A November Monday morning in Buenos Aires. It has been a good weekend for Argentina. On Saturday the national team beat Mexico, and I was there in the local gastro-market to hear the cries of ‘Argentina, Argentina’. But all is not well here.
The Argentinians are a proud people, and there is much to be ‘proud’ of, whatever that means. Their capital is one of the greatest cities in the world. The architecture is splendid, a mixture of every imaginable style, be it neo-classical, art deco, art nouveau or brutal modernism. Its avenues are wide, indeed the Avenida de 9. De Julio has 14 lanes and a pedestrian needs to be pretty fleet of foot to get across it in one go. There are parks, fantastic bars and restaurants featuring cuisines from the whole world. My favourite is La Mar, a Peruvian seafood restaurant – the Ceviche is to die for, as are the Pisco Sours.
And then there are the Porteños – the people of the port: the inhabitants come from all over the world. Most are of Italian or Spanish extraction but round the corner from my flat is a Syrian restaurant. There is also a Jewish deli nearby that serves excellent pastrami – Argentina has a large Jewish population – many of the cities psychiatrists and psychologists are Jews (Buenos Aires has more shrinks per head than anywhere else in the world). I am also close to the Armenian quarter, which still retains it links with the homeland. Then there are the British and the Germans (some the offspring of Nazis, and some Jews); there is even a Welsh community in distant Patagonia. Black faces are but few – the Argentine economy was never based on slavery, though it has always been based on inequality: much of the land still belongs to a handful of families.
At the start of the twentieth century Argentina was one of the ten richest countries in the world exporting vast amounts of beef and grain, but there lies one of the major problems: an over-reliance on commodity exports. Add to this frequent boom and bust cycles caused by unsustainable government spending and you have a recipe for political chaos and that means regular military coups here. When there is democracy of a sort it is of that inefficient winner takes all variety, with added corruption. Such instability does not encourage investment.
The dominant political movement has been Peronism, a hard to define form of populism which favours interventionist economic policies: wealth redistribution, massive subsidies and currency controls. All of this sort of worked until the mid-sixties, when Argentina was still more prosperous than Spain and Greece, but since then it has been forever downhill.
The country has been unable to pay its debts – it doesn’t export enough and public spending is far too high – and has regularly defaulted on IMF loans. Its currencies (they keep changing) have plunged in value as inflation has soared and Argentinians have chosen to save in dollars – a lot of the world’s $100 bills are in Buenos Aires safe deposits (if they aren’t in Russia).
In order to raise dollars the central bank fixes an unfavourable rate for exporters, thereby actually hampering exports. It also limits the export of beef in order to keep prices down in the country. If beef exports were uncontrolled Argentinians would have to pay the world price for a kilo of ribeye, and no government would dare deprive its citizens of the right to eat beef, and lots of it.
Of course you can’t run a successful economy by discouraging exports – which is what the Tories are doing in the UK, though they claim that we are going through a ‘period of readjustment’, or something like that. Sorry, didn’t mean to talk about Brexit.
A word on exchange rates. The official exchange rate here is 167 pesos to the dollar – that is what exporters get – but if you are an importer, or an Argentinian traveller you will pay over 300 pesos for your buck. Foreigners living or holidaying here don’t use the official rate – you either exchange $100 bills on the unofficial ‘Blue’ market (you can do this on Florida Street, a shopping drag in the centre or just by asking at the hotel desk) or you wire yourself money by Western Union, which will give you 392 pesos for your pound (it was 355 at the start of October). The official rate for a pound Sterling is 200 pesos, but well, you’ve guessed, that is just for the poor old exporters.
Collecting money from the Western Union office you hope they have plenty of 1,000 peso notes – it is the largest denomination and is worth about £2.50. I once got paid in 100 peso notes and had to change them at a bank. The government refuses to issue higher denomination notes because that would be to admit that there is 100% inflation. They also want people to pay by card in order to collect all the tax.
I leave my apartment to have breakfast, which is a coffee, two croissants and a fresh orange juice that will cost me £2.70, and the bus ride will cost me 16 pence. I have booked dinner in ‘La Carnicería’ a steak restaurant in the Calle Thames to say goodbye to a Brazilian friend who works with the deaf amongst the indigenous population – yes, altruism exists.
On the streets of Palermo I encounter ostentatious wealth cheek by jowl with abject poverty. There are shops selling designer clothes at European prices – though you can buy your Levis in instalments – whilst men, sometimes whole families, push carts along the street collecting recyclables. You see them reaching into garbage containers. The government promises to raise pensions and the minimum wage for Christmas, but it won’t keep up with inflation, which, as they say here, goes up the stairs whilst the salaries go along the street.
Strolling down the Calle Alvear in wealthy Recoleta I pass a camera crew outside a luxury hotel waiting to catch a glimpse of Ricky Martin. The Stones stay round here when they visit BA. It is reminiscent of Paris, but twenty minutes away on the other side of the tracks is a ‘villa miseria’ (or just ‘villa’), a slum of illegally constructed buildings controlled by gangs.
I am going home soon, but I will miss this place. Despite the challenges the Argentinians are wonderful stoical people and BA is actually a very safe city – even the slums are nothing like the favelas of Brazil, but walking around the city and gazing up at the splendid buildings and then looking down at the beggars and the garbage collectors in the street there is always that sense of what once was. Argentina is a dysfunctional dystopia of a country rather like UK half a world away. It should be like Australia, but corruption and populism have put paid to that. Lessons to be learnt here for Britain.
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