LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Friday, November 6, 2015
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LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Friday, November 6, 2015 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Genaro Arriagada Is Costa Rica’s Nonresident Senior Fellow, Bolivia to Poll Inter-American Dialogue Voters on Morales Joyce Chang Global Head of Research, Economy on Re-election JPMorgan Chase & Co. Bolivia’s Congress approved a W. Bowman Cutter Former Partner, the Right Track? measure to hold a referendum E.M. Warburg Pincus next year on whether to allow Dirk Donath President Evo Morales a fourth Senior Partner, consecutive term. Catterton Aimara Page 2 Marlene Fernández Corporate Vice President for Government Relations, ECONOMIC Arcos Dorados Peter Hakim More Brazilians President Emeritus, Inter-American Dialogue Using Banks, But Donna Hrinak Debt Load Grows President, Boeing Latin America More than 84 percent of adults in Jon Huenemann Brazil had a checking or savings Vice President, U.S. & Int’l Affairs, Philip Morris International President Luis Guillermo Solís’ administration last month announced an economic plan that account last year, but Brazilians includes lower interest rates, infrastructure spending and fi nancial assistance for businesses. are saving relatively little and tak- James R. Jones // File Photo: Costa Rican Government. Co-chair, Manatt Jones ing on an increasing load of debt, Global Strategies LLC according to a central bank report. Costa Rica over the past fi ve years has implemented the Craig A. Kelly Page 2 Director, Americas International highest number of reforms of any country in Latin America Gov’t Relations, Exxon Mobil in an effort to improve its business climate, according to the John Maisto Q POLITICAL World Bank’s Oct. 27 “Doing Business 2016” report. Howev- Director, U.S. Education Moïse, Célestin Finance Group er, the country’s economy posted its sixth consecutive slowdown in GDP Nicolás Mariscal Advance to Chairman, growth in this year’s second quarter. Is Costa Rica on the right track to Grupo Marhnos attract more investors and improve its business climate? How well is Runoff in Haiti Thomas F. McLarty III President Luis Guillermo Solís handling the economy? How strong are Government-backed candidate President, Jovenel Moïse and former gov- McLarty Associates the country’s levels of investor and business confi dence? ernment construction chief Jude Carlos Paz-Soldan Célestin will advance to the sec- Partner, DTB Associates, LLP Alexander Mora, Costa Rica’s minister of foreign trade: ond round of Haiti’s presidential election, offi cials announced. The Beatrice Rangel “Costa Rica assigns high value to the continuous attraction Director, third-place fi nisher has alleged AMLA Consulting LLC of FDI. It is a priority area of action for the current administra- fraud in the Oct. 25 fi rst round. José Antonio Ríos tion, and a longstanding public policy in place since the late Page 2 Chief Executive Offi cer, A Vadium Technology Inc. 1980s. We are a small country open for business, strongly committed to Gustavo Roosen generating quality jobs and creative avenues to yield new opportunities Chairman of the Board, Envases Venezolanos for investment and growth. We believe that these tasks are of shared Andrés Rozental interest, and that government needs to address the trade of promoting President, Rozental & Asociados and Senior sustainable development in close partnership with business. Our vision Policy Advisor, Chatham House has rendered encouraging results. We have the region’s best education Shelly Shetty Head, Latin America system and a high-quality health system; these are the lofty principles Sovereign Ratings, Fitch Inc. that set the foundation of our nation, and areas in which we continue to Roberto Sifon-Arevalo invest heavily. In Latin America, we are known for having the greatest po- Managing Director, Americas Sovereign & Public Finance Ratings, tential for innovation and sophistication; and for being the fi rst high-tech Standard & Poor’s exporter of industrial products, as well as the top choice for establish- ing global business services centers; and in Central America and the Moïse // File Photo: Moïse Campaign. Continued on page 3 COPYRIGHT © 2015, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Friday, November 6, 2015 POLITICAL NEWS tin have alleged fraud. They asked election au- NEWS BRIEFS thorities to form an independent body to review Moïse, Célestin the results. Election offi cials are expected to Bolivians to Vote release certifi ed results later this month. on Allowing Morales Advance to Haiti’s Fourth Term Presidential Runoff ECONOMIC NEWS Bolivian lawmakers on Thursday approved a bill to hold a 2016 referendum that would allow Haiti’s government-supported presidential can- More Brazilians Bolivians to vote on whether President Evo didate, Jovenel Moïse, and former government Morales may run for a fourth consecutive term, construction chief Jude Célestin will face off Using Banks, But Agence France-Presse reported. The reform in the country’s Dec. 27 presidential runoff, would allow presidents to run for re-election election offi cials announced Thursday, the Debt Load Growing twice instead of just once, as the old law stipu- Associated Press reported. The announcement lated. Recent opinion polls show that Morales of the preliminary results came a week and a An increasing number of Brazilians are using is popular enough to secure re-election. He is half after the fi rst round of Haiti’s presidential formal banking services, but their debt loads the longest-serving president in South America. are growing and they are saving very little, the country’s central bank said in a report released Thursday, The Wall Street Journal reported. More Than a Dozen Last year, 84.5 percent of adults in the South American country had either a checking or a Feared Dead After savings account, an increase from 60.8 percent Dam Bursts in Brazil in 2005, according to the 2015 Financial As many as 16 people are feared to be dead Inclusion Report. However, Brazilians’ debt load after a dam in Brazil’s southeastern Minas has also increased, with households owing 46 Gerais state burst, sending waste water from Célestin // Photo: Célestin Campaign. percent of their income, on average, the report an iron ore mine rushing into homes in the said. That compares to 29 percent in 2007. area, BBC News reported today. One person is vote in which 54 candidates for the country’s Annual rates on mortgages, which make up a confi rmed dead, but the death toll is expected top job appeared on the ballot. A candidate large part of Brazilians’ debt, are approximately to rise, offi cials said. A fl ood of thick, red mud would have needed a majority of the votes in cascaded down valleys near the colonial city order win in the fi rst round on Oct. 25. Moïse of Mariana, destroying homes and swallowing received 32.8 percent of the vote while Célestin In September, the cars and trucks, BBC News reported. The dam won 25.2 percent, according to Pierre Louis average interest rate on burst on Thursday afternoon and sent the mud Opont, leader of Haiti’s Provisional Electoral unpaid credit card and debris into the town of Bento Rodrigues, Council. Several candidates in the race, how- which is located four miles away. ever, have alleged fraud by Moïse’s campaign. balances in Brazil was The third-place fi nisher, former Senator Moise 414 percent. Jean-Charles, recently asserted that he won half of the country’s departments, adding that Nicaragua Approves his supporters discovered partially-burned 10 percent. The growing level of debt could Environmental Study ballots marked with his name in Port-au-Prince. become more of a problem in Brazil, where for Proposed Canal Several other ballots cast for him had disap- unpaid credit card balances carried an average peared in other parts of the country, he added. interest rate of 414 percent in September. The Nicaraguan government approved an en- Jean-Charles called on his backers to mount a The report also said that just 12 percent of vironmental impact study on Thursday, giving “peaceful revolution” to express their views. In Brazilians have money in a savings account. China’s infrastructure fi rm HKND permission several locations in the capital, tire barricades That amount is the lowest among the emerging to begin its proposed $50 billion canal project, had been set on fi re and a person believed BRICS economies, which also include Russia, Al Jazeera reported. Nicaraguan authorities to be a supporter of Jean-Charles was found India, China and South Africa. On average, had already approved the plan for the 172- dead, lying in the street, the AP reported. In the 14 percent Latin Americans have cash in a mile route through Nicaragua. The canal is days following the election, eight presidential dedicated savings account, while the fi gure is scheduled for completion in December 2019, candidates, including Jean-Charles and Céles- 52 percent for high-income countries, The Wall though some experts doubt it will be built due to fi nancial, economic and social concerns. COPYRIGHT © 2015, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Friday, November 6, 2015 FEATURED Q&A / Continued from page 1 Street Journal reported. The central bank’s report also said the number of Brazilians using Caribbean, we are the top country for future Pacifi c Alliance was put on hold and nec- cell phones for banking increased 200 percent FDI. Over 250 high-tech multinationals with essary fi scal reforms were postponed. This between 2010 and 2014. [Editor’s note: See operations in our territory take advantage last decision has the potential to undermine Q&A on the future of fi nancial technology in the of our positioning and provide solid proof the country´s credit quality and constrain latest issue of the Financial Services Advisor.] of the strong levels of business confi dence economic growth.