Archive for the ‘ARGENTINE UPDATE’ Category


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17 diciembre, 2014

Noah Mamet Sworn-in as U.S. Ambassador to Argentina, Twice For Good Measure

Dec. 16, 2014
1 min read
– Domani Spero
Ambassador Noah B. Mamet was confirmed by the US Senate on December 2nd. He was sworn into office, in a private ceremony at the State Department with Western Hemisphere Affairs Assistant Secretary Roberta Jacobson administering the oath.
via U.S. Embassy Argentina
Ambassador-Designate Noah Mamet, with mother Millie Mamet, is sworn in by Bureau of Western Hemisphere Affairs Assistant Secretary Roberta Jacobson, December 3, 2014, at the U.S. Department of State. (Photo: Dept. of State)
On December 10, Ambassador Mamet was sworn-in again by Vice President Joe Biden at an official ceremony held at the White House. Argentine Ambassador to the United States Cecilia Nahon attended the ceremony.
Ambassador Mamet, with mother Millie Mamet, is sworn in by vice president Joseph Biden. (Photo: Vice President’s Office)
Ambassador Mamet, with mother Millie Mamet, is sworn in by vice president Joseph Biden. (Photo: Vice President’s Office)
Senator John McCain was once asked by Tim Russert about running as George W. Bush’s VP. His response was, “No. No way. The vice president has two duties. One is to inquire daily as to the health of the president, and the other is to attend the funerals of third world dictators.” He forgot to mention VPOTUS’ duty in the ceremonial swearing-in of political ambassadors, which sounds like fun, too.
Ambassador-designate Mamet is yet to present his credentials in Buenos Aires but he is already on Twitter. Don’t get too excited there! It looks like he actually joined Twitter in January 2010 but has only the following three tweets as of this writing.
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6. ARGENTINA ECONOMY: QUICK VIEW – BOND SALE A FAILURE (Economist Intelligence Unit – ViewsWire)



By Camila Russo
Dec 16, 2014

With emerging market currencies tumbling from Russia to Brazil, Argentina sees no reason to devalue the peso, Central Bank President Alejandro Vanoli said.

“We feel comfortable with the competitiveness of our currency, and we will continue to pursue the policy of a controlled floating peg based on the global and local situation,” Vanoli told reporters in Buenos Aires.

The Argentine peso has slid 0.2 percent in December to 8.5509 per dollar, the seventh best performer among 25 developing market currencies tracked by Bloomberg. The peso was unchanged today. The calm in Buenos Aires stands in contrast to a rout in the Russian ruble, which has lost 14.2 percent in the past two days as crude oil prices tumble. The currency in Brazil, Argentina’s largest trade partner, has weakened 2.9 percent.

Argentina’s central bank has maintained a crawling peg for more than a decade by intervening in the currency market by buying and selling dollars almost daily. The government also prohibits most foreign currency purchases as part of capital controls introduced in 2011.

The peso tumbled the most in the world in January when former central bank chief Juan Carlos Fabrega devalued the currency 13 percent over a two-day span. Vanoli has curbed the slide in the currency since taking over on Oct. 1 by taking measures to boost reserves and tightening import and currency controls.

Year-to-date, the peso has weakened 23.8 percent, the most in the world after Russia, Ukraine and Ghana, according to data compiled by Bloomberg.

By Pablo Gonzalez and Rodrigo Orihuela
Dec 16, 2014

Petroleo Brasileiro SA is delaying its exit from Argentina’s petrochemical business as it focuses on a graft case in Brazil, two people familiar with the process said.

Petrobras, as the Rio de Janeiro-based producer is known, received a joint offer for its 34 percent stake in Cia. Mega SA from partners YPF SA (YPF) and Dow Chemical Co., said the people, who asked not to be named because the talks are private. Buenos Aires-based YPF owns 38 percent of Mega and Dow has 28 percent.

An expanding investigation into Brazilian contractors that allegedly bribed Petrobras officials is cutting off its access to debt markets, slowing signing of new contracts and has helped push down the stock by 63 percent since September. Mega had 1.9 billion pesos ($222 million) in sales last year.

Alejandro Di Lazzaro, a YPF spokesman, declined to comment when contacted by phone. Petrobras’ press office declined to comment in an e-mail.

Dow “does not comment on rumor or speculation in the marketplace,” spokeswoman Rachelle Schikorra said in an e-mailed statement.

The Brazilian oil producer, which operates Mega, began marketing assets in Argentina — including a refinery, petrochemical plants and oil and gas fields — in March as part of a global divestment plan intended to focus on its Brazilian oil fields.

Petrobras rose 3.3 percent to 9.48 reais at 4:03 p.m. in Sao Paulo.

By Rodrigo Orihuela and Rebecca Penty
Dec 16, 2014

Repsol SA (REP), Spain’s largest energy company, agreed to buy Talisman Energy Inc. (TLM) for $8.3 billion, ending a months-long search for acquisitions to help boost crude reserves and production.

Talisman shareholders will receive $8, or C$9.33, in cash for each share they own, according to statements from both companies. That’s a 60 percent premium to Talisman’s 30-day weighted average price, the Calgary-based company said.

Repsol has been seeking to spend about $10 billion on takeovers since receiving compensation in May from Argentina for the 2012 nationalization of YPF SA. The total deal value is about $13 billion, including Talisman debt, making it the biggest foreign takeover by a Spanish company since 2007, according to data compiled by Bloomberg. Repsol’s offer comes as a slump in crude drove the Canadian explorer’s stock below C$5 for the first time in 14 years.

“They’re paying a full and fair price that Talisman shareholders should be satisfied with,” Brendan Warn, an analyst at BMO Capital Markets in London, said by phone. “If oil had stayed above $100, the deal may not have happened as Talisman would have ploughed on.”

Repsol fell for a seventh day, dropping 0.4 percent to 15.64 euros at the close in Madrid. Talisman rose 48 percent to C$8.84 at the close in Toronto, the biggest gain in 30 years. The stock is down 16 percent since news of Repsol’s interest in the company first surfaced, as oil prices plunged to the lowest in more than five years.

Boosting Reserves
In losing the Argentine producer YPF, Repsol gave up almost half of its oil and gas reserves and has been looking for ways to replace them. The Talisman deal will boost Repsol’s crude reserves by 55 percent and production by 76 percent, the Madrid-based company said in a regulatory filing. Talisman, which has operations spanning six continents, is focused on the Americas and Southeast Asia.

“The transaction with Talisman is the result of a thorough analysis of more than 100 companies and assets around the world,” Repsol Chief Executive Officer Josu Jon Imaz said in a statement. “Talisman has always been the best option due to the excellent quality of its assets.”

Similar-sized targets in oil exploration have commanded an average premium of about 38 percent in the last three years, according to data compiled by Bloomberg.

Repsol may sell as much as 5 billion euros ($6.26 billion) of hybrid bonds to help finance the transaction.

Carl Icahn
The deal requires the approval of two-thirds of Talisman shareholders, who include billionaire Carl Icahn. Icahn’s representatives on Talisman’s board support the offer, Repsol Chairman Antonio Brufau told reporters in Madrid today. Talks between the companies had broken off in August.

Shareholders will probably support the deal, said David Neuhauser, whose holdings include Talisman in funds under management at Livermore Partners in Northbrook, Illinois. Talisman couldn’t afford to expand its business in the current oil price environment and didn’t have a replacement for Hal Kvisle, its outgoing CEO, Neuhauser said.

“They had to come out with a knock-out bid and they did that,” Neuhauser said. “For Talisman shareholders, it’s not the type of ending we all would liked to have seen but given the environment, it’s a better ending than the alternative.”

Talisman’s board considers the Repsol offer superior to other options for the company, Kvisle said on a conference call today. Low oil prices, limited options to reduce spending, a difficult environment to sell assets and risks associated with its debt all pose challenges for the company, Kvisle said.

Pension Board
Repsol will soon seek approval from the Canadian government for the Talisman takeover, which will result in a company operating in more than 50 countries with output the equivalent of more than 680,000 barrels of oil a day and refining capacity of more than 1 million barrels a day, Kvisle said. A government spokesman said it’s expecting the application under the Investment Canada Act.

Industry Canada will probably approve the deal after a straightforward review because Talisman doesn’t operate in the oil sands, a particular area of focus for the government, the CEO said. Also, Repsol is not controlled by a foreign government and Talisman has 80 percent of its assets outside the country, Kvisle told reporters in Calgary today.

Canada Pension Plan Investment Board was weighing a bid for Talisman, people with knowledge of the matter said yesterday, after initially considering buying parts of the company. Linda Sims, a spokeswoman for the pension board, declined to comment today on whether the fund was still considering bidding on Talisman.

Goldman Sachs Group Inc. and Nomura Holdings Inc. advised Talisman, while JPMorgan Chase & Co. and Deutsche Bank AG advised Repsol.

December 16, 2014

Argentine state-owned oil company YPF wants to form a partnership with Brazilian state-controlled oil giant Petrobras to produce gas in the Vaca Muerta shale play in Patagonia, media reports said Tuesday.

“I would love to do more things with Petrobras,” YPF CEO Miguel Galuccio told ValorPro, a Web site operated by the Sao Paulo business daily Valor Economico.

Petrobras’s presence in an area near Vaca Muerta will bolster gas production in the shale formation, Galuccio said.

“Petrobras is already in a gas exploration area in Neuquen,” the province where most of Vaca Muerta is located, and its participation in exploiting the giant shale formation would help Argentina stop “the drop in gas production” and “reduce the volume of imports,” which have soared since 2007, Galuccio said.

YPF signed an agreement with U.S.-based supermajor Chevron last year to develop the massive Loma Campana play within Vaca Muerta, which is in southwestern Argentina.

The agreement between YPF and Chevron calls for $1.24 billion in investment in the first phase of project development and $1.6 billion in the second phase of the development of Loma Campana.

YPF also signed a memorandum of understanding with Malaysia’s Petronas to work on developing the shale play.

YPF announced the discovery of non-conventional oil and natural gas reserves in Vaca Muerta in 2011 after successful results in the exploration phase.

Environmentalists oppose the development of the non-conventional oil play.

Millions of liters of water, thousands of tons of sand and chemicals will be used to extract oil and gas from the field using hydraulic fracturing, or “fracking,” a controversial method that involves pumping a pressurized fluid – usually composed of water, sand and chemicals – into a shale formation to create a fracture in the rock layer and release trapped petroleum or natural gas.

December 16, 2014

Spain’s Abengoa said Tuesday it won the rights to develop a new electricity transmission project in central Argentina that will supply power to a new steel mill.

The $34 million project will be built in areas near Perez, a city in Santa Fe province, and is to be completed in 12 months, Seville-based Abengoa said.

Abengoa, which will not own the assets once the project is completed, will oversee the construction and testing of the six kilometers (3.7 miles) of 220 kV power lines, the expansion of the Rosario Oeste transformer station and the construction of a new 220 kV transformer station.

This is the third power transmission project that Abengoa will carry out in Argentina in the fourth quarter of 2014.

The company has now built more than 5,000 kilometers (3,106 miles) of power lines and 40 substations in the South American country.

Abengoa has operations in the energy, telecommunications, transportation and environmental sectors.

6. ARGENTINA ECONOMY: QUICK VIEW – BOND SALE A FAILURE (Economist Intelligence Unit – ViewsWire)
16 December 2014


Argentina has issued new local-law bonds to try to bolster its foreign-currency reserves, but take-up was minimal. In a move designed to cut its repayment obligations for 2015, it also offered holders of bonds that mature in October 2015 the opportunity to cash in immediately or swap them for bonds that mature in 2024, but this was also unsuccessful.


The issuance in early December of local-law dollar bonds that mature in 2024, called Bonar 24s, was widely considered a failure. The government issued just US$286m of the US$3bn it had offered. The government had hoped the new issuance would help to further bolster its foreign-currency reserves, which have risen in the past week to over US$30bn for the first time since January, thanks to a fresh currency swap with China.

The economy minister, Axel Kicillof, said that selling any debt at all was a success in a “black week” for financial markets that included a continued drop in crude oil. However, the government has been criticised for a clumsy issuance. It offered the bonds for sale at 96.2 US cents on the dollar, 1.8 cents more than the Bonar 24s were fetching in the secondary market when the sale closed.

The government also saw little interest in its offer to either buy back or exchange (for Bonar 24s) US$6.3bn of local-law dollar bonds that mature in October, called Boden 15s. It bought back only US$185m of the securities and swapped just US$377m. The government offered 97 cents on the dollar for the Boden 15s, which was below market price.

A healthy response to the offer might have helped Argentina in its negotiations with holdout creditors, easing pressure on the government to agree a deal at the start of 2015. The government had also been hoping to cut its repayment obligations next year, which, according to the latest data from the Ministry of Economy and Public Finance, total slightly over US$13bn. The failure of the offer will heighten concerns over the government’s capacity to pay. Although another offer on better terms could well be successful in coming months, the risk is that market conditions could deteriorate in the interim, leaving Argentina unable to issue or to service its debts.

By Lourdes Garcia-Navarro
16 December 2014

RENEE MONTAGNE: In Argentina, even though the national currency is the peso, the American dollar is actually king. With the country’s economy tanking, everyone who can is trying to put money into the greenback. NPR’s Lourdes Garcia-Navarro recently traveled to Buenos Aires and brings us the story on how the sharing economy has become one way to do that.


EVE: Hola.

BRENNER: Hi. Here for dinner?

EVE: Yes.


BRENNER: Come on in.

EVE: I’m Eve.

BRENNER: Nice to meet you. I’m Kelly.

LOURDES GARCIA-NAVARRO: Kelly Brenner ushers in some of her guests at the Adentro Dinner Club. This is a puertas cerradas restaurant, meaning behind closed doors. It’s a culinary movement where people cook for paying guests inside their homes. Adentro is the most well-reviewed in Buenos Aires. And Kelly, who’s originally from Boulder, Colorado, acts as the host, and her Argentine fiance, Gabriel Aguallo, does the cooking, focusing on grilled meat.

BRENNER: And this is where we’re going to be eating eventually.

EVE: Oh, great. This is beautiful.

BRENNER: Thank you.

GARCIA-NAVARRO: Despite the success of the venture, the pair, she tells me, have been struggling.

BRENNER: Tourists come and they’re planning their vacation. They want a reservation for two months from now, and we couldn’t take that reservation because we couldn’t tell them how much it was going to cost in two months.

GARCIA-NAVARRO: Inflation is ravaging Argentina’s economy. According to some estimates, it’s running at 40 percent a year. Compare that to the U.S., where inflation is only 1.7 percent a year. Prices rise at a dizzying rate, she says. She just couldn’t run her business relying on the local currency. So finally, she did this…

BRENNER: We’ve actually just switched at the beginning of this month to charging in dollars as opposed to pesos after charging in the local currency because it was too chaotic.

GARCIA-NAVARRO: Here is a brief economics lesson.

ALAN CIBILS: People basically go to the dollar as a way to preserve the value of their purchasing power to hedge against inflation.

GARCIA-NAVARRO: That’s Alan Cibils, the chair of the political economy department of the National University of General Sarmiento. In Argentina, because a peso will buy you less and less each day, people put their money in dollars, which is a stable currency. Getting dollars, though, has become increasingly difficult. Argentina defaulted on its debt in 2001 and again this past summer. So it’s been locked out of the international markets where it can pay on credit. So it needs dollars to pay for things. The way it’s been getting them is preventing dollars from leaving the country, Draconian currency controls, which leads to scenes like this.

UNIDENTIFIED MAN #1: (Speaking Spanish).

GARCIA-NAVARRO: (Speaking Spanish).

I’m buying a ferry ticket, and I’m being told I have to pay in dollars or with my U.S. credit card. I’m told the government issued a decree that all foreigners have to pay for their travel in hard currency. Argentina now has a dual currency system. You have the official rate at which you can exchange dollars – $1 is about 8 and a half pesos – and then you have what is called the blue dollar rate, or the black market rate, which is about 13 pesos to the dollar.

It’s a beautiful spring afternoon in Buenos Aires, and I am walking down La Avenida Florida, which is a pedestrian street. But instead of the strains of tango, what I’m hearing is this…

UNIDENTIFIED MAN #2: (Speaking Spanish).

GARCIA-NAVARRO: People are asking me if I want to change my dollars. The hunt for the dollars is big business here in Argentina these days.

UNIDENTIFIED LANDLORD: Well, it’s rented most of the time, 80 percent of the days.

GARCIA-NAVARRO: Which brings us back to the sharing economy. That’s an Airbnb landlord. He doesn’t want his name used because of the government restrictions on dollar transactions.

LANDLORD: This apartment has a very – I think it’s the attraction, it’s the view of the neighborhood.

GARCIA-NAVARRO: Airbnb, where you rent your home for cash, has become a huge, global success. In Argentina, though, it has an added benefit. You charge and get paid in dollars.

LANDLORD: Very, very useful this extra money and the way I get it.

GARCIA-NAVARRO: According to Airbnb there are now 8,500 active Argentine properties on the site. That’s a 70 percent jump from last year. It’s one of their fastest-growing markets in Latin America according to the company.


GARCIA-NAVARRO: Back at the Adentro Dinner Club, Kelly Brenner says it’s really a tiny fraction of the population who has regular access to foreign currency like her. Though some estimates say that Argentineans love to hoard dollars so much that they hold one of every 15 dollars in the world. Brenner jokes the three national pastimes are…

BRENNER: Soccer and Malbec and looking for dollars.

GARCIA-NAVARRO: Still the majority of Argentineans are paid in pesos, and they have to deal with the devastating inflation. She says she’s lucky, and she wishes there was a strong national currency, but…

BRENNER: We don’t want to raise the prices. We don’t. We want to try and keep it somewhat stable.

GARCIA-NAVARRO: And that means charging dollars. Lourdes Garcia-Navarro, NPR News.

By Eduardo Porter
17 December 2014

SANTIAGO, Chile — Few people are as intensely worried about the slowing Chinese economy as Latin Americans.

Not only does China buy nearly 40 percent of Chile’s copper, but its once-insatiable demand helped push copper prices from $1 to $4 a pound.

Meanwhile, Beijing plowed billions into Peruvian mines and fisheries and spent billions more buying soybeans from Argentina and Brazil. And it propped up the Venezuelan government to the tune of $50 billion in loans, to be paid in shipments of oil.

China’s voracious hunger for Latin America’s raw materials fueled the region’s most prosperous decade since the 1970s. It filled government coffers and helped halve the region’s poverty rate.

That era is over. For policy makers gathered here last week for the International Monetary Fund’s conference on challenges to Latin America’s prosperity, there seemed to be no more clear and present danger than China’s slowdown.

”The commodity boom allowed governments and companies to avoid hard choices,” Andrés Velasco, Chile’s finance minister from 2006 to 2010, told me. ”For goodness’ sake even Argentina grew by 5 to 6 percent per year for almost a decade.”

Copper is back under $3. As commodity prices continue to swoon, driven in large part by China’s weaker demand, the going will get much tougher.

That’s especially true of the major oil exporters, clobbered by a collapse in oil prices driven by faltering global demand and increased supplies from the United States and elsewhere.

Venezuela, notably, is in free fall. The I.M.F. expects the Venezuelan economy to contract both this year and next. And it has been forced to limit its promised oil shipments to China, in effect defaulting on its Chinese debt.

But the commodity decline isn’t sparing many. ”Growth in Latin America should move back to pre-commodity boom rates,” said Alejandro Werner, who leads the Western hemisphere division at the I.M.F. Indeed, the fund expects the region to grow barely 1.3 percent in 2014, a third of its pace just three years ago.

The bust underlines how Latin American economies have failed to overcome the existential weakness that has plagued them throughout history: a dependence on raw materials that has shackled the region’s development to an incessant sequence of booms and busts.

From Brazil and Argentina in the southern tip of the region to Mexico in the north, officials across Latin America fretted for years that China undermined their decades-long efforts to build the manufacturing industries that, they hoped, would provide a ticket into the developed world.

Not only did China’s cheap labor outcompete Latin American industry and draw the lion’s share of global manufacturing investment, but its appetite for Latin America’s minerals, oil and agricultural products also raised the value of currencies around the region, making their manufactured goods even less competitive.

Manufacturing’s share in Latin America’s economic output has declined steadily for more than a decade, ever since China inserted itself aggressively into the global economy by entering the World Trade Organization.

At the same time, the share of raw materials in Latin America’s exports, which had fallen to a low of 27 percent in the late 1990s, from about 52 percent in the early 1980s, surged back to more than 50 percent on the eve of the global financial crisis.

China’s footprint on Latin America is contributing to what the Harvard development expert Dani Rodrik would call its ”premature de-industrialization,” shutting off the standard path of economic development followed by pretty much everybody since the industrial revolution.

Mr. Velasco, 54, recalled when a 23-year-old student in Antofagasta asked him what the Chilean government would do with the nation’s copper riches. By the time the student was his age, Mr. Velasco responded, Chile would have no more copper.

”The question,” he said, ”isn’t what should we do with copper but what will we do without it.”

China’s diplomats emphasize that it is a developing country, not an advanced, ”imperialist” power like the United States or the European colonial powers who ruled for centuries and served as the first foreign exploiters of Latin America’s mineral wealth. To many in Latin America, the difference hardly seems relevant.

Take San Juan de Marcona, a remote village on the edge of the Pacific Ocean in the Nazca region of Peru. Built in the 1950s to house workers at the vast open-top American-owned iron mine, the town no longer houses managers from the United States. In the 1970s, General Juan Velasco Alvarado, then Peru’s military dictator, pushed them out.

Today, Marcona’s managers come from Shougang, of China, which bought it from the Peruvian government in the 1990s.

”A growing China was very important to bring Peru along in the last 10 years,” said Cynthia Sanborn, who leads the Research Center at the Universidad del Pacífico in Lima.

North of Marcona, Chinalco built a town to relocate 5,000 inhabitants of Morococha, where it will blast open a copper mine. This year, China’s MMG, Guoxin International Investment and Citic Metal bought the Las Bambas copper mine from the Anglo-Swiss conglomerate Glencore.

Chinese companies are interested not only in raw materials but also in vast public works to transport the raw materials, including rail links across Brazil and a proposed $50 billion, 171-mile canal across Nicaragua.

In 2010, Chinese lending to Latin America roughly equaled that of the World Bank, the Inter-American Development Bank and the United States Ex-Im Bank combined. (It has since slowed.) Carmen Reinhardt of Harvard forecasts that China could become Latin America’s main source of financing.

Perhaps Latin America should just count its blessings. ”The concerns of dependency are there, but if China weren’t there, Peru would be seeking other markets for its minerals,” he told me.

Mr. Werner of the I.M.F. argues that the case for deindustrialization is overblown. ”From a medium-term perspective, China is a plus, plus, plus for Latin America,” he said.

In agriculture, for instance, exports to China are leading to lots of innovation and efficiency improvements. Demand for Brazil and Argentina’s soy — a principal source of animal feed — is unlikely to wane as the Chinese become richer and eat more meat.

”Don’t bet against nature,” Mr. Werner urged policy makers in the region. ”Play to your comparative advantage.”

In some of the region, however, China has inspired a nostalgic reinterpretation of its economic history and a re-examination of the policy choices of its past.

Remember Dependency Theory?

The doctrine, which spread across Latin America from the 1950s through the 1970s, proposed that the region, or any developing country, could never advance simply by selling natural resources to the rich North, using the money to import the North’s industrial goods. Import substitution, behind a wall of trade barriers, was the path to prosperity.

The theory fell into disrepute during Latin America’s ”lost decade” of the 1980s — blamed by a new crop of market-oriented, United States-trained leaders in the 1990s for turning the region into an uncompetitive backwater.

Courtesy of China, it’s back, fine-tuned to adapt to a more integrated global economy.

”We’re not calling for more protectionism, but to substitute imports within competitive open economies,” said Alicia Bárcena, who leads the United Nations’ Economic Commission for Latin America and the Caribbean. ”We must think of creating regional production chains to serve regional markets.”

She suggests that China should still be invited to participate in Latin America’s development, but on different terms: ”You want our commodities? O.K. But also invest in solar panels here,” she proposed.

Yet for all the hopes in Latin America that a new kind of deal can be had, the symbiotic relationship between the largest importer of commodities and one of the biggest commodity-exporting regions of the world is unlikely to change in any substantial way.

”Without this complementarity, the Chinese don’t have much to go on,” said Matt Ferchen, who runs the China and the Developing World program at the Carnegie-Tsinghua Center for Global Policy in Beijing. ”It’s working out quite well for China.”

And the symbiosis could survive for a long time. As Huang Haizhou, the managing director of China’s International Capital Corporation, told the nervous Latin Americans at the I.M.F.’s conference here, despite any slowdown in growth, China’s long-term demand for commodities remained voracious.

China’s income per person is still only about one-third that of Chile. Every year for the next 30 years, it plans to move 1.3 percent of its population from the countryside to cities. That will require a lot of construction.

”China’s demand for commodities is more important for Latin American growth than exports to the United States,” Mr. Huang said, ”and it will be more important for many years to come.”

This may come as a relief to the worried finance ministers here, struggling to recrunch their budgets to fit lower growth and scarcer tax revenue. But it also poses a challenge to the region’s leaders: maybe the traditional development strategy based on manufacturing needs to be recast in Latin America for a new era.


The Implications of the Torture Report

13 min read
The reaction to the Senate Intelligence Committee’s “Study of the CIA’s Detention and Interrogation Program” is as significant as what the study uncovered about the psychology and methods of those who run the Deep State that rules us.
After years of the Obama administration’s foot-dragging, obfuscation and threats, the senate Intelligence Committee’s “Study of the CIA’s Detention and Interrogation Program” has finally flopped onto the senate presiding officer’s desk like a landed carp.
The present writer will take as a given the veracity of its three main findings: that the United States engaged in practices both legally and commonly definable as torture; that the actionable intelligence these practices produced was negligible; and that the practices tainted the moral prestige of the United States government in a manner that damaged its foreign policy. These assertions may be taken as true both because of the abundant evidence presented in the report itself and because of the flailing and hysterical reaction by our country’s national security elites.
Whether from obstruction or lack of control, the implications of the CIA’s spying on Congress merited Senator Feinstein’s description of it as a constitutional crisis.

“Hysteria” does not arise from groundless causes, but from a guilty and conflicted id seeking to displace blame from itself onto others. The reaction to the senate study is as significant as the facts that the study uncovered in providing a window on the psychology and methods of those who run the Deep State – the hybrid association of key elements of government and parts of top-level finance and industry that is effectively able to govern the United States with limited reference only to the consent of the governed as it is normally expressed through the formal political process. This essay will discuss some of the implications of that reaction.

President Obama is an operative of the Deep State, but it is unclear whether he is its master or its prisoner. The president’s role in this affair has been extremely puzzling. On March 11, 2014, when the torture issue blew up in the senate because of Intelligence Committee chair Diane Feinstein’s allegations of CIA spying on her committee’s staff members, she said that the White House had been supportive of her committee’s probe of CIA activities. That may have been true, but that is still only what she said she believed. It is hardly beyond the realm of plausibility that the president or one of his aides told her that the White House was supportive of her committee’s investigation while at the same time tolerating, or even encouraging, CIA obstruction. But suppose the president did support the committee’s probe? That would imply that the White House does not really control the CIA. In either case, whether from obstruction or lack of control, the implications of the CIA’s spying on Congress merited Senator Feinstein’s description of it as a constitutional crisis.

Obama showed a similar split personality nine months later when the report was finally released. The president, and his White House press secretary, insisted that he was in favor of the public seeing the study (or at least the redacted summary of it). Yet on the Friday before its release, John Kerry, the most senior cabinet official in the government, called Senator Feinstein and urged her not to disclose it.

Shorter Kerry: “Lots of things going on in the world; not a good time for disclosure.” But when is there ever not a lot of things going on in the world? Kerry seems to have travelled a great distance since he was the young Winter Soldier who proclaimed that you can’t ask someone to be the last man to die for a mistake. Did Obama authorize Kerry to make that call? If not, did he care that Kerry was contravening stated White House policy? Or does Obama have any say in the matter?
The CIA’s strategy . . . was less about keeping faith with its dutiful foot soldiers than about priming its former big-shots with an advance look at the report so that they could go on an immediate public relations counteroffensive.

These questions, however, may be addressing a distinction without a difference. Whether willing or unwilling, whether in charge or not, Obama is fulfilling his role. Obama’s personality has been more impenetrable than that of any other president in recent history; yet he may, like Napoleon III, be a sphinx without a riddle: merely an ambitious person who tested well with focus groups and who arrived at the right moment, promising hope and change as a pretext to reign over, but not rule (in the manner of a constitutional monarch) a corrupt and entrenched system without conviction or feeling any personal stake in the great issues.

For the Deep State, attack is the preferred form of defense. National security elites have been preparing a vigorous counterattack for months. Because of the seriousness of the crimes in which CIA officers may have been implicated, chairwoman Feinstein reluctantly agreed to the CIA’s request that some of the current and former CIA officers mentioned in the senate report should have the opportunity to read it prior to its release. This was an unusual concession, since subjects of congressional investigations are not normally made privy to the contents of a report before the public finds out, but it is not a completely unreasonable request given the gravity of the allegations against these individuals.

Nevertheless, just prior to the time scheduled for the officers to read the document in a secure facility, the CIA told them there had been a mix-up, and that only senior, current and former CIA leadership (people like former directors George Tenet, Porter Goss or General Michael Hayden) could read the report. These were men with lucrative post-government careers and plenty of public relations knowhow in dealing with the Hill and who likely would have continued to have a range of press contacts. The CIA’s strategy was crystal clear: Its request to the senate was less about keeping faith with its dutiful foot soldiers than about priming its former big-shots with an advance look at the report so that they could go on an immediate public relations counteroffensive against the document on the day it was publicly released.
The rebutters’ gaps in logic and evidence have almost never been challenged by the bulldogs of our gloriously free and adversarial press.

In fact, the opening barrage occurred even before it was made a part of the senate record. On the Sunday talk shows, people like General Hayden and House Intelligence Committee chairman Mike Rogers were at their most hyperbolic. Congressman Rogers seemed to revel in the prospect of being vindicated in his prediction of dire terrorist attacks as a result of the study’s public disclosure. General Hayden waxed positively lyrical about the blessings of torture, as he has been doing virtually nonstop since he stepped down as CIA director in 2009. (1)
It was all hogwash and misdirection. The rebutters produced no concrete evidence that torture brought worthwhile results. Blaming the revelation of the crime, rather than its commission, on anything bad that might happen in the future is to stand ordinary ethics, not to mention common sense, on its head.

It requires only a moment’s thought to realize that mistreated detainees who were subsequently released knew exactly what was happening to them, and they would tell their family, friends and anyone else in their home countries, including local media, what went on in those prisons. The only people who would not know, absent official disclosure, would be the American people. That, however, is how the Deep State operates: It forces through its agenda by appealing to the elemental fear of terrorism so that it short-circuits the logic of the listener.
The news media are complicit. The rebutters’ gaps in logic and evidence have almost never been challenged by the bulldogs of our gloriously free and adversarial press. During the two or three days prior to the senate report’s release, the media were awash with unbalanced stories trumpeting the (hypothetical) damage disclosure would cause, all based on interviews with former government officials with an obvious interest in keeping the report under wraps.

This is in part because the media maintain an incestuous relationship with their current and former government sources. One of the most egregious examples was CBS News; one of its national security consultants is Michael J. Morell, a former acting CIA director. The network actually permitted Morell to inveigh against the report’s release under color of being a news consultant, despite the fact that he was one of the former CIA big-shots who had prior access to the document and had worked on a rebuttal to it! The mortal remains of Edward R. Murrow are presumably spinning like a rotisserie. (2)

“We’re the real victims here.” When they are caught in the act, it is a frequent psychological ploy among bullies and con men to accuse other of the crime and to play the victim. The senate study has been accompanied by a torrent of such behavior on the part of the Deep State’s current and former operatives. Several former CIA directors and other former intelligence players have even launched, with suspiciously miraculous speed, a website devoted to attacking the senate report and portraying themselves as victims. (3)
Their demand for secrecy is really a penchant for self-dealing without public scrutiny.

The themes were predictable: senate Democrats were just picking on dedicated public servants doing their patriotic duty to keep Americans safe. The program they administered was lawful. CIA officers now have to worry about shifting political winds. We got bin Laden, didn’t we? Those sloppy senate staffers didn’t even interview us.
And so on. Let us examine those assertions.

False appeals to patriotism have become so common after 9/11 that they are almost an involuntary reflex. But, as Samuel Johnson said, patriotism is the last refuge of the scoundrel. In reality, however much of the rebuttal brigade see themselves as patriots, they were actually senior operatives of the Deep State, deeply imbued with an ideology that is neither specifically Republican nor Democrat, and certainly not the beliefs necessary for the maintenance of a constitutional republic under law and the informed consent of the governed.

The ideology of the Deep State is about maintaining and enhancing power – and cashing in afterwards. It is worth noting that almost all senior national security operatives never retire after leaving government; they cash in with consultancies and board memberships with security-related corporations. It’s not that no one ever truly retires, but like snakes in Ireland, they are a vanishingly rare phenomenon. It is profoundly in the material interest of these operatives to defend the Deep State so as to keep the cash flowing.

When they complain about the CIA being subject to shifting political winds, they are expressing distaste for the very processes of elective politics that constitute the democracy they once swore to defend. Their demand for secrecy is really a penchant for self-dealing without public scrutiny. It is exactly what James Madison warned about: “A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
The mountain of documents uncovered by the senate staffers gave a far more accurate picture of the contemporary situation than the self-serving memories of a George Tenet or a Porter Goss would have.

Assertions that the interrogation program was lawful rest on claims that a presidential finding and the Justice Department’s office of legal counsel authorized it. But a presidential finding says nothing at all dispositive about a law, treaty or constitutional provision. Opinions of executive branch legal counsels are not the same as a plain reading of the applicable statute; it has been my experience in Congress that executive branch legal counsels are far too often in the habit of giving a green light to whatever farfetched interpretation of a law the executive branch wants to give it. To say that the president signed off on something, so consequently it was legal, sounds uncomfortably like the Nuremburg defense, or President Nixon’s memorable statement to David Frost: “If the president does it, it’s not illegal.” What is legally binding are the Geneva Convention and the relevant federal statutes prohibiting torture.

The CIA supposedly ended the enhanced interrogation program in 2006. If in fact the torture produced actionable intelligence, why did it take five more years to dispose of Osama bin Laden, the supposed object of all our efforts after 9/11? That’s longer than the period the United States was in World War II, from Pearl Harbor to Tokyo Bay. Ticking time bomb, indeed.
Chillingly, “enhanced interrogation” is a literal translation of the German verschärfte Vernehmung, a term introduced by a Gestapo directive of June 12, 1942, to describe permissible methods of interrogating prisoners.

Finally, the big-shots’ website engages in mock sorrow over the fact that the senate Intelligence Committee’s investigators did not bother to investigate them. There is good reason for that. Legendary investigative journalist I.F. Stone rarely interviewed high officials in government, but based his stories to the extent possible on documents. Why? As a subject becomes controversial, or as people risk getting into legal jeopardy, actors in a situation tend to shade their stories to make themselves look better or to exculpate themselves. Or they may simply misremember an incident several years old. But documents give an exact picture of thinking and intention at the time they were written.

The mountain of documents uncovered by the senate staffers gave a far more accurate picture of the contemporary situation than the self-serving memories of a George Tenet or a Porter Goss would have, particularly as they had reason to believe they might be in legal jeopardy, whatever the disinclination of the Obama administration to prosecute torture might be. It certainly would make foreign vacations a riskier proposition for such people, if they traveled to countries claiming universal jurisdiction.

As always, contractors are the real creeps. In every possible situation, from mess halls to logistics to the guarding of military bases, the government contracts out services so as to keep the money flowing into the hands of potential political contributors. And so it was even with torture. The CIA outsourced the program to two psychologists, James Mitchell and Bruce Jessen. The report says that the two had never witnessed a real interrogation before (as opposed to the mock interrogations conducted by the military’s survival, evasion, resistance and escape schools), and had no relevant other experience, such as cultural knowledge of the Middle East. Yet, as with Halliburton, incompetence was no obstacle, and the two were hired to run the program of “enhanced interrogation.”

Chillingly, “enhanced interrogation” is a literal translation of the German verschärfte Vernehmung, a term introduced by a Gestapo directive of June 12, 1942, to describe permissible methods of interrogating prisoners. Post-World War II war crimes tribunals judged the techniques described in the directive – techniques strikingly similar to those employed six decades later by the CIA – to be war crimes. It should also be noted that a Japanese sergeant at Changi Prison in Singapore was sentenced to 20 years at hard labor after World War II for waterboarding prisoners.
People routinely condemn politicians and bigwigs of all stripes without noticing an uncomfortable resemblance.

The senate document says that of 139 CIA detainees, 39 were selected for the psychologists’ treatment. Since the agency had showered the pair with $81 million to conduct the program, that comes to over $2 million per detainee! The cost makes the Air Force’s $600 hammer look like a bargain. And why is it that so many people in the CIA were convinced that the intelligence these methods produced was so good? Perhaps because the psychologists themselves were in charge of evaluating whether the interrogations they had designed produced good results, and whether they should be continued. I have often speculated on how many of the S-class Mercedes one sees on the Washington Beltway, or yachts in the Washington marina, were the fruits of the so-called war on terror that conveniently never seems to end. There is even a pot of gold, apparently, in forcing people to stand on broken legs.

If you want to see the Deep State, look in the mirror. The torture report makes one wonder: Did all this happen against the will of the American people? To some extent that may be the case, because public opinion is virtually irrelevant.

The political game is so rigged that something like this was to a degree foreordained. It also explains why no one will ever be tried, at least in a US court. But why is it that our political system is the way it is? It is true that at the polls, Americans face a rigid, binary choice of pre-selected candidates in thrall to corporate money. That is the stock progressive critique of the American political system.

Still, it does not quite explain why the people just last month elected possibly the most reactionary and plutocratic Congress since the Coolidge era. There are other psychological factors involved than mere mystification and manipulation of a poor, deluded public. Just as Americans console themselves with the belief that Washington is not the real America when it is in reality only concentrated distillation of all the good and bad characteristics of any American town, so do people routinely condemn politicians and big-wigs of all stripes without noticing an uncomfortable resemblance. It is one thing for the Jon Stewarts of the world to denounce Dick Cheney and his henchmen for authorizing torture as if they were somehow disembodied from society at large.
t is more painful to reflect upon the results of a 2014 Amnesty International poll, finding that 45 percent of Americans believe that torture can be justified on public safety grounds, a significantly higher percentage than in any other country in what is now called the developed world. By contrast, respondents in countries like Chile, Argentina, and Greece, where the public knowledge of torture has been much more up-close and personal, gave sharply lower affirmative responses to the question than Americans did. Gazing at the snarling face of Dick Cheney, some Americans would be shocked to find it is a grotesque reflection of their own countenance, distorted as in a funhouse mirror.

1. It has been little remarked in the context of US mistreatment of prisoners, but the historical record shows that torture is often intertwined with sexual perversion of the type described by Richard von Krafft-Ebing, as the incidents at Abu Ghraib prison demonstrated to the world. One cringes to think how people like General Hayden may be getting their jollies.

2. To be fair, in 2007, CBS News’ Scott Pelley baited former CIA director George Tenet into making a touchy, defensive denial that the CIA engaged in torture which only succeeded in suggesting that precisely the opposite was the case.

3. The fact that the current CIA director, John Brennan, allowed former government employees to see a highly
sensitive document that was being withheld even from senators not on the intelligence committee so that these former employees could more effectively engage in partisan axe-grinding ought to be investigated as both an ethics and a security violation.

America Didn’t Just Prosecute Torturers, We Executed Them

Posted on Dec 16, 2014

By William Pfaff
The wartime Western allies, their judges sitting in judgment on war crimes in the city of Nuremberg, ordered hanged until dead eleven major World War II criminals at Spandau Prison in Germany on October 6, 1946. Those judged were not hanged because their crime was that they were themselves torturers; they were too highly placed for that. They were people who had ordered that the gloves be taken off. It was the people under their orders who took the gloves off and tortured and murdered.
For many years preceding the Second World War torture of a human being was widely accepted as being a heinous crime. It was not formalized in international law as such, because it was taken as part of the General Law of Humanity, which is to say law that was taken to be obvious to humans in Western Civilization.
Since World War II and the Nuremberg Trials, and other war crimes trials held in the months and years that followed, torture has been formally identified as an international crime in a number of conventions and treaties, and by such bodies as the International Red Cross, and of course the United Nations.
It has widely become adopted into national as well as international legal codes. It is part of the Laws of War as recognized by the United States Armed Forces.
The United States has also incorporated it into the Code which binds all men and women serving in the forces. It has added the rule that no soldier may obey an illegal order, such as an order to torture a prisoner.
This obviously places such a soldier in a paradoxical situation since the superior giving the order is assumed to issue only legal orders. The soldier would rarely be in a position to appeal over his head to a higher officer. In general it must be assumed that the soldier is in a position in which his own conscience must decide his act. It is exactly this which, with rare exceptions, is absent from the story we have read in the Senate CIA Report.
In the CIA case there is little record of employees of the agency refusing an order to torture. There is a record of people in this position denouncing the order to the press or to some civilian political authority, Congress, or the public. This typically has resulted in the legal prosecution and conviction of the truth-tellers, or—especially under the Obama administration (to the dismay of Mr. Obama’s admirers) to strenuous efforts to capture and prosecute these people for revealing the truth about what may be crime or malfeasance, as in the cases of Julian Assange and Edward Snowden, and of course that of the self-confessed conscientious objector, Bradley (Chelsea) Manning—as well as a few others.
It has for years been known in police and intelligence circles that torture rarely produces useful and timely information from a captive. It typically produces lies meant to stop the torture, untrue information supplied to please the torturer’s apparent wishes, or murder of the victim by the torturer or the torturing institution, as at Guantanamo, and apparently at one or more of the Black Sites.
The most disturbing and basic question is why Americans officials seemed to want so badly to torture when to do so was known – even to the Agency – to be so unprofitable. Dick Cheney in an interview (on “Meet the Press”) stubbornly insisted that the torture had produced rich results, was not properly torture anyway, and that the CIA report published by the Senate was a deliberately concocted and politically motivated compendium of falsehoods by Democratic politicians and the liberal press—even though no doubt can exist that it was prepared from information inside the CIA by members of the Senate staff.
Within the Agency a pathology clearly has existed and prevailed, but it was initiated and promoted by Agency leaders and prominent members of the Bush administration. It was sustained inside the Obama administration by other such persons in official positions and in the Congress despite Mr. Obama’s forbidding of torture and his unfulfilled promise to close Guantanamo prison, where torture apparently continues even now in the form of forced feeding, which serves no defensible military or intelligence purpose at all, other than to debase prisoners (and obviously their jailers, as well as those officials who ordered it). These people have simply wanted, and still want, to torture people.
Apparently nothing is going to be done to change anything as a result of this episode, just as nothing effective was done about torture and assassination in Vietnam. In Vietnam we had the Phoenix program of assassinations of suspected enemy collaborators among the peasantry. I emphasize ‘suspected,’ having gone along, in a semi-official analytic capacity, on one such interview of a terrified family whose father was not at home.
The American civilian I accompanied was followed by a montagnard tribal executioner so that the job, if necessary, could be done on the spot. The American seemed to like his work. I mention this—which for me followed several years of work with a CIA-owned international political warfare organization—so as to disabuse the reader who might think that what I am about to say is the fancy of an unsophisticated journalist.
In my view those in the American government who ordered and conducted this program of torture by the CIA since the autumn of 2001 should be arrested, tried for self-evident common crimes, and if convicted, hanged.
That would convince government officials for years to come that international legal prohibitions of torture and other readily recognized crimes against humanity, which have been ratified by the United States Executive Branch and Congress, shall be obeyed, and illegal orders to the contrary be disobeyed and denounced to the international public if necessary.
Regrettably, in this case in the United States, criminals are no longer hanged, nor is the death penalty widely applied to other than the poor. Thus I would assure that the sentence be served in a common prison in the company of ordinary criminals, sharing the ordeal which is the common experience of that vast number of Americans condemned to penal servitude. In no case should it be served in the comfortable federal prisons reserved by our government for white-collar criminals. They should be made to think of Nuremberg.

Visit William Pfaff’s website for more on his latest book, “The Irony of Manifest Destiny: The Tragedy of America’s Foreign Policy” (Walker & Co., $25), at

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5 noviembre, 2014
By Taos Turner
November 4, 2014
Cristina Kirchner Spends Second Night in Hospital After Being Diagnosed with Intestinal Problem
BUENOS AIRES—Argentina President Cristina Kirchner spent a second night in the hospital and suspended key activities on Tuesday after being diagnosed with what her medical team calls an “infectious fever” and a swollen intestine, an ailment that doctors say can take days or even weeks to overcome.
Mrs. Kirchner’s medical team said in a brief statement late Monday that the sigmoid area of her colon, or large intestine, was inflamed. She is in stable condition and being treated with intravenous antibiotics at the Otamendi Clinic in Buenos Aires.
Gastrointestinal specialists who have not treated her say it appears Mrs. Kirchner may have colonic diverticula, wherein pouches are formed on the outer wall of the intestine. The problem affects nearly half of elderly adults in Argentina, according to Dr. Jorge Dávolos, the honorary head of gastrointestinal medicine at the Italian Hospital in Buenos Aires.
“You give the patient liquid and antibiotics. In a minority of cases surgery is required,” Dr. Dávolos said. “The rest and recovery period could be weeks instead of days. But every case is different and I’m talking about this issue in general, not about the president’s case in particular.”
Mrs. Kirchner suspended a meeting planned for Tuesday with Chilean President Michelle Bachelet. The president’s cabinet chief, Jorge Capitanich, offered no additional details about her schedule during a press conference on Tuesday.
The 61-year-old president’s health has been in the news several times. Just over a year ago, Mrs. Kirchner had successful head surgery to remove a blood clot from near her brain. In January 2012, she underwent surgery to remove a noncancerous growth on a thyroid gland.
The president took a six-week leave of absence after the surgery on her head. Doctors described the operation as safe and relatively routine. During her recovery, Mrs. Kirchner made no public comments, and government officials said little more about her than that she was recovering favorably.
In recent years, the president has also suspended or canceled domestic and international trips because of bouts of low blood pressure. Last month, the president’s medical team ordered her to rest for a couple of days after suffering a sore throat.
By Camila Russo
Nov 4, 2014
Pablo Albina, Schroders Plc’s head of Latin America fixed income, says investors who abandoned Argentina’s bonds after the nation defaulted are missing out.
“People think the end of the world is near for Argentina but that’s myopic thinking,” the 45-year-old money manager said in a telephone interview from his office in downtown Buenos Aires. “We’re very optimistic.”
His results provide plenty of reason for his enthusiasm. The Schroder Capital Renta Fija (BECARFD) fund, which manages the equivalent of $100 million, has returned 50 percent in peso terms this year, the most among the 50 biggest debt funds based in Argentina, data compiled by Bloomberg show. That would imply a 15 percent return in dollars, based on the official exchange rate, according to data compiled by Bloomberg.
Albina has sidestepped Argentina’s debt crisis by buying debt securities that are shielded from the U.S. court order that plunged the country into its second default in 13 years. They include dollar-denominated government bonds issued under local law as well as notes sold by the biggest companies such as YPF SA (YPF) and Pan American Energy LLC.
Many investors have shied away from Argentina’s securities governed by local law because of the risk they may be paid in pesos instead of dollars. To Albina, that’s better than not getting paid at all, which is the predicament that creditors of foreign law bonds have been in since July after President Cristina Fernandez de Kirchner’s administration refused to negotiate with holders of decade-old unpaid debts.
Blocked Payment
The nation’s benchmark local-law bonds due 2017 have returned 6.2 percent this year, versus a gain of 0.9 percent for similar-maturity debt issued under New York legislation. The securities fell 0.17 cent today to 89.07 cents on the dollar as of 11:37 a.m. in New York.
Globally, Schroders manages $464 billion, according to its website.
U.S. District Judge Thomas Griesa has blocked Argentina payments of $539 million on its 2033 bonds in July and of $161 million on notes due 2038 because the government didn’t comply with a court order to pay holders of defaulted debt led by billionaire hedge fund manager Paul Singer.
At the same time, debt service for local government bonds and corporate debt have continued uninterrupted. Griesa has also allowed payments on $446 million of dollar-denominated local law debt from restructured securities.
‘Only Class’
“The willingness to pay is unshakable and the ability to pay remains adequate,” Daniel Freifeld, co-founder of Callaway Capital Management LLC, said in a telephone interview from Washington. The local law bonds are the “only class of Argentine bonds that has those characteristics.”
Fernandez and her officials say that Argentina hasn’t defaulted because it deposited the necessary funds to pay its restructured bonds and it is up to creditors to demand their money sitting at the central bank from Judge Griesa.
A group of funds including George Soros’s Quantum Partners LP and Kyle Bass’s Hayman Capital Management LP asked a London judge to protect a 1.3 billion euro ($1.6 billion) investment in Argentine bonds from New York lawsuits yesterday.
Argentina’s bonds issued under local legislation have historically yielded more than New York law bonds until the gap reversed in October 2012, when a U.S. appeals court upheld Griesa’s ruling that the nation has to pay defaulted bondholders whenever it pays restructured debt.
‘Impartial Rulings’
Local law debt is usually seen as riskier than bonds issued under U.S. or U.K. legislation because foreign investors may be more vulnerable if governments or companies change the terms of the contracts, according to David Tawil, president of hedge fund Maglan Capital LP.
“It’s unsettling for investors that come from a locale where the law is much more developed and the courts can be relied upon for impartial rulings,” said Tawil, who invests in Madalena Energy Inc., which has operations in Argentina.
A concern for investors in Argentine local-law bonds is that it would be easier for the government to pay the notes in pesos if it runs out of foreign currency. The country’s international reserves are down $24.5 billion from their high of $52.6 billion in January 2011.
Albina’s fund, which has returned 52 percent in the past 12 months, is also beating inflation. Consumer prices have risen an estimated 39.5 percent in the past year, according to Buenos Aires-based research firm Elypsis.
The expiration of a key bond clause on Dec. 31 may help restart negotiations with creditors. Economy Minister Axel Kicillof said conditions for negotiations will improve by year-end in an interview published yesterday in Mexico’s La Jornada.
“The default will have a reasonable solution once the right conditions are in place,” Albina said. “We see good prospects for the country and a big rally coming up in the next few months.”
By Bob Van Voris and Phil Milford
Nov 4, 2014
Argentina asked an appeals court to reverse a ruling that it’s in contempt of court for disobeying the U.S. judge overseeing suits stemming from its 2001 sovereign debt default.
Argentina asked the New York-based appeals court to overturn the finding of U.S. District Judge Thomas P. Griesa that the country is in civil contempt of court for its plan to shift control over payments of its restructured debt to Buenos Aires, according to a court filing yesterday.
Griesa in September said that Argentine officials wrongly tried to replace Bank of New York Mellon Corp. with Nacion Fideicomisos SA, a government-controlled bank, as indenture trustee for the restructured debt. Argentina is also appealing Griesa’s order finding that the plan to pay the bonds locally, outside the reach of his court, is illegal.
A group of bondholders asked Griesa to fine Argentina $50,000 a day until it complies with his orders. Griesa hasn’t ruled on that request.
Argentina, which hasn’t paid numerous court judgments in favor of defaulted bondholders, may also ignore any fine the judge imposes to force it to comply, lawyers following the case have said.
The nation hasn’t paid a sanction imposed against it in a 2000 case in which a U.S. insurer claimed $4.2 million and won. That amount has grown to $29 million, including interest, attorney fees and a $4,000-a-day sanction for violating a court order.
Record Default
Griesa is overseeing lawsuits involving bonds Argentina repudiated in 2001 when the South American country defaulted on a record $95 billion, roiling international markets and blocking the nation’s access to credit. Argentina exchanged 92 percent of its defaulted bonds for new ones, at a sharp discount, in restructurings in 2005 and 2010. A group led by Paul Singer’s Elliott Management Corp. hedge fund is trying to recover full payment for their defaulted bonds.
Griesa ruled in 2012 that Argentina can’t pay holders of the restructured bonds as long as it refuses to pay off the holders of the defaulted debt. The U.S. Court of Appeals in New York upheld that ruling and it took effect after the U.S. Supreme Court declined to hear the case in June.
Argentine officials have vowed never to pay the holders of its defaulted debt, calling them “vultures.”
New Default
Griesa’s orders triggered a new default on Argentina’s performing debt when BNY Mellon, the bond trustee, refused to forward a $539 million payment on July 30.
The republic on Sept. 30 deposited $161 million in payments intended for performing-debt holders, with Nacion Fideicomisos.
Griesa yesterday expanded the power of his Special Master Daniel A. Pollack to take on additional cases in conducting settlement negotiations with plaintiffs and Argentina. Pollack, chosen as mediator in June, is managing partner of the law firm McCarter & English in New York.
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).
By Charlie Devereux
Nov 4, 2014
Argentina’s peso rose to a two-month high in black-market trading after the government began a crack down on illegal street transactions in central Buenos Aires.
The peso strengthened 2.4 percent to 13.59 per dollar at 2:43 p.m. in Buenos Aires, its strongest level since Aug. 22. The gap with the official exchange rate of 8.5077 pesos per dollar, which Argentines need government permission to access, has narrowed to 59 percent from 89 percent on Sept. 24.
The black market peso has strengthened 15 percent since the appointment of central bank President Alejandro Vanoli on Oct. 1, who took office vowing to strictly enforce foreign exchange rules. Argentines turn to the black market to buy dollars to evade limits in the official market and avoid registering their purchases with tax authorities.
A crackdown on illegal currency operations “can in some circumstances in the short-term close the exchange rate gap and calm tensions,” said Gustavo Quintana, a currency trader at Rabello y Cia SA in Buenos Aires. “But these are short-term effects and while the causes aren’t fixed the black market isn’t going to disappear.”
Argentines also are buying fewer dollars as high inflation and lackluster growth crimps cash available for saving, Quintana said. Some Argentines who can buy dollars at the official rate are then turning around and selling the currency on the black market for a quick profit, according to Quintana.
“You can buy on the official market at the beginning of the month and when you need cash sell on the parallel market,” Quintana said. “It takes away demand from the black market and at the same time creates a greater supply of dollars.”
By Johanna Bennett
November 4, 2014
Over the weekend, two of Argentina’s largest newspapers (La Nacion and Clarin) reported that the government has plans to change laws so it can reach a settlement with holdout investors in the country’s ongoing debt drama.
Eurasia Group strategist Daniel Kerner warns investors to take these reports “with a grain of salt,” given that both newspapers are opposition publications. As he writes:
…it seems highly unlikely that the officials that have real decision-making power over these issues-President Cristina Fernandez de Kirchner and Economy Minister Axel Kicillof–would leak sensitive information on this matter through these papers. Moreover, their journalists do not have real access to key members of the economic team, or to the president.
Argentina is in a legal turmoil with hedge fund managers and other investors who refuse to accept terms for the restructuring of a 2001 debt default. The hedge funds sued in U.S. court and won, but the matter has yet to be resolved. Argentina recently passed legislation that returned legal jurisdiction on its U.S. bonds to Argentina.
In short, it remains a big, hot mess. And earlier this week, Argentina president Cristina Kirchner warned that relations with the U.S. could worsen because of ties that a White House appointee – Nancy Soderberg — has to hedge funds doing battle with Argentina.
Kerner agrees the government will likely try to restart negotiations next year, but says a deal will be hard to achieve “as President Kirchner is unlikely to pay the political cost of settling with holdouts for an amount close to what they obtained in the ruling.” He added:
The government continues to raise the stakes on this issue. Official rhetoric remains fairly inflammatory and focused on stating that the ruling is unfair and impossible to pay, and that a fair outcome is for Argentina to pay the terms of the restructuring (CFK sent a pretty combative letter to US President Barack Obama on 31 October, for example). It seems hard to see CFK completely turning around next year.
By Nate Raymond
4 November 2014
NEW YORK, Nov 4 (Reuters) – Argentina has filed papers to appeal a U.S. judge’s order finding the country in contempt for taking steps to evade his orders in a long-running dispute with hedge funds suing over defaulted debt.
Argentina late on Monday filed a notice of an appeal of a contempt finding by U.S. District Judge Thomas Griesa in Manhattan and his subsequent order that it must “reverse entirely” actions it had taken in violation of his decisions.
Any appeal would be heard by the 2nd U.S. Circuit Court of Appeals. Griesa has yet to decide what sanctions should be imposed on the Argentina after in September finding it had taken “illegal” steps to evade his orders.
Representatives for the hedge funds and Argentina’s U.S. lawyers did not immediately respond to request for comment.
Argentina defaulted in July after refusing to honor court orders to pay $1.33 billion plus interest to U.S. hedge funds suing for full payment on bonds following its earlier 2002 default.
The hedge funds, led by NML and Aurelius Capital Management, had spurned the country’s 2005 and 2010 debt restructurings, which resulted in exchanges for about 92 percent of the country’s defaulted debt.
Investors who exchanged bonds were paid less than 30 cents on the dollar.
The country’s most recent default came after the U.S. Supreme Court declined to hear Argentina’s appeal of a ruling that it must pay the holdouts when it paid holders of the exchanged bonds.
Griesa subsequently blocked Bank of New York Mellon Corp from processing a $539 million interest payment on what the country says is over $28 billion in debt. The order sent Argentina on a course to default after no settlement was reached.
Argentina’s appeal came shortly after Griesa earlier Monday issued an order giving a court-appointed mediator in the dispute, Daniel Pollack, broad authority to grant other investors a seat at the negotiating table to discuss a settlement.
Argentine Economy Minister Axel Kicillof told Mexico’s left-leaning La Journada Newspaper, in published comments on Monday that the chances of a deal will improve when the RUFO clause expires.
4 November 2014
Argentina’s default saga has rumbled on without resolution. Investors have failed to take up a debt-swap offer, and on October 31st the 30-day grace period on outstanding Par bond coupon payments expired, pushing Argentina into a fresh default. Acceleration risk is rising, but so is speculation of a deal with holdouts at the start of 2015 allowing Argentina finally to exit default.
The latest Par bond coupon payment fell due on September 30th, at which point the government deposited US$161m for the payment in the country’s largest state-owned bank, Banco de la Nación, as it attempted to evade payment restrictions made under a US court ruling that seeks to force Argentina to repay holdout creditors at the same time that it pays current bondholders. The debt swap was approved by Argentina’s Congress in September, but not a single bondholder proved willing to participate in a restructuring that changes the jurisdiction in which the bonds are to be repaid.
There have been clear legal and practical obstacles to involvement in the debt swap. Participants face possible contempt of court rulings in New York, while identification of bondholders would be difficult without the participation of the Bank of New York Mellon, the original payment agent for the exchange bonds. However, exchange bondholders are probably also holding out for a better deal, and speculating that an agreement between the government and holdouts will be concluded at the start of 2015, when the rights upon future offers (RUFO) clause expires. The RUFO clause could in theory force the government to give exchange bondholders the same terms that it gives holdouts under any deal, a proposition that the government cannot afford. A quick deal made after the expiry of the RUFO clause would allow Argentina to exit default.
Acceleration risk
A deal with holdouts in 2015 would also eliminate acceleration risk, which has been rising in recent months as holders of defaulted exchange bonds consider their repayment options. The exchange bonds, along with the Par bonds, include acceleration clauses that allow bondholders to demand repayment in full in the event of default, if at least 25% of bondholders agree. So far, bondholders have been reluctant to take such a dramatic step, not least because it would in all likelihood result in lengthy litigation, creating a “second-generation” of holdouts with little certainty of repayment. But the longer the government refuses to negotiate with current holdouts, the more acceleration risk rises.
Although The Economist Intelligence Unit remains sceptical about the government’s desire to reach a deal with the holdouts, it has been rumoured that the government is indeed considering an agreement with private banks and holdout creditors, which includes not just the litigant holdouts involved in the ongoing US court case (NML and Aurelius) and would involve repayments of between US$7bn and US$10bn. According to press reports, such an agreement could involve cash payments by private banks, which would in turn receive bonds issued by Argentina’s Treasury.
Apart from eliminating acceleration risk, such a deal would allow Argentina to emerge from over a decade of default and start to normalise relations with international capital markets. In the government’s straitened circumstances, such a possibility could finally prompt it to act. Pressure on the balance of payments and the currency is evident in the foreign reserves, which have halved over the course of the past three years. There has been some recent relief in the form of the receipt of US$814m, the first tranche of a currency swap agreed with China in July, which pushed the reserves back above US$28bn. However, these effects will be only temporary given strong demand for dollars by savers amid still-high devaluation expectations. In this context, an end to the default saga seems increasingly urgent if the government is to avoid a currency crisis.
By Brian Lawson
4 November 2014
On 24 October, international media reported a new court action against Argentina by one of its ‘hold-out’ investors. EM Limited, owned by billionaire Ken Dart, filed a suit in respect of USD835 million of pre-2001 defaulted bonds, seeking parallel treatment to the existing plaintiffs in Argentina’s outstanding case at the New York District Court. The case was assigned to the same judge, Thomas Griesa, who has ruled previously that Argentina cannot pay exchanged bondholders in full without extending the same treatment to those who refused exchange, pushing the country into technical default. According to Bloomberg, Dart has been a long-term hold-out investor in Argentine debt – in 2013, the Argentine unit of his shipping company Dart Container faced investigation for alleged tax evasion, and he was accused by Argentine president Cristina Fernández de Kirchner of financing anti-government protests.
Significance: Markets have ignored the new case. The average spread on Argentine debt fell from 7.45% over US Treasuries on 24 October to 7.08% at end-month. This is wholly logical: markets should have long since discounted that if a favourable deal were granted to the hold-out funds that are plaintiffs in the New York court case, other hold-out funds would seek the same treatment. Recent market developments show growing institutional optimism that a resolution to Argentina’s hold-out dispute could be found early in 2015, after legal impediments potentially requiring similar treatment for exchanged bondholders (the so-called RUFO clauses) have expired. Argentina’s Minister of Economy Axel Kicillof strengthened that view on 3 November by stating that negotiation would be more possible after the RUFO expiry. On 20 October, Redwood Capital Management, a distressed debt fund, established a USD160-million fund for investment in Argentine risks. The new fund follows the recent establishment of similar vehicles by other institutional investors, Gramercy Funds Management, Owl Creek Asset Management, and Bienville Capital Management. Such specialist investment flows indicate market optimism that Argentina’s technical default could be resolved promptly, generating considerable upside potential for its bonds. Although this is technically possible, the Argentine government’s long-standing hostility to hold-outs provides grounds to fear slower and more conflictive resolution, extending until after the general election in October 2015.
By Sarah Marsh
4 November 2014
BUENOS AIRES, Nov 4 (Reuters) – Procter & Gamble Co, the world’s No. 1 household products maker, has no plans to lay off staff in Argentina despite having to suspend commercial operations in the country while it grapples with a tax fraud probe, a source familiar with the matter said on Tuesday.
P&G employees are showing up for work and carrying out tasks not related to the sale and purchase of goods, while the company continues talks with the Argentine tax authority, AFIP, in an attempt to defuse the situation, the source told Reuters.
Argentina accused P&G on Sunday of hiding income and over-billing $138 million in imports to get money out of the South American country, which has stringent capital controls in place to protect its fast-dwindling foreign reserves.
Argentina’s leftist government, which favors strong intervention in the private sector, has publicly accused a host of major foreign companies such as global grains exporters Bunge and Cargill of evading taxes over the past few years.
Such investigations are usually resolved with a hefty fine, with the companies resuming business as usual before any real toll is taken on operations or profits.
“It is commercial operations that have been stopped. The company cannot import, export or sell its products. But that does not affect day-to-day work at P&G,” the source said. “Employees continue to work and there are no thoughts of firing anyone.”
Many other companies including foreign giants such as Anglo-Dutch Unilever supply Argentine supermarkets with some of the same household goods as P&G, meaning that even if the tax probe drags on, there is little risk of shortages.
P&G, which earlier this year came under the scrutiny of Mexican authorities for alleged tax avoidance, said on Monday it had paid all taxes owed in Argentina but was “working to more fully understand the concerns and to constructively resolve them”.
Cincinnati, Ohio-based P&G, maker of Gillette razors and Tide detergent, has more than 1,200 employees in Argentina, where it runs three manufacturing plants and two distribution centers.
The company’s Argentine operations contribute about 1 percent to its overall sales. P&G reported net sales of $83.1 billion in 2014.
Argentina’s cash-strapped government has been ramping up state intervention in the economy, Latin America’s third largest, in an attempt to prevent its latest debt default from triggering a balance of payments crisis.
The country has been banished from international capital markets since its 2002 default on about $100 billion in bonds, compounded by a fresh default on restructured bonds in July.
The government is restraining access to foreign currency in a bid to retain central bank reserves, which have fallen 17 percent over the last 12 months to about $28 billion.
By Charles Newbery
4 November 2014
Buenos Aires (Platts)–4Nov2014/702 pm EST/002 GMT  Argentina’s state-run energy company YPF and Malaysia’s state-owned Petronas are poised to launch a partnership for shale oil development in Argentina, YPF CEO Miguel Galuccio said Tuesday.
Finalization of the agreement, first signed in August, hinged on congressional approval of a reform of the oil sector designed to improve investment conditions and profit potential for the private sector, including longer field licenses, steady tax rates and a cutback in export restrictions.
The reform was passed last week, making it possible for the companies to proceed with putting the partnership into action, Galuccio said at an engineering conference in Buenos Aires. He did not say when an announcement might be made.
YPF and Petronas will work on a $530 million project for developing the La Amarga Chica block in the southwestern province of Neuquen, Galuccio said.
The companies will target Vaca Muerta, a shale play thought to have similar potential to Eagle Ford in South Texas.
“Our first focus is Vaca Muerta,” Galuccio said, adding that two other plays, D-129 in the south and Agrio near Vaca Muerta, show potential.
In the first three years of the project, YPF and Petronas aim to develop a pilot for shale oil production on the 187 square km (72.2 square mile) block by drilling 30 wells, including horizontal and vertical. The aim is to launch pilot production in the first quarter of 2015, YPF has said.
After the first three years, the companies will move into factory development mode with an investment of more than $1 billion over five years, according to YPF.
YPF is already producing about 20,000 b/d of oil equivalent from Vaca Muerta in a partnership with Chevron, in which the companies plan to invest a total of $16 billion to put the Loma Campana block into full production.
Another partnership has been signed with Dow Chemical for the development of tight gas and talks are under way with ExxonMobil and Gazprom for potential partnerships.
4 November 2014
Century Casinos announces Joint Venture in Argentina
COLORADO SPRINGS, Colo., Nov. 4, 2014 /PRNewswire/ — Century Casinos, Inc. (NASDAQ Capital Market(R): CNTY) announced today that the company has acquired a 7.5% stake in Mendoza Central Entretenimientos S.A. (“MCE”) for USD 1 million and has secured a three-year option to increase its stake in MCE to 50% at a price equal to five times MCE’s EBITDA, minus MCE’s debt.
MCE has the exclusive long-term concession agreement with the Provincial Institute of Gaming and Casinos of the Province of Mendoza to lease slot machines and provide technical services to the Casino de Mendoza, which is owned by the Province of Mendoza. Currently, MCE has placed 600 slot machines at the Casino de Mendoza and, in return, receives 43% of the revenue generated by the slot machines.
Century’s partners in MCE are affiliates of Uno Medios, one of Argentina’s largest multimedia holding companies dedicated to Television, Radio, Graphic Design, Cable TV, Internet, Advertising and Digital Media. Uno Medios was founded in 1983, with the acquisition of Radio Nihuil Mendoza by the Vila family.
MCE’s goal is to grow in the land-based and on-line gaming industry in Argentina as well as throughout Latin America and for this reason has chosen Century Casinos as its strategic partner. Century and MCE have entered into a Consulting Services Agreement, under which Century will assist MCE in various matters, including but not limited to project assessment, compliance and operating procedures, staff training and to provide general casino management know-how. In return, Century will receive a fixed monthly consulting fee, plus a percentage of MCE’s EBITDA.
Argentina has an approximate population of 41 million, ca. 27.5 million internet users, a rapidly increasing broadband penetration and is one of the largest Spanish-speaking gaming markets in the world. Similar to the USA, there is no standardized set of gaming legislation at the national/federal level, but the Provinces have the authority to regulate and control gaming activities.
About Century Casinos, Inc.:
Century Casinos, Inc. is an international casino entertainment company that operates 30 casinos worldwide. The Company owns and operates Century Casino & Hotels in Cripple Creek and Central City, Colorado, and in Edmonton, Alberta, Canada and the Century Casino in Calgary, Alberta, Canada. The Company also operates casinos aboard 15 luxury cruise vessels (Regatta, Nautica, Insignia, Marina, Riviera, Mein Schiff 1, Mein Schiff 2, Mein Schiff 3, Wind Surf, Wind Star, Wind Spirit, Star Pride, Seven Seas Voyager, Seven Seas Mariner and Seven Seas Navigator) and the casino on the cruise ferry Nova Star. Through its Austrian subsidiary, Century Casinos Europe GmbH, the Company holds a 66.6% ownership interest in Casinos Poland Ltd, the owner and operator of nine casinos in Poland. The Company also manages the operations of the casino at the Radisson Aruba Resort, Casino & Spa in Aruba, Caribbean. The Company is currently developing a project in the north metropolitan area of Calgary, Alberta, Canada that will include a horse race track and other gaming, restaurant and entertainment facilities. Century Casinos, Inc. continues to pursue other international projects in various stages of development.
For more information about Century Casinos, visit our website at Century Casinos’ common stock trades on the NASDAQ Capital Market(R) under the symbol CNTY.
This release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of the management of Century Casinos based on information currently available to management. Such forward-looking statements include, but are not limited to, statements regarding future results of operations (including results for Casinos Poland, Ltd.), operating efficiencies, synergies and operational performance, development of and the prospects for the REC project, debt repayment and plans for our casinos and our Company. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2013. Century Casinos disclaims any obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.
By Jacqui Fatka
November 4, 2014
APHIS is extending the comment period for its proposed rule that would allow the importation of fresh (chilled or frozen) beef from northern Argentina, a region north of Patagonia South and Patagonia North B, under certain conditions.
“We are taking this step in order to give interested parties additional time to prepare and submit comments,” APHIS said. The agency said it will consider all comments received on or before December 29, 2014.
The rule has been opposed by many cattle groups as well as members of Congress because of the history of foot and mouth disease in the region and the potential for the disease to be transmitted to the U.S. and put U.S. livestock at risk.
Colin Woodall, vice president of government affairs at the National Cattlemen’s Beef Assn., said the comment extension is a “good sign” that USDA is listening to the concerns already expressed.
NCBA, normally an advocate for open trade, has opposed the rulemaking process on re-allowing importation of beef from Argentina, as well as Brazil, which USDA proposed a rule earlier this spring. However, Woodall explained this is not about trade or access, but about a lack of process of ascertaining what the real threat is to the U.S. industry.
USDA has been unwilling to share the reports of site visits in the region, and those documents that have been shared have been in Portugese or Spanish with no translation. NCBA has been confused on the methodology of the grounds for the rule.
Two congressional letters have already been sent requesting a General Accountability Office audit on USDA’s process, which Woodall said GAO is in the process of completing currently. The issue has caused enough concern from both sides of the aisle that Woodall expects USDA will have to slow down on this rule.
The last case of FMD in the U.S. originated in Argentina. “Without the integrity of a solid process, there is no way the cattle industry is going to support these rules,” Woodall said.
November 4, 2014
The American Soybean Association, the National Oilseed Processors Association and the North American Export Grain Association sent comments last week to the U.S. Trade Representative  identifying significant barriers to U.S. exports, particularly on the trade distorting impact of Argentine Differential Export Taxes, or DETs, and the artificial advantage provided to soybean products exported from that country.
Argentina’s system of DETs within the soy sector includes the highest tax rate for raw products like soybeans, lower rates for processed products like soybean meal and oil and the lowest rate for the most processed soy product, soy-based biodiesel. This creates economic incentive for processing the beans in Argentina and exporting the value-added products rather than the raw beans; therefore DETs have distorted the competitive balance among soybean processors globally and have enabled Argentina to become the world’s largest exporter of soybean meal and oil.
The groups stated in comments to USTR, that while U.S. exports of soybean products achieved another strong year in 2013, they could be significantly higher and reach a greater global market share, if the U.S. soybean industry did not have to compete with Argentina’s DETs.
“Robust exports of soybean and soybean products are critical to the prosperity and profitability of the entire U.S. soybean value chain (biotech companies, seed companies, transportation industries, soybean farmers, oilseed processors and exporters),” the comments state. “Expanded volumes of U.S. soybean exports (especially value-added products such as soybean meal, soy oil and soy biodiesel) translate to an increased number of high-quality U.S. jobs.”
The comments also included findings of a 2013 study by the LMC International Report prepared for the U.S. Soybean Export Council and United Soybean Board. According to the study, DETs affect the global balance of crushing capacity because countries can chose to import (or export) either soybeans or their products and as Argentina shifts its exports away from soybeans towards their products, due to the DET advantage, importers and other exporters are forced in the opposite direction.
“The DETs therefore assist crushers in Argentina to the disadvantage of crushers elsewhere. Over a long period they have encouraged additional investment in crushing capacity in Argentina and have tilted exports from the country away from beans towards their products,” the groups state. “By exporting more meal and oil than it would have done otherwise, Argentina has altered crushing decisions around the world.  This has affect Argentina’s competitors (primarily Brazil and the U.S.), as well as countries which import soybeans and their products. This is because such governmental incentives distort normal market signals and competition among crushers.”
The groups concluded by urging immediate action to eliminate Argentine’s use of DETs on soybeans and soybean products, which ASA believes are inconsistent with WTO obligations and since they’ve been left unchecked, continue to spread across other agriculture products to countries such as Russia, Ukraine, Malaysia, Indonesia and possibly Uruguay.
November 5, 2014
Buenos Aires, Argentina, Nov 5, 2014 / 12:03 am (CNA).- Pro-life organizations in Argentina are denouncing a proposal that would allow “free and legal abortion on demand,” for children as young as 14 years-old.
The proposal, being considered by the Committee on Penal Legislation of the Argentinean Congress, has drawn concern by numerous organization who see it as a radical measure.
Speaking to CNA on Nov. 3, Martin Patrito, the president of ArgentinosAlerta, said the proposed law “constitutes a true abdication of the State in its duty to protect the lives of persons.”
Patrito noted that just one month ago, the Argentinean House of Representatives enacted new laws that establish that “the existence of the human person begins with conception.”
“Now, however, many lawmakers are erasing with their elbows what they wrote with their hands. They want the Committee on Penal Legislation to consider a project that would deem abortion a ‘right’ and that could extend it even to the ninth week of pregnancy,” he explained.
“In the case of a troubled pregnancy, it seems the Argentinean state has nothing more to offer than its collaboration in the death of an unborn child. The unborn child is totally excluded while many talk on and on about ‘inclusive’ policies.”
“Pregnant women need help, not an abortion. Life itself has worth, it must not be at the mercy of the decision of some official,” he added.
Patrito urged Congress to maintain higher standards in its legislation, “so that no Argentinean is left out.”
Dr. Jorge Nicolas Lafferriere of the Center for Bioethics in Argentina said the proposed law would not only legalize abortion on demand, it would legalize the practice “up until the very moment of birth.”
“The measure seeks to turn abortion into a ‘right,’ under the expression ‘all women have a right to decide whether to voluntarily interrupt their pregnancies’,” he explained.
It would also limit conscience protection for health care workers who object to abortion, critics warned.
Dr. Lafferriere said no binding international treaty ratified by Argentina establishes a right to abortion.
“Abortion on demand entails the systematic elimination of handicapped children, especially if the law allows abortion in such cases even beyond the twelfth week.”
By Kathleen Peddicord
November 4, 2014
Buenos Aires is one of the world’s most beguiling places, best known worldwide for the tango, its most famous cultural export. It is a dance of passion, sensuality, longing and nostalgia that is an apt metaphor for this city where everything is approached, considered and conducted with passion.
Buenos Aires is also friendly, welcoming, open and accessible in a way that makes it easy, once you’ve experienced it, to say, “I could see myself living here.” This is a city that is both Latin American and European in culture and lifestyle. It’s a place that feels both comfortably familiar and different and exciting. The city boasts both green, sprawling parks and impressive world-class architecture. It’s a place where the new and the old worlds blend harmoniously.
Centuries-old grand dame Art Noveau apartment buildings dating back centuries with their original crown molding and iron-railed balconies coexist in this Paris of South America alongside shiny new skyscrapers, and it all works. The city is fast-paced and trendsetting in art, design and style, but, at the same time, the cobbler on the corner and the neighborhood tailor are working in the same locations where they have been for decades. Argentines themselves are much like their city. They have a deep respect and admiration for the past, yet they are always energetically innovating and looking forward.
Argentina, specifically Buenos Aires, is a destination that has welcomed immigrants and expats since the mid-1800s. Much of the population claims Italian or Spanish heritage or both. The connections are clear when you walk the streets of Buenos Aires. Everywhere are pasta and pizza shops, and Spanish is spoken with a noticeable Italian inflection. These traits are blended with cultures and traditions from all around the world, including afternoon tea time, popular English sports like polo and rugby and the French architecture in the Recoleta neighborhood.
At the same time, Argentina has its own distinct culture. The cow is elevated to almost holy heights in this country, and care and concern are taken as to how it is grown, fed and ultimately prepared. Red meat is a staple of the Argentine diet, and Argentines gather for “asados” with friends and family at least once a week.
One of the most important things for retirees in Buenos Aires to adjust to is this city’s schedule, which favors the nocturnal. The average workday starts at 9 or even 10 a.m. and goes until 6 p.m. Lunch is taken around 1 or 2 p.m., a snack around 5 p.m. and then dinner at 9 p.m. Many restaurants that serve lunch and dinner close at 4 p.m. and then reopen for dinner at 8 p.m., meaning you aren’t going to eat any earlier.
Keep in mind, too, that seasons are swapped here in the Southern Hemisphere, and Buenos Aires enjoys all four of them. Christmas is celebrated in the balmy days of summer, and summer can be hot, with temperatures in the 90s.
Buenos Aires can be an easy place to slide into as a foreign retiree. Much of the local population speaks English and is eager to practice with foreigners, as well as to show off their city. And it’s easy to connect with fellow foreign transplants. Many expat meeting groups are active in the city, and many online resources and forums are dedicated to helping expats and foreign retirees, including, for example, BA Expats.
The main appeal of retirement in Buenos Aires is the city itself. However, retirees here will find that their budget can stretch far. You can have a lavish steak dinner with wine, appetizers and accompaniments for less than $20, even at some of the nicest steakhouses in town. Still, the city is not the secretly cheap steal it once was. This is a world-class city on par with other cosmopolitan capitals around the world, and prices generally reflect that.
Furnished apartment rentals start at around $500 a month for a studio or one-bedroom. From there, the sky is the limit, because Buenos Aires is a place where a true luxury-level lifestyle is possible.
Argentina is not one of the world’s current bargain destinations, and establishing legal residency can be a challenge. So, Buenos Aires might best be considered as a part-time retirement choice. You could spend winter here (remember, the seasons are reversed), enjoying one of the world’s most intriguing and exciting lifestyles while the snow is falling up north, and spend the rest of the year somewhere more affordable and closer to home.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group.


5 noviembre, 2014
November 2, 2014
BUENOS AIRES, Argentina — Argentine authorities have accused household products giant Procter & Gamble of tax fraud and suspended its operations in the country.
The AFIP tax agency released a statement Sunday accusing the company of fraud related to imports from Brazil that it said were billed through a Swiss subsidiary for $138 million. The agency said the alleged operations were to get currency out of the country and hide taxable income.
There was no immediate comment from Procter & Gamble.
“Global companies can’t manage their profits tricking the state, evading taxes and moving currency out of the country because their irregular behaviors impede the development of the nation,” said AFIP head Ricardo Echegaray.
Argentina has been banished from the international capital markets since its 2002 default and suffered another sovereign default in July.
November 2, 2014
BUENOS AIRES, Argentina — Argentine President Cristina Fernandez has checked into a Buenos Aires hospital for treatment of an “infectious fever,” health officials said Sunday.
The presidential medical unit released a statement saying that the 61-year-old president entered the Sanatorio Otamendi clinic after feeling ill on Sunday afternoon.
The statement gave no details about the ailment besides describing it as an “infectious fever.”
In mid-October, doctors told the 61-year-old president to rest for 48 hours in order to recover from a sore throat.
In January, Fernandez was treated for hip pain and sciatica, and in July she missed Independence Day celebrations to continue recovering from an acute throat infection. Last year, she underwent head surgery to remove a blood clot. A 40-day period between December and January when Fernandez went silent from public comments caused concern over her condition.
November 3, 2014
Argentina has accused Procter & Gamble, the world’s number one household products maker, of tax fraud and said it has suspended the company’s operations in the South American country, according to a statement issued on Sunday by the AFIP tax authority.
It was unclear what the government meant by suspended, and the company declined to comment on whether its operations had been halted.
Argentina accused the company of over-billing $138m in imports to get money out of the country, according to the statement, which was published on Argentina’s presidential website.
“P&G funnelled currency abroad and hid income that was subject to tax in Argentina,” it said.
“We have to put an end to these tricks used by international companies,” the statement added.
Paul Fox, P&G spokesman, said the company is working to understand fully the allegations and resolve them.
“We don’t pursue aggressive tax/fiscal planning practices as they simply don’t produce sustainable results,” he said, adding the company values its relationship with Argentina and its consumers.
P&G has been operating in Argentina since 1991 and runs three manufacturing plants and two distribution centres.
In 2006, Cincinnati-based P&G bowed to pressure from the Argentine government and froze prices of 31 products including shampoos, soaps and cream for at least a year in an effort to help the government combat inflation.
The company, which does not break down revenue by country but does so by region, said in its 2014 annual report that Latin America contributed 10 per cent to overall company revenue. P&G reported net sales of $83.1bn in 2014.
Argentina has restrained access to foreign currency in a bid to retain central bank reserves, which have fallen 17 per cent over the past 12 months to about $28bn.
The country has been banished from the international capital markets since its 2002 default on about $100bn in bonds, compounded by another sovereign default in July.
By Benedict Mander in Buenos Aires and Jude Webber in Cancún
November 2, 2014
For an Argentine, Miguel Galuccio, the youthful chief executive of YPF, the country’s biggest oil and gas company, is remarkably upbeat.
Although the economy is sinking deeper into recession following a sovereign debt default in July, with falling oil prices further exacerbating the country’s troubles, Mr Galuccio is confident YPF will benefit from sweeping changes to Argentina’s energy sector.
He is trying to persuade foreign energy companies to collaborate with YPF to tap Argentina’s shale reserves, which rank as some of the largest in the world and are only just starting to come online.
Argentina is one of the first countries to commercially develop shale after the US, but it is struggling to secure foreign investment.
“Why do people go to Argentina? Because it’s cheap,” Mr Galuccio said in an interview with the Financial Times. “If you really think there is going to be a change in Argentina’s energy sector, it’s the right time to enter . . . And there is going to be change.”
Since the petroleum engineer took the helm at the company in May 2012 – soon after the Argentine government shocked investors by seizing a majority stake in YPF from Spain’s Repsol – he has overseen a dramatic turnround in its fortunes.
Mr Galuccio, who was a manager at oilfield services company Schlumberger, reversed a declining trend in oil and gas production at YPF last year, leading to a jump in profits.
This new and contentious incarnation of YPF has even earned rare praise from a foreign oil major. This year Chevron, the US energy group, became the first foreign company to commit to a significant investment to develop part of the vast Vaca Muerta shale formation in partnership with YPF.
Largest shale gas resources
Ali Moshiri, who runs Chevron’s upstream operations in Latin America and Africa, described YPF as “one of the best companies” that the US group has ever worked with. He highlighted how unusual it was for a group of Chevron’s size to allow a private company to have operational control over projects, as is the case at Vaca Muerta.
Debt markets have observed the changes at YPF with enthusiasm. While Argentine government borrowing costs have increased significantly since the July debt default, YPF’s bond yields have barely changed, underlining how investors regard the company as a safer prospect.
Meanwhile, YPF’s shares have tripled in value under Mr Galuccio’s watch, and although they have been more volatile this year because of Argentina’s economic problems, the stock could rise further if the government reaches a deal with its “holdout” creditors and puts an end to the debt default.
YPF has attracted major investors such as George Soros, whose Soros Fund Management doubled its stake in the Argentine company this year to become the fourth biggest holder of its American depositary receipts.
YPF operating profit
In spite of the steep fall in oil prices in recent months, Mr Galuccio hopes that reforms to a hydrocarbons law – which he played a key role in designing and promoting, and was approved by Argentina’s congress last week – will boost investment in Vaca Muerta.
“There are many things that affect investment, but this law is fundamental,” Mr Galuccio said of the hydrocarbons bill, which will extend drilling concessions and cut the minimum investment needed for companies to be exempt from certain import and capital controls.
The greatest beneficiary of the new law will be YPF. Crucially, groups already holding oil and gas concessions – of which about three-quarters are held by YPF – will be able to renew them automatically.
“What YPF wants – and what most politicians want – is to create the conditions for it to own most of the resources, and to use this to open up the sector in ways that benefit YPF, mostly by signing bilateral deals with other companies,” said Daniel Kerner, an analyst at Eurasia Group.
Although Argentina sits on top of the second-largest reserves of shale gas in the world after China, and the fourth-largest reserves of shale oil, so far they have attracted investments from a limited clutch of companies.
Some analysts doubt whether many companies will follow in the footsteps of the likes of Chevron until Argentina’s erratic president, Cristina Fernández, leaves power in December 2015.
“The law doesn’t resolve the underlying problem in Argentina’s energy sector,” said Daniel Montamat, a former president of YPF, who argued that before anything else Argentina’s dismal business climate must improve, with “the rules of the game” respected and an end to discretionary policy making. “A single law isn’t going to change that.”
3 November 2014
BUENOS AIRES–Argentine authorities have accused Procter & Gamble of tax fraud and suspended its operations in the country.
The AFIP tax agency released a statement Sunday accusing the company of fraud related to imports from Brazil that it said were billed through a Swiss subsidiary for $138 million. The agency said the alleged operations were to get currency out of the country and hide taxable income.
There was no immediate comment from Procter & Gamble.
“Global companies can’t manage their profits tricking the state, evading taxes and moving currency out of the country because their irregular behaviors impede the development of the nation,” said AFIP head Ricardo Echegaray.
Argentina has been banished from international capital markets since its 2002 default and suffered another sovereign default in July.
By Jonathan Gilbert
2 November 2014
BUENOS AIRES — A judge in Argentina has ordered the arrest of 20 former Spanish officials accused of torturing dissidents during the dictatorship of Francisco Franco, from 1939 to 1975, renewing efforts to pursue cases of human rights abuses beyond the country’s borders.
The judge, María Romilda Servini de Cubría, said in her ruling late Friday night that she was invoking the principle of universal jurisdiction for human rights issues against the Spaniards, who include the former cabinet ministers José Utrera Molina, 88, and Rodolfo Martín Villa, 80.
The principle permits courts to investigate accusations of human rights abuses in foreign countries.
A Spanish judge, Baltasar Garzón, used the principle to indict an Argentine Navy captain who is now serving a prison sentence in Spain after he was convicted of human rights abuses in 2005. In the 1990s, Judge Garzón also tried to prosecute Augusto Pinochet, the former Chilean dictator.
Judge Servini de Cubría is seeking the former officials’ extradition to Argentina so she can question them about accusations of human rights abuses. Spaniards who claim they were victims of torture are seeking justice here because they were blocked by a 1977 amnesty law passed in Spain as a way to smooth the country’s return to democracy. They filed a lawsuit in Buenos Aires in 2010.
A decade ago, Argentina overturned similar amnesty laws that protected military officials who oversaw a ”dirty war” against guerrillas and people associated with leftist ideology during the country’s 1976-83 dictatorship. About 30,000 people were kidnapped and murdered.
Judges here subsequently moved to prosecute officials accused of human rights violations, even expediting some cases, and there have been more than 400 convictions. The trials are continuing.
Human rights organizations have also been able to locate people who were born in the military’s torture centers, then taken from their mothers and reared by the families of government and military officials.
An association in Spain that has pushed the plaintiffs’ case said Judge Servini de Cubría’s ruling represented ”significant progress” in their fight for justice. ”We celebrate Argentina’s justice system acting on behalf of the victims of the Franco dictatorship,” it said in a statement.
Judge Servini de Cubría has been working on the case since 2010, and she traveled to Spain in June to gather evidence and testimony from some of the roughly 150 plaintiffs.
She issued her first arrest warrants against a handful of Spanish former police officials last year. But two of the men are dead, and the courts in Spain refused to extradite the other two.
Mr. Utrera Molina, who was a housing minister under Franco and then secretary general of his party in 1974 and 1975, is accused of signing the death sentence of Salvador Puig Antich, an anarchist who was executed in 1974 with a garrote.
Mr. Martín Villa, who was labor minister between 1975 and 1976, is accused of being responsible for the police repression of a workers’ protest in March 1976, which led to the deaths of five people.
Victims and their families came here last year, holding meetings with politicians and giving evidence to Judge Servini de Cubría.
After pleading with her to investigate the role of Mr. Utrera Molina in her brother’s death, Merçona Puig Antich said: ”I’ve asked her for justice so that we can talk about these things in our country and close this chapter in a healthy way, because right now that’s not the case.”
By C. M. Rubin
November 2, 2014
I’m on a quest to find the most inspiring school turnaround success stories from around the world.
From Argentina this morning, I am delighted to welcome once again to The Global Search for Education Dr. Silvina Gvirtz (Executive Director of Conectar Igualdad, Researcher at the National Scientific and Technological Research Council (Conicet), and Professor at the University of San Martín). She will share with us case studies from the Principals of schools located in Buenos Aires (School No. 20 of Campana and School No. 5 of Ensenada), Tucuman (Ignacio Colombres School), and Santa Cruz (School No. 77 of Las Heras). These examples demonstrate some of the realities leaders have to deal with at the school level that often go beyond an education plan on paper.
Silvina, what is your simplest definition of a good school?
A good school is one that all the students can access without discrimination. It’s an institution where all students graduate without dropout or retention. It’s a place where they learn meaningful content and where they enjoy learning. It’s a place that allows them to keep studying at the next level. To recognize a good school, you should check four significant dimensions: internal efficiency (dropout rates, retention rates, graduation rates); academic achievements (measured with different tools); organizational climate; and necessary conditions (infrastructure, didactic resources, etc.)
For these items, the principal, along with all the members of the team, should be real leaders and be able to build a diagnosis and set out goals and actions for improvement.
Can you walk me through some specific examples of the problems faced by poorer schools in Argentina?
Yes. One problem is the avoidance of teaching Science. At School No. 20 of Campana (Buenos Aries), principals found that lessons were given once per month, when they are supposed to be given twice per week in the first cycle and three times in the second. They found enough good intentions, but skills to improve classes with sciences were missing. So they enacted a training program for the teachers that led to fundamentally reshaping the classroom experience. They also added other topics such as electricity and sound, and brought trial and error exercises into classes, methods much more enriching than the ones proposed in manuals. The student experience shifted and grew brighter and more impassioned.
The direct contact with actual physical phenomena was the key to developing topics in more depth. One of the best experiences happened with fourth grade students, when we asked them how sound was produced. When they knew the answer was through vibration, they started to experience what happened with objects that surrounded them. In the process, new questions began to arise, such as “what materials does sound travel through best?”
Insightful. Hands on experience with the sciences made a big difference, along with re-education of the teachers.
Correct. Another major problem schools face is absent students. It can be hard to know how much to interfere with this problem, as it can be a domestic one. At School No. 5 of Ensenada (Buenos Aries), we had an absentee rate of over 20%. Principal Patricia Veléz noticed that some kids refused to attend school, and that parents didn’t put much effort into it. Most of the kids belonged to families of low income. Teachers talked with the parents. Then the staff implemented a new procedure: “If students are absent for three days and parents don’t notify us, someone from the office will go to the student’s home. If the case persists, the school will appeal to the judicial system. Now families know that they won´t receive their Universal Childhood Entitlement (poverty relief assistance) if their kids don´t attend school.”
The school also offered extra support prior to daily classes in order to promote attendance and learning. A year later, absenteeism was down to 3 percent.
Another school with high absentee rates, Ignacio Colombres School (Tucumán), used a similar tactic to turn things around. Principal Mónica Romano saw her school as a place where neither students nor teachers were attending. 25% of teachers had at least 10 absent days per month.
“We saw the opportunity to reduce absenteeism by making sure every teacher knew the importance of continuity. When they understood they were harming the future of our kids, and they felt heard, they started to come every day.” After this, absentee rates dropped to 0%.
But the problem with students was far more complicated. “Some students didn’t have any shoes to go to school in. It was then we realized that we had to give students in school what they lacked at home. If the student was absent for more than 2 days, we went to his or her house to see what was going on. Their parents understood that their kids had to go to school; the only way for them to have a future was to have an education. And for that to happen, we turned our school in the school of abundance where opportunities begin to be possible.”
Following up on the absent child’s home life seems to have made a significant difference.
Yes. Another big problem is high levels of retention. Elizabeth Urra, at No. 77 School (Las Heras, Santa Cruz), identified a cause: “30% of our students were retaking the same year. We realized we were only paying attention to the students that had no problem with their subjects, and forgetting about the students that needed us most. That created 2 problems: high levels of retention and over-age students. That was when we started working with the real school we had and not only one part. We implemented better pedagogically designed classes and extra homework for kids that were doing badly. The students started to do better in every subject. We even had a teen mom that came back to finish school.”
C. M. Rubin is the author of two widely read online series for which she received a 2011 Upton Sinclair award, “The Global Search for Education” and “How Will We Read?” She is also the author of three bestselling books, including The Real Alice in Wonderland, is the publisher of CMRubinWorld, and is a Disruptor Foundation Fellow.
By Andrew Willis
Nov 2, 2014
Argentina’s tax agency says Procter & Gamble Co. exaggerated imports as a mechanism to send money out of the country and reduce tax payments.
The accusations relate to imports of razors and other toiletries from Brazil that were billed for $138 million via a subsidiary in Switzerland, the agency known as AFIP said today in a statement.
“Our main objective is that P&G pay back to the Central Bank the foreign currency that was sent out,” tax agency head Ricardo Echegaray said in the statement. “And that it pays the customs’ fines and the avoided taxes.”
A spokesman for Cincinnati-based P&G didn’t immediately respond to a voice message left outside normal working hours.
The agency is seeking a foreign travel ban on local company executives, and has suspended P&G’s Tax Identification Code as a preventative measure, according to the statement.
By Charlie Devereux
Nov 1, 2014
Argentina received bids totaling $2.23 billion in an auction of 4G mobile-phone airwaves, a move that will double the country’s capacity for wireless calls and Internet access while boosting dwindling foreign reserves.
The local units of Telefonica SA (TEF), Telecom Argentina SA and America Movil SAB (AMXL), which each hold about a third of the nation’s mobile-phone market, all vied yesterday for a share of two 4G frequency bands and for 22 percent of already-existing 3G spectrum. They’ll compete against a new fourth operator, Arlink SA, a unit of media conglomerate Grupo Uno, owned by Daniel Vila and Jose Luis Manzano. The starting bid for 10 segments of the spectrum was $1.97 billion, the Communication Secretary’s office said in an e-mailed statement.
The winning bids will be announced in mid-November, the government has said.
By Camila Russo
Oct 31, 2014
Argentina’s economy is set to contract again next year as a widening deficit, rampant inflation and a default weigh on growth, Fitch Ratings said.
Argentina’s economy is set to contract 1.9 percent this year and 2.6 percent in 2015 if the South American nation “fails to clear the default before presidential elections are held in October next year,” Santiago Mosquera, Fitch Latin America director, wrote today in a report. Gross domestic product may expand beginning in 2016 if the next administration fixes the default and implements more pragmatic economic policies, Mosquera wrote.
Argentina yesterday missed its second foreign debt interest payment since July, prompting Fitch to downgrade the so-called par bonds due 2038 to default. President Cristina Fernandez de Kirchner’s government is embroiled in a legal dispute with U.S.- based hedge funds who have won court rulings to block debt payments until they’re paid in full for defaulted bonds they hold from 2001. The conflict is preventing the nation from obtaining financing abroad as reserves fall and annual inflation accelerates to about 40 percent.
While the economy may grow in 2016, “growth would not pick up until 2017, as the unwinding of distortions created over the past few years will likely prove to be challenging,” according to the report.
Fitch Ratings estimates international reserves will dip below $18 billion next year, when the government faces over $12 billion of foreign currency debt payments.
“Argentina’s external position is expected to continue to weaken in light of lower soy prices, contained sales of soy exports, strong demand for FX by local economic agents, limited capital inflows and a demanding external debt servicing calendar,” the report said.
‘Apocalyptic Picture’
Fernandez said in a speech last night that while growth has slowed, the opposition and media exaggerate the economic ills in Argentina.
“A lot of times different sectors of society want to paint an apocalyptic picture, as if we were in a terminal crisis,” Fernandez said. The nation has posted a $6 billion trade surplus year-to-date and is maintaining employment levels, she said.
Argentina’s 2015 budget foresees 2.8 percent growth. The International Monetary Fund forecasts a contraction of 1.5 percent.
Fitch said the chances of Fernandez resolving the default before leaving office at the end of next year are “far from assured,” meaning the business community and opposition are looking beyond the October 2015 presidential elections.
“This is very important, not only because it’s been guaranteed that a fair price was paid for a natural, limited and, in some cases, scarce resource such as the spectrum but also because the investments the companies will have to make in infrastructure are about $2 billion, which will contribute to foreign currency sustainability in the future,” the Communications Secretary’s office said in the statement.
The government’s insistence that the participation fee be paid in dollars prompted Grupo Clarin SA (GCLA)’s Cablevision unit to drop out of the auction, arguing that it can’t get access to dollars amid currency restrictions imposed by the government three years ago. Locked out of global capital markets due to litigation with holdout creditors, the nation has depended on its shrinking reserves to service performing debt and import energy. Inflows of $2 billion would represent about 7 percent of current reserve levels.
No Pesos
“The state wants to bolster its foreign reserves,” Enrique Carrier, director of Buenos Aires-based telecommunications research firm Carrier y Asociados, said by telephone. “The operators wanted to pay in pesos at the official exchange rate and the government told them to bring dollars from abroad.”
In a document released by the communications secretary, Claro, America Movil’s local unit, said that the central bank doesn’t permit purchases of foreign currency to pay for the auction’s license fee and asked if it could be paid in pesos instead. The communications secretary said the operator should refer to Article 30 of the auction document, which says that “the bidding currency will be U.S. dollars.”
Argentina, South America’s second-largest economy, has been slow to develop 4G technology, Carrier said. Apart from the impoverished region north of Brazil known as the Guianas, the rest of South America has already begun to develop 4G, he said. The technology offers faster speeds capable of handling streaming video.
The Argentine government has given companies a five-year deadline to install the new technology in 98 percent of the country.
1 November 2014
BUENOS AIRES, Nov 1 (Reuters) – An Argentine judge has requested that Spain arrest and extradite 20 former Spanish officials, including two ex-government ministers, suspected of human rights violations in the era of dictator Francisco Franco.
Federal judge Maria Servini de Cubria, who is investigating allegations of torture and other crimes committed in Spain during the Franco era, issued the request on Friday.
Among the 20 are former ministers Jose Utrera Molina, 86, and Rodolfo Martín Villa, 79, who face allegations of attempted homicide from 1974 and 1976, respectively.
Franco ruled Spain from 1939 to his death in 1975, after which it took some years to establish a functioning democracy.
Franco-era officials cannot be prosecuted in Spain because of an amnesty enacted when the country returned to democracy in the late 1970s. Families of alleged victims turned for help to Argentina, which has an extradition treaty with Spain.
They are using the concept of universal jurisdiction, the idea that crimes such as torture are so serious they can be prosecuted across borders. Using this concept, Spain briefly detained Chile’s former dictator Augusto Pinochet in 1998.
There was no immediate official reaction in Spain to the extradition request, but past form suggests that the process will be slow.

In April, seven months after an extradition request from Argentina, Spain’s High Court declined to extradite to Argentina a former policeman accused of torturing prisoners during the Franco years.


The court said the statute of limitations had run out on the accusations against Antonio Gonzalez Pacheco, who had denied torturing prisoners.


31 octubre, 2014
1.    EDITORIAL: OBAMA’S NOT TO BLAME (The Washington Times)
31 October 2014
Argentina blames ‘eagles of empires’ (read America) for its economic woes
President Obama is usually blamed for everything bad that happens to the economy. It’s why his approval rating is in the tank. It goes with the territory. He’s rightly blamed for stifling growth with new taxes and regulations, but only in the United States. It’s a bit nutty to think Mr. Obama has time to torpedo the economies of other nations.
But Cristina Fernandez de Kirchner, the president of Argentina, blames “vultures [that] look a lot like the eagles of empires” for a New York judge’s order that Argentina must pay its debts to Americans. Mrs. Kirchner wants everyone to think that the judge’s decision was carefully coordinated by the White House. She obviously doesn’t understand that nothing is carefully coordinated, much less coherent, about this administration’s dealings overseas.
She apparently expects CIA hit squads, SEAL Team 6, or maybe Sam the Slicer from Cleveland, to show up any day to execute the contract on her. “If something was to happen to me,” she said in a televised speech, “nobody should be looking to the Middle East, but to the North.”
Argentina’s troubles are the inevitable poison fruit of decades of leftist control. Confiscatory taxes, trade barriers, corruption and a political climate that vilifies the producing class have expanded on Mrs. Kirchner’s watch. Recently her administration shut down the Buenos Aires printing plant of the Chicago-based RR Donnelley & Sons, accusing the firm of economic terrorism because it remains profitable.
Mrs. Kirchner raised her war on capitalism a notch last month by pushing through a new “supply law” that forbids companies from reaping “artificial or unfair profits.” The measure gives state bureaucrats the authority to dictate prices, set quantities of goods sold and even establishes profit margins for just about anything produced and sold. A business making a profit risks being fined.
Peugeot became the law’s first victim. The French automaker was fined for failing to deliver enough cars on time to satisfy Mrs. Kirchner’s automobile-subsidy program, her version of “cash for clunkers,” where a list of cars, including nine from Peugeot, are offered at a government-fixed price with government-backed financing.
For nearly a century, Argentina has deliberately devalued its currency to boost export numbers and bring in foreign cash to pay debts. The inevitable side effect of this policy has been runaway inflation — in the 30 percent range. Money in a savings account diminishes by the hour. Bewildered entrepreneurs can’t take long-term risks because they can’t calculate what their investment will be worth a few months in the future.
Mrs. Kirchner blames inflation on corporate greed, spinning the economic troubles as an excuse for more regulation and intervention in the market for “consumer protection.” The predictable result of setting prices below the market level is shortages. Companies won’t produce items they’re not allowed to sell for a profit. Earlier this year, McDonald’s couldn’t serve Big Macs with ketchup because there was a ketchup shortage.
Argentina has yet to go the way of Venezuela, which assigned the army to run the toilet-paper factories, but it’s looking for the way. Argentina has run its economy into the ground without help from Mr. Obama. Mrs. Kirchner knows how to do it herself.
By Ken Parks
30 October 2014
Argentina Taps Line as Reserves Quickly Approach Multi-Year Low
BUENOS AIRES—Argentina’s central bank tapped a currency swap line with its Chinese counterpart for the first time Thursday, requesting the equivalent of about $814 million at a time when its hard currency reserves are under pressure.
Argentina and China agreed to the 70 billion yuan currency swap during a state visit by Chinese President Xi Jinping in July. Argentine officials say the agreement will make it easier for Chinese companies to invest in Argentina and strengthen the central bank’s depleted reserves.
“Under this agreement, the central bank could request additional currency exchanges equivalent to a maximum of $11 billion,” the bank said in a statement Thursday.
The three-year currency swap allows the two central banks to lend as much as 70 billion yuan and the equivalent in Argentine pesos to each other for up to 12 months. China is Argentina’s No. 2 trade partner after neighboring Brazil.
The yuan can be exchanged for dollars or euros in international financial centers such as Hong Kong, London or Singapore, the central bank said.
President Cristina Kirchner needs all the hard currency she can get her hands on to avoid a major devaluation before she steps down at the end of her second term in December 2015.
The central bank’s reserves are fast approaching a multiyear low at $27.4 billion due to fuel imports, debt payments and capital flight, while dollar inflows have waned due to a drop in soy prices and low foreign investment.
Unable to raise dollars by selling bonds abroad due to a legal dispute with creditors, the Kirchner administration is more dependent than ever on trade for hard currency. Earlier this month, the government struck a deal with exporters that will see them ship $5.7 billion in soy and grains in exchange for authorization to export wheat and flour.
The lack of dollars has aggravated Argentina’s deepest recession since the 2001-02 economic crisis as the government cuts imports to save hard currency. At the same time, Mrs. Kirchner’s reliance on the printing of money to finance spending has spawned one of the highest inflation rates in the world, which some economists put as high as 40%.
Analysts expect the economy will contract 2.2% in 2014 and shrink 1.7% next year, according to a recent survey by FocusEconomics. The 2015 federal budget forecasts 0.5% growth this year.
By Camila Russo
Oct 30, 2014
Argentina’s Central Bank reserves are set to rise after receiving the first installment of yuan as part of a three-year, $11 billion currency swap agreement with the People’s Bank of China.
The central bank received the equivalent of $814 million in yuan today and sent the same amount in Argentine pesos, according to an e-mailed statement. Any funds disbursed must be returned within 12 months, according to the agreement that was signed between the two nations in July.
Argentina, locked out of international credit markets since 2001, has restricted imports since defaulting on July 30 in a bid to preserve central bank reserves which have fallen 10.5 percent this year to $27.4 billion. President Cristina Fernandez de Kirchner’s government struck a deal with grain exporters to allow more wheat and corn shipments in return for a pledge of $5.7 billion of grain sales by year-end that will also go into reserves.
“The BCRA can request additional funds for a maximum of $11 billion, which acts as support to implement its financial, exchange and monetary policies,” the bank said in the statement.
In July, the central bank said the agreement will “promote economic development and trade between the two countries,” while strengthening reserves.
Central Bank President Alejandro Vanoli said reserves will end the year higher and the current level isn’t a concern, according to an interview with Radio Del Plata.
“It’s a boost to reserves,” Jose Luis Espert, who runs research firm Espert & Asociados, said in a telephone interview. “But the impact will only be temporary.”
October 30, 2014
BUENOS AIRES, Argentina — Argentina’s Congress has passed an energy law aimed at luring foreign investment into its promising shale oil and gas.
The measure approved by the lower house Thursday cuts the minimum investment needed for energy companies to be exempt from import controls. It also sets new terms for concessions to 25 years for conventional energy and 35 years for shale.
Argentina has one of the world’s largest deposits of shale oil and gas, but only a few companies have made commitments to develop the fields because many fear the government’s interventionist energy policies.
Current concessions will not be affected. They include a deal by state-controlled YPF energy company with oil giant Chevron, which has committed to investing more than $1 billion in the Vaca Muerta deposit in Neuquen province.
By Ken Parks
30 October 2014
BUENOS AIRES–Argentine lawmakers approved a sweeping overhaul to the hydrocarbon law on Thursday to boost investment in Argentina’s vast shale oil and gas deposits in hopes of weaning the country off expensive energy imports.
President Cristina Kirchner’s allies in the Lower House approved the bill after almost 15 hours of debate, with 130 votes in favor, 116 against and one abstention. The bill, which has already cleared the Senate, now awaits Mrs. Kirchner’s signature.
The Kirchner administration and state-controlled YPF SA, Argentina’s largest oil company, lobbied hard for the controversial bill, which sets nationwide rules for royalties and concessions to provide greater certainty for investors. Until now, the provinces have largely set their own rules.
The governors of oil producing provinces initially opposed ceding power to the federal government when Mrs. Kirchner floated the bill in June, but months of backroom arm twisting and horse trading eventually bore fruit.
“I don’t see a game changer in this law unfortunately,” says Daniel Gerold, director at G&G Energy Consultants, who sees the law benefiting incumbents like YPF. “It doesn’t provide any incentives for new companies, and I believe new companies are needed.”
YPF’s shares traded in New York rose 1.1% to $32.12 on Thursday morning.
Mrs. Kirchner and YPF Chief Executive Miguel Galuccio are seeking billions of dollars in foreign investment to develop Argentina’s massive shale gas and oil deposits, mostly located in Neuquén Province.
Argentina ranks second in the world, behind China, in potentially recoverable shale-gas reserves, with 802 trillion cubic feet, according to the U.S. Energy Information Administration. Argentina is also No. 4 in shale oil with an estimated 27 billion barrels.
Analysts say the development of those shale deposits could propel Argentina back into the ranks of energy exporting nations. For years, price caps and red tape deterred investment and turned the country into a net oil and gas importer in 2011. Argentina ran an energy deficit–the difference between its energy imports and exports of more than $5 billion in the first nine months of the year. That deficit has been a big drag on the country’s depleted hard currency reserves, which stand at $27.4 billion.
No one is expecting a quick turnaround in Argentina’s energy fortunes, with Mrs. Kirchner saying in April that energy independence was five years away. Full development of the Vaca Muerta shale formation alone requires between $100 billion and $200 billion, she said.
Investors are placing small bets on Argentine shale energy as memories of Mrs. Kirchner’s acrimonious expropriation of a 51% stake in YPF from a Spanish oil company in 2012 start to fade.
In August, YPF and Malaysia’s Petroliam Nasional Bhd. agreed to invest up to $550 million in Vaca Muerta. YPF and Chevron Corp. have already invested $2 billion to develop shale oil and gas fields under an agreement signed last year.
The government hopes the new oil and gas law will attract more investment. Among the benefits to oil companies, the law caps provincial royalties at 18%, lowers investment requirements to qualify for tax breaks on crude exports, and provides for a unified concession auction process.
The law also differentiates between conventional, unconventional and offshore oil and gas fields. Companies investing in capital intensive unconventional energy projects like shale oil will receive 35-year concessions, compared with 25 years for conventional oil fields.
Argentina needs to fix its wobbly economy if it wants to attract more oil and gas investment, said opposition lawmaker Sergio Massa, who recent polls show as a top contender in next year’s presidential election.
“As long as we have 40% inflation, currency controls… there isn’t much chance of new investment,” he told reporters Wednesday night.
By Hugh Bronstein
30 October 2014
BUENOS AIRES, Oct 30 (Reuters) – Argentina has a new energy investment framework aimed at attracting foreign oil companies to the country’s vast shale deposits after Congress gave final approval on Thursday to reform measures.
Geologists say Argentina has more natural gas trapped in shale rock than all of Europe, a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.
The package of new laws, passed by a 130 to 116 vote in the lower house, cuts the minimum investment needed for companies to be exempt from import controls to $250 million from $1 billion.
The same level of investment would also allow oil and gas producers to get around foreign exchange controls by holding on to the hard currency earned from 20 percent of their exports.
Argentina’s main shale formation, called Vaca Muerta (Dead Cow), is in the southern Patagonia region.
International companies would love to get their hands on the formation, but many are scarred off by the troubled relationship that President Cristina Fernandez has had with investors.
Her government has nationalized private companies including Argentina’s main energy firm YPF and imposed tough foreign exchange and trade controls that along with inflation clocked at about 40 percent have hammered business confidence.
On top of this, Argentina defaulted on its sovereign bonds in July.
So it was not evident that the regulatory changes will by themselves lead to the investments needed to close Argentina’s energy deficit, estimated at $7 billion this year.
The reform lengthens drilling contracts by a decade to 35 years for shale and 25 years for conventional energy. Companies can win 10-year extensions if they fulfill investment promises.
With each extension, provinces can now increase an initial 12 percent royalty cap to 15 percent, and then up to a limit of 18 percent. Before, provinces negotiated royalties with oil companies on a case-by-case basis with no caps mandated by law.
Opposition lawmakers accused the government of rushing the law through and handing strategic resources to foreign firms.
“They are ratifying the concept of hydrocarbons as a commodity and not as a strategic resource and a common good,” said leftist opposition legislator Claudio Lozano. “The possibility of an export track is suicide for Argentina.”
Developing Vaca Muerta and securing energy independence will cost up to $200 billion in the next 10 years, YPF says.
Argentina has a scant $27 billion in foreign reserves, leaving the government to rely on foreign oil firms to lead the investment drive.
Chevron Corp, Petronas, Royal Dutch Shell and Total have dipped their toes in but their initial investments fall short of putting Argentina on the path to energy independence.
So far Vaca Muerta represents only a small part of Argentina’s total energy production: about 4 percent of oil and 1.3 percent of gas output, according to private estimates.
By Dimitra DeFotis
30 October 2014
Argentina lawmakers voted in energy legislation that could help the country boost its oil and gas production over the next two decades.
It took months of negotiations between the government, provincial governors and other interests to agree on distributing revenue from the country’s oil and gas deposits. The legislation now requires the signature of President Cristina Fernandez de Kirchner.
Argentina’s debt default drama and infighting on central bank controls has obfuscated some well-known facts: Argentina is No. 3, worldwide, in shale-gas reserves, and No. 4 in shale oil, according to the U.S. Energy Information Administration. Yet Argentina’s refining capacity is limited and it imports energy products, according to the EIA. The bill would allow Argentina to boost crude oil production to 1.8 million barrels per day by 2035 from about 550,000, and natural gas output could more than triple, according to an Accenture report quoted by Bloomberg.
Shares of oil-and-gas producer YPF ( YPF) rose 2.5% Thursday. The Global X MSCI Argentina ETF ( ARGT) was up 2%. Oil majors Total ( TOT) and
Chevron ( CVX) have invested in Argentina, and   ExxonMobil ( XOM) has talked with YPF about energy exploration opportunities in Argentina.
Companies are lukewarm to the legislation, says Nicholas Watson at Teneo Intelligence, given Argentina’s economic malaise, currency controls and soaring inflation — 40% by some estimates. According to Bloomberg, the new parameters:
   — allow companies that invest $250 million over three years to sell 20
      percent of production in international markets without paying export
   — allow 35-year concessions to shale and offshore fields.
    — cap royalties at 12 percent plus 3 percent in provincial net income
   — create a federal auction system, replacing one that varies by province.
Watson writes:
“The most positive take-away from the reform is greater regulatory consistency. While provinces set their own royalties and terms for concessions, the new system establishes a country-wide 12% cap on royalties (rising to up to 18% on concession extensions), and introduces a national auction system. In addition, the reform eliminates the carried interest regime by which provincial oil and gas companies have held minority stakes in concessions without having to make up-front investments. And for companies, the new law extends license timeframes, lowers the bar at which point exemptions on export taxes take effect from $1 billion to $250 million, and loosens currency controls by permitting companies to retain hard currency earned from 20% of their exports.
Buenos Aires provincial governor Daniel Scioli’s chief economic advisor last week said that it would take four years to bring inflation down to single digits … devaluation expectations will cause companies to delay investments. Barring a deal with holdout creditors early next year and/or pragmatic moves to correct economic distortions, confidence is likely to remain muted until after Fernandez leaves office in December 2015.
While this author’s most recent Barron’s column, ” Too Early to Fall for Argentina,” was skeptical on Argentina equities for individual investors because publicly-traded options are illiquid, we noted that hedge funds have been betting on YPF. Colleague Andrew Bary said in December 2013 that undervalued YPF shares could triple; the U.S.-traded shares are down 1% year to date.
Charles Newbery
30 October 2014
Buenos Aires (Platts)–30Oct2014/405 pm EDT/2005 GMT   Argentina’s biggest shale play, Vaca Muerta, has potential to more than triple the country’s oil and natural gas production over the next 20 years, but a continued decline in global crude prices could pose a challenge for attracting the investment to make this happen, analysts said Thursday.
Management consultancy Accenture said that if Vaca Muerta is put into development, national oil production could surpass 1.8 million b/d in 2035, up from 550,000 b/d this year.
Over the same period, gas output could go above 317 million cubic meters/d compared with 114 million cu m/d this year, Accenture said in an emailed statement.
Vaca Muerta, in the southwest of the country, is gaining attention for its geological comparisons to the prolific Eagle Ford shale play in the US.
Argentina’s state-run YPF was the first to start producing from Vaca Muerta, in a partnership with Chevron, and output now averages 20,000 b/d of oil equivalent.
BP-backed Pan American Energy, ExxonMobil, Shell, Total, Wintershall and other companies are testing the play for pilot production projects, and Malaysia’s state-owned Petronas is poised to start a pilot with YPF. Russia’s Gazprom is eyeing opportunities.
If the projects come about, Accenture expects that Argentina could reach self-sufficiency in oil around 2020-2025 and for gas by then or soon after.
The expected production would allow Argentina to export surplus supplies, with gas likely going to neighboring countries, Accenture said.
The forecast comes after Argentina’s Congress approved a reform of the oil sector to help attract fresh investment after a decade of dwindling production.
The reform provides longer field licenses and incentives to help make it easier for companies to develop shale as well as conventional and offshore resources.
A challenge, however, is the direction of global oil prices, Ecolatina, an economic consultancy in Buenos Aires, said in a statement.
West Texas Intermediate, the international reference price followed in Argentina, has dropped 24% to about $81/b from around $107/b in June on growth in US production coupled with falling demand in China, Europe, India and Japan, and concerns about supply disruptions stemming from violence in the Middle East.
The price decline could stymie the development of Vaca Muerta by discouraging investment, Ecolatina warned.
Indeed, Ecolatina said that based on YPF’s calculations, WTI must be between $80 and $100/b for Vaca Muerta projects to be viable.
The government last week stepped in to try to encourage Vaca Muerta projects despite the price decline by cutting export taxes if prices decline further.
The Economy Ministry said the withholding tax on exports of oil and derivatives would fall to 13% if WTI drops below $80/b; to 11.5% if it goes below $75/b; and to 10% if it falls to less than $70/b. Since 2007, the tax had been at a fixed 45% on exports if WTI was less than $60.9/b and an increasingly greater rate when above that.
By Katia Porzecanski and Camila Russo
Oct 30, 2014
Three months after Argentina’s bond default, a hedge fund is in talks to form a group that will demand immediate repayment. The move threatens to deepen the standoff between the nation and its creditors, according to Voya Investment Management LLC and Emso Partners Ltd.
New York-based Owl Creek Asset Management LP, which oversees $3.9 billion in assets, is discussing with investors and law firm Kirkland & Ellis LLP the possibility of organizing bondholders to speed up repayment of notes due 2038, four people familiar with the talks said. Owl Creek, which started its Argentina Recovery Fund last month, said in a presentation that accelerating the so-called par bonds may generate gross returns of 100 percent in a restructuring.
With Argentina mired in its second default in 13 years as it refuses to comply with a U.S. court order requiring creditors from its 2001 financial crisis be paid, Owl Creek’s efforts may lead to more protracted legal battles, said Jean-Dominique Butikofer, head of emerging markets at Voya. A bondholder group would need to hold at least 25 percent of the $5.4 billion of dollar-denominated debt to accelerate after today, when a grace period on the securities expires, the bond contracts show.
“It makes the entire situation more difficult,” Butikofer said by phone from Atlanta. “I understand the mechanics and the reason why they’d want to accelerate the par bonds, but I wonder how will Argentina react if they are being dragged into another legal fight and is it worth the time and attorney costs?”
‘Settlement Negotiations’
In an August presentation obtained by Bloomberg News, Owl Creek said that a restructuring could take place as soon as January, when Argentina may negotiate with the unpaid creditors from its 2001 default. Until those creditors, known as holdouts, are paid, the court order blocks any payments on the nation’s overseas debt.
The par bonds, which traded at 54.6 cents yesterday, “have the right to accelerate and have their principal immediately payable in full,” Owl Creek said in the presentation. “This would lead to a seat in settlement negotiations in January, likely resulting in an exchange into new bonds which trade closer to par.”
Patrick Clifford, a spokesman for Owl Creek, declined to comment. Kate Slaasted, a spokeswoman for Kirkland & Ellis, didn’t return two phone calls seeking comment. Jesica Rey, an Argentine Economy Ministry spokeswoman, declined to comment on the risk of acceleration.
Court Order
Cabinet Chief Jorge Capitanich told reporters today that rather than accelerate, bondholders should seek legal action against the U.S. judge that ruled in favor of the holdouts and blocked debt payments.
Argentine officials have said they can’t negotiate with creditors led by Elliott Management Corp. who rejected debt restructurings in 2005 and 2010 until a key bond clause expires at the end of 2014. While Argentina deposited $161 million into a local bank last month to pay interest on the par bonds, the court order prevents bondholders from getting their money until the dispute with Elliott is resolved.
Three months ago, Argentina defaulted because it was prohibited by the court order from distributing a separate bond payment.
Due Interest
Investors collectively holding at least $1.4 billion of the notes can demand full repayment of principal on the dollar pars, as well as past due interest. The pars, which are also denominated in euros and yen, are the cheapest of Argentina’s overseas notes because they pay the lowest interest rates. That also gives them the biggest potential return in a debt swap.
An acceleration may also threaten Elliott’s chances of getting paid, since it would immediately swell Argentina’s debt costs, said Carlos Abadi, the chief executive officer of New York-based investment bank ACGM Inc.
Stephen Spruiell, a spokesman for Elliott, declined to comment on how the firm would be affected by acceleration.
An acceleration may be a bid to pressure Argentina and the holdout creditors into negotiations, according to Patrick Esteruelas, an analyst at Emso.
“The $5.4 billion question is would par holders use the threat of acceleration to force a resolution of the holdouts, or are they choosing to accelerate simply to get better terms on their bonds,” he said by phone from New York.
Immediate Repayment
If the group that demands immediate repayment holds 50 percent of the securities, it can undo the acceleration once Argentina resumes payment.
Building a majority position in the bonds beyond the 25 percent minimum would “lend some credence to the idea that they want to use the threat of acceleration as leverage to force a resolution,” Esteruelas said.
Still, the move is risky because of Argentina’s history of dealing with foreign creditors, said Voya’s Butikofer.
The nation, which has defaulted seven times since its 1816 independence from Spain, imposed losses of 70 percent in its two most recent debt restructurings and has referred to holdouts as vultures, “extortionists” and “terrorists.”
“Putting more fuel on the fire and forcing any kind of debt repayment through legal enforcement will not please the Argentines,” Butikofer said. “I’d rather watch it with some distance.”
By Jonathan R. Macey
October 31, 2014
In avoiding its debts, the country gambles with contempt and faces the discipline of international markets.
When one drives around Buenos Aires or observes a pro-government rally in Argentina, one sees posters showing the head of Judge Thomas Griesa of the U.S. District Court for the Southern District of New York superimposed on the body of a vulture. One poster reads, “Griesa wants your house, your job and your food!”
This story dates back to 2001, when Argentina defaulted for the seventh time on its sovereign debt, to the tune of almost $80 billion in bonds. The country attempted — unilaterally, with no negotiations whatsoever — to offer bondholders new bonds worth roughly 33 cents on the dollar, a deal that was among the sharpest haircuts in the history of international finance. A small group of bondholders, mostly hedge funds, rejected this deal and decided to have their day in court. In order to collect what was owed to them as bondholders according to the terms of the bonds as originally issued. The lawsuit was filed in New York because Argentina, when it issued the bonds, voluntarily chose to sell the bonds in the U.S. and the country voluntarily waived its sovereign right to immunity from suit and agreed that the bonds would be sold pursuant to U.S. commercial law.
Applying U.S. law in 2012 — after years of witnessing Argentina’s maneuvers to evade its contractual obligations and repudiate its debts — Judge Griesa ruled that the holders of the original bonds had valid claims and that these “holdout creditors” had to be paid alongside Argentina’s other creditors, which means that the holdout creditors had to be paid the same proportion of the debt owed to them as was being paid to the holders of the substitute bonds, and that such payments had to be made until the holdouts were repaid in full. On appeal the Second Circuit upheld Grisea’s ruling, and the U.S. Supreme Court declined to hear Argentina’s further appeal (perhaps because Argentina had indicated to the Second Circuit that it would not obey Judge Griesa’s order no matter how the justices ruled).
Out of legal options and determined not to negotiate with the holdouts, Argentina went into default at the end of July, further isolating itself from the capital markets and causing increased economic hardship for its citizens. As the economic climate has worsened and her popularity has fallen, Argentinian president Cristina Kirchner has taken up the slogan “Homeland or Vultures,” painting the holdouts as responsible for all of the country’s ills, from soaring inflation to increased unemployment to labor unrest. A key weapon in that campaign has been to unfairly attack Judge Grisea as an ally of the holdouts.
Cabinet leader Jorge Capitanich accused Judge Griesa of not only being “partial” and “promoting imbalance” in favor of the holdout creditors, but also of not fully grasping the complexities off the case. That is a highly unconvincing critique of a deeply respected judge who has served with distinction for more than 40 years. Not to be outdone, in July, Argentine economy minister Axel Kiciloff, one of President Kirchner’s closest aides, came to Washington, D.C., to give a speech before the Organization of American States in which he called Judge Griesa’s ruling “absurd” and “crazy.”
Minister Kicillof, who appeared again just last week at meetings of the World Bank and IMF to hector against the holdouts, has only increased the verbal attacks on Judge Griesa. In a recent address to Argentina’s Lower House of Deputies, he stated that “the vulture funds found an accomplice judge to make a scandalous profit.” He conveniently failed to mention that the holdouts have yet to collect a dime in this dispute, and have repeatedly stated that they are ready to negotiate.
Judge Griesa has been pushing for a negotiated solution. In June, he appointed the highly respected lawyer Daniel Pollack as “special master” to conduct and preside over settlement negotiations. Perhaps predictably, the Kirchner administration quickly took to disparaging Mr. Pollack and accusing him of having “overt bias in favor of the vulture funds.” Argentina then tried, unsuccessfully, to remove him from his post as special master.
On October 7, 2014, Argentina’s social-welfare minister, Alicia Kirchner, the sister-in-law of Argentina’s current president, Cristina Kirchner, and sister of former president Nestor Kirchner, told Radio America in Argentina that the country is “is making history” by flouting the law. She also asserted that Argentina “should be ruled by politics and not from economics.” This is a bit like saying that nations should not have to obey the law of gravity.
Argentina’s latest stunt involves an attempt to move the case out of U.S. courts and into Argentine courts. Unsurprisingly, Argentina is having a hard time getting its non-holdout creditors to participate in this scheme. It is a blatant violation of Judge Griesa’s orders, and creditors flouting the court’s orders by going to Argentina to collect are fully justified in being concerned that they will be held in contempt of the U.S. District Court in New York. It turns out that breaking Argentina’s contract is not quite as easy as the country’s economic leaders thought it would be.
Argentina also tried to thwart the court’s decision by depositing the money to pay the other creditors (but not the holdouts) in Nacion Fideicomisos SA, a unit of state-run Banco de la Nacion Argentina. Argentina did this because no bank in the U.S. would make these payments, since Judge Griesa had expressly ruled that paying other creditors without paying the holdouts as well was illegal. This scheme is just as unlikely to work.
The paying agent and trustee for the bonds is Bank of New York Mellon Corp., and it, along with other third parties, is barred from making payments that are inconsistent with the court’s rulings or otherwise helping Argentina to avoid the law. This means that Argentina does not really know to whom it owes money, and its U.S. banks cannot help it to find out. Bondholders’ identities are known only by the nominees who serve as the “registered owners” of the securities. The nominees are Cede & Co., a subsidiary of the Depository Trust & Clearing Corp. (DTCC), and Bank of New York Depository (Nominees) Ltd., a subsidiary of BNY Mellon based in London. In the unlikely event that the creditors can be identified without the cooperation of one or both of these firms, any creditors who make it to Argentina to try to collect the money they are owed will be running afoul of the court’s rulings.
In the long run, the real losers here are future generations of Argentinians. Their country is now a pariah in world capital markets, and its currency is rapidly in decline. President Kirchner, whose contempt for the rule of law is a core policy and campaign promise, is going to learn that as difficult as it is for an issuer to thumb its nose at U.S. law that it is committed to obey, avoiding the inexorable discipline of the capital markets will prove even more difficult.
Jonathan R. Macey is a professor of law at Yale Law School.



27 octubre, 2014
October 24, 2014
BUENOS AIRES, Argentina — An Argentine court has convicted and sentenced to life in prison 15 former military, police and civilian officials for abductions, torture and killings of dozens of dissidents during the country’s 1976-83 dictatorship.
Four others received sentences of 12 or 13 years, and two defendants were acquitted.
Among the victims whose cases played a role in the trial was Laura Carlotto, daughter of the founder of the activist group Grandmothers of Plaza de Mayo. Her newborn son was taken from her shortly before she was executed in 1978 at the La Cancha detention center in a rural area of Buenos Aires province and turned over to a couple for adoption. In August, after DNA tests, the son was reunited with his grandmother, Estela de Carlotto, head of the Grandmothers.
October 24, 2014
BUENOS AIRES, Argentina — Argentines have a new national park that is home to endangered species like jaguars and crowned solitary eagles, thanks to donations from the public to cover the initial cost.
Congress this week passed legislation creating the Impenetrable National Park on 120,000 hectares (nearly 300,000 acres) in northeastern Argentina that belonged to a rancher who was murdered in 2011.
Thousands of individual Argentines as well as civic groups and companies donated 10.5 million pesos ($1.2 million) for the park. The total cost will be 65 million pesos ($7.6 million).
It is Argentina’s 32nd national park, and the foundation that led the fundraising effort says it’s the first in Latin America started this way. The Smoky Mountain National Park in the United States was created from donations early in the 20th century.
The Argentine fundraising campaign continues. If the government should decide to use its own money for the park’s remaining cost, leftover donations will be used to fight poaching, said Emiliano Ezcurra, director of The Forest Bank, the main group behind creation of the park.
By Taos Turner
25 October 2014
BUENOS AIRES — Argentina sold $983 million in U.S. dollar-denominated bonds to local institutional investors such as banks and insurers even as it remains locked out of global credit markets.
The two-year bonds carry an annual interest rate of 1.75% and pay investors in Argentine pesos at the official exchange rate, the Economy Ministry said late Thursday.
In a country where inflation is thought to total 40% annually and fears of a currency devaluation abound, the dollar-linked bonds are appealing because they promise to hold their value much better than would a typical peso-denominated bond. Argentine investors are mostly barred from buying cash dollars as an investment, so getting dollar-linked bonds is sometimes seen as the next best thing.
The bond sale marks the third time this year that President Cristina Kirchner has tapped domestic debt markets for financing as a dispute with creditors in the U.S. prevents the country from selling bonds overseas.
Last month, the government sold 10 billion pesos ($1.18 billion) in two-year peso bonds. In March, it sold 5.5 billion pesos in three-year bonds, the first time in several years that it raised funds from domestic investors.
The peso bond sales have helped the government to reduce its need to print cash to cover deficits. They also may have helped the central bank contain inflation, even if just moderately, by taking pesos out of the economy.
The government still depends heavily on funds borrowed from the national pension agency and the central bank. Analysts say printing rapidly increasing amounts of cash each year has fueled inflation, which many economists put around 40%.
Argentina hasn’t sold bonds abroad since it defaulted on about $100 billion in 2001 amid a deep economic crisis and a huge currency devaluation. The country swapped about 92% of the defaulted debt that was eligible to be restructured for heavily discounted new bonds.
But some of those bondholders demanded full payment and have battled Argentina in courts across the globe. Earlier this year, Argentina defaulted on some of its restructured bonds after a judge barred payments unless Argentina also pays holdout creditors that have won $1.6 billion in court awards. Resolution of this legal battle is necessary if Argentina wants to return to global bond markets.
By Lucy Hornby
October 26, 2014
China will open its markets to Argentine sorghum this year, according to Argentina, creating competition for the US farmers who have been the main beneficiaries so far of a surge in Chinese demand for the grain normally used to make distilled alcohol.
High prices of corn in China have forced animal-feed producers to turn to sorghum as a cheaper alternative, especially after Chinese quarantine officials began more strictly enforcing restrictions against imports of certain types of genetically modified corn.
Imported corn and sorghum cost less than domestic corn thanks to Beijing’s minimum price policy, which is designed to encourage the planting of corn.
The Argentine minister of agriculture will sign bilateral protocols, paving the way for China to import Argentine sorghum, during his visit to Beijing next month, his deputy Gabriel Delgado said in Beijing on Friday. “We expect trade to be smooth,” Mr Delgado said.
China is by far the world’s largest sorghum importer, buying about 4.3m tonnes last year, compared with second-ranked Japan’s 1.5m tonnes. Its imports were negligible until 2009, before soaring in 2012 and 2013.
The US leads the world in sorghum production and exports, shipping about 5m tonnes this year. Argentina is the world’s fifth-largest sorghum producer but the second-largest exporter, with exports of about 1.3m tonnes. Australia ranks third.
Argentina may have come late to the feast. Already this summer Chinese quarantine officials indicated stricter quality checks on sorghum imports, in an apparent attempt to force producers of animal feed in southern China to buy domestic corn and ease swelling stocks.
The increased scrutiny has already led one Shanghai-based agricultural consultancy, JC Intelligence, to halve its forecast for sorghum imports for the year to end September.
Sorghum generally has an easier time than corn in clearing Chinese import inspection procedures because it is not genetically modified.
By Dimitra DeFotis
27 October 2014
A handful of hedge funds and private-equity investors have started to tango with Argentina’s capital markets. No one can be quite sure where the dance will end.
The attraction: The prospect of an October 2015 election that could bring big changes and a boost to the markets. Left-leaning President Cristina Fernandez de Kirchner, who together with her late husband, Nestor Kirchner, has ruled the country since 2003, will step down because of term limits. She will leave an economic mess. In Argentina, inflation is at about 40% — though the state figure is 30% — and the U.S. dollar fetches 15 pesos on the black market, almost twice the official rate. The country is in default on a chunk of its sovereign debt, a situation that began in 2001, was nearly resolved in a 2005 restructuring, and came to a head again in July when holdout U.S. hedge funds demanded to be made whole.
Smaller investors might be interested in joining the dance, particularly since Argentina’s Merval Index, representing just 14 companies, seems reasonably valued at 10 times estimated earnings, despite a 48% dollar-based rise this year. We’ve all watched the election of a reform-minded Indian government send its market up by 30% in 2014. In this case, however, we’d suggest staying away.
The reality is that Argentina’s economy is very fragile and its equity market — relegated by MSCI to frontier status — is barely approachable for the retail investor. The government has nationalized enterprises, and others have gone private over the past decade. That has reduced the total market value to just $63 billion, smaller than Venezuela’s. Advisors warn that the Global X MSCI Argentina ETF (ticker: ARGT) is illiquid and lacks enough diversity to merit interest.
Economists expect Argentina’s GDP to contract 1% to 2% in 2014. And the outlook isn’t much better: The World Bank projects 0.5% growth in 2015. Earlier this month, Argentina’s central bank president, Juan Carlos Fabrega, who pushed peso devaluation and higher interest rates to contain inflation and protect reserves, resigned as Kirchner accused the bank and business interests of conspiring to topple her government. He clashed with Economy Minister and Kirchner confidant Axel Kicillof, who could end up on the ballot next year.
“It is a sad story. Argentina has all the ingredients to be great, but the political makeup has been a disaster,” says Jorge Mariscal, chief investment officer for emerging markets at UBS Wealth Management. UBS advises clients to stay away from Argentine bonds and currency; it doesn’t cover the equity market.
Because of Argentina’s default, “it’s more difficult to access international financing,” notes Mariscal. What’s more, prices for agricultural commodities, which make up more than a third of exports, have been declining. “The economy is probably already in a recession,” according to Mariscal.
Smaller investors should also bear in mind that the hedge funds and private equity funds aren’t necessarily buying public stocks. Some have been gobbling up real estate and other assets that aren’t open to others. Hedge fund investor Daniel Loeb, whose firm, Third Point, has bought Argentinian debt and shares of state-controlled oil company YPF (YPF), has contended that the country is at an inflection point after a “long malaise.”
But elections won’t necessarily yield a big shift in Argentina. Investors could find themselves in a situation similar to those in Brazil, where the market has tumbled while awaiting the Oct. 26 election, with no assurance of change.
By Nate Raymond
24 October 2014
NEW YORK, Oct 24 (Reuters) – A U.S. judge has delayed by a week a December hearing to consider whether Citigroup Inc should be allowed to process an interest payment by Argentina on bonds issued under its local laws following its 2002 default.
U.S. District Judge Thomas Griesa in Manhattan in a brief order Friday said the hearing, originally set for Dec. 2, will now take place Dec. 9.
An interest payment is due Dec. 31 by Argentina on U.S. dollar-denominated bonds issued under its local laws.
Citigroup has said it faces regulatory and criminal sanctions by Argentina if it cannot process the country’s payments.
Argentina defaulted in July after refusing to honor a court order to pay $1.33 billion plus interest to bondholders when it paid holders of bonds swapped during the country’s 2005 and 2010 debt restructurings.
The bondholders were led by Elliott Management’s NML Capital Ltd and Aurelius Capital Management.
The hedge funds had spurned Argentina’s past restructurings, which resulted in exchanges for about 92 percent of the country’s defaulted debt. Investors who accepted Argentina’s terms were paid less than 30 cents on the dollar on average.
Griesa, who oversees the litigation, in July blocked Bank of New York Mellon Corp from processing a $539 million interest payment on what the country says is over $28 billion in restructured debt.
The order sent Argentina on a course to default after failing to reach a settlement with the holdouts.
By Maximiliano Rizzi
24 October 2014
BUENOS AIRES, Oct 24 (Reuters) – The fall in world soybean prices could cost Argentina’s farm sector $2.7 billion, further pressuring central bank reserves that the government uses to finance the economy in the absence of international bond financing.
The grains powerhouse is the world’s top exporter of soymeal livestock feed, and its No. 3 supplier of raw soybeans.
Farmers have been piling up their 2013/14 soybeans this year as a hedge against high inflation and the wobbly local peso . While they have been holding onto their crops at the highest rate ever, world and local soy prices have fallen hard.
Farmers are required to get paid by exporters in pesos, not dollars. So if they sell now to protect themselves from further price reductions as the world soy market gets set for a U.S. bumper crop, growers will see their earnings eroded by inflation expected by private economists to hit 40 percent this year.
According to Argentina’s official export price, which is down 20 percent since July, the 23 million tonnes of soybeans currently being hoarded are worth $9.7 billion, having lost $2.7 billion in market value over the last three months.
The government wants the foreign currency that would come from exporting those beans. It needs to shore up its finances after July’s sovereign debt default, which confirmed the country’s more than decade-long banishment from the international capital markets.
“The pace of grains selling this season has been the lowest in years,” said Natalia Colombo, economist at the BLD brokerage in grains hub Rosario.
Benchmark Chicago soybean futures are down almost 35 percent since mid-year. Many farmers expect a devaluation of the peso, adding to their motivation to hoard rather than selling into a falling market.
“Soybean prices will continue their downward tendency in 2015, which combined with the gap between the official and unofficial exchange rates and higher production costs, will impact profitability for Argentine growers,” the consultancy said in a recent report.
The government estimates the 2013/14 soy harvest, which ended in July, was a record 53.4 million tonnes.
Planting of the 2014/15 crop started last week. The agriculture ministry has not issued a harvest estimate for this season but the U.S. Department of Agriculture forecasts an Argentine crop of 55 million tonnes.
Soy and its byproducts are a major source of export dollars for Argentina. Grains traders that operate in Argentina are required to change their dollars for pesos.
With central bank reserves down 10.6 percent this year to $27.4 billion, or about four-and-a-half months of import cover, greenbacks are in ever higher demand. The government, which uses central bank reserves to pay debt, is pressuring farmers to sell their stocks.
“As the year goes on there will be stability in the exchange rate, so to speculate about movements in the currency by hanging onto grains would be a mistake,” Economy Minister Axel Kicillof told local radio this week.
By Daniele Lepido
Oct  25, 2014
Telecom Italia SpA (TIT) agreed to give Mexican financier David Martinez 30 months to complete a purchase of a stake in Telecom Argentina SA that has failed to win regulatory approval in almost a year.
Martinez’s Fintech Group, which agreed in November last year to acquire Telecom Italia’s 22.7 percent indirect stake in Telecom Argentina for $960 million, had already received two extensions of a deadline to close the deal, the most recent one of which expired yesterday. The value of the transaction remains unchanged, Telecom Italia said today in a statement.
The sale is a component of Chief Executive Officer Marco Patuano’s strategic plan to cut Telecom Italia’s $35 billion in debt and to restore the carrier’s investment grade. Patuano, who took over a year ago, is seeking to focus on Telecom Italia’s home market and on Brazil, where it controls the country’s second-largest wireless carrier Tim Participacoes SA.
Telecom Italia said today it has received a pledge of collateral with a value of $600.6 million from Fintech. The pledge will increase Milan-based Telecom Italia’s liquidity, without changing its net financial position.
The new terms aren’t beneficial for Telecom Italia as the price doesn’t increase even though completion is delayed, said Francesco Vatalaro, a professor of telecommunications at Tor Vergata University in Rome. The collateral pledge is “the minimum required if you concede to your buyer two and half more years to complete a deal that has been on hold for almost one year,” he said.
Another Buyer?
Of the total deal price, Fintech has already paid $113.7 million. It is expected to pay a further $215.7 million by the end of October for 17 percent of Sofora Telecomunicaciones SA, the company that controls Telecom Argentina, Telecom Italia said.
The remainder, for a further 51 percent stake in Sofora, will be paid once Fintech has obtained regulatory approval. If Fintech fails to do so during the 30-month period, Telecom Italia can choose to seek another buyer for that 51 percent stake.
If Telecom Italia can’t complete a sale to another buyer within a further 30 months, the agreement with Fintech will be terminated. In that case, Fintech will pay Telecom Italia $175 million in compensation and Telecom Italia gets an option to buy back Sofora shares bought by Fintech.
By Sophia Pearson and Bob Van Voris
Oct  24, 2014
Billionaire Ken Dart’s EM Ltd. is seeking to take advantage of a U.S. court ruling won by fellow billionaire hedge fund manager Paul Singer’s NML Capital, as he seeks payment on $835 million in defaulted Argentine bonds.
Dart, 59, president of Dart Container Corp., has been trying to get the South American nation to pay on bonds held by his hedge fund for more than a decade. In his latest complaint, assigned yesterday to U.S. District Judge Thomas Griesa in Manhattan, Dart’s hedge fund seeks to bar Argentina from paying its performing debt before EM gets paid.
In 2013, Argentina’s tax agency sent 50 government agents to the local unit of Mason, Michigan-based Dart Container, as part of an investigation into alleged tax evasion, and accused him of financing anti-government protests. Argentina’s president, Cristina Fernandez de Kirchner, has vowed never to pay the so-called “vulture funds” that hold the country’s defaulted debt.
Griesa, who handles U.S. litigation over Argentina’s 2001 default, ruled in 2012 that Argentina can’t pay its restructured debt without also paying $1.5 billion to a group led by NML that holds defaulted bonds. That ruling triggered a new default July 30 when bondholders weren’t paid.
“EM now seeks an injunction from this court that is the same as the injunction that was issued in NML v. Argentina,” Dart’s hedge fund said in its complaint filed last week.
Argentina has been locked out of international credit markets since it defaulted on a record $95 billion 13 years ago. The country exchanged 92 percent of its defaulted bonds for new ones, at a sharp discount, in restructurings in 2005 and 2010. Holdouts including EM and NML have tried to collect from the nation after winning court rulings recognizing their debt.
Argentina has said it can’t pay the holdouts in full while also making payments on the restructured bonds. The country claims Griesa’s attempts to force it to pay holdouts violate its rights as a sovereign nation.
Shannon Lynch, a spokeswoman for the New York law firm Cleary Gottlieb Steen & Hamilton LLP, which represents Argentina in the bond litigation, didn’t immediately return a voicemail seeking comment.
The case is EM Ltd. v. Republic of Argentina, 14-cv-08303, U.S. District Court, Southern District of New York (Manhattan)
By Glenn Garvin
26 October 2014
Jill Pack popped her seat back, took a handful of potato chips out of her box of snacks, cast a languid gaze at Queen Latifah and Dolly Parton singing and dancing up on the TV screen, and pronounced her verdict: In all her years of traveling to see her relatives in Port St. Lucie, driving had never been like this before.
“I never thought I’d say this, but the bus is a really nice option,” she said.
Pack, a 46-year-old flight attendant from Chicago taking advantage of a South Florida layover to visit her family, is the latest convert to Miami-based RedCoach, a luxury bus service that’s on the cutting edge of what transportation experts say is a renaissance in bus travel.
“This is a new generation of bus service,” says Robert Poole, director of transportation policy at the Reason Foundation think tank. “The growth in the past four to seven years has been phenomenal.”
Spurred on by passengers weary of the security hassles at airports in the post-9/11 world and anxious to stay wired to their cellphones and laptop computers while in transit, bus travel is growing four times as fast as airlines and nearly eight times as fast as railroads.
From cut-rate, nameless lines serving ethnic niches (known in the industry as “Chinatown buses” because that’s their most popular market) to streamlined commuter companies offering express service between cities on the upper East Coast, buses are taking back a big chunk of a travel market that they once dominated.
“The stigma that was long associated with bus travel has finally lifted, completely,” says Joseph Schwieterman, who studies transportation at DePaul Univeristy’s Chaddick Institute for Metropolitan Development. “You’re seeing passengers riding buses now who would never have set foot in a Greyhound coach 20 years ago.”
Not so long ago, the industry’s dominant image was that of Dustin Hoffman as the seedy, tubercular pimp Ratso Rizzo, dying in the back of an overcrowded bus from New York to Miami at the end of Midnight Cowboy.
That’s a sharp contrast with RedCoach’s first-class buses, which feature roomy leather seats (just 27 in a coach built to hold 56) that recline into beds, on-board movies and free wi-fi service. “To get somebody out of a car, which offers so much freedom of scheduling, you have to give them a good reason, and I think we do,” RedCoach vice president Florencia Cirigliano says.
RedCoach, which stops at the Miami airport, has been in the luxury-bus business in Argentina for 20 years. It launched in Florida in 2010 after Cirigliano and her parents, vacationing in Miami, discovered that a side trip to Orlando would force them to either spend exorbitantly on airline tickets or rent a car and negotiate Florida’s unfamiliar and crowded freeways for several hours.
“We were surprised at how few options there were,” the 29-year-old Cirigliano says. “In Argentina, we have 40 million people and 20,000 buses. The business for buses is huge. Every town has a big bus station the size of Union Station in Washington, D.C. We didn’t see why that couldn’t work here.”
It wasn’t easy — many RedCoach buses in those early days carried just one or two passengers. (And even earlier this month, a Herald reporter traveling mid-week from Fort Pierce to Miami was the only one aboard.) “We lost a lot of money at first, a lot,” Cirigliano says.
But an aggressive combination of cut-rate fares (at one point, as little as $20 for a round trip between Miami and Orlando) and visits to county fairs and other events where crowds were invited to climb aboard and inspect the luxuriant seats expanded RedCoach’s business at a rapid pace.
Originally less than an asterisk in Florida’s transportation system, operating a single bus between Miami and Orlando, RedCoach now operates a fleet of 15 vehicles linking 11 Florida cities, from Naples to Jacksonville. Though the days of dirt-cheap fares are gone (a first-class round trip between Miami and Orlando now costs $80 to $100, about double the fare on conventional bus lines), the company expects to carry 100,000 passengers this year, a 35 percent increase from last.
Nearly half of RedCoach’s passengers are college students, traveling home on weekends from the big college campuses in Gainesville, Tallahassee and Orlando. Another quarter are businessmen. Those are the same two groups groups spurring the growth in bus travel around the rest of the country.
Both are attracted by the same thing: the opportunity for almost unlimited use of cellphones, computers and other electronic gadgets, which are restricted on airlines and often don’t work very well on trains because they often travel through remote areas far from phone towers. Even the most bare-bones bus these days is likely to have wi-fi service and power outlets.
“Bus travelers use technology much more intensively than those on trains and planes,” DePaul’s Schwieterman says. “The bus seat becomes an extension of their office. … Time in a bus has suddenly become a billable hour.”
Polina Raygorodskaya started traveling by bus while commuting between Boston, where she was attending college, and New York, where she had founded a fashion-industry public relations company. “It wasn’t that I couldn’t afford other forms of travel, I was making money,” she says. “It was buses worked better with my schedule — I could always get a bus ticket at the last minute if something changed — and I wasn’t losing a day of work every time I traveled because I could get so much done on the bus.”
Her fondness for bus travel eventually turned into a business itself. Five years ago with a friend, she created the Boston-based, a one-stop shopping site that allows customers to collect schedules and prices from 28 different bus companies, then purchase tickets with a single click.
“We’re up to nearly a million searches a month,” the 28-year-old Raygorodskaya says, “and the vast majority of our customers are millennials. When you talk about an older generation of people who grew up with bus travel as it used to be, it’s not considered cool. This generation, which is what’s moving bus travel forward, thinks it’s really cool.”
Bus travel may never have been cool, exactly, but it was once the most popular long-distance travel option in America. “Between 1930 and 1965, you could go literally anywhere on a bus,” Schwieterman says. “Every little town in America had a bus stop.”
But the 1970s brought big changes in the way Americans traveled. Auto registrations doubled every year of the decade, while the 1978 deregulation of airlines sent plane fares plummeting. “By 1980, bus travel had acquired a real stigma,” Schwieterman says.
Most observers think the bus revival began in 2008 with the American arrival of the British company Megabus, which launched discount express service in the Midwest. (It has since expanded into California, the upper Northeast and, five months ago, Florida.) Megabus was soon followed by Boltbus, a competitor with similar service and routes, owned by Greyhound.
Around the same time, Greyhound — the only remaining national bus company in America, with 3,800 stops across the continental United States and Canada — began a major upgrade of its vehicles, adding legroom, wi-fi and electric sockets like the other companies.
“We’ve done a great deal to transform our brand, from new mobile websites to onboard amenities,” Greyhound spokeswoman Lanesha Gipson says. “We’ve improved an onboard experience that’s still safe, reliable and affordable.”
But instead of carving up ever-smaller pieces of the same passenger pie, all the new competitors have expanded the bus-service market. Precise numbers are hard to come by because no federal agency collects statistics on bus travel, but Schwieterman estimates interstate buses carry about 70 million passengers a year.
“That’s way fewer than the airlines, but way more than the trains,” he says. “It’s a force to be reckoned with.”
RedCoach’s traffic doesn’t count toward that total, because none of its routes stretch across Florida’s borders — yet. “We want to add a few more cities within the state, but for sure we plan to go outside Florida,” Cirigliano says. “The business has expanded much faster than we expected.”
So fast, in fact, that it triggered a domestic crisis. Her parents liked their 2010 visit to Florida so much that they bought a vacation condo here. Cirigliano used it when she came for the RedCoach launch, expecting to stay a few weeks. Four years later, she’s still there, along with a husband and, any day now, a baby.
“My mother was furious,” she recalls. “She told my father, ‘You promised me a condo for vacations, not to move my daughter out of the country.’ But so far, they’re still married.”
By Betty Laseter
October 27, 2014
An amateur paleontologist discovered a fossil of a giant ground sloth in the southern Argentina. The fossil that the paleontologist unearthed in the coastal city of Mar del Plata is about 500,000 years old.
Carlos Manduga accidentally discovered the skull, ribs, some vertebrae and some other fossilized remains. According to a Lorenzo Scaglia Natural History Museum representative, Manduga has unearthed the remains of the pre-historic creature while digging in a well on his property.
Director of Lorenzo Scaglia Natural History Museum, Analia Veron, said that the remains are approximately 500,000 years old. They are of a giant ground sloth named as ‘scelidotherium leptocephalum’.
Veron further said, “The giant ground sloth had huge claws that it utilized to dig deep tunnels of more than a metre in diameter and dozens of metres long, creating real underground cities”.
Manduga was very excited after discovering old remains that could reveal several things about the pre-historic creature. While talking about his accidental discovery, Manduga said that he was cleaning the well on his property in Mar del Plata when he found the fossils. Manduga’s house where fossils have been found is situated around 400 kilometers south of Buenos Aires, capital of Argentina.
According to Veron, the species had extinct more than 8,000 years ago due to change in climate and overhunting by humans.
While talking about the discovery, Alejandro Dondas, technical director of the museum’s paleontology division, stated that skull of the giant ground sloth is intact with teeth. According to Dondas, the discovery will be helpful in learning more, almost everything about the species.
The very first giant ground sloth fossils in Bahia Blanca, a city situated in the south-west of the province of Buenos Aires, had been discovered by Charles Darwin during 1833 and 1835 when Darwin was on trip to southern Argentina on the HMS Beagle.

from Nelson Mandela’s Long Walk to Freedom:“We must face the matter squarely that where there is something wrong in how we govern ourselves … the fault is not in our stars but in ourselves.”


20 octubre, 2014
By Ken Parks
20 October 2014
BUENOS AIRES — Argentina’s government said it would sell up to $1 billion in local U.S. dollar-linked bonds later this month as it continues to tap local institutional investors such as banks and insurers for financing.
The two-year, dollar-denominated bonds carry an annual interest rate of 1.75% and pay investors in Argentine pesos at the official exchange rate, the Economy Ministry said Friday night.
The government will receive offers for the bonds on Thursday, with final settlement Oct. 28.
“Selling bonds linked to the exchange rate is a normal and widespread recipe in emerging markets when fears of a devaluation are rising on the market and [a government] wants to send signals that it won’t devalue,” said Pedro Rabasa, a former chief economist at the central bank.
The peso closed little changed at 8.4760 a dollar Friday on the regulated foreign-exchange market. On the black market, where some Argentines go to skirt currency controls that limit the number of dollars they can legally purchase, the peso sold for 14.70 a dollar.
The gap between exchange rates is fueling speculation the government eventually might devalue the official exchange rate, something central-bank chief Alejandro Vanoli ruled out last week. In January, the government let the peso slide 20% to stop a run on the country’s hard-currency reserves in the biggest devaluation since 2002.
Mr. Rabasa thinks it isn’t a question of if the authorities will devalue the peso, rather when and by how much.
“The longer the central bank takes to move the exchange rate, the greater the risk that this ends in an uncontrolled devaluation,” he said.
Thursday’s bond issuance will mark the third time that President Cristina Kirchner has tapped domestic debt markets for financing this year as a dispute with creditors in the U.S. prevents her administration from selling bonds overseas.
Last month, the government sold 10 billion pesos ($1.17 billion) in two-year peso bonds. In March, it sold 5.5 billion pesos in three-year bonds, the first time in several years it raised funds from domestic investors.
The peso bond sales allowed the government to reduce its reliance on money printing to cover spending deficits, while at the same time helping the monetary authority contain inflation by taking pesos out of the economy, analysts say.
The government’s funding strategy still relies to a large degree on borrowings from the national pension agency and the central bank. Analysts point to money printing by the central bank to finance the federal government as a significant contributor to inflation of around 40%.
Argentina hasn’t sold bonds offshore since it defaulted on about $100 billion in 2001 amid a deep economic crisis. The governments of Mrs. Kirchner and her husband and predecessor, Nestor Kirchner, managed to swap about 93% of the defaulted debt that was eligible to be restructured for heavily discounted new bonds.
However, some creditors demanded to be paid in full and have hounded Argentina in courts across the globe. Earlier this year, Argentina defaulted on some of its restructured bonds after a judge barred payments unless the Kirchner administration also pays holdout creditors that have won $1.6 billion in court awards.
The dispute with holdouts is seen as the main impediment to Argentina borrowing abroad to relieve dollar shortages that have led it to restrict imports at the expense of economic growth.
October 20, 2014
OLAVARRIA, Argentina — Shade trees hide the crumbling farm house outside of Olavarria. Hidden at the end of a dirt path, the white plaster coating is falling away from the brick foundation like scabs peeling off an unhealed wound.
Araceli Gutierrez guards the memories of this place like a fragile keepsake. A voluntary caretaker, the 61-year-old with faded blonde curls watches over the house known as Monte Peloni where, as a young woman, she was tortured and raped by her military captors.
“This is a faithful reflection of the memory,” she says, walking through the decaying rooms, her expression lost in time. “If it collapsed, it would be as if the most important part of my life were to collapse.”
The events that took place in 1977 now are coming to light, forcing residents of this pastoral community to examine their role in Argentina’s Dirty War against those who challenged the military regime.
One secret unearthed this summer already cracked Olavarria’s facade of quiet rural life.
In August, residents learned an Olavarria music teacher named Ignacio Hurban was, in fact, Guido Montoya Carlotto, the lost grandson of Estela de Carlotta, whose Grandmothers of Plaza de Mayo group searches for children taken by the regime.
Now, Olavarria is learning about the secrets of Monte Peloni. Gutierrez is among the witnesses testifying before a judicial panel investigating the detentions of 21 people taken there by military officials.
A hearing set for next year will uncover abuses allegedly committed against 40 other people at Monte Peloni by 70 defendants, including former police officers, prison officials and town leaders who served as advisers to the regime that ruled Argentina from 1976 to 1983.
“With this tribunal, plus the appearance of Guido,” Gutierrez said, “Olavarria has wwked up.”
But it has been a difficult awakening. Olavarria, some 220 miles (350 kilometers) southwest of Buenos Aires, is a prosperous farming and industrial town that holds onto tradition. The afternoon siesta is still a part of life for many of the 90,000 residents. The twin steeples of the Catholic church stand over Olavarria’s tree-lined central square, right next to city hall.
The process is exposing secrets long buried by Olavarria, where victims and the accused share the same streets and know the same people.
Four aging military men could be sent to prison for life as a result of the tribunal that opened Sept. 22 and is expected to conclude before the close of the year.
The four defendants are Omar “Pajaro” Ferreyra, 64, an army sergeant who went on to serve as Olavarria’s director of urban control; retired Gen. Ignacio Verdura, 82, who commanded the regiment that controlled the region; former Capt. Walter Grosse, 69; and former Lt. Horacio Leite, 64.
Townspeople old and young crowd into a room at the local state university, or gather outside at the windows, to hear recollections of kidnapping and torture, of being taken to the bathroom of the old farmhouse, where the most sensitive parts of one’s body were fastened to electrical cables and shocked.
Tales of Monte Peloni, named for the Swiss family who built the home in the 1800s, long passed from one resident to another like ghost stories.
“I had one friend who would tell us that it scared him to walk by there at night,” said Facundo Carlucho, an industrial engineering student in Olavarria.
“I think it’s good that justice is being done for what happened in this country. I didn’t live through that time but, from what my parents told me, I know enough.”
Other communities in Argentina launched investigations into their Dirty War-era abuses years ago, but in Olavarria, there was “resistance” by longstanding social groups that continue to hold influence, according to Walter Romero, the prosecutor leading the Monte Peloni tribunal.
“It’s a small town with a conservative profile,” said Rafael Curtoni, dean of social science faculty at Central University of Buenos Aires province.
Curtoni said Olavarria continues to guard “certain secrets of the business sector and of people in power” who cooperated with the dictatorship.
“We all know who they are and where they are,” he said.
Many in Olavarria were stunned by the story of Hurban, who learned his true identity after volunteering to have his DNA tested. Shortly after his birth in 1978, he was taken from his mother, who died in military captivity, and given to a couple who raised him on a local farm.
Hurban has said his adoptive parents are “an extraordinary couple” who cared for him “with the greatest of love.” The Plaza de Mayo group opposes any effort by authorities to question the couple, concerned such an interrogation would discourage other lost children from coming forward.
As many are realizing, examination of the past is a delicate endeavor.
Carmelo Vinci, a former Monte Peloni detainee who now heads the Commission for the Memory of Olavarria, says local business owners participated in the repression of dissidents, noting that the people they employed in local factories were among the first to be detained. The tribunal has said it will investigate allegations that local Rotary Club members were given advance knowledge of who the military intended to pick up.
But Oscar Unzaga, president of the city’s main Rotary Club, denied that any such collusion occurred.
After consulting with the club’s oldest members, he told The Associated Press, “we decided not to say anything (about the charge) because that would give importance to an embittered testimony that does not deserve a response.”
The whole process of the tribunal, he said, is “a circus where the result is already decided.” All of the charges should be dismissed, he said, “because we are suffering attacks” perpetrated by guerrillas.
The airing of Olavarria’s secrets has made for uncomfortable encounters, said Vinci, who owns a printing shop in town.
A former military officer connected to the regime occasionally passes his store, he said. “Before, he would greet me very cordially. … But since the hearings began, he is not so friendly.”
A confrontation Gutierrez had with Ferreyra while he led the city’s urban control department some years ago was recorded by a television program and broadcast nationwide. The camera recorded Gutierrez as she chased him down the corridor of city hall shouting, “Come and tell me that you don’t know me.”
Ferreyra simply walked away, leaving her demand to hang in silence.
October 17, 2014
BUENOS AIRES, Argentina — Doctors told Argentine President Cristina Fernandez on Friday to rest for 48 hours in order to recover from a sore throat.
Argentina’s presidency said in a statement that the 61-year-old leader is suffering from pharyngitis and had to suspend a public event scheduled for later in the day in order to get some rest.
It’s the latest health issue to sideline Fernandez.
In January, she was treated for hip pain and sciatica, and in July she missed Independence Day celebrations to continue recovering from an acute throat infection. Last year, she underwent head surgery to remove a blood clot. A 40-day period between December and January when Fernandez went silent from public comments caused concern over her condition.
Fernandez was last seen in public Thursday night after the launching of Argentina’s first domestically built communications satellite.
By Katia Porzecanski
Oct 19, 2014
Argentina plans to sell as much as $1 billion of dollar-linked bonds this month, the first sale of its kind by the sovereign in at least a decade.
The country, which hasn’t sold debt in international markets since defaulting on a record $95 billion in 2001, will take offers on the two-year local securities beginning Oct. 23, the Economy Ministry said in a statement Oct. 17. The bonds will be denominated in dollars and pay holders in pesos at the official exchange rate, with an annual interest rate of 1.75 percent. The sale will close Oct. 28.
The securities offer protection against a peso devaluation and are being sold as the government tightens controls on informal currency markets. Argentines who can’t or don’t want to get government permission to access U.S. currency pay as much as 73 percent more for dollars in the black market.
“Despite the capital gains in pesos you’d get with a dollar-linked bond in the medium term from the inevitable correction in the real exchange rate, the price and yield for dollar debt is still superior,”Daniel Marx, a former finance secretary who runs Buenos Aires consulting company Quantum Finanzas, wrote in a report Oct. 17.
The sale will compensate insurance companies that were told by government officials to sell their dollar-denominated bond holdings to relieve pressure on the informal exchange rate, Buenos Aires-based newspaper Ambito Financiero reported last week, without saying where it got the information.
Jesica Rey, a spokeswoman for the Economy Ministry, didn’t immediately reply to a message sent after normal business hours seeking comment on the objective of the sale.
Dollar Access
Central bank President Alejandro Vanoli met with the nation’s banking association last week and reiterated a devaluation shouldn’t be expected, the monetary authority said in an Oct. 16 statement. Vanoli discussed measures to stimulate savings in pesos, the statement said.
Since her re-election in 2011, President Cristina Fernandez de Kirchner has restricted access to dollars as surging inflation spurred capital flight and a plunge in central-bank reserves. Prices rose 40.3 percent in September from a year earlier, according to the City of Buenos Aires.
Argentine companies and provinces have issued about $5 billion in dollar-linked securities as funding costs abroad jumped and speculation the peso would be devalued fueled domestic demand for the instruments, according to data compiled by the Argentine Institute of Capital Markets.
The nation devalued the peso 19 percent in January, and 17 economists surveyed by Bloomberg expect the currency to fall an additional 26 percent by the second quarter of next year to 11.4 per dollar.
This is Argentina’s third bond issuance in local markets this year. The nation sold 10 billion pesos ($1.2 billion) of two-year bonds last month and 5.5 billion pesos of three-year bonds in March.
By Charlie Devereux and Pablo Gonzalez
Oct 17, 2014
Monsanto Co. (MON), the world’s largest seed company, is planning to restrict sales of its herbicides in Argentina to certified buyers in a bid to reduce incidents of incorrect spraying that pose health risks.
The St Louis, Missouri-based company is working to create a register of herbicide users, Fernando Giannoni, director of corporate affairs for southern Latin America, said in an interview yesterday in Buenos Aires.
“We hope in the future to only sell our product to certified appliers,” Giannoni said. “Of course we don’t recommend that it’s applied near urban populations, nor schools or rivers. I don’t rule out that in the future we could sue farmers that apply our product incorrectly.”
He denied a report by Argentina’s National University of Rio Cuarto in Cordoba that links glyphosate, used in Monsanto’s weed killers, with cancer and blamed any side effects on farmers misusing the chemical. Giannoni said that while he hasn’t seen the Rio Cuarto paper, other reports have always ended up being disproved when sent up for peer review by the international scientific community.
Monsanto will seek to work with provinces or the national government to establish norms for the application of herbicides, Giannoni said. Argentina accounted for 7.5 percent of Monsanto’s sales last year, up from 5.9 percent in 2010, according to data compiled by Bloomberg.
“What’s happening is that there’s 5 percent of people that are using our product irresponsibly and this causes damage that applies to all farmers,” Giannoni said. “As an industry we need to close ranks so that everyone applies the product responsibly and expose those who don’t.”
17 October 2014
BUENOS AIRES, Oct 17 (Reuters) – Argentina will launch a new two-year sovereign bond on Oct. 23 for up to $1 billion, denominated in U.S. dollars and paid in the local peso currency, the Economy Ministry said in a statement on Friday.
The new bond will have an annual coupon of 1.75 percent, the statement said, adding that the minimum amount to be launched on Thursday will be $500 million.
The obligations will be paid at the country’s official exchange rate, it said.
“This bond is exclusively for the domestic market. The buyers will be local insurance companies and other institutional investors,” said Alejo Costa, chief strategist at local investment bank Puente.
“The government is trying to show it can issue at a low rate. It is also trying to mop up some excess liquidity,” he added. “The bond is denominated in dollars but the government will receive pesos and pay out in pesos, according to the exchange rate.”
The issue comes at a difficult time for Latin America’s No. 3 economy. The government defaulted on it global bonds in July after spurning a U.S. court decision ordering full repayment to “holdout” hedge funds that declined to participate in a pair of restructurings that followed Argentina’s 2002 debt crisis.
Investors who exchanged bonds in 2005 and 2010 were paid less than 30 cents on the dollar.
Inflation is expected by private economists to end this year at about 40 percent, one of the world’s highest rates, while heavy currency and trade controls weigh on economic activity.
19 October 2014
BUENOS AIRES, Oct 19 (Reuters) – A multibillion-dollar currency swap between Argentina and China will launch in November, bolstering the South American country’s diminished foreign reserves, the central bank chief was quoted as saying in a local paper on Sunday.
The swap will permit Argentina to either pay for Chinese imports with the yuan currency or reinforce its hard currency reserves, which have fallen by more than 30 percent this year.
It is part of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July, shortly before the Latin American nation defaulted on its debt for the second time in 12 years.
“The swap with the People’s Bank of China … we estimate that it will become operative in November,” local newspaper Pagina/12 reported Alejandro Vanoli said in an interview.
The newspaper, which has close ties with the Fernandez government, did not report additional details on the exchange.
No government or central bank officials were immediately available for comment.
Sources have previously told Reuters that Argentina will receive an initial installment of Chinese yuan worth about $700-$800 million before year’s end.
Argentina has relied on its reserves to pay for government expenses and has struggled to replenish them without access to global capital markets since its default.
“Reserves are for being used,” Vanoli told Pagina/12. “The government is not afraid, in a situation as special as this one is, to pay off its debt with reserves.”
Vanoli took over as the head of the central bank earlier this month after his predecessor quit in a dispute with the government.
Vanoli told Pagina/12 that he expects Argentina to end the year with a stock of reserves close to the current level.
Argentina’s international reserves now stand at $27.3 billion, according to central bank figures updated on Friday.
The economy ministry said on Friday that it plans to launch a new two-year sovereign bond for up to $1 billion this month.
Vanoli also said in the interview that Argentina’s dispute with the holdout owners of its defaulted debt will not likely be easily solved upon the expiration of a bond clause at the end of the year.
Argentina contends the so-called Rights Under First Offer, or RUFO, clause prohibits it from offering better terms to creditors who refused to take part in past debt restructurings.
“With respect to the RUFO clause … this idea has emerged that on January 2 everything will be fixed. And the answer is that on January 2 nothing is going to happen,” Vanoli was quoted saying in Pagina/12.
Vanoli said the hedge funds that have sued Argentina for full payment on its defaulted bonds must be more flexible with their demands.
By Scott O’Connell
17 October 2014
Gloria Casañas’s best-selling novel is based on a group of American teachers who traveled halfway across the globe to teach students in Argentina in the late 19th century.
Casañas, a native of the South American country, now can relate.
The author, lawyer and professor has made a similar trek this fall to Framingham State University, where she is currently serving as the school’s first visiting lecturer.
“In a way, I think I’m having the same experience those teachers had when they went to Argentina,” Casañas said, pointing out that similar to those educators, who had to learn Spanish after they arrived, she is adjusting to English, the weakest of her three languages.
While this is her first trip to Massachusetts, Casañas is familiar with Framingham State, however. One of the historical figures of her book, “La Maestra de la Laguna,” is based on is Jennie Howard, an 1866 graduate of the school who was part of the contingent of teachers invited by President Domingo Faustino Sarmiento to set up teacher schools like Framingham State in Argentina.
Their story is in many ways a significant part of Argentine history, said Emilce Cordeiro, another native of the country and chairwoman of Framingham State’s world languages department, where Casañas is teaching this semester.
“(Casañas) wanted to emphasize the kind of education system Argentina had because of these teachers,” she said. “It was the best in Latin America at the time.”
But despite having the support of Sarmiento, the teachers faced adversity in the form of the Catholic Church, which ran the country’s educational system at the time and wasn’t welcoming of a group of American Protestants, as well as a prevailing belief that women only needed to learn to cook and sew, Casañas said. They also did much of their work out in Argentina’s distant provinces – “they were sent to the middle of nowhere,” Cordeiro said.
Casañas didn’t have it quite so bad when she came to Framingham State in August. The school set up an on-campus apartment for her to live in, for example, and instead of having to build an entire network of teachers colleges, her main responsibilities as a visiting lecturer are to teach an undergraduate and graduate course – in her native Spanish – in the world languages department. Both classes focus primarily on the Argentine normal school movement featured in her book.
Planning lessons based on her novel has been a challenge, though, according to Casañas.
“It was very difficult” just doing research for the book, she said. “There wasn’t a lot of information about this specific topic.”
Cordeiro said university officials had been planning to invite a visiting lecturer for more than a year, and found Casañas to be a good inaugural candidate given her book’s subject matter and the university’s 175th anniversary this year as America’s first public normal school. Framingham State plans to invite more visiting lecturers over the next few years as part of a new emphasis on global education.
“The majority of students in our major, they want to be teachers, so they’re very interested in this idea, that a group of teachers from this area decided to do this trip,” Cordeiro said.
Casañas, who will be giving public presentations on campus about her novel and its historical subject matter on Oct. 23 and Oct. 29, has also enjoyed the experience so far.
“I think it’s going to be a shock to go back to Argentina,” she said. “I’m going to remember this as a dream.”


1 octubre, 2014
Sept. 21, 2014
3 min read
El 10 de febrero de 2011, un gigantesco C-17 Globemaster III de la Fuerza Aérea de los Estados Unidos (USAF) fue demorado en el aeropuerto de Ezeiza. El aparato, matrícula 77.187, traía armamento para prácticas de entrenamiento con la Policía Federal, ejercicios financiados por Washington de común acuerdo con la Argentina. El escandalete que armó el gobierno de Cristina Kirchner fue colosal, a la altura del voluminoso aparato. Avión de transporte estratégico rápido de tropas y suministros para realizar misiones de transporte táctico, evacuación médica, despliegue de tropas aerotransportadas y lanzamiento de paracaidistas, el C-17 Globemaster III puede proveer suministros tanto a bases operativas como a potenciales batallas. Forma parte de las aviaciones del Reino Unido, Australia, Canadá, la OTAN, Qatar, Emiratos Arabes Unidos y la India. Es un elefante aéreo de 53 metros de largo que puede transportar 134 soldados, evacuar 36 heridos en camillas y 54 pacientes ambulatorios, un carro de combate M1, tres blindados Stryker, seis blindados Guardian, una carga total de 77.519 kg. Los Estados Unidos no fletan tamaño coloso a un aeropuerto enemigo u hostil sin tomar recaudos y precauciones. Ese vuelo a Buenos Aires era para Washington “business as usual”, pero los responsables políticos de la cooperación en seguridad con la Argentina no contaban con el genio inigualable de Héctor Timerman.

El 12 de febrero de 2011, dos días después del aterrizaje y acordonamiento del Globemaster en Ezeiza, Timerman denunció que el aparato traía carga no declarada, que fue incautada, agregando que el caso estaba siendo investigado por la Justicia en lo penal económico. El Departamento de Estado le pidió “explicaciones” a Cristina Kirchner y no ocultó su fuerte malestar. La entonces secretaria de Estado de Barack Obama, Hillary Clinton, solicitó primero explicaciones formales al embajador argentino, Alfredo Chiaradía, y el 13 de febrero el subsecretario adjunto para la región, Arturo Valenzuela, y llamó a Timerman para expresarle la incomodidad de la Casa Blanca y “manifestarle nuestra sorpresa por la forma en que las autoridades [del gobierno argentino] manejaron una misión que estaba perfectamente acordada”. Sin mosquearse, Cristina Kirchner le ordenó a Timerman que denunciara a los EE. UU. por haber querido ingresar subrepticiamente en la Argentina “material camuflado dentro de un cargamento oficial, desde armas hasta diferentes drogas, entre otras, varias dosis de morfina”, además de “material para interceptar comunicaciones, varios GPS de una sofisticación reveladora de su potencia, elementos tecnológicos que contienen códigos caratulados como secretos y un baúl completo con drogas medicinales vencidas”. Valenzuela le comunicó a Timerman su preocupación “por la forma en que el gobierno argentino está manejando una cuestión sobre la que había perfecto entendimiento previo”. Washington reclamó “la inmediata devolución de todo el material” militar retenido. Timerman mantuvo la apuesta y escribió en Twitter que “todo el material declarado fue liberado sin dilaciones. Lo incautado no figuraba en la lista entregada por la embajada”, porque el avión norteamericano había violado las leyes argentinas, aun cuando para la Casa Blanca “el listado concordaba con lo informado previamente” y se trataba del “material habitual” para el entrenamiento policial que se había acordado.

Washington se quejó por la “lenta y detallada” pesquisa a la que fue sometido en Buenos Aires. “Tampoco entendemos por qué, si había alguna duda, no se la manejó por los canales diplomáticos habituales en vez de hacerlo de esta forma”, dijeron voceros del Departamento de Estado. Timerman pasó parte de ese día de verano en Ezeiza, abriendo cajas y ordenando forzar candados de la carga del avión. Acusó además al gobierno de Obama de enseñar “prácticas de tortura” en academias policiales.

En ese hoy remoto y sin embargo coherente episodio, había razones de peso para explicar el ataque de nacionalitis del kirchnerismo: se estaban anoticiando de que la Argentina no formaba parte de la primera gira regional del presidente Obama, que sí, en cambio, visitaría Brasil y Chile. Obama nunca ha tenido un encuentro bilateral con Cristina en la Casa Blanca y, por supuesto, no ha pisado ni pisará Buenos Aires hasta el fin de su mandato.

El 14 de junio de 2011, la Argentina retrocedió en pantuflas. A cuatro meses del encontronazo, el gobierno argentino decidió devolver a los Estados Unidos el material incautado en febrero de ese año. La decisión de devolver el material fue tomada por Cristina Kirchner y anunciada un día antes por la embajada norteamericana: “El incidente que involucró la retención de materiales propiedad del gobierno de Estados Unidos, relacionado con una actividad de entrenamiento conjunta previamente planeada y aprobada (destacado mío), que por fallas administrativas involuntarias debieron ser incautados, se ha resuelto satisfactoriamente. (…) Nos comprometemos a continuar trabajando con la Argentina en una asociación basada en el interés y respeto mutuos, como así también con valores y responsabilidad compartidos”. Consecuencias: desde que ocurrió el incidente se frenaron las negociaciones diplomáticas para que la Argentina fuera incluida en el programa Visa Waiver, que permite ingresar a los Estados Unidos sin necesidad de contar con visa.

Todo esto se repitió textualmente esta semana con la absurda protesta de Timerman contra el encargado de negocios de los EE.UU., Kevin Sullivan, que tuvo la osadía de recordar que la Argentina estaba en default y que le convenía salir de él. Despotricó Timerman y de inmediato ése fue el lenguaje del kirchnerismo: el gobierno de los Estados Unidos está aliado a los buitres, en contra de la acosada Argentina. Así las cosas, en 1946 como en 2014, una Argentina antigua y paranoica regurgita un patrioterismo penoso y, más importante, siniestramente perjudicial para sus propios intereses.

September 29, 2014
NEW YORK — A judge, calling civil contempt a rarity, ruled that Argentina was in contempt of court on Monday for its open defiance of his orders requiring that U.S. hedge funds holding Argentine bonds be paid the roughly $1.5 billion they are owed if the majority of the South American nation’s bondholders are paid interest on their bonds.
U.S. District Judge Thomas P. Griesa made the announcement after a lawyer for U.S. hedge funds led by billionaire hedge fund investor Paul Singer’s NML Capital Ltd. argued that Argentina has openly defied Griesa’s court orders for more than a year. The judge reserved decision on sanctions pending further proceedings.
“What we are talking about is proposals and changes and actions that come from the executive branch of the Republic of Argentina,” the judge said.
He said repeated efforts to avoid paying U.S. bondholders after their bonds — unlike more than 90 percent of outstanding Argentina bonds — were not traded for lesser-valued bonds in 2005 and 2010 was illegal conduct that could no longer be ignored.
“The republic in various ways has sought to avoid, to not attend to, almost to ignore this basic part of its financial obligations,” the judge said.
He said Argentina had recently taken steps to attempt to remove a New York bank as the custodian for bonds held by many of its bondholders and transfer the financial obligations to a new trustee based in Argentina.
New York-based lawyer Carmine Boccuzzi, representing Argentina, had argued that a contempt finding was premature, saying Argentina bondholders who accepted swaps for lesser-valued bonds after the country defaulted on $100 billion of debt in 2001 had not been paid interest, just as the judge intended.
Boccuzzi said the U.S. bondholders “want to punish Argentina. But that’s not appropriate.”
“The republic did act responsibly,” he said.
But he said paying the U.S. bondholders would require Argentina to pay about $20 billion to other bondholders who were not part of the litigation.
“We’re hamstrung,” he said.
As he left the courtroom, he declined to comment.
A lawyer for the U.S. bondholders, Robert Cohen, urged the judge to make the contempt finding and impose a $50,000 daily penalty on Argentina. He said penalties should be stiff enough that Argentina realizes it needs to change its behavior.
“It’s hard to imagine how it could get worse,” he said.
Before the hearing, lawyers for Argentina forwarded to the judge a letter sent to U.S. Secretary of State John Kerry saying the request for a contempt-of-court finding was “completely absurd.” Argentina said such an order would be unlawful by international standards.
The Argentine Foreign Ministry said the judge’s decision has no practical effect “besides providing new elements to the defamatory political and media campaign being carried out against Argentina by the vulture funds.” Argentine officials regularly refer to the U.S. hedge funds that didn’t swap their Argentine bonds at a discount as vultures.
By Carlos Alberto Montaner
29 September 2014
Who ever said that there is an unusual crisis in Argentina? It’s the same one, always.
Excessive public spending, galloping corruption, a patronage state, disregard for obligations, cronyism, inflation, lack of supplies, black market in dollars.
The official exchange rate is eight pesos to a dollar; the “blue dollar” rate, as it’s called, is 15. The forecast is that the gap will expand as uncertainty prolongs and panic spreads. Why is it that, every so often, as if it were some strange recurring curse, Argentina, despite its legendary natural wealth, plunges into chaos?
Many of us believe that the concentration of talent in this country is the greatest in the region. Argentines are the best educated and best informed Latin Americans. They had almost 80 splendid years, 1853-1930, a period in which they created a controlling and amazingly resistant middle class.
Nevertheless, amid ups and downs, the country, once one of the world’s most prosperous, began slowly to regress. In the 1980s, U.S. essayist Larry Harrison published a book titled Underdevelopment is a State of Mind. He stated — and, in my opinion, proved — that attaining prosperity or living in poverty was the result of the beliefs, attitudes and values held by people. Some cultures were predisposed to create wealth, others to destroy it.
Mariano Grondona, a renowned Argentine thinker, wrote a magnificent book, The Cultural Conditions of Economic Development, in which he studies this issue in depth. The Argentines — essentially a product of the fascist influence, incarnated in Juan Domingo Perón, a military attaché in Benito Mussolini’s Italy before he seized power and his country’s history — threw overboard the teachings of Juan Bautista Alberdi and Domingo F. Sarmiento, two liberal politicians and thinkers who lived in the second half of the 19th century, and replaced them with the Peronist creed.
They did not understand that prosperity and economic growth within liberal democracies were a consequence of the primacy of individual rights, limited government, the real separation of powers, respect for private property, the rule of law, well-functioning institutions, accountability on the part of the authorities, the existence of a market, meritocracy and a climate in which wealth was generated and preserved. (That, with some variants, is the behavior of the world’s 25 most prosperous countries.)
It was the republican model of government, and they dismantled it. Increasingly, the Argentines thought (and were influenced from everywhere with differing intensity — fascism, military nationalism, communism, Keynesianism) that directing the economy and distributing the wealth were functions of the state, without realizing that governments are tremendously inefficient and unfair, totally incapable of carrying out those tasks with a minimum of success.
Analyst Esteban Lijalad explained that to me, with some simple information culled from the periodical surveys that he does for an advertising company in Buenos Aires, the nation’s lungs and brain.
When Argentines are asked if they prefer the state to intervene in all sectors of the economy, 53 percent answer yes. When asked if it should intervene in some sector, the percentage drops to 35. Those who prefer no intervention in any sector account for 9 percent. Those who don’t know or decline to answer are very few.
The terrible experience of the entrepreneurial state matters not. (For example, one decade to obtain a telephone line, one thousand bribes to keep it working.) To most Argentines, private enterprise is wicked. To enrich oneself is censurable. Individuals are made suspicious by their selfishness.
The solution to all ills will come from the altruistic state, which will miraculously multiply and distribute the bread, the fish and the delicious malbec wine. What’s essential is not reality but ideology, distorted perceptions, and the assurances of a kind “philanthropic ogre” who dispenses favors to the needy.
On this occasion, I came to Argentina with Álvaro Vargas Llosa to present another book that we wrote with Plinio Apuleyo Mendoza, published by Planeta Books, precisely on this subject: Latest News from the New Ibero-American Idiot. It contains a juicy chapter on Argentina. It is the third installment of a saga that began almost 20 years ago with the Guide to the Perfect Latin-American Idiot.
It is clear that we are the idiots. We apparently cannot understand that the disease has no cure.
By Alexandra Stevenson
30 September 2014
For more than a year, Judge Thomas P. Griesa of Federal District Court in Manhattan has warned that Argentina would suffer repercussions if it defied his orders regarding payments to bondholders.
On Monday, the judge put some teeth behind those warnings, ruling the nation in contempt of court. He stopped short of issuing sanctions, however, saying he would make a decision on them in the future.
Speaking firmly, Judge Griesa indicated that the Republic of Argentina had gone a step too far in seeking to sidestep his injunction that forbids the government from paying only the bondholders it chooses.
”What has happened is the Republic, in various ways, has sought to avoid, to not attend to, almost to ignore this basic part of its financial obligations,” Judge Griesa said on Monday.
The ruling was another dramatic turn in a legal battle that has pitted President Cristina Fernández de Kirchner of Argentina against a group of hedge funds that are seeking more than $1.5 billion in payments on bonds that defaulted in 2001.
In a separate move that could increase the tension, the Argentine government sent a letter to Secretary of State John F. Kerry on Monday morning before the hearing, seeking to enlist his support and calling the actions by Judge Griesa ”excessive judicial harassment,” according to the embassy in Washington.
”A declaration of contempt would result in an unprecedented escalation in the conflict,” the letter, signed by the Argentine ambassador to the United States, said.
”We are in uncharted waters,” said Arturo C. Porzecanski, economist in residence at American University’s School of International Service. ”This makes official the fact that Argentina has been a rogue debtor for many many years and has been in contempt of many many judgments.”
The dispute stems from Argentina’s bond default in 2001. Most investors who held bonds then exchanged their defaulted bonds for new, discounted ones. But a group of hedge funds, led by the investor Paul E. Singer’s NML Capital, owns bonds that were never included in the exchange and instead took Argentina to court in an attempt to be paid full value for them, gaining the name ”holdouts.” Judge Griesa also ruled that banks handling bond payments could not pass Argentina’s money to the exchange bondholders without also paying the hedge funds, leading to the country’s second default in 13 years after it missed a payment on July 30.
Argentina denied it had defaulted again, arguing that it had deposited the $539 million interest payment with Bank of New York Mellon. Seeking to sidestep the court, Argentina last month pushed through its Congress legislation that gives foreign investors in its debt the ability to be paid in Argentina and to swap bonds covered by Judge Griesa’s injunction for new ones that are subject to local law.
Judge Griesa, who has called the move illegal in previous hearings, said on Monday that Argentina was effectively attempting to move all of the bond proceedings out of the United States and to Buenos Aires.
Under the new law, Argentina has replaced Bank of New York Mellon, the current trustee of bondholders, with a unit of the state-owned Banco de la Nación. Since missing the payment in July, Argentina has been defiant, calling Judge Griesa’s injunction ”erroneous and improper,” in a series of full-page newspaper ads. In August, it filed suit against the United States in the International Court of Justice, arguing that Judge Griesa’s ruling violated its sovereignty.
In a statement issued late Monday night, the Argentine government accused Judge Griesa of breaching international law and reasserted its intention to pursue its case against the United States in the international court.
”Griesa holds the sad record of being the first judge to declare a sovereign state in contempt of court for paying a debt, after failing in his attempt to obstruct Argentina´s external debt restructuring,” the statement said.
Simultaneously, some Argentine government officials have vilified both the hedge funds and the judge. Posters abound in the capital of Buenos Aires with images of Judge Griesa’s head on the body of a vulture.
On Monday, Carmine D. Boccuzzi Jr., a lawyer for Argentina, sought to play down these moves by the government, contending that they were merely acts of political gesture and rhetoric.
But Judge Griesa, who at one point grew so frustrated that he tapped his finger purposely, disputed Mr. Boccuzzi’s assertion and pointed to Argentina’s latest move to introduce legislation to bypass his order. ”It isn’t rhetoric. It seems to me there is a concrete proposal that would clearly violate the injunction,” he said.
Questioning why Argentina did not just make its payment to the group of hedge funds, Judge Griesa added, ”That’s the thing that is bothersome.”
After hearing both sides speak twice, Judge Griesa promptly issued his ruling. Observers will watch closely to see whether he imposes sanctions. His court has limited ability to enforce a sovereign nation to pay. Lawyers for the holdout hedge funds have suggested financial sanctions of $50,000 a day and have alluded to possible nonfinancial sanctions.
”It’s not the first country to be held in contempt,” said Henry Weisburg, a partner at the New York firm Shearman & Sterling, who is not involved in the case. But, he added, there is little historical precedent.
”It’s got a lot of moral opprobrium attached to it,” he added.
Argentina Finds Relentless Foe in Paul Singer’s Hedge Fund
This is a more complete version of the story than the one that appeared in print.
In Buenos Aires, posters of Judge Thomas Griesa with the message in Spanish, ”Sovereignty, or vulture swindle.”
4. ARGENTINA FOUND IN CONTEMPT (The Wall Street Journal)
By Nicole Hong
30 September 2014
A U.S. judge has declared Argentina in contempt of court, citing the country’s recent attempts to pay bondholders in defiance of his rulings.
U.S. District Judge Thomas Griesa made his decision in a hearing Monday, saying he would determine sanctions later. Argentina’s holdout creditors have asked Judge Griesa to impose a daily fine of $50,000 on the country and to order that Argentina pay some of the holdouts’ legal fees.
The contempt decision comes after the country has made several attempts to get around Judge Griesa’s series of rulings that say the country can’t pay its restructured bondholders until it pays the approximately $1.6 billion it owes holdout creditors.
Argentina recently passed legislation to switch the jurisdiction of its bonds governed by U.S. law to Argentina, which Judge Griesa has said is illegal and can’t be carried out. The country also is trying to remove Bank of New York Mellon Corp. as the trustee bank that processes payments and replace it with an Argentine bank, another move that triggered the contempt citation.
“[Argentina] has been and is now taking steps in an attempt to evade critical parts of” U.S. court orders, Judge Griesa said Monday at the federal courthouse in Manhattan. “There’s a very concrete proposal that would clearly violate the injunction.” Judge Griesa has jurisdiction in this case because Argentina in the 1990s borrowed money from foreign investors under the agreement that any disputes would be litigated in U.S. courts. Argentina defaulted in 2001 and has battled hedge funds that refused to accept debt exchanges in 2005 and 2010.
The holdouts have asked Judge Griesa to hold Argentina in contempt before. Most recently, Judge Griesa at a hearing in late August said Argentina’s debt-swap proposal was illegal but stopped short of holding the country in contempt, saying sanctions wouldn’t help Argentina and its holdout creditors reach a settlement.
In a letter to Secretary of State John Kerry dated Monday and signed by Argentina’s ambassador to the U.S., a potential contempt citation was referred to as a “legal absurdity.”
“A declaration of contempt would result in an unprecedented escalation in the conflict,” the letter said. “Indeed, such a declaration would not only affect the rights of third parties, but also further violate the sovereignty of the Argentine Republic.”
By Michelle Celarier
September 30, 2014
A Manhattan judge took the extreme and rare action of finding a sovereign nation — Argentina —in contempt of court on Monday.
Judge Thomas Griesa, acknowledging it was an unusual ruling, said ‘the court holds the Republic of Argentina is in civil contempt of court” because of the nation’s recent efforts to evade his earlier orders.
Argentina recently passed legislation allowing some bondholders to swap their US debt for Argentine law bonds that ostensibly avoided Griesa’s order to pay back $1.6 billion owed to hedge fund mogul Paul Singer and other creditors.
“Both [bondholder groups] have to be dealt with,” said Griesa.
The ruling was a big victory for the Singer group.
“This is an extreme sanction,” said Argentina’s lawyer, Carmine Boccuzzi of Cleary Gottlieb.
By John Paul Rathbone in London
September 30, 2014
Argentina’s holdout creditors won a symbolic victory on Monday night after a US judge found the country in contempt of court for taking “illegal” steps to avoid his orders.
US District Judge Thomas Griesa said Buenos Aires’s steps to replace Bank of New York Mellon as the trustee for its restructured sovereign debt with local state-owned bank, Banco de la Nacion Fideicomiso, are “illegal and cannot be carried out”.
Nonetheless, sources at Argentina’s central bank told Reuters that the country still planned to make a $200m payment on Tuesday to holders of its restructured bonds, in continued defiance of Judge Griesa’s orders.
Hector Timmerman, the Argentine foreign minister, said the court ruling was a “violation of international law.”
Argentina missed a July bond payment to holders of its restructured sovereign bonds after Judge Griesa ruled it could not be made unless Argentina also paid the holdout creditors in full on their defaulted debt. Argentina deposited $539m with BNY Mellon, but the bank, in compliance with Judge Griesa’s orders, did not pass it on to restructured bond holders
Argentina says it cannot pay the holdouts, led by NML Capital, a subsidiary of hedge fund Elliott Management, as doing so would trigger the so-called RUFO clause that forbids the sovereign to offer better terms to holders of its restructured bonds. The clause expires at the end of this year.
A contempt of court ruling on a sovereign government is rare but an not unprecedented move. Roberto Cohen, the lawyer for NML Associates which is leading the case, was quoted by the leading Argentine daily La Nación as saying: “We don’t believe it [the ruling] will make matters worse as it is hard to imagine how the situation could get worse.”
The holdouts have asked Judge Griesa to impose a daily fine of $50,000 – although Argentina could simply ignore that sanction, Mr Cohen acknowledged. Other steps potentially include barring Argentina from doing any business with US banks, although that could engender fresh litigation over whether Judge Griesa has the authority to do so.
Judge Griesa did not set a specific date to consider sanctions.
By Jude Webber in Cancún
September 29, 2014
Argentina’s YPF and Malaysia’s Petronas are negotiating a joint-venture with Mexico’s Pemex – possibly starting with shallow water fields – in a bid to become the first foreign oil companies to seize the opportunities of Mexico’s energy reform.
While executives from majors such as Shell, BG, Chevron and Occidental gathered in the Caribbean resort of Cancún last week for a conference on the historic liberalisation of the sector, the heads of the three companies were laying the foundations for a deal over private dinners, the golf course and on helicopter rides.
Emilio Lozoya, the man modernising Pemex, Mexico’s state firm, and Miguel Galuccio, who in his two years running YPF has defied Argentina’s gloom to attract investment and develop one of the biggest shale plays outside the US, go back years.
Their friendship was forged when Mr Galuccio headed up oil services group Schlumberger in Mexico and Mr Lozoya was in finance. But the two became closer when, in their current jobs, Mr Lozoya sought to broker a deal with Repsol, the Spanish company ejected from YPF when Argentina expropriated it in 2012.
The new ally is Shamsul Abbas, CEO of Malaysia’s Petronas, the world’s sixth biggest energy group by revenues. Petronas last year exited Venezuela but sees better bets in the region: in August, it inked a $550m shale deal with YPF, and is now hearing Mexico’s call, just as Pemex looks east.
In Cancún, the trio signed memorandums of understanding to foster co-operation, including on knowhow for deepwater, mature, heavy and extra-heavy crude fields, and, potentially, natural gas and infrastructure projects.
But the beachside business talk among the executives went deeper: the prospects for a full-blown partnership to invest in fields in Mexico.
“The idea is to seek which projects could make sense to develop jointly, the three of us,” Mr Galuccio told the Financial Times in the first explicit commitment by an oil company CEO in forging a joint-venture with Pemex. Other companies have so far limited themselves to expressions of enthusiasm tempered with caution until full details of the terms Mexico is offering are known.
Mexico is throwing open its energy sector to private investment after nearly 80 years of state monopoly and is betting on an influx of tens of billions of dollars in investment to boost Mexico’s stalled production.
The idea is to seek which projects could make sense to develop jointly, the three of us
– Miguel Galuccio, chief executive of YPF
Authorities will next year hold tenders for 169 fields and Mr Lozoya is also courting partners directly for a dozen joint-ventures.
“We believe there is significant potential and further upside for oil and gas resources in Mexico,” Mr Abbas said in an emailed response to questions. “We are excited by the energy reforms taking place, and coupled with our experience, we believe we will be able to add value to the country.”
Mr Abbas’ comments came shortly after he threatened to pull the plug on a $10bn liquefied natural gas investment in Canada, saying new taxes and competition from US shale gas projects could make it a non-starter. Cooperation with Pemex and YPF in Mexico would “provide a strategic platform to growth to complement and provide optionality to our North American resource base”, he said.
Mr Galuccio said the trio has the right skill set and could make a big impact in mature or shallow-water fields: Petronas is an offshore expert with deep-pockets; YPF’s “bread and butter” is to squeeze more from declining fields and it is also has shale skills; and Pemex is a shallow-water leader. Neither Mr Galuccio nor Mr Abbas would be drawn on potential investment levels. Mr Lozoya declined to comment.
“I’ve told Emilio he needs a fast success story,” Mr Galuccio said. “He can’t change the reality of Mexico’s production in three years but he has to . . . take three or four fields and turn them around . . . he needs a strong personal commitment”.
Mr Galuccio, who took the helm of YPF after the government’ shock expropriation, speaks from experience: Chevron’s investment has helped boost investment in the Vaca Muerta shale field, Loma Campana, which is now Argentina’s second-best producing field, to $3bn this year with more than 250 wells.
By Bob Van Voris
Sep 30, 2014
Argentina was found in civil contempt of court by a U.S. judge as it prepares to shift control over payments of its restructured debt from New York to Buenos Aires.
U.S. District Judge Thomas Griesa in Manhattan, who is overseeing lawsuits over bonds the South American nation repudiated in 2001, said yesterday that such a move is “illegal and cannot be carried out.” He said the plan violates his orders and the rights of defaulted bondholders, led by Paul Singer’s Elliott Management Corp.
Griesa said he will rule later on a penalty. Elliott Management’s NML Capital and other hedge funds that hold the defaulted bonds asked the judge to fine the country $50,000 a day until it complies.
The case stems from Argentina’s record $95 billion default in 2001, which roiled international markets and has since limited the government’s access to international credit.
Holders of about 92 percent of the repudiated debt agreed to take new bonds, at a discount of about 70 percent, in restructurings in 2005 and 2010. Some individual investors and hedge funds, including NML Capital, sued for full payment in New York, the forum selected by Argentina in the original bond agreements.
Carmine Boccuzzi, a lawyer for Argentina, declined to comment on Griesa’s decision.
State’s ‘Dignity’
Argentina argued against the contempt finding, claiming yesterday that it would undermine “the dignity of foreign states.”
“The decision by Judge Griesa has no practical effects beyond providing new elements in the defamation campaign being waged against Argentina by vulture funds,” the foreign ministry said in a statement after the ruling.
NML lawyer Robert Cohen argued that Argentina has disobeyed Griesa for at least a year by trying to set up a payment mechanism outside his jurisdiction.
Griesa ruled in 2012 that Argentina can’t make payments on its restructured debt as long as it continues to refuse to pay holders of the nation’s defaulted debt. The U.S. Court of Appeals in New York upheld the decision and it took effect after the U.S. Supreme Court declined to hear the case in June.
Griesa’s order triggered a default on Argentina’s performing debt when Bank of New York Mellon Corp., the bond trustee, refused to forward a $539 million payment on July 30.
Argentina responded by saying it’s removing the bank as trustee. Griesa yesterday cited Argentina’s attempt to drop Bank of New York as the latest violation of his orders in the case.
Argentina faces a deadline today to make a $200 million payment to holders of the bonds issued in the 2005 and 2010 restructurings. An official from Argentina’s monetary authority said it will deposit that amount in a state-run bank account tomorrow. It isn’t clear how investors will be able to collect the payments.
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).
By Erik Larson
Sep 29, 2014
Argentina told a U.S. judge that holding it in contempt for disobeying his orders in a bond-payment fight with hedge funds would violate international law.
A contempt ruling, sought by Paul Singer’s Elliott Management Corp. and other investment firms, would “undermine the dignity of foreign states” and should be denied by U.S. District Judge Thomas Griesa in Manhattan, Argentina said a filing today.
The bid for a contempt finding “is just another attempt to require the Republic to pay money –- here, more than $18 million a year to the district court –- unless and until the Republic pays plaintiffs full principal and interest on their defaulted debt, which it cannot do,” Argentina’s lawyers said.
The case stems from Argentina’s $95 billion default in 2001, which roiled international markets. Holders of about 92 percent of the repudiated debt agreed to take new bonds, at a discount of about 70 percent, in restructurings in 2005 and 2010. Some individual investors and hedge funds, including Elliott Management’s NML Capital, sued for full payment in the U.S., the forum selected by Argentina in the original bond agreements.
Griesa ruled in 2012 that Argentina can’t make payments on its restructured debt as long as it continues to refuse to pay holders of the defaulted debt. The U.S. Court of Appeals in New York upheld the decision, which took effect after the U.S. Supreme Court declined to hear the case in June.
Triggered Default
The judge’s order triggered a default on Argentina’s performing debt when the nation was blocked from making a $539 million payment on July 30.
NML argues Argentina should be held in contempt for failing to pay the defaulted debt.
Argentina said in today’s filing that such a finding would be contrary to the U.S. interpretation of the law, as stated in other lawsuits, in which the U.S. has said contempt sanctions against a foreign state “is legally improper.”
Griesa on Sept. 24 ordered Argentina to explain why it shouldn’t be held in contempt, as the hedge funds requested. The funds want Argentina to pay $50,000 a day if doesn’t comply with a court order within 10 days of a contempt ruling, according to court papers.
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).
By Joseph Ax, Hugh Bronstein, Nate Raymond and Richard Lough
29 September 2014
NEW YORK/BUENOS AIRES—Argentina said on Monday [Sept. 29] that any sanctions for contempt of court, leveled against it for refusing to pay U.S. hedge funds suing over defaulted debt, would be illegal under international law.
The hedge funds have asked a U.S. judge to order the country to pay $50,000 a day after the government enacted a new law to skirt a court ruling saying it must pay more than $1.3 billion in interest to U.S. investment funds known as “holdouts” after they rejected Argentina’s 2005 and 2010 bond restructurings.
“Contempt sanctions are moreover illegal under international law and practice, and undermine the dignity of a foreign state,” Argentina argued in a motion filed at the New York District Court ahead of a hearing on the request for sanctions set for 3 p.m. (1900 GMT) Monday.
It’s not clear whether any contempt order would have any practical impact on a populist government that regularly condemns the funds as “vultures” and has shown itself willing to defy Judge Thomas Griesa’s rulings.
Argentine Foreign Minister Hector Timerman said on Monday it would be “inconceivable” for Griesa to hold Argentina in contempt, calling the request from the funds “an act of desperation.”
Argentina defaulted for the second time in 12 years in July after no settlement was reached with the holdout creditors who acknowledge that the South American country is unlikely to pay any sanctions.
But the plaintiff bondholders, led by including Elliott Management’s NML Capital Ltd. and Aurelius Capital Management, have urged Griesa to consider additional unspecified non-monetary sanctions that could push the country to comply.
“If Argentina ignores a fine, and continues to violate the court’s orders, the court can then impose additional sanctions, including non-monetary sanctions that will further incentivize Argentina to comply with the injunctions,” the funds said in a filing last week.
Those sanctions might, for instance, include barring Argentina from doing business with U.S. banks, though such a ruling would likely engender fresh litigation over whether Griesa has the authority to do so.
Holding a foreign country in contempt is an unusual move, though not without precedent. But monetary fines are virtually impossible to enforce, as assets of foreign governments held within the United States are typically protected from seizure under the federal Foreign Sovereign Immunities Act.
Judge Griesa had previously chastised Argentina for taking steps to evade his orders but had stopped short of holding it in contempt. In August, he decided against holding Argentina in contempt even while declaring the then-proposed legislation “illegal.”
NML and Aurelius renewed their request for a contempt finding last week, citing the passage of the law, which allows for a swap of previously exchanged debt for bonds payable in Argentina under its local laws.
The legislation also allowed for the replacement of Bank of New York Mellon Corp. as trustee for some of the exchange bonds, after the judge blocked it from processing a $539 million interest payment that Argentina had deposited with the bank in June.
29 September 2014
BUENOS AIRES, Sept 29 (Reuters) – Argentina will deposit the next interest payment due on its restructured debt with a domestic bank on Tuesday, a source at the central bank said, defying a U.S. court that blocked such payments until the country compensated U.S. hedge funds suing over unpaid bonds.
The country fell into default again in July after the U.S. judge overseeing its decade-long court battle with the funds – known as “holdouts” – froze a June coupon payment on Argentine foreign law bonds once it reached a U.S. intermediary bank.
Tuesday’s payment of at least $200 million will instead be deposited at local state-run Banco de la Nacion Fideicomiso to keep the money beyond the reach of District Judge Thomas Griesa.
“The deposit will be made tomorrow, which is the date the coupon payment is due,” said the source at the central bank.
Latin America’s No. 3 economy has enacted legislation to skirt Griesa’s rulings barring it from servicing debt restructured after its record default on $100 billion in 2002 until it settles with the holdouts who spurned the bond swaps.
Griesa has ordered Argentina pay the funds, led by Elliott Management Corp’s NML Capital Ltd and Aurelius Capital Management, $1.3 billion plus accrued interest.
Argentina says the ruling is impossible to fulfill.
President Cristina Fernandez, who calls the holdout hedge funds “vultures,” has removed Bank of New York Mellon Corp as trustee, and offered to swap foreign law bonds for notes governed by local law.
The news that Argentina would make the deposit on Tuesday came as Griesa held the country in contempt for violating his rulings.
By Charles Newbery
29 September 2014
Argentina this week faces its first service payment on U.S.-law bonds since falling into default in July, with concerns of a new failure to pay pushing up demand for dollars at home.
The government must pay $200 million on Par bonds Tuesday. But a U.S. court order has made it impossible for the country to service the restructured bonds from the 2001 default on $100 billion without also paying some holders of bonds still in arrears, even though the government has the funds and is willing to pay.
These holdout creditors, who opted out of two restructuring deals, won a lawsuit to collect full repayment on their bonds, far more than the 30 cents on the dollar paid to the 92.4% of creditors in 2005 and 2010 restructuring deals. The ruling prevented the distribution of a $539 million payment on U.S.-law bonds in July, and could also prevent another payment at the end of the year.
The possibility of making the payment depends on whether the U.S. District Court Judge Thomas Griesa grants a stay on his order as requested by Argentina and already refused several times.
Citigroup, a paying agent for some of the Argentine bonds, has said it would seek such a stay.
Griesa has called in Argentina to appear in his court Monday for a contempt hearing given its refusal to pay the plaintiff creditors the $1.5 billion owed them based on his ruling. Argentina has said it would only pay them the same rate as that paid in the restructurings, and it has taken the case to international arenas including the United Nations.
President Cristina Fernandez de Kirchner wants to avoid paying any more to the plaintiffs and other creditors who held out of the restructurings on fear that it would trigger more lawsuits. The government cannot pay more to any of the holdouts without doing the same for the 92.4% who participated in the restructuring deals, a bill CFK says could surpass $120 billion.
The plaintiff creditors, among them U.S. billionaire Paul Singer, want Griesa to hold Argentina in contempt of his order and fine the country $50,000 per day.
The default has led to slower economic growth in Argentina, with consumers and companies pulling back on spending. The government, however, has not cut public spending, pushing the fiscal accounts deeper into deficit.
To finance the deficit, now at more than 5% of GDP, the government is printing more pesos, leading to more inflation, with private estimates putting it at 40% annual compared with an average of 25% a year between 2010 and 2013.
At the same time, people are buying dollars as a refuge for their savings. This demand pushed the peso to a record low of 16 per dollar last week for a 90% gap with the 8.43 rate on the official market.
To ease the pressure on the peso and inflation, the central bank has been raising interest rates and ordering banks to reduce their dollar holdings.
And the government last week sold 10 billion pesos ($1.2 billion) in two-year notes on the local market to help reduce the deficit.The notes were sold at Badlar, the interest rate for large 30-day deposits, plus 3.85%. With Badlar running at 20.125%, that puts the interest on the notes at 24% annual, or less than inflation.
The debt sale helped reduce the supply of pesos in the market, easing demand for dollars to rein in the black-market rate to 15.80.
However, economists say while the debt sale helps reduce peso supplies, it is not enough to turn around the trend to flee into dollars, and as the government feels the need to print more pesos, pressure on the exchange rate will continue.
The government will report August supermarket and shopping mall sales Monday followed the next day by industrial production, construction activity and consumption of public services for the same period.
By Brian Lawson
29 September 2014
As forecast in our latest Capital Markets Review, New York district judge Thomas Griesa granted Argentina an exemption from his blocking order on international debt on 26 September (see World: 26 September 2014: Capital Markets Weekly: Initial signs of saturation emerge as markets absorb heavy supply including major acquisition financings). This permits CitibankArgentina to pay USD5 million of interest due on 30 September on outstanding Argentine debt issued under domestic law and payable in Buenos Aires. This interim ruling avoids forcing these instruments into default. A definitive ruling is expected after a 30-day interval. Griesa stated that he did not want questions to arise each time payments become due on local-law bonds. Argentina’s Ministry of Economy criticised Griesa for failing to make a definitive ruling, arguing that he had twice recognised that the local-law bonds were domestic debt.
Instead, within the 30-day period, Citibank and Argentina are required to clarify the history and ownership of the existing domestic-law bonds. They must show whether they were only offered domestically and are owned just by local Argentine investors, or if they were marketed or sold internationally.
Significance: Press reports attributed the delay to arguments from the hold-out plaintiffs. These introduced criteria limiting potential future exemption to bonds marketed domestically in Argentina and owned by domestic investors. Such criteria would establish tight guidelines that preclude exemption for bonds marketed or owned internationally. This reduces the risk of setting a precedent exempting newly created domestic-law securities payable in Buenos Aires, which Argentina plans to offer to international bondholders in exchange for their current securities. Griesa has been clear in the past that such new instruments would be viewed as designed to breach his court rulings, and may impose penalties for non-compliance with these in the near future. Overall, the interim ruling avoids an additional default for the time being. However, it seeks to avoid opening a window easing the payment blockage on its internationally owned obligations. A further USD171 million bond interest payment due on 30 September will be caught by this, pushing an additional Argentine international bond into non-payment (without representing a new default).
By Charles Newbery
29 September 2014
Buenos Aires (Platts)–29Sep2014/1129 am EDT/1529 GMT  Argentina’s Senate will start Tuesday a committee review of a government-drafted reform of the hydrocarbon sector aimed at spurring development of large shale resources after a decade-long decline in conventional oil and natural gas output.
The Senate said in a statement Monday that the bill will go before three commissions — budget and treasury; constitutional affairs; and mining, energy and fuels.
The committee review is expected to run through Thursday before the bill can be approved for floor debate as soon as October 8.
The committees are expected to call in speakers, from government officials to governors of oil-producing provinces as well as Miguel Galuccio, the CEO of state-run YPF and a main proponent of the bill.
The initiative is expected to get approval given that the ruling Front for Victory party has majorities in both houses.
The reforms are designed to even out tax rates on exploration and production, scrap some taxes, extend field licenses, provide fiscal incentives and nationalize the tender process for bidding rounds.
YPF and other oil companies have come out in favor of the bill, including a proposal to allow 35-year licenses for shale development, up from a current 25 years, the proposed life for conventional fields. Offshore licenses will run for 30 years, and all licenses will be eligible for 10-year extensions as long as developers meet investment targets.
Oil companies, too, will be allowed to export up to 20% of their production from approved projects without paying the 33% withholding tax after the fifth year.
Argentina lost its energy autonomy in the early 2000s as maturing reserves, limited exploration and few finds led to a decline of more than 20% in oil and gas production over the past decade. This has led to a surge in energy imports to meet demand, led by diesel, fuel oil and gas — and, from this year, crude.
The government expects the reforms will encourage companies to invest in developing shale resources, estimated by the US Energy Information Administration as among the world’s largest.
YPF is the first to put the shale resources into production, now averaging 25,000 b/d of oil equivalent. It is working on the project with Chevron, while other majors like ExxonMobil and Shell are in the exploration phase. Malaysia’s Petronas recently entered a partnership with YPF in which it will invest $550 million over the next three years to develop shale oil.
By Stephanie Brinley
29 September 2014
The second round of the Argentine government’s subsidised financing programme has kicked off, but with fewer cars and automakers participating.
IHS Automotive perspective
The Argentine government has deemed the first round of its special credit programme, ProCreAuto I, to be a success and implemented a second round. The programme makes special financing available on a very specific list of domestically-produced vehicles.
Production and sales have continued to decline in Argentina on a devaluing peso, increased taxes, tightened credit, and higher vehicle prices. The government is looking to create sales demand, while preventing layoffs and temporary plant shutdowns. Previous programmes have met with limited success. The government credits the programme with generating 21,500 vehicle sales and reducing the number of workers who were laid off. There are fewer cars available in the second phase of the programme, in part because General Motors (GM), Fiat, and Honda have all opted out, saying they cannot meet the current demand and backlog from the first programme.
IHS Automotive forecasts Argentina’s 2014 sales will end up at about 635,000 units, though the programme appeared to have lifted sales during the first three months it was in place. The lift isn’t enough to recover to last year’s sales, but it does appear sales might have been worse without it. Phase II will operate through 10 January 2015 and is not likely to increase sales dramatically – in part because currency issues are holding back vehicle production, and there may not be enough inventory.
An Argentine government programme that delivered special credit lines from June to 24 September 2014 has been deemed a success and extended through to 10 January 2015, with a change in the applicable models. The government claims the programme sold 21,800 units, and contributed to a reduction in worker layoffs and production slowdowns. A second phase began on 25 September 2014 and will run through 10 January 2015. The programme sets the price that consumers will pay for the vehicle, and enables non-collateralised loans at 4% lower than usual interest rates for loan amounts below ARS120,000. The second phase applies to only 24 models, with Fiat, GM, and Honda opting out; Volkswagen (VW), PSA, Renault, and Ford are all participating.
Eligible for ProCreAuto II
Nameplate         Model                                Price (ARS, USD)
Ford Ranger       RC 2.2L TDCI XL Safety 4×2           258,311
Ranger            RC 2.2L TDCI XL Safety 4×4           299,560
Peugeot 308       Allure 1.6 N                         208,000
Peugeot 308       Allure 1.6 NAV                       216,000
Peugeot 308       Allure HDI NAV                       232,000
Peugeot 408       Allure + 2.0 NAV                     237,000
Citroën C4        Lounge Tendance Pack                 239,000
Renault Clio Mio  5P Confort ABS ABCP                  110,450
Renault Clio Mio  5P Confort Plus ABS ABCP             114,450
Renault Fluence   1.6 16V Confort Plus                 177,400
Renault Fluence   Dynamique 2.0                        196,000
Renault Fluence   Luxe 2.0                             211,600
Renault Fluence   2.0 16V Luxe Rlink                   214,900
Renault Fluence   2.0 16V Luxe Rlink Cuir              222,300
Renault Fluence   Privilege 2.0                        236,700
Renault Fluence   2.0 16V Privilege                    238,300
Toyota Hilux      4×2 Cabina Simple DX PACK 2.5 TDI    235,400
Volkswagen Amarok 2.0 TDI 4×2 Cabina Simple Start Line 235,400
Volkswagen Suran  1.6 Trendline                        171,686
Volkswagen Suran  1.6 Trendline Limited Edition        176,830
Volkswagen Suran  1.6 Highline                         176,647
Volkswagen Suran  1.6 Trendline Limited Edition        176,830
Volkswagen Suran  1.6 Highline I-Motion                187,314
Volkswagen Suran  1.6 Cross Highline                   190,370
Similar to the first phase, the National Bank will finance up to 90% of a new vehicle, with a loan cap of ARS120,000, at a subsidised interest rate; according to several media reports, the rate is 17% for customers of the bank and 19.2% for non-customers, a 4% reduction. The maximum loan term is 60 months, and payments cannot exceed 30% of the borrower’s salary. However, there are also reports that some entry-level vehicles qualify for 9.99% financing on a 48-month loan through the same programme.
The list of approved vehicles is smaller than the first phase. The programme also sets the price at which automakers can charge for the participating vehicles. While the cap on the vehicle loan amount has not changed with the second phase, the price of several available models has increased. Some reports indicate there may be reprisals from the government for non-participating automakers. GM’s July announcement of a USD740-million investment in Argentina could mitigate its situation, but other companies have said they are not participating because they are having difficulty building enough vehicles to meet the demand – not because demand is higher than production capacity, but because automakers are finding it difficult to get the components they need to build the cars.
In presenting the updated programme, Minister of Industry Debora Giorgi said the first phase was a success. She noted that the National Bank approved 21,800 applications, with 7,500 pending, and 15,300 of the new vehicles having been delivered, while the bank has awarded ARS3 billion in loans so far. Giorgi says that for the models included, sales in July 2014 increased 12% versus 16% declines earlier in the year.
Outlook and implications
The programme is not without controversy, with some effects limited by companies’ inability to source US currency with which to pay suppliers. Without the ability to buy components, some OEMs are not able to build as quickly as they would like to, making the government a bigger obstacle in the process than the automakers or the consumer.
Over the three months of the first programme, sales reached about 165,000 units for an average 55,000-unit month, suggesting that the programme lifted sales beyond the 21,800 target. While this number is still a decline compared to 2013, it is a better performance than the market was forecast to deliver. IHS Automotive is holding its 2014 sales forecast at 635,000 units for the moment. If sales were to continue at this pace for the rest of the year, sales could reach 670,000 units by year-end. However, if automakers can’t get the foreign currency to buy the components, the market will be constrained. At the end of August 2014, inventory had fallen to 83,000 units between OEMs and dealers, according to Guido Vildozo, IHS manager of Latin American light vehicle sales forecasts. At that level of supply, and with GM and Renault having suspended imports to Argentina from Brazil, there may simply not be enough inventory during the last quarter of the year (see Argentina: 12 September 2014: ; 30 September 2013: ; and 2 September 2014: ).
It is also not clear if the programme is increasing sales or changing the purchase decisions by servicing buyers who intended to buy a car and might have selected something different. The programme fixes prices for the vehicles included, but automakers previously objected that the prices were too low for them to recoup rising costs. That is somewhat addressed with the increases, but as the peso devalues, there is still a risk of costs increasing higher than the programme will allow dealers to charge. Despite the implementation of the first phase, sales still fell 42.5% in August 2014 and are down 35.0% for through the end of August. Production declined 34.5% in August and is down 24.8% year to date (see Argentina: 5 September 2014: ). All of the vehicles that qualify for the programme are built in Argentina.
Consumers complained that some dealers were charging higher fees for the participating vehicles and that availability of the models was constrained. With the second phase, several of the vehicles on the list have had their prices increased, while the government said it has homogenised expenses related to licensing, freight, etc, to determine how much each region should pay, and to be sure customers know the price of the car and final costs, as well as to enable them to report discrepancies. The government said that dealers who do not respect the prices set by the plan will be sanctioned.
As Argentina is controlling its supply of foreign currency, which automakers need to pay their foreign suppliers, some reports say the government has indicated that those companies that do not participate may face a more difficult time getting access to US dollars (see Argentina: 15 September 2014: ). Whether the situation plays out in this manner remains to be seen.
According to the IHS Automotive production forecast, of the light-vehicle manufacturers in Argentina, only Ford (up 6.2%), Toyota (up 2.9%), and Mercedes-Benz (up 12.5%) will see production increases in 2014. While there are 24 specific models available through ProCreAuto, there are only nine nameplates involved. In 2013, these nine accounted for 165,101 units sold, counting all variations offered, for 17.9% of the total market; we forecast volume to drop to about 120,000 units in 2014 (18.9% of the market) and 100,100 units (17.1% of the market) in 2015. With increasing market share, the programme may be encouraging sales of the specific models included above the depressed demand within the market.
By Fabiana Frayssinet
29 September 2014
BUENOS AIRES, Sep. 25, 2014 (IPS/GIN) – In most Latin American countries schools now provide sex education, but with a focus that is generally restricted to the prevention of sexually transmitted diseases – an approach that has not brought about significant modifications in the behaviour of adolescents, especially among the poor.
The international community made the commitment to offer comprehensive sexuality education (CSE) during the 1994 International Conference on Population and Development in Cairo.
“Although some advances have been made in the inclusion of sexual and reproductive education in school curriculums in Latin America and the Caribbean, we have found that not all countries or their different jurisdictions have managed to fully incorporate these concepts in classroom activities,” Elba Núñez, the coordinator of the Latin American and Caribbean Committee for the Defence of Women’s Rights (CLADEM), told IPS.
The 2010 CLADEM study ‘Systematisation of sexuality education in Latin America’ reports that Argentina, Brazil, Colombia, Mexico and Uruguay are the countries that have come the closest to the concept of comprehensive sex education, and they are also the countries that have passed legislation in that respect.
Others, like Chile, Costa Rica, El Salvador, Guatemala and Peru, continue to focus on abstinence and birth control methods, while emphasising spiritual aspects of sexuality, the importance of the family, and the need to delay the start of sexual activity.
But programmes in the region still generally have problems “with respect to the enjoyment and exercise of this right,” especially among ethnic minorities and rural populations, said Núñez from Paraguay.
Countries such as Argentina, Brazil and Mexico have also run into difficulties in implementing sex education programmes outside the main cities.
These shortcomings are part of the reason that Latin America is the region with the second highest teen pregnancy rate – 38 percent of girls and women get pregnant before the age of 20 – after sub-Saharan Africa, as well as a steep school dropout rate.
In Argentina, a law on comprehensive sex education, which created a National Programme of Comprehensive Sex Education, was approved in 2006.
Ana Lía Kornblit, a researcher at the Gino Germani Research Institute, described the programme as “an important achievement because it makes it possible to exercise a right that didn’t previously exist.”
But in some provinces the teaching material, “which is high quality, is not used on the argument that [schools] do not agree with some of the content and they plan to design material in line with local cultural and religious values,” she said.
“Children can see everything on TV or the Internet, but in school it isn’t talked about for fear of encouraging them to have sex,” Mabel Bianco, president of the Foundation for the Education and Study of Women (FEIM), told IPS.
“But in the media everything is eroticised, which incites them to engage in sexual behaviour. And the worst thing is they don’t have the tools to resist the pressure from their peers and from society to become sexually active,” she said. “CSE would enable them to say no to sexual relations that they don’t want to have.”
Lourdes Ramírez, 18, just finished her secondary studies at a public school in Mendiolaza in the central Argentine province of Córdoba. She told IPS that in her school, many parents of students in the first years of high school “kick up a fuss” when sex education classes are given “because they say their kids are young and those classes will make them start having sex sooner.”
“It’s absurd that you see everything on TV, programmes with girls in tiny thongs, but then in school they can’t teach how to use a condom or that people should only have sex when they really want to,” Ramírez said.
In her school, the Education Ministry textbooks and materials arrived, but they were not distributed to the students “and were only kept in the library, for people to come and look at.”
Carmen Dueñas, a high school biology teacher in Berazategui, 23 km southeast of Buenos Aires, said it was surprising that even when available birth control methods are explained to the students, “many girls want to get pregnant anyway.”
“They think that when they get pregnant they will have someone to love, that they’ll have a role to play in life if they have a family of their own,” said the teacher, who forms part of a municipal-national CSE project.
“There are conflicts and violence in a significant proportion of families, and teenagers don’t feel they have support; families are torn apart, and there is domestic abuse, violence, alcohol and drug use,” said Marité Gowland, a specialist in preschool education in Florencio Varela, 38 km from the Argentine capital.
“All of this leads to adolescents falling into the same cycle, and it is difficult for them to put into practice what they learn in school,” she said. “Many schools provide the possibility for kids to talk about their problems, but the school alone can’t solve them.”
A project in Berazategui is aimed at breaking the mold. Students are shown a film where a girl gets pregnant when she is sexually abused by her stepfather, but manages to stay in school after talking to her teacher.
“We chose this scenario because sometimes we have clues that there are cases like this in our schools,” Dueñas said.
Through games, the project teaches students how to use condoms. In addition, students can place anonymous questions in a box. “There are girls who comment that although they haven’t even gotten their first period, they have sex, because they have older boyfriends. Then the group discusses the case,” Dueñas said, to illustrate how the project works.
Another member of CLADEM, Zobeyda Cepeda from the Dominican Republic, said that what prevails in most of the region is a “biological approach, or a religious focus, looking at sexuality only as part of marriage.”
Until the focus shifts to a rights-based approach, experts say, Latin America will not meet its international obligations to ensure that “every pregnancy is wanted […] and every young person’s potential is fulfilled.”
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