Latin America News Round-up
April 27, 2012
Chile to Raise Corporate Tax Rate to Fund Education
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Brazil and Southern Cone
US looks to ease Brazil doubts over tech transfers. AFP
Factory workers at a Foxconn plant Threaten Strike. Apple Insider
Move on Oil Company Draws Praise in Argentina, Where Growth Continues. New York Times
EU reaction to YPF takeover 'unacceptable'. AFP
US admits relations with Argentina are “difficult” and calls for positive attitude. Mercopress
Chile to Raise Corporate Tax Rate as Student Protests Resume. Bloomberg
Northern Andean Region
3.3 tons of cocaine seized at Venezuelan seaport. AP
Chavez returns to Venezuela, ailing but still leading the polls. McClatchy
Santos to visit China, Singapore to bolster trade. Colombia Reports
Western Andean Region
Ecuador's President Correa determined to eliminate FARC presence. Colombia Reports
CNPC, ICPC May Join Ecuador-Venezuela Refinery -Ecuador Minister. Dow Jones
Ecuador 1Q Net Tax Collections Rise 34% On Year To $2.66 Bln. Dow Jones
Bolivia: TIPNIS Protesters Launch National March, Seek Indigenous-Urban Alliance. NACLA
Bolivian firm aims at raising garment exports to Venezuela. Fibre2Fashion
Peru is latest developing nation to adopt climate change initiative. Reuters
Mexico, Central America and Caribbean
US: Mexico seized 68,000 guns from US since 2006. AP
TV host killed, another reporter threatened in Honduras. Knight Center
Jamaica struggles toward a sound economic future. BBC
Region: Trade, Security, Economy and Integration
“Land grabbing” and the concentration process in Mercosur members. Mercopress
Brazil and Southern Cone [contents]
US looks to ease Brazil doubts over tech transfers
Jordi Zamora. AFP. April 26, 2012
RIO DE JANEIRO — US Defense Secretary Leon Panetta has used his trip to Brazil to lift doubts about Washington's pledge on technology transfer if Brasilia buys Boeing's F/A-18 Super Hornet fighter jet.
Panetta, who ended a two-day visit on Thursday, sought to ease concerns that the United States could use technology transfer -- a key factor in Brazil's soon to be announced choice of which jet to purchase -- as a political lever.
The F/A-18 is competing against the French produced Rafale fighter and Swedish manufacturer Saab's Gripen aircraft for Brazil's contract for 36 next-generation fighter jets valued at between $4 billion and $7 billion.
Brazil, Latin America's dominant power and the world's sixth biggest economy, is now insisting on technology transfer in all its defense agreements.
Panetta on Wednesday offered Brazil "an unprecedented advanced technology sharing that is reserved for only our closest allies and partners."
"We fully understand that Brazil is not looking just to be the purchaser of a fighter aircraft, but rather a full-fledged partner in the development of cutting-edge aviation technology," he said in a speech at a military academy.
"With the Super Hornet, Brazil's defense and aviation industries would be able to transform their partnerships with US companies, and they would have the best opportunity to plug into worldwide markets," he added.
But Brazilian officials are wary of Washington's possible use of technology restrictions.
In 2006, the United States blocked the sale of 24 Super Tucano light attack aircraft made by Brazil's top aeronautics firm Embraer to Venezuela as they contained US-built components.
The Super Tucano is a turboprop aircraft used in counter insurgency, close air support, aerial reconnaissance missions and in pilot training.
In a joint press conference with Panetta in Brasilia on Tuesday, Brazilian Defense Minister Celso Amorim made it clear his government wanted the fighter jets it will buy to be produced locally.
Brazil is keen to develop its own defense industry and wants to assemble aircraft with foreign technology for export, a plan Panetta appeared to support subject to conditions, noting that such a stance amounted to a policy shift.
"There was a time when the United States discouraged developing military capability in countries in Latin and Central America," the US defense secretary said on Wednesday.
"Today, we think the development of those kinds of capabilities is important if we can use those capabilities to develop the kind of innovative partnerships that I'm talking about, to advance the security in this region," he added.
Panetta pointed out that Washington now rarely denies Brazil technology export licenses and had in fact granted it 4,000 in the past two years.
US officials said orders for its technology in Brazil had soared 139 percent since 2007.
A major irritant for Brazil, however, was the US cancelation of a $380 million contract with Embraer to buy 20 AT-29 Super Tucano aircraft for the Afghan army.
Embraer and its US partner Sierra Nevada were awarded the contract in December but the US Air Force called off the deal in February after a legal challenge from rival Hawker Beechcraft Corp.
The Pentagon has called for a new round of bidding for the contract, but in any case the equipment will not be delivered before 2014.
On Wednesday, Panetta also praised Brazil's rise on the global stage.
"This is a relationship between two global powers, and we welcome Brazil's growing strength. We support Brazil as a global leader and seek closer defense cooperation," he noted.
"We won't agree on every matter -- no two countries, not even the closest allies, ever do. But I do believe that our common interests are so great, and the possibilities that come from our cooperation are so tangible, that we must seize this opportunity to build a stronger defense partnership," he said.
The US defense secretary began his first Latin America tour in Colombia on Monday and he was also to visit Chile after leaving Brazil.
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Factory workers at a Foxconn plant Threaten Strike
Apple Insider. April 27, 2012
According to a report by Brazil's Tech Guru, over 2,500 Foxconn employees have complained about conditions at the factory. Workers reportedly met last Monday to raise the concerns and have given the company 10 days to address them.
Problems at the factory have been exacerbated by the recent hiring of more than a thousand employees. Foxconn was said not to have increased its transport infrastructure with the new hires. The company reportedly had to hire water trucks to bring in water for its employees.
A representative for the employees was optimistic that an amicable solution could be reached with Foxconn without resorting to a strike.
The report did not specifically mention whether the workers involved are serving on production lines for Apple's iPhone or iPad. iPhone 4 units produced in Brazil reached the market last February, while Apple is said to have received approval to begin selling iPad 2 units that have been manufactured in the country.
In January, it was reported that Brazilian officials were claiming Foxconn had plans to build five additional factories in the country to help produce Apple devices. Each of the new facilities would reportedly staff approximately 1,000 workers. However, Foxconn called the report "pure speculation."
Though Apple has identified Brazil as a key growth region, CEO Tim Cook said earlier this year that the company is not planning to build retail stores there in the "near future."
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Move on Oil Company Draws Praise in Argentina, Where Growth Continues
SIMON ROMERO. New York Times. April 26, 2012
BUENOS AIRES — President Cristina Fernández de Kirchner of Argentina has incurred the wrath of the European Union by expropriating a controlling stake in YPF S.A., the oil and gas company owned by the Spanish energy giant Repsol, prompting retaliatory salvos in a budding trans-Atlantic trade war.
But for many Argentines, the nationalization does not go far enough.
“They should expropriate 100 percent, not just a part of it,” said Fernando Solanas, a congressman and filmmaker who belongs to an opposition party. “Oil is a public interest.”
In seizing control of YPF, Mrs. Kirchner has adroitly shifted attention away from her country’s soaring inflation, capital flight and her own falling approval ratings, focusing instead on a longstanding subject of resentment here: the market-oriented policies of the 1990s, which preceded a severe economic crisis at the start of the last decade.
The nationalization has been so warmly received here that Argentina’s Senate voted 63 to 3 early Thursday to take control of YPF, the country’s leading energy company, during a lengthy special session in which most senators used their allotted time to laud Mrs. Kirchner’s initiative. Some members of the political opposition from oil and gas-producing provinces came close to tears expressing gratitude for the measure. The expropriation bill will be taken up on May 3 by Argentina’s lower house of Congress, where it is also expected to pass by a large margin.
Even Carlos Menem, the former president who oversaw the start of YPF’s privatization in 1992, now supports the takeover. “The scenario has changed,” said Mr. Menem, now a senator.
To critics here and abroad, the nationalization — and the readiness of many Argentines to invite a clash with Spain, one of their nation’s largest trading partners — is the kind of step that has made Argentina seem like a “truant of economic management,” in the words of Walter Molano, an American financial expert.
Indeed, some here contend that Argentina has gone to the dogs, literally. So many nervous citizens have taken their money out of the country that Argentina’s tax agency now uses Labrador retrievers trained to detect the ink used to print dollar bills in an effort to stanch capital flight at the airports, ferry terminal and bus terminal in Buenos Aires.
“It’s a marvel to watch them,” Ariel Viola, a tax agent at the Buquebus terminal, where ferries travel to Uruguay, said of the dogs. “They’re incredibly effective. They’ve smelled out millions of dollars travelers were attempting to smuggle.”
Capital flight accelerated to $22 billion in 2011 as fears spread over soaring inflation. Unofficial measures suggest that annual inflation is between 20 percent and 25 percent. But the authorities have fined researchers for disseminating such figures, and the official estimate stands at 9.8 percent.
Dollar-sniffing dogs and fines for publishing statistics might point to an economy in crisis. But Argentina’s is growing robustly, albeit at a slower pace than in recent years. A decade-long recovery has given Mrs. Kirchner broad support to pursue nationalist policies that sometimes perplex — and enrage — foreign banks, companies and governments, not to mention some Argentines who view her moves as a return to the protectionism that long hobbled the economy.
Riding an export boom for commodities like soybeans, Argentina’s economy grew at an average rate of 7.7 percent from 2004 to 2010, almost twice the average annual growth of 4.3 percent in Chile, a country often cited as a model for economic policies, over the same period.
Some controversy also swirls over the way Argentina officially measures economic growth, which the government said reached 9.2 percent in 2011. But even the I.M.F. sees Argentina growing 4.2 percent this year, a rate outstripping the 3 percent growth foreseen for Brazil, the region’s economic powerhouse.
Argentina’s postcollapse boom underscores the shifting fortunes on both sides of the Atlantic. Thousands of young Spanish emigrants have recently made their way to Buenos Aires; in the hipster restaurants of the city’s Palermo district, Spanish accents are heard among the wait staff and bartenders.
After Mrs. Kirchner was elected in 2007, succeeding her husband, Néstor Kirchner, as president, she increased social spending on programs like the “universal allocation per child,” which provides poor families with monthly cash stipends.
These programs, along with other antipoverty initiatives, reduced inequality, helping Mrs. Kirchner cruise to re-election in 2011. At the same time, the buying power of Argentines soared as incomes climbed and the government maintained controls on energy prices.
Meanwhile, YPF and other oil companies, wary of investing in a country where low energy prices curb profitability, limited spending that could have lifted energy production. The result: Argentina went from being an energy exporter to importing fuel from countries as far away as Qatar.
This reliance on foreign energy sources grew acute in the past year. The authorities now struggle with a $3 billion energy deficit to meet domestic demand for oil and natural gas, according to Esteban Fernández Medrano, an independent economist.
In addition to giving the government more control over Argentina’s energy industry, seizing YPF from Repsol also allows Mrs. Kirchner to tap into lingering bitterness over the policies that allowed many state companies to be sold more than a decade ago to private investors.
This sentiment, described as “anti-noventista” (roughly “anti-1990s”), is symbolized by the rise of La Cámpora, a nationalist youth organization led by Mrs. Kirchner’s 34-year-old son, Máximo. Members of La Cámpora now hold supervisory or senior management positions in nationalized companies like YPF and the state airline.
But the nation is also sharply divided politically, as symbolized by Mrs. Kirchner’s clashes with two leading newspapers, Clarín and La Nación, and her strengthening of an array of pro-government media organizations. Some here question whether the nationalizations, which have already encompassed seven companies in the two Kirchner administrations, will stop at YPF.
One company in Mrs. Kirchner’s cross hairs is Papel Prensa, Argentina’s only newsprint manufacturer. A new law calling newsprint a “commodity of public interest” allows the government to increase its stake in Papel Prensa, potentially taking control of the company away from Clarín and La Nación.
“We’re extremely concerned by the government’s maneuvering on this issue,” said Eduardo Lomanto, La Nación’s director. “It fits within a systematic plan for the domination of the media.”
Broadly popular social policies, like keeping energy prices low, have pleased Mrs. Kirchner’s constituents. But they come with costs, as reflected in Argentina’s yawning energy imports and the nationalization of YPF.
Galloping inflation is yet another cost, and price increases are absorbed largely by people without the means to try slipping packages of dollars past the dogs at the ferry terminal.
Ramona González, 43, a maid who lives in Florencio Varela, a city on the southern outskirts of Buenos Aires, said she was well aware of the state takeover of YPF. “What is Argentine should be Argentine.”
But she has other concerns. “Inflation is what is worrying me the most, not YPF,” she said.
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EU reaction to YPF takeover 'unacceptable'
AFP. April 26, 2012
BUENOS AIRES — Argentina's Foreign Minister Hector Timerman lashed out at the EU, calling its reaction to his country's nationalization of YPF, a subsidiary of Spain's Repsol, "unacceptable."
Timerman was responding in an open letter to criticism by European Union Trade Commissioner Karel De Gucht.
"Your comments on Repsol-YPF have surprised me, both in their focus and the tone that was used. The reaction is excessive and the focus deserves a more detailed analysis," Timerman wrote.
"I find it unacceptable that you question the commercial policy of our country," Timerman wrote.
Spain's subsequent move to stop importing Argentine biodiesel "represents an unacceptable discrimination which, if it is not corrected by the EU, affects half of our exports to Spain or 10 percent of our total exports to the EU," Timerman said.
Argentina announced that it would seize 51 percent of YPF shares earlier this month, with some 26 percent to be held by the federal government and 25 percent going to the provinces.
Spain has led a chorus of international outrage over the move, saying it harmed bilateral relations and would deny Argentina much-needed foreign investment and expertise in the oil sector.
In a letter made public on Monday, the EU's De Gucht said the expropriation "sends a very negative sign from the Argentine government to all international investors."
The move "adds to a growing list of problematic decisions adopted by Argentina in the recent past in the area of trade and investment," De Gucht said.
"The situation is now at a point where it risks jeopardizing our overall trade and investment relations," he wrote, according to the government Telam news agency.
Argentina's Senate earlier Thursday approved the government's move to nationalize YPF despite adamant US, EU and Spanish objections. The bill now goes to the Chamber of Deputies, which is expected to approve it on May 3.
YPF produces 34 percent of Argentina's oil and 25 percent of its gas, and the company holds some 54 percent of the country's refining capacity, according to the private Argentine Petroleum Institute (IAP).
Buenos Aires has accused Repsol of failing to invest in its oil sector, forcing a spike in costly imports.
After the Senate vote Repsol issued a statement defending its investment record in Argentina, countering the government's contention that the Spanish-owned company had failed to invest enough to maintain production levels.
But the takeover is popular in Argentina, where it is supported by both the government and the opposition.
Argentina's oil imports doubled to $9.3 billion in 2011 from the previous year and are set to top $12 billion this year, according to official figures.
Earlier this week the Standard & Poor's ratings agency downgraded its credit outlook for Argentina from stable to negative, largely due to the YPF takeover.
Argentina declared YPF a public utility on April 16. Later the same week it extended the move to YPF Gas, a separate company 85 percent owned by a division of Spain's Repsol.
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US admits relations with Argentina are “difficult” and calls for positive attitude
Mercopress. April 27, 2012
US Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson asked Argentina to go back to having a “positive” relationship with the international financial community and its creditors.
While speaking at a meeting of the Latin American subcommittee of the Lower House’s Foreign Affairs Committee, Jacobson acknowledged that the bilateral relationship with Argentina is “difficult” due to the country’s relationship with the international financial community.
“Argentina has to go back to having a positive relationship with the international financial community and its creditors in the US and in the world,” she said.
Ms Jacobson said that these ‘difficulties’ led US president Barack Obama to temporarily suspend tariff benefits to Argentina because the country has yet to honour compensation payments involving 300 million dollars to two US companies, following a favourable ruling from an international arbitration court.
Last week Washington also expressed ‘concern’ about the Argentine decision to seize 51% of YPF belonging to Spanish oil corporation Repsol arguing it creates “a very negative climate for investments” and affects the “whole international community”, according to US State Department spokesperson, Mark Toner.
Jacobson also recalled that to the financial difficulties must be added relations in security issues, particularly since February 2011 when the Argentine government decided to seize instruments and other materials from a US Air Force aircraft that was delivering in Buenos Aires support equipment for police training.
“Since last year’s incident with the military aircraft we have not been able to work in issues such as cooperation in combating the drugs trade, as we would like”, admitted the Assistant Secretary of State.
The top official said the US continues to advance in “more positive areas” of the relation with Argentina, but “we continue to come across challenges”.
Republican Congressman Connie Mack which is member of the Foreign Affairs committee said “Argentina was planning nothing good” and is ignoring “court rulings” in reference to the International Centre for Settlement of Investment Disputes, which depends from the World Bank.
Besides the suspension of tariff benefits and the diplomatic disappointment which still subsists because of the aircraft incident, the US/Argentina relation suffered a further blow last March when the country was included for the first time in the black list of countries not doing enough about money laundering.
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Chile to Raise Corporate Tax Rate as Student Protests Resume
Randall Woods. Bloomberg. April 27, 2012
Chile’s President Sebastian Pinera announced plans last night to raise corporate taxes to finance increased spending on education, a day after at least 48,000 students marched through Santiago in support of free schooling.
The government will increase the corporate tax rate to 20 percent from 18.5 percent, while reducing income taxes and the stamp duty on loans, Pinera said in a televised address to the nation. The government will reduce fuel costs through a sliding tax rate and increase taxes on hard alcohol. The measures will raise as much as $1 billion a year, Pinera said.
The government decided to overhaul the tax system after students led seven months of demonstrations last year to pressure authorities to increase state spending on education. Hundreds of state schools were shuttered and weekly marches shut down much of central Santiago. The protests resumed this week with the biggest march in seven months, according to police estimates.
“Our entire society is making an enormous effort to finance this educational reform,” Pinera said. “We all must commit ourselves to this. That being said, the success of this education reform basically depends on the goodwill, effort and commitment of our students.”
Pinera’s administration will fast track legislation in Congress to reduce interest rates on student loans to 2 percent from 6 percent, Education Minister Harald Beyer told reporters in Santiago this week. Students will start repaying the loan once they enter the workforce, paying no more than 10 percent of their salaries.
While it won’t make universities tuition-free, the government will guarantee merit-based scholarships for 60 percent of the poorest students, the minister said.
Green Taxes
Other proposed changes include implementing “green” taxes to protect the environment and subsidies for recycling, Pinera said. The government will try to reduce tax loopholes while allowing for deductions for household spending on education.
Changes to the tax code will help fund education initiatives, reducing inequality while sustaining economic growth that was 6 percent last year and 6.1 percent in 2010 -- the fastest expansion in more than a decade, Finance Minister Felipe Larrain told a forum in Santiago this week.
“In a world rocked by crisis,” Pinera said last night, “Chile has retained its ability to grow, to create jobs.” His government “will continue with a serious and responsible economic policy.”
Inequality
Chile has the highest level of income inequality among the 34 members of the Organization for Economic Cooperation and Development. The country’s Gini coefficient, an index of the income gap where 0 represents complete equality and 1 complete inequality, is 0.497 compared with 0.476 in Mexico and 0.378 in the U.S., according to the Paris-based organization.
Also according to the OECD, Chilean households pay for 39 percent of their total education bill -- the highest level in the Paris-based group. By comparison, households in the U.S. finance 21 percent of their schooling.
“This will be a tax reform that seeks equality in a responsible way,” Larrain said this week. “Proposals that seek to increase tax collection several times over put our economic growth capacity at risk. We are not willing to do that.”
This will be the third time that Pinera’s government has changed taxes since entering office in March 2010.
The government in 2010 temporarily raised corporate taxes from 17 percent to 20 percent to help finance reconstruction following the 8.8-magnitude earthquake that struck southern Chile the month before Pinera assumed office. The corporate rate fell to 18.5 percent in 2012 and would have declined to 17 percent next year.
Pinera also temporarily increased taxes on mining companies in 2010 in a bid to raise funds for rebuilding as well as social and education programs.
Stock Market
Raising corporate taxes to 20 percent would reduce the target price of Chile’s IPSA Index (IPSA) of stocks by an estimated 2.5 percent, with builder Salfacorp SA (SALFACOR) and power producer Colbun SA (COLBUN) suffering the greatest reductions, Francisco Errandonea, an analyst with Banco Santander SA (SAN) in Santiago, wrote in a March 13 note to investors.
The government on April 30 will introduce the new tax legislation to Congress, Pinera said.
To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net.
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.
Northern Andean Region [contents]
3.3 tons of cocaine seized at Venezuelan seaport
AP. April 26, 2012
CARACAS, Venezuela -- Security forces seized 3.3 tons of cocaine during an anti-drug operation at one of Venezuela's main seaports Thursday, a top security official said.
Justice Minister Tareck El Aissami said National Guard troops found the cocaine inside 1,680 boxes containing ceramic mix at La Guaira port. The cocaine was destined for Mexico, he said.
El Aissami told state television that two Venezuelans and a Mexican were arrested.
Venezuela has become one of South America's most important routes for smuggling drugs to the United States and Europe due to its proximity to Colombia, where most of the world's cocaine is produced and smuggled abroad by drug traffickers.
"We will continue battling to prevent these criminal organizations from using our territory," El Aissami said.
In a separate bust Thursday, National Guard troops arrested a U.S. citizen, Jose Alberto Reyes, after discovering 4 kilograms of cocaine hidden inside the man's luggage as he prepared to board a plane at La Chinita International Airport in the western city of Maracaibo, officials said. The flight was going to Madrid, Spain. Reyes' hometown in the U.S. was not released.
U.S. officials accuse Venezuela of failing to effectively combat drug smuggling through its territory.
El Aissami has said that U.S. officials should do more to stem the flow of drugs into the United States.
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Chavez returns to Venezuela, ailing but still leading the polls
JIM WYSS. McClatchy Newspapers. April 26, 2012
BOGOTA, Colombia - Wearing a blue track suit and defying rumors that he was too sick to walk, Venezuelan President Hugo Chavez stepped off an airplane in Caracas early Thursday to continue his fight for the presidency.
Chavez returned after 11 days in Cuba where he has been receiving radiation therapy to treat an undisclosed form of cancer. His failure to make his usual rounds on television and radio sparked speculation that his health had taken a turn for the worse and that he might have even died.
But Chavez's health problems don't seem to be hurting his presidential aspirations. A series of recent polls show that the 57-year-old leader is still ahead of his rival Henrique Capriles, even as he's been running his campaign from a Cuban hospital ward.
If the elections were held in March, Chavez would have won 53 percent of the vote versus Capriles' 34 percent, the Hinterlaces polling firm said in a report released Thursday. That poll follows on the heels of a survey by Datanalisis, which gave Chavez a 13-point lead over Capriles. Consultores 21, another well-respected polling firm, projects a much tighter race, but still gives Chavez a six-point lead.
"A key to understanding this phenomenon is that most people don't think (Chavez) is very sick," said John Magdaleno, with the Polity political consulting firm in Caracas. "They recognize that he's ill but they believe he will be able to compete in the race."
Hinterlaces said 74 percent of those surveyed believe Chavez will be "cured" and campaigning come Oct 7. But it also found that the ruling party can't win without him on the ticket. And that may be why Chavez and his party have been so adamant that he'll be the one Capriles will face on Election Day. Even when he has appeared bald and bloated by his cancer treatment, Chavez has vowed to "knock out" Capriles and tag another six years onto his 13-year presidential run.
But despite the bluster there are reasons to worry. When Chavez took this trip to Cuba April 14, it was supposed to be the last session of a five-week treatment. But on Monday, he said he would have to return to Cuba as soon as Saturday.
"There is another session of radiation therapy coming," he said. "We have to continue the treatment and do other evaluations."
The administration's refusal to say what type of cancer the president has, or what organs are being affected, have given way to speculation that Chavez's cancer is worse than he lets on. In June, he announced that doctors had found a baseball sized tumor near his pelvis. Chavez claimed to be cured and was on the campaign trail when he was forced to admit in February that a lesion had returned near the same site. Since then, he has been making almost weekly trips to Cuba for treatment.
The administration is also reeling from allegations by a former supreme court judge Eliado Aponte Aponte who accused some of the president's top allies of being involved in the drug trade. He also said that Venezuela's courts are under Chavez's sway. Aponte, who is now in the U.S., was removed from office last month for his connections to alleged drug kingpin Walid Makled.
The administration has called Aponte a traitor and said he's a tool of the U.S. Drug Enforcement Agency. On Thursday, the attorney general said there was no reason to investigate Aponte's claims.
Looking tired but healthy, Chavez arrived in Caracas at about 1:30 a.m. Thursday. On state-run TV, he could be seen joking with his Cabinet on the tarmac before launching into campaign mode. He said next month would be dedicated to workers. A minimum-wage hike of 30 percent will begin Tuesday, and Chavez is putting the finishing touches on a new labor law.
Capriles has mocked the wage increase, saying it's made irrelevant by record-high inflation, which hit 27.6 percent last year.
"This government has been efficient, but efficient at increasing inflation," Capriles said at a campaign rally Thursday where he pledged to create 3 million jobs over the next six years. "There's no way to justify the fact that we have the highest inflation in the Americas and one of the highest in the world. That can't keep happening."
Capriles, the 39-year-old governor of Miranda state, has been barnstorming the country and focusing on social issues that he hopes will appeal to disgruntled Chavez supporters. But Chavez's illness has made that difficult, Hinterlaces said.
"Chavez's illness has helped regroup the spirit of the Chavistas and has minimized their discontent with his government," the report said. "The social and existential identification with Chavez plays a fundamental role in his growing lead."
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Santos to visit China, Singapore to bolster trade
Brandon Barrett. Colombia Reports. April 26, 2012
Colombia's President Juan Manuel Santos will visit China and Singapore on an official state visit next month in hopes of expanding ties with the fast-growing Asian market.
"China is becoming the most important market, the fastest growing in the world, and we must have a presence there," said Santos, who in turn called Singapore "the most successful country in the world in innovation, entrepreneurship and port and customs management."
China is already Colombia's second largest trading partner, with trade valued at $8.23 billion in 2011, according to Chinese news agency Xinhua. China's Ambassador to Colombia, Wang Xiao Yang expressed the economic giant's desire to carry on building economic ties between the two nations.
"Chinese companies are keen to participate in infrastructure projects like roads and power plants, so during the visit of President Juan Manuel Santos we will introduce a number of tools to support future relations in economic cooperation and scientific technology," he told Radio Caracol.
Colombia's Minister of Foreign Affairs, Maria Angela Holguin said that trade and investment would be the main issues on the agenda during Santos' visit to Asia, which begins May 9. Colombia's head of state plans to meet with Chinese President Hu Jintao, Prime Minister Wen Jibao, the head of the National Assembly and leading entrepreneurs and investors.
"I think the trip will further improve relations with a country like China that is becoming an important market for Colombia," said Holguin.
The two countries signed five bilateral agreements Monday tightening economic and technical ties.
Western Andean Region [contents]
Ecuador's President Correa determined to eliminate FARC presence
Brandon Barrett. Colombia Reports. April 26, 2012
Ecuador's President Rafael Correa announced plans to identify and eliminate any FARC presence within his country's borders Thursday.
"I cannot guarantee that there is no infiltration of the FARC [in Ecuador]" Correa told Ecuadorian network Gama TV.
The head of state promised to respect Colombia's sovereignty if authorities discover any FARC camps.
"We will arrest them, we will not kill them. If self-defense is necessary, our soldiers will have to respond," said the president.
Ecuador's 700km border with Colombia is in large part jungle terrain, and guerrilla camps are difficult to detect.
The pursuit of FARC rebels within its borders by Colombia caused a diplomatic crisis between the two countries in 2008.
Colombian forces, under the guidance of then Defense Minister, now President Juan Manuel Santos, crossed the Ecuadorean border and killed 21 alleged rebels, including FARC second-in-command Luis Edgar Devia Silva, alias "Raul Reyes."
Colombian officials accused Ecuador and Venezuela of harboring the guerrilla group. Correa fervently denied the claims and was outraged over a move he thought infringed upon his country's sovereignty.
Relations have seemingly improved since the 2010 election of Santos, who blamed his predecessor, Alvaro Uribe of not making enough effort to bolster diplomacy between the two South American nations.
Santos and Correa officially announced the resumption of bilateral trade and more open border crossings in December 2011.
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CNPC, ICPC May Join Ecuador-Venezuela Refinery -Ecuador Minister
Dow Jones. April 27, 2012
BEIJING – China's largest oil company and its biggest commercial bank have shown strong interest in joining an Ecuador-Venezuela refining project planned for Ecuador's Pacific coast, a senior minister from the Andean country said Friday.
China National Petroleum Corp., the country's top oil producer, and Industrial & Commercial Bank of China Ltd. (601398.SH), its largest commercial bank by assets, will hold follow-up talks in Quito in June on joining the venture, Minister Coordinator of Strategic Sectors Jorge Glas told Dow Jones Newswires.
China's funding of some of the project will further swell a torrent of Chinese money sloshing into Latin America.
The Washington-based research institute Inter-American Dialogue said in February that China's loan commitments to the region in 2010 hit $37 billion, more than those of the World Bank, US Export-Import Bank and Inter-American Development Bank combined, with Venezuela, Brazil, Argentina and Ecuador being the largest recipients.
Glas was speaking at the end of a visit to China for talks with oil companies and financial institutions about their possible roles in the $13 billion Refineria del Pacifico--a 300,000-barrel-a-day refinery and petrochemical complex due to be built by Ecuador and Venezuela by end-2016.
CNPC and ICBC have already signed a letter of intent to join the project, and are now negotiating a strategic alliance with the Ecuadorian government, Glas said. He declined to discuss the size of the potential equity stake or financing. "This will be a very complicated process" and will take several months to decide, he said.
Ecuadorian President Rafael Correa said on April 22 that China is "very interested in financing practically all" of the project, which is for now 51%-owned by Ecuador's state-run Petroecuador and 49%-owned by Venezuela's state-run Petroleos de Venezuela.
"China has a surplus in liquidity but a shortage in oil for its consumption, while Ecuador has surplus in oil but needs liquidity, so the operation is attractive for both parties," Correa said.
In their talks, CNPC and ICBC explored a wider alliance that could bring them into the entire supply chain for the project, Glas said, hinting that this could also involve oil production and them taking some of the gasoline and diesel offtake from the refinery.
"There are also some other countries, other than Venezuela and Ecuador, showing strong interest in supplying crude oil to the refinery," he said.
Engineering plans for the refinery were due to be presented in the next few months, and construction should start later this year, he said.
The minister declined to talk about a separate $1.7 billion loan from China which Ecuador's central banker said in February is now under negotiation, saying it fell outside his remit.
China has become the largest source of financing for Ecuador since it defaulted in 2008 on about $3.2 billion of its global 2012 and 2030 bonds, which effectively shut it out of private capital markets.
Chinese financing for Ecuador now totals $7.25 billion, including $2 billion from advances for oil sales, the Ecuadorian government has said.
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Ecuador 1Q Net Tax Collections Rise 34% On Year To $2.66 Bln
Dow Jones. April 27, 2012
QUITO (Dow Jones)--Ecuador's net tax collections rose 34% to $2.66 billion in the first quarter from $1.98 billion a year earlier, on an increase in value-added tax and income tax collection, the nation's Internal Revenue Service said in the latest issue of its statistics bulletin.
Collections from the value-added tax in the three months reached $1.34 billion, 14% higher than $1.18 billion a year earlier, according to the SRI, as Ecuador's Internal Revenue Service is also known.
Income tax collection reached $788.49 million, up 13.5% from a year before.
Other taxes totaled $532 million during the first quarter, the SRI said.
Ecuador expects to collect $9.56 billion in taxes this year. Last year, the Andean country collected $8.72 billion in taxes.
All figures have been rounded.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
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Bolivia: TIPNIS Protesters Launch National March, Seek Indigenous-Urban Alliance
Emily Achtenberg. NACLA. April 27, 2012
After a week fraught with tension, the second march to protest the Bolivian government’s proposed highway through the TIPNIS (Isiboro-Sécure Indigenous Territory and National Park) is set to depart today (April 27) from the Amazonian department of Beni, headed towards the highland capital of La Paz.
Originally scheduled to begin in the village of Chaparina, where participants in the first TIPNIS march were brutally repressed by police last September, the march was rerouted to start from the departmental capital of Trinidad due to a road blockade by highway supporters in San Ignacio de Moxos, preventing access to Chaparina. The protestors are expected to follow the 360-mile route of last year’s march, arriving in La Paz in late June.929 Location of march route blockades. Credit: Página Siete.
Unlike the first TIPNIS march, whose agenda was limited to the proposed highway and related concerns of CIDOB, the lowlands indigenous federation that has co-sponsored both mobilizations, the new march is billed as a national march for indigenous, environmental, and human rights and has actively solicited the participation of urban sectors. According to TIPNIS leader Fernando Vargas, the march is “not against President Evo Morales, but against his policies that violate the rights of Mother Earth and the Bolivian Constitution, approved by the MAS (Movement Towards Socialism) government.”
The highway project has bitterly divided inhabitants of the TIPNIS and of the Beni and Cochabamba departments which would be linked by the proposed road. The 5-day blockade, led by the San Ignacio Regional Workers Central and its 30 organizational affiliates, was backed by local MAS government authorities who reportedly threatened residents with utility shut-offs if they failed to participate. Interior Minister Carlos Romero intervened directly to negotiate an agreement disbanding the blockade, at least temporarily.
“The indigenous protesters have a legitimate right to march in peace,” said Romero. “If necessary, the government will provide security and protection to guarantee the march.” This represents a significant departure from the government’s posture during the first TIPNIS march, when federal police effectively reinforced the anti-march blockade at Chaparina and repressed the protesters in order to “save” them from a confrontation.
The UN Human Rights Commission has encouraged this change of message, along with other steps recently taken by Morales to help defuse current tensions. In addition to cancelling the road contract with Brazilian construction firm OAS, Morales has asked the legislature to extend the controversial community consultation process on the TIPNIS road for another 90 days, through September 10. Romero has also stated that the government is open to “unconditional dialogue” with the TIPNIS protestors, who are boycotting the consulta which they regard as illegitimate.
Still, the government has refused to indefinitely suspend the consulta, a step suggested by the UN and several MAS congressional leaders to facilitate the trust, dialogue, and prior agreements needed to legitimize the consultation process. Morales continues to insist that the TIPNIS road is the only feasible route to connect the Beni and Cochabamba departments, and has recently inaugurated helicopter, land, and water tours for reporters to propagandize his position for a captive audience.
Inside the TIPNIS, Morales has continued the controversial practice of delivering outboard motors, solar panels, and promises of development projects in a manner that critics say is timed to deter participation in the march and encourage support for the consulta. Government officials claimed this week that they have secured the support of 52 of 68 indigenous communities for the consulta protocol. The Sécure Subcentral, representing 16 communities and under (contested) new leadership, has reportedly reversed its previous position and now supports the consulta and opposes the march.
Outside the TIPNIS, the government has signed programmatic agreements with 12 of the 13 CIDOB regionals. At least 5 regionals, including 2 key indigenous groups in Beni (CPIB and CMIB) are officially boycotting the march. Still, factions within these organizations, including the vice president of CPIB, have shown up in Trinidad to join the march, supporting TIPNIS leaders’ contention that residents will defy local leaders to defend their territory as a matter of conscience.932 Lowland/ highland indigenous leaders finalize march plans. Credit: El Dia
While the delays, blockades, and internal divisions—along with the absence of Fernando Vargas, felled by dengue fever—have posed early challenges for the march, the relocation of the march route has provided an opportunity for indigenous protesters to strengthen their ties with urban sectors. This week in Trinidad, mobilized public health workers and teachers joined forces with the TIPNIS marchers in a demonstration of solidarity. Some 2,000 workers from the Beni Departmental Workers Central will accompany the march from Trinidad to San Ignacio, reasserting the pro-march stance of the COB (Bolivian Workers Central), its national parent organization, against the dissident regional.
The march is developing at a moment of heightened social conflict in Bolivia, with strikes underway by doctors, public health workers, and urban teachers. Major mobilizations by the COB around wage demands shut down La Paz this week, with significant demonstrations in other departmental capitals.
These constituencies were well represented at a recent meeting in La Paz attended by leaders of some 300 indigenous, labor, environmental, neighborhood, and human rights organizations from 5 cities, to discuss the formation of an “indigenous-urban alliance" around the TIPNIS issue. If the national TIPNIS march succeeds in joining the demands of these sectors into a unified platform with broad-based support, the consequences could be far-reaching not only for the TIPNIS conflict, but for Bolivia’s political future as well.
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Bolivian firm aims at raising garment exports to Venezuela
Fibre2Fasion. April 27, 2012
The Bolivian Association of Textile Producers Entrepreneurs (Aemprotex) is expanding its facilities in El Alto to increase its garment exports to Venezuela.
Aemprotex began four years ago with 12 partners, eight of whom have left in the intervening period due to production problems.
Currently, Aemprotex exports about 200,000 apparels annually to Venezuela that include T-shirts, leggings and sportswear in all colours.
The existing bilateral agreement between Bolivia and Venezuela is helping Aemportex to export its clothing to Venezuela.
However, Aemprotex has to depend on Peru, from where it imports its cotton and silk fabric requirements.
Mario Tarqui Arias, General Manager at Aemprotex, said the profits are negligible and in most cases only production costs are recovered.
He mentioned that Aemprotex manufacturing unit has 78 machines and it currently employs 20 workers, most of whom are women. He added that the staff increases during peak periods.
He urged the Government to restore the Andean Trade Preferences Act and Drug Eradication Act (ATPDEA) so that exports may resume again to the US market.
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Peru is latest developing nation to adopt climate change initiative
Reuters. April 26, 2012
LIMA (Reuters) - Peru became the latest developing country to enact a domestic climate change initiative in the absence of a binding global pact, adopting a resolution on Thursday to lower carbon emissions in its fast-growing economy.
As one of the world's most geographically diverse places, Peru said it is already feeling the effects of a changing climate, such as melting tropical glaciers in the Andes and high levels of solar radiation.
Record rainfall in the Amazon basin this year has wrecked crops, spurring inflation and hurting specialty exports like coffee. Lima, on the Pacific coast, is often regarded as the world's driest capital next to Baghdad.
"If we don't do something we will have problems with water supplies along the coasts, we know there will be more droughts, more rains ... we are already seeing temperature changes," said Mariano Felipe Soldan, head of the government's strategic planning office.
Peru's long-term climate change plan aims to include more renewable fuels in Peru's energy matrix, switch to a low-carbon economy and curb illegal logging in the Amazon rain forest.
Peru's model is based on one developed by South Africa. Similar plans are being implemented in Chile, Argentina, Colombia and Brazil.
The local plans were formed in part because an ambitious global agreement to limit greenhouse gas emissions has been delayed by disagreements between the developed and developing world.
Peru, which emits some 0.4 percent of the world's greenhouse gas emissions, backed a goal set at last year's U.N. talks in Durban, South Africa to forge a wider international climate change deal by 2015 that would come into force by 2020.
But like many developing countries, Peru insists that any future global agreements to reduce emissions preserve its right to industrialize. It says big polluting countries should bear the brunt of emissions cuts.
"Not all countries can be treated as equals, developing economies must be taken into account by the international community," said Vice Minister of Foreign Relations Jose Beraun.
The seemingly intractable issue of climate change has been largely replaced by the less polarizing issue of sustainable development at the U.N.'s next big conference on the environment, the Earth Summit, in June.
(Reporting By Caroline Stauffer; Editing by Terry Wade and Christopher Wilson)
Mexico, Central America and Caribbean [contents]
US: Mexico seized 68,000 guns from US since 2006
PETE YOST. AP. April 26, 2012
WASHINGTON — The government said Thursday that 68,000 guns recovered by Mexican authorities in the past five years have been traced back to the United States.
The flood of tens of thousands of weapons underscores complaints from Mexico that the U.S. is responsible for arming the drug cartels plaguing its southern neighbor. Six years of violence between warring cartels have killed more than 47,000 people in Mexico.
The Bureau of Alcohol, Tobacco, Firearms and Explosives released its latest data covering 2007 through 2011. According to ATF, many of the guns seized in Mexico and submitted to ATF for tracing were recovered at the scenes of cartel shootings while others were seized in raids on illegal arms caches. All the recovered weapons were suspected of being used in crimes in Mexico.
At an April 2 North American summit in Washington, Mexican President Felipe Calderon said the U.S. government has not done enough to stop the flow of assault weapons and other guns from the U.S. to Mexico.
Calderon credited President Barack Obama with making an effort to reduce the gun traffic, but said Obama faces "internal problems ... from a political point of view."
There is Republican opposition in Congress and broad opposition from Republicans and gun-rights advocates elsewhere to a new assault weapons ban or other curbs on gun sales. The Obama administration says it is working to tighten inspections of border checkpoints in the absence of an assault rifle ban that expired before Obama took office.
For more than a year, ATF has been reeling from accusations that some of its agents in Arizona were ordered by superiors to step aside rather than intercept illicit loads of weapons headed for Mexico.
The Justice Department's inspector general and Congress have been looking into the Arizona gun probe, Operation Fast and Furious.
The issue of gun control legislation hasn't been part of the Republican-led probe of Fast and Furious by the House Oversight and Government Reform Committee.
The number of all types of ATF-traced firearms manufactured in the U.S. or imported into the U.S. and later recovered in Mexico rose from 11,842 in 2007 to 14,504 in 2011, according to ATF. The figures for U.S.-sourced firearms were 21,035 in 2008; 14,376 for 2009; and 6,404 in 2010. Included in those totals, the number of rifles recovered in Mexico, submitted to ATF for tracing and found to have come from the U.S. rose from 4,885 in 2007 to 8,804 last year.
Mexican law enforcement officials report that certain types of rifles such as AK variants with detachable magazines are being used more frequently by drug trafficking organizations, ATF said in a news release.
Mexico has provided ATF information on 99,691 guns. ATF determined that the source for 68,161 of the weapons was the U.S, 68 percent of the total. For the remainder, ATF was unable to determine a U.S. source or was unable to trace the request to a country of origin. The 68 percent figure is down from estimates of 90 percent in years past when Mexico was sharing less information with the U.S.
The controversial tactic of "letting guns walk" out of gun shops in the hands of suspected straw purchasers was used in Operation Fast and Furious at ATF in Phoenix in an effort to track the guns to major weapons traffickers and drug cartels in order to make criminal cases against smuggling kingpins who had eluded prosecution for years. But the tracking of the weapons was faulty, and many of them wound up at crime scenes in Mexico and the U.S. Two of the guns spotted at one point during Fast and Furious were later discovered at the scene of the killing of U.S. border agent Brian Terry.
Before Fast and Furious, ATF in Arizona had tried the gun-walking tactic in three separate investigations during the George W. Bush administration, with other tracking problems and only limited success.
During the Obama administration, ATF has undergone a management shake-up and Attorney General Eric Holder has called Fast and Furious a flawed operation that must never be repeated.
Sen. Chuck Grassley, the top Republican on the Senate Judiciary Committee, said that thorough gun statistics are hard to come by and tricky to interpret.
"The only guns Mexico is going to submit for tracing are guns they know are from the United States, which clearly paints an incomplete picture of the firearms found in the country," Grassley said.
He said some of the guns would track back to the U.S. because of the federal government's own gun-walking operation.
Frederick Hill, a spokesman for Republicans on the House Oversight and Government Reform Committee, criticized the Justice Department over Fast and Furious.
"The Obama Justice Department's efforts to facilitate the transfer of thousands of weapons to Mexican drug cartels does not appear to have helped stop the flow of illegal weapons to Mexico," said Hill. Operation Fast and Furious lost track of 1,400 of more than 2,000 weapons agents identified as suspect purchases.
Sen. Dianne Feinstein, D-Calif., chairwoman of the Senate Caucus on International Narcotics Control, said lax U.S. gun laws contribute to an overwhelming majority of guns recovered in Mexico that originated in the United States. Congress, she said, has been "largely silent" while Mexican drug traffickers continue to gain access to military-style firearms coming from the United States.
The period 2007 through 2011 coincides with Calderon's term as president of Mexico. Ineligible to run for re-election, Calderon made a government crackdown on warring drug cartels the hallmark of his six-year term. The election for a replacement is July 1. His center-right party has seen its election chances fall in the face of a wide perception in Mexico that the crackdown has not worked.
In the Obama administration's efforts to slow the illicit trafficking, gun store owners in Southwestern border states are suing to overturn a requirement that they report to ATF when customers buy multiple high-powered rifles within a consecutive five-day period. To date, the program has been upheld in one federal court. ATF says the reporting requirement, imposed six months ago, has led to 100 criminal investigations and the referral of 30 cases for prosecution involving 100 alleged gun trafficker defendants.
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TV host killed, another reporter threatened in Honduras
Tania Lara. Knight Center. April 27, 2012
The wave of violence costing the lives of Honduran journalists continues unabated. A Honduran TV host was shot and killed minutes after ending his entertainment program, on Monday, April 23, reported IFEX.
Noel Alexander Valladares Escoto, TV host and producer of the program El Show de Tecolote , was shot several times while he was just steps from the Maya TV headquarters, reported the newspaper Tiempo. During the attack, the host's two bodyguards were also killed. His wife, Nelly Yorleni Pavón, also was injured.
The host was a victim of extortion, according to the newspaper La Prensa.
In addition, on April 18, Amnesty International warned that another Honduran journalist's life was at risk.
Dina Meza, who writes about human rights for the website Defensores en Línea and does communications work for the Committee of Relatives of the Detained and Disappeared, said that she received a threatening phone call and text message, said the website Frontline Defenders.
The journalist said she was even photographed while walking with her children in the neighborhood where she lives, reported the organization C-Libre Honduras.
In 2006, the Inter-American Commission on Human Rights granted protection measures to journalists, but, until now, authorities have not protected media professionals, reported Amnesty International.
Honduras, where someone is killed every 74 minutes, is the country with the highest homicide rate in the world, according to the United Nations. In addition, it is the second-most dangerous country in the Americas for journalists. For more information, see this Knight Center map about attacks on the press in Central America.
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Jamaica struggles toward a sound economic future
Nicholas Davis. BBC. April 27, 2012
Jamaican Prime Minister Portia Simpson-Miller Portia Simpson-Miller's party made a campaign promise of making a new deal with the IMF within two weeks of re-election
Half Way Tree is always busy. The traffic intersection that seemingly splits Kingston into two is one of the best-known views of the city, the colonial clock tower in the middle where uptown meets downtown, rich meets poor.
As office workers head to their desks, a young man at the traffic lights hustles, shouting: "Cash for your gold, any little piece we buy, money for your gold."
Kingston is like most modern cities, its inhabitants rushing to work or making money where they can.
But for many people, life is tough; it's estimated that about 17% of the population live below the poverty line on just under $4 a day.
In the business centre of the city, New Kingston, Marvin makes a living driving a taxi he's rented after losing his job in construction.
"People in my community say we need to get jobs, but there are none around, no jobs at all."
He says he's lucky to have found something.
Sticking point
Unemployment is above 12% and the country is one of the world's most indebted, owing about $18bn (£11.2bn; 13.7bn euros).
The amount the country earns is dwarfed by what it needs to repay, with a debt-to-GDP ratio of about 130% of GDP - not far behind crisis-struck Greece.
Anna-Kay Tomlinson Anna-Kay Tomlinson says life is tough even for the middle class
The Jamaican government has been in talks with the International Monetary Fund (IMF), part of ongoing negotiations over financial aid to the Caribbean nation.
It received an injection of $1.27bn in 2010, and the fund may provide more if certain conditions are met.
The country elected a new government in December 2011 headed by Portia Simpson-Miller; her centre left People's National Party (PNP) made a campaign promise of making a new deal with the IMF within two weeks of re-election.
Now after just over 100 days into office, a deal hasn't yet been made and the discussions remain secret.
Like the previous administration of the Jamaica Labour Party (JLP), a sticking point remains how the country will implement tax and pension reform and reduce the public sector wage bill.
Accidental success
Jamaica's fortunes have changed dramatically since independence 50 years ago.
Damien King, an economist at the University of the West Indies, says: "Its success was built upon two industries: one was bauxite and the other was tourism, and both of those were accidents of the post-war industrial boom in the US.
"America needed raw materials, the country grew richer and needed somewhere to spend vacations, and once that petered out, the Jamaican economy got into trouble."
Jamaica is still one of the largest suppliers of aluminium ore in the world, but low demand has seen prices drop and some plants close.
And the agricultural sector has declined.
Bananas used to be described as green gold here. They aren't even sold for export anymore. Increased competition and bad weather has forced many banana farmers out of business, and crippled the export trade.
They hoped manufacturing banana chips as snacks could prop up the industry, but low-cost imports from other Caribbean nations are now widely available on supermarket shelves.
Tourism continues to be the silver lining in a cloudy economy. Last year saw a record number of holidaymakers. Some 1.75 million arrived here, up by nearly 2% on 2010, but many resorts have boosted visitor numbers by discounting prices heavily.
The global recession also hit remittances hard, with people being able to send less back to the island.
Mitzi Gordon Burke Green, who works for Swift Cash, one of the island's remittance agencies, says: "We had growth up to 2009 but then it took a dive. There has been incremental growth because Jamaican people overseas are always sending money home. Even if they go without, they'll always send something for their people here."
Rising prices
In the resort town of Ocho Rios on the north coast, Anna-Kay Tomlinson is setting up for breakfast and, like many in the country, the restaurateur has to watch what she spends.
"Because of the cost of electricity, we don't sleep with the air conditioner on and every night we turn off the lights," she says.
"I always saw other people being careful at the supermarket, now we have to. I'm middle class, a business owner and pretty successful, and we've got to watch what we're buying."
In the past five years, the cost of living has gone up by more than 50% and the country now needs to find solutions and is looking to make the most of its people and resources.
Getting more people to invest in Jamaica and growing local businesses is the job of Anthony Hilton, the country's minister of industry.
He says the country needs to be more competitive and productive: "We need to broaden our private sector to include more small- and medium-sized business, and lots of work needs to be done to help the poorer sections of our society."
For Jamaica, boosting its manufacturing industry is a new priority.
At a bottling plant owned by the Wisynco Group, drinks are exported around the region and as far away as Europe.
"Manufacturing is essential. We've lost jobs in agriculture. We're losing jobs in bauxite, so the only way that we're going to be able to gain back those jobs is through manufacturing," says Wisynco chief executive William Mahfood.
The country is also trying to build its technology sector.
Call centres are being set up, making the most of the country's English-speaking population and location. The industry now employs about 10,000 people, making the country more than $35m a year.
Michelle Yeo, one of the managers at Fullgram solutions in Kingston, says: "The call centre industry is picking up now. We began just two years ago with 33 employees, now we have over 500.
"Being English-speaking gives us an opportunity to work with a wider selection of customers - we now have clients in the US, the UK and locally."
Creating jobs and diversification is key for the country to fight poverty and grow its economy, but it may need help.
Its leaders hope those fresh discussions with the IMF over a new economic programme will lead to this country getting back on track.
Region: Trade, Security, Economy and Integration [contents]
“Land grabbing” and the concentration process in Mercosur members
Mercopress. April 25, 2012
The processes of concentration, foreign ownership and land degradation came to be a central concern of supranational bodies and NGOs that warn, like the United Nations Organizations for Food and Agriculture Organization (FAO), of the “negative effects of these phenomena on food security, agricultural employment and the development of family farming.”
A FAO study focusing on South America – and specifically, the four Mercosur members: Argentina, Brazil, Paraguay and Uruguay, all major food producers — warns of the situation.
The report, “Land grabbing in Latin American and the Caribbean viewed from broader international perspectives”, confirms “we face a new wave of foreign capital that caused a tremendous concentration process” and an “unchecked rise in the price of land, that in Uruguay for example increased seven-fold in the last 10 years”.
Uruguay has a total acreage of 16 million hectares. In the last decade transactions were carried out for 6.3 million hectares. According to the latest statistics from the country’s National Institute of Colonization, 83% of the fields sold in 2010 (336,000 hectares) were bought by foreigners, including Europeans, Brazilians, Argentines, New Zealanders, Koreans, and US citizens.
Until now, when talking about foreign ownership of land, UN agencies referred to the private actions of investors (speculators) driven by the pursuit of profit. In the report, released in November 2011, the emphasis is for the first time on “land grabbing”, defined as the purchase of land for food production in which foreign governments are also involved.
Just as the FAO is concerned with the sale to foreigners of land to use for the production of food or other plants intended to make bio-fuels, other entities are talking about the sale and concentration in certain hands of land for the development of mining or tourism.
Grain, an international organization that supports campesinos and social movements, cites the cases of mining companies like US firm Newmont Mining, which is digging in the Yanacocha gold deposit in Cajamarca, Peru, and investments by Canada´s Barrick Gold in “South America highlands”
But Grain also sets its sights on the countries that are involved in land grabbing. While it doesn’t specify the purchases by country, it states that South Korea ranks first, with 2.3 million hectares, followed by China, 2.1 million hectares and Saudi Arabia, 1.6 million hectares. The motivations behind the purchases, according to Grain, are obvious: they are countries with large economic growth that have the funds to buy land wherever there are resources they don’t have, like soy, wheat, and rapeseed.
In the case of China — consumer of virtually all the transgenic soy produced by Argentina, Brazil, Paraguay and Uruguay— “there is an attempt to buy land in countries of great natural wealth and produce the food needed to supply its domestic market”, according to Grain. In 2010 Argentine courts halted a contract of Patagonian province of Rio Negro with Chinese company Heilongjiang for the sale of 254.000 hectares to be used for just such a mega-project.
Also in Argentina, on Feb. 22 the government in the Northern province of Chaco announced it had reached an agreement with a semi-state Saudi Arabian firm, turning over 200.000 hectares of public lands, a virgin forest known as “El Impenetrable” which will be used for food production to be exported to the Middle East. In return, the Riyadh-based company will invest 400 million dollars. There are currently 60.000 members of the Wichi indigenous community living there who will be displaced.
The International Land Coalition, or ILC, a global alliance of civil society and intergovernmental organizations working to promote secure and equitable access to land, highlights the “significant role played by national elites in the process of concentration of the lands”, a phenomenon also observed by Fernando Eguren, president of the Peruvian Centre for Social Studies. There are also the issues, he added, of “a concentration of influences, political power in the geographic areas under development, and ... restrictions on democracy.
The ILC study, which refers not to Latin America exclusively, but rather to “a set of developing countries”, offers a startling conclusion that affirms the speculative underpinnings of these investments: of the 71 million hectares that changed hands in 2010, 58% was for bio-fuel crops, 22% went towards mining, tourism, and logging, and only 20% was earmarked for food production.
