Pensamientos de la economía

lunes 13 de agosto 2012

It SNOWED Saturday night!!!! (It’s SO WEIRD that it’s the middle of August!)

And it stopped Saturday morning… but then it snowed again during the day!

(Which means… Luke and I are definitely hitting up Cerro Catedral this week!)

So this is what I’ve learned so far about the Argentine economy.  Well, first of all, it’s unstable.  Punto. 

(In 2002 the peso was devalued, and Argentina defaulted on their US$140 billion debt—the largest default in world history. Heh.)

But anyway.  So the currency is the Argentine peso (the symbol is $, the same as the dollar, which can be confusing).  According to the banks, US$1 = AR$4.5.  However, the black market here is quite extant.  In BA, especially down calle Florida (the main pedestrian/touristy street), there are really sketchy-looking guys that mutter “Cambio, cambio” (“exchange, exchange”) in every corner.  They’ll buy your dollars at a higher rate, like 1:5.5, and I’ve even heard of people getting 1:6 or higher.  But it’s not just the cambio guys that will buy your dollars at a good rate; just ask any Argentine if they want to buy your dollars and chances are they’ll say yes (Walter asked Luke and I if we had any).  Not that I’m normally an advocate for the black market… but if you come to Argentina, bring a buttload of cash.  And don’t exchange it in the banks or official exchange offices (I wish I had known that before I came here…  All I have is my debit card, thus I’m forced to take out money at the 1:4.5 rate). 

This really mesmerizes me.  Yeah, the dollar’s the dollar, there’s no denying that—but por qué is this phenomenon so strong?  Oftentimes in a shop, the vender will offer to lower the price if you pay in dollars instead of pesos.  There are some things you can only buy with dollars.  Or, if you don’t have them, you’re allowed to pay in pesos, but you’re charged at the black market exchange rate, not the lower bank’s.  I gathered in my first month ish here that the Argentine economy is highly dependent on the dollar.  But I didn’t really know completely why.

The other day I asked Walter about it.  He said the Argentine economy relies on the dollar because the dollar is stable.  It doesn’t change.  Yes, the US experiences inflation, but nothing like here.  Nothing like here.  The government will deny how big the inflation rate is (in general there’s a lot of corruption in their government), but it’s evident if you look at how prices have changed.  Here’s an example: My bus ticket from BA to Bariloche was about 650 pesos.  In my guidebook, (which was published only two years ago), it says a ticket should be about 280 pesos. 

Walter told me that people don’t save money here.  Yes, one reason is because Argentines in general are really good at living day by day, in the moment, and not so good at looking ahead to the future.  But another reason is because prices are bound to go up.  It doesn’t make sense to save your pesos, because a year from now they’ll only be worth half as much.  So when people have plata (money), they buy.  However, although prices in pesos fluctuate like whoa, the price in dollars stays constant.  Thus, having dollars is really desirable.      

I just find it so nuts that a country depends so much on another country’s currency.  Walter thinks the same way.  He told me he just wishes Argentina would forget about the dollar and focus on the peso.  Cristina Kirchner (la Presidenta) is trying to cut the focus on the dollar—but, as in all things, there’s a stark difference in political/economic theory and reality.  I don’t know if the dependence will ever disappear, but if it does, it’s sure going to take a long long time.

Prices here in general also just seem really skewed to me. 

English teacher’s salary/hour: AR$35-55

Lunch at the pay-by-weight take out places by Bridge: $10-20 (depending on how hungry I was)

Lunch/dinner at a restaurant: $30+

Bus in BA: $1.10-1.25

Candy bar at a kiosk: $3-7

Bar of chocolate: $12-22

Bus in Bariloche: $3-6

Happy hour drink: 2 for $40

Coca Cola: same as an alcoholic drink, but usually more expensive than beer

Ice cream cone: $8-10+

Divide by 4.5 and you have the approx. equivalent in dollars.  Okay, so a bus ride in BA is 28 cents, and a kiosk candy bar is $1.50.  But that candy bar could also get me from Walter and Miriam’s house to the centro of Bariloche.  Our TEFL group soon came to the conclusion that here, thinking Oh, this chocolate bar is only 20 pesos, that’s less than 5 dollars is not the best idea.  Because we’re not living off dollars.  We’re living off pesos (well… I will be, once I start working and actually making money, heh heh).  And the reality is that 20 pesos is a half hour’s teaching, not including lesson planning.  And 20 pesos could buy me two lunches.  Or a week’s + worth of fruits and veggies.  I’m definitely trying to be frugal during my time here.

But the truth is that I’m loving being in Argentina.  When you’re abroad, you can’t really compare it to your home country.  You just have to adapt and embrace their culture, economy, and lifestyle. 

But okay, I do have to confess a splurge I made the other day: 40 pesos for a jar of peanut butter.