Times are changing in Latin America – why it’s worth taking a closer look

by Andreas Renschler, LADW Chairman, Member of the Board of Management Volkswagen AG and CEO TRATON GROUP

 

The transformation of Latin America is in full swing, taking its lead from the new presidents of the region’s two largest economies: left-wing Andrés Manuel López Obrador in Mexico and right-wing Jair Bolsonaro in Brazil are in the process of turning their respective countries’ establishments upside down and thus altering the political and economic climate of Latin America. Despite their political differences, both heads of state make similar promises: more prosperity and sustainable growth. This would benefit the two-thirds of Latin America’s total economic output that Brazil and Mexico constitute. The growing confidence of investors from all around the world indicates that the likelihood of success is not exactly negligible. It remains to be seen what path both governments will take in order to keep their promises. Certainly, 2019 will be a decisive year.

Further south on the continent, significant presidential elections are also upcoming: in October this year, the Argentines will have to reject or approve the neoliberalism of President Mauricio Macri – with the associated possibility of polarisation, as was recently the case in Brazil. And a time bomb is ticking in the north of South America: Venezuela’s political crisis has to come to a peaceful conclusion.

It is at precisely such junctures that the question again arises: has Germany sufficiently positioned itself in Latin America yet? Should Germany and Europe not deal more strategically with the homeland of 650 million predominantly young people? There is still time to address the issue. In Latin America, cards are being reshuffled and foreign partners’ attitudes being put to the test. On the one hand, Mexico still has to walk on eggshells in its relations with the USA, on the other, Brazil is discussing an unprecedented alliance with the US that President Bolsonaro forged during the visit of his counterpart, Trump, in early March. And all the while, China is working to strengthen its position in Latin America and doing so without improvisation but with an eye to the long haul, for Beijing has a clear strategy on what is to be achieved there over the next fifty years.

In the meantime, the EU needs to consolidate. The challenges of Brexit have to be mastered. More important still is that the EU converts its economic force into political force. We are the largest economic area in the world and have a right to assert our independence before the increasingly polarised economic powers of the USA and China. We should use the potential that is to be found in a closer alliance between the EU and the Latin American economies. Together with Europe, the countries of Latin America and the Caribbean make up a third of the total votes at the United Nations. The centuries-old cultural link between these two regions furnishes the required trust. It is worth reacquiring the region as a close partner and ally.

Latin America
© Pixabay, Gerd Altmann

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