by Patrick Fearon-Hernandez, CFA | PDF

When investors think about Latin American politics and policy, the various countries’ military forces often come to mind.  You’d almost think the region was a hotbed of international aggression, invasions, and state-to-state warfare.  The reality is that for the last century, national military organizations in Central and South America have mostly been used against indigenous insurgencies or opposition political movements.  In recent decades, even that role has been proscribed in most countries, raising hopes that the region has finally learned to solve its domestic political conflicts democratically instead of by force.

Current economic and social challenges in Brazil have prompted some officials to hint that the military should have a stronger role in guiding the state again.  Some people in the government have even issued veiled threats to reimpose a military dictatorship in the country.  In this report, we’ll examine what has led to the current threat and assess the likelihood of a military-backed government in Brasilia.  As always, we’ll end with a discussion of the likely ramifications for investors if the military does take a bigger role in Brazilian politics.

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