Mexico fears Trump, Brazil fears corruption

Patricio Navia

Buenos Aires Herald, May 26, 2017

 

At the start of 2017, the two largest countries in Latin America faced very different threats. While Mexico was bracing for the upcoming inauguration of Donald Trump, Brazil was stuck with the political fall-out of corruption scandals. In January, Mexico seemed to have a bigger challenge ahead than Brazil — but today, the outlook seems brighter for Mexico than for Brazil.

 

A country of 210 million inhabitants, Brazil has gone through a tumultuous four years since street protests first erupted in 2013. Though the protests should have been a wake-up call, the political elite did not seem to worry too much about growing popular discontent. A year later, president Dilma Rousseff won re-election, giving her left-wing Workers’ Party its fourth consecutive presidential election victory. Things continued to go downhill for Brazil though. The economy entered a recession in 2014 due to the end of the commodity boom and the government’s inaction. Then, things took a turn for the worse when an illegal campaign finance, bribery and kickback scheme — known as Lava Jato, or Operation Car Wash — saw dozens of politicians implicated in wrongdoing. The suspicion that all politicians were involved — or were at least susceptible to corruption — became widespread.

 

Ever since the Car Wash probe exploded, judicial proceedings have dominated the political news. The impeachment of president Rousseff in 2016 only intensified the perception that the entire political class was caught up in the corruption scheme. Her successor, Michel Temer, in the year that he has been in power, has been unable to leave the scandal behind. Several of his ministers have been forced to resign and the ramifications of the scandal continue to reverberate. Most recently, Temer himself has been under fire after new revelations that apparently implicate him in trying to buy the silence of Eduardo Cunha, the former speaker of the Chamber of Deputies and the man who championed Rousseff’s ousting. Cunha is now serving time for his own involvement in the corruption scandal. Though Temer has fiercely fought the accusations against him, many people believe that he will be forced to resign soon. Even if he survives, Temer will be a lame duck and the economy will likely fall back into recession. Some opposition leaders are asking for early presidential and legislative elections, which are scheduled to take place in October, 2018. Whatever happens, the Brazilian political system is on the verge of collapse. Needed economic reforms will not be implemented and Brazilians will continue to feel that their country is going downhill.

 

With 120 million inhabitants — and some 20 million more residing in the United States — Mexico is the largest Spanish-speaking country in the world. The election of President Enrique Peña Nieto in 2012 brought the Institutional Revolutionary Party (PRI) back to power after 12 years of market-friendly right-wing administrations. Ousted in 2000, the PRI had previously ruled Mexico for 70 years. Peña Nieto won the election, promising that a renewed PRI that would govern with democratic means would also be able to introduce market-friendly reforms that could help the country grow more rapidly. However, growing levels of violence associated to drug-trafficking and growing corruption ended up undermining Peña Nieto’s reform efforts. The disappearance of 43 students in the state of Guerrero in 2014 became symbolic of the lack of police and government accountability. Revelations about a mansion acquired by the president;s wife — a former soap opera actress — through a private company that has contracts with the government then became the symbol of government corruption. Peña Nieto became an early lame duck, even with more than four years left in his six-year term.

 

Things took a turn for the worse in 2016 when Republican presidential candidate Donald Trump started campaigning by lashing out at Mexico, promising to build a wall on the border between the two countries (and make Mexico pay for it) in order to curb illegal migration. Trump also vowed to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico. The former reality TV star’s surprising victory hit Mexico heavily. The Mexican peso quickly devalued against the US dollar and investors fled the country fearing the effects of the incoming US president’s nationalist policies.

 

Four months into Trump’s presidency, anti-Mexican and anti-free trade rhetoric remains strong, but the rapidly weakening US president is in so much trouble that it looks increasingly unlikely that he will be able to undermine free trade with Canada and Mexico. Though Trump continues to pledge that a wall will be built, it is unlikely that Congress will allocate the necessary funds. The growing perception that Trump might not complete his four-year mandate — or at least that he will become an early lame duck — has brought back optimism to Mexico and makes the country’s prospects for the future a bit brighter.

 

Five months in 2017, the outlook for Latin American countries is anything but bright. But in relative terms, things have turned out far better for Mexico than for Brazil. With Trump seeming far less threatening today than when he first took office, Mexicans can breathe a sigh of relief. For Brazil, on the other hand, the outlook is far less optimistic today than it was when 2017 began.