Download Headlines 1st Week February 2013

Headlines 1st Week February 2013
Argentina among the least well-off economies in the region, says IMF
The economies of Argentina and Venezuela are the least well-off in the region due to pressures on
inflation, the balance of payments, and foreign exchange markets that developed last year, the
International Monetary Fund warned.
Argentina's financial hot summer: record devaluation of the Peso, record loss of reserves
The Argentine currency ended trading on Friday, the first month of 2014, at 8.01 Pesos to the US dollar
with an accumulated devaluation in January of 18.63%, the greatest loss in a single month since 2002.
However market analysts described the situation as depreciation 'sustained and managed' by the
government of President Cristina Fernandez.
Shell's price hike is conspirational
Cabinet Chief Jorge Capitanich today questioned the hike on gasoline prices announced last weekend by
Shell Oil Company considering the decision a “unilateral attitude”, and regretting that sometimes the
Government is fighting economic groups alone.
Farmers did not ask for devaluation', Etchevehere
Rural leader Luis Miguel Etchevehere has denied farmers were fueling a devaluation saying “nobody
forced the government to take the dollar to 8 pesos.” The Kirchnerite administration seeks to “blame it
on others to not deal with the consequences,” he insisted.
Limits of capital controls are becoming evident
When Argentina decided last week to ease limits on dollar purchases, it became the latest emergingmarket nation to acknowledge that capital controls usually fail in masking an economy's flaws.
Gov’t allies seek state control of grain sales
Major lawmakers of the ruling Victory Front (FpV) launched a push over the weekend to implement a
National Grains Board to control the exports of grains and oilseeds that would be along the same lines
as an agency created by Juan Domingo Perón almost 70 years ago.
3.8% fall in retail sales (Spanish)
Although the national government sought to avoid any side effects, inflation and the exchange situation
recorded in recent weeks, fell upon the retail sales, which showed different behavior and a decline of
3.8 percent.
Brazil ports expansion, not Panama Canal’s, the real risk for Argentine trade
While the Panama Canal Authority and the Spanish-led consortium expanding the waterway’s capacity
are locked in a dispute over costs that threatens to halt the works, further down the continent it is
* By M. Fernanda López Ortiz
Brazil’s ports expansion what is posing the real challenge for the trade of Argentina, one of the world’s
leading food exporters.
Inflation reaches 5 percent in January, former head of INDEC
The inflation rate in January reached 5 percent due to “tourism effect” and last week’s devaluation,
former head of INDEC statistics bureau Graciela Bevacqua said today.
Mujica: ‘Bilateral relation is being restored’
Uruguay’s head of state, José 'Pepe' Mujica assured the bilateral relation “is being restored”, as he
anticipated that efforts will continue in order to overpass the differences with Argentina, after a
meeting he held with President Cristina Fernández de Kirchner in Cuba.
* By M. Fernanda López Ortiz
Argentina among the least well-off economies in the region, says IMF
The economies of Argentina and Venezuela are the least well-off in the region due to pressures on
inflation, the balance of payments, and foreign exchange markets that developed last year, the
International Monetary Fund warned.
“These pressures are weighing on confidence and aggregate supply,” IMF Western Hemisphere Director
Alejandro Werner said. When he was asked about the Argentine peso devaluation, Werner refused to go
into details but said that as a general rule price agreements only work as part of broader measures.
Price agreements “can never be sustained in the medium term, although it can help contains the
expectations temporarily,” Werner said adding that the impact of currency depreciation on inflation is
smaller in the region than it was 20 years ago.
The statements came at a time when relations between Argentina and the IMF appeared to be
improving as the government of President Cristina Fernandez prepares to debut a new consumer price
index after it was censured by the international organization last year.
Although Argentina’s “economy has seen high growth in domestic demand over the past few years,” the
country has experienced “big problems” in the balance of payments leading to an increasing inflation
and a drop in the international reserves of the Central Bank.
The IMF and Argentina have had a strained relationship for years, with the Kirchnerite administration
long refusing to allow the international entity to examine its books as it does with all its member
countries.
Werner avoided going into details on what is going on in Argentina, saying the IMF has not analyzed the
country’s balance sheet for years and said that “without a specified detailed analysis of the financial
system’s structure and the actual architecture of the market for goods and services it would be difficult”
to carry out a full economic evaluation.
Werner’s statements on Argentina’s economy came as a surprise after relations with the IMF had
appeared to be less-tense over the last few months.
Criticism of the IMF over the government’s statistics led the Economy Ministry to implement a new
national price index with a changed methodology, which will be released on February with data
collected from December to January. This could open a door for a better relationship between the
organism and the government.
Werner praised several countries in the region that had applied moderate fiscal and monetary policies,
before going on to explain that for commodity exporters in the region Argentina and Venezuela, the
picture was less favorable.
Werner said that smaller economies like Uruguay and Paraguay, although more vulnerable, are better
prepared than in the past to avoid contagion from Argentina.
‘These economies are more susceptible to contamination, but these economies have also diversified
their foreign trade,‘ he said.
* By M. Fernanda López Ortiz
‘We believe that they are solid (economies) ... in a better position to face any eventual regional
contagion,‘ he said, adding that the IMF is monitoring developments in Argentina as closely as possible.
An expanding US economy will mostly help the nearby economies of Mexico and Central America this
year, Werner said. Brazil and the rest of South America, on the other hand, would see less immediate
benefits from the recovery of developed nations.
In the case of Brazil, Werner indicated the government needs to improve its fiscal policy to grow more in
the medium term. He also stressed that low investment levels continue to be one of the main
weaknesses of Latin America’s top economy.
Argentina's financial hot summer: record devaluation of the Peso, record loss of reserves
The Argentine currency ended trading on Friday, the first month of 2014, at 8.01 Pesos to the US dollar
with an accumulated devaluation in January of 18.63%, the greatest loss in a single month since 2002.
However market analysts described the situation as depreciation 'sustained and managed' by the
government of President Cristina Fernandez.
The peso devaluation concentrated on 23/24 January when the exchange rate jumped from 6.92 to
8.0183 Pesos to the dollar with peaks of 8.40. But then the Central bank intervened and balanced the
dollar exchange rate in the range of 8 Pesos. Since January 2013 when the US dollar was selling at
4.9768 Pesos the Argentine currency lost 60.95% of its value in the official market.
But despite the soaring price for the dollar, according to primary data, the Central bank on Friday lost
170 million dollars, totaling in January an erosion of 2.499 million dollars which means the level of
international reserves now stands at 28.100bn. January is now the worst month in eight years for
reserves.
The reserves January drop represents a loss of 8.17% compared to the end of December 2013, a year in
which the central bank had its worst performance since the Kirchner couple took office in 2003. Last
year the Argentine central bank lost 12.691bn dollars.
Taking the 28.1bn declared at the end of January, international reserves loss accumulated 19.423bn
(40.87% less) compared to the 47.5bn of 31 October 2011, when they stood at 52.564bn dollars.
However the efforts of the Cristina Fernandez government to stabilize the official dollar with the daily
drainage of reserves was not sufficient to impede the rise of the dollar exchange rate in the parallel or
blue market, which closed trading on Friday, and January, at 12.65 Pesos to the greenback. This
represents a 26.5% devaluation of the Peso in the blue market during the single month of January.
Likewise the gap between the official rate and the blue market stands at 58%, in a month when the
government partially lifted the clamp on holding and saving dollars, even paying an extra 20% over the
official rate of Pesos, and despite certain strong limitations as to who can purchase and the amount
purchased.
* By M. Fernanda López Ortiz
Those Argentines who managed to overcome the bureaucratic barriers imposed by AFIP, the tax office,
before buying dollars with a limit of 2.000, had to pay 9.62 Pesos which represents a 31.50% gap with
the blue dollar market.
The Argentine government is trapped with scarce hard currency, strong tourism demand and the energy
bill which this year is estimated could climb, following the devaluation, 45% equivalent to 13bn dollars.
The large influx of dollars can only begin to appear sometime in March and onwards when farmers begin
selling summer crops. With no access to international money markets and growing demand for dollars,
the Argentine government can only delay imports, and blame exporters and farmers for not marketing
what is left from the previous crop, which according to these organizations is not that much, and equally
important it is hard currency any moment.
But farmers were quick to reply: “In a market where all its inputs are tied to an unknown future dollar
price, with an inflation rate surpassing 30%” it is only understandable that some farmers have decided
to stockpile their grain production.
The farmers united in the Liaison Board added that “the government is looking for someone to blame
for its own mistakes, as it always does.”
They urged President Cristina Fernández administration to carry out “an anti-inflationary policy,” to stop
“wasting the national reserves” and to stimulate “the production giving signs of trust.”
On Friday early morning at his daily press conference Cabinet Chief Jorge Capitanich questioned “top
agricultural producers” for not selling their output due to “miser and speculative” reasons.
Shell's price hike is conspirational
Cabinet Chief Jorge Capitanich today questioned the hike on gasoline prices announced last weekend by
Shell Oil Company considering the decision a “unilateral attitude”, and regretting that sometimes the
Government is fighting economic groups alone.
The company announced a 12 percent hike in gasoline prices to be in effect as of today.
In his daily press conference at the Government House, Capitanich accused Shell of lacking “technical
reasons to fix these prices” while it only responds to “greed.”
"Shell’s attitude is not a coincidence; it’s an attitude which goes against the country’s interests. Shell’s
attitude is always conspirational,” he fired.
He went on to say the government “was implementing a strategy of dialogue with the parts to generate
conditions of suppy and prices” until Shell decided a price hike.
* By M. Fernanda López Ortiz
Farmers did not ask for devaluation', Etchevehere
Rural leader Luis Miguel Etchevehere has denied farmers were fueling a devaluation saying “nobody
forced the government to take the dollar to 8 pesos.” The Kirchnerite administration seeks to “blame it
on others to not deal with the consequences,” he insisted.
“Farmers did not ask for the currency devaluation. Nobody forced the government to take the dollar
from 6 to 8 pesos. They want to blame it on others,” the president of Argentina’s Rural Society assured
and responded also to the criticism by Cabinet Chief Jorge Capitanich who accused “agricultural leaders”
of causing the sharp drop in the Central Bank’s reserves and hoarding grains of their harvest out of
“greed and speculation.”
“He (Capitanich) continues to get it wrong when he puts farmers as the enemy,” Etchevehere
considered in statements to a local radio station.
“Producers know it is an act of responsibility and need to sell when it is needed. Grains will be always
tied to inputs, salaries and taxes”, he explained.
Limits of capital controls are becoming evident
When Argentina decided last week to ease limits on dollar purchases, it became the latest emergingmarket nation to acknowledge that capital controls usually fail in masking an economy's flaws.
Argentina allowed the peso to plunge 15 percent after the Central Bank began scaling back interventions
in the foreign-exchange market on January 22, spurring price increases of as much as 30 percent on
consumer goods as international reserves fell to a seven-year low.
"Capital controls signal that a country is very worried about preserving its foreign exchange," Steve
Hanke, a professor of applied economics at Baltimore-based Johns Hopkins University and an adviser to
the Argentine government in the 1990s, said in an interview. "That means bad things are in the wind."
The restrictions spawn illegal traffic in the local currency that creates "lying prices" in the economy, he
said.
Restrictions on capital flows, ranging from Argentina's tax on vacations abroad to Malaysia’s stabilizing
the ringgit after the 1997 Asian crisis, have had mixed results in boosting investor confidence in a
country's economy. Capital outflow restrictions can be effective "if they are sufficiently comprehensive
to slow a sudden 'rush to the exit,'" according to a report by four International Monetary Fund
researchers released this month.
"For the average country, a tightening of outflow restrictions is ineffective as net outflows increase as a
result of it," wrote Christian Saborowski, Sarah Sanya, Hans Weisfeld and Juan Yepez, authors of the IMF
report.
‘Limited success’
In Venezuela, a decade of currency controls is fuelling the world's fastest inflation among the 114
economies tracked by Bloomberg and shortages of basic goods.
* By M. Fernanda López Ortiz
The official rate of 6.3 bolívars per dollar compares with the 75-bolívar rate on the black market. Official
dollars therefore are the most profitable assets in the country, allowing people who have access to them
enjoy a lifestyle far beyond the reach of an average Venezuelan.
"Capital controls to avoid excessive inflows have had limited success," Ricardo Hausmann, a former
planning minister in Venezuela who now teaches economics at Harvard University, in Cambridge,
Massachusetts, said in an e-mail. "Capital controls to prevent outflows often postpone and amplify
rather than moderate the need for adjustment. If they involve an emergence of a black or parallel
foreign-exchange market, they lead to a dangerous macro and micro disaster."
The IMF, influenced by then-US Treasury Secretary Robert Rubin and his deputy, Lawrence Summers,
started to push Asian countries to open their financial markets and lift capital controls in the early
1990s. When the financial crisis started in late 1997, the IMF advised the region to cut budgets and raise
interest rates to limit the currency depreciation.
Nobel laureate Joseph Stiglitz, then chief economist at the World Bank, opposed the IMF's remedies,
pushing for capital controls to stem the crisis, advice no Asian countries except Malaysia took.
Malaysia, faced with global investors selling the nation's assets to bet on a depreciation in the ringgit,
imposed restrictions in September 1998. These included making investors hold the ringgit proceeds of
share sales for at least a year and banning the transfer of the local currency between offshore accounts.
The ringgit's real effective exchange rate stabilized the next year, after tumbling almost 20 percent,
while the nation's foreign-exchange reserves gained following the biggest annual decline on record.
"The restrictions provided room for the authorities to accumulate reserves amid a stable exchange rate
and enact policies aimed at revitalizing the economy, such as reducing interest rates," the Washingtonbased IMF researchers wrote in the report that examined capital outflow restrictions in 37 emerging
markets from 1995-2010.
In Iceland, the krona exchange rate stabilized shortly after restrictions were imposed during the depths
of the global financial crisis in November 2008. That gave officials room to ease monetary policy to help
revive the economy, according to the report.
The IMF report concludes that capital controls can be successful if "supported by either strong
macroeconomic fundamentals or good institutions, or if existing restrictions are already fairly
comprehensive."
Cut in half
Since her re-election in 2011 when capital flight almost doubled to US$21.5 billion, President Cristina
Fernández de Kirchner has made several attempts to keep money in the country. She implemented
more than 30 measures, including blocking most purchases of foreign currencies, taxing online
purchases, banning units of foreign companies from remitting dividends and restricting imports.
The controls cut the total amount traded last year in the local foreign-exchange market in half compared
with 2010, according to data compiled by Argentina's Mercado Abierto Electrónico automated trading
* By M. Fernanda López Ortiz
system. Still, the robust black market for dollars shows that some Argentines are finding ways around
the controls.
The government also reduced some currency controls in place since July 2012, authorizing foreignexchange purchases for people earning a monthly wage of at least 7,200 pesos U$S901. Those who
qualify, less than 20 percent of the population, can buy as much as 20 percent of their average monthly
salary, up to US$2,000 a month.
“The problem I see in the longer run for the capital control for outflows is that it interferes with foreign
direct investments, because FDI wants to take money out of the country,” said Guillermo Calvo, an
economist at New York-based Columbia University and former chief economist at the Inter-American
Development Bank . “If a country develops that reputation, it can be very negative for FDI. That's very
dangerous.”
Gov’t allies seek state control of grain sales
Major lawmakers of the ruling Victory Front (FpV) launched a push over the weekend to implement a
National Grains Board to control the exports of grains and oilseeds that would be along the same lines
as an agency created by Juan Domingo Perón almost 70 years ago.
This latest idea comes at a time when President Cristina Fernández de Kirchner’s administration is
aiming fire at the farming sector for not selling their harvest.
Meanwhile, the Central Bank foreign currency reserves continue dropping, losing US$2.499 billion in
January to a total of US$ 28.1 billion.
This may be a key week for the agricultural sector’s relations with the government as Cabinet Chief
Jorge Capitanich is expected to meet today with farming leaders to evaluate the current situation
regarding soybean exports.
“We need a national agency to sell products from cooperatives,” Lower House head Julián Domínguez
said last week. “The fate of Argentine farmers cannot be left in the hands of the country’s top 10 grain
exporters.”
One day later, FpV national lawmaker Héctor Recalde supported Domínguez’s call for further state
involvement in the area.
“I wish the National Grains Board would return,” he said. “I wish the Supply Law would return, too.”
According to government figures, cereal exporters should sell between US$27 billion and US$30 billion
between unsold and yet-to-be-sold stock. Farming groups say the real number is actually US$13.7 billion
— reportedly the same amount as last year.
Calls for controls
Yesterday, agricultural producers supported earlier demands and asked for any kind of state-run agency
that would control grain trade to prevent the development of monopolies — and practices such as the
* By M. Fernanda López Ortiz
ones denounced by the government in a context where the national administration is very much in need
of dollars.
These producers are grouped under the Small Farmers’ Federation (FAA) led by Eduardo Buzzi, though
most of them resent Buzzi’s leadership and his alignment with the Liaison Board (which led the farming
protests of 2008).
“This agency should be formed by national cooperatives, so nobody can say that it is only the state that
is monopolizing trade,” Esteban Motta, leader of the Fecofe federation, told state-run news agency
Télam.
His peer from Fecofe Alfredo Camiletti said his grouping would have a favourable view of creating a
National Grains Board.
“There are several other places in the world where similar agencies exist,” Camiletti said. “This board
could set up a minimum price that would help regulate the market in order to benefit small producers.”
Andrea Sarnari, a producer from the Buenos Aires province district of Bolívar, recalled that the 19891999 Carlos Menem national administration eliminated the National Grains Board and this led to the
disappearance “of over 103,000 farming producers.”
Regarding Capitanich’s claims, Sarnari said that small producers were not withholding “any grains” and
accused big exporters of not selling their crops in order to obtain a further benefit from the devaluation
of the peso.
FAA leader Mariela Speroni agreed with creating an agency similar to the one created in Perón's first
administration and also called for measures that would benefit “small producers and family agriculture.”
Not yet
But even though many Kirchnerites are repeating the idea of re-installing such an agency, Capitanich
yesterday dismissed the measure — at least for now.
Asked whether the Fernández de Kirchner administration was analyzing the creation of such a
commission, the Cabinet chief said the government was still working under the current scheme.
Last night, Capitanich dismissed the idea in the Public Television show 678 by saying that the global
trend is to abandon these types of controls over agricultural exports, naming Canadá and Australia as
examples.
3.8% fall in retail sales (Spanish)
Although the national government sought to avoid any side effects, inflation and the exchange situation
recorded in recent weeks, fell upon the retail sales, which showed different behavior and a decline of
3.8 percent.
* By M. Fernanda López Ortiz
The year 2014 began with a fall of 3.8 percent over the same period last year, as it was reported from
the Argentina Confederation of Medium Enterprises (CAME).
They also noted that they prevailed a high disparity in market behavior and that there was uncertainty
about the direction of prices, showed that consumer' purchases retracted (for caution or for loss of
purchasing power). "
They detailed through a press release that sales were also reduced, product of potential increases. "That
explains the differences in the behavior of the sales reported by employers of different commercial
products," said from Came.
The items which registered increase in their sales were: food and beverages, household appliances, toys,
stationery and sports. This sector showed a positive trend "for advanced purchases" from Came analysis.
But the rest of the items that make up the retail offering, finished lower.
It was recorded also a use by consumers, of credit cards mostly, in installments buying. In addition,was
observed an increase in bounce card for lack of purchase limit, forcing some families to abandon the
sale and other cash payable direct.
After the traditional increase in sales for the Christmas and New Year and Reyes Week was also an
"incentive" for businesses, allowing very active sales especially in areas such as toy, clothing, sporting
goods and electronics.
Brazil ports expansion, not Panama Canal’s, the real risk for Argentine trade
While the Panama Canal Authority and the Spanish-led consortium expanding the waterway’s capacity
are locked in a dispute over costs that threatens to halt the works, further down the continent it is
Brazil’s ports expansion what is posing the real challenge for the trade of Argentina, one of the world’s
leading food exporters.
Experts talking to the Herald listed a series of reasons why it is not the Panama Canal US$3.2 billion
expansion the main risk for Argentina, but Brazil’s US$27 billion plan launched year to quadruple exports
by 2030.
To start with, only a very small percentage of Argentina’s soybeans — by far its main revenue earner —
goes through Panama and the Canal’s increased capacity is expected to affect more Argentina’s
containerized trade, which accounts for a smaller part of its trade.
Then, the same as most Latin American nations, Argentina face a serious port and transport
infrastructure obsolescence which comes on top of its permanent need to dredge some of its leading
ports, among them that of Buenos Aires City.
Other factors affecting the country are union conflicts that have led cargo from Bolivia and Paraguay to
bypass Argentina’s huge Rosario port complex on the River Paraná and go rather to Montevideo, in
Uruguay, which, besides, is some three to four feet deeper.
* By M. Fernanda López Ortiz
Finally, many experts argue that Argentina — that privatized its maritime and fluvial merchant fleets in
the 1990s during the tenure of neoconservative Peronist Carlos Menem — actually lacks port policies.
CANAL CONFLICT
The consortium led by the Spanish firm Sacyr has received US$2.05 billion for the 66 percent of the
works it has completed, and US$784 million in advance payments. It said that it risks losing US$574
million in guarantees and advance payments if the dispute over its claims over US$1.6 billion in cost
overruns is not solved. It added that the expansion would not be completed until June 30, 2015 at the
earliest and that it would halt work as from Monday on a third set of locks unless the Canal Authority
footed the bill. But it also sought to downplay the dispute, Reuters reported.
Maritime security analyst José Luis Pizzi told the Herald: "Beyond the conflict, the Panama Canal
expansion has raised enormous expectations and has required enormous investments and, sooner or
later, it will be completed."
scant ARGENTINE TRADE THROUGH panama canal
Pizzi said that only six percent of Argentina’s total trade goes through Panama. "The major challenge to
Argentina’s trade does not come from the Canal, but from Brazil, which is restructuring its ports, both in
the south, such as Santos, and the north, such as Santarém, on the Amazon River.
"Argentina is soybean-dependent and Brazil is commercially much stronger. If they complete the
expansion of Santarém, soybeans from Brazil will be much closer to the Panama Canal and with vessels
much larger than those serving Argentine ports. In an economy of scale that means much lower costs for
Brazilian soybeans.
Even with thousands of potholes and major cargo delays, Brazil became the world’s biggest soybean
exporter last year, Bloomberg News reported. Now it plans to blaze a short-cut through the Amazon
forest in what would be its biggest export route for soybeans and grain, linking soybean farms in its
hinterland to the Panama Canal and on to Asian buyers. Ships will shave two days off their route by
sailing west over the Pacific instead of a longer journey across the Atlantic and Indian oceans. That could
undercut futures prices in Chicago for soybeans, which are in high demand in China and used in
everything from meat substitutes to industrial oils.
Pizzi said that while Santarém would mean stiffer competition for Argentina, the ports of southern Brazil
are already a challenge for bulk cargo and containers coming from Argentina, and if Argentina does not
take the necessary measures Buenos Aires will become a feeder port, that is, a port that sends cargo to
be transhipped to larger vessels in Brazil.
PANAMA SEEN AFFECTING MORE CONTAINER TRADE
Alfredo Sesé, a Technical Secretary of the Rosario Stock Exchange, says: "I think that in the very short
the Panama Canal expansion will not have a devastating effect on Argentine trade. To start with, the
first impact will be on the container ships and not on the bulk cargo, and Argentina mainly exports
grains and oilseeds.
* By M. Fernanda López Ortiz
"Also, let’s not forget that the new Panama Canal is being born already small and some of the larger
container ships would be unable to cross it already now. In fact, the Canal authorities are planning to
build facilities to allow containers carried by the vessels that are unfit to cross the Canal, be loaded onto
other ships to reach the other coast."
In your opinion, what should be the main guidelines to follow?
This new policy should begin by clearly defining whether to continue maintaining Buenos Aires (or
alternatively a metropolitan area or another sea port area) as a concentration (hub) port operating as
today with the usual trans-oceanic traffic, rejecting fundamentalist theories which argue that the
Argentine market is Brazil-dependent and that large ships will only call on Brazilian ports without
reaching Buenos Aires and that, as a consequence, Buenos Aires will become a feeder of Brazil’s
southern ports. It is easy to infer that the lack of action and the lack of a national logistics plan and a of a
port plan in particular, contributes to the loss of competitiveness of Buenos Aires — and, consequently,
Montevideo’s port can capture the growth of Argentine load — and also timidly leads other minor
domestic ports, together with shipping companies, to start implementing services with transshipment in
Brazilian ports.
So far, albeit with some limitations, the larger vessels serving the east coast of South America manage to
enter Buenos Aires, but if the works proposed by private terminals materialize, and the port authority
co-operates by improving the accesses to the port, there will not be difficulties for several years in
berthing those vessels.
Contrary to what the advocates of orthodox theory claim, as long as the participation of emerging
economies in global trade continues to grow (they now represent over 60 percent of the total, according
to the United Nations Conference on Trade and Development, UNCTAD), these markets and exporters
and importers will be those discussing on an equal footing with the large shipping companies.
How dou you see the port of Buenos Aires?
Buenos Aires has the “weakness” of being the last stop-over of the journey and, therefore, can be lifted
easily, but this today is cushioned because precisely for being the last stop, ships arrive very lightly
loaded and need a lower draft than if they arrived fully loaded and, also, Argentina has a real “strength”
of having available, for each port service, a significant volume of import or export containers in relation
to the capacity of these vessels.
Besides, the cyclical fluctuations of the world economy over almost the last two decades taught the
porta-container shipping sector, as well as terminal operators, to surf the general and also the particular
crises, adjusting or expanding availability of transport capacity in line with the market. This ensures that
there will always be shipping companies interested in maintaining ocean routes to Argentina, even at
the current operational capacity of our ships because they will be able to compete in the face of the
surcharges transshipping in Brazil involves today. In addition, the fact that the trans-oceanic route starts
in a foreign port such as in Brazil or Uruguay, actually involves a loss of national sovereignty in the
transfer of the freight policy decision-making centre to another country where, obviously, during
logistics emergencies, in business opportunities and any possible foreign trade growth, domestic cargo
will always have priority over Argentine. Proof of this is that even today the Brazilian ports are
* By M. Fernanda López Ortiz
expensive, with serious operational problems handling their own cargo and are not interested in
competing to capture regional transshipments.
Once again, the country must define which ones will function as hub ports. There is no doubt that in the
very long term Argentina will have to think of a non-river port to fulfill this role. Its installation site
should start being considered now as its planning, location, construction, and financing and will require
25 or more years. To achieve this goal without trepidation it is necessary to use Buenos Aires, with the
mentioned infrastructure improvements, integrating it into a metropolitan harbour front with Dock Sud
and La Plata.
What role should the Paraná-Paraguay waterway play?
Another basic pillar which the port and navigation policy must include is the correct use of the ParanáParaguay hidrovía. This is simply an extraordinary waterway linking the provinces of northeastern
Argentina via ports even more than road and rail transport. But along this mainly arrival and exit path, a
navigation precedent should be granted to regional productions, grain and fuel transport and increasing
Mercosur traffic.
If to neutralize the metropolitan transshipment ports such as Buenos Aires or Dock Sud the upstream
navigation of porta-container feeder ships grows without limit, it would mean an unnecessary conflict
for the waterway.
Argentina complains that within Mercosur there are asymmetries basically favouring Paraguay...
The management of the Paraguayan load deserves special consideration. The container traffic of the
Paraguayan foreign trade has been an eternal partner of the Argentine port system. Today, in the face of
our indifference and their growth and the modernization of their river transport fleet, Paraguay is
obliged to progressively replace us. Even less attention is being paid to participating in the growing
traffic which Bolivia and Brazil have launched to take out their production through the waterway.
The waterway is a river corridor, how do you see the future of the maritime ports?
Broadly speaking, the further development of the national maritime waterfront, with the particularities
that each area has, is the third cornerstone for a new port policy. The sea coastline is so varied that, to
grow, it is only necessary that regional economies recover their significance and, accordingly, to plan
their logistics to make them more competitive. In this growth two central items are involved: an
appropriate shipping development policy, and an adequate Customs policy which matches the
entrepreneurs’ efforts.
It is worth noting the smooth functioning of the port of Bahía Blanca and, to a smaller degree, that of
Quequén, probably due to their management system based on mixed private-public boards and a good
level of transparency. Both ports, with their own resources, maintain their infrastructure updated and
make an orderly preparation to compete in the global markets they operate in.
The situation of the Patagonian ports is different.
They are linked to their regional productions or cruise tourism and/or Antarctic activities. Their
competitiveness will depend more on the shipping policy the country adopts than on their own efforts.
* By M. Fernanda López Ortiz
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Inflation reaches 5 percent in January, former head of INDEC
The inflation rate in January reached 5 percent due to “tourism effect” and last week’s devaluation,
former head of INDEC statistics bureau Graciela Bevacqua said today.
The main price increments were registered in transportation, fuel and foods, Bevacqua specified.
According to the economist, last year’s inflation reached 27.4 percent, and December’s rate was 2.9
percent.
Bevacqua, who was fired from INDEC in 2007 when former Commerce secretary Guillermo Moreno
intervened the institution, considered that the new inflation rate to be revealed in February “can’t be
credible because the organism remains politicized”.
Mujica: ‘Bilateral relation is being restored’
Uruguay’s head of state, José 'Pepe' Mujica assured the bilateral relation “is being restored”, as he
anticipated that efforts will continue in order to overpass the differences with Argentina, after a
meeting he held with President Cristina Fernández de Kirchner in Cuba.
“The bilateral relation is being restored. Countries can’t move, so we have to keep on working,” assured
Mujica in a press conference at the Celac summit celebrated in Havana.
In addition, the Uruguayan leader stated that “I don’t know if we are going to have another meeting,” in
allusion to Fernández de Kirchner.
Mujica described the reunion with his counterpart as “positive,” and emphasized that it “helped to
reduce tensions over the regional situation.”
Continuing Argentine protests over the ex-Botnia plant situated on the Uruguay River, as well as trade
disagreements, have caused relations between the traditionally close allies to plummet in recent years.
* By M. Fernanda López Ortiz