Venezuela and President Chavez And other Business issues in South America

Venezuela is a country rich in natural resources. It has large deposits of coal, oil, iron ore, bauxite and gold. It is the 5 th largest oil exporter in the world Yet many people (up to 70%) live in poverty. In 1998 the people elected left wing politician Hugo Chavez as President

Venezuela is a country rich in natural resources.

It has large deposits of coal, oil, iron ore, bauxite and gold. It is the 5 th largest oil exporter in the world

Yet many people (up to 70%) live in poverty.

In 1998 the people elected left wing politician Hugo Chavez as President

President Hugo Chavez

Nationalisation: Public Ownership Chavez wants to turn Venezuela into a socialist state, perhaps modelled on Cuba. Chavez has taken control of foreign owned cement, telecommunications, electricity, oil and gas companies. There is a worry that if he takes over firms that are well run he can only do harm. Chavez believes companies should concentrate on the domestic market before overseas sales, and has branded his reforms as "21st Century socialism".

Chavez wants to turn Venezuela into a socialist state, perhaps modelled on Cuba.

Chavez has taken control of foreign owned cement, telecommunications, electricity, oil and gas companies. There is a worry that if he takes over firms that are well run he can only do harm.

Chavez believes companies should concentrate on the domestic market before overseas sales, and has branded his reforms as "21st Century socialism".

Minimum Wage Venezuela have the highest minimum wage in South America. It is currently at $372 per month. However there are inflation worries in the country just now. Pay deals are soaring to 30% to offset huge rises in prices.

Venezuela have the highest minimum wage in South America.

It is currently at $372 per month.

However there are inflation worries in the country just now.

Pay deals are soaring to 30% to offset huge rises in prices.

Inflation The rise in prices has forced President Chavez to bring in 3 measures: Cancel a Foreign transaction tax to help Venezuelan firms export and trade abroad Relax currency exchange controls, encouraging trade with the USA Create a $1bn fund for food, oil and manufacturing

The rise in prices has forced President Chavez to bring in 3 measures:

Cancel a Foreign transaction tax to help Venezuelan firms export and trade abroad

Relax currency exchange controls, encouraging trade with the USA

Create a $1bn fund for food, oil and manufacturing

Bolivia Bolivia has also recently nationalised oil, gas and telecoms companies. The famous Lake Titicaca is also the scene of a rise in oil smuggling. It is estimated at $55m per year in losses for the Bolivian Treasury.

Bolivia has also recently nationalised oil, gas and telecoms companies.

The famous Lake Titicaca is also the scene of a rise in oil smuggling. It is estimated at $55m per year in losses for the Bolivian Treasury.

Peru Peru has created its first Environment ministry. Peru is reckoned to be one of the 3 most endangered countries by global warming Also the Achuar tribe of the Amazon are currently suing Occidental Petroleum of LA over the oil giant allegedly contaminating their rainforest home La Oroya is in the top 10 most polluted places on Earth with some of the 3000 residents having 3 and a half times more lead in their blood!

Peru has created its first Environment ministry. Peru is reckoned to be one of the 3 most endangered countries by global warming

Also the Achuar tribe of the Amazon are currently suing Occidental Petroleum of LA over the oil giant allegedly contaminating their rainforest home

La Oroya is in the top 10 most polluted places on Earth with some of the 3000 residents having 3 and a half times more lead in their blood!

Mount Toromocho

Peru and links with China Mount Toromocho has been sold to a Chinese firm! The Peruvian government is happy with the $3bn (£1.53bn) that Chinalco will invest in the Toromocho mines. The Chinese will be even happier. They have got themselves a bargain. The copper Chinalco extracts from Toromocho will cost something like US$410 (£210) per ton. Today, the price for copper on the London Metal Exchange was $8,255 (£4,220) - 20 times more. Chinalco stands to make a 2,000% profit on its investment.

Mount Toromocho has been sold to a Chinese firm!

The Peruvian government is happy with the $3bn (£1.53bn) that Chinalco will invest in the Toromocho mines.

The Chinese will be even happier. They have got themselves a bargain.

The copper Chinalco extracts from Toromocho will cost something like US$410 (£210) per ton. Today, the price for copper on the London Metal Exchange was $8,255 (£4,220) - 20 times more.

Chinalco stands to make a 2,000% profit on its investment.

Ecuador 6 million people live on or below the poverty line, thousands have no running water and more than a million have migrated, mostly to Spain and the USA. Ecuador is the world's largest producer of bananas, and has huge supplies of oil and a thriving tourist industry.

6 million people live on or below the poverty line, thousands have no running water and more than a million have migrated, mostly to Spain and the USA.

Ecuador is the world's largest producer of bananas, and has huge supplies of oil and a thriving tourist industry.

Chile In 2006 the Escondida copper mine – the world’s biggest – closed down due to workers going on strike. It accounts for 8% of the worlds copper. The company offered a 3% pay rise; the workers wanted 10%, down from an original demand of 13%. They also wanted a $30,000 bonus, to share in the windfall the company enjoyed from high copper prices; managers offered a little over half that.

In 2006 the Escondida copper mine – the world’s biggest – closed down due to workers going on strike. It accounts for 8% of the worlds copper.

The company offered a 3% pay rise; the workers wanted 10%, down from an original demand of 13%. They also wanted a $30,000 bonus, to share in the windfall the company enjoyed from high copper prices; managers offered a little over half that.

Key Terms broken off talks stopped or interrupted negotiations dispute argument or disagreement majority owned when more than half the shares in a company are owned by someone – whether a person or another company a wide gulf a big gap, in this case meaning a big difference between the two sides

broken off talks stopped or interrupted negotiations

dispute argument or disagreement

majority owned when more than half the shares in a company are owned by someone – whether a person or another company

a wide gulf a big gap, in this case meaning a big difference between the two sides

bonus an extra payment, on top of the normal salary share in the windfall to have part of an unexpected financial benefit used extensively used a lot or widely

bonus an extra payment, on top of the normal salary

share in the windfall to have part of an unexpected financial benefit

used extensively used a lot or widely

Chile v Peru The two countries have a history of disputes dating back to the 19th Century, when Chile fought the War of the Pacific against Peru and Bolivia from 1879 to 1883, winning Bolivia's outlet to the sea and extensive areas from Peru. In 2002 they argued over the rights to a brandy drink called Pisco Now they are squabbling over the potato! The origin of the spud can be traced back 7,000 years to Peru.

The two countries have a history of disputes dating back to the 19th Century, when Chile fought the War of the Pacific against Peru and Bolivia from 1879 to 1883, winning Bolivia's outlet to the sea and extensive areas from Peru.

In 2002 they argued over the rights to a brandy drink called Pisco

Now they are squabbling over the potato! The origin of the spud can be traced back 7,000 years to Peru.

Brazil Brazil is Latin America’s largest economy. Brazil's natural resources, particularly iron ore, are highly prized by major manufacturing nations, including China. The development of offshore fields, the nation has become self-sufficient in oil, ending decades of dependence on foreign producers.

Brazil is Latin America’s largest economy.

Brazil's natural resources, particularly iron ore, are highly prized by major manufacturing nations, including China.

The development of offshore fields, the nation has become self-sufficient in oil, ending decades of dependence on foreign producers.

Argentina Cattle and beef is important in Argentina. In 1871 the first Aberdeen Angus were shipped from Scotland to Buenos Aires. Now 65% of all cattle are Aberdeen Angus. Seventy years ago, Argentina was the seventh richest country in the world. In 2002, the Argentine currency, the peso was devalued by 30%.

Cattle and beef is important in Argentina. In 1871 the first Aberdeen Angus were shipped from Scotland to Buenos Aires. Now 65% of all cattle are Aberdeen Angus.

Seventy years ago, Argentina was the seventh richest country in the world.

In 2002, the Argentine currency, the peso was devalued by 30%.

Uruguay Colonial towns, beach resorts and a year-round mild climate have contributed to a growing tourist industry. The economy has also benefited from offshore banking. A dependence on livestock has left Uruguay vulnerable to world commodity prices. Recessions in Brazil and Argentina - its main export markets and sources of tourists - propelled the country into economic crisis in 2002.

Colonial towns, beach resorts and a year-round mild climate have contributed to a growing tourist industry.

The economy has also benefited from offshore banking.

A dependence on livestock has left Uruguay vulnerable to world commodity prices.

Recessions in Brazil and Argentina - its main export markets and sources of tourists - propelled the country into economic crisis in 2002.

Paraguay Paraguay is now the world's fourth largest exporter of soya. Tensions have risen in the countryside since centre-left President Fernando Lugo took office in August, promising land reform. Under 2% of landowners are said to control 70% of the arable land.

Paraguay is now the world's fourth largest exporter of soya.

Tensions have risen in the countryside since centre-left President Fernando Lugo took office in August, promising land reform.

Under 2% of landowners are said to control 70% of the arable land.

Visit: www.mrmcgowan.blogspot.com Sources: BBC Business News

Sources: BBC Business News