Evo Morales wins in Bolivia and New York, Ecuador controversy, ALBA Controversy and more.
After the Referendum
Bolivia is expected to see further nationalizations and political instability after President Evo Morales won Sunday's referendum. Already one of the opposition governors who lost has stated that he will stay. The victory by Morales gives him a fresh mandate to redistribute petroleum royalties and private farmlands among Bolivia’s poor indigenous majority, the New York Times reports. Over the weekend, Mr. Morales's government said it had secured $225 million in financing from Venezuela and Iran to create a state cement company. The move would deal a blow to a top political rival who controls much of the country's cement output, according to the newspaper.
Court Victory in New York
The referendum vote isn't the only good news for Morales these days. Nearly two weeks ago - on July 30 - New York federal judge Laura Swain ruled in favor of Bolivia and against European investors in Bolivian telephone company Entel. The investors had attached $85 million of its assets in banks in New York and the UK, trying to head off its nationalization by the Morales government, as well as to secure a down payment on compensation from Bolivia they seek at the International Centre for the Settlement of Investment Disputes (ICSID). “Judge Swain’s ruling establishes a very clear precedent for sovereign nations pursuing a policy of nationalization," says Washington, DC-based Foley Hoag LLP partner Paul Reichler, who represented the government of Bolivia in the case. "Her decision prevents foreign investors from going outside the arbitral process to obtain an unfair advantage by freezing bank accounts, as well as from putting undue pressure." The attachment violated the U.S. Foreign Sovereign Immunities Act, he adds. A British court announced a similar decision earlier in July.
Ecuador Controversy
Attempts by U.S.-based oil company Chevron to tie Ecuador's ATPDEA extension to its commitments - a position supported by Latin Business Chronicle in an editorial last week - has generated controversy in the Andean country. The American Chamber of Commerce in Quito sent out a press release saying that they favor an ATPDEA extension. If the ATPDEA is not extended, the chamber says, “it will have minimum repercussions on the government of Ecuador, but a significant impact on the private sector which benefits from the program.” The chamber also says that the United States has benefited from Ecuador’s ATPDEA membership through job creation in the United States and Ecuador’s results in fighting drug trafficking.
Honduras Joins ALBAHonduran president Manuel Zelaya surprised local and foreign investors by announcing that the Central American country was joining ALBA - the political-economic group led by Venezuelan strongman Hugo Chavez. "If something doesn't bring any benefits [and] there's no real value, neither in the near or long term, what's the point?" asked Oscar Galeano, the vice president of Honduras' private-sector organization Cohep. The group's secretary general Benjamin Bogran says joining the anti-globalization ALBA contradicts Honduras' globalization, according to French news agency AFP. Honduras is the third-most globalized country in Latin America after Panama and Chile, according to the latest Latin Globalization Index from Latin Business Chronicle. Zelaya denies claims by his vice president that he is using public funds to buy support among Honduran legislators, AP reported this weekend. The ALBA move further undermines Zelaya's popularity among business executives and follows his repeated attacks against foreign oil companies, the continued rampant corruption and constant changes of key officials. Zelaya and Chavez are scheduled to sign Honduras' ALBA entry next week.
Where Did Bipartisanship Go?
Former US Trade Representative Carla Hills laments the lack of bipartisanship in trade matters. "Notwithstanding the proven benefits that our trade agreements deliver, in recent years we have seen a sharp reversal of the bipartisan consensus favoring the free flow of goods, services, capital, and ideas that has guided our nation for the past 60 years, and the election debates have polarized the trade debate even more," she said in a senate hearing July 29. "It is hard to believe that just over a decade ago the United States, led by a Democratic administration, was celebrating the passage of the North American Free Trade Agreement, pledging with 33 other democratically elected leaders of the Western Hemisphere to negotiate a Free Trade Area of the Americas, and endorsing an agreement reached among the 21 economies of the Asia Pacific region to liberalize trade throughout that region." A lack of information, combined with economic anxiety, are the two key reasons for the change, Hills says.
Cuba SanctionsMeanwhile, another former USTR, Charlene Barshefsky, calls for a lifting of the US sanctions against Cuba. "We need a fresh start with Latin America," she said in the same hearing as Hills. .This should include steps toward eliminating the embargo on Cuba, which does more to undermine than to enhance our ability to influence events there and promote our broader hemispheric interests."
InterContinental Academy
The InterContinental Hotels Group (IHG) recently announced that as part of its career development program, it has spearheaded a plan to give employees from Latin America the opportunity to attend The Panama International Hotel School, which opened this past April. The educational patronage includes covering all expenditures for the selected employees’ travel expenses, tuition, room and board while attending the school. All costs will be covered by IHG and shared with the employee’s respective hotel. Additionally, IHG announced that two scholarships to the school were also awarded to Panamanian citizens. Panama President Martin Torrijos attended the recent launch event, along with IHG executives Tom Murray, COO, the Americas and Alvaro Diago, Area President for Latin America and Herman Bern, president of Empresas Bern and the developer of the school. The event also marked the inauguration of the Holiday Inn City of Knowledge at Panama Canal, also developed by Bern.
