Weekly Business News and Intelligence from Latin America
This week: Special edition?-?8?June?2022
The Jubilee Weekend | The Summit of the Americas | Elections in Colombia...?
The Jubilee Weekend
Whilst here at Deheza, we're Latin America specialists, we are headquartered in the heart of London where this weekend the capital celebrated?the 70th?anniversary of the reign of Queen Elizabeth II. The prestige of the British Monarch remains strong across the anglophone Americas but its influence is much diminished. The Commonwealth's activities in the region have largely been reduced to photo ops and the organisation talks much about helping the region's smaller nations access finance and pushes for better governance - most countries across the region pay little attention to it.?
In a sign last year of further loosening ties,?Barbados?become a republic - Jamaica, the Bahamas and others have?signaled?their intention to do the same. Historic ties bind but they bind for only so long - the Caribbean is swept up by nationalist sentiment, royal ties - good for souvenirs - chime less well with today's more socially and racially-conscious generation. Add into the mix?lackluster investment?ties from the UK in comparison with Washington and Beijing and it's hard not to envisage London drifting even further off into the horizon.?
The Labour Party entrenches its political dominance as Barbados becomes a one-party state.
Royals meet reality on Caribbean tour.?
The Summit of the Americas
This week the Summit of the Americas begins, the organisation of which has become something of a pantomime farce in recent weeks -?will they / won't they??Twitter reaction to Washington's push to exclude the region's authoritarian regimes from showing up in Los Angeles. In the end, the Biden administration barred Venezuela, Nicaragua and Cuba from attending - much to the chagrin of the region, not least Mexico where president AMLO decided last minute not to turn up. High on the agenda are just the kinds of themes that regional summits love: digital inclusion, governance, climate change etc. The problem is that Latin America has persistently struggled to establish a unified voice on such issues - the region lacks a meaningful equivalent to the EU or ASEAN.?
Climate?and?educational?initiatives are likely to be announced by the administration but this will do little to dent Latin America's addiction to?Chinese credit. Argentina joined Beijing's?Belt & Road Initiative?in February and China is soaring to the top of the list of the region's prime trading partners. Washington will need to offer something more substantive than glitzy photo ops under the Californian sun to stop Xi Xinping from making further inroads in its backyard.?
Argentina signs up to China’s signature infrastructure initiative.
Washington needs oil, Caracas needs money.
Kamala Harris taps private sector agreements to bring investment to Central America.??
Elections in Colombia?
As expected, leftwing former guerrilla?Gustavo Petro?won the first-round vote of Colombia's presidential elections with more than 40% of the vote. He now faces conservative populist Rodolfo?Hernández in a run-off scheduled later this month.?Hernández?will force an uphill struggle for Petro as voters return to the polls; Colombia's myriad conservative congressional coalitions will throw their weight behind his candidacy. Whilst Petro's campaign excited younger generations and made shrewd use of social media and social movements, much of the country remains deeply scarred by the civil war and politically conservative. Indeed,?our sources believe that Petro has little manouvering room.
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More broadly, the stability of the peso will be significantly affected by the outcome of the elections, likely negative if Petro emerges victorious. Our sources believe that once a new administration is installed, structural?tax reform?will sit high atop the to-do list. Without such a reform,?Bogotá?will find it extremely difficult to continue financing the public debt and soaring budget deficit.?
Colombia is set for a leftward shift, what does this mean for markets?
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Insights?
Freely available, extended reports on issues or industries that are shaping the agenda in Latin America. If you’re keen to publish an insight piece, get in touch with our editor James Knell ([email protected]).
We're delighted to share with you our latest Insight article - a timely analysis written by?Andrea Burstin?on the increasing opportunities for nearshoring across Central America and Mexico.?Geopolitical unpredictability, ESG concerns and countering China’s march across Latin America means that Washington will increasingly look to reorient supply chains to the hemisphere. Nearshoring has never look so attractive.?
Coming next week...
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Strategic Intelligence in Latin America
Deheza?works?directly for our clients to provide deep local?Strategic Intelligence?on the issues that matter most to them including a wide range of corporate issues such as strategy, risk, reputation, government affairs and other commercial, political, social and governance issues.
Strategic Intelligence?provides important colour on issues that are hard to quantify but critical to decision-making processes by gathering the views, independently and discreetly, of the best-placed local executives and thought-leaders.