LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Thursday, October 29, 2015
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LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Thursday, October 29, 2015 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Genaro Arriagada How Well Are Latin Nonresident Senior Fellow, ‘Argentina Needs Inter-American Dialogue Change’: Massa Joyce Chang Global Head of Research, American Nations Argentina needs a new direction, JPMorgan Chase & Co. said Sergio Massa, who failed to W. Bowman Cutter advance to Argentina’s presiden- Former Partner, Fighting Poverty? tial runoff but whose supporters E.M. Warburg Pincus are critical to the remaining Dirk Donath candidates in the second round. Senior Partner, Catterton Aimara His statement was seen as a snub Marlene Fernández of the ruling party candidate. Corporate Vice President for Page 3 Government Relations, Arcos Dorados Peter Hakim BUSINESS President Emeritus, Inter-American Dialogue U.S. Fed Clears Donna Hrinak Bci for Purchase President, Boeing Latin America of Florida Bank Jon Huenemann Vice President, U.S. & Int’l Affairs, Bci, the third-largest bank in Chile, Philip Morris International Brazil’s poverty rate has decreased over the past two decades. Above, the Complexo do Alemão favela in Rio de Janeiro is pictured. // File Photo: Nicola Dracoulis via Creative originally requested approval to James R. Jones Commons. buy City National Bank of Florida Co-chair, Manatt Jones in 2013. The deal is valued at Global Strategies LLC The World Bank on Oct. 4 updated the international poverty $883 million. Craig A. Kelly Director, Americas International line to those living on $1.90 per day or less, up from $1.25 Page 2 Gov’t Relations, Exxon Mobil per day or less. The World Bank also projected that Latin John Maisto Q POLITICAL Director, U.S. Education America and the Caribbean’s poverty level would fall to 5.6 Finance Group percent of the population in 2015, as compared to 6.2 percent in 2012. Santos Seeking Nicolás Mariscal Chairman, How will these fi gures change the way the region fi ghts poverty? Which Jan. 1 Truce Grupo Marhnos countries in Latin America are doing the best job of helping lift indi- With FARC Thomas F. McLarty III viduals and families out of poverty? Will raising the poverty line affect President, Colombian President Juan Manuel McLarty Associates the way international development agencies address poverty reduction Santos expressed hopes that the Carlos Paz-Soldan efforts for the region? government and the FARC rebels Partner, could reach agreement on the fi fth DTB Associates, LLP point of their negotiating agenda Beatrice Rangel George Gray Molina, chief economist at the Regional Bureau and begin a bilateral cease-fi re on Director, AMLA Consulting LLC for Latin America and the Caribbean at the United Nations New Year’s Day. Page 2 José Antonio Ríos Development Programme: “The World Bank adjustment Chief Executive Offi cer, Vadium Technology Inc. A refl ects changes in prices between and within countries. The Gustavo Roosen basket of goods and services that cost $1.25 (2005 PPP) a few years Chairman of the Board, Envases Venezolanos ago, now costs $1.90 (2011 PPP). The net effect in Latin America and the Andrés Rozental Caribbean is relatively small. Still, the most successful countries at reduc- President, Rozental & Asociados and Senior ing extreme poverty—as captured by the harmonized SEDLAC data—are Policy Advisor, Chatham House Bolivia, Peru and Ecuador (each, a very different ‘development model’). Shelly Shetty Head, Latin America The larger issue is that more and more countries face ‘last mile’ challeng- Sovereign Ratings, Fitch Inc. es with respect to extreme poverty—they are only getting started with the Roberto Sifon-Arevalo ‘resilience marathon’, both raising and keeping people above a $10/day Managing Director, Americas Sovereign & Public Finance Ratings, vulnerability line. Our own work at UNDP shows that the determinants of Standard & Poor’s ‘sliding-back-into poverty’ are not the same as the determinants of ‘leav- ing poverty.’ The resilience challenge requires assets, labor skills and so- Santos // File Photo: Colombian Government. Continued on page 3 COPYRIGHT © 2015, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Thursday, October 29, 2015 POLITICAL NEWS NEWS BRIEFS Gov’t Fabricated Colombia’s Santos Evidence in López Former Brazilian Soccer Head Agrees to Seeks Jan. 1 Truce Case: Ex-Prosecutor Deportation in FIFA Case With FARC The Venezuelan government fabricated The former head of Brazilian soccer, who along evidence against Leopoldo López, who was with six other offi cials from soccer’s governing Colombian President Juan Manuel Santos on sentenced to nearly 14 years in prison, because body FIFA, was arrested in May on corruption Wednesday expressed hopes that his gov- the government “feared his leadership,” said charges, has agreed to be deported from Swit- ernment and the Revolutionary Armed Forces a former prosecutor who helped convict the zerland to the United States in order to face of Colombia, or FARC, rebels could begin a opposition leader, CNN reported Wednesday. charges, BBC News reported the Swiss Federal bilateral cease-fi re beginning on New Year’s The former Venezuelan prosecutor, Franklin Offi ce as saying. José Maria Marin is accused Day, EFE reported. The two sides already have Nieves, who was recently fi red by Attorney of taking millions of dollars in bribes in connec- reached agreement on four broad points, and General Luisa Ortega, fl ed the country and is tion to marketing rights at Copa America and seeking asylum in the United States. He said Copa do Brasil tournaments, though he denies The FARC has “100 percent of the investigation was fabricat- the charges. ed,” in which López was convicted in Septem- been observing a ber of inciting violence amid anti-government unilateral cease-fi re. protests. Nieves told CNN that “after examining More Interest Rate each and every piece of evidence, it was shown Hikes Necessary: that this person had at no point made even a Santos said enough progress could be made single call to violence.” Video footage of the Chile Central Bank Chief over the next two months to call a truce. “Let’s protests show the opposition leader “always In order to bring Chile’s infl ation rate to the tar- make that effort so that between now and Dec. geted 2-4 percent range, the central bank will 31 we can, for example, fi nish point fi ve, the need to increase the interest rate, bank Presi- end of the confl ict, and thus be able to declare dent Rodrigo Vergara said Wednesday, Reuters a bilateral, internationally verifi ed cease-fi re reported. Policymakers raised the interest rate starting Jan. 1,” Santos told a meeting of the to 3.25 percent on Oct. 15, and said more rate National Commission on Competitiveness, hikes were on the way as the central bank tries Science, Technology and Innovation. Since the to control infl ation. This year, Chile’s peso has peace talks began three years ago in Havana, depreciated 12 percent against the dollar, and Colombia’s government and the FARC have fell 13 percent last year against the dollar. reached agreements on the issues of land López // File Photo: Instagram site of Leopoldo López. reform, the rebels’ political participation, the illegal drug trade and transitional justice. Now, calling on his supporters to remain calm,” said only one major point remains—the FARC’s Nieves. When asked why he did not speak out U.S. Federal Reserve disarmament and demobilization. In July, the sooner, Nieves said that he was pressured to Clears Chile’s Bci to FARC called a unilateral cease-fi re, leading the stay quiet. He said the pressure fi ltered down Purchase Florida Bank government to suspend aerial attacks on rebel from President Nicolás Maduro and National The U.S. Federal Reserve has given its approval camps. Santos has consistently refused to halt Assembly President Diosdado Cabello through to Chilean bank Bci to buy City National Bank all attacks as the rebels in the past have used Ortega. Nieves said López’s case is not unique of Florida, a unit of Spain-based Bankia, Bci breaks in government raids to re-arm, Reuters in Venezuela. “There are innumerable cases in said Wednesday, Reuters reported. Bci, the reported. Last month, the two sides reached which people were investigated and innocent third-largest bank in the South American coun- what they called a breakthrough in the negotia- people detained,” he said. Ortega dismissed try, originally requested approval for the $883 tions and set a six-month deadline for reaching Nieves’ claims on Monday, saying “at the state million purchase in 2013. Spanish and Chilean a fi nal peace accord. Any accord would have to prosecutor’s offi ce we don’t pressure anyone.” banking authorities already have approved the pass Colombia’s Congress and voters in order She also said that Nieves has succumbed to purchase. The transaction should be fi nalized to be implemented. [Editor’s note: See Q&A on “pressures from foreign and domestic ele- within 30 days, Bci said in a statement. whether peace is fi nally within reach in Colom- ments,” though she did not specify what those bia in the Sept. 30 issue of the Advisor.] pressures were, BBC News reported. Venezue- COPYRIGHT © 2015, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Thursday, October 29, 2015 la’s Ministry of Communications and Informa- FEATURED Q&A / Continued from page 1 tion has not responded to CNN’s requests for comment. cial protection to keep all boats afl oat. This rate will yield more pesos or reais per PPP upgrading is a generational challenge that dollar. In Latin American countries, $1.90 in will not be achieved by any single govern- PPP dollars is worth more than one would Argentina Needs ment, nor for any single political mandate.