Canning Papers

There is widespread agreement that the economies of Latin America and the Caribbean are not growing fast enough. There are many reasons for this, among them the end of the commodities boom, large fiscal deficits, corruption, the electoral cycle, and high levels of political uncertainty. While the exact role each of these factors has played is open to debate, it is also true that low growth can be traced back to a simple and at first sight rather more technical issue: low levels of investment, particularly in infrastructure.

Politics is changing in Latin America. The so-called ‘pink tide’ of left-wing governments, associated with a decade of booming commodity prices, has peaked and ebbed. In the aftermath voters are angry over the slowdown in economic growth, corruption, and crime. In some countries the political pendulum has swung to the Right, or even to the extreme Right. Populist and nationalist politicians of both the Right and Left have made gains. The picture is not uniform. In this paper we will try to get a feel for the direction of travel and how it is affecting business

El Salvador’s presidential election on 3 February represents an opportunity for Nayib Bukele, of Gran Alianza por la Unidad Nacional (Gana), to end the dominance of the country’s traditional parties. Bukele has galvanised support through dissociating himself from the political establishment.

It has been a bumper year for elections across Latin America, and the resounding message from the constituency has been a rejection of the traditional and mainstream. An electorate disillusioned with a corrupt ruling class and fed up of waiting for promised solutions to perennial problems that never materialise has used its vote to bring to power candidates espousing radical and populist policies; from the Left in Mexico and the Right in Brazil.

The story of water in Latin America and the Caribbean (LAC) is a bit like the element itself: flexible, fast moving, intensely valuable yet sometimes viciously destructive; perhaps a little slippery to pin down and draw hard and fast conclusions. Across an important number of indicators the management of water in the region over the last few decades appears to have improved – for example, a greater proportion of the population now has access to clean drinking water. On the other hand there have been setbacks and the region faces big challenges. Past improvements will not necessarily continue in linear fashion. Climate change is an increasingly important issue, posing big challenges for water management. The trend towards more extreme weather means that the water problem is paradoxical. At the same time there is too much of it – floods – and too little – drought. Sometimes both happen in the same country in the same year.

In March 1812 Simón Bolívar, the future liberator of South America, stood in the rubble of his hometown, Caracas. The Venezuelan capital had been levelled by an enormous earthquake and aftershock and as he led the rescue efforts, Bolívar announced: “If nature itself decides to oppose us, we will fight and force her to obey!” Two hundred years later, Latin American governments are still struggling to predict, mitigate and respond to natural disasters.