August 1, 2009        www.LatinEPR.com 

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LATIN AMERICA - NEWS BRIEFS

 

 

Media

 

Uruguay Leads LatAm Technology

 

Uruguay has replaced Chile as Latin America’s top technology country, according to the recently published fourth annual Latin Technology Index from Latin Business Chronicle.  The index compares 20 Latin American countries using 2008 technology data from Computer Industry Almanac, the International Telecommunications Union and the Santiago Chamber of Commerce, as well as population data from the IMF and the Population Reference Bureau. 

 

According to the findings, Panama improved the most in the region, becoming the country with the second-highest wireless penetration, while ranking fourth overall.  Neighboring El Salvador replaced Costa Rica as Central America’s leader, while Nicaragua placed among the least advanced.  In fact, although all nations showed some improvement, Cuba and Haiti remained the least developed nations.  Ecuador’s score showed it was the country with the least degree of change.  The index also had winners in individual tech categories: Argentina (wireless); Costa Rica (fixed telecom); Uruguay (PC’s); Chile (Internet); and Uruguay (Broadband).    

 

Tourism

 

Sustainable Tourism For Chile’s Easter Islands

Chile’s Easter Island, also known as Rapa Nui, is the focus of several new sustainable tourism projects which are scheduled to launch in the coming weeks, according to the Santiago Times.  The island, located some 2,100 miles off the coast of Chile, is threatened by a dramatic upturn in tourism traffic, which has grown from under 5000 in 1990 to an annual average of 60,000 today.   Visitors are attracted to the mysterious and monumental Polynesian statues located on the island, and while the archaeological sites, declared a UNESCO World Heritage site in 1995, are under park protection, the island’s ecosystem is beginning to feel the strain of so many new arrivals. 

This has prompted the EuroChile Business Foundation to found the “Integral Management of Tourist Destination Easter Island” project, designed to manage the island’s tourism in a way that is environmentally sustainable while involving the community and making their tourism product internationally competitive.  If carried out responsibly, 289 small local tourism businesses stand to benefit from this project, in turn improving the quality of life for Rapa Nui’s inhabitants.  The initiatives will be coordinated by the Easter Island Tourism Board, the Island’s Provincial Government, the National Forestry Corporation, Sernatur, and the Tarai Henua program.

For its part, UNESCO is launching a sustainable tourism project of its own this August.  UNESCO Director General Koichiro Matsuura has stated the objective of the program as the reduction of negative impact of tourism by balancing the needs for preservation with community development.  The Santiago Times included praise from President Michelle Bachelet, describing the program as a “remarkable initiative” that would help the local community preserve its own heritage.

Shakeup in Brazilian Aviation

The Brazilian Defense Ministry is spearheading a plan that could see airlines operating indefinitely with easy access to credit, as well as double foreign participation in the Brazilian aviation industry, Valor Economico and Reuters recently reported.  The plan would reformulate articles of the Brazilian Aerospace Code, allowing for up 49% foreign participation in local aviation operations, as well as indefinite permit extensions, which would in turn stabilize investment and credit in the sector.  Fernando Soares, head of the civil aviation at the Defense Ministry told Valor that licenses could still be revoked for failures in security or decline in service. 

However, airlines should welcome the news of these potential changes to Brazil’s aviation rules, just as the industry experiences a much-needed upswing.  A Barron’s report recently highlighted the strength of South American airline stocks, listing Brazilian airlines GOL and TAM among the top performing airline stocks in the world.  Indeed, GOL saw load factors rise from May to June, with the airline also recently forming a code-share agreement with American Airlines.  TAM, according to Trading Markets, saw international demand grow in June as well - 18.1% over June 2008 - and an international load factor of 68.3%, 2.8% above the market average.

AeroMexico: First International Airline in New Orleans after Katrina

 

This past month, Aeromexico launched a new non-stop route between Mexico City and New Orleans, marking it as the first international carrier to operate out of Louis Armstrong New Orleans International Airport since Hurricane Katrina (The Times-Picayune).   According to the Picayune report, business and civic leaders were on hand at the ribbon cutting ceremony for the new service, which is expected to boost tourism and commerce opportunities between Louisiana and Mexico, as well as medical-related travel.  The non-stop route will fly six days a week and also connect New Orleans to San Pedro Sula, Honduras, via Mexico City.  Air Canada and Grupo Taca previously operated out of New Orleans, but did not return after the tragic natural disaster, leaving the city isolated without any direct international service.

 

Bolivian Salt Desert a Reluctant Goldmine

 

Bolivia’s Salar de Uyuni, the highest salt desert in the world and a popular tourism destination, is finding itself under threat from enterprising multinational mining companies, the AFP recently reported.  The desert, which has drawn visitors for years with its expanses of white blinding sands, is also home to 5.4 million tons of lithium, about half the world’s total supply and a key to powering modern “necessities” like mobile phones, computers, and soon, electric cars. 

 

The mining wealth of this south Bolivian region could constitute a financial boon for the poorest country in South America, but at the cost of destroying what is considered among South America’s most awe-inspiring spectacles (Lonely Planet).  To say nothing of the impact on the local community that depends on the tourism and considers the desert its own.  According to locals the AFP interviewed, it seems prosperity derived from the mining could not outweigh the pollution, nor did they have full confidence the mining projects would be managed in a way that would see profits trickle down to the community. 

 

However, actual commencement of the mining still seems far off, as President Evo Morales is characteristically reticent about allowing foreign energy interest into the country.  It is possible groups like LG of South Korea and Bollore of France will have to wait and concede to such demands as giving Bolivia a large share of the profits and building the plants locally from scratch.  This, of course, provided Bolivia does not decide to mine the lithium entirely on its own.

 

Economy and Politics

 

Tensions Escalate in LatAm Arms Deals

 

The Colombian and Venezuelan governments found themselves embroiled in not one but two international confrontations this past month, following a series of military agreements that have led to what some media sources are characterizing as Cold War-era stand-offs.  The first incident took place in the second half of July, when Venezuela reacted negatively to Colombia’s recent military agreement with the US, which allows the US to use Colombian military camps to fight drug trafficking.  Venezuela responded by purchasing over $2 billion in aircraft, helicopters, and tanks from Russia, according to UPI.  President Chavez went further, by accusing the US, Colombia, and Israel of forming a power triangle aimed at destabilizing the region. 

 

Immediately following these statements, Venezuela was itself scrutinized by Sweden, which discovered Swedish-made anti-tank weapons sold to Venezuela in the 1980’s in the hands of Colombian rebels during a recent FARC camp raid.  In the last months of 2008, Chavez had begun distancing Venezuela from the Colombian paramilitary group, in the midst of several hostage crises and the much publicized release of Ingrid Betancourt.  The Swedish weapons now re-links Venezuela to the FARC, and has started a blame game between Colombia and Venezuela that has led to frozen relations, with the Venezuelan ambassador and staff being recalled from Bogota. According to UPI, Chavez has also threatened to take over Colombian companies in the country and suspend billions in trade.  While politically formidable, these moves would hardly benefit the Venezuelan people – Colombia is Venezuela’s main regional partner and important supplier of food.

 

Perhaps more worrying are figures from London’s International Institute for Strategic Studies, quoted by UPI, which show that military spending in Latin America and the Caribbean rose 91% between 2003 and 2008, from $4.7 billion to $47.2 billion.  Venezuela, Colombia, Brazil, and Chile were the main spenders, although the secret nature of many transaction means accurate figures cannot be entirely determined.

 

OAS and ALBA: Abbreviating Latin America

 

Many may have come across the OAS in the news recently, for its decision to readmit Cuba after a 47-ban or for its involvement in the Honduran crisis.  But many might be left wondering, what exactly the OAS is, apart from one more in an increasing number of acronyms that dominate our modern world?  Or ALBA, for that matter, of which Ecuador became an official member this June?  Here’s a quick look:

 

OAS: Organization for American States

 

Founded in 1948, this 35-member country international organization aims at regional solidarity by addressing such issues as democracy, human rights, free trade, and sustainable development.  It is the body which organizes the Summit of the Americas and runs the Inter-American Court of Human Rights.  But despite the positive objectives of its charter, the OAS frequently faces criticism. 

 

Last month it came as the organization’s voted to reinstate Cuba.  The Human Rights Foundation, on learning of the possibility of such a move, immediately released a statement that condemned the OAS’s embrace of a country (Cuba) which continues to persecute political dissidents.  The OAS is also criticized for its weak attitude toward Venezuela.  This month, Caracas Mayor Antonio Ledezma arrived at the Caracas headquarters of the OAS, declaring himself on “infinite hunger strike” to protest against “the grave situation of democratic instability in Venezuela” (Poder). 

 

The OAS role in the Honduran crisis, moreover, has reaffirmed a level of ineffectiveness, as the interim government ignored every call from the OAS to step down.  In an article for Real Clear Politics, Alvaro Vargas Llosa (himself recently targeted by the Venezuelan government) argues that the OAS will continue to be powerless, as long as it fears the member countries it is designed to reign in.  Vargas Llosa incants the spirit of erstwhile Venezuelan President Romulo Betancourt, who warned against siding with despotic governments and instigated the exclusion of Cuba so many decades ago.

 

ALBA: Bolivarian Alliance for the People of Our America 

 

Interestingly, many of the governments which have either come under question as dictatorial regimes or have experienced political turmoil in recent months belong to another organization, known as ALBA (Bolivarian Alliance for the People of Our America), which in Spanish means ‘dawn’.  ALBA was originally established as a trade alliance between Venezuela and Cuba in 2004, but has expanded to include Bolivia, Nicaragua, Dominica, and Honduras, as well as most recently, Antigua and Barbuda, Saint Vincent and the Grenadines, and Ecuador.  ALBA is at its heart not so much a trade liberalization pact as an agreement based on a common vision of social welfare, bartering, and mutual economic aid.  In that regard, it has made important strides, such as Cuba equipping some of Venezuela’s poorest states with medical staff and thousands of teachers.

 

However, proposals like the implementation of a new regional currency, the SUCRE, in tandem with calls for regional independence, highlight the difference between ALBA and other trade organizations like Mercosur, which operates alongside and often in cooperation with NAFTA (North American Free Trade Agreement) and the European Union.  ALBA’s increasing separation from outside international interests is another blow to the OAS’s sphere of influence.  But where political leanings must be accepted as part of a nation’s sovereignty, the increasingly antagonistic attitude of countries like Venezuela, Cuba, Honduras, and Ecuador towards press freedom and freedom of speech in general (as addressed in our last newsletter), is one regional pact that ought to raise some concern, and not just with the OAS.

 

General Interest

 

LatAm Heads Seven Wonders of Nature Contest

 

Latin America featured heavily with five nominations, when the 28 finalists of the New Seven Wonders of Nature Contest were announced this July.  Among the finalists to be short-listed are the Amazon, Iguazu Falls (Brazil and Argentina), the Galapagos Islands (Ecuador), Salto del Angel (Venezuela), and El Yunque (Puerto Rico).  Like last year’s New Seven Wonders of the World contest, this project is managed by the New7Wonders Foundation, which seeks to undertake documentation and conservation of monuments worldwide, as well as promote awareness of our cultural and natural heritage.  The New7Wonders Foundation has partnered with the UN in its efforts, and encourages a variety of ‘Seven’ campaigns on its website.  The official Seven Wonders of Nature are chosen via global internet vote, with the winner to be announced in 2011. 

 

Costa Rica is Happiest Country

 

Costa Rica is the happiest nation on Earth, according to the “Happy Planet Index”, compiled by the New Economics Foundation (NEF), while another eight Latin American and Caribbean nations placed in the top ten.  The list, the second since 2006, is intended to measure progress by different means than the traditional economic indicators, although the results of this year’s index, which includes nations that struggle significantly with poverty, have surprised even the NEF researchers (BBC).  The rankings are based on life expectancy, polled responses to life satisfaction, and a country’s ecological footprint.  Costa Rica surpassed wealthier nations by a significant margin in the areas of life satisfaction and ecological footprint. 

 

Costa Rica is followed in the ranking by the Dominican Republic, Jamaica, Guatemala, Colombia, Cuba, El Salvador, Brazil, and Honduras (Vietnam is the only non-LatAm country at #5).   Researchers explain Latin America’s dominance by citing a set of cultural values in the region that places family, community involvement, and religion above material issues.  Of the G8 countries, Britain placed 74th and the US 114th.  Although the ranking has its detractors, some of the index’ findings should not be dismissed, particularly in regards to ecological footprint.  For example, wealthy nations Luxemburg and the United Emirates should be alarmed by the fact that, though rather small in size, they have the largest footprints in the world.  According to the NEF rating system, these nations use around ten times the resources their populations warrant – in other words, ten times their share of the world’s resources.  The US uses 9.4 times their share.  By comparison, the Netherlands uses only four.  All LatAm nations that placed in the top ten, apart from Costa Rica (2.3) and Brazil (2.4), use less than two.