- Chile – the economy is proving softer than anticipated and electoral reform is being legislated;
- Guatemala – economic prospects and what to make of marijuana legalization;
- Honduras – what is behind the flight of illegals to the US;
- Mexico – growth is picking up.
In his second term in office, President Santos has two priorities, namely to bring the peace talks with the Marxist rebels to a conclusion and to sustain the fast-growing economy. The second will almost certainly prove easier to do than the first. Assertions that the peace process is close to a conclusion are premature.
The regime has invented a new electronic currency that in essence amounts to little more than the issuance of new debt by a nation with an uninspiring history on this score. The economy is doing fairly well, overall, but the President’s desire to remain at the helm for life is troubling.
The government has been moving resolutely to shift the economy into higher gear, even while it makes politically distasteful changes seeking to improve fiscal affairs. The keystone of a massive planned public-works program is the construction of a “parallel” Suez Canal with facilities aiming to turn it into a global trade hub.
In his first 100 days, PM Modi fulfilled neither the hopes of his fans nor the fears of his detractors. But to conclude from this that he is heading a do-nothing government would be rash. One danger is that the economy’s impressive second-quarter performance will persuade him that there is no pressing need for structural reforms.
The costs of the latest Gaza war are probably sufficient to dent the Israeli economy, but not to do it serious damage, contrary to trends in the Palestinian territories. The truce is holding for now, but there is a high degree of frustration over the outcome on both sides of this conflict.
The economic outlook is improving and the external accounts have been strengthening. The adjustment the country is going through is painful in the short run, so a key question is for how long the patience of the people with the officially imposed austerity will hold out. In addition to a fiscal belt-tightening, the CB is letting the local dollar slowly depreciate.
Tighter US and European sanctions are about to go into effect, but it is doubtful that this will bring Russia and Ukraine closer to a meaningful peace agreement. Pres. Putin wants much more than what he has achieved in his confrontation with the West so far, and he can afford to play for time.
Conditions are going from bad to worse as Chavismo continues to mismanage the country’s oil wealth. The damage this does politically to Pres. Maduro’s government is serious, yet there is no sign that the opposition is able to exploit it. Relations with the US keep deteriorating.
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