Exit rigging, enter RIGI

Presidential Chief-of-Staff Karina Milei flew this week to Canada to lead the country’s delegation to the PDAC conference, one of the largest mining shows on Earth. Argentina is attracting great interest from global companies looking for the minerals of the energy transition: lithium and copper. The consensus was that the combination of having the resources the world wants, plus the Milei siblings in office opening the door to their exploitation, was an unprecedented opportunity in Argentina’s recent history.

Doubts, however, remain. In several public and private appearances, Karina – President Javier Milei’s sister – highlighted her brother’s government’s commitment to rebuilding trust in Argentina. The main concrete argument given by the Argentine team in Toronto — which also included the secretaries of Finance and Mining, three governors, and several other provincial officials — was the RIGI investment incentive scheme that Congress passed last year and is now open for companies to apply to. Projects exceeding US$200 million are eligible for tax breaks, special access to the otherwise restrictive foreign exchange market and a 30-year rule stability guarantee.

While foreign investors like what they hear and what is written on paper, they are also waiting for certain facts to materialise. The most obvious one is the elimination of the ‘cepo,’ foreign exchange restrictions, as few would venture proper money into a place without knowing if they can eventually take it out again afterwards. President Milei was, again, clear enough during his state-of-the-nation speech in Congress on March 1, stating that once a new agreement with the International Monetary Fund is finalised to strengthen Central Bank reserves, the next milestone would be lifting FX curbs. Earlier he had said there would be no ‘cepo’ by January 1, 2026. 

But the timing and sustainability of that process remain a question mark because it doesn’t depend solely on the personal commitment of one person — in this case, the head of state — but also on his political strength and his government’s economic consistency.

Argentina has, many times in its recent past, seen long-term sustainability ruined by short-term objectives. President Milei is vehemently questioning anybody who publicly says that the peso is over-appreciated because he has made lowering inflation the number one priority of his administration and knows that a frozen exchange rate is the vehicle to achieve it — at least until the October midterm elections. In the process, the Central Bank is losing reserves at a quicker pace than it was a few months ago.

The questions investors ask are also political. The impact of the ‘cryptogate’ scam scandal, in which the President shot himself in the foot, is still being assessed. As the person mostly responsible for the housekeeping of the presidential entourage — defining who has access and who does not — sister Karina is also in the spotlight. Rigging rhymes with RIGI, but the pun does not go down well among those considering whether to sink billions into the country.

The RIGI programme formally started accepting applications six months ago, but it is not yet flying as high as initially expected. The benefits on paper are massive, yet so far only 10 projects totaling US$11.5 billion have been submitted for approval by the evaluation committee. All but one belong to the energy and mining sectors, according to a study by Universidad Austral’s School of Government. Most of the foreign capital involved is in the mining sector.

In its narrative abroad, government officials acknowledge that, given Argentina’s track record, it will take time for investors to fully trust the country and promise to go step-by-step in delivering results. In terms of language, the approach is correct, but it is easier said than done: narrative matters less abroad than it does domestically, and facts speak louder than words.

While RIGI seeks to create a bubble of normalcy in an abnormal situation — especially regarding the FX market — the foreign view is that it will remain merely theoretical as long as the Central Bank lacks a sustainable net positive influx of dollars to stock hard currency. The government understands this: Finance Secretary Pablo Quirno, Economy Minister Luis Caputo’s right-hand man, said during the mining roadshow that in the future, all investors should have access to RIGI benefits — i.e., a normal economy.

This means that the Milei siblings and their inner circle, including prominent political advisor Santiago Caputo, should try to behave as normally as possible and pick only the necessary fights to straighten out the country’s economy, rather than others aimed at reshaping its “culture” – something investors do not appreciate much either.