s /reading in the investment history in Argentina**Telefonica freezes investment in Argentina. The group Telefonica has frozen its investment in Argentina. The group might have to adjust more its finances to adapt to the devaluation of the Peso. With the new exchange rate of Pesos $2 per dollar the earnings of the group in Latin America will be reduced by another 3-5%. The Latin American business represents around 40% of the profits before tax of the group and 33% of its sales. Telefonica will reduce its investment in Latin America to represent not more than 11% of its turnover in the period 2002-2005. Investments will be reduced from Euros 3.022bil (US$2.65bil) in 2001 to not more than Euros 1.5bil from this year and for the next 4 financial years. The margin over sales will be reduced from 13-15% in 2001 to 11-13% in 2005. Telefonica predicts a growth of between 7-9% annually in its earnings and profits before tax in Latin America until 2005. Wal-Mart has benefited from this operational structure with regard to its stores in Argentina, a country where economic instability has derailed both the profits and growth of this 6-year-old start-up.Argentina fell into a recession in mid-1998, and it has not been an easy road back. Concern over the country defaulting on $128 billion in public debt still exists despite repeated assurances to the contrary by finance minister Domingo Cavallo and the availability of a $40 billion bailout package.It is certainly not the outcome Wal-Mart was looking forward to when it entered the country in November 1995. At the time, the International Division's operations were confined to North America, so Wal-Mart couldn't be considered a truly global player until it stepped off its home continent.It did just that in late 1995 with its entry into Argentina and Brazil, a move signaling Wal-Mart was indeed serious about broader global expansion. Early organic growth in Argentina suggested Wal-Mart was highly committ...
