Under a sky tinged blue, red and white, with the Andes in the background and the beating of the drums of the Pascua Island warriors, the Copa América 2015 kicked off in Chile.
Many consider it one of the best championships in the world, but this did not hold the World Bank from announcing, a few days earlier, that the economy in the region that produces a number of top players will score fewer goals this year. The axe of recession could fall on the first two favourites, Argentina and Brazil. The continent that produced Pele and Maradona will grow in 2015 less than expected, falling to a meager 0.4% from an already very disappointing 0.9% in 2014. Latin America “will need to buckle up because the road ahead looks bumpy,” warned Kaushik Basu, the chief economist of the World Bank. The World Bank’s report holds some surprises, however, which is what the peoples in Latin Americans expect from the event that featuring legends like Messi and Falcao, and top players like Sánchez, Vidal, Agüero, Di María, Tévez, Godín and Cavani, most will entertain them away from the gloomy economic outlook.
In Santiago de Chile, in a day that felt already like winter, the president, Michelle Bachelet, breathed a sigh of relief at the kick-off. The next three weeks will turn the attention her fellow Chileans — who never won a Copa América — from political scandals, and from a downward OECD growth forecast to 2.9% from the previous 3.2%. The prosperous years in the mining industry are over for the time being, and lower Chinese demand for copper weighted on margins, investment and confidence. That was shock for a nation that since the end of the dictatorship, in 1990, was an island of peace in a continent used to political and economic turmoil. Chile recently woke up to growing inequality, and to an economy that slows as never experienced in recent times. Should Alexis Sánchez lead the team of the Pacific country to a victory, the euphoria, so the economists predict, could even entice an appetite for consumption among Chileans.
Besides “triumph”, “hungry” is the other word heard most often these days in the twelve South American nations plus Mexico and Jamaica that participate in the championship. Javier Mascherano, whom the Argentine entrenador put in midfield, told the press that he was “hungrier than anyone” the very same day Argentines learned that in Buenos Aires, Borges’ and Pope Francis’ metropolis as well, those who suffer from hunger are by now 12% of the population.
Messi’s scores would bring great relief to president Cristina Kirchner too. She is in the midst of the mostserious politicalscandal Argentina has seen in years. Such a climate has been turning away foreign investments, and upped the cost of a 6 billion dollar loan to a puffed-out 27%. However, since the World Bank experts revised the nation’s growth upwards to 1.1% (+0.3% is better than nothing), in Argentina Kirchner is not alone hoping that with Tévez back, “Tata” Martino’s team could bring about the miracle.
The miracle in the end will be just one, but also Dilma Rousseff could use it. The leader of the government in the Portuguese-speaking country since 2011, she already had an extensive experience of the combination football/political-economic-honeymoon when Brazil hosted the World Cup last year (with mixed economic results as of now). The adjustments of an economic package, which could prove critical to shore up an economy beaten hardly by halved oil prices, are at stake. Brazil — the first letter of acronym BRICS — witnessed a fall of its GDP already in the wake of the Great Recession in the US and Europe, to 2.7% in 2011 from 7.5% in 2010. In 2015 it could slip to a long-not-seen0.9%. The nation, whose green-yellows can count on Neymar and Thiago Silva, faced major corruption storms with serious economic fallbacks: in little more than six months, Petrobras, the fourth oil company in the world, lost half of its share value.
The teams seem to have quietly accepted surprise anti-doping controls. Among these is Uruguay — the smallest country in the world to have won a World Cup — which is recording these days an explosion of legal marijuana trade. Nobody dares forecasting an economic fallout from the legalization of cannabis, nor has anyone yet, however, dared pointing to a negative one. Uruguayans can do with an IMF growth forecast of 2.8%.
Challenging the traditional champions this year is Colombia, engaged in difficult peace talks with the guerrillas. FARC’s power has been weighing on the Colombian economy for decades now. Reflecting the “complex transition” in the entire subcontinent, Colombia’s GDP forecast was lowered too to a still decent 3.5%. Cuadrado is confident on how the Colombian team will perform, despite the fact that it will play against poorly-tolerated Venezuela, whose team is also “hungry for victory.”
The condition of 26 political prisoners, among which two opposition leaders, on hunger strike for two weeks now to protest the Bolivarian military regime’s jailing of opponents, is instead dramatic. Knowing that in Venezuela almost the entire population has it very hard finding basic products such as milk or flour is of poor solace. In the short term, few in Venezuela bet on some miracle, such as a rise of the prices of oil. Their collapse expanded the effects of the disastrous management of the economy, and in 2015, the Venezuelan GDP could fall as much as -7.0%, according to IMF.
The smaller teams will try to surprise, especially since they did already impress with varying economic recipes. Panama will grow by 6.1%, the Dominican Republic by 5.1%, Nicaragua by 4.6%, Bolivia by 4.3%, Paraguay by 4.0% and Peru by 3.8%.
Rather than betting on their teams, some of these countries betted on stability, others on opening their markets and on export diversification. Those that import raw materials — Panama, Nicaragua and the Dominican Republic — benefited from lower prices.
Bolivia is a case in itself, because its economy depends almost entirely from oil and from natural gas in particular. On the Bolivian Andean highlands, GDP fall will be contained, and the recent wage increases even stimulated domestic consumption. Between one nationalization and the following, The government allocated towards public investments almost all proceeds of the commodity boom. That was an intelligent use of those funds, Fitch explains.
The government of Paraguay too leveraged on exports becoming the eighth largest producer of beef in the world. Now many fear that in Chile the Paraguayans will show the same dynamism with their young team that seems to have chosen an aerial game.
Bets placed on Mexico pay more — their team reflects some of the fragility in the economy, and the resulting poor business climate. The recovery in the US, however, will allow the Aztec tiger to grow by a 2.6%.
The 44th Copa promises to be as exciting as ever: many teams have a champion pedigree, and many of the players are already stars in the ‘big European club’. However, the economy can score tricky shots too. In Latin America one can hear now unusual phrases such as: “A professor is worthier than Neymar”, “Japan: take our best football for your education” or “Once upon a time there was a people that knew more about rights than about football”.
The World Bank is forecasting an average growth of 2.9% for the sub-continent for 2016, with some improvement in 2017, but for these odds the Latin American booker pays still a lot.
Many consider it one of the best championships in the world, but this did not hold the World Bank from announcing, a few days earlier, that the economy in the region that produces a number of top players will score fewer goals this year. The axe of recession could fall on the first two favourites, Argentina and Brazil. The continent that produced Pele and Maradona will grow in 2015 less than expected, falling to a meager 0.4% from an already very disappointing 0.9% in 2014. Latin America “will need to buckle up because the road ahead looks bumpy,” warned Kaushik Basu, the chief economist of the World Bank. The World Bank’s report holds some surprises, however, which is what the peoples in Latin Americans expect from the event that featuring legends like Messi and Falcao, and top players like Sánchez, Vidal, Agüero, Di María, Tévez, Godín and Cavani, most will entertain them away from the gloomy economic outlook.
In Santiago de Chile, in a day that felt already like winter, the president, Michelle Bachelet, breathed a sigh of relief at the kick-off. The next three weeks will turn the attention her fellow Chileans — who never won a Copa América — from political scandals, and from a downward OECD growth forecast to 2.9% from the previous 3.2%. The prosperous years in the mining industry are over for the time being, and lower Chinese demand for copper weighted on margins, investment and confidence. That was shock for a nation that since the end of the dictatorship, in 1990, was an island of peace in a continent used to political and economic turmoil. Chile recently woke up to growing inequality, and to an economy that slows as never experienced in recent times. Should Alexis Sánchez lead the team of the Pacific country to a victory, the euphoria, so the economists predict, could even entice an appetite for consumption among Chileans.
