Startups in Argentina are experiencing rapid growth, driven by technology that fuels innovative businesses with high scalability potential. Finance, agriculture, medicine, and retail sectors increasingly invest in digital solutions. Just as the best real-money casinos in Argentina offer secure and reliable online options, support from investors, accelerators, and government programs enables Argentine startups to expand and establish themselves in international markets.

Startup Ecosystem: Key Players and Institutions

Argentina boasts a well-developed startup ecosystem comprising venture capital funds, business incubators, accelerators, and universities. Organizations such as InnovaRed, Wayra Argentina, and NXTP Labs play a crucial role in the growth of new tech companies.

Key Players in the Ecosystem:

• Wayra Argentina – An accelerator that supports tech startups.
• NXTP Labs – A venture capital fund focused on Latin American startups.
• Endeavor Argentina – An organization that helps entrepreneurs scale their businesses.
• The University of Buenos Aires – offers educational programs and support for innovative projects.

Technological Trends: From Fintech to Biotechnology

The development of startups in Argentina spans several key areas. One of the most promising sectors is fintech, which provides digital payments, financing, and investment solutions.

Popular Tech Startup Sectors:

• Fintech – Payment services, digital wallets, and cryptocurrencies.
• Agrotech – Solutions for precision agriculture and crop monitoring.
• Biotechnology – Development of medicines, genetic research.
• E-commerce – Marketplaces and logistics solutions.

The Fintech Revolution: Digital Finance in Argentina

Financial technologies have been a driving force behind the country’s economic transformation. Fintech startups offer solutions that make financial services more accessible.

Popular Fintech Solutions:

• Digital payment systems – Simplifying the purchase of goods and services.
• Mobile wallets – Allowing users to manage finances online.
• Loans and investments – Platforms that provide quick access to credit.

Agrotech Innovations: Technology for Agriculture

Argentina is one of the world’s leading agricultural producers, and it is developing agritech solutions. Artificial intelligence, drones, and sensor systems can help improve productivity and reduce costs.

Innovative Agrotech Solutions:

• Drones for Crop Monitoring – Assessing Field Conditions.
• Automated irrigation systems – Efficient water usage.
• Supply Chain Management Platforms – Optimizing Product Distribution

E-Commerce: The Digital Transformation of Retail

The rise of marketplaces and logistics platforms is driving the digitalization of retail. Startups in Argentina, such as Mercado Libre, have revolutionized e-commerce in the region.

Key E-Commerce Trends:

• Logistics automation – Using robotic systems.
• Expansion of local marketplaces – New online sales platforms.
• Delivery process optimization – Reducing costs and improving service.

Biotechnology: Innovation in Medicine and Agriculture

Biotechnology startups in Argentina are making a significant impact in both the health and agricultural sectors. Advances in genetic research and new medical treatments are driving considerable progress.

Innovations in Biotechnology:

• Drug Development – New Solutions for Disease Treatment.
• Genetic research – Enhancing crops.
• Bioinformatics – Data analysis in medicine and agriculture.

Challenges and Opportunities: Growing the Startup Ecosystem

Despite Argentina’s rapid growth of startups, the sector faces specific challenges. The main obstacles include limited access to financing, economic instability, and a shortage of skilled talent.

Key Challenges in the Startup Ecosystem:

• Attracting investment – Venture capital is primarily available for more established companies.
• Education and Talent Development – A Lack of Technology Specialists.
• Regulatory barriers – Complexity in obtaining licenses and permits.

Argentine Startups as Drivers of Innovation

Tech startups in Argentina are crucial in driving economic development and innovation, leading to advances in multiple strategic sectors. With a constantly evolving ecosystem, the country has positioned itself as a reference hub in Latin America, fostering emerging companies that offer disruptive solutions in fintech, agrotech, digital health, and e-commerce. Thanks to a combination of local talent, foreign investment, and incentive policies, startups in Argentina continue to expand and make their mark in the global market.

Government support has been a determining factor in the sector’s growth. Programs like the Entrepreneurial Capital Fund and Argentina Emprende have provided funding and guidance to early-stage companies, enabling many startups to scale and consolidate. Additionally, the creation of coworking spaces, incubators, and tech accelerators has strengthened the entrepreneurial ecosystem, offering access to mentorship, networking, and new business opportunities.

Another key element has been international investment. Venture capital funds and major corporations have begun to see Argentina as a hub of innovative talent. Companies like MercadoLibre, Ualá, and Globant have demonstrated that global growth is achievable from Argentina, attracting investors eager to replicate their success with new startups. Moreover, partnerships with foreign companies have facilitated knowledge transfer and the adoption of cutting-edge technologies, further accelerating the sector’s competitiveness.

Despite the country’s macroeconomic challenges, the tech startup ecosystem remains resilient and continues to strengthen. The growing digitalization and adoption of new technologies have increased the demand for innovative solutions, presenting a significant opportunity for Argentine entrepreneurs. With an expanding market and a highly skilled developer community, the future of startups in Argentina looks promising, solidifying the country’s role as a key player in Latin America’s technological revolution.

While Latin America is regaining appeal for startup investment, Ecuador remains off the radar for Venture Capital (VC) for the time being. Excessive state regulation deters capital and hampers the growth of the entrepreneurial ecosystem, thereby preventing the country from capitalizing on the global interest in Latin American innovation. The issue extends beyond capital access—it reflects a systemic problem that stifles entrepreneurship in Ecuador, leaving startups struggling to survive in a competitive global market.

Despite the growth of risk capital in Latin America, Ecuador continues to fail to capture the attention of venture capital (VC) investors. While Colombia has positioned itself as the second most attractive destination for these funds, Ecuador still lacks a solid ecosystem to attract investment. For entrepreneurship in Ecuador to thrive, the country must address fundamental policy and economic constraints that deter investors.

Venture Capital, or risk capital, is a form of financing in which investors provide funds to high-growth potential startups in exchange for equity. This type of investment is crucial for developing technology companies that require significant capital in their early stages. Without access to VC, entrepreneurship in Ecuador remains fragile as startups struggle to secure the necessary resources to scale their businesses effectively.

Latin America’s VC Investment Landscape

According to the VC Report 2024 by Endeavor and Glisco Partners, venture capital investment in the region fell by more than 80% between 2021 and 2023 but rebounded by 30% in the first half of 2024. However, Brazil, Mexico, and especially Colombia are the countries capitalizing on this recovery, which now captures 29% of VC capital in the region. Ecuador does not appear on the list, highlighting its marginal role in the regional investment ecosystem.

Despite having a unicorn like Kushki, Ecuador has been unable to replicate these success stories. According to economist Andrés Rodríguez, the main problem is a state that does not facilitate but overregulates and imposes obstacles to innovation. The lack of regulatory clarity and incentives discourages investment, forcing Ecuadorian entrepreneurs to seek opportunities in other countries.

What Is Colombia Doing Better?

Colombia has managed to attract more investment in startups due to several factors:

• Clear public policies to attract investment in technology.
• Public-private co-investment funds that foster startup growth.
• Tax incentives and access to international markets.
• A solid ecosystem with accelerators, incubators, and available capital at all stages.

This has allowed the average size of investment rounds in Colombia to be 3.5 times larger than in other countries in the region, demonstrating investor confidence. The country’s ability to foster entrepreneurship and create an environment conducive to VC investment has strengthened its innovation ecosystem.

The Colombian fintech sector secured $405.4 million in venture capital in the first half of 2024, with startups such as Nu Colombia and Simetrik standing out. The United States was the primary investor, contributing over 38% of the capital. This demonstrates that international funds view Colombia as a viable destination for technology-driven investments, a status that Ecuador has yet to achieve.

Ecuador Needs Clear Rules and Investment

Ecuador, on the other hand, lacks:

• State policies to foster Venture Capital.
• Financing programs that facilitate startup growth.
• An attractive investment ecosystem for international funds.

Instead of encouraging investment in innovation, the state imposes bureaucracy and barriers that make access to capital difficult. Without clear rules and legal security, investors opt for other countries with better conditions. The challenges in entrepreneurship in Ecuador are deeply rooted in a regulatory framework that fails to incentivize innovation and risk-taking.

Colombia has implemented favorable regulations for startups, including regulatory sandboxes. These policies enable companies to test innovative products and business models without immediately facing full regulatory consequences, creating a nurturing environment for fintech and other high-tech startups to experiment and grow.

In contrast, Ecuador passed the Organic Law on Entrepreneurship and Innovation in 2020, which mentions venture capital funds; however, it still faces challenges in its effective implementation. The regulatory hurdles remain a significant obstacle, and many startups struggle to navigate the complex legal landscape.

Entrepreneurs developing a fintech platform in Colombia can access a regulatory sandbox to test their product in a controlled environment and receive feedback from authorities. Additionally, they can access multiple active Venture Capital funds in the country. In Ecuador, the same entrepreneur would face a stricter regulatory environment and fewer financing options, making it harder for their startup to grow.

“These differences highlight the need for Ecuador to implement more favorable policies to attract investment and foster technological entrepreneurship,” said economist and entrepreneur Carla Pérez. If Ecuador is serious about developing a thriving startup ecosystem, it must create conditions similar to those in Colombia and Mexico.

Startups Fail Within Three Years

Ecuador faces significant challenges in technological entrepreneurship. It is estimated that approximately 80% of startups in the country fail to survive beyond their third year of operation, primarily due to a lack of profitability and inadequate financing. This high failure rate reflects the broader economic instability and lack of support for emerging businesses.

Additionally, there is a considerable gap in the training of technology professionals; each year, approximately 9,000 technology experts are needed, but Ecuadorian universities graduate only 100 to 200, limiting innovation and sector development. This talent shortage further weakens the country’s ability to develop a robust entrepreneurial ecosystem.

A study by EAFIT University in Colombia concluded that companies financed by venture capital are significant job creators and drivers of economic growth. Specifically, venture capital-backed companies tend to experience faster revenue and employment growth compared to those that do not receive such funding. Additionally, these companies typically achieve higher sales volumes and lower bankruptcy rates, suggesting that venture capital drives business growth and contributes to economic stability and job creation.

Ecuador misses out on all these benefits. On average, its economy has grown by less than 2% over the past decade, which explains the country’s increasing informality and unemployment rates. A lack of entrepreneurship in Ecuador means fewer startups reach maturity, resulting in fewer job opportunities and reduced economic diversification.

The Path Forward

For Ecuador to revitalize its startup ecosystem and attract venture capital, it must prioritize key reforms:

• Regulatory Improvements: Simplify and clarify regulations to make it easier for investors and entrepreneurs to navigate the legal landscape.
• Tax Incentives: Implement tax benefits for startups and investors to encourage investment in innovation.
• Public-Private Partnerships: Foster collaboration between government institutions, private investors, and international funds.
• Investment in Education: Expand university programs to produce more qualified technology professionals.
• Accelerators and Incubators: Develop programs that provide mentorship, networking, and capital access to support early-stage startups.

By addressing these challenges, Ecuador could position itself as a competitive destination for venture capital and high-growth startups. Otherwise, entrepreneurship in Ecuador will continue to lag behind its regional peers, and the country will miss out on the economic benefits that a thriving innovation ecosystem can provide.

Uruguay, the second-smallest country in South America in terms of land area, has positioned itself as one of the continent’s strongest economies, boasting the highest quality of life. With a population of just 3.5 million, this nation has earned the nickname “The Switzerland of South America” due to its political stability, low levels of corruption, and advanced democratic system—characteristics that resemble those of the European country.

The World Bank has highlighted Uruguayan economic growth as one of the most outstanding in 2024, with a projected increase of 2.6% for 2025. This performance is driven by several key factors, including significant investment in renewable energy, a robust agricultural sector, and public policies that foster sustainable development. Uruguayan economic growth and stability are driven by long-term strategic planning, responsible governance, and an open approach to international trade.

An Economy Driven by the Agricultural Sector

One of the fundamental pillars of Uruguay’s economy is its agricultural sector. The country is home to more than six million sheep and approximately twelve million head of cattle—nearly four times its population. This industry not only supplies the domestic market but also serves as one of the country’s primary sources of exports, with products such as beef, wool, and dairy reaching international markets.

Additionally, Uruguay’s production model has prioritized quality certification and traceability in beef production, allowing its livestock products to be recognized for their excellence in various global markets. This strategy has positioned Uruguay as a leader in the meat industry and has facilitated trade agreements with countries such as China and members of the European Union. The commitment to high standards ensures that Uruguayan economic growth remains competitive while promoting sustainable agricultural practices.

Beyond livestock, Uruguay is a major producer of soybeans, rice, and other grains, making its agricultural sector a critical driver of economic stability. The country’s focus on agro-industrial innovation has contributed to Uruguayan economic growth, with the adoption of new technologies enhancing productivity and sustainability in farming.

Leadership in Renewable Energy and Sustainable Development

Uruguay has also established itself as a leader in renewable energy within the region. According to the International Renewable Energy Agency (IRENA), over 90% of the country’s electricity is generated from clean sources, including wind, solar, and hydroelectric power. This model has been recognized internationally as a success story, enabling Uruguay to diversify its energy matrix without requiring direct subsidies, thanks to a bidding system promoted by the state-owned energy company, UTE.

The private sector’s participation in energy generation through sustainable investment and promotion schemes has made Uruguay a global benchmark in energy transition. This has reduced dependence on fossil fuels, stabilized electricity costs, and attracted foreign investment. The country’s commitment to sustainable energy has made it a key player in Latin America’s efforts to combat climate change.

Moreover, Uruguay invests in green hydrogen, an emerging sector with significant growth potential. The government has outlined plans to develop renewable hydrogen production, which could open new opportunities for export markets. By focusing on clean energy solutions, Uruguayan economic growth is further strengthened through environmental responsibility and innovation.

Uruguay: A Costly Country in the Region

Despite its economic stability and high quality of life, Uruguay is recognized as one of the most expensive countries in Latin America. A 2024 study by the Center for Development Studies (CED) revealed that prices for essential products in Uruguayan supermarkets are, on average, 27% higher than those in some European countries, such as Germany and France.

Compared to its neighbors, prices in Uruguay exceed those in Mexico by 80% and those in Argentina and Brazil by 20%. This difference is due primarily to the tax structure, logistical costs, and the small scale of the domestic market. While these factors contribute to Uruguay’s reputation as an exclusive country within the region, they also present challenges for competitiveness and citizens’ purchasing power.

One reason for Uruguay’s high cost of living is its strong regulatory framework, which ensures fair labor practices and social protections but also increases operational costs for businesses. Additionally, import tariffs and logistical expenses increase prices for goods and services. As the country continues to pursue economic growth, addressing these challenges will be crucial to maintaining stability while ensuring affordability for its citizens.

Foreign Investment and Business Environment

Uruguay has developed a reputation as a reliable destination for foreign direct investment (FDI), thanks to its legal transparency, strong institutions, and investor-friendly policies. The country offers a stable macroeconomic environment, clear regulatory frameworks, and incentives for technology, finance, and manufacturing industries.

Montevideo, the capital and financial hub, has become a center for regional business operations. It hosts multinational corporations that leverage Uruguay’s tax benefits and strategic location. Free trade zones (FTZs) provide attractive benefits, including tax exemptions and streamlined business processes, making Uruguay an appealing destination for international investors.

Another factor boosting investor confidence is Uruguay’s advanced digital infrastructure. The country ranks among the highest in Latin America for internet penetration and digital services, which has fostered the growth of e-commerce and tech-based enterprises. The government’s proactive approach to digital transformation further reinforces Uruguayan economic growth by modernizing key sectors of the economy.

Challenges and Future Prospects

Uruguay has achieved sustained economic growth based on stability policies and productive diversification. However, it faces challenges such as reducing the cost of living, enhancing the competitiveness of its productive sectors, and maintaining its attractiveness to foreign investment. The government continues to explore strategies for economic diversification, particularly in technology and high-value-added industries, to ensure long-term prosperity.

The country aims to strengthen its sustainable development model, consolidate its position as an exporter of high-quality food, and continue innovating in the renewable energy sector. Efforts to improve infrastructure, such as expanding transportation networks and modernizing ports, will be crucial in maintaining economic momentum. Additionally, Uruguay is exploring new trade agreements to expand its global reach and reduce dependency on traditional markets.

As Uruguay navigates these economic opportunities and challenges, the country remains a model of governance and economic resilience in Latin America. With an expanding economy and a solid institutional framework, Uruguayan economic growth will depend on innovation, investment, and forward-thinking policies that sustain its position as a regional leader.

The food industry in Central America remains active with the development of large investments that promise to generate significant changes in a sector that is adopting technology and seeking to trigger more efficiencies, key strategies to gain more space in the shopping carts of increasingly demanding consumers and become the kings of Central American plates.

The protagonists in the food industry in Central America moved their pieces in 2024 and are preparing for a market reconfiguration in 2025. Expansions, new investments, and incursions have characterized the development of this dynamic sector.

These strategies are reflected in the investment plans of large companies in the sector, such as Bimbo, Nestlé, Corporación Multi Inversiones, Cargill, Vitali Alimentos, and Castillo Hermanos, which take advantage of the potential of serving an integrated regional market with a diverse commercial proposal that seeks to conquer more tables and plates.

The investments underway range from increasing the geographical footprint and developing new products to installing new production plants, as in the case of the Mexican company Bimbo (the world’s largest bakery group), which is investing US$200 million in the construction of a new factory in El Salvador (which is expected to be operational in the second half of 2025) and with which it plans to meet the growing demand for its products in the food industry in Central America.

However, investments are not limited to an increase in capacity per se. They also include improvements in efficiencies and technology. The Swiss multinational Nestlé inaugurated its Data Analysis and Artificial Intelligence Center (CADIA) in February, a technological complex in zone 12 of Guatemala City, where the company invested US$5 million and which promises to create synergies between data analysis and commercial management through the use of AI and machine learning to optimize sales, marketing, and service processes.

“CADIA represents a qualitative leap in how we utilize technology to enhance our impact on the industry and people’s lives,” said Patricio Astolfi, General Director of Nestlé Guatemala.

Meanwhile, at the start of the year, the Guatemalan company Castillo Hermanos inaugurated the expansion of its La Italiana ice cream production plant in Panama, in the town of Pacora, as part of reinforcing its broad product portfolio in the indulgence segment and its growth strategy in that market.

NEW TRENDS

Juan Pablo Mancilla, executive director of the Food and Beverage Guild (GREMAB) attached to the Chamber of Industry of Guatemala, explains that the regional panorama is marked by a growth pattern driven by a market evolution enhanced by the adoption of new consumer trends.

“Regional consumption shows a trend of openness to a diversity of lifestyles, driven by various factors such as age, habits, socioeconomic levels, and culture, among others,” said Mancilla, who believes this has generated a demand for varied products aligned with emerging consumer preferences.

In recent years, companies in the food industry in Central America have taken a step forward in developing innovative products that cater to a new consumer eager for modern and practical solutions, benefiting partly from the opening of supply in other latitudes.

This is evident in developing proposals, such as the Guatemalan company Vitali Alimentos, which launched the SOMOS brand last year, aiming to consolidate itself as a leading player in the food service market.

In November 2024, Andrés Barrios, the company’s business manager, emphasized that the company’s objective with this development is not only to offer protein-based products but also to provide all the foods that comprise a dish, from side dishes to sauces.

Mancilla of GREMAB emphasizes that, in general, the food industry in Central America exhibits greater sophistication. The regional and extra-regional supply has evolved with greater diversification and innovation, adapting products to meet the different needs of the market. This has enabled it to enhance the consumer experience, facilitating its integration into various lifestyles.

MORE CONSCIOUS CONSUMERS

Rafael Murillo, senior manager of Strategy and Transactions at EY Central America, Panama, and the Dominican Republic, explains that one of the most marked trends in the region is the intention to adopt healthier lifestyles. This leads to a greater demand for fresh, high-nutrient-value, and even organic foods, which are gaining prominence in the portfolios of companies in the sector.

The specialist notes that, in parallel, consumers are concerned about making “more conscious” price selections and managing their household budgets, a trend that balances business bets.

“In summary, it is the search for a good quality-price ratio. Although each market in Central America and outside the region has its particularities, these trends are highly generalized globally,” says the EY specialist.

Xavier Vargas, CEO of Cargill Food Latin America, offers insights into this search for efficiency. They have recently expressed that they are advancing in consolidating their units, a strategy to increase their presence and business with the final consumer across a large region, from Mexico to Brazil. Central America stands out as a region that provides high returns.

The company’s objective is to consolidate its Central American operation (where its businesses in Honduras, Nicaragua, and Costa Rica stand out) but with a commitment to the development of the Guatemalan and El Salvadoran markets, where they are already considering the development of new investments, options that include the possibility of acquiring companies in the food industry in Central America or building their units from scratch.

IN SEARCH OF MORE EFFICIENCIES

Murillo believes that the business environment is key. Among the primary challenges facing the food industry in Central America are cost volatility and deficiencies in regional infrastructure, which sometimes limit performance in production processes and the supply chain.

However, he values that this is compensated— in part —by a vision of scale, something that, while generating opportunities, also represents challenges. “The size of individual markets in Central American countries introduces an additional complexity, as it requires addressing multiple factors for each of them while simultaneously achieving a reasonable scale at the regional level,” says the analyst.

He adds that other emerging factors also pose challenges, highlighting global geopolitical dynamics that introduce uncertainty.

At the start of the year, the Trump administration’s tariff policy generated concerns about its impact on productive activities, which could affect food manufacturing.

However, Murillo maintains that, in the sum of factors, the region continues to be full of opportunities, as there are countries and regions with untapped potential that can benefit from the arrival of foreign investment and the expansion in dynamic sectors such as technology and financial services.

“One of the main opportunities in our region is to exploit adaptive innovation, with products that offer alternatives to traditional consumption such as fortified or nutritionally beneficial products, the implementation of sustainable or more economical packaging, ‘sachetization’—with economical versions of premium products or smaller presentations—and the use of waste or automation,” he reiterates.

MULTILATINAS IN EXPANSION

The incursion of the Guatemalan company CMI into the US market in 2024 was one of Central America’s most ambitious business moves, but it is not entirely a surprise.

The company announced in November an agreement to acquire a majority stake in Del Real Foods, which gives it control of a leading Hispanic food brand. In addition, in February of this year, it celebrated the opening of the 122nd restaurant of its Pollo Campero chain in New York, USA.

Murillo, of EY, maintains that both CMI’s move in the United States and Bimbo’s case in El Salvador are clear examples of the dynamism characteristic of the food industry in Central America in recent years, as well as how multilatina companies continue to expand rapidly.

Argentina’s improving economic data continues to surprise, with its growth forecast revised upward to 5.7% for 2025, while the global trend is moving in the opposite direction. The Argentine economic stabilization program has focused on a tough fiscal adjustment, which penalizes specific sectors such as retirees and industry, and a currency control policy that generates distrust among foreign investors. Several analysts question whether these positive figures can be sustained in the long run.

Argentina appears determined to leave its recession behind, as confirmed by the latest economic outlook report from the Organization for Economic Cooperation and Development (OECD), which raised its growth forecast to 5.7%. Meanwhile, the global trend saw a downward revision due to geopolitical uncertainty and trade tensions.

The shift in Argentina’s forecast is significant: for 2024, the figure was -1.8 %, and if the 5.7% growth for 2025 is confirmed, it would be the second strongest among G20 nations, behind only India, which expects a 6.4% expansion.

Additionally, the country has been experiencing a reduction in inflation. In 2024, inflation reached 118% annually, a decrease of 44% from the previous year. For 2025, OECD projections suggest inflation could settle around 28%. This is a direct result of the Argentine economic stabilization program, which has prioritized strict fiscal policies to curb inflationary pressures.

A Rapid Stabilization Plan

President Javier Milei appears to be achieving the monumental goal of reducing Argentina’s inflation through a strict fiscal adjustment combined with a quasi-fixed exchange rate policy, as explained by economist Gerardo Della Paolera, Executive Director of the Bunge and Born Foundation.

“President Milei has done a very rapid adjustment—one of the fastest known stabilization plans—and it has been successful. Consumption levels have recovered, and inflation has decreased by 25%. We have a monthly inflation rate of around 2%,” Della Paolera explains, though he notes that many questions remain regarding the Central Bank and monetary reform.

Progress has been made, but reducing inflation alone is insufficient for an effective economic recovery plan. Milei himself warned of this in his inaugural speech as president:

“There is no money. We know that in the short term, the situation will worsen, but later, we will see the fruits of our efforts.”

From the beginning of his administration, he made it clear that he would implement budget cuts—symbolized by his chainsaw in hand.

The fiscal adjustment plan has included devaluing the Argentine peso, budget cuts in nearly all sectors, layoffs of public employees, suspension of public works projects, and reductions in subsidies. These policies are central to the Argentine economic stabilization program, which aims to achieve long-term financial discipline. However, this raises the question of whether the program is truly effective.

Economist Della Paolera argues that it produces results, though with some caveats. “Moving toward fiscal balance has worked. What remains to be seen is how the state reform will be implemented, as public investment needs to recover,” he said, emphasizing Argentina’s infrastructure needs. “It is more expensive to transport exportable products from northern Argentina to other Argentine ports than to the Liverpool market. The country severely lacks infrastructure, which is also essential for economic growth,” he added.

“Not All Sectors Suffer Equally”

Della Paolera also highlighted the need for pension and social security reform, as Argentina’s retirees have borne the brunt of Milei’s fiscal adjustment. According to data from the Argentine Institute of Fiscal Analysis, pension spending accounted for 19% of total budget cuts. This has led retirees to protest every Wednesday since mid-2024, as they have lost purchasing power and have faced changes to the rules governing access to free medication.

According to Della Paolera, several sectors have been affected, but not all to the same extent. “President Milei has been very skillful in increasing what is known as the universal child allowance, which benefits the most disadvantaged sectors. He raised it by 300%, alleviating the situation for those in greatest need. However, the industrial and private sectors operate on very thin profit margins and are under immense pressure. Because with the current exchange rate regime, where the dollar is appreciating much slower than inflation in pesos, businesses are somewhat strangled by this real exchange rate lag,” he analyzed.

For Della Paolera, it is crucial to stimulate investment, which has stagnated due to investor uncertainty regarding the future of exchange rate regulations, which remain unclear. This is one of the significant unresolved aspects of the Argentine economic stabilization program, as investors require greater clarity on currency policies before committing to large-scale projects.

Currency Controls: Key to Reducing Inflation, but Not to Economic Growth

In Argentina, the term “cepo cambiario” colloquially refers to restrictions on the purchase of U.S. dollars. Milei’s administration implemented these restrictions. For analysts like Della Paolera, this temporary fix helps control inflation but does not necessarily drive growth.

With these restrictions, the Central Bank has been unable to rebuild its reserves. This exchange rate policy, which adjusts at a rate below inflation, ensures a steady decline in inflation every month. However, the key question is whether this is sustainable. “Generally, you remove exchange controls in favorable economic conditions when there is confidence. If we enter turbulent times, lifting the restrictions will become increasingly difficult,” Della Paolera said. He noted that once these controls are lifted, their impact on different sectors and the sustainability of economic growth will become evident.

Economist Carlos Quenan, Vice President of the Institute of the Americas in France, shares this view. “In principle, a libertarian government like Milei’s should not rely on such controls, as they are a form of government intervention,” Quenan noted, referring to tensions between exporters and importers.

“Exporters, despite having a special regime that allows them to settle part of their sales at a parallel exchange rate, would prefer full exchange rate liberalization. On the other hand, importers face tensions because the government is also pursuing trade liberalization alongside an overvalued exchange rate that favors imports. This creates the worst possible scenario: trade liberalization coupled with an overvalued peso that benefits imports but puts domestic producers at a disadvantage,” he added.

Both economists acknowledge the progress of Milei’s fiscal adjustment plan, but they are unsure whether such stringent austerity measures are sustainable in the long run. While the Argentine economic stabilization program has successfully lowered inflation, the long-term outlook depends on balancing fiscal responsibility and investment-friendly policies.

How Long Will Social Tolerance Last?

Quenan acknowledges that some sectors of the economy have been severely impacted but also highlights the remarkable level of social tolerance for Milei’s Argentine economic stabilization program. “The government firmly believes that controlling inflation is a highly valued goal. And while social costs vary across different sectors, inflation control will likely secure strong electoral results in the midterm elections this October,” he explained.

There is a sense of anticipation in Argentina. Economic growth is expected this year, and inflation will likely continue declining. However, as analysts point out, many questions remain unanswered. Issues such as the independence of the Central Bank, the exchange rate system, investment regulations across various sectors, the savings system, and the trust required to attract foreign investment all require further clarification. Most importantly, the future of the Argentine economic stabilization program remains uncertain, as many argue it cannot last indefinitely.

The Argentine president appears to be succeeding in the first phase of his stabilization plan. Still, the true test lies ahead—developing a long-term economic strategy that ensures sustained improvement for all sectors of the country.

The Regional Government of Valparaíso and InvestChile, the Foreign Investment Promotion Agency, have taken a significant step toward attracting foreign investment to Valparaíso by signing a Collaboration Agreement. This milestone agreement aims to strengthen the region’s investment appeal, foster economic growth, and establish Valparaíso as a hub for innovation, logistics, and sustainable development.

Strengthening Investment Opportunities in Valparaíso

This agreement will consolidate joint efforts to promote new investment opportunities, create favorable conditions for business development, and enhance the region’s long-term economic sustainability. The Regional Governor of Valparaíso, Rodrigo Mundaca, emphasized the importance of this collaboration, noting that the government has worked closely with InvestChile for the past year to ensure that foreign investment aligns with the region’s most pressing needs.

“Attracting foreign investment to Valparaíso plays a vital role in the region’s economic strategy. It is highly relevant that our investment attraction efforts focus on key areas such as logistics, renewable energy, and innovation,” Mundaca stated.

Why Valparaíso? A Prime Destination for Investors

Valparaíso boasts characteristics that make it an attractive destination for foreign investors. The region has a diversified economic structure encompassing mining, agriculture, tourism, port operations, culture, and higher education. By signing this agreement, the Regional Government and InvestChile aim to maximize investment potential, strengthen territorial capabilities, and enhance the region’s economic landscape.

The ultimate objective is contributing to residents’ well-being while positioning the region as a science, technology, logistics, and creativity leader.

Addressing Regional Challenges with Strategic Investments

Governor Mundaca highlighted the region’s economic significance: “Today, the Valparaíso Region is the most important in the country, as it hosts the nation’s key ports.” The region faces challenges related to electromobility, a critical issue on both a regional and national scale.

“Ports and electromobility are crucial challenges, as is investing in a growth economy centered on science, technology, knowledge, and innovation. These factors define how we add value to the raw materials extracted here and contribute to a sustainable, environmentally friendly, and socially responsible economic development model,” Mundaca added.

Building a Dynamic and Sustainable Economic Ecosystem

The agreement will also enhance regional governance, facilitating the transition to an economic landscape that fosters a more dynamic, innovative, and inclusive economy. Attracting foreign investment to Valparaíso is about bringing in capital and building partnerships that generate long-term benefits for the region’s businesses, workforce, and communities.

InvestChile’s Commitment to Regional Development

Karla Flores, National Director of InvestChile, expressed her gratitude to the Regional Government and Governor Mundaca, acknowledging the trust in this partnership. She emphasized, “This agreement enables InvestChile to provide all its capabilities to the Regional Government, actively seeking and supporting international investment projects that align with the region’s strategic priorities.”

InvestChile is key in identifying investment opportunities and connecting international companies with regional development strategies. “At the national level, our Ministerial Committee sets priorities regarding which projects to pursue and the types of companies needed to support sectoral development strategies. However, we recognize that each region has unique needs. Our goal is to identify the investments the Regional Government prioritizes and support the region in building the necessary capacities to attract and sustain these investments,” Flores explained.

A Coordinated Approach to Investment Success

InvestChile and the Regional Government are committed to a collaborative approach in attracting foreign investment to Valparaíso. This partnership requires coordinated efforts from regional authorities, local stakeholders, and international investors to ensure a seamless investment process.

“This is a relay race: we can identify potential investors, but it requires a joint effort to facilitate their entry, support their business case development, and ultimately convince them that Valparaíso is the best place to establish operations. Beyond that, we must assist them in successfully implementing their projects to create real economic impact,” Flores added.

Key Objectives of the Collaboration Agreement

The main objectives of this agreement include:

• Facilitating Foreign Investment: Promoting strategic sectors, including infrastructure, logistics, creative industries, and renewable energy.
• Enhancing Regional Development Strategies: Strengthening the region’s productive potential and generating employment opportunities.
• Encouraging Technical Cooperation: Supporting knowledge transfer, research, and development initiatives.
• Providing Technical Assistance: Sharing key economic and market insights to support investment decisions.
• Creating Synergies: Building strong connections between local and international stakeholders to maximize the benefits of foreign public-private investment.
• Promoting Sustainability: Ensuring investment projects align with environmentally friendly and socially responsible business practices.

A Vision for the Future

This partnership marks a transformative step in attracting foreign investment to Valparaíso. By leveraging the strengths of both the Regional Government and InvestChile, the agreement paves the way for a more resilient and dynamic regional economy.

With a strong commitment to sustainability, innovation, and economic inclusivity, Valparaíso is positioning itself as a premier destination for international investors. As the region embarks on this new phase of development, strategic investment efforts will play a pivotal role in shaping its future prosperity and global competitiveness.