Opinion

The Great Debate

from Breakingviews:

Ecuador economic “miracle” meets maturity

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Turn on state television here, and within an hour or so a public service message will appear extolling the “Ecuadorean miracle” of President Rafael Correa. The advertisements highlight big new infrastructure projects and endorsements by experts, even an American or two.

Coming on one of the many formerly private channels that Correa tucked under government control during his seven years in office, it’s easy to dismiss this as propaganda. Yet here’s the thing: nearly every ordinary Ecuadorean I met during a recent stay was able to answer the Reaganesque question, “Are you better off now?” in the resounding affirmative.

To the amazement of Correa’s critics, Ecuador has undergone a relatively sustained period of economic progress since he took office in 2007. Annual growth in gross domestic product has averaged 4 percent. Unemployment is below 5 percent. Wages are up. Inflation is a tame 3.1 percent thanks to the dollarization of the economy before his accession. The percentage of Ecuador’s 16 million people living below the poverty line has dropped to 25 percent from some 45 percent before Correa became president.

The infrastructure improvements are evident everywhere, from the shiny new Quito airport and the highway that leads to the capital, to the 95 new bridges spanning the jungle chasms of the Amazon region. Regional hospitals are being built, and universal education has been made more accessible to everyone, its quality improving. Infant mortality rates shrink every year.

The looming U.S.-China rivalry over Latin America

President Barack Obama meets with Chinese President Xi Jinping (L) in California, June 7, 2013. REUTERS/Kevin Lamarque

Though the U.S. and Chinese presidents heralded a “new model” of cooperation at their weekend summit, a growing competition looks more likely. The whirlwind of activity before President Barack Obama met with President Xi Jinping in the California desert revealed that Beijing and Washington’s sights are set on a similar prize — and face differing challenges to attain it.

Their focus is Latin America and the prize is increased trade and investment opportunities in a region where economic reforms have pulled millions out of poverty and into the middle class. Latin America is rich in the commodities and energy that both China and the United States need, largely stable politically and eager to do deals.

Post Chavez: Can U.S. rebuild Latin American ties?

The funeral of Venezuelan President Hugo Chavez earlier this month was a massive celebration of a vitriolic foe of the United States. This tribute should make Washington take a fresh look not only at its relations with Venezuela but also with all of Latin America.

Virtually every Latin American country sent a high-level delegation to show its esteem for Chavez, who, during his 14 years in office, regularly vilified the United States, disparaged its leaders and campaigned tirelessly to end the U.S. role in the region. The presidents of Latin America’s six largest nations — including the closest U.S. regional allies, Mexico, Colombia and Chile — traveled to Caracas for the burial ceremonies. Never in Latin America, as many commentators noted, has a deceased leader been given a grander memorial — not even Argentina’s adored Juan Domingo Peron back in 1974.

This extraordinary acclaim for Washington’s most virulent adversary in the Americas was probably not intended as a deliberate snub. There were other reasons that so many of Washington’s friends ended up applauding a committed antagonist of the United States.

With Chavez gone, what of ‘Chavismo’?

“The End of the Chávez Era” That was the headline on Colombia’s major newspaper, El Tiempo, the day after Hugo Chávez’s death.

True, Chávez’s controversial and colorful 14-year rule has ended, and Venezuela has lost a president who evoked uncommonly intense passions among followers and detractors.   Venezuelans will not easily forget a leader who, for better or worse, was the consummate showman and left an indelible mark on a highly polarized society.

Yet Chavez also followed in a long line of caudillos, or strongmen, who have been a notable feature in Latin America’s political history. Indeed, Venezuela has had its fair share. As the acute observer Gabriel Garcia Marquez, Colombia’s Nobel Prize-winning writer, noted soon after Chávez’s 1998 election, the new president’s seductive rhetoric recalled so many of the region’s other leading political figures — but he could well end up as yet another Latin American despot.

from The Great Debate UK:

A bet against Castro’s immortality

REUTERS-- Neil Collins is a Reuters columnist. The opinions expressed are his own --

LONDON, April 23 (Reuters) - "Practically everyone who follows Latin American events agrees that Castro's end is near." Thus one Laurence W Tuller, writing in 1994 in his manual on high-risk, high-reward investing. Defaulted Cuban government bonds had jumped on hopes of a settlement to allow the country back into the international capital markets.
Today, former leader Fidel Castro's end is 15 years nearer, but he's still there, albeit in semi-retirement, and holders of these pre-Castro bonds with a face value of around $200 billion are still waiting. Castro's regime kept good records, but have paid no interest, and ignored redemption dates since his revolution half a century ago.
Few Americans can remember why their administration has been so beastly to Cuba for so long.
Those who can mostly live in Florida, a key swing state, and many risked everything to get out of Cuba. They do not want to see their investment devalued by hordes of their former compatriots simply walking off the Delta Airlines flight from Havana.
Last week U.S. President Barack Obama eased the squeeze somewhat. Americans can now visit Cuba, but only if they have relatives there.
This gesture has re-ignited the bondholders' old hopes. Past settlements of defaulted sovereign bonds have tended to pay about half the total of accrued interest plus principal, so the buyers see plenty of upside.
Exotix, a specialist trader in "frontier markets", says its price for a typical Cuban bond instrument has risen from around 9 cents on the dollar at the start of this month to 14 cents on April 23.
Mind you, the spread is wide, the market thin and as events crowd in on the President, he might feel there are more pressing problems than to risk upsetting those key-voting Floridian Cubans.

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