Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

Trump Won’t Stop Investment in Mexico

by Shannon K. O'Neil Thursday, January 19, 2017
A general view shows the General Motors assembly plant in Ramos Arizpe, in Coahuila state, Mexico January 4, 2017 (Reuters/Daniel Becerril). A general view shows the General Motors assembly plant in Ramos Arizpe, in Coahuila state, Mexico January 4, 2017 (Reuters/Daniel Becerril).

NAFTA is as much an investment as a trade treaty, providing guarantees of international courts, regulatory coordination, and intellectual property protections. This has helped bring over $500 billion in foreign direct investment (FDI) to Mexico over the last twenty-three years. This investment has mostly come from the United States, going into manufacturing, financial services, and mining. Read more »

The Even Scarier Thing About Brazil’s Prison Violence

by Matthew Taylor Wednesday, January 11, 2017
Relatives of inmates react in front of Desembargador Raimundo Vidal Pessoa jail in the center of the Amazonian city of Manaus, Brazil, January 8, 2017 (Reuters/Michael Dantas). Relatives of inmates react in front of Desembargador Raimundo Vidal Pessoa jail in the center of the Amazonian city of Manaus, Brazil, January 8, 2017 (Reuters/Michael Dantas).

Prison violence has taken the lives of more than one hundred Brazilian prisoners since the beginning of the year. While the recent killings have been gruesome and especially numerous, they are a continuation of a long-standing pattern of savage prison violence that has developed its own macabre logic of control. Scarier still than the calculated horror of the past week’s violence, though, is the possibility that this prison violence may contribute to the consolidation of a particularly virulent form of criminal organization that threatens the rule of law in Brazil and its neighbors. Read more »

The Odebrecht Settlement and the Costs of Corruption

by Matthew Taylor Tuesday, December 27, 2016
A sign of the Odebrecht SA construction conglomerate is pictured in Rio de Janeiro, Brazil, February 26, 2016 (Reuters/Ricardo Moraes). A sign of the Odebrecht SA construction conglomerate is pictured in Rio de Janeiro, Brazil, February 26, 2016 (Reuters/Ricardo Moraes).

It is hard to overstate the meaning of the settlement announced by U.S. authorities on December 21 with Odebrecht. Under this “largest-ever global foreign bribery resolution,”[1] the construction giant and its petrochemical subsidiary Braskem have agreed to pay at least $3.5 billion to Brazil, U.S. authorities, and the Swiss Office of the Attorney General. Of the total criminal fines, 80 percent of Odebrecht’s payments and 70 percent of Braskem’s payments will go to Brazil, a victory for both Brazilian prosecutors and for the cash-strapped Brazilian government. Read more »

Latin America’s Wide-Open Electoral Season

by Matthew Taylor Thursday, December 15, 2016
July 28, 2016 (Reuters/Guadalupe Pardo). July 28, 2016 (Reuters/Guadalupe Pardo).

Half of the eighteen nations of Central and South America will hold presidential elections over the next two years.[1] The number of elections is not unprecedented, but the degree of uncertainty is, given the economic doldrums and political crises that have afflicted the region in recent years. As a consequence of the electoral outlook’s uncertainty, many of the coming year’s events in Latin America will need to be interpreted through the peculiar lens of candidates’ strategic calculations and parties’ maneuvering for advantage at the polls. Read more »

Michel Temer’s Shrinking Presidency

by Matthew Taylor Wednesday, November 30, 2016
Brazil, president, Lava Jato, PMDB, Michel Temer, corruption, anticorruption reforms, Geddel Vieira Lima Brazil's President Michel Temer looks on during a news conference at the Planalto Palace in Brasilia, Brazil, November 27, 2016 (Reuters/Ueslei Marcelino).

When he officially became president three months ago, Michel Temer’s game plan was simple and bold: in the roughly eighteen months before the 2018 presidential campaign ramped up, he would undertake a variety of legislative reforms that would put the government’s accounts back on track, enhance investor confidence, stimulate an economic recovery, and possibly set the stage for a center-right presidential bid (if not by Temer himself, at least by a close ally). Temer’s band of advisors—Brazilian Democratic Movement Party (PMDB) stalwarts and long-time Brasília hands Romero Jucá, Geddel Vieira Lima, Eliseu Padilha, and Moreira Franco—would ensure that he had the backing of Congress to push through reforms that might not bring immediate returns, but nonetheless might improve investor confidence, prompting new investments in the short term. Sotto voce, many politicians also assumed that the PMDB—which has been an integral player in every government since the return to democracy in 1985—would be well placed to slow the pace of the bloodletting occasioned by the massive Lava Jato investigation and stabilize the political system. Read more »

The Hidden Refugee Crisis in the Western Hemisphere

by Shannon K. O'Neil Tuesday, November 1, 2016
Haitians migrants wait to make their way to the U.S. and seek asylum at the San Ysidro Port of Entry in Tijuana, Mexico, July 15, 2016 (Reuters/Jorge Duenes). Haitians migrants wait to make their way to the U.S. and seek asylum at the San Ysidro Port of Entry in Tijuana, Mexico, July 15, 2016 (Reuters/Jorge Duenes).

While much attention is rightly focused on Syria and the Middle East, there are a growing number of refugees in the Western Hemisphere.

The largest group comes from Central America’s Northern Triangle—Guatemala, El Salvador, and Honduras. For each of the past three years between 300,000 and 450,000 Central Americans have fled north. Of these, between 45,000 and 75,000 are unaccompanied children; another 120,000 to 180,000 families (usually a mother with children); and between 130,000 to 200,000 single adults. These numbers peaked in May and June 2014 when more than 8,000 unaccompanied minors crossed the U.S. border each month. 2016 numbers are again rising, with August inflows higher than ever before. Read more »

Bringing International Pressure To Bear on Nicolás Maduro

by Matthew Taylor Friday, October 28, 2016
Venezuela's President Nicolas Maduro (2nd L) and former Spanish prime minister Jose Luis Rodriguez Zapatero (2nd R) speak next to Secretary General of the Union of South American Nations (UNASUR) Ernesto Samper (L) and former president of Dominican Republic Leonel Fernandez, during their meeting at Miraflores Palace in Caracas, Venezuela July 21, 2016 (Reuters/Carlos Garcia Rawlins). Venezuela's President Nicolas Maduro (2nd L) and former Spanish prime minister Jose Luis Rodriguez Zapatero (2nd R) speak next to Secretary General of the Union of South American Nations (UNASUR) Ernesto Samper (L) and former president of Dominican Republic Leonel Fernandez, during their meeting at Miraflores Palace in Caracas, Venezuela July 21, 2016 (Reuters/Carlos Garcia Rawlins).

[This post was co-authored with John Polga-Hecimovich*. It is the third of a series that begins with this post.]

The collapse in Venezuela has many potential costs: democratic regression in Latin America; destabilization of neighboring countries, including, potentially, the fragile peace process in Colombia; the possibility of a significant migrant crisis; rising violence, corruption, and criminality; and threats to hemispheric energy security. A mix of frustration with President Nicolás Maduro’s recent moves and apprehension about the potential outcomes of the crisis has led to a frantic search for alternatives, none of which seems particularly likely to be effective on its own. The paucity of alternatives suggests that the best the international community may be able to hope for is to isolate the regime, demonstrate to moderates within the regime that there are costs to sticking with Maduro, and make efforts to ameliorate the worst humanitarian consequences of the crisis. Read more »

Three Factors Driving Venezuela’s Impasse

by Matthew Taylor Friday, October 28, 2016
Demonstrators clash with members of Venezuelan National Guard during a rally demanding a referendum to remove Venezuela's President Nicolas Maduro in San Cristobal, Venezuela October 26, 2016 (Reuters/Carlos Eduardo Ramirez). Demonstrators clash with members of Venezuelan National Guard during a rally demanding a referendum to remove Venezuela's President Nicolas Maduro in San Cristobal, Venezuela October 26, 2016 (Reuters/Carlos Eduardo Ramirez).

[This post was co-authored with John Polga-Hecimovich*]

The increasingly dangerous crisis in Venezuela (described in the first post of this series), has been complicated by the political economy of the Chavista regime. Three aspects of the regime as it has evolved under the Nicolás Maduro government are particularly important to understanding where things stand: the policy centrality of the country’s impending debt default; the absence of an adequate exit strategy for many members of the regime; and the central role of the military as a likely guarantor of any solution to the crisis. Read more »

How Venezuela Got Into This Mess

by Matthew Taylor Friday, October 28, 2016
People line up to try to buy toilet paper and diapers outside a pharmacy in Caracas May 16, 2016 (Reuters/Carlos Garcia Rawlins). People line up to try to buy toilet paper and diapers outside a pharmacy in Caracas May 16, 2016 (Reuters/Carlos Garcia Rawlins).

[This post was co-authored with John Polga-Hecimovich*]

By the end of 2017, the Venezuelan economy will likely be less than three-quarters of its 2013 size. Inflation is set to increase from 700 percent in 2016 to a hyperinflationary 1,500 percent next year. Despite the government’s best efforts to continue payments, a crippling debt default seems increasingly inevitable. The human costs of the crisis are readily apparent, with food and medicine shortages, rising infant mortality, and increasing violence. Fully three-quarters of Venezuelans polled claim to want President Nicolás Maduro out. But last week, a series of judicial decisions appear to have quashed one of the most promising routes out of the political crisis, the presidential recall referendum. This string of suspect decisions confirms the Maduro administration’s descent into blatant authoritarianism and cuts off one of the last avenues for the peaceful restoration of a democratic system. Incongruously, all of this is in a country with the richest reserves of oil in the world, where the government has long proclaimed a commitment to social progress, inequality reductions, and popular legitimation. Read more »