Although it is one of the largest economies in Latin America, Argentina has struggled to attract foreign direct investment (FDI) as the country’s sovereign debt soars and the Covid-19 pandemic impacts all areas of public life.
In 2020, FDI in Argentina fell by 47%, according to the UN Conference on Trade and Development’s (UNCTAD) Investment Trends Monitor, while overall FDI flows in Latin America and the Caribbean fell by 37% to about $101bn.
While many countries have introduced protectionism regulations to foreign investment in light of the Covid-19 pandemic, Argentina is yet to take any such measures, and full foreign equity ownership of Argentinian businesses is not restricted either, other than in the air transport and media sectors.
There are also restrictions on land ownership by foreign investors, as well as ownership of bodies of water and of land alongside the country’s borders.
According to a US Department of State report on Argentina’s investment climate, the country’s main sectors for investment and trade opportunities are infrastructure, health, agriculture, IT, energy and mining.
The country’s investment and trade promotion agency is the Agencia Argentina de Inversiones y Comercio Internacional, which sits under the Ministry of Foreign Affairs. According to the agency, and based on data from the Argentine National Institute of Statistics and Census, the sectors experiencing the fastest growth in the country are biotechnology and knowledge-based services.
Argentina is currently dealing with the twin challenges of the Covid-19 pandemic and economic recession, and will be reliant on foreign investment if its economy is to recover from the problems of the past 12 months.
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