The bet is that global capital will do the heavy lifting on infrastructure once the red carpet is rolled out. It is a risky proposition in a changed world order where industrial policy is de rigueur, and the new gospel is how to leverage private investment with public seed money.
But not every country has a Vaca Muerta to offer. McKinsey says the basin will need $45bn of investment over the next 10 years to reach scale, beyond the means of the Argentine state in any plausible scenario.
Foreign investors are keeping a watchful eye on the Peronist backlash, so far gaining little traction in a country hungry for a fresh start – like washed-out Britain in the 1970s after hitting bottom during the three-day week.
Mr Milei’s omnibus law has successfully run the gauntlet through the lower house of parliament after much horse-trading, but doing better in his showdown with the discredited parties of the ‘casta’ than many expected. The senate will be harder (he has only seven seats) but he carries the big stick of decree power if all else fails, like Emmanuel Macron in today’s France.
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Milei’s Argentina is fast becoming the Texas of Latin America
The country’s vast shale reserves are the president’s most potent economic weapon https://t.co/KbX0liJuIe— Paul Deaux (@deauxpaul) May 8, 2024