Chavismo Wins a Battle But the Tide May Have Turned

By Eric Hershberg

Inauguration of Nicolás Maduro | Photo credit: Presidencia de la República del Ecuador / Foter.com / CC BY-NC-SA

Inauguration of Nicolás Maduro | Photo credit: Presidencia de la República del Ecuador / Foter.com / CC BY-NC-SA

President Nicolás Maduro’s inauguration last Friday marked a new stage in the contest between chavistas and the Venezuelan opposition.  Maduro’s surprisingly weak showing at the polls – winning by a meager 1.8 percent margin despite the huge (and abused) advantages of incumbency – plus tensions within his party and his own rhetorical excesses, suggest that chavismo without Chávez confronts challenging odds.  Chávez attracted more votes alive than he could in death, as his hand-picked successor could not match his patron’s appeal at the ballot box.  Looking forward, Maduro and the Partido Unido Socialista de Venezuela (PSUV) will be judged on the basis of their performance.  The road ahead will not be easy for Maduro, as the government  confronts growing economic and security problems, and his ineffective campaign may energize potential competitors from within Chavismo.

Henrique Capriles’s strong showing in the election bodes well for the opposition.  However, athough Maduro’s blanket reference to them as “fascists” is absurd, their apparent eagerness to use the vote recount – reluctantly agreed to by the electoral council hours before Maduro’s inauguration – to remove him from office could breathe life into his allegation that the opposition consists of  golpistas obsessed with taking power.  Overreaching could be their undoing, as it has been in the past.

Latin American presidents, through a UNASUR statement of support and participation in the inauguration, have endorsed Maduro’s ascendance to the Presidency.  Their strong interest, for a variety of reasons, is in a balance between continuity and change in Venezuela. Although there are signs that both Chile and Colombia wavered momentarily, South American governments overall were united in their preference for a chavista government, as this would favor both  internal and regional stability.The United States, on the other hand, has appeared timid.  Maduro’s accusations of U.S. attacks on him and the presence of Iranian leader Ahmadinejad at the inauguration made it impossible for Washington to send a senior emissary to the swearing-in.  Yet the evident absence of the United States, even after the UNASUR endorsement, was petty.  Through statements calling for a recount of 100 percent of the votes both the State Department and the U.S. Ambassador to the United Nations came across as unable to outgrow a grudge match with Chávez or to grasp that the American position would isolate Washington once again from prevailing sentiment in South America.

There were two winners in the Venezuelan election:  Maduro, who is now the elected President, and Capriles, who managed to secure nearly half the votes in the face of overwhelming odds.  The latter comes out ahead in the long run, but only if he manages his cards wisely.  Washington, meanwhile, seems still not to understand two things:  First, after Bush v. Gore, it will be at least another generation until Americans can say anything about how to count votes.  It was legitimate and appropriate for the OAS to demand a recount, as its record in election monitoring is impeccable.  Secretary General Insulza achieved the core objective of the Organization and should be recognized for having done so.  For the American government to have taken the position that it did suggests an inability to understand the consequences of the 2000 election in Florida for its credibility in election-related issues in the region.  Second, democratic change in Latin America is typically an evolutionary process.  This may be less satisfying to some policymakers who would prefer to see a foe’s outright defeat, but it may be better, for Chavismo’s enemies in both Washington and Caracas, than having their favorite step in at this particular time of high tensions.  If Capriles and his coalition can brand themselves as democratic reformists rather than golpistas, they have a good chance of coming to power when Maduro’s six-year term is exhausted, or even before, and if they convey a message of responsible opposition, key South American governments might well approve of an alternation in power the next time around.

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by clalsstaff on April 23, 2013  •  Permalink
Posted in South America, Venezuela
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Posted by clalsstaff on April 23, 2013

https://aulablog.net/2013/04/23/chavismo-wins-a-battle-but-the-tide-may-have-turned/

What Can Be Learned from the Humala Government?

By Rob Albro

President Humala inaugurating electric power in the rural district of Moro - Ancash Photo credit: Presidencia Perú / Foter.com / CC BY-NC-SA

President Humala inaugurating electric power in the rural district of Moro – Ancash Photo credit: Presidencia Perú / Foter.com / CC BY-NC-SA

As a candidate in Peru’s 2006 presidential election, one-time military coup plotter and current president Ollanta Humala presented himself as an anti-business socialist and nationalist happy to be a member of the “family” of left-leaning Latin American governments led by Venezuela’s Hugo Chávez.  In his second successful bid for office in 2011, Humala sharply changed direction and embraced a combination of pro-business and anti-poverty measures reminiscent of Brazil’s center-left Lula.  Humala’s shifts are a sign of the times in the Andean region:  a non-ideological search for how best to build democracies and grow national economies, while effectively redistributing wealth.

Driven by its mining sector and a commodity export boom, Peru’s economy has tripled in size over the past decade and is currently one of the best performing in the world.  Foreign investment is flooding in, particularly to mining, hydrocarbons, and big infrastructure projects – and Humala is now considered an “investor darling.”  While backing off electoral promises to nationalize water, electricity, mining and other sectors, Humala has created a new Ministry of Development and Social Inclusion and increased the budget for social redistribution and welfare measures to Peru’s poorest by 50 percent.  So far Humala has channeled the budget surplus of Peru’s export boom, including successful negotiation of a $1.1 billion increase in mining royalties in 2011, toward reducing the nation’s poverty rate by 29 percent.  And yet, at present there are more than 250 ongoing social conflicts in Peru, and Humala’s government has been accused of failures of “consultation,” often by grassroots and indigenous protestors opposed to Peru’s mining policies.  In response Humala has reshuffled his cabinet multiple times.  Skeptics suggest that his approval rating – currently 60% – will last only as long as the boom enables his top-down social spending.

Humala’s presidency suggests the limits of viewing current regional leaders through a comparative Chávez-or-Lula lens.  Arguments over the best conditions for “foreign direct investment” in the region often miss the different conditions under which it occurs or purposes to which it might be put.  Humala’s pragmatism demonstrates how distinct parts of government need not reflect a single unifying ideological or normative idée fixe.  Liberal democratic institutions and market freedoms increasingly coexist alongside alternative policies of social redistribution as a part of democratic enfranchisement in the Andes.  When conflict has broken out, however, Humala’s government has been willing to forego consultation with local communities to insure the economic resources it needs to continue its redistributive policies.  The challenge for him to achieve the best balance between competing democratic priorities will continue.  Humala’s government is an opportunity to explore new democratic institutions in Latin America, as with a recent CLALS research project on participatory democracy. 

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by clalsstaff on April 19, 2013  •  Permalink
Posted in Peru
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Posted by clalsstaff on April 19, 2013

https://aulablog.net/2013/04/19/what-can-be-learned-from-the-humala-government/

Will Tensions Over Security Spoil the Obama-Peña Nieto Summit?

By Tom Long

Military in D.F. Photo credit: ·júbilo·haku· / Foter.com / CC BY-NC-ND

Military in D.F. Photo credit: ·júbilo·haku· / Foter.com / CC BY-NC-ND

The meeting in December between recently re-elected President Barack Obama and President-elect Enrique Peña Nieto was marked by cordiality and a desire to talk about anything but the often grisly drug-related violence in Mexico during the previous six years.  Since then, Peña Nieto has continued the changed emphasis, aided by headlines pivoting to positive stories.  Mexico has been recently hailed for its economic growth, particularly in export-oriented manufacturing, and for a series of political compromises that The Washington Post favorably compared with the U.S. Congressional stalemate.  Despite optimistic claims from the government, Mexican media reports indicate that drug-related violence continues at nearly the same pace as last year.  (Click here for a summary and analysis by our colleagues at InSight Crime.)  Moreover, pressure is growing on questions of human rights violations committed in the name of the war on drugs.  When Presidents Peña Nieto and Obama meet again in early May, holding back a renewed focus on security is likely to be a challenge.

Peña Nieto’s political incentives do not point to the same, high-profile cooperation with the United States that occurred under President Felipe Calderón, who had already begun shifting priorities last year.  Despite the major turnaround signified by the PRI’s signing NAFTA almost 20 years ago, Peña Nieto’s PRI still contains elements more skeptical of U.S. “intervention” than Calderón’s PAN.  Materially, moreover, most of the U.S. aid planned under the Mérida Initiative has been disbursed, and Congress exhibits little appetite for major new appropriations.  (Even at its height, U.S. spending was a fraction of Mexico’s contribution to the drug war.)  That reduction, coupled with growing awareness that the Calderón strategy actually fueled violence, diminishes the enthusiasm in and outside of government for continuing his policies.   Frustration from the left in both countries regarding persisting human rights violations and the slow pace of judicial reform could also grow more serious.

While these problems may be causing tensions between U.S. and Mexican police and military at the operational level, they seem to be manageable so far – and both Presidents are likely to emphasize intelligence-sharing and similar bilateral cooperation that does not require resources.  Upper echelons of the Obama administration seem to understand that Peña Nieto’s push to de-emphasize security and promise to focus on violence reduction over drug interdiction is politically necessary.  But the moral argument has not changed:  Mexicans suffer the violent consequences spawned by U.S. drug use and counterdrug policies.  Weapons sold on the U.S. side of the border continue to flow into Mexico, an issue now atop the U.S. political agenda for entirely domestic reasons.  If the two countries can manage to keep security problems at a lower decibel, they will better cooperate on issues that are just as vital but could pay larger dividends — immigration, transboundary energy, educational exchange, and infrastructure.

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by clalsstaff on April 16, 2013  •  Permalink
Posted in Mexico, United States
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Posted by clalsstaff on April 16, 2013

https://aulablog.net/2013/04/16/will-tensions-over-security-spoil-the-obama-pena-nieto-summit/

The Danger of Dependence: Cuba’s Foreign Policy After Chávez

By William M. LeoGrande, World Politics Review

Photo credit: ¡Que comunismo! / Foter.com / CC BY-NC-SA

Photo credit: ¡Que comunismo! / Foter.com / CC BY-NC-SA

On March 8 in Caracas, Raúl Castro, looking somber, stood in a place of honor beside Hugo Chávez’s casket during the late Venezuelan president’s state funeral. Castro was no doubt pondering what Chávez’s death means for Cuba’s ambitious economic reform program — or “updating” of the economic model, as Cubans prefer to call it. Not long after Chávez’s first election victory in 1998, he and Fidel Castro signed the first of what would become more than 100 bilateral cooperation agreements. By the time Chávez died, Venezuela was providing Cuba with some 110,000 barrels of oil daily at subsidized prices, worth $4 billion annually and representing two-thirds of Cuba’s domestic oil consumption. In exchange, Cuba provided some 40,000 skilled professionals, working mostly in health, enabling Chávez to extend health care into the poor barrios of Venezuela, thereby solidifying his political base.

With the Venezuelan economy foundering under a huge fiscal deficit, will Chávez’s successor continue this barter arrangement on the same preferential terms? If not, will the resulting oil shock derail Raúl Castro’s plan to move Cuba from a hyper-centralized planned economy, which even its architect Fidel Castro admitted no longer works, to a socialist market economy modeled on Vietnam and China?

Full article available on the World Politics Review site.

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by clalsstaff on April 15, 2013  •  Permalink
Posted in Cuba, Venezuela
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Posted by clalsstaff on April 15, 2013

https://aulablog.net/2013/04/15/the-danger-of-dependence-cubas-foreign-policy-after-chavez/

Obama’s Second Trip to Central America

SICA logo | Wikimedia Commons | GNU Free Documentation License

SICA logo | Wikimedia Commons | GNU Free Documentation License

The White House has cast President Obama’s trip to Mexico and Central America on May 2-4 as “an opportunity for the President to demonstrate his leadership in the international community in a really important way.”  The spokesman emphasized the “important people-to-people ties” between the United States and Central America because “there are a lot of immigrants” from the region.  The Administration’s press releases stress that the summit in San José, with the presidents of the Central American countries and the Dominican Republic under the rubric of the Central American Integration System (SICA), will focus on collective efforts to promote economic growth and development in the region and on “our ongoing collaboration on citizen security.”

Regional reaction to the visit and summit has been positive – Obama’s interest is clearly welcome – but leaders are already managing expectations.  Costa Rican Foreign Minister Castillo last weekend cautioned that the United States is not able to provide significant new assistance for either economic or security programs.  Commentators note that the visit has not been preceded by the sort of diplomatic activity that would indicate the rollout of significant new policies or programs.

At a summit in Guatemala with Vice President Biden one year ago, Costa Rican President Chinchilla crystalized regional criticism of the U.S. counternarcotics strategy when she said that Central America “is sacrificing the lives, making its enormous sacrifice” and, in a clear reference to Washington, called on the “international community [to] take greater co-responsibility in this struggle.”  Hosting the SICA summit with Obama suggests she is prepared to put such criticism aside, perhaps in hopes that talks focus on the economic and immigration issues.  The White House spokesman’s reference to immigrants – at a time that Obama is pushing ahead with related legislation – may indicate that immigration will be a primary concern for him also.  The last time Obama went to Latin America, for the Summit of the Americas in Cartagena in April 2012, he seemed ill-prepared for criticism of U.S. policies, including its counternarcotics strategy, even from Washington’s closest friends.  With perhaps the exception of Nicaraguan President Ortega, the participants in this Central American get-together seem less likely to deliver a similar grilling, making what diplomats call a “successful meeting” very likely.

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by clalsstaff on April 11, 2013  •  Permalink
Posted in Central America, United States
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Posted by clalsstaff on April 11, 2013

https://aulablog.net/2013/04/11/obamas-second-trip-to-central-america/

Mexico-Brazil: Competing Economic Models?

The divergent economic performances of Mexico and Brazil over the past few years have again thrust upon analysts the difficult task of estimating which factors – public policies, market trends, geographic location, financial market managers’ perceptions, or something else – are responsible for the different results.  Brazil was everyone’s favorite two years ago, but Mexico is now being hailed as the hot performer – and praise is being heaped on Mexico City for making things happen.

Former Chilean Finance Minister Andrés Velasco, writing for Project Syndicate (click here for text), explores why the Brazilian economy today is “stagnating” while Mexico, written off as a “lost cause” just two years ago, is “expanding at a steady clip.”   Among Velasco’s key points:

  • Financial markets’ behavior says more about investor perceptions than about the countries in question.  Analysts focus on short-term figures rather than on structural trends.
  • Mexico’s economy is much more open than Brazil’s because of NAFTA and other agreements with Europe and Asia, while Brazil’s is limited by the “strictures of Mercosur.”  (Velasco was a strong advocate of free-trade policies while serving on President Bachelet’s cabinet.)  Mexico’s “export basket” has expanded dramatically – to include car parts, electronics, telecommunications equipment – while Brazil’s exports are increasingly commodity-based.
  • After both implemented anti-crisis fiscal packages in 2009, Velasco praises Mexico for having reduced its stimulus sooner – enabling it to keep interest rates much lower, controlling inflation better, and thereby contributing to a more robust private-sector role.

At the same time, Velasco urges wariness “about jumping to definitive conclusions” and notes that Mexican exports have been slowing in recent months, while domestic consumption is picking up as a source of demand.  He also cautions that Brazil’s potential to sell its products around the world “should not be underestimated.”

However thoughtful, analyses like Velasco’s may neglect the impact of another long-term factor:  the steady rise in wages in Brazil and their stagnation in Mexico.  At a seminar in Washington hosted by CLALS last week, Mexican economist Luis Felipe López Calva (click here for news article) noted that the strength of the middle class continues to be a vulnerability in Latin America, and he said that the ability of the middle class to be a “lever of growth” argued for policies that emphasized economic mobility.  A thriving middle class and increased domestic consumption can be a more reliable engine for growth (and for the consolidation of democratic institutions necessary for growth) than short-term market trends.  The increasing wellbeing of the bottom two thirds of the income distribution pyramid in Brazil argues for tempering optimism that Mexico alone has found the holy grail of economic policies. 

What do you think?  Click on “leave a comment” below to contribute.

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by clalsstaff on April 8, 2013  •  Permalink
Posted in Brazil, Mexico
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Posted by clalsstaff on April 8, 2013

https://aulablog.net/2013/04/08/mexico-brazil-competing-economic-models/

Is the Truth Finally Arriving in El Salvador?

By Héctor Silva Ávalos

Memorial of massacre site at El Mozote, Morazan, El Salvador | By Efrojas | Wikimedia Commons | public domain

Memorial of massacre site at El Mozote, Morazan, El Salvador | By Efrojas | Wikimedia Commons | public domain

A U.S. court is on the verge of making a major contribution to El Salvador’s struggle to end impunity.  A former Salvadoran military commander six weeks ago admitted in a Miami immigration court that his troops had engaged in human rights violations and extrajudicial killings in the 1980s.  More significantly, he confirmed that the U.S.-trained and -funded Atlacatl Battalion was responsible for the horrendous massacre at El Mozote, a hamlet in which the elite Marine-style battalion killed an estimated one thousand peasants, mostly women and children, over three days in December 1981.  Until recently, current and former military commanders claimed that reports of the bloodbath were communist propaganda.  In his defense, General José Guillermo García, who was defense minister, said he was unaware of the soldiers’ actions at the time.  The judge responded skeptically, saying García “didn’t do what a military officer respectful of the law should have done in order to fully serve his country and his people.”

The General’s confession is no small matter.  An Amnesty Law passed in 1993, pushed by allies of the war-era government, put the lid on many investigations.  Its passage kept two mid-ranking officers convicted of involvement in the 1989 Jesuit massacre from serving their prison sentences, and it paved the way for other military and civilian leaders to cover up that atrocity. The air of impunity has endured for 20 years.  General García’s testimony provides the first real open window for Salvadorans to start learning about what happened despite strong efforts to keep the truth under wraps.  The political and economic elites’ defense of the Amnesty Law has focused on the argument that El Salvador should not be confronting its past if it really wants reconciliation and peace.  But two decades after the peace accord brought the end of the war, that kind of thinking is beginning to fade, and will continue to wane as Salvadoran society is confronted with the naked truth, the naked horrors.

The Obama Administration deserves some credit for advancing the legal case against García and a former colonel facing similar immigration charges in Boston, Inocente Orlando Montano.  Both processes have been encouraged by a U.S. policy of locating and ousting foreigners on U.S. soil who have been credibly accused of human rights violations abroad.  However ironic it is that some of the violations were committed by units receiving U.S. assistance, Washington is promoting an important lesson:  generals who once held in their hands power over citizens’ lives and deaths become common defendants – criminals – when the truth is known.  The impunity enjoyed by the colonels and generals – and their civilian sponsors – has grown roots in Salvadoran institutions and still feeds today a culture of obscurity, injustice and inequity that prevents the country’s progress towards development and modernity.  This vicious cycle will not will not end until they are held accountable.

Read the full text of this essay.

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by clalsstaff on April 5, 2013  •  Permalink
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Posted by clalsstaff on April 5, 2013

https://aulablog.net/2013/04/05/is-the-truth-finally-arriving-in-el-salvador/

Malvinas-Falklands: Just More Demagoguery

Photo credit: blmurch / Foter.com / CC BY

Photo credit: blmurch / Foter.com / CC BY

The UK’s recent referendum in the Malvinas-Falklands suggests that neither side in the dispute is serious about finding a lasting solution.  Few observers were surprised that the overwhelming majority of the islands’ residents – all but three of the 1,517 persons casting ballots – would vote to “retain their current political status as an Overseas Territory of the United Kingdom.”  Since the war in 1982, London’s decision to station 8,000 troops (more than four times the local population) and decentralization of control over fisheries have enabled islanders to enjoy one of the hemisphere’s highest standards of living.  The UK government has encouraged a blossoming of British identity on the islands.

British and Argentine political leaders couldn’t resist the opportunity to demagogue the results of the referendum.  Prime Minister David Cameron said the islanders are “British through and through and that is how they want to stay,” and he warned that Argentina should take “careful note” because “we will always be there to defend them.”  In a series of 27 tweets in two hours, President Cristina Fernández de Kirchner ridiculed the referendum.  “An English territory more than 12,000 kilometers away?” she asked.  “The question is not even worthy of a kindergarten of three-year-olds.”  She called the residents of the islands a “transplanted population.”  Foreign Minister Hector Timmerman threatened legal action against firms helping explore for oil around the islands, and both houses of the Argentine Congress voted unanimously to condemn the referendum.  Washington has stayed on the sidelines despite its strategic alliance with London and tensions with Buenos Aires.

Both countries have changed greatly since 1982, and the chance that the rhetoric will escalate into greater tensions seems remote.  But nationalism, symbolism and opportunism continue to dominate the Malvinas-Falklands issue 30 years after a war and in the second decade of a new century.  With their economies in bad shape, the current governments in both London and Buenos Aires may welcome the international distraction.  The prospect of rich offshore oil deposits around the islands has raised the stakes, with both countries accusing the other of wanting the islands merely for their natural resources.  Argentina, moreover, seems intent on pushing its neighbors into supporting its stance on the islands, exposing them to the contradiction between the two important principles at play – a historical claim of sovereignty versus a current referendum of clear popular will rejecting it.  Of the two corners that the UK and Argentina have painted themselves into, Argentina’s is more complex and will require a more patient, long-term approach involving, perhaps, United Nations mediation.  Kirchner has expressed hope that the new Pope could act as a mediator in the Falklands-Malvinas dispute, yet his Argentine nationality and past comments that the islands belong to Argentina make that implausible.  It is clear that putting the issue on the front burner and trying to drag the rest of the continent into the debate has not served Buenos Aires’ interests well.  The UK’s referendum is unhelpful, but President Kirchner still has room to tone down the rhetoric and threats, and avoid letting a tactical setback lead to a strategic blunder.  Chances of that happening are better under her successor, and the next election isn’t until 2015.

 

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by clalsstaff on April 1, 2013  •  Permalink
Posted in Argentina, Europe

Posted by clalsstaff on April 1, 2013

https://aulablog.net/2013/04/01/malvinas-falklands-just-more-demagoguery/

South America and the United States after Chávez

By Tom Long

Banco del Sur | Photo by: Presidencia de la N. Argentina | Foter.com | CC BY

Banco del Sur | Photo by: Presidencia de la N. Argentina | Foter.com | CC BY

In many depictions, South America’s relations with the United States have been structured around Hugo Chávez for much of the last decade.  So it is natural for the region to wonder where U.S. policy will head now that he is gone.  In the Bush Administration’s framework – which the Obama Administration has largely continued – Chávez and his closest allies in Ecuador, Bolivia, and Argentina were an emerging anti-American axis.  Colombia and Chile were considered Washington’s last bastions of support, and Brazil under Presidents Lula and Dilma variously positioned itself as a quiet moderator or, on occasion, private fan of the estrangement between the unruly ALBA countries and the United States.  With Chávez’s passing, the narrative will change.

Although Chávez’s charisma, boundless energy, seductive regional pride, and resumption of Venezuela’s traditional oil subsidies made him larger than life, the depth and endurance of his influence was exaggerated by friends and foes alike.  Elements of his vision of a “Bolivarian” Latin America united in resisting U.S. influence have always been present and always will be, but the dynamic Chávez sought, with himself at its center, seems likely to fade fast.  Bolivia’s President Morales was the closest to being a protégé, but even he has been compelled by domestic politics to give priority to relations with Washington. Ecuador’s President Correa was never as close to Chávez and largely steered his own independent course. Chavez’s detractors had tired of using him as a foil as well.  For years no Latin American leader had found tangling with Caracas – thereby giving Chávez the attention he craved – to be worthwhile.  Since Álvaro Uribe’s departure, even Colombia, apparently taking a cue from the oil-hungry United States, has made trade a bigger priority than criticizing its erratic neighbor.  Many high-profile Venezuelan initiatives for the continent, such as the Banco del Sur, fizzled.  Despite Chávez’s role in their founding, even UNASUR and CELAC had grown away from his personal leadership.

Concerns in Washington that someone will take Chávez’s place as counterweight to U.S. influence seem at least five years out of date.  There is no candidate with both the desire and ability to assume Chávez’s mantle.  Just as the benefits of close cooperation with the United States have declined, most leaders have little to gain from overt conflict.  South American international relations have already grown considerably more complex, as countries developed their own responses to Chávez without taking orders from either Washington or Caracas.  The trend of increasing autonomy is natural and, in ways, inevitable – even though it may be irksome to some in Washington, who are skeptical of Latin Americans’ commitment to what Washington thinks should be a shared interpretation of democracy, trade and counternarcotics policy.

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by clalsstaff on March 28, 2013  •  Permalink
Posted in South America, United States, Venezuela
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Posted by clalsstaff on March 28, 2013

https://aulablog.net/2013/03/28/south-america-and-the-united-states-after-chavez/

The TecnoLatinas: A Start-Up Revolution

Foro de Ahorro de Energía Eléctrica, México | Photo credit: Alejandro Castro | Foter.com | CC BY-NC-SA

Foro de Ahorro de Energía Eléctrica, México | Photo credit: Alejandro Castro | Foter.com | CC BY-NC-SA

Latin America is experiencing a full-fledged start-up movement amid rapid growth of an innovation and information economy.  Over the last several years the region’s online population has grown faster than in any other part of the world – with approximately 255 million internet users as of last year.  Half of the top 10 markets worldwide, ranked by time spent on Facebook and other social media, are in Latin America.  Clusters of innovation start-ups, such as those around Monterrey, Mexico, are springing up with astonishing speed.  In 2012 Mexico was among the largest exporters of information technology services in the world.  Google is currently building a data center in Chile, while Amazon Web Services opened a data center in Sao Paolo last December.  But these are not information-era maquiladoras. Instead, Latin American entrepreneurs are combining the availability of open-source innovation tools and the emergence of cloud computing with effective bridge building in Silicon Valley to bring collaboration, expertise, and capital to their home markets.

  • Latin America offers multiple advantages for tech start-ups: a low cost of development, an educated and growing talent pool with the necessary technical and entrepreneurial skills, and increasingly available and affordable broadband and internet access.
  • In particular, Mexico, Chile, Brazil, Argentina, and Colombia, along with metropolitan areas across the region, are incentivizing the development of a competitive start-up ecosystem – an advantage attracting a growing number of “angel investors.”
  • Start-Up Chile, a national program begun in 2010 with 22 start-ups from 14 countries, offers seed capital, grants, tax protection, space, mentoring, and networking to “accelerate” promising ventures.  Its most recent competition drew 1421 applicants from 60 countries, including from Singapore, London, and San Francisco.

The lack of tech innovation and incentives for start-ups has been an Achilles’ heel of Latin American economies for decades.  If the start-up trend continues, the region could make significant, lasting progress toward narrowing the sizable gap between itself and the most dynamic developing countries, mostly in Asia.  Latin America’s start-up movement is both top-down and bottom-up, with a tech-savvy generation of entrepreneurs not afraid to take risks and to leverage government support, as part of a collaborative business model built on multiple ties to Silicon Valley.  A core challenge will be whether these initiatives are scalable, and whether governments can move away from stale policy debates rooted in antiquated paradigms to move their economies toward the frontiers of innovation of the information age.  Old elites with a lock on traditional industries are poorly positioned to obstruct the phenomenon, but if these emerging innovation hubs are to succeed, at some point they are likely to confront  the entrenched and oligopolistic business practices still prevalent in the region’s energy, telecom, and other sectors.

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by clalsstaff on March 25, 2013  •  Permalink
Posted in Regional Snapshot
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Posted by clalsstaff on March 25, 2013

https://aulablog.net/2013/03/25/the-tecnolatinas-a-start-up-revolution/

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