Economy of Argentina

Trip Start Jan 06, 2008
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Trip End Mar 31, 2008


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Where I stayed
Apt 9, 2110 Mendoza, Belgrano
(Buenos Aires hotels)

Flag of Argentina  ,
Sunday, February 17, 2008

Evidence of the continued weakness of the Argentinian economy, despite growth rates in excess of 6 per cent these last few years, is dramatically revealed when driving through Buenos Aires. Wednesday is garbage pickup day in the central city. As we drove one evening though the center to San Telmo we saw gangs of scavengers going through the piles of garbage left out on the sidewalk. It was highly organised with special cloth bags used in the sorting. Items were sorted by type for recycling. The heat of the evening made the garbage smell as the bags were torn open. Youths of both sexes, women, and older men were engaged in this task. They had to work quickly as the garbage trucks were approaching. One unforunate result of this work is that there is stray trash left on the road, too small for the garbage men to pick up and of no value to the scavengers. 
Argentina is a modern country - by that I mean all of the facilities and infrastructure of a modern country are to be found here. Everything works, even the airline when it flies. However, because of the political and economic crises which seem to occur with some regularity, it is difficult to understand how ordinary life is carried on for the typical family. In 2001 there was a 'meltdown' comparable to the crash of 1929. Inflation had previously reached 30% per month. The value of the Argentine currency was reduced to a third of its previous value. Access to bank accounts was restricted for several months, and, of course, there was a massive default on the external debt.
In these circumstance it is not surprising that those who can, seek to put there savings somewhere else, or at least in another currency, usually dollars. It is believed that there is at least $100 billion held overseas. Examination of the store windows along Cabildo in Belgrano would suggest that there are plenty of people with the money to afford stylish furniture and expensive electronic equipment. The apartments across the street from ours look expensively furnished from what we can see, and there are many smart and new apartment buildings in our immediate neighborhood. Inflation seems to be happening again - our latest taxi driver was complaining that it had reached 50%. As most of the food is produced in Argentina that remains cheap, at least to us, but manufacured items seem as expensive as in the US. It is notable that there are still many 25 year old cars (and older) on the road and far fewer expensive (Mercedes, BMW, etc) than we saw in Chile.
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