Higher Chile growth faces domestic and external risks

Significance After four sluggish years, economic growth has been picking up steadily since mid-2017. However, as noted by Moody’s, medium-term prospects remain hampered by reliance on copper exports as, in the shorter term, has also been apparent in the context of the tariff war between the United States and China. Impacts According to the IMF, Chile will be the region’s fastest-growing economy this year, just ahead of Peru. The government will walk tightrope between a need for fiscal austerity and social demands. The tariff war will underscore the pressing need for diversification out of commodity exports.

Significance Three months after unrest flared in Honduras, President Juan Orlando Hernandez remains under pressure. While protests have decreased in frequency, they remain a concern to the government, especially given the protesters’ increasing focus on corruption issues. Ongoing tensions will hit investment, weighing on economic growth that could help ease some of the protesters’ grievances. Impacts Ongoing unrest and weakening economic prospects may encourage more outward migration, especially towards the United States. Washington’s decision to cut funding to Central America will further weigh on Hernandez’s ability to fund economic initiatives. Calls to extend the mandate of the mission to fight impunity and corruption suggest protests are now focusing on anti-corruption.


Subject Political outlook for Chad. Significance In November, the government will likely miss a self-imposed deadline for holding long-delayed legislative elections. The real challenges to President Idriss Deby’s authority, however, may come from the country’s professional classes rather than the ballot box. Impacts Despite domestic turmoil, counterterrorism cooperation will likely keep Chad in the good graces of France and the United States. As budgetary difficulties persist, Chad will become increasingly beholden to international creditors and the IMF. Over the longer term, some of Deby’s associates and family members may grow restless as they wait for their turn in power.


Significance The government will appeal the rulings, which follow action by renewables firms. With constitutional battles over energy investments already unfolding, the future of Mexico’s energy framework has been thrown into turmoil. Impacts Increasing energy prices will probably push inflation above Banxico’s upper target limit of 4%. AMLO’s apparent disregard for international trade agreements will strain relations with the United States. AMLO’s pro-austerity fiscal stance could take a toll on his popularity.


1985 ◽  
Vol 39 (4) ◽  
pp. 699-727 ◽  
Author(s):  
Benjamin J. Cohen

The global debt problem influences the foreign-policy capabilities of the United States through its impact on the government's “linkage strategies” in foreign affairs. In some circumstances policy makers are forced to make connections between different policy instruments or issues that might not otherwise have been felt necessary; in others, opportunities for connections are created that might not otherwise have been felt possible. The Polish debt crisis of 1981–82, the Latin American debt crisis of 1982–83, and the IMF quota increase in 1983 are suggestive in this regard. Linkage strategies bred by the debt issue are more apt to be successful when the interest shared by the United States with other countries in avoiding default is reinforced by other shared economic or political interests. They will also be more successful to the extent that the government can supplement its own power resources by relating bank decisions to foreign-policy considerations. Power in such situations, however, is a wasting asset, even when employed indirectly through the intermediation of the IMF.


Significance Erdogan adopted a relatively conciliatory tone and stopped short of declaring retaliatory measures, for fear of the economic consequences in particular, despite the fact that most Turks see Biden’s move as an insult and an attack on Turkish dignity. Impacts Ankara’s options for retaliation are limited but could include reduced military coordination with Washington in Syria and Iraq. Turkey could ask non-NATO US forces to leave, but closing the Incirlik air and Kurecik radar bases would hurt relations with NATO. The issue could be used internally to rally Turkish nationalist anger with the United States in support of the government.


Author(s):  
Guillermo Castro H.

The successful negotiation of the 1977 Torrijos–Carter Treaty inaugurated a new historical era in the Republic of Panama. Politically, the implementation of the Treaty from 1979 to 1999 transformed what, since 1903, had been a protectorate of the United States into a fully sovereign republic. Economically, the integration of the canal into Panama´s internal economy, and that of the country in the global market, created new opportunities for the development of the country. The treaty also put an end to the dispute between Panama and the United States over the control of the rent and revenues produced by the canal, transferring it to the government of the Republic of Panama, and so creating an unprecedented source of resources for investment. More than forty years on, however, Panama faced a combination of sustained (but uncertain) economic growth, persistent social inequity, constant environmental degradation, obsolescence of its institutional system, and increasing internal political tensions, all expressions of the contradiction between the natural organization of the territory of Panama, and the spatial organization of its economy, society and government imposed and maintained since the European conquest of the 16th century. This contradiction is also aggravated by the dispute over control of the canal rent between different sectors of Panamanian society. In short, the country is in a transition stage in its development, which may lead it to overcome the contradiction in developing into a prosperous and equitable republic, or into increasing conflicts that may worsen the contradictions inherent to a centralist and authoritarian tradition of governance.


Significance The government is aligning itself with the emerging international strategy against ISG in Syria. Its push to participate in airstrikes in part reflects a wish to reassert the United Kingdom's role as an international security partner, especially to the United States and France. Impacts The government envisages airstrikes as being needed for at least 12-18 months. The United Kingdom will be important but secondary in the anti-ISG coalition, with the United States continuing to conduct most operations. In the interests of its anti-ISG strategy, the government will temper its insistence on Syrian President Bashar al-Assad stepping down. The risk of an Islamist terrorist attack in the United Kingdom will increase. If Labour leader Jeremy Corbyn comes to be seen as correct in his anti-airstrikes stance, it will further envenom relations on the left.


Subject Mexico's brain drain. Significance Recent studies suggest increasing numbers of skilled professionals are emigrating from Mexico. A report by the University of Zacatecas (UAZ) published in March shows more than 1.4 million Mexicans with postgraduate degrees left the country between 1990 and 2015 due to a lack of professional development opportunities. According the National Council for Science and Technology (CONACYT), the government agency responsible for policy in this area, 46% of skilled emigrants live in Europe, 30% in the United States, 12% in Latin America and 7% in Canada. Impacts Emigration of skilled workers will be a fiscal burden as it annuls the benefits of investing in human resources. Policies to attract foreign talent could mitigate the problem, but there is no evidence that this is being considered. A contentious election outcome could trigger instability, further fuelling the outward flow of highly skilled Mexicans.


Significance The National Liberation Front (FLN) and Democratic National Rally (RND) received the most seats, as expected, amid widespread voter apathy. Impacts The government will continue its austerity strategy in response to the low oil price, and face more social tension and protests. The young generation will lose even more trust in the political system and opt for protest, resignation and emigration. The supporters of security and economic cooperation with the United States within the regime were strengthened.


Subject Public-private partnerships. Significance Amid attempts to secure new investment from Canada and the United States, the government is wrestling with political difficulties surrounding the future of public-private partnerships (PPPs). These have been magnified in recent months by the bad publicity arising from the Odebrecht bribery scandals. Establishing a politically acceptable balance between attracting investors and ensuring the transparency of public works contracts is proving increasingly important. Impacts The problem of corruption in sub-national government will cloud the operations of PPPs. There will be a need for stronger and more independent regulation of PPP projects. The localised reach of the Works for Taxes programme will limit its scope in dealing with wider objectives.


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