The Times of India
At a time when global auto majors are struggling, carmakers in India have been able to expand their overseas presence with exports from the country registering whopping 57.04% growth in the last fiscal.
According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), passenger car exports from India touched 3,31,539 units in FY09 as against 2,11,112 units in the previous financial year.
Overall vehicle exports from India grew by 23.60% at 15,30,660 units in the last financial year, while the same stood at 12,38,333 units in the previous fiscal, SIAM said.
Technorati Tags: india, automotive, exports
On the sixth floor of one of Managua’s only high rises, young men and women spend hours on the phone in fast-flowing English. Televisions flash MTV and soccer, and walls of windows give a sweeping view of the city’s volcano-rimmed lake.
Calling in are customers from across the U.S. with questions about their mobile phone service. Every day, the slick new contact center, run by Tennessee-based outsourcing vendor Sitel, takes 15,000 calls.
Offshoring has brought Latin America thousands of similar sites in the last few years, as multinational clients tap the region’s cheap labor, good English and newly stable economies.
Now, the world financial crisis is speeding that trend, driving companies to further cut costs while the resurgent dollar makes hiring overseas more affordable.
For Latin America, the sector’s rise promises to reduce reliance on volatile commodity exports and to generate seed money to fuel future growth. And the customer service, technology and administrative jobs it is creating offer many a new ticket to the middle class.
Technorati Tags: nearshoring, call centers, IT, central america
Montevideo (“I see the mountain”)
It was here in Montevideo that we found some of the friendliest people in South America. Even the port police, usually a dour lot, have a ready smile for the traveler.
Montevideo’s Rio de la Plata (River of Silver), a muddy, churning mass of water only 190 miles long but 120 miles wide where it flows into the Atlantic Ocean. Depending on the wind, the Plate wavers between salt and fresh water.
Buenos Aires (Good Air). Forgive me, Eva Peron, but, for me, your gravesite can’t even compare with the city’s steakhouses. And forgive me, Texas, but you have a long way to go before your beef can even share a plate with the meat of Argentinean grass-fed cattle.
One of the top tourist destinations in the world, Buenos Aires is a clean, modern city with the sensual Latin beat of its countless tango clubs and the vibrancy of the mixed cultures of millions of immigrants who reached its shores in the 19th and 20 centuries.
Technorati Tags: latin america, tourism, uruguay, brazil, argentina, chile
Mexico as a nearshoring destination for manufacturing and IT companies.
The peso has dropped 41% vs. the dollar since August, making Mexican wages and rents more attractive compared with those in China, the U.S., or Canada.
Mexican goods can reach U.S. cities in two days, vs. a month from China—a big factor as importers slash inventory costs and lead times.
Mexico looks better than China when it comes to technology theft, quality issues, travel costs, and delays due to miscommunication.
Technorati Tags: mexico, investing, FDI
Markets-The Economic Times
According to Emerging Market Private Equity Association, institutional investors believe emerging markets will continue to present attractive investment opportunities in the coming year and plan to maintain or expand their exposure.
“Investors recognise that emerging economies are the only ones still growing, and they also know that, since private equity deals in emerging markets do not rely on debt, the collapse of the global leveraged finance markets will not impede deal flow,” EMPEA President Sarah Alexander said.
Of the BRIC (Brazil, Russia, India, China) economies, the fund partners ranked Brazil as the second most attractive destination for investment in the next 12 months behind China and just ahead of India, according to a survey by EMPEA.
“In India transactions are in the form of equity with no debt component. In contrast, the US and the Europe focussed funds are more into leverage buyouts for which they raise bank loans,” Venture Intelligence CEO Arun Natarajan said.
Technorati Tags: private equity, india, brazil
When I was in India in late Jan/Feb, I met officials at the State Trading Corporation. I was surprised to find out that imports of sugar when required do not happen directly with Brazilian companies/ who have capacity to spare but through brokers in Europe/Middle East.
An example of language and cultural barriers at work.
I had outlined this problem area in a post last year on uncertainty avoidance.
The example I gave was in a potential sugar deal – where the Brazilian side refused to send samples. At some point there Brazilian exporters will need to directly deal with Indian counterparts. These demand/supply shortfalls are bound to persist into the future as India gets richer and per capita sugar consumption rises.
Economy and Politics – livemint.com
The Union government will remove a 60% import duty on up to 1 million tonnes of white sugar for the next four months, government and trade sources said, and will also drop a requirement that raw sugar only be imported for re-export.
The Cabinet decision comes two months after the world’s biggest consumer of the sweetener waived tariffs on raw sugar imports, a response to a smaller-than-expected domestic crop.
“It has been decided that both white sugar imports and waiving the export obligation of imports of raw sugar will remain in vogue till 31 July,” a senior trade official told Reuters, requesting anonymity because the information isn’t public.
The measures, which could boost global prices in a market already in a steep deficit, require formal approval from the Election Commission, which guards against populist moves meant to win votes.
Three state-run trading firms and a farmers’ cooperative – the State Trading Corp of India Ltd, MMTC , PEC and National Agriculture Cooperative Marketing Federation of India (NAFED) – would be allowed to import up to one million tonnes of white sugar tax-free, a top government official said.
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a more compelling challenge to the current world order may be emerging from an unlikely trio of countries that boast both impeccable democratic credentials and serious global throw weight. They are India, Brazil and South Africa and their little-noticed experiment in foreign policy coordination since 2003 to promote subtle but potentially far-reaching changes to the international system has the potential to leave fears of a rising China in the dustbin of history.
The quasi-alliance of these three powers has serious implications for the international system, and its major underwriter, the U.S., depending on how the challenge is handled. But an equally important, and quite unintended implication, is the sabotage of China’s great power ambitions. By robbing China of its claims to represent developing countries, this new cooperative trio could sideline China from the major debates in international affairs. That may be good news for domestic reform in China, which has long been stunted by the country’s great power ambitions.
The origins of the India-Brazil-South Africa Dialogue Forum (IBSA) lie in South Africa’s quest for a new allies more consonant with its interests and ideas following the end of apartheid in 1994. The immediate impetus came from Brazilian president Luiz Inácio Lula da Silva, who floated a formal cooperation scheme in early 2003. In June of that year, the foreign ministers of the three countries inaugurated the group in Brasilia, calling for a strengthening of international institutions to address the concerns of developing countries in areas like poverty, the environment and technology. Since then, according to Sarah-Lea John de Sousa of Madrid’s FRIDE think tank, the trio has been gaining support as “spokesmen for developing countries at the global level.”
IBSA members note that they are “vibrant democracies” and Daniel Flemes of Hamburg-based German Institute for Global and Area Studies noted in a 2007 paper that “IBSA’s common identity is based on values such as democracy, personal freedoms and human rights.” Human rights, civil society, social empowerment and “gender mainstreaming” are central to their moral capital.
Indian and Brazilian diplomats in particular, already among the world’s best, can advance the IBSA agenda because they share common ideals.
Technorati Tags: IBSA, India, Brazil, values
During this economic slowdown, there’s an opportunity for Indian companies offering products with built-in intellectual property and compelling price/performance ratios especially in energy, pharma and specialty chemicals to enter the LatAm market. The Eximbank expanding lines of credit will also help. In a recessionary environment that promotes cost-cutting, it is not surprising that the Chinese imports are slowly replacing US imports in some sectors.
The global financial crisis will hurt Latin America and the Caribbean Basin even if rich nations start to recover in 2010, according to an Inter-American Development Bank study presented last month at a meeting in Medellin, Colombia, of the bank’s 48 member countries.
The annual average output growth, a macroeconomic indicator measuring the total value of goods and services produced in the region’s seven biggest economies — Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela — could slow to 1.9 percent over the next four years if developed nations begin their economic recovery in the second half of the year. However, growth could slow to an annual average of only 0.1 percent in the next five years if recovery in the United States and Europe takes longer than expected.
The economies of the seven nations, which represent 91 percent of Latin American output, grew 5.8 percent between 2003 and 2007.
Despite the grim outlook, the Washington, D.C.-based IDB has some reason for optimism.
“Latin America and the Caribbean are much more prepared to face the impacts of the financial crisis because of their lower levels of debt, debt dollarization, smaller budget deficits and high level of international reserves,” said Santiago Levy, a vice president at the IDB. “But they will still suffer the effects. Depending on how rapidly growth in the rest of the world picks up, the collateral damage of the crisis could be felt years to come.”
“A strong dollar and a lack of available trade finance have hurt the competitiveness of U.S products. Exporters are cutting costs and are doing all they can to sell products to the south,” Hart and Lestingi wrote. “They are battling competition from low-cost countries like China. Import tariff increases in Mexico (in response to the NAFTA dispute) and Ecuador have already made some Latin American markets unreachable for U.S. producers and South Florida exporters.”
Technorati Tags: latin america, trade finance
Colombia has been among the nations hardest hit in Latin America this year and its prospects may not improve as exports fall, said Nouriel Roubini, the New York University professor who predicted the financial crisis.
“It’s going to be a difficult year,” Roubini said in an interview in New York. “Colombia has been hit by the financial and economic crisis more than people expected.”
Colombia “looked in reasonably good shape” coming into the crisis, he said. Growth slumped to 2.5 percent in 2008, hurt by a 22 percent plunge in exports, from 7.5 percent in 2007, the fastest pace in three decades. Colombia’s central bank said April 3 that the economy was weakening more than it expected.
Colombia has been hurt by “trade shocks, the fall of exports to the region and outside and massive reductions from remittances from workers in Spain, who lost their jobs in construction,” Roubini said.
Chile, Brazil and Uruguay are the countries that may perform better in the region in the medium term, Roubini said.
“Those central banks which were more conservative and hawkish on inflation, like Chile and Brazil, can ease more aggressively,” Roubini said.
Technorati Tags: colombia, chile, uruguay, 2009 economic outlook