Bello | A warmer Latin climate for Obama

EconomistApr 11th 2015

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The region will start to put pragmatism ahead of ideology in dealing with the United States

LATIN AMERICA can be tricky ground for leaders of the United States. In 1958 Richard Nixon, then the vice-president, survived an attack on his car by enraged students in Caracas. Ronald Reagan was widely mocked after he confused Brazil with Bolivia during a speech in Brasília. At a Summit of the Americas in Argentina in 2005 George W. Bush was greeted by a mass rally organised by the host, Néstor Kirchner, at which his country’s plan for a Free Trade Area of the Americas was denounced by Venezuela’s leader, Hugo Chávez. Four years later, at a similar summit in Trinidad, Chávez presented Barack Obama with an anti-imperialist tract.

Mr Obama’s staff doubtless thought that their boss would be greeted as a hero at the latest summit in Panama, to be held on April 10th and 11th. At Latin America’s insistence, this is the first such get-together (they started in 1994) attended by Cuba. Partly with an eye to that, in December Mr Obama announced plans to restore diplomatic and some business ties with Cuba. This is a huge step towards lifting America’s 54-year-old economic embargo against the island. And while many Latin Americans dislike Cuba’s Fidel Castro and his brother, Raúl, the country’s current president, they dislike the embargo even more.

Two things threaten to mute the cheers in Panama. First, talks over reopening embassies have been going more slowly than some had hoped. The United States wants its diplomats to be able to travel and operate freely on the island. Cuba wants the State Department to remove it from a list of state sponsors of terrorism (where it is joined by Iran, Sudan and Syria). Until this happens no bank will do business with a Cuban diplomatic mission. American officials say the result of the State Department review might be announced in Panama. Mr Obama and Mr Castro will “interact” informally in the corridors of the summit.

The second dampener is Venezuela. Last month the Obama administration implemented a law that imposes sanctions on seven Venezuelan officials for violations of human rights. That has given Nicolás Maduro, the country’s embattled president, a chance to turn the summit into another anti-imperialist rally. His demand that it formally condemn the sanctions has the backing of a handful of hard-left regimes, including Cuba’s. Few Latin Americans like unilateral interventions by the United States, and the sanctions undercut a (feeble) attempt by the South American Union to mediate between Venezuela’s autocratic regime and the opposition.

Beyond the headlines of discord, changes are afoot in Latin America that should favour the United States. The first is that Mr Obama has at last come up with some constructive policies towards the region. As well as the opening to Cuba, these include immigration reform, a downplaying of the war on drugs and a request to Congress for $1 billion in aid to mitigate the drug war’s impact on Central America. The administration is also trying to help energy-short Caribbean countries.

Second, the end of the commodity boom is altering the politics as well as the economics of Latin America. Economic growth this year is set for just 1%, the worst performance since 2009. The region’s “pink tide” of left-wing governments is ebbing. Brazil’s Dilma Rousseff, confronted with a massive corruption scandal and the likelihood of a deep recession, is struggling to keep her job. Argentina’s Cristina Fernández de Kirchner departs in December; her successor will be more moderate. Even Bolivia’s Evo Morales and Ecuador’s Rafael Correa, the most successful members of South America’s awkward squad, have seen opponents make gains in municipal elections. Mr Maduro will be greeted in Panama by a demand from 22 ex-presidents of the centre and right that he free opposition prisoners.

This does not mean a return to the 1990s and the monolith of the “Washington consensus” on market economics. China, now Latin America’s second-biggest trade partner, is in the region to stay. Some of Mr Obama’s policies might be scrapped by a Republican successor. How the region’s expanded middle classes will react to the economic slowdown is unclear. Inequality, the left’s main banner, remains a big concern.

What it does mean is that pragmatism will start to get the better of ideology. Ms Rousseff plans a visit to Washington, to replace the state visit she scrapped in 2013 over revelations that the National Security Agency spied on her. Her trade minister, Armando Monteiro, visited in February “to give the message that the relationship with the United States is a priority”. Others in the region are likely to make it one, too.