Argentina will promote development of the “Norte Grande” region with IDB support

Program to make industry clusters more competitive.

Argentina will promote sustainable development in its Northern region by making select industry clusters more competitive with support from a US$16 million loan from the Inter-American Development Bank.

Nine provinces form the region known as “Norte Grande” in Argentina: Catamarca, Jujuy, Salta, Santiago del Estero and Tucumán in the Northwest, and Chaco, Corrientes, Formosa and Misiones in the Northeast. The Norte Grande was created by an integration treaty in 1999 to accelerate development of a region with similar socioeconomic and production-sector conditions.

The region’s main activities are the production of sugar, grains, olives, metallic minerals, tea, oleaginous crops, wood, paper, fruits, honey and wines. The tourism industry is also very important.

The IDB is supporting the federal government effort to correct economic disparities between regions in Argentina with four loan operations for the “Norte Grande” focusing on road infrastructure, electric power transmission, water infrastructure and competitiveness.

“The country’s strategy aims at maximum use of business development programs, services and institutions to enhance the cluster competitive environment,” said IDB team leader Raúl Novoa. “At the same time, Argentina´s Production Council is working on ways to better coordinate and mesh provincial and national business development policies.”

“The program´s basic idea is that a company´s competitiveness depends not just on its own behavior or the business climate in which it is operating, but also on the actions of other companies and institutions and their interactions,” explained Novoa. “The focus of this program is to remedy failures in coordination that constrain success.”

An industry cluster is a network of businesses (producers, manufacturers, marketers and service providers) and their organizations (chambers, cooperatives, associations) and industrial support institutions (universities, technical institutes, local government units) that interact in a geographical area to offer specific products or services.

The program aims to enhance the institutional support to the Norte Grande’s private sector while it improves the competitiveness of selected clusters. The program will help each cluster put together a joint competitiveness-strengthening plan and a network of local “facilitators” to promote a decentralized execution of projects by local organizations.

The IDB loan is for a 25-year term, with a 5-year grace period, at a variable interest rate. Local counterpart funds will total US$4 million. The Economic Policy Branch of the Ministry of Economy of Argentina will carry out the program.