LatAm Daily Briefing: Peru Has LatAm’s ‘Most Stable’ Economy, Bloomberg Says; Russia Says Venezuela is ‘Key Ally’

With inflation surging at a more than 50% in Argentina, the cryptocurrency exchange Lemon Cash plans to increase its issuance of Bitcoin rewards cards to three million this year. The Visa cards, which convert the necessary amount of the cryptocurrency from the user’s account into pesos to make payments, were first offered by Lemon Cash in November. The company had initially offered 100,000 cards. For each purchase, holders of the cards receive 2% back in Bitcoin. While the cards have been seen as a marketing tool elsewhere, they are being used in Argentina to help temper the impact of surging prices. Argentines fear and seek cover against an accelerating inflation rate that is already the fourth highest in the world, after Venezuela, Lebanon and Zimbabwe, according to data published by Bloomberg.

Brazil’s President Jair Bolsonaro and his Russian counterpart Vladimir Putin have discussed the development of small nuclear energy plants in the South American country. "We have vast potential for developing cooperation in the sphere of oil, petroleum products and natural gas. We are striving to strengthen our high-level dialogue on oil exploration and production in deep-water deposits. We are interested in small nuclear power plants," Bolsonaro said. In a joint statement issued after the two leaders’ meeting in Moscow, the two countries "stressed their determination to strengthen their strategic partnership". "The heads of state expressed their intention to expand the dialogue on issues such as off-shore hydrocarbon production, the development of hydrogen and nuclear energy.

The chairman of the US Senate Foreign Relations Committee, Democrat Bob Menendez, has introduced a bill to declare Colombia a strategic ally of the US outside of NATO. "With our countries celebrating 200 years of diplomatic relations this year, I want to announce the most comprehensive legislative initiative to revitalize relations with Colombia," Menendez announced at the start of the hearing. The bill, called 'US-Colombia Strategic Partnership for 2022′, would deepen cooperation between both countries in terms of security, human and labor rights, and environmental issues. The senator assured that the initiative will also serve to boost foreign investment in Colombia, reinforce the support of the US in the implementation of the 2016 peace agreement, and counteract the weight that China is gaining in the continent.

Mexico has "a difficult outlook for 2022", as the country does not have an engine to drive economic growth in a context where the federal government's narrative is to have private initiative as the enemy, according to Jonathan Heath, deputy governor of the Bank of Mexico. Speaking at an online business forum, Heath highlighted that "2021 was not a good year for Mexico in terms of economic activity", as exports, the only engine pulling the economy, decreased during first quarter, compared to the same period of 2020. And for his part, Guillermo Ortiz, a senior advisor and member of the Board at BTG Pactual, and a former governor of the Mexican central bank, said the electricity reform being promoted by the government may cause the opportunity for nearshoring or relocation of companies in the supply chain to be wasted.

Peru has the most solid and stable economy in Latin America and the Caribbean, according to Bloomberg, after updating its country risk indicators. Peru scores 56.28 points on the indicator, and has displaced Chile from that position, which has 52.79 points. Bloomberg said Chile had not worsened, but was surpassed by a cleaner advance of the Peruvian economy in the fourth quarter of 2021, after registering 35.3 points in the previous quarter. The Bloomberg index measures economic, financial and political sectors in relation to the performance of other developed and emerging countries. Higher scores indicate a lower risk scenario.

Venezuela is a “key ally” for Russia in Latin America, Russia's Deputy Prime Minister Yuri Borisov said while visiting the South American country on Wednesday, adding that the two countries will look to deepen bilateral ties. Borisov's visit to Caracas follows visits by Latin American leaders, including Argentina's President Alberto Fernández and Brazil's President Jair Bolsonaro, to Moscow, and leading analysts suggest Russia is courting the region amid tensions in Ukraine, according to a Reuters report. Venezuela's President Nicolás Maduro said he met Borisov and the two discussed the “powerful” military cooperation between the two countries. "We are going to increase all training and cooperation plans," Maduro said in a broadcast on state television, adding that Venezuela supported Moscow in dispelling threats from NATO.

A.C.