LAA131010V7:Latin America Advisor.Qxd
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www.thedialogue.org Thursday, October 10, 2013 FEATURED Q&A BOARD OF ADVISORS Has the Government Shutdown Eroded U.S. Credibility? Diego Arria James R. Jones Director, Co-chair, Approximately 450,000 U.S. gov- impossible to understand. This could not Columbus Group Manatt Jones ernment employees remain fur- come at a worse time, amid the Brazil spy- Global Strategies LLC loughed as the U.S. government ing scandal, the embattled new government Genaro Arriagada shutdown enters its tenth day in Venezuela and the historic opportunity Nonresident Senior Craig A. Kelly Q amid Congress' failure to reach agreement we have to build a stronger relationship Fellow, Director, Americas Inter-American International Gov't on a spending bill. How might the shut- with the new president of Mexico, Enrique Dialogue Relations, down affect trade and other cross-border Peña Nieto. As a Republican and former Joyce Chang Exxon Mobil transactions between the United States business leader before serving as secretary and Latin American countries? What types of commerce, I am alarmed by the lack of a Global Head of John Maisto Emerging Markets Director, of U.S. negotiations, forums, visits or meet- coherent strategy by my party. No institu- Research, JPMorgan U.S. Education Finance ings with counterparts in Latin America tion can be managed by emotion and tac- Chase & Co. Group will be disrupted? Has Washington's polit- tics, let alone a $4 trillion federal govern- W. Bowman Cutter Nicolás Mariscal ical paralysis eroded U.S. credibility ment. However, this is precisely what is Former Partner, Chairman, among the Latin Americans who have E.M. Warburg Continued on page 3 Grupo Marhnos looked to the United States as a model of Pincus democratic governance? Thomas F. Dirk Donath McLarty III Senior Partner, President, Carlos Gutierrez, vice chair of Aimara Capital LLC McLarty Associates Albright Stonebridge Group in Jane Eddy Carlos Paz-Soldan Washington and former U.S. sec- Managing Director, Partner, retary of commerce: "As an Corporate & Govt. A DTB Associates, LLP American citizen, I am frustrated and dis- Ratings Group, Standard & Poor's Beatrice Rangel appointed by the government shutdown; it Director, is a failure, and I blame both parties. I can Marlene Fernández AMLA Consulting LLC only imagine the utter confusion among Corporate Vice those who covet our system of government President for José Antonio Ríos Brazil Boosts Interest Rate Government Relations, Chief Executive Officer, in countries around the world. The confu- for Fifth Consecutive Time Arcos Dorados Vadium Technology Inc. sion regarding our system of government will hit hardest in Latin America where Brazil's central bank, led by Alexandre Peter Hakim Gustavo Roosen President Emeritus, countries are divided as never before. The Tombini, on Wednesday raised its bench- Chairman of the Board, autocratic, anti-American far left (Cuba, mark Selic interest rate to 9.5 percent. Inter-American Envases Venezolanos Dialogue Venezuela, Nicaragua, Ecuador and The decision marked the fifth consecu- Andrés Rozental Donna Hrinak Bolivia) must be very pleased. They will use tive time that policymakers have President, the shutdown to justify their system of increased the interest rate. See story on President, Rozental & Asociados Boeing Brazil and Senior Fellow, repressive government. Our pro-American page 2. allies will have the difficult task of defend- Jon Huenemann Brookings Institution File Photo: Brazilian Government. ing a government shutdown that is almost Vice President, Everett Santos U.S. & Int'l Affairs, President, Philip Morris Int'l DALEC LLC Inside This Issue Shelly Shetty FEATURED Q&A: Has the Government Argentina's Fernández Recovering Head, Latin America Shutdown Eroded U.S. Credibility?......................1 Without Complications: Official ...........................2 Sovereign Ratings, Fitch Inc.-Start Content- Brazil Boosts Key Interest Mexico's Banco del Bajío Rate for Fifth Consecutive Time...........................2 Considering Initial Public Offering.......................3 United Nations Sued Over Brazil's Insurance Industry Expands Haiti Cholera Outbreak .........................................2 16.5 Percent Annually From 2001-12 ...................3 Copyright © 2013, Inter-American Dialogue Page 1 of 4 Inter-American Dialogue’s Latin America Advisor Thursday, October 10, 2013 NEWS BRIEFS Economic News quarter. Industrial production was unchanged in August after a 2.4 percent Argentina's Fernández Recovering decline in July. Also, Brazil's economic Without Complications: Official Brazil Boosts Key Interest Rate activity declined 0.3 percent in July. The Argentine President Cristina for Fifth Consecutive Time International Monetary Fund this week Fernández de Kirchner, who under- lowered its 2014 growth outlook for Brazil went surgery on Tuesday to remove Brazil's central bank on Wednesday hiked to 2.5 percent from 3.2 percent, adding its benchmark interest rate for the fifth that it expects the country's economic a blood clot from her brain, is consecutive time, marking the world's growth to slow in this year's second half. "recovering well and without com- longest current stretch of rate increases, [Editor's note: See related Q&A in plications," a presidential Bloomberg News reported. The central Tuesday's Advisor.] spokesman said Wednesday, accord- bank's board, led by Alexandre Tombini, ing to BBC News. The blood clot unanimously backed the increase of the Political News was discovered last weekend and attributed to a head injury Fernández suffered two months ago. There are still risks from United Nations Sued Over “ Haiti Cholera Outbreak Before the clot was discovered, a weaker real, which can Fernández was told by doctors to rest for 30 days, which has left Vice pressure inflation in Human rights lawyers on Wednesday filed President Amado Boudou in charge a class action lawsuit in U.S federal court the next few months. accusing the United Nations of "gross neg- and forced her off the electoral ” — Luciano Rostango ligence and misconduct" on behalf of vic- campaign ahead of the country's tims of a cholera outbreak in Haiti in Oct. 27 elections. 2010, CNN reported. The lethal strain of Pan-American Energy Seeking Selic rate, raising it to 9.5 percent from 9 cholera bacteria, indigenous only to some $1.49 Billion From Bolivia percent. All 49 economists in a recent parts of Asia, ultimately killed an estimat- Bloomberg survey had expected the move. ed 8,300 people and sparked riots in sever- Argentina-based Pan American The central bank said that boosting the al cities and towns. "The claims are that Energy has asked Bolivia to pay it interest rate will help curb inflation next the U.N. engaged in reckless and gross $1.49 billion for the January 2009 year. Since April, the bank has increased negligence and misconduct bringing expropriation of its Bolivian sub- the Selic by 225 basis points. From last cholera to Haiti," said Ira Kurzban, a sidiary, natural gas producer Chaco, October until April, the central bank had lawyer and board member with the Reuters reported Wednesday. Pan kept borrowing costs at a record low. Boston-based Institute for Justice and American Energy filed a request for Inflation in Latin America's largest econo- Development in Haiti. The group is compensation with the World my has remained above 4.5 percent, the demanding unspecified financial compen- midpoint of policymakers' target, for the sation for the Haitians who died as a result Bank's International Centre for past three years. "Inflation is elevated and of the epidemic as Settlement on Investment Disputes well above target," Luciano Rostango, well as some 650,000 in late September. Chaco is now a chief strategist at Banco Mizuho do more survivors. The unit of Bolivia's state-owned YPFB. Brasil, told Bloomberg News. "There are lawsuit also seeks still risks from a weaker real, which can more than $1.25 bil- Colombia to Consider State-Run Company to Manage Cell Towers pressure inflation in the next few months." lion for improve- Brazil's IPCA index, which measures con- ments to Haiti's Colombia's Senate will consider a sumer prices, increased 5.86 percent last water infrastructure, proposal to establish a state-run month, the country's national statistics The Guardian telecommunications company to agency said Wednesday. That marked the reported. A U.N. Ban manage the country's network of slowest increase in nine months. The official told CNN in File Photo: United cellphone towers, Reuters reported monthly inflation rate also accelerated to response to the suit Nations. Thursday. Sen. Juan Mario Laserna 0.35 percent, the sharpest increase in four that "it is not the is planning to formally present legis- months. The government of President United Nations' practice to discuss in pub- Dilma Rousseff has proposed spending lic claims filed against the organization." lation on the matter next week. 1.04 trillion reais next year, a 12 percent Earlier this year, however, Secretary Nationalizing Colombia's cell tower increase from this year's budget. Brazil's General Ban Ki-moon argued that the network would increase competition level of economic growth exceeded expec- organization had legal immunity in the and improve mobile coverage, he tations in the second quarter, but it case due to an international convention. said. appears that growth slowed in the third An independent investigation has con- Copyright © 2013, Inter-American Dialogue Page 2 of 4 Inter-American Dialogue’s Latin America Advisor Thursday, October 10, 2013 cluded that one of the likely sources of the Featured Q&A outbreak was sewage leaking from a U.N. Continued from page 1 base housing Nepalese peacekeepers in happening: attack and threaten—a few one way or another will be negatively Haiti to help with post-earthquake disas- days before a deadline—and figure out affected by this situation. The shutdown ter relief efforts. At least 182 Haitians died the endgame later. This could have been a will not only affect U.S.