Coveted and criticized, Latin America's rich multiply

Yahoo – AFP, Katell Abiven, 22 June 2015

Mexican telecoms magnate Carlos Slim, whose $77 billion fortune is the

second-largest in the world according to Forbes (AFP Photo/Yuri Cortez)

Mexican telecoms magnate Carlos Slim, whose $77 billion fortune is the second-largest in the world according to Forbes (AFP Photo/Yuri Cortez)

Montevideo (AFP) - They buy 10 Porsches a day and travel the world by private jet, toting their Louis Vuitton bags and leaving behind a faint scent of Chanel.

They are Latin America's super-rich, and they are multiplying faster than anywhere in the world, coveted by luxury brands keen to tap their buying power, but criticized for paying low taxes in a region plagued by inequality.

Latin America, a region of some 600 million people, is home to nearly 15,000 "ultra high net worth" individuals, or people with fortunes of at least $30 million, according to luxury industry consultancy Wealth-X.

The number rose five percent last year, while the number of billionaires rose to 151, a 38 percent increase.

That was the fastest growth rate for billionaires of any region on Earth.

Natixis Global Asset Management, a firm that specializes in managing large fortunes, recently launched its first Latin American offices, in Mexico City and Montevideo.

"We've clearly identified it as one of the regions where individual wealth is in an exceptional growth phase," said Sophie del Campo, head of the firm's Iberian division in Madrid.

Ensconced behind the high walls of their luxury villas, the mining magnates, telecoms tycoons, large landholders and others who make up Latin America's uppermost crust can be less visible than the region's poor.

But they are the flipside of its intractable inequality problem.

Their lavish lifestyles and growing numbers are attracting keen interest from the global luxury industry, eager to expand to new markets and court new customers in existing ones.

Porsche is one example. Since arriving in Latin America 15 years ago, the German sports car maker has increased annual sales to the region from less than 300 vehicles to nearly 3,900 vehicles, said George Wills, president of Porsche Latin America, which is based in Miami.

The region's largest economies, Mexico and Brazil, remain the "volume drivers," he said.

"But if you look in terms of the markets themselves, the markets that are enjoying good growth are markets like Peru, Colombia, Panama... with 60 percent growth in some of them."

According to market research firm Euromonitor, the Latin American luxury market will total $26.5 billion in 2019, up 88.8 percent from 2014 -- the strongest growth in the world.

The boom applies to big-ticket luxuries, too.

Mexico is the world's second-largest market for private jets, behind the United States, with Brazil poised to surpass it within the next decade, according to a recent market study by Brazilian jetmaker Embraer.

'Fiscal justice'

The ultra-wealthy have varied profiles, from Mexican telecoms magnate Carlos Slim, whose $77 billion fortune is the second-largest in the world according to Forbes, to Brazilian beer magnate Jorge Paulo Lemann (net worth: $25 billion), Chilean mining scion Iris Fontbona ($13.5 billion), to Colombian banker Luis Carlos Sarmiento ($13.4 billion).

What is clear is that their numbers are growing, in some cases because family fortunes have been divided up among heirs, said Mykolas Rambus, the chief executive of Singapore-based Wealth-X.

"The amount of wealthy people globally is booming and that is true in Latin America: it's growing at a very good pace," he said.

But the super-rich also face growing scrutiny in countries like Nicaragua, where 42.5 percent of the country lives below the poverty line but 210 ultra-wealthy individuals control a combined fortune of $30 billion, equal to 2.5 times the country's annual economic output.

"The main characteristic of inequality in Latin America is not that there are a lot of poor people, but that there are a few people who have a lot," said Juan Pablo Jimenez, an economist at the UN's Economic Commission for Latin America.

Moreover, the latter "pay very low taxes, both in international terms and compared to what they are supposed to pay," he said.

"Taxes on wealth are very low in Latin America, and inheritance taxes are almost nonexistent."

Last year, humanitarian group Oxfam called for more "fiscal justice" in the region to fight inequality.

But it is easier said than done.

Ecuador's socialist President Rafael Correa had to back down last week from plans to start taxing inheritances of more than $35,400 after an outcry from the business world.

NY governor heads U.S. trade mission to Cuba

English.news.cn   2015-04-21

HAVANA, April 20 (Xinhua) -- A trade mission led by New York State Governor Andrew Cuomo kicked off on Monday a two-day visit to Cuba, Cuban daily Granma reported.

The mission aims to ensure the state is "present (from the) beginning of the adventure," said Cuomo, referring to the process launched by Cuba and the U.S. to normalize ties after more than five decades of animosity.

"We are assisting the beginning of the transition in the relationship between the two countries, which is going to have significant economic benefits for both sides," Cuomo told reporters as he arrived at Havana's Jose Marti international airport.

The governor was greeted by Josefina Vidal, general director for U.S. affairs at the Cuban Foreign Affairs Ministry.

Cuomo, the first U.S. governor to officially visit the island since Cuba and the U.S. decided to restore diplomatic ties in December, heads a delegation of business leaders, including Robin Hayes, CEO of low-cost carrier JetBlue; Walt M. Macnee, vice chairman of credit card company MasterCard; and Freda Lewis-Hall, vice president of pharmaceutical giant Pfizer.

"As the door begins to open between U.S. and Cuba, we want New York businesses to be first out of the gate when it comes to building trade partnerships," Cuomo posted on Twitter a day prior to the trip.

In addition to industry leaders, the delegation included representatives of educational and research institutions based in New York, and local politicians, such as New York State Assembly Speaker Carl Heastie.

The visit is part of Cuomo's Global NY initiative, to boost trade and investment for his state, the daily said.

"The representatives in the New York delegation will help ensure the companies of the Empire State are at the forefront when the doors open to a market that has been closed to U.S. companies for more than half a century," Cuomo said in a press release issued before the trip.

Top Brazilian politicians to be investigated in Petrobras graft scandal

Brazil's top court has given the green light for an inquiry into whether dozens of top lawmakers received kickbacks from state-controlled oil company Petrobras. The politicians were previously immune from scrunity.

Deutsche Welle, 7 Mar 2015

Brazil's Supreme Court will investigate the speakers of both houses of Congress and more than two dozen other politicians in connection with a multibillion-dollar kickback scheme from state-controlled oil giant Petrobras.

A court official said on Friday that 54 people were under investigation, including senators and congressmen, all but one from the ruling coalition of President Dilma Rousseff, who was narrowly re-elected last year and is struggling to rehabilitate a flagging economy.

Rousseff allies implicated

The Petrobras kickback scheme is believed to have stretched back for decades. The firm allegedly paid kickbacks amounting to $3.8 billion (3.4 billion euros) for overpriced contracts. The politicians involved in the probe include the president of the Senate, Renan Calheiros, and the speaker of the Chamber of Deputies, Eduardo Cunha, both of the Brazilian Democratic Movement Party (PMDB), the main coalition ally of Rousseff's Workers' Party (PT).

Two former members of Rousseff's cabinet are also implicated, Senator Gleisi Hoffmann, who was chief of staff during the first Rousseff administration, and former energy minister Edison Lobao. The incident has undermined support for Rousseff, who was chairman of the board at Petrobras from 2003 to 2010, when the kickback scheme was allegedly still operating.

The lawmakers held immunity in the graft investigation until now, as elected politicians can only be tried by the highest court. The move follows a call from Brazil's Attorney General, Rodrigo Janot, on Tuesday for the Supreme Court to allow the politicians' activities to be scrutinized.

es/gsw (AP, Reuters)

Mexico rescues 129 workers 'abused' by S.Korean firm

Yahoo – AFP, Yemeli Ortega, 6 Feb 2015

Workers at Yes International, a company run by South Koreans, watch as Mexican

 police conduct a raid on February 04, 2015 in Zapopan, Jalisco state, in this 

Mexican Interior Ministry photo (AFP Photo)

Mexico City (AFP) - Mexican authorities have rescued 129 workers, including six children, who said they were exploited and physically and sexually abused at a garment factory run by South Koreans, officials said.

Four South Korean nationals have been handed over to prosecutors in the western state of Jalisco after workers identified them as the owners or managers of the company named Yes International, the National Migration Institute (INM) said.

Workers at Yes International, a company

 run by South Koreans, watch as Mexican

 police conduct a raid on February 04, 2015

 in Zapopan, Jalisco state, in this Mexican

Interior Ministry photo (AFP Photo)

Authorities raided the company in the town of Zapopan on Wednesday after receiving an anonymous tip, INM coordinator Ardelio Vargas Fosado told reporters, describing the South Koreans as a "gang of suspected human traffickers."

Officials rescued 121 women and eight men, including six minors who were 16 and 17 years old.

The workers told prosecutors that they were "victims of physical and sexual abuse, as well as threats, psychological harm and grueling work days," Vargas Fosado said.

The four South Koreans could not prove whether they legally lived in Mexico. The South Korean consulate was notified to provide assistance to the suspects, officials said.

Jalisco's chief prosecutor, Luis Carlos Najera, said authorities are investigating whether child abuse and sexual crimes were committed.

The employees toiled in "unsanitary" conditions, with pollutants in their place of work, and the material they handled posed a fire hazard while the company had no fire safety equipment, said Victor Manuel Torres Moreno, a labor ministry official.

Officials also said the employees endured verbal abuse; lacked contracts; worked more than the legal eight hours per day; only had 15-minute lunches instead of half an hour; were not paid for overtime; and were not given health benefits.

The minors were handed over to their parents following the operation, but authorities are also checking their family surroundings.

Other workers were given psychological assistance.

AFP visited the work site and interviewed one of the workers, who denied physical or sexual abuse. But she did say there was verbal abuse by one of the detainees. She attributed this to Asian culture, in which she said she understood that people yell at each other a lot.

The interior ministry released pictures of the operation showing workers standing next to several boxes of clothes and stacks of textile material inside the factory, which had high walls.

Mexican authorities have rescued 129 workers, including six children, who said 

they were exploited and physically and sexually abused at a garment factory

 run by South Koreans (AFP Photo)

It was not the first time that authorities found workers abused by employers in Jalisco.

In 2013, police rescued at least 275 people, including 39 teenagers, who were being held in slave-like conditions in a camp in Toliman, where tomatoes were sorted and packed for export.

The victims were rescued when a worker escaped and made it to Jalisco's state capital to file a complaint.

The tomato farm's workers were kept in overcrowded housing and were paid half of what had been offered, much of it delivered in vouchers redeemable at the company store, where items were sold at a high markup.

Business interest piqued by prospect of US, Cuba trade

Yahoo – AFP, Diego Urdaneta, 23 Dec 2014

US businesses are lining up to take advantage of the enormous investment potential of Cuba, all but untouched for more than half-a-century by American capitalism.

Last week, President Barack Obama announced a breakthrough in US relations with Cuba, reviving diplomatic ties and making some commercial transactions easier.

No sooner was the historic announcement made, than the American business (Other OTC: ARBU - news) community began assessing Cuba's untapped markets.

Emilio Morales, president of the Miami-based Havana Consulting Group, described a "tsunami" of interest among investors, particularly in Florida, just 90 miles (144 kilometers) from the island.

No-one, he said, wants to miss out on such a market, fueled by decades of pent-up demand.

"There are a lot of people in the US business community who are in panic," said Morales, who told AFP that since last week, his phone has been ringing off the hook.

The president of the US Chamber of Commerce, Thomas Donahue, representing business groups and companies, also spoke of a barely-contained enthusiasm to invest in Cuba.

"The chamber and its members stand ready to assist as the Cuban people work to unleash the power of free enterprise to improve their lives," he said in a statement.

The Small Business Administration, another interest group, was equally upbeat about the investment prospects.

"The best way to ensure opportunity and democracy in Cuba is by empowering the Cuban people ?- rather than denying them access to resources," said SBA President Maria Contreras-Sweet.

New markets for good, services

"At the same time, American businesses, small and large, stand to gain access to an important new market for goods and services only 90 miles from our shores."

America's farm states are particularly keen to sell corn, wheat, soy and other crops to Cuba, which has to import much of its food.

And there also has been interest from US technology firms in Silicon Valley in a market that is decades behinds the United States with respect to its high-tech infrastructure.

Morales said, however, that it may take many months before investors get to make good on that dream of increased trade, because of legislative hurdles in the United States.

"They want to hurry up, but it's not like that. There is an entire process that's only getting started now and that will last at least a couple of years," Morales said.

An act of Congress is needed to repeal the economic and travel embargo, put place a half-century ago and then strengthened in 1996 with the Helms-Burton Act.

Last week, Obama described the trade embargo as "self-defeating," but acknowledged that a congressional repeal would not be easy.

There is substantial opposition in Congress to doing away with the embargo -- particularly from the powerful bloc of Cuban-American lawmakers who want the administration to extract more concessions from the Havana government.

Chief among them is prominent Republican Senator Marco Rubio, incoming chairman of the US Senate's Foreign Relations Committee's subcommittee on Foreign Operations, who has vowed to do whatever is necessary to block normalization of relations.

Still, experts point to an altered business climate in just the few days since Obama announced the seismic policy shift.

There has been a "dramatic change in the tone of the conversation," said Pedro Freyre, a Cuban American attorney with the international division of the Akerman law firm.

One of the areas poised for the most dramatic growth is tourism.

Even with the embargo, there are already more than 90,000 US citizens who travel to Cuba each year.

That number is expected to grow once the Obama administration eases restrictions on how much they can spend and on the Cuban products they can bring home.

In the past few years, President Raul Castro already has put some reforms in place, allowing private restaurateurs, beauticians and other small business people to open up their own shops.

He also has relaxed some restrictions on travel outside the country and granted permission for Cubans to to sell real estate and cars for the first time in nearly 50 years.

But the creation of Cuba's nascent free market is nothing to the growth anticipated once the embargo is dismantled.

"The market will grow," said Morales, adding: "The process is going to take a while."

Related Article:

US announces historic thaw in relations with Cuba

Cuban cigars get shorter to counter anti-smoking laws

Google – AFP, Francisco Jara (AFP), 25 February 2014

Habanos SA president, Spanish Luis Sanchez Harguindey, looks on during

 an interview with AFP, on February 24, 2014, during the XVI Havana Cigar Festival

in Havana (AFP/File, Yamil Lage)

Havana — Shorter cigars that can be savored more quickly are Cuba's strategic response to global anti-tobacco campaigns.

"With restrictions around the world on where one can smoke, the logical answer is to provide the enjoyment of intense flavor in less time," Luis Sanchez-Harguindey, the co-president of Habanos SA, told AFP.

"Today's trend is to provide cigars to consumers that have a larger caliber but are shorter precisely so they can be smoked more quickly," the Spaniard said in an interview on the sidelines of Havana's annual cigar festival.

Habanos SA is a joint venture between Cuban state company Cubatabaco and the Franco-Spanish Altadis that was bought in 2008 by the British Imperial Tobacco Group.

One of the stars of the festival is one such new smoke -- the Partagas D6 -- that measures just 9 centimeters (3.5 inches) in length. In contrast, the longest Havanas can traditionally be more than twice that long.

Puffing on the new product takes about 15 minutes, according to Habanos SA.

Younger consumers and women increasingly are being targeted with milder, more refined flavors.

"There are other brands, like Hoyo de Monterrey, that allow for the introduction of more delicate flavors, more meant for young people," said Sanchez-Harguindey, a non-smoker who took to cigars when he arrived in Cuba in 1998 while working for a foreign bank.

"Traditionally, the cigar smoker is a man who is middle aged or older, especially because of the price of cigars," he added. "The most expensive products, like the Cohiba, aren't in everyone's reach."

A brand's image is also very important, according to Sanchez-Harguindey.

"We're seeing in our marketing studies that the average age of a Havana smoker is falling and that the number of women smokers is on the rise" even though they still only represent five percent of consumers, he added.

Sanchez-Harguindey expressed confidence Cuban cigars will remain a "globally unique product" thanks to the Caribbean country's climate, earth and centuries-old tobacco culture.

Tobacco is one of Cuba's top exports, behind nickel and biotech products.

On Monday, Habanos SA announced that Cuban cigar sales were up eight percent in 2013, reaching $447 million.

While Europe remained the top taker of the famous smokes, the greatest gains were seen in China.

Country-specific, the main markets for Havanas are Spain, France, China, Germany, Switzerland, Cuba, Lebanon and the United Arab Emirates, it said.

But Habanos SA faces a significant hurdle: It is unable to access the biggest global cigar market, the United States, due to an economic embargo imposed by Washington more than a half-century ago on communist Cuba.

As in years past, the 16th Havana Festival, featuring tours of tobacco plantations and cigar factories, culminates Friday with a gala dinner.

Related Article:

US bans bidis made by Indian tobacco company

Brazilian oil tycoon nears bankruptcy

Company owned by Eike Batista, who boasted he would be richest man in world, asks for protection from creditors

The Guardian, Jonathan Watts in Rio de Janeiro, Thursday 31 October 2013

Brazilian billionaire Eike Batista with a Mercedes-Benz SLR he kept in his
sitting room. Photograph: Eduardo Martino/Redux/Eyevine

The Brazilian owner of an oil company who – less than two years ago – boasted that he was on course to become the richest man in the world, took the first step in filing for bankruptcy yesterday after one of the most spectacular falls in global corporate history.

Lawyers from Eike Batista's firm OGX said they had asked a court in Rio de Janeiro to grant them protection from creditors.

The bankruptcy – said to be the biggest ever seen in Latin America – is the latest stage in the rapid break-up of the empire built by Batista, whose wealth was estimated at $34.2bn in March 2012.

Back then, his companies were expanding aggressively into offshore oil and gas fields, planning to build the biggest shipyard in the southern hemisphere, and bidding for everything from world cup stadium management to entertainment licenses.

But poor output from OGX's wells has prompted major investors to pull out of Batista's companies even more quickly than they rushed in. The share price of OGX has plummeted, and earlier this month the company failed to make an interest payment.

If the court approves the request, OGX will have 60 days to come up with a corporate restructuring plan.

The 56-year-old Batista – a former racing car driver – has already sold off his fleet of six private planes and helicopters, according to local media, and is dismantling his yacht.

Batista's demise may also have a wider impact on confidence in the economy, which limped along last year with growth of less than 1%.

Brazil Leader Accuses US of Spying for ‘Economic’ Interests

Jakarta Globe – AFP, September 10, 2013

An offshore oil drilling platform near Itacoatiara beach in Niteroi, Brazil.
(Bloomberg Photo/Dado Galdieri)

Brasilia. Brazil President Dilma Rousseff Monday accused the United States of spying on oil giant Petrobas for its own “economic and strategic” reasons — not for national security.

The latest allegations of online snooping by the National Security Agency emerged Sunday night when TV Globo reported Brazilian oil giant Petrobras — world leader in deep-water oil exploration — was among those targeted, along with Google and the French foreign ministry.

Rousseff said in a statement that, “if the facts are confirmed, it would be clear the espionage was not for security or the fight against terrorism, but to respond to economic and strategic interests.”

“Without doubt, Petrobras is not a threat to the security of any country,” the president said.

These attempts to steal “data and information are incompatible with democratic co-existence between friends,” she added, saying Brazil would “take all measures to protect the country, the government and its companies.”

Petrobras said in a statement it has highly qualified and constantly updated systems to protect its internal communications network.

Brazil’s foreign minister headed Monday to the Untied States where he is to meet this week with National Security Advisor Susan Rice over the spying row.

The meeting between Luiz Alberto Figueiredo and Rice is planned for Wednesday or Thursday in Washington, though the date has not been confirmed, a spokesman for the Brazilian foreign ministry told AFP.

Rousseff had expressed her “personal indignation” over the allegations of online snooping by the US National Security Agency during comments on the sidelines of the G20 summit last week in Russia.

The Brazilian leader had been scheduled to make a state visit October 23 to Washington, but Brasilia now says the trip depends on the US response to the spying allegations.

“The Brazilian government is determined to get clarification from the US government… and require specific action to remove the possibility of espionage once and for all,” Rousseff said Monday.

TV Globo reported Sunday a leaked US intelligence document highlighted Google, Petrobras, the French foreign ministry and SWIFT, a provider of secure financial messaging services to 10,000 banks and other financial institutions in 212 countries, as “targets” of the US online snooping.

The channel said it obtained the information from Glenn Greenwald, a blogger and columnist for the Guardian newspaper, who got secret files from former US intelligence contractor Edward Snowden.

US National Intelligence director James Clapper responded to the allegations in a statement, saying the US “collects foreign intelligence — just as many other governments do — to enhance the security of our citizens and protect our interests and those of our allies around the world.”

Agence France-Press

China to build logistics platform in Brazil

Want China Times, Kang Chang-jung and Staff Reporter 2012-11-19

Brazil's pavilion at the China Import and Export Fair in Guangzhou, Oct. 19.
(File photo/Xinhua)

The China Investment Corp, a sovereign wealth fund responsible for managing China's foreign exchange reserves, has formed joint ventures with large institutional investors from Singapore and Canada to purchase Brazilian assets worth more than US$1.4 billion in a bid to build the largest logistics platform in the booming South American country, our sister newspaper the Commercial Times reports.

CIC is teaming up with Singaporean warehouse operator Global Logistic Properties, the Canada Pension Plan Investment Board and Government of Singapore Investment Corp to form two joint-investment companies to purchase 40 properties from the Brazilian Prosperitas Logistic, which are worth around US$1.45 billion. CIC is expected to own a 34.2% share of the joint project.

About 88% of assets of the new two joint-investment companies will be located in the Brazilian cities Sao Paulo and Rio de Janeiro.

The deal follows CIC and GLP's joint purchase of Japanese logistics assets for US$1.6 billion at the end of last year. GLP is the logistics department under GIC and the world's largest warehouse operator, run dozens of logistics sites in China.

CIC has showed great interest in Brazil, attracted by strong market demand. In early Oct. 2010 market rumors said CIC contacted Brazil's finance ministry to discuss investing in Brazilian industry and agriculture. In Dec. 2011, CIC teamed up with international funds including GIC to purchase the new shares of BTG Pactual, the independent Brazilian investment bank, worth around US$ 1.8 billion. BTG currently has sites around Brazil, the US, Britain and Hong Kong with about 1,100 employees.

Bolivia nationalises Spanish-owned power grid

Bolivian troops occupy installations owned by Red Eléctrica, following Argentina's move to nationalise oil company

guardian.co.uk, Phillip Inman and agencies, Wednesday 2 May 2012

Bolivian president Evo Morales (second right) and members of his
government celebrate May Day. Photograph: EPA

The trend for South American nations to reclaim privatised energy businesses has strengthened after Bolivia's president Evo Morales said he planned to seize control of the main power grid from a Spanish-owned company.

The move is a blow to Red Eléctrica Corporacion, which has operated most of Bolivia's electricity distribution since the grid was privatised 15 years ago.

It follows Argentina's controversial move last month to take control of the country's oil company, YPF, from the Spanish energy company Repsol, which had a majority interest.

Spain's ambassador to La Paz expressed alarm that another overseas Spanish asset was effectively being seized. He said the electric grid takeover "is sending a negative message that generates distrust."

Morales chose to press ahead with the move on May Day, the international labour day, by ordering troops to occupy the company's installations.

Red Eléctrica is the sole operator of the transmission grid in Spain, and the Spanish government holds a 20% stake in the company.

Morales did not say how much the company would be compensated, but the nationalisation decree says the state would negotiate a compensation fee.

Morales said only $81m (£49.9m) had been invested in Bolivia's power grid since it was privatised in 1997.

The government, meanwhile, "invested $220m in generation and others profited. For that reason, brothers and sisters, we have decided to nationalise electricity transmission," he said.

Argentina president Cristina Fernández de Kirchner also blamed a lack of investment by Repsol for her decision to nationalise the oil companies assets.

Bolivian soldiers peacefully took over the company's offices in the central city of Cochabamba, hanging Bolivia's flag across its entry.

Red Eléctrica had no immediate comment.

The company owned 74% of Bolivia's electrical transmission network, or 1,720 miles of high voltage lines.

Two years ago, on May Day, Morales' government took control of most of Bolivia's electrical generation, nationalising its main hydroelectric plants.

Morales, Bolivia's first indigenous president, has moved to put energy, water and telecommunications under state control.

But analyst Joao de Castro Neves of the Eurasia Group said the president has been far more pragmatic and less radical than the leftist leaders of Venezuela or Argentina.

"He knows his limits," Castro Neves said. "The Bolivian state doesn't have the capacity to take over all these sectors, including mining, and maintain the high levels of investment they need."

He noted that Morales still hasn't come to terms for taking over several small mines whose nationalisation he announced last May Day.

Bolivia's government also has not been able to negotiate compensation for the power plants taken from GDF Suez of France and Britain's Rurelec.

In his first year in office in 2006, Morales announced he was "nationalising" the oil and gas sector. He began extracting concessions from multinational energy companies, renegotiating contracts to give Bolivians greater control of and a bigger share of profits from the natural gas industry, the country's biggest ahead of mining.

In 2008, he used May Day to announce the completion of the nationalisation of Bolivia's leading telecommunications company, Entel, from Telecom Italia.

The nationalisations have not saved Morales from widespread criticism by Bolivians upset over rising consumer prices, lower domestic oil production and discontent over government plans to build a highway through a lowlands nature preserve inhabited by Indians.

Morales' approval rating is down to about 40% from 69% when he began his second term in January 2010.

Related Article:

Argentinian president moves to nationalise Spanish-owned oil assets

Argentinian president moves to nationalise Spanish-owned oil assets

President Cristina Fernández de Kirchner shocks oil industry by planning to seize 51% of Repsol's Argentinian assets

guardian.co.uk, Terry Macalister and Uki Goñi in Buenos Aires, Monday 16 April 2012

The Argentinian president, Cristina Kirchner, said YPF had not produced
enough oil. Photograph: Pablo Porciuncula/AFP/Getty

Argentina sent shock waves through the oil industry by announcing plans to nationalise local oil assets controlled by a Spanish company, in a controversial move that threatens to sour the already troubled relationship between the two countries.

The move to seize 51% of Repsol's YPF business in Argentina sent the company's shares spinning down 18% on Wall Street and will worry other big foreign investors such as BP.

Cristina Fernández de Kirchner, Argentina's president, introduced the new measure to Congress in a bid to recover sovereignty over its national hydrocarbon resources.

Kirchner accused Repsol of failing to produce enough oil through YPF to meet Argentina's energy requirements. Repsol's alleged failure threatened to "practically turn us into an unviable country," Kirchner said. Economic and political interest in the country's hydrocarbons has rocketed since the end of last year when YPF announced it had discovered a shale oil site that could potentially yield 1bn barrels.

Politicians have accused Repsol of failing to invest enough in future production at a time when the high cost of oil is undermining the country's economy.

The nationalisation comes amid escalating threats against operators drilling for oil off the disputed Falkland Islands.

Argentina is expected to expropriate about 24% of YPF from Repsol and another 26% from Argentina's Peterson Group at a price yet to be determined by the government.

Kirchner said the price would be set by the national appraisal tribunal and insisted the business could continue to be managed "professionally". She said Argentina was one of the few countries that did not control its own oil.

YPF is Argentina's biggest oil company and was in the hands of the state until the early 1990s. It was acquired by the Spanish group in 1999 and the boss of Repsol, Antonio Brufau, has been in Argentina since last week trying to head off a takeover. He told Mitre, a local radio station: "You've got to talk, not impose."

Speaking in Madrid a few hours before the announcement, the Spanish prime minister, Mariano Rajoy, warned: "Wherever there is a Spanish company, the Spanish government will be there defending its interests as its own."

Last week, Spain's foreign minister, José Manuel García-Margallo, threatened to break off economic and fraternal relations with Argentina if Kirchner moved against YPF.

Independent petroleum experts were stunned by the development. "They are going to be closing the country as an investment destination," Anish Kapadia, an analyst at the London-based energy investment house Tudor Pickering Holt, told Bloomberg. BP, whose Pan American business in Argentina was a fully-integrated oil business covering exploration, production and petrol marketing, said it was unable to talk about what the nationalisation might mean for its business.

"We have not heard anything from the government. It is business as usual for us. I do not want to make a comment on someone else's business," said a company spokesman. BP tried to sell the business in 2010 for $7bn to Bridas Corporation, a deal which fell apart.

Kirchner's bill is expected to fly through Congress within the next couple of weeks thanks to the President's legislative majority.

Related Articles:

Argentina's YPF cuts computer links with Repsol

Spain's King Juan Carlos under fire over elephant hunting trip