Fighter Planes, Robberies in Rio, and Million Dollar Cars

This is number 5/2007. Our Mexico report, entitled "Calderon's Plan for Mexico", is ready. Research on Russian and Iranian influence in Latin America continues, albeit slowly.

In this edition:

Hugo Chavez continues to force forward his revolution. Apart from the 28 May closure of Venezuela's oldest independent media outlet, he has threatened to nationalize the country's banks and largest steel producer, and has accused both of corruption. The steel producer, Sidor, is controlled by Luxembourg-based Ternium SA. One of Chavez's closest supporters, Luis Tascon, accused PDVSA of corruptive practices on 10 May, citing a US$ 70 million dollar contract that was "given" to a Colombian company that neither bid on the contract nor has the financial or engineering resources to complete the job.

Meanwhile, rumors coming out of the Venezuelan's oil sector state that any attempt to stop or slowdown production activities at either Cerro Negro, recently ceded by ExxonMobil, or Petrosuata and Hamaca, soon to be ceded by ConocoPhillips, will be considered as sabotage by the Venezuelan government. Apparently Chavez's forceful takeover and ownership of oil production in Venezuela could very well lead to reduced oil production there. Few are surprised.

What is also not surprising is that sales of Rolls Royce luxury vehicles in Venezuela have soared. The model that costs US$1 million has sold 200 units and counting in 2007. The company thought it would only sell seven.

In Bolivia, there is talk of purchasing a fleet of 12 to 20 AT-29 SuperTucano jet prop fighter/attack plans from Brazilian company Embraer. This is the same model airplane the US would not allow Embraer to sell Venezuela. If allowed to move forward, the 100 million dollar sale would be financed by Brazilian development bank BNDES. Delivery of the planes could be as soon as the end of this year. Some question this sale as Bolivia has not until recently expressed a desire in these aircraft.

Brazilian oil giant, Petrobras, exported at least 12 million liters of ethanol to the United States in May and is considering purchasing holding tanks closer to the point in entry inside the United States. The wholesale price of Brazilian ethanol has dropped by 13.8 percent in recent weeks, in part pushing Petrobras to increase production.

Finally, intelligence coming from the Brazil-Bolivian border indicates a spike in the transfer of cocaine from Bolivia to Brazil in the coming months. A representative from the US State Department warned Rio de Janeiro state governor Sergio Cabral of this eventuality.

Meeting with the US ambassador to Brazil during dinner, Cabral noted that his team was working hard to secure Rio ahead of the upcoming Pan American games. What the ambassador didn't tell Cabral was that one day before their dinner date dozens of employees, who work at the US Consulate in downtown Rio, watched as two men robbed a third during the lunch rush hour. Before they made good their escape, a fourth attacked the gunmen, killing one with his own firearm. He then assaulted the other and detained him until police arrived some 15 minutes later.