Milei’s 180-Degree Turn in Argentina

With Javier Milei’s victory as President of Argentina, economic policies have shaken the possibilities for entrepreneurs. The main goal of the new Argentinian government is to encourage business investment within the country, aiming to create more jobs and strengthen competition. However, the prolonged economic crisis that has been dragging on for years has not been easy to reverse. In the early months of his administration, President Milei repeatedly said, “There is no money,” a statement that surprised and worried entrepreneurs, who had previously been ignored or minimized by past governments.

Despite the initial climate of distrust, a study conducted by the consultancy firm Taquion, in collaboration with REF Argentina, revealed positive results. Over 178 business leaders, including presidents, managers, and CEOs of Argentina’s leading companies, the responses showed renewed optimism about the government’s economic direction. 88% of respondents evaluated the president’s policies for business development favorably, and 87% predicted that the country’s economic activity would grow in 2025. Of this percentage, 58% estimated growth between 3% and 5%.

However, several obstacles are still recognized as potential barriers to progress. Entrepreneurs highlight the high tax burden, persistent inflation, and labor regulations as the main challenges. These issues, while being addressed by the government, remain a significant concern for businesses. Some entrepreneurs have their sights set not only on internal growth but also on regional markets. Among the most attractive markets are Paraguay, Chile, Mexico, Uruguay, and Brazil. The idea is that, once internal foundations are strengthened, Argentine companies can seize new opportunities in the region.

In this context of change, statements from entrepreneurs like Marcos Galperin, founder of Mercado Libre, have resonated strongly. After the announcement of Milei, Galperin tweeted: “They lied to you for 80 years, yesterday they told you the whole truth in 10 minutes.” This phrase quickly went viral, reflecting the frustration and demand for transparency that many business leaders felt. In another response, Galperin encouraged entrepreneurs to “start a business and make it sustainable,” emphasizing meritocracy and personal effort as keys to success.

However, these statements also open up a debate about the inequalities in access to opportunities. The model of the entrepreneur who, with a brilliant idea and a lot of effort, can disrupt an industry is inspiring, but it doesn’t always reflect reality. The country’s structural conditions, such as lack of access to credit, fiscal pressure, and inflation, make it difficult to ensure an even playing field for competition.

Despite these challenges, Argentina’s small and medium-sized enterprises (SMEs) are showing signs of growth. According to data from the Employment and Business Dynamics Observatory (OEDE), which depends on the Ministry of Labor, there were 528,000 companies in Argentina in 2021. In the export sector, SMEs have also seen positive results. Between January and November of 2024, Argentine SMEs’ exports grew by 21.7% compared to the same period in 2023, reaching $9.234 billion. This increase represents 12.4% of Argentina’s total exports during that period, with an even greater growth in volume, increasing by 27.5%, totaling 7.9 million tons of exports.

The 2024 marks a turning point for entrepreneurs in Argentina, with policies promising to reactivate the economy through investment and the promotion of competitiveness. While the tax burden, inflation, and labor regulations remain significant obstacles, entrepreneurs’ optimism is evident. The expansion into regional markets, the potential for greater growth, and the evolution of SMEs are positive signs that, despite the challenges, the path toward a more solid economic future may be underway.

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Szólj hozzá!