Walter Molano, Financial Gleaner Guest Columnist
Ghosts drifted like tumbleweeds down the semi-deserted passageways of the IDB Conference in Panama last week.
For an annual conference that was born out of the debt crisis of the 1980s, when bankers were desperate to learn first-hand what was the position of various governments in regards to their defaulted obligations, the region is now an oasis of stability and growing prosperity.
Gone was the high drama of yesteryear when reporters and investors thronged around finance ministers and central bankers to learn how they were going to deal with the various challenges of the 1990s.
Now, the main issues were ones of biodiversity and environmental matters.These are issues that are addressed by affluent countries that are no longer looking for ways to steer clear of the abyss.
The setting of Panama could not be more appropriate, a gleaming megapolis sprouting out of the shores of the Pacific that is collapsing under the dead weight of obsolete infrastructure.
Like other countries in the region, the Panamanian government is pulling out the stops to reverse decades of neglect by pouring billions of dollars into modernising its water, sanitation and transportation facilities.
The maddening traffic of Jakarta, Sao Paulo and Mexico City are nothing in comparison to the permanent bottlenecks that choke the thoroughfares of Panama City. Although it was not on the official IDB agenda, urban planning is the political hot-button across Latin America.
From Monterrey, Mexico, to Santiago, Chile, city planners are rushing to put in place the facilities that are needed to make their societies more efficient, productive and safe. The focus on urban design and environmental issues makes the crisis-focused forum of the IDB meetings an obsolete venue.
Fortunately, Venezuela and Argentina provided a little bit of excitement. There was a general consensus that Chavez had passed away some time in December and that the Cubans took a few weeks to implement a plan of succession.
Although Cabello was Chavez's constitutionally-mandated successor, he was not ideologically palatable to Havana. Like a castling move in a game of chess, Maduro was leapfrogged over Cabello to improve his chances at the polls.
Now, there is no way that Capriles will win the race. Hence, Maduro will most likely be Venezuela's next president. However, he will probably be much more dogmatic in his approach, aligning the country's economy closer to Cuba's and adopting a more traditional socialist model.
Lacking Chavez's charm and charisma, he will be forced to be more radical and authoritarian. Yet, he will not be able to keep in check the various factions that chafed under Chavez's yoke.
The opposition appears to be very cognisant of the political instability that lies ahead and they will most likely sit on the sidelines, thus allowing the Chavezistas to prey upon each other and fall apart. Some people viewed this as a positive scenario, but we think that the social and political chaos that lies ahead will reduce the country's creditworthiness.
Interestingly, there was scant discussion of the events that were taking place in Argentina. The New York court-room drama that gripped the headlines melted into obscurity and there was much more discussion about the impact that an Argentine Pope would have on the future of the country.
The fact that Pope Francis was a constant thorn in the side of the Kirchners may shock the opposition out of its lethargy and inspire it to launch an assault on the Kirchner political machine.
Besides the topics of Venezuela and Argentina, there was little other excitement. Absent were the fleets of dark limousines with brooding ministers, bankers and hedge fund managers hiding behind dark-tinted windows.
The wine and canapés flowed less freely as investment bankers struggled to survive in the brave new world of job cutbacks, heavy-handed compliance and austerity.
As a sign of the times, the melodic lilt of Brazilian Portuguese was drowned out by the thunderous bark of Mexican Spanish.
There was also a new generation of investment bankers and analysts, more formally dressed and sporting their surgically-implanted earpieces that are permanently tethered to their Galaxy smartphones.
A generational shift is taking place in the emerging markets. Gone is the adrenaline of devaluations, defaults and bailouts. That means that the IDB as a setting for crisis management will no longer be relevant, and it will soon go the way of the dinosaurs that once roamed the earth.
Dr Walter T. Molano is a Managing Partner and the Head of Research at BCP Securities LLC. firstname.lastname@example.org