The US presidential elections are already swinging the pendulum for Latin America in significant ways. The fear that the US will now revert to protectionism lead to a major sell off across different asset classes. The Mexican Peso tumbled to 20-years lows and has hardly recovered as of yet, pulling down the entire region. After an initial quick fall the Dollar bounced hard and is currently trading at multi-month highs. This has exacerbated the devaluation of Latin American currencies, which are traded against the Dollar.
Apart from the financial fallout, geopolitical consequences of Trump’s future policies have appeared as well. Now that Trump has confirmed he will not support the Trans-Pacific Partnership, potential members like Chili, Peru, Mexico and Colombia will likely beef up their bilateral economic relations in order to compensate for TPP. Peru already stated to foresee bilateral negotiations with Australia and New Zealand. Argentina, very open to free trade, will receive $4.1 billion in investments from Canada. This is about half the amount expected from US companies through 2019. A more protectionist approach by Trump could bring that amount down and leave the door open for Canadian companies to fill the gap. Withdrawal from NAFTA could exacerbate this and will constitute extra incentive for Latin American countries to strengthen bilateral relations with other geopolitical powers. Peru, which has strong historic ties with China, already trades more with China than with the US, a development that could potentially spill over to increased security and military cooperation. President Kuczynski’s pull to China is very clear: “We hope to tap into new markets in China, especially for agriculture. We are also interested in cooperation on science and technology. Furthermore, cultural exchanges and cooperation in archaeology and climate change are also very important for us.” It remains the question whether the US will look on from the sidelines if Russia and China increase their influence in Latin America.
Interregional relations are likely to strengthen as well, given Trump’s veiled threats to Central American countries on the topic of immigration. Whether the US will build a wall or will significantly increase deportations of immigrants, Honduras, Guatemala and El Salvador have said to form a bloc with Mexico to deal with the US under Trump leadership. However, with regards to Mexico, it is likely that organized-crime competition will increase, as a result of traffic restrictions and stricter border controls. In this scenario, conflict over control over the remaining open crossings would lead to increased violence. Violence in border cities like Ciudad Juarez and Tijuana is already on the rise. The second security consequence for Mexico stems from the influx of deportees, who would have few employment opportunities in Mexico. They could provide a ready pool of labour for criminal organizations. Central American cooperation is said to increase collaboration on jobs, investments and migration.
It remains to be seen as to which direction the pendulum will eventually swing, however, for the moment significant financial, economic and security consequences are already visible in Latin America.
United Nations leader Ban Ki-moon has called on those countries located in the Sahel to improve their border security as a means of countering terrorism, and for rich countries to further aid the impoverished nations in that region. In a new report released by the UN and sent to the Security Council, Mr. Ban warns that conflict in the vast region, which runs from Mauritania on Africa’s West Coast to Eritrea in the east, will only worsen unless a more integrated approach is taken which will focus on security and allowing those states to lift their fast-growing populations out of poverty. Amongst those countries located in the Sahel which have seen conflict are Mali and Sudan’s Darfur. The region also encompasses some of the world’s poorest countries which have vast and arid regions that see regular climate crises. In turn, the UN report states that within the next twenty-five years, the population in the region is set to “ballon” from 150 million to 250 million.
The report reflects mounting international concern over the region. It also comes at a time when Japan last week announced that it wold provided US $1 billion to help the “stabilization” of the Sahel. In the report, which was largely drawn up by Mr. Ban’s special envoy to the region, former Italian prime minister Romano Prodi, the UN chief highlighted that “weak governance, widespread corruption,” and “chronic political instability,” were amongst the issues that were threatening the overall security in the region. He further indicated that “only through strong, common preventative actions geared primarily towards development can we avoid the Sahel turning into an area dominated by criminal and terrorist groups that undermine our collective security.” The UN chief noted that he was “alarmed” by the rise of groups, such as al-Qaeda in the Islamic Maghreb (AQIM), which has been active in Mali, as well as Boko Haram in Nigeria and other transnational criminal organizations in the region. In turn, he highlighted that there were clear links between crime syndicates trafficking drugs and militants in the Sahel and has called for greater efforts by countries and regional groups, such as the African Union (AU), to boost cooperation amongst police, military, frontier and customs services. Mr. Ban has also called for regional intelligence meetings and has offered UN aid to police and judges, who he states should devote greater attention to the financing terrorism, crime and ams trafficking. There is also a greater need of “exchange of information” between airports in Latin America, Africa and Europe in order to counter the narcotics trade which comes from South America through Africa. According to the UN report, an estimated eighteen tons of cocaine, worth US 1.25 billion, transited through West Africa in 2012, in which much of it passed through the Sahel. Mr. Ban has indicated that his proposed UN Integrated Strategy for the Sahel seeks to boost security by helping to improve governance and getting aid to the 11.4 million people, including five million children, that are still threatened by malnutrition. The UN humanitarian coordinator for the Sahel, Robert Piper, indicated this week that a US $1.7 billion appeal for the region had only been thirty-six percent funded.