Intertwined economic and political fortunes in the southern cone: The future of Brazil and Argentina

Both Brazil and Argentina are at crossroads, facing an array of issues that include political tensions, economic weaknesses, and allegations of corruption. Brazil’s President Dilma Rousseff was recently re-elected by a very small margin, and the Petrobras corruption scandal has weakened her government right from the start of this term. These problems could not come at a worse time for Brazil, with economic growth stopped in its tracks, fiscal balances deteriorating, and the country’s investment grade status compromised.

At the same time, Argentina is mired in recession, a weak fiscal position, high inflation, capital outflows, and a loss of reserves. The mysterious death of prosecutor Alberto Nisman has further complicated Argentina’s political outlook and has contributed to a general loss of trust in Argentina’s government.

As Brazil and Argentina are close regional partners due to a shared history of democratization, security cooperation, and regional integration, these major problems are likely to have spillover effects.

On April 20, the Brookings-CERES Economic and Social Policy in Latin America Initiative and the Foreign Policy Latin America Initiative hosted a panel discussion exploring how the economic and political fortunes of Brazil and Argentina are likely to unfold in light of these tumultuous events.