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Argentina’s government is wooing entrepreneurs with a new law
- edko 9y agoThis sounds great. I think, however, that the big challenge for Argentina is convincing investors that this has any chance of being stable for many years to come. In a country where every new government promises and attempts a radical re-foundation of the State, with no long-term policies and goals agreed to and respected by the whole political spectrum, this may be hard to do.
- deleted 9y ago[deleted]
- owebmaster 9y agoI've been in Buenos Aires for 3 months in the beginning of the year and I can assure you that if this government stays all startups will shutdown due to impossibility to pay electric and other bills.
- edko 9y agoThe good old days of the previous government, where you could have a warehouse of GPUs mining bitcoins with subsidized electrical bills, are sadly over. Now people have to pay for what they use, like in any reasonable part of the world. Or is there any other country that provides electricity for ridiculous prices where all these startups you say will close will move to?
- owebmaster 9y agoWell if you are really asking it, Paraguay has really cheap electricity. They sell back most of what they produce because they don't use it. But no, not needed. If the bill really had to go up, do it progressively, not in one shot so you don't get everybody unprepared. If you think it by another angle, a 700% increase is a hell of a tax for technology companies or garage projects.
- rolodato 9y agoI'm from Buenos Aires and I can assure you that this is outright false. Buenos Aires is the largest population center of Argentina and has had heavily subsidized (e.g. electricity bills of 2 USD are not uncommon) utilities for almost a decade . In the rest of the country these subsidies rarely exist, so everyone else pays a realistic price.
- dep_b 9y agoDid you check your bills lately? It's actually a reasonable price like in the rest of the world but it was effectively raised with 400% or something
- rolodato 9y agoI live outside the city, we had subsidies taken away long before Macri became president. I've actually seen my electricity bill go down because I saved compared to the same period in previous years.
- hobarrera 9y agoMy electric bill has gone up about 500% in the last 3-4 years. It's still very damn cheap, especially compared to what people pay in many more advanced countries.
- luislezcair 9y agoBuenos Aires has cheap electricity. My electric bill is around >2K pesos in summer (I'm from the north of Argentina). I agree with taking out subsidies where the electricity is cheap, but they removed them for everybody from one day to another. There are too many cases of small business with unafordable gas & electric bills.
- owebmaster 9y agoYeah, bills went from 2 USD to 30 USD. And the dollar from 8 pesos to 16. If cheap electricity doesn't help technology companies, I don't know what helps. Sure isn't "entrepreneur's laws", because most of projects fail way before really need it, like when the founders (or wannabe) can't pay their bills (and quit their jobs, if they are lucky to have one).
- dfgonzalez 9y agoWhat? The highest electricity bill I ever paid is 400 pesos (~26 USD) a month. If your startup can't pay that, much less it can pay salaries.
- conanbatt 9y agoPardon me sir, but you are talking out of your ass.
- dep_b 9y agoThe stability of a country like Sweden it will never have. Change is not just a politician's slogan, things really are different every year. Good, bad or just plainly weird.
- edko 9y agoI wouldn't lose hope ("never" may be too strong a word). Sweden itself, 160 years ago, was a poor country. It takes time (not only time, of course).
- chronic7ul 9y ago> Sweden itself, 160 years ago, was a poor country. It takes time (not only time, of course). Actually, in the case of Sweden, it takes oil and gas as primary exports.
- ggambetta 9y agoI'd be skeptical. Hopefully the new government will make things different, but with precedents such as [1] and [2], I'd give them a good couple of decades to prove they're going to remain stable. If you're looking for stability + healthy startup environment + South America, look into Chile. Source: Am from Uruguay [1] https://www.bloomberg.com/view/articles/2015-03-13/now-argentina-can-t-even-pay-bonds-in-argentina https://www.bloomberg.com/view/articles/2015-03-13/now-argen... [2] https://en.wikipedia.org/wiki/Corralito https://en.wikipedia.org/wiki/Corralito
- luislezcair 9y agoOn Monday they issued 100-year bonds that yield nearly 8% of interest. Huge public debt, desindustrialization of the economy and capitals flowing out of the country are some of the causes that led to the Corralito. This is history repeating itself. Bus this new law is certainly good news.
- marcosdumay 9y agoThey sold a bound at 0.05% of face value? That's an incredibly new kind of low. Why would they ever push for that long term?
- tetraca 9y agoIt's a rock and a hard place. They have a deficit, they cannot wring out any more money via taxes, and cutting social spending would likely result in both outrage from the electorate and economic pains due to the policies of the previous administration. So to keep the machine running they're borrowing money, with the hope that pro-business policies will attract the investment needed to be able to make everything ultimately sustainable. At least, this is how it was explained to me.
- marcosdumay 9y agoIt's funny that here at Brazil, every time the government uses this policy we get 1.5-2 years of intense growth, and then a big recession. The recession always lasts until ~1 year after the government start cutting social spending and stop the pro-growth policies. Then we get moderate growth again, as long as the non-pro-growth is maintained. Besides, business don't tend to like most policies called "pro-business". Still what I don't get is why they are selling 100 years bounds at all. The interest rate is quite understandable.
- good_vibes 9y agoHas anyone here lived/worked in Buenos Aires? I've been considering it as a place to check out for an extended period of time in 2018.
- owebmaster 9y agoI've been there in the beginning of the year, planning to stay longterm. Inviable. The cost of living in Buenos Aires skyrocketed these past 2 years (I have a sister still living there since 2010, moving back next month).
- Fargren 9y agoI just left, after having lived there most of my life. I'm not impartial, but my opinion is that it's a fantastic place to live if your income doesn't depend on the country's current position in the wealth/poverty pendulum it's been swinging on since the 30's. AMA.
- tetraca 9y agoI've been considering hanging out in the Southern Cone while doing business remotely in the US as my main source of income. Is Buenos Aires/Cordoba/Mar del Plata worth considering or should I be really looking more into Uruguay or Chile?
- lalanv 9y agoIt depends. What are you looking for when deciding for a place to live? What's important to you?
- tetraca 9y agoDecent internet that would allow me to stream every so often, reasonable variety of food/things to do, milder weather, LGBT friendliness, and cheapness (in relation to living in, say a large city in the American West coast). Also safety to some extent. I could hop to/explore the EU, where I would feel completely comfortable and I could absolutely do with some minor bureaucratic hassle but I would be concerned about being able to working with a US job if I have that marked a difference in time zone (I don't know if that's actually a reasonable concern).
- dep_b 9y agoOne of the reasons tech is doing really well here in the last ten years despite the governments is that you don't need a lot of imports to work on IT except for the computers, the customers abroad are easily reached through internet and also you don't pay export taxes like you would if you would export meat or soy. People are really well educated as education up to a bachelor's degree is completely free. What used to be difficult is getting money into the country, something that sounds as crazy as it really is and all of the different white grey and black exchange rates. I had to send money to a US account owned by somebody that would promise to pay me in pesos here because there just was no other way to do it. That really made me nervous. Also I couldn't pay my bills abroad because I couldn't send any money if nothing was left on my foreign accounts.
- l5870uoo9y 9y agoOn another node, Larry Summers told an interesting anecdote regarding Argentina recently: > In 1900, Argentina was closer to the United States economically than most of Europe is today. Today, we think of Argentina as a poor developing country. Argentine growth only has lagged American growth by 7/10 of a 1 percent over all of that period. So when you get things wrong, when you have dysfunctional governance, it doesn't undo you in a year or five years or even a decade. It does over time. Argentina's "deal-based" system where initiative comes from the charismatic leader have been outperformed by the ruled-based system prominent in US or Germany.
- conanbatt 9y agoArgentina's economic history is ridden with political catastrophes. Even the period of liberalism in the 1880-1920's had plenty of issues: indentured servants, borderline slavery. Workers protests were met with violence and murder by officials. Argentina has had a military coup every couple of decades in the previous century, which included entire presidencies with unelected officials, culminating in a coup that killed between 9000 and 30000 thousand people. The lack of political stability can explain the problems in all other areas, like ineffective justice or economic stability. Not to mention that using a 100 year span, and including germany as an example to follow..
- gozur88 9y agoThe problem with doing business in Argentina is you could have written the title "Argentina's government is wooing entrepreneurs with a new law... this week". Next week? Who knows.
- justboxing 9y agoHow come no-one is talking about safety w.r.t. moving to and living in Argentina? > In the first three months of 2017, there were 77 kidnappings for ransom. Source: [May 2017] - The Numbers And Locations Of Kidnappings For Ransom In Argentina => http://www.thebubble.com/the-numbers-and-locations-of-kidnappings-for-ransom-in-argentina/ http://www.thebubble.com/the-numbers-and-locations-of-kidnap... > From March 20 to March 31, authorities registered at least 16 express kidnappings in the Buenos Aires metropolitan area. According to Clarin, the victims of these kidnappings are of all ages and social classes. Source: [Apr 2017] - Express Kidnappings on the Rise Again in Buenos Aires => http://www.insightcrime.org/news-briefs/express-kidnappings-on-the-rise-again-in-buenos-aires http://www.insightcrime.org/news-briefs/express-kidnappings-... Can someone who lives there throw some light on the prevalence of ransom kidnappings? I read about this a while back, and want to know if it's really a cause for concern for Americans and other foreigners moving to Argentina for work, or is it mostly localized (i.e. political kidnappings / gang related kidnappings) in which case you can be somewhat "reassured" that it may not happen to you.
- santiagobasulto 9y agoI live in Argentina (was born here). I've also lived in USA and other countries. It's hard to describe the situation. I'd be tempted to say that Argentina is rather safe. I've lived here for almost 30 years and I never got robbed. But I got robbed in San Francisco while on vacation for example. It really depends on what you do. If you're walking alone at 10PM in a not-so-nice neighborhood, then Argentina is not going to be safe. If you come from a REALLY safe country where you don't have the "cautious" skills developed, then it's not going to be safe. I know many startup founders in Argentina and Buenos Aires. If you go with the safe options: Buenos Aires city in a nice neighborhood (Palermo, Puerto Madero), then you'll be more than fine.
- conanbatt 9y agoLomas de Zamora and Moron are poor and crime ridden sections outside the city of buenos aires. Its like talking about Detroit or Flynt in the US(or maybe the worst parts of oakland). Buenos aires, specially the startup area (palermo, belgrano, recoleta) do not have such a security problem. Contrary to SF where I've witnessed people shooting up drugs in the middle of market street, harassment by crazy homeless people, car vandalization, fights and police chases. There really isnt a way to statistically answer whats going on with kidnappings, because the official numbers arent in. It is definitely not a day to day occurrence, or something people are worried about.
- forinti 9y agoLatin America needs more integration. None of its markets is very big (except Brazil or Mexico), but together they are huge. It needs to be easier for small businesses to interact and swap money and goods. There are some sectors (automotive comes to mind) where governments set up deals, but for most businesses it's really hard. Not even the mail works well enough.