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    Jim Zirin-What’s Going On in Latin America?-Shannon O’Neil
    Articles, Blog

    Jim Zirin-What’s Going On in Latin America?-Shannon O’Neil

    August 30, 2019


    ♪ [THEME MUSIC] ♪>>>HI THERE. I’M JIM ZIRIN. WELCOME BACK TO MORE CONVERSATIONS IN THE DIGITAL AGE. OUR FOCUS TODAY IS ON LATIN AMERICA AND THE CHALLENGES THE NEW ADMINISTRATION WILL FACE IN THE REGION. RECENTLY, WE HAVE SEEN SIGNS OF PROGRESS IN COLUMBIA, ARGENTINA AND PERU. WHILE VENEZUELA AND BRAZIL ARE IN POLITICAL UPHEAVAL. MEXICAN POLICY IS ALSO IN PLAY. IN THE FIRST DEBATE, DONALD TRUMP CONTINUED HIS HARD LINE TOWARD MEXICO MAINTAINING THAT WE ARE LOSING JOBS TO MEXICO AND THE NORTH AMERICAN FREE TRADE AGREEMENT, NAFTA, SHOULD BE RENEGOTIATED. IS THERE ANYTHING TO THIS? WHERE IS U.S. POLICY HEADED WITH OUR GOOD NEIGHBOR IN LATIN AMERICA? HERE TO HELP US ANSWER THESE QUESTIONS IS SHANNON O’NEIL. SHANNON O’NEIL IS A SENIOR FELLOW IN LATIN AMERICAN STUDIES AT THE COUNCIL ON FOREIGN RELATIONS AND IS THE AUTHOR OF THE BOOK “TWO NATIONS INDIVISIBLE, MEXICO, THE UNITED STATES AND THE ROAD AHEAD.” SHANNON, WELCOME BACK TO THE PROGRAM. >>SO NICE TO BE HERE. >>SHANNON FROM THE EARLY 20th CENTURY, THE UNITED STATES HAS ENJOYED A GOOD NEIGHBOR POLICY TOWARD LATIN AMERICA. NOW IT SEEMS TO BE A POLITICS OF ANTAGONISM. WHAT DO YOU THINK HAS HAPPENED?>>OVER THE LAST CENTURY, WE HAVE SEEN UPS AND DOWNS WITH PARTICULAR COUNTRIES AND WITH THE REGION MORE GENERALLY. WE HAVE HAD TIMES WHERE WE HAVE HAD CLOSE RELATIONSHIPS WHERE WE HAVE SEEN BONDS BETWEEN THE TWO. FOR INSTANCE IN THE 1960s WITH THE ALLIANCE FOR PROGRESS. THEN WE HAVE SEEN TIMES WHEN WE HAVE HAD REAL TENSION WITH THE REGION, PARTICULARLY U.S. POLICY TOWARDS CUBA WHICH HAS SPILLED OVER IN MANY YEARS TO THE REST OF THE REGION. SUSPICION ABOUT U.S. INTENTIONS IN THE REGION. BUT WE HAVE NOT SEEN IN RECENT YEARS AT LEAST THIS REAL ANTAGONISM THAT WE DID SEE DURING THE ELECTORAL CAMPAIGN AND A POSITION OF A U.S. CANDIDATE FOR PRESIDENT THAT WAS SO ANTAGONISTIC TOWARD THE REGION.>>LET’S START WITH MEXICO, BECAUSE THAT SEEMS TO BE FRONT AND CENTER. AND OF COURSE, IT’S THE CLOSEST LATIN AMERICA NEIGHBOR. WHAT IS THE STATE OF U.S.-MEXICO RELATIONS?>>OVERALL, U.S.-MEXICO RELATIONS HAVE BEEN QUITE GOOD. WE HAVE SEEN OVER THE LAST DECADE SEVERAL THINGS THAT HAVE PROMOTED THE DEEPENING OF THESE TIES. ONE IS A CONTINUED ECONOMIC INTEGRATION BETWEEN THE TWO COUNTRIES. SO BASED ON NAFTA AND BUILDING OFF OF THAT, WE HAVE SEEN TRADE EXPAND FOUR PLUS FOLD BETWEEN THE TWO. IT’S NOT JUST THE QUANTITY, WHICH IS NEAR A HALF TRILLION DOLLARS EVERY YEAR, IT’S WHAT IS TRADED. SO TODAY WHEN YOU LOOK AT WHAT GOES BACK AND FORTH BETWEEN MEXICO, IT’S NOT NECESSARILY FINISHED GOODS. IT’S NOT A FINAL PRODUCT. IT’S ACTUALLY PIECES AND PARTS THAT ARE MOVING BACK AND FORTH IN THE MAKING OF THINGS. IN THE MAKING OF CARS, THE MAKING OF AIRPLANES, FLAT SCREEN TVs AND A WHOLE HOST OF OTHER THINGS THAT SUPPORTS FACTORIES AND JOBS ON BOTH SIDES OF THE BORDER. SO IT’S A VERY DIFFERENT TRADING RELATIONSHIP THE UNITED STATES HAS WITH MEXICO THAN ALMOST ANY OTHER COUNTRY IN THE WORLD. PARTICULARLY COMPARED TO COUNTRIES SUCH AS CHINA OR BRAZIL OR EVEN THE EUROPEAN UNION.>>NAFTA WAS NEGOTIATED IN THE BILL CLINTON ADMINISTRATION. TRUMP IN THE CAMPAIGN ARGUED THAT WE REALLY SHOULD TEAR UP THE TREATY, THAT IT’S BAD FOR THE UNITED STATES, THAT WE LOSE JOBS, THAT GOODS ARE CHARGED A TARIFF WHEN WE SELL THEM INTO MEXICO, BUT THEIR GOODS AREN’T CHARGED A TARIFF. WHAT ARE THE FACTS ON THIS?>>THE WHOLE POINT OF NAFTA WAS TO REDUCE TARIFFS, TO GET RID OF TARIFFS. THAT NAFTA DID DO. IT WAS ALSO TO CREATE A LEGAL SYSTEM OR A LEGAL BASIS FOR TRADE BACK AND FORTH OR INVESTMENT BETWEEN THE TWO COUNTRIES THAT WOULD ALLOW COMPANIES ON EITHER SIDE TO USE A MORE NEUTRAL LAW, BASICALLY U.S. LAW, BUT A NAFTA-BASED LAW IF THERE WERE DISPUTES. TO PROVIDE CERTAINTY FOR INVESTORS. THERE HAVE BEEN TENS OF BILLIONS OF DOLLARS OF MEXICAN INVESTMENT THAT HAS COME INTO THE UNITED STATES EVEN AS WE HAVE SEEN U.S. INVESTMENT GO DOWN THERE. TARIFFS WERE GOTTEN RID OF. WHEN TRUMP WAS REFERRING TO, I THINK WHAT HE MEANT WAS THAT MEXICO CHARGES A SALES TAX, WHICH IS SOMETHING WE IN THE UNITED STATES CHARGE, TOO. THAT HAS NOTHING TO DO WITH IMPORTS AND EXPORTS. THAT JUST HAS TO DO WITH GENERAL REVENU RAISING.>>MEXICO CHARGES VAT EVEN TO DOMESTICALLY PRODUCED GOODS?>>ON EVERYTHING EXCEPT FOR A FEW ESSENTIALS, SOME FOOD AND MEDICINE ARE EXEMPT.>>WHEN THEY EXPORT GOODS TO US, VARIOUS STATES CHARGE SALES TAXES AND HIDDEN TAXES THE SAME TAXES THAT THEY IMPOSE ON ALL SALES WITHIN THE STATE, ISN’T THAT RIGHT?>>EXACTLY. IF YOU BUY A TV COMING FROM MEXICO, YOU WILL PAY A SALES TAX JUST AS IF YOU BOUGHT A TV IN THE U.S. IN MEXICO, YOU WOULD PAY THIS TAX. >>WHAT ABOUT THE CLAIM WE’RE LOSING JOBS TO MEXICO? FORD IS CLOSING ITS PLANTS AND THAT THEY’RE GOING TO LAY OFF ALL THE WORKERS AND HIRE MEXICAN WORKERS TO PRODUCE SMALL CARS IN MEXICO. WHAT ARE THE FACTS ON THAT?>>ONE OF THE BIGGEST GLOBAL TRENDS FOR THE LAST 30 YEARS HAS BEEN THE DEVELOPMENT OF WHAT ECONOISTS CALL GLOBAL SUPPLY CHAINS. PRODUCTION NO LONGER HAPPENS IN ONE COUNTRY. IT HAPPENS ACROSS COUNTRIES. SO AS THAT HAS HAPPENED AROUND THE WORLD, MEXICO HAS BEEN PART OF THAT. NAFTA HAS HELPED EXPAND THAT ABILITY OF COMPANIES TO PRODUCE IN VARIOUS PLACES. WHAT’S REALLY INTERESTING HERE IS WHEN WE THINK ABOUT THE MOVEMENT OF JOBS AND THE OPENING OF FACTORIES ELSEWHERE, THE PLACE WHERE MOST OF THIS IS HAPPENING IS IN CHINA. WE HAVE SEEN THE RISE OF CHINA OVER THE LAST 15, 16 YEARS SINCE IT JOINED THE WTO, THE WORLD TRADE ORGANIZATION. WITH CHINA, WE DO NOT HAVE A FREE TRADE AGREEMENT. WHAT’S INTERESTING ABOUT NAFTA, ACTUALLY, IS AS THE U.S. LOOKS TO COMPETE GLOBALLY, AS IT LOOKS TO ENTER INTO THESE GLOBAL SUPPLY CHAINS AND MAKE PRODUCTS THAT ARE COMPETITIVE TO SELL GLOBALLY, IT NEEDS REGIONAL PARTNERS. WE HAVE SEEN THESE REGIONAL HUBS COME TOGETHER AS PEOPLE MAKE THINGS. SO IN MANY WAYS FOR INSTANCE, WE HAD A CAR INDUSTRY HERE IN THE UNITED STATES TODAY PRECISELY BECAUSE THERE’S MANUFACTURING ON BOTH SIDES OF THE BORDER. IN FACT, ALSO IN CANADA. IT’S A REGIONAL PRODUCTION THAT ALLOWS FORD AND GM AND OTHER CAR COMPANIES TO REMAIN COMPETITIVE AND TO SELL AROUND THE WORLD. SO IN MANY WAYS NAFTA HAS HELPED PROMOTE THE STAYING OF AMERICAN JOBS RATHER THAN GOING TO OTHER REGIONS WITH WHOM WE DO NOT HAVE FREE TRADE AGREEMENTS, IN PARTICULAR CHINA. >>FORD WAS QUICK TO POINT OUT THAT THEY HAVE NOT LAID OFF A SINGLE U.S. WORKER AS A RESULT OF THEIR BUILDING SMALL CARS IN MEXICO. THEY HAVE 8,000 EMPLOYEES IN MEXICO. 80,000 IN THE UNITED STATES.>>YEAH. AS FORD HAS EXPANDED ITS OPERATIONS IN MEXICO, IT HAS BEEN ABLE TO EXPAND ITS OPERATIONS AND ITS EMPLOYMENT HERE IN THE UNITED STATES. SO IN THAT PARTICULAR CASE, IT HAS BEEN A WIN WIN ON BOTH SIDES OF THE BORDER. >>CARRIER AIR CONDITIONING, WHAT ARE THE FACTS THERE?>>THERE YOU SEE A CLOSING OF A PLANT IN THE MIDWEST. SOME MOVING DOWN TO MEXICO. BUT YOU ALSO SEE OTHER CASES WHERE BECAUSE OF OPERATIONS IN MEXICO, YOU HAVE SEEN PLANTS EXPAND IN THE U.S. IN FACT, I WAS DOWN IN MEXICO AND VISITED A PLANT DOWN THERE OF A COMPANY THAT’S A MICHIGAN BASED COMPANY THAT BUILDS THE RODS THAT GO INTO YOUR SUNROOF. THEY DO SUNROOFS FOR ALL TYPES OF CARS, ALL BRANDS. THEY WERE TELLING ME BY OPENING THIS PLANT THAT’S DOWN IN MEXICO, THEY WERE ABLE TO KEEP THEIR PLANT IN MICHIGAN AND OPEN ANOTHER PLANT BECAUSE THEY WERE ABLE TO PROVIDE THE RODS TO MANY MORE SUPPLIERS GIVEN WHERE THE LOCATION IS. THERE IS AN INTEGRATION. IT’S THIS PLATFORM OF PRODUCTION THAT’S HAPPENING. NO ONE MAKES CARS ANYMORE IN ONE PLACE. THAT HASN’T HAPPENED SINCE HENRY FORD DAYS. SO IF YOU WANT TO BE COMPETITIVE, IF YOU WANT TO GAIN MARKET SHARE AND SALES AROUND THE WORLD, IT REALLY HAS TO BE DONE REGIONALLY. THAT’S WHERE MEXICO FITS IN FOR THE UNITED STATES.>>HISTORICALLY, THE REPUBLICAN PARTY HAS BEEN A LOW TARIFF PARTY. IT’S THE DEMOCRATIC PARTY THAT’S BEEN THE HIGH TARIFF PARTY. NOW WE SEE A REVERSAL, DON’T WE? EXCEPT WE STILL HAVE A QUESTION ABOUT THE TRANSPACIFIC TRADE PACT.>>IT’S INTERESTING WHEN YOU WATCH THE POLLS. HE WOULD TRADITIONALLY THINK OF REPUBLICAN PARTY AS THE FREE TRADE PARTY, THE ONE THAT’S PUSHED THAT. IF YOU LOOK AT POLLS OF VOTERS, TODAY DEMOCRATS ARE MORE PRO TRADE AND MORE PRO FREE TRADE THAN REPUBLICANS ARE. THAT’S IN PART DUE TO DEMOGRAPHICS. YOUNGER VOTERS ARE MORE LIKELY TO VOTE DEMOCRAT THAN REPUBLICAN. AND IT ALSO HAS TO DO WITH THE TYPE OF WORK THAT THOSE PEOPLE DO. DEMOCRATS INCREASINGLY ARE BETTER EDUCATED, ARE MORE LIKELY TO HAVE A COLLEGE EDUCATION OR ABOVE THEN REPUBLICANS ARE AND THEY’RE MORE LIKELY TO BE IN SERVICE INDUSTRIES OR BENEFIT FROM THIS OPENING OF THE WORLD RATHER THAN MANY OF THE — OF THOSE WHO WOULD VOTE REPUBLICAN. WE HAVE SEEN A SHIFT IN PUBLIC OPINION TOWARDS TRADE BETWEEN THOSE WHO VOTE DEMOCRAT AND THOSE WHO VOTE REPUBLICAN.>>AUGUST 31, 2016, TRUMP TRAVELED TO MEXICO AND MET WITH THE UNPOPULAR PRESIDENT. DO YOU SEE ANYTHING THAT CAME OUT OF THAT MEETING?>>WELL, THE VISIT DID MAKE THE PRESIDENT OF MEXICO — IT DIDN’T MAKE HIM POPULAR. MEXICANS FEEL STRONGLY THAT TRUMP DEN GRADIGRATED THEM. HE CALLED THEM RAPISTS AND CRIMINALS. FELT HE DIDN’T SHOW RESPECT FOR THE NATION BUT ALSO FOR THEIR CITIZENS, WHETHER THEY LIVE IN MEXICO OR THEY LIVE HERE IN THE UNITED STATES. THIS IS A — IT HAS BEEN A GROWING POPULATION WITHIN THE UNITED STATES. THERE’S LOTS OF MIGRATION FROM MEXICO. THIS HAS SLOWED SINCE 2007. WE HAVE SEEN A DECLINE. ACTUALLY, SINCE 2009, THERE’S BEEN A NET ZERO OR NET OUTFLOW OF MEXICANS COMING TO THE UNITED STATES. WHEN YOU LOOK AT OUR BIGGEST IMMIGRANTS, BIGGEST POPULATION COMING IN, IT’S FROM INDIA AND CHINA. IT’S NOT FROM MEXICO. STILL, WE HAVE VERY LARGE MEXICAN AND MEXICAN AMERICAN POPULATION HERE. THERE WERE FEATHERS RUFFLED.% BUT A BIG ONE OVER THE LAST DECADE PLUS HAS BEEN A GROWING SECURITY COOPERATION BETWEEN THE TWO COUNTRIES. MEXICO STILL IS STRUGGLING WITH HIGH LEVELS OF VIOLENCE, PARTICULARLY IN AREAS AROUND THE COUNTRY, ALONG THE BORDER AND THE LIKE. THE UNITED STATES HAS HAD, SINCE THE BUSH ADMINISTRATION, THROUGH THE OBAMA ADMINISTRATION, HAS HAD PRETTY CLOSE WORKING COOPERATION ON THAT. THAT IS SOMETHING THAT WILL CONTINUE HOPEFULLY UNDER THE NEXT PRESIDENT. SO WHETHER THAT VISIT MIGHT HAVE BEEN A BUMP IN THE ROAD AND HOPEFULLY WON’T AFFECT THE LARGER, MUCH MORE IMPORTANT AND MUCH MORE STABLE AREA BECAUSE WE SHARE THE BORDER, WE SHARE AN ENVIRONMENT, WE SHARE PEOPLE, WE SHARE THE ECONOMY, WE SHARE SECURITY. THERE ARE A LOT OF ISSUES THAT WE SHARE THAT THE NEXT PRESIDENT WILL NEED TO WORK WITH MEXICO ON. >>LET’S SHIFT TO BRAZIL WHICH WE HAVE CITED IN THE PAST AS AN ECONOMIC POWERHOUSE. NOW WE HAVE HAD A NINE-MONTH IMPEACHMENT PROCESS WHICH HAS ENDED. THE PRESIDENT HAS BEEN REMOVED FROM OFFICE. CHARGED WITH CORRUPTION. >>NOT YET CHARGED BUT — >>NOT OFFICIALLY CHARGED, CERTAINLY IN THE PRESS. WHAT’S GOING ON THERE? IT SEEMS TO BE A CENTER OF POLITICAL UPHEAVAL. >>THE APPOINTED PRESIDENT IS THERE UNTIL 2018 WHEN BRAZIL WILL HOLD ELECTIONS. THE FIRST IS AS YOU ALLUDE TO, THE LEGITIMACY AS PRESIDENT. HE WAS NOT ELECTED. HE WAS APPOINTED. SO HE FACES THE DIFFICULTY OF TRYING TO PUSH THROUGH BIG REFORM TO THE ECONOMY, WHICH ARE NEEDED TO GET IT UP AND RUNNING AGAIN. PUSHING THROUGH THE BIG REFORMS WHEN HE DOESN’T HAVE THE ELECTORAL MANDATE. BRAZIL HAS BEEN GOING THROUGH FOR TWO-PLUS YEARS AN EXTRAORDINARY SET OF CORRUPTION INVESTIGATIONS. YOU HAVE A SET OF PROSECUTORS AND JUDGES THAT HAVE BEEN PUSHING THE CAR WASH SCANDAL. IT BEGAN THERE. IT REALLY IS A SET OF CORRUPTION INVESTIGATIONS THAT BROUGHT IN THE STATE-OWNED ENERGY COMPANY. IT HAS BROUGHT IN DOZENS AND DOZENS OF LEADING CORPORATE LEADERS. IT HAS BROUGHT IN DOZENS AND DOZENS OF MEMBERS OF CONGRESS OF OTHER POLITICAL LEADERS. IN SOME OF THE INVESTIGATIONS, EVEN THE PRESIDENT HAS BEEN NAMED IN SOME OF THE DEPOSITIONS. THIS HAS ROCKED THE POLITICAL ESTABLISHMENT AND MADE IT MORE DIFFICULT TO MAKE DEALS, TO PUSH FORWARD REFORMS. THE OTHER CHALLENGE HE FACES IS THAT MANY OF THE THINGS BRAZIL NEEDS TO DO TO JUMP START THE ECONOMY, REFORM TAX CODE, THE LABOR CODE, THE SOCIAL SECURITY SYSTEM, MANY OF THESE THINGS, BECAUSE OF THE WAY BRAZIL’S CONSTITUTION IS WRITTEN, ARE WRITTEN INTO THE CONSTITUTION. YOU NEED NOT JUST A MAJORITY TO PASS CHANGE, YOU NEED A THREE-FIFTH MAJORITY. THE POLITICAL HURDLES ARE SO MUCH HIGHER TO GET CHANGE DONE, EVEN AS HIS POLITICAL CAPITAL IS MUCH WEAKER THAN, SAY, PERHAPS AN ELECTED PRESIDENT WOULD HAVE BEEN.>>IT HAS BEEN SAID THAT ALL POLITICS ARE LOCAL AND THEY DO HAVE UPCOMING LOCAL ELECTIONS. IT SEEMS THAT CANDIDATES FOR THE CITY COUNCIL HAVE BEEN ASSASSINATED METHODICALLY. WHAT’S BEHIND ALL THAT? THEY SEEM TO BE IN TOTAL DISARRAY. >>THERE ARE CHALLENGES IN BRAZIL. WE TALK ABOUT MEXICO’S SECURITY AND THE WORRIES THERE. BUT BRAZIL A PER CAPITA HOMICIDE RATE IS EQUAL TO MEXICO AND SOME AREAS WORSE. THIS IS A NATION THAT DESPITE SOME ADVANCES — I DO THINK THE CORRUPTION INVESTIGATIONS ARE REAL ADVANCES IN THE JUSTICE SYSTEM AND ITS INDEPENDENCE AND ITS CAPACITY. IT STILL HAS REAL RULE OF LAW ISSUES. SO SOME OF THESE HOMICIDES AS WELL AS POLITICAL ASSASSINATIONS OF WHICH THERE HAVE BEEN SOME ARE AN EXAMPLE OF THAT. HOW CAN YOU REALLY ESTABLISH A RULE OF LAW AND PUBLIC SAFETY THROUGHOUT THE NATION?>>THEY JUST HAD THE OLYMPICS, WHICH THEY HOSTED IN RIO. THERE WERE REPORTS OF RAW SEWAGE IN THE BAY AND OFF THE BEACHES THREATENING SWIMMERS AND SAILERS. JOURNALISTS REPORTED WATER IN THE DIVING POOL CHANGES FROM BLUE TO GREEN. ARE YOU CRITICAL OF THEM FOR NOT RUNNING A BETTER OLYMPICS?>>I THINK IN THE END THE OLYMPICS TURNED OUT PRETTY WELL. ONCE EVERYBODY GOT THERE AND SHOWED UP, EVERYBODY HAD A PRETTY GOOD TIME, WHICH IS — BRAZIL, IT’S A PLACE WHERE YOU CAN HAVE A GOOD TIME. ESPECIALLY RIO, THEY ARE USED TO HOSTING BIG PARTIES. EVERY YEAR IN FEBRUARY THEY HOST CARNIVAL. THEIR BIG CELEBRATION AND OVER A MILLION PEOPLE COME. SO THE 5-600,000 WHO CAME FOR THE OLYMPICS, IT’S A DIFFERENT EVENT, YOU HAVE TO GET TO DIFFERENT VENUES AND THE LIKE. BUT I THINK OVERALL THEY HOSTED IT FAIRLY WELL AND DEALT WITH SOME OF THE CHALLENGES. THOSE YOU POINT OUT ARE REALLY ABOUT ONE OF THE LONGER TERM CHALLENGES OF BRAZIL, WHICH IS INFRASTRUCTURE. THERE THEY HAVE NOT CLEANED UP THE SEWAGE SYSTEMS, THEY HAVE NOT BUILT ROADS, RAILROAD, THE CONNECTION. THAT IS THE CHALLENGE FOR WHOEVER COMES. CAN YOU MAKE THE STRUCTURAL REFORMS, POLITICAL REFORMS? CAN YOU ENTICE LOCAL AND FOREIGN INVESTMENT TO MAKE IT A MORE — IT COULD BE AN INCREDIBLY COMPETITIVE GLOBAL ECONOMY. IT’S ONE OF THE TOP TEN BIGGEST ECONOMIES IN THE WORLD. THERE’S OVER 200 MILLION PEOPLE THERE, POTENTIAL CONSUMERS AND CONSUMERS ALREADY. HOW DO YOU MAKE IT MORE PRODUCTIVE AND COMPETITIVE?>>LET’S MOVE ON TO COLUMBIA WHERE THERE’S BEEN SOME GOOD NEWS. USED TO BE THOUGHT OF AS A FAILED STATE WITH NARCO TERRORISTS AND THEN THERE WAS THE REVOLUTIONARY CHALLENGE OF THE GOVERNMENT. NOW THE GOVERNMENT MADE A PEACE TREATY AND I THINK SECRETARY OF STATE KERRY WENT FOR THE SIGNING. WHAT DO YOU SEE HAPPENING THERE?>>THIS IS A HISTORIC AGREEMENT. YOU HAD DECADES OF WAR BETWEEN THE REBELS, BETWEEN THE GROUPS AND THE GOVERNMENT. AS YOU SAY, BACK IN THE 1990s, THERE WERE TIME WHEN THERE WERE WORRIES THE STATE ITSELF WOULD FAIL. SO YOU HAVE HAD THE SIGNING OF THE AGREEMENT. IN THE BEGINNING OF THIS DEMOBILIZATION PROCESS BY THE GROUP. WHILE THAT — IT’S A HUGE STEP FORWARD AND ONE THAT SHOULD BE CELEBRATED. BUT THERE ARE LONGER TERM CHALLENGES. THIS IS JUST — >>TALK ABOUT THOSE.>>ONE IS YOU HAVE 7,000 FIGHTERS COMING IN OUT OF THE JUNGLE. YOU HAVE TO FIND A PLACE FOR THEM. MANY OF THEM HAVE NEVER IN THEIR ADULT LIFE KNOWN ANYTHING BESIDES LIVING IN REBEL ENCAMMENTS. THEY DON’T KNOW HOW TO — MUCH MORE THAN USIN A GUN. HOW DO YOU BRING THEM BACK WITH FAMILY OR COMMUNITIES THAT THEY LEFT MANY YEARS AGO? THAT’S ONE CHALLENGE. THE OTHER CHALLENGE COLUMBIA NEEDS TO TAKE ON — THEY HAVE PLANS TO DO SO. BUT WHETHER THEY CAN FULFILL THEM IS THE QUESTION. IS HOW DO YOU ADDRESS THE REASON THAT LED THEM TO REBEL IN THE FIRST PLACE? THOSE ARE DEEP INEQUALITY. THOSE ARE AREAS OF THE COUNTRY THAT ARE STILL ISOLATED FROM THE LARGER COUNTRY. SO YOU NEED TO GO IN, YOU NEED TO BUILD PHYSICAL INFRASTRUCTURE, ROADS, RAILROAD, PORTS AND THE LIKE TO MAKE SURE ALL OF COLUMBIA IS CONNECTED SO PEOPLE WHO LIVE IN THESE AREAS AREN’T ISOLATED. BUT YOU NEED TO CONNECT THEM IN VIRTUAL WAYS, TOO. THE WORD HAS MOVED ON FROM WHEN THEY FIRST WENT INTO THE JUNGLE TO PROTEST AND TO FIGHT THE GOVERNMENT. HOW DO YOU BRING THE MAJORITY OF COLUMBIANS INTO THE 21st CENTURY AND PROVIDE THEM WITH LEGAL OPPORTUNITIES, WITH A LEGAL PATH FORWARD? THAT IS SOMETHING THIS GOVERNMENT WILL STRUGGLE WITH. THEY HAVE VERY LOW APPROVAL RATINGS DESPITE THIS HISTORIC AGREEMENT. HOW DO YOU MAKE COLUMBIA MORE PROSPEROUS AND INCLUSIVE?>>WHAT ABOUT THE DRUG TRADE? THAT REMAINS IN FORCE?>>SO THE GROUP WAS INVOLVED IN THE DRUG TRADE. THERE’S OTHER ORGANIZATIONS THERE. BUT THERE’S A BIG QUESTION ABOUT WHETHER SOME STAY AND CONTINUE RUNNING THE DRUG TRADE OR WHO ELSE COMES INTO THAT VACUUM IF THOSE PEOPLE LEAVE. AS WE KNOW, DEMAND HAS CONTINUED AROUND THE WORLD. IN THE UNITED STATES BUT ALSO EUROPE AND OTHER PLACES AROUND THE WORLD FOR COCAINE, COLUMBIAN COCAINE. SO HOW DOES COLUMBIA REALLY INSERT RULE OF LAW MORE BROADLY TO DEAL WITH THAT AND OTHER CRIMES THAT HAPPEN?>>HOW WILL THEY FINANCE THE NEW PEACE THAT’S BEEN ARRIVED AT?>>THAT’S THE BIG QUESTION, TOO. IN COLUMBIA LIKE MANY COUNTRIES IN SOUTH AMERICA IS VERY COMMODITY DEPENDENT. SO OIL HAS BEEN A BIG PART OF THEIR BUDGET. AS COMMODITY PRICES HAVE FALLEN, AS OIL PRICES HAVE FALLEN, SO TOO HAVE THE RESOURCES THAT THEY HAVE. THEY ARE TURNING TO THE INTERNATIONAL COMMUNITY. THEY’RE TURNING TO THE UNITED STATES, EUROPE, TO OTHER PLACES TO HELP THEM. THEY’RE TURNING TO THE PRIVATE SECTOR. THEY HAVE A BIG INFRASTRUCTURE PLAN THEY HAVE BEEN SELLING AROUND THE WORLD TRYING TO GET PRIVATE SECTOR INVESTMENT TO COME IN. THIS IS A CHALLENGE. IT TAKES REAL MONEY TO INTEGRATE THESE PEOPLE AND OTHERS WHO HAVE BEEN ISOLATED AND WHERE ARE THEY GOING TO GET IT. >>LET’S MOVE ON TO ARGENTINA WHERE THERE MAY BE GOOD NEWS UNDER THE PRESIDENT. TELL US ABOUT THAT.>>ANOTHER COUNTRY THAT’S LOOKING FOR MONEY IN THE GLOBAL MARKET BUT HAS RECEIVED A WARM EMBRACE. WE HAD BEFORE HIM 12 YEARS OF A PROTECTIONIST VIEW OF THE ECONOMY. THEY HAD ECONOMIC POPULISM AS ONE OF THEIR PLATFORMS. USING PATRONAGE TO BUILD UP THE POLITICAL BASE. AS WE ARE SEEING IN ALLEGATIONS IN COURT CASES, THEY USED NOT A LITTLE CORRUPTION. YOU HAVE SEEN MINISTERS THROWING MONEY OVER A CONVERT WALL TRYING TO HIDE THE ILL GOTTEN GAINS. YOU HAVE SEEN A CHANGE AWAY FROM A VERY DIVISIVE POLITICS, A VERY ANTI-AMERICAN STANCE AND A VERY UNSUSTAINABLE ECONOMIC MODEL BASED ON NATIONALISM AND POPULISM TO A PRAGMATIC PRESIDENT WHO HAS COME IN, A VERY OPEN ECONOMIC — HE RESOLVED CHALLENGES THAT WERE OUTSTANDING WITH FOREIGN CREDITORS THAT HAD BEEN DODGING ARGENTINA FOR OVER A DECADE. HE UNIFIED THE CURRENCY. HE MADE CHANGES TO OPEN UP THE ECONOMY AND MAKE IT MORE OPEN AND COMPETITIVE INTERNATIONALLY. BUT TO DO SO, HE HAS TO DEAL WITH A RECESSION. HE HAS TO DEAL WITH VERY HIGH INFLATION. AND HE NEEDS MONEY TO HELP BRIDGE THE GAP UNTIL HE CAN GET THE FINANCES IN LINE. SO FAR, HE HAS BEEN VERY SUCCESSFUL IN THAT. HE HAS THE SUPPORT OF THE INTERNATIONAL COMMUNITY OF MANY INVESTORS LOOKING FOR DECENT RETURNS IN THIS ERA OF LOW INTEREST RATES. HE SO FAR HAS PRETTY GOOD SUPPORT AT HOME, EVEN THOUGH SOME OF THE MEASURES HAVE BEEN HARD ON THE MIDDLE AND LOWER CLASSES. SO FAR SO GOOD. HE NEEDS TO SHOW RESULTS BEFORE PEOPLE GET WEARY OF HIGH UNEMPLOYMENT, HIGH INFLATION AND OTHER ECONOMIC DIFFICULTIES. >>JUAN PERONE HE IS NOT. >>HE IS THE OPPOSITE. HE IS A BUSINESSMAN IN TRAINING. HE WAS MAYOR OF A CITY. HE HAS HAD GOVERNING EXPERIENCE. HE COMES IN WITH A MUCH MORE PRAGMATIC, MODERATE AND MARKET FRIENDLY VIEW. MANY OF HIS TEAM TRAINED IN THE UNITED STATES AS WELL AS ARGENTINA BUT VERY OPEN TO INTERNATIONAL MARKETS. >>VENEZUELA. >>NOT LIKE THAT. VENEZUELA, WE HAVE SEEN THE COLLAPSE OF OIL PRICES HAS RATHER THAN TURNING TO MORE MODERATE AND OPEN POLITICAL PATH HAS TURNED IN THE OTHER DIRECTION. SO WE HAVE SEEN AUTHORITARIAN MOVES BY THE CURRENT PRESIDENT OF VENEZUELA. WE HAVE SEEN AN INCREASING CONTROL OF THE ECONOMY, EXAPPROPRIATIONS OF BUSINESSES, CONTROLLING THE SALE OF BASIC FOOD AND MEDICINE. PART OF THE INCREASING INTERVENTIONS OVER 15 PLUS YEARS, WE ARE SEEING THE LOCAL ECONOMY DISINTEGRATE.>>DO YOU DETECT A DIFFERENCE BETWEEN THE TWO?>>YOU KNOW, HE IS DIFFERENT IN CHARACTER. HE DOESN’T HAVE THE CHARISMA — >>THAT LIGHT.>>EXACTLY. HE IS DEALING WITH THE AFTERMATH. CHAVEZ WENT OUT WHEN OIL PRICES WERE HIGH. HE HAD MONEY AND SUPPORT AND AT BUILT TO SPREAD PATRONAGE. NOW MEDORA IS DEALING WITH LOW OIL PRICES, FALLING PRODUCTION OF THE OIL. THEY WERE PRODUCING 3.5 BILLION BARRELS. TODAY THEY ARE PRODUCING JUST OVER 2 MILLION BARRELS. >>OPEC JUST SAID THEY WERE GOING TO CURTAIL PRODUCTION. IS THAT GOOD FOR VENEZUELA?>>THEY JUST CAN’T PRODUCE. IN PART BECAUSE THEY HAD A VERY STRONG STATE-OWNED ENTERPRISE WHICH WAS VERY TECHNOCRATIC. IT HAS BEEN WEAKENED OVER THE LAST 15 YEARS. IT HAS BECOME A PLACE OF PATRONAGE RATHER THAN PRODUCTION. IF OPEC CUTS PRODUCTION, THAT’S FINE WITH VENEZUELA. BECAUSE THEY CAN’T PRODUCE THE AMOUNT THAT THEY WERE BEFORE. THEIR PRODUCTION WILL FALL NO MATTER WHAT OPEC DOES. BECAUSE OF THEIR INABILITY TO PRODUCE. THAT IS HARD FOR VENEZUELA BECAUSE GOVERNMENT FINANCES AND ALL THE THINGS THEY DO SINCE THE GOVERNMENT CONTROLS THE ECONOMY DEPEND ON OIL REVENUES, WHICH IS FALLING. >>I HAVE A QUESTION FOR YOU, SHANNON O’NEIL. WE HAVE COME TO THE END OF OUR TIME. WITH THE NEW ADMINISTRATION IN OFFICE, DO YOU HAVE AN OPTIMISTIC VIEW OF OUR FUTURE RELATIONS WITH LATIN AMERICA?>>I BELIEVE ACTUALLY LATIN AMERICA IN GENERAL WITH SOME EXCEPTIONS LIKE VENEZUELA IS MOVING IN A VERY POSITIVE DIRECTION. IT’S MUCH MORE DEMOCRATIC THAN IT WAS MANY YEARS AGO. IT IS FINDING WAYS TO DIVERSIFY THE ECONOMY. IT’S A MORE PRAGMATIC AND OPEN PATH. I THINK IS A REGION — THE CHALLENGES THE UNITED STATES IS GOING TO FACE GOING FORWARD, THIS IS A REGION THAT HAS MOSTLY GOOD NEWS. IT’S ALSO ONE THAT WE CAN WORK WITH, MANY OF THESE COUNTRIES AS WE FACE BIGGER GLOBAL PROBLEMS, WHETHER THEY ARE CLIMATE CHANGE OR OTHER THINGS.>>MOSTLY GOOD NEWS. SHANNON O’NEIL, THANK YOU FOR COMING BY. THIS HAS BEEN MARVELLOUS. THANK YOU FOR COMING BY. TUNE IN NEXT WEEK FOR MORE CONVERSATIONS IN THE DIGITAL AGE. I’M JIM ZIRIN. ALL THE BEST. ♪ [THEME MUSIC] ♪

    Brazil’s Geography Problem
    Articles, Blog

    Brazil’s Geography Problem

    August 14, 2019


    This video was made possible by Skillshare. Learn from 21,000 classes for free for two
    months at https://skl.sh/wendover3. There are plenty of lines you can draw on
    the globe but perhaps none is more consequential than the equator. Of the 15 wealthiest countries
    in the world as measured by GDP per capita, all are in the northern hemisphere. Only 800
    million of earth’s 7.6 billion residents live south of the equator. There is a clear
    divide between north and south but of those 800 million people a quarter of them, about
    207 million, live here in Brazil. The country is an exception to the global trend. Brazil
    is the fifth most populous country in the world and the most populous entirely within
    the southern hemisphere. Its economy has grown enormously and the country is quickly developing.
    Although, the very land it sits on stacks the odds against it. Its location gives it
    a disadvantage. Given this, the question is whether Brazil can develop into a world superpower
    by the likes of the US, Europe, Russia, India, and China or if the country is doomed to fail? Brazil, of course, looks like this but in
    reality almost 80% of the country’s population lives here—within 200 miles of the coast.
    You do see a concentration of population near the coast in any country as it provides a
    cheap and easy means of transportation by boats and a source of food through fishing
    but few countries have such a severe concentration of people by the oceans as Brazil. This small
    area, for example, is home to three of Brazil’s six largest cities. Normally this would help
    development as the area in between cities will urbanize but this map doesn’t tell
    the whole story—this one does. You see, this area of Brazil is rather mountainous.
    The major cities mostly exist in small pockets of low-altitude, flat land on the ocean. This
    is because major cities need easy water access to get goods in and out. The majority of Brazil’s
    coast is defined by steep, sheer cliffs. Petrópolis, for example, a suburb of Rio, is a mere 13
    miles from the ocean and yet it sits at almost 3,000 feet of altitude. The rare areas with
    low-altitude land on the water are where cities like Porte Alegre, Rio de Janeiro, and Recife
    are but this pattern has two consequences. First, these cities, while being on flat land
    themselves are surrounded by cliffs and mountainous regions which means their growth is limited.
    There are plenty of cities that exist in mountainous regions but the world’s largest and most
    influential cities like London and Delhi and Beijing all exist in areas with absolutely
    no geographical features limiting their growth. The fact that Brazil’s cities locate in
    rare low-altitude coastal land means that the country will likely never have a megalopolis
    by the likes of the Pearl River Delta or the US Northeast. It takes a surprising six hours
    to drive between Rio and Sao Paolo and since there’s no low-altitude coastal land in
    between them, there are really no major cities in between them too. Brazil’s cities are
    confined to the geographically convenient areas which are spread out from each other.
    This means the cities can’t collaborate easily with each other thereby limiting Brazil’s
    impact on the world stage. Like any large country, Brazil’s development
    potential is also linked to how it gets its food. This, in fact, might be Brazil’s greatest
    obstacle as it really doesn’t hav e much great farmland, at least yet. The country’s
    main agricultural region is its south which is blessed with great soil and great rivers
    that help transport crops away from their farms. Interestingly, the same elevation that
    leads to steep coastal cliffs causes rivers to run in a counterintuitive direction. The
    Tietê river, for example, starts near Sao Paolo a mere 10 miles away from the Atlantic
    ocean but then runs inland almost 500 miles where it flows into the Paraná River which
    eventually flows out into the ocean near Buenos Aires, Argentina. If a farmer wants to export
    their food abroad, it’s often cheaper to first ship it the thousands of miles by boat
    on these rivers than just hundreds of miles overland to Brazil’s coast due to their
    poor road infrastructure. This means that Argentina gets the business of packing up
    and shipping Brazil’s food to other countries. That’s just lost money for Brazil as a result
    of their geography. Brazil’s south, though, does not even have enough land to feed the
    country’s own 200 million residents. Given that, the question is where to put the rest
    of the farms. In Brazil’s north is the Amazon basin. The
    central feature of this region is, of course, the Amazon River which is navigable for boats.
    Normally this feature would lead to a significant population as navigable rivers serve as cheap
    and easy transport for crops and goods but the banks of the Amazon are a tough place
    to farm or live. Not only are they muddy and unstable which makes building difficult, but
    the Amazon also regularly floods which means that every year many of the communities on
    the banks of the Amazon can have their streets underwater for months. Building and living
    in the Amazonian cities is difficult, but what’s more difficult is building the roads
    in and out. The largest city in the Amazon, Manaus, is home to 2.6 million people, it’s
    as big as Baltimore, and yet there are only three roads connecting the city to the outside
    world. Many of the smaller towns around the Amazon have no roads going in and out as its
    just incredibly costly and difficult to build roads through the rainforest. In fact, rather
    unbelievably, there is not a single bridge spanning over the Amazon so there is no way
    to drive from the northernmost region of Brazil to the rest without taking a ferry. Overall,
    this whole area is just empty. Even if there was the infrastructure to transport crops
    to market, farming in the Amazon involves clearing huge amounts of land and even then,
    the soil is relatively infertile which leads to poor yields. Despite being Brazil’s largest
    state, Amazonas is home to just 1.8% of its population. It just costs too much to build
    the infrastructure needed to live there. To the south of the Amazon, though, is an
    area known as the Cerrado. This vast savanna used to be in the same category as the Amazon—it
    was empty. The problem was not only that there was no natural network of rivers to get crops
    out of the area but also that the soil was too acidic and lacking enough nutrients to
    easily grow large quantities of crops. Between both the Amazon and the Cerrado being off-limits
    for large-scale farming, that meant that Brazil really didn’t have much land at all for
    farming. 30 years ago, with only the south to farm, Brazil was actually a net importer
    of food—it bought more food from other countries than it sold. That was until researchers discovered
    that all you needed to do to fix the soil was add phosphorous and lime. The phosphorous
    served as a fertilizer in the place of natural nutrients and the lime worked to reduce the
    level of acidity. In the early 2000’s, the country spread more than 25 million tons of
    lime per year and so today the Cerrado accounts for 70% of Brazil’s farmland. In addition,
    Brazil has begun growing soybeans. This plant is normally grown in more temperate climates
    such as the US, northern China, or Japan, but through cross-breeding and genetic modification
    it can be modified to grow in warmer and acidic environments such as the Brazilian Cerrado.
    Thanks to the enormous amount of land Brazil has and these technological advancements the
    country has gone from producing 16% of the world’s soybean in 2005 to 31% today.
    A country’s level of development is often to linked to how good its natural transportation
    system is. That’s part of why the US developed so much so fast—it has a great system of
    navigable rivers right in its agricultural heartland that helps get goods from the fields
    to cities fast and inexpensively. The Brazilian Cerrado, though, does not have that. It doesn’t
    even have much of a preexisting network of roads since before this recent agricultural
    advancement barely anyone lived there. Therefore anyone who wants to farm in the Cerrado has
    to find land, level it, treat it with phosphate and lime, and build roads to get supplies
    in and crops out. Cerrado farms can be profitable but it takes an enormous amount of money to
    build the infrastructure needed to start a farm. It’s not like the US or France or
    China where all you need is some land. The consequence of this is that farms in Brazil
    tend to owned by corporations rather than individuals because only corporations have
    the money to build farms. That therefore increases the level of wealth disparity in Brazil. According
    to the World Bank’s Gini index, Brazil is the 11th most economically unequal country
    in the world. Lower wealth disparity and the emergence of a middle class are indicators
    of economic development so the country should want to fix this. Brazil’s government has
    recognized its infrastructure problem as a source of its wealth disparity and has therefore
    worked to build roads in the interior so that more individuals can run farms but the government
    only has so much money to spend and it’s a big country.
    Brazil does, though, understand the importance of its core. It understands that the coastal
    cities are constrained and that economic development will come from the center. It was partially
    for that reason that the country decided to move its capital from Rio de Janeiro to here—Brasília.
    The thinking was that putting the capital in the core would stimulate the economically
    underdeveloped region and, in many ways, it worked. The city simply did not exist before
    1960 yet today more than 4 million people live in its metropolitan area. Being located
    on relatively flat land unlike Rio, the city can just grow and grow and grow without hinderance.
    Brazil has potential, but its defining issue is that it’s an expensive place. It’s a
    vicious cycle. In order to make money, Brazil needs to invest in its infrastructure but
    without people making money it doesn’t have the tax money to build what it takes t o transition
    into the first world. The question of why tropical countries are less developed is an
    enormous one without a clear answer, but Brazil is one of the most likely candidates to break
    this trend. It certainly lags behind other developing countries like China, but as its
    agriculture industry develops it will become a bigger and bigger exporter which will bring
    more money in. With time, its average income will inch up. The country already does have
    major companies in other industries such as banking, manufacturing, and oil but with how
    big Brazil is, agriculture is the one that’s the world’s focus right now. Only France,
    Germany, the Netherlands, and the United States export more agricultural products per year
    which is good company to be in. Brazil may not have the explosive growth rate of some
    other less developed countries but by continuously taking what it earns and reinvesting it to
    open up more of the country to agricultural production it will continue its path to superpower
    status. One of the common questions I receive is how
    I started making these videos. The first step was learning the skills needed from writing
    to research to sound design and editing, but for each and every one of them there’s a
    course on Skillshare. Skillshare, you see, is an online learning community that has more
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    months exclusively by going to skl.sh/wendover3. Skillshare makes this show possible and its
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    skl.sh/wendover3. Thanks for watching and I’ll see you again in three weeks for another
    Wendover Productions video.