Monthly Archives: June 2011

Growth vs. Environmental Concerns in Brazil and Chile

FT – Chile hydroelectric power plant on hold 

FT – Amazon faces fresh threat of deforestation



FT – Mexico captures ‘La Familia’ drug boss

Although the latest arrest brings to 21 the number of top-level cartel leaders killed or arrested since the beginning of the operation in 2006, President Felipe Calderón’s all-out offensive against organised crime has resulted in about 40,000 deaths thus far. The bloodshed might affect Mr Calderón’s popularity, with about a year remaining before presidential elections.

FT – Argentina: fiscal and monetary addiction

On Tuesday President Fernández announced she is seeking re-election in October for another 4-year term. The chances of Ms. Fernández winning are high, because the economy is booming: gross domestic product was 9.9 per cent higher last quarter than the year before and export earnings rose 30 per cent in 2010.  The government further stimulates the domestic economy by increasing the public expenditure in 30 per cent in the first quarter of the year. But in spite of the increased tax revenues, the government will rack up a fiscal deficit this year. Whereas Brazil tries to maintain the real down, Argentina, in spite of a similarly hot economy, supports a less expensive currency, boosting domestic purchasing power. The the trade surplus (since 2002) is expected to turn to a deficit in the second half of the year. High commodity prices mean that state stimulation is unnecessary for Argentina’s economic boom.

NYT – Chilean Court Blocks Plan for Patagonia Dam Project

“Chile, more than any of its neighbors in Latin America, is struggling to secure energy supplies to keep up with its economic growth. The country will need to double its capacity to generate electricity over the next 10 to 15 years, according to government projections.”

“Chile has little oil or natural gas of its own. Importing gas from Argentina has been unreliable, and the earthquake that damaged nuclear reactors in Japan this year has rendered building one in Chile unlikely, given its propensity for earthquakes.”

NYT – President of Argentina to Seek Re-election

“Polls indicate that Mrs. Kirchner, 58, who succeeded her husband, Néstor Kirchner, as president in 2007, lacks lacks majority support in Argentina but might easily win re-election in the Oct. 23 first-round vote because the opposition is divided. … Mrs. Kirchner, the candidate of the Peronist party, will face challenges from Ricardo Alfonsin, the son of former President Raúl Alfonsin, and a fellow Peronist, former President Eduardo Duhalde, among others.”

“Her administration has had its difficulties, most notably a nationwide strike that halted farm production in 2008 to protest government grain export tariffs. Mrs. Kirchner had imposed the tariffs to try to force farmers to sell more of its production domestically and dampen rising food prices. Her own vice president, Julio Cobos, cast the deciding vote in the Senate defeating the export tariff package. The government has also struggled to contain inflation, which unofficial estimates have shown at times as over 20 percent.”

“At the same time, her administration has overseen a continuation of the impressive economic growth notched by her husband’s government. The World Bank estimates Argentina’s economy will expand by 6.3 percent this year, second only behind Peru in Latin America.”


NYT – Mexican Police Arrest Leader of Crime Gang

“Six months after killing the leader of La Familia Michoacana, one of the country’s most ruthless criminal gangs, Mexican police officials said Tuesday that they had arrested his successor,” – José de Jesús Méndez Vargas, known as “el Chango” –  “hoping to deliver a blow to the group and bolster public support for the war on organized crime.”

“Going after kingpins — 21 of the 37 top drug lords have been captured or killed since 2009 — has become central to the government’s strategy and a public selling point that it is winning the war on organized crime. But some experts contend that violence has only grown worse, in part because of the power vacuum left by the departed chiefs.”

Economist – Troubles on two fronts

“Venezuela is in the throes of a presidential campaign that does not officially begin until next year. The opposition Democratic Unity coalition is due to choose its candidate in February. Assuming the government does not tamper with the timetable—which is by no means guaranteed—the election will be held in December 2012. But one issue already overshadows all others in this divided nation: can the former army officer, who has been in power since 1999, win a third six-year term?”

“Having been mired in recession for the past couple of years, and plagued by inflation of close to 30%, the country has recently returned to growth. Thanks in part to higher oil prices, the government is optimistically projecting a 4% rise in GDP this year, although private-sector estimates are around half that rate. Even if growth remains modest, Mr Chávez has squirrelled away billions of dollars in unaudited public funds, and should be able to pay for a pre-election spending binge.”

“The president himself has pointed to polls from a government-linked outfit, GIS XXI, which gave him 51% support. That is impressive after 12 years in office, but is well short of the dominance he enjoyed going into previous elections. Less sympathetic analysts have noted that three-fifths or more of the electorate think he should step down in 2012. One survey found that the leading contender for the opposition candidacy—Henrique Capriles, the youthful governor of Miranda state, which includes much of greater Caracas—could beat him in a head-to-head contest.”

“In addition to his blatant use of state resources for his campaign, Mr Chávez enjoys a stranglehold over the electoral authority. Many state employees believe the government knows how they vote, a concern that will only grow if a proposal to equip electronic ballot machines with fingerprinting devices is approved.”