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451. Is Chinese FDI pushing Latin America into natural resources?

Author:
Miguel Pérez Ludeña
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Chinese foreign direct investment (FDI) in Latin America is a recent phenomenon. Although the China National Petroleum Corporation and other companies have been present in Peru, Ecuador and Venezuela since the early 1990s, large projects have been pursued only since 2006, following an extended period of high commodity prices. The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that there were US$ 15 billion of Chinese FDI inflows into Latin America in 2010, 90% of which were in extractive industries. This further contributed to the already high percentage of Chinese FDI flows to the region that are in natural resources. At a time of high economic growth fueled by commodity exports and strong currency appreciation (particularly in Brazil), FDI into extractive industries strengthens the region's specialization in primary products at the expense of manufacturing and other activities.
Topic:
Economics, International Trade and Finance, Markets, Natural Resources, and Foreign Direct Investment
Political Geography:
China, Brazil, Latin America, and Peru

452. Making Sense of an Unstable Legislature: Committee Assignments in the Argentine Chamber of Deputies, 1946 – 2001

Author:
Silvina Danesi and Ludovic Rheault
Publication Date:
01-2012
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
Latin American legislatures have gone largely unstudied, with the functioning of the Argentine Chamber of Deputies prior to the 1980s being an entirely unexplored subject. This paper fills that gap by examining the organization of the Chamber, with particular focus on its standing committee system from 1946 to 2001. We assess the portability of two U.S.-based theoretical approaches to legislative organization by applying them to committee assignments. An original data set of Argentine deputies was constructed and a way of measuring political power in committees was devised for this study. Despite weak democratic governments, military interventions, and changes to the electoral system, we find that ruling parties have consistently influenced the committee system, shaping its structure and securing an over-proportion of their deputies in key committee positions. These results support the applicability of the U.S. originated Cartel Theory of legislative organization to understanding and studying legislatures outside that country.
Political Geography:
United States, Argentina, and Latin America

453. Credit at Times of Stress: Latin American Lessons from the Global Financial Crisis

Author:
Liliana Rojas-Suarez and Carlos Montoro
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The financial systems in emerging market economies during the 2008–09 global financial crisis performed much better than in previous crisis episodes, albeit with significant differences across regions. For example, real credit growth in Asia and Latin America was less affected than in Central and Eastern Europe. This paper identifies the factors at both the country and the bank levels that contributed to the behavior of real credit growth in Latin America during the global financial crisis. The resilience of real credit during the crisis was highly related to policies, measures and reforms implemented in the pre-crisis period. In particular, we find that the best explanatory variables were those that gauged the economy's capacity to withstand an external financial shock. Key were balance sheet measures such as the economy's overall currency mismatches and external debt ratios (measuring either total debt or short-term debt). The quality of pre-crisis credit growth mattered as much as its rate of expansion. Credit expansions that preserved healthy balance sheet measures (the “quality” dimension) proved to be more sustainable. Variables signalling the capacity to set countercyclical monetary and fiscal policies during the crisis were also important determinants. Moreover, financial soundness characteristics of Latin American banks, such as capitalization, liquidity and bank efficiency, also played a role in explaining the dynamics of real credit during the crisis. We also found that foreign banks and banks which had expanded credit growth more before the crisis were also those that cut credit most. The methodology used in this paper includes the construction of indicators of resilience of real credit growth to adverse external shocks in a large number of emerging markets, not just in Latin America. As additional data become available, these indicators could be part of a set of analytical tools to assess how emerging market economies are preparing themselves to cope with the adverse effects of global financial turbulence on real credit growth.
Topic:
Debt, Economics, Emerging Markets, Globalization, and Financial Crisis
Political Geography:
Europe, Asia, and Latin America

454. Is There Such a Thing As Middle Class Values?

Author:
Florencia Torche, Luis F. Lopez-Calva, and Jamele Rigolini
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Middle class values have long been perceived as drivers of social cohesion and growth. In this paper we investigate the relation between class (measured by the position in the income distribution), values, and political orientations using comparable values surveys for six Latin American countries. We find that both a continuous measure of income and categorical measures of income-based class are robustly associated with values. Both income and class tend to display a similar association to values and political orientations as education, although differences persist in some important dimensions. Overall, we do not find strong evidence of any “middle class particularism”: values appear to gradually shift with income, and middle class values lay between the ones of poorer and richer classes. If any, the only peculiarity of middle class values is moderation. We also find changes in values across countries to be of much larger magnitude than the ones dictated by income, education and individual characteristics, suggesting that individual values vary primarily within bounds dictated by each society.
Topic:
Economics, Political Economy, Social Stratification, and Culture
Political Geography:
Latin America

455. Transportation and Communication Infrastructure in Latin America: Lessons from Asia

Author:
Barbara Kotschwar
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In Latin America, inadequate transportation infrastructure has been identified as an increasingly important impediment to the region's further integration in global trade and a significant factor preventing countries from properly taking advantage of the multitude of regional, plurilateral, and bilateral trade agreements signed in the past decade and a half. This paper examines transport and communications infrastructure initiatives in Latin American and Asian regional trade arrangements and finds several lessons Asia can teach Latin America.
Topic:
Development, Economics, International Trade and Finance, Communications, and Infrastructure
Political Geography:
Asia and Latin America

456. Chinese Investment in Latin American Resources: The Good, the Bad, and the Ugly

Author:
Theodore H. Moran, Julia Muir, and Barbara Kotschwar
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
China's need for vast amounts of minerals to sustain its high economic growth rate has led Chinese investors to acquire stakes in natural resource companies, extend loans to mining and petroleum investors, and write long-term procurement contracts for oil and minerals in Africa, Latin America, Australia, Canada, and other resource-rich regions. These efforts to procure raw materials might be exacerbating the problems of strong demand; "locking up" natural resource supplies, gaining preferential access to available output, and extending control over the world's extractive industries. But Chinese investment need not have a zero-sum effect if Chinese procurement arrangements expand, diversify, and make more competitive the global supplier system. Previous Peterson Institute research (see Moran 2010) and new research undertaken in this paper, show that the majority of Chinese investments and procurement arrangements serve to help diversify and make more competitive the portion of the world natural resource base located in Latin America. For a more comprehensive analysis, the authors conduct a structured comparison of four Peruvian mines with foreign ownership: two Organization for Economic Cooperation and Development-based, and two Chinese. They examine what conditions or policy measures are most effective in inducing Chinese investors to adopt international industry standards and best-practices, and which are not. They distill from this case study some lessons for other countries in Latin America, Africa, and elsewhere that intend to use Chinese investment to develop their extractive sectors: first, that financial markets bring accountability; second, that the host country regulatory environment makes a significant difference; and third, that foreign investment is a catalyst for change.
Topic:
Economics, International Trade and Finance, and Natural Resources
Political Geography:
China, Canada, Latin America, and Australia

457. U.S. and Iranian Strategic Competition: The Impact of Latin America, Africa and Peripheral States

Author:
Brandon Fite
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Iran pursues cooperation with states on the geographic and strategic periphery of the competition between the US and Iran in order to create a network of diplomatic and economic relationships or “partners” that can lessen the blow of international sanctions and generally oppose Western attempts to constrict its ambitions. These peripheral “partners” located mainly in Africa and Latin America, also serve as alternative markets for Iranian oil, provide diplomatic cover for Iran's nuclear efforts, and aid Iran's acquisition of goods proscribed by international sanctions.
Topic:
Conflict Resolution, Economics, and Sanctions
Political Geography:
Africa, United States, Iran, and Latin America

458. Amérique latine. Political Outlook 2012

Author:
Mélanie Albaret, Hélène Combes, Olivier Compagnon, Olivier Dabène, Lorenza Belinda Fontana, Marie-Laure Geoffray, Charles-André Goulet, Nordin Lazreg, Kevin Parthenay, Gustavo Pastor, Thomas Posado, Darío Rodriguez, Camila Minerva Rodriguez Tavárez, and Jérôme Sgard
Publication Date:
12-2012
Content Type:
Special Report
Institution:
Centre d'Etudes et de Recherches Internationales
Abstract:
Le Political Outlook 2012 de l’Amérique latine est une publication de l’Observatoire politique de l’Amérique latine et des Caraïbes (Opalc) du CERI-Sciences Po. Il prolonge la démarche du site internet www.sciencespo.fr/opalc en offrant des clefs de compréhension d’un continent en proie à des transformations profondes. Des informations complémentaires à cette publication sont disponibles sur le site.
Topic:
Conflict Resolution, Democratization, Markets, Political Economy, Politics, History, Finance, Regional Integration, and Memory
Political Geography:
South America, Cuba, Latin America, Bolivia, and El Salvador

459. Can Latin American Oil Companies Free Themselves from the Legacy of Nationalization? (Les compagnies pétrolières latino-américaines peuvent-elles s'affranchir de l'héritage de la nationalisation ?)

Author:
Isabelle Rousseau
Publication Date:
01-2012
Content Type:
Special Report
Institution:
Centre d'Etudes et de Recherches Internationales
Abstract:
Latin America's national oil companies, created at various times during the twentieth century, have each evolved in a different way. The two main companies – Petroleos de Mexico (Pemex) and Petroleos de Venezuela (PDVSA) – provide excellent illustrations of the rich diversity of organizational and industrial development. Many factors – such as the importance of earth quakes – explain the diversity. Nevertheless, the role of governments during the period of nationalizations is key. It was then that the relationships between the owners of natural resources, public operators, regulators, the finance ministries, and international operators were defined. This process shaped the companies' institutional structures (path dependency) and set the parameters for future entrepreneurial dynamism. The path by which each of these enterprises developed continues to affect their culture as evidenced by the recent reforms which attempted to restructure Pemex and PDVSA.
Topic:
Energy Policy, Oil, Political Economy, and Multinational Corporations
Political Geography:
South America, Latin America, Venezuela, and Mexico

460. Sustainable Development Goals – a useful outcome from Rio+20?

Author:
Alex Evans and David Steven
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Center on International Cooperation
Abstract:
Recent months have seen increasing interest in the idea that Rio+20 could be the launch pad for a new set of 'Sustainable Development Goals' (SDGs). But what would SDGs cover, what would a process to define and then implement them look like, and what would some of the key political challenges be? This short briefing sets out a short summary of current thinking the issue, followed by thoughts about the way forward.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Latin America