I am pleased to share this selection of issues that the Latin America Advisor‘s team felt covered especially important developments this year.
Edited by Gene Kuleta and Anastasia Chacón González, the Advisor has produced more than 250 editions over the past 12 tumultuous months for subscribers at many of the world’s most innovative companies, including Amazon, Apple, BMW, BlackRock, BP, Citigroup, Merck, Mitsubishi, and Walmart, to name a few, as well as the libraries at Berkeley, Dartmouth, Harvard, Johns Hopkins and Notre Dame, among other leading universities, and government ministries on four continents.
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Jul 20 | Latin America Advisor
Major European investment firms have threatened to divest from Brazilian beef producers, grains traders and government bonds if they do not see advances in protecting the Amazon rain forest. Brazil’s government responded in July by announcing a ban on fires in the Amazon for 120 days. The investors’ concerns follow an 11-year high in Amazon deforestation in 2019, President Jair Bolsonaro’s first year in office. What factors have led to the increase in deforestation? Will Brazil’s 120-day ban on fires satisfy investment managers, or should the country still expect divestments? To what extent will the risk of divestment lead to more long-term protections of the Amazon in Brazil?
Sep 30 | Latin America Advisor
World Bank Chief Economist Carmen Reinhart warned of Latin America’s increasing potential to fall into insolvency after taking on unprecedented levels of debt during the coronavirus pandemic. The region’s banks, many of which have offered borrowers grace periods, are uncertain how many small businesses and households will be able to repay their debts, she said. How deeply are Latin America and the Caribbean nations in debt, and which countries and sectors face the highest risk of insolvency? How will access to and the cost of credit for the region change in the years ahead? How can policymakers prepare for a more organized restructuring of massive debt loads, and could global frameworks and international resources do a better job of addressing the problem than in past debt restructurings in countries such as Argentina, Ecuador and Venezuela?
Aug 21 | Latin America Advisor
The administration of U.S. President Donald Trump has increased sanctions on Venezuelan President Nicolás Maduro’s government in recent years in an effort to pressure Maduro to step down. Former Vice President Joe Biden, who is seeking to unseat Trump in the November presidential election, has also voiced support for tougher Venezuela-related sanctions and, like the Trump administration, has expressed support for opposition leader Juan Guaidó, whom the United States recognizes as Venezuela’s legitimate interim president. But, unlike Trump, Biden has said he will extend Temporary Protected Status, or TPS, to Venezuelans. If Biden is elected president, how would he change U.S. policy on Venezuela? How would Biden’s actions on Venezuela affect the South American country and Maduro’s hold on it? What influence would Kamala Harris, Biden’s running mate, have on U.S. policy toward Venezuela as vice president?
Oct 19 | Latin America Advisor
The Caribbean is better positioned than any other region in the world to take advantage of the “blue economy,” according to the World Bank. The blue economy, which the multilateral lender describes as the sustainable use of ocean resources for economic growth, improved livelihoods and jobs, has only now begun to take hold among countries in the region, however. What opportunities would a focus on the blue economy bring to the Caribbean, and what are some possible obstacles standing in the way? What else can Caribbean nations do to snap back from recession, both individually and as a region, and what tools are at their disposal to finance their recoveries? How can the region’s countries diversify their economies, and which sectors should they invest in to become more resilient to external factors?
Oct 23 | Latin America Advisor
A group of academics and former government officials are calling for a new economic development model for Latin America and the Caribbean in the face of the worst regional recession in modern history. The “Latin American Consensus,” as they have named it, would emphasize social development, push for productive and export diversification and strengthen public sector institutions, among other measures, José Antonio Ocampo, chair of the U.N. Committee for Development Policy, wrote in a recent blog. Does the region need a new economic development model in order to lift people out of poverty and reduce stubbornly high inequality? To what extent has the so-called Washington Consensus, a set of largely pro-market principles implemented over the past 20 years, succeeded in Latin America and the Caribbean, and in what ways has it failed? Would a new development model like the one being proposed imply significantly higher taxes on businesses and multinational companies operating in the region?
Nov 2 | Latin America Advisor
Before the end of the year, Cuba’s government is planning to unify its dual-currency system by devaluing its peso for the first time since 1959 and eliminating its convertible peso. The U.N. Economic Commission for Latin America and the Caribbean expects Cuba’s GDP to contract by 8 percent this year amid the coronavirus pandemic and tougher U.S. sanctions. What effect will the currency reform have on Cuban citizens and on the country’s economy? How will the monetary reform influence the country’s exports and imports? Will the change lead to significantly higher inflation?
Nov 5 | Latin America Advisor
The results of Tuesday’s presidential race in the United States remained too close to call this morning as former Vice President Joe Biden approached the number of electoral votes needed to be elected, and President Donald Trump’s campaign launched a series of legal challenges in key states. How do Latin Americans view the United States’ bitter and contested national vote, and what do they most want to see from the next president? What do the results so far say about the influence of Latinos voting in the United States? Amid reports of missing mail-in ballots and potential legal challenges, to what extent do you see the election as being free and fair?
Nov 18 | Latin America Advisor
Latin America and the Caribbean will experience a “tsunami of demand going forward” for treatment of noncommunicable diseases, such as cardiovascular disease and cancer, which have been delayed or missed due to the pandemic, Rifat Atun, a professor of Global Health Systems at Harvard University, said at an Inter-American Dialogue event on Nov. 4. The Covid-19 pandemic has worsened inequality in access to health care in the region, said Atun, who added that the region needs more innovation in health care delivery. What kind of innovation is needed to help ensure that patients in Latin America and the Caribbean get the care they need for noncommunicable diseases? How efficient and effective is public spending on health care currently? How can governments and the private sector better collaborate to maximize the value that is received from health care spending?
Nov 30 | Latin America Advisor
The U.S. Justice Department announced it had agreed to drop criminal charges against former Mexican Defense Minister Gen. Salvador Cienfuegos Zepeda, who was arrested in Los Angeles in mid-October on accusations of conspiracy to manufacture, import and distribute narcotics into the United States and money laundering. The government of Mexican President Andrés Manuel López Obrador reportedly saw Cienfuegos’ detainment as a violation of the country’s sovereignty, and Mexican officials have not committed to putting Cienfuegos on trial when he returns to his home country. What is behind the U.S. Justice Department’s decision to drop the charges? What implications does the move have for Cienfuegos’ case and for future foreign corruption investigations or trials carried out by the U.S. government? How well are U.S. and Mexican authorities working together on anti-drug efforts?
Dec 8 | Latin America Advisor
Venezuelan President Nicolás Maduro claimed a sweeping victory as his party won control of the National Assembly on Sunday in a vote that the opposition has alleged was rigged in favor of Maduro and his allies and in which the Juan Guaidó-led faction of the opposition refused to participate. How will the election affect Maduro’s hold on power and Venezuela’s opposition? Will the international community maintain its support for Guaidó? How divided is the opposition, and what implications does the split have for its efforts to oust Maduro?
Jul 22 | Latin America Advisor
Citing complicated economic conditions brought on by the Covid-19 pandemic, Brazil has again delayed its auction for the deployment of 5G technologies. The announcement came as the United States steps up pressure on Brazil to rebuff Chinese supplier Huawei Technologies, a move a company executive said would “ultimately impact prices for carriers, regional Internet service providers and customers.” What is the significance of continued delays in the deployment process of 5G networks in Brazil? To what extent and in what ways is geopolitics influencing decisions regarding 5G services in the South American country? Taking politics aside, what are the most important factors that should be taken into account in order to make Brazil’s 5G deployment successful?
Oct 27 | Latin America Advisor
Chileans on Sunday overwhelmingly voted to rewrite their dictatorship-era constitution. In the referendum, more than 78 percent voted to draft a new charter, and in April they are expected to select the 155 members of an assembly to handle the task, which is expected to take two years. What major changes could—and should—be included in the new constitution? To what extent is Chile’s current constitution responsible for the nation’s economic progress? How orderly and transparent will the process to rewrite the charter be? Will Sunday’s vote put an end to the social protests that Chile has seen over the past year?
Aug 13 | Latin America Advisor
Argentina’s government announced Aug. 4 that it had reached a deal with three main groups of bondholders in its planned restructuring of $65 billion in foreign bonds. The deal, which suggests a recovery rate of about 55 cents on the U.S. dollar, would “grant Argentina significant debt relief,” the Economy Ministry said. How good is this deal for Argentina’s government and for creditors? What will the deal mean in the long-term for Argentina’s economy and its ability to borrow money in capital markets in the future? What does Argentina’s government need to do in order to avoid accumulating more unsustainable levels of debt?
Nov 17 | Latin America Advisor
Peru’s Congress has selected centrist lawmaker Francisco Sagasti as Peru’s new interim president—the country’s third in a week. Legislators selected Sagasti, an engineer from the centrist Purple Party, following Sunday’s resignation of interim President Manuel Merino, who stepped down amid violent protests after just five days in office. Merino had replaced President Martín Vizcarra, whom Congress removed from office on Nov. 9. Legislators had declared Vizcarra “morally unfit” for office over his handling of the Covid-19 pandemic and allegations of corruption, which he has denied. Newspapers and analysts have called Vizcarra’s ouster a “coup,” and the protests it sparked left at least two dead and were the largest in Peru in two decades. What is at the root of Peru’s political instability, and to what extent are protests likely to continue and intensify? What will the next five months hold for Peru ahead of the scheduled April 2021 elections? What implications will the crisis have for the country’s already hard-hit economy and investment climate?
Jul 27 | Latin America Advisor
Countries in Latin America and the Caribbean face a steep drop in tax revenue due to the slowdown of economic activity amid the pandemic and lower prices for commodities, the Economic Commission for Latin America and the Caribbean, or ECLAC, said in a report this month. In addition, tax evasion continues to be a problem for the region, with ECLAC estimating a loss of $325 billion—more than 6 percent of GDP—due to tax noncompliance even before the recession. How important, and controversial, will tax policy become as Latin American and Caribbean countries seek to reactivate their economies in the period ahead? What would the ideal tax policy look like, and which sectors, if any, should see tax breaks during the post-pandemic recovery? How big of a problem is tax evasion in the region, and what can governments do to ensure taxpayers, especially companies, comply?
Sep 8 | Latin America Advisor
Several countries in the region, including Chile, Colombia and Peru, have announced their participation in Phase 3 trials of potential vaccines against Covid-19 that are currently under development by international pharmaceutical companies. Meanwhile, Argentina and Mexico have said they will produce between 150 million and 250 million doses of a potential vaccine at no profit for distribution in the region. How are countries in Latin America and the Caribbean preparing for the eventual distribution of a Covid-19 vaccine? Are their preparations enough to ensure the vaccine reaches the region’s most vulnerable populations? How will governments pay for access to and distribution of a vaccine once it becomes available?
Dec 9 | Latin America Advisor
Latin American governments in recent years have formulated national strategies and public policies in order to promote the development of artificial intelligence, or AI. Among them, Chile’s government has formed an AI policy in order to increase innovation in areas including health and education, and Brazil’s science minister last year announced the creation of several AI laboratories to focus on areas including health, agribusiness and smart cities. How important is AI to Latin America’s economic growth, and which areas hold the most promise for innovation? What regulations and policies are the most important as governments seek to foster AI’s development? What are the downsides and potential risks of AI, and what do governments, the private sector and civil society need to be focused on now in order to avoid unintended consequences of unprecedented technological changes ahead?
Nov 12 | Latin America Advisor
The Covid-19 pandemic has been financially devastating for airlines, including in Latin America, where LATAM Airlines, Avianca and Aeroméxico have all filed for bankruptcy protection this year. However, there are signs of improvement, with Aeroméxico reporting a pickup in passenger traffic and a much smaller loss in the third quarter as compared to the second. How much is air travel rebounding in Latin America, and what is the outlook for the sector next year? Which safety standards are proving to be the most effective, and how well are Latin American governments coordinating with the airlines that serve their countries in order to prevent the spread of infection? To what extent are countries in the region successfully working together in order to standardize air travel health safety protocols?
Oct 30 | Latin America Advisor
Brazil and the United States this month signed a limited pact that is expected to ease trade barriers, strengthen regulatory practices and fight corruption, according to officials from both countries. However, it is unclear to what extent the new deal will actually increase trade between the two nations, given its limited scope. What are the motivations behind the deal, and what does each country stand to gain from it? How will the United States’ offer to finance the deployment of 5G technology in Brazil play out, especially in terms of U.S.-China competition? Is the limited trade pact likely to be expanded in years ahead, and how might the outcome of U.S. presidential and congressional elections next month influence that?
Apr 16 | Latin America Advisor
As the coronavirus outbreak in China seems to ease just as it is escalating in Latin America and the Caribbean, countries in the region are looking to the Asian nation for medical aid and supplies. As the pandemic worsens, how much will Latin American and Caribbean governments turn to China for help, and is that the best alternative? To what extent will China be willing and able to lend and invest in the region as it grapples with its own economic slowdown? More broadly, in what ways will the Covid-19 pandemic change China’s engagement with Latin America and the Caribbean?