Economic Developments - November 2016

At a mega business event on 12-15 September, President Mauricio Macri conveyed the message that Argentina is a country that can be trusted. Projects have been announced, inter alia for exploration and extraction of gold, silver, copper and lithium. Incentives include a 30-year fiscal stability agreement, free transfer of profits, a single exchange system, elimination of the state’s export monopoly and free import of capital goods. Latin America’s third-largest economy, with a gross domestic product of $500 billion, after Brazil and Mexico, Argentina has the second-highest GDP per capita (PPP) after Chile, with $22,600. It has the eighth largest territory in the world, 53 percent arable, favorable conditions for solar and wind power, extensive petroleum, natural gas and mineral reserves.
Brazil and Panama ratified the Paris Agreement on climate change on 5 September. Brazil had agreed at the climate summit in Paris to limit annual emissions of CO2  to 1.3 billion tons by 2025, a reduction of 36.1 percent, and to 1.2 billion tons by 2030. 
An ambitious privatisation program includes concessions for railway projects that have already been built as well as the long-delayed auction of rights in oil fields and hydroelectric plants in the first and second half of 2017; privatisation of six power distributors owned by state-run power holding company Eletrobras and licences to operate airports and roads all over Brazil. 
The state hydrocarbons giant Petrobras, hit by crisis and scandal, announced on 20 September, it would  cut investment by 25 percent over the next three years; unload $19.5 billion in assets, mainly biofuels, liquefied natural gas (LNG), fertilizer units and petrochemical ventures; restructure its power and lubricants business to focus on oil and gas production. It aims to increase oil production from 2.62 million barrels per day (bpd) to 3.41 million bpd by 2021. 
Argentina and Brazil are rushing to open their economies, attract investment and reduce their debt. Nationalism is giving way to pragmatism. Both Presidents visited China to reaffirm its economic importance. They are actively negotiating a free trade agreement with Europe. 
November 4, 2016
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About the Author

Ambassador Deepak Bhojwani

Former Ambassador of India to Colombia, Venezuela and Cuba and Distinguished Fellow, Ananta Centre

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 (

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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