As Latin America’s two biggest economies, the performance of Brazil and Mexico will always have a tremendous impact on the economic health of the region as a whole. In this current chapter of global politics — with the US-China trade dispute and the ongoing debacle of Brexit which threatens economic harm for both the UK and EU — nations across Latin America are once more looking closer to home to bolster economic growth, given the instability further afield.
For Brazil and Mexico, the past calendar year has seen two new presidents emerge on the scene: the rightist Jair Bolsonaro in Brazil, who is a clear contrast to the leftist Andrés Manuel López Obrador, aka AMLO, in Mexico. Each has different visions for their nation and the region around them. But to what extent could they find a common purpose? And how may the Caribbean stand to benefit?
BOLSONARO AT HOME AND ABROAD
Bolsonaro won the presidency amidst a cloud of scandal that saw the past three presidents, Luiz Inácio Lula da Silva, Dilma Rousseff and Michel Temer, each accused of corruption, offset by accusations of political witch hunts in response. Views vary on the scandal but all agree that it has been hugely damaging to Brazil.
As a longtime politician who had never ascended into the political elite before, Bolsonaro was able to campaign as an outsider, promising swift and bold change accordingly. So far these promises have been largely unfulfilled. Bolsonaro’s presidential term is young but, even where headway has been made, such as his key promise to deliver pension reform, it has quickly become embattled; strikes, congressional antics, and a reduced rate in expected public savings — generating US$ 200bn when Bolsonaro’s goal was closer to US$ 327bn — have led some to declare the reform programme dead before it has even been introduced.
In foreign policy, Bolsonaro’s ambition to drive change has found more momentum, notably strengthening ties with the US and Israel, with an announcement in March 2019 that he would open a diplomatic office in Jerusalem following on from Trump’s shifting of the US Embassy there from Tel Aviv. With his domestic policy being frustrated at home, Bolsonaro will be on the lookout in the second half of this year for more foreign policy moves that he can declare successes, hoping to bolster his historically low approval rating.
AMLO’S ONGOING CAMPAIGN
Like US President Donald Trump north of the Mexican border, critics of AMLO have cited the ongoing blur between his role as president and presidential candidate. Even after half a year in office, AMLO is still racking up regular public appearances in front of thousands of people, filled with promises of new jobs and infrastructure projects.
Some may say this is just reflective of a modern presidency; others would say it’s time to wind back the public speaking and up the pace on policy implementation. AMLO has maintained a greater popularity among his nation than the Brazilian president has at home, but on key metrics, such as the high murder rate and high gas prices — campaign promises that AMLO said he would address and bring down — there has been little progress.
Any observer from afar may well say that these presidents just need more time, but this is offset by the fact that most new leaders of government have their greatest political capital when they first take office. Should they be unable to stamp their authority and effect change early on, the prospects of them being able to do so down the line will decrease. So both leaders are eager to proclaim new success, abroad if not at home.
A CARIBBEAN CONNECTION
Where Bolsonaro and AMLO share a common perspective is their readiness to up-end prior political norms and conventions. While on paper the two sit at opposite ends of the political ideology, they each contend that their nations need a new path in years ahead if they are going to grow and thrive. It is here that Caribbean countries have a unique appeal, offering these two economic powers a collection of nations with stable democracies, steadily growing economies, and an ambition to build greater international trade links.
Mexico and Brazil are both pursuing immense financial reforms. In this field, the Caribbean already has a strong industry and leading global professionals. There is also emerging recognition of local expertise within the sectors of digital technology, renewable energy and emerging public instruments, like citizenship by investment programmes and cryptocurrency (although these latter aspects remain controversial in the minds of many).
There is also the matter of size. The Caribbean cannot lay claim to the same population as China or India; nor the economic diversity of so many different industries that can compete on a global scale, as in Beijing and New Delhi. However, there are a number of areas where Caribbean countries can make a strong contribution, and look to reap the rewards. Just like these two nations of the Americas, many Caribbean economies aspire to greater diversification in the years ahead, with new trade at its core.
THE FUTURE
The competitive aspect of Brazil and Mexico cannot be overlooked. Currently their chief trading priorities are different, with Brazil primarily focused on building trade in South America whereas Mexico looks north to the US and Canada. In recent years the two nations have had notable economic skirmishes in the oil and automotive industries, and this won’t change anytime soon.
One should also consider the role of other nations, like Argentina — in 2018 the largest exporter of automobiles to Brazil with a value of US$ 1.8bn compared to Mexico’s US$ 1bn. Ultimately, there remains a massive gulf in economic size between Brazil and Mexico and all other regional nations. Brazil’s economy is roughly two and a half times that of Mexico, and Mexico’s is three times bigger than Argentina’s, the region’s third largest economy.
This means a greater presence in the Caribbean of these two economic powers could bring major benefits to their citizens and the region alike. With two presidents keen to break from the norm, there’s never been a better time to drive new trade with Latin America’s two biggest economies.
