisano: The UK has a 150-year history of investing in the Argentine Republic, making it one of the first countries to have seen the great potential of our country as a place to do business. For Argentina the importance of the UK stems from the fact that it is one of the major global investors. For example in 2014 it was the world’s second biggest international investor, only behind the US, with an FDI stock of $1.584trillion.
Our aim is to improve the business environment to help attract more investment…
At the same time the UK is a serious investor in Argentina, taking 12th place in 2014 with a stock of $2billion. These investments are mostly found in oil, which makes up around one third, mining, petrochemicals, machine equipment and the non-financial private sector.
The challenge here is to keep increasing the UK’s FDI in Argentina, while diversifying the sectors in which that investment is made. At the moment the investment is focused on traditional areas but there are new opportunities that are emerging in the Argentine economy.
Bilateral trade in 2014, reached $1.4billion, which was comprised of Argentine exports of $885million and UK exports of $536million. These stats don’t reflect the potential of both countries, which is why we need to work hard to promote the opportunities and share information so that the mutual commercial knowledge in both countries grows.
What opportunities does Argentina hold for UK investors?
ASDC: Today Argentina counts with a unique combination that makes the country very attractive to realise business. We have an abundant supply of natural resources, a strong technological and industrial tradition, highly qualified workers, a diversified production matrix, good profitability, access to a large market, integration to global supply chains and a great capacity for innovation. All of this is accompanied with the strong commitment to give investors a high degree of economic liberty and judicial security. This country has excellent prospects for the short and medium term, UK plc has some world-class companies that should be able to help implement and finance our ambitious infrastructure projects.
What are the emerging sectors in the Argentine economy?
ASDC: There are many of them, which have great investment opportunities. If I had to highlight just some for your readers I would point to renewable energy, software, information technology, professional services, biotechnology and creative industries among others.
How can trade between the two countries increase?
ASDC: If you look at the composition of Argentine exports it is clear that we need to diversify, especially towards the value-added sector. To that end we have identified a significant number of items in which Argentina is an important producer but the UK currently imports from other countries. Of course there are other factors involved, such as preferential tariff systems or the integration with economic groups such as the EU, which may make it favourable to import these goods from other countries. So that means we really need to study the complimentary trade of both countries to find the best ways to integrate our commercial relationship. Also there is work we can do in Argentina to reduce the non-tariff barriers to trade that may be restricting imports from the UK at the moment.
What are the major challenges for LatAm INVESTOR readers in the Argentine business environment?
ASDC: The new government is currently evaluating, as quickly as possible, those aspects which hinder international investors. Our aim is to improve the business environment to help attract more investment. In that context we have taken a series of measures to make it more transparent and friendly. For example one of the most important early moves was to create the Investment Agency, which will act to facilitate foreign investment in the country.
In its first 100 days this government moved quickly on some investment policies; how will that help investors?
ASDC: In the early months of the new leadership we worked to make concrete changes to some of the worst obstacles that invested for international investors. In this respect we have advanced on three important fronts: 1) We have dismantled the old exchange controls and freed the peso, 2) We have improved the import scanning system, to make it more fair, transparent, efficient and quick, 3) We have eliminated or reduced the export taxes that distorted the market.
How much of a challenge is the Falklands/Malvinas dispute when it comes to improving the relationship between the UK and Argentina?
ASDC: The dispute about the sovereignty of the Malvinas exists, it remains and its international recognition has been established by Resolution 2065/XX of the General Assembly of the United Nations. However, that does not mean that the two nations can not work together with a complimentary focus in various sectors.