LAA130723V7:Latin America Advisor.Qxd

www.thedialogue.org Tuesday, July 23, 2013

FEATURED Q&A BOARD OF ADVISORS Will the Snowden Case Lead to Big Changes in Privacy Laws? Diego Arria James R. Jones Director, Co-chair, At their summit on July 12, tions on service providers turning over Columbus Group Manatt Jones Mercosur leaders issued a dec- data about customers in response to a gov- Global Strategies LLC laration condemning allegations, ernment request or notifying their cus- Genaro Arriagada brought to light by fugitive NSA tomers if they do so. As awareness of this Nonresident Senior Craig A. Kelly Q leaker Edward Snowden, that the United situation grows, there will likely be Fellow, Director, Americas Inter-American International Gov't States has monitored their citizens' elec- attempts to harmonize data privacy laws. Dialogue Relations, tronic communications. The leaders also Such actions should be resisted. Countries Joyce Chang Exxon Mobil called for the adoption of global standards have different priorities and should pursue governing information and communica- different privacy laws based on their Global Head of John Maisto Emerging Markets Director, tions technologies that protect citizens' unique needs. Privacy rules modeled off of Research, JPMorgan U.S. Education Finance privacy and the sovereignty of states, and the European approach put privacy ahead Chase & Co. Group they affirmed their support for free soft- of innovation, and the problems with these W. Bowman Cutter Nicolás Mariscal ware principles. Are clear multilateral laws have not diminished because of the Former Partner, Chairman, standards of behavior for respecting priva- E.M. Warburg Continued on page 2 Grupo Marhnos cy likely to materialize in the fallout from Pincus the Snowden revelations? What is the cur- Thomas F. Dirk Donath McLarty III rent state of communications privacy laws Senior Partner, President, and what sorts of policy changes would Aimara Capital LLC McLarty Associates bring them up to date to address modern Jane Eddy Carlos Paz-Soldan technological developments? How are Managing Director, Partner, these events affecting businesses in the Corporate & Govt. DTB Associates, LLP region that run communications networks Ratings Group, Standard & Poor's Beatrice Rangel and services? Director, Marlene Fernández AMLA Consulting LLC Daniel Castro, senior analyst at Corporate Vice the Information Technology & President for José Antonio Ríos Francis Arrives in Rio Government Relations, Chief Executive Officer, Innovation Foundation in Arcos Dorados Vadium Technology Inc. A Washington: "The recent NSA on First Foreign Trip as Pope revelations will hurt the trust that users Peter Hakim Gustavo Roosen President Emeritus, have for data stored in the cloud. While the Pope Francis arrived Monday in Brazil, Chairman of the Board, United States now has a sullied reputation which is home to more Catholics than Inter-American Envases Venezolanos Dialogue as a secure provider of cloud computing, any other country, on his first foreign trip Andrés Rozental Donna Hrinak the reality is that most developed countries as pontiff. An Argentine, Francis is the President, have mutual legal assistance treaties which first-ever pope from the Americas. See President, Rozental & Asociados Boeing Brazil and Senior Fellow, give their governments the ability to access story on page 2. data stored in other jurisdictions upon Jon Huenemann Brookings Institution Photo: Getty Images. request. In addition, there are few restric- Vice President, Everett Santos U.S. & Int'l Affairs, President, Philip Morris Int'l DALEC LLC Inside This Issue

Shelly Shetty FEATURED Q&A: Will the Snowden Case Presidents of Colombia, Head, Latin America Lead to Big Changes in Privacy Laws? ...... 1 Venezuela Meet in Effort to Mend Ties ...... 3 Sovereign Ratings, Fitch Inc.-Start Content- Francis Arrives in Brazil Brazil's Government Cuts on First Foreign Trip as Pope...... 2 Spending Amid Slower Growth...... 3 U.S. Hopes to Restart Bilateral In Profile: Liliana Ayalde, Talks With Ecuador: Namm ...... 2 U.S. Ambassador-Designate to Brazil ...... 3

NEWS BRIEFS Political News people, it is necessary to enter through the door of its immense heart," Francis said in U.S. Hopes to Restart Bilateral Portuguese Monday. "Allow me at this Talks With Ecuador: Namm Francis Arrives in Brazil point to knock softly on that door." The The U.S. government hopes to on First Foreign Trip as Pope papal visit coincides with the World Youth restart bilateral talks with Ecuador Day event, which begins today and lasts before the end of the year, U.S. Pope Francis arrived Monday in Brazil to through Sunday. This week, the pope will begin his first trip abroad as leader of the celebrate three public Masses and also Ambassador to Ecuador Adam E. world's Roman Catholics. The first-ever Namm said on a local radio station pope from the Americas, the 76-year-old this week, according to Dow Jones. Argentine pontiff was greeted at the air- The nations have had a strained port in Rio de Janeiro by President Dilma I learned that to have access relationship since early 2011 when a “ Rousseff and then rode in an open Fiat to the Brazilian people, it is WikiLeaks cable led to the mutual hatchback to the city's cathedral, expulsion of ambassadors, and they Bloomberg News reported. Huge crowds necessary to enter through the have clashed in recent weeks over lined the streets along the route, scream- door of its immense heart. the case of NSA leaker Edward ing and waving at Francis. "It's so exciting ” Snowden. The United States is to see the pope in our country," Antonio — Pope Francis Ecuador's top trade partner. Dantas, 24, a seminary student from northeastern Brazil, told the news service Peru's Central Bank Loosening as he balanced on a fire hydrant in order to Reserve Requirements catch a glimpse of the pontiff. "I hope he tour a slum and meet with young prison- brings a message of peace to all of us who ers. An additional 7,000 civil and military Peru's central bank announced make up the Catholic religion, but also police are on duty to provide security for Monday that it is relaxing reserve people of other religions." Among the Francis' visit, according to the security requirements for banks in order to messages of Pope Francis' visit are ones of secretariat of Rio de Janeiro state. Military encourage the use of the sol curren- humility and justice for the most margin- police told the O Globo newspaper that cy as economic growth in the alized people in Brazil, where crowds filled they found a small homemade bomb near Andean nation slows, Reuters the streets in massive protests over the past a shrine the pope is scheduled to visit. reported. The changes lower the month over issues including high taxes, Police officers also deployed tear gas average and marginal reserve rates poor public services and corruption. "I against protesters Monday outside the on accounts denominated in dollars learned that to have access to the Brazilian Guanabara palace, where the pontiff was and soles and take effect Aug. 1. The Featured Q&A central bank increased reserve Continued from page 1 requirements numerous times during the last year as the government NSA's surveillance. But while universal James Andrew Lewis, senior tried to reduce capital inflows that privacy rules should be avoided, univer- fellow and director of the were raising the sol. This year, the sal transparency rules are very much Technology and Public Policy currency has fallen 9 percent against needed. Companies should be required Program at the Center for the dollar. A to disclose on a regular basis details Strategic and International Studies: about the types and quantities of govern- "The Mercosur statement has two prob- Shareholders of Chile's CFR ment requests for user information they lems. First, it's a bit hypocritical since Approve Capital Increase receive. While businesses must follow the most countries engage in as much Shareholders of Chile-based phar- law of the land where they do business, domestic surveillance as their budgets maceutical company CFR on they should not be required to keep allow. What the United States does for Monday approved a capital increase silent about it. Transparency is the only foreign intelligence is no different than of approximately $750 million in way to hold governments accountable any other great power. Second, like many order to help pay for CFR's planned for their actions and ensure that users observers, Mercosur doesn't distinguish purchase of South Africa-based can trust third parties with their data. between 'monitor' and 'read.' The United Just as the economy cannot flourish States may monitor traffic but only reads Adcock Ingram Holdings, Reuters without trust in the offline world, nei- messages about terrorism, proliferation reported. The Chilean company bid ther can the digital economy flourish or transnational crime. It's like buying a $1.3 billion earlier this month to without it on the Internet." library but reading only the one book acquire all of the company's shares. Continued on page 4

Copyright © 2013, Inter-American Dialogue Page 2 of 4 Inter-American Dialogue’s Latin America Advisor Tuesday, July 23, 2013 meeting with Rousseff. Protesters threw Molotov cocktails amid demands for the In Profile resignation of Rio state's governor, Sergio Cabral, according to O Globo's television Liliana Ayalde, U.S. Ambassador-Designate to Brazil channel. Name Presidents of Colombia, Venezuela Liliana Ayalde Meet in Effort to Mend Ties In the News Colombian President Juan Manuel Santos The United States' ambassador-designate to Brazil is Liliana and his Venezuelan counterpart, Nicolás Ayalde, an expert in international aid and development. Ayalde Maduro, met Monday in an effort to presented her credentials to the Brazilian government in early mend the strained relations between the June and received its approval. She is awaiting confirmation by two Andean countries, BBC News report- the U.S. Senate, but once approved will replace Thomas Shannon, ed. During the meeting in a Venezuelan Ayalde who has been in Brasília since 2009. border town, the presidents agreed to File Photo: U.S. State Background establish high-level groups to talk about Department. security, trade and energy. Ties between Ayalde, 57, is a career diplomat with more than 30 years of expe- Colombia and Venezuela have been par- rience in foreign service. She currently serves as the deputy assistant secretary of state ticularly strained since Santos met two for Western Hemisphere affairs, where she is responsible for the Offices of Caribbean months ago in Bogotá with Venezuelan Affairs, Central American Affairs and Cuban Affairs, a position she has held since last opposition leader Henrique Capriles. July. Maduro defeated Capriles in April in a close presidential election that was called Ayalde began her career working for USAID, where her first overseas post took her to after the March 5 death of Hugo Chávez. Bangladesh. In 1985, she began her career in Latin America, managing USAID programs in Guatemala and Nicaragua. She returned to Washington in 1993 to work for the Office of Central American Affairs in the Bureau for Latin America and the Economic News Caribbean, becoming director in 1995. Ayalde returned to USAID in 1997 and served as deputy mission director in Nicaragua and mission director in Bolivia and Colombia. Brazil's Government Cuts During her time in Colombia, Ayalde managed over $200 million of development Spending Amid Slower Growth assistance provided to the country under "Plan Colombia." In 2008, former President George W. Bush nominated Ayalde as the U.S. ambassador Brazil's government is trimming its to Paraguay. She served in that capacity from June 2008 through 2011, during the polit- spending in an effort to meet its fiscal tar- ically contentious years of former President Fernando Lugo's term. The current U.S. gets as growth slows in Latin America's ambassador to Brazil, Thomas Shannon, strongly supported Ayalde's nomination to largest economy, Bloomberg News this new post, mainly due to her history of service and knowledge of languages. reported Monday. The announcement marked the second time in two months Baltimore-born Ayalde is the daughter of a Colombian doctor, speaks fluent Spanish that the government of President Dilma and Portuguese and has a working knowledge of French. Ayalde holds a B.A. in inter- Rousseff has cut spending. The govern- national studies from American University and a master's in international public ment will reduce its expenditures by 10 health from Tulane University's School of Public Health and Tropical Medicine. She is billion reais ($4.5 billion) and is lowering married and has two daughters. its forecast for economic growth this year Of Note to 3 percent from 3.5 percent, said Finance Minister Guido Mantega. Ayalde will begin her term at time when the United States and Brazil seem to be on track to building a stronger bilateral relationship. The announcement of her nomina- Correction tion came on the heels of U.S. Vice President Joe Biden's visit to Brazil and a few months before President Dilma Rousseff is scheduled to make a state visit to the A news brief in Monday's Advisor incor- United States in late October. It will be the first state visit to the United States by a rectly stated that Chilean Labor Minister Brazilian president since 1995. The countries have joint programs in the areas of Evelyn Matthei was nominated as the defense, security, health, energy and educational exchange. The Brazilian Air Force is presidential candidate of the country's also considering a multi-billion dollar purchase of new fighter jets with U.S.-based conservative coalition. In fact, she was Boeing as one of three finalists, a deal the U.S. government has been advocating. nominated as the presidential candidate of her party, the Independent Sources: State Department, Folha de São Paulo, All Government, EFE, Reuters, Agência Democratic Union (UDI). Pública

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Featured Q&A public sector privacy more than personal Continued from page 2 privacy. There are already multilateral Latin America Advisor that interests you. There are 154 billion e- standards for privacy rights in areas like is published every business day by the Inter-American Dialogue, Copyright © 2013 mail messages sent a day—there aren't financial records in the context of fight- enough analysts at any agency in any ing money laundering and the financing Erik Brand General Manager, Publishing country to read them all, even in China, of terrorism. Like cyber-security overall, [email protected] so the focus is on national security prior- private electronic information protection Gene Kuleta ities. International law does not address with multilateral standards and proce- Editor espionage. This has been true since dures must be a cooperative project [email protected] medieval times. One reason for this is between multiple parties: governments, practicality. Since few countries admit to international bodies, the private sector Megan Cook Reporter, Assistant Editor engaging in espionage, they are unlikely and the owners of information (citizens, [email protected] companies and public agencies). Thus, significant challenges lie ahead, beyond Inter-American Dialogue claims by governments that have differ- Since few countries admit “ ing policies on protecting privacy. Michael Shifter, President to engaging in espionage, Communications privacy laws differ in Peter Hakim, President Emeritus depth and strength across Latin America; they are unlikely to observe no country has established controls and Genaro Arriagada, Nonresident Senior Fellow any agreement to restrict it. liabilities related to privacy enforcement Sergio Bitar, Nonresident Senior Fellow ” for any specific provider of information Joan Caivano, Director, Special Projects — James Andrew Lewis and communication technology services, Maria Darie, Director, Finance & Administration from infrastructure (such as servers, Mary Ellen Flather, Senior Director devices and networking) through appli- of Strategy and Development to observe any agreement to restrict it. An cations (including e-mail, voice, messag- Claudio Loser, Senior Fellow international agreement would be mean- ing, social networks and mobile and ingless and routinely violated by many cloud applications). Policies to ensure Nora Lustig, Nonresident Senior Fellow nations. We have a larger problem when it private data protection will need to con- Margaret Myers, Director, comes to privacy. It is a 19th century con- template all these layers, not just where China and Latin America Program cept trying to live in the digital age. What the information is ultimately stored. Manuel Orozco, Director, Remittances and Development Program people say and what people do are differ- Businesses in the region, even worldwide, ent—they demand privacy while posting will incur costs as well as opportunities Tamara Ortega Goodspeed, Senior Associate, Education away on social networks. Simply chanting from electronic privacy issues. mantras about privacy's importance is Governments may establish and enforce Jeffrey Puryear, Vice President, Social Policy inane. We need to rethink concepts like needed protection regulations, and com- 'public domain' and commercial use of pliance equates to expenses. The Latin America Advisor is published every data, but there are no agreed global stan- increased awareness of the importance business day, except for major U.S. holidays, by dards and no serious process to obtain and value of privacy in some areas will the Inter-American Dialogue at: them. Rethinking privacy for the digital create good prospects for businesses 1211 Connecticut Avenue NW, Suite 510 Washington, DC 20036 age is an important task, but new prob- capable of communicating the value they Phone: 202-822-9002 Fax: 202-822-9553 lems are not solved by old ideas." add because of their way of protecting it." www.thedialogue.org ISSN 2163-7962

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