Shannon K. O'Neil

Latin America's Moment

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

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Latin America’s Populist Hangover

by Shannon K. O'Neil
Alberto Fujimori, Andres Manuel Lopez Obrador, Argentina, Bolivia, Brazil, Carlos Menem, corruption, Cristina Fernandez de Kirchner, Ecuador, Evo Morales, Getulio Vargas, Guatemala, Honduras, Hugo Chavez, Jimmy Morales, Juan Orlando Hernandez, Juan Peron, Latin America, Luiz Inacio Lula da Silva, Mexico, Nestor Kirchner, Nicolas Maduro, Otto Perez-Molina, Pedro Pablo Kuczynski, Peru, populism, Rafael Correa, Venezuela Argentina's President Cristina Fernandez de Kirchner waves to supporters from a balcony after a ceremony at the Casa Rosada Presidential Palace in Buenos Aires on May 4, 2015 (Reuters/Argentine Presidency).

In my piece published in the November/December 2016 issue of Foreign Affairs, I lay out the economic and political characteristics of populism, analyze why it is receding in Latin America today, and describe what a next wave might look like. I also argue that Latin America’s historical experience with populism provides some bracing warnings to other countries now flirting with such politics. You can read the first three paragraphs of the article below: Read more »

A Game of Inches: The Uncertain Fight Against Corruption in Latin America

by Matthew Taylor
3 out of 3, anticorruption, Car Wash investigation, Claudia Paz y Paz, corruption, International Commission Against Impunity in Guatemala (CICIG), Matthew Stephenson, Sérgio Moro A boy holds a sign which reads, "No more corruption", during a demonstration demanding the resignation of Guatemalan President Otto Perez Molina, in downtown Guatemala City, May 30, 2015 (Reuters/Jorge Dan Lopez).

Harvard’s inimitable Matthew Stephenson this week published a thought-provoking blog post comparing anticorruption efforts in Asia and Latin America. Crudely summarizing Stephenson’s argument, a few years ago many looked to Asia as the gold standard in anticorruption efforts, in part because of the success of independent and effective anticorruption agencies (ACAs) in the region. But recent news of political meddling with Hong Kong’s ACA, brazen kleptocracy in Malaysia’s state development fund, and efforts to water down reform in Indonesia all suggest that the pendulum is swinging in a less positive direction. By contrast, Stephenson is optimistic about the important gains made in recent years in Latin America, including by Guatemala’s International Commission Against Impunity (CICIG), Brazil’s Car Wash investigation, elections in Peru and Argentina that highlighted voter frustration with corruption, and Mexico’s “3 out of 3” reforms. Read more »

Corruption, Politics, and Corporate Transparency in Latin America

by Matthew Taylor
anticorruption, campaign spending limits, corporate donations, corporate transparency, corruption, electoral finance, illegal enrichment, influence peddling, Lava Jato, multilatinas, multinationals, Odebrecht, politics, transparency Gustavo de Hoyos (C), president of the Mexican Employers' Confederation (COPARMEX), holds a placard during a protest to demand senators to approve the original proposal of the National Anticorruption System, at the Angel of Independence monument in Mexico City, Mexico, June 16, 2016. The placard reads: "Businessmen demand to stop corruption. #SNA" (Reuters/Ginnette Riquelme).

It is Latin America’s anticorruption season. Deep beneath the waves of revulsion about scandal, graft, and the general filthiness of local politics has been a profound concern with democracy. In particular, there is a growing awareness that the dangerous liaisons between corruption and electoral finance threaten the stability and legitimacy of elected governments in the region. While there is plenty of good news about the impressive corruption busters who are shaking up settled patterns of corruption and impunity in the region, many of the underlying links between corporate transparency, corruption, and campaign finance remain deeply troubling and potentially destabilizing. Read more »

Latin America’s Savings Problem

by Matthew Taylor
Latin America, savings, investment, safety net, growth, Inter-American Development Bank, public savings, private savings, foreign savings, domestic savings, government consumption, pension reform, infrastructure investment, targeted tax policies, productivity, financial sector reform, savings culture, access, incentive Shoppers look over merchandise at Hennes & Mauritz (H&M) store in Peru, at the Jockey Plaza mall in Lima, July 21, 2015 (Reuters/Mariana Bazo).

Savings are essential for growth: domestic savings finance productive investment, provide a safety net for the future, and are strongly associated with long-term growth prospects. Sadly, a new report from the Inter-American Development Bank (IADB) makes the convincing case that Latin America has fallen behind, with repercussions for development in the region for decades to come. Read more »

The Anticorruption Boom and U.S. Foreign Policy

by Matthew Taylor
International Consortium of Investigative Journalists (ICIJ), Panama Papers, Mossack Fonseca, FIFA, anticorruption, corruption, beneficial ownership, UK Anti-Corruption Summit, Nicholas Shaxson, tax havens, Tax Justice Network, Daniel Kaufmann, Alexandra Gillies, Shruti Shah, Foreign Corrupt Practices Act, OECD Convention on Corruption British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England (Reuters/Dan Kitwood).

April and May brought some of the most important movement on the anticorruption front of any two-month period in the past decade. Recapitulating briefly:

– In April, the International Consortium of Investigative Journalists (ICIJ) began release of the Panama Papers, roughly 11 million leaked documents from the Mossack Fonseca law firm detailing the creation of more than 15,000 shell companies and providing information on more than 200,000 offshore entities. The lists touched on a variety of presumably legal uses of offshore firms, but also sprayed egg on a number of prominent faces, including in Russia, Ukraine, China, the United Kingdom (UK), Spain, Chile, Argentina, Iceland, and within the International Federation of Association Football (FIFA), among others. A follow-up manifesto by John Doe, the whistleblower at the heart of the leak, noted the extensive use of offshore accounts as part of a system of “massive, pervasive corruption” in the global economy. If nothing else, the Panama Papers have introduced the concept of “beneficial ownership” to a broader public, and fomented a larger discussion of how the West enables corrupt practices through loose monitoring of offshoring and financial disclosure. Read more »

Five Things Washington Should Do to Help Latin America Curb Corruption

by Guest Blogger for Matthew Taylor
Corruption, Latin America, Operation car Wash, U.S. Department of Justice's Office of International Affairs, antimoney laundering, Incorporation Transparency and Law Enforcement Assistance Act, International Center for Investigative Journalism (ICIJ), U.S. real estate market Paraguayan prosecutors Hernan Galeano (C), Federico Espinoza (center, R) and Chief Prosecutor Roberto Zacarias hold a news conference in Asuncion, January 8, 2016. Paraguayan state prosecutors on Thursday raided the headquarters of South American soccer confederation CONMEBOL after a request for cooperation from U.S. justice officials probing corruption inside world soccer, the prosecution office said (Jorge Adorno/Reuters).

This is a guest blog post by Dr. Richard Messick, an anticorruption specialist. It is based on a talk he gave at a CFR roundtable on March 24 hosted by Matthew M. Taylor, adjunct senior fellow for Latin America Studies.

One of the most promising developments in U.S. foreign relations is the all-out war on corruption being waged across Latin America. From “Operation Car Wash” in Brazil to investigations of presidential wrongdoing in Bolivia, El Salvador, Honduras, Guatemala, and Panama, across the region independent, tenacious prosecutors and investigators are out to end the massive theft of state resources that for so long has hobbled political development and throttled economic growth. The United States should be cheering for these corruption warriors, for we have much to gain if they succeed. Less corruption translates into more stable, reliable political allies; it means faster, more equitable growth and that means shared prosperity and less northward migration. Finally, less corruption in government will offer U.S. firms new opportunities. Think what the end of corruption in Brazilian public works would mean for U.S. engineering and construction companies. Read more »

Macri’s Surprising Honeymoon

by Matthew Taylor
Mauricio Macri, Argentina, Cambiemos, pragmatic Argentina's President Mauricio Macri (L) and Jujuy's Province governor Gerardo Morales (back C) dance as they take part in a carnival celebration in the Argentine northern town of Purmamarca, February 6, 2016 (Argentine Presidency/Reuters).

By all accounts, Mauricio Macri has had a remarkable honeymoon since he was inaugurated December 10, quickly moving to revise Argentina’s economic policies, restructure its relations with the world, and tackle a variety of rule of law challenges, ranging from corruption to the drug trade. President Obama’s trip to Argentina last week was in many ways the capstone to Macri’s dynamic first hundred days in office. The visit signaled a generational shift in U.S. policy toward Latin America, seeking to repair some of the worst damage done by U.S. support of the military dictatorship that took office when Obama was a teenager, but Obama and his entourage of more than four hundred business representatives were even more convincing in their strong praise for the Macri administration’s new openness to foreign investors. Read more »

The Political Salience of Latin Americans’ Perceptions of Corruption

by Matthew Taylor
Transparency International, Corruption Perceptions Index, Support Mission against Corruption and Impunity, MACCIH, International Commission Against Impunity, CICIG. corruption, impunity A demonstrator holds a scarf during a march to demand for the resignation of Honduran President Juan Orlando Hernandez in Tegucigalpa August 14, 2015. Thousands of protesters have been continuing demonstrations in Tegucigalpa, calling for the resignation of Hernandez over a $200 million corruption scandal at the Honduran Institute of Social Security (Jorge Cabrera/Reuters).

Once a year, policymakers and the press are forcibly reminded of the terrible costs of corruption. This year, it fell on January 27, when Transparency International’s Corruption Perceptions Index (CPI) was released, inciting the ritual gnashing of teeth and beating of chests about relative national corruption gains and losses. Read more »

Latin America’s Ninis

by Shannon K. O'Neil
Latin America, World Bank, Ninis, inequality, demographic bonus, violence, conditional cash transfers, job training, entrepreneurship programs, employment services, regional economic downturn Young people rest on a sidewalk in Mexico City May 9, 2011. While many nations fret about their aging populations, Mexico may be frittering away its abundant youth with legions of jobless dropouts known here as NiNi. Short for "Ni trabaja, Ni estudia" (neither works nor studies), the term NiNi has become shorthand for young Mexicans without jobs who have given up on their education (Jorge Dan Lopez/Reuters).

18 million Latin Americans—1 in 5 of those between the ages of 15 and 24—neither work nor attend school. Commonly dubbed “ninis” (ni estudian ni trabajan), a new World Bank report looks at this phenomenon across the region. Read more »

Opportunities for U.S. Engagement in Latin America

by Shannon K. O'Neil
Senate Committee on Foreign Relations, Latin America, Pacific Alliance, Colombia's peace negotiations, Luis Almagro, Cuba, Mexico's judicial reforms, anticorruption, Global Magnitsky Act, rule of law, North America, Trans-Pacific Partnership, Central America Regional Security Initiative, International Commission Against Impunity in Guatemala, Alliance for Prosperity (Courtesy U.S. Senate Committee on Foreign Relations)

Last week, I had the privilege of testifying before the U.S. Senate Committee on Foreign Relations at a hearing titled “Political and Economic Developments in Latin America and Opportunities for U.S. Engagement.” Also joining me before the committee were Thomas McLarty, chairman of McLarty Associates, and Eric Farnsworth, vice president of Americas Society and Council of the Americas. Read more »