Brazil GDP outlook, Ecopetrol success, Funes controversy and more.
BY CHRONICLE STAFF
Brazil's economy will likely show flat growth of 0.01 percent this year, according to the latest survey of 100 economists and analysts release by the country's central bank. Credit Suisse is more pessimistic, forecasting a decline of 1 percent. The Swiss bank believes Latin America as whole will see a GDP fall of 1.2 percent this year, with only two major economies - Peru and Colombia -- growing and Venezuela seeing zero growth. Mexico's economy will likely decline by 3 percent, Credit Suisse estimates.
While national oil companies like PDVSA and Pemex struggle, Colombia's state-owned Ecopetrol is going from strength to strength. Last week it won auctions to explore 26 blocks in the U.S. part of the Gulf of Mexico. Earlier this month, it acquired a majority stake in pipeline Ocensa from Canada-based Enbridge for $417 million. U.S.-based law firm Shearman & Sterling represented Ecopetrol in the acquisition, which allowed the Colombian company to boost its ownership stake from 35 to 60 percent. Enbridge will continue to operate the pipeline, Colombia's largest.
El Salvador's president-elect Mauricio Funes is still a few months from assuming office, but his advisors have already created some concern among foreign investors. Gerson Martinez, a senior economic advisor to Funes, told a local newspaper El Diario de Hoy last week that the new president would negotiate with multilateral, bilateral and private creditors to extend maturities on existing debt and swap floating rate debt for fixed rate debt. However, Funes - traveling in Brazil - denied those plans. The controversy comes as experts like JP Morgan analyst Franco Uccellipredict downward pressure on the country’s bond prices in the near term due to uncertainty about FMLN’s economic policies. However, he praises Funes for clarifying his debt stance and for signaling that he wants closer ties with Brazil - led by moderate leftist Luiz InacioLula da Silva -- and continued good ties with the United States. "We welcome Funes’s resolute efforts to clarify his stance on El Salvador’s public debt and view his decision to approach the US and Brazil, rather than populist alternatives in the region, as positive signals that he is likely to pursue moderate policies," he said in an analysis yesterday.
Fitch Ratings has upgraded the Republic of Colombia's $1 billion partially guaranteed amortizing notes to 'BBB' from 'BBB-'. In conjunction, Fitch has assigned a Stable Outlook to the issuance. The notes are supported by the International Bank for Reconstruction and Development (a unit of the World Bank) rolling guarantee of principal and interest for a one-year period. “Colombia's creditworthiness is supported by a record of macroeconomic stability, disciplined fiscal policies and deft liability management,” Fitch said in a statement. “These credit strengths, though, are balanced by comparatively high fiscal and external solvency ratios. Colombia also remains vulnerable to external shocks due to limited trade integration, high commodity dependence, and considerable trade exposure to Venezuela.”
Ambassador Jeffrey Davidow, who has been president of the Institute of the Americas at the University of California at San Diego since 2003, has been named as White House Advisor for the Summit of the Americas scheduled to be held in Trinidad April 17-19. He will oversee preparations for President Barack Obama’s participation in the summit and, in conjunction with the Department of State, will help manage Summit-related diplomacy in the region. Davidow, who has taken a leave of absence from the Institute of the Americas, is a former career diplomat who was Assistant Secretary for Western Hemisphere Affairs and ambassador to Mexico, Venezuela and Zambia, in addition to serving in several other posts in Latin America and Africa before retiring in 2003.
Mexico dominates tourism in Latin America, but it’s not the most competitive tourism market in the region. That honor goes to Costa Rica, according to the World Economic Forum’s Travel & Tourism Competitiveness Index 2009. Brazil follows with Mexico in third place. Paraguay ranks last among 18 countries in Latin America. However, despite Costa Rica’s achievements, it still ranks behind countries like Thailand and Mauritius. The index looks at factors such as tourism infrastructure, ground transport infrastructure, price competitiveness, environmental sustainability and safety and security.
A group of Central American law firms have joined the UK-based MSI Global Alliance of independent law and accountancy firms. The firms are Soley Saborío Fallas & Asociados (Costa Rica), Sáenz & Asociados (El Salvador), Firma de Abogados (Guatemala), Consultoría Jurídica Int. Bufete Bográn (Honduras), and Sánchez Cordero & Asociados (Nicaragua). "MSI Global Alliance presents a valuable opportunity to expand our firms' international practices," Elias Soley, chairman of Grupo Juridico Centroamericano, said in a statement last week.
PDVSA, World Cup, Cartagena