Venezuelan elections could hold weighty consequences

Venezuelans will turn to the polls on Sept. 26 for legislative elections, the outcome of which could signal a turning point for Venezuela’s politics. Similarly to those of the U.S. mid-term election, the results will help portray the voter’s evaluation of the ruling party’s performance.Some polls indicate that voters are nearly equally divided between the Unified Socialist Party of Venezuela of President Hugo Chávez, and those of the opposition candidates. Nonetheless, it is expected that the opposition parties will make significant gains in these elections since they had boycotted the previous 2005 legislative elections, which resulted in a landslide win for government party candidates. The upcoming election comes at a time of increased political competition. This year, Hugo Chávez’s government faced major criticism due to power and food shortages, inflation and high crime rates, among others. The results of the election will give an indication of government performance and popularity. Should the opposition parties win a substantial number of seats, they could limit the executive power and have a greater say in policy-making. The next presidential election is slated for 2012.

Mexico boosts tariffs on U.S. products

The Government of Mexico released a list in August 2010 of 99 U.S. products subject to higher tariffs as a strategy of pressuring the U.S. to lift an existing ban on Mexican cargo trucks.Mexico says that the ban on trucks to the U.S. is a violation of the North American Free Trade Agreement (NAFTA), and thus has implemented commercial retaliations by applying tariffs on U.S. products. Previously, the total number of goods necessitating tarifs was 89.The products on the tariff list include cheese, fruits, juices, toilet paper, wine and more recently, some pork products; the tariffs range from five per cent to 15 per cent. The new tariffs will affect roughly $2.5 billion of trade coming from 43 U.S. states.

Latin America: A burgeoning investment destination

Latin American countries and other emerging countries are becoming more attractive and important destinations for foreign investments. The 2010 Foreign Direct Investment Confidence Index prepared by the consulting firm AT Kearney reports that senior executives of the world’s largest companies polled have notably rated China, India and Brazil in their top five of favoured investment destinations. This points to the success and increasing role of emerging countries in the global economy and highlights the relative success of developing countries facing the global crisis compared with the performance of OECD countries. Brazil and Mexico have both substantially risen as attractive destinations for foreign direct investment. Brazil is the fourth favourite destination for investors worldwide. Further, in the past year Mexico has climbed the ranking list, from the 19th place in 2009 to the eighth  place in 2010. Peru has also become a key destination for foreign investment in the region. Peru’s gain has been achieved notably in relation to China’s increased investments, including in the mining sector. This year, Peru’s exports to China have already exceeded those destined to the United States. Moreover, for the first time in 2009 China has been Brazil’s main commercial partner.