Shannon K. O'Neil

Latin America's Moment

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

Posts by Category

Showing posts for "Brazil"

S&P’s Brazil Downgrade: Why it Matters

by Shannon K. O'Neil
Brazil's President Dilma Rousseff reacts during the signing ceremony of the Rio de Janeiro's international airport concession in Rio de Janeiro, April 2, 2014 (Ricardo Moraes/Courtesy Reuters). Brazil's President Dilma Rousseff reacts during the signing ceremony of the Rio de Janeiro's international airport concession in Rio de Janeiro, April 2, 2014 (Ricardo Moraes/Courtesy Reuters).

In a widely expected move, the ratings agency Standard and Poor’s (S&P) downgraded Brazil’s long term debt from a credit ranking of BBB to BBB- on March 24, bringing the country’s sovereign bonds a step closer to losing their “investment grade status” (defined as BBB- or above) and becoming “speculative” or “junk bonds.” The rating stems from a combination of indicators—including GDP growth, inflation, and external debt—that S&P uses to measure a country’s creditworthiness and its fiscal, regulatory, and political risks. Read more »

This Year’s Presidential Elections in Latin America

by Shannon K. O'Neil
Voters wait in line to cast their vote in a presidential election runoff at a polling station outside in San Salvador March 9, 2014 (Henry Romero/Courtesy Reuters). Voters wait in line to cast their vote in a presidential election runoff at a polling station outside in San Salvador March 9, 2014 (Henry Romero/Courtesy Reuters).

Earlier this week, Salvadorans headed to the polls to cast their ballots in a presidential runoff election, since on February 2 the candidates failed to reach the 50 percent threshold to avoid a second round. In the runoff’s lead up, Salvador Sánchez Cerén, a former guerrilla commander and the current vice president from the ruling party, looked poised for an easy win over his closest opponent Norman Quijano from the conservative Nationalist Republican Alliance (ARENA). But with the final ballot count separating the candidates by some 0.2 percent of the votes and with allegations of fraud, it seems that the protests and debates surrounding this election are far from over. Read more »

Public Education in Brazil

by Shannon K. O'Neil
A Brazilian citizen, living in Mexico, holds a poster during a demonstration in Mexico City June 18, 2013, in solidarity with a protest movement against poor public services, police violence and government corruption in Brazil (Edgard Garrido/Courtesy Reuters). A Brazilian citizen, living in Mexico, holds a poster during a demonstration in Mexico City June 18, 2013, in solidarity with a protest movement against poor public services, police violence and government corruption in Brazil (Edgard Garrido/Courtesy Reuters).

When people talk about what holds Brazil back, education tops the list (along with infrastructure). The poor quality of Brazil’s public education system limits students’ capabilities and adaptability, creates mismatches between workers’ skills and companies’ needs, and stifles productivity and entrepreneurship. These limits affect the entire economy—hampering economic growth, competitiveness, research & development, and even oil production (as Petrobras has struggled to find skilled workers for its pre-salt finds). Read more »

Brazil’s Pre-Salt Oil Six Years Later

by Shannon K. O'Neil
An aerial view of the final stage of the construction of new P-56 semi-submersible production platform for the oil company Petrobas at the Brasfels shipyard in Angra dos Reis, about 115 miles (185 km) west of Rio de Janeiro February 24, 2011 (Sergio Moraes/Courtesy Reuters). An aerial view of the final stage of the construction of new P-56 semi-submersible production platform for the oil company Petrobas at the Brasfels shipyard in Angra dos Reis, about 115 miles (185 km) west of Rio de Janeiro February 24, 2011 (Sergio Moraes/Courtesy Reuters).

In 2007, Petrobras engineers struck black gold, discovering vast oil reserves in the deep-water off the Brazilian coast and permanently altering not only Brazil’s energy landscape but the country’s economic and political fortunes. Immediate surveys predicted that some 80 billion barrels were trapped in these pre-salt reserves (named after the rock layer they are located in), a number so high that then-President Lula declared the find as proof that “God is Brazilian.” Read more »

Dilma Rousseff’s Tenure Three Years On

by Shannon K. O'Neil
Brazil's President Dilma Rousseff reacts during a press statement after a meeting at the 6th European Union (EU)-Brazil summit at the Planalto Palace in Brasilia January 24, 2013 (Ueslei Marcelino/Courtesy Reuters). Brazil's President Dilma Rousseff reacts during a press statement after a meeting at the 6th European Union (EU)-Brazil summit at the Planalto Palace in Brasilia January 24, 2013 (Ueslei Marcelino/Courtesy Reuters).

Brazil’s President Dilma Rousseff is gearing up for her reelection bid this week, attending political rallies and drumming up support by appearing with former President Lula. As she hits the campaign trail, over the next year she will be campaigning on—or alternatively explaining—her last three years in office. So what has Rousseff accomplished during her time at Brazil’s helm? The results are, in my view, mixed. Read more »

Foreign Direct Investment and Jobs in Latin America

by Shannon K. O'Neil
Employees work at an assembly line at a Ford manufacturing plant in Sao Bernardo do Campo June 14, 2012 (Paulo Whitaker/Courtesy Reuters). Employees work at an assembly line at a Ford manufacturing plant in Sao Bernardo do Campo June 14, 2012 (Paulo Whitaker/Courtesy Reuters).

In 2012 Latin America received its largest amount of foreign direct investment (FDI) to date: $170 billion or 12 percent of global flows. These flows went into a range of sectors from mining and petroleum production to high skilled and low skilled manufacturing to telecommunications and electricity. Read more »

Transforming Brazil’s Favelas

by Shannon K. O'Neil
Children play in front of the field at Cidade de Deus (City of God) slum in Rio de Janeiro March 15, 2011, where U.S. President Barrack Obama will visit on Sunday, according to the local press (Ricardo Moraes/Courtesy Reuters). Children play in front of the field at Cidade de Deus (City of God) slum in Rio de Janeiro March 15, 2011, where U.S. President Barrack Obama will visit on Sunday, according to the local press (Ricardo Moraes/Courtesy Reuters).

I got the chance last week to visit the Centro Comunitário Lídia dos Santos (or CEACA), an NGO based in the Rio de Janeiro favela of Morro dos Macacos—once the grounds of a zoo, and now home to some 25,000 cariocas (Rio’s residents). Headed by Dona Anna Marcondes Faria, it is the culmination of nearly fifty years of her work to make the community safer. From initial efforts to bring running water and kindergarten classes to the neighborhood, the two story building now offers a host of after school programs, art classes, professional training sessions, and environmental awareness projects. The goal is not just to teach skills but also confidence. CEACA, along with NGOs in some 450 other communities, have gained the attention and support of Coca-Cola, McDonalds, Walmart, and dozens of other corporations. Read more »

What to Watch in 2013: U.S. Policy Toward Latin America

by Shannon K. O'Neil
U.S. President Obama delivers a speech in front of banners representing Latin American nations in Santiago U.S. President Obama delivers a speech in front of banners representing Latin American nations in Santiago (Jason Reed/Courtesy Reuters).

2013 could be an interesting year for U.S. policy toward the region. Up first will likely be U.S. immigration reform. The outpouring of support from Latino voters in the November presidential election, helping push Barack Obama to victory, combined with the better organization and more aggressive stance of many pro-immigration advocates may motivate lawmakers on both sides of the aisle to come up with legislative reforms. In fact Obama officials have already stated that they will turn to immigration early this year. Read more »

Election Day Roundup

by Shannon K. O'Neil
People wait to vote at Good Shepherd Methodist Church during the U.S. presidential election in Kissimmee, Florida People wait to vote at Good Shepherd Methodist Church during the U.S. presidential election in Kissimmee, Florida (Scott Miller/Courtesy Reuters).

As Americans vote today, a record 23 million Latinos can head to the polls. Here is a roundup of the candidates’ stated views on immigration, regional security, and trade with Latin America—issues that are often of direct interest for this growing voter bloc, but also will more generally affect all Americans over the next four years. Read more »

Evolution of Latin America’s Economies

by Shannon K. O'Neil

I’ve been looking recently at the structural changes in many of Latin America’s economies (through the evolution of their exports). The different trajectories are quite striking, as you can see in the graphs below.

Out of Latin America’s biggest economies, Mexico has transformed the most. In the 1980s the manufacturing sector comprised just 10 percent of total exports; today it is over 75 percent. Mexico’s economic diversification and dynamism, especially in the automotive and electronic industries, have held oil at a steady 10-15 percent of exports for the last twenty years, even as oil prices have risen (though, in fairness, production has also declined). Read more »