Honestly, Amazon, you don't need tax breaks from Argentina.
It's hard to see that as anything but exploitation of a desperate economy. (Argentine peso has lost more or less 90% of its value against the dollar in 5 years)
I mean, generating well paying jobs and improving electricity infrastructure in an otherwise economically unattractive country that is Argentina is itself a massive public good.
> Honestly, Amazon, you don't need tax breaks from Argentina.
They don't need tax breaks from Argentina sure, but they do need one to justify building a data center there. Do you expect them to just hold off building one there because they believe they could get a tax breaks later on?
> (Argentine peso has lost more or less 90% of its value against the dollar in 5 years)
Which is exactly why this move is great for Argentina, attracting big contract in your country is how you increase its value.
I doubt they need the tax breaks to justify building data centers in Argentina. It's already ridiculously cheap to do anything there because of their currency teetering on the edge of failure for such a long time.
Amazon is also running out of places to build new regions[1]
> I doubt they need the tax breaks to justify building data centers in Argentina. I
If it was, then they would already have done it.
> It's already ridiculously cheap to do anything there because of their currency teetering on the edge of failure for such a long time.
If you bring a big infrastructure like that, for sure it will be quite good for the currency, which break the purpose of being there because it's cheaper, doesn't it?
Being cheaper isn't much of a benefits either, what makes it costly to operate the datacenter won't make it cheaper down there, if anything, it's going to be more expensive to import the expertise and resource required and to compensate any issue that may arise from the country in itself (power grid instability seems to be a big issue people mentions here).
> Amazon is also running out of places to build new regions
Yeah... I don't see how they are running out of places at all from that source.
> Tax breaks serve to minimize the benefits to Argentina
Tax breaks serve to bring companies there. It doesn't "serve to minimize the benefits", Amazon isn't going there to minimize the benefits to Argentina, but to maximize their benefits to themselves. It will certainly minimize the benefits though to Argentina, but it doesn't serve that purpose.
What you refuse to accept is that most likely Amazon wouldn't be there if it wasn't from that tax breaks, thus even if the benefits is lower than it could be, it's higher than it would be. I'm pretty sure Amazon didn't only contact Argentina to plan this datacenter, there's many other countries that could fit the bill in South America.
Look at this from the perspective of Argentina: without the tax breaks, Amazon would have probably located elsewhere. That's a net loss. I'm sure someone in the Argentinian government did the math and they probably feel good about the deal they were able to get.
And for those of you who suspect that Amazon paid bribes or delivered favors here, rest assured that not a soul at Amazon would wish to risk prison time for violating the Foreign Corrupt Practices Act.
Do you genuinely believe that no american souls risk prison been corrupt outside of America? I have some people and companies to introduce you. Lots of them in Latin America.
Certainly nobody who would survive within Amazon at the level required to make a deal this big. Amazon would retain expensive counsel at all times to ensure complains with FCPA. All major corporations do so.
You are oddly certain, I'm not making accusations but blind faith that corporate compliance programs exist, are substantial, and work is just ridiculous. The recent Volkswagen diesel emissions fraud comes to mind, the CEO and four unnamed executives were charged in Germany recently. (obviously not a bribery issue, but still the same sort of obvious regulations fraud that went all the way up)
Why would Amazon or any company be immune to this kind of behavior?
Here's a list of FCPA enforcement actions in the last quarter, you can go back years. Several billion dollars total in penalties in the last few years.
I think the argument is not merely that it's cheaper, but that the agreement amounts to an unfair sale of future tax revenues (presumably to win support for the current president, who is on his way to losing the runoffs and being replaced in two months). That is, not only are the tax concessions a bad deal for Argentina, but the people who get stuck with that bad deal aren't even the ones making it.
That's not the case if you come buy some empanadas and ice cream and have your cellphone stolen (the standard Argentine vacation).
It's hard to see that as anything but exploitation of a desperate economy. (Argentine peso has lost more or less 90% of its value against the dollar in 5 years)