Argentina’s all business ace

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Consul General Gustavo shows why this 30 year veteran is the right man for Argentina to send to Hong Kong. Unfazed, he finds the upside in the Argentine story.


Sending a business minded economist into a business town was the best move Argentina could make in deploying its representative to Asia’s financial centre. Gustavo Fazzari will need to use all of his 30 years experience, economic and MBA training if he is to broaden the commercial and investment ties between Hong Kong and Buenos Aires.

It’s a long way to Hong Kong…

Buenos Aires is, in fairy tale parlance, far far away. Only Santiago, as national capitals go, is farther from Hong Kong – barely. Whether it is convincing Hong Kong investors to look into Argentina or Argentinians to come to Hong Kong, it is a long road to haul. For Argentinians coming to Hong Kong, once they get here, they compare this city’s high costs to China’s lower cost base and may find Hong Kong a bit rich for their taste. That being said, Fazzari is finding new ways to get Argentina on the map in Hong Kong.

Argentinian beef and leathers are rightfully legendary and have long been in high demand in Hong Kong, as witnessed by Argentinian specialist restaurants like Concept Creation’s Tango. Wine, cotton, precious stones, olive oil, and other agribusiness products make respectable appearances in the export numbers. Much of that is of course in transit to China. The Consul General is seeking to bring new elements to the mix: art. Art is the new entrant to the scene, riding a tide of interest in Latin American painting.

Entrepreneurs such as Adriana Alvarez-Nichol, the mastermind behind gallery Puerta Roja, have opened businesses specialising in such art. The Consulate has supported showings of Argentinian artistes like Martha Zuik at the Four Seasons. Zuik, represented by Alvarez-Nichol, has exhibited all over the Americas and Europe and is now blazing a trail for Argentinian artists coming to China.

The ends of Earth

Trying to get Hong Kong investors to Argentina is another matter. The country has been riding a roller coaster in parallel with Hong Kong, but on different tracks. As Hong Kong plunged in the Asian Financial Crisis starting in 1997, Argentina was afflicted the next year by a collapse in commodity prices, and the Russian and Brazilian devaluations – all aggravated by their peg to the USD and its rise. Problems compounded until they hit rock bottom – and then reversed. 2002-2011 was a time of sustained growth on the back of a low currency and an agricultural export boom, even during a time of sustained criticism of its policies. Indeed, the ‘global’ financial crash of 2008 didn’t land very heavily on Latin America, especially Argentina.

During the most difficult times, Mr Fazzari was sent across the Atlantic and may have inadvertently benefitted from the turmoil. His appointment as the #2 in the embassy in Nigeria was quickly converted into his first Chief of Mission posting. The Ambassador simply never arrived. He was reassigned within the government to assist with the needs of the day. From his senior position, he decided that Mr Fazzari, charge d’affaires, should be the top man. He remained such for three years, handling 22 sub-Saharan countries from Abuja. His time there included managing the special relationship with Equatorial Guinea, a rare African, Spanish speaking country that was once governed, along with Argentina, as part of the Viceroyalty of Río de la Plata (Viceroyalty of the River Plate) under Spain. He was also worked with the Brazilians to evacuate Argentinians from Côte d’Ivoire during that country’s strife in 2004.

This experience led him to write his thesis, a prerequisite for advancement, on the importance of West African nations to Argentina’s energy security. A passionate economic historian, he shared the history of the concept of energy security’s origins with Lord of the (British) Navy Winston Churchill’s conversion of the Navy to oil. His thesis was equally convincing, leading to a dramatic, and useful, expansion of Argentina’s representation in that part of the world.

The tough questions
Energy security is still crucial today as Argentina has become a net importer of energy. The current government’s plan to rectify that situation may have made Mr Fazzari’s role as an investment promoter difficult. The seizure and nationalisation of 51% of Repsol YPF, a formerly state owned oil and gas producing firm that had been privatised through sale to Spain’s Repsol, has spooked international investors. While previous nationalisation targets had been
mostly locally owned, the YPF seizure occurred after a long running series of disagreements between the current President’s government about Repsol’s alleged underinvestment and excessive dividends, and dissatisfaction about export and price controls and lease conditions on Repsol’s part.

Diplomat asked the Consul General about the current state of affairs as the current government seeks to stabilise its situation, with developments occurring by the day. Argentina’s policies in the last decade meant it avoided much of the crunch of the 2008 global financial crash. Argentina maintains that recent currency woes arise from a combination of speculator attacks and the general outflow of capital from emerging markets, for a number of reasons including a return of capital to the US. To his immense credit, Mr Fazzari did not shy away from the tough questions.
In his own words (from February 19th):

“It is our work to answer those challenging questions. We are right now at a crossroads.

“There is a program implementation with new economic measures…In the last two or three months, we had a negotiation with Repsol about the nationalisation of our oil and gas company It got better terms, in terms of international coverage. Economic factors are positive regarding reaching an agreement between Repsol and the government of Argentina. That is something that is quite tangible.” [Ed note. As Diplomat went to print, Bloomberg was reporting a deal to be imminent.]

“The Argentinean government is negotiating with the Paris Club regarding an international debt which was held with different governments all over the world. That had an effect on the financing the Argentine could obtain from different sources.

There is a reaching out by the actual economic authorities trying to resolve the international situation that had been lasting a number of years. We see positive steps on that.

There’s also positive steps regarding the level of fiscal expenditure that the government was having. Sources were indicating that inflation was an issue in Argentina. The government is addressing those concerns.

We are seeing some changes that are indicating … a change in the direction of where the economy is going, and I think that is quite positive

Roller coaster rides aside, some Hong Kong firms have long-standing and very successful investments in the country. Noble Group has massive operations there in ports and transport and has recently invested in building a biodiesel plant in the country. It has operations in Buenos Aires, Rosario, Lima, and other locations in Argentina. Interestingly, it went into the country in 2001 – arguably at the height of previous economic instability. Fortune favours the bold.

Experience counts

Like many Diplomat subjects, Mr Fazzari has diplomacy in the blood. He grew up around the world and his office showcases his father’s appointment to Marseille in 1952, signed by President Juan Perón, the seminal historical figure of modern Argentina. His childhood included Spain, France and he graduated high school from the United World College in Singapore – the source of old friends who welcomed him to Hong Kong.

He polished his education in the United States with economics degrees from George Washington University (undergraduate), DePaul University (masters). He started in the ministry responsible for trade and investment promotion until it was absorbed by the Ministry of Foreign Affairs in 1991. His first posting was to Chicago – familiar territory where his local knowledge and training could be put to good use. While there, he completed an MBA with the renowned University of Chicago programme (soon opening in Hong Kong).

Diplomat asked if his economic training flavours his approach to diplomacy: “Yes!”

“It’s not that countries like each other, it’s that they have a common interest. Common interests can be political common interests or economic common interests.”

“If we can have something in common on the trade, economic board, then that would encourage better and stronger and deeper diplomatic relations.”

Members of the political, business and diplomatic community will have a chance to get his perspective on recent events at The Hong Kong General Chamber next month in an event hosted by their Americas Committee. Given his most recent Buenos Aires, pre-Hong Kong postings including Director of Commercial Information, he should have the inside story – if he’s giving it up.

The political game

Argentina has excellent relations with The People’s Republic of China and emphatically supports the principle of ‘one country, two systems’. However, while the political relationship with China is well developed, the Hong Kong relationship does have such an overtly political dimension. In the last few years, Hong Kong and Argentina have signed an agreement pledging mutual support in customs related issues and are negotiating a judiciary related agreement. There is no DTA nor TIEA in the works as of yet.

A quirk of history may link China and Argentina. Author Roberto Laver noted in his 2001 book, The Falklands/Malvinas Case:Breaking the Deadlock in the Anglo-Argentine Sovereignty Dispute, that there were similarities in the origins of Britain’s far-flung colonies in South Atlantic and South China Sea. However, the differences of circumstance make it unlikely that there will be any negotiated settlement in the Falkland/Malvinas dispute in the near future, à la Hong Kong.

For now, the focus will be on trade and investment links between the two in the future.

If history is any guide, Argentina could be an investment opportunity in the near future.

Hong Kong will no doubt be happy as long as the Argentina keeps on delivering the Tango y Vino to Hong Kong during the month of November for the Argentina Festival and all year round.

Thank you to Deputy Consul General Eduardo Leone for his assistance in the interview and for explaining Argentina’s crest and its meaning.


 

Mr Gustavo Horacio Luis Fazzari Gazpio CV highlights

 

  • Born in Buenos Aires 1959
  • 1983 Graduated from the George Washington University, BA. in Economics
  • 1985 Graduated from De Paul University, M.A. in Economics
  • 1985 Argentine Commercial Foreign Service, Ministry of Economics
  • 1988 Consulate General in Chicago
  • 1993 Graduated from the University of Chicago, M.B.A
  • 1995 Deputy Chief, Export Strategy Directorate
  • 1996 Embassy in Malaysia
  • 1999 Cabinet, Undersecretariat for International Commercial Relations
  • 2001 Chief of Mission, Embassy in Nigeria
  • 2005 Deputy Chief of Mission, Embassy in Czech Republic
  • 2009 Director of Commercial Information
  • 2011 Budget Coordinator, Secretariat of State for Economic & Commercial Relations
  • 2013 Consul General in Hong Kong