Fausta's Blog

American and Latin American Politics, Society, and Culture

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Venezuela: Topic of discussion at the Palace

Pres. Trump talked about Venezuela during a dinner he hosted last night at the Palace Hotel,
Trump calls for democracy to be restored in Venezuela ‘very, very soon’ but avoids talk of a ‘military option’

– President Donald Trump met with a group of Latin American leaders Monday
– He said the Venezuelan government was ‘collapsing’ and the people were ‘starving’
– He said the U.S. was prepared to take ‘further action’ if the Maduro administration persisted in imposing ‘authoritarian rule’
– He called the situation ‘completely unacceptable’
– Trump said in August there was a ‘possible military option’ for Venezuela

Brazil’s President Michel Temer was among the guests, along with the presidents of Colombia (Juan Manuel Santos), Panama (Juan Carlos Varela) and Peru (Pedro Kuczynski), and Argentina’s vice president Michetti.

In case you wonder, the Palace Hotel is owned by the Sultan of Brunei.

Cross-posted at WoW! Magazine.

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Venezuela: The world’s worst oil company

Steve Hanke tweeted the graph on the world’s most miserable country,

To put PDVSA’s depletion rate into perspective, let’s compare it to Exxon’s. At the end of 2015, Exxon’s depletion rate was 8.15% — which is comparable to most of the world’s major oil companies. That rate implies Exxon’s median time to extraction (and sale) for a barrel of oil is 8.2 years. That’s 190 years earlier than PDVSA would realize revenue from selling a barrel of oil. Given the rate at which Exxon is depleting its reserves, they are worth something. Indeed, if we discount at 10%, Exxon’s reserves are worth 46% of the well-head value. Not zero, as is the case for PDVSA.

So, with the way PDVSA operates, it is exploiting reserves so slowly as to render them, on average, worthless. If that’s not bad enough, PDVSA is generating negative cash flows and piling up a mountain of debt (see the chart above). The arithmetic does not look good. PDVSA faces $10 bil. in interest and principal payments this year, but reports estimate that PDVSA only has $2 bil. in cash to service its debt obligations. In principle, the government could come to the rescue. But, its stated reserves have dwindled to below $10.5 bil.

Read the full article here.

Steel production is nil: Struggling to smelt, Venezuela state-run steelmaker grows sunflowers, crops

Workers at Venezuelan steelmaker Sidor are planting sunflowers and vegetables on company premises to ease a national food deficit as steel output has almost ground to a halt nine years after the company was taken over by the government.

In other headlines:
Congratulations Bolivarian Socialists, Venezuela Caught Up With North Korea

That’s according to the recent 2017 Index of Economic Freedom ranking, which places Venezuela in 179th position — next to North Korea, which occupies the 180th.

Published by the Heritage Foundation, the Economic Freedom report measures such things as trade freedom, business freedom, investment freedom, and the degree of property rights protection in 180 countries actually ranked.

Venezuela is also catching up with North Korea in corruption, while it is well ahead in inflation, which runs at 800%.

Lilian Tintori, Wife of Venezuelan jailed leader describes 3 years of torture

Peru’s president recalls envoy over attacks by Venezuela, after Nicolás Maduro referred to Peruvian president Pedro Pablo Kuczynski as a ‘coward’ and a ‘dog’ subservient to US, following PPK’s White House visit – the first by a Latin American president.

At the blogs:
How long is it going to take to crawl out of this hole?



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Peru: PPK visits Trump

Not much coverage on this, the “first sit-down meeting” with a Latin American president,
Peru’s President Talks Growth, Trade and ‘Bridges’ With TrumpU.S. President Donald Trump on Friday held his first sit-down meeting with a Latin American leader since taking office, and was told by visiting President Pedro Pablo Kuczynski of Peru that Peruvians “prefer bridges to walls.

Mr. Kuczynski, a former Wall Street banker and ex-World Bank economist, came to discuss economic growth in the region and problematic hot spots such as Venezuela.
. . .
Peru has a free-trade agreement with the U.S., China, Canada and European Union, among others. It was also a member of the Trans-Pacific Partnership, a trade pact from which Mr. Trump withdrew the U.S., and the Pacific Alliance, a four-member Latin American group that includes Mexico, Chile and Colombia.

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Peru: PPK on TPP

The WaPo’s Lally Weymouth interviews Peru’s president Pedro Pablo Kuczynski, a.k.a. PPK. They talked about Trump, but more importantly, about China and the Trans Pacific Partnership,

Q. Your first foreign trip as president was to China. Are you looking to Asia for growth because Trump is threatening trade barriers?

A. China is our biggest market. It is about 22 percent of Peruvian exports — mostly metals but also some sophisticated agricultural products. We have no issues with China the way others may have with [its claims in the South China Sea].

Q. You are trying to get the Chinese to invest here?

A. The Chinese have two huge copper mines here. They are looking at several other projects.

Q. If the U.S. opts out of the Trans-Pacific Partnership , will China move in and ask TPP countries to join its own Regional Comprehensive Economic Partnership?

A. Right. This is a group that will include India, which is important for us because India is the one country we don’t have a trade treaty with. The idea we floated during the recent meeting of the Asia-Pacific Economic Cooperation (APEC) is that the Pacific Alliance countries — that is Mexico, Colombia, Peru, Chile — join the Free Trade Agreement of Asia and the Pacific (FTAAP). Basically, the FTAAP is the APEC countries without the U.S.

TPP was more ambitious, but it also had its detractors. It didn’t include China, which is the bigger player in the Pacific. Also on pharmaceuticals, the period of tests would have gone from five to 10 years, which might have raised the cost of pharmaceuticals in countries like Peru. So there was some opposition to it. A lot of the business people here love TPP.

Q. How about yourself?

A. I don’t love TPP so much. China is our biggest customer. So how can we support something that excludes them?

Read the whole thing.

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The #Rio2016 Carnival of Latin America and the Caribbean, week 2

While the pools turn green, the athletes are breaking records and earning medals, even if some (like Ryan Lochte and four teammates) get mugged at gunpoint by men in police uniforms.

ARGENTINA
Theresa May reaches out to Argentina with ‘mutual respect’ as she works to ease restrictions on the Falkland Islanders exploiting their oil reserves

BOLIVIA
Evo Morales Confirms Bolivia’s Economic Downturn

BRAZIL
Brazil Mourns Olympics Guardsman Shot in Ambush.Out-of-town officer was part of large security contingent deployed to Rio for Games

Israeli Wrestler Takes Olympic Gold Without Winning Single Match After All Muslim Opponents Forfeit‘

NBC PANIC: RIO RATINGS HIT LOW…

From green pool to missing pontoon, problems won’t go away…

At The Economist, they’re not into records:

Why few records will be broken in Rio: The human body may have reached its limits
The factors fuelling America’s dominance of gymnastics
Why Pacific-island nations are so good at rugby
Olympians have discovered new fads and superstitions

CHILE
Chile’s privatized social security system, beloved by U.S. conservatives, is falling apart

COLOMBIA
Good luck with that: Colombia wants involvement of pope and UN in post-conflict courts.

CUBA
The fruits of “smart diplomacy”: Fidel Castro Lambasts US And Obama On 90th Birthday. The veteran Communist firebrand mocks attempts by America to kill him during Havana’s long Cold War stand-off with Washington.

Judicial Watch Investigates Starwood’s Hotel Deal With Cuban Military

MEXICO
Jorge Ramos Moves Towards Hitting Campaign Trail for Hillary. He will continue to call himself a “journalist,” which brings to mind this,

Mexico’s President Faces New Scrutiny. President Enrique Peña Nieto, whose past two years in office have been shadowed by a conflict-of-interest scandal linked to a Mexico City mansion, is facing new scrutiny linked to the first family’s use of a luxury apartment in Miami.

Ricardo Pierdant, a Miami-based businessman, in 2013 paid close to $30,000 in property taxes on behalf of first lady Angélica Rivera for an apartment she owns in Miami, according to tax records seen by The Wall Street Journal. Mr. Pierdant is a close friend of Mexico´s first family, according to Mr. Peña Nieto´s office.

The first lady purchased her apartment in the wealthy island enclave of Key Biscayne in 2005.

Mr. Pierdant subsequently purchased another apartment directly above Ms. Rivera’s, according to Miami property records.

Texas Family Among Those Kidnapped by Los Zetas Cartel in Mexico

NICARAGUA
Nicaragua’s president makes a farce of democracy

Nicaragua’s Daniel Ortega shows his true colors. Since taking office in 2007, the president has concentrated power in his family’s hands

PANAMA
IDEAS PANAMA PAPERS Joseph E. Stiglitz and Mark Pieth: Why We Left the Panama Commission

PARAGUAY
Murders Add to Fears of Narco War in Eastern Paraguay

Paraguay recalls ambassador in diplomatic dispute with Venezuela

Earlier this week, socialist Maduro accused Paraguay of being part of “an extreme right wing alliance” aimed at blocking Venezuela from assuming its role as head of Mercosur as scheduled during the second half of the year.

PERU
PPK works out: Peru’s 77-year-old new president isn’t acting his age. And Peruvians love it.

PUERTO RICO
1 in 4 Puerto Ricans will have Zika by end of year…

URUGUAY
Montevideo Is Considering Joining The Pacific Alliance Trade Bloc, since Peru and Colombia issued an invitation.

VENEZUELA
Again, Venezuelans cross into Colombia after border is reopened

Invictus, via Miguel Octavio,



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Peru: El Pais interviews PPK

Spain’s El País interviewed Peru’s new president, Pedro Pablo Kuczynski, who took office last week. The interview gives background information,

Educated at Oxford and Princeton, PPK, as he his known in the Andean nation, was educated at Oxford and Princeton, has been a World Bank economist, a former prime minister, twice exiled – once during the military dictatorship of the late 1960s, and again under Alberto Fujimori during the 1990s – Kuczynski beat his rival, Fujimori’s daughter Keiko by just 39,000 votes.

His father was a Jewish doctor who fled Nazi Germany, settling in Peru, where he became a specialist in tropical diseases and set up the San Pablo leprosy clinic, and where, in the 1950s, a young Che Guevara would work as a volunteer. Kuczynski’s mother, a Swiss-born music and literature teacher, was the aunt of filmmaker Jean Luc-Godard.

PPK faces tremendous challenges, starting with

Out of Congress’s 130 seats, your party, Peruvians for Change, only has 18 seats, compared to the left’s 21 and the 73 of Keiko Fujimori’s Popular Force.

The article’s headline refers to a social revolution,

Q. You have promised a social revolution. Where do you intend to start?

A. We want to start a social revolution: this country is very backward. Business leaders still talk about cholos [a disparaging term for the working class, mainly ethnically Andean]. They are living in the nineteenth century. Water and health are our priorities. The program to provide water to Peruvians should generate half a million jobs.

It’ll be interesting to see how PPK works out.

[To those of you who asked why don’t I use Spanish punctuation on post titles, it’s because a lot of times it gets mangled on Twitter, FB, etc., hence, El Pais in the title and El País in the text]

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Peru: Final results, PPK wins

Peruvians didn’t so much vote for Pedro Pablo Kuczynski, they voted against Fujimori:

The Economist:

IT COULD hardly have been closer. As the final votes were counted in the run-off ballot for Peru’s presidency, Pedro Pablo Kuczynski, a liberal economist, seemed to have defeated Keiko Fujimori by just 39,000 out of almost 18m votes, a margin of 0.2%. After months in which Ms Fujimori had led opinion polls, this was a surprising reversal. It shows how deeply divided Peru is about the legacy of Ms Fujimori’s father, Alberto, who ruled it as an autocrat from 1990 to 2000; he is serving long prison terms for corruption and complicity in human-rights abuses.

CNN

Kuczynski, a former World Bank executive and ex-prime minister of Peru who has also served as finance and energy ministers, ran for president the first time in 2011. He came in third in that race, behind Fujimori and current President Ollanta Humala. He had refused to renounce his American nationality, which had become a campaign issue.
Known as PPK, he has since renounced his American citizenship, although he is married to an American woman and his children live in the United States.
WSJ:

When confirmed by election officials, Mr. Kuczynski will take office for a five-year term on July 28, replacing President Ollanta Humala.

He has promised to boost economic growth by cutting taxes and increasing infrastructure spending. He has also said he would expand access to running water to some 10 million Peruvians without access to it in their homes, while curbing corruption and crime, a top concern.

John M. Carey and Steven Levitsky at the WaPo: Fujimori’s party already controls Peru’s congress. Here’s why observers are worried.

Whoever wins Sunday’s runoff, Peru’s executive and legislative branches will have a very different relationship. Kuczynski, a political liberal whose allies hold only 18 of 130 seats, would have to negotiate an arrangement with Popular Force – a situation that could make Peru very difficult to govern. Although Fujimorismo’s economic program differs little from Kuczynski’s, its cooperation may require concessions in other areas — such as the pardon (or move to house arrest) of the disgraced Alberto Fujimori. And if the 77-year-old Kuczynski were to lose public support, as has each of his three predecessors, the Fujimorista majority could be tempted to remove him early.

We’ll see how this turns out.

En español: Bayly habla del anunciador disléxico,

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Peru: Still no final count on the election

Latest tally gives Kuczynski slight lead in Peru presidential race, but the final results may not he known for days, after Sunday’s presidential runoff:

Absentee ballots are arriving from Chile, the U.S., Spain and elsewhere. Receiving votes from remote communities, particularly those deep in Peru’s Amazon rain forest, has also taken time. And the counting of votes in a rugged and isolated coca-growing region, a hotbed for leftist rebels, was delayed by bad weather and security challenges, the election agency said Tuesday

And so we wait.

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