Brasidas Group is pleased to present another issue of our newsletter, focusing on Latin America and recent changes that have swept the region, impacting not just the economies of these countries, but society itself.  What we have seen in Latin America is the interconnectedness of its different regions, such that political and social shifts in one state bring about changes in the everyday lives of citizens in neighboring countries.

The most pressing issue is certainly the refugee crisis in Venezuela, which has first and foremost affected its neighbor Colombia, which has accepted the majority of migrants coming from Venezuela.  Moreover, the ripple effect has reached Colombia’s institutions, as well, as this influx of people has placed a financial burden on healthcare, security, logistics, and the economy overall.  In these already fragile circumstances, questions arise as to the long-term effects that the influx of over four million refugees will exert on society at large. While there have been historical examples of immigrants contributing substantially to the economies of their host countries by becoming part of the workforce, it is necessary for governments to first invest in their integration and create suitable opportunities.  It remains to be seen whether this kind of spending from the budgets of host countries will eventually be surpassed by the benefits reaped from immigrant involvement.

Although regional stability is greatly impacted by the situation in Venezuelan society, with hyperinflation and high unemployment persisting for years, President Nicolas Maduro’s regime still remains strong.  Supported by the military, and with a weak opposition not presenting any conceivable threat, Maduro seems to be determined to stay in power for years to come.  Moreover, there does not seem to be a likelihood of the U.S. initiating political and military intervention, as this move could backfire and be perceived as being orchestrated from abroad.

That said, U.S. involvement in the region has certainly impacted one of the most lucrative segments of the economy -- oil production -- due to the U.S. imposing new sanctions on Venezuela’s crude oil business in January 2019.  Consequently, Venezuela’s traditional allies, Russia and China, are now jostling for influence amidst the instability.  It appears that China will exert increased impact on the oil market, taking over nationalized oil fields which had been used by U.S. companies in the past.  Resultantly, China’s presence in the energy supply sector will prevail over Russia and the U.S. in the international sphere.

Another facet of Venezuelan vulnerability spilling over into surrounding states lies in the Revolutionary Armed Forces of Colombia (FARC), who are resorting to violence after a brief ceasefire.  Specifically, they have been teaming up with Iranian individuals who are impacting the political crisis in Venezuela.  Taking into account FARC’s ties to international drug and weapons trafficking, Colombia faces impediments in its endeavors to sustain the long-awaited stability which followed after decades of turmoil.

Similarly, drug-related violence is mounting in Mexico, as significant parts of the population still resort to illicit income in the midst of widespread poverty and corruption.  President Manuel Obrador’s paradoxical intention to decriminalize all drugs has naturally come across objections, while the government’s belligerent campaign against drug trafficking and organized crime has brought results in the form of criminals’ arrests.  Nonetheless, the ultimate situation is that clashes have bled into other areas of Mexico, no longer being confined to zones regarded as risky.

Despite there being indications that political change in Brazil will disrupt the status quo and lead to an increase in public security, it seems that things have stayed the same since President Jair Bolsonaro took office.  As a result, there have been anti-government protests due to the lack of progress in combating organized crime, with Bolsonaro even campaigning for the easing of gun laws. This has shifted the responsibility towards Brazilians themselves to protect their own safety.  What is more, the message conveyed to citizens is to continue seeking individual remedies for problems generated by society.

While Venezuela is still faced with the aftermath of its totalitarian past, it seems that all is not bleak in the region after all, as Chile has been making efforts to move on.  Namely, its intelligence sector has come a long way since Pinochet's dictatorship, when it was utilized to control the citizens.  The recent changes which this sector has undergone are instilling trust in residents that democratic reform is possible, even transforming an institution that ordinary citizens had been apprehensive of for decades.

Brasidas Group hopes its readers will find these latest insights pertaining to Latin America useful. In a day and age where politics, economics, and social concerns all too often intersect, it is essential that one stay apprised of the interrelatedness and resultant implications of such developments in one region.