Economic Developments - July 2017

Presidents of Argentina and Chile both attended the One Belt One Road (OBOR) Summit in Beijing in May, adding on bilateral visits to sign agreements. Chinese President Xi Jinping’s meetings in 2016 with Bachelet and Macri launched the China-Chile Comprehensive Strategic Partnership and agreement on two nuclear plants to generate over 1200 MW of electricity in Argentina. China is the largest trading partner of Brazil, Peru and Chile, and the second largest for still more LAC countries.

Pre-feasibility studies are being undertaken for a 19,000 km trans pacific, fiber optic, submarine, cable between China and Chile, a first between Asia and South America and one of the longest in the world. Chile and Bolivia were admitted as members of the Asian Infrastructure Investment Bank.

The IMF forecasts Latin American growth to expand by 1.1 percent in 2017 and 2 percent in 2018, following stagnation in 2015 and 1 percent contraction in 2016. Over the medium term, growth is expected to remain subdued at 2.6 percent. Some of India’s principal economic partners are struggling: Brazil will grow at only 0.2 percent; Chile and Mexico at 1.7 percent; Peru, Colombia and Argentina will do a little better. The good news is that Brazil is expected to grow at over 1 percent in 2018, with lower inflation and interest rates, and economic reforms on the anvil. Much of this will depend on the outcome of the political processes referred to above.

 

 

July 7, 2017

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About the Author

Ambassador Deepak Bhojwani joined the Indian Foreign Service (IFS) in 1978. He retired in February 2012. During his career, he was accredited as Ambassador in seven Latin American countries, resident in Colombia, Venezuela and Cuba, concurrent in Ecuador, Costa Rica, Cuba and the Dominican Republic, and was Consul General in Sao Paulo. He served abroad in three Continents – Asia (Indonesia and Malaysia), Europe (Spain and Czech Republic) and Latin America.

In the Ministry of External Affairs, he served in the Divisions dealing with Administration; West Asia and North Africa; US and Canada; and had a brief stint at the United Nations.

Ambassador Bhojwani also served as Private Secretary to the Prime Minister of India, Mr P.V.Narasimha Rao for two years from 1994 to 1996, and as Special Assistant to the Minister of State for External Affairs and for Science and Technology, Mr K.R.Narayanan, from 1985 till 1988.

He writes extensively on Latin America and its relations with India. He has written a book published in 2015 titled ‘Latin America, the Caribbean and India: Promise and Challenge’.

He is currently a Consultant for Latin America and the Caribbean through his firm LATINDIA (www.latindia.in)

Ambassador Bhojwani also serves as Independent Director on the Board of Bharat Petroleum Corporation Ltd., one of the largest state oil and gas companies of India.

Since January 2017 he has been Country Manager and Director, Magotteaux Industries Pvt. Ltd.

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