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Friday, November 11, 2016

Ft LatAm Viva For November 11, 2016

7:35 AM (2 hours ago)
to me
Trump and Latin America: in opposite directions
By John Paul Rathbone 
November 11, 2016
The Mexican peso crumpled, the Cuban army began military maneuvers, Colombia’s “No” vote campaigners cheered, Peru’s president probably wished he had not joked about cutting ties with Washington if Donald Trump won, while the rest of the region congratulated the US president-elect through gritted teeth. “Here’s to @realDonaldTrump’s victory,” Evo Morales, the president of Bolivia, tweeted sarcastically. “We hope to work against racism, machismo and anti-immigration for the sovereignty of our peoples.” Brazil’s Foreign Ministry sent a curiously unsigned message, with bland bromides about “working together” and “new opportunities”.
Yes, it’s a brave new world in financial markets. The current view is that a Trump presidency likely means fiscal stimulus, thus stronger US growth in 2017, modestly higher inflation, perhaps higher energy prices, and higher interest rates.  For Latin America, that is a mixed bag. Higher US interest rates and less outward-bound capital means weaker Latin American currencies: they have all fallen since US election night, although feverish Argentina bond-buying continues to buoy the peso. Higher oil prices, if they materialise, will help energy producers throughout Latin America - perhaps even in Venezuela, although probably not enough to stave off eventual default.
A Trump presidency also likely means more US protectionism – ironically just as South America is getting serious about trade liberalisation – although, again, it is Mexico that is in the firing line. Officials there are putting on a brave face for now on the possibility that Mr Trump will not do what he promised, namely build a wall, tear up Nafta and deport illegal immigrants.
They may find ready allies in the US corporate world. Cadillac’s president, Johan de Nysschen has already said General Motors will not yield to political pressure to relocate plants back to the US.What about US foreign policy, though? Mexico aside, the most obvious countries in the spotlight are Cuba, Colombia and Venezuela. In Cuba, Barack Obama’s policy of rapprochement has been carried out by executive order and so could easily be reversed or tweaked. In Colombia, Mr Trump, alongside No voters in the recent referendum, may view the FARC peace accord as a “bad deal”, although in putting “America First”, he is just as likely not to want to get involved in another country’s internal conflict. In Venezuela, although unilateral US action remains extremely unlikely, there may be stronger rhetoric from the White House about the multiple failings of Mr Maduro’s administration. (The Venezuelan government and the opposition held their second round of Vatican-mediated talks on Friday; hopes are not high of a breakthrough.)
All this, though, is only speculation as next to nothing is known about whom Mr Trump’s future advisers on Latin America might be.On a personal note, one of the most curious features about this extraordinary year has been to watch how much of South America has moved away from populist rule just as the US has seemingly moved towards to it. That contrast is true even of autocratic Nicaragua, where Daniel Ortega on Sunday“won” a third term alongside his wife, cementing what critics call a family dynasty. Such dynasties, of course, fed the disgust of so many US voters who were fed up with the Clinton and Bush families, which in turn helped propelled Mr Trump, “the change agent”, to a truly extraordinary win.  Congratulations Mr Trump. 
Quote of the week
“We have been looking at scenario planning. The view for us is that we’re a large-scale business, we have significant capital investments we have made into the plants. It’s important to note that we produce for the global stage not only for North America. We’re able to divert a lot of Mexican production to serve other global markets that require our vehicles. I think that we will be able to accommodate whatever new developments lie in store” - Johan de Nysschen, president of Cadillac, speaking after Donald Trump’s election victory about GM’s Mexico investments.
Chart of the week
Venezuela’s liquidity crunch
Other views
Latin America reacts to Trump’s win
At least one Brazilian politician is happy about Trump’s win
US-Colombia relations under Trump
What a Trump presidency means for Latam organised crime
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The week in review
Five-star farmstays in Ecuador
 
Hacienda hotels offer a short cut to the soul of the country — and an antidote to the fripperies of the hospitality industry
 
 
Peso drops past 21 per dollar as sell-off continues
 
 
 
US against the world? Trump’s America and the new global order
 
In 1989, the political scientist said liberal democracy signalled ‘the end of history’. He looks at the nationalist politics now reshaping the west
 
 
Petrobras asset sales fuel Brazilian M&A revival
 
Scandal-hit oil group seeks petrol stations deal as foreign investors return
 
 
Mexico prepares for tough negotiations with Trump’s America
 
Peña Nieto’s government seeks common ground to head off a trade war over Nafta
 
 
Venezuela: A nation in bondage
 
The oil-rich country is in chaos but its high-yielding debt is tempting investors
 
 
US declares La Niña weather pattern
 
 
 
Mexican peso settles at lower level after Trump victory
 
 
 
Mexican president says election to bring 'new chapter' in relations with US
 
 
 
Mexico takes the brunt of US election result
 
Majority of emerging market assets also suffer
 
 
Trump plans blitz on immigration and Obamacare
 
Republican control of Congress strengthens president-elect’s hand on policy
 
 
Mexico congratulates Trump on victory
 
 
 
Mexico holds off on immediate action to prop up peso
 
 
 
Foreign investors show little faith in Colombia’s peace dividend
 
Greenfield investment has dried up as uncertainties persist
 
 
'Latino Trump' betting on $1bn luxury developments in Mexico
 
 
 
Merkel takes liberal-democratic stand in post-Trump world
 
Chancellor’s congratulations to president-elect come with conditions
 
 
Clock ticks for Venezuela’s political rivals
 
Threat of widespread violence looms over delayed talks with opposition and government
 
 
Foreign investors show faith in Argentina with bond-buying spree
 
But high interest rates attracting them are blamed by locals for hurting recovery
 
 
Cold comfort for Latino workers in Las Vegas
 
Culinary workers union wins local battle but loses national war
 
 
US rivals use toxic election to pour scorn on American democracy
 
Commentators from Beijing to Tehran swipe at Trump and Clinton’s ‘ugly’ campaigns
 
 
Nicaragua's Ortega wins third presidential term in landslide vote