The economies of many Latin American countries are growing significantly for the first time in several years. This change is due to several factors, including increased market prices of commodities exported from the region as well as the strengthening of trade alliances within Latin America. This latter development is a result of U.S. President Donald Trump’s signaling of a protectionist path. In response to anticipated policies from Trump’s administration, Latin American countries are working to boost their relationships with non-U.S. trade partners.
Whether this growth is sustainable is yet to be seen. The deep and persistent inequality in most countries in the region is a significant obstacle, and major elections (both presidential and legislative) in many Latin American countries in 2017 and early 2018 will impact economic stability and growth as well.
Read my full report on the Geopolitical Intelligence Services website.
New government and U.S. backed investigators pressure drug cartels in Guatemala
El Salvador poised for boom if government can reach deal with gangs
Weak state in Honduras may resist outside pressure for reform
In the summer of 2014, nearly 50,000 unaccompanied children surreptitiously and illegally crossed the border into the United States. The size and humanitarian shock of this migration created a mood approaching panic in the U.S. The children had come from the Northern Triangle of Central America – El Salvador, Guatemala, and Honduras – fleeing from violence that had turned poor neighborhoods into war zones and economic stagnation that doomed many school leavers to unemployment.
How long can you hang on the edge of an abyss without falling in? That’s the question being asked about Venezuela. People are dying in the hospitals because of shortages of medicines and bandages. The annual inflation rate has reached 700 percent. The country is in debt to the tune of $170 billion, $7 billion of which is due by the end of the year. With oil at $50 per barrel, there is little cash in the treasury to cover that payment and none to pay for imports needed to relieve the excruciating goods shortages. Chiefly suffering are the poor, whose welfare the Socialist government claims to make its principal objective.
Venezuela’s opposition now has a majority in the legislature and is pushing for a recall referendum to oust President Nicolas Maduro. In response, Mr. Maduro has declared a state of emergency, distributed arms to civilian vigilante groups and brought troops out onto the streets to block opposition protests. The ruling Chavistas are meanwhile using every trick in the book to stall the recall referendum, closing the only constitutional route to a change in government.
The details of this crisis have been described in a GIS special report by Dr. John Polga-Hecimovich, who outlines several possible scenarios, none of them optimistic. At every turn the government is growing more authoritarian, the shortages are getting more acute and daily life for Venezuelans is becoming more and more unbearable. The probability of violent protests and bloodshed increases each day.
What is to be done? With domestic forces at an impasse, an outside moderator seeking some form of compromise is the best solution. Luis Almagro, the secretary general of the Organization of American States, has invoked the Inter-American Democratic Charter and summoned member countries to discuss “alteration of the constitutional regime” in Venezuela.
‘The OAS labors under a legacy of U.S. domination. That makes it easy for Venezuela to dismiss any pressure as intervention in disguise
But the OAS is the wrong intermediary to end the Venezuelan standoff. Firstly, Mr. Almagro has not concealed his hostility toward Mr. Maduro, which undermines his credibility as an honest broker. More important, the OAS labors under a heavy legacy of domination by the United States. That makes it easy for Venezuela’s government to dismiss any pressure from the OAS as U.S. intervention in disguise – an opinion that could be shared by many member countries.
A better go-between – indeed, the only viable one – would be the Union of South American Nations (UNASUR). The crisis in Venezuela is a perfect opportunity for South America’s leaders to protect democratic governance and define their regional identity. With new governments in Brazil and Argentina demonstrating a willingness to act, Chilean Foreign Minister Heraldo Munoz, an experienced diplomat and outspoken defender of democracy, could join his colleagues in UNASUR in bringing the two sides in Venezuela to the negotiating table. Without an international effort to broker a compromise in that country, the outlook is for more suffering and a growing likelihood of bloodshed.
The United States has been trying for decades to solve its drug problem by conducting a War on Drugs. That policy has failed and will continue to fail, so long as the declared enemies are the producing countries and the criminal organizations that ship the goods to the U.S.
The three countries in Central America that comprise the “Northern Triangle” – Guatemala, El Salvador and Honduras – are the transshipment route for 80 percent of the illegal cocaine entering the U.S. It is no accident that the three countries are also the starting point each year for tens of thousands of migrants to the country.
The U.S. considers both the drugs and the immigration threats to national security. Washington sees the area as a geopolitical unit and has militarized its response to the drug trade in the form of the Central American Regional Security Initiative (CARSI).
The trouble with this policy is that these countries’ populations consider the military part of the problem. Along with poverty, violence and a lack of accountability among the military and police are the principal drivers of mass migration to the U.S. The Obama administration has attempted to deal with the economic and social drivers of migration through an initiative called the Alliance for Prosperity, but Congress has been slow to fund the project.
‘Washington sees the area as a geopolitical unit and has militarized its response
All of Central America was a war zone during the Cold War. Most significant for the geopolitics of the region, the conflicts in El Salvador and Guatemala could be resolved only with outside mediation by the United Nations, the Organization of American States, and Mexico. In neither of these cases could the U.S. determine the outcome. Local governing elites were unable to suppress armed opposition.
In Honduras, a staging ground during the Cold War for armed intervention in the rest of the region, the political establishment has managed to maintain its grip on the country. It even got away with an old-fashioned coup against a populist president in 2009. In El Salvador, the Marxist guerrillas evolved into a political party and compete with the old ruling class for control. In Guatemala, the elite cling to authority as the International Commission Against Impunity in Guatemala (CICIG in Spanish) has succeeded in bolstering the judiciary to the point where it was able to prosecute the former vice president and president for corruption, pushing both of them from office.
The principal problem in El Salvador is the violence of the maras (gangs). This requires improving the police and strengthening the judiciary. In Guatemala, the guarantors of the peace must continue to force the government to play by its own rules. In Honduras, the U.S. must push the government to expand the political space for the opposition and the press. A one-size-fits-all economic development program will not work, nor will providing more equipment for armed forces that are out of control and corrupt.
Focus on attacking production, rather than consumption, has had disastrous results
Violence and corruption have escalated in countries along the transit route for illegal drugs to the United States
New policy approaches will be needed from both the U.S and Latin America
Over the past two decades, the production, trafficking and consumption of illegal drugs has spread throughout North and South America, as well as Europe, with devastating consequences. Latin America has suffered the most from the international community’s insistence on dysfunctional drug policies.
Neither an economic slump nor slumping popularity has deflected Michelle Bachelet from her reform agenda. Amid a leadership vacuum in Latin America, the Chilean president looks far from being a lame duck. Read More Here
United States President Barack Obama will visit Cuba on Monday, March 21. He will be the first sitting president to do so in 88 years. The trip carries some historic weight for Mr. Obama, as it highlights an accomplished foreign policy breakthrough; he first pronounced a push for rapprochement with Cuba back in December 2014. The question though, is: will either party gain from the Havana call? Read More Here
GIS SPECIAL REPORT
Chile’s President Michelle Bachelet has wasted no time since being elected in a virtual landslide a year ago to push through a catalogue of reforms. The socialist president promised in her election campaign to reduce inequality and to be more responsive to the popular will. And she is ramming through a change agenda against opposition calling for greater compromise and in the face of two debilitating financial scandals which threaten to undermine her leadership. READ MORE