Wednesday, May 29, 2013

Never-Ending Story? Argentina's Latest Exchange Rate Shenanigans


It’s a topic that never goes away or, at least as long as Argentines seek economic security and their government does everything possible to prevent it, their impulsive urge for the US dollar is unlikely to go away. Recently I wrote about the so-called “Colonia Dollar” and the distortions and inconveniences it had caused in the Uruguayan city across the River Plate but, in the interim, Argentina's government devised yet another one: from this moment on, Argentines visiting neighboring countries will be able to use only a single credit card to withdraw a cash advance of no more than US$100, once every three months. For other countries, they will be able to withdraw up to US$800 per month. They still cannot use their debit cards outside Argentina.
For residents of Colonia and non-Argentine tourists crossing the river, this should simply the process of obtaining cash from the city’s ATMs; the endless queues of Argentines will presumably disappear. At the same time, according to the local press, Argentines have found a new means of purchasing dollars: They can travel to Montevideo, where the exchange house rate (slightly more than eight pesos to the dollar, as suggested in this window on the city's central Avenida 18 de Julio) is less attractive than the cash advance rate (about 6.3 to the dollar), but it’s still cheaper than the so-called “blue” dollar in Buenos Aires (slightly less than nine pesos). The ferry from Buenos Aires to the Uruguayan capital is more expensive and takes longer (three hours in each direction), but Argentines can carry the equivalent of US$10,000 (roughly 52,000 Argentine pesos) without having to make a currency declaration.

For an Argentine saver, that’s a profit of roughly 10,000 pesos less, of course, the cost of the trip, though it’s also a risk as the price of “blue” dollar has dropped in the last week or ten days since the Argentine government proposed a tax amnesty for repatriated overseas funds that opposition forces have denounced as an incentive to money-laundering. That measure is presently working its way through the Argentine Congress, and seems likely to be approved. The consensus, though, appears to be that the government will make every effort to hold down the dollar until after mid-term congressional elections in October. Whether they’ll continue to be able to do so is another issue entirely.

Meanwhile, Uruguayans are taking advantage of their relatively strong currency to purchase Argentine pesos at the “blue” market rate for holidays in Buenos Aires, even though the dollar has been strengthening against the Uruguayan peso (which now goes for 20 per dollar, up around five percent over the past couple weeks). For travelers with US dollars, the Chilean peso has also been weakening and now stands at roughly 490 per dollar). Neither currency, though, remotely approaches the volatility of Argentina’s, given what Buenos Aires Herald columnist Andrew Graham-Yooll calls a “currency exchange process that more than a policy looks like a throwback to the Soviet Union.”

Moon Handbooks Chile, in Saratoga
In just a few weeks – Monday, June 17, at 7 p.m., to be precise – I will offer a digital slide presentation on travel in Chile at Santa Clara Country’s Saratoga Library (13650 Saratoga Avenue, Saratoga CA 95070, tel. 408-867-6126, ext. 3817). Coverage will also include the Chilean Pacific Islands of Rapa Nui (Easter Island) and Juan Fernández (Robinson Crusoe), as well as southernmost Argentina (Tierra del Fuego and the vicinity of El Calafate) that appear in the book. I will also be available to answer questions about Argentina and Buenos Aires. The presentation is free of charge, but books will be available for purchase.

Saturday, May 25, 2013

Declining Dakar: Ecuador Opts Out of Fossil Fuel "Sports"


Several times, in this blog, I have expressed my doubts about the Dakar Rally, an off-road automotive competition that moved to South America in 2008 after terrorist threats in Africa made it impossible to continue on its continent of origin. Since then, the event – whose starting point in my Palermo neighborhood I photographed in 2010 – has aroused objections from archaeologists, conservationist and others, but it’s nevertheless managed to expand from Argentina and Chile to Peru and, this coming year, Bolivia.
Dakar won’t be welcome in Ecuador, though, as its government has rejected an offer by France’s Amaury Sport Organization (ASO) in concluding that Dakar 2014 would cause more damage than it was worth. After the 2013 event, environmental conservation groups in Argentina, Chile and Peru argued that their governments frequently permitted the ASO to ignore their environmental requirements – the Chilean NGO AcciónEcológica maintains that Dakar has destroyed more than 200 archaeological sites but, obviously, the Rally's money and influence have allowed it to continue.

Meanwhile, though, Dakar not only damages the desert environment and archaeological sites, but in the process it also kills and injures people – both participants and spectators. For the long-term health of the deserts and highlands of northern Argentina and Chile, and Bolivia and Peru, and the sustainability of the region’s tourist economy, Dakar’s departure would be a welcome development.

Moon Handbooks Chile, in Saratoga
In just a few weeks – Monday, June 17, at 7 p.m., to be precise – I will offer a digital slide presentation on travel in Chile at Santa Clara Country’s Saratoga Library (13650 Saratoga Avenue, Saratoga CA 95070, tel. 408-867-6126, ext. 3817). Coverage will also include the Chilean Pacific Islands of Rapa Nui (Easter Island) and Juan Fernández (Robinson Crusoe), as well as southernmost Argentina (Tierra del Fuego and the vicinity of El Calafate) that appear in the book. I will also be available to answer questions about Argentina and Buenos Aires. The presentation is free of charge, but books will be available for purchase.

Tuesday, May 21, 2013

Kon-Tiki, On the Screen: Exploring An Ego


As a second-generation Scandinavian immigrant (three Swedish grandparents and one Norwegian), I’ve never felt a strong connection with my northern European origins. Still, I have found the tales of Nordic explorers compelling, most notably Roald Amundsen’s expedition to the South Pole and Otto Nordenskjöld’s research adventures in Patagonia. I’ve never felt quite the same about Thor Heyerdahl’s voyages across the Pacific, for reasons I’ll detail below, but I nevertheless went to see the new Heyerdahl-themed Kon-Tiki movie last Saturday night.
A couple months ago, I reviewed the Chilean film No which, with Kon-Tiki, was an Oscar nominee for best foreign film. Kon-Tiki also has a Chilean connection, in the sense that Heyerdahl fancied himself an expert on Rapa Nui (Easter Island) in his book Aku Aku, but this film is the tale of his audacious 1947 voyage from Peru to Polynesia on its namesake balsa log raft, ostensibly to prove that South Americans settled the Pacific.

Heyerdahl certainly proved it was possible, but that doesn’t mean it happened that way. In the film, at the outset of the voyage, he vainly compares himself with Darwin and, throughout the trip, he continues to showcase an outsized ego even as he concedes, reluctantly, that he could not have saved a shipmate (rescued by another crewmember) because he himself could not even swim. In another instance, he berates an engineer concerned that fiber ropes will not hold the Kon-Tiki together, and tosses potentially voyage- and life-saving wire into the open ocean.

Heyerdahl’s ego aside, Kon-Tiki makes an absorbing adventure story. Handling a crew of half a dozen feisty young men in close quarters, for 101 days on a 4,300-mile (6,900-km) voyage, would have challenged anyone’s leadership skills. While the claustrophobia is palpable, spending so much time beyond sight of land paradoxically made the Kon-Tiki expedition an agoraphobic experience. Add close encounters with storms, whales and great white sharks, and a climactic attempt to surf the coral reefs ringing the Polynesian atoll of Raroia (with a panicked Heyerdahl hiding in the cabin), and Kon-Tiki rarely lacks for excitement (though most of the voyage must have been routine, with dull moments greatly outnumbering the thrills).

For all his accomplishments, Heyerdahl had one undeniable shortcoming: his unwillingness to consider any conclusions other than his own. Simply because he proved it was possible for pre-Columbian South Americans to sail to Polynesia didn’t mean it happened that way – any more so than Erich von Däniken’s lunatic fantasy that extraterrestrials transported and erected Rapa Nui’s emblematic moai (even though plenty of half-carved moai still lie in bedrock at the Rano Raraku quarry, as my photograph below displays).
Heyerdahl deserves credit for asking big questions, but not for his unwillingness to accept conclusive scientific research that ancient mariners settled Polynesia from the east rather than the west. The film, unfortunately, fails to acknowledge that every serious specialist dismisses Heyerdahl’s conclusions, which fall into the category of “hyperdiffusionism.”

According to an archaeologist friend of mine who has done extensive research on Easter Island, and prefers anonymity here, “The most ‘telling’ bit about Thor is that he required all the archaeologists working with him on his expedition to Rapa Nui and other islands to sign a paper agreeing to not publish anything that contradicted his 'story line.' This is one reason [archaeologist William] Mulloy published practically nothing about his research on the island: he had to toe the party-line.”

According to my same informant, when another accomplished archaeologist confronted Heyerdahl by asking "How, in the face of all that we now know about the Pacific, can you keep spouting off about American Indians in the Pacific?", the Norwegian responded that “I have my audience.”  Adds my informant, “That of course was true; he had an audience. However, they were all idiots.”

Saturday, May 18, 2013

The Curious Charm of Paraguay


In the 1980s, when I was often on a student budget, the cheapest way to get to and from southernmost South America was with Líneas Aéreas Paraguayas, the now-defunct “Air Paraguay” that required a stopover in Asunción before continuing to Buenos Aires, Brazil or Chile (photograph Creative Commons). At that time, it was still the Paraguay of the notorious dictator Alfredo Stroessner, whose conspicuous portrait hung in the waiting rooms at what is now Aeropuerto Internacional Silvino Pettirossi (at that time, it bore the dictator's name). I was always tempted to take a photograph and, though a certain menace pervaded the atmosphere at that time, I once managed a blurry shot in dim light, surreptitiously.
In succeeding years, after Stroessner’s overthrow, I spent quite a bit of time in the country in the course of researching and writing an earlier guidebook to Argentina, Uruguay & Paraguay, for a publisher best left unidentified. The country had no world-class attractions – by 1982, the Itaipú hydroelectric dam on the Brazilian border had obliterated the Guaíra falls, which reportedly were no less impressive than Iguazú – but I still found sights to interest me, such as the former Jesuit missions of Trinidad and Jesús (photograph public domain), across the Río Paraná from the Argentine city of Posadas.
What was most noticeable about Paraguay, though, was its reputation (and reality) as – not even arguably – the continent’s most corrupt country. On the Brazilian border, the city of Ciudad del Este (formerly Puerto Presidente Stroessner, pictured below) was and is a chaotic bazaar of knock-off Rolexes and comparable merchandise, smuggled goods and other contraband that occupies almost every storefront. At that time, I recall reading a Wall Street Journal reporter’s interview of a Ciudad del Este “businessman” who, when asked about the potential impact of the Mercosur free trade agreement on Paraguay, responded that “The way I see it, we may have to stop smuggling things, and start producing things.”
He spoke too soon. Several years later, I was crossing into Paraguay from the Argentine border city of Clorinda, in a small pickup truck that I had shipped from California to Chile. Presenting the vehicle’s papers to Paraguayan customs, I was taken back – though I probably shouldn’t have been – when the customs official asked me “Do you want to sell it?” The fact is that many vehicles circulating on the country’s highways have been stolen in Argentina and Brazil, and surreptitious sales are not unusual. Since then, I’ve always been cautious in taking my vehicle into Paraguay.
Nevertheless, there’s a certain inexplicable innocence in Paraguay’s pervasive corruption, which is something Paraguayans use to get by. Most recently, it’s been on display as residents of Asunción flock across the border to take advantage of favorable exchange rates – according to the Buenos Aires daily Clarín, the Argentine peso was worth 700 Paraguayan guaraníes a year ago, but today it’s worth less than 500. Prices for commodities like gasoline, wine and even basic food items are 30 to 60 percent cheaper in Argentina. Theoretically there are limits to what Paraguayans can take back across the border but, as my earlier encounter with Paraguayan customs suggested, the rules are flexible.

Wednesday, May 15, 2013

The Colonia Dollar? ATM Access in Uruguay


When I was in Buenos Aires in late November, I was running short of US dollars to turn into Argentine pesos on the so-called “blue” market, which had made my stay there considerably cheaper than it would have been at the official rate. I had, however, planned a brief trip to Uruguay, whose ATMs would yield the dollars I needed to get me through the rest of my stay in Argentina.
After taking the Buquebús ferry from Buenos Aires, I spent three nights in Colonia, twice hitting local ATMs for the maximum withdrawal of $300 to get me through my remaining weeks. Unlike Argentina, where the option to withdraw US dollars disappeared some time ago, Uruguay has no restrictions on such withdrawals, other than the daily maximum.
Argentines, in fact, cannot use their own ATM cards outside their borders but, being resourceful, they’ve found a way around the dollar restrictions by taking cash advances on their credit cards. Since the Argentine government has recently levied a 20 percent tax on credit card transactions by its citizens traveling abroad, those cash advances exceed the official rate within Argentina.

That’s pretty irrelevant, though, when the government has made it difficult or impossible to purchase dollars without jumping through the taxman’s hoops. Imagine the howls if the Internal Revenue Service demanded US citizens prove their creditworthiness before traveling overseas, and it’s clear why many Argentines will do most anything to purchase dollars to protect their savings in an inflationary economy.

To do so, individual Argentines have been taking the ferry to Colonia, but not necessarily for themselves alone. Rather, groups of friends and neighbors have been “loaning” their MasterCard and Visa to each other for raids on Uruguayan ATMs – an individual will take the first morning ferry across the River Plate and then hit the banks, withdrawing as much as possible for themselves and their friends. They return to Buenos Aires on the afternoon boat, having presumably limited their total acquisitions to less than US$10,000, to avoid having to make a legal declaration.

Today, the Argentina peso’s official rate was 5.235 to the dollar and, with the 20 percent tax, Argentines who cross the river are paying approximately 6.3 pesos for each dollar. On the open market, though, the “blue” dollar recently rose above 10 before receding under government pressure on the quasi-legal cuevas (caves) that sell dollars semi-surreptitiously. Today the “blue” closed just above nine pesos, but that means that those taking advantage of Colonia ATMs still come out about 30 percent ahead.

For Uruguayans and non-Argentine visitors to Colonia, though, this has been a headache because the long lines of Argentines have made it difficult for them to obtain Uruguayan currency, let alone dollars. The lines at Colonia’s ATMs can be dozens deep and, with many Argentines undertaking multiple transactions, the machines empty quickly. According to Uruguay’s outspoken president José Mujica, who’s had his differences with the government of Argentina’s Cristina Fernández de Kirchner, “The Argentines have always been in a rush to keep their savings in dollars, because they don’t trust their own currency…”
Until the situation resolves itself, which doesn’t seem likely in the short run, Uruguay-bound visitors should be aware of the situation in Colonia and, if possible, try to hit the ATMs early in the morning, before the Argentines arrive. It’s not such an issue in Montevideo, as the Uruguayan capital has many more banks, and is three hours from Buenos Aires rather than Colonia’s one hour. For those crossing the river only to acquire dollars, the ferry ticket to Montevideo is more expensive in both time and money.

Moon Handbooks Chile, in Saratoga
In a little more than a month – Monday, June 17, at 7 p.m., to be precise – I will offer a digital slide presentation on travel in Chile at Santa Clara Country’s Saratoga Library (13650 Saratoga Avenue, Saratoga CA 95070, tel. 408-867-6126, ext. 3817). Coverage will also include the Chilean Pacific Islands of Rapa Nui (Easter Island) and Juan Fernández (Robinson Crusoe), as well as southernmost Argentina (Tierra del Fuego and the vicinity of El Calafate) that appear in the book. I will also be available to answer questions about Argentina and Buenos Aires. The presentation is free of charge, but books will be available for purchase.
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