South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.
Populism may be largely on the run in the Southern Cone of Latin America dominated by Argentina and Brazil. But in Venezuela, socialist president Nicolás Maduro can appear to behanging on with his fingernails to power. After curbing an attempt to hold a referendum on his unpopular rule, the successor to Hugo Chávez this week faced mass protests from opposition leaders who claim he is running a dictatorship.
In initially largelypeaceful protests, the opposition called for a general strike and threatened to march on the presidential palace next week. But the 53-year-old Maduro is not flummoxed. He knows he cannot easily be legally removed as the constitution does not allow for impeachment.
Of course, a revolution is possible, since he is so unpopular, with 90 per cent of Venezuelans believing the country is going in the wrong direction amid triple-digit inflation and food shortages. But he has the Supreme Court on his side and the army. He also kept foreign investors off his back this week when lenders to Venezuela’s national oil company PDVSA, narrowly agreed to a debt swap.
Elsewhere on the continent, Mauricio Macri, Argentina’s new president, is reaping the rewards of pro-business policy-making by embarking on a debt extravaganza. Less than a year ago, Argentina was facing a balance of payments crisis after 12 years of populism. This year, the country has stormed back onto capital markets with public entities issuing $40bn of debt, half of it in foreign currency. Investors are betting that the economy will return to growth of 3-4 per cent next year after an expected contraction of 2 per cent in 2016.
Across the border in Brazil, populism is largely on the retreat following the August impeachment of leftist former president Dilma Rousseff. But while she has been replaced with a pro-business federal government, in Rio de Janeiro an evangelical gospel singer looks likely to win municipal elections this Sunday. The candidate, Marcelo Crivella, wrote in the 1990s of how other Christian denominations have demonic rituals and Hindus drink the blood of their children. He has since disowned these views, but his rise is a sign of the growing weight of alternative sources of power in Brazilian politics, such as the evangelical churches.
Quote of the Week
“They needed whatever cash the market was willing to offer. PDVSA made a lot of noise and threats but at the end of the day they have no leverage. This was credit at market terms” - Siobhan Morden of Nomura