Argentina opening up after 15 years – new export opportunities for Finnish companies
In South America, the Argentinian economy is gradually opening up for foreign business again. Finnvera’s experts see opportunities for Finnish companies in Argentina.
Argentina’s economy collapsed at the turn of the millennium and, owing to unpaid debts, the country remained outside international financial markets for many years. However, the new conservative administration has taken quick action to resolve any unsettled disputes with Argentina’s creditors. In consequence, the country is gradually able to renew its relations with international providers of financing. The new Government has also lifted the restrictions on foreign trade.
According to Jussi Haarasilta, Executive Vice President at Finnvera, Argentina is gradually becoming a potential export country for Finnish companies.
“Necessary reforms were neglected during Argentina’s long period of isolation. For instance, the infrastructure is in urgent need of development, and that’s where Finns might well have a lot to offer in the coming years. This could mean, for example, telecommunication and electricity networks, mining, wood processing and the construction of harbours,” Haarasilta lists.
“In short, the traditional Finnish export portfolio is well suited to Argentina’s future needs.”
Haarasilta stresses that with its population of 43 million, Argentina is now becoming an attractive market for many companies.
“Competition will be stiff for certain,” he predicts.
“Realisation of large projects calls for financing, which in turn requires that the counterparty is creditworthy. Argentina was outside export credit guarantees for years. At present, Finnvera can support the financing of trade and is investigating how to guarantee long-term credits,” Haarasilta says.
“It pays to look into partners’ backgrounds”
Many companies have already contacted Finnvera to inquire about the situation in Argentina. Senior Adviser Mika Relander visited Argentina recently and underlines that even if Argentina offers promising opportunities, companies considering business there should still exercise caution.
“The operating environment continues to involve risks, especially in the public sector, as the country’s economy is still rather weak and will require many long-term reforms. Good examples are the large subsidies for electricity and petrol prices that need to be dismantled before the public economy can be balanced.”
“Otherwise, too, it pays to investigate customers’ solvency and the partners’ backgrounds in advance together with Finnvera,” Relander says.
However, according to Relander, Finnvera always strives to seek and tailor financing solutions that would make the export transaction possible.
“Still, in the case of Argentina, we also need to be rather cautious,” he adds.
Additional information:
Jussi Haarasilta, tel. +358 29 460 2601, jussi.haarasilta (at) finnvera.fi
Mika Relander, tel. +358 29 460 2725, mika.relander (at) finnvera.fi
