Central American governments are failing big with their fiscal policies; Mexico's largest Archdiocese has a few choice words for local companies willing to engage in building Trump's border walls; and Latin America's series of presidential elections provide an uncertain political outlook for the region.
Please note that some links may require registration or a subscription.
Mexico's largest Archdiocese has launched a tirade against local companies which are planning to help build U.S. President Donald Trump's planned border wall, Reuters' Dave Graham and Lizbeth Diaz report. In a scathing editorial, the Catholic Archdiocese of Mexico called companies with intentions of investing in the wall "immoral" and "traitors to the homeland," while also lambasting the government for not doing enough to dissuade companies from participating. "In practice, signing up for a project that is a serious affront to dignity is shooting yourself in the foot," the editorial said, noting that the barrier would only breed prejudice and discrimination. Several Mexican firms have already expressed interest in joining the construction of the wall, including Cemex and Grupo Cementos de Chihuahua.
Recent economic figures for Mexico suggest that the country may have thwarted a worst-case scenario under the Trump era, Jude Webber pens for the Financial Times. The country's trade balance showed improvements in recent months while the peso is within striking distance of its pre-election levels. Data also shows that the economy is recovering, with the global economic indicator rising 3% in January compared to the previous year, on the back of robust manufacturing and agricultural sectors. While things are looking up for Mexico, Webber still cautioned about future risks, especially since Trump has yet to announce his tax and trade policies concerning the U.S.' southern neighbor. "All that could turn on a dime, but for now, Mexico can enjoy the relief," the author notes.
Central American governments' failure to come up with effective fiscal policies is costing their citizens better access to basic social services, according to an editorial from Bloomberg News. "Central Americans have good reason to flee to the U.S. in ever greater numbers. Record-setting homicide rates and lack of economic opportunity plague much of the region," the editorial says. Already burdened by high poverty incidence and inequality, countries such as Guatemala, Honduras and El Salvador are also unsuccessful in terms of collecting higher taxes, with Guatemala's tax revenues worth 12% of GDP falling way below the 23% average for Latin America. Personal income taxes share a small portion of total revenues and are concentrated at the highest income brackets, while consumption taxes are prone to evasion. "A smarter approach to collecting revenue could raise more money for essential public services without unduly burdening workers or producers," the article points out.
The political tide is turning for Latin America as 10 countries hold their presidential polls within the next two years, starting with Ecuador's elections this weekend, Joachim Bamrud reports for Latinvex. Inter-American Dialogue President Michael Shifter said that the polls are "likely to reshape Latin America's political landscape," with "outsider" candidates having the upperhand amid growing disillusionment toward institutions across the globe. Ecuador's polls pit Lenin Moreno, the ruling party candidate and a socialist, against the business-friendly Guillermo Lasso, with the win of one guiding the economic track the country will take in the next few years. However, the most critical elections will happen in the region's biggest economies, the author notes, with Brazil's former socialist president Luiz Inacio Lula da Silva hoping to run amid corruption allegations and challenge the pro-investor policies of current leader Michel Temer. Meanwhile, U.S. President Donald Trump's attacks on Mexico are expected to play a major factor on who will be voted as its next leader, with leftist Andres Manuel Lopez Obrador leading early polls due to his equally provocative critique of Trump.