On the economy and the fine art of waiting in line…

Views of the Puerto Madero

I didn’t do my normal amount of research before this trip. Caught up with life and the lure of summer activities, I didn’t read up on my typical pre-travel array of currency, local hotspots, or even a language refresher. Sure, the August crash of the Argentine peso was international news, but it didn’t occur to me that it’d play a greater role than giving me more peso for my dollar. Then, a day before I was scheduled to travel, I did a quick check on some travel advisory boards and realized that I couldn’t follow my normal currency routine in Argentina. I quickly ran to the bank to retrieve more US dollars, then set about giving myself a crash course in the Argentinian economy.

I won’t bore you with everything I learned, but the short version is that Argentina once had a strong and prosperous economy in the early 1900s, but has “spent more time in recession than almost any other nation” since 1950. Over the past year, inflation averaged about 55%, while incomes haven’t risen to adjust to the higher prices. Understandably, this has contributed to a high rate of poverty with a third of the country’s population living below the poverty line (and as much as 41% just in Buenos Aires). In August, after the current president lost in the presidential primaries, the value of the Argentinian peso crashed and the government is currently scrambling to stabilize the economy. It’s now also at risk of defaulting on its latest loan from the International Monetary Fund (IMF), which was the largest economic bailout in IMF history. 

The Kirchner Cultural Center

While I empathize with the plight of those who must live with this economic instability, I’m acutely aware that its impact on me is minor because I’m a foreigner with access to a strong currency. However, a few of those minor impacts are quite noteworthy. Take, for example, the ATMs, which are my normal method of getting cash when I’m abroad. At the moment, the amount you can withdraw from an ATM here is restricted to an unusually low amount—despite multiple attempts, I’ve been unable to get more than $4000 pesos (approx $73). In addition, every withdrawal has an unusually high fee of $6 to $7—if you’re removing the maximum, that’s about 10%. When you factor in the fee, plus any fee that your own bank applies, this makes the ATM one of the lowest exchange rates you’ll get, which is exactly opposite of anywhere I’ve ever been (and precisely why I brought more US dollars to exchange while I’m here).

…which leads me to another notable difference: the line at the bank, where I went to exchange my USD. While lines don’t seem to be an unusual phenomenon in Argentina, you can just imagine how being in the midst of an economic crisis where the government is placing restrictions on money might affect the lines at the banks. There’s a bank near my apartment and I noticed the line beginning to form 90 minutes before opening time. By the time I got there, it was long enough to make me thankful I had a few hours to kill. I will say this about Argentinians: they know how to wait in line. It’s not like Greece where it’s a free-for-all, or like Americans at a Walmart on Black Friday. Here, people are calm and polite. No one pushes ahead, no one tries to cut in, and when the bank opens and there’s an opportunity to bolt ahead and grab the first number, no one takes it. The line simply resumes in its previous form until everyone gets a number in their rightful turn. It’s much like being in Japan or Taiwan: orderly. But I digress…after getting my number and waiting an interminable length of time reminiscent of my most haunting DMV memories (in truth, it probably wasn’t all that bad, but to me, ‘waiting time’ is like ‘football time’: long), I was finally called up. I’m informed that I can only exchange $1000 USD per month and have to sign paperwork to agree to this, after which I’m allowed to exchange my cash. So, not only is the ATM restricted, but the amount I can exchange in cash is also restricted. It makes me wonder how expats navigate all these restrictions.

Aside from the act of getting money, the other noteworthy impact is, of course, the inflation itself. I’ve read that the inflation has become so bad that some large supermarkets have installed electronic price tags so it’s easier to keep up with the frequent price changes. Of course, I haven’t been here long enough to notice how prices change over time, but I do notice how it seems unevenly distributed. For example, many grocery items are “normally” priced—keeping in mind that to an American, what seems “normal” to me is quite high to an Argentinian who makes a fraction of our income—whereas things like an Argentinian-produced generic cold medicine is three times the price I would pay at home.

Other than these unique tidbits, my first 10 days in Argentina have been a bit rough, namely due to a virulent cold for which I needed that medicine, and which seems to still have its claws in me. However, despite my cold, work is chugging along as normal and I am enjoying the gorgeous spring weather and this beautiful city. More on that to come.