World Cup: Uruguay Loses, Latin America Out

July 6, 2010

Well, it was fun while it lasted.  What was shaping up to be the year of Latin America in the early rounds of this year’s World Cup will see two European teams fighting for the championship on July 11.  The best that Latin America can now hope for is a 3rd place finish for Uruguay.  That'd be a terrific result for Uruguay, of course, the best finish for that nation since they last won it all in 1950.  But for Latin America as a whole, the result is underwhelming.

Brazil’s surprising defeat at the hands of the Flying Dutchmen, Germany’s wipeout of Argentina and Spain’s close call with Paraguay ensured that Uruguay, which defeated Ghana in penalty kicks, would be the regional standard bearer in the final four.  Tiny Uruguay outlasted the region’s soccer giants, and started off well in its semi-final match, tied 1-1 with the Netherlands at half time.  Alas, their luck ran out with two superb quick strikes from the Dutch in the second half that put the game out of reach, despite an injury time goal that closed the gap to 3-2 and a furious final rush from Uruguay at the end.  Throughout the tournament, Uruguay proved to be a highly skilled and creative team, particularly effective on dead balls in the final third of the field.  For their part, Holland has tied its best previous finishes, in 1974 and 1978, when it lost championship games to West Germany and Argentina, respectively.  Will they finally be successful in 2010? 

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World Cup: Latin America Continues to Impress

June 25, 2010

When the knock-out round of the World Cup begins Saturday morning, the Western Hemisphere will have almost half of the final 16 teams in contention, and at least two teams (the winners of Argentina vs. Mexico on Sunday and also Brazil vs. Chile) guaranteed in the final eight.  Even more compelling: both 2006 finalists, Italy and France, will be watching the games from the sidelines, the first time that’s ever happened.  Other European teams that were early on picked to outperform have struggled; so far Holland appears to be the strongest European team although Slovakia has certainly surprised and Spain has finally recovered from an early setback to Switzerland.  Latin America and also the United States have acquitted themselves well so far.

In soccer terms the Western Hemisphere has appeared to equal its former colonials overseers.  The United States tied England 1-1; Brazil tied its “second team,” Portugal, 0-0.  For good measure, even Mexico defeated its one-time colonial aspirant, France, 2-0.  Mexicans should consider adding June 17 to their holiday calendar, to compliment Cinco de Mayo which celebrates the defeat of the French at the Battle of Juarez.  Only Spain was able to prevail against its former colonies, defeating hapless Honduras, 2-0, and Chile by 2-1.  (Honduras did eke out a tie in its last game.)

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World Cup: The Year of Latin America?

June 21, 2010

Each World Cup brings a new storyline, and this one is no different.  The rise of African football, the year that Spain finally met expectations, the return of England to World Cup prominence; all of these and others have been mooted as possibilities for 2010.  But to this point, all have proven a bust.  In fact, having just watched Chile defeat Switzerland, the real story of this year’s competition is the dominance of the Western Hemisphere.

Latin American nations, as well as the United States, have not lost one game yet in the preliminary rounds, except for Honduras’ 1-0 defeat by another Latin American nation, Chile, and 2-0 to Spain.  With the final game left to play in the opening round, it’s likely that no fewer than six or even seven of the eight Western Hemisphere representatives will go through, almost half of the final 16 in the quarter finals.  This contrasts with the underperforming Europeans, only one of which (Holland) is at the top of its group. England, Germany, and Italy have all underperformed, whereas the French have just been inept, poetic justice for the handball that brought them through qualifying against the Irish.  Portugal looked languid until a wipeout of North Korea; Spain needed to play the weakest team in the tournament from the Western Hemisphere to notch its first points.

Head to head, Western Hemisphere against Europe, the results have so far been amazing.  Chile has knocked off Switzerland, which earlier beat Spain.  Paraguay defeated Slovakia and tied Italy; Mexico defeated France; the United States tied both England and Slovenia. 

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Obama's Latin American Policy: Talking Like It's 1999

April 8, 2010

When it comes to Latin America, the Obama administration's change in tone from the early days of the last administration has been tremendously important. The emphasis on multilateralism has helped to salve long-standing wounds. The emphasis on broader social goals and the willingness to listen has echoed the growing demand to be listened to south of the border. And President Barack Obama's State of the Union shout out for free trade with Panama and Colombia has demonstrated that this administration will not jettison the best initiatives of President George W. Bush in the name of partisanship. All this is very welcome.

But still there's been a troubling sense of anachronism in this administration's rhetoric toward Latin America. Part of this reflects the understandable tendency to define things in regional generalities; but doing so tends to boil them down to retrograde platitudes. It obscures policymakers' sophisticated understanding of differences in the region--and the changes that have occurred in the last 10 years.

If the first 5 years of the Bush administration seemed like a replay of 1980s, with the Manichean obsession with our enemies, unabashed support for specific candidates and a loss of sense of scale--with an inordinate amount of attention devoted to Cuba, Nicaragua and El Salvador--today it's beginning to feel like we're partying like it's 1999. We're running out of retro.

Prince - 1999

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Beijing Consensus?

November 13, 2009

Less than five years ago, few analysts could have predicted China’s role in the global economy would be as significant as it is today. But the economic recession has helped to catapult China into becoming an engine for global economic growth.

China’s growing influence in the world—and particularly in Latin America and the Caribbean—is currently the source of much debate in Washington. (In fact, a Fall 2009 AQ book review on this very topic has already generated two Letters to the Editor.)  Some worry that Beijing is trying to undermine U.S. influence in the region, while others see China’s interest in our hemisphere as merely a reflection of its drive for a bigger piece of the world’s economic pie.

China has quickly become one of the region’s most important trading partners. In 2009, it overtook the United States to become the top trading partner of both Brazil and Chile.  Beijing also has free-trade agreements in force with Peru and Chile and is currently in negotiations with Costa Rica. A bilateral investment treaty was signed with Colombia on the sidelines of the 2008 Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting. Later this month, Bogota will host the third China-Latin America Business Summit, a meeting with more than 1,000 investors expected to attend. 

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Latin America's Middle Class Isn't What You Think (cont'd): The Unbanked

August 19, 2009

Two weeks ago I started a serialized essay on Latin America’s middle class that will appear every other week on the AQ blog. As I wrote at the time, Latin America’s middle class has received a lot of attention of late, including worry about its size, praise and high expectations for its growth and debate about its future. It’s also sparked a fair amount of speculation by businesses about its market potential.

But as I wrote two weeks ago, Latin America’s middle class is much more heterogeneous and, quite frankly, poorer and marginalized than many of us in developed countries would believe.  In the last post, I talked about the definition of the middle class.  In this one I talk about access to banking.  And not to give away the punch line: it’s lower than you think.  In later ones I’ll talk about wage security, education, access to health care, access to insurance, quality of housing, levels of satisfaction, and support for democracy.  But more about this in subsequent posts. 

Now it’s about the integration of Latin America’s middle class into the formal banking/financial system.

Consider this: according to an article that appeared in The New York Times on August 18, 2009, in New York City (notice how as a resident now I capitalize City as if to give it special meaning.  Why I don’t know.) “in the world’s banking capital, 12 percent of households do not have a bank account” compared with 8 percent nationally. 

That’s in New York and is a statistic that transcends socioeconomic groups—upper class, middle class and the poor. 

Consider this: in Latin America, in Mexico, for example, the middle class’s access to formal credit averaged just over 20 percent (in other words, just under 80 percent of the Mexican middle class did not have access to formal credit sources—banks, credit agencies, credit cards, etc.).  And in Peru under 18 percent had access to savings accounts. 

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A Green Opportunity in Mexico

June 30, 2009

Passage of climate change legislation in the U.S. House of Representatives last Friday was the United States’ first step in a more robust, forward-looking policy to cut greenhouse-gas emissions. But look to the other side of the Rio Grande and you’ll find a country that is showing new leadership in going green.

Yes, the outlook for Mexico may be somewhat grey these days if you're looking at the economic situation or the loss in tourism revenue. But Mexico is fast becoming one of Latin America’s best examples of how a government can address climate change and open the door for greater use of alternative energy.

Mexico’s role is quite welcome in a region that lags behind the world in terms of its investments in alternative renewable energy and in fighting climate change.  In 2007, Latin America produced just 1.7 percent of global renewable energy, including wind, solar, geothermal, and small hydro energy. This correlated with the region’s ability to attract a meager 3 percent of the $87 billion globally invested in renewable projects. And while Latin America may not be a big contributor of carbon dioxide (CO2) emissions, climate change is intensifying tropical rains, tornados, hurricanes, and dry seasons across the world. Mexico and the rest of the region stand to lose out by not taking action now.

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