Venezuela Stopped Playing Rich Uncle To Neighbors

To make it through 2015 without going into crippling default, Venezuela must break promises that made it possible for late-President Hugo Chavez to build a strong relationship with Latin American and Caribbean nations largely forgotten by the Obama Administration.

And for the US, this an opportunity to get back in the game.
The fundamental promise Venezuela must break is a program called Petrocaribe.

The initiative sold Venezuelan oil to countries like Jamaica and the Dominican Republic at rock-bottom prices with almost no interest. It’s part of what led countries that don’t share the ideals of Venezuela’s unique brand of socialism to call Hugo Chavez and current President Nicolas Maduro friends.

Venezuela can’t afford this anymore. The country’s inflation rate has soared to over 60%, people wait in line for days to find basic goods like milk and toilet paper, President Maduro’s approval rating has collapsed to below 30%, and his opposition — though fragmented — is still taking to the streets.

HSBC

The culprit for Venezuela’s woes is economic mismanagement as much as it is falling oil prices.

Shuffling cash from here to there

While oil makes up 95% of the country’s exports and over 60% of its revenue, Venezuela has done nothing to solve these problems.
What it has done, however, is delay disaster by moving some money around and asking for a little help from the friends Chavez made. For example, the Dominican Republic managed to throw Venezuela some cash by selling debt it owed Venezuela to Goldman Sachs.
“Venezuela has managed to increase reserves year-to-date despite the collapse in oil prices,” Barclays bank wrote in a recent report. “Considering the average oil price of about $55/b (Brent) in the first two months of the year, we estimate that Venezuela could have registered a deficit on its cash flow close to $2.0bn per month.
“Reserves have increased $2.2bn YTD, due to the payment of the debt that the Dominican Republic had with Venezuela under the Petrocaribe agreement ($1.9bn) and the issuance of Citgo debt ($2.5bn).”

Now Venezuela only needs $22.6 billion to keep everything going in 2015, down from $33 billion. Consequently, Wall Street traders are now measuring Venezuela’s default risk at a mere 55% rather than 85%.

Of course, the money Venezuela raised was supposed to be used to pay for other debt coming due later this year, Barclays pointed out. So come October/November there will be another fire sale — that is, another round of broken promises.

Not the best timing for Maduro

That’s unfortunate timing for Maduro and his party, who face nail-biter elections this fall (the date has not yet been set).
“The available polls show that the opposition coalition MUD is ahead by a wide margin… This could place the
National Assembly under the control of the opposition,” say analysts at HSBC. “In fact, with all the rising social tension, the date of the election is not even clear, and it might even be postponed.”

A Venezuelan opposition protester next to a barricade uses a slingshot against the national guard in Caracas, February 27, 2004.

If that happens, Venezuela’s opposition will almost certainly take to the streets again. And since Maduro has shorn up his support in the army by paying soldiers more than anyone else, the horrific images that have been beaming around the world since the winter of 2014 are likely to filter out of the country at a steady clip.

These are the images that led the Obama administration to make the (arguable) mistake of naming 7 high level security officials threats to the US. Maduro took that and ran with it, calling it a direct attack on Venezuela’s sovereignty — never mind that no more sanctions have been placed on the state.

Now we have Maduro in full anti US imperialism mode — a mode that can only help him in his own country where anti-US sentiment is high. This is when you see Venezuelan Kindergartners drawing anti-Obama pictures in classrooms (you gotta start them young on the Bolivaran Revolution). Maduro has also used this as a excuse to spend dwindling state funds on weapons of Russia and China.

It’s time for Obama to be very charming

The US opportunity in all of this starts on April 10th, when President Obama will travel to the Summit of the Americas in Panama.
There, he could do two things.
First, he should issue a big clarification, according to former US ambassador to Venezuela Patrick Duddy.

Reuters

“The United States should remind regional governments that the current U.S. sanctions target individuals, not the country as a whole,” Duddy wrote for the Council of Foreign Relations. “US officials should stress that the United States remains the largest market for Venezuelan oil and has sought to avoid measures that would impose greater hardship on the Venezuelan people.”
Then he should make some friends himself. Back in January, Vice President Joe Biden led a meeting of the Caribbean Energy Security Initiative, where he laid a bit of groundwork for that while discussing energy Independence.

“The… combination of…low oil prices, plus the plummeting costs of renewable energy gives us a moment, a window here where we will get significant support from the American public because we are doing better to invest more overseas and overseas is just across the water into the Caribbean,” said Biden. “We are in a position that I think we should understand there’s a sense of urgency that we take advantage of the opportunities.

It was urgent then. and it’s even more urgent now.

Venezuela Surrenders But 

Will God Saves Them ?

Venezuela seeks mediation with US

President Maduro (R) has asked Ernesto Samper (L) to mediate between Venezuela and the US

Venezuelan President Nicolas Maduro has called for a relationship with the United States based on diplomacy and an end to what he claims is a US plan to destabilise his government.
Mr Maduro was speaking to supporters in Caracas before meeting the Secretary General of the Union of South American Nations (Unasur), Ernesto Samper.

He later asked Mr Samper to mediate between Venezuela and the US.

The US imposed sanctions against Venezuelan officials in December.

They were aimed at those allegedly involved in suppressing the anti-government protests that shook Venezuela in the first six months of 2014.

On Monday, the US also imposed visa restrictions on unnamed Venezuelan officials it accuses of human rights violations and corruption.

'New tone'
 
Addressing crowds of supporters in the Venezuelan capital, Caracas, Mr Maduro called on the US president to "rectify and stop in time the coup plan (that would see) the destruction of Venezuela.
"President Obama, I say this with goodwill: We hope that you set a new and different tone with Venezuela."

Relations between the US and Venezuela have been tense for many years. The two countries last had ambassadors in each other's capitals in 2010.

Mr Maduro later told a news conference he had asked Unasur to "support the South American country" by mediating with the US.

For his part, Ernesto Samper said he would take Mr Maduro's concerns to Unasur member states, adding that it was them who could decide on whether to take any action.
The South American union is based in the Ecuadorean capital, Quito, and is made up of 12 countries, including Venezuela.

Mr Maduro's comments come days after he accused US Vice-President Joe Biden of plotting a coup against his left-wing government, an allegation that Mr Biden's office called "baseless and patently false".
Mr Biden (left) and Mr Maduro (right) had an unexpected meeting in Brazil last month

Too Little, Too Late For Venezuela?

Rapidly declining world oil prices, a lack of basic goods in supermarkets, insecurity, and a more united opposition look set to make 2015 the most difficult year yet for Venezuela’s Nicolas Maduro and the late Hugo Chavez’s Bolivarian Revolution.
Venezuela is in recession and experiencing one of the highest rates of inflation in the world. Its economy contracted by 2.8 percent in 2014, with inflation now running at 64 percent. World oil prices have fallen to below $50 a barrel, with Venezuela hit especially hard due to the lower price its heavy-oil trades at on the world market.
These economic factors, combined with fixed exchange have resulted in shortages of most basic goods. Queues stretching for blocks outside the state-run supermarkets are now a daily (and nightly) occurrence throughout the country.

Those most affected happen to be the poor – the core constituency of Maduro and the ruling socialist party (PSUV) – explaining the president’s 22 percent approval rating.

In an effort to boost falling oil prices Maduro recently embarked on a whirlwind tour of OPEC countries, although there is little evidence so far that he managed to secure any benefits for the country’s economy, and the price of oil has continued to plummet.
With the national budget built on the strength of oil exports, which account for 96 percent of export revenues, the falling price of commodities is particularly devastating. For every $10 decline in oil prices, Venezuela’s trade balance worsens by 3.5 percent of GDP. Economists have argued that oil needs to be trading at $120 for Venezuela to balance its budget and the IMF has predicted a 7 percent contraction of the economy in 2015.

The difficulty for Maduro is that the economic decision-making of the Bolivarian Revolution has been based on policy and for short term electoral gain. Any macro-economic restructuring would come at a significant social cost and would likely further alienate Maduro’s core supporters who have benefitted from social programmes funded by oil revenues.

With legislative elections scheduled later in 2015, it is unlikely that Maduro will implement drastic economic reforms and veer from Chavez’s time-honored tradition of winning over support with massive subsidies and government spending.

The high social costs of adjusting macro-imbalances combined with legislative elections later in 2015 will make a meaningful economic reform both difficult and unlikely.

“God will provide”

In his annual State of the Nation address on 21 January, Maduro confirmed that no cuts would be made to social programs. He did however hint that gas prices — for years the lowest in the world at $0.02 a liter, thanks to large government subsidies — would have to be raised, calling them a “distortion.”

This is not without risk as it could lead to further disillusionment against the government, with gas prices long considered a politically charged policy area. Similar increases in the price of gas in 1989 led to higher bus fares, which kicked off violent protests in Caracas. The “Caracazo” as it came to be known, was a pivotal moment in the gradual collapse of Venezuela’s then two-party system.

Maduro’s vague rhetoric – blaming the financial troubles on the political opposition and currency speculators and declaring “God will provide” – does not suggest that any major economic reform is likely.

The artificially fixed exchange rate of 6.3 Bolivars to the dollar for basic goods such as food and medicine will be kept, although two other rates (SICAD I and SICAD II) will be combined, with another third rate created to allow private sector participation. It is still unclear what the exchange rate will be and whether it will have an effect on diminishing the rampant black market.

Some commentators have seen this as an undercover devaluation of the bolivar, forcing companies to pay more for their dollars. This would avoid a full-blown devaluation and the inevitable social unrest that would follow in the wake of further inflation

The announcement that the minimum wage increase by 15 percent is unlikely to have a significant effect. Increasing inflation combined with the unlikely prospect of buying goods at the official exchange rate will ensure life remains difficult for the people queuing for goods in Venezuela.

Lack of basic goods

The dollar is currently trading at above 180 bolivars on the black market and has been part of the reason for the chronic shortage of basic goods in Venezuelan supermarkets.

Queues outside grocery stores have reached lengths unseen before in Venezuela, with shoppers waiting hours at a time to buy flour, milk, toilet paper and nappies among other essential goods that are in short supply.

Police and National Guard units have been deployed to maintain order, whilst more units have been deployed since 2014 on the border with Colombia to quell the rampant smuggling of cheap goods from Venezuela to its neighbor.

This prompts the question – what resources are left to combat the rapidly surging crime rate in the country? Venezuela, and specifically Caracas, is experiencing some of the highest levels of violent crime in the world. Any reductions in social spending are likely to further complicate the situation in 2015, leading to higher levels of insecurity.

Finally, a united opposition?

In the wake of Maduro’s annual address, crowds gathered in Caracas to protest the government on January 24 in scenes similar to the early days of the 2014 protests, albeit on a smaller scale.
What could be a defining factor in 2015 is a more united opposition. Henrique Capriles did not give his backing to the protests in 2014, instead demanding that the people wait until the economic effects of bad macro-economic policy are felt amongst the wider population.
It appears that Capriles believes that time is now, and there is a possibility that the opposition will be more united come the legislative elections later in the year.

In the meantime, it remains to be seen whether there is a repeat of the social unrest that rocked Venezuela in early 2014. Even if Maduro attempts macro-economic reforms, it may be a case of ‘too little, too late’, with oil prices now so low that further economic hardship is almost inevitable.

Argentine's murder mystery deepens

Another key person in the case of the murdered Argentine prosecutor has gone missing

An intelligence officer who was asked to give testimony in the mysterious murder of Argentine prosecutor Alberto Nisman has vanished, according to Bloomberg.

Antonio Stiuso, the officer, had helped Nisman in his investigation into a decades-old terrorist attack in which 85 people died. Nisman was about to present his findings to the Argentine legislature when he was found dead, shot to the head in his apartment.

Stiuso was instrumental in helping Nisman come to his shocking determination — that the Argentine government had covered up covered up Iran’s involvement in the bombing of Amia, a Jewish center in Buenos Aires, in order to secure an energy-for-food deal with the country.

Argentine President Cristina Fernandez said Stiuso had given Nisman false information. HootSuite

After Nisman’s death Stiuso was called in to give testimony. However he hasn’t been found at three of his registered addresses.

The government has said merely that they want Stiuso to be found.

All of this said, shortly after Nisman’s death the government came up with its own understanding of what happened to Amia. After Nisman’s death, President Fernandez made her first appearance in almost a month. There she related what happened to Nisman to threats against her own life, and blamed the bombing  on rogue agents in the intelligence agency.

So she’s decided to disband that agency. 

Problem solved?

 

Assassins Corp From Iran

 Iran Has A Lot To Gain From The Death Of A Crusading Argentine Prosecutor

The sacking of Yemen’s capital by Iranian-assisted Houthi rebels hasn’t been the week’s only positive geopolitical development from Tehran’s perspective.

On Jan. 18, Alberto Nisman, the Argentinian prosecutor responsible for investigating the a 1994 bombing of a Jewish community center in Buenos Aires — along with a suspected quid pro quo between the two country’s governments partly aimed at concealing Iran’s involvement in the attack — was found dead in his apartment.

Nisman was scheduled to testify to a parliamentary committee the next day and was expected to accuse the government of president Cristina Fernandez Kirchner of swapping increased trade with Iran for a promise not to prosecute the Iranian officials who plotted the attack.

Nisman’s assassination is tentatively being considered as a suicide, with the jurist felled by a single bullet wound to the head and clutching the gun that killed him. But there are indications that it may have been something much more sinister.

The lack of an exit wound suggested the fatal shot was fired at a further distance than Nisman could have managed had the wound been self-inflicted. His last WhatsApp was a photo of stacks of documentation related to the next day’s testimony and Nisman had apparently given his maid a grocery list for the following week. A 10-person government security detail was reportedly pulled off of his apartment the night of his assassination. Most damningly, there was no gunpowder residue found on Nisman’s hands, physical evidence that he didn’t discharge a firearm prior to his death.

Theories abound as to who killed him and why. But no matter who’s responsible for Nisman’s death, the Iranian regime benefits.



Remains of the AMIA after the 1994 AMIA bombing in Buenos Aires, Argentina.

After a decade of work, Nisman concluded that Iran’s government planned and executed the 1994 carbomb attack on the Asociación Mutual Israelita Argentina (AMIA), in which 85 people were killed.

As Washington Institute for Near East Policy scholar Matthew Levitt recounts in his book Hezbollah: The Global Footprint of Lebanon’s Party of God, Iranian intelligence chief Ali Fallahian “was given overall operational responsibility for the attack,” which was approved by Iran’s Supreme National Security Council on August 14, 1993.

The act was carried out through a terrorist cell organized by an Iranian-born and Buenos Aires-based Shi’ite cleric named Mohsen Rabbani who had been given a sinecure at the Iranian embassy in Buenos Aires just months before the attack. Phone records connect the embassy to a number in Brazil’s border region belonging to a safe-house used by agents from Hezbollah, the Iranian regime’s adjunct in Lebanon, responsible for actually executing the attack.

The AMIA bombing was one of the worst anti-Semitic massacres anywhere on earth in decades. But it was part of what was then a consistent policy of big-ticket state-sponsored terrorism for Tehran’s revolutionary regime, which had only been in power for 15 years at the time.

Iranian agents assisted in Hezbollah and Shi’ite militia attacks on the US Marine Barracks in Beirut, Lebanon in 1983, and on attacks on the US embassy in the city in 1984 and 1984, that killed 394 people total. Hezbollah and a second Shi’ite group carried out of a series of attacks in Kuwait in 1983 that targeted the US and French embassies and nearly destroyed an oil terminal.

Tehran sent agents to assassinate 4 leading Iranian-Kurdish opposition activists  in a Greek restaurant in Berlin in 1992, while pro-Iranian elements carried out a series of attacks in Paris in the mid-80s to punish France for its support of Saddam Hussein’s government during the Iran-Iraq War.

In total, Iranian elements assassinated 18 regime opponents on European soil in the late 1980s and early 90s. And Tehran assisted in the Hezbollah attack on the Israeli embassy in Buenos Aires that killed 23 people in 1992.

In 1997, Mohammad Khatami was elected president. He helped shift the regime’s international posture away from the kind of revolutionary confrontation that had dictated the Islamic Republic’s foreign affairs up until that point.

Nevertheless, Iran’s powerful Revolutionary Guards continued to export terror with high-level regime approval while Khatami (1997 – 2005) helped re-fashion the Islamic Republic’s image as a regime whose actions could be considered increasingly within the mainstream of acceptable international behavior, an objective that’s been successfully advanced by Hassan Rouhani, the country’s current and similarly reform-minded president.

In 2011 Iranian agents were uncovered plotting to assassinate the Saudi ambassador to the US in 2011. And in 2012 a Hezbollah suicide bombing targeted Israeli tourists in Burgas, Bulgaria, killing 6 people. (Hezbollah operatives came close to pulling off a major attack against the Israeli embassy in Bangkok, Thailand in 2012.) Aside from Shi’ite organizations like Hezbollah and Iraq’s Badr Group, the State Department’s 2013 citation of Iran group as a state sponsor of terrorism notes its support for Al Qaeda elements in Iraq, some of which later formed the Islamic State.

Consequently, the AMIA bombing is a reminder of a period in Iranian history that likely embassies many of the country’s current crop of leaders: A time when blatant and essentially unprovoked attacks on civilian targets inside of foreign countries was one of the signal elements of the regime’s “revolutionary” foreign policy.

Twenty years after the AMIA bombing, Iran has successfully shed its pariah status while retaining terrorism as an instrument of policy. Nisman’s investigation threatened to upset that balance, partly by exposing how Iran managed this feat in the first place.

His specific allegation that high-ranking Argentinian politicians had compromised the integrity of the investigation into the AMIA bombing at Iran’s behest only proved how badly political elites in both countries want the truth of the incident to remain buried. And it showed how Iran believed it could edge its way back to respectability while continuing to support and abet terrorism far beyond its borders.

Nisman’s testimony would have shown that the AMIA bombing wasn’t jut a discrete event, but an ongoing, two decade-long conspiracy that implicated Argentina and Iran in the execution and cover-up of a major act of terrorism.

Nisman’s death may end up being part of that very conspiracy. His absence keeps the story buried: It is now even less likely that the attack’s Iranian plotters will face justice in Argentina (or countries with extradition treaties with Argentina), and his death shields Argentine leaders who treated the AMIA attack as an dreary diplomatic inconvenience rather than state-sponsored mass murder.

However, Nisman believed the evidence he had collected would outlive him. Four days before his death, he told an Argentine TV interviewer that “With Nisman around or not, the evidence is there,” according to the New York Times.

Why Argentinian Prosecutor Died

 

    "If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter." ~ George Washington


Argentina: Prosecutor Investigating 1994 Hizbollah Bombing Found Dead Days After Exposing Deals with Iran
Oil and arms deals. via Argentine Prosecutor Investigating Jewish Center Bombing Found Dead
Alberto Nisman, an Argentine prosecutor investigating the 1994 bombing of a Jewish center in Buenos Aires, was found dead from a gunshot wound in his apartment on Monday, days after he accused Argentine President Cristina Fernandez of secretly negotiating with Iran to avoid punishments for those behind the attack.
The bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires killed 85 people and injured 300. Iran and Hezbollah have long been suspected of carrying out the attack. In 2013, Nisman, who had been investigating the bombing after Iran and Argentina reached a widely criticized deal to establish a joint “truth commission” to investigate the attack, released an indictment blaming Iran and Hezbollah for the bombing.
Last week, Nisman asked an Argentine judge to call in Fernandez as well as Argentine Foreign Minister Hector Timerman for questioning. Nisman told reporters that he believes the impunity of the Iranians involved in the attack was ordered by Timerman in exchange for securing closer ties with Iran for oil and weapons deals.
“The president and her foreign minister took the criminal decision to fabricate Iran’s innocence to sate Argentina’s commercial, political, and geopolitical interests,” Nisman had said, The Associated Press reported.
As we posted on the intrepid Nisman in 2013, Argentine Indictment Accuses Iran of Terror Plots, Cells in Latin America:

“中国人滚出去”

尼加拉瓜湖畔小城里瓦斯的一些原著民要求“中国人滚出 去”

英国《卫报》星期三发表一篇实地采访报道，

探讨了中国公司所承建的尼加拉瓜大运河工程可能对当地社会和环境造成的影响。

记者沃茨（Jonathan Watts）由西向东，从太平洋海岸启程，沿着运河的设计路线穿越尼加拉瓜，最后到达加勒比海岸，同沿途的尼加拉瓜人进行了交谈。

报道说，在一个兴建巨大工程的时代，尼加拉瓜运河工程可谓是巨中之巨。

尼加拉瓜运河的长度将是巴拿马运河的三倍，而深度将是巴拿马运河的两倍，工程土方挖掘量将达到45亿立方米。

这项工程将给当地社会和文化带来巨大影响，以致一些官员把这项工程同当年西班牙殖民者的到来相提并论。

报道援引尼加拉瓜运河局负责人考茨（Manuel Coronel Kautz）的话说，“就像西班牙人当年到这里来一样，他们带来了新的文化。”

“很难预料未来将会发生什么，就像当年原著民在看到欧洲航船时无法想象未来将发生什么一样。”

报道说，记者所遇到的许多当地人对这项工程可能产生的影响感到担忧，也对面临被迫迁移的前景感到不安。

严峻的历史

记者认为，许多人的不安在某种程度上与当地人同外国人打交道的历史有关。

记者在位于太平洋海岸和尼加拉瓜湖之间的小城里瓦斯（Rivas）的镇中心广场看到两幅壁画，反映了当地人同外国人交往的严峻历史。

其中一幅壁画描述了1522年西班牙殖民者同当地一位原著民酋长的会面，这位酋长用一笔数量可观的黄金换了一件衬衣、一件丝绸外衣和一顶帽子，属 于同外国人所做的第一笔被黑的买卖。

另一幅画描绘了同美国探险家沃克（William Walker）领导的雇佣军作战的当地人。

《卫报》的报道说，现在想要改变尼加拉瓜历史的外国人是香港尼加拉瓜运河开发集团（HKND）董事长王靖，一位从中国电信业转行到太平洋彼岸运河 开发的神秘大亨。

尽管王靖一直强调尼加拉瓜运河是一个私营项目，但是许多人仍然认为他身后有北京政府的支持。

一条由中国控制的穿越尼加拉瓜的运河将具有重要的地缘战略意义，不仅对巴拿马运河构成挑战，也可以作为北京加强其在美洲影响力的基地。

尽管这条运河产生的竞争将会降低航运价格，推动贸易，为拉丁美洲带来利益，但如果出现同美国的冲突，这条运河完全可能成为冲突的热点。

“现代版的沃克”

批评运河建设计划的人士指责奥尔特加总统出卖了国家的遗产，并且形容王靖就是“现代版的沃克”。

与此同时，报道也引述了运河工程支持者发表的谈话。

在位于尼加拉瓜湖东岸湖港小城圣米格利托（San Miguelito），一位名叫巴利亚达雷斯（Nereida Balladares）的旅店老板对记者说，这里很穷，许多年轻人没有工作，当地经济需要这条运河。

她还说，希望自己能在有生之年看到第一条航船通过运河。

对于尼加拉瓜政府来说，这是一项以牺牲大片湿地和主权为代价的巨大赌博。

除工程对环境造成的破坏之外。尼加拉瓜政府在项目运作早期几乎没有任何发言权。

每过10年，尼加拉瓜的股份将增加10%，直到在半个世纪之后成为最大股东。

 

墨西哥给中国资本进军海外上一课

墨西哥总统出席北京APEC峰会前，突然宣布取消由中国企业牵头 兴建一条数十亿美元高铁的合约。这对中国资本进军海外意味着什么？

墨西哥总统培尼亚突然宣布撤消由中国铁道建筑总公司、中国南车牵头的投标结果，并决定重启投标程序。墨西哥官员说，取消中国公司中标权 是为了避免“对投标过程的透明度”存在质疑。

虽然由中国铁建领导的这个企业集团还包括4家墨西哥公司，但中国铁建企业是这条高铁项目招标的唯一竞标者。
值得注意的是，包括日本三菱、法国阿尔斯通、加拿大庞巴迪以及德国西门子公司在内的另外16家公司最终决定放弃在10月15日投标最后 截止日期前提交计划。

有争议的过程？

其中多家国际公司认为，从发标到递交招标书截止日期仅有两月，时间仓促，没法在墨西哥方面限定时间内递交标书并开工，因此它们要求延迟 投标时间。但此一要求被墨西哥交通部拒绝后，这些公司全部退出这次竞标。

虽然墨西哥官员早些时候宣布中铁建牵头企业中标过程“透明、合法”，但是墨西哥有反对党议员对交通运输部长质疑这项标案，并指控政府提 供信息，暗中协助中国企业团队及其墨西哥合作伙伴。

英国布鲁奈尔大学经济系教授刘芍佳表示，这条新闻对中国跃跃欲试进军海外市场的投资来说，既是坏消息，也是件好消息。
他指出，这说明了中国资本进军海外不仅需要考虑经济、法律因素，也需要考虑社会、政治等复杂因素。在发展中国家，不要以为中方按法律办 事，就能够控制投资的所有风险。

融资和科技

中国目前已经建成了世界上最大规模以及最高运营速度的高铁网。高铁带来的经济效益和巨大潜力，各国有目共睹。
在国内获得巨大成就后，中国高铁方面提出了雄心勃勃的在海外拓展的计划，包括在亚洲所谓“泛亚铁路网”的四条线路：北路、南路、南北走 廊和东盟通道，在非洲东部的高铁计划，在南美的高铁计划。单从技术上看似乎完全可行。

在中国成为世界第二大经济体后，高铁也成为中国巨额外汇储备和资本走向国际的一个交通工具。

关注亚太地区的期刊《外交官》的编辑之一克林特·里查兹撰文指出，中国高铁在墨西哥中标的一个最重要原因是：中铁建牵头的企业同意融资 该项目高达85%的成本。

早些时候宣布中国企业中标时，中国媒体报道一片欢呼称：中标墨西哥高铁项目是中国铁路第一个真正意义上的高铁“走出去”，具有非常重大 的意义。这一铺天盖地的报道压倒了同时发生的墨西哥严重的贩毒和凶杀事件的新闻。
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刘芍佳认为，中国高铁走出国门的总趋势应该说是势不可挡，因为目前它拥有一些绝对优势：技术、经验和资金实力。这不是某个总统或政治势 力就能简单阻挡的。但这个过程不会一帆风顺。

墨西哥取消中国企业中标的消息似乎来得很突然，中国媒体说，中铁建南车开会商讨“紧急应对”。看来中国企业还是把事情想得简单了。

这则消息是好是坏？要看对谁来说，还要看从什么角度出发。
刘芍佳指出，中国资本开拓海外市场不会像想象中那么顺利，除了经济因素以外，还有政治、文化、历史等因素，这将是一个中国资本拓展海外 学习和累积经验的过程。

他说，从某个角度看，即使是重新第二轮投标中国公司也没有胜出，这对中方来说，也并非完全是坏消息。因为假使在缺乏完善的社会体制保障 的国家里，官员甚至政府也有不讲信誉的可能。

对中国企业来说，所幸这一变卦出现在投标阶段，而不是资金投入后变卦，甚至以后不还钱。

APEC峰会

墨西哥高铁的波折出现之际，正值北京APEC峰会举办前夕。这次峰会的一个重要议题就是“加强全方位基础设施建设”，中国的资本将发挥 重要作用。

过去中国主导了全球低端制造业，全世界都予以接受。
刘芍佳说，如果中国高科技和资本进军世界、希望发挥主导作用的话，恐怕这对它在西方的商业竞争对手来说并不是什么好消息。

他说，这对中国企业提出了问题。这也给中国政府提出了问题。在这种情况下该怎么办？

Why Argentina Is Now Getting Exactly What It Deserves

Argentina has its back against a wall. On July 30 it may default on a sovereign-debt payment that could send its economy into a tailspin of rising interest rates, money printing, and inflation.
It could be the worst economic tragedy the republic has seen since 2001.
And the tragedy will be well deserved, because this is a drama of Argentina’s own making, a figment of political imagination tied closely with its history and culture. In Argentina, debt is identity, and this specific over-$1.3 billion debt in question, purchased by a group of hedge fund managers back in 2001, has hit a nerve.

Here’s what former finance minister Hernan Lorenzino said about it in 2012:

“The state has the capacity to make these payments. We have the funds available to make these payments. But fundamentally, we have the political will to continue paying as we have paid. The possibility of default does not exist in Argentina … (The rating agencies) pretend to install the idea that something is going to fail as they have been unsuccessfully for years. They will not accomplish this.”
For over a decade the country has refused to pay a group of hedge fund managers led by Elliott Management’s Paul Singer. This group, known as NML, refused to take a massive haircut on Argentine sovereign debt purchased after the country’s last crash. Argentina, in turn, refused to pay them 100 cents on the dollar and fought to continue doing so all the way to the Supreme Court. It lost.
On July 7, the republic will enter into settlement talks with a court appointed special master in New York. Its new finance minister, Axel Kicillof, will be there, supposedly to negotiate.

“We’re glad to see the press reports that Argentina has agreed to meet with the special master next week in New York,” said Jay Newman, senior portfolio manager at Elliott Management. “But engagement with the court or with creditors doesn’t have to wait another week. We’re ready to meet with Minister Kicillof during his visit to Washington, D.C., this week, and to negotiate without preconditions. We’re serious about negotiations, but we are still waiting for Argentina to engage in any dialogue with us.”
Remember … “supposedly.”

The reality is that Kicillof has been in Washington meeting with international bodies like the Organization of American States for weeks. He’s been trying to convince them that Argentina should not have to honor the clause in its bond agreement with the holdout hedge fund managers that has been the crux of this case — the pari passu clause.

This clause states that Argentina cannot favor one group of investors over another. That’s what it had been doing — paying the bondholders that restructured, and not the holdouts. Last month it tried to pay everyone except the holdouts (not the best show of faith). But the judge presiding over this case, Judge Griesa, wasn’t having it and sent the payments back to Argentina.
If some investors get paid, every investor must get paid.
To Argentina, the problem is the holdouts are not investors — they’re “vultures.” They bought the republic’s debt after its 2001 default, which President Cristina Fernandez argues shows that they only meant to speculate with it.

Fernandez said as much in her speech after the Supreme Court decided against the republic. On a live 30-minute broadcast she walked her nation through a history lesson.

She told the story of 1976, the first time international debt turned to inflation. It was, she said, “without a doubt the most powerful trap we’d been in keeping us from growth, the development of Argentina, it created poverty, backwardness, homelessness, a lack of infrastructural development, investment in education, in science … “
Since then, Argentine politicians have associated speculators with their worst national nightmares. They are the lowest of the low and, as such, deserve no respect.

“This was a political decision leaders had made,” bankruptcy expert William A. Brandt, CEO of Development Specialists Inc., a firm specializing in turnarounds, told Business Insider in 2012. “Argentina is an incredibly sophisticated economy and brought this problem on itself by doing the unthinkable and defaulting on its debt.”

In that same speech, Fernandez said that paying the holdouts could bring similar claims out of the woodwork — claims to the tune of $15 billion — which would wipe out half of the country’s dollar reserves.

Still, some contest that argument. In a note, debt specialist Josh Rosner of GrahamFisher said that even if that is true (if) Argentina could still manage the $15 billion:

“Argentina has ignored the reality that even if that $15 billion number was correct and the creditors unwilling to negotiate a payment formula that was acceptable to both parties, the government would still be able to manage the increased debt burden as a percent of GDP. Moreover, late last year, at least one Wall Street firm offered to raise the full $15 billion that the government claims it owes. If the government chose to raise capital as a means of resolving this impasse, it would normalize its relations with the international capital markets, reduce its cost of funds going forward and immediately begin to attract the foreign investment necessary to develop key industries, including its energy sector and the broader economy.”

The other argument Argentina has used to avoid payment is to say that this sets a dangerous precedent for investors in sovereign debt. If investors can avoid haircuts by refusing to restructure, why would they ever?

Argentina’s refusal to pay the holdouts has thrown the entire sovereign-debt system into question.

None of this is to say that Paul Singer and his crew have not been aggressive, sparking a sort of PTSD in the Argentine psyche. NML has used the law to go after Argentine assets all over the world, at one point getting a Ghanaian court to impound an Argentine naval vessel as collateral.

But that doesn’t make the country’s intransigence right. The tone of its politicians has crossed the line into hysterical territory. One of President Fernandez’s deputies, Carlos Kunkel, told the Argentine press that he was convinced that Judge Griesa — the man who handed down the ruling that the country must pay — is forcing negotiations because he’ll get a cut of the payout.

Would you want to lend this country money?

Venezuelan president Nicolas Maduro Way Beyond Idiocy

 

 Venezuela Decrees "All Properties Leased for 20 Years Will Be Sold to Tenants in 60 Days at Government Set Prices"

Venezuelan president Nicolas Maduro proves once again the capacity for stupidity is virtually unlimited.

Today Maduro mandated that any properties leased for 20 years or longer will be sold to current tenants at government mandated prices, essentially confiscating all long-term rental properties.

Via translation from Libre Mercado, please consider Venezuela Expropriates Properties Leased More Than 20 Years.

    Nicolas Maduro, president of the Republic of Venezuela decreed on Monday that properties leased for 20 years, will be sold to their tenants in a maximum period of 60 days. The National Superintendent of Housing says the lease countdown began on March 28.

    In the event that the property owners refuse to sell their property, the Superintendent of Housing will impose a fine of 29,000 euros, which must be paid within five days. If the penalty is not paid in 5 days, the fine will more than double to 60,000 euros.

    Property owners are totally defenseless, as buyers may propose bargain prices. Nonetheless, owners shall comply with the "fair value of the dwelling" determined by the government via a form which shall provide, among other things, photographs of both the housing and the façade.

    Once completed, the owner must wait for the government determined "right price" estimated by the superintendent for housing.

Wow. What's next?

Bitter Irony in Venezuela's Oil Sector

In a bid to show members of Venezuelan society the age of Chavismo was alive and well, Venezuelan President Nicolas Maduro decided to rename one of the largest oil fields in the world after his mentor and former President Hugo Chavez. The Maduro administration might not last the year, however, suggesting the former president's legacy is indeed out at sea.

Maduro, the former vice president and foreign minister during the Chavez era, said the nation's oil sector was "rescued" by the former president, whose 14-year reign over Venezuela ended when he died from cancer last year. Now, it's time to honor him by renaming the country's offshore Orinoco belt the "Hugo Chavez oil belt," he said.
The president in December devalued the currency in an effort to reverse the decline of an ailing oil sector. The Organization of Petroleum Exporting Countries in its February market report said member state Venezuela was producing around 2.3 million barrels of oil per day, about 1 percent less than the year before Chavez died and almost half of the level from 1997, the year before he took power.

Oil accounts for 95 percent of the country's export earnings and nearly half of its budget revenues. While the decline in production since 1997 can be attributed in part to field maturation, most of the problem can be blamed on mismanagement of state-owned oil company Petroleos de Venezuela, or PDVSA.

"Hugo Chavez" is estimated to hold 513 billion barrels of crude oil. The former administration pegged its oil recovery hopes on the field through joint ventures made between PDVA and its foreign minority partners. Output from those efforts was expected to reach the 1 million bpd mark by last year, though actual production makes Libya look like an investor's dream. Last week, PDVSA was called on to rethink its strategy.

For his part, Maduro, now 11 months into his first term in power, is facing growing political opposition and nation-wide protests that turned deadly in recent days. In a bid to secure his grip on power, he's charged opposition leader Leopoldo Lopez with terrorism. Amnesty International said those charges were politically motivated. Last year's 50.7 percent victory for Maduro brought cries of foul from rival Henrique Capriles. Lopez now is just one of the president's political concerns.

Before Maduro took office, we expected the economy in Venezuela would continue to suffer no matter who took power. Economic prospects for Venezuela are down with former top export destination United States in the midst of an oil boom of its own, leaving an already weakened Venezuelan economy struggling to stay afloat.  Inflation stands at around 56 percent. Perhaps it's with a bit of irony then that, given Chavez's failure to administer some of the largest oil reserves in the world to his country's favor, his successor decided to don the Orinoco belt with his namesake.

Why America Doesn’t Need VenezuelaLike It Used To

Venezuela’s acting President Nicolas Maduro greets oil workers during a visit to a facility at the oil rich Orinoco belt at the state of Monagas.

Protests are raging in Caracas, shoppers are fighting over chickens, and Venezuelan President Nicolás Maduro has amped up the anti-American rhetoric, blaming unrest on the American government and kicking diplomats out of the country.
While in the past, strained diplomatic relations between the the world’s most oil-rich country and the United States might have caused panic, America doesn’t need Venezuela’s oil nearly as much as it used to.

Former US ambassador to Venezuela and current Duke professor Patrick Duddy explains why:

The U.S. is still Venezuela’s largest market, but we do not buy nearly as much oil from Venezuela as we once did. The US has reduced its aggregate consumption by about 1 million barrels in recent years and we’ve also increased production, thanks largely to shale exploitation and horizontal drilling. 

The US used to import more than 50% of the oil it consumed. Now, it imports substantially less than 50% of its consumption. We’re using less, producing more. 

Production is also expanding in Canada.  Mexico has recently changed its constitution to permit foreign participation in its energy sector and it is widely understood that they have very substantial shale reserves. Brazil has substantial off-shore reserves, known as the pre-salt deposits; Argentina has lots of shale as well.  

Imports from Venezuela to the U.S. are down to, on average, 900k barrels a day or less, and sometimes it drop substantially below that. So, the relative importance of Venezuela to the U.S. has changed.  

Duddy went on to explain why Venezuela probably needs the US more now than the US needs Venezuela. 
“Oil represents over 95% of Venezuela’s export earnings. From those earnings, they finance 45-50% of government activities,” said Duddy. “If oil revenues slips, the situation there could become more urgent.”
Things were pretty different back in 2002, when a strike in Venezuela caused the country’s oil output to collapse from 3.1 million barrels a day to arround 200,000, causing oil prices to rise sharply to the highest prices since the Gulf crisis in 1990, according to Daniel Yergin’s “The Quest.” Crises like that led President George W. Bush to push for increased fuel efficiency aimed at getting Iranian President Mahmoud Ahmadinejad and Venezuelan President Hugo Chávez “out of the Oval Office.”
Even if America is less vulnerable than it used to be, however, Venezuela is still important to the global oil market. As predicted in a research note from UBS strategist Julius Walker:
Any production outage would cause a significant price spike. Any production shut-ins as a result of political unrest would almost certainly result in sharp price spikes, and a total production shortfall would severely strain global oil markets.  (and China dies....)

Venezuela Celebrates Christmas One Month Early This Year

A Few Bizarre Anecdotes That Show Venezuela Is At The Edge Of A Dangerous Precipice

Failed state's leaders always think they are bigger than god, most important of all, bigger than foreign investors. Chavez kicked out all the foreign investors and thought he could single handedly make his country into another China of South America. So here we see runaway inflation, shortage of almost everything, national oil industry falling apart etc. Maybe Najib should also start a 'Vice Ministry of Supreme Social Happiness' in Bolehland?

Hugo Chavez's successor, Nicolas Maduro, is getting desperate.

Today, he is supposed to announce new measures to reform the Venezuelan economy — an economy that, for the last 12 months, has had an average inflation rate of almost 50% and faced shortages of staples like toilet paper.

What's worse, is that the 2014 budget the Venezuelan legislature proposed last month basically ignores all those facts, and bases its allocations on an inflation outlook of 26-28%.

Meanwhile, there are signs everywhere that Maduro is grasping at any possible shred of political legitimacy he can get his hands on. Last month, he asked the legislature to grant him special powers to combat corruption and economic sabotage.

It can't be stressed enough — he is no Chavez. So his administration has to compensate.

And here are some bizarre ways he's doing it.

    The country has created a 'Vice Ministry of Supreme Social Happiness' to combat despair. Maduro's opposition responded that the people will be happy when they have something to eat.

    For the "sake of happiness", the Ministry moved Christmas up to November 1st — this may also be an attempt to jump-start some consumption. As Venezuelan paper El Universal points, out, it also could also be a way for the government to give its ministers some cash in the form of early Christmas bonuses right before election day on December 8th.

    Election Day just so happens to fall on the same day as the 'Day of Loyalty to the Supreme Commander Hugo Chavez' — now guess who that will get out on the streets all amped up and ready to vote... The opposition has cried foul, but Maduro is "certain" that everyone will vote their political conscience.

    Maduro wants to go to war with Twitter, after several accounts belonging to his government's Ministers were frozen.

    Maduro announced that a bunch of construction workers saw the face of Chavez while they were working in an underground subway the other day.

    The government sent troops to take over a toilet paper factory to "safeguard" production.

So yeah, things are getting weird.

 

The Failing BRIC - Brazilian Policies Scare off Oil Majors

 

First, the good news.

Later this month, on at a 21 October auction, Brazil will sell off leases in its massive Libra southern Atlantic offshore oil field, with high expectations that the sale will inject substantial foreign investment into its economy, bedraggled since 2008 by the global recession.

The Libra prospect is estimated to hold 8-12 billion barrels of recoverable crude oil, which, if seismic studies confirm, make it the largest deepwater oil field ever discovered in an energy hungry world frantically searching for Middle East replacements. Brazil’s government’s Agência Nacional do Petróleo oil regulator has estimated that as much as $200 billion will have to be invested to develop Libra over the contract’s 35-year period, which leaves even Petropreas tapped out.

As of January 2013, Brazil had 13 billion barrels of proven oil reserves, the second-largest in South America after Venezuela. The offshore southern Atlantic Campos and Santos Basins, hold the majority of Brazil's proven reserves. Last year, Brazil produced 2.7 million barrels per day of liquid fuels, of which 78% was crude oil, putting it ahead of OPEC major Iraq, still struggling to revive its oil industry after the 2003 U.S. led invasion, which toppled the regime President Saddam Hussein.

The bad news?

Few takers.

As yet.

Some of the major global producers have taken a pass on this option. Oil majors, including ExxonMobil, BP and Chevron have not submitted bids, amid concerns over Brazil’s state-dominated strategy for developing the Libra offshore field. The company that wins the Libra auction will pay a bonus to the Union of R $ 15 billion. The final signing of the production sharing agreement, which approximately 1,500 square kilometre, s is scheduled for November. The tender winner is expected to develop exploration activities for four years, a period that can be extended so that it is inserted in the production sharing contract.

So, why the foreign reluctance?

Apparently because the Brazilian government is asserting that it will play a major role in developing the country’s offshore hydrocarbon assets, rather than letting in multinationals solely on their terms. In a first for developing world economies, Chinese state-controlled oil companies will be limited to joint bids to develop Libra, Brazil's largest offshore oil discovery, amid concerns the firms could share data and reduce competition.

The long term stakes are high, given the potential worth of the assets. The authoritative U.S. government’s Energy Information Administration notes in its country brief that Brazil is a rising 21st century energy player is not in doubt. “Brazil is the 8th largest total energy consumer and 10th largest producer in the world. Brazil was the largest producer of liquid fuels in South America in 2012. More than 90% of Brazil's oil production is offshore in very deep water and consists of mostly heavy grades. The United States imported 187,000 bbl/d of Brazilian crude oil in 2012 and has been Brazil's largest crude oil export destination for the past decade… The world's largest oil discoveries in recent years have come from Brazil's offshore, pre-salt basins… In contrast to the earlier concession-based framework, Petrobras will be the sole operator of each production sharing agreement and will hold a minimum 30% stake in all pre-salt projects.”

The money quote of the EIA survey is the last sentence, defining the role of Petrobras.


Complicating the auction picture are recent revelations by whistleblower Edward Snowden that America’s National Security Agency has used its global espionage program to spy on Petrobras negotiations. Despite this, Petrobras president Graça Foster told reporters, "From what I see, the information I have, really, what is on the table, there is no possibility of changing the date of the auction because of this information, which is not material, not identified."

We’ll leave the final word to the EIA, which notes, “The potential impact of the discoveries upon world oil markets is vast. However, considerable challenges still must be overcome to produce these reserves. Considering both the large depths and pressures involved with pre-salt oil production, there are significant technical hurdles that must be overcome. Further, the scale of the proposed expansion in production will also stretch Petrobras' exploration and production resources and Brazil's infrastructure, as will strict local content requirements.”

What is clear is that Petrobras and Brasilia want joint ventures, but the stringent terms are currently anathema to global oil majors, used to exploiting the developing world on their own terms. Still, 8-12 billion barrels at $100 per barrel represent a potential $800-1.2 trillion of revenue, and it might be time for international oil companies to begin considering working on the new 21st century energy playing field. For Brasilia, the fallback position is China, which still seems eager, even despite the restrictions. Accordingly, Brazilian offshore oil reserves are there for western oil companies to lose.

Malaysia and Venezuela - All The Failed and Failing States Are Same

Venezuelan Oil Tankers are Launched and then Abandoned at the Dock

Over the last 14 months, Venezuela has held launching parties for three new oil tankers, a clear sign of the nation’s ambitions to expand its fleet as it prepares to diversify into the Asian markets.
One glaring problem stands in the way. The tankers, built at shipyards in Iran, Argentina, and China have never actually arrived at Venezuela, in fact they have not left the shipyards where they were built.
The new tankers were part of Ex-President Hugo Chavez’s plan to stimulate the shipbuilding industries in Iran, China, Argentina, and Brazil (all allies to the socialist country), and try to reduce US power. PDVSA, the nation’s state-owned oil company, is struggling from falling production volumes and a tight cash-flow, and hoped that by increasing its own fleet size, it could avoid high lease prices that are costing it hundreds of millions of dollars a year.


An internal report from March shows that PDVSA leased 75 tankers, paying as much as $15,000 a day for each tanker.
The three tankers launched represent just a small percentage of the 42 vessels PDVSA ordered back in 2006 as part of its plan to replace its entire fleet by 2012.  A total of five tankershave actually set sail.
Some analysts have suggested that part of the problem for the unknown delays is that Venezuela, by trying to develop its allies shipbuilding industries, is using shipyards that lack some of the most modern shipbuilding technologies, and therefore take much longer than other larger yards which could build the tankers in three to four years.
Gustavo Gonzalez, the president of the Venezuelan merchant marine officers’ association, explained to Reuters that “when a vessel is launched to the sea, it is because it is ready. The delivery normally occurs 2-3 months after the launching.”
Sebastian Aguilar, a spokesman for the Rio Santiago shipyard in Argentina, said that the “Eva Peron is still at the dockyard. It was launched in July 2012 and is currently in the last stage, getting equipment ready before its final delivery.”


Iran’s former commerce minister states that the Sorocaima is ready for delivery, and just waiting at the Sadra shipyard.

And the Carabobo, being built at the Bohai shipyard in China, is not yet ready for navigation, and so not available for delivery.
Why then the elaborate launching parties?
Whatever the reason for the delays, it is clear that Venezuela’s plans to expand its fleet are stumbling, and it will be forced to once more pay hundreds of millions on leasing tankers to make its deliveries.

It Is Another One Of Those CIA's Dirty Plot !!!!

Venezuelan Crisis Worsens: Water Twice as Expensive as Gasoline


Due to years of underinvestment in the water processing system, and a rich abundance of crude oil, water in Venezuela is now twice as expensive as gasoline.

Residents in Caracas have become wary of tap water after it was discovered that Lake Mariposa, a reservoir that supplies tap water to 750,000 Venezuelans, has become seriously contaminated due to its role as a site for followers of Santería, a syncretic religion of West African and Caribbean origin influenced by and syncretized with Roman Catholicism, to dispose of their garbage and sacrifice animals.

The lake was last cleaned four years ago, when dozens of animal carcasses were dredged from its bottom, a councillor of the Los Salinas municipality told Bloomberg.

Water from the lake is pumped into a 60-year-old treatment facility that lacks the adequate technology to clean it of the toxins and make it safe for drinking. Fernando Morales, an environmental chemistry professor at the Simon Bolivar University of Caracas, said that “the treatment process has not adapted to the steady degradation of the water source. I wouldn’t use this water at home.”

He explained that the utility’s water treatment systems were incapable of dealing with the level of contamination at the lake. The chlorine used would kill the bacteria, but not the viruses. In order to make the water safe for consumption, the viruses must be removed with molecular sieves and modern biological monitoring systems which do not exist in Venezuela.

The market for bottled water is booming, with families paying $4.80 for a five gallon jug of clean water, twice the price of gasoline.

The water crisis really began with Hugo Chavez’s rise to power. In 1998 a year before his election as president, the state-owned water monopoly, Hidrocapital, had a yearly budget of $250 million, but in 2010 that had been reduced to just $9.7 million, according to the company’s former vice-president Norberto Bausson.

The socialist revolution supported by Chavez redirected the funds from the state-owned companies to be used in projects that helped to reduce poverty and widen access to education, health care and housing. 422,340 houses were built for Venezuela’s poor in the past two years, but all at the cost of basic services.

Venezuela has the world’s largest oil deposits, and eight times as much fresh water per capita than France, yet the country is suffering blackouts and a water crisis.

 

BRIC Breaking Down 

Brazil raises interest rate to 9% to battle inflation

Asia "Tigers" Will follow the path to hell

Economists believe Brazil's central bank will raise rate again later in the year

Brazil has raised its benchmark interest rate to 9% from 8.5% in a further attempt to rein in inflation.
The central bank's monetary policy committee, the Copom, voted unanimously for a third straight half percentage point rate rise.
The Copom left the door open for more hikes by reiterating that the latest rise is part of an ongoing rate-adjustment process.
A fall in the value of Brazilian real has stoked inflation, currently 6.15%.
The currency's fall has been blamed on an outflow of capital triggered by expectation that the US Fed will end its stimulus policy, leading to a stronger dollar.
The real has lost 20% of its value against the dollar since the start of the year.
Other emerging nations, including in southeast Asia, have suffered similar currency problems.
Higher interest rates would help Brazil control inflation, and also bolster investors' confidence, the International Monetary Fund said in a report on Wednesday.
Fabio Akira, chief Brazil economist at JPMorgan, said further rate hikes were likely. He is forecasting a 50 basis points rise in October and another 25 points rise later in the year.
Last week, the real fell to as low as 2.45 to the dollar, its lowest level since December 2008.