Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: Jamaica’s finance minister lands a top IMF job, Panama carries out its first U.S.-funded deportation flight, and Venezuela’s repression campaign continues.
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On Monday, International Monetary Fund (IMF) Managing Director Kristalina Georgieva tapped Jamaican Finance Minister Nigel Clarke as one of the fund’s three deputy managing directors. The nomination was historic: Clarke is the first Caribbean or Central American citizen to be named to such a high post at the fund, Jamaican Prime Minister Andrew Holness said.
The appointment can be seen in part as a recognition of Jamaica’s dramatic economic overhaul over the past decade. With IMF support, the country pulled itself out of a debt crisis and met various performance targets it had set with the fund, earning positive appraisals from international ratings agencies such as Fitch and Moody’s. Poverty and unemployment rates both fell.
For the IMF, Jamaica is a success story—a country that carried out strict pro-market reforms and saw key social indicators improve along the way.
The IMF programs that led to Jamaica’s turnaround date back to 2013; continued buy-in from successive governments helped make them effective. Clarke has been the IMF’s main counterpart in Jamaica since 2016. He “stewarded his country’s economy to a stronger and more sustainable position,” Georgieva said on Monday.
Jamaica’s openness to reform came after a moment that Clarke has described as “rock bottom.” In 2012, the country’s national debt was ballooning as the government struggled to get a bailout. Jamaican economists and officials wracked their brains for possible ways to turn the country around.
They even called in Donald Harris, U.S. Vice President Kamala Harris’s Jamaican father, an economics professor emeritus of Stanford University, for policy planning help. He recommended steps that included instituting a corporate land registry and reducing taxes on certain businesses, according to the Washington Post.
Eventually, outreach to Washington and pledges of better behavior helped secure a new IMF loan in 2013. (The crisis stemmed in part from a 2010 IMF loan that had collapsed.) The diplomatic push leaned on U.S. Rep. Maxine Waters, who is of Jamaican descent and a longtime member of the House Financial Services Committee.
“The optics of letting a poor, predominantly black country collapse at the time when the IMF was bailing out wealthier, European countries—on more generous terms than they had usually imposed on developing economies—were toxic,” the Financial Times reported.
Jamaica agreed to strict targets to reduce its deficit—and it stuck with them. In an unusual step, the country established a committee to monitor and report regularly on its economic performance that included representatives from private businesses and civil society.
That committee “reports publicly to the people, literally on the street corner, [at] the rum shop, on a quarterly basis; also on social media,” economist Marla Dukharan told The LatinNews Podcast. “Nobody else in the Caribbean holds itself to account publicly for what it says it’s going to do.”
In addition to reducing its national debt, Jamaica also gave its central bank more independence, overhauled its pension system, and privatized several government agencies, among other changes.
But not all of Jamaica’s major economic indicators today are rosy. The country has experienced relatively low growth rates over the past decade, growing an average of under 1 percent per year.
Although a team of economists writing for the Brookings Institution praised Jamaica’s progress in March, one of the paper’s authors, Barry Eichengreen, told the Times that “we don’t have a clear sense of whether a little less fiscal consolidation—if the additional funds had gone into things like education spending or health spending—might have been equally good or better.”
Many Jamaicans have expressed their views on the country’s economic prospects by voting with their feet. The country ranks second in the world on the human flight and brain drain index compiled by the Fund for Peace, after Samoa.
“If your economy is doing well, people don’t leave,” said Rasheed Griffith of the Caribbean Progress Studies Institute. Even so, Griffith told Foreign Policy that Clarke had made important progress reestablishing economic governance in the country, calling him “perhaps the most qualified [finance minister] Jamaica has ever had.”
Jamaica’s relationship with the IMF in recent years stands in contrast to that of fellow Caribbean nation Barbados. While Jamaica has played the role of dutiful pupil, Barbadian Prime Minister Mia Mottley has invested significant diplomatic energy in publicly calling for the fund’s treatment of poor and climate-vulnerable countries to change.
Barbados often argues that “we’re not wrong—the system is wrong,” Griffith said. In Jamaica, “they view the problem as one at home.”
Sunday, Sept. 1: Mexico’s new Congress takes office. For one month, President Andrés Manuel López Obrador will preside over a legislature where his Morena party holds an enlarged majority. President-elect Claudia Sheinbaum is set to take office on Oct. 1.
Sunday, Sept. 8: The deadline for Mexico’s government to present its 2025 budget proposal to Congress.
Thursday, Sept. 12, to Friday, Sept. 13: G-20 agriculture ministers meet in Brazil.
Colombian migrants line up to board a deportation flight at Albrook Airport in Panama City on Aug. 20.
Colombian migrants line up to board a deportation flight at Albrook Airport in Panama City on Aug. 20.Arnulfo Franco/AFP via Getty Images
Deportation flights. Last week, Panama carried out its first U.S.-funded deportation flight for northbound migrants who had entered Panama through its jungle border with Colombia, the Darién Gap. Many of those deported had criminal records in their home country of Colombia, a Panamanian security official told reporters. Panamanian President José Raúl Mulino said more flights in the coming days will deport people from China, Colombia, Ecuador, and India.
Migrants traveling northward through the region often start as far south as Brazil. Brazilian authorities have detected a flow of migrants who lack visas to visit Brazil entering São Paulo’s main international airport on stopover flights and then seeking refuge before beginning a northward journey on foot, according to an official investigation obtained by The Associated Press. Many of those people are from India, Nepal, or Vietnam, The AP reported.
Last week, Brazil’s justice ministry said it would restrict entry to some migrants who lack visas to Brazil, requiring them to continue with their layovers or fly home.
El Salvador-China relations. El Salvador’s legislature this month approved the country’s accession to the China-backed Asian Infrastructure Investment Bank (AIIB). Several other countries in the region—such as Brazil, Chile, and Peru—have also taken the step over the past half-decade. The move comes as El Salvador continues to deepen ties with Beijing. In 2018, the country switched its diplomatic relations from Taiwan to China.
While U.S.-China competition has created diplomatic tensions in Latin America, development banks remain an area where countries can often put geopolitics on the back burner and focus on business. The AIIB, for example, has had a green finance partnership with the Development Bank of Latin America and the Caribbean since 2022.
Mujica’s musings. Former Uruguayan President José Mujica, 89, has begun radiation treatment for a tumor in his esophagus. Since he announced his diagnosis in April, many journalists have traipsed to visit him in his three-room home on the outskirts of Uruguay’s capital, Montevideo.
Mujica is a beloved elder statesman known for his philosophical musings on life, and when the New York Times spoke to him this month, it was no different. Mujica’s doctor said the initial treatment went well. But the former Uruguayan president had a different take. “I’m broken,” he said. “There is only one life and it ends. You have to give meaning to it.”
Mujica has long espoused the importance of building personal relationships in today’s distracted world, saying that he threw his cell phone away four years ago. Direct communication is “nontransferable,” he said.
Before they became politicians, Mujica and his wife met fighting in a guerrilla group. What was it called?
Tupamaros
Sendero
M-19
National Liberation Action
Mujica has said his wife was part of a team that helped him and other Tupamaros escape from prison during Uruguay’s 1973-85dictatorship.
Venezuelan President Nicolás Maduro delivers a speech next to Defense Minister Vladimir Padrino López and Vice President Delcy Rodríguez during a rally in Caracas on Aug. 28.
Venezuelan President Nicolás Maduro delivers a speech next to Defense Minister Vladimir Padrino López and Vice President Delcy Rodríguez during a rally in Caracas on Aug. 28.Pedro Rances Mattey/AFP via Getty Images
One month after Venezuela’s July 28 presidential election, President Nicolás Maduro has shaken up his cabinet as he continues a crackdown on dissent.
Vice President Delcy Rodríguez will swap her additional post as finance minister for that of oil minister. Hard-line army Capt. Diosdado Cabello, who has held a range of public offices in the past, returned to the government as interior minister.
Rodríguez’s move demonstrates that Maduro is trying to preserve relationships with the country’s business sector, Venezuelan journalist Eugenio G. Martínez posted on X; Cabello’s post signals a “radicalization of repression against dissidents” and an effort to shore up military support for Maduro.
That repression campaign includes a new law allowing the government to ban nongovernmental organizations if they promote “hatred,” sporadic shutdowns of social media platforms such as X, and hundreds of arrests. Last week, rights group Foro Penal calculated that Venezuela had 1,674 political prisoners, the most in its 21st-century history and the highest count in all of Latin America.
Although Venezuela’s supreme court—stacked with Maduro appointees—ratified his evidence-free claim that he won the election, many governments within and beyond Latin America say they will not do so without seeing disaggregated polling data.
In the meantime, countries including the United States continue to probe a narrow possibility that Maduro could negotiate some kind of exit from power.
“Many [Venezuelan] elites are weary of the prospect of Maduro assuming another illegitimate term,” the Atlantic Council’s Geoff Ramsey and Jason Marczak wrote this week in Foreign Policy. “The White House has an opening to liaise with such figures, making sure that ruling party elites and the military understand the potential benefits of a democratic transition.”
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Publish date : 2024-08-29 21:00:00
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