M&A Activity in Latin America Off to a Red Hot Start this Year
March 5th, 2010Takeovers in Latin America are off to the best start in at least a decade, bucking a global slump, as economic recoveries in Brazil and Mexico spur consolidation in the telecommunications, food and commodities industries.
America Movil SAB’s $25.7 billion purchase of Carso Global Telecom SAB in Mexico was the largest in the region this year and the second biggest globally. Latin America tallied 192 announced deals worth $72 billion since Jan. 1, the most in Bloomberg data going back 10 years and the only region to see an increase in transactions this year from the end of 2009.
More than a third of 2010’s transactions were in Brazil, where the economy is rebounding from a recession, the currency is up 32 percent against the dollar in the past 12 months and interest rates are at record lows. The region may have its best year for acquisitions since 2007, said Udi …
Colombia-US Trade Deal Faces More Delays
February 18th, 2010WASHINGTON – Support for a free-trade pact with Colombia is growing among Democrats long opposed to it, but midterm elections and a full domestic agenda may further delay the deal, Bogota’s defense minister said on Thursday.
Democrats seem encouraged by President Barack Obama’s will to get the long-postponed deal passed to boost exports, minister Gabriel Silva told reporters in Washington after meeting with Senator Chris Dodd, a Democrat from Connecticut, an influential voice within his party.
“He is optimistic. The Democratic Party, in the voice of President Obama, has expressed the goal of reaching the approval of the free-trade agreement,” he said.
But he said Dodd “mentioned this is a complex electoral year with a very heavy domestic agenda”, referring to stalled debates on healthcare reform and pressing demand to create jobs.
“The dynamics in the Congress could be in our favor and that is how we hope it will be,” Silva …
World Bank Says LATAM has Learned from Past Mistakes, Economies are More Resilient
February 17th, 2010SOURCE: LatinBusinessChronicle
BY PAMELA COX, Vice President for the Latin America and the Caribbean Region
A year ago, things looked pretty gloomy in Latin America. World demand had taken a nose-dive, and exports from Latin America and the Caribbean had dropped more than a third in just six months. More concretely, commodity prices had collapsed. A barrel of oil had gone from $147 per barrel in July 2008 to $42 in February 2009. Prices of soybeans, wheat and copper also dropped dramatically. For a region, where 90 percent of the population resides in net commodity exporter nations, the plunging prices were destined to take a toll.
In human terms, we calculate that the recession added about 10 million to the ranks of the poor and 2.5 million to the ranks of the unemployed in Latin America.
To make matters worse, remittances, while still resilient, have shown some decline. These flows …
Opinion: Brazil’s “Closed Economy” has to Change and Mature
February 16th, 2010SOURCE: Latin Business Chronicle
In a way, Brazil is a jail. Fortunately, it is a beautiful prison, with glittering beaches, exotic flowers and wonderful food. However, it has 190 million Brazilians locked in a closed economy—forced to accept whatever quality of goods and services, at whatever price and quantity.
Despite all of the BRIC hype, Brazil remains one of the most closed economies in the world. Brazil’s exports and imports, as a percentage of GDP, should be 16 percent in 2010. Argentina’s trade as a percentage of GDP will be more than twice as much, and Chile’s trade will be 56 percent of GDP. To put things in perspective, Singapore’s is more than 150 percent of GDP.
The country’s closed economy is the reason why Brazilian firms can charge exorbitant prices for basic goods and services. Automobile prices, for example, are multiples of what they are in other countries. Brazil’s cellular services are the …
Does Laura have a Lock on the Costa Rica Presidency?
February 5th, 2010A protege of outgoing President Oscar Arias could be elected Costa Rica’s first woman head of state on Sunday, though a conservative rival has upped his challenge ahead of the election.
Opinion polls show ruling party centrist Laura Chinchilla, who has promised to expand Costa Rica’s free trade pacts beyond the Western Hemisphere, within striking distance of the 40 percent of the vote needed to avoid a second round run-off.
A late surge by libertarian Otto Guevara, who wants to replace the local currency with the U.S. dollar and crack down on rising crime, could force an April run-off
An oasis of stability in politically turbulent and crime-plagued Central America, Costa Rica earned a reputation for environmental friendliness and peacemaking under Arias, who won the Nobel Peace Prize in 1987 for his role in ending regional civil wars. He is now serving his second presidential term.
The country’s relatively smooth passage through …
Parts of $500 Million in World Bank Funds Targeted Toward Latin America and Caribbean Businesses
February 1st, 2010The World Bank expects to secure $500 million in a first round of money raising for a private equity fund to co-invest in companies in sub-Saharan Africa, Latin America and the Caribbean, President Robert Zoellick said.
“All of you, as African leaders, know the perils of this economic crisis,” Zoellick said at the African Union Summit in Ethiopia today, according to a copy of his speech. “But you also know about Africa’s opportunities and its potential to be another source of growth for the world economy.”
The International Finance Corp., the World Bank unit that lends to companies, will manage the fund, as well as a $200 million pool to invest “in systemically important banks” in Africa, Zoellick said. Investors are pension funds and sovereign wealth funds, according to the World Bank.
The Washington-based institution, which has committed $88 billion to poor and middle-income countries since the middle of 2008, …
SOURCE: DAILYCALLER.COM
With Porfirio Lobo assuming the presidency of Honduras, its citizens formally turn the page on the political crisis triggered by Manuel Zelaya’s removal from office in June 2009. It is time for the international community to do the same. Honduras’ fragile economy and its citizens have paid a high price in recent months. They must be given a chance at a new beginning.
President Obama must seize the initiative and provide full support to Honduras, which has traditionally been a firm U.S. ally. Furthermore, he must pro-actively encourage others nations to extend diplomatic recognition to Honduras’ new government, restore international aid and lift all sanctions.
The formal resolution to the status of former President Zelaya has been largely addressed. He has been given safe passage to the Dominican Republic whose President Leonel Fernandez brokered the deal. Furthermore, Mr. Lobo was given a popular mandate by Hondurans in a free and …
Former Honduras President Flees to Dominican Republic
January 27th, 2010Former Honduran President Manuel Zelaya left his refuge in the Brazilian Embassy and flew into exile Wednesday, ending months of turmoil and his thwarted quest to be restored to power after a June 28 coup that drew international condemnation.
The leftist leader drove past soldiers guarding the diplomatic compound in long caravan and headed for the airport accompanied by President Porfirio Lobo, said Hilda Cruz, an assistant of Zelaya’s wife.
Zelaya was going to the Dominican Republic as a private citizen under a deal signed by Lobo and the Caribbean country’s President Leonel Fernandez, who flew to Honduras to accompany the former president.
Zelaya has not elaborated on plans for his future. But just before boarding the plane, he shouted: “We’ll be back! We’ll be back!”
Thousands of supporters gathered outside the airport yelled “Mel, our friend, the people are with you!” as his plane took off.
Lobo, who was sworn into …
Brazil Saw Big Drop in Foreign Investment in 2009
January 26th, 2010The U.N. Conference on Trade and Development highlighted the sharp decline in foreign direct investment in 2009, which affected all regions of the global economy. The data published in its “Global and Regional FDI Trends in 2009″ on Jan. 19 illustrates that drop:
–Sharp decline. Global FDI is estimated to have fallen by 38.7% in 2009. Total flows of 1.0 trillion dollars paled in comparison to the 1.7 trillion recorded in 2008 and the record flows of some 1.8 trillion in 2007, which followed several years of strong global FDI growth.
–Truly global. The global decline of FDI in 2009 followed a drop of 33% in FDI to developed economies in 2008. However, flows to developing and transition countries had remained just positive in 2008. Therefore, in 2009 the downturn in FDI became truly global.
–Similar impact. Developed countries in 2009 registered a fall in FDI of 41.2%, while developing and …
Envisoning a ‘New Haiti’ Emerging from the Rubble
January 19th, 2010SOURCE: COUNCILONFOREIGNRELATIONS
An interview with Mark Schneider, Senior Vice President; Special Adviser on Latin America Washington, International Crisis Group
The January 12 earthquake in Haiti was “the worst national disaster in the history of the Western Hemisphere,” says Mark L. Schneider, former Peace Corps director in the Clinton administration. “Long-term reconstruction” will last more than a decade, he says, and involve billions of dollars in aid. The objective is not just to put Haiti back together, he says, but to create “a New Haiti” with a new education system and other changes throughout the society.
You’ve been through a number of Haitian crises. Is this one the worst?
It is not only the worst natural disaster in Haiti’s history, but it is also the worst natural disaster in the history of the Western Hemisphere in terms of the number of people who have died. There have been probably …
