Wednesday, September 28, 2005 BOARD OF ADVISORS Featured Q&A With Our Board of Advisors Bernard Aronson Peter Hakim Managing Partner, President, Bolivia's presidential and con- Guest Comment: Eduardo ACON Investments Inter-American gressional elections scheduled Gamarra: "The current turmoil LLC Dialogue for December 4 are up in the air created by the Constitutional Diego Arria Donna Hrinak Q after the country's Constitutional A Tribunal requiring a reappor- Director, Co-chair, International Tribunal last week ordered Congress to tionment of congressional seats as mandat- Columbus Group Trade, Competition, redistribute seats in the legislature in ed by the Constitution is unlikely to end and Government accordance with the most recent national without a major battle involving regional Genaro Arriagada Affairs Practice, Board Member, Banco Steel Hector & Davis census. Will the elections take place as actors, political parties in Congress, the del Estado de Chile planned? Is Bolivia any nearer to resolving leading presidential candidates, organized Jon Huenemann Joyce Chang its long-standing political and social con- labor, and others. In addition, the Tribunal Principal, flicts? will also have to rule on the constitutional- Global Head of International Emerging Markets Department, ity of the electoral process since a few Research, J.P. Morgan Miller & Chevalier Guest Comment: Manuel Rocha: members of Congress who stand to lose Chase & Co. "I hope this matter gets resolved Continued on page 4 James R. Jones Adrian Cruz before December 4. If not, one Senior Partner, Co-chair, Manatt Jones can expect to see further distur- ACPZ Venture Capital, A PHOTO OF THE DAY LLC Global Strategies LLC bances prior to the planned date for the elections. Bolivia is not anywhere closer to W. Bowman Cutter Paul Laudicina Vice President, resolving its perennial conflicts. They have Partner, been around since Bolivia's inception and E.M. Warburg A.T. Kearney will continue to be part of the Bolivian Pincus Thomas F. McLarty III political landscape. Sadly, chronic instabili- Dirk Donath President, Kissinger ty seems to be the norm and not the excep- Managing Director, McLarty Assoc. Eton Park Capital tion. No matter who wins in the next pres- Management Beatrice Rangel idential election, social peace is not what President & CEO, will follow. We will probably see a continu- Myles Frechette AMLA Consulting ation of the political instability that has Former US Ambassador to plagued the country for the past decades. José Antonio Ríos US Secretary of State Condoleezza Rice Colombia International President, The structural and deep fissures in Bolivian Global Crossing society cannot be resolved with an electoral met with Haiti's interim prime minister, Wallace Gardner outcome, independent of who emerges vic- Gerard Latortue, in Port-au-Prince yes- Vice President, Everett Santos torious. It will require many years under a terday. Rice urged Haiti to speed up Worldwide Sales, CEO, Emerging preparations for elections. See related leadership that enjoys the consensus of the Chubb & Son Markets story on page 2. Partnership majority of Bolivians, something that is Michael Gavin Photo: State Department. lacking in today's Bolivia." Head of Latin Roger Scher America Econ. Head of Latin Research, UBS American Sovereign Ratings, George W. Grayson Fitch Ratings Professor of Govt., The College of Tony Smith Inside This Issue William & Mary Partner, Schmeltzer, Aptaker FEATURED Q&A: Will Bolivia's Election Petrobras Aims to Raise $3 Billion & Shepard Take Place as Planned in December?................1 Through Auction of Oil Field.................................2 Rice Calls on Haiti to Speed Spain's Telefonica Moviles Looks to Subscribers may pose questions to the Board of Up Election Preparations ......................................2 Challenge America Movil in Mexico...................3 Advisors for the Featured Q&A by contacting the Editor at [email protected] Total Sees Compromise with By the Numbers: A Monthly Look at Venezuela over Higher Taxes...............................2 Latin American Data by Claudio Loser...............3 Copyright © 2005, Inter-American Dialogue Page 1 of 4 Inter-AAmerican Dialogue’s Latin America Advisor Wednesday, September 28, 2005 NEWS BRIEFS Political News projects as long as its stake in existing projects was not reduced. "We will reach a Immigration Judge: Posada Won't compromise with Venezuela," Christophe Be Sent to Venezuela or Cuba Rice Calls on Haiti to Speed de Margerie, president of Total's explo- A US immigration judge said Up Election Preparations ration and production division, was quot- Tuesday that Cuban exile and sus- ed as saying by Bloomberg News. De US Secretary of State Condoleezza Rice on Margerie said the company is not opposed pected terrorist Luis Posada Carriles Tuesday urged Haiti to speed up prepara- to a new tax law that would increase royal- will not be deported to Cuba or tions for upcoming elections, which she ty payments to the Venezuelan govern- Venezuela. While leaving open the said are key to the Caribbean nation's ment amid skyrocketing global oil prices, possibility that Posada could be future stability. "In my conversations but would like to reach a compromise on deported to another country, Judge today, I noted that all Haitians must accel- the amount. "It's normal to renegotiate William Abbott said he feared erate preparations for the elections," Rice taxes when contracts were signed when Posada would be tortured in said during a joint press conference with [oil] prices were at $15 a barrel and have Venezuela or executed in Cuba. Haiti's interim prime minister, Gerard now reached $60 [per barrel]," he was Venezuela is demanding Posada's Latortue in Port-au-Prince after meeting quoted as saying by Marketwatch. extradition to face charges he mas- with Latortue, interim President Boniface Venezuela, the world's fifth-largest oil terminded the 1976 bombing of a Alexandre, and members of the country's exporter, said in June it would raise Cuban airliner that killed 73 people. Provisional Electoral Council. "Everybody income tax rates on heavy oil ventures with whom I spoke focused on the fact after increasing the royalty rate on the Abbott's ruling is expected to strain that there must be a transfer of power by projects last October to 16.67 percent already tense US-Venezuela rela- the 7th of February and that everybody from 1 percent. Total owns 47 percent of tions. believes that that is necessary for stability the Sincor project, which produced an Source: The Miami Herald. here in Haiti." Rice said that "technical average of 173,000 barrels of oil a day in Mexico's Fox Names New matters" that need to be addressed ahead 2004, and is negotiating with Venezuela a Public Safety Secretary of the planned November 20 presidential $5 billion expansion of the project, called and legislative elections include determin- for Sincor II. State-owned Petroleos de Mexican President Vicente Fox on ing where polling places will be and regis- Venezuela (PDVSA) owns 38 percent and Tuesday named his intelligence tering poll workers. Latortue said his gov- Norway's Statoil 15 percent of the original chief, Eduardo Medina, to be secre- ernment shared the US' concerns and was Sincor. Total doesn't want to change the tary of public safety. Medina taking steps to resolve the technical prob- ownership stakes in the original Sincor replaces Ramon Martin Huerta, who lems. Rice also said the elections must be project, de Margerie said, although it along with eight others was killed in "open and inclusive and fair," and urged might consider adjusting the percentages a helicopter crash last week. Haitians to vote. The elections would be in Sincor II. De Margerie said Venezuela the first since the government of former "can't enforce" its threat to force oil com- Source: Reuters. President Jean-Bertrand Aristide was top- panies to grant PDVSA a larger stake in Report: Migration to pled during a nationwide revolt in their projects. Earlier this month, Total US Peaked in 2000 February 2004. The US-backed interim increased its 2005 capital spending plan by The number of illegal and legal government that took over after Aristide $1 billion to $11 billion, not including migrants coming to the United fled into exile has been criticized by rights acquisitions, partly because of rising proj- States each year peaked in 2000 and groups for arresting political opponents ect costs. then substantially declined after and keeping them in prison for months without filing charges, while hundreds of Petrobras Aims to Raise $3 Billion 2001, according to a report released Haitians have died in violence despite the Through Auction of Oil Field Tuesday by the Pew Hispanic Center. presence of a 7,000-strong, Brazilian-led By 2004, the annual inflow of for- United Nations peacekeeping force. Brazilian state-owned energy company eign-born persons was down 24 per- Petrobras is auctioning a heavy oil field to cent from its all-time high in 2000 Company News raise up to $3 billion, an unnamed source above 1.5 million. The basic trend cited by Reuters said early today. was seen for all migrant groups from "Petrobras is conducting an auction in every region of the world, and for Total Sees Compromise with Brazil. Bidders have been short-listed," the both legal and illegal migrants. The Venezuela over Higher Taxes source was quoted as saying. The field, full report is available at which carries a roughly estimated value of www.pewhispanic.org. France's Total, Europe's largest oil refiner, $2 billion to $3 billion, was put up for sale said Tuesday it would reach a deal with very recently, according to Reuters. Up to Source: Pew Hispanic Center. Venezuela over higher taxes for heavy oil 10 global energy companies have looked at Copyright © 2005, Inter-American Dialogue Page 2 of 4 Inter-AAmerican Dialogue’s Latin America Advisor Wednesday, September 28, 2005 the asset.