BY CHRONICLE STAFF
THE SKY IS THE LIMIT
Nearly a year after a court-appointed expert in Ecuador recommended Chevron pay a whopping $27 billion in environmental damages, the plaintiffs are now asking for $113 billion. That’s twice the entire GDP of Ecuador, which last year stood at $57.3 billion. Or more than Latin America’s largest company, Petrobras, posted in 2009 revenues, which was $104.9 billion. The plaintiffs claim that Chevron is responsible for environmental damages in Ecuador even though it left the country in 1992 – nearly 20 years ago -- after a $40 million remediation. Chevron denies responsibility for the current environmental damage and instead points to local oil company Petroecuador, which is infamous for mismanagement and a poor environmental track record. The US oil giant has also repeatedly charged that the whole process in Ecuador lacked any scientific credibility and was marred by everything from fraud to political meddling. Chevron also points to outtakes from Crude, a film document on the case, which reveals the plaintiffs’ lawyers’ strategy. In the outtake, the plaintiffs’ lawyer Steven Donziger states, “We ask for much more than what we expect. If for example, if we believe three million to clean and we ask for eighteen billion, are they going to regard us as if we’re crazy, or will the judge see, ‘eh, I can give Texaco about eighty percent of what they want, then I’m going to give them three billion.’ Then, if we ask for eighteen billion…But as a concept, I ask, do we ask for much more than what we really want as a strategy? Do we ask for eight and expect three, so that [the judge] says, ‘Look, Texaco, I cut down the largest part.’”
Colombia has the lowest software piracy rate among the top six economies in Latin America, but Chile has the lowest real losses in dollar terms, according to a new report from the Business Software Alliance. Colombia’s rate last year was 55 percent. That compares with 56 percent in Brazil, 60 percent in Mexico, 64 percent in Chile, 70 percent in Peru and 71 percent in Argentina. Measured by losses, Brazil was the worst - $3.9 billion, followed by Mexico, with $2.3 billion. Losses in Argentina reached $949, while Colombia and Chile posted software losses of $452 million and $320 million, respectively.
Panama and Uruguay can boast important banking centers, but when it comes to local bank penetration they are among the laggards in Latin America. There are only 412 accounts in Panama and 529 in Uruguay per 1,000 adults. That compares with 1,354 in Costa Rica and 1,267 in Colombia. Latin America lags most of the rest of the world when it comes to bank penetration, according to a new report from The World Bank. Some 40 percent of households in Latin America have a deposit account with a formal financial institution. That’s lower than all other world regions except South Asia and Sub-Saharan Africa. Within Latin America there are big differences. In addition to Costa Rica and Colombia, the countries with the highest rates include Venezuela (1,246), Guatemala (1,139), Mexico (1,097) and Brazil (1,065). Panama and Uruguay are not the worst in Latin America. That honor goes to Paraguay (109) and Bolivia (338).
COMPLAINTS OVER ELDORADO
More than 900 users of Eldorado airport in Bogota and the American Chamber have voiced concern over its efficiency and quality. The airport is Latin America’s largest in terms of cargo and third-largest in terms of passenger traffic, according to the ranking of the region’s Top 50 Airports from Latin Business Chronicle based on data from Swiss-based Airports Council International (ACI). “The truth is that Eldorado today always represents a red light,” Camilo Reyes, the executive director of the American Chamber of Commerce in Colombia, wrote in a letter to Colombia’s transport minister German Cardona on September 8. He points to the low capacity in managing air traffic, deficit in gates, inefficient immigration and emigration process, costly and cumbersome cargo management and last, but not least, the difficult access to Bogota.
AWARD TO GARCIA
Peruvian President Alan Garcia is receiving the Gold Insigne from the Americas Society in New York this week. Garcia is being honored for the economic and social, accomplishments carried out in his second term as president (2006-11). They include such factors as strong GDP growth, falling unemployment and the fact that technology is being leveraged to a greater extent to streamline efficiency of social programs such as JUNTOS, focusing on poverty alleviation, comprehensive health insurance, and children’s education.
Guatemala’s political institutions and the government have held back the pace of economic recovery in Central America’s largest economy, JP Morgan analyst Franco Uccelli said in a recent trip report to the bank’s clients. “Guatemala’s security situation has deteriorated so much that President [Alvaro] Colom has had to use the military to combat drug trafficking, something he pledged he would not do prior to taking office,” he wrote. “Aggravating matters, frustration over Colom’s limited ability to implement policy and pass reform is growing (e.g. he could not even get this year’s budget approved). While elections are still more than one year away, the level of political noise and uncertainty is starting to intensify, suggesting that politics will remain a limiting factor at least until after the November 2011 presidential election, when the wife of President Colom, Sandra Torres (populist), is likely to run against the former chief of the security forces, Otto Perez Molina (business choice).”
More than 300 business people and top level government officials from Latin America and the Caribbean, China, Japan and Korea will participate in the fourth annual China-LAC Business summit, which will be held in Chengdu, China, on October 21-22, 2010. The event is organized by the Inter-American Development Bank (IDB) and the China Council for the Promotion of International Trade (CCPIT) in close collaboration with the People’s Bank of China and the Sichuan Provincial Government. Prominent speakers include Luis Fernando Alarcón, CEO of Colombia-based ISA; Gesner Oliveira, President of Sabesp (Brazil's largest water company), Guan Dong Yuan, Managing Director of the China unit of Brazil’s Embraer; Marcelo Claure, CEO of US-based Brightstar and Jeffrey Davidow, President of the Institute of the Americas. The summit comes as China-Latin America trade continues to grow strongly. Last year, Latin America even managed to boost its surplus with China fourfold, according to a recent Latin Business Chronicle analysis.
At a recent ceremony in his office in Panama City, Panama commerce and industry minister Roberto Henriquez received the official plaque commemorating that Panama is the top country on the 2010 Latin Business Index from Latin Business Chronicle. The plaque was presented by Latin Trade Group CEO Rosemary Winters.
Nicaraguan President Daniel Ortega has refused to provide the International Monetary Fund any details on the financial support his country receives from Venezuela. Nicaragua receives financial support from Venezuela through the Bolivarian Alternative for the Americas (ALBA), a Venezuelan-sponsored international co-operation organization, and a controversial company named ALBANISA, IHS Global Insight reports. “ALBANISA has been questioned by the opposition, which considers it to constitute a parallel budget for the government that has reportedly been invested in controversial projects aiming to obtain political support for the ruling Sandinista National Liberation Front Party and that has the potential to derive widespread corruption,” the consultancy says. Venezuela provided US$443 million to Nicaragua in 2009, and US$461 million in 2008, according to Central Bank data quoted by IHS Global Insight.
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