In foundering Argentina, entrepreneurs shift gears
How four small-business owners have stayed afloat in Argentina's economic crisis
By Adam Raney | Special to The Christian Science Monitor
BUENOS AIRES - Braving icy temperatures on a Saturday morning, Carlos Arévalo
strikes out in the predawn darkness across central
Argentina's Sierras de Córdoba mountains in hopes of closing a deal.
Mr. Arévalo has sold everything from books to cement and even cold
cuts, crisscrossing the Argentina's back roads for over 30 years. Now
he sells plumbing supplies. He has survived a fair share of recessions,
but he hasn't seen anything like the current one.
"Seven months ago, when there was money, there wasn't any problem," Arévalo
says. "I could phone people and they would just have me
put the product on the truck. Now you have to practically pull coins out
of the people."
Arévalo is one of a breed of small-business survivors. In the midst
of the worst economic crisis in a century, Argentine enterpreneurs are
finding ways – through sheer grit, ingenuity, and faith – to adapt and
even prosper.
To be sure, they're fighting a stiff current. Though the economy grew by
0.9 percent last quarter – the first increase in two years –
unemployment is at 25 percent, the peso has fallen 70 percent since devaluation
at the beginning of the year, and bankruptcies have
soared. And on Monday, the government said it may not be able to meet its
current obligations to international lenders, which could trigger
another default and push the country into even deeper economic woes.
But as in any tough period, those who succeed are undaunted by the pessimism
around them. These days Arévalo is out on the road
more, even on weekends. He logs some 2,000 miles each month, about twice
as much as before the crisis.
But his returns have shrunk decidedly. On this call to one of his most
loyal customers, Alfredo López, who owns a hardware store in Villa
Delores, Arévalo's commission for the 12-hour day will be about
$40, one-tenth of what it was less than a year ago. "Every night, I ask
God
for one more day. Anything else would be greedy," he says with a smile.
Arévalo isn't the only member of his family trying to stay afloat.
His sister, Carmen Nou, and her husband, Pablo, own a plumbing-supplies
store in Córdoba, Argentina's second-largest city. They've had to
adapt to meet the changing needs of Argentines in today's flagging
economy.
The biggest difficulty for the Nous is the lack of money in circulation.
Since December, the government has limited bank withdrawals. The
freeze, or corralito, caps withdrawals at just over $300 a month. With
little cash on hand, most people are buying only the necessities.
"Nobody is interested in buying a nice matching set to replace their old
bidet, toilet, and sink," says Mr. Nou. "Instead they are repairing
the problems in their bathrooms and kitchens and spending as little as
possible."
As a result, the Nous have changed their stock, focusing on spare parts
for repairs. The Nous, who typically work six days a week, have
been able to keep their doors open as countless other family businesses
close. Despite the difficulty, Carmen Nou remains optimistic. She
and her husband even hope to open a new store at the end of the year.
While the Nous try to get by under the corralito, Belisario Rodriguez prospers
from it. Mr. Rodriguez, a Buenos Aires attorney with over 20
years' experience, has found a new specialty: forcing banks to give customers
their money back. Although the corralito restricts large
withdrawals, the Supreme Court accepts appeals from customers who challenge
the law's constitutionality.
These appeals, known as amparos, are primarily reserved for the elderly
and infirm, who may need more money for special circumstances,
such as medical treatment. Since the restrictions began, more than 140,000
amparos have been awarded, ranging from a few thousand
dollars to the millions. Rodriguez, who has filed three amparos, relies
on his old clients and word of mouth. Having successfully argued
each case, he is confident that more people will come knocking on his door.
The process has become quite confrontational. On one occasion, Rodriguez
threatened to call the fire department to break open the vault
before the bank finally caved in and gave his client $40,000. "They didn't
think I was serious until I pulled out my cellphone and dialed," he
says. Rodriguez's cut is typically 10 to 15 percent of the award, depending
on his relationship with the client.
Although he still has other work, Rodriguez is happy to have found a new niche. "Amparos arrived like a gift," he says.
But, it is unclear how much longer Rodriguez and other lawyers will be
presenting these cases. Two weeks ago, a lower court ruled
unanimously that some of the government's efforts to stabilize the economy,
including the corralito, are unconstitutional. President Eduard
Duhalde is appealing the decision to the country's Supreme Court.
Even the smallest of small-business owners are changing to survive. Roberto
Montes runs a kiosk in Floresta, one of Buenos Aires' many
neighborhoods. For years he has sold packs of gum, soft drinks, and beer.
When the crisis came last December, Mr. Montes saw a golden
opportunity for his little shop.
"Since I sell [drinks] and snacks at a lower price than bars and discos,
people can still afford to stop by," says Montes. When he noticed
that more customers were hanging around the shop, he decided to place a
few tables on the sidewalk. Then he added a foosball table and
his corner store was transformed into a local hot-spot.
Across the city, ubiquitous kiosks are challenging bars and cafes for the
ever-shrinking share of the entertainment market. While the
discos are having a hard time attracting customers, kiosks are full every
weekend.
Some in Buenos Aires don't like the way their sidewalks have been transformed
into the local watering hole. Mariana Alfaro who owns a
bed and breakfast complains that "the customers at the kiosks don't respect
the neighborhood and leave trash everywhere." She also adds
that the kiosks don't have a license to sell alcohol for on-site consumption.
While she doesn't file formal complaints, she hopes that the
police start to crack down.
Montes doesn't think that he is causing any problems, he looks at his business
as a service to the neighborhood. "What are they going to
do, close the only affordable bars in Buenos Aires down?" he asks.