Ciclos de Kondratieff y Economia Peruana

 

Para ayudarlos nueva figura. El arear sombreada les indica el incio de la fase depresiva del ciclo de Kondratieffa

http://bseminario.blogspot.com/2011/06/la-economia-peruana-y-los-ciclos-

de.html

http://bseminario.blogspot.com/2011/06/la-economia-peruana-y-los-ciclos-de.html

La coherencia con similar periodo de depresion en el Pe´ru es bastante elevada. 

 

 

AFPs chilenas dueñas de 24% de La Polar

Escándalo financiero en La Polar golpea a la Bolsa y AFP ven pasos legales

Retailer sorprendió ayer al anunciar que arriesga hasta US$ 430 millones por prácticas no autorizadas por el directorio en sus créditos a clientes.

por K. Ferrando y H. Cárcamo

La Polar rememoró ayer la crisis que en 1999, con otros dueños, la llevó a una quiebra de la que salió lenta y trabajosamente. El retailer perdió en un día casi la mitad de su valor bursátil, un 42%, y arrastró al Ipsa a una caída diaria de 1,18%, tras divulgar al mercado que sus provisiones -créditos con riesgo de incobrabilidad- podrían ser superiores en casi 10 veces a las realizadas en 2010. El año pasado sumaron $ 22 mil millones. Una estimación inicial del nuevo riesgo financiero fue situado por la firma entre $ 150 mil millones (US$ 321 millones) y $ 200 mil millones (US$ 428 millones).
El directorio de La Polar se reunió lunes y miércoles para analizar el tema. Ayer dieron a conocer que en esas sesiones se informó de "prácticas" en la gestión de su cartera de crédito -vinculadas a la renegociación de deudas de tenedores de tarjetas- no autorizadas por el directorio.
La empresa no detalló cuáles fueron esas prácticas, pero en la industria creen que aluden a repactaciones unilaterales de créditos morosos, lo que originó una demanda colectiva presentada la semana pasada por el Sernac. "Eso permite contabilizar deudores morosos como vigentes", dice un agente del mercado.
La Polar afirmó que los hechos divulgados ayer no afectan "su modelo de negocio". Además, adoptó una serie de medidas que fueron comunicadas a diferentes agentes del mercado. Entre ellas está el nombramiento de Eduardo Bizama como nuevo gerente general, en reemplazo de Martín González, quien vuelve a la gerencia comercial, y el despido del gerente de productos financieros, Julián Moreno. En su lugar asumirá Hernán Arancibia como gerente de crédito, hoy gerente de la división riesgo crédito del Banco de Chile. La firma designó a Ernst & Young como auditor externo en reemplazo de PwC.
La alerta del caso llegó a la Superintendencia de Valores y Seguros (SVS) el viernes 3 de junio, cuando accionistas representados por el estudio Gutiérrez y Silva ingresaron una consulta sobre los balances de La Polar. La SVS dio cinco días de plazo a La Polar para informar y el miércoles les ordenó hacerlo ayer.
Los accionistas

En las AFP la molestia era generalizada. Las gestoras poseen el 24% de una firma que no tiene controlador, lo que para algunos podría explicar el problema (ver página 34). La inversión, sin embargo, representa sólo el 0,2% de los activos del sistema. Habitat, Cuprum, Provida y Capital estudiarán acciones legales. Habitat acusó que lo ocurrido impacta la fe pública depositada en la empresa, dado que los estados financieros deberían ser confiables. Provida declaró su indignación y Cuprum dijo que seguirá acciones administrativas y judiciales para resguardar el interés de los afiliados. "Estas acciones pueden comprender a directores, administradores, auditores externos, clasificadores de riesgo", advirtió la AFP del grupo Penta.

Las AFP buscarán desde hoy coordinarse entre ellas y con otros socios de la firma para, entre otras cosas, solicitar una junta extraordinaria de accionistas y pedir las actas de directorio de La Polar, ente que preside Pablo Alcalde desde 2009.
Existe, además, un comité de directores, formado por tres miembros de la mesa, que debe velar para que los balances reflejen la realidad financiera de las empresas. Y que supervisa el trabajo de  la auditora externa -Price Waterhouse revisó los balances de La Polar en 2010- sobre la que están puestas todas las miradas por el recuerdo del caso Enron.

Por Que se Viene Colapso de Burbuja en Mercados Emergentes

Factores de la burbuja en los mercados emergentes han sido la expansion economica mundial y exceso de oferta de capitales y liquidez, altos precios de los commodities y dolar debil.
Colapso vendra por menores flujos de capitales de inversion del primer mundo, crack en precios de los commodities y dolar fuerte.
http://seekingalpha.com/article/274131-why-an-emerging-market-bubble-may-be-on-the-horizon


Why an Emerging Market Bubble May Be on the Horizon
by: Steven M. Rogé June 9, 2011   
In recent years, emerging markets have attracted significant attention and capital, neither of which was undeserved. First, they gained attention because they provided unique investment opportunities in developing countries with tremendous growth potential, unlike "stodgy" options such as the United States and the United Kingdom. Second, with the advent and popularization of ETFs, investing in emerging markets was easier than it ever had been before, and large amounts of capital shifted to take advantage of these opportunities. However, we believe a reality check may be in order, and in the next few minutes we will walk you through our current thesis on emerging markets; but first, a capital markets refresher.
While we cannot predict returns or what will unfold in the near-term, we hold fast to two core beliefs that dictate our investment thesis:

1. Capital markets theory dictates that whenever there is arbitrage (or, in general, above-average investment opportunities) funds will flow toward this opportunity in order to make a profit, and
2. Since capital markets cannot predict values perfectly, history has shown many times that too much money will flow toward the opportunity until it is overvalued, creating an unsustainable bubble.

We have seen this pattern repeated time and time again. Within the past dozen years we have separately seen both technology companies and real estate become the "hot" sectors, only to become overvalued and subsequently crash. While each sector proved to be a good investment opportunity at the outset and attracted large amounts of capital (Belief 1), too much money flowed to these opportunities, creating a bubble (Belief 2). Based on the underlying tenets of capital market theory and what we have witnessed throughout history, we believe that there is another bubble lurking about on the verge of popping.
We see a bubble in emerging market equities. While we believe that the growth in emerging market investing was justified due to economic expansion opportunities and capital flow, higher commodity prices, and a weaker dollar, these once-promising markets may soon face headwinds from all three factors.
In explaining our case, we will provide evidence from our three key factors, which encouraged the historical growth and investment opportunities of emerging markets, but which now may lead to a collapse. It is also important to recognize that these three factors will not bring down the entire country, or even the bond markets; we are strictly focused on the collapse of emerging market equities.
The Case for Growth
Opportunities for economic expansion by emerging market countries is a great investment thesis—the United States, though not an emerging market, created unsurpassed wealth for its citizens during an incredibly long period of economic expansion from the 1940s through 2000, despite bumps along the road. After seeing the wealth that the US created, many investors would jump at the chance to get in on the ground floor of an emerging market in hopes that similar economic expansion and wealth creation could be realized.
Relative to our two other factors, economic expansion of emerging market countries has unfolded over a much longer time horizon, most notably over the past few decades. Both technology advances and the spread of capitalism have encouraged this growth through the sharing of ideas and technologies and increasing import/export markets. Technology in particular has made it cheaper and easier to start businesses across the globe, and small businesses often provide the backbone for many countries' economies. Needless to say, as businesses and investment opportunities pop up and investors can communicate quickly across the globe, capital begins to migrate toward these investments.
In addition to general economic expansion, many emerging market countries have enjoyed strong growth because of their commodity-rich geography. Using the Dow Jones Emerging Market classifications, emerging markets include the oil-dependent countries such as United Arab Emirates, Qatar and Oman and mining countries such as Brazil, Peru and Argentina. Many of these emerging market countries are very dependent upon their global natural resource exports for continued economic growth, and thus are very sensitive to any price changes in the commodity. The oil countries have built up staggering wealth as both developed and emerging markets are voracious oil consumers and prices continue to be high.
While the dollar has bounced back and forth over the past few years relative to other global currencies, the underlying trend has been a weakening dollar with no fiscal or monetary policies to support a strengthening of the dollar. This is especially apparent with the Fed's QE2 program, which essentially is just creating dollars out of thin air, further depressing the value of each dollar. The flipside to a declining dollar is that other currencies strengthen against the dollar, thus, returns on international investments can be even higher when converted back into dollars because the foreign currency is now stronger. Also, many global commodities (oil for example) are priced in the global marketplace in US currency, so as the dollar declines, oil prices increase, further helping those oil-rich emerging markets.
Needless to say, the opportunities for economic expansion of commodity-rich countries, compounded by a weakening dollar, has propelled many emerging markets to valuation levels that may no longer make sense as these three factors turn around.

The Case for Collapse
While emerging markets will still grow in the long-term, the world is still feeling the aftershocks of the recent financial crisis, decreasing growth and investment opportunities. In addition, natural disasters such as earthquakes, tsunamis and typhoons have left part of the world just trying to recover, let alone grow. The United States specifically, as one of the largest exporters of capital, still requires rock-bottom interest rates and dollar-printing machines to keep capital flowing
 
As investors chase these foreign opportunities, it is possible that some emerging markets have become overvalued relative to mature markets. For example, consider the current value of the iShares MSCI EAFE Index ETF (EFA) relative to its emerging market counterpart, the iShares MSCI Emerging Market Index (EEM). EFA holds securities from countries such as the UK, Japan, Germany and France; only ten countries make up nearly 90% of the index, with a combined GDP of nearly $20 trillion. Similarly, the EEM fund invests approximately 90% of its assets in ten countries such as China, Brazil, Taiwan and Russia, with a combined GDP of only $12.5 trillion. However, both funds each have roughly $40 billion under management, implying that investors are overweighting emerging markets significantly relative to mature markets.
Anther piece of evidence pointing to an overflow of capital to the emerging markets is the fact that the Vanguard Emerging Markets Stock Index ETF (VWO) was the most popular index fund in the United States in 2010, attracting more than $19 billion in capital, making the SPDR Gold Trust ETF (GLD) a distant second as it pulled in less than $6 billion . In an even more disparate comparison than the iShares example above, VWO manages over $65 billion to invest in emerging markets, while Vanguard's EAFE ETF (VEA) manages less than $9 billion.
While previously we discussed how natural resources helped the emerging markets prosper, a downturn in commodity prices can equally harm these markets. This wouldn't be so alarming if commodity prices were not so high right now, but unfortunately they now have a long way to fall if the tide turns. One of the biggest commodities most investors watch is oil, which is currently hovering around $100. Nearly all investors remember the time when oil spiked a few years ago to over $140, only to come crashing down to the $30s. Similarly, oil reached an inflation-adjusted average of above $100 in 1980 , and fell below $30 (inflation-adjusted) within 6 years.
The sharp rise in oil prices, especially relative to the anemic global economic growth, should be cause for concern. Since bottoming out in 2009, oil is up more than 150%, which is obviously unsustainable. Many other commodities important to emerging markets have increased extraordinarily as well, and when we hear reports than speculators artificially add $10 or more to a barrel of oil, we can assume the same is happening with other commodities. Simply removing the speculators and letting supply/demand take its course may bring commodities down to more reasonable levels, thus dampening returns for many emerging markets.
Finally, commodities should decrease against the strengthening of the US Dollar. As we discussed before, commodities priced in USD benefit as the dollar falls; however, they can just as easily be harmed by a strong dollar. Compounding this effect, a strong US Dollar would decrease returns made on foreign investments, thus making foreign markets (both developed and emerging) less attractive than domestic investments. While we have yet to see any direct information on how the government plans to support the dollar, we may see an effect from the completion of the QE2 program. By slowing the flow of dollars, we hope to see a stronger dollar emerge.
While a strong dollar would hurt all foreign investments, the double-whammy of weaker commodity prices and a stronger dollar would most likely hurt the emerging markets worse due to their relative lack of currency strength. If these events begin to unfold, investors who have piled right into emerging market funds in staggering numbers may just as quickly head for the exits. Emerging market funds have certainly enjoyed an admirable run, but it may be time to think about rebalancing your portfolio to underweight these markets— that way, when things do go wrong, you will be among the few who avoid hearing the sound of a bubble popping in your portfolio. 

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Bernanke: jugar con límite de deuda EEUU podría terminar mal

Jefe Fed: jugar con límite de deuda EEUU podría terminar mal

martes 14 de junio de 2011 14:51 GYT

WASHINGTON (Reuters) - El presidente de la Reserva Federal, Ben Bernanke, advirtió el martes que si no se sube el techo de la deuda de Estados Unidos de 14,3 billones de dólares se corre el riesgo de una pérdida de confianza en la solvencia crediticia del país que podría ser desastrosa.

Bernanke dijo que ante la ausencia de una rápida resolución en la batalla sobre el límite de deuda, Estados Unidos podría perder su preciada calificación crediticia "AAA", mientras que el especial estatus del dólar como moneda de reserva podría dañarse.

"Incluso una corta suspensión de pagos de capital o intereses en las obligaciones de deuda del Tesoro podría causar severos trastornos en los mercados financieros y en el sistema de pagos", dijo Bernanke en comentarios preparados para un evento auspiciado por el Comité para un Presupuesto Federal Responsable.

La falta de acción podría también "crear dudas fundamentales sobre la solvencia crediticia de Estados Unidos, y perjudicar el rol especial del dólar y de los bonos del Tesoro en los mercados globales en el largo plazo", agregó Bernanke.

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What are the social implications of economic collapse?

by Simon Black · View Comments

June 14, 2011
New York City
For the last few days, we've been having an important discussion about the magnitude of the economic challenges in the west; if you didn't read yesterday's letter, I really encourage you to do so before proceeding because it's important to understand why the west has truly passed the point of no return.
Simply put, the United States and much of Europe are borrowing an extraordinary amount of money now just to pay interest on the money they've already borrowed. They cannot even self-fund their mandatory entitlement programs without going into the hole, and their options are limited:
Option 1: Continue borrowing, keep the party going.
As long as the government CAN do this, they WILL do this.  Regardless of their intentions, though, more debt only worsens the situation, creating higher borrowing costs in the long run, and even more debt. As this happens, the pool of buyers begins to dry up, especially from overseas.
Option 2: Inflation
The more buyers stop purchasing Treasury securities, the more the Federal Reserve will mop up the excess liquidity. In doing so, the Fed essentially conjures up money and loans it to the government.
No matter what the government monkey statistics say, this is inflationary, plain and simple. The more money they print, the greater the level of inflation in the long-term. Meanwhile, as foreigners simultaneously reduce their US dollar holdings, this inflation will become more acutely felt in the US.
Option 3: Austerity
There's going to come a time when the US government is forced to face its economic reality and make some incredibly deep cuts that would be felt across society, from Wall Street and the military industrial complex to project housing on the other side of the tracks.
Option 4: Default
Eventually, the debt burden is simply going to be too much, and the most obvious solution will be to default. Politicians will make China out to be the enemy and they will probably invent a war just to have an excuse to default on Chinese owned debt. Americans will wave the flag and celebrate defaulting on their enemies.
Option 5: Economic Cannibalism
In the best traditions of Atlas Shrugged, the government will continue its persecution of the productive class– professionals, investors, entrepreneurs, and skilled workers. Existing taxes will rise, new taxes will be created, trade barriers will be enacted, and a maze of cost prohibitive regulations will be passed.
The first option (keeping the party going) is what has been happening for years. Politicians make small concessions to show they're "serious" about fiscal discipline, cutting laughably small programs while dumping hundreds of billions of dollars into wars and entitlement programs.
The worse the debt situation becomes, though, the higher the borrowing costs become, and the worse the debt situation becomes. It's not an enviable position. Existing lenders will continue backing away from the US Treasury market, giving option 1 a half-life measured in months at best.
In the longer term, only options 2-5 remain: inflation, austerity, default, and cannibalism. Each of these remaining options will shake the financial system to its core. More importantly, each of these has the power to create widespread social upheaval.
When inflation eats away at a family's already meager standard of living, when austerity eliminates the benefits to which recipients have grown accustomed, when default vanquishes a retiree's savings, when high taxes make workers feel like they're just government serfs– this is when the real turmoil will begin:
* Rising crime: devoid of a job or means to support their families, people will turn to crime out of desperation
* Class warfare: with dividing lines drawn between have's vs. have-not's, it will become unpopular and even dangerous to be successful
* Corruption: low-level public service officials will look to supplement their income through bribery and kickbacks
* Black economy: An underground, cash-only (probably gold or foreign currency) economy will emerge with people getting paid in envelopes
* Censorship: Of course they'll blame it on national security, but the idea will be to prevent public disparaging of government policy
* War: The government will need another major event to distract people from the real problems
* Protests/Riots: This is when things turn bloody
* Police state conditions: The government will close ranks and send the cops out to show all the little people who's really in charge
There are a number of other manifestations, and many are already showing signs of emergence. The US and European police states are alive and well. Crime is on the rise.
In Europe, cops are doing battle in the streets with their citizens. Think it can't happen in the US? Remember tanks in the streets during the LA riots? Remember New Orleans? Remember any number of G8/G20 protests?
Here's the bottom line: all you have to do is glance at the headlines to see what happens when you strip people of their livelihood, of their ability to put food on the table for their families.

The US has been able to kick the can down the road with the most blunt social implications simply because the country benefits so much from a US-oriented financial system. This is coming to an end very, very quickly.
As a rule of thumb, the greater the economic distortion, the harder the collapse. The US economy has been in a fantasy world for so long, and when its dominant primacy is yanked away, the collapse will be at freefall speed.
Listen… I'm not talking about the end of the world here, I'm talking about difficult times ahead, and the things that go beyond economics. It's time to face facts and look at how society will change (and has already changed).
Tomorrow, I'd like to write more about what we can do now. Meanwhile, please tell me what you think about this– how do you see society changing from this reset of the financial system?

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TLC Peru_USA Datos expo-impo 2006-2011

 

AÑO                     EXP           IMP             SALDO

TOTAL 2006     2,926.8     5,880.4     -2,953.5
TOTAL 2007     4,119.8     5,271.6     -1,151.8
TOTAL 2008     6,183.0     5,812.5       370.5
TOTAL 2009     4,918.8     4,223.3       695.5
TOTAL 2010     6,754.3     5,056.9     1,697.3
TOTAL 2011     2,602.1     2,106.6       495.5

http://www.census.gov/foreign-trade/balance/c3330.html

Efecto TLC Aumento de comercio USA-Perú y paso de superavit peruano en el 2006 de 2,953.5 millones dolares a un creciente deficit, en el 2010 fue de 1697 millones.

Qué nos dirán los que argumentaron que el TLC favorecería las exportaciones peruanas a USA. Estas cayeron miéntras las importaciones aumentaron. Quien negocio, Mercedez Araoz ?

Los que cuestionaron el TLC fueron avasallados por decenas de especialistas que defendían los términos del acuerdo, todavía se puede descargar del Ministerio d Comercio Exterior los estudios que justificaron el trato. Nos vendieron la idea, incumplida del aumento de las exportaciones.

".. el TLC constituye una importante oportunidad para que el Perú expanda sustancialmente su comercio exterior con el fin de contribuir a mejorar la calidad de vida de los peruanos."

"A cambio de la importante ampliación de mercados externos que obtendrá, después de firmado el TLC, el Perú deberá asumir la reducción en la recaudación fiscal como consecuencia de la eliminación del cobro de aranceles a las importaciones procedentes de Estados Unidos."

"Se está buscando mejorar la competitividad de los agricultores brindando una plataforma de servicios que refuerce aspectos tecnológicos, sanitarios y de asistencia comercial, como parte de un Programa Nacional de Reconversión y Compensación Agraria. Complementariamente a dicho plan, se ha planteado otorgar subsidios específicos a los tres principales productos que pueden
ser afectados, algodón, maíz y trigo."
http://www.tlcperu-eeuu.gob.pe/index.php

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The Catalysts Start to Catalyze

by John Rubino on June 15, 2011

For a couple of years now it's been clear that the world was about to fall apart, with the only question being which local failure turns out to be the catalyst for a systemic breakdown. So many things were on the verge of blowing up…yet none of them did. The world's governments have engaged in a heroic period of "extend and pretend" that has kept the system together longer than seemed possible.

But now the game seems to be ending. It's still not clear which bomb will go off first, but a bunch of fuses have gotten very short indeed. Here's a survey of old crises that are finally coming to a head:

California and Illinois
These two U.S. states are bankrupt by any reasonable definition, but are somehow managing to pay most of their bills. Their political classes are dominated by public sector unions, so neither has tried the tough medicine of places like Wisconsin or New Jersey. Instead, they've used a combination of much higher taxes (Illinois) and accounting gimmicks as a means to much higher taxes (California) to delay the inevitable reckoning.
Both are reaping what they've sown. Illinois, after raising corporate and income taxes, now faces an exodus of businesses to more friendly climes like Indiana and Texas. The governor is doling out tax breaks to keep major employers, a practice that 1) sends those new taxes right back out the door and 2) leads every other company to demand the same treatment. Latest on the list is the Chicago Mercantile Exchange, the state's biggest financial institution. No end in sight but bankruptcy.
California desperately wants to raise taxes but can't get an increase through the legislature. Thanks to a recently passed referendum, lawmakers don't get paid unless they produce a budget, so they'll do so pretty soon. But without more tax revenues it will fill the gaping deficit with gimmicks like delayed payments. No one will be fooled. The only question now is whether there's room in Texas for all the California companies that will soon be leaving. Again, no end in sight but bankruptcy. Short munis and pretty much anything dependent on consumer spending, since the resulting public sector layoffs will devastate demand for cars and other luxuries.
The Middle East
As country after country blows up, the U.S. finds itself sucked into increasing numbers of "humanitarian" military operations that are, of course, really about protecting the flow of oil. It won't work. An oil crisis of some sort is coming. Buy energy stocks, from oil to clean tech, short everything else.
The U.S. budget
With America borrowing, in effect, its entire military budget from China, unemployment headed back to double digits even by Washington's fraudulent accounting, and neither party willing to really address the military/entitlements complex, the debt will keep piling up until it can't. The rating agencies are now, belatedly, threatening the US AAA rating, the loss of which would either drive interest rates back to their historical average of 5%-6% (sending interest costs out of control) or force the Fed to start buying all the bonds issued by Treasury (sending the money supply out of control). Result: imminent currency crisis. Buy gold and silver, short Treasuries.
Housing
After seeming to stabilize for a few months, housing is tanking again. Sales and prices are down, underwater mortgages are surging, home builder confidence is at new lows, and poor innocent Bank of America is stuck with trillions of bad paper that it's not accounting for. As home prices accelerate to the downside, look for huge bank write-downs, massive stock volatility, and maybe another bailout. Short anything in the financial sector.
Europe
Ah, the euro. Greece is imploding…riots in the street, the government is falling, and the Bundesbank and ECB can't agree on how to handle the coming default. This one is coming to a head very soon, to be followed by the other PIIGS countries — assuming there's still a Eurozone to try to save. Short the European banks with the most Greek paper, load up on precious metals.
Does it matter which blows up first?
Not any more. They're all so close that just their prospect is enough to send capital running for cover. It's a nasty year no matter what. But then comes the next stimulus plan, which complicates the whole "short the world" thesis. The markets have been consistently fooled by this kind of thing, and there's no reason to believe that QE3 won't ignite another rally in risk assets. So monitor those shorts and be ready to close them out when CNBC starts hinting at a big pending announcement from Bernanke or Geithner. Shift the proceeds into precious metals, which will absolutely rocket when the next wave of fake liquidity hits the market.

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mining tax

More mining tax, royalty hikes 'inevitable' – Control Risks

TORONTO (miningweekly.com) – More governments in Africa and elsewhere, especially newly elected ones, will likely look at raising mining taxes and royalties amid historically high commodity prices, Control Risks senior analyst for Africa Thomas Wilson said in an interview.

"I think it's inevitable. And it's always been like that, it's always followed the mineral cycle, he said on the sidelines of a MineAfrica seminar in Toronto.

"Governments look at commodity prices and say 'we should be getting more out of this'."

The trend is also a product of the changes in governments, particularly when more democratic regimes replace what may have been "more autocratic" previous governments, he said.

"So they come in on a popular mandate where they have made the electorate promises to look at contracts that were signed in the past with other governments that were potentially, I suppose, less scrupulous when it came to negotiating with foreign investors."

Mining companies and investors are increasingly edgy about potential changes in government policy in the regions where they operate, as nations seek ways to benefit more from record commodity prices.

A trend towards resource nationalism around the world is probably the biggest risk facing mining companies, Xstrata CEO Mick Davis said in December.

Last year, then-Australian Prime Minister Kevin Rudd proposed a 40% resources super profits tax, and although the country backed off the plan it has now released draft laws for a 30% tax on coal and iron ore miners.

Also this week, reports emerged that the Tanzanian government is planning a windfall tax on the mining industry, sending shares in LSE-listed African Barrick Gold lower.

And Mining companies operating in Peru also declined sharply on Monday after left-leaning Ollanta Humala, a military officer who had talked about making sure Peruvians benefit more from the country's mineral wealth, was elected President.

Guinea, under new President Alpha Conde, has also said it will relook at the country's mining code, followed by a review of all existing mining contracts.

Reviews of outdated laws and a push by governments to be more active in their resources sectors are not necessarily a bad thing, Wilson commented.

"But they must resist the temptation to turn reviews of laws and contracts into a purely revenue generating exercise."

DEALS TO SURVIVE

Mining companies operating in higher-risk areas are also not helping themselves or their shareholders by squeezing all possible concessions out of governments when negotiating mining contracts and agreements, Webber Wentzel partner Nkikia Moshesh said at the same event.

Agreements that seem skewed in the foreign investor's favour might look good on paper but run the risk of coming under fire from future governments and their voters, she commented.

Regimes change, commodity prices rise, "and people end up saying 'we are not extracting enough value from this company'," Moshesh said.

"Mining projects are intended to be of a long term nature. You want to conclude agreements that are going to survive, and preferably will survive changes in government, changes in political thinking."

ALMIGHTY STINK

African Barrick Gold, the biggest producer in Tanzania, and South Africa's AngloGold Ashanti both insisted this week that their tax positions in the country are protected by existing mineral development agreements, and could not be affected by a new windfall tax.

But there few new mines coming onstream in Tanzania and there is relatively little exploration investment as well, commented Africa mining consultant with political risk consultancy Menas Associates Christopher Melville.

"If the government is serious about the windfall tax it can have no other targets than the producing mines operated by the big players," he said.

Although the tax reports could just be "smoke and mirrors" related to internal party politics, it is also possible that the government is trying to use the threat of an imposed tax to persuade mining companies to renegotiate contracts voluntarily, Melville suggested.

"Trying to push it through...would cause an almighty stink with the majors given the stabilisation clauses in their development agreements.

"The government surely has no stomach for such a stink and may rather hope that unsettling announcements will be enough to encourage the companies to renegotiate voluntarily."

Either way, this week's reports are clearly negative for investor interest in Tanzania, he said.

"The government cannot afford to kill the goose."

Edited by: Creamer Media Reporter

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