ALABC Newsletters

Global context: Improvements in activity have continued, though inflation has been higher than expected 

• The first half of the year confirmed some elements of our baseline scenario for 2021. In particularly, while heterogeneous, vaccination progress at the global level has enabled reopening in the developed world. This has supported further improvement in expectations for activity, in line with our 5.9% growth estimate for this year—the highest since 2007.
• On the other hand, after the first-semester hike, interest rates in the US, particularly longterm, have fallen, benefiting rate-sensitive assets like the US stocks. High risk appetite has helped keep fiscal policy that was more expansive than expected at the beginning of the year from triggering sharp hikes in real longer-term interest rates.
• Some elements have diverged from our expectations, particularly the global dollar, which we expected to weaken as reopening rotated from the US to the rest of the world. This was on-path until the Fed raised its inflation expectations and appropriate benchmark rate path in June, causing the dollar to appreciate across the board.
• There is consensus that inflation will be high relative to last year; however, figures have exceeded expectations, increasing inflationary risk and signalling lower-than-expected returns for the second half of the year.

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PRESS RELEASE 

ESTABLISHMENT OF THE JOINT BUSINESS COUNCIL BETWEEN THE AUSTRALIA-LATIN AMERICA BUSINESS COUNCIL AND THE CENTER OF PROMOTION AND INVESTMENT ASIA PACIFIC-LATIN AMERICA (AP-LAC)

On July 27, a Memorandum of Understanding (MOU) was signed between the Australia-Latin America Business Council (ALABC) and the CENTER OF PROMOTION AND INVESTMENT ASIA PACIFIC-LATIN AMERICA (AP-LAC) for the establishment of the Australia-Central America and Caribbean Council of Business Cooperation (ACACBC) to foster closer friendships and promote economic, trade and investment between Australia and Guatemala, El Salvador, Costa Rica, Panama and Cuba.

The signing ceremony was co-hosted by the Chairman of the Board of Directors of ALABC Mr. Richard Andrews, and by the President of AP-LAC Mr. Alexander Mora-Delgado and included the participation of the Ambassador of Costa Rica in Australia HE Armando Vargas Araya.

Special mention to highlight the presence of Mr. Jairo Hernandez, former Ambassador of Costa Rica in Australia and Marcelino Aviles, former Ambassador of Panama in Australia.

In his welcoming remarks the President of AP-LAC Alexander Mora-Delgado, highlighted that the signing of the MOU marks a new milestone in the promotion of the business relations between Australia and key Central American countries and that the main objective is to provide a regular forum for a systematic bilateral business promotional initiatives that will lead to increased trade in goods and services and investment between Australia and Guatemala, El Salvador, Costa Rica, Panama and Cuba. He added that “the current trade and investment figures demonstrate that the existing potential remains largely untapped. An essential role for the ACACBC it is to encourage investor confidence and strengthen relations to establish the bases for stable growth that is beneficial for both regions”

The President of ALABC, Richard Andrews mentioned that this is the first business advisory group created by ALABC with a focus in 5 countries in the Central American and Caribbean region. The business councils are unique instances of private sector cooperation, coordination and consultation whose objective is to increase business between two regions. They are made up of senior businessmen and executives of companies that have significant interest in increasing the investments and trade flows with the countries that act as counterparts. 

They are an effective tool for business diplomacy and complement the efforts made by DFAT and ALABC, along with key industry player such as COALAR , Austrade, Global Victoria, Trade and Investment Queensland and their counterparts in the region.

Clean energy and green hydrogen, tourism, mining, agriculture, science and technology  are a major focus for government and industries wanting to attract and partner with Australian technology exporters and investors.

The importance of the MOU signed between our two private sector organisations, through which a strategic alliance is established represents a unique opportunity for Australian companies to access key players and decision makers in the business sector.

AP-LAC is a non-profit trade association that brings together companies and associations doing business between Latin America and the Asia Pacific.

ALABC was established in 1989 as a Not-for Profit association and our membership is comprised of companies and organisations ranging from large multinational corporations to education and research institutions, SMEs, sole traders and professionals, who are at the forefront of forging business relations between Australia and Latin America.

At least three mining initiatives that are in their development stages are looking to incorporate the use of green hydrogen, considering the potential that this technology is thought to have in Chile.

In this context, the Chilean Government has presented its “Guide for the Approval of Pilot Projects in Mining,” an initiative led by the Mining and Energy Ministries, alongside the National Geology and Mining Service (SERNAGEOMIN). The aim is to provide greater assurances to companies that want to use hydrogen in the mining industry, a sector that is considered fundamental to promoting the use of the fuel during its initial phases of development.

Read more here. 

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There’s no doubt that sustainability is a topic of discussion in every wine-producing country and region around the world, but no country is doing more to push the conversation forward than Chile. Its Sustainability Code covers not just viticulture, but also practices in the winery and the way that wineries interact with their surrounding society.

This week on the “VinePair Podcast,” Adam Teeter and Zach Geballe are joined by Chilean winemakers Viviana Navarrete of VSPT Wine Group and Sofia Araya of Veramonte for a live podcast to wrap up VinePair’s Sustainability Week. They discuss why sustainability is so important to each of their winemaking ventures, how their definition of sustainability has expanded in recent years, and what they hope to achieve in the future.

Read full article here. 

Peruvians will be going to the polls to elect their next President on April 11. The latest polling reveals that there is no clear winner in the race among the candidates that represent myriad ideologies along the political spectrum. While left-leaning candidate Veronika Mendoza is running on a platform of tax hikes for the rich and increased government regulations, far-right conservative businessman Rafael Lopez Aliaga promises to aggressively attract foreign investments. 

In the event that Peru’s electorate places Aliaga in power, he will have an uphill battle in convincing foreign multinationals to invest in -or trade with- this Andean nation. Three primary components of the investment climate in Peru comprise the primary obstacles to injecting foreign dollars into the local economy: endemic corruption, a deeply divided and skeptical electorate, and the government’s sub-par response to COVID-19. 

Read full article here. 

Until 2007, Uruguay was strapped for energy resources that forced it to rely on importing energy from South American neighbours. That has changed. Today, 98 percent of the country’s power is delivered reliably and affordably from renewable sources. Compare that to the worldwide average that is typically reported in the low- to mid-20 percent range and you can see that this small country might just be on to something. Does little Uruguay have a blueprint for renewable energy that others could follow?

Located between Argentina and Brazil, its two larger neighbours and trading partners, Uruguay is geographically the second-smallest nation in South America, with a population of about 3.45 million people, of whom roughly 1.8 million live in the metropolitan area of its capital, Montevideo. Since the signing of the Kyoto Protocol in 1997, Uruguay has surprised its South American neighbours with its growing list of environmental successes, including conserving native forests, protecting biodiverse areas, and showing remarkable progress on a promise to be carbon neutral by 2030.

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The Brazilian government has published the country's artificial intelligence (AI) strategy to guide actions around research, innovation and the development of related technologies to tackle the country's greatest challenges, as well as ethics.

The publication of the strategy follows a process of over a year since the launch of the consultation to gather input for the plan in late 2019, after a period of engagement with AI consulting firms and an international benchmarking process. According to the Brazilian government, the consultation lasted until March 2020 and more than 1,000 contributions were received.

Read full article here. 

Foreign investment in Cuba’s mining industry could be in line for further expansion following recent partnership deals.

The country has signed at least two partnership or joint venture (JV) agreements with overseas companies in the past six months, despite COVID-19 challenges.

While mining remains a state-controlled activity in Cuba, foreign companies have been active in the sector through JVs for decades.

Partnerships include the Moa mine (in picture), a 50:50 JV between Canada’s Sherritt International and Cuba’s state-run General Nickel Company, which produced 31,506t nickel and 3,370t cobalt last year.

Read full article here.