RSS

Tag Archives: Latin America

Peru: From Machu Picchu to Mining and Minerals


Australia’s ties with Peru are growing steadily. After all, it was less than a month ago that Peru made headline news in Australia. Out of 2,500 tourists stranded at the popular tourist destination of Machu Picchu after a crippling mudslide, 170 of them were Australians!  The figure was hardly surprising as 25,000 Australian’s visit Peru every year.

But Machu Picchu isn’t all Peru has to offer Australia. In fact, never before Latin America looked so inviting and Peru is no exception. In 2008-2009 trade between Australia and Peru reached $A 252 million, Australian exports amounting to A$134 million. Australian exports were concentrated in milk and cream, civil engineering and parts, goods vehicles and analysing and measuring instruments.

Economic Performance

Like many of its Latin American counterparts the Peruvian government undertook a lot of privatisation and other market-orientated economic reforms in the 1990s and the affects have now taken hold. Peru has outperformed the rest of Latin America and indeed the rest of the world with impressive annual growth rates that peaked at 9.8% of GDP in 2008 before the onset of the global financial crisis. In the last decade, Peru has promoted trade through investment reforms and a series of bilateral FTA’s.

Mining

With out a doubt the mining and construction sector has been the back bone of Peruvian growth. Peru is one of the world’s top mining countries with large deposits of copper, iron and zinc. 60% of Peru’s merchandise exports are minerals and like Australia, Peru has benefited enormously from the boom in commodity prices.

The down-side of this of course is that Peru is vulnerable to any fluctuations in commodity prices and could experience a recession in the event of a slump. At the moment the GFC has delayed a number of large U.S-backed projects worth billions of dollars and as a result the Peruvian economy has slowed significantly. 

But the strong demand for minerals from China and Asia, as well as the number of large government projects has stopped the mining sector from grinding to a halt. If we’re lucky, numerous future projects should fuel demand for Australian engineers and suppliers of future goods and services. Peru remains incredibly attractive for Australian businesses.

The Peruvian market is no stranger to Australian business. There are several big-name Australian businesses already set-up in Peru including ALS Chemex, Pasminco Explorations, Rio Tinto, BHP Billiton, Burns Philp, Amcor Packaging, Orica and Downing Teal. Australian suppliers have succeeded in the Peruvian market for mining locomotives, slurry pumps and mineral processing control systems.

There is a lot more money to be made. Peru is going to need more mining equipment, gear, machinery, shovels, software, compactors, safety equipment and much more that could potentially come from Australia. We have the know-how, let’s use it. The economic relationship between Peru and Australia has a bright future!

 Amy Doyle – International Market Analyst

For more information or assistance, please contact Australian Business International Trade Services under 1800 505 529 or email Sara at sara.cheng@australianbusiness.com.au.

 
Leave a comment

Posted by on February 26, 2010 in Latin America

 

Tags: , , , , , , , , , ,

Colombia – Investors Sold on Peace and Security


For many investors the mention of Colombia has for decades been accompanied by the frantic waving of red flags. It is no longer the case. The unparalleled success of President Álvaro Uribe Vélez in reducing the prevalence of violence and unrest has translated to new heights of investor confidence.

Political Stability

Violence has been a mainstay of the Colombian nation. Simply put, the fighting has been between left-wing guerrilla groups and right-wing paramilitaries. Drug cartels fund the violence so that the guerrillas defend their cocoa crops from any government interference. Civilians have been very involved. The fighting has occurred in their backyard, and on their front lawn.  Their family members have been murdered and kidnapped.

It was no surprise then when in 2002, Uribe was elected on a platform to restore security and target violence. His language was highly explosive and his policies hard line – and guess what – they worked. The rebel groups have been left weak and fragmented and the most of the paramilitaries have been demobilised. He was re-elected in 2006 by a grateful citizenry.

The Colombian Economy

Despite the turbulent political environment the Colombian economy is diverse and relatively advanced. Its key exports include petroleum, coffee, bananas, emeralds, flowers and coal. After a crippling recession in 1999 in which GDP contracted 4.3% the economy was resilient and bounced back with an annual economic growth rate of 5% from 2002 to 2007. The economy was not immune to the recent crisis. GDP fell 0.7% at the end of 2008, and unemployment rose slightly in 2009. 

The momentum behind the economy is in part due to Uribe’s economic reforms on tax, pensions and the budget. But it is mostly due to his security policies. It is amazing what difference it makes when people no longer fear their income, notoriety or business could lead to their murder or capture. A secure political, civil and business environment has unsurprisingly increased FDI and exports!

 Opportunities

There is an array of opportunities available to Australian businesses in Colombia including wheat, corn, soy and seeds, cotton and yarns, environmental services, renewable energy and medical equipment to name a few. But the most promising areas are agriculture and mining. Agriculture and mining are important sectors to Colombia but are not yet fully developed. As firms become more developed they will look to advanced economies like Australia to import sophisticated technologies so they can increase efficiency and yield. Australia has the opportunity to export mining machinery and training to the Colombian oil, gas and coal sector and both genetic materials and live animals to the Colombian agricultural sector.

Amy Doyle – International Market Analyst

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Robert at robert.trzebski@australianbusiness.com.au.

 
Leave a comment

Posted by on February 12, 2010 in Latin America

 

Tags: , , , ,

Cup Half Full in Brazil?


Based on the article “Cup Half Full in Brazil?” by Simon Tarmo, from his Brazil 2014 blog, 18 May 2009

Simon Tarmo is a journalist from Sydney and co-founder of the industry journal Australian Sponsorship News. He now lives in Belo Horizonte, Brazil, and is currently focusing on business opportunities involving the 2014 FIFA World Cup in Brazil.

 

After the announcement of the 12 Brazilian cities to host the 64 World Cup matches in June and July 2014 the only question remaining is just how much work needs to be done before Brazil is ready to rumble. Most stadiums around the major host cities, even those in Sao Paulo or Rio de Janeiro, still don’t meet the minimum standards required by FIFA. The relatively short timeframe to tend to issues ranging over media, technology, infrastructure, hospitality facilities, and security, will pose a major challenge to the country.

Security is one of the most important aspects to be addressed before 2014. The Brazilian government has already started implementing its ‘Torcida Legal’ (literally ‘legal supporter’) project, which features the installation of complex crowd monitoring and security technology in all locations with a capacity of more than 10,000 spectators.

The project is aimed to set standards for the control of access to the stadia, the amount of video cameras required to monitor the area, and the setting up of fully functional security centres around the sites. The facilities are to be at least mainly efficient for the start of this year’s domestic soccer season and ideally up to scratch for the 2013 Confederations Cup, one year before the big event.

It will be an interesting to watch how it all turns out. Sinaenco, Brazil’s national association of architectural and consulting engineering companies, is certainly convinced that Brazil will live up to the expectations and is fully capable of developing and managing all projects regarding the event. Indian-based company Satyam, FIFA’s official technology sponsor for the 2010 and 2014 World Cups, has significantly increased its involvement in the Latin American market and most certainly hopes to get as big a piece of the cake as possible. Especially after its rather unpleasant ramble over the resignation and later arrest of founder and chairman, Ramalinga Raju, Satyam is eager to set the record straight and leave a good impression in Brazil. In South Africa, for instance, Satyam is responsible for the development of the core IT event management system for FIFA.

Enough of the prognosis! After all, it is the party centre of the world we are talking about, the country of Carnaval and Samba. No matter how big the obstacles, Brazil definitely has a strong desire to show what it’s worth and we will be following its progress with excitement. It would not be the first time that all the prior talk about possible failures turns out to be nothing but rambling.

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Robert at robert.trzebski@australianbusiness.com.au.

 
Leave a comment

Posted by on February 11, 2010 in Latin America

 

Tags: , , ,

What’s So Special About Chile Anyway?


 The answer is simple.  If you want to do business with any Latin American country you cannot pass Chile. It is essentially the entry gate to the regional market. And Australia’s recently signed Australia-Chile Free Trade Agreement (ACI-FTA) has just brought us a little bit closer to this gate.

 Chile is Australia’s third largest trading partner in South America, with two-way trade valued at over AU$ 1 billion in 2008. Australia is the fourth-largest foreign investor in Chile, with around 50 locally-registered Australian companies providing AU$ 3.4 billion of direct investment. But those are just numerical attributes. They are not the only reasons why we love Chile.

 With a population of 16.6 million and a GDP of AU$ 190 billion in 2008, Chile is Latin America’s most stable and transparent commercial environment. There is widespread political consensus in favour of economic liberalisation, with reforms – including privatisation and deregulation – remaining a government priority even during Chile’s past 20 years of leftist rule. This continued liberalisation has led to increased competitiveness and substantial growth in Chile’s traditional export sectors, including mining, fishing, fruit and vegetables, aquaculture, forestry, wine, and services.

 What else is there to know about Chile’s economic environment that makes people want to get involved? Located in one of the world’s politically rather unstable regions, Chile has scored 78.3 on The Wall Street Journal’s Index of Economic Freedom in 2009. That makes it the 11th freest economy in the world, in regards to investment freedom, property rights, and freedom from corruption. Only last month the OECD has asked Chile to join them. Even throughout political turmoil in surrounding countries, stable macroeconomic policies have proven Chile to be a mature democracy with clear incentives for foreign investment.

 Would you like some more rankings? They speak for themselves, don’t they? Barclay Capital ranks Chile second most advanced emerging market in the world, behind Singapore and ahead of China, India, and Brazil. The World Bank’s Voice and Accountability Governance Indicator gave Chile the rank 76.9 in 2008. High literacy rates (around 95% of males and females) as well as a poverty rate that plunged from 39% in 1990 to only 14% in 2006 really prove Chile to be an insider tip. You better be quick, it won’t be waiting for you.

Click here to visit the Australia Latin America Business Council website.

Stefanie Mueller – International Communications Strategist 

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Robert at robert.trzebski@australianbusiness.com.au.

 
 

Tags: , , , , , , , ,

Australia’s New Free Trade Agreement is a Big One for Exporters


 Australia just grew a little bit closer to yet another interesting trading partner.  The Australia-Chile Free Trade Agreement (ACI-FTA) came into effect on 6 March 2009. The agreement immediately abolishes 92% of tariff lines on 97% of Australian goods currently traded. All other tariffs will be eliminated by 2015. This will offer Australian exporters significant new opportunities in Chile as well as other countries in the region, particularly in the services and investment areas.

Chile has long been considered to be the entry ticket to the Latin American market. It is by far the most advanced economy in the region and with the recent election of the first centre-right government in 20 years the trend towards economic liberalisation seems to be continuing.

Australian exports most likely to benefit include coal, paints, varnishes, plastics, chemicals, heavy equipment, meat, dairy, wine and other agricultural products. The winners in the service sector will be the providers of mining and energy technology, engineering and consulting, franchising, education and training, information technology, tourism, and infrastructure. The Agreement also eliminates Chile’s long-time fixed sugar tariff, although a variable component will remain in place, dependent on continuing reform pressure.

The FTA will guarantee immediate non-discriminatory market access for Australian businesses as well as parity with suppliers from other countries with which Chile has trading agreements, such as Canada, China, EFTA, MERCOSUR, South Korea and the US. Due to the Rules of Origin chapter Australian exporters can benefit from Chile’s links to other trading partners by eliminating cross-border import duties on parts from these countries.

 Other areas covered by the agreement include comprehensive intellectual property rights as well as a liberalised regulation of the entry of business people engaged in bilateral trade and investment.

Click here to visit the Australia Latin America Business Council website.

Stefanie Mueller – International Communications Strategist

 For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Robert at robert.trzebski@australianbusiness.com.au.

 
 

Tags: , , , , , ,