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RR RUEHWEB

DE RUEHBU #0153/01 0420736
ZNR UUUUU ZZH
R 110736Z FEB 08 ZDK
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0215
INFO RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHYE/AMEMBASSY YEREVAN 0005
RUEHBJ/AMEMBASSY BEIJING 0199
RUEHQT/AMEMBASSY QUITO 1041
RUEHGL/AMCONSUL GUAYAQUIL 0102
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000153 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EAIR EAGR ENRG PREL AM AR UY
SUBJECT: Ambassador Meets with Argentine Mogul Eduardo Eurnekian, 
Avatar of Globalization 
 
Ref: 07 Buenos Aires 2390 
 
¶1.  (SBU) Ambassador met February 6 with Argentine CEO Eduardo 
Eurnekian, who has important investments in the United States, 
Argentina, Armenia, Uruguay, Ecuador, Italy, Morocco and China in 
agro-industry, energy, airports, infrastructure, construction, 
banking and real estate.  An admirer of the United States, Eurnekian 
maintains several residences there and employs U.S. technology, 
products and management techniques in his businesses.  Eurnekian 
(protect) offered to help the US as needed in Argentina and shared a 
range of insights with the Ambassador. 
 
Dealing with Argentina 
---------------------- 
 
¶2.  (SBU) Patience, Eurnekian confided to the Ambassador, is always 
needed in Argentina.  The lack of strong institutions is palpable, 
as is the short-term focus of much government decision-making.  This 
complicates doing business just as it does managing bilateral 
relations.  A ray of hope, he said, is that President Cristina 
Fernandez de Kirchner likes things international.  Eurnekian advised 
for the USG to find opportunities to expose her to international 
actors and norms -- getting her to participate substantially in 
gatherings like Davos or the Clinton Initiative should help.  Right 
now in Argentina, he said, much is done by personal contacts.  The 
business community is not united and is not capable of acting as an 
effective counter-weight to the government on most issues. 
 
Trans-Andean Chile-Argentine Tunnel and Rail System 
--------------------------------------------- ------ 
 
¶3.  (SBU) Eurnekian is trying to get both governments to support a 
project for a new rail link between Mendoza, Argentina and Los 
Andes, Chile.  He foresees massive potential growth in transit of 
goods from Brazil and Argentina to the Pacific and from Valparaiso 
to Mercosur over this route.  He says his project should take about 
six years to complete and cost about 2.8 billion U.S. dollars.  He 
has already talked to the French government about contributing to 
the financing, and is also looking to the Inter-American Development 
bank and the Corporacisn Andino de Fomento (a multilateral financial 
institution based in Caracas -- www.caf.com). 
 
Argentine Aviation System 
------------------------- 
 
¶4.  (SBU) Eurnekian says his company Aeropuertos 2000 has met all of 
its obligations for investing in Argentina's airports as 
concessionaire for managing the facilities (six new terminals, eight 
new runways, etc.).  (Reftel notes the opinions of local 
representatives of all U.S. and other foreign carriers, as well as 
the International Air Transportation Association, IATA, who describe 
Aeropuertos 2000 services as sub-par and overpriced.)  He argues 
that he has had no control over the poor airline service or dealing 
with the difficult union, security, and air control challenges.  Nor 
is he optimistic that the Government of Argentina is ready to face 
up to the problems.  A long-term vision is needed.  Air fares and 
costs need to be liberalized so you can generate both low-fare 
carriers and allow higher fares for late bookings.  Right now, the 
government is locked in a struggle with Aerolineas Argentinas, 
seeking greater control, rather than seeking to allow quality 
improvement through more competition.  The airorts in the interior 
of the country are suffering, he observed.  Air travel is down in 
all airports except at Buenos Aires International airport. 
Customers tired of cancellations and delays are increasingly 
choosing buses or other transport.  Internal tourism and business 
travel suffer as a result of rampant delays, paucity of flights, and 
poor connections between provincial cities (except via Buenos 
Aires). 
 
Energy 
------ 
 
¶5.  (SBU) Eurnekian is teaming up with private Brazilian investment 
firm GP Investment/Investimentos, (www.gp.com.br) to bid on Exxon's 
assets in Argentina. While the GoA has made it very hard to operate 
in the petroleum and gas sector, pressure to find more resources 
will increase, as will the economy's dependence on these products. 
Eventually, he reasons, the government will need to let prices rise 
and to create additional incentives to explore and increase 
reserves.  Eurnekian will be opening his first bio-diesel plant in 
Argentina soon, and plans two more in the future. 
 
Agro-business 
 
------------- 
 
¶6.  (SBU) This is where Argentina has a real advantage globally, in 
Eurnekian's opinion.  He is investing heavily in additional 
Argentine production of field crops and livestock, and taking the 
advanced methods and technology used in Argentina to places like 
Morocco and China.  In China, he is very optimistic about using 
Argentine genetic technology to strengthen the Chinese cattle stock. 
 
 
WAYNE