mandag, mars 31, 2008

Cash is king

Bring cash. Argentinian confidence in banks rival their lack of faith in the military, police and politicians. All for quite understandable historical reasons of course, having banks literally steal your account does not make for credibility.

Renting apartments for example, is done with cash. Stranger still is the fact that cash is also used for buying apartments. While the process of buying a house can be nerve-wracking enough in Europe or the US (especially these days), imagine the added stress of carrying around a briefcase of 100k+ USD on the streets of Buenos Aires. The atmosphere is pretty tense with buyer and seller sitting around a table counting a wad of notes before the final signatures can be made.

Buildings are popping up all over there place, especially in the trendy bubble of Palermo as in the picture. Prices have been rising phenomenally, but there is a limit to how much influence foreign capital can have. At the moment the costs of apartments are very much out of whack with the general Argentinian economy. So even though prices are still stupidly cheap from a European viewpoint, it is buyer beware, given the extremely cyclical nature of the Argentinian economy. The next crash could see prices dropping 20-40% and with the current centre-periphery conflict the situation is dicey. Rent, with cash.

tirsdag, mars 11, 2008

Love means having to say you're sorry

It is peace in our time, though no love lost, as Uribe wisely dropped the machismo all too common in South-American politics and issued a formal apology for violating the borders of Ecuador. Also dropped were plans of dragging Chavez in front on an international court over his support to the FARC guerillas. The lowering of tensions welcome for Venezuela, who get a major part of their food supplies from Colombia, empty supermarket shelves not uncommon even when normal relations.

The tense meeting of the Organisation of American States in the Dominican Republic ended with the stone-faced trio of Uribe, Correa and Chavez shaking hands, but not until plenty of remarks were exchanged. Highlights include Ecuador's Correa dryly remarking to much laughter that the Dominican hosts better be sure that there were no terrorists on the island, or Uribe would come and bomb them. Uribe was not amused. Later on Argentina's Christina Kirchner scored a gender goal in honour of the International Women's Day, when observing that while women were often accused of hysterics, looking at the reactions of the three implicated heads of state caused one to wonder about male hysteria.

Finally, while tensions are momentarily down, these issues at hand are by no means resolved and are certain to emerge again in the near future. Ecuador is asking for UN troops on the Colombian border, while Colombian plans to publish incriminating evidence from the FARC laptops captured in the raid are sure to again aggravate the neighbours. Interesting times ahead.

tirsdag, mars 04, 2008

Colombia: Friendly relations?

The situation is currently heating up in Colombia. Violating another country's territorial sovereignty is simply not the done thing. And that was what went down a couple of days ago. Colombian planes, while not themselves crossing into Ecuadorian airspace, their payload certainly did, and duly obliterated a patch of Ecuadorian soil. The target was FARC number two man Raul Reyes, who was killed along with a dozen guerrillas. Colombian forces then crossed the border to retrieve his body. The whole operation acted upon CIA-provided information, and was hailed as a successful blow against FARC by the Uribe government.

Naturally Ecuador did not enjoy this brief incursion, issued a strong complaint, closed the embassy and mobilised forces along the border, as did Chavez. Venezuela of course has a long history of unfriendly relations with their neighbours, and the Colombians presenting evidence of Chavez funding FARC is not improving matters. Worse, according to Bogota FARC has plans of building a dirty bomb, although the use of such a barbaric weapon seems extremely counterproductive to gaining popularity in a civil war.

At the moment then, tension is high. All the other South-American countries are appealing for peace and to avoid a confrontation. An armed conflict is simply bad for everyone, particularly so for Venezuela, whose military though much touted by the US as a major threat, is really something of paper tiger despite Chavez’ money-spending policies of guns over butter. In addition to the purges when Chavez took power they have no combat experience, in contrast to the Colombians who have been fighting a low-intensity civil war for decades. And of course, Colombia can rely on assistance from their big brother gringo allies, who would see a war as a wonderful opportunity to finally topple Chavez.

But a war would also be a tragedy for Colombia, its economy been steadily improving the last decade, crime has been massively reduced and generally people are positive about the future. An example is Medellin, where the local government has a commendable progressive policy of building libraries in the poorer areas, as pictured above. Furthermore, in spite of the horrible image the country has abroad, it is not any more a dangerous place to visit than say London or Barcelona. Unless of course, one has a particular predilection for long jungle treks. The country is something of a rare beast; a stable country in a civil war. A real war could destroy much of the gains from the last decade of reconstruction.