As of December 2010 we’ve seen an interruption on the imports of Argentina. It started with products that supposedly were already being produced locally, but as time went by it was clear that the import ban had expanded to other areas as well. Soon products such as English tea, even chocolates and ketchup were phasing out of existence in the stands of the different stores you used to find them. Oh, you can live without tasty chocolate made in France, Switzerland, USA or UK. Local tea isn’t nearly as good as the imported one but this is a survival website, we wont get our panties all bunched up over that. Toys? No, they’ve been banned from importation as well. Again, not a problem. How about medications? I talked with a 50 year old person this week that has a high blood pressure condition and he told me he’s having problems finding his medication. This has been a problem before and its worth keeping in mind. What people did here was ask a pilot or stewardess friend, someone that traveled abroad frequently to get it for them. Some hospitals also organized purchases and had people bringing it directly to them from the labs.
The president who shall not be mentioned ( its bad luck) supposedly took these measures for two reasons, or at least that’s what most consulting firms are saying. 1) To protect the national industry 2) Two balance the import/export sheath during an election year, that due to the large amount of imports has caused exports to fall in comparison 58%. http://www.elnuevoherald.com/2011/03/09/900174/argentina-limita-importaciones.html
Now if we look a bit beyond what we’re being spoon fed here, a few things become obvious. First, Argentina doesn’t produce most of these products that are getting banned. I know we don’t make English tea any more than we make Nerf guns, so why is all this getting banned? Second, our president ( she who shall not be mentioned ), claims that only 12% of the imports being banned are consumables and non-basic necessity or luxury items, that 71% of the ban is industrial equipment and supplies. What the heck!? How soon before everything starts malfunctioning (again) then? Are we supposed to get by like Cuba then, fixing all with wire, glue and duct tape? Oh right, Duct tape that actually works is imported so bye-bye to that too. We are only left with the local made one that has the adhesive power of a booger and happens to be more expensive.
So what´s the real reason why imports are being stopped? The real, no BS reason is that the Argentine peso keeps falling like a rock in real value and its getting extremely expensive for the government to keep the dollar at 4 pesos. I already mentioned that the official price of the peso differs from the one on the streets. To stop it from going through the roof the central bank has to sell millions of US dollars. As the peso keeps loosing value inflation is forcing the socialist government to raise salaries so as to not leave the entire country below the poverty line, but that presents a new problem. If I keep raising salaries and keep the exchange rate 4 to 1, then you have another artificial situation: Argentine Salaries that are high in US Dollars. You have a truck driver making 3000 USD a month or more, and that still not being enough to sustain his standard of living though time. We are past the ridiculous point and we can’t have people earning more dollars here than in USA. Everything from abroad keeps getting cheaper and cheaper in comparison, so why buy anything made here, why spend pesos when you can spend dollars? That’s the real reason imports are getting banned, because the peso is losing value, the 4:1 exchange rate is as much of a lie as the 1:1 exchange rate was. As much as salaries have gone up, they don’t keep up with the 30% to 50% inflation per year, so we’re still getting more poor people every year dropping form the middle class.
Its admirable though that they’ve managed to keep everything together under these conditions for so long. The word on the street and the one I believe to be true, mostly because there’s just no other way out of this mess, is that after the elections in October 23th this year, the peso will devaluate considerably, the beginning of a new crisis. After all, the worst hyperinflation we’ve seen before the 2001 collapse was during Alfonsin’s presidency. One of his last desperate attempts was to stop importations as well… less than a year before hyperinflation in 1989 doubled the amount of poor in this country. History keeps rhyming.