Global Traveler Magazine

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Global Traveler Magazine

August 2006

Having weathered the worst, Buenos Aires is back and business is good.

Looking at Buenos Aires from the window of a taxi on the world’s widest avenue — Avenida 9 de Julio — it’s all a bit difficult to believe. Just five years ago, Argentina’s economy collapsed, impoverishing more than half the population and leading to the largest loan default ($155 billion) in modern history. And yet, by appearances, the crisis has come and gone with hardly a trace.

Massive French-style mansions and soaring steeples, most built around the turn of the 20th century when Argentina was one of the richest countries in the world, overlook grand plazas and manicured greens. Stylishly coiffed, if conservatively dressed, executives chat on cell phones while sipping espressos in curbside cafes or feasting on succulent, homegrown steaks in smoky parillas; the air buzzing with Castellano (Argentina’s distinctive, slang-saturated version of Spanish).

The recession of the late 1990s and the devastating devaluation of the peso, from 1-to-1 with the U.S. dollar to 3-1, literally overnight, certainly have left their scars — both financial and emotional — as well as a lingering distrust of any advice originating in Washington. But if the crisis was crippling in a way few countries have ever known, the recovery has been equally impressive.

Since 2003, when populist president Nestor Kirchner took office, the economy has steamed ahead at an average clip of nearly 9 percent a year, far outpacing the rest of the region. And there’s little sign of any slowing; the International Monetary Fund projected growth of 7.6 percent for Argentina in 2006. Even neighboring Chile, the biggest economic success story in the Americas over the last two decades, can’t boast those numbers.

As China and India drive up demand for natural resources, Argentina, the world’s fifth-largest exporter of agricultural goods, is profiting as never before. Soy, meat, dairy, grain, tobacco, wool, and hide products from the lush Pampa Húmeda are delivered via highway to Buenos Aires, the nation’s capital and biggest city. Located on the Rio de La Plata (River of Silver), the country’s hub of commerce, industry, finance and culture is also one of the world’s busiest ports.

From its founding in 1588 by the gold-seeking Spaniard Pedro de Mendoza, Buenos Aires’ significance as a point of distribution, rather than any precious metal, has fueled its growth.

Long before declaring its independence in 1810, porteños (port dwellers), as the city’s inhabitants are known, defied Spain’s orders that all trade pass through Lima, Peru. A thriving industry in contraband smuggled into the “City of Fair Winds” laid the financial foundations for South America’s most developed country.

That may seem a tenuous title given the boom-bust cycle that has long characterized Argentina’s economy. But current trends, like a decreasing poverty rate, down 25 percent since 2002, and steadily shrinking unemployment, have given Argentines and outsiders alike reason to believe the best times are yet to come. Investment has more than doubled since the crisis, hitting $41 billion in 2005, or 24 percent of GDP; the automotive industry is bouncing back; and a construction boom — the sector expanded by 20.5 percent last year — is breathing new life into once-deserted areas of the capital.

Most remarkable of these rejuvenated spaces is Buenos Aires’ 47th barrio, Puerto Madero. Built in 1889, the port was abandoned soon thereafter, too small for the burgeoning maritime trade empire it was designed to serve. When that empire fizzled out, the port’s gutted, rat-infested warehouses came to reflect the dashed hopes of the nation itself. In 1989, however, with inflation at almost 200 percent, president Carlos Menem sold the land to a private consortium, sparking a process of development that eventually would render a new port with a new purpose.

Today, Puerto Madero embodies a resurgent, confident, and ever-modernizing Buenos Aires. High-end eateries and high-rise office buildings have filled the void, and an all-but-forgotten mound of rubble has become the most valuable residential real estate in Latin America (prices average $1,800 per square meter). Indeed, residential projects are driving the area’s rebirth, and chief among them is the Faena Hotel + Universe.

A luxury hotel and apartment building in one, the Faena is the brainchild of Argentine fashion designer-cum-entrepreneur Alan Faena. Designed by French architect Phillipe Starck, it's the ultra-cool crash pad of Buenos Aires' international jet-set. And still it strives to preserve, as Faena puts it, "the essence of who we Argentines are." Housed in a historic brick grain silo, the hotel is just one of a series of restored buildings that make up Faena's grand plan: "El Porteño Art District." The objective, he said, is to "redefine the living experience by transforming an urban space into a center for the arts and creativity."

Still, the area's transformation hasn't been entirely urban or carefully planned. One of Buenos Aires' most attractive features is the Resérva Ecológica. During the military dictatorship that ruled Argentina between 1976 and 1983, authorities sought to build a satellite city across from the port. But after the military lost its grip on power, plans stalled and nature took its course. Today, joggers and bikers take to the 868-acre green space for fresh air, exercise or romantic strolls by the water.

The economic turnaround hasn't been without its problems. At 12 percent, inflation is a continuing concern. The government has resorted to controversial price freezes as well as a ban on meat exports. But prices keep creeping up. According to the president of the Central Bank of Argentina, Martín Redrado, that's natural for a rebounding economy. Unlike in years past, he said, Argentina's fiscal solvency and prudent monetary policy can keep it under control.

Buenos Aires is business-friendly, comfortable and connected. U.S. travelers don't need a visa to enter the country, and most porteños are glad to show off their English, which many, mostly younger people, speak quite well. There are 17 five-star hotels, endless options for fine dining, and cybercafes (or locutorios) all over the city. WiFi hotspots are increasingly common and cell phones are ubiquitous.

With its biggest fiscal surplus in 50 years, a trade surplus bolstered by Asian demand, tourism levels at historic highs, and consumer spending on the rise, Argentina is putting a painful past behind it - and Buenos Aires is leading the way.

 

Just the Facts

Standard Time Zone: GMT -3
Phone codes: 54
Currency: Argentine peso
Entry/Exit Requirements: A valid passport is required for all U.S. citizens, but no visa is required for visits up to 90 days for tourism and business.
Official Language: Spanish
Key Industries: Processing and manufacturing of agricultural goods, automobile manufacturing, oil refining, metalworking and textiles

  

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