Nearshore Americas

US Diplomat Gives First Hint of Argentina’s Economic Recovery

Kevin Sullivan, charge d’affairs at the U.S. embassy in Buenos Aires, says Argentina’s economy is beginning to recover and the investment climate is changing. The diplomat, according to MercoPress, cited falling prices and the country’s recent deals with its creditors to support his argument.

Optimism has been fueled by the South American country agreeing to repay the loans it borrowed from members of Paris Club, who had lent money to help the country recover from the 2001 economic crisis.

Sullivan also cited Argentina’s deal with the International Center for Settlement of Investment Disputes (ICSID) and a business agreement between Argentine energy company YPF and Spanish oil and gas firm Repsol. As per the deal with the Paris Club, Argentina will pay $650 million in July 2014 as a first step.

According to the diplomat, U.S. investors are still willing to invest in Argentina.  “People from the private sector tell me that they are receiving more and more phone calls. The situation seems to be changing, in a good way,” he said, according to the news agency.

Sullivan has suggested that Argentina negotiate with U.S. investors to resolve its dispute with the so-called “vulture funds.” Argentina owes billions of dollars to these funds that invested money when the South American country’s economy was in the doldrums.

Argentina has defaulted on this repayment.  Last week, more than a hundred British legislators signed a statement that supported Argentina’s decision not to pay back the money to the “vulture funds.”

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“The vulture funds bought up billions of dollars worth of Argentina’s debt in the early 2000s when the country’s economy was on its knees and its people were suffering horrendous poverty. Defaulting on its debts was the only option,” said their statement, according to the Buenos Aires Herald.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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