Uruguay in check by boom in bargain prices in Argentina

Every time Alfonso Formoso needs to refuel, he travels to another country. He drives about 30 kilometers from Salto, the city of Uruguay where he lives, to neighboring Concordia, in Argentina. By the way, she goes to the supermarket and has something to eat. Pocket hers, grateful. The Uruguayan economy, not so much.

Faced with the constant devaluation of the Argentine peso, tens of thousands of Uruguayans daily cross the bridges located at three points along the river border of more than 800 km that separates the two countries to take advantage of the much cheaper goods and services west of the Uruguay River. .

“Sometimes I go twice a week. I just came yesterday with a friend”Formoso told AFP in a restaurant in Concordia. “We didn’t even look at the price much”confesses this 23-year-old university student.

Diego Labeque Drewanz, Argentine coordinator of the Concordia-Salto Border Center, highlights the growth of the neighborhood flow, which has caused lines of vehicles six kilometers long.

“We have had peaks of up to 14,000 people per day”, account. The daily average is 8,800 since January.

The phenomenon worsened after the primary elections in Argentina in August, after which the government devalued the peso by around 20%, given strong pressure on the dollar that forced the central bank to use its dwindling reserves to support the exchange rate. .

In Argentina, where, unlike Uruguay, access to the exchange market is restricted, the devaluation widened the gap between the official dollar, the reference for pricing, and the dollar traded on the black market.

With this increase in the parallel dollar, the difference in prices between Salto and Concordia “I would be above 200% on average”and in some articless “would go to more than 300%”explains Gimena Abreu, from the Economic Observatory of the Catholic University of Uruguay (UCU), to AFP.

The last survey of the UCU, in July, showed that Salto was 126% more expensive, well above the 42% July 2015, when the indicator began to be developed.

Abysmal

Many Uruguayans have moved to Argentina, where their income goes further.

“The difference is abysmal!”, exclaims Carlos Garcilar, a 65-year-old mechanic who has just retired. He rents an apartment in Concordia for a fifth of what he would pay in Salto.

Maikol Horvat, a 39-year-old security guard, is looking for a house to go with his whole family to Villa Zorraquín in Argentina, near the binational bridge.

“I am going to continue working in Salto and traveling every day”, he tells AFP.

In Concordia he put fuel for less than half of what it costs in Salto. Later he did “a little assortment” in a supermarket. In Uruguay, with the same money, “we buy two, three things,” she says.

According to Adrián Lampazzi, president of the Concordia Trade Center, the influx of Uruguayans “doesn’t make up for it” the “crisis on this side”in a city that also holds the sad record of being the poorest in Argentina.

“It helps to survive, there is always someone who makes a difference, but it is not something massive but something very specific”points out.

At the M&W hair salon, Ezequiel Rubin serves many Uruguayans. “They spend without problem and leave good tips. It works for us”says.

“Tsunami”

In Salto the economic blow is felt. The department registers one of the highest unemployment rates in Uruguay (12.8%), according to official figures.

“We have had to lay off staff and we have people on unemployment insurance,” affirms María del Carmen Villar, owner of the Pasteur Pharmacy.

Pharmacy items, especially medicines, are among those most affected by the price difference with Argentina.

Rodolfo Germano, manager of the Parada 19 service station, also deplores the drop in sales, even with the tax reduction for border gasoline provided in Uruguay.

“There is smuggling of all products, including fuel,” complaint.

More than 100,000 people traveled from Uruguay to Argentina one long weekend in August. The figure represents 3% of the Uruguayan population.

Vera Facchin, president of the Salto Shopping Center and the Uruguayan Business Confederation, warns that Uruguayan spending in Argentina will be around 1,000 million dollars in 2023, which is equivalent to one point of national GDP, according to the Study Center for Development.

“This is a problem that would seem to be on the coast, but it has escalated to a national level,” emphasizes.

German alert: “It is like when the sea is withdrawn by a tsunami. We enjoyed collecting little snails that used to be covered by the ocean, but then the wave comes and sweeps it away”.

Source: AFP