Latin America

The European Union and Cuba seal the agreement to normalize their relations

Latin America

The European Union ended Monday with the institutional veto it has applied for 20 years to Cuba.

EU Foreign Policy High Representative Federica Mogherini, Foreign Ministers of the Twenty-Eight and Cuban Foreign Minister Bruno Rodriguez signed a bilateral agreement that normalizes relations and sets a framework for dialogue for the first time And cooperation between the two territories.

After almost two years of negotiations, the agreement repeals the so-called “common position”, promoted in 1996 by the then Spanish Prime Minister José María Aznar, which conditioned the negotiations on democratic and human rights advances on the island.

The European Union called on the Cuban government to respect human rights and carry out economic reforms to improve living conditions on the island.

These petitions are part of the new “common position” on Cuba, approved Monday in Brussels by the European Ministers of Foreign Affairs.
In the document, the European Union reiterates that its “objectives” in relation to the island are respect for human rights and fundamental freedoms, the transition to a democratic system and the implementation of economic reforms.

Venezuela pulls 100-bolivar note from circulation

Latin America

The Venezuelans have three days from this Tuesday to exchange in the state financial institutions their 100 bolivars, the highest denomination in Venezuela, after the publication of the respective presidential decree in the official gazette.

The rule was issued within the framework of the state of emergency and economic emergency decreed by Venezuelan President Nicolás Maduro, which has been in force since the beginning of the year, as an “urgent measure to guarantee and defend economic stability”, according to gazette. The decision was made by Maduro last Sunday to deal with alleged Colombian mafias that store paper money to destabilize the country’s economy.

After an exhaustive investigation, it was determined that there are stores not only in several cities of Colombia but also in Brazil, Germany, the Czech Republic and Ukraine, where mafias are accumulating Venezuelan bills, according to the official version.

“An unscrupulous sector enemy of the Homeland has undertaken a strong attack against the Venezuelan currency applying illegal methods of hoarding and extraction of legal tender paper,” reads the official text.

It blames that same “sector” of inflation in the Caribbean country, whose figures have not yet been revealed by the Central Bank of Venezuela (BCV), but which economists predict is one of the highest in the world.

The 100 bolivars that go out of circulation can be exchanged in public banks for other denominations that remain in force, such as those of 50, 20 or 10 bolivars; While those who fail to be changed will lose their power of payment, says the presidential decree. But in the latter case, Venezuelans will have ten more days to go to the box offices arranged by the BCV to exchange their tickets. It is expected that in the coming days a new family of banknotes will progressively replace the current one and will have as its denomination the 20,000 bolivars.

Eximbank returns to Argentina after 15 years without operating in the country

Latin America

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The United States Export-Import Bank said it would begin offering financing in Argentina for the first time since the country’s economic meltdown in 2001 and 2002. In previous decades the bank provided low-rate loans to support local investment, including the construction of one of the main highways leading into this city.

“After 15 years we are open for business,” said ExIm Bank Chairman Fred Hochberg this week in Buenos Aires where he participated in the Business and Investment Forum, organized by the president Mauricio Macri administration.

“We’re willing to finance all possible export import projects, and at the lowest possible rates to support Argentina in its new process”, Hochberg was quoted during a panel at the forum he shared with Commerce Secretary Miguel Braun.

The announcement was confirmed by a release from the Argentine government saying that the Exim bank decision involves both the private and public sectors and responds to an assessment by the US government on different countries’ situation.

These assessments reflect improvements in the financial and economic conditions of Argentina, and thus better prospects for honoring debts and credits.

“I am pleased to announce that beginning 21 September the ExIm bank will resume operations in Argentina and this is an auspicious moment for US and Argentina entrepreneurs to work jointly”, said Hochberg. He added that the bank was prepared to provide the needed financing for those associations.

ExIm bank will provide seven-year financing and is willing to assess the possibility of further more complex financing, and at time terms which eliminate or externalize risks for the country, according to Argentina’s Finance ministry.

 

ECLAC forecasts that Argentina’s economy will close 2016 with a fall of 1.5%

Latin America

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The agency estimates that the contraction in activity will result from the combined effect of “rates, inflation and lower consumption”

The national economy will close the year with a contraction of 1.5%, estimated Tuesday the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) , which attributed the decline to theimpact of government policies on “rates and inflation , ” it which in turn affects a “lower real wages and consumption.”

“The first months of this year have been marked by the rise in prices of public services, due to the elimination of subsidies, for the acceleration of inflation , due to the release of the exchange rate, and there is also a fall real wages , with negative impact on consumption and activity , “he toldDyN the body ‘s executive secretary, Alicia Barcena .

Overall, Latin America and the Caribbean show a contraction in the growth rate of -0.8 percent.

“We are doing ( for Argentina) a projection of -1.5% , which represents a downward revision compared to -0.8 in April. This patch is made depending on the context of economic policy which is seeking to correct some imbalances exhibiting the economy , “said the head of ECLAC.

For South America a contraction of 2.1% is expected in 2016 , “mainly affected by a deterioration in their terms of trade, lower external demand and a significant slowdown in domestic demand, reflecting a significant drop in domestic investment “.

Growth will be led by Dominican Republic (6.0%), Panama (5.9%), and Nicaragua and Bolivia (4.5%).

Susana Malcorra, from Argentina, Becomes Candidate for U.N. Secretary General

Latin America

Who possibly becomes the first woman to head the UN, Foreign Minister Susana Malcorra Argentina, pronounced with respect to the major issues affecting the Mercosur. From research to expresident Argentina Cristina Fernandez, the removal of Dilma Rousseff in Brazil and the political crisis in Venezuela.

Susana Malcorra, currently serving as Argentina’s foreign minister, is understood to have received top-level backing from both the White House and Susan Rice, national security adviser to Barack Obama.

The prospect of an Argentine leading the UN presents Britain with a diplomatic dilemma given the long-running dispute over the Falklands which both Argentina and the UN say must be “decolonised” and returned to Argentina.

President Barack Obama is said to have been won over by arguments in Ms Malcorra’s favour from his Argentine counterpart Mauricio Macri on a visit to Buenos Aires in March that was widely seen as an attempt to re-set US-Argentinian relations.

Britain has been one of the most vociferous of all countries in calling for a woman to head up the UN, for the first time in its 70 year history, but an Argentinian candidacy threatens to expose long-standing disagreements with the US over the Falklands.

The United Nations has since 1964 consistently backed Argentina over the Falklands issue, with its Special Committee on Decolonization once again issuing a resolution last year demanding the UK enter negotiations over the Islands’ sovereignty, a position rejected by Britain.

“The role of UN Secretary General as a very important one, and as a country we believe that the holder of the role will need to understand and apply the Charter of the United Nations,” Michael Poole, the chair of the Legislative Assembly on Port Stanley, told the Telegraph via email

 

PPK leads Keiko Fujimori 50.4 to 49.6 percent, according to exit poll

Latin America

LIMA, Peru—Peru’s tightly-contested election Sunday pits an ex-president’s daughter against a former Wall Street economist, but whoever wins, the country’s embrace of the free market will likely remain strong.

Both Keiko Fujimori, the 41-year-old daughter of jailed former leader Alberto Fujimori, and Pedro Pablo Kuczynski, a 77-year-old former finance minister and World Bank economist who speaks perfect English, have vowed to retain investment-friendly policies in a country that has become a free-market stalwart in Latin America in the past 15 years.

During the past decade, Peru’s economy has posted some of the highest growth rates in the hemisphere, averaging about 6% a year with inflation at an average of just 2.9% a year, according to the World Bank. That has helped reduce poverty in the country to 22% last year from almost 56% in 2005, the bank says.

Leaked Documents Reveals Venezuela’s Shortages Are Quite Worse Than Previously Expected

Latin America

A new Venezuelan government document, dated Aug. 14, 2015, was leaked to local media sources and published on Sept. 16, according to a report from the PanAm Post. The document reveals that the current shortage rate for most items is at 70%; it also stated that Venezuelans now have absolutely no access to 15 specific food items, 18 personal care items, and eight cleaning products due to the shortages.

The findings were part of a larger study conducted by Venezuela’s Office of the Vice President, and the leaked document indicates that it’s the 19th study conducted by the government to measure its shortages. This is the first time, however, that the media has ever accessed an official government document regarding the country’s shortages; the last time President Maduro’s office released information on Venezuela’s shortages was back in February 2014.

Of the food items measured, the easiest product to find was pasteurized fruit juice (which has a shortage rate of 43%) while the most scarce products are fruit compotes (with a shortage rate of 92%).

As for personal care items and cleaning products, 96% of the stores surveyed did not have baby diapers in stock and 42% lacked toothpaste. Laundry detergent is only missing 67% of the time from store shelves — and it’s actually one of the easier cleaning products to find — while dishwasher soap is only available in 88% of Venezuelan stores.

According to the latest reports (dated July 2015), the average Venezuelan family would have to bring in 8.8 minimum-wage salaries in order to cover the cost of essential items. But with the country’s overall shortage rate at 36.2% this past August, many families can’t even find the items to begin with.

Sharp Devaluation of Argentine Peso

Latin America

Argentina scrapped most of its currency controls and will allow the peso to start trading freely Thursday.

Finance Minister Alfonso Prat-Gay indicated he anticipates the peso could plunge by about 30 percent –which is the gap between the official exchange rate and a parallel rate known as the blue-chip swap– when markets open on Thursday in Buenos Aires.

The move follows promises by President Mauricio Macri to implement reforms in order to increase exports and spur economic growth.

By lifting controls, Macri also hopes to spark a wave of investment in an economy that is battling low foreign reserves and double-digit inflation.

Farmers in Argentina, a grains-exporting powerhouse, have been waiting for the peso to weaken before selling stockpiles of soybeans. Manufacturers have argued for controls to be lifted so they can import crucial parts for production.

Mauricio Macri won the historic ballotage

Latin America

Mauricio Macri won the historic ballotage and is the first head of state from 1916 which belongs neither to the Peronist nor to the Radical Party.

Mr Macri is expected to reverse the national policies of Ms Fernández and her husband Néstor Kirchner (who preceded her as president and died in 2010).

The new president will also improve relations with foreign creditors and with the United States.

After receiving a ceremonial scepter and sash at the Casa Rosada, the country’s presidential palace, Mr. Macri joined his wife, Juliana Awada, 41, in waving to supporters from a balcony. Reprising a frequent feature of his campaign, Mr. Macri danced a solo performance before meeting with foreign dignitaries.

Mr. Macri has vowed to cut inflation to a single digit within two years, though advisers are trying to find way to do so without weakening the economy.

Mauricio Macri, the new President of Argentina

Latin America

Argentina shifts to the right after Mauricio Macri wins presidential runoff

MAURICIO MACRI won Argentina’s second-round runoff election on November 22nd to become the country’s next president. The mayor of the city of Buenos Aires, who ran under the banner of Cambiemos (“Let’s Change”)—a coalition of mostly centrist non-Peronist parties—took 51.4% of the vote. He narrowly defeated Daniel Scioli, the governor of Buenos Aires province, who campaigned as the heir of the outgoing Peronist president, Cristina Fernández de Kirchner.