Download FDI in brief*: Argentina

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
FDI in brief*: Argentina
FDI inflows in 2002 diminished to less than $1 billion, compared to the peak of $24 billion in 1999
*Complete tables are presented in the Country Profile: Argentina, World Investment Directory online, Latin America and the Caribbean
FDI flows to Argentina dropped by 64% from $2.2 billion to $0.8 billion in 2002, while outflows were negative $0.6 (figure 1).Inward
FDI stock amounted to $34.8 billion while outward stock amounted to $18.1 billion in 2002 (figure 2).
As TNCs from developed countries (in particular the United States and Spain-see table1) are the largest foreign investors in Argentina,
they were also responsible for the decline in inward FDI flows (figure 3). This was particularly the case for TNCs operating in the
service industry as the large decline in FDI flows in the tertiary sector shows (figure 4). In terms of FDI stock, there was only one
service industry (electricity) which was ranked among the three most important industries in 2002, while in the previous years tww out
of the three industries were service industries (table 2).
TNCs have been reluctant to invest in a highly uncertain market. The uncertain outcome of political and financial instability in the
country has been a driving factor behind the sharp decline in FDI to Argentina.
The significance of FDI in the economy as measured by inflows as a percentage of gross fixed capital formation (figure 5) declined
considerably since 2000. However, as as a percentage of GDP, FDI stock continued to follow its upward path (figure 6).
In 2002 the largest foreign affiliates of host TNCs in Argentina in three sectors all originated in Spain: Repsol (primary), Telefónica de
Argentina SA - TASA (tertiary) and BBVA Banco Francés SA (in finance) (table 3).
24
Figure 1. FDI flows, 1992-2002
Figure 2. Inward FDI stock, 1991, 1996 and 2002
(Billions of dollars)
(Billions of dollars)
40
FDI inflows
FDI outflows
20
Inward FDI stock
Outward FDI stock
30
16
12
20
8
4
10
0
- 4
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
1991
1996
2002
Figure 3. FDI inflows by region, 1992-2002
Figure 4. FDI inflows by industry, 1992-2002
(Billions of dollars)
(Billions of dollars)
20
24
Developed countries
20
Developing economies
16
Unspecified
18
Primary
16
Secondary
14
Tertiary
12
12
10
8
8
6
4
4
2
0
0
- 2
- 4
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
1992 1993 1994 1995
1996 1997 1998
1999 2000 2001 2002
FDI in brief: Argentina (continued)
Table 1. The top three investment partners in terms of FDI stock, 1992,1997 and 2002
(Shares in total)
Year
1992
1997
2002
Inward FDI stock
Outward FDI stock
United States (35%), France (10%), Italy (8%)
United States (35%), Spain (10%), Chile (8%)
United States (28%), Spain (26%), France (9%)
..
..
..
Table 2. The three most important industriesa in terms of FDI stock, 1992,1997 and 2002
(Shares in total)
Year
1992
1997
2002
Inward FDI stock
Outward FDI stock
Miningb (19%), electricityc (14%), transport, storage and communications (12%) ..
Electricityc (16%), miningb (14%), finance (11%)
..
Miningb (35%), electricityc (13%), chemicals and chemical products (12%)
..
a At the 2-digit level of the ISIC classification.
b Refers to mining, quarrying and petroleum. c Refers to electricity, gas and water.
Figure 5. FDI flows as a percentage of gross fixed capital
formation, 1992-2002
Figure 6. FDI stock as a percentage of gross domestic
product, 1991-2002
(Per cent)
(Per cent)
54
40
FDI inflows
35
FDI outflows
44
Inward FDI stock
Outward FDI stock
30
34
25
20
24
15
14
10
4
5
0
-6
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
FDI in brief: Argentina (concluded)
Table 3. Largest three home-based TNCs, largest three foreign affiliates of home-based TNCs, and largest
three affiliates of foreign TNCs
Company
Host economy
Industry
Sales
Employees
386
118
115
3 200
1 500
11
109
52
7
1 300
1 600
240
A. Industrial
a) Largest home-based TNCs, 2002 (Millions of dollars and number)
Molinos Rio de La Plata
Rasic Hermanos
Roemmers
Argentina
Argentina
Argentina
Food
Agriculture
Pharmaceuticals
b) Largest foreign affiliates of home-based TNCs, 2002 (Millions of dollars and number)
Arcor do Brasil
TCA Tecnologia em Componentes Automotivos
Firenze Acabamentos em Couro
Brazil
Brazil
Brazil
Food
Motor vehicles
Leather and leather products
c) Largest affiliates of foreign TNCs in the host economy, 2002 (Millions of dollars and number)
Repsol-Ypf
Spain
Petroleum
4 283
4 810
Shell Compañia Argentina de Petroleo
Netherlands
Petroleum
1 268
1 300
Esso Petrolera Argentina
United States
Petroleum
1 220
2 000
119
67
61
2 550
170
170
145
112
32
7 000
..
20
B. Tertiary
a) Largest home-based TNCs, 2002 (Millions of dollars and number)
Multicanal
Maruba
Representaciones de Telecomunicaciones
Argentina
Argentina
Argentina
Telecommunications
Transport and storage
Trade
b) Largest foreign affiliates of home-based TNCs, 2002 (Millions of dollars and number)
Enterpa Ambiental
Expofruit Ltd
Arcor U.S.A. Inc
Brazil
United Kingdom
United States
Recycling
Trade
Trade
c) Largest affiliates of foreign TNCs in the host economy, 2002 (Millions of dollars and number)
a
Telefónica de Argentina
Spain
Telecommunications
2 797
Disco
Netherlands
Trade
1 915
..
Ekono
Netherlands
Trade
1 836
15 500
Assets
Employees
C. Finance and Insurance
..
a) Largest home-based TNCs, 2002 (Millions of dollars and number)
Banco de Galicia y Buenos Aires
Banco de la Provincia de Buenos Aires
Argentina
Argentina
Finance
Finance
6 509
6 382
5 718
121 000
Banco Macro
Argentina
Finance
624
1 445
a
b) Largest foreign affiliates of home-based TNCs, 2002 (Millions of dollars and number)
Eurobanco Bank Ltd
Banco Galicia Uruguay
Banco de La Nacion Argentina
Bahamas
Uruguay
Brazil
Finance
Finance
Finance
97
..
..
a
..
50
30
c) Largest affiliates of foreign TNCs in the host economy, 2002 (Millions of dollars and number)
BBVA Banco Francés
Spain
Finance
9 599
a
..
Banco Río de la Plata
Spain
Finance
9 394
a
4 369
a
2 625
b
1 100
b
Banco Patagonia Sudameris
a December 2001. b December 2000.
Italy
Finance