Saturday, June 21, 2008

Spanish banking giant Banco Santander 2008 profit suprasses 10 bil Euros, helped in large by their operations in Latin America

Santander 2008 Profit to Surpass 10 Billion Euros (Update2)

By Charles Penty

June 21 (Bloomberg) -- Banco Santander SA, Spain's biggest bank, forecast profit will surpass 10 billion euros ($15.6 billion) in 2008, a record, as growth in Brazil and elsewhere in Latin America offsets an economic slowdown in its home market.

``Banco Santander has shown its considerable strength in the face of the abrupt change in financial markets,'' Chairman Emilio Botin, 73, told shareholders today at the bank's annual meeting in Santander, Spain. Santander earned 9.06 billion euros in 2007, or 8.11 billion euros before extraordinary items.

Santander, which makes about 80 percent of its profit from retail banking, has sidestepped much of the collapse in the U.S. subprime mortgage market that so far has caused almost $400 billion in losses. Santander is doubling its presence in Brazil with the acquisition of ABN Amro Holding NV's bank and Botin said today he expects Latin American profit to increase 20 percent this year in dollar terms.

Santander has ``performed well in this environment and that's admirable,'' said Peter Braendle, a fund manager who helps manage about $60 billion at Swisscanto Asset Management AG in Zurich. ``But make no mistake -- they're facing many challenges.''

---> To access the full story from Bloomberg LP click here




** Apologies once again for the lacking analysis in the past two days of posting, i'm traveling at the moment and unable to spend much time at the computer. Will make up for in the days to come!

All eyes on Tibet - Beijing Olympics 2008 cont. coverage / updates

As Reuters reported, Lhasa, the capital of Tibet has been in "lock-down" since the protests began earlier this year. China reports they have been largely instigated by both the Dali Llama and Western Media.

The first video presented by Reuters updates readers on the journey of the Olympic torch, which has finally reached Llasa.





This second video, also provided by Reuters displays the tough stance China is taking in regards to Tibet and the upcoming Olympic games in August--asserting Tibet "will never change." Rather vague statement, very typical of the Chinese and the central government in Beijing.




Friday, June 20, 2008

Asian Financial Markets in Focus -- Mainland China, Thailand, Singapore finish in the green while the rest of Asia falls on increased petrol prices

Apologies but today I am updating this site using predominantly the news which grabbed my attention this evening, and which I would have ordinarily included in a typical analysis with. Sadly I was stuck in traffic the entire day moving around the North Eastern United States along with 1000's of other gas guzzling behemoths.

Asian Shares End Mixed -- China hikes fuel prices 18%, hoping to trim demand in the world's second largest consumer of oil. -- Reuters


India -- China's neighborer and fellow BRIC country India suffers wide scale flooding, adding to the list of natural disasters this year

Disaster looms in India as flooding worsens -- Reuters


Beijing 2008 - Olympic Games in Focus: Video updates on developments relating to the 2008 games

Apologies but today I am updating this site using predominantly the news which grabbed my attention this evening, and which I would have ordinarily included in a typical analysis with. Sadly I was stuck in traffic the entire day moving around the North Eastern United States along with 1000's of other gas guzzling behemoths.


1. Pollution worries continue to plague China's upcoming games -- Reuters




2. Beijing residents protest as urbanization plans of the central government force residents and shop keepers to move in preparation for further large scale construction projects -- Reuters




3. Beijing fights back- central government in the process of planting a "green wall" around Beijing -- Reuters


The growth of the Micro-Finance Industry in Peru: Mi Banco of Peru helps thousands overcome poverty

Microfinance, is a economic development tool which aims to reduce poverty and empower the global poor with the skills and means to generate sustainable development through, providing small "micro-loans" and other financial services to poor entrepreneurs whom otherwise lack the knowledge or means to acquire them from the formal sectors in their home countries.

In 2006, over 10,000 Micro-finance Institutions where in active operation within 85 countries; financing 150 million micro-entrepreneurs all over the world and offering an array of financial services otherwise inaccessible for poor people in the developing world.

(
Note decided to re-publish, or in this case change the publication time of this post with editions / update from yesterday June 19 to today June 20.)

ACCION International, Established in 1961 and a leader in microfinance since 1973, ACCION has over 45 years of experience in the field of international economic development. Please visit the following pages to learn more about who we are, what we do, and how we do it.

In Peru, ACCION International is partnered with a local Peruvian bank called Mi Banco, which serves as ACCION's main avenue in which to access the Peruvian market on a wide scale, would ordinarily be impossible or very difficult to say the least due to the restrictions in place by formal Peruvian Institutions which at the moment impede many smaller MFI's from evolving into a official bank which can accept deposits and make loans.

I would like to especially extend my gratitude, to a dear professor of mine, whom I was fortunate enough to have on multiple occasions
while attending American University, who was a true inspiration. A charismatic and energized teacher who drew upon his real world experience in business, international development and financial management/ investments in over 20 countries-- and a individual whom I truely respect a great deal: Dr. Ghiyath Nakshbendi. International Business Professor at American University Kogod School of Business, he single handedly created and organized the first course to be offered in the Washington D.C area focusing on Micro-Finance. To that I give him my most esteemed gratitude and respect for his forward thinking of mentoring students in what is a very fast growing and continuously more influential field of study and work.

The video below truely describes the power of Microfinance and micro-credit. Consider these ladies, who relied and used micro-credit through to survive... Having to cope with 3 currencies, 4 presidential elections, 1 dictator, hyper inflation, terrorism, violence, abusive husbands... and still prospered beyond what would have in any other shape or matter have been possible.

I use the word prosper loosely here, for they are will working hard, in a hard world and face adversity and challenges on a daily basis. No less it is a incredible example of the power of micro-credit and MFI's and the inspirational ability of such individuals to persevere through such difficult times.

Last, they are a success story so to speak, many examples persist which are sad case studies. Despite this all, progress through the use of Microfinance institutions is being made, especially in comparison to past methods of poverty alleviation.





Great Video below describing what is one of the first cities in the America's... Special thanks to Five Talents International, helping with international development around the world.



And to end this post -- a bit of mixing modern pop culture with helping the dis-empowered, historically ignored, people of the 3rd world.

The power and capabilities of Microfinance to help the global poor is truely unimaginable. I'll personally be investing assets of my own in the Microfinance / Bank / public traded traded company-- Compartamos.

Described here in Businessweek

Summed up in a nice poppish music video / footage from this youtube video







Chengdu, China -- Truely a beautiful city full of incredible people, 10 mil strong... video footage I took back in 2006 while visiting Chengdu

After a long amount time (well more than usual), spent thinking about what to concentrate this update on, I found this video on my Picassa (google video) web albums-- along with other long forgotten items...

I decided to orient this post video which is of a taxi ride down a major avenue in the Capital of Sichuan Province, Chengdu. This post is therefore dedicated towards helping the people of Sichuan province, who as I've reported in past posts have suffered a great deal in the past month and a half.

The province of Sichuan is known to be home to the Chinese frequently considered the most "relaxed and mellow," people of China. Traditional tea houses, some with a modern flare these days, are all around the capital of the province-- Chengdu. Sad it was the only part of the province I was able to visit.

I shot this video using a digital camera in December of 2006. My friend and i were on our way from our hotel to Chendu Daxue-- which translates into Chengdu University.

This video was taken as my friend I road in a taxi along a main road in Chengdu, a city in South-Western China of 10,000,000 people!--which despite being larger than New York City has remained largely off the world's radar for years... that is until a 8.0 earthquake struck, killing roughly 65,000 thousand people and causing countless other miseries.

Following the video are links to websites in which you can offer your support if you so choose to the victims of the earthquake in Sichuan province.




Support the Quake Relief @ -->

Mercy Corps and Tzu Chi Foundation via google's easy donation site are the ways I personally used.

World Vision
I have read and personally be told is a good avenue to donate and have your $$$ reach the victims.

The Redcross and the UN have their own donation sites as well, google them if you'd like. I tend to avoid both, but who I am to judge... No further comment, hehe.

Thursday, June 19, 2008

Road Blocks end in Peru - Southern Copper resumes operations -- see post on Inka Kola News

Was planning up posting my own update on the strikes that had been afflicting Southern Copper (PCU) operations, but Inka Kola News already got the job done. The strikes have ended... check out Inca Kola News for details and analysis.

I highly recommend people check out this great site which reports and keeps the average reader up to date on many news developments relating to Latin American stocks, politics and economics.

Inca Kola News can be accessed here: http://incakolanews.blogspot.com/

And the report / analysis covering the end of the the road blocks in Peru can be accessed directly through clicking on this link.

Also see update, accessible through this link
.



China -- China embraces Spanish culture -- Will olympic broadcasts be able to go live?

Reuters Video's of the day - June 19th -- Region/topic: China


China Embraces Spanish Culture -- Reuters Video
-- "Chinese say Ole! to all things Spanish!"






Beijing Olympics in focus -- will journalists and press be able to broadcast live? Chinese officials respond with their usual foggy answers... "beating around the bush so to speak." -- Reuters


Copper in focus: Southern Copper Peru (PCU) updates

Southern Copper Peru - listed on the NYSE, under the ticker PCU (google finance info)



Southern Copper Peru has recently has seen its shares fall across all exchanges in which this Mexican Conglomerate trades-- There are many reasons and factors at play, however at the moment a mix of both the fact copper has recently declined in international markets, but also because, a important area of Peru, where Southern Copper operates is experiencing union strikes and are protesters who have blocked Peru's main roads the area.

Argentina witnessed la Presidente-- la Senora Kichner deliver a speech this evening about her own countries protesters blocked roads. I may not love their populist rhetoric or economic policy, but Mrs. Kirchner said something that makes sense... (translated from her speech shown on CNN espanol), "a select group of society can not paralyze the road and the country as a whole, they have no right to disrupt all the people's in their own self-pursuit."

I admit I may be butchering the speech in the moment but, the fact remains... In Latin America, roads are blocked and then the economy stops. Without infrastructure, or the preventing of people from using the little infrastructure that does exist, Latin America remains in a "catch 22." In situations where it socially may make sense to implement reforms, governments are forced to make concessions due to necessity.

Photos below are pictures of PCU's operations in Peru and links to available financial info-- via Google.com/finance and yahoo finance --> Southern Copper Peru (PCU)


















I recall being in Tarapoto, Peru, in the Peruvian province of San Martin in 2002. Rice workers had paralyzed the region because US subsidies had made their rice more expensive than the also available imported rice from the US. The protesters took over the town square over and as temporary tourist I had to rush through the back roads in the amazon to the Airport, and hide out in a back office until a flight could take myself and my family of 12 back to Lima.

Click here to view a article in English I was able to find about the incident.

It is ironic food prices are now so high, Tarapoto's Rice industry is now growing rice and actually making a profit, although US subsidies still aren't help the overall market. The fact and main point I am attempting to get across is that all it took for protesters to paralyze the region was to blockade one highway--leaving the city isolated. and disrupting economic activity in the rest of the region due to the fact major roads pass through Tarapoto, the biggest city in the region.

I hope in a general sense things improve-- both on the part of the protesters in Peru, who do deserve new benefits as a result of high commodity prices, but also for Peru as a whole which in reality suffers a great deal, proportionately speaking when events such as this occur.

Wednesday, June 18, 2008

Emerging markets with complementary economies beginning to respond to developments and market movements from their fellow emerging markets

The recent mining strikes in Peru's Moquegua province, which in reality is not numerically that significant when you consider GLOBAL copper production, and Peru's total copper production from other regions has no less grown in influence to the point it can affect markets in various places. Examine the articles below, courtesy of many sources but cited here due to quality, reporting from my friends at Reuters. Oh... and Forbes for using Reuters report on their website headline 3...

Headline 1:
Shanghai zinc up 1.8 pct, strikes lift copper! (Click here for full article)

Headline 2:
India copper rises on supply concerns; zinc, lead rise (Click here for full article)

Headline 3:
LME copper rises on Peru unrest, lead up 5 pct (click here for full article)

More in depth analysis to come tomorrow, but as it stands, it is increasingly interesting how interconnected emerging markets have become with one another.

-------------------------------------------------------------------------------

Side subject relating to post this morning about Bush's desire to life bans on offshore oil drilling.

And as usual, as I also stated in my earlier post, each side will simply dismiss one another. As I've said I don't know the politics behind each sides perspective to the extent necessary to make true judgments, but as I notice in Latin America when nothing but talk and argument happens I see happening here too in the US. Will continue to monitor and research subject for more in depth report to come.




And John Mc Cain jumping on the bandwagon... hehe =) and then Obama, countering. Oh... Politics.


US fastfood might have to warm up to the new kid on the block-- Bembos, Peru's growing fast food chain, and Peruvian "cuisine" goes International

Bembos is Peru's home grown fast food chain which for years has held it's head high in the wake of "yankee invasion" of US fast food giants, lush with capital and experience and initially gaining almost total market share of the fast food market in Peru.

I can personally attest... it is amazing and superior to US fast food unless your from the US and craving the particular style of Burger King's chicken nuggets, almost all the people from the US and Korea I have personally traveled to Peru with, have continuously told me, quite shockingly to me at first, thinking they would be inclined to dismiss Bembos, they all thought Bembos was better than their competitors, sometimes in food court like malls as in the United States-- especially in Lima.

I'd say the only problem, which is not unique to Bembos, but to all fast food in Peru is that is isn't truly fast food. For one its superior to the quality of US fast food, but what I really want to narrow in on is speed...

Considering I grew up in New York City I may be bias all together. Even here in DC, where I currently write to you from I think the people of Virginia, DC and Maryland are slow as snails. In all the "Latin" or known to be slow paced countries of the world I have visited: Peru, Mexico, Spain, France, and the Dominican Republic-- the three "latin" cultured and known to be slow paced countries I've visited, they fast food is generally just slow. Bembos is no different, but it lacks the model of US fast food, to lets just say actually make the food fast...

Bembos no less, is very nice "fast food" place, and quite tasty one to check out if you're ever in Peru.





















Playa Asia, very popular beach south of Lima .... and.. A Bembos in modern day Lima--

Moving on... Bembos is testing expansion in probably what many will read is a very unexpected choice... India! Five Bembos will be opening in Lima as the you tube video I posted in an earlier entry indicated, it was in Hindi, but due to the description on you tube being in English and the content in the video you could figure what it was about-- you don't Anderson Cooper, who CNN has sadly cast as their pretty face narrating much their reporting, to say the least... (no disrespect intended, I do recognize his abilty, but what they feed him is sometimes pathetic)

I must thank the Miami Herald for writing a story compiling many of these developments into one well written piece, accessible here.

Other Peruvian food chains are also spreading. Second, after Bembos, is Pardo's chicken, a staple in Lima for families of friends desiring delivery or "take out" chicken-- Peruvian styled roterseierre chicken. Pardo's recently opened it's first location in Manhattan, a tough market to say the least... I'm personally hoping for the best and will make a trip to it next time i'm in NYC to pay my respects. (Click here for the English version of Pardo's website.)

Third, there is China Wok, a Peruvian Chifa chain (see wiki definition), which is what Peruvians call their Chinese food. Peruvian Chinese food, like Chinese food in the United States has been altered by US tastes to a certain extent, Peruvian Chifa is therefore mixed with the rich and unique elements that come with being a Andean country with incredible biodiversity and unique flavors.

Peruvian cuisine in general, even in the more "upscale" trendy, socialite circles of major cities is gaining popularity, as the article describes from the Miami Herald describes. Peruvian food, excuse me, cuisine as I call it, is garnering world wide attention and respect... About time!



Viva El Peru! -- Various developments and stories from the Andean Republic

Since beginning this site, I aside from mentioning Peru within posts, most of my longer and more in depth analytical pieces have been on Argentina, Ecuador, China, commodities and rising food costs.

I would like to dedicate this update and perhaps the one to come later this afternoon (July 18- 2008) to recent developments in Peru, one of Latin America's best preforming economies in recent years and quickly gaining international recognition for both its economy and equally important-- Peru's unique culture.

I begin today's focus on Peru, with a chart I assembled for my dissertation on Sino-South American relations and economic cooperation, providing a general picture of how Peru's economic growth compares with its neighbors. My dissertation focused on the below countries and their growing relations and trade with China.

I must mention Ecuador and Uruguay each experienced their own respective healthy growth rates in 2006 and 2007. Information has been assembled from the International Monetary Fund (IMF), and account for inflation which is on the rise throughout the continent, but is particularly high in Venezuela and Argentina.

As you can observe above, comparing Peru with other countries in the region, it is preforming quite well and the IMF forecasts healthy growth for the country foward to 2009, at which point it has also been estimated Peru's economy will achieve fast. At the time of writing of my dissertation (Jan-April, 2008), estimates and future forecasts by the IMF were as follows. Please, by all means, let me know if the figures have been significantly altered since earlier this year.


Latin America - Country Growth Rates 2006-2009 (r = Real GDP percent change, e = expected and f = forecast)

Source: IMF GDP calculations adjusted for inflation

-------------------------------------------------------------

Peru has many good things going for it right now. First, copper unarguably one of Peru's most important natural resources has risen sharply in value over the past few years, in addition to other raw material exports Peru has in abundance-- fishmeal, gold, silver and zinc. Copper is a key input in economic development-- and even if as of recent days the price has dropped, it will remain a commodity in strong demand for quite some time-- thanks in large to China which now relies on Chile and Peru for 50% of its total imports of copper from abroad.

Below is a graph which predicts copper demand and China's economic growth based off the proportional level of copper demanded from other countries at similar levels of development, using South Korea as the primary benchmark due to many similarities its own plan for initiating their economic development and similar needs of having to import many of the inputs necessary to industrialize.



Below is a graph generated from the London Metals Exchange home page, using their price graph generator.



LME copper spot 2002-2008
Thankfully, as Mr. Michael Reid states in his new book, the Forgotten Continent: The Battle for Latin America's Soul it seems Latin American countries are in a different position than they where during past commodity booms. Today, thanks in large to the BRIC countries and to emerging market demand, the current commodity boom will remain in swing for longer than ones of the past. Second, from historically failing to re-distribute profits from commodity booms to constructive areas of the economy to ensure sustainable growth after commodity prices fall many leaders now know better.



Peruvian present Alan Garcia, who had previously been considered a charismatic, populist, has shown he's learned from many of his past mistakes and currently retains pretty decent support and popularity rating in Peru.

In his first term as president in the late 1980's, his economic and internal policies lead to escalating violence from the war then in full swing, with the Peruvian state on one side, fighting the Maoist Shining Path Guerrillas on the other. Escalating violence and failed economic plans also lead the nation to experience the worst hyper-inflation of Peru's history.

Today he is viewed as a healthy moderate, leading the way with other popular Peruvian politicians such as Lima's mayor who also enjoys high popularity ratings as of recent polls, in investing profits from commodities in constructive projects. New water facilities are being built for Lima, which sits in the driest desert on the planet, highways are being built / repaired, ports are being upgraded and new airports are being built in Northern Peru (a region historically ignored in large by the central government).

I end this post (with more to come later), with a article I saved from March's APEC summit which took place in Lima.

------------------------------------------------------------

China sees Peru as the gate to South America - Andina News

Lima, Mar. 10 (ANDINA).- Macroeconomic and political stability and impressive growth makes Peru the ideal entrance gate for Chinese investments and trade to Latin America, said Chinese ambassador to Lima Gao Zhengyue.

One of the advantages that Peru offers to China as economic partners is its strategic economic convergence, derived from its geographical position in the continent, as a bridge between Asia and South America and the Atlantic Ocean through the bioceanic corridor.

Peru is also important due to its projection towards a sub regional extended market through the Andean Community (CAN) and Mercosur.


Chinese Ambassador to Peru
Gao Zhengyue

So far this year, around 30 delegations have visited Peru, and probably this number would increase when the Free Trade Agreement (FTA) between Peru and China is signed, he told Andina news agency.

Chinese business leaders are very interested in diversifying investments to Peru, currently concentrated in mining, in sectors such as ports, airports and road construction.

The Chinese government is interested in taking part in the social programs promoted by Peruvian government, as "Agua para Todos" (Water for Everybody) and "Techo Propio" (My Own Roof), he said.

"Whenever the Peruvian government can show projects to the Chinese business leaders, they will start to study them and decide to make investments", he said.

Gao Zhengyue told Andina that he is very satisfied with the firts two Rounds of Negotiations to sign a Free Trade Agreement (FTA) between Peru and China and hopes the FTA could be signed at the end of this year, so it would come into effect immediately.

The Chinese diplomat said his country is ready to welcome Peru's President Alan Garcia when he visits China next week.

(Accessed via Andina news agency -- China-Peru Free Trade Agreement Joint Feasibility Study; 2005-06).”




Tuesday, June 17, 2008

Energy in focus: China-US talk energy cooperation, while US House of Rep pushes national renewable energy plan and Bush moves to end offshore oil ban

Two developments in the energy sector warrant attention, and two which are unfolding in parallel with one another.

I apologize for a slowdown in updates as of recent, took a bit of a mental break yesterday and was dragged into the Eurocup 2008 when I should have been working.

First, headlines from most major media have reported Chinese and US leaders are meeting in Annapolis, Maryland to discuss energy cooperation. A positive move in the right direction, as described by the attendees, it is about the time to two largest net importers of energy discuss ways to better manage energy supplies and cooperation around the world for the general good of the global economy.

Visiting Chinese Vice Premier Wang Qishan (front L) shakes hands with U.S. Treasury Secretary Henry Paulson (front R) at the opening ceremony of the 4th round of China-U.S. Strategic Economic Dialogue in Annapolis, Maryland, the United States of America, June 17, 2008. China and the United States on Tuesday started here their 4th round of Strategic Economic Dialogue. (Xinhua/Yao Dawei) <-- click here for full story from Xinhua Media.



There is also talk in the House of Representatives for renewing a bill which promotes the development of more sources of renewable energy. As reported by C-SPAN


"Despite federal initiatives going back to the 1970's, renewable electricity makes up less than 3% of the generation mix in the U.S. Sen. Jeff Bingaman (D-NM) chairs a Senate Energy & Natural Resources Committee hearing to discuss the challenges and regional solutions to developing transmission for renewable-electricity resources."

Third, this morning good old President G. Bush made headlines saying he wants to lift the currently in place bans on offshore oil drilling. (See Reuters Article here)

In Washington, the White House press secretary,
Dana Perino, said Mr. Bush would urge Congress to “pass legislation lifting the Congressional ban on safe, environmentally friendly offshore oil drilling,” adding, “The president believes Congress shouldn’t waste any more time.”

For a full report check out the article published by today's New York Times. You can view the complete article written by reporter Sheryl Stoleberg by clicking on this link.

My reaction from all these developments, is simply that every side is reacting irrationally to the fact we're paying 4+ / gallon at the pumps. Action does need to be taken, but as many steps forward in one direction, usually following the policy / plan of one side of the political spectrum (either Republican or Democrat), the other side has a tendency to denounce the other sides plans almost immediately. I am far from an expert on the US energy sector, so whether the democrats of republicans have a better plan to help the US with its energy demands, I truly do not know. However, it will definitely be better than Bush's promises that gas prices would go down after the war in Iraq... hehe

As soon as Bush made this proposal, of course Nancy Polosi immediately responded in kind, telling reporters "
The president’s proposal sounds like another page from the administration’s energy policy that was literally written by the oil industry: give away more public resources to the very same oil companies that are sitting on 68 million acres of federal lands they’ve already leased.”







Flooding continues across Southern China-- Guangdong Province warns of "Black June", and more Olympic related problems develop

Somebody once told me "poor people never get a break." The people of Southern China have had a tough year so far in 2008. Snow storms, global slow down, and now further flooding to add to the mess and economic losses of many of China most influential provinces in terms of economic activity and growth.

It won't stop China and even many of these provinces from achieving healthy growth rates in the 3rd quarter of 2008, and when compared to growth in other countries it will be substantially higher than developed and most developing countries this quarter. No less, one must still feel bad for the continued struggles of the peoples in Southern China.

The country's resolve as a whole is being tested, China is desperately trying to both show the world it's own domestic capacities are capable of dealing with their recent natural disasters and at the same time still convey the message they are poor and developing country which humbly will accept all international aid and allow freedom of the press. Still it will be interesting to examine the impact of these recent natural disasters a few months from now... What would and could have been if China had not encountered these problems... Not to mention continued issues stemming from the olympics and Tibet protests.

The videos below, provided (once again) by the good people of Reuters first describes the escalating flooding in Southern China, explaining "the rescuers, have now become the rescued."






The second video, can be interpreted many ways. Australia's Olympic Committee has banned their ladies hockey team from attending the opening ceremony officially because of "logistical issues that would disrupt training schedules." However, many assert pollution in Beijing is a major factor that lead to this decision by the Australian Olympic Committee. In general, it's another set back for China and the countries struggle to shed the image of Beijing's pollution problems before the games get underway in August.








Third, the Olympic torch may no longer be traveling the globe, but it is moving around mainland China... and today, XinJiang province which included about 800,000 Muslim Chinese which seek independence from China and trace their ancestral roots, interestingly enough back to the geographic area now known as Turkey. China has made it a point to include many ethnic minorities as torch carriers, but as the video shows security is being tighten in XinJiang and problems loom as the torch will soon move onto Tibet in its journey throughout China.




So many problems, as China continues its journey towards emerging as a global center of economic activity. All nations must face challenges in their own respective evolutions into modern states, with modern and respected institutions, however it is especially difficult when you are the most populous country in the world. So many factors have the potential to impede China's growth and lead to social instability--yet many should consider what is going on behind the scenes...

I predicted back in 2006 when I was in China, the central government would allow the Yuan (Renminbi) to appreciate substantially before the Olympics in order to benefit from the influx of foreigners who will be exchanging dollars, euros, pounds, and yen among the major world currencies for Chinese Renminbi. This is exactly what has happen as my earlier entry where I posted a recent article on the appreciation of the Yuan from Bloomberg.com. However, even though and big names like Henry Paulson, US Secretary of Treasury, feels it won their long standing battle to get the Chinese to allow the Yuan to appreciate. Beijing may not have been able to plan for this years natural disasters, but they definitely have maneuvered their economy in preparation for the Olympics.

If China can make it through the "free Tibet" fever recently ignited, get the torch to pass through the rest of China with little problems, successfully host a well remembered Olympic games I think it will emerge with a healthy economy and in a good position for healthy growth in late 2008 and 2009. So many variables are at play right now, time will tell as I say quite frequently, but this topic will continued to be monitored by this website, I welcome other opinions.

I have not been in China for about two years now and the country is changing so fast I'm sure opinions of many on the ground in China have changed since 2006. I must state these are my opinions and I always welcome differing ones from people interested in debate. At the end of the day, my own views and perspectives can change as well and are re-solidified or at least re-examined in the process of debate. Please by all means, let me know what you think.

Natural Gas found in Chile! Discoveries in Magallanes Region! Reports Merco Press

For full article... please click here. Accessed from Mercopress on July 17, 2008

GeoPark Holdings Limited announced the discovery of two new gas fields in the extreme south of Chile, the Magallanes Region. The gas fields are on the Fell Block following the successful drilling and testing of the two new gas wells.

GeoPark drilled and completed the Nika Oeste 3 well to a total depth of 3,023 meters on a geological structure that had been re-defined following the interpretation of GeoPark’s 3D seismic program.

Approximately at 2,960 meters in an 11.5 meter perforated interval, gas flowed, without stimulation, at a rate of approximately 4.7 million cubic feet per day, 70 barrels per day (bpd) of condensate and 14 bpd of water with a well head pressure of 1,470 pounds per square inch (psi).

These are preliminary results and further production history will be required to determine stabilized flow rates from this well and the extent of the reservoir. Construction has been initiated on a gas pipeline to connect the Nika Oeste 3 well to GeoPark’s Kimiri Aike gas process and compression facility which connects with the regional gas infrastructure and the Methanex Corporation's methanol plant located 120 kilometers from the Fell Block.

The Bump Hill 1 well was drilled to a total depth of 2,979 meters with a production test at approximately 2,820 meters in a 4 meter perforated interval, flowed, without stimulation, at a rate of approximately 0.9 million cubic feet per day (mmcfpd) of gas, 5 bpd of condensate and 4 bpd of water with a well head pressure of 420 psi. Bump Hill 1 will also be linked to the Kimiri Aike gas processing facility.

Targeted completion of the two new gas pipelines is July 2008 with an expected increase in total sales production of 900 barrels of oil equivalent per day (boepd). GeoPark in its release states that it has drilled and successfully put on production seven new wells in Chile since its long term drilling program began in June 2007. Five other new wells have been drilled and are currently waiting for testing, sidetracking or remedial operations.

--- As always, with this site I like to convey development that grab my attention. Last minute inclusion of the above article is a result of a last minute click on "home" in my web browser-- prompting many news sites to load. One being Mercopress.com.

Latin America Makes International News! & China continues strengthening its "free floated" currency... having risen 20% since 2005

As described in my previous post... Latin America is sadly trapped within mass media as a mere "attention grabbing story." I in no way what so ever intend to make this sound as if I am criticizing, Reuters, I have nothing but the utmost respect for the organization which is why I use their video "embed" feature. They truely do strive to offer unbiased reporting and are represented by the best of the world's journalists.

This post is simply a effort to convey the particular and unique attention that is given to Latin America as a whole.

Colombian cocaine seizures soar
--- Reuters





Ellion joings young communists ---
Reuters




High Altitude Training --- Reuters: Finally a bit of positive news... hehe - High Altitude Training for Olympics





Bloomberg LP

Yuan Extends Gains to 20 Percent Since End of Peg on Inflation

By Judy Chen and Kim Kyoungwha

June 17 (Bloomberg) -- The yuan extended gains to 20 percent since China ended a fixed exchange rate to the dollar in 2005, passing the milestone as Treasury Secretary Henry Paulson prepares to meet with Chinese officials.

The currency climbed to a post-peg high of 6.8918 per dollar today as the People's Bank of China seeks faster appreciation to curb the cost of imports and slow inflation. The so-called Strategic Economic Dialogue in Annapolis, Maryland today and tomorrow will focus on energy and the environment after the yuan's advance eased trade tensions with the U.S. that dominated previous meetings.

``Inflation remains the dominant policy issue in China,'' said Sue Trinh, a currency strategist with Royal Bank of Canada in Sydney. ``The focus will be on more rapid appreciation of the yuan.''

The currency climbed 0.12 percent to 6.8918 a dollar in Shanghai as of 1:03 p.m., from 6.9004 yesterday, according to the China Foreign Exchange Trade System. It's risen 1.7 percent this quarter compared with a 4.2 percent advance in the previous three months.

The yuan may rise to 6.5 by the end of 2008, Trinh said.

China's trade surplus, which rose to a record in 2007, narrowed in May, for the first time in five months, while foreign-exchange reserves surged 40 percent to $1.68 trillion in March, flooding the economy with cash and fueling inflation.

Trade-Weighted Index

Goldman Sachs Group Inc. said in a report yesterday that the yuan will gain about 10 percent in a year as China stems inflation that slowed to 7.7 percent in May from the almost 12- year high of 8.5 percent in April. To cool inflation, the central bank has ordered banks to set aside bigger reserves five times this year after raising interest rates six times last year.

The currency has strengthened almost 6 percent against the dollar this year, nearing the 7 percent gain for all of 2007.

The Westpac Nominal Effective Exchange Rate, a trade- weighted index for the yuan that includes the euro and the yen, has climbed 5.7 percent so far this year, compared with the 3.4 percent gain for all of 2007. Gains in the yuan may accelerate versus the euro as policy makers calm criticism from officials in Europe and the dollar rises against major currencies.

``We are expecting to continue to see trade-weighted appreciation,'' said David Mann, a senior currency strategist at Standard Chartered Plc in Hong Kong. ``So the moves in the yuan may be more dictated by the broad dollar than was the case previously.''

Reform is Critical

China needs to move ``more quickly'' on yuan appreciation and exchange-rate reform will be ``critical'' to the country's social stability, said Paulson on June 10 in Washington. China's central bank said on May 14 that it will further increase the exchange rate's flexibility to curb price increases.

Gains in the currency attract speculative capital, injecting cash into the financial system already awash with money from the trade surplus and foreign direct investment.

China will strengthen monitoring of money inflows after the surplus for the capital and financial account, a measure of investment flows, jumped more than seven-fold in 2007 to $73.5 billion from $10 billion a year earlier, the State Administration of Foreign Exchange said on June 5.

The People's Bank of China said yesterday in a report that investors' expectations for continued appreciation of the yuan are attracting inflows of ``hot money,'' and should such expectations turn around, a ``massive outflow'' of money will affect China's financial security.

Forward Rates

The central bank may ``unexpectedly adjust the pace of yuan appreciation, like the stagnation in April, to deter investors betting on one-way appreciation,'' said Yang Shengkun, a currency analyst in Beijing at China Citic Bank Co., a unit of China's biggest state investment company.

China slowed yuan gains to 0.35 percent in April, the smallest monthly advance in more than a year, prompting traders to pare bets for the extent of yuan appreciation in the next 12 months. Inflows of ``hot money'' into China may have reached $500 billion last year due to trade, investment and firms borrowing abroad, according to research by Shanghai Securities Co. published in the China Securities Journal.

One-year non-deliverable forwards contracts, agreements in which assets are bought and sold at current prices for future delivery, show traders are betting on a 6.6 percent rise in the yuan to 6.4680 in the next 12 months. The yuan will reach 6.65 per dollar by year-end, according to the median estimate of 23 analysts surveyed by Bloomberg News.

To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.

Last Updated: June 17, 2008 01:21 EDT


Sneaking this in at the end of the post for all those out there who know what Bembos is--the Peruvian Fast Food Chain which competes quite admirably with Mc Donalds, KFC and other mainstream and international fast food names. The video is a bit long and can get boring, but here is the explanation of it from youtube. In short... a Peruvian fast food chain is expanding to India. It is simply incredible the exchange going on in today's globalized society, 20 years ago no one would have thought emerging markets like Peru and India would be cooperating in fast food among all else. The first video simply describes the deliciousness that is Bembos... sadly it's in Spanish, and I apologize for those of you out there who do not speak / understand it. There are subtitled videos available if you use either my search provided by google or go straight to youtube and simply type in "Bembos."

Copy/Pasted from Video Description on youtube.com

Bembos -- Best Burger in the World




The South American fast food chain Bembos opened its first outlet in Delhi NCR yesterday at the Great India Place Mall in Noida.

Bembos has been maintaining its leadership in hamburger sales in front of strong competitors in the international market like Mcdonalds & Burger King in South America and are now eying the Indian market.

"Our three Bembos outlets in Mumbai are doing exceptionally well & we are very excited at the proposition of catering to people in the Delhi NCR region," said an upbeat Anil Kapur, the master franchisee of Bembos in India.

So what makes bembos special? Apart from the colourful interiors, the size, taste & price points are the USP of the Bembos burgers.

"We are elated at Bembos coming to India," said Carlos A Yrigoyen, the acting Ambassador of Peru in India, who along with his wife Regina inagurated the outlet. "Nothing is as delicious as a Bembos grilled burger, " Yrigoyen said.

Also present at the inaguration were Rahul Mittra CEO Brandsmith with wife Sarina, Dimple Kapoor, Bharati Chajjed Associate Director Standard Chartered, apart from heavy print & electronic media.

"Brandsmith is very happy to be associated with such a premium brand from South America, " said Rahul Mittra who has been accredited with successfully managing international brands like Ceres juices from South Africa & Weetabix from UK." We will ensure it gives the big daddies a run for their money, "said Mittra.

H.S. Communication.




Monday, June 16, 2008

Ecuador's Government and International Oil Firms reach settlements... hope looms in the distance for reviving output for S.A's #5 oil producer

Thanks to a link from Southamericadaily.com I discovered this morning The Economic Times of India, a relatively new news agency that so far looks pretty credible and I personally like the focus of what they choose to report / analyze.

Ecuador... thankfully has worked out the problems that have emerged between the government and foreign oil companies, which Ecuador as President Correa knows, can not afford to have abandon their Ecuadorian operations. The problems arose when the government, largely spurred by President Correa decided to levy a new oil tax on foreign companies which the government argued was fair in light recent record breaking prices of crude oil (Bloomberg LP article from June 16th, 2008 on oil prices).

Despite representing a "left wing government," Correa is no Chavez. Chavez, lush with money from his own countries oil exports, has been able to offer campaign (financial) assistance to many potential candidates running for high office in Latin America. Even if it is illegal to directly contribute campaign financing, he finds other ways to facilitate their elections, even if it means going in person to campaign as he did in Costa Rica (one country off the top of my head I recall him doing so in). The candidates tend to have characteristics such as being anti-US, socialist, anti-privatization, nationalistic, pro-nationalization of key industries, popular among the poor, and or a flashy ability for political rhetoric among the many.

The US media, however overplays the true relations which develop for many reasons, usually beginning with the fact the leader in question tends to have been elected in place of the candidate the US would have ideally desired to win the elections, and second because it's a way to "check" the capacity of Chavez's influence and power to further increase. This Washington Post Article does a decent job at showing readers the views held by the political elite of Washington.

Correa may share some of those traits, and was openly supported by Chavez during his campaign for president, but he for one lacks the passion and fever Chavez displays quite openly and most importantly his "golden tongue" for speeches. Second Correa is smart enough to realize Ecuador does not share the same luxury of being capable of completely implementing Chavez style reforms to the extent Chavez and to a certain degree Evo Morales have done in Venezuela and Bolivia respectably. Ecuador can not afford to miss out on the record high prices of many commodities they produce, and has already noticed total exports are decreasing, meaning the governments state revenues are also in decline.

Comparing Ecuador with Bolivia, which in reality lacks the economic resources to successfully build a new system with new and respected institutions, as Morales is trying to accomplish, is also difficult and unlikely to even be possible in Ecuador. Ecuadorian society is not as divided as it is in Bolivia between people of pure Andean decent and mixed and or people of foreign decent (predominantly European). An interesting fact Bolivians tell me, is that Bolivia is the only Spanish speaking country in Latin America where it is said you are a minority if you can ONLY speak Spanish. Most of society speaks either both Spanish and a native tongue, usually Quechua or Amyara, or, only speak a native language--that is they never learned Spanish, probably aren't Catholic, and definitely do not share the same cultural and social characteristics of the more mixed or European Bolivians. Ecuadorian society therefore in my opinion will not support a total overhaul of its countries institutions as Morales is attempting, and succeeding to a certain degree in doing so in Bolivia.

During a interview Correa said, "
Most of the companies have said yes" to the offer, meaning somehow a agreement was reached. No mention of concessions where stated, but since foreign companies could not be reached for immediate comment, some where probably made. Loosing the presence of foreign oil companies in the long run is not in Ecuador's best interest, as it has generally brought problems in other countries which have lost foreign investors, Venezuela being the obvious answer. Although, Venezuela might be able to create its own refining capacities, explore for its own oil, repair its degrading industry in the long run-- it will not come easily and many now argue (even those who support Chavez) if complete nationalization was a good idea after all... Ecuador will not be able to so and needs the presence of such oil companies which include; Spain's Repsol, Brazil's Petrobras, China's Andes Petroleum and France's Perenco.

The tax was viewed by foreign companies as a tactic for the government to fatten the state coffers. Unlucky for Ecuador, that such a move in some situations would be justifiable, and even with Western companies tendency to argue and fight them, as of recent there have been many situations in countries in Latin America, Africa and elsewhere, when foreign owned companies do concede to some if not all demands. The problem is this move comes after a great deal of anti-US, left-wing rhetoric, and general fear that has been factored into the markets originating from Correa's campaign for President; where he expressed interests of nationalizing Ecuador's oil industry.

Therefore, a great deal of uncertainty has been factored into the market but the foreign companies, and since expectations largely guide many aspects of how investors view and access investments, it was natural they would scale back their plans and operations in Ecuador. Correa, overall, from my perspective has done a poor job of making Ecuador look like a good place for foreign investors... allying himself too closely with Chavez and attempting reforms a bit too far to the left in economic and political theory.

Among the many factors that did not help Ecuador's image was the recent potential outbreak of war with Colombia. When Colombian troops entered Ecuadorian territory in search of FARC rebels who where hiding within Ecuador, along the countries Colombian border, Ecuador immediately as sovereign nations usually do in similar situations by asking for an immediate explanation and deeming the entry illegal.

It was at this point from my perspective, when Chavez and Correa from my analysis of the situation saw a opportunity to promote some anti-US fever and ignite nationalism in their own countries. The two countries instantly declared themselves allies, and threatened war against the "US puppet of Latin America," Colombia--sending troops to their respective borders with Colombia. (See Reuters Article here, written by Saul Hudson and Alonso Soto).


As I searched for articles to provide links for all readers to credible sources I realize Western media has almost forgotten this even happened, and some even predicted that if Chavez's threats came to be reality, the U.S. would attempt to convince countries it has friendlier relations with to help Colombia. Their first calls would probably go in my opinion (in ranking order) go to Panama, Peru, Chile and then to what the US knows would have been a very reluctant Brazil.

As nice as it is for South American countries to be spoken about on major US media, it is aggravating they do so mostly during times like these (war), or perhaps natural disaster (ex: 2007 summer earthquake in Peru), and or even when the daughters of president Bush get robbed while US secret service is supposedly accompanying them and protecting them as they shopped in Buenos Aires, Argentina (good work secret service!).

I personally disagree with many things Correa has done in Ecuador, and I think he has managed his international policy horrendously, but despite all this he is not a horrible president, especially when you look back on Ecuador's track record. From all my analysis, readings and opinions expressed by others to me about Ecuador, it seems the country is stuck as a Chavez ally and will be associated as one until until a change of government occurs, yet it realizing it would have been in the country's general best interests to have chosen a more neutral path in foreign policy such as Brazil or Chile's left leaning government have. Regionalism is something South America needs and should have, but as it stands now, Chavez is too strong a character, unpredictable and temperamental to lead the region which despite his calls for decoupling from the domination of Latin America by both the US and the old colonial powers which now compose the European Union, the region simply put... needs them (the US and EU).

Sunday, June 15, 2008

People flee floods in Southern China -- worse to come, see Reuters Video below

Reuters - Millions Flee South China Floods



Moving back to previous topics and the video topic of the last few days, I return to food, and agricultural commodities. Food prices are rising. This video, displayed both above at times in the youtube provides videos explains the situation on a human level. It is form a news agency from New Zealand, and they explore the impact in the Philippines...



And I must say, I do not agree with everything in the below video or even the things the man, Carlos Mencia says on his tv show. However, in the wake of the food crisis, and having recently seen this video on TV, here is a clip offered by Comedy Central.com/videos

I don't mean to be crude and I warn readers under the age of 14 (personally decided age limit... officially I should say 17), to be warned there might be questionable footage in the video below, please exercise self control and do not watch it if you are underage.

Even the big guns of comedy central know there is a problem, it is ridiculous instead of action we see speculation on agricultural commodities and other foodstuffs. I can't admit it does not make me happy to see Peru, the country my mother was born and raised in, actually making money and growing from the sale of fish meal, but at the same time in today's day and age lets not make people go hungry. Maybe a humorous approach towards this topic will connect to some... Keep in mind the younger generations of the WORLD, grow up on these shows... so it might do some readers well to keep informed with the messages being conveyed to today's youth via media.

I will say on a side note I am slightly bias, and do like Carlos Mencia, if only everyone understood Spanish... and the latino culture, his jokes would make so much more sense. I must also thank Comedy Central for offering video of their highest rated shows on the video section of the homepage.

Click here to view video... I refrain from using the "embed feature" due to inappropriate content for younger kids and comedy central's odd choice of the opening screen shot to display when I "embed" or rather place the video directly into my page.

Bloomberg LP - Mining giant Rio says rising commodity prices won't be enough to convince China to stop buying... high prices are here to stay

Rio Says China Inflation Won't Undermine Commodities (Update1)

By Jesse Riseborough

June 16 (Bloomberg) -- Rio Tinto Group, the world's third- largest mining company, said recent gains in inflation in China driven by rising food and energy costs won't undermine strong demand for commodities.

``A leveling out in food and energy prices will lead to falling 'headline' inflation without a dramatic impact on economic growth,'' Tom Albanese, chief executive officer of London-based Rio, said in a slides presentation sent today to the Australian stock exchange. ``Any sustained inflation is likely to support aluminum and iron ore prices.''

Inflation in China, the world's fastest growing economy and biggest consumer of commodities, slowed to 7.7 percent in May, from 8.5 percent in April, still exceeding the government's annual target of 4.8 percent, according to the statistics bureau. Demand from China has spurred six straight years of commodity gains, including record prices for iron ore and copper.

Prices for Rio's products ``are supported by economic fundamentals, not financial bubbles,'' Albanese said, citing dwindling supplies of metals including copper. ``Current prices of key Rio Tinto products are justified by the economic fundamentals of sustained demand growth and tight supply; together these factors will support long-run prices.''

Rio, battling a $164 billion takeover offer from the world's largest mining company BHP Billiton Ltd., rose A$4.62, or 3.6 percent, to A$134.50 on June 13 on the Australian exchange.

To contact the reporters on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net;

Last Updated: June 15, 2008 19:39 EDT

Argentina - Inflation is on the rise, populism is back, and a gloomy economic outlook looms for metal and beef producers/exporters

In the old days, I remember people used to consider weekends the time where you could “catch up” with news and developments from the past week, and get ready for the one coming up. These days it's a bit more difficult as markets around the world open and close when you wake up every morning and when you go to sleep—with Saturday into Sunday being the exception when global clocks no matter where you may be geographically, are ticking in “weekend” status.

A couple interesting stories caught my attention this morning in my own “catch up.”

First i'd like to talk about Argentina... one of the primary South American countries China has a strategic interest in developing relations with, both political and economic. The country is well endowed with energy related commodities ranging from hydro-carbons, hydro-power and natural gas. The country has a substantial supply of many metals, such as tin, zinc, silver and gold. Last, and most important right now for China and many countries in the world is their incredible capacity and un-tapped capacity as well in food production.

Argentina, at one point in time was known as the "break basket" of South America for a reason, people compared Las Pampas in a Argentina and the vast lush land with other similar areas such as the Midwestern United States or the Ukraine in Europe. With the South American countries of Brazil, Uruguay and Paraguay-- Argentina is well poised (as the rest are), to benefit from rising food prices around the world. Not only because they can sell them at higher prices, but because if domestic capacity can be increased the countries can help themselves fight both rising food prices and inflation in general.

It would be a nice thing to see countries which are no where near their productive capacities emerge and help alleviate what is in reality a global shortage of everything (food, metals and energy). Food prices, especially of particular products like Soy or red meat, are not exactly controlled in a cartel like oil is with OPEC, or related to big petroleum companies (state or private) which can affect prices with far greater ease, and also increase output in a more synchronized fashion.

This is why it is discouraging to learn that Argentina is unable to fulfill its beef export quotas to the EU, as described in full detail in Mercopress's article from Friday, June 13. Anyone whose tried Argentinian steak knows it is the best in the world (ok... maybe i'm bias), and they used to have a over-supply of it, that I recall as a child it being very difficult to find actual Argentinian meat in the United States due to many US beef producers being worried of competing with Argentinian producers and import quotas or some form the US has on Argentinian beef. For the full article click here to access it from Mercopress.

The Kichners, called by some the King and Queen of Argentina now, are keeping price controls in place on a array of goods ranging from gas to food. The historically cranky and rather powerful Argentinian unions, "strike again," you might say. Just reflecting for a moment from their recent crisis... Unions in Argentina can in part be held accountable for being too powerful and fickle back in the early 2000's when the economy crashed. Protests prevented the government from abandoning the dollar peg, rising prices, firing workers, decreasing salaries and spending less. This was all necessary due to the fact Argentinian workers and goods/services had to sell on the global market priced in US dollars. As the dollar rose in the 90's, when the peg was in place, it helped quell inflation and allow Argentina to borrow in dollars from international lenders, however with no exit strategy and internal protest the economy crumbled. Debt could not be repaid, the Argentinian goods/services and workforce where not efficient enough and did not modernize enough to support the economy having such a strong currency, and thus I personally feel they where a large part of the problem. Regardless, for the peg to have worked it would have been very difficult, but the fall out would not have been as severe if the work force could have modernized further to become more productive.

It seems once again the Argentinian government seems to be on the same path of self-destruction, which could be cushioned in part by the commodity bull market, but even this is under threat thanks to unions once again. Cordoba, which is Argentina's 2nd largest and influential province , and 2nd in GDP next to the capital of Buenos Aires, has reported, protests from the Agricultural sector are now disrupting the metal sector in their regions, preventing production and exports. Additionally, the transport sector began to protest recently due to global fuel prices rising to record highs, furthering the problem. Reported on Business News Americas (click here for full article) the unions and workers of the agricultural sector remain in protest due to government taxes on their exports.

Argentina military police clash with farmers who staged a road blockade to protest a controversial export tax.

Photo provided/ accessed from CNN news story
http://www.cnn.com/2008/WORLD/americas/06/14/argentina.violence/index.html

The government like those of other South American countries is trying to take advantage of record high prices, and behind the scenes also raise the state coffers a bit which have decreased as of recent. In reality, the agricultural sector could still probably find buyers with the new export duties, considering global prices... as usual though, Argentinians have become used to the current system and lives they live, and would probably prefer almost universally, to take advantage of higher prices directly by charging higher prices themselves, as opposed to having the government spend the new tax revenue. Latin American governments have a historic tendency to spend badly, the people know this and feel it is unfair, as they should.

However, the economy as a whole can not be expected to maintain the healthy growth rates of recent if it is not producing, working and functioning. Just as Latin America missed out on the energy booms in the 70's from not developing their energy sectors in the 50's and 60's, here too, if Argentina can not settle these problems, the country will miss out being able to benefit from both record high metal and food prices. Energy wise, the country can not even produce enough for its own demand, export of natural gas or petroleum probably will not be possible... so the country SHOULD concentrate on where it can generate income (metals and agriculture), so far its failing and with inflation over 10%, and the central bankers constantly re-arranging CPI and PDI baskets in which to gauge inflation, it is probably a great deal higher. Argentina needs to get its act together, out of all the South American countries it seemed very well positioned after their rebound in 2004-2006 to take the stage as a leader in the continent, instead it is retreating to its roots of populism, spending, price controls, inflation, and protest. I personally hope it can ride this storm out, but at the moment I continue to loose faith.

A business executive from Cordoba, Argentina explained the problem to BA Americas reporter; "The conflict with the agro sector has been going on for more than three months and has slowed investments in the metallurgical sector. Now add to that the protests being carried out by the transport sector, which are causing us to not receive the supplies we need for our processes," the executive said.

-- Source Business News America's article by Harvey Beltran


A unrelated side note...

A interesting book discussing what will come of China-India-Japanese cooperation in Asia. The three, never before friendly power houses of Asia are warming up to one another, but, whether or not it's only “skin deep,” as Bill Emmott, author of the book and former editor of the Economist writes, time will tell. The book from reviews from the Asia Times Online say it does a pretty decent job exploring many dynamics of international relations of these 3 countries. The book is more about inter-state rivalry, which is more along the lines of foreign policy. This site does pay attention to FP, but as readers know, it is simply not the focus of chinasouthamerica.blogspot.com.

Click here if you'd like to learn more about this publication and read the full book review from Asia Times Online.