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ECONOMY | 29-05-2024 13:27

Milei pitches Argentina to Silicon Valley after setbacks at home

Meetings with Tim Cook, Sundar Pichai and Mark Zuckerberg during a 36-hour window would be on a wish list for almost any world leader. But they’re particularly welcome for Javier Milei.

President Javier Milei will pitch investing in Argentina to Apple Inc, Alphabet Inc and Meta Platforms Inc this week in California, building on an unprecedented wave of international recognition in a bid to fortify his political strength at home.

The libertarian economist’s meetings with Tim Cook, Sundar Pichai and Mark Zuckerberg during a 36-hour window would be on a wish list for almost any leader. But they’re particularly welcome for Milei, who badly needs foreign investment to help turn around an economy battling annual inflation near 300 percent and a worsening recession. It’s also an A-list dance card none of his recent predecessors could score, elevating his profile at home. 

“Milei’s personality and radical ideas are creating an unusual investor interest in Argentina, in almost every sector,” said Marcelo García, director for the Americas at geopolitical risk consultancy firm Horizon Engage. “His challenge now is to turn the photo-ops into concrete investments in the country.”

Optimism around the West Coast trip contrasts with Milei’s domestic setbacks. He fired his Cabinet chief Monday less than six months into the job, he hasn’t yet lifted currency controls and he missed a self-imposed deadline last week to win approval for his signature piece of legislation. The bill contains a range of pro-business, deregulation measures to attract investment from the likes of Silicon Valley and would also serve as a template for Milei to work with an adversarial Congress if it passes. 

The president has nonetheless maintained high approval ratings in Argentina, despite his harsh austerity measures and confrontational attitude toward Congress, which he decries as a “rat’s nest.” So far he’s delivering on his chief promise to rein in runaway prices, with monthly inflation forecast to come around five percent in May from a peak of 26 percent in December when he took office. 

Beyond Buenos Aires, Milei is getting a lot of attention abroad. Time magazine put him on the cover last week and he’s received ample praise from billionaires like Elon Musk for rapidly cutting spending. So far this year he’s also made appearances at the World Economic Forum in Davos, Switzerland, the Conservative Political Action Conference outside Washington and the Milken Institute in Los Angeles. 

The San Francisco jaunt is also Milei’s first opportunity to prove whether he can recruit the world’s top companies to expand operations or, in the case of Apple, break ground on a store in Argentina. So far, his trips abroad have focused on fortifying relationships with political allies aligned with his free-market, anti-establishment approach, such as Donald Trump in the US or Santiago Abascal of the far-right Vox Party in Spain. He’s generally left investor meetings to his economic team, despite his own corporate background as an economist. 

It’s not immediately clear what Milei is offering Cook, Zuckerberg and Pichai, among others. For Musk, the Argentine leader published a decree to allow Starlink to sell its satellite Internet in the country. More broadly, the nation’s protectionist policies have made iPhones and other high-end products cost nearly double what they do in the US, while its labour laws, currency controls and capital restrictions have discouraged some major multinationals from having a larger presence.

“Beyond Milei rubbing shoulders with the people who are leading the most important change of the century, which is very important for Argentina, he’s giving a very clear signal of where things are going,” said Alberto Ades, a director at investment advisory firm NWI Management. 

The president not only recognises where the world is headed, Ades added, but he’s also trying to “embrace that path with enthusiasm.”

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by Ignacio Olivera Doll & Patrick Gillespie, Bloomberg

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