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The Bolivia Recall Referendum: Final Numbers and Analysis

Bolivia by Department

The final results of the Bolivian Recall Referendum of last Sunday are now in (in fact they are officially 99.99% complete with just three 'mesas' from nearly 22,000 left to report, but I'm going with this as a definitive count). This post sums up the main results, looks at the main breakdown of the votes for both President Evo Morales and the eight department heads (known as prefects) and also takes a closer look at votes of the key dissenting state of Santa Cruz for reasons that will become apparent.

Before we continue, a glossary note and a note on bona fides. Please understand that Bolivia is made up of nine "departments". Those "departments" are further split into 100 "provinces". As an example, the department of Santa Cruz is made up of 15 provinces. As for bona fides, all statistics and results reported here are available at the official government website linked here.

So on with the show, and the first two charts shows the headline results. Nationwide, Evo Morales won 67.41% of the votes.

Meanwhile, the votes for the eight prefects under this recall election broke down as follows (note Chuquisaca's prefect has recently been elected and did not need to be recalled):

This next table gives a little more breakdown on how the national votes were cast. We see that 2.1m people voted for Evo, and just over 1m voted against him (OT: I had a problem formatting this table and it leaves a big gap in the post. I don't know why, but no biggie anyway).

Referendum Statistics
No. Of Eligible Voters4,047,706
Total Valid Votes Cast3,120,724
Votes 'In White' (neutral)134,096
Spoiled Ballots115,963
Total Votes Counted3,370,783
Total % Turnout83.3%
Votes Pro Evo2,103,732
Votes Anti Evo1,016,992

So far so good, and Evo won the national vote by a handsome two-to-one margin. However, as most people know by now the dissent to the Evo presidency supposedly comes from the Eastern lowland departments known collectively as the "medialuna", as well as in the department of Chuquisaca (home to the historic capital city of Sucre). So this next chart shows how each department voted for Evo.

In this chart, we can see that six out of nine departments voted Pro-Evo as President. We note;
  • Evo easily won the four western/highland departments of Potosi, La Paz, Oruro and Cochabamba (as expected by everyone).
  • Much less expected were the winning percentages he obtained in supposedly rebellious Chuquisaca and medialuna department Pando. These results give lie to the classic East/West split often mention in the press.
  • Next, Tarija was also very close, but went against Evo by 49.83% to 50.17%. Close, but a loss is a loss and has to be recognized.
  • Finally, the only two departments to clearly vote against Evo as President were Beni (43.72%) and Santa Cruz (40.75%).
However, demographics in Bolivia mean that most of the country population is concentrated in just two or three departments. In fact, 55.5% of all votes cast were from the departments of La Paz and Santa Cruz, with Cochabamba adding another 18.2%. So it's well worth looking at the absolute numbers of votes cast in each department, as seen in the next chart:

This clearly shows the 'Santa Cruz versus La Paz' power struggle, as these two departments are the biggest voters as well as being on the opposite sides of the fence as far as Evo Morales is concerned. Concentrating on the "NO" votes for a moment, after all that's been said about the "powerful medialuna block" it seems strange to note that after Santa Cruz, the second biggest number of "NO" votes cast for Evo came from La Paz, a province that gave Evo 83% approval! This is because the other "medialuna" departments, along with Chuquisaca, are not very densely populated.

It therefore makes sense to recognize the real seat of powerful opposition to Evo Morales as Santa Cruz, because without that large voting block there would not be much to claim. Put another way, even if the other medialuna states of Beni, Pando and Tarija were strongly pro-Evo Santa Cruz would not stop kicking up a fuss (it should be noted that Pando voted pro-Evo and Tarija was a very close result, so this is already half true).

So when it comes to the ongoing disputes about Evo Morales as president, the autonomy claims of the medialunas and all things related, the key to it all is Santa Cruz. We will therefore take a closer look at the Santa Cruz votes. The first thing to note is that the Prefect of the rebel Santa Cruz state, Ruben Costas, scored 66.43% approval. There were 451,191 pro-Costas votes and 228,041 anti-Costas votes in the department. This means we can mention in passing that Evo Morales (67.41%) scored a higher national approval rating than Costas' departmental rating.

Next, let's look at the total Santa Cruz vote broken down into its 15 provinces. Here follow three charts that cut and slice the statistics in different ways. The first one shows the percentage of people in the 15 provinces of Santa Cruz who voted "NO" to Evo, and "YES" to their Prefect Ruben Costas. These people can be thought of as the 'autonomy rebels' who most oppose the national government.

Interestingly, in every single province the Ruben Costas "YES" vote was stronger than the Evo Morales "NO" vote. This suggests that there is a small but significant percentage of Santa Cruz citizens that are happy with Evo Morales and happy with their Prefect.

The second chart is the other side of the same coin, showing the percentage of people in each province who voted "YES to Evo Morales and "NO" to their Prefect, Ruben Costas.

We note this time that if we ignore the province of Andrés Ibañez (the reason why will become clear in a moment), seven of the other fourteen provinces voted pro-Evo.

This final chart of this trio shows the percentages of people per Santa Cruz province who voted "YES" to Evo and also "YES" to Prefect Costas.

The strange result here is that four of the fifteen provinces actually approved both their national and their department leaders.

Going back to the first chart and comment, it's clear that there is an overlap of votes and many people somewhat surprisingly approve of Evo Morales and Ruben Costas, even though they are opposites locked in ideological battle for the future of Bolivia and Santa Cruz. This chart shows the amount of overlap in each province of Santa Cruz, and the median of the 15 provinces on the right:

For example, in the province of Angel Sandoval, a full 16% of people must have voted pro-Evo and pro-Costas.

However, we now turn our attention to the absolute number of voters in Santa Cruz, and the results show something that the autonomy leaders do not want publicized very much, of that I am quite sure. This is the voter numbers breakdown of the 15 Santa Cruz provinces, including "YES" and "NO" votes for Evo Morales:

Of all the provinces, by far the most important is Andrés Ibañez. This is because it holds the regional capital city, Santa Cruz de la Sierra. We note:

  • According to 2007 figures, the province of Andrés Ibañez has a population of 1,650,000, which is approximately 65% of the whole department.
  • Of the 671,195 votes cast in the department in last Sunday's recall referendum, 465,425 came from the province of Andrés Ibañez.
  • Of the 397,670 Evo "NO" votes in the department of Santa Cruz, 301,275 votes came from the province of Andrés Ibañez
  • Incredibly, if we discard the Andrés Ibañez votes and look at the other 14 provinces of Santa Cruz as separate from the city, Evo "YES" votes total 109,375 and Evo "NO" votes total 96,395. In other words, away from the city Evo Morales actually won Santa Cruz by a handy 53.1% to 46.9%!
  • And if you're wondering what Andrés Ibañez looks like compared to the department of Santa Cruz on a map, here it is:
Dep't Santa Cruz, Andrés Ibañez in green

Now let's take the national vote in context to this one single province that lies inside one of nine departments that make up the entirety of Bolivia:
  • Only three of nine provinces voted against Evo Morales as their President, namely Tarija (50.17% No), Beni (56.28% No) and Santa Cruz (59.25% No)
  • The total number of Evo "NO" votes in those three states adds up to 520,314.
  • These "NO" votes, which are in fact the total effective votes against the Evo Morales presidency, represent 15.44% of the total number of votes cast on Sunday 10th August (3,370,783). This is a far cry from the image of a country "divided in two" and more akin to a minor regional dispute.
  • The province of Andrés Ibañez, holding the city of Santa Cruz de la Sierra, had 301,275 Evo "NO" votes as counted.
  • Therefore we can say that the votes of one single province (basically one single city) represented 57.9% of the total effective autonomy rebel vote.
The press is quick to describe Bolivia as "a country divided". This is obviously far from the case. In fact, President Evo Morales enjoys popular support in six of the nine departments that make up his country. Two out of every three Bolivians voted for him to continue as their President. And as for the autonomy rebel movement, once you leave the city of Santa Cruz (not the larger department that actually voted for Morales), those who oppose Morales are few and far between.

Last Sunday's vote was called "exemplary" by the overseeing international neutral observers, and very few if any serious incidents were reported. It was undoubtedly an overwhelming victory for President Morales. However it also showed that the much talked about autonomy movement is not a nationwide curse, but in fact centred very much on one single city. Ruben Costas is now being shown as the Emperor With No Clothes (though perhaps we can leave him his underpants).

Once these figures are looked at closely, it becomes difficult to understand the ostensible claim of Santa Cruz and its push for autonomy. It cannot claim the backing of the wider department, because without the regional capital Evo Morales won the popular vote. By demanding some sort of breakaway from the country of Bolivia, a single city would be trying to usurp a geographical area many times larger than itself. The city of Santa Cruz has, of course, the right to vote the way it prefers. But if it pushed for the autonomy it demands, it would have to leave behind the greater region and become a sort of Bolivian Vatican City!

This is, of course, ridiculous. We should therefore see the call for autonomy for what it is; a single city's complaint against its national government, something that is common worldwide and not any reason to continue ignoring national laws. The time has come to recognize Santa Cruz for what it is, namely a city bent on anti-democratic behaviour and not the centre of some oppressed nation that deserves the world's attention.

Good weekend reading from respected bruddasites*

Trend and Value Report talks PVE, Otto, US treasuries and gold. Nice summary.

Jurgen talks Peru inflation, but looks at the national numbers instead of just Lima+Metro and how the evolving problem might affect the country's poverty level.

Biiwii talks CoT (commitment of traders in gold and silver, just in case). Gary's good at this stuff.

Inside South America talks Lugo's inauguration ceremony. Tyler was on the spot and gives us some smart insight. Ankle chains, huh.............

Memory in Latin America talks press censorship. Lillie often picks up on articles I should have read and presents them very well; this blog is a great resource.

The Mex Files talks the ongoing subtle racism Mexicans suffer at the hands of their northern neighbours....y'know, the ones who build walls along borders.

*and sistasites, Lilly...respect


The Evo Morales that English media don't want you to know about

Evo's hairstylist deserves her own 15 minutes of fame

Ever since Chile whipped Bolivia's tush in the 1884 War of the Pacific, relations have been mighty strained between the two countries. In fact for the past 30 years, formal diplomatic relations have been severed between the two countries as Bolivia continues to claim a coast passage that Chile will simply not grant.

But since coming to power, Evo Morales has made great headway with his counterpart in Chile, President Bachelet. Today in Asunción (while witnessing Fernando Lugo's swearing in ceremony), Evo made a speech in which he hopes to take the reconciliation process with Chile further. Here's my translation of what he said:


"We have created a unique trust between our people, our armed forces, presidents and governors....My request is that now there is some trust, we jointly move to a second stage. This does not simply mean to talk about the sea (passage), about gas or commerce, but also that our peoples wish to see us united, and working together."


A question, dear reader: Does that sound like the rebellious, unhinged, destabilizing force that the English speaking press want us to believe is Evo Morales?

PS: Watch out for my round-up of the recall referendum vote this weekend. We're going to take a serious look at the final figures and try and find a bit of sense in what happened.

Aurelian ( You've got 'em rattled, agoracom boys

Kinross has been visiting the site again (welcome, Mr. Burt). But the funniest thing is that if you check how they got here, the guys at Kinross used Google and plugged in the keywords "agoracom aurelian".

Y'know, I would have thought the staff at a multimillion dollar goldminer like Kinross would have better things to do than play around on google all day. Unless, of course, the two words "aurelian" and "agoracom" are the things that are most important to them these days............

Domain Name ? (Commercial)
IP Address
38.112.96.# (Performance Systems International)
Performance Systems International
Continent : North America
Country : Canada (Facts)
State/Region : Ontario
City : Toronto
Lat/Long : 43.6667, -79.4167 (Map)
Distance : 4,197 miles
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Aug 15 2008 1:10:36 pm
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The Latest Vale (RIO) rumour

Word from the streets of Sao Paolo is that Vale (RIO) is looking at Mexico's Autlan (AUTLANB.MX on the Mexico stock exchange) as a buyout acquisition.

I gotta say it makes more sense for RIO to be looking at integrating a manganese miner into its stable than that ongoing BS rumour about it buying Freeport McMoRan. And the plain, boring facts that RIO recently raised U$12Bn in stock sales and that they want to continue growth either organically or via smaller acquisitions (CEO dixit) haven't suddenly gone away. It makes no sense for RIO to sit on a pile of cash like this.

According to the jungle drums, Autlan are doing the blanket "no comment no comment!" to anyone that asks. That fuels the rumours, too. Here's the Autlan company website (English version) FWIW.

Silver: It's that BOHICA* moment

Trade and Value Report wins the prize for today's best blog headline:

(click the title for enlightenment)

Meanwhile, silver has decided to do this.

Ouch. So be it. It was trading at $12.50/oz overnight, so I spose we should be happy....y' ecstatic, dude. A darned pity that the great news announced by FVI.v yesterday (and its 2q08 as well....well worth a read), and the 5c per share revenues at Minera Andes ( and any other news from any other PM miner of any shape or sort is getting blown away by the droopy droop in silver (and gold under $800 too, of course).

Copper dropped back to 3.36 yesterday (I'm kinda happy about making $3.50 my trigger whipsaw here), and the rest of the base metals are fiddling around yesterday's levels. The real story is silver and gold. Cue conspiracy theories from your fave rave tinfoilhat websites.

*BOHICA = Bend Over Here It Comes Again

Paraguay's Lugo is sworn in today

YAY! You go Lugo! He's got the people behind him alright

So while the world actually pays attention to Paraguay for an hour or so (it's a once-every-five-years-or-so occasion, so let's make the most of it, yeah?), what can IncaKola do to help you fill the knowledge gap on Lugo and the country?
  • Fernando Lugo is the first non-Colorado Party President for 61 years, and the first ever President to receive the job democratically from another political party. Spooky, huh? However, corrupt predecessor Nicanor Duarte Frutos won't be literally handing over the baton, cos he resigned already. Some other flunky does the handing bit.
  • He's become famous for schlepping around wearing open-toed sandals, and has started a bit of a fashion craze in the capital, Asuncion. However, he's also shown himself to be a control freak and has organized the details for tomorrow's bunfest himself.
  • He puts on this "came from nowhere all innocent" act, but he's actually sponsored by one of Paraguay's richest bizpeople (a pharmacy dude) and enjoys special favours from Rev. Moon, too (who seems to be quietly taking over the country). On the other hand, Lugo is the owner of the nicest smile I've seen for ages. He's also a spitting image of Brazil's Lula (check the photos).
  • Next bit of bitchy gossip; as outlined in this post, only two of South America's Presidents have decided to snub today's LugoLurveFest and not attend. By some miracle, those two are "the USA's friends" Prez Uribe of Colombia and Prez Twobreakfasts of Peru.
  • Right now it's midwinter in Asuncion, Paraguay, with expected low temperature of 20ºc and a high of 28ºc (that's 82ºF for monolinguists). Betcha those attending are glad Lugo isn't doing this in January.
  • Lugo wants "an austere ceremony". We presume luncheon will be chipas with a mandioca side all washed down with téréré. This is probably why Twobreakfasts isn't attending.
UPDATE 9pm EST: I recommend Tyler Bridges' blog post on his firsthand views of the inauguration ceremony today. "Notes on an Inauguration" linked here.


An Interview with Susana Villarán

Susana Villarán of Fuerza Social

Peru's political scene is not just "hard left socialism versus classic right capitalism" as often reported in the English speaking media. The case for the centre-ground parties is becoming ever stronger, as Peru's population looks for a way out of idealistic confrontations and towards consensus politics that will help Peru socially without harming its new-found image as investor friendly.

I caught up with Susana Villarán, one of the leaders of "Fuerza Peru" yesterday. Susana is an experienced voice in Peruvian politics having been a government minister herself, and ran for President in the 2006 elections. In this exclusive interview, she talks about herself, her new party, the state of Peruvian politics today and her vision for the future of Perú.


Otto Rock: Thanks for granting this interview, Susana. Although you are a well-known figure in Peruvian politics, overseas knowledge of Peruvian political personalities often seems limited to President Alan Garcia, his left wing opponent Ollanta Humala and the ex-Presidents. Can you tell us a little more about yourself, please?

Susana Villarán: I started in public life a long time ago, although I've always worked in groups and social networks. One of my fields of public political action has been in solving social problems via public sector politics, for example the creation of the "Glass of Milk" program (ottonote: free milk program for children and mothers) and its implementation in Lima. Years later in the Ministry of Women and Human Development (PROMUDEH, now known as 'MIMDES') in the Paniagua government, I developed new programs and national plans such as the co-ordination groups for the fight against poverty. Also, in citizen security, I worked in the reform, restructuring and modernization of the Nation Police Force and I was the first "Defender of the Police" (ottonote, an official Peruvian public office) an institution unique to Peru in the world.

Other facets of my public life include the defence of human rights and the promotion of peace and democracy. On the international front I have been involved for many years in the International Movement of Catholic Intellectuals (PAX ROMANA), where I have learned more about international relations and global issues. Also, my involvement in The Inter-American Commission of Human Rights of the Organization of American States (ICHR-OAS) has given me a deeper understanding of our hemisphere.

Otto: Your new party is "Fuerza Social" (Translation: 'Social Force'). Can you give us a general overview of its political position and viewpoint?

Susana: 'Fuerza Social' is a centre left, or "democratic left" party. It has a modern, decentralized, regionalist viewpoint and has as one of its foundations the desire for a deep reform of the State for its citizenry.

The party is made up of a national body and seven regional groups that are already governing in three regions in Perú, more than twenty provinces and around one hundred districts (ottonote; Perú's regions are made up of smaller provinces which are in turn made up of districts). We aim to reach national government from inside the system and from the bottom up, this coming from the participation of the people, respect for their rights, the advance of the spirit of free enterprise and the generation of both social and productive capacities.

Fuerza Social is a party that believes the role of the State is fundamental in guaranteeing that economic growth is inclusive, and not exclusive as is currently the case. On the one hand, we look to promote labour intensive investment aimed at the regions with low relative development. We believe that decent employment for every Peruvian of working age would solve once and for all the problem of poverty in our country. On the other hand, we also believe in investment in public works that generate social inclusion via a network of social protection based on quality education that is culturally pertinent, health (including basic sanitation infrastructure), justice, security, transport, water and energy. The state must have counter cyclical budgetary instruments for continued and sustained social investment to combat extreme poverty, poverty, inequality etc.

Economically, we believe it is indispensable to move towards a higher state tax income that collects more efficiently from the higher income brackets and reduces the use of regressive and blanket taxation. We believe in the need the maintain the macroeconomic equilibrium and to be prudent in fiscal matters.

Along with the role of the State, free markets or private enterprise has a central role for Fuerza Social in the generation of quality employment. It is therefore fundamental that productivity increases via the incorporation of new technologies that will improve the job prospects of all Peruvians. We believe that businesses have a social responsibility, not only to their employees, client and suppliers but also to their communities, environment and the communities in which they operate.

Finally, we look for an active civil society, with vigilant citizens that participate and demand results to lower the arbitrary margins and the ensuing corruption of those in power .

We are optimistic. We take part in public governance at both regional and local level. We are active in private enterprise, in technocracy as well as the world of women's social organizations, rural producers, artisans, etc. This is where 'Fuerza Social' is coming from; from below and from within.

Otto: Are you the leader of 'Fuerza Social'?

Susana: No, I am only one member of 'Fuerza Social'. Our current president is the economist Jesús Coronel, who is the current President of the Cajamarca region in the North of Peru. There is also:
  • César Villanueva, President of the San Martín region and current President of the Assembly of Regional Governors (elected unanimously),
  • Vladimiro Huároc, President of CONREDES and President of the Junín region,
  • Mirna Villacorta, Mayor of San Juan in Maynas, Loreto
  • Martín Soto, leader in Huancavelica of the 'Ayni' Movement
  • Carlos Paredes, co-ordinator of the Institute of Agrarian Alternatives and leader of the 'Ayllu Autogobierno', an important initiative that is increasing productivity of smallholding farmers in over 30,000 places all over the country. It uses the incorporation of low cost/high impact technologies to overcome poverty.
Some of the leaders of 'Fuerza Social'

Also involved in 'Fuerza Social' are politicians of high technical capacity and experience such as Gustavo Guerra García (ex Vice Minister of Transport), Jaime Quijandría (ex Minister of Finance), Eduardo Zegarra (our government planning co-ordinator), María Isabel Gonzáles (renowned promoter of female enterprises) as well as leaders from the magistrate, the health sector, micro-businesses, indigenous leaders, environmentalists, youth leaders etc. I am simply a little more well-known, for the moment, at least.......

Otto: If there is no one leader, how will you choose your Presidential candidate for 2011?

Susana: While other political parties such as those of Ollanta Humala or Lourdes Flores are in division, 'Fuerza Social' is an emerging party that is incorporating organization and is now beginning the process of nationwide inscriptions, all the time while managing its internal affairs in a democratic way.

We will be running in the 2010 municipal and regional elections and in the 2011 presidential election. We will choose our candidates from among our current leaders democratically. This process, far from weakening us, will bring us more strength.

Otto: Foreign observers of Peruvian politics usually see a simple "left versus right" struggle. Is this the case? How does a more politically central party such as "Fuerza Social" fit in?

Susana: It's true that Peru is socially polarized, because although we are growing economically (which is very positive) the economic, social and regional gaps are increasing, which only adds to the old structures of discrimination and exclusion. The economic growth, the absence of channels to express aspirations and protests due to our still fragile democracy and the absence of deep reforms (as recommended by the Commission for Truth and Reconciliation five years ago), may be a time bomb that favours extremist political views.

But it's one thing to understand social, cultural and political phenomena, and quite another to accept them politically. We must redirect political representation in Peru and we hope to be the democratic pole of change, representing entrepreneurial spirit and the faith we have in our economic, natural and cultural capacities. We have a responsibility to strengthen our ideals of justice, decentralization and change in democracy and governability. This is the alternative that has to be recognized by those who do not want to see Peru yet again at the edge of an abyss like in some of our neighbouring countries.

This is the moment to make a stand. Society is demanding changes. Either we change democratically or we will be torn apart in the middle of violence and chaos. We have not forgotten that Sendero (ottonote: most notorious Peruvian terrorist group of the 1980s and 1990s) was born inside of us, as the anthropologist Carlos Iván Degregori stated. We cannot gamble with our own future.

Otto: Your party is relatively young. Has it managed to pick up much grass roots support yet?

Susana: This is the process we are in at present. It takes time to build a strong party political organization. For example, we have just organized a meeting of high country (Sierra) and coast businesspeople in the centre of Lima, the first ever organized by a political party in Peru. We are sowing the seeds of our party by collecting inscription signatures, and we have the advantage of being made up of regional parties with decentralized seats of power. This is an excellent support base.

But there is still a lot of work to be done, not just via traditional means but also by Fuerza Social TV on the internet (ottonote: link here), blogs, electronic networks and communication media via projects in development. All this requires economic resources, and we hope that healthy companies that support Peru can also support serious and consistent alternatives such as ours.

Otto: Although Peru's macroeconomic numbers have been very strong in recent years, the popularity of President Garcia is now at record lows. This juxtaposition is difficult for many foreign observers to understand. Could you give us your views on why this is so?

Susana: It is an apparent paradox. President Garcia has a 20% approval rating according to the latest CPI survey last week. In the South and in the jungle region, as well as in the majority of the high country regions, his job disapproval ratings are very high. The poverty map and that of the economic growth and employment exactly coincide with the relationship between rejection and acceptance of García. Where growth is not enjoyed but looked upon from afar, frustration and ill-feeling is growing.

García has maintained fundamental macroeconomic balances and this is positive, but he does not understand how to move forward socio-economic policies to include society and close gaps. This is his biggest problem. However, (ex-President) Toledo governed with very low approval ratings and reached the end of his mandate. We trust that García has the same ability to walk along the edge of the cliff without falling.

Otto: If you were elected President tomorrow, what would be the first thing that you would do?

Susana: More important than "what" would be "how". I would completely change the way of governing by consulting, guaranteeing security and listening to everyone's viewpoint. There is no other way of being in charge than listening to people and having good relationships with local and regional governors to reach concrete and efficient solutions. I would be the president of the people, not of powerful groups. That would be the core and it would be the root change.

Our proposal is one of a neo-structural political economy, and our clear governmental program is to introduce deep reform in education, health, justice, security and infrastructure. Also, our commitment to decentralization and regionalism. These are not drastic measures but clear directives from the first day. As an example, place the best teachers in the 12,500 schools in the rural, jungle and sierra zones that have just one teacher as staff. That to begin with!

(Ex President) Paniagua left his transition government with 80% approval ratings. This thanks to his manner, his straightforward style, austerity, approachability and his spirit of concerted approvals. This is what governing with the people means. What Peru needs is a strong and democratic authority that understands the achievement, hopes and pains of our people.

But I will not be the candidate. Does it seem right to you that somebody from Lima is the candidate for a decentralizing party? I will accompany the person we elect as our Presidential candidate.

Otto: Are you optimistic or pessimistic about the next two years of the Garcia administration?

Susana: I hope, for the good of the country, that his announcements made in his message of 28th July (ottonote: the traditional independence day presidential speech) that combines growth with redistribution result in concrete actions and not just a few small social programs. If he doesn't change course soon and if APRA doesn't stop taking absolute control of the State apparatus, things are going to get worse.

Otto: And what about the future of Peru? What are the special qualities of Peruvians that you would like to see come to the fore in the future?

Susana: Our enormous capacity to undertake and create; we can make something out of nothing. Peruvians abroad are praised for their tenacity and work ethic, and here as well. All we need is education, knowledge and technology to increase our productivity.

Our way of turning round the most difficult of moments and turning them into business opportunities, even in companies in the most inhospitable places of our monumental geography. True also for social enterprises such as community canteens or the Glass of Milk (vaso de leche) program that was born out of the deepest of crises.

Our great biodiversity. We must invest to generate the Germoplasm Bank of Peru to patent our rich natural resources and compete at an advantage in the world market.

Our more than 10 million hectares of trees to be planted, aspersion watering and all the technologies that will drag small rural producers out of poverty via our 'Sierra Emprendadora' and 'Selva Productiva' initiatives.

Our wealth and cultural diversity that is expressed in gastronomy, popular art, the amazing richness of our landscape that has such potential across the country and gives opportunities for our youth.

Otto: Thanks for answering these questions, Susana. Any last words?

Susana: Without being idealistic and knowing the enormous problem we face, I see that Peru's human resource is incredible. It is our greatest asset. But Peruvians ask for recognition, opportunities, help to invest, respect, and honest, efficient authorities. Only then will corrosive mistrust change to an atmosphere of faith and shared hope. It is possible to do it. Thank you.

Otto: Thank you, Susana.


For more information about Fuerza Social and how you can help, visit the Fuerza Social website linked here.

Fuerza Social TV link here (which includes a recent presentation by Susana Villarán and a fascinating clip on the promising agro productivity program 'Yachachiq').

Susana runs a Spanish language blog which you can visit right here.

Fortuna Silver (FVI.v) buys out Continuum Resources (CNU.v)

Hey, isn't it strange how many times I mention a company and then straight afterwards something big happens to it?...weird, no?..... just weird.....pure coincidence..must be......

IMPORTANT CORRECTION 10:30pm EST: I have been informed by those who understand Continuum Resources better than myself that due to the sale of properties announced June 20th, (link here to PR), FVI.v is acquiring only the 24% of San José and one small property, and not the 6 properties mentioned below in my original post. I apologize for being a dumbass about Continuum, and I am leaving the post underneath untouched as a monument to my ignorance.

Anyway, to the point. Here's the link to the PR, which says FVI is buying out CNU.v in a friendly, all share deal. FVI is emitting 7m new shares to buy out CNU.v at a rate of 0.0564 shares of CNU per share of FVI. As a ballpark, at tonight's closing price this values each CNU at 7.1 cents (about a 19% premium on the 6c close today).

For this, FVI gets the main prize of the 24% of the San José silver project it didn't own already. As a very juicy bonus, it also gets its hands on six other projects in the same Oaxaca region of Mexico that CNU owns but didn't have the necessary moolah to move forward itself (See the map above, stolen from the CNU.v website).

This is a great deal for FVI. With virtually no cash at bank, Continuum's share price has sunk due to the ongoing junior explorer slump. Fortuna has plenty of working capital in its ammo dump and has grasped the opportunity to buy out CNU at a knockdown price with both hands. Very smart deal indeed.

Disclosure: If you don't know that I own FVI.v and the company is a site sponsor, and if you don't know they came to me with the advert a zillion years after I started reco'ing the stock, you must be new here.

Ecuador sets the date: 28th September

C'mon everybody, join in the chorus
"Do you know the muffin man, the muffin man, the muffin man......"

Yesterday the necessary authorities in Ecuador confirmed the critical Constitutional Referendum vote for Sunday, 28th September. So no more guessing and wondering, it's now etched in stone.

According to the latest opinion poll run by Santiago Perez of "SP Investigaciones y Estudios", the "YES" vote was at 47%, the "NO" vote at 29% and others were either undecided, would vote neutrally (known locally as "voting in white") or would simply spoil the ballot paper. A few days before this private study, international polling company CEDATOS put the "YES" vote at 41%. So the numbers are tending towards YES at the moment, it seems.

For what it's worth*, your observant Otto thinks that President Studmuffin will get the votes he needs to ratify the constitution, and I have the "YES" as a 85 to 90% chance as winners. But it's not up to me, so vamos a ver..............

*not much

Fortuna Silver (FVI.v): Recommendation du jour

All things remaining equal, Fortuna Silver (FVI.v) reports its 2q08 earnings today. IMHO, it's worth picking up a few shares here.

Disclosure: I own and FVI is a site sponsor. However both these things are true for the sole reason that FVI is a good company.

Gold Hawk Resources (CGK.v) catches a break at last

This press release from after the bell last night has made the stock do this:

And what's more, it's a deserved move (note the volume, too). This is very positive news for CGK.v. With more insurance money in the pipeline now, the company is in much better shape. I'd add at this point that after making discreet enquiries, I'm happy enough with the burn rate situation at CGK.v and fully expect them to be in a good financial position once production re-starts next year.

A final thought: Insurance companies don't just pay out on a whim, you know. It's a whole sector famous for avoiding payment wherever possible. So the fact that they've begun to pay out on Gold Hawk's claim clearly shows the tailing dam problem was not Gold Hawk's fault. They had been properly licensed to use said tailings dump by the correct Peruvian authorities and were being responsible and acting wholly inside the law. It also speaks volumes of the company's responsible attitude that they themselves halted production voluntarily and called in the necessary authorities when the problem was first detected.

Environmental groups may not like capitalism too much, but it sure is an efficient way of running the economic world. Insurance company pays = Gold Hawk good corporate citizen. Period.

UPDATE 10:45am EST:
Dare I say we've made a difference here? As soon as this note went up, CGK shot from 0.08 to 0.10 on excellent volume. Real or be the judge!!

Related posts
Gold Hawk Resources: Questions and Answers
Gold Hawk Resources (CGK.v) in the news (and it's not good)
Gold Hawk Resources (CGK.v) could be a smart buy here
Gold Hawk (CGK.v) Positive developments at Coricancha

Copper leads the way

Spot copper is now $3.44 and has moved 5.5% in two days. Apart from Tin (moving fast) the rest of the base metals complex hasn't moved yet.

There are always plenty of "key levels" and "breakouts zones" in the commods pits, but I'd point to Copper $3.50/lb as the big daddy of them all for the short term (see previous posts). Also, taking a look the five year view, we can see this recent reversion to $3.26/lb looks very healthy and completely inside the longer term channel.

As mentioned yesterday, a bit of confirmation is needed here, I think. Today could be that Confirmation, but in the same way that I took my bets off the table when copper broke $3.50 to the downside (and that worked very nicely), breaking through the same level on the way up will be the green light I need.


Two new blogs on the links list

I've made contact with a couple of very good blogs today, and from now on you'll find the links over there with the others....yeah.....down there.....on the right....yep, that's the list. Hand vetted by your diligent Otto, these are two resources worth putting in your cyberlife.

Firstly, The Mex Files. It's a relief to have found such an informed and smart blog on Mexico in English, as I've occasionally been accused by friends'n'that of having far too little Mexico exposure here compared to my usual diet of South America. It's a very fair criticism, gotta say. So now you have MexFiles in your face, you can go read an authority on the country and not settle for my deranged drivel.

Then the other new blog in da house is Trend and Value Report. The dude behind it goes by the name of Lucas Elam, he hangs in Ecuador and knows his stock markets, I'm telling you right now. He knows his charts, he's smart on the fundies and he has a good angle on the psychology of the market, too. It's also worth mentioning his excellent taste, as he has a link for incakola there, too (you rule, Lucas). Go check the site out. That's an order. In fact, why are you still here?

Trading Post (relief rally edition)

How do you like your relief rallies, dude? Personally I like 'em with lots of people wiping their foreheads and saying "phew!", and that's what we got today.

Capstone mining up 10%. Small but beautifully formed profit machine getting a real kick out of the copper rebound.

Minera Andes ( up 12%. The market gives yesterday's press release the love it deserves.

Southern Copper(PCU) up 5.5%. This after the CEO calls production at 550,000MT Cu for 2008 (revised downwards mainly due to the ongoing Cananea strike.).

Aurelian ( up 7.5%. Arbitrage with Kinross continues.

Jaguar (JAG) up 6%. It went far too low, and the CEO made a strong bullish show at yesterday's conference call. Good for him.

Those just four of my favourites. Both you and I could add a couple of dozen names to that list I'm quite sure, but the point is made. FWIW, I'm staring intently at the Gold:Oil ratio chart, because the dynamic I want to see is oil dropping relative to gold (be that gold goes up quicker or stays level while oil drops, I really don't mind). I'm not jumping back in to recently liquidated positions yet. The long term portfolio is feeling the pleasure this morning, but short term is still largely cash. I want a bit more confirmation before starting to trade.

Slope of Hope!

With the necessary and deserved hat tip to Tim Knight at blogsite "Slope of Hope", here's a great chart. Moment of self-recognition enlightenment, anyone?

Click to enlarge (well worth it)

An example of dangerously bad analysis

"Opinions are like a**holes; everybody has one."
(trad. maxim)

Click here for an example of uninformed, opinionated junk trying to pass itself off as serious investment advice

This person should be banned from the internet for what he's trying to do here. More interested in getting attention, he cherrypicks his facts in the worst way possible and ignores any fact that interferes with his personal view of the company in question and the country where it operates. I'm quite sure s/he has never visited the place, in fact. I'd also bet money s/he can't speak Spanish.

All the same, this person thinks they are qualified to opine on the whole deal. I would have just ignored this normally, but a regular reader sent me the article with the tag line "your thoughts?". It's already tough for the smaller retail investor to get an edge in this game without having to wade through this type of BS and have to consider its merits.

The bottom line is simple: AVOID. AVOID the stock in question and avoid this financial writer* permanently.

*and that's being generous

The world begins to wake up to Spanish racism

This picture is only "shocking" for people who don't know Spain, Spaniards or the Spanish language. I know all three, and it comes as no surprise at all.

The thing is, I'm quite sure the Spanish basketball team who posed all slitty-eyed for the cameras didn't even realize themselves how insulting their behaviour is, this because the whole country is as ignorant about their disgusting attitudes as they are. Latin Americans are well used to this kind of racism from the Spanish, unfortunately. It started in 1523 and hasn't changed much since.

Of course we'll now hear the normal "it was meant as a bit of fun" excuse that Spanish racists trot out every single time they offend in the same way. I was very glad to hear how the Chinese crowd booed their every move tonight (after being so generous to the US hoops team, too). Maybe the country of Spain will get a bit of a wake-up call from this and finally, finally see themselves as we've seen them forever.

Minera again

Accuse me of banging on the table if you like, but Minera Andes press releases haven't been just fluff and rubbish recently. Tonight's PR points out production cash costs of $322/oz for gold and $6.16/oz for silver at its 49% owned San José silver/gold mine in Argentina.

It also gives average prices ($901 for Au and $16.47 for Ag) and production totals (12,410oz Au and 1,093,291oz Ag) for the quarter. I strongly advise you to check the small print of the PR for more details (here's the link again just in case), but I've been kicking round these numbers in an XLS tonight and after taking into account variables, the projected production increases, and all things on the conservative side I have at a forward P/EBIT ratio of 4.2X, which compares very favourably to peers.

DYODD dude, but put Minera on your shortlist of miners to bounce back first and hardest when this dreadful metals market finds its bottom.


Evo: 67% approval (and counting)

There's something very fishy about the Medialuna exit polls Sunday

Hey, remember way back to Sunday, when the Bolivian polls closed and all the Bolivian TeeVee and news channels (owned by the Santa Cruz Hoi Polloi) called Evo at "between 56% and 60%"?

Then a bit later on, this got upgraded to "60% to 62%"

Then at some point yesterday, I actually thought my best guess of 64% would take the prize.

All that is now history. Even i have been left for dust by the result Evo is scoring, as right now, with 85% of votes officially counted Evo has 67.22% of the votes going his way. The reason for this slow upward creep is the same as in the original Presidential elections, as the votes in the cities get counted first and then the rural areas (where Evo gets overwhelming support) drip drip drip in a little more slowly. The slow uptick also means that regions that were supposed to have gone against him are now showing outright support for Evo, including "medialuna" region Pando and Sucre's Chuquisaca. Of the three states he has lost (Beni, Santa Cruz, Tarija), he missed out on Tarija by a wafer thin 49.83% to 50.17% (100% of votes now counted).

So 6 out of 9 states are pro-Evo, not the 4 out of 9 originally reported by all media (and it was darned close to 7 from 9, too). It's beginning to look less and less like a country "divided in two" and more and more like a country with a couple of isolated protest spots. In fact, the more I look at the true numbers coming back (and I remind you, this election is spotlessly clean according to all international neutral observers), the more it looks like the 'medialuna' crews via their friendly media were painting a false impression of things last Sunday. Look back at that chart at the top and you'll see that:
  • Santa Cruz was called 30% Evo, in fact it's now 38%
  • Beni was called 32% Evo, in fact it's now 41.32%
  • Tarija was called 38% Evo, in fact it's now 49.83%
  • Pando was called 49% Evo (a loss), in fact it's now 52.73% (a win)
  • Chuquisaca (Sucre) was called 39% Evo (a loss), in fact it's now 53.88% (a win)
Be clear: Evo is the big, big winner of this recall referendum. The biggest irony is that if it weren't for the opposition PODEMOS senators calling for Evo's recall, it would never have happened and the world would still think the autonomists had the upper hand!

It's EVOlution, baby

When Peru elects its own Chávez in 2011, blame Alan Garcia

Picture the scene; it's 2011, and Peru has just elected its own version of Hugo Chávez to be president in a totally transparent and democratic vote.

Still want to be long those "low political risk" bonds?

Still going to buy junior miners with Peru exposure?

Still want to hold PCU for the great dividends?

Suddenly, according to every English-speaking analyst and commentator, the USA's new best friend would be accused of turning its back on all the progress and benefits capitalism could offer. You'd blame the new President for screwing everything, you'd blame his opponent in the run-off for being a weak candidate. You'd blame the Peruvian media for not putting the boot in. You'd blame the population for being so damned stupid.

But the real guilty party would be this guy:

Have a look at this explosive report filed by Reuters Peru today. It's only on the wire service so far, so I've pasted it out (excuse any problems in formatting). If and when it hits the wider internet later, I'll add a link. It's a great piece of journalism, though. Good to see a bit of reality reflected in English speaking media for a change. Kudos to Terry Wade of Reuters.

UPDATE: Here's the link

All that's left to say is that the raging uber-capitalists up there better start praying that Garcia gets a dose of social equity and fast, because otherwise you'll lose Peru to the left for a long, long time. And don't say I haven't warned you about this before, either.

Alan Garcia's Pisco
(from Reuters, August 4th 2008 photo)

The bit of Pisco reconstructed by Venezuela
(from Reuters, August 4th 2008 photo)


UPDATE 1-Venezuela's Chavez wins friends in Peru quake zone
(Adds Garcia in Pisco, paragraphs 21-23)

By Terry Wade

PISCO, Peru, Aug 12 (Reuters) - When an 8.0 magnitude earthquake hit two coastal cities and destroyed 37,000 homes in Peru, President Alan Garcia promised a speedy reconstruction effort that would burnish the country's new image of dynamism.

One year later, the cities of Chincha and Pisco still look devastated, Garcia's popularity has plummeted, and the only president who has won hearts and minds here is Venezuela's socialist leader, Hugo Chavez.

Chavez, who has used his country's oil wealth to spread his influence throughout Latin America, has given away 100 new three-bedroom houses with green lawns in Chincha, and named the community after his hero, Simon Bolivar, the 19th century independence leader.

"Thanks to God and to Hugo Chavez, I have a house," said Emma Euribe, 50. She and her four children moved into their plastic-walled home two months ago, marveling that it sits in front of a new park and came fully furnished. "Look what Hugo Chavez, who isn't our president, has done for us. The corruption here needs to stop because we're human beings in need," she said.

The quake on Aug. 15, 2007, killed more than 500 people. Chavez is spending money in Peru largely to support his ally and Garcia's rival, Ollanta Humala, an ultra-nationalist who hopes to
become Peru's next president in 2011.

Garcia, a former left-winger who has become a fervent believer in free markets and a favorite of foreign investors, narrowly beat Humala in the 2006 presidential vote but he cannot run for reelection.

His approval ratings have fallen steadily to around 26 percent for failing to bring the benefits of Peru's economic boom and newfound wealth to the poor.

Following the quake, Garcia promised to respond quickly and effectively. Instead, victims feel abandoned by their own government and complain of diverted funds, missing assistance checks and stolen clothing donations.

In Pisco, at least 56 families are still living in tents, and the most visible signs of government action are one-room shacks made of particle board for homeless families.

Just off Pisco's main plaza, where 150 people died in a church that collapsed, the body of Raquel Parodi Hulerig lies in a pauper's grave on an empty lot, topped with a makeshift cross. Blocks away at the cemetery, skeletons that burst out of caskets held in marble drawers are still exposed.

"The reconstruction has been frustrating. The government missed an opportunity to show it could do things well," said Alfredo Torres of the Ipsos Apoyo polling firm.

Chavez has moved to take advantage of Garcia's shortcomings and win new friends. In recent years, he has helped his closes allies -- Ecuador and Bolivia -- with energy investments, sent cheap oil to the Caribbean and fertilizer to Nicaragua, and bought billions of dollars of Argentine bonds. Garcia and Chavez have clashed in the past but the Peruvian leader was in no position to reject any international aid.

Pisco residents accuse the city government of resorting to walls to cover up empty lots. gimmicks to make it look like progress has been made ahead of the quake's anniversary on Friday. Workers have been rushing to build "They are putting make-up on Pisco to say they've done something," said Cesar Cordero, whose bakery collapsed. Straw mats on poles now serve as makeshift walls for his kitchen. Residents say crime is rampant and the police station in Pisco has yet to be rebuilt. Officers must rent out rooms in private homes instead of sleeping in the barracks.

The government says it spent 1.23 billion soles, or about $400 million, responding to the earthquake, both on emergency rescue efforts and to rebuild roads, power and sewer systems. "We've done all that is possible. The numbers are there to for anyone to investigate," Garcia told reporters last week.

Garcia made a surprise visit on Tuesday, to Pisco, where residents had threatened to throw eggs at him if he showed up for the anniversary commemoration on Friday. "The anniversary is just a date. The rebuilding work continues," he said.

Still, in Pisco, many are unhappy with Garcia. Her house destroyed, Berta de la Cruz Espinoza, 58, now lives with five family members in one small room, and insists that the government should have done more. She also hopes the next election will be won by Humala, who is popular among the poor and who foreign investors fear would roll back years of free-market reforms.

"Frankly, we don't have a lot of faith anymore but hopefully Humala could do more for us," she said.

Colombia: Uribe plays the populist card

Alvaro Uribe shows his warm and gentle side.

"Populist" is one of those words that is used as a put-down in politics, when in fact it's quite an innocent little term in itself. It's a lot like the way the USA uses the word "liberal" as a code for "communist", when in the UK (for example) 'liberal' is the most neutral of terms.

In LatAm, when you read the phrase "populist president", the same thing happens. It's that sneaky commie codeword feeling, and it almost always refers to Hugo, Evo, Studmuffin in the same disparaging manner. Sometimes you'll get the epithet thrown at Klishtina, and as from the 15th August expect Paraguay's Fernando Lugo to wear it (though with Lugo you get the feeling it'll be with pride and a winning grin). Is the whole point here that it's wrong to be popular? I really don't understand politics, sometimes..............

So what's with Alvaro "dubious past" Uribe and populism? Y'see, Colombia's got this stupid little thing called they call 'A Constitution' that disallows any President from running for office a third time. It used to be true that Presidents couldn't run twice, but Uribe fixed that by bribing this person. But anyway, this 'Constitution' thing is a bit of a pain for Uribe, cos he really wants to turn Colombia into his own little kingdom, being so popular and all that. So what he's done is to organize his troops and raise a petition with five million signatures to ask the people that do laws and stuff to change things so he can run again.

Nobody denies Uribe is popular, and with consistent 80% approval ratings it was fairly easy to seize this "post operacion jaque" moment and get a list of signatures from his 45 million loyal subjects.....SORRY!!...that should read "fellow citizens". But this is TRUE populist politics of a very dangerous variety, and the international community should do more than just raise a quizzical eyebrow at the usurping of power that is going on in Colombia version 2008. However, it's unlikely that any fuss will get kicked up in the international arena, not with the friends wot he got, y'know dude........

Simon Romero sucks. Official.

"I have a degree in history from
Harvard and refuse to use it."

After I'd pulled Simon Romero's grasp of Venezuelan finances to bits earlier this month I had (and let's put this as lightly as possible) more than one extended e-mail conversation about the whole issue. And (staying all diplomatic and stuff) more than one dude started at me with the gambit "Look, I'm not trying to defend the guy, but..........."

So you guys think I'm being rough on The New York Times man in LatAm? Think again. Read this post over at Abiding in Bolivia tonight and see just how much of a battering somebody can really give Latin America's worst journalist* when they put their mind to it. As well as being a totally deserved dressing down, El Duderino doesn't skimp on the prose either, including such gems as.....

"One can only conclude that if Simon is not let go in the near future, you editors at the NYT are, like Simon, total douchebags with zero respect for truthful reporting." drive the point home. Plenty more where that came from, too. Next to El Duderino, I'm a pussycat.

*and that's saying something, dude, cos there's plenty of competition.