Wednesday, June 23, 2010

Argentina, or: Neoliberalism with Benefits

Argentina, according to activists such as Naomi Klein and others, can be seen as a textbook case for what often is vilified to as ‘neo-liberalism’. In Argentina, this alludes mostly to the presidency of Carlos Menem and its aftermath, which ended 2001 in the bankruptcy of the Argentinean state. It was a period of rampant privatization, radical free market policies, most notoriously boosted by the conditions which the IMF and the Word Bank dictated to the country for its loans. Unforgotten are the decrees allowing every citizen to withdraw from their bank not more than $250 per week. Many lost their pensions and savings and the devaluation of the currency has led to an economic downturn from which the country is only slowly and partly recovering.
Looking at Argentina now (Dirk has just spent 6 weeks there) provides a rather fascinating picture. Yes, it cannot be overlooked that the country shows signs of deterioration: In Buenos Aires, the stunning architecture, the layout of the wide streets and parks clearly indicate that the country has seen better days. But the crumbling sidewalks, the empty high street buildings (at the former Harrods they couldn’t even bother to remove the signs) and the state of public buildings are only some examples of what makes the recent decline palpable.
But in the main, the recent years have brought to the surface some phenomena which make the country very different from other places in the world. If one goes out or does shopping it is stunning that apart from a two, three fast food chains one has a hard time to find any of the global brands which makes high streets anywhere else look all more and more the same. Instead, the absolutely cool shops of BsAs’ Palermo or Cordoba’s San Telmo barrios boast a richness of home-grown brands, designers and artists which offer a truly unique experience. In some ways this can be seen as a consequence of the crisis: since the decline of the currency foreign products have become unaffordable, stimulating domestic talent.
Another interesting phenomenon is the sheer number of bookshops. Argentineans seem to be not only fairly well educated and intellectually vibrant, but they certainly display that their hearts beat on their left sides. The number of demonstrations, often using symbols one remembers from university cafeterias in the 1970s in Europe, is sheer staggering, often including public debates and talks. It looks that recent events have politicized a whole generation of mostly younger people.
While the Argentinean state has still maintained some core elements of what used to be European-style welfare state, it is interesting to see though that many social tasks are now increasingly addressed by private corporations and NGOs. In a similar vein it is the private sector now which has taken first steps and initiatives to address corruption, which is fairly rampant and endemic as part of a colonial heritage under Spanish rule. Argentina has a history of military dictatorship, human rights violations by governments and, more recently corruption and rent-seeking of government officials. No wonder then we see that corporations are increasingly stepping into a quasi governmental role, which we have written about extensively. It is interesting that many business schools have become leading hubs in addressing these social issues, be it corruption or broader social responsibilities.

One can’t escape the impression that the rough economic legacy and palpable discontent with governments has not only led to a generation of younger Argentineans which are highly reflective, ready to speak up and march out for their views; it has also led to remarkable forms of social activism and entrepreneurship. One of the most interesting examples is the ‘El Castillo’ Hotel in the beautiful hills west of Cordoba. It’s Argentina’s first and so far only eco hotel and caters to corporate and private customers with longer, custom designed holiday programs with a host of activities, including all sorts of sports, art, music, acting, games or cooking. The owner-managers, the three Fabrega siblings Adriana, Edgardo and Fabian, set the place up in a derelict old mansion when they were in their mid 20s and have turned it into a viable business. From exclusively employing locals, skilling indigenous workers (discrimination is otherwise rather common), pursuing environmental goals up to diligently delivered events – the owners brim of pride not only about economic success, but most notably about contributing to social change. After all, its the home country of Che Guevara...


  1. As an Argentinean myself, I loved this post!
    Your paragraphs go beyond any formal analysis, amazingly capturing the very people’s spirit of this country.
    Your intuition for understanding the social essence of Argentina is truly revealing and helps anyone to better appreciate his or her own context.

  2. Fabian,
    thank you, this means a lot. Too bad i did not have a chance to meet you, but i hope this can be corrected soon. I was spoiled to a truly unique afternoon by Adriana and Edgardo. What you guys have pulled of is just cool. And i will be back to Argentina, for sure.


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