Changing global market dynamics have led to an increasing demand for lithium. A critical field of ongoing development is battery power storage technology, which is vital to everything from mobile devices to electric vehicles. Lithium batteries are lightweight and can store energy efficiently. These batteries will be critical in the transition to green energy. Thus, the price of lithium has rocketed.

Chile possesses large quantities of lithium, with the northern Andes region holding significant deposits. In fact, the country boasts, over one-third of the world total.

One cost-effective technique for extracting the metal involves evaporating brine. Northern Chile’s Atacama Salt Flat accounts for of global output in terms of lithium extracted from brines.

The changing dynamics of Chile’s copper industry

This is not the first time Chile has been a mining powerhouse. Throughout its modern history, Chile has relied on a sizeable copper mining industry, which spurred Chile to become the middle-income economy it is today. Chile now produces nearly a quarter of the world’s copper, and the industry contributes around 10% of the country’s GDP. in the Atacama Desert is one of the world’s largest open-pit copper mines.

The National Copper of Chile (CODELCO), founded in 1976, oversaw the mining boom. CODELCO is still a state-owned copper company today.

Chile’s copper industry has witnessed a recent decline in production due to aging mines, declining ore grades and increasing production costs. Despite dominating the national economy and world supply, the copper industry does not provide a suitable environment for foreign investment.

The national lithium strategy

Lithium is now replacing copper as the most attractive investment destination in Chile.

Chile has been keen to take full advantage of its natural resources and has accordingly prepared a. The Chilean government website describes the strategy “to incorporate capital, technology, sustainability and value addition, in harmony with local communities.” At the moment, production is concentrated in the hands of limited companies, but the state is looking forward to expanding the sector.

The strategy aims to focus on public-private partnership, allowing a newly formed to guarantee a stake for the state whilst allowing private companies to contribute technological know-how and expertise.

The National Lithium Company will eventually retain control over all projects in the country, but there is plenty of space for private sector actors to work with them and reap the rewards. State copper company and state mining company will be interim state representatives while the National Lithium Company is created. Although copper remains largely controlled by the state, Santiago will allow more private competition in the lithium market.

Downstream benefits

Abundant lithium in Chile, makes it well placed to benefit from all the tech opportunities at its doorstep. The country has a solid manufacturing base that could pivot towards either battery production or electric vehicle assembly. It has incredible potential for both photovoltaic solar and wind energy, due to near-constant sunny conditions in northern Chile and plenty of elevated areas with significantly windy conditions. This means that increased battery production in-country can be immediately put to good use.

The country has an excellent educational system by regional standards and a highly innovative business environment. Chile has a strong pool of engineers and skilled workers. Chile’s number of graduates exceeds the number of job openings, resulting in a competitively priced workforce.

What happens next?

The future of the Chilean market appears bright. The country is blessed with an enormous reserve of the world’s third most in-demand metal. Lithium industries in Chile are growing rapidly as a diversification option to provide extra security for the economy. The industry will not only have robust exports but also incubate new sectors and energy supplies.

For canny investors with an eye to the future, the lithium sector in Chile is deemed to be profitable in the future. Rewards are practically guaranteed in the short to medium term. Longer-term prospects also look extremely reliable. The experience and continuing success of CODELCO indicates how the state will behave in the lithium sector. The government looks to retain control over the direction and environment of the sector while allowing private enterprises to invest, compete and profit.

[ edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

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Throughout the 20^th century, Bogota experienced a massive transformation in infrastructure, design and scale. It went from being a walkable 25-block city to more than 45,000 blocks today. In 1956, six municipalities were annexed as part of the formation of the “,” and urban sprawl contributed to Bogota’s explosive growth. 

The city continues to grow in size and scale. Today, Bogota has been ranked as one of thebest cities for in Latin America. New urban works projects over the next decade promise to increase its attractiveness for foreign investment and transform it into a modern city. This would make it suitable for both expanding a business and a company. 

The promise of better public infrastructure

Bogota is not exactly known for its great public transportation system. Some might argue that it doesn’t even have the best system in the country. Colombia’s second city Medellin, with its metro, tramway and cable cars, has a much better public transportation system. 

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Today, the capital city’s main mode of public transport is the TransMilenio, a bus-transit system that operates in most of the city. It also has Urbano, a regular bus that connects to the stops that the TransMilenio doesn’t reach, and TransmiCable, a relatively new mode of transportation, modeled after Medellin’s MetroCable, that takes passengers in and out of the southernmost parts of the city to a TransMilenio station. 

This system has many flaws. Anyone who has lived in Bogota can tell you how crowded the TransMilenio can get, how difficult it is to get to the outermost parts of the city, and how much of a hassle it is to travel to neighboring towns. These are the key issues being tackled by these new transport projects. 

The first one is the metro. It’s been talked about since the 1940s and has passed into the realm of legend. However, after many decades of political fighting over whether it should be subterranean or elevated, the metro might finally come to fruition. The first line will be elevated and will go from Bosa to Santa Fe, and the second line will connect to Suba. They’re projected to begin operating by 2028, and the new POT (Plan de Ordenamiento Territorial) made by Bogotá Mayor Claudia Lopez, envisions five lines in the next 30 years. 

Second is the RegioTram, a high-speed train system connecting neighboring towns. Until now, the only option for people who live in surrounding towns like Chía, Mosquera or Facatativá, is to get to the capital by a clunky, overcrowded bus, which means hours of commuting every day. The RegioTram hopes to eliminate that. The first tram will connect Bogota to Facatativá. 

As well as these new projects, the existing TransmiCable is also being expanded. After it was introduced in 2016 to the southern district of Ciudad Bolívar, TransmiCable has made the lives of workers who travel to the north of the city to work every day better. Now, three new lines will be added to it. The first will go to San Cristobal, the second will pass through the National Museum area and go to Monserrate, and the third will go to El Codito.   

A New ‘Green Corridor’ 

The Carrera Septima (Seventh Street) is one of the main north-south thoroughfares in the city. It stretches from the heart of La Candelaria, Bogota’s vibrant heart and its historic center, to the city’s northern city limits. In the last few years, it has transformed into something most Rolos (aka Bogotanos) call iconic. 

As we move into the north on this street we find not only headquarters for a lot of important companies and businesses in the region, but also historic living spaces. Today, the street works as a highway where cars, buses, bikes and TransMilenio buses share one space, which doesn’t help with the city’s chronic mobility problems. 

The “Green Corridor” or “Corredor Verde” project aims to reevaluate the Septima’s design, transforming it into a pedestrian-friendly green space, complete with new bike lanes, limiting the space for cars and promoting public transportation. 

There’s some debate, however, as to what form of public transportation should be used. Former mayor of Bogota and current president of Colombia, Gustavo Petro, has insisted on a Tramway system, alluding to the one that existed in the 1940s, but use the TransMilenio instead. 

Both transportation systems have pros and cons. The tramway, for instance has already in Medellin, Colombia’s second biggest city, where it works as part of the Integrated Transport System (SIT). If it works as in Medellin, a Tramway system in the Carrera Septima could revitalize transport and reduce commuting time further, but building it isn’t a guaranteed success, and would increase the of the Corredor. 

Expansion of the El Dorado International Airport

El Dorado airport is Colombia’s largest international airport, and has been ranked among the best in Latin America. It moves more than 30 million passengers a year and that number is only expected to grow, as the city attracts more foreign tourists, business travelers and migrants.

The airport is one of the reasons why Bogota is such a great place for business. Ease and comfort in air travel is a main attraction for foreign investors and business people, but it has recently started to fall behind with increasing demands from both tourists and commuters. That’s why the El Dorado Max project was launched. It aims to revitalize and expand the airport, allowing it to serve up to 60 million passengers per year. When the project is completed, it’s expected to make El Dorado one of the most advanced airports in the region, with the technology to compete with world-class airports around the globe. 

Aviation and air transport is a very important economic facilitator. In 2014, it contributed over to Latin America’s GDP. Allowing significantly more passengers into the country will increase tourism. It will also improve connectivity within the country, boost business and enable the capital region to bloom.

Infrastructure projects will have multiplier effect

Bogota forms 29.5% of Colombia’s GDP, making it the largest business hub in the country. With the recent efforts to better connect the capital city with the surrounding towns, the GDP of Bogota has reached $105 billion, and accounts for more than the GDP of three Latin American countries: Panama, the Dominican Republic and Uruguay. 

These urban renovations prove Bogota is on its way towards more development. Not only are they bound to improve quality of life for everyone, including businesspeople who are looking to relocate or expand their business, but they will lead to a better, more stable economy. 

Ease of travel, better transportation and improved public spaces will cement Bogota as the entry point to both northern South America and Central America.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

The post Reasons Bogota is Turning Into a Top Investment Destination appeared first on 51�Թ�.

Announced during the UN climate summit in Glasgow, the fixed-rate bond issued by the Inter-American Development Bank (IDB) will generate $37 million to help fund projects to increase access to clean water in Latin America. That is intended to help the region meet UN Sustainable Development  — “Ensure access to water and sanitation for all” — one of 17 interlinked goals established to promote a more sustainable future worldwide.

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According to the , around a quarter of Latin America’s population lives near the region’s 40,000 kilometers of coastline. This means that a scheme designed to raise funds to protect water sources while generating investment and opportunities in those areas stands to have a transformative impact.

While it was not made clear exactly where the funds raised are destined to go, numerous Latin American and Caribbean nations could benefit substantially from the expansion of blue bonds — of which the first one in the world was only issued in 2018. They also promise to be a significant source of funds for investors  business in Latin America or interested in entering the region.

How Did Blue Bonds Come About?

The concept of blue bonds is closely related to green bonds, a more established type of fixed-rate bond used to generate funds to promote general environmental protection.

The first green bond was issued by the World Bank in 2008. Less than 15 years later, more than $312 billion has been  via the issuance of these bonds. The concept of blue bonds was developed based on the success of the earlier scheme, and in 2018, the Seychelles became the nation to issue a sovereign blue bond. That bond offered 6.5% annual interest over a 10-year period and raised $15 million intended to help support the island nation’s blue economy.

With the tourism and fishing sectors two of the biggest employers for the Seychelles, boosting the blue economy is critical to its future prosperity. The blue economy is associated with any kind of economic activity related to and dependent upon oceans and waterways. That can mean activities dependent on the presence of healthy waters, such as fishing, as well as the likes of energy generation or other initiatives to promote sustainable and productive use of water resources.

According to a high-level issued in December 2020, the blue economy generates $2.5 trillion worldwide each year, while the total asset value of the planet’s oceans is estimated to be $24 trillion. That makes protecting the oceans a pressing issue, and one for which blue bonds represent a major tool to the international community.

Where Could Funds From Blue Bonds Be Spent?

The possibilities for how to spend funds raised through blue bonds are extensive. However, some of the following areas will be prime for investment.

Renewable Energy: The world is increasingly moving toward sustainable and renewable energy supplies, and the oceans represent a major resource for generating power via the likes of off-shore wind farms and tidal energy. 

While Chile is well-known for having  off-shore wind power capacity, the likes of Argentina, Brazil, Colombia and Mexico — with their extensive coastlines and large coastal populations — stand to benefit from the development of such technologies.

Sustainability Schemes: According to one , every $1 invested in protecting oceans yields $5 in benefits, highlighting the financial efficacy of protecting oceans and water sources. That can include the likes of protecting mangrove habitats, increasing offshore wind power production, promoting decarbonization in the shipping industry and increasing the sustainable production of ocean-sourced proteins. 

Maritime Industry: As per the Development Bank of Latin America, the region’s maritime and port industry  an estimated $55 billion in investment over the next two decades in order to significantly advance competitiveness. Much of that is needed in Brazil, Mexico and Panama.

Given that shipping accounts for an estimated 18% to 30% of global nitrogen oxide production and that approximately 70% of ship emissions occur within 400 kilometers of land, approaching this development with sustainability in mind via the promotion of decarbonization will be imperative.

Tourism: With tourism providing an estimated 16 million jobs in Latin America and the Caribbean and generating almost $350 billion per year, the sector is of high importance to the region’s economy. Eco-tourism has grown significantly over recent decades, with the likes of Costa Rica attracting millions of visitors and generating significant revenues through pioneering schemes to protect and restore the environment.

As efforts to protect the oceans are stepped up and promoted, they can be expected to generate interest among tourists, with countries such as Argentina, Brazil, Chile, Colombia, Mexico and Peru standing to benefit significantly.

How Soon Until Blue Bonds Begin to Have an Effect?

While it is still very early days, given the pace with which green bonds were adopted and the amount of funds they have generated, it can be expected that the issuance of blue bonds will begin to pick up considerably on a global scale.

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Already, there is significant interest in them in Asia, with the government of Thailand loring them as a possible tool for promoting the protection of its critical blue economy. Meanwhile, earlier this year the Asian Development Bank  its first blue bonds, raising more than $300 million in funding set to be spent on ocean-related projects in the Asia Pacific. 

That could prove to be a powerful example for Latin America, which like much of Asia is home to emerging economies that are major producers of primary goods and to which the oceans are of critical economic importance. With the ball now rolling in terms of major financial institutions issuing blue bonds, their positive impact can soon be expected to be felt in a meaningful way, which should inspire the expansion of this financial mechanism.

The future prosperity of Latin America and the Caribbean will be closely linked to preserving and effectively exploiting its water resources, as well as developing sustainable solutions to current and emerging challenges. To that end, blue bonds promise to be a major tool for generating revenues and promoting a more viable future to the region.

*[Quentin Jacque contributed to this article.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

The post How Blue Bonds Promise to Boost Latin America’s Economy appeared first on 51�Թ�.

The Pacific Alliance was born out of the 11-nation Latin American Pacific Arc Forum, which included the above four nations alongside Pacific Alliance observers, Costa Rica and Panama, as well as Ecuador, El Salvador, Guatemala, Honduras and Nicaragua. Established in 2007, the forum’s purpose was to improve its participants’ engagement with the Asia-Pacific region. All apart from Nicaragua are today among the 59 observer states the Pacific Alliance has across five continents. The organization also admitted four nations as associate members in 2017, made up of Australia, Canada, New Zealand and Singapore.   

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Underpinning the Pacific Alliance is a commitment to use integration to promote greater growth, development, competitiveness and among its members, with Article 3 of the association’s Framework Agreement committing members to the progressive promotion of free movement of goods, services, capital and people. Meanwhile, Article 8 of the agreement precludes member states from modifying or replacing existing economic and trade deals involving any alliance members, highlighting the fact that the bloc is intended as a mechanism through which great value can be drawn from those agreements rather than as a move intended to replace them.

During 15 summits since being founded, the last of which was held in December 2020 in Chile’s capital Santiago, the Pacific Alliance has acted as a tool for promoting integration among its members as well as being a vehicle for connecting them with the outside world. The alliance lists 23 areas of work, including tourism, education, finance, intellectual property and digital development, in which it aims to build industry standards and collaborate on best practices. The organization has also engaged in free trade and cooperation negotiations with a wide range of countries globally, including the four associate members.

Australia has been engaged in such negotiations since June 2019, with the government in Canberra heavily promoting the benefits of deepening ties with the four fast-growing Latin American economies. In the case of Canada, agreements have been reached on areas of cooperation and deeper integration, complementing the free trade agreements (FTAs) Canada already has in place with each of the alliance members.

New Zealand, meanwhile, remains engaged in FTA negotiations, while in December 2020, Singapore announced that it had substantially concluded negotiations for a Pacific Alliance – Singapore Free Trade Agreement (PASFTA). Just two months earlier, marking the reach into Asia that the alliance has now achieved, South Korea formally requested membership. All of this increases the diplomatic clout of Chile, Colombia, Mexico and Peru, and makes the alliance a more enticing prospect for future members, which the organization appears intent on recruiting.

The future of the Pacific Alliance appears to be broad, with numerous countries slated as potential members. Those not only include the four associate members, whose participation would provide the alliance with a truly global reach, but also the likes of Panama and Costa Rica. Meanwhile, Ecuador’s recent election of new business-friendly means the Andean nation’s potential entry into the alliance will now get a boost.

The expansion of the alliance could also see a deepening of integration in South America, with the bloc developing with the Southern Common Market (MERCOSUR), a rival economic integration comprised of Argentina, Brazil, Paraguay and Uruguay, and to which Bolivia is awaiting acceptance as a full member.

FTAs between members of each association are already in place, with ongoing between Chile and Paraguay, representing Asuncion’s first foray into bilateral FTAs and the final agreement Santiago needs to cover the entire MERCOSUR membership. With plenty of negotiations among many nations yet to go, it is impossible to say with certainty what the future holds for the Pacific Alliance.

However, based on the ambitions it has shown and the countries mooted as possible members, the alliance promises to become a powerful bloc on a global scale. It already counts four of the five best countries for doing business in Latin America among its members, according to the World Bank. If New Zealand, Singapore and South Korea were to join, it would have three of the best five in the world.

[*Thomas Bouvry contributed to this article.]

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

The post The Pacific Alliance at 10: A Global Future Beckons appeared first on 51�Թ�.

The closeness of that contest — in which the conservative candidate Carlos Mesa missed forcing a runoff against Morales by 0.58% of the official vote tally — meant that 2020 was also expected to be a tight race. In the event, this year’s election saw Arce gain over half a million more votes than Morales had the previous year, with a similar amount bled away from Mesa’s 2019 total, handing Arce an outright victory without the need for a run-off.

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While it would be tempting to see the Arce administration as a continuation of the Morales era, on the campaign trail, the new president , “I am not Evo Morales.” Since being elected, Arce has made clear that Morales would have “” in his government. Nevertheless, with Arce serving as minister of economy and public finance for most of Morales’ tenure, any consideration of what to expect from the new president must take into account his predecessor’s record. 

Business Under Morales

The Morales administration presided over a period of considerable economic growth and social development, which saw the drop by more than half, from 48% in 2006 to 23% in 2018, while gross national income (GNI) per capita — a general indicator of prosperity among the population — more than to reach $3,530 in 2019.  was also continuous and relatively consistent during this period, fluctuating between 3.4% and 6.8% until 2019, when it dipped to 2.2%. Those figures made Bolivia one of the countries in the region for much of Morales’ presidency.

These changes were partly the result of a policy of nationalizing the petroleum, telecommunications and mining industries, enacted by decree early in Morales’ first year in office and less than two years after 92% of Bolivian voters had supported the during a compulsory referendum. While the country’s revenues from hydrocarbons increased dramatically and provided the funds to support poverty alleviation programs, that approach did not lead to a dramatic fall in foreign direct investment (FDI) in oil and gas extraction or mining, as many expected. In fact, both industries saw , which subsequently declined again but never below the levels seen before Morales came into office. Throughout this time, it was Arce overseeing these programs and investment, as well as a process of agricultural development and rural land redistribution, which was followed by both a significant increase in production. 

It is important to note that a major policy shift occurred toward the latter years of the administration, with Arce himself during Morales’ final term that “our nationalisation agenda is over. … we need FDI, and we respect genuine, new private investment. Today FDI makes up 2 percent to 3% of our GDP. We want to double that by 2020.” In 2017, the country signed deals with foreign investors for hydrocarbon exploitation , supplemented by a further the following year. 

The fact that the interim presidency of Jeanine Añez, who occupied the office between Morales and Arce, largely coincided with the COVID-19 pandemic makes it incredibly difficult to properly assess its performance, given the massive economic upheaval experienced throughout the region. While the interim government ordered an audit of the previous administration early on, it was soon forced to focus on implementing a range of measures designed to address the closure of businesses and an increase in unemployment.  

In October, the interim government reported that the economic damage caused by the pandemic totaled around $5 billion, with an economic contraction of at least 4% expected by the end of 2020. While this unprecedented situation might make an assessment of the interim government difficult, it at least provides some important context for Arce’s approach to business and investment, which will be framed by the need to address the deep economic wounds caused by the pandemic.

Arce’s Approach to Business

As a candidate, Arce highlighted the efficacy of the economic policies pursued during the Morales administration and his intention to continue them. While this has been met with concern among some commentators, the more FDI-friendly latter years under Morales should give some cause for hope for investment in the country. Arce has proposed a drive for industrialization to replace importing foreign products in order to stimulate the internal market and generate more opportunities for locally-based companies. He has also said that he wants to encourage new in order to stimulate employment.

Yet Arce has also said that some form of to deal with the country’s economic woes will be needed, even as he has pledged not to reduce public expenditure. In a sign of his pro-FDI approach, he has also highlighted his desire to tap into Bolivia’s massive and unexploited lithium reserves, at a time when demand for the mineral is skyrocketing in the face of the shift toward electric vehicles. Arce has stated that exploitation of those reserves will demand the help of a “strategic partner” and could pour an additional $2 billion into state coffers over the course of his five-year term.

With the economic uncertainty that continues to swirl due to the ongoing pandemic, it is difficult to draw concrete conclusions about what to expect from the Arce administration, given that it is impossible to know what challenges and obstacles may present themselves in the coming months or years. Nevertheless, his early moves have pointed to a clear desire to stimulate business, with measures taken to provide for deferred credit, refinancing and rescheduling of debts, as well as forbidding additional interest being added to such credit by banks. 

What is abundantly clear is that Luis Arce understands how critical FDI is to Bolivia’s future development, and that understanding will surely only have deepened in the context of the economic turmoil that has traversed the globe. With Bolivia boasting a host of and unsaturated markets, and with the new president already highlighting his desire to bring foreign investment into Bolivia’s massive untapped lithium reserves, it seems reasonable to expect that his administration will pursue a significant deepening of FDI even while he maintains the high levels of social spending seen under Evo Morales.

The views expressed in this article are the author’s own and do not necessarily reflect 51�Թ�’s editorial policy.

The post What Should Business Expect From Bolivia’s New President? appeared first on 51�Թ�.