In its quest to make life more complicated, Argentina
appears to be targeting not just its own citizens, but also foreign
visitors. Its international reserves shrinking rapidly, though dollars are
abundant in every other country in the region, president Cristina
Fernández de Kirchner’s administration has announced yet another capricious
measure to prevent capital flight but that’s likelier to backfire.
The details are not yet clear, but the government is clearly
exasperated with the “blue
dollar” market that allows tourists (and others) to sell their foreign
currency at a premium that makes visiting the country cheaper. As of yesterday,
the official exchange rate was 6.24 pesos per dollar, while the “blue” went for
9.45 pesos – a breach of roughly 34 percent. That means, for example, a
hundred-dollar hotel paid in informally obtained pesos actually costs US$66.
That may not be true much longer, though. The government’s
latest bright idea is that foreign visitors will not be able to pay for tourist
services in pesos, but only in dollars or by credit card (effectively in
dollars, at the official exchange rate). The rationale, apparently, is that
this will increase the amount of dollars in circulation, but that overlooks the
probability that visitors may simply reduce their purchases to compensate for
higher prices. Even worse, they may not even travel to Argentina as the destination
becomes costlier.
Accommodations and transportation would, apparently, be the
sectors most affected. Last year, for example, I purchased a ferry ticket from Buenos Aires to Colonia
(Uruguay) for 180 Argentine pesos which, according to the official exchange
rate at the time, was US$37.55. I had changed informally at 6.35 to the dollar,
though, so it cost me only US$28.35, but under the new regulations I would have
to pay by credit card at the official rate. A year later today’s cheapest rate,
on the Buquebus
website, is 384 pesos or US$61.52 (which suggests something about Argentina’s
rampant inflation even with a gradual official devaluation).
What’s unclear is what actually constitutes a “tourist
service?” Hotels and transportation are pretty obvious, but what about rental
cars or gasoline, for that matter? If my Chilean license plates suggest that
I’m a tourist, must I pay by US cash or credit card even in remote Bajo Caracoles (pictured above), where
the only communication is a single pay telephone in its namesake hotel? Do
budget backpackers need to make their hostel payments by credit card? (not all
hostels are equipped to do so). If one attends a “for export” tango show at El Viejo Almacén, are pesos
unwelcome? (probably 90 percent of its clientele are foreigners).
I won’t be in Argentina for at least a couple weeks yet, but
friends in the tourism sector are expressing frustration with the sheer unpredictability
of it all. One Bariloche operator hadn’t heard much yet but says “It’s BS – any
foreigner can pay anything in pesos and
should be wary of people saying otherwise. Of course, a hotel is hurt when a
tourist pays pesos at the official dollar exchange rate.” The new measure, of
course, could turn into a boon for a hotel that surreptitiously accepts dollars
at the official rate and changes them on the blue market.
There’s an extended but
occasionally confusing discussion of this whole issue at an Argentina-based
expat website. For the moment, it’s probably too early to say how matters will
work out in practice; in Argentina, the law of unintended consequences is
always at work. Still, according to another friend who operates a travel agency
catering to foreigners in Buenos Aires, “It’s getting more complicated and not
encouraging for foreign tourism.”
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