Economic lessons from Latin America

[Sir X]

ECONOMY
Economic lessons from Latin America


VILLELA-MARINO
BY RICARDO VILLELA MARINO
RICARDOVM@ITAU-UNIBANCO.COM.BR
Coming out of one of the worst financial downturns since the Great Depression, we are still waiting for all of the pieces of the economic jigsaw puzzle to fall into place.

The United States continues to suffer from persistently slow rates of growth, Europe remains roiled by ongoing economic uncertainty and the once ironclad fortunes in China have even begun to fade. And despite many expert predictions, a surprisingly and strikingly different picture is emerging in, of all places, Latin America. Experts predict Latin America, now home to a middle class of 225 million people, will likely grow at a 4 percent clip this year — nearly twice the level of growth expected for the United States.

As Vice President Joe Biden recently observed, the dynamic has changed from, “What can the United States do for Latin America?” to “What can the United States do with Latin America?”

A number of factors have contributed to Latin America’s relative economic resilience in the years following the 2008 global financial crisis.

Chief among them are strong demand for commodity exports from China and a boom in infrastructure, such as what we see in Brazil today. What should not be overlooked, however, are the buffers that Latin America had in place prior to the recession, which enabled the region to emerge early and reasonably unscathed from the global meltdown. Resulting in part from the crises of the 1990s and early 2000s, in the years leading up to the 2008 crisis Latin American governments instituted a number of smart macroeconomic changes — from the lowering of public-sector debt, to the adoption of inflation-targeting policies by central banks.

Together, these policy changes enabled Latin American governments to handily implement counter-cyclical policies — cutting interest rates, introducing stimulus money and injecting liquidity into the financial markets.

This new fiscal policy provided significant help beyond automatic stabilizers as discretionary spending was accelerated, taxes were lowered, and central banks distinguished between tools that could stimulate domestic demand, such as interest rates, and instruments that could ensure an adequate transmission of the monetary policy rate to the economy.

While it’s true that Latin America’s growth coincided with robust development in China, a drop in global volatility and a rebound in commodity prices, the actions governments took during this time unquestionably helped the region become less vulnerable to external shocks than in the past, proving that there is no substitute for quality risk management and supervision of banking frameworks during times of uncertainty.

As the global economy continues to regain its footing, others can learn from Latin America’s experience.

At the same time, for growth in Latin America to continue, it is incumbent on countries in the region to retain the same pro-active and preemptive stance which enabled it to weather the most recent crisis. The reality is that macroeconomic policy frameworks still have room for improvement. Specifically, countries such as Peru should further de-dollarize their economies to reduce currency mismatch, and Mexico should diversify its tax base. All countries should do more to increase their savings.

The private sector — particularly financial institutions — also bears a responsibility. To foster continued growth and guard against ongoing global uncertainty, we must first focus on getting the basics right by investing in human capital and by being prepared for potential scenarios of decreased growth. We must work to strengthen our leadership position in the world by exploring new markets and developing alliances that will enable us to expand international relationships.

Economically, Latin America has much to be proud of, but it is critical we move forward with a sense of cautious optimism. Not only do we face pending challenges within our economy — including persistent barriers to social mobility — but we are inherently part of a larger, interconnected, and still fragile global economy. Let us embrace our newfound economic prosperity, while remaining mindful of the best practices that we and others have learned to keep Latin America on its current trajectory for future generations.

Ricardo Villela Marino is CEO for Latin America of Banco Itaú Unibanco.

Read more here: http://www.miamiherald.com/2013/06/2...#storylink=cpy

[Sir X]

US and China: The Fight for Latin America

US and China: The Fight for Latin America
June 24, 2013 - 6:46am | admin

By Robert Valencia

During the first weekend of June, U.S. President Barack Obama and Chinese President Xi Jinping met in California to discuss cyber espionage and territorial claims in the Pacific Rim. While tension on these topics has hogged the headlines, the fight for influence in another area could be even more important—Latin America. Other emerging markets in Africa, where China has an overwhelming influence due to foreign direct investment in mining and oil, also offer economic opportunities, but Latin America has an abundance of natural resources, greater purchasing power, and geographic proximity to the United States, which has long considered Latin America as its “backyard.”

The key question now is will Latin American countries lean more toward China or the United States, or will it find a way to balance the two against each other? Right now, Latin American countries are increasingly confident thanks to burgeoning economic and political integration by way of trading blocs, and they're demanding to be treated as an equal player.

As a sign of its growing importance, China and the United States have courted Latin America more than usual. In May, President Barack Obama visited Mexico and Costa Rica while Vice President Joe Biden visited Colombia, Brazil, and Trinidad and Tobago. Shortly after these trips, President Xi went to Mexico and Costa Rica to foster economic cooperation.

China’s active involvement in Latin American geopolitics can be traced back to 2009. Chinalco, China’s largest mining company, signed a $2.2 billion deal with Peru to build the Toromocho mine and a $70 million wharf in the Callao port. Since then, Peru has sent 18.3 percent of its exports to China, making China Peru’s largest trading partner. China’s imports to Peru, however, rank second with 13.7 percent of the market while the United States holds first place with 24.5 percent.

China has the upper hand with the Latin American leftist countries in terms of infrastructure and technology. In 2009, Chinese telephone manufacturer ZTE played an instrumental role in assembling the first mobile phone in Venezuela known as “El Vergatario” (Venezuela slang for optimal). Former President Hugo Chávez introduced this new phone to low-income families making it the world’s cheapest phone ($6.99 for a handset). Additionally, China landed rail construction projects in Argentina and Venezuela and has become a major buyer of farm products and metal in South America. Between 2011 and 2012, China purchased nearly 58.02 million tons of soy from Argentina, up from 52 million in 2011 and 2010.

China has also maintained an active market with Brazil. Chinese oil company Sinopec and China Development Bank offered Brazilian oil company Petrobras a $10 billion loan in 2009 in return for hundreds of thousands of barrels per day. In 2011, three Chinese metal companies purchased Brazilian mining company Companhia Brasileira de Metalurgia e Mineracao.

China’s boldest move in the region is the possible construction of a massive canal in Nicaragua. Nicaraguan President Daniel Ortega pushed the National Assembly to approve the multi-billion dollar plan in June. The Nicaraguan canal would have a larger draft, length, and depth than the Panama and Suez canals, and the enactment granted a Hong Kong-based company permission to build and control the canal for nearly 100 years. The approval of this plan, however, raised the ire of environmentalists and neighboring Colombia, which recently lost 70,000 square kilometers of its Caribbean maritime territory to Nicaragua before the International Court of Justice (ICJ). Last May, Colombian diplomat Noemi Sanin claimed that China had influenced ICJ’s decision. According to Sanin, Chinese justice Xue Hanqin knew beforehand about Nicaragua’s intention to grant the canal construction to China since Xue was a colleague of Carlos Arguello, a role-player in the maritime case. There is no evidence for this, but it shows Colombia’s anxiety of China’s growing clout in the region and how it can upset balances of power.

The United States hasn’t lost Latin America, and is unlikely to lose it completely. It is still the region’s top trade partner. The United States has recently signed free-trade agreements with Colombia and Panama, and maintains other trade agreements with Peru, Chile, and Mexico. Central American and several Caribbean countries rely upon U.S. military cooperation in an attempt to curtail drug trade. Nevertheless, the post 9/11 years severely eroded U.S.-Latin American relations as the Bush administration focused heavily on the war on terror, often ignoring issues in Latin America.

China and the United States are also encountering a more confident and more unified Latin America. It is a region that has sought autonomy in its own affairs by way of rising blocs such as the Community of Latin American and Caribbean States, MERCOSUR, and the Bolivarian Alliance for the Americas (ALBA), among others. Brazil, Latin America’s largest economy, also seeks a prominent role the region with large investments in research and development and the introduction of social programs to revamp the middle class. Brazil has jumped into the global economic debates, calling out China, the United States, and other industrialized countries over the so-called “currency wars." In 2010, Brazilian Finance Minister Guido Mantega criticized these nations for policies that weakened exchange rates that in turn affected the real currency value and Brazilian exports. Since then, Brazil has pursued a more significant role among the world’s 20 most advanced countries known as the G-20.

Both the United States and China use infrastructure investment, diplomacy, and trade as leverage, but Latin America wants to be seen as a socioeconomic partner, not a subordinate. The Pacific Alliance, for example, hopes to become a powerful bloc that can stand up to the world’s two super powers. Comprised of Colombia, Peru, Chile, Costa Rica, Mexico, and possibly soon Panama, the Pacific Alliance is a new economic bloc that seeks economic integration oriented toward Asia-Pacific markets. Additionally, the Pacific Alliance can become a springboard for other Latin American nations with a Pacific shore to join the Trans-Pacific Partnership (TPP), a proposed free-trade agreement among Asia-Pacific, Mexico, Peru, Chile, Canada, and the United States. Being part of the Pacific Alliance is significant, because for countries like Costa Rica, it would otherwise be an unlikely candidate for the TPP. Taken together, the Pacific Alliance’s GDP totals $3 trillion, making it easier to integrate itself to the TPP and for it to fight for better terms. The United States will still hold the lion’s share of the TPP with an economy that hovers around $13 trillion—but an alliance worth $3 trillion will give it more leverage than it would otherwise have. The battle for influence in Latin America may have the effect of pushing the countries closer together, allowing them to stand up to both the United States and China.

*****

*****

Robert Valencia is a New York-based political analyst and a contributing writer for Global Voices. He also has a personal blog called My Humble Opinion.

[Photo Courtesy of Angélica Rivera de Peña]

[Sir X]

Brazils bows to socialism again , not a word from the west ?


Responding to Protests, Brazil’s Leader Proposes Changes to System
By SIMON ROMERO
Published: June 24, 2013
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SÃO PAULO, Brazil — President Dilma Rousseff of Brazil proposed a series of bold changes to the country’s political system on Monday, including convening a constituent assembly apparently aimed at overhauling Congress and campaign-finance methods, in an effort to assuage the concerns of protesters who have stunned the nation this month with their anti-establishment demonstrations.
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In detailing her plans, Ms. Rousseff seemed to be aiming for a relatively accommodating response to the protests, in contrast to how leaders elsewhere have reacted to major street mobilizations. Among them, Prime Minister Recep Tayyip Erdogan of Turkey has adopted a far more bellicose stance against residents who are furious about his plans to raze a park in the middle of Istanbul.

The protests in Brazil, the most wide-reaching in two decades, have vented anger at the political class in general. The demonstrations continued on a smaller scale on Monday; two women who were taking part in a protest blocking a highway near the capital, Brasília, were killed when they were hit by a car, raising to four the number of people who have died amid the protests this month.

Ms. Rousseff expanded upon proposals she unveiled on Friday in a nationally televised address. She said Monday that the government would allocate more than $22 billion to upgrading public transit systems, largely by building subways, and emphasized that hiring foreign doctors to work at beleaguered public hospitals — an unpopular plan among Brazilian doctor groups — would be an “emergency step.”

She also proposed stiffer penalties for political corruption, which has emerged as a top concern among protesters, and increasing the pay of teachers. And in move that could rattle the governing Workers Party’s alliances in Congress, she proposed holding a plebiscite over whether Brazil should convene a constituent assembly intended to carry out “political reform.” It was not immediately clear what she meant by that, though she said it should “expand popular participation.”

“Now the people out on the streets want more,” Ms. Rousseff said, announcing the proposals after meeting with leaders from the Free Fare Movement, a group that set off the demonstrations with a series of smaller protests against bus-fare increases.

The proposed political changes, like other suggestions to spend 100 percent of oil royalties on education and hire foreign doctors to work in rural areas, revive a plan that has been floated before without success by the Workers Party.

[Muadib]

<Since 2010 Juan Carlos Echeverry has served as Minister of Finance and Public Credit of the Republic of Colombia. He has received several international awards including Minister of Finance of the Americas (The Banker Global Financial Intelligence), Best Minister of the Year (America Economia), and Minister of Finance of the Year of the Americas (Emerging Markets).>

[Sir X]

Colombians Come to Venezuela in Droves



Colombia
Migration
Social Missions
It is estimated that by the end of 2009, 301 Colombians will be entering the country daily. The migration from the neighbouring country is no longer the same as that experienced in the 1960s, 1970s and 1980s, when one person per family group migrated.

Colombian families are now collectively mobilizing to Venezuela in search of the realization of a quality of life that is impossible for them to find in their home country, given the economic conditions in which they are forced to live as a result of the armed conflict. [1]

The second study of human migration of Colombians to Venezuela, conducted between August 2007 and October 2008 indicates that 67% of Colombian citizens who have arrived in the country have done so in the company of their partners and / or families. In addition, 17% of them came to the country because they had family here.

“This means that the reasons for mobility are no longer solely those of one person or a family member, but entire families. Whole families are coming,” says Juan Carlos Tanus, executive director of Colombians in Venezuela, the organization that conducted the study.

Of these families, 74% of them have children, 67% of which were born in Colombia.

According to figures divulged by the investigation, conducted in 16 states with a sample of 136,600 Colombians, people arrive in bulk because it is cheaper to live in Venezuela.

The reasons for the migration of 75% of those citizens are overwhelmingly economic.

According to Tanus, “the war consumes the entire budget (of Colombia) and people have to go find other means of life in other countries. Seventy-five % moved for economic reasons, but basically these reasons are a product of the development of the war, of the social conflict, because some of those 136,600 people are heads of families who come from areas where the Colombian armed conflict has unfolded.”

Quality of life

In the view of Colombians in Venezuela, their countrymen find in our country opportunities to achieve life goals, plus access to social programs such as medical and food assistance.

“People come with the idea that there is work here, that you can develop a life plan,” said the director of the organization.

The report indicates that a large minority of Colombian migrants (44%) have an average monthly income of Bs 1,600 (US$ 744 comprised of the minimum wage and cestatickets), a product of their work in private institutions (businesses and households).

That amount of money, according Tanus, is enough for them to live on. “It's much cheaper to live as a Colombian immigrant than an ordinary citizen in Colombia,” he reiterated.

Although he clarified that income, or that earned on average by those engaged in informal activities (23%) or those who are self-employed (22%), - which reaches up to Bs 6,000 (US$2790) - does not guarantee high living standards.

However, social programs offset some shortcomings.

According to the second migration study, 67% of Colombian migrants are high school graduates whose demand for higher education can not be covered by the public university system in their own country. However, in Venezuela it's easier.

For a person to complete an undergraduate degree in Colombia, three family members must work to afford college. Meanwhile, in Venezuela there are about 11,700 Colombians linked to processes of higher education through Mission Sucre. [2]

Mission Ribas [3] also allows participation of migrants and also allows assistance for those who do not have Venezuelans identity documents to be regularized. Similarly, 84.5% of the children access primary education even though 65% of them are found to be living in irregular situations.

Among the social programs, Mercal and Barrio Adentro [4] are the best known policies and which the majority of Colombians access to meet their needs.

Residual xenophobia

Despite the 4.5 million Colombians that are now in the country, the product of a migration process of more than five decades, “there is still xenophobia in Venezuela,” Tanus said.

Y es que 89% de la población colombiana migrante no participa en las organizaciones comunitarias, bien sean de tipo social, deportivo o cultural, lo cual afecta la visibilidad del migrante en la comunidad donde vive.

Also 89% of the Colombian immigrant population do not participate in community organizations, whether social, sporting or cultural, which affects the visibility of migrants in the community where they live.

For Tanus, it is essential that Colombians become involved in their community through active participation to overcome this residual xenophobia.

To do this, he thinks participation in social initiatives is necessary as part of the processes of legalisation.

“We can not stabilize the community unless it participates. The community cannot support you if you're not studying, if you don’t participate in the sports committee or in the committee of your apartment block” he emphasized.

Colombians in Venezuela say that participatory processes, independent of the ideological and political behaviour of the migrant citizen, are now beginning to take place throughout the country, which should be taken advantage of to promote integration and breakdown xenophobia.

Migrant Services

The Colombian population in Venezuela has five offices that care for migrants in the states of Monagas, Carabobo, Yaracuy, Barinas and Cojedes, aimed at providing guidance and assistance.

According Tanus, this is one of the greatest achievements of the studies conducted in the country and is a policy that comes from the institutions.

The figures of the second study of human migration show that our country continues mitigating the impact of the armed conflict in Colombia.

“The first country to perceive the effects of war directly and to generate policies to mitigate this effect is Venezuela,” Tanus said.

“Under what conditions would we be if we were not in Venezuela? Under what conditions would a million and a half Colombians, who have migrated in the last 15 years, be living? In the midst of war,” he concluded.

[Sir X]

Immigration to Venezuela Double that of Emigration

By TAMARA PEARSON
TAGS

immigration
Mérida, May 21st 2012 (Venezuelanalysis.com) – Debate over migration has arisen in Venezuela as opposition forces argue that many professionals, businesses, and upper class residents are emigrating from the country, while those aligned with the government argue that Venezuela has become a “pole of attraction”, as the second highest immigrant destination country in South America.

Upper class discontent

Recently, an 18-minute video called Caracas, City of Goodbyes has gone viral on Internet networks. In the video, light-skinned and upper class young Venezuelans who make up a minority of Caracas’ population, talk about how they would like to leave the country.

Venezuela’s private media has also presented reports about a layer of Venezuelans who are “fleeing” the country. Noticias24.com, an online news site, reported in November 2010, “The professionals are fleeing and the Chinese and Haitians are arriving”.

The article argued that because of expropriations and contractions in the economy that year “many rich and middle class Venezuelans” are fleeing and there is an “exodus of scientists, doctors, businessmen, and engineers”.

Conservative daily El Universal argued that for Venezuelan emigrants, “the United States is the goal”, where it says the Venezuelan population has increased by 135% over the last ten years.

El Nacional published an article in April this year with the headline, “Price and exchange controls causing business migration”, and described how toy company Mattel had announced that it would close its office and manage its Venezuelan market from Mexico.

Statistics

However, according to 2010 World Bank statistics, that year 521,500 Venezuelans were living outside the country, compared to 2,122,300 Colombians, 1,367,300 Brazilians, 1,090,800 Peruvians, and 956,800 Argentinians. On the other hand, 1,007,400 people immigrated to Venezuela, the second highest amount in South America after Argentina.

[Sir X]

Man caan suh naive !

[Muadib]

Not sure if you are naive.. phobia is the killer of Critical Thinking however.. when you are over your phobias then you will be able attempt Critical Thinking..

Lee Kuan Yew: Critical Thinking
Michael Manley: Quixotic

Muadib is to X as is Lee Kuan Yew is to Michael Manley..

[Muadib]

Yuh ah big up Latin American and mi identify di man dem rate di highest over the last few years and yuh tun fool..

lol ! Woiee !

Mi tell seh phobia nuh good !

[Sir X]

Greatest in the world , has a heavy migration problem going to its neighbour ranked as one of the wost in the world, that fact flew over your head, yuh want help....hint 5 flights a day,albeit with billions in aid.

yuh frighten easy.They have one thing good going for it , CIA propoganda machine , Colombia ave washington loan on lock ..dem caaan fail....the war on drugs...lol

[Muadib]

Colombia had a lighter 'migration problem' than Venezuela in 2008

Yuh need to update yuh database..

Give up... stop trying to fight Critical Thinking..

lol ! woiee !

[Sir X]

Good , I hope they can keep it up for the sake of Venezuela, dem ave dem own fi deal with.