LATIN AMERICA SPECIAL — Political, economic transitions

North American mining companies continued to explore and develop properties throughout Latin America during the past 12 months, their stories overshadowed sometimes by political and economic events such as those in Mexico and Haiti.

The currency crisis in Mexico late last year sparked international concern not only for that country, which signed the North American Free Trade Agreement (NAFTA) at the beginning of 1994, but for the region as a whole. Following a devaluation of the peso by the government, Mexican stocks tumbled. The international community responded with a US$47.5-billion bailout package of loan guarantees, involving funding from the U.S. exchange stabilization fund, the International Monetary Fund and the Bank for International Settlements.

The currency collapse made for an inauspicious beginning for Mexican President Ernesto Zedillo, who took office at the first of December. Zedillo is the 12th consecutive president from the Institutional Revolutionary Party (PRI), which has ruled the country since 1929.

In Haiti, the installation of Emil Jonassaint as president last May by the military led to the threat of an invasion by international troops (comprising mostly American soldiers) in September, the stepping down of the military junta of Lt.-Gen. Raoul Cedras and the return of deposed President Jean-Bertrand Aristide. A general election has been called for June. Also going to the polls this year are Peru (in April) and Argentina (in May). The new Argentine constitution allows President Carlos Menem to run for a second term.

In Brazil, reform-minded Fernando Henrique Cardoso, who as finance minister was credited with bringing the country’s monthly inflation rate down to 2% from 45%, claimed the presidency in last year’s national election. And Panama elected a new president in 1994, millionaire businessman Ernesto Perez Balladares. Other presidents elected last year included Armando Calderon Sol in El Salvador, Ernesto Samper in Colombia and Julio Sanguinetti in Uruguay. Neighboring countries Ecuador and Peru nearly went to war early this year over a disputed jungle border area. Three weeks of fighting claimed the lives of soldiers on both sides before a new peace treaty was drawn up. Four nations — Brazil, Chile, Argentina and the U.S. — mediated the peace accord as guarantors of a 1942 treaty which was supposed to have settled the dispute (the focus of which was an 80-km unmarked stretch of the 1,610-km-long border).

On the “free trade” front, Chile has become the front-runner to join NAFTA; Canada favors expanding NAFTA, but the U.S. appears split over the idea. Chile has also initiated discussions towards playing an active role in the major South American trading bloc known as Mercosur (comprising Brazil, Argentina, Paraguay and Uruguay). Reaching a final accord last year on a free-trade agreement of their own were Mexico, Colombia and Venezuela. Cuba remains the odd-nation-out as far as the U.S. is concerned; the latter’s decades-old embargo continues. Canada has diplomatic relations with Cuba and is opposed to the U.S. embargo.