Guest: Michael Reid, Senior Editor and Columnist on Latin America at The Economist
COVID-19 could erase Latin America’s last two decades of poverty reduction. How can the region’s largest nations – Mexico and Brazil – soften the blow?
Mexico and Brazil, the two largest countries in Latin America, are facing a bleak 2020. Distinct in geography, language, history, and culture, the two countries are nonetheless defining bookends of the region. With Brazil’s enormous economy and Mexico’s proximity to the U.S., both are contenders to become economic titans on the world stage. But the nations are burdened by endemic poverty, violence, corruption, and an overzealous central state. And their populist leaders – Brazil’s right-wing President Jair Bolsonaro and Mexico’s traditional leftist President Andrés Manuel López Obrador of Mexico – have downplayed the gravity of the pandemic amid skyrocketing infection rates. These regional economic locomotives could come screeching to a halt – leaving their citizens and the region in disarray.
Michael Reid, senior editor at The Economist and author of the magazine’s Bello column on Latin American affairs, joined Altamar to discuss Mexico and Brazil’s challenges and post-pandemic futures. Currently based in Madrid, Reid has lived in Latin America for years, covering the region for The Guardian and BBC, among other outlets. In addition to his award-winning journalism career, Reid is the author of several books on the region, and is a sought-after commentator in Europe, the U.S., and Latin America.
As the pandemic guts the global economy and jams supply chains across the world, Brazil and Mexico are especially vulnerable. According to Reid, “It’s true of Latin America in general that COVID struck a patient with prior conditions, both political and economic, but it’s particularly true of Brazil and Mexico.” During one of the worst crises in living memory, Reid argues that both countries are run by “highly polarizing presidents who have yet to show that they can govern competently.”
Indeed, many other Latin American leaders reacted swiftly to mounting coronavirus cases. Borders were shut. Flights were grounded. But Bolsonaro and López Obrador refused. In recent months, Brazil and Mexico have seen the highest number of deaths in Latin America – more than 91,000 and 46,000, respectively.
Though Brazil and Mexico’s leaders are at opposite ends of the political spectrum, Reid says “the most important political fact about [Bolsonaro] and [López Obrador] is that both are populist….Both thrive on presenting themselves as the authentic representatives of the people…And in both cases, they thrive on polarization, confrontation.” Nevertheless, Reid argues that not all populists have downplayed the threat of COVID-19 or given more preference to the economy over public health restrictions, pointing to El Salvador’s Nayib Bukele, Hungary’s Viktor Orbán, and India’s Narendra Modi. Meanwhile, says Reid, Bolsonaro and Lopez Obrador have scoffed at quarantine measures and failed to “buy time through restrictions on movement, to buy time for health systems to expand and prepare and so on.”
Reid argues that of the two, Brazil has the economic upper hand amid the pandemic crunch: “In economic terms, I would be slightly less pessimistic about Brazil than about Mexico, because I think there is some possibility of a tax reform, a vital and much needed tax reform. Brazil might give a little bit of impetus to the economy.” According to Reid, Mexico should have opportunities to build new global supply chains and to benefit from its new trade agreement with the U.S. and Canada, “but in the private sector, there simply isn’t trust in the current president and the current government in Mexico.” Indeed, in the energy sector, “in terms of the foreign industries in each country, in Brazil, the outlook is better than in Mexico, because in Mexico, President López Obrador has essentially halted the energy reform that opened the sector to private investment, and he’s throwing a lot of public money at a giant oil refinery that many people doubt that Mexico actually needs.”
Brazil and Mexico are also isolating themselves from the world through extreme or nonexistent foreign policies, according to Reid. “Bolsonaro’s foreign policy is extremely divisive and controversial in the world, as particularly seen from Europe,” he says, pointing to the examples of deforestation and climate change. On the other hand, Reid argues that “López Obrador’s foreign policy is not to have a foreign policy, and therefore it gets less noticed outside the United States…I think López Obrador will be much less comfortable if there is a Biden presidency because the Democrats are more likely to care about human rights and governance and so on in Mexico.”
To maintain the strides Latin America has made over the last two decades, “much depends on whether political stability can be maintained, and whether therefore the economic recovery that ought to happen on paper, slow that it may be, does indeed happen,” says Reid. But his proposed solutions for the region’s powerhouses – “a more investor-friendly political stance in Mexico, less political turmoil in Brazil” – will be difficult to achieve: “[Both] would be helpful, but I’m not particularly optimistic we will see these things.”