Author Topic: Latin America  (Read 92557 times)

Crafty_Dog

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GPF: Milei takes on Argentinian State
« Reply #250 on: December 28, 2023, 08:47:06 AM »
December 28, 2023
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Argentina’s New President Takes a Gamble
In a country accustomed to heavy government intervention in the economy, Javier Milei’s reforms are raising eyebrows.
By: Allison Fedirka
Argentine President Javier Milei entered office less than three weeks ago, but already he has introduced a raft of changes beyond the house cleaning typical of any new government. He has said his administration aims to revamp Argentina's institutional and legal frameworks. Though many of the reforms so far relate to the economy, they’re only the first steps in Milei’s plan to rebuild Argentina and eliminate the structural problems that have plagued the country for over a generation.

Milei wasted no time in making drastic changes to the economy in his first days in office. His government slashed the artificially high official exchange rate for the peso, reducing it from around 400 pesos to the dollar to 800 overnight. The government also auctioned approximately 2.96 trillion pesos' ($3.7 billion) worth of treasury debt denominated in the local currency to help clear the central bank’s balance sheet of short-term arrears held by local creditors. The move is seen as a precursor to removing currency controls and an initial step toward “dollarizing” the economy. Economy Minister Luis Caputo also announced steep cuts to energy subsidies for consumers. Such subsidies were a thorn in the side for many previous governments, but the fear of popular backlash prevented past leaders from tackling the issue. Caputo also cut budgets for social programs and dismissed recently hired public sector employees.

Argentina's Economic Contractions of More Than 10%

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Deposits Abroad, Argentina vs Latin America

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But the president’s mega-decree introduced on Dec. 21 has garnered the most attention. The executive order, known as a “necessity and urgency” decree, consists of 366 articles that would revamp 41 economic rules with the aim of deregulating markets, encouraging competition, reducing government intervention in the economy and simplifying the relationship between the private and public sectors. It focuses heavily on removing price distortions, eliminating price fixing and removing barriers to international trade. It also opens opportunities for wider use of foreign currency in the domestic market, particularly the real estate sector. The changes further aim to attract foreign investment, including by opening up state companies for privatization, removing restrictions on land purchases, guaranteeing payment for contracts in foreign currencies and eliminating costs in the mining sector.

However, many have questioned the constitutionality of the decree, saying it oversteps the president’s powers. It’s important to note that necessity and urgency decrees are nothing new in modern Argentine politics. The 1994 constitution formally included them in the country’s legal framework, indicating the measure should be used only when “exceptional circumstances make it impossible to follow ordinary procedures.” (The National Congress can revoke these decrees, but it would require substantial support from both chambers.) Since 1994, presidents have issued 979 of these special measures. (By comparison, only 25 emergency decrees were passed between 1853 and 1983.) Former President Nestor Kirchner, who held office from 2003 to 2007, held the record with 236 decrees. But some legal experts argue that the measure oversteps the powers afforded to the president. Since last week, members of the opposition have threatened to repeal the decree, and average Argentinians have taken to the streets to show their disapproval.

Presidential Use of Decrees of Necessity and Urgency

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But Milei was apparently prepared for the backlash. He immediately followed his announcement of the decree with a call for an extraordinary session of congress between Dec. 26 to Jan. 31. In addition, the first three of 11 initiatives the administration put before congress introduced economic changes that cannot be executed by decree, such as changes to tax rules. By doing this, the government wanted to show that it wasn’t relying solely on executive orders to implement its agenda. Furthermore, some of the decree articles and proposed initiatives reflect ideas supported by other leading politicians. For example, the decree prohibits people from blocking or occupying establishments that are considered essential, a measure that echoes the anti-protest proposals presented by Patricia Bullrich, a first-round presidential candidate. Another initiative presented to congress would reverse reductions in personal income taxes for many workers, a move presidential candidate Sergio Massa promoted during his campaign. By including proposals from other parties, Milei aims to split the opposition and gain more supporters for his agenda.

Milei is also trying to manage discontent from three social groups: agricultural laborers, the white-collar middle class and unionized industrial workers. All three have been at the center of major public unrest since Argentina’s return to democracy in 1983. In general, the agricultural sector has responded positively to the announced reforms, in part because currency devaluation would enable them to earn more in pesos for their exports, which are priced in dollars. However, many middle-class Argentinians fear losing their rent-controlled apartments when leases are up for renewal and having less disposable income as their costs rise. Labor unions, meanwhile, have taken issue with possible changes to income taxes and labor rules that extend the trial period for new hires and make it easier to terminate workers during their probation. They have also voiced concerns about anticipated job losses related to the government’s cost-cutting measures. This includes construction workers who could lose work as the government spends less money on infrastructure and other projects.

But many of the nation’s leaders over the past 30 years faced anti-government protests. No matter who won the election in October, social unrest was bound to happen at some point. Milei so far appears to have protected the government’s relationship with the agricultural sector, which will play a critical role in the first half of 2024 as farmers sell off crops to bring in U.S. dollars. He also appears intent on using a tried-and-true strategy of dividing various labor and social groups over specific issues. While this won’t eliminate opposition to his plan, it will reduce it.

The latest initiatives brought before congress have given the strongest indication of Milei’s intentions beyond the economic reforms. He’s asked congress to consider proposals to modify the functions of the state, the voting system, and procedures for appointments and promotions. The goal is to root out corruption, curb the patronage system and reduce the size of the government. About half of the 11 initiatives relate to ending double taxation for people living in Argentina who are citizens of Japan, China, the United Arab Emirates, Luxembourg and Turkey. They also reform rules for signing international treaties and authorizing international travel for the president.

The government has kept a close watch on reactions from foreign governments and investors to the proposed changes. Brazil has expressed concern over the potential impact on the Mercosur trading bloc. Similarly, China seems wary about the ideological shift in the Argentine government and the impact it could have on trade. Beijing threatened to suspend a $6.5 billion currency swap agreement with Argentina to push Milei to make clear his desire to continue to engage with China. The new government has asked President Xi Jinping not to suspend the agreement and designated a new ambassador to Beijing. Argentina’s reforms aim to send a message that it’s open for business with all foreign investors, but the problem for countries like Brazil and China is that they fear they could become less competitive in the Argentine market and, particularly for Brazil, lose foreign investment to Argentina because of its market-friendly changes.

Even if congress doesn’t derail the changes, it will be several months before they show any results. For Milei, success will mean implementing the reforms and managing the accompanying social unrest. If he succeeds, the government will be able to relieve pressure on the national budget, attract investment and bring in much-needed foreign capital. If he fails, Argentina’s economic malaise will only worsen.

ccp

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I see a new friendship on the horizon
« Reply #251 on: December 31, 2023, 08:43:16 AM »
if Trump wins ----->>>

DJT and JM ==== BFF!

Trump & Javier Milei

It would be great to have a S. America country become our best friends.

I read their economy is suffering from inflation again.


Crafty_Dog

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ArgentinaL Hezbollah suspected in plot
« Reply #252 on: January 03, 2024, 01:58:19 PM »



Suspects held over alleged Argentina parcel plot
3rd January 2024, 11:29 CST

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By Vanessa Buschschlüter
BBC News
Twitter/@PatoBullrich
Argentina's security minister released a blurred photo of one of the suspects
Police in Argentina have arrested three men from Lebanon and Syria suspected of planning a "terrorist act" in the South American country.

They had booked into a hotel near the Israeli embassy in Buenos Aires and were reportedly waiting for the arrival of a large parcel from Yemen.

The city is currently hosting the Pan-American Maccabiah Games, which brings together thousands of Jewish athletes.

Argentina is home to Latin America's largest Jewish community.

Security Minister Patricia Bullrich said the government had received information from the US and Israel about a potential threat to the Maccabiah Games.

"Three people suspected of belonging to terrorist cells are being investigated," she wrote on X, formerly known as Twitter.

Speaking to reporters, she said the three men were arrested on 30 December.

"There was particular information which worried us, and that was that they had rented [rooms] in a hotel which is no more than two blocks from the Israeli embassy."

She added that while the men had arrived on different flights "they are linked". The minister also said the suspects were waiting for a parcel to be delivered from Yemen.

The security ministry described the parcel as "an international shipment" which it said weighed 35kg (77lb). They did not specify what the contents may have been.

The Jewish community of Buenos Aires has been the target of two deadly bomb attacks in the past.

In 1992, 29 people died when a suicide bomber drove a lorry loaded with explosives into the Israeli embassy.

But the most deadly attack happened in 1994, when 85 people were killed in the bombing of the Amia Jewish cultural centre in the capital.

Argentina accused Lebanon's Hezbollah of being behind both attacks, which the Islamist group denied.

Security experts believe Hezbollah, which is backed by Iran, has been active on the border between Argentina, Brazil and Paraguay.

Two months ago, Brazil said it had foiled an attack on its soil following the arrest in São Paulo of two men suspected of being linked to Hezbollah.

The group is considered a terrorist organisation by the UK, the US, Argentina, Israel and Gulf Arab countries among others.

Crafty_Dog

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ccp

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Re: Latin America
« Reply #254 on: January 11, 2024, 09:24:53 AM »
This is totally sad
with the darn gangs in Latin America!

they are terrorists and should be dealt as such.

Agree with military response

This is beyond simple policing:
https://www.msn.com/en-us/news/world/once-peaceful-ecuador-enters-a-new-era-we-are-in-a-state-of-war/ar-AA1mLOXV

Crafty_Dog

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Re: Latin America
« Reply #255 on: January 11, 2024, 09:30:04 AM »
Just had an interesting conversation in the gym yesterday with a woman.  She and her husband were in El Salvador for bitcoin reasons (and him for the surfing too haha). 

I asked about the crime rate, MS-13 etc.

"No worries" she replied.  The President had had the army throw all of them in jail.

ccp

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Re: Latin America
« Reply #256 on: January 11, 2024, 10:49:38 AM »
"No worries" she replied.  The President had had the army throw all of them in jail."

 :-D :-D :-D

I have had numerous patients from these countries over the yrs.
A couple who were patients of mine said they left El  Salvador and told me something like,
"they are killing children in school buses ";  they felt they had to leave.
This would have been over 10 y ago.
I am sure they were illegal but never asked. One worked for the hospital .  They were very gentle kind and polite.  I miss them......

Can Ecuador do the same?
I guess we will find out.



Crafty_Dog

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El Salvador
« Reply #257 on: January 11, 2024, 11:46:41 AM »
Back in the mid-70s when I was getting my International Relations degree from U of PA with Latin America being my region of specialization I remember this about El Salvador:

a) super high population density;

b) population growth rate of 3.5%.  Due to the wonders of compounding, this meant half the population was 15 or under- and far more people looking to enter the labor force than could be absorbed.  It seems logical to infer that MS-13 arose in part out of such things.

Crafty_Dog

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ccp

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Re: Latin America
« Reply #260 on: January 15, 2024, 07:01:09 PM »
Election interference .   They do it in Guatemala? I know they do it here.   :wink:

Crafty_Dog

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GPF: 2024 forecast for Latin America
« Reply #261 on: January 19, 2024, 07:19:05 AM »
Forecasting national behavior is built on continuums. One continuum is a nation’s history. Another is our analytic method. Simply looking at nations will not provide a systematic forecast. The method, no matter how tested in the past, cannot produce one. Only a grasp of history, filtered through a forecasting method tested consistently and repeatedly, will yield a realistic forecast. We don’t look at a nation’s every issue; we focus on the issues that reveal patterns and indicate change. Thus, our forecasts will look at the past before they look at the future.

Background

For decades, Latin American countries have oscillated between two distinct political ideologies often categorized as the right and the left. This fluctuation goes much deeper than politics; it’s woven into the region’s social and economic fabric and has been for centuries. In the colonial era, people who held wealth and administrative power in Latin American nations favored remaining close to Spain and generally resisted independence, which threatened their status. Over time, this group evolved into the political right, which generally supports free-market economics, represents wealthier classes and prioritizes relations with the U.S. and the West. The modern left, meanwhile, evolved from working-class colonists and laborers, who spearheaded the independence movement and advocated for more autonomy, rights and government support for the people. Today, the left also supports a stronger role for government and is more open to partnerships with non-Western nations.

Colonial governance systems, coupled with the region’s geographic barriers, laid the groundwork for the poverty, corruption and organized crime endemic to the region. Among the top factors that contributed to these conditions were political systems that kept wealth and power concentrated in the upper classes. The economic dependence on natural resources and exports further deepened the disparity, resulting in a pronounced rural-urban divide. Wealth became concentrated in urban areas, while rural communities grew increasingly underdeveloped and lacked access to basic services. The political seesawing also contributed to the region’s frequent economic, social and political instability. Governments were unable to reach certain corners of their countries due to geographic obstacles, creating power vacuums that were often filled by organized crime groups, which were able to meet the needs of people who felt left behind by the state.

More recently, a number of global developments have posed serious challenges for Latin American countries. The COVID-19 pandemic hit the region’s economies hard, and governments had limited resources with which to stimulate a recovery. Poverty levels rose, and criminal enterprises thrived. The wars in Ukraine and Gaza intensified the strains on the global economy by disrupting markets and limiting capital available for foreign investment, including in Latin America. The prolonged economic malaise exposed governments’ shortcomings while increasing migratory pressure, allowing organized crime to flourish and weakening people’s ability to lift themselves out of poverty.

Forecast and Conclusions

In Latin America, 2024 will be defined by the pursuit of structural economic reforms. Top among the driving forces of these reforms will be the rising demand for the region’s top commodity exports: agricultural products, metals, minerals and energy. Governments will want to cash in on this opportunity by creating an environment in which foreign investors want to spend their cash. Another motivation is improving economic conditions for the people and businesses that operate in these countries in order to address long-standing security issues.

Governments alone don’t have the financial capacity to stimulate enough economic growth to make a difference in the business or security environments, so the participation of foreign companies, consumers and investors will be key. But inspiring investor confidence and securing much-needed funds from these actors requires governments to pursue structural reforms.

They will manifest in the region’s politics, economy and society in different ways. This year, they will have a clear political dimension as governments try to pass legislation and other measures to implement changes and pursue their reform agendas. Non-traditional parties and new voices will lead the debate on the best path forward. Since the benefits of structural reforms come slowly, governments will in the short term prioritize international trade by diversifying their trade portfolios and tapping into as many markets as possible. There will be a preference, however, for advanced economies in the Americas as well as in markets in South Asia and East Asia. As governments do their best to woo investors, multilateral institutions could help bridge the gap in capital. Governments will also promote entrepreneurship and innovation to leverage the region’s technological potential.

There will also be a renewed focus on the relationship between governments and security forces, particularly the national police and military. The reforms won’t be universally supported, so we expect to see some social unrest. The ability to contain protests will be key to implementing the changes and showing investors that social stability in Latin America is possible.

No single event will indicate the accuracy of this forecast, but several developments will act as signposts throughout the year. They include the return or expansion of foreign corporate operations to the region, foreign investment inflows, the opening of new trade offices, an increase in the number of start-ups, and domestic security reforms. A decade from now, 2024 will be seen as the year that jumpstarted structural change in Latin America.

ccp

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Re: Latin America
« Reply #262 on: January 19, 2024, 07:48:09 AM »
Good article
not quite specific but leads me in the right direction to a question I ponder.

Why is it US companies are unable or unwilling to invest and utilize cheaper labor in the America rather then going to China and Asia?

Is it crime, is it the population is not educated enough, is it taxation too high, is it instability of governments or governmental obstacles to foreign investment, or other reasons such as poor roads communications lack of internet access etc.?

Just think of the benefits to us if businesses invested in C and S America and helped develop their economies, which might reduce crime and bring the benefits of cheaper labor closer to home and away from China , reduce illegal immigration etc.





Crafty_Dog

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Forward Observer: China buillding footprint in Latin America
« Reply #264 on: March 13, 2024, 08:57:22 AM »
(1) CHINA BUILDING STRATEGIC FOOTPRINT IN U.S. BACKYARD: During a House hearing yesterday, House Armed Services Committee chair Mike Rogers (R-AL) said a Chinese-built “mega port” in Peru is “just the latest effort… to displace American influence and build a strategic footprint in our backyard.”

Rogers added that 25 of the 31 countries in U.S. Southern Command’s (SOUTHCOM) area of responsibility (AOR) have welcomed Chinese infrastructure development, and 22 countries have formally joined China’s Belt and Road Initiative.

SOUTHCOM commander General Laura Richardson said she is concerned that China could use “enabling infrastructure” investments in Latin America, including deepwater ports, space, and telecommunications projects, for military purposes.

Why It Matters: China cannot project force globally but is engaging in a strategy to project influence into the Western Hemisphere. China could use port infrastructure in the SOUTHCOM AOR to disrupt shipping supply chains in the event of a conflict with the United States.

Chinese acquisitions of critical mineral sources in SOUTHCOM would also likely be used to disrupt critical mineral supply chains vital to U.S. defense production. – R.C.


ccp

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Darien Gap
« Reply #266 on: May 19, 2024, 10:49:25 AM »


Crafty_Dog

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GPF: Peru
« Reply #268 on: Today at 09:02:05 AM »


June 17, 2024
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Peru Follows the Money to China
Short-term benefits don’t necessarily lead to long-term partnerships.
By: Allison Fedirka

Peruvian President Dina Boluarte will pay a weeklong visit to China at the end of June – the first head of state to do so in nearly a decade. While there, she will meet with the CEOs of Huawei and BYD and with principals from Jizhao Mining, China Railway Construction and Cosco Shipping. Her itinerary has not gone unnoticed by the United States. Peru is a U.S. ally. Its coziness with China could call that into question.

To be clear, Peru is courting China not because it wants to but because circumstances demand it. Last year, the economy contracted 0.6 percent after growing only 2.7 percent in 2022. The central bank remains concerned about upward inflationary pressure. Social unrest hit Peru’s mining sector hard in 2022, creating multiple production suspensions and $1.3 billion in loss and infrastructure damage, according to government estimates. Unsurprisingly, mining investments fell by 18 percent in 2023 as companies grew concerned about political instability and associated security costs. This is a major problem for a country in which mining accounts for nearly two-thirds of all exports and 10 percent of government revenue. Worse, it could prevent Peru from cashing in on the rising global demand for strategic metals the country is flush with – including copper, silver, lead, zinc and molybdenum, to name a few.

Top Exports from Peru in 2022

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There are limits to what the government can do to solve the problem. Since 2016, Lima has been gripped by a political crisis that has seen seven presidents rise and fall from office. Boluarte herself has an approval rating of just 5 percent. Without the ability to enact the kind of sweeping reforms needed to fix structural economic problems, the government has instead tried to goose production from its only reliable engine of growth: extractive industries. Lima introduced several measures this year meant to manage and regulate mining exploration and operational activities with the express purpose of allaying investor concerns. It also spearheaded complementary efforts focusing on community dialogue, territorial planning and policy reform to minimize social unrest.

Peru's Goods & Services Exports

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Under these circumstances, Peru’s relationship with China is almost existential. China has been Peru’s top trade partner for the past decade. It is among the largest investors in Peru and the largest investor in mining. The two signed a free trade agreement in 2009 to sync up with China’s economic boom and explosion in demand for natural resources. From 2012 to 2022, bilateral trade doubled, reaching $33 billion. And though its economy has slumped over the past few years, China is still a formidable presence in Peru and its mining sector.

Peru's Top Trade Partners, 2023

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The relationship has advantages for China. Beijing still relies heavily on metals imports to keep its domestic industry active. With its gigantic population, it must consistently work to ensure food security, and Peru is essential in that regard. Strategically, Peru has become only more valuable as China’s usual partners in Latin America grow less reliable. Venezuela, for example, is collapsing economically, while Argentina has adopted a more pronounced pro-U.S. posture of late. For Beijing, challenging the notion that Peru is an unwavering U.S. ally is an added bonus.

Though their short-term interests align, a long-term partnership seems unlikely. Some of the obstacles are practical. With regard to labor, for example, Peru prefers to employ local populations and coordinate activity within their communities. China doesn’t. Others are more fundamental. Peru’s economic ambitions are based largely on free market ideals instilled and accepted by U.S.-educated Peruvians. The country values transparency in the private sector more than China does. Moreover, Lima eventually wants to wean itself off its dependence on natural resources and develop more value-added goods. It aspires to become a regional digital tech hub and to make electric vehicles. While there is space for complementarity, China is much more interested in buying Peruvian minerals than it is in Peru’s long-term business plans.

The U.S. sees Peru and China’s relationship as dangerous because of the security risks it poses. For several decades, Peru has been one of the few stable, neoliberal countries closely aligned with the U.S. in Latin America. Put simply, Washington wants to keep Beijing at a distance, so the budding relationship, driven though it may be by economic necessity, goes against this interest.

The biggest concern for now is the Chancay Port project, which is 70 percent completed and slated for inauguration in November. The full project requires $3.6 billion of investment, which comes largely from China and Cosco. The initial deal granted Cosco exclusivity for port operations. There are concerns that the port could be used for dumping, that it could pull trade away from other nearby ports, or worse, that it could be used for military purposes. Article 7 of China’s 2017 intelligence law requires companies to support intelligence work, and Washington is uncomfortable with such a project so close to its shores.

To be sure, Peru has not forsaken the U.S. In fact, it has expressly said its ties to China won’t come at Washington’s expense. To that end, Peru’s National Port Authority tried but failed in March to remove the exclusivity clause for Cosco to be the sole operator of Chancay on the grounds that it jeopardized the legal stability of investments and violated Peru’s competition laws. Moreover, Lima recently suggested that U.S. companies could take the lead in the smaller but comparable Corio Port project, which could serve as an American alternative to Chancay. Meanwhile, Peru continues to work with the U.S. to formalize small-scale mining and fight the associated illegal operations that cost the government as much as $4 billion per year.

Washington has no plans to walk away from Peru anytime soon; it needs minerals and metals as much as the next country. And the U.S. has proved capable of taking pragmatic approaches to countries that need to balance their own economic interests with its security interests. (For example, it refrained from penalizing India when it continued to buy sanctioned Russian oil.) The future of its relationship with Peru is in its own hands. Peru will follow the money, and for now, China is uniquely positioned to deliver. But Lima has made clear it is more than happy to work with the U.S. if its businesses can reciprocate