Week 20, 2023 - Find The Way Newsletter

“We crave for new sensations but soon become indifferent to them. The wonders of yesterday are today common occurrences” - Nikola Tesla

MARKETS?

May 19, End Of Day

• Argentina S&P MERVAL Index = 338,677.61 (YTD = 67.59%)
• Brazil BOVESPA Index = 110,744.51 (YTD = 0.92%)
• Chile S&P IPSA Chile = 3,263.38 (YTD = 2.86%)
• Colombia MSCI COLCAP = 1,123.90 (YTD = -12.61%)
• Mexico IPC Mexico BMV = 54,296.05 (YTD = 12.03%)
• Peru S&P/BVL Peru = 21,587.79 (YTD = 1.21%)

CURRENT AFFAIRS

Ecuador: In response to impeachment attempts from opposition politicians who accuse him of disregarding embezzlement warnings related to a state-owned oil transportation company, Ecuador's President Guillermo Lasso has dissolved the National Assembly and triggered early elections . The decision, which has sparked widespread controversy, allows Lasso to remain in office and rule by decree until new elections take place, with these early elections expected to occur within 90 days as outlined by Ecuador's constitution.

Mexico: Announced a new policy allowing passport applicants to select an "X" option instead of specifying male or female, in a bid to support individuals identifying as non-binary . However, the move has been criticized by non-binary activists, like Alex Orue, for confusing the concepts of sex and gender and potentially reinforcing stigma against the non-binary community.

Chile: The lower house of Congress has approved a mining tax reform , which now only needs the signature of President Gabriel Boric to become law; the reform will increase taxes and royalties for large copper and lithium producers in the country. The legislation, considered a victory by Finance Minister Mario Marcel, introduces a top tax rate of nearly 47% for companies producing over 80,000 tonnes of fine copper annually and an ad valorem tax of 1% on copper sales from companies selling more than 50,000 tonnes, with an additional tax of 8% to 26% based on the miner's operating margin.

TECH

• US companies are aggressively recruiting tech talent from Latin America, leading to increased competition and driving up salaries for skilled workers, which local startups struggle to match . Amid a talent shortage, Latin American companies are finding creative ways to secure talent, including hiring non-English-speaking developers, nurturing less experienced workers in-house, or recruiting from smaller cities. Despite challenges, experts project 10 million new IT job openings in the region by 2025, driven by local growth and the increasing demand for "nearshoring" by US companies seeking cheaper talent in similar time zones.
• Despite funding challenges, Latin America's tech sector is thriving, with companies like Mercado Libre hiring and expanding due to potential large markets and their ability to innovate in areas with significant development gaps . The region's tech executives are optimistic, citing the growth of Ecommerce, Fintechs promoting financial inclusion, and the outsourcing of software development from cost-cutting American companies as key drivers, all while accustomed to navigating political and economic volatility.

Fundraising picks of the week

• Colombia, Beu: Creators and freelancers can unify all their sources of income on a single platform. Beu was born from a very powerful premise: We are all creators and have something valuable to share with the world. As individuals, we all possess the innate ability to bring ideas to life and make a living from our talents. Whether you're a freelancer offering services, or a creator sharing your unique digital content, the freelancer and creator economies both hinge on your expertise and creative vision to generate income.
• Bolivia, Mobi : Provides a range of sustainable electric transportation options, including E-mopeds, E-bikes, and E-scooters. What sets Mobi apart is that they manufacture their own fleet in Paraguay, which enables them to exercise greater control over the technology, reduce delivery time, and implement continuous improvements to their products.
• Mexico, Kigüi : They incentivize final consumers in Latin America to choose and buy products close to their best before date at supermarkets, with the aim of reducing the 40% of food waste in the region. This initiative addresses the lack of incentives for consumers to buy food close to expiration and the resulting food waste costs falling on producers.

Dive deeper into other fundraising firms in LatAm here .

FURTHER READING

IMF reports of the week

Uruguay's real GDP grew by 4.9% in 2022, driven by strong commodity exports and the service sector, despite economic deceleration due to external conditions and a severe drought . However, the IMF Executive Board projects a slowdown in 2023 with a real GDP growth rate of 2%, while inflation is expected to fall within the target range in 2024, commending the nation's robust institutions, sound policies, and resilience against economic shocks.

Peru: The IMF has completed the mid-term review of Peru's Flexible Credit Line (FCL) arrangement, affirming Peru's continued qualification due to its strong economic fundamentals, institutional policy frameworks, and track record of effective macroeconomic policies . Despite the uncertainty and elevated global risks, Peruvian authorities have expressed a desire to maintain their current level of access and plan to treat the arrangement as precautionary, intending to exit the arrangement based on the evolution of external risks.

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