Argentina: Cold Season for Investors
BY CHRONICLE STAFF
Cristina Fernandez - the frontrunner in Argentina's presidential elections next month - is likely counting the days until she assumes office, but she may not be getting exactly what she wants.
Her husband, Nestor Kirchner, has presided over a fast-growing economy the past four years, but Fernandez will have to face an economy that is increasingly strained as a result of the energy crisis, mounting inflation and reduced foreign investments. She also will face continued demands to pay Argentina's defaulted debt.
SHELL AND EXXONMOBIL OUT?
Fernandez' first crisis may turn out to be the exit of Shell and ExxonMobil (Esso) from Argentina. "Price controls and the government's approach to fuel supply are likely to force Shell and Esso to leave the country," UK-based risk consultancy Exclusive Analysis said last week.
Shell officials are now under threat with imprisonment and the company faces fines for what the government claims are violations of a little-used 1974 law. Shell denies any wrongdoing.
"Shell Argentina is respectful of the law and we fulfill our obligation with our customers from day one," the company said in a statement. "We will vigorously defend our position at the judiciary."
Keywords: PDVSA-ENERSA, Juan Jose Aranguren, J. P. Morgan, American Task Force Argentina, World Bank, Inter-American Development Bank, INDEC
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From: alejandro herrera
Second, inflation risks exist but if put in perspective, an economy coming out from a large devaluation and undergoing recovery and further expansion (43% of GDP growth since 2003) will have price adjustment of a sizeable proportion. It is simple economics, regardless of gov expenditures. It is worth noting that government in Argentina is 24% of GDP (39% in Brazil, 30% in Mexico). Besides, Argentina still has a government surplus AFTER debt payments.
From: Philip
From: Vladimir Torres
Is this bad for foreign investment? Absolutely.
But don't cry for me Argentina, Chavez pays the bill!
