Latin America in 2014

It has taken 50 years for a commercial flight from the United States to have official permission to land with American passengers in Cuba, but recently a small plane from Key West has done just that. Despite it being a small plane with less than a dozen passengers, it is representative of a thaw between US-Cuban relations mirroring President Obama’s handshake with Raul Castro a few weeks earlier. In the New Year, 2014 might be the year where Latin America officially takes a large step out of the past, into its new more prosperous and more complicated future.

While the left-right divide remains a topic of heated debate within an economically weak Venezuela and other left leaning nations in the region, the upcoming FIFA World Cup may become a symbol of Latin America as a new economic and policy power player in the global community. The last few years in the region have created a few economic winners in Latin America, with Brazil, Mexico and Colombia receiving a great deal of international investment and attention. While the international economy took a big hit over the last few years, countries like Brazil, Mexico and Colombia have been able to not only come out of the worst years of the global recession, but have been able to stay afloat and stable where their American and European counterparts are still immersed in anemic economy policy debates.

The real test in the region is whether or not the recent economic gains can be sustained and built upon in the future. There is a real fear that errors in policy development will be a return to the past where boom and bust cycles dominated the economic reality of Latin America. These fears are not unfounded, and with the FIFA 2014 tournament making way to the Olympic Games soon after in Brazil, Brazil’s citizens have been protesting corruption and a misallocation of funds with revenue going towards the Olympics and corrupt officials as opposed to being reinvested back into the community. With gains comes expectations, and Brazilian officials from all political stripes now understand that a misallocation of policy is being observed by the electorate themselves. International investment and participation in Brazilian society may also be checked in the long run as the rights and democratic values of Brazilians and all Latin Americans may be increasingly ensured as international companies and organisations have to not just get their certifications from the government, but also from strong public opinion in the region as well. Actions like the IOC criticizing the Brazilian government for not keeping on schedule with the Olympic Games, when Brazil’s citizens are the ones protesting the other side of government spending places international organisations and companies in direct contention with local democracy. This forces Latin American governments to choose between investment benefits to its foreign investors, and between local democracy itself. Foreign investors who find new long term opportunities in the region should be weary not to place themselves at the spearhead of investments that pushes local governments against their citizens. The new citizens have a new measure of clout and are not afraid of challenging local or international officials, or be arrested in the process of establishing themselves in democratic society.

Conflicts that have plagued the region in the past may receive a new policy outlook in the near future. Narcotics policy had received many policy alternatives in the past that now may come to light with the legalization of marijuana in the U.S. There has been some talk about defusing and devaluating the drug trade in Mexico and in Latin America by legalizing narcotics and saving the lives of many citizens and police officials by removing the value from the trade. While fighting cartels have had success in Colombia, the drug trade has moved to take a violent place in Mexican society and has driven up the costs and value of drugs throughout North and South America. Treating addiction in Mexico and Latin America would be a lot easier than fighting cartels, and there is little sympathy for giving up one’s young adults in a drug war to prevent addiction issues across the border. With the Mexican and US economies growing, any impediment to development and investment will likely be addressed further in 2014.

While several other issues will highlight the region in 2014, there will also be time to debate future policies in the region. We look forward to the discussions this year. Feliz Año Nuevo 2014!