Planificación and the Economics of Collapse

By Michael Kavalar

On the 12th floor of a nondescript office building in Buenos Aires's Microcentro district, I'm led into a room devoid of everything save an old metal table, two chairs, and a money-counting machine. I've been sent here by my ever-helpful Airbnb host, who has stressed three things before scheduling the appointment: Only suckers change money at the airport or on nearby Florida Street; she needs to be the one to schedule this kind of rendezvous; and I should bring at least $500 in cash. Don't worry, she assures me, it's safe.

And so proceeds my headlong introduction to Argentina's informal dollar trade economy, known here as the dolár blue, or "blue dollar," a term that refers not to counterfeit currency per se, but the unofficial rate one can buy or sell dollars for on the street (often quite literally). During my visit the official rate hovers somewhere around $7.77 pesos to the dollar, while the blue inches toward $11. This means that the $100 I carelessly changed at the airport for 777 Argentine pesos could have fetched me something closer to 1,100 pesos elsewhere; that turns out to be the equivalent of four to five decent meals in the city's abundant restaurants. No small change.

"How much did you bring?" asks the affable, well-dressed man across the table. I hand him a stack of $20 bills totaling $500. He places them in the money-counting machine, verifies the amount, and pulls out a large-font calculator.

"Today I can only give you $11.20 per dollar," he tells me. "If you had brought $100 bills, it would be $11.50." Punching in the figures, the man — basically a dollar-to-peso wholesaler — turns the calculator back toward me and asks if I'm okay with the deal. I am.

What I've just experienced is another chapter in a long history of currency volatility. The most recent major upheaval was the "Argentine Great Depression" — a period dating from 1999 to 2002 and culminating in the decision to decouple the value of the Argentine peso from that of the U.S. dollar. Practically overnight one-third of Argentines' savings wealth vanished into the market. Riots and political upheaval followed. Meat trucks arriving from the countryside were ransacked. Political turmoil ensued and the country defaulted on its foreign debt.

Coupled with double-digit inflation, this scenario seriously undermined faith in the long-term stability of the Argentine peso. Argentines began to seek more stable places to park their money and the U.S. dollar, the world's de facto reserve currency, was a natural choice. But when the national government, fearing the flight of capital, decided to enact tough currency exchange restrictions at the end of 2011, the result was a burgeoning illegal trade in the dollar. Hence the blue rate, and the swarms of currency traders known as arbolitos — little trees, on account of their standing around all day with green bills — and the quieter places like this stripped-down office where I find myself now.

Are they blue?

Perhaps most remarkable about the blue dollar is the extent to which it permeates day-to-day economic life. Not only are dollars in hot demand on the street, but the blue rate — itself technically illegal — is quoted on the nightly news and highlighted in front-page coverage of La Nación and Clarín, the nation's two largest papers.

But the blue rate is not the only symptom of persistent inflation. As my host and others pointed out, it distorts day-to-day consumer purchases. Why wouldn't someone spend their money today if it might lose 30 percent of its value by next year? And so amidst all the economic adversity, the city's cafes and restaurants remain improbably and perpetually busy.

This is a perverse short-term boon to the economy in a climate of uncertainty. And this dynamic sometimes leads citizens to choose the best among a series of terrible options, like purchasing cars as investments (they may depreciate, but less quickly than inflation might obliterate the equivalent value from a bank account), or skyrocketing interest rates on mortgages (typically a standard rate plus the rate of inflation, generally above 20 percent).

Back in Chicago the money I don't spend eating out today might undergo some negligible degree of atrophy at an inflation rate of one to three percent, but in Argentina the money I save forgoing a tasty milanesa suiza today might not be worth so much as a coffee next year. Or so the logic goes.

It's also worth noting how inflation-avoidance has leached into other aspects of Argentine life, even when prices are not intentionally frozen (something the federal government routinely does). Even taking into consideration a 354 percent increase since 2012 for the price of a subway ticket, this still leaves the cost of a subway ride woefully undervalued. Ditto for the water rate structure and other services, for which any price adjustment to match inflation carries a heavy political cost. In short, an array of terrible choices for laymen and leaders alike.

In the trenches

Although I'm happy about the crash course in local economics, I've ostensibly come to Buenos Aires for a vacation. But I quickly find myself growing restless and frustrated by the lack of local planning histories in the city's numerous bookstores. I decide it might be worth stopping by the local planning office, which is why a week into my trip I find myself standing amidst a group of frazzled, elderly porteños — what the locals are called — in the crowded, cubiclelike waiting room of the city's Ministry of Urban Development. They've come to pull permits for apartment modifications or to lodge complaints. I'm hoping someone will give me a brief tour of the office.

The Ministry of Urban Development is located in an impressive bullpen of a place, on the eighth floor of a 1960s-era modernist structure along the city's Avenida 9 de Julio ("the world's widest avenue"). The lobby outside the elevator offers a stunning view of the city's iconic obelisk and the bustle of pedestrians, cars, and BRT buses that make the avenue so thrilling and overwhelming at the same time.

Through a set of plastic dividing walls that separate the cramped reception area from the main floor, one can make out a seemingly endless stretch of waist-high cubicle partitions. Scattered here and there are stacks of papers and overflowing boxes; the walls are plastered with assorted planner paraphernalia: aerial images of Buenos Aires's rigid Law-of-the-Indies street grid, maps with dog-eared sticky notes and colored dots stuck here and there. The air of bureaucratic frenzy mixed with purpose gives the place an odd Law and Order feel. I'll later learn that this single ministry employs some 300 individuals doing a mix of planning, urban design, and technical GIS-related work.

When my turn finally comes, I'm an awkward mess. "You want what exactly?" asks the receptionist, the other two employees turning to watch our conversation. "I'm a planner from Chicago. Was hoping to get a look at what you guys do here. Thought I'd stop in. No worries if it's a bad time." I've got a knack for awkward introductions, and the fact that I have to deliver this one in Spanish is not helping. But despite all this, or perhaps thanks to it, 10 minutes later I'm standing in front of a very helpful ministry employee.

Julián Álvarez Insúa, a deputy planner, is articulate and fiercely well-versed in his trade, his city, and his country. He's also clearly excited about the chance to talk about what he and his colleagues do and starts by handing me a copy of Buenos Aires's recently completed, hefty, 50-year strategic plan.

"A gift," he says with a smile before leading me through some of the book's many illustrations, which highlight everything from the city's aggressive transit expansion plans to schemes for bringing shanty towns into the urban fold. There is a running thread of making the city more amenable to people and, like the city itself, no small amount of inspiration has been taken from strategic plans from perceived peer cities like Barcelona and Paris.

On our way to a conference room he grabs another book — an annual publication highlighting the ministry's various interventions throughout the city. In line with the strategic plan, it's called The Humanization of Public Space. It's an impressively polished product, produced in-house. The installation of pedestrian-priority woonerf-type roads, the likes of which I've been noticing throughout the central business area, takes center stage and the whole book has a sort of public awareness tack to it.

Despite the ambient frenzy, Insúa invites me to sit down and talk shop over his afternoon mate, a traditional tea drink, which he kindly shares with me. While Buenos Aires sometimes feels like an odd pastiche of Spanish and French influences, as in the many Haussmann-inspired structures that line its monumental avenues or the flourishing cafe culture, here at least is an unquestionably geographically grounded tradition. Wandering the Mate Museum in nearby Tigre the following day, I'll learn that the cultivation of the mate tea leaf is limited to a small area straddling the borders of Argentina, Paraguay, Uruguay, and Brazil.

Our conversation darts from the place of the pedestrian in the city — "We need to do a better job of making motorists understand that they are guests in a public space" — to the role of the informal economy, which he estimates may represent up to 40 percent of the city's total economy. Insúa is unaware of services like Airbnb but is pretty sure they would not be allowed by city code. I comment on the chaotic color schemes and logotypes on the local buses — a system that leaves me wholly perplexed, and pushes me to go by foot or the city's subte (Latin America's oldest subway system).

"Different companies are awarded different concessions for different routes," he explains about the buses, "but there's no obligation to paint their buses in any particular way." Admittedly, the ensuing visual chaos is appealing, a sort of urban "freedom within constraints," but for me it is nevertheless proving to be a barrier to wayfinding.

In all fairness, Insúa's ministry exercises no control over transportation in the city. When I ask about the Avenida 9 de Julio's new BRT system, which replaced four lanes of open vehicular traffic with dedicated busways (yes, it's really that big), and which has been making the rounds of pop-urbanism publications like CityLab and Streetsblog, he notes that his department had questioned its wisdom.

"It's not that we're against it," he notes, "it's just that there's already a subway that runs under that same route. If we had to pick, we'd have put it somewhere else."

During my short visit, Insúa offers a long list of other challenges facing Buenos Aires: the lack of affordable housing, the effects of continued inflation on the city's ability to provide basic services without massive subsidies or fare hikes tantamount to political suicide, and the uneasy relationship between the city's motorists and a growing bicycle culture. Except for the crippling inflation, all are concerns familiar to any North American planner today.

Something else is teased out during our conversation: the role of culture in all these dynamics. Reminiscing about a recent trip to Singapore and its top-down government structure, he makes a compelling case for the need to "imagine a city in line with the kinds of people that inhabit Buenos Aires." He continues: "We see lots of impressive things happening in North American or European cities, but we've got more basic problems to address before we can follow those models."

A look around

Standing at an intersection in the city's Abasto neighborhood — about two miles from Avenida 9 de Julio and the city center — the feeling is one of infiniteness: an endless flow of pedestrians, taxis, cars, buses trailing in and out from every direction, and this one intersection only one among many. I've been walking for hours, from Recoleta to Belgrano to Caballito and back, and have a feeling of déjà vu. At this moment at this particular intersection night is descending on the city in a wash of orange, Southern Hemisphere summer light. It's the kind of moment in the kind of city that makes you want to keep walking until your legs give out.

Indeed, Buenos Aires is an eminently walkable city. Some neighborhoods, like the tony Palermo district with its hip eateries and low-scale, two- to four-story buildings, feel distinctly North American, while others like Recoleta and Retiro impress you with a fundamentally Argentine feel: palatial Haussmannian structures and towering cathedral vaults. Walk long enough and you're sure to find relief from the grid: a plaza that suddenly pulls you toward the National Congress building, or the remnants of a long-forgotten World's Fair.

Buenos Aires — a city of 2.9 million but with a metro population of nearly 13 million — is home to nearly one-third of Argentina's 41.4 million citizens. It is the nation's largest city, but also the country's economic, political, and cultural center — predominant in this large and relatively untouched country. Imagine a metro New York City of some 100 million citizens that also happened to be the seat of the federal government, film production, and the only major port of entry to the country.

But while the city benefits from this privileged position, it has also been exposed to a history of economic and political upheaval. Buenos Aires may have given the world tango and the words of masters like Jorge Luis Borges and Julio Cortázar, but it also lives under the shadow of persistent inflation, nationalizations, and sovereign debt defaults.

As I write this, the aftermath of Argentina's 2001 crisis is rearing its head, this time in the form of a messy legal fight over $1.5 billion in bonds the country defaulted on back then. While generally overshadowed by other news in the U.S., in Argentina the debate has heavy political overtones, as evidenced by the images of vultures against an American flag backdrop plastered throughout the city; the posters call for an end to the "vulture funds," i.e., American hedge funds that are demanding to be paid.

More darkly, the country is still coming to terms with a brutal period of government suppression known as the Dirty War, which lasted from 1976 to 1983. During this time an estimated 10,000 to 30,000 dissidents vanished. Some accounts report bodies being dropped from planes over lakes and the Atlantic coast, their bellies slit open so that they might more quickly sink.

It is a dark corner of the collective memory, exacerbated by the knowledge that both perpetrators and victims continue to inhabit this endless city, most of them unaware of each other as they sit side by side in the upscale cafes of Recoleta or on the benches of a rumbling subway car far below the city streets.

Departures

The morning of my departure I step out for one last cortadito (a kind of espresso) and a stroll. Once in the cab to the airport, I feel as if it's too soon to be leaving town, so I'm happy when the driver veers toward Avenida 9 de Julio on the way to the highway. One last chance to appreciate the obelisk, the municipal opera house, and an avenue whose image I've had in my mind since first seeing it in a Spanish textbook many years ago.

Passing the single building that juts out into the stately avenue, the Ministry of Public Works, with its large neon outline of Evita Perón — the late First Lady of Argentina (in)famously played by Madonna in a 1996 biopic — I ask the driver if he remembers when the neon image was installed and if it was controversial. "I remember everything," he laughs, but says nothing more about the sign. Instead he tells me about the blocks of buildings that were demolished to make way for the avenue a century before anyone thought about putting Evita's image or the BRT here.

Once we are on the elevated highway to the airport, the city trails by in an endless gray-white sweep of squared apartment blocks, mansard roofs, and church domes topped with heavy concrete crosses. It's a city with a past that continues to resonate. And like any city, it is one whose reality is a complex balance of things built and demolished, a pastiche of people and things remembered, forgotten, and not yet understood.

Michael Kavalar is an urban planner and designer in the City Design Studio of Skidmore, Owings & Merrill's Chicago office.

Resources

Image: Avenida 9 de Julio is the biggest, busiest, and most iconic street in Buenos Aires. The latest addition to the boulevard: new bus rapid transit lanes running right down its center. The move has decreased commute times, but it does have its critics. Photo courtesy Institute for Transportation & Development Policy/City of Buenos Aires.

The Crystal Sustainability Series: Head of Transport in Buenos Aires, Guillermo Dietrich. An interview with Dietrich from November 2013 outlines the values that drive sustainable transportation decisions in the city. Watch for stunning footage that highlights how thoughtful planning is changing the face of this iconic Latin American metropolis: www.c40.org/blog_posts/the-crystal-sustainability-series-buenos-aires-s-guillermo-dietrich-and-governing-mayor-of-oslo-stian-berger-rosland. Source: www.c40.org/awards.