Latin America Risk Report - 26 December 2018
How Latin America's top stories in 2018 will impact 2019
In this issue:
Latin America’s biggest stories of 2018
Colombia’s military takes down Guacho
For paying subscribers:
Guyana's snap elections and border tensions. Guyana's early Christmas presents were a no-confidence vote and a visit from Venezuela's navy.
Latin America’s biggest stories of 2018 and how they impact 2019
Populist wave hits the region’s two biggest countries. Mexico and Brazil represent over half of Latin America’s population, so no stories were bigger than the election of Lopez Obrador and Bolsonaro to take over each of those countries. Both elections showed significant disillusionment in the traditional political class of each country. Both elections showed the power of a grass roots and social media campaign upending traditional political machines.
Impact on 2019: More important than the left vs right change of direction will be the battle of the individual leaders vs the institutions. Both presidents are going to fight against historical norms, institutional constraints and other branches of government that may try to hold back their more impulsive and radical decisions. While both begin with majority support of the population and strong support in the Congress, neither is likely to keep that during their whole term. Mexico’s and Brazil’s futures will be determined by how these new presidents react to declining poll numbers and attempts to democratically constrain their actions.
Venezuela’s crisis continues. “Venezuela is significantly worse” could have been a top story headline in any of the past ten years, and it’s true again in 2018. Just because the story repeats every year shouldn’t undercut the amount of human suffering that has occurred there. Over a million new refugees have fled the lack of food, high levels of violent crime, and political repression.
Impact on 2019: Venezuela will be officially without a president as of 10 January 2019. That increased lack of legitimacy will make the first quarter of 2019 Maduro’s most difficult stretch in power so far, a serious statement given some of the other tense moments he has already faced. Surviving those first months of the year would demonstrate a consolidated control that makes him harder to push out and life more miserable for the average Venezuelan citizen. While the opposition and foreign governments push for change, Maduro’s biggest threat remains his own civilian and military circles pushing him out in favor of a different Chavista leader.
Argentina’s currency crash. After so much optimism when Mauricio Macri won the presidency in 2015 and a congressional majority in the midterms in 2017, Argentina’s peso crash in 2018 was a major blow to the region’s biggest experiment in rolling back populist government. Instead of a strong post-Kirchner rebound, Macri has spent most of his term including all of 2018 fighting against the long-term financial legacy of his predecessor and a weak global emerging market situation. Analysts credit Macri with swift and decisive action to prevent the fall of Argentina’s peso turning into a complete economic collapse. Voters are less understanding, feeling the effects of a recessionary economy, weak peso and high inflation.
Impact on 2019: While Hxagon still has Macri as the favorite to win reelection in 2019, his job has certainly been made much more difficult by the economic downturn in 2019 and IMF-imposed austerity that has followed. Macri’s biggest saving grace is that his leading opponent, former President Kirchner, remains even more unpopular than he is and faces serious corruption investigations. Though it would seem to be an opening for Argentina’s moderates, the anti-Kircher Peronists and others close to the center of the political spectrum have had a difficult time winning voters.
Migrant caravan. Thousands of migrants from Central America made their way through Mexico to the US border. Trump attempted to portray the caravan as a threat in an effort energize his base of supporters and demand funding for a border wall.
Impact on 2019: Every time Trump is backed into a corner, he uses anti-immigrant rhetoric as one of his key defense mechanisms to deflect attention and keep his supporters excited. The combination of the Mueller investigation in the US and continued deteriorating conditions in Central America is likely to lead to more media attention to Central American migrants in 2019. Unfortunately, more media attention will not lead to productive solutions such as comprehensive immigration reform or a significant aid package that addresses Central America’s key challenges. Instead, it will increase the divide between the US and its neighbors to the south.
Winning a battle, not the war, in Nariño
The Colombian military killed Walter Arizala, alias “Guacho”, in a military operation in southwest Colombia late last week. Guacho was the leader of a drug trafficking group made up of remobilized FARC combatants near the Colombia-Ecuador border. His small group drew attention through multiple high-profile attacks including the kidnapping and killing of three journalists in Ecuador.
The violence in Nariño is complex, with multiple small groups competing over territory and smuggling routes. A recent Human Rights Watch report highlighted the suffering of the local population and recommendations for the government. The death of Guacho will shake up that criminal competition and the military victory is a feather in Duque’s cap to end the year. Knocking out criminal leaders, however, is unlikely to bring greater security to that part of the country.
Reading list
NYT - Mexico’s New President Promised a Revolution. Has It Begun?
The Guardian - Migrants stuck in Tijuana dream of US as they celebrate uncertain Christmas
WSJ - Mexicans, Hit by Murder Wave, Face Long, Often Futile Wait for Justice
InSight Crime - The Funes and Saca Tapes in El Salvador: A Plot Revealed
Reuters - Oil output goes AWOL in Venezuela as soldiers run PDVSA
Washington Post - In Venezuela, Russia pockets key energy assets in exchange for cash bailouts
South China Morning Post - In Latin America, Big Brother China is watching you
NYT - It Doesn’t Matter if Ecuador Can Afford This Dam. China Still Gets Paid.
Bloomberg - License-to-Kill Policing to Get a Trial Run in Rio de Janeiro
Axios - Amid struggling economy, Cuba advances constitutional reform
Happy Boxing Day!
I hope readers had a Feliz Navidad. Do you have topics you want covered by Latin America Risk Report in 2019? Feel free to reply to this email and let me know. Also, please encourage your friends and colleagues to go to https://boz.substack.com and subscribe.