August 2018 – Riskma Solutions

Ecuador announces Alba exit and criticizes Venezuelan crisis

Ecuador announced on Thursday its exit from the Bolivarian Alliance for the Peoples of Our America (ALBA) in response to the humanitarian crisis in Venezuela, a country from which progressively has been distancing since Lenin Moreno came to the Presidency.

“Ecuador will not continue its participation in the ALBA,” Foreign Minister Jose Valencia announced today in an appearance in which he explained that his country wants to “reinforce” the search for a solution to the political problem in that country and to the massive exodus of Venezuelans.

The decision was announced at a meeting of several Ecuadorian ministers with media at the Carondelet Palace, headquarters of the Presidency, which addressed the problem of the massive flow of Venezuelans who have arrived in the country since the beginning of the year.

Valencia stressed that it is a problem that can not be “addressed by a country individually”, but requires “a response from all the nations of the region,” and that Ecuador’s exit from ALBA is precisely what it is about. boost that solution.

“The departure of Venezuelan citizens from their country is the result of Venezuela’s economic and political crisis. The repercussions are regional, however, Ecuador will always be in solidarity, “warned the head of Ecuadorian diplomacy.

But he described as “inhumane” the action of the Venezuelan Government for allowing millions of people to leave the country as a result of a political, economic and social crisis, and exposed the notorious frustration of their country “for the lack of political will, first place, of the Government of Venezuela to open the doors to a democratic solution “.

A criticism of Venezuela that has been rising in recent months, particularly since Minister of Foreign Affairs María Fernanda Espinosa left the Foreign Ministry in June, from the most left wing of the Executive.

Under the new chancellor, Moreno’s government seems to take new directions in foreign policy, far from those of its predecessor, Rafael Correa.

Even so, Valencia explained that Ecuador maintains “a principled position” and that it does not align with those of “no particular group in the proposal that the problem of Venezuelans be solved among them, in the democratic framework.”

He also assured that the departure of Ecuador from the ALBA does not mean the intention to join any other regional integration organization.

ALBA was created in 2004 as a mechanism for the cooperation of the countries of Latin America and the Caribbean based on solidarity and complementarity of national economies, in an alternative to the Free Trade Area for the Americas (FTAA) promoted in its moment for the United States.

The minister indicated in that sense that with the decision to leave the bloc, what is being sought is to “ratify the independence” of his country in “its general action in regional politics, an action marked in principles”.

According to data released by the United Nations High Commissioner for Refugees (UNHCR) and the International Organization for Migration (IOM), 2.3 million Venezuelans are living outside their country, of which more than 1.6 million they have abandoned it since 2015.

“90% has gone to South American countries,” according to a press release.

The head of Ecuadorian diplomacy said that it is the “greatest exodus of people in the recent history of Latin America” and recalled the initiative of his country to convene a regional technical meeting on September 17 and 18 in Quito.

This is within the belief, according to the minister, that “only a democratic stability (in Venezuela) will produce economic stability that prevents the continuation of the exodus of its citizens.”

And he clarified, explaining the position of his country, that Ecuador must give a humanitarian and full response to a situation that is “emerging and unprecedented.”

As for the measure of requesting a passport to Venezuelan citizens since August 18, he said that after a meeting with the Venezuelan deputy foreign minister for Latin America and the Caribbean, Alexander Yánez, they considered it necessary to provide travel documents.

Valencia stressed that the action of requesting the passport was communicated in advance to UNHCR and the UN, in order to verify the identity of the persons.

In the same appearance, the Minister of the Interior, Mauro Toscanini, explained that “immigration control has been strengthened” in the steps of “Rumichaca, Huaquillas and Mascarilla”.

“There are 200 more policemen in Rumichaca and police support for buses that move with migrants and seven police points along the humanitarian corridor,” he said.

Why Amazon has not expanded in the large economies of Latin America as in other regions of the world

Economics | Latin America | Politics

If it is so huge in other regions of the world, why has it not expanded in the same way in the largest markets in Latin America?

The largest e-commerce company in the world is showing signs of plans to expand in the region.

With an emerging middle class with more purchasing power to satisfy their consumption needs, the Latin American market seems to be in Amazon’s sights.

But it is not easy.

One of the difficulties that the giant of Jeff Bezos has had to face is the presence of major competitors, such as the Argentine firm Mercado Libre, which has established itself as the leader in online sales in Latin America.

There are also other rivals such as B2W or Falabella that have a long experience in the sector and that have the logistical networks that allow the storage and distribution of the products sold on the web.

These and other great rivals “have learned to face challenges such as poor infrastructure that makes the delivery of products difficult, or the low percentage of bank accounts and credit cards,” tells BBC Mundo Fabiola Moura, Bloomberg analyst at Sao Paulo.

There is also the case of companies that traditionally made offline sales, such as Magazine Luiza in Brazil, which took a turn and made large technological investments, earning a significant portion of the electronic sales market.

The protectionist barriers
Big companies like Amazon or Alibaba have their eyes on Latin America, because there is a large growth space for electronic commerce, analysts say.

But breaking the barriers of entry is not easy.

“Amazon has had to deal with a lot of protectionism in markets like Brazil,” says Sucharita Kodali, principal analyst and e-commerce expert at consultancy Forrester, in conversation with BBC Mundo.

That would explain why the giant focused so much time on selling products as its Kindle e-reader with no hurry to expand into the other categories, as it has done elsewhere.

“The challenge for Amazon is that those markets are still mainly led by retail stores,” he adds.

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And on the other hand, the idea that consumers can buy online all the products of all markets, is not that simple either.

“There are import restrictions and price differences,” explains Kodali.

Consulted by BBC World, Amazon said it did not have a spokesperson for Latin America or anyone with sufficient knowledge to deal with the matter.

The challenge of Brazil
With a population of more than 200 million, Brazil is a key market in its expansion strategy.

He came to the country in 2012 without causing much noise with the sale of electronic books and then with streaming movies. But six years after entering the largest economy in Latin America, Amazon has begun to diversify its offer.

Mercado Libre, the Argentine company that you have possibly used and that has just sneaked into the 100 largest companies of the Nasdaq

Economics | Latin America | Politics

If you live in Latin America and have ever wanted to sell or buy something online, you have probably used Mercado Libre.

The electronic commerce portal was created in 1999 by the Argentine Marcos Galperíny and his then partner Hernán Kazah.

It was a time in which doing business online still generated distrust and those who dared to try it took a thousand and one precautions when making the exchange.

But EBay did not operate then in Latin America.

So local alternatives such as Mercado Libre, which allow businesses and individuals to market items in exchange for a commission, had free land.

Many did not survive the dot-com crisis or they did not get the volume of users needed to achieve profitability.

Mercado Libre, on the other hand, has become the most valued company in Argentina with a market value of US $ 12,400 million.

A figure even higher than the US $ 10,000 of the YPF oil company, considered the largest company in the country.

This week, the portal marked a new milestone by entering the Nasdaq 100, the US stock index that brings together the most important companies in the industry sector, whether local or international.

An ally of EBay
Galperín, director of Mercado Libre, was an employee of YPF when he decided to go to the United States to take a master’s degree in business administration at the business school of Stanford University.

Immersed in the technological culture that surrounds this institution due to its proximity to Silicon Valley, he began working on the creation of Mercado Libre with Kazah before finishing his studies.

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After obtaining the funds, they founded the company in Argentina.

It spread so rapidly to other countries in Latin America that EBay opted to join it instead of competing, buying shares in 2001, only two years after its birth.