Monday Memo: Ecuador Amendments — P&G Tax Fraud — Brazil Solar Parks — U.S. Midterm Elections – Colombia Paramilitary Sentenced
November 3, 2014
This week's likely top stories: Ecuador's National Assembly dismisses referendum on controversial constitutional amendments; Argentina suspends Proctor & Gamble for fiscal fraud; Brazil grants contracts for 31 new solar parks; U.S. gears up for midterm elections and immigration reform; Colombian court sentences AUC paramilitary leader to 8 years.
Ecuador’s National Assembly Strikes Down Referendum on Amendments: On Friday, the Ecuadorian Constitutional Court dismissed the proposal for a referendum on a package of constitutional amendments sponsored by President Rafael Correa’s ruling party, Alianza País (Country Alliance—AP). Instead, the decision will be passed on to the National Assembly, where parliamentary approval of the amendments is virtually guaranteed given the AP’s two-thirds majority. The most contentious of the reforms would allow for the indefinite re-election of public officials, which would effectively permit Correa, who is currently serving his third and last term as president, to run again in 2017. Despite Correa’s high approval rating, a September poll found that 73 percent of Ecuadorians supported the referendum, which was called by Guillermo Lasso, a former presidential candidate and leader of the opposition party Creando Oportunidades (Creating Opportunities—CREO).
Argentina Bars P&G from Business for Tax Fraud: The Argentinian tax bureau, Administración Federal de Ingresos Públicos (Federal Administration of Public Revenue—AFIP), announced on Sunday that it has suspended the operations of multinational consumer products corporation Proctor & Gamble for alleged fiscal fraud and capital flight. AFIP stripped P&G of its importers/exporters registration upon discovering that the company evaded paying duties totaling up to $138 million on hygiene products imported from Brazil by billing through a Swiss subsidiary. P&G, which has been operating in Argentina since 1991, will be allowed to resume business once it has paid its tax bill and fines accordingly. In asking Argentine courts to place travel restrictions on top officials at the local P&G affiliate, AFIP chief Ricardo Echegaray commented, “Our main goal is for P&G to repay the Central Bank the stolen currency as well as the customs sanctions and the income tax that has been evaded.” P&G responded by announcing that it is working to understand and resolve the allegations.
Brazil Grants Contracts for 31 New Solar Parks: As the output from key hydroelectric plants in Brazil has decreased substantially amidst the worst drought in 80 years, the country has kickstarted the solar power industry by granting contracts for the construction of 31 solar parks on Friday. Brazil’s energy regulator brought the country’s first solar energy auction to a lucrative close on Friday by signing 20-year energy supply contacts with companies to invest $1.67 billion to begin powering the national grid by 2017. The parks, which are the first large-scale projects of their kind in Brazil, will have a combined capacity of 1,048 megawatts (MW), and at a price of $89 per megawatt-hour, the Brazilian government has earned itself one of the lowest rates in world. Brasília has been a latecomer to the photovoltaic industry—which currently supplies a meager 1 percent of the country’s electricity—because the government levies high tariffs on imported solar panels.
U.S. Midterm Elections and Immigration: U.S. voters will go to the polls on Tuesday in midterm elections that will be crucial for the future of immigration reform in the United States. Recent polls suggest that the Republican candidates are outperforming Democrats in several key states, and thus the GOP could pick up six new seats to take control of the Senate. Former Republican presidential candidate Mitt Romney said on Sunday that if Republicans win the Senate, comprehensive immigration reform will be a top priority. Last year, House Speaker John Boehner (R-Ohio) refused to bring a bipartisan immigration bill passed in the Senate to a vote. Meanwhile, President Barack Obama is expected to use his executive authority to overhaul immigration rules shortly after Tuesday’s elections.
Sentenced AUC Leader Says Colombian Military Collaborated: In sentencing Colombian paramilitary leader Salvatore Mancuso to a maximum sentence of eight years on Friday, Judge Alexandra Valencia said that “the military and the army were institutionally responsible” for the deaths of hundreds of civilians in northern Colombia. Mancuso, who led the Colombian paramilitary Autodefensas Unidas de Colombia (United Self-Defence Forces of Colombia—AUC) between 2004 and 2006 and was later extradited to the U.S., said that the Colombian army was complicit in the AUC’s military offensives in the late 1990s that led to the deaths of hundreds of civilians. As part of a plea bargain with Colombia’s special Justice and Peace prosecution unit, Mancuso admitted to leading four massacres and committing hundreds of crimes. According to Mancuso, the Colombian military gave him special access, trained paramilitaries, and had informants in both the police force and the regional prosecutor’s office to warn paramilitaries of investigations or raids. “Without the action or inaction of the State, we wouldn’t have been able to grow the way we did,” he said.
August 27, 2013
Deep in the northeastern part of the Ecuadorian Amazon is the Yasuní National Park, a 2.4-million acre reserve believed by scientists to be the most biodiverse place on Earth. Its location, where the equatorial divide meets the Andes and the Amazon rainforest, has made Yasuní one of the world’s most unique habitats for life. The park is also home to two of the planet’s last uncontacted tribes.
Yet beneath all that diversity lays an estimated 846 million barrels of oil, which the Ecuadorian government plans to extract. Earlier this month, President Rafael Correa abandoned the novel Yasuní-ITT initiative, which was launched in 2007 to keep the oil underground. The initiative sought to raise $3.6 billion in contributions from international donors—half of the estimated $7.2 billion Ecuador would face in lost revenue over time. Hailed as a breakthrough in the global fight against climate change, the plan would have prevented 400 million tons of carbon dioxide from being released into the atmosphere. But the initiative raised only $13 million in actual donations and $116 million in pledges.
Addressing the country, Correa said the world had “failed” Ecuador. But despite the country’s real need for financial resources, Correa shares a significant portion of the blame. The government’s inflexibility and lack of transparency over how to administer Yasuní-ITT’s funds discouraged potential donors. Similarly, his efforts to attract investment and expand the country’s oil sector invited their mistrust.
July 2, 2013
Ecuadorian President Rafael Correa said Monday that Ecuador will not grant asylum to Edward Snowden, the former contractor wanted by the United States for leaking National Security Agency information, unless he reaches Ecuadorian territory.
Correa maintained his support for Snowden, whose actions he said were a brave act against tyranny—in defense of universal freedoms and human rights. Yet, without dismissing the dangers that the U.S. government’s surveillance program poses to freedom worldwide, the Snowden affair has only cast a light again on Correa’s own failure to promote freedom of expression in Ecuador.
Indeed, Rafael Correa may have been recently re-elected with over 57 percent of the vote, but Ecuador is an increasingly repressive society. The republican principle that the majority should consent to and abide by its obligations to protect the rights of minorities is evermore elusive.
Dissent is not tolerated and political decisions, big or small, rest in the hands of the very few. Since Correa came to power in 2007, Ecuador’s political parties have disappeared. Correa successfully dissolved an opposition Congress and instituted a plebiscite to draft a new constitution that greatly expanded executive powers. Members of Correa’s political movement, Alianza PAIS (Alliance of the Proud and Sovereign Fatherland), now hold 100 of the 137 seats in the National Assembly. Municipalities, ministries and the judiciary exhibit a similar homogeneity.
This homogeneity, itself a product of Ecuadorian democracy, would not be so alarming if the state responded well to criticism. But, as evidenced by the new communications law enacted in June, the state is dangerously close to having a monopoly on criticism.
February 15, 2013
Voters in Ecuador on Sunday will decide whether to give President Rafael Correa of the PAIS Alliance (Alianza Patria Altiva y Soberana - Alianza PAIS) another term on Sunday, with the latest opinion polls giving him a 40 percentage point lead over his opponents for the presidential election. Of his seven challengers, Correa’s closest opponent is Guillermo Lasso Mendoza from the 21 Believe (21 CREO) political party. Lasso Mendoza is a former executive of Banco de Guayaquil and has promised to lower taxes on job creation and abolish a 5 percent tax on capital that has discouraged foreign investments and weakened the banks.
Correa’s 56 percent approval rating can be attributed to policies such as low-interest rates for first-time homeowners, free school supplies and uniforms for children, medical care at public hospitals for the poor, and welfare compensation reaching nearly 1 in five Ecuadoreans—or 1.9 million people including single mothers, the elderly and low-income families. They receive $50 a month from the state, which is largely possible due to the nation’s oil wealth.
Since Correa assumed office in 2007 the unemployment rate dropped from 9.82 to 4.71 percent and the economy has had robust performance, with 5.6 percent GDP growth last year While lower-income populations have benefited from increased social programs, journalists have faced criminal charges under Correa. A number of state news media have fallen under his leadership which now includes five television stations, four radio stations, two newspapers, and four magazines--up from one radio station previously. The Indigenous community has also protested against the government’s failure to consult with native people over water rights and its insistence on paving the way for large-scale precious metals mining.
To win the Presidential election on Sunday, Correa needs at least half the valid votes cast or 40 percent of the vote, plus a 10 percentage-point lead over the second-place candidate to be elected in the first round. If no candidate receives the requisite number of votes, a second-round election will be held April 7 between the top two candidates. The National Electoral Council (Consejo Nacional Electoral) will publish partial voting results after polls close on February 17.
Monday Memo: Obama’s State of the Union Speech – Ecuadorian Elections – Venezuelan Currency Devaluation – and more
February 11, 2013
Top stories this week are likely to include: President Obama discusses immigration reform in the State of the Union; Ecuador prepares for presidential and congressional elections; Colombia and FARC make progress in peace negotiations, Venezuela’s currency devaluation goes into effect; and Mexican farmers begin to release suspected criminals in negotiations with Guerrero state.
President Obama to Discuss Immigration, Guns in State of the Union Address: U.S. President Barack Obama is expected to renew his demand for comprehensive immigration reform, gun control and climate change in this Tuesday’s State of the Union speech, according to senior officials. Obama has called for a pathway to citizenship for the 11 million undocumented immigrants living in the U.S. and told House Democrats that immigration reform will be a “top priority and an early priority” of his second term. Meanwhile, Republican Senator Marco Rubio of Florida, a Cuban American and one of eight U.S. Senators in a bipartisan effort to overhaul the U.S. immigration system, will deliver the Republican response—a signal that the GOP is seeking to overcome its poor standing with Latino voters in the last election. “The president and Senate negotiators have laid out two different visions with respect to a path to authorized status for undocumented immigrants. The principles to be laid out in Tuesday’s speech will set a marker of just how much the president is willing to negotiate,” said AQ Senior Editor Jason Marczak. Tuesday’s speech will be the 100th State of the Union address.
Ecuador Prepares for Elections Next Sunday: Ecuador's presidential race will enter its final week as voters at home and abroad prepare to elect the country's next president and members of the national assembly on February 17. President Rafael Correa is heavily favored to win re-election to a third term. A survey last week by polling agency Perfiles de Opinion showed that 62 percent of expected voters support Correa, while only 9 percent of voters say they support his nearest rival, Guillermo Lasso. Correa has held office since 2007, and if he wins Sunday’s elections, he will serve a four-year term that will end in 2017.
Colombia and FARC say they are Nearing an Agreement on Land Reform: The Colombian government and FARC leaders said Sunday that they are making progress in the latest round of peace negotiations in Havana, which included an "exhaustive analysis" of land reform. During a press conference on Sunday, the FARC said that they are prepared to free two police officers and one soldier captured by the rebel group in January, fulfilling demands by the Colombian government to release the hostages at once. FARC negotiator Rodrigo Granda said Sunday that the negotiations were on track and advancing at “the speed of a bullet train.” The sixth round of peace talks between the Colombian government and the FARC will start on February 18.
Venezuelan Currency Devaluation Takes Effect Wednesday: The Venezuelan government's long-expected currency devaluation, announced last Friday, will officially go into effect on Wednesday. The official exchange rate will change from 4.3 bolivars to the dollar to 6.3 bolivars to the dollar, the fifth time the country’s currency has been devalued in a decade. Venezuelan Vice-President Nicolás Maduro, currently leading the country in the absence of the ailing President Hugo Chávez, said that the devaluation was needed to fund the country’s social programs, and was also a response to attacks on the bolivar by capitalist “speculators.” The impending devaluation has already caused a rush of panicked last-minute shoppers to buy domestic appliances and other goods over Carnival weekend.
Mexican Farmers Begin Turning over Hostages: Mexican farmers in the township of Ayutla who detained 53 suspected criminals in January released 11 of their hostages last Friday after negotiations with the Guerrero state government. The farmers, fed up with recent drug-related violence and kidnappings in their community, have formed so-called “self-defense” forces to set up checkpoints, capture and imprison suspected criminals before trying them before an ad-hoc town assembly. The vigilante justice has been criticized by human rights groups, but the farmers say they are acting to protect themselves in the absence of the state, which has so far tolerated the movement. The Guerrero state government said the farmers agreed to turn over "the first 20" detainees, though it's not clear whether more will be released. The farmers have said they will not back down until the government proves it is capable of protecting them and establishing peace in the region.
January 4, 2013
Election season got under way today in Ecuador as eight presidential candidates took to the streets and rallied supporters to campaign for the February 17 presidential and congressional elections.
President Rafael Correa, who has held office since 2007 and is running for a third term next month after being re-elected in 2009, overwhelmingly leads the polls over his rivals, who include businessman Guillermo Lasso, former Ecuadorian president Lucio Gutiérrez, millionaire Alvaro Noboa, and evangelical pastor Néstor Zavala.
A December survey conducted by polling company Perfiles de Opinión found that 60.6 percent of Ecuadorian voters polled signaled an intention to re-elect Correa. A distant 11.2 percent of voters said that they backed Lasso, Correa’s nearest competitor.
The poll by Perfiles de Opinión also found that more Ecuadorian voters signaled an intention to submit blank or nullified ballots than to vote for any presidential candidate other than Correa or Lasso.
Correa launched his presidential campaign early this morning in southern Quito, where he convened a caravan to the coastal city of Portoviejo to hold his first presidential campaign rally today. On January 2, Congress officially granted Correa a month’s leave from January 15 to February 14 in order to focus on his campaign, making Vice President Lenín Moreno Ecuador’s temporary head of state during that period.
When Ecuador’s 11.5 million voters go to the polls on February 17, they will be casting ballots for the president, vice-president, and members of the national assembly, who will all serve until 2017.
December 4, 2012
Ecuadorian President Rafael Correa traveled to Argentina on Monday to receive an award from the Universidad de la Plata in La Plata, Argentina, recognizing his contributions to freedom of expression in Ecuador.
The U.S. government has long criticized Correa’s record on freedom of speech, and granted political asylum to the Ecuadorian journalist Emilio Palacio in August after he faced a three-year prison sentence and a $40 million fine for referring to Correa as a “dictator” in El Universo.
Facing pressure from press freedom groups, Correa eventually pardoned Palacio and other executives who had received prison sentences. The U.S. offered asylum to Palacio just 24 hours after Ecuador granted asylum to WikiLeaks founder Julian Assange at its embassy in London, who published a series of classified U.S. government cables on his website.
Receipt of the award prompted the Ecuadorian president to again defend his record with the press. “It turns out that there’s such a lack of free expression in Ecuador that one of the most important universities in Latin America has awarded the president a prize for fighting for true freedom of expression and democratization of the media,” Correa said on Saturday.
The award, in the category “Presidente Latinoamericano por la Comunicación Popular” (Latin American President for Popular Communication), will be delivered Tuesday at the Facultad de Periodismo y Comunicación. It is not the first controversial prize that the Universidad de la Plata has awarded to a Latin American head of state: in 2011, Venezuelan President Hugo Chávez collected the same award.
Monday Memo: Elections in the United States – Puerto Rico Votes on Status – Haiti Rebuilds After Sandy – and more
November 5, 2012
Top stories this week are likely to include: the United States heads to the polls; Puerto Rico decides on status; Michel Martelly requests emergency aid; and Rafael Correa gets re-nominated for president.
Elections in the United States: On Tuesday, voters across the United States will go to the polls to vote for the next president as well as all congressional representatives and select governors and senators. A poll of polls from Real Clear Politics has President Barack Obama maintaining a razor-thin edge—0.5 percentage points—over Governor Mitt Romney. The difference-maker could be the turnout of Latinos, a demographic that supports Obama by 52 percentage points over his Republican challenger according to a poll released last week by Latino Decisions. AQ Senior Editor Jason Marczak observes: “The question is the degree to which Latino political preferences will translate into votes, especially in battleground states. Beyond Election Day, Latino turnout tomorrow will shape the extent to which their concerns will factor into policymaking in the next four years.”
Puerto Rico's Referendum: Voters in Puerto Rico will decide on Tuesday about the future of the island’s status. Currently it is a semi-autonomous “unincorporated territory” of the United States that—since it is not a state—plays no role in the U.S. presidential general election. Puerto Ricans will decide whether they want the island to gain more autonomy as a “sovereign free association,” or whether Puerto Rico should become a U.S. state or independent altogether. Tuesday’s vote will be the fourth time in 45 years that Puerto Ricans have formally weighed in at the ballot box on the status of the island. A poll last month found that a slim majority—51 percent—want to keep the island’s current status intact, according to AS/COA Online. “This is probably the most complicated ballot used for a referendum on Puerto Rico’s status and will likely split the vote for those opposing the commonwealth’s status quo,” observes AQ Editor-in-Chief Christopher Sabatini.
Haiti Rebuilds After Superstorm Sandy: Sandy, which took on many forms including tropical storm, hurricane and post-tropical storm, left much damage in its wake—including in Cuba, Jamaica, the Dominican Republic, Puerto Rico, the Bahamas, and the United States. But a country that appears to have suffered the most long-term damage is Haiti. According to the Associated Press, 70 percent of crops in the south of the country were destroyed and livestock killed—significantly damaging the agricultural industry. President Michel Martelly is appealing to the international community for emergency aid as his country adds the superstorm damage to the loss inflicted by a devastating earthquake outside of Port-au-Prince in 2010. Will Martelly’s request be granted this week?
Correa to be Nominated at Party Convention: Ahead of Ecuador’s presidential election in February, the Alianza País incumbent party will hold its convention on Saturday and re-nominate President Rafael Correa to represent the party on the ballot. Foreign Minister Ricardo Patiño affirmed this past Wednesday that Correa, first elected in December 2006, will run for another full term. If he wins, the populist leader will remain in power into 2017. Early polls show Correa with a huge advantage over potential challengers, bringing in 56 percent of votes versus Guillermo Lasso, an ex-banker of the opposition who garners 23 percent.
August 31, 2012
At a press conference Thursday, former El Universo journalist Emilio Palacio, of Ecuador, announced that he had been granted political asylum in the U.S. after waiting seven months.
Palacio received notification of the decision on August 17, just 24 hours after Ecuadorean President Rafael Correa had controversially granted asylum to WikiLeaks founder Julian Assange, though Palacios declined to draw parallels between the two cases.
Before fleeing to the U.S., Palacio was facing a three-year prison sentence and a $40 million penalty for an article he wrote referring to President Rafael Correa as a "dictator." The article criticized Correa’s handling of a police revolt in September 2010.
Reacting to the U.S. government’s decision to grant him asylum, Palacio expressed relief. "I am grateful to the U.S. government for the support they have given me, not only for me and my family,” he said. “I can make plans for my life and even more for what this means for Ecuadorian journalists."
The libel case soured an already troubled relationship between the U.S. and Ecuador as the U.S. government criticized Correa’s government for media censorship. In February, Correa pardoned Palacio after an international outcry from human rights and free speech activists. Activists have maintained that Ecuador’s policies toward journalists are stifling free speech and freedom of the press and intimidating political opposition.
Palacio arrived in the U.S. a year ago with his wife and two children, who will also benefit from asylum. Attorney Sandra Grossman, assigned to Palacios case, explained that a political exile in the U.S. is eligible to request a work permit and gain a path to U.S. citizenship.
May 9, 2012
Organization of American States (OAS) Secretary General José Miguel Insulza will arrive in Ecuador tomorrow to begin discussions with President Rafael Correa over his government’s decision not to participate in last month’s Summit of the Americas in Cartagena, Colombia. Insulza will likely also address recent calls by the Ecuadorian government to modify the OAS constitution to reduce U.S. influence within the organization.
Ecuador’s decision to boycott April’s summit in protest over Cuba’s exclusion the meeting comes alongside other recent Ecuadorian complaints, such as the Inter-American Commission on Human Rights’ (IACHR) request to suspend the defamation sentence against El Universo newspaper. A columnist and three directors of the newspaper have since been pardoned.
Correa has recently said publicly that the only legitimate multilateral organization in Latin America is the Comunidad de Estados Latinoamericanos y Caribeños (CELAC)—created in Venezuela last year—which excludes the United States and Canada. Additional details of Thursday’s planned meetings have been scarce, with Ecuador’s foreign ministry saying only, “The goal is to maintain a political dialogue on the Organization of American States.”
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