Power Shifts, Chile Protests And Peru Election Mark Wild Year In Latin America
Massive protests, economic worries and Mother Nature made 2011 a particularly turbulent year. Latin America was hardly exempt. Hugo Chávez came down with cancer. Dilma Rousseff took on government corruption. And in Mexico, a bloody drug war killed thousan
AMÉRICAECONMÍA/Worldcrunch
SANTIAGO – This was supposed to a be a lucky year, at least according to the Chinese Zodiac. But 2011 – the year of the Rabbit – turned out instead to be one for the dogs as far as the world's politicians, world leaders, bankers and investors were concerned.
For Latin America, 2011 was filled with chaos and uncertainty, leaving many leaders spellbound as to how the economic crisis playing out in Europe and the United States will affect their strapping but still fragile economies.
This past year, the tectonic plates in the Pacific – the so-called Ring of Fire -- once again became unsettled, causing a devastating tsunami that crippled Japan's Fukushima reactors and reminded everyone just how important it is to treat nuclear energy with caution. But despite tsunamis and varying cultures, languages and production systems, the Pacific Rim is the part of the world where free trade has the best chance of prospering over the coming decade.
On this side of the great ocean, Chile and Peru ended the year heading in seemingly opposite directions. The Chilean peso sank while the Peruvian sol increased in value. Chile's conservative president, Sebastián Piñera, saw his once-soaring popularity take a nosedive amidst months of massive student demonstrations. In the meantime, his Peruvian counterpart, the nationalist Ollanta Humala, surpassed all expectations. Humala began his five-year term with the pledge both to maintain the pace of his country's barreling economy and more evenly distribute the country's resources.
In Brazil, Dilma Rousseff is at the helm of a huge vessel filled with frenzied and fearful passengers. The ongoing fight against government corruption and her fiscal and monetary policies have opened the door for an economic slowdown. This change of pace can affect a good part of Latin America, especially Argentina, whose automotive industry is dependant on Brazilian pocketbooks.
For the first time in Venezuela, the future of the Bolivarian Revolution is under threat. Hugo Chávez is seriously ill -- at death's doors, according to his enemies. His illness has turned Venezuela into a tinder box ready to ignite unless a united, moderate and realistic opposition can decipher what Venezuelans really want.
This scenario is already being anticipated with appeasement gestures by the governments of Ecuador and Nicaragua, which are striving to rebuild their relations with Washington. The question now is whether Bolivian President Evo Morales, who has already disappointed his own party base with rising food prices, will do the same.
Will Mexico's PRI strike back?
Even if Chávez's problems with cancer turn out to be exaggerated, there's a chance he will lose the presidency next year to the opposition. There's an even greater possibility of an opposition takeover in Mexico, where the Institutional Revolutionary Party (PRI) – which had governed for nearly 70 years before it was defeated by Vicente Fox and the current ruling National Action Party (PAN) in 2000 – is making a robust comeback. What's not clear is if a PRI government would fare any better than the current administration of President Felipe Calderón when it comes to Mexico's drug wars, which have already claimed more than 10,000 lives.
In Central America the situation is even worse. The unsuccessful attempt by Guatemala's first lady to win the presidency through a sham divorce from President Álvaro Colom was just a relatively minor example of how the region's governing institutions are challenged. Perhaps the biggest threat comes from the region's epidemic of violent crime and drug trafficking. With little actual help from the United States – the real anti-drug sheriff in the region – the narco bosses have their tentacles extended throughout Central America.
One of the biggest paradoxes of the year has been that, despite the political impasse in Washington, there was a high demand for U.S. Treasury bonds and the dollar rose. Latin America's most important currencies, on the other hand, lost value toward the end of the year. The only exceptions were Paraguay's guaraní and the currencies of the long suffering Central American nations. Perhaps these were just market quirks?
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Photo – dilmarousseff
