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Cablegate: Argentina: Ambassador Hosts Buenos Aires Mayor Macri And

VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #1158/01 2282029
ZNR UUUUU ZZH
R 152029Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUCPDOC/USDOC WASHDC
RUEHC/SECSTATE WASHDC 1797

UNCLAS BUENOS AIRES 001158

SIPDIS

USDOC FOR 4322/ITA/MAC/OCAC/APEACHER
USDOC FOR 3134/USFCS/OIO/WH/RD/BBRISSON
STATE FOR ECON WHA/BSC

E.O. 12958: N/A
TAGS: OVIP BEXP EINV AR
SUBJECT: ARGENTINA: AMBASSADOR HOSTS BUENOS AIRES MAYOR MACRI AND
U.S. IT COMPANIES TO DISCUSS TECH PARK

1. Summary: On August 8, Ambassador hosted a roundtable for Buenos
Aires Mayor Mauricio Macri to present his plans for developing a
technological park in the southern suburbs of Buenos Aires. Present
at the roundtable were country representatives of major U.S. IT
companies IBM, Cognizant, EDS, Hewlett Packard, Intel, AMD, Cisco,
Motorola, Nextel, Travelocity, Oracle, and Sun Microsystems. Macri
acknowledged challenges for investment in Argentina but stressed his
city's determination to press forward. He noted an unprecedented
one billion dollars in private investment in the city this year,
double the average over the past four years. He also highlighted
accomplishments of his 8-month-old administration, including
infrastructure improvements, new financing options for SMEs,
educational institutions, and public hospitals. End Summary.

-------------------------------------------
Buenos Aires as the Epicenter of Technology
-------------------------------------------

2. Mayor and staff presented a proposal for an IT Park in Buenos
Aires to facilitate continued high growth and investment in the IT
sector. The multi-faceted district, to be located in the Parque
Patricios neighborhood on the south side of the city, would be a
stimulating high-tech environment for private IT companies, trade
associations, and technical universities, where one could work,
research, have fun, and live.

3. Macri's goal is to make Buenos Aires the epicenter of technology
in South America. The park would encompass 200 hectares of publicly
accessible space, including office buildings, a government
development office and a "clubhouse" to host various activities and
serve as a convention/learning center. The presentation stressed
that the district is not a "city project," but rather a joint
venture with significant private sector participation. The Mayor
mentioned the idea of a Presidents Club Table, modeled after IT
parks in China and Spain, to facilitate and encourage ongoing
company input in the park's development and operation.

--------------------------------
With Incentives, Will They Come?
--------------------------------

4. Draft legislation to create a regulatory framework for the
district is currently being reviewed by the City Congress
Commissions and is expected to pass by November 2008. Development
of the park will be promoted through low rent for participating
companies and several tax incentives, including waving taxes on
"rubberstamping" and contracting for the companies, a 10-year waiver
on city services taxes, a 10-year waiver on gross income taxes, and
short-term preferential lines of credit for construction. The
benefits of locating in Parque Patricios were also highlighted,
including inexpensive real estate and easy access to public
transport and to other important areas of the city. Basic
infrastructure, including closed buildings and warehouses, is
already in place as well.

-------------------------------
Safety, Marketing, and Promotion
-------------------------------

5. The company representatives expressed significant interest in
the project, as evidenced by the questions they asked after the
presentation. They questioned the Mayor about future security plans
for the district. The Mayor and staff said that they were working
closely with the federal police to implement a comprehensive
security plan, noting that the development of the neighborhood into
a high-tech park would inherently improve quality of life and
therefore safety in the area.

6. Companies also asked whether the City had produced a copy of the
plans and presentation in English, so that they may transmit the
idea to their U.S. headquarters. Macri responded that an English
version would be available by the end of August. The Mayor also
asked the Embassy to help organize a trip to the U.S. to present the
project in relevant cities for various companies, and to receive
feedback from similar ventures in the U.S.

--------------------------------------------- ---
Comment: Investment Climate Will Bear on Project
--------------------------------------------- ---

7. Mayor Macri's proposal is ambitious and his team seems
well-versed on the development of tech parks, as their presentation
was thorough and well thought-out. After the meeting, company
officials also seemed genuinely interested in learning more about
the project. It will be important to see if the mayor's bill is
actually passed by the city legislative by November 2008, and how
helpful the national government will be in assisting in the
development of this tech park. While the City Government is willing

to offer many incentives for future investors, the current national
investment climate could preclude many multinational IT companies
from securing the necessary commitments to invest in this tech park.
The Commercial Service is following-up with the Mayor's office on
opportunities to assist in the promotion of this idea in the U.S.,
as requested. End Comment.

WAYNE

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