Brazil in Davos: President Bolsonaro will defend reforms and trade liberalization

Photo: Adriano Machado - Reuters

The Brazilian President Jair Bolsonaro will outline his government’s economic reform agenda and plans to increase trade with the rest of the world during his speech at the World Economic Forum’s Annual Meeting in Davos today.

Bolsonaro, a far-right former Army captain who took office on Jan. 1st vowing to end years of graft and crack down on violent criminals, will also pledge to lower rampant bureaucracy in Brazil, which many view as a drag on the country’s stuttering economy.

Bolsonaro’s 40-minute speech is scheduled for Wednesday, and he will also highlight efforts to simplify the economy, while pledging to give legal certainty to investors and defend the rule of law.

Bolsonaro is also expected to comment on the situation in neighboring Venezuela, which is undergoing an unprecedented crisis and growing international pressure against the regime of President Nicolás Maduro.

A long-standing critic of Maduro, Bolsonaro has ruled out military action to overthrow the current government, but said last week that a solution for Venezuela will come “briefly,” without giving details of how that would happen.

On his return from Davos, Bolsonaro will settle on a model for its pension reform proposal, his chief of staff, Onyx Lorenzoni, said on Tuesday.

Sources: Agência Brasil, Reuters

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Political Analysis Serie - Pre-salt auctions and oil sector in Brazil: opportunities and risks

Photo: Repsol Agency

The Overview

Very recently, on June 7, the Brazilian National Oil, Natural Gas, and Biofuels Public Agency (ANP, in Portuguese) sold three of the four blocks offered as part of the fourth pre-salt auction. Bonuses added up to US$ 807,7 million. The deep waters pre-salt oil reserves discoveries in Brazilian coast are among the most important made in the world over the last decades.

The most coveted block and the first to be won — called “Uirapuru”, on Santos basin — was won by a consortium formed by the Brazilian State-owned Petrobras (30%), Portugal’s Petrogal (14%), Norway’s Statoil (28%), and ExxonMobil (28%). The bid surpassed the 22,18% minimum set for the auction. The premium stood at 240,3%. The signing bonus was US$ 679,5 million.

Brazilian authorities stated that with a profit oil of 75,49% for “Uirapuru” block, the Brazilian Government is likely to receive 90% of the project’s net revenues. These are values hardly ever seen, including in auctions for blocks in the Middle East. Deducting companies’ investments and costs of the projects’ net revenues, 90% will go to the Brazilian Treasury.

Also located on Santos basin, the “Três Marias” block attracted two bidders. The winning consortium is formed by Shell Brasil (40%), Chevron Brazil (30%), and Petrobras (30%). In turn, the “Dois Irmãos” block, on Campos basin, was won after a single bid by Petrobras (45%), BP Energy (30%), and Statoil Brasil O&G (25%), with a zero premium and a percentage of 16,43% of oil handed over to the government. The signing bonus stood at US$102,56 million. On the same basin, the “Itaimbezinho” block got no offers.

ANP has set the deadline for the payment of signing bonuses for September 28. The bonus is based on the market’s expectations on the production potential of the blocks on sale and the degree of competitiveness in the area auctioned. Contracts are to be signed by November 30.

In all, the Brazilian Government expects to receive US$ 5,82 billion in proceeds from licenses and concessions.

The Quorum’s view: Oil sector in Brazil - a good opportunity, with its risks involved

Despite the institutional instabilities in the Brazilian society in recent years, the future of the Brazil’s Oil sector – and, by extension, of its general economy – is positive in a long-term. Consequently, foreign investors willing to opperate in this sector should be capable to accept “ups and downs” in the short-term.

Oil and Natural Gas sector accounted for 11% Brazil’s GDP in 2017 and the perspective is the continuity of this growing. With a recovered economy in the future (and the permanence of the economic and political collapse situation in Venezuela), Brazil has a strong chance to mantain its position as the largest oil producer in Latin America. In this scenario, pre-salt will be one of the most promising oil reserves in the world. 

The Brazilian Government expects the auctions related to pre-salt basins to yield investments of about US$ 36 billion for the next 10 years, and would create about 500.000 direct and indirect jobs. This development in the oil sector would provide an optimistic outlook for many Brazilian states’ economy that depend on oil production, such as Rio de Janeiro, Espírito Santo and São Paulo states. This sector recovery could invite more economic development in Brazilian states that have suffered from the recent dire economy.

However – despite advances made by “Lava Jato” investigations –, corruption, fraud, and bribing will remain real problems in Brazil in the next few years. Nevertheless – to atract foreign investments to the sector –, the Brazilian administration is concerned to reinforce regulatory and economic laws to mitigate these risks in the oil and gas industry.

Thus, despite the positive developments in the oil sector, there are persistent political risks that investors must consider. These risks include excessive jurisprudencial changing in the Brazilian judiciary system, reputational damage related to the interaction to the high-level corruption, political intervention with the involvement of Petrobras and impositive contract changes. For instance, the effects of the Truckers’ Strike on the pricing policy of Petrobras (that become partly controlled after the Strike), two weeks ago, caused the resignation of Pedro Parente, chairman of that State-owned (who advocated for a policy of free prices fluctuating in according to international markets). These events provides a cautionary tale for investors who seeking short-run profits, as judicial and political insecurity can undermine the business environment. Along with these issues, the upcoming presidential elections on next October could reverse policies and new regulatory framework for oil sector.

All in all, it’s necessary to say that the Brazilian energy sector (in special, its oil industry) usually creates great opportunities of profitability to patient investors with capacity of short-run resilience and a strategic approach to deal with Brazilian way of doing business.  To foreign investors, a robust strategy to the Brazilian markets involves a learning process related to the political and corporate local cultures which permits the identification of opportunities with the risk mitigation. In this field, the accompaniment of a specialized team on political risk analysis (with focus on Brazil) can be a strong watershed between the success and the failure.

Quorum Political Strategy is a government relations and political risk consulting firm made up of experienced professionals who can help your organization achieve its goals. We are a result-oriented consulting firm. Do not hesitate to contact us.

Sources: Agência Brasil, Agência Nacional do Petróleo - ANP

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Petrobras completes $4 billion bond issuance in international market

Petrobras completed a $4 billion bond issuance (known as global notes) in the international capital markets through its subsidiary Petrobras Global Finance B.V. (PGF) on Tuesday (Jan. 17). In a statement on its website, the company said the leverage consisted of $2 billion tranches due on 17th January 2022 and 17th January 2027. The order book was $19 billion, almost five times oversubscribed. The five-year-maturity tranche (2022) was issued at a 6.125% annual yield to investors. For the ten-year tranche, the yield will be 7.37% per year. According to Petrobras, these rates are “significantly lower” than last May's five-year maturity 8.62% per year and ten-year maturity 9% per year.

Considering the recent transactions of major issuers, the sale was completed with the lowest coupon levels compared to Petrobras's traded securities. Coupons are the interest rates the bond issuer pays its investors for bonds in the aftermarket.

Recognition

Petrobras's Financial and Investor Relations Director Ivan Monteiro said the offering made on Tuesday was a success and reflects market recognition for Petrobras's liability management strategy adopted in 2016. “It's also a recognition of the results obtained with the partnership and divestment policy and operational performance,” he added.

The haul will help Petrobras repurchase its bonds due on 2019-2020, prolonging its debt payment term.

Petrobras also pointed out it gained recognition from Latin Finance magazine as the company with the best liability management operation in the international capital market for two similar transactions completed in May and July 2016. Last Thursday (12), it received a Corporate Liability Management of the Year award in New York.

Pre-Salt oil production: new record in 2016

Petrobras’ average oil production in Brazil in 2016 went up 0.75% in comparison to the previous year and reached 2,144,256 barrels per day. According to the company, the result was in line with the established target of 2.145 million and represents an annual all-time high.

 In the pre-salt layer, last year’s annual average was also a record with 1.02 million daily oil barrels, which meant at the time an increase of 33% over the previous year.

Regarding natural gas, the company reached the record result of 77 million cubic meters per day. If this performance is included in the year’s balance, the total production of the company in the country reaches 2.63 million barrels of oil equivalent per day, 1% above 2015’s results, which will also set a new record.

The company’s president, Pedro Parente, also highlighted December’s performance, when other records were broken. Among them, the company’s average oil production in Brazil, which for the first time surpassed the mark of 2.3 million daily barrels, 3% above the results registered in September of the same year. On December 28, the production reached 2.4 million oil barrels.

Sources: Agência Brasil and Mercopress Agency

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Argentina as a chair of Mercosur: priority is the trade accord with European Union; Venezuela not included

Argentina's priority as chair of Mercosur which officially took over this week will be to advance negotiations with the European Union for a wide ranging trade agreement which will not include Venezuela, anticipated foreign minister Susana Malcorra .

“One of the most important issues for Mercosur, if not the most pressing are negotiations with the European Union. This is a priority and Venezuela has always being absent of these talks” pointed out the Argentine minister before the Mercosur chair-taking ceremony with Brazil's, Paraguay's and Uruguay's Foreign ministers on Wednesday. Malcorra also said she met that day for over an hour with Venezuelan Foreign minister, Delcy Rodriguez, who expected to participate in the meeting.

“We explained to the minister that there was no invitation extended to her country to attend” the XIth Extraordinary meeting of the Mercosur Council, while Rodriguez made it plain clear that “Venezuela rejected the arguments of the decision suspending” her country.

Malcorra and Rodriguez were later joined by Uruguay's Nin Novoa and Bolivia's foreign minister David Choquehuanca who arrived in Buenos Aires with the Venezuelan minister early dawn Wednesday. “It was an open frank dialogue with notorious interpretation differences” admitted Malcorra while Rodriguez said she was demanding respect for Venezuela.

Not ignoring the fact that the suspension of a country member is something very serious, (in reference to Venezuela), Malcorra insisted that what must be ensured is that the four founding members of the group advance on a common agenda.

Venezuela was suspended from Mercosur last December first when the three months timetable for the regime of president Nicolas Maduro to incorporate rules and rulings of the block was up and non complied, particularly those referred to trade and human rights. However Venezuela has rejected the suspension and argues it was motivated on political grounds.

Nevertheless Malcorra was optimistic about Venezuela's return to Mercosur, once it complies with all basic commitments particularly on trade and human rights.

”Tomorrow (Thursday), Venezuela will begin to implement the mechanism to solve controversies contemplated in the Olivos Protocol“, said Macorra, who despite admitting the ”enormous differences between Venezuela and Mercosur founding members, I'm optimistic“.

Malcorra finally informed that Argentina has taken the pro tempore chair of Mercosur for the next six months and revealed that she was decided to actively promote the block to other markets and conform integrated negotiation teams to jointly address the issues of Mercosur agenda.

”Our top priority is to move forward with current negotiations for a free trade accord with the EU, and to advance in other options with Japan, India, Canada, China and the US”.

Supposedly the handing over of the Mercosur chair on Wednesday should put an end to the controversial period, which had three members decisively willing to condemn Venezuela, while Uruguay, whose ruling coalition is divided on the issue had a more hesitant, foot dragging attitude. Venezuelan President, Nicolás Maduro, has demanded to have a personal meeting with Uruguay's Tabare Vázquez as soon as possible on the matter.

Source: Mercopress Agency

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Brazilian Supreme Court bowed to the pressure in its clash with Senate, but Calheiros no longer in Presidential substitution line

Brazil’s Supreme Court voted this Wednesday to leave Senate President Renan Calheiros in his powerful leadership post, raising hopes economic overhauls making their way through Congress can be approved.

Calheiros had defied a preliminary high court order issued Monday to stand down as Senate leader following his indictment on embezzlement charges, sparking a constitutional crisis.

The Court’s decision should aid President Michel Temer, who has been counting on Calheiros, a political ally, to help shepherd through Congress unpopular austerity measure aimed at closing a worrisome budget deficit and rebuilding Brazil’s credibility with investors.

Monday’s order had been issued by a lone justice on the 11-member Supreme Court. Brazilian Supreme Court judge Marco Aurélio Mello ruled Senator Calheiros shouldn't remain as Senate Speaker following his indictment for falsifying his Senate expense reports, allegations Calheiros denies. In Brazil, such temporary rulings are binding until they are overturned by the full Court.

The High Court indicated recently, in a different preliminary vote, that officials under indictment couldn’t be in the presidential substitution line. Mello based his order to remove Calheiros from the Senate Leadership on that understanding.

But the full Supreme Court ruled on Wednesday that Mr. Calheiros can remain as Senate Speaker, but will be removed from the line of presidential substitution. “It was a decision by large majority, there is no way to rebel against it,” said Justice Celso de Mello, the most senior of the justices. “The court decided strictly within its competency and the constitution”.

A Constitutional expert expressed dismay the high court let a powerful politician choose to defy an order by one of its members.

“They’re sending a message that he is stronger than they are,” said Ivar Hartmann, a law professor at the Getulio Vargas Foundation in Rio de Janeiro.

Alessandro Molon, a representative from Rede, the party that asked for Calheiros to be removed from the Senate Presidency, was at the court and said afterward, “This is a bad decision. We’ve missed an opportunity to turn a page in Brazil’s History.”

Senator Calheiros’s refusal to follow the initial order was unprecedented, and had ratcheted up tension that has been building for months between Brazil’s judiciary and legislative branches.

Source: Mercopress Agency

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Brazil's Senate Speaker suspended from Parliament during his trial for corruption

Brazil's Senate Speaker Renan Calheiros was suspended from duties by a Supreme Court judge this Monday, pending his trial where he faces corruption charges. The event constitutes another blow to President Michel Temer's Administration. The decision, made by Marco Aurélio Mello, Minister of Federal Supreme Court, was effective immediately, but needs to be confirmed by a majority of Judges on the Supreme Court bench.

An opposition party, "Rede Sustentabilidade", had called for the suspension, arguing that an official in line for Presidential succession - as the Senate Speaker is - could not hold his position while facing trial. The Supreme Court ordered Calheiros to face trial for alleged embezzlement last week. He has denied accusations for using public funds to make maintenance payments to a woman with whom he had a child. In a separate case, Calheiros is also among numerous top politicians including an ex-President and lawmakers accused of helping steal billions from state-owned oil firm Petrobras.

Protesters on Sunday held demonstrations demanding Calheiros' ouster, with a crowd in Brasilia chanting “Lock Renan up!” as they performed a mock funeral with a coffin inscribed “corruption.”
Calheiros had tried unsuccessfully last week to push through an urgent reform that would challenge judges' powers to investigate corruption.

Source: Congresso em Foco, Mercopress Agency

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Venezuela suspended from Mercosur - Maduro's Foreign Minister says it was a coup

On Friday, the founding Mercosur countries suspended Venezuela from full membership of the free-trade bloc in view of its failure to adjust its domestic regulations to economic agreements and human rights and immigration guidelines and principles that are mandatory to all the other members.

The Argentine Foreign Ministry issued a statement indicating that the ministers of Argentina, Brazil, Paraguay and Uruguay had informed to Nicolás Maduro Administration that Venezuela had been stripped of its capacity to “exercise those rights inherent to a member state of Mercosur.”

Argentina, Brazil, Paraguay and Uruguay adopted the measure, which Caracas considered "a coup” since it had called for activation of the bloc's conflict resolution mechanism for “aggression and harassment” against its pro tempore presidency of the bloc. Venezuelan Foreign Minister Delcy Rodríguez claimed her country was still in full exercise of the bloc's pro tempore presidency taken over by Caracas in August, when Uruguay's term ended. A collegiate presidency is said to be now effective until a new president takes over. A new meeting will be held on Tuesday in Montevideo to outline the future of Mercosur without Venezuela, while Brazil judged that Caracas will not return to the bloc in the short term and Uruguay said the decision could be appealed.

Rodríguez insisted Venezuela would continue to take part in Mercosur activities “with voice and vote rights in all meetings as a member State,” because “Venezuela does not recognize this illegal act”. “Certain media have spread the false notification of suspension, which does not exist,” added the Venezuelan diplomat.

Venezuela, a member of Mercosur since 2012, had until Friday to pass several internal resolutions of the bloc. “Venezuela had four years to incorporate the current Mercosur regulations and was granted an additional term to honor its obligations, which ended on December 1, 2016, and the measure adopted will remain in force until the States Parties to the Treaty of Asunción agree with that country the conditions to restore the exercise of their rights as a State Party”, the statement said.

In Brazil, Foreign Minister José Serra did not elaborate on the issue, but confirmed the measure: “It had already been announced if it did not meet certain requirements, and it was,” he said. Other Brazilian government sources warned that Venezuela's dismissal “probably will not be reversed in the short term.”

Source: Mercopress, El País

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Brazilian Government signs legislation that opens sub-salt oil deposits to private the sector

Brazilian president Michel Temer signed legislation on Tuesday which opens the way for oil companies other than state-controlled Petrobras to operate the coveted sub-salt acreage. The bill repeals a controversial 2010 rule that requires Petrobras to hold a minimum 30% operating stake in assets governed by production-sharing contracts, mainly sub-salt assets.

 “Fruitful dialogue is what allows us, today, to sanction this project that reactivates the oil and gas sector,” Temer said at the signing ceremony in Brasilia. Oil industry executives have long blamed the sole-operator rule for slowing down sub-salt development.

The new law still gives Petrobras the right of first refusal for areas considered strategic, without defining a reserves floor, under certain conditions. But Petrobras has signaled its reluctance to take on the operator role for new sub-salt projects, and could end up selling stakes in legacy sub-salt projects as part of a wider divestiture campaign.

Executives from major oil companies such as Shell, the country's largest private-sector producer, attended Tuesday's ceremony.

The law is one of several key industry reforms that are rekindling the interest of foreign oil companies ahead of a string of licensing rounds scheduled for next year.

Only one sub-salt project was subject to the sole-operator provision, the 8bn-12bn bl Libra field that was awarded to a Petrobras-led consortium in 2013. Petrobras holds a 40% operating stake in Libra, Shell and Total each hold 20%, and Chinese state-owned firms CNPC and CNOOC each hold 10%.

The first test of the new legal framework is a sub-salt licensing round planned for the second half of 2017.

The success of that round, covering four sub-salt unitization areas, Carcara, Gato do Mato, Tartaruga Verde and Sapinhoa, still hinges on the publication of new unitization rules which national energy council CNPE is expected to release next month.

Last week, Norway's Statoil completed its US$2.5bn acquisition from Petrobras of the BM-S-8 block, where Carcara is located. The deal positions the firm to expand its operations. Shell already operates Gato do Mato. Both areas are currently governed by concession contracts that preceded the production-sharing model.

Sources: Agência Brasil, Mercopress Agency

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Urgent: Fidel Castro, former Cuban leader, dies aged 90

Fidel Castro has died at the age of 90, Cuban state television announced on Saturday.

One of the world’s most controversial leaders, survived countless assassination attempts and premature obituaries, but in the end proved mortal after suffering a long battle with illness.

The announcement was long expected, given the Former President’s age and health problems.

The Communist party and state apparatus has prepared for this moment since July 2006, when Castro underwent emergency intestinal surgery and ceded power to his brother, Raúl, who remains in charge.

Fidel wrote occasional columns for the party paper, Granma, and made very occasional public appearances – most recently at the 2016 Communist Party Congress – but otherwise remained invisible.

Confirmation of his death will trigger celebrations in Miami, the centre of Cuba’s exile community, and mourning among leftwing admirers around the world. For many Cubans on the island who grew up in his shadow, it will be a moment of profound ambivalence.

  

More than half a century ago, his guerrilla army replaced Fulgencio Batista’s dictatorship with communist rule that challenged the US and turned the island into a cold-war crucible.

Sources: AlJazeera, The Guardian, El País

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Uruguay admits that could give asylum to Brazilian politicians; Uruguayan press interprets announcement as a veiled message to Lula

President Tabaré Vázquez said on Monday that Uruguay recognizes the government of President Michel Temer, respects the decisions of Brazil emerging from its political situation and admitted considering giving asylum to Brazilian politicians, if contemplated under International Law.

 “It must be clear that Uruguay historically and in the framework of international relations recognizes governments, and Brazil now has a government which Uruguay has already recognized” said Vazquez on Monday talking with the media following a conference with Brazilian business people in Sao Paulo.

“Brazil is a very important country for Uruguay, from all points of view, including trade and investment, and thus it is in the interest of us to have the best of possible relations with the government of Brazil”, added the president.

“Brazil's domestic problems are addressed and solved by Brazil, and us, from outside are not entitled to any opinion on the matter. We don't want to intervene in domestic political problems of other countries”, insisted the Uruguayan leader in reference to the political situation Brazil is still going through, including a raft of corruption scandals.

Vazquez was cautious when referring to president Michel Temer and hardly mentioned him, but he also anticipated that if any Brazilian politician appeals for asylum in Uruguay, and the situation is contemplated by International Law, Uruguay will accept it and receive the person.

“I believe president Temer is a very kind and serious person, I talked with him for half an hour in New York...that's it”, said Vazquez and took no more questions on the matter.

In recent weeks there have been insistent rumors in Uruguay that ex president Lula da Silva, mentioned as a suspect in several corruption cases linked to Petrobras, and who this week faces a round of questionings, could be planning to take political refuge in Uruguay.

Several media recalled that one of Lula's sons who is a soccer coach is working for a Uruguayan football team with the purpose of “preparing” the asylum for the family, but his solicitors and the local team have strongly denied such possibility.

“Uruguay is a country of open arms”, underlined Vazquez without giving names, “whoever arrives in Uruguay to work, to live, to share, to respect our laws...is welcome”.

Vazquez concluded saying that, “as I have repeatedly stated, within the constitution and our legal system, all is accepted, but outside that framework, not an iota".

Source: Mercopress Agency

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Trump promises “the closest relation in history” to Argentina

“Argentina is a great country” and Argentina and the US will have “the closest relation in history”, according to the official version from the administration of president Mauricio Macri who on Monday was on the phone with president elect Donald Trump to congratulate him on his presidential victory.

 Accordingly, Macri told Trump he was expecting to see him in Argentina in 2018, when the country organizes the G20 summit in Buenos Aires, to which the US incoming president replied he would like to see him at the White House sometime before that year.

During the fifteen-minute talk both recalled their personal relation, (years ago) and agreed to work in a joint agenda to boost growth of the two countries.

“Argentina is a great country and we will have the closest relation between our countries in history”, Trump was quoted, according to the official Casa Rosada release.

Later in the day foreign minister Susana Malcorra said that the outstanding part of the dialogue between both presidents, was that “the personal link was confirmed and reestablished, which has many years”, and in effect “Trump was very appreciative in remembering old times”.

“There's no possible task a ministry or diplomacy can advance if there is no chemistry between persons and the conversation confirmed that the chemistry exists”, said Malcorra.

The minister said it was a very important starting point since it was Trump who told Macri that he is convinced that “we have to work in a joint agenda and he understands that Argentina has opened to the world, and the US is a very important partner in that opening”.

“President Trump is convinced that it is essential we work together and both confirmed that we should hold a meeting of our teams the sooner the better. We will work on that, and he also said he expected to see him soon at the White House, that is a very good signal”.

Malcorra underlined the significance that the president elect had included Macri in his agenda of contacts. “There are not many calls from world leaders during these transitions”, and it is “essential” for Argentina to have been included in that agenda less than a week after winning the election.

Further on Malcorra pointed out that ”president Macri told me there was not a single mention during the conversation to the issue of the (Argentine) support for Hillary. The world is accommodating to Trump's victory and this is positive because relations among countries must be done through the governments their peoples elect“

As to the future Trump cabinet, Malcorra admitted that ”it is obvious there are going to be great changes and this will delay things, but it is our job to ensure that as far as Argentina is concerned that delay is the briefest possible“.

But Malcorra also underlined it was time to des-dramatize things, ”on our side there is much work ahead, particularly at the ministry (of foreign affairs), time is gold, we need to continue with the agenda that we expect will generate investments, improve the exchange and it is done without interruptions”.

Source: Mercopress Agency

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South American Presidents: who they would like to see at the White House and how they reacted to Trump victory?

A majority of South American Presidents would prefer to see former Secretary of State, Hillary Clinton, at the White House, while a few believe whoever wins will make not much of a difference for the continent. Nevertheless, be it Hillary or Trump, the Presidents defended respect to US institutions.

In Brazil, President Michel Temer, a Constitutional Professor, was more diplomatic than his own Chancellor, José Serra (who mentioned that a Trump victory would be a "nightmare"), and said he was concerned with the result of Tuesday's presidential election. But Temer argumented that “no US President can do whatever he pleases”, since "in the United States institutions work with an effective system of checks and balances".

Likewise, Argentine President Mauricio Macri said that “the United States is far greater than any name and we expect to continue with the excellent relations between the two countries, whoever wins”. Nevertheless, Macri admitted that if Hillary wins, there “will be a continuity in current affairs”.

But, in Bolivia, Evo Morales said he was indifferent to whoever wins in the US Presidential Election, since “there are no differences between candidates”. Morales claimed that “the US has an only policy which is intervention and meddling in other countries affairs, and whoever wins makes no difference since elected Presidents do not rule, this is done by the big banks and business people”

Michelle Bachelet from Chile has no doubts about her complete support for Hillary Clinton. “We have developed a good friendship” and she is a very capable, intelligent and committed woman", and “we need more women presidents in the world”. However she also apologized for having such a partial opinion. “She's a friend”, Chilean President said.

In Ecuador, Rafael Correa was a bit ambiguous in his interpretation of Tuesday's vote and its impact on Latin-American. "Why shouldn't a Trump presidency be good for the region?", asked Correa. “When did progressive governments reach office in the continent, with Obama or with Bush?...the same could happen with Trump, why not?”. However, Correa admitted a close relation with the former Secretary of State. “I wish Hillary wins”, argued.

Peruvian President, Pedro Pablo Kuczynski, leading a conservative government has been the most critical of the Republican candidate. “Mr. Trump wants to build a wall, which is a crime”, said Kuczynski who admitted having told US President Obama in a private phone call that he was concerned “about one of the candidates”.

Venezuela's controversial Nicolas Maduro openly supported Senator Bernie Sanders during the Democrat primary, but following on Hillary's victory he pointed all his heavy guns on Trump calling him “mentally ill”. However, he did not support Hillary, rather the contrary, “we can't expect nothing good from any of the two candidates". "Nor Trump, nor Clinton will arrive with good wishes and interests for Venezuela or Latin America”.

Colombia's Juan Manuel Santos also expressed a negative opinion on the Republican candidate. Admitting he does not know Trump, Santos argues that his announced policies “are not in accordance with what Colombia expects from the US and what Colombia wishes from the rest of the world: free trade and immigration policies which are convincing to all countries”. Santos also recalled that President Clinton launched Plan Colombia, “which has been very useful in achieving what we have achieved” and has been supportive of peace talks with the FARC guerrilla. “As far as I know, Hillary offers more guarantees” concluded the Nobel Peace Prize winner.

Finally, Horacio Cartes (Paraguayan President) and Tabaré Vazquez (from Uruguay) have not made public statements on the issue. Who did talk was the former Uruguayan President, José Mujica, who answered to a question about what would he do in a hippotetical Trump victory: “I don't know because so far there is no escape gate to Mars”. 

“I'm not scared about Trump, but about the people who support him" Mujica continued. "The image is so grotesque that one feels certain affinity with Mrs. Clinton, who I must admit is quite conservative”, underlined Mujica.

 Source: Mercopress Agency

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Brazilian amnesty program for undeclared funds parked overseas collects US$ 15.8 billion

The Brazilian Government collected R$ 50.9 billion, equivalent to US$ 15.8 billion in taxes and fines under an amnesty program offered to individuals and corporations with undeclared but legitimate funds parked overseas, the Finance Ministry said last Tuesday.

By the program’s Monday deadline, 25.114 individuals and firms agreed to pay a 15% income tax and a fine equal to taxes paid, lower than they would have paid without the program, in exchange for immunity from potential prosecution for tax evasion and other charges, the Ministry said.

A total of R$ 169,9 billion in undeclared offshore assets were reported under the amnesty program, the ministry said. Under the program, taxpayers could also avoid paying interests on their overdue taxes.

The extra revenue collected would help the Brazilian Government meet this year’s fiscal target amid a swelling budget gap and debt load.

The Government’s target for this year is to have a primary deficit, which excludes debt payments, of R$ 170,5 billion. As of September, the deficit was R$ 85,5 billion.

Brazil’s Central Bank said Tuesday it counted an inflow from abroad of US$10 billion through the end of October as a result of the amnesty. Some people used money already in Brazil to pay their taxes and fines, resulting in some of the difference between the amount collected by the government and the amount brought home.

Source: Mercopress Agency

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Macri sees future integration of Mercosur with the Pacific Alliance

Argentine President Maurício Macri argued that Latin America needs greater economic integration and a merger of Mercosur and the Pacific Alliance should be the objective. In an interview with the Japanese agency Nikkei, Macri insisted in loosening trade restrictions in his country and the region.

“First, we have to boost Mercosur,” Macri said, suggesting he was ready to take the lead in breaking down tariffs and other barriers to trade within the bloc.

Mercosur members cannot unilaterally sign free trade agreements with outside countries unless there's a full consensus on the issue. Nevertheless Macri said Mercosur is “ready for negotiation with Japan.”

Attempts to build broad economic zones in the region are nothing new. The proposed 34-nation Free Trade Area of the Americas was to span North and South America and the Caribbean, excluding Cuba, and produce a functioning bloc by the end of 2005. But the effort foundered amid resistance by then-Venezuelan leader Hugo Chavez and other opponents, including Nestor Kirchner and Lula da Silva.

After that failure, free trade proponents Mexico, Chile, Peru and Colombia formed the Pacific Alliance. The bloc seeks closer ties with Asia, having given observer status to Japan, China, South Korea, India and other nations on the continent.

Argentina became one of the 49 observer countries to the Pacific Alliance in June, with Macri's government apparently trying to show that his country is open for business.

Macri described observer status as the first step toward market integration. Together, the two blocs would have a combined gross domestic product of roughly US$4.5 trillion, about the size of Japan's GDP, creating a more powerful magnet for investment.

Source: Agencia Mercopress

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