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.

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: Continue reading »

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. Continue reading »

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, FondenContinue reading »

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. Continue reading »

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. Continue reading »

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.” Continue reading »

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. Continue reading »

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. Continue reading »

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. Continue reading »

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. Continue reading »

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. Continue reading »

For more than 50 years, citizens of Communist Cuba have been assured access to basic foodstuffs by the libreta, or ration book. But the subsidised system in increasingly controversial and last year Raúl Castro, the country’s president, rubbished it as “paternalistic, irrational and unsustainable”.

Nevertheless, across the Caribbean, Castro’s friend and colleague Nicolás Maduro of Venezuela is planning a similar system in a bid to combat the shortages that are ravaging the home of 21st century socialism. Maduro said his government would introduce a rationing system using mandatory fingerprinting in supermarkets, calling it “perfect” and an “anti-fraud blessing”Continue reading »

Is Bolivia ready to improve its image among foreign direct investors? A settlement with one claimant and an order to pay another at the end of last week suggest now would be a good time to do so – especially as the country tries to diversify away from its reliance on commodity exports and as President Evo Morales (pictured) prepares to seek re-election for a third term in October. Continue reading »

Peru’s economy is in the spotlight, going through its worst time since the global financial crisis. But Julio Velarde, Peru’s central bank chief, told beyondbrics on his way to the annual meeting of financial policymakers at Jackson Hole in the United States that this is simply, “a rough patch.”

Maybe more like a pothole, some may say, as the economy expanded just 0.3 per cent in June compared with a year earlier. Growth in Peru’s economy, once feted as a star inSouth America, slowed to 3.3 per cent in the first half of 2014.

A drop in investments and tumbling earnings from mineral exports caused by weaker prices and softer demand from Asia took a heavy toll. Lower mining output in the world’s third largest copper producer was also caused by issues at large mines. Continue reading »

Everyone loves the biblical story of the prodigal son. On Wednesday that tale received a touch of market realism when Standard & Poor’s, the credit ratings agency, decided to raise the rating by a notch of a serial defaulter which has been recently welcomed back by the debt markets: Ecuador.

S&P raised the Andean country’s long-term sovereign credit rating to B+ from B, with a stable outlook. While the new rating still leaves the country below investment grade Ecuador’s leftist President, Rafael Correa, is gaining some praise when it comes to economic management. Continue reading »