In a surprise announcement Thursday, Argentina’s government said it will kill Fibertel, the country’s leading Internet Service Provider.

“Fibertel doesn’t exist anymore,” Planning Minister Julio De Vido said at a press conference.

Of course, Fibertel does exist. De Vido was speaking idiomatically. Indeed, I posted this article to the web via Fibertel.

But if De Vido gets his way, Fibertel won’t exist three months from now.

De Vido said Fibertel, which is owned by the government’s sworn enemy, the media giant Grupo Clarín, is using an illegal license to operate in the telecommunications and broadband industry.

Fibertel has more than a million customers. De Vido said they now have 90 days to find another Internet service.

Despite the dramatic announcement, however, it seems unlikely that Fibertel will be dismantled within 90 days.
(more…)

Popularity: 1% [?]

It costs more to buy a TV in Argentina than anywhere else in Latin America.

According to a recent survey by IFR Monitoring, it costs 101% more in U.S. dollars to buy a 32″ HDTV here than in Chile and 113% more than in Colombia.

Now that’s something to be proud of….not.

IFR  did a comparative analysis of prices for a standard 32″ HDTV in Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Mexico and Uruguay.

The results show Argentina to be the most expensive place to buy a TV while Colombia is the least expensive. On a recent trip to Colombia I was struck by how much less expensive tech items are there. In many cases, prices were similar to those in the U.S., the mecca of consumer electronics.

But if the U.S. is the global heaven of consumer electronics, in terms of selection and pricing, Argentina appears to be Latin America’s consumer electronics inferno.

It’s ironic, to say the least, that in the U.S., the world’s richest country (according to some metrics), brand name tech products cost less than in almost any country in the world while in Argentina, where the minimum wage is about $380 a month (for a 48-hour work week), such products are among the most expensive.

The average price of a 32″ TV in the countries surveyed is $711. It’s $1,012 in Argentina and under half that – $476 – in Colombia.

In an unrelated survey published this week, IFR said it was “plausible” to assert, as Amazon.com has, that the sale of eBooks will surpass standard book sales by the end of 2011.

Of course, both Amazon and IFR were referring to U.S. eBook sales. Given price problems in particular, and broader macroeconomic challenges (including poverty) in general, this is unlikely to happen in Argentina for many years.

Popularity: 1% [?]

Argentine President Cristina Fernández announced Thursday that the government will start circulating five new one-peso coins.

The Central Bank will add 300 million pesos (about $76 million) of the coins into the economy during the remainder of the year.

The first coins – totaling 60 million pesos – will start circulating Friday.

The coins aim to help celebrate the country’s bicentennial. They depict five of Argentina’s areas, including the Northwest (Pucará de Tilcara), the Northeast (El Palmar de Colón), Cuyo (Cerro Aconcagua), the Pampas (Mar del Plata) and Patagónica (the Perito Moreno glacier).

Workers at the country’s innumerable Chinese supermarkets will surely appreciate the additional change.

Popularity: 1% [?]

Perhaps surprisingly, given one of the worst global financial crises in decades, the use of pirated software declined in Argentina last year, according to the new Seventh Annual Global Software Piracy Study.

In 2009 about 71% of the software on Argentine computers was “trucho,” or pirated. That’s down from 73% the previous year.

Worldwide, pirated software usage rose to 43% from 41%.

Despite the improvement here, the vast majority of Argentines use pirated software.

That’s true in households, government buildings and businesses across the nation. Most “mom & pop” computer shops around the country routinely install pirated software for their clients.

To combat the problem, software producers offered a new approach, the report said: (more…)

Popularity: 1% [?]

Local banks are now charging foreigners a whopping 15.50 pesos (US $4) for ATM withdrawals.

The fee also applies to Argentines and anyone else who uses a local ATM to get cash from a foreign bank.

In July 2009 banks banks in Argentina started charging a US $3 fee on ATM withdrawals from foreign banks.

The only way to avoid the fee seems to be to use Citibank’s proprietary ATM machines. All other ATMs, as far as I know, charge the fee.

The Argentine Central Bank has said it has nothing to do with the fees, while spokesmen for banks haven’t wanted to talk about the issue.

In a statement last July, Banelco said both it and Link started charging a US $3 commission on every cash withdrawal using foreign cards. The companies, which work as networks representing Argentine banks, said the practice is the same as has been applied in other countries “for more than a decade.”

But the discriminatory application of a fee only on foreign cards doesn’t seem comparable to the fees commonly charged in most countries. Representatives from Banelco and Link have declined to answer questions about this or discuss the motives behind the fees.

Popularity: 1% [?]

Argentina, like Winston Churchill once said of Russia, is “a riddle, wrapped in a mystery, inside an enigma.”

The country is hard to understand, harder to explain and impossible to predict. Its bursts of economic growth and progress are consistently interrupted by fits of frustration every decade or so.

Over the past 50 years Argentina has seen 17 years of recession and another 17 of hyperinflation, according to a recent Deutsche Bank report.

In 1913 Argentina was the world’s 10th richest nation. In the U.S. in the 1930s people used to describe an exceptionally wealthy person as “rich like an Argentine.” But since then Argentina has stumbled in and out of trouble, failing to capitalize on its vast natural resources and educated population.

Between 1950 and 2003, Argentina’s per capita gross domestic product actually shrank 19% to US $3,760 from US $4,656. In the same period, Chile’s per capita GDP rose 173%, Mexico’s jumped 201% and Brazil’s soared 269%. Though these three nations’ growth started from a much lower base, they all made consistent progress while Argentina declined. Clearly, something went wrong.

What? (more…)

Popularity: 2% [?]

Inflation in Argentina will almost certainly get worse this year, a prominent U.S. economic official said Tuesday.

In a speech about the “stunning” fiscal problems facing the U.S. government, Thomas M. Hoenig, president of the U.S. Federal Reserve Bank of Kansas City, said Argentina’s inflation problems are about to get worse.

Hoenig cited Argentina as a warning to the U.S., whose own fiscal problems are so serious that it could face “hyperinflation” in the years ahead if it doesn’t get its finances in order. Hoenig said the U.S. government needs to reign in its fiscal problems voluntarily so that harsh measures aren’t imposed on the country by an even worse economic reality a few years from now.

“An example of both the political pressure that can be exerted on the central bank, as well as the inflationary consequences of debt monetization, is currently playing out in Argentina. The president of Argentina recently forced out the Governor of the Central Bank because he would not transfer reserves held at the central bank to repay Argentinean debt. Inflation in Argentina is currently running near 8 percent and will almost certainly increase.”

In reality, Argentine inflation is running much higher than 8%, according to virtually all economists here and abroad who study the problem. The 8% figure is the official inflation rate reported by the government statistics institute, Indec. (more…)

Popularity: 1% [?]

Despite its many otherwise amazing attributes, Argentina is not a particularly tech friendly country.

For tech-geeks, early adopters and innovators, Argentina can be a frustrating place to live because it constantly lags behind developed countries – and even some developing nations – in terms of innovation and the adoption of new technologies.

This isn’t to say, of course, that Argentina has no innovators.

Indeed, quite the opposite is true. Just look at what Santiago Siri is doing over at Popego and at Meaningtool. He’s not only adopting new technologies, he’s creating them.

And yet, as Malcolm Gladwell elegantly noted in his book Outliers, geniuses and innovators aren’t born into a vacuum. They’re most often raised in social contexts that nurture their talents, and provide them with the means necessary to stand out.

Given this basic axiom (let’s assume it’s true just for argument’s sake), you’d think the government, which recently asked Congress to raise taxes on tech products, might consider doing exactly the opposite. You’d think it might consider doing everything possible to lower barriers to the acquisition of new technologies. (more…)

Popularity: 1% [?]

The number of homes sold in the City of Buenos Aires in July plummeted 38.73% from the same month a year ago, the public notaries association, or “Colegio de Escribanos,” said Monday.

Sales fell just 1.9% from the previous month (June).

Exactly 4,199 homes were (formally) sold in July, compared with 6,853 a year ago. The total value of of the homes sold was almost 1.2 billion pesos (US $311 million), down from 1.5 billion pesos a year ago.

That puts the value of the average home sold in July at 285,409 pesos (US $74,132). That’s pretty close to the average price of US $72,402 in 2000, when the peso was pegged 1-to-1 to the U.S. dollar.

In other words, average property values have changed little in dollar terms over the past decade. But in peso terms, they’ve shot up 294%.

In order for residents of the city to have been able to keep up with the dramatic peso-based rise in prices, their salaries would had to have risen at a higher rate than inflation every year since 2002, when Argentina devalued its currency and let the peso “float” against the dollar.

But that hasn’t happened. Salaries have risen by a much smaller percentage, meaning that when it comes to buying property, most Porteños are notably worse off now than they were a decade ago.

Popularity: 1% [?]

Wish you had million pesos? You can, and it’ll cost you only a few bucks!

Just head to Viamonte 981, en el microcentro, and you’ll find a coin and stamp collectors shop, where you can become a millionaire in a few minutes.

Argentina’s historic experience with hyperinflation is well known and has been studied by economists around the world.

In July 1988, inflation, as measured by the consumer price index, peaked at 196.5% on a monthly basis, making today’s annoying 1% monthly inflation seem soft and cuddly by comparison. (more…)

Popularity: 1% [?]

For better or worse, Argentina has never been a good place to buy electronic items.

Shoppers, bargain hunters and antique collectors always find much to love about Argentina’s quality leather items, arts and crafts, jewelry, and outstanding services such as tango lessons and music classes, among other things.

But if you happen to want something, say, like a big HDTV, you’re out of luck.

For decades successive Argentine governments have stymied imports and heavily taxed novel or hi-end consumer goods like cutting-edge TVs based on the supposition that doing so will a) raise revenue and b) induce manufacturers to produce such items here instead of in Brazil, China or South Korea.

Such policies have had limited success, inspiring some companies to assemble similar items here. But for the most part, the effort to keep hi-end products out has done just that. It has kept Argentina’s lower and middle-class families from easily accessing the kind of hi-tech products that have become common in the U.S., Europe and Asia. (more…)

Popularity: 1% [?]

I just returned from 10 days in the U.S., so thisay not be news to any of you. But tonight, for the first time since I came to Argentina in 1995, a local bank charged me a $3 fee to withdraw cash from an overseas bank. The fee is in addition to whatever fees my bank charges in the U.S.

I withdrew the money from a “Link” network at a local branch of Banco de la Ciudad. I haven’t had a chance to test other banks or see if Banelco (Link’s competitor) is also charging a fee.

The fee would seem to be an easy way for local banks to make more money at the expense of foreigners. But it’s not year clear what the motivation behind the new fee is. According to Argentine Central Bank officials, ATM regulations here are largely determined not by the government but by just two private companies, Link and Banelco.

These companies are responsible for imposing what many people feel are unreasonably low limits on cash withdrawals from foreign banks. The limits, which vary from person to person and bank to bank, usually hover around 300 pesos per transaction. (The limits often confuse tourists accustomed to withdrawing much more cash, leaving them unable to pay for certain cash-only transactions.)

“We don’t have anything to do with imposing those limits,” a Central Bank official recently told me. “You need to talk with those companies to get more information.”

My transaction limit, for example, is a mere 370 pesos. Most visitors or foreign residents here can surpass the limits by taking out multiple transactions. But each one has its cost, and now that cost appears to have risen substantially. Link’s fee was almost exactly $3 (11.46 pesos as seen in the photo above), regardless of the amount withdrawn. When I tried to take out just 20 pesos, the fee was still $3.

Needless to say, the new fees will increase the cost of getting cash in Argentina. And needless to say, The Argentine Post will be contacting Link, Banelco and, again, the Central Bank, to figure out why this is happening.

If you’ve had any experiences with this, please post a comment and share your feedback.

UPDATE: In a statement, Banelco said both it and Link last month started charging a US $3 commission on every cash withdrawal using foreign cards. The companies, which work as networks representing Argentine banks, said the practice is the same as has been applied in other countries “for more than a decade.”

However, for the reasons mentioned above (the withdrawal limits and the discriminatory application of a fee only on foreign cards) , the commission doesn’t seem comparable to those charged in most countries. Banelco declined to answer questions about this or discuss the motives behind the new fee.

However, Banelco said both it and Link have raised the withdrawal limits to 1,000 pesos (without a daily limit) for the Cirrus network and 1,000 pesos (with a daily limit of 3,000 pesos) for the Visa Plus network.

I’ve tried using both networks and in neither case have I been able to reach the 1,000-peso limit. Instead, my limit seems to be around 930 pesos.

Popularity: 1% [?]