In foundering Argentina, entrepreneurs shift gears

Braving icy temperatures on a Saturday morning, Carlos Arévalo strikes out in the predawn darkness across central Argentina's Sierras de Córdoba mountains in hopes of closing a deal.

Mr. Arévalo has sold everything from books to cement and even cold cuts, crisscrossing the Argentina's back roads for over 30 years. Now he sells plumbing supplies. He has survived a fair share of recessions, but he hasn't seen anything like the current one.

"Seven months ago, when there was money, there wasn't any problem," Arévalo says. "I could phone people and they would just have me put the product on the truck. Now you have to practically pull coins out of the people."

Arévalo is one of a breed of small-business survivors. In the midst of the worst economic crisis in a century, Argentine enterpreneurs are finding ways – through sheer grit, ingenuity, and faith – to adapt and even prosper.

To be sure, they're fighting a stiff current. Though the economy grew by 0.9 percent last quarter – the first increase in two years – unemployment is at 25 percent, the peso has fallen 70 percent since devaluation at the beginning of the year, and bankruptcies have soared. And on Monday, the government said it may not be able to meet its current obligations to international lenders, which could trigger another default and push the country into even deeper economic woes.

But as in any tough period, those who succeed are undaunted by the pessimism around them. These days Arévalo is out on the road more, even on weekends. He logs some 2,000 miles each month, about twice as much as before the crisis.

But his returns have shrunk decidedly. On this call to one of his most loyal customers, Alfredo López, who owns a hardware store in Villa Delores, Arévalo's commission for the 12-hour day will be about $40, one-tenth of what it was less than a year ago. "Every night, I ask God for one more day. Anything else would be greedy," he says with a smile.

Arévalo isn't the only member of his family trying to stay afloat. His sister, Carmen Nou, and her husband, Pablo, own a plumbing-supplies store in Córdoba, Argentina's second-largest city. They've had to adapt to meet the changing needs of Argentines in today's flagging economy.

The biggest difficulty for the Nous is the lack of money in circulation. Since December, the government has limited bank withdrawals. The freeze, or corralito, caps withdrawals at just over $300 a month. With little cash on hand, most people are buying only the necessities.

"Nobody is interested in buying a nice matching set to replace their old bidet, toilet, and sink," says Mr. Nou. "Instead they are repairing the problems in their bathrooms and kitchens and spending as little as possible."

As a result, the Nous have changed their stock, focusing on spare parts for repairs. The Nous, who typically work six days a week, have been able to keep their doors open as countless other family businesses close. Despite the difficulty, Carmen Nou remains optimistic. She and her husband even hope to open a new store at the end of the year.

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