After mostly sidestepping the global financial crisis in 2008, many in Latin America welcomed the 2010s as “Latin America’s decade.” But it’s been quick to fizzle out. Now, with the World Bank and IMF projecting ho-hum growth over the near future, come the excuses.
Brazil stood first in line for comeuppance. Since 2011, the economy has underperformed, leaving key policy hands to point fingers at the Americans (for quantitative easing), the Chinese (for currency manipulation), the Japanese (ditto), and just about everyone else. Last week the Financial Times poked fun of Guido Mantega’s “ability to put an optimistic spin on any piece of news.”
Meanwhile, Mexico’s momentum—a giddy combination of cutting into Brazil’s lead as the region’s largest economy, tentative signs that the drug war may be waning, and the rapid-fire reforms of the country’s new telegenic president—is slowing. The official growth rate there was recently revised downward to 3.1 percent, from 3.5 percent in January. To this, the government partly blamed the early Easter holiday; with its usual degree of dry wit, The Economist noted lackluster data for December was chalked up to Christmas falling in the middle of the week.
These may just be signs that politicians in Latin America’s two largest countries, quick to take the credit when the news was good, have yet to figure out a way to manage rising expectations. In some cases though, the quibbling may be more foreboding.
Witness the blather out of Buenos Aires. President Cristina Fernandez, who long ago refined her rhetoric against holdout creditors of the country’s sovereign debt, has more recently come under fire for money laundering and corruption. A former secretary for Fernandez claims that she and her husband, the late Nestor Kirchner, installed a vault in their Patagonia mansion and that she was sometimes told to weigh bags of illicit cash. To these and other allegations, Fernandez has responded by writing off her domestic critics as “loons.” Amid a hail of indications that the country’s economy is in a tailspin, Fernandez’s latest round of excuses and dismissals may signal a more troubling horizon for the country (put forth just two years ago as a model for a Greek recovery) long known for steep descents.
Image from BlouinNews.
