There has been a surge of recent interest in China’s impact on developing countries, but far more of this discussion has focused on Africa than on Latin America. This is partly because the consequences of China's growth for Latin America are likely to be both more complex and less direct. Unlike Africa, the Latin American resource sector is dominated by large state-owned companies and how these will interact with new Chinese investment is hard to predict. A more developed infrastructure also means China will have less of a competitive advantage in the race to exploit Latin America’s natural resources. In Latin America, there are likely to be both winners and losers, as a recent report by the    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 »

 The Western media depict him as a Chavista and the latest South American leader to join the ‘Bolivarian revolution’, yet he describes himself as a ‘Catholic humanist’. He has been criticized both for populism and for using the overly complex language of an academic. So, who is Rafael Correa and what does he really stand for?

 Representing his newly-formed Alianza PAIS, Correa won the November run-off elections in Ecuador with a surprise landslide victory, gaining 58% of the vote. His campaign promises included a new more democratic constitution (to be written by a Constituent Assembly), cutting ties with the IMF and World Bank, ...   more »

In this talk, hosted by the Institute for the Study of the Americas (ISA), independent consultant and journalist Colin Harding offered an insightful analysis of the 2006 presidential elections in Ecuador, in which Rafael Correa was elected as president. Harding described Correa as a good speaker who had appeared as a new face representing the promise of change. In the first part of his campaign, he said, Correa focused on denouncing the inequalities of the system and arguing the need for a new constitution.  His campaign gained such momentum that he was expected to win outright; the ...   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 »