The Russia-Ukraine war: Vladimir Putin’s invasion upsets and divides America

The Russian invasion of Ukraine triggered a global earthquake Whose shockwaves rock even America, without a united vision from a political point of view and affected by the economic effects of the war.

Far from a common position, the American continent Is divided and so they arrive at the IX Summit of the Americas to be held next week in Los Angeles.

On the one hand, the United States, champions of international isolation in the government of Vladimir Putin, and on the other Cuba, Venezuela and Nicaragua, allies of Russia, a fundamental partner that helps them avoid the sanctions they also face from the West.

In the center, a whole amalgam of grays where the three great Latin American economies move: Brazil, Mexico and Argentina.

no common position

Most governments in the region condemn the ongoing conflict since February 24 which has caused hundreds of civilian deaths, albeit to varying degrees and with some “but”.

Colombia – NATO’s only “global partner” in Latin America -, Chile and Guatemala were the most energetic in repelling the invasion.

More distance has taken Brazil, Argentina and Mexicothe only Latin American members of the G-20 and, the latter two, non-permanent members of the United Nations Security Council in the current period.

The presidents of Brazil and Argentina, far right Jair Bolsonaro and Peronist Alberto Fernández, traveled to Moscow in February, oblivious to US warnings that war was about to break out, as it did days later.

After meeting Putin, Fernández offered economically suffocated Argentina as a gateway for Russian investments in Latin America and Bolsonaro declared “neutrality” of Brazil to guarantee the Russian fertilizers on which the powerful Brazilian agribusiness depends.

“My party is Brazil, we have business with Russia,” said Bolsonaro, who disavowed his vice president, Hamilton Mourao, after asking for military support from Ukraine.

In the midst of this belt game, neither Brazil nor Argentina, nor Bolivia or Uruguay supported a statement by the Organization of American States (OAS) on February 25, which it “strongly condemned the illegal and unjustified invasion” of Russia.

The Mexican sovereign, Andrés Manuel López Obrador, also sided with the “neutrals” and said he had “a lot of respect” for Putin.

“It is a very difficult time for an alliance between the United States and Latin America”, as there are insurmountable historical and economic differences, explained to Efe Aldo Rebelo, who was Minister of Defense in the Brazilian government of Dilma Rousseff (2011-2016 ). .

However, he believes the United States “is more worried with the position of Latin America in relation to China “, which has increased its influence in the region through large investments.

economic blow

While it was not significantly exposed to Russia and Ukraine in terms of investment and trade, the conflict and its global economic consequences had an impact on Latin America, reducing its growth prospects and exacerbating the inflationary pressures it had already suffered since the outbreak of the covid-19 pandemic.

Due to the impact of the war, the Economic Commission for Latin America and the Caribbean (ECLAC) recently lowered its 2022 growth projections for the region from an estimated 2.1% in January to 1.8%, well below the 6.2% recovery achieved in 2021.

Also the main trading partners of the region – the United States, China and the European Union will see their rate of expansion slowwith a predictable cut in demand from Latin America and the Caribbean.

The weak regional economic performance comes in the wake of higher inflation, due to high international energy and food prices, higher transportation costs and disruptions in global supply chains.

According to the most recent projections from the International Monetary Fund (IMF), consumer prices will grow this year in Latin America by 11.2%, from 9.8% in 2021.

“The main impact is increase in the prices of raw materials. The net effect of the price shock depends on the country. But overall, higher food and energy prices are contributing to inflation and negatively impacting household purchasing power, “Michael Heydt, senior vice president of Global Sovereign Ratings at DBRS Morningstar, told EFE.

However, for net commodity exporters, such as Colombia and Brazil, the negative effects of inflation would be offset by higher export earnings as a result of rising prices, Heydt noted.

In other countries, such as Argentina, there will be higher revenues from exports of cereals and derivatives, but heavy additional costs for importing energy.

In an effort to curb inflation, most countries in the region raised interest rates significantly.

“Central banks in the region and around the world are responding to rising inflation by raising interest rates, so tighter financing conditions will also act as a drag on growth,” Heydt warned.

EFE agency

PB