Weekly Report - 04 April 2012 (WR-12-14)

ECUADOR | Growth record. The economy grew by 7.8% in 2011. The national press, which is largely hostile to the government, clearly found it difficult to report this news, providing scant coverage of what was the most impressive economic expansion since President Rafael Correa took office in 2007. It focused on the fact that the GDP growth figure was beneath the official estimate of 9% for the year, and followed years of modest growth (0.4% in 2009 and 3.6% in 2010). Higher oil prices and increased production helped the oil sector grow by 4.2% year-on-year, bouncing back from a 2.7% contraction in 2010.

PERU | Gas pipeline. President Ollanta Humala inaugurated a 1,000-km gas pipeline in the southern town of Quillabamba last week. Humala said the US$3bn pipeline, which will transport natural gas from the huge Camisea gas field in Cusco to the southern region of Arequipa, constituted the most important infrastructure project in the last century in Peru. One of Humala’s electoral promises was to reduce the cost of domestic gas, arguing that previous governments had prioritised exporting gas from Camisea. The pipeline, which will be constructed by the Kuntur-Odebrecht consortium from April, will send natural gas from the Camisea reserve to a petrochemical complex on the Pacific coast to be constructed by Brazil’s energy giant Petrobras. Humala said the project would provide 40,000 jobs, and could generate 2% of GDP growth. On 3 April, the government struck a deal with the Camisea consortium ensuring natural gas from Lot 88, the largest bloc, is used exclusively to supply the domestic market and not for exports.

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