Annual Report on Latin America and the Caribbean (2016-2017)Fecha：2018/02/01 Autor：
In 2016, economic activity in the world economy remained to be lackluster, with little prospect for a turnaround in 2017. There was a continued slowdown in economic and trade growth and a surge of volatility in the global financial market. Most countries witnessed rising unemployment rates. The income gap between the rich and the poor kept widening. Consequently, the anti-globalization movement was gaining momentum. In world politics, a number of Black Swan events continued to occur, including Donald Trump’s unexpected win of the U.S. presidential election, the withdraw of U.K. from the European Union as a result of the referendum in June 2016, and the rising tide of populism in Europe. The above-mentioned factors were causing massive uncertainties in the development of the world.
As a major part of the developing world, Latin America and the Caribbean enjoy a very unique development path and have made outstanding achievements. However, it is facing challenges from deeply rooted fragility and unbalanced economic structure, which has caused it to be exposed to external risks. In 2016, impacted by economic slowdown of the world economy and other external factors, the region fully exposed its economic and political fragilities. Prolonged economic recession was complicating the development environment and pressuring regional governments to restructure economy. At the same time, political and social situations were getting worse. Some regional countries launched a major adjustment of their domestic and foreign policies. Transformation, uncertainty and varied performance can be viewed as keywords to define the economic, political and social processes in the region in 2016.
The Annual Report on Latin America and the Caribbean (2016-2017) seeks to provide a detailed analysis of changes in the region in the area of politics, economics, social situation and international relations. It is principally focused on analyzing newly emerged challenges confronting regional countries, discussing their varied performance, exploring their role in global governance and evaluating opportunities and challenges for the Chinese-Latin American relations.
1. Rising anti-globalization movements brought Latin America and the Caribbean new challenges and uncertainties in participating global economic governance.
In the 21st century, emerging economies headed by BRICS countries gained an overall rise and grew to be the main engine of global economic growth. There was a remarkable expansion of their shares of the global economy, contributing to accelerate the transformation of the world political and economic pattern. Based on common international status and shared interests, emerging and developing economies enjoy common pursuits in the fields of international trade, financing and investment. They are expecting to have a deeper involvement into global economic governance and reform international institutions dominate by developed economies. However, confronting the current complicated international situation, they will face more hardship to achieve the goal. It is also noticeable that as a result of political uncertainties in global affairs and rise of trade protectionism, regional economies as well as other emerging and developing economies are facing challenges in sustaining economic growth and expanding international economic linkages.
The Annual Report on Latin America and the Caribbean (2016-2017) presents a special report entitled “Global Economic Governance and Latin America’s Economy”, seeking to construct a framework to show the evolution of global economic governance and then analyzing regional countries’ role as emerging economies. It is focused on major challenges confronting regional countries, their common aspirations and new opportunities for the Chinese-Latin American cooperation. According to the authors, Latin America is the most concentrated area of high-income emerging and developing economies in the world and rather active in international economic and trade activities. Thanks to unique natural endowments, it will play an important role in the future, contributing to economic growth and the development of the world. For a long time, the region remains to be an active participant in global economic governance, but enjoys a rather limited influence and is struggling for a bigger voice. At present, pressured by unfavorable external environment and necessity to gain momentum by economic reforms, regional countries are considering to adjust development strategies to achieve the transformation of economic growth pattern, meet the need to upgrade the industrial structure, advance regional integration and expanding the opening to the outside world. The authors argue that it is a pressing need for China and Latin America to upgrade their economic and trade linkages to create opportunities for future development.
2. Economic crisis produced political and social side effects, triggering a series of major changes in political and social situations in regional countries.
Due to the prolonged economic crisis, the social situation in the region continued to deteriorate in 2016. In terms of economic growth, the period of 2003-2013 is viewed as the “golden decade” for the region. Between 2003 and 2008, it enjoyed an average annual GDP growth rate at 4.8%. In the same period, its GDP per capita increased at annual rate of 3.4%. The world financial crisis of 2008 plunged the region into recession in 2009 in which its GDP contracted by 1.9%. Thanks to the commodity price boom, it regained economic growth in 2010 with an average GDP growth rate at 5.9%. However, the collapse of commodity price in 2014 inflicted a heavy blow to the region. Some regional countries fell into economic recession or even crisis. Following the weak growth in 2014 (1.1%) and the contraction in 2015 (-0.4%), the regional GDP contracted by 1.1% in 2016. Economic recession caused growing political and social intensions. Regional governments were forced to reduce public expenditure on social welfare programs. Unemployment continued to grow in 2016, impairing the quality of employment and resulting many people’s return to poverty. According to the CEPAL, the average poverty rate in the region was reduced to 27.9% in 2013, the lowest point in the history. However, due to economic recession, it rebounded to 28.2% in 2014 and then 29.2% in 2015, which represents a net increase of 7 million poor people and of 5 million extremely poor people individually. The region was expected to have a remarkable increase of poor population in 2016. In the next two years, there will be another 25 million to 30 million people in the region to fall into poverty. The worsening social situation impaired political stability and brought about new challenges to regional governments. The political balance of power was undergoing deep transformation due to the rise of new social groups. It is especially noteworthy that the emerging middle class in regional countries was increasingly involved into political affairs to protect their economic rights in the current economic context.
The Annual Report on Latin America and the Caribbean (2016-2017) presents special chapters analyzing economic, political and social situations in the region. According to the chapter “Economic Situation”, the regional economy remained to be on recession in 2016 along with worsening basic economic indicators, widening foreign debt exposure, and decreasing trade and investment. In most regional countries, structural reforms fell into stagnation and failed to gain long expected results. It is indicated that regional governments didn’t fully respond to economic hardship by adopting economic policies with counter-cyclicity. It argues that the regional economy has hit bottom and is likely to rebound. Regional countries are expected to reverse downturn in 2017and even regain a modest recovery although the medium-term economic prospect is not optimistic. According to the chapter “Political Situation”, regional politics underwent a remarkable transformation in 2016 featured by the rise of rightist governments and the decline of the leftist bloc. The increasing tension in some regional countries and especially Venezuela posed a threat to political stability in the region. It is pointed out that the leftist will continue to be a major political force although there are less leftist governments in the region in the short and medium term. According to the chapter “Social Situation”, with a worsening economy, social indicators in the region continued to deteriorate, which was especially remarkable in the fields of employment, education and public health.
3. Latin American and the Caribbean countries confronted new challenges and uncertainties in the complex and volatile international environment.
In 2016, radical changes in the external environment and the latest regional politics posed great challenges to regional countries. By and large, they maintained a balanced foreign policy of promoting relations with emerging economies like China and India and pursuing close partnership with the United States and the E.U.
In terms of the external environment, Ronald Trump’s election to be the next U.S. President is the most noteworthy factor. It is indicated that the U.S.-Latin American relations will face considerable uncertainties due to Trump’s new proposals on the U.S. foreign policy. Regional countries generally regard their relationship with the United States as a top priority. But, it is highly sensitive and complex due to differing interest and conflicting ideas. Once there was a growing presence of the United States in Latin America, regional countries would likely move to a nationalist position to precaution any U.S. interference into regional affairs. On the other hand, once the U.S. turned attention to other parts of the world, they would be concerned to be ignored to enjoy economic and financial support from it. For this reason, regional countries maintained rather complex and variable connections with the United States.
In recent years, Latin America was turning right with the establishment of a number of rightist governments. Different from the leftist predecessors, they would like to adopt a balanced foreign policy and focus on promoting the relationship with the United States, which greatly contributed to warming of the U.S.-Latin American relations. However, the process fell into stagnation due to Ronald Trump’s election to be the next U.S. President. As a result of his policy proposals, the bilateral relations were facing massive uncertainties and challenges. Presently Mexico and Central American countries are major victims of the transformation in the U.S. foreign policy. It is pointed out that Trump’s foreign policy would probably impair the U.S.-Latin American relations in the following three categories. First, Trump released a variety of signals of trade protectionism including the withdrawal of the United States from the Trans Pacific Partnership negotiations and agreement, the renegotiation of the North American Free Trade Agreement and the raise of taxes on imported Mexican goods. Second, Trump would tighten the immigration policy and repatriate undocumented immigrants. The measure will especially go against Mexico and Central American countries with a large number of illegal immigrants in the United States. Third, the U.S.-Cuban relations might suffer a setback due to Trump’s hardline stance on Cuba.
The chapter “International Relations” presents a general review of impacts on regional countries from the global context by focusing on Ronald Trump’s election to be the next U.S. President and the potential transformation of the U.S. foreign policy. According to it, in the final year in office, President Obama took active and forceful diplomatic measures including the historic visit to Cuba to consolidate his political heritage and ensure the U.S. influence over regional affairs. Due to Ronald Trump’s election to be the next President of the Untied States, the U.S.-Latin American relations were challenged by considerable uncertainties, forcing regional countries to take precautionary measures in case of any major adjustments in the U.S. foreign policy. It argues that the above-mentioned situation will drive regional countries to continue to diversify their international linkages by promoting the regional integration, coordinating their policy towards the United States and building up the trans-Pacific partnership.
4. China and Latin America gained a remarkable progress in bilateral relations by making joint efforts.
In 2016, the Chinese-Latin American relations gained a remarkable development. Chinese President Xi Jinping was invited to visit three regional countries including Ecuador, Peru and Chile and attended the APEC summit held in Peru, representing a new phase of the bilateral relations. In the context of the “New Normal” of the world economy, regional countries sought to gain economic momentum by expanding trade linkages with China. On the other hand, they were responding to challenges from China’s growing presence in the region. The Annual Report on Latin America and the Caribbean (2016-2017) carries two special reports to fully analyze the significance of the Chinese-Latin American relations and summarize the latest progress.
According to the special report “The Chinese-Latin American Relations on the New Phase”, China has proposed to forge a Community of Common Destiny by joint efforts and develop a comprehensive strategic partnership with Latin America, marking the new phase of the bilateral relations and Latin America’s role to be a more significant partner of China. They share common development targets, continue to upgrade the content of cooperation, and seek to expand cooperation fields. It is pointed out that China needs to pay long-term efforts to advance the bilateral relations to achieve strategic objectives although there is emerging a favorable global context. According to the special report “The Infrastructure Integration in Latin America”, there will be a rather bright prospect for the Chinese-Latin American cooperation in infrastructure.
5. Regional countries had varied performance due to their different degree of economic, social and political pressures.
In 2016, the economic performance of regional countries varied greatly. Among them, Brazil, Venezuela, Argentina and Ecuador underwent an economic contraction by 3.6%, 9.7%, 2% and 2% individually. In sharp contrast with them, the Dominican Republic and Panama gained a remarkable growth by 6.4% and 5.2%. Regional economies will enjoy varied economic prospect in 2017. Thanks to the recovery in commodity prices and China’s rising market demand, South American countries are expected to restore growth. On the other hand, there will be increased pressures on Central American and the Caribbean economies due to rising uncertainties in the U.S. economy and escalating imported inflation from price hike of commodities. Economic slowdown has caused considerable social costs in regional countries. In those countries with a prolonged recession including Brazil, Argentina and Venezuela, there were intense social conflicts, undermining political stability and democratic institutions. In regional countries like Colombia, Panama and the Dominican Republic, stable economy greatly contributed to social and political stabilities. The Annual Report on Latin America and the Caribbean (2016-2017) presents a very detailed and comprehensive analysis of all regional countries with an aim to display their varied performance.
In a word, transformation, uncertainty and varied performance can be categorized as keywords to define Latin America in 2016. It is expected that they are likely to be main features of the region in 2017.
I Main Report
Y.1 Sino-Latin American Cooperation: Exploring Co-development in Transformation of Global Economic Governance
Economic Division, Institute of Latin American Studies
Abstract：Since the beginning of the new century, the emerging and developing economies have become the main engine of the world economic growth, which has profoundly changed the global economic structure and challenged the traditional economic governance system. Latin America is the most concentrated area of high-income emerging and developing economies in the world. It is relatively active in international economic and trade activities, and because of its rich and unique natural resources, it has an important role in the future growth of the world economy. For a long time, Latin America has been an active player in global economic governance, but its voice and influence is relatively limited. Under the double pressure of adverse external environment and lagging domestic reform, Latin American countries need “strategic change” to transform their pattern of economic growth, upgrade their industrial structure, promote regional integration and attract external financing. President Xi Jinping demonstrated that China is willing to work with Latin American countries to strengthen the exchange of experience in governance, enhance macro policy coordination, promote the strategic convergence between China and LAC countries. The evolution direction of Sino-Latin American cooperation will be carried out along three main lines, i.e., reducing transaction costs, giving play to comparative advantages and jointly dealing with externalities, which will make fundamental contribution to the improvement of global economic governance.
Keywords：Sino-Latin America Cooperation; Global Economic Governance; Newly Emerging and Developing Economies; Transformation
II Situation Reports
Y.2 Political Situation 2016-2017: Left-wing Dominance Declines
Abstract: In 2016, the political situation in Latin America is relatively stable, the government’s changes have been carried out within the constitutional framework, with Venezuela being an exception which faces the situation of political instability. In 2016, Brazilian president Dilma Rousseff was impeached, Michel Temer organized the right-wing government and made the politics turn right from leftist-dominated political situation. Approval of left-wing doctrine is retreating while that of right-wing is taking shape. The right-wing forces inside and outside Latin America will continue to launch attack on the left-wing ruling parties so as to force them step down, therefore, Venezuela and other left-wing regime face unprecedented challenges. In 2017, we must pay more attention to the policy changes in countries where the right-wings have taken power, besides the elections in Chile and other countries.
Keywords: Left-wing Government; Political Dominance; Right-wing Consensus
Y.3 Economic Situation 2016-2017: Recession Continues, Uncertainty Increases
Abstract：In 2016, due to the slowness of world economic growth, the relevantly frequent “black swan” event, the declining commodity prices and the slumped international trade and FDI, the economy of Latin American and the Caribbean (LAC) are remained in continuing recession. A series of basic indicators, such as the regional overall economic growth, consumer price index, employment rate and international trade volume, turned out worse than the previous year. All the sub-regions were in deceleration, while the intra-regional difference widened. The economic indicators in Central America performed better than those in the Caribbean and South America. The LAC countries, faced with economic difficulties, implemented the targeted fiscal and monetary policy. However, as the policy spaces were constrained, these policies were characterized by short-term and emergency features. Looking ahead, with the external environment turning better, the region might recover growth in 2017, though it will be hard to rebound because of the increasing uncertainties. With the volatile in economy, the basic economic indicators will remain weak, while the differentiation is likely to be further exacerbated among the sub-regions.
Keywords：Latin American Economy; the Caribbean Economy; Recession; Disintegration; Recovery
Y.4 Social Situation 2016-2017:Economic Contraction Undermined Social Progress
Abstract: In 2016, economic contraction in Latin America, which has lasted for five years, had a significant impact on social development, embodied in poverty growth, unemployment rising, declining quality of job creation, and climbing consumer price as well as slow income growth in some countries. Under the pressure of fiscal deficit, expansionary social policies implemented by the traditional left-wing government are no longer feasible. In the 2030 Sustainable Development Agenda drafted last year, most countries in this region made an overall review of traditional social policies and focused more on the issue of social inclusion to reduce inequality.
Keywords: Latin America; Social Development; Labor Employment; Poverty; Inequality
Y.5 Foreign Relations 2016-2017:Uncertainties, Challenges and Opportunities
Abstract: In 2016, international relations in Latin America were remarkably influenced by the world situation and the latest regional politics. In the final year in office, American President Obama took significant diplomatic initiatives including the historic visit to Cuba to sustain the U.S. influence over regional affairs. Due to Ronald Trump’s winning in the presidential election, the U.S.-Latin American relations were challenged by considerable uncertainties, forcing regional countries to take precautionary measures in case of any major fluctuations in the U.S. foreign policy. China’s significant role in Latin America was demonstrated by President Xi Jinping’s visit to Ecuador, Peru and Chile in November 2016, pointing toward a new phase of the Chinese-Latin American relations. In the context of the “New Normal” of the world economy, regional countries were seeking to gain economic momentum by expanding trade linkages with China. It is notable that there are remarkable transformations in some countries’ foreign policy due to rotation of ruling parties.
Keywords: Latin America; International Relations; The United States; Diplomatic Policy
III Reports on China-Latin America Relations
Y.6 The Sino-Latin American Relations in a New Stage: Positioning and Influential
Abstract: The Sino-Latin America relations entered a new stage after the great development in the first decade of the 21stcentury. Starting from 18th Congress of CPC in November 2012, the new generation leadership led by Xi Jinping, has put forward a series of goals, policies and grand strategies of development both domestically and internationally. Within the grand Chinese diplomatic strategy, the goal of Sino-Latin America relations and its position in Chinese diplomatic strategy has been enhanced greatly. The Sino-Latin American relations have advanced to a new stage when Chairman Xi proposed to establish the Common Destiny for Progress between China and Latin American Countries and Comprehensive Strategic Development Partnership. In this new stage, the goal, cooperation plan, and development engine have been updated significantly. However, the internal and external environments for Sino-Latin America relations are undergoing fundamental changes. These changes will bring both opportunities and challenges for Sino-Latin American relations. The certainty of China’s policy toward Latin America and uncertainty of the world caused by Brexit and Donald Trump’s taking power, offer opportunity for China and Latin America to further deepen their cooperation, though with a lot of challenges lying ahead. One of the key challenges comes from Chinese side: How to achieve greater development domestically, enhance risk management for Chinese investment in Latin America and strengthen its soft power in Latin America.
Keywords: The Sino-Latin America Relations; Chinese Diplomatic Policy; The Common Destiny for Progress; The Comprehensive Strategic Development Partnership
Y.7 Infrastructure Integration in Latin America: Progress and Cooperation with China
Abstract：Latin America continues to accelerate the regional integration of infrastructure, focusing on areas of transport, energy and communication. IIRSA is entering the high wave of projects completion, Mesoamerica is mainly building the sub-regional networks of road and power connections. In 2016, China-Latin American cooperation in the field of infrastructure achieved great breakthrough, with Chinese companies successfully carrying out several M&A in Brazilian energy sector as well as road concession projects in Jamaica and Ecuador. Eleven “Bi-Oceanic Corridor” frame in Latin America have been under construction or in planning. The financial resources from China available for supporting the development of infrastructure in this region have reached over 180 billion USD. China-Latin America cooperation is endowed with new historical opportunity.
Keywords: Latin America; Infrastructure Integration; China-Latin America Cooperation
IV Countries and Regions Observation
Abstract: The impeachment process lasting nearly 9 months has ended by Dilma Rousseff out of office. Michel Temer officially became the president of Brazil, however, his ruling may not go smoothly as expected. Party politics has entered another round of differentiation and re-organization in the coming presidential election in 2018. And the influence derived from continuous corruption probe maybe immeasurable. The second consecutive year of deep recession remains to be the biggest challenge for the new government. Although President Temer has proposed some reform measures such as limiting fiscal expenditure, reducing public debt and privatizing state-owned enterprises, most of them must be approved by Congress in the form of law amendment. Therefore, there exist a lot of uncertainties. In the short term, unemployment rate and poverty rate have increased. Due to the need of re-evaluating the protectionist policies pursued by Trump government of the United States, the adjustment of Brazil’s corresponding policies remains to be awaited. In 2017, Brazil’s situation will be more complex than expected.
Keywords: Michel Temer; Impeachment; Economic Recession; Corruption
Abstract：In 2016, the Mexican government was under double pressure, that is, uncertainty about Mexico-U.S. relations and volatility of domestic economy and politics. President Peña Nieto strengthened his efforts to fight corruption. The main challenge throughout the rest of his term is how to ensure that the structural reforms are adequately implemented. The ruling PRI lost 7 out of 12 governorships in local elections in June, which implies a considerable challenge in 2018 General election. Economic performance showed no improvement, and the main goal of economic policy was to ensure macroeconomic stability. In social terms, security issue remains to be a primary concern for the public, and protests were becoming normalized. In foreign relations, Peña Nieto government was trying to consolidate relations with the United States, especially with upcoming Trump administration.
Keywords：Trump; Corruption; Public Security; Local Election; Structural Reform
Abstract: In 2016, the Macri government basically achieved the goal of consolidating power, while the left-wing political forces are still at a low tide due to internal divisions, corruption scandals among other reasons. Although the government made substantial economic adjustments, it failed to reverse the economic decline in Argentina. The economic downturn was the result of a combination of internal and external factors, and the economy in 2017 will depend on changes in these factors. As the economy remained depressed, social situation showed no signs of improvement, and the instability worsened. The year 2016 witnessed major adjustment in Argentina’s foreign policy. Series of diplomatic actions taken by Macri implied that Argentina’s diplomatic strategy has undergone a fundamental change, which was characterized by pragmatism, pluralism, balance, and reshaping the national image.
Keywords: Argentina; Macri Administration; Market-oriented Reform; Pluralist Diplomacy
Y. 11 Cuba
Abstract: In 2016, the new political landscape marked by combination of traditional and new generations of leadership was formed in the 7th Congress of the Communist Party of Cuba. “The conceptualization of the economic and social model of Cuba’s socialist development” confirms the strategic objective of “promoting and strengthening the construction of a sovereign, independent, democratic, prosperous and sustainable socialist country”. The economic performance was still poor, but the actualization process continued. The government maintained investment in health care and education, improved communication services and environmental protection, however, the shortage of commodity and low income level still affect social stability. To make things worse, population aging poses a new problem to Cuban economy. Cuba is very active in its diplomatic activities, with its relation with U.S. advancing steadily, though Trump’s election increased uncertainty. It also achieved significant progress in its relations with EU, meanwhile maintained good relation with traditional friend countries.
Keywords: Cuba; 7th Congress of the Communist Party of Cuba; actualization process; Cuba-U.S. Relations; Cuba-EU relations
Abstract: As a result of decreasing crude outputs and the fall of oil prices, Venezuela’s oil export revenues continued to decline in 2016, which led to the deteriorated macro-economy featuring by extended recession, surging inflation, and severe commodity shortage. The country witnessed the intensified political rivalry between the ruling United Socialist Party of Venezuela(PSUV) and the opposition Democratic Unity Roundtable (MUD). The newly established National Assembly, dominated by the MUD, continued to challenge the authorities of the Maduro government. As an effort to overcome the impacts of inflation, the government raised the minimum wage four times in the year. In order to improve housing conditions, it attached great importance to implementing the Gran Misión Vivienda (GMVV). The Maduro government sought to stabilize oil prices by concerted efforts of oil producing countries, maintained close ties with China and attempted to improve bilateral relations with the United States.
Keywords: National Assembly; Economic Recession; GMVV; Oil Prices
Abstract：In 2016, in the area of politics, the president and her government were in crisis of confidence. In the municipal election, the opposition coalition recovered important ground. The economy ran smoothly, though growth was still weak due to sluggish domestic demand. Fiscal and monetary policy has been tightened. In social terms, the protest movement prompted the government to formulate a new pension system reform program. Chinese President Xi Jinping visited Chile, and enhanced Sino-Chile relations to be comprehensive strategic partnership.
Keywords：Chile; Municipal Election; Pension Reform; Comprehensive Strategic Partnership
Abstract: In 2016, Colombian government has reached an agreement with FARC, the biggest left wing anti-government group, thus ended a five decades civil war. To raise the supporting rate and implement the peace agreement smoothly, President Santos reshuffled his cabinet to unite more forces by absorbing new ministers from non-alliance parties. The combination of lower oil price and sluggish demand from both international and domestic market led to moderate economic growth. However, relatively sound economic policies made Colombia rank among the top Latin American countries in the field of economic performance. It witnessed high inflation expectation, moderate currency depreciation and reduction in current account deficit.
Keywords: Colombia; Peace Agreement; Cabinet Reshuffle; Moderate Economic Growth
Abstract：Peru has marched towards a steady political development since President Kuczynski organized new government in July 2016. Economy kept growing, while financial situation worsened to some extent. Peruvian society has achieved progress in poverty reduction and primary education expenditure, though income distribution remains unequal. The current government further strengthened relations with Latin American countries, particularly with its neighbors, and its relations with China reached a new stage of comprehensive strategic partnership.
Keywords: Stable Political Situation; Steady Economy; Basic Social Needs; Regional Foreign Affairs
Abstract: Evo Morales will not be able to seek a fourth term at the elections in 2019, as a result of being defeated at the referendum in February. The ruling party Movimiento al Socialismo (MAS) still controls two-thirds seats in the National Assembly. In 2016, GDP growth in Bolivia slowed to 4.0% while still listed among one of the strongest growing economies in this region. In 2016, Morales launched overall economic and social development plan for 2016-2020, which focuses on his promise to battle poverty and inequality. Both the oppositions and even some of Morales’ former allies organized strikes and protests, giving rise to continuous political and social crises. Bolivia’s relations with Chile were further complicated by the issues of sovereign access to the Pacific coast as well as the use of shared water resources of the Silala river. Its relations with U.S. remained rigid while its ties with Russia and India strengthened. The cooperation between Bolivia and China has been further promoted. Bolivia has been elected non-permanent member of the UN Security Council from 2017 to 2018.
Keywords: Evo Morales; Failed Constitutional Referendum; Political Crisis; Non-permanent Member of the UN Security Council
Abstract: The year 2016 is the last year of Correa’s presidency, which witnessed profound challenges in the field of politics and economy. What’s more, the severe earthquake disasters further worsened the uneven situation. The main political parties are ready for the new presidential election of next year, and the ruling party elected Lenín Moreno as its presidential candidate. The economic situation worsened, the growth rate contracted by 2 percentage point. The losses resulted from earthquake disaster deteriorated Ecuador’s political and economic situations. The economic recession led to a rise of unemployment rate as well as poverty rate. However, Correa government achieved progress in diplomatic area, i.e., acquired formal accession to the EU-Andean Community Association Agreement and upgrading of its relationship with China to Comprehensive Strategic Partnership.
Key words: Ecuador; Lenín Moreno; Earthquake; the Comprehensive Strategic Partnership
Abstract: In 2016, evidence of stagflation, worrisome public security, alongside with the frequent disputes inside the FA, imposed increasing pressure on the Vazquez administration. Economic performance continued the trend of 2015, with further declining growth and rising inflation. Though achievements in social development have been significant, the security situation remained grim. With tax policy sparking controversy, protests and strikes staged again. In foreign affairs, Uruguay restored its relationship with Argentina. In October, president Vazquez visited China successfully. Mercosur experienced a systemic crisis, and Uruguay was committed to expansion of policy space of member states.
Keywords: Uruguay; Stagflation; Public Security; Uruguay-Argentina Relations
Abstract: In 2016, the governability of the Partido Colorado led by Carters was weakened, and the reform measures were hampered as a result. Paraguay’s growth rate of 4% was higher than the average level in Latin America, and its low-cost manufacturing industry showed great potential. Its foreign relations had been improved by consolidating bilateral relations with Brazil and returning to MERCOSUR.
Keywords: Paraguay Economy; Partido Colorado; Low Cost Manufacturing Industry
Y.20 Costa Rica
Abstract: In 2016, Costa Rica was politically unstable. The strength of the opposition parties legislature limited the power of the president, hampering most reforms measures. Internal strife within the Citizens’ Action Party (Partido Acción Ciudadana)abounded, and top-level government officials shuffled frequently. Inflation rate kept at a low level, and economy recovered slowly. Meanwhile, there was no fundamental improvement in public debt ratio, fiscal deficit, or high unemployment rate. The Development Bridge (Puente al Desarrollo) policy achieved some initial success, with poverty rate continued to decline, currently at its lowest in recent years. However, crime rate increased, and the year 2016 became the most violent year in history. In foreign relations, Costa Rica actively participated in global and regional integration, signed a series of important agreements with China, which further enriched pragmatic cooperation between the two countries in various fields.
Keywords: Costa Rica; Political Division; Reform; Crime Rate; Fiscal Deficit
Abstract: In 2016, President Ortega secured a third consecutive term in office by joining hands with his wife Rosario Murillo as vice-president. As a result of the social protest and uncertainty in financial viability, construction of the Canal project was delayed again. Nicaraguan economy showed the strongest growth among Latin American countries despite regional slowdown. In terms of climate vulnerability, Nicaragua is the fourth most vulnerable country in the world. Nicaragua maintained close political and economic relationship with Venezuela, and its ties with the US remained strained.
Keywords: President Ortega; FSLN; General Elections; Climate Risk
Abstract: In 2016, the general situation of Honduras made much progress in political economy and diplomacy, but social problems were still serious. Domestic politics was hampered by multiparty division in the Parliament. The Supreme Court issued a rule to remove the ban on presidential reelection. The economy kept growing in the fourth year. Though the government has taken a series of reform measures, the business environment still can’t meet investors’ expectation. Its diplomatic efforts will be focused on strengthening ties with the US and Central America countries. Honduras has signed a free trade agreement with Peru.
Keywords：Honduras; Political Stability; Economy Growth; Social Problems; FTA
Y.23 El Salvador
Abstract: In 2016, the Salvadoran government of left-wing party (FMLN), led by President Salvador Sánchez Cerén still faced challenges in fiscal weaknesses and high crime risk. As indicated by the FMLN’s failure to gain a majority in legislative elections in March 2015, the parties’ fragmentation posed fundamental risks to political effectiveness. Former presidents incurred corruption trials. Due to the impact of global economic situation, economic growth remained low and financial situation continued to deteriorate, despite the positive performance of domestic demands. In order to improve social security and relieve the pressure on governance, the President had taken a series of measures to struggle against gangs, but his effort yielded little effect. The priority of foreign policy was to maintain close relations with the US and other Central American countries, while focusing on the issue of immigration. El Salvador promoted commercial relations with China.
Keywords: Political Fragmentation; Corruption; Financial Difficulties; The Gangs; Immigration
Abstract: President Jimmy Morales of the right-wing Frente de Convergencia Nacional of Guatemala, faced multiples challenges, including fragmented legislature, as he attempted to fulfill his pledges to improve public services and combat corruption. Economic activity slowed in 2016, with GDP growth at only a mild 3.3%. Social unrest and corruption scandals further eroded people’s confidence in the president’s governance ability. The Morales Administration maintained close relations with traditional partners in Latin America, Europe and the US. However, following the election of Donald Trump to the US presidency in November, there was a risk that future aid flows might be tightened. Relations with Belize remained tense, which hampered security efforts in Central America.
Keywords: Guatemala; Fiscal Balance; Social Violence; Corruption Scandal; Border Conflicts
Abstract: The political situation in Panama in 2016 had setbacks. Adverse events occurred one after another, such as “Panama Papers” leaking and the “Waked Family” suffering sanctions, which badly eroded the President’s approval rating. The macro economy maintained a stable growth rate of more than 5%. The completion of the Panama Canal expansion project is expected to facilitate long-term economic growth. On social aspect, the “Barro Blanco” dam constructed in indigenous Ngäbe Buglé failed to reach a settlement agreement yet. The public held lukewarm reaction to Government’s efforts to maintain public security. The diplomatic situation was strained in 2016, the Government was kept busy quelling the impact of the “Panama Papers” incident, and the trade war with Colombia had not been fully settled.
Keywords:“Panama Papers”; Panama Canal; Dam; Public Security; Colombia
Y.26 Dominican Republic
Abstract：President Danilo the candidate of PLD won his second term in May 2016. The offshoot party divided from PRD, named Modern Revolution Party, formed opposition alliance with PSRC the main member in traditional governing coalition. Mr. Medina pursued an ambitious social agenda in his second term, including security reform, policies on immigrants, education reform, poverty reduction and job creation. On the economy aspect, GDP was estimated to increase by 6.4%, and the overall deficit to 2.7% of GDP. On the social aspect, job creation and anti-crime were the most important issues, while poverty remained to be a concerned problem. The most impressed diplomatic affair was the relationship with Haiti due to illegal immigration.
Keywords: Dominican Republic; Politics; Economy; Social Unrest; Diplomacy
Abstract: In 2016, Haiti re-held the presidential election, but the political situation remained unstable. Affected by political instability and the hurricane “Matthew”, Haiti’s economic situation in 2016 was not optimistic, and was expected to be even worse in 2017. Haiti’s social situation was still serious, with poor social security situation and weak law enforcement capacity. The relationship between Haiti and the United States may be strained as Donald Trump was elected President of the United States.
Keywords: Haiti; Presidential Election; Economic Stagnant; Social Unrest; Haiti–US Relations
Y.28 Caribbean Area
Abstract: The goal of comprehensive development in Caribbean encountered structural obstacles. Its politics had made progress, with political competition maintaining a degree of relaxation and democratic politics further improving. The whole economic situation deteriorated and structural defects remained to be a problem, though some positive factors emerged. According to the New Millennium Development Goals and the Post-2015 Development Agenda, recent social development was mixed and accumulated problems remained to be resolved. Although it had showed diplomatic progress along two directions, i.e. pursuing peace and development from regional solidarity and constructing developmental partnerships, the Caribbean was still kept in dependent status.
Keywords: The Caribbean; Comprehensive Development; Structural Obstacle
V Appendix: Economic Statistics
Y.29 Table 1 Average Annual Growth Rates of GDP and GDP per Capita (2007-2016)
Y.30 Table 2 Regional GDP and GDP per Capita of LAC (2013-2015)
Y.31 Table 3 Balance of Payment (2014-2016)
Y.32 Table 4 Net FDI (2007-2015)
Y.33 Table 5 Total Foreign Debt (2007-2016)
Y.34 Table 6 Annual Variations of CPI (2007-2016)
Y.35 Table 7 Open Unemployment Rate (average annual rate) (2007-2016)
Y.36 Table 8 Sino-Latin American Trade Statistics (2012-2016)
Y.36 Table 9 Non-Financial FDI Statistics on China and LAC (2011-2015)
Derecho reservado: Instituto de América Latina，Academia de China de Ciencias Sociales.
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