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This post starts a series of articles of Latin America during 2006. The year that was supposed to be many things, most of them negative, but ended up being a pretty positive one for the region. 

Part I: The year of too many Presidential Elections in Latin America

2006 was a year in which most of the large countries in Latin America held Presidential Elections.  This fact by itself was a source of major concern to people following Latin America.  Over the past two decades, Presidential elections meant lots of instability, devaluations, sudden changes of economic policy and a flight of capitals out of the region.  The flight of capitals was done both by locals as well as multinationals as they seek to protect their money under stronger currencies.

For large companies both local as well as multinationals, the risk associated with having multiple Presidential Elections meant keeping a close eye on many economic indicators.  You could have seen this scene repeated all over board rooms in Latin America: recurrent meetings to discuss political and economic developments in the main countries to be able to react to any negative trend on time.

The countries that held Presidential Elections in the region were: Brasil, Chile (end of 2005), Colombia, Ecuador, Mexico, Peru and Venezuela. Those countries easily amount for more than 80% of the regional output (actually just Mexico and Brasil get you to about 70%).  The risk therefore for let's say a company selling products into Latin America was quite significant.  Let's take for example 2002, the year of the last presidential election in Brasil.  The fears about having a leftist (Lula) win the Presidency were enough to devaluate the real to about half of its value and therefore many imported products in Brazil halted their sales.

And what happened?  Actually not much.  The elections themselves were pretty uneventful.  The campaigns were actually very eventful with all sides of the race on each country throwing mud at each other.  Corruption scandals were the norm in Brasil and Mexico prior to the elections, as Lula and Andres Manuel Lopez Obrador close allies were publicly exposed. 

But despite the very hot campaigns (sometimes even pre-campaigns) the elections were very uneventful.  The only exception to this was the Mexico election, a very close race that prompted the losing candidate AMLO to months of protests and eventually to a self-proclamation as "Presidente Legitimo". AMLO failed to substantiate his claims and the courts ruled unanimosly against him.  Here again, depite the turmoil, the institutional framework supported major challenges really well, the same as with the curruption scandals that hit the PT in Brasil.

2006, a year were politics were expected to mess with the good performance that Latin America has been showing since 2003.   Four years of economic expansion were expected to bring to a halt by politics. And yet they were not.  Latin American Democracy, with all its ups and downs, managed to grow stronger  in the region.  And it became more a part of life and less of a major concern.

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