After years of underinvestment during a populist regime, Argentina is poised for a rebound. CEOs are scouting opportunities, and the agribusiness sector could lead the investment revival in a country with large growth potential. Energy, manufacturing and technology likely will follow.
Globant plans to ramp up business in Argentina over the next five to six years on the bet that an economic rebound will boost demand for technology services ranging from big data to cloud computing and user experience design.
The Buenos Aires-based software developer has earmarked about $80 million for office expansion and training, and plans to hire 5,000 people.
"We see very good prospects for development of the business in Argentina," said Martin Migoya, CEO of Globant, which has operations elsewhere in Latin America as well as in Europe and the U.S.
He is not alone in this cheer. After 15 years of economic volatility under populist rule, Argentina is emerging under a new conservative government as a bright spot for investors.
Since taking office at the end of 2015, President Mauricio Macri has rolled out reforms to make it easier to do business in the country, including scrapping capital and currency controls and trimming the tax burden. He's also widened access to capital by resolving a 15-year debt default dispute.
"All of a sudden, Argentina has gone from being rejected by investors to being closely watched," Migoya said. "The government's plan is well structured for how it is going to clean up all the rules for foreign investors so that the economy can develop much more rapidly."
There are ample opportunities for business. After years of little investment, sagging infrastructure needs to be rebuilt, energy output increased, and manufacturing capacity expanded. Argentina has among the greatest wind power potential in the world in gusty Patagonia, as well as a trove of shale oil and natural gas resources, plus plentiful minerals and farming potential.
Jose Urtubey, a director of Celulosa Argentina, a leading maker of forestry products in Argentina and Uruguay, expects the agribusiness sector to take off first. There's a glut of unused capacity that can be brought on line quickly and expanded into developing value-added products, he said.
Over the past year, Celulosa has diversified its pulp and paper business to make tissue paper for third-party brands like Kimberly-Clark. "Tissue paper is a way for us to continue adding value to our raw materials and...