Thursday, September 21, 2006

Tuesday, July 18, 2006

Petroleos de Venezuela SA Inks Eight Joint Venture Agreements

(Courtesy of TCR-LA News clips) The Venezuelan Petroleum Corp., a subsidiary of state-run oil firm Petróleos de Venezuela PDVSA, signed eight joint venture agreements for exploitation of hydrocarbons in Venezuela, which are to replace the so-called operational agreements, El Universal reports. Eulogio del Pino, a director at Petroleos de Venezuela, told the official news agency ABN that the remaining 13 joint ventures would be formally organized within the next two weeks.Among the companies that signed joint venture agreements in April are:
  • Spain's Repsol YPF
  • UK's BP
  • Japanese firm Teikoku
  • Local unit of Canada's PetroFalcon Vinccler Oil & Gas, Suelopetrol
  • Inemaka
  • Open
  • Petroleo Brasileiro SA
  • China's CNPC
  • Chevron Corp.
  • Anglo-Dutch major Shell
  • Argentina's CGC
  • Tecpetrol
  • France's Perenco
  • Harvest Oil and Gas LLC.
  • France's Hocol
Under the joint ventures, Petroleos de Venezuela gets at least a 60% stake.Mr. del Pino told Reuters that over the next three years Venezuela expects to double the Orinoco extra-heavy crude oil production with the organization of the new joint ventures. Under this scheme, Venezuela is to operate four projects, namely Cerro Negro, Hamaca, Petrozuata and Sincor in cooperation with corporations including Norwegian Statoil, French Total and US firms ExxonMobil, ConocoPhillips and Chevron."We are likely to double output in three years to 1.1 billion bpd in the same areas we have today," del Pino was quoted by El Universal as saying. Furthermore, Mr. del Pino told ABN that they consider acquiring a stake in an Indonesia-based refinery, which is expected to be the largest in Southeast Asia.Petroleos de Venezuela SA aka PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad.

On Jan. 23, 2006, Fitch Ratings upgraded the local and foreign currency ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from 'B+'. The rating of PDVSA's export receivable future flow securitization, PDVSA Finance Ltd, was also upgraded to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a 'AAA (ven)' national scale rating. The Rating Outlook is Stable. Both rating actions follow Fitch's November 2005 upgrade of Venezuela's sovereign rating.

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Monday, July 10, 2006

An Interview with Evo Morales

Evo Morales:

"I feel I’m more of a syndicalist leader than a President”[1]

(Página/12, my translation follows.-) The Bolivian Air Force’s helicopter takes flight and in a few minutes one can see the infinite and arid extensions of the Altiplano. The trip is to the Pampa Aullagas community, the “lost Atlantis” –according to the British cartographer Jim Allen- and center of a regional llama and quinoa trade fair.

The duration of the trip was the time president Evo Morales gave to Página/12 to talk about his first five months in government and his next visit to Buenos Aires, were he’ll meet Néstor Kirchner in the town of Hurlingham and sign an accord to raise the price of natural gas exported to Argentina.

A short time before arrival, Evo Morales looks at a dot in the landscape and remembers “in that little town I made 100 dollars playing for the Imperial band” he’s visibly touched; minutes later the helicopter flies over his old adobe house in Orinoca. “Every time I come back my family and friends make me cry”, he confesses. In the middle of those remembrances, Morales surveys the topics of the day and his government, and calls Kirchner ‘a South American patriot”.

- What accord are you signing Thursday 29 with Néstor Krichner?

- Fundamentally, volumes and price of natural gas exports. But also other aspects like investment and credits to industrialize natural gas in our territory and other productive projects. We are also working between at a diplomatic level in topics related to enhancing the [quality of life] conditions of Bolivian residents in Argentina.

- Do you believe Kirchner is part of the “new nationalism” current running through Latin America?

- Yes, of course, he’s part of the Latin American patriotic [current] since the moment he started to dignify Argentina by opposing the intrusion of the United States.

- The Bolivian opposition says that you have only changed dependence to the United States for dependence to Venezuela…

- There’s no dependence to Venezuela and Cuba, these to sister nations have expressed great and unconditional solidarity in favor of Latin American integration. And we recognize that help, for instance Cuba has helped us in the alphabetization issue just as countries like Holland, Denmark, Sweden or Canada. Italy or Spain helps us with road and irrigation projects, Argentina helped with medicine and food during natural disasters. I want to express my solidarity to the Argentinean airmen who have died in Bolivia for solidarity. Why does Podemos fear Hugo Chávez? Since Chávez has confronted the United States, the instruments of Bush’s empire, like Jorge “Tuto” Quiroga, also confront Chávez. There’s no intromission, there is solidarity and cooperation, thanks to Venezuelan investment there’s going to be industrialization of our gas.

- Did the Chávez visits and his speeches in Bolivia damage the relationship with the United States’ embassy?

- The embassy and the US government have a defined line: attack, provoke and conspire against our governments. There’s an example, Leonilda Zurita, when she was a coca-grower leader she had a visa to the US and now that she’s a senator she doesn’t; the same with the water vice minister René Orellana. When the [US] diplomatic corps came to visit me only the ambassador was absent, and that night we invited congressmen, senators and ministers for a dinner. Those are provocations. Second, the North American military presence in Bolivia, camouflaged as qechua students, when according to trustworthy sources, they are doing intelligence. It’s not that the arrival of Chávez affects or doesn’t affect [relations], the United States’ position is defined: to conspire against our government.

- Colombia and Peru already signed a Free Trade Agreement with the United States, and Venezuela [Chávez] said “the Andean Community of Nations (CAN) is dead”, why insist in resuscitating a block in which you are now pro tempore president?

- If the CAN returned to its foundational principles, which are to strengthen the national and regional economies, it would be very different. CAN was weakened by the Free Trade Agreements, which destroy the small producer and the farming communities. We have the obligation to return to those principles and strengthen the block, but not to benefit the transnational economy, but the popular and communal economy of the Andean region.

- What is your balance after five months in the government?

- In five months we’ve consolidated as government and addressed social demands and, at the same time addressed structural issues. We have increased salaries and derogated labor flexibility; we advanced alphabetization, national ID and health policies for the poor, like Operation ‘Miracle’. All of this accompanied by strong austerity and anti-corruption measures. In the structural space, we’ve nationalized hydrocarbons and approved a law to call for the Constituent Assembly, which will‘re-found’ our country; in these five months we’ve followed the slogan of mandating while obeying and today we enjoy great support from the Bolivian people.

- A while ago, you declared to be comfortable with the “comrade president” or “brother president” denomination, what distinguishes Evo the president with Evo the syndicate leader?

-I feel I’m more of a syndicalist leader than President of the Republic, sometimes I don’t even believe I’m the president. I more like (Más me gusta) than they call me Evo, comrade Evo, given that it shows more trust. Presidential security used to call me Mr. President, now they only call me President or ‘Presi’. We eat as equals and that generated trust with people from the Police or the Armed Forces. Y don’t trust that ‘Mr. President’ thing, I like ‘brother president’ or ‘comrade president’, it’s part of the friendliness my comrades express.

- Why are you still president of the six Chapare coca-grower federations?

- It was the unanimous will of the six federations, besides it’s a guarantee for them, who are my extended family. Through my activities in the farmer’s union movement I learned my politics, we marched together, faced repression, mourned the dead and wounded of the Chapare, and we danced and partied our triumphs together. It’s something I’ll never forget. Because of that brotherhood I accepted the role as union directive,

- The medical corporations (?) reject the presence of Cuban physicians, what is the government’s response?

- Some doctors say “out with the Cubans”, but those doctors don’t have any feelings with the national majorities, the poor and the indigenous, who, for the first time have free healthcare (sic). The ophthalmologic centers built with Cuban cooperation have state-of-the-art technology, specialists and I’m very sorry that some doctors oppose the idea when the great majority of the population supports it. Bolivian doctors threat the indigenous as stinking pigs, while Cubans work with a lot of love and friendship.

- You recently accused the Unitel’s owners of acquiring land illegally, and announced your government would promote communitarian radios and alternative media, what is your relation with the press and other communicators?

- Businessmen shouldn’t be the only ones with access to the media, the poor, the farmers, also have the right to own their own communication channels. Today the only opposition we have is the big media corporations, who defend the interests of a fistful of families who lived off politics and concentrated the economic power. That has to change; they attack the popular movement and the MAS government every day.

- How far is your government going with the ‘agrarian revolution’?

- We are beginning to prepare the agrarian revolution, which is not a simple distribution or redistribution of land, but markets for the products and mechanization of the fields. We have begun with fiscal lands and we will continue with the latifundios that don’t have an economic function.

- Many people say ‘why would we want a constituent assembly, if we already have a president that represents the social movements’. What then is the constituent assembly for?

- The constituent assembly is not only to have an indigenous president, but to peacefully change the structure of the State, it’s to recover the territory and natural resources, incorporate communitarian justice –currently justice is corrupt- and re-found our nation incorporating the national majorities. That way we will reverse Bolivia’s original sin: having been founded excluding ninety percent of its population.

- During the [electoral] campaign, you declared yourself a socialist, are you still a socialist?

- Of course, that’s the goal.

Notes and Sources:

[1]. - Original interview by the Argentinean daily Página 12 available in as of July 10, 2006, original interview by Pablo Stefanoni. I have tried to keep Evo’s grammar and other language idiosyncrasies as close to the real thing as possible. This is certainly not the interview I (or any other non Evo-apologists) would have conducted, but there are some priceless pieces of demagoguery (the last line of paragraph 10 is specially touching) which shouldn’t go unrecorded. As always I encourage participation in the comments section.
Tag: South America, Bolivia, Intervie, Evo+Morales, Cuba, Hugo Chavez, Venezuela, Demagogia.

Monday, July 03, 2006

Chávez y Morales Utilizados Como Ejemplo del Populismo

(File under: Politics) Durante las recientes elecciones mexicanas circuló brevemente este spot publicitario en contra de López Obrador, dibujando paralelos entre su populismo y aquel de Hugo Chávez y nuestro presidente Evo Morales. En realidad se hace una explicación muy didáctica de las consecuencias históricas del populismo, vale la pena escucharla y meditar. El spot fue retirado del aire por el ente electoral mexicano después de que el gobierno venezolano se quejase del uso de la imagen de Chávez. Al parecer el gobierno de Evo ni se enteró o no le importó la utilización de la imagen del primer mandatario dentro de este contexto.

Video vía The Devil’s Excrement:

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Sunday, July 02, 2006

Initial Exit-Polling Shows Mixed Results

(File under: Politics) As counting continues (currently about 10 percent), the yes to autonomy vote is losing by 6 percent on a national level, informs ATB noticias. Exit-poll data (boca de urna) at this time (8:31PM EST) shows the following results: 80.5 percent in Santa Cruz, 69.9 percent in Tarija, 82.1 percent in Beni and 61.1 percent in Pando voted yes to autonomy. In La Paz, Cochabamba, and Oruro 69.7, 58.6 and 74.7 percent respectively voted no for autonomy. In Chuquisaca and Potosi, 42 and 35 percent voted yes.

In regards to the Constituent Assembly representatives, MAS are said to have captured between 109 and 120 seats, followed by Podemos with 66 to 78 and UN with 9 to 12, followed by other minority parties, including MNR with 6.

Evo Morales is said to speak at 9:00PM (-4GMT) today regarding the election. You Can listen to the speech in any of the following radio stations: Illimani, ERBOL, Wayna Tambo, and Panamericana.

UPDATE: New videos! Right.- Celebrations in Tarija and Santa Cruz, Left: Autonomy Referendum / Constituent Assembly Results:

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Today’s Press

(File under: Politics) As an introduction to today’s postings (three or four in total) let’s review the most interesting articles published in today’s newspapers (divided by geographical region):


  • Front page of La Razón: Evo Morales says he’ll respect the results.- Suspicions rose as Evo attacked once and again the legitimacy of the National Electoral Court and its directives, however yesterday night, during his last address to the press he claimed he’ll respect the outcomes, regardless of implications for his rule.
  • Second story: Demographics in Play. - According to data from the CNE’s national electoral roll, 31 percent of the population entitled to vote today (about 3.7 million) or 1.2 million falls within the 18-30 year old age range. Of which 311.752 are between 18 and 21 years old. The department with the largest “young” voting population is La Paz, with 378,273, followed by Santa Cruz, Cochabamba and Potosí.
  • Front page of La Prensa: MAS moves to capture two thirds of the Constituent Assembly (CA) seats. - Two thirds or 170 votes out of 255 seats are necessary to pass any regulation or modification to the constitution in the CA, MAS has seen capturing that many votes as unlikely and begun negotiations with other parties, including Juan del Granado’s MSM, the MBL and other traditional parties.
  • Second story: The church[es] advocate voting. - In a rare event most of the Christian denominations present in Bolivia (Catholic, Presbyterian, Methodist, Lutheran and Anglican) issued a joint communiqué encouraging voting this Sunday. No official positions regarding certain issues (such as the official religion and religious education in schools) were published at this time.
  • In La Patria’s Front page, a good editorial.- "An “ideal” constitution does not and will ever exist".



UPDATE (3:12PM EST): In a clear violation of Article 120 of the Bolivian Electoral Code (prohibition of broadcasting of exit poll results until 6:00PM) the MAS-controlled Official News Agency -ABI- has published the results of the first table closing in Sucre. They of course were published because they favor the ruling party and autonomy lost by four votes. Where is this table you may ask? San Roque’s 50-intern Public Penitentiary. Obviously MAS is scrambling to influence the results even if it means breaking the law. As of this writing the official radio station (Radio Illimani, available in iTunes) had also broadcasted the results. Bolpress, a growing Bolivian news agency, makes the same violation, and cites article 120 in the same report!.

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Friday, June 30, 2006

New Polls are in: ¿Bye Bye Centralismo?

(File under: Politics) CEDLA, the well know Latin American labor and agrarian research institute, has recently published a somewhat comprehensive poll of voting intentions in the urban and rural areas of Santa Cruz, Cochabamba, La Paz and Tarija. The technical details and final results are available at the institute’s website, from which I extract the following:

  • The “Yes to Autonomy” vote wins in all of the polled departments – even in urban and rural (!) La Paz. Days away from the referendum Autonomia is no longer a cruceño proposal, though the results of the poll do expose a major Bolivian mindset issue: 10.60 percent would vote for autonomy for some departments, 46.30 percent would favor autonomy for all departments but 42.50 percent would prefer the system to remain unchanged rather than have only some departments enjoy autonomy. (“O hay para todos o no hay para nadie” it seems, which could be worrisome).
  • The “Yes” vote triumphs even in rural areas, which tended to vote for MAS an Evo Morales in the last election. It’s worth noting that despite being the head of state –and supposedly neutral to the process- Evo has campaigned alongside MAS candidates, attacked the autonomy movement and its leaders and publicly announced he’ll vote “NO” encouraging his supporters to do the same. And despite all of these efforts, initial polling shows his supporters may vote the other way. In Santa Cruz and possibly Beni and Pando, autonomy will win by a landslide, Cochabamba urban and rural polling also show above 50 percent support for autonomy.

Exhibit 1: Voting intentions, key cities (Source: CEDLA):

  • It is surprising to see that reasonable expectations of what autonomy will mean for Bolivia do exist.[1] When asked to define autonomy; the majority answered “A new form to distribute the country’s resources” (33.4 percent) and “a new territorial organization” (22.70 percent) no magical panacea in anybody’s mind.
  • Not all is good though, with days left to the referendum the majority still believes La Paz will be somewhat damaged by the autonomic process.

I do not see it that way, just as any other department, La Paz, its citizens, businesses and other social actors can thrive under an autonomous form of government. Centralism, bureaucracy, political corruption and unjustified dominance on the other hand, has no place in the future we want to build. Save “executive intervention” in CNE’s procedures…autonomy will win.

[1] As opposed to what I call unreasonable expectations by the part of Evo’s voters on the last election –on what he would mean for Bolivia.

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Wednesday, June 28, 2006

Half a Million Manifest in Support of Autonomy

The video to the right comes courtesy of Willy Andres. So far it looks like may "live-blog" (kinda hard to do from 3000 miles away, but I'll try to update hourly) the constituent assembly/autonomy referendum.

UPDATE: Marches also occured in Cochabamba and Tarija, recent polling shows autonomy is favored in all major departments.

(File under: Politics)

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Sunday, June 25, 2006

The Week That Was: Audiovisual Version

I won’t be posting videos every week but I thought the events of these past days disserved some special attention. The first video (from the upper left to right) is a brief run down of Evo’s speeches this week, in which he attacks the opposition, the church, autonomy movement, the television channel Unitel and the US. The second clip is about a Cuban dissident who’s been living in Bolivia for the past few years and has been very outspoken about the reality under Castro’s regime; in this clip he claims to know of at least six recently-arrived Cuban doctors in Bolivia who have already escaped to Brazil or are in hiding.

This week, president Morales accused the US of sending "covert agents" to Bolivia, and even published the names of some twenty American and european citizens in the official news agency website as “proof”, unfortunately for Evo most if not all of these people were academics or grad students and one can easily find their vitas or curriculums with a simple google search; they include University of Michigan's Carrie Landrum and Denver University Jennifer Hennessey among others. The ridiculousness of this claim did not stop the rapid diffusion of this news item internationally as some 70 US newspapers have reported on it. Perhaps we should add a new caveat for US tourists and visiting fullbrights in those Lonely Planet guidebooks: be ready to be accused of working for the CIA by none other than the Bolivian president!

Meanwhile, television channel ATB has been carefully following the issue of Venezuelan military presence in Bolivia and recently informed of a new group of Venezuelan pilots arriving to Bolivia, they presented a video of the troops and attempted to interview some of them. Finally, one big story was published by La Prensa and quickly addressed by the executive; it talks of a possible “split” of opinion and confidence between the president and the vice-president Alvaro García Linera.

A though set of news for only one week, and surely there's more to come.

(File under: Other) On a blog-related side-note, I’d like to thank Ciudadano K for his kind words about my blog in his website; he apparently likes my writing style. Also the folks at Medicina Cubana for having taken up and republished my article on their blog, though global voices confused authorship when citing it; Guccio’s also commented on the article and posted a related note; he clearly got what I was trying to say – which some people didn’t. I’m not attacking the Cuban doctors in Bolivia or their intentions, I’m questioning how their labor is being used to generate propagandistic announcements and further a confrontation with Bolivian health professionals. Finally, I should have mentioned Miguel’s commentary on my oil nationalization article a long time ago.

Ok, so after noting all those accolades, my turn to make a couple: do check Marketing SOS, finally…I’m no longer the only one blogging about Bolivian business-related topics... or maybe I was never the only one nor the first one: here’s to Finanzas Globales, which is registered in Bolivia, though my attempts to reach the author have been foiled so far.

That’s all, I may post something tomorrow, there is a lot I want to write about.

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Tuesday, June 13, 2006

The opposition Speaks on the Issue of Venezuelan Military Aid

I recently opened a Youtube account; which I will use to post relevant news items or clips. I'm using this account in conjunction with another project of mine (FAB-EXTRAOFICIAL) so if you decide to browse the collection don't be surprised by the large number of military-related videos.

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Tuesday, June 06, 2006


Según una entrevista al Embajador de Cuba Rafael Dausá, desde la llegada al país de 590 médicos [1] (o “técnicos en medicina” como son titulados ultimamente) cubanos hace tan solo tres meses y unos días a la actualidad, han sido atendidas por ellos cerca de 570 mil personas, “a miles de las cuales se les salvó la vida” y de las cuales 7,300 recuperaron la vista en nada fáciles operaciones oftalmológicas [2].

El número es en realidad sorprendente: 570,000 personas atendidas desde fines de Febrero -cuando se autorizó la entrada de este personal debido a la época de inundaciones [3]. En este lapso ha transcurrido 72 días hábiles, asumiendo que todos los médicos invitados trabajaron todos los días esto hace 7,917 atendidos por día (una tasa de 13.4 pacientes por médico), asumiendo que la totalidad de este personal esté aquí cumpliendo funciones puramente hipocráticas y no sembrando semillitas de otro tipo.

Más interesante aún, es que si estos 590 médicos continúan atendiendo a la impresionante cantidad de 7,917 pacientes al día, en lo que resta del año habrán curado a nada más y nada menos que 1, 179,633 personas adicionales, llegando a un sorprendente 1,7 millones de atendidos en tan solo diez meses y unos días. Ósea el 21 por ciento de la población boliviana. Sorprendentes cifras, sin duda.

Según el embajador cubano hay déficit de médicos en Bolivia, a pesar de que las universidades bolivianas gradúan cerca de 5,000 profesionales de salud al año, y cientos de ellos se encuentren desempleados o sub-empleados. Entonces, ¿Qué pasa si hacemos como el sugiere, e invitamos 10,000 de estos súper-médicos cubanos a visitar el país? Pues no mucho, ya que según estas cuentas en un día habrían atendido al 989% de la población boliviana.

Con estos súper-médicos cubanos no debería quedar enfermedad alguna en el mundo... o tal vez se trate simplemente de diferencias entre los hechos reales y la contabilidad castrista, que pena que los bolivianos nos estemos tragando el cuento.


[1] Las cifras varían, algunos citan hasta 700 “médicos” en el país, por los que cito a lo mencionado por el embajador Dausá. El status y calidad profesional de estos señores también es desconocido, ya que no existe ninguna verificación independiente., Junio 6, 2006, Marzo 10, 2006.
[2], Mayo 22, 2006.

[3] Nuevamente, estas son cifras distribuidas por el embajador cubano y repetidas por la prensa nacional, es interesante notar que estos señores fueron desplazados a algunas de las áreas de menor densidad poblacional del país, y aún así reportan más de medio millón de atendidos.

Lectura Recomendada:

- Medicina Cubana, Blog del Dr. Eloy Gonzalez (Cubano).

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Thursday, June 01, 2006

Against all odds: Jindal Steel & Power is awarded El Mutún iron ore project

This was a nerve-racking bidding if there ever was one: plenty of controversy, politically motivated-stalling and intrigue, clashing of regional and political interests, mining industry nationalization scares and even a faux ministerial kidnapping.

What started as a highly competitive international bidding of five foreign companies including heavy hitters Mittal Steel Group and Shandong Luneng eventually became a one-player game as other companies deserted the process – or in the case of EBX were kicked out. But now porteños are celebrating, the Bolivian government has just announced the awarding of the project to the sole remaining competitor, Indian materials and energy conglomerate Jindal Steel and Power Ltd. (JNSP.BOM, Website).

The project is expected to generate some 2,000 direct jobs in the area, and important tax revenues to the local and national government. We should also note that natural gas rather than coal will be used in the smelting process.

According to, a popular Indian news site, “industry sources said the Indian company would have to invest $1.5 billion over the 40-year term of the contract. The El Mutun iron ore mines, located near the Bolivian-Brazilian border, have proven reserves of 40 billion tones… the deal will also benefit the Andean country. Its government estimates it can earn about $250 million in iron ore exports every year and employ almost 2,000 people. The operations can help produce up to five million tones of steel annually.”

JSPL is the latest among Indian conglomerates hunting abroad for raw materials. Last year, the country's largest private steel producer, Tata Steel bought a five per cent stake in an Australian coal mine.

El Deber (ED) published a brief interview with Mr. Vikrant Gujral (VG) Jindal’s vice-chairman and chief executive officer, my translation follows:

ED. - What was your first reaction when the government announced the green light for your proposal?

VG. - We’ve been working on this offer for two years, and put all efforts into it, I personally traveled to Bolivia ten times during the past years, to follow the project’s progress. That’s why we were glad and because there is a great sense of responsibility to it.

ED. - What’s the 60-day pause that Jindal asked for?

VG. - That lapse forms part of the proposal requirements.

ED. - What amount of investment is Jindal planning for this project?

VG. - About $2,300 million within eight years; direct and indirect employment generated by the project will reach the thousands, we don’t have a specific number.

ED. - When do you begin operating?

VG. - We are already working; obviously, there are some legal procedures have to complete before we start operating the project itself, for instance congressional approval and once we get that then we’ll begin operating. We are opening an office in Santa Cruz to monitor all contractual procedures and paperwork.

ED. - Is it true that other companies could also start working with Jindal in the iron ore extraction?

VG. - Maybe, we haven’t ruled out that possibility, even though this project will probably generate some start-up companies in the area.

We should be relieved that, while MAS may have hijacked the process from the previous administration (and now gloats over how a “popular, originary government has finally taking upon this project”) at least they were able to garner enough reason to go with it and complete a negotiation, we hope, in Bolivia’s best interest.

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Tuesday, May 23, 2006

Metiendo la mano a todo: Chávez y Morales crearán Minersur

Según informaciones oficiales el “Acuerdo Minero del Sur” (Minersur), será suscrito entre los presidentes de Venezuela, Hugo Chávez, y de Bolivia, Evo Morales, este 26 de mayo en la región del Chapare.

En declaraciones recogidas por la Agencia Boliviana de Información, el titular de Planificación indicó que el proyecto está orientado a desarrollar proyectos binacionales para explotar yacimientos mineralógicos en todo el territorio boliviano. Por eso negó que el ingreso de capitales venezolanos para apuntalar esa sociedad minera tenga por objetivo explotar los yacimientos del Mutún, tal como se informó en algunos sectores opuesto a la administración gubernamental.

Ese jueves 25 se procederá a la apertura del sobre A, el sábado 27 el sobre B (propuesta económica) y el 30 de de mayo se adjudicará la explotación de ese proyecto siderúrgico. Villegas explicó que la fecha están en carrera las empresas Jindall Still and Power (India), Mittal Steel Group (británico-holandesa) y Techint-Siderar (Argentina).

El ministro Villegas reconoció que un proceso de licitación tiene dos desenlaces: habrá un ganador y un perdedor y el gobierno está jugando a ganador, es decir, adjudicar el proceso de licitación a una empresa ganadora. [A menos que estas empresas retiren sus propuestas, como ya lo han hecho varias otras].

Thursday, May 18, 2006

Land Reform in Bolivia: A Picture of What's to Come

The image to the left of your screen illustrates a pattern that is actually recognized by the United States' National Aeronautics and Space Administration (NASA) as unique to Bolivia.

The image was taken in 2001. A side-by-side comparison of what the place looked like in 1986 and 2001 can be found by clicking here. [1]

What does this photo show? Nothing but the effects of increased migration from the Altiplano to the Santa Cruz lowlands, and the application of Aymara production and land distribution techniques. The pie or radial patterned fields are part of the San Javier resettlement scheme. They are the visual translation of Andean communitarism imported to the Eastern part of the country.

You shouldn't be surprised by the fractioning of the land, this is a common feature of "ancestral" altiplanic methods of production. In post-colonial altiplano, land is/was inherited in such a fractional manner, and of course, with time, efficiency began to suffer. Eventually the mini-fundio became commonplace and nowadays, some communities subsist even under a "surco-fundio" system[2]. The pattern is being replicated in the Bolivian lowlands, despite the availability and knowledge of alternative production methods, we can only expect the same ultimate result for any redistributed lands. The fields illustrated in the photograph are not producing soybean or any other "cash crops" such as rice or wheat, they are too small for efficient production. [3]

What's next? As you read this, the Morales government is preparing the second (or third) Land Reform in Bolivian history, 4.5 million hectares (about 17,375 square miles - the size of the states of the state of Massachusetts and New Jersey combined) are to be redistributed to the indigenous poor, the same folks who are now eking an existence in the communities such as the one seen above, or are just about ready to abandon their minifundios in the altiplano.

Other than property rights being obliterated, what worries me are the upcoming decreases in national food production once the fields targeted for reform are fractioned redistributed. Not to say anything about the actions that the current legal owners could take. Should we prepare ourselves for land reform a la Zimbabwe?[4]

Alvaro Ruiz has more on the topic.

Notes and Sources:

[1] Detailed explanation is available in the following website: <>
[2] Surco is refers to each of a field's furrows. Under a "surco-fundio" each row has an owner.
[3] Efficient land use: <> targeted for land reform.
[4] More on "Fast Track Land Reform" in Zimbabwe: <>

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Wednesday, May 17, 2006

Formerly the Journal of Bolivian Business & Politics

For the few of you who may read this blog on a regular basis, you may have noticed that I've changed the site's title to a much simpler one. The main reason being that most of my visits come from search engine results and I don't want any newbie to have the impression that this is anything other than a humble personal web log. The second reason is that the original name was kind of cumbersome to cite and/or link.

Tuesday, May 16, 2006

World GTL: A Profile

On May 15 the Bolivian state-owned integrated oil services company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) and New York-based private developer World GTL (WGTL) signed a letter of intent to begin a feasibility study for the construction of a "Gas-to-Liquids" plant in Bolivia[1]. David Loring, President and Chief Executive Officer of the company and Jorge Alvarado, YPFB's "Interim" President signed the document on a public ceremony.

But just who is World GTL?

Not much financial information about WGTL is available, given that it is a privately-held company (meaning that they don't trade their stock in any exchange and are not regulated by the Securities and Exchange Commission). However, there are some precedents to their activities.

The company was founded in 2000, according to a somewhat obscure UFTO Note[2] :

"Their [business] plan is to acquire ownership rights (in some cases production rights) to certain stranded gas fields at deeply discounted prices, and capitalize on
opportunities that now exist to convert these "stranded" natural gas fields into
synthetic petroleum products.

Why don't the major [oil & gas companies] do this themselves? They do hold on to larger fields and may eventually develop them as LNG sources (or increasingly, with GTL), but they have no interest in smaller fields, e.g. under 3 tcf. This leaves a huge opportunity for players like World GTL. In fact, majors have already said they'd license their GTL technology and help with plant financing. (...) Turning Stranded Gas into Proven Oil Reserves World GTL has come up with an interesting strategy. Once the development is done on a project (i.e. secure gas rights, do site plan, license technology, do preliminary engineering, arrange financing, sales agreements, etc.) previously stranded gas reserves with little to no value will essentially have been converted to "in the ground" gasoline and diesel inventories which can be easily monetized in the international oil market. (...)"

An interesting strategy, and certainly a workable one in Bolivia, were many natural gas fields are of very limited size. But if we are talking about the San Alberto or Margarita fields (some of the largest single-location fields in South America) I think they may be "stranded" in a different, more political sense, and perhaps a different type of partner is needed for developing those fields.

World GTL, has had successes in the past, they developed one of the contintent' first GTL plants in partnership with Petrotrin, the Trinidad & Tobago petroleum company (which took one third of the equity in the project) and Guardian Holdings which took an equity stake in the project through its alternative energy Prometheus Fund .

As far as management goes, the company was founded by a number of former executives of some major oil companies, many of whom currently have a management position, including:
  • Gordon H. Barrows, Chairman. Mr. Barrows has advised the United Nations, the World Bank and numerous governments and petroleum companies on petroleum matters. He is also Chairman of the Barrows Company, an international petroleum information company.
  • David Loring, President and Chief Executive Officer. Previously involved in petroleum development and production projects with ARCO and major international projects with the General Motors Corporation.
  • James Higbee, Vice President, International. Previously Managing Counsel for Squire, Sanders & Dempsey in Almaty, Kazakhstan; prior to that worked 18 years at ARCO, including as Director, International Negotiations and Contracts.
  • Peter Tijm, Vice President of Technology. Twenty-eight years with Shell, including the Bintulu GTL plant.
  • Leigh Noda, Chief Operating Officer. Mr. Noda has over 30 years of experience in the management of international petroleum refining operations with ARCO.
In light of this information, WGTL seems to be an interesting partner for some of the nation's projects. One could argue it lacks the capabilities to develop some of the larger projects, but their sole presence in Bolivia is a welcomed sign post-nationalization.

Notes and Sources:

[1] "Gas-to-Liquids"is a refining process that converts natural gas or other hydrocarbons into diesel fuel. It's a somewhat costly process that yields a cleaner "greener" fuel. Given Bolivia's diesel refining deficit and considerable demand -currently supplemented by imports from Argentina and Venezuela- the option of adopting the GTL method has been studied for many years.

[2] UFTO is a California-based advisory group that conducts "studies on behalf of a select group of energy utilities and vendors, to seek out technologies of interest and to facilitate collaborations among utilities, government and private companies." The complete article is found here, as of May 16, 2006.

My Hoovers and LexisNexis searches are yielding little results, this is it for today.

Company Websites: YPFB , WGTL , Petrotrin, Guardian Holdings, The Barrows Company .

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Wednesday, May 03, 2006

Nationalization in Bolivia: Will Foreign Oil & Gas Companies Suffer?

Why the big guns, does he fear Lestat is coming?

Yesterday evening President Evo Morales made good of his campaign promise of “nationalizing” Bolivia’s oil and gas resources. Via an official decree President Morales ordered the military to “occupy” foreign-operated gas extraction plants, refineries, and gas stations. He even addressed the country from the grounds of the Petrobras-operated San Alberto field, while heavily guarded by members of the US-trained counterterrorism task force Fuerza 10 [1] and a gleeful cadre of ministers, including nationalization “mastermind” Andrés Soliz Rada. While due to its now bore-some rhetoric his speech is not worth dissecting, the resulting official decree, the legal basis for any future nationalization plan is. However, I will leave that post for later this week, when we may have more information.

In this post I only want to report on the reactions of some of the companies directly affected by the announcement and the market’s reaction to the event itself:

§ Repsol (NYSE:REP).- Spain’s Repsol is the most exposed Western oil company in Bolivia, they operate some 30 fields. Bolivia is the source of 18 percent of the Madrid-based firm's reserves and 9 percent of its production. However, after the big write-down in the value of these assets in January (See the post about this here), the actual impact on Repsol is less than the reserves and production figures would suggest. Repsol ADR’s opened down three percent today and closed at a slight negative. In Madrid, the company’s stock recovered during the day and closed higher than the prior day. Repsol’s press release states that the company is evaluating the viability of renegotiation (link here).

§ British Gas (LSS:BG).- Shares of BG Group, which holds three fields in Bolivia including the Margarita field, also opened lower this morning. Bolivia only accounts for 3 percent of BG’s production and 4 percent of reserves. The Company did not issue a press release regarding the issue, though more information about its operations in Bolivia is available here.

§ Pluspetrol Energy. - The company holds 6 fields, including the Madrejones camp, it’s more invested in the Peruvian Camisea project than in Bolivia and did not issue an statement. It's operations in Bolivia function under the Repsol umbrella. It was not immediately affected by the events.

§ Total (NYSE:TOT). – Bolivia represents less than one percent of the company’s reserves, and its stake in San Alberto is shared with Petrobras. The company did not comment on the issue. It’s stock was not affected by the events

§ Vintage Petroleum (A subsidiary of Occidental Petroleum Corporation NYSE: OXY). - It currently operates three fields, the Bolivian operations represent a marginal segment of its South American operation, and there was no release for the company regarding this issue. This is the only US company significantly involved in Bolivian gas extraction. (Exxon-Mobil has gas transport operations)

§ Petrobras (NYSE: PBR). - Brazilian company Petrobras holds small but very public stake in Bolivia, its investments there yield only 2.4 percent of its output and form 2.8 of reserves. However dire the situation may look, Petrobras is in a position to actually profit from the current situation. Under the current administration, renegotiation of contracts will benefit a selected few, and depending on the company's decision or intervention from Brazilian president Lula da Silva, Petrobras may be one of them. As I have stated elsewhere in this blog Petrobras has a competitive advantage in not being a European or American company. Surely it’ll never be able to pull the same weight as an Exxon-Mobil but it is a force to be reckoned with in South America. Petrobras is a “politically correct” candidate for partnership under the awry rationale of the current administration - where the red dye of banners surpases logic. Now will Petroleo Brasileiro take over when Repsol finally decides enough is enough? Or will PBR go the other way and take Bolivia off line?

As far as the immediate reaction of the market, we can see that firms were quick to clarify their exposure in Bolivia and investors took note. Even Repsol, which would come out the greatest loser from a far-reaching expropriation, does not depend on Bolivia for its profitability. While other affected companies, namely Petrobras, stand to gain from this turn of events.

It’s not clear how far this “nationalization” will really go; as far as I’m concerned, this is nothing but the long needed and awaited contract-renegotiation under a populist guise. Production is only being channeled through YPFB while administrative control of infrastructure remains on foreign control until negotiations start.

And judging by the text of the initial decree, the only asset that has truly changed hands, are the millions of Andina, Chaco and Transredes shares owned by Bolivian citizens themselves in their pension funds, which have now being transferred for free to the MAS-controlled YPFB coffers. No clue on what that money will be used for, and with that source of income offline lets hope Chavista aid keeps flowing to pay the Bonosol, or Morales is going to see first hand that expropriation is not “the answer to all of our miseries”.

Note:[1] The only reason why I point this out is because this elite unit was compromised by Morales himself when earlier this year he practically cut its US funding and training. It's personnel had been allegedly involved in the controversial transfer of Man Portable Missiles to the US, an operation that tarnished it's reputation and pride. By placing them along his side in this very nationalistic ocassion, is Morales trying to rebuild their persona as his own little shock troops? Afterall they are not supossed to do guard duty...

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Nationalization in Bolivia: Are Foreign-Operating Mining Companies Next?

In light of the recent “nationalization” of Bolivia’s hydrocarbons we should examine whether the threat of expropriation also risks other foreign companies exposed to events in Bolivia, while Morales claimed in his fiery “nationalization” speech that mines and land were next, only to be contradicted by his vice-president in a radio address hours later, the reality may differ.

Apex Silver Mines Limited (Amex: SIL) today responded to unusual trading activity (I’m guessing the shorts are having a field day) arguing that the government does not plan nationalization of mines, this contradicts the president’s own comments, but Apex has a good point – the Bolivian Minister of Mines and Metallurgy has repeatedly commented that no nationalization of the San Cristobal mining project is planned. I wouldn’t count my chips yet, though the company is doing an impressive job addressing social needs of communities surrounding the mine and it’s starting to diversify its production in other South American countries, the concern is also 100% foreign owned and more than 50 percent managed by international personnel. Which makes it a prime target for Morales’ populist rhetoric, add to the mix the rising prices of precious and other minerals and the fact that the mine starts operating only in 2007 and you have a target of opportunity. At the close of the market today Apex Silver shares had sunk by $3.30 (U.S.) or 16 per cent.

Vancouver-based silver producer Pan American Silver Corp (NASDAQ: PAAS), which has a 55-per-cent interest in San Vicente, a small silver-zinc mine in Bolivia, also issued some comments, stating that they have been holding off investment on the mine due to political risk. Pan American shares fell by 1 per cent to close at $26.72 on the Toronto Stock Exchange.

Coeur d'Alene Mines Corp (NYSE:CDE) the company developing the San Bartolomé project had its shares fall by 57 cents or 8 per cent to $6.31 on the New York Stock Exchange. However, this company is somehow less exposed to instability as it manages sub-leased concessions owned by the state-run company COMIBOL and a number of cooperatives.

Though foreign mining companies are also exposed to expropriation risk, the threat is smaller than it was for gas and oil firms, and even other formerly state-run enterprises. As John Carlesso, chief executive officer for Toronto-based Apogee Minerals Ltd (TSX:APE) stated, oil and gas development; generate relatively few local jobs and results in a product that is exported at well below market rates. By contrast, a mining project can create thousands of jobs and typically requires substantial investment in infrastructure such as roads and power plants that Bolivia wants for its own economic agenda [1].

Looks like it’s more a matter of keeping the miners and the COB leadership happy, a similar relationship exists elsewhere in our continent, in the land of Bolivar, where the populist coronelisimo maintains a pretty good relationship with gold-mining company Crystallex International Corp (Amex: KRY) banking that the new jobs created by this North American company will prolong the sustainability of his regime.

At least in the short term, there is no strong signal that the Morales government is willing to “nationalize” foreign-operated mines –with the glaring exception of the recent EBX neutralization. The cynic in me tells me that Morales is waiting until the big projects start being profitable and all costs have been covered before he makes a move, but I think he’ll have his hands full dealing with the gas and oil expropriations.



Thursday, March 30, 2006

Yet Another Debt Cancellation

President Morales announced today in the city of Oruro, that the World Bank has condoned Bolivian debt of up to $US 1,500 million. This comes as a move from the bank to relieve 17 highly indebted countries of its debt and in the Bolivian case, follows the actions of other organizations such as the International Monetary Fund, and the Andean Community.

Yet another example of how those evil entities exploit the poor peoples of the world...

More blogging later (way later) I'm busy with finals, interviews and a hundred other things.

, Outdated Ideologies.

Thursday, March 16, 2006

Mercados e Ideologías I: Bolivia y Colombia

La reciente visita del presidente colombiano, Alvaro Uribe a Bolivia ha tenido una consecuencia funesta: fortalezer la ciega ideología masista de que los mercados son malos y los tratados de libre comercio son "instrumentos de dominación." Obviamente, los planteamientos pragmáticos, tanto públicamente como a puerta cerrada, del mandatario colombiano no sonaron bien con los transnochados directores actuales de la economía boliviana. Uribe incluso ofreció orquestar una negociación tripartita entre Colombia, Bolivia y EE.UU. donde se pueda generar un TLC favorable a los intereses del país y aceptable para los intereses comerciales de los involucrados. La respuesta de Morales, una rotunda negativa.

Al igual que nuestro país, Colombia exhibe un desarrollo económico frustrado por la existencia de un número limitado de productos no extractivos y la inestabilidad generada por el tráfico de drogas. Aún así, las administraciones colombianas han sabido generar un "modelo de desarrollo económico propio", liberal y facilitador de la inversión extranjera, donde la ideología no pesa sobre las decisiones económicas.

Con la asunción al gobierno del MAS, el absoluto opuesto se ha hecho regla: De plano, Morales y su gobierno descartan un Tratado de Libre Comercio con EE.UU. El confundido análisis de Morales hace un ejemplo del caso de la soya boliviana que actualmente se exporta a Colombia. Arguye que con la aceptación del TLC por parte de Colombia -inminente- Bolivia perderá un importante mercado tras el ingreso de producto norteamericano. La gracia es que García Linera también se manifestó al respecto, aduciendo que "confia que la administración de Bush se inclinará a no afectar la producción boliviana". Linera olvida que a diferencia de nuestro país, EE.UU. prefiere dejar las ideologías de lado a la hora de conseguir nuevos mercados. Obviamente poco o nada podra hacer la administración boliviana actual para prevenir el ingreso de soya y productos derivados estadounidenses a Colombia, ya que estos productos ingresarán gracias al TLC entre esos dos países.

Con las preferencias arancelarias aplicadas entre EE.UU y Colombia, Bolivia puede despedirse del mercado colombiano a partir del 2007, porque claro, nosotros no tenemos TLC.

La soya no es el único producto boliviano que se verá afectado por la expiración del ATPDEA y la no negociación del TLC. En la actualidad, nuestro país exporta $265 millones anuales a EE.UU. en productos liberados de aranceles, y esto solamente gracias al esfuerzo de unas decenas de empresas privadas, que no solo tienen que vencer las dificultades de una producción eficiente y competitiva sino las trabas impuestas por el sistema al exportador.

Y que ofrece el gobierno MASista al exportador boliviano? hasta ahora nada, pues lo único que ha translucido es que el gobierno de planteará un "Tratado de Comercio de los Pueblos", de desconocidas proyecciones pero decididamente tendiente a perpetuar el proteccionismo boliviano. Pareciera que Evo Morales piensa que ponerle palabritas populacheras a cualquier concepto o idea puede remplazar al raciocinio. En la próxima entrega: una exploración más detallada del "TCP".

New Rule: Two posts in English, one in Spanish, I got to keep up with my promise of supporting multi-lingualism (without butchering languages anyway).
Read More: "El desarrollo social es la única ideología de la region" Interview with Alvaro Uribe.

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Friday, February 24, 2006

Andina Under Investigation for Oil Smuggling

From then TCR listserv:
REPSOL YPF: Andina Under Investigation for Crude Oil Smuggling

As previously reported, Spanish-Argentine oil company Repsol YPF denied allegations of oil smuggling in Bolivia through its subsidiary Andina.

Jorge Alvarado, head of Boliva's state-owned oil company YPFB, said in reports that the Bolivian government is investigating alleged oil smuggling by the company. Oil has been taken out without authorization, and for that documentation has been altered, Mr. Alvarado has said. He revealed that there are signs, according to customs, that Repsol has altered documents to take oil out of Bolivia without authorization.

According to local press, Bolivia's customs authority ANB presented formal charges, after months of investigation, against Petrolera Andina at the Santa Cruz department district attorney's office on Monday alleging that the company smuggled US$9.22 million worth of crude for export and falsified documents.

The charge states that Andina smuggled 230,399 barrels out of the country between June 2004 and July 2005, 85% leaving from the city of Yacuiba and the rest going through Arica.

With regards to the falsification of customs documents, the ANB report says that seven of the company's export declarations claimed higher export volumes than they were authorized to export by ministerial resolutions, according to local reports. Andina has denied in a statement the charges and maintains having paid all taxes and royalties. The district attorney's investigation will last six months.

Andina is 50% owned by Spanish oil major Repsol YPF (NYSE: REP), with the other half controlled by the Bolivian state.


On June 20, 2005, Moody's Investors Service upgraded the ratings of Spanish-Argentine oil company Repsol YPF's local subsidiary YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3 from B1 and the unit's domestic currency issuer rating to Baa2 from Baa3.

YPF's foreign currency issuer rating of Caa1 remained unchanged, as it is constrained by the sovereign ceiling of Argentina. YPF's Corporate Family Rating (formerly known as the senior implied rating) is aligned with the foreign currency issuerrating at Caa1.

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Wednesday, February 22, 2006

A Documentary (About Goni): Our Brand Is Crisis

I recently got this e-mail from the Bolivian American Chamber of Commerce listserv, worth blogging about, and worth seeing:

American-Style Campaign Tactics Reborn in Bolivia;
Rachel Boynton’s New Muckraking Documentary

Film Forum is pleased to present the U.S. theatrical premiere of Rachel Boynton’s OUR BRAND IS CRISIS, beginning Wednesday, March 1, 2006. For decades, U.S. strategists-for-hire have been quietly influencing the opinions of voters and the messages of candidates in elections around the world. OUR BRAND IS CRISIS is an astounding look at one of their campaigns and its dramatic aftermath.

The filmmaker follows a crack team of Democratic political consultants, including James Carville, Tad Devine and Jeremy Rosner, as they strategize for a struggling presidential candidate in Bolivia. This thrilling adventure is a fly-on-the-wall account of the machinations behind the turbulent re- campaign of Gonzalo Sanchez de Lozada (“Goni”). In a country facing a calamitous economic crisis, Goni ¾ a wealthy businessman who privatized Bolivia's economy and created social security (when he was president in the mid-‘90s) ¾ isn't a popular candidate. Yet the consultants devise a U.S.-style campaign marked by savvy media techniques and negative ads, emphasizing a single, strong message. They reintroduce Goni as an appealing brand in an attempt to win an election whose aftermath is nothing short of devastating.

Recently Bolivia’s new leftist president, Evo Morales, has put the country back in front page news. Morales, previously a leader of the coca leaf-growers’ union, became the nation’s first indigenous leader in December. Boynton’s film is both a terrific case study in the events leading up to Morales’s win and a shocking example of how U.S. marketing strategies can affect the spreading of "our brand of democracy" overseas.

COME SEE THE FILM DURING IT'S OPENING WEEKEND, Wednesday, March 1- Sunday, March 5, at Film Forum, West Houston Street (West of 6th Avenue), with screenings daily at 1:00, 2:50, 4:40, 6:30, 8:20, 10:10. Rachel Boynton will be doing a Q&A after the 8:20 screening on Wednesday, March 1. The film is limited to a 2-week run.

“A riveting and intellectually provocative tale of clashing ethics and ideologies, as well as a portrait of a country in the midst of of profound conflict and suffering.”
Matthew Ross, Filmmaker Magazine

“The resonance of (the film) is flabbergasting… Riveting through and through, OUR BRAND IS CRISIS unravels like a political thriller.
Ed Gonzalez, Slant Magazine

OUR BRAND IS CRISIS (2005, 87 mins.) Produced and directed by Rachel Boynton. Cinematography: Tom Hurwitz, Michael Anderson, Christine Burrill, Jerry Risius. Sound: Sergio Claros, Boynton. Editing: Boynton, Jennifer L. Robinson. Music: Marcelo Zarvos. Executive Producers: Steven Shainberg, Robert Kravis, Sanders Goodstein. USA. In English and Spanish with English subtitles. A Koch Lorber Release.

See what the New York Times has to say about it by clicking here, also see the IMDb entry here.

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Tuesday, February 21, 2006

A New Energy Company is Born

This news item may be a little bit dated, but I decided to comment on it anyway, since it shows a very positive development for a long standing (formerly State-owned) company: the Ingenio Azucarero Guabirá S.A.[1] Founded in 1956, and located in the Santa Cruz department, Guabirá is one of Bolivia's oldest sugar complex companies, processing sugar cane derivates such as refined sugar, alcohol, ethanol and fertilizers, some of which it currently exports to the regional market.

The company was privatized in 1993, and currently owned partly by a number of raw material providers (who control 60 percent of voting rights) and company employees, the company is privately held and doesn't currently trade on the BVV. The company has shown very good growth with a bit of a slowdown in 2004-2005. However, Guabirá has recently launched an ambitious plan to provide electricity (starting out this year with a 16MW production capacity) using bi-products of sugar cane as a clean raw material.

The subsidiary unit it has created is named Guabirá Energía S.A, and counts with a starting capital of $US 6.5 million, which it plans to increase to $US 11 million as it generates an increased capacity of 60MW, according to the daily Correo del Sur [2]

The use of sugar cane derivates as a clean source of energy will allow Guabirá Energía S.A to trade pollution credits in accordance to the Kyoto protocol and access international financing. The company also plans to finance the expansion of 7,500 hectares of sugar cane fields to satisfy its new needs.

1.- Company website:
1.- "Guabirá invierte $6,5 millones para electricidad" Correo del Sur 15, Feb. 2006

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Tuesday, February 14, 2006

Uncovering a Niche Market: Bolivian Organic Foods

Sure, the big business news from Bolivia right now include problems with LAB, problems with Repsol, problems with El Mutún, problems with clothing imports and promises from Petrobras...Overlyy negative stuff.

However, I thought it would beworthwhilee to look at an interesting and positive news item in today's La Razón. Chapare Exporta, the agribusiness company founded by Miguel Zambrana[1] 15 years ago, has just begun banana exports to Europe. A historic landmark for a small Bolivian company given the strict agricultural protections common in the European Union. According to Zambrana the European market for bananas and its derivatesurpasseses $US 5.000 million a year, the objective of the company is to capture 10 percent of that market in the next few years. Bolivian banana exports currently cover 30-40 percent of thArgentineanan market, and with quotas and other trade barriers ineighborur countries expanding to European, Asian and North American markets seems a logical step.

On a similar step, other Bolivian agricultural companies are striving to promote their products abroad and enter new markets. Fourteen such companies will be exposing their products in the BioFach 2006 fair [2], in Nuremberg, Germany, in the next few days. Products promoted include organic quinoa, coffee, tea, medicinal herbs, dehydrated fruits, and others. Some of the companies include: Anapqui, Andean Valley S.A, AOPEB, BioCrush S.A, Coronilla S.A., El Ceibo Ltda. Irupana AOF and Hahenmann Labs.

Bolivian companies specializing in agricultural and organic products will also be present in other upcoming trade fairs, including Foodex in Japan, Agroexpo in Colombia, Interzum in Germany and Fancy Foods Show in the US.

A so it goes, slowly but surely Bolivian private enterprise has found a niche in selling high quality organic foods internationally. If only we had more free trade agreements.


[1] Some may remember Mr. Miguel Zambrana for his daring attempt of suing then congressman and sindicate strong-man Evo Morales and other MAS nomenklatura for damages caused by the constant blockades in el Chapare in past years. Week long blockades derived in months worth of production rotting in trucks on their way to Argentina, contracts being defaulted and other losses. It's surprising to see how Chapare Exporta has recovered.

[2] For a complete listing and contact addresses of many of the companies cited here, click on this link.


Tuesday, February 07, 2006

A Promising New Blog

Economics professor Antonio Saravia from American University of Sharjah, has started a new blog about Bolivia, focusing on the economic policies of the Morales administration. The blog is called Evonomics, Lecciones de Economia en Evoland, and so far has some very interesting posts. We hope to participate in the project and will be commenting on it regularly.


Thursday, February 02, 2006

Floods Affect Soybean / Soymeal Production

While the human cost of the recent floods is growing exponentially, leaving thousands of families without readily available access to food or medicine, the economic costs are starting to be felt as well. Carlos Rojas, president of the Asociacion de Productores de Oleaginosas y Trigo (ANAPO) estimates that the region has suffered the loss of 30,000 hectares of soybean crops, with 70,000 hectares more under risk. Damages are expected in the millions of dollars. The most affected sectors include small cooperative producers.

Though Bolivia accounts for a small proportion of the world's soy bean production, it has sought to equal Paraguay (currently at 2 percent of the world's output) in the near future. In the mean time, South American Soybean and Soymeal futures traded in the CBOT have been moving higher in response to weather shifts in Argentina and Brazil and increasing demands from China.

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