Latin America

The definition of countries in poverty has needed to open up to a wider lexicon of terms in order to explain the various ways in which a country could be in poverty, and the stages in which it might be able to get out of it. In financial circles, the term BRIC, referring to Brazil, Russia, India and China have created their own investment category, known in common speak as “Emerging Economies”, places like Mexico, Turkey, Indonesia and Thailand have joined the BRICs as potential gold mines for investors, win or lose, it has been an exciting ride.

Since the 1990s, emerging economies have been seen as the instigators of global economic collapse as well as the drivers of future untold fortunes. Economic collapse often followed early regulatory changes in many of these countries. Reading like a villain in the latest Batman movie, The Asian Tigers, a collection of smaller Asian economies was hit by financial crisis in the late 1990s. Russia, Turkey, Brazil also collapsed since then on more than one occasion. Mexico was one of the first to collapse in 1993, complemented by Argentina as one of the last, which had a number of severe collapses, leading to a major one in 2001. All these economies seem to be doing relatively well now, especially larger ones like China and India, who this week were strong enough and had enough clout to stop the Doha Round of the WTO, based to a great degree on India’s disapproval of the agricultural limitations in the agreement, a source of income in which emerging economies often have as one of their staples of national revenue.

With India now being able to determine the course of future international trade treaties and China being seen by many as the next economic power and rightful host of the Olympics, what will countries like Russia and Brazil do to place themselves in such a position in the future? Russia, earning massive revenue from its oil reserves has spent the last twenty years trying to reassert itself amongst oligarchs and conflicts, economically and militarily. While Russia has had many opportunities in reality, cities like Moscow and St.Petersburg have taken much of the benefits and have left rural Russia in neglect. Much of the country’s wealth is only now being re-absorbed and stability in government reasserted while rights of protest have been curbed to a great degree. Recently, military exercises in the North Atlantic and with China have put NATO on alert, showing that which Russia might not become the next economic giant, it certainly wishes to be heard in some manner.

While large yearly GDP revenue is considered an economic miracle in most of the world, 9-15% GDP growth was often common in Latin America throughout the 90s, and resulted in spectacular economic collapse in Brazil, Argentina and throughout the region many times over through 2001. Brazil, with its former labour leader and President has not taken the populist approach to economics, adopting policies of centrists past Presidents to form a step-by-step approach to growth for the world’s next big emerging economy. With a slow and stable growth rate of 5%-6%, Brazil is moving slowly out of economic instability to become the next stable global economic power. While Brazil has a population of over 170 million people, the Brazilian economy is about the same size as Canada, which has a population of 32 million. Brazil, with its stable progressive growth rate and poverty reduction strategies spends much of its time acquiring an economic future while trying to reduce its poverty rate and reduce inequality in the process. Avoiding heavy IMF measures to slash inflation, and avoiding Chavez like populism in reducing poverty in exchange for its business class, Brazil may stand out as the model for Emerging Market development if high GDP rates in India and China cannot manage its plus 10%-15% GDP and the changes and attention it brings in the long run. While time will tell which development strategies are successful in the long run, it is evident that the BRICs of the world are all different and all successful in their own unique achievements.

The global economy has recently hit a turning point, where the environment and a massive rise in oil prices sets to change the way we live, trade and do business. Not since the 1970s has such trauma in oil prices pushed policymakers into emergency mode, scurrying to satisfy the electorate which is convinced of a future environmental disaster by balancing policymaker’s inability to alter oil prices with the ever rising inflation and food prices. The major debates on how to handle the environment and the oil shock however have differed in policy and approach outside of the US and Europe, where many oil producing nations and developing nations feel the immediate effect, either by the dominant nature of the energy industry in their country or massive food shortages due to high levels of poverty in their streets and shantytowns. While no country can claim a victory over inflation in the current global economy, some strategies might work better than others in oil producing and developing nations.

In the FT.com article Latin America pays the price for fuel subsidy by writer Richard Lapper, the author details the pros and cons of fuel subsidy policies in the region. In the Americas there are three main types of countries to note in this latest oil crisis. The first types are those like Venezuela and Mexico, who are for the most part oil producers. These countries have a benefit to some degree in this crisis, as they have what everyone wants. Hugo Chavez and Venezuela has gone from $US 7 billion in oil revenues in the last two years to nearly $US 54 billion. The result of this is that Venezuela subsidizes its fuel to keep it at 4 cents a litre, but also loses an approximate $11US billion in export revenue because of their subsidization of fuel in the country. Mexico, while a net exporter of fuels also is paying an approximate $19US billion to re-import refined fuel product so it can also maintain a fuel subsidy inside the country. The result however is that the state is taking these costs as opposed to the citizens and industry themselves. At 4 cents a litre and 69 cents a litre at face value, oil exporting nations can likely keep their fuel prices low for some time and avoid the political turmoil that is overtaking many of their neighbors. In Asia, many countries who are also sensitive to inflationary pressures have given up subsidies altogether, allowing their reserved to remain stable while inflation and poverty rise dramatically…a lose-lose situation with few options.

The second type of countries in the Americas are those developing countries which require fuel to be imported and set their fuel prices with subsidies to ease pressure to its citizens from world fuel prices. The most notable country is Chile, importing almost all of its oil, Chile also added $US 1 billion to its energy stabilization fund and reduced the price of fuel via subsidies to 10 cents less a litre. While this has resulted in an immediate reduction in inflationary prices for Chileans, it also costs the state much in reserves which is never a good sign in the Latin American context. Argentina and Ecuador are following suit, raising fuel subsidies to $US 11 billion and $US 1.46 billion respectively. Colombia, which plans to tax oil companies to ease pressure on its own subsidies, hopes to create $US 3 billion in revenues from these taxes, but still plans to subsidize energy on its own in the process for at least the next year. Peru stands out, as its subsidies are being slowly reduced, but at the loss of its citizens who have already incurred a 4 cent per litre increase in prices.

The reasons for diverse policy on fuel prices in the Americas are a result of the chaos that fell over the region from the oil crisis in the 1970s. Many countries like Mexico and Brazil, who are net energy exporters, took the initiative in the 1970s and 80s to borrow funds at very low rates to fund the expansion of their oil industry and take advantage of high fuel costs at the time. When the price of oil dropped, and their loans were recalled, it left not only Mexico and Brazil in shambles well into the 1990s, but turned the entire region into a case study for economic collapse and record high levels of inflation and inequality. Brazil, with its recent step by step anti inflation policy has boosted investor confidence, aided by recent discoveries of massive oil fields in Brazilian waters and a stable growth rate, spurred on by the growth of good economic policy and political responsibility. This has occurred in the last few years however, after inflation and economic collapse from the 1980s until the new millennium. Unlike Venezuela, Brazil has sought growth through political cooperation, economic diversity and an opening up of trade and social policies, allowing it to remove itself from becoming a nation dependent on one major energy export and avoid future political chaos by trying to be inclusive to all elements in society. A fruitful result in Brazil is the popular use of sugar cane based Ethanol fuels being used in the country in autos and industry, with a policy balance being created so food prices are not strongly affected. Part of much of the food crisis is that oil raises the costs of shipping and new unstudied environmental policies have created a strong reaction to the global rise in corn prices, a possible Ethanol fuel source which has not run any cars yet, but have put many of the world impoverished into starvation. With inflation being the curse of Latin America, and oil often becoming the root cause of much of the regions economic collapse, even in oil producing countries, Latin America needs to find a proper balance between taking advantage of oil and reducing poverty, and subsidies their nations with clever fuel policy and maintaining national reserves. There is no definitive answer to the modern oil crisis, there are just policy options to keep nations afloat.

The third type of countries in the Americas which have a diverse fuel strategy are those developed countries which are feeling the effect of the rise in oil prices. While many are already familiar with the US position on the issue, a country such as Canada needs to be examined as well. Canada, unlike the US is a major oil exporting nation with massive reserves in the province of Alberta, which is thought to have as many untapped oil resources amounting to that of Saudi Arabia by some speculators. Canada’s fuel policy however does not subsidize its local retail petrol stations, but charges similar world prices to many other developed nations who do not have a large fuel resource. While the Canadian Government has no plan for a fuel subsidy, there are some measures taking place to move its large auto industry into more environmentally friendly technologies. Short term pains affect many in the country as automobiles in such a large country are a necessity, and transport is a requirement for Canadians to maintain itself and allow for economic opportunities for all people across the country. Fuel policy has elicited some reactions however, where in the Province of British Columbia, a energy surcharge has been places on residents of the province to raise energy prices to the benefit of the environment, and the detriment of small and medium sized companies that are being exterminated by high fuel prices and will no doubt be gravely hurt by extra taxes which will raise the cost of all functions of society. With nearly 70% of Canadians working for small and medium sized enterprises, the government in the province has done nothing but to aggravate many in the process. In reality the best motivator of environmental technologies are high fuel prices, but when there is a natural rise in the price of fuel, adding an energy tax on top of it produces minimal environmental gains at the hands of citizens who not only are at a loss from the market price, but are in competition with others who also suffer from high energy prices but do not have the burden of an extra tax. This strategy has been adopted by the Opposition leader of Canada’s Liberal Party, Stephane Dion (sse above picture), who wishes to place a Carbon Tax on top of Canada’s industry during the fuel crisis, creating higher fuel prices in Canada, likely to go above any other country in the world. While the environmental technologies will benefit from higher fuel prices, taxing a country in the middle of it for the benefit that has already been achieved is simply absurd. With the current party leader having a poor record on environmental policy when he held the position of Environment Minister in the last government, it may be that Canada becomes the country that has the largest number of oil reserves in the developed world with the highest fuel prices in the developed world if Dion is elected based on his energy policy for Canada. At the moment, Canada has one of the most stable economies in the world, which could easily become history with poor policy making by whoever claims the leadership in the next few months.

While predicting fuel policy for the future is a gamble for many policy makers in the Americas, they must be accountable in their actions not to overcompensate via fuel subsidies at the expense of national reserves, as inflationary pressures do not simply result from the cost of living, but also from currency fluctuations and national reserves. Balanced policy may make the oil burden less dramatic, but it is important to address the issue with a policy that does not only address the environment and commerce, but also food prices and poverty as people should always be a priority above ethanol and environmental policy theories in forming energy policies in the Americas. While all countries have learned a lot from the crisis of the 1970s, not every country will escape possible damages from this most recent bout of oil shocks. Sound Policy is the key, but offers no assurances to the fragile economies of Latin America.

Update: ISN writer Sam Logan publishes his piece on Mexico called Mexico infiltrated where he discusses the slow infiltration of the cartels into Mexico’s government institutions and the eventual failure and disappearance of the government in the process. A must read and powerful complement to these FPA posting on Mexico. 

Fellow FPA blogger Alejandro Quiros Flores has done another magnificent job these past few weeks discussing the involvement of Drug Cartels running many of Mexico’s towns and evidence that the Mexican Center for Research and National Security (CISEN) has been using third parties to spy on many member of Mexico’s Senate. His postings can be found here at FPA’s Mexico Blog.

In Alejandro’s post on July 16th, he discusses a report by Mexico’s Attorney General’s Office which claims that more than 80 of 2,500 of Mexico’s municipalities are currently being controlled by Drug Cartels. In the report, many of the Cartels are seen as operating as a type of de facto government in many of those municipalities, providing some services, but mostly concerned with running the drug trade and prostitution in many of these communities. While 80 municipalities are still a small number, the rise of the Drug Cartels in recent months and the killing of many Government officials and gun battles in many of Mexico’s municipalities does not help Calderon and Mexico’s government, police and army claim any real victories in its recent internal conflict. With successes in Colombia by Uribe’s government and the world media focusing on the terror from FARC guerillas, years of internal conflict inside Colombia may mirror the future of Mexico in its fight against well established drug cartels. The FARC, who for many exist solely for the expansion of the narcotics trade, still govern many parts of Colombia itself, including many smaller municipalities. With forty years of the FARC and at least thirty years of the narcotics trade in Colombia, Mexico might do well by working with Colombia to win back its towns and avoid a second FARC style government in Mexico.

In Alejandro’s July 12th posting, an interesting turn of events has placed many of Mexico’s Senators in conflict with the Mexican Center of Research and National Security (CISEN) for spying on many members of the Senate, without knowledge by the Senators and by using a third party to gather the personal information. The realization of the activities has placed the ruling PAN party at fault, as the director of the organization that was commissioned to collect the information is closely tied to the PAN itself. Calls from many Senators for the resignation of the head of CISEN, Guillermo Valdés Castellanos will no doubt give the opposition in the Senate a lot of ammunition in attacking President Felipe Calderon and his PAN party. The Mexican Senate has always been a source of stress for PAN party leaders, especially for Fox and Calderon who campaigned on their wish to tackle corruption in Mexican politics, but now have been tainted by scandal themselves. With the conflicts over narcotics and political pressures in the Senate, Calderon is likely wishing to return to the days where he was a brand new President, with only Lopez Obrador to contend with on occasion.

Much thanks to Alejandro Quiroz Flores and Mike Coe for their work on the Mexico Blog. Cheers Amigos!!

The European Union and Latin America have always had amicable ties, via trade, culture and administrative and legal traditions. Immigration from Latin America to the EU has often been able to avoid the conflict and debate that are common in the United States, where millions of immigrants from Latin America are more of a campaign issue than a sociological blessing. The European Union may have angered some of their Latin American friends however, with the new EU Immigration Policy creating a collective grumble throughout immigrant communities in Europe and among Latin American leaders themselves.

It is not common to have so many Latin American leaders, often with varying political stripes, to have complete agreement on an issue or a set of issues. Ironically, the past two weeks have produced not only new relations between Hugo Chavez and Alvaro Uribe, but produced a collective grumble by all leaders during the Mercosur regional summit and other policy discussions against the new EU Immigration measures. It is not secret that Spain and the EU have become the new destination for many legal and some illegal immigration from Latin America. The new EU policy seeks to detain possible illegal immigrants for a period of up to 18 months before deporting them, leading many Latin American leaders to perceive the EU as placing issues of immigration on the immigrants themselves, allowing policymakers to avoid the responsibility in dealing with immigration in the EU on a proper legal and equitable level. This led Latin American leaders to sign a joint declaration against the new EU immigration policies during Mercosur summit. In addition, some leaders threatened restrictions of Venezuelan oil, and possible restrictions of grain and other agricultural products leaving the rich fields on Brazil, Argentina and other countries that have been hit by the recent food crisis. While Latin America is not the only region to be angered by the new EU policy, it is one of the regions that are considering a collective reaction against Europe on behalf of the hundreds of thousands living there illegally which originate from Latin America.

The question that remains is whether the new EU policies are a just approach in dealing with illegal immigration or whether they warrant a strong reaction from Latin America and other countries around the globe? While the 27 member EU nations did pass the new Immigration Policy to be implemented in 2010, many have varied time restrictions regarding detentions of illegal immigrants. In reality, the EU policy is not only addressing illegal immigration coming from Latin America, but is greatly focused on the 51,000 illegal boat people coming into Spain, Italy, Greece and Malta that arrived in 2007 alone. Many of these illegal migrants end up drowning on their voyage to Europe, presenting the EU with a diverse humanitarian problem in dealing with illegal immigration. The new policy awards voluntary deportations, but also penalizes migrants who attempt to frustrate officials in dealing with their deportations as well. Families and children also have some rights extended, but as a whole the new policies are a lot stricter than previous laws protecting the EU from illegal migration.

After the EU Policy is implemented in the long run, the true effectiveness of the EU Immigration Policy will show its true colours. Protests from Latin America will likely not lead into true economic sanctions however, unless there are massive abuses against their citizens in the EU. In the end, many still will enter the EU illegally, and this is unlikely to change. The effectiveness of the new policy will come when people are actually caught and deported, which is still the fate of the minority of illegal immigrants in most countries in the world. Morality and immigration policy is still to be debated in Latin America and the EU, but it is certain that a solution to these issues is far from an absolute success in immigration policy in any region of the world.

For Video on the Mercosur Summit and Latin American leaders and EU Immigration, click here.

Last night many Colombians at home and abroad stayed up into the late hours of the night to hear the first free words from the rescued FARC captive and former Presidential Candidate Ingrid Betancourt. Ingrid was captured by the FARC seven years ago during her presidential campaign and has been used as a symbol of fear against the Colombian government and people ever since. Numerous attempts to negotiate via France, the US, Venezuela and Hugo Chavez and through Colombian leaders themselves had lead to numerous failures, until last night when a Colombian rescue operation used internal operatives and complex logistical planning and intelligence that resulted in a rescue that would outshine any of the four Rambo movies. Along with Ingrid, three American hostages were also freed and 14 other Colombian prisoners. The intelligence and raid that lead up to the rescue culminated over the last few months, beginning with Hugo Chavez obtaining the release of a handful of FARC hostages, rapidly leading to a heavy exchange of words between Chavez and Uribe. Increased tensions arose when Colombia took the fight against the FARC to a camp in Ecuador, killing one of their top leaders and a number of other leaders being captured or killed in the following weeks. Another significant event was the death of Marulanda, the top FARC commander dying of a heart attack. With the confusion in the FARC ranks and dozens of desertions, the command and control structure not only gave Colombian Special Forces the opportunity to win back the hostages, but also is slowly degrading the FARC from a force a few years ago of 18,000 members who were perched outside of Bogotá, to an estimated force of 9,000 troops hiding in the jungles.

After the festivities subside and the Colombian military and FARC battle it out in ongoing skirmishes, the security and policy changes by this event will likely solidify policy decisions towards either a posture of negotiation with weakened terrorists, or a more likely position of increased military responses towards the FARC. With over 700 innocent captives still being held by the FARC, it is unlikely that such a military operation that was seen last night will be successfully used a second time without a significant reengineering of the strategy to maintain an unchallenged operation in the future. Politically, Uribe has been able to avoid much of the criticism of his government by becoming so successful in dealing with terrorism in his country. While he has made moves to centralize his authority and is trying to extend his presidency to a third term legally, albeit Ultra Vires the powers of the Colombian Constitution, the support he has gained and the successes he has achieved against internal threats in Colombia has produced a real opportunity for Colombia to achieve peace and prosperity after 40 years of war with the FARC.

Colombia in reality has created the only true victories of the last years of the War on Terror, and the previous War on Drugs that is likely the envy of any Bush to have served in the White House. With McCain actually being in Colombia during the events and Obama praising the activities of the Colombian military in rescuing the hostages, the way terrorism may be address in the future may take notes from Uribe’s Colombia. Currently the US and NATO is mired in Afghanistan without an end in sight. Iraq and militants in the Middle East as a whole have not been successfully dealt with and often spring up after it is assumed that they have been defeated. Drug traffickers in Mexico, spurred on by money and control of the country are currently taking a page from the FARC, attacking Mexico’s leaders and security officials in an effort to place the country and its citizens in fear. Negotiations, while bringing some progress to the situation in Colombia in the past are being heavily criticized in Israel this week as two pilots who are assumed dead are being exchanged for Hizbollah members in Israeli jails, one being a criminal who killed a police officer, a father and his daughter who had her head smashed against rocks in order to end her life. Actively pursuing the FARC has undoubtedly lead to progress towards freeing hostages and bringing peace to Colombia. Globally, unless negotiations in other regions lead to significant gains in the next while, it is likely that Uribe may become the face of successful anti-terrorism in the near future.

And what of Ingrid Betancourt? She may still run for president or simply become the world expert in hostage scenarios and the FARC, claiming she has earned her PhD in the FARC during her time in captivity. While being a compassionate person, it is likely that Ingrid will not have much sympathy for the FARC. Even if the causes of poverty and narcotics in Colombia have to be dealt with, Ingrid will likely acknowledge in her future work and possible presidential campaign that hostage taking, terror, violence and humiliation has no place in any political movement in Colombia or abroad. As for now, she is spending time with her now teenage children and family and recovering after 7 years as Colombia’s most notable captive and representative of the soul of her country. For now, her and her daughter and supporters vow to work for the release of the others still sitting in FARC jails inside the Colombian jungle. She thanked Uribe personally last night in a press conference with him and may run again for President. But for now…Welcome Back Ingrid!

The last year of investment speculation in the developed world could learn something from their neighbours to the south. Inflation and price fluctuations over the last ten to fifteen years in Latin America has habitually been many times worse than in North America and Europe, often suffering from huge inflows and rapid outflows of liquid investment, drastic changes in commodity prices and an overall economic depression in some of Latin America’s largest economies. For the first time since the late 1970s the speculators have not turned only Latin America into a case study for failed economic policies this time around, in fact it is the traditional lending nations that are feeling the brunt of the latest economic soap opera to hit the world financial markets.

The first narrative surrounds oil and petroleum products and their rise in overall prices. While in the 1970s, much of that chaos in gasoline sales were due to OPEC, price fixing and conflicts in oil producing nations, this current oil crisis is symptom of a more complex collection of entities. Last week, OPEC leaders met with officials regarding an increase in production by member nations. What was sharply pointed out however is that the current crisis does not have its roots in OPEC or price fixing, but due to new industrial users of oil, the US auto market, and of course price speculation coming from market experts themselves. This invisible pressure has done nothing but boost the price of oil, this despite no 1970s oil crisis, hurricanes, typhoons or any other tangible threats that would lead to sharp increases in fuel prices.

How can policymakers manage such intangible threats to their economies? A lesson from the past is to maintain a stable oil market worldwide, in other words, deal with the tangible threats first. This requires that countries that produce oil can always have a change in government and require stability, but this needs to come up with investment solutions that do not keep policymakers in those nations under control from abroad, or give reasons for countries like Venezuela, who were at the point of developing a diverse economy and societal institutions in the early 1970s, from becoming a country run by oil barons on the right wing or socialist oligarchs on the left. Countries like Nigeria are often placing oil revenue and politics surrounding those issues before stability, institutional development and human rights, leaving those countries as one resource economies controlled by Petroleum and oligarchic entities. Venezuela in the modern form started its transformation in the 1970s, when it was considered the most significant OPEC nation and taking the position and contributing to the global oil crisis of that period. With the realization of diminishing demands for oil coming with new environmentally friendly technologies at the time, the rest of OPEC reintegrated the oil industry into the world economy in order to maintain their clientele, dropping prices and leaving much of Latin America in severe debt in the process and mired in political turmoil in the long run.

In today’s oil crisis, much of the tangible pressures of the past two years have mainly subsided. In the current crisis, record high prices often came with no dark clouds on the horizon, but simply word of mouth passing through enough trading floors to create stress in the market and a drastic rise in prices. With regulatory development in Latin America becoming more effective only in the last few years, speculation and bad press has always given policymakers a difficult task in managing what is actually happening in the market. Balancing the media surrounding a market with what was available became the defining issue of investment in the late 1990s and early part of the new millennium, often not caring if it involved a healthy economy or one in chaos. The 2001 Argentine Peso devaluation was part of the reason for the country’s complete and total collapse. With policy advice and spending restrictions from the World Bank and IMF creating tight economic policy and fiscal stability that could only barely be maintained, bad press became a great factor in sparking the flames that started the crisis. While many developed nations suffering with fuel prices are not as fragile as Argentina was in 2001, the effect of intangible threats need to be dealt with through good investment laws and policies that take the fluidity of modern investment into explicit consideration and deal with speculation with transparent responses to investors and the public.

The second point to consider is that all policy fields must be seen in a holistic fashion. With energy policy comes human rights policy, environmental policy, labour policy and economic development. Brazil is seen by many as the next China or India, and much of this has to do with some effective strategies developed by various political parties and sensible policy decisions since the 1990s. While Brazil is an oil exporter, the development of food policy and energy policy has come via the production of biofuels in balance with the price of food production to create one of the most widely used biofuels in the world being produced and used in Brazil as well as maintaining enough crops to keep sugar cane prices low enough to produce sugar and fuel for societal consumption. Much of the oil crisis worldwide is exacerbated by a sudden rise in environmental policies that are so hastily implemented that it is taking staple foods and overvaluing them for the sake of engines that do not yet exist, leaving the poorest 2 billion on the planet with almost nothing to eat. Environmental policy, while committed to with positive intentions, has also created many intangible issues that leave fuel policy with another victim. Often these victims are not those who drive cars and head up industry, but those on the margins of society who live day to day that cannot afford the luxury to be concerned about environmental changes in the artic or buying a hybrid vehicle. In reality, high fuel prices will always spark more environmentally friendly technologies, but coordination of policy and the realization that people matter before autos is essential to avoiding oil crisis, and producing environmental policy that hurts more people than it helps.

The third and final point that must be considered is that other countries who are developing must be allowed to do so, China must be allowed to do so as well. Economic policies have always tried to develop many economies and lift many out of poverty in the process. Like poor environmental policy, any regulations and legislation that places more people into poverty for the sake of intangible goals should be reformed and reconsidered and heavily criticized. Policy which allows for growth in places like China and Brazil should be encouraged with a holistic policy approach, so that the environment and human rights come into the discussion on economic policy. A possible positive result would be Sao Paulo becoming an economic powerhouse, with good policy driving good development, and open debate on challenges facing the populations making for better policy outcomes. The reality is however that until enough dialogue on the next trend focuses itself on Brazil, policymakers and investors will have to react to what might be an issue, as opposed to addressing tangible issues which are the basis for economic achievement for the future. Intangible issues and investment has always been a great problem for many countries, only when it is address as such will new policy and guidelines for investment regulations allow for a sensible, holistic and humanistic social, environmental and economic policy that is strong enough to reject hearsay in the international oil market.