Genco Pharmaceuticals in Argentina
Achieving Market Dominance throughout South America
ARGENTINEAN BUSINESS CLIMATE
To acquaint the directors with the necessary factors of consideration, here is a very brief summary of the recent Argentinean financial crisis, and an analysis of the current business climate.
From a 2002 article by Martin Hunter:
Argentina is in the midst of a severe socio-economic crisis. By all accounts, the country is essentially bankrupt: burdened with a 150 billion dollar foreign debt, which saps 30% of the GDP in interest payments alone, the unemployment rate has soared over 20% and the ecomomy's growth rate has plummeted from 8% to less than 1% in the last five years. Austerity measures - a prerequisite for IMF and World Bank foreign debt repayment loans - have been felt heavily by the population, which has seen its purchasing power halved since 1997. Faced with an ever-shrinking tax-base and an economy grinding to a halt, recent governments have relied on relentless salary cuts and appropriation of social security funds in order to meet their budgetary needs.
Currently, Argentina is recovering quite well from their crisis. Politically they are much more stable, and actually have just held history-making elections. The U.S. State Department summarizes well the rebound Argentina has experienced:
Argentina's economy has sustained a robust recovery following the severe 2001/2002 economic crisis, with 4 consecutive years of over 8% growth in real gross domestic product (GDP). Argentine GDP reached U.S. $213 billion in 2006, approximately U.S. $5,460 per capita, with real investment up 18.7%. Economic expansion is creating jobs, with unemployment down from 20.4% in the first quarter of 2003 to 9.8% in the first quarter of 2007. ...