The Argentine Isolationist Grinch Who Stole Xmas

♠ Posted by Emmanuel in , at 12/24/2012 06:20:00 AM
In addition to cooking the books, Argentina appears stuck in an import substitution industrialization [ISI] time warp. I sure would love to sell bell-bottom pants there for the full retro flavour, but they are of course throwing impediments to all sorts of imports. As the blog's subtitle goes, I affected an attitude of elegant desperation at an Associated Press article that discussed the growing unavailability of bicycles in Argentina despite its self-styled populist government promoting their use.

Now Americans are known for their mind-boggling levels of mega-obesity and hyperpollution. Rightly identifying more with progressive Europeans than Americans, Argentinians have taken up the cause of bicycling in urban centres. Doing so doubly makes sense: not only do you get much-needed exercise, but you also cut down on carbon emissions getting stuck in interminable traffic. Or so the reasoning would go since the government's neo-ISI policies have created [surprise!] a shortage of bicycles together with a burgeoning grey market for them:
Civic leaders have tried to make Buenos Aires a bicycle-friendly city, but that's been stymied by another government initiative — protectionist import bans designed to spur domestic production that have instead strangled supplies of everything from bananas to prescription drugs...

A record 1.8 million bicycles were sold in Argentina in 2011, and the industry had predicted sales would surpass 2 million bikes in 2012, producing an estimated $510 million in revenue. Now, the Argentine Bicycle Chamber of Commerce and Industry [!] estimates some 1.6 million bikes will be sold in 2012. And that number would have been lower but for a Buenos Aires city program that offered loans of up to $600 per bike purchase, the group says. In its first week, the financing program drew 4,000 requests at the 21 bike shops taking part. 
As with most of these retro-protectionist measures, the ultimate loser is the consumer:
If anything, Argentines have learned how to be creative, as President Cristina Fernandez imposes tight currency controls and other economic measures designed to fight high inflation and stop the flight of dollars...

Argentina's bike sector, however, wasn't prepared to export or otherwise meet local demand, which meant the price of bikes and bike parts has shot up and stock is dwindling, says the bicycle chamber's president, Claudio Canaglia. At Nodari, a Mongoose bicycle that retails for $150 in the United States now costs the equivalent of $700 in Argentina.
Once again, all this demonstrates that economic mismanagement tends to compound elsewhere since it is so difficult to sort out all the cascading effects of ill-though policies. Meanwhile, it's no-go for Shimano as cyclists must make do without during this "festive" season.