Economic Developments - March 2017

IMF assesses that Latin America’s economy will grow just 1.2% in 2017: Brazil (0.2%); Mexico (1.7%); Argentina (2.2%); Chile (2.2%) and Peru (4.3%). Venezuela’s GDP will shrink further.
 
UNCTAD figures show that despite a fall in foreign investment in Brazil from $65 billion in 2015 to $50 billion in 2016, it was ranked 7th, ahead of India in 8th place with $42 billion ($59 billion in 2015). Brazil’s Central Bank estimated FDI in 2015 at $75 billion and in 2016 at $78.9 billion. This is despite a recession in Brazil for two successive years. The Inter American Development Bank reported a rise in remittances by 8 percent to $70 billion to LAC in 2016. The principal recipient was Mexico with $27 billion.
 
The Trump’s effect on Mexico’s economy led to Ford cancelling plans to set up a $1.6 billion plant in Mexico. General Motors and Chrysler also shied away from commitments, apprehensive over the threat of US tariffs on cars made in Mexico. 85 percent of Mexico’s exports go to the United States.
 
Brazil’s giant infrastructure engineering conglomérate Odebrecht, the focus of the political scandal that felled the sitting Brazilian president last year, has been involved with high officials in other countries, including former Peruvian President, Alejandro Toledo. Prosecutors from 11 LAC countries agreed to jointly investigate allegations. Odebrecht, which agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland, is seeking deals with prosecutors in Argentina, Colombia, Ecuador, Mexico, Panama, Peru, the Dominican Republic and Venezuela, if restrictions blocking it from doing business are lifted.

 

 

March 14, 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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