Dominican Republic Logistics Summit 2024 examines the country’s role as a center for Latin American logistics.

The Minister of Industry, Commerce and Small and Medium Sized Enterprises (MICM), Víctor Ito Bisonó, said on Thursday, April 18, that the Dominican Republic is among the countries in the Latin American and Caribbean region with the best maritime connectivity.

At the Summit, it was communicated that the Dominican Republic boasts superior maritime connectivity due to its strategic geographical location in the heart of the Caribbean. It is positioned at the crossroads of major shipping routes and serves as a vital hub for trade and commerce between North and South America, Europe, and beyond. The country’s extensive network of ports, including the Port of Santo Domingo, one of the oldest in the Americas, facilitates the efficient movement of goods and services. Moreover, ongoing investments in port infrastructure and modernization initiatives ensure that the Dominican Republic remains a preferred destination for maritime trade, offering reliable and cost-effective transportation solutions to global markets. With its favorable geographic position, well-developed port facilities, and commitment to continuous improvement, the Dominican Republic is a beacon of maritime connectivity in the Caribbean region.

“This is how, in 2022, the United Nations Conference on Trade and Development recognized the Dominican Republic as the country with the sixth-best performance in this area among 36 countries in the region. Worldwide, the Dominican Republic occupies the 50^th position out of 187 countries,” he observed.

Air connectivity is highly developed as well

He said that the country has eight international airports, which have experienced notable growth in terms of air connectivity. Last year alone, the country received more than 132,500 commercial passenger flights, an increase of 12% compared to 2022.

“This historic milestone consolidates the position of the Dominican Republic as an important Latin American logistics hub of connections to some 170 destinations around the world,” said the official after the first edition of the Dominican Republic Logistics Summit 2024 (DRLS2024).

Regarding port connectivity, he noted that the country has several world-class ports, which have consolidated their position as critical maritime terminal operators. These ports now play a vital role in the sustainability of global supply chains.

“The excellent air, sea, and port connectivity of the Dominican Republic as a Latin American logistics hub has been a key factor for developing efficient logistics operations and positioning the country as a regional leader,” he indicated.

Also participating in the closing ceremony of the Dominican Republic Logistics Summit 2024 were Eduardo Sanz Lovatón, director general of customs (DGA), and Jaak Rannik, president of the Shipowners Association of the Dominican Republic (ANRD).

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Joint work to develop a modern Latin American logistics hub

“Together, we have laid the foundations for new growth opportunities for the Dominican Republic as a Latin American logistics hub. We take away not only knowledge and new relationships but also the renewed commitment to continue working together for the well-being and progress of our country,” said Rannik.

He said the Logistics Centers bill is pending approval in the short term in the Chamber of Deputies, which has had the consensus of the main actors in both the private and public sectors.

“This is a key piece of legislation so that we can have a legal framework that represents another competitive advantage in favor of the consolidation of the Dominican Republic as a Latin American logistics hub,” he added.

Furthermore, he stated, “This is undoubtedly a firm step necessary to turn logistics into the next important economic axis of the country and turn our national vision into reality.”

Modernization of Customs

For his part, Eduardo Sanz Lovatón stated that “The modernization of the national Customs Authority has been essential to convert the Dominican Republic into the main logistics hub in the region.”

He said that the expeditious approval of Customs Law 168-21 demonstrates the country’s ability to adapt to modern demands in a globalized world. This is true especially at present with a technological review of cargo that went from 60% to 96%. This increase strengthens the security of the logistics hub and facilitates the attraction of further international investments.

He concluded that the country has the only highly connected port-airport in the hemisphere, which positions it as a critical Latin American logistics hub that connects the Dominican Republic with more than 55 countries and 170 international destinations.

The Dominican Republic was highlighted as a pivotal Latin American logistics hub during the Dominican Republic Logistics Summit 2024. With superior maritime connectivity and a strategic location at the crossroads of major shipping routes, the country serves as a vital link for trade between North and South America, Europe, and beyond. With world-class ports and eight international airports experiencing significant growth, the Dominican Republic boasts extensive air and sea connectivity, positioning it as a key player in global supply chains. The collaborative efforts of public and private sectors aim to further enhance the country’s logistics capabilities, with pending legislation and ongoing customs modernization initiatives reinforcing its status as a prominent Latin American logistics hub.

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Data centers in Latin America have become one of the region’s fastest-growing sectors. Governments of different countries, companies, universities, and organizations in various areas are the leading groups in Latin America that demand these services.

According to data from the consulting firm Research and Markets, the market for Latin American data centers is experiencing considerable growth. Brazil is by far the country that continues to lead the way, but some countries, such as Mexico, Colombia, and Chile, are emerging, especially in recent years. Looking to the future, the outlook is more than positive, and investments in data centers in Latin America are expected to amount to $9.11 billion between 2021 and 2027, with a compound annual growth rate (Cagr) of 7.13%.

How many Latin American data centers are there and where are they?

According to data from Statista, Mexico and Brazil have the most data centers (154 and 150, respectively, although numerous new projects are underway).

The digital transformation, the virtualization of information, the need for data, and the rise of large-scale projects in countries with marked growth, such as Mexico, Chile, and Brazil, are encouraging these significant investments.

The current trend promotes the definition of spaces to locate data centers. At the same time, attention is drawn to the regulations that each country must implement in terms of the tax revenue that this can represent and envisions a different panorama in terms of the demand for services such as electricity, connectivity, and water, among others.

In the short term, the data center market in Latin America will witness the following trends:

• Greater connectivity. 5G networks are beginning to reach these countries. According to Statista, the six leading economies in Latin America (Brazil, Mexico, Argentina, Colombia, Chile, and Peru) will invest about 120 billion dollars in integrating 5G networks. This will lead to intensive use in artificial intelligence and edge computing, requiring lower latencies or the metaverse.
• Greater market regulation. The urgent need to commit to sustainability and the environment is causing greater concern about the energy consumption of data centers. Vertiv has indicated that Latin American data center operators will be more interested in certifying their operations. Linked to this circumstance, modular and prefabricated solutions will begin to gain ground, which are smaller but have everything necessary, including more sustainable cooling options.
• Search for green and clean energies. Latin America will have to start betting more fully on alternatives such as green hydrogen and options such as implementing new battery technologies, such as lithium-ion.

Challenges and problems to overcome

One of the biggest problems to be solved is the political instability and economic uncertainty that sometimes affect Latin American countries. The difficulty of predicting IT investments in the coming years will be one of the main challenges to achieving complete consolidation of the growth of data centers in Latin America.

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New data center locator

The year 2023 was marked by the inauguration of data centers in Latin America, mergers, acquisitions, and the implementation of strategic initiatives, among which the creation of the Mexican Association of Data Centers (MEXDC) stands out. These actions aim to strengthen further a sector that continues its expansion driven by the growing demand for data and the ongoing digital transformation.

Brazil has emerged as the leader in the recent opening of new data centers in Latin America, followed by Mexico, Chile, and Colombia. “Brazil stands out with its renewable and clean energy matrix, positioning itself as a fundamental player in the future of sustainability in our sector. The country maintains its relevance at a global level thanks to this energy matrix and its ability to supply energy,” explained Alessandro Lombardi, CEO of Elea Digital.

According to Marcos Siqueira, VP of Operations at Ascenty, studies reveal that in 2023, Brazil led investments in data centers in Latin America, representing 40% of total investments in the region.

“Frost & Sullivan also noted that the annual growth rate between 2019 and 2023 reached approximately 12.9%. At Ascenty, operations also continued to expand. Currently, the company has 24 operational data centers and another ten under construction in Brazil, Colombia, Chile, and Mexico. During 2023, the construction of data centers was driven by 5G, the demands of Artificial Intelligence, and various demands that these new technologies created,” said Siqueira.

For Eduardo Carvalho, Managing Director of Equinix in Latin America, Latin America has been the fastest-growing technology region in the world due to the rapid adoption of mobile devices, an emerging fintech startup environment, and a younger, tech-savvy population.

“Latin America data centers will continue to grow in 2024. At Equinix, we have invested more than USD$1 billion in LATAM, demonstrating that the region is highly attractive to expand our data centers and our digital offering,” said Carvalho.

DCD carried out a market study on data centers in Mexico. According to the study, a direct investment of approximately 7 billion dollars is planned until 2027 in the Mexican data center industry. Of this amount, 3 billion dollars are already in the construction process, while 3.9 billion dollars constitute the planned and/or announced investment.

“Data centers in Latin America have become the nerve center of modern institutions and companies. Mexico has many advantages for more companies to invest in data centers that will strengthen the growth of the digital economy, generating new companies, more jobs and multiplying the opportunities of digital businesses,” said Amet Novillo, president of the Mexican Association of Data Centers.

In conclusion, the burgeoning data center industry in Latin America presents a compelling opportunity for both investors and stakeholders across the region. With Brazil leading the way and countries like Mexico, Chile, and Colombia swiftly emerging as key players, the sector is witnessing substantial growth driven by digital transformation, increased connectivity, and the imperative for sustainability. Despite challenges like political instability and economic uncertainty, the momentum remains strong, bolstered by strategic initiatives, investments, and the establishment of industry associations. As Latin America continues to position itself as a hub for technological innovation and infrastructure development, the outlook for the data center market remains promising, poised for further expansion and integration into the global digital landscape.

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Business sectors support the call for the May Pact in Argentina proposed by President Javier Milei, highlighting the importance of a national consensus.

The Argentine Confederation of Medium Enterprises (CAME), the Institute for Business Development of Argentina (IDEA), the Association of Argentine Banks ( Adeba ), the Inter-American Council of Commerce and Production ( Cicyp ), and the United States Chamber of Commerce United in Argentina (AmCham) have expressed their support for the call made by President Javier Milei for a May Pact, underlining the need for dialogue, negotiation and agreements between the different sectors of Argentine politics. These endorsements are added to those of other business chambers that have already praised the announced measures.

The effort by the head of the Government of Buenos Aires to work seriously and responsibly to reach a great national agreement is positively valued. “The recently made call by President Javier Milei to the May Pact in Argentina, during the Opening of Ordinary Sessions 2024 of the National Congress, moves exactly along those lines,” states the statement from CAME, which represents more than 400,000 SME companies throughout Argentina.

For its part, IDEA celebrates the presidential initiative to establish ten basic principles of the economic order, considering it a gesture of hope for the country. “The call to governors and former presidents made recently by President Javier Milei to establish ten basic principles of the economic order is a gesture… that fills us with hope,” says the IDEA statement. The entity entirely agrees with the proposed points, aligning with the proposals it had been promoting to reverse decades of social and economic deterioration in Argentina.

Both organizations emphasize the importance of this moment as an opportunity for the country to move towards sustainable development, respecting private property, and establishing modern and sustainable tax, labor, and pension regimes.

Support for the May Pact in Argentina is not limited to these entities. On a recent Friday, business chambers such as the Argentine Chamber of Commerce (CAC) and the entity that brings together cereal exporters, CIARA-CEC, in addition to the Agroindustrial Council Argentino (CAA) and the Grain Exchange had also expressed their support for the proposed labor and tax reforms, as well as the inviolability of private property in Argentina.

A similar message arrived almost at the same time from the exporting entity. “The speech of the President of the Nation, Javier Milei, at the Opening of Ordinary Sessions was forceful, clear, and precise in the path to get out of this deep economic and social crisis. We encourage the governors to join the May Pact in Argentina, which should lay the foundations for the sustainable development that our country needs with foreign trade with added value that is the key to growth,” stated the brief but firm CIARA-CEC text.

More support emerged among entities linked to the field. The Argentine Agroindustrial Council (CAA) supported the presidential call: “We urge political forces, provincial governments, legislators and business and worker union entities to work to ensure that “Mayo Cordobés” is the starting point of a new Argentina that attracts investments, generates quality employment and value-added exported products.”

“The diagnosis and course of action proposed by President Milei are going in the right direction. From our organization’s perspective, we firmly support the deregulation process that the National Government is carrying out, as well as the forceful fiscal and monetary order, austerity in the management of public funds, and the fight against entrenched corruption in various areas,” said Mario. Grinman, President of the CAC, shortly after the President’s message concluded.

In the same sense, the Grain Exchange made “a call to political forces to turn the May Pact in Argentina into the starting point for the construction of a new Argentina. Achieving long-term policies is the way to grow and generate employment federally. At the same time, we express our commitment and support for the initiative.”

Pending challenges

Also, the United States Chamber of Commerce in Argentina ( AmCham ) highlighted that the President’s initiative to call on the different political spaces to adhere to these principles is a step in the right direction. “Argentina faces a series of complex challenges that range from strong macroeconomic distortions to alarming social problems. The only way to overcome these obstacles and build a sustainable future is to move towards a normal Western country model,” highlighted AmCham.

“It is necessary to emphasize that the success of the May Pact in Argentina will depend on the sincerity and openness of all parties. A broad agreement from all governments and political parties would signal that the local and international private sector is seriously waiting to consider Argentina a safe investment destination. The reconstruction of Argentina is a task that involves everyone. Turning Argentina into a viable country depends on our ability to overcome differences and work together urgently to build a sustainable future,” the organization added.

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Bank support for the May Pact in Argentina

The Association of Argentine Banks ( Adeba ) celebrated President Milei’s call to representatives of the country’s political forces to establish ten institutional and economic order guiding principles. “The economic and institutional development of the country requires agreements on adequate basic principles, which are maintained over time, and which frame the actions of successive government administrations. This is a necessary condition to reduce poverty and improve the income levels of the entire population,” Adeba noted.

Likewise, the organization’s representatives indicated that the financial system is in condition and able to provide the financial services that economic and employment growth require. In addition, Adeba assured that its membership has the solvency, liquidity, processes, and technology to do so.

“We trust that each of the parties involved will make the necessary efforts to understand the importance of reaching an agreement that is as broad as possible, which allows Argentina to achieve comprehensive development of society,” they concluded.

Their peers from the Association of Banks of Argentina (ABA) also expressed “their support for the call made by the Presidency of the Nation to the provincial administrations to agree on a series of basic guidelines included in the ten points detailed in the May Pact of Argentina.”

“The dialogue between the leaders of the different political forces, as well as the coordination between the public and private sectors, are essential for the delineation of public policies, regulatory changes, and agreements on the responsible use of public resources, necessary for the generation of formal jobs and the opening of markets for regional economies that allow the strategic insertion of Argentina with all its potential on the global stage,” ABA indicated.

For these reasons, “the Association calls on the governors and leaders of the different political forces to work jointly with the national government and the private sector to reach the essential consensus to reverse the current crisis, to establish a path of sustainable growth and improve the quality of life of all citizens.”

The May Pact of Argentina is an opportunity

The Inter-American Council of Commerce and Production (CICYP) also showed its support for the words expressed by President Javier Milei during his opening speech of the 142nd period of ordinary sessions in the National Congress. “We consider that these statements place the country before a unique opportunity to return to the path of development and reestablish fundamental consensus, thus avoiding a new failure,” the CICYP  stated.

For the Council’s representatives, the “May Pact” contains principles already enshrined in the National Constitution, which have not been exempt from recurring sieges that placed Argentina in multiple scenarios of extreme unpredictability over the decades. “The defense of private property, as well as respect for freedom of trade and openness to the world, are essential values if Argentina is to become an attractive destination for investments once again,” the organization noted.

“It is for this reason that the reform that modernizes labor relations, the reduction of public spending, the relief of tax pressure, and the defense of fiscal balance must become one of the indisputable aspects of the path to be followed,” the CICYP concluded.

The May Pact in Argentina: What exactly are the ten principles?

1. The inviolability of private property.
2. The non-negotiable fiscal balance.
3. The reduction of public spending to historical levels, around 25% of the Gross Domestic Product.
4. A tax reform that reduces tax pressure simplifies the lives of Argentines and promotes trade.
5. The reconsideration of the federal tax-sharing scheme that will forever end the current extortionate model.
6. A commitment by the provinces to advance exploiting the country’s natural resources.
7. A modern labor reform that promotes formal work.
8. A pension reform that gives sustainability to the system respects those who contributed and allows those who prefer to subscribe to a private retirement system.
9. A structural political reform that modifies the current system and realigns the interests of the representatives and those represented.
10. Opening to international trade so that Argentina again becomes a protagonist in the global market.

In conclusion, the call for the May Pact in Argentina, spearheaded by President Javier Milei, has garnered significant support from various sectors of society, including business chambers, financial institutions, and trade councils. This initiative establishes ten fundamental institutional and economic order principles and signifies a collective effort toward national consensus and sustainable development. Focusing on vital issues such as private property rights, fiscal responsibility, and economic reform, the May Pact presents a promising opportunity for Argentina to overcome challenges and become a competitive player globally. All public and private stakeholders must commit to sincere dialogue and collaboration to ensure the successful implementation of these principles and pave the way for a brighter future for the nation.

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With 109 years of operation, the Panama Canal has recorded record numbers in recent years.

Taking advantage of its geographical position, the Canal has modified international trade, saving time, distance, and costs in the maritime transport of finished products and raw materials between different countries since its inauguration on August 15, 1914.

This monumental engineering work connects 180 maritime routes, reaching 1,920 ports in 170 countries worldwide, where approximately 5% of world maritime trade was transited in 2024.

The figures on the Canal

Through its 82 kilometers of length, the Panama Canal connects the Atlantic and Pacific oceans. It has contributed to the Panamanian economy of US$ 20.7 billion during the last 25 years of being in Panamanian hands.

The Panama Canal’s handover to Panama in 1999 significantly boosted the country’s economy. Here’s a breakdown of its contributions:

• Direct economic impact: The Canal generates revenue through tolls paid by ships using the waterway. This income directly contributes to Panama’s government budget.
• Indirect and induced impacts: The Canal’s activity creates a ripple effect throughout the Panamanian economy. It spurs related industries like logistics, shipping services, and canal maintenance, creating jobs and increasing economic activity.
• Expansion project: The major Panama Canal expansion project undertaken between 2007 and 2016 further bolstered the economy. Construction activities created significant demand for materials and labor, stimulating growth.

Furthermore, it delivered a contribution of US$ 2.5 billion to the National Treasury through surpluses, rights per ton of transit, and payment for services provided by the State during fiscal year 2022.

This waterway contributed  US$2.5 billion to the treasury for fiscal year 2023, thanks to a budget estimated at US$4,652.0 million.

The impact on the economy of Panama

It can be observed that the Panama Canal significantly impacts the economy of Panama in three main ways:

• As a source of export of services, where the income received comes from the users of the Canal, for this reason, they form part of the economy’s total exports and constitute a fundamental source of essential resources for economic growth, job creation, the flow of investments, the acquisition and adaptation of new technologies and the training of human resources.
• The Panama Canal facilitates various additional economic activities (shipping companies, fuel terminals, etc.)
• It supports other services and export activities in the transit zone (free zones, banks, etc.).

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Facts about the Panama Canal

The first ship to cross the Panama Canal was the American ship Ancón in 1914. Its passage meant the official opening of the maritime Canal.

Fifty-six thousand three hundred and seven workers participated in the construction of the Canal, the majority coming from the Antilles, Europe, and North America. In the excavation, around 270,000 cubic yards of earth were extracted, the material used to build the Amador military fort, the town of Balboa, and the breakwater on Naos Island.

The cost of the canal toll depends on the weight of the boat and the number of passengers. The cheapest toll was paid in 1928 by Richard Halliburton, the only man to swim across the 49 miles (80 kilometers) of the Canal. The feat took him 14 days. He paid 36 cents on the dollar, equivalent to his 63 kilos of weight.

On average, it takes a ship between 8 and 10 hours to pass through the Panama Canal. First, the ship waits its turn at the entrance and then enters until it stops through the locks that use the force of gravity to fill and empty themselves with fresh water, thus allowing ships to pass through the isthmus.

The Panama Canal is a route some cruise chains offer between September and April. The crossing allows travelers to observe the operation of the Canal. They can observe the hydraulic locks that lift the boat, descend, and continue sailing through this magnificent architectural work that drives the economy of Panama.

What’s Coming

In addition to the initiatives for a new water resource management system, in 2023, the Panama Canal was committed to maintenance programs, which include infrastructure such as the Panamax locks that have been operating for more than 100 years, as well as floating equipment, such as tugboats that support the daily operation of the Canal.

Furthermore, in the future, the Canal anticipates focusing on increasing its organizational agility and moving toward new, improved, and digitized processes. These changes will bring greater operational efficiency at all levels.

Indeed, the development of the Canal goes hand in hand with the development of the country’s imports and exports and the economy of Panama.

In conclusion, the Panama Canal is a testament to human ingenuity and engineering prowess. It transcends its role as a mere waterway to become a linchpin of global trade and a cornerstone of Panama’s economy. With over a century of operation, it continues facilitating the flow of goods and services between the Atlantic and Pacific oceans, driving economic growth, job creation, and technological advancement within Panama and beyond. As the Canal embraces modernization initiatives and commits to maintenance programs, it positions itself for continued relevance and efficiency in the ever-evolving landscape of international commerce. The Panama Canal’s journey undoubtedly mirrors Panama’s, intertwined with the nation’s past, present, and future aspirations for prosperity and development.

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This blog post explores the complex trajectory of the Mercosur-EU agreement, considering the main challenges, the politics involved, and the impact on global commercial relations.

On an initiative considered crucial for international relations and institutions, Mercosur and the European Union countries prepare for a meeting at the end of April to preserve the progress made in recent rounds of negotiations for the long and complex free trade agreement they are considering. This partnership, which has been in place since 1999, faces a delicate moment, according to experts and international trade authorities.

What are the main points of tension in the Mercosur-EU agreement?

The arrival of Rupert Schlegelmich, the European Commission’s trade director, in Brasilia during this period is a sign of the importance and urgency that the issue demands from both sides. However, the prospects for finalizing the agreement in 2024 may be minimal. Significant political events influence this circumstance in the territories of the parties involved, such as the European Parliament elections and the end of Ursula  Von Der Leyen’s mandate.

Progress and obstacles in negotiations

Both blocks recognize significant advances that can be disregarded within the scope of conversations between the two parties. Notable examples include discussions on government purchases requested by Brazil’s president, Luis Ignacio Lula da Silva, which are now approaching a satisfactory resolution. However, the new EU anti-deforestation law and policy represent a considerable challenge, directly threatening exports of critical products from Mercosur countries.

How can political changes in Argentina affect the agreement?

The political dynamics in Argentina, with the presence of the new president, Javier Milei, suggest a more receptive stance towards the agreement, contrasting with the Alberto Fernández era. That change is seen as a facilitator in negotiations, offering a new perspective on the conflict that involves the interests of protectionists and liberalists within the political and economic spectrum of the countries involved.

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European Vision Union on the agreement

In a recent visit to Brazil, French President Emmanuel Macron classified the 2019 agreement as “terrible, ” reflecting the tense discussion that still occurs among the Union European members. Even so, Brazilian authorities remain optimistic, considering the possibility of overcoming these obstacles after the electoral and administrative events in the EU.

What is the future of the Mercosur-EU agreement?

• Analysis of the influence of elections in the European Parliament and Von Der Leyen’s possible second term.
• Strategies for maintaining progress achieved and avoiding a throwback in the negotiations on the Mercosur-EU
• Impact of political changes in Argentina and other Mercosur countries.
• Adjustments and commitments are necessary to resolve the impasse over the new law and EU anti-deforestation policy.
• The vision and position of key EU countries, such as France, Ireland, and Poland, towards the Mercosur-EU agreement.

The meeting between Mercosur and the Union European Union at the end of this month brings with it the chance to “freeze” the significant advances made so far, establishing one path towards resuming negotiations soon. The complexity of discussions and interests involved requires all parties’ care, patience, and strategy, outlining a scenario of uncertainty and possibilities promising for both blocks’ economies.

In conclusion, the trajectory of the Mercosur-EU agreement epitomizes the intricate dance between progress and political dynamics in international relations. While both blocs acknowledge substantial advancements in negotiations, challenges loom large, notably the EU’s anti-deforestation law and policy directly impact Mercosur’s key exports. Moreover, shifting political landscapes, such as the rise of Javier Milei in Argentina and internal discord within the European Union, add layers of complexity to the path forward.

Ultimately, the Mercosur-EU agreement stands at a crossroads, with the potential to either stagnate or progress. It demands a delicate balance of interests, commitments, and foresight from all stakeholders, underscoring the complexity of global trade negotiations. While uncertainties abound, the promise of economic benefits for both blocs emphasizes the imperative of continued engagement and perseverance in pursuing a mutually beneficial accord.

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