A new car, a liter of gasoline, sneakers, a dress, or a simple burger have one thing in common: they are more expensive in Argentina than in New York, Chile or Lima.
According to data taken from an analysis done by economist Marcos Hilding Ohlsson in Argentina, a liter of gasoline is 75% more expensive than in New York, a new car costs 50% more than it does in Chile, and the cost of a premium pair of jeans is double that of the same jeans in Lima.
“Comparing Buenos Aires to other capitals around the world, it can be seen (especially in relation to consumer goods) that prices in Argentina are on average around 40% higher than in cities like Lima or Santiago, Chile. Even when compared to New York they are around 30% higher” the report highlights.
“This is just a small sampling, but the difference can be even higher when looking at technological products. The problem is not only an economic one or one regarding prices but one that this ends up affecting the everyday life of Argentines.”
Consulted by El Cronista, Hilding Ohlsson explains that “even if we have seen some improvement regarding trade liberalization, for example the end to restriction on the monetary market, the lowering of tariffs to technological products and the simplification of the bureaucratic process for dealing with exports, there are still some barriers to trade that continue to make Argentine exports expensive.”
Tariffs can be as high as 35%, depending on the product, but Hilding Ohlsson mentions that traders who were consulted to prepare the report have stated “there are other types of obstacles when importing, for example the amount of paperwork required by Customs, that include approval by different labs for components of the same product and in many cases can delay the container at the port.”
For example, “Chile imports 270 different electric chainsaw models, while in Argentina only 70 are imported” Ohlsson highlights. He continues remarking that “the difference is that in our country you need approval for each part of the kit, making it harder to get it.”
Not every product compared by the foundation is imported, but this type of good is used for reference because the same model is internationally commercialized.
Asked about why a product that is elaborated under a foreign license, like some hamburgers, but uses local ingredients and labor can cost more than in the rest of the world, Ohlsson claims that “the high fiscal cost and the high labor cost resulting from it play a fundamental role in this.”
“The case of gasoline is very particular because the price of oil used at refineries is higher than its price in international markets. This measure was taken by the government in order to sustain the price of the local barrel, but it ends up being paid by the users” Hilding Ohlsson concluded.
* Originally published at El Cronista. Courtesy of writer Francisco Casas.