A reinvigorated Argentina has returned to the international scene following the December 2015 election of President Mauricio Macri. Bringing to an end more than 12 years of ‘Kirchnerism’. Macri’s center-right government inherited a country experiencing great political and socio-economic difficulties including an inflation rate of over 30%, excessive public expenditure (55% over PIB), extremely low foreign reserves and a sovereign default scenario after a long-standing dispute with US hedge fund investors.
In its first months, the new government has been determined to get the country back on track and open to the world. One of its first measures was to remove currency controls and barriers to international trade. President Macri’s agreement with sovereign debt holdouts also won the support of Argentina’s Congress. After more than a decade in exile from international capital markets, Argentina recently completed its first bond offering, selling $16.5bn in debt. While $9.4bn was paid to 220 holdout bondholders, the remaining earnings will be used for much-needed public infrastructure projects.
The process of reorganising the economy will not be easy and remains in its early stages. Certainly the new administration faces a tough road ahead: not only are there domestic hurdles but also external factors such as low commodity prices and the economic and political difficulties of neighbouring Brazil (the country’s primary trading partner). In order to tackle public waste, the government has controversially reduced the size of the state by cutting thousands of civil servants and removing electricity and transport subsidies. The country still has to overcome 30% inflation, predicted negative growth, considerable poverty, and an unemployment rate of over 12%.
Argentina is also facing a persistent energy crisis that requires a vast quantity of investment to deal with ever-increasing demand. The government has passed an ambitious renewables plan that seeks to have 8% of national energy consumption coming from renewable sources by December 2017; the first bid process for renewable energy generation projects was launched recently
Challenges notwithstanding, the legal market is very optimistic with the new economic paradigm set by Macri’s administration. It is awaiting an up-tick in transactional, capital markets, and banking and finance work, primarily focused in the infrastructure, energy and natural resources sectors.
The highly competitive market is dominated by a series of full-service firms including Marval, O’Farrell & Mairal, Bruchou, Fernández Madero & Lombardi, Pérez Alati, Grondona, Benites, Arntsen & Martínez De Hoz, Jr, Allende & Brea and Estudio Beccar Varela closely followed by other impressive medium size firms including Mitrani, Caballero, Ojam & Ruiz Moreno , M & M Bomchil and Estudio O’Farrell.
Despite –or perhaps because of– the relative paucity of work during recent years, the legal services market has always had space for specialist firms in different sectors. On the banking and finance side Salaverri, Dellatorre, Burgio & Wetzler Malbrán and Tavarone, Rovelli, Salim & Miani – Abogados (both Bruchou, Fernández Madero & Lombardi’s spin offs) have continued to earn a spot in the market. Traditionally dominated by boutiques firms, the IP, labour and tax sectors continue to feature strong specialist firms including G. Breuer, Funes De Rioja & Asociados and Teijeiro & Ballone, Abogados, respectively. In the energy and natural resources arena, Zaballa – Carchio Abogados (on the mining side), and Alliani & Bruzzon (in oil and gas) are some of the leading names.
Apart from Baker & McKenzie, which is a long-standing presence in the country, only two other international firms have offices in Argentina at present, namely CGSH International Legal Services, LLP-Sucursal Argentina (affiliate of Cleary Gottlieb Steen & Hamilton LLP) and Curtis – Fernandez Quiroga, Ayarragaray & Ocampo (connected to Curtis, Mallet-Prevost, Colt & Mosle LLP). While as yet there is no official confirmation, sources suggest that both global player Dentons and Iberian giant Garrigues are looking at Argentina as their next potential destination in the region.