By Jay Solomon in Washington and Taos Turner in Buenos Aires
31 July 2015
Argentine President Cristina Kirchner is using the nuclear accord between Iran and world powers to defend a much-criticized deal her own government made with Tehran nearly three years ago.
That 2013 accord, to create a “truth commission” with Iran to investigate the deadly 1994 bombing of a Jewish community center in Buenos Aires, was criticized by many in Argentina and abroad — including officials in Israel — who said it would permit Iranian suspects to avoid justice.
Political analysts in Argentina say the nuclear deal, forged this month, has given Mrs. Kirchner the chance to put her own dealings with Iran in a new light. She has done so through a series of tweets and public comments.
Mrs. Kirchner this week reiterated her monthslong assertions that the talks between the U.S. and Iran show the deal was necessary to get the bomb probe on track after years of inaction.
“In case nobody realized it, the United States is negotiating with the Islamic Republic of Iran,” Mrs. Kirchner said Wednesday on Twitter. “It’s a nuclear deal that is opposed by Republicans and Israel.”
Some of the comments by Mrs. Kirchner and other Argentine officials were related to the European Union’s plan to lift sanctions on a former Iranian defense minister under indictment for the 1994 bombing as part of the nuclear deal.
The Iranian, Ahmad Vahidi, along with a group of Iranian military officers, nuclear scientists and defense institutions, is set to have sanctions lifted against him under terms of the nuclear accord. Mr. Vahidi was a commander of Iran’s elite overseas military unit, the Qods Force, when a vehicle was detonated in front of the AMIA center in Buenos Aires’s Jewish quarter.
Mrs. Kirchner’s government didn’t criticize American and European officials. Instead, officials in her government have tried to link the negotiations over Iran’s bomb-making program with Argentina’s efforts to bring to justice the masterminds of the Argentine bombing.
Her foreign minister, Hector Timerman, wrote to U.S. Secretary of State John Kerry and EU Foreign Minister Frederica Mogherini on Wednesday to ask if the EU’s decision on Mr. Vahidi would hinder Buenos Aires’s ability to prosecute the Iranians in a criminal case over the bombing, which killed 85 people.
U.S. and EU officials confirmed Thursday that European sanctions on Mr. Vahidi would be lifted by 2023 under the deal with Iran. But they said this wouldn’t undermine Argentina’s case against the officer or their willingness to enforce the international agency Interpol’s 2007 request for the arrest of Mr. Vahidi and four other current and former Iranian officials.
1 August 2015
Voters are about to start choosing the next president
A COUNTDOWN clock hangs over the desks in the open-plan political headquarters of Mauricio Macri, the mayor of Buenos Aires, who hopes to be Argentina’s next president. It tells skinny-jeaned campaign workers how many days, hours and minutes there are “until change”. The clock will hit zero on August 9th, when political parties hold primaries to select their presidential candidates. Then, presumably, it will be reset for the first round of the election itself, to be held on October 25th.
The primaries are less momentous than the clock suggests. There is little suspense about who will win. Mr Macri (pictured above left) is way ahead of rivals to be the candidate of Cambiemos (“Let’s change”), an electoral front that consists of his Republican Proposal and two other parties. The other main contender for the presidency is likely to be Daniel Scioli (above right), the governor of Buenos Aires province. He is the only candidate from the Front for Victory (FPV), the party of Argentina’s president, Cristina Fernández de Kirchner.
Even so, the primaries matter. If pollsters’ guesses are correct, the presidential election is a two-horse race. Sergio Massa, a charismatic congressman from the Justicialist Party who was ahead in the polls a year ago, is far behind now. Ms Fernández, after months of prevarication, has thrown her support behind Mr Scioli, who was Argentina’s vice-president when her late husband, Néstor Kirchner, was president. The primaries are thus likely to show that Argentines face a choice between the continuity that Mr Scioli represents and the change that Mr Macri promises.
Unlike the rowdy presidential primaries in the United States, Argentina’s “simultaneous open obligatory primaries” (PASO) are not an exercise in intra-party democracy. Ms Fernández, who introduced the system in 2009, called it at the time “the most important political reform” since democracy was restored in 1983. There is little evidence for that. None of the candidates faces a serious challenge from within his own electoral coalition. Argentina’s interior and transport minister, Florencio Randazzo, an ally of Ms Fernández, might have posed a threat to Mr Scioli. Mr Scioli extinguished it by choosing the president’s closest (non-family) confidant, Carlos Zannini, to be his running mate. Ms Fernández duly persuaded Mr Randazzo to withdraw his candidacy.
The real point of PASO voting, many analysts think, is to spare politicians nasty surprises in a country where opinion polls are unreliable. Ms Fernández introduced it after her party was routed in mid-term elections. Voters have to take part. They choose which party’s primary to vote in, and that indicates which candidate they are likely to support in the later election. In primaries held before the last presidential ballot, in 2011, the FPV’s contest (between Ms Fernández and a host of others) attracted more voters than that of any other party. She went on to win by a landslide. “In the absence of credible surveys, the PASO elections are a true thermometer for what each candidate’s chances are going into October,” says Juan Cruz Diaz of Cefeidas, a research group.
That has not stopped pollsters from making their own predictions. The only point of agreement is that this year’s presidential contest will be closer than the last one. Aresco, an Argentine polling group, expects Mr Scioli to win in the first round; IPSOS predicts that Mr Macri will prevail in a run-off on November 22nd.
The election is shaping up as a referendum on kirchnerismo, the brand of Peronist populism practised by Kirchner, who became president in 2003, and by his wife, who succeeded him. Mr Macri, a scion of a business family, built his centre-right party from scratch by opposing everything the Kirchners stand for. He promises to restore independence to institutions that Ms Fernández has co-opted, including the judiciary and the statistics agency, to remove trade barriers and currency controls that she imposed in 2011 and to quell inflation. He would probably try to reach agreement with holders of foreign debt, on which Argentina has defaulted.
Mr Scioli is building his campaign around voters among whom Ms Fernández still exerts Evita-like charm. Her image is all over his campaign adverts and billboards. Although inflation is high and the economy is shrinking, a large proportion of Argentina’s 40m citizens benefits from Ms Fernández’s lavish spending on subsidies, benefits and government jobs (see chart). By choosing Mr Zannini to be his running mate, Mr Scioli has greatly improved his chances of holding on to their support.
Yet the divide between Mr Scioli and Mr Macri is not as stark as it first appears. Even before the primaries, Mr Macri has started moving toward the political centre. He says he has no plans to privatise the money-losing state airline or YPF, a big oil company that Ms Fernández nationalised in 2012. Welfare schemes are an “earned right”, Mr Macri declares. His chief of staff says he will not cut subsidies deeply or lay off government workers en masse. The change candidate has mainly changed his own mind, sneer his opponents.
Mr Scioli avoids that risk by saying as little as possible. His friends say he cosies up to Ms Fernández only out of political necessity; in office he will be his own man. After August 9th Argentines will be able to make a better guess about who will take office as president in December. Just what sort of leader he will turn out to be will become clear when he starts governing.
By Walter Bianchi
July 30, 2015
Daniel Scioli, the ruling party’s candidate in Argentina’s presidential election, maintained his lead over his more business-friendly rival in July, excerpts of a poll published on Thursday showed.
Scioli, of President Cristina Fernandez’s Front for Victory party, is favored by 35.5 percent of voters ahead of the Oct. 25 ballot. Mauricio Macri, the Buenos Aires mayor who espouses more orthodox economic policies, has 31.1 percent.
The July poll by consultancy Management & Fit shows Scioli’s lead narrowing marginally on the previous month, when he had 36.9 percent of support and a 5.3 percentage point lead over Macri.
In a little over a week’s time, party primaries will decide which candidates run in the election. Scioli, governor of Buenos Aires province which surrounds the capital, is the sole contender for the ruling party ticket. Macri and third-placed Sergio Massa have rivals to beat, but both are expected to win.
The party primaries, which run simultaneously and in which voters can choose any candidate, may help predict whether an outright win is possible in the first round or if a run-off in November will be needed.
Another poll by the Aragon consultancy group published a week ago showed Scioli with 38.9 percent of voter support to Macri’s 30.1 percent.
To win in the first round, a candidate must secure at least 40 percent of votes and beat the second-placed candidate by more than 10 percentage points.
Fernandez, constitutionally barred from seeking a third term in October, has established trade and currency controls that economists say have slowed investment, stoked inflation and stunted economic growth.
Management & Fit confirmed the excerpts of the poll published in a newspaper were accurate, but declined to provide further details on the poll.
By Eliana Raszewski
July 30, 2015
Protests that briefly disrupted production in part of Argentina’s main shale oil producing region have ended and operations are back to normal, state-controlled energy firm YPF said on Thursday.
Demonstrators from the local Zonal Xwanco and Campo Maripe communities late on Wednesday lifted their blockades on access roads to several drilling installations in the Loma Campana field, which YPF is exploiting with Chevron Corp.
The disruption caused a production loss of 10,000 barrels of oil and about 1.5 million cubic meters of gas, YPF said.
“Today, Loma Campana is operating normally,” a YPF spokesman said.
The communities were protesting over their territorial claims to the Loma Campana field, which lies in southern Neuquen province.
Argentina’s fledgling shale industry produces just 45,000 barrels of oil per day, and the formations under the wind-swept plains of Patagonia may hold some of the largest unconventional reserves in the world.
Latin America’s third largest economy wants to ramp up its shale output to reverse an energy trade deficit that is sapping foreign reserves, but needs to secure an estimated $200 billion in investments over the next decade to exploit its resources.
29 July 2015
The average price of a basic pay-TV package in Argentina, at around US$70 in constant currency based on The Economist’s Big Mac Index (BMI), is tied with that in Egypt as the most expensive in the world.
The finding is part of an annual study commissioned by Brazilian pay-TV association ABTA from Brazilian economic research institute (Fipe) and carried out in 49 nations. The global average price in constant currency in the 2015 study was US$38.
Among the eight Latin American nations assessed in the report, Uruguay is also above the global average and has the seventh most expensive pay-TV package globally, costing around US$39.
The country is followed by Peru (10th priciest package), Chile (19th), Costa Rica (31st), Colombia (32nd), Brazil (33rd) and Mexico (35th).
In Brazil, according to ABTA, the mean price charged for a basic TV package subscription was US$22.3, down from US$19.4 in last year’s study.
While it might have the costliest pay-TV in Latin America, Argentina boasts the highest peneration of the service among its main LatAm peers.
The country ended 1Q15 with 28.7 subscribers per 100 inhabitants, as BNamericas graphics show, using data from official sources from nine countries.
By Richard Lehmann
July 30, 2015
You may wonder why a column on investing in stamps would address three countries with little common interest among collectors. For stamp investors, however, they have a common theme with significant potential.
Stamps have long represented a parallel system for investing, hiding, preserving and transferring wealth. The three subject countries have such needs today. They share common traits; they have repressive government, domestic economic turmoil, severe exchange controls, inflation and deteriorating currencies. As a result, stamps allow citizens a means to turn domestic assets into portable assets with low recognition and visibility. One well known Wall Street financier, with whom I discussed stamps as an investment, told me the story of an Iranian general acquaintance who related how he fled Iran with his family after a thorough airport search of all his baggage except for the paperback book he was holding in his hand. That book held his entire net worth in the form of high value stamps inserted between the pages. Stamp demand fills such a need as well as for transmitting support funds back to family members without government oversight and taxation or for just hiding and preserving wealth within the country against currency erosion and severe inflation.
For Iran, this phenomenon has led to spectacular stamp price rises in the last ten years. My universe of investment grade Iranian stamps has risen 113% in the last five years after rising 85% the previous five. This rise means a catalog value of $525,000 for 329 items in mint condition. There are pitfalls with Iranian stamps, however, since many earlier issues were crudely overprinted. Per Scott Catalogue, as much as 90% of such material in the market are fakes. This makes such stamps a high risk investment since many of the Iranians who buy them know little about stamps. It also leads to wildly different valuations between catalogs some of which appear to consider the fakes as the market norm.
Despite their spectacular rise, stamp investors would probably do well to stay away from Iranian material for the present since valuations could decline sharply if lifting the nuclear arms sanctions free its frozen exchange reserves and normalize trade. Recent bidding weakness at the D.F. Kelleher auction for Iranian lots seems to bear this out; of 36 lots offered, 16 sold mostly well below the estimate and 12 did not sell at all.
Events in Iran have been troublesome for some time, so it leads into an analysis of Argentina, where similar valuation drivers exist but, the game is not as far along. For example, my universe of investment grade stamps for Argentina has risen 83% in the last five years after a mere 4.5% in the previous five. This represents a cumulative value today of $273,000 for some 308 mint stamps.
Argentina’s troubles have a long history of ups and downs, but they have only grown serious financially in the last ten years and are unlikely to reverse quickly despite hopes for change once the Kirchner presidency is over. Its current problems are financial and economic where stamps can provide financial mobility with valuations that are still well below the Iranian nose-bleed levels.
An even earlier-stage opportunity may lie with Venezuela. This country has a repressive political environment , economic chaos, flight of population, strict exchange controls, high inflation and a seriously debased currency. In short, it is the perfect environment for stamp appreciation. Best of all, spectacular appreciation has not yet begun. My universe of investment grade Venezuelan stamps shows only 8.5% appreciation in the last five years and 5.5% in the previous five. This amounts to only $65,000 for some 167 mint stamps. Used stamps have done even worse in terms of appreciation, rising only 4.2% and 1.2% in the same time periods. They do, however, represent a higher value, totaling $110,000. These are not numbers that would normally attract investors, however, their lack of appreciation in the face of a compelling need makes them a low risk, high reward speculation.
The attached table shows some of the higher appreciation items for each country (Mint, M/U or Used). The Iranian selection has no overprinted stamps to avoid the problems with bogus issues. I noted some wildly different valuations exist for the same items between Scott, Michel and Yvert. The table identifies the ratio of Scott pricing to Michel and Yvert. A large number indicates these stamps are best bought from foreign dealers not using Scott. A ratio well below 1 means there is significant appreciation likely in the USA. Where there is no ratio showing it means the foreign catalog does not recognize the item or has no pricing. In any case, whenever stamp prices vary greatly between catalogs, dealers will arbitrage such differences over time, thereby driving values toward the higher prices. Investors need do no less.