Category: Argentina

Bolivia is streaking ahead in the race to become Latin America’s first failed state. It faced stiff competition from Argentina, from Venezuela and Ecuador, but now it’s in a class of its own. President Carlos Mesa announcing his resignation stated in a pitiful speech: I’m really sorry if I’ve been incapable of governing Bolivia well.” How right he was………

Bolivia really could have succeeded. Its reserves of natural gas could have generated enough money to make a far-reaching attack on poverty and social exclusion. The economy did grow and poverty has receded, but Bolivia’s elites, political parties and institutions failed to mature.

Nationalizing the gas industry will further isolate Bolivia and ensure that most of its gas stays in the ground. Limited exports will benefit only a clique of corrupt bureaucrats and politicians. Latin America’s narcomafias are descending on Bolivia as are every political opportunist around, led by Hugo Chávez of Venezuela. Chaos and corruption will accelerate regional, social, and ethnic fragmentation, creating an unstable state in the very heart of Latin America. It’s time Latin America’s sane leaders – President Luiz Inácio Lula da Silva of Brazil or Tabaré Vázques of Uruguay – stepped in to calm the hysteria in La Paz.

Venezuela plans to buy another $100 million in Argentine bonds this month in the second tranche of an operation that could reach $500 million. S&P rates Argentina’s debt B-, six levels below investment grade.

Spanish-Argentine oil company Repsol YPF pledged to invest at least $6.5 billion in Argentina through 2009. $4.4 billion of that sum will finance petroleum and gas exploration while the rest will go toward refining, marketing and chemical projects. The company also promised to invest $850 million in Bolivia and $650 million in Brazil over the same period.

Argentina’s trade surplus rose in April to $1.2 billion, the highest level in eleven months as exports grew to record high. Exports rose to $3.6 billion from $3.03 billion in March while imports rose to $2.4 billion from $2.2 billion.

Argentine Central Bank President Martin Redrado said the country’s international reserves will climb 9 percent to $24 billion by yearend as an export-led economic expansion boosts the flow of dollars into the country. Reserves this year have climbed to their highest level since the government defaulted on $95 billion in debt in late 2001. Argentina’s central bank, which buys US dollars from exporters and sells pesos, more than tripled daily purchases this month to an average of $76 million a day, from $23 million in April.

Telesur, a new television network spearheaded by Venezuelan President Hugo Chavez and created with support from the Venezuelan, Cuban, Argentine and Uruguayan governments, has launched its test signal and will begin programming in late July. The network plans to air 24 hours of continuous Latin American news, documentaries, interviews and movies. Detractors say the network will be an ideological arm of the participating countries – all of which have leftist governments – and will spin anti-American propaganda.

Three leading Argentine economists from the Buenos Aires-based Latin American Economic Foundation (FIEL) will analyze Argentina’s current economic situation and the reasons for its strong recovery. The speakers will look ahead at the prospects for macro-fiscal sustainability after the debt restructuring, and will examine in depth the remaining constraints and challenges for sustaining economic growth in Argentina.
Featured Speakers are: Daniel Artana, Juan Luis Bour and Fernando Navajas
Date: Thursday, June 2, 2005, 4.00-6.00 Location: The Biltmore Hotel, Coral Gables, Florida Program Fee: $30 Registration: RESPOND by email to center@exchange.sba.miami.edu by fax: (305) 284-9871 or by phone: (305) 284-3708

The IMF postponed for one year $2.5 billion worth of debt Argentina was scheduled to pay this year. Argentina currently owes the IMF $13.4 billion and is in discussions to reach a new loan agreement with the Fund. The country has cancelled $5.4 billion of its debt to the IMF since 2002.

Argentine industrial production rose 10.1 percent year-on-year in April, boosted largely by growth in the auto industry and the non-metallic mineral products sector. Capacity utilization in the industrial sector stood at 71 percent, compared to 68 percent a year earlier.

Electricite de France, the world’s largest power company, is in talks with Argentine investment fund Dolphin Group to sell its unprofitable unit Edenor, which provides electricity to Buenos Aires. EDF last month hired JPMorgan Chase to help it initiate preliminary talks to sell Edenor as it divests Latin American units to write off debt in preparation for an initial public offering in France.