Monday, March 26, 2012

Decadence in Argentina as it falls Apart…..index.html…..Fuego.html…..uctos-pais
Most educated people knew that the second term of Cristina Kirchner ruling Argentina would be hard to say the least. With a decade of K rulership, since her husband Nestor was the president before her, it has now become very difficult to be optimist.
Lets try to explain how life is for people now in Argentina. Power supply interruptions are common as it usually happens this time of the year. Just a few days ago many places of the city ended up under water due to the intense rain and lack of pluvial infrastructure investment.
In economic terms the same old story continues, one that the Kirchners already have us used to, salaries keep rising, but never catching up with the 25% a year inflation. As a result, the standard of living has been decreasing proportionally. With the peso artificially pegged (once again) to the dollar at 4 to 1 this time, Argentina isn’t just expensive to live in in pesos, its expensive even when visiting with dollars or other foreign currency.
Secretary of Commerce Gullermo Moreno is stopping 2 out of 10 importation requests, and that’s only the ones that bother requesting. Other sources say that only 2 out of 10 requests get approved. When asking around stores they tell you that there’s no importation whatsoever in terms of electronics and plastic products such as toys or textiles, and at the end of the day that matters to consumers. Small or large chain store, the story has been the same for over a year and keeps getting worse: Moreno is stopping importations so as to promote national industry. The first problem with this this mechanism has proven to fail more often than work and we are already seeing the results. “Malo y Caro” (expensive and bad quality) are words that describe national production, especially when it comes to electronics. What can you expect when people are forced to buy whatever junk a corrupt businessman with strong political connections puts on the market? And the sad part is, this can barely be described as “national production”, its more like national assembly, with 95% of the manufacturing still being made in China. Usually its just the exterior box and manual that gets made locally. Sometimes its just a matter of sticking a local brand on the product that comes from abroad. At the end of the day its still Made in China electronics, the difference is that the “businessman” is the one paying the cheap price for it, and forcing you to pay whatever he feels like it. A nice dividend going to the politicians that allow this to go on in the first place, keeps things rolling.
This impacts society in a number of ways. “I cant even buy an iron!” complained a relative of mine. “All I can find is that locally produced Longvie junk, and its expensive at that”.
A quick visit to the Garbarino website shows that if you want a washing machine, you can only buy expensive and poorly put together local brands. Washer and drier? Two models, both made by Longvie and either one costs 1000 USD. When it comes to Tvs there’s a bit more offer, but be prepared to pay dearly for the precious imported product: A basic Samsung LCD 32” TV will cost you 800 USD.
Another relative that is about to travel told me “Its crazy, as soon as people knew I was traveling to USA they started asking me for stuff. Even people I didn’t know that well approached me with money asking if I could get them clothes and toys for their kids”. Toys being a plastic import that supposedly could be made locally, are pretty much banned from importation. Within the “supposedly” part of the explanations lacks the little problem of the local industry not being capable of producing that type of plastic product. Argentina toys are of poor quality. The plastic itself is generally of the type that breaks like glass and cuts you. I’ve stepped over such crappy cars myself more than once and had to pull pieces of plastic out of my feet. The last time this happened to me I couldn’t stop myself from smiling, remembering that Simpsons chapter where the Krusty cereal box advertises a barbed steel wheel hidden inside the cereal. How can anyone allow such a product to be sold to kids?
Because the importation restrictions also affect clothes and shoes, again in an attempt to shove national production down our throats, finding brand name shoes is increasingly hard. When you do find them the prices are exorbitant, mostly because they are scarce and only manage their way in through secondary channels. Its funny to see how among the better off kids, they will usually have the same model of Addidas or Nike, the one that someone managed to get into the country.
Most of this is old news and few things surprise you anymore in Argentina, so why would the future look any worse? One of the things that have allowed this madness to continue is that Argentina is a mayor producer of soy, which has had a record high price in recent years. The problem though is that there’s already been a 40% loss of this years production in the mayor soy producing locations due to the draught.
Even worse is the situation with medicines and medical supplies.…..-farmacias
Drugs are getting harder to come by, and it includes everything from cancer medication to epileptic seizure medicines, even vaccines and diapers for paralyzed older children.
Laura Sama needs medicine for her ulcer problem, and when the imported drug wasn’t available she used a locally produced option, but the one produced nationally had a component to which she was alergic and it nearly killed her. Now she goes around drug stores seeing if anyone can get her the imported drug that she needs.
Even books are getting banned from the importation. The excuse? The Argentine government cares so much that they wont allow in books and magazines until they are tested for the the lead content in their ink. If you buy a book online you have to go to customs… and then see when they get around to checking that sort of stuff.
Funny how that works since even blood tests are delayed due to the block on the importation of the reactives.
The ban on medicine importation should be bad enough, but there’s something particularly dreadful when a country starts banning books and magazines… its so Fahrenheit 451. With such a grim picture, its no wonder that companies keep closing and leaving Argentina for good. Giant Swift said “its just impossible to do business in Argentina anymore”.
No wonder people are already calling it Argenzuela.
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Anonymous said...

I can relate to this post, as I spend about three months last year in Buenos Aires (& six months in Brazil), and was appalled by the lack of range of goods sold in stores (also in Brazil, to be honest).

One product in particular comes to mind: candies.

I follow a certain diet regiment, and only purchase candies on rare occasions, and the range of candy products is appalling in all of Buenos Aires stores (Carrefour included)...

...nearly all of the brands were local, with few rare exceptions, such as Mars and Snickers.

Not only that, but the quality of the local candies is really bad, with about every tenth candy being malformed and with defects to the coloring, something I don't come across in Scandinavia, almost ever, where the competition between manufacturers is wide open.

Another thing, Brazil labels GMO products as such, whereas Argentina does not (to protect the local GMO farmers I'm sure)...and personally I will never use GMO products, so this was an important factor making food purchases in BA.

Anonymous said...

Do you think that this is what we, in the States, have to look forward to? It is nearly impossible to purchase 10+ years of all needed supplies.

Anonymous said...

Things aren't going to get any better for Argentina either:
US drops trade preferences for Argentina
The United States dropped Argentina on Monday from its system of trade preferences, citing the South American country's failure to pay court-ordered damages of $300 million plus interest to two U.S. companies.

Until Argentina pays up, the country no longer qualifies under a U.S. trade preferences law that enabled $477 million in Argentine goods to enter the United States duty-free last year, U.S. Trade Representative Ron Kirk said.

Nearly all the world's countries get the U.S. preferences, which as of Monday apply as well to the Republic of South Sudan, Kirk announced. That leaves Argentina in the company of Syria, Belarus and the rest of Sudan as the only countries not eligible, the U.S. Trade Office said.

Argentina hasn't paid the debt because it's desperate to stop capital flight after eating up $10 billion of its reserves last year.

It's kind of nerdy, but the Star Wars quote come to mind - the more Kirchner tries to tighten her grip on foreign trade (and rapidly fleeing capital and foreign currency), the more they slip through her fingers...

Anonymous said...

I came from the usa to live here in Argentina because my wife is from here, she told me it was a better place to raise our child and I bought it! Biggest mistake I ever made coming here. I ask her to go back and she insist in staying here don't understand the economy is so bad the corruption and the violence it's worst than Tijuana that's my hometown. My wife lied to me it's sucks over here said...

You have to know that Argentina is ruled not under a democracy buy under a "cleptocracy". Gov asaulted retirement funds, central bank reserves, and with the highest corruption level no money is enought to political voracity. If you can read spanish I recommend a book very explicit. It is named "La Maldicion Argentina" by Carlos Aga. As I read it, the unexplicable situation becomes clear and I understood why this big country is constantle steeping back.