Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: Bernardo Arévalo is inaugurated as Guatemala’s new president, Argentina’s Javier Milei makes his Davos debut, and why Brazil’s Spotify Wrapped is a regional outlier.
Planting a Seed
Around one year after opponents of Brazilian President Luiz Inácio Lula da Silva stormed the country’s capital complex, Latin America experienced another tumultuous inauguration this week. In Guatemala on Sunday, the presidential swearing-in ceremony of progressive Bernardo Arévalo was delayed for nine hours as conservative legislators refused to take the procedural steps necessary to allow the event to move forward.
The inauguration finally occurred just after midnight on Monday after lawmakers allowed Guatemala’s Congress to elect a new president from Arévalo’s party, who then initiated the proceedings. It was a victorious moment for Arévalo as well as the 61 percent of Guatemalan voters who backed him and his Seed Movement party in a runoff vote last August. Arévalo was greeted by cheers from thousands of supporters who had gathered to celebrate his swearing-in at a Guatemala City plaza.
Since Arévalo’s surprise election victory, Guatemala’s economic and political elites have sought to block Arévalo and Seed Movement legislators from taking office. Legal challenges—roundly denounced by international observers as political obstruction—marred Guatemala’s presidential transition period and were arguably only kept at bay by grassroots nationwide protests and concerted international pressure.
Many of those lawsuits are still ongoing, suggesting elite obstruction will also be a major feature of Arévalo’s administration. The new president’s most active opponents included state prosecutors and even Guatemala’s attorney general.
In an editorial this week, Guatemalan news outlet Plaza Pública compared Arévalo’s inauguration to “a crack in the implacable wall that was diligently built by the criminal alliance that holds considerable economic and political power” in the country.
A network of Guatemalan economic and political elites successfully disenfranchised many anti-corruption actors in recent years, including a United Nations-backed anti-corruption commission that carried out a series of high-profile probes. In 2017, then-President Jimmy Morales himself fell under investigation and moved to limit the commission’s capabilities, eventually shutting it down.
Since then, anti-corruption prosecutors and independent media have faced a barrage of legal threats, and many have left the country. V-Dem, one of the world’s most respected indexes on the quality of democracy, significantly downgraded Guatemala’s indicators in that timeframe.
Arévalo’s supporters say they hope to bring about a democratic transition in the country—in part by installing prosecutors and judges with records of integrity. Arévalo also seeks to promote job creation and provide more state resources to Indigenous communities.
But because the wall of Guatemalan elites remains robust, the grassroots street mobilization and international support that ensured Arévalo could take office will likely need to continue for him to be able to govern. A slew of foreign envoys, including European, Latin American, and U.S. officials, were present at his inauguration. They pledged to continue backing his agenda.
On Wednesday, the Seed Movement’s battle for legitimacy faced new hurdles. Guatemala’s top court ruled that the party’s legislators should be classified as independents in Congress due to a previous lawsuit against the party alleging that it was improperly registered. It also decreed that the congressional leadership election must be redone. Meanwhile, the United States announced a visa ban against former President Alejandro Giammattei, accusing him of taking bribes while in office. Giammattei is a member of the country’s old elite.
While the legal tussles in Guatemala can be hard to keep up with, they prove that strengthening democracy is possible—even in the face of steadfast opposition.
Upcoming events
Friday, Jan. 19: Chinese Foreign Minister Wang Yi concludes a two-day visit to Brazil.
Mexican Foreign Secretary Alicia Bárcena holds talks on migration with U.S. Secretary of State Antony Blinken.
Thursday, Jan. 25: The U.N. Security Council discusses Haiti.
What We’re Following
Cushions against instability. The proliferation of Chinese currency in some Latin American economies appears to have helped them survive post-pandemic interest rate hikes by the U.S. Federal Reserve, a Canadian investor and chair of the Canadian Council for the Americas (CAA) argued at an event last week.
In 2023, economic commentators celebrated that central banks in many of Latin America’s large economies successfully stamped out post-pandemic inflation, in part by raising their interest rates higher and faster than the Fed. Latin America’s major hikes began in 2021, rather than on the Fed’s 2022 schedule. Prudent management by the Latin American central bankers helps explain how they avoided some of the negative effects of U.S. rate hikes that have hit the region in the past. Those include currency instability and capital flight.
But investor and CAA chair Jonathan Hausman proffered an additional explanation at the council’s annual outlook event last week: The fact that Latin American economies now trade and borrow more in non-dollar currencies, specifically the Chinese renminbi, made them more insulated from dollar-related risks.
After the Fed’s recent rate hikes, “we would all expect that a country like Brazil would be flat on its back. Not one large [emerging market] in LatAm got even close to financial trouble. I’m putting aside Argentina because it’s special,” he said. “The tyranny of the dollar, if you will, has been lifted.”
Weighing in on Gaza. As South Africa’s petition accusing Israel of committing genocide in Gaza moves forward at the International Court of Justice (ICJ), several Latin American countries have voiced their support for Pretoria. The leaders of Brazil, Colombia, Cuba, Nicaragua, Bolivia and Venezuela endorsed the petition.
Chile and Mexico, meanwhile, on Thursday requested that the International Criminal Court open an investigation into “the situation in the state of Palestine,” including Hamas’s attacks and “subsequent hostilities in Gaza.” Guatemala—which in 2017 followed the United States in moving its embassy in Israel to Jerusalem—said it rejected South Africa’s lawsuit at the ICJ.
The balance of Latin American positions tracks broadly with countries elsewhere in the global south, which, as FP’s Nosmot Gbadamosi wrote in this week’s Africa Brief, tend to back Pretoria’s case.
Anitta performs onstage during TikTok: In the Mix at Sloan Park in Mesa, Arizona, on Dec. 10, 2023.Rich Fury/Getty Images for TikTok
The streaming divide. Spotify’s lists of most listened-to artists in 2023 reveal a divide in Latin American pop music: Of the 150 most heard artists on Spotify Brazil, none sing in Spanish. (A handful, such as Taylor Swift, sing in English.) Linguistic difference plays a major role, El País reported, but that’s not the whole story. Brazil’s own musical landscape is so large, with multiple subgenres, that it also exists—to some degree—as a world of its own.
While many fans of Spanish-language music listen to reggaetón, Brazil has its own equivalent genre, Brazilian funk. “It’s the same niche,” Analía Chernavsky of Brazil’s Federal University of Latin American Integration told El País.
Brazil’s Anitta is a very rare crossover artist who performs in Portuguese and Spanish, amassing fans in both languages. She has spoken openly about how she learned to sing in Spanish to jump into global markets.
Question of the Week
Brazil’s most streamed artist of 2023 on Spotify was from a Brazilian genre akin to country western. The name of the genre comes from the Portuguese word for a dry, scrubby hinterland. What is it?
Brazil’s scrubland is the sertão; the popular sertanejo artist is Ana Castela.
FP’s Most Read This Week
- U.S. Middle East Policy Has Failed by Jon Hoffman
- India Is the Latest Member of a Growing Assassination Club by Justin Ling
- America Is a Heartbeat Away From a War It Could Lose by A. Wess Mitchell
In Focus: Milei’s Davos Debut
Argentine President Javier Milei is surrounded by media after delivering a speech at the World Economic Forum in Davos, Switzerland, on Jan. 17.Fabrice Coffrini/AFP via Getty Images
Last year at the World Economic Forum in Davos, Switzerland, officials from newly inaugurated left-wing administrations in Brazil and Colombia sought to charm a pro-business audience of elites. This year, the new Latin American leader in the spotlight is Argentine President Javier Milei, a libertarian who took office last December. Milei traveled to Davos to try to woo investors and to meet with officials from the International Monetary Fund (IMF). Buenos Aires owes the IMF more than $30 billion.
Ideologically, Milei is a better fit for the Davos audience than the Lula and Petro administrations were last year. In remarks delivered Wednesday, Milei’s descriptions of plans to dramatically slash red tape and public spending in Argentina won praise from bankers and IMF officials. Historian Niall Ferguson called Milei’s presentation “a magnificent defense of individual liberty and the free market economy.”
But his speech was not a home run. Echoing dramatic rhetoric often employed by former Brazilian President Jair Bolsonaro and right-wing U.S. political strategist Steve Bannon, Milei claimed that a socialist worldview is putting the West in “danger.” He also criticized “radical feminism” and said an environmentalist agenda is “cruel.” Gender equality and environmental stewardship are values typically celebrated at the World Economic Forum.
After Milei delivered his prescription for saving Argentina, a La Nación reporter at the conference noted that some in the audience were decidedly unimpressed but preferred not to be quoted by name. “Bizarre. With him, you’re not saving anyone,” a British businessman told the Argentine daily.
Milei’s plans for Argentina pleased the IMF enough that it announced a preliminary deal last week to release $3.3 billion in previously delayed loan disbursements to the country—as well as an additional $1.4 billion ahead of schedule.
Buenos Aires and the IMF also announced a goal of carrying out spending cuts and tax increases that are worth a combined roughly 5 percent of Argentina’s GDP. Argentine economist Juan Manuel Telechea estimated last November that cuts of that size those could include drawbacks in energy and transportation subsidies, government personnel, transfers to local governments, and public investment.
The most dramatic spending cuts in Argentina this century occurred under center-right President Mauricio Macri, who governed from 2015 to 2019 and in 2018 agreed to a three-year IMF loan program that required Argentina to cut its deficit down from 3.8 percent of GDP in 2017 to 1.3 percent in 2019. He was voted out after one term. Milei has tried to temper the public’s expectations by acknowledging that his policies will cause suffering before they bring stability.