I’ve written extensively about doing business in Chile, and since Argentina, the country next door, has been making a lot of noise, I decided to write up an overview of opportunities in Argentina. Argentina has the third largest economy in Latin America (after Brazil and Mexico), and the 2nd highest GDP per capita in the region in PPP terms (after Chile).
You may have heard the saying, “As rich as an Argentine,” a phrase that was coined to describe Argentina’s wealth and prosperity in the 1800s-1929. Argentina had the 4th highest GDP per capita and was one of the wealthiest countries in the world. Between 1890 and 1930, the capital city of Buenos Aires transformed from a colonial town to the sprawling, mammoth of a city it still is today.
Unfortunately, the Great Depression followed all of that prosperity and then decades of political turmoil. Over the next few decades, Argentina borrowed from foreign banks and ran hefty budget deficits. In the 1970s, Argentina’s credit rating dropped so low that leaders resorted to printing more currency, leading to the Argentinian Peso’s steady decline.
Argentina next went through a period of hyperinflation and political instability which lasted until the 1990s. By the 1990s and Dot Com Bubble era, the government launched new initiatives to reopen the country, and Buenos Aires became the birthplace of some of Latin America’s most successful technology companies. A group of Argentine Internet pioneers founded companies like MercadoLibre (the eBay of Latin America) and OfficeNet (which was eventually acquired by Staples). (more…)