Latin America Leaders See Opportunities for Economic and Social Growth in 2022
Despite the impact of the COVID-19 pandemic, Latin American leaders, speaking on the third day of the World Economic Forum’s virtual Davos Agenda 2022, expressed optimism for the region’s economic outlook in the coming year.
Latin America posted a solid economic recovery in 2021 and will most likely post moderate growth in 2022, as many countries continue to implement fiscal, social and health policies for a sustainable recovery from the pandemic. The region was one of the hardest-hit by COVID-19 but has turned things around with successful ongoing vaccination programmes.
Ivan Duque, President of Colombia, said: “Colombia closed 2021 with positive results”, noting his country’s positive economic growth and high percentage of vaccination rates. He said the goal for 2022 is to maintain growth while, at the same time, closing the social inequality gap.
Carlos Alvarado Quesada, President of Costa Rica, said 85% of his country’s population had received a second COVID shot and that the process of vaccinating children was under way. “The main thing for Costa Rica is our vaccination drive. This is the only way to exit the health crisis,” he said.
Other countries in the region, including Ecuador, Guatemala and Peru, also highlighted the success of their vaccination campaigns. As they continue to recover from the pandemic, the leaders said they were focused on rebuilding their economies with a particular focus on the labour market, trade, attracting foreign investment and sustainable energy.
Alejandro Giammattei, President of Guatemala, said: “The challenge we have now is not only to promote growth but to turn growth into something sustainable. We need to improve the labour market and create more jobs. This will lead to better prosperity, health and education.” Generating new opportunities and ensuring economic benefits would reach all parts of society which, he pointed out, would also curb migration. “The only thing that stops a person is a wall of prosperity,” he said.
Guillermo Lasso, President of the Republic of Ecuador, highlighted the need for governments to commit to ethics and principles. “We need economic and inclusive growth within the rule of law and programmes that promote new opportunities. It is not just about economic growth but about quality of life and social cohesion.”
José Pedro Castillo Terrones, President of the Republic of Peru, said his priority was economic reforms, noting that his government has invested $10 billion in strategic areas such as education, health and transport, and recently signed an infrastructure bill that will lead to more jobs. “We also want to invest in energy and natural gas, especially in transportation, so the entire country is connected,” he added.
The leaders agreed that connecting the region is key to Latin America’s future outlook. Several of the countries, including Ecuador and Guatemala, have signed new trade agreements with Mexico, indicating that it will open up free trade in the Pacific and their economies to foreign investment. “Integration is important,” President Giammattei said. “It reflects tighter and more interaction that enables us to improve the economic situation.”
The environment is another area that has seen increased regional cooperation. Ecuador recently signed a decree to expand a new marine reserve and protect an area north of the Galapagos Islands. The expanded area will eventually link the Galapagos with Panama’s Coiba islands, Colombia’s Malpelo and Costa Rica’s Coco islands. “When it comes to the environment, we need to have better integration, especially regarding biodiversity and climate change,” President Alvarado said.
Mauricio Claver-Carone, President, Inter-American Development Bank (IDB), stressed the importance of public-private partnerships in helping to achieve social and environmental goals. Regional integration mechanisms, such as the IDB, can provide funds to help Latin American countries build their post-pandemic recovery as well as back priorities ranging from healthcare and digitalization to climate change action, supply chains and education.
“The pandemic created unprecedented challenges, but it also opened historic opportunities for Latin America, especially in areas including digitalization, supply chains, SMEs, gender equality and climate action, and we are proud to be there, focused on helping countries seize those opportunities,” he said.
De-dollarization is gaining momentum
Brazil and China have reportedly struck a deal to ditch the U.S. dollar in favor of their own currencies in trade transactions.
The announced deal will enable China and Brazil to carry out trade and financial transactions directly, exchanging yuan for reais – or vice versa – rather than first converting their currencies to the U.S. dollar.
The Brazilian Trade and Investment Promotion Agency (ApexBrasil) said the new arrangement is expected to “reduce costs” and “promote even greater bilateral trade and facilitate investment.”
China is Brazil’s largest trading partner, accounting for more than a fifth of all imports, followed by the United States, according to the latest figures. China is also Brazil’s largest export market, accounting for more than a third of all exports.
China overtook the United States as Brazil’s top trading partner in 2009. Today, Brazil is the largest recipient of Chinese investment in Latin America, driven by spending on high-tension electricity transmission lines and oil extraction.
Brazilian President Luiz da Silva, sworn in on January, has moved to strengthen ties with Beijing after a period of rocky relations under his predecessor, Jair Bolsonaro, who used anti-China rhetoric on the campaign trail and in office.
An official meeting of all ASEAN Finance Ministers and Central Bank Governors kicked off in Indonesia. Top of the agenda are discussions to reduce dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies.
The meeting discussed efforts to reduce dependence on major currencies through the Local Currency Transaction (LCT) scheme. This is an extension of the previous Local Currency Settlement (LCS) scheme that has already begun to be implemented between ASEAN members.
This means that an ASEAN cross-border digital payment system would be expanded further and allow ASEAN states to use local currencies for trade. An agreement on such cooperation was reached between Indonesia, Malaysia, Singapore, the Philippines, and Thailand in November 2022. This follows from Indonesia’s banking regulator, stating on March 27 that the Bank of Indonesia is preparing to introduce its own domestic payment system.
Indonesian President Joko Widodo has urged regional administrations to start using credit cards issued by local banks and gradually stop using foreign payment systems. He argued that Indonesia needed to shield itself from geopolitical disruptions, citing the sanctions targeting Russia’s financial sector from the US, EU, and their allies over the conflict in Ukraine.
Moving away from Western payment systems is necessary to protect transactions from “possible geopolitical repercussions,” Widodo said.
Of the ASEAN nations, just Singapore has enforced sanctions on Russia, while all other ASEAN nations continue to trade with the country. There has been alarm at being caught up in US-led secondary sanctions, as are short to impact Central and South Asia countries involved in cotton manufacturing, a major industry in the region employing millions of people.
U.S. bank trouble heralds The End of dollar Reserve system
The US banking system is broken, stresses ‘The Asia Times’. That doesn’t portend more high-profile failures like Credit Suisse. The central banks will keep moribund institutions on life support.
But the era of dollar-based reserves and floating exchange rates that began on August 15, 1971, when the US severed the link between the dollar and gold, is coming to an end. The pain will be transferred from the banks to the real economy, which will starve for credit.
And the geopolitical consequences will be enormous. The seize-up of dollar credit will accelerate the shift to a multipolar reserve system, with advantage to China’s yuan as a competitor to the dollar.
Gold, the “barbarous relic” abhorred by John Maynard Keynes, will play a bigger role because the dollar banking system is dysfunctional, and no other currency — surely not the tightly-controlled yuan — can replace it. Now at an all-time record price of US$2,000 an ounce, gold is likely to rise further.
The greatest danger to dollar hegemony and the strategic power that it imparts to Washington is not China’s ambition to expand the international role of the yuan.
This crisis is utterly unlike 2008, when banks levered up trillions of dollars of dodgy assets based on “liar’s loans” to homeowners. Fifteen years ago, the credit quality of the banking system was rotten and leverage was out of control. Bank credit quality today is the best in a generation. The crisis stems from the now-impossible task of financing America’s ever-expanding foreign debt.
America’s chronic current account deficits of the past 30 years amount to an exchange of goods for paper: America buys more goods than it sells, and sells assets (stocks, bonds, real estate, and so on) to foreigners to make up the difference.
America now owes a net $18 trillion to foreigners, roughly equal to the cumulative sum of these deficits over 30 years. The trouble is that the foreigners who own US assets receive cash flows in dollars, but need to spend money in their own currencies.
Before 1971, when central banks maintained exchange rates at a fixed level and the United States covered its relatively small current account deficit by transferring gold to foreign central banks at a fixed price of $35 an ounce, none of this was necessary.
The end of the gold link to the dollar and the new regime of floating exchange rates allowed the United States to run massive current account deficits by selling its assets to the world.
In effect, the market worries that buying inflation protection from the US government is like passengers on the Titanic buying shipwreck insurance from the captain. The gold market is too big and diverse to manipulate.
The dollar reserve system will go out not with a bang, but a whimper. The central banks will step in to prevent any dramatic failures. But bank balance sheets will shrink, credit to the real economy will diminish and international lending in particular will evaporate.
Southeast Asia will rely more on its own currencies and the yuan. The dollar frog will boil by slow increments.
It’s fortuitous that Western sanctions on Russia during the past year prompted China, Russia, India and the Persian Gulf states to find alternative financing arrangements. These are not a monetary phenomenon, but an expensive, inefficient and cumbersome way to work around the US dollar banking system.
As dollar credit diminishes, though, these alternative arrangements will turn into permanent features of the monetary landscape, and other currencies will continue to gain ground against the dollar, concludes ‘The Asia Times’.
Mastering Writing Skills: Write Effectively for Academic and Professional Success
Most people underestimate the importance of knowing how to write. In school, students are assigned paper after paper. The results help teachers grade their knowledge. But, that’s not the main reason why these are assigned. Essays and other papers give students practice, and a chance to learn effective writing. It’s a lifelong skill that not only serves to land them a passing grade but can also help them boost their professional success later on.
How to Master Your Writing Skills
If you want to make sure that you learn how to write better, both for academic and professional success, here are some tips and tricks for you.
1.Ask Someone to Write for You
The best way to learn how to write is to read what you need to write. If you aim for academic success but don’t know how to craft a paper that gets you an A, get some writing help from a reliable service. Today you can simply go online and request to write my essay and you’ll receive a top-notch assignment. This isn’t just to help you meet a deadline or land a high grade. You can also use it for college learning – to read what a good paper should look like.
When you have a finished piece of writing, this can be your guide. Students often order papers online to meet deadlines or make sure they get a high grade. Even if this is the case, use the opportunity to learn, too – next time you need to craft a similar paper, refer to the one written by an expert to boost your writing skills.
2.Read What You Like
Reading is an amazing way to boost your writing skills. How is this possible, you wonder?
For starters, reading books, articles, other papers, or anything else – can boost your vocabulary. When you read, you also come across different writing styles, giving you ideas for when you need to write.
Even though it might not seem this way when you actually read, reading gives you a lot of useful information that is stored in your subconscious.
If you want to master writing, truly master it, you need practice. Those essay assignments are not enough. You should do some free writing, too. Start your blog or journal, write letters to your peers, join a writing workshop, etc. Just write for the sake of it – practice is very important!
4.Don’t Skimp on the Editing Part
Editing is as important as writing itself – maybe even more important. While some mistakes might be acceptable in school, these are never welcome in professional circles. A single, unintentional mistake can have a devastating effect and ruin the quality or the message in your writing.
Research and writing are tiring, but this is no reason to skip the editing part and submit the work in a rush. If you want to learn to write better, you need to start by editing your work. When you proofread and edit it, you can find the most common mistakes you make and learn how to avoid them.
5.Focus on the Structure
The first draft is often a result of free writing. It’s good to write with the flow without focusing on the details, the mistakes, or the structure. This allows your thought to run without interruptions.
But, you can’t submit the first draft of any writing – not if you want it to be good.
In addition to editing the mistakes out of your writing, focus on the structure, too. Structure makes sure that your ideas get across to those who read the content.
Outlines are very useful for this. Many students see them as a waste of time since they aren’t formally required. However, a good outline can actually cut down the time you spend on editing and formatting your task. It will also make sure that the information in your essay flow and are clear to the reader.
6.Ask for Feedback – and Use It!
Unless you’ve mastered the skill of writing, you’ll make mistakes. This is how you learn, and there’s no shame in it. It’s also the time when feedback can really help you. Ask your mentors, your peers, your parents, and friends to take a look at your writing. Ask them to be blunt and tell you what flaws they find in your writing.
You might not accept all of their notes and feedback, but learning how others view and understand your writing is very useful.
Writing requires some talent but most importantly, it requires practice. It is something you learn in time, which is why it’s assigned at every academic level. So, practice, practice, and practice some more. This is how you’ll master the skill!
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