Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: Bolivia elects a new president, Uruguay legalizes euthanasia, and the IMF issues a report card on regional economies.
Mr. Paz in La Paz
Center-right candidate Rodrigo Paz won decisively in Bolivia’s presidential runoff election on Sunday, ushering in a new political era for the country. For most of the past two decades, Bolivia has been run by the leftist Movement Toward Socialism (MAS) party of former President Evo Morales.
But disillusionment with MAS was so great that the party did not make it to this year’s runoff. That left voters to choose between Paz, a senator, and right-wing candidate Jorge Quiroga. On Sunday, Quiroga quickly acknowledged Paz’s victory. So did Morales, who previously criticized both candidates and asked his supporters to spoil their ballots.
Maps of the vote breakdown indicate that much of MAS’s Indigenous and working-class base put their hopes in Paz. Like Quiroga, Paz promised pro-market reforms—but unlike his right-wing opponent, he suggested that they would be gradual rather than abrupt. Paz espoused what he called “capitalism for all,” including for the benefit of poorer Bolivians.
The country’s deep economic crisis appears to have driven many Bolivians to seek a change. Annual inflation was at 23 percent in September, and fuel shortages have caused long lines at the pump. A dearth of U.S. dollar reserves has also cast doubt over whether the government can make upcoming debt payments to international lenders.
Bolivia will now become the latest test case of a pro-market economic overhaul in South America, around two years after President Javier Milei began a similar mission in Argentina. Both leaders aim to shake off government controls of the economy built up over decades.
Paz said during the campaign that he aims to reduce public spending to rein in Bolivia’s deficit and cut red tape to attract private investments. That includes in the country’s vast lithium flats, where mining is inching forward amid heavy state control.
Still, Paz’s platform is less extreme than Milei’s shock therapy. Bolivia’s president-elect said that he would not “sell out” the country’s main Uyuni salt flat, and that foreign investment there should benefit the local region.
Paz also appears to differ from Milei on foreign policy. Milei has prioritized ideological alignment with the Trump administration, verbally insulted left-wing political leaders in neighboring countries, and criticized regional cooperation initiatives.
In contrast, Paz has given signals that he will be more pragmatic. He named the United States and Brazil—currently led by leftist President Luiz Inácio Lula da Silva—as key countries to work with. In the short term, Bolivia will seek to buy fuel from the United States as well as from fellow Mercosur countries, an economic advisor to Paz’s party said.
Bolivia officially joined Mercosur last year and is in the middle of a multiyear transition process to adapt its regulations to match the bloc’s standards. Although Mercosur has announced multiple trade agreements since Bolivia joined, the country did not immediately enter them. Paz said this week that Bolivia would hold off on joining the bloc’s trade talks until it has “put its own house in order.”
In the meantime, Paz has considered taking out loans to support his reforms from regional lenders such as the Development Bank of Latin America and the Caribbean and Fonplata Development Bank. Though Quiroga vowed to go to the International Monetary Fund (IMF) for support, Paz has been reserved about whether he would take that step.
Paz will have more evidence on what economic liberalization tactics do and don’t work in just a matter of days: On Sunday, Argentines will vote in midterm elections broadly considered to be a referendum on Milei’s reforms. That vote could bolster the IMF and the Trump administration’s reputation as economic partners—or dilute it.
Upcoming Events
Friday, Oct. 24, to Monday, Oct. 27: Brazilian President Luiz Inácio Lula da Silva visits Indonesia and Malaysia, where he will attend the ASEAN summit.
For more on the ASEAN summit, check out the latest addition to FP’s slate of regional newsletters: Southeast Asia Brief, by Jakarta-based journalist Joseph Rachman.
Sunday, Oct. 26: Argentina holds midterm elections.
Monday, Oct. 27, to Thursday, Oct. 30: Peru hosts a session of the Intergovernmental Panel on Climate Change.
What We’re Following
Bukele’s backroom deal. U.S. President Donald Trump’s deportation deal with El Salvador this year repatriated Salvadoran gang members who had become key informants to the United States about the criminal network MS-13, the Washington Post reported this week.
Informant agreements are generally based on assurances that the U.S. government will protect cooperators. “The deal is a deep betrayal of U.S. law enforcement, whose agents risked their lives to apprehend the gang members,” Douglas Farah, a contractor who helped investigate MS-13, told the Post.
In another step that could hamper intelligence gathering about criminal groups, Trump said on Sunday that he would cut remaining U.S. aid to Colombia, responding to Colombian President Gustavo Petro’s criticism of the U.S. military campaign against alleged drug boats near South America.
As of Wednesday, U.S. officials have reported killing 37 people in those strikes. Trump has already curtailed much U.S. assistance to Colombia; what remains includes law-enforcement cooperation against organized crime.
Uruguay legalizes euthanasia. Last week, Uruguay became the first Latin American country to legalize euthanasia via legislation. Uruguay has long been a pioneer for progressive social reforms. Even center-right governments have kept in place policies such as marijuana and abortion legalization.
Around two-thirds of the country’s lawmakers voted in favor of legalizing euthanasia in a bill called “Dignified Death”; a recent poll said that at least 60 percent of Uruguayans were in favor of the move, which came after Colombia and Ecuador previously decriminalized euthanasia through court decisions.
The Catholic Church, however, remained opposed. Coincidentally, the vote came as Uruguayan President Yamandú Orsi visited Pope Leo XIV at the Vatican. The pair had a lengthy exchange on the topic, Orsi said. Leo has voiced opposition to euthanasia in the past, but Orsi said he did not treat the issue as off-limits for discussion.
The Chilean folk group Quilapayun, exiled in France in 1973, return to Santiago on Sept. 29, 1988.Jose Duran/AFP via Getty Images
Chilean folk anniversary. The iconic Chilean folk band Quilapayún marked its 60th anniversary last week by staging performances of its album Cantata Santa Maria de Iquique in Santiago and the seaside city of Viña del Mar.
Quilapayún’s story dovetails with Chile’s political development. The band was founded in the 1960s, singing folk ballads about working people’s struggles, but largely went into exile during the 1973-90 dictatorship of Augusto Pinochet.
The name of the group comes from the Indigenous Mapuche term for “three beards,” but in recent years it has focused on incorporating more women’s voices. Female singers were invited to the special edition of Cantata Santa Maria de Iquique, which tells the story of a massacre of labor organizers in the early 20th century.
Though many themes of the group’s songs are dark, the music itself is a harmonious and often soothing mix of vocals and strings. The style was dubbed “New Chilean Sound” when it first gained popularity in the 1960s and remains beloved by audiences.
Question of the Week
What year did Uruguay legalize recreational marijuana?
It was the first country in the world to do so.
FP’s Most Read This Week
- What’s the U.S. Endgame in Venezuela? by Geoff Ramsey
- Why the Democrats Are So Lost by Michael Hirsh
- Canada Shows How to Neutralize Trump’s Trade Attacks by Agathe Demarais
In Focus: The Toll of U.S. Tariffs
The Panamanian-flagged Cena Faith cargo ship is seen at the Lazaro Cardenas Cargo Port in Michoacan State, Mexico, on April 25.Alfredo Estrella/AFP via Getty Images
Last week, the IMF issued an updated forecast on how economies around the world are performing this year, offering a glimpse at to what extent U.S. tariffs are affecting Latin American countries.
The last major IMF forecast came in April, just after Trump announced hefty tariffs on trade partners around the world. That report broadly reduced the amount of growth it expected to see in the region this year. But six months later, GDP estimates for many Latin American countries are near where they were before the April tariff announcement.
Overall, the IMF expects the total GDP of Latin America and the Caribbean to grow by 2.4 percent in 2025—up from 2 percent estimated in April. Mexico, Brazil, Chile, Colombia, and Peru are among the countries that saw their GDP growth forecasts upgraded, to 1 percent, 2.4 percent, 2.5 percent, 2.5 percent, and 2.9 percent, respectively.
The fact that the U.S. tariffs have had more muted impacts than expected is due to factors such as trade diversification, Trump’s tariff climbdowns, other countries’ lack of retaliation, increased remittances, and other country-specific factors such as strong agricultural harvests, the IMF and other experts said.
Trump’s copper tariffs ended up sparing raw copper, a boon for Chile and Peru. The United States also exempted some Brazilian and Mexican products from the duties, although Brazil’s effective U.S. tariff rate remains one of the highest in the world.
When it comes to trade diversification, Brazil has been selling more beef to Mexico than last year, Brazil and Argentina have sent more soybeans to China, and Mexico has exported more cars to Canada.
Meanwhile, Mexico and Central American countries have received more remittances than usual from migrants in the United States as they prepare for the possibility of being deported—and thus becoming unable to withdraw money from their U.S. bank accounts.