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This black market the arbolitos (literally "little trees", a joke on individuals selling "green bills" ergo leaves, you get the point) has existed for decades a
by JVIDEL 13y ago
This black market the arbolitos (literally "little trees", a joke on individuals selling "green bills" ergo leaves, you get the point) has existed for decades and comes and goes whether currency exchange controls go up.
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.
- chii 13y agohow does this happen? 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?
- Fargren 13y agoThis has been going on since the sixties. Half a century is not "a few decades". The military regime got entangled with fights against the syndicates (which were a strong political force back then, and are mostly toothless now, with the exception of the truck-transport syndicate), and dismantling the national industries was used as a resource to weaken them. Also, they systematically killed and "disappeared" basically anyone who got into politics that didn't agreed with hem. So they destroyed both the economical and the political basis of the country. The people who took over after them came from what survived their culling: most of the people who could have grown with a different point of view were dead. In that light it isn't that surprising that Menem's government in the 90's followed a similar policy of dismantling the local industry. Under the pretense of amassing funds to fight inflation, he basically sold all what remained of the national industries, creating a nice but unsustainable period of wealth. Following that, De la Rua's government basically did nothing to address the issues, and that's how we got to the 2001 crisis. This is obviously not a complete explanation, but it works as a highlight of some of the structural causes of Argentina's situation-
- JVIDEL 13y agoThe problem is that nothing ever gets done in this country, the Alianza sole purpose was to fight corruption and they didn't do anything, the FPV has been riding the gravy train like the oligarchs did a hundred years ago and just putting patches on everything. The military made a disaster but that was almost 40 years ago. Japan was razed to the ground after a devastating war brought by a military dictatorship and 20 years later they were already considered an economic miracle.
- meerita 13y ago> how does this happen? It's called the new oligarchy.