Kevin Gray / Sean Maguire
Reuters , UK
March 17, 2008
BUENOS AIRES, March 17 (Reuters) - Argentina is scaring off foreign investment by allying with leftist Venezuela at the expense of ties to its biggest export markets, the mayor of Buenos Aires said.
"Venezuela has one of the worst images in the world these days, but it appears to be the best friend of the government and of our country," Mayor Mauricio Macri, a prominent opposition figure, told Reuters in a recent interview.
Macri said Argentina's economic boom of the past five years cannot continue without major investment and he criticized President Cristina Fernandez de Kirchner for failing to do more to lure foreign investors.
Macri holds one of Argentina's highest-profile political posts and is touted as a potential presidential candidate in 2011, a suggestion he brushed off but did not dismiss.
The businessman and ex-president of popular soccer team Boca Juniors took office last year after defeating a candidate backed by former President Nestor Kirchner, a key ally of Chavez, Latin America's most outspoken leftist leader.
A center-leftist who succeeded her husband last year, Fernandez has maintained the close relationship with Venezuela. Chavez has met the Kirchners regularly, bought billions of dollars in Argentine debt and has pledged to supply oil and diesel to help the country deal with energy shortages.
But Macri said Fernandez' friendship with the fiercely anti-U.S. Chavez is costly, and Argentina should instead be improving ties with China, India, Europe and the United States.
"Argentina needs to have a different foreign policy. Because of a lack of foreign policy, investments haven't been what they should be."
Direct foreign investment in Argentina grew 12 percent last year, compared with 84 percent in Brazil and 82 percent in Chile, La Nacion newspaper reported on Sunday, citing a preliminary report from a United Nations economic agency.
Fernandez blames the International Monetary Fund's policies, backed by the United States, for leading Argentina into a deep financial crisis in 2001-02.
INVESTORS TOOK A HIT
But Kirchner angered Wall Street by browbeating investors into taking losses of some 70 cents on the dollar when Argentina halted payments on its sovereign debt.
It also defaulted on $6.3 billion in debt owed to the Paris Club, an informal group of wealthy creditor nations. No repayment deal has been reached and Fernandez, like her husband, is angling for lenient terms.
One of two leaders of a fractious opposition, Macri has sought to portray his city as business-friendly at a time when the country is making little headway in improving its tattered image with many foreign investors.
Macri said he at times has struggled to win over investors and pointed to a recent trip to Spain and Italy to build up interest in Buenos Aires.
"Even though they thought our proposals were attractive, if Argentina did not pay its Paris Club debt, it was impossible for them to invest," he said. "If we don't solve that problem, we will be trapped."
In his early months in office, Macri has focused on rooting out political patronage jobs and attracting private investment in the transport and housing sectors.
(Additional reporting by Fiona Ortiz and Cesar Illiano; Editing by Kieran Murray)