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Casas Bahia, one of the country’s historic brick-and-mortar leaders in sales of white goods, filed for bankruptcy protection in São Paulo on 16 August, just days after announcing dramatic cuts to the size of its staff and sales outlets. It is the latest of several big-name Brazilian companies, including various traditional retailers, that have run into financial trouble and filed for protection from creditors, highlighting the country’s difficult business environment in certain industries.

Only three years ago, Lojas Americanas, the most traditional Brazilian retailer, went the same route after a massive financial scandal involving large-scale accounting fraud [EB-23-04]. The list of other household names that have had to file for ‘recuperação judicial’ – the Brazilian equivalent of US Chapter 11 proceedings – includes furniture stores Tok&Stok and Lojas Marabraz, and clothing brand Zinzane.  

The troubles of many of these companies started years ago and have been driven by a range of factors, from poor management to online competition and macroeconomic instability. Like brick-and-mortar retailers elsewhere, in Brazil too profit margins have been reduced due to online sales, making it difficult to uphold a network of physical sales outlets. Many retailers survived by adopting cost-cutting measures and setting up their own online outlets.

But the big-name retailers are just the most visible aspect of a deeper crisis affecting corporate Brazil. Over the past three years, the number of companies filing for bankruptcy has mushroomed, rising from roughly 4,000 in 2023 to nearly 6,500 in the first half of 2026, according to consultancies RGF and BizDoc. Only 23% of the companies that file for ‘recuperação judicial’ continue operating. The rest shut down for good.

It was the coronavirus (Covid-19) pandemic in 2020 that triggered a recession and a sharp rise in unemployment, exposing structural vulnerabilities in corporate Brazil. To help offset the immediate impact of the crisis, many companies took on bridge loans to help manage their financial needs.

Then a spike in inflation and deteriorating public finances pushed up interest rates and dramatically increased the cost of those very same loans that had been a lifeline to many Brazilian companies. The central bank’s prime lending rate, the Selic, jumped from 2% per year in 2020 to 15% in August of last year.

That not only increased the financial costs of companies, it also eroded the revenue for those relying heavily on credit-driven sales. Given that household appliances and other domestic goods are often bought on credit, the dramatic rise in interest rates weighed on sales, but also increased loan defaults for those who had already acquired goods or services.

The impact has been widely felt, contributing to an economic slowdown and squeezing household finances. In August 2026, 84m consumers, or 51% of the adult population, had defaulted on their debt, according to Serasa Experian, a credit scoring, management, and analysis company.

In its bankruptcy filing, Casas Bahia cited “high interest rate levels, credit constraints, rising financial costs, and pressure on consumption and working capital” among the factors that led to the deterioration of the company’s financial situation. Before turning to court for protection from creditors, the white goods retailer announced it would shutter nearly 300 of its more than 1,000 stores and fire roughly 3,000 employees.

Rate cuts

Although Brazil’s benchmark interest rate (Selic) remains in double digits, the central bank has been lowering the rate since March this year. The bank’s monetary policy committee (Copom) decided in September to lower the Selic rate to 13.75%. However, it is uncertain how much longer the rate-cut cycle will continue. In September, Copom projected that Brazil’s annual inflation this year would reach 5.2%, well above the upper bound of the target range of 3.0% +/-1.5.

Barbados will hold a general election on 21 February, with the Barbados Labour Party (BLP) under former prime minister, Arthur Owens, seeking to oust the Democratic Labour Party (DLP) government led by Prime Minister Freundel Stuart. The usual pattern in Barbados is for political power to be held in lengthy alternating spells by the two main parties, but this time the DLP faces a struggle to secure a second term in power.

The DLP’s difficulties are not surprising. It came to power in 2008 with a 20-10 seat victory (later enhanced by a BLP defection) only to face the consequences of the global financial crisis. In the introduction to the DLP’s report on its 2008-12 performance, produced for the election campaign, Stuart says that the DLP came to power in January 2008 expecting to govern “in circumstances that were normal”. In the event, he added, “we were going to have to govern in the worst economic and financial crisis the world has seen in about 100 years”.

Nevertheless, Stuart argues that the DLP has governed well in the circumstances. He points to a “stable economy”, which moved from a 4.0% contraction in 2008 to 0.8% growth in 2011. In the same period, the fiscal deficit came down from 9.1% of GDP to 4.7% while maintaining public service jobs.

The DLP’s election strategy appears to be to argue that it has governed as well as it could have in the circumstances, and that there is no alternative. Following a downgrading by Moody’s in December, Finance Minister Christopher Sinckler said that Barbados must “stay the course on its fiscal consolidation programme” and that “to attempt to introduce counter-cyclical fiscal measures to stimulate domestically driven growth will reverse the gains made so far by the country to turnaround the situation and make matters much worse fiscally and economically.”

This is the key election battleground. BLP leader Owen Arthur told the party conference in October: “As the next government of Barbados we do not propose to simply return to the old policies or even the old familiar way of doing things.” In particular, Arthur attacked the IMF and its proposals for increasing VAT (which has been increased to 17.5% from 15%); the removal of tax-free allowances; new taxes on energy products; and “the pursuit of macro-economic policies to depress local demand, ostensibly to protect foreign exchange reserves…”

Arthur told his party’s conference: “There has to be a fundamental change in macro-economic policies being pursued by the government…an IMF-type model is unlikely to get the job done for us.” He pointed to BLP’s record of opposing IMF dictats when it came to office in 1994, and he said: “We seek office again to bring back a similar proactive can-do spirit to the management of our economic affairs”.

The essence of the BLP’s economic policy is to “go as far as possible, as fast as possible, to stimulate domestic economic activity in Barbados as part of the effort to put Barbados back on a path of growth and development”. Arthur is proposing a lower tax rate for middle-income earners, a reduction in land tax, and a reversal of the DLP’s energy pricing policies.

The DLP is also proposing a new constitution to coincide with the 2016 50^th anniversary of independence.

COLOMBIA | El ‘Pipe’ de Santos prueba ser un éxito. El 24 de abril la agencia de ratings Standard & Poor’s (S&P), anunció que elevaba el rating de crédito para Colombia de BBB- a BBB, el más alto rating jamás otorgado al país. La decisión de S&P se produjo justo dos días después de que el ministro de finanzas de Colombia, Mauricio Cárdenas, celebró una reunión en Washington D.C. con analistas económicos internacionales, incluyendo representantes de las principales agencias de rating, S&P; Moody’s; y Fitch, para presentarles los detalles del Plan de Impulso a la Productividad y el Empleo (Pipe), el paquete de estímulos económicos recientemente lanzado por el gobierno del Presidente Juan Manuel Santos [IL-13-15].

Al revelar el Pipe, Santos proclamó que el plan, que incluye C$5mm (US$2,73mm) de inversión del gobierno, impulsaría el crecimiento económico mientras que al mismo tiempo se mantendría la disciplina fiscal e incluso se “equilibraría” el actual elevado nivel del peso. Para los críticos de Santos, todo esto no solamente suena ampliamente ambicioso sino también “demasiado bueno para ser verdad”, con algunos alegando que sería difícil lograr los objetivos y que, probablemente sólo representan promesas vacías de campaña pre-electoral de Santos. Sin embargo, a pesar de tales reservas, el Pipe ha sido recibido positivamente por los analistas internacionales. Después de su reunión con Cárdenas, todos ellos expresaron su aprobación por las medidas, en particular aquellas diseñadas para impulsar la construcción de nuevas viviendas, una de las principales áreas a las que apunta el plan, que los analistas dijeron que beneficiaría al sector bancario local pues habrá una creciente demanda por hipotecas. Esto llevó a Cárdenas a expresar confianza en que la reunión podría conducir a un mejoramiento del rating de riesgo, confianza que probó ser acertada.

Hablando ante los medios colombianos para explicar la decisión de elevar el rating de Colombia, Joydeep Mukherji, analista en jefe de S&P para Colombia, dijo que la agencia había decidido hacer esto después de considerar la “mejorada capacidad [de Colombia] de enfrentar impactos externos y de mantener el crecimiento económico a largo plazo”. Mukherji explicó que en su opinión, en años recientes ha habido un “evidente fortalecimiento de la economía interna de Colombia” particularmente en lo que se refiere a promover el crecimiento y mantener un saludable equilibrio fiscal. Además como un reconocimiento al Pipe, Mukherji señaló que el nivel de inversión de Colombia, de aproximadamente el 30% del PIB, es “uno de los más altos en América Latina”, lo que debería conducir incluso a más desarrollo económico en el futuro.

Bajo Santos, Colombia ha conseguido una tasa promedio de crecimiento económico del 4,6% desde el 2010, lo que ha permitido al país desafiar la posición de Argentina como la tercera mayor economía en América Latina. Al obtener el rating BBB, Colombia ahora está mejor ubicada para continuar con este desafío pues su rating de S&P ahora iguala al de las dos mayores economías de la región, Brasil y México.

VENEZUELA | Planta de ensamblaje de Yamaha. El 30 de abril el ministro de industria de Venezuela, Ricardo Menéndez, anunció que el gobierno había firmado un acuerdo con el conglomerado empresarial japonés, Yamaha Corporation, para embarcarse en una empresa conjunta para desarrollar una planta de ensamblaje de motocicletas en el estado de Miranda. Según Menéndez, la primera etapa del proyecto, en el cual el gobierno venezolano tendrá el 51% de participación y Yamaha el 49%, significa una inversión de BF310m (US$49m) para establecer la planta que tiene fijado producir unas 30.000 motocicletas al año. Menéndez dijo que el objetivo inicial es proveer al mercado local, pero que eventualmente también hay planes para exportar motocicletas a los nuevos socios de Venezuela en el Mercado Común del Sur (Mercosur). Pero aún más importante, Menéndez señaló es que hay planes a mediano plazo para que la planta no solamente ensamble motocicletas, sino también para que produzca motores y otras partes de motocicletas, así como también motores fuera de borda y equipamiento para la producción agrícola. “Nosotros no sólo queremos ser ensambladores [...] sino también ser capaces de proveer a otras plantas alrededor del mundo”, Menéndez dijo.

La nueva planta tiene programado entrar en funcionamiento para finales de este año, dijo el gobierno.

BOLIVIA | Celebra nacionalización del sector de hidrocarburos. La firma petrolera estatal de Bolivia, YPFB, anunció el 28 de abril que en el primer trimestre de este año sus exportaciones de gas natural a Brasil y Argentina llegaron a un valor de US$1,5m, lo que significa un 29,5% más que en igual periodo del año pasado. El anuncio se produjo justo antes del séptimo aniversario de la nacionalización del sector de los hidrocarburos, ordenado por el Presidente Evo Morales el 1 de mayo del 2006. Esto aseguró que las celebraciones encabezadas por el mismo Morales, en La Paz y El Alto, fueran fervientes, con Morales haciendo alarde de que los ingresos anuales desde la nacionalización del sector se habían incrementado de US$300m en el 2005, a US$4,2mm el año pasado. El sector de los hidrocarburos es ahora la principal fuente de las exportaciones de Bolivia, representando el 53% del total de las exportaciones.

• Ecuador atrae a sus emigrados

El 25 de abril el gobierno ecuatoriano anunció que estaba ofreciendo 20.000 nuevos empleos a migrantes ecuatorianos que actualmente residen en España y que quieran retornar a su país con “dignidad”. La directora de la Secretaría Nacional de Migración (Senami), Lorena Escudero, dijo que como parte del ‘Plan Bienvenidos a Casa’, el gobierno ha lanzado ahora el programa ‘Red socio empleo’, bajo el cual oportunidades de empleo en Ecuador son publicitadas en los consulados ecuatorianos en Madrid, Barcelona, y Murcia, desde donde los ciudadanos ecuatorianos pueden aplicar para ellas. “Estamos facilitando las cosas para que ellos puedan aplicar y continuar el proceso de selección de empleo en el exterior, para que así retornen al país con un contrato de empleo asegurado”, explicó Escudero.

ARGENTINA | Drought causes economic losses in agriculture. On 28 June the Bolsa de Cereales de Buenos Aires – the Buenos Aires grain exchange – revealed that Argentina would lose US$5.895bn, or 0.86% of GDP, due to lower harvests of soybean and maize caused by drought. The country is one of the largest producers and exporters of grain in the world, but 27m tonnes (t) of produce will be lost due to bad weather. According to forecasts, 32m t of maize will be produced in 2017/18, some 22% less than predicted, while a soybean harvest of 36m t will represent a loss of 33%. Reduced production only partly explains the financial losses, which were worsened by falling prices on international markets following the publication of results from 2016/17.

According to the report, the frequency and magnitude of climatic changes and their effects on such an important economic sector shows the need for an integrated strategy for risk management in agriculture. The US$5.895bn figure only takes into account direct losses in the agricultural sector due to drought, and the authors claim that total macroeconomic losses could be far higher if dependent sectors are factored in.

URUGUAY | Exports and deficit on the rise. Exports rose 2.3% in the first six months of 2018 compared to the same period last year, according to a June 2018 report from investment and export agency Uruguay XXI. A figure of US$4.630bn represents the best first half in three years.

The value of exports for the month of June was US$863m, a 17% fall compared to last year. Wood pulp, wood and derivative products, and livestock and beef recorded positive trends, while soybean exports fell 78% compared to June last year, due to reduced production following a period of drought.

Without taking soybeans into account, exports grew 6% in June compared to last year. It was a record month for exports of wood pulp, which increased 57% to US$188m after prices rose in recent months, and livestock exports reached US$59m. China was Uruguay’s most important trade partner in June, accounting for US$123m in exports, while Brazil accounted for US$91m and Turkey US$51m.

• Fiscal deficit

Uruguay’s economy & finance ministry announced that the fiscal deficit reached 4% of GDP in May, up from 3.7% in April. This is largely due to the acquisition of oil stocks from state oil company Administración Nacional de Combustibles, Alcoholes y Portland (Ancap). The Uruguayan government had committed to maintaining the deficit at 3.3% of GDP until the end of 2018.

Anti-corruption campaigners in Brazil have expressed concern over the country’s efforts in fighting graft recently, seeing signs of serious setbacks in this area [WR-20-35], and notably to the ‘Lava Jato’ (Car Wash) operation launched in 2014. However, the appointment of a new supreme court (STF) president could help give a new lease of life to anti-corruption efforts in general, and the work of the Lava Jato in particular.

STF Justice Luiz Fux was sworn in for a two-year term as president of the STF on 10 September, taking over from José Antonio Dias Toffoli, with Rosa Weber taking over as STF vice president. Appointed to the STF in 2011 by then-president Dilma Rousseff (2011-2016), Fux is considered to be a ‘lavajatista’ magistrate, a staunch defender of the fight against corruption and favourable to the Lava Jato operation.

Fux is expected to avoid plenary votes on issues which could set the Lava Jato efforts back – as happened last year when the court voted six-to-five in a ruling which allowed convicted criminals whose sentences have been upheld on first appeal to remain out of prison until they have exhausted all other avenues for appeal. This ruling notably benefited former president Lula da Silva (2003-2011), who left prison last November despite still facing corruption convictions. 

In his inauguration speech, Fux praised the Lava Jato investigation and stressed that he would spare no effort to strengthen the fight against corruption. He also cited the areas on which the court would focus under his presidency, which include the protection of human rights and the environment, the fight against organised crime, corruption, and money laundering, and the guarantee of the court’s constitutional mandate. In a nod to this, and to some of the criticisms that Brazil’s highest court has faced in recent years, Fux defended the STF’s independence and suggested that it should stay out of political disputes.

A friendly figure at the head of the STF may help the Lava Jato investigation in some cases, but its successful continuity depends on many other factors. The anti-corruption operation has suffered setbacks at the hands of congress over the past year, as well as the STF, and through internal disputes with the attorney general’s office (PGR). These disagreements appear to have been, if not resolved, at least put on hold. On 9 September, the PGR confirmed the renewal of the mandate of the Lava Jato taskforce of prosecutors in Curitiba, Paraná state. Attorney General Augusto Aras’ differences with the Lava Jato prosecutors had brought the renewal of their mandate into question. As it is, for now their work has only been extended for four months, until the end of January 2021, rather than for a year as requested.

Ploughing on

Despite, or perhaps because of, the doubts hanging over the future of the operation, the Lava Jato’s taskforces have been pushing forward with different branches of the investigation. Their most recent moves concern two of the most prominent names which often found themselves at the centre of the Lava Jato scandal since it first broke in 2014: state-owned oil company Petrobras, and former president Lula from the Partido dos Trabalhadores (PT).

First, on 10 September, search warrants were served against 25 people in relation to suspected fraudulent foreign exchange transactions undertaken by Petrobras between 2008 and 2011. Then, on 14 September, prosecutors in Paraná brought new charges against Lula, accusing him of laundering R$4m (US$765,000) received in bribes from engineering company Odebrecht through the Instituto Lula, a non-profit foundation.

These are the fourth set of charges that Lula faces in Paraná, with Antonio Palocci, a former minister and prominent PT member, and Paulo Okamotto, the president of the Instituto Lula, also facing accusations of money laundering. Lula’s lawyers are still working to overturn his previous sentences, on the basis that Sérgio Moro, the former judge who handed down Lula’s sentences for corruption before going on to become President Jair Bolsonaro’s justice minister, was biased.

Witzel faces new charges

Wilson Witzel, the suspended state governor of Rio de Janeiro who faces charges of corruption, has now been accused by prosecutors of leading a criminal organisation – a term used to designate a group of three or more people who have organised to carry out and benefit from illegal activities. In this case, the group that Witzel is accused of leading allegedly organised to embezzle R$400m (US$76m) worth of public funds through state contracts in the healthcare sector. Witzel, who is separately facing impeachment proceedings in the Rio legislative assembly (Alerj) over the embezzlement allegations, maintains that these charges are politically motivated.

Military health minister confirmed

After leaving Brazil without a permanent health minister for four months in the midst of the coronavirus (Covid-19) pandemic, President Jair Bolsonaro swore Eduardo Pazuello into the post on 16 September. An active duty army general who had previously coordinated Brazil’s reception of Venezuelan migrants, but who has no experience in public health, Pazuello took over as interim health minister after the resignation of Nelson Teich in May [WR-20-20].

Pazuello’s confirmation to the post comes the same week that the United Nations High Commissioner for Human Rights, Michelle Bachelet, warned that “the involvement of the military in public affairs and law enforcement” during the pandemic, as observed in Brazil and other Latin American countries, should be “strictly exceptional, with effective oversight”.

India last week overtook Brazil as the second highest official Covid-19 caseload in the world, but Brazil remains one of the worst-hit countries with around 4.4m confirmed cases and over 133,000 deaths. Although there are signs that the uncontrolled epidemic is decelerating in Brazil, the daily death toll began to exceed 1,000 again this week, while public health experts are concerned by the lack of adherence to social distancing measures as the country’s economic activity picks up. The city of Rio de Janeiro for example recently reversed the relaxation of some rules.

Once again, Peru’s President Dina Boluarte will be relying on her right-wing allies in congress to shield her from an attempt to remove her from office. This time, the threat comes in the form of two constitutional complaints submitted by the attorney general’s office and the left-wing opposition.

This week President Boluarte has had at least two headaches to deal with. On 28 May she was questioned by interim Attorney General Juan Carlos Villena, who is looking into charges that she obstructed justice. This particular case involves her brother Wigberto Nicanor Boluarte, who was arrested earlier in May and later released on bail after being accused of participating in an influence-peddling scheme. The president in turn is charged with trying to help him evade justice by closing down the police team that supported the special anti-corruption unit (Eficcop) which was leading the investigation [WR-24-19].

The second headache came from two constitutional complaints filed against Boluarte in congress. Constitutional complaints, which seek to remove public officials from office and strip them of their immunity from prosecution, require a lower threshold of approval by legislators than impeachment motions – whilst impeachment requires the support of two-thirds of congress, a constitutional complaint needs just a simple majority. The first of these was submitted by Ruth Luque, a deputy for the centre-left Cambio Democrático-Juntos por el Perú (CD-JPP), and accuses Boluarte of taking unauthorised leave last year to receive cosmetic surgery. The second was submitted by the attorney general’s office, and accuses her of bribery in relation to the ongoing ‘Rolexgate’ investigation [WR-24-13].

These allegations have already been rejected by congress during earlier impeachment attempts, with Boluarte’s allies most recently shielding her from three separate impeachment motions on 17 May [WR-24-20]. But with their reappearance in the form of constitutional complaints, the accusations will not fade away any time soon. Boluarte has denied all charges and insists that she will remain in office until elections are next due in 2026. The balance of probabilities is indeed that she will avoid impeachment because of her alliance with the conservative majority in congress. But the current situation remains inherently volatile, and the lower bar of approval that is needed for the constitutional complaint leaves the government even more vulnerable to the whims of lawmakers.

With two years of Boluarte’s term left to run, the investigations and allegations will at the very least have a high nuisance value. In a less optimistic scenario, they could tie the government’s hands, paralyse government business, and eventually spark a return to mass street protests last experienced in late 2022 and early 2023. Knowing that the president is dependent on their support, the four main right-wing parties in congress are likely to increase their demands and seek maximum leverage. In light of Boluarte’s deep unpopularity some are likely to abandon the government before the 2026 elections, to the detriment of political stability. 

Boluarte’s popularity drops further

A survey by local pollster Instituto de Estudios Peruanos (IEP) published on 27 May showed support for Boluarte falling to an all-time low of 5%. This was her worst performance since she took office in December 2022. An overwhelming 90% of respondents disapproved of her rule. Congress did not fare much better. A total of 91% of respondents disapproved of the legislature’s performance, while only 6% approved.

ECUADOR | Noboa claims economic progress. President Daniel Noboa claimed on 8 July that Ecuador’s economic situation is improving, saying that “we’ve got through the hardest part” and that “if we hadn’t had these hard six months, or taken difficult decisions, then in the second half of the year we wouldn’t have public investment that transforms employment, nor would we have the money to keep fighting a war [against criminal gangs]”.

Noboa received a significant financial boost in May when the International Monetary Fund (IMF) approved a new 48-month, US$4bn arrangement with Ecuador. Since then he has also begun phasing out fuel subsidies, a major strain on the public finances, and has so far avoided facing major protests over the issue [WR-24-24].

Amid global concerns over the protectionist stance of the US under President Donald Trump, Brazil is facing greater incentive to deepen its trade relations with other partners. Rather than solely focusing on its top trade partner, China, Brazil is intent on shoring up ties with other Asian partners, such as Japan. From 24-27 March President Luiz Inácio Lula da Silva visited Tokyo, leading a delegation with government officials as well as private sector representatives, with a strong showing by executives from agribusiness companies.

According to the government’s trade and investment promotion agency (Apex), Japan is Brazil’s 11^th largest trade partner, with bilateral trade totalling US$11bn. On 25 March Lula attended a business conference in Tokyo, where he said that the trade balance was US$17bn in 2011 and he hoped to return to this level of trade. According to Apex, Brazil’s main export opportunities in Japan are commodities such as oil and soybeans and some manufactured items and components, such as aluminium, steel, and tyres, but the agency recognised the need to diversify exports. A mere three products – iron ore, poultry, and coffee – accounted for around 43% of Brazilian exports to Japan last year.

One of the other areas that Apex lists as a key challenge for Brazilian exports is Japan’s sanitary and phytosanitary requirements, which the agency believes has been a major obstacle for exports of products such as pesticides, veterinary medicines, and beef. The latter product has long been a sticking point for Brazil-Japan trade relations. According to the Brazilian government, the process to open the Japanese market to Brazilian beef has involved over 20 years of negotiations, and ahead of this latest visit Lula reiterated Brazil’s interest in making progress on the talks to authorise beef shipments. The Brazilian government estimates that around 70% of the beef consumed in Japan is imported, but most of this beef comes from Australia and the US.

Currently, the only Brazilian state that is allowed to export beef to Japan is Santa Catarina, but on 26 March Lula and Japan’s Prime Minister Shigeru Ishiba signed an agreement which included a section about agriculture. This featured a commitment by the Japanese government to send a team of animal health experts to conduct technical inspections of Brazilian cattle farms.

The agreement did not mention an exact date or deadline for the inspections, but it stated that bilateral talks will be held in the second half of this year to “evaluate the progress of this issue”. Lula and Ishiba also agreed to hold Brazil-Japan summits of government officials every two years, which could be a potential forum to discuss the ongoing issue of beef exports.

Energy and industry

In addition to making some progress on the beef export front, a more concrete achievement the Brazilian delegation can claim is the sale of 15 passenger planes produced by Brazilian aircraft manufacturer Embraer to Japanese airline All Nippon Airways, which also expressed interest in the possibility of acquiring a further five planes.

Another area where Brazilian authorities see potential to boost exports is energy, with biofuels highlighted as an opportunity by Lula. According to the International Energy Agency (IEA), over 80% of Japan’s total energy supply comes from fossil fuels, and Brazil hopes that its agribusiness sector can provide the biofuels needed to help Japan adopt greener energy sources.

Rate hike cycle

On 25 March the monetary policy committee (Copom) of Brazil’s central bank (BCB) released the minutes from its meeting on 18-19 March in which it decided to raise the country’s benchmark interest rate by 100 basis points, up to 14.25%. The tone of the latest Copom minutes reaffirmed the BCB’s hawkish monetary policy stance. It stated that the next Copom meeting in May could see a smaller rate increase but suggested that further hikes were still on the horizon.

ARGENTINA | Ministers receive salary boost. President Javier Milei authorised a significant salary increase for cabinet ministers and senior officials on 2 January, annulling a decree that froze them when he took office in December 2023. Neither Milei nor Vice President Victoria Villarruel benefitted from the increases.

Ministers, secretaries, undersecretaries, and other officials in the executive branch will receive an 89.8% salary increase, according to a decree published in the official gazette. Although this is below accumulated inflation for the last two years, members of the opposition said it was unjust that it should surpass the wage increases of workers in other industries.

BRAZIL | Oil and gas production down in monthly terms, up year-on-year. The federal oil and gas regulator reported on 5 January that the country’s total production in November stood at 4.92m barrels of oil equivalent per day (boepd). Oil production in November totalled 3.77m barrels per day (bdp), marking a 6.4% decrease compared with the previous month and a 13.9% increase compared with the same month the previous year. Natural gas production totalled 182.57m cubic metres per day (m³/d), down 6.3% compared with October but up 15.7% on November 2024.

The most productive oil field in November 2025 was the Búzios field of the Campos Basin, near Brazil’s south-eastern coastline, registering 744,300 bpd of oil and 40.8m m³/d of natural gas.

BRAZIL | Embraer completed more deliveries in 2025. Airplane manufacturer Embraer released new figures on 6 January showing that it had delivered 91 units of aircraft in the fourth quarter of 2025. This marks an increase from the 62 units delivered in the third quarter and from 75 units in the final quarter of 2024. This brings the total number of deliveries in 2025 to 244 units, up from 206 the previous year.

Guyana went to the polls on 28 November with the ruling People’s Progressive Party/Civic (PPP/C) seeking a straight fifth term in office, but with a new presidential candidate: Donald Ramotar.  Following a very tight election, the announcement of the results was delayed, prompting the Organization of American States (OAS) observer mission to say: “It is unfortunate that, following a generally well-administered election up to and including polling day the failure to ensure the timely dissemination of results may undermine the good work done thus far.”  At 22.00 hours local time on 30 November it looked as if the PPP/C had just scraped home for a fifth term, but there was clearly still some wrangling and recriminations – perhaps even violence - to come.

The first indication that the election had been a tight one came with the failure to publish preliminary election results as planned on 29 November and with calls (later withdrawn) from the PPP/C for recounts in nearly 50 polling stations despite having confidently declared itself the winner earlier in the day.

According to the partial results released by the local electoral authorities (Gecom) of the 275,940 valid votes so far tallied, the PPP/C, which has the backing of Guyanese nationals of East Indian origin, took 136,881 votes (or 49.6%). The opposition coalition, A Partnership for National Unity (APNU), which fielded retired army commander, David Granger, of the People’s National Congress Reform (PNCR) and draws support from the Afro-Guyanese population, took 109,673 votes (39.7%). The Alliance for Change (AFC), which seeks support across racial lines, took 28,638 votes (10.3%), while the conservative United Force (TUF), 748 (0.3%).

The results suggest a drop in support for the PPP/C (from 54.6% in the last election in 2006) and an increase in backing for the APNU (it polled 34% in 2006) and the AFC (8.4% in 2006) although is a far cry from the breakthrough initially declared by the AFC: the opposition party claimed that it was “assured in the knowledge that it has made significant inroads in breaking the toxic scourge of racial voting [see sidebar].  The party has solidified its status as the conscience of the nation and is enthused by the support it has received from a wide cross-section of Guyanese, which demonstrates that there is a significant shift away from traditional voting patterns.” 

The PPP/C’s campaign was ultimately helped by its economic record.  2010 was the fifth consecutive year of growth, with a 3.4% advance, and the IMF’s growth projections for 2011 and 2012 are 4.8% and 6.0%.  These factors seem to have outweighed the disadvantages of long incumbency and a change in leadership, and they enabled the PPP/C once again to capitalize on the numerical superiority of its core East Indian support base.  However, the return of the PPP/C to power in such a tight election will have done nothing to ease Guyana’s underlying social tensions.

• Racial composition

Guyanese of East Indian origin make up 43.5% of the population, with Afro-Guyanese accounting for 30.2% and people of mixed race 16.7%.  Reflecting this numerical superiority, the Indian-oriented PPP/C won 36 out of 65 seats in the 2006 elections.  The Afro-supported People’s National Congress (PNCR) won 22 seats, while the Alliance for Change (AFC) won five seats with 8.4% of the vote.

 PUERTO RICO | Constitutional reforms rejected. Puerto Rican voters have rejected, via referendum, constitutional reforms which would have cut the size of the legislature (from 78 legislators to 56) and ended the absolute right to bail. The result of the 19 August election came as a surprise: previous polls revealed widespread backing for the changes which were aimed at improving the efficiency of the local bi-cameral legislature and addressing a crime wave in the US territory (see sidebar).

    According to the state electoral commission (CEE), 54.22% rejected the proposal to cut the size of the legislature, while 45.78% voted yes. Meanwhile 55.03% voted against ending the absolute right to bail, while 44.97% voted in favour.

    The proposed amendment to bail terms would have allowed judges to refuse bail for charges such as premeditated murder, homicides committed during domestic burglaries, sexual assaults and kidnappings. Police maintain that the lack of such a provision skews efforts to prosecute murderers, as witnesses feel threatened knowing that suspects are out on bail.

    One significant aspect of the referendum was that it did not fall along traditional political lines; both reform proposals were backed by Puerto Rico’s two main political parties – Governor Luis Fortuño’s Partido Nuevo Progresista (PNP), (which favours pursuing US statehood), and the Partido Popular Democrático (PPD) of Alejandro García Padilla, which backs the status quo.

    The result is a particular blow for Fortuño who is preparing to face García in gubernatorial elections scheduled for 6 November. In a parallel referendum, the electorate will also vote on Puerto Rico’s political status. First citizens will be asked whether they want the current territorial status to continue. Regardless of how they answer that question, they will then be asked, in a second question, to choose between three different options: US statehood, independence, or a sovereign free association (essentially the status quo).

GUATEMALA | Victory against Iberdrola. The government of President Otto Pérez Molina is hailing as a victory a recent ruling by the World Bank’s International Centre for Settlement of Investment Disputes (Icsid) which ordered Spanish energy group Iberdrola to pay Guatemala US$5.3m to cover the costs of the country’s three-year legal battle against the energy company. In December 2008, Iberdrola demanded US$672m in compensation, claiming that Guatemala had expropriated investment after the country’s power regulator Comisión Nacional de Energía Eléctrica (CNEE) reduced the distribution tariff for its then subsidiary Empresa Eléctrica de Guatemala, S.A. (EEGSA) in August that year. Two years later Iberdrola sold its shares in EEGSA and the amount of compensation demanded dropped to US$185m. The Icsid found that Guatemala did not expropriate investment nor violate a fair deal.

BELIZE | Heading towards default. International credit ratings agencies Moody’s and Standard & Poor’s have both downgraded Belize following the 20 August announcement that the country had failed to make a US$23m payment on its US$546.8m bonds due in 2029, and Finance Secretary Joseph Waight admitted that payment within the 30-day grace period was uncertain.

     On 21 August Standard & Poor’s (S&P) lowered its long- and short-term foreign currency sovereign credit ratings on Belize to 'SD' (selective default) from 'CC/C'. It also lowered its rating on Belize’s bond due in 2029 to 'D'. The same day Moody’s changed the outlook on Belize’s ratings to negative from developing although the foreign currency rating remains at Ca and local currency rating remains at Caa3.

    The failure to make the payment on the superbond has raised fears that the country is headed for default, complicating restructuring talks underway with international bond-holders. Prime Minister Dean Barrow, who was re-elected for a second term in March, said that Belize could not afford to service the superbond, which pays an annual coupon of 8.5% this year. The bond represents half of the country’s outstanding public debt, which hovers at about 80% of GDP, or US$1.47bn in nominal terms in 2011.

• Crime in Puerto Rico

Violent crime is increasingly becoming a problem for Governor Luis Fortuño, much of it linked to the growth in drug trafficking. Last year a record 1,136 murders were registered (up from 983 in 2010) and the situation last month led the leader of the Partido Popular Democrático (PPD) Alejandro García Padilla, to call on Fortuño to declare a state of emergency.

PARAGUAY | Revelling in successful Wall Street bond issue. On 18 January the Paraguayan government announced that it had successfully completed the country’s first ever bond issue in the New York Stock Exchange (NYSE), where its issue of US$500m in 10-year bonds offered a yield of 4.62%, the lowest ever for sovereign bonds making their debut in international markets. The previous record was boasted by Bolivia which in a comparable US$500m issue offered a yield of 4.8%. According to Paraguay’s finance ministry, over 97% of Paraguay’s bonds have been acquired by US investors (despite the fact that the country’s current sovereign risk rating is below investment level, the best being at Ba3 [WR-13-02]). This is an unqualified success for the Paraguayan government led by President Federico Franco on two counts. It enables the government to raise much needed funds with which to finance key infrastructure projects in the short time that it has left before the 21 April general elections. It also illustrates investors’ confidence in the Paraguayan economy even as the country faced political instability last year following the impeachment of former president Fernando Lugo (2008-2012) and posted negative economic growth as a result of the negative shocks suffered by its key agricultural sector. Franco pointed out that the fact that the issue was oversubscribed at US$5.6bn, or 11 times its value, demonstrated that investors view Paraguay as “a serious country”. He said that all the funds raised would be used for much-needed infrastructure projects such as repairing and expanding roads and improving the national energy distribution network. Paraguay’s economy ministry calculates that this could boost the country’s GDP by as much as 6%, on top of the 8.5% forecast for this year.

URUGUAY-BRAZIL | Auto trade restrictions continue. On 21 January the general manager of the local subsidiary of Chinese car manufacturer -Lifan, Pablo Revetria, told local daily, El País, in an interview that his company was still experiencing problems in exporting vehicles to Brazil. Last year Brazil adopted trade restrictions on automobile imports from Uruguay claiming that these did not meet the Southern Common Market (Mercosur) rules of origin and represented an attempt by non-Mercosur countries to enter Brazil’s domestic market. The restrictions were only lifted after Uruguay’s President José Mujica personally intervened; after meeting his Brazilian counterpart, Dilma Rousseff, the two countries agreed on a new export protocol that would ensure that Uruguayan exports would not encounter any more problems in entering Brazil. However, Revetria said that the company’s first shipment of the year of 30 vehicles (out of a total of 2,500 earmarked for export to Brazil this year) has been stuck at the border for the past two weeks as Brazil’s customs authority, the Receita Federal, has held it up arguing that it lacked all the necessary documentation. Revetria claims that the shipment has “all the necessary documentation as per the latest protocols” but that the Receita is constantly demanding new paperwork. He added that he has already been in contact with the Uruguayan industry ministry to alert it to the situation and seek assistance. Revetria said that “from now on things are solved from government to government”. Probed further about the situation, Revetria was philosophical stating that “Brazil has trade restrictive policies in general. It is not just a problem with Uruguay. But we are affected by policies intended to protect [their] domestic market”. In all likelihood, concerns about Uruguayan exports have resurfaced in Brazil due to the fact that the rising value of the Real is making Brazilian products increasingly less attractive (the current exchange rate is of Ur$9.223/R$1). According El Observador, another Uruguayan daily, last year its ‘real exchange rate indicator’, which measures exchange rates and inflation fluctuations between the local economy and its main trade partners as a proxy for measuring the competitivity of Uruguayan products, reached its highest levels in a decade as the value of Uruguayan products and services fell by 15.85% compared to Brazil’s and by 18.7% compared to Argentina’s.

Sidebar: BCCH keeps rate steady for full year

On 17 January Chile’s central bank (BCCH) announced that after its latest monetary policy meeting, the Bank decided to keep its benchmark interest rate at 5%, the same level at which it has remained since January 2012. Unlike other central banks in the region that have reacted to domestic economic slowdown by cutting rates (Brazil and Colombia to name two), the BCCH has opted to keep the interest rate steady as its economy continues to outperform expectations, but the BCCH still harbours concerns about weaker global economic growth. The BCCH explained its decision by stating that “the weak growth of developed economies continues”, but also pointed out that “there are positive signs observed in China”. Thus it appears that the BCCH is happy to continue to sit and wait for clearer signs from the global economy.

On 20 February Russia’s prime minister, Dmitry Medvedev, met President Dilma Rousseff in Brasília.

The two inked a number of agreements, including a couple of memorandum of understandings (MOUs) on educational programmes, small -and medium-sized businesses (SMEs) and a declaration of intent on military-technical cooperation in defence. Brazil also expressed an interest in buying five Russian anti-aircraft missile systems ahead of the 2016 Summer Olympics in Rio de Janeiro. Before the meeting Medvedev told reporters that Brazilian-Russian trade could reach US$10bn. In 2012, trade between the two countries was US$5.95bn.

The two countries will begin detailed negotiations in March on Brazil’s potential purchase of missile defence batteries. According to local press reports, the Brazilian defence ministry has expressed interest in acquiring Pantsir-S1 and Igla-S systems produced by Russian company, High Precision Weapons.

Other items on the agenda were barriers to agricultural trade between the two countries. Russia has been seeking to expand its sales of wheat to Brazil, while Brazil is looking for the ban slapped on Brazilian beef imports last year due (on phtyosanitary concerns) to be lifted. Russian officials are scheduled to visit Brazil in the next two months to decide whether exports from a group of beef producers in the Brazilian states of Paraná, Rio Grande do Sul and Mato Grosso will receive certification to export to Russia.

• Brazil’s papal hopes

As the Vatican prepares to elect a new pope, many Catholic commentators have tipped the São Paulo archbishop, Odilo Scherer, a moderate conservative, as Latin America's top contender. Vatican watchers put him ahead of another top Latin American candidate, Cardinal Leonardo Sandri, an Argentine of Italian extraction who works in the Vatican as prefect of the Congregation for the Oriental Churches.

While operating in Venezuela has been a high-risk activity for many international companies for a number of years, the introduction of the Sicad 2 has forced a many of them to formalise exchange rate losses that were previously implicit.

A number of multinationals have begun to write off exchange rate losses suffered by their Venezuelan subsidiaries. The process started with US car manufacturers. Ford said it would take a Venezuela-related charge of US$350m in its first quarter 2014 accounts, while General Motors said it would be taking a pre-tax charge of US$400m for the same reason. In a filing to the US Securities and Exchange Commission (SEC), GM said it had previously valued the net assets of its Venezuelan subsidiaries at the official exchange rate of BF6.3/US$, but effective from 31 March was switching to the Sicad 1 rate (currently at around BF11/US$). However, there is doubt over whether foreign companies will get access to exchange at the Sicad 1 rate when desired (the government has been clear that certain sectors serving the domestic consumer market will be given preferential access), or whether they may, for example, be shunted off to the new and significantly less favourable Sicad 2 rate (which on 22 April was trading at about BF49/US$).

Earlier this year, Ford’s chief financial officer (CFO), Bob Shanks, admitted: “we’ve taken production way, way down in Venezuela because of a lack of dollars. We cannot get our money out. That market is basically on ice at the moment.” According to the main automotive association, Cámara Automotriz de Venezuela (Cavenez), only 817 cars were sold in the country in February. “To give you an idea of how bad that is and how dollar and parts shortages are biting in combination with an incredibly overvalued Bolívar and a dollar shortage, in February of last year, 8,058 new cars were sold” noted Russ Dallen of Caracas Capital Markets.

Proctor & Gamble (US), Colgate-Palmolive (US) and Telefónica (Spain), have all said they will move to the Sicad 1 rate in accounting for their Venezuelan operations. So too has General Cable Corporation, the US-owned copper, aluminium and fibre optic products company, which said it “expects to record a charge in the range of US$80m to US$85m in the first quarter of 2014 results.”

But Brink’s, the US security and armoured car provider, said it was revaluing its Venezuelan assets at the Sicad 2 rate, because this was “the only rate at which Brink’s has been able to successfully exchange its bolivars for US dollars”. It noted that if revalued at the Sicad 2 rate, its US$447m in revenues from Venezuela in 2013 would have declined by 88% to approximately US$56m. Following the news, the company’s shares suffered their steepest drop in the last two years.

Coca-Cola also revalued at the Sicad 2 rate, a change that led to a US$247m charge on its global first quarter accounts. There have been reports that other companies such as the US broadcaster DirecTV and the online auction site MercadoLibre may also be forced to move to Sicad 2. According to the financial newswire Bloomberg, rebasing its accounts at the Sicad 2 rate would reduce DirecTV’s cash holdings by 26%, while earnings per share could drop 9% to 11%.

Pedro Arnt, CFO at MercadoLibre, had said earlier in the year, “Our Venezuelan operation remains profitable and more importantly self-sustaining. We continue to manage our Venezuelan business for the long run, confident that in a more favourable future, our commitment to that market will offer the right returns.” But analyst Yaron Reuven (of Reuven Capital Investments) insisted that the situation “is a much, much, worse scenario than the company is portraying. It’s almost become the equivalent of subprime mortgages. You really didn’t know what they were worth until it was already too late”.

BRAZIL | Petrobras strike. Oil workers went on strike on 1 November over pay and the future of Petrobras, the State-run oil company. The strike has resulted in a 13% drop in Brazil’s daily oil production. On 10 November Petrobras issued a note stating that production had fallen by 115,000 barrels a day, due to the industrial action by workers in the Campos Basin, off the coast of the city of Rio de Janeiro, where 80% of Brazil’s oil is located.

The oil company sought to assure consumers that there was no threat to the country’s energy supplies. However, it did warn of the economic consequences of the action. “With the loss of production, the collection of taxes that go towards the federal union, the states and municipalities….will be directly affected,” it said.

Oil workers are demanding an above-inflation pay-rise, and have rejected an offer of 8.1% by Petrobras. Inflation is currently running just under 10%. Unions are also unhappy at Petrobras’s refusal to hold talks over its disinvestment plan and its outsourcing of various tasks to other companies. Besides temporarily suspending some investments in refineries and other under-construction plants, Petrobras is also considering selling assets worth up to US$15.1bn between 2015-2016 in Brazil and abroad.

Petrobras cancelled talks with leaders of the oil union Federação Única dos Petroleiros (FUP), which were scheduled for 10 November, to try and bring an end to the strike. The FUP released a combative statement on the same day saying that “this is the moment to intensify [the strike]”. It claimed that Petrobras was downplaying the reduction in output from refineries caused by the strike, estimating that this could amount to some 2m barrels in total so far, worth R$400m (US$106m).

URUGUAY | Boosting foreign trade. President Tabaré Vázquez returned to Uruguay this week from a 10-day trip to France and Japan, where he signed a series of accords to boost trade and investment. There is significant scope to increase trade with Japan in particular. Uruguayan exports to Japan amounted to just US$8.8m in 2010 when Vázquez completed his first term in office, and they had only increased to US$13m by 2014. Finance Minister Danilo Astori, who made up part of the visiting delegation, sought to attract Japanese investment to Uruguay, especially in rice cultivation, technology and the service sector. Uruguay’s congress is poised to ratify an investment protection treaty signed by the two countries at the turn of the year. But Vázquez was frustrated in his hope to seal a deal with Japanese Prime Minister Shinzo Abe, who he met on 6 November, to open up the country’s market to Uruguayan meat exports. Abe said that a few remaining “technical aspects” needed to be ironed out but suggested that it was only a matter of time.

Vázquez, a qualified oncologist, began his visit to Japan by speaking at a conference in the private Jesuit research university in Tokyo, Sophia, where he elaborated upon how politics and science could “work together” to combat problems such as cancer and smoking. He described smoking as “the most brutal pandemic that humanity has suffered”, arguing that the illnesses caused by smoking – cardiovascular and pulmonary diseases and cancer – “cause 8m deaths worldwide every year, more than the number of people who perished in the Second World War”. Vázquez stressed, however, that it was “very difficult to fight against the entrenched economic interests of the producers and vendors of cigarettes” (see sidebar).

• Smoking

President Tabaré Vázquez waged a crusade against smoking during his first term in office, when Uruguay became the first country in Latin America to ban smoking in enclosed public places. His government put in place legislation that required large health warnings on cigarette packets and banned the sale of those branded as “light” or “ultra light”. This led to an acrimonious legal dispute with the tobacco giant Philip Morris International (PMI), which contended that the restrictions imposed by the Uruguayan government harmed its business and violated Uruguay’s trade deal with Switzerland, where PMI is based.

COSTA RICA | Poverty declines. Poverty fell to its lowest level in seven years, the national statistics institute (Inec) revealed last week after releasing the results of the 2016 national household survey. A total of 20.5% of Costa Rican households are living in poverty, Inec found. Not since 2009, when 18.5% of households were living in poverty, has the figure been as low as this. When President Luis Guillermo Solís took office in 2014, a total of 22.4% of households were living in poverty, a figure which fell to 21.7% last year, before declining to 20.5% this year (see sidebar).

Solís hailed what he described as “a lasting achievement”, although he acknowledged that “a lot remains to be done”. Solís attributed the reduction in poverty to his government’s focus on channelling resources to the most vulnerable sectors of society. This has principally been the result of a national poverty alleviation strategy, ‘Puente al Desarrollo’ (‘Bridge to Development’), designed to improve targeting and to make more efficient and transparent use of resources in a sustainable way.

PANAMA | Budget approved. Panama’s legislative assembly approved the draft budget for 2017 in a third and final debate on 27 October. At US$21.68bn, the 2017 budget is 7.7% larger than this year’s version. The budget is predicated on GDP growth of 6%, which even by Panama’s standards is high; a fiscal deficit of 1% (US$586m); inflation of 1.1%; and a tax take of US$5.88bn.

“It is an ambitious project that is being financed by [the country’s] growth, principally by means of US$550m of additional revenue from the Panama Canal next year, and an increase of US$500m in the tax take from the revenue and customs authority,” the finance minister, Dulcidio de la Guardia, said. He singled out the 6.7% increase in the budget next year for the health sector, coming to US$3.86bn, as well as a US$632m investment in the expansion of the Panama City metro, US$170m for universal grants, and US$122m for urban regeneration of Panama’s second-largest city and sea port of Colón.

The political opposition questioned the fact that US$1.51bn had been allocated to the ministry of the presidency, whose role is purely political, and just US$205m to the agricultural development ministry (Mida).

• Costa Rican poverty

In absolute terms a total of 307,270 households are living beneath the poverty line in Costa Rica, meaning that 10,390 families were lifted out of poverty over the course of the last year. A total of 95,004 families are living in conditions of extreme poverty. This equates to 6.3% of national households and is down from 7.2% last year. Rural poverty fell from 35.4% in 2015 to 25.7% this year, although this was partially offset by an increase in urban poverty from 16.6% to 18.6%.

The United Nations Security Council (UNSC) expressed “concern about the possible escalation of tensions” between Guyana and Venezuela on 16 April over their territorial dispute in the Essequibo region. The UNSC urged the two countries to “exercise maximum restraint” and stressed “the importance of regional actors playing a facilitating role in easing the tensions”.

Although both Guyana and Venezuela signed the Declaration of Peace and Dialogue of Argyle last December to resolve the longstanding dispute peacefully, and in line with international law, spikes of tension continue to emerge. The UNSC statement came in response to a letter from Guyana’s President Irfaan Ali, noting that his Venezuelan opposite number, Nicolás Maduro, had on 3 April signed the ‘Organic Law for the defence of Guayana Esequiba’. The law, Ali maintained, “cements Venezuela’s intent to annex more than two-thirds of Guyana’s sovereign territory and make it part of Venezuela”.

Maduro’s position, in contrast, is that the new law reflects the results of the referendum held last December when a majority of Venezuelan voters supported the country’s territorial claim to the region, currently occupied by Guyana. In his view the law “establishes the creation of state number 24, the state of Guayana Esequiba within the political and territorial organisation of the Bolivarian Republic of Venezuela”.

The two countries also have a longstanding and fundamental disagreement over how to resolve the dispute: Guyana supports arbitration by the International Court of Justice (ICJ); Venezuela favours direct negotiations. While chances of a Venezuelan invasion are low (not least because of ongoing US support for Guyana), there are indications that Maduro believes adopting a strongly nationalist stance may help him politically ahead of presidential elections due on 28 July.

Maduro had earlier claimed to have evidence that secret military bases have been built on the Essequibo by the US military’s Southern Command (Southcom) assisted by the Central Intelligence Agency (CIA). On 13 April Maduro called on the Bolivarian Militias (an official para-military formation) to develop “economic, social, and integration projects” to “recover” the Essequibo. Venezuela has also condemned Guyana’s auction of oil and gas exploration blocks in an offshore area of the Essequibo.

Boxes of documents

On 8 April Venezuelan diplomats delivered boxes of documents to ICJ headquarters at The Hague which, according to Vice President Delcy Rodríguez, corroborated “the historical truth, with evidence, that only we have title to the territory of the Guayana Esequiba”. The move was welcomed by Guyanese officials who said they have repeatedly urged Venezuela to make its case to the ICJ. But Venezuelan officials said sharing the documents did not imply that the country was accepting ICJ jurisdiction.

BRAZIL | Carbon market bill passes hurdle. The senate approved a bill on 13 November which proposes a regulatory framework for the trading of carbon credits. The bill seeks to establish the ‘Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa’ (SBCE), a system to which companies will need to register in order to be allowed to trade carbon credits in Brazil.

All companies that emit more than 10,000 tonnes (t) of greenhouse gases per year will be obliged to sign up to the SBCE. However, some media reports have suggested that the legislation represents a victory for the agribusiness lobby, as the bill in its current form would exempt farming companies from compulsory registration to the SBCE. The bill passed the lower chamber of congress in December last year, but since the senate has made changes to the text, the legislation will proceed to be reviewed again in the lower chamber.

BRAZIL | Vehicle production and sales rise in October. The national association of vehicle manufacturers (Anfavea) released its latest production and sales figures on 6 November. A total of 249,200 vehicles were produced and 264,900 were sold in October. The monthly production figure marked an increase from 230,000 units in September and from 199,800 in October 2023. Sales were up from 236,300 units the previous month and from 217,800 vehicles sold in the same month last year. In the first 10 months of 2024, the accumulated production figure came to 2.123m units, up 8.9% compared with January-October 2023. Total sales in the first 10 months of this year came to 2.124m, up 15% year-on-year.

BRAZIL | Trade surplus down. According to Brazilian government figures released on 6 November, the country’s trade surplus in October came to US$4.34bn, with a total export value of US$29.46bn and an import value of US$25.12bn. This latest monthly trade surplus is down 52.7% compared with the same month last year. October 2024 is the sixth consecutive month that Brazil has registered a year-on-year decline in its trade surplus.

ARGENTINA | UK bans all military exports. On 27 April the UK’s business secretary, Vincent Cable, announced that the country would stop issuing licenses to companies for exporting military equipment to Argentina. The UK had banned exports of military material that could be used to reinforce Argentina’s armed forces in 1998. However, the exports of equipment and materials used for maintenance purposes were permitted.

    According to Cable, the UK government has now decided that effective immediately, “no licences shall be granted for any military or dual-use goods and technology being supplied to military end-users in Argentina, except in exceptional circumstances”. Explaining the decision, Cable said that the government has revised its policy “in the light of recent actions by the Argentine Government aimed at harming the economic interests of the Falkland Islanders.”

    In this context Cable added that the UK government wanted to ensure that no exportable good will have the potential of being used by Argentina to impose an economic blockade of the Falklands or to inhibit the islanders’ legitimate right to develop their economy. In the last five years the UK has awarded 67 export licenses to companies supplying military maintenance equipment, such as parts for airplanes and vessel engines valued at £3.3m (US$5.35m).

CHILE | New fund for northern regions. As part of its attempts to address the various social conflicts currently affecting the country, the government proposed on 30 April to create a new US$200m development fund for the northern mining regions. The interior minister, Rodrigo Hinzpeter, explained that the Fondenor would seek to distribute these funds among the various mining communities in the north of the country according to population size.

    Since the beginning of the year, there have been numerous protests in the mining city of Calama, Antofagasta Region, where protestors are demanding that a larger portion of mining revenues be spent in developing the remote region’s infrastructure and services rather than being distributed around the country.  Antofagasta is the heart of Chile’s mining industry, Chile’s main source of export revenues, producing 53% of the country’s yearly mining output.

    Hinzpeter explained that the fund will provide mining communities with an additional source of funds, provided by the national treasury, to those that they themselves raise: “it is a source of funds that these communities never had access to before”, he said. Describing the proposal as “a very important project, that will help build institutionality that will allow us to show the mining communities that the country recognises their economic contribution,” Hinzpeter urged congress to approve the project as quickly as possible.

BRAZIL | An increasingly attractive security sector. On 26 April a study conducted by the US Security Industry Association (SIA) forecasted that Brazil’s security services and products market is expected to triple in size by 2017. According to the SIA study, due to the expected investments in security ahead of the 2014 World Cup and the 2016 Summer Olympic Games, Brazil’s security market, which is currently worth R$1.2bn (US$636.9m), is expected to swell to R$3.7bn (US$1.96) by 2017.

   SIA director, Frans Kemper, said that Brazil’s security industry “is on the rise” and is fully capable of catering for “events of this magnitude”, but it will need to continue importing security and surveillance products.

   Although Brazil currently has 100,000 security firms that produce and sell security systems, 55.6% of products used in Brazil’s security systems are imported.

BRAZIL | Petrobras to get compensation. Ecuador’s non-renewable resources minister, Wilson Pástor revealed on 30 April that the Ecuadorean State had agreed to pay US$217m in compensation to Brazil’s state-owned oil company, Petrobras, after unilaterally rescinding its contract to operate in the country. Since November 2010, Ecuador and Petrobras have been negotiating how much compensation the Brazilian firm should receive after it refused to accept the new terms proposed by the Ecuadoran government for oil companies to operate in the country. According to Pástor the company has agreed that once the compensation is paid in full it will desist from submitting any complaints at the international level.

• Pressure on the banks

On 1 May President Dilma Rousseff of Brazil warned the country’s private banks that she would continue to “firmly” demand that they reduce their interest rates. Despite the fact that Brazil’s central bank finally brought its benchmark Selic interest rate below double digits in April, Brazil still has one of the world’s highest interest rate spreads between what banks offer to savers and what they offer to borrowers. The government accuses private banks of failing to transfer their lower borrowing costs to businesses and individuals. Alluding to this, Rousseff said in a speech that “It is inadmissible that Brazil, which has one of the most solid and lucrative financial systems, continues to have some of the highest interest rates in the world”.

*** CURAÇAO ELECTION INDECISIVE.  The former Dutch colony, Curaçao held a general election on 19 October.  The election was forced when the minority government led by Gerrit Schotte of the Movementu Futuro Korsu (MFK) lost the support of the Pueblo Soberano (PS) and the Movishon Antia Nobo (MAN) [RC-12-10].

  The 19 October election was indecisive, giving the PS five seats out of 21, the MFK five seats, the Partido Antia Restruktura (PAR) four seats, the Partido pa Adelanto I Inovashon Soshal (PAIS) four seats, MAN two seats, and the Partido Nashonal di Pueblo (PNP) one seat.

   The result gave the outgoing MFK, PS, MAN coalition 12 seats compared with its pre-election 11 seats, and initially the same coalition moved to form a government, but this time under the leadership of the PS. The PS had fought the election on a platform of seeking full independence from the Netherlands. This was by no means the dominant theme of the election. (Following a popular referendum, in October 2010, Curaçao gained autonomy on all matters save defence and foreign affairs, while its supreme court remains in the Netherlands).  

   On 28 October, however, the MFK announced that it was unwilling to be part of the new coalition government.  Schotte said that PS leader Helmin Wiels was not a serious negotiator.  Wiels’ far-from conciliatory response was that the MFK was scared of the post-election screening process because some members had a dubious past.  He added: “I want a clean government.”

*** JAMAICA GOVERNMENT SAYS NO NEED FOR REFERENDUM ON CCJ.  Jamaica’s Minister of Justice Mark Golding has said that the country does not need to hold a referendum on its plan for full accession to the Caribbean Court of Justice (CCJ).  According to Golding, a two-thirds majority in the House of Representatives and the Senate would be sufficient to legitimize the change of jurisdiction.

  On 28 July 2012, the Jamaican government tabled three bills in the House that would pave the way for replacing the UK’s Privy Council as the final court of appeal for Jamaica.  The opposition has argued recently that a referendum is required, along with political co-operation, to entrench the CCJ as the final court of appeal.  The government, however, argues that 39 former British colonies have dropped the Privy Council as their final court of appeal without having had recourse to referendums and that there is no reason why Jamaica can’t do the same.

*** BARBADOS OPPOSITION CALLS FOR NEW CONSTITUTION.  At the Barbados Labour Party’s annual conference from 26-28 October, the opposition party’s leader, Owen Arthur, promised a new constitution as part of a 15-point plan to improve governance in Barbados by 2016.  He also pledged “an immediate and comprehensive reversal” of the Democratic Labour Party’s policies.  Arthur also pledged to return VAT to 15%.  It was raised in December 2010 to 17.5% in a move to counter a fiscal deficit that had rocketed to 8% of GDP from 4.8% in fiscal 2008/2009. Arthur told the BLP conference that the DLP government’s energy pricing and taxation policies “have raped the private sector and bankrupted almost every household in Barbados”. The DLP won the January 2008 general election by 20 seats to 10 for the BLP, and the next election is due by January 2013.