Tuesday, February 9, 2010

Colombian Flower Exporters Love Valentine's Day

Monday night saw the premiere of the new romantic film "Valentine's Day" at the famed Grauman's Chinese theater in Hollywood, California. While the stars of the ensemble cast were on display, so too were thousands of roses donated by Colombia.

According to Colombia's Association of Flower Exporters, more than 10,000 blooms were required to decorate the cinema for the event and another 5,000 roses were presented to fans that showed up.

Valentine's Day is traditionally one of the most important times of the year for the South American industry. According to the association, 80% of all the flowers currently imported to the United States are from Colombia - almost two thirds of all flowers sold in the country.

This year more than 500 million flowers will be shipped overseas to meet the demand generating 12% of annual sales for Colombian growers, the association reports.

The cut flower industry emerged in Colombia in the 1960 after a graduate student at Colorado State University identified the savanna around Colombia's capital of Bogota as one of the best places in the world to grow flowers for the US market. The region boasts regular 12-hour periods of daylight and temperatures averaging 57 degrees. Moreover, it's just a three-hour flight to the United States.

Over the following two decades, the industry grew steadily. By the end of the 1980s Colombian imports accounted for a full quarter of all flowers sold in the US. The real boom came in the early 1990s with the easing of tariffs as part of an initiative designed to help Andean countries fight the economic dependence on the drug trade.

Within a decade, Colombia's cut flower exports brought in more than $600 million annually and that total reached $1 billion in 2007.

But since then the industry has struggled. The association says that not only was last year's $1.03 billion a drop from the year before but that they expect the total to fall further in 2010.

The main culprit is the global economic downturn that has hit the industry in two ways; a drop in consumer spending has cut into sales and the weakening of the US dollar has slashed profit margins.

An unexpected winter freeze that struck in January has also affected the industry's bottom line (and led to higher flower prices in the US this year as well).

Even if Colombian flower growers get through the current tough times, clear sailing is by no means assured. The tariff exemptions that have allowed the Colombian growers to capitalize on the US market have expired and must be extended on a year by year basis.

Colombia and the US signed a Free Trade Agreement in 2006 that would make the exemptions permanent but awaits approval by the US congress. The passage of the agreement is by no means certain. US flower growers oppose a Free Trade Agreement with Colombia on the grounds it will give the South American country an even larger segment of the market.

Moreover, many Democrats have balked at the treaty citing lack of union rights in Colombia. The flower industry in Colombia has been particularly slow to incorporate labor organizations, critics say.

Monday, February 8, 2010

Endangered Galapagos Seals Migrate to Peru

A colony of approximately three dozen fur seals have left their home haunts in the Galápagos archipelago off Ecuador and settled on tiny Foca Island off Peru's northern coast - more than 1,500 away.

The species, Arctocephalus galapagoensis, breeds exclusively on the Galápagos islands as well as the nearby Isla del Plata. According to the Lima-based Organization for Research and Conservation of Aquatic Animals (ORCA) individual animals sometimes stray away from the islands but this is the first time such a large group of this particular species has migrated this far.

ORCA says that temperature changes in the Pacific prompted the sea lions to move southward. Typically the sea temperature around the Galápagos islands (about 1,000 kilometers west of continental Ecuador) averages around 25 degrees Celsius. But the waters off northern Peru have now heated up to that range as well.

Historically, the influence of the Humboldt Current flowing northward from Antarctica has kept the waters off Peru significantly cooler than those off the coast of Ecuador - usually about 17 degrees Celsius or so. Due to the effects of climate change or El Niño - the sea temperatures off northern Peru have now warmed to about 23 degrees Celsius.

The migration comes at a dangerous time for the unique species. The population of the Galápagos fur seals is estimated at about 40,000 but a decline of 50% over the last 30 years has led them to be classified as endangered. Moreover, El Niño events like the one currently occuring in the Pacific often leads to die offs and a cessation of reproduction.

Other seal species - such as the South American sea lion (Otaria flavescens) and the South American fur seal (Arctocephalus australis) - are quite common off the coast of Peru. In fact, a colony of 8,000 sea lions lives on desert islands in the bay of Lima.

Further south, the Ballestas Islands in the National Reserve of Paracas off the Southern Peruvian coast are home to huge colonies of seals, sea lions and other wildlife.

Friday, February 5, 2010

South American Presidential Approval Ratings

The popularity ratings for presidents across South America have altered significantly in recent months as elections have altered the political landscape in several countries and political pressures are precipitating changes in others.

• Brazilian President Luiz Inacio Lula da Silva is enjoying overwhelming popularity as his second and last term in office comes to a close. An election is set for October and Lula's chief-of-staff and top adviser Dilma Rousseff leads Social Democratic Party presidential candidate Jose Serra in polls by only 5.4 percentage points.

• The situation is much the same in Chile as Michelle Bachelet enjoys stellar approval ratings while she puts the finishing touches on her term in office (she barred by law from a second term). On January 17, Sebastián Piñera won Chile's presidential election with 52% of the vote and he will take office on March 11.

• In Uruguay, outgoing president Tabare Vazquez is also enjoying a late-term boost in popularity. He is slated to step down in March to make way for José Mujica, a former left-wing guerrilla fighter who won the presidency last November with 52.39 per cent of the vote.

• The popularity poll have nots are led by Venezuela's Hugo Chavez who has suffered a severe dip in his once-soaring ratings as his country has been beset with energy shortages and street protests linked to his increasingly autocratic rule.

• Chavez's erstwhile political ally, Ecuador's Rafael Correa, is facing similar pressures after starting the year with a downturn in his popularity ratings as well. After taking office in 2007 but engineered a constitutional change that called for a presidential election last year which he won handily. According to the new law, he can run again in 2013 if he chooses.

• Political turmoil in Peru and Argentina have similarly walloped the popularity ratings of presidents Alan Garcia and Cristina Fernández de Kirchner respectively.

• The situation couldn't be more different in Bolivia where staunch leftist Evo Morales is still enjoying the goodwill from his re-election last month where he garnered a whopping 63 percent of the vote. While he has already served one four-year term, term limits restrict him to just one more five-year term although many believe he will make an attempt to change the law to run again.

• Colombia's Alvaro Uribe has seen his stock plummet from the ratified stature of just a year ago due to turmoil in his government. He is seeking changes in his country's election laws to allow him to run for a third term in the May presidential elections. The proposal was recently dealt a legal setback but a final ruling may not be made until April.

• In Paraguay, president Fernando Lugo is holding steady in the polls.

• Presidential popularity figures further afield in Latin America include: Panama's Ricardo Martinelli at 91%, El Salvador's Mauricio Fuenes at 88%, Mexico's Felipe Calderon at 55%, Guatemala's Alvaro Colom at 46%, Costa Rica's Oscar Arias at 44% and Daniel Ortega of Nicaragua at 26%. In Honduras, Porfirio Lobo Sosa was sworn in last month after winning that country's controversial presidential election.

Thursday, February 4, 2010

Ecuador's Dangerous Drug Dilemma

Historically, security concerns about Ecuador have been eclipsed by neighboring Colombia and Peru. That could be changing as a series of reports critical of the tiny Andean nation's growing problems of lawlessness, corruption and human rights abuses have emerged over the past few months.

The cultivation of coca remains the headache of Colombia, Peru and Bolivia but, increasingly, Ecuador is becoming a site for cocaine production, trafficking and the shadowy financial system that services the industry.

According to the Los Angeles Times, "as much as 200 tons, or one-third of the cocaine produced in Colombia, may be transiting through Ecuador, four times the estimated percentage a decade ago."

The UNODC reports
that more than 25,000 kg of cocaine was seized in Ecuador in 2007 - more than 400 percent more than five years prior and outstripping every South American country save Colombia and Venezuela.

And there is evidence that the country is increasing its profile as a producer of the drug as well. A drug lab with the capability of cranking out 10 tons of cocaine a month was discovered in town of Lomas de Sargentillo last year.

Even more troubling, Ecuador has also become a hub for transnational criminal groups, according to the Financial Action Task Force - the inter-governmental body representing 33 countries and territories and 2 regional organizations.

The FATF reports that Ecuador has become a key business hub for Colombian and Mexican drug traffickers as well as Chinese and African human traffickers. The group noted that Ecuador had failed to comply with 48 of its 49 recommendations on money laundering and terrorist financing in 2007.

The group is expected to ask for Ecuador to be included on its high-risk jurisdiction list later this month.

These trends have occurred as Ecuador has joined a growing number of South American countries loosening draconian drug laws enacted at the behest of US policies.

For years, US anti-drug funding dollars carried demands that participating nations beef up their domestic drug laws. The result was a spike in prison populations as small-time users were incarcerated for minimal possession charges.

Reform efforts that loosen the penalties associated with individual drug users have swept the region and include Argentina, Brazil, Chile, Mexico and Ecuador. The lack of opposition by the Obama administration has been interpreted as a tacit approval of the change.

President Raphael Correa brought this approach to Ecuador in 2008 when he ordered Ecuador's parliament to pardon about 2,000 small-time couriers or "drug mules" being held in the nation's prisons.

"These people are not criminals," he said. "They are single mothers or unemployed people who are desperate to feed their families."

The move also dovetailed with his stated opposition to US involvement in Ecuador and Latin America. A stance he backed up with the termination of Ecuador’s lease with the US army for the use of the Manta air base - the center for anti-drug surveillance aircraft in the region.

Flights out of Manta were ceased last June and begun, somewhat controversially, out of Colombian bases.

Wednesday, February 3, 2010

Colombia's Invests in Infrastructure

Last month, Colombia launched the ambitious $2.6-billion, 1,000-kilometer Ruta del Sol highway project that will connect the capital of Bogota with the country's Caribbean Coast. It's the largest single highway project ever undertaken in the country and one of the biggest infrastructure efforts in South America.

Five years ago, Colombia launched the largest infrastructure overhaul in the country's history - Plan 2500. The $770 million effort has been aimed at the construction and upgrade of more than 3,200 kilometers of roadway.

Colombia's problem has been the inequality between the nation's primary method of transportation and the suitability of the routes it used. Approximately 70 percent of the nation's cargo is transported by truck but, as of 2007, less than 15 percent of the nation's almost 150,000 kilometers of roads were paved. Just 400 kilometers of multiple-lane paved highway existed at all.

The 2,500 infrastructure initiative was ignited partly by the promise of a Free Trade Agreement with the United States and Colombian officials cited it as a factor in the decision to move forward with the Ruta del Sol project. Although signed in 2006, that treaty still awaits approval by the US Congress and the likelihood of that occurring in this calendar year are slim.

The route is also critically important for Colombia to capitalize on the opportunity represented by the ongoing expansion of the Panama Canal. Although the country is the world's fifth-largest exporter of steam coal, it is the only producing country unable to sell into Asia due to high freight costs.

The increased scrutiny on carbon emissions has cut heavily into the European and the U.S. markets. The expanded canal is expected to facilitate exports from Colombia's Caribbean coast, where the bulk of the country's coal supplies are loaded for shipment abroad.

Santa Marta, the terminus of the Ruta del Sol road project, is the largest port on Colombia's Caribbean coast and handles more than half of the country's coal exports. That's expected to increase with the completion of a $300 million upgrade and other improvements which will more than triple the capacity of the port.