Archive for January 17th, 2013

US may become largest oil producer in 2013

| January 17th, 2013 | No Comments »


Will the United States be the top oil producer in 2013?

Yes, according to British oil giant BP (BP). The company’s Energy Outlook for 2030 report projects that the U.S. will move past Saudi Arabia and Russia this year in terms of energy liquids production. That’s crude oil and biofuels. And the U.S. is likely to hold on to that position for 10 years until 2023.

The reason for the production gains is the emergence of “tight oil,” which is how the industry terms what’s coming from shale deposits such as the Bakken shale in North Dakota and Montana as well as in Texas and Louisiana.

Moreover, the report says, the United States will become “nearly self-sufficient in energy” by 2030, while India and China will become increasingly dependent on energy imports.

Global energy demand will grow 1.6% a year — 36% overall by 2030. The global population will grow by 1.3 billion to roughly 8.3 ... Read More

5 Ways Hugo Chavez has Destroyed the Venezuelan Economy

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It is unclear if Venezuelan president Hugo Chavez will make a full recovery from his most recent surgery in Cuba. Whatever happens, he always stirs a lot of passions. Certainly that is the case when thinking of what his lasting legacy in Venezuela will be.

On the left he is seen as a socialist hero who broke the Venezuelan “oligarchy” and defended the country against the “American Empire.” On the right he is the socialist anti-Christ who “brought Afghanistan to South America.” But perhaps one of the simplest ways to judge his reign, is to remove the politics and look closely at his economic record.

Take gross domestic product, or GDP. In that case the record is certainly mixed. There was strong economic growth from 2004 to 2008 but GDP fell in 1999, 2002, 2003, 2009 and 2010. From the time Chávez took office in 1999 to 2011 Venezuela’s economy ... Read More

Chávez’s useful idiots

| January 17th, 2013 | No Comments »
The Spectator


In the ranking of dictators, Hugo Chávez is in the welterweight class. President of Venezuela these past 14 years, he is supposed to be holding a ceremony of inauguration for yet another term of one-man rule and demagoguery. In anticipation, his supporters, the Chávistas in their uniform of red shirts, are singing and dancing in the streets of Caracas. But rumour has it that Chávez is on the point of death after surgery for cancer in a hospital in Cuba. Caution! The apparent popularity, the sympathy, the tenterhooks, the pseudo-Mandela image of the man, is largely the work of those strange modern-age political publicists known as fellow travellers.

A fellow traveller is one who commits to a cause, preferably foreign and necessarily hostile to the interests of his own country. He, or as often she, believes that the selected cause is promoting the virtues of Peace, Love and Brotherhood, ... Read More

Got sugar? Venezuela faces shortages of staple foods

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Article originally appeared in The Christian Science Monitor



While President Hugo Chávez convalesces in Cuba following his fourth cancer operation, Venezuelans face a struggle of a different kind in the midst of shortages of basic food products.

Consumers are having to scour markets for staples such as sugar, milk, chicken, and harina pan, a corn flour used to make arepas – corncakes that predominate the Venezuelan diet.

“We’re replacing one product with another,” says Rosa Garcia, a real estate agent who was on a three-day hunt for meat across various Caracas neighborhoods. “First there was no beef, now no chicken. Last night I made eggs for my family’s dinner.”

Grocery shopping in Venezuela is rarely an easy task, with consumers often forced to deal with long lines and sporadic shortages at their local markets. But the increased difficulty in finding basic consumer goods in recent weeks is raising concerns about the viability of Mr. Chávez’s socialist economic policies at ... Read More

Nationalising utilities in Bolivia: From tap to socket

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The Economist

SINCE becoming Bolivia’s president in 2006, Evo Morales has brought ever more of the country’s economy into the hands of the state. In his first year in office he renationalised the oil industry. Telecoms, much of electricity generation and then zinc and tin mining all followed. On December 29th Mr Morales announced the expropriation of two electricity-distribution companies owned by Iberdrola, a Spanish company.

Mr Morales said that the nationalisation was necessary to maintain “equitable” service. Bolivia’s electricity business is the second-fastest in South America to connect new customers, at 42 days. But that comes at a price: when measured as a proportion of income per head—just $2,040 in Bolivia—connection fees are the continent’s most expensive, according to the World Bank. Perhaps partly for that reason, only 78% of Bolivian homes were hooked up in 2009, versus 86% in Peru and over 90% in most of the region.

Proponents of nationalisation point ... Read More

U.N. ruling heartens Bolivian coca growers

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From the Washington Post


BOGOTA, Colombia — Ever since the Spanish conquest, the Aymara and Quechua Indians of modern Bolivia have been a shadow majority. Banished to the margins of society, they have found relief from toiling in fields for a pittance by chewing an oval-shaped green leaf: coca, cocaine’s raw material, which is a mild stimulant in its unprocessed form.

“Coca is our culture, our food, our medicine. Coca is our life,” said Honorata Diaz, a farmer from El Chapare, one of two Bolivian regions where monitored coca leaf cultivation is legal, albeit under restricted conditions.

For years, producers of the ancient crop, such as Diaz, had fought stubbornly against forcible eradication in endless confrontations with army troops and U.S.-trained anti-drug officials. Now, finally, they have a reason to celebrate. Last week, Bolivia was readmitted to the U.N. anti-narcotics convention with a special dispensation that local coca use is legal.

“This is a historic triumph for ... Read More

Government food price claims baffle Argentines

| January 17th, 2013 | No Comments »
The Miami Herald


BUENOS AIRES, Argentina – Six pesos a day. That’s all it takes to eat in Argentina, at least according to the government.

But on the streets of the capital, 6 pesos doesn’t stretch beyond a pack of chewing gum, or a cup of yoghurt, or a single “alfajor” – the country’s traditional caramel-and-chocolate cookies. They’re tasty, but hardly provide what the government calls the “minimum calories and proteins needed to sustain a moderately active adult.”

As the International Monetary Fund moved closer Thursday to sanctioning Argentina for inaccurate inflation data, The Associated Press checked prices in Buenos Aires, and couldn’t find a can of soda for less than 8 pesos. Even a ham and cheese sandwich cost 13 pesos at a downtown kiosk. That’s without lettuce or tomato. Food purchased at supermarkets is more economical of course, but even there, 6 pesos bought just one can of green peas, or a ... Read More

Energy in Argentina: Sparks in the dark

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The Economist

A COUPLE of months ago a sudden heatwave triggered a fault in the electricity grid in Buenos Aires, leaving the presidential palace, Congress and millions of residents in Argentina’s capital without power for hours. Car horns blared incessantly as hundreds of thousands of commuters tried to make it home at rush hour without traffic lights, the subway or trains.

Blackouts, albeit normally less serious ones, are frequent in Argentina. They are a result of an energy policy that boosts consumption and hinders investment. Tariffs for electricity as well as natural gas have been all-but-frozen since 2002. The initial aim—to help the economy recover from collapse—was long ago achieved. Economic growth averaging 7% a year over the past decade and persistent inflation have unbalanced the energy market. Argentines pay four times less for electricity than their neighbours in Brazil, while the government subsidised the costs of energy firms by more than $10 ... Read More

EU identifica a un nuevo cártel en México, rival del ‘Chapo’ Guzmán

| January 17th, 2013 | No Comments »

CIUDAD DE MÉXICO, 17 de enero.- El gobierno estadunidense dio, de manera oficial, la categoría de cártel a una organización delictiva a la que identifica como rival del cártel de Sinaloa encabezado por Joaquín El Chapo Guzmán.

Este jueves, el Departamento del Tesoro hizo públicas sanciones contra la organización narcotraficante de los Meza Flores.

Identifica como líder de ese cártel a Fausto Isidro Meza Flores, Chapito Isidro, e incluye a siete miembros de su familia y tres empresas dentro de ese grupo delictivo.

“Esta designación prohíbe a cualquier estadunidense hacer negocios con esas ocho personas, las tres empresas y toda la organización, y bloquea todos los bienes que estén bajo jurisdicción estadunidense”, advierte en un comunicado.

El grupo de los Meza Flores surgió en Guasave, Sinaloa, y desde la década de 2000 a 2010 es responsable de ingresar a Estados Unidos grandes cantidades de metanfetamina, heroína, mariguana y cocaína, de acuerdo con el despacho informativo.

Desde ... Read More

Venezuelan army backs Chavez amid uncertainty

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From CNN


Venezuela’s armed forces will back ailing President Hugo Chavez’s new term amid uncertainty of what a possible power transition might look like, the country’s defense minister said.

Chavez was unable to be sworn in last week for a new term because he is in Cuba recovering from a fourth cancer surgery. His absence at the inauguration raised constitutional questions about who is in charge of the country, opposition politicians said.

The Supreme Court clarified the issue last week, ruling that Chavez remains president and can be sworn in at a later date.

The army will defend that decision, Defense Minister Diego Molero Bellavia said Wednesday.

“Soldiers will abide by and enforce the Supreme Court decision to allow the head of state to return home when his health improves,” he said.

Molero added that the armed forces have “unconditional loyalty, now more than ever, to commander Hugo Chavez.”

On Sunday, officials said Chavez’s health was ... Read More

Student protester in Venezuela vows to continue anti-government rallies

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The Miami Herald


Days after having been brutally beaten up by the Chávez regime agents, student leader Lorent Saleh explained why Venezuelan youths have no other option but to take to the streets to demand the restoration of the Constitution, even when they are knowingly risking their lives.

“We’ve had 14 years of the same and every time our future gets more blurry. We cannot allow them to continue to make fun of us,” said Saleh in an interview via Skype, during which he showed great difficulty speaking.

His face looked deformed, his lips swollen. The blows to his face had weakened his upper gum so much that he felt pain with every word.

Even so, Saleh said that he and his comrades are ready to continue to protest the installation of an “illegitimate” regime in Venezuela.

“We’re getting ready to strengthen the protests even more. We’re getting ready to go national. The government ... Read More

Lawmakers: Ambassador Signals New Era for Mexico, U.S.

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The Texas Tribune


Texas lawmakers and the United States’ former top diplomat in Mexico are praising the recent appointment of Eduardo Medina Mora as Mexico’s new ambassador to the U.S.

Despite Medina Mora’s being the former director of agencies mired in controversy, Republicans and Democrats say his appointment affords them an opportunity to forge a new relationship with Mexico as it continues to grapple with drug cartel violence following the inauguration last month of president Enrique Peña Nieto.

An attorney and adviser to the Mexican government during its negotiations on the North American Free Trade Agreement, Medina Mora also served as the director of Mexico’s national security agency, the Secretaria de Seguridad Publica (SSP), under former President Vicente Fox and served as attorney general from 2006 to 2009 under President Felipe Calderón. Both Fox and Calderón were members of the conservative National Action Party, or PAN, which lost power when the Institutional Revolutionary Party, or ... Read More

Carstens: la reforma “buena” es la energética

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Milenio Diario

Puebla • El gobernador del Banco de México, Agustín Carstens, dijo a senadores que aplicar IVA en alimentos y medicinas es una “área de oportunidad”, pero ese tema lo lleva la Secretaría de Hacienda, y planteó que más que la reforma hacendaria, la que va a dotar de recursos frescos al país es la energética, según detallaron los senadores Ernesto Cordero, José Rosas Aispuro y Héctor Larios.

En ese sentido, Cordero, ex secretario de Hacienda, reafirmó que la reforma que generará crecimiento es la energética, porque la hacendaria “la verdad no creo que genere tanto crecimiento económico. Es la de energía y yo creo que es importante hacer un planteamiento serio, que vaya a fondo y nos ayude a generar condiciones de crecimiento”.

En el contexto de la reunión plenaria de la bancada de Acción Nacional, Carstens expuso su visión de la situación económica nacional e internacional.

Reiteró que el desempeño positivo de la ... Read More

Argentina: black market dollar hits new high

| January 17th, 2013 | No Comments »
Beyond Brics


Here’s a timely reminder that Argentina’s problems go far beyond its legal wrangling with its “holdout” creditors.

Wednesday saw another day of intense trading in the unofficial dollar market as Argentines fled from the peso to the US dollar. The black market, or “blue” rate, hit a record high of 7.52 pesos per dollar. That is 52 per cent more than the government’s official rate of around 4.96 pesos per dollar.

As the graph below from La Nacion, the Argentine daily, shows, things weren’t always this way.

Demand for black market dollar really began to surge last year after President Cristina Fernández de Kirchner tightened a rash of currency restrictions that made it almost impossible for ordinary Argentines to obtain dollars through the official channels.

Intended to stem the outflows of dollars from the Argentine economy, the measures – ranging from requiring permission from the tax agency to buy dollars, to controls ... Read More

Venezuela: minting new (Chinese) billionaires

| January 17th, 2013 | No Comments »
Beyond Brics


Venezuelan state oil company PDVSA’s ubiquitous propaganda constantly trumpets the fact that it now belongs to “everyone”, since control of the oil giant was wrested from opponents of Hugo Chávez ten years ago.

But to paraphrase George Orwell, one could say that its wealth belongs to some people more than others – take the example of Sun Weijie, the Chinese businessman who has just become a billionaire on the back of a juicy supply contract with PDVSA.

According to Bloomberg, there has been an 18 per cent surge in shares in Weijie’s company – he is chairman of Yantai Jereh Oilfield Services Group, an oil equipment and service provider – since the contract it announced last week with PDVSA to supply equipment and tubes valued at $178m.

As the company’s largest shareholder, with his holdings now worth $1.14bn, the deal has catapulted Weijie into billionaire territory.

Some Venezuelan businessmen will surely be ... Read More

Talk to us, Venezuela’s Capriles urges Chavez

| January 17th, 2013 | No Comments »
Article originally appeared in Reuters


CARACAS - Venezuela’s opposition leader, Henrique Capriles, called on Wednesday for a proof of life from ailing President Hugo Chavez, who has not been seen publicly since cancer surgery in Cuba five weeks ago.

Chavez’s signature appeared in the government’s official gazette on Wednesday in a decree naming his new foreign minister – though the document wrongly placed him in Caracas.

“If the president of the republic can sign decrees, I call on him to show himself, to talk to Venezuela,” Capriles said at his inauguration for a new term as Miranda state governor.

“He should tell us everything that’s happening in government because what we have in Venezuela is misgovernment.”

Officials say Chavez, 58, is improving despite his grave situation after a fourth operation on December 11 for a cancer first detected in the pelvic area in mid-2011.

Many Venezuelans suspect, however, that he could be dying or unable to return to active rule after ... Read More

In the Intensive Care Ward: Hugo Chavez, Venezuela’s Economy

| January 17th, 2013 | No Comments »
Heritage Foundation


The failure of Venezuela’s Hugo Chavez to appear for what was to be his swearing-in for a fourth presidential term in Caracas on January 10 triggered greater doubts about his ability to ever assume his presidential duties.

The true prognosis for Chavez is a secret known only to the doctors treating him in Havana, Cuba; to his inner circle of senior officials; and, certainly to Cuba’s dictator Raul Castro. The entire treatment of Chavez’s illness, noted by The Economist, resembles those associated with an “absolute monarch” rather than an elected and accountable chief executive.

While attention focuses on Chavez’s battle for survival and politics, Venezuela’s economy likewise appears to be on life support.

Predicted Moisés Naím of the Carnegie Endowment for International Peace, “President Chávez has bequeathed the nation an economic crisis of historic proportions.”

Argued Alvaro Vargas Llosa of the Independent Institute, “The economy is dismal: Inflation is running at 25 per cent and an imminent devaluation will fuel ... Read More

Mexico’s Drug War: Persisting Violence and a New President

| January 17th, 2013 | No Comments »

Editor’s Note: This week’s Security Weekly summarizes our annual Mexico drug cartel report, in which we assess the most significant developments of 2012 and provide updated profiles of the country’s powerful criminal cartels as well as a forecast for 2013. The report is a product of the coverage we maintain through our Mexico Security Memo, quarterly updates and other analyses that we produce throughout the year as part of the Mexico Security Monitor service.

In 2013, violence in Mexico likely will remain a significant threat nationwide to bystanders, law enforcement, military and local businesses. Overall levels of violence decreased during 2011, but cartel operations and competition continued to afflict several regions of Mexico throughout 2012. These dangers combined with continued fracturing among cartels, such as Los Zetas, could cause overall violence to increase this year.

A New President

2013 will be the first full year in office for Mexican President Enrique Pena Nieto, who ... Read More