UPDATE 1-U.N. body ups 2010 Latam, Brazil GDP growth view

Wed Jul 21, 2010 11:57am EDT

(Adds Eclac comments on Latam economies)

SANTIAGO July 21 (Reuters) - The economy of Latin America and the Caribbean will likely expand by 5.2 percent in 2010, up exponentially from a previous view of 4.1 percent, the United Nations economic body for Latin America said on Wednesday.

The Economic Commission for Latin America and the Caribbean, or Eclac, said the region's economy would likely grow a more moderate 3.8 percent in 2011, given lingering concerns over the health of the global economy.

The body sees the economy of Brazil, the region's biggest, soaring 7.6 percent in 2010 and 4.5 percent in 2011, while No. 2 economy Mexico is seen growing 4.1 percent this year and 3.0 percent in 2011.

Eclac lauded governments in the region for solid fiscal policy that allowed counter-cyclical spending during the global financial crisis. The United States and Europe are still struggling to recover from the downturn.

"The solid macroeconomics evident in a majority of Latin American and Caribbean countries in the years before the international crisis marked a significant change," Eclac said in a release.

"Countries took advantage of an exceptional period of economic bonanza and international finance to clean up their public accounts."

(Reporting by Felipe Iturrieta; Writing by Brad Haynes; Editing by Eric Walsh) (For a table click on [ID:nN21146139]

Colombia Becomes the New Star of the South

In a time of emerging-market juggernauts, Colombia gets little notice. Its $244 billion economy is only the fifth-largest in Latin America, a trifle next to Brazil, the $2 trillion regional powerhouse. Yet against all odds Colombia has become the country to watch in the hemisphere. In the past eight years the nation of 45 million has gone from a crime- and drug-addled candidate for failed state to a prospering dynamo. The once sluggish economy is on a roll. Oil and gas production are surging, and Colombia’s MSCI index jumped 15 percent between January and June, more than any other stock market this year.

This is more than a bull run. Since 2002, foreign direct investment has jumped fivefold (from $2 billion to $10 billion), while GDP per capita has doubled, to $5,700. The society that once was plagued by car bombs, brain drain, and capital flight is now debating how to avoid “Dutch disease,” the syndrome of too much foreign cash rolling in. Stable, booming, and democratic, Colombia has increasingly become “a bright star in the Latin American constellation,” as emerging-market analyst Walter Molano of BCP Securities calls it. Michael Geoghegan, CEO of HSBC, recently picked Colombia as a leader of a nascent block of midsize powers, the CIVETS (after the smallish, tree-dwelling cat), which stands for Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. “These are the new BRICs,” he said.

For more, click here.

Mexico's June Auto Production Doubles To 206,195 Units

By Paul Kiernan

Dow Jones Newswires

MEXICO CITY -(Dow Jones)- Mexico's auto production more than doubled in June from a year earlier as exports continued to gain market share in the U.S., Canada and Latin America.

Production rose 102% at Mexican auto plants last month, to 206,195 cars and light trucks, the Mexican Auto Industry Association, or AMIA, said Monday. Exports soared 109% to 177,575 units, led by demand from the U.S., Canada and Latin America. Mexico also shipped thousands of cars to Africa and Asia, where its exports had little or no presence last year. Domestic sales remained fairly feeble, growing 7% in June from a year ago to 59,909 vehicles.

"The dynamism of Mexican exports explains the significant increase in production, with growth (even) from levels prior to the crisis," AMIA said.

The auto industry represents Mexico's biggest single manufacturing sector. The U.S. recession led to a plunge in output in 2009, and a number of local assembly plants closed temporarily as a result of curtailed demand.

The rebound in output has led Mexico's recovery in economic activity this year. The National Statistics Institute reported Monday that May industrial production rose 8.4% from a year ago, with manufacturing up 14.2%.

Divided Belgium to assume caretaker EU role

(BRUSSELS) - Profoundly divided Belgium will take the European Union chair on July 1 in the midst of an unprecedented debt crisis, but leading EU figures maintain they are relaxed at the prospect.

When voting ends on Sunday in Belgium's general election, it could take months for the kingdom's political parties to fashion a new coalition government -- especially if, as polls predict, Flemish separatists seize the upper hand.

As a result, the current caretaker government would have to take the reins of the EU's presidency -- still an agenda-setting role in crucial economic and other policy areas despite the creation of a permanent EU president last year.

The day-to-day executive running affairs across the 27-nation bloc, the European Commission, has expressed its confidence that Belgium will run an efficient six-month programme during its six months at the helm.

Of course, the main thrust of Belgian EU priorities have already been worked out -- in conjunction with Spain, the current post-holder, and Hungary, which will take over on January 1 next year. For more click here.

How to Preserve Trust in Anti-trust

08 October 2009, 18:16 CET

By Ben Van Rompuy

Let it be known: yesterday was European Competition Day. With a one-day conference in Stockholm, hosted by the Swedish EU Presidency, the European Commission wanted to enhance the visibility of EU competition policy (or anti-trust policy, in American terminology) and explain its achievements to the general public.

The idea for a European Competition Day grew out of the concern that European citizens are in general poorly informed about the benefits they can derive from EU competition policy. In light of the current economic crisis, consumer education and awareness-raising has never been more crucial. In order to preserve public confidence in competitive markets, and in the benefits derived from them for our everyday life, a better understanding of the importance of competition policy is invaluable.

In Europe, the U.S. and elsewhere, the crisis has generated much debate about the reliance on market forces to provide the best outcome for consumers and the economy as a whole. It has poked holes in the idea that financial markets will self-correct. Extending this concern to markets in general is not a big leap. Many industries in distress have already requested greater tolerance towards cartels, abuses of dominant positions and other anti-competitive practices and, as the social impact of the recession unfolds, political pressure to retrench competition enforcement is expected to intensify. As a response to these calls, the EU and U.S. competition authorities declare that they continue business as usual. However, the European Commission already showed flexibility in the application of the rules under which state aid is monitored (it approved over 2,900 billion Euro of state guarantees in favour of banks). Furthermore, if history can tell us anything, it is that no government has reacted to a crisis by calling for a more vigorous anti-trust enforcement. In the face of the Great Depression, the U.S. government suspended the anti-trust rules and put in its place a system of industry-sponsored codes. Similarly, albeit less radical, the European Commission relaxed its stance on competition issues in response to the oil crises in the mid-1970s.

For more, click here.