Category: Blog

What Latin Americans Think of Trump

The comments throughout Latin America make it clear that most of the people in the region are terrified by the possibility that he might become president of the U.S. Anyone on the left, naturally enough, dislikes his harsh economic views and find lamentable his threats to discriminate against Hispanics and other minorities.  But it is people in the center-right countries of the region who have rushed to condemn the Trump candidacy.  The principal reason for their hostility is that Trump to them represents the authoritarian populism that has been a part of their recent past – and they do not like it.  Commentators in Argentina, Chile, and Peru have been especially severe in their criticism.  Some think a Trump presidency will set back democracy in Latin America.  What do they think it will do to democracy in the United States?

The Cuban Optimist

     A new definition of an optimist: a Cuban who believes that democracy will arrive on the island sooner rather than later and that friends outside the country should not slow the process by insisting that the Cuban government respect the human rights of its citizens.  To an outsider, it appears as if the current hierarchy of Cuban leaders is unwilling to leave power gracefully, or in any other way. 

    When I first visited Cuba not long after the collapse of the Soviet Union, the same optimists were confident that Fidel was organizing a transition to a new generation of leaders who would be able to maintain the gains of the revolution in a post-Cold War world. Today, despite all the changes and the promises of more change to come, the state bureaucracy is larger than ever and the island cannot produce enough food to feed the population.

     Can the infusion of tourist dollars make a difference the Cubans in the short run? My hope is that the transition in Cuba comes soon and in a peaceful manner.

Argentina Rejoins the World

    Argentina has made it back into the international capital markets thanks to having reached a deal with the holdouts who had been demanding payment on the defaulted bonds they held. The Government of Argentina already has borrowed nearly $15billion, in part to payoff the holdouts and in part to cover some temporary financial needs.

    The irony of the situation is that the holdouts used the so-called “pari passu” clause (that all holders shall be treated equally) which is the result of work by Carlos Calvo, an Argentine jurist in the 19th century who wanted to prevent powerful countries from using their superior force to demand payment on debts before other creditors.

    Now, the international community realizes that this clause makes it more difficult to re-financing the sovereign debt of countries in financial trouble. So, to meet today’s needs, bond contracts should drop the pari passu clause and add a clause that requires all holders to accept refinancing deals negotiated with a debtor in default. And, so, the evolution of the international financial community attempts to meet its current needs.

    We shall see if the Argentine experience facilitates that evolution.