In My Opinion

Andres Oppenheimer:

 

With presidential elections in seven countries, a world soccer tournament that may take place amid social protests, several territorial disputes awaiting international court rulings and an Argentine pope who is likely to continue making headlines, 2014 will be anything but boring in Latin America.

This year, there will be presidential elections in Brazil, Colombia, Bolivia, Uruguay, El Salvador, Costa Rica and Panama. Ruling leftist parties will try to keep their hold on power in Brazil, Bolivia, Uruguay and El Salvador, while a leftist candidate could win an upset victory in Costa Rica.

Brazil, the region’s biggest country, will be by far the country that will draw the most attention, both as host of the soccer World Cup — the world’s most watched sporting event — and because of its Oct. 5 presidential elections.

Until recently, the conventional wisdom was that left-of-center President Dilma Rousseff would easily win reelection in the first round. But amid a sluggish economy and after massive protests over poor education standards and decaying infrastructure in mid-2013, in which protesters held signs reading “More education, less soccer,” there is growing speculation that Rousseff may not reach the 50 percent of the vote she will need to win without a runoff.

If that happens, she may still win a second round vote Oct. 26, but she would not enjoy a comfortable majority in Congress. A recent Datafolha poll shows that Rousseff has a 41 percent approval rating, while her main rival, Senator Aecio Neves, is at 19 percent, and northeastern Pernambuco state governor Eduardo Campos, 11 percent.

Unlike the last election, where Rousseff won in the second round over a divided opposition, this time both Neves and Campos have vowed to support whomever gets most votes in the first round.

“If Dilma doesn’t win in the first round, there is a possibility that the opposition could win in the second round,” says Rubens Barbosa, a former Brazilian ambassador to the United States. “It will be the first time in 15 years that opposition candidates will unite for the second round.”

In Colombia, President Juan Manuel Santos is expected to win both the May 25 election, and a possible second round two weeks later. His main challenger, former President Alvaro Uribe’s protege Oscar Ivan Zuloaga, opposes Santos’ ongoing peace talks with the Revolutionary Armed Forces of Colombia (FARC) rebel leaders, which are taking place in Cuba.

But Zuloaga, a former finance minister, is trailing in the polls, and could be further hurt if Santos and the FARC announce a peace deal before the elections. While Santos is likely to be reelected, he might face a growing opposition in Congress, where Uribe is expected to be elected senator and opposition parties may gain seats in March congressional elections.

In El Salvador, Vice President Salvador Sanchez Cerén of the ruling leftist FMLN party and rightist ARENA party candidate Norman Quijano are virtually tied in the polls ahead of Feb. 2 elections, followed by Tony Saca, a former center-right president.

Most analysts predict that if there is a second round, which would take place March 9, Quijano would win because many voters consider Sanchez Cerén too extreme. The former guerrilla leader heads the most radical wing of the FMLN party.

Costa Rica will hold elections Feb. 2 amid widespread voter apathy, and a recent climb in the polls by leftist Frente Amplio candidate José María Villalta. Should no candidate win 40 percent of the vote, there will be a runoff in early April.

In Panama, disputes among electoral institutions and concerns of government fraud are triggering fears over the fairness of the May 4 presidential elections. President Ricardo Martinelli is constitutionally barred from seeking reelection.

In Bolivia, authoritarian leftist president Evo Morales is expected to sail through the Oct. 5 presidential vote after bending the constitution to allow him to seek a third term. After years of government intimidation and repression of political adversaries, Morales faces a weak opposition, and the only question about the election seems to be whether Morales will get the 70 percent of the vote he has vowed to win.

And on Oct. 26, former Uruguayan President Tabaré Vazquez, a moderate leftist of the ruling Frente Amplio party, is expected to win the presidential elections.

Several of this year’s presidential elections will take place after the June 12-July 13 World Cup, and could be influenced by its results.

In soccer-crazy Brazil, there is speculation that a bad performance by the national team — a favorite to win the tournament — could lead to a generalized pessimism that could hurt Rousseff’s reelection campaign. But skeptics counter that former Brazilian President Fernando Henrique Cardoso was reelected in 1998 only weeks after France defeated Brazil 3-0 in the final of that year’s World Cup tournament in France, proving that voters may not be influenced by World Cup results.

In addition to the seven elections and the World Cup, the region’s 2014 headlines are likely to be dominated by the outcome of several territorial disputes that await rulings from international courts.

The International Court of Justice in The Hague is scheduled to announce its verdict Jan. 27 on Peru’s claim against Chile over territorial waters between the two countries. Both sides say they will abide by the court’s decision, but there are fears that the ruling could sour bilateral ties.

A chill between Chile and Peru could weaken the recently created Pacific Alliance trade bloc that includes Mexico, Colombia, Peru and Chile. There are also questions about whether Chile’s new government of left-of-center President-elect Michelle Bachelet will embrace the trade bloc with as much enthusiasm as outgoing President Sebastián Piñera, who was one of its founders.

The International Court of Justice is also expected to examine, among other cases, Bolivia’s claims against Chile over lands that could give Bolivia a passageway to the Pacific Ocean, and Costa Rica’s claims against Nicaragua over a disputed territory on the San Juan River.

On the economic front, Latin America is expected to grow by 3.2 percent in 2014, which would be a slight improvement over its 2.6 percent growth in 2013, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The U.S. economic recovery is likely to help boost the region’s exports, ECLAC says.

The most rapidly growing economies in the region will be Panama, which is expected to grow by 7 percent, Peru (5.5 percent), Bolivia (5.5 percent), Nicaragua (5 percent), Dominican Republic (5 percent), Colombia, Paraguay, Ecuador and Haiti (4.5 percent each) and Mexico (3.5 percent), according to ECLAC’s forecasts.

The slowest growing economies are likely to be Argentina (2.6 percent) and Venezuela (1 percent), ECLAC says.

One of the most widely watched economic trends of the year will be whether international investors flock to Mexico to take advantage of its recent energy reforms, which for the first time in seven decades will allow foreign companies to participate in the country’s oil exploration and extraction.

Although investments are expected to flow in gradually over the next five years, an early rush of offers by foreign oil companies could give Mexico new momentum to present itself as one of the region’s most promising economic stars.

A North American summit of President Barack Obama with his counterparts from Mexico and Canada scheduled to take place in Mexico in February — the meeting will mark the 20th anniversary of the North American Free Trade Agreement — could also make big news.

U.S. Secretary of State John Kerry told the Miami Herald in a recent interview that he is “exploring” new agreements to deepen the NAFTA deal, which could be announced at the February summit. But, with Kerry tied up in the Middle East, it remains to be seen whether plans to re-launch NAFTA will come true.

Another country that will be closely watched by the international community will be Uruguay, but for different reasons: the small South American country will become the first in which the government will not only legalize but also grow and sell marijuana for recreational use.

Critics say Uruguay’s experiment will be a fiasco, because the government will not be able to run the program efficiently. If the government can’t even effectively enforce its prohibition to resell tickets for soccer matches, how will it enforce prohibition of marijuana sales to minors, asks opposition Sen. Pedro Bordaberry. But if the program succeeds, other countries may follow.

Finally, Pope Francis, who is already extremely popular in the region, is expected to continue making headlines with his plans for Vatican reforms, and with his calls for greater social justice and peace in the world. As the most respected figure in many Latin American countries, whatever he says on specific issues could have a major political impact in the region.

My own guess is that Latin America’s political landscape is not likely to change substantially in 2014, beyond a few new faces in several presidential palaces.

Much like in recent years, there will be a geographic split between a “Latin America of the Pacific,” including open economies such as those of Mexico, Colombia, Peru and Chile, and a “Latin America of the Atlantic,” with closed, state-run economies such as those of Venezuela, Argentina, and — to a lesser extent — Brazil.

But with the governments of Venezuela and Argentina struggling to survive amid mounting economic troubles created by their own free-spending populist policies, and with Brazil facing a sluggish economy because of its own failure to embark on much needed economic reforms, we may see a continued erosion of the Atlantic bloc’s regional influence.

Oil-rich Venezuela, the region’s most influential “revolutionary” government, is not likely to be able to maintain its subsidies to radical leftist movements in the region. Barring unexpected events, the price of oil is not likely to rise in the near future, which will make a big dent in Venezuela’s checkbook diplomacy.

With commodity prices expected to remain stagnant, Latin American countries that have diversified exports and have free trade deals with the rest of the world, such as Mexico, Colombia, Peru and Chile, should be better positioned to thrive than Venezuela and its allies in 2014.

It will be interesting to watch if they grasp their opportunity to attract foreign investments and drive Brazil to open its economy to remain competitive. If they do, they could turn much of Latin America into an economic success story in coming years.

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