How to Do Business in Argentina Essay
April 20, 2006
The main goal for the project "How to do business in Argentina" was to show how a Multinational Company must approach different aspects like government, laws, society, culture and infrastructure when facing the challenge of doing business in other countries.
First, we will do a short review of some important background aspects such as its geography, its localization and main geographical characteristics. We will also analyze historical events and political factors that influenced society, culture, economy and development of the country. The government system, economic factors such as inflation and GDP, technological factors and labor market …show more content…
Argentina gets its major benefits from natural resources, a highly literate population, an export oriented agricultural sector and a diversified industrial base. However, when President Menem became president in 1989, the country had huge external debts, inflation had reached 200% per month, and output was falling quickly. The government embarked on a trade liberalization, deregulation, and privatization effort trying to combat the economic crisis. In 1991 it implemented radical monetary reforms which pegged the Peso to the US dollar to combat hyperinflation. Inflation fell quickly but the dollar coupling was a two edged sword because Argentina ceded control of its monetary policy to the United States and could not adjust the value of its currency as necessary. As the Brazilian real plummeted in 1999 the peso could not follow suit, leaving Argentine exports very expensive relative to those of its neighbor. This loss of export capability and a decline in global prices for farm products exacerbated Argentina's plight by limiting the country's ability to earn foreign currency and repay dollar denominated