BRASILIA, Dec 30 (Reuters) - Brazil's slowing economic growth next year should help control a recent spurt in inflation, Finance Minister Guido Mantega said on Thursday.
Rising prices in Latin America's biggest economy present one of the most difficult policy challenges for President-elect Dilma Rousseff when she takes office on Jan. 1.
"Inflation is showing signs of easing," Mantega told reporters, adding that a recent surge in prices was due to a temporary blip in food costs.
He added that recent gains in the Brazilian real BRBY, which closed 2010 at its strongest in over two months on Thursday, were also atypical due to end-of-year trading.
"This question will be dealt with from January by the next government, probably (via) measures in the trade sector," Mantega said.
Inflation in Brazil quickened at its fastest pace in more than five years in November, driven by a surge in food and beverage prices, data showed earlier this month.
At 5.63 percent, the 12-month inflation rate also came in dangerously close to the upper limit of the government's target of 4.5 percent, plus or minus 2 percentage points.
But the incoming government is reluctant to deal with the problem by raising the country's already high interest rates for fear of attracting even more speculative hot money.
TRADE MEASURES
Rousseff plans targeted tariff increases and tax breaks as a way of addressing the strong currency, sources close to the incoming government told Reuters this week.
But the government has not decided to lift the existing income tax exemption foreigners enjoy on local bond holdings, Mantega said. The measure had been put forward by analysts in recent days as one possible way to deal with the strong currency.
The real has gained over 12 percent since the end of May, putting huge pressure on local companies that are struggling to sell their products abroad and compete with a flood of cheap imports.
The end of the year would have been an ideal time to reintroduce the income tax on bond holdings since it would be enacted immediately, said Christopher Garman, director for Latin America at political risk consultants Eurasia Group in Washington.
But this does not mean the new government will not introduce other measures to curb currency-boosting inflows such as raising the tax on foreign bond purchases, he said.
"They're going to do a bit of everything and incremental capital controls is one of them," he said.
Source: www.reuters.com
Thursday, December 30, 2010
Wednesday, December 29, 2010
Anger mounts over gas price hike in Bolivia
(CNN) -- Police in Bolivia used tear gas to disperse hundreds of protesters who took to the streets protesting a hike on the price of fuels Monday.
The price of gasoline has risen 73 percent while diesel fuel rose at least 80 percent.
The unions representing the public transit workers called for an indefinite national strike in protest which was partially successful Monday.
Bolivian President Evo Morales defended the increase, saying it was needed partly because of Bolivian fuel being sold illegally to other countries, the state-run news agency ABI reported.
The government had frozen the price of gasoline and diesel for six years and subsidized the cost -- making the fuel a lot cheaper than in neighboring countries.
As a result, trafficking in fuels made it a very profitable business, said Vice President Alvaro Garcia Lenero.
"The profit margin is so great that anybody who sells 10 liters of gasoline in Brazil or Peru makes enough money to live a week or two. Only 10 liters! That can't be. That can't be," he said.
The government estimates that Bolivia loses as much as $150 million a year in fuel sold outside the country.
But the "Gasolinazo," as the hike is being called, could be a big challenge to Morales who has enjoyed public support for his populist policies. Many are now questioning his commitment to the people.
"Why did he lie? His ministers said the price wouldn't go up a single peso and now this," said Marta Zurita, a homemaker in the capital Bolivia. "How can we move forward? This is bad, very bad."
Many fear the price increase won't be limited to fuel.
Taxi drivers raised their fares by as much as a 100% even though the government warned them not to go higher than 25%.
The drivers' union agreed to continue negotiations with the government Tuesday to reach an agreement on the new rates.
Others rushed to local markets to buy groceries fearing prices will soon go up.
Retiree Mary Ortuno said she wishes she could go shopping with a government official to see how much they could afford using only her income.
By Gustavo Valdes
Source: CNN
http://edition.cnn.com
The price of gasoline has risen 73 percent while diesel fuel rose at least 80 percent.
The unions representing the public transit workers called for an indefinite national strike in protest which was partially successful Monday.
Bolivian President Evo Morales defended the increase, saying it was needed partly because of Bolivian fuel being sold illegally to other countries, the state-run news agency ABI reported.
The government had frozen the price of gasoline and diesel for six years and subsidized the cost -- making the fuel a lot cheaper than in neighboring countries.
As a result, trafficking in fuels made it a very profitable business, said Vice President Alvaro Garcia Lenero.
"The profit margin is so great that anybody who sells 10 liters of gasoline in Brazil or Peru makes enough money to live a week or two. Only 10 liters! That can't be. That can't be," he said.
The government estimates that Bolivia loses as much as $150 million a year in fuel sold outside the country.
But the "Gasolinazo," as the hike is being called, could be a big challenge to Morales who has enjoyed public support for his populist policies. Many are now questioning his commitment to the people.
"Why did he lie? His ministers said the price wouldn't go up a single peso and now this," said Marta Zurita, a homemaker in the capital Bolivia. "How can we move forward? This is bad, very bad."
Many fear the price increase won't be limited to fuel.
Taxi drivers raised their fares by as much as a 100% even though the government warned them not to go higher than 25%.
The drivers' union agreed to continue negotiations with the government Tuesday to reach an agreement on the new rates.
Others rushed to local markets to buy groceries fearing prices will soon go up.
Retiree Mary Ortuno said she wishes she could go shopping with a government official to see how much they could afford using only her income.
By Gustavo Valdes
Source: CNN
http://edition.cnn.com
Tuesday, December 28, 2010
Deeper canals help boost Brazil's commodities throughput
Brazil's sea port capacity will rise significantly in 2011 as dredging work advances, a senior port official told Reuters, relieving a major bottleneck hampering trade with the booming Latin American economy. Brazil generates more than 40% of its export revenue from a vast range of commodities, both agricultural produce and minerals but its ports have been choking up more frequently as its red hot economy puts strain on its infrastructure.
A national program that began in 2007 to scoop 79 million tonnes of muck from the beds of access canals and berths at 18 ports at a cost of 1.6 billion reais ($942 million) is to be mostly completed by mid-2011.
"We will have 30% more capacity than at the start of the program," said Fabrizio Pierdomenico, secretary of planning and port development and a former director at Santos port. He said the increase in capacity would vary by port.
"Instead of working with two 60,000-tonne ships, you can use one 120,000-tonne ship. You gain in efficiency and add capacity to the port," he said, adding commodities producers could be assured they would benefit from cost savings. "It's as if you are adding more berths," he said.
A second phase of the dredging program starting in 2011 will extend the deepening along secondary canals that branch off from main access routes, and extend dredging to other ports. It will cost 1 billion reais and take four years.
The shortcomings of Brazil's ports were never more visible than in mid-2010 when ships queued for as long as a month to load sugar. Though a one-off coincidence of high demand and wet weather halted loading, faster turnarounds and access for larger ships could have lessened its severity. The top two sugar ports in Brazil, Santos and Paranagua, should complete their dredging work by the end of June and the end December 2011, respectively.
Brazil's national center for navigation, Centronave, says the country's ports are among the most costly in the world and says from January to September, ships spent a combined total of eight years waiting to load and unload. The inadequate depth of canals means some ships can only operate partially loaded at Brazil's ports as they would otherwise run aground if carrying a full cargo.
Brazil is also the world's top exporter of iron ore but the country's top producer of the steel ingredient, Vale, ships through its own privately run ports.
ROAD, RAIL PROBLEMS REMAIN
The largest and most costly project, the dredging of a 17-km (10.6-mile) canal at the port of Rio Grande in the southern state of Rio Grande do Sul was completed in July and enabled a Panamax vessel to berth there for the first time in November.
Ports in the south of the country will need regular maintenance dredging, once or twice a year, as sediment tends to build up faster there, Pierdomenico said. Ports in the north and northeast can go two or three years without maintenance. Mud dredged from the ports is shipped out to sea and dumped at locations approved by the environmental regulator and where currents are present to disperse it evenly over the sea bed.
Pierdomenico said once the problem of waterway access has been resolved, other bottlenecks are likely to become more prominent.
"When you remove this blockage others will appear. Ports will have to deal with the problem of access roads and railways to get there and the shortening of queues," Pierdomenico said.
Investments from the same infrastructure program funding the dredging, known as the Accelerated Growth Program (PAC), will also pay for the construction of two railways, one descending from the north and the running east and west. They will interlink with several existing smaller rail networks.
Pierdomenico, speaking to Reuters in an interview at the headquarters of the port secretariat, specially set up in 2007 to tackle port bottlenecks, said further efficiency gains would come from a "paper-free port" program to cut bureaucracy.
Some 900 documents are needed to process each ship passing through the country's ports but a computerized system was being developed to automatically distribute details to each state authority according to their requirements.
Another system that would track containers on their road or rail journey to the port is also planned and would enable their check-in procedure to begin prior to their arrival, Pierdomenico said.
He said that for the duration of the dredging works, archeologists were present at each site to be able to recover objects of historical value were any to be uncovered. Divers had also scoured the waterways at ports in the state of Bahia where Portuguese colonists first discovered Brazil after their ship was blown off course on their way to Asia.
Pierdomenico said the dredging had so far yielded only old tyres, anchors and parts of ships but nothing of historical value. "Thank God," he laughed. "Otherwise we might have to stop everything."
Source: www.independent.co.uk
A national program that began in 2007 to scoop 79 million tonnes of muck from the beds of access canals and berths at 18 ports at a cost of 1.6 billion reais ($942 million) is to be mostly completed by mid-2011.
"We will have 30% more capacity than at the start of the program," said Fabrizio Pierdomenico, secretary of planning and port development and a former director at Santos port. He said the increase in capacity would vary by port.
"Instead of working with two 60,000-tonne ships, you can use one 120,000-tonne ship. You gain in efficiency and add capacity to the port," he said, adding commodities producers could be assured they would benefit from cost savings. "It's as if you are adding more berths," he said.
A second phase of the dredging program starting in 2011 will extend the deepening along secondary canals that branch off from main access routes, and extend dredging to other ports. It will cost 1 billion reais and take four years.
The shortcomings of Brazil's ports were never more visible than in mid-2010 when ships queued for as long as a month to load sugar. Though a one-off coincidence of high demand and wet weather halted loading, faster turnarounds and access for larger ships could have lessened its severity. The top two sugar ports in Brazil, Santos and Paranagua, should complete their dredging work by the end of June and the end December 2011, respectively.
Brazil's national center for navigation, Centronave, says the country's ports are among the most costly in the world and says from January to September, ships spent a combined total of eight years waiting to load and unload. The inadequate depth of canals means some ships can only operate partially loaded at Brazil's ports as they would otherwise run aground if carrying a full cargo.
Brazil is also the world's top exporter of iron ore but the country's top producer of the steel ingredient, Vale, ships through its own privately run ports.
ROAD, RAIL PROBLEMS REMAIN
The largest and most costly project, the dredging of a 17-km (10.6-mile) canal at the port of Rio Grande in the southern state of Rio Grande do Sul was completed in July and enabled a Panamax vessel to berth there for the first time in November.
Ports in the south of the country will need regular maintenance dredging, once or twice a year, as sediment tends to build up faster there, Pierdomenico said. Ports in the north and northeast can go two or three years without maintenance. Mud dredged from the ports is shipped out to sea and dumped at locations approved by the environmental regulator and where currents are present to disperse it evenly over the sea bed.
Pierdomenico said once the problem of waterway access has been resolved, other bottlenecks are likely to become more prominent.
"When you remove this blockage others will appear. Ports will have to deal with the problem of access roads and railways to get there and the shortening of queues," Pierdomenico said.
Investments from the same infrastructure program funding the dredging, known as the Accelerated Growth Program (PAC), will also pay for the construction of two railways, one descending from the north and the running east and west. They will interlink with several existing smaller rail networks.
Pierdomenico, speaking to Reuters in an interview at the headquarters of the port secretariat, specially set up in 2007 to tackle port bottlenecks, said further efficiency gains would come from a "paper-free port" program to cut bureaucracy.
Some 900 documents are needed to process each ship passing through the country's ports but a computerized system was being developed to automatically distribute details to each state authority according to their requirements.
Another system that would track containers on their road or rail journey to the port is also planned and would enable their check-in procedure to begin prior to their arrival, Pierdomenico said.
He said that for the duration of the dredging works, archeologists were present at each site to be able to recover objects of historical value were any to be uncovered. Divers had also scoured the waterways at ports in the state of Bahia where Portuguese colonists first discovered Brazil after their ship was blown off course on their way to Asia.
Pierdomenico said the dredging had so far yielded only old tyres, anchors and parts of ships but nothing of historical value. "Thank God," he laughed. "Otherwise we might have to stop everything."
Source: www.independent.co.uk
Monday, December 27, 2010
Peru finance minister predicts 9 pct growth for 2011
Finance Minister Ismael Benavides said Peru's economy will grow as much as nine percent by the end of this year on the back of strong GDP expansion in recent months.
"I would like nine percent and evidently there are indicators of this high growth, especially in October, November and December," he said.
In an interview with TV Peru on Monday, he said positive indicators included cement production and electricity consumption levels, which will lead to a higher-than-expected GDP growth this year.
"This is a strong recovery from last year's slowdown and puts Peru on the path of growth so as to reduce poverty and improve the people's income and livelihood," Benavides said.
The minister added that there was room for more growth in Peru, but warned, however, of future "bottlenecks" to expansion, including a shortage of "human capital" such as technically qualified professionals, poverty levels and infrastructure shortages. Benavides said Peru needed to prepare to grow at rates of more than 7% to overcome these problems.
Earlier this month Benavides said he believed Peru's GDP in 2010 could grow between 8.7% and 9%.
According to the Latin American Consensus Forecast, the Peruvian economy will expand by 8.5% this year and 6% in 2011, up from prior estimates of 7.9 percent and 5.8%, respectively.
Source: Living in Peru
http://www.livinginperu.com
"I would like nine percent and evidently there are indicators of this high growth, especially in October, November and December," he said.
In an interview with TV Peru on Monday, he said positive indicators included cement production and electricity consumption levels, which will lead to a higher-than-expected GDP growth this year.
"This is a strong recovery from last year's slowdown and puts Peru on the path of growth so as to reduce poverty and improve the people's income and livelihood," Benavides said.
The minister added that there was room for more growth in Peru, but warned, however, of future "bottlenecks" to expansion, including a shortage of "human capital" such as technically qualified professionals, poverty levels and infrastructure shortages. Benavides said Peru needed to prepare to grow at rates of more than 7% to overcome these problems.
Earlier this month Benavides said he believed Peru's GDP in 2010 could grow between 8.7% and 9%.
According to the Latin American Consensus Forecast, the Peruvian economy will expand by 8.5% this year and 6% in 2011, up from prior estimates of 7.9 percent and 5.8%, respectively.
Source: Living in Peru
http://www.livinginperu.com
Friday, December 24, 2010
Top Taiwan Planner Calls for Capital Controls as Currency Threatens Growth
Taiwan should consider a package of capital controls if it wants to curb currency swings driven by speculative fund inflows, the island’s chief economic planner Christina Liu said.
“We should actually discuss and talk about a capital control package if we really want to have capital controls,” Liu said yesterday in an interview in Taipei. “If no countries impose them, that will be best. But if some economies start to impose capital controls, then those who don’t will suffer the most. So we have to figure out some kind of capital control, too.”
Officials from Asia to Latin America have sought to curtail inflows drawn by higher growth rates to limit currency gains threatening exports. Taiwan last month restricted foreign investment in government debt, and the central bank aims to halve speculative money in the island’s financial markets.
“We don’t want to be the target for speculators, forced to appreciate more than the fundamentals,” said Liu, head of the Council for Economic Planning and Development and a former presidential adviser. The central bank so far “doesn’t discuss” the issue of capital controls with other ministries, “so I don’t know what’s in their mind,” she said.
The Taiwan dollar has risen 5.5 percent over the past three months against its U.S. counterpart, the most in Asia, according to data compiled by Bloomberg. It traded at NT$29.830 as of 2:01 p.m. local time.
Export Sales
Further increases risk crimping export competitiveness at firms such as Taiwan Semiconductor Manufacturing Co., the world’s largest custom manufacturer of chips, in an economy where exports are equivalent to two-thirds of gross domestic product.
The U.S. Federal Reserve’s plan to inject $600 billion into the world’s largest economy is spurring investment into Asia, Liu said. “A lot of it is speculative funds,” she said.
The island in November said it will restrict offshore funds to investing no more than 30 percent of their portfolios into domestic government bonds and money-market products.
Governor Perng Fai-nan said Nov. 29 that the central bank wants to halve so-called hot money flows to Taiwan to NT$150 billion ($5.03 billion). He also said no decision had yet been made on whether to levy a fee on deposits by foreigners at banks on the island.
The central bank has bought the U.S. dollar in late trading almost every day for the past eight months to shield exporters, traders said this month. They declined to be identified as the monetary authority doesn’t publicly disclose such details.
Currency Stability
Taiwanese exporters seeking exchange-rate stability should hedge currency risk, as the fact that some companies might struggle doesn’t mean the government should restrain the local dollar over the long term, Liu said. They should also target Asian consumers, not just European and U.S. ones, she said.
Asian economies from Thailand to South Korea have taken steps this year to curb currency gains. Thailand is ending a 15 percent tax exemption on income from domestic bonds held by overseas buyers.
South Korea has tightened oversight of foreign-currency derivatives and backed the revival of taxes on overseas investors in treasury and central bank bonds. It also aims to apply a levy on foreign-exchange borrowings by banks to guard against sudden capital outflows.
Aligned in Asia
It’s “extremely important” that Taiwan is “in line with other Asian economies and other Asian currencies,” said Liu, who was economic adviser to President Ma Ying-jeou from 2008 to 2010.
Taiwan dollar appreciation can be seen as a “healthy development” as long as it reflects the economy’s performance and is comparable with other Asian currencies, she said.
Recent reports signaled Taiwan’s economy is weathering the increase in its currency. Industrial production rose for the 15th straight month in November, while the unemployment rate fell to a two-year low.
The island’s GDP is set to grow 9.32 percent this year, one of the world’s fastest rates, according to International Monetary Fund data. Domestic demand and closer economic links with China have been contributing to the expansion, Liu said.
All 11 economists in Bloomberg News survey expect the central bank to raise the benchmark interest rate by 0.125 percentage point to 1.625 percent at its next quarterly interest-rate policy meeting on Dec. 30, following two increases of the same amount in each of June and September.
Source: BLOOMBERG
http://www.bloomberg.com
“We should actually discuss and talk about a capital control package if we really want to have capital controls,” Liu said yesterday in an interview in Taipei. “If no countries impose them, that will be best. But if some economies start to impose capital controls, then those who don’t will suffer the most. So we have to figure out some kind of capital control, too.”
Officials from Asia to Latin America have sought to curtail inflows drawn by higher growth rates to limit currency gains threatening exports. Taiwan last month restricted foreign investment in government debt, and the central bank aims to halve speculative money in the island’s financial markets.
“We don’t want to be the target for speculators, forced to appreciate more than the fundamentals,” said Liu, head of the Council for Economic Planning and Development and a former presidential adviser. The central bank so far “doesn’t discuss” the issue of capital controls with other ministries, “so I don’t know what’s in their mind,” she said.
The Taiwan dollar has risen 5.5 percent over the past three months against its U.S. counterpart, the most in Asia, according to data compiled by Bloomberg. It traded at NT$29.830 as of 2:01 p.m. local time.
Export Sales
Further increases risk crimping export competitiveness at firms such as Taiwan Semiconductor Manufacturing Co., the world’s largest custom manufacturer of chips, in an economy where exports are equivalent to two-thirds of gross domestic product.
The U.S. Federal Reserve’s plan to inject $600 billion into the world’s largest economy is spurring investment into Asia, Liu said. “A lot of it is speculative funds,” she said.
The island in November said it will restrict offshore funds to investing no more than 30 percent of their portfolios into domestic government bonds and money-market products.
Governor Perng Fai-nan said Nov. 29 that the central bank wants to halve so-called hot money flows to Taiwan to NT$150 billion ($5.03 billion). He also said no decision had yet been made on whether to levy a fee on deposits by foreigners at banks on the island.
The central bank has bought the U.S. dollar in late trading almost every day for the past eight months to shield exporters, traders said this month. They declined to be identified as the monetary authority doesn’t publicly disclose such details.
Currency Stability
Taiwanese exporters seeking exchange-rate stability should hedge currency risk, as the fact that some companies might struggle doesn’t mean the government should restrain the local dollar over the long term, Liu said. They should also target Asian consumers, not just European and U.S. ones, she said.
Asian economies from Thailand to South Korea have taken steps this year to curb currency gains. Thailand is ending a 15 percent tax exemption on income from domestic bonds held by overseas buyers.
South Korea has tightened oversight of foreign-currency derivatives and backed the revival of taxes on overseas investors in treasury and central bank bonds. It also aims to apply a levy on foreign-exchange borrowings by banks to guard against sudden capital outflows.
Aligned in Asia
It’s “extremely important” that Taiwan is “in line with other Asian economies and other Asian currencies,” said Liu, who was economic adviser to President Ma Ying-jeou from 2008 to 2010.
Taiwan dollar appreciation can be seen as a “healthy development” as long as it reflects the economy’s performance and is comparable with other Asian currencies, she said.
Recent reports signaled Taiwan’s economy is weathering the increase in its currency. Industrial production rose for the 15th straight month in November, while the unemployment rate fell to a two-year low.
The island’s GDP is set to grow 9.32 percent this year, one of the world’s fastest rates, according to International Monetary Fund data. Domestic demand and closer economic links with China have been contributing to the expansion, Liu said.
All 11 economists in Bloomberg News survey expect the central bank to raise the benchmark interest rate by 0.125 percentage point to 1.625 percent at its next quarterly interest-rate policy meeting on Dec. 30, following two increases of the same amount in each of June and September.
Source: BLOOMBERG
http://www.bloomberg.com
Thursday, December 23, 2010
Latin Americans need port policies
Port Strategy reports that the head of the UN's Economic Commission for Latin America and the Caribbean, Ricardo Sanchez, has said that Latin American governments need to "redefine their port policies" as a means of integrating coastal ports with the region's industrial and production sectors.
The head of the UN's Economic Commission for Latin America and the Caribbean, Ricardo Sanchez, has said that Latin American governments need to redefine their port policies as a means of integrating coastal ports with the region's industrial and production sectors.
He believes that many governments are less focussed on ports as they are no longer seen as key objectives for economic policy.
Mr Sanchez pointed out that some countries no longer have port policies, while others are only just beginning to develop them.
However, he singled out Brazil as a good example for other countries in the region to follow, given that the government set up the Port Secretariat (SEP) in 2007 thereby giving more weight to the industry.
Source: http://www.sandandgravel.com
The head of the UN's Economic Commission for Latin America and the Caribbean, Ricardo Sanchez, has said that Latin American governments need to redefine their port policies as a means of integrating coastal ports with the region's industrial and production sectors.
He believes that many governments are less focussed on ports as they are no longer seen as key objectives for economic policy.
Mr Sanchez pointed out that some countries no longer have port policies, while others are only just beginning to develop them.
However, he singled out Brazil as a good example for other countries in the region to follow, given that the government set up the Port Secretariat (SEP) in 2007 thereby giving more weight to the industry.
Source: http://www.sandandgravel.com
Wednesday, December 22, 2010
Looking to Latin America in 2011
A star economic region offering lessons for developed countries, a magnet for Asian investment and trade, and home to thriving democracies—Latin America would hardly have drawn such descriptions a few decades ago. But 2010 marked a standout year for the region, which outpaced the average growth rate of the global economy and continued forging trans-Pacific ties. Still, fears about organized crime continue to grow as countries in the region consider how they can work together to boost public safety. AS/COA Online takes a look at some of the top issues that will affect the region in 2011.
Latin America as a rising economic star. Once considered an economic basket case, Latin America turned around its financial fortunes. The region is expected to post 6 percent GDP growth for 2010. Global economic woes could draw that figure down to 4.2 percent in 2011, according to a report by the UN Economic Commission for Latin America and the Caribbean. Still, Latin America’s growth rate could outstrip the global average for the next seven years. This good news has some eyes turning to Latin America for instruction. A Financial Times article suggests the region offers lessons for the EU, weighed down by debt in southern Europe and Ireland, “to avoid a lost decade.”
Growing ties with Asia. As COA Vice President Eric Farnsworth recently wrote for The Huffington Post, “China, the primary purchaser of Latin American commodities, has emerged as a significant new regional player.” The region is rich in resources, with countries such as Argentina, Brazil, and Venezuela drawing billions in Chinese investment dollars. Ecuador is already predicting that it will be one of Beijing’s top investment destinations next year. But deeper links with China are just part of the picture at a time when Asia and Latin America are both growing rapidly. The exchange of goods across the Pacific will likely grow thanks to an increasing number of trade deals. Peru recently signed accords between both Japan and South Korea, while Chile inked one with Malaysia and started negotiations with Thailand. The possibility of eliminating tariffs through the Trans-Pacific Partnership would build on such pacts as well.
Crime to remain a top issue. The choice of “citizen security” as the theme at the next OAS General Assembly underlines ongoing regional concern about public safety and crime in the Americas. Recent events—such as Guatemala’s declaration of a state of siege in one of its northern provinces troubled by drug gangs, or Rio police quelling gang violence in one of the city’s favelas—demonstrate that the issue transcends geography. This month, Mexico reached a grim benchmark in its war on drugs when the number of drug-war-related deaths since January 2007 hit 30,000. Some Latin American leaders have already advocated a shift toward decriminalization and treating drug abuse as a health issue as a way to fight gangs and trafficking. Other observers have called for increasing hemispheric cooperation to tackle organized crime.
Upcoming elections. A new Latinobarómetro poll shows that support for democracy continues to grow in Latin America. Voters in several countries will head to the polls next year. Here are elections to watch:
* Presidential: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Argentina (October 2011), Nicaragua (November 2011)
* Legislative: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Nicaragua (November 2011)
* Gubernatorial: Several Mexican states will hold elections throughout 2011, including in the State of Mexico.
Learn more:
* “After a Good Year in Latin Americas, Some Predictions for 2011,” Eric Farnsworth, PODER Hispanic, December 11, 2010.
* “Latin America’s New Presidents,” an AS/COA Online news analysis that takes a look at the new presidents of Brazil, Chile, Colombia, and Brazil.
* The GE Foundation awarded the Americas Society a grant that will include funding for Chinese natural resource investments and comparison of Asian and Latin American strategies for transportation integration.
* Summary of AS/COA’s 7th Annual Predictors Forum: Economic, Financial, and Trade Predictions for 2011.
* Annual report by UN Economic Commission for Latin America and the Caribbean covers 2010 growth and offers forecasts for 2011.
* Reuters Factbox on “political risks to watch” in the region in 2011.
Source: Americas-society
http://as.americas-society.org
Latin America as a rising economic star. Once considered an economic basket case, Latin America turned around its financial fortunes. The region is expected to post 6 percent GDP growth for 2010. Global economic woes could draw that figure down to 4.2 percent in 2011, according to a report by the UN Economic Commission for Latin America and the Caribbean. Still, Latin America’s growth rate could outstrip the global average for the next seven years. This good news has some eyes turning to Latin America for instruction. A Financial Times article suggests the region offers lessons for the EU, weighed down by debt in southern Europe and Ireland, “to avoid a lost decade.”
Growing ties with Asia. As COA Vice President Eric Farnsworth recently wrote for The Huffington Post, “China, the primary purchaser of Latin American commodities, has emerged as a significant new regional player.” The region is rich in resources, with countries such as Argentina, Brazil, and Venezuela drawing billions in Chinese investment dollars. Ecuador is already predicting that it will be one of Beijing’s top investment destinations next year. But deeper links with China are just part of the picture at a time when Asia and Latin America are both growing rapidly. The exchange of goods across the Pacific will likely grow thanks to an increasing number of trade deals. Peru recently signed accords between both Japan and South Korea, while Chile inked one with Malaysia and started negotiations with Thailand. The possibility of eliminating tariffs through the Trans-Pacific Partnership would build on such pacts as well.
Crime to remain a top issue. The choice of “citizen security” as the theme at the next OAS General Assembly underlines ongoing regional concern about public safety and crime in the Americas. Recent events—such as Guatemala’s declaration of a state of siege in one of its northern provinces troubled by drug gangs, or Rio police quelling gang violence in one of the city’s favelas—demonstrate that the issue transcends geography. This month, Mexico reached a grim benchmark in its war on drugs when the number of drug-war-related deaths since January 2007 hit 30,000. Some Latin American leaders have already advocated a shift toward decriminalization and treating drug abuse as a health issue as a way to fight gangs and trafficking. Other observers have called for increasing hemispheric cooperation to tackle organized crime.
Upcoming elections. A new Latinobarómetro poll shows that support for democracy continues to grow in Latin America. Voters in several countries will head to the polls next year. Here are elections to watch:
* Presidential: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Argentina (October 2011), Nicaragua (November 2011)
* Legislative: Haiti (Second Round – January 2011), Peru (April 2011), Guatemala (August 2011), Nicaragua (November 2011)
* Gubernatorial: Several Mexican states will hold elections throughout 2011, including in the State of Mexico.
Learn more:
* “After a Good Year in Latin Americas, Some Predictions for 2011,” Eric Farnsworth, PODER Hispanic, December 11, 2010.
* “Latin America’s New Presidents,” an AS/COA Online news analysis that takes a look at the new presidents of Brazil, Chile, Colombia, and Brazil.
* The GE Foundation awarded the Americas Society a grant that will include funding for Chinese natural resource investments and comparison of Asian and Latin American strategies for transportation integration.
* Summary of AS/COA’s 7th Annual Predictors Forum: Economic, Financial, and Trade Predictions for 2011.
* Annual report by UN Economic Commission for Latin America and the Caribbean covers 2010 growth and offers forecasts for 2011.
* Reuters Factbox on “political risks to watch” in the region in 2011.
Source: Americas-society
http://as.americas-society.org
Tuesday, December 21, 2010
Argentina Should Surpass 5 Million Broadband Connections at Its Bicentenary
BUENOS AIRES, Argentina – Cisco has announced the results of the Cisco® Broadband Barometer’s special edition for the Argentine bicentenary of 2010. The study reports a growth of 5.6 percent in fixed broadband connections, a 41.1 percent growth in the mobile data subscribers segment, and a 10.6 percent growth in total broadband connections in Argentina from December 2009 to May 2010. During that period 492,000 new fixed broadband connections were added, reaching a penetration of 10.7 percent and keeping the country in second place in Latin America for a second consecutive year.
Latin American economies are in different development phases, but according to a recent report of the World Economic Forum, they all face the challenge of global competitiveness. The challenge for governments is to take advantage of the strategic role that networks and connectivity can play to propel economic development and increase productivity.
A report of the World Bank, titled “Information and Communications for Development, 2009: Extending Reach and Increasing Impact,” analyzes the effects of information and communications technology in the economic growth of developing countries. The report finds that an increase of 10 percent in high-speed Internet connections corresponds to an increase of 1.3 percent in economic growth.
The report also shows that broadband connectivity is essential for the ICT services market, as it generates employment for young people, increases productivity and exports, and promotes social inclusion. The report explains that developing countries currently exploit less than 15 percent of the potential worldwide market for the ICT services sector.
In order to make broadband access universal, investments must be made in ICT. In Argentina a study made by the consultant Global Insight last September shows that the investment in ICT in the period 2007-2009 was 1.1 percent of the gross domestic product. The study concluded that both public and private investments must be made to stimulate the development of technologies in Latin America. This will enable Latin American countries to better support a growth of 50 percent in network traffic in the region. Network traffic is projected to grow 7.9 times by the end of 2014, according to the most recent Cisco Visual Networking Index report.
In Argentina, 50 percent of the fixed broadband connections have connection speeds of more than 1 megabit per second, but the quality and speed of broadband connections must be improved to help ensure a high-quality experience for users. Improvements are especially needed because of the predicted increase in network traffic, with video being the main source of Internet traffic.
Highlights of the Cisco Barometer for the Argentine Bicentenary:
More than three quarters (77 percent) of fixed broadband connections are concentrated in the Capital District of Buenos Aires, and almost a quarter (23 percent) are in the rest of the country. In spite of that, connections located outside the metropolitan area of Buenos Aires grew 9.5 percent due to a continuous improvement in the offers and coverage of service providers. Connections in the metropolitan area grew 3.8 percent.
The regions with the highest broadband penetrations are the city of Buenos Aires (Ciudad Autónoma de Buenos Aires) with 49.3 percent, Tierra del Fuego with 16.5 percent, San Luis with 16.4 percent, Santa Cruz with 15.8 percent and La Pampa with 14.5 percent.
Half of the broadband connections have speeds higher than 1 Mbps, although in 2009 and 2010 service providers focused their offers on speeds of more than 3 Mbps.
During December 2009 to May 2010 mobile broadband connections grew 26.7 percent, adding 921,493 connections in the Argentine market. Most of these connections are in the private and residential market segments.
Supporting Quotes:
Juan Pablo Estevez, regional director, Cisco Southern Cone
“Argentina has the second-highest level of broadband penetration in Latin America. According to the results of the Barometer Report, we can see how the demand of connectivity services continues to grow. Although the focus of the Cisco broadband Barometer is in broadband penetration, in the year of the bicentenary we will also focus in the quality of connections; this is a fundamental factor in preparing the networks for the technologies and applications of the future and in offering citizens a unique and profitable opportunity to increase their productivity and competitiveness.”
For more information:
Report Cisco Visual Networking Index
World Economic Forum report
World Bank report
About the Cisco Broadband Barometer
Cisco Broadband Barometer is a Cisco initiative to promote and encourage broadband connectivity in Latin America. It sets goals regarding the number of connections, establishes a periodical measurement of progress, publishes these results, and develops strategies with service providers and governments.
Currently, Cisco Barometer measures broadband growth in Argentina, Chile, Brazil, Colombia, Costa Rica, Venezuela, Peru and Uruguay.
About Cisco
Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Cisco celebrates 25 years of technological innovation, operating excellence and corporate social responsibility. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.
By Victoria Chelsea
Source: www.vadvert.co.uk
Latin American economies are in different development phases, but according to a recent report of the World Economic Forum, they all face the challenge of global competitiveness. The challenge for governments is to take advantage of the strategic role that networks and connectivity can play to propel economic development and increase productivity.
A report of the World Bank, titled “Information and Communications for Development, 2009: Extending Reach and Increasing Impact,” analyzes the effects of information and communications technology in the economic growth of developing countries. The report finds that an increase of 10 percent in high-speed Internet connections corresponds to an increase of 1.3 percent in economic growth.
The report also shows that broadband connectivity is essential for the ICT services market, as it generates employment for young people, increases productivity and exports, and promotes social inclusion. The report explains that developing countries currently exploit less than 15 percent of the potential worldwide market for the ICT services sector.
In order to make broadband access universal, investments must be made in ICT. In Argentina a study made by the consultant Global Insight last September shows that the investment in ICT in the period 2007-2009 was 1.1 percent of the gross domestic product. The study concluded that both public and private investments must be made to stimulate the development of technologies in Latin America. This will enable Latin American countries to better support a growth of 50 percent in network traffic in the region. Network traffic is projected to grow 7.9 times by the end of 2014, according to the most recent Cisco Visual Networking Index report.
In Argentina, 50 percent of the fixed broadband connections have connection speeds of more than 1 megabit per second, but the quality and speed of broadband connections must be improved to help ensure a high-quality experience for users. Improvements are especially needed because of the predicted increase in network traffic, with video being the main source of Internet traffic.
Highlights of the Cisco Barometer for the Argentine Bicentenary:
More than three quarters (77 percent) of fixed broadband connections are concentrated in the Capital District of Buenos Aires, and almost a quarter (23 percent) are in the rest of the country. In spite of that, connections located outside the metropolitan area of Buenos Aires grew 9.5 percent due to a continuous improvement in the offers and coverage of service providers. Connections in the metropolitan area grew 3.8 percent.
The regions with the highest broadband penetrations are the city of Buenos Aires (Ciudad Autónoma de Buenos Aires) with 49.3 percent, Tierra del Fuego with 16.5 percent, San Luis with 16.4 percent, Santa Cruz with 15.8 percent and La Pampa with 14.5 percent.
Half of the broadband connections have speeds higher than 1 Mbps, although in 2009 and 2010 service providers focused their offers on speeds of more than 3 Mbps.
During December 2009 to May 2010 mobile broadband connections grew 26.7 percent, adding 921,493 connections in the Argentine market. Most of these connections are in the private and residential market segments.
Supporting Quotes:
Juan Pablo Estevez, regional director, Cisco Southern Cone
“Argentina has the second-highest level of broadband penetration in Latin America. According to the results of the Barometer Report, we can see how the demand of connectivity services continues to grow. Although the focus of the Cisco broadband Barometer is in broadband penetration, in the year of the bicentenary we will also focus in the quality of connections; this is a fundamental factor in preparing the networks for the technologies and applications of the future and in offering citizens a unique and profitable opportunity to increase their productivity and competitiveness.”
For more information:
Report Cisco Visual Networking Index
World Economic Forum report
World Bank report
About the Cisco Broadband Barometer
Cisco Broadband Barometer is a Cisco initiative to promote and encourage broadband connectivity in Latin America. It sets goals regarding the number of connections, establishes a periodical measurement of progress, publishes these results, and develops strategies with service providers and governments.
Currently, Cisco Barometer measures broadband growth in Argentina, Chile, Brazil, Colombia, Costa Rica, Venezuela, Peru and Uruguay.
About Cisco
Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Cisco celebrates 25 years of technological innovation, operating excellence and corporate social responsibility. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.
By Victoria Chelsea
Source: www.vadvert.co.uk
Monday, December 20, 2010
Dollar Bonds Trail Behind Latin American Peers on Spending: Brazil Credit
By Boris Korby and Camila Russo
Brazil is trailing all major Latin American countries in the dollar bond market this year for the first time since 1997 amid concern President-elect Dilma Rousseff will fail to slow spending growth.
The 8.4 percent return on Brazilian bonds this year is the lowest among the eight countries in the region tracked by JPMorgan Chase & Co.’s EMBI+ index. Argentine bonds gained 31 percent, the biggest advance in the region.
Rousseff’s plan to increase cash payments to the poor are helping fuel speculation she will continue the spending policies of President Luiz Inacio Lula da Silva, who boosted government expenditures by 27 percent in the first nine months of the year. The average yield on Brazilian dollar bonds jumped 88 basis points, or 0.88 percentage point, since Oct. 13 to a five-month high of 5.61 percent last week, according to JPMorgan.
“Dilma is untested,” said Michael Roche, an emerging- market strategist at MF Global Holdings Ltd., a New York-based broker. “You have to build a risk premium into the sovereign spread of the country until proven otherwise.”
The central bank raised interest rates this year by 200 basis points to slow inflation as government spending helped spark the fastest economic expansion in more than two decades. Consumer prices increased 5.63 percent in the 12 months through November, the fastest pace since February 2009.
Alexandre Tombini, Rousseff’s pick to head the central bank, will increase borrowing costs to 12.75 percent from 10.75 percent by the end of next year to curb inflation, trading in rates futures shows. Tombini, who has served on the central bank’s board since 2005, was confirmed by the senate last week.
Minimum Wage
Latin America’s biggest economy will grow 7.6 percent this year, according to a Dec. 10 central bank survey of about 100 economists.
Rousseff, who takes office Jan. 1, said last month she’s considering raising the monthly minimum wage to more than 700 reais ($409) by the end of her four-year term from 510 reais. The government’s budget proposal for 2011 increases the minimum wage to 540 reais a month, Worker’s Party Senator Serys Slhessarenko told reporters on Dec. 17 in Brasilia.
“A normal reaction, considering a new government is taking place, is to be concerned about how the new president will conduct the fiscal accounts,” Marcelo Saddi Castro, who oversees 18 billion reais as chief investment officer at SulAmerica Investimentos in Sao Paulo, said in a telephone interview. “The lower the minimum wage, the better the impact on the fiscal accounts.”
Budget Deficit
The budget deficit widened to the equivalent of 3.4 percent of gross domestic product in August, the biggest in five months, before narrowing to 2.4 percent of GDP in September, when the government reaped a revenue windfall from its sale of oil reserves to state-run Petroleo Brasileiro SA.
The Finance Ministry’s press office declined to comment.
Rousseff, who has said social programs and the investment Brazil needs would not be reduced, pledged on TV Record on Nov. 1 to control public spending because “the most important characteristic of a government in today’s world is not to spend what it can’t spend.”
“We’re getting conflicting statements, and her administration hasn’t done much to alleviate concerns over the policies going forward,” Vitali Meschoulam, a strategist at Morgan Stanley in New York, said in a telephone interview. “We still don’t know if they’re going to come out fiscally tighter or looser than the previous administration.”
U.S. Treasuries
Rising U.S. Treasury yields have deepened the slump in Brazilian dollar bonds in the past month, Meschoulam said.
The yield on the 10-year U.S. note touched 3.56 percent last week, the highest level since May 13, on speculation President Barack Obama’s decision to extend tax cuts enacted under his predecessor may bolster U.S. growth while worsening the nation’s budget deficit.
The extra yield investors demand to own Brazilian dollar bonds instead of U.S. Treasuries narrowed 2 basis points at 6:29 a.m. New York time to 197, according to JPMorgan.
The cost of protecting Brazilian bonds against default for five years fell 2 basis points to 113, according to CMA prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
The real rose 0.2 percent to 1.7108 per U.S. dollar.
Yields on Brazil’s interbank rate futures contract due in January 2012 rose 1 basis point to 11.86 percent.
BNDES
Finance Minister Guido Mantega, who will retain his post under Rousseff, said in November that Brazil plans to cut funding for its state development bank by 50 percent next year in an effort to bring down the world’s second-highest inflation- adjusted interest rates.
BNDES, as the lender is known, will hold an auction of local corporate bonds on Dec. 20 as part of a government plan to boost trading in the secondary market, according to a bank official who asked not to be named in accordance with policy.
The bank will auction bonds issued by Cia. De Bebidas das Americas, Tractebel Energia SA and Cia. Energetica de Minas Gerais, according to three investors who received an e-mail from the bank detailing the plan. The auction will take place between 11 a.m. and 11:30 a.m.
Brazil’s dollar bonds returned 11 percent last year, beating debt from Mexico, as Moody’s Investors Service raised the South American country to an investment-grade rating of Baa3. Brazil won its first investment-grade rating in April 2008, when Standard & Poor’s increased it to BBB-. Fitch Ratings matched the move a month later.
The yield on Brazil’s bonds touched 4.72 percent on Oct. 13, the lowest since JPMorgan began tracking the data in December 1997.
“You have a credit that was very tight and had outperformed in previous years as the good news on fundamentals already got priced in,” Meschoulam said. “So now Brazil has less of a chance of being upgraded than smaller credits in the region, and on a relative basis it looks less attractive.”
Source: Bloomberg
www.bloomberg.com
Brazil is trailing all major Latin American countries in the dollar bond market this year for the first time since 1997 amid concern President-elect Dilma Rousseff will fail to slow spending growth.
The 8.4 percent return on Brazilian bonds this year is the lowest among the eight countries in the region tracked by JPMorgan Chase & Co.’s EMBI+ index. Argentine bonds gained 31 percent, the biggest advance in the region.
Rousseff’s plan to increase cash payments to the poor are helping fuel speculation she will continue the spending policies of President Luiz Inacio Lula da Silva, who boosted government expenditures by 27 percent in the first nine months of the year. The average yield on Brazilian dollar bonds jumped 88 basis points, or 0.88 percentage point, since Oct. 13 to a five-month high of 5.61 percent last week, according to JPMorgan.
“Dilma is untested,” said Michael Roche, an emerging- market strategist at MF Global Holdings Ltd., a New York-based broker. “You have to build a risk premium into the sovereign spread of the country until proven otherwise.”
The central bank raised interest rates this year by 200 basis points to slow inflation as government spending helped spark the fastest economic expansion in more than two decades. Consumer prices increased 5.63 percent in the 12 months through November, the fastest pace since February 2009.
Alexandre Tombini, Rousseff’s pick to head the central bank, will increase borrowing costs to 12.75 percent from 10.75 percent by the end of next year to curb inflation, trading in rates futures shows. Tombini, who has served on the central bank’s board since 2005, was confirmed by the senate last week.
Minimum Wage
Latin America’s biggest economy will grow 7.6 percent this year, according to a Dec. 10 central bank survey of about 100 economists.
Rousseff, who takes office Jan. 1, said last month she’s considering raising the monthly minimum wage to more than 700 reais ($409) by the end of her four-year term from 510 reais. The government’s budget proposal for 2011 increases the minimum wage to 540 reais a month, Worker’s Party Senator Serys Slhessarenko told reporters on Dec. 17 in Brasilia.
“A normal reaction, considering a new government is taking place, is to be concerned about how the new president will conduct the fiscal accounts,” Marcelo Saddi Castro, who oversees 18 billion reais as chief investment officer at SulAmerica Investimentos in Sao Paulo, said in a telephone interview. “The lower the minimum wage, the better the impact on the fiscal accounts.”
Budget Deficit
The budget deficit widened to the equivalent of 3.4 percent of gross domestic product in August, the biggest in five months, before narrowing to 2.4 percent of GDP in September, when the government reaped a revenue windfall from its sale of oil reserves to state-run Petroleo Brasileiro SA.
The Finance Ministry’s press office declined to comment.
Rousseff, who has said social programs and the investment Brazil needs would not be reduced, pledged on TV Record on Nov. 1 to control public spending because “the most important characteristic of a government in today’s world is not to spend what it can’t spend.”
“We’re getting conflicting statements, and her administration hasn’t done much to alleviate concerns over the policies going forward,” Vitali Meschoulam, a strategist at Morgan Stanley in New York, said in a telephone interview. “We still don’t know if they’re going to come out fiscally tighter or looser than the previous administration.”
U.S. Treasuries
Rising U.S. Treasury yields have deepened the slump in Brazilian dollar bonds in the past month, Meschoulam said.
The yield on the 10-year U.S. note touched 3.56 percent last week, the highest level since May 13, on speculation President Barack Obama’s decision to extend tax cuts enacted under his predecessor may bolster U.S. growth while worsening the nation’s budget deficit.
The extra yield investors demand to own Brazilian dollar bonds instead of U.S. Treasuries narrowed 2 basis points at 6:29 a.m. New York time to 197, according to JPMorgan.
The cost of protecting Brazilian bonds against default for five years fell 2 basis points to 113, according to CMA prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
The real rose 0.2 percent to 1.7108 per U.S. dollar.
Yields on Brazil’s interbank rate futures contract due in January 2012 rose 1 basis point to 11.86 percent.
BNDES
Finance Minister Guido Mantega, who will retain his post under Rousseff, said in November that Brazil plans to cut funding for its state development bank by 50 percent next year in an effort to bring down the world’s second-highest inflation- adjusted interest rates.
BNDES, as the lender is known, will hold an auction of local corporate bonds on Dec. 20 as part of a government plan to boost trading in the secondary market, according to a bank official who asked not to be named in accordance with policy.
The bank will auction bonds issued by Cia. De Bebidas das Americas, Tractebel Energia SA and Cia. Energetica de Minas Gerais, according to three investors who received an e-mail from the bank detailing the plan. The auction will take place between 11 a.m. and 11:30 a.m.
Brazil’s dollar bonds returned 11 percent last year, beating debt from Mexico, as Moody’s Investors Service raised the South American country to an investment-grade rating of Baa3. Brazil won its first investment-grade rating in April 2008, when Standard & Poor’s increased it to BBB-. Fitch Ratings matched the move a month later.
The yield on Brazil’s bonds touched 4.72 percent on Oct. 13, the lowest since JPMorgan began tracking the data in December 1997.
“You have a credit that was very tight and had outperformed in previous years as the good news on fundamentals already got priced in,” Meschoulam said. “So now Brazil has less of a chance of being upgraded than smaller credits in the region, and on a relative basis it looks less attractive.”
Source: Bloomberg
www.bloomberg.com
Thursday, December 16, 2010
Bill Clinton backs Haiti reconstruction
Former US President Bill Clinton has urged reconstruction in Haiti to continue, despite the country's current political crisis.
During a one-day visit to the country, he said he was confident that thousands made homeless by January's earthquake would be rehoused next year.
The UN envoy said he supported plans for international observers to oversee a review of recent disputed election.
He also visited a clinic treating victims of Haiti's cholera epidemic.
More than 2,400 people are now known to have died in the outbreak.
Mr Clinton's visit follows some calls for direct US aid to Haiti to be stopped until its political crisis is resolved.
The 28 November election was widely denounced, leading to violent protests and political stalemate ahead of a run-off in January.
US Secretary of State Hillary Clinton - Mr Clinton's wife - has said there is US "frustration" over a lack of a co-ordinated response from Haiti's government.
But Mr Clinton, asked in Port-au-Prince whether suspending aid was justified, replied: "In my opinion, nothing has yet happened which justifies that."
'Pace increasing'
He said he shared the frustration of those who through reconstruction was too slow, but added: "I think they will see a big increase in the pace of movement next year."
He said hundreds of thousands of Haitians would be moved out of the camps next year and into permanent housing.
Mr Clinton also backed plans by Haiti's electoral council to re-count tally sheets under international observation and hold a more-transparent January run-off.
"I don't have a candidate - my candidate is the reconstruction process," he said.
"I want the people to feel good about this and to trust the outcome so that we have peace and order and that encourages the donors to keep investing in Haiti's future."
During a one-day visit to the country, he said he was confident that thousands made homeless by January's earthquake would be rehoused next year.
The UN envoy said he supported plans for international observers to oversee a review of recent disputed election.
He also visited a clinic treating victims of Haiti's cholera epidemic.
More than 2,400 people are now known to have died in the outbreak.
Mr Clinton's visit follows some calls for direct US aid to Haiti to be stopped until its political crisis is resolved.
The 28 November election was widely denounced, leading to violent protests and political stalemate ahead of a run-off in January.
US Secretary of State Hillary Clinton - Mr Clinton's wife - has said there is US "frustration" over a lack of a co-ordinated response from Haiti's government.
But Mr Clinton, asked in Port-au-Prince whether suspending aid was justified, replied: "In my opinion, nothing has yet happened which justifies that."
'Pace increasing'
He said he shared the frustration of those who through reconstruction was too slow, but added: "I think they will see a big increase in the pace of movement next year."
He said hundreds of thousands of Haitians would be moved out of the camps next year and into permanent housing.
Mr Clinton also backed plans by Haiti's electoral council to re-count tally sheets under international observation and hold a more-transparent January run-off.
"I don't have a candidate - my candidate is the reconstruction process," he said.
"I want the people to feel good about this and to trust the outcome so that we have peace and order and that encourages the donors to keep investing in Haiti's future."
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