Archive for February 8th, 2013

IMF & Argentina: Motion of censure

| February 8th, 2013 | No Comments »
The Economist

The IMF has taken years to pluck up the courage to censure Argentina’s blatantly inaccurate inflation statistics, but it did so at last on February 1st. The official reprimand gives the government of President Cristina Fernández until September 29th to take “remedial measures” to comply with the fund’s rules on the reporting of statistics. It it fails to do so, Argentina risks escalating punishments, from losing its ability to borrow from the IMF to—eventually—expulsion.

This is the first time the fund has reprimanded a country in this way since its rules on members’ statistics were tightened in 2004. It has only ever expelled one country—Czechoslovakia in 1954, ostensibly for failing to provide adequate statistics, though the cold war probably had more to do with it.

As so often, Argentina seems incapable of playing by the same rules as everyone else. Since the government seized control of the statistics institute in 2007 the ... Read More

The End of the Latin American Left

| February 8th, 2013 | 2 Comments »
Foreign Policy


The exact condition of Hugo Chávez continues to be a Churchillian riddle wrapped in a mystery inside an enigma. The Venezuelan president, who won his third reelection last October and has been hospitalized in Cuba for many weeks with cancer, missed his own inauguration in January. In his absence, Vice President Nicolás Maduro, Chávez’s hand-picked successor, has been left in charge of the government indefinitely. But Maduro is no Chávez, lacking both the charisma and the power base of Venezuela’s mercurial leader. And it’s not just a problem for the chattering classes in Caracas: The question haunting the Latin American hard left, which Chávez has dominated in the last decade, is who will take his place.

In explaining the rise of the political left in Latin America over the past decade, Chávez’s persona looms large. Politicians like Evo Morales, Rafael Correa, and Cristina Fernandez de Kirchner owe an ... Read More

Editorial:GHEI- Argentina’s wishful thinking

| February 8th, 2013 | No Comments »
Article Appeared in The Washington Times

Supermarkets in Argentina can’t raise prices over the next two months. This is the government’s latest idea for bringing rising inflation under control, but it’s based on tired, old notions that have always failed in the past.

The South American country’s dalliance with price controls follows hard on the heels of an International Monetary Fund (IMF) censure of the government’s dubious inflation statistics. The embarrassing incident underscores how Argentina has become a textbook example of a once-wealthy and prosperous nation with generous natural resources that has tumbled off the economic cliff.

A century ago, Argentina boasted one of the planet’s 10 strongest economies. Now the World Bank ranks Argentina at No. 62. The plunge began in earnest in the 1940s when Juan Peron nationalized a swath of the economy. The same impulse to limit economic freedom remains very much alive in President Cristina Fernandez’s decision to nationalize the country’s leading oil company, Yacimientos Petroliferos Fiscales (YPF) last April, a move that resulted in threats of retribution from Spain, the home ... Read More

The man with the mighty microphone

| February 8th, 2013 | No Comments »
The Economist

New highways and motorways snake across Ecuador, lined with billboards reminding drivers how bad the Andean country’s potholed road network was until Rafael Correa was first elected as president six years ago. The towns and villages boast new schools and health clinics. The minimum wage has risen well above inflation, and some 2m poorer people (in a population of 14.5m) get monthly cash transfers. Free school uniforms and subsidised mortgages all help to give ordinary Ecuadoreans the sense that “most things are being done right,” says Pili Troya, a civil servant, who plans to vote to give Mr Correa another four-year term in the country’s general election on February 17th.

In his campaign advertisements Mr Correa, a good-looking, smooth-tongued 49-year-old economist, presents himself as the man who turned his country round, after several years of political instability and economic humiliation, which included the collapse of the currency and its replacement by ... Read More

Venezuela’s Economy: Out of stock

| February 8th, 2013 | No Comments »
The Economist

It is now two months since Venezuelans last saw or heard from their president, Hugo Chávez, who remains in intensive care in a high-security Havana hospital, battling what seems to be terminal cancer. But it is an absence of a different kind that is uppermost in many people’s minds. Cooking oil, sugar, wheat flour, coffee and the all-important pre-cooked maize flour that goes into many Venezuelan dishes are among the staple items that have largely disappeared from the shelves. Both the Central Bank, which tracks the level of supply, and private economists reckon that shortages are at their greatest since 2008.

Temporary shortages often occur at the start of the year, thanks to higher demand, reduced output and distribution delays over the Christmas holidays. But this year they are a symptom of bigger distortions, which include a black-market dollar that trades at more than four times the official exchange rate, and ... Read More

Venezuela rivals trade blows on corruption

| February 8th, 2013 | No Comments »
Financial Times

By Benedict Mander in Caracas

The Venezuelan government has accelerated a mud-slinging campaign to discredit the opposition, accusing it of corruption, as doubts grow that the socialist revolution can survive without President Hugo Chávez to lead it.

Leaders of the ruling United Socialist Party of Venezuela (PSUV) have pledged to deepen their investigations in to alleged financial irregularities, which they say could include the opposition’s de facto leader Henrique Capriles. So far, its campaign has consisted of publicly displaying cheques it claims were paid to opposition politicians but not declared or taxed, as required by law.

The opposition says the cheques, which ranged in worth from the equivalent of $1,000 to $50,000, do not constitute proof of corruption. It alleges that the government is guilty of similar irregularities on a far grander scale. The allegations came after opposition leaders this week demanded an explanation of how a former Iranian official ended up with ... Read More

Chavismo Set to Outlive Chavez as Venezuela Braces for Elections

| February 8th, 2013 | No Comments »

By Charlie Devereux President Hugo Chavez’s absence from Venezuela in a Cuban hospital, now about to reach two months, is prompting his countrymen and investors to contemplate what a post-Chavez era would look like. It may not be much different.

Using the slogan “I am Chavez,” Vice President Nicolas Maduro has consolidated control of the government, giving the annual state of the union speech, announcing the appointment of a new foreign minister, calling on the military to remain loyal and filling in for the president with daily television appearances. At the same time, the opposition has seen its influence wane after losing both the presidential election and most of its governorships in regional voting in December.

For now, Maduro has the backing of the 58-year-old Chavez, who hasn’t been seen or heard from publicly since arriving in Havana Dec. 10 for cancer surgery. Over the coming year, pressure to devalue the currency, tackle ... Read More

Ecuador’s Correa has large lead in presidential race: polls

| February 8th, 2013 | No Comments »
Article originally appeared in Reuters

By Eduardo Garcia and Alexandra Valencia

Leftist Ecuadorean President Rafael Correa has maintained a huge lead over his nearest opposition rival in the run-up to the February 17 elections, recent polls show.

Correa’s popularity has remained above 50 percent throughout his six years in office, buoyed by his personal charisma as well as his government’s heavy spending on hospitals, roads and schools.

Leading opposition candidate, Guillermo Lasso, has tried to woo voters by promising lower taxes. Lasso, a former banker, has found support among middle-class voters but has failed to sway many others disenchanted with Correa’s policies.

A survey released on Thursday by respected pollster Perfiles de Opinion shows Correa winning almost 62 percent of the vote versus 9 percent for Lasso.

“The (opposition) candidates have struggled to put forward attractive campaign proposals to undermine a president that has high popularity rates,” said Paulina Recalde, head of Perfiles de Opinion.

Correa also appears to be benefiting ... Read More