Sunday, January 28, 2024

“Where there was fire” – Costa Rican novel

 "Where there was fire" is the first Costa Rican novel I have read. It is also the first novel written by John Manuel Arias, the Costa Rican author, published in 2023.



The novel brings out the life and situation in Costa Rica during the time of domination of American banana companies in the sixties. The companies exploit the workers and the country. Their use of chemicals to spray on the banana plants cause sterility among men. To hide this, the company's Gringo doctor falsifies medical records to show that the men were already sterile. He is foolish and arrogant enough to tell one of the worker Jose Maria that his two children might not be his own. The angry husband tries to kill his wife Teresa but murders his mother- in-law who fights back. Then he goes to the house of the Gringo doctor and sets it on fire. The doctor and the whole banana plantation as well as the arsonist are burnt and turned into ashes. 
 
Teresa runs away to US leaving her two kids Lyra and Carmen. The latter, who is traumatized after witnessing the murder of the grand mother and the burning of the plantation, commits suicide leaving her son as orphan. The boy is adopted by Lyra, the sister of Carmen. But she does not tell the kid about the tragedy till he becomes an adult. Lyra does not let her mother Teresa meet the grandson when she comes back from US. The boy comes to know just before Teresa dies of cancer.
 
The author has added many other fascinating typical Latino characters and sub plots in the novel. The three Marias, the spinster sisters who are involved in the life of Teresa family, are memorable with their quaint characteristics and playful dialogues. The author has added some magical realism which makes the novel more interesting and familiar for the fans of Gabriel Garcia Marquez.


Sunday, January 07, 2024

Latin America’s economic and political outlook in 2024

Latin America’s GDP growth in 2024 is projected at 1.8%, down from 2.1% in 2023, according to the annual December report of ECLAC (Economic Commission for Latin America and Caribbean). 

 

This lowering of growth is due to the general slow down of global growth and in particular the decline in Chinese growth and the fall in commodity prices exported by the region. The modest 4.2% of Chinese GDP growth in 2024 will impact particularly Chile, Panama, Peru, Brazil and Uruguay. China absorbs 39% of Chile’s goods exports, 32% of those of both Panama and Peru, and 27% of those of Brazil and Uruguay. Latin America’s exports of agro products and minerals and metals are projected to fetch less revenue in 2024 with the anticipated reduction in prices of these items by 4% and 2% respectively.




 

Brazil’s GDP is expected to grow by 1.6% (down from 3% in 2023), Mexico’s 2.5% (down from 3.6% in 2023), Colombia’s by 1.7% (up from 0.9% in 2023, Chile’s by 1.9% (up from 0.3% in 2023) and Peru’s by 2.4% (up from 0.1%). Central America’s GDP is expected to increase by 3.2%, down from 3.4% last year.

 

Surprisingly, Venezuela will have the highest growth among the major economies of the region with 4% (up from 3% in 2023). The country which had gone through historic economic crisis due to mismanagement and US sanctions in the last several years has now recovered. The US has recently loosened some sanctions on export of oil and investment of American and other foreign companies in Venezuelan oil production.

 

Unsurprisingly, Argentina will have a negative growth of 1% (better than the 2.5% contraction in 2023). It is the only country in the region to suffer economic contraction. All the other 18 countries will show positive growth. Poverty in Argentina increased from 21.5% in 2016 to 30.1% in 2022.The new President Javier Milei who took office in December 2023 has already started some reforms such as cutting down expenditure and privatization of public sector companies. He has postponed implementation of his radical proposals such as closure of the Central Bank and dollarization of the economy. In the coming months, there will be more economic and financial difficulties for the government and sufferings for the people. The country could recover next year.

 

Milei will cause some minor disruptions in the process of deepening of integration of Mercosur with his anti-Lula rhetoric. However he will not have accomplices for destabilization of the region as a whole with his anti-Left policies since all the other major powers such as Brazil, Mexico, Colombia, Chile and Venezuela are ruled by Leftist governments.

 

Latin America’s sovereign risk reached the level of 410 basis points in October 2023, as measured by the J. P. Morgan EMBI Global Diversified Index (EMBIGD) of emerging markets. This indicator measures the spread between interest rates on a country’s debt obligations and those of the United States, which are considered risk-free. The countries with the lowest sovereign risk index are Uruguay (about 90 basis points since the second half of the year), followed by Chile and Peru (both below 200 basis points). At the other extreme are countries with the highest credit risk namely Venezuela (15867), Argentina(2576) and Ecuador(1755) followed by Bolivia (1599)

 

Average inflation of the region was 5.2% in September 2023, down from 8.2% in September 2022. It has remained in single digit for the last two decades. Exceptions are Venezuela with inflation of 318% ( down from 138000 percent in 2018), Argentina 140% and Cuba 37%. The only other country with double digit inflation is Colombia 11%.


The region's ratio of gross external debt to GDP was 42% in September 2023. The region has relatively comfortable position of foreign exchange reserves with 860 billion dollars. But Argentina, Venezuela and Cuba have acute shortage of forex reserves.

 

Average lending rate (Q3 of 2023) was the highest in Argentina at 108%, followed by Venezuela at 48.6%, Brazil (42%) and Mexico at 32%.

 

In 2024 there will be presidential elections in Mexico, El Salvador, Panama, Dominican Republic, Uruguay and Venezuela. However, these will not bring out any dangers such as Bolsonaro or drastic changes and challenges.

 

In the Mexican elections in June, the current president Lopez Obrador’s protégé Claudia Sheinbaum is leading in the opinion polls and expected to win and continue the policies of the current government with more pragmatism but without the eccentricities of Obrador. In El Salvador, the Cool Dictator Nayib Bukele is expected to win in the June elections. He has consistently high popularity ratings with his successful containment of crimes and murders. The popular incumbent President Luis Abinader of Dominican Republic is poised to get a second term in the June elections. The elections in Panama and Uruguay are open but there is no polarizing radicals among the leading candidates. President Maduro will ensure his reelection by hook or crook in the last quarter of the year. He and his top political and military leadership have no other option. They cannot afford to let power pass to the hands of the opposition. The US government has announced (in 2020) a bounty of 15 million dollars on the head of president Maduro and several million dollars on other political leaders of Venezuela on trumped charges of drug trafficking and other crimes. So Maduro and other top leaders will certainly be killed or deported to US prisons immediately.  If Maduro is reelected, the US will make some pro forma noises about rigged elections but will get on with its resumption of business with Venezuela. The US will not repeat its regime change policy, after having failed miserably in the last several years.

 

Latin America will continue to be a large market for India’s trade and investment in 2024 and in the coming years and decades. India’s exports to the region were 22.5 billion dollars in the financial year April 2022-March 2023. Indian companies have invested around 12 billion dollars in the region. The region is contributing to India’s energy and food security with supply of crude oil, edible oil, pulses and fresh fruits. India is exploring opportunities in the region for mining and production of Lithium, needed for electrification of vehicles. India will continue to source copper, gold and other minerals from Latin America which has abundant reserves of them.

 

In 2024, India will deepen its engagement with Latin America and work closely with Brazil, the current president of G-20. Argentine President Milei has switched teams. He will play for Team USA while his predecessors played in BRICS and Global South teams. But this will not make any difference to India or BRICS since Argentina is completely mired in the economic crisis from which it will take time to get out.