What Would Dollarization Mean for Expats?

[Agribotics]

In 1997 I chose to leave the US along with its manufacturing base and decided between Argentina and Taiwan. I spent several weeks in both and found Argentina to be tired and poor. Taiwan, on the other hand, was full of energy and entrepreneurial spirit. Its government, instead of being overbearing and adversarial, was supportive and unobtrusive. I chose Taiwan. It was one of the best decisions I've ever made.

Now, unfortunately, the power-hungry left wing government in China has set its sights on doing to Taiwan what it did to Hong Kong and the good times will soon be over. It's such a shame that, instead of getting its act together in the meantime, Argentina, with all its potential, has only sunk deeper in the muck of bad government.

The real shame though is it would be so easy for resources-rich Argentina to be an economic powerhouse like Taiwan if its government just wasn't so toxic.

 

[Jtee125]

I don’t know if this is the right place to pose this question, though I feel the topic has drifted sufficiently that such a question remains on topic, would withdrawing protectionism policies that Argentina maintains be beneficial?

Please correct me if I’m wrong but I believe that Argentina maintains very strong policies of protectionism. Do those more in the know than I believe that these are overall beneficial, or that such a friction in trade perpetuates the economic problems in Argentina?

 

[Agribotics]

The Taiwan government took in so much tax revenue this year due to the high level of economic activity that it actually gave cash back to everyone, including permanent residents like myself:

With the aim of “sharing the nation’s economic achievements with all citizens, young and old,” each Taiwanese would be given NT$6,000, Su said. . . .

The Ministry of Finance estimated that last year’s tax revenue could exceed the amount budgeted by NT$450 billion after the central government collected more than NT$3 trillion in tax revenue in the first 11 months of last year.

The government would spend most of the NT$450 billion on initiatives, such as closing financing gaps in the Labor Insurance and National Health Insurance funds, and subsidizing electricity prices, the Presidential Office said in a statement after a meeting on Saturday.

The government would also distribute NT$70 billion of the total to local governments, while leaving a reserve of NT$180 billion that would be “shared with the people,” the statement said.

Taiwanese to receive NT$6,000 each from tax surplus - Taipei Times

Bringing Taiwan to the World and the World to Taiwan

www.taipeitimes.com

 

[Ries]

I still want to know why so many immigrants from other South American countries, and from the USA, come to Argentina and start businesses, if its worse than anyplace but the worst country in Africa?
My original objection was to the phrase
"Here, if you produce goods and services that the market wants, you're threatened, extorted, and taxed to the point that you have to move to Uruguay."
especially the part about threatened and extorted, and the idea that Uruguay is better for manufacturing.
I would agree the taxes need reform.
The tax codes here were essentially written by the oligarchs, in response to the power Peron gave the Unions.
The very wealthy here, mostly descended from the spanish land grant families, with a few mid 20th century immigrants thrown in, run everything, and own most of the big business, including the press, tv, utilities, energy sector, airlines, and more.
They also, curiously enough, are often the presidents...
Macri, Bullrich, and, yes, at this point the K's, are oligarchs, with vast structural wealth.
Milei seems to want us to assume he is also, but my guess is he is somewhere between Macri and George Santos in terms of wealth.

I would love to see the tax system shift from taxing 3 or 4 major ag exports, and raw materials, and instead have a broader set of progressive taxes.
I would also love to see the government actually support and encourage the export of the huge range of value added products made here, rather than just focus on soybeans and corn and wheat.
Turkey, for example, has a non-profit Trade Center in NYC that promotes Turkish exports to the USA, including warehousing, logistics, and trade shows.
Argentina does nothing of the sort.
The govermnent could easily help support the logistics and a showroom in NYC for argentine clothing and shoes- right now, individual companies do this on their own, and I have know some who sold in Japan and Paris, for example, and it was a lot of work. But the market was receptive, and the Argentine products, in everything from electrical transformers to pasta making machinery to shoes is all totally saleable, if it wasnt so hard to get it out of the country.

(and, no, I dont live in Retiro- thats where I work. I live in the extreme NW corner of Recoleta, a block one way I would be in Palermo, a few blocks another way, I would be in Almagro.)

 

[SinPulgas]

I still want to know why so many immigrants from other South American countries, and from the USA, come to Argentina and start businesses, if its worse than anyplace but the worst country in Africa?
My original objection was to the phrase
"Here, if you produce goods and services that the market wants, you're threatened, extorted, and taxed to the point that you have to move to Uruguay."
especially the part about threatened and extorted, and the idea that Uruguay is better for manufacturing.
I would agree the taxes need reform.
The tax codes here were essentially written by the oligarchs, in response to the power Peron gave the Unions.
The very wealthy here, mostly descended from the spanish land grant families, with a few mid 20th century immigrants thrown in, run everything, and own most of the big business, including the press, tv, utilities, energy sector, airlines, and more.
They also, curiously enough, are often the presidents...
Macri, Bullrich, and, yes, at this point the K's, are oligarchs, with vast structural wealth.
Milei seems to want us to assume he is also, but my guess is he is somewhere between Macri and George Santos in terms of wealth.

I would love to see the tax system shift from taxing 3 or 4 major ag exports, and raw materials, and instead have a broader set of progressive taxes.
I would also love to see the government actually support and encourage the export of the huge range of value added products made here, rather than just focus on soybeans and corn and wheat.
Turkey, for example, has a non-profit Trade Center in NYC that promotes Turkish exports to the USA, including warehousing, logistics, and trade shows.
Argentina does nothing of the sort.
The govermnent could easily help support the logistics and a showroom in NYC for argentine clothing and shoes- right now, individual companies do this on their own, and I have know some who sold in Japan and Paris, for example, and it was a lot of work. But the market was receptive, and the Argentine products, in everything from electrical transformers to pasta making machinery to shoes is all totally saleable, if it wasnt so hard to get it out of the country.

(and, no, I dont live in Retiro- thats where I work. I live in the extreme NW corner of Recoleta, a block one way I would be in Palermo, a few blocks another way, I would be in Almagro.)

"Here, if you produce goods and services that the market wants, you're threatened, extorted, and taxed to the point that you have to move to Uruguay."

My comment specifically referred to Marcos Galperin and MercadoLibre moving to Montevideo. There has also been a lot of reporting in these past four years, usually while referencing that story, of other high-wealth individuals and companies (and good jobs) also moving to Uruguay.

Some numbers for MercadoLibre:

• Number of employees (as of 12/22): 40,548
• Revenue, June 2023 quarter: 3.42 billion USD
• Market capitalization as of Friday: 62.149 billion USD

If Argentina is ever going to get out of its perpetual mess, along with fixing its myriad enormous problems, it can't be driving away companies like MercadoLibre.

I've read most of your posts on baexpats. I know I'm not going to convince you that I'm right, and you're surely not going to convince me that you're right, so I won't say any more. I've said what I have to say.

I think you'll find that I didn't say you live in Retiro.

Have a good day.

 

[earlyretirement]

I still want to know why so many immigrants from other South American countries, and from the USA, come to Argentina and start businesses, if its worse than anyplace but the worst country in Africa?

Well true many people from South America come here for opportunities. Namely Peruvians and Venezuelans. Lots of Asians have grocery stores, nail salons, etc. But you have to remember that many of these businesses are CASH type businesses. Do you really think they are declaring all the income? Nope. All my point and I think the other poster are making is if all these people declared all that income, there would not only be $0 left. It would be negative 0.

Argentina for them is the land of opportunity and it's better than the crappy situation or dictator in their country. Don't get me wrong. Argentina is a wonderful country. That's not the issue that I wanted to argue. It's just that that tax system structure makes no sense.

I don't know many Americans that have come to Argentina to do businesses. Most of the ones I know are retired, permanent-tourists or digital nomads.

 

[FrankPintor]

the reason that women didnt vote for Milei is that women dont fall for that shit- historically, libertarians run about 75% white men.
[...]
There is no example of a functioning libertarian economic system, even on a scale as small as a small city.
Because it has built in functional contradictions, glossed over by ideological macro "explanations".

Again, has anyone got any study of how women voted in the PASO? This is the kind of thing that exit polls should immediately be able to supply, but here things are different, of course. I would hope that women in particular didn't vote for Milei, but this is Argentina and I suspect Argentinian turkeys are perfectly capable of voting for Christmas.

And yes, the lone ranger thing doesn't work very well in cities, and still less in the 15-minute type of city that Buenos Aires is. Simple, necessary stuff like public transport cause a libertarian cerebral derailment, not to mention more complex topics like education and health.

Though it is interesting to realize how the little sh*ts in Larratas administration have been beavering away to undermine the education system, apart from the pre-school zero-hour system ("CPI"s) with self-employed teachers, they're now establishing teacher training courses unrecognized and unevaluated by any academic authority other than Buenos Aires city, with qualifications useless anywhere else. There's quite a lot goes on behind the scenes.

 

[Quilombo]

Is running a business hard in Argentina? Sure, it's more cumbersome than in other countries, but you also have a system that is great for abusing workers too, and robbing the public blind. Unless you're a supermarket or a gas station or airline, you can basically fleece both employees and customers and make hand over fist while blaming it on inflation/this law or that law/unions/etc.

You pay your workers the salario minimo, or better yet, make them monotributistas, and you index your prices to the blue dollar (but only when it moves up, not down), and you work with people like Massa or the Ks in Tiera del Fuego, like the chamber of tech companies does, to prevent foreign companies from taking Argentine talent not by paying higher wages locally, but doing things like making remote work basically illegal due to all sorts of different rules and restrictions, all while paying everyone as a "junior" that has to speak English and Portuguese while working evenings and weekends.

Look at the price of stuff made here, from domestic materials by employees who are basically serfs and I'm sorry if I don't shed a tear for the guy who built Nordelta, Costantini I think his name is, or that Marcos asshole that "founded" Mercadolibre (i.e. took eBay seed money to make a monopoly here via a shitty version of Amazon).

If you pay peanuts, you get monkeys, I have no sympathy for 90% of businessmen here, and if you can't make it here good luck in countries where you actually have to pay your employees and taxes.

 

[Agribotics]

Dollarization is a gimmick rather than a structural solution to Argentina's economic problems but demonization of the business class as some sort of criminal element isn't even a gimmick. Its just one of those bad ideas that belong permanently in the dustbin of history.

 

[sergio]

Dollarization is a gimmick rather than a structural solution to Argentina's economic problems but demonization of the business class as some sort of criminal element isn't even a gimmick. Its just one of those bad ideas that belong permanently in the dustbin of history.

Why is it bad?