Monthly Archives: February 2011

Argentina

Exportation of Argentine beef hits a ten year low

Argentina in 2010 only exported 10% of the beef it produced, the lowest level since the foot and mouth disease crisis ten years ago.

According to the report production in 2010 fell 20.7% to 2.68 million metric tons. Exports fell 52.7% to 302,034 metric tons. Once the biggest exporter of beef in the world, Argentina now ranks tenth.

Paraguay passed Argentina exportation in 2010. as Uruguay had in 2009, according to a report by CICCRA ( Cámara de la Industria de la Carne). The report is quick to blame the executive branch of the Argentine government (ie. the president) for the decline in production.

Even domestic consumption fell 13.2%, to 2.38 million metric tons. This is significant since Argentines are the largest consumers of meat in the world.  In 2010 they were left with a measly 58.8 kilos of beef each.

CICCRA blames the government for the loss of 3,500 jobs in the meatpacking industry, and 4,600 independent farmers.  The report goes on to attack Julián Domínguez, the Minister of Agriculture, for not completing promises.

Mexico

Mexico: Economic Growth and Bloodshed

While its bloody drug war continues, Mexico economically continues to grow.  This combined with reports that Mexican tourism actually grew in 2010 have left some of us baffled.

Mexico’s Gross Domestic Product (GDP) grew 5.5% in 2010, its best growth since 2000, and recovered some of the 6.5% loss it suffered in 2009, reported the Instituto Nacional de Estadística y Geografía (INEGI).

The growth meets and almost beats the government’s forecast:  between 5.3% and 5.5%.

INEGI said that the growth was due to an increase of 6.1% of secondary activities such as mining, construction, and manufacturing.  Primary activities (agriculture, livestock and fisheries), increased 5.7%, while services grew 5% compared to 2009.

In seasonally adjusted terms, GDP during the fourth quarter 2010 grew 1.26% more than the previous quarter and  when compared annually, increased by 4.6% over the same quarter of 2009.

Argentina

Argentina looks for an apology

In case you haven’t heard, a US military plane recently landed in Argentina with training gear for Argentine Police Force. But it appears that some of the cargo wasn’t on the manifest. Argentina has seized the material and is demanding an apology from the US.

It seems some of the items in question are three satellite telephones, which are carried by the US secret forces wherever they go. In case of an emergency they can be used to speak with encrypted signals.

The US claims one of the phones was declared, but they did not know they had to itemize the number of phones. They have requested that the confiscated items be returned.

Argentina argues that the US military was trying to bring wiretapping devices into the country.

This isn’t the first time there has been controversy involving something showing up at the airport that wasn’t accounted for and Argentina. In 2007 a Venezuelan man was stopped at the Ezeiza airport with a briefcase that contained $800,000 in undeclared cash. The money was seized, but the man, Known commonly only as Antonio, was set allowed to pass through customs. A few days later he fled the country to Miami, where the US refused to extradite him for questioning in Argentina.

Antonio had claimed the money was for a political campaign and allegations surfaced that the money was for then presidential candidate Cristina Fernández de Kirchner. Cristina immediately denied the accusations and blamed it on a smear campaign by the United States.

And in 2004 police at the airport in Madrid, Spain found 60 kilos of cocaine in unclaimed suitcases. The airline on which the suitcases had flown, Southern Winds, became the focal point of a scandal involving drug trafficking. A year later the airline went bankrupt.

And finally, just in January two pilots were arrested in Barcelona after 800 kilos of cocaine were found in their jet. One of the pilots was the son of a former Argentine Air Force chief.

Argentina

Argentina: The controversy over inflation figures grows

The controversy over disputed inflation figures in Argentina continued Wednesday after the government threatened to impose economic sanctions on private consultants for disseminating reports with “inaccuracies or misleading errors”

Two weeks ago the government required consultants to submit explanations on how they analyze changes in consumer prices as their numbers almost triple the official figure for inflation. On Tuesday they warned they could be punished for breaking the law.

Firms could be fined for not respecting legislation that “prohibits state inaccuracies and misleading concealment, deception or confusion in respect of certain business issues to produce both the public and traders uncertainties in prices,” reported Economy Ministry sources.

The Government has rejected the independent figures and both President Cristina  and Economy Minister Amado Boudou avoid using the term inflation and talk of “distortion” and “dispersion” of prices and an “exploitation” of the situation by employers.

Measurements of private consulting firms have become more relevant since January 2007 when the National Institute of Statistics and Census (INDEC) introduced methodological changes in the official index of consumer prices.

In the past four years of intervention in the statistical agency, according to official estimates inflation has grown by 39 percent while private consultants  claim it to be 120%.

Last year, according to INDEC, inflation was 10.9 %, while private consultants say prices increased by around 25%.

Despite the government’s decision to publicly reject the private estimates, the official labor unions are guided by estimates of the consultants to set their demands for higher wages.

The Argentine government has requested assistance from the IMF to help create a new price index.

Panamá

Panamá: when will the bubble burst?

After an absence of nearly ten years, I recently had the pleasure of visiting the republic of Panama. I  must say I was surprised how much things had changed.  From the once run-down Casco Viejo district and the obviously changed skyline of the capital to the development on the Pacific coast , nobody can deny that the government and private companies have invested some serious money in the country’s future.

And if you follow the news closely you might have heard that Panama’s credit rating outlook was upgraded by Moodys to positive in 2009. Fitch later gave the country a investment grade rating for the first time in history.  And with a relatively strong GDP par capita (US$12,100) and cheap prices the local population might actually have a some buying power in the future.

But not so fast.

So many of those fancy new high rise buildings I saw along Avenue Balboa were empty.  And when I say empty, I mean they were not even near finished yet.  The same goes with the historical Casco Viejo.  Only the facades of many buildings stood.  And to top it off, Panama has plans to build even more office space, a convention center and hotels in a “airport city” near Tocumen International Airport.

Now, I don’t pretend to be an expert on Panamanian Real estate, but looking through the real estate section of the newspaper I didn’t see any real bargain out there.  And surfing the net I found some pretty ugly stories about investors who had lost a lot of money on projects that never got built.  Of course I also found the usual slew of real estate websites that claimed everything was ok.  But who believes what real estate agents say?

So I started looking around for some statistics on occupancy rates, although I was not sure if I was going to trust them anyways. Years of living in Latin America have taught me how to look at statistics.  You take what the government says, add it to what the opposition says, and divide it by two.

So I found this:

This from the Fourth Quarter 2010 Office Market Report NAI Panama .

Well the words (and numbers) speak for themselves.  Nothing too drastic until you get the that Office Under Construction figure.  Now fair enough, some of that space might already be spoken for.  And sure enough, in the same report I find this:

Note that these statistics don’t include the Casco Viejo district, which isn’t an office space zone.  Of course it wouldn’t make a huge difference if they did include it, but it is perhaps more symbolic than anything.  I love Casco Viejo, but I can’t really see that many people willing to invest a lot of money for a shell of a building.  The building costs would be far more than just starting from an empty lot.

statistics for the above surveys were taken from these areas

Well I am going to cut it short here before I go overboard. But I will continue researching and will update within the week.  Meanwhile, let us know what you think by filling in the comment box below.

Ian