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PERU | Trade with Apec countries at record high. Trade between Peru and the countries of the Asia-Pacific Economic Cooperation (Apec) reached a record high of US$58bn in 2018, according to the head of the foreign trade and tourism ministry, Edgar Vásquez. “Apec is the most important market for Peruvian exports [62% of the total],” Vásquez said. “In 2018, exports to Apec verged on US$30bn, a record amount,” he added. Peru exported minerals (63%), agricultural products (11%), oil and gas (9%), fishing products (8%) and textiles (3%); and for a value of over US$27bn it imported metal-mechanical products (37%), chemical products (17%), and oil (14%), among other things.

• Apec

Peruvian exports to Apec countries grew by 11% thanks to increased exports to Japan (+16%), South Korea (+15%), the US (+14%) and China (+14%). Of these, China received 44% of all exports, the highest proportion. Exports to Chile, Taiwan, and Mexico also increased, by 18%, 11%, and 6% respectively, while they decreased by 23% and 12% respectively to Canada and Australia. Theses nine countries absorb 97% of Peru’s total exports.

ECUADOR | Protests on two fronts. The government led by President Lenín Moreno is facing simultaneous protests from the umbrella trade union movement Frente Unitario de los Trabajadores (FUT) and from Huaorani indigenous groups.

On 17 May, the FUT called for a national strike to protest against a new labour reform proposed by the national jobs and salaries committee (CNTS). The reform will allow the 40-hour working week to be distributed across four to six days; extend the employee probation period from three months to three years for new businesses; and eliminate the 35% surcharge on casual contracts.

The FUT released a statement objecting to the reforms which it claimed would allow the exploitation of thousands of workers, and calling for a strike against “the government’s appeasement of the International Monetary Fund [IMF] and the neoliberal politics of business owners and bankers”. The union’s president, Mesías Tatamuez, stated in a press conference that if employees are made to work at the weekends, they should be paid overtime. The CNTS labour reform proposals follow the US$4.2bn deal struck with the IMF in March designed to tackle Ecuador’s growing debt while creating new jobs and offering protection to the poor.

Just the day before the FUT announcement, Quito was the stage for protests by the Huaorani indigenous group who in April this year won a landmark case against the government for violating the prior consultation mechanism in 2012 in the award of an oil concession on their ancestral lands. On 16 May protesters marched on the energy ministry to demand the ratification of a court ruling in favour of the Huaorani on 26 April. The energy ministry, however, is appealing the ruling.

Unable to advance his investment and tax reforms in congress, Ecuador’s President Guillermo Lasso is attempting to implement his liberalisation agenda from the executive branch. This includes a reinforced emphasis on trade agreements, with bilateral talks currently advancing on four fronts: with China, Mexico, South Korea, and Israel. The government has an ambitious list of at least 10 priority countries for agreements. However, reaching any free trade agreements (FTAs) will depend not only on the administration’s zeal, but also on its counterparts on the other side of the negotiating table and on the extent of domestic opposition.

Ecuador’s dependence on exports, which are its primary source of foreign exchange, has made ensuring access to external markets a priority for all recent governments. This includes the Rafael Correa administration (2007-2017), which, despite pursuing a ‘closed’ economic model, signed a hugely significant FTA with the European Union. The Lasso administration, however, has outlined a particularly ambitious trade agenda. It has named 10 priority countries with which it seeks trade deals: the US, China, South Korea, Mexico, Israel, Japan, Canada, the Dominican Republic, Costa Rica, and Panama. Russia was formerly on this list, but the Lasso administration has indicated that a trade agreement is no longer on the cards following Russia’s invasion of Ukraine.

Nonetheless, during the majority of Lasso’s first year in office, government efforts were primarily focused on passing domestic economic reforms. Trade negotiations were largely limited to continuing talks with Mexico, started under Lasso’s predecessor, Lenín Moreno (2017-2021). However, the domestic reform agenda has stalled amid fierce opposition from congress, with the government currently redrafting its flagship investment bill after it was rejected in late March.

Facing stiff obstacles at home, the government has refocused its energy into trade policy, over which the executive branch has significant discretion. Bilateral talks on the scope of a possible FTA with China have been advancing, after Lasso and China’s Xi Jinping signed a memorandum of understanding (MoU) to initiate negotiations in February. Meanwhile, formal negotiations with South Korea are set to begin towards the end of May, while during a visit to Jerusalem on 11 May, Lasso and Israel’s President Isaac Herzog signed an MoU to begin negotiations for an FTA. Finally, negotiators are awaiting a date for the final round of negotiations with Mexico, which if successful will also secure Ecuador’s entry into the Pacific Alliance trade bloc, comprising Mexico, Chile, Colombia, and Peru. The government’s list of proposed targets for trade agreements continues to grow, with Lasso raising the possibility of an FTA with Uruguay during a visit to Montevideo in April.

Whether agreements can be reached, however, depends not only on the Lasso administration, but on its international counterparts and on the political opposition at home, which could block the ratification of deals in the legislature. The Mexico negotiations have clearly exemplified the former challenge, with progress grinding to a halt over Mexico’s reluctance to include shrimp – one of Ecuador’s stellar exports – in the agreement. In terms of domestic resistance, this has been most acute regarding talks with China, amid fears that Ecuador’s textile and manufacturing sectors will be undercut [EB-21-10]. Similarly, Lasso also faced a strong backlash from Ecuadorean farmers following his suggestion in Montevideo that Uruguay could export dairy and beef to Ecuador, prompting an apology from the president. These examples no doubt serve as a precursor of difficulties that are yet to come.

MEXICO | Inflation falling back. Mexico’s inflation in the 12 months ending in November fell by more than half a percentage point to 7.80%, according to data released by the national statistics institute (Inegi) on 8 December.

This is the second consecutive month that annualised inflation has fallen in Mexico. It fell from 8.70% in September, the highest figure since 2000, to 8.41% in October.

The consumer price index (CPI) in November was 0.58%. Underlying inflation, which filters out the volatility in headline inflation, stood at 0.45% in November, Inegi reported. Significantly, underlying inflation increased to 8.51%, however, in the 12 months ending in November from 8.42% a month earlier.

The cost of the basic basket of goods, which includes 176 products, increased by 0.67% in November and 8.45% annually. Agricultural prices fell by 0.42% in November but remain 8.89% higher than the same month in 2021, Inegi said.

The inflation data was published one week before the central bank Banco de México (Banxico) discusses whether to lift interest rates, something it has done on 12 consecutive occasions, reaching a record 10%. It is aiming to bring inflation back down to its target of 3% by the third quarter of 2024.

President Andrés Manuel López Obrador has been critical of Banxico’s single-minded focus on bringing inflation back down to its target range, arguing that, while he respects its independence, it should attach equal significance to the need to reactivate economic growth as higher interest rates result in more expensive credit.

On 1 December Ecuador’s mining and energy ministry announced, in collaboration with the Inter-American Development Bank (IADB), plans for a roadmap to the production and use of green hydrogen. The main objective of the plan is to create a competitive and environmentally friendly source of energy, in line with global interest in reducing the emission of greenhouse gases. Ecuador’s move to incorporate green hydrogen in its energy portfolio follows a similar decision from Colombia – the Andean country with the clearest plan for green hydrogen, where the ball was set in motion under President Gustavo Petro’s predecessor, Iván Duque (2018-2022). Bolivia, too, is exploring the feasibility of becoming a green hydrogen producer in order to reduce its reliance on fuel imports.

Green hydrogen gets its name because it is produced by splitting water through electrolysis, meaning that the only waste product generated is oxygen. This is in contrast to the more usual method of generating hydrogen through splitting natural gas, which results in carbon dioxide being produced and then either captured or released into the atmosphere. To be truly green, the electrolysis used for green hydrogen generation is usually powered by renewable energy sources, such as wind or solar power. As a result, green hydrogen has the potential to significantly boost a country’s renewable energy capacity whilst also slashing its emissions.

According to a February 2022 report from the World Economic Forum (WEF), hydrogen could account for up to 12% of global energy use by 2050, and whilst the key global producers of hydrogen are expected to be large economies such as China, Japan, the US, and the European Union, the generation of green hydrogen is expected to benefit net energy importers such as Chile, which are looking to divest from fossil fuel imports and turn to exporting green hydrogen.

At the announcement of the green hydrogen initiative, Enith Carrión, the vice minister for electricity and renewable energy, declared that Ecuador was joining other Latin American countries such as Chile, Uruguay, Costa Rica, and Colombia in looking to add green hydrogen to its energy matrix. She described it as an opportunity to decarbonise key sectors of the economy, including industry and transport, and in doing so to increase sustainability, reduce reliance on fossil fuels, and reduce Ecuador’s emissions of carbon dioxide and methane. As yet, the roadmap to green hydrogen in Ecuador is at the outline stage, with promises to flesh out details on how the transition to cleaner renewable energy sources will be funded and implemented.

The Colombian government, then led by Duque, presented its own roadmap for green hydrogen production in September 2021, as part of a stated aim to achieve carbon neutrality in Colombia by 2050. Colombia has been touted as one of the green hydrogen markets with fastest growth potential globally, thanks in part to favourable conditions for generating renewable energy, as well as a government policy that offers clear incentives for investors in this domain.

Colombia is estimated to have the potential to generate more than 25 gigawatts (GW) through onshore wind farms and more than 45 GW of solar power. Among the stated objectives in the green hydrogen roadmap is that by 2030 Colombia will have 3 GW of electrolysis capacity. In the same time period, the production of blue hydrogen – produced from natural gas, with the resultant carbon dioxide being captured and stored – is to reach 50 kilotonnes. Another measure of a successful transition towards cleaner hydrogen production will be whether Colombia meets its target of ensuring that 40% of the hydrogen produced in the country is low-emission by 2030. The roadmap outlines plans to seek investment of US$2.5bn-US$5.5bn in the decade from 2020-2030 in order to achieve these aims; this investment is expected to generate between 10,000 and 15,000 jobs in the sector.

Building on the 2021 roadmap, in April 2022 the Duque administration published its regulations governing the use and production of hydrogen, including its use in electricity generation, how it can be stored, and its role in decarbonisation. It was specified at this time that the mining and energy ministry would share responsibility for the regulation of hydrogen with the environment ministry. In June 2022, the-then mining and energy minister, Diego Mesa, announced that green hydrogen and blue hydrogen projects could benefit from the same tax exemptions as non-conventional renewable energy projects.

For Colombia, the interest is not just in generating low-emission hydrogen for domestic use, but also in becoming a major exporter; the hope is to be serving the internal market by 2030, and the global market by 2050. A June 2022 report from the International Energy Forum (IEF) named Colombia as one of four probable hydrogen exporters in Latin America, alongside Brazil, Chile, and Argentina, whilst the International Renewable Energy Agency (IRENA) has predicted that Colombia has the capacity to generate the fourth-lowest global price for hydrogen, after China, Chile, and Morocco. 

In July 2022, the Colombian government announced that ten pilot projects relating to blue and green hydrogen production and distribution had been approved, with a total investment of US$6.57bn. Among these are a pilot investment of US$6m from state-owned oil company Ecopetrol to start green hydrogen production at its Reficar refinery in Cartagena. Ecopetrol has also selected six international companies, including Total Eren (France), Siemens Energy (Germany), and Mitsui (Japan), to support with green hydrogen projects, whilst H2B2 (Spain), Empati (UK), and EDF (France) have been selected as ‘strategic allies’. Promigás, the Colombian natural gas distributor, also announced a five-phase project to produce and distribute hydrogen through its pipelines.

In addition, in December 2022, various Colombian ministries – now under the leadership of President Gustavo Petro – participated in a binational dialogue with their German counterparts on the topics of energy transition and decarbonisation, with the objective being for Colombia to benefit from German funding and technical support in its transition to becoming to a low-emission economy, in exchange for future export of energy to Germany. The Colombian government is also hopeful of future export agreements for its hydrogen with Asian, European, and North American markets.

Bolivia is also exploring avenues to join the pack of green hydrogen producers in Latin America. President Luis Arce’s government announced in November 2022 that it is seeking companies interested in carrying out an initial study on the feasibility of green hydrogen production in the country, with the aim of developing a pilot project in the 5 megawatt solar farm in the city of Cobija, Pando department, operated by Ende Guaracachi – a subsidiary of the state-owned electricity company Ende. The aim would be for the hydrogen to be used at the Bahía thermoelectric plant, also located in Cobija. In addition to the environmental benefits of using green hydrogen in power generation, Ende highlighted the economic advantages of reducing the need for diesel imports and fuel subsidies.

Although Colombia is a clear leader in the region for the adoption of green hydrogen, the potential advantages of this energy source are increasingly being embraced by governments across Latin America and the Andean region.

VENEZUELA | Disappointing start to 2023 for Venezuela’s economy. The Observatorio Venezolano de Finanzas (OVF), an economic think tank, has estimated that economic activity in Venezuela fell by 8.3% in the first quarter of 2023, compared with the same period in 2022. The OVF said that the decrease can be explained by a “deceleration in the production of goods and services which had been increasing since the second quarter of 2022”.

The International Monetary Fund (IMF) has forecast that Venezuela’s GDP growth in 2023 will stand at 5% – the second-highest growth rate in South America after Guyana, where GDP is forecast to increase by 37.2% due to significant oil discoveries.

BRAZIL | Copom unlikely to intensify interest rate cuts. The monetary policy committee (Copom) of Brazil’s central bank (BCB) decided to lower the benchmark interest rate (Selic) from 13.25% to 12.75% in its 19-20 September meeting. In the meeting minutes released on 26 September, Copom continued to urge caution going forward.

 All nine Copom members anticipated rate cuts of 0.50 percentage points in the next meetings and stated that there was a “low probability of an additional intensification in the pace of adjustment”. For the committee to gain more confidence in the prospect of lowering inflation, “a significant change in the fundamentals of inflation dynamics” would be required.

BRAZIL | Agreements signed with Vietnam. A Vietnamese delegation led by Prime Minister Pham Minh Chính visited Brasília on 25 September and met Brazil’s President Luiz Inácio Lula da Silva. Lula and Pham, as well as officials from each government, signed four bilateral agreements aiming to boost agricultural cooperation; defence cooperation; to facilitate opportunities for studying abroad for students from both countries; and to set up diplomat training programmes.

In his speech, Lula also welcomed Vietnam’s interest in discussing a future trade deal with the Southern Common Market (Mercosur), the rotating presidency of which Brazil currently holds, and called for stronger ties between Mercosur and the 10-member Association of Southeast Asian Nations (Asean).

Speaking at a press conference on 5 June, Uruguay’s President Luis Alberto Lacalle Pou recognised that there is “huge concern” in government about the country’s murder rate. The president made these comments after journalists questioned him about a high-profile shootout the previous week, prompting him to admit, in his final year in office, with general elections due in October, that his government has struggled to significantly reduce homicides since the figure peaked in 2018.

Insecurity has been among the top public concerns over the past year. In the latest survey by national pollster Factum, on public concerns, released in April this year, 53% of respondents ranked insecurity as the top concern, followed by the economy (34%) and education (11%). Between May and November 2021,

insecurity had ranked as the third highest concern, behind education and the economy. It overtook education to become the second highest concern in November 2021 and eventually surpassed the economy as the top concern in the second half of 2023. Even though total homicides in 2023 (382) were marginally lower than the homicide figure of the previous year (383), perceptions about crime seemed to change for the worse in the second half of last year.

In the 5 June press conference, Lacalle Pou said that other crimes such as “theft, robbery, [and] cattle rustling have come down,” but he went on to highlight that “we could not manage it with homicides”. Public concerns regarding violent crime intensified following high-profile killings on 30 May in the neighbourhood of Maracaná, in the west of the capital Montevideo. The incident left four dead: a 40-year-old man, two teenagers, and an 11-year-old boy. Suspects have been arrested in relation to the murders, but police are yet to confirm the motives. National daily El País has cited residents in Maracaná as suggesting that some of the victims had gone down “the wrong path”, that is, organised crime. This supports a line of investigation that the murders were perpetrated by contract killers as part of a gang-related feud.

On 15 June El País published a report citing police officials as highlighting the rise of “spontaneous gangs” in “peripheral neighbourhoods” of Montevideo, such as Maracaná and Piedras Blancas. The police describe these as small gangs, with some only comprising three or four teenage boys and young men, which are involved in murders, robberies, and drug trafficking, but they do not have the same level of structure and organisation as established, professional criminal groups. The so-called spontaneous gangs reportedly convene for a specific crime or series of crimes and then disband after the project is completed.

Lacalle Pou and the governing coalition led by the centre-right Partido Nacional (PN) have prioritised tackling organised crime, but public security experts have argued that too much emphasis is being placed on the activities of professional drug trafficking organisations (DTOs). In January this year, the interior ministry released a study about homicide classification carried out in partnership with research groups such as Uruguayan think tank Centro de Informaciones y Estudios del Uruguay and Brazilian think tank Laboratório de Análise da Violência. The study analysed homicide figures in Uruguay from 2012-2022 and found that authorities were categorising murder cases under labels which are too broad such as ‘drug trafficking’. The report suggests that the over-attribution of murders to these vague labels might be hindering an effective policy response based on a full understanding of what motives might cause homicides and violent crime, such as local, personal feuds rather than disputes between major gangs over territory for drug trafficking.  

Maracaná murders

The police believe that the homicides on 30 May in the Maracaná neighbourhood of western Montevideo was a targeted assassination rather than a robbery. The victims were shot dead in their home. One of the victims, a 40-year-old man, had a criminal record, having previously been convicted of robbery and had served his time. Police detectives are reportedly investigating whether this crime was related to any feuds between drug trafficking groups, but none of the victims have any known ties to gangs.

The Cuban economic crisis is grinding on. Without prior warning, the government said last week that because of a scarcity of flour, bread rolls will henceforth be reduced by a quarter in weight, from 80 grams down to 60 grams.

The government has endeavoured to put a brave face on a deeply unpopular measure. It is also reducing the price of the standard bread roll by a quarter, bringing it down to 75 cents of a peso (less than 1 US cent at the official exchange rate). It has used the familiar claim that flour shortages, along with most other setbacks, reflect the “intensification of the blockade imposed by the US government”.

The ministry for the food industry claims the country has “a volume of flour that could provide continuity”, meaning that the restrictions could perhaps last “a few days”. Indeed, this is not the first time such restrictions have been introduced: in September last year in parts of the country bread rolls were “shrunk” from 80 to 50 grams. 

Over the years the ration book, known as the libreta and used to purchase a whole range of subsidised essentials – once the pride of the revolution - has begun to be seen as increasingly anachronistic, used by very few other countries in the world, North Korea being one. In its heyday the Cuban libreta could be used to purchase deeply discounted bread, fish, meat, milk, and cleaning and toiletry items. But the list has been sharply purged as the economic crisis rolls on and the scarcity of foreign exchange puts many goods out of reach of the population.

Bread can still be acquired through the private sector and at significantly higher prices. Shortages of food, fuel, and medicine continue. There are regular power cuts, which in mid-September were affecting about one-third of the country.

In a comment more likely to anger than to reassure the general population, the government said that despite the smaller size the quality of its bread rolls would remain untouched. But a bread buyer in Havana told Reuters news agency that “The quality is terrible. The flour tastes like acid.” Independent media outlet 14ymedio says the poor taste is due to “extenders” having been used to make the flour last longer. It adds that for decades rationed bread has been very hard, goes stale quickly, and has both poor texture and flavour. In May of this year there were complaints that the bread had a sandy texture and crumbled in the mouth. At that point the government acknowledged that there were “impurities” in the flour but insisted it was still fit for human consumption.

UN assistance

Earlier this year Cuba sought the help of the United Nations World Food Programme (WFP) to guarantee subsidised powdered milk for babies, another item recently in short supply. According to the WPF, Cuba currently spends around US$2bn a year to import food, representing around 80% of its total consumption needs.

Trade embargo

The Cuban delegation claimed that in the 12 months to February 2024, US sanctions caused economic losses to Cuba totalling US$5.06bn. Foreign Minister Rodríguez called on US President Joe Biden on 12 September to lift the decades-long embargo “immediately”. He said the sanctions were part of an “economic war” of “genocidal characteristics”.

US sanctions blasted again

Foreign minister Bruno Rodríguez is in New York for the annual United Nations General Assembly. Rodríguez will use the forum as is customary to deliver a speech condemning the US trade embargo, or ‘blockade’ as Cuba prefers to call it. He will also rally support for an annual resolution (always strongly backed) condemning the embargo.

Rodríguez said on social media on 20 September that he would highlight the economic cost to Cuba of the trade embargo. He insisted that the economic crisis, power cuts, medicine, and fuel shortages were “fundamentally and decisively” caused by the US trade embargo, although he acknowledged that “faults in macro-economic policy” may have played a secondary role.

Rodríguez also demanded that Cuba be removed from the US list of state sponsors of terrorism. Some 600 parliamentarians from 73 different countries signed a letter produced by the left-wing international political organisation Progressive International urging their respective governments to pressure the US to remove Cuba from the list.

The spokesperson for the German foreign ministry, Christian Wagner, said on 25 September that the German government and partners in the European Union (EU) support Cuba’s removal from the list. Wagner said it would also constitute “an important step in improving the social-economic situation in Cuba”.

Panama’s President José Raúl Mulino is forging ahead with plans to overhaul the state social security system Caja de Seguro Social (CSS), which is running a huge deficit and providing poor service to patients.

In a 20-minute televised address to the nation on 12 September, Mulino highlighted numerous problems with the CSS, such as delays in surgical treatment, a lack of medical supplies to carry out operations, and the “inhumane” treatment of patients. Mulino, who took office on 1 July, also said that the growing deficit at the disability, old age, and death benefit system (IVM) of the CSS, which reached US$673.5m at the end of 2023, needed to be addressed urgently, and that a backlog of 19,350 surgical operations demonstrated that “the system [had] collapsed” with the delays in treatment “bordering on criminal”. 

In his first televised address as president, Mulino said the CSS was in “a terminal state” but could be saved by means of “a structural reform” that would modernise services through digitalisation, “end the rampant corruption that is reigning” and remove cronyism and the influence of party politics from the system. During his morning press conference on 19 September, he again criticised what he called a “mafia” that has become embedded in the CSS. 

As for solutions, Mulino has announced the launch of a new unified procurement system, ‘Compra Única’, between the health ministry and the CSS, which he said would help address a lack of medical supplies. On 8 August he announced a multi-sector dialogue to come up with proposals to improve the system, which had its first meeting on 16 September, and announced that Dino Mon, an actuary, would become the new director general of the CSS from 1 October. Mulino has also emphasised that the CSS would not be privatised, a proposal which would likely spark social unrest, and ruled out raising the retirement age, which would also be politically unpopular. Indeed the need to strengthen the CSS (without privatising it) was also a demand of protesters who staged massive social unrest in 2022, sparked by the cost of living.

Setting up a dialogue with key sectors may be a smart way to head off potential protests, but fixing the issues with the CSS will not be easy as its problems are longstanding and solutions have evaded previous governments. However, the problems risk coming to a head during Mulino’s time in office, and international credit ratings agencies Fitch, Moody’s, and Standard & Poor’s have all mentioned the CSS as a contributing factor in recent downgrades, upping the pressure to steady the ship.

Concerns have also been expressed by the International Monetary Fund (IMF) which said that “action must be taken” to address the deficit in the CSS’ defined benefit in a statement in June. The Fund added that the CSS will “run out of resources in late 2025 and faces deficits in the order of magnitude of 1.5%-3.0% of GDP annually during the coming years.” This will add to budgetary pressures caused by the closure of the massive Cobre Panamá copper mine in December 2023, which accounted for around 5% of GDP.

Looking ahead, Mulino has set a deadline of 31 October for reform proposals to be submitted. After this, the government will send a bill to the legislative assembly, which will hold extraordinary sessions in November and December in an attempt to pass new legislation as quickly as possible. Nonetheless, Mulino may find it difficult to get the bill through without major concessions given the fact that his right-of-centre Realizando Metas (RM) party holds only 14 of 71 seats in the unicameral legislature.

Economy picks up

Panama’s GDP grew by 2.5% year-on-year in the second quarter of 2024, according to figures released by the national statistics institute (Inec) on 16 September. The economy grew by a meagre 1.8% in the first quarter, the lowest quarterly growth since the coronavirus (Covid-19) pandemic. Economic growth in the second quarter was driven by construction (+6.3%), agriculture (+3.1%), retail (+4.6%), and hotels and restaurants (+10.3%). The manufacturing sector contracted by -3.2%. The economy grew by 2.2% year-on-year in the first six months of 2024. 

Argentina’s state-controlled energy company YPF on 10 October finalised a technical agreement with Italian oil giant Eni that marks a milestone in what is to become the country’s largest project to export liquified natural gas (LNG). Vaca Muerta, the 30,000km² region between the vineyards of Mendoza to the north and the ski slopes of Bariloche to the south, is the world’s second-largest shale gas deposit. The agreement involves awarding contracts for the design of a pipeline that will connect Vaca Muerta with the coast of the Río Negro province, and of gas treatment plants as well as floating liquefaction units. Together the installations are expected to produce 12m tonnes (t) of LNG per year starting sometime before 2029.

Horacio Marín, YPF’s president and CEO, billed the accord as a “decisive step in Argentina’s energy transformation” and one that would make the company a “major player” in the global LNG market.

It is the last and largest of three projects that make up the Argentina LNG plan, which aims to export 30m t of LNG per year. The first and smallest of the three will be developed by Southern Energy, a consortium led by Pan American Energy, and including YPF, Pampa Energía, Harbour Energy, and Golar LNG. Exports are to begin in 2027 with an eye on the Brazilian market. Finally, there is the partnership between YPF and Shell, the so-called Phase 2.

Large-scale gas exports could be a game changer for Argentina’s long-troubled economy. Currently the country has few sources of foreign currency to boost its international reserves and strengthen its currency, outside of beef and soy exports or tourists from abroad. Argentina in just over five years could produce around 250 million cubic metres (mcm) of gas per day (or 50m t per year), according to a 2024 report by the global consultancy PwC. Together with oil exports that would generate a surplus of the energy trade balance of US$30bn.

According to Argentina’s energy secretariat, the country has sufficient gas reserves to meet its domestic needs for the next 160 years or to export as much as it consumes for at least six decades.

Already, the about-turn has been remarkable. Up until 2024 Argentina still imported gas from Bolivia. Starting in April of this year, it started exporting gas from Vaca Muerta to Brazil via Bolivia using the Gasbol pipeline and the newly refurbished Gasoducto Norte. Exports are to increase to 30mcm by 2030.

Underlying the development of the oil and gas market is the Javier Milei administration’s deregulation of the commercialisation of hydrocarbons, which essentially allows private investors and operators to sell oil and gas abroad without prior authorisation or any other intervention from the government.

The development of Vaca Muerta enjoys support across Argentina’s political spectrum and is likely to continue regardless of who is president. Even so, the country’s still delicate economic condition and the Milei administration’s revised energy policies do impact the speed with which projects are carried out. Particularly, credit and currency restrictions are hampering small and mid-sized suppliers in the industry. YPF’s sale of conventional and mature oil fields have also put operations on hold as the new owners take stock of operations.

Pipeline upgrade

Argentine gas pipeline operator Transportadora de Gas del Sur (TGS) won a public tender in October to upgrade the Perito Moreno gas pipeline (previously called the Néstor Kirchner pipeline), so it can pump a total 35mcm of natural gas, up from currently 21mcm. The US$560m project will improve the trade balance by US$700m. The expansion project has been earmarked to benefit from Milei’s RIGI program, which grants tax benefits to attract major investment projects.

Seven magistrates in Nicaragua’s supreme court (CSJ) have resigned within a matter of weeks since 20 November. The departures are in line with a purge of the judiciary (which like all of the country’s institutions is controlled by co-presidents Daniel Ortega and First Lady Rosario Murillo) which began in October 2023 [SSR-24-02]. This in turn has been attributed to efforts by Murillo to appoint allies loyal to her at the CSJ as she positions herself in the line of succession to take over from her 80-year-old husband, who reportedly suffers from lupus and kidney failure.

The resignations began on 20 November, when two justices, Yadira Centeno and Ellen Lewin, quit citing health reasons. Five days later, three others tendered their resignations – Virgilio Guardián, Armengol Cuadra López, and José Manuel Martínez Sevilla – also purportedly for health reasons or for having reached retirement age. Then on 28 November a sixth justice, Armando Juárez, resigned citing old age while on 3 December, the seventh, Marvin Aguilar, the former acting head of the CSJ (2023-2025), tendered his resignation. The resignations were immediately accepted by the Frente Sandinista de Liberación Nacional (FSLN)-controlled unicameral 92-member legislature without question.

Reportedly, over 1,600 judicial officials have been dismissed since the start of the purge in what is seen as an attempt by Murillo to strengthen her position. This has been bolstered by the constitutional reform package which took effect last year, which promoted her from vice president to co-president and also reduced the judiciary and legislature to entities “coordinated” by the co-presidents [SSR-25-01]. Notably the reforms also reduced the size of the CSJ from 16 to 10 magistrates, presumably making it easier to control the court.

The Ortega-Murillo executive has acted swiftly in naming replacements which were rubber-stamped by the legislature. Five were sworn in on 27 November: Ana Julia Guido Ochoa, who was serving as the country’s attorney general; two appeals court magistrates Octavio Rothschuh and Ernesto Rodríguez Mejía; Shura Bonilyn Welcome Crawford, a district judge in Bluefields, the capital of the South Atlantic autonomous region (Raas); and José Manuel Fuertes Toledo  who Costa Rican-based Nicaraguan investigative outlet Confidencial reports is a member of the departmental electoral council in Boaco department and had served as the FSLN’s political secretary in Boaco up to June 2025. On 28 November and 4 December appeals court judge Rosa Argentina Solís Dávila and María Elsa Frixione Ocón, a prosecutor, were then sworn in, respectively.

According to a 2 December article published in Confidencial, the appointments represent the establishment of a new ‘Murillista’ CSJ that will directly answer to Murillo. Local jurists interviewed by Confidencial said the new court would continue to lack any independence to carry out its functions. One explained that things will remain as they are currently and there will only be a “change in face, Rosario Murillo is now going to centralise and decide on absolutely everything”.

Several of the new justices have previously been blacklisted by the US for human rights violations. Guido was sanctioned in 2020 for fabricating cases against political prisoners as well as being identified by the United Nations-appointed panel of human rights experts on Nicaragua (GHREN) in a report last year as being among 54 top officials responsible for alleged grave human rights violations, abuses, and other crimes in Nicaragua. Meanwhile Rothschuh, Rodríguez, and Solís were blacklisted by Washington in 2023 over decisions which stripped Ortega opponents of their citizenship [SSR-23-04].

Political prisoners

On 5 December the US Department of State’s Bureau of Western Hemisphere Affairs demanded the release of political prisoners detained in Nicaragua. In a post on social media, it stated that “This holiday season, too many Nicaraguans will look across their tables and see empty seats where loved ones should be, women and men unjustly detained or arbitrarily disappeared by the Murillo-Ortega dictatorship. Their pain and uncertainty are daily reminders of the regime's inhumanity. Release all Nicaraguan political prisoners now. The United States is watching.” According to data from local human rights observatory Mecanismo para el Reconocimiento de Personas Presas Políticas (MRPPP), as of 23 December at least 62 government critics were currently incarcerated within Nicaragua, with the MRPPP having recognised a total of 1,485 political prisoners since 2018, when the government began its brutal crackdown on dissent.

MEXICO | China concludes investigation into tariff hikes. China’s ministry of commerce announced on 25 March that it had concluded an investigation into Mexico’s “restrictive” trade measures against the country. The commerce ministry stated it had found the measures to constitute “trade and investment barriers” and that it had the right to take countermeasures.

China initiated the investigation in September 2025, after President Claudia Sheinbaum announced plans to increase import tariffs on products from countries with which Mexico does not have a free trade agreement, primarily affecting China. Mexico’s congress passed a bill to impose tariffs of between 5% and 50% on some 1,463 products from non-free trade partners on 10 December, with the measures taking effect at the start of this year.

In its conclusions, China’s commerce ministry said that the import duty hikes affect more than US$30bn worth of Chinese exports to Mexico and could lead to estimated losses ​of around US$9.4bn to China’s mechanical and electrical sectors, as well as similar losses for the automotive sector.

In addition to the tariffs, the ministry noted that supplementary measures – including protracted customs clearances and stricter application of rules of origin – could also constitute “direct or indirect discrimination or restrictions” on Chinese imports.

MEXICO | Teachers end strike. Mexico’s influential teachers’ union, Coordinadora Nacional de Trabajadores de la Educación (CNTE), held a 72-hour strike from 18-20 March. The union is demanding the repeal of several education-related reforms and a 100% salary increase, inter alia.

The CNTE announced the end of the strike on 21 March saying that President Sheinbaum had declined to meet them, instead offering dialogue via the education and interior ministries. It warned that further protest action would take place, including a strike to coincide with Mexico’s hosting of the Fifa football World Cup in June.

At the beginning of March, the International Organization for Migration (IOM) and the Caribbean Community (Caricom) hosted its 10^th in a series of ‘Conversations on Migration in the Caribbean’, with the focus on ‘Migration and the Caribbean Workforce’. The strong message emerging from the discussions was that a combination of an aging population, declining birth rates, and outward migration is resulting in labour and skills shortages, particularly in sectors such as healthcare, education, construction, agriculture, and public services. Central to the discussion was an early 2026 International Labour Organization (ILO) study on ‘Free movement of persons in the CARICOM region: A labour market analysis’.

In his introduction to the discussion, IOM’s Caribbean Coordinator Patrice Quesada described the demographic changes in the Caribbean as “basically a time bomb”. He said: “The demographic decline is probably one of the most existential threats together with climate change that is affecting the Caribbean space”, and he argued that a discussion around labour needs, and the role that migration can play, is “extremely important”.

Migration within Caricom is regulated by the 2001 Revised Treaty of Chaguaramas which led to the creation in 2006 of the Caricom Single Market and Economy (CSME). Members, with the exception of The Bahamas, committed to the goal of free movement of nationals within Caricom. Haiti is also a partial exception due to a lack of institutional and administrative capabilities. Initially the agreement covered only skilled workers, although in July 2025 Barbados, Belize, Dominica, and St Vincent & the Grenadines agreed to free movement for their respective nationals without the need for a work or residency permit. There is also a deeper arrangement for free movement within the Eastern Caribbean Economic Union (ECEU) established by the member of the Organisation of Eastern Caribbean States (OECS).

Under Caricom rules, all nationals have the right to stay in other Caricom member states for six months, but this does not automatically include the right to work or provide services. Those defined as undesirable can also be excluded. However, key categories of skilled workers are allowed to seek employment in CSME member states without a work permit, including university graduates, artists, musicians, sports persons, media workers, nurses, teachers, qualified artisans, domestic workers, agricultural workers, and private security personnel. Skilled workers can apply for a Caricom Skills Certificate as proof of their eligibility.

For the ILO, the central message of its study is that well-governed labour migration “can be a powerful driver and enabler for realising decent work, economic development, and regional integration”, but better coordination is required within Caricom, along with an effective skills recognition system and “robust protection of migrant workers’ rights”.

There are a number of special factors that impact upon the free movement debate within the Caribbean, including large disparities in per capita income (ranging from circa US$2,500 in Haiti to US$39,500 in The Bahamas) and in population (from 12m in Haiti to 50,000 in St Kitts & Nevis). Haiti accounts for 8m of the region’s 14m working age population and 60% of the region’s 8.8m workforce. Another key factor is that the combination of population aging and net outward migration is expected to result in population decline in nine Caricom member states, as illustrated in Table 1 below. Here again, however, Haiti is the exception. Its labour force grew by an average of 4.1% per annum from 2000-2024 compared with 0.6% per annum for the rest of the Caricom region.

Population growth rates, by Caricom member state, 2000-2025 and forecast 2025-2030 (%)

Source: United Nations World Population Prospects (WPP), taken from International Labour Organization (ILO) 2026 study, ‘Free movement of persons in the CARICOM region: A labour market analysis’.

There are three main goals for Caricom migration policy. The first is to better facilitate the movement of people for economic reasons; the second is to improve training levels so that there is a better match between supply and demand for skilled labour; and the third is to address the problem of migration of skilled labour to countries outside of Caricom, primarily to North America and Europe.

That lack of suitable training, rather than just outward migration, contributes to the labour shortages in skilled occupations can be seen in the fact that a higher share of non-Caricom nationals can be found in high-skilled occupations (38%) than in the national workforce in general (27%). Another indicator that young people are not being trained for the jobs available can be seen in the percentage of young people not in employment, education, or training (Neet). Some 24% of all 15-24 year olds in the region are defined as Neet. The overall unemployment rate for the region is around 12%, but this falls to 6% if Haiti is excluded.

With regards to the outward migration problem, a partial solution, at least, is suggested in the ILO report, which notes (quoting a World Health Organization 2019 study) that while 60% of healthcare workers currently residing in the Caribbean would migrate if the opportunity arose, 92% would stay if conditions improved. In addition, 26% if the healthcare diaspora would consider returning if conditions in the home countries improved.

Labour shortages in agriculture occur for a different reason: the low pay and disincentives of the rural life for young people. Excluding Haiti, agriculture now employs only just over 10% of the workforce, with the services sector accounting for just short of 70%. Yet there are still shortages in the agriculture workforce, with Jamaica, for instance, importing many agricultural workers from Mexico and the Philippines. Haiti would seem to provide an obvious solution to the problem, but Haiti is only a partial member of the CSME, and in any case the Caricom regime of free movement for skilled workers does not encompass low-skilled agricultural workers.

Remittances

There are, of course, upsides to the outward migration. Remittances from outside the region account 7% of GDP across the Caribbean and nearly 20% in Haiti and Jamaica. These remittances can be particularly important at times of economic disruption, as after a natural disaster for example.

ECUADOR | Acuerdo de turismo con Haití. El 12 de septiembre, el gobierno ecuatoriano anunció que el ministro de turismo, Freddy Ehlers, y su contraparte de Haití, Stéphanie Balmir Villedrouin, firmarán un acuerdo bilateral de cooperación en materia de turismo. Una declaración del ministerio de turismo dice que los ministros firmarán un Memorándum de Entendimiento, que abrirá el camino para la cooperación en el sector del turismo.

Actualmente, Ecuador es anfitrión de la 54^ta reunión de la Comisión de la Organización Mundial de Turismo de la ONU (UNWTO); el II Congreso Internacional sobre Ética y Turismo; y el XX Congreso Inter-Americano de Ministros de Turismo en Quito. El secretario general de la UNTWO, Taleb Rifai, dijo que Ecuador fue elegido como anfitrión debido al hecho de que el país ha dado grandes pasos para desarrollar una industria del turismo medioambientalmente sustentable, que le ha ayudado a atraer más visitantes.

En el 2011, Ecuador recibió 1,14m de turistas extranjeros, 9% más que en el 2010. Según los datos del gobierno para los primeros siete meses de este año, Ecuador ya ha recibido 171.000 visitantes extranjeros, y el gobierno espera que para fin de año la cifra será mayor que en el 2011. A través del acuerdo de cooperación bilateral con Haití, se espera que Ecuador pueda transferir algunas de sus experiencias positivas en la promoción del turismo sustentable a Haití.

PERÚ | Buscando diversificar los mercados para sus exportaciones. El ministro de finanzas y economía de Perú, Miguel Castilla, declaró el 6 de septiembre que la prioridad del país en el corto plazo es diversificar su oferta y mercados de exportación. Castilla señaló que Perú está experimentando actualmente una bonanza económica que le ha permitido crecer a una tasa promedio del 6% en años recientes y se espera que la tendencia continúe en el futuro cercano. Según Castilla, hasta el 50% del crecimiento en años recientes ha sido el resultado de “vientos económicos favorables” tales como los altos precios internacionales de las materias primas que Perú tradicionalmente exporta. Sin embargo, Castilla dijo que con una recesión en Europa, una débil recuperación en EU y el crecimiento más lento en China, es “necesario” diversificar la economía peruana y buscar nuevos mercados.

“El esfuerzo de Perú es por la apertura y la transparencia [...] y nuestra políticas buscarán profundizar esta apertura, pues la recuperación [de la economía global] será más vigorosa cuando las economías no estén distorsionadas por medidas proteccionistas,” dijo Castilla. Los comentarios de Castilla fueron hechos antes de que asistiese a la cumbre de la Asia Pacific Economic Cooperation (Apec) en Vladivostok, Rusia (8-9 de septiembre). Durante la cumbre el ministro de comercio exterior y turismo de Perú, José Luis Silva Martinot, reveló que el gobierno peruano se había acercado a Indonesia, con el objetivo de establecer un tratado bilateral de libre comercio (TLC). Silva Martinot destacó que Indonesia es el país más grande en el Sudeste de Asia con un importante mercado de 250m de personas. Agregó que el gobierno continuaría buscando nuevas negociaciones de TLCs con otros países.

VENEZUELA | Acuerdos de cooperación con Portugal. El canciller de Venezuela, Nicolás Maduro, reveló esta semana que él había firmado 14 nuevos acuerdos de cooperación en las áreas de generación de electricidad, petróleo, tecnología y construcción con su contraparte de Portugal, Paulo Portas. Los acuerdos fueron firmados durante la VII reunión de la Comisión Binacional celebrada en Caracas. Maduro destacó que las relaciones económicas bilaterales están más fuertes que  nunca y que esto ha llevado a la firma de importantes acuerdos, en especial en las áreas de generación de energía y construcción.

El gobierno del Presidente Hugo Chávez ha reconocido que la generación de energía en el país es baja, y ha lanzado un ambicioso plan para casi doblar la capacidad instalada del país en los próximos cinco años. Igualmente, la administración Chávez también ha lanzado un programa de construcción patrocinado por el Estado para abordar el gran déficit de viviendas en el país.

Maduro dijo que, después de la firma del acuerdo, las firmas portuguesas ahora podrán participar en estos programas, que podrían tener un valor de hasta US$1,6mm. Portas coincidió en que la relación bilateral es fuerte y señaló que en la primera mitad del año, las exportaciones portuguesas a Venezuela totalizaron US$197m, más que durante todo el año pasado, haciendo de Venezuela el segundo destino más importante para las exportaciones portuguesas en América Latina. Portas agregó que el gobierno portugués espera continuar promoviendo la relación, considerando la reciente incorporación de Venezuela en el bloque del Mercado Común del Sur (Mercosur).

• Las inversiones “genuinas” están seguras en Bolivia

El 10 de septiembre, el ministro de economía de Bolivia, Luis Alberto Arce, dijo que en su opinión la cuestión de las nacionalizaciones bolivianas ha sido “estigmatizada” dándole “mala publicidad” a su país. Arce dijo que la constitución de Bolivia protege la propiedad privada y protege las inversiones extranjeras. De acuerdo con Arce, las recientes nacionalizaciones en Bolivia han sido determinadas por el pueblo, que quiere “recobrar lo que le pertenece a los bolivianos”, negando que el gobierno del Presidente Evo Morales tenga la intención de nacionalizar “ninguna inversión genuinamente privada”. Este argumento podría aplicarse a la reciente nacionalización de minas exigidas por los mineros locales, pero no a la reciente apropiación de la subsidiaria de la firma electricidad de España, TDE. Sin embargo, Arce la defendió indicando que el gobierno pagaría “un precio justo” por ella.

The Partido de la Liberación Dominicana (PLD) government led by President Danilo Medina may boast substantial progress on various fronts since taking office in August last year, enabling it to achieve a high level of popularity [RC-12-06]. However, as Medina marks his first full year in office, he appears to have made only tentative progress with regard to his pledges to improve public security which include his much touted plans to overhaul the local security forces, primarily the national police (PN).

In line with the regional trend in recent years, the Dominican Republic (DR) has witnessed rising levels of criminality and violence. Local and foreign experts have long highlighted that the DR’s security forces are ill-equipped to tackle insecurity given that both the PN and military date from the Rafael Trujillo dictatorship (1930-1961). International human rights organisations like Amnesty International (AI) in particular note that the PN is in desperate need of reform given both its inefficiency and, more worryingly, the fact that it is held responsible for the majority of human rights violations in the DR. Last year AI released a damning report and urged the PLD government of former president Leonel Fernández (1996-2000; 2004-2012) to reform the PN [RC-12-03]. No doubt reluctant to embark on such a complex task in an electoral year, the Fernández administration failed to heed AI’s call. However during his presidential campaign, Medina declared that tackling insecurity would be a priority, that he would be prepared to overhaul the DR’s entire security apparatus as part of these efforts and upon taking office, he promised a comprehensive police reform.

The Medina government took months to prepare a PN reform proposal, finally submitting one to the senate in late May. However, just days later, before the senate’s plenary had a chance to analyse the proposal, Medina recalled it. He said that while the initiative had been discussed with the PN, the interior & police ministry and the attorney general’s office, after consulting his advisors, he decided it required further work. This prompted speculation that the reform had met with resistance from certain influential political forces. While full details of the proposal to make the PN “more efficient, accountable and transparent” were not released, the local press reported that it called for the PN’s complete reorganisation into separate administrative, preventive and investigative branches. Another change reportedly called for the anti-drugs directorate (DNCD) to be transferred from the PN to the attorney general’s office. It is easy to see how such significant changes could arouse resistance and, following its withdrawal from congress, the initiative appears to have returned to the draft stage. On 16 July interior & police minister, José Ramón Fadul, told reporters that the proposal was being analysed by a bicameral congressional commission which would then hold consultations with all interested parties.

While the Medina government may have encountered obstacles in pushing the PN reform initiative through congress, other measures – like a shake-up in security personnel – are starting to make a difference. On 25 June Medina issued a decree naming General Manuel Castro Castillo as the new PN chief to replace Major General José Armando Polanco Gómez, who has become Medina’s police advisor. Air force Colonel Julio César Souffront Velásquez was promoted to the rank of general and named the new DNCD head to replace Major General Rolando Rosado Mateo. While Medina failed to explain the unexpected shake-up, since assuming their posts both Castro and Souffront have wasted little time in making changes. On 6 July Castro, who after his appointment said that he would not tolerate any abuse of force or corruption by the PN, dismissed 29 PN officers including two majors and five captains. Meanwhile Souffrant, who on 30 June said that he would sack any DNCD personnel who failed polygraph tests, announced on 17 July the dismissal of 20 DNCD officers. Souffront also reshuffled the entire DNCD command, bringing in a number of new subordinates in the process.

• PN high command “must be renewed”

On 17 July, at a public event, the newly appointed chief of the national police (PN), General Manuel Castro Castillo, highlighted the need to overhaul the PN’s high command in order to change the philosophy of the institution. He also more generally recognised the need for police reform in order to do away with its “antiquated schemes which date back to the Cold War and Trujillismo” – efforts which have taken place in many other Latin American countries.

The denial on 19 November of the right of entry into Trinidad & Tobago for 13 Jamaican nationals has raised tensions between the two countries and challenged the authority of the Caribbean Court of Justice (CCJ). The Jamaicans complained that “their passports were confiscated by the Trinidadians and that they were ordered to sit on a wooden bench throughout the night before they were…bundled on a Caribbean Airlines Flight”.  Amongst other things, the dispute has led to a burgeoning social-media driven boycott of Trinidadian goods in Jamaica.

The 19 November issue was not an isolated one.  Up to 1,000 Jamaicans have been barred from entering Trinidad over the past three years.  But the latest episode is particularly controversial because it went against the CCJ ruling in October on the case of Shanique Myrie, a Jamaican, and the Barbados government.

In the Shanique Myrie case, the CCJ noted that she “arrived at Grantley Adams International Airport in Barbados and was denied entry into that country…detained overnight in a cell...and deported to Jamaica the following day”.  The court ruled in favour of Myrie and made a declaration that Barbados had “breached Ms Myrie’s right to enter Barbados”. The Court highlighted that in order for a Member State to limit the right of entry of a national of another Member State "in the interest of public morals, national security and safety, and national health”, the visiting national must present “a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society”.

The case is viewed as setting an important precedent, but the decision appears not to have brought about any immediate change in Trinidad’s procedures.

Trinidad & Tobago’s National Security Minister, Gary Griffith, told the Trinidad and Tobago Guardian in an interview that there were “valid reasons for denying the Jamaicans entry”, but the exact nature of these reasons has yet to be revealed.  Griffith sought to justify the move by saying that people who made false claims at immigration would continue to be turned back.

Griffith said: “In the case of several individuals we had similar situations.  For example, one person said she was bringing a child to meet her father and the father never shows at the airport, one said she was on vacation but only had US$250, and another said they were here to work with no Caricom skills certificate.”

In this incident, an 11 year-old girl and her chaperone, Anne Gordon, were among those denied entry into Trinidad. The girl had been on her way to see her father who lived in Trinidad. Both Gordon and the girl presented Caricom passports, and according to Gordon: “They just took our passports and told us we did not meet their entry requirements. If her father lives there why did they refuse the child the chance to see her father?”

The CCJ ruling on the Myrie case also highlighted that where a Caricom national is refused entry into a member state, that national should be allowed to consult an attorney, a consular official, or to contact a family member. The Jamaicans have stated that they were not given such rights and “were not even allowed to use their cellular phones to contact anyone”.

Trinidad remains unrepentant, with Griffith highlighting the fact that there are nearly 17,000 Jamaican nationals living illegally in Trinidad following the expiry of their entry certificates.  He has said that if these undocumented and unregistered Jamaicans are working to maintain themselves, “this means they are depriving the state of an estimated TT$700m(US$109m) in taxes annually”.

This sort of comment is hardly designed to calm the growing animosity throughout Jamaica, which is being fuelled not just by a sense of humiliation but also by a sense of economic injustice based on the huge trade deficit run by Jamaica with Trinidad.  Jamaica’s imports from Trinidad in 2012 came to US$702.2m; its exports to Trinidad amounted to just US$18.3m.  The fact that much of the deficit is accounted for by oil and related products, which would have to be imported from somewhere, does little to alleviate the sense of grievance.  It is widely believed in Jamaica that its products cannot compete because Trinidadian producers have the advantage of cheap energy.

Nor is the threat of a boycott of goods from Trinidad & Tobago confined to consumers.  Doreen Frankson, a former president of the Jamaica Manufacturers’ Association (JMA), appeared to support a boycott when she asserted: “We are not powerless and they depend on our market to grow their productive sector.”  However, Frankson also revealed that the animosity is based on far more than just economics.  She said: “I don’t go to Trinidad because I don’t want to be humiliated.”

In attempt to reduce the tensions, Trinidad and Tobago’s Minister of Foreign Affairs, Winston Dookeran, flew to Jamaica on 2 December. Jamaica’s Minister of Foreign Affairs and Foreign Trade, Senator AJ Nicholson, said the meeting had been arranged in the hope that through collaboration the issue could be brought “to a speedy and successful conclusion”.

Retail sales fell in December for the first time in nine months, resulting in a full year result of 4.3%, the weakest in a decade (in 2003 the sector rose 3.67%) according to latest data from the national statistics institute (Ibge). Sales unexpectedly fell 0.2% month-on-month (in volume terms) ahead of the Christmas season, though they were still up 4.0% in volume terms over the previous December.

Brazilians have lost their lust for shopping amid slowing job growth, rising interest rates and the impact of higher inflation on their take-home pay. Consumer confidence in January fell to its weakest level since mid-2009, according to the main ICC index compiled by the Fundação Getulio Vargas (FGV). The FGV polls 2,000 families in the seven main cities for the ICC, which measures the willingness of families to make purchases of a basket of consumer goods and gauges expectations about employment, income and economic opportunities. The index ranges from 1-200, with 100 considered an indicator of neutral sentiment. It ended January 2014 at 108.9 points, down from 112.5 in December. That was the lowest since June 2009, when it dipped to 108.7 points in the midst of the global economic crisis.

A wider Ibge retail sales index including the automotive and construction sectors fell 1.5% month-on-month in December after car sales dropped sharply (3.4%). That index rose 3.6% overall in 2013.

Critics of the government of President Dilma Rousseff say that its policy focus on tax breaks aimed at stimulating consumption have run out of mileage. The government argues that these polices were only ever intended as temporary measures to prop up growth during the crisis and that its new focus is on investment-promotion polices so as to facilitate private sector-led domestic economic output over the medium term.

A takeover battle developed in August for Global Village Telecom (GVT), the Brazilian telephony and broadband provider majority-controlled by Vivendi of France. The battle looked like a straight contest between Telefónica of Spain and Telecom Italia.

Telefónica made the first move on 4 August, with an offer valued at around EUR 6.7bn (US$9bn), comprising two parts. The Spanish company said it would pay around US$5.3bn in cash and shares for the controlling stake in GVT, and in addition would give Vivendi the right to buy up to an 8% stake in Telecom Italia shares held by Telefónica. Reducing Telefónica’s stake in Telecom Italia would help meet Brazilian regulatory concerns, but at the same time gaining control of GVT would give Telefónica an extra edge in Brazil, allowing it to combine its leadership in mobile (through the Vivo brand) with the fast-growing online video streaming market led by GVT. Ralph Szymczak, an analyst at Germany’s Landesbank Baden-Wuerttemberg, commented: “This is an absolutely sensible move from Telefónica. They are trying to get out of Italy and would strengthen their Brazilian business through a merger with GVT”.

But by 17 August sources quoted by Bloomberg were saying that Telecom Italia was preparing a bigger counterbid for GVT worth around EUR7bn (US9.4bn). According to these sources, Telecom Italia’s CEO, Marco Patuano, had earlier expressed an interest in GVT and preliminary talks had been held, only to be upstaged by the Spanish bid. Telecom Italia was said to be proposing a merger of its Brazilian mobile holding company Tim Participaçoes and GVT, also as a mobile and broadband convergence play, and offering up to 20% of its own shares to Vivendi. There were also reportedly discussions on bringing in Vivendi’s pay-TV company, Canal Plus, into a broader multimedia alliance.

BRAZIL | Inflation up, unemployment up, growth forecast down. Inflation for June was 0.79%, according to Brazil’s official statistics agency (Ibge). Accumulated inflation for the first half of 2015 stood at 6.17%, versus 3.75% in the same period of 2014. As of June 2015, the 12-month accumulated inflation stood at 8.89%. Unemployment is also up, reaching 8.1% in the quarter ending in May, a significant increase from the 7% reported in the same period in 2014. On 9 July, the International Monetary Fund (IMF) cut its forecast for Brazil’s GDP growth for 2015 from -1.0% to -1.5%.