Promoting India Latin America Collaboration

Venezuela strays from its policy of nationalization

February 12th, 2010 Posted in Energy, Investing, Latin America, Politics, United States
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Venezuela has been particularly hard hit by the global recession over the last few years. Last year alone, the country experienced 27% inflation and a 2.9 percent decline in economic output. Times are tough enough, in fact, that famed “anti-capitalist and Marxist” Hugo Chávez has declared that, “Investment and experience from foreign oil firms is necessary in Venezuela. We need it.”

Venezuela has long been criticized by the US and others for its policy of nationalization, which it has pursued with vigor in industries like telecommunications and oil. Chávez actually nationalized the entire oil industry in 2007, but recently, that trend has begun to change; Chevron inked a deal worth multi-billions of dollars to drill in Venezuela after it submitted the winning bid for some oil blocks in the first oil auction since Chávez took office 11 years ago. A second group of companies, previously highlighted on this blog, won a different set of oil blocks.

According to the NY Times, this deal signals a significant shift in strategy for Venezuela and Chávez.

After clashing with foreign oil companies in recent years, President Hugo Chávez of Venezuela has shifted strategy and awarded contracts to Western oil companies, hoping to increase his nation’s flagging oil production and pull the country out of a sharp economic downturn.

Chevron, the American oil giant, led a group of companies that won one of the concessions on Wednesday night…

Furthermore, this shift in oil policy may indicate that Venezuela will be seeking warmer relations in general with the United States and other countries that Chávez has been prone to demonizing.

In an unusual display of warmth given his friction with Washington, Mr. Chávez happily greeted a senior Chevron executive in attendance, Ali Moshiri, the company’s president of African and Latin American operations. Mr. Chávez conceded that differences remained with the Obama administration, but he also extended an invitation for President Obama to visit Venezuela’s southern oil region, telling Mr. Moshiri, “You bring him here.”

This latest development in Venezuela may be part of a general shift in Latin America from the left to the center. Other indications of this current centralist trend include the election of a right-wing billionaire in Chile’s presidential election, the strong success of Brazilian President Lula who governed from the center-left, and an overall decline in combative left-right discourse throughout South and Central America.

Popularity: 3% [?]

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Indian Companies See Growth Opportunities In Latin America

February 11th, 2010 Posted in Agriculture, IT, India, Latin America, M&A
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Latin America gets almost zero coverage in the Indian media, who is affliced with extreme ‘SouthAsianitis’ in their news coverage. Many Indian executives have never seen a visual of the region.  The occasional coverage is the annual carnaval in Rio, the World Cup every 4 years featuring plenty of LatAm teams, and the anti-yankee rants emanating from Venezuela and Cuba. From my experience, a number of Indian executives believe that Latin America is a disease-ravaged, war-torn place with a refugee problem! I have to disabuse them of this notion. Indian IT and pharma companies are also showing that this is far from the truth, and are the pioneers in opening these markets for further investment by Indian companies in other sectors.

Even from my experience in US media, Latin America is viewed through the composite lens of illegal Mexican immigration, the anti-Castro Florida lobby and narcotrafficking. As if nothing else exists. Latin American countries, with the exception of Chile, have not aggressively pushed positive P.R. to attract foreign investment. For a changes, here is a Canadian perspective on LatAm.
WSJ.com

More and more Indian companies are looking to do business in Latin America as they seek exposure to growing markets. The ties are also manifesting themselves on a policy level with trade agreements between India and South American countries picking up.

Like those of its Asian neighbor, Indian companies are seeing Latin America as a more secure investment destination, thanks to broadly stable government and economic policies. These markets are also increasingly becoming a potential lifeline as India deals with food shortages and droughts.

“In India, consumption is growing while the land is diminishing but here in Latin America we don’t have any such land-shortage problems,” said Rengaraj Viswanathan, India’s ambassador to Argentina, Uruguay and Paraguay, who has been pushing for Indian companies to set up shop in the region.

Indian companies have invested around $9 billion in Latin America during the last several years, according to Viswanathan, and “that number is just going to keep on growing.” The next step in this trend is the agribusiness side, market watchers say.

Shree Renuka Sugars Ltd. (532670.BY) late last year became the first [Indian] agribusiness to enter South America with its takeover of Brazilian Vale Do Ivai SA Acucar E Alcool. The company is eyeing more acquisitions in Brazil, the world’s top sugar producer.

India’s recent transformation from an exporter into an importer of sugar, thanks to rapidly rising domestic consumption, has caused many companies to look outside the country in order to maintain supplies. Ethanol, too, is growing in importance as some Indian states have set mandatory guidelines on ethanol in the fuel supply.It’s a similar case for edible oils, where demand is outstripping domestic production.

As markets stabilized in the last few months of 2009, a series of Indian companies affirmed their plans to increase their exposure to Latin America. Tata Consultancy Services Ltd. which already has sizable operations throughout the region, said in September that it was eyeing several acquisition targets. And just recently at the World Economic Forum in Davos, Switzerland, Tech Mahindra Ltd.  Chief Executive Sanjay Kalra said his firm is “very interested” in mergers and acquisitions in Latin America. Information-technology companies see plenty of opportunity in the region using service centers to tap local customers and also to serve clients in a slowly rebounding U.S. economy.

Popularity: 7% [?]

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Agriculture Opportunities for India in Latin America – Speech at CII Partnership Summit

February 9th, 2010 Posted in Agriculture, India, Latin America
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I was invited to speak at the CII Partnership Summit held in Chennai  at the session on New Trade Routes. I spoke on how Latin/South America is well-positioned as the world’s agriculture outsourcing hub, and can meet India’s needs for food security.  See video below:


The recent price rise in food items which has caused heartache and wallet-ache for many Indian households is a phenemenon that will worsen in the years ahead. The near quadrupling in the price of toor dal (split pigeon pea) over the last 3 years is only a trailer in the coming horror movie of spiraling food inflation. With Indian incomes forecast to rise over the next decades, food consumption will skyrocket. On the edible oil front, the annual additional deficit of 350,000 to 450,000 tons projected by the Solvent Extractors Association of India is the equivalent of every Indian eating an additional samosa or bhajji every year; this is an exponential increase in demand. The same is the case with pulses and other commodities.

Forgetting the recent blame game for rapid food price in India – accusing politicians, traders, speculators, hoarders for this recent food increase, the main reason has been prolonged underinvestment on the supply side of food production, because Indian farming has been a sector with terrible incentives. Not surprisingly, 45% of Indian farmers want to quit farming. Add to that rapidly falling water tables in North India – India’s bread basket, and erratic monsoons from climate change you have the recipe for domestic food output falling short of demand, repeatedly in the future.

Latin America can meet India’s food needs, a place where agriculture commands the status of IT in India, with the best brains and fortunes in that sector. Indian companies should join US, European companies who have realized this, and participate in the agri value chain there – investing in contract farming to agroinputs to food processing to logistics.

Popularity: 6% [?]

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Fair and Peely

January 18th, 2010 Posted in Arts, Culture and Society, India, Latin America
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This is an obvious cultural similarity across India (with ubiquitous Fair and Lovely ads for women and men)and Latin America – use of skin whitening creams. You think in their competitive quest for more face whitening, marketers will soon talk people of color into splashing diluted Clorox on their faces.
via NYTimes.com

For years, Allison Ross rubbed in skin-lightening creams with names like Hyprogel and Fair & White. She said she wanted to even out and brighten the tone of her face, neck and hands. Mrs. Ross, 45, who lives in Brooklyn, also said that she used the lightening creams “to be more accepted in society.”

“I never read the labels,” Mrs. Ross said. Instead, she took her cues from friends, many of them, like her, from the West Indies. “Once somebody told me Fair & White was the one they were using, I’d go to the Korean store and ask for it,” she said.

Dermatologists nationwide are seeing women of Hispanic and African descent, among others, with severe side effects like Mrs. Ross’s from the misuse of skin-lightening creams, many with prescription-strength ingredients, which are sold in beauty shops and bodegas and online.

Users are not necessarily immigrants, said Dr. Eliot F. Battle Jr., who has a dermatology practice in Washington, where he treats side effects from lightening creams “not only containing corticosteroids, but mercury,” a poison that can damage the nervous system. The patients are “Ph.D.’s to women from corporate America, teachers to engineers — the entire broad spectrum of women of color,” Dr. Battle said.

But many others seek to lighten their entire face or large swatches of their body, a practice common in developing countries as disparate as Senegal, India and the Philippines, where it is promoted as a way to elevate one’s social standing. A small percentage of men in such countries also use the creams.

Evelyn Nakano Glenn, a professor of gender and women’s studies at the University of California, Berkeley, said it was wrong to assume that skin-lightening was a cultural anachronism or an effort to negate one’s racial heritage. “In fact, it’s a growing practice and one that has been stimulated by the companies that produce these products,” she said. “Their advertisements connect happiness and success and romance with being lighter skinned.”

Moreover, it is not as if dark-skinned women are imagining a bias, said Dr. Glenn, who is president of the American Sociological Association. “Sociological studies have shown among African-Americans and also Latinos, there’s a clear connection between skin color and socioeconomic status.

Popularity: 2% [?]

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Finding the Shipping Center of the World, in Graphical Form

January 18th, 2010 Posted in India, Latin America
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India-LatAm direct shipping links are abysmally low. Panama Canal and Santos in Brazil are the LatAm ports in the top 20 central ports.
via Infectious Greed

Transportation networks play a crucial role in human mobility, the exchange of goods, and the spread of invasive species. With 90% of world trade carried by sea, the global network of merchant ships provides one of the most important modes of transportation. Here we use information about the itineraries of 16,363 cargo ships during the year 2007 to construct a network of links between ports.

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Popularity: 3% [?]

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Developing Cities from India to Colombia Leapfrog Ahead With Clean, Green Bus Rapid Transit Systems

January 16th, 2010 Posted in India, Infrastructure, Inspiration, Latin America
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Latin America cities are pioneers in deploying BRT and it is good to see Indian cities like Ahmedabad learn from this approach. This needs to be combined with road pricing, like in Singapore, to alleviate traffic delays and facilitate mobility.
The former mayor of Curitiba-Brazil, Jaime Lerner who was the pioneer in this approach details his philosophy for urban space and transit in this entertaining and informative talk below. Money quote from the talk – “The car is like your mother-in-law. You have to have good relationship with her but she shouldn’t command your life. If the only woman in your life is your mother-in-law you have a problem.” Also, “Otto, the car is the kind of guy who is invited for a party and never wants to leave. And he drinks a lot. And he’s a very demanding person.” “Creativity starts when you cut a zero from your budget, if you cut two zeroes even better.”

 TreeHugger

Ahmedabad, India, leads the pack as cities in developing nations race ahead of their richer counterparts in adopting eco-friendly transit solutions, according to the Institute for Transportation and Development Policy (ITDP), which last week gave the western Indian city its 2010 Sustainable Transport Award.

The award has been given out since 2005 to a city that best “uses transport innovations to increase mobility for all residents, while reducing transportation greenhouse [gas] and air pollution emissions and increasing cyclist and pedestrian safety and access.” This year, for the first time, all five nominees — Cali, Colombia; Curitiba, Brazil; Guadalajara, Mexico; and Johannesburg, South Africa, in addition to Ahmedabad — were cities in developing countries.

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Popularity: 3% [?]

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Comparative Indo-LatAm Geography (mountains + rivers)

January 10th, 2010 Posted in Ecology/Environment, Latin America, Visualizations
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Length Comparison in an old Victorian map between the rivers in South America – the Amazon, River Plate (La Plata), and Orinoco (made famous in song by Enya) with the rivers Ganges and Indus.

via Flickr Photo Download:

Popularity: 5% [?]

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TCS eyes 6-7 deals over $100 mn in Latin America

September 22nd, 2009 Posted in India, Latin America
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TCS eyes 6-7 deals over $100 mn in Latin America

India’s largest IT firm Tata Consultancy Services (TCS), is eyeing six-seven deals worth over $100 million in the Latin American region.

“Some of these deals are from Mexico and Brazil, from verticals like telecom, banking & insurance, retail and manufacturing as well,” said Gabriel Rozman, head of emerging markets, TCS.

Further, as a part of its continued expansion plan across Latin America, TCS has set up its delivery centre in Argentina. This is the eighth centre for the company in the region at a cost of $2 million (around Rs 10 crore). The centre, spread over 10,000 square metres, will initially employ 250 professionals, but has the capacity to house 1,000 people.

TCS recently announced the opening of a centre in Queretaro Mexico, in addition to centres available in Brazil, Argentina, Uruguay and Mexico. This is also the third Global Service Center for BPO in Latin America in addition to the TCS facilities in Chile and Uruguay.

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Popularity: 20% [?]

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Good Outlook for Brazil, LatAm

August 22nd, 2009 Posted in Economics - Indicators, Policy and Trends, Latin America
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Latin Business Chronicle

A survey by Brazil’s Fundação Getulio Vargas (FGV) business school and Germany’s Institute for Economic Research Institute (Ifo) shows that the economic outlook for Latin America in the coming six months is good.

The Economic Climate Index (ECI) for July 2009 shows that Latin America is entering the recovery phase of the business cycle, with Brazil recording the second highest economic climate index in the region. The ECI rose to 4.0 points in July from 3.6 points in April. A breakdown of the findings shows that while the Present Situation Index (PSI) is still low, the Expectations Index (EI) increased to 5.4 from 4.6 points between April and July.

A special survey was conducted to evaluate how the experts perceived the legal and administrative restrictions on foreign firms in their respective countries. Peru, Uruguay and Chile have been classified as countries without restrictions. Low restrictions have been attributed to Colombia, Brazil, Paraguay, Bolivia and Mexico. High restrictions were associated with Argentina, Venezuela and Ecuador.

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Popularity: 25% [?]

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Brazil: Dancing through the economic crisis

July 25th, 2009 Posted in Agriculture, Brazil, Economics - Indicators, Policy and Trends, Latin America
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Highlights from a summary article, part of a recent special report in the FT on Brazil.
FT.com / Reports –

This is the Brazil that finally, after years of unfulfilled promise, is catching the world’s attention – and sucking in foreign direct investment, while many rivals go without. It is a mature democracy with a diversified economy, a young, adaptable population revelling in increasingly stable employment and rising incomes. It is also a rising power in food and industrial commodities, a big future exporter of oil and home to the world’s fourth biggest derivatives and equities exchange.

Brazil, unlike Russia, India and China,… is also largely unthreatened by social, demographic or economic upheavals.
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Popularity: 23% [?]

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