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OO RUEHWEB

DE RUEHBU #2120/01 2611608
ZNR UUUUU ZZH
O 181608Z SEP 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5935
INFO RHMFIUU/HQ USSOUTHCOM MIAMI FL IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCPDOC/USDOC WASHINGTON DC IMMEDIATE

UNCLAS BUENOS AIRES 002120 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR AFAIBISHENKO,AJEWEL,WBLOCK 
E FOR THOMAS PIERCE, WHA FOR WHA/BSC AND WHA/EPSC 
EX-IM BANK FOR MICHELE WILKINS 
OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI 
PASS USTR FOR SUE CRONIN AND MARY SULLIVAN 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
 
E.O. 12958: N/A 
TAGS: ECON EINV EFIN ENRG PREL AR
SUBJECT: KIRCHNER PROMOTES INVESTMENT IN ARGENTINA DURING 
VISIT TO NEW YORK FOR UNGA, BUT FACES SKEPTICAL PRIVATE 
SECTOR 
 
Summary 
------- 
¶1. (SBU) President Kirchner travels to New York for the UNGA 
with the stated objective of enticing U.S. companies to 
invest in Argentina, even as local press plays up the chilly 
bilateral relationship.  Kirchner has a limited official 
schedule -) including meetings with UNSG Kofi Annan and 
Italian Prime Minister Prodi -- and is giving priority to 
high-profile business events on his schedule, including 
ringing the opening bell at the NYSE and attending a Council 
of Americas dinner in his honor.  Wall Street bond traders 
and bankers remain skeptical of the medium term 
sustainability of Argentina's heterodox economic policy mix 
and will give him a cautious greeting.  However, despite 
price controls, distortive export tariffs, and increasing 
government intervention, many U.S. manufacturing and service 
companies operating in Argentina are profitable and growing, 
so Kirchner can expect a reasonable amount of private sector 
attention.  End Summary. 
 
¶2. (SBU) Local media and Post's business contacts report that 
Argentine President Kirchner's trip to New York City to 
attend the 61st UN General Assembly meeting will focus on 
strengthening ties with the U.S. private sector and 
encouraging additional U.S. foreign direct investment. 
Although Kirchner is scheduled to speak on September 20 to 
the UNGA, and will also meet with UN Secretary General Kofi 
Annan and Italy's Prime Minister Romano Prodi, his focus is 
reportedly to highlight the role of his administration's 
fiscal and monetary discipline in building trust in the GoA's 
management of the economy. 
 
¶3. (SBU) The highlight of the visit will be Kirchner's 
breakfast meeting at the New York Stock Exchange on September 
20, after which he and his wife, Senator Cristina Kirchner, 
will ring the opening bell.  Government officials are selling 
this to Argentine media as a special honor, reserved only for 
those who command the respect and confidence of Wall Street. 
Kirchner will use this event and the September 21 Council of 
Americas' (CoA) dinner in his honor to send a strong signal 
that investors are welcome.  Planning Minister Julio De Vido 
will make a similar pitch during a BCIU lunch on September 
¶18. 
 
¶4. (SBU) President Kirchner's wife, Senator Cristina 
Kirchner, plans separately to participate in several academic 
events at the Columbia University and the New School, and 
will also meet with heads of leading Jewish civic 
organizations in New York.  She will reportedly work to 
dispel the notion that there is growing anti-Semitism in 
Argentina, and reportedly will also work to downplay any 
perceived threat to Argentine bilateral relations with the 
U.S. resulting from the Kirchner administration's 
strengthening ties to Venezuelan President Chavez. 
 
 
¶5. (SBU) Even as the local press has emphasized that Kirchner 
heads to the U.S. at a time when the bilateral relationship 
has cooled -- following U.S. votes against and abstentions on 
IDB loans to Argentina and the U.S. decision to review 
Argentina's GSP benefits ) the media has downplayed the 
limited official contact scheduled between Kirchner and U.S. 
officials. 
 
¶6. (SBU) In addition to Kirchner's government delegation, 
which  includes selected Ministers, Mayors, and Provincial 
Governors,  he is accompanied by a group of prominent local 
business leaders, including Ernesto Gutierrez, head of 
airport management company Aeropuertos Argentinas 2000, who 
will have a separate agenda focused on strengthening 
commercial ties with the U.S. and other countries in the 
region. 
 
Comment 
------- 
 
 
 
¶7. (SBU) Private international financial institutions, 
especially on Wall Street, have been vocal in their criticism 
of Kirchner's heterodox economic policies ) price controls, 
export tariffs, and increasing government intervention -- in 
the run up to his NYC visit.  The IMF has also warned of the 
GoA's inflationary monetary policy and price controls' 
adverse impact on investment in key sectors (i.e., energy). 
 
¶8. (SBU) Despite this skepticism, the Argentine economy 
continues to grow and large U.S. investors are profitable and 
selectively increasing investment.  Wal-Mart is enjoying 
growing sales and expanding aggressively, John Deere reports 
that 2005 was its best year in Argentina since 1954, and both 
Cargill and GM have invested hundreds of million in new 
production capacity since 2001/2002.  These and other U.S. 
companies continue to see Argentina as a reasonably important 
market with long term potential for growth.  So, while 
Kirchner may not receive the warmest welcome from Wall 
Street, he will likely receive a respectable reception from 
U.S. companies participating in the NYSE and CoA events.  End 
Comment. 
MATERA