“NATURAL EXPERIMENTS OF HISTORY”: DIAMOND AND ROBINSON BOOK

June 11, 2011 at 2:05 am | Posted in Africa, Books, History, India, Latin America | Leave a comment

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Natural Experiments of History

Jared Diamond (Editor), James A. Robinson (Editor)

Editorial Reviews

Review

A superb collection of eminently teachable essays bound together by a common methodological framework that connects it directly to cutting-edge theoretical and empirical research across the disciplines of anthropology, archeology, history, political science, and sociology.
–John Coatsworth, Columbia University

Natural Experiments of History reaches across a wide variety of disciplines, in ways that should be accessible to just about every educated reader. It is tied together not by topic or region but by the idea that we can make useful and insightful comparisons in ways that are not casual or sloppy, but actually contribute to our understanding of human life.
–Jeffrey Frieden, Harvard University

Natural Experiments of History is a short book packed with huge ideas. Its collected essays advocate how controlled experiments can be applied to the messy realities of human history, politics, culture, economics and the environment. It demonstrates productive interdisciplinary collaborations but also reveals gulfs between different cultures of academia…All of the essays in Natural Experiments of History will trigger debate.
–Jon Christensen (Nature )

This ambitious, at times challenging, book aspires to contribute new ways of historical thinking and historical research by drawing attention, on the one hand, to the similarities between science (including social sciences) and history, and on the other, by using social sciences methods, especially statistical analysis, to study history. The editors argue that though the difference between studies of nature and human history is obvious, there are clear overlaps. They can be viewed through studying comparative history or by conducting “natural experiments of history” and analyzing the “perturbations” and their causes (exogenous or endogenous) in the involved cases. The book offers a broad array of case studies to illustrate and explain the argument, ranging from nonliterate to contemporary societies and from the U.S., Canada, and Mexico to Brazil, India, and tropical Africa. The comparative methods showcased are quite versatile, from two-way to multiple-way comparisons. All the case studies are interesting and help demonstrate how, via comparative study, one society’s, region’s, or country’s situation is better displayed and explained by juxtaposing it with other, similar ones. A useful read in macro, global history.
–Q. E. Wang (Choice )

Natural Experiments of History is a thought-provoking collection of essays that covers an impressive array of topics and would make an excellent text for a course on comparative studies of human history.”
–Thomas E. Currie (Cliodynamics )

Product Description

Some central questions in the natural and social sciences can’t be answered by controlled laboratory experiments, often considered to be the hallmark of the scientific method. This impossibility holds for any science concerned with the past. In addition, many manipulative experiments, while possible, would be considered immoral or illegal. One has to devise other methods of observing, describing, and explaining the world.

In the historical disciplines, a fruitful approach has been to use natural experiments or the comparative method. This book consists of eight comparative studies drawn from history, archeology, economics, economic history, geography, and political science. The studies cover a spectrum of approaches, ranging from a non-quantitative narrative style in the early chapters to quantitative statistical analyses in the later chapters. The studies range from a simple two-way comparison of Haiti and the Dominican Republic, which share the island of Hispaniola, to comparisons of 81 Pacific islands and 233 areas of India. The societies discussed are contemporary ones, literate societies of recent centuries, and non-literate past societies. Geographically, they include the United States, Mexico, Brazil, western Europe, tropical Africa, India, Siberia, Australia, New Zealand, and other Pacific islands.

In an Afterword, the editors discuss how to cope with methodological problems common to these and other natural experiments of history.

Product Details:

  • Paperback: 288 pages
  • Publisher: Belknap Press of Harvard University Press; Reprint edition
  • April 15, 2011
  • Language: English
  • ISBN-10: 0674060199
  • ISBN-13: 978-0674060197

This book is a collection of 7 essays, most of which are quite dry and academic.

Diamond co-wrote the prologue (which is mostly a summary of the book’s contents) and afterword. He also authored (alone) one chapter, which is a comparison of Haiti and the Dominican Republic. Specifically, he examines why Haiti and the DR have turned out so differently, despite the fact that they share the same island. Much of this is discussed also in his book Collapse, but the chapter is still very interesting.

Another chapter (by Kirch) compares a few different Polynesian islands, to try and discover which variables led to different political histories. Some areas of the world discussed in other chapters are: West Africa, India, and the western US, among a couple of others.

Natural experiments in history is a fascinating set of essays looking at seven historical “experiments”. Each chapter has a different author who presents the reader with a wealth of information of their subject of expertise. The writing styles vary, as expected, from author to author. Jared Diamond’s chapter on the origin of the differences between Haiti and the Dominican republic, and on different Pacific Islands is the highlight of the book.

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BANK FOR INTERNATIONAL SETTLEMENTS MARCH 28 2011: PARADIGM SHIFTS

March 28, 2011 at 12:12 pm | Posted in Economics, Financial, Globalization, History, Latin America, Research | Leave a comment

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Central bankers’ speeches for 28 March now available‏

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 3/28/11

Central bankers’ speeches for 28 March 2011

now available on the BIS website

Mark Carney: The paradigm shifts – global imbalances, policy, and Latin America

Prasarn Trairatvorakul: Thai monetary policy in the environment of excess global liquidity

Alan Bollard: Where we are going with macro- and microprudential policies in New Zealand

Brian Wynter: What’s in your wallet?

Ryuzo Miyao: Economic activity and prices in Japan and monetary policy

Peter Pang: Policies adopted by authorities in different jurisdictions with respect to international reserves

Deepak Mohanty: Economic and financial developments in the north-eastern states

All speeches from 1997 onwards are available from the BIS website at http://www.bis.org/list/cbspeeches/index.htm.

Communications

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

Bank for International Settlements (BIS)

Central bankers’ speeches for 28 March now available‏

http://www.bis.org/list/cbspeeches/index.htm

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 3/28/11

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EARLY COLONIAL GLOBALIZATION AND THE SPANISH “SYSYEM OF CASTES”

October 3, 2010 at 7:03 pm | Posted in Globalization, History, Latin America, Military, Philosophy, Third World, World-system | Leave a comment

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Sistema de Castas (1500s-ca. 1829)

Sistema de Castas (System or Society of Castes)

Sistema de Castas (System of Castes) was a porous racial classification system in colonial New Spain (present-day Mexico).

It was a “hierarchal ordering of racial groups according to their proportion of Spanish blood.” In this system, notable categories with significant meaning were espanol (Spaniard), castizo, morisco, mestizo, mulatto, indio (Indian), and negro (black). At the sistema de castas most extreme, there were more than forty classifications, with espanol being the most desirable and negro being the least desirable for sociopolitical purposes. Race, color, physical features, occupation, and wealth in this society mattered as Spanish officials attempted to control every aspect of a person’s life from employment to regulating dress codes and friendships.

Within the Castas, most persons of African descent were categorized between Spaniard and Negro, and identified as mulatto or racially intermingled hispanicized citizens of predominant African heritage. Socially, blacks were marginalized in Colonial Spanish affairs and were systematically victimized by an institutional discrimination designed to quell civil unrest through assimilating them as ladinos (Spanish speakers) and integrating them into a feudal caste society.

This pattern of customary and legal oppression led to many persons of African descent choosing to move to the frontier of New Spain (what is now Northern Mexico and the Southwest United States). From 1531 to 1800, Afro-Mexicans came to the Southwest from Mexican states on the Northern frontier like Vera Cruz and Coahuila and, after 1700, from states on the Pacific Coast such as Sinaloa and Michoacán de Ocampo. The initial recruits for frontier settlements like San Jose, California, were lighter-complexioned Spanish colonists, many of whom declined to participate because of “low pay, poor uniforms, antiquated weapons, insufficient housing, extended absences from families, and the overall unattractiveness of the Spanish military” and settlement. Bearing the brunt of what awaited on the frontier were mestizos/as and mullatos/as who served in the place of these lighter-complexioned colonists usually identified as espanoles and criollos (i.e., persons of near-Spanish descent born in the Americas). As a result, multiracial settlements from San Antonio to Los Angeles had large black populations ranging from 20 to 55 percent.

Moreover, because of the scarcity of Spanish-speaking women on the frontier, racial intermingling with Native American women and smaller numbers of African women was a wide-spread practice, which populated the newly conquered region with a new race of people identified as Latin American.

The fluid nature of the Castas did allow for a few persons of African descent to attain a socioeconomically elevated status more frequently on the Colonial Spanish frontier than in the United States at the end of the eighteenth century. Mulatto Pedro Huizar, for example, was able to become a Don (Spanish nobleman) at Mission San Jose and thus change his status to espanol in 1793. Huizar was born and raised at Aguascalientes, Mexico, acquiring many skills in the arts and building trades. Around 1778, he journeyed north, first to San Antonio de Bexar, and finally, el Pueblo de San Jose, where he worked as a sculptor, mission carpenter, and surveyor. As Huizar’s changed racial status shows, racial lines became so blurred through biological and occupational miscegenation that they became useless to Spanish census takers and other Iberian officials by 1800.

The Castas was officially dismantled by the 1830s, following the wars of independence raging throughout Latin America in the 1810s-1820s.

Sources:
R. Douglas Cope, The Limits of Racial Domination: Plebeian Society in Colonial Mexico City, 1660-1720 (Madison, WI: University of Wisconsin Press, 1994); Lawrence B. De Graaf, Kevin Mulroy, and Quintard Taylor (et al.), Seeking El Dorado: African Americans in California (Seattle: University of Washington Press, 2001); Ilona Katzew, Casta Painting: Images of Race in Eighteenth-Century Mexico (New Haven: Yale University Press, 2004); Douglas Monroy, Thrown Among Strangers: The Making of Mexican Culture in Frontier California (Berkeley: University of California Press, 1990); Leslie B. Rout, The African Experience in Spanish America: 1502 to the Present Day (New York: Cambridge University Press, 1976); Quintard Taylor, In Search of the Racial Frontier: African Americans in the West, 1528-1990 (New York: W.W. Norton, 1998).

Ruffin II, Herbert G.
Syracuse University

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MEXICO REVIEW: FINANCIAL STABILITY BOARD

October 1, 2010 at 2:28 pm | Posted in Economics, Financial, Latin America, Research | Leave a comment

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The Financial Stability Board (FSB)

FSB completes peer review of Mexico

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 9/27/10

The Financial Stability Board (FSB) published today the report on the peer review of Mexico. This is the first country peer review by the FSB and follows the publication in March 2010 of the FSB’s first thematic peer review, which examined compensation practices across the FSB’s member jurisdictions.

Country peer reviews focus on the implementation and effectiveness in individual FSB member jurisdictions of financial sector standards and policies agreed within the FSB, notably through systematic and timely follow-up to relevant recommendations from the IMF-World Bank Financial Sector Assessment Program (FSAP). The report presents the findings of the peer review, including the key elements of the discussion in the FSB Standing Committee on Standards Implementation.

Mexico has made impressive progress in recent years in upgrading its financial regulatory and supervisory framework to bring it further in line with international standards and good practices. Due to this enhanced framework and the strength of the financial system coming into the crisis, Mexico weathered the recent global financial crisis relatively well.

FSB members reviewed the actions taken by the Mexican authorities in response to the 2006 FSAP recommendations. The crisis led to a broad rethinking of some of the key ingredients of financial regulation and resulted in new approaches to address the related challenges, such as the adoption of a system-wide, macroprudential approach to financial oversight and of additional steps to address the challenge of deepening financial markets.

Going forward, a number of issues highlighted by the FSAP deserve further consideration by the Mexican authorities. These include enhancing the credibility and financial capacity of the deposit insurance agency by dealing with the “legacy” debt associated with the Tequila Crisis; further strengthening the supervisory structure and powers; and rethinking the future role of development banks in the mortgage market.

In addition to Mexico, the peer reviews of Italy and Spain are being undertaken in 2010. In keeping with the FSB’s commitment to lead by example in demonstrating adherence to standards, these peer review reports will be published once they are approved by the FSB Plenary in early 2011.

Notes to editors

The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. It brings together national authorities responsible for financial stability in significant international financial centres, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.

The peer review of Mexico was prepared by a team of experts drawn from FSB member institutions and led by Michael Callaghan, Executive Director, Macroeconomic Group, at the Australian Treasury. The review benefited from extensive dialogue with the Mexican financial authorities during the drafting of the report and from the discussion within the FSB Standing Committee on Standards Implementation.

The FSB is chaired by Mario Draghi, Governor of the Bank of Italy. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

For further information on the FSB, visit the FSB website, www.financialstabilityboard.org.

The Financial Stability Board (FSB)

FSB completes peer review of Mexico

www.financialstabilityboard.org

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 9/27/10

Notes to editors

The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies. It brings together national authorities responsible for financial stability in significant international financial centres, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.

The peer review of Mexico was prepared by a team of experts drawn from FSB member institutions and led by Michael Callaghan, Executive Director, Macroeconomic Group, at the Australian Treasury. The review benefited from extensive dialogue with the Mexican financial authorities during the drafting of the report and from the discussion within the FSB Standing Committee on Standards Implementation.

The FSB is chaired by Mario Draghi, Governor of the Bank of Italy. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

For further information on the FSB, visit the FSB website, www.financialstabilityboard.org.

Bank for International Settlement (BIS).

The Financial Stability Board (FSB)

FSB completes peer review of Mexico

www.financialstabilityboard.org

Press, Service (press@bis.org)

Publications, Service (Publications@bis.org)

Mon 9/27/10

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FUNDFORUM LATIN AMERICA BRAZIL SUMMIT: OCTOBER 19 2010 SAO PAULO BRAZIL

September 23, 2010 at 6:27 pm | Posted in Brazil, Economics, Financial, Globalization, Latin America, Research | Leave a comment

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FundForum LatAm 2010 – Agenda Announced

60+ Speakers New Networking Features

Brazil Summit: 19th October 2010

* Main Conference: 20-21 October 2010

Blue Tree Morumbi Hotel Sao Paulo Brazil

GlobalCustodian.com NewsMail (admin@globalcustodian.com)

GlobalCust odian.com NewsMail

Thu 9/23/10

Announcing the 2010 Programme
With Over 60+ CEOs, CIOS, Investors & Other Industry Experts joining the Speaker Line-Up.

Dear Reader

FundForum Latin America will provide you with a deeper understanding of this diverse region, the chance to learn from the leading regional asset management experts, & meet some of the key institutional and retail fund selectors for the most comprehensive conference experience yet.

Download the Speaker Line-Up Online

5 Reasons Why FundForum Is The ‘Must Attend’ Investment Management Event

1. A Great Opportunity To Meet Experts From Across Latin America Including:
Carlos Massaru Takahashi, acting CEO, BB DVTM MANAGEMENT
Juan Luis Rivera, Partner, Moneda Asset Management

2. Meet With Key Institutional And Retail Fund Selectors Including:
Ernesto Leme, CEO, CLARITAS WEALTH MANAGEMENT
Sílvio Renato Rangel Silveira, CEO, FIBRA

3. Hear Cutting-Edge Data From Some Of The Leading Regional Economists:
Here are some of the topics and experts you can look forward to at FundForum Latin America:
Brazil – A Macro View
World Cup, Olympic Games, Elections, Interest Rates, Inflation Or The Risk Of Potential Overheating
Ana Cristina Gonçalves da Costa Boicenco, Chief Economist, BRAM – Bradesco Asset Management

Close-Up On Brazil
Is Isolation A Long-Term Solution And How Should Brazil Go About Aligning Itself With The Rest Of The World?
Andre Loes, Cheif Economist Brazil, HSBC

External Restrictions To The Growth Of The Brazilian Economy:
Examining The Effects Of The European Crisis And The Chronic Insufficiency Of Domestic Savings
Marcelo Kfoury, Chief Economist Brazil, CITI

4. Benefit From More Structured Networking Than Ever Before:
Meeting the right people is the number one PRIORITY at FundForum Latin American and, with this in mind, we have injected special formats into the agenda to ensure you come face to face with as many of our delegates as possible. Here are a few examples of how:

1. My FundForum Latin America – Allowing you to get in touch with other delegates up to 2 weeks prior to the event. Browse the attendee list, communicate and set up meetings the key people for you and your business with our online networking tool

2. Networking Roundtables – Whether you are sharing a lunch table, discussing a key theme or having a drink at the end of the day, these networking tables are an ideal way of putting your burning questions to the leading speakers of the day in an informal and relaxed environment

3. Speed Networking – Meet a maximum number of peers and clients in the shortest time. With only 2 minutes to introduce yourself and exchange business cards, this is “no-nonsense” networking. Once you have finished, you can file through your contacts in your own time.

5. Back By Popular Demand – A New And Improved Brazil Summit
Following last year’s success, we have re-worked the formula to ensure you come away with a greater and more in-depth understanding of the largest market in the region. Don’t miss the opportunity to hear from some of the most respected Brazilian experts including:

1. Paulo R. da Veiga C. Monteiro, Managing Partner, Mercatto Gestão de Recursos

2. João Medeiros, Director, Itaú Gestão Global de Patrimônio (IGPP)

3. Mauricio Levi, Managing Partner,FAMA INVESTIMENTOS

4. Fabio Dell’Acqua, Managing Partner, CONSTALLATIION INVESTIMENTOS

5. Henry Gonzalez, Managing Partner, FRAM CAPITAL

6. Reinaldo Holanda de Lacerda, Head of Product, Votorantim Asset ManagemenT

View the Programme & Speaker Line-Up online.

Looking forward to meeting you in Sao Paulo

Kind regards

Sarah Heery Conference Director

FUNDFORUM LATIN AMERICA

Call: +44 (0) 20 7017 7200.

Email: info@icbi.co.uk. Fax: +44 (0) 20 7017 7807.

Web: http://www.icbi-events.com/KN2246GLCEM

FundForum LatAm 2010 – Agenda Announced

60+ Speakers New Networking Features
Brazil Summit: 19th October 2010

* Main Conference: 20-21 October 2010

Blue Tree Morumbi Hotel Sao Paulo Brazil

GlobalCustodian.com NewsMail (admin@globalcustodian.com)

GlobalCust odian.com NewsMail

Thu 9/23/10

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LATIN AMERICAN EXPORTS

September 2, 2010 at 10:40 pm | Posted in Economics, Financial, Latin America, Research | Leave a comment

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LATIN AMERICAN CARIBBEAN EXPORTS TO JUMP 21

PER CENT THIS YEAR FINDS UN STUDY

New York Sep 2 2010

on behalf of UNNews (UNNews@un.org)

LATIN AMERICAN CARIBBEAN EXPORTS TO JUMP 21 PER

CENT THIS YEAR FINDS UN STUDY

Thu 9/02/10

A new United Nations study says that exports from Latin America and the Caribbean will grow by 21.4 per cent this year, owing mainly to purchases from Asia – particularly China – and the normalization of United States demand.

According to the study, “Latin America and the Caribbean in the World Economy 2009-2010: A crisis generated in the centre and a recovery driven by the emerging economies,” the expected rise in 2010 follows a 22.6 per cent decline in 2009, making the increase even more pronounced.  The increase is driven mainly by South American sales of prime materials.

Produced by the UN Economic Commission for Latin America and the Caribbean (http://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/1/40711/P40711.xml&xsl=/prensa/tpl-i/p6f.xsl&base=/tpl-i/top-bottom.xslECLAC), the report indicates, for example, that regional exports to China rose from -2.2 per cent in the first semester of 2009 to 44.8 per cent during the same period this year. However, there are significant differences within the region.

Growth has been much greater in countries that export natural resources, such as agricultural, livestock and mining products – namely, South American nations, the study shows. It has been slower in countries that import basic commodities and depend on tourism and remittances, such as the Central American and the Caribbean economies.

The differences between subregions are also significant.

According to ECLAC estimates, exports from Mercosur countries (South America’s “Southern Common Market”) are expected to increase 23.4 per cent this year and those from Andean nations by 29.5 per cent.

By contrast, sales from the Central American Common Market will expand only 10.8 per cent. Exports from Mexico, for example, are expected to rise by 16 per cent, and from Panama 10.1 per cent, while sales from Chile should see growth of 32.6 per cent.

The most notable upswing from the worst period of the crisis in 2009 is expected in the Caribbean Community (CARICOM), whose exports are estimated to leap from -43.6 per cent in 2009 to 23.7 per cent in 2010.

The report also examines trade developments in the region over the past decade, concluding that export growth during those ten years was slower than in the 1990s and lower than in other developing regions, both in value and volume. However, the region took two different routes during that time: South America doubled export growth, while in Mexico and Central America it dropped by over 50 per cent.

This disparity is largely due to the fact that the exports that most increased were natural resources from South America, at the expense of manufactured products and services with varying degrees of technological content. According to the report, the subregion has reverted to an export structure based on prime materials similar to that of 20 years ago.

While in 1999 natural resources made up 26.7 per cent of total exports from the region, in 2009 they composed 38.8 per cent of the total.

The difference in the growth rates of natural resource exports and manufactured goods realigned the relative weight of Mexico’s exports, on the one hand, and sales from South America, on the other.

The participation of Mexico in the region’s total exports fell from 40 per cent in 2000 to 30 per cent in 2009, while Brazil increased its participation from 13 per cent to nearly 20 per cent during the same period. Argentina, Chile, Colombia and Peru also expanded their participation in total exports based on the sale of natural resources.

The region has been unable to improve the quality of its international insertion, and the expansion of natural resource-related sectors does not seem to have contributed sufficiently to the creation of new technological capacities, states the report.

“The diversification of exports, a strong boost to competitiveness and innovation, and greater regional cooperation will allow Latin America and the Caribbean to improve the quality of its insertion in the global economy, close productivity gaps, and capitalize the opportunities of international trade in order to grow with more equality,” said ECLAC Executive Secretary Alicia Bárcena during the launching of the report at the Commission’s headquarters in Santiago, Chile.

Sep 2 2010

For more details go to UN News Centre at http://www.un.org/news

“Latin America and the Caribbean in the World Economy 2009-2010: A crisis generated in the centre and a recovery driven by the emerging economies”

LATIN AMERICAN CARIBBEAN EXPORTS TO JUMP 21 PERCENT

THIS YEAR FINDS UN STUDY

(http://www.eclac.org/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/1/40711/P40711.xml&xsl=/prensa/tpl-i/p6f.xsl&base=/tpl-i/top-bottom.xslECLAC)

New York Sep 2 2010

on behalf of UNNews(UNNews@un.org)

LATIN AMERICAN CARIBBEAN EXPORTS TO JUMP 21 PER CENT

THIS YEAR FINDS UN STUDY

UNNews@un.org

UN News Centre

UN News Centre at http://www.un.org/news

Thu 9/02/10

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PENSION SYSTEM REFORM: CHILE’S JOSE PINERA

September 1, 2010 at 1:27 am | Posted in Economics, Financial, Latin America, Research | Leave a comment

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José Piñera

José Piñera Born October 6, 1948 (1948-10-06) (age 62)

Santiago, Chile Residence Santiago, Chile

José Piñera Echenique is the architect of Chile‘s private pension system based on personal retirement accounts.

Piñera has been called “the world’s foremost advocate of privatizing public pension systems”[1] as well as “the Pension Reform Pied Piper” (by the Wall Street Journal).[2] He was Secretary of Labor and Social Security, and Secretary of Mining, in the cabinet of General Pinochet. He is now Distinguished Senior Fellow at the Cato Institute, a libertarian think tank based in Washington, President of the International Center for Pension Reform based in Santiago, Senior Fellow at the Italian think tank Istituto Bruno Leoni, and member of the Advisory Board of the Vienna-based Educational Initiative for Central and Eastern Europe. He has a Master and a Ph.D. in Economics from Harvard University.

Early life

José Piñera is the son of José Piñera Carvallo, Chile‘s Ambassador to the United Nations during the government of President Eduardo Frei Montalva (1964-1970). His uncle Archbishop Bernardino Piñera was twice elected President of Chile‘s Council of Bishops. He has three younger brothers: Sebastián Piñera, a businessman-politician and since January 17, 2010, President of Chile; Pablo Piñera, a former member of the Board of the Central Bank; and Miguel Piñera, a musician. He also has two sisters, Guadalupe and Magdalena. The Piñera family comes from Asturias, Spain.

Piñera graduated in 1970 as an economist from the Universidad Católica de Chile, at that time closely associated with the Department of Economics of the University of Chicago. In this same year, 1970, he began graduate studies at Harvard University. In 1972 he received his M.A. and in 1974 his Ph.D. in economics. He was a Teaching Fellow at Harvard and an Assistant Professor at Boston University. Piñera returned to Chile in 1975 as a professor of the Catholic University of Chile. He has written eight books and numerous essays and articles. He was awarded an honorary degree at Universidad Francisco Marroquin.

Government service

Overall review

After promoting a plan of free market reforms that he considered could double Chile’s annual rate of growth to 7%, he became, first, Secretary of Labor and Social Security (1978–1980), and then, Secretary of Mining (1980–1981), in the cabinet of General Augusto Pinochet. As such, he was responsible for four structural reforms: the creation of a retirement system based on private personal accounts (the AFP system), the opening of the private health insurance system (the ISAPRE system), the redesign of the labor code changing the terms of trade union elections, and the constitutional law on mining. José Piñera entered the cabinet in December 1978 when Chile faced two serious external threats: a possible war with Argentina over the disputed Beagle Islands and a trade boycott by the American AFL-CIO trade union. Piñera quickly announced that Chile would soon promulgate a new trade union law reestablishing labor democracy in Chile (suspended since the coup d’état, September 11, 1973) and a new collective bargaining law. At the same time, the Vatican offered mediation over the Beagle Islands.

Labor Reform

Piñera followed up on June 29, 1979, announcing a package of four related laws that transformed trade union legislation in Chile:

1. D.L. 2.756 reinstituted free trade unions, requiring secret votes to elect union officials and allowing free union affiliation within a company;

2. D.L. 2.757 regulated the creation and operation of trade and professional organisations;

3. D.L. 2.758 created a new decentralized collective bargaining process, whose main pillars were:

1. bargaining takes place between the trade union and the employer at the company level, rather than the traditional industry or national level;

2. the right to strike is defined as one of refusal to work without being fired, but not necessarily as one entailing the forced closing of productive activities;

3. allowed employers to impose a lockout when some but not all unions are on strike;

4. prohibited any government intervention in the process;

5. instituted a mechanism of “pendulum arbitration” (also known as final offer) in public services, where disagreement led not to strikes but to compulsory arbitration by private sector arbiters, who were mandated by law to choose either the last company offer or the last trade union demand, but could not split the difference.

4. D.L. 2.759 solved specific labor problems and strengthened the anti-monopoly law.

Social Security Reform

On November 4, 1980, Piñera introduced the Social Security Reform (D.L 3.500 and D.L 3.501), that allowed workers to opt out of the government-run pension system and instead put the former payroll tax (10% of wages) in a privately managed Personal Retirement Account (PRA). New workers were automatically enrolled in the new system. These measures resulted in a privatization of Chile‘s social security system. This same Reform introduced two important changes to the health system: a) it fully privatized the disability insurance system, which became an integral part of the so-called “AFP system” (the AFPs are the private companies that manage the PRAs on workers’ behalf); and, b) it allowed workers to opt out from the government health insurance system with all their mandatory contribution (another 7% of wages), as long as they were willing and able to buy with that money a minimum health insurance plan in what became the “ISAPRE system” (ISAPREs are private companies that offer diverse health insurance plans).

The above mentioned reform had a major impact on Chile‘s economy and society. By February 2009, 8 million individuals had a PRA. Because of movements in and out of the labor force, this number cannot be directly related to the current labor force of 7 million, out of a working-age population of 12.6 million. As regards ISAPREs, they counted for 1.2 million contributors in December 2006, who with their dependants provided health coverage to 2.7 million persons, representing about one-sixth of the total Chilean population of 16.5 million at that time. The proportion of persons covered by ISAPREs has been reducing since the mid-1990s, when it peaked at just over 25% of the population.

The PRAs annual average rate of return since inception in May 1981 has been 8.9 % a year, above inflation. The resources accumulated in the workers’ PRAs amount to $80 billion, or approximately 70% of Chile‘s GNP. According to William Lewis, total government expenditures in Chile as a percentage of GDP declined from 34.3% in 1984 to 21.9% in 1990, and of that 12.4 points decline, social security and welfare changes accounted for half.[3]

Economist Paul Craig Roberts, who is known as the “Father of Reaganomics“, has noted, that “Chile was the first country in the world to privatize Social Security. José Piñera played the key role. Privatizing the pension system would have been enough to earn José Piñera his place in history, but he also oversaw the privatization of health care”.[4]

Some analysts and journalists have criticized the Chilean pension system, pointing out, for example, that it did not require the self-employed to contribute or arguing that it imposed excessive administrative costs while providing inadequate benefits for low-income workers.[5] From a different angle, a paper published by the Institute of Economic Affairs showed that the Chilean model had indeed some shortcomings. But surprisingly to some, it argued that these were a result of overregulation, not “free market fundamentalism”. [6]

A report submitted in 2006 by a bipartisan, government-appointed, Commission[7] concluded that the system was working better than expected for the employed workers, that it was now technically possible and socially advisable to make the capitalisation system also compulsory for the self-employed, and that the fiscal savings arising from the transition process allowed for a strengthening and extension of the already existing safety net (consisting of a “pension asistencial” and a “pension minima”, that will be combined into a “pensíon basica”).

Mining Reform

On December 1, 1981, José Piñera obtained approval for the Constitutional Mining Law. The law was ratified by a 7-0 vote in the Constitutional Court. The law created the legal framework supportive of the subsequent privatisation of large state-owned companies, notably in the energy and telecommunications sectors. In the 1990s, the concession system introduced by the Mining Law was extended into the infrastructure sector – highways, ports and airports – which had traditionally been part of the so-called public works carried out by the State.

Transition to democracy

It was reported that on April 1981 Piñera confronted General Pinochet in a cabinet meeting to prevent the leading trade union leader, Manuel Bustos, from being exiled. As a result, the order was rescinded[8]. A year after Piñera resigned his Ministry position in December 1981, Manuel Bustos was exiled to Rio de Janeiro.

On December 2, 1981, the day after approval of the Mining Law, Piñera resigned in order to restart his opinion magazine Economia y Sociedad, which was dedicated to fight for the transition to a democratic system and the consolidation of the free-market economy.[9] In those years, still under the military regime, Piñera wrote seventy articles [2] in the press in defense of human rights and democracy.[10]

In March 1990, after Chile‘s transition to democracy, he founded the “Proyecto Chile 2010”. He described the goal as making Chile a developed country at its bicentenary. In 1992, in an attempt to prove that the poor could understand free market solutions to their problems, he ran and was elected city councilman with the highest vote for one of Santiago‘s poorest and Leftist neighborhoods, Conchalí.[11] In 1993 he ran a testimonial campaign as an independent candidate for President of Chile, finishing with 6,18%.

In December 2009, José Piñera shared a panel with the Polish trade union leader Lech Walesa in an International Conference in Zagreb dedicated to the theme of the prospects of democracy in Europe 20 years after the fall of the Berlin Wall. The conference was organized by Damian von Stauffenberg, member of the famed aristocratic family that opposed Hitler, and president of the Educational Initiative for Central and Eastern Europe (EICEE). Diario Financiero of Chile published this note [3] and Ian Vasquez, Director of Cato’s Institute for Global Liberty, wrote [4] that both José Piñera and Lech Walesa “have done so much to increase human freedom: Walesa for leading a workers’ movement that played a key role in the collapse of Soviet communism; and José Piñera for leading a revolution in private pensions that is turning workers into capitalists around the world.”

Promoter of privatized pensions

In 1994, Piñera founded “The International Center for Pension Reform” in order to promote the Chilean model throughout the world. In 1995, he became also the co-chair of the United States Cato Institute‘s Project on Social Security Choice.[12] Since then he is said to have visited around 80 countries, 28 of which have implemented personal retirement accounts following the “Piñera model”. Unable to finance the transition toward a fully funded system, most of them combined it with their former state-run defined-benefit pension scheme.

The President of the “International Federation of Pension Fund Managers” has commented: “Towards the end of the year 2006, 28 countries (11 in Latin America, 12 in Central and Eastern Europe and five in other parts of the world) had already introduced mandated pension programs based on individual capitalization in their respective social security systems. A total of 100 million workers now have pension savings accounts in this type of program and have built up funds of over US$ 255 billions. Ukraine and Romania have already enacted reforms – to be implemented between 2008 and 2009 which include the introduction of mandated capitalization programs in their respective social security systems.”

In June 2007, the South African press published an article titled “Applying passion to break poverty” reporting on Piñera’s conferences in Cape Town, Johannesburg and Durban.[13]

In May 2008, Richard Rahn, Chairman of the Institute for Global Economic Growth, wrote in The Washington Times: “If you were asked to name one person who has enabled more people to gain wealth and security than any other person on the globe, who would you name? In 1881, here in Berlin, Otto von Bismarck started the world’s first modern pay-as-you-go social security system which served as the model for the U.S. Social Security system and that of many other countries, including setting the retirement age at 65. No, Bismarck is not the answer to the opening question. The answer is Jose Pinera.”[14]

Awards

· “John S. Bickley Gold Medal” (1999), International Insurance Society

· “Hall of Fame” (2000), International Insurance Society

· “Champion of Liberty” (2003), Goldwater Institute (libertarian think tank)

· Liberty Award” (2005), Liberalni Institut, Prague

· “Golden Umbrella Award” (2007), Stockholm Network (London based network of think tanks)

· “Adam Smith Award” (2009), Association of Private Enterprise Education

References

1. “Against the Dead Hand. The uncertain struggle for global capitalism” (John Wiley & Sons, 2002), by Brink Lindsey (vice president of Cato Institute, a libertarian think tank), p. 224.

2. “Pension Reform Pied Piper Loves Private Accounts” [1] by Matt Moffett, The Wall Street Journal, March 3, 2005.

3. “The Power of Productivity” (University of Chicago Press, 2004), by William W. Lewis.

4. “The Capitalist Revolution in Latin America” (Oxford University Press, 1997) by Paul Craig Roberts and Karen LaFollete Araujo, p. 32.

5. “Chile rethinks its privatized pension system”, by Larry Rohter, New York Times, January 10, 2006.

6. “From Bismarck to Friedman

7. http://www.consejoreformaprevisional.cl/view/informe.asp

8. “La Historia Oculta del Regimen Militar” (La Epoca, 1988), por Ascanio Cavallo, Manuel Salazar y Oscar Sepúlveda, p. 275.

9. “Pinochet. La Biografía” (El Mercurio-Aguilar, 2002) by Gonzalo Vial Correa, p. 433.

10. “Camino Nuevo” (Proyecto Chile 2010, 1993), Appendix by Soames Floweree titled “What José Piñera said about human rights and democracy during the military regime”.

11. http://elecciones.gov.cl/SitioHistorico/paginas/1992/municipales/comunas/candidatos/total/4105.htm

12. “The Triumph of Liberty” (The Free Press, 2000), by Jim Powell, p.453.

13. http://www.fanews.co.za/category.aspx?CategoryID=9&SubCategoryID=1175&ItemID=60d07f02-cfc9-4d4e-b366-25fe9bb6c103

14. http://www.washingtontimes.com/news/2008/may/15/a-working-model

The International Center for Pension Reform, founded by José Piñera

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MEXICAN ECONOMY: “MEXICO MACRO DAILY NO. 831”

June 8, 2010 at 6:54 pm | Posted in Economics, Financial, Latin America, Oil & Gas, Research | Leave a comment

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Mexico Macro Daily No. 831

Direccion Estudios Economicos (diresteco@banamex.com)

Tue 6/08/10

What We Think

Arturo Vieyra

+52-55-2262-9555

Joel Virgen

+52-55-2262-2974

Consensus Again Pushes Back Banxico’s First Hike

Once more, the consensus has pushed back its expectations for Banxico’s first hike while a process of easing short-term inflation expectations continued. It is also important to bear in mind that so far this year the expectation of the beginning of Banxico’s hiking cycle has been pushed back to March 2011 from July 2010 (in our survey of January 12, 2010) and headline inflation for 2010 has been revised downward to 4.9% from its peak in 5.25% in the second-half of March. The backdrop of these forecast revisions has been economic slackness, Banxico’s dovish tone, the absence of generalized second round effects associated with fiscal and public prices measures, MXN strength against the USD, and recent downside surprises in observed inflation.

The consensus has pushed back its expectations of the beginning of Banxico’s hiking cycle to March 2011 from January 2011. The consensus has made a moderate downward revision in the magnitude of the hiking cycle. This is the third time in a row that the consensus has pushed back Banxico’s first hike (in our survey of April 19, 2010, the consensus was expecting October 2010). Meanwhile, the consensus has made a moderate downward revision in the hiking cycle magnitude, to 138bp from 150bp in our previous survey. Regarding USD/MXN year-end prospects, we revised them moderately downward to 12.40 from 12.47 and to 12.55 from 12.65 for 2010 and 2011, respectively.

The consensus in our biweekly Banamex Survey of Expectations for Inflation and Monetary Policy anticipates lower annual inflation in May: 3.97% versus 4.27% in April. Based on the negative inflation results published in the first half of May (an observed -0.54% versus an expected -0.28%), the analysts consulted in our survey anticipate monthly headline inflation of -0.58% for the whole month. This means that annual inflation for May (3.97% versus 4.27% in April) will again be below the central bank’s forecast range for the second quarter (4.5%-5.0%).

Inflation expectations for year-end 2010 were adjusted down slightly, but remained within Banxico’s forecast range. For 2011 no changes occurred and they remain high. The inflation forecast for year-end 2010 fell slightly, to 4.92% from 5.0% in the previous survey. In contrast, the adjustment to the core component put it at 4.36%, slightly above the previous survey’s 4.34%. The forecast for year-end 2011 remained unchanged for the headline rate – at 3.8%, it is well above Banxico’s expectation (2.75-3.25%).

GDP growth expectations for 2010 and 2011 show revisions. In the case of the former, it fell slightly to 4.4% from 4.5% in the previous survey, while for 2011 it rose to 3.65% from 3.5%.

Highlights

v Market Color: Relative to the previous trading session, on June 8 the TIIE curve decreased especially on the middle and on the long end of the curve. Our reading of market expectations is that the tightening cycle will start at the beginning of 2011. (p. 2)

v Banxico’s speech weighs on rate expectations: Consensus Again Pushes Back Banxico’s First Hike. In our Banamex Survey Expectations, the consensus has pushed back its expectations for Banxico’s first hike as a process of easing short-term inflation expectations continued. (p. 4)

v Gasoline Price: Surprisingly, the SHCP and PEMEX decided to halt the increase in gasoline and diesel prices on Saturday; unfortunately, they did not clarify whether this is a pause in the increases this year, or a suspension of these for the rest of 2010. (p.9)

News in Brief

Arturo Vieyra

+52-55-2262-9555

Surprisingly, the SHCP and PEMEX decided not to raise the price of gasoline and diesel on Saturday. The price of low-octane gasoline had been increasing throughout the year by 8 centavos a month and the price of high-octane gasoline, by a monthly 4 centavos.

v Neutral: Unfortunately, the SHCP does not state whether this is merely a pause in the monthly increases or is a suspension of the increases for the rest of 2010. The latter, according to our estimates, would imply that inflation could be about 20 bp lower (15 bp because of direct effects and 5 bp for indirect effects). Also, domestic prices would be slightly above international prices (considering the futures market forecast).

Mexico Macro Daily No. 831

Direccion Estudios Economicos (diresteco@banamex.com)

Tue 6/08/10

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LATIN AMERICAN EXPORTS IN 2009

January 8, 2010 at 12:46 pm | Posted in Economics, Financial, Globalization, History, Latin America, Research | Leave a comment

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LATIN AMERICAN AND CARIBBEAN

EXPORTS DROP 24 PER CENT IN

2009 UN REPORTS

Thu Jan 7 2010

UNNews UNNews@un.org

New York Jan 7 2010

The value of total exports from Latin America and the Caribbean in 2009 fell 24 per cent compared to the previous year due to the global economic crisis, according to a new United Nations study released today.

The value of imports in the region also declined by 25 per cent, according to “International Trade in Latin America and the Caribbean 2009: Crisis and Recovery,” published by the UN Economic and Social Commission for Latin America and the Caribbean (http://www.eclac.cl/cgi-bin/getProd.asp?xml=/prensa/noticias/comunicados/0/38280/P38280.xml&xsl=/prensa/tpl-i/p6f.xsl&base=/tpl-i/top-bottom.xslECLAC).

The 24 per cent drop in the value of the region’s exports represents a combined 15 per cent decline in value and 9 per cent decrease in volume.

“This simultaneous decrease in price and volume is unprecedented in recent history. The last similar situation took place in 1937,” states the report, which updates a study published last August.

It also stated that although both exports and imports declined significantly, the drop is not as bad as during the first part of 2009, when they declined by 31 per cent and 29 per cent, respectively.

This implies a better outlook for 2010, according to a news release issued by ECLAC.

The report attributed the “economic recovery” in the last quarter of 2009 to, among others, the partial rise in the price of several commodities, such as copper, zinc, oil, wheat and soya, and the strong demand from China since the second quarter of last year.

Significant differences were also cited between countries and subregions. While exports diminished 42 per cent in Venezuela and 32 per cent in Andean countries as a whole, they decreased 29 per cent in the Caribbean, 22 per cent in Mexico and Chile, and only 6 per cent in Central America (excluding Mexico).

Mining and oil exports fared the worst, according to the study, with an average decline of 42.3 per cent from January to September 2009. Meanwhile, manufactured products dropped 25.4 per cent and agricultural and livestock exports decreased 18.4 per cent.

Last month ECLAC predicted that Latin America and the Caribbean will bounce back faster than expected from the global financial crisis, with growth projected at over 4 per cent in 2010. In its annual report, the Commission said it expects positive growth rates for most countries in the region, but notes there are still doubts about whether the recovery will be sustainable, since external scenarios remain uncertain and could impact the area.

Jan 7 2010

For more details go to UN News Centre at http://www.un.org/news

LATIN AMERICAN AND CARIBBEAN EXPORTS

DROP 24 PER CENT IN 2009 UN REPORTS

Thu Jan 7 2010

UNNews UNNews@un.org

New York Jan 7 2010

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ARGENTINA STOCK MARKET INDEXES

July 16, 2009 at 5:19 am | Posted in Development, Economics, Financial, Latin America, Research | Leave a comment

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MERVAL INDEX

Buenos Aires Stock Exchange

CEDEARs (Argentine Depositary Receipts)

The Merval Index is the market value of an equity portfolio, selected according to market share, number of transactions, and quotation price on the Buenos Aires Stock Exchange. The date and base value are June 30, 1986 equal to $0.01.

The Merval Index is reckoned on a continuous basis during any trading day and it is screened across the Market Data System terminals. Listed corporations and weighted prices are updated quarterly, consistently with market share for the last three months.

STOCK MARKET INDEXES

MERVAL ARGENTINA INDEX

  1. Introduction
  2. Relation to Merval Index
  3. Updating of the theoretical portfolio
  4. Criterion applied for the weighting
  5. Situations in which the composition may be altered
  6. Situations in which the weighting may be altered
  7. Value of the Index
  8. Annexes
  1. INTRODUCTION

Mercado de Valores de Bs. As. S.A. has developed a new index that is aimed at reflecting the behavior of Argentine companies participating in the stock market, thus recovering the historical nature of the existing MERVAL Index.

The modifications in the index are intended to transform it into a benchmark of local companies’ transactions while keeping the basic structure of the existing MERVAL index. The evolution of MERVAL index will serve as a common basis up to December 30, 1999, a period that is both previous to the advent of foreign companies into the local market and to the increase of the Cedears’ market share in the total volume traded.

In this sense, the new index is based on the trades made on the six-month period previous to each updating. The trades of foreign companies and Cedears are excluded. The criterion applied for the selection is the decreasing share of participation in the cash segment of the Concurrent Market and excludes all the companies that have not been traded in a number of trading-sessions considered representative.

  1. RELATION TO MERVAL INDEX

The analysis of historical data shows that up to October 1999, no company had a share in the total traded volume above 20%.

Based on data considered for April, July and October 1999, all the companies included in the Merval Index had traded in at least 90% of the trading-sessions of the six month period previous to each updating.

This allows setting the effective date for the new MERVAL ARGENTINA Index on January 1st, 2000, the base being the MERVAL Index price at 12/30/99, i.e. 550.47.

By updating the portfolios from that date on, in accordance with the new index methodology, the situation may be viewed as a bifurcation of MERVAL Index, as from 01/03/00, into two indexes:

  • MERVAL, the traditional index, conceived as an indicator of the profitability of stocks traded at the Buenos Aires Stock Exchange
  • MERVAL ARGENTINA, the new index, reflecting the profitability of an Argentine companies’ stocks portfolio. This portfolio, which limits each company’s share to a 20% maximum, acts as an average indicator of their behavior in the Concurrent Market.

3. UPDATING OF THE THEORETICAL PORTFOLIO

The theoretical portfolio will be updated every three months, always on a six-month basis. This is a price-weighted index with fixed quantities for the quarter, except for the situations indicated below.

At the end of each three-month period, the portfolio is considered sold and the proceeds are applied to the creation of the new theoretical portfolio.

In order to prepare the sample:

  • In the event of an ‘exchange’ or a ‘hostile takeover’ situation on the updating date (the last business day of the last month of the quarter) or any previous time, the traded volume and the number of trades of the companies involved are reassigned based on the exchange acceptance percentage.
  • Cedears and foreign companies’ stocks are excluded from the sample.

Argentine Depositary Receipts

The BCBA gives an answer to the endless challenge of global capital markets with the listing of CEDEARs (Argentine Depositary Receipts). As to these certificates, public offering is regulated by CNV Resolution 291, and stock-exchange listing is governed by BCBA Council Resolution 3/97.

Initiative’s Rationale

The free convertibility of Argentine currency and the effective foreign investment system generate significant capital inflows and outflows, as well as a growing trend toward globalizing the local capital market;

Great expectations for economic/financial stability and sustainable growth in Argentina over the next years arouse interest in world investment scenarios, which may increase if Argentina’s presence expands in the global market ;

Investing in foreign securities is legally permitted to individuals and entities residing in our country and, within certain limits, it is also allowed for pension funds, mutual funds, and other institutions;

It is advisable to foster consolidation of capital inflows and encourage their permanence within our country by offering a variety of local investment alternatives;

It is also advisable to procure broader categories of assets to be traded in the local securities market, so that Argentine investors may seize more opportunities to build diversified portfolios in the current global context by including foreign blue chips;

The Argentine Market System technology facilitates operational linkage among securities depositaries from major world markets for deposit and issuance of certificates representing securities to be traded.

Therefore, the inclusion of blue chips listed on renowned Stock Exchanges will increase the amount of securities to be traded in our market, thereby facilitating local investors access to securities traded worldwide. In turn, foreign investors will be enticed to access the Argentine market.

Thus, broker-dealers in Buenos Aires will be able to direct their activities toward global investment. The added value provided by the BCBA and the MERVAL is a “world class” market, a present-day reality which both institutions shall continue to enhance permanently because it is one of the essential aspects of their strategies under way.

CEDEARs’ Meaning

CEDEARs are depositary receipts, representing a class of shares or other securities, without CNV public offering registration in Argentina. Securities must be listed on Mercosur or other foreign markets whose regulatory authorities have signed memoranda of understanding with the CNV or, otherwise, are expressly authorized by such governmental agency.

Eligible Issuers

CEDEARs may be issued by Caja de Valores (Argentina’s CSD), commercial or investment banks, and finance companies authorized by the BCRA (Argentina’s Central Bank). In every case, CEDEAR issuers must meet a $30-million minimum capital requirement.

Eligible Depositaries

Authorized Depositaries are as follows: CEDEAR issuers, Caja de Valores (Argentina’s CSD), the Central Depositary in the country of issuance of the securities represented by CEDEARs, or a custodian bank in the country of issuance of the underlying securities with a $200-million minimum shareholders’ equity.

Deposit Rules

The Depositary shall acquire neither ownership nor use of the securities represented by CEDEARs, which are held under a regular deposit agreement. To change Depositary, a majority vote is required from CEDEAR owners, whether in a meeting assembled or individually. No advanced and general consent shall be admitted.

Sponsored CEDEAR Programs

The only eligible sponsor shall be the issuer of the securities represented by CEDEARs. In this case, the sponsor must comply with the CNV registration requirements and the currently effective system to such effect. For IPOs, only sponsored programs shall be admitted.

Unsponsored CEDEAR Programs

CEDEAR issuers must comply with disclosure requirements as to depositary receipts and issuers of securities represented by such certificates. Issuers of CEDEARs and underlying securities may or may not agree on the CEDEAR program.

CEDEAR Form

CEDEARs may be either non-negotiable registered certificates or book-entry issues. They may represent one or more securities of the same type, class, and issuer. The CNV may authorize that CEDEARs only represent fractional underlying securities.

Freely Exchangeable CEDEARs

At owner’s request, CEDEARs may be exchanged for the underlying securities freely at any time and/or at program’s expiration.

CEDEARs mut be cancelled and destroyed against delivery of underlying securities.

Underlying Securities

CEDEAR issuers must at all times maintain an equivalent amount to the underlying securities. On a case-by-case, provisional basis the CNV may authorize issuance of CEDEARs without underlying securities, insofar as prior guarantee is furnished.

Information on Sponsored CEDEARs

Issuers of underlying securities shall send financial statements consistently with effective regulations in Argentina. Information must be submitted and published in Spanish. Information on issuers shall also be published on a mandatory basis.

Information on Unsponsored CEDEARs

CEDEAR issuers shall, within ten (10) days, submit any information that issuers of underlying securities have disclosed or submitted to their regulatory authority. They shall also submit any relevant information within twenty-four (24) hours after receipt or disclosure thereof, as well as any accounting information within ten (10) days.

Information from CEDEAR Issuers

CEDEAR issuers shall also supply any relevant information on their person, as well as any data on issuers of underlying securities that may come to their knowledge, and any event that may affect them. They must also send their annual and quarterly financial statements, and disclose any material change in their own fee schedule or the Depositary’s.

CEDEAR issuers must quarterly report on the number of outstanding depositary receipts as of first day of financial year, exchanged certificates, newly-issued certificates within a CEDEAR program, and outstanding certificates at quarter-end, as well as the amount of securities represented by CEDEARs within each program.

For further details, please contact:

The BCBA Gerencia Técnica y de Emisiones.

Sarmiento 299, 2nd. floor.

1353 Buenos AiresArgentina

Tel. (54-11) 4316 – 7150 – Fax (54-11) 4316 – 7151

MERVAL INDEX

Buenos Aires Stock Exchange

CEDEARs (Argentine Depositary Receipts)

SEE:

http://www.merval.sba.com.ar/merval/default_ing.htm

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