The last month of economic news has been as diverse as the last 10 months of the same forecasts. With the start of July, the drop in recent markets worldwide and predictions of further problems in large economies such as the UK and Japan set to bring the recession further attention, but by mid month the result was that some US banks were making some profits, even paying back small sums of money to Mr. Obama and some auto manufacturers were not destined to be completely eliminated as stability slowly crept back into market forecasts. While these announcements will likely change in the next few weeks as SME’s continue to wind up their companies, the biggest market change seems to be coming from China and India. While many believe that only 8% growth in China may be the limit in order to stave off mass discontent among its population, growth rates of 5% or more in places like India, and lower yet stable rates in Brazil draw attention to hopes of an economic recovery coming from the recently famous super emerging economies of the BRICs. Of great interest and increasing popularity, Brazil, who has managed to maintain a stable growth rate in their economy since the 1990’s global economic troubles between 3-5% and was able to reasonably shield itself from the meltdown of Argentina’s economy in 2001. Brazil is beginning to change into the next large emerging market economy in form and function. The recent recession has taken the new Brazil and brought its relative successes in the last few months into the meeting rooms and policy branches of those economies who wish to change the relationship between North America and Europe towards South America’s largest and most promising economy.

In the Americas there are two large economies outside of the United States that while being hit hard by the recession, have managed to keep the core financial and economic systems of their countries in good shape. Canada and Brazil have stood out as two of the largest stable economies in the Americas and worldwide. With banking systems that have not collapsed and reserves of cash from past years of growth shielding some of the effects of the global economic crisis, both countries could begin to push the Americas and world economy back into positive territory. Limits to BRICs and other relatively healthy economies may be restricted formally and informally however depending on how the EU and US decide to react to other large economies worldwide. Effects on countries such as Canada and Brazil might be produced by restrictions coming from the new Buy America provisions in the US or as an example, be expanded by talks of a possible EU-Canada Free Trade Agreement. Limiting trade between NAFTA partners in North America and retracting from agreements between the US and trade partners in the Americas is what all trading partners of the US fear in the region as well as globally.

Many experts on global economics such as Zakaria and Khanna see the US as possessing a major role in the future world economy, but also one of shared influence and regional power as a necessity. Limits to expanding the economies of the Americas in a united fashion is seen in the lack of interest in regional trade agreements and the lack of support for trade agreements as with the one with the US and Colombia. While the US seeks to put pressure on its economic allies during the recession, the EU is seeking increased open trade with large economies such as Canada, India and China, and China is seeking many economic ties with countries such as Peru, Chile, Venezuela, Argentina and of course Brazil. Even Canada has ratified a trade agreement between itself and Chile, Colombia, Costa Rica and is working on agreements with CARICOM. Effects from Buy America might better regarded as the Buyer Beware provisions, as the US creates a policy environment to push its allies to trade with other economies outside of the Americas and produce economic legacies outside of the US which will strangle future growth of private industry in the US itself. As with any investor, the prospect of future governmental and trade restrictions by doing business with a US company or investor will produce negative incentives in the long run. With so few healthy investors currently, economic legacies such as Ford, Disney, Coca-Cola and McDonalds may be replaced by those created and grown in other healthy economies outside the US and the Americas…bad economic policy is simply a caveat emptor of economic growth.

Not all US policy experts agree with Buy America, and some even have been making attempts to approach Brazil as the next India or China. Mind month, the publication and discussion of the new book: Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy was accompanied in Washington DC by a discussion of Brazil as a rising global economic power. This book launch and discussion followed the Brooking Institutions release of interesting economic data and reports on the region as a whole. Many of these discussions focus or Brazil or Latin America as the next China or India, but in reality the Latin American method or growth and that of growth in China, India and Russia only bare some basic similarities. Latin America and Brazil have traditionally depended on commodity prices principally. While the Brazilian economy is fairly diversified, a large portion of its GDP does come from commodity and oil prices, which is similar to a country like Canada who have a great deal of GDP linked to natural resources. Manufacturing in all economies, including Canada, Brazil, China and India have been greatly affected, leaving China with a growth rate of 6.1% in the first quarter of 2009. While oil prices and other commodity prices have bounced back and forth since 2008, manufacturing has taken severe hits in all nations. China and to a certain degree, India, depend greatly on the demand in foreign markets on US and global consumer spending. Entrepreneurial Organisations such as the SBA.org in the US and CFIB in Canada would be able to make the point that many of the jobs in the US and North America depend on SME’s, and with the increase in bankruptcies and the lack of business loans coming from banks in any financial state, the job loss will only increase and create a further decline in consumer spending. Manufacturing depends on its consumers being able to purchase its good and grow the economy. China, who produces many of these good in the US and EU are entirely dependent on these economies as their growth is directly linked to US and EU consumers. Brazil, while dependent on consumer spending has less than 40% of its trade with the US and is balanced by heavy industry, commodities and technology industries. While many of these sectors are hurt by the recession, it gives Brazil some added security in the long term within the global economy.

The news on recent increases in growth in China and India are positive, but with many consumers losing jobs recently and many smaller industries only failing in recent weeks, it is hard to predict a concrete economic demand for consumer products and link growth in China to the markets it depends on. In reality, many smaller and larger US firms often depended on cheap operating loans from US banks, and without not only financially stable banks, but banks willing to give out loans to investors, it is impossible to justify any prediction of growth in consumer spending when SME’s are neglected from economic recovery and are the last to receive financial aid in the economic crisis, yet provide the majority of jobs in many developed countries. Countries like Brazil and Canada should be considered a relatively strong option for investors, as historically and logically growth seems more likely for all levels of industry in few similar countries in the long run and the avoidance of economic bubbles have been relatively successful in the past.

An interesting piece I encourage you all to read:
Latin America and the Economic Crisis: Designing and Implementing Stimulus Policies
Mauricio Cárdenas, Director, Latin America Initiative
The Brooking Institution

June 25, 2009 —
Dani Rodrik recently wrote in his daily blog that Andrés Velasco is the living example that sound macroeconomic policies have a high dividend. Chile’s decisive fiscal stimulus package—adopted last January—has made him President Bachelet’s most popular minister. Not too long ago, during the years of high copper prices, many Chileans questioned their government’s economic management for saving too much and postponing key investments. Of course, those critics are silent now. Events are showing that a commitment to rules that focus on long run objectives, rather that immediate gratification, pays-off.

But rather than talking about Chile, I would like to make a more general point regarding Latin America. Today’s conventional wisdom –and I say this in complete awareness that ministers generally adhere to, and oftentimes shape, mainstream views—is that stimulus packages are working and that Latin America will soon be out of the recession. In Brazil, for example, most analysts consider that the contraction is a thing of the past. I want to take issue with those views.

Let me start by stating what, in my view, is the conventional wisdom:

The adoption of sound macroeconomic frameworks, mostly since the late 1990s, allowed Latin America to bring down inflation and public debt. Foreign reserves are high for historical standards, reflecting stronger current accounts and access to external capital. As a result, Latin America is coping with this crisis much better than a decade ago. In fact, there has been no crisis, just a mild recession.

Key to the current episode has been the ability to conduct countercyclical monetary and fiscal policies. In the current phase of the cycle, policy rates set by the central banks have been cut to 0.75% in Chile (a reduction of 7.5 percentage points), 4% in Peru, 4.5% in Colombia, 4.75% in Mexico, and 9.25% in Brazil.

Fiscal stimulus has also been the norm, although the size and composition of packages has also varied from country to country. The largest expansions have taken place in Chile (2.5% of GDP), Brazil, Peru, and Mexico.

Macro-financial variables have shown remarkable stability. In 2009, inflation has been falling, exchange rates have appreciated, stock prices have increased, and spreads on sovereign debt are falling.

Even though production and employment figures are still declining –and GDP growth projections are being revised downwards– virtually all forecasts suggest that the recovery will start soon. The latest Global Development Finance Report from the World Bank (the less optimistic of the existing “official” reports) projects major rebounds in all economies. The difference between the 2010 and the 2009 GDP growth forecasts is 5 percentage points for the world economy. The corresponding figure is 5.4 percentage points for the OECD countries, and 4.2 percentage points for Latin America. The expected rebound is spectacular for Mexico (7.5 percentage points).

I think this view errs on the side of optimism. Latin America should hope for the best but prepare for the worst. By not properly considering the risks ahead, governments have the temptation of exhausting the policy tools and not reserving any ammunition for battles that are foreseeable. My critique of the conventional wisdom is based on the following four points:

The numbers on real activity and aggregate demand conditions which are coming out from Latin America are not that encouraging

Although it is true that retail sales in Brazil increased 6.9% in April (relative to a year before), industrial production registered a 14.8% contraction in May. In Mexico, where GDP contracted by 8.2% in the first quarter, industrial production fell 13.2% in April, and consumer confidence continued to fall in May. The Chilean economic activity contracted 4.6% in April and industrial production fell by 11.1%. The figures for other countries show a similar picture: Latin American economies are experiencing a deep contraction, and the evidence does not suggest a significant recovery underway.

Of course, all this could change with a big rebound in the second semester. But, is that realistic? The contraction in investment has been in the double digits during the first months of this year for the majority of countries in the region, and will have an impact on future growth. More importantly, investor and consumer confidence measures are very low and still falling in the majority of Latin American countries. We know from past episodes that it takes time –and a good amount of positive economic news– to reverse the direction of these perceptions, especially the consumer’s sentiment.

Latin America is betting on the rebound of commodity prices

China’s real GDP growth slowed to 6.1% during the first quarter of this year. Although several measures of real activity and domestic demand have been improving lately (investment grew by 32.9% in five months to May), exports continue to deteriorate. Chinese exports contracted by 26.4% in May, suggesting that there is excess capacity. To the extent that exports do not recover, investment will loose momentum as well as commodity imports, which have increased for stockpiling purposes. These are very negative news because they suggest that the surge in commodity prices will not last. Why commodities moved ahead of the fundamentals is not clear, but Latin America should be prepared to deal with prices which are more in line with lower Chinese import demand in future months.

Private capital flows are shrinking at an alarming pace

The World Bank projects that net private debt and equity flows to developing countries will decline from 8.6% of global GDP in 2007 to 2.0% in 2009. This is much worse than in the debt crisis of the 1980s or the Asian and Russian crises combined. Many in Latin America argue that the region is somehow immune to this trend, mainly because of the role that foreign direct investment plays in the region. This could be true, but at the same time, the evidence available suggests that FDI flows depend largely on growth in the OECD countries. With the major contractions expected in the U.S., Europe and Japan, FDI flows will fall in the medium term. The latest IMF data suggests that this is already happening. The investment projects under way are likely to be completed, but starting new investments is a different game. The recent drop in the cross-border M&A activity is a strong signal in this direction.

For the emerging and developing countries as a whole, private debt and equity flows will likely fall short of meeting external financing needs. The question is how much of the shortfall will affect Latin America. Some countries are better prepared than others. Countries with large current account deficits, strong dependence on tourism and remittances, and limited access to private debt and equity flows will suffer considerably. This of course, points in the direction of Central America and the Caribbean, where a sharp adjustment seems inevitable.

In the largest countries, with access to international markets, much will depend on the ability of private firms to roll over their debt. There are hundreds of corporations in these countries that borrowed in the international syndicated loan market and some that issued international bonds during the last few years. They hold the majority of the outstanding short term external debt as well as the medium to long term obligations coming due in 2009. Financing the public sector is not the problem; the real issue is how to refinance the large Latin American corporations.

The prospects in this regard are not all that encouraging. The supply of credit to the region could fall even further because there are mounting pressures on the capital position of the major banks. Liquidity problems in the global interbank market remain an obstacle for banks to fund additional assets, while tightening of credit standards has been generalized. Last but not least, government ownership (even if temporary and partial) of the large banks changes the priorities in the direction of domestic recovery in the developed world, rather than greater credit risk exposure in emerging countries.

There is no ammunition left

The capacity of central banks to cut interest rates and of governments to provide more fiscal stimulus is very limited. Even in Chile, there is discussion that the fiscal deficit is already too high and that the government should bring it down again next year. The Mexican central bank has said that further cuts in interest rates are not likely, in line with the language other monetary authorities have used recently. In other words, fiscal and monetary policies do not have many degrees of freedom. If the world economy does not recover soon and private capital flows to Latin America remain low, there is not much that Latin American countries can do. Even worse, it is possible that some of the expansionary policies of the recent months will need to be reversed. This is already part of the debate in countries like Mexico, where the government may need a tax increase to cut the fiscal deficit in 2010.

In summary

In summary, Latin American governments and multilateral banks are betting excessively on a sharp economic recovery. For their projections to be right, a major recovery should be already underway. The latest figures, however, do not support that view. Even if the U.S. shows a moderate V- shaped recovery in the next two quarters, China’s imports, commodity prices, and private capital flows could still be the source of very unpleasant news for the region.

Mexico in 2009 has become the recipient of at least half of the most famous biblical plagues starting in 2008. This past week brought yet another earthquake to Mexico, the second this month that received some media coverage outside the country. In addition to a full scale drug war, H1N1 flu, an economic crisis, political jockeying, immigration issues, drug related and everyday corruption and a persistent high level of poverty, Mexico and its leaders could claim to have more on their plate than Barack Obama has to deal with in the US today and for the rest of his Presidency.

Debates of where the blame for much of Mexico’s ills comes from has brought in voices from opposition within and outside of Mexico, its NAFTA partners, the WHO, IMF, World Banks and the UN itself. However in a general perspective has Mexico’s leaders performed worse than most other leaders in similar positions? Felipe Calderon’s government while blamed for igniting much of the drug conflict has tried to do more to fight narcotrafficking than any other Mexican leader in the past. Support for his anti-drug initiative has come from the US and Canada and South America, and while drug markets and demand has been claimed as the root cause of Mexico’s conflict by many in Mexico and by even Obama himself, NAFTA has become collectively aligned fighting against cartels that are well entrenched from Cancun to Vancouver. While NAFTA has always been exclusively a trade agreement, heavy cooperation in fighting drugs that come through many commercial and immigration sources also is the route of much of North America’s trade wealth boom since 1994. Markets which create demand for narcotics also demand other products from Mexico, Canada and the US which are not drug related, but may open for easier access to narcotrafficking across borders. The end result is that cooperation and addressing the drug issues are the only option in reducing the drug trade in North America by maintaining strong ties between the three NAFTA neighbors. I request that if other policy alternatives are a better option that readers voice their opinion.

H1N1, or Swine Flu as it was called before the WHO’s public relations people set out to change the definition did start in Mexico despite some claims otherwise in the country of its origins, and it is still in debate who is to blame. Blame has been knocked around quite a bit in this latest crisis, starting with slow action by Calderon and Mexico’s government to voice the issue abroad, leading to the WHO’s slow action in issuing alerts, leading to practices by Mexico’s agricultural industry and large multinationals, to claims of a poor health system in Mexico that is often a stereotype of many in developed countries abroad. The political fallout will determine the end result of the Swine Flu, but what should be noted is the effective actions taken by Calderon, Mexican public health officials, industry and citizens who completely shut down the most populated city in human history numbering almost 30 million and the other 70-80 million Mexicans who quietly kept indoors and patient over more than a week in order to end the spread of Swine Flu in Mexico and abroad. This enormous feat of public health control should be awarded to Mexico who despite having so many current problems, lack of funds, and large populations to deal with was still able to better handle H1N1 than many developed countries handled SARS. While it was not able to contain H1N1 entirely, and a small outbreak in Chile and Japan has occurred recently, it will certainly be studied for generations to come in how to deal with national and international health crisis.

Some issues that have received little attention this past month have been the persistent drug war and some earthquakes in Mexico in the last few weeks. As always, immigration issues while always a constant on the borders only were addressed when Mexican immigrants got the Swine Flu or the influence of drug cartels or were linked to Mexico’s drug war in the US. These mainstay issues will likely reemerge very soon, which often ignore successes by Mexican officials and highlight possible threats to the US which vary in urgency. With deaths in Mexico easily competing with those in Afghanistan and Iraq, Mexico will likely keep its place on the front page and tv screens of many of its NAFTA neighbours…for better or for worse.

The last few weeks in the Latin American world has been anything but calm. Coming off meeting of the G20 and Summit of the Americas, the region has moved towards many intended transformations in policy and relations with the US and the EU. Some of these major changes are discussed below.

Mexico: With a severely damaged economy, an epic drug war, corruption and now H1N1 Flu, Mexican President Felipe Calderon likely feels more like the recipient of biblical plagues as opposed to Mexico’s overworked president. Shutting down the largest city in the world for 5 days is no easy task, but with Mexico’s already suffering argo-business and tourism industries on the edge, an outbreak was the last thing Mexican business and the Mexican people needed at this time. The economic impact of the flu will be severe, and many will likely offer additional financial support to Calderon’s Mexico well after the hysteria of Swine Flu subsides. While the blame for the outbreak is being tossed between the WHO and Mexican officials, impressions of the unknown nature of the Mexican healthcare system is routinely being critcised by those outside of Mexico despite the extreme and sensible measures taken by Mexican officials in the process. Anti-Mexico feeling is likely not raised by a significant degree past the normal levels of criticism, but caution from areas such as Hong Kong; where SARS originated, and China, where Mexicans visiting and living in China were quarantined despite showing no signs of illness are not helping relations between the two countries. President Calderon even sent a plane to collect his citizens, in between public announcements that have brought a great deal of order to an otherwise chaotic Mexico City. For a detailed account of the Swine Flu, please read R G Wallace’s blogpost called The NAFTA Flu on his blog Farming Pathogens here.

Cuba: Cuba’s opening and dialogue with Barak Obama comes on the heels of the election campaign and numerous surveys’ showing the lack of support by many Americans for a trade embargo on Cuba. Writer Alvaro Vargas Llosa of the Washington Post Writers Group wrote an interesting piece on Cuba and Free Trade in last week’s The New Republic. Llosa, who initially supported America’s embargo on Cuba, discusses his reasoning and rationale with many detailed examples for pushing his opinion towards the other end of the spectrum. While he still maintains his support for freedoms of individuals to travel and communicate with whomever they wish, he argues how trade and the absence of financial growth may have actually contributed more to the maintenance of the Castro regime as opposed to helping grow grassroots opposition towards it. Llosa’s numerous examples of regimes who have decayed from within in comparison to Cuba is definitely something worth pondering, but without the ability to re-write history, and re-write Cuba, the only option is to move towards sensible policy in the future, whether that involves Free Trade with Cuba, an embargo or simply a slow and progressive opening of Cuba while pressing for human rights in the process. The Llosa article named Free Trade can be seen here.

Venezuela: Two impressive articles have come out recently speaking about the future of Chavez in Venezuela and its new relations with the United States. In another Washington Post Writers Group article called Regift, Please!, Llosa discusses the book given to Obama by Chavez called: Open Veins of Latin America by Eduardo Galeano. Llosa goes through the main thesis of the book and argues against the intellectual capacity of Chavez and seeks to disassemble the perspectives of the book published originally in the early 1970’s. The book argues that Latin America has always been an absolute victim of colonialisation and imperialism from Europe and the US respectively. In the context of the early 70’s, many of Galeano’s perspectives likely gained a lot of support throughout the decade and remains with many to this day. While growth in Latin America had come in some degree since that time, most of the region sought to ensure Import Substitute Industrialisation measures since the late 60’s well into the 1980’s and growth, while improving in times of economic boom, often ensured that the impoverished in the region were hit the hardest by economic collapses in the 1980s, 1990, post-2000, and even as we speak. Beyond growth and poverty, political issues between the US and various regimes in Latin America had great effects on the development of rights and freedoms in places like Chile, Central America and other specific cases where the CIA is claimed to be involved in the region. While Llosa is right to counteract the claims of Galeano in his book, the context of Latin America in the 1970s and its effect today did create many that might agree with Galeano to some degree, even if they are not supporters of Chavez. In recent works, Galeano perhaps tempered his arguments for a more modern Latin America, but ironically the funds coming in from sales of Open Veins likely made him wealthy in the process. Please place blog comments below. Llosa’s article can be read here.

Human Rights Watch and Chavez: I did write about these issues in the past, and Jose Miguel Vivanco of HRW, who was ejected from Venezuela for a report on Chavez could not state in better than in his article: Exposing a Chavez Charade. I wish that Vivanco’s words make a strong statement on rights in Venezuela, so I have posted a link to it here, and have pasted it below for all to read. Please leave your feedback on all articles and a response to your impressions Human Rights Watch has on Chavez’s Venezuela:

Exposing A Chávez Charade
by
José Miguel Vivanco
Published in the Washington Post
May 2, 2009

Published in the Washington Post José Miguel Vivanco, director of the Americas division

(Mexico City) - President Obama came under fire last month for sharing a smile with Venezuelan President Hugo Chávez at the Summit of the Americas. Critics say that Obama was wrong to be friendly with a foreign leader renowned for his anti-U.S. antics and authoritarian tendencies. It might be expected, because I am a human rights advocate who has documented Chávez’s authoritarian policies and suffered the consequences at the hands of his security forces, that I would share this criticism. But I think time may show that Obama did the right thing.

Already, Obama’s overture has made it more difficult for Chávez to use his personal feud with the U.S. government to divert attention from his country’s problems. It will also be easier for the Obama administration to pursue a serious multilateral effort to pressure the Venezuelan government to reverse its authoritarian approach.

Venezuela is a complicated country. To its credit, it has competitive elections and independent political parties, media outlets, labor unions and civil society organizations. While Venezuela is plagued by chronic human rights problems such as police killings and deplorable prison conditions, there is no systematic denial of fundamental freedoms, as in Cuba. Nor is there an armed conflict with widespread violence by illegal armed groups, as in Colombia.

Yet the Chávez government has actively undermined democratic institutions that are essential for safeguarding the rule of law. It has strengthened the state’s power to curb media freedoms while abusing its regulatory power to threaten and punish critical media outlets. It has systematically violated workers’ basic right to freedom of association and sought to undermine the work of local human rights advocates.

Perhaps most troubling, the Chávez government has effectively neutralized the judiciary as an independent branch of government. This disregard for judicial independence has only fed fears that a recent wave of corruption charges against prominent Chávez opponents — including the opposition’s most recent presidential candidate, Manuel Rosales — could be a campaign of political persecution orchestrated by the government. While the Venezuelan justice system should be prosecuting corruption, it needs an independent judiciary for such prosecutions to be fair and credible.

To deflect criticism of his authoritarian policies, Chávez has relied heavily on a tactic favored by his friend and mentor Fidel Castro: routinely accusing human rights advocates of conspiring with the United States to topple his government. When, for example, the highly respected Venezuelan nongovernmental organization PROVEA issued its annual report on human rights in December, Chávez’s interior and justice minister declared on national television that the PROVEA workers were “liars” who were “paid in dollars.”

In my own case, after Human Rights Watch released a report in Caracas last fall, a colleague and I were forcibly detained in our hotel by Chávez’s security forces and summarily expelled from the country.

How did they justify this abuse of power? By claiming, falsely, that we had violated our visa requirements and were conspiring with the U.S. State Department to undermine the government.

No one familiar with our work, or that of PROVEA, takes these absurd allegations seriously. Yet such allegations resonate with some audiences in Venezuela and elsewhere in the region, ultimately serving to undermine discussion of the country’s human rights problems.

Indeed, the reason such allegations have any resonance is that the U.S. government does have a long and sordid history of conspiring to topple democratic governments in the region. And when Chávez’s opponents sought to oust him in a coup d’etat in 2002, the Bush administration initially welcomed their effort rather than joining in the near-universal chorus of condemnations from democratic governments in the region. This blunder badly damaged the Bush administration’s credibility in the region on issues of human rights and democracy. It also made it much easier for Chávez to cast debates over his policies as merely part of a political and personal contest between President Bush and himself.

Obama took an important step toward ending this dynamic when he extended his hand to Chávez in front of the cameras. He took an even more important step when he acknowledged the “historic suspicions” of U.S. intervention in the region.

That said, a smile and handshake from Barack Obama won’t solve Venezuela’s human rights issues or U.S. problems with Venezuela. And it would be a mistake to pursue a better relationship with Chávez for its own sake, or out of fear that otherwise he will fall under the sway of countries such as Iran, or because Venezuela has oil — as Hillary Clinton suggested in a recent congressional hearing.

Lowering the drama between the United States and Venezuela is worthwhile because it creates an opportunity to focus the region’s attention on developments in Venezuela. In the coming months, the administration must seize that opportunity by expressing concern about policies of the Chávez government that have undermined the independence of Venezuela’s democratic institutions. The United States should also work with regional allies to establish an appropriate multilateral forum — at the Organization of American States or elsewhere — to engage Venezuela on this issue.

Obama’s symbolic gestures were essential to setting the stage for such meaningful engagement. If his administration follows through as it should, the next time Chávez tries to label all human rights criticism as a U.S. conspiracy, few people in the region will take him seriously.

This week’s New York Times published a fascinating article about a topic that many experts on Latin America should find very intriguing. The article titled Deals Help China Expand Sway in Latin America by writers Romero and Barrionuevo was an analysis of China’s growing influence in Latin America, with examples of how Chinese liquid investment in many large projects in the Southern Cone and Andean region seek to take American influence via multilateral organisations and FDI and divide the regions investment among the US, EU, China and the rest of Asia.

Since the admitting of China to the WTO and the drastic change in global trade and manufacturing flows, China has become a benefit to some in Latin America and less of a benefit to others. The New York Times article goes into many examples of how Chinese FDI seeks to fund many large projects in the region, from a development fund in Venezuela, to a hydroelectric project in Ecuador and providing Argentina $10 billion in financial loans and Brazil’s national oil company a similar amount to ensure future projects will send a guaranteed percentage of future oil to China. Relations between the US and many of its southern neighbours often have been strained politically in places like Venezuela and Bolivia, or have been tied in with economic restrictions such as Argentina’s relationship with many international financial institutions which set high risks for investment in the country, often funded and controlled by US investment policy within those institutions. For some in Latin America, Chinese investment is not only a good alternative, but can equal the amount invested by the IMF, World Bank and the US itself as noted in the article.

Concern from American officials will likely become greater as China seeks to displace any US and European FDI and by-pass conditions set by many international institutions that often placed Latin American and other developing countries into a position of forced policy measures. Chinese investment, most notably in Sudan and other parts of Africa, Latin America and Asia are starting to become an alternative source of funds for many countries which prefer to receive investment, but do not want conditions on their local policies, namely those which affect human rights and those connected to poverty reduction strategies. A benefit to a country like Argentina, who’s loan defaults in the past has placed it in a position where poor investment ratings still linger from 8 years ago, have received Chinese investment without major sacrifices at this point. However, places like Sudan, who are responsible for one of the largest ignored genocides since Rwanda receive not only Chinese investment in developing their oil industry, but are also suspected of receiving arms which some have connected to human rights violations in Darfur. Investment without any restrictions or a moral compass was not always practised by those in the West; especially during the colonial period, but the international investment community must decide how investment should be dealt with in the future to avoid mass slaughter of innocent communities, whether it be Chinese FDI or from the West.

Investment in Latin America has often been seen in a different light, depending on the attention Latin America has been paid during various American administrations. The Summit of the Americas this weekend comes on the heels of one of those moments in history where Latin America is becoming re-engaged, at least for the first few months of the Obama Presidency until there are added problems in the Middle East once again. The issue often seems not only one of Economics vs. Security, but one of the Americas being seen as one complete investment block/FTAA vs. a source of illegal immigration and narcotics. Often this debate plays out using clear statements of interest, referring to Latin America as a region described as America’s backyard as opposed to statements linking narcotics, illegal immigration and terrorism in much of US media on Latin America. A debate on US policy always accompanies the region, wavering as Latin America fades in and out of their sphere of influence with attention due accordingly. This challenge does have a distinct element however in 2009, as Mexico continues to fight a full scale drug war and continues its very close economic ties to the US, and Cuba and the US opening dialogue between Raul and Fidel Castro and the Obama administration. These issues may keep the US tied to regional policy until those issues lose interest, as has always been the case. Luckily some policies linked with security and partnership often pay off, as Colombians have seen in 2008-2009 and some successes with Plan Colombia and in Mexico with the Merida Initiative, not always a media attention grabber, but long term policy nonetheless.

Likely future Chinese investment may re-ignite the debate on trade with Latin America if it is seen as a major threat. The US must decide in the end where it wishes to develop its trade policy as those in the Americas seek to promote their own investments abroad if the US does not wish to pursue major investment and trade in the Americas. Debates on NAFTA and trade agreements with countries like Colombia must be taken as policies which benefit not only the United States, but the Americas region as a whole. In reality, trade between those countries in South America had on average less than 40% of their trade with the US and a significant amount with the EU and Asia. China has now displaced the EU as the second largest investor. Countries such as Canada, America’s closest trading partner has signed trade agreements beyond NAFTA, with Chile, Costa Rica and are discussing an FTA with Colombia and even the EU. According to writers such as Khanna and Zakaria, the US must consider its role in the Americas as its leader and develop its interests beyond security in the region if it is to maintain investment in a strong United States. China as a matter of investment policy is often not competing in places where the US have established strong investment ties, but in those areas where the US have been absent. The next decade of American policy towards the Americas will likely been discovered in the Summit of the Americas this weekend, determining the viability of a Fortress Americas in future US investment policy.

Latin America, while feeling ignored for the better part of eight years was one of President Obama's first international meetings that held the weight of his future power in his discussion with Mexican President Felipe Calderon last week. Mexico has spent the better part of 2008 fighting an intense conflict against internal drug cartels and towards the end of the year Bush and Obama have set to dedicate $400 million to help counter the violence taking hold in Mexico. Called the Merida Initiative, it mirrors aid sent to Colombia that started nearly eight years ago to help quell drug cartels in that country. Success of these initiatives has brought on a great deal of criticism, but the attention from the US is often due in these circumstances. With over 4000 deaths due to Mexico's drug war in the last 12 months, Mexico may become closer to the US as violence spins out of control.

Threats to the US since 9/11 have come mostly from non-state actors. From Al Qaeda to drug cartels, the method to fight them often is unknown as popular movements motivates unknown people to seek fortune, political change, extreme ideals and in almost all cases are fuelled by poverty. With the exception of agreements made with North Korea, George Bush was seen by many as a reflection of overbearing power that the hegemony of the United States used to enter nations despite local and international protests, in order to serve its own interest and punish others indefinitely. This debate rages on, but in those countries that were not directly in conflict with the US, their leaders often invoked Bush as a scapegoat for problems in their own countries, whether it was America's fault or a way to adjust public perception away from local government errors and policies.

President Barak Obama may change the dynamic of the situation by simply presenting the optics that would reduce the ability of leaders in populist states to place blame on the US for local troubles and push for more populist support among their population. Mexico traditionally has felt strongly influenced by the US, whether the US had great influence or not. Recent cooperation on Mexican security and a reopening of trade ties had brought Obama closer to Mexico, pulling anti-American feelings away from those of Cardenas' nationalisations of the 1930s and enabling a new relationship between the US and Mexico to flourish in troubled times. While this may be temporary, Mexico and the US have learned that they gain nothing from being divisive, and Calderon and Obama will likely not change this in the next four years.

Populism of the past has not been better represented in recent years than with Hugo Chavez in Venezuela, Morales in Bolivia and Castro in Cuba. While Morales exists through popular support internally and from Venezuela, and Castro is coming to the end of his days, Chavez has been able to take popular support and high oil prices in the last few years and apply it to not only anti-poverty measures, but pushing his support beyond Venezuela's Constitution to push for indefinite power. Chavez has been known to quell journalistic opposition by increasingly extreme measures and by placing blame for his country's ills on Bush and Uribe. In very recent history however, three factors have cut Chavez down to the role of elected official where he will have to leave office at term due to lack of popular support. Initially the referendum to increase his term of office indefinitely was rejected by Venezuelans, albeit by a slight margin, and a second try at a referendum drags with it accusations that media and opposition has been attacked or shut down. Nothing makes this clearer as when representatives of Human Rights Watch were assaulted and ejected from Venezuela for their analysis of Chavez during his term of office. The second grand effect was the cutting of oil prices by half, in a country where all other industries have been culled for the sake of oil, which is controlled by the government and is used for political reasons. Talk is never cheap when is it bathed in oil revenues, but Chavez will likely lose a lot of support when he realizes that he lost 40% of his savings, like everyone else has in the last two months. The third possible strike against Chavez is the loss of Bush and America as scapegoats for problems faced by Venezuela's people. Obama, which not yet addressing Latin America beyond the meeting with Calderon is not seen as a divisive figure in Latin America, and comes off more as someone who could have easily grew up in the streets of Havana or Caracas as opposed to growing up through the military like Chavez or as inheriting his position as President through channels in the upper class in a region where wealth and poverty is the determining factor of power in society. While this might not eliminate the US or even Obama as being seen as abusing the power of a hegemony, it will simply show the US as a country where any citizen can come to power through their own efforts, a reality that does not exist in Venezuela or few other states.

The greatest challenge to Obama might be that of the Middle East, and he is very aware of this fact. With conflict in Gaza, the government of Lebanon being challenged daily by Hezbollah, Iraq and Afghanistan and Pakistan to boot, Obama will have to challenge issues and popular support in many of these regions, and as a result have to solve issues by coming to terms with populism and policy in Iran which could easily tilt the region to peace or chaos if support in Iran allows for it. While many Middle Eastern experts see anti-American sentiment as justified or simply as political posturing, the reflection of support and opposition in political movements in a country like Iran has never been simple rhetoric. Opposition in Iran goes well beyond simple human rights abuses and has gone to the point of the murder of local and foreign journalists and politicians, the legislation of laws allowing the execution of coverts and the arrest of Baha'I leaders for the second time in a generation, the first being murdered in prison and the most recent being taken without charge in a continual attack on minorities and political opposition in Iran. These incidents are few examples of a long list of abuses ignored by the international community. Populism in Iran could go in either direction, as the country has one of the highest number of people under 35 and also has been greatly affected by the change in oil prices, which could lead to a situation of grave unemployment and populist leaders to gain a great deal of power if a tone of anti-Obama or conflict through Hamas or Hezbollah can place Obama in the same light as Bush when attacks or retaliations are claimed by allies of populists in Iran or nations allied with the US in the region. While poverty, oil and political repression abounds in many countries in the region, Obama will likely lose any support in the region, and has already been attacked by regional media on his first day in office. The strength Obama has in this case is that the silent opposition and those who are at the receiving end of threats by Iran's populists could change their tone when oppression and Barak Hussein Obama challenges, builds and offers and alternative to threats by someone who is a non-traditional leader of the free world. This however will never succeed if an America based on a just tradition will not push for justice of those in the region who are sitting in prison waiting for the day of their possible execution. While Chavez will likely lose his seat in power, Iran's populists sit at the centre of a peace process in the region. Compromise and posturing is common in populists movements, but human rights should be at the forefront of any actions taken in the region for President Obama.

With the victory of Mr. Obama in the US Presidential elections a wave of celebration washed over the world media as praise for Obama took place, and in many cases rightly so. He is not only the first African-American President elect in US history, but more so a change from eight years of the Bush administration that can be argued was the worst eight years in Presidential history. While historians quibble over whether Bush was in fact the worst President, or a close 2nd or 3rd, challenges to the abilities of Mr. Obama have already taken place. The Economist Magazine made headlines in the election as the premiere economically conservative publication endorsing Mr. Obama, which is often on the left in his policies and by no means a conservative. Letters to the Editor were by no means gentle, and a number of them critical of The Economist's endorsement, and a few supporting it but criticizing it for support for the wrong reasons.

In reality, both Mr. Obama and Mr. McCain are fine individuals that are forgotten for their real talents, in being able to reach out to the other side for support. With Bush paralysing any support by the Democrats for his policies due to a laundry list of often anti-constitutional problems and controversies, McCain had been the only Republican that represented the majority of Americans and also many people who voted for Democrats in the last election. If Obama is to win the next election, he must focus his attention on the middle, and might even do well to cooperate and appoint some of the moderate Republicans in order to bring America together after eight years of being pulled apart. With nearly 47% supporting McCain in the election to Obama's 51%, and economic collapse and eight years of Bush and a War in Iraq, Obama can only survive with support from people like McCain, or perhaps hire McCain himself to work in his administration. To take a line from many action hero movies, "It is crazy, but it just might work," as in America, if Arnold can be the Last Action Hero and be elected to lead California, the 4th largest economy in the world, anything can happen.

Critical support for The Economist's endorsement often came from non-American readers, who see Obama reasserting himself as the leader of the free world and placing multilateralism as the core of his foreign policy. What seems to be lacking is support for America's closest and most effective allies, those within the Americas. With NAFTA becoming a heated debate between Obama and Hillary, even producing one of the elections first scandals, Canada and Mexico have been perplexed at how Obama might issue policies that could strangle the Canadian and Mexican economies due to a US economic collapse, a high degree of fear about debt with China and trade with China, that for some reason Hillary Clinton blamed on NAFTA, and the focus on Castro and Chavez, who oppose most activities coming from the US. All this has come with the virtual ignoring of America's allies in South America that have won many battles against terrorism, poverty, economic collapse and improving democratic institutions. Another major issue, which has brought more death to Mexico than Afghanistan and Iraq combined, is the nearly 4000 deaths that have come about since early 2008 in Mexico's drug war. With the rescue of Ingrid Betancourt and the pulverization of much of the FARC's command and control, the drug war has moved well into Mexico where the country has little luck keeping even its most senior officials safe and deaths from the conflict have reached as far north as Canada to as far south as Argentina. With illegal immigration not having a solution since last year's debate on the new Immigration Bill, and whole new issue has already arisen inside all of America's allies, on the border and inside the US itself that has been ignored completely by the candidates. With the next major issue in US policy not being seen on the radar of either candidate, it is questionable how the US will treat its closest and most important allies in the next four years.

There are a few realities that have hit the world this past year and this past month, to which most of the world has been affected by to some degree. Luckily enough, the issues which affect most Americans have made the greatest impact in the last few weeks of the election campaign, and the decisions people will make when casting their vote will be based on how they wish to change the past, and how they wish to see themselves in the future. Both candidates have accomplished something remarkable. The last two election campaigns offered many a lack of choice in a candidate who they felt would really push the country in a proper direction. Eight years of George Bush, Iraq and Afghanistan, the Economic Meltdown, 9/11 and Hurricane Katrina, have left only candidates who can do the job available to be elected. Both Obama and McCain are good people, and either one is capable of placing their efforts into repairing a slightly damaged, well used and still well running America with a lot of work. Americans can do little wrong in choosing either candidate, but with the election close by and Obama likely to win, the following is a letter to Mr. Obama, and with some luck, Mr. McCain from the rest of the world who does not have a vote, but will be affected by their decisions as much as any American.

To start, the neighbours of the United States should be acknowledged for their constant support and connection to the United States. Canada and Mexico, despite issues of trade and immigration have done much in the last few years to accommodate not just Mr. Bush, but Americans as a whole. Currently Canada is one of the only developed nations who did not face complete economic collapse and places over 90% of their trade with the US. It should be acknowledged that trade and manufacturing in Canada has been hit as hard as in the US, and while NAFTA is blamed on Canada and Mexico, Canada is losing the same jobs, the same companies and the same households to tough foreign competition as much as the US. Canada is one of the world's largest oil producers and has always worked to move US energy out of the Middle East and grow stronger ties with Canada's energy and Canada's economy. Jobs being lost in the US, means jobs are lost in Canada as well. When the loss of jobs is blamed on NAFTA, it focuses energy and time on those who were never to blame for the economic problems in the US. To fight Canada and Mexico is to create scapegoats and lose four more years in improving the economy for all of North America.

With soldiers dying in Iraq, and allied soldiers giving their lives in support of freedom and lives in their own countries as well as the US, Afghanistan and Iraq need to be taken as a whole and the support should be given by the US to help fix problems abroad. According to Southern Pulse in their Oct 28th newsletter, over 4,000 people have died in Mexico's drug war, with 1,000 being killed in the last 50 days. Canadian, French, British and other allied troops have been taking heavy casualties in Afghanistan, making the region into a stalemate over the last 6 years. The worst problems have yet to be approached, with Darfur and Africa having yet to receive tangible attention towards genocides in the region which mirrors Rwanda in magnitude and action from the international community. Security in the United States cannot be achieved when those who support the US are under constant pressure and attack. Mexico has had as many deaths in the last year in battling the drug lords as soldiers have died in Iraq since 2003. A serious attempt in Afghanistan and a creative approach to Iraq must be achieved soon so other regions do not fall into chaos.

Immigration, while being solidified as a failed policy must start to acknowledge the existence of many from Latin America and Asia as players in the social framework, even if the legality of many residents are non-existent, they still are a part of every community in the United States. While illegal immigration needs a cathartic debate in America, those who have suffered from action, namely 2 million Iraqi refugees need to be addressed as well and accepted as people who are running from an Iraq which the US has not been able to claim victory and peace over. No greater respect to US soldiers and Iraqi citizens would come from a realistic approach that helps Americans, soldiers and their families, but also those so many fought hard to save; the Iraqis themselves. The use of the word "Change" and "Pull Out" will not stop violence and death in Iraq, only proper leadership will help end the conflict.

With a world depending on the US economy to operate, those nations in Latin America and Europe need a strong United States that will work and support their nations as those nations wish to work and support the US itself. While there is much criticism coming out of socialist governments in Latin America, the majority of nations who have spent the last few years in cooperation with the US and achieving great stability and peace within their own borders should be supported by the US and credit given to their development. Bad policy has created a situation where Chavez can attack Bush, as failure in leadership creates a large scapegoat, but good leadership with focus the attention on those local leaders like Chavez and allow for those democracies to eject problems in their societies. While not to the same degree, America's European partners have actually moved to re-engage with the US in a discussion to not only repair the current economic troubles, but also to re-invigorate the relationship of values and equality that should have always existed between Europe and the US. Elected leaders in the EU, Canada and Mexico have moved towards policies which have been considered traditionally American, and America will move towards a position where it adopts some trends from its partners, as well as hopefully cultivating respect with Europe and Latin America in the process. The future of the US will come with the future of Europe and the Americas. Leadership will only allow for a successful relationship in the future.

Emerging economies must be addressed to end this letter. China, India and Russia, as well as other nations have achieved a great deal of development, and with recent funds have been able to address national problems of poverty and development, many thought were impossible to tackle only 5 years ago. These countries have a right to compete and gain wealth, but if companies from the US and EU seek to find fortune in those countries and work with local companies which may produce harmful products or take away American jobs, than those American and European companies should be challenged and blame should not be placed on Canada or Mexico, who have lost much as well, and irrational barriers should not be placed on developing economies because companies from the US and EU take advantage of their consumers. To create scapegoats in this debate, is to create a situation where no one can foresee economic troubles, and regulation is left to create blameless policymakers in its wake. The crisis of the last 20 years was always not one of tangible losses, but in confidence, that companies and the government might and have lied to you, and that anarchy is unavoidable when problems ignite. Trade, finance and economics needs to work in society, as a parallel to democracy, in order to allow a leader to create any "Change" that is needed. The world needs a US presence, one with clear foresight and the ability to stop alienating its friends and address real threats to everyone's security. Only an understanding of the world who cannot vote will allow for any positive change to take place. A failure is no longer an option for America and their friends.

CNN made a great acquisition taking on policy expert Fareed Zakaria and giving him his own show, Fareed Zakaria GPS which allows for a diverse perspective and a balanced international approach to a network which is often known for its Washington point of view as opposed to the perspective of global politics and policy.  The international perspective needs to be understood from the point of view of Paris, Singapore, Beijing and others. Originally the host of a PBS show and author of the book The Post-American World, Zakaria will likely become one of the most important authors on foreign policy in the next few years.

In a week of economic turmoil, Zakaria in his show F.Z. GPS decided to interview political experts from Singapore, India and China in order to get their point of view on current economic and political activities involving the US and other countries. While many perspectives were discussed, it was diverse in that countries like Singapore, India and China did not fare poorly during the last eight years of the Bush administration. While criticism did come about regarding Afghanistan and Iraq and perspectives regarding Russia's current move into Georgia, Bush's reputation is not wholly being shared by many in the Asia-Pacific, standing out in contrast to the distain for Bush in Europe, the US and even in Canada. The Canadian example is an interesting one. Currently there is a national election underway where in a recent election debate, issues concerning the country came down to 3 of 4 opposition leaders bringing the debate down to its lowest level and simply accusing the current Prime Minister, Steven Harper of being another George Bush. While Bush is not a Canadian leader and is extremely different to any existing Canadian politician, the real policy debate was wasted and the electorate was treated as people who only decide how their communities are formed based on whether George Bush's name is shouted out enough times on television. While Bush may not be popular in the Western world, the effect of using him for political gains outside the US can be just as harmful in forming illogical policy decisions based on someone who has no real effect or relation to a government outside the US at all. While the responses from many Asia-Pacific experts was logical and measured, often similar debates about the last 8 years in the Western world are foggy at best.

While new economic giants such as China and India had their perspectives shown on F.Z. GPS, it is curious to see what the last eight years have brought to countries in the Americas, and why certain policies such as immigration has been largely ignored in the recent election campaign. The focus of the Bush administration in early 2001 was immigration and the relationship between the US and the rest of the Americas regarding free trade and the FTAA. Mostly in 2008, the issue of immigration has remained a regional one in the US, concentrating around states on the US-Mexico border which take immigration to heart, but has not become a major election issue. Trade, mostly an issue with China for the US has been brought up in many border states along the US-Canada border. Talks of renegotiating NAFTA to bring jobs back to Americans was rampant, despite the issue having a lot to do with the US relationship north and south as opposed to its ties eastwards. While Mexico has ever increasing numbers going to the US illegally and a severe drug war which has taken more lives in 2008 than US lives in Iraq and Afghanistan combined, the debate on immigration was mostly nullified last year when Bush tried to pass one of his final bills opening up an immigration policy that might rationalize the current status quo on the border. After 7 years of the War on Terror, the original policy issues from 2001 were addressed, but with such complex problems and the lack of support for anything Bush ties his name to, the issue of immigration in the US will not change at all for years to come. In reality, as pointed out in the FPA Immigration Blog, some illegal immigrants are even leaving the US due to the current economic crisis and many in the US are starting to see the effect of Bush policies as changing the perception of America into a country which as one CNN reporter said, is no longer a "beacon of freedom and hope".

The rest of the Americas in the last eight years have done better than many would expect in the Western world despite many issues impacting the US itself. Canada currently stands out as one of the only countries in the G8 that is not suffering economic collapse, due to very prudent financial policies, good leadership by many governments over the last 5 years and a long term economic boom and national surplus. While being attacked in the Clinton campaign over NAFTA, Canada has been able to not be seen as another China to the US on trade and was able through a great deal of legal debates to come up with a deal on softwood lumber and push Chapter 11 decisions on NAFTA towards a more equitable framework where states have regained much of their power over companies in the NAFTA rulings. Canada has separated its support from the US, ie. regarding not supporting with troops in Iraq, but many citizens support Canadians in Afghanistan and trade with the US. Canada has not fared poorly at all, even weathering the current global crisis with merely slow growth, and keeping a lot of funds in the country and allowing cash rich Canadian companies to buy out many American and European assets if they wish. Canada's oil industry had a lot to do with this, but in the long run 8 years in Canada has not had many ill economic effects.

Brazil is currently lead by prudent left wing leader Lula and has become a beacon for reform and investment in South America. Since financial collapses that characterized the country in the 1990s, Brazil has been able to maintain a balanced level of growth and social reforms that has brought confidence into Brazil and has made it the next likely emerging economy to become another China or India. While political issues still exist to a great degree, oil and slow progress seems to be paying off and Brazil will likely weather this economic storm with a few scratches and bruises, but keep afloat. Chile is in a similar situation. With left leaning leaders and prudent economic policies and progressive social policies, stability may become a mainstay of many countries in the Americas in the future.

Venezuela also has stood out from many of its neighbours. While Brazil has benefited a lot from its oil reserves, Venezuela has had its oil reserves propel it into a forum for Chavez's influence in the Americas and remains Venezuela's only notable source of revenue. Venezuela often uses actions by Bush as the motivator of policy decisions, mostly in cases where the US has ignored Venezuela and Latin America in the last 8 years. In reality, the involvement the US has had beyond some trade policy in the last 8 years has been very minimal, only opening up further ties with economically stable countries who stabilized themselves, and not having any heavy response to populist claims by Chavez and others who often use Bush and supposed actions by the US to justify all types of local policy decisions by populist leaders. While the degree of US involvement in Venezuela is not known but likely is minimal, countries like Colombia have been able to use local and US assistance to independently address local issues. The Colombian Army's rescue of Ingrid Betancourt and American hostages from the FARC was seen as a Colombian initiative and praised by the US as solely Colombian. Ironically the FARC later was accused of having been supported by Chavez himself, mimicking accusations he had against Bush in interfering in local politics. Increasingly criticisms of Chavez come with the diminishing influence of Bush. Without Bush as a scapegoat, it will be hard to place Obama in a negative light and accuse the causation of problems in Venezuela on the President of the US. Recently a critical report on Venezuela lead to the coercive expulsion of human rights leaders from Venezuelaactions which will reflect poorly in Chavez in the future with no Bush to blame for the future.

Many other countries in the Americas have been set with their own local issues and have had some support and acknowledgement from the US in positive and negative manners. Mainly the US in the last 8 years have ignored Latin America due to The War on Terror, and minimal support and ties with the US has not had a negative effect for many in the region and their development. Ignoring the Americas, the backyard of the US and important future allies is not an option, as pointed out by Zakaria in his statements and book. A strong America's’ will do nothing but help the US reintegrate into the international community if respect and independent policies are supported by the next President of the US and progress of the Americas is valued and not hindered. Reactionist trade policy and calling the opposition George Bush when no coherent discussion is available to win votes in an election is not acceptable on any level. Policy cannot be formed by name calling, and any politician who uses this tactic does nothing but to embarrass themselves and their supporters in a democracy. The Bush era is over, and only working for new opportunities is an acceptable conclusion.

The last few weeks have shown some interesting stories coming from Mike Coe and Alejandro Quiroz Flores of FPA's Mexico Blog. I encourage those interested in not only South America, but Mexico as well to read of few of their posts regarding Mexico in the last few weeks.

Alejandro took to task the events unfolding in the Mexican Senate and Congress. In an earlier posting in the Latin America blog we focused on the activities of the government in hiring private investigators to watch senate members, and the response in the Senate when the story became public. For the actions of the government in quelling internal political pressures, please read Alejandro's posting here. Alejandro in his most recent post focuses on how kidnapping, one of the most active criminal movements in Mexico, is now being considered to carry a penalty of life imprisonment for anyone participating in the activity. The consideration of such a tough penalty came from the kidnapping and death of the son of one of Mexico's most important business leaders. Mexico was traditionally known for smaller kidnappings, often having the victim beaten and taken to various bank machines to withdraw cash. On occasion, larger cases that often characterized kidnappings in Colombia and Brazil and involved wealthier people and millions of dollars also became more common in Mexican society. With the recent drug war taking hold and more and more kidnappings against Mexico's elite with tragic outcomes, an official response may be too late to affect and real change in Mexico's kidnapping industry. Please read Alejandro's posting here.

Mike Coe of the Mexico blog also has taken to addressing some interesting topics. In a few postings, Mike set to address the international AIDS Conference which took place in Mexico City last week. To highlight the conference, which focuses on the HIV epidemic in the developing world, Mike set two posts on HIV in Tijuana Mexico which is an often unspoken about issue in many communities in Mexico. Posts can be read here and here.

Mike Coe also addressed some economic issues in the last few weeks. In one posting, Mike discusses the desire for oil reform/privatisation in Mexico City, which overwhelmingly rejects any proposals to nationalise Mexico's oil industry and principal source of national income. In another posting, Mike discusses the effect on Mexico after the failure of the Doha Round on WTO talks. With countries like India rejecting the agreement due to fears of local agricultural and local industries in the developing world being dominated by those in the developed world via the agreement, countries like Mexico who are considered semi-developed must now rest on the merits of their trade agreements to fulfill their goals of open trade with other nations. With Mexico signing the most trade agreements worldwide, eventually a continuation of the policy might allow Mexico to benefit from free trade, albeit with many more treaties and a lot more paperwork. While Doha was a far reaching goal for the neo-liberal economic model, the success of India and China from such policies might be a role model for Mexican economists, but with their new power it also ironically has capped the progression of an international agreement on trade for Mexico and everyone else. In any case, it is a good time to be a Mexican trade lawyer!

Thanks again to the Mexico Blog. Hasta Luego Amigos..

The US War on Terror has left many great negative legacies in its wake. With troops mired in Iraq and Afghanistan and no clear idea of what constitutes victory in those conflicts, the results of the War on Terror has places US troops in constant danger, has alienated its once friendly supporting nations, and has taken time and energy away from the War on Drugs and Latin American as a whole.

Success has come in one form, but due to the skill of Colombia's leadership as opposed to that of Bush I's War on Drugs or Bush II's War on Terror. During the last 8 years of the War on Terror, Uribe's Colombia has had a great deal of progress. In contrast to the US in Iraq and in Afghanistan, accusations against Venezuela of drug running, and Mexican drug wars slowing killing off anyone who opposes it at will, Colombia has captured many FARC leaders including the infamous "Karina" this past week, one of FARC's top leaders and most violent assassins.

As a follow up to the capture of “Karina”,  the top leader of the FARC, Manuel Marulanda was confirmed as dead this past week. While Uribe claims his death as a result of an air strike, and the FARC as due to a heat condition, the timing of the FARC leader's death in conjunction with so many of its top leaders deserting, dying or simply losing the support of many FARC rebel soldiers has done nothing more but to push the FARC closer to becoming the final historic note in the longest rebel insurgency in Latin America's history. The death of so many FARC leader in 2008 could do nothing more but to push Uribe into becoming Colombia's Winston Churchill in the fight against internal terror in the jungles of the Andean nation.

Despite Uribe's success and over 70% support in Colombia, since 9/11 the US has alienated alot of the countries that traditionally supported it on the world stage. When a country like Colombia that has had more terrorism and economic hardships than any other US ally succeeds in the War on Terror and is rewarded with criticism when forming a trade agreement, it further moves the US away from a region that requires substantial and equitable support. It could be based on the lack of understanding in the US on Colombia, or perhaps a separation between trade, anti-drug enforcement and security policy, but it poorly reflects on the US with many of their neighbours worldwide. Trade is usually the issue where this takes place as seen with Clinton's attacks on NAFTA and its North American neighbours, but in this case the prime achievement of the War on Terror or whatever people wish to call it is Colombia's success against the FARC. With some of the highest rates of drug trafficking, internal refugees and poverty in the world, any progress by Uribe or leaders of Colombia must be included when creating a foreign policy towards Latin America.