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Revue de presse
Thiago de Aragão


October in Latin America
par Thiago DE ARAGÃO (IRIS, 5 novembre 2008)



The turbulences of the US financial crisis have had a mixed impact on Latin America. While some countries have seen medium-scale impact, others are expecting a stronger wave. The meeting of ministers and central bank governors, on 27 October, was a good sign by the Brazilian government.

Overall, we have seen a proactive stance by Brazil’s foreign office in order to play a leadership role in the region. The meeting was based on an exchange of information about how each nation will deal with the financial crisis and what the impact will be, and Brazil did its job by consolidating important information during a well conducted meeting.

The robustness with which Brazil has been dealing with the crisis has made the country into a model to be followed. Naturally, the confidence crisis which is always hanging over Latin America visibly moves away when Brazil’s attitude to fight the crisis is shared with other countries in the region.

Argentina, in turn, is going in an opposite direction. While other countries in the region run away from the blast, Argentina walks imperiously towards the flames. The nationalization of pension funds has not been welcome by the international community. Immediately after the announcement, the Uruguayan and Chilean governments made it clear that they wouldn’t take the same measure. Chile is more independent – both politically and economically. Uruguay, in turn, has always been politically and economically linked to Argentina, and Tabaré Vázquez’s statement that pension plans won’t change shows how afraid he is that developments in Argentina could impact his country.

Besides this announcement, sections within the Casa Rosada are firmly in favour of a foreign debt default. The recent payment announcement by Cristina Kirchner was vital to ensure a minimum of confidence in Argentina. The possibility of a new default, even if it does not materialize, will have a negative reflection in global financial markets.

In Chile, Michelle Bachelet’s performance throughout the crisis will be key for the governing Concertación coalition to stay in power. In Sunday’s municipal elections, centre-right coalition Renovación Nacional obtained a considerable win, while dissatisfaction with the Bachelet administration makes ex-president Ricardo Lagos consider a comeback to rebuild the former solid Concertación. Besides the Renovación Nacional, the big winner was opposition politician Sebastian Pinera, who is currently leading all opinion polls and has become a real threat to Concertación’s grip on power in the 2009 presidential elections.

While Bachelet sees her approval rates sink lower at each poll, her Colombian counterpart is starting to experience the downside of success. With sustained high approval rates, Álvaro Uribe is dealing with the efforts of his allies (and not necessarily his own) for a third term to be approved. A bill authorizing the election didn’t pass in Congress. It was not exactly a big loss for Uribe, but it shows that a much bigger effort will be needed for the approval. In the current scenario, general Manuel Santos is Uribe’s preferred option to succeed him. As far as popularity is concerned, the general loses to Uribe only. His successful campaign against the FARC is his best argument.

Besides speculation on a possible third term or on general Santos’s campaign, the Colombian government is now looking forward to the US elections. Victory by Barack Obama will entail a thorough review of the free trade agreement between the two countries. Democrats accuse the Colombian government of violating human rights and labour regulations. Venezuela, just like Argentina, has proven very vulnerable to the international crisis. The government’s explicit dependence on oil exports means that the current barrel price is dramatically impacting the country’s 2009 budget. The consequence will be immediate : Chávez will adopt a more radical discourse in November’s municipal elections. The vote will be made into a referendum to test his leadership and approval rates. If he wins, Chávez will use the fear of a severe financial crisis to present a new bill for unlimited re-election.

It is believed that, if the blame is continuously placed on the US, the people will give carte blanche for Chávez to re-elect indefinitely. The opposition, still very disorganized and weakened, bets all its chips on a good showing in the municipal elections to prevent Chávez from coming up with a new referendum. The fact that more than 200 opposition candidates have been prevented from running shows how low the opposition’s morale is.

While Venezuela fears the global financial crisis, Bolivia has no reason for such feeling. The economic situation in Bolivia is so poor that it cannot be threatened by any crisis. Far beyond economic threats, political threats remain the biggest risk in the country. President Evo Morales obtained a good win with the approval of a referendum on the new constitution. With massive population support, Morales mounted a stakeout in a camp outside the Parliament building while he waited for approval. Morales is used to this kind of demonstration, and his presence provided for a very intense popular movement.

More than a win in Parliament, Morales got what looked unlikely not long ago : splitting the opposition. Always solid and articulate, the Bolivian opposition found itself in confrontation when some members voted in favour of the referendum. They voted on the grounds that the Constitution should be rejected when the moment comes for the people to decide. However, for other opposition members, Morales should have been handed a defeat in Parliament, which could then reduce the President’s support among the people. One can identify a tendency for the Movement towards Socialism to strengthen and for the opposition to split.

The Bolivian president may be winning people’s support, but Peruvian President Alan García is still losing ground. The crisis that resulted in an en masse resignation of the highest members of his cabinet took his disapproval rates to almost 72%. The reason were bribes that some government officials took to fraud oil export tenders.

Along with the financial meltdown, Peru may see a small drop in its growth forecasts, formerly at 9%. The free trade agreement with the US aims mostly at infrastructure works in the country, and its continuation may delay certain economic developments which would sustain a high growth forecast in 2009.

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