Brazilian President Proposed $3.25 billion in Tax Breaks for Telecomm Networks

In an effort to strengthen Brazil's telecommunications network in the midst of the global financial crisis, President Dilma Rousseff plans to propose 6 billion reais ($3.25 billion) in tax breaks for construction in the industry.  This is just one in a series of tax breaks and other incentives aimed at protecting strategic industries in Brazil from feeling the impact of the global crisis.  It's also an expected part of the infrastructure improvement process as Brazil prepares to host for the 2014 World Cup and 2016 Olympic Games.  An auction for 4G telecommunications networks is planned for the end of April, but some companies have asked for a delay.  Analysts have warned that Brazil's existing networks will need a major overhaul to keep up with booming domestic demand, and the promise of an influx of tourists for the sporting events will put pressure on the country to make the improvements quickly.

Mexico City Introduces Electric Taxi Program

The infrastructure in Mexico City continues to strengthen with new programs aimed at generating economic value and reducing the city's level of air pollution.  As part of the "Green Plan" signed in 2009, Mexico City introduced its first 100 zero-emissions taxis.  Gabriel Fernandez, CEO of General Electric in Mexico, spoke at the inaugural ceremony held at one of the new charging stations.  "With the rollout of a quick-charge station like this one, the Mexican market is strengthening its energy security, driving innovation in clean energies, reducing dependence on oil and generating economic value for our inhabitants," she said during the ceremony, held at one of the stations.

Read it here at FOX Latino.

Honduras Cuts Security Tax after Angering Businesses

In response to US Secretary of State Hillary Clinton's claim that wealthy elite and businesses of Central America aren't doing their part to combat drugs trafficking and violent street gangs, Honduran President Pepe Lobo endorsed a fiscal package aimed at increasing the state's anti-crime budget. However, opponents of the plan claimed that the tax hikes would discourage business.  Intended tax increases included a 5% base metal export tax and a 3% bank withdrawal tax, from which the private sector argued that tax revenues would far exceed the desired $79 million annually.  Two laws from the proposed plan stay in place: a 1% tax on mobile telephone companies and a 0.5% tax on fast-food restaurant profits. Lawmakers hope that the revised tax plan will provide sufficient revenue to make a dent in the drug and violent crime problems without making it impossible for private enterprise to survive.  The question remains as to which factor will be more detrimental the Honduran private sector: high taxes, or unsafe perceptions of the country that could discourage external investors? In 2010, Honduras had a homicide rate of 77 murders per 100,000 inhabitants, and Mexico, a country constantly painted by the US press as being violent and dangerous, had a homicide rate of only 14 per 100,000 inhabitants. 

Read it here at Reuters.

As IT Outsourcing Services Decline, Nimble Providers see Opportunity

Denis Barker from Sourcing Line found that the IT Outsourcing Services Sector declined at a rapid rate last quarter, according to Ovum's IT Services Contract Quarterly Analysis.  The number of deals worldwide fell to 384, and total contract values dropped 40% compared with the second quarter of last year.  The Q2 numbers haven't  been this low since 2003.   There is, however, a bright side: alternatives to India, primarily destinations in the Asia-Pacific region, haven't been hit as hard by this trend and dropped a mere 4% last quarter.   Who's to blame? The "lousy US economy" makes the list, as does IT buyers' demand for "hard benefits".  Buyers need to know that in addition to cost savings, outsourcing spending is bringing innovative approaches to the transformation process.  Nimble providers with the ability to present buyers with a unique value proposition that could not be achieved in-house.  


Read it here from Softtek Blogs.

2011 Nearshore Destinations Ranking

Nearshoring has become a popular and intelligent option for US companies that are not only looking to lower costs, but also want that cultural affinity and technological innovation that lend themselves to increased productivity and expertise.  Latin America as a whole is gaining credibility, but it is important to delve deeper than the regional level to find the place where a company can attain the most value.  With this in mind, ThinkSolutions took 19 countries in Central and South America to determine their overall appeal as nearshoring service locations and ranked them according to their financial incentives, business environment, and labor force.  We placed emphasis on factors that would bring out the unique characteristics of the region, such as cultural affinity, time zone alignment, technological readiness, and language capabilities.  These rankings will be updated quarterly or as major events occur that alter the outsourcing landscape. Click here to request a white paper.