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COLOMBIA | Lowest growth since 2009. On 22 February, the director of Colombia’s national statistics department (Dane), Mauricio Perfetti, reported that Colombia’s economy grew by 2% in 2016, compared to 3.1% in 2015.

The 2016 year-end growth rate is the lowest posted by Colombia since 2009 (1.7%), and far from the peak of 4.9% observed in 2013. Even though economic activity increased by 1.6% during the last quarter of 2016, compared to 1.2% during the previous quarter, this was well behind the growth of the last quarter of 2015 (3.4%). Yet despite the disappointing 2016 result, President Juan Manuel Santos stressed that the economy managed to grow under difficult circumstances, including the reigning global economic uncertainty, low international oil prices, and the serious negative effects produced last year by the ‘El Niño’ climatic phenomenon, which produced severe droughts in Colombia.

According to Dane figures, the sectors that grew the most in 2016 were finance and real estate (5%); construction (4.1%); and manufacturing (3%). The finance sector was the main driver of growth accounting for 51.2% of the total. On the negative side was the mining and extractives sector, in which activity fell by 6.5%, marking six consecutive quarters with negative growth on the back of persistently low oil prices.

Oil extraction fell by 11.1% compared to 2015 whereas coal and metal extractions increased by 5.8% and 4.3% respectively. The poor performance by the extractive industries had a sharp impact on Colombia’s exports, which fell by 13% in 2016.

Analysts estimate that Colombia’s economy will grow by between 2.2% and 2.5% this year, as the country is likely to experience continued low demand for its exports, with its main trading partners expected to post moderate growth this year.

• Nespresso to sell Caquetá coffee

On 20 February gourmet coffee brand Nestlé Nespresso announced that it would soon offer a limited-edition coffee grown in Colombia’s southern Caquetá department. Caquetá is one of the areas most affected by Colombia’s internal armed conflict. However, Nespresso said that following the peace deal reached with the Fuerzas Armadas Revolucionarias de Colombia (Farc) last year it decided to launch the ‘Aurora de la Paz’ project under which 1,045 small-scale Caquetá coffee producers are to grow coffee for the firm. Although the project initially aims to support producers in Caquetá, there are plans to expand it to other areas long affected by the conflict. The Aurora por la Paz coffee range will be exported to Europe, Australia, Mexico, and New Zealand.

Paraguay’s primary elections on 17 December produced clear victories for presidential candidates in the two main political parties: the ruling Asociación Nacional Republicana-Partido Colorado (ANR-PC) and the main opposition Partido Liberal Radical Auténtico (PLRA). But the ANR-PC primaries resulted in a painful defeat for President Horacio Cartes and his supporters (Cartistas), as his handpicked successor was defeated by a rival backed by anti-Cartista factions. The opposition’s chance of winning the general election in April 2018 will be greatly enhanced if the ANR-PC is divided.

The division within the ANR-PC stems from the fact that many long-time members view President Cartes, a business tycoon who only formally joined the party ahead of the 2013 general election after he was offered the presidential candidacy, as an interloper who is now trying to exert full control over the party. These divisions deepened as Cartes shunned the party old guard from his cabinet opting instead to appoint young technocrats. Cartes’ decision to back the presidential candidacy of his young and inexperienced former finance minister, Santiago Peña (2015-June 2017), galvanised the anti-Cartista faction. It views Peña as a proxy for Cartes.

The reason why the ANR-PC turned to Cartes in the first place was to take advantage of the magnate’s capacity to fund expensive electoral campaigns. So it was widely expected that Peña would benefit from Cartes’ deep pockets, putting the anti-Cartistas at a disadvantage, but they succeeded in uniting behind the candidacy of Senator Mario ‘Marito’ Abdo Benítez.

Abdo Benítez is another young politician but one who has strong links to the ANR-PC old guard. With the anti-Cartistas fully aligned behind him, the primary contest became much more even as they exploited discontent with the Cartes executive among the party’s grassroots. In the end, Abdo Benítez secured a decisive victory: 50.93% of the 1.1m votes cast to Peña’s 43.29%. Abdo Benítez’s lead was so convincing Peña conceded defeat just hours after the vote.

• Marito

Senator Abdo Benítez is the 46-year-old son of Mario Abdo Benítez, the long-time personal secretary of General Alfredo Stroessner, the ruthless ANR-PC political leader who led Paraguay’s military dictatorship (1954-1989). This means that, despite his youth, Senator Abdo Benítez is closely associated with the ANR-PC old guard and its traditional conservative values. This association proved to be Abdo Benítez’s main strength in the ANR-PC party primaries, as it allowed him to present himself as ‘as an authentic Colorado’ and not a newcomer to the party like President Cartes and his protégé, Santiago Peña. But this could prove to be a double-edged sword, as many in Paraguay associate the Abdo Benítez name with the dictatorship and the atrocities committed by it.

Double blow

Further compounding the sense of defeat for Cartismo, the PLRA primaries delivered a resounding victory for a hard-line opposition candidate over a rival from a PLRA party faction that earlier this year supported the failed Cartista efforts to change the constitution and introduce presidential re-election to allow Cartes to contest next year’s presidential election. Efraín Alegre, the recently elected PLRA party president and defeated 2013 presidential candidate, roundly defeated his main rival, Carlos Mateo Balmelli, of the party faction led by Senator Blas Llano (Llanistas). Alegre obtained 60.94% of the over 400,000 votes cast to 26.17% for Balmelli.

Alegre, who staunchly opposed Cartista efforts to introduce presidential re-election and emerged as a prominent opposition figure, will now be able to contest the presidency next April at the head of an electoral coalition he has forged with the leftist Frente Guasú (FG) coalition. This is a revival of the electoral alliance that obtained a historic victory in the 2008 general election – when the ANR-PC’s stranglehold on power was finally loosened. Alegre and his FG running mate, Leo Rubin, will now be hoping to emulate this feat next year against a potentially divided ANR-PC, which may not be able to rely on Cartes’ financial backing to contest the election.

Congress taunts Cartes over budget

Paraguay’s unruly national congress has done it again. Just like last year, despite repeated calls from the Cartes administration not to “inflate” the draft national budget, the legislature has introduced substantial increases to the executive’s proposal for 2018. The approval by congress of an expanded 2017 draft budget last year led to President Cartes deciding to veto the budget, resulting in the unprecedented rolling over of the 2016 budget into this year. This in turn led to an institutional clash after the Cartes executive argued that it was licensed to issue debt this year for the same amount approved in the 2016 budget – something that was rejected by congress. However, in what looked like a deliberate attempt to challenge the Cartes executive, on 12 December the opposition-dominated senate decided to give final approval to an amended 2018 draft budget totalling G$73.6trn (US$13.2bn), some US$40m higher than the draft version sent down by the Cartes executive.

The version of the draft budget sent to Cartes by the senate contains a fiscal deficit of 1.8% of GDP, higher than the 1.5% fiscal deficit limit set by the law of fiscal responsibility (LRF) introduced by the Cartes administration in 2013. This has sparked speculation that Cartes could opt to veto the draft budget, which would result in the 2016 budget being rolled over yet again and bequeathed to the new government that will take over in August 2018.

Finance Minister Lea Giménez has insisted that failing to bring the 2018 draft budget in line with the LRF would not only be illegal but also undermine the country’s financial stability and potentially its credit ratings. Giménez has mooted the possibility of Cartes issuing a partial veto on the congressionally approved budget to repeal some of the generous salary increases for sectors such as public healthcare (an 8% increase) and education (a 16% increase) that were approved by congress in decisions that have been condemned as being electorally motivated.

• Cartes senate bid in doubt

As a result of the defeat of President Cartes’ preferred presidential candidate in the ANR-PC primaries, the future of his controversial bid for a senate seat in the April 2018 congressional elections is now in doubt. Former presidents are constitutionally banned from seeking election to congress. But relying on the precedent set by the case of the impeached former president Fernando Lugo (2008-2012), who was allowed to run for the senate in the 2013 elections, Cartes registered as a senate candidate, winning a nomination in the primaries. Yet following Cartismo’s overall defeat in the primaries, there is speculation that he may now look to abandon his senate bid and political life altogether.

Brazil’s police force is notoriously violent, with the high number of homicides committed by the police in Rio de Janeiro usually held up as an example of this. The phenomenon is not restricted to Rio city and state, however. São Paulo, the country’s largest metropolis with a very low (by Brazilian standards) homicide rate of 5.47 deaths per 100,000 inhabitants, is also suffering from a surge in police brutality.

On 1 December 2019, nine young people aged between 14 and 23 years old were trampled to death during a ‘baile funk’ party in Paraisópolis, one of São Paulo’s largest favelas. The confusion which led to the deaths was the result of an operation by the military police (PM), who reportedly entered the baile funk in pursuit of armed individuals, and allegedly used rubber bullets and tear gas against partygoers in self-defence.

Police accounts of what happened of course differed from those of residents and partygoers, who say the police ambushed them and used unnecessary force. But the operation was met with widespread criticism of police tactics, and notably of their systemic criminalisation of favela culture. The police officers concerned have been confined to desk duty while an investigation into their actions is underway, and São Paulo state governor João Doria was eventually forced to admit that a review of police protocols was necessary.  

The tragic episode opened up an opportunity for dialogue between favela residents and the authorities over policing tactics, as well as drawing attention to the Brazilian police’s socio-racial bias in their use of excessive force – which is increasing, even as crimes in general are falling. Data released by the São Paulo state public security secretariat on 24 January shows that the state recorded 2,778 homicides in 2019, its lowest figure ever and down from 2,949 in 2018. The homicide rate for the whole state now stands at 6.27 deaths per 100,000 inhabitants. However, deaths at the hands of the police have increased by 11.9% to a total of 733 in 2019.

The first weeks of 2020 have also seen incidents of non-lethal police brutality. Human rights groups denounced the police’s response to protests demanding free public transport in São Paulo city, organised by the Movimento Passe Livre (MPL) throughout the month of January and which have been marked by the police’s rough handling of demonstrators and arbitrary detentions.

Following repression at an MPL demonstration on 16 January, human rights organisations Article 19, Conectas Direitos Humanos, the São Paulo state council for the defence of human persons (Condepe) and the Instituto Brasileiro de Ciências Criminais (IBCCRIM) released a statement in which they “strongly condemn the police violence used against protestors and communicators”, noting in particular the use of force against women and raising concerns over the impact of this violence on the freedom of expression and right to demonstrate. 

Rio’s homicide statistics

Rio de Janeiro state’s Instituto de Segurança Pública (ISP) has released crime statistics which show a persistent and sharp increase in lethal police violence over recent years. The homicide rate for deaths at the hand of the police in the state stands at 10.5 deaths per 100,000 inhabitants in 2019, up from 3.9 deaths in 2015 and 6.6 in 2017, the year wilful homicides and overall lethal violence peaked at a rate of 31.6 and 40 deaths per 100,000 inhabitants, respectively. The rate for wilful homicides fell to 23.2 deaths per 100,000 inhabitants in 2019. Public security experts stress that the drop in violent crime cannot be attributed to increased police lethality.  

Hopes of saving 11 gold miners trapped in a flooded mine in Neira, a municipality in the central Colombian department of Caldas, were fading at the end of March. The accident has focused attention on the practice of illegal gold mining, which has been growing rapidly in Colombia and is associated with criminality, poor safety standards, mercury pollution, and deforestation.

The accident happened on 19 March, at an illegal gold mine known as ‘El Bosque’. Following heavy rains, the river Cauca broke its banks, causing a mudslide and flooding of the mine which trapped the miners. Rescue teams were working round the clock in shifts using mechanical diggers and water pumps to try and reach them. However, by 30 March the rescue teams acknowledged that the chances of finding survivors were low.

This is not the only recent accident associated with illegal gold mining. On 20 February three people died and two were injured at a gold mine in Buriticá municipality, in the north-eastern department of Antioquia.

Some analysts claim that illegal mining now rivals cocaine trafficking as a source of revenue for the country’s rebel groups and for its criminal organisations. In 2015 the gold mining industry in Colombia was estimated to be worth US$2.4bn a year, a number that is now believed to be significantly higher, not least because of subsequent big increases in international gold prices.

• Gold production

The latest data, for the third quarter of last year, shows Colombian gold production rose by as much as 58% year-on-year to 14.2 tonnes. Profits are high; gold is also attractive as a money-laundering vehicle for the country’s criminal organisations.

At a mining conference in February President Iván Duque said his government was looking at ways to stop the proceeds of illegal gold mining from funding rebel groups. One possibility would be to centralise gold purchasing through the central bank, a system that was in place before 1991 when the market was liberalised. The government has also created a new military unit to target illicit mines.

Ecuador’s President Guillermo Lasso insisted on 22 February that his government “has absolutely not interfered” in the leadership of the Consejo de Participación Ciudadana y Control Social (CPCCS), the autonomous body tasked with senior judicial and regulatory appointments and the oversight of public funds. His comments followed the removal of CPCCS president Sofía Almeida in an internal putsch on 9 February. Almeida has alleged “external interference” in the institution, which Lasso has previously indicated that he would seek to dismantle [WR-21-16].

With the CPCCS controlling key appointments in government bodies including the attorney general’s office, ombudsman’s office, national electoral council, and the comptroller general’s office, it holds an outsized influence over a raft of state institutions. Established in the 2008 constitution under leftist former president Rafael Correa (2007-2017), conservative parties have long accused it of serving Correísta interests. In April 2021, Lasso announced plans for a referendum to dissolve the CPCCS, calling it “the keystone for the abuse of power” under Correa and his successor, Lenín Moreno (2017-2021).

With a Lasso ally, Hernán Ulloa, now at the helm of the CPCCS, the president is facing scrutiny over whether he coordinated the vote that saw Almeida removed. Suspicions of external involvement were lent weight by a police cordon that was in place around the CPCCS headquarters on the day that Almeida was removed from office. In a 9 February statement, she said she had lodged a complaint with the attorney general’s office regarding the “interference of other branches of the state in the CPCCS’s work, with the clear aim of boycotting the processes for the appointment of authorities,” and called on Lasso to “respect the constitution”.

The turmoil shows no sign of subsiding. Both Almeida and Ulloa claim to be in charge of the institution, with Almeida refusing to leave the building for eight days after her ousting. The CPCCS headquarters were raided on 15 February by the attorney general’s office in response to “a report of the alleged crime of unauthorised access to information systems,” seemingly targeted at Almeida. The dispute has carried over into the national assembly, where on 17 February the administrative council (CAL) – the panel that vets legislation before it can proceed to a plenary vote – authorised an impeachment motion against Ulloa and three others in the seven-member CPCCS. That motion was presented by deputies from the Correísta Unión por la Esperanza (Unes) coalition, the centre-right Partido Social Cristiano (PSC), and the indigenous Pachakutik (PK).

Prison crisis

President Lasso announced on 23 February that some 5,000 prisoners will be granted early release in an effort to ease strain on the country’s overcrowded prison system, in which over 320 inmates were killed last year. He said that the government is aiming to “end overcrowding by the end of the year and therefore have a much more favourable environment for security and social rehabilitation”. Ecuador’s prisons are overpopulated by approximately 30%, with 39,000 inmates in a system designed for 30,000. Violence again broke out on 23 February, with one inmate killed in simultaneous outbreaks of unrest in two prisons in Quito and Cañar province.

Moves to unseat Llori

The president of the national assembly, Guadalupe Llori (PK), is facing a mounting threat to her leadership of the legislature, tweeting on 18 February that a “disgusting conspiracy” is afoot within the radical wing of her own party, which is likely to be backed by Unes and the PSC. PK is split between moderate deputies loyal to Llori and willing to work with the government, and those close to Leonidas Iza, president of the indigenous organisation Confederación de las Nacionalidades Indígenas del Ecuador (Conaie).

Eleven of PK’s 26 deputies are in open rebellion against Llori, who they accuse of assisting the passage of Lasso’s polarising tax reform in November [WR-21-48]. With the backing of the combined 61 deputies representing Unes and the PSC, the PK rebels would have the votes to remove Llori via a legislative resolution. Her replacement by a more radical figure would greatly increase Lasso’s already significant struggles in passing legislation, with particular implications for his planned labour reform [WR-21-39].

BRAZIL | Lula seeks Saudi investment. President Luiz Inácio Lula da Silva began a two-day visit to Saudi Arabia on 28 November, where he met Saudi Arabia’s Crown Prince Mohammed bin Salman to discuss a range of bilateral interests, such as renewable energy, agriculture, and defence, among other potential areas of economic cooperation. The Saudi sovereign wealth fund had previously planned to invest US$10bn in projects in Brazil, US$9bn of which will be invested in the next seven years.

In addition to government officials, the delegation included representatives from Brazilian companies, such as aircraft manufacturer Embraer, which signed three memorandums of understanding with the Saudi government and businesses to produce military aircraft as well as commercial aircraft for a flying taxis project.

BRAZIL | Mid-month inflation rises in November. The national statistics institute (Ibge) released its mid-month consumer price index (IPCA-15), showing an inflation rate of 0.33% in November. This marks an increase from the 0.21% mid-month inflation registered in October but a decrease from the 0.53% in November last year. The accumulated inflation rate for the 12 months until October came to 4.84%, down from the 5.05% inflation registered in the previous 12-month period.

The mid-month inflation in November 2023 was mainly driven by the food and drink category, which registered 0.82%. Of the nine categories of products and services measured for the IPCA-15, eight saw a rise in prices. Communication (-0.22%) was the only category of services to see a monthly drop in prices.

Following its third review of the Barbadian economy at the end of June, the International Monetary Fund (IMF) gave the green light for further disbursements.

The IMF is assisting Barbados with two major loans, the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). It said that all performance criteria and indicative targets for the third review had been met, allowing the immediate disbursement of US$19m under the EFF and US$37m under the RSF. Total cumulative disbursements under the two facilities are currently around US$187m.

In its review the IMF said the economy has recovered to levels registered prior to the coronavirus (Covid-19) pandemic and will remain strong this year due to a good performance by tourism and related sectors. GDP rose by 4.4% last year while inflation moderated despite bad weather, which put some pressure on food prices. By the end of this year annual inflation is being predicted at 3.1%.

The Bajan economy’s large current account deficit has begun to narrow, from 9% of GDP last year to a projected 7.4% this year. The IMF is not too concerned however, since the country is deemed to have ample foreign currency reserves, equivalent to over seven months’ worth of imports.

On the budget front the government exceeded the agreed primary surplus target for the 2023/2024 fiscal year (FY) and is now seeking a surplus equivalent to 4% of GDP in 2024/2025. Total public debt as a proportion of GDP has fallen back to pre-pandemic levels and the Bridgetown government has ratified its promise to reduce it further to no more than 60% of GDP by 2035.

The IMF notes a number of reforms and new initiatives are ongoing and designed to improve climate change resilience. They include a new Stormwater Management Act and an efficiency framework for government agencies and public lighting.

ECUADOR | Se dispara el crecimiento. La economía creció en 8,9% año en año en el segundo trimestre, de acuerdo con el director del banco central Diego Borja. El desempleo cayó de 7% en el primer trimestre a 6,4% en el segundo trimestre, el nivel pre-crisis. Borja dijo que la impresionante cifra de crecimiento del PIB significa que el crecimiento de 8,6% logrado en el primer trimestre no era un hecho aislado. Quizá. La principal razón del crecimiento del PIB, sin embargo, es una oleada de 17,2% en la inversión, “principalmente créditos de China”, para citar a Borja. Eso ayudó a impulsar al sector de la construcción, que se expandió en 25,9%, a través del incrementado gasto en obras públicas y viviendas, como también para proveer liquidez al sistema financiero para más créditos: el consumo interno se incrementó en 6,9%. Eso también explica cómo el crecimiento del PIB no petrolero llegó a 9,8%. El Presidente Rafael Correa, hablando en su transmisión semanal Diálogos con el Presidente, dijo que esa era la cifra más importante difundida por el banco central como la reivindicación de las políticas públicas del gobierno.

La oposición acusa a Correa de presidir un crecimiento conducido por la deuda, hipotecando el país hasta el cuello con China, que ha proveído préstamos multi-billonarios en dólares a Ecuador a cambio de ventas futuras de crudo. Los precios para el crudo Oriente de Ecuador se ha elevado en 14,6% en 2011. Tal como están las cosas, el gobierno está en una fuerte posición debido a que los precios del crudo han promediado US$103,40 por barril en el segundo trimestre, US$30 más de lo pronosticado en el presupuesto de 2011, de acuerdo con el banco central. Unido con las competitivas exportaciones, debido a un débil dólar, esto debería ayudar a mantener un alto crecimiento a través de la segunda mitad del año. Correa dijo que Ecuador requeriría 5% más de crecimiento del PIB por los próximos 30 a 40 años, para erradicar por completo la pobreza.

BRASIL | Esperan cosecha record de café. La Compañía Nacional de Abastecimiento (Conab), una compañía estatal que forma parte del ministerio de agricultura, anunció el 10 de mayo que espera que la cosecha de café de abril llegue a un record de 50,45m de sacos de café de 60 kilos cada uno, este año. Brasil es el principal productor y exportador de café del mundo, pero en años recientes ha visto menguar su producción.

La proyección de Conab representa un incremento de 16% sobre la cosecha del último año, pero más importante aún, un incremento de 4% sobre los 48,48m de sacos cosechados en 2002-2003, la cosecha más grande en su historia. Conab atribuyó el fuerte incremento en la producción al alto nivel de inversiones hechas durante el año pasado, que permitió a los productores incrementar el área total de plantaciones de 2,2m de hectáreas (ha) a 2,4m, un incremento de 3%.

CHILE | Inversión en energía solar. El 15 de mayo, la firma española, Eosol Energy, anunció su intención de construir una planta fotovoltaica de producción de energía con una inversión de US$615,9m, en Tocopilla, en el norte de Chile. De acuerdo con la firma, la planta, que se espera que produzca 196,6 megawatts de electricidad para la vasta área de Atacama, una de las principales áreas mineras del país.

El anuncio se produce justo un día después que un experto en energía de EU, Patrick McCully, declaró en una conferencia sobre energía en Santiago, que el norte de Chile tiene acceso completo a la más grande fuente de energía del mundo: el sol, que sin embargo no ha sido explotado por el gobierno.

McCully dijo que, dado que el costo de producir energía solar ha decrecido en todo el mundo, y que el norte de Chile era una ubicación de primer orden para establecer plantas de energía solare, el actual nivel de capacidad de energía solar instalada en el país era “ridículo”.

Por otra parte, McCully también señaló que las plantas hidroeléctricas tienden a producir más costos medioambientales que beneficios cuando se compara con la energía solar, y como resultado ellos han encontrado que son menos rentables económicamente en el largo plazo. En ese contexto, McCully alega que el gobierno chileno no debería haber permitido que continúe el controversial proyecto hidroeléctrico de HydroAysén en la Patagonia chilena antes de analizar otras alternativas. “Chile necesita voluntad política para resolver sus problemas de energía debido a que hay un puñado de compañías [de energía] que controlan el sector y el gobierno no hace nada para dirigirlo,” concluyó McCully.

ARGENTINA | Apretando los controles sobre el dólar. El gobierno argentino anunció esta semana que estaba ajustando los controles que ha impuesto sobre la venta de dólares de EU dentro del país. De acuerdo con la autoridad fiscal nacional (Afip), la decisión de apretar los controles sobre la venta de dólares en el mercado local fue tomada después de hallar “inconsistencias” en las declaraciones juradas presentadas por 12.000 solicitantes que estaban esperando comprar la moneda de EU en el mercado oficial.

Afip dice que ha encontrado que muchos solicitantes informaron de montos menores de dólares adquiridos, comparado con el año previo, en un intento de no sobrepasar el límite. Como resultado, la Afip dice que monitoreará más de cerca a “aquellas personas que compran moneda extranjera en el mercado oficial y luego la venden en el mercado paralelo”.

Desde octubre pasado, el gobierno de Argentina ha impuesto límites estrictos sobre el monto de dólares que los individuos pueden comprar, en un intento de impedir los largos niveles de fuga de capital. A todo potencial comprador se le requiere que someta una formal declaración jurada que luego es examinada por la Afip, que determina si el individuo tiene suficientes activos para justificar la compra.

De todos modos, el flujo de dólares hacia afuera parece continuar, y la imposición de controles más estrictos ha hecho surgir preocupaciones en Argentina que el gobierno podría ahora estar considerando establecer tasas de cambio diferenciales del dólar. Esto hizo que la Presidenta Cristina Fernández declare el 15 de mayo que su gobierno mantendría las políticas actuales y que “nada extraño, ningún impacto” al sistema estaba próximo.

“Hoy he leído algunos titulares que dicen que el viceministro de economía [Axel Kicillof] está pensando en [imponer] cuatro, o cinco tasas de cambio diferentes. Por favor [...] no crean nada de eso. Esta Presidenta es completamente responsable y predecible,” dijo Fernández.

• Lugo inicia gira por Asia

El 17 de abril el Presidente de Paraguay se ha embarcado en una gira por Asia, que incluirá visitas a Taiwán, India, Tailandia, Corea del Sur y Japón. La gira fue bautizada por la prensa local como ‘gira del estómago’ luego que el ministro de industria y comercio, Francisco Rivas, declaró que su principal objetivo era promover las exportaciones de alimentos paraguayos. “Esos países necesitan más y más alimentos, pero ellos tienen muy poco especio para cultivarlos. Debemos convertir eso en nuestra ventaja,” explicó Rivas. El canciller Jorge Lara Castro, agregó que eso también es una respuesta a la necesidad de América Latina de continuar construyendo una relación estratégica con Asia, vista crecientemente como fundamental para conducir el crecimiento económico global.

PARAGUAY-ARGENTINA | Preparándose para difíciles negociaciones sobre Yacyretá. El 17 de diciembre, el canciller de Paraguay, José Félix Fernández Estigarribia, dijo que el gobierno del Presidente Federico Franco se está preparando para renegociar el tratado binacional de Yacyretá con Argentina que gobierna la represa hidroeléctrica del mismo nombre compartida por los dos países.

     Después de tener una reunión con el director paraguayo de Yacyretá, Enrique Cáceres, el canciller Fernández Estigarribia señaló que hay secciones del tratado de Yacyretá que expiran en marzo del 2014 y que las negociaciones bilaterales deben iniciarse en los meses próximos. Él dijo que el gobierno paraguayo ya ha formado una comisión encargada de preparar las propuestas de cambio en el tratado; y ha pedido a todos los partidos políticos y expertos locales que participen en un amplio debate sobre la cuestión. Inquietantemente, él agregó que la propuesta “debe reflejar las nuevas aspiraciones y expectativas de Paraguay” con relación al futuro de Yacyretá, en particular el destino del exceso de energía [de Paraguay] producida en la represa.

     Bajo el actual tratado, ambos países tienen derecho a utilizar, cada uno, la mitad de la energía producida en la planta, y cualquier energía no utilizada por uno de los socios debe ser vendida al otro a un precio fijo previamente acordado. Paraguay actualmente usa alrededor del 30% de la energía de Yacyretá a la que tiene derecho, vendiendo el resto a la Argentina sedienta de energía a un precio de US$9 por megawatt/hora, lo que suma aproximadamente US$120m por año. Sin embargo, en años recientes Paraguay ha buscado ajustar el precio de tal manera que se aproxime lo más posible a la tasa de mercado, o que se le permita vender su energía a terceros a precio de mercado, todo lo cual ha sido rechazado por Argentina. El hecho que los pagos de Argentina por la energía de Yacyretá a menudo están vencidos dadas sus dificultades para adquirir los fondos que deben pagar en dólares (este año, Argentina solamente ha pagado US$15m de los US$130m que adeuda) es también una fuente de preocupación para Paraguay.

     Esta situación ha impulsado a Paraguay a buscar otras alternativas que le permitirían al país hacer mejor uso de la energía a la que tiene derecho, ya sea mejorando radicalmente la infraestructura de distribución de la energía de Paraguay y desarrollar más el sector industrial del país para incrementar los niveles de consumo interno. Siguiendo al ascenso al poder después del juicio político al presidente Fernando Lugo (2008-2012), que Argentina considera como un golpe y no reconoce a Franco, estos esfuerzos parecen haberse intensificado. En verdad, el Presidente Franco dijo que él hará todo lo que puede para que Paraguay utilice toda su energía y no vender nada más a sus vecinos. Paraguay también comparte la planta hidroeléctrica de Itaipú con Brasil, que está gobernada bajo un tratado con términos similares.

     Esto es preocupante para Argentina, que ya está preocupada acerca de sus futuras necesidades de energía. En verdad, Argentina ha estado presionando a Paraguay no sólo para incrementar la producción en Yacyretá, que actualmente opera a 60% de capacidad, pero para expandir la hidroeléctrica, se proyecta construir otra represa de US$600m en la rama adyacente de Aña Cuá del Río Paraná, además de construir una tercera planta hidroeléctrica bilateral de US$10mm sobre el Paraná en un sitio cercano a la ciudad fronteriza de Corpus Christi, en un esfuerzo por asegurar la futura provisión de electricidad.

     El mismo día que Fernández Estigarribia hizo sus revelaciones, el ministro de planeamiento de Argentina, Julio de Vido, dijo que “todo está listo para lanzar el proyecto Aña Cuá”, añadiendo que n o se tomaría ninguna decisión sobre el proyecto hasta abril del año próximo después que “el pueblo paraguayo exprese democráticamente quién es su líder”. El gobierno argentino podría estar buscando estancar las negociaciones sobre Yacyretá hasta después de las elecciones en Paraguay, en la esperanza que un gobierno más dispuesto llegue al poder.

BRASIL-REGION | Brote de BSE. El 18 de diciembre, el gobierno brasileño anunció que Egipto y Arabia Saudita habían suspendido temporalmente las importes de carne brasileña, luego de la confirmación por las autoridades brasileñas de un brote de Encefalopatía Espongiforme Bovina (BSE, siglas en inglés) o enfermedad de la ‘Vaca Loca’ que tuvo lugar hace años. Los países del oriente Medio han seguido el ejemplo de Japón, Sudáfrica y China, todos los cuales adoptaron medidas similares una semana después que las autoridades brasileñas confirmaron el 7 de diciembre que la causa de la muerte de una vaquillona en el estado sureño de Paraná en el 2010 fue un caso de BSE no-clásico.

     La decisión tomada por algunos de los principales exportadores de carne de Brasil se produce a pesar del hecho que las autoridades zoo-sanitarias locales e internacionales explicaron que el caso de BSE no-clásico significa que no hay riesgo de un brote de la enfermedad o que el mismo represente un “inminente riesgo a la salud humana”.

     El gobierno brasileño dijo que había estado en contacto con todos los países a los cuales exporta carne, en un intento por evitar que ellos adopten más restricciones comerciales. Brasil es el más importante de carne del mundo, con 1,02m de toneladas exportadas en el 2011, y el sector es importante para su economía.

• Planes de inversión de Uruguay

El 14 de diciembre, el Vicepresidente de Uruguay, Danilo Astori, reveló que el gobierno tiene planes para implementar un programa de inversión pública y privada en infraestructura de US$2mm en los próximos dos años. Astori dijo que el gobierno estaba buscando aprovechar la ventaja de la actual “bonanza económica” en Uruguay para hallar empresarios interesados en trabajar para mejorar la envejecida infraestructura de Uruguay, “una cuestión pendiente para el país”. El ministro de economía de Uruguay, blanco e críticas, Fernando Lorenzo, reveló el 17 de diciembre que el gobierno espera para este año el crecimiento económico sea de “no menos del 4%”, lo que significa que el crecimiento de Uruguay será más alto que el promedio regional de 3,2% por octavo año consecutivo.

En un sondeo conducido por Transparencia Internacional el año pasado, los brasileros pusieron a los partidos y a la legislatura al tope de la lista de las instituciones más corruptas del país. La elección de Renan Calheiros, del aliado al gobierno Partido do Movimento Democrático Brasileiro (PMDB), como presidente del senado de Brasil, la tercera posición política más alta del país, es una buena indicación del porqué.

Calheiros renunció de la misma posición en el 2007 a fin de evitar un juicio político después de haber sido acusado de usar el dinero de un grupo de cabildeo para pagar el mantenimiento de una ex novia y de usar documentos falsos mientras mentía sobre el escándalo. Actualmente, él afronta nuevos cargos, con el más alto fiscal del país acusándolo de soborno, y de usar documentos falsos para justificar pagos ilegales que él estaba recibiendo.

El senado eligió ignorar estas acusaciones y lo eligieron por un margen de 56 votos a 18. Cinco días después de su elección, el diario, O Estado de São Paulo, informó que el hijo de Calheiros, Renan Filho, un diputado en el congreso, había usado expensas parlamentarias para pagar honorarios legales de él y su padre relacionados con juicios privados.

Calheiros ocupará el cargo por dos años, en reemplazo de José Sarney, otro veterano político del PMDB y ex presidente (1985-1990). Sarney tenía una buena relación con el ex presidente Lula da Silva (2003-2011), y hasta ahora en tiempos de la Presidenta Dilma Rousseff en el poder, el PMDB ha sido un socio confiable. Dado que Henrique Alves, también del PMDB, ha sido elegido como presidente de la cámara de diputados, el ejecutivo buscará aprovechar la continuada cooperación de su aliado. Sin embargo, está claro que el gobernante Partido dos Trabalhadores (PT) aún desconfía de sus aliados del PMDB: la dirección del PMDB estima que 70 de los 87 legisladores federales del PT votaron por el rival de Alves, Júlio Delgado, del Partido Socialista Brasileiro (PSB).

La elección de Alves era parte de un acuerdo con el PT, bajo el cual el PT retendría el cargo de presidente en los primeros dos años del periodo de Rousseff, y el PMDB por los segundos dos años. En su discurso de campaña ante la cámara baja, el 4 de febrero, Alves prometió concentrarse en el presupuesto del 2013, los royalties petroleros, y la legislación para la reforma fiscal así como también los votos sobre la ratificación de más de 3.000 vetos presidenciales pendientes, que la oposición alega que deberían tener precedencia por sobre nuevas legislaciones.

El 5 de febrero, una votación sobre el presupuesto 2013 fue pospuesta por Calheiros y Alves hasta después del Carnaval. Dado que la mayoría de los diputados y senadores habían abandonado Brasília después de la elección de Alves, el gobierno y sus aliados estaban preocupados de que un voto sobre el presupuesto no tuviera quórum. Una votación sobre el presupuesto ahora está programada para el 19 de febrero.

Sube la inflación de enero

La inflación en enero, un 0,86%, fue el nivel mensual más alto desde el 2003. El Índice de Precios al Consumidor (Ipca) en enero se elevó un 0,07% comparado con diciembre (0,79%), de acuerdo con datos difundidos el 7 de febrero por el Instituto Brasileiro de Geografia y Estatística (Ibge).

Los incrementos en los precios de alimentos y bebidas fueron culpados por el salto, con las severas lluvias de enero conduciendo hacia arriba el precio de los vegetales. El Ipca podría haber sido incluso más alto, si no fuera por los recortes a los costos de la energía y el aplazamiento a los aumentos del costo del pasaje en el transporte público, ambos ordenados por el gobierno federal.

La inflación se ha convertido en una gran preocupación en Brasil ya que un bajo récord de desempleo y crecientes salarios han impulsando la demanda por servicios. El banco central, que ha mantenido las tasas de interés en su bajo nivel récord del 7.25%, está enfrentando crecientes críticas por prometer costos de préstamos estables, mientras que los precios al consumidor se aceleran rápidamente.

• Violencia en Santa Catarina

El sureño estado de Santa Catarina experimentó una ola de violentos ataques a la policía y la propiedad durante la semana pasada. Las autoridades dicen que los ataques parecen ser una respuesta a las operaciones de la policía contra las bandas de tráfico de drogas y al tratamiento más riguroso de los reclusos en las prisiones del estado. El pasado noviembre, una ola de violencia similar ocurrió en la misma región, durando alrededor de una semana y tras una serie de incendios, tiroteos, y asesinatos en São Paulo.

Brazil hardly boasts a stellar reputation as a promoter of free trade. Over the past few years the World Trade Organisation (WTO) has often criticised the country for adopting protectionist measures. Now the man tasked with defending Brazil’s reputation at the WTO, Roberto Azevêdo, has been chosen as its new director. Ahead of the final nomination, Azevêdo insisted that his country’s track record would have no bearing on his performance in office. “As director of the WTO, I will not be representing Brazil,” he said. His supporters argue that his critical, go-slow approach to trade liberalisation will prove useful in keeping developing economies on-board as the organisation tries to restart stalled global trade talks.

Azevêdo’s victory, at the expense of the candidacy of the Mexican Herminio Blanco (a key architect of Nafta), was hailed as a sign of “the transformation of the global order” by Brazil’s foreign minister, Antonio Patriota. Brazil’s President Dilma Rousseff, who personally promoted Azevêdo, issued a congratulatory note in which she called on the organisation “to give a new, equitable and vigorous impulse to world trade, fundamental for the [global] economy to enter into a new phase of growth and social justice”.

In his first interview upon taking office, Azevêdo issued a warning about the “threat of protectionism” and sounded an ambitious note. The Brazilian acknowledged that the WTO was going through a crisis and that it needed to “regain relevance and importance”. In recent years, the WTO has been used more as a forum to settle trade disputes and monitor policy than as a host for serious trade negotiations. But Azevêdo said that his priority would be the conclusion of the Doha Round, the global trade negotiations which have now been going on for 13 years. “We must find a solution. This will unlock the WTO”, he said. As a WTO insider who has taken part, in various capacities, in virtually all WTO ministerial conferences since the launch of the Doha Round, his supporters believe he is well placed to do so.

Among the hagiographies in the Brazilian press for Azevêdo, there were a few notes of caution. Marcos Troyo, a commentator for the daily, Folha de São Paulo, welcomed Azevêdo’s appointment but wondered whether Brazil had sufficient clarity of vision in its international diplomacy to capitalise on the prestige of the position. “Brazil seems to know what it wants for the world. Not necessarily what it wants of the world”, he wrote. He bemoaned an ‘ideologically driven’ foreign policy and complained that “instead of promoting [domestic] micro reforms and setting up robust commercial agencies in the global cities of North America, Europe and Asia”, Brazil prefers to open diplomatic outposts in Africa. This gets votes and sympathy in international forums, but little in the way of trade flows, he suggested.

• Ports law docks at two minutes to midnight

On 16 May Brazil’s federal chamber of deputies, quickly followed by the senate, finally approved new legislation to open up the country's ports sector to new private sector investment, just hours before a provisional measure (MP 595) expired at midnight.

The senate voted in favour by 53 votes to seven, with five abstentions. The MP, first signed by President Dilma Rousseff in December 2012, will now become law, replacing the previous ports law (Law 8,630, 1993), but it was a tough battle for the executive, underlining yet again its erratic relationship with the chamber of deputies. The new legislation will allow for the executive’s new public-private framework plan to attract US$27.6bn in investment and the concession of some ports to private sector companies. The government intends to go ahead with concessions worth an estimated US$372m to restructure ten ports this year and has identified as its first priorities seven ports in Santos and three in Belém.

Brazilian port terminals charge some of the world's highest prices to move goods. Some of the high cost stems from labour agreements; but red tape, taxes and lack of competition between terminals are also to blame. The draft bill would allow more private operators to handle cargo at state-owned ports and privately owned ports to handle third-party cargo in general. Rousseff has repeatedly stressed the need for investment in infrastructure to lower the infamous ‘Custo Brasil’ and make the country more globally competitive.

Port workers went out on strike in recent months in objection to plans to shift management responsibilities to the central government and away from the port authorities. The proposals would allow new (privately-run) terminals to directly recruit workers, ending an obligation to source them through a central agency, Órgão Gestor de Mão de Obra (Ogmo). The unions are also concerned that the new rules would allow private ports to operate under rules that would lower costs for exporters compared with the public ports.

• Infrastructure

According to the 2012-2013World Economic Forum’s Global Competitiveness Report, Brazil ranks 107^th of 144 countries assessed for the quality of their infrastructure, putting it below all its fellow Brics (Russia, India, China and South Africa) and almost every other emerging country including the Philippines, Indonesia, Mexico, Cambodia and Thailand. Brazil’s ports and airports are crucial to its success as a commodities exporter, but their poor quality puts Brazil among the ten worst countries in the world.

• Brazil’s star ascends again among investors

Brazil’s treasury said it raised an estimated US$750m in its 9 May reopening of its dollar-denominated benchmark global bond maturing in 2023. The State oil giant, Petrobras, later sold a record US$11bn in new debt, while the national petroleum agency was overwhelmed with bids of US$1.4bn for its first oil auctions in five years. Elsewhere, the German auto manufacturer Volkswagen (VW) announced in mid-May that it would invest R$8.7bn (US$4.3bn) in the Brazilian market to 2016. Finally, Brazil received US$65.3bn in foreign direct investment (FDI) in 2012, on figures from the United Nations Economic Commission for Latin America & the Caribbean, down slightly (2.0%) on 2012 but still accounting for 41% of regional FDI inflows.

GUATEMALA | Afianzando los lazos con México. El Presidente de México, Enrique Peña Nieto, ha cumplido su primera visita de estado oficial a la Ciudad de Guatemala, donde él se reunió con su par guatemalteco, Otto Pérez Molina. Durante la visita de Peña Nieto, que tuvo lugar el 31 de mayo, los dos líderes declararon que impulsar los lazos bilaterales será una prioridad, y acordaron establecer cuatro grupos de trabajo para monitorear la infraestructura de las aduanas & las áreas de frontera; energía; programas sociales; y seguridad.

Una delegación guatemalteca encabezada por el ministro de economía, Sergio de la Torre, visitó México a fines de febrero, con el objetivo de estimular el comercio y la inversión. Según cifras del Banco Central de Guatemala (Banguat), el comercio bilateral totalizó US$2,46mm en el 2012, con la balanza significativamente a favor de México –las exportaciones mexicanas a Guatemala sumaron US$1,91mm del total. De acuerdo con Banguat, México es la fuente del 11% de las importaciones de Guatemala, segundo sólo ante EU (38%), mientras que es el cuarto mayor mercado exportador de Guatemala, tomando el 5% de las exportaciones totales, después de EU (40%); El Salvador (11%) y Honduras (8%).

REGION | Adjusting to stronger dollar. On 22 August Brazil’s central bank (BCB) announced that it was launching a US dollar swap programme to inject at least US$60bn in local currency markets in a bid to strengthen the weakening local currency, the Real. The surprise announcement came after the US Federal Reserve (Fed) confirmed that it plans to phase out its ‘Quantitative Easing’ (QE) policies by next year. The BCB’s move will only heighten concerns about the state of Latin America’s largest economy.

Brazil is already grappling with rising inflation as well as a slowdown in economic activity, all of which are in part stoked by a weaker Real. In addition the BCB’s actions could prompt other countries in the region which are facing similar pressures to follow suit. The Real has depreciated by 16% against the US dollar this year, largely as a result of the Fed’s announcement back in June that QE, with which it flooded the markets with dollars, would be phased out. Although the BCB has already spent US$45bn in local currency markets so far this year in a bid to arrest the Real’s decline, the exchange rate reached a four-year high this month and it now stands at R$2.45/US$1, above the R$2.00/US$1 benchmark rate considered to be acceptable by both Brazilian businesses and the government. A BCB statement said that the bank will now offer US$500m in US dollar swaps from Mondays to Thursdays in the local futures market and US$1bn in the local currency spot market on Fridays until the end of the year.

The aim of the measure is to provide “[foreign] currency coverage for all economic agents and liquidity in the currency exchange markets”. The BCB also left open the possibility of extending the measure if the value of the Real continues to fall. “If found to be appropriate, the BCB will conduct additional operations”, the statement reads. While the BCB is primarily concerned that the rising exchange rate is stoking inflation, which is already running at close to the top end of its target range of 2.5%-6.5%, its intervention could also help maintain investment levels in an economy that is already misfiring. A weaker Real hampers investment levels as Brazilian entrepreneurs find it more difficult to buy relatively more expensive capital goods. This negatively impacts economic activity, affecting growth. Indeed, after the BCB’s announcement Finance Minister Guido Mantega told the local press that the “excessive” upsurge in the value of the dollar, although a “passing trend”, was affecting the domestic economy. Mantega said that as a result the government would once again be revising down its growth forecast for the year from 3% to 2.5% when it presents its 2014 budget proposal later this week.

This is the sixth time that the official growth forecast for 2013 has been revised down from its original figure of 4%. The Real is not the only currency that has been losing value against the US Dollar, a phenomenon spreading to all of South America. It is also particularly being felt in neighbouring Argentina where the parallel ‘blue’ US dollar exchange rate has again surged to Ar$9.15/US$1, its highest level in three months. Meanwhile, and more significantly, the official (government-set) exchange rate has also crept up to Ar$5.62/US$1, its highest level since 2009 and amounting to a 14.27% depreciation since the start of the year. The exchange rate movements in Argentina are not only the result of the general depreciation of local currencies against the dollar, but in the case of the official exchange rate, the central bank (BCRA)’s determination to maintain the Peso/Real exchange rate stable so as to keep Argentine products competitive. But this comes at a price as BCRA has to use its dwindling foreign reserves. BCRA has spent over US$6bn of its foreign reserves and these now stand at a three-year low of US$37bn.

Over in Uruguay the exchange rate has also been affected by the general appreciation of the dollar and the effects have been compounded by the fact that the value of the Uruguayan peso is affected by what goes on in both of its neighbours. The exchange rate in Uruguay currently stands at Ur$22.19/US$1, a 14.14% depreciation since the start of the year. While the increase has been largely welcomed by the central bank (BCU), which has pointed out that it has helped to balance out the exchange rate distortions between the Uruguayan peso and the Real and the Argentine peso (Uruguay’s exchange rate is the most free floating of the three), it has been wreaking havoc in the local financial system. The BCU has said that the relative depreciation of the regional currencies has resulted in its real exchange rate (TCR) indicator, which measures the value of the peso compared to other currencies and which is used as a proxy measure of competitiveness, to increase by 0.54% in the first seven months of 2013. Last year the TCU fell by 12.64%, its largest decline since June 2010.

• The best business climate

On 21 August the economic studies centre at Brazil’s Fundação Getúlio Vargas (FGV) released the July instalment of its Latin American business climate index, which found that for a second quarter running Paraguay had the best rating. Paraguay received a score of 7.3 in the quarterly index compiled by FGV in collaboration with the Leibniz Institute for Economic Research at the University of Munich (IFO). While encouraging, the figure was substantially lower than the 15.4 score that Paraguay was awarded back in April. The lower score is in line with the regional trend as the business environment rating for the entire region fell from its high point of 5.5 at the beginning of the year to 5.2 in April and to 4.2 in July. According to FGV, since the start of the year the region has experienced a gradual deterioration of its current economic situation and indicators of future expectations.

ECUADOR-VENEZUELA | Aguda caída del comercio bilateral. En una entrevista con el diario ecuatoriano, El Comercio, publicada el 4 de marzo, el presidente de la Cámara Ecuatoriana-Venezolana de Comercio (Caceven), Milton Ortega, dijo que las exportaciones ecuatorianas a Venezuela tuvieron una caída del 49% en el 2013.

El resultado negativo es particularmente sorprendente teniendo en cuenta la cercanía ideológica y los lazos políticos que vinculan a los gobiernos liderados por el Presidente de Ecuador, Rafael Correa, y su contraparte de Venezuela, Nicolás Maduro. Ecuador es miembro de la Alianza Bolivariana para los Pueblos de Nuestra América (Alba), la iniciativa regional de integración económica liderada por Venezuela, pero a pesar de las varias promesas de promover una mayor integración entre las dos naciones, Ortega dijo que los empresarios ecuatorianos no se sienten lo suficientemente confiados como para exportar a Venezuela, debido a los problemas económicos internos que afronta aquel país.

En particular, Ortega explicó que como resultado de las dificultades que tienen los empresarios venezolanos para conseguir dólares en los mercados de divisas controlados por el Estado para pagar por las exportaciones, los importadores venezolanos deben actualmente a los exportadores ecuatorianos US$170m. De hecho, Ortega dijo que Caceven calcula que el 20% de la caída en las exportaciones del año pasado es resultado de la incapacidad de los importadores venezolanos de cumplir con sus pagos.

Más preocupantemente, Ortega atribuye al restante 40% de la caída a la revisión oficial de las cifras de exportación como consecuencia de las irregularidades descubiertas en las transacciones ecuatorianas de exportación a Venezuela, conducidas bajo el Sistema Unitario de Compensación Regional (Sucre), el sistema virtual de cambio de moneda creado por el gobierno venezolano en el 2010 como una manera de eludir sus problemas de liquidez de moneda extranjera y promover más el comercio entre los miembros de Alba.

Hasta la fecha solamente Ecuador y Venezuela utilizan regularmente el sistema Sucre para realizar transacciones comerciales. Pero el año pasado, las autoridades ecuatorianas y venezolanas anunciaron el lanzamiento de una investigación conjunta sobre una serie de irregularidades descubiertas en algunas transacciones bajo el sistema Sucre que datan de hasta el 2010 [IL-13-27]. Al parecer la evidencia sugiere que algunas de las transacciones no solamente fueron significativamente sobrevaluadas, sino que eran ‘falsas’, lo que resultó en millones de dólares extraídos irregularmente del sistema. Mientras que el año pasado el gobierno ecuatoriano informó que después de conducir una revisión del sistema Sucre, ahora no existían “deudas comerciales pendientes” entre los dos países, después de la revisión del valor de las transacciones bilaterales hechas a través del Sucre, que se ha contraído en unos US$81,8m entre el 2012 y el 2013.

VENEZUELA | Las exportaciones de petróleo a EU alcanzan caída récord. El 27 de febrero, la Energy Information Administration (EIA) de EU difundió sus últimas cifras de importaciones de petróleo, que muestran que las importaciones de petróleo venezolano han promediado 796.000 barriles por día (bpd) en el 2013, lo que representa un 17% menos que en el 2012 y la cifra promedio más baja desde 1988.

El petróleo es el principal producto de exportación y fuente de ingresos de Venezuela. A pesar de toda la retórica anti-EU que emana del gobierno venezolano desde que el fallecido ex presidente, Hugo Chávez (1999-2013), llegó al poder por primera vez (y que ha continuado bajo su sucesor, el Presidente Nicolás Maduro) EU permanece como el principal mercado exportador del petróleo venezolano. Consecuentemente, las cifras de la EIA han incrementado las preocupaciones en Venezuela de que la vasta riqueza petrolera del país y su industria petrolera, que está dominada por la petrolera estatal Petróleos de Venezuela (Pdvsa), han sido seriamente mal administradas por los sucesivos gobiernos Chavistas.

Un artículo publicado en el diario local El Nacional, el 1 de marzo, después de difundirse las cifras de la EIA, señaló que las exportaciones petroleras venezolanas llegaron a su pico histórico de exportaciones a EU en 1998, un año antes de que Chávez asuma el poder, cuando Venezuela embarcaba un promedio de 1,7m bpd a EU. Sin embargo, desde el inicio de la ‘Revolución Bolivariana’ de Chávez, se ha exprimido en mucho mayor medida a la ‘vaca lechera’ de Pdvsa más que nunca antes: esperando que financie un amplio conjunto de proyectos políticos regionales e internos, dejando poco para reinvertir en la firma a fin de asegurar un incremento en la capacidad de producción en el futuro.

Por lo tanto, no sorprende que los niveles de producción de Pdvsa hayan permanecido por largo tiempo estancados; lo que ha resultado en una caída en las exportaciones de petróleo, así como también una creciente importación de combustibles, pues la capacidad de refinación de Pdvsa ya no es capaz de satisfacer la demanda interna. De acuerdo con cifras de EIA, el año pasado, en promedio, Venezuela importó 84.000 bpd de combustibles refinados de EU, sólo 1.000 bpd menos que en el 2012, cuando la capacidad de refinación de Pdvsa se vio severamente limitada después de la explosión de su refinería de Amuay.

• Vuelve a elevarse la producción de café en Colombia

La Federación Nacional del Café (FNC) de Colombia anunció el 4 de marzo que la producción nacional de café para el periodo marzo del 2013-febrero del 2014, llegó a 11,3m de bolsas (de 60kgm), o un 38% más que en el anterior periodo comparable. En años recientes, la producción de café en Colombia, el tercer mayor productor del mundo, ha estado declinando debido una epidemia del hongo de la roya del cafeto. Para abordar este problema, los productores de café de Colombia unieron fuerzas con el gobierno para lanzar un programa de renovación de las plantaciones de café en el 2012, introduciendo nuevas variedades de plantas más resistentes a la enfermedad a través de las regiones productoras de café del país. Una declaración de la FNC vinculó a los últimos exitosos resultados a este programa, que “permitió la introducción de plantas de café más jóvenes y resistentes a las enfermedades […] un factor clave en la creciente productividad”.

BRAZIL | FHC fears Brazil losing its gains

At the annual gala event held in New York to strength US-Brazilian relations, former president Fernando Henrique Cardoso (1995-2003), warned that Brazil could lose the gains it had made over the past few decades. The event brought together 450 businesses from both countries, as well as Cardoso and former US president Bill Clinton (1993-2001).

Though Cardoso, a member of the opposition Partido da Social Democracia Brasileira (PSDB), would not be drawn on the corruption scandal at Petrobras, the state oil company, and refused to mention President Dilma Rousseff by name, he was clearly critical of the direction of her government.

“Gradually, we have been returning to the unbridled expansion of the state sector,” Cardoso said. “To the neglect of the public accounts, to the megalomaniac projects that characterised the failure of past governments.” Cardoso’s criticism was not only limited to the economic; he was scathing of the current government’s apparent inaction on “the violation of democratic practices” in Venezuela, and dismissive of Rousseff’s call for “dialogue” as a possible solution for the problems generated by the emergence of Islamic State.

BRAZIL | No change on oil rules

On 14 May Brazil’s President Dilma Rousseff said that the policy of requiring Brazilian participation in the oil and gas production from the so-called offshore ‘pre-salt’ oil fields would not change under her government.

The national content rules, which require foreign companies to work with the state-run oil firm, Petrobras, in the deepwater pre-salt fields, have been blamed by some for excessive costs and project delays.

Many analysts argue that Petrobras does not have the capital or the management expertise to be the sole operator of the massive oil and gas finds off the coast of Rio de Janeiro state, particularly given the current corruption scandal roiling the firm.

CHILE | First quarter growth exceeds expectations

Chile’s GDP grew by 2.4% year-on-year in the first quarter of 2015, according to official figures released by the central bank (BCC) on 18 May. This level of economic growth was above market expectations, with local economists forecasting that the quarterly GDP figure would come in at between 2% and 2.2%. As such, the result is a boon for the government led by President Michelle Bachelet as it marks a moderate upturn in domestic economic activity after Chile posted real GDP growth of 1.9% last year on the back of underwhelming growth of 1% and 1.8% in the third and fourth quarters of 2014 respectively.

The BCC figures show that the higher-than-expected growth was driven by increased activity in all economic sectors, except for fishing (which fell by 13.5%) and manufacturing (which fell by 0.6%). In contrast, the sectors that exhibited the most dynamic growth in the first quarter were telecommunications (9.4%) and agriculture (8.5%). Meanwhile, other key sectors had moderate but still positive growth, with the services sector growing by 3.8%; the mining sector growing by 3.3%; and construction growing by 2%. According to the BCC report that accompanied the figures, the increase in activity was generally driven by higher levels of domestic demand, which increased by 1.3% on the back of a 2.2% year-on-year increase in household consumption coupled with a 1.7% year-on-year fall in investment due to lower levels of gross fixed capital formation (GFCF) i.e. investment in fixed capital goods.

Government spending increased by 5.6% as per the budget plan and was in line with the 5.5% increase registered in the previous quarter. In terms of the external sector, exports increased by 1.4% while imports fell by 2.0%. The BCC points out that the increase in exports was primarily due to an increase in agricultural sales, particularly of fruit, but also of industrial products, all of which helped to counter the effect of a fall in copper production, Chile’s primary export product. If Chile’s domestic economy can maintain this level of activity, GDP growth could exceed the consensus forecast of 2.7% growth this year included in the BCC’s April monthly survey of local economists.

• Bond issue

On 19 May Chile’s finance minister, Rodrigo Valdés, announced that the government had issued a total of €1.39bn (US$1.55bn) of sovereign bonds in international markets. According to Valdés the transaction consisted of two bond issues, one worth €440m and another worth €950m, which will be used to finance the fiscal deficit and renew maturing debt. Valdés explained that funds raised by the issue were “not new money for new initiatives, but part of the normal programme when one has a financial deficit and has to finance it”. Valdés added that the issue was denominated in Euros and and not in US Dollars as part of the Chilean government’s policy to diversify the currencies in which it issues debt in order to better balance risks.

BOLIVIA | Spanish aid. Francisco Sancho, the coordinator for the Agencia Española de Cooperación Internacional para el Desarrollo (Aecid), announced on 12 November that the Spanish government has agreed to provide an average annual donation of €25m (US$28.29m) to improve water, hygiene, women’s rights, and governability in Bolivia until 2021. One priority is increasing accessibility to drinking water in various departments around the country, as well as the treatment of waste water.

Other projects focus on culture and tourism, such as the restoration of historic churches and Jesuit missions. The figure of €25m per year is in fact lower than the €31m per year that was donated from 2011-2017, but Sancho hailed a relationship that was “renewed” following a visit from Spain’s President Pedro Sánchez in August.

COLOMBIA | New international airport coming to Amazon. The Colombian government announced on 9 November the construction of the Aeropuerto ‘Alfredo Vásquez Cobo del Amazonas’ in the city of Leticia, the capital of Amazonas department, which sits on the triple border with Peru and Brazil. According to Juan Carlos Salazar, director of the Unidad Administrativa Especial de Aeronáutica Civil (Aerocivil), the project will turn the area into a hub for aviation between the three neighbouring countries. Salazar hopes that the new airport will boost tourism to the Amazon region when it comes into service in the middle of next year.

ECUADOR | Judge rejects petition to stop mining work. Ecuador’s attorney general’s office announced on 10 November that the exploratory work at a mining concession in Santa Ana Cotacachi is free to continue. Local judge Óscar Coba Vayas ruled that work at the Rio Magdalena site was not prohibited by the constitution.

Mining has become a hot topic in Ecuador with environmental groups protesting the granting of licenses in sensitive ecological areas despite government promises to suspend new concessions.

President Juan Carlos Varela received a major blow last week after the European Union (EU) included Panama on its blacklist of countries with weak anti-money laundering and terrorist-financing regimes. The EU’s decision comes despite ongoing efforts by the Panamanian government to restore credibility to the country’s image, which was seriously damaged by the April 2016 ‘Panama Papers’ scandal (in which more than 11m confidential documents were leaked from the offices of Panama-based offshore law firm Mossack Fonseca).

Back in December 2017, in the aftermath of the Panama Papers scandal, the EU announced that it had included Panama on its first ever ‘grey list’ of non-cooperative tax jurisdictions – a decision slammed at the time by the Varela government which claimed that the country had “adopted international commitments in record time”. It cited as evidence of this, the adoption in 2016 of the automatic exchange of information mechanism, in line with the objectives of the Organisation for Economic Co-operation and Development (OECD) Global Forum’s Common Reporting Standard (CRS) as well as Panama’s adhesion in 2016 to the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and to the OECD’s Inclusive Framework of the Base Erosion and Profit Shifting (BEPS). The following month, just over a week after Panama signed a CRS Multilateral Competent Authority Agreement‎ (CRS MCAA) – the prime international agreement for implementing the automatic exchange of financial account information under the Multilateral Convention on Mutual Administrative Assistance – the EU then announced it was removing Panama from this list.

On 13 February, however, the EU issued a press release stating that, based on a new methodology which “reflects the stricter criteria of the 5th anti-money laundering directive in force since July 2018”, it had come up with a new list – which again included Panama. EU member states now have one month, which can be extended to two, to endorse the list. The EU’s decision prompted an immediate response from the Varela government which announced it was recalling its ambassador to the EU, Miguel Verzbolovskis, for consultations.

Varela went on to complain that the process of compiling the list was “opaque”, adding that Panama was not given “the opportunity to report or respond on the actions taken in legislation and practice, to address any deficiency perceived by the Commission”. He also pointed to improvements “in terms of strengthening and modernising its financial platform and international services, governed today by robust legislation and adequate to the highest standards, recognised by institutions such as the Financial Action Group of Latin America (GAFILAT) and the Global Forum of Transparency and Exchange of Information of the OECD”.

Recent efforts to improve transparency

Government efforts to bolster tax transparency include the approval of a new law (Ley 591) last month by the 71-member unicameral national legislature which makes tax evasion a crime. This was long a demand by international organisations such as the OECD, its Financial Action Task Force (FATF), and other Latin American countries.

More recently earlier this month, Panama became the 76^th signatory of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA), an agreement designed to make it easier for countries to exchange country-by-country reports on large multinational enterprises (MNEs) and thereby detect tax avoidance by MNEs through transfer pricing and other means.

• New Panama Canal administrator

On 15 February the Panama Canal Authority (ACP) announced that Ricaurte Vásquez had been appointed as the new Panama Canal administrator. Vásquez will succeed current director Jorge Luis Quijano on 4 September for a seven-year term. Vásquez previously worked as finance director of the Panama Canal (1996-2000), deputy administrator (2000-2004) and, most recently, minister for Canal affairs and chairman of the Panama Canal board of directors (2004-2006), playing a role in the first steps towards the Panama Canal expansion programme. As the waterway approaches 20 years under Panamanian administration, Vásquez will become the fourth administrator in its history.

Mexico’s national statistics institute (Inegi) reported on 8 February that national vehicle production in January reached 287,711 units, 15% lower than in the same month of 2020. This was the lowest production volume in the last five years and the sharpest fall in production in January since the 2009 global financial crisis. As a result, car exports were also down last month, with only 223,533 units shipped abroad, a fall of 6.4% relative to January 2020, the largest decline in 12 years. The low production levels have been attributed to a global shortage of semiconductors, raising concerns that the auto sector will have another challenging year.

Exports to the US, the main destination of cars assembled in Mexico fell by 1.3% year-on-year, while exports to Canada, the second destination, fell by 9.8%. However, these were relatively modest compared to the fall in exports to Germany, Mexico’s third main car destination, which reached 50.8% compared to January 2020. The domestic market was also affected with only 81,203 units sold during the month, equivalent to a fall of 22.5% relative to the same period of 2020.

The disruption to the industry has been largely a consequence of a global shortage of semiconductors, key components of car computers. The coronavirus (Covid-19) pandemic produced a fall in car sales in 2020, which lead semiconductor manufacturers -mostly located in Taiwan and South Korea- to divert their production to satisfy surging demand for other products, such as chips for laptops and mobile phones. The rapid recovery of demand for cars towards the end of 2020 and the ongoing demand for computer equipment led to bottlenecks in the production of electronic chips for the auto industry.

The problems are likely to continue in February. Audi was the first manufacturer to reduce production in Mexico; in mid-January it started operating just one shift at its Puebla plant, and only in the first half of February it moved up to two shifts during part of the week. Similarly, on 8 February General Motors GM announced that it would stop production at its San Luis Potosí plant at least until mid-March, when it will review the situation.

According to local press reports, the industry expects that the supply of semiconductors will only recover by mid-year. Oscar Albin, chairman of Mexico’s national auto-parts industry association (INA), said that INA expects that the fall in production at the beginning of the year will be compensated in the second half of 2021.

A new complaint against President Jair Bolsonaro filed with the International Criminal Court (ICC) in The Hague seeks to hold the Brazilian head of state criminally liable for the international consequences of the destruction of the Amazon rainforest.

The complaint filed by AllRise, an Austria-based non-profit specialised in environmental litigation, accuses President Bolsonaro of committing crimes against the environment and environmental defenders in Brazil’s Amazon and asserts that these are crimes against humanity. “Crimes against nature are crimes against humanity. Jair Bolsonaro is fuelling the mass destruction of the Amazon with eyes wide open and in full knowledge of the consequences. The ICC has a clear duty to investigate environmental crimes of such global gravity,” AllRise founder Johannes Wesemann said in a press statement on 12 October.

This is not the first complaint that Bolsonaro has faced in The Hague – at least three others have been filed against him since the beginning of his presidency, the most recent of which was by indigenous groups accusing him of crimes against humanity and genocide based on his harmful indigenous policies. However, AllRise’s case appears to be a first in two respects: it links deforestation with loss of life, and it gives an international dimension to the accusations against Bolsonaro.

“Our initiative has strong Brazilian support, but we don’t seek to speak on behalf of any Brazilian communities, nor claim to represent them. Our case aims to add an important international dimension to their struggle. The Amazon is theirs, but it is needed by us all,” Wesemann said.

The climatological experts’ report appended to AllRise’s legal complaint estimates that deforestation-related emissions during the Bolsonaro administration account for around 1% of global greenhouse gas emissions each year, and that these emissions will lead to 180,000 excess heat-related deaths globally by 2100.

The threat of an ICC lawsuit and the accompanying bad publicity cast a shadow over the Brazilian government’s attempts to present itself as a committed environmental player ahead of the COP26 climate talks which are due to kick off on 31 October in Glasgow, Scotland. Brazil has lost credibility in international fora on climate change in recent years, in no small part due to Bolsonaro’s contempt for climate action, along with the hollowing out of environmental enforcement agencies and the surge in deforestation on his watch – factors underpinning AllRise’s complaint.

There are signs that the Bolsonaro government has been taking steps to try and patch up its reputation on the environmental front. The controversial and internationally criticised environment minister, Ricardo Salles, was pushed out in June [WR-21-26]. On 8 October, during a pre-COP26 press briefing, his successor, Joaquim Leite, said Brazil will be a pro-active participant at the climate summit and broke with previous comments made by Bolsonaro and Salles when he said that Brazil’s efforts to reduce emissions are “in no way” conditioned to foreign financing.

Preliminary figures show Amazon deforestation fell year-on-year over the August 2020-July 2021 period. An army deployment to the Amazon, which last year was criticised for hindering environmental enforcement efforts [WR-21-24], has this year cracked down on environmental crime.

However, environmentalists remain dubious that the Bolsonaro administration has really changed its environmental tune. AllRise’s complaint with the ICC, which it is hoped could set a precedent for prosecuting major environmental crimes, serves as a public reminder of the reasons for this hesitancy.

‘The Planet vs Bolsonaro’

In parallel with the ICC lawsuit, AllRise has launched a public awareness campaign and petition dubbed ‘The Planet vs Bolsonaro’, which denounces President Bolsonaro for “conducting a systematic and widespread attack on the Amazon” and calls for him to be brought to justice. Bolsonaro, who takes a nationalist approach to the Amazon and bristles at suggestions that it is a global issue, has in the past sought to dismiss international criticism of his environmental policies as smear campaigns motivated by covert interest in the Amazon’s mineral riches.