Economy

Latin America Pivots To India As Chinese Growth Slows

India charting new waters?
India charting new waters?
Oswaldo Morales

SANTIAGO â€" China has been one of Latin America's main trade partners in recent years, driving the engine of development in the region with a hungry demand for raw materials to help sustain the Asian giant's growth.

But the recent slowdown of China's economy has been felt acutely in the economies of several Latin American countries. In Peru and Chile, for example, where mining is a key industry, international price declines for minerals have discouraged investment and affected national growth expectations.

All of this makes clear that we must step up the search for new markets for our products on the global market that allow us to diversify risk. Given that, it's time to turn our attention in particular to a global giant that's expanding by the day: India.

India, which is on track to surpass China to become the world's most populous country, is currently the 12th largest economy. And though our trade relations with India have been more timid than those developed in China, some Latin American countries have been active in trying to step up bilateral relations with New Delhi.

Soybeans from Brazil are already exported to India. There are also Indian companies investing in mining in Chile and Peru. The energy and pharmaceutical industries are two particularly interesting areas for India, and the country has already engaged in business with Venezuela, Brazil and Argentina.

The software development sector has long been flourishing there, but other technology-based industries, such as like car and motorcycle manufacturing, are opportunities for trade. Companies like Tata, Bajaj and Hero are already offering their products in Argentina, Colombia and Peru, and at very competitive prices.

Vegetarian staple

Peru is currently negotiating a wide-ranging free-trade agreement with India. Beyond its mining interests, including gold, silver and copper, India sees other products with great potential such as quinoa. This grain produced in the Andes is of great interest to a country like India, which has a huge demand for vegetarian food.

There are also Peruvian companies present in India, like Aje Peru, which has a soda bottle production site in the city of Maharashtra, and also Resemen mining machinery, which has established a branch in New Delhi.

For India, Latin America is still a small market, but one with great potential. Latin America is included in India's strategic planning for global growth. In 1997, India even created a formal program seeking to develop relationships with Latin American countries.

There's enormous opportunity for our region's entrepreneurs to increase trade with this up-and-coming global econoic giant. Doing so allows us to diversify our business risk and decrease what has been an unhealthy reliance on China. We may even learn to love Bollywood in the process.

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Green

In Argentina, A Visit To World's Highest Solar Energy Park

With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.

960,000 solar panels have been installed at the Cauchari park

Silvia Naishtat

CAUCHARI — Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.

Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.


It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.

Abundant sunshine, low temperatures

The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.

Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.

It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.

Chinese engineers working in an office at the Cauchari park

Xinhua/ZUMA

Chinese want to expand

The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.

The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.

The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.

The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.

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