June 07, 2011

Peru's stock market jitters in perspective

On election day, former army officer Ollanta Humala invited the media to watch him eat breakfast. Local TV tried to browbeat him into downing some of the cuy, or guinea-pig, that sits in the bottom-right corner of the picture. He refused. 

Just hours after he narrowly won Sunday's race, analysts and investors were again trying to browbeat him - this time into naming his economic cabinet.

The pressure only increased on Monday, when the local market was open just one minute and twenty-five seconds before plummeting stocks triggered an automatic halt to trading. By the end of the day, the market had plunged almost 13 percent - the largest single-day drop in Peru's history. 

Like many news organizations, I got caught up in the dip because it seemed to capture the mood of investors - particularly those in the mining sector. But a question from a former colleague had me wondering if Peru's market is a good indicator of anything. 

Peru's stock market has a capitalization of $122 million - or about 7 percent of the nation's GDP. By comparison, the capitalization of the New York Stock Exchange is at about 114 percent of U.S. GDP. In Mexico, the stock market is 38 percent of GDP.

In short, Peru's stock market is tiny. Still, it's a barometer for how investors feel and the first signal of what might happen to foreign direct investment in this commodity-rich country.

On Tuesday, Peru's main index was up 7 percent.

Does it matter? I'm still not sure. 

But, so far, Humala's keeping his mouth shut.

May 28, 2011

Duff Beer flows in Latam

 
BOGOTA -- Homer Simpson would feel at home in Latin America. His favorite beer, Duff, is available in Mexico, Argentina, Colombia and Chile.

The lager has the same logo as the brew that Homer guzzles at Moe’s, his local bar in the Fox cartoon series. In South America, the beer’s motto is “Yes it does exist!” But nobody seems to be willing to discuss Springfield’s finest.

The makers of Duff in South America say they aren’t allowed to talk to the U.S. media. Duff Mexico — which started the Latin American trend — would not respond to interview requests. And 20th Century Fox, which owns the rights to - Simpsons, said it would not comment on the story and would not say if it has a licensing agreement with any of the Duff producers.

Read the full story here

May 10, 2011

FARC Files: awkward instances and a personal appeal

The FARC Files, released by the International Institute for Strategic Studies on Tuesday, have been burning up regional newspapers all day.

There's not much new there, but it seems to confirm all the suspicions and rumors that have been circulating for months. There are a couple minor points that I found interesting. The IISS claims the files show that President Rafael Correa's 2006 presidential campaign received $400,000 from the FARC.

During Santos' inaguration in August he gave Correa a copy of those files as a gesture of goodwill. That must have been a bit awkward.

The IISS was received the files while Colombia's Alvaro Uribe was in power. It's too early to see if they have the same kind of pull under the Santos administration. I asked the IISS's Nigel Inkster (fantastic name) if his think-tank might get to analyze the files recovered from Mono Jojoy late last year. Inkster said they had not been approached about the new cache of docs. 

You can see The Miami Herald story here. The New York Times story, which managed to get an embargoed copy, can be seen here. 

The IISS claims my copy is on the way. Should be a good way to test FedEx's reliability here.

Have you seen the documents? If so,write me, I would love to know what jumped out at you. 

Ecuador referendum drags on and draws fire

So, despite President Correa's early victory lap over Saturday's referendum, things are looking a little more complicated. 

Today, Ecuador’s government accused the National Electoral Council of manipulating the vote count of Saturday’s controversial referendum to make it appear as if it was losing two of the 10 issues.

With 51 percent of the vote counted late Tuesday, the National Electoral Council said the government was behind on two questions.

On a plan to create a media-regulation board, the “no” vote was winning 44 percent versus 43 percent, according to the council’s website.

A measure that would let the government create a technical commission to appoint judges for the next 18 months was also being voted down. According to official figures, 45 percent have voted against it, versus 44 percent for it.

In a video posted on the presidential website, President Rafael Correa said the National Electoral Council was dragging its feet on counting the votes from the nation’s five largest provinces, which he said were overwhelmingly voting with the government.

“This is how they manipulate public opinion,” he said.

Since Saturday, when the final vote was cast, Correa has maintained that his administration won the “yes” vote on all 10 points.

A tracking polls done the day before the vote by Cedatos, Ecuador’s Gallup affiliate, also predicted the government would win on all 10 questions.

In an interview on Ecuadorean TV Tuesday, Foreign Minister Ricardo Patiño admonished local press for even suggesting the race was tight.

“That’s not the case,” he told Ecuavisa TV. “We have won all 10 questions.”

If you're jonesing for a minute-to-minute update, take a look at the elecotral council's website.

May 09, 2011

Ecuador referendum turns into a nail-biter.

Saturday's referendum in Ecuador is looking tighter than most expected.

The government is still winning on nine out of ten questions but the margins are thin. And then there's question No. 9 that would create a media-regulation board. With about 42 percent of the vote counted, the National Electoral Council reports that the "No" vote is winning 43.7 percent versus 43.5 percent.

The government is having better success with the question that would allow it to create a technical commission that could appoint judges for the next 18 months. A full 45 percent of voters have said "Yes" to the plan versus 43 percent who voted "No".

President Rafael Correa has said those reforms are needed to crack down on crime and impunity, but government critics fear it might be used to stack the courts.

For the full results check out the CNE's website.

Early on in the referendum, Correa had predicted a sweeping victory, and last minute polls suggested he would win by a comfortable margin.

On Monday, Correa fought back against perceptions that the vote might be tied.

"We’re not debating who won, we're debating by how much," he said in a release.

May 08, 2011

Ecuador referendum - good for bulls bad for the judicial system

Preliminary results are in from Ecuador's controversial referendum on Saturday and - as expected - President Rafael Correa won on all 10 points. You can read about the refrendum here. 

The opposition was strongest on the question of a judicial independence, where 43 percent voted against giving the government the power to establish a new technical commission that could name judges over the next 18 months. But Correa prevailed and many worry he'll use the new body to stack the courts.

Another issue that was hotly debated was the question that makes it illegal to kill animals for sport. That effectively brings Ecuador's 300-year old bullfighting tradition to an end.

You can listen to a radio piece about it here. 

In this picture, Efrain "Elvito" Moreno, on the right, prepares to put the traje de luces on bullfighter Diego Rivas. It takes Moreno and six helpers six weeks to make a single suit. They cost about $900 each. When I talked to him a few months ago, he said he didn't know how he'd make a living if bullfights were banned.

El Comerico has a breakdown of the vote here.

April 28, 2011

Colombian snow, waterlogged roses

Snow in Bogota is extremely rare, but that's what was on the ground on a recent weekday just outside of the city. 

This has been a season of strange weather in the Andes. The La Nina weather phenomenon has coincided with the rainy season to produce record amounts of precipitation in Ecuador, Venezuela and Colombia.

Here, the weather has caused at least 418 deaths, damaged or destroyed 140,000 homes and affected three million people over the last several months.

Over the Easter weekend, the country's flower industry was hard hit. This comes just as the sector was gearing up for its crucial Mother's Day exports.

I talked to one flower company (Don Eusebio Flowers) that has been completely surrounded by water.

They've had to buy three boats to ferry their 250 workers onto the farm and move their carnations and roses out. 

For many of the workers it was the first time they had ever been in a boat.

The national weather service expects the rains - and the flooding - to continue through June. 

April 22, 2011

Ecuador Chevron case more than meets the eye

I recently  wrote about the ongoing lawsuit against Chevron for the role its predecessor payed in polluting the Amazon. It's a complex and confusing trial that has dragged on for 18 years, generated over 200,000 pages of evidence and burned through six Ecuadorian judges.

I thought the movie above captured one of the recurring themes of the visit: nothing is quite as it seems. In this clip, Donald Moncayo, who works for the plaintiffs, steps out onto what seems to be a solid field of ferns that is actually floating on a former Texpet oil pit. It's the remediation of these pits that is at the center of the case. 

Both sides accuse each other of dirty dealing and trying to derail the process.

In February, Ecuador's courts awarded the plaintiffs $9.5 billion. Chevron has appealed the ruling and launched its own RICO complaint against the defendants' legal team, saying they have colluded with the courts to try to extort the company. On Wedenesday, Chevron filed an ammended complaint as it said it found errors and irregularities in the judgement that appear to come from non-public files of the plaintiffs and their legal team.

"There is no apparent explanation as to how the judgment would have incorporated these errors and irregularities without cooperation between the Ecuadorian court and the plaintiffs' representatives," R. Hewitt Pate, Chevron vice president and general counsel, said in a release.  "This is another instance of the fraud and corruption that have permeated the Ecuadorian judicial proceedings."

The plaintiffs say Chevron is simply trying to discredit the entire process to evade paying the record-breaking environmental judgement.

Meanwhile, some 30,000 villagers who are defendants in the case - and many who claim their health has been damaged by the practices of Chevron's predecessor - are waiting for a resolution. 

March 31, 2011

Colombian students to police: "Gonorrhea!"

I just moved into a new apartment in Bogota in a neighborhood called La Macarena. It's known for its laid-back feel, restaurants and fabulous fruit and produce market.

It's also surrounded by universities.

Colombia's congress is mulling a bill that would allow for private investment in state-run schools. Some are worried the deal would also deprive universities of their autonomy. 

Confrontations have broken out at at least four national universities, and VP Angelino Garzon said there is a risk that illegal groups (namely the FARC and the ELN) might infiltrate the protests.

Today, the students directly in front of my apartment – who have been running around in masks and throwing fireworks all week – finally

drew the attention of the police.

A full-scale melee ensued, with Molotov-cocktails, tear gas and water cannons.

From my perch, the students seemed incredibly well organized. Teams with wheelbarrows full of rocks kept the front lines armed. Others used buckets to smother the tear gas canisters that were raining down on them.

A third team, on the far side of the protesters, would gather up stones and toss them back into the university yard for recycling.

Despite the purportedly political nature of the protest, there was no screaming of demands or waving of banners. The only thing I could hear the students yell was the typical Colombian insult of "Gonorrhea!"

Such protests aren’t novel in Bogota, and within about 45 minutes of it being over street sweepers had removed the rocks, hauled off barriers and had traffic moving again. 

Shortly after I snapped these photos the neighbors told me that the last time students saw someone taking pictures from this building – about four months ago – they broke out all the windows.

That's good advice, as I have a feeling I'm going to see more of these.

March 20, 2011

Chile says yes to Duff Beer but no to Springfield

On the eve of Obama's visit to Chile, several thousand people took to the streets Sunday to protest a nuclear cooperation agreement that both nations signed.

The treaty is limited to capacity building and information exchange, but many here worry that it's a step towards building nuclear reactors in this earthquake-prone country.

Among the banners in the protest was this one reading "Chile is not Springfield." It's a reference to the fictional hometown of Homer Simpson, who works at a nuclear power plant.

Funny thing is, Duff Beer - Springfield's once fictional brew - went on sale here last week.

The Duff Chile site provides very little information about the product, but it does have a continous loop of "Oh Yeah" by Yello.