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Friday, November 18, 2011

Chile: Political and Economic Conditions and U.S. Relations


Peter J. Meyer
Analyst in Latin American Affairs

Since its transition back to democracy in 1990, Chile has consistently maintained friendly relations with the United States. Serving as a reliable but independent ally, Chile has worked with the United States to advance democracy, human rights, and trade in the Western Hemisphere. Chile and the United States also maintain strong bilateral commercial ties. Total trade has nearly tripled to over $17.9 billion since the implementation of a free trade agreement in 2004, and the countries signed an income tax treaty designed to boost private sector investment in February 2010. Additional areas of cooperation between the United States and Chile include investigating dictatorship-era human rights abuses, promoting clean energy technologies, and supporting regional security and stability.

Sebastián Piñera of the center-right “Coalition for Change” was inaugurated to a four-year presidential term in March 2010. Piñera’s electoral victory was the first for the Chilean right since 1958, and brought an end to 20 years of governance by a center-left coalition of parties known as the Concertación. Since taking office, Piñera has largely maintained the open economic policies and moderate social welfare policies of his Concertación predecessors while proposing reforms designed to boost economic growth and reduce poverty. He has struggled to implement his legislative agenda, however, as his political coalition lacks majorities in both houses of the Chilean Congress. Piñera has also struggled to deal with a series of large-scale protests and strikes over issues ranging from indigenous policy to the education system. The Chilean populace has resorted to such tactics to demonstrate its increasing dissatisfaction with the country’s political system, which it views as unresponsive to citizen demands. As the generalized sense of discontent has spread, Piñera’s approval rating has steadily declined—reaching 31% in October 2011. The political opposition has not benefitted from Piñera’s unpopularity, however, as public approval of the Concertación has fallen to just 14%.

With a gross national income of $170 billion and a per capita income of $9,950, Chile is classified by the World Bank as an upper-middle-income developing country. Successive governments have pursued market-oriented economic policies that have contributed to the development of what many analysts consider the most competitive and fundamentally sound economy in Latin America. This solid economic framework has helped the country weather recent shocks, such as the global financial crisis and a massive February 2010 earthquake. After a 1.7% contraction in 2009, the Chilean economy grew by 5.2% in 2010 and is expected to grow by 6.5% in 2011. Strong economic growth—paired with targeted social assistance programs—has also contributed to a significant decline in the poverty rate, which fell from 38.8% in 1989 to 19.4% in 2010.

Congress has expressed interest in a number of issues in U.S.-Chilean relations in recent years. During the 111th Congress, both houses passed resolutions (S.Res. 431 and H.Res. 1144) expressing sympathy for the victims of the Chilean earthquake, and the House passed a resolution (H.Res. 1662) commending the country’s rescue of 33 trapped miners. The 112th Congress could take up issues such as the U.S.-Chile bilateral income tax treaty that was signed in 2010 and is awaiting submission to the U.S. Senate for ratification.

This report provides a brief historical background of Chile, examines recent political and economic developments, and considers current issues in U.S.-Chilean relations.



Date of Report: November 9, 2011
Number of Pages: 24
Order Number: R40126
Price: $29.95

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Wednesday, November 16, 2011

Latin America and the Caribbean: Fact Sheet on Leaders and Elections


Julissa Gomez-Granger
Information Research Specialist

Mark P. Sullivan
Specialist in Latin American Affairs


This fact sheet tracks the current heads of government in Central and South America, Mexico, and the Caribbean. It provides the dates of the last and next elections for the head of government and the national independence date for each country.


Date of Report: November
9, 2011
Number of Pages:
6
Order Number:
98-684
Price: $19.95

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Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Thursday, November 3, 2011

Panama: Political and Economic Conditions and U.S. Relations

Mark P. Sullivan
Specialist in Latin American Affairs

Donald J. Marples
Section Research Manager


With five successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Antonio Noriega from power. Current President Ricardo Martinelli of the center-right Democratic Change (CD) party was elected in May 2009, defeating the ruling center-left Democratic Revolutionary Party (PRD) in a landslide. Martinelli was inaugurated to a five-year term on July 1, 2009. Martinelli’s Alliance for Change coalition with the Panameñista Party (PP) also captured a majority of seats in Panama’s National Assembly. Panama’s service-based economy has been booming in recent years, largely because of the ongoing Panama Canal expansion project (slated for completion in 2014), but economic growth slowed in 2009 because of the global financial crisis and U.S. economic recession. Nevertheless, the economy rebounded in 2010, with a growth rate of 7.5%, and strong growth is continuing in 2011.

The CD’s coalition with the PP fell apart at the end of August 2011when President Martinelli sacked PP leader Juan Carlos Varela as Foreign Minister. Varela, however, retains his position as Vice President. Tensions between the CD and the PP had been growing throughout 2011, largely related to which party would head the coalition’s ticket for the 2014 presidential election. The strength of the CD has grown significantly since 2009, and it now has a slim working majority on its own in the legislature. In the aftermath of the break with the PP, President Martinelli’s approval ratings dropped by 20 percentage points to about 46%. While President Martinelli had largely retained high approval ratings in the past, some civil society groups have criticized him for taking a heavy-handed approach toward governing and for not being more consultative. Critics also contend that President Martinelli has undermined the independence of the judiciary.

The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the Canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation; support to promote Panama’s economic, political, and social development; and a bilateral free trade agreement (FTA) recently approved by Congress. U.S. bilateral assistance amounted to an estimated $3 million for FY2011, and the FY2012 request is for $2.8 million. This funding does not include additional assistance to Panama allocated under the Central America Regional Security Initiative, a successor to the Mérida Initiative in Central America that assists countries in their efforts to combat drug trafficking and organized crime.

The United States and Panama signed the bilateral FTA in June 2007, and Panama’s National Assembly approved the agreement in July 2007. After more than four years, the U.S. Congress considered and approved FTA implementing legislation, H.R. 3079, on October 12, 2011, which President Obama signed into law on October 21, 2011 (P.L. 112-43). U.S. Congressional concerns regarding the FTA had included Panama’s labor rights and tax transparency issues, but the Obama Administration had worked with Panama to resolve concerns over these issues.

For additional information, see CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement; CRS Report R40622, Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama; and CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress.



Date of Report: October 2
5, 2011
Number of Pages:35
Order Number: RL3
0981
Price: $29.95

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Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing
.