The Eurasia Group describes Latin América’s performance in 2021 as disappointing. To back its rating the Eurasia Group lists among other weaknesses the region’s precarious fiscal conditions and the economic impact of covid 19 which has enveloped voters in a get even sentiment vis-à-vis incumbents while searching for miraculous leaderships. Under such conditions nobody expects the region to successfully bounce back either this or next year. In short, while Asia is already bouncing back and Africa seems to have convinced corporations to near shore in the region thereby boosting its investment attractiveness, in Latin America meanwhile politics and economics seem to be competing for the loser spot.
In politics a panoply of elections will most certainly produce unexpected results. In Argentina President Fernandez could find himself trapped in a carefully crafted box after the congressional elections. In spite of leading a successful coalition of Peronist factions deteriorating economic and health conditions are dissolving the glue that tied the coalition together. In parallel many NGOs in the provinces have turned into political associations that are demanding freedom from traditional Peronist politics and reassessing the Macri experiment which tested Peronist domination of Argentinian politics. Congress could thus be more fragmented than ever and building consensus around macro-economic policies that Argentina needs to adopt might be elusive. Argentina will most likely muddle through the next two years without undertaking a desperately needed fiscal and infrastructure revamp. Brazil will most likely follow the same course as Argentina with president Bolsonaro losing all his outsider appeal to an incredibly maladroit handling of the covid19 crisis. With Lula on the loose to reinitiate his political life he will face increasing opposition from PT and its satellites. Nothing will get done and the country will drift into political anarchy and economic decay. In Mexico Mr Lopez Obrador might keep a significant majority in congress but will most likely lose current two thirds majority that he needs to change the constitution and stay in power. Meanwhile the business climate will deteriorate as he continues to test economic laws of gravity promoting projects that are not likely to produce income.
And while this comedy of errors unfolds at the center stage of power most politicians miss read emerging voters. In most Latin American countries the majority of voters are Millennials and Gen Xs. None of these demographics particularly care for political parties. They do care for causes being the environment the most important. Also Covi19 has liberated in many nations entrepreneurial talents that were trapped either by excessive regulations or by economic cronyism. These demographics are very unlikely to support political leadership that see their nations through rear vision mirrors. Further their lives are partially nestled in cyber space. They can thus escape national politics and national economic realities. As they begin to derive income from foreign sources independence from national leadership will slowly materialize. And that will be the time when these voters will sack the past. But that unfortunately will not happen this or next year.