Americas

Brazil

  • Southeast Asia
    Bolsonaro Ascendant II: More Lessons From Rodrigo Duterte’s Rise
    Last week, following Jair Bolsonaro’s performance in the first round of Brazil’s presidential elections, when bolson exceeded predictions and won 46 percent of the first round vote, this column examined how Bolsonaro actually had more in common with Philippine president Rodrigo Duterte than with many other populists who have run for office in Europe and North America in recent years. Bolsonaro now appears likely to win the presidency in the second round of the election; polls have him leading the other final round candidate, Fernando Haddad, by sixteen points. It seems almost impossible that Haddad would win, given that the second round is in less than two weeks, and Haddad trails by such a wide margin. Bolsonaro and Duterte come from different ideological backgrounds. Bolsonaro, a former army captain, has been on the far right for decades. The Philippine president has in the past called himself a socialist, and has in office promoted some left-leaning programs on issues like family planning. But both have an authoritarian populist style that promises tough action, simple solutions to problems, and a strongman who will fight crime and right the economy, ignoring democratic norms if needed. Both Duterte and Bolsonaro, like many autocratic-leaning populists who have gained power in the past decade, have emerged in relatively abnormal circumstances in their countries’ modern histories. (To be sure, when looked at over centuries, authoritarian or quasi-authoritarian rule is not an abnormal occurrence in either Brazil or the Philippines; the two states were autocracies in the mid-1980s.) In Brazil, a massive spike in violent crime and an economic downturn led to a curdling of popular support for mainstream parties and candidates, for instance, and paved the way for Bolsonaro’s breakthrough. And, like in many other instances of populists’ triumphs, Duterte built on his election and quickly gained enormous power over state institutions, even though he won the presidency with less than 50 percent of the total popular vote. Duterte has nonetheless gained dominant control over the lower house of parliament, and wields massive influence over the Supreme Court and Senate as well. He also has proven mostly invulnerable to public outrage over his abuses of norms and abusive language, policy missteps like his administration’s lack of preparation for the conflict in the Philippine south in 2017, questions over Duterte’s health, or other issues that might have been politically fatal scandals for other politicians. With Duterte’s reputation as a wild strongman baked into his political persona, scandal leaves little mark on him—just as scandal did not significantly harm the political fortunes of other autocratic-leaning populists like Italy’s former Prime Minister Silvio Berlusconi or former Thai Prime Minister Thaksin Shinawatra. So, like Duterte, Bolsonaro probably will be able to command vast power from day one, and expand his power base quickly—and his opponents will have more trouble combating him than they would another politician. Scandal, insulting public remarks—for which Bolsonaro is already known—these are unlikely to dent the public image of an autocratic-leaning populist. Indeed, as several authors have noted, autocratic-leaning populists often prove so politically enduring that they can make multiple comebacks from seeming political death. Autocratic populists become vulnerable only after years of public fatigue with their antics and endless crises, and/or when “normal” and major political challenges emerge, and their opponents can fight them on core issues, as Matthew Yglesias has noted, rather than battling about scandals. For Duterte, that could be the increasingly high price of rice, as well as rising inflation, although Duterte has amassed so much support in the legislature, and among the public, that he still looks likely to come out of the midterm elections next year relatively unscathed. For Berlusconi, the 2011 euro crisis was a leading factor that led to his ouster. But before normal politics could bring down an autocratic-leaning populist, they can rule for a very long time.
  • Southeast Asia
    Bolsonaro Ascendant: The Similarities to Rodrigo Duterte
    On Sunday, far-right Brazilian presidential candidate Jair Bolsonaro outperformed polls and won roughly 46 percent of the vote in the first round of Brazil’s presidential elections, coming close to the 50 percent threshold that would have given him the victory outright. He will now face the second place finisher, Workers Party candidate Fernando Haddad, in a run-off in three weeks, one in which Bolsonaro will be heavily favored to win. Without a doubt, autocratic-leaning populism has made enormous strides globally in the past decade, in Hungary, Poland, and Turkey, among other places, and right-leaning populists also have gained power in North America and Western Europe as well. But in many respects Bolsonaro most closely resembles a Southeast Asian populist, Rodrigo Duterte, even though the two men theoretically have different political ideologies. Duterte has always said that he came from a leftist political background—and indeed Duterte has passed some progressive policies in office, albeit while simultaneously undermining democratic institutions and norms—while Bolsonaro is an unabashed political conservative. For one, both men have appealed to citizens with promises of extreme responses to crime and corruption—Duterte’s war on drugs, for instance, which has involved condoning widespread extrajudicial killings of drug traffickers, drug users, and many people additionally who had no links to drugs at all. In Brazil, where the murder rate has reached a new high, Bolsonaro has promised to give the Brazilian police, already some of the most militarized in South America, wider rein to shoot at suspects, and has at least hinted at approving Duterte-style extrajudicial killings. He also has waxed nostalgic about Brazil’s years of dictatorship, and has suggested he would pack his cabinet with military men. Both also have taken advantage of the weaknesses, in-fighting, and graft of existing political parties, positioning themselves as outsiders who can bring radical change in a country where elites have lost the public trust, and where publics have soured on democracy itself, feeling that it has led to a lack of public security, has not addressed inequality, and has offered up politicians largely disconnected from many voters. In the Philippines, despite strong growth during the presidency of Duterte’s predecessor, Benigno Aquino III, and rising investment in the Philippines, inequality remained high, and Aquino was perceived by many voters as aloof. State institutions remained fragile or nonexistent, infuriating working class and middle class Filipinos. Meanwhile, in the months before Duterte was elected in 2016, other presidential candidates continued to fight each other rather than build an alliance against Duterte, who was elected in a multicandidate race where no one received 50 percent of the popular vote. Bolsonaro, meanwhile, has risen in the wake of massive corruption scandals involving prominent figures from both the Workers Party and other parties, including former president Luiz Inacio Lula da Silva, who was the front-runner in this presidential campaign until he was jailed. Bolsonaro has positioned himself as a scourge of corruption, as a strongman who can solve deep and entrenched problems—though it is unclear whether he himself was totally clean in the past. He also has benefitted from Brazil’s severe economic decline in recent years, which has led to a spike in unemployment and fed a popular desire for any political alternative that can right the Brazilian economy. Like Duterte, Bolsonaro has benefitted from the adept use of social media, which allowed both men, as candidates, to amplify their messages and also sidestep the mainstream media. More than leaders in places like Poland and Hungary, too, Bolsonaro and Duterte thrive on brutal and misogynistic rhetoric, such as jokes about rape. They further utilize outlandish, insulting, crude remarks to shock the political system and political norms—a typical tactic of autocratic-leaning populists—test what actions they can get away with, and, not coincidentally, draw a continuous stream of media attention. A final lesson, too, to take from the Duterte era in the Philippines is that autocratic-leaning populists, such as Duterte, may make seemingly outlandish statements and promises on the campaign trail—but that voters should believe that these populists intend to at least attempt to carry out their plans. As mayor of Davao, Duterte allegedly oversaw widespread extrajudicial killings as a supposed means to combat crime, and on the campaign trail he essentially promised the war on drugs that he has overseen. Yet some analysts—and perhaps some voters too—played down Duterte’s seemingly extreme promises; but, in office, he has followed through on the drug war, and also on other campaign pledges.
  • Vietnam
    Women This Week: Making History in Vietnam
    Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post was compiled with support from Rebecca Turkington and Ao Yin.
  • Financial Markets
    Emerging Markets: The World’s Star Pupils
    Play
    The second session of the Stephen C. Freidheim Symposium on Global Economics looks at how emerging markets (China, Brazil, India, Russia, etc.) have fared over the past decade, the extent to which reserve accumulation and flexible exchange rates have enabled them to manage shocks, and the question of current financial stability.
  • Corruption
    Latin America Needs Better Judges
    Latin America’s judiciaries are engulfed in corruption scandals. In Colombia a former Supreme Court member was arrested on charges of corruption and bribery. In Peru multiple judges stand accused of trading favorable rulings and shortened sentences for money and perks. In Guatemala, lawyers and justices face charges of rigging Supreme Court appointments. And in Mexico the attorney general's office fired one of its own for delving too deep into alleged bribes to the former head of the national oil company Pemex, a close confidant of President Enrique Pena Nieto. These acts, more than similar crimes by dirty politicians, undermine the region’s fragile rule of law, revealing deep-seated corruption among those responsible for holding others to account. They show that the widespread legal reforms of the last two decades, while necessary, weren’t enough. The next essential step is professionalizing the judiciary itself. Argentina, Chile, Colombia, Mexico, Peru, Uruguay, and others have overhauled their legal systems, introducing oral trials, arbitration, and mediation alternatives, and strengthening due process and the presumption of innocence. As part of larger shifts from inquisitorial to adversarial systems, these efforts have begun to make justice more transparent, effective, and fair. Many Latin American countries have also passed specific anticorruption measures. Brazil criminalized bid-rigging, bribery, and fraud in public procurement. Argentina outlawed nepotism, and along with Peru and Colombia upped the penalties for corporate bribery. Mexico created a new national anti-corruption system, explicitly outlawing bribes, embezzlement, and the failure to disclose conflicts of interest, and creating a dedicated prosecutor to go after perpetrators. Legislators also gave prosecutors new corruption-fighting tools. Brazil’s successful Lava Jato (Carwash) investigations, leading to more than 200 convictions of politicians and business leaders for bribery and kickbacks, including former president Luiz Inacio Lula da Silva, have hinged on plea bargaining, introduced to the fight against organized crime by a 2013 law. Nearly a dozen nations in the region claim similar statutes that enable court officials to ease sentences in exchange for information on accomplices and higher-ups. Yet as the ongoing wave of scandals attests, beyond new laws Latin American nations need judges and lawyers able and willing to wield them. This in turn requires a professional legal bureaucracy. Although harder to conjure than legislation, a qualified civil service is possible to build. Look, for instance, at Chile and Brazil. Chile has a long history of meritocratic public hiring, drawing on credentials and examinations rather than party links. Attesting to the respect afforded their profession, judges, like other bureaucrats, often come from well-heeled families and elite schools. In the wake of Chile's own corruption scandals, one involving former president Michelle Bachelet's son and daughter-in-law, the government expanded efforts to inculcate legal impartiality and professionalism beyond just the courtroom, introducing civic and ethics education to elementary schools nationally. Brazil’s merit-based system for choosing most judges and prosecutors was inscribed in its 1988 Constitution. Over the last 30 years its judicial core has evolved, the politically appointed judges of the past retiring and their replacements rising up through the new technocratic process. Judge Sergio Moro of Lava Jato fame is but one of these new professionals, respected and well remunerated for their technical acumen and political autonomy. Throughout the region citizen anger over corruption is growing. Promises to take on widespread graft helped to catapult Mexico’s president-elect Andres Manuel Lopez Obrador to a historic victory. Corruption preoccupied Colombians heading to polls last spring, and ranks high among voter concerns in Brazil’s upcoming presidential race. In Peru it brought down the previous president and threatens the current head of state, Martin Vizcarra, if he can’t harness the momentum to his cause through a pending referendum. Yet what Latin American leaders must now do is to change career incentives, ensuring that judicial robes aren’t bought but earned, and that merit trumps connections. They need to create respected and rewarding professional paths, enticing the talented and ambitious to the fight against corruption rather than succumb to its temptations. Brazil and Chile show that changing the makeup of the justice system is possible. But a process that takes a generation will surely test the patience of Latin America's voters. View article originally published on Bloomberg.
  • Trade
    Latin America Looks Past the United States on Trade
    This weekend a beleaguered Argentina hosted the G-20 finance ministers to work out the agenda for their leaders’ December conclave in Buenos Aires. While officially focused on infrastructure and the future of work, these more technical discussions were overshadowed by U.S. tariff threats and President Donald Trump’s belligerence toward allies and the World Trade Organization. The U.S. attack on the global trading system comes as Latin America is finally embracing free trade. In a resurgence of market-friendly leaders, politicians from the left and right are seeking to expand their nations’ global commercial footprint through a flurry of free-trade and investment agreements. In normal times, they might have turned to the U.S., a top investor and trading partner for most every nation. Yet Trump’s obstinacy throughout the NAFTA negotiations suggests few deals are to be had to the north. As a result, a marked shift is now underway. The European Union (EU) has become a favored partner: Mexico advanced the renegotiation of its 2000 agreement in April, opening up the agricultural, services, and digital goods sectors, simplifying customs and harmonizing regulations to make it easier to sell across borders. Mercosur, the trading bloc founded by Brazil, Argentina, Uruguay, and Paraguay, is pushing to complete an EU agreement that has been marinating for almost two decades. Latin American free traders are also taking their cause to Asia. Mexico, Peru, and Chile were founding partners of the Trans-Pacific Partnership, now the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after the U.S. withdrawal, and neighboring Colombia is among the nations clamoring to join. Mercosur is eyeing negotiations with South Korea, following a path laid out by Costa Rica, El Salvador, Honduras, Nicaragua, and Panama, which all signed bilateral deals this year. Panama has begun negotiations with China, while Colombia and Mercosur are flirting with the idea. And the South American trading bloc has started talks with Canada and reached out to New Zealand and Australia to gauge interest in boosting trade ties. The main Latin American economies are also moving to make real the long elusive dream of regional economic integration — in which it lags every region but Africa. This week, leaders of the Pacific Alliance, a comprehensive free-trade agreement begun by Mexico, Colombia, Peru, and Chile, will meet their Mercosur counterparts in Puerto Vallarta to discuss collaboration and even a potential merger. An agreement would bring together 80 percent of the region’s gross domestic product, creating a $4.3 trillion dollar market. While not as large a prize as the EU or China, this preferential agreement could be more important for Latin America’s future prosperity. Intra-regional trade and investment lean toward medium to higher technology sectors — including chemicals, cars, and pharmaceuticals — and higher value-added industries that bring in technology, enhance productivity, and create better jobs. If Latin American nations want to prosper from global supply chains, they must develop regional production to the point where they can compete with the integrated enterprises of Asia, Europe, and North America. Of course, Latin America’s current free-trade fervor could wane. After Argentine president Mauricio Macri plays host at the end of the year, the G-20 mantle will move on to Japan. Mexico’s president-elect Andres Manuel Lopez Obrador’s NAFTA-friendly comments sit uneasily with his more protectionist calls for self-sufficiency in food and energy. And in Brazil, the next president, who will take the helm in January, could reaffirm or discard the nation’s newfound trade enthusiasm. In that respect, the concrete results of the agreements now on the verge of completion will be critical. Yet even if there is an ebb and flow in sentiment, Latin America’s trade horizons have broadened. While geography remains in large part destiny, Latin America for now is moving on without the United States. After the NATO summit, Germany’s foreign minister proclaimed that the European Union can “no longer completely rely on the White House.” At least on trade, that lesson is one Latin America has already learned. View article originally published on Bloomberg.
  • Brazil
    Brazil Needs a Twenty-First Century Data Protection Strategy
    The European Union's General Data Protection Regulation is putting pressure on Brazilian authorities to adopt similar legislation to protect Brazilians' digital privacy. 
  • Cape Verde
    West African Migrants Arrive in Brazil After Weeks Adrift at Sea
    European politics have been roiled by waves of immigration from the Middle East and North Africa. Many Europeans are deeply concerned that the next wave will be primarily from Africa. But, an African immigration wave might go considerably farther than just Europe. The Associated Press reports that, for the first time, a group of twenty-five African migrants attempted to sail in a catamaran from the West African archipelago of Cape Verde to northeastern Brazil, a distance of just under two thousand miles. The catamaran’s engine failed, the mast broke, and the vessel was adrift for some four weeks until rescued by a Brazilian fishing vessel off the northeastern Brazilian coast. It was the first time a group of migrants had arrived in the Brazilian state of Maranhao. Earlier illegal migrants to the state had been one or two stowaways.  The twenty-five migrants were from Guinea, Nigeria, Senegal, and Sierra Leone. According to AP, each passenger paid around $1,180 (€1,000) to make the voyage. The Brazilian authorities have arrested two Brazilians from the vessel on the suspicion that they were smuggling the group. Smuggling networks between South America and West Africa, especially Guinea, have been steadily developed by narcotics traffickers. They then transship narcotics from West Africa to Europe and North America. Up to now, the smuggling has been from South America to Africa. In the future, these networks may be exploited to move economic migrants in the opposite direction, from Africa to South America. The high price apparently charged by the catamaran operators may be an indication that they were part of an existing smuggling outfit that is now looking for markets beyond narcotics. Brazil has long had close ties with West Africa and may well be an attractive destination for West Africans seeking greater economic opportunity or security.  
  • Americas
    Latin America Needs More Home-Grown Supply Chains
    The Union of South American Nations (UNASUR) — an organization that once aspired to become South America’s answer to the European Union — quietly faded away last month. Deep divisions over Venezuela’s turmoil and internal leadership battles precipitated its demise. Yet its real vulnerability stemmed from something deeper: the economic isolation of its members. Unlike the European Union, Latin America’s multilateral bodies haven’t ignited commercial ties between their participants. This economic detachment not only doomed UNASUR, but has held the region back, and may keep it on the margins in the decades to come. UNASUR wasn’t the first attempt to integrate Latin America. In the 1960s the six-country Latin American Free Trade Association fell victim to protectionism. In the 1980s, a dozen nations tried again with the Latin American Integration Association, largely to no avail. In the 1990s Mercosur took center stage as a vehicle to knit South America together: Its common currency never materialized, and trade between the partners peaked shortly afterward, then again declined. Despite more than a dozen different multilateral organizations, Latin American nations remain commercial strangers. Sure, Argentina and Brazil exchange some auto parts, Colombia and Ecuador do a decent trade in paper and plastics, and Chilenos watch Mexican soap operas. But overall, less than 20 cents of every export dollar goes to one of its neighbors. Compare that with well over half of international sales in Europe or Asia. More broadly, Latin America’s regional agreements have done little to boost their members’ share of world manufacturing exports and their participation in global markets. Importantly, Latin American nations tend not to make things together. Today the vast majority of goods circling the earth are intermediary goods — parts and components being sent elsewhere to be sewn, welded, stamped, and otherwise assembled into clothes, cars, computers and thousands of other products. This shift in trade reflects the rise of global supply chains, as everyday products are increasingly made across numerous factories and even countries. These supply chains have bolstered the fortunes of many emerging markets — mostly when they worked with their neighbors. Asia’s big four newly industrialized economies — South Korea, Taiwan, Hong Kong and Singapore — jump-started their decades of near double-digit growth with Japanese outsourcing and investment. They later benefited from China’s rise. Many Eastern European nations saw their industrial base and larger economies blossom when their Western European brethren poured in after the fall of the Berlin Wall. And Mexico’s successes in cars, planes, medical equipment, and other manufacturing has been due mostly to the commercial ties born of NAFTA. Latin American nations are instead largely focused on mining the iron ore, lithium, copper and other raw materials that go into the making of steel, batteries, and electronics; or growing the soybeans, fruit, and coffee processed and consumed oceans away. Excluded from the most dynamic parts of international manufacturing chains, Latin American companies and workers are less likely to gain access to new technologies, to develop new skills and to move up the value-added ladder to higher-margin products and better-paying jobs. This isolation leaves the region less able to compete vis-a-vis other parts of the world in the making of things — not least because of the rise of other more successful regional hubs — and less able to attract global consumers to its homegrown brands. It helps confine so many nations to the middle-income trap. Without the commercial ties to keep the politics on track, diplomatic conflicts often lead either to neutered talk shops unable to resolve pressing issues — the Organization of American States’ response to Venezuela comes to mind — or to full-on institutional suspensions, a la UNASUR. Given the distances involved, South America is unlikely to be drawn into Asia’s, Europe’s or North America’s manufacturing orbits. Its nations instead should turn to their neighbors to nurture industry and boost economic growth. The legal mechanisms are there: More than two dozen regional agreements cover some 80 percent of trade. These could be expanded to include the thornier sectors that remain, and could and should be consolidated into a few broad agreements — for instance, expanding the Pacific Alliance to streamline the current thicket of rules and regulations. Governments could also make it easier for international companies to invest through tax and investment treaties with neighbors. They could tackle the outsized transaction costs shippers face from woeful infrastructure between countries. And they could reduce excessive red tape and strengthen the rule of law, enticing to any foreign investor or multinational. If Latin American entrepreneurs and businesses looked next door more often, they would finally provide a stronger economic foundation for the wider integration politicians have long discussed but never realized. View article originally published on Bloomberg. 
  • Brazil
    Brazil's Critical Infrastructure Faces a Growing Risk of Cyberattacks
    Most of the world's critical infrastructure—nuclear plants, electrical transmission systems, water treatment plants, etc.—is managed by internet-connected hardware and software that makes them vulnerable to cyberattacks.
  • Brazil
    Trump Creates a Trade Opening for Brazil
    President Michel Temer’s decision to send troops into Rio de Janeiro officially killed not only Brazil’s pension reform, but also remaining hopes that he might tackle the litany of structural changes to the tax, labor, education and regulatory systems that economists and investors see as the country’s economic salvation. Yet these now-defunct reforms aren’t the only way to bolster growth. Trade matters as much or more for juicing gross domestic product, as the influx of goods, services and competition can help attain the economic holy grail of rising productivity. And given the U.S. protectionist pullback, opening to the world could, for once in Brazil, be politically popular in this election year. Brazil has always been a reluctant trader. Despite its natural resource bounty, it remains one of the world’s most closed economies. Its handful of formal trade agreements give it preferred access to just 10 percent of global markets and contain hundreds of exceptions, diminishing their reach and heft. These self-created handicaps keep Brazil out of the more profitable parts of global supply chains, instead largely stuck supplying raw materials to other nations’ factories. And the relatively heavy taxes on imports drive up costs for local companies and consumers alike. Yet Brazil’s lofty barriers also mean that reform could bring much more bang for the buck. A 2014 McKinsey study estimated that by opening its economy, Brazil could add 1.25 percent to annual GDP growth, more than labor or regulatory reforms would bring, and similar in scope to a total tax overhaul. These economic benefits from trade matter even more as Brazil’s population ages. From 1990 to 2012, new workers drove more than half of all GDP gains, some 1.8 percent a year. Yet this demographic bonus is ending -- in less than a decade, Brazil’s children and elderly will outnumber its breadwinners -- and that will cause a once-reliable engine of growth to sputter. Brazilian politicians understand the costs of protection. They give national aerospace champion Embraer the freedom to import equipment and components free of the tariffs other industries face. Their jets are now globally competitive. This stands in sharp contrast to Brazil’s automakers, which enjoy no such privileges. Brazilian cars as a result take twice as long to make and are 40 percent more expensive than those in Mexico. Their paltry exports go largely to captive Mercosur trading partner Argentina. The political timing for opening up may finally be right. Trump’s penchant for threatening -- if not breaking -- so many extant trade deals could spark reconsideration of an issue that used to be all but taboo in Brazil’s politics. In a country where fewer than two in 10 people like the U.S. president, anti-Trump issues can be in vogue. And by pulling back, the U.S. has given Brazil space to shape new accords more to its liking. The power struggle that sunk the Free Trade Agreement of the Americas in the mid-2000s has faded with America’s absence. EU-Mercosur talks are the place to start. After nearly two decades of on-again, off-again talks, the participants are trying to break through standoffs on agriculture and rules of origin. Trump’s recent tariff hikes on steel and aluminum tariffs, hitting industry on both sides of the Atlantic, could foster the camaraderie needed to overcome the last sticking points. Also ripe for a Brazilian rethink is the Pacific Alliance. Founded by Mexico, Colombia, Peru and Chile, the ambitious agreement goes after not just tariffs but also barriers to investment, services and the movement of people. Brazil’s participation would jump-start aspirations for Latin American economic integration. Most ambitious would be joining the revised Trans-Pacific Partnership, opening nearly a third of the world’s markets to Brazil’s companies, and changing the way government procurement, intellectual property protection, and public and private credit work in the Southern Cone nation. Dropping barriers would bring turmoil to some sectors, no doubt. In the 1990s Brazil unilaterally reduced tariffs on many goods -- leading imports to double as a percentage of the economy even as exports stagnated. Many unproductive companies faltered and failed, and some of their former employees have yet to recover. Brazil’s clothing and shoe factories and gas production are similarly vulnerable to more opening, even as car makers and other advanced manufacturers stand to gain. Yet for Brazil to grow faster for longer, it has to become more globally competitive. The now-stymied internal structural reforms are one path; economic opening is the other. And as Embraer and the many agro-businesses show, when given a bigger and more level playing field, Brazil’s companies can thrive. But they need the preferred access to markets that trade agreements would bring. Law and order and anti-corruption promises dominate the early presidential campaign slogans. Yet polls show Brazilians care most about their pocketbooks. Trade’s promise of cheaper and better goods could appeal to middle- and upper-class Miami-bound shoppers and poorer Bolsa Familia recipients alike. And for the broader economy, it would bring a much-needed win. View article originally published on Bloomberg View.
  • Venezuela
    Venezuela's Neighbors Can't Wait for Uncle Sam
    Venezuela’s refugee crisis is metastasizing. According to the United Nations, 5,000 Venezuelans have fled to Curacao, 20,000 to Aruba, 30,000 to Brazil, 40,000 to Trinidad and Tobago, and more than 600,000 to Colombia. In times past, the U.S. has led in responding to exoduses sparked by political or humanitarian crises. In 1980, it welcomed 125,000 Cubans fleeing in what became known as the Mariel Boatlift. Nearly two decades later, it provided respite for tens of thousands of Hondurans and Nicaraguans in the wake of Hurricane Mitch, and more than a quarter-million Salvadorans after a 2001 earthquake. Much as the region has not always welcomed some U.S. interventions — think Grenada in 1983, Panama in 1989 and Central America throughout the 1980s — when crises arise, Latin American nations still look north. Yet although the U.S. has put pressure on Venezuela to restore its democracy, the burden of coping with the implosion of what used to be Latin America’s richest nation has fallen most heavily on its immediate neighbors. They can’t afford to wait for a distracted and less benevolent U.S. to do the right thing. Instead, for their immediate and collective future, they must forge a regional response to what has become the hemisphere’s greatest humanitarian crisis. Despite touting its “year of engagement” with Latin America and dredging up unfortunate echoes of the Monroe Doctrine, the Trump administration seems to have little desire to lead in the Americas — at least on the region’s most pressing issues. It pulled out of the Trans-Pacific Partnership, leaving Canada, Chile, Mexico and Peru bereft, and has repeatedly threatened to end the North American Free Trade Agreement. It walked away from the Paris climate accord, which Latin American nations widely supported, and rolled back the opening with Cuba. As for Latin Americans themselves, the U.S. is more likely to kick them out or wall them off than extend its welcome mat. It recently ended Temporary Protected Status for some 200,000 Salvadorans and 60,000 Haitians (the fate of an additional 87,000 Hondurans is unclear), and looks to begin deporting some 700,000 Mexican and Central American “Dreamers,” undocumented immigrants brought to the U.S. as kids. Not only has it halved the number of spots open to refugees, it is speeding up asylum applications for recent applicants — a decision that will likely result in the rapid repatriation of many Venezuelan asylum seekers who would otherwise have been able to work while waiting for the processing of their cases. Top U.S. diplomats have called out Venezuela’s humanitarian plight and human rights abuses. But on his five-country trip to the region, Secretary of State Rex Tillerson focused more on building support for new sanctions than on addressing this more immediate catastrophe. And while the Trump administration has offered aid to Venezuela — which the Maduro government has repeatedly rejected — the countries receiving Venezuela’s refugees have been largely left to deal on their own. Colombia, bearing the heaviest burden, has granted its own version of temporary protected status to some 150,000 Venezuelans, even as it has cut back on new visas, beefed up military patrols to stanch illegal crossings, and visited refugee camps in Turkey to look for best practices. Brazil declared a state of emergency in border state Roraima, doubling troops and ramping up basic services for the tens of thousands of newcomers. And while often not the first stop for those fleeing, Peru and Argentina have somewhat loosened visa requirements, enabling more Venezuelan migrants to stay and work. These piecemeal responses won’t be enough, however. The flood of people is already overwhelming border economies, schools, health systems and basic shelter in Colombia, Brazil and even Ecuador. Venezuela’s Caribbean neighbors, many with weak institutions and still recovering from last year’s hurricanes, are ill-equipped to meet such new challenges. And those fleeing are vulnerable to human trafficking and extortion, providing fodder for transnational drug and criminal organizations. The surge threatens to shift politics in this year of the Latin American election, when nearly two out of every three voters heads to the polls to elect a new president. Unfortunately, coordination among Latin American nations won’t be easy. Despite much cooperative rhetoric and nearly two dozen regional economic and diplomatic bodies, the countries and their foreign policy efforts remain quite solitary. There is no NATO, no true customs union, and so far no regional body able and willing to act decisively. Instead, and in part due to the weight and leadership of the giant to the north, most every country has historically adopted a non-intervention mantra toward its neighbors. Still, Latin American nations today differ from their more passive past incarnations. With a combined GDP of more than $5 trillion, and two of the world’s 15 biggest economies, the region’s increasing economic heft means more resources are available to address the costs of such a crisis. Mexico recently joined the growing roster of Latin American nations that contribute to peacekeeping missions. Nearly all the countries are democratic, with most committed to spreading these ideals broadly. And the spillover effects of the Venezuelan crisis on their own voting populations have created a shared urgency. To assuage the humanitarian crisis will require coordinating and funding massive efforts to bring food, water, shelter and medicine to those already displaced and the many more to come. It will mean creating schools (one-half of refugees are usually children), building infrastructure, and finding ways to enable the exiled to make a living. And it will mean getting more nations to take in those forced into exile, relieving the crush on Venezuela’s immediate neighbors. To galvanize a response, the region’s leaders should turn to the Inter-American Development Bank and World Bank to fast-track cheap loans for refugee-focused infrastructure. They should pressure China, which covets not only Latin America’s raw materials but its growing consumer markets, both to support that effort and to make clear to Venezuela that its conduct must change. And they should forcefully call out Cuba, which has supported and advised President Nicolas Maduro as he dismantled his country’s democracy and engineered its economic and financial self-destruction. Latin America doesn’t need a new mechanism to pursue this more cohesive and comprehensive response — the recently created 14-country Lima group could suffice, and older diplomatic bodies desperate for a mission abound. Its nations need only to summon the will and leadership to pick up the regional humanitarian mantle. If they do so, it may then be the U.S.’s turn to follow. View article originally published on Bloomberg.