The Uncertain Future for Latin America’s Giants
Darko Lazar
In 2015, Latin America, and specifically Mexico and Brazil, slipped into a recession. According to The World Bank, economic growth slumped to 0.9% - the lowest in 30 years, with the exception of the 2009 economic crisis. This led numerous analysts to conclude that the region's 2003-2013 ‘Decada Dorada', or the Golden Decade, was over.
These ‘golden' years can be attributed to high commodity prices, cheap credit and investment in developing markets, accompanied by a political agenda that steered the region toward China and away from the US and the EU.
Since then, however, investment across the board has shrunk by 7.7%, unemployment is rising, the budget deficit rose to 6.9% of GDP, while the currencies of both Brazil and Mexico weakened against the US dollar by over 30% and 27% respectively.
The demise of hope
Brazil is the world's 11th largest economy, while Mexico recently fell to 14th place. But according to economists, Mexico is third from last when it comes to the distribution of wealth, with Brazil bringing up the rear in last place.
Efforts by numerous governments have failed to address this issue. To make matters worse, the recent spike in inflation has further reduced the incomes of members of the working class.
Following a relative period of prosperity in the two countries, workers rights - freedom, justice, and equality - are now in danger of disappearing virtually overnight. And yet the vast majority of political parties, especially those in power, have made no attempt to reform their policies.
The dangerous and often incompetent internal strategies, coupled with foreign meddling, have driven the two Latin American giants - both in terms of size and economy - into uncharted territory.
The consequence is despair among millions of people, which is increasing the prospects of instability and unrest.
The Trump effect
The outcome of the US presidential election, which resulted in a victory for Donald Trump, is likely to have a tremendous impact on both Mexico and Brazil.
Trump's campaign rhetoric promising to build a wall along the US-Mexico border and swiftly deport undocumented workers and illegal residents has understandably caused a great deal of anxiety across Latin America.
Out of the 33.7 million Hispanics of Mexican origin currently residing in the US, 11.4 million are immigrants born in Mexico - of whom the vast majority are undocumented. Meanwhile, there are currently 1.3 million Brazilians living in the US and most of them are also illegal.
Interestingly, it's not so much the implementation of these policies that threatens to be the biggest burden for Mexico and Brazil, but rather the influence of Trump's political rivals in those countries, who are now mobilizing their assets to undermine his presidency.
According to leading Mexican newspaper La Jornada, Trump's victory does not translate into ‘tranquility', but the continuation of the battle.
Such statements fall directly in line with efforts by allies of the Clinton clan in Canada, who are reportedly laying the groundwork for an influx of Mexican migrants from the US. These developments will then be beamed across the world as an example of how detrimental the Trump presidency can be.
Canada's CBS News recently reported that in "preparing for a potential surge in Mexican migrants coming to Canada after Donald Trump's election victory... high-level meetings took place... with officials at Immigration, Refugees and Citizenship Canada and in other departments".
The government in Ottawa is simultaneously preparing to lift a visa requirement for Mexicans on December 1, which has been in place since 2009.
These political maneuvers will likely suck in other Latin American states, including Argentina - where an exponent of the Clintons, Mauricio Macri, is already in power - as well as Peru and Colombia.
In 2018, both Mexico and Brazil will be electing new heads of state. The Clintons and their allies are certain to try and manipulate this process in the hope of strengthening their influence and intensifying their efforts against Trump.
The deteriorating economic conditions in the two states are a major asset for the foreign actors. Although those conditions were largely brought about by a fall in global oil prices, political corruption and incompetent governance have played a major role.
But much of the mainstream media is now attributing the years-long economic crisis across Latin America to Trump's victory in the US presidential race. Such allegations suggest that the battle for the White House is not just ongoing, but is expanding into regional states.
As such, the power struggle in the US is further complicating the situation in Mexico and Brazil, where the Washington elite commands an enormous amount of influence. That same influence was used to distance Brazil from the BRICS grouping, resulting in the impeachment of former president Dilma Rousseff earlier this year.
Rousseff's removal, which was described by the governments of Venezuela, Cuba, Ecuador, Bolivia and Nicaragua as a coup, marked the last phase of Brazil's development launched under Lula Da Silva at the start of the Golden Decade.
Today's low oil prices, budget deficit, and Washington's grand designs for the region have given way to pessimism in both Brazil and Mexico over what the future holds for Latin America's giants.
Source: Al-Ahed News
Comments
