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Tuesday, August 25, 2015

A Latin Spring? @ISAIntelligence

Will the political unrest in #LatinAmerica lead to a "Latin Spring"? An interesting analysis from ISA. 

25 August
ISA News
A Latin Spring?
Crime, Corruption and a Weak Economy
Taking it to the Streets
In recent months, the combination of a number of major corruption scandals and a sharp economic downturn has led to an increase in political unrest across Latin America. This has resulted in massive street protests and strikes in many countries in the region, leading some experts to proclaim that the region is on the verge of a "Latin Spring", much like the popular protests that brought down corrupt governments in the Middle East and East Europe in recent years. With the outlook for the region's economy worsening thanks to the economic downturn in China, the potential for even higher levels of political unrest in the near future is great and this could result in a series of major political changes across Latin America.
Corruption at the Highest Level
From Mexico in the north to Argentina in the south, most Latin American countries are plagued by high levels of crime and corruption. The northern half of Latin America (including Mexico, Central America, Venezuela and the Caribbean) suffers from some of the highest murder rates in the world, while Brazil's largest cities are also plagued by dangerously high levels of crime. Meanwhile, corruption has long been a problem in Latin America, but recent scandals in the region have reached to the highest levels of government, resulting in popular outrage in many countries in the region. Nowhere has this been more evident than in Brazil, where the ongoing Petrobras scandal has implicated a number of current and former government leaders and has resulted in President Dilma Rousseff's approval rating falling to less than 10%. Altogether, crime and corruption are spiraling out of control in much of Latin America, despite the fact that nearly all of the region's political leaders have been popularly elected in relatively free and fair elections.
Economic Troubles
There is also an economic element to the popular unrest that is growing in Latin America. A few years ago, much of Latin America was recording relatively high rates of economic growth, thanks to soaring demand for the region's natural resources in China and other large emerging markets. However, a downturn in demand in these key export markets, coupled with the weakness of the region's domestic markets, has resulted in a serious economic slump across Latin America in recent years. Moreover, many governments in the region have failed to enact policies that would improve their countries' economic competitiveness and this has resulted in a lack of foreign investment and economic diversification, key factors in the region's current slump. As a result, the region's economy, with a few exceptions, has failed to develop many high-growth manufacturing and service industries that are needed to ensure higher rates of economic growth over the longer-term and to compete in a highly competitive global economy.
Little Faith in Democracy
It remains to be seen if the massive street protests that have been taking place in countries such as Brazil, Venezuela and others will spark major political changes in the region. Unlike in the Middle East, Latin America holds relatively free and fair elections and voters in the region have had the ability to oust unpopular leaders and governments at the ballot box. However, elections in Latin America have largely been dominated by personalities rather than political parties and this has led to a political system that can change dramatically with the emergence (or disappearance) of individual leaders. Moreover, this access to democracy has done little to reduce crime and corruption in the region, nor to boost the region's economic fortunes. As a result, an increasing number of people in the region are disillusioned with their democratic systems and this could lead to the rise of more extreme political movements on both the right and left of the political spectrum in the coming years. This would prove to be a major step back for Latin America and a major deterrent to the region's economic development, to the detriment of the region's 600 million inhabitants.

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