Despite reforms, Brazil and Mexico lack energy investment

December 6, 2013

Financial Post, 12/4/2013

Oil barrelsBoth Brazil and Mexico’s traditional and renewable energy sectors are expected to grow, if they can continue to make positive policy reforms and attract the necessary investment. In 2012, Latin America and the Caribbean claimed only 6% of the world’s investment in renewable energy – the majority of which went to Brazil and increasingly Chile – but analysts at the Inter-American Development Bank claim that the region is the “new frontier“ for clean energy investment.

If the region is to live up to these high expectations, its energy-rich countries must raise capital to the tune of $430 billion to fully develop its clean energy resources. They must continue to pass reforms that will make private investment more lucrative, and thus more attractive, to hesitant energy companies – who have the capital and the expertise the region needed to develop their shale and deep-sea reserves, as well as their green energy.

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Advisers Take Long-Term View on Latin America

November 21, 2013

Latin_America2The Wall Street Journal, 11/21/2013

Even though Latin America has been a laggard among developing markets this year, some advisers are convinced the resource-rich region is poised for a turnaround.

But instead of investing once again in Brazil–the 800-pound gorilla in the group–contrarian portfolio managers are finding smaller markets in Mexico and Chile as better bets to tap into Latin America’s long-term growth.

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Brazil and Mexico, where political risk still rules

October 8, 2013

Expert Take

 The Financial Times, 10/07/2013

Guest Post by Larry Brainard of Trusted Sources 

On a two-week visit to Brazil and Mexico last month I had an opportunity to test claims that Mexico had leapfrogged Brazil as the most dynamic economy in Latin America. I found that political risk is still the key to each country’s prospects and that a simple answer to who is ahead of whom is unattainable.

In Brazil I found no shortage of pessimism about President Dilma Rousseff’s management of the economy, but I returned home more optimistic because the possibility that Dilma will fail to be re-elected next October is growing. In particular, political dynamics have been upset by the alliance between the environmentalist Marina Silva and Eduardo Campos, governor of Pernambuco state and the president of Brazil’s socialist party.

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Mexico swoons and Brazil rallies in response to US shutdown

October 8, 2013

Flag-Pins-Mexico-BrazilThe Christian Science Monitor, 10/07/2013

The US government shutdown is rippling across Latin America, seesawing regional economies as markets and analysts take toll of the immediate and long-term impacts from the crisis in Washington.

Mexico and Brazil, the two largest economies in Latin America, saw their currencies swing in opposite directions last week as the US inched closer to a default. The Mexican peso fell to a month-low on concerns over weakened US demand for Mexican goods, while the Brazilian real rallied on speculation that the shutdown would prolong the US Federal Reserve’s stimulus program that has pumped cheap dollars into emerging markets.

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Frenemies unite? Brazil strengthens ties with Mexico through investment.

October 3, 2013

brazil flag -- brick wallThe Christian Science Monitor, 10/03/2013

Brazil’s Odebrecht plans to invest $8.1 billion in Mexico’s infrastructure in the next five years (Reuters,FT).

Brazil hasn’t invested much in Mexico previously. Since 1999, Brazilian companies have only invested $1.2 billion total including $61.3 million last year. The Odebrecht, [which works in fields including construction, chemicals, and engineering], investment by itself will be an increase by an order of magnitude in the economic links between the two countries.

So, even as short term economic news about both Mexico and Brazil appears to be pessimistic (confounding the whole Mexico vs Brazil debate), this investment is good news for both and a big bet on each other.

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Brazil’s Odebrecht bets on Mexico, eyes oil reform

October 3, 2013

Flag-Pins-Mexico-BrazilReuters, 10/03/2013

Brazilian conglomerate Odebrecht has an $8.1 billion investment plan to expand in Mexico’s petrochemical and infrastructure sectors, the chief executive of its Mexican business said on Wednesday. “We expect strong growth in Mexico in the next few years,” Luis Weyll, chief executive of Odebrecht’s Mexican operation, told Reuters in an interview.

However, Odebrecht SA , which had global revenue of $41 billion last year, has no plans yet to take part in any opening of Mexico’s energy sector, preferring to watch from the sidelines as the government tries to overhaul the oil industry.

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Mexico, Brazil education laws may be historic

September 18, 2013

Miami Herald, 9/18/2013

education - children poverty - EcuadorIn simultaneous moves that went almost unnoticed in the rest of the world, Mexico and Brazil passed historic education reforms last week that, if carried out as planned, could help propel Latin America’s biggest countries to the First World in coming decades.

The key question is whether the Mexican and Brazilian people will keep up the pressure on their governments to improve the quality of their educational systems, because politicians will only enforce rules that are opposed by teachers unions if they feel social pressure to do so. Mexico and Brazil’s new education laws are historic, but the battle to achieve world-class education systems is just beginning.

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JPMorgan: Bullish On Latin America, Ultra Bullish On Mexico’s Energy Reform

September 13, 2013

Forbes, 9/13/2013

drawing bar chartA lot has changed south of the U.S. border in the past decade, with countries like Brazil and Mexico seeing their economies expand dramatically on the back of rising imports and improving terms of trade, courtesy of a weaker dollar and an ever hungry China, both literally and metaphorically.  Brazil is now a $2.4 trillion economy, the eighth largest in the world, while Mexico’s GDP climbed to $1.8 trillion last year, the twelfth biggest.

Mexico, is where the biggest opportunities arise.  Beyond the economic recovery in the U.S., Mexican President Enrique Peña Nieto is pushing forth with market friendly reforms that “have significantly changed the country’s GDP potential.”  Beyond education reform, fiscal reform, and a reduction in union power, Peña Nieto is putting his weight behind an all-important energy reform that will see state-owned oil giant Pemex open up to foreign investment.  Oil production has plummeted as Pemex has failed to make substantial new discoveries, while global firms are increasing output in the U.S. side of the Gulf of Mexico.  Shale and other unconventional oil could lead to further riches.

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Obama promises NSA spy probe, says Mexican leader Pena Nieto

September 6, 2013

BBC, 9/6/2013

President Obama visits Mexico President Enrique Pena NietoUS President Barack Obama has promised to investigate allegations that the National Security Agency (NSA) spied on his Mexican and Brazilian counterparts, Mexico’s leader has told the BBC.


President Enrique Pena Nieto said if the claims were true, Mr Obama had pledged to impose suitable penalties. The allegations were made by a journalist who obtained secret files from fugitive US leaker Edward Snowden. Brazil said if proven they were an unacceptable violation of sovereignty.

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Brazil, Mexico summon U.S. ambassadors over espionage reports

September 3, 2013

mexico-usa-flag-montageCNN, 9/3/2013

Brazil and Mexico summoned U.S. ambassadors Monday after media reports that the United States had spied on their countries’ presidents.

“Without prejudging the veracity of the information presented in the media, the Mexican government rejects and categorically condemns any espionage work against Mexican citizens in violation of international law,” Mexico’s foreign ministry said in a statement.

In Brazil, Foreign Minister Luiz Alberto Figueiredo called the situation “an inadmissible and unacceptable violation of Brazilian sovereignty.”

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