McNutt Predicts Argentine Economic Comeback
He cited the growth of credit card penetration in Argentina as one example. American Express has 400,000 members in the country. Billboards along the highway from the airport feature credit card companies.
Per capita income in Buenos Aires, the capital, is $18,000 a year, the highest in Latin America. Internet use has increased 25 percent in the past year, with 74 percent of users accessing the Web from home, the rest from work.
Commercial officials at the U.S. embassy told McNutt that Argentina is coming out of last year's recession, and they projected economic growth of 2 percent this year.
The best time to start a relationship with potential partners, vendors and service suppliers, he said they told him, "is when they are coming out of a recession. The Argentines appreciate loyalty. The time is right to open relationships."
McNutt also said officials stressed the move among Latin American countries toward pegging their currencies to the value of the dollar, something Argentina has done since 1991.
But few economists agree with McNutt on this point. Argentina's new economics minister, Domingo Cavallo, favors switching from the dollar to a basket of currencies, including the euro.
The central bank and the currency board oppose the proposal, and media reports say the dispute is not helping a still shaky Argentine economy.
The Economist reported last month that tax revenue in March dropped 13 percent from March 2000 and that Cavallo is cutting public spending by another $500 million.
Cavallo, who has been economics minister before, was drafted several weeks ago in what The Economist called "a desperate effort to stave off a collapse of economic confidence."