Venezuela, Argentina swap money for milk

Dan Grech Feb 22, 2007
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Venezuela, Argentina swap money for milk

Dan Grech Feb 22, 2007
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MARK AUSTIN THOMAS: Oil-rich Venezuela is running low on basic foods like powered milk. The shortages are caused by government price controls, making it unprofitable to the produce the goods locally. Venezuela refuses to lift the controls. Instead it’s just signed an unusual deal with its ally Argentina. From the Americas Desk at WLRN, Dan Grech has the story.


DAN GRECH: Argentina’s second-biggest dairy producer SanCor never recovered financially from the nation’s 2001 economic crisis.

Venezuela will loan the ailing company $135 million. In exchange, SanCor will supply Venezuela with much-needed powdered milk for 12 years.

Eurasia Group analyst Daniel Kerner says before Venezuela stepped in, SanCor planned to sell itself to a foreign investment firm controlled by financier George Soros. That would have soured Argentine voters going into October’s presidential election.

DANIEL KERNER: SanCor is very much seen by most voters as an integral part of the Argentine economy, and certainly this would have negative effects for the government if it would fall under the hands of foreigners.

Kerner says the deal also highlights the close bond between two South American nations that resist U.S. free-market policies.

I’m Dan Grech for Marketplace.

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