/raid1/www/Hosts/bankrupt/TCRLA_Public/230531.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, May 31, 2023, Vol. 24, No. 109
Headlines
A R G E N T I N A
ARGENTINA: Economy Needs Rains Now to Save Crops From Drought
ARGENTINA: Inflation Woes Reach Publishers as Price of Paper Surge
B E L I Z E
BELIZE: IDB and GPE Partner for Education Funding
B R A Z I L
UNIGEL PARTICIPACOES: S&P Lowers ICR to 'B+', Outlook Negative
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Deputies Dismiss Claims of Financial Collapse
DOMINICAN REPUBLIC: Tourism Contributes Almost 60% of Economy
G R E N A D A
GRENADA: Urged by IMF to Discontinue Tax Amnesty Program
V E N E Z U E L A
VENEZUELA: PDVSA Appeals Ruling in Gold Reserve Suit to 3rd Cir.
X X X X X X X X
LATAM: Inflation Hits a Turning Point, Fueling Rate Cut Calls
- - - - -
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A R G E N T I N A
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ARGENTINA: Economy Needs Rains Now to Save Crops From Drought
-------------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that Argentina's farmers
need precipitation to arrive within the next two weeks to stand any
chance of emerging from a disastrous drought that has shrivelled
harvests and slashed agricultural exports.
Growers in the heart of the Pampas region, the so-called 'zona
nucleo', need fresh rain in the next few days to moisten fields so
they can sow wheat, said Cecilia Conde, chief crop analyst at the
Buenos Aires Grain Exchange, according to Bloomberg News.
Failing that, the bourse would have to cut back its forecasts for
expanded acreage and higher production, which are predicated on the
La Nina climate pattern coming to an end, Bloomberg News relays.
Agriculture is key to Argentina's economy since the cash-strapped
central bank needs US dollars from crop exports to arrest a slide
of the peso, Bloomberg News discloses.
Farmers are struggling to recover from three consecutive years of
drought, Bloomberg News says. Soy fields being harvested now will
produce the least in two decades of record-keeping at the grain
exchange, while last season's wretched wheat crop slashed Argentine
exports by two-thirds, Bloomberg News notes.
Argentina, one of the world's leading food producers, has two
growing seasons in the year: wheat and barley, then soybean and
maize, Bloomberg News discloses.
Rains were good news for wheat growers, "but more are needed,"
Conde added.
The repercussions of another failed harvest would be felt by the
world's feedlots and by agriculture traders from Chicago to
Singapore. Global grain markets have been upended by droughts -
curbing production and causing transportation bottlenecks on rivers
in the United States and South America - and by the Russia-Ukraine
war, Bloomberg News relays.
Consistent rainfall isn't likely until El Nino is better
established in a few months, Bloomberg News relays. But some
showers are predicted over the next few days and weeks, according
to local agro-climatologists Eduardo Sierra and Leonardo de
Benedictis, Bloomberg News discloses.
In an interview, Sierra said only a couple of showers are needed to
be able to plant wheat, and they will apparently arrive in June,
Bloomberg News says.
Government weather maps published forecast up to 50 millimetres
(two inches) across much of the zona núcleo. That would dampen
fields just enough to get wheat seeds in the ground, according to
the Rosario Board of Trade, Bloomberg News notes.
Meteorologists have said for months that the rains will arrive when
the La Niña weather pattern gives way to El Nino, which brings
wetter weather in Argentina, Bloomberg News relays. But rains in
the core zone failed to arrive in the first quarter and have been
rather elusive in the second quarter, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings
reflects risks surrounding pronounced economic imbalances and
policy uncertainties before and after the 2023 national elections.
Divisions across the political spectrum constrain the sovereign's
ability to implement timely changes in economic policy. Global
capital markets are closed to Argentina. In the local market, swaps
are being deployed to manage large maturities before placing debt
through traditional auctions. The central bank continues to play a
key role as a backstop for local debt management in the secondary
market. The ongoing severe drought has exacerbated pressures in the
already disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Inflation Woes Reach Publishers as Price of Paper Surge
------------------------------------------------------------------
Api Dhadda at Buenos Aires Times reports that the annual
Buenos Aires International Book Fair (Feria Internacional del
Libro de Buenos Aires) always adds liveliness to the nation's
capital. The three-week literary fest came to an end, but as
always, the event produced impressive numbers: 1.245 million
book-lovers passed through the doors of La Rural, according to
Buenos Aires Times.
Nevertheless, those numbers were an 80,000 dip from last year's
record numbers, the report notes. Perhaps the novelty of
post-pandemic book interactions has worn off, returning Book Fair
attendance back to its normal visitation range? Or perhaps the
insidious effects of economic crisis and inflation have seeped into
every aspect of Argentine life, and the feria is no exception, the
report dislcoses.
"The book has suffered from the effects of the economy," admits
Fabián Narvaja, the owner of Colihue Editions, as he mans his
publishing house's stand at the fair, the report says.
Costs are up across the board, eating into profit margins and
forcing prices up, the report relays. The INDEC national
statistics bureau reported hikes of 12.8 percent and 128.7 percent
year-on-year in consumer prices for books, newspapers, magazines,
and other paper-based publications within the Greater Buenos Aires
region, the report notes.
"It is very upsetting to have to constantly be changing the prices
of the books, but the prices of the books are like the price of
bread, are like the price of food, clothing – everything," says
editor Bibiana Schiavone of Yaestiempo, a small Argentine
publishing company, the report discloses.
The increase in book prices is primarily led by a surge in the
price of paper, the report relays. The Argentine Book Chamber
(Cámara Argentina del Libro, CAL) reports a 150 percent increase
in the price of construction paper and a 300 percent increase in
the price of illustration paper for book covers and children's
books over the past year, the report says.
"We are living in a situation where the cost of paper varies
permanently, the dollar varies permanently, and so printing is very
expensive," Schiavone explains.
The price surges coupled with paper shortages has left smaller
publishing companies to deal with unpredictable and unmanageable
raw material costs, the report notes. CAL has, in part, attributed
those surging prices to the oligopolistic nature of the paper
market, the report relays. The price of paper rose 7.2 percent in
April, according to INDEC.
"The axis of the problem is the concentration of paper production.
There are two manufacturers and three importers, in total there are
five large companies that monopolise paper, the report discloses.
In addition, there is an abusive situation for both the
distributors and the paper manufacturers, and clearly there is an
absence of the State here," Martín Gremmelspacher, president of
CAL, told elDiarioAR.com in a recent interview.
Raw materials now make up more than 50 percent of the overall cost
of a book, a 15 to 20 percent increase from the historical share,
according to CAL,' the report relays.
"We get to the point where we don't know if it is convenient to
sell or not," explains Laura Eleusippi, from the Editorial Stadium
publishing house, the report notes.
The Argentine Book Chamber says the status quo is endangering small
and medium publishing houses and publications, posing a real threat
to "market that is increasingly impoverished in terms of
bibliodiversity since editorial plans are cut and print runs are
limited," the report adds.
The Book-Lover's Resilience
Price increases have posed a challenge for book-lovers and their
shrinking wallets, the report relays.
"Salaries don't grow as fast as inflation, so it's not always easy
to spend money on books," Jorge Gutiérrez Brianza, Commercial and
Operations Director at the Fundacion de Libros, explained in an
interview.
"When there is a crisis, and in Argentina we're always in crisis,
the first things that people stop consuming are entertainment:
movie theatres, restaurants, and books," Gutiérrez Brianza
continued, the report notes.
Yet, despite these barriers, the Argentine population has an
inexplicable, indefatigable love for the physical book, the report
discloses.
"I understand that people here [in Buenos Aires] prefer paper. They
prefer books. They prefer the physical rather than the digital,"
detailed Gabriel Gutieerrez, an executive with Dial Book, the
report relays.
"There is a very long and traditional history about not only
reading, but also about publishing. I mean, there are, in
Argentina, more than 300 publishing houses," Gutierrez Brianza
added.
The popularity of the Feria de Libro exemplifies this culture, the
report notes. In the professional days alone, the fair sold 30,000
kilos of physical books to local companies and 12,000 to foreign
buyers, a roughly 20 percent increase in sales from the previous
year, the report says.
"The fair is extremely important for publishers, for everyone,
because there is a significant amount of people who come wanting to
buy books to read, to learn about, to discover, so it is an
important way of selling, especially since we are a small
publisher. We are not in bookstores, so the sales at the fair are
very important," Schiavone explained, the report discloses.
Some publishing houses, like Gargola Ediciones - which offers a
range of literature from across genres, including comics and
fantasy - have not experienced any significant shift in sales
because the decrease in demand from the Argentine market has been
supplemented by international buyers, the report relays.
"There are many people who come from other countries to buy here
because it is very cheap. A book that costs US$5 here, you can sell
it for US$25 in any other country, or US$50, or more, so it sells
just the same," said Ian Balistrieri, one of the publisher's
employees, the report notes.
Digital Love
While Argentina's love for literature and the physical book has
kept the market alive, the sales platform for many companies
changed from in-person to digital during the pandemic, the report
notes. Small publishing companies in particular have benefited
from the exposure provided by online sales, the report relays.
"During the pandemic, the only way to sell was online with home
delivery and this in some way helped people find us, through
searches for specific material on the Internet or on YouTube,"
Schiavone explained, the report says.
"There was a good impact, because sales increased from the
virtual," the expert continued, the report discloses.
Some companies even noticed a trend in the preferences of young
readers, the report relays.
"Everything was so scary and I think they were tuned into that
quite a bit, so many young people turned back to paper," Bárbara
Cattaneo, from small publisher Dickens, explained.
Digital purchasing habits are egged on post-pandemic by
transportation costs, which have increased by 93.5 percent in the
last year alone according to INDEC, the report notes.
"After the pandemic, some returned to their old habits of 'I want a
book, I go to the bookstore,' but a large percentage stayed in
online shopping" said Silvia Peralta, from Quiosquito De Libros,
the report says.
For some houses, digital content has become serious competition for
the printed tome, the report relays.
"The book now-a-days, physical books, complete with not only
digital books, but also with courses, online courses, with PDFs,
with a lot of digital content that is not necessarily a book,"
Eleusippi explained, the report relates.
Her small publishing house, which focuses on physical education,
found that the pandemic reshaped the relationship people have with
learning processes by prioritizing the digital, the report relays.
"It's been quite challenging for printed books because it doesn't
make any sense to be raising prices when people can maybe watch a
video for free," Eleusippi stated.
Given the influx of digital competition and the rising raw material
prices, printing is no longer practical for Editorial Stadium, the
report notes. The publishing house, like many others in similar
educational niches, is considering a transformation to the digital
medium, the report discloses.
"Going digital, forces us to lower our income because we have to
charge an average, what Amazon says. There are standards and we
have to meet them. But, on the other hand, the market amplifies. We
are able to reach the Spanish-speaking market," Eleusippi
explained.
Digital books are typically 40 to 60 percent cheaper than paper
books in Argentina according to Libranda's Digital Book Annual
Report, if they follow the trend, this could mean a significant dip
in per-book income for the publishing house, the report.
Ultimately, the act of transitioning into a digital medium will
mean more than simply publishing a digital copy of their books, the
report relays. The company hopes to eventually create products
that match the multimedia learning style of the digital era, the
report discloses.
"We are right now considering how to approach this, acknowledging
that learning nowadays is not only about reading a book, but also
interacting with the teacher and maybe watching a video and maybe
also taking an exam, after reading a chapter. It's more like an
integrated process of reading, asking questions, and then getting
answers," Eleusippi concluded, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings
reflects risks surrounding pronounced economic imbalances and
policy uncertainties before and after the 2023 national elections.
Divisions across the political spectrum constrain the sovereign's
ability to implement timely changes in economic policy. Global
capital markets are closed to Argentina. In the local market, swaps
are being deployed to manage large maturities before placing debt
through traditional auctions. The central bank continues to play a
key role as a backstop for local debt management in the secondary
market. The ongoing severe drought has exacerbated pressures in the
already disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
===========
B E L I Z E
===========
BELIZE: IDB and GPE Partner for Education Funding
-------------------------------------------------
The Inter-American Development Bank (IDB) and the Global
Partnership for Education (GPE) have teamed up to transform
education in Latin America and the Caribbean. As part of this
initiative, the two institutions have approved a total of $20
million in financing to support the Skills for the Future Program
in Belize. The program will accelerate foundational learning,
bridge the skills gap, prepare students for a changing job market,
close gender gaps, and promote inclusive education.
Belize has made enormous efforts to expand primary education and
teacher trainings. Yet, the COVID-19 pandemic caused significant
learning losses, and secondary students faced higher repetition and
dropout rates. These challenges have overwhelmingly affected the
most vulnerable children and exacerbated learning gaps. Belize also
needs a skilled workforce to ensure a low-carbon, sustainable and
competitive economy. The country's reliance on agriculture,
tourism, and fishing, and the exposure of critical infrastructure
on the coast, increases its vulnerability to natural disasters and
climate change.
The partnership between IDB and GPE brings complementary support to
Belize to address those challenges through the $20 million Skills
for the Future Program. The program is comprised of a $15 million
loan from IDB and a $5 million grant from GPE. The government of
Belize is also contributing resources for project management and to
facilitate program execution and monitoring.
The GPE funds will help close learning gaps in foundational skills
at the primary school level, support education for students with
disabilities, close gender gaps, and strengthen the country's
education data system, in particular, to track the progress of
vulnerable groups and monitor gender equality interventions.
The grant will also carry out impact evaluations to scale up
successful interventions. In addition to investing in these areas,
IDB funding will help turn six high schools across the country into
science, technology, engineering, arts, and mathematics (STEAM)
laboratories to develop graduates who possess the fourth industrial
revolution skills needed for the workforce, such as cloud
computing, cyber security, and skills for the XXI century.
The program will have nationwide coverage with investments at the
primary and secondary levels, including technical and vocational
education and training (TVET). It will enable low-performing
students from all government-financed primary schools to
participate. In addition, a third of all secondary students will
benefit from six STEAM laboratories and 15 secondary schools
equipped with Virtual Lab technologies.
"The collaboration between IDB and GPE demonstrates the
acknowledgment of education as a crucial catalyst for social and
economic development in Belize, a goal that the IDB Group entirely
supports," said Rocío Medina Bolívar, IDB Group Country
Representative in Belize.
"The Global Partnership for Education is pleased to collaborate
with the IDB to support the government of Belize in attaining its
education goals," said Laura Frigenti, CEO of the Global
Partnership for Education. "There is no more relevant agenda for
countries than to prepare today's students for the world of
tomorrow, with skills that match the challenges our world is
facing."
"I am pleased to give my endorsement to this program, which forms a
crucial component of the government's plan to establish an
educational framework that equips students to thrive not just
academically but in all aspects of life. One of this ministry's
primary objectives is to stimulate economic development by
equipping the Belizean labor market with the essential 21st-century
skills demanded by the fourth industrial revolution," said Francis
Fonseca, Minister of Education, Culture, Science, and Technology of
Belize.
The IDB loan has a 25-year repayment term, a five-and-a-half-year
grace period, and an interest rate based on the Secured Overnight
Financing Rate (SOFR).
===========
B R A Z I L
===========
UNIGEL PARTICIPACOES: S&P Lowers ICR to 'B+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings, on May 26, 2023, lowered its global scale
issuer and issue-level ratings on Brazilian chemical producer
Unigel Participacoes S.A. to 'B+' from 'BB-', and its national
scale ratings to 'brAA-' from 'brAA+'. The recovery rating on the
company's senior notes and debentures remains '3'.
The negative outlook indicates a chance of another downgrade in the
next six to 12 months if the company's profitability and cash flow
don't gradually rebound over the next few quarters.
Since the second half of 2022, prices for most of Unigel's products
have fallen as the supply chains normalized and demand slowed due
to the global economic slowdown. At the same time, prices for most
of the company's inputs remain relatively high, including those in
its take-or-pay contract with Petrobras for natural gas, which is
pegged to Brent prices. S&P said, "We believe it will take longer
for the spreads of Unigel's main products to return to average
levels, which will pressure its profitability and cash flows for
the next quarters. As a result, we expect EBITDA to decline to
close to R$400 million in 2023 from almost R$1.8 billion in 2022,
with debt to EBITDA peaking at about 10x this year. For 2024, we
forecast profitability to improve as cost pressures dissipate and
revenues rebound, so we expect the company to reduce leverage to
4.0x-4.5x."
In 2021 and 2022, Unigel benefited from solid profitability in its
new nitrogen fertilizer segment thanks to high prices for ammonia
and urea and the company's hedges on its cost structure. This
scenario is now on the opposite direction: average urea and ammonia
prices in 2023 will likely be about 50% lower than those in 2022,
while costs will decline only slightly because Unigel's natural gas
contract is linked with Brent oil prices. As a result, the plant in
Sergipe, responsible for about half of the company's fertilizer
capacity, was shut down for maintenance in April and will likely
not restart in June, because Unigel intends to do a three-month
pause to avoid higher cash burn.
Under the current market conditions, management already announced a
capital expenditure (capex) reduction this year to about R$400
million ($80 million) from previously the expected close to R$600
million ($120 million). This means a delay in its expansion capex,
postponing the company's expected new sulfuric acid plant, which
will now start operating only next year, and also will postpone the
construction of a green hydrogen plant. The company is also acting
on working capital measures, such as extending terms with suppliers
and monetizing receivables, with the goal of neutralizing the
significant working capital consumption registered in the first
quarter 2023. The strategy also involves prioritizing production of
higher-margin products, such as sodium cyanide and premium grades
of urea to partly compensate for margin pressures in both the
chemical and fertilizer segments.
With significantly lower EBITDA generation in the next few
quarters, Unigel will breach its acceleration covenants of net debt
to EBITDA below 3.5x that are present on its debentures and some
bank lines. S&P assumes that the company would be able to negotiate
a waiver fee with debenture holders and banks for breaching the
covenant limit over the next few quarters.
ESG credit indicators: E-3, S-2, G-2
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Unigel. As a
petrochemical and nitrogen fertilizer producer, it's among the most
intensive carbon dioxide emissions producers. Still, we view
relatively low substitution risks, given that Unigel sells
styrenics, acrylics, and fertilizers to various industries, such as
home appliances and electronics, automotive, pulp and paper,
textile, agriculture, and others. Also, all of Unigel's plants are
in Brazil and Mexico, the environmental regulations of which will
likely lag those in Europe or the U.S. The company has some
recycling and reverse logistics initiatives in place, focused on
reducing waste and energy consumption. The company's current
investments on a project to produce green hydrogen and green
ammonia could help in decarbonization for different end products,
but this is a still incipient market."
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Deputies Dismiss Claims of Financial Collapse
-----------------------------------------------------------------
Dominican Today reports that several deputies who were part of the
bicameral commission responsible for preparing the report to reform
Law 87-01 on Social Security have argued against the concerns
raised by the Dominican Association of Pension Fund Insurers
(Adafp) regarding the potential collapse of the country's financial
system.
Deputy Jesus Manuel Sanchez highlighted that since the 2010
Constitution, the State has been entrusted with guaranteeing
fundamental rights and ensuring the economic well-being of
citizens, according to Dominican Today. He expressed support for
the creation of a public pension system and dismissed the notion
that the financial system would be negatively affected, the report
discloses. Sanchez emphasized that the comprehensive changes
integrated into the new social security reform would bring
well-being to the entire population, the report relays.
Deputy Tobias Crespo also underscored the importance of considering
the social and human aspects of the reform rather than focusing
solely on the return or profitability for the "millionaire sectors"
that have benefited from the pension systems, the report notes.
He argued that the claims of a collapse in the country's financial
and economic system due to the reform were "false," the report
relays. Crespo emphasized that the AFP sector should prioritize
the workers who contribute their resources, the report notes.
Congressman Rafael Castillo, another member of the bicameral
commission, defended the report on pensions by stating that if it
is approved, the AFPs (Pension Fund Administrators) would
experience a change in how they generate profits without negatively
impacting the country's economy, the report relays. He highlighted
that the administrators' profits would be derived from the
investments they make and not from the accumulated funds of savers,
the report says.
These deputies maintain that the social security reform will not
lead to a financial collapse and argue in favor of the changes,
emphasizing the well-being of the population and the need to
address the social and economic aspects of the pension system, the
report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican To related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'.The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.
Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative.S&P also
affirmed its 'BB-' long-term foreign and local currency sovereign
credit ratings and its 'B' short-term sovereign credit ratings. The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said.A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.
Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.
DOMINICAN REPUBLIC: Tourism Contributes Almost 60% of Economy
-------------------------------------------------------------
Dominican Today reports that the Minister of Tourism David Collado
stressed that tourism currently contributes around 60% of the
economy of the Dominican Republic.
"It is clearly evidenced that tourism is contributing almost 60% of
the economy of our country and that far from tourism being a piña
colada or being beach and fun, it is the main industry of the DR,"
he said, according to Dominican Today .
He specified that on the subject of air tourism, which is measured
by the Central Bank, there is a growth of 36% in relation to 2022,
while the world is in recession, the report notes.
Collado recalled that Hector Valdez Albizu, governor of the Central
Bank, said that tourism is supporting between 25 and 30% of the
economy in recent months, according to the program El Gobierno de
la Manana, the report relays.
He stated that such figures fill him with satisfaction because they
have exceeded in many cases his own projections, the report
relays.
"To have numbers higher than our own records for the year 2022 is
extremely strong. In 2022 we were competing with the recovery and
with the pre-pandemic numbers of 2019, but now we are competing
with our administration's own results," he added.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican To related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'.The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.
Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative.S&P also
affirmed its 'BB-' long-term foreign and local currency sovereign
credit ratings and its 'B' short-term sovereign credit ratings. The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said.A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.
Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.
=============
G R E N A D A
=============
GRENADA: Urged by IMF to Discontinue Tax Amnesty Program
--------------------------------------------------------
RJR News reports that the International Monetary Fund has urged the
Grenada government to discontinue a tax amnesty programme that came
into effect in January and will end on December 31.
Huidan Lin, who headed an IMF mission to Grenada for the Article IV
Consultations, says it was emphasized to the Grenada government
that this should be the last tax amnesty, according to RJR News.
Lin says the government will have to engage in stronger enforcement
to collect its taxes, the report relays.
The Grenada government announced the tax amnesty during the 2023
budget presentation by then Finance Minister Dickon Mitchell, the
report notes.
He said the government is owed more than EC$777 million in
outstanding taxes, late fees, and penalties, and the amnesty was
intended to recoup the funds, the report adds.
=================
V E N E Z U E L A
=================
VENEZUELA: PDVSA Appeals Ruling in Gold Reserve Suit to 3rd Cir.
----------------------------------------------------------------
PETROLEOS DE VENEZUELA SA (PDVSA) is taking an appeal from a court
order in the lawsuit entitled Gold Reserve Inc., on behalf of
itself and all others similarly situated, Plaintiff, v. Bolivarian
Republic of Venezuela, Defendant, Case No. 1-22-mc-00453, in the
U.S. District Court for the District of Delaware.
On Oct. 20, 2022, the Plaintiff filed a motion for a conditional
order authorizing the issuance of a writ of attachment fieri
facias, which the Court granted through an Order entered by Judge
Leonard P. Stark on Mar. 31, 2023. The cross-motion to dismiss
filed by Petroleos de Venezuela, SA was denied.
The Court found that PDVSA is not entitled to foreign sovereign
immunity and the Court has subject matter jurisdiction over this
action pursuant to the Foreign Sovereign Immunities Act.
The appellate case is captioned Gold Reserve Inc. v. Bolivarian
Republic of Venezuela, Case No. 23-1652, in the United States Court
of Appeals for the Third Circuit, filed on Apr. 11, 2023. [BN]
Plaintiff-Appellee GOLD RESERVE INC., individually and on behalf of
all others similarly situated, is represented by:
Katherine G. Connolly, Esq.
NORTON ROSE FULBRIGHT
555 California Street, Suite 3300
Los Angeles, CA 94104
Telephone: (628) 231-6816
- and -
Kevin J. Mangan, Esq.
Stephanie S. Riley, Esq.
Matthew P. Ward, Esq.
WOMBLE BOND DICKINSON
1313 North Market Street, Suite 1200
Wilmington, DE 19801
Telephone: (302) 252-4361
(302) 559-8528
(302) 252-4320
Defendant-Intervenor BOLIVARIAN REPUBLIC OF VENEZUELA is
represented by:
Ginger D. Anders, Esq.
Elaine J. Goldenberg, Esq.
Donald B. Verrilli, Jr., Esq.
Sarah Weiner, Esq.
MUNGER TOLLES & OLSON
601 Massachusetts Avenue NW, Suite 500e
Washington, DC 20001
Telephone: (202) 220-1107
(202) 220-1100
(202) 220-1141
Intervenor-Appellant PETROLEOS DE VENEZUELA SA is represented by:
Jamie L. Brown, Esq.
Samuel Taylor Hirzel, II, Esq.
Aaron M. Nelson, Esq.
HEYMAN ENERIO GATTUSO & HIRZEL
300 Delaware Avenue, Suite 200
Wilmington, DE 19801
Telephone: (302) 472-7318
(302) 472-7315
(302) 472-7312
- and -
Aubre Dean, Esq.
Kevin A. Meehan, Esq.
Juan O. Perla, Esq.
Joseph D. Pizzurro, Esq.
Allesandra D. Tyler, Esq.
CURTIS MALLET-PREVOST COLT & MOSLE
101 Park Avenue, 34th floor
New York, NY 10178
Telephone: (212) 696-6037
(212) 696-6197
(212) 696-6084
(212) 696-6000
(248) 884-2573
===============
X X X X X X X X
===============
LATAM: Inflation Hits a Turning Point, Fueling Rate Cut Calls
-------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Latin
America's top central bankers are meeting in Brazil as pressure
mounts on them to begin cutting interest rates in response to
slowing inflation.
Political leaders, investors and businesses across the region that
led the world into an aggressive monetary tightening campaign after
the Covid-19 pandemic are now anticipating - and in some cases
demanding - imminent rate reductions, according to
globalinsolvency.com.
That is testing the resolve of central bankers who remain hesitant
to declare victory even as they appear to have gained the upper
hand on consumer price increases, he report notes.
"Central bankers are more cautious after such a long period of
above-target inflation," Cassiana Fernandez, a Latin America
economist at JPMorgan & Chase Co, said ahead of the meeting, the
report relays.
For policymakers like Brazil central bank chief Roberto Campos
Neto, the Sao Paulo gathering is a chance to rally together to make
the case to impatient politicians that their caution is justified,
the report discloses.
Campos Neto, who is hosting the event, has faced unrelenting
criticism from President Luiz Inacio Lula da Silva over his
decision to hold Brazil's key rate at a six-year high of 13.75%,
even as annual inflation has fallen more than 8 percentage points
from a year ago, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2023. All rights reserved. ISSN 1529-2746.
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* * * End of Transmission * * *