Milei’s Austerity Ravages a Factory Hub at the End of the World

[MilHojas]

Milei’s Austerity Ravages a Factory Hub at the End of the World

The island province of Tierra del Fuego is Argentina’s electronics base thanks to a quirk of history. Islanders’ natural resilience is being severely tested by the president’s economic policies.

Archived version

 

[MarshallE]

Assembling electronics in one of the most remote places in the world is an aberration, these jobs are artificially subsidized by everybody in the country paying 2x what the true cost of the product is, it shouldn't have happened in the first place

 

[Rich One]

The Caputo family controls some major companies assembling electronics in Tierra del Fuego

Los Caputo y el negocio de Tierra del Fuego | El establishment, en llamas por la protección del Gobierno a los ensambladores de electro

El ministro de Economía blinda a Mirgor -de su primo Nicky Caputo- y al resto de las firmas con 1500 millones de dólares del Estado en excenciones impositivas. La historia y el lobby de los Caputo para proteger al sector mientras se desfinancia a const...

www.pagina12.com.ar

Google translator

"The establishment is in flames over the government's protection of electrical assemblers
The Caputos and the Tierra del Fuego business
The Minister of Economy protects Mirgor -owned by his cousin Nicky Caputo- and the rest of the firms with 1.5 billion dollars from the State in tax exemptions. The history and the lobby of the Caputos to protect the sector while defunding builders and industrialists."

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[Quilombo]

I know I say this annually whenever we talk about these "factories" in TDF, but I have no sympathy for the Caputos, only the workers.

These are basically, as I have said previously, the IKEAification of Samsung phones. All the parts are made in Vietnam or China or Korea, and they are sent to TDF to be "built" in the same way you "build" an IKEA shelf. This all the while the prices are are insane compared to the US or neighboring Chile.

S24 Ultra, Titanium Gray, 512GB

USA: $999 USD
Chile: $1,259 USD
Argentina: $2,166 USD (256GB model)

Who is the customer? The average Argentine making less than 1K USD/month? This is akin to asking Americans to buy a phone for 10K USD, there's no market at these prices.

 

[QuilmesSlo]

I take no joy in the plight of the workers, but this is what progress looks like.

 

[Johnny]

I take no joy in the plight of the workers, but this is what progress looks like.

Indeed.

 

[Jimbob]

Let the purge begin

 

[FrankPintor]

I'm not going to defend the Caputos and their "guiso" in Tierra del Fuego, but there can be reasons for the state to be present, offer subsidies or tax breaks, in areas where it doesn't make economic sense.

Quite a few countries have duty-free areas, Iquique in Chile, Manaus in Brazil (at least one of my iPhones came from there), Shannon in Ireland, to name a few, generally more remote areas where tax-free commerce and production can take place. One reason for these areas to exist is that the regions they serve would otherwise become depopulated, with younger people leaving in search of opportunity elsewhere.

A few days ago I saw an excellent article on why Aerolineas doesn't have to make a profit. As a national flag carrier, it has obligations to serve (again) remoter areas where it's not economic to fly, and where the LCCs won't go. It's part of what makes a nation, taking care of its citizens and guarding its frontiers by ensuring they're populated, even in the most far-flung areas (of which Argentina has a lot).

Just now, we're seeing how the province of Buenos Aires maintains rural schools in the Parana Delta, with all the necessary infrastructure from KG to secondary school, and even Interisleña "school buses". Otherwise, the delta would be largely depopulated.

Nothing I write should be understood as condoning excessive costs, but there is a more intelligent way to manage this than just stupidly taking a chainsaw to everything in sight.