Argentina’s President Cristina Fernández de Kirchner’s has designed a new initiative to tackle the country’s economic malaise: impose severe restrictions on Argentinians’ access to online shopping.
As of today, Argentinians must submit a signed declaration to the tax agency before they can receive their goods and are now limited to a maximum of two online international acquisitions for delivery per year, for a total of $25. Those restrictions were announced serially on Tuesday and Wednesday. For anyone who goes above that, a whole host of problems await. First, the standard 50% tax on imports which many in the past sought to avoid. Second, pure bureaucratic hassle. To get their hands on anything above the two-purchase/$25 limit, they will be obliged to fill out a form with a detailed description of their purchases and present it at a customs office or tax agency to receive their goods. No more home delivery for Argentinians, sadly. The Federal Administration of Public Revenue (AFIP, in its Spanish acronym) says it had been a daunting task to keep records of consumers’ international transactions, hence the need for it to be much more regulated.
Foreign reserves in Latin America’s third-largest economy, which suffered the second-highest inflation in the region for 2013, have plummeted to their lowest levels in over seven years. By increasing restrictions on online sales, seen as imports, the government hopes to boost national demand, as well as to protect Argentine industry and jobs. As of Monday reserves stood at $29.5 billion, down from $40 billion at the start of last year, according to the FT. Kirchner, and her economic team, must see that one of the big problems comes from shoppers sending their money to overseas retailers, a practice that, as in the rest of the world, is becoming more and more popular.
Argentina is attempting to prevent a possible balance-of-payment crisis; lower its high inflation — over 28% according to private estimates — and control the value of the black-market exchange rate (up to almost 12 pesos per dollar, versus the 6.9 the government assesses). Analysts believe the government will announce restrictive measure to the black market in the upcoming weeks. Import restrictions and currency controls are known to be in the policy toolkit of recently appointed economy minister Axel Kicillof. Meanwhile Kirchner will continue to find ways to fight against the dollar, and challenge international organizations such as the IMF who insists it makes changes to its economy, instead of confronting the long-lasting issues head-on.