In 2021 most countries will struggle to claw back much more than half of the output lost.
Recovery will be led by Brazil and some other South American countries. The damage
will be greater in Mexico, where investors distrust the president, Andrés Manuel López
Obrador. With public debt likely to start the year at over 80% of GDP, Latin America will
be pushing for more aid from the IMF. Without it, the region will face recovery-crushing
fiscal austerity or a debt crisis, or both.
Presidential elections in Ecuador (February), Peru (April) and Chile (November) could
see populists winning, though conservatives have a chance, too. In Ecuador, Rafael
Correa, a leftist populist who ruled from 2007 to 2017, is barred from running by his
conviction in absentia for corruption. He hopes to return via a proxy candidate, Andrés
Arauz, a young economist. Mr Arauz faces a tough fight against Guillermo Lasso, a
conservative banker, and Yaku Pérez, an indigenous leader. Peru’s election is wide open
and may result in the triumph of a political outsider. In Chile, a bulwark of capitalist
stability until it was shaken by protests in 2019, the election will take place in parallel
with deliberations on a new constitution, which is likely to give a bigger role to the state
in health care, education and pensions. The left will mount a strong challenge for the
presidency but may lose to Joaquín Lavín, a mildly populist conservative. Mid-term
legislative elections in Argentina (October) and Mexico (June) will provide an
important pointer to the strength of the presidencies of Alberto Fernández, a moderate
Peronist, and Mr López Obrador.
Will change come at last to Latin America’s leftist dictatorships? In Cuba the Castro
dynasty will formally come to an end after more than 60 years. At a Congress of the
ruling Communist Party in April, Raúl Castro (aged 89) will step down as its first
secretary, having handed over the country’s presidency in 2019 to Miguel Díaz-Canel, a
younger party bureaucrat. (Raúl inherited both jobs from his elder brother, Fidel.)
Cubans will be watching to see whether Mr Díaz-Canel becomes head of the party too, or
whether he will share leadership, and whether the Stalinist or reformist wing of the
party comes out on top in the new politburo. The Castros aren’t quite finished: Raúl’s
son, Alejandro, runs the intelligence services.
Nicaragua’s dictator, Daniel Ortega, will use an election in November to inaugurate his
dynasty, seeking to turn his eccentric wife, Rosario Murillo, into his successor as
president. Electoral fraud is guaranteed, and so is a new wave of protests.
Venezuela’s political conflict will enter a new phase in 2021. The mandate of Juan
Guaidó, the opposition speaker of the National Assembly who is recognised as “interim
president” by almost 60 countries, ends in January. Nicolás Maduro, the country’s
dictator, has divided the opposition. But he has run out of money, thanks partly to
American sanctions. Having so far failed to oust Mr Maduro, the United States may
negotiate with him to try to achieve a return to democracy. The United States is due to
host the ninth summit of the Americas, involving all countries in the hemisphere, at
some point in 2021. Venezuela will be at the top of the agenda.