Credit Inphographics IMFdirect

“There’s no doubt that with the growth of China, we’ve seen a re-commoditization of Latin America,” said Colombia’s Mining Minister Mauricio Cárdenas, an economist and former Director of the Latin America program at the Brookings Institution in Washington DC.

In terms of economic development, Latin America did not take any advantage of the rising prices of  commodities -raw-materials-  , which prices nearly tripled from 2000 to 2010.

In that sense, Latin America’s share of global merchandise trade remained the same (5.7 %), and service exports  fell to 3.4 percent from 3.9 percent.

It is difficult to do business in Latin America.  The World Bank´s 2012 competitiveness ranked Brazil -the region’s biggest economy- as No. 126 out of 183 countries.

READ MORE HERE.

In short, the continent’s decade-long boom may be ending. According to the U.N.’s Economic Commission for Latin America and the Caribbean (ECLAC), Latin American growth, which topped 6% last year, will slow to 4.3% this year and 3.7% in 2012. Brazil’s economy, the region’s largest, actually flat-lined in the third quarter; Argentina’s scorching growth of 9% this year will be halved to 4.8% next year, and capital flight is expected to be robust. Mexico’s growth, meanwhile, will drop from 4% to 3.3%.

That’s hardly doomsday news, but it’s one reason the Montevideo summit’s main action was to raise protective import tariffs…READ MORE HERE

The IMF’s latest Regional Economic Outlook: Western Hemisphere sheds light on Latin America’s reliance on commodities from a historical perspective.  A study conducted by Gustavo Adler y Sebastián Sosa  also looks at the effect of a sharp decline in commodity prices on emerging market economies and on the policies that could shield countries from that shock. READ  MORE HERE

The Americas Post - That isn't the Exxon Mobil logo on the side of that storage tank

Venezuelan President Hugo Chavez announced on Sunday that his nation will not recognize any decision by a World Bank tribunal in a multibillion-dollar arbitration case against Exxon Mobil Corporation.

Exxon has called Venezuela before the World Bank’s International Center for Settlement of Investment Disputes, or ICSID, demanding $12 billion in compensation for nationalization of the Cerro Negro oil project by Chavez in 2007.

“I tell you now: we will not recognize any decision by ICSID,” Chavez said in a televised speech.   He repeated accusations that the U.S. oil producer has used unfair practices to rob the South American OPEC member of its resources.

“They are immoral … How much could they steal in 50 years? Who would dare launch this madness without any foundation?  They wanted $12 billion. From where?” he said.

“We are not going to bow before imperialism and its tentacles, understand that … They are trying the impossible: to get us to pay them. We are not going to pay them anything.”

Exxon declined to comment.

Some interpreted the statement to mean Venezuela would reject rulings in the 20 other cases pending before the World Bank’s tribunal, responses to multiple state takeovers in recent years.  They include separate multi-billion dollar claims filed by another U.S. oil company, Conoco Phillips.  Two statements issued later however, by Venezuela’s Petroleum and Mining Ministry and by its state oil company PDVSA, only mentioned the Exxon case.

Last week an arbitration panel at the International Chamber of Commerce, awarded Exxon $908 million in a separate case about the Cerro Negro nationalization.  On Saturday, Venezuelan Oil Minister Rafael Ramirez said he did not expect a verdict in Exxon’s World Bank case before the end of this year.

Both cases are being monitored by the industry for precedents in future disputes between companies and producing states, which have demanded a larger share of oil profits as prices increase and new reserves grow scarce.

For years, Venezuela’s socialist president has accused foreign oil companies of looting that nation’s resources, while still maintaining close ties with many of them.

Exxon says the World Bank case is to compensate for its assets, and experts say it could result in a larger award.  The government has insisted Exxon receive only slightly more than the $750 million it said was invested in the project.  In September, Venezuela offered to settle for $1 billion.

For years, Chavez has hit oil companies with tax hikes and contract revisions  to fund public anti-poverty programs.

Venezuela’s push for more control over its oil has been emulated by other producing nations.  Critics say it has scared investors away from that country and reduced production volume.  Regardless, some companies remain eager to invest in Venezuela’s Orinoco extra heavy oil belt, one of the world’s largest untapped reserves of crude.  Chevron and Spain’s Repsol both signed deals in 2010 for new projects there.

The Americas Post - Chinese Vice President Xi Jinping is Hugo Chavez' new best friend.

Venezuelan President Hugo Chavez claimed this week that China may replace the U.S. as Venezuela’s leading trade partner, thanks to a strategic alliance between those two nations.

Chavez said that commerce between Venezuela and China has reached $20 billion this year, up from $600 million a decade ago, and is now growing by $2 billion per year.

Trade between the United States and Venezuela is running $33.5 billion so far this year, according to the U.S. Dept of Commerce.

Chavez has always been at odds with Washington, and trade between the two neighbors is expected to remain stagnant until a long-running diplomatic conflict is resolved.  The U.S. embassy in Caracas has not had an ambassador since July 2010, when Chavez rejected U.S. nominee Larry Palmer, accusing him of disrespect towards his government.  Washington revoked the visa of the Venezuelan ambassador in retaliation.  Venezuelan Foreign Minister Nicolas Maduro said on Tuesday that diplomatic relations with the United States are frozen and he sees no immediate solution to the dispute.

Chavez, a frequent critic of U.S. President Barack Obama, says growing ties with China are crucial for his country’s development.

“I believe it’s possible … not just in Venezuela, but also in Latin America,” said Chavez, speaking at a news conference.

China has become Venezuela’s largest foreign lender in recent years.  Last month, Chinese officials signed $6 billion in new loans to improve the South American country’s oil industry.  The Asian giant had already promised over $32 billion in loans. Venezuela, in turn, is ramping up oil shipments to China.

The injection of Chinese cash has helped Chavez  boost spending ahead of next year’s presidential election.

The United States remains the main consumer of Venezuelan oil.

The Americas Post.- Air cargo screening process will be simplified.

Under a new pilot program, U.S. Customs and Border Protection (CBP) the entry process for air cargo  is designed to reduce the number of customs holds that delay air cargo and help give shippers a better idea of when they can take possession of their goods

Already starting in December, importers or brokers of air cargo will only have to provide thirteen data points and three optional pieces of information, instead of the current twenty-seven.

The new process, dubbed the “Simplified Entry Pilot,” is designed to…READ MORE HERE

The Americas Post.- Alleged Pirates detained in Gulf of Aden by U.S. Marines of USS Anzio.(Combined Maritime Forces photo/Released)

Specially in Somalia´s waters, pirates are increasingly turning to kidnapping and hostage-taking to generate funding to purchase weapons and continue operations.

As a comment to a recent statement of the United Nations, the Assistant Secretary Andrew Shapiro at the State Department Bureau of Political-Military Affairs said that there has been a decline of piracy attacks during 2011because of security steps taken by commercial vessels traveling in high-risk areas.

While speaking during a Defense Conference earlier this month, Shapiro said the U.S. had recently helped Somalia establish a national policy encouraging countries to allow their commercial ships sailing in high-risk waters to carry armed security personnel on board.

“The reason for this is simple: to date no ship with an armed security team aboard has been successfully pirated,” he said. “We have recently demarched countries to permit the use of privately contracted armed security personnel on commercial vessels.”

Shapiro said the State Department is working with countries to make it easier for privately contracted security personnel to transit foreign ports with weapons intended for the self-defense of ships, like f.e. in the Suez Canal. READ MORE HERE

The Americas Post - Mexicans appreciate fine German workmanship

The factory of German arms manufacturer Heckler & Koch was raided on Thursday by some 300 German agents, on suspicion of bribery related to the sale of weapons to Mexico in 2005.

Authorities in Stuttgart confirmed that the search, which included the homes of some employees, was for evidence of bribes paid to Mexican officials for approval of arms contracts over several years.  The accusations include some German officials who prosecutors allege were also bribed.

For years investigators have suspected the German company of exporting arms to four states in Mexico “with violent internal conflicts”, in violation of German law.  Authorities did not specify who the recipients of the weapons were.  In January the Economics Ministry suspended all exports from that factory to Mexico.

Heckler & Koch was previously accused of violating an embargo on arms exports to Libya.  The company has always denied any role in illegal sales, but declined to comment on the latest accusations.

Other current customers include the German police and military, as well as other NATO countries.

The Americas Post - It looks like these two presidents are back on speaking terms.

Bolivia and the United States on Monday announced the end of their three-year stalemate, with the signing of a “framework agreement” to re-establish diplomatic relations.

Bolivian president Evo Morales in 2008 expelled the US ambassador and DEA agents, accusing them of supporting conspiracies by his conservative opposition.  Washington soon reciprocated by inviting the Bolivian ambassador to leave as well.

The agreement signed this week calls for “the rapid return of ambassadors to Washington and La Paz”, marking a clear thaw in the standoff between the two nations.  It also called for “a more productive collaboration for the benefit of our two peoples” according to a press release from the Bolivian chancellery, which did not mention specific dates.

“The objectives of the agreement included strengthening and deepening bilateral relations with respect for the sovereign states and their territorial integrity”… (and) “support effective cooperation against production and trafficking of illicit narcotics, based on shared responsibility”, the declaration said.

Both countries agreed to “strengthen commercial relations”, the document added.  It did not specify whether this implied negotiating a free trade agreement, which has been rejected several times by President Morales.

This agreement has been in the works since early 2010, with delays caused by various mutual accusations between both countries and friction following a recent march by Bolivian Indians, which Morales said was supported by US embassy officials.

Humala still has something to smile about

Approval ratings for Peruvian president Ollanta Humala declined 3% in October but remained at a relatively high 62% as the new head of state nears the end of his first 100 days in office, according to a poll by firm Ipsos Apoyo.

The numbers seem to indicate that Humala’s center-left policies and promises to reach out to the poor while re-establishing investor confidence are giving fruit.

The retired military officer is approved of by 59% of Peru’s richest voters and 56% of the poorest, which his popularity among the middle class is running over 60%.  The survey, published in the daily newspaper El Comercio, indicated that voters believe Humala to be following through on his campaign promises and fight against corruption.  Before elected, he had promised new social programs to support the one-third of Peru’s populace that lives in poverty.

Some programs are already taking effect, including an increase in the minimum wage.  Others, such as a pension for those over 65, will begin before the end of the year in some parts of the country.

Humala obtained congressional approval to raise bonuses and taxes in the mining industry, which accounts for 60% of Peru’s exports.  Analysts say the challenges of a battered global economy will continue to be a challenge for his economic goals during the coming year.

The remaining 22% of those polled who disapprove of Humala’s performance has increased by 4% from the prior poll.  The latest study, conducted among 1,200 people from October 12-14, has a 2.8% margin of error.

Ahmadinejad visit cancelled "for health reasons"

The Venezuelan government announced Friday that a planned visit from Iranian president Mahmoud Ahmadinejad has been suspended while president Hugo Chavez recovers his “full health” after recent cancer treatment.

Chavez, who returned from his fourth and last chemotherapy session in Cuba on Thursday, last week announced the visit would follow Ahmadinejad’s visit to the UN General Assembly.

Venezuelan chancellor Nicolas Maduro announced the postponement at the closing of a joint Iranian/Venezuelan working group that evaluated nine cooperation accords between the two countries.

“Upon the full recuperation of president Hugo Chavez, in the coming weeks or months we hope to have our dear brother president Mahmoud Ahmadinejad back”, Maduro said.

The suspended visit would have been the first since the US sanctioned Venezuelan state oil company PDVSA for doing business with Iran in violation of an international embargo, a move that the Chavez administration described as a new aggression by “the empire”.

The two presidents, both fierce critics of Washington, have developed more political and economic ties in recent years.  Chavez, who plans to run for re-election in 2012, had surgery in Cuba to remove a tumor in June.

The arms business has stopped booming

Activity in the global arms trade declined 38 percent last year, according to a report released by the US Congressional Research Service.  Sales dropped from $65.2 billion in 2009 to $40.4 billion, the lowest level since 2003.

In spite of its financial crisis the US continues to lead the pack with 57.2% of the market, far ahead of second-place Russia with 19.3%.  The other top arms-exporting countries in descending order include France, United Kingdom, China, Germany and Italy.

The document, considered one of the most detailed reports available to the public, said that developed countries account for the majority of the global arms trade.  Developing countries that export the tools of war were led by India, followed by Taiwan, Saudi Arabia, Egypt, Israel, Algeria, Syria, South Korea, Singapore and Jordan.

Author Richard Grimmett attributed the reduction to uncertainties in the global economy.