President Rousseff Announces Stimulus for Lagging Brazilian Economy

April 4, 2012

by AQ Online

On Tuesday President Dilma Rousseff announced a series of stimulus measures to kick-start the Brazilian economy. After a disappointing 2.7 percent GDP growth in the 2011 fiscal year, President Rousseff is hoping to reach at least 4.5 percent economic growth for the 2012 fiscal year.

The stimulus packet, worth about 60.4 billion reais ($33 billion), will include a mixture of fiscal incentives, including lowering payroll taxes for employers in hard-hit industries and increasing tariffs on products that have been gaining market space. Furthermore, the state-sponsored Brazilian Development Bank (BNDES), backed by a 45-billion reais ($24.5 billion) injection from the Treasury department, will increase its loans to subsidized companies in order to foster local production. According to President Rousseff, Brazil has to make use of its big and growing internal market, which also attracts great amounts of foreign investment.

These measures mark an important shift in strategy in President Rousseff’s administration. She came to power in the beginning of 2011 with an agenda ready for a country whose GDP had grown by 7.5 percent in 2010. The unexpected slowdown of the economy, however, has necessitated the adoption of fiscal measures to stimulate local businesses. Responding to criticism from the Brazilian congress over Rousseff’s management of the economy, former president Luiz Inácio “Lula” da Silva announced his full support of the Rousseff administration.

Tags: Brazil, Economy, Luiz Inácio Lula da Silva, Dilma Rousseff

Mexican Economy Bounces Back

March 1, 2011

by Arjan Shahani

Amidst growing national concern and international coverage of the violence in Mexico, a bit of news on the macroeconomic scale talks wonders of our country’s capabilities to overcome even the biggest obstacles.

Last week, Bloomberg ran a story on Mexico being the second economy in Latin America to bounce back from the 2009 recession with the highest pace of growth in the last decade. Our economy expanded by 5.5 percent in 2010.

Granted, it is not China’s double digit performance. But for a country that is largely dependent on an economic relationship with the our neighbor to the north—80.5 percent of our trade is with the United States—and is still facing important trade challenges, the GDP expansion at a 0.2 percent rate larger than expected for the fourth quarter of 2010 is excellent news. In a way, it is also good news for the United States. It shows that consumer spending is recovering in spite of the housing situation and the still present issue of unemployment (9 percent in January).

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Tags: trade, Mexico, Economy

Weekly Roundup from Across the Americas

January 13, 2010

by AS-COA Online

From the Americas Society/Council of the Americas. AS/COA Online's news brief examines the major—as well as some of the overlooked—events and stories occurring across the Americas. Check back every Wednesday for the weekly roundup.

Sign up to receive the Weekly Roundup via email.

Haiti Rocked by Destructive Earthquake

A magnitude 7.0 earthquake struck Haiti on January 12, resulting in widespread chaos and substantial casualties. “Parliament has collapsed. The tax office has collapsed. Schools have collapsed. Hospitals have collapsed,” said Haiti’s President René Préval in an interview with The Miami Herald, who described the catastrophe as “unimaginable.” The United Nations and other agencies have warned that the rampant devastation is hampering efforts and The International Red Cross says as many as three million people have been affected and tens of thousands may have been killed by the earthquake, the epicenter of which lies just outside the Haitian capital. Images and reports of the destruction have been widely distributed via Internet and social media. Get updates via Twitter at #Haiti.

AS/COA has compiled a resource page with information about how to support relief efforts and get more information.

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Tags: Chile, Cuba, Brazil, Bolivia, Mexico, Colombia, Venezuela, Guatemala, unemployment, Haiti, President Obama and Latin America, Economy, OECD

Weekly Roundup from Across the Americas

January 6, 2010

by AS-COA Online

From the Americas Society/Council of the Americas. AS/COA Online's news brief examines the major—as well as some of the overlooked—events and stories occurring across the Americas. Check back every Wednesday for the weekly roundup.

Sign up to receive the Weekly Roundup via email.

Fernández Pushes for New Central Bank Head

Argentine President Cristina Fernández de Kirchner has sought to replace Central Bank Governor Martín Redrado after he turned down a presidential order to use $6.6 billion in reserves to pay off debt. Former Central Bank head Mario Blejer was named as a potential replacement. However, Redrado rejected the notion that he will resign and said that, according to the Bank’s charter, the decision to dismiss him lies with the Argentine Congress.

Buenos Aires Mayor Announces Presidential Bid

Mayor of Buenos Aires Mauricio Macri announced intentions of a 2011 presidential bid this week. A member of the conservative Propuesta Republicana (PRO) party, Macri hopes to face Néstor Kirchner in a second round and insists the former president “could never win” a one-on-one election.

Looking Back on Washington’s 2009 LatAm Policy

Writing for the State Department’s Dipnote blog, Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela reflects on U.S. engagement in the Americas during the first year of the Obama administration. After recounting Secretary of State Hillary Clinton’s visit to Mexico in March and the launch of the Inter-American Social Protection Network, Valenzuela concludes “2009 has been an exciting year in terms of our relationships—both bilaterally and multilaterally.”

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Tags: Cuba, Brazil, Colombia, Immigration, Honduras, Evo Morales, Ecuador, Argentina, Uruguay, Fujimori, Economy, Remittances, Malaria

Argentine Central Bank President Asked to Step Down

January 6, 2010

by AQ Online

The government of Argentine President Cristina Fernández de Kirchner asked Central Bank President Martín Redrado to leave his post on Wednesday after he refused her request to transfer $6.6 billion in Central Bank reserves to help pay government debts. Argentine government debts are expected to rise to $13 billion this year.

President Kirchner appointed former Central Bank President Mario Blejer, to the post. But Blejer has rejected the appointment and Redrado has refused to step down. According to the Central Bank’s charter, Redrado can only be dismissed for misconduct or failure to carry out his duties after the President has consulted with a congressional committee chaired by the Senate President (Vice President Julio Cobos). In the past, Cobos has disagreed with some of the government’s economic policies.

Redrado, who says only Congress has the authority to fire him, says he plans to stay until September, when his term ends. The Merval stock index had fallen 2 percent by midday.

Tags: Argentina, Economy, Cristina Fernandez de Kirchner

Daily Focus: Canadian Loonie Surges

May 5, 2009

by AQ Online

The Canadian dollar reached its highest level in six months yesterday, climbing from a low of CAD$1.30 per U.S. dollar to $1.18 today. This comes as investors speculated that the worst of the financial crisis may be over. The Canadian dollar appreciation mirrors gains in both the U.S. and Canadian stock markets and a possible bottoming out of commodity prices.

Canada’s economy is closely linked to global oil prices and other commodity exports, with the lumber industry, in particular, optimistic about the slight up-tick in the U.S. housing market. This, coupled with better than expected manufacturing output in China, appears to be fueling a greater appetite for investment in more commodity-dependent currencies like the Canadian dollar. No major Canadian economic data will come out today, but markets will be watching as employment and housing reports come out later in the week.

Tags: Canada, Financial Crisis, Daily Update, Economy

Congress Takes Up Immigration Reform

May 1, 2009

by Jason Marczak

"Every interest group, left, right and center, for one specific reason or another opposes the [immigration] bill. The question is, in a complicated world can Congress rise above those specific interests?"

That’s a quote from the new chair of the Senate’s immigration subcommittee, Sen. Charles Schumer of New York, who held his first immigration reform hearing yesterday. But my how things remain the same. Schumer actually spoke those words in 1986 as a Brooklyn (NY) congressman. That year he played a key role in brokering a compromise on agricultural workers—allowing undocumented farm workers to become legal immigrants if they had worked at least 90 days from 1985 to 1986—that paved the way for passage of the 1986 Immigration Reform and Control Act (IRCA).

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Tags: Mexico, Immigration, US, Economy

Daily Focus: Mexico’s Economy Shrinks in the First Quarter as Swine Flu Threatens Bigger Economic Hit

May 1, 2009

by AQ Online

Late yesterday, Mexico’s Finance Ministry reported that the economy contracted at an annualized rate of 7% in the first quarter due to plummeting exports.  The most recent figures raise fears that the economy could shrink by more than the 3.8% to 4.8% that the Central Bank had previously forecast for 2009. 

Making matters worse, the swine flu epidemic has prompted the federal government to suspend all non-essential services and urge businesses to close from May 1 to May 5 to reduce the spread of the virus. 

Mexico’s revenues from tourism, which represent 8% of GDP, are also likely to fall precipitously as a result of the epidemic.  Earlier this week, Cruise lines announced that they would cease all port calls in Mexico.  And today, Continental Airlines announced that it is cutting flights to Mexico starting Monday.  Despite this grim news, the peso appreciated against the dollar in late trading yesterday on news of a $3 billion loan from the Inter-American Development Bank to help Mexico combat the disease.

Tags: Mexico, Health care, Daily Update, Economy

From Quito: Reactions to Rafael Correa's Re-Election

April 29, 2009

by Naomi Mapstone

I was a little taken aback last week when I told a high-minded Peruvian journalist I would be traveling to Quito to cover the presidential elections. Correa! she said, eyes alight, eyebrows waggling, her elbow giving me a knowing dig in the ribs.

I might have written this off as a case of sensory deprivation brought on by years of covering the none-too-pretty underbelly of Limeño politics, were it not for the groupies at Rafael Correa’s final Quito campaign rally this week. Starry-eyed, perfectly coiffed, with heavy eyeliner—and I think in one case, false eyelashes—they jostled for position at the barricades demanding to know when El Presidente would be there. Granted this was a political rally, and flag-waving, chanting and fist-waving are par for the course. But there is no denying the man has charisma.

And for now, it seems, he has the trust of the people. Correa’s closest rival, Lucio Gutiérrez, the former president ousted in 2005, outpaced expectations. But even so he raised the possibility of fraud. Exit polls, though, still show the president with a convincing margin of victory.

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Tags: Ecuador, Elections, Economic Crisis, Correa, Economy

A Bipartisan Approach to Reduce Poverty and Boost the Western Hemisphere’s Middle Class will Soon Fall by the Wayside.

December 3, 2008

by Jason Marczak

Congress will meet one more time next week before likely packing up and heading home for the holidays. That may be good news for automakers seeking relief but lawmakers will be leaving behind much unfinished business for our Americas policy. For one, the Colombia and Panama free-trade agreements (FTAs) have yet to be considered. Passage of these agreements would offer a rare win-win for the U.S.—helping our economy while showing the region that the U.S. delivers on its promises. Beyond the FTAs, Congress may soon punt on another key hemispheric initiative: the bipartisan Social Investment and Economic Development Fund for the Americas.

Then-Representative Robert Menendez introduced the first version just over five years ago. Now a senator, he has introduced it in every Congress since. And along the way he has found more supporters. Menendez introduced it for a third time last year—this time in the Senate—and on the House side, Representative Eliot Engel offered it up for consideration. Soon after, AQ wrote about it first with a special feature in our Fall 2007 issue. Since then, 13 senators (including newly nominated Secretary of State Hillary Clinton) signed on to the Senate bill and 30 to its House equivalent, with support coming from both parties. This time around the Senate bill got further along than any previous time—making it through the Foreign Relations Committee. But that’s where it came to a halt.

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Tags: Peru, Colombia, Free Trade, US, Economy