Is Rousseff or Maduro out good news for business?

Replacing a charismatic leader after having been his deputy for years could finally be the worst choice of political career in the Americas. Both Brazilian President Dilma Rousseff who succeeded Lula da Silva and Venezuelan President Nicolas Maduro who succeeded late Hugo Chavez are at an impending risk of impeachment. The former has been accused of corruption while the latter has been accused of general incompetence.  Against the backdrop, here are two countries having great potential for economic growth and drew much attention on behalf of investors which are now on the brink of potentially disastrous scenario.

Beyond the economic consequences of ongoing political standoffs, the concrete impeachment of both leaders could be a short-sighted solution. New political leadership may be a fresh start toward a better performing economy like Argentina’s with recently elected President Mauricio Macri, welcomed by a jump in national stocks’ valuation and a default settlement with creditors. However impeachment is indeed legal but also a violent political process that removes one elected official from his/her post. Getting rid of Rousseff and/or Maduro could be part of the solution, if you belong to the opposition.

Nevertheless in the longer run, the political hatred that resulted from such tense unusual process could re-emerge anytime and complicate the national context even more. That’s why investors should remain cautious as for investing in countries where politics has been so turbulent for years. Rousseff and/or Maduro out may sound like good news for business, but such a political move could potentially generate persistent instability in the coming years.