Best country to move to when life in Argentina becomes intolerable
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Ries
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We can disagree about how much "socialism" figures into it, but certainly can agree that the government of Argentina has done a crappy job of encouraging exports.
Interestingly enough, there are quite a few potential higher quality, value added manufactured products that Argentina currently exports- usually in spite of government resistance.
while it is dwarfed by ag products, the $5 Billion USD in Autos and Trucks currently exported annually is nothing to sneer at. Aside from Brazil, Argentina has the only significant auto industry in South America. And all of South America buys cars and trucks. This is obviously a market sector the government should be encouraging much more. If I was the president, I would be setting up an electric car research institute and graduate engineering program last week. And scooters and motorcycles, too. (where, exactly, do you think lithium, for batteries for everything from Iphones to Teslas, comes from? ) The chinese are spending 2$ billion to set up a battery factory in Germany right now- getting investment to build a high tech factory that makes high value added products for a growing market is much smarter than selling all the natural resources to foreign companies that will pay pennies a ton for them.
Argentina currently exports a fair amount of finished metals- again, a category of factory absent in Paraguay, or Ecuador- Aluminum, pipes, sheet metal- all are made and exported.
AG equipment has long been an argentine export.
Transformers and motors. Machine and hand tools. Kitchen ware and restaurant equipment. Stainless steel sinks and industrial kitchen and lab fixtures
Glass- plate and finished goods.
Ceramics, from domestic to sanitary.
Medical equipment and tools.
Value added food products- currently, only wine is even considered, but there are all kinds of things that could be exported. Alfahores are already being sold in Florida...
Clothing, shoes, jewelry, raw and finished textiles.
These are just a few of the existing products made here, much of it well above chinese quality, that is currently exported, but could be goosed up into real export powerhouses, particularly for nearby countries, where freight is a factor.
Interestingly enough, there are quite a few potential higher quality, value added manufactured products that Argentina currently exports- usually in spite of government resistance.
while it is dwarfed by ag products, the $5 Billion USD in Autos and Trucks currently exported annually is nothing to sneer at. Aside from Brazil, Argentina has the only significant auto industry in South America. And all of South America buys cars and trucks. This is obviously a market sector the government should be encouraging much more. If I was the president, I would be setting up an electric car research institute and graduate engineering program last week. And scooters and motorcycles, too. (where, exactly, do you think lithium, for batteries for everything from Iphones to Teslas, comes from? ) The chinese are spending 2$ billion to set up a battery factory in Germany right now- getting investment to build a high tech factory that makes high value added products for a growing market is much smarter than selling all the natural resources to foreign companies that will pay pennies a ton for them.
Argentina currently exports a fair amount of finished metals- again, a category of factory absent in Paraguay, or Ecuador- Aluminum, pipes, sheet metal- all are made and exported.
AG equipment has long been an argentine export.
Transformers and motors. Machine and hand tools. Kitchen ware and restaurant equipment. Stainless steel sinks and industrial kitchen and lab fixtures
Glass- plate and finished goods.
Ceramics, from domestic to sanitary.
Medical equipment and tools.
Value added food products- currently, only wine is even considered, but there are all kinds of things that could be exported. Alfahores are already being sold in Florida...
Clothing, shoes, jewelry, raw and finished textiles.
These are just a few of the existing products made here, much of it well above chinese quality, that is currently exported, but could be goosed up into real export powerhouses, particularly for nearby countries, where freight is a factor.
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on the brink
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Clothing and shoes produced in Argentina are not price-competitive with those of similar quality found in the US. Neither are handbags, priced at about twice what they cost there.
Ries
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I can buy a pair of shoes in the USA for $10, or for $1000- I wonder which you are talking about when you say "not price-competitive"?
No, the Argentine shoes will not be price competitive with a pair of shoes made in a 10,000 person factory in China.
The USA does not manufacture "price competitive" products with China, either. And yet, the USA is an enormous manufacturer and exporter.
I cannot find a pair of shoes in the USA to match the quality and price of my handmade shoes from Correa, or my production shoes from Agua Patagona. Instead, I find mass produced chinese shoes, made of pigskin, not cow leather, that are often MORE expensive.
There is a market for Argentine shoes and clothing to export. I know several Argentine designers who do, indeed export, to Europe and Japan. They sell better quality designer clothes. NO, Argentina cannot compete in the race to the bottom with China. Nor can Germany, Italy, the USA, or Japan.
My wife buys handbags from Lopez, or similar qualtity Argentine makers- they are cheaper and better quality than EQUIVALENT products available in the USA. They are, of course, not cheaper than chinese knockoffs of Gucci handbags sold in south Florida flea markets.
If you compare apples to apples, Argentine quality and prices are quite competitive.
In many more categories than just clothing and shoes.
John Lobb shoes in London start at several thousand pounds. Correa shoes are equal quality, and cost several hundred dollars.
I could find you examples in many many different types of Argentine products.
on the brink
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Sorry, but I stand by my post. At equal price levels, there is no comparison in quality. For several hundred dollars I can buy Ferragamo shoes.
Ries
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We will have to disagree. I look online, and Ferragamo mocassins (loafers, in the USA) are $630 US on sale at Bloomingdales. And hand made argentine versions are 1/3 that.
New Ferragamo botas are $1500 USD. $2300 for the patchwork. I havent seen any for that price, even in patio bullrich. Palermo doesnt even have many $700USD shoes for sale, an average price for Ferragamo ladies shoes.
I have been to Argentine wholesale shoe trade shows, visited suppliers of shoe parts and leather, been in small shoe workshops, and know several people who design shoes. The ability for young designers to design and have made a few dozen pairs of custom shoes exists in Buenos Aires, and almost nowhere else in the world. China minimums are often measured by the container load. Here, you could get a single dozen pairs made to order. When Argentine designer shoes manage to reach overseas markets, they sell.
I see this "culo del mundo" syndrome all the time- the idea that everything in Argentina is bad.
But its just not true.
In the 12 years I have had my apartment here, I have hosted many friends from the USA. Virtually every one of them bought one or more pairs of shoes, and found them to be reasonably priced, good quality, and interesting designs. I, personally, own probably a dozen pairs of Argentine shoes, and many more from other countries. They compare favorably in price and quality to the competition. I do not wear Ferragamo, however.
I used to have some Argentine neighbors in Los Angeles who ran a small coffee bar. Every time they went back to Buenos Aires to visit relatives, they brought back a few duffle bags of Argentine shoes, from a designer friend, and sold them in their coffee bar. They sold out quickly, always.
My point is- Argentina already makes, and exports, many things. And in almost every category, from hair brushes to pasta making machines, they old time quality and small family companies attention to detail far exceeds the chinese crap you see on Amazon.
Argentina could export more, and make more good paying jobs, if the government supported the exports.
They do a lousy job of it.
Other countries sponsor trade fair exhibits, work directly to encourage sales, advertise, pay for sales trips, and more.
Argentina just taxes soybeans and hopes to pay the bills with that.
New Ferragamo botas are $1500 USD. $2300 for the patchwork. I havent seen any for that price, even in patio bullrich. Palermo doesnt even have many $700USD shoes for sale, an average price for Ferragamo ladies shoes.
I have been to Argentine wholesale shoe trade shows, visited suppliers of shoe parts and leather, been in small shoe workshops, and know several people who design shoes. The ability for young designers to design and have made a few dozen pairs of custom shoes exists in Buenos Aires, and almost nowhere else in the world. China minimums are often measured by the container load. Here, you could get a single dozen pairs made to order. When Argentine designer shoes manage to reach overseas markets, they sell.
I see this "culo del mundo" syndrome all the time- the idea that everything in Argentina is bad.
But its just not true.
In the 12 years I have had my apartment here, I have hosted many friends from the USA. Virtually every one of them bought one or more pairs of shoes, and found them to be reasonably priced, good quality, and interesting designs. I, personally, own probably a dozen pairs of Argentine shoes, and many more from other countries. They compare favorably in price and quality to the competition. I do not wear Ferragamo, however.
I used to have some Argentine neighbors in Los Angeles who ran a small coffee bar. Every time they went back to Buenos Aires to visit relatives, they brought back a few duffle bags of Argentine shoes, from a designer friend, and sold them in their coffee bar. They sold out quickly, always.
My point is- Argentina already makes, and exports, many things. And in almost every category, from hair brushes to pasta making machines, they old time quality and small family companies attention to detail far exceeds the chinese crap you see on Amazon.
Argentina could export more, and make more good paying jobs, if the government supported the exports.
They do a lousy job of it.
Other countries sponsor trade fair exhibits, work directly to encourage sales, advertise, pay for sales trips, and more.
Argentina just taxes soybeans and hopes to pay the bills with that.
TheDonald
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I did a poor job of clarifying my remarks. Exports in general are not always a great positive for an economy. The fact that Argentina exports a decent amount of automobiles and/or auto parts, steel, is not very constructive for the Argentine economy. Finished metals, oil, undifferentiated products, etc... such exports do very little for an economy. Last I checked, there was no "Argentina Motors."
Argentina may export autos and metals, but it does so as a hub of production or hub of distribution for a foreign firm. That Fiat has a plant in Argentina and exports lots of cars to Brazil, does not do a ton for the Argentine economy. Don't get me wrong; it ain't bad. But it ain't what I'm talking about.
The greatest economic benefit is derived from international champions in highly profitable industries. Think Microsoft, Disney, Coca Cola, Caterpillar, Johnson & Johnson, Visa... these are the monsters of international trade. I mean "monsters" in a positive way. These firms dominate industries worldwide. They have low asset bases, high profitability, huge employments, massive market capitalizations on stock markets, they borrow at cheaper rates than most sovereign governments, they produce enormous tax revenues for Treasury. Exporters such as these are what drives the export engine of an economy.
These firms have enormous "comparative advantages" over international competitors, which makes them hard to beat. They have profitably exported for a long time and probability is high that they will continue to do so. Argentina has no such entities. And since they typically take decades to build, this is why I said there is nothing I see on the Argentine horizon that makes me optimistic in this area.
Argentina may export autos and metals, but it does so as a hub of production or hub of distribution for a foreign firm. That Fiat has a plant in Argentina and exports lots of cars to Brazil, does not do a ton for the Argentine economy. Don't get me wrong; it ain't bad. But it ain't what I'm talking about.
The greatest economic benefit is derived from international champions in highly profitable industries. Think Microsoft, Disney, Coca Cola, Caterpillar, Johnson & Johnson, Visa... these are the monsters of international trade. I mean "monsters" in a positive way. These firms dominate industries worldwide. They have low asset bases, high profitability, huge employments, massive market capitalizations on stock markets, they borrow at cheaper rates than most sovereign governments, they produce enormous tax revenues for Treasury. Exporters such as these are what drives the export engine of an economy.
These firms have enormous "comparative advantages" over international competitors, which makes them hard to beat. They have profitably exported for a long time and probability is high that they will continue to do so. Argentina has no such entities. And since they typically take decades to build, this is why I said there is nothing I see on the Argentine horizon that makes me optimistic in this area.
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Ries
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I am waiting to hear how we magically create those "international champions".
My feeling is you encourage smaller companies to grow.
Many of the really big international companies fill niches that are only big enough for one or two such companies per market segment.
Argentina is unlikely to suddenly hatch a serious competitor to microsoft-
But it could emulate Sweden, for example, which has a small, but active and profitable segment making high value added music software and hardware- a low cost startup industry, which does not require huge investments, but is steadily profitable.
Anyway, the problem I see is that regardless of who wins the election, Macri has spent the $52 Billion- and if you figure in all the government only debt, as Bianca Fernet roughly does in her current column in the Bubble, you see that any politician, "socialist" or not, is going to be short of dollars to pay already agreed upon debts, to the tune of at least $50 billion in the next few years. Add to that the dollar denominated private debt, and we are going to see a huge shortage of dollars available in the central bank to pay existing debt.
Exports, regardless of how much of the on paper profit goes to Fiat, are going to bring dollars into the central bank, which will relieve the pressure on the internal argentine economy. Currency Controls are coming, again, no matter who is in power, simply because the dollars have to come from somewhere. The IMF is not going to inject another $50 billion to pay itself back.
Every additional dollar in exports helps the situation, again, regardless of whose dollar it is. Every employee being paid in Argentina to make things for export helps the situation.
Also, far from all of Argentina's exports are from foreign owned firms. Just as the Starbucks here are locally owned Starbucks, rather than Seattle owned subsidiaries, many firms that are related to foreign firms are more heavily Argentine owned than similar subsidiaries in other countries. And there is a pretty large infrastructure of 100% Argentine owned family manufacturing firms- I met a guy a couple of years ago whose family owns the major pipe manufacturer in Argentina- no foreign owners. He exports. Same with most of the textile industry, the ceramics industry, the aluminum and non-ferrous casting industries, the shoe supply manufacturers, and on down the line. Family owned factories are the norm, not the exception. I know of family owned companies that make office chairs, lighting, silverware, toilets, faucets, wrenches, espresso machines, and dozens more light industrial products, most of which are not made in any other South American country except Brazil.
So I dont see how any and all exports, no matter how small, are somehow bad.
Little things, like the twenty or thirty million dollars a year in safety glass that Argentina exports, would only help matters if the government helped increase those sale to, say, $50 million dollars a year. Uruguay, Paraguay, Bolivia, Equador, Columbia- they all buy safety glass. Right now, some of it from us, some from China. Its heavy, and fragile- proximity and freight costs are significant market advantages- but they require husbanding and encouraging by the government.
Similar markets for other "small" industries in the $20 to $100 million dollar a year range exist, and can be grown.
No, its not the new Samsung- but its the realistic small increments that are going to make the difference, not the wishing for a unicorn.
The last time Kah was in power, soy was at very high prices- that is not the case today, and relying on taxing soy exports, or even doubling them, is not going to fix things, or bring in much in the way of dollars- most soy buyers are Chinese, and dont like to pay in dollars.
My feeling is you encourage smaller companies to grow.
Many of the really big international companies fill niches that are only big enough for one or two such companies per market segment.
Argentina is unlikely to suddenly hatch a serious competitor to microsoft-
But it could emulate Sweden, for example, which has a small, but active and profitable segment making high value added music software and hardware- a low cost startup industry, which does not require huge investments, but is steadily profitable.
Anyway, the problem I see is that regardless of who wins the election, Macri has spent the $52 Billion- and if you figure in all the government only debt, as Bianca Fernet roughly does in her current column in the Bubble, you see that any politician, "socialist" or not, is going to be short of dollars to pay already agreed upon debts, to the tune of at least $50 billion in the next few years. Add to that the dollar denominated private debt, and we are going to see a huge shortage of dollars available in the central bank to pay existing debt.
Exports, regardless of how much of the on paper profit goes to Fiat, are going to bring dollars into the central bank, which will relieve the pressure on the internal argentine economy. Currency Controls are coming, again, no matter who is in power, simply because the dollars have to come from somewhere. The IMF is not going to inject another $50 billion to pay itself back.
Every additional dollar in exports helps the situation, again, regardless of whose dollar it is. Every employee being paid in Argentina to make things for export helps the situation.
Also, far from all of Argentina's exports are from foreign owned firms. Just as the Starbucks here are locally owned Starbucks, rather than Seattle owned subsidiaries, many firms that are related to foreign firms are more heavily Argentine owned than similar subsidiaries in other countries. And there is a pretty large infrastructure of 100% Argentine owned family manufacturing firms- I met a guy a couple of years ago whose family owns the major pipe manufacturer in Argentina- no foreign owners. He exports. Same with most of the textile industry, the ceramics industry, the aluminum and non-ferrous casting industries, the shoe supply manufacturers, and on down the line. Family owned factories are the norm, not the exception. I know of family owned companies that make office chairs, lighting, silverware, toilets, faucets, wrenches, espresso machines, and dozens more light industrial products, most of which are not made in any other South American country except Brazil.
So I dont see how any and all exports, no matter how small, are somehow bad.
Little things, like the twenty or thirty million dollars a year in safety glass that Argentina exports, would only help matters if the government helped increase those sale to, say, $50 million dollars a year. Uruguay, Paraguay, Bolivia, Equador, Columbia- they all buy safety glass. Right now, some of it from us, some from China. Its heavy, and fragile- proximity and freight costs are significant market advantages- but they require husbanding and encouraging by the government.
Similar markets for other "small" industries in the $20 to $100 million dollar a year range exist, and can be grown.
No, its not the new Samsung- but its the realistic small increments that are going to make the difference, not the wishing for a unicorn.
The last time Kah was in power, soy was at very high prices- that is not the case today, and relying on taxing soy exports, or even doubling them, is not going to fix things, or bring in much in the way of dollars- most soy buyers are Chinese, and dont like to pay in dollars.
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db887
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If discussion is about life becoming intolerable due to financial crisis and the dispute turns to:
One might get a pretty good idea who the first victim of such crisis might be. Let's get back on track.
One might get a pretty good idea who the first victim of such crisis might be. Let's get back on track.
steveinbsas
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Given the name of this site, i assume the question is directed toward expats who have the ability to move to another country when life in Argentina becomes intolerable.
With that in mind, I'd be interested in hearing from other expats what it would take for them to be unable to tolerate life in Argentina.
Endless lines and/or not enough cash available at ATM's if the peso really collapses?
Endless lines and food shortages in grocery stores if the peso really collapses?
Endless strikes and protests which seriously disrupt transportation (including the delivery of food and supplies to retailers)?
A massive increase in the level of street crime (including armed robberies in restaurants)?
PS: I'd like to say that I'm not moving either, come hell or high water, but a 2 meter tsunami that flows 2 kilometers inland would change everything.
Fortunately, the tsunami that has been predicted to hit Argentina will not originate offshore..
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