PPK seeks to reignite the Peruvian economy’s growth by increasing the value of mining exports by 25 percent, through simplifying bureaucratic processes to open mining projects and reviving stalled mining projects.
There are several challenges PPK will have to overcome to achieve his mining sector goals, including garnering congressional support, low commodity prices, social conflicts in areas where mines are concentrated, and illegal mining, which has a production value of US$1.3 billion.
The new government seeks to diversify Peru’s energy sector, with a focus on developing natural gas and expanding energy infrastructure, such as widening of the Transportadora de Gas del Perú (TGP) pipeline network and finish the Gasoducto Sur Peruano (GSP).
A slew of over-reaching analyses have been written about the impact of Brexit on Latin America specifically and on emerging markets in general. While the UK’s decision to leave the EU certainly impacts the region in a limited fashion, Latin American governments have taken note of the media attention and are prepared to make Brexit a great scapegoat for their ongoing economic problems for at least the next quarter. Mexico announced pre-planned budget cuts, including some controversial cuts in education, the day the UK voted to leave. Argentine officials are happy Brexit artificially weakened the peso. At least one official in Venezuela made the ridiculous suggestion that Brexit was part of the economic plot against the Maduro government. Expect to see additional Latin American governments in the coming weeks point their fingers at the UK and Europe.
Venezuela’s government has ended its two day workweek, a sign the electricity crisis is easing. Public sector employees will now return to work for half days on Wednesday, Thursday, and Friday of every week. Government officials declared victory. The extreme measures taken prevented Venezuela’s electricity grid from completely collapsing. However, that is a low bar for success.
Against the backdrop of tumbling gas prices around the world (FT), Argentina’s Yacimientos Petrolíferos Fiscales (YPF) increased its shale oil production from the Vaca Muerta fields over the last year from 44,000 to 50,000 barrels per day. As the Wall Street Journal pointed out, Argentina’s domestic oil prices are at $67 a barrel versus the international price that hovers around $40 per barrel (WTI 39.91 and Brent $40.54 on 21 March), shielding YFP and its partners from the effects of the global dip in prices. In 2015, YFP increased spending by 4 percent instead of cutting spending -- other international companies cut as much as 20 to 40 percent.
President Mauricio Macri is pushing forward with his agenda to change several government policies, especially with respect to economy. The Macri administration has been working closely with Mediator Daniel Pollack to resolve the holdout hedge funds problem and regain access to global financial markets. In February 2016, Argentina presented, for the first time, a formal offer to the “vulture funds” of US$6.5 billion -- the original amount claimed in 2010 when the dispute began, but 25 percent less than the US$9 billion ordered by New York Judge Thomas Griesa.