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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Why Argentina’s Macri Could Have a Rockier Year in 2017

by Shannon K. O'Neil
Argentine President Mauricio Macri gestures during a news conference at the Casa Rosada Presidential Palace in Buenos Aires, Argentina, January 17, 2017 (Reuters/Marcos Brindicci). Argentine President Mauricio Macri gestures during a news conference at the Casa Rosada Presidential Palace in Buenos Aires, Argentina, January 17, 2017 (Reuters/Marcos Brindicci).

Argentine President Mauricio Macri and his team can take a bow for their first year in office. Despite Macri’s outsider status and his party’s limited influence in the Congress, he in short order took on the country’s biggest economic distortions—unifying the exchange rate, resolving the fight with international creditors, cutting energy subsidies, reestablishing credible statistics, and eliminating a whole host of tariffs, quotas, and export licenses. Read more »

Trump Won’t Stop Investment in Mexico

by Shannon K. O'Neil
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 Odebrecht Settlement and the Costs of Corruption

by Matthew Taylor
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
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
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
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 »

Corruption, FATCA, and the Tightening Dragnet Around Brazilian Offshore Accounts

by Matthew Taylor
Brazilian Federal Revenue Secretariat, SRF, corruption, FATCA, brazilian offshore accounts, Swiss bank accounts, Car Wash, Panama Papers, Foreign Account Tax Compliance Act, Repatriation Law, illicit money Replicas of R$100,00 banknotes are hung on a clothesline during a protest of the national union of prosecutors against money laundering in Brazil, at the Esplanade of Ministries in Brasilia March 18, 2015 (Reuters/Ueslei Marcelino).

The Brazilian Federal Revenue Secretariat (SRF) has some good news to cheer: a big haul of fines and taxes from assets held offshore by Brazilians. The deadline for filing under Brazil’s equivalent of the Offshore Voluntary Disclosure Program ends October 31, but news reports suggest that more than US$12.6 billion in foreign bank accounts held by more than 25,000 Brazilians have already been disclosed, leading to fines and taxes of nearly US$4 billion on money ferreted away in accounts that had previously been inaccessible to tax officials. More than a third of that money has been declared in the last week alone, suggesting that by the end of the month, the absolute volume of fines and taxes may be near the amounts collected under a sister program in the United States, whereby 45,000 taxpayers contributed US$6.5 billion to the U.S. Treasury. Read more »

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 »

Interview With Jim Zirin: Current Events in Latin America

by Shannon K. O'Neil
Jim Zirin, Conversations in the Digital Age, United States, Mexico, Brazil, Colombia, Venezuela, U.S.-Mexico relations, peace deal, impeachment (Courtesy Jim Zirin)

Last month, I had the pleasure of joining Jim Zirin on “Conversations in the Digital Age” to discuss the U.S.-Mexico relationship, the presidential impeachment in Brazil, Colombia’s peace deal, Argentina’s return to global markets, and the turmoil in Venezuela. You can watch the interview here.