Buenos Aires prepares to rebuild its financial sector
While recent history may obscure the economic potential of the capital of Argentina, there are elements that indicate it should be among the epicenters of Latin American economy. The biggest obstacle for Buenos Aires’ –and Argentina’s– resurgence as an economic power –now and for the last fifteen years– has been the political instability and, off course, the devaluation crisis and depression it suffered by the start of the 2000s. Despite general improvement, as analysts have noted, there’s still a lackluster feeling.
However, as the most recent report of the Financial Times details, there are several plans that point to a stronger economy and, furthermore, a more attractive economic landscape for foreign investors. The report highlights that two technocrats –and the most recognized politicians in Argentina– are leading these plans and efforts: the president of Argentina, Mauricio Macri, and the Mayor of Buenos Aires, Horacio Rodríguez Larreta. Both have a similar mindset and, even if they have faced criticism, it looks like their efforts will be rewarded.
On one side, Macri is determined on convincing investors, raising the volume of trading and enlarging Argentina’s banking sector. The strategy, as weird as it may sound, relies on turning weaknesses into strengths. The small banking sector, along with the generalized desire of improving it, has led financial institutions such as JPMorgan, Citi and HSBC to take interest on forging stronger ties with Argentina. So far, the image and rhetoric of Macri has convinced foreign institutions that, this time, political clashes won’t go in the way of economic development. Is this statement completely true? It’s still on the air and we’ll have a straight answer after October, when the parliamentary elections take place. Only then there will be clear view on the politic unity of the country.
While Macri depends on speeches and political environment, the work that Rodríguez Larreta is doing seems much more real and straightforward. The Mayor of Buenos Aires, aside from strengthening the Police Force in the city, is betting on improving the quality of life in the slums. The infrastructure in some of Buenos Aires’ slums is far from the desirable living standards: poor public services, no running water, inefficient education systems and, overall, an absence of formal economy.
Rodríguez Larreta’s mission from now to 2019 –when his term ends– is to change the infrastructure and introduce the slums to the same economic prosperity as the rest of the city. Rebuilding the slums is also a way of getting more attention from potential investors. In a way, the technocratic approach of both politicians is working towards the same objective. In fact, it could be said that Macri's plans can gain a major boost through the achievements of the mayor of Buenos Aires.
Both Macri and Rodríguez Larreta’s are plans that need a couple of years to see its rewards. Nevertheless, it seems that foreign institutions are taking note of the efforts made in the country and the capital city.