It shouldn’t come as a big surprise that most Latin American countries ranked toward the bottom of a new U.N. index of innovation. What’s surprising — and depressing — is that, with a few exceptions, they are not even making the list’s sub-group of “innovation learners.”

The massive new study titled “Global Innovation Index 2012,” done jointly by the U.N. World Intellectual Property Organization and the France-based INSEAD business school, ranked 141 countries according to their overall capacity to invent new products.

It’s a key indicator of countries’ future: in a knowledge-based global economy, where companies that invent new products — such as Google, Apple or Facebook — often have a higher market value than the economies of many countries, innovation is a major economic growth factor these days.

According to the new “Global Innovation Index 2012,” the 10 top world leaders in innovation are Switzerland, Sweden, Singapore, Finland, Britain, Netherlands, Denmark, Hong ... Read More

BY JOHN QUIGLEY

Peru’s central bank purchased the most dollars in three weeks as the sol traded near a 15-year high after exporters bought the local currency to pay taxes.

The central bank bought $139 million to stem gains in the sol, the most since July 19. The bank said on its website that it paid an average 2.6160 soles per U.S. dollar.

“They may be anticipating inflows coming in because of the tax season so they they’ve decided to neutralize that flow,” said Kenneth Lam, a strategist at Citigroup Inc. in New York.

The sol was little changed at 2.6165 per U.S. dollar at today’s close after earlier strengthening to 2.6150, according to Deutsche Bank AG’s local unit. The currency last touched 2.6150, which is the strongest level since 1997, on Aug. 9.

The currency has gained 4.8 percent over the past 12 months, the best performance among 25 major emerging-market currencies tracked by Bloomberg.

The yield ... Read More

BY CHARLES COLLYNS

The rapid ride from the airport to central Lima offered an immediate glimpse into how much the Peruvian capital had changed since my last visit, in 2006. Urban infrastructure improvements throughout the city – including rapid transit bus lanes and a new metro line – represent just one testament to the unmistakable progress Peru has made in recent years. And, when I arrived in Chile, I was similarly reminded by the dramatic improvements in the urban landscape that it is undeniably at the forefront of infrastructure development in Latin America.

Peru and Chile have become deservedly recognized as two of Latin America’s best-managed economies. Growth averaged 6.4 percent in Peru and 4.4 percent in Chile over the last decade – among Latin America’s fastest rates of economic expansion during that period – and growth remains strong this year in spite of a global slowdown. Poverty has fallen sharply in ... Read More

BY CHRISTOPHER LOOFT

In the town of Salvador Mazza, northern Argentina, drug traffickers cross the nearby border with Bolivia with ease, reportedly bringing in between 80 and 90 percent of the country’s cocaine. Clarin investigates how these networks are able to operate.

The authorities in Salvador Mazza, in the state of Salta, are undermanned, to the point that in some cases they have been ambushed and killed by criminal groups. Imported cars are regularly stolen, to be traded across the border in Bolivia for cocaine. The unmanageable flow of people and goods in this border region provides the perfect cover for the many forms of cocaine trafficking, ranging from mules who swallow the drug to larger shipments brought over in lorries.

Argentine newspaper Clarin recently travelled to the region to investigate. The following is InSight Crime’s translation of extracts from Clarin’s report on organized crime in the border region in northern Salta: “Salvador ... Read More

BY JAIME SUCHLICKI

The same week that President Obama downplayed the threat to U.S. security from Venezuela’s Hugo Chávez, a high-level delegation from Hezbollah was visiting Caracas and Havana. Ammar Musawi, head of Hezbollah International Department, praised Cuba as a model on how to oppose “imperialist hegemony, arrogance, and plunder.” In Venezuela, he met with the Vice-Foreign Minister and condemned the “ferocious attack” against their Syrian ally. Venezuela’s growing relations with Iran and Chávez’ support for terrorist groups both in the Americas and the Middle East should worry the U.S.

The most remarkable and dangerous foreign policy initiative of the Chávez regime has been allying Venezuela with Iran. Chávez has allowed the Iranians to use Venezuelan territory to penetrate the Western Hemisphere and to mine for uranium in Venezuela. Chávez policy is aiding Iran in developing nuclear technology and in evading U.N. sanctions and U.S. vigilance of the Iranian drug trade and ... Read More

WASHINGTON, D.C. — People living in Latin America and the Caribbean are the least likely in the world to personally feel safe in their communities, with slightly less than half of residents (46%) reporting in 2011 that they do not feel safe walking alone at night where they live.

People living in East Asia, Southeast Asia, and Northern America — which includes the U.S. and Canada — were the most likely worldwide to feel safe. At least three in four residents in each of these regions reported feeling safe, but as it does elsewhere around the world, people’s sense of security varies by country. (Full country results are available at the end of this article.)

Majorities in 13 Latin American and Caribbean Countries Do Not Feel Safe

Latin Americans’ sense of security varies across the region, from a low of 34% in Venezuela to a high of 69% in Trinidad and Tobago. ... Read More

BY RANDALL WOODS

Hugo Chavez’s back-door entry into the Mercosur trade bloc led by Argentina and Brazil casts doubt on the future of a pact that has fueled a tenfold boom in commerce between South America’s two biggest economies.

Chavez will attend today a ceremony in Brasilia welcoming Venezuela as a full member of the world’s third-biggest trade bloc after Paraguay was suspended last month over lawmakers’ ousting of President Fernando Lugo. Paraguay’s refusal to ratify Venezuela’s admission had held up since 2006 the country’s entry into the four-nation group, which also includes Uruguay.

Paraguay has contested Venezuela’s membership, winning support from top Uruguayan officials and Brazil’s opposition, who say Chavez’s human rights record and seizure of foreign- owned companies is anathema to a group founded to promote democracy and trade. With Chavez lobbying for a more politicized Mercosur to advance his anti-U.S. agenda, his entry may isolate the group from a trend ... Read More

BY SARA MILLER LLANA

MEXICO CITY; AND COCHABAMBA, BOLIVIA

Like thousands of other Bolivians, Marcela Lopez Vasquez’s parents migrated to the Chapare region, in the Andean tropics, desperate to make a living after waves of economic and environmental upheaval hit farming and mining communities in the 1970s and ’80s.

The new migrants, who spread across the undulating green hills here, planted bananas. They planted yucca and orange trees. But it was in the coca leaf that thrives in this climate that they found the salvation of a steady cash crop – and themselves at the nexus of the American “war on drugs.”

The coca leaf has been sacred in Andean society for 4,000 years and is a mainstay of Bolivian culture. It is chewed by farmers and miners, enlisted in religious ceremonies, and used for medicinal purposes. “The only resource for maintaining our families is the coca leaf,” says Ms. Lopez Vasquez. “With coca ... Read More

BY MATTHEW BRISTOW & ERIC MARTIN

Peru and Bolivia have become the world’s largest cocaine producers after Colombian capacity to produce the drug fell to its lowest since 1994, according to a U.S. government estimate.

Colombia’s output capacity fell 25 percent last year to 195 metric tons, according a report released in Washington today by Gil Kerlikowske, director of the U.S. Office of National Drug Control Policy. That’s 72 percent less than a peak of 700 tons in 2001, the report said. Peru produced 325 tons of cocaine in 2010, while Bolivia produced 265 tons in 2011, according to the report.

The U.S. estimate follows a report published by United Nations Office on Drugs and Crime last week, which found that land in Colombia dedicated to production of coca, the raw material for making cocaine, climbed last year for the first time since 2007.

Click here for original ... Read More

BY CARLA SALAZAR

LIMA, Peru—A year into his presidency, Ollanta Humala has proven most popular among the Peruvians who most feared him as a candidate, and least popular with the poor he professed to champion.

His ratings are lackluster, his popularity on a downward slide.

As Humala’s approval rating dropped from 59 percent five months ago to 40 percent today, much of the blame owes to his inability to resolve a conflict over Peru’s largest mining project in the northern state of Cajamarca.

Local farmers fear for their water supply, and five protesters were shot and killed there earlier this month opposing a government-backed plan for the open-pit Conga gold mine.

As a candidate, Humala had told the region’s farmers their access to clean water was more important than the extraction of gold. Then he showed them otherwise, twice imposing states of ... Read More

LIMA (Reuters) – Peruvian President Ollanta Humala’s approval rating fell to a fresh low in July, a year since he took office as concern grows over his handling of increasingly violent social conflicts, an opinion poll showed on Sunday.

Humala’s popularity fell 5 percentage points for a second consecutive month to 40 percent, while the number of respondents who said they disapproved of his administration rose to 51 percent, according to the Ipso Apollo survey.

Peru is a leading global metals supplier, but the push to develop its mineral riches has triggered dozens of conflicts due to fears over potential environmental damage and opposition from local residents who want a bigger share of the windfall.

Deadly violence in protests against Newmont $5 billion Conga mine prompted calls for Humala to reshuffle his Cabinet earlier this month.

Opponents of the Newmont mine ... Read More

BY RANDALL WOODS AND JOHN QUIGLEY

Chile and Peru yesterday opted against following the lead set by nations from Brazil to South Korea in cutting interest rates as economic growth and slowing inflation in the Andean neighbors gave central bankers little reason to change monetary policy.

Policy makers in Chile kept borrowing costs at 5 percent for the sixth straight month, while their counterparts in Peru held their overnight rate at 4.25 percent for a 14th consecutive meeting, matchingthe median estimates in Bloomberg surveys of economists.

The two economies will be among the world’s fastest growing in 2012 while also posting some of Latin America’s lowest inflation rates, according to International Monetary Fund forecasts. Yesterday’s decisions balanced the respective risks posed to consumer prices and growth by expanding domestic demand and a global deceleration, economist Pedro Tuesta said.

“Chile has a better argument for holding in the sense that inflation has come down to ... Read More

BY KRISTA HUGHES AND ANTHONY ESPOSITO

MEXICO CITY/SANTIAGO (Reuters) – Latin America has developed a dangerous dependency on China as a voracious consumer of commodity exports and the region now faces a potential hit as the huge Asian economy cools.

Exports to China by some of Latin America’s major economies – Brazil, Colombia, Chile and Peru – have grown 10-fold in value since 2001. China is now the top export destination for all of those counties, except Colombia.

The rise of the Asian powerhouse has helped redraw the region’s economic map, spurring investment in soybean farms in Brazil’s remote center-west, plans for a new rail link in Colombia to rival the Panama Canal and even the relocation of a Peruvian town in the Andes to accommodate Chinese miner Chinalco.

But $90 billion in direct exports to China are only part of the story. As ... Read More

Bolivia’s Evo Morales has been re-elected.

Some of you may be asking, “Weren’t the country’s elections in 2009?” Yes, they were. That’s not at all what we’re talking about.

It was reported Monday by several Hispanic news outlets – including Los Tiempos, La Razon and La Rioja (excuse the Google Translate pages, but you get the idea) – that the Bolivian president once again has been elected to helm the union for coca leaf producers in the nation.

Coca, as in the precursor plant for cocaine.

Those of you familiar with Morales are aware of his fondness for the crop. You might even remember the time he gave Secretary of State Condoleezza Rice a charango, an Andean instrument similar to a ukelele, inlaid with leaves from the plant … which must have made for spirited discussion when she came back through U.S. Customs.

Those of you familiar with Bolivia are aware ... Read More

BY VINOD SREEHARSHA

SAO PAULO – With the help of Brazil, South America’s largest economy, Venezuela has joined the regional economic alliance Mercosur, once heralded as the continent’s answer to the European Union.

But the addition of Venezuela has angered one of the 21-year-old trading bloc’s founding members, Paraguay, which considers the move retribution for the June impeachment of its president, Fernando Lugo. In addition to Brazil, the other members of Mercosur are Argentina and Uruguay.

Many are also questioning the impact of adding a country led by Hugo Chavez, a staunch critic of U.S. foreign policy and a frequent and capricious intervener in the free-market economy. The 57-year-old Chavez has had three cancer surgeries but says he’s in remission and is running for re-election in October.

Will Venezuela’s addition do little more than provide Chavez with a larger stage and potentially damage Mercosur’s credibility? Or could it be a masterstroke by Brazil to strengthen ... Read More

BY JERRY BREWER

The removal of Paraguay’s leftist president, Fernando Lugo, last month* brought on the usual accusations and the propensity of Venezuelan President Hugo Chavez to interfere in Latin American neighborhood politics. Of course, Chavez’s lead was diligently followed by sharp criticism of the Paraguayan government from his left-leaning minions throughout the hemisphere.

The ritual two-step banter was quick to play out as the new government of Paraguay ordered home its ambassador in Venezuela, citing “the grave evidence of intervention by Venezuelan officials in the internal affairs of Paraguay.” And Hugo Chavez was quick to demonstrate his own weak upper hand, ordering his military attachés to leave the Venezuelan Embassy in Asuncion (reportedly sending them to Argentina).

Venezuela’s ambassador had left Paraguay a week earlier, when he was called home for consultations by Chavez amid accusations that Venezuela was “preparing a coup.” Chavez’s translation of the facts did not resemble Paraguay’s “new ... Read More

BY JULIAN PECQUET

U.S. energy giant Chevron is applauding the U.S. Trade Representative for taking Ecuador to task over its refusal to obey an international tribunal in an $18 billion pollution lawsuit.

Ecuador wants Congress to renew its duty-free access to the U.S. market under the 1991 Andean Trade Preference Act, which expires next year. Chevron and several U.S. business groups however argue Ecuador is violating the terms of the deal and felt vindicated by a USTR report late Friday that raised similar concerns.

“Chevron is encouraged that USTR is monitoring important issues regarding Ecuador’s ongoing respect for its treaty obligations against the eligibility criteria for ATPA,” Chevron said in a statement. “Ecuador’s failure to abide by these rulings is a clear violation of the eligibility criteria of the Andean Trade Preferences with the United States.”

The report could make it harder ... Read More

BY JAVIER SOLANA

Colombia and Peru are fast approaching the final stages of ratification of a Free Trade Agreement with the European Union. It is a major agreement that offers a bridge for ever-widening relations and commerce between South America and the Union. And in our age of globalization such a bridge is very necessary.

The F.T.A. was well-negotiated by the European Commission, and has already been ratified by the Council, which is made up of the governments of the European Union. The final step now lies with the European Parliament, which must ratify it too.

This is as it should be: The liberalization of commerce between the European Union and the two Latin American countries concerned will ultimately create more opportunities, more jobs and a better future for the peoples of Colombia, Peru and the European Union. It is therefore only fitting that the direct representatives of the peoples of Europe have ... Read More

BY JOHN LYONS

CUSHILLOCOCHA, Peru—The soggy lowlands here were long seen as inhospitable for growing coca potent enough to make cocaine. The plant mainly thrives at steeper, higher elevations of the Andes Mountains, where it was first cultivated by Indians many centuries ago.

More coca, the raw material in cocaine, is being grown in the Amazonian lowlands of Peru, close to smuggling routes into Brazil.

But new techniques have given this Ticuna Indian village near the banks of the Amazon River in Peru a surprising distinction in the global drug trade: It is now home to some of the world’s fastest expanding plantations of coca, the raw material in cocaine. The United Nations’ annual drug report, to be published Tuesday, is expected to document the big changes in the global cocaine business that are helping drive coca cultivation—and cocaine consumption—deep into ... Read More

BY FRANK BAJAK

LIMA, Peru — Peru’s struggle with a resurgent cocaine trade is in the spotlight as it hosts nearly 60 nations in conference on illicit drugs beginning Monday.

The Andean country’s cocaine production likely now exceeds Colombia’s, making it the world’s No. 1 source of the illicit drug, the United States and United Nations say.

President Ollanta Humala said when he took office a year ago that he’d make the drug war a priority, and his government announced an ambitious antinarcotics plan in March.

So far, though, the corrupting influence of drug money has badly weakened Peru’s law enforcement agencies and judiciary, consistently frustrating money-laundering and drug prosecutions, says the counter-narcotics chief in the attorney general’s office, Sonia Medina.

“There is a paralysis at the moment” she said last week, with honest, committed judges and prosecutors scant.

There is no shortage, meanwhile, of cocaine, which Peru supplies to neighbors including Brazil, the world’s No. ... Read More