Latin America's trade with India and China in 2007

India’s trade with Latin America in 2007 crossed 11 billion dollars, increasing from 9 billion dollars in 2006.

India's exports were 5 billion dollars and imports 6 billion dollars. The total should have crossed 12 billion dollars, if we take into account the trade through third countries and add the figures in respect of smaller countries for which statistics for 2007 is not available yet.

Brazil was the main destination of exports... exceeded two billion dollars. Second top destination was mexico with 1127 billion dollars( jan-november). Colombia has over taken Argentina as the third largest market for India's exports in 2006 and in 2007.

Chile was the top exporter to India with 2.2 billion dollars. It has overtaken Brazil in the last two years. Argentina exported one billion dollars, maintaining its second position.

Chemicals and pharmaceuticals were the top exports of India followed by Engg products.

Reliance was the top trading company with Latin America with their crude oil imports from venezuela, mexico, Brazil and ecuador and export of diesel to brazil ( about 800 million dollars).

Copper accounted for 90 percent of Chile's exports to India. Vegetable oils formed 80 percent of Argentine exports to India.

China's trade with Latin America reached 102.6 billion dollars in 2007

It was just 12.6 billion dollars in 2000, increased to 26 billion in 2003 and to 70 billion dollars in 2006.
Trade with Brazil was 29.7 billion dollars, Mexico-14.9 billion dollars, Chile- 14.6 billion and Argentina-9.9 billion.
Main destination of exports: Mexico- 11.7 billion, Brazil-11.4 billion, Panama-5.6 billion, Chile-4.4 billion and Argenina- 3.6 billion
Major sources of imports: Brazil-18.3 billion dollars, Chile-10.3 billion, Argentina-6.3 billion, Peru.4.3 billion, Mexico-3.2 billion and Venezuela- 3 billion dollars.

Argentine TechTango with Indian IT

Antonia Pena, Francisco Okecki and Jose Ugarte, the Argentine trio of Techpreneurs who met me today represent the new breed of young, ambitious and global-visioned Argentines, who have started Tech Tango with Indian IT.

The reason for our meeting today is their India connection. They have become part of the Indian IT company Cellent ( www.cellent.com ) which specialises in software for mobile phones, a growth area in technology and business. This combination of mobiles and India is a formidable one.. In december 2007, the number of new mobile subscriptions was 8 million...highest growth in the world..It has been averaging over six million per month.

The techpreneur trio have independent experience in technology and IT business and their last company was called as " Net people", before its absorption by the Indian company. They are going to contribute not only to the Argentine and Latin American business of Cellent but also to development of new technologies including in collaboration with Indian Institute of Technology, Mumbai. They have a team of six people but have plans to expand including in Uruguay. The Trio figure prominently in the" team of cellent" -http://www.cellent.com/Content/Lang/en/Section/5/SP/About_US_Team/2007/03.htm

The trio were in Mumbai recently and have come back inspired and enriched after their exposure to the new Indian technology development and work culture. They say they found it easier to interact, collaborate and connect with Indian mind and heart. Their eyes shine when they talk about India and IT.

The Trio impressed me with their drive, energy and enthusiasm. They reconfirm my optimism about the future of Argentina. They reminded me of the thousands of the new generation of young Indians with a new mindset, who have transformed India and raised its global profile.

Cellent is the fifth Indian IT company to establish operations in Argentina after TCS, First Source, Crisil/Irevna and Cognizant. These companies employ 700 young Argentines connecting them to the global growth story of Indian IT. It is a win-win for both.

Damas y Cabelleros... welcome to the new show of
TechTango between the new India and the new Argentina.

CII delegation in Buenos Aires 13 December 2007

A delegation of the Confederation of Indian Industries (CII) was in Buenos Aires on 13 December. An India- Argentina Business Meet was organised at the Indian restaurant Katmandu from1230 to 1800 hrs. It was attended by about 70 Argentine businessmen. The speakers at the Meet included Mr Stancanelli, Director general of Foreign office, Osvaldo Rial, President of the Industrial Union of Buenos Aires province, Jorge Zorreguieta President of the Food Industries association and Neville mevawala, leader of the CII delegation.

In my welcome speech in Spanish, I highlighted
-the short term ( 3 year) goal to take bilateral trade from 1.2 billion to 3 billion dollars and Indian investment from 800 million to 2 billion dollars.
-long term goal to build partnership in which India ( with its large and growing market ) could contribute to Argentine exports, growth and prosperity while Argentina could contribute to India's food and energy security.




In the morning, the delegation visited the Industrial Union of Buenos Aires province and had meetings with their members. This Association is planning to take a delegation to India in the first half of 2008.

The delegation had a meeting with the Governor of Buenos Aires Province Mr Daniel Scioli, who spoke in English about the opportunities for business with his province.

The CII delegation was impressed with the enthusiastic response of the Argentine business and government and the business opportunities. They plan to organise the next Indo- Latin American Business Conclave in Argentina in the second quarter of 2008.

Business with Uruguay

During my trip to Uruguay last week, I had a meeting with the uruguay-India chamber of Commerce in Montevideo. The Chamber is vibrant and has an elegant office and the members of the chamber are enthusiastic about business with India. India's exports in the first ten months of 2007 were 39 million dollars and imports 7 million dollars. There is scope to increase the trade to 100 million dollars in the next 3-4 years.
TCS, Mahindra and Mahindra and Biotech international have operations in Montevideo. Our Honorary Consul Daniel Bajuk has an agency selling Bajaj and Hero motorcycles.Indian vegetable oil producers' consortium is seriously looking into the possibility of investment in agribusiness including soya farming in uruguay.
Martin de Castro, the Montevideo-based Commercial officer of our embassy is dynamic, knowledgeable and is commited to assisting indian business. his contact decastromartin@gmail.com


meeting with the Chamber


I visited the bonded warehouse of Grupo Ras in Montevideo Port, where the Central Warehousing Corporation of India has rented 2000 sq metres for use by Indian exporters. The bonded ware house of Grupo Ras has 40,000 sq metres of modern space and moves 100 containers a week. They have offices in other South American countries. Ruben Azar, the young, energetic and dynamic owner of this company with turnover of 40 million dollars has been biten by the India bug. He has been to india several times and sees great potential for business with India. His facility has been used by Reliance, Aurobindo and other Indian companies. Grupo Ras is not only offering warehousing facility but also marketing of indian products in the region. More info www.gruporas.com




here is a picture of the bonded warehouse





below is the CWC space and Ruben Azar

I attended the inaguration of the new building of TCS at Zona Americas in Montevideo. The inaguration of this 4 million dollar building was done by the Uruguyan vice president. The new building will house 250 professionals out of the 800 being employed by TCS in Uruguay. They have plans to increase staff. TCS has also set up a regional IT training centre in Montevideo for candidates from all over Latin America. the credit for success of TCS in latin America goes to Gabriel Rozman.

This is the new building of TCS.

Indian BPO firms see growth in Latin Americanoperations

here is the story from Times of India of 19 November

After making a splash in US, European and Japanese markets, Indian ITeS companies are now ready to do Samba in Latin America.

The past two years have seen many of them set up shop in countries like Chile, Brazil, Argentina, Uruguay and Mexico. From TCS to Satyam, Evalueserve to 24/7, Indian companies have now opened development centres or acquired companies all across Latin America.

And what's driving them is the fact that the continent is one of the fastest-growing region for contact centres. Experts say, expansion to Latin America is a logical step for Indian companies looking to globalise their operations. Two main reasons are driving the growth, says Ameet Nivsarkar, V-P, Nasscom. "It helps Indian ITeS companies to service the larger Spanish speaking population in the US. They find it easier to attract Spanish speaking talent in Latin America compared to India. Also, even though Latin America does not have the depth of talent like India, it has sufficient expertise to complement the India story."

In fact, research done by ValueNotes reveals, the number of call centre agents working for outsourcers in Mexico will grow to 85,000 by 2010, and in Brazil it will increase to 12,000 in the same period. Already, Indian companies working there are scaling up operations. Evalueserve's Chilean delivery centre which started with approximately 15 employees, is expected to employ a few hundreds in the next two to three years. Subsequently, they will add around 60 professionals every year. The company believes the country could represent 10% of global revenues by 2008, and also add business for the India and China operations, said Robert Daigle, V-P at Evalueserve.

Nearness to US is a major attraction for Indians. "For us Chilean centre helps in dealing with workload for it is in the same time zone. Besides, Chile is a part of the global delivery platform for our clients," says Ashish Gupta, COO, Evalueserve. While costs (especially salary costs) in the region are higher compared to India, they are still lower than those in the US. Besides, bandwidth costs in Latin America are lower than in even India because of its proximity to the US. "Although the market may not be as big as the US or Europe, it's still big enough to keep Indian companies engaged," says Nivsarkar. Also, lower valuations of Latin American companies make the entry of Indian vendors relatively easier. Since economies there are 'yet to arrive,' it creates good acquisition opportunities for cash-rich Indian vendors.

OECD report on Latn America - 7 November 2007

This is the first time OECD has brought out a report "Latin American Economic Outlook". From now on, they plan to bring out an annual report. Mexico is a member of OECD since 1994 and Chile is in the process of joining.

Highlights of the report:
- Latin America is showing the world a face with new attractive features: more stability in its macroeconomic fundamentals and greater pragmatism in policy and instituitional reform.
-Consistently positive growth rates and democratic stability are now the norms in the region, rather than the exception. Pragmatism has replaced as the guide for governments for sustained economic development instead of dogma.
- Latin America leads the developing world in pension reforms. Of course, Chile was the pioneer and role model for the reforms in the region.

What struck me in the report ( in the introduction itself) is the new link between China-India and Latin America. In fact, they have one separate chapter with the title " Latin America's Asian opportunity." They have concluded that the two Asian giants represent trade opportunities rather than competition for majority of the Latin American countries. Secondly, they show India-China as examples to follow by the Latin Americans in terms of growth, innovation and global competitivity.

It has now become a standard feature of any report on latin america to talk about the linkage to India and and China.

The report has the views of Javier Santiso, the chief development economist of OECD,who wrote the book "The political economy of the emerging markets". I agree with his analysis and optimism. My blog review of his book:

http://latinamericanaffairs.blogspot.com/search?q=the+political+economy+of+the+possible )

TCS wins $200million dollar deal in Mexico

Tata Consultancy Services (TCS) has won a four- year contract of over $200 million from Social Security Institute of Mexico (IMSS), which is the largest organisation of its kind in Latin America. TCS won the contract following a public bid process based on technology and financial parameters over three other leading global and local technology companies.

In its role as the strategic IT services partner for IMSS, TCS will provide end-to-end IT services including application maintenance and support, custom software development, business analysis services, management of strategic IT programs and value added initiatives for the organisation’s affiliates.

This is the largest deal for TCS in Latin America. TCS had earlier secured a 200 million dollar deal with ABN Amro of Brazil and a 170 million dollar contract with Banco Pichincha of Ecuador.

TCS employs over 5000 young Latin Americans in Brazil, mexico, Uruguay, Argentina, Ecuador and Chile. TCS has a regional training centre in Montevideo.

IMF report of 9 November on Latin America

In the semiannual report of 9 Nov 2007, IMF says "Latin America is poised for its fifth consecutive year of strong economic growth in 2008."
Highlights of the report:
- growth in the region will be about 5 percent in 2007, moderating to about 4¼ percent in 2008. This will be the fifth consequent year of growth over 4 percent since 2003.
-average inflation in 2007 is 5.4% and projected to be 5.7% in 2008.
-The region has weathered the recent market turbulence. The solid fiscal and monetary policies have made the region more resilient than it was in the past to changes in the external environment. Instituitional reforms and stronger policy frameworks have made the region better prepared to face times of global turbulence.
-poverty, unemployment and inequality have declined since 2003.
-While the growth of the region has been partly due to the favourable external environment such as increase in demand and prices of commodities, the internal reforms and policy framework of the governments of the region are the most important.

International Monetary Fund Director for the Western Hemisphere Mr Anoop Singh said in a conference in Brazil on 9 Nov "I think Latin America has moved into a new era without the traditional cycle of boom and bust". This confirms my own assessment based on my study of the changes in the markets of the region and the mindset of the Latin Americans.

On Argentina, Mr Anoop Singh said that President-elect Cristina Fernandez had what he called "a strong electoral mandate from the people of Argentina to continue existing economic policies." He said that, through such policies, Argentina was progressing toward more stable economic fundamentals.

Speech in Spanish at the Argentine Chamber of Importers 7 November

video of the speech can be seen in

http://www.youtube.com/watch?v=yJYHdS2gaEw

I was invited by the Argentine Chamber of Importers, a hundred year old instituition to speak on " how to do business with India". This was my second speech in Spanish in Argentina.

I gave an overview of the new market of India and mindset of the new generation of Indians who are not afraid of globalisation. On the contrary, they want to take advantage of the opportunities arising from globalisation and even seek to Indianise the globe. Indira Nooyi's ascent as CEO of Pepsicola company is the symbol of the new paradigm. This new market and mindset are keen to do business with Argentina and latin america.

I expressed optimism for the future of Argentina which has natural, mineral and energy as well as human resources( which won the Singapore and US Open golf, ATP tennis title, Rugby and Polo). Just as the 1991 foreign exchange crisis was a turning point for India, the 2001-2 crisis of Argentina has created a new mindset. The Argentines are now determined that they would never allow a repetition of the crisis. This is reflected in the monetary and fiscal discipline in the last five years. The Argentine economy has been growing at a high rate of over 8 percent in the last five years and is poised to continue the growth in the coming years.

The emerging new Argentina and India are discovering the complimentaries of their industry and business and are moving towards a long term partnership. I was stuck by the enthusiasm and seriousness shown by Argentine importers for India. This is matched by the interest being shown by Indian businessmen for Argentina.

Indian BPO of First Source in Buenos Aires

Raul Martinez, Tarak Ghosh and Myriam Cunningham with me

I visited the Indian BPO of First Source (ICICI group) in Buenos Aires. It is the largest among the Indian IT/BPO/KPO units in Argentina employing 400 young Argentines. They do the backend work for the American telecom giant Verizon and recently they have got a financial job from the Citi Bank.

The BPO is in the heart of Buenos Aires city, amidst elegant cafes, bars, restaurants and shopping.

Raul Martinez is the country manager of the BPO. Tarak Ghosh from India has been taking care from the Indian side. Both are upbeat about more business opportunities and expansion of the BPO.

All the Argentines work in English language. The Indian company is happy with the skills and talents and quality and output of the Argentine staff.

Argentina offers competitive advantages for IT/BPO/ KPO business with its high literacy rate and relatively low salaries in dollar terms. Argentina is a lower cost location than Chile, Mexico, Brazil and Mexico.

The entry of Indian IT, BPO and KPOs contribute to the human resource development of Argentine society and enrich the evolving partnership between the two countries.

Peru - the next rising star in Latin America

My friend Andres Oppenheimer, who writes 'oppenheimer report" in Miami Herald has concluded that Peru is the emerging new star in Latin America. He has come to this conclusion, based this on his interview with a World Bank economist and his own analysis. Following are points he has cited:

• Peru's economy has been growing at about 6 percent a year for the past six years, a longer period of steady growth than most countries in the region. The United Nations Economic Commission for Latin America is projecting a 7.3 percent growth for 2007, and a 6 percent increase for 2008.
• Poverty has fallen from 54 percent of the population in 2001 to about 44 percent, according to official figures.
• Inflation is at about 2.8 percent, one of the lowest rates in the region.
• Exports have risen at an average annual rate of 24 percent since 2001, including an 18 percent annual rise in nontraditional exports, mostly agricultural goods and textiles.
• Foreign direct investment has soared from $810 million in 2000 to $3.5 billion last year.

His write up in
http://thecolourofhope.blogspot.com/2007/11/oppenheimer-report-peru-may-be-next.html

Los Angeles Times article on Argentine economy

I agree with the analysis of this article and that is why i am reproducing it here

How Argentina jump-started its economy

Buenos Aires' first couple revived the economy -- despite, not because of, the IMF.
By Mark Weisbrot October 30, 2007

Cristina Fernandez de Kirchner on Sunday became the first woman elected to the presidency of Argentina. Her victory is not difficult to explain. Her political party, under President Nestor Kirchner (her husband), led a dramatic economic turnaround that made Argentina the fastest-growing economy in the Western Hemisphere over the last 5 1/2 years.
More than 11 million people, or 28% of the population, were pulled above the poverty line as Argentina's economy grew by more than 50%. Its 8.2% annual economic growth was more than twice the average for Latin America. Unemployment has dropped from 21.5% to 8.5%, and real (inflation-adjusted) wages have grown by more than 40%.
Fernandez's victory was thus predictable and relatively easy. But the economic recovery that drove it was not so simple, and the people who led it deserve more credit than they have generally received. The Kirchners and their allies had to take on not only the conventional wisdom of the economics profession but also powerful international institutions such as the International Monetary Fund. Argentina's success may have some important implications for other developing countries.
When Argentina defaulted on a record $100 billion of debt at the end of 2001, almost all of the experts predicted that this would be the beginning of a long period of punishment. International financial markets and foreign investors would shun the nation, they said, and this would be very damaging. The government had better reach an agreement with the IMF and follow its advice. And it had better play nice with the defaulted foreign creditors.
The experts could hardly have been more wrong. The economy contracted for just three months after the default and then began to grow. It hasn't stopped since.
Contrary to a common belief, Argentina's expansion was not based on exports or high commodity prices: Only about 13% of the growth during the expansion was because of exports.
What did Argentina do right? Most important, the government got its basic macroeconomic policies right. After years of seeing its domestic economy crippled by an overvalued currency that made imports artificially cheap, the Argentine central bank targeted a stable and competitive real exchange rate.
In other words, the authorities made sure that their currency didn't rise too high and didn't swing wildly as a result of movements in financial markets. (Here in the U.S., where we have shed more than 3 million manufacturing jobs since 2001 -- the bulk of them lost because of an overvalued dollar -- we might take note.) They also kept interest rates low and made growth, rather than the lowest possible inflation, the top priority.
These policies are mostly a no-no among central bankers and economists, and Argentina had a few showdowns with the IMF, including a brief temporary default to the fund in September 2003. But the fund backed down, and most of the defaulted international creditors ended up settling for 35 cents on the dollar in 2005.
Of course, Argentina hasn't gotten a lot of foreign direct investment in the last five years, and it cannot directly borrow in international bond markets. But these handicaps -- which if you read the business press should spell doom -- turned out not to be all that important. Nor are they permanent. In time, foreign investors and lenders will find their way back to a fast-growing economy.
The lesson? Just as "all politics are local," so too are the most important economic policies for most countries. Getting basic macroeconomic policies right for your own economy is a lot more important than pleasing international financial markets. That goes double for failed international financial institutions like the IMF. The fund not only oversaw the train wreck that collapsed Argentina's economy from 1998 to 2002, it opposed the major policies that drove Argentina's remarkable recovery.
The fact that Argentina's break with the IMF and its policies was key to the country's economic success also has implications for other countries. Over the last quarter of a century, the fund and its allied institutions -- run from Washington -- have presided over Latin America's worst long-term growth performance in more than a century. As a result, most governments in the region have moved away from the IMF. Its loan portfolio in the region has shrunk from $49 billion just four years ago to less than $1 billion today. But it still holds sway in many poor countries.
Argentina's new government will face challenges, the kind brought about by a fast-growing economy: keeping inflation in check and assuring adequate supplies of energy. But these problems are manageable. Of course, there are analysts who argue otherwise, but their forecasts over the last five years have not been very accurate.

Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington. Website: cepr.net