THE promise of offshore-oil riches has dangled over the Falklands Islands for years. Seismic data go back as far as the 1950s; exploratory wells were drilled in 1998. With just 2,563 residents, a multibillion-dollar oil industry would make the Falklands one of the richest communities on earth. The local Falkland Islands Government (FIG) has already crafted its own fiscal policy to collect a 9% royalty on petroleum that is eventually extracted and a 26% corporation tax on future licensees. The FIG is planning to channel revenues into a sovereign-wealth fund, modelled on Norway’s.
All this potential wealth sharpens antagonism between Britain and Argentina, which also claims sovereignty over the islands that it calls the Malvinas. Daniel Filmus, a one-time Argentine senator who recently became head of a new “Malvinas Secretariat”, has warned firms drilling off the islands’ coasts that they will be ineligible to exploit shale-oil and gas in Patagonia’s vast Vaca Muerte field. In November the Argentine congress passed a law to impose hefty fines and prison sentences of up to 15 years on anyone involved in exploring the Falklands’ continental shelf without its permission.
The supermajors with an eye on Argentina, such as Chevron and BP, are not expected to pursue work in the Falklands in the foreseeable future. That leaves the field clear for...Continue reading
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GUIDO MANTEGA, Brazil’s finance minister (pictured), is sometimes accused of being out of touch. Cynics quip that he wants to will growth into existence rather than fix the rigid labour market, impenetrable tax code, burdensome bureaucracy and fragile public finances that have recently conspired to keep the Brazilian economy from expanding faster than a sluggish 1-2% a year. Official figures released on February 27th will have buoyed the famously upbeat Mr Mantega, without quelling concerns about the underlying health of Latin America’s biggest economy.
Brazilian GDP grew by 0.7% in the fourth quarter, quicker than the chirpiest forecasts, and by 2.3% in the whole of 2013. That outcome, the result of surprisingly perky investment and exports, has put paid to talk of a technical recession (earlier monthly readings has raised the possibility of two consecutive quarters of shrinkage).
Mr Mantega has also been trying to ease concerns about the state of the public finances. On February 20th he unveiled a revised budget for this year, with 44 billion reais ($18.5 billion) of spending cuts and a target for the primary budget surplus...Continue reading
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THE row is not settled, even though work on the expansion of the Panama Canal began again on February 20th. Wrangling between the Panama Canal Authority and a Spanish-led consortium about cost overruns had stalled construction since the start of the year. A planned 2015 completion date is now in doubt. For some in the Caribbean, further delays would suit their purposes.
When they eventually swing open, Panama’s new canal locks will reshape the geography of world shipping. The largest ships to squeeze through the existing locks need a water depth of just over 12 metres, and can carry around 4,400 containers. The new locks will accommodate ships which can take almost three times that load and need a draft of over 15 metres.
These monsters will slash shipping costs for Pacific cargo en route for Atlantic ports, and boost the 6% share of world trade that the Panama canal now claims. But few ports have the water depth needed to enable the new Panamax ships to dock. Lots of cargo will be unloaded onto smaller ships at a few “transshipment” hubs, before being shipped to their final destinations, and several Caribbean islands are vying for the business (see map).
IT WOULD have seemed a lot more revolutionary just two years ago but for Jamaica, it is still a welcome whiff of sense. The island’s energy minister, Philip Paulwell, who also leads government business in parliament, has said he will find time this year to decriminalise possession of small amounts of marijuana. At a stroke, the move will cut the number of criminal offences by as many as a million a week. It will also make a Jamaican break somewhat less nervy for ganja-puffing tourists.
Reform proposals have been knocking around for some time: a National Commission on Ganja recommended decriminalisation in 2001. But helped by moves towards legalisation in Uruguay and decriminalisation in the United States, momentum has been growing. A Cannabis Future Growers and Producers Association was launched last month, and a commercial company to support medical marijuana in December.
Selling for less than five dollars an ounce, ganja has a long history in Jamaica, going all the way back to nineteenth-century Indian immigrants. Cultivation and import have been illegal since 1913, but everyone’s granny remembers when the herb was quite...Continue reading
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ECUADOR'S president, Rafael Correa (pictured right), is setting records for the length of time he has spent in office with every day that passes. He remains very popular. Even so, his country's voters dealt Mr Correa a blow on February 23rd. In city after city, Ecuadoreans handed victory to opposition candidates, leading to long faces at the headquarters of Alianza Pais (AP), Mr Correa's political vehicle. The loss of the capital, Quito, where a centrist candidate, Mauricio Rodas trounced the incumbent AP mayor, Augusto Barrera (pictured left), smarted the most. “What has happened in Quito is very sad and dangerous,” said Mr Correa.
AP also failed to capture Mr Correa's hometown, Guayaquil, the country's largest city, and lost several other major cities like Cuenca and Santo Domingo de los Tsátchilas to opposition challengers. It failed to win any of Ecuador's ten-biggest cities. Mr Correa insisted that AP continues to be the biggest political force in the country, and that AP would probably end up capturing around 100 of the 221 local governments up for grabs, along with the governments of major provinces. “There were local factors that...Continue reading
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