6. ARGENTINA ECONOMY: QUICK VIEW – BLACK-MARKET EXCHANGE RATE SLIDES (Economist Intelligence Unit – ViewsWire)
By Andres OppenheimerAugust 26, 2015Over the past year, I have often said that whoever wins Argentina’s Oct. 25 elections, including government candidate Daniel Scioli, will be much better than outgoing President Cristina Fernández. But after interviewing Scioli this week, I’m less optimistic about Argentina’s post-election future.During the interview from his office in Buenos Aires, Scioli — the current front-runner in the polls — didn’t depart one inch from the Fernández government’s far-fetched narrative claiming that the country is doing great, and doing better every day. In fact, all international indicators show the opposite.According to the International Monetary Fund (IMF), the World Bank, the United Nations and the world’s biggest private banks, Argentina has — alongside Venezuela — Latin America’s highest inflation rate, and one of the region’s lowest economic growth rates.This year, Argentina’s economy is projected to shrink by 0.3 percent, and inflation is expected to rise above 20 percent, according to IMF projections. And these IMF figures, dating from April 29, are expected to worsen following China’s financial problems in recent days.But when I mentioned these statistics to Scioli — whom I have known for two decades, and is much more level-headed than outgoing president Fernández — he shrugged them off almost as if they were irrelevant. He countered that Argentina has in recent years reduced unemployment from 25 percent to 6.5 percent.“I don’t agree at all with the perception that Argentina is a country in trouble,” Scioli told me. “We’re going to vote on Oct. 25 with an Argentina that is growing, that has reduced unemployment, that has a solid level of foreign reserves, with major activity within our domestic economy.”When I mentioned that Argentina’s unemployment rate has fallen because the populist governments of Fernández and her late husband Nestor Kirchner have increased the number of government employees by nearly 70 percent, he didn’t seem to see that as a major problem.Asked whether he would reduce the number of public employees to reduce public spending and inflation, he responded, “No, not at all.” He proudly added that, as governor of the Buenos Aires province, he has increased the number of police agents, teachers and other public servants.On foreign affairs, I asked Scioli whether restoring Argentina’s bad relations with the United States would be one of his foreign policy priorities. Seeming to downplay the importance of the world’s biggest economy — in line with outgoing president Fernández anti-American stance — he responded that he plans to work with “all countries in the world that offer opportunities,” including the United States. He emphasized that he expects to improve ties with Bolivia, Paraguay and other neighboring countries.On Venezuela’s refusal to accept international observers from the Organization of American States for the crucial Dec. 6 legislative elections, he said, “I am not going to interfere with a sovereign issue of the Venezuelan authorities.”Toward the end of the interview, when I asked Scioli about his critics’ claims that he would be a puppet of Fernández, who has placed her loyalists in key positions around him, Scioli said that he has often been “underestimated” throughout his political career.“I have always fully exercised my constitutional powers. I have done it in all government jobs I have had, and I will do it as president,” he said.My opinion: I still think that, if elected, Scioli would be a better president than Fernández, who has squandered an economic bonanza from high world commodity prices with disastrous populist policies and rampant corruption. He is a less polarizing, and more pragmatic figure than the outgoing president, even if his current rhetoric sounds as outdated as hers.Still, there are reasons to be worried about Argentina, regardless of who wins. If opposition leader Mauricio Macri wins, Argentina would have a more modern-thinking government, but he would most likely not have a majority in congress and may have a difficult time governing.On the other hand, if Scioli wins, as former Argentine Foreign Minister Dante Caputo wrote in the daily La Nacion, the government-backed candidate would have to choose between ceasing to be a populist, in which case he would have the “Kirchnerista” wing sabotaging his government from within, or continue to be a populist, in which case Argentina would be headed to an even bigger economic and social crisis.Granted, new coalitions could be formed before the October elections, or before a possible second round in December, that could make a future government more viable. But right now, there are reasons to cry for Argentina.By Peter PrengamanAugust 27, 2015BUENOS AIRES, Argentina — When Lidia Guerrero met with Pope Francis in Rome last year, the Argentine native told her he knew all about Guerrero’s son, who has been on death row in Texas for 19 years.“I’ve prayed so much for that young man from Cordoba,” she says Francis told her, referring to the hometown of Victor Hugo Saldano.The short meeting in February 2014 left Guerrero with more hope than she has felt in years about the future of her son, who she says is guilty of murder but has been driven to insanity on death row.Francis, an Argentine native, is a staunch critic of the death penalty. Like most countries in Latin America, Argentina does not have capital punishment.Death penalty opponents are hoping that Francis pressures lawmakers to abolish it when he visits the United States next month, and Guerrero is praying that the pope intervenes on behalf of her son.Such pleas by popes or politicians from other countries often fall on deaf ears, and face particularly long odds in Texas, the U.S. state that makes most use of the death penalty.Still, Pope John Paul II successfully won a reprieve in 1999 from Missouri Gov. Mel Carnahan on behalf of a prisoner scheduled for execution who instead was ordered to serve life in prison without parole.“I have no certainty that Francis will ask for clemency for my son, but I do have hope,” said Guerrero, 67.That hope is based on several factors, from the papal meeting to the legal fight surrounding Saldano’s original death sentence. In 2002, the U.S. Supreme Court sent the death sentence back to the Texas Court of Criminal Appeals to review because Saldano’s Hispanic ethnicity was one of the criteria the jury considered when deciding between the death penalty and life in prison. In 2004, Saldano had a second sentencing trial that did not factor in ethnicity and was again given the death penalty.“Two different juries have found that Saldano is a future danger and should die for his crime,” John R. Rolater, Jr., the assistant criminal district attorney in Collins County, where Saldano was convicted, wrote in an email response to questions from The Associated Press.Guerrero and her lawyer, Juan Carlos Vega, say they sent a letter to the Vatican about Saldano in December 2013, and were immediately invited to Rome. Since the meeting, Vega says he has provided Vatican officials documentation on the legal fight.“This isn’t just one more death penalty case,” said Vega, who helped present the case to the Inter-American Commission on Human Rights.Kenneth Hackett, U.S. ambassador to the Holy See, told the AP that he wasn’t aware of Saldano’s case but that people with loved ones in U.S. prisons frequently appeal to the pope. Hackett said Francis is very critical of the death penalty, and he may raise the issue while visiting a correctional center in Philadelphia.Guerrero says her son left home at 18, first going to Brazil, where his father was living, and then to several countries in South America. Saldano spent the next several years traveling and working odd jobs as he moved across Central America and Mexico.“From the time he was a boy, he always talked about seeing the world,” said Guerrero.In the early 1990s, Saldano entered the United States illegally via the Mexico-Texas border. After spending some time in New York City, he returned to Dallas and worked in a factory.Guerrero says her son told her that he was living in a crime-ridden neighborhood and carried a gun for protection.On Nov. 25, 1995, Saldano and Mexican friend Jorge Chavez, drunk and high on crack cocaine, were seen holding Paul King at gunpoint in a parking lot.King was later found shot to death in a nearby forest. When Saldano was arrested, he was wearing King’s watch and carrying the gun.During the penalty phase of the 1996 trial, psychologist Walter Quijano was called as an expert witness, according to court documents. Quijano presented 24 factors for the jury to use in evaluating whether Saldano would be dangerous in the future, including race.Quijano said that blacks and Hispanics were overrepresented in Texas prisons, and thus there was a correlation between race and future dangerousness.The jury gave Saldano the death penalty.After several appeals, in 2002 the Supreme Court sent the case back to Texas to review after then Texas Attorney General John Cornyn said the state erred by including ethnicity in the case.During the sentencing trial in 2004, Saldano masturbated twice in the presence of jurors, and prosecutors cited incidents inside the prison, like smearing feces and urine on cell walls.“They locked him in the pressure cooker of death row for seven years and then told everyone, ‘Look how dangerous he is,’” said Jonathan Miller, a professor at Southwestern Law School in Los Angeles who has worked on Saldano’s case.Rolater, the assistant district attorney, said that Saldano was competent to stand trial and “has a documented history of faking mental illness during his confinement.”Saldano is in the Polunsky Unit of the Texas Department of Criminal Justice, about 75 miles (120 kilometers) northeast of Houston. Cells are 60 square feet (5.6 sq. meters) with small windows. Inmates are kept alone 23 hours a day.Saldano’s execution date has not been scheduled.Even if Francis brings up the case, clemency is a long shot. It would require a recommendation from the Texas Board of Pardons and Paroles to Gov. Greg Abbott, and Abbott could reject it.Still, Guerrero would be happy with any development that shines a light on her son’s case and capital punishment.“The death penalty is dangerous thing,” said Guerrero. “And Victor has already paid for his crime.”Associated Press writers Mike Graczyk in Houston, Rachel Zoll in New York and Nicole Winfield in Rome contributed to this report.By Katia PorzecanskiAugust 26, 2015*Invesco to BlackRock have added to positions in recent months*Dollar bond prices at 19-month high to euro-denominated notesThe real money is back in Argentina.Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorite of the hedge-fund crowd, which made speculative bets on the fortunes of the troubled nation.But in recent months, that’s started to change.With presidential elections in October set to usher in a new administration, money managers from Invesco Ltd. to Allianz SE and Van Eck Global have begun to wade back into Argentina’s dollar-denominated bonds.Those “real-money accounts,” industry speak for long-term investors such as mutual funds and pensions, are resurfacing on optimism that Argentina will, once and for all, resolve its differences with holdout creditors and end the country’s decade-long isolation from international markets.“We decided to start stepping back,” said Sean Newman, who helps oversee $1.5 billion of emerging-market debt at Invesco, which began rebuilding its debt positions in Argentina in the first quarter. “The macro imbalances which exist right now are not sustainable. There is recognition of a needed adjustment.”Van Eck, Allianz, BlackRock Inc., and T. Rowe Price Group Inc. joined Invesco by adding to their bond holdings in Argentina last quarter, filing data compiled by Bloomberg show.They’re taking a page from hedge-fund managers such as George Soros and Daniel Loeb, who together have staked billions betting that whoever succeeds President Cristina Fernandez de Kirchner will unwind some of her most radical policies, which have spurred runaway inflation, sapped foreign investment and all but shut Argentina out of overseas debt financing.The re-emergence of long-term investors can be seen in the widening gap between Argentina’s dollar-denominated bonds, which are included in a widely followed emerging-market sovereign debt index compiled by JPMorgan Chase & Co., and the nation’s euro securities, which are not.The gap reached 11.2 cents on Aug. 21, the widest since January 2013.“What’s giving you the prices you see on the screen are real-money accounts buying Argentina on the margin,” said Sebastian Vargas, a strategist at Barclays. “They’re indexed to dollar assets.”In May, Morgan Stanley surveyed about 50 clients and found that the majority who used indexes to benchmark performance were “underweight” in Argentina.The survey also found that 80 percent planned to either boost or cull their positions well before the presidential election was held on Oct. 25. And if “early indications point towards a more favorably perceived election outcome,” those investors would move quickly to build their holdings, according to a report dated June 2.While ruling party candidate Daniel Scioli is favored to win, he will probably move toward a “more independent platform” and “deliver a message of gradual change” to gain more votes and avoid the possibility of a run-off, according to Iker Cabiedes, an economist at New York-based JPMorgan.That may include ultimately resolving a dispute with billionaire Paul Singer’s hedge fund Elliott Management, which triggered Argentina’s second default. Fernandez has refused to negotiate with the hedge fund.Scioli said in a speech at the Council of the Americas on Wednesday that he would make necessary changes in Argentina, and that the country must attract investment.Optimism about the next administration has helped shield Argentina from this month’s global selloff, said Yerlan Syzdykov, a money manager at Pioneer Investments. Argentina has the developing world’s best-performing bonds this month, while emerging markets have lost 2.4 percent.“Investors are pricing in that the most-relevant candidates are putting the normalization of the debt situation as a goal on their agenda,” said Agustin Honig, the head of sales and trading at AdCap Securities in Buenos Aires.By Gram SlatteryAugust 26, 2015When the creators of an elaborate 2013 Cadillac commercial began to scout for shooting locations three years ago, they began in Argentina, where varied landscapes and creative talent had long attracted ad producers.But when it came time to import the equipment needed for the three-minute spot, they collided head-on with the country’s byzantine import regulations. Argentina demanded hefty deposits on all vehicles, cameras, and lights, and producers were unsure when – or even if – their imports would make it through customs.The solution? Move to Chile.“Now, we’re not filming many projects in Argentina. Many of our clients don’t want to go back there,” said Cristobal Sotomayor, a partner for Buenos Aires-based Goodgate Films, which produced the spot.According to producers and executives, Sotomayor’s experience is far from unique.Repelled by onerous tariffs, economic malaise and unorthodox policy making, advertising producers are souring on Argentina, where protectionist policies have expanded significantly in recent years.Observers say even creative industries that have long been a point of pride in a country known for tango and theater are not immune.The shift is also a vote of confidence for neighboring Chile, where producers can import merchandise quickly without tariffs, and where the government is widely considered predictable.Chile ranked 41 on the World Bank’s 2015 Ease of Doing Business Index, while Argentina came in at 124, alongside countries like Mozambique and Guyana.“Whoever is the next president here (in Chile), it doesn’t really matter, because the morning after the election, the country will keep working,” said Felipe Noguiera, a Santiago-based production head for Argentina’s Jacaranda Films.Although statistics are sparse, executives or producers at four international production firms and Chile’s major film equipment contractor told Reuters that foreign shoots are on the rise in Chile, and that their business has far exceeded expectations in Santiago in the last four years.During that time, at least four Buenos Aires-based production companies have opened offices or formed alliances in the Chilean capital, citing a slowing Argentine industry.Makers of car commercials in particular have flocked to Chile. In addition to Cadillac, companies including Toyota, Subaru, Jaguar Land Rover, Peugeot, Nissan, and Mercedes Benz, have shot ads in the nation in the last three years.“What has happened is that Argentina lost credibility,” said Sotomayor.Joyce Zylberberg, the president of Chile’s government-run Film Commission, said the shift has also helped cultivate a creative Renaissance in Chile, where directors like Pablo Larrain and Andres Wood have made an impact internationally in recent years.But not everyone is as sanguine about the national film scene.Producers say a lack of creative talent in Chile relative to its neighbor still forces them to import Argentine directors.Argentine film-makers themselves insist that short-term economic troubles will not overshadow their prospects in the long-term.“We Argentines know crisis,” said Ernesto Molino, a Cannes award-winning production designer from Buenos Aires.“And it’s the crises, of course, not the good times, that breed creativity.”26 August 2015Country forecast overview: Highlights* Political polarisation, weak institutions, fickle political loyalties, powerful unions and a strong tradition of public protest will sustain risks to political stability throughout 2015-19. In the short term the main risks to stability will come from heightened economic challenges that are producing difficulties for the president, Cristina Fernández de Kirchner, as the October 2015 presidential election approaches. The Economist Intelligence Unit’s assumption of a more market-friendly administration from December 2015 that will work to reduce economic distortions suggests that the risk of destabilising protests will gradually subside. But the adjustment process will be a difficult one, involving politically unpopular austerity measures, and the risks of social unrest will therefore remain significant for much of the forecast period.* Although our assumption of a more business-friendly administration suggests that the quality of policymaking will improve in the medium term, this is unlikely to extend to a weakening of the executive’s extraordinary powers. Reforms that would successfully address long-standing institutional weaknesses will also remain unlikely, and any attempts to strengthen the bureaucracy will founder on political resistance in Argentina’s clientelist political system. Combined, these factors will limit the quality of policymaking throughout the forecast period.* The economy will recover only gradually from recession in 2014, and the economic outlook will remain fraught with risks for some time. Our benign baseline forecast that growth will reach 0.9% in 2015 assumes that strong nominal wage growth will boost private consumption, albeit at the expense of continued inflationary pressure. In the medium term our baseline forecast assumes that macroeconomic policy tightening, along with peso adjustment, will eventually start to have a beneficial impact on net exports.* There will be a confidence boost from policy tightening. Combined with macroeconomic adjustment, and a gradual removal of foreign-exchange and import controls, these policies should set the economy on a more solid long-term footing. However, some aspects of the policymaking environment will remain tricky under any government, with labour-market reform and a comprehensive fiscal reform likely to remain low on the agenda.* Argentina’s GDP per head is still among the highest in the region and, combined with improved access to credit, moderate rates of economic growth in the medium term will boost purchasing power and create market opportunities. Still-high poverty rates and income inequality will restrict the pool of effective consumers, but to a lesser extent than in many other countries in the region.Country forecast overview: Key indicatorsKey indicators 2014 2015 2016 2017 2018 2019Real GDP growth (%) 0.5 0.9 1.8 3.4 3.7 3.9Consumer price inflation (av; %) 37.6 28.0 26.4 21.3 14.7 12.9Budget balance (% of GDP) -2.5 -3.6 -2.5 -1.8 -0.9 -1.0Current-account balance (% of GDP)-0.9 -1.4 -1.5 -1.5 -1.5 -1.3Lending rate (av; %) 24.0 24.7 21.1 17.4 13.3 10.9Exchange rate Ps:US$ (av) 8.1 9.3 11.7 13.8 15.7 17.46. ARGENTINA ECONOMY: QUICK VIEW – BLACK-MARKET EXCHANGE RATE SLIDES (Economist Intelligence Unit – ViewsWire)25 August 2015EventWith demand for hard currency continuing to outstrip supply, the government has moved to issue US dollar-linked securities. But a combination of growing domestic economic imbalances and global financial turmoil in late August has nonetheless produced increased devaluation expectations, and the black-market exchange rate has depreciated to its weakest level in 2015.AnalysisIssuance of Bonad 2017s, peso-denominated bonds linked to the exchange rate, was oversubscribed. The authorities planned to issue US$500m but eventually issued US$1.1bn in bonds, which fall due on February 2017 and have an annual coupon of 0.75%. In order to finance the fiscal deficit through new debt issues and thereby reduce dependence on inflationary finance from the Banco Central de la República Argentina (BCRA, the Central Bank), the government had already issued US$1bn in dollar-denominated bonds in April, but then went on hold in the face of growing embargo risk related to continuing claims from litigant creditors in the US courts. Amid muted demand for peso-backed securities, the government opted to issue dollar-linked bonds, in the hope that this would raise finance while also reducing demand for dollars, helping to keep the black-market exchange rate under control.In the event, the dollar-linked bonds did little to prevent further downward pressure on the black-market rate. On August 24th, the rate hit Ps15.8:US$1-a depreciation of 6% in just ten days-and verged on overshooting the historical peak in October 2014, when the Central Bank president was replaced. Both external and domestic drivers are at play. Recent global financial market volatility has seen substantial currency depreciation in China and Brazil (Argentina’s two main trading partners), along with a fall in prices for the key soya crop. There has also been a clear dwindling of the trade surplus, a sharp widening of the fiscal deficit and increased political risk surrounding the October general election. On top of this, the BCRA president, Alejandro Vanoli, recently stated that the Central Bank did not have enough reserves to allow for the removal of foreign-exchange controls. Mr Vanoli’s statement, although probably meant to rebut the claims of an opposition presidential candidate, Mauricio Macri, that he would work to remove controls quickly if elected, has not inspired great confidence in the BCRA’s ability to stave off a crisis.26 August 2015Policy towards private enterprise and competition2015-16: Competition policy is weak and poorly enforced. The burden of red tape remains cumbersome. Crony capitalism hampers the freedom of businesses to compete.2017-19 State participation in key sectors continues, but this interventionist trend should reverse under a new government.Policy toward foreign investment2015-16: Efforts to resolve disputes with international creditors and investors as the government seeks fresh sources of US-dollar inflows. A risk of expropriation of foreign assets remains until the end of the Fernández administration.2017-19: Foreign direct investment (FDI) is welcome. Improvement in investment dispute settlement and availability of investment-protection schemes.Foreign trade and exchange controls2015-16: Deterioration in the balance-of-payments position heightens the risk of further trade or capital controls being imposed. Continued resorting to protectionism against trading partners, including Brazil and China.2017-19: Some foreign-exchange and import controls may be removed gradually under the new government. Possibility that free-trade agreements (FTAs) make better progress under a new government. Possible FTA between Mercosur and the EU.Taxes2015-16: Continued tinkering exacerbates complexity of tax system. Export levies persist.2017-19: Comprehensive tax reform remains unlikely. Risk remains of new temporary taxes being imposed.Financing2015-16: Banking penetration remains weak and long-term credit restricted, particularly for small and medium-sized enterprises, owing to weak long-term deposit base.2017-19: Non-bank financing continues to be constrained by a small pool of institutional investors.The labour market2015-16: Tension with the unions, owing to inflation. Political and bargaining power of the unions will remain strong.2017-19: Progress on labour reform unlikely even under a more business-friendly government. Continued potential for conflicts with unions. Some skills shortages.Infrastructure2015-16: Weak contract rights and deficient regulatory regimes keep private investment below potential. Financing constraints hamper public investment, reflected in transport bottlenecks and energy-supply problems.2017-19: Some public and private investment set to improve energy supply and upgrade export infrastructure, but the risk of energy shortages will persist as demand continues to grow.465 words25 August 2015SUNBURY — The bid to extradite an aging and ailing murder suspect from Argentina has gained muscle as U.S. Assistant Attorney General Peter Kadzik has joined the effort to bring Rocco Franklin to the Columbia County Court.In a letter copied to Secretary of State John Kerry, Kadzik informed U.S. Reps. Lou Barletta and Tom Marino that the Office of International Affairs, an agency in the Department of Justice, is working closely with authorities in Pennsylvania to speed the return of Franklin to the Valley, where he and his ailing daughter are charged in the July 2012 murder of Frank Spencer.Acting on behalf of state officials, Barletta, R-11, of Hazleton, and Marino, R-10, of Cogan Station, have waited nearly a year for the extradition of Franklin, 72, of Harrisburg, from Buenos Aires. Franklin was arrested in September and on Aug. 5 had his first extradition hearing, which had been delayed because officials in the South American country said his health was failing.After the hearing, Barletta and Marino learned it could take up to three years to bring back Franklin, who is fighting his extradition.Franklin’s daughter, Maria Sanutti-Spencer, 50, of Selinsgrove, also is charged in the slaying of her ex-husband.Police say Franklin and Sanutti-Spencer, who suffers from kidney failure and diabetes, shot and killed Spencer, 42, of Millville.“The United States requested Mr. Franklin’s extradition from Argentina shortly after he was arrested there,” Kadzik wrote. “Pursuant to the terms of a treaty in place between the United States and Argentina and Argentine law and practice, the extradition request is under review by Argentine judicial authorities.”Kadzik continued: “Given the adverse nature of the extradition proceedings in Argentina, the process can be lengthy, particularly if as in this case a fugitive exercises his right to contest the extradition. I can assure you however that (the Office of International Affairs) is in regular communication with its Argentine counterparts and will keep the Pennsylvania prosecutor apprised of the developments in the case.”Said Barletta: “It’s good to know that the Department of Justice is on the case, and I share their frustration about the length of time this extradition process is taking. It’s already been about 11 months since Mr. Franklin was arrested in Buenos Aires, and we’re told that the extradition, including an appeals process, could take as long as three years. Each day that passes is a day without justice for the family of Frank Spencer.”Barletta said he thanks Marino for his assistance in pursuing the interests of Columbia County “and I pledge to stay active until Mr. Franklin is brought home to face his murder charges.”
Archive for the ‘ARGENTINE UPDATE’ Category
“The history of CELS”:a failed narrative
[a reply from the Mignone Family — ]
Wednesday, August 19, 2015
The history of CELS: a failed narrativeBy I. Mignone, M. Mignone & J. MignoneLast Sunday, the Herald ran an interview with journalist Santiago O’Donnell, author of Derechos Humanos®, a book that tells the story of the CELS human rights organization and its founders, including Emilio Mignone. Below is a reply from his family:The Sudamericana-Random publishing house recently released the book Human Rights, The History of CELS, from Mignone to Verbitsky, from Videla to Cristina, written by journalists Santiago O’Donnell and Mariano Melamed. The Centre for Legal and Social Studies (CELS), like any other institution, should be analyzed critically. But one would hope that a task of such importance for our society would meet those same standards. Unfortunately, this book represents such a low quality of journalism that it undermines its validity.The writers of this opinion piece have been witness to several key incidents that the authors narrate. In sections of the book that retell several events where we were direct witnesses or were present, we discovered no less than 50 errors. If this were to be extrapolated to the rest of the book — something that we can’t know for certain but consider probable — it makes the credibility of this simplistic narration of events highly doubtful.To demonstrate this, we focus on two incidents that the authors narrate that simply did not occur, and are used to indirectly support the book’s premise. They are incidents that occurred on the dawn of May 14, 1976, when our sister Mónica Mignone was kidnapped by the Navy. The authors first state that during the sting operation, Mónica Mignone “suggested escaping through the back door.” And that after that our father, Emilio Mignone, stopped her and told her “to keep calm and don’t escape, I will fix this.” Two of the three signatories of this letter were present during the military operation, and not at any moment was an escape suggested nor were the statements reported expressed.Furthermore, Mignone’s testimonies were given under oath at the trial of the military Junta, where he gave the complete details about the military operation, and he did not at any time express something similar to what the authors state.It’s not clear why the authors wrote these fallacies, and it’s pointless to try to understand their underlying intentions. However, if we must give an opinion about the final product, there are two possibilities. Either the authors aren’t serious journalists, or these errors are part of a narrative aimed at re-introducing the theory of the two demons, or both.We are surprised that this book was written with such little rigor, it is a text that constructs narratives from interview transcriptions, without corroborating with other testimonies or documentation. For example, many of the chapters appear to be fixed pastiches geared towards supporting the authors’ previously held premise, instead of using evidence to confirm or refute these premises. The authors ignore one of the basic criteria of professional journalism, which is using various sources to corroborate as best as possible the events they narrate. This is without mention of the little attempts at analysis which are so banal that they are embarrassing.Ironically, in our opinion, the book in general terms, leaves our father’s reputation intact. But that isn’t what is important. What is fundamental is that a book that narrates the history of CELS has a minimum amount of rigour.In particular we had hoped, like Mignone suggested days before his death to the person who would write his biography, that it be done with “independence of criteria, intellectual integrity, and depth.” Unfortunately this book about CELS lacks precisely these principles
Thursday, August 20, 2015
1. POPE FRANCIS HOLDS SIGN URGING FALKLAND ISLANDS DIALOGUE, CAUSES STIR IN ARGENTINA (The Washington Post)1. POPE FRANCIS HOLDS SIGN URGING FALKLAND ISLANDS DIALOGUE, CAUSES STIR IN ARGENTINA (The Washington Post)By Rosie ScammellAugust 20, 2015VATICAN CITY — Pope Francis was unwittingly thrust into the center of a long-running diplomatic dispute between Argentina and the U.K. after holding a sign calling for dialogue over the Falkland Islands.The Argentine pontiff was greeting pilgrims at the Vatican’s Paul VI audience hall when he was photographed holding a Spanish-language sign reading: “It’s time for dialogue between Argentina and the UK about the Falklands.”The two countries fought a brief war in 1982 over the Falkland Islands, or Malvinas in Spanish, during which over 900 people were killed. Although the U.K. ultimately won the war, Argentina continues to claim sovereignty over the islands, which are off its southern coast.Francis’ inadvertent gesture of support for renewed talks between the two countries inevitably caused a stir in his home city, Buenos Aires, with Argentine President Cristina Kirchner posting the pope photograph on Twitter. So too did Argentina’s foreign ministry, writing: “Pope Francis receives the Argentina-UK pro-dialogue message.”But the Vatican played down the significance of the moment, saying the pope had no idea what was written on the sign. “The Holy Father did not even realize he had taken this object in his hands. He has discovered this just now after seeing the photograph,” the Vatican said in a statement.The U.K. foreign ministry was not immediately available to comment.By Mark P. JonesAugust 20, 2015All is not well in Argentina. The economy is stagnant, the fiscal deficit unsustainable and growing, foreign and domestic investment meager, inflation running at 30 percent, drug-related violence rising and the country remains an outcast in the international financial community.In the midst of this, on Aug. 9, Argentina started the nation’s three-step process of choosing its next president. Because of term limits, President Cristina Fernández de Kirchner will be stepping down on Dec. 10. She has been in office since 2007 after taking the reins from her husband, Néstor Kirchner, who was in office from 2003 to 2007, and then passed away in 2010. Under the Kirchners, Argentine foreign and domestic policy shifted to the left, with a significant deterioration in diplomatic relations with the United States and a dramatic increase in the government’s role in the Argentine economy.The Aug. 9 primaries weren’t like U.S. primaries. Everyone already knew the names of the nominees for the country’s three leading national alliances of political parties. Rather, the Argentine primaries matter because they are the best way to know the level of popular support for the leading presidential candidates. Trust in published opinion surveys in Argentina is low, both because some perceive political motivations behind their publication and because they have a less than stellar record in predicting recent elections.What’s more, Argentina’s primaries are mandatory (for parties/alliances), compulsory (for voters 18-69), national (one date in all provinces), internally uncompetitive and held merely 11 weeks before the general election—making them a good gauge of national sentiment.Argentina’s federal elections explained: process, parties, playersThe 2015 Argentine federal election process will have either two or three stages. First were the primaries on Aug. 9. Party alliances must have won at least 1.5 percent of the votes cast in this election to qualify their presidential candidate for the next ballot round.Next come presidential and congressional elections on Oct. 25. If necessary, the top two candidates will have a runoff on Nov. 22. That will become necessary if no presidential candidate receives more than 45 percent of the valid vote–or if no candidate receives at least 40 percent but has a margin of victory that’s more than 10 percent above that of the second-place candidate.Eleven political alliances participated in the Aug. 9 primary. Three had contested primaries, but only in one was there doubt about the victor in a single primary (that of the small Left Front). In Fernández de Kirchner’s Front for Victory (FPV) alliance, Daniel Scioli, governor of the province of Buenos Aires, was the sole candidate. In the centrist We Can Change alliance, the marquee candidate was City of Buenos Aires mayor Mauricio Macri. In United for a New Alternative (UNA), the headliner was Sergio Massa, a national deputy from Buenos Aires province.Both Scioli and Massa belong to the country’s large and robust Peronist movement, which originated during the first presidency of Juan Domingo Perón (1946-55) and the brief but indelible political and social activism of his spouse, Evita Perón. Peronists occupy positions across the ideological spectrum from the center-left to the center-right, but share a common history linked to Perón and Evita, a support base anchored in the working class and poor, and a goal of obtaining and then maintaining political power by almost any means necessary. Scioli is a leading figure in the movement’s pro-Kirchner wing and Massa in its anti-Kirchner wing, with Scioli supportive and Massa critical of the current policies of President Fernández de Kirchner.Although We Can Change has some Peronist members, it primarily includes most of the non-Peronist opposition political forces in the country, including the Radical Civic Union (UCR), the country’s traditional counter-weight to Peronism, and Macri’s Federal Proposal (PRO).What did we learn from the primary?In the primary, the FPV finished first with 38.4 percent of the valid vote (less than expected), all won by Scioli.We Can Change placed second at 30.1 percent, with Macri contributing a lion’s share (24.3 percent) followed by candidates from two of the other alliance members: Ernesto Sanz of the UCR (3.5 percent) and Elisa Carrió of the Civic Coalition (2.3 percent).Rounding out the big three was UNA, which garnered a greater share than expected, 20.6 percent. Massa (14.2 percent) easily defeated Córdoba governor Jose Manuel de la Sota (6.4 percent).Three other alliances crossed the 1.5 percent minimum threshold required to earn a place for their candidate on the October ballot: Margarita Stolbizer (Progressives), Nicolás del Caño (Left Front), Adolfo Rodríguez Saá (Federal Commitment).In all, the mainstream opposition candidates garnered a combined 56.3 percent of the vote to Scioli’s 38.4 percent. Underscoring Peronism’s broad electoral appeal, across four separate alliances the five candidates who identify as Peronists (Scioli, Massa, De la Sota, Rodríguez Saá, Victor De Gennaro) garnered a combined total of 61.6 percent of the vote.
The results of the 2015 Argentine presidential primary election.
(Data: Dirección Nacional Electoral, Argentina; Table: Mark P. Jones)What is the frontrunner doing to win it all in the next round?Scioli’s most realistic hope of avoiding a runoff in October is to win a share of the vote that is at least 40 percent and is 10 percent more than that obtained by the first runner-up. On Aug. 9, he achieved neither of these goals.And yet Scioli still has a reasonable chance of a first round victory on Oct. 25, for two reasons. First, Scioli is expected to keep virtually all of his primary vote, and therefore needs a relatively modest boost to pass the 40 percent barrier and achieve a 10 percent gap between himself and the second place candidate. One viable option for getting there is to seek high-profile agreements with a handful of leading politicians. Another is for his delegates to craft thousands of minor informal agreements with UNA-aligned Peronists throughout the country.Most observers believe Scioli will pursue two high-profile agreements. The first is with De la Sota’s successor in Córdoba, governor-elect Juan Schiaretti. That would give Scioli a shot at taking votes away from UNA and its general election candidate, Massa, since nearly half De la Sota’s votes in the UNA primary came from the province of Córdoba. Córdoba is in rough economic shape. If Schiaretti concludes Massa does not have a realistic chance of making the runoff, he may strike a deal with Scioli, trading his endorsement and get-out-the-vote help from the state’s Peronist political machine in exchange for a pledge of financial aid for the province.The other possible high-profile deal would be between Scioli and Rodríguez Saá, who might drop out and back Scioli in exchange for financial support for the province of San Luis. Rodríguez Saá and his brother have ruled San Luis in a quasi-feudal manner since Argentina’s return to democracy in 1983.But below the national radar, Scioli’s operatives will be pursuing a myriad of other potential deals. Many Peronists value government posts and access to state and private resources and power above ideology, policy and personal ties. Scioli’s people will approach Massa’s backers, promising future government positions, contracts and resources in exchange for defection and support in October. These Peronists strongly prefer Massa to Scioli. But if by mid- to late-September they believe Massa will not be able to come within striking distance of Macri for a spot in the runoff, some are likely to switch their fealty to Scioli.Second, while the distance between the FPV and We Can Change was less than 10 percent, the vote gap between Scioli and Macri (14.1 percent) was greater than 10 percent. In October only Macri will be on the ballot, not Sanz and Carrió. Research by Ernesto Calvo and Andrés Malamud on Argentine provincial elections would lead us to expect not all primary votes cast for Sanz (in particular) and Carrió to automatically end up in Macri’s column in October.All that assumes, however, that Massa doesn’t gain momentum. If he begins to look like Scioli’s most likely rival in a runoff, Scioli would reap far fewer agreements and defections. And if We Can Change and UNA form an alliance—pulling together an accord on core public policies and inter-party consultation and support if either Macri or Massa wins—Scioli might also be in trouble. Such an agreement would attenuate, though not fully eliminate, shifts in UNA support to Scioli while also easing voters’ concerns that Macri, if elected, would be unable to govern due to the limited number of seats We Can Change will have in the Argentine Congress (less than a third in both houses), the small number of provinces (less than a quarter) where it will hold the governorship, and its limited ties with Argentina’s powerful Peronist union leaders.How will the result affect Argentina?In short, the primary told us what we already know: Daniel Scioli is the front-runner in the race to become the next president of Argentina. But at the same time, it reminds us that Scioli still has a lot of work ahead if he is to avoid a November runoff. That’s important for his chances. In a November runoff, voters who backed opposition candidates on Aug. 9 would outnumber those who cast a ballot for Scioli—and they wouldn’t be dividing their support among several candidates.Among the three candidates, Scioli proposes the most continuity with and least change from the policies of President Fernández de Kirchner and Macri the least continuity and most change, with Massa occupying an intermediate position between the two. As a result, the outcome of this fall’s (spring in Argentina) electoral process will have a profound impact on the extent to which Argentina adopts more market-friendly policies and endeavors to foster better relations with the United States during the remainder of the decade.Mark P. Jones is the Joseph D. Jamail Chair in Latin American Studies and the James A. Baker III Institute for Public Policy’s Political Science Fellow at Rice University.By Arturo C. Porzecanski, American UniversityAugust 20, 2015During the past dozen years, Argentina has been a destabilizing economic force within South America. While the governments of Néstor (2003-07) and Cristina Kirchner (2007-15) have not meddled in the internal affairs of other countries in the way that Venezuela did under the late Hugo Chávez, their highly populist and nationalistic policies have had adverse repercussions on Argentina’s neighbours.For example, a decade ago Argentina defaulted on a 1995 commitment to export natural gas to Chile, and did so in order to keep its domestic market amply supplied and thus at lower gas prices. As a result, Chile had to scramble to find alternative energy providers, and the country had to increase its dependence on then-expensive imported oil.Uruguay has been negatively affected ever since Argentina imposed currency controls in 2012, which have discouraged the arrival of Argentine tourists seeking to vacation in Punta del Este and other beach resorts. In order to entice Argentines to keep coming, the government exempted from VAT all spending by tourists, and granted a partial rebate on property rental expenses. These measures have had a fiscal cost, and yet tourist arrivals from Argentina have never fully recovered.Brazil has been hit in various ways. In early 2012, Argentina imposed an import control system requiring prior approval of nearly every purchase from abroad, a regime since found to be illegal by the World Trade Organization – but one which has not been dismantled.Relative to the peak import year of 2011, Argentine imports through mid-2015 have since dropped by over twenty percent, yet despite the preferential access provided by Mercosur, the supposedly free-trade area to which both countries belong, Brazil’s exports to Argentina have since collapsed by over forty per cent.Brazilian-owned banks and companies resident in Argentina have also suffered in recent years because of the country’s economic stagnation since 2011, the imposition of price controls on retailers since early 2013, the difficulty to obtain imported inputs, and a de facto prohibition on profit remittances to parent companies.By now capital controls have blocked many billions of dollars of intended remittances by multinational companies operating in Argentina. The Brazilian business community is angry that both exports to, and sales within, Argentina have taken such a turn for the worse, and it has been lobbying Brasília to get tough with Argentina.Brazil has also been thwarted by Argentina in its decade-long attempt to reach a free-trade deal with the European Community. Paraguay and Uruguay, the other Mercosur partners, have been willing to make the necessary trade-liberalising concessions, but Argentina has been recalcitrant, effectively vetoing any progress.This has caused enormous frustration in Brazil’s business community, which regards a trade deal with Europe as low-hanging fruit. This is why Renan Calheiros, the president of Brazil’s Senate, has recently proposed to Finance Minister Joaquim Levy that Brazil should move ahead in these negotiations on its own.Moreover, Brazil has expended substantial political capital defending Argentina’s rogue behaviour in various multilateral venues. At the IMF, for instance, Brazil’s representative has had to work overtime in recent years to build a coalition of emerging countries supportive of minimal sanctions on Argentina for its persistent violations of Articles IV and VIII of the Fund’s Articles of Agreement.These spell out that member countries are obligated to allow for Fund surveillance over their exchange-rate and related policies, and to submit accurate economic data to enable the Fund to carry out its duties. As a result, Brazil has come to be perceived as tolerant of rule-breaking attitudes.Given the recent downward spiral in investor and rating-agency confidence in Brazil – a plunging currency, widening bond spreads, stubborn inflation expectations, and the threat of a downgrade to “junk” status – it would be to the advantage of the embattled government in Brasília to encourage the front-runners for the presidency in Argentina (Daniel Scioli and Mauricio Macri) to signal that they will behave in a sensible and constructive manner once one of them is voted into office in October and takes charge in December.The quickest potential win for Argentina and its neighbours would be for the new government in Buenos Aires to open negotiations, and reach a settlement, with all of its defaulted creditors – the ones who have won court judgments as well as those who have sought justice in arbitral tribunals like the International Centre for Settlement of Investment Disputes (ICSID).Reaching such a settlement would enable the new administration to regain access to the international capital markets and to stop relying on the central bank of Argentina for pesos to finance the budget deficit and for dollars to make debt-service payments. The former has been feeding inflation and the latter has been undermining the country’s international reserves.The private sector in Argentina, including multinationals operating there, would also benefit greatly from a normalisation of financial relations. Banks and companies would again be able to obtain credit and sell shares abroad, and the resulting capital inflows would pave the way for the new government to abolish the tangled web of controls on imports, remittances, and other transactions involving foreign exchange. Such a sensible liberalisation, in turn, would greatly deflate most of the tensions between Argentina and its neighbours – especially vis-à-vis Brazil.Justified optimism on the emergence of a new, business-friendly Argentina would also have the potential to improve investor attitudes toward Brazil. Of course, said attitudes are largely dependent on what happens inside of Brazil in the months to come, but it is not inconceivable that good news coming out of Argentina could rub off on sentiment about Brazil. Contagion effects are not always negative.Professor Arturo Porzecanski is director of the International Economic Relations Programme at American University, Washington DC. From 2000 to 2005, he was head of emerging markets sovereign research at ABN Amro.August 20, 2015BUENOS AIRES, Argentina — Pope Francis raised eyebrows in his homeland of Argentina on Wednesday after being photographed in Rome holding a sign advocating for dialogue over the disputed Falkland Islands.After his general audience appearance Wednesday, several news agencies shot pictures of Francis holding a sign that read: “It’s time for dialogue between Argentina and the United Kingdom over the Falkland Islands.”However, Francis apparently was not purposely wading into the dispute. Father Tom Rosica, special assistant to the Director of the Holy See Press Office, released a statement saying that the “poster was handed to the Pope and he had no idea what the item was.”“The Holy Father did not even realize he had this object in his hands,” the statement said. “He has discovered this just now after seeing the photograph.”While archbishop of Buenos Aires, the Rev. Jorge Bergoglio, as he was known then, sometimes spoke in nationalistic terms about the islands. Since becoming pope in 2013, however, Francis has refrained from talking about the dispute.Soon after the photo began to show up on local websites, Argentina’s foreign ministry tweeted that the pope “had received a pro-dialogue message” for Argentina and Britain.Argentine President Cristina Fernandez also tweeted a few of the photos to her nearly 4 million followers with the hashtag #MalvinasArgentinas, referring to the islands’ Spanish name.#MalvinasArgentinas @Pontifex_es pic.twitter.com/vxewfUd1rS— Cristina Kirchner (@CFKArgentina) August 19, 2015In 2013, Fernandez formally asked the pope to intervene in the dispute, though he never has.The Argentine army seized the islands in 1982 only to be defeated by a British force, but Argentina still claims sovereignty over the South Atlantic territory.The issue always strikes a nerve in this country of 41 million people. But Britain has repeatedly said the question of sovereignty has been decided. In a 2013 referendum, the vast majority (99%) of Falkland residents voted to remain a British territory. According to a 2012 census, the islands have a population of about 2,563 people.By Charlie DevereuxAugust 20, 2015Argentina’s black market peso fell to its lowest in 10 months on expectations that a new government in December will have to devalue the official rate which is strictly controlled by the central bank.The street value of the peso weakened 0.98 percent to 15.3 pesos per dollar, according to Ambito. That compares with an official exchange rate of 9.25.While the majority of emerging market countries from China to Brazil are weakening their exchange rates to remain competitive, President Cristina Fernandez de Kirchner’s administration is refusing to accelerate the pace of depreciation of the peso ahead of Oct. 25 elections where the front-runner is from her party. The next government, which takes over Dec. 10, will have to address the overvalued exchange rate, according to Fausto Spotorno, chief economist at Orlando Ferreres & Asociados.“There’s a significant expectation of devaluation,” Spotorno said by phone from Buenos Aires. “The next government will have to adjust the exchange rate and that will probably have a negative impact on inflation.”Central Bank President Alejandro Vanoli, who took over in October to stem a drop in reserves and arrest the sinking of the peso in the black market from a record 15.95, insists the currency is not overvalued.While Vanoli managed to increase gross reserves by tapping $8 billion of yuan from a China swap agreement and by adding foreign currency from grain exports, the harvest season is now ending and there will be fewer dollars, said Maximiliano Castillo, director of Buenos Aires-based economic consultancy ACM.The government, which is locked out of international capital markets due to a legal battle with hedge funds seeking payment on defaulted bonds, faces a $6.3 billion debt payment on Oct. 3. That’s currently about 19 percent of reserves.Since devaluing the official peso rate 20 percent in January 2014, the government has let the currency weaken just 13 percent compared with a tumble of 29 percent for Brazil, its largest trading partner.As recently as April, the peso in the black market traded at 12.38 pesos per dollar. Due to restrictions imposed in 2011, Argentines turn to the street market to obtain foreign currency when the government doesn’t give them authorization to buy at the official rate.“The surprise for me was that the government was able to maintain exchange rate stability until June,” Castillo said. “I don’t believe the conditions are there for the gap to be reduced. On the contrary, the conditions are there for the gap to widen.”By Sarah Marsh and Nicolás Misculin20 August 2015BUENOS AIRES, Aug 20 (Reuters) – Argentine President Cristina Fernandez said on Thursday she was sending a draft law to Congress making it harder for the government to sell state stakes in local firms, two months before elections seen bringing a more market-friendly leader to power.With Fernandez barred from a third consecutive term, the two main candidates are her ruling party’s Daniel Scioli and the PRO opposition party’s Mauricio Macri. Both are expected to move away from her interventionist policies, to varying degrees.The new law would create an agency to administer the state’s stakes in companies as diverse as regional banks and media conglomerate Clarin. It would require the governments to get two-thirds approval in congress if it wanted to sell a stake.“It is very important that this .. is a guarantee so no one else can frivolously dispose of Argentines’ patrimony,” Fernandez said in a broadcast speech.“We are not preventing them being sold, but they should only be sold after a debate.”Fernandez has expropriated several companies over the years, including a water company, the oil company YPF and the country’s biggest airline, Aerolineas Argentinas. The state also acquired a number of stakes in companies when it nationalized its private pension system.This policy which scared off international investors was popular at home. Many Argentines fear that if Macri won October’s elections, he could return them to the neoliberal policies and privatizations of the 1990s.Macri, the conservative mayor of Buenos Aires city, is campaigning on a mandate to unwind state controls on the currency and trade that critics blame for stunted investment and stalled growth in Latin America’s No. 3 economy.Scioli has promised more gradual change than Macri.Fernandez used the example of recent privatizations in Greece under the terms of its international bailouts to illustrate the need for the law. The crisis in Greece has prompted political turmoil, pushing Prime Minister Alexis Tsipras to resign earlier on Thursday.“Tsipras is gone while Germany is left with 14 Greek airports because the process of privatization has started,” she said, making a jab at Germany which has been more insistent on the bailout terms than other creditors.Greece confirmed earlier this week it would award concessions to run 14 regional airports to Germany’s Fraport as part of its bailout terms.“This scenario is repeated tragically and terribly everywhere,” she said. “We will send this law to congress precisely because we do not want this to happen in Argentina.”22 August 2015Latin American women are making great strides. The culture is not keeping up“CRISTINA’S pleasure” blared the cover of a 2012 edition of Noticias, a tabloid news magazine in Argentina. A caricature of the country’s president, Cristina Fernández de Kirchner, seemed to show her in mid-orgasm, her head thrown back, her mouth open. “Every day she seems more confident, sensual and even shameless,” the story went on. For further enlightenment, readers were invited to watch an animated video online of the president masturbating.Good taste is not how tabloids sell copies in any country, but it is hard to imagine a British red top describing a female politician quite so crudely. The treatment of Ms Fernández in Noticias points to a Latin American paradox. Women have made great progress towards equality with men, especially in schools, workplaces and politics. But social attitudes have changed more slowly. Women’s ambitions are often belittled; hostility towards them is common. Raw statistics tell a story of female advancement; machista culture has yet to catch up.In the past quarter-century, the proportion of women in the workforce has risen more in Latin America than in any other region (see chart 1). True, they typically hold jobs that require little skill and pay low salaries: domestic work is the largest source of female employment. But women now spend more years in school than men, which suggests that their prospects will improve. A handful have climbed to the top of the corporate ladder. Women lead Rede Energia, one of Brazil’s biggest electricity companies, and B2W, its biggest online retailer. Isela Costantini runs General Motors’ operations in Argentina, Uruguay and Paraguay.Women are still scarce in Latin American boardrooms (see chart 2). Not in politics, however. A quarter of legislators in the region are women, compared with one in seven in 2003. Several countries, including Argentina, Brazil and Mexico, have adopted quotas for women on parties’ lists of candidates. In the past decade, voters have elected women to the presidencies of Brazil, Chile and Costa Rica as well as Argentina, where Ms Fernández succeeded her husband, Néstor Kirchner, who later died.Yet Latin Americans are less likely than people in any other region to say that women are treated with dignity. Only a third say women are respected, around half the share who think so in the Middle East and Africa, according to a Gallup poll. In Peru and Colombia (where corporate bosses are more likely to be female than in any other Latin American country), just a fifth of people say women are appreciated.The higher expectations of Latin American women may explain part of the difference with other regions. They are more educated than African and Middle Eastern women, and so are probably angrier about inequality. But it may also be that their success is provoking a backlash. Men have a “misconception that the pie is only so big”, says Louise Goeser, chief executive of Siemens Mesoamérica, a big engineering firm. They think that if they “give pieces away, there’ll be less for them.”In 2009 48% of Latin Americans thought that women who earn higher salaries than men “would have problems”, according to Latinobarómetro, a polling group. That was up from 36% five years before. The share of people saying “men make better political leaders” and “a woman’s place is in the home” also rose slightly. The survey was conducted while Ms Fernández and Michelle Bachelet, Chile’s president, were serving their first terms. Electing women to high office is apparently no cure for sexism.Mucho machismoIt can be found anywhere. In Latin America it feeds off a culture of machismo, a chest-thumping sort of masculinity that can either smother women in domesticity or degrade them. Successful women brim with tales of the insensitivity and cluelessness they encounter. Ms Goeser says that for years invitations to conferences came addressed to “Señor Goeser”. The boss of a Brazilian multinational recalls that earlier in her career higher-ups would ignore her at meetings until conversation turned to the cosmetics industry. Alil Álvarez Alcalá, a Mexican lawyer, worked at a firm for ten years before she plucked up the nerve to ask to be made a partner. Her boss looked befuddled and asked, “Is your husband’s job not going well?” She quit soon after and formed her own firm.Working women bear the “double burden” of housework: on average, they do two to five times as much of it as their lazier mates. Even the most assertive women find themselves going along with convention. Hinde Pomeraniec, an Argentine journalist who co-founded Ni Una Menos (Not One Less Girl), an anti-violence movement, catches herself asking her daughter to help clear the table and clean the house before asking her sons.Institutions reinforce such habits. Boys play football in after-school programmes; most girls go home. That matters. Girls who play sports get better grades and hold better jobs as adults than those who do not, according to a study by Barbara Kotschwar of the Peterson Institute for International Economics.Machismo can terrify as well as discourage. “It’s hot here, but wearing a skirt or dress is asking for trouble,” says Nelsy Gutierrez, a middle-school teacher in El Salvador. Young women who venture out in cities on foot can expect a chorus of lip-smacking and shouts of “ay–how delicious” from motorists and construction workers. The problem is so widespread that legislatures in Argentina, Chile, Panama and Peru have passed or at least debated laws to ban catcalling.The unruliest men kill and injure women as well as each other. Three-quarters of countries with “very high” murder rates for women are in Latin America and the Caribbean, according to the Small Arms Survey carried out by the Graduate Institute of International and Development Studies in Geneva. El Salvador has the world’s highest “femicide” rate, of 14 per 100,000 women. In Bolivia 52% of married or formerly married women say they have been physically or sexually abused by their partners. In Colombia and Peru that rate was a hardly comforting 39%.Few feministsThe flip side of machismo is a traditional notion of femininity, which many Latin women embrace. At 15 girls are swathed in silk for lavish quinceañera parties. Of the past ten women who have been crowned Miss Universe, six have come from Latin America (including Puerto Rico). Even politicians play up their girlishness. Ms Fernández talks often of her love of clothes. “I was born made up,” she once said.Many women think femininity is at odds with a belief in women’s equality, though it need not be. Feminism is thus a marginal creed in Latin America. Even female leaders less coquettish than Ms Fernández are reluctant to declare themselves to be feminists, for fear of being branded man-haters. That may be one reason why they have done less for women than many feminists had hoped.Ms Bachelet, who was head of UN Women after her first term as president, has tried harder than the others. Her government recently created a women’s ministry and introduced a law that would decriminalise some abortions during the first 12 weeks of pregnancy. (Abortion is illegal in most cases in 18 out of 21 Latin countries.)By contrast Dilma Rousseff, Brazil’s president, has introduced fewer pro-women laws than her (male) predecessor. Ms Fernández has been a bust, say feminists. Male politicians seem to have an easier time espousing policies they approve of. Uruguay passed one of the region’s most liberal abortion laws in 2012, under the administration of José Mujica.There are signs, though, that attitudes may at last be starting to change. In Ecuador, young men who call themselves the Cascos Rosa (Pink Helmets) lead workshops in schools to encourage respect for women and girls. In Argentina, Varones Antipatriarcales (Anti-patriarchal Men) rally against violence (and for legal abortion). In June this year, hundreds of thousands of people in Argentina, Chile and Uruguay joined a day of protest against violence against women organised by Ms Pomeraniec and other Argentine journalists.Governments are starting to do a better job of fighting violence and promoting women’s equality at work. At least 13 countries have established specialised police stations to encourage women to report assaults. This year Brazil enacted a law that stiffens punishments for men who murder their wives or girlfriends. Chile extended paid maternity leave in 2011 (under a male president) and Colombia’s Congress is considering a similar measure.Businesses are beginning to improve conditions for working women. In a survey conducted by McKinsey, a consultancy, 37% of firms said gender diversity was a top priority in 2013, up from 21% in 2010. All this is encouraging. But it may be a while before Latin America’s culture catches up with the achievements of its women.By Charles Newbery20 August 2015Buenos Aires (Platts)–20Aug2015/1106 am EDT/1506 GMT Argentina’s gasoline prices have shot up between 8.5% and 10% this year, even as global oil prices have declined, a report showed.Claudio Lozano, an opposition congressman, published the report late Wednesday, days after state-run YPF and other fuel retailers made the latest increase of 2.5% in pump prices.Lozano said the steady hikes have pushed up gasoline prices 109% since June 2014, even as international oil prices have dropped around 45% to $45/b over the same period.After years of keeping caps on energy prices, the national government late last year fixed light crude prices at $77/b despite the volatility on global markets. The aim was to spur investment in developing maturing fields and shale resources, a key to rebuilding production after more than a decade of decline, government officials said at the time.Oil production has started to recover. After dropping by 37% to a low of 532,000 b/d in 2014 from 843,000 b/d in 1998, it inched back to an average of 533,000 b/d in the first half, according to the Argentine Oil and Gas Institute, an industry group.Analysts say that high pump prices are key for YPF to finance investments in shale developments, where it has increased production to 43,000 b/d of oil equivalent since starting in 2012.YPF has a 55% share of gasoline sales, and its main competitors are Shell, Axion Energy, Oil Combustibles and Petrobras.Lozano said the impact of the national energy policy is higher pump prices for motorists at a time when inflation is running at 30% annually. According to GlobalPetrolPrices.com, Argentina now ranks second in Latin America for the highest gasoline prices at $1.34/liter. It trails Uruguay at $1.48/liter.
The situation could become as bad as the crisis seen recently in Greece, but put U.S. investors’, rather than German share and bondholders, at risk. “Greece capitulated, but it is Europe that was defeated,” an op/ed in LeMonde Diplomatique, the English-language edition of the French daily, LeMonde, this week said.
“The Scion and the Heir,” The Economist, August 1, 2015.
4. NOT ON THE BALLOT, BUT ARGENTINA’S PRESIDENT HAS DOMINATED RUN-UP TO SUNDAY’S OPEN PRIMARIES (U.S. News and World Report)5. TANGO WITH CREDITORS TAKES A TWIRL — ARGENTINE OFFICIALS INDICATE POSSIBLE THAW, BUT A SETTLEMENT ISN’T YET IN SIGHT (The Wall Street Journal)7. PA. MAN UNEARTHED DINOSAUR NOW A PITT PROF, HE HELPED TO FIND PATAGONIAN GIANT (Pittsburgh Post-Gazette)By Jonathan Gilbert10 August 2015BUENOS AIRES — Argentines voted to select presidential nominees on Sunday in a primary election that will gauge the nation’s desire for change after 12 years of the current president’s governing party.That party’s candidate, Daniel Scioli, is vying to succeed President Cristina Fernández de Kirchner, who cannot run for a third consecutive term. Mr. Scioli is widely expected to receive the most votes of any candidate across all parties.Partial returns were not available Sunday, and conclusive results were not expected until Monday.Argentina switched to a primary system in 2011. Voters — not just party members or officials — now decide which candidate from each major party or alliance will run in the presidential election, which will be held on Oct. 25.To avoid fissures in the governing Front for Victory, Mrs. Kirchner endorsed Mr. Scioli, 58, a former powerboat champion who lost his right arm in 1989 when his boat flipped during a race. After her endorsement, other party candidates withdrew.Mr. Scioli’s main rival, Mauricio Macri, 56, was expected to easily overcome challengers within his Cambiemos, or ”Let’s Change,” alliance.Carlos Germano, a political analyst, said that if Mr. Scioli wins about 40 percent of the vote, ”he becomes an extremely difficult figure to overcome on Oct. 25.”Management and Fit, an Argentine polling firm, predicted this month that Mr. Scioli would win 36 percent of the vote and the Cambiemos candidates would receive a total of 31 percent. It surveyed 2,400 people nationwide, and the margin of sampling error was 2 percentage points.Mrs. Kirchner comfortably won elections in 2007 and 2011, but discontent with her administration has increased in recent years. ”The Front for Victory is very strong, but these elections are extremely competitive, unlike anything we’ve seen for a while in Argentina,” Mr. Germano said.To win in October without the need for a runoff, a candidate needs more than 45 percent of the vote, or 40 percent with a lead of more than 10 points. Advisers to Mr. Macri believe he is more capable than Mr. Scioli of attracting voters from beyond his base. Attracting votes from supporters of Sergio Massa, a third candidate who lost momentum after rising to prominence in midterm elections in 2013, will be crucial, analysts said.Mr. Scioli, the governor of Buenos Aires Province, Argentina’s most populous, faces some challenges because of what are widely viewed as moves by Mrs. Kirchner to wield influence over him after she leaves office.Still, many voters here support the governing party because they believe the country is better off today than it was in 2003 after a severe crisis plunged millions into poverty.”The truth is that the country is fine,” said Alexia Charchabukian, 33, a jewelry seller who voted at a school in Chacarita, a gritty neighborhood here. She cited Argentina’s rising middle class and Mrs. Kirchner’s drive to expand social benefits.Mr. Macri, who is the mayor of Buenos Aires, has gained support among voters who have voiced discontent in recent years with what they see as Mrs. Kirchner’s imperious style and other concerns, including accusations of corruption, inflation and perceptions that crime is on the rise.”The country is not doing well,” said Patricia Caneva, 56, a private tutor of English who voted for Alejandro Bodart, a socialist. ”The first term was good, but the second has been a struggle,” she said, pointing to the high inflation and to her irritation with Mrs. Kirchner’s antagonistic tone.The pace of growth here has slowed significantly after a boom from 2003 to 2011.Mr. Macri has said that if he is elected he will maintain some of Mrs. Kirchner’s cornerstone policies, including child benefits, and the nationalization of an oil company and an airline. He would also strengthen public institutions, his aides said, including Argentina’s politicized judiciary and the national statistics institute, whose data has in the past been criticized by the International Monetary Fund.Mr. Scioli is offering continuity, although his aides said he would gradually forge his own policies. He has been helped by the nationwide political machinery of the Front for Victory, while Mr. Macri has had to battle to win recognition beyond Buenos Aires.Daniel Scioli, of the Front for Victory, voted Sunday in Buenos Aires. His party has been in power for more than a decade.By Benedict ManderAugust 10, 2015Argentina’s primary elections on Sunday in which all voters are obliged to vote, set the stage for a tight race in the October presidential elections that will bring an end to eight years of rule by the leftist government of President Cristina Fernández and see the country settle its long-standing fight for holdout hedge fund creditors.With 87 per cent of the ballots counted, Daniel Scioli, the governor of Buenos Aires province backed by the ruling Peronist party, had won 36.5 per cent of the vote, while the opposition alliance led by Mauricio Macri, the mayor of the city of Buenos Aires, had gained 31.4 per cent, with 40 per cent of the ballots counted.Argentina’s electoral system requires all voters, not just party members, to decide which candidate from each major party or coalition will run in the October 25 presidential election. As such its results are widely seen as an early look at the presidential contest’s result.Analysts said that Sunday’s close result raised the likelihood of a second-round run-off presidential vote in November. In order to win outright, the leading candidate needs either 45 per cent of the vote, or 40 per cent with a 10 point margin over the runner-up.Sunday’s tight result allowed each of the leading candidates to claim victory, with Mr Scioli boasting that he had won the most votes and the opposition highlighting that the majority had voted against the ruling party and wanted change as Argentines complain of a stagnant economy and high inflation.“Argentina has found a way. It is evident that with this result there is a clear will to continue advancing towards a great future,” Mr Scioli told supporters, praising Ms Fernández and her late husband and predecessor, Néstor Kirchner, for whom he was vice-president. Nevertheless Mr Scioli, who chose one of Ms Fernández’s closest advisers as his running mate, added that he would “change what needs changing”.Markets are likely to welcome the prospect of a second round, since it would be good news for the business-friendly Mr Macri, who has promised wholesale change. His top priorities include axing currency and trade controls, and reaching a quick solution with “holdout” creditors who are blocking Argentina’s access to international capital markets.The result of a run-off would depend to a large extent on the votes of Sergio Massa, a dissident Peronist whose coalition came third in the primaries with 20.5 per cent. It remains unclear whether Mr Scioli or Mr Macri would benefit more from Mr Massa’s votes in a second round.“Tonight an alternative has been consolidated,” Mr Macri told supporters. “We have to unite, because united we are more.”About 32m people were eligible to vote in the elections, which were marred by heavy rain, especially around Buenos Aires, the capital. The elections will also see half of the chamber of deputies and a third of the senate renewed, as well as several provincial governors.By Hugh Bronstein10 August 2015BUENOS AIRES, Aug 9 (Reuters) – Ruling party candidate Daniel Scioli was ahead in Argentina’s presidential primary on Sunday with 36.8 percent, early results showed, with voters favoring the Buenos Aires governor’s policy of gradual change after eight years of leftist government.Scioli is in outgoing President Cristina Fernandez’s Front for Victory party and has promised to slowly modify her policies, which include heavy state control of the economy.The presidential election, in which Fernandez is banned from running for a third consecutive term, is on Oct. 25.The No. 2 vote-getter on Sunday was Mauricio Macri, the business-friendly mayor of the capital city whose goal is to do well enough in October to force a November run-off. He had 24.7 percent of the primary vote with 24.5 percent of ballots counted. The early results were seen as neutral for the markets.Macri competed with two less popular members of his Cambiemos, or “Let’s Change,” coalition. Let’s Change as a whole captured 31.2 percent. Scioli ran unopposed in the Front for Victory primary.Ignacio Labaqui, who analyses Argentina for Medley Global Advisors, said Macri’s coalition needed at least 30 percent on Sunday for him to stay in serious contention.Each party chose its presidential candidate in the primary but, with voters free to cross party lines, Sunday’s vote served as a dry run ahead of the October election. To win outright in October, a candidate needs 45 percent of the vote or 40 percent with a 10-point margin over whoever places second.Both Scioli and Macri are former businessmen with more orthodox policies than Fernandez, whose high public spending has drained fiscal accounts and fueled inflation while currency and trade controls slowed investment.Macri vows to quickly free the markets. Scioli says “gradualism” is the best way to open the economy while preserving the strong social safety net weaved together by Fernandez since she first took power in 2007.Scioli said in a speech after Sunday’s vote he would “continue the programs that need to be continued and change what needs to be changed in order to keep advancing.”The governor has revealed few details of his program, as he treads carefully to lock in Fernandez’s left-leaning base without alienating the wider electorate.Macri vows to scrap currency controls and grains export curbs, and to negotiate an end to the U.S. court battle with holders of non-paying sovereign bonds that has hobbled Argentina’s finances by keeping it in default.Argentina is the world’s third-biggest soybean exporter and a major supplier of wheat to neighboring Brazil.The bond market had been set to rally at any sign of a stronger-than-expected primary performance by Macri. But Alejo Costa at Buenos Aires investment bank Puente said the preliminary results were in line with expectations and had already been largely priced into bonds.Fernandez’s policies have fueled one of the world’s highest inflation rates, but poor voters who have benefited from state largesse over the past eight years remain loyal to her. She could return as a presidential candidate in 2019.Congressman Sergio Massa placed a distant third in Sunday’s primary with 12.1 percent.Whoever is elected Argentina’s next leader will need to carefully loosen controls that Fernandez has put on Latin America’s third-biggest economy as it confronts tough trade condition, said Walter Molano, emerging markets analyst at U.S.-based BCP Securities.4. NOT ON THE BALLOT, BUT ARGENTINA’S PRESIDENT HAS DOMINATED RUN-UP TO SUNDAY’S OPEN PRIMARIES (U.S. News and World Report)By Peter PrengamanAugust 8, 2015BUENOS AIRES, Argentina (AP) — Cristina Fernandez isn’t on Sunday’s presidential primary ballot, yet the influence of Argentina’s leader is all around it.The populist president known for fiery rhetoric and withering critiques of political opponents has been dictating the tempo of the campaign, buoyed by rising popularity despite a sluggish economy and a scandal that rocked her administration. Barred from seeking a third consecutive term, she is making clear she will wield her clout through the Oct. 25 election and possibly beyond.Opposition candidates have gone from criticizing the spending behind Fernandez’s social welfare policies, including energy and transportation subsidies and perks for poor, single mothers, to instead talking about modifying the programs or even building on them.“Previous presidents at this point were lame ducks. Fernandez is not,” said Maria Victoria Murillo, a professor of political science at Columbia University and an expert on Argentine politics. “She continues to be very effective.”Sunday’s open primaries largely will be a trial run for the leading presidential candidates, who have all but won their party’s nominations. Voters also will select nominees for several governor and congressional seats. A candidate must get at least 1.5 percent of the total votes cast for that race in all the primaries to advance to the general election, effectively eliminating many minority party candidates.The vote comes at a time when the South American nation of 41 million people is struggling. Independent economists put inflation at more than 30 percent, the Argentine peso has devalued sharply against the U.S. dollar in recent months and a long-standing dispute with a group of U.S. hedge funds has left the country shunned by foreign investment.The major candidates have addressed these issues during heavily scripted events, but have been notably light on details about how they would solve them.Daniel Scioli, the governor of the Buenos Aires province and a former vice president, is the governing party candidate vying to replace Fernandez. Mauricio Macri, the outgoing mayor of Buenos Aires and former president of the Boca Junior soccer club, is leading the opposition. Sergio Massa, who has held Cabinet and elective posts, is running on his own ticket after breaking with Fernandez’s political movement, known as Kirchnerismo.Scioli is up by as many as 10 points over Macri in recent polls, a significant bump after the two spent months in a tight race. The rise partly coincides with Scioli’s June decision to name Carlos Zannini, one of Fernandez’s closest aides, as his running mate. In exchange for picking Zannini, Scioli received Fernandez’s endorsement and the two began campaigning together.For both Scioli and Macri, the primaries provide a chance to test their strategies. If Scioli wins by a big margin, he’ll likely continue to embrace Fernandez. By contrast, if Macri does poorly, he’ll likely return to stronger criticism of Fernandez’s spending in hopes of attracting more independent voters.Six months ago, few imagined Fernandez would be wielding such influence.Her administration was clouded by the mysterious death of prosecutor Alberto Nisman. Nisman was found dead Jan. 18, hours before he was to appear before Congress to elaborate on his explosive accusation that Fernandez plotted to cover up the alleged role of several Iranian officials wanted in a bombing that killed 85 people at a Jewish community center in 1994.Fernandez denied the allegations and the courts later threw out Nisman’s case. Authorities have yet to charge anyone in the prosecutor’s death.The president’s clumsy handling of the scandal took a toll. In February, several polls put her approval rating in the low 30s. By May it had climbed to 40 percent and by the last weekend in July it topped 50 percent, said Roberto Bacman, director of the Center for Public Opinion Studies, a South American research firm.“We are witnessing a very peculiar phenomenon,” said Bacman, who attributed Fernandez’s revival in part to Argentines’ general fear of major changes in the economy.After months of promising to lead Argentines in a vastly different direction by attracting foreign investment, Macri did an about-face two weeks ago by saying he now supported Fernandez’s state takeovers of Aerolineas Argentinas airline and YPF oil company.The move was widely interpreted as an acknowledgement that Macri couldn’t run as an anti-Fernandez candidate when roughly half the electorate supports her.Fernandez was quick to highlight the flip-flop. The next day, while inaugurating a road while Scioli stood at her side, she said: “We could have saved so much time if (the opposition) had realized just a little sooner” the value of the policies.Scioli, a former powerboat racer who lost his right arm in competition, has walked a fine line between praising Fernandez’s policies and appealing to independent voters. He often talks of “gradualismo,” or gradual changes that he’ll make to the economy.He has promised to slowly lift unpopular restrictions on citizens’ ability to buy U.S. dollars. Earlier this year, Macri said he would immediately lift the limits if elected. He quickly backed off after drawing sharp criticism that it wasn’t realistic, but he began making the promise again this week.All the major candidates say they’ll solve the dispute with the foreign hedge funds, which Fernandez calls “vultures.” The issue goes back to the country’s $100 billion default in 2001. The group refused to accept lower-valued bond swaps and took Argentina to court in New York and won.Paula Alejandra Vasconcelos, a single mother who lives in a poor neighborhood in southern Buenos Aires, said she hadn’t decided how she’ll vote.She said she likes Fernandez’s policies but is turned off by the economic problems and recent scandals, including the death of Nisman.“This country is like a science fiction novel,” she said. “And as Argentines, we have become used to this.”5. TANGO WITH CREDITORS TAKES A TWIRL — ARGENTINE OFFICIALS INDICATE POSSIBLE THAW, BUT A SETTLEMENT ISN’T YET IN SIGHT (The Wall Street Journal)By Julie Wernau and Taos Turner8 August 2015Argentine officials are hinting at a thaw in a long-running standoff with hedge-fund creditors, boosting investors’ interest in the struggling South American nation ahead of a New York court date Wednesday.Daniel Scioli, a presidential candidate for the ruling Peronist party, told a radio talk-show host this past week that, if elected, his government would negotiate a deal with investors that have sued in New York to collect $1.7 billion they are owed on defaulted bonds.Economy Minister Axel Kicillof said this month that reaching a deal with the holdouts is a matter of time. “I think it’s a question of finding the precise opportunity,” he said.This past week, the price of Argentina’s benchmark notes due 2033 rose 4%, likely in anticipation of a deal following the Oct. 25 presidential election, analysts said.Considerable hurdles remain to a settlement. Even so, the statements could point to a drastic shift for a country whose administration refers to its hedge-fund adversaries as “vultures.”The standoff has sharply limited Argentine access to foreign capital at a time when its economy is struggling with rampant inflation, dwindling foreign reserves, hefty deficits and a slumping currency.“There is pressure to calm financial markets at home leading up to the elections,” said Arturo Porzecanski, distinguished economist in residence at the School of International Service at American University in Washington.Efforts to contact the Argentine embassy and government officials for comment were unsuccessful.The MSCI Argentina Index, which covers about 85% of Argentine shares, has nearly doubled over the past two years, amid investors’ hopes that the departure of President Cristina Kirchner would herald a more investor-friendly regime.All three major candidates in the presidential election have signaled to the local media a willingness for overhauls that would attract foreign investment to the country.“Investors are hopeful that after the October election there will be a significant policy shift that will not only reopen capital markets for Argentina but will also enable the country to grow in a sustainable manner,” Arthur Carvalho, an economist at Morgan Stanley said in a note.Still, no deal appears imminent. The administration of President Kirchner, which will remain in office through early December, isn’t actively seeking a settlement, and discussions with creditors led by Paul Singer’s Elliott Management Corp. aren’t currently under way, said a person familiar with the matter.“We are not closer to a deal than a week ago,” said Sebastian Vargas, an economist at Barclays.At issue Wednesday is whether Argentina has been forthcoming with creditors in disclosing the whereabouts of assets it owns around the world. Hedge funds led by Elliott Management’s NML Capital Ltd. and Aurelius Capital Management Ltd. are seeking sanctions, saying the government has refused to show its assets.The hedge funds have chased Argentine assets around the globe. NML seized an Argentine navy training vessel in 2012 and tried to block the country from launching a pair of satellites. Other creditors attempted to seize the presidential plane in 2007.While 93% of Argentina’s bondholders have agreed to restructured offerings since 2001 that pay about 30 cents on the dollar, last year Argentina’s trustee stopped paying those bondholders after a New York judge ruled that Argentina couldn’t pay some bondholders without paying its holdout creditors. It defaulted on $29 billion in restructured debt.U.S. courts have jurisdiction over these lawsuits because Argentina had agreed in some of its bond contracts to resolve any disputes under New York law.Argentina then issued about $4.5 million in debt under Argentine law.But when domestic investors sold that debt to foreign investors, holdout creditors pursued the argument that the new bonds also fall within the court’s jurisdiction.By Benedict ManderAugust 9, 2015Miguel Galuccio’s easy charm is infectious. Even Vladimir Putin broke into a smile during a tête-à-tête earlier this year with the chief executive of YPF, Argentina’s renationalised energy company.“I asked myself: how am I going to break the ice with this guy?” says Mr Galuccio, recalling how the notoriously severe Russian president’s expression had barely flinched during an official lunch just before their meeting.But Mr Putin’s stern countenance quickly melted away when Mr Galuccio, who was 47 that day, played his opening gambit. “Mr President, this is my second birthday in Russia. The first was in Siberia. This time I am in the Kremlin, with you. I’m getting better,” joked Mr Galuccio, earning himself a jaunty slap from the Russian leader.Whether Russia’s Gazprom ends up partnering with YPF to develop Argentina’s vast, untapped shale reserves, as Mr Galuccio hopes, remains to be seen.But his ability to win the confidence of others has certainly gone a long way in helping him to reach the pinnacle of corporate Argentina, which he achieved when President Cristina Fernández gave him the top job at YPF after the government expropriated a 51 per cent stake in the country’s biggest company from Spain’s Repsol in 2012. “For a president who had taken such a complicated decision as to nationalise a company like YPF, and then put it into the hands of someone who is not a politician and who she doesn’t even know — that’s when I clicked,” said Mr Galuccio, who admits that he had been standoffish when he was first invited to meet the president.After all, taking the reins at YPF in 2012 following a highly politicised and antagonistic expropriation process was a risky proposition; venomous critics would be waiting to pounce at every false move. And besides, he had been very happy living as what he calls a “global nomad”, moving from the US to Mexico to Indonesia.At the time he was offered the job at YPF, he was based in London, where he was running a team for Schlumberger, the oil services company, in charge of more than 100 projects around the world. But the petroleum engineer was impressed that Ms Fernández — often derided by her critics as a populist — was convinced that YPF needed to be managed by a professional from the private sector. That sealed his decision: “If it was a risk for me, she was taking a risk that was 10-times greater. And we had a chance to do something really great.”Mr Galuccio was no stranger to YPF. Indeed, he insists that he would never have taken the job had he not started his career there.CVBorn: April 1968, Paraná, Entre Ríos province, ArgentinaEducation: Instituto Tecnológico de Buenos AiresCareer: 1992-99: Various roles at YPF, including managing operation and development of oilfields in the south of Argentina1999-2012: Various roles at Schlumberger, first general manager for Mexico and Central America, then London-based director of the Integrated Project Management division from 2005, until being named director of Schlumberger Production Management in 20112012: Returns to YPF as chief executiveFamily: Married with a son and daughterInterests: Polo, flying helicopters, boxingHe vividly recounts how chills were sent down his spine when he received a telephone call late one evening while he was a 24-year-old trainee working in Denver, where he knew no one. Although he had eaten, it was an invitation to dinner from a senior figure at YPF with whom he had had a long technical discussion earlier that day, which he was quite convinced had not gone well.“Today we are going to dine twice,” he excitedly told his wife, who was heavily pregnant with their first child. He accepted the job he was offered over dinner: “It was the most important decision I have ever taken.”Although going to work out in the field in Comodoro Rivadavia on the inhospitable southern coast of Argentina meant that, to his great dismay, he missed the moment of his son’s birth, it provided essential technical experience that laid the foundations for his career.Ironically, his first stint at YPF came to an abrupt end when it was acquired by Repsol in 1999, even though the Spanish company chose Mr Galuccio, after a lengthy selection process, as the face of their publicity campaign to relaunch their image in Argentina. A true oil man, Mr Galuccio was disappointed by the lack of oil and gas culture at Repsol, and took a job at Schlumberger instead.Of course, Mr Galuccio would eventually become the face of YPF again, but only once Repsol had gone. His return was partly thanks to his brother, who persuaded him to advise Sergio Urribarri, the governor of his home province Entre Ríos, about shale — even though, Mr Galuccio points out with a cheeky grin, he had to break it to him that there was no chance that the shale reserves in Entre Ríos would ever be commercially viable during the governor’s political lifetime.Nevertheless, Mr Urribarri, a close confidant of the president, was so impressed that he put Mr Galuccio’s name forward when candidates were being sought to lead the newly renationalised company, which was founded as a state enterprise in 1922.Before taking the plunge, Mr Galuccio admits that it was necessary to “align expectations” and be assured that the president shared his vision of YPF as a “hybrid” company — majority-owned by the state, but with a strong private sector culture. Since then, he insists that his success would not have been possible without the support he has received from the president and her inner circle, such as economy minister Axel Kicillof, a former university professor with a special fascination for Karl Marx.Indeed, the president’s gamble on Mr Galuccio seems to have paid off. Three years on, a declining trend in oil and gas production has been reversed, causing YPF’s profits and share price to soar, while important progress has been made in developing the Vaca Muerta shale formation in Patagonia, which contains some of the largest unconventional energy reserves in the world.Mr Galuccio is especially proud of the focus on technology that he has brought to YPF, which he says has traditionally been the domain of oil service companies, such as his former employer, Schlumberger.“In unconventional energy, technology is an extremely important factor. Whoever has that edge can change the future,” he says, jumping out of his chair to show off some special sand that could make “fracking” more efficient, made at his request with polymers in a laboratory by Y-TEC, the company’s research and development arm that he founded.“YPF is a showcase of what can be done by combining the public and private sectors,” says Mr Galuccio, who argues that the government’s objective to secure energy independence for Argentina does not conflict with the need to create shareholder value. Both require production and reserves to grow, and for that it is necessary to raise capital. “It is clear today that we have helped — and are helping — our country, and also that our investors are happy,” he says.But this is still only the beginning. Despite impressive results so far, Argentina’s goal of becoming energy self-sufficient remains distant and further jeopardised by the collapse in oil prices over the past year, which is putting a damper on the foreign investment that Argentina so desperately needs for its shale reserves to realise their full potential.Certainly, the epic nature of his task has not escaped Mr Galuccio. “The importance of YPF for the country transcends its importance as a business,” he says. “YPF could change the history of Argentina.”Second opinionThe former boss“YPF are lucky to have him,” says Andrew Gould, non-executive chairman of BG, who worked closely with Mr Galuccio at Schlumberger as its CEO.He commends Mr Galuccio’s role in the tough task of setting up the company’s Integrated Project Management division. “A good technical engineer with the capacity to define and implement business plans, he commands considerable loyalty from those around him but can also create considerable controversy.”7. PA. MAN UNEARTHED DINOSAUR NOW A PITT PROF, HE HELPED TO FIND PATAGONIAN GIANT (Pittsburgh Post-Gazette)By Brian Schrock Somerset9 August 2015SOMERSET, Pa. – As a child, Chris Coughenour would sneak onto a strip mine a few hundred yards from his parents’ property in Brothersvalley to collect rocks and fossilized ferns.Now living in Richland, Cambria County, he still has boxes filled with his discoveries, some estimated to be 300 million years old.“Honestly, if I would have grown up somewhere else, I don’t know that I would have had that interest, at least in geology,” Mr. Coughenour, 34, said. “That kind of planted the seed for me.”That seed sprouted in 2005 with one of the biggest discoveries – quite literally – in the history of paleontology.Mr. Coughenour was a first-year graduate student at Drexel University in Philadelphia. His adviser, paleontology professor Kenneth Lacovara, invited him on an expedition to Patagonia, a sparsely populated region at the southern end of South America that is shared by Argentina and Chile. The region is sometimes referred to as the “Land of the Giants” or the “Land of the Big Feet” because of 18th-century accounts of mariners encountering a race of 12-foot giants there.Mr. Coughenour, then 23; Mr. Lacovara, a representative from the Carnegie Museum of Natural History in Pittsburgh; and several Argentinians set up camp on a rocky slope. The camp was several hours from the nearest town. The weather was highly variable, with temperatures rising to 85 degrees in full sun and then plummeting 25 degrees under cloud cover. The previous year a dinosaur femur had been discovered about a half-mile away.On the first day of the expedition Mr. Coughenour found a piece of “float,” a term used to describe a fossil or artifact that is not associated with a larger specimen.“I found what looked to be a piece of a humerus or an arm bone just sticking out of the outcrop,” he said. “It was probably about 2 feet long or so.”The discovery was perhaps the most promising of the day until the Argentinians summoned the other team members to another section of the site.“The bone was actually exposed there. They had kind of picked around the surface,” he said. “We had no idea, of course, how big it was or what it was. It was mostly still buried. We just saw a little bit of bone.”The bone was on a small hill, so the team was fairly certain that it was not another piece of float that had washed down from a higher elevation.“We focused our efforts there for the rest of that day,” Mr. Coughenour said. “By the end of the day we had pretty much outlined the femur. As they excavated around it, taking away the matrix, which is just the rock it is encased in, it just kept getting bigger and bigger. It just kept going and going. And finally it ended up being about 6 feet long.”Although the entire fossil, and a smaller specimen, wouldn’t be unearthed for three more years, the team had discovered a new supermassive dinosaur species and one of the largest animals ever to walk the face of the earth.The dinosaur – which was dubbed “Dreadnoughtus schrani” after the early 20th-century battleships and financial supporter Adam Schran – was 85 feet long, stood 2 stories at its shoulders and weighed 65 tons, according to Mr. Lacovara. Its neck was 37 feet long, yet its skull, which was never discovered, was roughly the size of a horse’s head.“When these animals died, their heads just basically popped off,” Mr. Lacovara said.The gigantic plant eater probably spent much of its time anchored in one spot, using its giraffe-like neck to consume tens of thousands of calories from the surrounding vegetation, he said. Because of the dinosaur’s size, it had little to fear. The name Dreadnoughtus, in fact, means “fear nothing.”Mr. Lacovara believes the dinosaur died as a result of a storm that caused a river to break through a levee, turning the ground into something resembling quicksand.“It got mired in this crevasse splay and sank down quickly,” he said. “That’s what accounts for this great preservation. It made the transition from the biosphere to the geosphere very quickly.”Not only was the fossil incredibly large and well-preserved, it was also exceptionally complete. The team found about 45 percent of the dinosaur’s skeleton and roughly 70 percent of the types of bones in its body. The skeleton is more complete than that of any other supermassive dinosaur.“We never anticipated finding anything of that size or that kind of completeness, so we got overwhelmed pretty quickly just with the sheer volume and mass of the bones,” Mr. Coughenour said.The team spent 13 hours a day breaking rock to unearth the fossil. The work continued for about two months during the first of four field seasons. Mr. Coughenour was present for the first two seasons.“He was a very hard worker, very good at physical work, which is required in a setting like that,” Mr. Lacovara said.He said his student kept busy during breaks from manual labor.“When we were in Patagonia, to relax, most of us sat on a rock and threw little rocks at a big rock,” Mr. Lacovara said. “He would sit on a rock, take out a notebook and derive calculus equations, which I don’t find particularly relaxing, but apparently Chris does.”After being unearthed, the bones were placed in burlap and plaster, loaded into a cargo container and shipped to Philadelphia. The fossil material was divided into thirds and transported to Carnegie Museum, the Academy of Natural Sciences of Drexel University and Lacovara’s lab for scientific preparation and analysis.Mr. Coughenour eventually returned to Drexel, where he earned his doctorate in geoscience. He Mr. Coughenour went on to teach at Evergreen State College in Olympia, Wash., the University of Toledo in Ohio and the University of Pittsburgh at Johnstown, where he is an assistant professor and coordinator of the university’s energy and earth resources department.He and his wife will celebrate their fourth wedding anniversary in September.As a geologist and outdoor enthusiast, Mr. Coughenour said he enjoys the area for its beauty, recreation and natural history. “It’s really a great place to teach sedimentary geology,” he said.But his days of finding one-of-a-kind dinosaur fossils are probably over, at least in Western Pennsylvania.“Part of the issue is there are no rocks from the right time periods that have been preserved here,” he said. “Here we basically jumped from 300 million years ago pretty much to the present, with nothing in between.”“It’s a once-in-a-lifetime find,” he said of his work on Dreadnoughtus. “I’m sure I won’t find anything of that magnitude again.”By Bianca FernetAugust 9, 2015We’re getting closer and closer to the long-awaited presidential elections this October, and the closer we get the more volatility and surprises we’re seeing in the currency markets. So to make things easier to understand, I prepared a quick guide to the different “dollars” you may come into contact with in Argentina. Obviously the prices quoted are at the time of writing, close of market on Tuesday afternoon.Blue Dollar: 14.9 ARS/USD(AKA: Dolar Blue, unofficial dollar, parallel dollar)This is the cost of buying and selling a physical dollar bill in a cueva, or clandestine financial house in Buenos Aires. This is the best price you’ll get if you are buying or selling physical bills, and the transaction is done with no involvement of any government-sanctioned or licensed entity (like a bank).Green Dollar: Slightly worse than the Blue DollarThis is the rate you’ll get if you buy or sell dollars from an arbolito, or a shady looking guy running around Florida Street downtown muttering “¡Cambio! ¡Cambio! ¡Cambio!”. This is also the rate you’ll get if your neighborhood hardware or jewelry store runs a cheeky little currency business on the side. As a rule of thumb, when a smaller entity provides a currency exchange service but no money transfer service, you’re dealing with a smaller fish who simply buys and sells from one or more cuevas, but spreads out the margins a little. You’ll pay a few more pesos to acquire each dollar, and receive fewer pesos per dollar sold, but this guy is likely to accept your wrinkled sweaty 20 dollar bills.Contado Con Liquidación: 13.18 ARS/USD(AKA: CCL, Blue Chip Swap, Dolar Cable)This is the rate that is implied when people use securities (bonds or stocks) that are priced in US dollars in the United States and pesos in Argentina to move currency between markets. This operation is used by individuals or companies that need to legally move money in and out of Argentina. For money that is currently in Argentina, this is the only way to legally move the funds out of the country such that the paper trail is fully visible and declared on both ends of the transaction. For money outside of Argentina, this is how to move funds legally into the country and take advantage of a preferable exchange rate (compared to transferring the money via a bank and only getting the official rate of 9.10 ARS/USD)Contrary to popular belief, this transaction is not as easy as snapping ones fingers. You need a brokerage account with a sociedad de bolsa in Argentina, and have to demonstrate the source of the funds as well. The securities must be held for two to five business days before being liquidated into cash. Finally, this transaction consistently faces scrutiny from the National Government and is the first stop when the government wants to keep the blue dollar down – sociedades de bolsa are frequently suspended, fined, or shut down.Dollar MEP: 13.20 ARS/USD(AKA: Dolar Bolsa, Liqui Casero, Dolar Casero)This is one that foreigners will rarely come across, but it is a way to turn legally acquired Argentine pesos into US dollars within Argentina via a transaction involving dollar-denominated securities. Companies also use this operation. When an individual or company has pesos in white in Argentina, and needs US dollars in Argentina to, for example, purchase a property or even save the dollars, they undertake this transaction. You need a dollar-denominated account in Argentina, a brokerage account in Argentina, and at least ARS $35,000 declared and justifiable. Meep.Dollar Tarjeta: 12.43 ARS/USD(AKA: Credit Card Dollar, Dollar Gold, Dolar Turista)Tourists sometimes mix this one up and that’s ok. This is the rate that Argentines with peso credit cards receive when they spend money abroad. In normal countries that aren’t trying to emulate the Soviet Union, when you go abroad your bank converts foreign currency into your home currency at the official rate, sometimes with a modest fee. In Argentina, the government charges 35 percent on top of the official rate, bumping the rate up to actually quite close to the blue rate.So when Argentines go abroad, they burn holes in their credit cards because it translates into close to 20 percent savings. But only up to a certain point, because Argentine banks report to the AFIP tax agency. And if an Argentine reports a minimal income but then runs around Miami buying up the entire Apple store with their credit card, they shall have some ‘splainin to do!Dollar Ahorro: 11.05 ARS/USD(AKA: Savings dollar)This little puppy has been on the news quite a bit in the past few weeks – so much, in fact, that I wrote an entire article about its function in injecting cash dollars into the blue dollar market to keep the rate down. To rehash, you’re pretty much locked out of this market unless you fulfill the following requirements:· You must be an employee fully in white, all income declared, and have all tax information up to date with the AFIP and the Ministry of Labor· You can go online to the AFIP website, where you fill out a form and receive authorization to convert an amount equal to 20 percent of your monthly declared earnings (no more) into US dollars· Once you receive the authorization you complete the transaction by presenting this authorization online to a bank in which you hold a US dollar bank account.· If you want to receive physical dollars on the spot you get the official rate minus a 20 percent tax. Otherwise you can keep the dollars in the bank for one year and not be taxed. AFIP reports that 92 percent of these “savings” buyers opt for physical bills.As most of these dollar bills dance their way back into the blue dollar market anyways, the name “savings dollar” is a bit of a misnomer.Official Dollar: 9.21 ARS/USD(AKA: Libre [hahahahaha], white, blanco)This is the number that comes up if you google the exchange rate. Basically it’s what a bank will give you in pesos for your dollars. I personally don’t know anyone who can buy dollars at the white rate, but I would assume that state-owned companies like YPF and Aerolíneas Argentinas can in some instances. If you import into Argentina, you’ll end up paying the official rate plus whatever bribe you had to pay to get your goods through customs (going rate is 10 – 15 percent).Dollar Soja (Soy): 5.99 ARS/USDThis is worth including in order to understand how truly fucked producers and exporters of commodities are in Argentina. Anyone exporting from Argentina has 90 days to repatriate foreign currency earnings and convert them into pesos. So if you happen to export soy, for each dollar of soy you sell you will only receive 5.99 pesos (official rate minus 35 percent tax). That’s less than half of the 14.9 pesos that same dollar would fetch on the streets of Buenos Aires. If the exporter wants to then send some of those gains out of the country, they are left with the blue rate or contado con liquidation to once again acquire dollars.So there you have it – your official cheat sheet to understanding Argentina’s currency regime.Don’t have too much fun.By Bianca FernetAug. 8, 2015Economy Minister Axel Kicillof strutted his economic stuff on Monday in a 35-minute interview with La Nación. Besides the fact that the interview took place on the Conversaciones platform, which looks suspiciously like a transporter platform from Star Trek, Kicillof stunned many by admitting that a negotiated payoff to the so-called “vulture funds” is inevitable.President Cristina Fernandez de Kirchner’s administration has garnered vitriolic political support by repeatedly vowing never to negotiate with Paul Singer’s investment funds and vilifying political opponents as willing to sell the country and it’s people to foreign powers, with references to Hitler thrown in. Heavy accusation. So it came as a surprise when Kicillof, currently campaigning for a seat in Congress, openly admitted that “to pay is a trap. To pay nothing is impossible. I understand. So we are working in a negotiation.”Kicillof explained that Argentina’s strategy with the holdouts can be compared to what was done with Repsol following the nationalization of now state-owned oil company YPF. He opined that no reasonable person or country agrees with Griesa’s ruling, and that Argentina is currently gathering negotiating strength and clout by waiting for the right time to return to the table. He referred to presidential candidate Mauricio Macri, alleging that Macri has promised to pay the holdouts the full amount demanded, thus removing the incentive for the holdouts to negotiate with the current administration.So according to Kicillof, the current administration’s outspoken vow to never pay the “vultures” is a tactic to weaken the negotiating position of these holdouts to reach a more favorable settlement. Conveniently, the president who will have to put his face on this politically unpopular decision will not be Cristina – it will be her successor.The rest of Kicillof’s interview is well-worth listening to because Mr. Kicillof shows himself to be a competent statesman who will be with us well after the end of Cristina’s presidency. The Economy Minister is famous for his Marxist economic leanings, and in this interview he skillfully left politics aside and defended Argentina’s current dismal fiscal deficit as countercyclical spending rather than populist pandering.Let’s take a step back. Most economists agree that the economy moves in cycles – growth and recession. British economist John Maynard Keynes is credited for introducing the concept that in times of recession, the government has a role and indeed responsibility to act counter cyclically by spending in deficit to shorten the recession. In plain English, even when revenue is down due to fewer taxes, the government should ramp up spending on infrastructure and other growth inducers, and maintain social safety net measures like unemployment that logically become more expensive during recessions. For those of you who think you hate Keynesian economics, I highly encourage you to give it a closer look.Kicillof makes a fair argument, if Argentina’s current economic predicament were not self-imposed and a product of damning populist policies that only serve to maintain political support and will be near impossible for this administration’s successor to dismantle.The logic underlying Keynesian deficit spending relies on two elements that Argentina miserably fails:· Recession is an externally imposed situation, rather than the product of the government’s own actions· Deficit spending is a temporary situation, to be paid for out of past and future surplusesKicillof blasts devaluation as inflationary, yet Argentina’s current economic trajectory is inarguably inflationary.Kicillof refers to measures such a price controls as Keynesian countercyclical measures, yet this government has gone so far to permanently engrain these in the minds of the populace as to teach very young children to play video games in which they hurl balls with these policies at cartoon vultures in the style of angry birds. That’s not countercyclical spending, that’s indoctrination in a fairly sinister sense.Argentina’s persistent and widening dual currency market, capital controls, and autarkic trade policy are neither countercyclical nor Keynesian in nature – they are unwanted byproducts of unsustainable decision making.In this interview, Kicillof relied on multiple prominent economists’ predictions that Argentina’s economy will grow next year without attributing that prediction to across-the-board expectations that whomever succeeds Cristina will take steps to unravel the economic mess that has been made.You can talk about Argentina’s economic woes as if they were cruel externalities all day, but they are political and self-inflicted, making them all the more difficult to cure.Beam me up, Axel.August 10, 2015There will be no rapid upturn in the sluggish economy, regardless of the election outcomeThe governing Frente para la Victoria (FPV) received 37.9% of the votes in yesterday’s simultaneous open primaries (PASO), giving its candidate Daniel Scioli an edge in the October presidential contest. Although Scioli, who stood unopposed, was the most-voted presidential candidate, the distance between the FPV and the Cambiemos alliance, which received 30.6% of the vote, was narrower than expected. Mayor Mauricio Macri of the centre-right PRO was the easy winner of the Cambiemos primary, setting up a likely run-off against Scioli in November. The primaries came in a gloomy economic context: real output figures for the first half of 2015 showed that the economy remains stagnant, as most consumption and investment decisions have been postponed until the next government takes office.What nextThe prospect that Macri could reach a second round may encourage some investors, although Scioli remains the likely winner. In either case, a significant medium-term adjustment is expected, given the accumulation of macroeconomic imbalances, and a less benign global context.Subsidiary ImpactsØ The PASO results provide no greater political certainty.Ø The need to remove macroeconomic imbalances raises the chances of a steep devaluation in the medium term.Ø The restoration of a more market-friendly business environment might favour an economic rebound, but this will be gradual.AnalysisWith some 88% of votes counted, President Cristina Fernandez de Kirchner’s FPV garnered the highest level of support in the presidential primaries, with 37.9% to 30.6% for Cambiemos and 20.5% for the Unidos por una Nueva Argentina (UNA) coalition led by Sergio Massa (who defeated rival Jose Manuel de la Sota for the nomination).In the lopsided Cambiemos contest, Macri received 24.7% of the national vote, to 3.6% for Radical Ernesto Sanz and only 2.4% for Elisa Carrio of the Coalicion Civica.Elsewhere, in other key primaries, Cabinet Chief Anibal Fernandez won the FPV primary for the governorship of Buenos Aires, with 21.1% to 18.7% for rival Julian Dominguez. The FPV primary attracted 39.9% of voters to 30.5% for Cambiemos and 18.7% for UNA, although Cambiemos’s unopposed nominee Maria Eugenia Vidal was the most-voted single candidate.In the Kirchners’ home province of Santa Cruz, an incomplete vote count suggests that the FPV list of legislative candidates headed by the president’s son, Maximo Kirchner, was losing narrowly to an opposition alliance headed by Radical candidate Hector Roquel.Given the narrower-than-expected margin between the FPV and Cambiemos in the presidential primaries, and the fact that the FPV got less than 40% of the vote, a November run-off between Scioli and Macri appears increasingly likely.However, the assumption that the opposition will unite behind Macri (or unite at all) is highly questionable; in particular, Massa’s dissident Peronists are more likely to vote for Scioli in a run-off.Moreover, most surveys show that public opinion is strongly in favour of maintaining many of the current government’s policies, albeit while showing signs of dissatisfaction with its confrontational leadership. The fact that Fernandez de Kirchner’s leadership shows signs of weakening could even benefit Scioli among non-FPV voters.
1.1%Q1 GDP growth year-on-year
After a poor 2014, economic activity improved slightly in early 2015, with real GDP up 1.1% year-on-year in the first quarter, according to the National Statistics Institute (INDEC).Government consumption rose by 8.0%, compared with increases of only 0.8% and 0.5% in private consumption and fixed capital formation:Ø Private consumption growth reflected consumer use of credit card loans in pesos. The government’s programme ‘Ahora 12, allowing consumers to purchase a range of products in fixed monthly installments, has helped to sustain private consumption, reflected in the 44.4% annual growth in credit card loans in June.Ø The renewed dynamism of construction activity, which rose by 5% mainly fuelled by pre-election public works, was the chief driver of capital formation growth.At the same time, exports dropped by 1.4% in the first quarter, driven in particular by weaker demand from Brazil, which undermined manufacturing exports, and by lower fuel and energy sales. Imports declined even further, by 6.1%, due to weak domestic demand and import controls.First-quarter growth was driven by electricity, natural gas and water (6.0%), construction activity (5.0%) and agriculture (4.6%). However, by contrast, manufacturing and transport and telecommunications declined by 0.4% and 0.2% respectively, and commerce rose by just 0.6%. These three sectors jointly account for 47.9% of real GDP.Private estimates showed some improvement in the second quarter: the general activity index (IGA) produced by economic consultant Orlando Ferreres rose by 0.4%, its first quarterly increase since January-March 2014.China currency swapThe modest improvement in economic activity was accompanied by a worsening of external accounts.The first quarter balance of payments current account deficit rose 12.3% year-on-year to 3.7 billion dollars, driven by a lower trade surplus, down 13.2% to 730 million dollars, and a higher deficit on the incomes account, which increased by 10.5% to 3.2 billion dollars, owing to higher profit remittances abroad.
The currency swap agreed with China in 2014 was the main driver of capital account inflows, helping to prevent a greater deterioration of the balance of payments and a new drop in international reserves. Capital account net inflows reached 5.4 billion dollars in the first quarter, compared with outflows of 2.8 billion in the year-earlier period.Although export earnings (and thus the trade surplus) show a seasonal rise in the second quarter due to the soya harvest, this year this was insufficient to avoid a new fall in the trade surplus, which dropped to 1.1 billion dollars, representing only one-third of the year-earlier record.However, the stock of international reserves expanded by 7.3% to 33.8 billion dollars by end-June, driven by new foreign debt issues by provincial governments and local companies (such as state oil company YPF, which issued a 1.5-billion-dollar bond in April) and funds worth 1.3 billion dollars from 4G auctions.Medium-term adjustment?
Growth is set to fall next year after a poor 2015Given that the second half of 2014 marked the worst of the slowdown, in the coming quarters economic activity should show higher growth than in the first half, though only due to the low comparison basis.Political uncertainty and external constraints, which raise doubts about the ability of the next government to avoid a sharp devaluation, will inhibit consumption decisions and discourage new investments.According to IMF on July 15, the Argentine economy will record meagre 0.1% growth in 2015 and 0% growth in 2016. (On July 29, the UN Economic Commission for Latin America and the Caribbean predicted 0.7% growth this year.)As in other South American countries, weak commodity prices will continue undermining economic activity. However, growth will not only be much slower than most South American countries, but it will worsen in 2016 — unlike the overall regional trend.The IMF’s poor economic outlook for Argentina resembles that of Argentine households: according to a poll conducted by consulting firm CCR, around 66% of households expect an economic crisis next year, regardless of the election outcome.
2. AFTER 21 YEARS OF IMPUNITY, TRIAL ON TERRORIST ATTACK COVER-UP IN ARGENTINA BEGINS (Huffington Post)9. END OF ARGENTINA’S PETROLEUM PLUS WILL HAVE LIMITED IMPACT ON UPSTREAM INVESTORS (IHS Global Insight Daily Analysis)By Jonathan Gilbert7 August 2015BUENOS AIRES — Argentina’s labyrinthine investigation into the suicide bombing of a Jewish community center here two decades ago began a new chapter on Thursday with the start of a trial in which Carlos Menem, a former president, is accused of trying to derail the case.Mr. Menem, 85, is one of 13 defendants, mostly former officials, suspected of conspiring to conceal what prosecutors have said was Syrian involvement in the 1994 bomb attack, which killed 85 people. The trial points to the struggles of Argentina’s judiciary, which has failed to convict anyone of the bombing but has pushed ahead with separate cover-up allegations.For some in Argentina, the long-awaited trial arouses hopes of one day solving the bombing, a case scarred by setbacks and controversy, including the mysterious death this year of Alberto Nisman, the prosecutor who was leading the investigation. Before Mr. Nisman took the helm a decade ago, the investigation had been tainted by scandal.Mr. Menem was not in the federal trial court on Thursday because of poor health, his lawyer said. But in their opening statements, prosecutors and lawyers for private plaintiffs, who have joined the case as allowed by Argentine law, told judges that one of the defendants — Juan José Galeano, who was the judge first assigned to the investigation — paid a witness, Carlos Telleldín, $400,000 to falsely incriminate four police officers in the bombing, as part of a state-directed scheme to distort the evidence.Separately, prosecutors and plaintiffs’ lawyers claim that Mr. Menem, who is of Syrian descent, ordered Mr. Galeano to deflect suspicion away from a Syrian-Argentine textile merchant by using the former president’s brother, Munir Menem, as an intermediary. In the days after the attack, the investigation of the textile merchant, Alberto Jacinto Kanoore Edul, ”was prematurely discontinued following an order by Carlos Menem, obeyed without objection by Galeano,” the court was told, ”paralyzing one of the leads that, without doubt, had serious probabilities of deepening knowledge” of the bombing.Munir Menem, who was a presidential secretary for his brother, has since died.In an interview before the trial began, Mr. Galeano, 57, claimed that the payment to Mr. Telleldín, 54, who sold the van used by the suicide bomber, was not a bribe to induce false testimony but a legitimate use of state funds to foster cooperation by witnesses. (A fund is available to pay reluctant witnesses who have information about the Jewish center bombing and another terrorist attack here two years earlier, according to a 1994 presidential decree.)”It was totally legal,” he said. ”What I needed was information to move the case forward.” Mr. Galeano denied ever speaking to Munir Menem and allegations that he maneuvered to clear Mr. Kanoore Edul of suspicion.President Cristina Fernández de Kirchner, whom Mr. Nisman also accused of conspiring to derail the investigation, has supported the trial of Mr. Menem, now a senator who has been convicted of arms smuggling.In a new line of inquiry, Mr. Nisman had claimed that Iranian officials were behind the bombing. Days before his death in January, he accused Mrs. Kirchner of conspiring to shield them from prosecution in return for trade benefits. But a prosecutor who inherited the Kirchner conspiracy case dropped it.One theory about the bombing is that it was an act of revenge: Syrian leaders may have been angered that Mr. Menem, who had forged ties with Syria before he became president, terminated an arms deal after he was elected, historians say. Likewise, Mr. Nisman said in 2006 that he agitated Iran by ending nuclear energy cooperation.Some victims’ relatives say that the trial could provide new leads. ”The hope is not illusory,” said Alejandro Rúa, a lawyer for Active Memory, a group representing some victims’ relatives that is a plaintiff in the trial. ”The very state authorities that were supposed to investigate the case covered it up. Now, we will try to verify their motives.” Others said the trial, which may involve about 140 witnesses, according to local news media reports, and is expected last at least a year, would yield few results.”There is nothing to be discovered after so many years,” Carlos Escudé, an Argentine political scientist who has written on the case, said in an email. ”Leads have faded.”2. AFTER 21 YEARS OF IMPUNITY, TRIAL ON TERRORIST ATTACK COVER-UP IN ARGENTINA BEGINS (Huffington Post)By Gastón ChillierAugust 6, 2015On July 18, 1994, a bombing at the AMIA, Buenos Aires’ largest Jewish community center, killed 85 people and injured hundreds. No one was convicted of this crime and the original judicial probe was riddled with irregularities. This January, the AMIA grabbed headlines again when Alberto Nisman, Argentina’s special prosecutor on the case, was found dead in his apartment. His apparent suicide–yet to be confirmed as such–is the latest episode in 21 years of impunity in which the global War on Terror meets the local legacies of state-sponsored crimes against humanity.The AMIA blast came two years after an attack on the Israeli embassy in Buenos Aires that killed 29 people, and was never punished. In 2004, judges declared a mistrial in the AMIA bombing, and evidence gathered over the years points to a conspiracy between politicians, judicial officials and intelligence agents to bury the truth. After years of delays, a whole new trial began on Thursday in which officials from former Argentine President Carlos Menem on down will finally be tried for orchestrating a cover-up in the bombing investigation. Much is at stake for the victims, for Argentine society, and for its democratic institutions.The evidence that will be presented should elucidate the domestic and international forces that contributed to two decades of impunity, starting with the geopolitical interests at play in the judicial probe of the attack. At the time, the United States and Israel insistently singled out Iran as the lone sponsor of global terrorism. And in the 1990s, the Argentine government sought to strengthen ties with the United States, describing the bilateral links as “carnal relations.”The AMIA investigation, influenced by Washington and Tel Aviv through the collaboration of their intelligence agencies, focused on Iran’s possible involvement and systematically disregarded any clues pointing toward Syria. According to Memoria Activa, one group of AMIA victims and their relatives, the investigation of an initial suspect of Syrian descent whose family was friendly with President Menem’s own was quickly dropped. After that, only members of the Lebanese guerrilla group Hezbollah and Iranian citizens were accused of involvement on a global scale.The trial should also expose the shady relations between Argentine spies, politicians, prosecutors and judges. The judge leading the original probe, Juan José Galeano, used $400,000 from an intelligence slush fund to pay a key suspect, allegedly so that he would provide false testimony to implicate provincial police officers in the attack. By all appearances, this so-called “local connection” was invented as a scapegoat; all of the police officers facing trial were acquitted in 2004.Part of the problem lies with Argentina’s intelligence apparatus, which helped torture, kidnap and kill thousands of dissidents during the 1976-1983 dictatorship. This military regime had backing from the United States, which supported several dictatorships in the region. Until recently, Argentina’s intelligence agency had barely been reformed and feeble political oversight ensured that agents operated with great autonomy.At the same time, the federal justice system has come to rely on the intelligence agency’s wiretaps to gather evidence, producing an unhealthy interdependence between some intelligence agents, prosecutors and judges. Plus, politicians often use these same wiretaps against their opponents and critics. The delays in the AMIA cover-up trial and the behavior of several suspiciously sluggish state prosecutors may be explained by these extortive measures, corrupt collusion, or just plain indolence.Nisman’s prosecution also depended on the intelligence agency’s wiretaps and other spy-fed information, as well as Israeli and U.S. intelligence. Just days before he died, Nisman relied almost exclusively on those sources to accuse Argentina’s current president and foreign minister of plotting to ensure that Iran would no longer be implicated in the AMIA bombing. His accusation was dismissed by many legal experts and eventually thrown out by the courts.In 2005, after our organization helped Memoria Activa take its case to the Inter-American Commission on Human Rights, the Argentine government recognized the state’s responsibility for failing to prevent the AMIA attack and botching the investigation. Amid the fallout from Nisman’s death ten years later, promised reforms including overhaul of the intelligence law were finally approved. The Intelligence Secretariat was recently disbanded, wiretapping is now overseen by the Attorney General’s Office, and greater administrative and congressional oversight of spies is expected. This reform is a crucial first step, but deeper changes are needed.After years of frustration and disappointment, AMIA victims and their families, will finally get to see Menem, a former intelligence chief, ex-judge Galeano, two former federal prosecutors, a high-ranking federal police chief, and seven others stand trial. The courtroom revelations could drive more needed changes in Argentina’s institutions and public policies–but that is no substitute for truth and justice. We have waited far too long.By Richard LoughAugust 6, 2015Daniel Scioli, the presidential candidate for Argentina’s ruling party, on Thursday urged undecided voters to back him in this weekend’s party primaries in a speech designed to reassure the party’s socialist faithful while wooing swing voters.Sunday’s primaries, in which Argentines can vote for any candidate from any party or alliance, are widely seen as a dummy run for the Oct. 25 poll. They will help show whether Scioli, who is ahead in polls, could win outright in the first round.“I will maintain the policies that need maintaining, deepen those that need deepening and change those that need changing,” Scioli told thousands of banner-waving supporters as he closed the first stage of campaigning ahead of the primaries.Scioli is seen as a moderate within Argentina’s broad Peronist movement and more investor-friendly than outgoing President Cristina Fernandez. But his running mate is a close Fernandez ally and in past weeks Scioli has defended the president’s heavy subsidies and controls on the economy.Scioli saluted Argentina’s workers and trade unions and promised more roads, schools, hospitals and housing. He also rebuffed critics’ comments that Fernandez would retain a strong influence in Argentine politics if he won.“You know what, I’m going to do it my way,” he said, promising to attract investment inflows that would lower Argentina’s runaway inflation.For that to happen, economists say Argentina would need to strike a deal with the U.S. hedge funds whose legal battle with Fernandez over unpaid debt tipped Argentina back into default a year ago.Both Scioli, 58, and his conservative rival, Mauricio Macri, have avoided the politically toxic subject of what an eventual deal with the so-called “holdout creditors” might look like.Most opinion polls show Scioli, the governor of Argentina’s biggest province, with 35-38 percent of voter support while Macri, who is mayor of Buenos Aires, trails in the early 30s.Macri promises change from Fernandez’ leftist policies, vowing to unwind Argentina’s web of trade and currency controls, lift hefty taxes on grains exports and restore relations with creditors.In his closing rally ahead of Sunday’s primaries, Macri said pensions had been eroded by inflation under Fernandez and that rising crime stalked Argentines.“We know we want a better public education system, more jobs and we will achieve this so that there is a better future for all Argentines,” Macri told supporters.By Hugh Bronstein and Eliana RaszewskiAugust 6, 2015Aug 6- Argentina needs $200 billion in investment to develop its vast but barely tapped shale fields, but no joint ventures were expected soon because of low oil prices and uncertainty ahead of a presidential election, state oil company YPF said on Thursday.YPF, nationalized in 2013, is improving drilling efficiency and developing its Vaca Muerta shale formation in Patagonia so that international companies will invest once prices recover, Chief Financial Officer Daniel Gonzalez said in a conference call with investors.“I would not expect any significant joint ventures to be announced soon,” Gonzalez said.He cited the drop in global oil prices and uncertainty ahead of October’s presidential election in Argentina among the reasons.The biggest joint venture so far was a 2013 pact with Chevron, under which the two companies have put about $3 billion in the Belgium-sized Vaca Muerta formation.Brent crude was at just above $49 a barrel on Thursday, down from $115.71 intraday on June 19, 2014.YPF nonetheless posted a second quarter net income of $252.8 million on Wednesday, a 50.5 percent increase on the same period last year.“During the second quarter we connected a total of 46 wells, including 38 verticals and eight horizontal wells, taking the total to 360 shale wells already in production,” Gonzalez said.Shale gas production reached 43,300 barrels of oil equivalent per day primarily from the Loma Campana field, where YPF has a 50 percent stake with Chevron Corp..“We have extended the length of the horizontal sections from 1,200 meters to 1,500 meters, and are now in the process of further extending them up to 2,000 meters,” Gonzalez said.He said YPF has also added three fracture stages, taking them to 15 to 18 per well.“Another important improvement regarding horizontal wells is that the costs have been consistently below $14 million a well, including those with 18 fracking stages.”YPF had previously said its horizontal wells cost about $14 million per well.“During the second quarter we drilled and completed two slim-hole wells and have two more pending completion. This can prove to be a cost efficient way to develop less productive areas of Vaca Muerta,” Gonzalez said.YPF will continue improving efficiency in order to be ready to enter joint ventures when conditions improve, Gonzalez said.“For the time being we have a lot on our plate with Loma Campana and El Orejano,” he addedBy Dimitra DeFotisAugust 6, 2015Argentina’s state-run oil-and-gas exploration company YPF (YPF) reported a 50% increase in second quarter net income that was below forecasts.Getty ImagesYPF’s total hydrocarbon production increased by 2.6% year over year. Natural gas production was 2.3% higher than the second quarter of 2014, while crude oil production increased by 3.7%, the company said. The company has been somewhat immune to the drop in oil prices because the government-controlled Argentina price is near $78 per barrel, Reuters reports. The international Brent price has dropped below $50 per barrel.From the Reuters story and the press release on consolidated second-quarter results available on the YPF investor relations page online:YPF second-quarter earnings were 2.297 billion pesos ($252.8 million), a 50.5 percent increase on the same period last year, on revenue of 39.6 billion pesos. YPF’s second quarter figure came in slightly below the median forecast in a Reuters poll for a net income of 2.326 billion pesos. YPF said earnings before interest, taxes, depreciation and amortization, or EBITDA, climbed 13.3 percent on the year to 12.40 billion pesos.From Raymond James analysts Santiago Wesenack and Federico Rey Marino:“YPF reported EPADS [earnings per average diluted share] of US $0.65 in 2Q15 (in-line with our US$0.64 estimate), up 36% y/y, and 5% q/q. EBITDA followed a similar trend, coming in at US$1,359 million (ahead of Raymond James’ estimate of US$1,253 million), up 5% y/y and 17% q/q, respectively. Analysis: YPF posted constructive figures in 2Q15, with EBITDA and net income improving y/y, while the topline was flat. Actual data was in-line with our estimates at both the top and bottom lines … All in all, the consolidated operating margin declined 274bp y/y to 14%, although ahead of our 10% estimate … we will pay close attention to consolidated production trends, cost growth rates, and price changes in the local market. “YPF stock rose 2.3% Wednesday and was flat after hours. The stock is down 13% this year, while the Global X MSCI Argentina exchange-traded fund (ARGT) is down 2.9% year to date. The Argentina-focused fund has outperformed the iShares Latin America 40 ETF (ILF), which is down nearly 17% this year, and broader measures of emerging markets: the iShares MSCI Emerging Markets exchange-traded fund (EEM) is down 6.7% and the iShares MSCI BRIC ETF (BKF) is down 3.1%.By Ed AdamczykAugust 6, 2015The attack killed 85 people, and Iran was suspected of involvement.BUENOS AIRES , Aug. 6 (UPI) — The trial of former Argentine President Carlos Menem and 12 others, accused of obstructing justice in a 1994 attack on a Buenos Aires Jewish center, began Thursday.The blast, in which a bomb-packed van killed 85 people and destroyed the six-story Argentine Israelite Mutual Association, remains unsolved and no one has been arrested, but former President Menem, 85, and 12 associates, including a former intelligence chief and a former federal judge are charged with obstruction of justice and destruction of evidence, among other charges.Prosecutors allege Menem, who is of Syrian descent, steered investigators away from linking the incident to a suspected participant, Syrian-born Alberto Kanoore Edul.Current Argentinian President Christina Fernandez is supportive of the case, although she was accused by prosecutor Alberto Nisman of attempting to cover it up; although it has been suspected Iran was behind the attack on the Jewish center.Nisman claimed Fernandez sought to have the case remain unsolved as she arranged an economic deal between Iran and cash-strapped Argentina, and exchange of Iranian oil for Argentinian meat and grain.Nisman, a descendant of Holocaust survivors, was found dead in January with a gunshot wound to his head, the day before she was scheduled to testify before Congress about Kirchner’s alleged attempt to sabotage his investigation by hiding Iran’s involvement.“The ability to obtain evidence needed to uncover the Syrian connection was stifled for five years, frustrating the search for truth,” the indictment against Menem reads in part.August 6, 2015Former Argentine President Carlos Menem and 12 other people are going on trial Thursday for allegedly conspiring to derail the investigation into the deadly 1994 bombing of a Jewish community center.Prosecutors allege that Menem and his co-defendants, including his former intelligence chief and a former federal judge, tried to steer prosecutors from linking the bombing of the Argentine Israeli Mutual Association building to a Syrian-born man, Alberto Kanoore Edul, who was suspected of taking part in the attack.The 85-year-old Menem, who became Argentine president in 1989 and served a decade, is of Syrian descent. Currently serving as a senator in the Argentine legislature, Menem has denied the charges.No one has ever been arrested or tried for the July 18, 1994 attack in the capital, Buenos Aires, which left 85 people dead when a truck filled with explosives detonated and caused the AIMA building to collapse.The case is supported by President Cristina Fernandez, who was accused by prosecutor Alberto Nisman of trying to sabotage his investigation of the bombing in order to cover up allegations linking Iran to the crime. Nisman alleged that Fernandez’s government helped orchestrate a bargain with Tehran: cash-strapped Argentina would get Iranian oil, Iran would get Argentine grain and meat and the bombing would remain unsolved.Nisman was found dead in his apartment in January with a gunshot wound to his head, one day before he was scheduled to testify before Argentine lawmakers about his accusations against Fernandez.By Charles Newbery6 August 2015Buenos Aires (Platts)–6Aug2015/533 pm EDT/2133 GMT Argentina’s YPF said Thursday it plans to sustain drilling activity and explore for new opportunities so the state-run energy company can attract more partners for shale projects when investment conditions improve in the global oil market.“We are not in a joint venture mode at this point,” Chief Financial Officer Daniel Gonzalez said in a conference call with investors. “It’s probably not a good time to go out and look for partners and for trying to farm out properties.”He cited three reasons:* Low and volatile international oil prices are discouraging investmentin frontier plays like Vaca Muerta, the country’s biggest shaleformation and one of the world’s largest.* The October 25 presidential election is slowing decisions untilcompaniesget a better idea of the economic proposals of the next administration.* YPF already has large acreage in Vaca Muerta, with 40% of the 30,000 sqkm (7.4 million acres) total.“We have a lot food on our plate,” Gonzalez said.YPF was the first to put Vaca Muerta into commercial production, working in a partnership with Chevron. Production there rose to 43,300 b/d of oil equivalent in the second quarter from 41,700 boe/d in Q1.YPF has since entered a shale oil venture with Malaysia’s Petronas on La Amarga Chica, where a first well was recently drilled, and into shale and tight gas ventures with Dow Chemical and Argentina’s Petrolera Pampa.While no new partnerships are planned in the near term, Gonzalez said the company is working to expand its horizons in Vaca Muerta by exploring and delineating other blocks like Bandurria and La Ribera. He said a first gas well was drilled on La Ribera and a first horizontal well is poised for completion on Bandurria.The effort will create more projects so YPF can “eventually team up with someone when conditions both globally and locally allow us to do so,” Gonzalez said.HORIZONTAL PUSHTo ramp up shale production and reduce drilling and completion costs, YPF shifted strategies in Q2 by stepping up the drilling of horizontal wells. It moved more rigs to sweet spots on the east side of Loma Campana for horizontal drilling, Gonzalez said.The company drilled 46 wells in Q2, of which 38 were verticals and eight horizontals. That took to 360 the number of shale wells in production, he said. YPF has drilled 20 horizontal wells in total, with five done in Q1 and seven drilled previously.YPF has sustained its rig count this year to continue its drilling, with 19 in operation on its Loma Campana block and El Orejano with Dow Chemical, he added.DRILLING COSTSGonzalez said drilling and completion costs for vertical shale wells have remained flat this year in dollar terms, averaging $7 million/well.That’s down from $11 million/well in 2011 but higher than the US average of $4 million-5 million/well.With horizontals, costs are running below $14 million/well, including those with longer laterals and 18 frack stages, Gonzalez said. That is down from $15 million/well in Q1 for horizontals with 15 frack stages, according to company data.While horizontals are more expensive, they are more than twice as productive than verticals, he said.“The economics of the horizontals look very promising,” he said.YPF has extended the laterals on its horizontals to 1,500 meters (4,921 feet) from 1,200 meters, increasing the number of frack stages to 18 from 15, Gonzalez said. The next step is to extend the laterals to as much as 2,000 meters, he said.In another effort to cut costs, the company drilled and completed its first two slim-hole wells in Q2 and has two more pending completion.Slim-hole wells “can prove to be a cost-efficient way to develop less-productive areas of Vaca Muerta,” he said.“We are clearly progressing in our learning curve, but not without missteps,” Gonzalez said. “We continue to see this as a long-term project and the issues that we have faced will undoubtedly result in better results in the developments to come.”TIGHT GASGonzalez said tight gas is a driver for production growth, now accounting for 12% of total gas output.The company produced 5.5 million cu m/d of tight gas in Q2, of which 4.4 million cu m/d came from the Lajas formation and the rest from Mulichinco.YPF recently drilled four wells targeting Lajas on its 100% owned Loma La Lata block and 12 wells targeting Mulichinco on Rincon de Mangrullo, a 50:50 joint venture with Petrolera Pampa.While most of its rig fleet is focused on shale oil drilling, more spending is going into gas, driven by steadier domestic prices. Gas prices rose 9.6% to 4.58/MMBtu in Q2 from $4.18/MMBtu in the year-earlier period, while domestic oil prices fell 8.5% to $69.10/barrel from $75.50/b over the same period.“The economics of gas are very promising,” Gonzalez said.INVESTMENTLooking forward, Gonzalez said investment is on track to total $6 billion this year and slightly less in 2016.The company doesn’t plan to buy unconventional assets, but possibly conventional assets, Gonzalez said.“We own plenty of unconventional acreage already so we would rather develop what we have and eventually find partners to help develop what we have as opposed to going after other unconventional acreage in Argentina,” he said.Instead, YPF will look at possibly buying conventional oil and gas assets in Argentina that have production and reserves and potential for growth with the aim of increasing its 40% share of hydrocarbon production while assets are priced low, Gonzalez said.“We believe that the assets are going to be worth much more in the future,” he said.YPF’s total crude production rose 3.7% to 249,800 b/d in Q2 from 240,900 b/d a year earlier, while gas output rose 2.3% to 44.6 million cu m/d from 43.6 million cu m/d.9. END OF ARGENTINA’S PETROLEUM PLUS WILL HAVE LIMITED IMPACT ON UPSTREAM INVESTORS (IHS Global Insight Daily Analysis)By Juliette Kerr6 August 2015Argentina’s Planning Ministry on 6 July published Decree 1330/2015, revoking the Petroleum Plus incentive programme that was aimed at stimulating production. The programme, which was created in 2008, offered companies that increased oil reserves and production transferable fiscal credit certificates that could be used to pay export taxes on crude oil or refined products. Following the same approach the government used to compensate Repsol for the expropriation of its stake in YPF, the government will use bonds to pay the over USD784 million owed to companies under Petroleum Plus: companies will be able to convert fiscal credit certificates issued since 2008 and not yet liquidated into dollar denominated Argentine bonds (Bonar 2024 bonds at 8.75% interest and Bonad 2018 at 2.4%) with the same nominal value.Significance: The ending of Petroleum Plus will have little material impact on oil companies or production volumes. Companies currently benefit from higher domestic crude oil prices, compared to international prices (the reverse was the case when Petroleum Plus was created). Moreover, other incentives introduced via the “Crude Oil Production Stimulus Programme” published on 3 February 2015 (Resolution 14/2015) will remain in effect for at least 12 months (see Argentina: 11 March 2015: Argentine government takes steps to shield producers from lower oil prices). The government pointed to the reduced benefits of Petroleum Plus to companies, given the context of lower international oil prices and crude export taxes, in its rationale for the programme’s cancellation. However, it is also likely to have been motivated by pressure to curb energy subsidy spending in order to narrow the fiscal deficit, which IHS predicts could reach -4.4% of GDP this year.The government’s willingness to settle its outstanding liabilities under Petroleum Plus will be regarded positively by investors. The conversion of the tax credits into bonds may, however, not be an attractive proposition for all producers. Due to the ongoing dispute between the government and holdout creditors that forced Argentina into a new sovereign debt default last year and has resulted in court-imposed restrictions on transfers of Argentine sovereign debt into the international clearing systems, demand for the bonds in the local market is likely to be limited in the short term. Oil companies that are able to hold onto their bonds and receive interest payments until the dispute is resolved may be able to recoup the full face value of the bonds at a future date. However any companies with cash flow constraints seeking to sell the bonds in short order would likely be forced to sell at a discount, given that demand would be limited to foreign buyers who are willing to hold bonds in Argentina or local buyers with dollar cash holdings.The government’s revoking of Petroleum Plus follows earlier policy flip-flops on oil production incentives and export tax rates, providing a reminder to investors that despite recent improvements to the regulatory framework, some policy instability remains. Companies that currently benefit from the temporary incentives announced this year similarly have no assurances of their continuity under the next government. Other incentives introduced under the 2014 hydrocarbons reform for investments over USD250 million are more likely to remain in place as they were approved by Congress and do not entail the payment of direct subsidies.OGRS risk impact: The current government’s propensity for short term and ad-hoc rule changes, rather than a more coordinated approach that tackles the sector’s structural imbalances, makes hydrocarbon policy less predictable, reinforcing our Ministerial/Policy Volatility score of “C”(6). That said, it has taken some steps to improve the investment climate over the past two years and these efforts are likely to be continued under the next government, albeit in a gradual fashion.By Adam DuboveAugust 6, 2015No New Ideas Leave Crony Nation Doomed“Argentinean Airlines and [the oil company] YPF will remain under state control.” These were the words of a certain candidate who will vie for the Argentinean presidency next December.The statement could have easily come from Daniel Scioli, the man President Cristina Kirchner has chosen to succeed her. It would be a logical guess.Die-hard government supporters have always been suspicious of the governor of the massive province of Buenos Aires, home to 37 percent of the country’s voters. While his loyalty to Kirchner has been questioned, his vice presidential running mate Carlos Zannini — a former Maoist-guerrilla, who local media have described as secretly working for Kirchner — will attempt to keep him in check.No, the words were actually spoken by Mauricio Macri, the mayor of Buenos Aires and the favorite to emerge victorious from the opposition primaries. Macri has made a radical about-face in rhetoric recently, praising and even pledging to continue many of Kirchner’s most emblematic policies.Leaving behind his promise to end foreign-exchange controls his first day in office, the word “change,” which previously dominated his speeches during the first half of the year, has vanished from his discourse.While some may be surprised, why should we expect anything different?This metamorphosis in rhetoric occurred after the Pyrrhic victory Macri secured in mid-July in the local elections in Buenos Aires, the district where he has ruled for the last eight years and developed as a stronghold for his PRO party. The narrow margin of victory was a shock, a humbling experience. It revealed something many wanted to ignore: Macri does not embody change; he’s just another politico.Maybe it’s his origins as a businessman (even though it was the sort who receives privileges from the corporatist state), or his past as the head of one of the most popular soccer teams in the country, that explains why Macri has managed to dazzle a large chunk of the population that considers itself “anti-Kirchner.”But behind the tailored words by political marketing experts, Macri is no different. If one were to build a concept map of Macrista ideology, many similarities with the current government would emerge.They will deny it. “Mauricio Macri does not come with an ideology,” said Marcos Peña, general secretary of the Buenos Aires government and Macri’s right-hand man. But the lack of ideology is itself ideological, and Macri is no different than the other candidates.Like the ruling party, opposition candidates see themselves as the masters of other people’s will. Every candidate in this election represents the same vision of citizens as serfs — vassals of the crown.According to this view, the individual is merely a cog in the machine that is constructed to achieve the goals of those in power. In fact, Macri’s slogan for Buenos Aires should leave little doubt: “You are in everything,” reads every official propaganda piece from his campaign.Cliches such as the defense of “national industry,” the common good, or the well-being of “the Argentineans,” are chimeras that politicians love to talk about. Macri is no stranger to them. A document disseminated among Macri’s PRO officials only reinforces this idea. “He has always believed in a very active role for the state, and his eight years in office proves it,” notes the memorandum.His supporters are instructed to defend welfare-state programs, such as the Universal Child Benefit (a sort of Universal Basic Income), nationalized companies, the nonviable social-security system, and other initiatives that have defined the Kirchner era.What the Argentinean opposition is promising is more of the same, only “better managed.” They plan to continue all the same big-government programs, and claim they are up to the task of running them more efficiently. For these politicos, seizing pension funds, restricting foreign trade, or plundering the income of citizens are value-free policies, and their success depends on the qualities of the individual at the helm.Unfortunately, the political future of our country is bleak. No contender for the presidency has even hinted at dismantling the destructive policies that have been in place for decades. In a country where the personal aspirations have been reduced to buying a new television or an air-conditioning unit, the field is wide open for populism to continue its reign.
5. ARGENTINA IS STILL HELPING IRAN COVER UP ITS ROLE IN THE BOMBING OF A JEWISH COMMUNITY CENTER 21 YEARS AGO (Business Insider)6. WHY THE AMIA MASSACRE AND MYSTERIOUS DEATH OF ALBERTO NISMAN STILL HAUNT ARGENTINA (The Daily Beast)8. ARGENTINA’S INFLATION REMAINS AT HIGH LEVELS WHILE OUTLOOK PREDICTIONS SUGGEST STAGNATION IN SHORT TERM (IHS Global Insight Daily Analysis)By Almudena CalatravaJuly 19, 2015BUENOS AIRES, Argentina — Conservative Horacio Rodriguez Larreta won Sunday’s mayoral run-off election in Buenos Aires, in a closer race than his opposition party had hoped for in the capital ahead of presidential voting later this year.With 99.9 percent of ballots counted, the candidate of the business-friendly PRO Party had 51.6 percent of the votes. His rival, ECO Party candidate and former economy minister Martin Lousteau, got 48.4 percent.Rodriguez Larreta is an economist and was chief of staff for outgoing mayor and likely presidential candidate Mauricio Macri. Rodriguez Larreta won the most votes in the opening round of balloting July 5, but did not garner enough votes to avoid a run-off with Lousteau.In his victory speech, Rodriguez Larreta thanked Macri for his work as mayor and vowed to continue improving public education, health and security for Argentina’s capital city.“I’m optimistic about the future because with Mauricio (Macri) as president, Argentina will recover its path of growth and well-being for all. And that will benefit all of the citizens of Buenos Aires as well,” he said.With Buenos Aires’ 2.5 million voters accounting for nearly 8 percent of Argentina’s voting population, the capital city’s election was being closely watched for tendencies for the Aug. 9 presidential primaries and the Oct. 25 national election.Both Rodriguez Larreta and Lousteau are critical of President Cristina Fernandez’s leftist government. The candidate representing Fernandez’s Victory Front coalition, Mariano Recalde, was knocked out of the race after finishing third in the first round July 5.Rodriguez Larreta has said he hopes to help achieve change for all of Argentina after the 12-year rule of Fernandez and her late husband and predecessor as president, Nestor Kirchner.The PRO had been hoping for a stronger margin in the mayor’s contest to give a boost for Macri’s chances in the presidential race. His main rival is Buenos Aires Gov. Daniel Scioli, who has been picked by Fernandez to continue the populist policies that began with her husband’s presidency. Fernandez is barred from seeking a third consecutive term.Restoring Argentina’s sense of pride and sovereignty after the country’s worst economic crisis in 2001 has been the central goal of Fernandez and Kirchner. The presidential couple negotiated or paid off most of Argentina’s defaulted debt, nationalized the pension system, kept energy cheap through subsidies and dug deep into the treasury to redirect revenue to the poor through handouts.But many Argentines are calling for change amid frustration with one of the world’s highest inflation rates, government currency and trade controls and corruption accusations that have penetrated deep into Fernandez’s inner circle.By Jonathan GilbertJuly 17, 2015BUENOS AIRES — Argentines filled the streets outside the rebuilt headquarters of a Jewish community center here on Friday, 21 years after a van loaded with explosives was driven into the building, killing 85 people in one of the deadliest anti-Semitic attacks since World War II.The annual ceremony at the site of the 1994 bomb attack has often been emotional with victims’ relatives pleading for justice in a case still unsolved and shaped by setbacks and controversy. This year, after the mysterious death of the prosecutor who led the bombing investigation for a decade, the ceremony was especially anguished.The crowd heard speeches extolling the work of the prosecutor, Alberto Nisman, including one drafted by his elder daughter, Iara, and dedicated a lengthy applause to him.“The death of Alberto Nisman was an event so tragic for society that it made us feel the echoes of that bomb on July 18,” Ariel Cohen Sabban, a committee member of the community center, the Argentine Jewish Mutual Aid Association, told the crowd.The ceremony was held on July 17 because of the Jewish Sabbath.The anniversary reignited a debate between Mr. Nisman’s supporters and his detractors, who say his focus on Iranian suspects was misguided. Separate ceremonies were held by victims’ relatives who have been critical of Mr. Nisman.For many of the victims’ relatives, however, the truth feels more remote than ever. Mr. Nisman, 51, was found dead at his home in January, slumped in a pool of blood with a bullet in his head.“After 21 years, we have nothing; all we have is another victim,” said Sofía Guterman, a retired private tutor, 72, whose 28-year-old daughter died in the bombing, referring to Mr. Nisman. “We’ve always clung to the smallest hope that some truth would emerge. But justice here regresses; it does not move forward.”As a siren wailed at the precise moment of the bombing, the crowd held up black-and-white pictures of the dead. Handwritten posters criticized Argentina’s public institutions for what are widely perceived as moves to obstruct justice. These include alleged maneuvers to distort the investigation involving former President Carlos Menem and a judge and prosecutors previously assigned to the case. They will appear in a much-awaited trial next month.The unresolved bombing points to “ills that beset Argentine society,” said Dina Siegel Vann, Latin America director for the American Jewish Committee in New York, who was here for the anniversary. “There’s a sense of skepticism that there are no resources to address this.”Investigators have still not established whether Mr. Nisman shot himself or was murdered. He was replaced by a team of four prosecutors.Mr. Nisman had accused President Cristina Fernández de Kirchner and her foreign minister, Héctor Timerman, of conspiring to derail his investigation. Mrs. Kirchner, Mr. Nisman claimed, had ordered back-channel negotiations to shield former Iranian officials he believed had planned the 1994 attack, in return for trade benefits.The accusations, which the government refuted, died in Argentina’s courts.Mr. Nisman was found dead hours before he was due to present his findings before Argentina’s Congress. A pistol he borrowed from an assistant, used to fire the fatal bullet, was beneath his body, and a spent cartridge was at the scene.While those in the crowd largely supported Mr. Nisman and his focus on the Iranians, the anniversary emphasized fissures in the Jewish community over how the investigation should proceed.“We systematically confronted Nisman about the orientation of his investigation,” said Laura Ginsberg, 57, a university professor whose husband died in the bombing. Ms. Ginsberg, who did not attend the ceremony, is aligned with victims’ relatives who believe Mr. Nisman was coerced into focusing on Iran.While many people hope that the impending trial involving former President Menem could provide new information on the bombing, Ms. Ginsberg said she could no longer trust Argentina’s judiciary. “It won’t take us toward the truth,” she said.As the anniversary shifted attention to the bombing, and away from Mr. Nisman, some said his death might pave the way for justice.“I don’t think Nisman was the key to solving the case,” said Horacio Lutzky, 55, a lawyer who has researched the bombing for years and wrote a book, “Toasting Amid the Rubble.” “Perhaps this tragedy will allow the case to embark on paths that had been abandoned.”Others saw the anniversary as a time to reflect on wider issues, like perceived undercurrents of anti-Semitism. “When Jews feel scared, they unite,” said Roberto Pikholtz, 72, a retired businessman, pointing to the large crowd.Mostly, there was a sense of desperation. “The death of the prosecutor is a phenomenal blow to the search for the truth,” said Luis Czyzewski, 71, an accountant whose 21-year-old daughter died in the attack. His wife survived.Mr. Czyzewski recalled running toward the wreckage of the community center, past shards of glass and broken blocks of masonry. He wrestled past police officers, who had sealed the site. He found his wife, her face blackened and bruised.Their daughter, Paola, was among the first to have died in the blast, experts later told Mr. Czyzewski.“Each year, you feel worse than the last,” he said.By Benedict Mander in Buenos AiresJuly 19, 2015Soledad Rodríguez Pons admits she had no idea what bitcoin was when it was suggested to her two years ago that the digital currency could provide a neat way of dodging Argentina’s strict capital controls.“I was suspicious at first,” says the 29-year-old owner of a budget hostel in Buenos Aires.“But I took the risk, and it was well worth it,” she adds, explaining that she takes credit-card payments from foreign tourists in return for the digital currency. At the moment, she can sell her bitcoins on Argentina’s unofficial currency market for 50 per cent more than she would get at the official exchange rate.The prolonged use of capital controls in Argentina since 2011 has wreaked havoc for businesses operating in South America’s second-largest economy — not only restricting access to foreign currency and leading to a heavily overvalued official exchange rate, but also exacerbating economic stagnation and double-digit inflation.Under the leftist government of President Cristina Fernández, no immediate change is expected in Argentina’s complicated economic conditions, which have seen the use of bitcoin more than double over the past year, mainly among small businesses. This represents much faster growth than elsewhere in Latin America, according to bitex.la, a regional bitcoin exchange.Recent raids on currency trading houses and new powers for the national spy agency to prevent speculative attacks pushed the peso’s black market value this week to its lowest levels since Argentina defaulted last year on its foreign debt for the second time this century.Greek woe brings powerful sense of déjà vu for ArgentinaHealth and hospital workers advance towards Buenos Aires’ Plaza de Mayo during a protest by various workers unions 29 August 2001.On a cruise round the Mediterranean, Domingo Cavallo, Argentina’s economy minister in the run-up to the country’s dramatic economic collapse in 2001, was bemused when he was unable to use his credit card during a brief stop-off on Greek soil last week.However, presidential elections in October are expected to bring in a more market-friendly administration, and investors hope that untangling capital controls will be one of the top priorities for the new government. That has triggered a heated debate over how to defuse a situation that has caused an investment drought in Argentina.“As always happens with such controls, it is much more complicated getting rid of them than it is putting them in place,” says José Luis Espert, an Argentine economist.The two leading candidates advocate sharply differing methods. Daniel Scioli, the one-armed governor of Buenos Aires province backed by Ms Fernández, favours a more gradual approach, although there is growing concern that his government ties will limit his room for manoeuvre.Mauricio Macri, the centre-right mayor of the city of Buenos Aires, backed by the markets, prefers a more immediate solution.Although Mr Espert also recommends a swift removal of capital controls, he says it must be accompanied by a “technically solid economic plan” that inspires strong confidence in the markets. “Without a credible plan, shock treatment can be just as damaging as a more gradual approach,” he warns.José Urtubey, vice-president of the Argentine Industrial Union (UIA), a powerful business chamber, doubts that shock therapy will work. Although capital controls played a big part in a 2.6 per cent contraction in Argentina’s industrial sector last year — foreign currency is essential to import materials needed for industrial production — he fears that central bank reserves could not withstand the pressure on the currency generated by the controls’ sudden removal. “The remedy could be worse than the illness,” he says.As always happens with such controls, it is much more complicated getting rid of them than it is putting them in place– José Luis Espert, Argentine economistSuch resistance to change explains why Mr Espert believes that Argentina’s volatile economy has for the past half century been stuck in a “vicious triangle”, whose vertices are crisis, followed by a rebound and then mediocrity — which every decade or so leads to another crisis.“Soon there will be another one,” he says, pointing to a lack of consensus over how to fix the country’s serious macroeconomic imbalances, especially a gaping fiscal deficit, which he fears will lead to more mediocrity. “Argentina finds it very difficult to escape that triangle. We are afflicted by a kind of [economic] Stockholm syndrome,” he says.If the future of Argentina’s economy is as gloomy as Mr Espert fears, that would be good news for bitcoin, which is still in its infancy in Argentina, with only about 6,000-8,000 users.Franco Daniel Amati, a co-founder of Bitcoin Argentina, a kind of embassy for bitcoin in the heart of the Buenos Aires financial district, is optimistic about prospects for the digital currency in a country where still only half the population entrust their money to the formal banking system.“A recurring inflation crisis, capital controls and overall financial repression make life very difficult in Argentina. More and more people here are looking for ways to get around these problems, and bitcoin is the perfect solution,” he says.19 July 2015BUENOS AIRES, July 19 (Reuters) – Argentina’s business-friendly PRO party won the Buenos Aires mayoral runoff on Sunday, clinging to its stronghold for a third consecutive term ahead of presidential elections in October, but prevailed by a smaller-than-expected margin.Outgoing mayor and PRO presidential candidate Mauricio Macri had sponsored the campaign of his chief of staff Horacio Rodríguez Larreta, who won 51.6 percent of ballots cast on Sunday, official returns showed.That put Larreta only a few points ahead of ECO party candidate Martin Lousteau, who picked up 48.4 percent with 99 percent of the vote counted. Larreta had been expected to leave Lousteau trailing by a margin of 9 to 13 points.With Buenos Aires, the PRO’s power base, accounting for about 8 percent of Argentina’s national vote, Macri would have hoped his party would win by a wider margin.He must drum up support elsewhere to win in the presidential elections on Oct. 25.“I would like to thank Mauricio (Macri) for showing that it is possible in Argentina… to transform reality,” Larreta told cheering and clapping supporters in a televised speech.The candidate of President Cristina Fernandez’s party, Front for Victory, had crashed out in the first round of voting two weeks ago. Since then, party members have dismissed the runoff as irrelevant, saying the PRO and ECO are much akin.Those who voted ECO – a regional alliance – in the Buenos Aires elections could end up voting PRO on a national level.The outgoing president is constitutionally barred from seeking a third consecutive term. She has endorsed the candidacy of Daniel Scioli, governor of the Buenos Aires province.Fernandez is faulted by big business for imposing a web of currency and trade controls that have hurt the economy, which has teetered on the brink of recession over the past year and has one of the world’s highest inflation rates.The Buenos Aires elections have highlighted her party’s lack of popularity in the capital.But the Front for Victory remains popular in Argentina’s provinces in part because of this government’s generous subsidies. Scioli, who is expected to keep some of Fernandez’s policy mix but return to slightly more orthodox economics, is leading polls.5. ARGENTINA IS STILL HELPING IRAN COVER UP ITS ROLE IN THE BOMBING OF A JEWISH COMMUNITY CENTER 21 YEARS AGO (Business Insider)By Toby Dershowitz, ContributorJuly, 18, 2015July 18th marks 21 years since the largest terrorist attack in Argentina’s history: the bombing of the AMIA Jewish community center in Buenos Aires, which killed 85 individuals and wounded hundreds more. Evidence is mounting that Argentina’s president is seeking to whitewash Iran’s role in the attack.Earlier this year, Argentina’s special prosecutor in the case, Alberto Nisman, met a suspicious death just one day before he was due to present evidence of a secret Iran-Argentina backchannel. Nisman had already implicated senior Iranian officials in the 1994 bombing. As a result of his investigation, INTERPOL had issued red notices (tantamount to international arrest warrants) for these Iranian officials.But Argentine President Cristina Fernández de Kirchner’s government has taken a series of steps that appear aimed at covering up Iranian involvement. In the latest example, the Argentine government is trying to reverse a court decision that ruled an Iran-Argentina Memorandum of Understanding related to the AMIA attack (MOU) unconstitutional.In 2013 Kirchner’s government signed an MOU with Iran that ostensibly would have had the two countries jointly investigate the AMIA bombing. Nisman believed the MOU’s real purpose was to rid Iran of culpability in the attack.Then-Iranian foreign minister Ali Akbar Salehi argued that according to the MOU, “INTERPOL must eliminate the charges against the Iranian authorities.” Salehi, a nuclear scientist and head of the Atomic Energy Organization of Iran, was a key part of the secret backchannel.In 2014 a lower court determined that the MOU was unconstitutional and that it interfered with an independent judicial investigation. That ruling was being reviewed by a panel of three judges in the country’s highest criminal court, the Court of Cassation, which is second only to the Supreme Court in Argentina’s legal system.The panel of three judges was set to hold a hearing to announce its decision on June 22, but it was abruptly canceled. Three days later, Judge Luis Maria Cabral was removed by the Judicial Council without explanation and replaced by Judge Claudio Marcelo Vazquez, who is recognized as supportive of the government’s agenda. The Judicial Council, which holds a pro-government majority, took this action following new authority it was granted to replace surrogate judges with appointees more supportive of the government’s agenda.Judge Cabral is the head of the Argentine Association of Magistrates, an organization that vigorously opposes efforts by the executive branch to interfere in the judiciary. His term had no end date.Why would the Judicial Council suddenly remove him? Perhaps because Cabral had expressed his intention to uphold the lower court’s 2014 ruling that found the MOU unconstitutional — a position the government opposed.Four opposition members of the House of Deputies then filed a formal federal complaint against the Judicial Council demanding that Cabral be reinstated. AMIA and DAIA, the Jewish organizations that filed the original court challenge against the MOU, demanded that Cabral’s final opinion be used in the resolution of the case.Cabral was removed during a session called with little advanced notice. One of the members of the Judicial Council, National Deputy Gustavo Valdes, said the government prevented him from attending the session by holding up the flight he was to take to get there.Valdes’s flight on the state-run airline Aerolineas Argentinas was abruptly canceled. Poor weather was cited, despite the fact that the weather was fine in both the departure and destination cities. The pilots had received orders from the airline not to leave their hotel, according to media reports. The airline’s CEO is Mariano Recalde, who is also the government party candidate for mayor of Buenos Aires.Judge Cabral filed a complaint to the Federal Administrative Court and argued that “it is incredible to illegally substitute one surrogate judge for another.” The government is seeking to “discipline” the judicial branch, he said.Buenos Aires City prosecutor Martin Ocampo said, “I believe the process by which Cabral was removed is unconstitutional.”Removing Cabral from his position days before a decision was to be rendered is part of a disturbing pattern of activities by Kirchner’s government, whose singular purpose appears to be ending Nisman’s investigation of Iranian complicity.The Kirchner government replaced Nisman with three pro-government prosecutors, and engaged in an aggressive campaign to discredit Nisman. This included an effort to characterize his death as a suicide, despite substantial evidence to the contrary. Meanwhile, judges and a prosecutor known to be supportive of the government declined several requests to investigate the complaint Nisman filed about the government’s secret back-channel negotiations with Iran.Argentinian journalist Eduardo van der Kooy writes that Kirchner’s “pact with Iran is what is keeping her awake at night the most.” If the Court of Cassation were to uphold the unconstitutionality of the MOU, that declaration “would include lethal arguments that would blame the President for having … surrendered to another nation the prosecution of a tragedy that happened on [Argentinian] soil.”This would translate into treason, he said, and would “prevent Cristina’s desire to leave power with glory. For that reason she is demanding closure of the Iran circle. Even at the cost of undoing the judiciary.”Argentina should not be allowed to bury the truth of Iran’s involvement in the AMIA bombing along with Nisman.And as our own government reviews its terrorism policy and threats to our homeland, it should ensure Iran continues to be held accountable for its role in the 1994 atrocity.Toby Dershowitz is Vice President for Government Relations and Strategy at the Foundation for Defense of Democracies, a non-partisan think tank in Washington, DC6. WHY THE AMIA MASSACRE AND MYSTERIOUS DEATH OF ALBERTO NISMAN STILL HAUNT ARGENTINA (The Daily Beast)By Michael LuongoJuly 20, 2015This weekend Argentina remembered one of the worst massacres of Jews since World War II, and the mysterious death of the special prosecutor just as he was about to accuse the country’s leadership of a coverup.BUENOS AIRES—The names of streets and neighborhoods in Buenos Aires often commemorate historical events.Most relate to its revolutionary period, like Nueve de Julio, often tagged the world’s widest avenue, for the 9th of July, Argentina’s Independence Day.A more recent July date lingers in Argentine memory: July 18, 1994, when a car bomb ripped through AMIA—La Asociación Mutual Israelita Argentina—the Jewish community center in Buenos Aires’s Abasto neighborhood.Though the country denies involvement, Iran has long been blamed for the incident, which was Argentina’s worst terror attack.Every year, the event is commemorated with a ceremony in front of the since reconstructed and now heavily fortified AMIA.This year with the true anniversary on Shabbat, the Jewish holy day, it was held the morning of Friday, July 17.The attack date marks another anniversary: it is 6 months since the death of special prosecutor Alberto Nisman, found dead January 18 under mysterious circumstances, days after announcing he would reveal evidence accusing the country’s highest authorities of complicity with Iran in covering up the AMIA bombing.As reported in two New Yorker articles, Nisman was found dead in the bathroom of his apartment in the Puerto Madero neighborhood of Buenos Aires. He had a bullet wound to his head and a 22 caliber gun near his hand.The gun was apparently lent to Nisman by his assistant when he feared being murdered. There were no signs of forced entry or robbery in the apartment. In a garbage can at the scene a copy of a draft of a warrant calling for the arrests of President Cristina Fernandez de Kirchner and foreign minister Hector Timerman was found.Four days before he had accused them of being involved in a cover up to protect those involved in the AMIA bombing. More than a decade of Nisman’s life had been spent investigating AMIA and the coverups.The theme of the 21st commemoration is ‘Victims of Terrorism, Victims of Impunity’, and Nisman’s death slashes open the wounds of survivors and those who lost loved ones.A series of events, exhibits and a renamed subway station, completely redesigned as a memorial to AMIA, marked this year’s anniversary.Bearing Witness As A SurvivorAna Weinstein, Director of AMIA’s Marc Turkow Center of Documentation and Information on Argentine Judaism and of the Vaad Hakehilot Federation of Argentine Jewish Communities, is a survivor of the bombing.That year was meant to be a happy one, the organization’s 100th anniversary. Weinstein, who explained personally and not as a representative of AMIA, told the Daily Beast, “Every July 18, it brings me back to the moment. This shock that somebody wants to kill you. It is a very strong feeling.”While the commemoration generally followed the same pattern as in years past, Weinstein said Nisman’s death added new elements.“This anniversary has to do with some ingredients that we cannot ignore, about the shocking thing that happened with Nisman, his appearing dead.”She added, a sense of both sadness and anger in her eyes, “It shocked me, because it was death again. Somebody is dead again related to AMIA bombing. Somebody is dead again and I had this feeling that we would never know exactly what happened, like we don’t know exactly what happened with this bombing.”Weinstein, who has written several books on AMIA, emphasized the significance of the event Nisman was investigating.The 1994 bombing was the largest terrorist attack on Argentine soil, and is one of the largest massacres of Jews in the post-Nazi period.She said, “it was the first attack against a Jewish premises, against Jews, and where 85 people were killed, not all of them Jewish. This speaks of something that is very big in its intensity of destruction and hate.”It followed an earlier similar bombing, on March 17, 1992, of the Israel Embassy which killed 29 people.Argentina has the sixth largest Jewish population in the world, and the largest in Latin America, with estimates ranging from 250,000 to 300,000, according to Weinstein.Weinstein feels the size of the AMIA case and its unsolved nature have a bearing beyond Argentina.“Those organizations that are aware that hate and discrimination and violence and fundamentalist thinking connect with each other, are aware that is dangerous for the world and for society. Attacking Jewish targets means any other day they can attack other targets that are not Jewish as well,” she said.The case’s mysteries have exacerbated the emotions of those connected to the tragedy.“We do not have justice after twenty years. Relatives who have lost their loved ones don’t know who is to be blamed. That is the most important thing to understand, and that is the thing that is the most difficult thing to understand, because of course we don’t have any answers. Things like that don’t happen unless they cross political situations. Somebody who was very high up may have come very close to knowing the truth.”Art and PainThroughout Buenos Aires, art spreads knowledge of the AMIA bombing, connecting it to other forms of hatred during the commemoration period.In the downtown Corrientes Avenue theater district, AMIA worked with SIGEN, the Sindicatura General de la Nación, or Office of the National Comptroller, to exhibit murals through August not only on AMIA, but on genocide across the world.Perhaps the most impactful is a three by nine meter mural Olvido Terminal, ‘Forgotten Terminal,’ a concentration camp scene by Mariano Sapia.Swastikas adorn black flags in the background of an industrial landscape. Grey and brown bodies flow down a cliff, a silhouette of a woman on her knees, a gun to her head, nearby.Clouds of black smoke from chimneys form faces. Train tracks lead to cattle cars, gallows with hanged men to one side, women, naked, lined up on the other.Emaciated men stare through barred barracks windows. The only brilliant colors are a row of children in the foreground who seem newly arrived, some with dolls and teddy bears.They stare out through barbed wire with unsure, frightened expressions at eye level with children who come to see the exhibit, as if to connect them to the historical tragedy.At Recoleta Cultural Center, a public art space within a former convent adjacent to Recoleta Cemetery where ‘Evita’ (Eva Peron) is buried, a small exhibit open through August features two pieces of interactive art: ‘Illustrated Memory,’ from graffiti art collective Buenos Aires Stencil; and ‘Carriage of Memory’ by Jorge Caterbetti, a cart loaded with boxes full of mock Supreme Court documents related to AMIA and other Argentine tragedies along with an accompanying video.Inside AMIA, Argentine artist Milo Lockett worked with students and organization staff on new murals to exhibit at SIGEN.Lockett told the Daily Beast that art can “transform this pain into love. I can’t say that pain can change. But pain can transform into truth. And I believe that we have to say that we artists are present and are participating. Not only as artists but as Argentine citizens.”Lockett, who is not Jewish, feels the AMIA tragedy can be a unifying force.“AMIA is the cause of all of Argentina. It is not just for Jews and for the Jewish community. It is a question of the state. I don’t want to show that this is a country without impunity, but that it is a country that searches for the truth. And the truth needs to come into the light. It is a shame that for these 85 victims, it has been 21 years, and how many presidents, and they cannot clarify what happened with the attack.”AMIA’s Youth NightThe night before the main commemoration, nearly 1,500 people participated in AMIA’s Youth Night, according to one AMIA staffer.The event, with displays, bands, and speeches grew out of an earlier, informal vigil in which young people stayed near AMIA until daybreak, according to 28 year old Marianela Aprosof, who was there representing MASA Argentina, an organization bringing young Argentines to Israel.Aprosof acknowledges most young attendees have no direct knowledge of the bombing.At the same time, she feels youth must know more than just AMIA’s tragic history. “AMIA is an institution, with events, programs, things for kids, and information. The young people need to think of it as more than just the day the bomb happened,” she told the Daily Beast.Youth Night, Aprosof said, is also growing in popularity. However, she did not feel Nisman’s death played a role.Instead, she said, “the real reason more are coming is because the cause is not being investigated. It is not just Nisman.”Iran and ImpunityOn a cold, sunny Friday morning, nearly 6,000 people attended the main ceremony on July 17, according to AMIA press coordinator Marcela Pieske.Nearly all the stores along the route were closed, but the faint smell of zataar hung in the air, testimony to the many Sephardic and Mizrahi shops and kosher restaurants open the day before.Family members and survivors were near the stage, youth groups behind them. Many held images of victims on small posters, their life stories printed on the back.At 9:53 a.m., the time of the bombing, a sense of shock and silence fell over the chatty crowd as an air raid siren echoed through the streets.At times crying, Argentine television journalist Cristina Pérez served as mistress of ceremonies, introducing speakers and family members who read the names of victims, the crowd shouting “presente” after each one.At points, readers choked into tears, perhaps when they had come to the names of their family members.Among the most powerful speeches, his voice booming against the stucco facades of the surrounding buildings, was that by Ariel Cohen Sabban, AMIA’s Director and the President of the Federation of Jewish Communities of Argentina.Cohen Sabban spoke of Hezbollah and Iran’s involvement in the bombing, demanding Argentina’s government work with Interpol in “actively seeking out the Iranian suspects, and that the requests for their capture are not just a formality.” (Here is a link to the text).Nisman was also a concern in Cohen Sabban’s speech with the reminder, “Tomorrow will also be six months after the death of the prosecutor Alberto Nisman. An event so traumatic for society that it made us feel the echoes of the bomb of July 18.”He added that as with AMIA and the impunity around the original investigation, the mystery of Nisman’s death leaves Argentines wondering, “what happened and how did the prosecutor die investigating the bombing?”Nisman’s death was, in essence, added to the total number of victims of the AMIA bombing that day.His elder daughter, Iara Nisman, 15, walked on stage to emotional applause to light a candle and place a rose into a stand marked Justice and Memory.Perez read a speech prepared by Nisman in which she wrote, “I wanted to thank you for the place you have given to pay homage to my dad and convey that, even though my pain is more recent, I understand and share the long route of searching and suffering that you have carried for 21 years.“Because I saw how much my dad worked for justice and heard from him the details and stories behind the families of the attack.“Both my sister Kala and I, we ask you to join us and help to find the truth about what happened to my dad, no matter what happens, without giving importance to things that are sometimes said to dirty him, because he cannot defend himself when they try to detract from his effort and work.” (This is the original text of the speech from La Nacion).Special prosecutor Viviana Fein, a long time colleague of Nisman, is in charge of the investigation into his death. Fein is currently pursuing a forced suicide theory in explaining the death.Redesigned Subway Station Honors AMIA DeadThe same week, the closest subway station to AMIA, the B-Line’s Pasteur, was renamed Pasteur-AMIA.The memorial went far beyond name, the station redesigned with artworks and interactive displays in a commemorative form known in Argentina as an Espacio de la Memoria, or ‘Space of Memory.’A large niche in the subway station lobby contains a bold, black and white placard in Spanish explaining the attack, an English version to its side.A relic from the bombing, a twisted broken typewriter, is set in a glass display case within a wall adorned with images from a vigil held soon after the attack.A touch screen allows visitors to tweet their thoughts on AMIA, record short voice messages and examine photos and stories of the 85 victims.On the subway platforms, an electronic calendar counts the number of days the terror attack remains unsolved.The rounded platform walls are decorated with new ceramic works by 25 artists, largely in political cartoon format.Some of the individual pieces are remarkable for their criticism of Argentina’s government.One contains an image of the Casa Rosada, the Presidential Palace, splattered in blood; others have blind justices or authority figures asleep while AMIA is attacked. Some are sentimental, parents talking to children about AMIA and other Argentine tragedies.Family members of the AMIA victims appreciate the city’s new memorial. Mario Averbuch, whose daughter Yanina died in the 1994 bombing, told the Daily Beast inside of the station as he made his way home after speaking at the ceremony, “It was a fight to get this done, but we made it happen.”Another family member, Sofia Guterman, whose daughter Andrea died in the attack, told the Daily Beast that the redesigned subway station was, “a work of love, re-expressing the tragedy that is so terrible.”Guterman added, “For us, it’s very important, because within this subway station pass millions of people. They are going to look at this. This goes from the older people who remember when this happened to the new generations who are going to pass this and ask, ‘What happened? What is this?’”A new trial has been set for August 6 to examine the coverup of bribes related to the original investigation of the AMIA bombing.This weekend Argentina remembered one of the worst massacres of Jews since World War Two, and the mysterious death of the special prosecutor just as he was about to accuse the country’s leadership of a cover-up.Regarding Nisman’s investigation and mysterious death, Guterman said, “It was many years that he was doing this. You don’t have to imagine that people wanted to kill him. This was not suicide. They killed him. Now, we don’t know anything.“If we don’t keep fighting for this, there will pass year after year since the attack on AMIA, without knowing anything. Nor will anything happen for Nisman either. Every day we are further from the truth.”It is for this reason that she appreciates the annual commemorations, and the new memorials.“Memory is very important, because there is no justice,” Guterman said. “So we have to work very hard for the sake of memory, because memory is the justice that we have.”By Peter KohliJuly 17, 2015Another pivotal election in the developing world will take place on October 25th in Argentina. The current president, Christina Kirchner, is prohibited from seeking a third term, though for a time there was speculation that she might try and run for congress. That idea has now been put to rest. She certainly has had a rocky eight years in power, which saw the economy of the country go from bad to worse.It’s demeaning for the head of any country to resort to racism as a way to deflect from the problems taking place under their watch. But according to Commentary Magazine, that is exactly what happened recently when Ms. Kirchner visited a school and asked the students what they were reading in Shakespeare. “In one tweet, Kirchner recounted how she had asked students she met which Shakespeare play they were studying. When they told the president they were studying Romeo and Juliet, Kirchner said she responded, ‘I said, “Have you read The Merchant of Venice to understand the vulture funds?” They all laughed. ‘No, don’t laugh. Usury and the bloodsuckers were immortalized by the best literature for centuries,’ she then tweeted to her two million twitter followers.”Additionally, the Wall Street Journal reports that the poverty level in Argentina has gone from 24.7% in 2011 when Ms. Kirchner was reelected, to 28.7% this year. Though she actually had the nerve to tell a United Nations meeting that due to her policies, that rate has actually fallen to 5%. How laughable!Meanwhile, the people of Argentina suffer. We can only hope that they will not vote for her named successor, Daniel Scioli, and instead vote for the center right candidate, Mauricio Macri, who is viewed as being market friendly. The current inflation rate in Argentina is 15%, while the interest rate, at 24%, is one of the highest in the world.As far as investing is concerned, there is only one Argentina focused ETF, Global X MSCI Argentina ETF (Argentina (PZE) Shares Cross Below 200 DMAPowered by Market IQ) which has a YTD return of 8%.Just to think that at the turn of the last century Argentina was one of the richest countries in the world. Oy vey!8. ARGENTINA’S INFLATION REMAINS AT HIGH LEVELS WHILE OUTLOOK PREDICTIONS SUGGEST STAGNATION IN SHORT TERM (IHS Global Insight Daily Analysis)By Paula Diosquez-Rice, Mario Guillen17 July 2015Although consumer confidence in Argentina has increased according to a poll, more than half of respondents expect a bleak economic situation in the coming year.OutlookAccording to Argentina’s National Statistical Office (Instituto Nacional de Estadística y Censos: INDEC), consumer inflation remained at 1.0% month on month (m/m) and 15.0% year on year (y/y) in June.The category of other goods and services posted the quickest increase, up by 3.2% m/m, followed by the leisure category, up by 1.7% m/m, and the equipment and household maintenance category, up by 1.2% m/m, the same increase observed in the category for medical attention and health expenses.Inflation figures presented by the opposition in Congress point to a rise of 1.53% m/m and 27.9% y/y, contrasting with INDEC’s figures. With regards to inflation expectations for the next 12 months, Torcuato di Tella University reports a rise of 2 percentage points, placing it at 30%, according to the median, while average expected inflation in annual terms rose to 30.5%.Argentina’s economic distortions are a result of the government’s interventionist approach to economic policy. Bans on trade, currency exchange controls, wage ceilings, and more red tape for companies were aimed at reducing capital flight, but have severely compromised the country’s economic flexibility and, therefore, a readjustment of the productive sector.Dismantling these distortions will be the main political topic during the presidential campaign in the run-up to the election in October, with speculation on the pace of reform and its effects on the value of the peso. As the balance of trade points to a loss of competitiveness, the magnitude of a necessary devaluation will be a key element of sensitive reform.Even if changes are implemented relatively quickly, institutions such as the International Monetary Fund (IMF) expect the current recessionary environment to persist until 2017, the IMF revealed in its latest report.17 July 2015The recent fall in international oil prices has led Argentina’s state oil company, Yacimientos Petrolíferos Fiscales (YPF), to focus on projects that seek to improve competitiveness, especially in Vaca Muerta, a shale oil field that will require huge investments to commercialise. New investments to increase production of conventional oil will help to reduce the energy trade deficit, which has persisted despite the domestic economic downturn and falling prices.In May YPF released a report showing the results of three years of state management (the company was re-nationalised in May 2012). In this period natural gas production rose by 25%, oil output grew by 10% and reserves expanded by 24%. Investments totalled US$6.1bn in 2014, well over double the 2011 level. The company’s sales rose by 30%, and pre-tax income increased by over 40%. Production continued to grow in the first three months of 2015: YPF’s oil output rose by 5% and its production of natural gas rose by 14%. This compares with a 1% decline in total national oil output and a small rise of 2% in national gas output.New announcements suggest growth in outputSince the release of the May report YPF has made several announcements that are indicative of further output growth. At the end of May the company announced the find of a new conventional oil field in Los Caldenes, located in Northern Río Negro province. Exploration works had started last year, and the field’s potential resources now amount to 40m barrels. Soon after, YPF announced an agreement with Petrolera Pampa (which belongs to Argentina’s Pampa Energía group) to increase existing investment in Rincón del Mangrullo, in Neuquén province, to expand the production of tight gas. In December 2014 Pampa Energía had presented YPF with a US$150m project to improve surface facilities, in order to double the capacity of natural gas treatment plants to 4m cubic metres of natural gas per day. This project has now finally been approved. Pampa Energía will also invest US$22.5m in drilling new wells to expand gas production in the area. Both companies will jointly invest US$40m for new exploration in that area.Although these projects will help to raise YPF’s production of conventional oil and natural gas, the company’s key project continues to be Vaca Muerta, a shale oil field located in Neuquén, with a potential output of 23bn barrels. The president, Cristina Fernández de Kirchner, recently announced the construction of a railway to connect the port of Buenos Aires, the capital, to the Vaca Muerta field, seeking to cut transport costs for imported inputs by a quarter. This could prove important in the light of the recent drop in oil prices and the drop in competitiveness caused by renewed real appreciation of the Argentinian peso this year. YPF has also announced that it will start import-substitution of the sand needed for the fracking process at Vaca Muerta, which is also expected to cut down drilling costs. These announcements should help to ease labour tensions that recently erupted in Neuquén, when construction workers blocked roads in the province, warning that around 400 workers (around 15% of those working in construction activity in the shale field) could be dismissed, owing to a delay in the Vaca Muerta construction works caused by a drop in oil prices.The Vaca Muerta project remains crucial if the country is to overcome the energy crisis that has come about as a result of a decade of government intervention in the sector via tariff freezes, price controls and export taxes, which have driven a decline in oil and natural gas production and reserves. This has produced problems for the balance of payments: in 2014 the energy trade deficit was above US$6bn. Although in the first four months of 2015 the deficit decreased, it did not disappear altogether, despite the domestic economic downturn and the drop in international oil prices. The latest announcements will go some way to reducing the energy trade deficit further. However, commercialising Vaca Muerta will require a much larger investment commitment over time, and it will fall to the next government, which will take office in December 2015, to secure these long-term commitments.By Charles Newbery17 July 2015Buenos Aires (Platts)–17Jul2015/202 pm EDT/1802 GMT A federal judge in Argentina has ordered state-run energy company YPF and other parties to hand over information for an investigation into alleged overpayments and other irregularities in the purchase of LNG.At YPF, a source confirmed the arrival of the request.“We are collaborating with the justice system,” the source said on the condition of not being identified. “We are complying with the order for documentation.”Judge Claudio Bonadio issued the order on Friday. In addition to YPF, officials delivered the order to Enarsa, a state company that oversees LNG imports, and the Planning Ministry, which oversees national energy affairs and Enarsa, according to a report by La Nacion newspaper.Bonadio’s office could not be reached for comment. Enarsa likewise could not be reached for comment and the Planning Ministry’s press department declined immediate comment.YPF has handled LNG purchases at the request of Enarsa since the former came under state control in 2012.Bonadio is investigating a case presented last October by Federico Pinedo, Patricia Bullrich and Laura Alonso, lawmakers for the right-wing opposition party Republican Proposal.The lawmakers filed the case based on claims that Argentina may have overpaid for LNG supplies in recent years.The allegations derived from comments by Roberto Dromi, a lawyer and former minister of Public Works and Services, about a lack of transparency and illegalities in the tenders for cargoes. The remarks raised suspicions that officials and advisers involved in the tenders and the purchases may have benefited personally from the deals.Dromi made the comments in an interview published in La Nacion newspaper on October 18, 2014, according to a copy of the complaint.Dromi’s consultancy had worked for several years advising LNG suppliers on doing business with Argentina. “The contract was done in English, with secret clauses, armored keys and nobody knows the specifications, or price, or anything,” Dromi said in the interview.YPF has denied any irregularities.Argentina imports an average of 30 million cubic meters/d of gas, some by pipe from Bolivia and some as LNG.By John HopewellJuly 20, 2015First-half 2015 Argentine box office soars to modern-day record as national cinema awaits ‘The Clan,’ ‘Truman,’ ‘The King of Once’MARBELLA, Spain — Argentina’s Mar del Plata Festival, Latin America’s only “A” grade fest event, has moved forward to an early November berth, running Oct. 30 to Nov. 7 this year, Lucrecia Cardoso, president of Argentina’s INCAA Film Festival, confirmed Saturday at the 2nd Platino Awards.Approved by the Intl. Federation of Film Producers Assns., (FIAPF), the film festival regulator, the change is to avoid a clash with potential second-round voting in Argentina’s upcoming general elections, she added.Celebrating its 30th edition in 2015, Mar del Plata moved last year to a later date, just one week before early December’s Ventana Sur, running Nov. 22-24. That allowed the fest, which was graced by the presence of Viggo Mortensen and Paul Schrader and saw a hike in attendance to around 130,000 in tix sales, to begin to spark synergies with Latin America’s premier film mart: Mar del Plata’s Work in Progress took place only three days before Ventana Sur, for instance.The Mar del Plata Festival will once more host Argentina’s Encuentro de Comunicacion Audiovisual (ECA), an annual meet which debates the future of Argentina’s film/TV biz. This year it will also see a FIAPF board meeting.Mar del Plata has yet to announce its industry activities, which may well build on its successful Work in Progress event, or, as it 2015 dates half clash with the American Film Market, potential links with Ventana Sur.Backed by Argentina’s powerful INCAA state film-TV agency, which co-launched Ventana Sur with the Cannes Festival and Film Market in 2009, Mar del Plata is also building as a springboard for young Argentine talent at a time when Argentina is producing a clutch of the most ambitious movies to come out of Latin America, such as Damian Szifron’s “Wild Tales,” which swept the Platino Awards on Saturday, and now Pablo Trapero’s “The Clan,” which bows Aug. 13 in Argentina, plus Lucrecia Martel’s “Zama.”Argentina is also emerging as an en energetic international co-producer not only with Europe but also the rest of Latin America. In Marbella, Cardoso pointed out that over 2009-14, more than 50% of INCAA-backed films, via its main subsidy lines, were international co-productions,linking up with 24 countries in total.Awaiting some of its biggest 2015 plays – “The Clan,” Cesc Gay’s “Truman,” Daniel Burman’s “King of the Once” – Argentine films’ domestic market share to date this year is around 11%, thanks to adolescence-themed “Abzurdah,” “No Kids,” Santiago Mitre’s Cannes Critics’ Week winner “Paulina” – which has notched up 108, 508 admissions, three times the trawl for his debut, “The Student,” four years ago – and “Socio por accidente.” Argentina punched 25 million admissions first-half 2015, a record since 1986, Cardoso said.2015’s national film share might not break Argentina’s 2014 17.8% modern record, driven by “Wild Tales,” but should be significantly up on the average for years before 2013 when Argentina’s national share rose to 15%, she observed.“Argentina’s production section is growing, and making films at a higher scale and ambition,” she added, by way of explanation.Mar del Plata’s “A”-grade status points in popular parlance to its being one of FIAPF’s 15 fests – along with most, but not all, the biggest festivals in the world such as Cannes, Berlin and Venice – which are accredited by FIAPF as competitive feature film festivals.By John MalathronasJuly 17, 2015(CNN)The Buenos Aires railcar on Line A is air conditioned and sparkling new, as is its destination, Flores metro station.I’m sure it’s just a coincidence that Pope Francis comes from Flores.It’s because of the pontiff that I find myself at 3 p.m. outside the Basilica of San Jose, an 1880s church with a facade of Corinthian pilasters and an impressive Italianate clock tower.It seems a gigantic church for a minor middle-class parish, but in the 19th century Flores was the abode of prosperous landowners whose estates hosted political conferences and witnessed lavish parties.I’m here to join a walk to the Pope’s old stomping grounds.Daniel Vega, a guide with a booming voice and clearly enunciated Spanish meets me and three ladies from northern Argentina.This being Latin America, we spent the first 15 minutes getting to know each other.Our tour starts in the basilica because, as Daniel maintains, a 17-year-old Jorge Bergoglio — now known to the world as Pope Francis — had his epiphany in that confessional on our left.Flight from fascism“It was September 1953, springtime,” says Vega. “Jorge was off to meet his friends who were waiting in the square. When he passed by the basilica, somehow he felt the need for a confession.“He heard no voices, saw no visions, but that confession was a transcendental experience. He left with a strong conviction that he had to become a priest.”What about his friends?“He forgot about them and went home.”Outside, Vega gives us the back story.How the Bergoglio family had a candy store in Portacomaro, in Italy.How they left for Argentina on the steamer Giulio Cesare in January 1929 to escape the fascist regime of Benito Mussolini.Daniel adds that delays in selling their shop made them miss the earlier sailing of Principessa Mafalda.Papal ice creamIt sank in October 1927 off the coast of Brazil with the loss of 314 lives.Whether true or false, this act of apparent divine providence has already entered popular mythology.The Pope’s popularity has helped local businesses.In front of us stands a pizzeria, cheekily named “Habemus Pizza y Pasta” after the traditional “Habemus Papam” announcement following a pope’s election.A team of Argentinian ice cream makers have already presented His Holiness with his own ice cream flavor: vanilla and lemon, in the papacy’s traditional colors of white and yellow.We stop in front of a white one-story terraced house at Calle Varela 268.There are bars on the windows and the twin external doors lead to two separate flats.It’s all so ordinary except for the plaque: “Pope Francis was born here.”Until October 2014 another address at Calle Membrillar was considered to be the Pope’s childhood home.Indeed, when this tour started Pope Francis asked: “Which house do they go to?”When asked what he meant, he waved it away: “Let the poor neighbors live in peace.”Not any more.This address was discovered by historian Daniel Vargas who dug out the Pope’s birth certificate and sent a copy to the Vatican.Imagine his shock when his office phone rang: Pope Francis wanted a word.It was a word of confirmation.Little Jorge Bergoglio spent the first five years of his life here.Love letterOnly when the family expanded did they move to a bigger house at Calle Membrillar.There’s no doubt about our next stop a few blocks south.A bright red exterior announces Escuela Pedro Antonio Cervino, a mixed primary school that Pope Francis attended.The pervading silence is a reminder that it’s summer vacation time.After Cardinal Bergoglio’s election as pope, an elderly neighborhood woman claimed to have been his childhood sweetheart.“He wrote me a love letter”, she insisted. “And said that if I didn’t marry him, he’d become a priest!”The media demanded to see the letter.“When my father saw it, he tore it to pieces,” she said.“We were only 12!”The media swooned.Further south, the barrio becomes more residential.A small breeze hits us as we climb uphill.We walk by several freshly painted colonial-style houses with well-tended patios.The Pope’s father was an accountant and was comfortably off.At Membrillar 531 we find the house where Jorge Bergoglio spent his youth.As a marker of the Pope’s past it scores high in disappointment, because it’s been comprehensively rebuilt.The Buenos Aires Tourist Board must have been greatly relieved when the more photogenic Varela residence was discovered.The birth place of Pope Francis.Soccer saintsOpposite there is a square where Pope Francis played soccer as a kid.He’s still a card-carrying fan of his local team San Lorenzo de Almagro (nickname: The Saints).After his election San Lorenzo wore his image on their shirts for the next match.They won 1-0 after their opponents scored an own goal.No one here doubts it was a miracle.The final stop blessed by the presence of Pope Francis is the kindergarten in the Misericordia College.This is where he had his first communion and learned to count to 10, jumping down the entrance steps.“He returned to the college afterward as archbishop of Buenos Aires”, says Vega.“They still remember how he helped wash the dishes”.It’s probably because of memories like these that Pope Francis has his own tour.
How I destroyed myself in Argentina
1. I immediately fell for the charms of achamuyero.
Eyes rimmed with ridiculously long, dark eyelashes, matched with charming, easy smiles and a tirade of compliments and attention in smooth Castellano, all boiling down to how I am a gorgeous princess — there’s only so much of an Argentine chamuyero’s tactics a girl who is not a robot can resist.
2. I followed that by drinking too much vino tinto.
If one can get four bottles of decent Malbec for a grand total of less than $10US, why would anyone ever drink water in Argentina?
3. Accompanied by too much carne…
Numerous asados, choripanes, salchichas, chorizos, vacíos, and matambreslater my body was begging me to become a Hindu, worshiping cows and never touching beef again.
4. I didn’t use the dollar blue.
I went into Ezeiza with my VISA card and without a single American dollar in my pocket thinking I would survive by withdrawing money from the ATMs. I ended getting charged 50 pesos by Link or Banelco and another 50 by my own bank for every withdrawal. Bad business for the budget, to say the least. Every transaction cost me the equivalent of two cones of Volta dulce de leche helado.
5. I didn’t bring enough dollars.
So I can pay up to 50% less for a bife de lomo if I exchange dollars to pesos on the black market? I was on the first Buquebus to Colonia, Uruguay and joined the ATM line of Argentinians fortunate enough to have a Miami bank account. I just didn’t withdraw enough and was back to using the pricey cajero a month later…
6. I crossed the border to Chile thinking it might be better there.
I stepped on the bus to Osorno from the bus terminal in Bariloche and passed through pine-filled mountains, went through stunning Villa La Angostura, and didn’t know better than to not get off at that last station before the border. The bus drove up the serpentine road in the Patagonian no-man’s land between the two borders and I finally reached Osorno, Chile with an unimpressed smile on my face. I went running back to Argentina the same day.
7. I became much too acquainted with Fernetand Coke.
I drank way too much of this intensely herb-like cough syrup-tasting alcohol in 2 litre plastic Coca-Cola bottles with their edges softened by lighters and passed around by smiling Cordobeses. Worst part? After a few, they actually begin to taste good.
8. I tried to out-party the porteños.
I mastered the art of siestas at 3 pm, had long dinners on Av. Rodriguez Peña in Recoleta, and drank Coca-Cola to let the caffeine keep me awake until at least 5am. I was still tired by 4 am and went to my morning Spanish class with bags under my eyes hanging down to my feet.
9. I bussed my way from Buenos Aires to El Calafate to save money.
52 hours, ten Adam Sandler movies dubbed into Spanish, and around 9alfajores> later, I arrived. I took the 3-hour flight back.
10. I turned up at the bus station assuming everything would work.
I had my VISA in hand, no pesos, and wanted to get the last bus back from La Cumbre to Retiro, Buenos Aires. The woman behind the glass counter informed me the computer system was down and she couldn’t accept card payment. Three different ATMs, a desperate phone call to my mum, and one stress-induced stomach ache later I was able to board the bus.
Note to self: 24-hour bus strikes, ATMs refusing to spit out money, and system failures are normal things in Argentina. Plan ahead and carry cash.
11. I left thinking my love affair with the country was over.
Yeah, right. This country has a way of destroying people and yet we come running back for more.
Greece Chronicle of a Default Foretold, Again
James A. Hanson firstname.lastname@example.org July 3, 2015
Greece joined the European Union 1981; it was initially rejected by the Euro-Zone but then admitted in 2001. Some analysts felt Greek accounts were inaccurately reported at the time with the help of foreign banks, more do now.
Admission to the Euro-zone probably reduced interest rates for Greece borrowing, albeit in a hard currency. Investors got Euro-denominated bonds and probably felt the discipline of the Euro-zone would work. Greece borrowed heavily.
After 2009, Greece underwent a bailout from the EU and an austerity program from the IMF and the Euro-zone. Greece largely defaulted on its privately-held debt, as it had on-and-off in the 20thcentury. As some observers noted, this approach left most of Greece’s debt in the hands of the EU, the European Central Bank, and the IMF; entities that generally do not accept defaults.
Greece has once again been unable to comply with the (externally imposed) austerity plan, although it did manage briefly to generate a small primary fiscal surplus, i.e., excluding interest payments by the government.
Recently, a run started on Greek banks, which led to a) borrowings from the European Central Bank, then b) a cutoff of these funds, and c) last week, Greece’s closure of its banks and imposition of capital controls. Greece was unable to make a payment due to the IMF on June 30. Other countries have gone into arrears with the IMF, but never a developed country. Other countries with arrears to the IMF currently include Zimbabwe, Sudan and Somalia.
What’s next? Greece has decreed a July 5 referendum on the EU proposals for a follow-up austerity program with another bailout. The likely outcome of the referendum is unclear. But a NO, or even a Yes, could well end-up with Greece’s exit from the Euro and a return to its former currency, a new-Drachma. The currency would depreciate sharply against the Euro, and increase the ratio of external debt to GDP substantially, which already cannot be repaid on time. The increase would depend on whatever reductions are given by the creditors (the IMF will not reduce its loans). But the depreciation may improve the sales of Greece’s exports of goods and services (mainly tourism and shipping). Export gains were limited under the Euro since austerity did not drive down Greek costs in measured in Euros.
Greek banks also will need some clean-up, since they held Greek government bonds that will be converted to new Drachma. How this conversion affects them will depend on how much bank deposits are written down when converted to Drachma, compared to bonds, and how much debt they will owe to the European Central Bank that is not taken over by the Government.
All in all this looks something like Argentina’s leaving the dollar in 2001. The immediate effect on Argentina was a large drop in GDP, but then Argentina grew substantially from 2003-2007, in a commodity based boom. Whether anything like a boom in exports of goods and services could occur in Greece, where the main exports of goods and services are services (tourism and shipping), is unclear. Tourism capacity is unlikely to grow much, but raising prices in new-Drachma to the previous level in Euros might yield some increase in incomes from tourism, measured in new-Drachma.
THURSDAY, July 2, 2015
- ARGENTINA RECALLS ITS FINANCIAL CRISIS, ADVISES GREECE (The Washington Post)
By Paul Byrne
July 1, 2015
BUENOS AIRES, Argentina — As Argentines closely watch the financial turmoil in Greece recalling their own worst crisis 14 years ago, the architect of the South American country’s recovery has a message for the European nation: Renegotiate your debt.
Greece is in a financial limbo now that its bailout program has expired, cutting it off from vital financing and pushing it one step closer to leaving the euro. The country has put limits on cash withdrawals in order to keep banks from collapsing.
Its situation was further worsened Tuesday when it failed to repay a $1.8 billion debt to the International Monetary Fund, the first developed country to do so.
Former Argentine Economy Minister Roberto Lavagna is credited with playing a key role in his country’s recovery after its $100 billion debt default in 2001. He said Tuesday that a “strong restructuring” of its debt is the way to help Greece come out of its crisis and avoid conflict within the European Union.
“It’s not the definitive condition … but it is necessary” to avoid a political conflict, Lavagna told The Associated Press. “Democracy is worth more than markets.”
Lavagna who was economy minister in 2002-05, led Argentina’s recovery from the 2002 recession, considered by many the worst in the country’s history, and spearheaded its 2005 debt restructuring.
Argentina’s financial collapse was so bad that one of every five Argentines was out of work. The peso, which had been tied to the dollar, lost nearly 70 percent of its value, and banks froze deposits and barricaded behind sheet metal as thousands of protesters unsuccessfully tried to withdraw their savings.
Lavagna said the demonstrations in Greece “are way more peaceful” than in Argentina, where at least 27 people died in protests and looting in December 2001 as the economy unraveled. He said that at the time, Argentina also lacked international support and didn’t have the obligations of an economic union like the European Union.
- MAP: GREECE ISN’T THE FIRST NATION TO DEFAULT ON A SOVEREIGN DEBT (The Washington Post )
By Rick Noack
July 1, 2015
After Greece defaulted on a payment to the International Monetary Fund on Wednesday, Prime Minister Alexis Tsipras signaled that he may accept bailout terms outlined by the country’s creditors. It’s not the first time that Greece has defaulted on its sovereign debts: In 2012, it did so twice. This time, the repercussions could be much worse as international creditors are unlikely to save the country from being forced to leave the euro zone and return to the Greek drachma.
Nobody really knows the consequences of a “Grexit,” but since 1998, at least 16 sovereign bond issuers have defaulted, according to ratings agency Moody’s. Apart from Greece, there are four other countries that have defaulted twice in the last 17 years: Ecuador, Jamaica, Belize and Argentina.
The Moody’s list only takes into account recently defaulted sovereign bond issuers. Sudan, Somalia and Zimbabwe have been in default to the IMF for several years or decades, as well, and continue to do so. Sudan started defaulting to the IMF in 1984, according to an extensive database collected by the Bank of Canada, which is why it is not included on the map above that focuses on defaults that started after 1998.
Can Greece learn from previous defaults?
A closer look at recent and more historical incidents of states being unable to fulfill their financial obligations reveals that the Greek case is indeed unique.
Argentina is most frequently brought up in discussions on the potential effects of a Greek default. Asked about the lessons for Greece, Domingo Cavallo, who was Argentina’s economics minister when that nation defaulted in 2001, told the BBC: “Defaulting not only on the foreign debts but also on the domestic debts and all foreign contracts at the beginning of 2002 was really a tragedy for Argentina.”
In 2014, Argentina became a defaulted sovereign bond issuer for the second time in only 15 years. (Reuters)
The default’s repercussions were devastating: More than half of all Argentines lived in poverty in 2003. Inflation and unemployment rose sharply. Despite the dramatic consequences for Argentines, the default appears to have had a limited impact on other economies. “Argentina’s sovereign default in 2001 was then the largest ever, and yet even it did not provoke contagion in global markets,” the Financial Times concluded last year when Argentina faced yet another default.
But Argentina was not part of a currency union such as the euro zone. Furthermore, Greece is geopolitically significant, given its NATO membership and its proximity to the Middle East.
Somewhat less momentous was Russia’s experience in the late 1990s. When oil prices dropped in 1997, Russian exports plummeted and caused a budgetary crisis. Despite an IMF loan, Russia later defaulted on its domestic as well as foreign obligations. It took until 2000 to restructure the Russian debts.
The situation became so dire that Russia had to demand humanitarian aid. Rising oil prices helped the country overcome its crisis soon afterward. Greece, however, only has limited access to valuable natural resources, and its manufacturing sector is weak. Tourism, one of the country’s few reliable revenue streams, would likely suffer from a euro zone exit.
Other countries that have recently defaulted on sovereign debt include Pakistan, Ukraine, Ivory Coast, Moldova, Uruguay, Nicaragua, Grenada, the Dominican Republic, the Seychelles and Cyprus.
That sounds like a lot of defaults, but according to research by the Bank of Canada, the share of total sovereign debt in default out of world public debt or world GDP has sunk since reaching a peak in the 1980s.
Since 1800, Germany has defaulted four times
What appears striking is that some of the countries that have been particularly tough on Greek debts have faced the same fate over the last two centuries. Spain, for instance, has defaulted six times.
And Germany — Europe’s leading economy, which has been especially been keen on enforcing austerity in countries such as Greece, Spain and Portugal — has defaulted four times over the last two centuries. Perhaps their experience proves countries can come back from a default, given time.
- ARGENTINES’ POINTERS FOR GREEKS: GET CASH, BUT DON’T RUSH TO EXIT (Reuters News)
By Richard Lough and Nicolás Misculin
July 1, 2015
(Reuters) – For shell-shocked Greeks struggling with temporarily shuttered banks, long lines at ATMs and limits on withdrawals, Argentines who survived similar financial chaos more than a decade ago have some guidance.
“The advice I would give is to go get your money out of the bank,” said Leo Suckewer, a Buenos Aires restaurant operator, recalling Argentina’s “corralito”, or freeze, on bank accounts in late 2001, aimed at halting a run on banks.
That move preceded the decision to abandon pegging the peso to the dollar as well as convert savers’ dollar holdings into local currency. The radical policies plunged millions of Argentines into poverty as the economy contracted violently after three years of steady decline and triggered deadly rioting, the fall of the government and Argentina’s record default on $100 billion of sovereign debt.
But within a year from a sharp devaluation in early 2002 the country returned to economic growth – something that Greece must now crave, with its economy shrinking by more than 25 percent since 2009.
There are striking similarities between the Argentine economic crisis of 2001-2002 and the turmoil in Greece: rigid monetary regimes, creditors battling against domestic politics to fix the problem and banking systems at breaking point.
On Tuesday, German Chancellor Angela Merkel ruled out new negotiations with Greece until after it votes on a bailout proposal by creditors. That left Athens virtually no hope to avert a midnight default, and could set Greece on a path out of the euro.
Some economists argue that Greeks might be better off going back to its old drachma currency as it would allow Athens to spend more freely and point to Argentina’s rapid recovery from the brink of collapse.
Riding an export boom for commodities such as soybeans and spending heavily to fuel consumer demand, Argentina became one of the fastest growing economies in the Americas with growth averaging above 8.5 percent annually between 2003 and 2007.
NO RUSH TO “GREXIT”
Yet Roberto Lavagna, Argentina’s economy minister in 2002-2005 and architect of its recovery, said it was too early for Greece to consider ditching the single currency.
“Devaluation is not the central issue today, because it means leaving the euro. I don’t think that is necessary.”
He said, however, that creditors had to accept that Greek debt “had reached a point where it has to be restructured” and that further belt-tightening made no sense.
“Greece cannot afford to be sucked into austerity reforms,” Lavagna told Reuters. “On the contrary, it needs to boost productivity which is what we did back then.”
One thing that Greece does not have is an export cash cow that helped Argentina ride out of its slump.
Domingo Cavallo the former economy minister who imposed Argentina’s “corralito” but lost his job before the peso devaluation a month later, warned Greece against leaving the single currency.
“The exit of Greece from the euro zone … would produce a sharp devaluation of the drachma,” Cavallo wrote in a blog this week. “Inflation would follow and it would generate a sharp reduction of real wages and pensions.”
Cavallo said such a drop would be worse than declines resulting from a negotiated bailout package.
FINANCIAL SYSTEM COLLAPSE
In any case, Greeks may need to brace for more pain.
Argentina spiraled deeper into economic, political and social chaos after its “corralito” was imposed. It was a period that saw five presidents in two weeks. Crowds of young, educated Argentines emigrated to their grandparents’ ancestral homes in Europe.
In 2002, the economy shrank 11 percent.
“The collapse in the financial system was in part a result of the default but also to a large extent because the government was forced to turn dollar deposits into pesos. Many of the banks had negative capital,” said Alejo Costa at investment bank Puente in Buenos Aires.
“And the financial system collapse led to a collapse in production. That will be the biggest concern to Greece.”
To avoid its own banking collapse, Athens needed to persuade creditors to restructure its debt and lower the purchasing power of Greeks by cutting salaries.
“Then you will have deflation and you will regain competitiveness without leaving the euro, without an exchange rate devaluation,” Costa said. “But that is extremely difficult to sell to the public.”
Greek Prime Minister Alexis Tsipras blames German-driven austerity for his country’s economic crisis and has steadfastly refused to meet creditors’ demands for further belt tightening, in particular on pensions, in return for a bailout.
The “corralito” and subsequent devaluation still haunt Argentines, who more than a decade on hold scant faith in the peso. Many express sympathy for the Greeks.
“We were saved by soy,” said Walter Lorenzo, a 57-year-old television studio technician. “What’s going to save them? Fishing?”
- ARGENTINA LOCAL BONDS: SMALL SIGNS OF SUCCESS? (Barron’s Blog)
By Dimitra DeFotis
July 1, 2015
With successful international bonds issued by the city and province of Buenos Aires as examples, Fitch Ratings thinks local Argentine governments can refinance and issue more debt in the near term.
The Province of Buenos Aires recently issued a $500 million note denominated in dollars due in 2021 that accrues a fixed 9.95% rate, allowing the province to exchange $375.4 million in debt maturing in October. The use: infrastructure projects. And in February, Buenos Aires also issued a $500 million bond under a $2.3 billion medium-term note program, allowing the city to roll over debt that would have matured this year.
Fitch writes that several other provinces are exploring international debt issuance to refinance with longer maturities, while raising funds for infrastructure. But, Fitch adds, many of these issuances are exposed to foreign currency — especially dollars. The caveat, writes Fitch’s Humberto Panti Garza:
“According to the Fiscal Responsibility Law, any debt should be authorized by the sovereign. This may affect the process, due to authorization delays or if the amounts requested are not authorized. Except for San Luis, La Pampa and the CBA, all other state and local governments have adhered to this law. Despite international investor interest, the process could be complex and time consuming, as it requires political negotiations with the sovereign.”
Argentina defaulted on its debt in 2001, leading to a doubling of unemployment, a spike in inflation, and a weak economy that resulted in half of Argentines living in poverty. It restructured most of its debt, but some holdouts didn’t agree to the terms. With a presidential election this fall, however, the issue of “vulture” funds wanting to be made whole following the default and subsequent agreements is on the back burner. For background on Argentina’s debt restructuring, see our free post, “Argentina Bonds: A Bargain In Disguise?” Also see the BBC story, “What Can Greece Learn From Argentina’s Default?” and our free post, “Argentina’s Take On U.S. “Vulture” Bond Investors.”
As for Argentine equities, Petrobras Argentina (PZE) has been the year’s big winner, up nearly 29% in dollar terms, while bank and insurance holding company Grupo Financiero Galicia (GGAL) is up nearly 16%. The Global X MSCI Argentina ETF (ARGT) is up nearly 6% this year.
MONDAY, July 6, 2015
The President Honors the Life of Reverend Clementa Pinckn
- U.S. WILL OPEN BEEF IMPORT WITH NORTHERN ARGENTINA AND 14 BRAZILIAN STATES (Greeley Tribune (Tribune Content Agency))
- CONSERVATIVE ARGENTINE CANDIDATE WINS 1ST ROUND OF ELECTION (The Washington Post)
July 5, 2015
BUENOS AIRES, Argentina — A Buenos Aires mayoral candidate aligned with Argentina’s top opposition presidential contender has won the first round of city elections.
With 92 percent of election places reporting late Sunday, Horacio Rodriguez Larreta had 45 percent of the vote. Less than 50 percent will mean a runoff in two weeks between Rodriguez and Martin Lousteau, who got 25 percent of the vote.
Larreta, from the Republican Proposal party, is Cabinet chief for Mauricio Macri, the out-going mayor of Buenos Aires who is the top opposition contender for the presidential contest in October.
The results show Macri’s party continues to enjoy wide support in Argentina’s largest city. Macri has been mayor since 2007.
Sunday’s elections included governor and legislator spots in a handful of places across Argentina, including Cordoba.
- ARGENTINE JUDGES ALLOWED TO RESIGN AFTER CHILD ABUSE RULING (The New York Times)
By Jonathan Gilbert
5 July 2015
BUENOS AIRES — Two Argentine judges whose controversial decision to reduce the sentence of a convicted child abuser provoked widespread anger here have had their resignations accepted, Argentina’s state news agency reported on Saturday.
The judges, Horacio Piombo and Benjamín Sal Llargués, reduced the sentence because they claimed that the 6-year-old victim, a boy, had already displayed homosexual tendencies. They were allowed to step down by Daniel Scioli, the governor of Buenos Aires Province, according to Télam, the news agency.
The revelation of the judges’ ruling infuriated Argentines, especially gay and human rights groups. The federal government’s cabinet chief said it was ”one of the greatest barbarities seen in our country.” The decision by Judges Piombo and Sal Llargués to halve the abuser’s sentence was taken last year in the province’s criminal appeals court, but it only came to light recently.
The sentence of Mario Tolosa, the vice president of a sports club who several years ago had raped the boy, a junior soccer player, was cut from six years to a little more than three. Local news reports said Mr. Tolosa had already been released from prison.
The judges based their ruling on what they said was the boy’s sexual disposition, suggesting that he had homosexual leanings. In a television interview, Judge Piombo also justified the ruling by explaining that previous sexual abuse suffered by the boy at the hands of his father had rendered Mr. Tolosa’s offense less severe. The boy’s family has denied that his father ever sexually abused him. Judges Piombo and Sal Llargués were also fired as university professors after protests by students.
Some politicians had requested that Mr. Scioli, who is also running this year for president, refuse the judges’ resignations so that an impeachment process, propelled by gay rights groups and politicians, could take its course. If the judges were impeached, the politicians argued, they might not have been entitled to pension benefits. After Mr. Scioli’s acceptance, however, the judges will be able to claim the benefits, Télam reported.
The judges had previously faced controversy when they halved the sentence of another convicted child abuser, a pastor, in 2011, paving the way for his immediate release from prison.
- ARGENTINE OPPOSITION SET TO KEEP BUENOS AIRES CITY HALL (Reuters News)
By Jorge Otaola
5 July 2015
BUENOS AIRES, July 5 (Reuters) – Argentina’s business-friendly PRO party won Sunday’s mayoral election in the capital Buenos Aires by 20 percentage points, but failed to capture enough votes to avoid a run-off with the No. 2 contender later this month, official returns showed.
With 91.4 percent of the vote counted Horacio Rodríguez Larreta, chief of staff to outgoing mayor and presidential candidate Mauricio Macri, won 45.6 percent of ballots cast.
He needed to break the 50-percent mark to avoid a second round of voting, which will take place July 19.
Still, Larreta’s relatively strong showing was positive for Macri, who will have to carry the city by a wide margin if he is to win the presidency in the October general election. Buenos Aires accounts for about 8 percent of Argentina’s national vote.
“I’d like thank the leader of this team, Mauricio Macri, who we are all sure will be the next president,” Larreta told his supporters in a televised speech.
In second place was Martin Lousteau with 25.6 percent of the vote. The former economy minister represents the ECO party, which is also opposed to outgoing President Cristina Fernandez.
In third place was Mariano Recalde, who heads state-controlled airline Aerolineas Argentinas and represents Fernandez’s Front for Victory party. He got 21.8 percent.
“If there’s a loser here, it’s the Front for Victory, which didn’t even make it to the run-off,” said Ignacio Labaqui, who analyses Argentina for Medley Global Advisors.
Fernandez is constitutionally barred from seeking a third consecutive term in October. For president she has endorsed Buenos Aires Governor Daniel Scioli, who is running several points ahead of Macri in the opinion polls.
Fernandez, widely admired for her political skills but faulted by big business for imposing a web of currency and trade controls that have hurt the economy, may run for president again in 2019.
She backs a slate of congressional candidates in the October general election led by Economy Minister Axel Kicillof and her son, Maximo Kirchner, who heads Fernandez’s “Campora” youth activist organization.
Macri vows he will immediately remove controls and open the economy to attract investment. Scioli also has a more orthodox approach to policy than Fernandez. But any attempts at policy reform could be complicated by the Front for Victory, which is expected to keep control of Congress.
- ARGENTINA’S FERNANDEZ CELEBRATES GREECE’S “NO” TO CREDITORS (Reuters News)
By Hugh Bronstein
July 5, 2015
World markets may tremble at Sunday’s decision by Greek voters to reject conditions of a rescue deal from creditors, but the leader of Argentina, which suffered a similar crisis more than a decade ago, boldly welcomed the referendum result.
President Cristina Fernandez, known for combatively defending her unorthodox policies, tweeted that Greece’s vote marked “a resounding victory for democracy and dignity.”
There are stark similarities between Argentina’s 2002 financial meltdown and the turmoil in Greece: rigid monetary regimes, creditors battling domestic politics to fix the problem and banking systems at breaking point.
In Greece, 61 percent of voters rejected a deal that would have imposed more austerity on their already ravaged economy.
“The Greek people have said ‘NO’ … to the impossible and humiliating conditions that would be imposed for the restructuring of their debt,” she tweeted. “We Argentines know what this is about. We hope that Europe and its leaders understand the message … that you can’t force anyone to sign their own death warrant.”
The South American grains behemoth defaulted on $100 billion in bonds in a 2002 crisis that thrust millions of middle-class Argentines into poverty. By the next year, helped by a massive soy crop, Argentina started growing again.
But the 2002 crisis continues to plague its finances.
Fernandez regularly blasts bondholders who have sued the country over the debt it failed to pay 13 years ago.
Most holders agreed to restructurings that paid about 30 cents on the dollar, while a group of hedge funds sued for full repayment.
The country defaulted again last year when a U.S. judge barred it from honoring its restructured debt without reaching a deal with the funds, which Fernandez denounces as “vultures.”
Argentina became one of the world’s fastest expanding economies after its default, growing at an averaging above 8.5 percent between 2003 and 2007, when Fernandez was first elected.
Since then she has ordered trade and currency controls that have slowed investment while government fiscal accounts deteriorate due to high state spending.
- GREEK DEBT BETTER SHIELDED FROM VULTURES THAN ARGENTINA’S (Reuters News)
By John Geddie and Marius Zaharia
July 3, 2015
* Most Greek bonds have clauses making restructuring easier
* Investor would need to spend large sums to hold out
* Risks remain as lawyers point to ways around CACs
LONDON, July 3 (Reuters) – Greece might be spared the decade-long legal battles Argentina faced if it ends up restructuring its debt, although lawyers say vulture funds might still hold Athens to ransom.
The structure of Athens’ debt and the use of contract clauses that make it easier for countries to impose losses on bondholders should protect the country from litigious “hold-out” investors, although experts warn they are not fool-proof.
Greece, the first developed country to default on an International Monetary Fund loan, has seen the value of its bonds collapse on fears it is headed for a repeat of 2012, when it wrote down its debt. Greeks will vote on Sunday in a referendum that could ultimately see it leave the euro zone.
But brokers say there are no signs yet of distressed debt investors that prey on bankrupt countries – and have hauled the likes of Argentina through the courts – hovering over Greece.
“There is a small risk that there could be holdout law suits, but nothing like Argentina,” said Starla Griffin of Slaney Advisors, a lawyer and member of the Expert Group on Sovereign Debt Restructuring sponsored by the United Nations.
Argentina, whose debt was not protected by such clauses when it defaulted in 2002, is still in a legal battle with holdouts, including Elliott Management’s affiliate, NML Capital Ltd, and Aurelius Capital Management.
Investors aiming to stay out of any further Greek debt writedown and get more of their money back would first have to thwart collective action clauses (CACs). Those clauses are written into about 33 billion euros of Greek bonds issued in 2012 as part of the restructuring and into around 6 billion euros of 2017 and 2019 bonds issued last year.
The former – handed to investors in a process called Private Sector Involvement in exchange for older bonds – are even better protected, because they are treated as one series.
For a debt restructuring to be enforced on all those bonds, investors holding at least two-thirds of the outstanding bonds need to vote, and 75 percent of those voting need to back it.
That means holdouts would have to build a stake of some 5.5 billion euros across all the bonds, rather than a smaller stake in only one of them, to have a chance of success.
“For a significant amendment to the terms of the PSI notes, the quorum will be two-thirds, but with 25 percent you can block any proposal of this type, given that they require 75 per cent approval to pass,” said Arjun Muddu, an associate at Linklaters, who acted for banks mediating the 2012 restructuring.
Japonica Partners says it is one of the largest holders of Greek government debt, and launched a tender to buy up to 4 billion euros of these bonds in 2013. If Greek bond prices fall further, the firm might be able to build a blocking stake. Reuters has not been able to confirm Japonica holdings of Greek debt in conversations with traders and other investors or on bond databases.
The two Greek bonds issued in 2014 also have CACs, but they are different. They allow for a vote on each bond, meaning investors need less money to build a blocking stake.
After a U.S. court ruling that forced Argentina into another default last year, the IMF called for CACs to require only a single vote across all affected bonds rather than multiple votes on each one. A single vote would make it easier to impose a writedown.
That approach has been endorsed in Europe by the International Capital Markets Association, but it may have come too late for Greece.
“The two-limbed requirement makes life for holdouts more difficult, but CACs are not watertight and in theory holdouts can still block a restructuring with a large and diverse majority,” said Dania Thomas, business law lecturer at Glasgow University.
There is precedent in Greece for holdouts. Athens still has around 4 billion euros of old, unrestructured bonds, but has so far honoured payments on such debt and avoided court action.
But even if investors are pushed into future haircuts, the legal battles may not be over.
Christian Leathley, an international arbitration lawyer at Herbert Smith Freehills, said that if investors could not get a blocking stake in any future restructuring, they might still be able to pursue a claim against the sovereign under an applicable bilateral investment treaty.
Herbert Smith Freehills pursued bondholder claims arising out of Argentina in U.S. court enforcement actions.
“Even though under the bond you were basically strong-armed into accepting this arrangement, that might not necessarily preclude you from bringing a claim under a treaty,” said Leathley.
“No matter what the best intention is … there could be some quite lengthy litigation that follows through these international arbitral tribunals.”
Greece has signed around 40 such treaties with other countries, including Germany, according to the United Nations.
- MACRI PROTEGE’S WIN IN BUENOS AIRES NOT ENOUGH TO AVOID RUN-OFF (Bloomberg News)
By Charlie Devereux
July 5, 2015
Opposition presidential hopeful Mauricio Macri saw his candidate win by a comfortable margin in elections for mayor of Buenos Aires, while failing to avoid a run-off.
Horacio Rodriguez Larreta of Macri’s PRO party had 45.6 percent of votes against 25.6 percent for the ECO alliance’s Martin Lousteau and 21.8 percent for Mariano Recalde of the national government’s Victory Front alliance with 92 percent of votes counted, according to the city government. Lousteau said he would compete in a second round, scheduled to take place on July 19, since Larreta failed to gain a majority.
Macri, mayor of the city for two four-year terms, described the election as a plebiscite on his presidential bid as he seeks to end 12 years of government by President Cristina Fernandez de Kirchner and her late husband Nestor Kirchner. The question now is whether Lousteau can attract enough of the votes cast for Fernandez’s Victory Front alliance to overcome Larreta’s 20-point margin.
“This is a clear message of confidence in what we’ve been doing,” Macri said in a speech to supporters after results were announced. “This is part of something much bigger that’s happening in all of the country.”
Lousteau, whose alliance includes members of the Radical Party and the Civic Coalition that is allied with Macri at a national level, denied suggestions by the PRO party that he might decline to contest a run-off.
“Today the residents of Buenos Aires decided that there will be a run-off,” Lousteau told supporters.
“With a run-off, we all win.”
Elections also took place Sunday in Cordoba province, Argentina’s second-largest voting district, and La Rioja province, where not enough votes had been counted to declare a winner. Corrientes province voted for provincial lawmakers and senators while La Pampa province held primaries to choose candidates for governor.
- TIMELINE: ARGENTINA’S PRESIDENTIAL ELECTIONS (Bloomberg News)
By Charlie Devereux
July 2, 2015
Shows voter support for top three candidates using average of various national polls
Argentina’s presidential elections in October will be the first in 12 years that won’t feature President Cristina Fernandez de Kirchner or her late husband Nestor Kirchner as candidate.
* March 15: Radical Civic Union votes to form alliance with main opposition candidate Mauricio Macri
* June 9: Dissident Peronist candidate Sergio Massa says he’ll remain in race and won’t form alliance with Macri
* June 16: Daniel Scioli names Fernandez ally Carlos Zannini as his vice presidential running mate. Stocks, bonds and black market peso tumble on speculation appointment means currency controls and subsidies will be kept in place
* June 20: President Fernandez says she won’t put herself forward for elected office; her son, Maximo Kirchner, will run for lawmaker in Santa Cruz, while Economy Minister Axel Kicillof will stand in city of Buenos Aires
* July 5: Regional election in Buenos Aires where Macri’s candidate Horacio Rodriguez Larreta must see off challenge from former Economy Minister Martin Lousteau. Cordoba, La Rioja and Corrientes provinces also hold elections
* July 10: Official start of campaigning for primaries
* July 19: Possible second round vote for Buenos Aires elections
* Aug. 9: Primaries to choose candidates for president. Candidates for governor, lawmaker and senators for some provinces also chosen **Scioli to run uncontested as ruling FpV alliance candidate **Macri to compete with Ernesto Sanz, Elisa Carrio **Massa to compete with Jose Manuel De la Sota
* Sept. 20: Official start of general election campaign
* Oct. 25: Presidential election. Provinces of Jujuy, Formosa, Catamarca, Misiones, San Juan, San Luis, Entre Rios, Buenos Aires, La Pampa, Chubut and Santa Cruz also hold regional elections **Candidate must win more than 45% or more than 40% with 10ppt margin of victory over rival to avoid second round
* Nov. 22: Possible second round of presidential elections
* Dec. 10: New president sworn in
- OWL CREEK SAID TO NEAR MINIMUM TO ACCELERATE ARGENTINE DEBT (Bloomberg News)
By Katia Porzecanski
July 2, 2015
A creditor group led by Owl Creek Asset Management is on the cusp of controlling enough defaulted Argentine bonds to demand immediate repayment, according to people familiar with the matter.
Jeffrey Altman’s $4.1 billion hedge fund is working with law firm Jones Day to find other holders of the $5.4 billion in so-called par bonds that want to join the group, according to the people, who asked not to be identified because the talks are private. The investors, who need at least 25 percent of a series of notes in order to demand their money right away in a process known as acceleration, are close to reaching that level for one of the bonds, the people said.
Owl Creek first sought to form the group last year after starting its Argentina Recovery Fund in September. The effort initially gained little traction on concern it would protract a legal battle and derail chances of a quick settlement between Argentina and creditors from its 2001 default led by Elliott Management, whose lawsuit has blocked payments on restructured bonds since June 2014.
Patrick Clifford, a spokesman for New York-based Owl Creek at Abernathy Macgregor Group, declined to comment on acceleration efforts. Dave Petrou, a spokesman for Jones Day, didn’t return an e-mail and phone call seeking comment. A press official for Argentina’s economy ministry declined to comment.
In an August presentation for its Argentina-focused fund, Owl Creek said accelerating the par bonds, which mature in 2038 and are the lowest-priced of the restructured bonds, could provide investors with a windfall profit in a subsequent bond swap. The bonds traded at 53.88 cents on the dollar on July 2.
The hedge fund said in its August presentation that accelerating may provide them with a “seat in settlement negotiations” next to Elliott, “likely resulting in an exchange into new bonds which trade closer to par.”
The Argentina Recovery Fund helped lead Owl Creek’s gains through the first quarter of 2015 with an 8.6 percent return over the period, people familiar with the matter said in April. Its main Owl Creek Overseas Fund rose 3.7 percent through March.
Owl Creek opened a second Argentina Recovery Fund in December and a third in June, according to U.S. regulatory filings.
- U.S. WILL OPEN BEEF IMPORT WITH NORTHERN ARGENTINA AND 14 BRAZILIAN STATES (Greeley Tribune (Tribune Content Agency))
By Bridgett Weaver, Greeley Tribune, Colo.
5 July 2015
July 05–Imports of fresh beef will be allowed from northern Argentina and 14 Brazilian states following a final ruling by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service.
Imports of certain animals and animal products from the areas have been blocked until now to prevent the introduction of diseases to U.S. production, according to Docket No. APHIS-2009-0017, which detailed the case.
The regulations are being amended after a recent risk assessment determined that fresh beef, which means chilled or frozen beef, can be safely imported from areas that meet certain conditions.
Northern Argentina meets the conditions, as well as the Brazilian states of Bahia, Distrito Federal, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Rio Grande do Sul, Rio de Janeiro, Rond”nia, São Paulo, Sergipe and Tocantins.
The ruling comes after many years of trade barriers put up between the regions in question and the U.S., which means the imports are not likely to flood the U.S. market.
“All the infrastructure and that supply chain is going to have to be put into place,” said Brett Boydston, vice president of public policy with the Colorado Farm Bureau.
Boydston said he thinks the ruling is a positive one. It could act as a peace offering between the U.S. and other countries putting up such trade barriers.
“I think an olive branch is a good way to put it,” Boydston said. “I think it sends a big message that when it comes to considerations like this we’re going to use sound science methods to tear down trade barriers.”
Most important, Boydston noted, is that if the U.S. is taking down these barriers, it will prompt other countries to take down similar barriers that are being used against the U.S.
Some producers are concerned that opening trade between the countries will expose U.S. herds to Foot and Mouth Disease, more commonly known as FMD. It is a highly contagious viral disease that affects cattle and sheep. It causes ulcers on the hoofs and around the mouth of the livestock.
The documents cited 870 comments on the allowance of imports.
“Many commentors, citing the highly contagious nature of FMD, expressed the view that we should not allow fresh beef to be imported from any country where the disease is present because regionalization is not likely to mitigate the risks associated with imports effectively. We considered the epidemiological characteristics of FMD,” documents said. “Based on our assessment, we concluded that beef from the exporting region of Brazil could safely be imported into the United States, provided that FMD has not been diagnosed in that region within the past 12 months, that there is no commingling of bovines or beef from that region with animals or beef from other regions…”
Keith Roehr, state veterinarian with the Colorado Department of Agriculture, said he doesn’t think the USDA would put cattle in harm’s way, but there is a lot of opposition to opening the U.S. to these beef imports, including a statement from the National Cattlemen’s Beef Association president stating the organization’s concerns.
“NCBA remains committed to supporting open trade markets, level playing fields, and utilizing science-based standards to facilitate international trade,” according to a statement by the Association. “At the same time, no amount of trade is worth sacrificing the health and safety of the United States cattle herd.”
Roehr said he supports the NCBA’s statement, but he hasn’t actually read the risk assessment and cannot speak to the science behind the agriculture department’s decision.
“I think in the end I would feel the USDA has done what they can,” he said. “In the end, we know the risk is probably pretty small but we know the outcomes of these things is huge.”
He said the risk of introducing FMD in the U.S. is what is concerning to producers.
“We have a disease-free status that other countries don’t.”
JBS USA CEO Andre Nogueira said in a recent meeting with the press he does not understand companies that support the open market when it comes to exports, but not when it comes to imports.
“We love the open market. The open market brings efficiencies. So we cannot believe in an open market when we sell and not believe in an open market when we buy. The open market is the open market,” he said.
Nogueira, who comes from Brazil, said Brazil has a very high standard of beef production and works with some of the most selective global markets.
Bill Rupp, president of JBS USA Beef, said the open market also benefits U.S. consumers when domestic supplies are tight.
“With the drought and the impact of the drought on the cattle herd, we’ve seen the supply of mature cows, which is by and large the foundation of our ground beef supply, those cows were liquidated because of the drought,” Rupp said. “That has been totally compensated for by the input of lean trimming from Australia and New Zealand. The poundage that was lost in the U.S. has been completely offset by fresh, frozen trimmings from Australia and New Zealand.”
Rupp called these imports and example of the marketplace working efficiently, emphasizing that foreign meat supplies play an important role in the U.S. food system.