You can say that Argentina has all the ingredients to be a first world country but it is just a hope to be at that point.
For example, since Argentinian security forces don't work as expected, a shopping center has extra security personnel and on each shop there is another layer of security guards.
Not that the poorest of Argentinians aren't in great need of some form of aid like those handouts, but sacrificing the argentinian nation's economic future works out to be a BAD PLAN in the end.
No security - I am not sure what you mean but I think it's irrelevant. If shopping centers need tons of security to function, this is the effect of economic policy, not the cause.
No mobile infrastructure - This is the effect of economic policy, not the cause.
No energy - First of all, wrong. Argentina is rich with natural gas and oil. But policy has screwed it up. Second of all, Japan and Korea. Countries can do just fine relying on imported energy.
Bad education - This is the effect of economic policy, not the cause.
Bad transportation of goods - This is the effect of economic policy, not the cause.
Not too long ago they made it illegal and very difficult for any Argentinean to take out their own money from the ATM. The government is trying really hard to keep everyone inside the country and only spend money within the country.
So for anyone visiting Argentina anytime soon, bring as many US dollars as possible. It almost makes traveling in the country cheap if you black market exchange it. It basically doubles your money.
Right now 1 USD = 10.10 Ar Pesos.
Here are some references:
1 Bus ticket from 1.50 to 3 Pesos.
1 Bic Mac about 45 pesos.
1 Coca Cola 8 or 9 pesos.
1 Dinner in a medium to fancy restaurant 150 pesos (200+ if you drink wine).
If any hacker is in town, let me know.
Bitcoins are free?
If you did BTC -> USD -> Pesos -> BTC and so on, you'd have to get a good price for Pesos -> BTC, and that would hugely surprise me.
But yeah, I'd be totally willing to go on a vacation to Argentina if there's a good way to make money.
The differential has caused all kinds of effects. Plane tickets are hard to come by because so many people take advantage of the spread by flying somewhere, buying goods at official, returning for cash then trading at black market. An investment of as little as 500 usd pays for the trip and then some. Officially this does not exist but searching for mercado lechuga (lettuce market) shows a thriving ecosystem.
Thats one of the reasons we are set to have a 50% inflation rate this year.
My monthly salary has withered away and as an engineer I'm making just over $200/mo.
I have hard times explaining to people how the economy works over there. Most people overestimate how harmful is a regime under foreign currency exchange control. But some metrics like the big mac index (http://www.economist.com/content/big-mac-index) can give a rough idea of what is happening.
We were pissed because we didn't know about the exchange rate issues or the ATM restrictions. We ended up going to a bank every day to withdraw the max on 3 different cards. Probably would have saved about $60/day if we had simply brought a bunch of cash with us.
Unless one entered the taxi with US dollars. Yet in theory the exchange rate should match inflation. To me the joke would only make sense under hyper-deflation.
This joke is essentially the opposite of debt deflation (theory of recessions), as described by Irving Fisher;[1] the theory states that the debtor loses money during deflation, causing repayment problems. In the bus/taxi joke, the rider is a debtor, and the taxi driver is a creditor, with the length of the ride being the term of the loan. The inflation is essentially devaluing the loan.
The real black market is the hidden one, the one where millions are moved every day. Just because members of government banned currency exchange doesn't means they and their friends can't buy dollars or other foreign currency, and they do, sometimes subsidized by the government given that they buy at the official rate which is near half that of the real market rate.
The only thing keeping this disaster from graduating to hyperinflation is the fact that for the first time in 100 years Argentine exports are back in high demand, back then it was the British and French, now is the Chinese and Indians buying Argentine food products. That source of foreign currency feeds the vaults of the central bank allowing the current government to keep this Jenga-economy from falling apart, let alone stuff their pockets.
Ironically 100 years ago Argentina used that money to build its industry, fund the arts, providing top-level education to the population and build its infrastructure, all with the best of the best. Today this new money is being squandered by a government so corrupt it dwarfs even the worst of the early 20th century Argentine elite. The irony is that Argentina is building nothing today, in fact most of the country still lives everyday using the (now decrepit due to age and lack of maintenance) infrastructure created in those days (or with the wealth from those days) meaning this time it will not only repeat the same mistake of depending too much on primary exports but it will leave nothing for future generations.
How can wealth be sapped like this over a few decades? is it because of true malice, or incompetenance?
What would one do to try and prevent such from happening in one's country?
This is obviously not a complete explanation, but it works as a highlight of some of the structural causes of Argentina's situation-
It's called the new oligarchy.
We also have problems buying online, for example, if I buy something on Steam, since the money is going outside of the country, I have to pay 20% more in taxes (I think that's the correct number) although we get the official dollar price.
--SNIP--
According to the latest figures, Argentina's Central bank is losing US$ 47.5 million each day from their international reserves. This is the same as US$ 8 million every hour.
-- SNIP --
But it was too late, I didn't have any cash, and no way for me to get any USD - nor getting the black market rate through my credit card. (official rate is 5.88ars/usd, the blue dolar is ~10).
Luckily enough, I started to buy bitcoins a few weeks ago, and for the same reasons the "blu dolar" exists here, bitcoin transactions in person/cash are really valued here, because you can guess, it is also really hard/expensive for Argentinians to buy bitcoins online (because of the rate/price of doing bank transfers in USD).
So thanks to that, I was able today to arrange a cash transaction through localbitcoins.com - allowing me to sell a few bitcoins at the market price, in Argentinians Pesos, to the "blu rate"!
It's caused a major disruption of commerce here in Uruguay, lots of people go to Buenos Aires to buy stuff (mostly clothing, etc).
My girlfriend studies in Buenos Aires because it's cheaper to take the ferry and pay courses in Argentinean pesos than to pay the course in Uruguay ! (plus, Buenos Aires is a much larger city and has a better selection).
Apparently the biggest concern for the staff working on the casino floor was the Argentinean problem. The would take the biggest credit that they could get (this would create net account liquidity problems for the casino department etc).
I wanted to look up what the deal was and forgot until this article.
For a few months people were going to uruguay and get cash advances on their credit cards, then go back to argentina and sell those dollars. They could make 2-3k pesos per credit card that way, which is basically a minimum wage. In a single day.
Lots of restrictions were made to prevent this, but the issue still applies.
The saddest part of this office is their lack of understanding of economics and Gresham's law. At this pace it is unavoidable that dollars will flee the country because no-one that can keep dollars instead of pesos will.
Honestly, the dollar being 10 pesos is insane. 2 years ago the peso was 4.11 to the dollar. Not to mention that public officials know all the illegal market places and dont shut them down, pointing to a large corruption scheme.
There is also this post with some more details around how the black dollar market works in Argentina. http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollar...
Rather than implementing an honest tax, so that they can pay off foreign debt, the government fixes the exchange rate so that it can pay of its debt for cheaper. However doing so is effectively a hugely distortionary tax on its own citizens.
