Thanks in part to spending related to the 2017 Americas Cup, and in part to an upturn in construction, Bermuda’s long recession may end in 2015. However, the strategic challenges facing the tourism sector and (especially) the International Business sector will remain substantial. As a small and very open economy, Bermuda should have derived much benefit from the strong recovery in the US, with which it has strong links. However, the island has suffered from a long recession. There has not been positive GDP growth since 2008. Relative to the island economies of the Caribbean, many of which have larger…

The liberalisation of trade and investment flows between Cuba and the rest of the world is good news for foreign banks (from Spain, Canada, France and Trinidad & Tobago) already providing trade finance services through their representative offices in Havana. Some local Cuban banks and non-bank financial institutions involved with trade finance should benefit too. However, wholesale liberalisation of the banking sector is very unlikely until the authorities have identified a sustainable alternative to the complicated dual currency system and worked out how that alternative should be introduced. In mid-March, press reports indicated that there has been progress in negotiations…

The Brazilian political and economic crisis is taking its toll on the industrial sector. The main problem is caused by low levels of consumer and investor confidence, reflecting the political crisis over corruption, at a time when fiscal austerity measures are restricting demand. Despite this, according to the national statistics institute (IBGE), industrial production rebounded by 2% month-on-month in January, the biggest gain in 19 months. Unfortunately, it looks more like a blip than a trend. The month-on-month jump in January was driven partly by a 9.1% increase in capital goods output, led in particular by higher production of new…

Chile is considered one of the least corrupt countries in Latin America. Yet all of a sudden there are three major cases in the headlines, and an embarrassed government is promising new measures to strengthen ethical standards. The first case, known as the Caval affair, was revealed by the magazine Qué Pasa on 5 February. The state-owned Banco de Chile had lent US$10m to a company called Exportadora y de Gestión Caval. The money was used to buy and then re-sell land in Machalí, generating an almost overnight profit of US$5m. On the face of it, nothing illegal took place.…

Times are relatively hard for a number of regional economies. To differing degrees, commodity and hydrocarbons exporters have experienced falling revenues and fiscal imbalances. Yet a new report by the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) has a rather reassuring message. Public debt levels are low, and the region has “enough fiscal space to apply countercyclical policies and boost production development”, it argues. However, the report, entitled ‘Fiscal Panorama of Latin America and the Caribbean 2015: Policy space and dilemmas’, does draw attention to the fact that income tax in Latin America is a very weak…