Saturday, May 22, 2004
[ECON\NOTES]Argentina's Troubles
Article on Argentina and the energy-supply troubles of Latin America (South America)(by Grant Nulle). Describes: (1) the historical background in Argentinian policy of the last couple of decades; (2) the seminal measure of price-controls (currency controls?) taken by the Argentinian government (Argentina) in 2002; (3) its effects in altering the demand for various energy sources -- and then also in international affairs, namely (4) supply disruption and tensions in Chile as against Argentina, her neighbor; and (5) between Bolivia and Chile, with the former as a potential energy supplier but with feelings of resentment about past wrongs complicating the picture. And so on.
Some items:
* *Bolivia and Chile (Point 5).* The 19th century War of the Pacific (?; 1879 forward) between these two resulted in Bolivia losing access to the natural-gas-rich coast (Alama-something). These days, Chile faces a supply shortage consequent to Argentina's actions. It looks to Bolivia -- but the latter, its resentment over this history and its irredentist claims, balks.
* *Currency controls (Point 2).* Argentina recently defaulted on its debt. It devalued its currency. Electricity was priced in terms of dollars. The price in terms of its currency -- the peso -- should have risen, to keep with the change (in monetary (currency) supply and demand). Fiats prevented this. Supply shortages resulted.
* *Venezuela and barter.* Argentina looks to compensate for lost supply by taking action itself. One such action: exchange beef (and more) for energy, with Venezuela and its national energy company.
A fascinating situation.
Some items:
* *Bolivia and Chile (Point 5).* The 19th century War of the Pacific (?; 1879 forward) between these two resulted in Bolivia losing access to the natural-gas-rich coast (Alama-something). These days, Chile faces a supply shortage consequent to Argentina's actions. It looks to Bolivia -- but the latter, its resentment over this history and its irredentist claims, balks.
* *Currency controls (Point 2).* Argentina recently defaulted on its debt. It devalued its currency. Electricity was priced in terms of dollars. The price in terms of its currency -- the peso -- should have risen, to keep with the change (in monetary (currency) supply and demand). Fiats prevented this. Supply shortages resulted.
* *Venezuela and barter.* Argentina looks to compensate for lost supply by taking action itself. One such action: exchange beef (and more) for energy, with Venezuela and its national energy company.
A fascinating situation.
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