Andres Schipani

Andres Schipani is the Andes correspondent for the Financial Times, covering Colombia, Ecuador, Peru, Bolivia and Venezuela. Before moving to Bogotá he was Miami correspondent and spent a period in New York. A native of Buenos Aires, he was educated in London, Cardiff, and Oxford. He was also a fellow in business, economics and financial journalism at Columbia University.

Wasn’t it the case that the compensation Venezuela was ordered to pay Exxon by a World Bank arbitration tribunal was a “favourable end” to a longstanding legal battle because it was considerably lower than the figure the company had sought?

It seems not, even if those were the words Venezuela’s foreign minister, Rafael Ramírez, penned in a statement this month. Fast forward two weeks and the International Centre for Settlement of Investment Disputes, or ICSID, said it had received a request from the Venezuelan government for a revision of the award.

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Venezuelans do not really dance the tango. But in the mooted sale of Citgo, the country’s US refining operation, that is what the socialist government has been doing – taking one step forward, two steps back.

In an interview published on Sunday by leading daily El Universal, Rodolfo Marco Torres, Venezuela’s finance minister, said the socialist government had scrapped any plans for a sale. “The sale of Citgo is discarded,” he told the paper. “Venezuela continues with Citgo and will continue making the investments in the refineries.” Read more >>

Bolivia, a key supplier of gas to the southern half of Latin America, is facing potentially harder times as falling international oil prices are piling downward pressure onto the price at which it sells its gas.

However, Carlos Villegas, the president of the state-run energy company, YPFB, is confident that if oil prices continue to hover around their current levels of $82 a barrel, Bolivia can avoid having to cut the prices of its exported natural gas.

“For Bolivia if the oil price lies in the range of between $80 and $100, the prices for [gas] exports will remain at their current level,” says Villegas Read more >>

Blame the Empire.

Venezuela’s socialist President Nicolás Maduro on Wednesday accused the United States of oversupplying the market -in his words, “inundating the market”- to rattle oil prices. His government is maybe having a tough time coping with a sliding crude price as oil accounts for some 95 per cent of export revenues of the energy rich country.

The toxic combination of dropping oil prices, an economy in shambles and lower levels of foreign reserves, has been reinvigorating fears of a debt default. Alejandro Grisanti, head of Latin America economics research at Barclays, said on Wednesday in report titled “Venezuela: The perfect storm”: Read more >>

Bolivian minister of rural development Carlos Romero (L), Bolivian Vice-President Alvaro Garcia Linera, Bolivian President Evo Morales, and Bolivian Minister of Finance Luis Arce

Bolivia’s president, Evo Morales – along with his deputy Alvaro García Linera, a suave Marxist mathematician – seems to be sailing towards his third presidential victory in Sunday’s election, thanks to a self-styled socialist agenda, popular among impoverished Bolivians.

Despite the government’s sometimes fiery anti-capitalist rhetoric, Morales has managed to triple the size of the Andean country’s economy, which is forecast to grow at South America’s fastest clip this year.

In the country’s capital, La Paz, Warwick-educated finance minister Luis Arce explained to beyondbrics the Bolivian model behind the economy’s success: Read more >>

Venezuela’s black market foreign exchange rate, the innombrable – or unmentionable in Spanish – broke the supersonic barrier of a 100 bolívares per dollar on Friday afternoon.

Amid the country’s deepening malaise, the fall has been a fast one: a year ago, a greenback fetched less than 40 bolívares fuertes. The fuerte – or strong in Spanish – has since become a wisp of a thing with the country’s biggest banknote – the 100 bolivar – now changing hands for a mere US dollar.

Nevertheless, Venezuelans are desperate to get hold of greenbacks to hedge against runaway inflation at 63 per cent. But due to tight controls imposed over a decade ago, the government sells a limited amount of dollars at overvalued rates ranging from 6.3 to roughly 50 bolívares, depending on the country’s multiple exchange rates. Read more >>

Venezuela’s economy is in disarray and many blame its tight foreign exchange system. Some within the socialist government are resistant to reform it, so for a while now, officials have instead opted to tinker with it. One could say they did so, albeit slightly, again on Thursday by allowing the state-owned oil company, PDVSA, to sell dollars at different rates.

PDVSA, the cash cow of the country with the world’s largest oil reserves, will now be able to use any of Venezuela’s three legal exchange rates when it contributes to the government’s social development fund, FondenRead more >>

Nicolás Maduro, Venezuela’s president, made his debut at the United Nations this week. While in New York he talked about Citgo, the US-based subsidiary of his country’s state oil company PDVSA, which is supposedly up for sale. Only last month, a government minister said Caracas was open to proposals.

Maduro seemed keen to scotch that idea. He said his government’s plans for Citgo were to keep on “strengthening our investments” – and to keep on warming the homes of some 150,000 families in the US through a subsidised heating oil programme launched by his mentor and predecessor, the late Hugo Chávez. Read more >>

Clorox, the cleaning products company, has finally bit the dust in Venezuela, announcing on Monday it was pulling the plug on the embattled Caribbean nation amid the country’s growing economic woes and restrictions.

“This is a very difficult situation for our company,” Don Knauss, chairman and chief executive, said in a statement.

Aside from price controls, foreign companies operating in the country have to deal with runaway inflation, which drives up operating costs. They also have to watch the money they make depreciate because Venezuela’s tight capital controls mean they cannot easily repatriate it. Read more >>

Anyone following events in Ecuador will know that Rafael Correa, the fiery president, is not one to avoid confrontation, as journalists, bankers and bondholders, among others, well know.

It seems he has found a new target: fast food, along with other threats to the nation’s health such as alcohol and cigarettes, on which he wants to raise taxes. According to the leftist president, with the proposed levy, “people will stop eating so many McDonald’s and Burger King hamburgers.” The move would also “favour the production of [Ecuadorian] food, our traditional gastronomy.” Read more >>

No devaluation here

One could say that a clear sign that Venezuela – a country where beauty enhancements are a serious issue – has hit rock bottom is that there is now a shortage of breast implants. But as FastFT reports, the real nervousness appears to lie elsewhere.

Growing concerns over the embattled Caribbean country’s ability and willingness to make $4.5bn of debt repayments next month has pushed the cost of insuring against a default to the highest in seven months. Read more >>

Colombia’s economy may have suffered a hiccup, but it continues to outperform its regional peers amid a slowing of the commodities boom.

The national statistics agency said on Tuesday that gross domestic product grew 4.3 per cent in the second quarter of the year, below analysts expectations. Read more >>

In less than 24 hours Peru’s economy – once feted as Latin America’s star and now struggling with a slowdown – suffered two blows. First, on Sunday evening, the surprising loss of its respected finance minister, Luis Miguel Castilla. Then, on Monday morning, the announcement that the Andean country’s gross domestic product grew below expectations in July.

Peru’s national statistics institute said the economy accelerated a meagre 1.16 per cent from the same month last year. This still means 60 months of continuous growth and an improvement from June, when Peru’s GDP growth nearly came to a halt, expanding just 0.3 per cent compared with a year earlier. Read more >>

Sometimes it’s hard to worry about Venezuela’s bondholders even as the possibility is raised of default. After all, the country’s citizens still have to deal with one of the world’s highest rates of inflation when they go to the shops.

This week, after some months of silence on the subject, the central bank reported that Venezuela’s annualised inflation rate hit 63.4 per cent in August. Read more >>

Colombia’s proposed higher wealth tax has been seen by some as vindication of Thomas Pikketty’s best-seller, Capital in the Twenty-First Century. But others, including some within the Colombian government, say the move to raise taxes on the rich simply brings an existing tax up to date.

Still, certain government insiders say Piketty’s writings have been much seen on the desks of senior officials in recent months. In his book, Piketty argues that inequality is a central feature of capitalism that can only be reversed through state intervention. Colombia, in spite of some recent advances, is still one of the world’s most unequal societies. Read more >>