Argentina is a country of perennial economic crisis, and the population has traditionally sought refuge from currency fluctuations in the greenback — which is why president-elect Javier Milei’s promise to throw out the peso in favor of the U.S. dollar was so popular, reports the New York Times.
Argentina has had previous experience with a peg that made the peso equivalent to the dollar, under former President Carlos Menem. While the experience ended disastrously, with recession, wiped out savings, and a massive social and political crisis, it initially brought an “illusion of stability,” reports El Pais.
Most economists from across the political spectrum disagree with dollarization as a viable plan for Argentina. “When a disaster strikes, things get scary in a dollarised economy. There is no central bank to act as lender of last resort to either the government or the banking system. Defaults thus become much more likely,” argued The Economist in September.
Indeed, even Milei has backed away from immediate action on the issue. Reports yesterday indicate that a former functionary of conservative former President Mauricio Macri is in the lead to head the incoming administration’s economic portfolio, edging out Milei’s own dollarization guru. (Buenos Aires Times)
There are three countries in Latin America that have already adopted the U.S. dollar as their official currency: Panama in 1904, Ecuador in 2000 and El Salvador in 2001. Dollarizing would mean substituting all Argentine pesos in circulation with greenbacks — a move that requires about $30 billion dollars the country doesn’t have, according to some estimates, and would imply a massive devaluation, reports El País.
The dollarization experiences of Ecuador and Zimbabwe are illustrative of some of the pitfalls of Milei’s plan, reports Reuters.
Brazil
Brazil could reach historically low levels of deforestation in one to two years, as the country ramps up conservation efforts under President Luiz Inácio Lula da Silva, according to the administration’s environmental agency head. Deforestation has fallen since Lula took over the presidency this year, following significant increases under his predecesor, Jair Bolsonaro, reports Reuters.
Brazil's emissions surged under Bolsonaro, erasing recent progress to return to the levels of more than 15 years ago, according to the Climate Observatory, a Brazilian coalition of environmental groups. (AFP)
Brazil is poised to create one of the largest regulated carbon markets in the world — the bill has safeguards allowing indigenous peoples to participate in the market as partners, though there are fears a green gold rush will just put indigenous lands under greater pressure, reports Reuters.
Lula vetoed a bill which was set to extend a payroll tax exemption to some 17 sectors until 2027, reports Reuters. The move comes as the government searches for ways to increase its revenue in order to improve public accounts, with the goal of erasing its fiscal deficit by next year. Finance Minister Fernando Haddad said the government will introduce measures to help the affected sectors.
Haiti
“The future of Haiti’s most powerful gang alliance, the G9, is at risk following a series of deaths of its gang leaders,” reports InSight Crime.
Haiti's Center for Human Rights Analysis and Research (CARDH) is provisionally suspending its work due to imminent danger to its staff, in the midst of increasing gang violence in Port-au-Prince, reports Reuters.
Haitian law enforcement authorities said a man belonging to a violent gang accused of kidnapping four U.S. citizens has been extradited to the U.S. (Associated Press)
More Argentina
Former U.S. President Donald Trump spoke with Argentina’s president-elect Javier Milei and promised to travel to the South American country for a meeting, according to Milei’s office. (Associated Press)
“ Milei’s victory truly does represent a seismic shift in Argentine politics, the radical untuning of its political sky,” writes David Rieff in The New Republic.
Mexico
The Mexican National Guard captured Nestor Isidro Perez Salas, or "El Nini," who is accused of heading security for the faction of the Sinaloa Cartel headed by the sons of founder Joaquin "El Chapo" Guzman and is seen by U.S. anti-narcotics agents as one of the most ruthless Mexican drug figures, reports Reuters.
Prosecutors said that three journalists and two of their relatives have been abducted by armed men in Mexico’s Guerrero state, reports the Associated Press.
Colombia
Former Colombian president Álvaro Uribe will appear before the attorney general's office next week over a 1997 paramilitary massacre, reports AFP.
Migration
Many of the millions of Venezuelans living in Colombia have brought their love of baseball to the soccer-passionate country, creating community and a space for integration, reports the New York Times.
Regional
South Africa, Colombia and other countries that lost out in the global race for coronavirus vaccines are taking a more combative approach towards drugmakers and pushing back on policies that deny cheap treatment to millions of people with tuberculosis and HIV, reports the Associated Press.