One of the greatest Latin American success stories was the privatization of Argentina's YPF in July of 1993 against enormous political and labor opposition. The Kirchner government reversed this hard-won success yesterday with its nationalization of YPF. The nationalized YPF will again become a bloated political rent-seeking machine to pay off Kirchner's supporters. YPF's expropriated partners (mainly Repsol of Spain) will get little.
At about the same time, ExxonMobil signed the only possible deal with Russia's national oil company Rosneft to jointly develop Siberia's energy reserves. The key section of the deal gives Rosneft properties of equivalent value in the United States. This time when Putin decides to expropriate ExxonMobil's investment in Russia, they can take back Rosneft's U.S. holdings. Putin has forced Western energy companies into such "hostage" deals. Let's see if they work.
Argentina: A rich country in a poor system is an empty chalice to its thirsty people. over and over again, Argentina proves that it is not made of silver and silver does not flow down its rivers.
ReplyDeleteRussia: Over and over again, Russian choose bears to guard their honey pots.
Putin: Arkhantina! Akh, Arkhantina!
This dramatic reversal of fortune is why Argentina, already a global financial rogue after its historic debt default, is willing to risk becoming even more of a pariah by seizing control of its leading oil company from Spanish hands, analysts say. I recently travelled there for work and stayed in a rented apartment from 4rent Argentina and they were telling me about this problem. People are really worried about the image Argentina is leaving to the rest of the world. To understand a problem and public opinion about it, you have to be there!
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