For 2016, Latin America gets F's. Not in the traditional schoolhouse grades sense, because the news from the region this year has actually been mixed and some of it has been quite good. Rather, many of the top stories of the year begin with this particular letter of the alphabet. To wit:
• Fuera and Fora: These respective Spanish and Portuguese words, when used with the name of a president or political leader, roughly mean, "get out and don't let the door hit you on the way." The message has been delivered loudly, clearly, and repeatedly, in country after country. That's why the biggest 2016 story in Latin America has been dramatic changes in leadership across the region, accelerated by street protests and anti-corruption initiatives, not just in government personnel but also in fundamental governing philosophies from populism to pragmatism. New governments have charted meaningful course corrections in Argentina (elected at the end of 2015) and Brazil, a new president in Peru launched a bold reform agenda, and an opposition-led legislature was seated in Venezuela. Meanwhile, Bolivians rejected a referendum that would have allowed the current president to run for a fourth term, and the President of Ecuador announced that he is stepping down at the end of his mandate. Clearly, citizens in Latin America have tired of the previous model, funded by a commodities boom and politically-motived spending and corruption, and are looking for a new direction. The one incumbent who was decisively re-elected was Nicaragua's Daniel Ortega, who changed the rules of the electoral game, disqualified opposition leaders, and designated his wife as Vice President and potential successor. If Nicaragua is still considered a democracy, it is not a healthy one.
• Finances: Unfortunately, the economic recovery that voters seek is slow and growth remains sluggish, in part because reforms that should have been made in previous years have lagged, commodities markets remain soft given slower growth in China, and austerity is now a significant part of the political and economic conversation. South America's largest economies Brazil and Argentina are in recession, whereas Venezuela's is suffering a full-on depression. Mexico is growing, but not at the rates promised by the President when he pushed through the reform agenda beginning in 2012; energy and other reforms are being implemented successfully but the benefits have yet to course fully through the economy. Coupled with the likelihood of raising interest rates in the United States and an appreciating dollar, Mexican and broader regional growth may be further restrained in 2017 as global investment flows decrease to emerging markets, although exports to the United States will become more competitive. A further increase in economic uncertainty will add to popular frustration especially among the millions of relatively recent arrivals to the middle class. Calls for further political changes would then become louder, targeting the broader ruling class.
• Failing State: Perhaps the first foreign policy crisis of the incoming Trump Administration will be in our own hemisphere. Venezuela is a failing state, unable to provide basic food, medicine, and services effectively to its citizens. Latin America's previously wealthiest nation has been wrecked by 17 years of the Bolivarian Revolution. State institutions including the courts, central bank, national energy company, and the school system have been bent to the will of the executive. Common crime and corruption are out of control. The government of Nicolas Maduro has now severely restricted most avenues for peaceful political dialogue, including the press and a constitutionally-supported presidential recall referendum. The legislature, though controlled by the opposition, has been emasculated by the Chavista-controlled Supreme Court. An upturn in the price of oil, Venezuela's sole commodity, would marginally increase resources to the state to allow for increased imports, but this does not appear likely in the near term. Meanwhile, a humanitarian crisis gathers and, worryingly, the potential for violence increases into the new year.
• FARC: After more than 50 years, Colombians signed a peace agreement with the largest armed group operating in the country. Negotiated for over four years, the agreement was initially rejected by the Colombian people in a nationwide plebiscite October 2. President Santos was nonetheless awarded the Nobel Peace Prize, which arguably restored some momentum for concluding a deal. After consultation with the Colombian opposition and the renegotiation of several sticking points, the legislature passed a new agreement and the Supreme Court has given authorization to fast track the implementation process. Negotiations with the remaining armed group, the smaller ELN, have also now begun. The fight for lasting peace will potentially be as long and difficult as the fight against the guerrillas. Colombia's recovery from dark days in the 1990's, with billions of dollars of tangible support from the United States, has been a bipartisan foreign policy achievement; continued support to build lasting success is very much in the U.S. interest.
• Festival: As in the Rio 2016 Summer Olympic Games, South America's first Olympics, and only the second held in Latin America after Mexico City in 1968. Rio put on a show as only Brazilians can. Despite numerous predictions of disaster, from unfinished venues to unsold tickets to a zika epidemic, the Games were of the highest quality with numerous memorable moments and scintillating performances. Rio is practiced in hosting major international events, and it showed. Still, questions have arisen about the legacy of the Games, particularly for the broader Rio community. Unequal redevelopment, corruption, and increasing crime are all growing concerns, if not directly attributable to the Games. Reality has now hit, and the ultimate legacy of Rio 2016 remains to be chronicled even as the world looks forward to Tokyo in 2020.
• Fidel: What more is there to say at this point that has not already been repeatedly said? He's gone.
• Free Trade: Even as Latin America and Canada moved ahead with a trade expansion agenda in 2016, the United States signaled a desire to pull back. The Trans-Pacific Partnership, which includes Canada, Chile, Mexico, and Peru, was attacked by leading candidates from both major political parties during the campaign, with President-elect Trump declaring his intent to withdraw from the agreement upon taking office. Likewise, the foundational U.S. trade agreement, NAFTA, which has developed fully integrated and meaningful supply chains to improve global competitiveness, could soon be up for review and even renegotiation. In the meantime, China is taking advantage of a growing vacuum by promoting a vision of trade with Latin America that minimizes the traditional U.S. role. It is no surprise that this should be an attractive option for nations that already trade with China, who are looking to identify new engines of growth to counteract the downside of the global commodities super cycle, and who may now have reason to question the direction of future U.S. engagement. Without an active, positive trade and commercial agenda, the United States will continue to lose ground in the region.
• Frontiers: Citizens who seek economic opportunity, or who are desperate to leave dangerous circumstances, or both, will continue to attempt the dangerous border crossing into the United States. While net migration from Mexico is now zero, migration from Central America and elsewhere across the region continues apace. (More migrants actually now come to the United States from Asia than Latin America.) The economic reality is that the United States needs workers from abroad to fill jobs that drive economic growth. Building walls or targeting communities of migrants will only exacerbate these issues, while also driving a wedge between the United States and sending countries in Latin America and the Caribbean from whom Washington needs cooperation to address a range of other issues such as narcotics trafficking and law enforcement. Frontiers are the windpipe of the U.S. economy. They can be managed better, certainly, but neglecting to balance security with business concerns will generate significant economic, social, and foreign policy costs, to the detriment of the United States.
• Fly the W: After more than 100 years, the Cubs finally won the World Series. This doesn't have much to do with regional affairs, but as a long-suffering fan, I just can't help saying it. Of course, the Cubs arguably could not have won without a corps of supremely talented players with Latin American heritage. So, there's that...
The coming year in the region will continue to be active. Watch this space.