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Argentina negotiates oil worker contracts in effort to woo investment

Wednesday, November 2nd 2016 - 10:35 UTC
Full article 6 comments

Argentina's government is negotiating more flexible oil workers' contracts to woo investors to the Vaca Muerta shale fields and overcome an energy deficit.High labour costs are thought to be the primary obstacle to investment in the country's oil and gas sector, and negotiations are politically sensitive in a country with an influential labour movement, meaning some changes are off the table. Read full article

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  • Marti Llazo

    “It is not clear if the labour agreement will be enough to interest new companies.”

    Despite all the hoopla about the Macri government converting Argentina into a more business-friendly destination, the country remains one of the worst in the world in which to start and operate a business. Massive bureaucracy, corruption, taxation, inflation, crime, a useless judiciary and hostile regulatory environment, and the padding of labour and “social peace” bribery mentioned in the article are just a few of the long-standing factors that will continue to keep Argentina off the list.

    The conditions in Argentina for starting and running a business are even worse than the enormously charitable new rankings of the World Bank, which remind us that it's easier to run a business in Uganda, Honduras, and Zambia than in Argentina. And when you get right down to it, Argentina, with its indelible legacy of Peronism, really doesn't want to accommodate foreign investment.

    Nov 02nd, 2016 - 12:58 pm - Link - Report abuse 0
  • CapiTrollism_is_back!!

    But whether you like it or not, it can get away with a lot more than Uganda, Honduras, and Zambia. It's called “economies of scale”.

    If the USA and Canada have the same exact conditions for investment, everyone would invest in the USA, because of scale. So Canada needs to work harder to attract investment. So the fact Argentina, if what you say is even true, is at the same level as the countries you listed is irrelevant because it's economy is easily 10 to 20 times bigger. Unfortunately that plays a role. (I don't like it because it rewards overpopulation in other areas, which means to many non-argentines in the world, to many foreigners... to many potential enemies).

    Nov 02nd, 2016 - 01:55 pm - Link - Report abuse -3
  • chronic

    The primary bar to development is the lack of confidence in the continuance of the rule of law.

    Nov 02nd, 2016 - 02:22 pm - Link - Report abuse +1
  • Marti Llazo

    If the economy of scale went with sufficient probability of significant returns then there might be more willing to deal with the enormous risks and the galaxy of other powerful impediments involved in setting up and running a business in Argentina . But as we have all seen, considering the size - the scale - of the economy, both new foreign and new private domestic investment is practically nil. Such is the impact of the set of negative factors, which includes the long history of Argentina being wholly unreliable and untrustworthy, factors which the new World Bank analysis graciously didn't include but which certainly impact the present dearth of new investment (real investment, not cheap talk about it).

    Number one on that list for relative ease for opening and running a business is New Zealand, which perhaps not coincidentally has been receiving increases in direct foreign investment at a rate of about 8 percent a year. Which of course Argentina could not even dream of and would in any event find a way to effectively discourage.

    Perhaps the kiwis could teach the argies a few things, and then in 100 years or so....... nah, not going to happen.

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    “....So Canada needs to work harder to attract investment.”

    So Canada ranks 22nd in ease of setting up and running a business, and an unsurprisingly high level of direct foreign investment. A country also serving as a common enough destination for Argentines who can't cut it at home.

    ---

    “....which means to [sic] many non-argentines in the world, to [sic] many foreigners... to [sic] many potential enemies....”

    And too [sic] much argentine xenophobia.

    Nov 02nd, 2016 - 02:42 pm - Link - Report abuse +2
  • chronic

    Multiple African countries have been caught with their finger on the scale distorting reserve projections.

    Considering rg's track history with all things numerical it is logical to assume that they have similarly attempted to “influence” the models for their petro potential.

    Nov 02nd, 2016 - 03:01 pm - Link - Report abuse 0
  • Marti Llazo

    It's said that a language is a dialect with an army.

    In Argentina, bureaucracy is corruption with a legislature.

    Nov 02nd, 2016 - 03:19 pm - Link - Report abuse +1

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