How best to respond to a crisis? Latin America has seen diverse reactions to tough situations over the last few days that have been at turns practical, futile, and downright shameless.
First, the shameless: the Brazilian congress’s attempt to use another crisis – the tragic airline crash that killed most of the Brazilian football team Chapecoense – as a distraction to effectively shut down a vast investigation into bribery at state-owned oil company Petrobras. Not so surprising, perhaps, given the amount of congressmen that are implicated in the scandal. But congress’s attempt to fast track measures that would allow for prosecutors and judges to be prosecuted for abuses of power backfired. Not only were there massive street protests, but the judiciary responded by suspending the head of the senate after he became a suspect in a corruption case.
All of this leaves President Michel Temer in an increasingly fragile situation of his own, as he tries to push through crucial fiscal reforms aimed at hauling Brazil out of its worst recession in a century. In a bid to win back market confidence and regain the initiative, this week Temer presented a plan to reform Brazil’s pension system, considered one of the world’s most generous.
The prize for the most futile attempt to solve a crisis must surely go to Venezuela’s benighted government, which this week introduced higher-denomination banknotes to alleviate a situation that is increasingly looking like Weimer Germany. Yes, Venezuelan shoppers will be delighted that they will no longer have to lug around such unfeasible quantities of cash just to buy groceries. But it is a skin-deep measure that will do absolutely nothing to fix the underlying problems causing Venezuela’s economic implosion.
Thankfully, there are more clear-thinking people around. Michael Bloomberg’s practical advice to Mexico, faced with the crisis-in-the-making (as many Mexicans see it) that is a Donald Trump presidency? Ignore what the temperamental property tycoon says, and pay attention to what he actually does, says the cool-headed former New York mayor.
Indeed, Mexico is plugging on for now. In the first major test of investor appetite in Mexico since Trump’s election victory, the government held a successful auction for deepwater contracts on Monday that saw contracts awarded to Statoil, BP, Total, Chevron and ExxonMobil. But China was the big winner, with Cnooc grabbing two of the ten oil blocks on offer in an auction considered the jewel in the crown of Mexico’s much-vaunted energy reform that aims to open up a sector closed to private exploration and production for nearly 80 years.
Quote of the week
“What’s all this hyperventilating when the one thing you know is that Donald Trump has said the equivalent of nothing – he’s been on both sides of every issue… You can’t do anything about what Donald Trump is going to say next week, so why worry about it?” - Michael Bloomberg, in advice to Mexico.
Women of the year
Dilma Rousseff: ‘A woman in authority is called hard, while a man is called strong’
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