As the rainy season continues more and more residents are
 marking new giant potholes with whatever is handy,
 including this old tire.

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India seen as big market
for Caribbean and Latins


India could become a fast-growing market for Latin American and Caribbean commodities but governments in this region must foster closer ties with the South Asian giant and reduce trade costs to tap into that opportunity, according to a new study by the Inter-American Development Bank.

With 1.1 billion people and a scarcity of natural resources, relative to other continent-size nations, India has the potential to be a large buyer of agricultural and mineral goods, Latin America’s main exports, according to the study. Currently, India represents just 0.8 percent of this region’s overall trade, compared with China’s 7.7 percent share.

The book “India: Latin America’s Next Big Thing?,” published by the development bank's Integration and Trade Department, looks into recent development and economic trends in India and their possible impact for Latin America and the Caribbean. The study argues that India has the potential to mirror the recent economic performance of China, which has become a major market for Latin American and Caribbean exports but also poses a challenge for the region’s manufacturing sector.

“The region and India are increasingly together at the table when major decisions are taken,” said Luis Alberto Moreno, development bank president. “We are starting to see greater integration among them and there is a tremendous opportunity for more trade and cooperation. Latin America and the Caribbean are poised to advance confidently into a promising future and India is increasingly interested in being an active partner in that process.”

In order to boost trade, both India and Latin America must lower tariffs and trade barriers, the study concludes. India’s average tariff on Latin American agricultural goods is 65 percent, more than five times China’s 12.5 percent tariff. Even though Latin American tariffs on Indian goods are not as high — reaching 9.8 percent in the case of manufactured products — they are well above the 4 percent to 6 percent range, the study said. A 10 percent reduction in average tariffs imposed on Indian products, for example, would likely increase imports of Indian goods by 36 percent in Chile and Argentina. The 4 to 6 perent range is urged by the Organization of Economic Co-operation and Development.

India and Latin America must reduce transport costs, the study said. Currently, India, unlike China, has no direct shipping services to this region. Goods have to be shipped first to Singapore or Europe, which increases both freight rates and shipping times. In the case of Brazil, for instance, shipping a product from Santos directly to Mumbai would take an estimated 27 days and 15 hours. Shipping via Singapore would take approximately 36 days and 18 hours — almost nine days longer, the study concluded.

The book estimates that a 10 percent reduction in freight rates would likely boost imports of Indian goods by as much as 46 percent and 47 percent in Chile and Argentina, respectively.

Currently, high trade costs are preventing Latin America from reaping full benefits from its current trade with India and undermining the flow of investments between the two regions, the study said. Today a 1 percent growth in China’s gross domestic product generates a 2.4 percent increase in this region’s exports to China. Meanwhile, a 1 percent rise in India’s GDP yields just a 1.3 percent growth in the region’s sales to the country.

The study also calls for the two regions, which have signed numerous cooperation agreements covering 21 economic sectors in the past decade, to increase opportunities to exchange valuable development and economic lessons.

For example, India can provide important lessons based on its success in creating dynamic information technology services, burgeoning aerospace, microfinance and pharmaceutical industries and top-notch universities to train its leaders, just to name a few areas, said the study. Latin America, on the other hand, can provide success stories in agriculture, mining, aeronautics, biofuels, private pension schemes and poverty alleviation programs, all of which could help India address some of its economic growth constraints, it added.

The study also identifies areas in which India could represent a competitive challenge for Latin America. Given the large size of India’s population and the political pressure to reduce poverty, the study argues that the country will likely specialize in labor-intensive manufacturing goods like China.

India has now just a fraction of China’s level of participation in U.S. imports with a market share of 1.7 percent against China’s 22.3 percent in 2008.

Emergency commission gets
criticism from Contraloría


The Contraloría de la República said it has found weaknesses in the coordination, supervision and control of the Comisión Nacional de Prevención de Riesgos y Atención de Emergencias, better known as the national emergency commission.

The criticism related to rehabilitation and reconstruction after emergencies, the Contraloría said. The agency, which is the budgetary watchdog, said, in effect, that there were no controls that guaranteed supervision of projects and that some files of projects lacked relevant information.

The emergency commission coordinates the work of hundreds of local committees, but the major reconstruction projects are handled at the national level

Power outage along autopista


The Compañía Nacional de Fuerza y Luz said it will cut off power to part of Escazú and part of Santa Ana today from 7:30 a.m. to 4:30 p.m. for maintenance.

The blackout will include Villa Real and Hacienda del Sol but not the Río Oro development. Also included will be commercial outlets along the Autopista del Sol such as Pequeño Mundo and Restaurant Machu Picchu.