VOXXI: Colombia’s depleting oil reserves

Colombia's depleting oil reserves
W. Alejandro Sanchez
VOXXI
December 10, 2013
Originally published: http://voxxi.com/2013/12/10/colombias-depleting-oil-reserves/

Amylkar Acosta, Colombia’s Minister of Mining and Energy, has stated that the country’s oil reserves currently amount to around 2,200 billion barrels. However, a division of the Colombian Ministry of Energy, the Unidad de Planeacion Minero Energetica, argues that unless new oil deposits are found, the country will run out of oil by the end of the decade.

In late November, Minister Acosta made the troubling declaration that the South American nation’s oil reserves are running out. Unless new deposits are found, the country’s reserves will be depleted within the next six to seven years. This will cause Colombia to lose its self-sufficiency when it comes to energy.

Colombia’s oil reserves

Acosta has not attempted to disguise the dire status of the situation, as he has declared that Colombia’s energy situation is “severely precarious.”

This is not the first time that Acosta has warned of increasing energy-related costs in the near future for his country. In a September 2013 interview with the Colombian daily El Pais, he categorically declared that the era of “cheap oil in the entire world is over. We have gone from an era of plentiful, cheap and reliable energy sources to a costly era.”

Concerns about Colombia’s oil production and reserves have been discussed widely by the Colombian media. A June 2012 article in the renowned Semana argues that “even though Colombia is not an oil-nation, it depends a lot on this industry.” The article also highlights that up to 40% of foreign direct investment in 2011 was directed to this industry.

Besides the obvious fact that a non-renewable resource is becoming scarce as a result of excessive extraction, the aforementioned Semana suggests that other issues are affecting oil production in the country.

The article mentions protests, the potential for higher taxes on oil industries, and a possible delay in licensing companies to extract oil as reasons why there have been inadequate exploration initiatives for new oil deposits.

Moreover, the article points out the glaring lack of security in oil infrastructure in the country. For example, in 2011 there were 84 reported attacks against oil pipelines and trucks that transport oil.

In fact, as recently as this past December 3, the government accused FARC guerrillas of using explosives to damage the Caño Limon-Coveñas network of oil pipelines in the Norte de Santander department. The pipeline measures 780km and goes to the port of Coveñas, on Colombia’s Caribbean coast, from which it is exported.

Impacts for the future

There is already speculation of how the end to oil deposits could affect the country’s economy.

The website ColombiaReports.co explained that imports increased from “$4.68 billion for September 2012 to $5.15 billion for September 2013, according to a report released by the National Administrative Department of Statistics (DANE).” The principal contribution behind this rise was the 43.8% increase in the import of refined fuels and mining products, a measure enacted by the government in response to major strikes and attacks by Colombian guerrillas on oil pipelines.

Switching from being a net exporter of oil to an importer would place the country at the mercy of international oil prices and fluctuations within oil-producing nations, such as the perpetually unstable Arab world.

One possibility for the near future is that Colombia could approach neighboring nations for oil imports. For example, Venezuela is one of the world’s major oil producers. According to the website of OPEC (Organization of the Petroleum Exporting Nations), “Venezuela’s oil revenues account for about 95 per cent of export earnings [and] The oil and gas sector is around 25 per cent of gross domestic product.”

Nevertheless, it is worth mentioning that even the mighty Venezuela’s oil reserves may be diminishing as well, as “Venezuela’s annual oil production has declined since [the late Hugo] Chavez took office in 1999 by roughly a quarter, and oil exports have dropped by nearly a half,” according to a March 2013 article in the New York Times.

Moreover, as this author explained in an August commentary for VOXXI, Ecuador’s President Rafael Correa has decided to drill in the Yasuni Park for additional oil.

The quest for energy resources may also promote inter-state tensions. For example, Colombia has been involved in a maritime dispute with Nicaragua over the control of a number of islands and the sea in the Caribbean. The two countries went to the International Court of Justice to seek a third-party resolution, which was handed in 2012, but tensions remain. Specifically, Colombia has recently accused Nicaragua of attempting to carry out offshore explorations for oil in Colombia’s sea.

A turn to green energy?

If indeed Colombia’s oil reserves may be gone by the end of this decade, besides a reliance on energy imports, we may also see the country turn to green energy initiatives.

There are occasional reports in the Colombian media about projects regarding alternative energies. For example, a June 2013 article in El Colombiano discusses how Colombia’s rivers could be used to create hydroelectric power, but this has yet to happen due to a lack of incentives from the government.

In fact, during a June 2013 speech at an energy conference in Bogota,Colombian President Juan Manuel Santos mentioned that Colombia’s hydroelectric potential is six times the global average and almost three times the Latin American average.

If Minister Acosta’s worst-case scenario does come true, this crisis may be the incentive needed for Bogota to have its own green revolution and capitalize on its potential for hydroelectricity.

VOXXI: Axel Kicillof, Argentina's New Powerful Minister of Economy

Axel Kicillof, Argentina's New Powerful Minister of Economy
W. Alejandro Sanchez
VOXXI
December 4, 2013
Originally published: http://voxxi.com/2013/12/04/axel-kicillof-argentina-minister-economy/

Axel Kicillof, the new powerful Minister of Economy, is the most important Argentina’s political figure of the moment and the close advisor of President Cristina Fernandez de Kirchner.

At the relatively young age of 42, Kicillof has had a meteoric rise to power.

His accomplishments include being a professor at the Universidad de Buenos Aires, the director of the Argentine steel company SIDERAR, and a senior manager at Aerolineas Argentinas, the country’s flagship airline. It is worth noting that this company was under the control of a Spanish investment group, Grupo Marsans, from 2001 until 2008, when it was expropriated.

He also served as deputy minister at the Ministry of Economy until he was promoted.

Segments of the international media have portrayed Kicillof in a positive light.

For example, a memorable April 2012 article in Vanity Fair describes the Argentine minister as both good looking and the mastermind behind the expropriation of YPF, an energy company that had the Spanish giant Repsol as its major stakeholder.

The Argentine government took control of Repol’s 51 percent shares in April 2012.

This move has been portrayed as a prime example of President Kirchner’s preference for the nationalization of companies and a protectionist economy instead of supporting privatization and free trade.

The flattering Vanity Fair piece also highlightsa declaration by Kicillof, who memorably said during an informal meeting,

“a Cristina la tengo hipnotizada” (I have hypnotized Cristina).

Whether this statement was meant as a light-hearted joke or not, it is generally believed that Kicillof does have a high degree influence in the Casa Rosada (the Argentine palace of government).

To be fair, it should be stressed that critiques of Kicillof come from Argentine media outlets that are known to be anti-Kirchner.

Most notably is the daily Clarin as its parent company, the Grupo Clarin has been involved in a constitutional dispute with the Kirchner government for the past four years (the government argues that it is trying to democratize the Argentine media).

Axel Kicillof’s Friendly Staff

Liberal Argentine analysts have pessimistic expectations of Kicillof’s tenure, which should last at least until Argentina’s next presidential elections in 2015.

For example, Fausto Spotorno, from the Orlando J. Ferreres Center for Economic Studies, believes that Kicillof will have more powers than previous ministers, and will not have to negotiate with others.

Incidentally, one of Kicillof’s first decisions after assuming his new powers was to name Augusto Costa as the new Secretary for Domestic Commerce, a powerful department within the Ministry of Economy.

From January 2013 until his recent promotion, Costa had served as Secretary of International Commercial Relations at the Ministry of Foreign Affairs.

Costa graduated from the University of Buenos Aires, where Kicillof taught, and with 39 years of age, is even younger than the Minister.

Kicillof has also promoted several of his allies into positions within the Ministry.

In late November he declared “some of them have been with me for over ten years and are part of the project of Nestor Kirchner andCristina Fernandez de Kirchner.”

It is obvious that a new minister wants to place like-minded, friendly individuals in senior positions, but one can only wonder if we are witnessing an omnipotent-minister in the making, as some anti-Kirchner analysts have suggested.

What to expect from Axel Kicillof?

During a speech on December 2, Kicillof critiqued “neoliberal policies;” such declarations suggest that he remains convinced that his protectionist, nationalization-prone initiatives would bring inclusive growth.

Nevertheless, he has also attempted to extend an olive branch to Argentina’s industrialists and entrepreneurs.

Buenos Aires recently reached a deal with Repsol, though it has not been revealed the exact amount that Buenos Aires paid the Spanish company for its share of YPF. Regarding this topic, Kicillof declared “it was impossible to not pay [Repsol] as that would have been illegal.”

Rather than arguing that the controversial 2012 expropriation of YPF was a mistake, Kicillof hinted that the agreement with Repsol, over a year later, was part of his master plan all along.

Meanwhile, Kicillof’s critics continue to argue that energy self-sufficiency, which the government had promised would be reached by 2012, has yet to happen, and there will be a growing deficit in 2013, just like in 2012, due to energy imports.

Energy issues will be critical for Kicillof to address while he is at the helm of Argentina’s economic fate. It will be particularly interesting to see what decisions he will make regarding projects like the oil deposits in Vaca Muerta .

As for the degree of Kicillof’s influence on Kirchner, the media suggests that the new economic minister may be the head of state’s closest advisor, with the YPF move serving as the best example. But Kicillof’s real influence will be demonstrated when he inevitably clashes with other branches of the government, such as the Ministry of Defense.

Ultimately, unless Kicillof and Kirchner manage to turn around the Argentine economy in the near future, this close partnership may not last and this rising star may be out of a job in 2015 when a new leader moves into the Casa Rosada.

Blouin Beat: World - Brazil, MINUSTAH, and Haiti’s ongoing crises

"Brazil, Minustah and Haiti's ongoing crises"
W. Alejandro Sanchez
Blouin Beat: World
December 3, 2013
Originally published: http://blogs.blouinnews.com/blouinbeatworld/2013/12/03/brazil-minustah-and-haitis-ongoing-crises/

The Brazilian news agency Globo reported in late November that the South American nation has begun to (slowly) decrease the amount of troops it deploys to the U.N. peacekeeping operation in Haiti (MINUSTAH). Brazil continues to supply the majority of troops — including the commander of the operation, Lieutenant General Edson Leal Pujol — but  according toGlobo the new contingent of army engineers that departed Brazil for the Caribbean island on November 26 have 73 fewer personnel. Although this may not be a drastic decrease of troops overall, it does hint at the fact that troop contributing countries (TCC) may be experiencing “donor fatigue” regarding this particular U.N. peace operation.

MINUSTAH’s controversial origins date back to almost a decade ago, when Haitian President Jean-Bertrand Aristide was overthrown in February 2004. After weeks of protests, Aristide was flown to the Central African Republic and from there to South Africa, while Gerard Latortue became Prime Minister of the Caribbean country. It has often been alleged that the U.S. and Francewere behind Aristide’s overthrow. This theory stems from the fact that in 2003 Aristide demanded that France pay Haiti US$21 billion, roughly the modern-day equivalent of the amount in gold francs Haiti paid France for its independence in 1804.

MINUSTAH’s more recent history is checker as well. Pakistani peacekeepers have been accused of raping a mentally challenged 14-year-old boy in the western town of Gonaives in 2012. In 2011, Uruguayan peacekeepers were also accused of gang-raping a Haitian youth.  Moreover, Nepalese peacekeepers are widely suspected of having introduced cholera into Haiti in October 2010 (the strain of cholera in Haiti has been identified as South Asian in origin). The resultant and still-ongoing epidemic has killed over eight thousand people. Yes, MINUSTAH troops have done some good. When the deadly 2010 earthquake hit the Caribbean state, the peacekeepers provided badly needed aid to the local population and served as the backbone of the international relief effort. However, MINUSTAH is often in the news for the worst possible reasons.

Whether the situation in Haiti has improved to the point that it no longer requires an international peacekeeping force is up for debate. The country held successful presidential elections in April 2011 — Michel Martelly, a former singer, emerged victorious. But his presidency has been marred with corruption accusations and an unstable economy; there were protests demanding his removal from power as recently as late November of this year. There is, as well, the aforementioned cholera crisis. And Haiti seems set to experience a population surge in the near future, as undocumented Haitians or Dominicans of Haitian descent may be deported to Haiti after the Dominican Republic passed a controversial law nullifying their citizenship. This mass influx will likely contribute to crime and insecurity.

Brazil is not alone in reconsidering MINUSTAH deployment. Uruguay’s President Jose Mujica declared in November that he was going to withdraw Uruguayan troops from MINUSTAH. “We don’t want MINUSTAH to become some kind of praetorian guard,” as the South American head of state put it. But the force itself looks to have a reasonably stable institutional future. In October the U.N. Security Council voted to once again extend MINUSTAH’s mandate for another year. Moreover, other TCC nations have not made any recent declarations or moves to signal that they are considering leaving MINUSTAH. Peru still continues to rotate contingents of200 military personnel through deployments there.

And  Brazil itself does not seem to be in a hurry to retire from MINUSTAH altogether, at least not in the near future. (My article in thescholarly journal Globalizations proposes a simple reason for that: a leadership role in MINUSTAH ups Brazil’s global power status). Certainly, the decrease in supply of army engineers is an important development, but the Portuguese-speaking giant remains the largest contributor of troops to the operation (1,408 between military and police, according to U.N. statistics as of October 2013). It is doubtful that Brazilian President Dilma Rousseff will dramatically alter the country’s commitment in the near future (i.e. by ordering a full withdraw of Brazilian troops). Nevertheless, should another president emerge victorious in Brazil’s upcoming October 2014 elections, we may see a change of policy.

The ultimate question? Whether Haiti is ready to self-govern and maintain internal security for its citizens without a controversial and sometimes counterproductive international presence. Almost a decade after Aristide’s overthrow, the Caribbean state tragically does not seem to be in any better shape than when MINUSTAH was first created.

VOXXI: The 20th Anniversary of the Death of Pablo Escobar

The 20th Anniversary of the Death of Pablo Escobar
W. Alejandro Sanchez
VOXXI
December 2, 2013
Originally published http://voxxi.com/2013/12/02/20th-anniversary-death-pablo-escobar/

Pablo Escobar is still remembered two decades after his death in Colombia, and Latin America in general, but the way he is recalled varies.

Twenty years ago, on December 2, 1993, Pablo Escobar was shot and killed during a raid by the Colombian police. The operation, which took part in Medellin, would be the beginning of the end for the Medellin Cartel which was headed by Escobar, one of the most powerful and ruthless criminal entities in Colombia at the time.

Fear no more?

Pablo Escobar’s rise to fame and the violent actions that he carried out during the late 1970s and 1980s, at the height of his power, has generally been well-documented.

He and his allies, such as the Ochoa brothers and Jose Gonzalo Rodriguez Gacha, transformed the Medellin Cartel into a powerhouse within his country. (Incidentally, Jhon Jairo Velasquez Vasquez, AKA Popeye, one of Escobar’s assassins, was freed this past September after spending just 23 years in prison, even though he has declared to the media that he has killed around 300 people).

He was particularly violent against his opponents, whether they were members of the Colombian government, security forces, journalists that did not write about him from a positive angle, or of other criminal entities, such as the Cali Cartel.

Some of Pablo Escobar’s most famous assassinations includeGuillermo Cano, editor of the daily El Espectador, as well as the 1989 murder of Colombian presidential candidate Luis Carlos Galan.

Moreover, it has often been alleged that Escobar, also known as El Patron or El Doctor, orchestrated the 1985 storming of the Colombian Supreme Court by fighters of the M-19, a defunct Colombian left-wing guerrilla movement.

One curious factor that made him different from other drug traffickers of the time is that, to paraphrase Mark Bowden (author of the 2001 best-seller biography “Killing Pablo”), Escobar did not just want to be rich and powerful, he also wanted to be loved.

To this end, he carried out many philanthropic initiatives in his native region of Antioquia, such as building sports complexes and bringing electricity to isolated areas. Even today, he is still fondly remembered in several Medellin neighborhoods for constructing houses for people in need.

Most memorable was Pablo Escobar’s success in getting elected to the Colombian Congress. This happened in 1982, when he ran as part of the Colombian Liberal Party and was elected to be an alternative in the House of Representatives.

Furthermore, when Escobar went to prison, it was on his own terms. He managed to hatch a deal with the Cesar Gaviria administration through which he was allowed to build a prison, known as La Catedral, for himself and some of his associates. Unsurprisingly he did not spend much time there before escaping.

When he was killed in 1993 by a Colombian police task force known as Search Block, Pablo Escobar was trying to negotiate a new surrender. However, after the embarrassing fiasco of La Catedral, neither Gaviria nor Washington (which was increasing its presence in Colombia to combat drug trafficking) were eager to accept a new agreement.

Pablo Escobar’s legacy

Two decades after his death, the question now is how Escobar is, or should be, remembered. Certainly, he has become part of Latin American pop culture history. This is perhaps best exemplified by the telenovela aptly entitled “Pablo Escobar: El Patron del Mal” (The Lord of Evil).

The soap opera portrays Escobar’s life, but whether it gives too much humanity to the late kingpin is open to debate.

It should be noted that it is not just television stations that are capitalizing on Pablo Escobar’s admittedly fascinating story. Even his son Sebastian Marroquin (he changed his name two decades ago after Escobar’s death), is profiting from his late father’s image, as he has created a clothing line called Poder Poder.

The line produces items such as t-shirts that have a picture of Escobar’s arrest documents as well as his father’s face. Marroquin argues that he started this enterprise so that he could influence young people to not become criminals, however, he has been critiqued for this initiative nevertheless.

It should be noted that there has been much scholarly work analyzing Pablo Escobar’s life. Apart from Bowden’s aforementioned Killing Pablo, the renowned journalist Yolanda Ruiz recently made public an interview with Escobar that she carried out in 1988.

The interview is fascinating, as Escobar is ambiguous regarding his role as a drug trafficker while also describing himself as “simply a person that respects the ideas of other people” (for audio of the interview click here).

It is a worrisome development that a new generation of Colombians and Latin Americans, who did not grow up during Pablo Escobar’s era of terror, may become fond of him.

A similar pattern is already emerging in Mexico, where there are alarming reports that some young Mexicans want to become narcos, due to the wealth and power of criminal entities like the Zetas or Sinaloa Cartel.

As for Colombia, modern-day drug trafficking entities are not as powerful as Escobar’s Medellin Cartel was, but there are plenty of criminal groups involved in this trade.

These include the FARC, as well as criminal gangs like the Urabeños. Hopefully, whatever the future of drug trafficking in Colombia, no narco-lord will ever have the same type of power and impunity that Pablo Escobar once enjoyed.