Argentina′s dilapidated charm and big pies | Business| Economy and finance news from a German perspective | DW | 05.04.2017
  1. Inhalt
  2. Navigation
  3. Weitere Inhalte
  4. Metanavigation
  5. Suche
  6. Choose from 30 Languages

Business

Argentina's dilapidated charm and big pies

Ahead of the World Economic Forum in Buenos Aires and a general strike on April 6, DW's Manuela Kasper-Claridge shares her impressions of a rapidly changing society and economy in Argentina.

The driver steers and swerves erratically. Like during a car race, he abruptly pulls to the left or the right on the highway. We are heading from Buenos Aires to Santa Fe and are quite alarmed by his jolty driving style but Alejandro just shrugs and points outside. Huge potholes are appearing out of the blue. The heavy trucks ahead of us are barely managing to avoid them. One truck carrying milk apparently didn't manage in time and now lies in the roadside ditch. If you were to look for signs of an investment backlog in Argentina, this would be one of the places to go.

Twelve years under the Kirchner administration have left some aspects of the country literally in decay. The sidewalks in Argentina's capital, for example, are barely suitable for older people or those with disabilities. Missing tiles or large holes that suddenly appear turn a simple stroll into a steeplechase. It is advisable to take children by the hand.

About 140 kilometers (87 miles) before we reach Santa Fe, we visit the village Colonia Belgrano. It is located in the middle of the Pampa, Argentina's fertile plains. Cattle are grazing on seemingly endless pastures. In the distance, you can see soy fields. Colonia Belgrano has 1,400 inhabitants. Most of them work in agriculture. 

Daniel Tron doesn't look very happy. In his mid-50s, he owns 260 hectares of land, raises calves, grows soy and grain. His family has owned the farm for five generations. "The prices are too low," says his wife Ariana. "To keep the farm going, we need to purchase a lot of things - pesticides, for example, but everything is so expensive," she says.

"Inflation stands at more than 40 percent. We can't earn that much."

Election promises

Her hopes rest on the new government of President Mauricio Macri, whose administration made numerous promises when it took over one and a half years ago. Market restrictions would be lifted and investments encouraged. Entrepreneurship would pay off again, the president promised. They haven't felt much of that out here in the villages. "It takes too long," Ariana Tron sighs. "So far, there have been few improvements."

Buenos Aires (picture alliance / AP Photo/N. Pisarenko)

Buenos Aires is a city of contrasts. Middle-class apartments and office buildings are not far away from the slums

Nonetheless, she doesn't yearn for the old days. But Mauricio Macri is running out of time, people in Argentina are getting inpatient. Thirty percent of them are officially considered poor. That these stats are known is partly due to the fact that figures are now recorded and analyzed properly, which is another result of Macri's reforms. He has completely restructured the office of statistics, which was notorious for publishing false figures. Now the government has to live with the truth as well. 

Another reform is the controversial slashing of subsidies - in the energy sector, among others. 
"In the past, your monthly electricity supply didn't cost more than a slice of pizza. So naturally a lot of energy was wasted as well. There was no need to conserve electricity," says Carolina Iglesias. The young Argentinian woman studied abroad and returned to Buenos Aires six years ago. She enjoys living here, has a steady job in marketing but also complains about the high electricity bills. It's seven times higher now than it was two years ago.

"It's actually still cheap," Iglesias says. "But our wages aren't increasing that fast." She is surprised by all the poor people in her neighborhood. "More and more people sleep in the street. We didn't have that before."

Time-consuming process

It is clear to many Argentinians that the Macri administration cannot implement many things as quickly as planned and that the legacy of 12 years under Kirchner is worse than expected. But the turn for the better still has not come, especially among the common people.

In the business world, the mood is completely different. Barbara Konner, vice president of the German-Argentinian Chamber of Commerce and Industry (AHK) can barely handle all the requests she is getting these days. Visits by delegations from Germany have increased by 30 percent. Entrepreneurs want to see where they can invest. 

"The pie has gotten bigger and everyone wants a slice," Konner says with a smile and sees positive trends. "The economy will grow by 3 percent this year. That is probably just the beginning. There are investments again, including in energy efficiency, in the agricultural sector, logistics and transport. Things are moving."

But she addresses the gap between rich and poor. "Real wages have shrunk by 6 to 8 percent this past year because inflation is so high." 

A liter of milk for instance is more expensive in Buenos Aires than it is in Berlin. Wage negotiations are tough, the fight over limited wealth is growing. Numerous unions have called for a general strike on April 6. That will mean no subway trains and buses; planes will be grounded. That won't make governing any easier for Argentina's president.

Watch video 01:36
Now live
01:36 mins.

Tango-ing to survive

DW recommends

Audios and videos on the topic