When the Secretary of the Treasury of the United States, Janet Yellen, was betting last April on replacing global supply chains – which exposed their vulnerability in the pandemic and now with the war in Ukraine – with what she called reliable partners and upcoming, near and friend shoring, most Latin American countries saw an opportunity to reposition themselves in global trade. The US hopes to consolidate this geostrategic shift at the Summit of the Americas to be held in Los Angeles, and the Latin American leaders have already begun to advance their interest in replacing traditional producers and occupying a new role in supply chains in Davos.
The president of Colombia, Iván Duque, took advantage of his participation in a panel at the World Economic Forum (WEF) on Tuesday to ensure that, “in the midst of what is emerging as a food crisis, the region has with high agricultural potential. “But we need investment. We have gas, oil and coal, but we have important resources to exploit renewable energies and, furthermore, we can be the new settlements of the friend shoring that the US is looking for”, he pointed out. Along with him, the presidents of the Dominican Republic, Luis Abinader; of Costa Rica, Rodrigo Chaves, and the vice president of Peru, Dina Ercila Boluarte, agreed. “We guarantee a stable management of the economy and responsible and safe legal attention, but with clear environmental rules,” Abinader pointed out. “We are going to break the private monopolies that exist in Costa Rica so that there are many winners and few losers,” added Chaves. “Peru provides confidence to be able to invest in the country,” said Boluarte. “Although they are not letting us govern in peace, we are resilient to daily attack,” he concluded.
These political tensions to which the Peruvian vice president alluded reveal a political instability that threatens to become the main weakness of the region. “Latin America is entering a very dangerous period,” warned Moisés Naím, a distinguished member of the Carnegie Endowment for International Peace and one of the regulars at Davos, at a table on the future of the region on Monday.
“Now inflation is reaching the whole world and also a generation of Latin Americans who don’t know how to live with it. A generation that has lived in democracy all the time and that can see its expectations truncated. And the economic and social consequences of this bad combination can be disastrous”, declared Naím, alluding to the fact that this environment favors the arrival or consolidation of autocratic regimes in power.
“These are tough times to be Latin American,” said Chilean Andrés Velasco, dean of the School of Public Policy at the London School of Economics. “We have a problem with the ability of our governments, from the right or the left, more or less democratic, to achieve results,” he assured, citing the example of Peru, which has the highest death rate from covid-19 in the world and suffers great political instability. The combination of mismanagement and inflationary pressure could lead to “democratic deterioration,” with systems weighed down by “fragmentation, short-termism, and Twitter-based governments,” according to Velasco.
“Democracy is not based only on legitimacy, but also on efficiency. And without results, democracy fails”, warned former Spanish Foreign Minister Arancha González Laya, currently dean of the Center for International Relations at the Institute of Political Studies in Paris. “The region cannot choose between the United States or China, it has to bet on multilateralism, both in trade and in politics,” she stressed.
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