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.
Events in Latin America this week signalled that tempestuous times in the region show no sign of abating – literally and figuratively.
Thousands were evacuated from their homes in Nicaragua as Hurricane Otto made landfall in the Caribbean state, also forcing people in neighbouring Costa Rica to flee for their lives. The 110-kilometre winds, classified as “dangerous” by the US National Hurricane Center, brought heavy rainfall, causing Costa Rica to declare a national emergency amid fears of landslides and damage to valuable coffee crops.
On the political front, Colombia`s President Juan Manuel Santos signed a revised peace accord with the Revolutionary Armed Forces of Colombia, or Farc, in spite of losing an historic referendum on the issue less than two months ago. Instead of holding another vote, the new deal will be put to congress, where the president, who won this year`s Nobel Peace Prize for his efforts to secure the agreement, has a majority.
His critics, led by Álvaro Uribe, the divisive but popular former president who spearheaded the campaign against a deal with the Farc, decried the new pact as barely different from the one rejected in the referendum.
In Brazil, the start of a trial of former president Luiz Inácio Lula da Silva is expected to be a source of potential instability. The once wildly popular leader is accused of hiding assets hoarded from corruption related to state-owned oil company Petrobras. He denies the claims and any attempt to jail him could generate protests from militant supporters of his leftist Workers` Party, the PT.
Even staid Chile, seen as the responsible corner of South America for its steady management of its economy, may be heading for a period of turbulence, analysts warn. Protesters have burned buses, barricaded streets and even stormed parliament, angry over what they see as deepening inequality in spite of efforts by the government of President Michelle Bachelet and her left-wing coalition to introduce reforms. They warn the climate is ripe for a Trumpian populist to enter the picture.
On the business front, in good news for Brazil, Maersk Line is forecasting a doubling of beef exports from Latin America`s largest economy to China by 2020 as demand grows in the Asian giant for protein. Mexico also had some reason for cheer after the fear caused by Donald Trump`s election victory in the US. The country can expect a windfallof as much as $2.9bn next month from its annual oil hedging programme and an expected bonanza from the central bank that could pour close to $20bn into government coffers in April, analysts say.
Quote of the week
The new accord “possibly won’t satisfy everybody, but that’s what happens in peace accords” – Juan Manuel Santos, Colombian President.
“This accord will have a huge problem of legitimacy and those in the opposition will try to deepen this whenever they can” - Sandra Borda, a Bogotá-based political analyst.
Chart of the week
Emerging market investors wait for Trump to show his hand (Premium)