Chávez’ innovative experiments in centrally-planned capito-socialist economy are looking pretty shaky these days. For one thing, the Venezuelan economy shrank 3.3% last year, which isn’t surprising except for the fact that the slump worsened in the 4th quarter – to 5.8% – justas the restof Latin America is beginning to recover. The oil sector alone contracted 10%.
(Also, it’s a neat trick to have your economy shrink even while inflation is at 26%.)
It may get worse. Economists say a drop in demand due to the currency devaluation at the beginning of the year will depress GDP growth again in 2010, possibly keeping the economy in recession. Constant power outages are sure to be a drag on production as well.
And to top it all off, the Venezuelan Chamber of Commerce says the government still owes US$12 billion for property it has expropriated (including private petroleum services contractors who were bought out last year) and US$7 billion in forex promised to exporters who need dollars to keep goods flowing to a country that no longer produces anything but oil domestically.
Which, speaking of, happens to be Chávez’ only way of financing his capito-socialist experiment. But because global crude consumption fell last year, there’s a glut on the market, meaning prices will have a hard time going up and might actually go down.
Did I mention Venezuela has legislative elections in September?
The Nation has a long, wonky, wonderful article on Mexican maize cultivation, the effects of NAFTA, and the dangers of genetically-modified seeds. Author Peter Canby backs up his excellent writing with piles and piles of meticulous research. Not to be missed. [link, via SM] (Image from Joel Penner.)
Cuban dissident Guillermo Farinas ended his hunger strike yesterday after 134 days. Farinas decided to end his strike after the Cuban government said it would release political prisoners rounded up in the "Black Spring" crackdown of 2003. Get well soon. [link]
The Uruguayan selection, which has made it to the quarter finals of the World Cup, just received a shipment of half a ton of fine cuts of beef for the mother of all asados in preparation for a contest against Ghana on Friday: "450 kilos of lomo, 200 of entrecot, 75 of vacío, 75 of colita de cuadril, 150 of ojo de bife and 50 kg of picaña." [link]
Hitmen have assassinated the PRI candidate for governor of Tamaulipas State, Rodolfo Torre Cantú. Torre was gunned down along with six others at about 10:30 this morning on a highway on the way to a campaign event. Drug mafias are assumed to be responsible. [link]
From the days when coups were something of a regional sport, new documents detail a famous British ballerina's role in a plot to topple the government of Panama. The plan was to use her yacht to gather men and arms, then "land somewhere and collect in the hills." It didn't work. [link]
Mexico's Attorney General's Office has posted on its web site irrefutable evidence that gold-plated AR-15s and diamond-studded pistol grips are not nearly as cool-looking as they sound. The deadly knick-knack collection is said to belong to Valencia Cartel leader El Lobo. [link]
Two Brazilian ranchers were sentenced to 30 years in prison apiece for ordering the killing of an environmentalist nun: "Prosecutors said the pair offered to pay a gunman $25,000 to kill the 73-year-old [Dorothy] Stang because she had prevented them from stealing a piece of land that the government had granted to a group of poor farmers." [link]
This video of a kidnapping and car chase in Mexico is notable mainly for the bad-assitude of the TV journalists who were on this like white on rice. Well done, gentlemen.
The Economist takes a peak at the Mockus phenomenon in Colombia: "His moustacheless beard gives him the air of a Baltic pastor... He is financing his campaign with a bank overdraft. His supporters rely on Facebook and make their own posters; street vendors sell unofficial campaign T-shirts." [link]
Some cruise lines will cease traveling to Antarctica after this cruise season, as a ban on the use and carriage of heavy fuel oil goes into effect next year. The ban came after a 2007 incident when a Gap Adventures ship got punctured by ice and sank, causing a mess. [link]
The Nation has a long, wonky, wonderful article on Mexican maize cultivation, the effects of NAFTA, and the dangers of genetically-modified seeds. Author Peter Canby backs up his excellent writing with piles and piles of meticulous research. Not to be missed. [link, via SM] (Image from Joel Penner.)
Cuban dissident Guillermo Farinas ended his hunger strike yesterday after 134 days. Farinas decided to end his strike after the Cuban government said it would release political prisoners rounded up in the "Black Spring" crackdown of 2003. Get well soon. [link]
The Uruguayan selection, which has made it to the quarter finals of the World Cup, just received a shipment of half a ton of fine cuts of beef for the mother of all asados in preparation for a contest against Ghana on Friday: "450 kilos of lomo, 200 of entrecot, 75 of vacío, 75 of colita de cuadril, 150 of ojo de bife and 50 kg of picaña." [link]
Hitmen have assassinated the PRI candidate for governor of Tamaulipas State, Rodolfo Torre Cantú. Torre was gunned down along with six others at about 10:30 this morning on a highway on the way to a campaign event. Drug mafias are assumed to be responsible. [link]
From the days when coups were something of a regional sport, new documents detail a famous British ballerina's role in a plot to topple the government of Panama. The plan was to use her yacht to gather men and arms, then "land somewhere and collect in the hills." It didn't work. [link]
Mexico's Attorney General's Office has posted on its web site irrefutable evidence that gold-plated AR-15s and diamond-studded pistol grips are not nearly as cool-looking as they sound. The deadly knick-knack collection is said to belong to Valencia Cartel leader El Lobo. [link]
Two Brazilian ranchers were sentenced to 30 years in prison apiece for ordering the killing of an environmentalist nun: "Prosecutors said the pair offered to pay a gunman $25,000 to kill the 73-year-old [Dorothy] Stang because she had prevented them from stealing a piece of land that the government had granted to a group of poor farmers." [link]
The Economist takes a peak at the Mockus phenomenon in Colombia: "His moustacheless beard gives him the air of a Baltic pastor... He is financing his campaign with a bank overdraft. His supporters rely on Facebook and make their own posters; street vendors sell unofficial campaign T-shirts." [link]
Some cruise lines will cease traveling to Antarctica after this cruise season, as a ban on the use and carriage of heavy fuel oil goes into effect next year. The ban came after a 2007 incident when a Gap Adventures ship got punctured by ice and sank, causing a mess. [link]
Less money, mo’ problems
Price of oil over the last 18 months.
Chávez’ innovative experiments in centrally-planned capito-socialist economy are looking pretty shaky these days. For one thing, the Venezuelan economy shrank 3.3% last year, which isn’t surprising except for the fact that the slump worsened in the 4th quarter – to 5.8% – just as the rest of Latin America is beginning to recover. The oil sector alone contracted 10%.
(Also, it’s a neat trick to have your economy shrink even while inflation is at 26%.)
It may get worse. Economists say a drop in demand due to the currency devaluation at the beginning of the year will depress GDP growth again in 2010, possibly keeping the economy in recession. Constant power outages are sure to be a drag on production as well.
Meanwhile, the government’s attempts to prop up the bolivar by auctioning massive amounts of dollar-denominated bonds have been an utter failure, as the parallel-market bolivar is at its lowest point in six months. The dollar auctions have stopped.
And to top it all off, the Venezuelan Chamber of Commerce says the government still owes US$12 billion for property it has expropriated (including private petroleum services contractors who were bought out last year) and US$7 billion in forex promised to exporters who need dollars to keep goods flowing to a country that no longer produces anything but oil domestically.
Which, speaking of, happens to be Chávez’ only way of financing his capito-socialist experiment. But because global crude consumption fell last year, there’s a glut on the market, meaning prices will have a hard time going up and might actually go down.
Did I mention Venezuela has legislative elections in September?
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