South America

In the next five years, South America will see more frequent changes in governments as a result of public dissatisfaction over economic mismanagement, widespread corruption, weak economic performance due to softer Chinese demand for commodities, and social stresses associated with new entrants to the middle class and the working poor. These conditions will also jeopardize the region’s significant progress against poverty and inequality of the previous 20 years.

  • An anti-incumbency wave is reversing the leftward trend that marked politics in parts of the continent in the past 10 years, most notably in defeats of leftists in the 2015 Argentine presidential election, the 2015 Venezuela parliamentary vote, and Brazilian President Rousseff’s 2016 impeachment. Nonetheless, some incumbents facing rejection are seeking to protect their powers, which could lead to a period of intense political competition and possible democratic backsliding in some countries.

Paradoxically, some of the recent successes of the region’s left are increasing the appeal of market-friendly ideas concerning rule of law and economic and social management. In the past dozen years, poverty and inequality have declined considerably in Latin America because of rising wages, greater access to schooling, and increased female employment. In 2003, 41.3 percent of the region’s people lived below the poverty line, but by 2013 this figure had fallen to 24.3 percent. Latin America’s middle class, defined as people with incomes of $10 to $50 per day, grew from 21.3 percent to 35.0 percent of the population during this period.

  • A recent UN study, however, finds that poverty has begun to increase again—from an estimated 168 million impoverished in 2014 to 175 million in 2015—because of the region’s economic slowdown. One of the chief causes for the slowdown is the dramatic drop in commodity prices, down 40 percent since their peak in 2011. Weak growth is likely to strain governments’ budgets and depress already globally low rates of investment.
  • The rise of evangelical Christianity in Brazil, and to a lesser degree elsewhere, will create new political forces that stress the rule of law and less government regulation, views that have lower-class support. In Brazil, the growing political strength of Evangelicals—roughly a fifth of the population—has shifted from an early alliance with leftist leaders to a more conservative agenda on issues such as abortion while seeking to address the needs of its poor and middle class members with a push for education. In the spring of 2016, the evangelical caucus, known as the “Bible block,” helped drive the effort to impeach President Rousseff on corruption charges. However, charges of corruption against several Evangelical politicians in Brazil could damage their political clout.

Crime and corruption are likely to remain major political liabilities for incumbents whom the public blames for weakened employment prospects, while drug trafficking and organized crime geared toward northern markets will become more prominent. Both developments will raise security concerns and stoke public dissatisfaction that could topple governments perceived as ineffective against or enabling graft or criminal activity.

  • Latin America is one of the most violent regions in the world in terms of crime and is responsible for nearly one-third of homicides worldwide, according to a UN study. Brazil and Venezuela have among the highest murder rates in the world.
  • Crime will remain the top public concern. Opinion polls suggest that many citizens identify crime as the most serious problem facing their countries, but economic concerns will probably gain more prominence as countries manage slowing economies. Countries affected by large drug trafficking organizations may see an increase in violence as well as erosion of the quality of their institutions and the authority and legitimacy of their governments.

The general lack of structural reforms—in fields ranging from education and health care to infrastructure, productivity, and taxation of the informal economy—suggest that the region stumbles as the external economic environment becomes less favorable and competition for foreign investment stiffens. Successful resolution of Colombia’s conflict would present a chance for development that might boost economic growth.

  • Some fledgling but newly empowered and productive members of the working poor and middle class bristle at supporting social welfare taxes for those they perceive as lazy or corrupt.
  • Increasing economic and humanitarian pressure in Venezuela could lead to a further crackdown by current President Maduro, but the loyalty of the military is uncertain, and there is a risk of humanitarian crisis that might send more refugees to neighboring countries and possibly the United States. Additional collapse in Venezuela probably would further discredit the leftist experiments of the past decade in Latin America and increase pressure to focus on improving economies.
  • Health systems in the region are important sources of political legitimacy and state-building, arguably more than in other regions. Aging populations threaten the sustainability of health systems, and health care costs will dampen economic growth. The ongoing threats of the Zika virus and dengue fever put additional pressure on the region, especially the poorer populations.

Geopolitical Relevance of Region in Next Five Years: Political Economy. South America’s relevance as a geopolitical actor will remain muted in the next five years but it—along with Africa—will bear the brunt of the drop in Chinese demand for commodities, continued low oil prices, and near-term environmental and climate challenges. Some commodity-dependent states will struggle to manage the global economic slowdown and will look to IMF programs and free trade to promote growth and employment. Brazil probably will join Argentina in turning toward better regional relations and increased regional trade.

  • We expect Brazil and other countries to remain influential voices on international climate change policy, especially if citizens increasingly view the environment as something other than a source of financial profit. Countries bordering the Pacific are particularly affected by El Niño events, which alter rain patterns to cause heavy precipitation and flooding in some areas, drought in others, and climate models suggest that El Niño events will become larger. The 2015-16 El Niño, the largest on record by some measures, aggravated Brazil’s recent drought, its worst in almost a century, affecting issues as diverse as Sao Paolo’s drinking water supply, hydropower production, and Zika transmission. Nevertheless, greenhouse gas emissions by countries in the region are likely to remain significant, given middle class demand for cars in Brazil and its energy sector’s belief that aggressive forestry can offset carbon emissions.
  • South America’s remaining left-leaning ALBA (Bolivarian Alliance for the People of our America) countries—Bolivia, Ecuador, and Venezuela—will continue to court support from Beijing and Moscow. China, in particular, has been generous with loans that strengthen the incumbents but have had mixed economic effects. Venezuela has long relied on Chinese financing to stay afloat, but Beijing has cut back on its largesse and is moving more closely to World Bank-like lending criteria that the ALBA countries are unlikely to meet. Large-scale instability and economic collapse in Venezuela looks likely, absent a change of government and major economic reform, and even these may not prove sufficient without substantial outside assistance.
  • Regional security threats will grow, with the threat of large-scale instability in Venezuela, booming coca production in Colombia fueling crime in Central American and Mexico, and the persistence of drug trafficking and organized crime throughout the region. As illicit markets grow in many countries of the region, violence—and political and security institutions weakened by corruption—will become more pressing concerns. Latin American governments will press the United States and other developed countries to legalize drugs.

Other Considerations. The rightward turn in the region could be slowed or halted by corruption scandals in conservative governments. Other trends to watch are failures of governments— leftwing or rightwing—to narrow the socioeconomic gaps as economies slow. Such failures may lead to increasingly polarized societies, in which class, ethno-racial, and ideological cleavages largely reinforce each other. These inequalities could fuel the growth of indigenous and Afro-Latino movements in some Latin American countries in the years ahead.

The Zika epidemic that began in Brazil in 2015—declared a public health emergency by the World Health Organization—has radiated throughout the Americas, including clusters of infections in Puerto Rico and the southeastern US. Because Zika has been shown in some cases to damage neurological development during fetal gestation, the epidemic poses a potential new form of upheaval in women’s health. Maternal fears about giving birth to microcephalic infants—worsened by the many continued unknowns about the virus’s spread among populations—have provoked major changes in how people in the region travel, plan families, and conduct daily life. If Zika becomes permanently established throughout the Americas, the repercussions would intensify as governments seek to cope with and counter the epidemic’s impact across generations.

Infographic - Brazil's Population Projection of 233,006,000 in 2035

aEstimates for religious affiliation are based on data from the World Religion Database and are rounded to the nearest one-tenth of a percent.

bTotal Fertility Rate is the projected average number of children born to a woman if she lives to the end of her childbearing years.

Note: Demographic data is presented for countries estimated to have the largest population in each region in 2035.