December 2018 | Latin America facing 2019 by Arturo García Rosa
Latin America facing 2019
Another year is coming to an end, a year marked by the ups and downs of the world economic situation, the strong irruption of protectionism imposed by Trump administration on the world’s greatest nation, the trade war that unleashed by this and above all the impact that this has had on the USA-China relationship, all closely followed by Russia and Germany.
Europe with its bit, the migratory problem caused by the arrival to its lands from the other side of the Mediterranean and the threat from some of its members to follow Great Britain, which is in the final stages of a Brexit that, if it were to be voted on again today, would never happen. Paradoxes of today’s life, of politics, of those who practice it and even of those that fed up with its results have contributed with their idleness to making Brexit a reality that most of the people no longer want. At the time of writing, France is facing a very important crisis that has paralyzed its capital city, Paris, thanks to the excesses of the “yellow jackets”, who have taken the lead in the protests against Macron.
All of this within the framework of what, as many are predicting, could be the beginning of a new downcycle of world economy that could become visible in the second half of 2019.
In this context, our region is preparing for some important changes, some of which have begun to take their first steps, such as the assumption of López Obrador as the new president of Mexico, which marks an important change of course at least in the political sign of those who had until weeks ago the responsibility of carrying out the agenda of the largest economy in Latin America in the last years.
Paradoxes are now appearing again in our region. This change will be followed shortly by the arrival of the new president of Brazil. Bolsonaro stands for a change absolutely opposite to that shown by Mexico. Bolsonaro leaves behind years of populism to lead a totally different project, far from the populism of the PT of Lula and Dilma and that introduces some threats of being able to go down a path similar to that of Trump, at least in the issues of protectionism and questions related to internal security.
Considering that this is the second largest economy in Latin America, the implications, depending on how the new president finally orients himself, will impact on the future of many of the economies of the region. Meanwhile, Mercosur, the free trade market led by Brazil and Argentina with the main South American markets, is wandering through one of its worst moments awaiting the concrete definition of the new Bolsonaro administration.
Specifically in relation to the development of hotels and tourism in the region, considering the scenario described, we find a year-end showing a growth of many of the markets, except for Chile and Uruguay who have suffered the impact of the Argentine crisis, the main generator of demand for both. However, it is important to point out that the cases present differences. It seems that Chile will finally suffer less that impact and the new administration established during the current year led by Piñera, who has returned to the presidency of his country, have given a breath of fresh air to an economy that felt the oppression of a regime that had begun to bind it.
In the case of Uruguay, on the other hand, the coming summer season will definitely shape what can be expected in 2019. Argentines are still by far the main market for that country and it seems that this will cause a sure fall, the question is what the magnitude of it will be. We would have to wait until the end of February to confirm this data.
Argentina will face 2019 as the year of the presidential replacement and all the doubts and expectations will be then renewed, regardless of the mistakes made, of the inheritance received, of the pending changes, etc. Argentines would decide that there is no turning back or, on the contrary, there will be a return to the degrading, decadent populism that has marked the era of the governments that preceded President Macri.
Personally, as an Argentinean who decided to migrate seven years ago, I have no doubt that, apart from the “political stew” that only the same politicians cook and eat, Argentines have long ago made the decision for a change, even when it does not show in their real life, and hope that this transitional government that will mark Macri’s first 4 years (if he gains re-election) will be a step on the long road to recovery demanded to rebuild an economy and society devastated by Kirchnerism and much of a Peronism that decided to follow it and now hides behind whatever possible.
In the last two months, after the last edition of SAHIC in Medellín, I have visited the main Latin American markets and in the main ones I have found a clear commitment to continue working on new projects, even though in most of them there is a clear claim to the political class that does not seem to give back to society the effort it makes to maintain it.
To all, best wishes for 2019 and to continue striving for the development of this industry that still has much to give.