Argentina: Where Cash Is King And Robberies Are On The Rise : Parallels With spiraling inflation and a distrust in banks after the country's 2001 default, Argentines are keeping more cash on hand. And that means robbery rates are spiraling, too.
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Argentina: Where Cash Is King And Robberies Are On The Rise

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Argentina: Where Cash Is King And Robberies Are On The Rise

Argentina: Where Cash Is King And Robberies Are On The Rise

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In Latin America, Argentina is the robbery capital of the region. That's what an annual United Nations report shows. NPR's Lourdes Garcia-Navarro was recently in Buenos Aires when she discovered one unexpected explanation for the crime surge.

LOURDES GARCIA-NAVARRO, BYLINE: Leonel Kaplan is a jazz musician. He often has to travel abroad for work.

LEONEL KAPLAN: (Speaking Spanish).

GARCIA-NAVARRO: I went to the bank to change money because I was going to Europe, he says. And then he goes to get a haircut. He's feeling pretty happy and relaxed. He takes the bus home after what had been an uneventful trip.

KAPLAN: (Speaking Spanish).

GARCIA-NAVARRO: As I get down from the bus, a motorcycle with two people wearing helmets cuts me off. One gets off and takes out a gun and says to me directly - give me the 500 euros you got in the bank, he says. They knew exactly how much he had changed. It was, he says, a pretty professional job. Brazil, Venezuela, Honduras, for example, have the regional lock on murders. They are some of the most violent countries in the world.

Argentina is still comparatively pretty safe, but, according to the UN, Argentina's robbery rate is 41 percent higher than even Mexico's, which comes in a distant second. To understand why, you have to look at the country's recent economic history.

Robberies in Argentina started soaring, according to analysts, after the 2001 default when the country, in effect, declared bankruptcy. That would seem to be logical. Financial crisis means more poverty and more thefts, right? Actually, not exclusively. Some analysts give another explanation, and it has to do with what Leonel Kaplan told me at the end of our interview. He says he doesn't have a bank account.

KAPLAN: (Speaking Spanish).

GARCIA-NAVARRO: I would never put my money in a bank, he says, because I know it could disappear. A bank is no more secure than underneath my mattress, he says. People in Argentina don't trust the banks, and that means they carry around cash - a lot of it - to pay for what they need.

ALAN CIBLIS: You can keep it in safety deposit boxes that they have in the vaults. That's probably the safest place. People have it under their mattresses.

GARCIA-NAVARRO: Alan Ciblis is the chair of the political economy department of the National University of General Sarmiento. He says most people keep their savings these days in cash in a variety of places because of recent experience. After the 2001 default, the banks in Argentina were locked down and many counts were raided. People lost a lifetime of savings. And now there is a different issue that makes people not want to bank their money - inflation.

CIBLIS: When inflation begins to creep up and if you have some extra pesos and you put it in a certificate of deposit in a bank, but the interest rate is below the inflation rate, then, you know, you have negative rates and you're losing money.

GARCIA-NAVARRO: So let's say inflation is at 40 percent a year in Argentina, which is what the estimates say. The banks may only be giving you 20 percent interest, which means your money is losing its value. So, most people would rather risk the possibility that a thief could get into the house and steal the money hidden in the drawer than face the almost certainty that they will lose money in the banking system these days. Alberto Binder is an Argentine criminal expert.

ALBERTO BINDER: (Speaking Spanish).

GARCIA-NAVARRO: In my opinion, the lack of the trust in the banking system, which is a part of Argentine culture now, is an influence, he says. But there are other issues. Drug crime is growing.

BINDER: (Speaking Spanish).

GARCIA-NAVARRO: Argentina is basically a tranquil country, he says. But that conceit is being used as a kind of opium. I think if you're a calm country surrounded by troubled ones, that should put you on maximum alert. Lourdes Garcia-Navarro, NPR News.

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