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The Kirchner government launches renewed assaults against Argentine media conglomerates. A bitterly cold winter exposes the bottom line on Argentine energy reserves. Argie-bargie Argentine unions. Reproductive rights earn a failing mark. Argentina's very hot GDP worries some that the economy could overheat. And no chance for del Potro vs Federer this summer in New York, sniffle.
Top News: After over a year of feuding with the media, President Cristina Kirchner is launching a new assault against the country's largest newspaper conglomerates. The latest battle is for Papel Prensa SA. The Kirchner administration argues that the company was sold in the 1970s under coercion by the military dictatorship to a group of Argentine newspapers, including the country's present leading papers La Nacion and Clarin. The government says it will turn to the courts and ask Congress to declare the company a "national interest."
But the offensive doesn't stop there. Last week the government gave Grupo Clarin, the largest media company in Argentina and among the most profitable in Latin America, 90-days to shut down its internet operations. Clarin's internet division, Fibertel, services over 1 million customers in 45 cities throughout the country. The government accuses Fibertel of operating under an expired license and a court is set to rule on the government's suspension this week.
It's been the coldest winter in 40 years in Argentina and parts of South America. During July and early August, parts of Argentina were even colder than Antarctica. The record cold set off record demands for natural gas, with many companies, such as Dow Chemical and Siderar SAIC, to scale back production.
But natural gas shortages in Argentina are a chronic problem, as demand has outstripped supply for the seventh straight winter and exposing weaknesses in the country's energy policies. The Kirchners have maintained the price freeze on residential energy prices put into place after the economic collapse of 2001. Thus Argentina has the cheapest diesel and gasoline prices in the southern cone of South America, resulting in high domestic consumption, less investment in domestic reserves, and intense dependence on fossil fuels compared to its neighbors.
Meanwhile, gas prices have skyrocketed by 21 percent since the beginning of the year, with a bustling economy, soaring auto sales, and record harvests. So the Argentine government has mandated that oil companies lower fuel prices to pre-Aug. 1 levels. The government has the power to order price cuts if it believes refiners are limiting output. But Royal Dutch Shell, which has battled with the Argentine government since 2005 over price caps has had enough. They're taking the government to court over the caps.
On the heels of the fuel shortage, truckers held a week-long blockade of Ternium Siderear SID steel plants, demanding higher pay and disrupting steel supplies to the car industry. The powerful truckers union blockaded access to roads and factories. With unofficial inflation estimated to be hovering around 25 percent, it's the latest in a series of union protests demanding higher wages with more expected in the coming months.
Despite what many see as a liberal social movement after last month's legalization of same-sex marriages in Argentina, Human Rights Watch released a report this month outlining how the country has been taking steps backwards in protecting women's health and guaranteeing access to legal abortions. Unsafe abortions are the leading cause of maternal mortality in Argentina and the report's author said that anti-abortion voices, including president Kirchner and her health minister, have failed to provide Argentine women birth control and information on reproductive health despite a law guaranteeing universal access to them. Moreover public officials are not penalized for failing to uphold the laws on the books.
Money: Morgan Stanley raised its 2010 forecast for Argentina to 9.7 percent, making it the fastest expanding economy in Latin America. In 2009, growth was a mere 0.9 percent, the slowest since the recession following the economic collapse of 2001. The fuel in the Argentine economic fire comes from this year's bumper crops, auto manufacturing, and fiscal spending that is adding liquidity to the economy.
Yet with runaway inflation and no strategy to rein it in, some worry the economy could overheat. After overshooting its annual goals for growth, the central bank relaxed key money supply targets suggesting it favors stoking growth over reining in inflation. The central banks said an increased supply of money was need to fuel rapid growth.
Furthermore Argentine warrants, which pay holders when growth exceeds government projections, sank to a three month low. A slowing global economic expansion raises concern that demand for Argentine commodities will slow too.
Meanwhile, Argenina urged a U.S. appeals court to throw out a lower court's freeze on $100 million in central bank deposits that have been seized to cover default claims by two American investment funds during the 2002 Argentine debt default. Last April, Judge Thomas Giesa ruled that Argentina and its central bank should be treated the same in terms of debt responsibility and the seizure of assets.
Elsewhere: Argentines are disappointed that their champion, Juan Martin del Potro, won't be defending his title in the US Open. A wrist injury has kept the 21-year-old from playing since January. Last summer, del Potro ended Roger Federer's sweep of five straight US Open titles.
And finally, wide-eyed doctors removed a 56-pound tumor from an Argentinian woman's body last week. Yuck. The 343-pound woman had said she felt growth in her abdomen for over a year and a half, but thought she was just gaining weight.