What Would Dollarization Mean for Expats?

[joftoronto]

I lived here through the Menem years. As I recall, Menem wanted the constitution changed to allow him to have a third term. I believe he spent heavily in the provinces to get support for a constitutional change. Also one of the deterrents to attracting investment here is labour law which strongly favours employees, results in very high indemnisation costs and forces many employers to pay employees under the table. When De La Rua took office the economy was unraveling and provinces could not pay their bills, so they began printing scrip which was a way of getting around the convertability law but must have been illegal. These measures were to avoid dealing with fundamental problems such as the high number of government employees and expenditures. If dollarisation were to be implemented it would have to be done with fundamental reforms and it could not be done overnight.

Thank you. That's very informative context. I have a vague recollection of Menem wanting to change the term limits, and the information on the situation under de la Rue with provinces issuing scripts to get around the money printing press solution is very interesting. To me it, it reinforces that the convertibility policy was doomed and rested on a foundation with the strength of a house of cards. 100% agree that absent fundamental reforms, dollarization will not work.

 

[sergio]

Thank you. That's very informative context. I have a vague recollection of Menem wanting to change the term limits, and the information on the situation under de la Rue with provinces issuing scripts to get around the money printing press solution is very interesting. To me it, it reinforces that the convertibility policy was doomed and rested on a foundation with the strength of a house of cards. 100% agree that absent fundamental reforms, dollarization will not work.

Remember convertability was not dollarisation.

 

[sts7049]

Would you guys reconsider moving to Argentina if you're betting on the low cost of living given these potential changes?

I would wait until after the election. see how things look in 2024

 

[toongeorges]

My expectation is that if the Argentine economy is dollarized, prices will become more like Uruguay, except wages will be lower. Argentina may then not be a cheap country for expats anymore, but it could still be a nice place to live if you like the country. If prices become more like Uruguay, Uruguay could gain in attractiveness as well, because the complaint that Uruguay is too expensive compared to Argentina will become less of an argument.

 

[oddDistribution]

true story.

Why has rent gone up so much? I've been planning to pay 400-500 to live in BA, but now I'm hearing a lot higher numbers on this site.

 

[Rich One]

Why has rent gone up so much? I've been planning to pay 400-500 to live in BA, but now I'm hearing a lot higher numbers on this site.

Studios and 1 bdr.rentals in pesos almost no supply. Landlords want protection against 120% annual inflation. Airbnb rentals raise rental rates.

 

[oddDistribution]

Studios and 1 bdr.rentals in pesos almost no supply. Landlords want protection against 120% annual inflation. Airbnb rentals raise rental rates.

Can you get a good price if you pay in dollars?

 

[Rich One]

Can you get a good price if you pay in dollars?

Maybe the only alternative, fewer landlords receiving pesos these days.

 

[sergio]

There is a shortage for Argentines. Owners have to sign three year leases. The peso is too unstable. A lot of owners are holding onto property rather than let them.

 

[sergio]

There is a shortage for Argentines. Owners have to sign three year leases. The peso is too unstable. A lot of owners are holding onto property rather than let it.