http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/ The World Affairs Blog Network Sat, 07 Nov 2009 16:03:45 +0000 http://wordpress.org/?v=2.7.1 hourly 1 http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/comment-page-1/#comment-1011 Latin America » Blog Archive » Energy Policy in the Americas: Latin America and Canada in the Global Fuel Crisis Fri, 18 Jul 2008 21:16:18 +0000 http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/#comment-1011 [...] The reasons for diverse policy on fuel prices in the Americas are a result of the chaos that fell over the region from the oil crisis in the 1970s. Many countries like Mexico and Brazil, who are net energy exporters, took the initiative in the 1970s and 80s to borrow funds at very low rates to fund the expansion of their oil industry and take advantage of high fuel costs at the time. When the price of oil dropped, and their loans were recalled, it left not only Mexico and Brazil in shambles well into the 1990s, but turned the entire region into a case study for economic collapse and record high levels of inflation and inequality. Brazil, with its recent step by step anti inflation policy has boosted investor confidence, aided by recent discoveries of massive oil fields in Brazilian waters and a stable growth rate, spurred on by the growth of good economic policy and political responsibility. This has occurred in the last few years however, after inflation and economic collapse from the 1980s until the new millennium. Unlike Venezuela, Brazil has sought growth through political cooperation, economic diversity and an opening up of trade and social policies, allowing it to remove itself from becoming a nation dependent on one major energy export and avoid future political chaos by trying to be inclusive to all elements in society. A fruitful result in Brazil is the popular use of sugar cane based Ethanol fuels being used in the country in autos and industry, with a policy balance being created so food prices are not strongly affected. Part of much of the food crisis is that oil raises the costs of shipping and new unstudied environmental policies have created a strong reaction to the global rise in corn prices, a possible Ethanol fuel source which has not run any cars yet, but have put many of the world impoverished into starvation. With inflation being the curse of Latin America, and oil often becoming the root cause of much of the regions economic collapse, even in oil producing countries, Latin America needs to find a proper balance between taking advantage of oil and reducing poverty, and subsidies their nations with clever fuel policy and maintaining national reserves. There is no definitive answer to the modern oil crisis, there are just policy options to keep nations afloat. [...] [...] The reasons for diverse policy on fuel prices in the Americas are a result of the chaos that fell over the region from the oil crisis in the 1970s. Many countries like Mexico and Brazil, who are net energy exporters, took the initiative in the 1970s and 80s to borrow funds at very low rates to fund the expansion of their oil industry and take advantage of high fuel costs at the time. When the price of oil dropped, and their loans were recalled, it left not only Mexico and Brazil in shambles well into the 1990s, but turned the entire region into a case study for economic collapse and record high levels of inflation and inequality. Brazil, with its recent step by step anti inflation policy has boosted investor confidence, aided by recent discoveries of massive oil fields in Brazilian waters and a stable growth rate, spurred on by the growth of good economic policy and political responsibility. This has occurred in the last few years however, after inflation and economic collapse from the 1980s until the new millennium. Unlike Venezuela, Brazil has sought growth through political cooperation, economic diversity and an opening up of trade and social policies, allowing it to remove itself from becoming a nation dependent on one major energy export and avoid future political chaos by trying to be inclusive to all elements in society. A fruitful result in Brazil is the popular use of sugar cane based Ethanol fuels being used in the country in autos and industry, with a policy balance being created so food prices are not strongly affected. Part of much of the food crisis is that oil raises the costs of shipping and new unstudied environmental policies have created a strong reaction to the global rise in corn prices, a possible Ethanol fuel source which has not run any cars yet, but have put many of the world impoverished into starvation. With inflation being the curse of Latin America, and oil often becoming the root cause of much of the regions economic collapse, even in oil producing countries, Latin America needs to find a proper balance between taking advantage of oil and reducing poverty, and subsidies their nations with clever fuel policy and maintaining national reserves. There is no definitive answer to the modern oil crisis, there are just policy options to keep nations afloat. [...]

]]> http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/comment-page-1/#comment-987 R.Basas Thu, 03 Jul 2008 20:08:29 +0000 http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/#comment-987 Thank you, I appreciate your comments! Thank you, I appreciate your comments!

]]> http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/comment-page-1/#comment-972 » Latin America: Oil Speculation and Policy Reform Tue, 01 Jul 2008 06:56:38 +0000 http://latinamerica.foreignpolicyblogs.com/2008/07/01/latin-america-and-brazil-oil-speculation-and-policy-reform-in-practice/#comment-972 [...] Finance, Economy-Business News, Stock Market wrote an interesting post today onHere’s a quick excerptLatin America: Oil Speculation and Policy Reform July 1st, 2008 by R.Basas The last year of investment speculation in the developed world could learn something from their neighbours to the south. Inflation and price fluctuations over the last ten to fifteen years in Latin America has habitually been many times worse than in North America and Europe, often suffering from huge inflows and rapid outflows of liquid investment, drastic changes in commodity prices and an overall economic depression [...] [...] Finance, Economy-Business News, Stock Market wrote an interesting post today onHere’s a quick excerptLatin America: Oil Speculation and Policy Reform July 1st, 2008 by R.Basas The last year of investment speculation in the developed world could learn something from their neighbours to the south. Inflation and price fluctuations over the last ten to fifteen years in Latin America has habitually been many times worse than in North America and Europe, often suffering from huge inflows and rapid outflows of liquid investment, drastic changes in commodity prices and an overall economic depression [...]

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