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471. The Political Economy of Sino-Peruvian Relations: A New Dependency?

Author:
Ruben Gonzalez-Vicente
Publication Date:
03-2012
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
This article reviews dependency postulates and examines whether they are applicable to explain the political economy of China's contemporary relations with Peru. It argues that the dichotomy between Peru as a commodity-providing periphery and China as a core manufacturing centre is insufficient to explain the ways in which power is embedded in the international economic system, and particularly inadequate to identify winners and losers in the international division of labour. Thereby, in line with some recent international political economy discussions of power, the article proposes that China should not be understood as a self-contained economic entity, but as a hub where natural resources are mobilized for transnational production. Furthermore, contending that a focus on nation-states fails to capture the complexity of (under)-development dynamics, it suggests that notions of internal colonialism, flexible sovereignties and postcolonial analyses of representation provide fresher perspectives from which to understand the distribution of power along the political economy of Sino-Peruvian relations.
Topic:
Development and International Political Economy
Political Geography:
China and Latin America

472. Chile's Economic and Political Relationship with China

Author:
Juan Carlos Gachúz
Publication Date:
03-2012
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
China's foreign policy has been characterized in the last decade by a heightened interest in reaching out to Latin America, particularly to countries rich in natural resources and with potential markets for Chinese exports, and Chile is one of these countries. The paper shows that even though the Chilean economy has benefitted from the signing of the FTA, it also faces potential risks. To continue to benefit, Chile needs to boost exports in other potential export sectors (value-added products or services) and should attempt to attract more Chinese FDI to Chile's export industry. The export of raw materials (particularly non-renewable ones) is not always sustainable in the long term. The roles of the Chilean state and the private sector in attracting Chinese investment and enhancing diversification of exports of value-added products are crucial for the future of the economy of Chile and its relationship with China.
Topic:
Foreign Policy
Political Geography:
China, Latin America, and Chile

473. China, Global Governance and the Future of Cuba

Author:
Adrian H. Hearn
Publication Date:
03-2012
Content Type:
Journal Article
Institution:
German Institute of Global and Area Studies
Abstract:
China's deepening engagement with Latin America has been accompanied by concerns about the Chinese government's regard for international conventions of economic governance. Critics claim that across Latin America and the Caribbean, Chinese aid and trade are characterised by excessive state intervention. This article argues that, for two reasons, the rationale for these misgivings is dissipating. First, since the onset of the global financial crisis, China has gained influence in multilateral institutions, prompting them toward greater acceptance of public spending in developing countries. Second, recent developments in Cuba show that China is actively encouraging the Western hemisphere's only communist country to liberalise its economy. China sits at the crossroads of these local and global developments, prompting Cuba toward rapprochement with international norms even as it works to reform them.
Topic:
International Cooperation
Political Geography:
China and Latin America

474. Capital Requirements under Basel III in Latin America: The Cases of Bolivia, Colombia, Ecuador and Peru

Author:
Liliana Rojas-Suarez, Arturo J. Galindo, and Marielle del Valle
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A number of banks in developed countries argue that the new capital requirements under Basel III are too stringent and that implementing the proposed regulation would require raising large amounts of capital, with adverse consequences on credit and the cost of finance. In contrast, many emerging market economies claim that their systems are adequately capitalized and that they have no problems with implementing the new capital requirements. This paper conducts a detailed calculation of capital held by the banks in four Latin American countries—known as the Andean countries: Bolivia, Colombia, Ecuador and Peru—and assesses the potential effects of full compliance with the capital requirements under Basel III. The conclusions are positive and show that while capital would decline somewhat in these countries after they make adjustments to comply with the new definition of capital under Basel III, they would still meet the Basel III recommendations on capital requirements. More importantly, these countries would hold Tier capital to risk-weighted-asset ratios significantly above the 8.5 percent requirement under Basel III. That is, not only the quantity, but also the quality of capital is adequate in the countries under study. While encouraging, these results should not be taken as a panacea since the new regulations are only effective if coupled with appropriate risk management and supervision mechanisms to control the build-up of excessive risk-taking by banks. Further research into these areas is needed for a complete assessment of the strength of banks in the Andean countries.
Topic:
Debt, Economics, International Trade and Finance, and Monetary Policy
Political Geography:
Colombia, Latin America, Peru, Ecuador, and Bolivia

475. Competitiveness in Central America: The Road to Sustained Growth and Poverty Reduction

Author:
Liliana Rojas-Suarez, José Luis Guasch, and Veronica Gonzales
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Over the last decade, Central American countries—Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua—have made significant progress in social and economic areas. In particular, they have stabilized their economies after decades of civil war and the economic volatility that plagued the region through the 1990s. Most countries in Central America have taken important steps to improve their business climates, particularly by enhancing macroeconomic stability, improving the soundness of their financial systems, making improvements in infrastructure services and trade facilitation, reducing red tape, and simplifying their regulatory and tax frameworks. As a result, before the 2008 financial crisis, GDP per capita in Central America grew at an average rate of 3 percent per year from 2003 to 2008, which, albeit modest, was the most robust and stable period of growth the region had witnessed since the early 1990s. However, despite this achievement, Central American economies are still lagging behind the rest of Latin America and other middle-income countries by per-capita growth rates of 0.5 to 2 percentage points. Even more worrying are the levels of poverty and inequality, which show the lack of inclusiveness in their growth models. Moreover, recent developments in the region show a number of red flags that are weakening macroeconomic and democratic stability. Significant structural changes are urgently needed to secure sustained and inclusive growth.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Latin America and Central America

476. Taxation in Paraguay: Marginalization of small-scale farming

Author:
Déborah Itriago
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
Paraguay's tax system is insufficient to provide the resource base to eradicate poverty in the country, and has done little or nothing to achieve a more equal distribution of income and wealth. Two major taxation reforms over the last decade have done little to alleviate the fiscal injustice that is generated partly by the low tax reciprocity of the soy agribusiness – Paraguay's main export crop. Meanwhile, programmes to support small- scale farming receive a level of public financing accounting for just 5 per cent of public expenditure. With one of the highest levels of unequal land ownership in the world, labour informality at very high levels and poor environmental regulation of soy producers, the livelihoods and ecosystems of Paraguay's small-scale producers are at risk. There are serious loopholes in Paraguay's tax system that must be addressed in order to deliver a fairer, progressive taxation system that will allow the country to meet its social objectives.
Topic:
Agriculture, Environment, International Trade and Finance, and Poverty
Political Geography:
Latin America

477. Sexual Violence and Justice in Postconflict Peru

Author:
Jelke Boesten and Melissa Fisher
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
Wartime sexual violence in Peru is linked to peacetime gender inequality, which is strongly influenced by inequalities based on race and class. These inequalities perpetuate the exclusion of victim-survivors of sexual and gender-based violence in the country's current postconflict transitional justice period, subject victim-survivors to postconflict violence, and reinforce tolerance for sexual violence in peacetime. If the international community and the Peruvian government recognize and address these inequalities, then Peru may witness a reduction in sexual and gender-based violence. Wartime rape can involve a range of acts, motivations, meanings, perpetrators, and victims. Peruvian legal and social definitions of sexual violence need to be inclusive of such variations and recognize that the internal conflict produced victim-survivors among women, men, and children. Domestic institutions should stop dismissing rape as a common crime and start prosecuting rape in war as a crime against humanity, as Peru formally recognized when it signed the Rome Statute of the International Criminal Court. Building on existing legislation would send signals to the international community and to victim-survivors of the war that Peru takes its citizens\' rights in both war and peace seriously. Sexual violence precedes and survives conflict, which creates a continuum of violence. National policies framed within an understanding of this continuum would be better able to guide international, nongovernmental, and community-based organizations operating in Peru regarding programs that address intimate partner and family violence. Such programs are essential for breaking cycles of violence. Reparations and criminal justice are tools of redress that recognize suffering, resilience, and citizenship. While Peru is currently using these tools, they do not seem to apply to victim-survivors of sexual and gender-based violence. An inclusive politics of justice would break through this historical marginalization.
Topic:
Democratization, Gender Issues, Human Rights, and War
Political Geography:
Latin America and Peru

478. Dangerous Uncertainty ahead of Venezuela Elections

Publication Date:
06-2012
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Uncertainty over President Hugo Chávez's health adds to Venezuela's fragility in the run-up to October's presidential election. Amid deep polarisation, his illness overshadows the campaign, while the personalised nature of his rule, weakened institutions, and high levels of criminal violence bode ill for stability even beyond the polls. Brazen violation of the constitution would probably require army support, which not even the president can bank on; regional powers, too, would eye such action warily. But with much at stake, upheaval, even a violent political crisis, remain dangerous possibilities. Political leaders should condemn violence and pledge publicly to respect the constitution – whatever lies ahead. Venezuela's partners in the region should press for international observation and signal clearly they will not condone unconstitutional acts.
Topic:
Democratization, Political Economy, and Regime Change
Political Geography:
Latin America and Venezuela

479. Police Reform in Guatemala: Obstacles and Opportunities

Publication Date:
07-2012
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
The 25,000 members of the National Civil Police (PNC) are on the front lines of Guatemala's battle against crime. But all too often citizens distrust and fear the police – widely dismissed as inefficient, corrupt and abusive – as much as the criminals. Underfunded, poorly trained and often out-gunned, they are frequently incapable or unwilling to con-front criminals and gain the public trust needed to build a state based on rule of law. Drug traffickers, including Mex-ican cartels, move at will across porous borders, while criminal gangs dominate many urban areas. The government of President Otto Pérez Molina must reboot and revitalise police reform, as part of an overall effort to strengthen justice and law enforcement, with financial support from the U.S. and other countries interested in preventing Guatemala from becoming a haven for organised crime. Progress has been made, but achievements are fragile and easily reversed.
Topic:
Security, Corruption, Crime, and Law Enforcement
Political Geography:
United States and Latin America

480. Egypt's Perfect Economic Storm

Author:
David P. Goldmann
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Journal of International Security Affairs
Institution:
Jewish Institute for National Security Affairs
Abstract:
A year after the overthrow of Hosni Mubarak, Egypt's economic crisis has become a uniquely severe event. Markets are now forecasting a devaluation of Egypt's currency by about two-thirds, as capital flight and an enormous structural trade deficit exhaust the country's foreign exchange reserves. With perhaps half of Egypt's population living on $2 per day, a major devaluation would price basic necessities out of the reach of tens of millions of people, despite the country's extensive (if inefficient) system of subsidies. The crisis seems uncontainable; Egypt's central bank appears to have exhausted its capacity to borrow from the domestic market, and is at odds with prospective foreign donors. As a result, Egypt now faces a financial collapse similar to those in over-indebted Latin American countries during the 1980s and 1990s, except with a crucial difference: the Latin Americans are all food exporters, while Egypt imports half its domestically consumed foodstuffs. The difference between Egypt and a Latin American banana republic is the bananas. This is an unprecedented state of affairs, a perfect economic storm. Egypt imports half its caloric consumption and is the world's largest importer of wheat. Economic collapse will “transform a peaceful revolution into a hunger revolution,” the second-in-command of Egypt's Muslim Brotherhood warned on February 3rd.1 After months of refusing to bargain with the International Monetary Fund (IMF), Egypt's government has begun negotiations for a $3.2 billion loan, or less than the amount of capital flight in December alone. But the involvement of the IMF has done little to reassure Egyptian investors. And on February 11, 2012, Egypt's Finance Minister said that his country would need $11 billion in external aid.2 Moreover, as of this writing, Egypt's insistence on prosecuting American democracy activists threatens to shut off American aid at a critical moment. It is possible that Egypt's leaders have abandoned hope of forestalling the crisis and are directing their energies instead toward finding a foreign entity to blame. Even under the most benign political conditions, though, it is unlikely that the West or the Gulf States would offer Egypt aid on the scale required to prevent a crisis. Unlike other countries threatened by famine, Egypt's requirements simply are too great for the rest of the world to shoulder for an extended period of time. Its governance, moreover, is so corrupt that its capacity to use foreign aid is in doubt. The most likely outcome is a humanitarian catastrophe too large for the rest of the world to ameliorate, and a political outcome too chaotic to permit large-scale humanitarian intervention, like Somalia. An implicit assumption of public policy is that all problems have solutions. Egypt appears to be an outstanding exception, a major nation in existential crisis for which no solution will be found.
Topic:
Markets
Political Geography:
America, Latin America, Egypt, and Somalia