Politics and Pesos...

Three Sundays ago, the government of Argentine President Mauricio Macri suffered a serious setback to his re-election campaign, when Peronist opposition candidateAlberto Fernández drew nearly 50 percent of the vote in the country’s presidential primary elections. Discontent with the economic situation, including high inflation and unemployment, propelled a protest vote against the party in power. Fernández is the odds-on favorite in the general election, which will take place October 27th.

Today's official exchange rates against the US dollar.

In the aftermath of the primary, Argentina’s peso plunged from 45 to the dollar to nearly 60 before rebounding slightly into the high 50s. That fueled inflationary fears—though one might argue that’s something Argentines are accustomed to—but the bigger problem appeared to be the Macri administration’s shambolically inconsistent approach toward the issues.

An extensive wine tasting at Aldo's tomorrow will cost about US$10.

In the short term, foreign visitors may benefit—at least until prices catch up with devaluation. For the moment I’ll just note, anecdotally, that a wine tasting tomorrow at Aldo’s—a premium restaurant just a block off Buenos Aires’s central Plaza de Mayo—will cost only about US$10. That includes accompanying snacks, plus discounts on optional wine purchases and dinner itself, if desired (Full disclosure: I have lunched anonymously at Aldo’s and would certainly recommend it).

In 2014, in Puerto Madryn, I changed my dollars at this auto glass repair shop.

Even if there’s a short-term advantage, politics may mean it doesn’t last, especially if the opposition wins in October. Under the previous government of Cristina Fernández de Kirchner, foreign exchange controls and currency manipulation made travel in Argentina awkward, and encouraged a flourishing black market where tourists and Argentines themselves would change their dollars under the table in cuevas, so-called “caves”—in one case, in the Patagonian city of Puerto Madryn, I changed my cash dollars surreptitiously in an auto glass repair shop.

Meanwhile, in Argentina’s Byzantine politics, the presidential candidacy of Alberto Fernández seems an odd one because the vice-presidential running mate is Cristina Fernández de Kirchner (no relation)—a political powerhouse in her own right who’s under multiple corruption indictments from which her current senatorial seat provides her immunity.

In 1973, when Argentines chose Héctor Cámpora as their president, they knew they'd be getting Juan Domingo Perón.

Given that Alberto Fernández served both the late former President Néstor Kirchner and his successor/wife, Cristina could be the power behind the throne, so to speak. This is not unprecedented in Argentine politics—in 1973, when Héctor Cámpora won the presidency with Juan Domingo Perón still in exile, the party’s slogan was “Cámpora al Gobierno, ¡Perón al poder!” (Cámpora to the government, Perón in power!).

Trans-Continental Coda

It’s worth noting that Argentina’s isn’t the only currency Southern Cone currency showing weakness. When I left Chile, in mid-April, their peso was at 660 to the dollar. Today it’s almost 720, nearly a ten percent decline. That may make Argentina’s neighbor somewhat more affordable, but its economy (and politics) are not nearly so volatile.

Doctors without Borders? Cuban Physicians Make Chilean House Calls

Every autumn, in California, we start hearing about the upcoming flu season and the need to get vaccinated before it starts. I normally haven’t done so, not because I’m an anti-vaxxer, but because I usually leave for southernmost South America, where summer is starting and flu treatment is a low priority. That was the case again this year, except that I returned from Buenos Aires to Oakland for most of December and January before returning to Chile last week.

So far, my time here hasn’t worked out exactly as expected because, just a couple days after arriving, I got slammed by a vicious bug that left me nearly prostrate. I am guessing – call it informed speculation – that my airport odyssey from San Francisco to Los Angeles to Lima to Santiago exposed me to something that vaccination might have fought off. I managed to see a few necessary contacts before it really overpowered me, and I’ve spent most of the time since in a reclining position – even sitting at the keyboard has exhausted me.

I didn’t really want to go the hospital, but after waiting it out for a few days, I let my friend Marializ Maldonado arrange a house call through Médicos a Domicilio Cuba Vida, an organization of Chilean-licensed Cuban doctors operating in Santiago. The very existence of the service surprised me, as physician house calls are a thing of the past in the United States – I don’t recall one since I was a child in Washington State, though I did get nurse’s visits after heart surgery a few years ago in California.

It was barely an hour from when Marializ phoned until the doctor and her assistant arrived, with state-of-the-art gear for measuring vital signs, and asking all the relevant questions about my medical history – even though she gave the visual impression that she might have interrupted a shopping spree at Victoria’s Secret. The diagnosis was bronchitis, and she wrote several prescriptions, including antibiotics, a strong cough syrup and an inhaler. The cost was a modest 30,000 pesos, less than US$50 at the current exchange rate; the prescriptions were another 22,000 pesos (roughly US$35), but it’s reimbursable through my travel insurance.

Fortunately, at home in California, I live only a few blocks from my regular health care provider’s hospital, so house calls are hardly necessary. It was a pleasure to learn, though, that such services are still available at a reasonable cost. I would recommend the service to anybody visiting Santiago, though it’s unclear whether or not they have English-speaking doctors.

On a tangential note, the Cuban presence in Chile has become palpable in recent years, especially on the music scene. Only yesterday, as I went to board the Metro in the central Plaza de Armas, there was an excellent son-style group playing in the bandshell (pictured above). The crowd of spectators was small but appreciative.

Default Blue(s)? An Exchange Rate Update

Preparing a new edition of any guidebook involves challenges, and one of them is to present exchange rates and prices accurately. My upcoming fourth edition of Patagonia covers three countries, but Argentina is the most challenging to predict because of its volatile politics and economy. During the research period, its peso fell from six to eight-plus per US dollar, but that’s not nearly the whole story.

Argentina’s made front-page news recently, after having failed to persuade the US Supreme Court that its plans to pay debt from its 2001 bond default and 2005 restructuring conformed to the New York State laws under which much of that debt was contracted. As of mid-2014, it was still unclear whether the country was again facing default that might result in another peso collapse.

Given its foreign debt problems, due partly to limited foreign currency reserves, President Cristina Fernández de Kirchner’s government instituted a series of patchwork measures to stem the flow of dollars, which Argentines often use to preserve their savings in the face of inflation and a depreciating peso. One of these was the cepo cambiario (“currency clamp”), which has made it difficult or impossible to purchase foreign currency – even for overseas travel, where Argentines must use credit cards with purchases subject to a punitive tax.

That’s led to an active black market for the so-called “blue dollar,” which has traded for upwards of 12 pesos despite some fluctuations. At that rate, Argentina is a relatively inexpensive country for foreign visitors, but for those who don’t know their way around, there’s a certain risk in changing at so-called cuevas (“caves”) in Buenos Aires and elsewhere. Some cambios (formal exchange houses) have been paying the blue rate, but real estate brokers may be another option. A few businesses, most notably some hotels and restaurants, may accept cash dollars at a premium rate.

Of course, using the “parallel” market also entails the risk of carrying substantial amounts of US cash (Euros and other currencies are not popular). Some purchasers will only accept 50- and 100-dollar notes at the blue rate. For current Buenos Aires rates, check the website Dólar Blue or see the widget on the column to the right; rates are usually lower in the provinces. Prices for the new edition were calculated at the official rate, but are vulnerable to dramatic changes.

During the research period, Chilean exchange rates versus the dollar slipped from roughly 520 pesos per dollar to the 550 range, and have fluctuated only slightly. There is no black market and, barring unforeseen circumstances, both exchange rates and prices should remain relatively stable. The Falkland Islands pound, at par with British Sterling, is likely to remain the most stable of the bunch.

Refueling at "Patagonian Prices"

Though it may not look like much, Sierra Grande is still a welcome sight to southbound motorists on Argentina's Ruta Nacional 3, the highway that starts in Buenos Aires and ends, 3,200 km later, at Bahía Lapataia, in Parque Nacional Tierra del Fuego. That's because Sierra Grande is the northernmost point where motorists like myself can fill the tank at, "Patagonian prices," a discount from rates in the rest of the country.

That's presuming fuel is available, which is no sure thing this summer. Monday morning, I left the city of Viedma with three-quarters of a tank, plenty to cover the 300 km to Sierra Grande, where I could fill up more cheaply. When I passed the city of San Antonio Oeste, though, I became a bit concerned – a little more than halfway to Sierra Grande, it had huge lines at its only service station, and I wondered whether northbound drivers had been unable to fill up there. I’d already seen long gas lines in Villa La Angostura, San Martín de los Andes and elsewhere, so this might become an issue.

As it turned out, my concerns were overblown. Sierra Grande has several service stations, and the longest was at the state-run YPF, which is the cheapest – high-octane super costs 7.14 pesos per liter (roughly US$3.94 per gallon at the official rate, but only $2.71 per gallon at the “blue dollar” rate). This is about 20 percent cheaper than fuel farther north.

Some years ago, longer than I care to remember, “Patagonian prices” for fuel were barely half what they were in the rest of Argentina, thanks to a tax break that supposedly encouraged settlement and economic activity in this thinly populated part of the country. Given how the differential has declined in recent years, that may be on the way out and, in any event, the price doesn’t matter much if there’s no supply. When I arrived at the village of Puerto Pirámides (pictured above), gateway to the wildlife paradise of Península Valdés, its only station had been without fuel for several days, with the nearest available at Puerto Madryn – a distance of nearly 100 km.

Flying to the Falklands, on a Budget?

Other than taking a Royal Air Force charter flight from the United Kingdom, an occasional cruise ship around the Horn, or your own yacht, the only realistic way to reach the Falkland Islands is by air. Since the 1990s, LAN Airlines has operated a weekly flight from the southern Chilean city of Punta Arenas (pictured above) to the Islands’ Mount Pleasant International Airport (a distance of roughly 530 miles, taking about 1-1/2 hours; ; the photograph below, which I took an earlier LAN flight, is New Island, the archipelago’s westernmost outlier).

Briefly, LAN flew twice weekly, until the Argentine government tightened conditions for overflying its airspace and prohibited charter flights from Chile because cruise ship lines preferred the simplicity of turning over their passengers and crews there rather than in the Argentine port of Ushuaia. Once a month, Argentina obliges LAN to make a stop at the nondescript southern Argentine city of Río Gallegos, which has caused some curious distortions in the logistics and economics of reaching the Islands (which are only about 460 miles from Gallegos).

I have never flown to the Islands via Río Gallegos, but my understanding is that fairly few passengers board the plane there or disembark on the following week’s return flight. The major exception is humanitarian visits for veterans who fought in the 1982 South Atlantic war between Argentina and the United Kingdom, and for families of Argentine soldiers who died and are buried there. Because of its persistent irredentist claim to the Islands, Argentina refuses to permit the repatriation of their remains to the continent; the graffiti in the photograph above, taken in Río Gallegos in 1990, blames the conciliatory then president Carlos Menem for Argentina’s failure to reclaim the Islands after the war.

Despite the inconvenience of Río Gallegos, there may be an economic advantage to flying out of there. According to search I did on LAN’s website, the round-trip fare from Punta Arenas is US$818, while the comparable fare from Río Gallegos is US$891 (subject to a detail which you may read in the penultimate paragraph of this post).

There may be a way around those high fares, though. Because of Argentina’s claim, it considers such flights to be within its own territory, rather than international flights, at least in theory. I recently asked a travel agent friend in Buenos Aires to price the Río Gallegos route for me, and she came up with a figure of 1731 pesos, which would be US$297 at Friday’s official rate. With pesos purchased in the informal “blue dollar” market, it would cost the equivalent of just US$181. Either is a pretty good deal, especially compared with the advertised prices.

A word of caution: If you’re arriving from the Islands to Río Gallegos, whether or not you flew out of there, insist that Argentine immigration officials stamp your passport. Because Argentina considers this a domestic flight, they sometimes refuse to give exit or entry stamps, and this could cause problems down the line. In the former case, leaving Argentina at another border crossing, you could be cited and fined for overstaying your visa, depending how long you were there before visiting the Islands; in the latter case, you would have no proof of having entered the country, and could be considered to have done so illegally.

Ironically, according to LAN’s website, the Argentine government collects a new 20 percent international airfare tax on its own citizens traveling to the Islands to discourage capital flight. My translation of the Spanish language text follows: “After March 18, 2013, we must apply the 20 percent surcharge on international flights established in General Resolution No. 3450/2013 of the Administración Federal de Ingresos Públicos [AFIP, analogous to the IRS in the United States or Inland Revenue in the UK]. This is detailed under additional ‘Charges and Taxes.’”  That brings the total to US$1,051, in theory, for an Argentine traveling to the Islands.

How exactly this may work out in practice, I hesitate to say because of the sheer unpredictability of the Argentine bureaucracy but, for anyone who wants to visit the wildlife-rich Falklands on a budget, it’s worth looking into.