Economic thoughts of Argentina.

Looking back at Argentina, reality does not meet statistics. Having traveled through Argentina, it was important to do a ‘map to ground’ comparison. What does this mean? Basically, reading through statistics, articles and most importantly, conversing with the locals about their situation. The statistics of Argentina does not seem to reflect the actually situation on the ground. Although most of my accounts are based on word of mouth, it does not seem so far fetched from the truth….

Taxes, Taxes and Taxes

The most common way for government revenue is also the most outrageous in Argentina. Speaking to an owner at a hostel, she had to pay expensive rents, with 27% income tax for the people that she hires. Not to mention, there is also a tax for the radio! Imagine that! Paying a tax for listening to the radio! The unions are strong in Argentina, constantly ensuring that they are treated appropriately. The cleaners where a special type of vest to indicate that they are cleaners and they get special benefits too.

Corruption at its best?

Renters have to pay landlords, that is not new, but what about the corruption behind that? Speaking to a renter, the landlord wanted to increase rent by 30%, so she got extremely mad as she was barely making ends meet, she organised a meeting with the higher ups, that is, the few people who pretty much owns the entire area. During the meeting, there was no mention of a price increase, so was the landlord just trying to make a quick buck? Probably. All these unsaid stories go on every single day in Argentina, yet the social capital amongst the population is very strong. For example, the ‘MATE’ culture of drinking tea together and sharing!

An airline got nationalised and any new employee must indicate that they would vote for the current Prime Minister of Argentina, Cristina Fernández. This was a common trend in Argentina. On top of this, inflation was recorded around 11% in December 2012. However, on the ground, speaking to people, it has increased by at least 20%. How will the people survive at this rate?

On a whole, Argentinas’ economy was doing well a couple of years ago, however, there is too much volatility and insecurities for businesses to survive, especially the smaller ones. This could cause brain drain and people will leave the country to find areas where they can actually make a living. Furthermore, labour mobility in the region is highly plausible, as the entire region more or less speaks the same language!