Travelling Light : Argentina Plays By Its Own Rules

A visit to a country with striking similarities to New Zealand, but vastly different policies
by Marc Thornley
images by Amy Vinicombe

Recently, John Key travelled to the large and very culturally diverse territory that is Latin America. The countries that Key and his delegation chose to visit read like a list of the emerging nations in the region – with the notable omissions being those that had made alliances with the revered, recently deceased leader of Venezuela, Hugo Chavez.

Countries like Ecuador, Bolivia and Argentina whose leaders have strengthening economic ties with the progressive leftist policies of Chavez’s Venezuela were spurned. Some journalists in New Zealand highlighted John Key’s decision not to attend the funeral of Hugo Chavez. But was the exclusion of Argentina in particular (from Key’s travel schedule) something of a missed opportunity? After all, Argentina has a similar agricultural base of beef and dairy farming as its primary economic exports and – according to the MFAT website – New Zealand has over $NZ200 million invested there, and annual trade between the two countries is estimated to be worth $NZ113 million a year.

Argentina left a lasting impression on me after travelling through it for over six weeks. As someone who found so many cultural, social and economic comparisons with New Zealand during my travels there, perhaps the Chavez funeral was not the only thing missed on our Prime Minister’s Latin American travel itinerary. This article will look at some of the redeeming features of Argentina as a place to visit as a tourist, whilst also delving into some of the differing perceptions and views about their current economic path.

The Football Gods of Messi and Maradona. This is the home of Lionel Messi, arguably the best footballer currently playing the game. A country where his predecessor Diego Maradona actually has a church dedicated to him – and in Bariloche, there is an empanada store in his honour, with video highlights of his illustrious career. This passion for football is something that goes far beyond even the obsession with rugby here in New Zealand. And that word “passion” is not only synonymous with Argentineans, but with all of Latin America – from the US-Mexico border down to Ushuaia at the bottom of the world. Yet during my travels, nowhere was it more evident than in Argentina.

To get an idea, one only has to ask an Argentinean what is it they like or dislike about their country? The response will usually come with more fervour and emotion than you would expect from Mel Gibson discussing the finer points of Passion of the Christ. And if you want that passion turned up a notch simply ask an Argentine about Peron (Eva or Juan Domingo) or the ‘86 Football World Cup, and you will be likely to encounter the fire that burns in the belly of this most beautiful of countries. Another example of this rich football history is enshrined in the well-known Buenos Aires suburb of La Boca. To talk of football there is to discuss the essence of life itself. Most peoples’ lives revolve heavily around it – so much so that when La Boca played a pivotal game in the Copa America, the Portenos were swarming around any television they could find, and people flooded onto the street to see their local heroes do battle, in what one local described as “War!”

However, when we crossed the border of Argentina there had been only a peaceful chill in the air. The bus trip from Puerto Varas (Chile) to Bariloche had been a breathtaking ride up into the heights of the Andes. Although it was autumn there was still an abundance of snow at the top of the hills, and the first views of the Lake Nahuelhuapi offered a rich baby blue not dissimilar to the blue of the Argentinean flag. On arrival in Bariloche, this lakeside city with snow capped mountains on the other side of the lake was reminiscent of the views in Queenstown. The infrastructure of the city suggested a more ascetically pleasing European style, with stone cobbled roads and local residents sporting the latest of the winter clothing fashion you’d expect to see from a high end ski shop. Clearly, some Argentineans hadn’t suffered greatly from the economic collapse of 2001.

Buenos Aires and the heart of Argentine culture. For most visitors to Argentina, the main drawcard and epicentre of all things Argentinean is the capital, Buenos Aires. Of the over 40 million Argentines living in the country 13 million live in the greater Buenos Aires region, with the next largest city having fewer than 2 million residents. Plaza de Mayo – situated in the heart of the city – is where you’ll find the best in colonial architecture, and a city layout that makes it easy to orientate yourself from the inside-out. Casa Rosada, which is situated in the middle of this mega-city has been a setting for some of the most gripping political theatre of the 20th century. It was from here in the 1950s that former President Juan Domingo Peron made a speech declaring the building open to all Argentines, in front of a huge crowd of supporters at Plaza de Mayo, thereby igniting hope for greater transparency in a government that had previously been a military dictatorship during WWII.

In a country that has experienced much political turmoil in the past – including numerous military dictatorships, the Falklands War (1982), and a large financial crisis in 2001 – the last decade has seen a notable shift in the direction of the political and economic policies that are being implemented.

2001 collapse and economic isolationism While there has been no collapse of the economy on the scale of what occurred in 2001, there are worrying signs to some that Argentina’s current trend towards a more ‘insulated economic policy’ is reducing inflows of foreign capital.

According to the IMF, the official inflation statistics being released by the Argentinean government are much lower than is truly the case. Furthermore, the limits placed by the government on the exchange of Argentinean dollars to US currency has increased the use of the black market US dollar.

But are these examples of economic bravado on the part of the government (and all those ‘falsified statistics’) just part of a self-fulfilling confidence trick, akin to those routinely practiced on Wall Street, where markets fall and rise in response to the smallest moves from the US Federal Reserve. (More than anything, Argentina has been engaged in trying to stem the extent of capital flight.) It would be easy to call the policies regressive, protectionist and many other words that conjure up thoughts of the U.S.S.R, but when the global economic situation is in so much turmoil is it not also logical reaction to protect local jobs, manufacturing, and production?

One noticeable thing about this attempt at economic self-determinism in Argentina is that products such as kitchen utensils, small plastic goods and various household items are usually made in Argentina. Even more surprising was that one gentleman in the southern town of Rio Gallagos bragged to me about the fact that the laptop he was holding was made entirely from this manufacturing town on the Atlantic Coast. A 2011 article in the Economist alludes to this growth in the manufacturing sector, one that has been encouraged by the Kirchner /Fernandez governments (husband and wife) since 2001. Unsurprisingly, such measures are not being seen in a very positive light by the more conventional analysts at the Economist:

“Argentine manufacturers have been booming ever since the 2001 crash. Over most of that period, a cheap peso has ensured their competitiveness. But since 2005 inflation has been in double digits. As the trade surplus has dwindled, Cristina Fernández, the president, has beefed up her industrial policy. According to Global Trade Alert, a database of restrictions on international commerce, Argentina now imposes more trade limitations deemed “harmful” than any country save Russia.”

As a result, there is a sense that Argentina may be developing into a new economic pariah. Yet the question has to be asked whether focussing on manufacturing and industry in your own country (as opposed to outsourcing these jobs) can fairly be depicted as ‘regressive’? In Argentina, this is where the confidence and bravado synonymous with their culture seems to have been spilling over into the economic realm. The economic path being taken there is most definitely against the grain of the policy hegemony that we have come to expect from US and EU policy – but after travelling through that country for the best part of six weeks I’d hesitate to contend that the same ingenuity that sees them succeed on the football field can’t work in the economic realm as well.

Their economic future may be uncertain, but it is one they will chart for themselves, regardless. What is definite about Argentina is the almost suffocating warmth and hospitality of the people. During a stay in Cafayate in the northern altiplano for example, we were welcomed like family and ate bbq roasted chicken, plentiful supplies of roast veggies and salad sufficient to constitute a small banquet. Argentina also abounds with natural attractions such as Iguazu Falls, Perito Merino Glacier, the ski slopes of the Andes….And although mine was a holiday and not a diplomatic visit, I think John Key and our government could benefit from strengthening ties with a country that is also a sporting overachiever, and a quality beef and dairy exporter.

Next time for instance that our Prime Minister is travelling to that part of the world he could learn something from a country that recently managed to buy back its traditionally state-owned petrol company YPF, and that has managed to wipe its debt with the IMF. By the severing of ties between Argentina and such organisations as the IMF, the country is clearly intent on avoiding the threat of more pressure being exerted externally and internally, to cut taxes and social spending. While obviously on a different scale, a visit by a New Zealand PM to Argentina could have been seen in a similar way to Richard Nixon’s visit to China in the 1970s – where bridging ideological differences can trump economic pragmatism and opportunism.

Whether Argentina’s current economic experiment sinks or swims is anyone’s guess, but – to use a sporting analogy – they have taken the ball back into their own court. If that looks more like an intervening Hand of God in violation of the IMF rulebook that prefers to worship the invisible hand of the market, then Argentineans will ask only to be judged by the results.