The salami technique

by The Economist Online for Americas View – The Economist, February 16th, 2011.

Almost every year, opponents in the United States of the American trade embargo on Cuba think that this year, they might gather just enough momentum to have the restrictions lifted. They have always been proven wrong. A number of factors conspire against them: a powerful pro-embargo lobby; a desire not to ruffle feathers in Florida, a politically influential state home to many Cuban-Americans; and the fact that 53 years after the Cuban revolution, the country is not enough of a priority to take up the necessary time in Congress. Furthermore, since 1992, when the Cuban Democracy Act effectively codified the various provisions of the then-haphazard embargo into federal law, the assumption has been that the only way to meaningfully end the embargo—barring radical political change in Cuba—would be via a vote in Congress.

Barack Obama’s policies towards Cuba since he became president have led some wonder whether there is another way. Using his executive powers, Mr Obama has already punched some significant holes in the embargo. For example, he has allowed American telecommunications companies to provide data and mobile-phone services to Cuba, although the Cuban government has not shown any interest in taking up the offer. He has lifted all restrictions on the amount of money Cuban-Americans can send to their families back home, and the number of visits they can make. And he has declared that Americans without relations in Cuba can send money to the island, as part of an initiative to help “private economic activity” there.

Now some are asking how much further the president can go. A recent legal analysis commissioned by the Washington-based Cuba Study Group argues that he does indeed have significant latitude. Amongst the actions it says the president could make at his own discretion are the lifting of restrictions on American ships travelling between the two countries, a further expansion of legal travel, and even the legalisation of imports produced by small, private Cuban businesses. If the analysis is right and Mr Obama is listening, by the time Congress next votes on the embargo, there might not be that much left of it.

First major legislative victory for Rousseff: keeps minimum wage on target

by Merco Press News, February 17th, 2011.

Brazil’s Lower House approved Wednesday a government proposal to limit a minimum wage increase to 545 Real a month, handing President Dilma Rousseff her first major legislative victory.The proposal will be voted on in the Senate next week, where it is expected to be approved.

A bigger rise, as sought by labour unions, could have derailed Rousseff’s drive to rein in public spending and tame inflation that hit a six-year high near 6% last year as the economy boomed. The government last week announced 30 billion USD in budget cuts for 2011.

Rousseff might come under growing pressure to backtrack on some of those cuts and has already signalled she may fall short of pledges for sweeping economic reform.

In theory, the government holds a comfortable majority in both houses of Congress. But due to weak party loyalty, it has had to cajole and court coalition members, including its own Labour minister.

The result by a strong majority in the Chamber showed Rousseff’s ability to harness her coalition even on issues sensitive to her constituents. (continue reading… )

Argentina’s January industrial production expanded 10.3% over a year ago

by MercoPress News, February 17th, 2011.

Argentina’s industrial production in January continued to expand at a quick pace, led by strong output of machinery and equipment, food, non-metallic minerals and chemicals, a local think tank reported Wednesday.

Argentina’s industrial production index expanded 10.3% in January from a year ago and was up 0.5% on the month, according to Orlando J. Ferreres & Asociados, or OJF. The index has fully rebounded from the steep drop seen in 2009, and is expected to continue to rise in the next month, OJF said.

However, manufacturing is running into bottlenecks, and energy shortages, particularly during the cold winter months, are causing problems. “Growth is expected in 2011, but this is mainly due to a statistical carryover from 2010, more than genuine expansion in industrial production,” OJF said.

Vehicle production is expected to hit a new record this year again. Almost 47,000 automobiles were manufactured in January, with expectations for production of over 800,000 this year, OJF said.

BlackRock bucks the trend in Brazil

by Jonathan Wheatley for Financial Times – Beyond Brics, February 17th, 2011.

Brazil, it seems, can’t do anything right. The government’s walkover victory in a crucial vote to restrain the national minimum wage on Wednesday night was one more demonstration of a commitment to fiscal austerity that investors just can’t bring themselves to trust. Figures out on Thursday from EPFR Global, which monitors fund flows, showed a rising preference for Brazilian bonds over equities as investors worry that slower growth will hurt corporate earnings.

But one of the biggest investors in Latin American equities disagrees. Will Landers, managing director for Latin America at BlackRock, which has $10.2bn under management in the region, is overweight Brazil and has been building positions as others pull out. (continue reading… )