Exploring and keeping readers up to date with the growing economic and political ties between China and South America. Including all the good stuff: Commodities, Energy, International Finance, South-South Cooperation, Microfinance and more
Sep 10th 2009 | SAN ANTONIO DEL TÁCHIRA From The Economist print edition Hugo Chávez stamps out regional economic integration
BUSINESS is slack at José Nelson Uribe’s tiny grocery store in San Antonio del Táchira, just a stone’s throw from Venezuela’s border with Colombia. “I’m not selling even a quarter of what I sold before,” says Mr Uribe. His woes are a result of the political conflict between his namesake, Colombia’s president, Álvaro Uribe, and Venezuela’s Hugo Chávez. “Before” means before July 28th, when Mr Chávez declared a “freeze” on diplomatic ties and said he would seek alternatives to Colombian goods. This was officially a response to an agreement formalising American use of seven Colombian bases for anti-drug operations, but it also coincided with questions as to how anti-tank rocket-launchers sold by Sweden to the Venezuelan army ended up in a camp belonging to the FARC guerrillas in Colombia. It is not the first time that Mr Chávez has threatened trade sanctions, but this time he seems serious.
The impact on the border region was swift. For each country, the other is the second-biggest trading partner (after the United States in both cases). Bilateral trade totalled $7.2 billion last year, of which $6 billion consisted of Colombian exports, mainly of food, live animals, clothing and cars. Four-fifths of that trade passed along the twisting mountain road that links San Antonio with the state capital, San Cristóbal. “That represents 50,000 direct jobs and 250,000 indirect [ones],” says José Rozo, a local business leader. Many of these are in transport firms and customs agencies. “Before, the local lorry drivers were doing around 500 trips a day,” Mr Rozo says. “Now it’s down to about 80.” Industry in Táchira has been hit too, since many companies depended on imports from Colombia.
The border is not closed. But few of the 30,000 Colombians who used to cross each day to shop do so now, because Venezuela’s National Guard confiscates their goods when they recross the border, says Mr Uribe, the shopkeeper. Venezuela’s government has stopped issuing import permits, nor is it providing dollars at the official exchange rate for imports from Colombia (a dollar costs almost three times more on the parallel market)...
Click here to read the complete article from the Economist
Under the plan, the state-owned oil and gas giant Petrobras will be the sole operator of the new oil reserves. It will also have a minimum 30-percent stake in all future projects in the pre-salt layer fields.
Brazil Tries to Maximize Offshore Oil Bonanza-- Latin America Herald Tribine Brazilian President Lula revealed the government's plans to make Brazil one of the top 10 oil producers in the world and develop what he believes are the world's 9th largest oil reserves, but his announcement of increased state control and further equity sales shook markets, causing Petrobras to lose $7 billion in value in one day.
Petrobras Loses $7 Billion Value as Lula Seeks Stake -- Bloomberg Brazilian President Luiz Inacio Lula da Silva’s plans for the development of the country’s offshore oil fields stripped Petroleo Brasileiro SA investors of $7 billion in a day.
The proposal, announced yesterday, may allow the state to boost its stake in the company and ensure most income from oil exploration “stays in the hands of our people,” Lula said at a press conference in Brasilia. Petrobras, as the Rio de Janeiro- based company is known, led the Bovespa stock index to the biggest drop in the Americas yesterday after the announcement.
Chavez said in a statement published in the Lima daily El Comercio that “many people don’t know” that Venezuelan state oil giant PDVSA, through its Citgo subsidiary, has seven large refineries and more than 10,000 service stations on U.S. soil.
“Venezuela can’t take a decision against ourselves. We send the oil to our refineries and to our distribution systems in the United States,” he said.
Caracas Stock Market Up 3% for the Week -- Up 41% for the Year -- Latin America Herald Tribine The Caracas Stock Index rose 3.16% for the week to close at 49,507 mostly on the back on the continued rise of Sivensa shares on continued optimism over the buyback of its shares to be considered at its shareholders meeting next week. Sivensa shares rose sharply, closing at Bs. 16.5 for a 37.5% rise.
The guerrillas opened fire around 3:30 a.m. on the Jose Olaya base in the strife-torn Valley of the Apurimac and Ene rivers, known as the VRAE region, Canal N said.
With a medal and a parchment scroll, the General Assembly of the United Nations Organization named Morales “the maximum exponent and paradigm of love for Mother Earth” in the resolution for his decoration that was read during the ceremony.
Hydrocarbons Minister Oscar Coca sent Bolivia’s Foreign Ministry a note requesting that a formal complaint be made since the body of water straddles the border between the two nations, ABI said.
“Since Lake Titicaca is a bi-national area, it’s obvious that there can’t be unilateral actions” and therefore the matter requires a diplomatic solution, Coca said.
[Cuba] -- Cuba endeavors to raise farm output amid economic downturn -- Xinhua Pressured by a global economic crisis and a stern U.S. economic blockade that has lasted nearly half a century, Cuba is actively seeking ways to boost its agricultural production.
The measures include turning over land close to cities to residents to plow, replacing fuel-burning tractors with oxen, redistributing fallow land and raising the prices of state-regulated farm products.
Venezuela's golfers react after Chavez says their sport is bourgeois and calls players lazy, as the government shuts down courses to build low-income housing.
Today, I present to all readers, Pamela Fernandez, a university colleague of mine from Honduras who was nice enough to email me a incredibly well articulated analysis of the situation going on down in Honduras. The original message arrived in my mail box last night at 1:18 am, June 29, 2009 - Eastern Standard Time.
Pamela writes:
I feel the media has done a terrible job in reporting the events that took place yesterday in Honduras. A friend of a friend mainly wrote the following 8 points. I have edited them out a bit and added the translation of the constitution article. Below you’ll find my views.
1. The event this morning should be taken as an arrest against a Honduran citizen, Manuel Zelaya, who broke the constitutional Honduran law in multiple occasions over the last few days. This SHOULD NOT be taken as a Coup d'état. TRANSLATION - Article 239.- The citizen that has been the head of the Executive Branch cannot be President or Vice-President again.
Whoever violates this law or proposes its reform, as well as those that support such violation directly or indirectly, will immediately cease in their functions and will be unable to hold any public office for a period of 10 years.
2. The vast majority of Hondurans firmly oppose Manuel Zelaya and are in favor of his arrest.
3. The current news being portrayed in international networks appear to be heavily tilted toward a contrarian view of most Hondurans.
4. The majority of Hondurans are not in favor of Manuel Zelaya and are extremely proud of our congress and military for their stance in favor of democracy and peace.
5. The events happening today were caused by an attempt by Manuel Zelaya to manipulate our country and its constitution to fulfill his ultimate goal of remaining in power indefinitely.
6. The world should be proud of Honduras as we are the first Latin-American country to stand against a tyrannical leader who has tried to topple democracy and peace in our country.
7. Declarations made by Hugo Chavez should be discredited immediately. He should, as President Obama said, allow Hondurans to solve this issue through open communication following LEGAL processes.
8. It is ONLY in the interest of Honduras and its citizens that democracy prevails.
Now mine:
Facts: • The economic growth the country experienced in 2006 was a result of the previous government not of Mel’s. The country is now in as much debt as it was before. After a GDP growth of 6% in the 2005, according to the World Bank it is expected to fall to about 2% in 2009.
• In December 2008, Mel decided to raise the minimum wage by 60% against the economists and private sector advice. The government itself will not be able to pay the public employees including teachers and doctors next year. It has resulted in a higher than unemployment rate and it is expected to rise even more in 2010.
• The public higher education system cannot afford to pay the university professors under the new minimum. The professors went on strike for two months and the issue still undresolved.
• After the recent earthquake Mel denied the severity of the damages in port city of Puerto Cortes and never declared a state of emergency in the country. In previous years, he had also undermined the impact of floods and hunger stricken south.
• There were no reported cases of swine flu in Honduras before the OAS summit in San Pedro Sula. Once the summit was over the cases jumped from 0 to 118 as confirmed by the BBC. But the Health Ministry says there are 1,000 cases.
• According to the Observatorio Centro Americano de la Violencia, the there are 42 homicides per 1,000 inhabitants; the international rate is 8.8. In average, there are at least 12 violent deaths per day, the highest in Central America.
• According to the 2004 World Bank report, 50% of the population lived under the poverty line and 36.2% below the extreme poverty line 36.2%. The World Food Program estimated it at 73% in 2008; currently the BBC reports a 70% in the country profile.
• The country’s budget for the 2009 fiscal year was never made, some argue there’s no money and that’s why Mel would not make it.
• No body really knows how many millions of Lempiras and possibly dollars were spent on publicity for the referendum.
• Mel was paying people to vote “Yes” in the referendum.
• Hugo Chaves, Correa, Elbo and Ortega are currently in Nicaragua holding an emergency meeting of the ALBA and Central American nations. Chavez said that he would respect Honduras’ sovereignty and would not make a military intervention.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Rumors:
• The referendum materials were sent from Venezuela.
• Mel would have done an “auto” Coup against the congress and the military today if the Public Ministry (not the military) had tried to stop the voting.
• Based on a reported increase flow of Nicaraguans into Honduras: hundreds of Nicaraguan soldiers crossed the border on Friday and Saturday disguised as civilians.
• Chavez is planning to do a military intervention in Honduras. Still, his discourse last night was borderline offensive.
All that said, the president of congress Roberto Micheletti was sworn as interim president promising and making it a decree to hold the general elections on November 29th as scheduled and give the power to the elected president on January 27th. The military is not in power, they just did their job and defended the constitution.
Of course, there are plenty of sketchy things in the whole process. For example, Mel’s resignation letter, which he denies writing, the fact that Micheletti was running for president but lost the primaries are just a few; and the fact that TV, radio, and internet were cut in the main cities for couple of hours during the coup. Also a fact, not every Honduran likes Micheletti but not every Honduran likes Mel. We are trying to pick the lesser of 2 evils.
I’m not against the citizens’ right to give their opinion in the referendum but the Electoral Institute was not supervising it. I, as are many Hondurans, am aware of the social injustice and the extreme poverty in my country. We feared and questioned the transparency of the process. We also believe, and know, that Mel was acting on his interest and not that of the country.
I’m not happy that we have come to this but now we can only wonder what would have happened if Mel had gone ahead with the referendum. From my point of view, the assurance of elections in November makes this a move in favor of democracy and not one against it. Sadly, the international community does not see it this way. The UN, OAS, EU and US want Mel back because he was democratically elected, Honduras doesn’t want him back because he was trying to interrupt the democratic process by staying longer as a president.
Honduras is in peace right now, nobody died, very few were hurt, after some riots by Mel’s supporters yesterday there’s no civil unrest. The curfew is not against civil liberties it is meant to prevent riots and such from happening. In case that rumors are true and Hugo Chavez tries to use military force in Honduras, we hope and pray… I hope he doesn’t and hope we can get back solving the real problems of the country.
The good thing in all of this? I want to believe that Hondurans will wake up and take a more active role in politics. That hopefully the corrupt politicians will take a hint and realize that the “people” as Mel said can stand up against them when need it.
If you read this much, THANK YOU very much,
Pamela Fernandez is graduate of American University who specializes in visual media and film studies. You can learn more about Pamela and see some of her work at her personal site -- http://www.pamelafer.com/
My own personal analysis and more in depth coverage to come tomorrow. Had a very hectic day that kept me away from posting on this, very relevant and important story to get out to the world.
For now, if you have yet to read... please check out some of the following sites.
1. Peruanista -- Gives a summary of all major news sites, from AP, to Reuters to Al Jazeera
The Chair of the Permanent Forum on Indigenous Issues (UNPFII) expresses her shock and deep distress at reports received of atrocities committed starting 5 June against indigenous peoples in the Amazon region, resulting in the loss of lives, disappearances and grave injuries. The Chair sends her deepest condolences to the families of the victims. The Chair calls upon the Peruvian Government to:
* Immediately cease all violence against indigenous communities and organizations, * Ensure immediate and urgent medical attention to the wounded and assist the families of the victims, * Abide by its national and international obligations regarding the protection of all human rights, including the rights of indigenous peoples and human rights defenders, especially their right to life and security.
Victoria Tauli-Corpuz
President United Nations Permanent Forum for Indigenous Issues
TARAPOTO, Peru June 6 (Reuters) - Hundreds of indigenous protesters were holding 38 police hostage early on Saturday in Peru's Amazon jungle after fights between tribes and police killed up to 33 people in the worst violence of President Alan Garcia's government.
Demonstrators also were threatening to set fire to an oil pumping station of state-owned Petroperu unless the government told police to halt efforts to clear weeks of blockades of roads and rivers that have hurt food and fuel supplies.
Tribes, worried they will lose control over natural resources, have protested since April to force Congress to repeal new laws that encourage foreign mining and energy companies to invest billions of dollars in the mostly pristine rainforest.
Violence broke out on Friday as police tried to disperse a roadblock on a stretch of highway called "Devil's Curve" in the Bagua region of Amazonas province, about 870 miles (1,400 km) north of Lima, the capital.
Indigenous leaders said at least 22 protesters were killed. The government reported the deaths of three protesters and 11 police officers, some from spear wounds. At least 100 people were injured and more conflict appeared possible.
The Ecuadorian government announced plans yesterday of the establishment of a joint mining company with the country of Venezuela and possibly Bolivia. You can read all the vague details in this article from Chinamining.
"We are going to build a great mining company in association with Venezuela and perhaps with Bolivia to exploit some veins of mine ore returned to the State from private hands,"said Ecuadorian Minister of Mines and Petroleum Derlis Palacios.
Latinamerica foreign trade forecasted to contract 9 to 11% in 2009 The main impact for Latinamerica of the global financial crisis and economic slowdown has been the contraction of trade, so far in the range of 9 to 11%, revealed Alicia Bárcena, Executive Secretary of the UN Economic Commission for Latinamerica and the Caribbean, Cepal.
“The strongest impact we are seeing in the region is the fall in trade volumes. I believe that the “shock” of the contraction of global demand for our goods and services is our most relevant issue”, said Bárcena in an interview with the Cuban daily Granma.
She recalled that when the last big crisis Latinamerica’s foreign debt was equivalent to 24% of GDP, while in 2008 it had dropped to 8%.
Latinamerican Liberals hold congress in “Bolivarian” Venezuela Liberal political parties and thinkers from Latinamerica are holding their annual congress this week in the Venezuelan capital Caracas. The event is in the framework of the 25th anniversary of the local branch Cedice-Libertad and will promote debates on liberal policies to address poverty and the current global slowdown.
...
The congress is bound to spark some reaction among President Chavez followers since his Bolivarian revolution and XXIst Socialism stand at the opposite end of the political spectrum from the Liberals and the concept of individual freedom.
The two events will be taking place during a particularly sensitive week since President Chavez has ordered the nationalization of oil industry subcontractors, banks, steel industry, food processors and farm land considered idle.
Foreign direct investment to Latam reached 139 billion USD in 2008 Direct foreign investments in Latinamerica and the Caribbean are showing a significant resistance to the global crisis and in 2008 reached a record 139 billion US dollars, up 9.4% from the previous year according the United Nations Conference on Trade and Development.
Latinamerica’s bicentennial independence festivities begin in Bolivia Bolivia’s commemoration on Monday May 25th of the 200th anniversary of the first uprising in Latinamerica against the Spanish colonial empire will also mark the beginning of similar independence celebrations along the continent which will peak in 2010.
Third re-election running “inappropriate” admits Colombia’s Uribe Colombia’s President Alvaro Uribe says it would be “inappropriate” for him to seek a third consecutive term. His statement comes two days after the Senate approved a referendum that would ask voters to permit him to run again. Uribe did not, however, clearly rule out a re-election bid.
*** Venezuela is a difficult subject to report on. Unless you dig, finding reporters/ journalists with integrity who strive to present a story that is unbiased, it is extremely difficult to get accurate perspectives on the country.
Therefore, when reading articles from major media I tend to focus on the hard data from reliable sources and perspectives which come in the form of direct quotations of "experts," whom represent different points of view. I then disseminate the entire article and form my own opinion.
Hey that's how I do it, you might have your own system. Regardless, in situations such as this where I am publishing a Newswire post on Venezuela where the posts come mainly from:
1.Bloomberg, a U.S financial news giant that loves capatalism and therefore tends to look down on such things as nationalization of private industry.
2. The Latin America Herald, a publication which does a concise job of reporting on all the major headlines that are worthy (in its opinion) for its fan base of wealthy Miami/Ft. Lautherdale dwelling Latinos.
Ok, here we go. Lets start off with a more feel good story about martial arts in Caracas.
Venezuelans aim to kick crime out Ask most residents of Caracas what the city's biggest problem is, and the vast majority will say "crime". Official figures show a huge increase in violent crime in the Venezuelan capital over the past decade, reaching a total of 130 murders per 100,000 population last year compared to 63 per 100,000 in 1998.
Little wonder then that demand for self-defence classes is at an all-time high. Some martial arts teachers report a five-fold increase in their attendance levels over the past few years.
"My classes have become noticeably larger in the past months," says Karin Yamur, who teaches taekwondo in different parts of the city.
Venezuela Seizes 60 Oilfield Service Company Assets Venezuelan President Hugo Chavez seized assets from 60 oilfield services companies including Oklahoma-based Williams Cos., using a law the national assembly passed yesterday.
“Petroleos de Venezuela doesn’t have the management and strategic capacity to operate these companies properly,” said Jorge Pinon, a fellow at the Center for Hemispheric Policy at the University of Miami, referring to the state-owned oil company. “You’ll see a substantial drop in oil production.”
Chavez Seizes Farms, Says Land Is People’s Property Venezuelan President Hugo Chavez said land should be considered the property of the people and ordered the government takeover of a group of farms that he said were being underused.
Arsenal Seized from French Expat in Venezuela An “arsenal of war” including high-powered rifles, grenades, explosives and a flame-thrower, was seized Friday from the home of a French citizen residing in the Venezuelan capital, authorities said.
Venezuelan Broadcaster Facing Sanctions for Quake Coverage Conatel, the agency that regulates telecommunications and broadcasting in Venezuela, notified Globovisión television of a suit being filed against it for reporting on this week’s moderate earthquake in the Andean nation before any announcement by officials or state-run media.
Hilarious clip from last nights Colbert Report on Comedy Central. If you are a international reader or simply someone who is not familiar with Stephen Colbert I would like to point out that he is the host of a show that is a political satire.
Please watch with a open mind and realize he is being sarcastic...
Overall, this Reuters video does a decent job of summing up the Summit of the Americas in 2 minutes time. It doesn't go into too much detail, but does highlight how the leaders of the Americas received the new president of the United States.
Other countries news sites had slightly different areas of focus than the coverage in the NYT, WSJ or other major online US news.
Apr. 19 (Reuters)- Latin American leaders are hailing as a success an Americas summit that consecrated President Barack Obama as a positive partner in the hemisphere.
Good old Hu Jintao and señor Chavez met in Beijing today and agreed to step up their efforts to advance cooperation in energy, agriculture and technology.
The two also agreed to take joint steps to combat the financial crisis. How they hope to achieve such a grand goal, one can not say. All in all it's not much different than all the talk that has been going on about fighting the global financial crisis.
Chinese President Hu Jintao (R) meets with Venezuelan President Hugo Chavez at the Great Hall of the People in Beijing, capital of China, 4/8/09. (Xinhua)
APEC, the UN, IMF, US-Euro, the "G2," etc. All these multilateral organizations and the major economies of the world seem to be making a lot of pledges these days. If anything I think its a good thing in order to restore confidence around the globe. As for this recent foray of China-Venezuelan Cooperation, it is nothing THAT special.
It indicates Chavez continues to aggressively pursue new export markets for Venezuela's oil. Chavez was in Japan earlier this week where he also succeed in getting Japan to promise over $30 billion in investments for Venezuela's oil and gas industry in exchange for guaranteeing a healthy supply for the island (see this Bloomberg article).
Chavez also thanked China for the successful launch of Venezuela's first telecommunications satellite, which according to Chavez will help the "Bolivarian Nation," (a.k.a. Venezuela) achieve scientific and technological independence (see this CNN article about the launch).
Second, it shows that even in the wake of a financial crisis, developing nations are mutually interested in building their relations for the long-term. This means that they remain optimistic about the long-term picture.
A good thing considering growth in the developing world and rising demand from domestic economies is going play a siginificant role in helping the global ecoonomy emerge from this financial crisis.
Of all the announcements, the most important would have to be Hu Jintao's rhetoric. China has its poker face on and is planning its next couple of moves VERY carefully.
The financial crisis has given it a golden opportunity to assert it self on to the world stage. Personally, I believe leaders in China would have preferred to wait a while longer before being forced onto the world stage as a major decision maker and agent of change.
By forging strong alliances with the other developing countries like Venezuela and more importantly the fellow members of the BRIC block (Brazil, Russia, India and China), Hu Jintao and the rest of China's leaders are slowly building allies to support China in a new global framwork.
April 3 (Bloomberg) -- Global leaders took their biggest steps yet toward a new world order that’s less U.S.-centric with a more heavily regulated financial industry and a greater role for international institutions and emerging markets.
At the end of a summit in London, policy makers from the Group of 20 yesterday delivered a regulatory blueprint that French President Nicholas Sarkozy said turned the page on the Anglo-Saxon model of free markets by placing stricter limits on hedge funds and other financiers. The leaders also pledged to triple the resources of the International Monetary Fund and to hand China and other developing economies a greater say in the management of the world economy.
April 3 (Bloomberg) -- Emerging-market governments and companies borrowed more in international bond markets this week than at any time in the past two years as interest costs plunged on optimism the worst of the global recession may be over.
April 3 (Bloomberg) -- China’s economy may grow as much as 10 percent by the final quarter of this year as the government’s 4 trillion yuan stimulus package ($585 billion) takes effect, Nomura Holdings Inc. said.
“An investment boom led by the government’s stimulus package and a very low growth rate in the fourth quarter of 2008 may push growth to rebound to around 10 percent” by the fourth quarter of 2009, Sun Mingchun, an economist at Nomura in Hong Kong, said yesterday. The economy grew 6.8 percent in the fourth quarter of 2008.
April 2 (Bloomberg) -- Venezuelan President Hugo Chavez said he’ll seek investment agreements this week during a trip to Japan and China to secure financing for oil projects in the South American country.
Chavez is making stops in Asia and the Middle East to deepen economic ties after a plunge in oil prices forced him to cut government spending last month. He met yesterday with Iranian President Mahmoud Ahmadinejad to inaugurate a joint development bank
April 3 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner reiterated her country’s claim to the Falkland Islands and called on the U.K. to renew talks on their sovereignty, Agence France-Presse rep
... is this woman smoking crack? Didn't Argentina learn that you do not mess with the British, they ruled the friggin world for nearly two centuries.
WHAT ON EARTH DO YOU WANT WITH SOME ISLAND IN THE MIDDLE OF THE ATLANTIC OCEAN, WHERE THE PEOPLE FEEL BRITISH...
In a move seemingly designed to prevent the opposition from being able to use any of the gains they made in November's elections, Chavez ordered that major ports administered by Opposition governors be taken into his control.
CARACAS – Venezuelan state energy company PDVSA announced the signing of a multi-billion-dollar joint venture with Portuguese, Argentine, U.S. and Japanese firms to develop massive offshore natural gas fields.
The venture, in which PDVSA will have a majority stake, will design, build and operate two liquefaction plants at the Gran Mariscal de Ayacucho gas industrial complex in the northeastern state of Sucre, as well as pipelines to transport the fuel to those facilities.
Caracas was lined with people this Saturday as thousands of Venezuelans turned out ahead of the February 15th referendum to protest against the potential end to presidential term limits.
Venezuelan society remains polarized down the middle in terms of those who support Chavez and those who oppose him. However, past attempts by Chavez to change the constitution in order for him to be allowed to run for reelection in 2012 and beyond have failed.
Manifestantes participaron en marcha contra la aprobación de la enmienda constitucional del presidente Hugo Chávez en Caracas, 7 feb 2009. REUTERS/Carlos Garcia Rawlins (VENEZUELA)
If one thing is certain, Latin Americans have had their share of "leaders for life." Even some ardent Chavistas think it's taking things a bit too far.
This is where it seems the opposition, particularly from the Universities are focusing their campaign, passing out pamphlets of a very interesting quote by Chavez's ideological buddy Simon Bolivar.
"Nothing is as dangerous as letting the same citizen remain in power for a long time."
~ Simon Bolivar-- 19th century leader of Latin America's struggle for independence against Spain
Feb. 6 (Bloomberg) -- Argentina plans to offer international investors terms in an exchange of government debt that differ from those given to domestic holders, a government official said.
The Economy Ministry is still developing the terms of the debt swap for foreign investors, according to the official, who declined to be identified because he isn’t authorized to speak to the media. Overseas creditors will get a different bond than locals got in exchange for the so-called guaranteed loans they hold, the official said. The bonds will be denominated in foreign currency and will be subject to international law, the official said.
Feb. 6 (Bloomberg) -- Venezuela will spend $1.65 billion from its National Development Fund in the first quarter, as the oil-exporting country maintains public spending after a drop in crude prices, President Hugo Chavez said.
Venezuela plans to invest $225 billion in oil and non-oil projects over the next four years, Chavez said today in comments broadcast by state television. Venezuela’s socialist economic policies will help shield it from the effects of the global recession, he said.
Before recessions in the world’s largest economies, Brazil had expected average annual economic growth of 4.9 percent between 2008 and 2017, Lobao said today during public hearings on a revised 10-year energy plan. Revisions to the annual figures are expected in March or April.
Feb. 6 (Bloomberg) -- Bolivia’s energy minister said the country expects to boost oil and natural-gas investment to $530 million this year as ventures with Russia and Venezuela fill a void left by private investors.
Gazprom OAO, Russia’s natural-gas exporter, agreed to develop deposits in Bolivia’s gas-rich eastern lowlands, Bolivian Hydrocarbon and Energy Minister Saul Avalos said in an interview Feb. 4 at his La Paz office. Venezuela and Bolivia’s state oil companies plan to invest $240 million to explore in Bolivia.
“The amount of investment this year is higher than before the nationalization,” Avalos said.
Feb 1 - Authorities say an armed gang destroyed sacred objects and sprayed anti-Semitic graffiti in an attack lasting several hours.
The Israeli Association of Venezuela believes there has been an increase in anti-Semitic sentiment in the country whose president Hugo Chavez has described Israel's Gaza offensive as a holocaust.
Venezuela has a huge debt about $46 billion according to Standard & Poor's. Venezuela also has about $29 billion in foreign reserves that it can use for paying the debt. So what's the problem and why has Bloomberg compiled this huge article quoting people from both sides?
It is clear Chavez wants to stay in power, and he's pushing yet another vote to see if the population will approve. Well, because the reality of the matter lies somewhere in between the pessimists who think Chavez is the Anti-Christ and will never pay back the country's debt and is slowly turning the nation into a communist, rouge state and the Chavistas who praise him and listen to every word he says like it's fact.
Foreign investors need to realize there is always an inherent risk when you buy up bonds that where yielding more than US treasuries from a Latin American country. Like... honestly, if there's anything the Madoff scandal should teach us is to not be blinded by greed.
"The average yield on the government’s dollar bonds rose to 17.40 percentage points more than Treasuries, from 14.74 points when he took office a decade ago, according to JPMorgan Chase & Co."
Furthermore, as you saw with Ecuador which recently said it will have to re-examine some of its own foreign denominated bonds, it is conveniently not doing so with bonds held by the Venezuelan government. All those foreign bond holders out there should check to see if there are any buddy's of Chavez who own the ones you do. If they do, I think you'll be safe, hehe.
Petroandina, a joint enterprise formed by the Bolivian and Venezuelan state energy companies, plans to invest $883 million to finance oil and natural gas exploration and production in Bolivia, a top official said.
Energy Minister Carlos Villegas announced the figure Tuesday during a press conference to discuss Petroandina's operating contracts, which the Bolivian Congress is set to vote on shortly.
According to Villegas, Petroandina will invest $242.2 million in the western Andean province of La Paz and another $646.1 million in central and southern Bolivia...................
Click here to access the full article from Rigzone
Venezuelan President Hugo Chavez is flexing the country's petroleum muscle once again, stating he seeks to expand Venezuela's oil pact to poor nations in the Caribbean.
Chavez stated "Nations taking part in Petrocaribe initiative will now be required to pay just 40% of the bill within 90 days - down from the current 50%. The rest can be paid over the next 25 years at a fixed rate of 1% percent as long as oil prices are above US$100 a barrel.
"That could compensate for the horrible curve of the jump in oil prices," Chavez said. He added that 70 percent of payments may be deferred if oil reaches US$150 a barrel.
AP Photo
In this photo released by Miraflores Press Office, Venezuela's President Hugo Chavez speaks during the opening ceremony of the Petrocaribe Summit in Maracaibo, Venezuela, Sunday, July 13, 2008. President Hugo Chavez sought to expand an oil-supply pact that is delivering fuel to 17 nations, calling it a tool against poverty and dismissing opponents' accusations that he is giving away Venezuela's oil wealth.
Sounds really generous to me... Venezuela is unarguably of the wealthier Caribbean nations in the Caribbean, however it does remain a country with many economic problems. Calculating if such a long-term donation is even feasible is difficult to do. So many variables could arise in the next 25 years which could cause the cash flow from its oil accounts receivable ledger simply stop...
New government could come into power who don't honor the repayment. Alternative energy could leap frog and bring the price of oil down substantially. A new government could come into power in Venezuela and re-arrange the terms, leaving small Caribbean contries with little bargaining power against Venezuela: their provider of energy and also regional political and economic power.
No less the gesture as it stands is a nice one, and in reality there is just so much domestic investment that is possible given Venezuela's limited FDI and internal domestic capacities. Oil drills may be in shortage, but so is the industry as a whole since the PDVSA strikes. Given the set backs, PDVSA remains a relatively vibrant operation, turns a profit and even manages to give Chavez some diplomatic barganing chips by making Venezuela into a gracious, oil rich country which cares about its region and the poor of world... unlike the United States, which is a underlying point Chavez hopes to make through such efforts.
Economist Article --
