|
This was supposed to be a difficult year for investors in Latin America, as many countries in the region, including Brazil and Mexico, the two biggest, went to the polls. Fears of a swing to the left were mostly realized.
Radical leftwingers Ollanta Humala in Peru and Andrés Manuel López Obrador in Mexico missed out but only by very narrow margins. Elsewhere the continent saw the left return in Chile, the re-election of Luiz Inácio Lula da Silva in Brazil, the return of the once-Marxist Sandinistas in Nicaragua, the nationalization of Bolivia's gas reserves by Evo Morales, and the continuation of Hugo Chávez's power in Venezuela. Guerrilla warfare drags on in Colombia. So how is it possible that Latin America's markets have logged better performance than any other region of the world? The Morgan Stanley Capital International Latin America index has gained 109.7% over the past two years. The indices for Argentina, Brazil, Colombia and Mexico have all more than doubled in that period. One explanation is that investors are too optimistic about the political risks. Put more kindly, the populist surge throughout the region has been more responsible than feared. Lula understood that a return to inflation would hurt the poor, as did even López Obrador. With economies in the region either fully dollarized, or with a floating currency, the risk of foreign exchange crises is lessened. Several countries, notably Mexico, have also reduced their reliance on dollar-denominated funding. But the fact remains that this market growth has been achieved without particularly strong economic growth to back it. With 24 per cent of the MSCI LatAm index in materials, perhaps the key driver has been the commodities boom. Yesterday's sharp fall in metals prices triggered a 3 per cent fall in CVRD, the Brazilian mining concern, which accounts for almost 15 per cent of the country's Bovespa index. That index is off 2.75 per cent since a high last week. If commodities prices continue to return to earth, Latin American equity returns may well follow. Financial Times
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.