Economists have expressed concern over the devaluation of currencies in Latin America during a year where global commodity prices have increased, which could be evidence of deep-seated problems in these countries.
“It’s very bad news,” Ernesto Revilla, chief Latin America economist at Citi, told the Financial Times. “This shows the region is coming out of the pandemic with deeper structural damage than we thought.”
(See “LATIN AMERICA FACES SLOW, PAINFUL ECONOMIC RECOVERY,” and “U.N. WARNS LATIN AMERICAN ECONOMIC DISASTER LOOMING.”)
The FT’s report used the Chilean peso as one of the causes for concerns. Copper prices around the world jumped 25 percent in 2021 while the peso fell nearly 17 percent against the U.S. dollar. The report said the imbalance was not isolated to Santiago. The Colombian peso also dropped 16 percent against the dollar. Many of these countries took on extra debt during the pandemic and their citizens are facing rising inflation and job uncertainty.
Marcos Casarin, the chief Latin America economist at Oxford Economics, told the paper that the currency prices in these countries already have “a lot of bad news” priced into them.
“You only get rewarded with a stronger currency in a commodities boom if the boom serves to make you richer as a nation. The markets are foreseeing that these commodities didn’t bring prosperity, so the currencies didn’t deserve to go up,” he said.
The Miami Herald, citing forecasts, pointed out that economies in sub-Saharan Africa—where there are several armed conflicts—will grow more than Latin America this year. The GDP in Latin America will have to grow by at least 4 percent to provide enough jobs for the youth entering the workforce. The International Monetary Fund expects a 3 percent growth this year.
“It’s going to be a bad year for the region,” Alicia Bárcena, ECLAC’s executive director, told The Herald in an interview. “There will be a significant decrease in economic growth.”
Marisol Argueta de Barillas, the head of the Regional Agenda, Latin America, wrote on the World Economic Forum’s website that COVID-19 outbreak hit these countries at a time when many were undergoing structural, social, and economic differences that were not resolved.
“With regard to Latin America, according to the executive opinion survey carried out in 18 countries of the region, the greatest effects of COVID-19 on social matters are seen as unemployment, livelihood crises and an evident erosion of social cohesion,” she wrote.
These dire conditions in Latin America will continue to put a strain on the U.S.’s southern border.
U.S. authorities announced this week that the Trump-era “Stay in Mexico” policy will be expanded, which requires migrants to await their asylum hearings in Mexico, the Department of Homeland Security said Friday.
Over 60 percent of the asylum-seekers enrolled in the program in December were from Nicaragua, 22 percent were from Venezuela and 12 percent were from Cuba, CBS News reported, citing a recent DHS report. The rest were from Colombia and Ecuador.
TREND FORECAST: As we have long forecast, as a result of the COVID War that has destroyed nations’ economies and ruined the lives and livelihoods of hundreds of millions, if not billions, the refugee crisis will continue to escalate across the globe.
And now, with the poorer nations hit the hardest and our forecasts for worsening economic conditions, the refugee crisis will accelerate across much of the globe. In turn, as we have long forecast, there will be new anti-immigration, anti-vax, anti-tax populist movements that will challenge established political parties.
TRENDPOST: The Biden administration was slow to act on the border and allowed the situation to worsen to a point that it is not sustainable.
Immigration has always been the political third rail. If President Biden came out too forcefully and told migrants not to come, progressives from his party would criticize him as being a slightly more tolerable Donald Trump. If he opened the border, moderates would abandon him.
So he did what any veteran politician would do: put someone else in charge.
He tapped Vice President Kamala Harris to lead the administration’s effort to regain control of the border. She took part in a few photo-op video conferences with leaders from the Northern Triangle, visited Mexico, and even the border. Nothing was solved. She’s running for her own political life and does not want to be tied to its failure.
The situation has gotten so untenable that secret flights are entering the U.S. in the dead of night carrying unaccompanied children because there is simply nowhere else to stick them. Jen Psaki, the White House press secretary, downplayed the flights seen landing in the wee small hours of the morning as merely flights “earlier than you might like.”
The border issue is a serious crisis and must be met with a serious response. There is little the U.S. can do to stop corruption in Honduras and Haiti. You can’t blame these migrants for fleeing. But the U.S. needs political courage to tackle the problem, which Washington is lacking.
A key element in Gerald Celente’s Occupy Peace movement is to close America’s 800 plus military bases in foreign nations and bring home the troops to secure the homeland borders. This is both more effective and less costly than to build a wall.