Latin America: Progress and Crisis 2008-2009

This has also been posted in FPA's Year in Review 2008…

Summary: Latin America 2008

Pride has become a mainstay in many ways in Latin America this past year. Colombia especially has achieved great progress in the last year against its major issues fighting drug cartels and kidnapping by making great strides in dismantling the FARC leadership, facing off against political threats from its neighbours and even rescuing Ingrid Betancourt and fellow American hostages in the process. While not completely done with the FARC, Colombia is set to reclaim its position in the international community with recent trade talks with Canada and the United States and having a government with an approval rating that likely has set an international record. While problems still abound in Colombia, economic crisis will likely not tarnish Colombia in 2009.

Venezuela this past year has dominated many headlines, firstly with major oil revenues and its recent losses due to the world economy, a cold peace turning to a possible hot conflict with Colombia, the widening of connections with Iran, OPEC, China and many of its neighbours and Constitutional debates in Venezuela surrounding the indefinite extension of Chavez's mandate. Venezuela has not has so much attention in years, and it is often going to remain in the spotlight as fuel prices tumble and elections give and take from Venezuela's Constitution. Whatever happens, it will get attention indeed.

The Southern Cone has been dominated by Brazil's economic successes, now in limbo with the economic crisis and Argentina's emergence out of being an economic pariah to its efforts to rejoin the international economic community when they are facing the problems that Argentina and Brazil had less than a decade ago. Perhaps Lula and Kirchner can display their wisdom to those in the developed world who never learned from Latin America's past. With nothing to lose, and a crisis that did not start in the South, maybe the North can learn from their southern neighbours on how to manage crisis in an elegant fashion, as well as how to approach dealing with the IMF.

Mexico, while getting little attention in 2008, likely deserved it the most. Factories of large international companies and banks closing due to economic crisis, top officials being sacrificed in a drug war that cost more than 4000 lives and a new President being thrown into the fire when Mexico has some of the worst problems in generations was the legacy of Mexico in 2008. While this drama has received little attention since February 2008 when it mostly began, it will likely be a defining factor of media attention in 2009.

Impact of Global Recession

Latin America, while affected by the latest global recession, is not inexperienced in tightening their belts during economic crisis. The difference between the latest recession however and ones in the past is that Latin America and many of its nations were actually at the pinnacle of exiting the problems of the past and were hit by an economic downturn created by those in the US and Europe who often advised their own governments via the IMF and World Bank and IADB. Many leaders of Latin American states made it clear that the latest problems were not created by them or problems in their own nations, but by the United States, which for better or for worse, for truth or embellishment, is often taken as partly responsible for many problems in Latin America. With the Global Recession, Latin America has fallen off the economic map if you consider the lack of media attention the region has received. No one knows where the money will come from to curb the new debts created in the region, but with processes and institutions in place against inflation and debt, maybe Latin America will pass through this crisis as it often has in the past.

Which Event Deserved More Attention Than it Received

Beyond industry and commercial publications, I believe that the progress of Chile and Brazil economically should have received a lot more attention than it did in the last year before the recession. English language media often focused on the US election, and China and hastened to mention economic progress in Brazil, which could likely tilt the global economic axis away from Asia to a small degree and towards the Southern Cone. Problems in Venezuela dominated much of the media on the region, and trade with Colombia, Peru, Brazil and Argentina's reassertion into the global economy were seldom discussed.

The other major issue that has only recently come to light on CNN, but have been focused upon on FPA's Latin America Blog and Mexico Blog since March 2008 is the multiple crises in Mexico and its War on Drugs. While Mexico is being severely hurt by economic crisis, the closing of large international companies and bank liquidity issues, the loss of 4000 Mexicans this year alone in brutal killings in Mexico's Drug War has dwarfed the number of deaths in Iraq and Afghanistan combined. While it was not an issue until last week outside of Mexico itself, it will likely dominate the headlines in 2009.

A Commonly Held Misconception About Latin America

Often when people think about Latin America they think of one or two known cultures from the region, poverty issues and narcotrafficking. In the region there are a number of states and cultures and societies within each country that differ greatly than those that are commonly known by those from outside of Latin America. While there are many positives and negatives in each region, each country is distinct in their own regard. While there are many similarities, the only benefits commercially, academically and socially are those that are discovered in smaller communities in the region, and not by assuming that all of Latin America follows one direction, or that attitudes are universal to all people in Latin America.

Forecast for 2009

As in economic troubles in the past, most likely Latin America will create policies to weather the current economic storm, as they have always done in the past. The issues of liquidity will arise as they do in all countries during an economic crisis, but with so many nations with economic problems, Latin America might fare better due to anti-debt strategies of the past, or perhaps may fare worse due to a lack of liquidity and reserves from countries which only recent have achieved economic success.

Mexico, as mentioned above, will finally get the attention it deserved in 2008 in early 2009. Security concerns in Mexico are likely too great with the high number of deaths, attacks on Government officials and the US giving military support and finding victims of Mexico's Drug War throughout its border towns. While the region will likely be faced with economic concerns and some news worthy stories out of Venezuela, Mexico will likely become the focus of media on Latin America in 2009.