Ambassador calls for continued Korean investment

Few countries are as far from South Korea as Argentina, but that hasn’t deterred its embassy here.

The Argentine Embassy last week held a dinner to honor the most successful Korean investors in Argentina and introduce the country’s business prospects to investors looking to expand into a region that has seen strong growth throughout the global downturn.

“We are a very large country and we want to emphasize the role of small and medium size enterprises,” said Argentine Ambassador Carlos Alberto Arganaraz.

Argentina is promoting itself as the ideal spot to cater to the entire Southern Common Market of MERCOSUR, an economic and political agreement among Argentina, Brazil, Paraguay, Uruguay and soon Venezuela.

“In investments, it’s not about only trade but also market access,” he said. “In this sense, the Latin American and MERCOSUR markets are very interesting for Korean investors.”

Arganaraz has a two-fold plan to attract foreign direct investment and find companies that have the right synergies for joint ventures in the hotly contested mineral resources sector, industrial and biotechnology sectors.

To overcome the great distance between both countries, Arganaraz suggests that Korean companies add value to Argentine products by investing in food processing plants for Korean taste buds.

“Argentina is also keen on new kinds of technologies in green growth and the green economy by using biodiesel or other products in order to take care of the environment,” he said.

Patagonia is famous for many things, but none more so than its wind which has been known to move small trucks.

“It’s interesting to put up factories in areas where there are wind generation power plants,” he said.

Also solar is a strong possibility for Argentina.

Both renewable energy technologies will fuel their local economies and assist remote areas establish industries for either the internal or external markets.

According to the Foreign Ministry, as of 2010, investment into Argentina from Korean firms was $160 million.

“Argentina is one of the most interesting countries in South America regarding population, geographical situation, climate and also the possibility to have a highly skilled labor force at a lower cost.

“Plus taxes are not very high, the maximum is 33 percent for taxes on companies,” he said.

While Argentina experienced growth of 7.5 percent last year, the economic crisis is starting to take its toll with FDI falling 30 percent in the first six months of this year, said the United Nations Economic Commission for Latin America.

Argentina was not the only country affected; investments fell 31 percent in Paraguay, 18 percent in Mexico, 14 percent in Chile and 4 percent in Uruguay.

Brazil, on the other hand, saw 157 percent more FDI than in the first half of last year.

What could help increase the flow of goods from the region is a free trade agreement with MERCOSUR, something that has been examined since 2004. While talks are ongoing, the last real breakthrough happened in 2009 when Korea and MERCOSUR signed a memorandum of understanding for the “Establishment of a Joint Consultative Group to Promote Trade and Investments.”

By Yoav Cerralbo (yoav@heraldcorp.com)