Thursday, January 31, 2013

Episode 20: The economy pt III: Bank Holiday?

Today is... a bank holiday.

Yes, In Argentina they have a whopping 20 bank holidays throughout the year (up to even 26 if you are Jewish) compared to 8 or 9 in the UK. This equates to over 2 extra working weeks that are 'lost' or 'gained', depending on the way you look at things. However, as always, a bugging economical question comes to mind - how can a country riddled with debt, that has major inflation problems and an economy generally heading in totally the wrong direction afford to let its population take so many days off work?

Firstly, we should explore whether or not a bank holiday is good a bad for a country's economy. This isn't so easy, as there are two sides to the coin. Consider a family sending their washing to the laundrette, only to find its closed on the bank holiday - well, they would most probably send it the day after, thus having no impact. Alternatively, consider all of the restaurants in the city financial district - whilst the workers will come back the next day, the bank holiday completely wipes out one day of revenue. In the same way, those working inside those financial offices will have lost a day's worth of revenue for the firm (unless they have anticipated in advance by working overtime etc)

These examples can be applied to a range of other situations. Furthermore, families also tend to use bank holidays for leisure activities. This, then would be good for the economy as cinemas, attractions, theatres and restaurants all reap the benefit - however does this trip now to the local bowling alley mean that Saturday night will be a quite night in front of the TV instead of going out to eat?

Thus, this isn't such an easy question. The Centre for Economics and Business research in the UK (admittedly) recently found that each bank holiday costs the economy £2billion, or more importantly 0.15% of GDP. It may not fully translate, but lets assume this percentage is the same in Argentina - and therefore that 20 bank holidays mean a loss of a whole 3% of GDP.

In a world where most countries are hovering around 0 growth, and where public confidence is destroyed if growth drops even just slightly below 0 ('recession'), is a 3% difference wasted on bank holidays? Either way, I'm not complaining - at least it balances out the meagre 14 days of holiday we get a year!

Wednesday, January 23, 2013

Episode 19: The Falklands

3 weeks ago, the Presidenta of Argentina, Christina Kirchner, published an open letter to David Cameron in the UK press regarding the return of the Falkland Islands (las Malvinas). Its quite short, I suggest you check it out if not just for the pure audacity of the method of publication.




So, what is this all about? Well, the UK has claimed sovereignty over the Islands since the late 1600s, but in 1982 tensions escalated and Argentina invaded - leading to the Falklands war in which around 700 people died (70% of those members of the Argentinian military). The reason they ended up invading was, ultimately, because they thought the Islands were theirs and didn't think the UK would want to/would have the resources to retaliate.

Why, then, has it flared up all of a sudden? the answer, it seems, is the black gold that is petrol. There have been a large number of potentially large oil field finds in the last few years that have seen the potential value of owning this land skyrocket, especially for an economy(1,2) so troubled as Argentina. The Argentinian Foreign Office had this to say: "The exploitation of fishing and hydrocarbons without permission in Argentine waters, usurping goods that belong to the Argentine people, not only escalates an unnecessary dispute but carries environmental risks"

Well, before I continue, let us look at a map.
                                     


The Falkland Islands are right next to the east cost at the bottom of Argentina (the green country shown in the bottom left) - a respectable 7864 miles from London, England. So surely they should be Argentina's, right?

Well, perhaps - but not in today's money, especially if we consider that Argentina only achieved Independence from Spain in 1816 and the Islands were uninhabited when discovered by Europeans (well, the French). Furthermore, it's not like South America hasn't had European influence in the past - until the early 1800s (around the same date mentioned above), many countries were colonies of Spain/Portugal.

The thing which is most important to consider at the moment, as shown by short and to the point retorts by PM David Cameron, is what the inhabitants of the Falklands actually want for themselves. Well, for starters they don't speak Spanish, use the Pound and the 220v power system (just like in Gibraltar) - and the bottom line is that they regularly state they want to remain part of the UK. Having been accused of colonialism, isn't it odd that the Falkand Islanders may be forced to become part of a nation of which they have no desire?

Personally, seeing as that they have a population of only 3200,it really doesn't seem that this is about the Islands themselves as much about the 'natural resources' that appear to lie in abundance in potential wells offshore.. The UK arrived there way before oil mining existed, and thus this argument doesn't apply to them. The fuss caused by the Presidenta is, in my opinion, a distraction ploy from other more pressing socioeconomic issues - and, to be honest, I think the general population here see through that. The same, for the sake of fairness, could easily be said about David Cameron.

Although, on the other hand, it is obvious that having lost a not insubstantial amount of soldiers (by war standards) in a fight they didn't win, this will always be a difficult subject and that I am merely scratching the surface. Do I understand where the grievances come from? Yes. Do i sympathise? Of course I do. Do i think that the Argentinian Government will act on their emotions? Perhaps, but it wouldn't be wise...

Thursday, January 17, 2013

Interlude 13: Tango

Last week was my one of my close friends' birthday, and so i decided to take her out to something I'd been wanting to see for a while: a tango show.

A medium length google search ensued, and finally I settled upon Tango Porteño. This is because it looked to me that the show was going to be about porteño (a nickname for a resident of Buenos Aires) life, and that that should be interesting.


In general, my investigations revealed, in some districts of the city such as San Telmo on a sunday you can go and watch large gatherings of people improvising tango - these are called Milongas, and are free (if a little...ahem...elderly)
                                        .


Well, back to the show - it was excellent. Normally, my perfect idea of 90 minutes (the length of the show) is watching football either at the ground or on TV - but this was a great (if perhaps infrequent) substitute. Whilst the words in spanish are difficult to make out to a non-native speaker (my friend told me the lyrics were about everyone cheating on one another), the dancing and lighting looked very modern and skilled. Unfortunately I can't really give deep analysis into the meanings behind the specific routines - the people sitting near us were talking about the emotion of the dance in tandem with the rythmn of the music - but as a night out it is essentially a must if you plan to visit Buenos Aires, the home of tango.
Birthday girl




A dark shot of one of the ´figuras´



Tuesday, January 15, 2013

Interlude 12: Crash

***TRADUCCION EN CASTELLANO ACA***


A while ago I said that the driving here is so...finely cut, that sooner or later an accident was bound to happen. However I didnt quite believe this, having never seen an accident in real time (apart from, ahem, having been in one) - until last week, where I saw two.

I guess 'saw' is a loose term, in that the first one happened directly outside my appartment - so when I heard a huge smash and headed onto the balcony, I was able to see everything.

Perhaps I should elaborate a little on the layout of Buenos Aires first - it is like New York in that it was a planned city and is in grids with an intersection every, say, 80 metres. This, added to a lack of samaforos (traffic lights), means that either you slow down quite often or you just proceed at half speed and rely on your trust brakepads to get you out of a sticky situation if need be.

So the first crash was where this method didnt quite go to plan and two cars collided - and because it is all the opposite sides of the road over here, it was on the drivers side. Originally I thought theres no way he could have survived because it was literally him taking the brunt of the taxi, but luckily he seemed to be unscathed - although there was bits of car and glass everywhere.

The second one happened on saturday afternoon, and this time it was miraculous noone died. Again, I use 'saw' in a loose term, because I arrived about a minute after it happened and apparently one of the cars involved drove straight off! The other one, however, was smashed into a side railing (which, funnily enough, is the only side railing i've seen around), sending parts of the metal railing flying into the glass coffee shop entrance and in turn sending the whole 4 metre windowpane of non-shatterproof glass flying into the shop. By the time I'd come back after shabbat had finished and picked up my phone, the glass, metal and car pieces had all been cleared up - but you can see what I mean.

Luckily, because it was 7pm on a saturday afternoon and everyone was at home sleeping in preperation for going out until the early hours, the shop was almost empty. If it had happened later at night, it would have been mayhem inside the coffee shop.

So whats the point in me ranting on about two accidents. Well, for the same reason that I´ve gone to the trouble of translating this article into spanish for any reading Argentinians - because in a country with no seatbelt laws, in a country where zebra crossings are very much optional and in a country where cars regularly create their own lanes centimetres away from others, the next out of body experience is never far away.

Am I going to curb my critiscm and be diplomatic? Not really - if I did, i wouldnt be getting the point across. Having travelled to many countries, the driving here is the worst i've seen and that includes Israel and Rome. Is it the fault of the government? Again, not really - they could clamp down on dangerous driving and tighten up laws but I doubt that would happen and it doesnt really get to the root of the problem - people need to take more care on the road, not swerve in and out of traffic like your playing Crazy Taxi and maybe act like petrol is in short supply even though its cheap out here.

Its not long before a foreign national (ahem) gets injured and a road safety incident blows up..



Next up, something a bit lighter - Interlude 13: Tango.

Interlude 12S: Crash (castellano)


Hace tiempo, dije que el manejo acá es tan…peligroso– y que tarde o temprano un accidente iba a pasar. Sin embargo, nuca lo tomé en serio. Nunca había visto un accidente en tiempo real (aparte de haber estado en uno…!) hasta la semana pasada.


Ponele que la palabra ‘vi’ no es completamente cierto, digamos – como que el primero pasó directamente afuera de casa, así que cuando escuche un fuerte ruido y rajé al balcón, pude ver todo.

Pues, el primer choque pasó donde este método mencionado no funcionó y dos autos choquearon – y como se anda al opuesto a Inglaterra (para referencia), todo pasó por el lado del conductor. Originalmente, pensé que el conductor no pudo haber sobrevivido ni a palos, porque me parecía que el sufrió la fuerza del taxi en sí mismo, pero por suerte parece que salió indemne – aunque habían cositas de coche y vidrio en todo los lados.


El segundo pasó sábado por la tarde, y esta vez era un milagro que nadie se muriera. Uso de nuevo la palabra ‘vi’ flojamente, porque llegue a eso de un minuto después del evento y me dijeron que ¡uno de los autos involucrado siguió sin parar! Dicho eso, el otro obviamente no podía porque había chocado en la barandilla (que, por la casualidad, es la única que he visto por Palermo), enviando partes del metal volando directo al vidrio de la entrada principal de la cafetería (o sea la heladería pero da igual), y a su vez mandó toda la puerta (hecho de vidrio no inastillable) volando dentro del negocio.

Para cuando había vuelto con mi celular después de que del día de shabat terminó, el vidrio, el metal y las partitas del auto se habían removido – pero se puede ir a ver lo que quiero decir.

Por suerte, a causa la hora del día (estuvo a las 7pm) y ponele que todo el pueblo estaba durmiendo en casa en preparación para salir más adelante, el negocio estaba casi vacío. Si hubiera pasado más tarde, habría sido un quilombo adentro de la cafetería.

Bueno – ¿porque sigo con mis broncas/historias? Pues, por la misma razón que he hecho el esfuerzo de traducir todo este artículo en castellano para que puedan leerla algunos argentinos que se encuentren acá – porque, en un país donde los cruces peatonales son ‘opcionales’ digamos,  y en un país donde los autos las crean con frecuencia sus carriles propios justo centímetros de las otras – la próxima experiencia extracorpórea nunca esta  lejos

¿Voy a reprimir a mis críticas y ser diplomático? Realmente no – si lo hice, no se retransmitiría el punto. Habiendo viajado a muchos países, el manejo acá es lo peor que he visto y se incluyen a Israel y Roma ¿Este es la culpa del gobierno? Por la mayor parte no – podrían tomar medidas drásticas en contras al manejo peligroso y endurecer las leyes pero me temo que no pase e igual no llegue al raíz del problema – la gente tienen que tomar cuidado en las calles si o si, y que no hagan los virajes brucos como si estuvieran jugando Crazy Taxi (un juego del Play) y quizá actúen como si el petróleo si escaseara a pesar de que sale barato.

Creo que no tarde mucho antes de que un extranjero se lesione y sufra un incidente en las calles…

El Próximo Capitulo – algo más divertido. Interlude 13: El Tango.


Wednesday, January 9, 2013

Interlude 11: Tourist

Last week, my parents came to visit from England. After having lived here for coming on 4 months, I took the week off work and suddenly I was a tourist again, mixing in with the non-spanish speakers and feeling like it was a totally different city.

The thing about working is that you get into a routine and you cant really go sightseeing because by the time you get home its getting dark, saturday night you go out, get back late and therefore sunday you are exhausted.

Thus, having been a beady-eyed tourist for a week, here are  5 smaller things I havent already mentioned that are worth seeing in this suprisingly enormous city:




1) Cafe con peron - There is a cafe in Recoleta with a statue of former President Juan Peron sitting at one of the tables. In general its just a regular cafe, but if you ever feel you need to have  a conversation with an inanimate object - this is the place to go.








2) The tourist bus!
Yep, the big yellow bus driving all around the city with its terrible audio quality and options for even hebrew and chinese which turned out to just be in spanish anyway. However, if you end up here you can see the major city sights in the 3 hour trip and its massively worthwhile - just never get off or you ll probably never get on again!





3)Tigre/Tren de la costa

We took the (slightly over hyped) coastal train out to Tigre, where I'm told tigers used to be hunted. Nowadays theres a funfair and lots of boats (it looks a bit like a nicer Camden Loch if you've ever been there...) - worth a day trip.








4)Flor de Metal
Located in the north of BA, this interesting piece of architecture opens at dawn and closes at dusk - it can normally be found shimmering away in the sunlight and blinding drivers on the nearby Libertador mega-avenue. A great place to go and drink cold mate on a sunday afternoon.





5)  La Bomba de Tiempo

Ok technically this was just after my parents left, but every monday night on calle Saremiento they have the alternative drum/percussion show by these guys in red. Its in a massive courtyard in the open air, starting just before it gets dark and using the changing daylight to build up momentum. It was, by all accounts, amazing! Someone told me they don't even have a set schedule and just improvise, which makes it all the more impressive. Well worth the 50 pesos entry.

Thursday, January 3, 2013

Episode 18: The Economy pt II - Growth

Its been a while since I last wrote a piece on the economy (here) - so here goes another one about the Argentinian economic growth cycle; after all, everyone loves a bit of medium level economic analysis, right? Right?


Anyway, average wage increases over here are around 25% a year to keep up with inflation. Interestingly, even though the government puts official figures at around 13% (as i mentioned previously) they still encourage such wage increases - as if they indirectly acknowledge the real figures. Furthermore in the last budget they also raised pension payments and increased handouts to the poor (of which, of course, there are many) as the economic climate affected trade with Brazil, their biggest partner. They are also raising taxes by 23%, allowing them to have a projected budget surplus of 0.02% (although, because its in ARG$, it really doesnt equate to much). So, sounds like good news?

Not really. To pay for all this, they are committing the cardinal sin of paying for debt with Central Bank Reserves - think of it as if the Central Bank in England used their gold bars to pay off our debt (under the gold standard back in the early 1900s). The debt, then, is financed using inflation - assuming the debt was taken out under lower interest rates (I can't confirm this, but it is a reasonable assumption) then the government could print more money to pay for it (in addition to taking out reserves), keep the poor happy(ish) and try and retain popularity for the re-re-election next year (one of the main reasons for the protest)

If you couldn't be bothered to read all that, just skip to the bottom line (i.e. here). What's my prediction for the economy of Argentina? Well, in 2001 they had an enormous economic crash - whilst I dont think its going to get that bad in the immediate future, it is certainly heading in the wrong (communist?) direction. Financing debt with inflationary techniques such as printing money is most certainly not sustainable in the long term (google the history of the Rentenmark), and has the added affect of eroding away everyones savings seeing as banks wont offer similarly high interest rates. Strong comparisons are to be made with Venezuela, where street crime and poverty are pretty bad.

So, to link back to previous things i've written - why did the government here need to introduce measures banning the official sale of the peso? To stop the COMPLETE abandonment of their currency due to the inflation already in place by their economic policies.

Am i wrong? Probably. After all, they say an economist can only (sometimes) explain past events - but never predict the future!