Bolivia to buy Chinese jets to battle drugs reports Bloomberg

Coca Leaves Being Dryed

Bolivia plans to buy six Chinese light military aircraft worth nearly $58 million to fight drug traffickers in the world’s No. 3 cocaine producer, leftist President Evo Morales said on Saturday.

“Last week we issued a supreme decree to … acquire six K-8 aircraft from China,” said Morales in a speech in La Paz to mark the 52nd anniversary of the Bolivian air force.

Morales said his government decided to acquire the K-8, a jet trainer that can be used as a light attack aircraft, after the U.S. government blocked the country from buying similar planes from the Czech Republic.

Click here to read the complete article from Reuters

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October fire sale! Russian credit & Rubles accepted

Rigzone reported today that a Russian oil consortium would not have the pay the $1 billion usd Venezuela had previously requested as a down payment in order to partake in tapping Venezuela’s Orinoco oil fields.

Instead, the Russian consortium will only have to pay $600 million usd. Sounds like a nice 40% bargain to this blogger. It’s a nice deal if you ask me, which coincidentally comes on the heels of Venezuela’s securing a large credit line from Russia to buy military equipment.

Orinoco Belt Regions – [Rigzone, 10-6-09]

According to this Dow Jones Newswire published by Rigzone,

The Chavez-led government has talked about plans for nearly $70 billion in oil investments over the coming years as this oil-rich nation seeks to ramp up dwindling production numbers and boost its sagging economy.

But so far, nearly all those plans are based only on memorandums of understanding, with no solid investment commitments from foreign oil companies.

Sounds like Venezuela is becoming increasingly hungry not only for foreign investment, but also to cement its relations with a geopolitical power like the Russian Federation.

Click here to read the newswire article from Rigzone, which I must admit does a far better job at detailing the situation than the concise, and slightly cynical analysis published here at China South America (CSA).

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Ideology vs profit; Colombia and Venezuela’s trade dispute gets nasty

Economist Article —

Venezuela and Colombia — Politics versus trade

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

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Brazil, India, South Africa to Broaden “Voice of the South”

RIO DE JANEIRO, Sep 1 (IPS) – The sixth ministerial meeting of the India-Brazil-South Africa (IBSA) forum agreed Tuesday in Brasilia to strengthen the dialogue between the three emerging powers in order to establish common positions on regional and international matters and boost South-South cooperation.

The IBSA forum was created in 2003 as a mechanism for political consultation and coordination and to bolster economic relations between India, Brazil and South Africa.

IBSA provides a platform for the three large multicultural and multiracial democracies from three different continents to engage in discussions on cooperation in areas like agriculture, trade, defence and culture.

The three countries have a total combined population of nearly 1.4 million people and a combined GDP of more than 3.2 trillion dollars.

At their meeting in the Brazilian capital, foreign ministers Celso Amorin of Brazil, S.M. Krishna of India and Maite Nkoana-Mashabane of South Africa said they hoped trade among the three countries would climb from 10 billion dollars last year to 25 billion by 2015.

In a joint statement issued at the end of the meeting, the ministers said the channel of dialogue that has been established should serve to broaden the collective voice of the South. They also called for regional cooperation mechanisms based on common experiences and complementarities.

Click here to read the complete article by Fabiana Frayssinet

[Source] — Inter Press Service News Agency (IPS)

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China’s Policy Paper on Latin America and the Caribbean – MercoPress Analysis

[Source] — MercroPress

On November 5, 2008, the Chinese government released a policy paper on Latin America and the Caribbean, as it had previously done so for Europe in 2003 and for Africa in 2006.

Although it may not come as a huge surprise that Latin America is the most recent region for which China has formally spelled out its foreign policy position, the region has been historically perceived as being under the United States’ sphere of influence. Perhaps the importance of the Chinese policy paper lies in the timing of its release. The release of the paper deliberately coincided with the unfolding of the current financial crisis; this congruence of events has allowed China to expand its influence in this somewhat neglected region without attracting any lasting venom from the U.S. China’s policy paper formally evidences the importance of Latin America and the Caribbean as part of China’s growth plan for its long-term strategic interests. Most of all, this includes access to raw materials as well as a plethora of natural resources, the infiltration of new foreign markets, the reduction of diplomatic support for the Republic of Taiwan, and the strengthening of Beijing political standing on the global stage through strong alliances cemented with the developing world.
The policy paper’s general context

The policy paper explicitly states its main objective is to “clarify the goals of China’s policy in this region, outline the guiding principles for future cooperation […] and sustain the sound, steady and all-around growth of China’s relations with Latin America and the Caribbean.” In the economic realm, China expresses an interest in investing in energy, mineral resources, forestry, fishing and agriculture, areas important to expanding China’s productivity. Additionally, the Chinese government seems to show interest in infrastructure projects not directly related to its economy, albeit essential in the transportation of natural resources, and proposes to fund these projects in order to be perceived as a partner in development. Furthermore, China expresses its desire to increase military diplomacy and sale of equipment to the region. Although many of the report’s statements are merely rhetoric and general in scope, the paper helps formalize China’s economic, diplomatic and military ties with Latin America, which were first proposed by then President of China Jiang Zemin in 2001.

The policy paper was released against the backdrop of the current financial crisis and the corresponding economic hardships that have severely hit the U.S. and Europe. Its publication deliberately coincided with the emergency G-20 meeting to discuss the economic crisis that was about to take place in Washington. More importantly, it preceded Chinese President Hu Jintao’s visit to Peru for the November 2008 Asia-Pacific Economic Cooperation (APEC) summit, at which he presented China’s foreign policy towards Latin America. This timing of the paper’s release was especially important for the countries seeking to diversify their export markets and decrease their dependence on declining Foreign Direct Investment (FDI) from the US and Europe. With the vast foreign reserves accumulated by China –which totalled US $1.95 trillion in December 2008– the region had valid reasons to closely follow the summit’s developments.

To access this article in full you must register for MecroPress’s website.

Once you register, click here for a direct link to this article

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Newswire: South America

[Brazil] — Brazil strengthens state control over offshore oil reserves — Xinhua
Brazil announced on Monday new oil exploration rules to increase state control over its recently discovered offshore oil reserves.

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.

[Venezuela] — Chavez Says Venezuela Will Continue Oil Exports to U.S. — Latin America Herald Tribine
Venezuelan President Hugo Chavez said that his country will continue exporting oil to the United States because it is in the Andean nation’s interest.

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.

[Peru] — Two Wounded in Rebel Attack, Peruvian TV Reports — Latin American Herald Tribine
At least two soldiers were wounded in an attack apparently mounted by Shining Path guerrillas Monday against a counterinsurgency base in central Peru’s Junin province, Canal N television reported.

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.

[Bolivia] — Morales Named “World Hero of Mother Earth” by UN General Assembly— Latin America Herald Tribine
The president of the United Nations General Assembly, Rev. Miguel D’Escoto Brockmann, on Saturday declared Bolivian President Evo Morales as “World Hero of Mother Earth” in a ceremony at the presidential palace in this capital.

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.

Bolivia Cries Foul Over Peru Plans for Drilling in Titicaca — Latin America Herald Tribine
Bolivian President Evo Morales’ government will present a formal complaint to Peru over its plans to drill for oil in Lake Titicaca without consulting La Paz, state-run news agency ABI reported.

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.

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Argentina could potentially attract $10 billion to its stock market if restrictions are lifted, reports Bloomberg

Argentina’s stock exchange called on the government to lift capital controls that caused it to become the only major Latin America market classified as “frontier,” adding the move may help lure $10 billion in foreign investment.

A requirement for international investors to deposit 30 percent of what they put in Argentina with the central bank for a year “have stopped making sense,” Adelmo Gabbi, the Buenos Aires stock exchange’s chairman, said yesterday in a speech.

Capital controls prompted MSCI Inc. to remove Argentina from its benchmark emerging-market index in June, assigning it the so-called frontier status along with the world’s least developed markets. The controls have helped Argentina avoid volatility, said President Cristina Fernandez de Kirchner.

Argentina’s stock exchange, Buenos Aires
Image courtesy of Business Week

“We have to seek a rule so that the inflow of funds won’t be speculative,” she said, without elaborating.

…

“The deposit requirement was imposed in 2005 and was one of the forces that allowed us to confront the brutal volatility of the markets during the crisis,” Fernandez responded yesterday in a speech at the Buenos Aires stock exchange.

Fernandez’s husband and predecessor Nestor Kirchner imposed deposit requirement in order to discourage speculators from investing in local markets after the country restructured about $104 billion in bonds…

Click here to access the full article from Bloomberg

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Newswire: China and Commodities in focus

China stops expansion projects in steel industry for three years – Xinhua

China’s Ministry of Industry and Information Technology (MIIT) Thursday announced a three-year moratorium on approvals of new expansion-related proposals in the iron and steel industry, as the government pledges to eliminate outdated capacity.

CISA stance hurts small steel mills – China Daily

China’s top negotiators in the bitter and protracted row over the price of iron ore seem destined never to agree – risking a loss of face that will raise questions about whether they are up to the job and who it is they are actually representing.

Their apparent refusal to compromise is damaging the competitiveness of smaller domestic steel mills, forcing them to buy from their larger counterparts, say analysts. The bigger firms have been content to pay whatever the spot price is for ore and pass on the premiums.

CNPC to speed up oil assets buy plan – Xiao Wan of eChinaCities

China National Petroleum Corp (CNPC), the country’s largest oil and gas producer, will speed up overseas acquisitions in regions such as Africa and South America this year, in a bid to boost China’s quest for energy security.

Coal mines to merge in new plan – China Daily

A large-scale restructuring of the coal industry in China’s major coal-producing province of Shanxi, starting at the end of this month, will reduce accidents and improve efficiency by shutting down small coal mines, officials said.

“The restructuring this time is the largest after years of adjusting the coal industry’s structure,” Miao Huanli, planning section director of Shanxi provincial coal bureau, said yesterday.

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Newswire: South-South Cooperation

[Peru – Brazil] – Eletrobrás sets sights on Peruvian generator – BNAmericas

Brazilian federal power holding company Eletrobrás (NYSE: EBR) is planning to buy a Peruvian generator to participate in an upcoming hydro auction in Peru, company CEO José Antonio Muniz Lopes told journalists. The executive declined to say which generator Eletrobrás was looking to acquire but said the purchase was essential for the Brazilian holding group to operate in Peru.

[Peru – Brazil] – Brazil, Peru Work Out Details of Hydro Plants – Latin American Herald

Energy ministers from Brazil and Peru announced details of plans for several hydroelectric plants to be built in the Andean nation, saying after a meeting that 80 percent of the energy generated by the stations would go to Brazil and the rest to Peru.

Both partners will have the right to sell their respective energy quotas to other South American countries, Brazilian Mines and Energy Minister Edison Lobao said Friday after a meeting in Rio de Janeiro with his Peruvian counterpart, Pedro Sanchez.

The first five power stations – to be built in Peru’s eastern lowlands at a cost of between $12-15 billion – will generate a combined total of 6,000 megawatts annually once they come on stream in 2015.

[Peru – South Korea] – Peru, S Korea examine tomorrow progress of APEC bilateral agreements – Andina

Peru and South Korea examine on Wednesday the progress of the bilateral agreements achieved by Presidents Alan Garcia and Lee Myung-bak during the summit of leaders of the Asia Pacific Economic Cooperation (APEC) held in Lima in November 2008, the Korean Embassy reported. “The agreement achieved last year includes mutual cooperation in oil, mineral and natural gas sectors”, the Ambassy reported.

[Peru – Japan] – Peru, JICA to invest US$ 23.3 million in 6 new docks in Peru – Andina

Peru’s Government and the Japan International Cooperation Agency (JICA) will invest 70 million soles (around 23.7 million dollars) in the construction of 6 new docks located along the Peruvian coast, reported today Production Minister Mercedez Araoz.

[Venezuela – Russia] – Russia Promotes “Energy Alliance” with Venezuela – Latin American Herald

Prime Minister Vladimir Putin said Tuesday he was ready to promote an “energy alliance” of global oil giants Russia and Venezuela, and confirmed his willingness to study Caracas’ requests for additional arms purchases.

Putin told Venezuelan Energy Minister Rafael Ramirez that Russia will employ “the most modern equipment and technologies” to carry out plans for cooperation with Venezuela in the oil and gas sector.

[Venezuela – Brazil] – Brazil To Export Coffee Immediately to Venezuela – Latin American Herald

The accord was struck by representatives of the ministry and the state-run firm Cafe Venezuela last Friday and represents $4.1 million in revenue for small producers and family cooperatives in southeastern Brazil.

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Current Situation in Honduras

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/

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