News
Oh, Woe on you, US dollar!
Jul 10th
For several years now, the US dollar has been weak against most other currencies, despite still being the currency of reference in international trade. There was a strong but brief resurgence in its value when news of the US financial meltdown made headlines. Bad news is good news for greenback? What’s behind these upside down money markets?
The mighty dollar isn’t so mighty as it once was. First came the Euro, its first real competitor in the money market, followed by the roaring growth in China, Brazil, India and countless other economies that suddenly came alive. Their currencies became desirable and liquid rather than something you converted to a stronger currency such as the dollar to keep its value from being eroded by rampant inflation. The only factors which could now weaken these currencies are either local or world crises, which undermine investor confidence in the treasuries of export dependant nations and favors the US dollar, backed by the biggest and strongest domestic market on the planet.
For those of us who are rabid travelers or expats and are paid in dollars, what this all means is a big bite in our buying power when abroad. The monthly rent on your apartment suddenly passes from 500 to 700 dollars, even though the cost in the local currency has not changed! Visiting Japan, Brazil or Australia has now become a budget-buster and more than one adventurer cut back or even cancelled their next dream trip! There isn’t a lot you can do against these precipitous drops in the dollar’s value, except perhaps try to convert more to the local currency when the dollar has a significant uptick, because recent history shows us that such increases are always brief! Unfortunately, the dollar’s weakness looks to be a long term trend.
Although most countries’ currencies are now a lot stronger against the US dollar, there’s a few that have actually gone the other way. For instance, you’ll get more Argentinean Pesos for your dollar than in prior years (4.1 per at time of writing), although thanks to local inflation you might not actually get more goods for your money. The British Pound is quite a bargain too, costing you about $ 1.60 when it used to be about 2 dollars prior to the crisis. The Hong Kong dollar, on the other hand, has hardly changed in value since the former British colony was turned-over to China in 1999. Then there’s countries that peg the value of their currency on the dollar, thus protecting you from currency inflation: Panama, Ecuador and El Salvador, as well as a few British and Dutch islands.
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Falklands or Malvinas?
Mar 20th
1982 veterans show support in Plaza de Mayo
Look at any map printed in Argentina, and you’re told in no uncertain terms that the Falklands are called the Malvinas and its main city is named Puerto Argentino, rather than Stanley. Of course, it’s still and always a British territory and has never been legally part of Argentina.
Argentina’s claim over the islands is based on an 1826 accord between Britain and a territory that wasn’t yet Argentina, the United Provinces. This treaty granted them the right to start a settlement on the islands, but soon after, the United Provinces violated the agreement and declared its sovereignty over the archipelago. Britain regained control in 1833 without a shot being fired, and it wasn’t long before these cold barren rocky isles in the South Atlantic stopped being of interest to the nation to the west. That is, until 1982, when Argentina’s military dictator, Leopoldo Galtieri decided to make the Falklands his cause célèbre, sending a makeshift force to invade the islands. Galtieri severely misjudged the British and its Iron Lady, prime minister Margaret Thatcher, who sent an expeditionary force that quickly ousted the Argentine forces. Galtieri hoped to distract public attention at home from the disastrous economy, but instead the fiasco ended his and all future military rule.
Fast forward to 2010 and the imminent beginning of oil exploration drilling in the Falklands territorial waters, and the controversy was hauled back to the surface. The extremely unpopular Argentinean president, Cristina Kirchner, decreed that any vessels traveling to the Falklands must register with the Argentinean authorities, This in effect, constitutes an embargo against the UK, and it wasn’t long before British war vessels were dispatched to the area.
Kirchner may have obtained the support of virtually every other Latin American nation, but Argentina’s argument for its historic sovereignty over the “Malvinas” is extremely weak, and the current protest may seem hypocritical in view of its timing. It does appear to be an attempt to stir up patriotism to distract attention from a disastrous domestic policy, a move which most Argentineans aren’t buying into. It would be unthinkable for Argentina to launch another armed conflict which the UK would be sure to win again, and the order to request permission to sail to the islands is unenforceable and sure to provoke an immediate and forceful reaction from the British if it was applied. Not one to be taunted, the Royal Navy has already begun expelling any Argentinean war ships that stray into Falkland waters.
The latest salvo from Buenos Aires is the threat that any company participating directly or indirectly in the Falklands’ oil exploration might be barred from doing business in Argentina. On a less serious note, Argentinean veterans of the 1982 war say they’re ready to invade the islands again. The Kirchner-friendly Argentinean media report that there are 60 million barrels in offshore oil reserves in the Falklands, but this is completely speculative, as the current drilling is strictly exploratory and may in fact reveal that there is no economically viable deposits in the area. What’s certain is that there are a lot of sheep in the island chain, just as in 1982!
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Earthquake: Chile Now Off Your Itinerary
Feb 27th
(JZTZR5H5EEJV) I’m currently visiting Buenos Aires and woke-up to the news of a 8.8 (Richter scale) earthquake overnight south of Santiago, in neighboring Chile. I’m watching TV Chile, and it’s evident that the damage is extensive in the capital and surrounding area, as you might expect, and travel in or out of central and southern Chile is virtually impossible. Flights are being detoured to Mendoza or other Argentinean cities. Not a nice parting gift for outgoing Chilean president Michele Bachelet…
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Is your Web Site Censured in China?
Jan 31st
There’s still a lot of people out there who don’t realize China isn’t a democracy, perhaps confused by its booming capitalist economy that’s expected to replace Japan this year as the world’s second biggest in terms of GDP. China doesn’t have elections, has no freedom of speech and, of course, censures the Internet.
Photo courtesy of Alek von Felkerzam
Recently it backed away from requiring that all computers have its Green Dam software installed, a content control system. Perhaps the embarrassing public revelation that Green Dam contained code copied from Net Nanny, a commercial Internet filtering program, and the subsequent law suit filed by the publishers had something to do with the about face.
However, Green Dam wasn’t absolutely necessary for the Communist party to achieve its aims, it was just an additional measure to restrict what the Chinese view over the Internet, and perhaps a way to identify subversive citizens. The fact is, what you can see in China is already controlled via the Internet service providers as well as content providers who cow-tow to the party’s policy, lest they be summarily unplugged and prosecuted. Industry insiders refer to the censure system as the “Great Firewall of China“.
Go to a cybercafe in Shanghai or Beijing and try accessing YouTube or Facebook, and you’ll get “server cannot be reached”, or maybe even some Chinese web page that has nothing to do with these sites will be returned. Then try searching for “Dalai Lama” on Baidu, the country’s most popular search engine, and the results will be for web pages that condemn the exiled Tibetan leader. That’s just a tiny sample of what the Chinese government deems as inappropriate content.
Google China made headlines by announcing it would not filter search results as required, threatening to abandon China if the authorities tried to force them to comply. Very noble on Google’s part, but if you’re in China, clicking on the search result links won’t take you to the banned sites. I’m not sure if Google’s cached versions would still be accessible. Note that Hong Kong ,although administered by the Chinese government, isn’t subject to censure.
how can you find-out if a web site, perhaps your own, is on China’s restricted list? One way is to type the domain name in the form at http://www.watchmouse.com/en/ping.php which will try accessing the domain through a large number of places, including Shanghai. Here’s a few top domains I tested and what transpired through a Shanghai isp:
myspace.com – Not blocked
cia.gov - Not blocked
hrw.org (Human Rights Watch) – BLOCKED
dalailama.com – BLOCKED
wikipedia.org – Not blocked
Wikipedia page about Tiananmen Square protests: BLOCKED
falundafa.org – BLOCKED
wsj.com (Wall Street Journal) page about Uighurs’ protests: Not blocked
From these results we can conclude that while a web site itself isn’t blocked, any pages it contains which refer to subjects the Chinese government is sensitive about may be censured, although they appear to not have the means to catch all of them. If they could, there’s no doubt that they would!
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Argentina’s New Tourist Tax Targets Canada, Australia, and USA
Jan 15th
As a result of yet another ill-timed law passed by Cristina Kirchner’s government, travelers visiting from Canada, the US and Australia are now required to pay a tourist tax upon arrival in Argentina. The law went into effect late in December, 2009, and has raised grave concerns from the Argentinean tourist industry, already reeling from the effects of the last recession.
Photo courtesy of Brian Lary
US citizens are asked to pay 138 USD for the right of entry. Although the fee is collected once every 10 years, this isn’t a visa, and it isn’t clear how it will be tracked by Argentinean authorities. Meanwhile, Canadians and Australians will be the hardest hit, since they have to forfeit seventy and 100 US dollars, respectively, each time they disembark in Argentina. The amounts can be paid in US currency or the equivalent in Argentinean pesos. Note that this new tax is in addition to the 29 USD departure tax you have to pay upon leaving. If you have dual Argentinean citizenship, then you’re exempt from paying the new tax.
The explanation given by the government for this new policy is that it’s an act of reciprocity for the costly and complicated process imposed on their own citizens when they apply for a visa to one of the three countries. Brazil was one of the first to impose reciprocity several years ago, although I should point-out that what you get is a real visa, good for five years. It’s absolutely true that Argentineans are discriminated against by several economically rich countries, and the fees they’re charged for their application isn’t refunded if it’s refused. I agree this is unjust, but on the other hand, before the 2001 economic meltdown in Argentina, visas weren’t required of them – this changed when the flow of illegal immigrants from Argentina became an exodus of millions.
The real concern here isn’t whether this policy is justified, but what effect it will have on the already battered economy, where tourism is one of the most important sources of growth and foreign income. If you read the postings on this subject in online forums, you get a definite sense that the sector will take a big hit, judging from the virulent reactions of would be travelers to Argentina. If an American family of four was planning to go to Buenos Aires for a once in a lifetime vacation, they might reconsider upon discovering that their tab just went up by 552 dollars.
This tax will also have a negative impact on neighboring countries, particularly Uruguay. Many combine their visit to Uruguay with Argentina, typically landing in Buenos Aires, then traveling by Buquebus to Colonia or Montevideo. If you’re a Canadian, are you going to visit any neighboring countries knowing that you’ll be tagged for yet another 70 dollars upon returning to Argentina? The same problem arises for Canadians living in Argentina who have to renew their 3 month tourist visa, typically by crossing over to Uruguay for a brief visit. That, my friends is at least 280 dollars a year!
Currently, the tax is only collected in Ezeiza airport (Buenos Aires), probably because they haven’t fully worked-out the logistics of collecting the fees country-wide, but their plan is to extend it to all entry points, be it by land, air or water. The Kirchner administration predicts it will collect forty million dollars a year from this tax, but that is probably very optimistic in view of the dampening effect it will have. More importantly, the tourism industry will lose ten times that, thus making it a net tax revenue loss.
The Kirchners are almost guaranteed to be voted-out in the next presidential elections, so we can only hope that the next government reverts this law.
