3. ARGENTINA’S SALTA PROVINCE PREPS THREEBLOCK NATURAL GAS E&P TENDER FOR 2015 (Platts Commodity News)
By Daniel Cancel and Charlie Devereux
August 5, 2015
Primaries in Argentina on Sunday will provide a look into the electoral crystal ball about whether the opposition will have enough support to challenge ruling party candidate Daniel Scioli in his bid to avoid a run-off.
Argentines are obliged to vote in one of eight primaries to choose a candidate for each alliance. The primary that people choose to vote in will indicate which alliance and which candidate has the most support. Scioli says 30 percent would be a solid base, while opinion polls give him about 37 percent.
The 58-year-old will need 45 percent of the vote on Oct. 25 or more than 40 percent with a 10 point margin to win in the first round. A narrow lead in the primary could portend a second round in November where supporters for opposition candidates Mauricio Macri and Sergio Massa may unite to end the Victory Front’s 12-year rule.
Macri has pledged change, while Scioli is more likely to keep exchange controls and the social grants and subsidies that have widened the fiscal gap. His victory could also damp optimism for a quick resolution of last year’s default.
“The results will give us a good idea if there will be a run-off in November,” said Carolina Yellati, director of Consultora Wonder, a public opinion research firm. “Scioli has to do everything he can to avoid a second round since our poll data shows Macri could win in that scenario.”
Scioli, a two-time governor of Buenos Aires province, had 37.6 percent support compared with 30.7 percent for Macri’s aligned parties and 18.1 percent for the dissident Peronist Massa’s alliance, according to a Poliarquia poll published Aug. 2 in La Nacion.
“For the primaries, 30 percent is a lot of votes,” Scioli told La Nacion.
Any result above or close to 40 percent will be a very good election for Scioli given that the ruling party only garnered 33 percent of the nationwide vote in 2013 congressional elections, according to Sergio Berensztein, a political analyst.
Voters must decide if they want continuity under Scioli, who has vowed to uphold President Cristina Fernandez de Kirchner’s state intervention in the economy and welfare programs or the opposition’s vows to unravel exchange controls and normalize creditor relations.
A Raul Aragon & Asociados poll last month showed 53 percent of people want the government to keep all or most of its policies and 68 percent of those surveyed want any change to be carried out gradually.
Macri, who led most polls at the beginning of the year, has seen some support erode as a rebound in economic growth and consumer confidence boosts backing for the government. Economic activity jumped the most in 17 months in May.
Still, the budget deficit is widening, inflation is running as high as 28 percent annually and the nation faces a $6.3 billion debt payment in October with limited financing options beyond reserves. The black market peso rate has tumbled 10 percent in the past month to 14.9 per dollar compared with an official rate of 9.2.
Investors are focusing on how the government will handle last year’s default sparked by a conflict with holdout hedge funds. The defaulted dollar bonds due 2033 have fallen to 97 cents from 106 cents in April as Scioli’s lead widens.
“We see an effort to correct the economic policies regardless of who wins the elections; we don’t see Scioli as an ‘alter ego’ of Cristina Kirchner,” said Sebastian Vargas, strategist at Barclays in New York.
“Macri would have a harder time dealing with Peronist governors while Scioli could take longer to settle with holdouts.”
Opposition contender Macri is nominally competing with Ernesto Sanz and Elisa Carrio in the Cambiemos alliance primary, while Scioli has no rivals within the ruling party’s vote. Whoever comes out on top could extend that lead going into the election as voters often swing behind the favorite, said Berensztein.
In legislative elections in October 2013, Massa doubled his lead over Fernandez’s main candidate in Buenos Aires province to more than 12 percentage points from a five-point lead in primaries two months earlier.
For now, the majority of those polled by Jorge Giacobbe & Asociados in a poll conducted in June and July claimed to be independents.
“About 20 percent of the electorate are non-political and vote according to their wallets,” Wonder’s Yellati said. “Given that, votes could migrate back and forth depending how the economy performs up to the October election.”
By Noah Smith
August 4, 2015
Our career choices are often shaped by our personal tragedies. Someone who loses a parent to cancer may decide to become an oncologist. Someone who grows up around crime may go into criminal psychology. I think about this principle when I see Argentinian macroeconomists.
If you go to macroeconomics conferences and read macroeconomics papers, you quickly see that Argentinians are hugely overrepresented in the field. For example, take Ivan Werning, one of the rising superstars in the macro field. Narayana Kocherlakota, president of the Minneapolis Fed, credits a paper by Werning as the thing that changed his mind about keeping interest rates low. Kocherlakota himself is no academic slouch, so it speaks volumes that he would alter his entire outlook based on Werning’s insights.
Another Argentinian superstar is Columbia’s Guillermo Calvo. Calvo is responsible for one of the key mathematical techniques that powers New Keynesian economic models, which are now the dominant type used in business-cycle theory. A couple other prominent examples are Massachusetts Institute of Technology’s Ricardo Caballero and Alberto Cavallo. The list goes on and on; I could fill two full-length Bloomberg View articles singing the praises of star macroeconomists from Argentina, and still leave some off the list.
But if Argentinians are stars in the halls of American academia, they are veritable celebrities in their home countries. Back in 2014, the Economist ran a story about macroeconomists in Argentina dating star actresses and boasting hundreds of thousands of Twitter followers. It’s enough to make me think I picked the wrong profession!
So here’s the question: Why has there been such a flood of Argentinian talent into macroeconomics? Here’s where the idea of personal tragedy comes in. Argentina is a classic example of a macroeconomic basket case. It’s quite possibly the only country where bad macroeconomic policy sent a country into long-term decline.
The past century has been an unmitigated failure for Argentina’s economy. A century ago, the country was firmly in the ranks of the developed nations, boasting a per capita gross domestic product about three-quarters that of the U.S. (about where Japan and the U.K. stand today). Since then, the figure has declined relentlessly, as Argentina stagnated and the rest of the world pulled ahead. As of today, Argentina is down to about a third of U.S. income levels, putting it solidly in the ranks of middle-income countries.
That sorry record has been riddled with macroeconomic disasters. Here is a picture of the Argentinian rate of inflation:
As you can see, Argentina had hyperinflations three times in the late 20th century. As for GDP growth, where most countries have smooth upward trends punctuated by minor stumbles, Argentina has a sawtooth pattern of booms and catastrophes:
Note how in the early 2000s, GDP — not GDP growth, but actual income per person — plunged by about two-thirds. That is a disaster on a level usually seen only by the likes of Russia or Zimbabwe.
That GDP plunge came from a sovereign debt default — a hallowed Argentinian tradition. The country experienced its first sovereign default just 11 years after achieving independence in 1816, and it didn’t stop there. Argentina defaulted in 1890, and some of its provinces defaulted in both 1915 and 1930. It narrowly avoided default in 1956, then defaulted on its external debt in 1982 and its internal debt in 1989. Then came the big one, in 2001. Argentina’s epic default was the worst in history at the time.
As you might expect, this macroeconomic turmoil has been accompanied by political turmoil. Sometimes political instability is the cause of macroeconomic instability, and sometimes the reverse is true. Argentina’s history is a sorry litany of coups, dictatorships, unstable democracies, massive economic interventions, riots and unrest.
No wonder Argentina’s best and brightest go into macroeconomics. What else are they going to do with their smarts? If they go into engineering, the chances are high that bad macroeconomic policy-making will simply force their companies into bankruptcy. In macro, at least they might have a shot at finding a fix for their country’s apparent curse.
The sad thing is that they almost certainly don’t have a shot. Economists are not very good at understanding the vagaries of politics, mass movements, power transitions and the like. Nor is anyone else, for that matter. Studying optimal monetary policy or fiscal policy is well and good, but it’s a lot more likely to help a stable country like the U.S. than an unstable country like Argentina. The best macroeconomic policies are no good if they depend on the worst people to implement them.
So while the torrent of talent from Argentina has enriched the macroeconomics profession, it won’t be able to heal Argentina’s troubles. For that, Argentina needs stable, inclusive institutions — civil society, a stable democracy, a state that tries to encourage economic development instead of lurching from crisis to crisis. That is something that, for now, no theory can tell us how to create.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
3. ARGENTINA’S SALTA PROVINCE PREPS THREEBLOCK NATURAL GAS E&P TENDER FOR 2015 (Platts Commodity News)
By Charles Newbery
4 August 2015
Buenos Aires (Platts)–4Aug2015/1030 am EDT/1430 GMT Salta plans to hold a tender for three natural gas exploration and production licenses in the next few months, as the northwestern province of Argentina seeks to revive natural gas production, a government source said Tuesday.
The blocks are Chirete Norte, Desecho Chico and Rivadavia, the source said on the condition of not being named.
The source said that three companies have expressed interest in bidding: Argentina’s state-run YPF for Desecho Chico, Hong Kong-based Petro AP for Chirete Norte and Buenos Aires-based Maxipetrol-Petroleros de Occidente for Rivadavia.
“The licenses will go to the bidder that makes the highest offer for investment,” the source said.
The aim is to revert flagging production, the source added.
For decades the second-largest source of gas in Argentina, the province has dropped to sixth as maturing reserves, low investment and few finds have cut production 68% over the past decade.
Salta produced 7.8 million cubic meters/day, or 6.6% of the 118.4 million cu m/d national total, in May, according to the latest numbers of the Argentine Oil and Gas Institute, an industry group. That is down from 20.7 million cu m/d in May 2004, when its share was 13.8% of the national total of nearly 150 million cu m/d.
While Argentina has seen a revival in exploration since the discovery of large shale resources in 2010, the focus has been in the southwestern province of Neuquen, the source of nearly half of the country’s gas. This has helped turn around a decade-long decline in national oil and gas production, but little investment has yet to flow to the mostly conventional gas resources in Salta.
August 4, 2015
BUENOS AIRES, Argentina — Argentine authorities have successfully guided a whale out of the marina of a glitzy area in Buenos Aires and hope that it will now return to sea.
Roxana Schteinbarg is the executive coordinator of the Whale Conservation Institute in Argentina. She tells The Associated Press that the whale had left the marina of the Puerto Madero neighborhood. Schteinbarg says the animal is now in the port area where the Rio de La Plata river feeds into the Atlantic.
The whale appeared in the marina Monday afternoon, periodically surfacing next to yachts while hundreds of onlookers gawked.
Schteinbarg said Tuesday the whale appears to be a 2-year-old humpback. She said it was likely making its first migration without its mother and got disoriented.