Peel & PART TWO. Provide historical details from the oral presentations to suppo

Question

Peel & PART TWO. Provide historical details from the oral presentations to support your answers. & 17. State ownership of non-renewable minerals and energy resources can prevent foreign capitalist enterprises all the profits out when resources are extracted. If managed well, the state-owned companies can reinvest in 15, 16, from sucking further extraction and encourage higher value added refining of the resources within the coun commodities rise, governments can tap the profits of th housing for the long run benefit of the population. When world prices fall, corruption of state owned enterprises are often exposed, and even the best managed state companies may have to make concessions to foreign capitalist enterprises, especially if the easiest to tap resources have been depleted. True or False, and Why? (In your answer critically compare the historical experiences of at least three from the following list of cases explored in the think-tank: Natural Gas-Bolivia, PDVSA- Venezuela Oil, PEMEX- Mexico Oil & Refining, CODELCO- Copper in Chile.) try. When world prices of the e state-owned firms and reinvest in public education, health, and however, inefficient management and

Explanation / Answer

19, 20, 21

The statement is true.

1. Natural Gas, Bolivia : Exploitation by foreign players

Since 1990s, Bolivian gas resources had been controlled by foreign players from Spain, Brazil and Argentina. In spite of having the region’s second largest natural-gas reserves after Venezuela, Bolivia was among Latin America’s poorest nations. The price which Bolivia is paid for its natural gas was roughly US$3.25 to Brazil and $US3.18 to Argentina. The price of gas in the US as a whole is between US$5.85/MMBtu (May 21, 2006), US$7.90/MMBtu (April 2006)[7] & US$6.46/MMtu (June 2006).

Protests broke out in 2003, over the exploitation of gas resources which led to resignation of president. Opponents believed foreign investors received too much in gas-sale profits based on the hydrocarbons law in place.

In 2005, Bolivian President Evo Morales moved to nationalize nation’s oil and gas reserves, ordering the military to occupy Bolivia’s gas fields and giving foreign investors a six-month deadline to comply with demands or leave. Government hoped to use the gas profits to bolster the sagging Bolivian economy and claimed the money would be invested exclusively in health and education.

2. PDVSA, Venezuela : Crisis due to corruption and oil price slump

Oil accounts for over 90 percent of Venezuela’s export revenue and provides the hard currency for government. Yet the country, which sits on the world’s largest crude reserves, was producing under 2 million barrels per day in 2016. Venezuela's crude production has been steadily declining as the oil-dependent state slogs through an economic crisis precipitated by years of government mismanagement and exacerbated by a prolonged oil price slump.

Due to drop in critical energy imports, state oil giant Petroleos de Venezuela, known as PDVSA, is struggling to fund its operations.

Industry analysts and opposition politicians criticize PDVSA management for widespread graft. A report by the opposition-led Congress last year said at least $11 billion went “missing” at PDVSA between 2004 and 2014.

Venezuela and PDVSA have recently defaulted on hundreds of millions of dollars in interest payments and turned in key principal payments late..The debt situation highlights PDVSA's limited ability to reinvest in its operations, which will further exacerbate its production problems as it puts off oilfield and equipment maintenance.

3. PEMEX, Mexico : crisis due to mismanagement and fall in prices

In 2009, Mexico,the world’s sixth largest producer of oil and America’s third largest source of crude imports faced declining production at its primary oil fields. Meanwhile, the structure and management of Pemex (Petróleos Mexicanos), Mexico’s state-owned oil monopoly, coupled with the government’s historic dependence on its revenues, had limited ability to bolster its reserves

Pemex had held the monopoly over the resource, bringing in a hefty proportion of the national income. However, poor management, high spending and corruption prevented necessary investment for decades. Lacking technology and infrastructure, the company became less and less productive.

Due to the decline in the price of oil that began in 2008 and with the escalation of the global recession, Mexico’s oil-dependent economy had suffered to the point that it could no longer manage the abundant Mexican oil nor cover the country’s demand.

21. Free trade agreement Helps Automobile industry in Mexico.

Automakers can save $1500 per car using cheaper Mexican parts, savings which come from lower Mexican wages, but also because many parts are imported into Mexico tariff free from Europe and Asia.

It’s $4300 per vehicle cheaper to build in Mexico and ship to Europe compared to US production, because Mexico has a free trade deal with the European Union.

Most of Mexico’s auto exports still come to the US and Canada tariff free under NAFTA, with Mexico sending some 2 million cars a year into the US. That’s over half of Mexico’s total production. But by 2018, 28 percent of Mexico’s production will go to non-NAFTA countries, up from 18 percent in 2015. The problem is exacerbated by major automakers’ desire to switch to global vehicle platforms. One plant may be expected to produce vehicles for multiple markets, giving a distinct advantage to jurisdictions with multiple trade deals in place globally.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.