Many aspects of cryptocurrencies are baffling, not least the success of a joke like Dogecoin. But El Salvador’s recent adoption of Bitcoin as legal tender alongside the US dollar is perhaps the strangest and potentially most worrying example of all.
El Salvador this month [September 2021] became the first country to adopt a cryptocurrency – in this case, Bitcoin – as legal tender. I say the first, because others might follow. But they should think twice, because the idea is highly dubious – and likely to be economically dangerous for developing countries in particular.
I will admit that I don’t understand the need for cryptocurrencies at all. Like manyeconomists, I fail to see what problem they solve. They aren’t well designed to fulfill any of the classic functions of money – a unit of account, store of value, or means of payment – because their prices are so extraordinarily volatile. This volatility is not surprising, because cryptocurrencies are backed neither by reserves nor by the reputation of a well-established institution, such as a government or even a private bank or other trusted corporation.
Since the first days of Joe Biden’s presidency, his administration has insisted that the growing number of migrants being apprehended at the US-Mexico border is not a “crisis,” but rather a normal, seasonal spike. US officials have even argued that the controversy was concocted entirely by former President Donald Trump and other Republicans.
While the Biden administration was not totally wrong about Trump, reality has since rebutted its claims. The situation on the border today is indeed a crisis, both for the United States and Mexico. As of late September, some 15,000 migrants and asylum seekers, most of them Haitian, are sheltering from the sun under the International Bridge in Del Rio, Texas. They have brought the migration issue roaring back to the fore.
By Helen Clark, Olusegun Obasanjo, and Ricardo Lagos
With his evidence-based, public-health approach to drug policy, US President Joe Biden is signaling that America’s longstanding strategies of repression and punishment have failed. The US should also champion a similar shift toward harm-reduction policies internationally.
Fifty years ago this week, US President Richard Nixon declared that drug abuse was “public enemy number one” requiring a “tough on crime” approach in the United States and abroad. The “war on drugs,” which expanded in parallel with the global political, military, economic, and cultural hegemony of the US in the post-World War II decades, has delivered the exact opposite of its own stated aims. Today we have both plant-based and synthetic production; low-scale and high-level trafficking of illicit narcotics; disproportionate sentencing and over-incarceration; violence and rights violations; and money laundering and enrichment of organized crime – all strengthened, not weakened, by repressive responses to illegal drugs.
US-China tensions are unlikely to abate anytime soon, and Latin America will not be able to insulate itself fully from the fallout. But by heeding the lessons of the last three years, the region’s governments and businesses can better position themselves to succeed over the next three years and beyond.
Once a peripheral presence in Latin America, China has become one of the region’s most important partners. Bilateral trade expanded from $12 billion in 2000 to over $300 billion in 2020, raising China’s share of the region’s total trade from 1.7% to 14.4%. China has also become an increasingly significant source of foreign direct investment in Latin America, accounting for nearly 10% of inflows in recent years.
Colombians need political leadership that responds to the current anger in the streets with effective strategies to tackle the country’s social and fiscal crises, while relying on increased vaccination to defeat the pandemic. But with the radical right and populist left on the rise, expecting this anytime soon is wishful thinking.
While the United States and other advanced economies are returning to normalcy, Colombia reported its highest number of COVID-19 cases and deaths to date during the last week of June. Since early May, the country has been recording one COVID-19 death per 100,000 people per day – three times India’s rate.
Most of Latin America is still far from the horrific conditions prevailing in Venezuela, where output has fallen by a staggering 75% since 2013. But, given the ongoing humanitarian catastrophe there, and the specter of political instability elsewhere, investors should not take a sustained economic recovery for granted.
The current disconnect between market calm and underlying social tensions is perhaps nowhere more acute than in Latin America. The question is how much longer this glaring dissonance can continue.
By Nicole Tirado, Paula Gamboa, Tatiana Valenzuela, Yuliana Aborda, Roxanna Barrera and Diana Carolina Ortiz
Our history teacher says that, in the twenty-first century, citizens do not engage with political parties because what moves them now is the analysis of concepts and narratives that shape them as political subjects—as citizens with voices and rights. This implies awareness and the memory that, in Colombian history, fear has lived with us as another citizen. Part of Colombia’s origin has been violence, and with it comes fear; we know this, as do those who govern us. For this reason, nowadays we’re going through a national strike whose main slogan is fear. Current events are nothing other than the repetition of Colombian history: fear of death, missing people whose mothers mourn their absence, corpses that cannot be identified, and speeches that endorse violence by armed forces, who profess to defend the public good but not the public, not the people of their own country.