Our first day of visits in Bueno Aires was complementary to the first day of visits in Chile. We were introduced to a intercultural trainer who gave us an overview of things we learned in our global management class and how they applied to Argentina. It was a good review, and it segued nicely into the discussion of Argentine economics and business.
The second discussion was led by a lawyer from Zang, Bergel, and Vines. He told us the story of the financial crash of Argentina in 2001 where they defaulted on foreign loans, banks froze assets for 1-2 years, and their currency (and everyone's investments) fell to 1/4 their value. Since most Argentines were not debt burdened, nearly everyone in the country lost the value of their savings.
Now Argentina is in a political deadlock over how to boost their economy. Currently Argentina (and much of the developed Latin America) is growing at a rate of 9% a year. In order to free up more capital for further growth, Argentina needs to pay off some of its outstanding debt (that they were unable to default on). If they do so, foreign capital may flow freer to Argentina and continue to energize the growth.
However, to do so they need to pull cash from their reserves. There are two worries: one, the central bank would be entangled with (instead of autonomous from) the government. Secondly, by entagling these two, precedence may be set for the government to draw from the reserves, and their outstanding creditors may be able to gain access to those reserves. It's a tricky path they are walking, and something worth keeping tabs on.
Our final destination was Globant, an IT outsourcing firm in Argentina. Globant is based in Argentina, but has over 2000 employees world-wide. They are growing at a rate of 100 employees per month. Their value proposition is simple: they provide end-to-end design, development, and integration for companies wishing to cut costs or companies with chaotic growth that need help ASAP. While doing IT outsourcing is cheaper in India and China, Global has built in management of the entire pipeline. This means that the company could pay 20% more for Globant, but know that they will not be bogged down in managing a project on the other side of the world.
Globant is also committed to providing end-to-end solutions instead of boutique one-offs. From art design, UI design, backend development, network and network security, and data warehousing, Globant has rebuilt the value-chain for agile development. They claim that end users have specific desires in user interfaces and performance, and that Globant can make this happen better than any other IT outsourcing firm.