Yes, this is sort of a long way away from Australia, but it does provide a bit of a model for future thinking here in Australia. Plus, the Canadian Council for the Americas has a superb group of speakers lined up for what looks like a fascinating discussion. Something to look into if you happen to have a trip scheduled for the Northeast of North America.
The CCA is pleased to announce that we will be Knowledge Partners at the Toronto Global Forum. The CCA will moderate a panel on Americas issues (details to follow in the coming days).
TORONTO GLOBAL FORUM DETAILS
The International Economic Forum of the Americas presents the 6th annual Toronto Global Forum. The next edition of the Forum will take place on October 2nd and 3rd, 2012 at the Metro Toronto Convention Centre under the general theme of “Leading Economic Change”. Former US Secretary of State, James Baker, will be among the keynotes on the occasion of the 25th anniversary of the Canada-US Free Trade agreement. Over the years, the Toronto Forum has become a strategic platform for discussions and corporate insights into the global economy, with significant local, national and international media participation. The event brings together senior level decision makers in business, diplomacy and public policy from across the world. This year’s forum will focus on Finance, the Global Economy, Natural Resources, Mining and Infrastructure.
Highlighted speakers at the 2012 Toronto Global Forum include:
• Jorge Quiroga, Former President, Republic of Bolivia
• Ana Maria Carrasquilla, President, Fondo Latinoamericano de Reservas (FLAR) (Colombia)
• Matheus Cotta de Carvalho, President, Banco de Desenvolvimento de Minas Gerais S.A. (Brazil)
• Jorge Corvalan, President, Central Bank of Paraguay
• Janice Brewer, Governor, State of Arizona
• Salvador Escobedo, Founder and Managing Partner, Solam Group (Panama)
• Tomas Malaga, Chief Economist, Itau Private Bank International (Brazil)
• Enrique S. Mantilla, Chairman, Argentine Chamber of Exporters (Argentina)
• Aram Shishmanian, CEO, World Gold Council
• Leonardo illar, Executive Director, Fedesarrollo (Colombia)
For more information please consult the Toronto Global Forum website at forum-americas.org/toronto or contact Mr. Neal Poku at 1 416 607-5422 ext. 207.
The Paraguayan senate must be feeling a bit like the caged lions and tigers currently stuck in customs limbo on the border with Argentina. It was holding the power of entry or exclusion over Venezuela’s membership application to Mercosur, but lost it after a remarkably opportunistic impeachment of president Fernando Lugo earlier this year. Now, like a big cat trapped in a cage, it is roaring through the bars of its political confinement, finally voting on and rejecting Venezuela’s application to join Mercosur.
Bolivia has a long history of producing the commodities that the world wants, but not gaining much from their export. (For a sense of the problem, take a look at the book “From Silver to Cocaine. Latin American Commodity Chains and the Building of the World Economy, 1500-2000“). The latest twist in this pattern is the Bolivian government’s decision to not so much nationalize vast swathes of the country’s resource extraction industry as change the contract terms so that Bolivia becomes a more important partner and more processing of the resources takes place in Bolivia. Is it working? To some extent, according to an interesting blog entry from the Financial Times. Bolivia is growing well and investment is still flowing in. It is a very interesting new public policy experiment that seems to have antecedents in Brazil’s (non)privatized major resource companies.
Is Dilma privatizing vast swathes or the economy, or is she not? The messaging is confused. A useful article from Reuters draws together some of the commentary being published in Brazil to explain why Dilma is taking such as schizophrenic attitude towards the private sector and infrastructure.
Elsewhere there are interesting changes afoot in the fiscal structure for financing new infrastructure. New monetary changes will now allow the various banks in Brazil to issue Letras Financeiras, which are medium and long-term debts below current market rates. These financial instruments are intended for financing public-private-partnership style infrastructure development and outright private infrastructure ventures.
Irrespective of your personal take on what happened in Paraguay to oust Fernando Lugo from the Palacio de López, it does appear that his successor Federico Franco is taking the job of president very seriously. Boston.com is reporting that Franco has succeeded in pushing through a number of key policy items that have alluded previous presidents.
- Paraguayans earning more than US$4,000 a month are now going to have to pay income tax, which is a major change for a country that previously had no personal income tax in place.
- Vague suggestions of progress on land reform and security provision in the north are mentioned.
- Franco is also pushing talks with Rio Tinto/Alcan to build an aluminum smelter.
While Yves Engler has deplored the aluminum project as an example of something akin to Canadian imperialism, these sort of reactionary ideological readings fail to account for Paraguay’s abject failure to use its hydroelectric potential for national development. The $3.5 billion project represents the first serious attempt to use Paraguay’s massive electricity surplus from the Itaipu dam as a boon to national development rather than as a de facto gift to Brazil. Fox News (yes… a right wing ideological network as a counter to Engler is possibly not good form, but look at the data points in the link, not the invective, or try UPI for something similar) is reminding us that under the Itaipu treaty Paraguay has to sell from the dam that it does not use to Brazil at the very low rate of $25/MWh. Paraguay gets 50% of the binational project’s output, but only uses a scant 14%. Although Engler is right that the price being floated to Rio Tinto / Alcan is still low, but at $43/MWh is nearly twice what Paraguay is earning now. More to the point, the smelter project offers a possibility of industrial development and economic expansion that has simply failed to appear after two decades in the trade bloc Mercosur. This is the same bloc which suspended Paraguay’s political rights after Lugo’s impeachment, but left trade (and presumably energy trade) rights in place.
What Franco is doing is an important step for Paraguay. The aluminum project is a Major deal for Paraguay and a significant headache for Brazil, which relies on cheap Itaipu surplus electricity to keep the lights on in São Paulo. Even so, Brasília will likely happily deal with this headache if it will help bring further stability to Paraguay.
The stability and democratic consolidation question remains the big one in Paraguay. A presidential election date of 21 April 2013 has now been announced. More importantly, Franco has been crystal clear that he will honour the constitution, which precludes a president from ever running for reelection. So far there are no indications that Franco will follow some other regional leaders and look for favourable readings of the constitution or new magna cartas to allow a reelection bid. This leaves the question of whether or not Franco will use his position to ensure that the 2013 vote takes place without any of the explicit and implicit spending sprees and manipulations that have formed the backdrop to ballots since Andrés Rodriguez was quickly elected in 1989. We will be watching.
A neat little piece in The Monocle on José Mujica. The modesty, humility and clear thinking of the Uruguayan president offers a very interesting and positive model for the Americas, and one that is quietly being noted. Take a look at the The Monocle’s short piece for a brief introduction to José Mujica.
ANCLAS senor associate Sean Burges has an op-ed in today’s The Australian setting out one of the possible reasons behind Ecuador’s decision to grant Julian Assange asylum.
Burges argues that Ecuadorian president Rafael Correa is engaging in a diversionary political tactic. Upsetting the UK and the US carries remarkably little cost for Ecuador, but the noise it makes helps burnish Correa’s credentials as a latter-day David standing up to the imperial Goliaths of the UK and the US. This helps Correa keep his domestic political base happy so that he can continue pursuing the transformative political and economic policies that are being resisted by Ecuador’s media-owning traditional power elite.