Spotlight: LatAm to see more economic, political volatility in 2016

Economic ups and downs and political struggles between the left and right are expected to take center stage in Latin America in 2016.

Latin America has been struggling with economic downturns in recent years, following the region's 10-year boom in the first decade of this century.

In 2016, an economic recession will still hover over the region, with some countries sinking even deeper, given a weak recovery of the global economy, the micro-economic situation of falling commodity prices and the impact of the U.S. Federal Reserve's decision to raise interest rates.

Thanks to their structural reforms and favorable foreign trade structures, Mexico, Colombia, Bolivia and some small countries in Central America are expected to maintain modest growth in 2016.

To tackle the economic problems, Latin American countries need to strengthen adjustments in policies of finance, trade and relevant industries to attract foreign capital in order to provide fresh energy for economic development.

In 2016, political restructuring in the region will contine, but in an unstable way, with left-right confrontation getting even fiercer.

Argentinean politics and governance will officially turn right, and the left-leaning governments of Brazil and Venezuela could face unprecedented challenges from the opposition.

The past two years have witnessed political elections in nine Latin American countries, with the leftist parties still maintaining the lead.

Progressive governments now enjoy relatively high public approval ratings in countries like Ecuador, Bolivia and Nicaragua, showing that although some left-wing groups have suffered setbacks, their social policies have broad public appeal.

In international relations, there may be a turning point in Latin America-U.S. ties. The latter adopted a policy of differentiation and re-organization toward the region over the past two years.

Bilateral relations between the two could enter into a new cycle with a better economic situation in the United States and political changes in Latin America, while power struggles in the region could intensify.

The normalization of U.S.-Cuba ties will inch ahead in the upcoming year, though major breakthroughs remain elusive in key issues concerning the blockade against Cuba and the occupation of Guantanamo Bay. Yet bilateral people-to-people interactions, trade and cultural exchanges will be comparatively active.

In 2016, the greatest challenge for the region will be dealing with economic depression. Instability and imbalance are notable features of the Latin American economy.

Latin American countries are endowed with abundant resources, making economic development overreliant on resources and external markets, and leading to a lack in diversity of production, trade and economic structures.

The vulnerability of the region's economy will thus be immediately exposed or magnified once the international micro-economic situation changes and commodity prices drop.

While leftist policies in Latin America stress a fair distribution of wealth, they entail expensive social welfare programs that are divorced from the reality of today's national economic conditions.

The imbalances in economic and social structures have led to incoherence in production and consumption patterns. In addition, high business costs, low efficiency and unsustainability have ensnared the region in the middle-income trap for a long time.

The main economies in Latin America have missed their opportunities to fill gaps in areas like industrial systems, infrastructure, transportation networks, technology and education, worsening the current economic situation.

To escape the low-growth dilemma, Latin America has to alter its pattern of overreliance on exports of raw materials and low value-added products, unwaveringly promote structural reforms, pursue economic and trade diversification, and push for innovation and competitiveness so as to improve its labor productivity and join the global value chain in a vigorous way.

China and Latin America strategic cooperation based on mutual benefit and win-win will help boost the region's economy.

Overall cooperation between the two sides will be further deepened in 2016, as will bilateral cultural and social exchanges via the 2016 China-Latin America Cultural Exchange Year and Rio Olympic Games.

Economic and trade cooperation between China and Latin America will see new breakthroughs in quality and structure.

With industrial capacity cooperation driving the construction and perfection of the industrial chain, and the combination of funds, technologies, standards and managements enhancing its value chain, Latin America is poised to become representative of a multilateral world. Endi