In the run-up to the UN General Assembly, some presidents had hesitated to condemn Russia. It is still unclear how the Ukraine crisis will affect the economies in the region.
by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung
When 141 states condemned Russia’s attack on Ukraine at the UN General Assembly on March 2, the overwhelming majority of Latin American countries were among them. No state spoke out in support of Russia. Cuba, Bolivia, El Salvador, and Nicaragua abstained. Venezuela, which stands by Russia, was without voting rights because it had not paid its dues.
This unity, with which the states of Latin America demanded Russia’s withdrawal, was surprising: for in the days since Russia’s attack on the neighboring country, important heads of state in the region had hesitated to condemn the invasion.
The left-wing nationalist and authoritarian governments of Cuba, Nicaragua, and Venezuela previously called the invasion of Ukraine legitimate. This was to be expected. Russia is an important arms supplier and creditor for these countries.
It was unexpected that El Salvador dropped out and did not condemn Russian aggression. It is suspected that the authoritarian president wants to make nice with Russia. He could offer El Salvador, with its state sponsorship of cryptocurrencies, as a conduit to circumvent sanctions. Russia could, for example, trade raw materials and other goods via digital currencies uncontrolled through the Central American country – fear US authorities.
Mexico and Brazil sought a balancing act in the crisis before the vote. Left-wing populist Andrés Manuel López Obrador declared that Mexico wanted to be on good terms with all states worldwide and that the country would therefore not support sanctions against Russia.
Shortly before the start of the Russian offensive, Brazil’s right-wing populist President Jair Bolsonaro had declared his “solidarity with Russia” during a visit to the Kremlin and publicly affirmed that he did not want to get involved in the conflict. His country was also economically tied to Russia through extensive fertilizer imports, he said. Nevertheless, the foreign ministers of both countries, with their parallel statements that were much harsher against Russia, ultimately ensured in the UN vote that both states officially condemned Russia’s aggression after all.
Surprisingly, the heads of state in Panama, Paraguay, Peru as well as Honduras could not bring themselves to condemn the Russian invasion.
Clear criticism of Russia came, as expected, from the more conservative governments in Colombia, Uruguay and Ecuador. Chile’s leftist President Gabriel Boric, who takes office this week, also clearly condemned the aggression.
A new foreign policy development has been triggered by the Ukraine crisis between Venezuela and the USA. The actual arch-enemies have begun to talk about energy and political rapprochement. Venezuela has the world’s largest oil reserves, but is producing well below potential because of its government’s anti-business stance. The U.S. could do with a supplier close by, and the government of autocrat Nicolás Maduro is hoping for relaxed sanctions against his country.
The economic impact of the sanctions on Russia on Latin America is difficult to forecast: On the one hand, commodity exporters such as Argentina, Brazil, Chile and Peru could benefit from rising prices for agricultural goods such as metals. Oil exporters such as Ecuador and Colombia also benefit from high oil prices.
The increased energy prices are bad news for all net importers of oil and gas – especially in the Caribbean and Central America. The now sharply reduced fertilizer exports from Russia, Ukraine and Belarus could also lead to crop declines for agricultural producers in South America in the medium term.
Overall, the significant rise in inflation rates will also lead to an increase in poverty and reduced growth in Latin America.
COVID-19 in Latin America
Development of case numbers in the region
Currently reported cases in the countries
COVID-19 vaccine doses administered
Share of people vaccinated by country