
With the world economy still sluggish, Latin America will stand out as
a relatively bright spot—but not as shining as it should be. In a year of
few big elections, governments will have an opportunity to push on
with reforms, which some, notably Mexico, will take. And there is a
good chance that Colombia’s FARC guerrillas will at last agree to
demobilise.
Economic growth in Latin America will be solid rather than
spectacular, at between 3.5% and 4%, barely up on the 3.1% of 2012.
The uptick will come mainly from recovery in Brazil, where growth
should return to around 4% thanks to a combination of lower interest12/18/12 Americas: Latin America’s new normal | The Economist
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rates and cuts in business and consumer taxes. Peru, Chile and
Colombia will once again grow above the regional average. Latin
Americans will cast an anxious eye at China, for many now their
biggest single trading partner. Any sign of a Chinese slowdown turning
to slump would send the prices of the region’s commodity exports
tumbling. Conversely, an uptick in Europe and the United States would
boost spirits.
At home, upping the tempo requires productivity-inducing changes. In
that regard, much attention will be paid to whether Enrique Peña Nieto,
taking over as Mexico’s president on December 1st 2012, can push
through sweeping changes to allow private investment in energy,
starting with natural gas, deep-water oil and refining (see his article
(http://www.economist.com/news/21566314-mexicos-newly-electedpresident-sets-out-his-priorities-mexicos-moment) in this section). The
prospects are good, provided Mr Peña’s Institutional Revolutionary
Party can strike deals with the conservative National Action Party. In
Brazil, Dilma Rousseff will focus on implementing promised contracts
for much-needed private investment in infrastructure.
Of the bigger countries, only Chile faces a presidential election in
2013, in November. This will see a close race between the centre-left
Michelle Bachelet, a former president, and Laurence Golborne, for the
governing centre-right alliance. A new law makes electoral registration
automatic, swelling the potential electorate by more than half. But
voting is now voluntary, and apathy may help Ms Bachelet. Among the
smaller nations, in Ecuador Rafael Correa will win another term in
February against a divided opposition, thanks to the popularity
bestowed by an oil boom and social spending. April will see a
presidential election in Paraguay, in which the conservative Colorado
party will probably return to power. Following the election, Paraguay
will be restored to membership of the South American Union and the
Mercosur trade group, from which it was suspended after the
impeachment of Fernando Lugo in June 2012.12/18/12 Americas: Latin America’s new normal | The Economist
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The best news of 2013
may well concern
Colombia
In Argentina, 2013 will be a make-orbreak year for the president, Cristina
Fernández. At a mid-term congressional
election, probably in October, she will
seek to get within striking distance of the
two-thirds majority required to change the constitution to allow her to
stand for a third consecutive term. Her main hope is that a bumper
grain harvest and Brazil’s reviving economy will loosen a foreignexchange squeeze and head off recession. But if she falls short,
popular discontent at inflation may boil over into protests on the
streets.
In March the Falkland Islands (population: 2,600) will vote
overwhelmingly to stay a British overseas territory in a referendum
aimed at convincing the rest of Latin America to respect selfdetermination and drop its backing for Argentina’s claim to the
archipelago. But that will be hard work, especially if further oil
deposits are found off its shores.
Chronicle of a death foretold
In Venezuela Hugo Chávez will start a new six-year term in January
buoyed by his electoral victory in October, but facing uncertainty over
his health and the need for austerity after his spending binge in 2012.
The man to watch is now Nicolás Maduro, Mr Chávez’s new vicepresident. The opposition will hope to build on its respectable showing
in the presidential vote in an election for state governors in December
2012.
Reform in Cuba may take a leap forward, having slowed in 2012.
Fidel Castro has defied many predictions of his mortality, including
those of this publication. But in 2013 his luck, and long life, will at
last run out. His death will free his brother, Raúl, Cuba’s president, to
broaden Cuba’s incipient private sector.12/18/12 Americas: Latin America’s new normal | The Economist
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from The World In 2013 print edition
The best news of 2013 may well concern Colombia. President Juan
Manuel Santos will hope that the peace talks he has launched with the
FARC will end the oldest guerrilla insurgency in Latin America, dating
from 1964. The government wants the talks, taking place mainly in
Havana, to end well before the campaign for the May 2014 election (at
which Mr Santos can seek a second term). For the FARC, the incentive
is to reach a peace deal in time to allow it to take part in that election.
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