Indian and Latin American cooperation
THIS year, India has shown a notable interest in increasing its economic relations with Latin American countries. Given the serious crisis in the Eurozone and the deceleration of the U.S. economy, nations south of the Rio Bravo are demonstrating greater macroeconomic stability and represent a major growing market.
For example, Brazil, the principal regional buyer of Indian products and the second-largest supplier to the country, increased imports from the Asian giant by 66.2% on the first seven months of 2012. Mexico, the second largest buyer and fourth Latin American exporter to India, raised its exports to the country by 72.1% in the first half of the year.
Other Latin American nations, essentially exporters of raw materials, also have a secure market in India at a time of financial instability. Indian business executives predict that, by 2014, bi-regional trade will be double that of 2011.
However, the Indian Ministry of Foreign Affairs believes that economic links with Latin America could be more developed, and thus exceed the current trade volume of $25 billion, an insufficient figure and equal to 10% of Chinese economic exchange with the region.
The Indian economy is historically based on manufactured goods and agriculture, being one of the principal world producers of sugar cane, cotton and jute. But in recent decades the country has diversified and developed into sectors such as space and aeronautics research, informatics, telecommunications, electronics, medicine, oil and natural gas.
In fact, India’s dynamic industrial development has caught the attention of companies worldwide, leading to the establishment of subsidiaries in the country, which possess a large qualified workforce.
As a member of the group of emerging economies, BRICS, together with Brazil, Russia, China and South Africa, India contributes half of global economic growth. In 2011, its Gross Domestic Product grew by over 8%.
In June 2012, a ministerial representation from the Community of Latin American and Caribbean Community (CELAC) had a meeting in New Delhi with Indian government officials, during which both sides expressed a mutual interest in extending political relations and economic ones in particular. It was the first time that CELAC, comprising 33 countries in the region, had negotiated abroad as a bloc.
- Latin American Economy Expected to See More Growth in 2013 (hispanicallyspeakingnews.com)
Sri Lanka has closed down its only refinery, Sapugaskanda, as the sanctions imposed against Iran’s energy sector by the US have taken a toll on the South Asian country’s crude imports.
“Since August due to strict adherence to US sanctions, our letters of credit for imports have stopped being accepted,” Sri Lanka’s Petroleum Minister Susil Premjayantha said on Wednesday.
The Sapugaskanda refinery, which has a capacity of 50,000 barrels a day and is geared only to process Iranian crude, shut down its operations earlier this week due to not receiving oil supplies from Iran.
Premajayantha said this week that Sri Lanka’s cumulative loss from the US sanctions against importing Iranian crude was a staggering $1.2 billion.
At the beginning of 2012, the US and the EU approved new sanctions against Iran’s oil and financial sectors. The embargoes aim to prevent other countries from purchasing Iranian oil or transacting with the Central Bank of Iran.
The US and the EU have declared that the bans are meant to force Iran to abandon its nuclear energy program, which they claim includes a military component.
Iran has vehemently refuted the allegation, arguing that as a committed signatory to the nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it is entitled to use nuclear technology for peaceful objectives.
- No oil; Sapugaskanda runs dry! (oneislandtwonationsblogspotcom.typepad.com)