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Brazil and Mexico: New Year, Different Directions

MIN READJan 4, 2019 | 16:19 GMT

Mexican President Andres Manuel Lopez Obrador answers questions during a news conference in Mexico City on Dec. 14. His government's populist agenda could increase risks for investors.

(ALFREDO ESTRELLA/AFP/Getty Images)

In 2018, populist candidates in Latin America's two largest countries rode a wave of public disillusionment to the presidency. During 2019, new opportunities and risks will open up for investors as these new leaders attempt to deliver on their campaign promises. In Mexico, leftist President Andres Manuel Lopez Obrador will try to right what he perceives to be historical wrongs by pushing for greater resource nationalism and by giving voters more power over government affairs and public works. These moves could create obstacles that end up alienating investors. In Brazil, President Jair Bolsonaro will move to give agribusiness and mining greater leeway on off-limits indigenous lands. But this shift in policy, compounded by tighter social spending, will drive unrest against his administration, and investors could get caught up in the backlash....

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