Who would have thought Hugo Chávez, Venezuela's democratically-elected-dictator-to-be, would prove to be our President's most faithful (and deep-pocketed) ally? Do not be fooled by any populist announcements: Mr. Chavez is no fool, as is not Mr. G. W. Bush who buys Chavez's oil. Chavez, somewhat contradictory to his populist-socialist speech, is a very good businessman.Kirchner gets "easy" financing from Chávez, and thus skips IMF white-tape and those horrific "conditions" for their loans. God forbids, they might actually prove to be right about some of the things they say and it might confuse people ... anyhow, Mr. Kicrhner managed to construct a cycle to elude IMF dependency but we are all paying the price of that - paying as high as twice as much (11% vs IMF's 5.5%) as we would have had to pay the much-hated Bretton Woods creation. Then our lender of last resort Mr. Hugo goes home and sells those bonds in the secondary market, not retaining Argentinean risk for longer than it takes to say "gracias". But, hey, independency has its costs.
On a side note, I read today that we are Chavez's second favorite investment destination: only rivalled and surpassed by market-friendly Cuba! For those of you who wanted to be compared to the US or Europe, there you have it: as far away from it as you possibly can get. Oh, and by the way, FDI (Foreign Direct Investment) fell YoY for 2006 and is falling QoQ for 2007 1st quarter ... announced investments are small, multi-year and most "forceful" due to disappearing output gaps. But then again, it shouldn't be a surprise for us - we never really were market-friendly except for the (God-forbid-we-ever-return-to-the -scandalous) 90's, when FDI was knocking on our doorstep uninvited. Seeing how it all ended will never explain that investment is bad, no matter how you look at it. Genuine external investment will not return before price-mechanisms are restored in the markets (energy, transport, food, at least).
Now it all becomes more complex when a certain gentleman, who by the way was invited to fly on a private jet rented by ENARSA and tries to "smuggle" U$S 800.000 in a hand-bag. How did this happen? Has it happened before and did it go undetected then? why? why now? As everyone - including the FBI anytime now - tries to find Mr. Antonini Wilson, another corruption scandal hits the Government as it is about to embark on the last 3 months in power (Skanska, strike one; Miceli and the money-bag, strike two, Romina Piccolotti and her numerous family aides in the Ministry of Environment, miss, and this sounds like a 3rd strike). The Gov't did not need this, least of all now. Not when it has presented Cristina Kirchner, Senator and First Lady, as a firm succession candidate for her husband. If circumstances forced K to revisit his decision, these cases coming to light and devoured by the press might hurt him beyond return.
For the time being, and until this mess is sorted out, we will assume Mr Antonini Wilson wanted to buy a property in Argentina - and maybe lend Miceli (Argentina's ex-Economy Minister) some money to buy hers. Maybe he just didn't make it to her private bathroom ...
