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DE RUEHBU #1947/01 2711844
ZNR UUUUU ZZH
R 281844Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9381
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6608
RUEHMN/AMEMBASSY MONTEVIDEO 6805
RUEHSG/AMEMBASSY SANTIAGO 0815
RUEHBR/AMEMBASSY BRASILIA 6478
RUEHLP/AMEMBASSY LA PAZ SEP CARACAS 1521
RUEHFR/AMEMBASSY PARIS 1334

UNCLAS BUENOS AIRES 001947 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EMBASSY PARIS PASS USOECD PAUL REID 

PASS NSC FOR MICHAEL SMART 

PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 

PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN 

TREASURY FOR MATT MALLOY 

USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 

US SOUTHCOM FOR POLAD 

 

E.O. 12958: N/A 

TAGS: EINV ECON PGOV PREL AR

SUBJECT: ARGENTINA'S INVESTMENT PITCH MARRED BY POOR GRADES ON 

CORRUPTION, DOING BUSINESS 

 

REF: Buenos Aires 1938 

 

¶1. (U) Summary: During President and Mrs. Kirchner's New York 

business-focused visit (reftel), two highly respected and widely 

read international business reports released their annual surveys - 

and Argentina came up wanting.  Transparency International's 

""Corruption Perceptions Index 2007"" (CPI) and the World Bank's 

""Doing Business 2008"" both released their findings on September 25, 

were widely publicized in local media, and gave Argentina poor 

grades in the areas of corruption and ease of doing business.  The 

reports largely tracked with previous years' ratings.  End Summary. 

 

 

¶2. (U) Transparency International's CPI, the preeminent comparative 

international measure of corruption, ranked Argentina 105 out of 

180, ranking it alongside Mongolia, Albania, Bolivia and Burkina 

Faso.  The 2007 CPI survey ranked 180 countries and territories by 

their perceived levels of corruption, as determined by expert 

assessments, opinion surveys and business people, and ranges between 

10 (highly clean) and 0 (highly corrupt).  Denmark, Finland and New 

Zealand, all at 9.4, led the list.  The United States ranked 20th, 

at 7.2.  Among Latin American nations, Chile (#22, 7.0) and Uruguay 

(#25, 6.7) again led the region in 2007.  Argentina's index was 2.9. 

 Venezuela (#162, 2.0) and Haiti (177, 1.6) bottomed out the list 

for the Western Hemisphere. 

 

¶3. (U) In the World Bank's Doing Business 2008 survey, Argentina 

ranked 109 of 178, alongside Bangladesh, Nigeria, Belarus, and 

Nepal.  The survey is a composite, ""ease of doing business"" index 

comprised of the following factors: starting a business, dealing 

with licenses, employing workers, registering property, getting 

credit, protecting investors, paying taxes, trading across borders, 

enforcing contracts, and closing a business.  Singapore, New 

Zealand, and the United States occupied top three spots.  Among 

Latin America and the Caribbean, Puerto Rico (28), Chile (33), and 

St. Lucia (34) were the highest ranking; Haiti, Venezuela and 

Ecuador were the worst. 

 

¶4. (SBU) One of the most noteworthy and wide disseminated factors 

that comprised this overall ""doing business"" survey picked up by the 

local press was the number of salary weeks payment required to 

terminate an employee.  Employers must pay a fired worker 139 weeks 

of salary in Argentina (compared to zero in the United States, 

Denmark, and New Zealand).  Note that this 139-week figure does not 

take into account GOA's recent termination of its onerous ""double 

indemnification"" labor termination policy; if it had, this number 

would have been less.  Nevertheless, even if this policy change had 

been incorporated into the survey, according to the survey's 

methodology, Argentina's overall Doing Business score would not have 

changed much. 

 

¶5. (U) The Doing Business 2008 survey highlighted other serious 

policy challenges facing Argentina.  While it takes only one legal 

procedure to start a new business in Australia (four in the United 

States), it takes 14 in Argentina.  While it takes two days to start 

a new business in Australia (six in the United States), it takes 31 

in Argentina.  These and other findings serve as reminders of why 

employers are reluctant to hire new workers (an estimated 41% of the 

Argentine labor force is informal) or make new investments. 

 

¶6. (SBU) Comment: Unfortunately for the GOA, these reports were 

released at precisely the time that its first couple was pitching 

Argentina to investors in New York.  On the one hand, they were a 

rude reminder to prospective investors about the challenges of doing 

business here.  However, on the other hand, the reports tracked 

almost exactly with previous years' ratings, and thus there was a 

sense of resignation and ""nothing new"" to the reports.  And, in an 

almost perverse sense, as GOA officials are constantly saying that 

there is ""money to be made in Argentina,"" perhaps the real message 

to these damaging reports is that, yes, there is money to be made, 

as long as you know how - and with whom - ""doing business"" is really 

 

 

done in Argentina.  Local banking and business sources noted that 

 

presidential candidate Cristina Fernandez de Kirchner missed and 

opportunity to address these and other issues during her September 

24-28 visit to New York.  End comment. 

 

WAYNE 


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