Home » Posts tagged 'South America'
Tag Archives: South America
Did you know that the drought in Brazil is so bad that some neighborhoods are only being allowed to get water once every three days? At this point, 142 Brazilian cities are rationing water and there does not appear to be much hope that this crippling drought is going to end any time soon. Unfortunately, most Americans seem to be absolutely clueless about all of this. In response to my recent article about how the unprecedented drought that is plaguing California right now could affect our food supply, one individual left a comment stating “if Califirnia can’t supply South America will. We got NAFTA.” Apart from the fact that this person could not even spell “California” correctly, we also see a complete ignorance of what is going on in the rest of the planet. The truth is that the largest country in South America (Brazil) is also experiencing an absolutely devastating drought at the moment. They are going to have a very hard time just taking care of their own people for the foreseeable future.
And this horrendous drought in Brazil could potentially have a huge impact on the total global food supply. As a recent RT article detailed, Brazil is the leading exporter in the world in a number of very important food categories…
Over 140 Brazilian cities have been pushed to ration water during the worst drought on record, according to a survey conducted by the country’s leading newspaper. Some neighborhoods only receive water once every three days.
Water is being rationed to nearly 6 million people living in a total of 142 cities across 11 states in Brazil, the world’s leading exporter of soybeans, coffee, orange juice, sugar and beef. Water supply companies told the Folha de S. Paulo newspaper that the country’s reservoirs, rivers and streams are the driest they have been in 20 years. A record heat wave could raise energy prices and damage crops.
Some neighborhoods in the city of Itu in Sao Paulo state (which accounts for one-quarter of Brazil’s population and one-third of its GDP), only receive water once every three days, for a total of 13 hours.
Are you starting to see what I mean?
This is serious.
B. Lynn Ingram, a paleoclimatologist at the University of California at Berkeley, thinks that California needs to brace itself for a megadrought—one that could last for 200 years or more.
As a paleoclimatologist, Ingram takes the long view, examining tree rings and microorganisms in ocean sediment to identify temperatures and dry periods of the past millennium. Her work suggests that droughts are nothing new to California.
A drought of even 10 years would absolutely cripple this nation. Already, the size of the total U.S. cattle herd is the smallest that it has been in 63 years and California farmers are going to let half a million acres sit idle this year because of the extremely dry conditions. If this drought persists for several more years we will have an unprecedented crisis on our hands.
Unfortunately, there are signs that this current drought in California may be part of a larger trend. I had never heard of “the Pacific Decadal Oscillation” before this week, but apparently it is a phenomenon that can cause droughts that last “for decades“…
Ingram and other paleoclimatologists have correlated several historic megadroughts with a shift in the surface temperature of the Pacific Ocean that occurs every 20 to 30 years—something called the Pacific Decadal Oscillation (PDO). The PDO is similar to an El Nino event except it lasts for decades—as its name implies—whereas an El Nino event lasts 6 to 18 months. Cool phases of the PDO result in less precipitation because cooler sea temperatures bump the jet stream north, which in turn pushes off storms that would otherwise provide rain and snow to California. Ingram says entire lakes dried up in California following a cool phase of the PDO several thousand years ago.
And of course it isn’t just the western half of the country that is struggling with water supply problems. In the Southeast, water has been a major political issue for quite some time…
The drought-parched states of Georgia, Alabama and Florida are back at it — fighting for a slice of water rights in a decades-long water war that’s left all three thirsty for more.
The 24-year dispute is emblematic of an increasingly common economic problem facing cities and states across the country – the demand for water quickly outpacing the supply as spikes in population soak up resources.
Most of us that live in the United States are accustomed to having seemingly inexhaustible supplies of fresh water. We use more fresh water per capita than anyone else on the planet, and most of us never even think twice about it.
Unfortunately, things are changing. We are on the precipice of a great water crisis, and many Americans are going to be in for a very rude awakening.
And the frightening thing is that the U.S. is actually in much better shape than most of the rest of the world is when it comes to supplies of fresh water. In some areas of the globe, a “water crisis” is already a daily reality.
We have heard that someday water is going to become the “new oil”, and we are starting to get to that point. Life is simply not possible without water, and as global supplies of clean, fresh water dwindle it is inevitable that it is going to cause global tensions to rise.
So what do you think the solutions to these problems are?
SAO PAULO (AP) – More than 140 cities are rationing water amid the worst drought to hit Brazil in decades, according to a survey conducted by the country’s leading newspaper.
The Folha de S. Paulo newspaper wrote Saturday that water is being rationed to close to six million people living in 142 cities in 11 states.
The newspaper quoted water supply companies saying reservoirs, rivers and streams are the driest they’ve been in 20 years.
Some neighborhoods in the city of Itu in Sao Paulo state only receive water for 13 hours, once every three days.
Water consumption normally grows by up to 20 percent during the Southern Hemisphere’s summer. But this year, consumption has risen by up to 30 percent due to a prolonged heat wave affecting several states.
The Cantareira water system, the largest of six that provide water to some 9 million of the 20 million people living in the metropolitan area of Sao Paulo city, is at less than 19 percent of its capacity of 1 trillion liters (264 billion gallons), water utility Sabesp said Saturday on its website.
Sabesp described the situation at Cantareira as “critical” because the amount of rain registered between December 2013 and January 2014 was the lowest in 84 years.
Sabesp said the other five water supply systems in Sao Paulo’s metropolitan area were normal for this time of year.
The PCJ Consorcio water association said the area would have to see 17 millimeters of rain a day for two months until Cantareira’s water level grows to 50 percent of its capacity.
For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.
It was all of them combined.
At one point last month, the 37-year-old shop owner refused to open the metal shutters protecting her corner grocery in downtown Buenos Aires more than a few inches — just enough to sell soda to passersby on a sweltering summer day.
“It was scary,” said Kanaza as she yelled out prices to customers while sipping on mate, Argentina’s caffeine-rich herbal drink. The looting that began in neighboring Cordoba province when police officers left streets unguarded to strike for higher pay had spread to the outskirts of Buenos Aires, sparking panic in Kanaza’s neighborhood. The chaos, she said, was like nothing she had seen since the rioting that followed the South American nation’s record $95 billion default in 2001.
Thirteen years after that collapse, President Cristina Fernandez de Kirchner is running out of time to avert another crisis. The policy mix that Fernandez and her late husband and predecessor, Nestor Kirchner, used to usher in 7 percent average annual growth over the past decade — higher government spending financed by printing money — is unraveling.
Inflation soared to 28 percent last year, according to opposition lawmaker Patricia Bullrich, who divulges monthly estimates for economists cowed into silence by Fernandez’s crackdown on price reports that clash with official figures. By the government’s count, inflation was less than 11 percent.
The peso sank 3.5 percent to a record low of 7.14 per dollar yesterday, according to Banco de la Nacion Argentina, and has plunged more than 25 percent in the past 12 months. That’s its worst selloff since the devaluation that followed the default. Currencies from only three countries in the world have fallen more: war-torn Syria, Iran and Venezuela.
Power outages like the one that sunk Kanaza’s shop into darkness are becoming more frequent, deepening the economic slump, after the nation’s grid atrophied under a decade of government-set electricity price controls. The International Monetary Fund, which censured Argentina last year for misreporting inflation, predicts economic growth will slow to 2.8 percent this year, about half the 5.1 percent average across developing nations.
Fernandez’s biggest financial problem is the loss of foreign reserves. They’ve tumbled 44 percent in the past three years to $29.5 billion as prices on the country’s soy and wheat exports slumped and Argentines circumvented currency controls created to keep dollars onshore. The government sought to stiffen those restrictions again yesterday, limiting people to two online purchases a year from overseas providers.
For a country that remains locked out of international debt markets as it haggles with billionaire hedge fund manager Paul Singer over lawsuits stemming from the default, the reserves are its main source of dollars to pay holders of $30 billion of bonds who accepted restructuring terms. When other foreign-currency obligations are included, the amount owed swells to $50 billion.
Investors are bracing for the possibility of another default. The country’s average dollar bond yield of 12 percent is the highest among major developing nations after Venezuela. Trading in swap contracts that insure bonds shows investors see a 79 percent probability of a halt in payments over the next five years, a reflection in part of concern that Singer’s demand of full repayment on the securities he kept from the 2001 default will disrupt debt servicing.
“We’re seeing some sort of day of reckoning,” said Diego Ferro, co-chief investment officer in New York at Greylock Capital Management, which has been investing in the country’s debt since the 1990s. “The adjustment will have to happen if Argentina doesn’t want to hit a wall before 2015.”
Fernandez, 60, has overhauled her cabinet and reworked some policies in a bid to stem the capital flight. In her first day back on the job in November following surgery to remove a blood clot near her brain, she replaced the economy minister, cabinet chief, agriculture minister and central bank president. A day later, Guillermo Moreno, the trade secretary who played the strongman enforcing price controls, was gone.
The new cabinet pledged to work with the IMF to improve data, began talks to settle $6.5 billion of overdue debt with Paris Club creditor nations and unveiled plans to compensate Spain’s Repsol SA for the seizure of its local oil unit in 2012. Bonds advanced, driving yields on the country’s benchmark securities to a one-year low of 11.07 percent on Nov. 29.
Ferro doubts the measures are enough. Bolder steps, such as reaching a deal with Singer to regain access to overseas markets and lifting currency controls, are needed to regain investor confidence, he said. The bond rally began to falter in early December. By mid-month, all the gains had been erased.
An Economy Ministry spokeswoman didn’t return telephone calls seeking comment on the government’s financing plans.
Fernandez is giving no indication of what her next move is. After re-appearing following the five-week absence for surgery, she vanished again, spending much of December holed up in her 5,600-square-foot (520 square meters) brick villa in Patagonia. She went another five weeks without making a public appearance before unveiling a new student aid program before supporters in the presidential palace last night.
And that’s perhaps what angers Argentines like Miguel Llanes the most. While the looting spread across the country from Cordoba and the blackouts dragged on day after day in the capital city, Fernandez was nowhere to be seen. Llanes, unable to open his curtain shop in downtown Buenos Aires for over a week, vented by joining protesters who were burning tires and garbage in the streets.
“Where was the president?” he shouts.
And then he raises a question that holders of $50 billion of Argentine bonds are dying to know.
“How long will this last? They’ve spent all the money.”
To contact the editor responsible for this story: Laura Zelenko at firstname.lastname@example.org
Recent reforms that would open oil exploration and development in Mexico to major oil companies for the first time in decades has the media all atwitter about the prospects of a reversal in declining Mexican oil output and a possible doubling of production. The reforms have brought out comparisons with Brazil which has a similar arrangement in which the country’s state-owned oil company works with major international oil giants to develop Brazil’s petroleum resources. Adding to the frothy atmosphere, former Brazilian President Luiz Inacio Lula da Silvaproposed a partnership between Mexico and Brazil to develop oil resources in both countries.
In a world with daily average oil prices hovering near record levels, such news might be welcome if only we could actually count on the accompanying optimistic production forecasts. But, it’s instructive to look at what actually happened in Brazil since the time its potential as a major new oil producer was touted several years ago.
Brazil had discovered large oil deposits in ultradeep (30,000 feet down) reservoirs far offshore. In 2009, Petroleo Brasileiro SA (Petrobras), Brazil’s state-owned oil company, announced that it would invest approxmately $175 billion in oil exploration over several years to boost Brazilian liquid fuel production from 2.4 million barrels per day (mbpd) in 2008 of oil, biofuels and other liquids to 4.6 mbpd in 2015, a move that would make the country a major oil exporter.
Let’s see what kind of progress Brazil has made so far. In 2012 the country produced 2.65 mbpd of liquid fuels, making hardly any progress toward the goal announced for 2015. (The figures for oil proper, that is crude oil plus lease condensate which is the definition of oil, were 1.81 mbpd in 2008 and 2.06 mbpd in 2012.) In fact, instead of contributing to the worldwide supply of exports, Brazil remains a net importer of oil according to the U.S. Energy Information Administration (EIA), and those imports grew from 36,470 barrels per day in 2011 to 155,040 barrels per day in 2012.
The large Brazilian oil company OGX Petróleo e Gas Participações SA filed for bankruptcy recently “after disappointing output from offshore OGX wells set off a crisis of investor confidence,” according to Reuters. It’s no surprise that state-owned Petrobras is also finding it far more difficult to exploit its deep sea oil resources than originally anticipated. Admittedly, there are other problems at Petrobras. It has become a tool of economic policy for keeping unemployment low, saddling it with investments that it might not otherwise have made as a private company. But that doesn’t change the fact that exploiting oil far offshore at extreme depths is difficult.
Mexico’s state-run oil monopoly, Petroleos Mexicanos (Pemex), has seen its production drop from 3.45 mbpd of crude oil proper in 2004 to just 2.59 mbpd in 2012 according the EIA. Reforms that will give international oil companies new access to Mexican oil fields are supposed to change that trend. It’s one thing to let private companies drill previously monopolized fields. It’s another to raise overall nationwide production significantly as a result. Just ask the Brazilians. The easy-to-get oil has already been harvested in Mexico and Brazil. The hard-to-get oil comes next, and well…it’s proving hard to get.
Will Mexico fare better than Brazil? Art Berman, a petroleum geologist and consultant who accurately forecast the bust for shale gas investors, offered this analysis in a recent email:
I have worked in Mexico since the early 1990s inside Pemex. There is a reason that no significant discoveries have been made since the 1970s–no reservoirs.
The Campeche Sound [in the Bay of Campeche] has reservoirs thanks to the biggest frack job ever, the Chicxulub meteor impact. The Golden Lane reef trend, discovered much earlier, has been fully explored with no new discoveries. Beyond that, almost nada.
The Eagle Ford Shale play [in Texas] extends into Mexico and, so far, all tests have yielded [natural] gas. There is a potential oil play in theTampico area from the El Abra Shale that sourced the Golden Lane. The Chicontepec tight calcarenite play contains huge oil [resources] that no one has figured out how to exploit commercially as recently as in the last few years. The deep-water Gulf of Mexico has serious reservoir problems in Mexico.
Add it all up and we are left with the same sense that there should be huge remaining undiscovered reserves in Mexico that an awful lot of smart foreign companies (Amoco, BP, Chevron, Exxon, Shell, etc.) have been unable to discover working closely [through service contracts] with Pemex since the 1980s.
As far as the Citi [Citigroup Inc.] estimates go [projecting a doubling of Mexican production which is mentioned and linked above], mucho ruido, pocos nueces (much ado about nothing; literally, lots of noise, no nuts).
Jeffrey Brown, an independent petroleum geologist best known for his Export Land Model weighed in as well on Mexico’s oil future. Brown’s model, first released publicly in 2006, correctly forecast shrinking global net exports of oil in recent years. He believes that any effect of the Mexican reforms will be relatively small and delayed several years. He related his views in a recent email:
Regarding their [Mexico’s] offshore potential, it’s going to take a long time to work out the agreements, drill some wells and put the wells on line. I wouldn’t expect to see any meaningful contributions from joint venture offshore projects until some time after 2020. Regarding onshore, [that] production could come on line sooner, but the agreements have to be made, and the per-well production rates are vastly lower than offshore. Also, I suspect that the production sharing agreements are going to be something more or less equivalent to a 50% royalty (or worse), versus much more favorable terms in Texas [which would make investment in Texas more attractive to major oil companies versus investment in Mexico].
Brown, who manages a joint venture exploration program based in Ft. Worth, also noted that “Mexico is on track to approach zero net oil exports in about six years (around 2019).” He continually reminds those making rosy predictions about oil exports for any exporting country that those countries tend to grow as oil revenues increase which means their thirst for oil also grows. That can leave less and less oil available over time for export. If the country’s production is in decline, as has been the case with Mexico, exports decrease much faster than production on a percentage basis if domestic consumption grows in the face of declining production–a sort of pincer movement on oil exports.
It’s possible that Mexico’s production may grow somewhat as a result of the country’s reforms. But, it is foolish to expect too much given what we’ve seen in Brazil to date. And, it is important to remember that production from currently producing Mexican wells is declining continuously making it necessary to drill a lot of wells just to maintain current production let alone increase it.
Anyone looking for oil exports or production from Mexico to reach their previous high marks would be wise to plan for a less than salutary result.
Japan’s PM Shinzo Abe has seen his approval ratings collapse for the first time since his ‘devalue-to-glory’ strategy was unveiled a year ago. Kyodo News reported, support for Mr. Abe fell 10.3ppt to 47.6%, while Japan News Network reported a 13.9-point fall to 54.6% as WSJ reports, public concern over the controversial secrecy bill (designed by Kafka, inspired by Hitler) and its nationalist overtones merelyexacerbated Japanese people’s concerns about their pocketbooks (as incomes stagnate and costs rise). As Abe plays lip service to economic issues (with a very Maduro-like speech recently on profit margins and wage increases), there is little but public outrage to hinder his plans as his ruling Liberal Democratic Party has big majorities in both houses of parliament, with no election scheduled until 2016. So much for Abenomics…
*JAPAN UPPER HOUSE PANEL ADOPTS SECRECY BILL AMID UPROAR
*ABE: SECRETS BILL NECESSARY TO PROTECT LIVES AND PROPERTY
The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know. It might all seems like a bad joke, except for the Orwellian nature of the bill and a key Cabinet member expressing his admiration for the Nazis, “just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change.”
All three media surveys signaled public concern after the ruling coalition steamrolled the passage of a controversial bill to set stricter penalties for intelligence breaches amid objections from opposition parties.
Around 80% of those questioned in all three polls felt that the bill wasn’t thoroughly debated in parliament.
In a news conference Monday, Mr. Abe said it was necessary to push through the secrecy bill quickly to protect public safety, but acknowledged the criticism.
“We must sincerely and humbly accept the people’s harsh criticism,” Mr. Abe said, adding that “I myself should have taken more time to carefully explain” the bill.
Mr. Abe’s high poll numbers early in his rule created a virtuous circle that allowed him to push through policies that were seen as aiding the economy and lifting the stock market, which in turn further sustained his popularity, allowing him to win a key election, and extend his power.
His sustained high support rate over the past year has been unusual among recent Japanese prime ministers. Starting with Mr. Abe’s own first one-year term, which ended abruptly in September 2007 after his party lost an election and his popularity plunged, Japan ran through six unpopular prime ministers in six years.
One big change for Mr. Abe between his first term and his second has been his focus in his most recent stint on pulling Japan’s economy out of its long slump. Long seen as a conservative nationalist, devoted to building up Japan’s military and global clout, he devoted much of his first term to those causes.
“The Cabinet must understand the risks involved in moving ahead with Mr. Abe’s agenda,” Mr. Nakano said. “It faces a tough decision, whether to push ahead with Mr. Abe’s conservative goals, or to focus on Abenomics in a bid to revive popularity.”
So, it’s for your own good Japan…
It seems Abe is going to need to raise that stock market even more to keep his popularity…
Meanwhile, the nationalist talk continues…
- *ABE:NO PROSPECT OF SUMMITS WITH CHINA, SOUTH KOREA NOW
And yet last night’s speeches sounded awfully like an awakening of the Maduro-style -ism of Venezuela’s control system “economy”
- *ABE: REAL BATTLE FOR ECONOMIC RECOVERY STARTS NOW
- *ABE CALLS FOR COMPANIES TO BOOST WAGES MORE THAN PRICE GAINS
- *ABE SAYS TOYOTA, HITACHI EXECUTIVES PLEDGED TO RAISE WAGES
Raise wages, cut margins, or else… we can only hope this stress does not bring on another bout of chronic diarrhea (as none of these Japanese leaders are getting any younger).
|Nicolas Maduro, Venezuelan president, has used his new emergency powers to pass two decrees that tighten government controls over the country’s struggling economy.
The first of the two laws, signed on Thursday, limits company profits so they do not overcharge customers, while the second gives the government more control over imports to ensure Venezuela’s dwindling dollar reserves are used properly.
Under the new laws, business profits will be limited to between 15-30 percent, while a central body – the National Foreign Trade Centre – will oversee the allocation of US dollars at the official rate of 6.3 bolivars. The country’s currency is trading right now at one-tenth of its official value on the black market.
Maduro said on Thursday he was passing the cost control legislation “for the protection of the Venezuelan family”, while the currency measures intended to “put in order all the handling of foreign currency that comes in because of oil income so it’s not robbed any more, so it’s not squandered, nor sacked from the people by the parasitic bourgeoisie”.
He had promised to enact both measures before Tuesday’s vote on the Enabling Law, which gave him the authority to create legislation without parliamentary approval for one year.
Earlier this month, Maduro declared an “economic offensive” against local businesses that he accused of inflating prices of imported products, including some by more than 1,000 percent.
Venezuela’s annual inflation has hit 54 percent, and shortages of basic products and hard currency are widespread. The economy is the biggest issue going into local elections on December 8.
Maduro’s measures have so far received support from his working-class support base.
After he forced retail businesses to cut prices over the weekend, long lines formed outside stores across Venezuela, with customers searching for big discounts.
After Tuesday’s vote, Diosdado Cabello, the National Assembly president, marched with more than 2,000 supporters from the legislature to the presidential palace to deliver the text of the decree law to Maduro.
But the changes have been criticised by the country’s political opposition, who say 15 years of socialist economic controls – under Maduro and predecessor Hugo Chavez – have hurt Venezuela.
Henrique Capriles, opposition leader, has called for a day of protests across the country on Saturday “against the crisis and corruption of the government”.
The US also criticised Maduro’s government over his new decree powers.
“As you may know, it’s constitutionally allowed in Venezuela, but that doesn’t make it okay, because we feel, of course, it’s essentially important for the people to have a voice in any country, in any decision-making process,” a State Department spokeswoman said.
Hugo Chavez, former Venezuelan president, used the presidential decree measure four times during his 14-year rule.
|Venezuela’s National Assembly has granted President Nicolas Maduro wide-ranging special powers to rule by decree for one year so that he can fix the economy.
Tuesday’s vote over the Enabling Law is the latest move by the elected Venezuelan leader, a protégé of the late President Hugo Chavez, to strengthen his hand as he faces an important political test in municipal elections next month.
The decree will essentially allow Maduro to create laws without parliamentary approval.
He says he needs greater personal power to stamp out opponents who are waging “economic warfare against his government” as the country struggles with soaring inflation and shortages of basic goods.
“Maduro has to tackle an economy in free fall,” Al Jazeera’s Andy Gallacher, reporting from the Venezuelan capital Caracas, said.
“People are really struggling to buy normal household goods.”
Over the weekend, Maduro used his existing authority to make retail appliance stores slash prices, sending troops to keep order among the crowds that quickly formed.
The Venezuelan unit of General Motors was fined the equivalent of $85,000 on Tuesdsay for allegedly overcharging and practising “usury” in the sale of car parts to local concessionaires.
The government also asked Twitter to take down accounts of users posting the illegal black market exchange rate for the country’s bolivar currency, which is trading at about one-tenth of the official value.
These measures have rallied Maduro’s working-class base and even won approval from some government opponents who have joined the long lines outside appliance stores nationwide for the past 10 days in search of deep discounts on TV sets and refrigerators.
The deep discounts of as much as 60 percent – which Maduro has said would be extended to toys, cars and clothing – come as workers cash their year-end pay bonuses, allowing them to make purchases that might otherwise have been out of reach.
The country has been repeatedly battered by a 54 percent inflation rate, a shortage of hard currency and basic goods.
Critics, however, blame Venezuela’s economic hardship on the government-imposed fixed exchange rate and price controls which they say have led to a shortage of basic goods such as rice and meat.
The vote to approve the so-called Enabling Law had been widely expected after Maduro garnered the two-thirds support he needed, or 99 votes, during a preliminary debate last week.
The move added to the opposition’s speculation that this was a thinly veiled power grab.
After Tuesday’s vote, Diosdado Cabello, the National Assembly president, led a march of more than 2,000 supporters from the legislature to the presidential palace to deliver the text of the decree law to Maduro.
Addressing a crowd smaller than the ones Chavez was accustomed to drawing, Maduro reiterated a pledge to use his expanded powers to keep prices low across industries and limit profit margins to 30 percent.
He also pledgegd to start 2014 with a frontal attack on corruption.
“They underestimated me; they said Maduro was an amateur,” he told the crowd. But “what you’ve seen is little compared to what we’re going to do”.
The legislative process leading up to Tuesday’s vote was marred by controversy after an opposition congresswoman was stripped of her immunity from prosecution over corruption charges, allowing for her substitution by a pro-government legislator who gave Maduro the crucial 99th vote needed to prevail.
Venezuela Dispatches Army To Enforce Appliance “Fair Price” Ceiling After Looting Ensues | Zero Hedge
Over the weekend, in “Venezuela Government “Occupies” Electronics Retail Chain, Enforces “Fair” Prices“, we reported that unpopular president Nicolas Maduro ordered the “occupation” of a chain of electronic goods stores in a crackdown on what the socialist government views as price-gouging hobbling the country’s economy. Various managers of the five-store, 500-employee Daka chain – the local equivalent of Best Buy – have been arrested, and the company would be forced to sell products at “fair prices.” Since then things have escalated rapidly. Because as we queried, and many wondered, the first question that arose is how would Maduro i) assure that prices were indeed kept at their “fair values” and ii) how would the cool, calm and orderly social order be preserved when suddenly everyone scrambles to buy all those flatscreens (which may have certain operational problems once the socialist paradise is hit with daily electric brown and blackouts very soon) they have been dreaming of for years. Now we know: with the help of the army.
NBC reports that in his “fight” against the economic “war” that he says the political opposition, in collusion with the United States, is waging against Venezuela, President Nicolas Maduro ordered the military occupation of a chain of electronics stores over the weekend, forcing the company to charge “fair” prices. This is happening hours after Maduro also promised that he will lower prices of mobile phones: will battalion regimens be tasked with making sure iPhone 5S are sold at a net profit for Apple?
But back to serious matters such as how brilliant socialist decrees result in immediate looting:
Pictures shared on social media as well as local newspaper reports said that one store in the country’s central city of Valencia faced looting. Some critics suggested that the entire operation was a form of looting organized by the government, just in time for municipal elections in December.
“This is for the good of the nation,” Maduro said on state television. “Leave nothing on the shelves, nothing in the warehouses … Let nothing remain in stock!”
Pay attention: this is coming to every “developed” banana republic near you.
Head of the High Commission for the People’s Defence of the Economy Hebert Garcia Plaza attempted to explain the government’s decision to take over Daka on state television on Friday, accusing the chain of unfair markups.
From a Daka store in Caracas, the government minister tweeted a picture of a washer/dryer that “cost 39,000 VEF on November 1 and today costs 59,000 VEF, a nearly 100 percent rise in a week.”
And while observed from the outside what is going on in Venezuela is a hoot, it hardly is to those stuck in the socialist paradise:
Local economist Jose Guerra, a former Central Bank official, was critical of not just the events at Daka but the bigger picture. “Food today, hunger tomorrow,” he wrote on Twitter.
Venezuela’s opposition leader, Henrique Capriles, has long blamed the government for the state of the country’s economy. On Saturday, he tweeted: “Everything Maduro does leads to further destruction of the economy.”
“Today it’s Daka. Tomorrow it’ll be the banks where you save your money,” tweeted Maria G. Colmenares, a professor at a local university.
Oscar Diaz resorted to sarcasm to make his point:“Daka had flour, sugar, milk and other basics. The shortage is over! Ah sorry, they sell [appliances]! Oops.”
At this point there is little left to comment on either Venezuela, or the rest of the world that has adopted the same “fairness doctrine” principle. Best to just sit back and consume the trans-fat free popcorn.
A US-chartered oil exploration ship seized by the Venezuelan navy in Caribbean waters disputed with neighboring Guyana has arrived at Venezuela’s Margarita Island.
Venezuelan authorities say the ship’s 36 crew members, including five US citizens, will be held on board while an investigation continues.
Admiral Angel Belisario Martinez told local station Union Radio on Sunday that the research ship was conducting “unauthorised scientific work” in Venezuela’s exclusive economic zone.
He said the case had been turned over to prosecutors.
The vessel was conducting a seismic study for Anadarko Petroleum under a concession from Guyana.
Guyana’s government says the crew was well within Guyana’s territorial waters.
- Venezuela navy escorts seized oil vessel into port (star-telegram.com)
- 5 Americans among ship crew detained by Venezuela (worldnews.nbcnews.com)
- US ship detained by Venezuela (bbc.co.uk)
OTTAWA – A carefully cultivated military relationship with Brazil could be damaged by the unfolding spy drama involving Canada’s super-secret eavesdropping agency, defence and diplomacy experts say.
Since late spring, a platoon of Canadian soldiers has been embedded with a Brazilian army unit as part of the United Nations peacekeeping mission in Haiti.
The deployment is slated to run until Christmas, but the entire exercise has been considered an important bridge-building effort with South America’s biggest military power.
The Conservative government attempted to contain the damage Tuesday. Prime Minister Stephen Harper said he is “very concerned” and that Canadian officials are “reaching out very proactively” to their counterparts in Brazil.
But experts say the relationship of trust built up by the joint mission and over the last few years by the country’s top military commanders has been badly damaged.
The government in Sao Paulo actually sought out Canadian participation in the Haiti operation because of the country’s reputation as a peacekeeper, said Walter Dorn, a professor at the Canadian Forces Staff College in Toronto….
- Spy cases strains Brazil military ties (globalnews.ca)
- CSE Spying Allegations Could Hurt Canada-Brazil Military Relationship (blogs.ottawacitizen.com)
- Canada in diplomatic hot water following report it spied on Brazilian government (vancouversun.com)
- Harper ‘very concerned’ about reports of Canada spying on Brazil (thestar.com)
- Harper ‘very concerned’ over Brazil spy claims (globalnews.ca)