Wednesday, April 12, 2006

Argentina on two steaks a day

The classic begginer's mistake in Argentina is to neglect the first steak of the day. You will be tempted to just peck at it or even skip it altogether, rationalizing that you need to save yourself for the much larger steak later that night. But this is a false economy, like refusing to drink water in the early parts of a marathon. That first steak has to get you through the afternoon and half the night, until the restaurants begin to open at ten; the first steak is what primes your system to digest large quantities of animal protein, and it's the first steak that buffers the sudden sugar rush of your afternoon ice cream cone. The midnight second steak might be more the glamorous one, standing as it does a good three inches off the plate, but all it has to do is get you up and out of the restaurant and into bed (for the love of God, don't forget to drink water). Continue....

Friday, April 07, 2006

Happy days in Amsterdam

Here's an old photo that I just found while I was rummaging around the back of my pute. It's a polaroid photo of myself, Ruari and the barman that was sticky taped for years to the wall of a great little pub in Amsterdam, Entre Nous (something like that!)

Happy Days :) It brings back good memories of living in Holland for four or five months.

Wednesday, March 22, 2006

The reddit experiment

There's a great site on the internet called reddit. I don't know exactly what reddit means but I would hazard a guess that it means something like I read it, you read it, or we read it.

It's fantastic. Essentially what happens is people post articles on the site and other people vote whether they like the article or not (presumably after they read the article). It's much better than any research or focus groups, if people like the story it goes to the top of the list and if people don't like the story it disappears from sight.

Problem is, the people voting. Tech nerds.

If I post a story about Bill Gates it flies up the list, but if I post a story about politics in Argentina it sits there until some tech nerd reads it and then once they realise that it's not a tech story they give it a negative vote. More than 4 negative votes in a row straight after you post the article and it's goodbye story.

I'm going to conduct an experiment over the next week posting articles about Bill Gates and articles about Argentina. Let's see what happens!

Click Here to visit the reddit site - it is cool, even if its full of tech-heads!

I've also turned on my comments for the first time, I'd love to hear what reddit users have to say about the 'tech' focus of the site. Dont get me wrong, I love the reddit site and I love the tech news! But there have been a few times that I've posted articles about subjects that are not tech related and always had bad results and I've also posted subjects that are not US related which have also had bad results.

I'm sure that there are heaps of articles posted on reddit everyday that would be of interest to different groups of people but get trashed (or de karma'd) because of the tech focus of the site. Maybe reddit should look at introducing threads for different subjects. I would love to read stuff about Argentina but I understand that a subject like this would need it's own thread to survive - certainly under the ruthless, and highly effective, karma system!

Feel free to post your thoughts. I'm off to bed now, 11pm in Australia...

Saturday, February 25, 2006

Combating Corruption in Argentina

Here's a little essay that was written by Sara Hernandez, a public policy major who came to Argentina to work for Poder Ciudadano, a non-profit organization linked with Transparency International.

It's more of the same, corruption, but an interesting read nevertheless.

Corruption in Argentina spans throughout it’s political history, especially when referring to the past six presidents that have occupied office since the economic meltdown in 2001. Corruption has become a norm in Argentine culture. It can be seen in every facet of everyday life, whether it be a corrupt judiciary, police force, and vote-buying legislature, or the fact that 75% of Portenos (people who live in Buenos Aires) do not pay the correct bus toll, 70% have illegal cable television or that 90% pay their way out of traffic tickets. When Swiss authorities in 2001 froze $10 million in bank accounts linked to former president Carlos Menem over illegal arms deals, the biggest surprise to the Argentine people was that the sum was so small. More....

Shining a Light Into the Abyss of Chile's Dictatorship

Interesting article in the New Yok Times today about the judge who prosecuted General Augusto Pinochet.

Give this link a go, although you'll probably have to subscribe to read the article: NY Times Article

What caught my eye was the following few paragraphs:

IN the United States Mr. Guzmán also played baseball and football. But his favorite sport was boxing, at least until he returned to South America as an adolescent and discovered that the behavior of his opponents in the ring was different from what he was used to.

"There were a lot of low blows to the kidneys and testicles that went unpunished, so instead of boxing being something enjoyable, with clear rules in which you know where and how to defend yourself, it became a different sport altogether," he recalled. "I liked to play within the rules, and still do today, so I wasn't prepared for that. I valued fair play, and I was shocked to encounter this admiration for cheating, for using one's wits to get around the rules."

Sunday, February 19, 2006

Kirsty & Champ at the Butter Factory

Seeing as I'm not in Argentina anymore I should probably make myself a new blog. Nah. Too hard. Too much effort. Besides, its not like I'm doing anything important. For the time being I'll just keep popping stuff here...

Here's a photo of Kirst and Champ sitting on the pier watching the sun set at the Butter Factory. Nice.

Friday, February 17, 2006

Right here, Right now

Struth, I've been here at my parents place for almost a month now and it's driving me nuts! Not because of my parents, they're ace, but because I'm sitting here 'relaxing' and trying to find something to do.

Both of my parents were salary workers (as the Japanese say) or "lifers" in the new English. Dad worked for the department of defence for years and mum worked as an administrative person at a credit union since I was about 12. They had one job that carried them the whole way through and here I am sitting in a mental stupor trying to decide if my reckless entrepenual lifestyle is worth it and I'm looking at them and saying....ah, ooh, ah

While Dad worked for the government he didn't run the government and mum worked for a credit union but she didn't run the union nor did she really concern herself with the big strategic decisions (but I'm sure that she thought about it).

In one way that's anathema to me, I'm so ambitious that I want to run the show, and in many ways I think that while it's a great advantage to think like that it's also a great loss to me.

My 'salary' folks have built a great lifestyle for themselves, and while I hope that my entrepenual lifestyle hits gold I sit here writing this knowing that if it's an absolute disaster I always have a bed in which I can lay my head.

Just so you can understand the awful situation where I find myself I've attached a photo for you to look at. A salaried life ain't that bad! It took almost 30 years working 'for the man' but this is where they get to spend their weekends. Just imagine how it's going to look when I strike it big!!

Thursday, November 03, 2005

The articles on this site

Since leaving Argentina I've been using this web site to post articles that I agree with about the country.

For some reason or other these articles have clicked with me. There are hundreds of articles about Argentina floating around on the internet and most of them (especially the ones written in English) are very badly researched.

I spent four years in Argentina which was a very long time. The country has so much potential and so many resources that you just want to go urghhhh in that tense angry frustrated way when you read about the populist politics. And I'm not just talking about current politics, I'm talking about politics that started long before Peron.

Unfortunately there is a large part of the population in Argentina who are ill-informed. By no means are they stupid, but if you live in the provinces that only have access to controlled media you don't have a lot of information on which to base your opinions. Most of the newspapers in the smaller provences are kept afloat by government advertising and for these papers it really comes down to either towing the line or go under. And no business, no matter how big or small, wants to go under.

Trust me "machismo" is not a good virtue...

Economic summit set in boom-bust world of Argentina

Here's a great article that I found today while flicking through google news. Argentina is like a great big swinging pendulum and this article sums it up nicely.

By Finlay Lewis

10:16 p.m. November 2, 2005

BUENOS AIRES, Argentina – On the concrete floor of an unlit recycling center in the heart of the capital, hundreds of empty champagne and wine bottles reflect the country's rapid recovery from a deep economic depression that struck five years ago.

But Hector Cortes, who sifts the bottles and other recyclables to provide for his family of eight, is a reminder that the miraculous rebound has left many in poverty.

Cortes, 42, is part of an Argentina that President Bush will not see when he arrives today at the seaside resort Mar del Plata about 250 miles from Buenos Aires for a two-day summit of the Western Hemisphere's 34 democracies. But it is this Argentinian reality that will be on the minds – and the agendas – of many of the Latin American leaders who will sit down with Bush in the next few days.

Argentina's boom-bust swings and its dramatic contrast between rich and poor provide a fitting backdrop for the Summit of the Americas, which is dedicated to creating economic growth and stability more evenly across Latin America.

The country's rapid resurgence from its deep depression has left the gap between the haves and have-nots wider than ever, as well-heeled shoppers, many dressed in the latest European fashions, throng the chic boutiques of Patio Bullrich or along Avenue Alvear. The expensive restaurants of Puerto Madero, catering to Buenos Aires' monied class, flourish as they send their empty liquor bottles off to be recycled by workers like Cortes.

Not far away, junked cars confiscated by the police sit stacked atop one another along a railroad track near Cortes' workplace. Slum housing lines a pothole-filled road that leads to the broad boulevards and magnificent architecture that celebrate Argentina's past as a South American powerhouse.

Although the country's economy is growing at a robust annual rate of about 9 percent, the government is facing a poverty rate of about 38.5 percent. That's considerable improvement over the 58 percent registered three years ago, at the peak of the fiscal crisis, but the current rate is still twice as high as it was in 1994, according to a World Bank Study.

Economists, businessmen and policy-makers here agree that Argentina's efforts to achieve stable, long-term growth and a more equitable society remain in doubt.

"There is still a lot of work to be done," said Martin Redrado, head of the Central Bank of Argentina. "(The country) has had, in a nutshell, a history of overspending and overindebtedness. . . . When you've had the implosion that you've had in Argentina, it takes a decade at least to recover. . . . There are good steps made in the right direction but a lot of work to build solid institutions (to avoid) this back and forth that Argentina has had for the last 30 years."

More fortunate residents of this elegant city might once again be clinking glasses, but many are still struggling to make ends meet. To that end, legions are joining the ranks of the cartoneros – people who collect cartons or cardboard to sell to recyclers. They make as much as $280 a month.

"I had no choice," Cortes said as he surveyed the rubbish linking both ends of the recycling shed. "My family had to eat."

His plight is far from unique.

Many cartoneros come into Buenos Aires at night from the slums to collect the leavings in wealthy neighborhoods, a reminder of the economic forces that a few years ago decimated the middle class, forcing many into poverty.

In some respects, the country, with some of the world's most fertile farmland, has been successful in ridding itself of some ghosts that have haunted it for much of the past 80 years.

Virtually no political expert here thinks the military will snatch power from civilian hands, as has happened more than once in recent history.

And while Argentina might not have conquered the vagaries of the business cycle, it seems unlikely that the country will revisit the hyperinflation of mid-1989, when prices were going up 100 percent a month.

Then-President Carlos Menem took a key step toward recovery in 1991 when he pegged the peso at a 1-to-1 rate to the dollar. By anchoring the Argentine currency to the stable dollar, embracing free trade and by placing a tight lid on government spending, the government reduced inflation to 4 percent by 1994. It also stimulated a flood of foreign investment capital.

But victory over inflation came at a significant cost.

Buffeted later that decade by economic turbulence in Mexico, Asia and Russia, the peso weakened, triggering a run on Argentina's dollar reserves as the government struggled to meet its obligation to preserve a one-to-one relationship between the currencies.

The nation's economy began to shrink, hitting bottom in 2002, when it contracted by nearly 11 percent, according to the International Monetary Fund. The unemployment and poverty rates skyrocketed.

The government responded by devaluing the peso in a way that wiped out the life savings of much of the middle class, forced a massive flight of capital and led to a sovereign default that left many creditors holding the bag. Bloody riots erupted in the capital and elsewhere, pushing the country to the brink of collapse.

Lisandro Barry, Argentina's finance minister during the height of the crisis, winced when asked to recall that moment.

"It was like trying to land an airplane in the middle of a volcano – while it was erupting," Barry said.

One of the victims was Cortes, who lost his job selling fruit and vegetables at Buenos Aires' central market when the crash wiped out the stall's owner. Cortes became one of an estimated 40,000 cartoneros rifling through the unsorted garbage of upscale neighborhoods until a friend introduced him to a gritty, storefront cooperative – El Ceibo – that runs the sorting operation at the shed.

"This was a massive crisis with very large social implications," said Felipe de la Balze, an economist and entrepreneur.

That was underscored by the World Bank study that declared that "few countries in the world have seen such a rapid rise in poverty."

The recovery has been a political windfall for President Nestor Kirchner, who was elected in 2003 with only 22 percent of the vote as a Peronista – a reference to the legacy of strongman Juan Peron, who came to power in 1946 and whose legacy still overshadows Argentine politics.

Kirchner took office just as the economy was set to register two consecutive years of 9 percent growth. His position appears to have been buttressed by his condemnations of an abusive military junta that seized power in 1976, caused more than 10,000 opponents to disappear and then waged war against Britain in a vain attempt to recover the Falkland Islands.

In midterm elections last month, Kirchner's faction tripled its strength in the nation's Congress.

But the election underscores Argentina's failure in recent years to develop a stable, competitive political party system. While there are significant divisions within the Peronist movement, the battle over ideas, programs and a governing philosophy has not yet been fully developed.

Moreover, the years of intermittent crises and military takeovers appear to have taken a psychic toll.

Manuel Mora y Araujo, a pollster, said, "There is a feeling that a crisis is always possible. It can come up again and again. It's kind of Argentina's fate."

Thursday, October 27, 2005

Argentina: the state we’re in

This article was written by Celia Szusterman and published on the open democracy web site.

Argentina’s president, Néstor Kirchner, has gained the mandate he sought in the 23 October legislative elections. But the results also carry a message about the condition of Argentinean democracy itself, says Celia Szusterman.

At the end of 2001 Argentina suffered the most dramatic of the recurrent crises that have plagued the last sixty years. The difference was that this time it was a triple crisis: fiscal, monetary and of political representation. The fiscal crisis was partly solved earlier this year with the unilateral renegotiation of the largest sovereign default in history. A solution to the 25% of “hold-outs” that did not accept the government’s offer is still awaited.

The monetary crisis was solved through a devaluation that left 50% of the population under the poverty line, and salaries at their lowest in over thirty years. That figure is now down to 40%, but more than a million families are kept just above that line via cash subsidies handed out by the state and used as one means of sustaining a formidable clientelist political machine.

Did the mid-term elections of 23 October in Argentina begin to solve the crisis of political representation and of the political system as a whole? Has democratic governance been strengthened as a result? What is indisputable is that the 40% of the votes obtained by President Néstor Kirchner offer him the legitimacy that the May 2003 elections had not. At that time, and as a result of a cunning ploy by then acting president, Eduardo Duhalde, in order to stop his arch rival Carlos Menem (president from 1989-99) from becoming president for a third time, Kirchner came second with 22% of the vote. Menem’s decision to withdraw from the second round required by the electoral law meant that Kirchner became the “22% president”.

Kirchner has been driven by three obsessions since then:

* to consolidate the largest and most prolonged fiscal surplus Argentina has ever experienced
* to abolish the legislation that pardoned the military accused and found guilty of gross human-rights violations during the 1976-83 dictatorship
* to rid himself of his mentor and predecessor, Eduardo Duhalde

The results of the elections indicate that Kirchner has now obtained his third aim. The president nominated his wife, Cristina, until now senator for their home province of Santa Cruz, to run for a senate seat for the province of Buenos Aires, the largest (with 38% of the population), richest (though also with the highest concentration of poor people), and indisputable fiefdom of the most powerful Peronist boss: Eduardo Duhalde.

Her chief rival in the election was none other than Duhalde’s wife, Hilda. Kirchner’s wife (replaced as senator for Santa Cruz by her sister) obtained 45% of the vote to Hilda Duhalde’s 20%. This, the pivotal outcome in these elections, reveals far more than these bare statistics suggest.

A question of Peronism

Néstor Kirchner has emerged as the undisputed boss (the word is not used lightly) of the formidable Peronist, clientelist machine of the province of Buenos Aires. The achievement can be understood by recalling the very identity of Peronism in Argentina and the political culture it represents. The need for such a perspective is reflected in the fact that a day after the elections, many duhaldistas were quoted in the press saying that perhaps it had been a mistake to oppose the president, and that the time had come to join the winner.

This is what Peronism is about. It was born in and from power in 1946, in opposition to other parties that struggled to reach power. Peronism exercises power by using state resources to buy support: provincial governors in federal Argentina are totally dependent on central government transfers. The 1994 constitution stated that within a year a mechanism for transparent and accountable transfers had to be established by congress.This has still not happened more than a decade later; nor will it happen since it is the key tool to maintain power and reward or punish loyalists and “traitors”.

The predominance of Peronism since the return to democracy in 1983 after more than twenty-five years of political instability and successive military coups is at the core of Argentina’s fragile democracy. This fragility no longer generates the risk of military intervention (the ability of the military to operate as political actors was crushed by a combination of popular revulsion at its illegitimate and abhorrent tactics in the “dirty war” era, and its ignominious defeat in the Falklands/Malvinas war of 1982). Rather, it is revealed by a political culture dismissive of institutions, of the separation of powers, of the rule of law – and led by politicians careless of the law.

This systemic fragility is topped by a president who – in quintessential populist style, demonises the opposition – by branding it as enemies of the nation and of the people, engaged in a permanent state of conspiracy aimed at “destabilisation”.

A crisis of opposition

Meanwhile, the collapse of the Radical party since its disastrous administration in 1999-2001 has meant an end to the two-party system. Its decadence had started in 1994, when former president Raul Alfonsín relinquished any oppositional role by entering into a secret pact with then president, Carlos Menem, to amend the constitution.

Menem wanted a re-election clause introduced. In exchange, Alfonsín obtained an increase of senate seats from two to three per province. The constitution indicated that the first two seats would go to the winner, and the third to the opposition. But Alfonsín underestimated the ability of Peronism to manipulate the rules. By inventing new names to fight elections (Kirchner’s own is Front for Victory) there were, by 2003, three Peronist candidates for the presidency, and in 2005 Peronists running under different names will capture the designated three seats in several provinces.

Much has been said about the fragmentation of the opposition. On a national level, Kirchner’s Front for Victory obtained 40% of the vote, non-Kirchner Peronists’ 11%, the Radical Party almost 14%, centre-right parties almost 8%, and different shades of left-wing parties (totally irreconcilable amongst themselves) 27%.

Is there a possibility of the non-Peronist “half” of Argentina finding a single voice to offer an alternative to Peronism? It seems highly unlikely on the basis of existing voting patterns. A look at the electoral campaign will help to explain not just this weakness, but that of the system of representation and the wider political culture.

A problem of democracy

This electoral campaign was marked by a double violation: of the main aspects of the electoral law and of the spirit of the constitution.

The president, although not himself a candidate, mobilised all the resources of the state to fund the campaign of his party and his allies. He travelled 50,000 miles in the last two months to attend public events state-managed by his supporters (including the busing of people, payments of cash and food); he made funds available to provide free washing machines and DVD players to the poorest dwellers of Buenos Aires province; and he constantly denounced the opposition as enemies of “the new Argentina” (while never defining properly his own “project” for the country).

Kirchner’s approach indicates the most striking aspect of this campaign: it was one bereft of ideas or proposals. There was nothing other than individual people, political figures, to identify with. When voices were raised to criticise government policies – their lack of transparency or lack of policies (as in areas of education or law and order) – the government ignored them. It was extraordinary to observe that in a country with 40% of its population living below the poverty line, not once was the issue of poverty discussed.

After twenty-two years of democratic rule, the quality of democracy and of citizens’ rights in Argentina shows worrying deficits. The Peronist political culture and its exercise of power has exacerbated the worst characteristics of a hyper-presidentialist system. The president’s own mode of rule – labelled “style K” – has not contributed to strengthening Argentina’s weak institutions.

“Style K” is not pretty. Kirchner prefers confrontation over negotiation; employs bully-boy tactics when dealing with the opposition, his own minsters, the press or foreign businessmen; refuses to hold cabinet meetings or give press interviews or conferences; and rules by decree rather than with congress. All this can be interpreted as revealing an ignorance of civic culture at best, or a lurking authoritarianism at worst. After all, both were key features of Peronism at its inception.

The result is the insidious propagation of a culture of fear. The hegemonic reflexes of Peronism – armoured by clientelism, nepotism and disregard (if not open violation) of the electoral law – are gathering pace. This situation creates fear that Peronism will turn into an hegemonic party along the lines of Mexico’s PRI.

Already there are signs that Kirchner will use his victory not to implement public policies to sustain the recovery of the last two years, but to start plotting his re-election in 2007. He may even decide to propose that his wife replaces him until 2011, so that he could in principle then return for two more four-year terms. This would mean rule by the Kirchner couple until 2019.

The hegemonic risks are real. But paradoxically the antidote lies in Peronism itself. Being government and opposition, held together by the largesse of the state in the rising phase of an economic cycle, many of those who today are thinking of joining the kirchnerista bandwagon will be the first to abandon it once the going turns tough. To win a presidential election outright, a candidate needs more than 45% of the vote, or, at least 40% with a ten-point difference over the runner-up. Argentina’s presidential elections have never gone to a second round, and it is conceivable that Kirchner will continue to use money to build his personal coalition.

Meanwhile, an opposition gathered behind democracy’s “big ideas” – guaranteeing an open society, alternation in government, a free press, the strengthening of institutions to guarantee the separation of powers, the emergence of a proper system of political parties – has a long struggle ahead. Until then, Argentina’s “low-intensity” democracy in Argentina will remain the arena in which populism thrives.

Thursday, June 02, 2005

Bite my tongue

Ok, ok my last post was a bit over the top but give me a break, Argentina hasn't won anything since Diego provided this country with the hand of god during the World Cup in 1986.

It was heartbreaking watching the Olympics here, everyone in the city was so passionate and while the country won more medals than normal (2 I think) it pales in comparison's with what they should have achieved.

Back in the 1930's Argentina was one of the richest countries in the world, much richer than Australia. Since then it's been all down hill and depressingly it doesn't look like it's going to get better anytime soon.

The current president, Kirchner, has been in power for two years and while he talks long and passionately (almost as long and passionately as Fidel Castro) he hasn't done much in the way of necessary reforms. He has, and for this I´ll give him credit, spent most of his time cleaning up the mess left by the last mob (Menim) who spent the 90's running up the Argentine credit card. Que grande la tarjeta!

But here in Argentina, like Cuba and many other countries (Australia included) politicians survive by blaming the person before. Fidel has Batista and Kirchner has Menim.

It's a real shame that bankers and financial people have such a short memory. They're already sending money back to Argentina. It would be better for this country and better for the Argentine people if the boys in charge didn't have access to outside finance right now. Maybe not industry but definitely the government.

Turning off the money tap would force them to fix two of the main problems here - a rooted tax system and corruption. I agree with bono when he talks about writing off third world debt but Argentina, Brazil and Chile are not third world. (I don´t agree with Bono's incessant determination to wear sun glasses indoors!)

Off the soap box now, time for bed!

We win something!

Ever since arriving in Argentina I've always thought of this country as the middle child, never the best, never the worst, not the most intelligent, not the most stupid. You know, normal middle child stuff

Well finally today I learn that we are the best at something! woo hoo! Argentina has more road deaths per head of population than anywhere else in the world, ha ha! Read it and weep Yankees!

Argentina tops world in traffic accident mortality 2005-06-02 12:46:05

BUENOS AIRES, June 1 (Xinhuanet) -- Some 30 Argentines were killed daily in 2004, registering a death rate of 29.66 per 100,000 people, which topped the world for years in a row.

A report by the Argentine Institute of Highway Safety and Education released Wednesday said that in the year 2004, the South American country witnessed a total of 12,260 severe traffic accidents which left 10,890 people dead.

Economic losses caused by the traffic accidents amounted to 5 percent of the country's domestic national product, including 470 million US dollars in direct economic losses. The total losses were 4.7 billion dollars linked with medical treatment, compensation and losses in production.

The report said that over the past few years, traffic mortalityhas been on a steady rise, with 113,600 people killed from 1993 to 2004, which is equal to the population of a medium-sized city in the country.

The situation in the first quarter of 2005 remained very severe,with 3,933 people killed in 4,566 severe accidents.

Driver fatigue, alcohol consumption and peccant overtaking were listed as major causes for the traffic accidents, the report said.It added that half of the dead on highways were under 30 years old.

Statistics from the World Health Organization said that traffic accidents killed 1.2 million people around the world in 2004, in addition to 35 million people injured.

Thursday, May 19, 2005

Q&A: Argentina's economic crisis

From the BBC website
Wednesday, 12 February, 2003

In the mid-1990s Argentina was lauded as an economic miracle. Today, after four years of stagnation, it represents one of the world's most intractable economic trouble spots. Why? BBC News Online maps the country's fall from grace.

What's the latest?

Argentina has failed to make a debt repayment to the World Bank that fell due on 14 November.
It has repaid the interest - about $80m - but not the entire debt, which stands at more than $800m.

This means the country will be considered to be in default, a situation likely to damage its chances of winning fresh, much hoped for funds from the International Monetary Fund.

Argentina has already defaulted on its debts to private lenders but this looks like the start of a default with so-called multilateral credit organisations.

Analysts say the default's impact on the Argentine economy is likely to be limited in the short term, as too for the economies of surrounding countries with economic worries such as Brazil and Uruguay.

The damage is to Argentina's already battered reputation and to its chances of making quick progress in longer-term restructuring of the economy with IMF help.

How did it all go wrong for Argentina?

In 1991, during Domingo Cavallo's first spell as economy minister, the government decided to peg the peso to the US dollar to restore confidence and combat hyperinflation.

At the time, the strategy worked, but in time Argentina suffered the disadvantages of such a fixed peg.

By linking the peso to the dollar, Argentines adopted a currency whose exchange rate bore little relation to their own economic conditions.

This was a boon in times of hyperinflation.

But when stability returned to Argentina, the inability of its currency to respond proved more of a burden than a benefit.

Argentina had, in effect, ceded control over monetary policy - consider how important cutting interest rates has been to the US and UK this year.

Buenos Aires was left dancing disco when the tango would have been wholly more appropriate.

How did the 1997-99 currency crisis affect Argentina?

While Argentina was able to sidestep the fallout from the Mexican currency collapse of 1995, the so-called Asian currency crisis, which began two years later, provided a more troublesome beat.

When the Brazilian real plummeted in 1999, the peso was unable to follow suit, leaving Argentine exports vastly more expensive than those of its neighbour.

A decline in world prices for farm products, and the global economic slowdown of recent months, only worsened Argentina's problems.

Lower export takings have limited the country's ability to earn the foreign currency needed to repay dollar-denominated debts.

Decling industrial activity has denied the government the cash to balance budgets, while levels of unemployment and "underemployment" top 30%.

How will devaluation help?

The new Argentine government has now devalued its currency and ended the fixed link with the dollar.

The peso has now fallen about 70% against the dollar, making Argentine products much cheaper for those paying in foreign currencies.

It should boost exports and help restore Argentina's foreign currency earnings which may ultimately be needed to pay off its huge foreign debts.

But it will hurt businesses that have invested in Argentina, by making their investments in the country less valuable, and their profits smaller.

And it will be bad news for those people in Argentina who have borrowed money in dollars and are paid in pesos - for example, some small businesses and many with mortgages.

They would then have to pay back their debts in a currency that was worth less than before, so the real value of their debts will increase.

But that could be expensive for the government.

And devaluing the peso could boost inflation, as imported goods will become much more expensive.

What about Argentina's debt?

In the meantime, Argentina's huge debt problems had not gone away.

The country went on borrowing on international financial markets, until debt reached about $140bn.

Now the government has defaulted on this debt, and is desperately negotiating with the IMF in the hope of securing a new flow of funds.

However, the sums Argentina owes are so massive that it is very much in its creditors' own interest to eventually come to an arrangement.

To paraphrase the old adage, if you owe the bank $1,000, it's your problem, but if you owe it $140bn, it's the bank's.

How did Argentina lose its way after being a former economic power?

In the 1930s Argentina was, thanks largely to beef exports, a global power, boasting income per capita similar to that of France.

But from the 1940s the country tumbled from the international stage, weakened first by isolationism, then military rule and internal conflict.

With the crisis-stricken government printing cash wholesale, inflation soared to 200% a month by the end of the 1980s.

Shoppers would pay more for goods in the afternoon than they had in the morning.

How did the country escape that particular crisis?

Carlos Menem, on gaining presidency in 1989, liberalised trade, privatised many state businesses and cut red tape in a bid to foster industrial growth.

The programme initially failed, undermined by concerns over levels of state deficits.

But the decision in 1991 to peg the peso to the US dollar boosted confidence - investors deemed dealing in greenbacks a safer bet.

The move also fostered financial stability - prices denominated in dollars could hardly be adjusted so quickly.

With world economic conditions fair, and seeds of recovery sown, Argentina became locked in a virtuous circle of foreign investment fostering growth which attracted further cash.

From 1991-94, Argentina's economic output expanded by an average of 7.7% a year.

Friday, May 13, 2005

Delish Sopa

While I'm posting stuff on my blog I'm going to bleed my heart out and try to get as much sympathy as possible.

Here's a new graphic that my excellent graphic designers did for free today (they're trying their best to be nice, but I'm sure they have a commercial motive, as everyone does, not that thats a bad thing, I'm sure there's a million books for sale on Amazon that explain why my current drama is the best for an efficient economy, it just sucks when your stuck in the middle of it)

I like this graphic, it's simple. It's a 1 metre x 7 metre banner for the front of the Reconquista store. Unfortunately my new boss, Fabiana, has told me that I can't spend any money until we reach break even. She's hardcore smart.

Really, really struth Buenos Aires

Oh dudes,

Sales this week have been really slow, I´ve been pulling my hair out! I don't know what to do, I can't figure out what the problem is. Is it the food? Is it the pricing? Or is it simply time (or maybe just this week)

Here´s a photo of the excellent advertising that was on the street in March. During this time sales increased by almost 40%, it's just a shame that I can't afford more.

We spent all of our money building the stores and didn't leave enough money for advertising. After working for years in media I always wondered if advertising really works and if the people who gave us money actually got value. Well, after running these ads in the street and seeing sales increase by 40% I can now say that I most definately do!

Wednesday, March 30, 2005

Thinking About Argentina's Economic Problems

This article wasn't written by me, it was written by a guy called Stephen Brown (February 2002) But I agree with it's contents entirely and if I was as articulate as Stephen I'm sure I would have written it myself.

In the wake of the recent meltdown of the Argentine economy, many analysts have promoted the view that the Argentine national character is somehow responsible for the economic and political problems in Argentina. (For example, see The New York Times article, "Argentina Paying Heavily for Squandering Blessings.") Having met many Argentines through tango, however, I must express skepticism about the premise that the recurring economic and political problems in Argentina are the consequence of a flawed national character. They are the consequence of flawed economic and political system that has its roots in Argentina's history—not the Argentine national character.

The continuing inability of the government to live within its means is the principal contributing factor for the current and past economic problems in Argentina. In years past, the Argentine government simply issued money to cover its deficits which led to rampant inflation. In more recent years, the Argentine government borrowed money abroad to cover its deficits.
The inability of the Argentine government to live within its means is not surprising, however. Argentina is a country known for poltical and economic corruption. Government payments help support corruption, and many Argentines organize their economic affairs to illegally avoid paying taxes, sometimes justifying their actions as reducing the support for a corrupt system.
Some may argue that the Argentines have squandered opportunities and are getting what they deserve because they are a nation of corrupt people who repeatedly elect corrupt governments that continue to make Argentina an international basket case. But, these arguments dispassionately dimiss the resulting suffering as being the deserved consequence of human actions. They also for granted a particular answer to the old question, "Which came first, the chicken or the egg?"

Survival in a country that is rife with corruption requires that citizens develop skills that work well within a corrupt system. If police are not paid enough, they will take bribes and work scams. Once individual citizens develop the skills to survive in a corrupt system, however, they will resist its change. Changing the system threatens their survival because it obviates the skills they have developed to work the system. Individuals may recognize that the end of corruption will improve things for their grandchildren's generation, if the individuals and their children are able to survive.

Individuals are also likely to recognize their own individual actions to end corrupt behavior will not eliminate a corrupt system. A person who fails to act corruptly in a corrupt system is simply reduced to poverty. The sum total of individual corrupt actions poses a dilemma for a society. Each person in the society would be better off if all members of the society no longer acted corruptly. Nonetheless, each member of the society has plenty of reason to distrust and disrepect his fellow citizens and recognizes that corrupt behavior will serve himself well whether or not the society is corrupt.

Some might it convenient to compare Argentina to a drug addict who refuses to quit and is unwilling to accept the consequences of his actions. But a country that is in the throes of corruption is not exactly like a drug addict. It is more like a group of drug addicts, none of whom are not allowed to quit using drugs unless they all quit at once. To fully quit, individuals are forced to leave the country or accept a certain amount of poverty for themselves and their children.

In such a situation, it is easy to see the appeal of a "caudillo," a strong man who can be a national savior. The people are looking for someone who can deliver them from the collective madness of a system that does not serve them, yet from which they are unable to quit individually. A caudillo would be the answer to their collective prayer to God...

In my opinion, the Argentine national character is better expressed in tango—a music and dance that is rich and deep its cultural heritage and allows individual expression from the mind, heart and soul... The communication that is possible in this dance tells no lies... As Nito Garcia once said, "Bailas como sos." (You dance who you are.)

Monday, December 20, 2004

My favourite new radio station

I've finally found a radio station that plays all the songs that I love! Not too camp, not too hard, just right :) have a listen

Actually, it is a bit camp, but hey, what do you expect :)

Saturday, December 18, 2004

5 sleeps to go!

It's only 5 sleeps till I jump on a plane and head home for christmas. I can't wait :)

Things have been a little bit tough with the stores and it'll be nice to have a relaxing and re-energetic break with the family. Hopefully I'll come back energised and gung-ho and ready for round two.

Although I did have a ripper of a day today with the kids. It's Saturday and the stores are closed but everyone came to work and we spent the morning buildin, paintin and rearrangin (I'm so clever with words!)

The new chef and his assistant also started today. Fingers crossed that the food will be better!

Wednesday, December 15, 2004

Early Days

I love getting up at 5:30 in the morning, it's nice to experience the tranquility of the city before it turns into absolute mayhem!

Here's a picture I took this morning at the corner of my street. It's going to be a hot and sticky day, it's already 26 degrees and it's only 7am.

Buenos Aires really is a gorgeous city.

Sunday, November 28, 2004

Bomb Scare

I felt like I needed some time away from Buenos Aires so last weekend I flew across the mountains to Santiago Chile and meet up with a Irish guy who Michael and I hiked with at Machu Picchu earlier this year.

What a stupid thing to do, it was the APEC weekend. It was easy enough to get a flight but it took two days on the telephone to get a hotel room.

Security in the city was incredible. At 6pm we took off from Buenos Aires and 20 minutes later the plane turned around and headed back to Buenos Aires with the hosties running through the cabin grabbing all the meals and stuffing them back in the trolley. We later learnt that someone had called through a bomb threat, thankfully we landed safely in BA without our guts sprinkled over the surrounding countryside with the grace of hail.

Here's a photo of us waiting on the tarmac to collect our bags after they were searched by the bomb squad. I was in no rush and quite enjoyed sitting on the side of the runway eating cheese and tomato sandwiches, but gee some people get angry...

Friday, November 05, 2004

Reconquista is open and I'm pooped!

We opened the Reconquista store on Tuesday and I've been working 15 hour days all week.

We've had some good days and some bad but I'm trying not to get too involved in the numbers yet, I have to keep telling myself that right now it's all about the food and the marketing.

This store is in a fantastic location and if I can get the basics right then it will definitely succeed.

Sunday, October 31, 2004

Movie Day!

Sunday is movie day in Buenos Aires and I love it!

Every Sunday for the past few weeks my street has been closed for filming. Today they were filming an advertisement for Diesel clothing so I got to watch all the beautiful people walk around in circles looking pretty. Crazy thing to do at 7am on a Sunday morning but I guess that's what you have to do when you're damn sexy :)

The amount of production work done in Buenos Aires is truly amazing. Everyday streets are closed for filming and last week we had a team of location scouts taking photo's of the interior of the Reconquista store for a possible coke ad.

Angry Oldies

I am completely confused about Argentina's financial problems. All I know is that this country owes the world billions of dollars after running up the credit card during the 90's.

Yesterday the courts ruled in favor of 'pesofication' which is something that happened during the economic meltdown in 2001. At the time the government decreed that all US dollar bank accounts would be automatically converted to pesos at a crappy rate. Thousands of people lost their life savings.

Anyway, yesterday the high court upheld this ruling and the oldies once again hit the street with their spray cans. Here's a photo I took this afternoon of one of the banks opposite the Delish store in Reconquista.

Saturday, October 23, 2004

Cookie Boy Leandro

Here's a photo of my cookie boy Leandro. The food tastes fantastic and it's only taken Leandro a week to settle the kitchen and get it running smoothly.

Reconquista - one week to go!

Isn't she beaut! I stood on the street yesterday (friday) for 10 minutes just watching all the people stop and look inside.

This store is in a really busy part of town and on a weekday you can't move on the footpath.

Delish Menu

Here's some graphics I got today of the Delish delivery menu, just popping it on my blog so I don't loose it.

Thursday, October 21, 2004


There's a webcam in the Viamonte store if you're ever up in the middle of the night and want to have a look.

It's a bit boring, as Moo says it looks more like a security camera. I'll see if I can get Ricky to move it somewhere a bit more exciting.

I'm a happy boy!

I can finally sit down and write something on my blog, my god what a busy week!

I'm damn happy, the first store is going really well and today was our biggest day EVER! Not bad eh to have your biggest day EVER within one week of opening :) Now I just need to have a bigger day than the biggest day EVER.

Right now I'm working on the other store, Reconquista, which opens next Monday. Busy boy!

Happy days :)