Stop on Imports...

[syngirl]

Oh yay, Argentina, already generations behind in half their electronics, and already charges 2, 3 or 4x the price for many products, is really starting to clamp down on imports -- for now they are saying delays, not outright bans, but if you already thought prices were high on imported goods, prepare for them to go through the roof: any product that has an "equivalent" produced in Argentina is facing at least delays and somersaults to get through customs.

Bye-bye import foods (or at least be prepared to pay more) -- same with computers, cameras, bicycles (who knew?), luxury cars (which were already far more luxurious prices than in the USA) and god knows what. I know a lot of us on the board have the privilege of escaping abroad every once in awhile to buy products at more reasonable prices, the typical local is going to find it harder and harder not just to indulge their more bourgeois tastes in food, but also to buy that Barbie that their child has been asking for for months....

Article:
http://www.lanacion.com.ar/1357213-el-freno-a-las-importaciones-ya-se-siente-en-la-vida-cotidiana


Google Translate:
http://translate.google.com/transla...nes-ya-se-siente-en-la-vida-cotidiana&act=url

What do people think? I know there are some people on the board in businesses that will end up being directly affected by these policies.

 

[jaredwb]

Oh yay, Argentina, already generations behind in half their electronics, and already charges 2, 3 or 4x the price for many products, is really starting to clamp down on imports -- for now they are saying delays, not outright bans, but if you already thought prices were high on imported goods, prepare for them to go through the roof: any product that has an "equivalent" produced in Argentina is facing at least delays and somersaults to get through customs.

Bye-bye import foods (or at least be prepared to pay more) -- same with computers, cameras, bicycles (who knew?), luxury cars (which were already far more luxurious prices than in the USA) and god knows what. I know a lot of us on the board have the privilege of escaping abroad every once in awhile to buy products at more reasonable prices, the typical local is going to find it harder and harder not just to indulge their more bourgeois tastes in food, but also to buy that Barbie that their child has been asking for for months....

Article:
http://www.lanacion.com.ar/1357213-el-freno-a-las-importaciones-ya-se-siente-en-la-vida-cotidiana


Google Translate:
http://translate.google.com/transla...nes-ya-se-siente-en-la-vida-cotidiana&act=url

What do people think? I know there are some people on the board in businesses that will end up being directly affected by these policies.

Yes, been watching this closely, though it doesn't come as really any surprise since the K's have been killing business every way possible.

I have from some very reliable business sources that a handful of top tier U.S. based companies are going to be leaving Argentina starting at the end of 2011 and into 2012 due to the extremely hostile business environment. They will also be pulling their products from the Argentina shelves (the consumer companies).

IF (and I hope to GOD that it doesn't happen) CFK is re-elected, I wouldn't be surprised if many more follow.

 

[syngirl]

Yeah a lot of high-end clothing brands have been / will be pulling out by the end of the year.

However it does make you question how far it will go -- ie as I've mentioned elsewhere on the board a lot of doctors prefer to operate using USA produced titanium surgical screws instead of the locally made ones (which tend to wear out more quickly, requiring more surgery) -- will this be an option in a few years from now?

My husband's company is a manufacturer of mechanical seals -- a lot of their products are made in USA / Canada and then brought in -- now they are going to be breaking them down into their components to get them through customs, then reassembling here. A lot more work, so costs and lead times will be going up.

Meanwhile there's one Argentine company here that makes the mechanical seals -- they did what a lot of local companies (mostly pharmaceuticals) do -- stole the patented designs and produce them at a lower standard with crappier materials. Yet one of the plants that is owned by Kirchner doesn't buy the local product -- they buy the American product. How's that for being hypocritical?

Watching Chavez at Nestor's funeral, he looked like he has his sights on Cristina... if she gets in again I won't be surprised if we start seeing even more of his influence down here.

 

[gouchobob]

What they are trying is whats called import substitution industrialization. This has been around for a long time particularly in South America. The idea is you create more jobs in the local economy by forcing more things to be produced locally. Critics say it just creates inefficient industries as they are protected from outside competition. Its been tried before in Argentina and other countries usually without much success in the long run.

 

[PhilipDT]

If there was one single thing that stands out as the worst part of living in argentina is the near impossibility of maintaining the same standard of living as you would have in a developed nation for anywhere near the same cost of living.

If you're a big foodie/cook like I, you just have to deal with the fact that many fine ingredients simply do not exist here, at least in a market accessible by consumers. The things that do exist are often absurdly expensive.

And the wine situation makes me want to cry; as much as I LOVE wine from Argentina, my heart belongs to Bordeaux and my dreams to Napa. But not only have they robbed us of all foreign wines here, we can't even catch a break on the local ones which are often sold for 15%+ less in the states.

A "global standard" middle class life is pretty much impossible. To meet the standard you almost have to have an income which would set you in the "upper class."

 

[PhilipDT]

What they are trying is whats called import substitution industrialization. This has been around for a long time particularly in South America. The idea is you create more jobs in the local economy by forcing more things to be produced locally. Critics say it just creates inefficient industries as they are protected from outside competition. Its been tried before in Argentina and other countries usually without much success in the long run.

There's a budding movement in this direction back in the states too.

 

[EdRooney]

Good analysis Bob, but I would add that it might be more appropriately called "import REPLACEMENT industrialisation" in this case because it is a policy implemented in the wake of the capital flight of the 90s which decimated domestic industry. And like it or not, it has pulled a record number of Argentines out of poverty and has provided 7+ years of the most consistent, solid GDP growth in the hemisphere.

 

[ghost]

I have from some very reliable business sources that a handful of top tier U.S. based companies are going to be leaving Argentina starting at the end of 2011 and into 2012 due to the extremely hostile business environment. They will also be pulling their products from the Argentina shelves (the consumer companies).

More that a hand full have already left the building. And aren't just US companies. Add British, Swiss, French and the list goes on.
Argentina is a hostile business environment. Alway was, but now since the K family has taken control it has become impossible.
There are almost zero people in the government that have any true business background and thus view business as the enemy. Even local businesses are brutalized, beat up and punished for being a business. Unfortunately the locals have become accustomed to sub par quality [in every sense] and a lack of variety and very little competition.
So......what will drive innovation, what will inspire the drive to aspire, who can Argies point and say , gee that Juan Gates guy is just OK, I can do better and I have the government pushing forward to success and helping me with capital acquisition.
It's the road to the past and it ends in a pretty sad state.

 

[ghost]

There's a budding movement in this direction back in the states too.

NO! No buds on that movement.

 

[gouchobob]

Good analysis Bob, but I would add that it might be more appropriately called "import REPLACEMENT industrialisation" in this case because it is a policy implemented in the wake of the capital flight of the 90s which decimated domestic industry. And like it or not, it has pulled a record number of Argentines out of poverty and has provided 7+ years of the most consistent, solid GDP growth in the hemisphere.

Well like I said what ever you want to call it has never had any success where been tried previously. They have had good growth but they like to count from a very depressed point, a lot of this was just recovery of the economy to previous levels. A lot of it has to due with growth in Brazil and the high commodity prices the government had nothing to do with. The number of people living in poverty today is increasing daily due to high inflation. Actually more people live in poverty today in Argentina than 30 years ago.