Latin America’s Election Clock is Ticking

Last year was a big one for Latin American elections, with 80% of the region’s voters choosing a new president. 2019 sees most of the rest up for grabs, with Guyana, Haiti, El Salvador, Guatemala, Panama, Uruguay, Bolivia and Argentina going to the polls. By the time the year is over investors will have a clear idea of the course that most of the region’s governments tend to take for the next few years. Canning House commissioned a LatinNews paper to investigate the factors at play in the coming elections and we’ve decided to focus in on the most relevant for UK investors.

Guyana – TBC

Not a typical destination for UK investors, and some would question if it’s even in Latin America, but Guyana’s recent mega oil discovery makes it an exciting target for British firms. A vote of no-confidence suggested a general election must be held by the 21st of March. That’s daunting for incumbent president David Granger, who won the 2015 election with a margin of just 0.6%. The election is crucial because the winner will hold power when first oil starts in 2020, giving them the potential to consolidate power for a very long time. However, with the date for a general election still not set the country is heading into uncharted political waters and may not see a poll until August.

Panama – May

Corruption is also the main issue in the small but strategic Central American isthmian state of Panama. The country has enjoyed some of the world’s highest economic growth rates over the last decade but both the governments that presided over the boom have been tainted with largescale corruption allegations. Little surprise then that the frontrunner in the May election is member of the PRD, which hasn’t ruled since 2006. Laurentino Cortizo, a former agriculture minister in the last PRD government, has a healthy lead in the polls. Barring a major mistake, the news cycle should protect this lead as ongoing judicial cases against former president Ricardo Martinelli will discredit the CD candidate, while the low approval rating of Juan Carlos Varela, the current leader, already seems to be damaging the chances of his PPA successor.

Guatemala – June

The subject of this edition’s LatAm INVESTOR country report is the largest economy in Central America and home to several big-ticket British investments in recent years. The election is due for June, with a second round to be held in August if necessary. The main issues are corruption, which was the downfall of the previous government, and the presence of UN-backed anti-corruption body, Cicig.

The discredited nature of Guatemala’s political establishment makes it hard to pick frontrunners…”

The election is complicated by efforts to dissolve political parties that broke funding rules, leading to a merry-go-round of familiar faces and new organisations. The discredited nature of Guatemala’s political establishment makes it hard to pick frontrunners though an ‘outsider’ candidate, such as former Attorney General and Cicig ally, Thelma Aldana, could well seize the initiative.

Argentina – October

Incumbent president Mauricio Macri was elected in 2015 to fix the economy. Despite returning some normality to the country’s economic system, he has also presided over plenty of instability with an IMF loan and recession in 2018. That’s weakened his hand ahead of October’s elections but he still remains the pollster’s favourite against of the established opposition figures. If the Peronist opposition could unite behind one candidate, it could beat Macri. Yet that looks impossible if divisive ex-president, Christina Kirchner runs again. The split between Kirchner’s hard-line Peronists and the moderate factions of the movement will also prove decisive in the federal legislative elections. The Peronists already hold the advantage in both houses but Macri has been able to work with moderates to pass legislation. If that split causes different Peronist factions to nominate competing candidates for national lawmaker posts then Macri may even be able to boost his allies in Congress despite a turbulent four years.

Bolivia – October

Bolivia has proved a tough spot for British businesses, with assets frequently being expropriated under the 14-year rule of president Evo Morales. However, his success at steering the metal and gas exporter through the commodity slowdown has created a resilient and dynamic economy. In October 2019 Morales will aim to win a 4th-consecutive term that is illegal, even according to the constitution he approved in 2009. His attempt to legitimise this latest presidential run in a 2016 referendum backfired when it was rejected by voters. However, despite the setback Morales, who used a legal loophole to run again, is favourite for the upcoming election. The opposition remains fragmented, with a former president and a regional governor splitting the anti-Morales vote. Either way, a new government, or a victorious but weakened Morales with less appetite for battling the private-sector, could create interesting opportunities for international investors.

Uruguay – October

Uruguay has had a left-wing government for even longer than Bolivia, with the incumbent FA holding the presidency since 2005. Unlike in Bolivia, the FA has been adept at switching presidents with two spells from current leader, Tabaré Vázquez, sandwiching José Mujica’s five-year term. Nonetheless it seems voters are starting to tire of the FA’s dominance with right wing opposition PN pulling ahead in some polls. The entrenched rule of FA is also encouraging talk of some previously unthinkable alliances between opposition parties. In addition to corruption, which is a theme across the region, a stagnating economy and rising crime have heightened the demand for change.