Paraguay’s presidential impeachment puts Venezuela in Mercosur trade bloc

Latin America Update: August 8, 2012                     

Untapped Internal Markets of Venezuela Now Open for Mercosur Countries

Paraguay’s presidential impeachment puts Venezuela in Mercosur trade bloc. Mercosur = Argentina, Brazil, Paraguay (suspended), Uruguay, and now Venezuela.

Strike #1: Paraguay, known as a hub for trafficking of contraband and drugs, has gone through periods of political instability since the dictatorship of Alfredo Stroessner in 1989. On June 23, 2012, Paraguay’s senate voted to impeach its President and colorful left-wing Catholic Priest for fathering several children.

Strike #2: Paraguay’s Vice-President, Luis Federico Franco, is installed as interim president of Paraguay, a move that is considered an “express coup d’etat” by the members of Mercosur who vote to suspend Paraguay from its membership.

Strike #3: Without Paraguay’s vote, Mercosur moves to confirm Venezuela’s full membership, long opposed by the Paraguayan Senate due to concerns about Chavez’s democratic credentials.

Result : Venezuela is “in” and buying planes from Brazil’s Embraer, and Paraguay is “out” and claiming diplomatic isolation. As the saying goes, 3-strikes and you’re out.

#Update from Jock Chamberlain, President Murcadom Corporation#

 

International Monetary Fund Revises Outlook for Latin American Economies

Latin America Update: April 26, 2012

IMF

Latin American economies are expected to grow 3.7% this year and 4.1% in 2013.  (These estimates exceed the values published in January.)

Net Flow of Mexican Immigrants to USA Stops
For the first time in 40 years, data shows that net migration from Mexico to the USA has dropped to zero.

Argentina Among Top 5 Countries with Highest Credit Risk

We are keeping a close watch on Argentina due to high credit risk, the recent nationalization of Repsol, import and export restrictions, rapid inflation, as well as an unstable political environment.

Dueling is Still Legal in Paraguay.

Latin America Update: March 14, 2012

However, duels can only take place between two people, the duel must be registered with the authorities, there has to be medical staff on hand, and participants must be registered blood donors.

China Replaces the US as Peru’s Top Export Market

Two years after signing a bi-lateral free trade agreement with Peru, China replaces the United States as the top market for Peruvian exports (led by Mining and Fisheries). The US remains the leader for Peruvian imports, followed closely by China.

Inter-American Development Bank (IBD) Board of Governors to Converge on Montevideo

Murcadom President Jock Chamberlain will be in attendance when the Inter-American Development Bank (IDB) holds its annual meeting next week in Montevideo, Uruguay.

The largest source of development financing for Latin America and the Caribbean, the IDB is made up of 48 shareholders and includes 26 Latin American and Caribbean member states.

Peruvian Delegation to Ring Opening Bell at NYSE

Latin America Update: March 8, 2012

Peruvian Delegation to Ring Opening Bell at NYSE

The second annual Peru Day will be held tomorrow, March 9th at the New York Stock Exchange with the participation of senior officials of the Peruvian Government and leaders of the Peruvian private sector.  Peru’s robust growth makes it a leading investment option in Latin America.

Chinese Firm Kickstarts Dormant Mining Industry in Ecuador with $1.5 Billion USD

China’s Ecuacorriente S.A. signed a 25-year agreement to operate an open-pit copper mine and make a $1.5 billion USD investment in Ecuador.  Mining contracts in Ecuador require a 52% royalty on profits and this precedent-setting agreement includes a $100 Million USD advance royalty payment to the Government of Ecuador.   Kinross (Canada) and International Minerals Corporation (US) are currently negotiating similar agreements with Ecuador.

Chile to Invest $4.3 Billion USD in Copper Mining During 2012

Chile’s state-run mining company will invest a record $4.3 billion USD this year to expand copper mining operations.  The 16,000 employees of La Corporación de Cobre de Chile (Codelco) are expected to produce approximately 1.7 million tons of copper or 30% of Chile’s yearly output.

Mexican Carlos Slim Tops Forbes List of Billionaires

Carlos Slim, the chairman of Mexican telecommunications conglomerate Telmex is worth about $69 billion USD. Telmex and its associated companies are active throughout Latin America.

Mexico Prepares for G-20 Summit in June

Latin America Update: February 22, 2012
G20 Mexico

Mexico Prepares for the G-20 Summit in June

Mexican President Felipe Calderón met this week with representatives from G-20 nations in preparation for the annual summit to be hosted by Mexico in Los Cabos this June (the first G-20 summit in Latin America). The G-20 is potentially the most influential association of finance ministers from 19 major global economies plus the European Union. G-20 economies account for more than 80 percent of global trade and represent two thirds of the global population.

Construction of Subway in Lima, Peru

Peruvian President Ollanta Humala announced the construction of Lima’s first underground train system. Over 30 kilometers of construction is expected to cost $2 Billion USD. The system will be operational within 6 to 10 years.

Colombia to Triple Infrastructure Investments

Colombia has an immediate need of $20 Billion USD worth of highway infrastructure development to support economic expansion. The government has pledged to triple infrastructure investment to 3% of GDP by 2014.

US & Mexico Sign Deep Water Oil Deal

The agreement lifts the moratorium on oil and gas exploration in the 1.5 million acre trans-boundary region of the Gulf of Mexico.

 

United States – Colombia Free Trade Agreement Update

Latin America Update: February 16, 2012

Update on the US-Colombia FTA

While the US-Colombia trade deal was approved by Congress in October, it’s not yet in effect due to a disagreement over Colombia’s compliance with US-imposed labor requirements. US officials report that the FTA should be active within “months.” Key U.S. exports will gain immediate duty-free access including almost all products in these sectors: agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood.

Mexican Drought Hits Agriculture Hard

The worst drought in 71 years is currently affecting 22 of the 31 Mexican states with a 40% reduction in corn and bean yields, staples of the Mexican diet. Mexico is the United States’ third most important trading partner after Canada and China.

UNASUR to Propose a Fiber Optic Ring for South America at Meeting in Paraguay

The Union of South American Nations (UNASUR) will discuss a proposal to implement a Fiber Optic Ring to lower the cost of Internet throughout South America. Internet “bandwidth” in South America is three to four time more expensive than in North America. Representatives from the 12 nations of UNASUR meet again on March 9th in Asunción, Paraguay.

World Economic Forum talks about Latin America

Latin America Update: February 1, 2012
World Economic Forum

Davos-Klosters, Switzerland

The World Economic Forum annual meeting wrapped up this past weekend in Davos-Klosters, Switzerland. Latin America was identified as an “oasis of stability, growth, and opportunity”, in contrast to the uncertainty surrounding the European debt crisis and a slow recovery in the United States. Colombia, Peru, and Brazil remain top destinations for foreign investment dollars.

Falkland Islands back in the News

The UK announced that it will send a Type 45 Destroyer to the Falkland Islands in the midst of escalating diplomatic tensions surrounding the ongoing dispute with Argentina regarding the sovereignty of the territory of 3,000 inhabitants. In December, the Mercosur countries of Argentina, Brazil, Paraguay, & Uruguay decided to ban access to all Falklands flagged vessels in support of Argentina.

Lost and Little-Known in South America

“The Guyanas” refers to a region in north-eastern South America with a combined population of 1.5 Million and includes French Guiana, Guyana, and Suriname. Forget Spanish or Portuguese, you are better off speaking English, French, Dutch, Hindi, or even Cantonese.

 

Daniel Ortega “Institutional Dictator” in Nicaragua

Latin America Update: January 18, 2012

Daniel Ortega“Institutional Dictator” in Nicaragua

Daniel Ortega started his second consecutive term as President of Nicaragua last week and will have governed for 10 years when his current term ends in 2012. He was reelected in November of 2011 even though the Constitution of Nicaragua prohibits consecutive presidential terms. His political party also controls the legislative and judicial branches of the government, making him a de facto “institutional” dictator.

Panama Canal Construction to Finish in 2014

The new Panama Canal will allow huge freighters from Asia to bypass US West Coast ports and head directly to the Gulf of Mexico and East Coast ports. The $5.25-billion project will make the 50 mile Panama Canal wider and deeper. Construction is 32% complete with a projected completion in October of 2014. The new locks use 29 times more steel than the Eiffel Tower.

Countries visited by Iranian President Mahmud Ahmadineyad last week:

Venezuela, Nicaragua, Cuba, Ecuador

Cattle per Capita (CPC)

Uruguay has the highest Cattle per Capita (CPC) in the world with 12 million head of range-fed Hereford cattle for a population of 3.3 million people. That means there’s 3.7 head for each Uruguayan resident. Beef accounts for over 25% of Uruguay’s exports, more than $1.0 billion (USD). Too bad Ray Kroc never tasted a Big Mac in Montevideo. They say it’s the best in the World.

Community of Latin American and Caribbean States CELAC

Latin America Update: January 4, 2012

CELAC

2012: Year of Regional Integration

Loosely based on the European model, the nations of Latin America continue an agenda of regional integration. The newly formed Community of Latin American and Caribbean States (Comunidad de Estados Latinoamericanos y Caribeños, CELAC) consists of 33 sovereign countries in the Americas, and totals roughly 600 million people (excluding the United States and Canada).  Chilean President Sebastián Piñera is the President pro tempore of CELAC and the 2012 conference will take place in Chile (July).  The Organization of American States (which does include the US and Canada) will hold its annual assembly this year in Cochabamba, Bolivia (June). I need to plan my flights.

Equity Markets in Latin America

Colombia, Chile, and Perú will operate a unified stock market starting in May of 2012.  Mexico has signed a letter of intent to join this integrated market called MILA (Mercado Integrado Latinoamericano).

Growth Expectations for 2012

Latin American economies will grow approximately 4% in 2012 led by Panama, Peru, Colombia, Uruguay, Chile, Brazil, and Mexico.

2012 Presidential Elections

Venezuela, Mexico, and the Dominican Republic will all choose new leaders this year.

Too bad the pilgrims didn’t drink wine

Chile has been making wine for over 490 years; 75 years before the Pilgrims landed at Plymouth Rock. Chile is the fifth largest exporting country in the world with 4.3% of the market share (ahead of the US).

Latin America and the Global Corruption Index

Latin America Update: December 7, 2011

Global Corruption Index

Chile is the least corrupt country in the Americas according to Transparency International’s 2011 Corruption Perception Index. Chile (Rank 22) is considered even less corrupt than the United States (Rank 24), Uruguay (Rank 25), and much less corrupt than Venezuela (Rank 172).

GDP Growth Rates

Latin America is expected to grow 4.4% for 2011. Peru experienced a 6.5% GDP growth rate in Q3 2011 vs. 2% in the United States.

Did you know?

Bolivia which boasts one of the smallest GDP’s in Latin America ($19.3 Billion USD) has the largest natural reserve of lithium in the world. Soon you’ll be seeing descendants of the Incas driving Rolls-Royces.

Latin America at the United Nations General Assembly

Latin America Update: September 21, 2011

POLITICS:

Latin American countries will be well represented at the United Nations General Assembly in New York, September 23-27. (1) Brazilian President Dilma Rousseff will continue to push for a permanent seat on the UN the Security Council. (2) Argentine President Cristina Fernandez, expected to win re-election in October, will likely discuss the Falkland Islands sovereignty dispute. (3) Venezuelan President Hugo Chavez will not attend due to his 4th round of chemotherapy. (4) Peru will present its new President Ollanta Humala, who has taken a prudent tone in an attempt to calm nervous investors and maintain Peru’s robust economic growth.

ECONOMICS:

(1) Chile remains the most competitive economy in Latin America and projects 2012 GDP growth of 5.25%. (2) Argentina experienced 23% inflation over the past 12 months as a result of expansionary monetary policy, not entirely a surprise for a country with a history of debt and monetary crises. (3) Peru is one of the top growth economies with 2011 GDP growth of 6.5% and forecast growth of 6.0 % for 2012. (4) China announced $1 Billion (USD) in development loans to strengthen ties to Caribbean countries and bolster its influence in the region.

 

Products the US can export to Latin America

Best prospects for U.S. exports to Latin America include: Mining equipment, oil and gas equipment and services, marine, environmental, construction equipment, transportation, industrial and electrical machinery, pumps, valves and compressors, refined petroleum products, plastics, computers and telecommunications equipment, Electric power, power generation and transmission, renewable energy equipment, Construction equipment, Machinery and Supplies, Mining Equipment, Pollution Control Equipment, Water resources equipment and technologies, water and wastewater treatment equipment and technologies, engineering, and consulting services, Desalination equipment/technologies, Healthcare and Medical Equipment; Computer Hardware and Software; Food Processing and Packaging; Travel and Tourism, Franchising, Consumer oriented products for retail.

Ollanta Humala defeats Keiko Fujimori

Latin America Update: June 22, 2011

POLITICS:

(1) Ollanta Humala defeated Keiko Fujimori in Peru’s presidential elections. Although a close race, polls indicate a 70% approval rating for President-Elect Humala. Despite media headlines to the contrary, data indicates that Ollanta Humala will not follow the political path of Venezuela’s president Hugo Chavez. (2) Honduran President Porfirio Lobo accepted the return of exiled Honduran leader Manuel Zelaya days before the Organization of American States (OAS) voted to allow Honduras to resume its participation in the organization. (3) Cuban President Raul Castro turned 80 this month and publicly expressed his concern regarding the availability of a successor who will continue the socialist “revolution.”

ECONOMICS:

(1) China is aggressively locking down commodities around Latin America through large loans, investments and other financial arrangements. At the same time, Chinese companies have secured a decade’s worth of oil from Venezuela and Brazil, as well as steady supplies of wheat, soybeans and natural gas from Argentina. (2) The airline merger between TAM (Brazil) and LAN (Chile) could be delayed until March of 2012; the merger will create one of the world’s largest airlines. (3) Brazil celebrates that, “for the first time in history,” it’s risk of default within the Credit Default Swap (CDS) marketplace is less than the United States. (4) Claro, a unit of América Móvil owned by Mexican Carlos Slim (the world’s richest man), said that it will invest $1 billion in Peru over three years — the first major investment announced by a foreign firm since Ollanta Humala won the presidency.

Top 5 things you probably didn’t know about Nicaragua

Submitted by PRONicaragua
Official Investment Promotion Agency of Nicaragua

#1 Booming Economy: Nicaragua reported the highest real GDP growth in the Central American region during 2010, reaching 4.5 percent. Foreign direct investment (FDI) in Nicaragua grew to US$508 million in 2010, a 17 percent increase versus last year.

#2 Vast cultural and natural richness: Nicaragua is not only the largest country in Central America, but also possesses vast cultural and natural richness. 68 patronal and traditional celebrations, 7 indigenous cultures, 3 world heritages, 25 volcanoes, nearly 800 km of coastline in the Pacific and Caribbean, 72 protected areas, 7 percent of the world’s biodiversity and 3 biosphere reserves declared by UNESCO.

#3 Safest country in the region: A study performed by CID Gallup Latin America, which measures crime rates revealed Nicaragua as the country with the lowest incidence of crime in 2010.

#4 Best in investor protection: The 2011 World Bank Doing Business Report ranked Nicaragua as the country that best protects its investors in Central America. The country’s Foreign Investment Promotion Law (344) offers investors basic guarantees such as full international ownership, freedom to repatriate profits, full currency convertibility and equitable treatment.

#5 Growing tourism figures: 2010 set a new record for Nicaragua in terms of tourist arrivals by surpassing the one million mark, this represents an 8.5 percent growth when compared to 2009, the second highest growth rate in Central America.

President Obama’s Latin America Trip

President Obama will travel to Brazil, Chile and El Salvador from March 19-23. This will be his first trip to Latin America as either a private citizen or public official. Among the issues to watch, in Santiago, he is expected to deliver an address to Latin America modeled after his Cairo speech in June 2009.

Click to read President Obama’s Latin America itinerary.