Posts Tagged ‘money’

I recently came across an old notebook I’d carried with me on my travels when I first arrived in Argentina and tucked inside the back cover were some tickets from bus journeys I had taken. Travelling by bus had been such a big part of my trip around South America that it was nice to be reminded of the distances and experiences that these tickets represented. A couple had the prices on them, so I decided to conduct a little experiment.

That Argentina has been experiencing heavy inflation these last few years is no secret. Whilst the government has gone out of their way to deny it, even fining agencies who dared publish figures which disagreed with their own, living here it’s impossible not to notice prices increasing on a monthly basis. So having the prices from the past in front of me, I thought I’d take a look at how they have changed.

In March 2009 I travelled from Rio Gallegos to Buenos Aires, a journey of 36 hours which cost me 500 pesos. The same journey today according to plataforma10.com would cost 810 pesos – an increase of 61% over 28 months. Given that unofficial estimates of inflation have been around the 25% mark for the last couple of years, that’s not too bad.

Other, shorter and probably more popular routes have however suffered much more heavily. Looking at the tickets from my parents trip last October, the cost of Buenos Aires to Puerto Madryn has increased by 62% in just 10 months. In the 31 months since I travelled to Puerto Iguazu, the cost of a Cama class ticket has gone up a whopping 154% from 185 to 471 pesos.

The most heavily affected by this type of inflation (which applies to everything, not just travel) is the Argentinian population who will be able to buy less and less as rent, food and transport take up more and more of their salaries which are not increasing by the same proportion as prices. However I do see another side effect which will be to affect tourism. As exchange rates have varied very little in the last few years these type of price increases are making Argentina twice as expensive to visit as it was only 2 years ago.

Flights to Argentina from Europe and North America are not cheap and the relative inexpensive costs (lodging, transport & eating) once you are here compensated for that making a holiday here a realistic proposition. The more those prices increase the less viable Argentina will become as a destination, something which will hurt both the travel industry and the economy as a whole.

I went for lunch with a friend a couple of days ago, we had a sandwich each, a drink and a coffee. The bill came to 128 pesos. That may not mean anything to you but had we not finished our delicious lunch, we may well have choked on it.

Everybody that has spent any length of time in Buenos Aires has stories about how expensive it has become. I first came here nearly 3 years ago when 6 of us ate (in a good but basic cafe) a main meal and dessert and had change from 100 pesos. The first thing you’re going to do is look up how much 100 pesos is. I’ll save you the bother, as of today 100 pesos is  £17.54 ($25.50 or €21.25). That makes our lunch clock in at £22.45, London prices indeed.

To put this into some sort of comparison, I went for a job interview the other day. It’s a customer-facing role for a professional company, requiring language skills and technology experience. Take home pay is 3,000 pesos a month (£526.33). If you’re sharing a decent flat and lucky enough to pay Argentinian rates (as opposed to tourist short-term rates) your rent & services will come to around half of that. This leaves you with £263 a month, that’s 10 lunches for 2. And I am, of course, one of the lucky few.

Veinte Pesos. Flickr image by Irargerich.

Whatever great economic progress the government is trumping, the fact remains that living here remains a struggle for the vast majority of the population (working full-time in a coffee shop pays about 1,200 pesos a month).

To illustrate this, there is a nice parallel to the Big Mac Index, the Ugi’s Pizza index, which tracks the cost of a plain Muzzerela pizza at resolutely working-class pizza chain, Ugi’s Pizza. In the last 10 years, it’s gone from 2 pesos to 16 (64% in real terms). If that’s just too depressing to contemplate, here are some great shots of people who just won’t be put off by a 16 peso pizza.

So, after a few puzzled frowns and huffing and puffing, Laura got stamped into Ecuador for the next 90 days which was a relief as the Peru-Ecuador border was not the nicest place I’ve ever been and I really didn’t fancy getting stuck there. In fact, in general terms, there’s something distinctly unsettling about border towns over here. They mostly seem to follow the same pattern of stalls selling every type of shoddy crap imaginable, dodgy looking men sitting around, dodgy looking men offering to change money and dogs. South America has a lof of dogs just wandering around looking mangy, but border towns really excel in this.

But we made it through unmolested and are now in Cuenca which seems to be a nice place, the centre being a Unesco World Heritage site and a living city centre at the same time, I like that.

One thing that is confusing the hell out of me (and I’m spending far too much time thinking about it) is that the official currency of Ecuador is the US Dollar. They don’t have their own currency, cash here is green and has pictures of dead presidents on it. How does that work eh? My mission is to figure that out for you and I’ll report back.