Latin America has largely stayed out of the headlines in recent months, which have instead been dominated by the changing landscape in the US and Europe. But behind the scenes the continent is going through a dynamic transition, as illustrated by the collection of articles accompanying this month’s Bulletin cover story. David Smith writes the inaugural piece in a new OMFIF series on ‘World Leaders in 2017’, presenting the challenges and opportunities for Argentina’s President Mauricio Macri as he wrestles with his country’s economy. Reforms and the resolution of corruption scandals will be vital for Brazil, argues Winston Moore, but the economic fundamentals remain sound. Colombia is more exposed to the vagaries of the international economy, argue Ricardo Adrogue, Brigitte Posch and Michael Simpson. President Nicolás Maduro’s demonetisation experiment in Venezuela has brought the economy into chaos. Steve Hanke proposes dollarisation as a potential solution. This will become increasingly difficult to implement, however, as the dollar gathers further strength. Darrell Delamaide suggests that the Federal Reserve will tighten faster than the current dot plots suggest. Donald Trump’s expansionary policies would motivate such an approach, with more investment needed to reinvigorate the country’s infrastructure, argues Meghnad Desai. But, as Marsha Vande Berg reminds us, we should prepare for unintended consequences from changes in policy direction. The impact on emerging markets will be mixed, too. OMFIF’s Fed vulnerability index – presented in the latest report by OMFIF Research – ‘Trump: Curse or Cure?’ – presents a mixed picture for emerging market exposure to dollar strengthening.
The third Focus report in our series on global financial centres profiles Singapore. In an exclusive interview, Ravi Menon from the Monetary Authority of Singapore highlights the advantages of Singapore as a gateway between Asia and the rest of the world. This is thanks to its evolving role as a hub for renminbi trading and for Chinese companies looking to finance regional expansion, write Ben Robinson and Adam Cotter. Singapore’s appeal hinges on attitudes towards globalisation in Asia and the West. Antonio de Lecea proposes a model for East-West co-operation to promote globalisation while correcting for its distributional effects. China’s President Xi Jinping has emerged as the new proponent of globalisation, writes Adam Cotter. This has caused some to hail China as the new de facto world leader. However, when polled the majority of our Advisers Network said it was too soon for China to take over from the US in terms of world leadership. Bank of Thailand Governor Veerathai Santiprabhob draws attention to the impacts on inflation from changes in the structure of trade and rising competitive pressures. Mirsolav Singer, former Governor of the Czech Central Bank, further notes the importance for central bankers to resist pressure to increase their inflation targets as the pace of price increases accelerates. Monetary troubles are particularly acute in Europe. Andre Szasz’s obituary, written by Roel Janssen, reminds us of the reservations held by one of the architects of Europe’s common currency. We round off with two book reviews. William Keegan highlights the lessons from Ken Clarke’s five decades in British politics in his memoir Kind of Blue. Rachel Pine reflects on the history of behavioural economics through the story of Daniel Kahneman and Amos Tversky in The Undoing Project by Michael Lewis.