Amid announcements that Venezuela’s Hugo Chavez is seeking indefinite terms for the presidency and thereby further undermining what remains of Venezuelan democracy, comes more moves to shore up support from leftist / anti-American leaders the world over… this time, very close to home, in London.   more »

Argentine president Nestor Kirchner announced this month that he would not run for re-election in order to put forward his wife, Senator Cristina Fernández de Kirchner, as a presidential candidate. Unlike the wives of Juan Peron, Kirchner is an accomplished politician who has served both in the lower house of Congress and now the Senate. Many are comparing her to Hillary Clinton – both are lawyers, both were involved in policy making during their husbands presidency and both are notable politicians in their own right.   more »

The World Bank released its annual “governance indicators” yesterday – a set of six variables which is designed to measure governance globally.  The project has many critics, broadly falling into two camps – those that oppose the idea on principle and argue that the World Bank should not be in the business of rating countries on governance or any other metric, and those that find fault with the indicators methodology, which could accurately be described as a “kitchen sink” approach to measuring corruption, political stability and other categories of governance with surveys and other imprecise metrics....   more »

After US President George W. Bush’s long trip to Latin America this spring, the US has announced a number of very small humanitarian and aid initiatives for the region which appear like buy-offs to the uninitiated. Dedicating just $20 million (the cost of a single day of the continuing Iraqi war), the US has put a large hospital ship off the coast of several Central American cities in an effort to buy popularity. One can’t help but notice how much this mini-mission has in common with the itinerant Cuban doctors working in Venezuela.    more »

Rafael Correa, Ecuador’s new president, has been playing a game of chicken with the international capital markets.  Earlier this week the government announced that it would utilise a 30 day grace period to repay interest on its bonds – in effect, defaulting.  Yesterday, however, the government surprised the markets by making the payment on time. Predictably, the response in the bond markets has been volatility: first a massive selling off of Ecuadorian debt, then a rally.  All of this follows on a campaign promise by Correa to restructure the country’s debt.

 

There are ...   more »

Attending a conference last week at Chatham House on political risk, I was faced with the most surprising statistic: Pemex and PDVSA are the third and fourth largest companies in the world, respectively.  The presenter, Dr. Harm Bandholz of UniCredit Markets and Investment Banking, informed us that the Mexican and Venezuelan state oil companies were recently ranked by the Financial Times as third and fourth largest companies in the world on the basis of total assets when both state owned and public companies were compared.  This makes both larger than General Electric, and lagging behind only ...   more »

Former Mexican President Carlos Salinas de Gortari (1988-1994) was in London this week giving a talk on NAFTA at the London Business School. The argument of his presentation was that NAFTA was intended to be an instrument to making the Mexican economy more competitive and robust, not an end in and of itself. He presented a number of statistics which demonstrated that Mexico had lost competitiveness in the decade since NAFTA on a number of metrics, and was highly critical of the lack of progress in reforming the Mexican economy further during the Zedillo and Fox administrations...   more »

The Latin American trading arrangements just got more complex as Colombia and the US moved one step closer to signing a free trade agreement (FTA), despite the US Congress’ increasingly anti-free trade stance. The agreement follows on a raft of recent Latin American free trade agreements including the US – Peru FTA, the US - Central American Free Trade Agreement (CAFTA), which later incorporated the Dominican Republic as a member, and the Chilean – US agreement signed in 2002. The US was also negotiating a free trade agreement with Ecuador until 2006...   more »

Lauren Phillips is a Research Fellow in the International Economic Development Group (IEDG). She works on financial market performance, capital flows and financial crises; the role and reform of international institutions; perceptions of political risk; Latin America. See Lauren Phillips's projects list here.

Email: l.phillips@odi.org.uk

The announcement last week that Hugo Chavez planned to nationalise telecom and energy companies shouldn’t have come as much of a surprise to those who have been observing the trends in the South American economy...   more »

Javier Santiso’s new book Latin America’s Political Economy of the Possible (MIT Press: Cambridge Massachusetts, 2006) is a more thoughtful consideration of current trends in Latin American economics and politics than other commentators have mustered in this fraught year of electoral campaigns.  It is also written with passion and demonstrates an enviable facility with the history, literature and politics of the Latin American region.  However, it doesn’t quite live up to the praise on the back cover from notable academic luminaries.   There are some substantive limitations of the book, and some which are more stylistic.  ...   more »

Yesterday global financial markets faced their worst sell of since the Russian default and Asian crisis of 1997-98. The Brazilian and Mexican stock markets – two of the largest in the developing world – closed massively down, as did those in Turkey, Russia, Indonesia and India (“Emerging markets lead global decline” 22 May and “Equities tumble worldwide” 23 May, both www.ft.com ) . What are the implications for this renewal in financial market volatility? What will its impact be on Latin American economies and polities?   more »