SURPRISE LEAVE: Vicente Trius, Latin America head of Wal-Mart, is leaving the company after a short time in his last job.
UNPOPULAR TAXES: New taxes announced by Brazilian finance minister Guido Mantega are being strongly criticized by foreign portfolio investors. (Photo: Brazil Finance Ministry)
Trius leaves Wal-Mart, Brazil imposes more taxes on investments, US Brazil ambassador delay spurs concern.
BY CHRONICLE STAFF
TRIUS LEAVES WAL-MART Vicente Trius, the Latin America head of Wal-Mart, has unexpectedly left the company after only five months in his latest job, AP reports. Trius assumed the top Latin America position in July after serving as Wal-Mart's Asia head for a year and Brazil head for 11 years. Trius had kept a low profile since assuming the Latin America job, but was included in the ranking of Latin America's 100 Most Powerful by Latin Business Chronicle.
TAXES, TAXES Brazil remains the hottest Latin America destination for investors - multinationals and money-managers alike. But in a short span of one month, finance minister Guido Mantega announced two new taxes that have become hugely unpopular among investors and led to strong decline in stock investments. “A lot of countries would die to have the kind of strong economic position that Brazil has, so I don’t know why they would want to tarnish it,” Geoffrey Pazzanese from the third-biggest U.S. manager of money-market funds Federated Investors told Bloomberg. “The whole thing is a ridiculous, very lame attempt to control something they shouldn’t try to control,” added Greg Lesko, who helps oversee $700 million at Deltec Asset Management in New York.
But some experts see the impact as minor. ”Capital flows have returned to Brazil, even at increasing volumes, thus making the tax effect a transitory event,” Alfredo Coutino, Latin America director for Moody’s Economy.com, said in a commentary today. He remains bullish on Brazil’s outlook, estimating that the economy will expand by 0.5 percent to 1.0 percent this year instead of the decline widely expected among official and private-sector economists. He also backs up President Lula’s estimate of a 9 percent GDP expansion in the third quarter. Brazil remains as one of the leaders in the global recovery and a rising star in Latin America, he says. “Prospects for the medium term remain promising since Brazil will continue to promote investment and growth, particularly in the next seven years when the country will host two of the most important international sport competitions: the World Cup in 2014 and the Olympics in 2016.”
BRAZIL AMBASSADOR DELAY A four-month, U.S. congressional delay in approving the Obama Administration's ambassador pick for Brazil, Latin America's largest economy, is causing growing concern among experts on the region. Bernard Aronson, the managing partner of Acon Investments LLC, warns that Boeing Co could lose a $7.5 billion contract as a result of the delay, Bloomberg reports. Boeing is competing with France-based Dassault Aviation to deliver 36 warplanes to Brazil. Aronson, was an Assistant Secretaries of State for the Western Hemisphere in two administrations and is among the nine former assistant secretaries for the region (including Otto Reich) that are urging U.S. Senator George LeMieux to stop blocking the appointment of Thomas Shannon as ambassador. "We have not always agreed on policies towards the region, nor do we today," they wrote in a letter to the senator (see PDF on the right). "But we are united firmly in our belief that our nation's interests and our relations with our neighbors in the hemisphere, especially Brazil, are being damaged by the hold placed on President Obama's nominee for U.S. Ambassador to Brazil, Thomas Shannon." The delay is harming U.S. relations with Brazil on trade and investment, they warn.
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