The Law of Unintended Consequences: SITME and Venezuela’s Currency Market

For just over a year now, Venezuela’s central bank has been overseeing what is essentially is a bond-based foreign exchange market, known as SITME — a tightly regulated trading platform allowing individual and corporate investors to buy Venezuelan public debt with local currency, and then sell it for U.S. dollars. But SITME has given rise to a slew of unintended consequences, some of which seem to be adding to the mountain of distortions riddling Venezuelans’ everyday lives with economic anomalies, banking and finance experts tell Universia Knowledge@Wharton.

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Inés Rosales: A Traditional Food Company’s Recipe for Going Global

Despite frequent recommendations that they export, managers of many small and midsize enterprises are hesitant to make the leap to selling internationally. To help alleviate this fear, two professors at Seville’s Pablo de Olavide University have undertaken a study illustrating the successful internationalization of a small company that needed to overcome an additional barrier: marketing a food product closely tied to the culture of a specific region. The company is Inés Rosales, a century-old maker of tortas de aceite (olive oil tortas) from Andalusia in southern Spain.

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Social Media in Latin America: Creating a Strategy That Makes Sense

Internet users in Chile and Argentina are the number-one fans of Facebook in Latin America, according to a study by ComScore, a research firm that measures online behavior. Facebook, Twitter and LinkedIn have seduced both Latin American users and companies, many of which have become aware that these tools offer them a unique — and perhaps revolutionary — opportunity to forge closer ties with their customers. But are companies in the region getting the most benefit from these communication technologies?

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The Ties That Bind: A New Twist in Brazil-Argentina Trade Tactics?

High-level meetings over the past weeks have attempted to defuse the latest of many trade disputes between South America’s largest economies. Brazil’s new president, Dilma Rousseff, is focusing her first year in office on showing Argentina that her administration is not going to put up with its neighbor’s protectionism like her predecessors did. Meanwhile, can Argentina find ways to work the current trade tensions to its advantage, as some experts predict?

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Ollanta Humala, Peru’s President-elect: Which Path Will He Follow?

Few periods in the recent history of Peru have been as prosperous as the current one, and few have been as decisive from a political point of view. The recent victory of leftist-nationalist Ollanta Humala in the second round of the country’s presidential elections has disturbed markets and generated concern that the new president will follow the interventionist path of Venezuelan President Hugo Chávez. According to observers, Humala will have to allay fears that his election will lead to a change in the country’s economic model and undermine the prosperity achieved by Peru in the recent past.

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Panama’s Dash for Growth: Super Tankers, Skyscrapers and ‘Putting Strategic Advantages First’

Can Panama become the first developed Latin American country? The notion may seem unlikely to those who remember Panama as the ultimate “banana republic,” a serpentine-shaped isthmus known for its canal, a military strongman named Manuel Noriega and not much else. But today, the country has a growing list of projects aimed at proving that it has turned a corner. While the multibillion-dollar investments are welcome, not everyone in the country agrees that the rapid pace of change isn’t without big risks.

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Spanish Banks: Embracing Globalization and Leveraging Latin America’s Ties with China

Just as they did during the 1990s, the biggest Spanish banks have embraced globalization to diversify their businesses and become less dependent on their home markets. Latin America has always played a significant role in the banks’ globalization initiatives; their strength in the region is now helping them enter China, which offers tremendous growth potential. But how can they take greater advantage of the Chinese market and increasing trade flows between China and Latin America

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Closing the Flood Gates: Latin American Capital Controls Kick In

Latin Americais growing. And foreign capital — largely U.S. dollars — is flowing rapidly into the region as a result. Rising commodity prices, the near-zero interest rates outside the region and the United States’ loose monetary policy are some of the main reasons why. A snapshot of policy reactions in three countries — Brazil, Colombia and Chile — show a range of strategies, all aimed at keeping the dollar stable, protecting local competitiveness and preventing asset bubbles. Are they succeeding?

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Private Equity in Brazil: Entering a New Era

The relatively youthful Brazilian private equity (PE) industry has undergone an unprecedented expansion since 2004 as investors have donned their samba shoes and tested the rhythm of fund managers focused on this emerging world power. Over the past six years, the amount of capital committed to PE in the region has grown nearly sixfold — reaching approximately US$28 billion today. The retail, IT, and industrial sectors have received the greatest share of interest. So what has drawn all this investor attention to Brazil?

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Former Colombia President Álvaro Uribe on Latin America’s Journey to Political and Economic Security

Political corruption. Violent confrontations with narco-trafficers. Brutal kidnappings and murders. Such was the grim reality that has long been associated with Colombia. Now, after decades of turmoil, the country is improving its international image as a politically and economically stable nation. It has been a multi-pronged battle, launched and largely won during the eight-year presidency of álvaro Uribe. During a recent Wharton Latin America Conference, Uribe described the important elements of democracy and argued that private investment is critical in solving long-term social problems.

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