{"id":205,"date":"2013-01-10T00:13:21","date_gmt":"2013-01-10T00:13:21","guid":{"rendered":"https:\/\/kierjoffe.com\/news\/?p=205"},"modified":"2018-07-19T15:38:15","modified_gmt":"2018-07-19T18:38:15","slug":"argentina-just-might-get-its-act-together","status":"publish","type":"post","link":"https:\/\/www.kierjoffe.com\/news\/lawyer-argentina-attorney-buenos-aires-law-firm\/argentina-just-might-get-its-act-together\/","title":{"rendered":"Argentina Just Might Get Its Act Together"},"content":{"rendered":"

Forbes.com – by\u00a0Lawrence Goodman
\n<\/a><\/p>\n

Argentina<\/a>\u00a0seems to be on a collision course of its own making.\u00a0 Inflation is soaring and investment is on the wane.\u00a0 Despite being the third largest economy in Latin America with abundant resources, Argentina no longer has access to voluntary capital inflows and the growth that funding affords.<\/p>\n

The republic faces the threat of a currency crisis that could readily spiral to high double-digit inflation.\u00a0 In years past, excessive inflation eroded incomes and wiped out the savings of individuals.\u00a0 Despite intentions to benefit the poor, an unsustainable macro mix, difficult dealings with the private sector, and increasing international isolation promises to again diminish living standards.<\/p>\n

Argentina\u2019s foreign exchange policy and breach of international contracts represent obstacles to attracting financing for many worthy projects.\u00a0 Currency is now rationed by the government.\u00a0 So, an insufficient supply of available dollars threatens to stymie economic activity in the private and public sectors.\u00a0 These barriers also incent foreign and local participants to move funds from Buenos Aires toMiami<\/a>, Zurich or London rather than putting them to work in Argentina.<\/p>\n

To circumvent currency limits, the private sector deftly employs a shadow exchange rate called the \u201cblue chip swap.\u201d\u00a0 Yet, the costs of doing business via the Blue chip exchange rate are high \u2013 as securities priced in U.S. dollars must be purchased and exchanged to obtain scarce foreign currency.\u00a0 In other words, there are two separate exchange rates in Argentina.<\/p>\n

Memories of dual or multi-tiered exchange systems are limited, as they are fortunately relics of the distant past.\u00a0 However, previous experiments \u2013 stretching from Argentina (1978-81 and 2001-02),Jamaica<\/a>\u00a0(1970-78 and 1987-94),\u00a0Mexico<\/a>\u00a0(1982-85), and\u00a0Venezuela<\/a>\u00a0(1984-89) \u2013 all ended poorly with a surge of inflation and shortages of basic goods and necessities.<\/p>\n

At present, the \u201cblue chip swap\u201d strongly signals the risk of a roughly 40% devaluation of the peso.\u00a0 So, this cumbersome and costly exchange rate management system either keeps investors sidelined or requires them to attach a hefty premium to any new undertaking.<\/p>\n

Investment confidence is also vitally linked to adherence to the rule of law.\u00a0 Unfortunately, Argentina has racked up lawsuits by individuals and institutions, and many settlements remain outstanding.\u00a0 For instance, Argentina has not complied with any judgments brought by ICSID, the World Bank\u2019s arbitral body for settling disputes.\u00a0 Similarly, Argentina has refused to comply with more than 100 judgments in New York State alone ordering it to pay its creditors \u2013 including a high profile dispute with holdout creditors.<\/p>\n

Fortunately, the government possesses the power to engineer a dramatic turnaround.<\/p>\n

Argentina is rich in human and natural resource. Moreover, it has nurtured human resources by implementing policies dedicated to social inclusion. \u00a0\u00a0It is the sixth most literate nation among the top 24 emerging markets in the world today.\u00a0 On the financial front, the nation sports a strong balance sheet.\u00a0 Debt is a scant 40% of GDP, well below the safe threshold of 60%.\u00a0 Similarly, Argentina has grown the economy by an average 7.7% per year since the 2001\/02 crisis, while widening its social safety net.<\/p>\n

A reversal of rogue behavior on the legal front would free access to capital and help Argentina lower borrowing costs.\u00a0 For instance, if Argentina\u2019s perceived adherence to the rule of law converged with Brazil\u2019s, as measured by theCenter for Financial Stability\u2019s Rule of Law Index<\/a>, Argentina could reduce future borrowing costs by a minimum of 735 basis points per year over ten years and open the nation to new sources of funding and growth.<\/p>\n

Given the political will, Argentina can engineer a recovery and regain its prominence as a leading G-20 nation by fortifying its social programs through sound fiscal management; moving away from distortionary exchange rate policies; and honoring contracts.\u00a0 How the Kirchner administration develops the nation\u2019s human and natural resources will either accelerate its downward descent or set the stage for prosperity.<\/p>\n

The proven Buenos Aires \u2013 Argentina lawyer professionals at the\u00a0Kier Joffe law firm<\/a>\u00a0have experience working with foreign clients involved in all kind of cases\u00a0in Argentina.\u00a0Buenos Aires Argentina attorney<\/a>\u00a0professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires \u00a0lawyer in Argentina.<\/p>\n

www.kierjoffe.com<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Forbes.com – by\u00a0Lawrence Goodman Argentina\u00a0seems to be on a collision course of its own making.\u00a0 Inflation is soaring and investment is on the wane.\u00a0 Despite being the third largest economy in Latin America with abundant resources, Argentina no longer has access to voluntary capital inflows…<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[12,7,11,8,9,6,10],"class_list":["post-205","post","type-post","status-publish","format-standard","hentry","category-english","tag-argentina","tag-attorney","tag-buenos-aires","tag-law-firm","tag-law-office","tag-lawyer","tag-legal"],"yoast_head":"\nArgentina Just Might Get Its Act Together - News and Articles<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kierjoffe.com\/news\/lawyer-argentina-attorney-buenos-aires-law-firm\/argentina-just-might-get-its-act-together\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Argentina Just Might Get Its Act Together - 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