With little more than a week left of his presidency, Sebastián Piñera is fighting on to the last.
On the anniversary of one of the most powerful earthquakes on record wreaking havoc in Chile just days before he came to power four years ago, Piñera trumpeted his government’s record in cleaning up the mess yesterday.
However much opponents may accuse him of massaging the numbers, with 97 per cent of the infrastructure destroyed now rebuilt according to official figures, it seems fair to say that Piñera did a decent job in keeping his promise to fix the problems by the end of his term.
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It has been a while coming but after a UN ruling on Monday it is finally time for Chile and Peru to put their maritime differences behind them.
The International Court of Justice in The Hague has given Peru a chunk of the Pacific Ocean it did not have before, while Chile has retained its rich coastal fishing grounds. So, despite smug smiles and gnashing of teeth in some corners of both countries, what looks like a split sovereignty ruling should reinforce the pledge Peru and Chile have made to remain good neighbours. Continue reading »
What a difference a mountain range makes. To the east of the Andes, Argentina is in the throes of an old fashioned, disorderly devaluation, in which authorities scramble to plug every leaking channel of hard currency flows until at last they are carried off in the flood. To the west, Chile’s authorities are looking on with calm equanimity as their currency gently subsides to its own level.
What is it, other than snow-capped peaks, that unites and separates their two worlds? Continue reading »
Michelle Bachelet, Chile’s president elect, might well be excused for thinking she’s under fire from a new Triple Alliance.
In the next few days she can expect a binding court ruling that threatens to extend Peru’s maritime border into Chilean territorial waters. Meanwhile, landlocked Bolivia hasn’t given up its dream of a corridor through the Atacama Desert to the Pacific (though it must now do without the late Hugo Chávez’s boisterous support). And Argentina is suddenly making noise about wanting its own door to the world’s biggest ocean. Continue reading »
An IMF research paper shows how rare Latin American financial crises have been since 1998, when the world was rocked by EM currency crises. We’ve graphed the findings below.
Carlos Vegh and Guillermo Vuletin, the authors, think the continent has learnt from 1998. Successful countries like Brazil, Peru and Chile have stimulated their economies when GDP dipped; before 1998, they were less keen to do so. Continue reading »
Research company Wealth-X has released its annual report on “ultra high net worth individuals”. (For those prefer plain English, they mean the stinking rich.)
The super wealthy in the west have got even richer over the past year. In fact the super rich have got richer just about everywhere – bar in eight emerging and frontier countries including China, Brazil and Syria. Continue reading »
Michelle Bachelet (pictured) is well on her way to returning to the Chilean presidency after winning 46.7 per cent of the votes in the first round of the country’s presidential elections on Sunday.
But while the 62-year old former pediatrician is expected to win the second round run-off on December 15 by a comfortable margin, she is also set to inherit an economy that is much less robust than the one she presided over during with her previous stint in 2006-2010. Continue reading »
Latin America is home to four of the five most violent countries in the world.
For an area of the world significantly richer per head than Africa and something of a hot spot for investors, this is damning.
The high crime rates are not just limited to drug-ridden basket cases like Honduras and Guatemala, either. In Brazil and Chile, crime is hitting growth, deterring business and swelling government coffers, according to a UN report released on Tuesday. Continue reading »
He's behind you
FT readers will know that Latin America’s GDP growth is tied to the Chinese economy. If Chinese output dips, this usually reduces growth estimates for Chile and Brazil, owing to their high trade volumes. Lower Chinese demand for copper, soya and iron ore – among other goods – hits both economies.
Commentators see Mexico as a separate case. Mexico exports large amounts of manufactured goods to the US, just like China. Its economy is often thought to be little impacted by revisions in Chinese GDP figures.
Or is it?
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Better safe than sorry? Chile on Thursday unexpectedly cut its benchmark interest rate by 25bps to 4.75 per cent on Thursday. It’s its first rate cut since January 2012.
Although economic growth for the country – forecast at between 4-4.5 per cent for this year – is still the envy of the region (Mexico and Brazil by contrast are expected to grow 1.7 per cent and 2.4 per cent respectively), it has weakened from previous estimates of 4-5 per cent. Continue reading »
Investors have got used to the idea that Brazil’s economy is not delivering on its post-crisis promise and that Chile, Peru, Colombia and Mexico are where future growth lies.
But how upbeat are consumers in those countries? A survey commissioned by LatAm Confidential, a new service from the Financial Times launched this week, throws up some surprising results. Continue reading »
For Barrick Gold, there was a silver lining to the Chilean Supreme Court’s decision on Wednesday to uphold the suspension of the construction of its giant Pascua Lama mine.
The Toronto-based company will at least not be required to apply for a new environmental permit for the $8.5bn project, which sits high up in the Andes on the border with Argentina. Continue reading »
It’s a fickle old world. Julio Ponce (pictured), whose close connection to General Augusto Pinochet helped him to become one of Chile’s richest men, could now face up to ten years in prison if charges of insider trading brought against him by the securities regulator (SVS) are upheld.
With some suggesting that the scandal is only the tip of the iceberg, it puts in jeopardy Ponce’s control for more than two decades over Sociedad Quimica & Minera de Chile (SQM), one of the world’s biggest producers of potassium nitrate, iodine and lithium. Continue reading »
While most Chileans were dwelling somberly on the past on Wednesday, commemorating the 40th anniversary of General Pinochet’s coup d’état on 11th September 1973, the attention of CFR Pharmaceuticals was firmly focused on its future.
Chile’s largest pharmaceuticals company is about to get even bigger after agreeing to pay $1.3bn for South Africa’s Adock Ingram Holdings, in a deal that would expand CFR’s reach across four continents. Continue reading »
It was an odd moment to pick a diplomatic tussle, with attention focusing on Buenos Aires as it prepares to host the International Olympic Committee’s congress that begins on Wednesday.
But Argentina’s pugnacious president, Cristina Fernández, seemed unable to resist a jab at her counterpart across the Chilean border, Sebastián Piñera, as the local subsidiary of Lan Airlines, which he used to run, defends its interests in Argentina. Continue reading »