The cherry, Yoshino.
And Love, Paris.
Origami, Art, Buddhism, Glam 
Thursday, December 30, 2010
Thursday, December 9, 2010
Softball Diamond Quotes
Country Risk Analysis in Argentina
country risk in Argentina is a concept that became popular after the 2001-2002 crisis, and from that time used to explain everything bad economic disaster that occurred in that country, low investment, falling market Internationally, the rising prices of imported goods, unemployment, lack of credit, everything was the fault of Country Risk. While it was all part of the phenomenon of crisis is necessary to individualize each event and analyze each of the variables that influence country risk indices.
The aim of this paper is to conceptualize the Country Risk (Country Risk, CR) and Political Risk (Political Risk, PR), identify that it is not an isolated phenomenon, but in a globalized world country risk in country A can affect to country B, resulting in regional contagion effects of interdependent economies. It shall, moreover, some dependent variables of the concept of country risk, such as monetary policy, sovereign debt and the weakness of democratic institutions.
will be of interest to note some political and economic events have served as milestones of ascent and descent of the IRP to monitor developments in the last decade, from the party change in the Presidency of the Nation December 10, 1999 when he took the radical Fernando De la Rúa after two periods of Peronist government of Carlos Menem, to the October 27 date of death of former President Nestor Kirchner. On both dates is perceived changes for Argentina negatively influenced positively in the IRP and have locked the key facts as the 2002 declaration of default and debt renegotiation in 2005.
In relation to the sources available to this modest work, conceptual development of the subject matter will be taken from academic sources and country risk specialists to the analysis of political events will be considered journalistic sources, and international perceptions about these facts, are considered sources of international organizations. Conceptual Approach
In this first part will be a conceptual analysis of country risk variables from the case of Argentina.
Guide International Country Risk (ICRG, for short), takes 22 components and each of them gives a maximum score to determine which sequence analysis classified the country. To do this, ordered the 22 components in three categories, Political Risk (50%), Financial Risk (25%) and Economic Risk (25%). Thus, we see that the components of political risk have twice the weight that the following two. Therefore, in the second part of this work will give more importance to them. To find out, mention them because each of them speaks for itself: government stability, socioeconomic conditions, investment profile, internal conflict, Conflicto externo, corrupción, Militares en Política, religión en Política, Leyeres y orden, Tensiones étnicas, Fortaleza Democrática, Calidad burocrática.
En definitiva, para diferenciar el Riesgo País del riesgo Político, se puede observar a simple vista que el Riesgo Político es simplemente la mitad del Riesgo País, por lo que no puede ser utilizado como sinónimo cómo comúnmente suele suceder.
El término Riesgo Político se refiere a las posibilidades de que las decisiones políticas o eventos sociales en un país puedan afectar al clima de negocios en el cual se encamina la pérdida de dinero por parte de los inversores o no ganan tanto como esperaban cuando hicieron investment (Howell, 2006). External debt
access to capital markets in the XX and XXI centuries has generated new questions about the litigation against sovereignty. In the sovereign debt market, countries act almost as private debtors. Argentina defaulted on U.S. $ 100 billion U.S. is the largest private debt in history. In February 2005 the Argentine Congress passed Law 26017 which prohibited the reopening of trade with non-participating bondholders not, only 76% of bondholders accepted the exchange of bonds for the 25-29% of its value, which was the result of negotiations led by Roberto Lavagna, Minister of Economy of Nestor Kirchner. In September 2006, 170,000 Italian bondholders initiated ICSID arbitration, (International Centre for Settlement of Investment Disputes, established by the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States connected to the World Bank) requiring 5.5 billion Argentina dollars in compensation. It is important to clarify that Argentina is a country that is signatory to the treaty but not ratified, at least not until 2009, according to World Bank report. Therefore, it warns Waibel (2007), to consider the Bilateral Investment Treaty (BIT), recipient countries can not expropriate capital, and the declaration of cessation of payments may be considered an expropriation of the value assigned to sovereign bonds. The origin of the bondholders are principally U.S., Germany and Italy, where he continues the dispute. Argentina has different terms in their BIT obligations under each of these countries (Germany, Italy and USA) and then the complexity of the arbitration.
Argentina has signed and ratified the Convention Establishing the Multilateral Investment Guarantee Agency (MIGA for its acronym in English) but does not offer guarantees that provide ICSID. With regard to disputes relating to the debt faced Argentina in early 2009 and 46 cases are pending and 18 international, plus others that have been dismissed for reasons of jurisdiction, discontinued or suspended, according to Joseph Profaizer in a publication for the World Bank. This author questions whether Argentina will not set a precedent to change the paradigm of the execution of arbitral awards, based on international law, the other side of the default.
Perhaps we should remember that government bonds are debt instruments of a country that promises to pay principal and interest over a specified period of time on payment of a value determined in advance. Usually it is an instrument used to finance, since no default Argentina from international credit has not issued bonds. Although, with the promising negotiations with the Paris Club, some economists predict that soon the country will be able to re-issue.
Now, we must take into account the default on sovereign bonds of Argentina stated that in 2001 or the change in sovereign actions relating to a them during the debt restructuring can be potentially considered direct or indirect expropriation (Waibel , 2007). As not only the actions of 2001, but also its restructuring in 2005 that violated contractual rights of creditors may be considered with this term so strong that it triggers the CR rate: Expropriation
The Argentine peso
With the Convertibility Plan that gave the peg the Argentine peso against the U.S. dollar and choose a fixed exchange rate, it seemed a good plan when to stop hyperinflation. However, the credibility of Argentina's currency was far from being the same as the U.S. dollar, especially in the last five years when the economy began to crumble. The arguments to bind to a foreign currency is the guarantee of a discipline in monetary policy and eliminate currency risk. But it was not the case of Argentina, where bank regulation of trade, and currency risk and inflation could become a credit risk (Wolf, 2002). The financial crisis in emerging markets in 1997-1998, the Brazilian devaluation of 1999 should have resulted in a contagion effect and also devalued the currency in Argentina. However, do not faced a problem of competitiveness, especially in labor costs and there was deflation and Argentine prices fell by 3% (Wolf, 2002).
The risk increased when the Government takes more credits without the credibility or political or economic program supported him. Argentina had resisted even longer without those credits, the adjustment proposed by Ricardo Lopez Murphy (Minister of Economy, which went down in history to stay in office for just 15 days) was not so great, it would be a good choice but could not resist the political pressure (Wolf, 2002). Argentina ran out and his first option was the default second and third devaluation.
After spending sharply for the second option, and specify the third, has adopted a floating exchange rate, but in a pattern of "dirty float" it depends on the level of reserves. By adopting this scheme, Martin Redrado, was so concerned about the use of reserves to pay debt in December 2009 when the executive proposed the Bicentennial Fund, which provided the reserves, provision should only provide take the Central Bank of Argentina (BCRA). According to the Organic Law of Central Bank, the obligation is to maintain a constant exchange rate of the peso in relation to its exchange value in relation to the goods and services no longer in relation to other currencies.
This political intervention in exchange rate policy could undermine the stability of the country's exchange rate, which is more than a pattern of dirty floating exchange rate, economic growth has benefited the country, keeping it competitive with its neighbors and international trade in raw materials.
analysis of political events affected the political risk and country risk developments Argentina
In this second part is an analysis of the concepts seen above that affect the risk of investing in Argentina, recalling the economic and political events in this country of the last ten years they did fluctuate country risk index.
The perception of Argentine citizens is that the economy began to crumble after the Tequila effect in 1995 and worsened after the devaluation in Brazil in 1999. They had started the rumors in 1997 about a possible devaluation of Brazil, affecting directly in the stock market falling sharply. Country risk Argentine exceed 500 basis points in 1998, the Russian default and devaluation in Brazil in 1999. At this point there is a cessation of capital inflows and foreign investment. It was expected the end of the Convertibility Plan, which fixed the Argentine peso's peg to the dollar, but in an election year, was postponed by the then President Carlos Menem. Already
Tequila effect after the financial markets began to close for Argentina, which after 1995 was mainly with funding from multilateral agencies to finance the deficit. During the 90 new bonds were placed when the previous expired.
By taking a new administration in December 1999 was a time of constant criticism of the Alliance for Work, Justice and Education that led to the Radical Civic Union Party for President Fernando de la Rua and Vice President Carlos Alvarez of FREPASO. Neither was considered suitable for the time of devaluation, given the economic recession that was lived and the constant mobilization of the citizenry that led to know the internal conflict.
In the second half of 2000, with the resignation of Vice President Carlos Alvarez was crystallized an internal political crisis which led to a perception of institutional weakness as the CR exceeded the 1500 having difficulties in accessing markets voluntary debt that would go down until finally a crisis in late 2001. The reason for the resignation, among other reasons, it referred a disagreement between them on the adoption of a flexible labor law that required the IMF to continue financing to Argentina, as part of a package of reforms it had undertaken to do country.
to the International Monetary Fund (IMF), "there was a structural reform agenda for 1998-2000 which included reforms in the labor market, taxation, budget procedures, and the conclusion of the privatization process, reforms in the health system the courts ", which was pending and even sprinkled corruption as regards the payment of bribes in Congress by the executive branch to pass legislation according to this plan work. Corruption case at the time also favored the political and institutional crisis in the country. While José Luis Machinea
as Minister of Economy of President Fernando de la Rua just before they closed the voluntary credit for Argentina in 2001, it received a loan of $ 20 million from international agencies and the Government of Spain necessary to cover the shortfall caused by lack of growth of the economy, the crisis
domestic policy had to be a crisis as severe as that experienced in 2001-2002 so that it would lead to the end of fixed exchange rate parity with the dollar was one of the measures expected from the devaluation of Brazil and the collapse of the real plan in January 1999. So Argentina paid a price for holding the exchange rate policy until January 2002, three years later.
"Argentina's crisis of 2000-02 was one of the most serious crises of recent times" according to the International Monetary Fund (IMF), which recognizes that "separate the real's devaluation in early 1999, staff IMF began to consider more seriously the viability of the peg and possible exit strategies. " Despite these initiatives and financial support from the IMF, could not restore access to markets, and spreads on Argentine bonds (so-called "country risk") increased sharply in the third quarter of 2001 was reached to overcome 6000 points of country risk, Argentina lost all access to credit markets. That December
where Domingo Cavallo (architect of the Convertibility Plan) as Minister of Finance declared the yard for no runs on banks, announced what was coming. With the resignation of Fernando de la Rua, the CR was fired, more in the last week of December 2001 and the beginning of 2002 where there was a succession of four presidents. The third one was Adolfo Rodriguez Saa, who declared a moratorium or default of $ 90,000 million. And with Eduardo Duhalde as president in January 2002 sent a public letter to creditors that defined the situation as a deferral of payments and no unilateral suspension. Eduardo Duhalde
represented the transition in 2002, standardization of the market until 2003 after the election takes Nestor Kirchner. The latter would have moments of glory, as the improving economy, the renegotiation of debt in 2005, where There was a marked improvement in country risk index and then political moments that would lead to negative fluctuations, although not as pronounced as the Government has marked the history of Fernando De la Rua.
To facilitate the analysis, and considering the great influence it has had Néstor Kirchner in making decisions for his wife Cristina consider a whole era of the Kirchner government (2003-2007 and Néstor Kirchner Cristina Fernández de Kirchner 2003 - 2011) that, as indicated above has had reason to increase and decrease the country risk.
Among the political events that have reduced the country risk has been the restructuring debt in 2005, negotiations led by Roberto Lavagna, Minister of Economy of Nestor Kirchner. Among the positive consequences, it noted that "investments by large firms begin to recover from 2005," according an IMF report. "The country risk is normalized in June 2005, when Argentina partially completed a huge debt restructuring in default" and after several negative events to be described later starred by the Kirchner government, turned to maintain the same 2005 level in November of 2010, when after the death of Nestor Kirchner is confirmed the resumption of debt negotiations with the Paris Club.
Then political events during these two governments leading to increasing PR are not few. To expropriation or nationalization, denial of license or renewal of concessions without clear motives in the case of Aerolineas Argentinas, Aguas Argentinas, the pension system, more threats to do so to Fibertel, newsprint, and Telecom to name a few.
The incidence of Justice in the Economy is exemplified by the legal risk, or malfunction of the judicial system to ensure individual rights, property rights generates negative perceptions by investors acting directly on the PR. In the Argentina, which is the same executive branch that violates the Constitution when the President signed a decree dismissing the Chairman of the Central Bank, an autonomous institution. For other examples, questioning the ruling of the Supreme Court for suspension of one of the main articles of the Media Law that has driven the ruling and that limited press freedom. On the other hand, the Supreme Court ruling against the monopoly of the CGT, General Confederation of Workers (who presides is Hugo Moyano, a great ally of the Government) and the Ministry of Labor's Office refused to recognize union staff to implement the Central de Trabajadores Argentinos CTA.
On issues of internal conflict, the mobilization of organized agriculture, with strikes and roadblocks are another example of these negative political events. The conflict with the agricultural sector in the first half of 2008 caused a drop in bonds and increased country risk. The Vice-President Julio Cobos voted against the Government's project, creating a chasm in the relationship between the President and Vice President, contemplating a major internal political crisis. If the vice president did not resign at that time, 6 months after taking office, one might infer was the refusal to repeat the story of the resignation of Carlos Alvarez in 2000, just eleven months after taking.
This conflict of the Argentine countryside, has caused a drop in the terms of trade has increased the risk, as is a more adverse market with slower growth, so he spent a EMBI of Argentina in December 2007 when he assumes EMBI Cristina Kirchner to 1849 in November next year. We should not lose sight of the international market, which in 2007 U.S. mortgage crisis began shooting in 2008 the international crisis. Anyway, compared to the sensitivity of the Latin American market to the international crisis at the same time we see that the case of Argentina than the Latin American average.
corruption cases in folder officials as Ricardo Jaime, former Transportation Secretary Nestor Kirchner, and Guillermo Moreno, Secretary of Internal Trade of the two Governments, which has led diplomatic conflict with Spain, for example, parallel embassies in that country and in countries like Venezuela , is the officer who protects and aggressor government representative on the Board. In the case of the suitcase from Venezuela to finance the campaign of Cristina in 2007. The Skanska case in 2005, was one of the major cases has raised the corruption index by Transparency International in Argentina where the post is positioned at 105, 178, behind Senegal. The index was stable in 2003, 2004 with 2.5 to start growing to 2.8 in 2005 and closed again at 2.9 in 2010 as in 2009 and 2008.
Among the issues affecting the country's political institutions is the manipulation of statistics published by the INDEC, where there was wave of layoffs to employees of the institute who rejected the changes in measurement techniques favoring the government redound in rates lower than actual inflation may in a few months doubled or tripled. This irregular plight remains from three years ago have an expiration date. As requested by the Paris Club to reschedule the debt, the IMF should be involved in standardization advance rates. In November last it was confirmed that the IMF will provide technical assistance to stabilize the price index for what is already beginning to take steps for an internal reorganization.
The draft 2011 budget bill that Congress failed to agree the ruling to the opposition, the item includes the use of central bank reserves to pay debt, which was what triggered the conflict with Martin Redrado, President of autonomous body in order to be independent of the influence of political power and ensure the country's monetary policy.
In November, Reuters, reports that "Argentina's country risk measured by the yield differential between domestic bonds and U.S. benchmark fell Thursday to their lowest in 32 months, but despite this decline analysts expected a quick return to the South American country's debt markets. "
"The strength of the local market debt at attractive yields and gains in global markets following the announcement of the U.S. Federal Reserve monetary relief from a new, guaranteed the improvement of the benchmark indicator of risk, leading to 506 basis points to the 2007 GMT. The intraday low EMBI + index 11EMJ bank JP Morgan to Argentina was 490 units. "
Several international media to report the death time former President Nestor Kirchner, also indicated the low country risk index in Argentina, the change in the country's political map. Given its influence on his wife Cristina Fernandez, current President of the country and dominated by an authoritarian style, low and aggressive and confrontational dialogue. The day of death "at 1342 GMT Argentina's portion of the EMBI + showed a sharp decline of 70 basis points to 511 units, accelerating the decline from a low of 54 basis points recorded earlier. The fall of Argentina's EMBI + performance contrasted with the EMBI + for all emerging market countries, which went only 7 basis points. The bond debt and Argentine stocks jumped on Wednesday on Wall Street. " "The sovereign bonds traded in the U.S. averaged an increase of 4% and so-called ADRs of bank shares climbed about 13%, according to market data."
On the other hand, dialogue with the Paris Club is also favorable. According to a Central Bank report "in recent months, in a more favorable international context and following the renegotiation of the reopening of the exchange of government debt, the external sector expansion has been higher than anticipated in the Monetary and it is expected that the remainder of 2010 continue to exceed the original estimates. "
Argentina after almost 8 years of default, is now in the final process of closing that chapter black economic history of Argentina, and has been recognized that regulate more than 91% of the original debt eligible.
Back in September 2010 has been an improvement of the country to go to category B. The ratings are placed on a scale of 7 levels A1, A2, A3, A4, B, C, D, when in 2001 it was D, representing an economic and political environment of the country presents a very high risk, will exacerbate the behaviors payment, generally deplorable. The currently found in category B, which implies an uncertain economic and political environment is likely to affect a payment behavior, often mediocre, is a great achievement by the Government of the Kirchner despite negative events of his administration that we have mentioned.
Conclusions:
In the case of Argentina illustrates the sensitivity of country risk index to political developments that reflect the institutional weakness of the democratic system and the independence of the three powers and can undermine the rule of law. Are the variables of political risks weigh heavily on in relation to the two other risks that make the country risk, namely the Economic and Financial Risk.
The Governments of Argentina has demonstrated the events along its history and in our study particularly in the last ten years that the high incidence and often irrational in the country's economic policy, intervening in the economy than recommended by the theories of the market economy of the liberal or Social Market Economy of ordoliberales, has been highly disruptive, often negating the advantages to be had on the economic aspects, such as annual income, economic growth, income per capita. Was clear when he beat Nigeria Country Risk in 2001 that has a much lower per capita income ($ 970 vs 12,900).
Yes, it has become alarmingly between components Financial Risk that external debt that year reached 50% of GDP (Gross Domestic Product).
Today we can see how he could recover economically, establishing an appropriate exchange rate policy to competitiveness in regional and international trade making the economy grow at reasonable rates. On the other hand, external debt, beyond the institutional remnants that means the creation of the Bicentennial or international law at the implications that has had the debt restructuring, has managed to have a positive outcome of the negotiations for the country.
However, the bad news is that while there is an index of corruption, including Transparency International said that shows the increase and the lack of political stability and violations of democratic system, with quality ranging bureaucratic expense (increase patronage of public contracts for the Government of the Kirchner), the Political risk is more important component of Argentina's country risk, it will be clear with your elbow as you write by hand, for the efforts made on economic and financial outweighed by the decline in political risk. Argentina
The topic given for writing several books and stop at each one of these components of political risk, where the country deliberately and widely seems to exemplify each of these. But just to conclude, we can say that changes in the country's political behavior is a cultural issue that must be improved and that each fall is a lesson that the people concerned must learn to change their future and this is better, both in economically and politically, because the two concepts go together and are interdependent.
Bibliography:
- Howell, Llewellyn ed. (1998) The Handbook of Country and Political Risk Analysis 2nd. Ed The PRS Group: New York. Selections.
- Howell (2006) "Political Risk Assessment in a Globalized Context" 47th Annual Meeting of the International Studies Association.
- Wolf (2002) "Exchange Rates in a World of Capital Mobility" Annals of the American Academy of Political and Social Science 579: 38-52
- Waibel (2007) "Opening Pandora's Box: Sovereign Bonds in International Arbitration" The American Journal of International Law 101(Issue): 711-759
- Quan, Li (2006) "Democracy, Autocracy, and Tax Incentives to Foreign Direct Investors: A Cross-National Analysis" Journal of Politics 68(1): 62-74.
- Leblang (1999) "Domestic Political Institutions and Exchange Rate Commitments in the Developing World" International Studies Quarterly 43: 599-620
- Brewer, Thomas (1993) “Government Policies, Market Imperfections, and Foreign Direct Investment” Journal of International Business Studies, 24(1): 101-120.
- Bernhard, William and David Leblang (2002) “Democratic Processes, Political Risk, and Foreign Exchange Markets” American Journal of Political Science 46(2): 316-333.
- Bernhard and Leblang (2002) "Political Parties and Monetary Commitments" International Organization 56(4): 803-830.
- Feng, Yi (2001) “Political Freedom, Political Instability, and Policy Uncertainty: A Study of Political Institutions and Private Investment in Developing Countries” International Studies Quarterly 45(2): 271-294.
- Gaba, Ernesto “Impacto de la crisis internacional en Argentina, Facultad de Ciencias Economic. University of Buenos Aires
- Lu, Kevin W., et. al. eds. (2009) "Investing with Confidence: Understanding Political Risk Management in the 21st Century." The World Bank: Washington, DC
Clarín Newspaper articles: www.clarin.com,
www.lanacion.com.ar Nation
The Chronicle www.cronista.com
CNN www.cnn.com www.reuters.com Reuters Pages
institutional and official documents: World Bank: http://www.bancomundial.org/
- WB Report "Insolvency Systems and Credit Rights." Argentina (2002).
- World Bank Institute Country Data Report for ARGENTINA, 1996-2009 "
Fund IMF: http://www.imf.org
- IMF 2004 "Report on the Evaluation of the Role of the IMF in Argentina, 1991-2001"
- IMF WP/10/3 "Investment by Large Firms in Argentina" Alvaro Piris
Central Bank of Argentina: http://www.bcra.gov.ar/
- Update Monetary Program goals second half of 2010.
- Law
BCRA's National Institute of Statistics and Census. http://www.indec.gov.ar/
Ministry of Economy of Argentina http://www.mecon.gov.ar/
- Press Release. Standard & Poor's sovereign ratings up Argentina to 'B'. September 13 2010. 
country risk in Argentina is a concept that became popular after the 2001-2002 crisis, and from that time used to explain everything bad economic disaster that occurred in that country, low investment, falling market Internationally, the rising prices of imported goods, unemployment, lack of credit, everything was the fault of Country Risk. While it was all part of the phenomenon of crisis is necessary to individualize each event and analyze each of the variables that influence country risk indices.
The aim of this paper is to conceptualize the Country Risk (Country Risk, CR) and Political Risk (Political Risk, PR), identify that it is not an isolated phenomenon, but in a globalized world country risk in country A can affect to country B, resulting in regional contagion effects of interdependent economies. It shall, moreover, some dependent variables of the concept of country risk, such as monetary policy, sovereign debt and the weakness of democratic institutions.
will be of interest to note some political and economic events have served as milestones of ascent and descent of the IRP to monitor developments in the last decade, from the party change in the Presidency of the Nation December 10, 1999 when he took the radical Fernando De la Rúa after two periods of Peronist government of Carlos Menem, to the October 27 date of death of former President Nestor Kirchner. On both dates is perceived changes for Argentina negatively influenced positively in the IRP and have locked the key facts as the 2002 declaration of default and debt renegotiation in 2005.
In relation to the sources available to this modest work, conceptual development of the subject matter will be taken from academic sources and country risk specialists to the analysis of political events will be considered journalistic sources, and international perceptions about these facts, are considered sources of international organizations. Conceptual Approach
In this first part will be a conceptual analysis of country risk variables from the case of Argentina.
Guide International Country Risk (ICRG, for short), takes 22 components and each of them gives a maximum score to determine which sequence analysis classified the country. To do this, ordered the 22 components in three categories, Political Risk (50%), Financial Risk (25%) and Economic Risk (25%). Thus, we see that the components of political risk have twice the weight that the following two. Therefore, in the second part of this work will give more importance to them. To find out, mention them because each of them speaks for itself: government stability, socioeconomic conditions, investment profile, internal conflict, Conflicto externo, corrupción, Militares en Política, religión en Política, Leyeres y orden, Tensiones étnicas, Fortaleza Democrática, Calidad burocrática.
En definitiva, para diferenciar el Riesgo País del riesgo Político, se puede observar a simple vista que el Riesgo Político es simplemente la mitad del Riesgo País, por lo que no puede ser utilizado como sinónimo cómo comúnmente suele suceder.
El término Riesgo Político se refiere a las posibilidades de que las decisiones políticas o eventos sociales en un país puedan afectar al clima de negocios en el cual se encamina la pérdida de dinero por parte de los inversores o no ganan tanto como esperaban cuando hicieron investment (Howell, 2006). External debt
access to capital markets in the XX and XXI centuries has generated new questions about the litigation against sovereignty. In the sovereign debt market, countries act almost as private debtors. Argentina defaulted on U.S. $ 100 billion U.S. is the largest private debt in history. In February 2005 the Argentine Congress passed Law 26017 which prohibited the reopening of trade with non-participating bondholders not, only 76% of bondholders accepted the exchange of bonds for the 25-29% of its value, which was the result of negotiations led by Roberto Lavagna, Minister of Economy of Nestor Kirchner. In September 2006, 170,000 Italian bondholders initiated ICSID arbitration, (International Centre for Settlement of Investment Disputes, established by the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States connected to the World Bank) requiring 5.5 billion Argentina dollars in compensation. It is important to clarify that Argentina is a country that is signatory to the treaty but not ratified, at least not until 2009, according to World Bank report. Therefore, it warns Waibel (2007), to consider the Bilateral Investment Treaty (BIT), recipient countries can not expropriate capital, and the declaration of cessation of payments may be considered an expropriation of the value assigned to sovereign bonds. The origin of the bondholders are principally U.S., Germany and Italy, where he continues the dispute. Argentina has different terms in their BIT obligations under each of these countries (Germany, Italy and USA) and then the complexity of the arbitration.
Argentina has signed and ratified the Convention Establishing the Multilateral Investment Guarantee Agency (MIGA for its acronym in English) but does not offer guarantees that provide ICSID. With regard to disputes relating to the debt faced Argentina in early 2009 and 46 cases are pending and 18 international, plus others that have been dismissed for reasons of jurisdiction, discontinued or suspended, according to Joseph Profaizer in a publication for the World Bank. This author questions whether Argentina will not set a precedent to change the paradigm of the execution of arbitral awards, based on international law, the other side of the default.
Perhaps we should remember that government bonds are debt instruments of a country that promises to pay principal and interest over a specified period of time on payment of a value determined in advance. Usually it is an instrument used to finance, since no default Argentina from international credit has not issued bonds. Although, with the promising negotiations with the Paris Club, some economists predict that soon the country will be able to re-issue.
Now, we must take into account the default on sovereign bonds of Argentina stated that in 2001 or the change in sovereign actions relating to a them during the debt restructuring can be potentially considered direct or indirect expropriation (Waibel , 2007). As not only the actions of 2001, but also its restructuring in 2005 that violated contractual rights of creditors may be considered with this term so strong that it triggers the CR rate: Expropriation
The Argentine peso
With the Convertibility Plan that gave the peg the Argentine peso against the U.S. dollar and choose a fixed exchange rate, it seemed a good plan when to stop hyperinflation. However, the credibility of Argentina's currency was far from being the same as the U.S. dollar, especially in the last five years when the economy began to crumble. The arguments to bind to a foreign currency is the guarantee of a discipline in monetary policy and eliminate currency risk. But it was not the case of Argentina, where bank regulation of trade, and currency risk and inflation could become a credit risk (Wolf, 2002). The financial crisis in emerging markets in 1997-1998, the Brazilian devaluation of 1999 should have resulted in a contagion effect and also devalued the currency in Argentina. However, do not faced a problem of competitiveness, especially in labor costs and there was deflation and Argentine prices fell by 3% (Wolf, 2002).
The risk increased when the Government takes more credits without the credibility or political or economic program supported him. Argentina had resisted even longer without those credits, the adjustment proposed by Ricardo Lopez Murphy (Minister of Economy, which went down in history to stay in office for just 15 days) was not so great, it would be a good choice but could not resist the political pressure (Wolf, 2002). Argentina ran out and his first option was the default second and third devaluation.
After spending sharply for the second option, and specify the third, has adopted a floating exchange rate, but in a pattern of "dirty float" it depends on the level of reserves. By adopting this scheme, Martin Redrado, was so concerned about the use of reserves to pay debt in December 2009 when the executive proposed the Bicentennial Fund, which provided the reserves, provision should only provide take the Central Bank of Argentina (BCRA). According to the Organic Law of Central Bank, the obligation is to maintain a constant exchange rate of the peso in relation to its exchange value in relation to the goods and services no longer in relation to other currencies.
This political intervention in exchange rate policy could undermine the stability of the country's exchange rate, which is more than a pattern of dirty floating exchange rate, economic growth has benefited the country, keeping it competitive with its neighbors and international trade in raw materials.
analysis of political events affected the political risk and country risk developments Argentina
In this second part is an analysis of the concepts seen above that affect the risk of investing in Argentina, recalling the economic and political events in this country of the last ten years they did fluctuate country risk index.
The perception of Argentine citizens is that the economy began to crumble after the Tequila effect in 1995 and worsened after the devaluation in Brazil in 1999. They had started the rumors in 1997 about a possible devaluation of Brazil, affecting directly in the stock market falling sharply. Country risk Argentine exceed 500 basis points in 1998, the Russian default and devaluation in Brazil in 1999. At this point there is a cessation of capital inflows and foreign investment. It was expected the end of the Convertibility Plan, which fixed the Argentine peso's peg to the dollar, but in an election year, was postponed by the then President Carlos Menem. Already
Tequila effect after the financial markets began to close for Argentina, which after 1995 was mainly with funding from multilateral agencies to finance the deficit. During the 90 new bonds were placed when the previous expired.
By taking a new administration in December 1999 was a time of constant criticism of the Alliance for Work, Justice and Education that led to the Radical Civic Union Party for President Fernando de la Rua and Vice President Carlos Alvarez of FREPASO. Neither was considered suitable for the time of devaluation, given the economic recession that was lived and the constant mobilization of the citizenry that led to know the internal conflict.
In the second half of 2000, with the resignation of Vice President Carlos Alvarez was crystallized an internal political crisis which led to a perception of institutional weakness as the CR exceeded the 1500 having difficulties in accessing markets voluntary debt that would go down until finally a crisis in late 2001. The reason for the resignation, among other reasons, it referred a disagreement between them on the adoption of a flexible labor law that required the IMF to continue financing to Argentina, as part of a package of reforms it had undertaken to do country.
to the International Monetary Fund (IMF), "there was a structural reform agenda for 1998-2000 which included reforms in the labor market, taxation, budget procedures, and the conclusion of the privatization process, reforms in the health system the courts ", which was pending and even sprinkled corruption as regards the payment of bribes in Congress by the executive branch to pass legislation according to this plan work. Corruption case at the time also favored the political and institutional crisis in the country. While José Luis Machinea
as Minister of Economy of President Fernando de la Rua just before they closed the voluntary credit for Argentina in 2001, it received a loan of $ 20 million from international agencies and the Government of Spain necessary to cover the shortfall caused by lack of growth of the economy, the crisis
domestic policy had to be a crisis as severe as that experienced in 2001-2002 so that it would lead to the end of fixed exchange rate parity with the dollar was one of the measures expected from the devaluation of Brazil and the collapse of the real plan in January 1999. So Argentina paid a price for holding the exchange rate policy until January 2002, three years later.
"Argentina's crisis of 2000-02 was one of the most serious crises of recent times" according to the International Monetary Fund (IMF), which recognizes that "separate the real's devaluation in early 1999, staff IMF began to consider more seriously the viability of the peg and possible exit strategies. " Despite these initiatives and financial support from the IMF, could not restore access to markets, and spreads on Argentine bonds (so-called "country risk") increased sharply in the third quarter of 2001 was reached to overcome 6000 points of country risk, Argentina lost all access to credit markets. That December
where Domingo Cavallo (architect of the Convertibility Plan) as Minister of Finance declared the yard for no runs on banks, announced what was coming. With the resignation of Fernando de la Rua, the CR was fired, more in the last week of December 2001 and the beginning of 2002 where there was a succession of four presidents. The third one was Adolfo Rodriguez Saa, who declared a moratorium or default of $ 90,000 million. And with Eduardo Duhalde as president in January 2002 sent a public letter to creditors that defined the situation as a deferral of payments and no unilateral suspension. Eduardo Duhalde
represented the transition in 2002, standardization of the market until 2003 after the election takes Nestor Kirchner. The latter would have moments of glory, as the improving economy, the renegotiation of debt in 2005, where There was a marked improvement in country risk index and then political moments that would lead to negative fluctuations, although not as pronounced as the Government has marked the history of Fernando De la Rua.
To facilitate the analysis, and considering the great influence it has had Néstor Kirchner in making decisions for his wife Cristina consider a whole era of the Kirchner government (2003-2007 and Néstor Kirchner Cristina Fernández de Kirchner 2003 - 2011) that, as indicated above has had reason to increase and decrease the country risk.
Among the political events that have reduced the country risk has been the restructuring debt in 2005, negotiations led by Roberto Lavagna, Minister of Economy of Nestor Kirchner. Among the positive consequences, it noted that "investments by large firms begin to recover from 2005," according an IMF report. "The country risk is normalized in June 2005, when Argentina partially completed a huge debt restructuring in default" and after several negative events to be described later starred by the Kirchner government, turned to maintain the same 2005 level in November of 2010, when after the death of Nestor Kirchner is confirmed the resumption of debt negotiations with the Paris Club.
Then political events during these two governments leading to increasing PR are not few. To expropriation or nationalization, denial of license or renewal of concessions without clear motives in the case of Aerolineas Argentinas, Aguas Argentinas, the pension system, more threats to do so to Fibertel, newsprint, and Telecom to name a few.
The incidence of Justice in the Economy is exemplified by the legal risk, or malfunction of the judicial system to ensure individual rights, property rights generates negative perceptions by investors acting directly on the PR. In the Argentina, which is the same executive branch that violates the Constitution when the President signed a decree dismissing the Chairman of the Central Bank, an autonomous institution. For other examples, questioning the ruling of the Supreme Court for suspension of one of the main articles of the Media Law that has driven the ruling and that limited press freedom. On the other hand, the Supreme Court ruling against the monopoly of the CGT, General Confederation of Workers (who presides is Hugo Moyano, a great ally of the Government) and the Ministry of Labor's Office refused to recognize union staff to implement the Central de Trabajadores Argentinos CTA.
On issues of internal conflict, the mobilization of organized agriculture, with strikes and roadblocks are another example of these negative political events. The conflict with the agricultural sector in the first half of 2008 caused a drop in bonds and increased country risk. The Vice-President Julio Cobos voted against the Government's project, creating a chasm in the relationship between the President and Vice President, contemplating a major internal political crisis. If the vice president did not resign at that time, 6 months after taking office, one might infer was the refusal to repeat the story of the resignation of Carlos Alvarez in 2000, just eleven months after taking.
This conflict of the Argentine countryside, has caused a drop in the terms of trade has increased the risk, as is a more adverse market with slower growth, so he spent a EMBI of Argentina in December 2007 when he assumes EMBI Cristina Kirchner to 1849 in November next year. We should not lose sight of the international market, which in 2007 U.S. mortgage crisis began shooting in 2008 the international crisis. Anyway, compared to the sensitivity of the Latin American market to the international crisis at the same time we see that the case of Argentina than the Latin American average.
corruption cases in folder officials as Ricardo Jaime, former Transportation Secretary Nestor Kirchner, and Guillermo Moreno, Secretary of Internal Trade of the two Governments, which has led diplomatic conflict with Spain, for example, parallel embassies in that country and in countries like Venezuela , is the officer who protects and aggressor government representative on the Board. In the case of the suitcase from Venezuela to finance the campaign of Cristina in 2007. The Skanska case in 2005, was one of the major cases has raised the corruption index by Transparency International in Argentina where the post is positioned at 105, 178, behind Senegal. The index was stable in 2003, 2004 with 2.5 to start growing to 2.8 in 2005 and closed again at 2.9 in 2010 as in 2009 and 2008.
Among the issues affecting the country's political institutions is the manipulation of statistics published by the INDEC, where there was wave of layoffs to employees of the institute who rejected the changes in measurement techniques favoring the government redound in rates lower than actual inflation may in a few months doubled or tripled. This irregular plight remains from three years ago have an expiration date. As requested by the Paris Club to reschedule the debt, the IMF should be involved in standardization advance rates. In November last it was confirmed that the IMF will provide technical assistance to stabilize the price index for what is already beginning to take steps for an internal reorganization.
The draft 2011 budget bill that Congress failed to agree the ruling to the opposition, the item includes the use of central bank reserves to pay debt, which was what triggered the conflict with Martin Redrado, President of autonomous body in order to be independent of the influence of political power and ensure the country's monetary policy.
In November, Reuters, reports that "Argentina's country risk measured by the yield differential between domestic bonds and U.S. benchmark fell Thursday to their lowest in 32 months, but despite this decline analysts expected a quick return to the South American country's debt markets. "
"The strength of the local market debt at attractive yields and gains in global markets following the announcement of the U.S. Federal Reserve monetary relief from a new, guaranteed the improvement of the benchmark indicator of risk, leading to 506 basis points to the 2007 GMT. The intraday low EMBI + index 11EMJ bank JP Morgan to Argentina was 490 units. "
Several international media to report the death time former President Nestor Kirchner, also indicated the low country risk index in Argentina, the change in the country's political map. Given its influence on his wife Cristina Fernandez, current President of the country and dominated by an authoritarian style, low and aggressive and confrontational dialogue. The day of death "at 1342 GMT Argentina's portion of the EMBI + showed a sharp decline of 70 basis points to 511 units, accelerating the decline from a low of 54 basis points recorded earlier. The fall of Argentina's EMBI + performance contrasted with the EMBI + for all emerging market countries, which went only 7 basis points. The bond debt and Argentine stocks jumped on Wednesday on Wall Street. " "The sovereign bonds traded in the U.S. averaged an increase of 4% and so-called ADRs of bank shares climbed about 13%, according to market data."
On the other hand, dialogue with the Paris Club is also favorable. According to a Central Bank report "in recent months, in a more favorable international context and following the renegotiation of the reopening of the exchange of government debt, the external sector expansion has been higher than anticipated in the Monetary and it is expected that the remainder of 2010 continue to exceed the original estimates. "
Argentina after almost 8 years of default, is now in the final process of closing that chapter black economic history of Argentina, and has been recognized that regulate more than 91% of the original debt eligible.
Back in September 2010 has been an improvement of the country to go to category B. The ratings are placed on a scale of 7 levels A1, A2, A3, A4, B, C, D, when in 2001 it was D, representing an economic and political environment of the country presents a very high risk, will exacerbate the behaviors payment, generally deplorable. The currently found in category B, which implies an uncertain economic and political environment is likely to affect a payment behavior, often mediocre, is a great achievement by the Government of the Kirchner despite negative events of his administration that we have mentioned.
Conclusions:
In the case of Argentina illustrates the sensitivity of country risk index to political developments that reflect the institutional weakness of the democratic system and the independence of the three powers and can undermine the rule of law. Are the variables of political risks weigh heavily on in relation to the two other risks that make the country risk, namely the Economic and Financial Risk.
The Governments of Argentina has demonstrated the events along its history and in our study particularly in the last ten years that the high incidence and often irrational in the country's economic policy, intervening in the economy than recommended by the theories of the market economy of the liberal or Social Market Economy of ordoliberales, has been highly disruptive, often negating the advantages to be had on the economic aspects, such as annual income, economic growth, income per capita. Was clear when he beat Nigeria Country Risk in 2001 that has a much lower per capita income ($ 970 vs 12,900).
Yes, it has become alarmingly between components Financial Risk that external debt that year reached 50% of GDP (Gross Domestic Product).
Today we can see how he could recover economically, establishing an appropriate exchange rate policy to competitiveness in regional and international trade making the economy grow at reasonable rates. On the other hand, external debt, beyond the institutional remnants that means the creation of the Bicentennial or international law at the implications that has had the debt restructuring, has managed to have a positive outcome of the negotiations for the country.
However, the bad news is that while there is an index of corruption, including Transparency International said that shows the increase and the lack of political stability and violations of democratic system, with quality ranging bureaucratic expense (increase patronage of public contracts for the Government of the Kirchner), the Political risk is more important component of Argentina's country risk, it will be clear with your elbow as you write by hand, for the efforts made on economic and financial outweighed by the decline in political risk. Argentina
The topic given for writing several books and stop at each one of these components of political risk, where the country deliberately and widely seems to exemplify each of these. But just to conclude, we can say that changes in the country's political behavior is a cultural issue that must be improved and that each fall is a lesson that the people concerned must learn to change their future and this is better, both in economically and politically, because the two concepts go together and are interdependent.
Bibliography:
- Howell, Llewellyn ed. (1998) The Handbook of Country and Political Risk Analysis 2nd. Ed The PRS Group: New York. Selections.
- Howell (2006) "Political Risk Assessment in a Globalized Context" 47th Annual Meeting of the International Studies Association.
- Wolf (2002) "Exchange Rates in a World of Capital Mobility" Annals of the American Academy of Political and Social Science 579: 38-52
- Waibel (2007) "Opening Pandora's Box: Sovereign Bonds in International Arbitration" The American Journal of International Law 101(Issue): 711-759
- Quan, Li (2006) "Democracy, Autocracy, and Tax Incentives to Foreign Direct Investors: A Cross-National Analysis" Journal of Politics 68(1): 62-74.
- Leblang (1999) "Domestic Political Institutions and Exchange Rate Commitments in the Developing World" International Studies Quarterly 43: 599-620
- Brewer, Thomas (1993) “Government Policies, Market Imperfections, and Foreign Direct Investment” Journal of International Business Studies, 24(1): 101-120.
- Bernhard, William and David Leblang (2002) “Democratic Processes, Political Risk, and Foreign Exchange Markets” American Journal of Political Science 46(2): 316-333.
- Bernhard and Leblang (2002) "Political Parties and Monetary Commitments" International Organization 56(4): 803-830.
- Feng, Yi (2001) “Political Freedom, Political Instability, and Policy Uncertainty: A Study of Political Institutions and Private Investment in Developing Countries” International Studies Quarterly 45(2): 271-294.
- Gaba, Ernesto “Impacto de la crisis internacional en Argentina, Facultad de Ciencias Economic. University of Buenos Aires
- Lu, Kevin W., et. al. eds. (2009) "Investing with Confidence: Understanding Political Risk Management in the 21st Century." The World Bank: Washington, DC
Clarín Newspaper articles: www.clarin.com,
www.lanacion.com.ar Nation
The Chronicle www.cronista.com
CNN www.cnn.com www.reuters.com Reuters Pages
institutional and official documents: World Bank: http://www.bancomundial.org/
- WB Report "Insolvency Systems and Credit Rights." Argentina (2002).
- World Bank Institute Country Data Report for ARGENTINA, 1996-2009 "
Fund IMF: http://www.imf.org
- IMF 2004 "Report on the Evaluation of the Role of the IMF in Argentina, 1991-2001"
- IMF WP/10/3 "Investment by Large Firms in Argentina" Alvaro Piris
Central Bank of Argentina: http://www.bcra.gov.ar/
- Update Monetary Program goals second half of 2010.
- Law
BCRA's National Institute of Statistics and Census. http://www.indec.gov.ar/
Ministry of Economy of Argentina http://www.mecon.gov.ar/
- Press Release. Standard & Poor's sovereign ratings up Argentina to 'B'. September 13 2010.
Saturday, December 4, 2010
Scab Red Ring On Genitals
real and unreal
In the past few weeks I worked with photographer Pablo Baudet the presentation of the Art Institute of Fashion and Design in La Noche en Blanco de Tenerife (November 28, 2010) .
The Art Institute of Fashion and Design is a new center to be "born with the objective of meeting the training needs in the world of visual arts, design and fashion ... aimed at those looking to start , who want to specialize or supplement their knowledge and stay current in these areas for the development of their profession or to grow personally and culturally. "
As part of the intervention, Paul held a photocall at street level that could be photographed with the Tenerife fashion accessories, among whom were some of my origami headgear . Before we shot with the same designs and some more to the model Carla for a fashion editorial.
And here are the pictures of all these wonderful women, who dared to be played on paper.
A friend mine commented that my hat reminds hats Amélie Nothomb, "carried the hats better than anyone." I had not happened to it, but it really is.
can see the rest of portraits here and follow the group on Facebook .
© Pablo Baudet & Origlam
© Pablo Baudet & Origlam
© Pablo Baudet & Origlam
In the past few weeks I worked with photographer Pablo Baudet the presentation of the Art Institute of Fashion and Design in La Noche en Blanco de Tenerife (November 28, 2010) .
The Art Institute of Fashion and Design is a new center to be "born with the objective of meeting the training needs in the world of visual arts, design and fashion ... aimed at those looking to start , who want to specialize or supplement their knowledge and stay current in these areas for the development of their profession or to grow personally and culturally. "
As part of the intervention, Paul held a photocall at street level that could be photographed with the Tenerife fashion accessories, among whom were some of my origami headgear . Before we shot with the same designs and some more to the model Carla for a fashion editorial.
And here are the pictures of all these wonderful women, who dared to be played on paper.
A friend mine commented that my hat reminds hats Amélie Nothomb, "carried the hats better than anyone." I had not happened to it, but it really is.
can see the rest of portraits here and follow the group on Facebook .
Origami, Art, Buddhism, Glam 
Marketsphere Unclaimed Property Letter Fraud
Thursday, December 2, 2010
Biffy Clyro - Mountains Tabs Piano
Very close to the snow and open windows to the country this month will my wrists. of November 25, 2010 to January 12, 2011 you can find in the delightful tea room in Rascafría Toni.
dolls look very different close to nature, more in your environment. Suddenly make sense of all these prints of flowers and plants, gardens and atmospheric phenomena, feelings linked to the seasons. From the day I left, I am thinking Nature is the best art gallery world. a heavy snow had fallen the night before the assembly and the sun was shining. How close was Japan.
A Rascafría rose many fold flat dolls (Shiori Ningyo ) submitted air and in the Japanese tradition: on panels decorated with natural woods and fabrics and Japanese papers. Also some anesama ningyo , carp (Koi ) and mobile to celebrate the Year of the Rabbit. All unique pieces made in quality handmade Japanese papers.
talks of the importance of supporting the artisans with our purchases to keep alive the craft, equipment, materials, knowledge and traditional flavors. This time they also support me, and we support each other. In the exhibition space, plus my Japanese dolls, you can enjoy baked goods and organic breads made with the same passionate delivery and patient with me bow my origami.
Toni is an irresistible pastry (pears and chocolate cakes, muffins, soy and nuts ....) but also brings Miraflores Sinuhe breads Medina, a pioneer and strong in our country in making bread Yeast mother and the cleanest water. Sinuhe not only produces bread as a great teacher (sensei) , but rescue and invented recipes, such as porcini bread or breads with raisins and orange blossom.
We have prepared this exhibition also thinking Rascafría people. In bringing beauty to other people. Now we just need that you all who come near to see what we can give you.
Sweets Tea La Flaca
Every day from 10 to 2 and 5 to 8 (except Wednesdays)
dolls look very different close to nature, more in your environment. Suddenly make sense of all these prints of flowers and plants, gardens and atmospheric phenomena, feelings linked to the seasons. From the day I left, I am thinking Nature is the best art gallery world. a heavy snow had fallen the night before the assembly and the sun was shining. How close was Japan.
A Rascafría rose many fold flat dolls (Shiori Ningyo ) submitted air and in the Japanese tradition: on panels decorated with natural woods and fabrics and Japanese papers. Also some anesama ningyo , carp (Koi ) and mobile to celebrate the Year of the Rabbit. All unique pieces made in quality handmade Japanese papers.
talks of the importance of supporting the artisans with our purchases to keep alive the craft, equipment, materials, knowledge and traditional flavors. This time they also support me, and we support each other. In the exhibition space, plus my Japanese dolls, you can enjoy baked goods and organic breads made with the same passionate delivery and patient with me bow my origami.
Toni is an irresistible pastry (pears and chocolate cakes, muffins, soy and nuts ....) but also brings Miraflores Sinuhe breads Medina, a pioneer and strong in our country in making bread Yeast mother and the cleanest water. Sinuhe not only produces bread as a great teacher (sensei) , but rescue and invented recipes, such as porcini bread or breads with raisins and orange blossom.
We have prepared this exhibition also thinking Rascafría people. In bringing beauty to other people. Now we just need that you all who come near to see what we can give you.
Sweets Tea La Flaca
Every day from 10 to 2 and 5 to 8 (except Wednesdays)
Origami, Art, Buddhism, Glam 
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