Last month we summarised part of an article in Forbes highlighting some of the stories about Latin America likely to make the headlines this year. Here is part two; a summary of the second set of stories to watch with up-to-date news and a mention of LSE Mexico Week.
The never-ending war on drugs
Forbes acknowledges that although drugs are by no means a new problem in the region, many dynamics have changed, which could require resistance tactics to adapt. Among the many changes: Peru has overtaken Colombia as the world’s largest cocaine producer, the first coca plantation was discovered in rural Panama last year, and marijuana laws are shifting; it has been legalised in two US states, with Uruguay becoming the first nation to fully legalise the trade from April. Forbes explains that changes in the US will no doubt affect trafficking in Mexico, which remains a huge player in the production of marijuana, heroin and methamphetamines. Meanwhile, a recent article by the BBC explains that the Uruguayan government hopes that its legalisation from production to distribution will reduce the number of people using a cheap, highly addictive, new potent substance called “pasta base”.
Challenges ahead for Bachelet
Our post back in December, The hard part is still to come…, explained that Michelle Bachelet’s return to office, although greatly celebrated, came at a cost: significant changes are expected. Forbes explains that following her inauguration earlier this month, the returning president is likely to push many reforms in her first 100 days in office. This will include an increase in corporate tax rates to cover changes to the health and education system. BNamericas has already reported that there are plans to double the funds, in comparison to the previous administration, allocated for hospital infrastructure. Bachelet isn’t shy when it comes to undertaking much needed change. During her previous stint as President, her decisions helped save billions of dollars in revenues to spend on issues such as pension reform. But unfortunately, as the new Finance Minister Alberto Arenas highlights in the Global Times, Bachelet is inheriting a ‘sluggish economy’ with growth lower than expected. Reuters also explained that the previous Finance Minister, Felipe Larrain, has warned Bachelet that her tax reforms may need to be ‘more moderate’ than planned. In any case, Forbes states that if reforms fail, it’s probable that students will protest once again. In fact, they predict that social unrest is likely to continue either way given the persisting trend in community activism.
Exciting times ahead in Mexico
José Ángel Gurría at LSE Mexico Week
Forbes highlights that while big transformations are taking place in Mexico under President Enrique Peña Nieto’s perhaps ambitious reform agenda, the majority of his first year has been spent making constitutional changes. The president now has the task of passing various regulatory reform bills through Congress, Forbes explains. During LSE Mexico Week last week, we were lucky enough to hear José Ángel Gurría, OECD Secretary General and former Mexican Secretary of Foreign Affairs (1994–1997) and Secretary of Finance (1998–2000), give an insight into the economy and development in Mexico. José insisted that the biggest challenge now is successful ‘implementation, implementation, implementation’, of the telecoms, oil and gas, electricity, financial and political reforms. But this will depend on many things including the approval of laws and regulations. José put it in a rather interesting way; it is time for the legislative dentists to begin pulling the teeth out of the legislations. Although the implementation process could be slowed down slightly by political groups opposing certain reforms, Forbes explains that it’s unlikely that the much needed reform process can be derailed. José claimed his message was this; there are exciting times ahead in Mexico. However, the Wall Street Journal reminded us last week that we shouldn’t ‘celebrate Mexico’s reforms just yet’ given the disappointingly low growth last year.
To see more on LSE Mexico week see an article in Spanish.