Argentine exports: more of the same?

by Jude Webber for Financial Times – Beyond Brics, February 25th, 2011.

Argentina has scrapped the government agency responsible for granting export permits to farmers.

Cause for rejoicing among farmers who have long been demanding just that? No. Farmers say the move to replace the ONCAA agency with the snappily titled “Internal Consumer Subsidies Coordination and Evaluation Unit”, under the auspices of the economy ministry, will change nothing.

“I don’t see any change in our favour. I see this as reaffirmation that the current policies will remain in place,” says Sean Cameron, vice president of the Aaprotrigo wheat producers’ group.

Amado Boudou, the economy minister, said the changes will “guarantee domestic supplies” and promised an interdisciplinary vision from now on within the economy, industry and agriculture portfolios. The new unit is also intended to boost supply “since the conditions are there for Argentina to continue being a big player on world markets”, and to foster growth for small and large producers alike. (continue reading… )

 

Peru cuts ties with Libya and condemns violence

by BBC News, February 23rd, 2011.

Peru says it has suspended diplomatic relations with Libya over the use of force against civilians there.

It is the first country to take such a step since the anti-government protests erupted in Libya last week. Peruvian Foreign Minister Jose Antonio Garcia Belaunde said he hoped other Latin American countries would follow suit. Peru said the move was aimed at highlighting “the grave situation in Libya”.

Peruvian President Alan Garcia condemned developments in Libya, saying that “Peru expresses its most energetic protest at the repression carried out by the Libyan dictatorship of Muammar Gaddafi against his people, who are demanding democratic reforms to change a government led by the same person for 40 years.”

Mr Garcia said he would ask the United Nations Security Council to impose a no-fly zone over Libya, to prevent the use of fighter jets against the civilian population by the Libyan government.

Meanwhile, Libya’s traditional allies in the region, Cuba and Venezuela, have urged what they called imperialist states to stop interfering in Libya. The former Cuban leader Fidel Castro accused the United States of being ready to order an invasion of Libya.

On Monday, Venezuelan Foreign Minister Nicolas Maduro said he hoped the Libyan people would find “a way of solving their problems peacefully without the interference of imperialist states whose interests in the region had been affected”.

 

 

Brazil’s ex-President Lula faces misconduct inquiry

by BBC news, February 23rd, 2011.

Federal prosecutors in Brazil say they are opening a case against former President Luiz Inacio Lula da Silva for alleged misuse of public funds.

They say the ex-president sent out 10 million letters to older Brazilians promoting low-interest loans in 2004. They allege the letters were not in the public interest and benefited a bank which was linked to another corruption scandal.

Lula has not yet commented on the allegations. One of his cabinet members, former Social Security Minister Amir Lando, is also being investigated.

‘Self-promotion’

The two allegedly sent out the letters to 10.6 million retirees in 2004 at a cost of around $3.5m. The letter informed pensioners of a new credit scheme which would allow them to take out loans at a reduced rate of interest.(continue reading… )

 

Oil leak

by The Economist, February 24th, 2011.

Could one of the world’s top petroleum producers really go bankrupt?

Ever since Greece plunged into a sovereign-debt crisis in 2009, investors have focused on which European country might be next. According to Capital Economics, a research firm in London, however, the next trouble spot could be Venezuela. “There is a growing risk that the government will default on its obligations in 2012,” its analysts wrote on February 17th. Some in the markets have taken fright, too: the country’s credit-default swaps imply a 50% chance of default by 2015. That may be overblown. Even so, Hugo Chávez, Venezuela’s leftist president, seems to be pulling off a dubious achievement by causing the bond markets to fear for the solvency of the world’s eighth-largest oil producer.

The chief cause of Venezuela’s travails has been Mr Chávez’s pillaging of PDVSA, the state oil firm. He has packed it with loyalists, starved it of investment and used it for social spending, cutting its output from 3.3m barrels per day (b/d) in 1998 to around 2.25m b/d, according to industry estimates. Of that, some 1m b/d is sold at subsidised prices at home or to regional allies, leaving just 1.25m b/d for full-price exports.

Meanwhile, the president’s hostility to business has devastated the rest of the economy. He has nationalised hundreds of companies and trumped up charges against their owners, causing much of Venezuela’s private sector to shut up shop and flee. As a result, the country has seen vast capital flight, and must import many goods that it used to produce. Non-oil exports have ground to a halt: petroleum now accounts for 92% of its dollar intake. (continue reading… )

Seven Latam countries on track to have credit ratings upgraded

by Merco Press News, February 25th, 2011.

Seven countries in Latin America are on track to have their ratings upgraded in the short term, as the region’s credit cycle remains supported by healthy economic growth and greater policy stability, Fitch Ratings said on Thursday.

Countries such as Brazil, Colombia, the Dominican Republic, Panama, Peru, Suriname, and Uruguay all have a positive rating outlook from Fitch, although it’s not clear which of them could be upgraded this year, the agency said in a report.

“Fitch expects sovereign credit trends to remain positive in Latin America in 2011,” Fitch’s analysts Shelly Shetty and Erich Arispe said in the report.

The upgrade of Chile’s foreign-currency ratings to A-plus earlier this month was an early sign of that positive trend, they added.

Latin America’s credit cycle is underpinned by continued growth dynamism in most of the region, which is expected to grow 4.1% this year, down from an estimated 5.6% in 2010, Fitch said.

Risks to Fitch’s positive outlook come mostly from abroad, with possible weakness in U.S. and Chinese external demand. Lower commodity prices resulting from lower growth in the world’s largest economies could derail improvements in fiscal and external indicators of Latin American countries, Fitch said. (continue reading… )