Argentina's Investment Regime Fuels 'Extractivist' Model, Report Claims

Argentina's "Regime for Incentives for Large Investments" (RIGI), established in 2024 under President Javier Milei's government, has stimulated an economic model heavily focused on extraction, leading to socio-environmental conflicts, according to a report released Wednesday by the RIGI Observatory.

The RIGI Observatory, comprising civil society organizations, research groups, and academic institutions, analyzed the regime two years after its implementation. The RIGI grants companies making investments exceeding $200 million in strategic sectors 30-year benefits, including fiscal, customs, and foreign exchange advantages. Official data indicates that 44 projects, with committed investments totaling $198.9 billion, have applied for RIGI status, with 21 already approved by the government. These approved projects represent $46.7 billion in committed investments, predominantly in mining (12 projects), oil and gas (5 projects), and energy, infrastructure, and steel (4 projects).

The report highlights that investments under the RIGI are concentrated in oil, copper, gas, and lithium. Other sectors initially targeted by the plan, such as tourism, forestry, and renewable energy, show minimal participation or no projects at all. The RIGI Observatory argues that the fiscal regime has solidified a strongly extractive profile without fostering new economic sectors.

In February, President Milei further emphasized this direction by incorporating hydrocarbon exploration and production projects into the RIGI. He also extended the application deadline to July 2027 and eased conditions for expanding existing projects. The report suggests this move extended exceptional incentives to activities in the Vaca Muerta unconventional hydrocarbon formation, an area already experiencing record investment, production, and exports. Mining is another major sector benefiting from the RIGI, which has had a specific promotion regime for decades. The Observatory warned that the implementation of the RIGI has coincided with a "retreat in environmental regulation" in Argentina, including reforms to the Glaciers Law that permit mining activities near ice fields.