October 10, 2013

Venezuela inflation just shy of hitting 50% for year

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Annual inflation in Venezuela hit 49.4 percent in September, up from 18 percent a year ago, and basic goods became harder to find, the Central Bank reported Thursday.

The soaring consumer price index gives Venezuela the highest inflation in the hemisphere and one of the highest in the world.

In September alone, inflation spiked 4.4 percent, driven by agricultural goods, transportation, education expenses and a 19.3 percent hike in electricity prices, the government said.

The new figures are ammunition for an opposition that is trying to turn December’s municipal election into a referendum on the six-month administration of President Nicolás Maduro. Inflation is a pocketbook issue as it saps consumers’ purchasing power.

The Central Bank also reported that the “scarcity index,” which measures the availability of basic goods, hit 21.2 percent in September versus 13.6 percent a year ago. The bank said that excluding auto parts, corn oil and sunflower oil, the scarcity index would be at 15.3 percent.

Maduro has blamed rising prices and chronic shortages on hoarding, speculation and an “economic war” waged by his rivals. The government raised minimum wage 20 percent in May and 10 percent in September. Wages are going up an additional 10 percent next month. Earlier this week, Maduro asked parliament for the right to rule by decree for 12 months to the fight the economic battle and squash corruption. The National Assembly is expected to vote on the measure in coming weeks.

Henrique Capriles, the opposition governor of Miranda State, is asking his colleagues at the National Assembly to keep Maduro from seizing more power.

“Decree powers are not going to help bring down inflation, or raise salaries, or guarantee that hospitals are stocked,” he said Thursday. “It’s just a smokescreen to keep us dizzy.”

April 29, 2013

European economic crisis being felt in remittances to South America

For another look at how the European economic crisis is hitting South America, check out today's IDB report on remittances. The study found that while remittances were up slightly (0.6 percent) in Latin America and the Caribbean during 2012, inflows were down 1.1 percent in South America. 

Look at the full report here, or my colleague Mimi Whitefiled's story here, but, in short, the study shows that regions that rely on the U.S. for remittances were faring better than those that rely on Spain and Europe. 

In Central America, for example, remittances were up in every country. In South America, they were down in eight out of 12 nations.

The top receivers in SouthAm were Colombia ($4.1 billion), Peru ($2.8 billion), and Ecuador ($2.5 billion.)

Click here to see the full list and play around with an interactive map.

November 05, 2012

Colombia's FARC find new line of work: refining crude

Colombia’s FARC guerrillas have always had a yen for business. Along with extortion, kidnapping and drug running, they’ve made inroads into mining and logging, according to authorities.

Now there appears to be a new line of work.  

Last week, the army said it broke up a FARC-run oil refinery in Nariño. The clandestine operation was being used by the Daniel Aldana faction of the guerrillas to refine crude stolen from the Trans-Andean Oil Pipeline, which is also a frequent target of guerrilla attacks.

 According to the statement, the army recovered 600 gallons of gasoline.

It’s worth remembering that the FARC and the government will be gathering in Havana Nov. 15 to begin peace talks in earnest. Among the issues that will have to be dealt with: demands that the FARC give up the drug trade.

 Leaded or regular?

 Here’s the full release:

 Localizan refinería ilegal de las Farc

Bogotá, dos de noviembre de 2012. En el marco de las operaciones realizadas por soldados del Ejército en contra de las organizaciones ilícitas de minería ilegal, en las últimas horas se logró neutralizar una refinería clandestina en el departamento de Nariño.

La acción militar fue desarrollada por los hombres de la Brigada Móvil No. 32, quienes lograron ubicar y destruir una refinería ilegal utilizada por terroristas de la cuadrilla ‘Daniel Aldana’ de las Farc, para el hurto y procesamiento de crudo del oleoducto Transandino.

Los hechos se registraron en el municipio de Tumaco, en  el Kilómetro 80, lugar donde los efectivos localizaron una refinería artesanal, más de 600 galones de petróleo y una piscina.

El material incautado fue puesto a disposición de las autoridades competentes.

June 07, 2011

Peru's stock market jitters in perspective

IMG_4217

On election day, former army officer Ollanta Humala invited the media to watch him eat breakfast. Local TV tried to browbeat him into downing some of the cuy, or guinea-pig, that sits in the bottom-right corner of the picture. He refused. 

Just hours after he narrowly won Sunday's race, analysts and investors were again trying to browbeat him - this time into naming his economic cabinet.

The pressure only increased on Monday, when the local market was open just one minute and twenty-five seconds before plummeting stocks triggered an automatic halt to trading. By the end of the day, the market had plunged almost 13 percent - the largest single-day drop in Peru's history. 

Like many news organizations, I got caught up in the dip because it seemed to capture the mood of investors - particularly those in the mining sector. But a question from a former colleague had me wondering if Peru's market is a good indicator of anything. 

Peru's stock market has a capitalization of $122 million - or about 7 percent of the nation's GDP. By comparison, the capitalization of the New York Stock Exchange is at about 114 percent of U.S. GDP. In Mexico, the stock market is 38 percent of GDP.

In short, Peru's stock market is tiny. Still, it's a barometer for how investors feel and the first signal of what might happen to foreign direct investment in this commodity-rich country.

On Tuesday, Peru's main index was up 7 percent.

Does it matter? I'm still not sure. 

But, so far, Humala's keeping his mouth shut.

March 20, 2011

Chile says yes to Duff Beer but no to Springfield

IMG_3681 On the eve of Obama's visit to Chile, several thousand people took to the streets Sunday to protest a nuclear cooperation agreement that both nations signed.

The treaty is limited to capacity building and information exchange, but many here worry that it's a step towards building nuclear reactors in this earthquake-prone country.

Among the banners in the protest was this one reading "Chile is not Springfield." It's a reference to the fictional hometown of Homer Simpson, who works at a nuclear power plant.

Funny thing is, Duff Beer - Springfield's once fictional brew - went on sale here last week.

The Duff Chile site provides very little information about the product, but it does have a continous loop of "Oh Yeah" by Yello.

February 11, 2011

Colombia gets the Jim Cramer treatment

Mr. Mad Money himself dedicated a segment of his show to the “magical land of opportunity” and the “next Brazil” – Colombia.

Tossing bags of coffee in the air and slapping his “moo” button (is that the sound of a bull market?), Jim Cramer said Colombia’s vast oil wealth, booming agriculture sector and stable politics make it an investor’s paradise.

“This is where Brazil was eight to ten years ago,” he said.

The country is on track to see GDP growth upward of five percent over the next two years - outpacing the regional average – and there has been much market chatter that Colombian bonds might be declared investment grade.

If you're looking for a bit of a Cramer antidote, check out this Dow Jones story by Dan Molinski suggesting the heaviest rainfalls in three decades might also have soaked the economy.

February 08, 2011

Colombia's goldrush comes with a steep price tag

 

IMG_3165Just got back from an interesting trip to Colombia's gold-mining region. The government here is concerned that the FARC, ELN and criminal bands might be trying to horn in on the gold boom to finance their activities. You can read that story here.

What I didn't get into is the environmental concerns that many have about the industry.

We watched miners handle mercury with their bare hands, empty chemical-laced water into open drains, and reuse empty vats of cyanide.

One of the rivers in the area has been used for dumping cyanide-sodden dirt for so long that everyone calls it La Cianurada. I was asking old timers if they knew its proper name, but nobody could recall what it might be.

The gentleman in this picture was trying to convince us that the water in the region is some of the cleanest in the country and is fit to be bottled. 

That could very well be true, but I just couldn't get past the drum that was being used as the basin.

Closeup

 

January 10, 2011

Latin American Optimism: Chile reigns but even Mexico trumps U.S.

Would you rather do business in Maine or Mexico?

For anybody who equates grisly headlines and a rising body count with bad business, check out this global survey by Grant Thorton's. It found that confidence levels among business leaders in Latin America are higher than anywhere else in the world. Chile topped the global list, with 78 percent of those surveyed saying they are optimistic about 2011.

Perhaps more surprising is that violence-rattled Mexico also fared quite well at 71 percent.

The U.S., by comparison, registered a gloomy 40 percent. 

Here's the release. For the full report click on the link below.

***

CHICAGO, Jan. 10, 2011 — Confidence levels are higher in Latin America than in any other part of the world, with the region leading the way in business optimism into the new year, according to a global survey of 5,700 senior executives by Grant Thornton International Ltd.

Across Latin America, 78% of business executives are optimistic about their region’s economic performance in 2011. Elsewhere, optimism in Europe is at 50%, while in North America it is just 44%, with the Asia Pacific region the least optimistic region at 40%.

Within Latin America, Chile (95%) scored the highest optimism of any country surveyed, followed by Brazil (80%), Argentina (75%) and Mexico (71%). In the U.S., optimism is at 40%.

 Other critical business findings:

 Inflation – highest rates will be in Argentina, India, Turkey and mainland China; lowest rates will be in Japan, Ireland, Greece and Sweden.

Plant and machinery investment – will be greatest in Brazil, Philippines, Armenia and Chile; will be lowest in Greece, Netherlands, Ireland and Japan.

Employment – highest rates will be in the U.S., India, Turkey and Chile; lowest rates will be in Greece, Ireland, Spain and Poland.

Business optimism in China waning – Levels of business optimism in mainland China have taken a dramatic fall over the past 12 months. Only 53% of businesses are now optimistic about the outlook for the coming year, compared with 68% last year. This represents one of the largest negative swings in Grant Thornton’s 2011 International Business Report (IBR).

 The survey of 5,700 business executives was conducted in November and December of 2010.

SEE THE FULL REPORT HERE

ABOUT THIS BLOG

jim wyss

Inside South America is written by Jim Wyss, the South America bureau chief for the Miami Herald and McClatchy Newspapers.

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