Argentina — 30 March 2012

Argentina has long been a puzzle to people who are not from there and on occasions infuriating those who are. For the moment the foreigner might wonder why the government is seemingly doing all it can to derail the prosperity in which the rest of South America, including Argentina, finds itself.

It was not too many years ago, in 2001 to be exact, when the Argentine economy collapsed and the country defaulted on its foreign debt. Restrictions put in place at that time to control the outflow of dollars from the economy were called the “corralito”–as in to “corral” in English meaning to contain a herd of animals by putting up a barrier around their egress.

Today there is no talk that Argentina is going to default on its international obligations again, but the corralita is back. In addition President Cristina Fernández passed a bill through the congress which would let her tap the national bank reserves were the need to arise.

What does all this mean? Argentina is fighting to keep its currency from being devalued and curtail the rise in its imports and overcome its trade deficit. Further international monetary agencies say that the economic figures coming from officials there are not to be trusted. Private economists and others says the real rate of inflation in Argentina now is 21%. Contrast that with, say, the 4.2% inflation rate in Chile and Peru.

The Argentine citizens are feeling the squeeze. A couple of months ago the newspapers showed picture of dogs at the border who had been trained to sniff out not drugs put currency. Their goal is to enforce export restrictions on dollars least people carry them off in their luggage.  ATM machines outside the country are not dispensing dollars from Argentine banks anymore and international funds transfer is limited.

On top of that this week came the odd news that people who bought their books from Amazon.com and other overseas retailers would have to pick up their books at the airport instead of allowing delivery to their homes. Presumably the move was to protect mail handlers from contaminating themselves with lead found in ink on the printed page. Others have said that real goal is to get importers to print their books inside Argentina. That assertion would agree with other protectionist measures that Argentina has put in place.

This protectionism includes restrictions on imported items including the iPhone. New rules says importers have to apply ahead of time so a backlog of goods is piling up overseas while those who have the means are going abroad to buy these electronics. Apple is not among the companies who have agreed to set up manufacturing operations in Tierra del Fuego, an area with a tax holiday for those who do. Of course Tierra del Fuego is better known for its whales and penguins that the manufacture of high end electronics. Yet Samsung announced they will build tablets and computers there in Tierra del Fuego where they already produce cell phones. Lenovo too, who bought their notebook business from IBM, is also going to make computers there.

Argentina is a country rich in natural reasons with a vast acreage of range land, soy beans, and corn. Plus they have oil and natural gas. But the news now is that Argentina now has switched from being an net exporter to a net importer of oil and natural gas. This comes atop the news that Argentina has cancelled oil leases with the Argentine oil firm YPF owned by the Spanish. Presumably the government was displeased that YPF is not investing enough in oil and gas exploration causing output to slump.  YPF was a state oil company which was privatized.  Now there is talk of nationalization again and its stock has consequently slumped.

Argentina has also raised the ire of the USA who has says it will cancel the countries favored tariff status because they have not paid debts owed to American companies which were ordered by international arbitration.

The government recently put rules on the operations of the only company in the country, Papel Prensa, which produces newsprint. At first people would say this is affront to freedom of the press. But that company has a longer history to consider. Papel Prensa’s largest shareholders are Clarin and La Nación newpapers. These two papers are generally critical of the Argentine government.  An article in The New Yorker magazine recently said that Clarin and another newspaper, presumably La Nacion, became share holders in the paper company during the military regime because they maintained cozy relations with the military dictatorship and did not openly criticize it. But today the Argentine government says they might also have been complicit in the abduction, torture, and killing of the company’s owners at the time.  As if this was not bizarre enough, The New Yorker says the  owner of Clarin adopted two children of murdered political prisoners and raised them as her own kids so the paper would have an heir.

Beyond all of this economic turmoil, Argentina is fanning the flames of an old dispute which 30 years ago this month saw the humiliation of the military regime there as they waged an ill thought war against Britain for control of the Malvinas-Falklands Island. Argentina is calling on the South American nations to join them in a blockade of the Islands as they lobby to force the UK to negotiate sovereignty over the terrain. Last week Perú blocked a British flag destroyer from docking there. Perú later said it regretted doing that. Today Uruguay has announced that it would no longer support the blockade of the Malvinas-Falklands because it is an affront to the human rights of the people living there.

That Argentina is a puzzle is no doubt. What makes this nation even more fascinating to follow is her president has beauty queen good looks. President Cristina Fernández came to power when her late husband decided that he and his wife would take turns running the nation and put her at the head of the political party which won the election in 2007. But President Néstor Kirschner died soon after so the wife runs the country without the husband.  Cristina was recently re-elected.

For anyone who speaks Spanish, the Argentine people, and particularly those who live in Buenos Aires, are interesting as well for their animated way of talking. They sort of sing when they talk and have an inflection which rises and falls like a caricature of the Italian Marcello Mastroianni in “La Dolce Vita”. Over here in Chile you can see this exaggerated speech in the telenovella “Aquí Mando Yo” (meaning “I make the rules”) which runs weeknights on TVN. Argentina has many blue eyed and blond people.  Following this stereotype in Aquí Mando Yo one particularly full figured blond girlfriend and her mother speak with a cadence that seems to mock what the Chileans think of their way of taking.  Will the Chilean enthusiasm for this telenovela cause the cause the Chileans to look askance as their government continues to support the naval blockades of Las Malvinas?  Let’s hope not.

 

 

 

 

 

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(4) Readers Comments

  1. no tenes idea de lo que estas escribiendo !!!! El nivel de ignorancia sobre la situacion del pais es sorprendente! .lo que vos llamas “corralito” no es asi. Los argentinos en el exterior podran sacar dolares de sus cuentas afuera, siempre y cuando tengan una cuenta en dolares en el pais.Eso te parece mal? O acaso no sabes q se fugan dolares? lo q CFK esta haciendo es tocar los intereses de la poblacion mas rica del pais, para que haya una real distribucion de la riqueza. Te sugiero que te informes por otros medios q no sean CLARIN o LA NACION. Perocomo veo q te esponsorea el diario EL PAIS de España, no creo q tomes mi sugerencia. Segui repitiendo las pavadas de los monopolios de prensa… y tu cerebro quedara agusanado !!!! Y ya q estas en Chile, que pasa con la educacion ?

    • Benjamin, cuántos años tenes??

  2. Cristina Kirchner applied the law 21499 to expropiate Repsol YPF. This law was created by Videla in 1977. Videla was a dictator that she criticizes harshly. However, she is using the law that Videla created. What a paradox.

  3. Argentina used to have the best beef in the world, but since the Kirchners have been in power, the beef industry has been completely destroyed. Nobody should eat the poor quality and polluted beef, it’s not fit for human consumption. Argentine beef loaded with hormones, drugs and chemicals that have been outlawed in the USA and Europe and they have been known to ship rotten beef for export after it’s been washed with bleach and ammonia, injected with formaldehyde and red food coloring.
    Argentine lemons are sprayed with toxic, dangerous cancer and nerve damage causing chemicals and injected with artificial yellow coloring. The soil in Argentina is so depleted of minerals in that lemons grow white on trees and have no flavor.
    Industrial products – tools, automobiles, machinery & appliances from Argentina are the worst, poorest quality in the world. Even the chinese won’t buy them. No industrial standard, the lowest quality raw materials, no testing is done before they are shipped. This has caused serious injuries by unsafe products, many people have been electrocuted by Argentine washing machines & hot water heaters that leave the factory with short circuits.
    All countries should completely avoid ALL Argentine products permanently.
    Very scary news about Argentina signing a military cooperation agreement with Venezuela, they are looking to start a war.
    http://www.buenosairesherald.com/article/105945/argentina-venezuela-to-sign-military-agreement
    And the new “militant” movement that Kirchners are starting that make “La Cámpora” look like a group of kids in nursery school? It’s called “Vatayon”, a Kirchner backed group that goes into prisons of Argentina to recruit supporters for their political movement!
    http://www.facebook.com/#!/vatayonmilitante

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