Back Home In Buenos Aires, Where Boom Means Rising Costs
“Vicki and I returned to Argentina last month after a six-month absence,” writes Intrepid Correspondent Paul Terhorst. ” We’re installed in our home and enjoying the spring here.
“My impressions so far:
“The Argentine economy continues the boom, the dollar cost of living is doubling every three years in this country, and street crime has become a bigger problem.
“First, the boom. Argentina enjoys solid growth, perhaps 6% or so. (The government uses phony inflation figures, so it’s hard to nail down growth rates.) Car, appliance, and computer sales are hitting record levels. Restaurants, bars, supermarkets, and shopping centers fill up. By almost any measure, the good times roll. We’ve been living here, or coming here off and on, for some 30 years. I’ve never seen anything like the current prosperity.
“Three sectors fuel the boom. First, worldwide food and grain prices in general and soy bean prices in particular continue to rise. Argentina exports food and cashes in.
“Second, tourists from the United States, Europe, and especially Brazil are showing up in record numbers. Recently we’ve also seen a huge increase in Asian tourism.
“When Vicki and I moved here in 1981 there were only four or five four-star hotels in Buenos Aires, almost exclusively for businessmen. Now there are dozens of four- and five-star hotels, and they often fill up. Argentina used to be considered a backwater, too out of the way for serious tourism. But the world has grown smaller, and Argentina has taken its place on the tourist map.
“Finally, foreigners continue to buy real estate here—farms and ranches, apartments and houses, beach and tourist places. Again, Brazilians lead the way.
“Note that all three growth engines are bringing dollars into the country. This deluge of dollars from abroad means we’re seeing an unrelenting increase in the dollar cost of living. The most recent Big Mac index shows that Argentina now costs about the same as the United States, Japan, and Britain.
“And it’s going to get worse. As I said, I figure the dollar cost of living here doubles roughly every three years. When Vicki and I built a house in the countryside in 2004, the monthly homeowner expenses were US$100. By 2007 they were US$200. Today they’re US$400.
“Similarly, the tiny, family-run hotel we used to stay at in Buenos Aires cost US$10 in 2004. It’s US$40 today.
“The all-you-can-eat restaurant downtown was US$2 in 2004; it’s US$7 today. Empanadas (small meat pies) went from US$2 a dozen to US$10 a dozen over the same period.
“You might say that US$40 for a modest hotel room seems fine. Eating for US$7 seems cheap. However, as inflation is running at 25% to 30% a year and the dollar is held constant, increases are built in. If this trend continues, it means that, in a few years, that tiny old hotel room could be US$80 and that meal could be US$14.
“Earlier this month the government announced that they plan to continue their strategy through 2011 and beyond, allowing only about 5% devaluation. The newspapers call it seguro de cambio, that is, exchange-rate assurance. For an expat living here, this means we’re assured that the dollar cost of living will continue on its current path.
“As I mentioned, my other impression of Argentina on this return trip has to do with crime. This country is suffering an epidemic of it.
“I knew things were getting bad when I came across a new word. A couple of months ago, while traveling in India, I read the Argentine paper online and saw an article lamenting salideras. I had never heard the word salidera. I figured it had to do with salida, or exit, coming out. But I had a hard time imagining how an exit could be dangerous.
“I later found out the word refers to an attack on a person coming out of a bank. A bank cashier can make a quick call on his cell phone when someone withdraws a large amount of cash. Accomplices on the street then track the target, hold a gun to his head, and steal the money.
“In another version, the bad guys pretend to buy your apartment. Argentines do real estate deals in cash, usually with U.S. hundred-dollar bills. So the ‘buyer’ pays you the money for your apartment, then, as soon as you leave the bank or office with the money, the buyer’s accomplice steals it. To avoid such attacks, sellers are now hiring armored trucks to take the cash to their banks.
“In our case, a salidera hit close to home our first day back in the country. Upon arrival in Buenos Aires last month, we stayed in town with friends. That night our friends got a call; there was a salidera at the exchange house where they normally get money.
“Kidnappings, assault and battery, and other violent crimes continue. In my experience there’s rarely more than one degree of separation between any Argentine and violent crime. That is, every Argentine I know has been a recent victim of violent crime or has a close friend or family member who was.
“In a sense the current populist, leftist government encourages crime. The president seems to believe the old Marxist adage that ‘property is theft.’ By definition, then, if you have something or own something, you stole it. Criminals are considered victims of social injustice.
“With this view, the perps become the victims (of social injustice), the victims the crooks (they had the property). Simple.
“Other factors also contribute to the crime wave. The police or their dependents seem to account for a lot of the most violent crime, especially kidnappings. Drug use has gone up, and Argentina has become a transit point for drugs going to Europe. The criminal justice system works hardly at all; most people in Argentine prisons have never even been charged.
“Conclusion? What do we think of B.A. this visit?
“Again, we’re enjoying the economic boom and the springtime in this city we’ve come to know well over decades.
“But I sure wish we could get some relief on the other two problems.”