Ressentiment anti-américain
A number of governments in the region have been working for the past decade to reduce their dependence on the American economy. They have diversified trade with the rest of the world, while also making efforts to save tens, and sometimes hundreds, of billions of dollars for times when international conditions turn sour. As their economies strengthened and their political cooperation took off, it seemed the United States was being rapidly pushed out of the picture. Latin American leaders were standing up to America with growing bravado.
In the past month, both Venezuela and Bolivia expelled the American ambassadors to their countries. Not only did Brazil, thought to be among America’s strongest allies in the region, support the expulsion by Bolivia, a major source of natural gas, but Brazil’s President Lula da Silva also railed against an American naval presence in the region, warning that his nation needed to put its own warships on alert in response.
Such anti-American sentiment reflects a longstanding bitterness over Washington’s economic prescriptions for Latin America, policies that some countries in the region blame for undercutting them. As Wall Street itself started to unravel, some leaders seemed to feel vindicated by the collapse. "We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble," Cristina Fernandez de Kirchner, Argentina’s president, said two weeks ago.
Une dépendance économique toujours forte à l’égard des Etats-Unis
But the financial crisis has exploded far beyond Wall Street. Whipsawing global markets are already having a ripple effect across Latin America. As nervous investors pulled money out of emerging markets, Brazil’s currency, the real, plunged 16 percent against the dollar last month, resulting in hundreds of millions of dollars in losses at large food and eucalyptus-pulp exporters that placed bad bets on the direction of the real.
In Mexico, falling remittances from the United States are also raising concern, with Finance Minister Augustin Carstens warning that money sent home from across the border could decline by $2.8 billion, or 8 percent, this year. In Venezuela, a sharp drop in the value of the country’s bonds in the last two weeks reflects fears about plunging oil prices, especially since the United States remains by far the largest buyer of Venezuelan oil despite the deterioration of relations between the countries.
The issue, economists say, is largely about access to credit, which is needed to keep Latin America’s export-oriented economies humming along. "The credit crunch and the liquidity constraints we are seeing are going to affect everyone in the world," said Alfredo Coutino, a senior economist at Moody’s, the credit-rating agency. "That means that the cost for Latin American companies, particularly for those with the need for external funds, is going to be higher."
Plummeting commodity prices could also hamper growth in countries like Argentina and Ecuador, while the psychological effect of a crash in the United States is already reverberating through Latin American stock exchanges. That could lead to a reining in of household spending, which has driven much of the recent growth in Brazil’s economy, especially, economists said.
Some governments are also directly tied to the American institutions they have derided, as in Venezuela, where the government has lost about $300 million in Lehman-related investments.
Des pays inégaux face à la crise
With increased fiscal discipline, some countries have built up stabilization funds that should help them weather the fallout from the Wall Street mess, economists said. Brazil’s government has directed its national development bank, the BNDES, to extend $2.5 billion in credit to agricultural exporters for the next harvest to try to prevent a major slowdown.
Other countries in the region may struggle more. Before the crisis, foreign investment had already dwindled in Bolivia and Ecuador, where governments flush with revenues before commodities prices began declining had nationalized foreign companies and clashed with multinationals.
Argentina, still weighed down by debt, saved much less than Brazil or Chile during its economic expansion. Now it faces declining commodity prices, especially for soybeans, its main export, and will have less flexibility to infuse cash into its industries, analysts said. In recent weeks, the Argentine government, realizing it may face a fiscal shortfall, has been focused on international investors to gain new funds, and has leaned on Venezuela to refinance billions of dollars in debts. But with oil prices plummeting, Venezuela may impose harsher conditions on lending to Argentina.
Vers un monde multipolaire ?
Even before the Wall Street meltdown, the region’s Achilles’ heel — high inflation — was rearing its head in several countries, notably in Venezuela, Bolivia and Argentina. Economists had been warning for months that Argentina could be headed toward a financial crisis of its own if it could not get rising inflation under control.
One silver lining for some countries could be China, which has become a strong export partner for South American soybeans, oil and other commodities. If China’s growth remains robust, the country will continue to lean on Brazil and Argentina for the crop. By traveling to China last month to sign a deal aimed at tripling oil exports to the country, Mr. Chavez may end up reducing his country’s dependence on the American market. "The world will never be the same after this crisis," Mr. Chavez told reporters in Brazil. "A new world has to emerge, and it is a multipolar world. We are decoupling from the wagon of death."
Other leaders, like Mr. Lula da Silva, have gone from being dismissive of the crisis to outright incensed at Wall Street and Washington for it. "We did what we were supposed to do to get our house in order," an angry Mr. Lula da Silva said Monday. "They spent years telling us what to do and they themselves didn’t do it."
