A lack of sector specific policies is a cause for concern for many family businesses in Argentina, but could the appointment of a new president spell a change in their fortunes? Michael Finnigan takes a look
Family businesses play an important role in Argentina – the third largest economy in Latin America, where at least 80% of the country's 1.2 million businesses are privately owned. Yet a recent collapse in commodity prices is wreaking havoc on the region's emerging economies. One saving grace, praised by international investors, is the appointment of new president Mauricio Macri, who is a member of family-run conglomerate Grupo Macri. It is hoped that the 57-year-old's innate understanding of the issues faced by families will result in better conditions for businesses across the board.
Ernesto Niethardt, a consultant for Argentine family business consultancy Niethardt & Associates, shares the enthusiasm. When asked what Argentine family businesses might want from the new government, Niethardt had three suggestions: “Firstly, I think they would like to have public recognition for their role in the Argentine economy. Secondly, I think they'd like to see some changes made around taxation. And finally, easier access to loans.” The former professor also says that the education of the next generation is a significant problem that needs to be tackled.
While the majority of Argentine family businesses are small to medium-sized, there are a number of large players that are recognised around the globe. Among the best known are Techint Group, a leading supplier of tubes and related services for the world's energy industry, owned by the Rocca family, and Aceitera General Deheza, one of the country's largest natural food producers, which is owned by the Urquía family.
Even these international players are not immune to the flailing Argentine economy, which has suffered from high levels of inflation for approximately six years. Niethardt says that president Macri's challenge will be to tackle inflation of around 30%, a fiscal deficit of almost 8%, and a decade-long legal dispute with US creditors who are blocking Argentina's access to international capital markets.
Alternatively, view the Argentine Family Businesses infographic here