In 1989, PepsiCo bet on a stable future in the Soviet Union: It invested in factories, opened Pizza Hut stores and signed a monumental contract to supply the Soviet market. Because rubles were inconvertible and Moscow lacked foreign currency, the company agreed to collect part of its contract in kind: a cargo of old submarines, a destroyer, a frigate and a cruiser to sell for scrap. Their CEO, Donald Kendall, ironically stated that they disarmed the USSR “faster” than the United States. But when the Soviet Union collapsed in 1991, the scenario changed: the plants were distributed to 15 new countries, the cheese for the pizzas came from Lithuania, the plastic for the bottles from Belarus and the ships were stranded in Ukraine. Pepsi had to renegotiate its contracts while Coca-Cola entered the new market aggressively. History shows that a mistake in geopolitical analysis can turn a bold strategy into a fiasco.
The fragility of global chains became clear after the 2008 crisis, the Covid-19 pandemic and the wars in Ukraine and the Middle East, which began a period of global fragmentation. Trade is growing less than GDP and companies have moved from maximizing efficiency to building resilience. This is how it came about Nearshoring And Friend horing: Relocate production to nearby countries and/or reliable allies. The Inter-American Development Bank estimates that this reconfiguration could generate additional exports to Latin America worth $78 billion annually. To benefit from this, the region needs an integrated approach that combines investment, infrastructure and greater trade integration.
In Argentina, recent midterm elections and unusual financial assistance from the United States provide a window to promote reform and consolidate growth. The alliance with Washington is strengthened and opens up opportunities: A sectoral tariff agreement proposes reducing or eliminating tariffs on more than 100 products that could contribute $4 billion in new exports, according to the IDB and triple the services sold to North America. The official strategy is based on four sectors – agribusiness, mining, energy (particularly oil and gas) and technology innovation – with projections of generating more than $50 billion additional in some years. However, to attract investment, it is essential to stabilize the macroeconomy, normalize the foreign exchange market and strengthen legal certainty.
An EY survey of 1,700 executives – 150 of them Argentinians – shows that companies are prioritizing operational improvements, expansion into new markets, digital transformation and innovation. Geopolitics continues to be perceived as a contextual factor rather than a strategic axis. Almost half expect a positive relationship with the United States; the other half sees it as neutral or negative. In a world that is being reordered, this vision seems limited.
The message to business leaders is clear:
The unprecedented relationship between Argentina and the United States opens a unique window to reposition export offerings and attract investment. But with China and other players also on the geopolitical chessboard, companies need a comprehensive vision that combines commercial pragmatism and geopolitical strategy. Success will depend on the ability of the private sector and government to interpret environmental signals, invest with conviction and implement reforms to seize this historic opportunity.
The author is an auditor and MBA. Founding partner of the consulting company MAP
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