Capital flows to Latin America: recent developments

The external environment has deteriorated sharply as a result of the spiraling financial turmoil, and has led to a weakening in commodity prices and fears of a worldwide recession. Latin America and the Caribbean's fastest expansion in 40 years may be threatened as the global credit crunch makes financing scarce and squeezes demand for the region's commodities. This time around the region is better positioned to weather the crisis than in the past, given improvements in macroeconomic and financial policies as well as a reduced net dependency on external capital inflows. However, Latin American markets are feeling the effects of the crisis through a slowdown in capital inflows, large declines in stock price indexes, significant currency adjustments and an increase in debt spreads. Volatility has soared, with the closely watched Chicago Board Options Exchange Volatility Index moving to an all-time high of 70.33 on October 17, indicating that fear (rather than greed) has been ruling the markets.After reaching record lows in May 2007, emerging markets bond spreads are now above pre-Asian crisis levels. The JPMorgan EMBI+ Latin American composite widened by 146 basis points in the third quarter, with spreads reaching 448 basis points at the end of September. Spreads have widened sharply in recent weeks as foreign investors cut back regional exposure for the safety of U.S. Treasuries. The ongoing lack of liquidity and subsequent liquidation of assets is leading to a collapse in asset prices and a sharp widening in spreads. Daily spreads in October have risen to levels not seen since December 2002, making it much more difficult for governments that need financing to get it. Risk premiums for Latin corporates and sovereigns have risen substantially, but have remained well below U.S. junk (high-yield) bonds. Latin corporates are facing a steep rise in foreign exchange borrowing costs (although less than firms in other emerging markets), which raises concerns that refinancing risks will climb.So far, emerging markets vulnerabilities have been more focused on corporates, as sovereigns have improved public debt dynamics and countries' financing needs are under control. Market performance has been driven by the rapid deterioration of emerging markets bank and corporate market, as well as ongoing losses in emerging markets equities. From January to September 2008, the Morgan Stanley Capital International (MSCI) Latin American Index lost almost 28%, while the Emerging Markets Index lost 37% and the G-7 Index lost 24%. While in 2007 the Latin America component gained 47%, almost nine times as much as the MSCI-G7 index for developed markets, since mid-September 2008 stocks in Latin America have been doing worse than stocks in developed countries, as concerns about access to credit and the adverse impact of sharp falls in commodity prices and in local currencies contribute to increased risk aversion and to outflows of capital. Many governments in the region have used revenue from the commodity boom to pay down debt and build reserves. Now, facing a global financial crisis and the threat of recession in developed countries, the biggest question for Latin America is how long and deep this cyclical downturn will be, and how much it is going to reduce commodity prices. Prices for commodities such as soy, gold, copper and oil, which helped fund the region's boom, have fallen 28% since their July 2 high, according to the RJ/CRB Commodity Price Index. According to Morgan Stanley (in a September 29 report), should prices return to their 10-year average, Latin America's balanced budgets would quickly revert to a deficit of 4.1% of GDP. As risk aversion increases, investors are rapidly pulling out massive amounts of money, creating problems for local markets and banks. There is an ongoing shortage of dollars (as investors liquidate assets in Latin American markets), and as currencies depreciate, inflation concerns increase despite the global slowdown. In Brazil and Mexico, central banks deployed billions of dollars of reserves to stem steep currency declines, as companies in these countries, believing their local currencies would continue to strengthen against the U.S. dollar, took debts in dollars. Some companies also made bets using currency derivatives that have led to losses in the billions of dollars. Dramatic currency swings have caused heavy losses for many companies, from Mexico's cement giant Cemex SAB to the Brazilian conglomerate Grupo Votorantim. Mexico's third-largest retailer, Controladora Comercial Mexicana, declared bankruptcy recently after reporting huge losses related to exchange rate bets. As concerns about corporate exposure to dollar-denominated derivatives increases, yields on bonds issued by many of Brazil's and Mexico's leading companies have started to rise, sharply raising the cost of issuing new debt. Latin American external debt issuance came to a halt in the third quarter of 2008, totaling only US$ 690 million. The cost of obtaining loans for capital expenditures, M&A and debt refinancing is also rising substantially for Latin American corporates amid contagion from the U.S. financial crisis. According to bankers, a protracted trend of shortening tenors and widening spreads has intensified in the past few weeks, indicating that bank lending is quickly following the way of bonds and equity. Finally, money transfers from Latin American migrants are expected to decline for the first time this decade, as a result of economic downturns in the U.S. and Spain, inflation and a weaker dollar. The Mexican Central Bank announced that money transfers from Mexicans living in the U.S. dropped a record 12.2% in August. In 2008, migrants from the region will send some 1.7% less in remittances year-on-year when adjusted for inflation, according to the IADB, compounding the adverse effects of the deepening financial turmoil.

Status of Implementation of the Almaty Programme of Action in South America

Includes bibliography.

The Evolution of Modal Split in Freight Transport in South America, 2000-2013

This FAL Bulletin analyzes data on commodities traded and the modes of transport used between nine South American countries, during 2000, 2006, 2010 and 2013. The aim is to identify the current modal split in intraregional freight transport in South America, and to ascertain the level and evolution of trade flows, imbalances and the burden of transport and insurance costs. The authors conclude with some policy recommendations.

Invasion of the Indo-Pacific blenny Omobranchus punctatus (Perciformes: Blenniidae) on the Atlantic Coast of Central and South America

Nós examinamos 308 espécimes do blenídeo Omobranchus punctatus, de origem Indo-Pacífica, depositados em coleções de quatro museus. Os dados de distribuição foram analisados com o objetivo de avaliar a invasão das águas costeiras do Oceano Atlântico nas Américas do Sul e Central. Em sua área de distribuição original, O. punctatus ocorre em ambientes marinhos e estuarinos. Amostragens datadas de 1930 e de 2004 produziram 20 registros da espécie no Atlântico Oeste tropical, incluindo amostras do Panamá, Colômbia, Venezuela, Trinidade e Brasil. Neste trabalho nós apresentamos 17 novos registros em áreas da Venezuela e nordeste do Brasil. O padrão temporal dos dados (1930-2009) e a proximidade da maioria das áreas de amostragem a regiões portuárias indicam que a espécie foi inicialmente introduzida no Atlântico pela água de lastro de navios navegando na rota India-Trinidade. No Brasil, a introdução parece estar associada ao movimento de navios em torno das plataformas de petróleo. No Maranhão e no Pará, a introdução está associada ao movimento de navios entre os portos próximos à foz do rio Amazonas. Alternativamente, a expansão de área desta espécie ao longo da costa da América pode ter acontecido através de dispersão larval, acompanhando as correntes em direção ao norte. Nós recomendamos o monitoramento desta espécie, bem como o desenvolvimento de estudos sobre sua ecologia em ambientes do Atlântico ocidental agora ocupados por ela.

Sustainable worm control practices in South America

A high prevalence of nematodes, especially Haemonchus contortus and Trichostrongylus colubriformis, that exhibit multiple anthelmintics resistance has been reported in sheep in several South American countries. For this reason, the development of strategies that are less dependent on anthelmintic treatments is imperative for the prophylaxis of gastrointestinal nematode infections in small ruminants. Integrated grazing using cattle and sheep can be used for pasture decontamination with considerable reduction of H. contortus and T. colubnformis infective larvae after cattle grazing. Several breeds of sheep exhibit genetically related resistance against nematode infections, as is the case of crioulo, native or naturalised breeds of sheep. These breeds descend from livestock introduced by Portuguese and Spanish settlers and have been submitted to a long process of natural selection in various environmental conditions. In the South, the Crioula Lanada breed is more resistant to H. contortus than are Corriedale sheep. In tropical areas, where the minimum temperatures are usually higher than 20 degrees C, hair sheep flourish, especially the Santa Ines breed, which also display a higher level of resistance to nematode infections compared with certain breeds of European origin. However, Santa Ines sheep have inferior carcass quality compared with other commercial breeds. Recent studies showed that the crossbreeding of Santa Ines ewes with sires of breeds with high potential for growth and meat production, results in crossbred animals with high productivity and a satisfactory degree of resistance against nematode infections. Several studies have indicated that improvement in nutrition has a beneficial effect on the development of resistance in lambs that were naturally or artificially infected with nematodes. Therefore, supplementary feeding and breeding strategies to improve resistance to nematodes are feasible options in the effort to reduce dependence on anthelmintic drugs to control worm infections in sheep. (C) 2013 Elsevier B.V. All rights reserved.

Taxonomic studies on Mucor inaequisporus, isolated for the first time in South America

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Trends in planktonic copepod diversity in reservoirs and lotic stretches in a large river basin in South America

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Checklist of Helminth parasites of Amphibians from South America

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Taxonomic review of the species of Mugil (Teleostei: Perciformes: Mugilidae) from the Atlantic South Caribbean and South America, with integration of morphological, cytogenetic and molecular data

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Haematology and histopathology of Nile tilapia parasitised by Epistylis sp., an emerging pathogen in South America

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Molecular identification of mullet species of the Atlantic South Caribbean and South America and the phylogeographic analysis of mugil liza

Fundacao de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

The urochloa foliar blight and collar rot pathogen rhizoctonia solani AG-1 IA emerged in South America via a host shift from rice

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

The effects of river discharge and seasonal winds on the shelf off southeastern South America

The Rio de la Plata waters form a low salinity tongue that affects the circulation, stratification and the distributions of nutrients and biological species over a wide extent of the adjacent continental shelf. The plume of coastal waters presents a seasonal meridional displacement reaching lower latitudes (28,S) during austral winter and 32 degrees S during summer. Historical data suggests that the wind causes the alongshore shift, with southwesterly (SW) winds forcing the plume to lower latitudes in winter while summer dominant northeasterly (NE) winds force its southward retreat. To establish the connection between wind and outflow variations on the distribution of the coastal waters, we conducted two quasi-synoptic surveys in the region of Plata influence on the continental shelf and slope of southeastern South America, between Mar del Plata, Argentina and the northern coast of Santa Catarina, Brazil. We observed that: (A) SW winds dominating in winter force the northward spreading of the plume to low latitudes even during low river discharge periods; (B) NE winds displace the plume southward and spread the low salinity waters offshore over the entire width of the continental shelf east of the Plata estuary. The southward retreat of the plume in summer leads to a volume decrease of low salinity waters over the shelf. This volume is compensated by an increase of Tropical waters, which dominate the northern shelf. The subsurface transition between Subantarctic and Subtropical Shelf Waters, the Subtropical Shelf Front, and the subsurface water mass distribution, however, present minor seasonal variations. Along shore winds also influence the dynamics and water mass variations along the continental shelf area. In areas under the influence of river discharge, Subtropical Shelf Waters are kept away from the coastal region. When low salinity waters retreat southward, NE winds induce a coastal upwelling system near Santa Marta Cape. In summer, solar radiation promotes the establishment of a strong thermocline that increases buoyancy and further enhances the offshore displacement of low salinity waters under the action of NE winds. (C) 2008 Elsevier Ltd. All rights reserved.