A slew of over-reaching analyses have been written about the impact of Brexit on Latin America specifically and on emerging markets in general. While the UK’s decision to leave the EU certainly impacts the region in a limited fashion, Latin American governments have taken note of the media attention and are prepared to make Brexit a great scapegoat for their ongoing economic problems for at least the next quarter. Mexico announced pre-planned budget cuts, including some controversial cuts in education, the day the UK voted to leave. Argentine officials are happy Brexit artificially weakened the peso. At least one official in Venezuela made the ridiculous suggestion that Brexit was part of the economic plot against the Maduro government. Expect to see additional Latin American governments in the coming weeks point their fingers at the UK and Europe.
Despite China’s economic slowdown, the Inter-American Dialogue’s Chinese Finance to LAC in 2015 Report indicates Chinese policy banks financed US$29 billion in 2015 to Latin American and Caribbean governments and businesses, up US$19 billion from 2014. The main recipients of funding were Venezuela, Brazil, Ecuador, receiving 95 percent of of total lending to the region. The funds from the China Development Bank (CDB) and the China Export-Import Bank (Eximbank) were focused heavily on infrastructure projects, which ostensibly could assist in moving products (agricultural produce and extractives) from “fields to ports,” easing China’s ability to obtain the resources it needs from its Latin American partners.