Incredulity was perhaps the main international reaction to the news on 11 June that the Nicaraguan government had awarded a virtually unknown Chinese company a 50-year concession to build a new canal across the Central American isthmus, at an estimated cost of US$40bn. A few weeks on, massive question marks remain, but some of the economic arguments are becoming clearer. In brief, the story so far: Nicaragua’s President Daniel Ortega awarded a 50-year concession to build and operate a new canal to HKDN, a new company registered in Hong Kong and controlled by 40-year old mainland China businessman Wang Jin.…

During the course of June, Mexico’s main political parties began positioning themselves for what is shaping up to be the big business debate of the year: the battle over opening up Petróleos Mexicanos (Pemex), the state oil monopoly, to private sector investment. The case for change is strong. The Mexican government depends on Pemex (which generates about 40% of its total fiscal revenue), but Pemex in turn depends on its once-plentiful Cantarell oil fields, which are rapidly depleting. Mexican oil production has fallen every year since 2004, from around 3.4m barrels per day (bpd) to 2.5m bpd now. The country…

In spite of the economic problems of three of its major trading partners – Argentina, Brazil and the European Union (EU), Uruguay’s economy has shown resilience in the recent past. Stubborn inflation is the main challenge, and one that can be solved in the medium term. Over recent weeks, foreign policy initiatives by the administration led by President José Mujica have emphasised a reduction in economic dependence on Uruguay’s partners in the Mercosur trading bloc, in particular Argentina and Brazil. In late May, President Mujica led a large delegation on a four-day tour of China, during which he signed seven…

Although there are of course a wide range of views, the consensus outlook for the Argentine economy over the next couple of years is not particularly encouraging. Here we look at some of the arguments. At one level there was good news for President Cristina Fernández in June. The national statistics institute (Indec), reported stronger-than-expected real GDP growth of 3.0% year-on-year for the first quarter of 2013. This shows a recovery on the low 1.9% growth rate achieved in 2012. Ahead of mid-term elections in October, the Fernández government is particularly keen to get the economy moving. While independent analysts…

Ecuador’s track record in attracting inwards Foreign Direct Investment (FDI) in recent years has been patchy. It is not clear that the new mining law, or official plans to diversify the economy, will change this. In the introduction to its briefing paper on Foreign Direct Investment in Latin America and the Caribbean 2012, published in May 2013, the United Nations’ Economic Commission for Latin America and the Caribbean (Eclac) noted that, “for the third year in a row, the countries of Latin America and the Caribbean continued to attract growing flows of foreign direct investment (FDI). The figures for 2012…

Real annual GDP growth in the first quarter was the lowest in four years, coming in at 2.8%, down from 5.4% in the comparable period in 2012, according to the national statistics department (DANE). Due in part to weaker international prices and strike action in the country’s largest coal mines, the oil and mining industry registered growth of only 1.4% in the first quarter. The manufacturing sector in contrast, hard hit by the effects of a strong peso, contracted 4.1% relative to the year-ago period. The construction sector, boosted by big mining infrastructure projects, grew 17% in Q113. Analysts interpreted…

International interest in quinoa, a traditional grain-like crop cultivated for centuries in Bolivia, has taken off. It has been ‘discovered’ by chefs and health foods enthusiasts in a number of developed countries. Quinoa is being touted as a ‘wonder food’ because its seeds are gluten-free and have a high nutrient content. A species of goosefoot, described as ‘grain like’ and as a ‘pseudo cereal’, it is salt-tolerant and grows in areas of relatively extreme climactic conditions such as Bolivia’s vast Uyuni salt flats. The UN declared 2013 to be ‘International Quinoa Year’, in recognition “of ancestral practices of the Andean…