On 3 September Venezuela experienced one of the biggest power cuts seen in any Latin American country in the last decade. The capital Caracas and 23 states suddenly found themselves with partial or zero electricity supply. About 70% of the country was affected by the outage, forcing much of the economy to grind to a halt and incurring economic losses estimated at up to US$1bn. What caused it? Here we look at some of the claims and counter-claims. President Nicolás Maduro and other government ministers were quick to point the finger at right-wing and US-inspired sabotage. Maduro tweeted that the…

The government in Kingston, the IMF, the ratings agencies and creditors were all making reassuring noises in September. There are indeed signs that the Jamaican economy may be stabilising. But with its massive foreign debt overhang, Jamaica isn’t out of the woods yet. There were two pieces of good news for Prime Minister Portia Simpson Miller in late September. First, the International Monetary Fund (IMF) disbursed a US$30.6m tranche of its four-year US$944m EFF (Extended Fund Facility) programme, signalling that it believes the country is on the right track to overcome its serious economic imbalances. The IMF’s deputy managing director…

In February this year, the government of Honduras successfully raised US$500m in its first international bond issue, astutely taking advantage of the (then) strong global investor appetite for emerging markets risk. The central bank has taken steps this year to strengthen the banking system, which is relatively sound, and the government led by President Porfirio Lobo has introduced a new Investment Promotion & Public Debt Rationalisation Law in order to facilitate foreign investment in key sectors such as telecommunications. Nevertheless, the government's finances remain very fragile. Following the scheduled November general elections, et second election since the June 2009 coup,…

Presidential elections in El Salvador are scheduled for early 2014; congressional elections, for early 2015. The country's political cycle will hamper essential reforms of public finances. Further, other changes are necessary if El Salvador is to emerge from sluggish growth and rampant poverty. The US financial crisis of 2008-09 hit El Salvador hard. Heavily dependent on remittances from workers in, and exports to, the US, El Salvador's GDP contracted by 3.1% in 2009. However, as Chart 1 shows, this was in the context of a very long trend of growth in real GDP that has been sluggish - at just…

The high-quality Cuban cigar you may be about to smoke may be, well… not exactly Cuban. The authorities in Havana have become concerned that their cigars are being pirated. According to Opciones, a Cuban business magazine, a number of ‘false Cuban cigars’ were recently confiscated by police at a range of retail outlets in San José, Costa Rica. As the producer and exporter of what are often described as the best cigars in the world, Cuba has strong business reasons to want to protect this particular brand. Opciones was therefore eager to point out that genuine Cuban cigars have a…

In August Starbucks, the US retail coffee giant, announced plans to open its first store in Bogotá in 2014, building up to around 50 outlets across Colombia by 2019. The move is a potentially serious challenge for the locally owned Juan Valdez retail coffee chain. At one level the battle for Colombia’s retail coffee bar market could be a David and Goliath affair. Starbucks of course is Goliath. After launching in Seattle in the early 1970s, the US company now has over 20,000 outlets in 62 countries. Its 2012 net revenue was US$13.3bn, up by 13.6% on the previous year.…

After the spread of mass anti-government protests in June, the government led by President Dilma Rousseff took a series of urgent steps to respond to criticism over poor public services and health care. One of them was the Mais Médicos programme, relaxing immigration and licensing rules to attract foreign doctors who are being offered BRL10,000 (around US$4,500) a month to work in remote and poor areas of the county. Up to 4,000 are coming from Cuba. The programme has attracted intense controversy. Supporters of the programme argue that Brazil has too few doctors, and that those it has are often…