Doing business in Argentina: A constant feeling of crisis
inc.comI was in Buenos Aires a couple years ago and was talking to some U.S. oilmen. They said Argentina was unbelievably corrupt and that it was easier to do business in Egypt.
BA is beautiful but tragic, there are massive shanties surrounding a city designed after Paris and built 100 years ago, when Argentina was among the wealthiest nations in the world.
If you don't think politics matters, study Argentina and the way their elites, inspired by the statist Peronista ideology, have ransacked the nation and its people.
I'd also recommend you to read Eduardo Galeano, his book "Open veins of Latin America", although written in the 70's, is an eye opener to understand why the region is in its current state. I agree that corruption here in Argentina is everywhere. But not all the money has gone to the elites. Most of that money that was stolen to people went to North American companies.
That was my impression of BA as well. A city with the potential for so much wealth, and clearly a history of wealth and trade, that has been entirely squandered. It's a fantastic city to visit, but I'd hate to live there.
As stated by others in the article's comments, leaving the entrepreneurial stuff aside, this is really close to being bullshit.
It quotes Alberto Cavallo, who's father was the minister of economy that led Argentina to the 2000's crisis...
I live in BA and the situation isn't as bad as the article describes it.
Full article with comments: http://www.inc.com/magazine/201106/doing-business-in-argenti...
I disagree and think it's pretty accurate. I'll share my experience of being an american in BA - by highlighting some of the extremes. I've lived here for three years. just walked home with my kids from a friend's house at 1:30 and people are still out eating dinner. it's a fascinating, european-feeling city, with a 'faded glory' edge to it. It mostly feels safe and easy to get around. I love many things about it here, I have porteño friends, a software company here with a great group of talented developers, and it's an easy place to raise kids. Other parts of Argentina like Mendoza or Cordoba are even more comfortable and cheap (it's getting expensive in BA for foreigners and certainly for locals as inflation grows). As I write the below, please remember I have no plans to leave and really enjoy it...
However, at the political level, generally speaking, it's run by morons from the top to the bottom. All the major government offices are filled with cronies. no one in government will speak on the record (i have friends who work for bloomberg, washington post, al jazeera, etc who confirm this) as they have little real power. See this week's example of the president spending massive amounts of energy attacking the UK for the Falklands (subtitled in english) - http://www.telegraph.co.uk/news/worldnews/southamerica/falkl...
She takes this approach to every issue - blocking ships in the port for capricious reasons, like the recent rumor that no Apple products are getting in recently out of retribution for the fact that Foxconn is going to build a factory in Brazil instead of Argentina. They recently held a US Air Force plane for a month here on a training exercise invited by the AR government because they didn't declare the morphine in the safety kit, claiming that the US Air Force wanted to sneak drugs into the country. It's the kind of behavior for which I'd ground my teenager (if i had one)...
Unions extort even relatively small businesses. i have a friend with a shipping company 40 employees and he was recently scared for his life due to threats from the trucker's union, which rules the country in many ways; the leader having been put in place by the Kirchners but then he became too powerful. Another friend who runs an import/export business from (an asian country) who has to pay massive (you have NO idea how big) stacks of cash to get his containers through each week, every container.
And yet... my company is small and we don't have to worry about the larger political climate. And there's a thriving tech scene. We're organizing RubyConf Argentina and expect to easily have 400-500 attendees, making it the largest Spanish language Ruby event ever... Startups are growing here, there's starting to be more local VC money, etc. It's a great place to be if you're in certain industries, if you are a foreigner wanting to bootstrap your startup, etc.
But a lot of what the article says is true - the fix is in; to flourish in Argentina you have to be a) part of the small middle class whose parents at least have some real estate, b) A foreigner, c) from a wealthy elite family that can afford, literally, to ignore politics, or d) one of those guys with the cushy government positions clapping in that video.
As I said, it's close to being bullshit. It's not entirely, I just think it is a little bit extremist. There are more businesses that don't have problems than ones that do. I also think that a lot of what the article says is true, but also think that a lot of it is extremist.
P.D.: I happen to work at one of the companies you are outsourcing to :p
that's hilarious, monits?
Well, as an Argentinian and repeating what I said in the previous HN post: When you can bribe a policeman or a custom personnel in front of everybody there is a problem...
I remember a simple case showing that corruption is everywhere and the style of life of Argentina: there were new scanners in the airport to speed up the control of the luggages... at the end the personnel were using it to steal travels stuff. We are talking about small "spontaneous" organized crime inside the airport based on high technology scanners. Obviously there was someone in charge to control their work... and all was filmed.
Good to read:
Original in Spanish: http://spanish.martinvarsavsky.net/general/porque-ya-no-voy-...
English automated translation: http://translate.google.com/translate?js=n&prev=_t&h...
Could you describe your experiences a bit more? Buenos Aires seems to be one of the more interesting places in South America. Based on the typical news about South America (or Mexico), just landing on that continent will get you kidnapped, abused by the police, robbed, mugged, cheated, etc.
>Based on the typical news about South America (or Mexico), just landing on that continent will get you kidnapped, abused by the police, robbed, mugged, cheated, etc.
That's like saying, "Based on the typical news about Miami (or Anchorage), you will get eaten by polar bears and die of hypothermia".
Mexico is not South America, and it's nowhere close to Argentina. The distance between Juarez and BA is about the same as the distance between London and Seoul. Seriously. Worlds apart.
You can't generalize South America. It's bloody ginormous, and has far more cultural diversity than North America. It's far from homogenous. There are some places in South America that are dangerous. Most aren't. Similarly, you don't judge San Francisco by Detroit.
I've travelled through Argentina, Bolivia, Peru, and Ecuador. Buenos Aires is basically Paris or Madrid, but a little run down and depressing (much better night life, though). Bolivia is mostly alpine desert in the south and jungle in the north, and almost all poor. Peru ranges from modern metropolis (Lima) to shacks on a beach (Mancora), to mountains, jungles, etc. Ecuador is the only place I ever felt unsafe, and only in parts of Quito and Guayaquil. The worst places for crime and personal safety were apparently Venezuela and parts of Brazil.
Anyways, the point is you're trying to shoehorn an entire continent with dozens of countries and hundreds of cultures into a single mental schema, and that's just a dumb thing to do. It would be like saying "Asian culture" and thinking you could fit China, North Korea, Japan, Thailand, and India in one label.
Firstly, I didn't suggest Mexico was part of South America. Secondly, I'm not trying to shoehorn South America under a single mental schema. I'm actually trying to do the opposite, i.e. figure out what South America really is. Doesn't seem I can do that based on news, articles, whatever, and rather have to tour the place myself to come to a conclusion.
You can talk to people who've been there, but each country is pretty different and there are major differences within countries, as well.
As far as the violence goes, it tends to be cyclical. Certainly in parts of Columbia FARC activity is still a major issue, and Venezuela is bad for petty crime and assaults. You get the occasional Shining Path incident in Peru, but it's very low-level. Bolivia has regular strikes that bring the riot police out in La Paz, but the rest of the country seemed perfectly safe. Never had a problem in Argentina, or heard of anyone having problems in Chile, Uruguay, or Paraguay. Brazil is mostly kosher, but I heard of a few people getting robbed, or more likely picking up a girl from a club and getting mugged after.
But seriously, do go down if you get a chance. I had a blast there.
Not that you asked me, but living here i wanted to share my two cents. Buenos Aires is not tragic at all, it's... just a little melancholic. A tiny London with poor people and too much humidity, but with great people, lovely architecture, and well, there's insecurity, no way to deny it, but it all depends on where you go. You can walk, travel, go out, party, do whatever you want and you won't feel paranoid or anything. Oh, and there aren't as many escaped nazis here as in the movies, either.
Thanks :-) Comparison to London makes me feel better about Buenos Aires. Puts thing into a context. I actually used to live in North London, in a semi-rough area. Even though London was an expensive mess and certain areas gave the feeling of insecurity, I still liked it...at least it was an interesting mess.
I found the article quite realistic. What is close to being bullshit? The previous thread had some interesting comments about this subject http://news.ycombinator.com/item?id=2603104
Living in Buenos Aires, i have to said that the article is a big rant. Sure, let's make a complete insight about the economy of a complicated, third world country by well, touring a little bit and talking with a couple of entrepreneurs.
This country has lots and lots of issues, corruption, you name it, but is not that bad at all. In fact, it has improved a little bit since 2001. And what is even more important to this place, it has a little but important entrepreneur community (Pallermo Valley, for instance).
Perhaps, constant adversity helps people to sail agains the wind or any other cliché you might love. And don't start talking about politics without knowing, we were never one of the richest nations of the world, just a couple of very rich people that thought we did and made a couple of history books about it ;).
Nothing you said contradicts the article.
I can understand the "it's not that bad at all" sentiment from a personal perspective but it doesn't mean that things aren't bad on a rational, comparative basis.
I grew up in Poland, a country at the time under communist regime. It would take a book to describe all the ways the economy and life was fucked up compared to west countries.
It really was a terrible country to live in. But at the same time 40 million people did and on some level our lives weren't all that different from people in richer, cleaner countries where people could buy toilet paper every day. People have amazing ability to adapt to very adverse environments.
From reading the article I get the impression that Argentina is truly, factually fucked up country, compared to other countries, just like Poland was under communism.
While your reassurance that "it's not bad at all" is a testament to adaptive power of humans, unless you challenge the facts described in the article you're not very convincing.
As to your claim challenging the notion that Argentina was a rich nation, well, the rich people you speak of were very successful at rewriting the history. According to Wikipedia:
"Argentina increased in prosperity and prominence between 1880 and 1929 and emerged as one of the ten richest countries in the world, benefiting from an agricultural export-led economy as well as British and French investment. Driven by immigration and decreasing mortality the Argentine population grew fivefold and the economy 15-fold."
"Argentina increased in prosperity and prominence between 1880 and 1929 and emerged as one of the ten richest countries in the world, benefiting from an agricultural export-led economy as well as British and French investment. Driven by immigration and decreasing mortality the Argentine population grew fivefold and the economy 15-fold."
Sure, if you consider the top upper class as the whole country. The people never saw that kind of wealth and prosperity in those days. Field workers lived in the most absolute poverty while the owners of those fields lived in luxury and traveling abroad for vacations. North of Argentina still remains one of the poorest regions in Latin America, as it was those days. Sure, we were exporting goods everywhere. Not much was being invested on improving the well being of workers everywhere. At least, not until Peron grew to power.
Wealth was more unequally distributed back then in all the rich countries, at least compared to say the 1970s which were the recent equality peak. The US had Getty and Rockerfeller and JP Morgan and also mass poverty, look at the Great Depression. Was Argentina that different back then?
There was a really good comment thread on this article when it was posted here 18 days ago: http://news.ycombinator.com/item?id=2603104
The last part is interesting - you can't make a buck there (due to the taxes), but you can build a back-office.
This has been posted before.
We are doing pretty well right now, actually.
"Right now" always seems to be our problem. I just tried to rent a flat and they were trying to enforce 10% price rices every 6 months, even though it's illegal. That's just one example of the "right now". Because I can make a buck, I will, don't matter what; then we blame on the politicians. There's so much we have yet to learn.
Great insight on human nature, or is it on argentinian human nature? Complains, complains, complains.