Archive for the ‘China’ Category

Ecuador: How China took control of Ecuador’s oil

Tuesday, November 26th, 2013

Remember how Correa made the country default on its debt “because he could”? Well, here’s the price:
How China took control of Ecuador’s oil

Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61 percent of the government’s $6.2 billion in financing needs this year. In return, China can claim as much as 90 percent of Ecuador’s oil shipments in coming years, a rare feat in today’s diversified oil market.

After 2009, terms changed in new Chinese loans, documents show. A 2010 deal for another $1 billion credit line from China Development Bank cut the premium that PetroChina would pay for Ecuador’s oil, and granted PetroChina approval to resell the crude in any market.

In early 2011, Ecuador got another $1 billion loan, and authorized PetroChina to collect money from any other companies that owed PetroEcuador if Ecuador failed to meet repayment terms.

This is close to 11 percent of Ecuador’s gross domestic product.

There’s also the decades-long Chevron lawsuit, which has turned many private companies away from dealing with Ecuador. Last September, Chevron won a major arbitration victory when the Permanent Court of Arbitration in the Hague unanimously ruled that

all such “collective” or “diffuse” forms of environmental relief had been settled and extinguished by the 1995 settlement agreement between Ecuador and Texaco. Accordingly, they reasoned, even if individual third parties were later given standing to seek such relief, they had, by that time, no rights left to assert. The only party that possessed such rights in 1995 — the government — had settled all those claims.

Today is the last day of the Chevron racketeering suit against Steven Donziger.

But back to the report on China,

Chinese firms serve as middleman in most of the Ecuadorean oil sales, while keeping a strategic option to divert barrels to China if needed. As China’s trade grows in the region, U.S. relations have soured with Venezuela and Ecuador, whose leaders are outspoken U.S. critics.

The US needs to become totally independent of foreign oil, right now. Until it does, all foreign policy is at someone else’s mercy.

Venezuela: Did anyone miss Maduro at the UN?

Saturday, September 28th, 2013

Maybe a birdie told him to stay away.

As you may have noticed, all the talk at last week’s UN meeting was focused on Obama and Iran, and not on NicoláMaduro, who may enviously look back at the days when Hugo Chávez could make the headlines around the world just by doing stand-up.

Instead, Maduro had to skip the UN altogether and rush back to Venezuela – after signing off oil exploration and gold mining rights to the Chinese (and still coming short on cash) – because

  • while refueling in Vancouver, Canada, he became aware that the DEA could arrest three members of his entourage on charges of drug trafficking, based on information provided by former Aragua state Chavista governor Rafael Isea, now a protected witness for the DEA
  • Cuban spies traveling with Maduro, and identified by Spanish newspaper ABC, would not have been allowed to land in the USA
  • and the fear that, if he prolonged his absence from the country, he may have a coup from the military and/or members of his own party.

Instead Maduro flew back to Caracas and claimed he had to because of not one but two plots against his life, which President Obama’s weakness could not prevent.

Carlos Eire translated the ABC article, which you must read.

Maduro goes to China

Tuesday, September 24th, 2013

Venezuelan dictator Nicolás Maduro went to China, signing over oil exploration and gold mining rights in exchange for foreign currency,

President Maduro told his Chinese counterpart, Xi Jinping, that the main goal of his trip was to further consolidate and expand the strategic partnership between the two countries that late President Hugo Chávez began with Chinese leaders. Chávez died in March after 14 years in power.

The two leaders signed 12 agreements on Sunday, including ones related to a finance fund deal, education, and a joint development between Chinese state-owned oil producer Sinopec and Venezuela’s national oil company. They also signed a cooperation and exchange agreement between China’s space flight administration and Venezuela’s science and innovation ministry relating to remote satellites. No details were given on any of the agreements.

Venezuela President Nicolas Maduro met with China’s President Xi Jinping over the weekend in Beijing and said that China had granted Venezuela another $5 billion credit line

The $5 billion will be invested in the country, through a credit from the China Development Bank (BDC) for the financing of strategic projects in the field of health, science road, transport, technology, industry, electricity and mining, which will improve the quality of life of the Venezuelans.

“With this Bank funding we will develop also the Las Cristinas mine. All for the benefit of our beloved people,” wrote Maduro about the long delayed gold mining project.

Maduro tweeted his trip. He also retweeted this, fromForeign Minister Elías Jaua,

Translation: “The Integrated Citizen Protection System (video surveillance) signed with China will have its first installation in the municipality of Sucre in the state of Miranda!”

It so happens that the governor of Miranda is Henrique Capriles, opposition leader.

Here’s looking at you, kid!

More on Maduro’s Chinese deal at Caracas Chronicles.

Central America: Everybody wants a canal

Monday, July 29th, 2013

and I have a bridge to sell you,

Two, Three, Many Canals in Central America (emphasis added):

Besides, the Panama Canal is already undergoing an expansion of its capacity to accommodate the latest class of super tankers through the isthmus. But everywhere you go in Central America today there is talk of new canals and of China’s willingness to pay for them.

Nicaragua, Guatemala, Costa Rica, Mexico, and Honduras, too. And there’s even a dry canal, “high-speed rail system powered by a hydro-generated plant in the Gulf of Fonseca.”

The whole thing sounds very pie-in-the-sky to me. As I mentioned last month, the Nicaragua Canal is not underwritten by the Chinese government, but instead by some guy with experience only in the telecommunications industry who’s not even started the feasibility studies – but has a track record of floating stocks, and who was awarded a $300 million telecommunications contract in Nicaragua by Daniel Ortega.

The Chinese government apparently has nothing to do with it. More to the point, why would the Chinese government involve itself with such high-cost, high-risk projects when the Panama Canal expansion is going well?

Could it be that the next Chinese stock market bubble will feature Central American canal stocks?

Somewhere in a jail cell, Bernie Madoff is asking himself, “why didn’t I think of that?”

Latin America and the China bubble

Saturday, July 27th, 2013

Andres Oppenheimer: China-Latin America fiesta is over

Oppenheimer points out that Paul Krugman, George Friedman (founder of the geo-political newsletter Stratfor), and

even the usually upbeat United Nations Economic Commission for Latin America and the Caribbean (ECLAC) downgraded its growth projections for Latin America in 2013 from 3.5 percent to 3 percent, to a large extend because of China’s decreasing raw material purchases from the region.

Latin American exports to China — mainly commodities — had soared from nearly $4 billion in 2000 to $71 billion in 2012. Some economists had predicted that China would surpass the United States as Latin America’s top trading partner by 2015. But that seems increasingly unlikely.

The Chile-based ECLAC warned this week that we are witnessing “the likely end of the boom in commodity export prices brought about by China’s growth.”

Among the Latin American countries that will be most affected are metal exporters such as Peru, Chile and Suriname, oil exporters such as Venezuela, Bolivia, Ecuador and Colombia, and food exporters such as Argentina, the U.N. agency said.

Mexico and Brazil will be less affected by China’s slowdown because they have more diversified economies and are less China-dependent, it said.

Oppenheimer is hopeful that

China’s economic slowdown may mark the end of the commodity-based populist cycle in Latin America, in which Venezuela, Bolivia, Ecuador, Argentina and other countries squandered their raw material export booms in feel-good subsidies, instead of investing in infrastructure and education.

Let’s hope he’s right. As far as Venezuela, Bolivia, Ecuador and Argentina go, I’m nowhere near as optimistic.

Is Edward Snowden about to become the world’s most famous illegal alien?

Wednesday, June 26th, 2013

Rick Moran mentioned in last night’s podcast that Jaime Darenblum had a great article on Ecuador coming up at Pajama’s Media today. Indeed he does:

Why Snowden Picked Ecuador
The NSA leaker knows that President Rafael Correa wants to be the next Hugo Chávez.

Why did Snowden pick Ecuador? Like Assange, he recognizes that President Rafael Correa is an anti-American leftist who has repeatedly clashed with Washington and has eagerly embraced U.S. adversaries. Indeed, Correa is a Hugo Chávez acolyte who reportedly receivedmoney from Colombian FARC terrorists during his 2006 presidential campaign; who in 2009 expelled a U.S. embassy official named Armando Astorga and forced the U.S. military to leave Manta air base (which had been used for anti-drug operations); who in 2011expelled U.S. ambassador Heather Hodges; who in 2012 withdrewEcuadorean troops from the U.S.-based Western Hemisphere Institute for Security Cooperation and also threatened to expel USAID from Ecuador; and who boycotted the 2012 Summit of the Americas to protest the exclusion of Cuba. His government has also strengthened ties with Iran, and there is compelling evidence that the Iranians have used their close relationship with Ecuador to evade international sanctions and access the global financial system. Ecuadorean foreign minister Ricardo Patiño has called Iran a “strategic partner,” and Correa has defended the Iranian nuclear program.

Related: Re Edward #Snowden: read the info about Ecuador Assange’s Wikileaks will not publish regarding the purchase of surveillance equipment the government will be using against the Ecuadorian people. Darenblum continues,

As Ramiro Crespo of Quito-based Analytica Investments tells the Washington Post, “Ecuador is looking to be an antagonist of the United States and looking for causes that will permit it to do that.” That’s why it granted asylum to Julian Assange, and that’s why it may soon grant asylum to Edward Snowden. Earlier this week, Foreign Minister Patiño condemned U.S. officials for their efforts to apprehend the NSA leaker. “The one who is denounced pursues the denouncer,” he said,according to the New York Times. “The man who tries to provide light and transparency to issues that affect everyone is pursued by those who should be giving explanations about the denunciations that have been presented.” For his part, President Correa tweeted that “we will analyze the Snowden case very responsibly and we will make with absolute sovereignty the decision that we believe is most appropriate.”

Given his anti-U.S. record and his desire to succeed the late Hugo Chávez as the leader of Latin America’s populist-left coalition, there is good reason to expect that Correa will approve Snowden’s request.

And, by the way, sheltering Julian Assange, a Swedish and Australian citizen, at the London embassy is nowhere near the same as granting asylum to an American, since,

while Correa is known for his “anti-imperialist” rants and frequent denunciations of U.S. foreign policy, Ecuador still has a dollarized economy, and it still sends 45 percent of its exports to the United States (mostly oil, food products, and flowers), making America its largest trade partner. Since the early 1990s, Ecuador has benefited from U.S. trade preferences that are scheduled to expire on July 31. Thanks to these preferences, 23 percent of Ecuador’s U.S.-bound exports are exempt from tariffs. If Correa shelters Snowden, he will obviously jeopardize his country’s trade status.

Venezuelan President Nicolas Maduro has hailed NSA leaker Edward Snowden’s “courage” and offered to consider an asylum application. Venezuela, on the other hand, may not want to rush to a decision, considering that the USA is its #1 oil customer and refiner.

Snowden sent encrypted copies of his NSA files to people in case anything happens to him, which means he would have us believe he’s willing to head over to China and Russia in the belief that they can’t break/wouldn’t already have his encryption, but will have released all sorts of information damaging to the US if anyone knocks him off? And, another question,

How would you arrange to send a password to unlock encrypted files if you’re working alone?

For now, it looks like Edward Snowden may be stuck in Russia; the US revoked his passport, and, unless he has made other arrangements, his Russian transit visa (if he has one), may be about to expire, currently making him the world’s most famous illegal alien.

Video below the fold since it starts right away,

Where is Snowden?

Monday, June 24th, 2013

John Le Carre meets Waldo in the latest caper involving the young high school dropout whipper-snapper who left a $120,000/yr gig and a stripper girlfriend and headed to China and Russia with four, count ‘em, four computers full of high-level classified information.

You can’t make up this stuff; there’s even an empty chair (in the form of a vacant airplane seat):

[image]Olga Razumovskaya/The Wall Street Journal

No Sign of Snowden on Cuba Flight

Flight attendants on a flight from Moscow to Havana said Edward Snowden, the former security contractor wanted by U.S. authorities, wasn’t on board the flight.

Ecuador’s foreign minister said Mr. Snowden had arrived in Russia and the Ecuadorian government has been in touch with officials about Mr. Snowden’s request for asylum in Ecuador. Diplomatic cars from Ecuador’s embassy in Russia showed up at Moscow’s Sheremetyevo airport, and a spokeswoman for the airport confirmed that Mr. Snowden was in the transit zone.

But Mr. Snowden wasn’t spotted in the airport, and no images or footage of him leaving the flight from Hong Kong surfaced. Passengers on the flight said some cars had met the airplane on the tarmac, leading to speculation that Mr. Snowden had been escorted off the flight privately.

Ecuador is cementing its reputation as a safe-haven for whistleblowers on the run, since Assange has roosted in their London embassy for a year.

Snowden is jumping from the pan into the fire, if he’s actually heading to Ecuador, a small country with such lighweight international “pull” that it hasn’t been able to get the UK to grant Assange safe passage to the airport, and more importantly, a country whose latest law,

The Communications Law that the Ecuadorian National Assembly approved on June 14, 2013, seriously undermines free speech. The law includes overly broad language that will limit the free expression of journalists and media outlets.

A country that, in effect, is turning against the culture of whistle-blowing.

The Wall Street Journal reported that “Mr. Snowden wasn’t spotted in the airport, and no images or footage of him leaving the flight from Hong Kong surfaced“. With four computers’ worth of secrets, you can bet Smiley’s people are after him.

For now, journalists from AP, AFP, BBC and NBC News, among others, are trapped on a 12-hour flight from Moscow to Cuba.

Talked about Snowden in Silvio Canto’s podcast.

Snowden: “Put him on a plane to Venezuela”? UPDATED

Sunday, June 23rd, 2013

!:30PM THIS JUST IN: Looks like they’re putting him on a plane to Quito.

Earlier today,
Life imitates the Cohen brothers (video NSFW), and Putin may have channeled J. K. Simmons:


Reuters says

Itar-Tass cited its source as saying Snowden would fly from Havana to the Venezuelan capital, Caracas.

Other reports name Ecuador and Iceland,

Separately, the South China Morning Post, the city’s leading English-language newspaper, said that Mr. Snowden had boarded a 10:55 a.m. flight on Sunday headed to Moscow’s Sheremetyevo International Airport. The paper said that Moscow wasn’t his final destination, citing Ecuador and Iceland as possible destinations.

For now, it’s all a “where’s Waldo?” moment.


Rick Moran:

If Snowden is, in fact, on his way to Venezuela, Wikileaks has a very strange notion of a “democratic country.” Freedom House, in their 2013 report on “Freedom in the World,” lists Venezuela as “partly free,” which may be a generous designation given that the internal security apparatus is run by Cubans and that “Chavista” bully boys routinely show up at opposition rallies to threaten and intimidate opponents. Snowden, who claimed he wanted to end up in a country with democratic values, could have made a better choice.

The Nicaragua canal: Don’t be the next Lord Crawley

Friday, June 14th, 2013

Don’t be like him

For many years now we who watch Latin American news have been hearing about a Nicaraguan canal to rival the Panama canal.

Indeed, people who know Nicaraguan history have been hearing about it for centuries.

Back in 2010 the Iranians were in the picture,

Costa Rica says that last week Nicaraguan troops entered its territory along the San Juan River – the border between the two nations. Nicaragua had been conducting channel deepening work on the river when the incident occurred.

Sources in Latin America have told Haaretz that the border incident and the military pressure on Costa Rica, a country without an army, are the first step in a plan formulated by Venezuelan President Hugo Chavez and Nicaraguan President Daniel Ortega, with funding and assistance from Iran, to create a substitute for the strategically and economically important Panama Canal.

Well, Hugo died, his heir Nicolas Maduro’s still talking to the birds, the Panama Canal expansion is going on schedule, and the Iranian fervor has cooled off in the midst of its current current annual inflation rate of 105.8 percent.

Enter HK Nicaragua Canal Development Investment Co., known as HKND Group,

Nicaragua’s legislators gave their poverty-stricken country one more chance at a dream that has eluded it for nearly 200 years, granting a Hong Kong company the right to build a $40 billion interoceanic canal.

Supporters of the 50-year concession, approved Thursday, hope that it will propel Nicaragua out of its misery by boosting employment and economic growth. But there is also ample suspicion that the project will flounder, as so many others have done since the first government contract for a canal through Nicaragua was awarded in 1825.

The project envisions building a canal as long as 286 kilometers (178 miles), depending on which of four possible routes is used, as well as two deep-water ports, two free-trade zones, an oil pipeline, a railroad and an international airport.

The law granting the concession to HK Nicaragua Canal Development Investment Co., known as HKND Group, whose sole owner is Wang Jing, a 40-year-old Beijing-based entrepreneur, was introduced last week to Nicaragua’s congress, which is controlled by Mr. Ortega’s ruling Sandinista party.

Take a look at the map,

Look at the size of the existing Panama Canal, whose expansion is estimated to cost $5.25 billion dollars and take 8 years, and compare it to the projected Nicaraguan canal. Are we supposed to believe that a new canal, multiple times larger, when

work on some of the pre-feasibility studies has barely started and isn’t scheduled to be finished until next year

plus two deep-water ports, two free-trade zones, an oil pipeline, a railroad and an international airport, are supposed to cost only $40 billion?

If the Chinese government is not involved, who’s going to cough up that kind of money for that period of time?

Wang Jing’s experience appears to be only in the telecommunications industry. And he’s not even started the feasibility studies?

There’s Mr. Wang’s little deal with Daniel Ortega,

Mr. Wang registered his canal company in Hong Kong in August. A month later, on Sept. 5, he met President Ortega in Nicaragua. That day, Mr. Wang and the Nicaraguan government signed a memorandum of understanding—which wasn’t announced at the time—authorizing Mr. Wang to promote the financing and participate in the construction of a canal.

He and Mr. Ortega also discussed a telecommunications proposal, and Xinwei was awarded a $300 million telecommunications contract in Nicaragua, according to the company.

Nicaragua’s corruption frequently makes the news.

And then there’s the collapse of the Chinese stocks, which happens sporadically, since – guess what! – China doesn’t use GAAP (Generally Accepted Accounting Principles).

Bernie Madoff is probably regretting he didn’t think of this first, but Werner Herzog may be casting a lead for a movie now that Klaus Kinski is gone.

Those of us who watched Downton Abbey may recall that Robert Crawley, Earl of Grantham found that

the investment he made in the Canadian Railway has become worthless, he had lost his own and most of Cora’s money, enough to lose Downton.

Don’t be the next Lord Crawley.

The Carnival of Latin America and the Caribbean

Monday, April 1st, 2013

Argentina’s Cristina Kirchner rips British rule of the Falklands in Twitter tirade

A Bit of 1984: Biometriics Used in #Argentina Today (h/t McNorman).

China and Brazil sign $30bn currency swap agreement
China and Brazil have signed a currency swap deal, designed to safeguard against future global financial crises.

Deforestation in Brazil’s Amazon up 26 pct, via Gates of Vienna

Rio 2016 stadium escapes demolition
The Joao Havelange stadium, which was due to host the Rio 2016 Olympics, will not be demolished, despite structural problems that led to its closure.

Chile ex-president Bachelet to run for re-election

Students and police clash in Chile
Thousands of Chilean students clash with police on the streets of the capital, Santiago, during a protest calling for education reforms.

Colombia Kills Leader of ELN Guerrilla Group During Military Operation, Omar,

The deceased ELN leader was a member of the guerrilla group for 17 years and was purportedly heavily involved in the group’s extortion racket and cocaine production.

Cuban Bullies at the U.N.
By Mary Anastasia O’Grady
Cuba’s military dictatorship tries—and fails–to put the kibosh on dissident Yoani Sánchez’s press conference at the U.N.

Eating a cable: Internet access still elusive in the island – by Yoani Sánchez

Cuba Harbors and Supports Terrorists. It Will Remain on the U.S. State Sponsors of Terrorism List. End of Story.

The State of Cuba in 2013

Barack Obama called ‘a hypocrite and a coward’ over Falklands betrayal – BBC audience applauds

A Bleak Picture
Employment among U.S. Citizens in States Represented by Gang of Eight

Bill Whittle,

“Imagine a country where not only are the borders secured by armed guards, but once you entered the country, if you even spoke about politics — at all — if you even mentioned anything politically, you would be deported. Imagine a country where everyone is required to be tracked all the time. Where all of these immigrants are constantly monitored. Imagine where the idea of immigrants even having a word on the internal politics of a country would be enough to get them deported.”

“I can imagine a country like that. That country is Mexico.”

HACER’s News Highlights of the week

Latins Rally to Restore Human Rights Panel

Growing Population Of Muslims Calling Tijuana Home, via Gates of Vienna

Enrique Peña Nieto’s reforms
One hundred days of solidarity

Peru intensifies currency fight

Puerto Rico Creates Tax Shelters in Appeal to the Rich

Trinidad’s gov’t official subject of US criminal probe
National Security Minister Jack Warner is the subject of a U.S. criminal probe, a local newspaper in the twin-island nation reported.

Hugo Chavez’s Legacy of Conflict and Propaganda
What the death of Chavez means for Venezuela and the U.S.

Rest in Peace Hugo Chávez, Says a Mural in Paris Filled with Portraits of Venezuela’s Caudillo


Is SICAD A Radical Change In How The Economy Is Managed??

The week’s posts:
Peru’s definitely not Cyprus

BBC’s Book of the Week: Comandante

Obama heading to Mexico and Costa Rica

Meanwhile, over in the country with the strictest gun control laws in our hemisphere,

Venezuela: Maduro vs Lechuga

The fighting cholitas hit the mainstream

Hezbollah agent issued Venezuelan diplomatic passport

Argentina: Feed a regime, starve a media