Argentina’s President Javier Milei waves during the commemoration of the 214th anniversary of the May Revolution, which led to independence from Spain, at Plaza San Martin in Cordoba, Argentina, May 25, 2024.
Diego Lima | Afp | Getty Images
Argentine President Javier Milei met with executives from some of the world’s largest technology companies this week and embarked on a tour of Silicon Valley that analysts say is likely aimed at boosting his international profile and showcasing the South American country.
On his seventh trip abroad since taking office late last year, Argentinian Milei traveled to San Francisco late Monday and has since met with OpenAI CEO Sam Altman, Google’s Sundar Pichai and Apple CEO Tim Cook.
A meeting is planned with the right-wing leader and self-proclaimed “anarcho-capitalist.” Meta CEO Mark Zuckerberg before his departure from the USA on Friday. On a separate trip to the US last month, Milei met with tech billionaire Elon Musk Tesla Electric car factory in Austin, Texas.
Milei has photos of his encounters on the social media platform this week
Analysts say Milei’s charm offensive is likely intended to position Argentina as an attractive location for investment due to the South American country’s growing tech sector and ecosystem, as well as promises of business-friendly reforms.
“Argentina also hosts significant critical mineral resources, with the second largest lithium reserves in the world as well as large (and untapped) copper deposits,” Nicolas Saldias, senior analyst for Latin America at the Economist Intelligence Unit (EIU), told CNBC via email.
“Extracting these minerals from the ground is critical for both the green economy and technology companies that have reliable access to critical inputs for their AI infrastructure. The growth of AI data centers will also require significant energy and water resources, which Argentina has in abundance.”
The EIU’s Saldias said it was unlikely that U.S. tech companies would invest in Argentina unless the ruling government could pass its key “omnibus” reform law – which has since been significantly weakened – and its tax reform law through Congress.
Reform agenda in focus
“The trip is valuable in itself because you are essentially trying to put Argentina at the center of a global conversation about materials development and investments related to technology,” Mariano Machado, chief analyst for the Americas at Verisk Maplecroft, told CNBC by phone.
“We’re not just talking about sourcing lithium or copper, we’re also talking about how these companies make decisions about where they locate their network centers, their offices and things like that,” Machado said Thursday.
“However, it feels like this is a first step in this conversation that would not necessarily result in an immediate response from companies and investors. Rather, it would be a ‘properly recorded’ response, such as ‘We see it’s you.’ “Do your homework, but we need to see more to make a substantive decision,” he added.
Aerial view showing members of social movements being blocked on their way to the Olivos presidential residence to protest against the reforms and cuts in the most vulnerable sectors proposed by President Javier Milei, in Olivos, Buenos Aires province, on May 7, 2024 .
Luis Robayo | Afp | Getty Images
Milei has struggled to implement his so-called “shock therapy” reform agenda, despite previously saying there was no alternative for the country.
In early May, Milei’s government faced its second general strike in less than six months, with workers across the country angered by proposed austerity measures and a deep economic crisis.
Milei accepted the resignation of his Cabinet chief Nicolas Posse on Monday at a time when his government is struggling to pass proposed reforms.
“We expect both bills to pass in the Senate, albeit in a weaker form. Even a watered-down version would boost investor confidence in Argentina and could lead major investors to open their wallets,” said EIU’s Saldias.
“If the bill is rejected, investments are unlikely to materialize and economic recovery would be slow and the Milei government would likely tread water as its popularity would pose a risk,” he added.
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2024-05-30 12:55:36
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