Source: MercoPress

Argentina limited the use of cash in the country’s financial markets as President Cristina Fernandez tightens oversight of currency transactions to help contain capital flight and prepare for what is anticipated a ‘difficult’ year for the Treasury and the Argentine economy.

The government will restrict daily cash transactions to 1.000 Pesos (231 US dollars) per person, down from 10.000 Pesos, according to a statement in the Official Gazette. The measure affects activity in the stock and bond markets, investment funds and in the futures markets. Operations above the limit will have to be done through Argentine bank accounts that are authorized by the central bank.

“They are forcing a higher level of formality in the economy, as cash transactions allow more irregularities,” said Felipe Hernandez, an analyst at RBS Securities Inc. in Stamford, Connecticut. “This is in line with other measures to prevent money laundering, for which the government has been under a great deal of pressure.”

The move is aimed at combating money laundering and terrorist financing, according to the statement in the Official Gazette.

Since winning a second, four-year term in October, Cristina Fernandez has ordered the tax agency to review all foreign currency transactions, required pre-approval for the importation of goods and raised capital requirement on banks in a bid to limit dividends and slow capital flight.

Outflows totalled 18 billion collars in the first nine months of 2011, double the same period in the previous year, and accelerated to the fastest pace in at least a decade in the third quarter. The Argentine government measures have slowed outflows, allowing the central bank to rebuild its international reserves.

Confirming the impact of the latest measures trading in Argentina’s foreign- exchange market has plunged to a five-year low, down 47% last month from a year earlier to 3.8 billion dollars, lowest since October 2006.

Volume in the foreign-exchange market dropped to 5.2bn in October and 4.4bn in November from 7.1bn in September, after the Cristina Fernandez administration required companies and individuals to get authorization from the tax agency to purchase dollars.

The government also made trading in the unregulated currency market a crime punishable by as long as eight years in prison as part of an anti-terrorism law.

The measures have allowed the central bank to buy a record amount of dollars, injecting pesos into the economy and pushing the benchmark bank deposit rate down 525 basis points, or 5.25 percentage points, to 14.75% since CFK won a second term.

Source: Daily Mail

Brazil could become the first country to take Twitter up on its plan to censor Tweets at government request.

The move has sparked alarm among privacy groups, who fear governments will use the same policy to silence dissenting voices.

The Brazilian government has requested an injunction to stop Twitter users from alerting drivers to police road blocks, speed traps and drunk-driving checkpoints.

Free-speech groups say it appears to be the first use of Twitter’s controversial new censorship policy.

Twitter unveiled plans last month that would allow governments to censor Tweets, making ‘illegal’ Tweets completely invisible in their native countries.

The move sparked alarm among free-speech activists, and Twitter has been closely watched to see which countries will use the facility to ‘silence’ people within their country.

Previously, Tweets worked on a global level – if someone Tweeted in one country, it was visible everywhere.

‘As far as we know this is the first time that a country has attempted to take Twitter up on their country-by-country take down,’ said Eva Galperin of the San Francisco-based Electronic Frontier Foundation said.

Galperin, who described the foundation as ‘a digital liberties organization,’ predicted other world governments will be taking similar opportunities to censor Twitter traffic.

‘Twitter has given these countries the tool and now Brazil has chosen to use it,’ she said.

‘One of our core values as a company is to defend and respect each user’s voice,’ Twitter wrote in a blog post when it unveiled the changes.

‘We try to keep content up wherever and whenever we can, and we will be transparent with users when we can’t. The tweets must continue to flow.’

Carlos Eduardo Rodrigues Alves, a spokesman for the federal prosecutor’s office, said the injunction request was filed Monday.

He said a judge was expected to announce in the next few days whether he will issue the order against Twitter users.

The attorney general’s office said in a statement that tweeted alerts about police operations jeopardize efforts to reduce traffic accidents and curb auto thefts and the transportation of drugs and weapons.

According to the statement, traffic accidents throughout Brazil kill 55,000 people each year and cost the country 24.6 billion reals, or about $14.3 billion.

If the judge rules in favor of the injunction, anyone who violates it could be hit with a daily fine of 500,000 reals ($291,000), the statement said.

San Francisco-based Twitter Inc. said in an email that it had ‘nothing to share on this issue.’

Under Twitter’s new policy, unveiled last month, a tweet breaking a law in one country can be taken down there at a government’s request.

But it adds that censored tweets will still be seen elsewhere.

Twitter has said it will post a censorship notice whenever a tweet is removed and will post the removal requests it receives.

It said it has no plans to remove tweets unless it receives a request from government officials, companies or another outside party that believes the message is illegal.

Argentina’s Globant first pick for new program to help “mentees” make a global vision possible

By Patrick Haller

Martin Migoya: "It is like Sustainability 3.0."

The Endeavor High-Impact Entrepreneur program has been called “the best anti-poverty program of all” by New York Times columnist Thomas Friedman.  Endeavor was created 14 years ago as a mentoring program for small to medium-size companies from emerging markets that, like many Latin American outsourcing companies, show potential to grow into big businesses.

A candidate for the program will typically have been operating for three to five years, and be worth between $3,000,000 and $5,000,000. Seven years ago, Endeavor decided that Argentina-based software developer Globant fit the profile perfectly.

The company has now become the first in Endeavor’s portfolio to benefit from the newly launched Endeavor Catalyst program, a passive investment vehicle that has added $2,000,000 to Globant’s current funding round of $13,000,000.

Martin Migoya, Globant’s CEO and co-founder, says the Endeavor program has been important to his company’s growth, especially the access it has given them to international advisors. “I remember particular places where we had doubts of what direction to take and had access to people to give us advice and navigate through the process,” Migoya says. “They also provided us with the global vision and reinforced that it was possible. And we started to believe it was possible.” Other benefits of the program included introduction to MBA candidates from MIT and Harvard, opening offices in the US, Brazil, and Uruguay, and the chance to inspire other entrepreneurs to create global companies.

Last year Globant received three awards from Endeavor and was recognized as the top Endeavor entrepreneur. “We are changing the lives and careers of thousands of people,” Migoya says.

Catalysts for Change

In recent years a number of venture capitalists from Silicon Valley have joined Endeavor’s board and instructed the program’s leadership to devise a way to leverage its role with helping their “mentee” companies grow. Up until that point, they relied on generous volunteer “give-back,” which has helped to sustain the program, along with private donations. “We struggled with if we should take an equity stake,” says David Wachtel, Endeavor SVP of marketing & communications, “but we did not want to ‘choose among the children.’”

After much thought and legal consultation, Endeavor Catalyst was born. This non-profit platform allows Endeavor to invest donor money in emerging market companies, based on them meeting certain benchmarks. The first round of funding for Catalyst was raised over that last two months, and Globant was the first company to fulfill the criteria.

“For us, this round means much more than just the $2,000,000,” Migoya says. “It is a symbolic act that shows the reinforced trust that Endeavor puts in Globant; trust that was first shown in 2005 when they selected us as Endeavor Entrepreneurs. That was a key milestone in our history, since they enabled us to learn from some of the most talented and experienced professionals in the world.”

Regenerating Sustainability

Migoya says that the new money will be used to keep growing Globant as it expands to other cities and countries in LatAm and the US. The company will soon be opening an office in Austin, Texas, and two more in Argentina.

When the investment pays off, all of the earnings will go back to Endeavor to allow Catalyst to regenerate and make new investments. The fund currently has commitments of $10,000,000 with a goal to raise $20,000,000 by the end of year, but the long-term goal is to ensure that Catalyst will be self-sustaining, according to Wachtel.

“Whenever the money returns it will keep helping Endeavor and other entrepreneurs; it is like Sustainability 3.0. They invest in our company and the return of that investment will continue financing Endeavor programs,” says Migoya. “We are committed to Endeavor, and anything we can do we will do it. We don’t have any contract with them. Our heart is with them.”

One way that Globers, as staff of Globant are called, are already helping is by acting as endeavor mentors in Chile, Argentina, Uruguay, and other locations. “It is not Globant,” Migoya stated, “it is the entrepreneurs of Globant. Individuals. Endeavor doesn’t select companies, it selects entrepreneurs.”

Harvard research finds that systemic problems, including politics, raise doubts about the country’s global competitiveness

By Luke Bujarski

A controversial new study on America’s global competitiveness entitled “Prosperity at Risk” suggests there will be no reversal of offshore outsourcing trends – at least for now. Harvard University surveyed 10,000 of its recent and seasoned graduates to get a better sense of how America stands up to the competition. Results are mixed, but the main takeaway is that executives continue to think globally when it comes to locating professional services, manufacturing. and R&D. And while lower wages remain a major driver to go offshore, broader systemic problems with the US economic and political system were reported as damaging America’s long-term competitiveness.

America’s “jobless recovery” continues to put the outsourcing industry into question as more and more companies decide to go offshore. This is the underlying tone of Harvard’s revealing survey results on American competitiveness. The study suggests that the US continues to fall behind on foundational factors like the availability of skilled labor, logistics infrastructure, taxation, K-12 education, and most notably, on effectiveness of the political system. The quality of the university system, context for entrepreneurship, and sophistication of firm management were among the categories where a greater number of respondents saw the US pulling ahead.

A deeper interpretation of these results suggests that the US continues to retain its historic role as a global hub for innovation, new company formation, and as a home base for global enterprises. However, doubts about the underlying political and economic support structure put into question how long the US will remain on top of the global corporate food chain.

Emerging Economies Pulling Ahead

Harvard’s competitiveness guru Michael Porter defines the term as “the extent to which firms operating in the US are able to compete successfully in the global economy while supporting high and rising living standards for Americans.” With the European debt crisis it comes as no surprise that the overall business environment in the US performed well compared to other advanced economies. What’s more telling is how survey respondents felt about the overall business climate in the US compared to emerging economies. The “United States is competing with virtually the entire world to host business activities,” explained Porter in his report. Going forward, as infrastructure and talent pools strengthen in the developing world, the competition will likely intensify.

Back-Office Support High on Decision Makers’ Lists

Survey results underscored the rapid growth that we’ve seen in offshore back-office support services over the last five years. Overall sentiment for “onshoring” or “reshoring” of manufacturing and customer-service support functions seems to sway more favorably for the US, but the majority of respondents still see offshoring as a more probable option. Likewise, 42 percent of decisions to potentially move activities outside the US involved R&D and engineering services. These results clear any doubt that only lower-skilled activities are at risk of being offshored.

Costs Drive Decisions, Other Factors Sway Them

Cost of labor was found to be the single leading reason for moving existing activities out of the US. Rapid local market growth and the desire to be closer to customers also suggest two trends: First, offshore operations including back-office support double as platforms to expand business growth into developing markets. Second, it suggests a trend that global enterprises are decentralizing business functions and are adopting local product and service delivery models. Lower tax rates and attractive relocation incentives also show that developing markets are hungry for business and have gone to great lengths to court global investors.

Co-location and IP Security Still Favor the US

Survey results suggest that decision makers continue to battle with political corruption and threats to intellectual property in developing economies. And while better access to skilled labor was high on the list of reasons to remain in the US, the importance of staying close to customers and other company operations show that geography matters when it comes to execution of services and delivery of product to market.

Source: Bloomberg Business Week

Chilean consumer prices rose 0.1 percent in January from December, leaving the annual inflation rate above the target range for a second straight month, the National Statistics Institute said.

Prices climbed 4.2 percent from a year earlier and monthly core inflation, which excludes fuel and produce, was 0.1 percent, the institute said in a report today. The median estimate of 16 analysts was for prices to rise 0.2 percent in the month.

With annual inflation above the central bank’s 2 percent to 4 percent target, policy makers probably will pause before repeating last month’s surprise quarter-point cut in its benchmark interest rate, economist Cristobal Doberti said by phone. Since the Jan. 12 rate reduction, data show unemployment tumbled and economic growth accelerated in December.

“Given the recent economic activity data we’ve seen locally and abroad together with the increase in salaries, we expect the bank to hold the rate in the next meeting,” Doberti, an economist at Bice Inversiones in Santiago, said today. Rate cuts won’t come until “the economy shows more signs of contagion from abroad than what we’re seeing now.”

The central bank will leave its key interest rate unchanged at 5 percent this month, according to the median forecast of 56 traders and investors surveyed by the bank on Feb. 7. The bank will reduce the rate to 4.75 percent in May and 4.5 percent in August, according to the survey published today.

Transport vs Electricity

Transportation costs climbed 1 percent in January, led by a 2.1 percent gain in motor fuel. The cost of electricity fell 5.1 percent over the same period as new price fixings came into force, the statistics institute said.

The cost of beef, which was one of the drivers of faster- than-forecast price increases in December, fell 2.3 percent as supermarkets found new suppliers. An outbreak of foot-and-mouth disease in Paraguay, which provides 63 percent of Chile’s beef, had restricted supply in previous months.

The current drought in Chile won’t drive up prices of produce or electricity, the ministers of agriculture and public works, Luis Mayol and Laurence Golborne, said today.

“Fruit exporters will be selling more to the domestic market” as they divert sub-standard produce from exports, Mayol told reporters in Santiago. “If anything, it will lead to a drop in prices.”

Rate Swaps

Chile’s one-year interest rate swap, which reflects traders’ views of average borrowing costs, rose 1 basis point, or 0.01 percentage point, to 4.74 percent at 11:54 a.m. in Santiago from yesterday. The swaps market may not react to the slower-than-forecast price increases, according to Alex Pigatto, a trader at Nomura Securities Inc. in New York.

“The figure itself will not be enough to bring relief in the interest-rate swaps and breakeven curve,” he wrote in a note to clients.

Policy makers last month reduced their benchmark interest rate for the first time in more than two years. Only four of 20 analysts surveyed by Bloomberg had forecast the quarter-point reduction to 5 percent.

Since then, economic reports show that unemployment fell to 6.6 percent in the last three months of 2011 from 7.1 percent the month earlier, while the economy expanded 1.3 percent in December from November, the fastest pace in 17 months. Wages rose 1.2 percent in December from the previous month.

The Chilean peso strengthened 0.3 percent to 477.05 per U.S. dollar at 12:25 p.m. in Santiago. The median forecast of 57 traders and investors in the survey was that the peso would reach 480 in seven days and 485 per dollar in three months.

By Dan Berthiaume

Everyone seems to have at least one story about a nightmare experience dealing with telephone customer service. The fact that many call center providers are located in countries where language and customs are significantly different from US norms only exacerbates the problem. Some experts recommend that companies outsourcing call center functions attack the problem of poor customer service by focusing more attention on serving the needs of customers. But is that always the best strategy?

Michael D. Brown, a corporate consultant and trainer who specializes in developing professional brands, has a slightly different recommendation. “Step back and take care of the employee first,” Brown says. “They will then take care of the customer. Make the employee number one and the customer number two.”

Brown realizes that his advice to place the frontline employee before the customer amounts to heresy in the eyes of many customer service gurus, but he hastens to explain that this is actually the best way to ensure a top-quality customer experience. “When you look at unfavorable dealings with the end user, there is a rush to judgment to put a band-aid on the situation,” says Brown.

Instead of approaching each individual customer complaint as a separate issue necessitating an on-the-spot fix, Brown says companies should make more effort to understand how the frontline call center employees actually spend their day. “Take a side-by-side walk with your frontline employees,” says Brown. “See what a typical day is like; see what types of calls they’re getting and where the roadblocks are. Then ask, ‘Do I have the right processes in place?’”

Brown says real-time communication technologies such as Skype and FaceTime allow US companies to virtually perform side-by-side walking with call center employees who may be working from distant offshore locations.

After performing side-by-side walking (either in-person or virtual), Brown says companies should then go about “smart tasking” outsourced call center employees. “What do the employees do besides just answering calls?” asks Brown. “To deliver a world-class call center customer experience, look at the sequence of tasks employees perform and see if you can make any changes to enable them to deliver a better customer experience.”

Let Frontline Employees Make it Right

Following smart tasking, Brown says companies should provide outsourced call center employees with what he calls “Make it Right” power, or the ability to solve certain problems on their own. “Often the person answering the call can do nothing other than pass on the call to someone else when there is a problem,” says Brown. The customer becomes even more infuriated when they are passed to person after person.”

Instead, Brown says the employee manual should provide frontline employees specific instructions on how to resolve common issues and that the second person they speak to should have the authority to handle all problems.

“Most customer problems are not rocket science,” comments Brown. “The frontline employees hear the same issues day in, day out. Ask them what they are doing day to day and look for organically developed solutions.” Brown says companies should then compile these solutions into a continually growing “What-If Arsenal” of resolutions to common problems that is built from the bottom-up, guaranteeing employee buy-in.

Brown says is it also important for companies engaged in call center BPO to encourage “bubble up innovation,” or innovative ideas that come from frontline employee brainstorming sessions. “Often we don’t have the answers, but need innovation bubbling up from the bottom,” Brown says. “It gives the frontline employees ownership in the workplace.”

Clued In

Brown says all the steps he recommends to achieve world-class customer service in an outsourced call center will not succeed if everyone involved is not relentlessly focused on the same goal. “Does everyone understand the vision, or are people in different silos?” he asks.

Of course, companies also need to simply follow through and make world-class customer service happen at their outsourced call centers. This includes remaining open to making changes in response to changing needs of customers. “Keep it fresh,” says Brown. “Things will change. Look at what happened to Borders. To take call center customer service to the next level, you need to say enough call centers are giving the industry a bad name, it’s time for us to rise to the top.”

An essential part of making it happen is ensuring frontline employees fully understand what customers expect from products and services. “Too often the call center employees haven’t a clue,” he states. “They must understand how things are made, not necessarily from a technical standpoint but in terms of the promised experience. Often the call center employees don’t know what has been promised to the customer.”

By Jerry Durant

Everybody wants ROI from their outsourcing projects. Many (on both the buy and the sell side) claim it. But relatively few have the knowledge or background to calculate it correctly. This not only makes it harder to make good decisions, but saps the credibility of whoever is doing the calculations.

Far too many operations and procurement professionals try to calculate ROI without a sufficient understanding of it.

They also try to convert subjective value measures to quantifiable numbers and fail to relate ROI to business objectives that might not relate to money, but to harder-to-measure benefits such as innovation or the delivery of new products and services to customers.

First, one must understand what ROI is not. Consider a typical outsourcing decision, such as whether to outsource your e-mail infrastructure. Just because Option A costs less than Option B, while delivering similar service levels, does not demonstrate ROI. It just means you have lowered the cost of doing business – the cost of operations. You cannot claim ROI because you have not done anything to generate more revenue.

ROI is the result of the Gain from Investment less the Cost of the Investment all divided by the Cost of Investment. You achieve ROI when, and only when, it supports the operation of a profit center, rather than a support center where any savings are likely to be consumed by other areas.

So where do we stand?

1. Distinguish between investment and operating costs. An investment will produce a yield, in the form of an improvement in a profit-making operation, while operating costs allow you to keep the lights on for less than you otherwise would.

2. Know your objective. If it’s labor arbitrage then a simple comparison will reveal the spread between domestic and foreign labor costs.

3. Ensure ‘like’ comparisons. Are the processes you are comparing both fully optimized? All too often, the function you’re considering for outsourcing is not in best operating form. If it’s a simple “lift-and-drop” situation then cost comparisons would be OK, but if the provider is making changes you need to factor that in. So facilitate process improvement/optimization at some point in the relationship, whether pre- or post-engagement, measure the results and take them into account

4. Take into account all costs. It’s not simply a matter of contract cost vs. prior in-house costs. Take into account other costs that must be amortized over the duration of the contract, such as to transition the function to the provider. Remember new, in-house costs such as for a project management office (PMO) that oversees the outsourced relationship, as well as the need to monitor the quality of the outsourced work.

5. Make sure that you have systems in place that can track operating costs against the estimates you used to make your decision. In some ways this is a bold step because you may wind up finding flaws in your decision making. Don’t use this as an opportunity to find fault, but to improve your estimation and sourcing management skills.

6. Factor in whether you’re getting everything from your service provider you were getting in-house, such as a commitment to environmental efforts or working conditions. This is another way of saying “compare apples to apples,” but in an area that can cause big public embarrassment if you ignore it.

Bottom line: When calculating ROI keep in mind the difference between reducing operating costs and actually improving in business. And, when you’re comparing costs and benefits, make sure you’re doing a fair comparison that takes into account both everything you’re spending and everything you’re getting (or not getting.) The health of your organization – and of your own credibility – depends on it.

Jerry Durant is founder and chairman emeritus of The International Institute for Outsource Management, a trade organization dedicated to the assessment, development, and guidance of outsource service providers in the ITO, BPO, call center, and KPO domain areas.

Choucair: People said software testing is something users do.

Testing firm’s founder overcomes skeptics and machismo with a ‘humanist’ operating  philosophy

By James Bargent

When Maria Clara Choucair founded Choucair Testing in 1999, it was the first software testing company in Colombia and one of only a handful in Latin America. The company started with a workforce of one – Maria Clara Choucair. Thirteen years later, Choucair Testing has 450 employees, branches in Medellin and Bogota and Lima, Peru, and a host of big-name clients.

Maria Clara Choucair first encountered software testing when she worked on a joint venture between software developers Ecosoft and Intuit. “What I learned from the experience,” she says, “is that we Latin Americans are very intelligent but we’re not very methodical.”

When Choucair – who is #10 on the 2011 Nearshore Americas Power 50 Ranking – decided to set up her own company in Colombia, she was met by widespread skepticism. “Testing here didn’t exist,” she says, “they told me I was crazy, they said there was no use for that because the users are the ones who test.”

What gave her the confidence to challenge that prevailing wisdom was her strong belief in the benefits of software testing. “The product was very good for society,” she says.

That type of thinking characterizes Choucair’s approach to both life and business. Choucair Testing, she says, is informed by a “humanist philosophy with ethical roots,” something that has played a key role in the development of the business by establishing trust and confidence with clients. “It’s a business philosophy. I always ask this question: What kind of friend would you like to have? Because for us, a business relationship is like a friendship.”

Despite the global financial turmoil of the last few years, Choucair has continued to grow steadily and has recently expanded into Peru.

Laborwise, Start from Zero

As pioneers of software testing in Colombia, Choucair Testing had to start from zero in developing its human capital; they not only had to fully train their workers, they also had to instill the concept of testing. Choucair’s answer to this was to design technical and personal profiles outlining exactly what level of training and personal characteristics she was looking for in any given role. From there it was a matter of the right training. “We have a method,” she says, “training and tools that help people change their state of mind.”

Today, both software testing and the IT sector in general have grown exponentially in Medellin and in Colombia, and Choucair operates in a much more competitive environment. The Colombian education system has not kept pace with business growth, the founder says, so the company now faces the dual challenges of both training and keeping the best talent. Choucair herself, however, remains philosophical. “We teach them and they go,” she says. “But I think it has also made us more competitive – it is not a bad thing”

Attrition rates are high, but Choucair says “lower than the market average.” She puts this down to creating a working environment where people enjoy their work, have good relationships with their co-workers and management, and see the potential for personal development in the company. The firm tries to achieve this through a range of strategies, from arranging education and training to perks such as meals out. They are also developing personal “projection maps,” plotting an individual’s potential for career progress.

John Jairo Gomez helps them act "more like a corporation."

Intelligence Over Macho

In late 2009, Choucair handed over day-to-day management and business strategizing to her long-time associate and former Choucair customer John Jairo Gomez, allowing her to concentrate on what she loves – software testing. Gomez has brought in a more refined, formal, and disciplined management style, which they both agree was necessary. “Because of the company’s growth,” Gomez says, “we need to behave more like a corporation.”

As a woman, Choucair’s success stands out even more in a country renowned for its culture of machismo. However, sexism has not been an issue for her. “It helps that I work in [a] technical [industry],” she says, “because in a technical market they appreciate your intelligence, your manners, and your way of working.”

The Choucair labor force is evenly split between men and women, while the management team is all women apart from Gomez. According to Choucair, this is not by design. “The only thing I care about is that they are honorable and they do a good job,” she says.

Despite the global financial turmoil of the last few years, Choucair has continued to grow steadily and has recently expanded into Peru. “[Doing business in Peru] is like a university,” Gomez says. “We have learned a lot and we have had a lot of fun doing that job … [it is] a different culture, a different way to do business”

Choucair says her attention, however, remain focused on her home city of Medellin and the IT sector’s ability to help realize the city’s potential. “When I see the comunas [the poverty stricken hillside neighborhoods of Medellin],” she says, “it is my dream to get those people out of there, because we have a lot of opportunities [in IT].”

Choucair Testing currently works in partnership with local educational institutions to help people in the comunas access those opportunities. Even so, Choucair says, more needs to be done. “The universities and the schools have to be faster in capturing these people without resources because this is an opportunity to help get them out of that hole.”

Source: Herald Tribune

Brazilians tired of answering their boss’s after-hours emails may be able to charge overtime based on a law businesses see hurting competitiveness in Latin America’s largest economy.

Using portable communications devices is equivalent to working in the office, according to legislation signed by President Dilma Rousseff last month.

The law is one more obstacle companies say they face in Brazil, where regulations mandating everything from employer- provided breakfasts to union contributions are a daily drag on efficiency bemoaned for decades as the “Custo Brasil,” or Brazil Cost.

It takes less time to set up a business in Nigeria or Mongolia than it does Brazil, according to the World Bank, which ranked it No. 126 out of 183 countries in its 2012 competitiveness study.

“It’s very worrying,” Emerson Casali, head of labor relations at the National Industry Confederation, said in a phone interview from Brasilia. “If enforced, it could have an enormous impact, a large loss of productivity.”

The law coincides with a growing concern in countries ranging from the U.S. to Germany over how to set boundaries between work and leisure in an era of virtual offices and the need for 24/7 communication. Among the companies taking steps to spare workers after-hours e-mails is Volkswagen.

The law has elicited concern because Brazilian law and judges tend to favor employees in disputes related to overtime pay, said Bruno Checchia, a Brasilia-based labor attorney for Pinheiro Neto Advogados. Already the country’s top labor court has agreed to study the law and decide how to enforce it. The Superior Labor Tribunal said it will also consider whether being on call with a mobile device in hand is considered work and subject to compensation.

“The law says working remotely is like clocking in,” Joao Oreste Dalazen, head of the court, said in a statement.

Employers are bracing for trouble. Checchia said he has fielded several calls from clients worried the law could drive their personnel costs up. That would compound the woes of Brazilian manufacturers already struggling with a strong local currency and declining global demand.

While it is too early to know if the law will have any impact on share prices, it “creates uncertainty and could impact business activity,” Joao Mauricio Rosal, chief economist with Raymond James Brasil, said by phone from Sao Paulo.

Employers could try to offset increased overtime pay by freezing or reducing salary increases, Rosal added.

Unions say the law is essential to prevent work from further encroaching on personal time.

“With the advance of technology it’s become a necessity,” Manoel Melo, secretary for labor relations at Central Unica dos Trabalhadores, the nation’s largest union confederation, said by phone from Recife. “This issue is being discussed the world over and Brazil has taken the forefront.”

A survey by Washington-based Wakefield Research for Motorola Mobility Holdings last year showed almost half of Americans say they’ve been woken at night by a call, text message or email from work.

In the United States, where managers and professionals often aren’t paid for overtime, a growing number of companies are reviewing their policies on the use of smart phones, said Eric Pelton, a partner at Kienbaum, Opperwall, Hardy and Pelton.

“There’s a lot of talk right now on how to deal with this issue,” Pelton said by phone from Birmingham, Mich. “If managers handle it smartly, they’ll avoid lawsuits.”

Companies such as Verizon Communications Inc, T-Mobile USA Inc. and Stanley Black & Decker Inc. have already been sued for unpaid overtime related to smart phone use.

“This is likely only the beginning,” Spencer Silverglate, a lawyer at Clarke Silverglate in Miami, said in a telephone interview.

Source: Bloomberg

Colombia’s peso fell for the first time in a week after the central bank said it will resume dollar purchases in a bid to ease a rally in the local currency and shore up exports.

Banco de la Republica will buy a minimum of $20 million a day in auctions for at least three months starting today in a bid to boost international reserves, according to a statement issued Feb. 3 after markets closed. The peso fell 0.2 percent to 1,787.30 per dollar from 1,784.50 on Feb. 3.

The peso has advanced 8.5 percent this year and touched a five-month high on Feb. 3 as central bankers raised thebenchmark interest rate, luring investment to the country’s fixed-income market, to cool growth and keep inflation in check. While the three-month dollar buying program may slow the peso’s gains, it’s unlikely to reverse the currency’s rally, said Juan Nicolas Garcia, a currency trader at HSBC Holdings Plc’s Colombia unit.

“The central bank’s pain threshold seems to be around 1,780,” Garcia said. The peso may weaken toward 1,800 per dollar before reversing course because “increased appetite for risk, the carry trade and Colombia’s solid growth” will fuel demand for pesos, he said.

The carry trade refers to the practice in which investors borrow funds in a country with lower borrowing costs and buy assets where interest rates are higher. Colombia’s benchmark rate is 5 percent, compared with near zero in the U.S.

Regional Efforts

Policy makers in Latin America are stepping up efforts to curb currency gains. Brazil’s central bank bought dollars in the currency forwards market on Feb. 3 for the first time since July to stem an 8.3 percent rally in the real this year.

While developing nations from Brazil to the Philippineshave been cutting borrowing costs to shore up growth amidEurope’s debt crisis, the Colombian central bank has raised rates to prevent the economy from overheating. Colombia’s gross domestic product grew 7.7 percent in the third quarter, the fastest since 2006.

“The pace of appreciation had been picking up and the central bankers were obviously ready to do something about it when that happened,” said Daniel Lozano, an analyst at Serfinco brokerage in Bogota.

Banco de la Republica said in a statement today that it’s scrapping its plan to auction dollar options whenever the peso’s 20-day moving average changes by more than 4 percent.

Unsustainable

Policy makers may buy more than $20 million daily or adopt additional currency measures should the peso strengthen beyond 1,770 per dollar, HSBC’s Garcia predicts.

Central bank President Jose Dario Uribe said in a Feb. 5 interview with newspaper El Tiempo that without recent increases in the nation’s benchmark rate, the pace of economic growth would be unsustainable.

Agriculture Minister Juan Camilo Restrepo said Jan. 31 that the rate increase will attract more foreign portfolio investment to Colombia, fueling currency gains and hurting farm exports. He called for dollar purchases to offset the trend, a sentiment echoed by flower and banana exporters.

Luis Carlos Villegas, the head of Colombia’s biggest business association, known as ANDI, criticized the central bank as being “excessively prudent” by raising rates.

Policy makers said in a statement following the rate increase that bank lending is growing, housing prices are at record highs and investors’ inflation expectations have risen.

Foreign Investment

The peso is also being buoyed by foreign direct investment in crude, mining and energy projects. Mining Minister Mauricio Cardenas said Jan. 26 that Colombia will receive about $10 billion in foreign direct investment in these industries this year, similar to 2011 levels.

The central bank ended a yearlong daily dollar purchase program on Sept. 30 after Europe’s debt crisis led investors to dump emerging market assets. No dollar options to control volatility were auctioned since Banco de la Republica announced Oct. 28 it would sell them.

The yield on the government’s 10 percent peso bonds due July 2024 rose one basis point, or 0.01 percentage point, to 7.37 percent, according to the central bank. The bond’s price fell 0.145 centavo to 120.847 centavos per peso.

Earlier today the yield fell to 7.35 percent after a Feb. 4 government report showed annual inflation slowed to 3.54 percent in January from 3.73 percent the previous month. Policy makers target inflation between 2 percent and 4 percent this year.

The central bank will probably keep raising interest rates to keep inflation in check, Barclays Capital Inc. Latin America analysts Alejandro Arreaza and Alejandro Grisanti wrote in a report today.

“Despite this benign inflation print, we still expect Banrep to continue with its monetary tightening,” Arreaza and Grisanti wrote. “We expect inflation to accelerate in coming months, driven by higher food prices and the demand pressures that are likely to start to push up core inflation.”