Weekly Roundup: Credit Crunch Strikes, a LatAm Anti-Crime Summit, and Cuban Blogging

The Credit Crisis and Latin America

Brazil’s Bovespa took a hit on October 6, closing the trading sessions twice as their index fell 15 percent to reach its lowest level since March 2007. Colombia’s IGBC index fell 4.86 percent while officials rushed to calm wary investors. Mexico’s IPC index dropped 7.29 percent as the peso suffered its worst day since 1995.

Many economic analysts in the hemisphere agree that Latin America stands better positioned than in the past to weather the kind of global market volatility resulting from the credit crisis. Yet, as Monday’s market turbulence showed, the region now feels the impact in spite of its stronger macroeconomic foundations, and experts say further adjustments must be made to steady the course. Writing for RGE Monitor’s Latin America EconoMonitor, Columbia University’s Thomas Trebat spells out four policy initiatives that, added to a fiscal and balance of payments surplus in the region, might help Latin American countries endure the credit crunch. Trebat warns that some of his recommendations, such as curbing public debt and trimming fiscal spending, will face political resistance.

University of Pennsylvania’s Universia Knowledge analyzes the current financial turmoil and how inflation and tight credit spells a slowdown in growth of regional performers such as Brazil and Peru.

Read AS/COA’s coverage on the regional financial markets’ volatile climate and actions taken by officials to soothe investors’ fears.

Canada's PM Unveils Relief Package in Advance of Election

Less than a week before Canadians vote in parliamentary elections, Prime Minister Stephen Harper unveiled a $745 million package aimed at helping manufacturers through tariff relief and loans at a time when Ottawa sees its economy taking a turn for the worse as a result of global financial insecurity. Harper's Conservative Party is expected to win the in the election, but has lost some ground in polls.

PRI Staging Political Comeback

On October 5, the Institutional Revolutionary Party (PRI) gained several legislative seats and mayoralties in municipal elections. Perhaps the most important electoral jewel won by the PRI was the mayoralty of Acapulco. A Harvard International Review blog takes a look at how victories by the PRI—the party that held power for more than seven decades—demonstrates voter disillusion with the Party of the Democratic Revolution (PRD), which has been plagued by infighting. The PRI wins will likely give the party a leg up in mid-term congressional elections set for next summer.

Drug Cartels in Mexico Linked to FARC at Crime Summit

Mexican President Felipe Calderón addressed the first Inter-American Meeting of Ministers Responsible for Public Security and called for the creation of an alliance to fight organized crime throughout the region. The summit, proposed by OAS Secretary General José Miguel Insulza, serves as a forum for sharing successful experiences in increasing public security.

At the meeting, Colombia’s Defense Minister Juan Manuel Santos revealed that Mexican drug cartels are buying cocaine directly from the Revolutionary Armed Forces of Colombia, commonly known as the FARC. World Politics Review offers an analysis of information found on the computers and flash drives in Bogota’s March raid targeting FARC commander Raúl Reyes on Ecuadorian territory. The data links government officials in Latin America, Europe, and the United States with the FARC, and continues to produce political tensions between Colombia and its neighbors.

Mexican Senate Committee Casts Energy Vote

After months of debate and bickering about how to reform state-owned Petróleos Mexicanos (Pemex), the Senate’s energy commission cleared the way for both houses of Mexico’s Congress to vote on a proposed energy bill. The legislation would allow Pemex to sign contracts with foreign oil firms, but with safeguards and limitations, reports AméricaEconomía.

Read AS/COA analysis of the struggle for Pemex’s reform.

Cuba’s Growing Cyberspace Presence

IPS News reports that blogs are flourishing in Cuba, despite the difficulties of getting Internet connections and hawkish government oversight. A solution to one technological obstacle rests on the horizon: A fiber-optic underwater cable from Venezuela is in the works and could be operational by 2010.

LatAm Missing from Presidential Debates

Matthew Hodes, a senior advisor to former U.S. President Jimmy Carter, writes in a Miami Herald op-ed that the souring economy and other hot topics have overshadowed U.S. policy proposals toward Latin America  in presidential debates. The article draws attention to present U.S. foreign challenges posed by Venezuela, Bolivia, and Cuba, among others.

Fewer Undocumented Immigrants Heading North

The Pew Hispanic Center released a report showing that the flow of undocumented immigrants into the United States has slowed down since 2007, dropping below the number of legal permanent residents allowed in the country each year. By the latest estimate, 11.9 million undocumented immigrants live in America, making up 4 percent of the population.

U.S. Policy Toward Bolivia

Seth Kaplan, author of Fixing Fragile States, writes in a Christian Science Monitor op-ed that Washington should work with the Union of South American Nations to handle recent political instability in Bolivia. In particular, Kaplan recommends that the United States should urge Brazil, Bolivia’s primary foreign investor, to employ policies that will support reconciliation in the deeply divided Andean country.

Central America United

Presidents and special emissaries from Central America and the Dominican Republic gathered in Honduras to close ranks against the financial instability that threatens world markets as of late. The officials also discussed integration policies and ways to beef up intraregional trade.

Cycles of Constitutional Reform in Latin America

In a Latin Business Chronicle article, José Luis Cordeiro, a fellow at the Institute of Developing Economies, surveys constitutional changes in Latin America from a historical perspective, highlighting the Dominican Republic’s record of producing 32 constitutions since it gained independence in 1844. “[I]t seems that a large number of constitutions is almost always a good indicator of political instability in a country,” writes Cordeiro.

Read an AS/COA interview with Professor of History Alfonso Quiroz on recent attempts at constitutional reform in Andean countries.

Evo Sets Presidential Elections for June 2009

Following a constitutional referendum, Bolivian President Evo Morales intends to schedule general elections for June 2009, a year and a half before the originally scheduled date. The opposition reacted with skepticism to the decision, saying Morales hopes to reap the benefits of his latest electoral successes and extend his mandate, set to expire in 2011.

Read AS/COA analysis of Bolivian August recall elections.

Building a Political Alternative in Venezuela

AS/COA Online offers an exclusive interview with the mayor of Caracas' Chacao municipality, Leopoldo López, on his quest to nurture a political alternative in Venezuela. He describes his recent disqualification from the upcoming November municipal elections, in which he was poised to win the mayoralty of Caracas. The government barred López and hundreds of other opposition candidates from running based on unproven corruption allegations.

Lagos Out of the Running in Chile, Boosting Insulza

In an interview over the weekend with El Mercurio, Chile’s former President Ricardo Lagos announced his resignation as a pre-candidate for the presidential nomination of his political party Concertación, giving a boost to OAS Secretary General José Miguel Insulza in advancce of the coalition’s convention on November 29. The Chilean presidential election is scheduled to be held in December 2009.

Argentina Explores for Oil in the Atlantic

Joining Brazil and Uruguay in a quest to find new energy deposits, Argentina inaugurated operations of its first exploratory oil rig in Atlantic waters. Argentine President Cristina Fernández de Kirchner visited the Ocean Scepter platform on October 6 and praised Argentine entrepeneurs who supported the project.