This week’s likely top stories: Venezuela is expected to win a seat on the UN Security Council; Brazilian President Rousseff and Marina Silva are tied in a new poll; U.S. deportations are at their lowest level since 2007; Santander’s new chairwoman will maintain the bank's current strategy; Ecuadorian President Correa asks supporters to mobilize against anticipated protests.
Venezuela likely to earn seat on UN Security Council despite critics: As the 69th Session of the UN General Assembly opens in New York this week, Venezuela is poised to gain a long-awaited seat on the UN Security Council. At a meeting in July, Venezuela obtained unanimous regional support for its candidacy to represent Latin America. While the country still has to gain a two-thirds majority in a secret vote among all 193 UN member countries, there is no rival candidate in the region and Venezuela is likely to win. Critics of Venezuelan President Nicolás Maduro are concerned about his impact on the Security Council, given the current human rights allegations against his administration. When Venezuela tried to gain a seat in 2006, the U.S. successfully blocked the attempt, claiming that Venezuela would be a “disruptive” influence. U.S. President Barack Obama will preside over a UN Security Council summit the week of September 22.
President Rousseff and Marina Silva tied in recent poll: Brazilian President Dilma Rousseff and her chief political challenger, Marina Silva, are now statistically tied in the polls as Brazil’s October 5 presidential elections approach, according to a poll released Friday by the Instituto Brasileiro de Opinião Pública e Estatística (Brazilian Institute of Public Opinion and Statistics—Ibope). The poll indicates that in a run-off vote, Silva would receive 43 percent of the vote while Rousseff would take 42 percent—a much closer race than the previous nine-point gap that put Silva in the lead. In the likely event that no single candidate wins a majority of votes on October 5, a run-off election will take place on October 26.
U.S. Deportations at lowest level since 2007: U.S. immigration and Customs Enforcement (ICE) officials reported that ICE deported 258,608 immigrants between October 1, 2013 and July 28, 2014—the lowest level reported for that 10-month period since 2007, and the greatest decline in deportations since President Barack Obama has been in office. Last year, 320,167 people were deported from the United States during the same period. More than 2 million immigrants have been deported during the Obama administration, but a White House spokesman said that the president’s decision to shift resources to the border to deal with an influx of unaccompanied minors from Central America may be one reason for the recent decline in deportations.
Santander’s new chairwoman says bank will stick to strategy: After the death of former Santander chairman Emilio Botín, newly-appointed chairwoman Ana Botín said on Monday that she would continue her late father’s strategy to increase international diversification and maintain the bank’s generous dividend policy with shareholders. On Monday, shareholders also agreed to buy 25 percent of the bank’s Brazilian unit, Santander Brasil, for $6 billion. The bank has major operations in ten countries, including Brazil, Mexico and Argentina, and reported a 22 percent increase in profits in the first half of 2014.
Correa calls on supporters for impending protests: Ecuadorian President Rafael Correa on Saturday asked supporters to rally against expected workers’ protests against his government this coming week. Ecuadorian workers’ organizations are planning a Jornada Nacional de Movilización (National Mobilization) on Wednesday to mobilize for labor rights and to call for reforms to the country’s penal code, water policies, and education system, among other concerns. “If there are 3,000 of them on Wednesday, there will be 30,000 of us,” Correa said.
A survey published on Tuesday by the polling firm MDA and commissioned by the Confederação Nacional do Transporte (National Transport Confederation—CNT) showed that Brazilian incumbent President Dilma Rousseff would be statistically tied with Partido Socialista Brasileiro (Brazilian Socialist Party—PSB) candidate Marina Silva if the elections went to the second round on October 26. The poll, which surveyed 2,002 respondents from September 5 to September 7, revealed a 4.9 percentage point improvement for President Rousseff and her Partido dos Trabalhadores (Workers' Party—PT) from two weeks ago.
The President had seen her numbers slump in the face of a struggling economy including less than 2 percent growth per year under the PT leader, a recession during the first half of the year, 6.5 percent inflation, and a threat from Moody’s Investor Service to downgrade Brazil’s credit rating. President Rousseff’s popularity also suffered from frustration over the lack of public services that led to over one million people protesting across 100 Brazilian cities shortly before the 2014 World Cup.
Despite popular frustration, the president’s approval rating seemed to improve in the polls after frontrunner Marina Silva faced criticism for withdrawing her support of marriage equality and nuclear energy. It’s unclear how the corruption scandal at the state-run oil company Petróleo Brasileiro S.A. (Petrobras) will affect the president’s numbers as details continue to emerge.
The first round of the general elections will be held on October 5, and they will proceed the second round if any one candidate fails to garner more votes than the other two candidates combined. While the MDA poll shows her leading the first round with 38.1 percent, it would not be enough to overcome the combined 48.2 percent support for Silva and Social Democrat Aécio Neves.
This week’s likely top stories: Barack Obama delays executive action on immigration; a former Petrobras director names 40 politicians in scandal; former Salvadoran President Flores turns himself in; private equity fundraising in Latin America this year could reach $8 billion; Chileans remember September 11, 1973.
Immigration reform stalled: U.S. President Barack Obama’s promise to use his executive authority to reform immigration has hit a roadblock in the run-up to midterm elections, angering immigrant rights activists who hoped he would take action to ease deportations after Congress’ August recess. Polls conducted this summer revealed that voters in states like Arkansas and Iowa were overwhelmingly opposed to executive action on immigration, and a July survey by the Pew Research Center for People and the Press showed that a majority of respondents believed Obama had mishandled the surge of unaccompanied minors at the border this summer. A White House official said this weekend that the president will take action on immigration at the end of the year.
Petrobras corruption scandal: Paulo Roberto Costa—a former director of Brazilian state-run oil company Petróleo Brasileiro S.A. (Petrobras) who was arrested in 2013 for corruption—alleged that more than 40 Brazilian politicians received commissions for contracts signed with Petrobras between 2004 and 2012. Brazilian media revealed on Saturday that most of the individuals Costa named were members of the ruling Partido dos Trabalhadores (Workers’ Party—PT), further complicating President Dilma Rousseff’s re-election bid on October 5. Costa struck a plea deal with prosecutors before naming the politicians. Rousseff said Saturday that she would await official information to “take all appropriate measures” to investigate the scandal.
El Salvador’s Francisco Flores under house arrest: Former Salvadoran President Francisco Flores, of the ARENA party, turned himself in to Salvadoran authorities on Friday, four months after a warrant for his arrest was issued in May. Flores was accused of misappropriating $15 million during his 1999-2004 presidential term, funds allegedly provided by Taiwan to help with reconstruction efforts after two earthquakes, as well as to fight drug trafficking and crime. On Friday, Flores—who had been missing for months—said he had turned himself in “voluntarily and out of respect for the law.” He is currently under house arrest and denies the charges against him.
Private equity push in Latin America: Private equity and venture capital fundraising in Latin America has already reached $3.5 billion in the first half of 2014, indicating that year-end totals could reach as high as $8 billion, according to new data from the Latin American Private Equity & Venture Capital Association (LAVCA). In 2011, a record $10.27 billion was raised, and in 2013, investments reached a six-year high—but have decreased by 10 percent for the same period this year. According to LAVCA, information technology attracted 30 percent of total investments, followed by healthcare.
Chileans march in memory of September 11: Thousands of Chileans marched through Santiago on Sunday to commemorate the anniversary of the September 11, 1973 military coup that overthrew President Salvador Allende and led to the death or disappearance of some 3,000 people. The march was largely peaceful, according to Chilean police, although four journalists were injured when some of the protesters threw objects at the police. More marches are planned for Thursday, September 11.
Presidential hopeful Marina Silva of the Partido Socialista Brasileiro (Brazilian Socialist Party—PSB) and incumbent President Dilma Rousseff of the Partido das Trabalhadores (Worker’s Party—PT) harshly criticized each other’s economic plans, leading to tension during yesterday’s second presidential debate. The Partido da Social Democracia Brasileira (Party of Brazilian Social Democracy—PSDB) candidate Aécio Neves and five other candidates also attended the debate, ahead of the first round of elections on October 5.
A Datafolha poll from August 29 showed a tie between Rousseff and Silva in the first round, with each earning 34 percent of the vote, and predicted that Silva would beat Rousseff in the second round with 10 percentage points. Responding to the threat from her challenger, Rousseff criticized Silva’s plan to strengthen the Central Bank’s independence, affirming that it will make regulation more difficult. She also called into question how Silva will raise the money required to increase spending on public services. Silva claimed that Rousseff’s administration created higher inflation and debt and accused her of failing to place importance on renewable energy.
Silva became a presidential candidate after her running mate, Eduardo Campos, died in a helicopter crash on August 20. Over the weekend, the former environment minister under Luiz Inácio Lula da Silva made two “corrections” to her official platform, retracting her support for gay marriage and nuclear power.
This week’s likely top stories: Marina Silva agrees to face Dilma Rousseff in Brazil’s presidential election; victims of Colombia's armed conflict speak to peace negotiators; Mexico will announce new energy projects; Julian Assange plans to leave Ecuador’s embassy “soon”; classes in Mexico are suspended due to a copper mine’s toxic spill.
Marina Silva agrees to run for president: Former Brazilian Environmental Minister Marina Silva has agreed to run for president in the place of the late Eduardo Campos, who died August 13 in a plane crash in the Brazilian city Santos. Silva’s entry into the race will raise new challenges for President Dilma Rousseff. Although Rousseff maintains her lead in the polls, Silva has quickly gained almost three times the support that Campos had–around 21 percent–and would defeat Rousseff in a hypothetical second-round contest, according to polling company Datafolha. Silva was Campos’ vice presidential running mate for the Partido Socialista Brasileiro (Brazilian Socialist Party–PSB) before he was killed last week, and she also ran for president in Brazil’s 2010 election. Over 100,000 people attended Campos’ funeral in Recife on Sunday, including Rousseff, presidential candidate Aécio Neves from the Partido da Social Democracia Brasileira (Brazilian Social Democracy Party–PSDB), and former president Luiz Inácio Lula da Silva.
Victims of Colombia’s armed conflict address peace negotiators: Twelve victims of Colombia’s 50-year-old internal conflict met with members of the Colombian government and the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC) on Saturday to urge a peace agreement in Havana. The participants, whose loved ones are among the 220,000 people killed during the armed conflict, said that they were willing to forgive the killings by the FARC, paramilitary groups, and government security forces, as long as the negotiators reach an agreement. A total of 60 victims’ relatives chosen by the UN, Roman Catholic Church and National University are expected to speak to the peace negotiators in the coming weeks. The negotiators have already reached agreements on three points of the six-point peace agenda, but must still decide on victims’ rights, disarmament, and the implementation of a peace deal.
New Mexican energy projects to be announced: Mexico’s Comisión Federal de Electricidad (Federal Electricity Commission—CFE ) is expected to announce 16 new electricity projects today worth a total of nearly $4.9 billion, according to a report obtained by the daily newspaper El Financiero. The projects—which are expected to include four pipelines, three electricity plants, upgrades to an existing plant, and eight new transmission lines and substations—will be the first auctions under the energy sector reforms signed into law by Mexican President Enrique Peña Nieto last week. Those reforms opened Mexico’s oil, gas and electricity sectors to private investment.
Julian Assange to leave Ecuadorian embassy in London: WikiLeaks founder Julian Assange, who has been seeking refuge at the Ecuadorean embassy in London for over two years, announced Monday that he will be leaving “soon” because of anticipated legal reforms in Britain that would help him avoid extradition to Sweden. Assange did not mention a specific date of departure from the embassy. In 2010, two women accused Assange of sexual assault and rape, and he faces questioning by prosecutors in Stockholm. Yesterday, Ecuadorean Foreign Minister Ricardo Patino, accused the British government of human rights abuses and questioned their commitment to finding a diplomatic solution. Assange denied that he will be leaving the embassy for health reasons, as the UK Press has reported.
First day of classes suspended because of toxic spill in Mexico: A toxic spill at a copper mine in northern Mexico has closed 88 schools in the Mexican state of Sonora due to concerns that contaminants have entered local drinking water. The spill occurred on August 6 at the Buenavista copper mine near the U.S.-Mexico border, reportedly after a poorly-designed holding area containing toxic materials overflowed due to heavy rains. The Sonora state government has distributed clean drinking water to between 80 and 90 percent of local residents, although those living in more isolated areas have not yet received potable water. Classes were supposed to start today in seven municipalities affected by the spill; they are expected to begin later this week.
Brazilian presidential candidate Eduardo Campos and six other people were killed Wednesday morning when the plane they were traveling in crashed in the coastal city of Santos in São Paulo state. Brazilian television reports said that the plane, a Cessna 560XL, struggled in bad weather and hit a three-story building in the neighborhood of Boqueirao, killing all those aboard.
Campos, 49, the former governor of Pernambuco state, was the presidential candidate for the Partido Socialista Brasileiro (Brazilian Socialist Party). The latest opinion polls showed him in third place behind Brazilian President Dilma Rousseff of the ruling Partido dos Trabalhadores (Workers' Party) and challenger Aécio Neves, of the Partido da Social Democracia Brasileira (Social Democracy Party).
President Rousseff temporarily suspended her re-election campaign and declared three days of national mourning for Campos and the other victims of the crash. Meanwhile, the Partido Socialista Brasileiro must submit the name of a new presidential candidate within 10 days. Campos' running-mate, vice presidential candidate Marina Silva, previously ran for president in 2010 and may be a possible contender.
Lately, Brazil has been in the business of building things from the ground up. From stadiums that hold millions of people to entire market ecosystems, this is challenging work for a government. In anticipation of the World Cup, Brazil received heavy criticism for its infrastructure development. However, Brazil’s efforts at developing an entrepreneurship ecosystem have consistently been touted as a success by many policymakers and investors.
Yet while some Brazilian programs have been relatively successful at addressing superficial holes in the entrepreneurship ecosystem, such as access to financing, the government has yet to address the structural issues from which these problems stem.
Entrepreneurial capital in the form of micro-enterprises and self-run businesses has long been part of the economic fabric of Brazil. However, throughout Latin America in the last 20 years, there has been more focus on encouraging the “opportunity entrepreneur.” As highly skilled individuals eligible for salaried employment these people choose to start their own businesses out of opportunity rather than necessity. It is widely recognized that encouraging these individuals to start entrepreneurial and innovative enterprises creates productivity gains and economic growth within a country.
In the early 2000s, Colombia’s oil industry was weakening. There had been a decrease in new discoveries, followed by a decline in production from a peak of 800,000 barrels per day (b/d) in 1999 to nearly 550,000 b/d in 2004. Exploration and production had moved to increasingly remote areas with higher security risks and risky geology, requiring more capital and technology. As such, the Colombian government remained dependent on Ecopetrol, the state oil company, which represented the entirety of the Colombian oil industry.
Today, Mexico’s oil industry stands in a similar state of decline, as described by a recently released Americas Society/Council of the Americas white paper, “Mexico: An Opening for Energy Reform.” Oil production in Mexico as a whole has fallen from 3.8 million b/d in 2004 to 2.5 million b/d in 2013. Production of the Cantarell oil field, the most lucrative of Mexico’s shallow water reserves, peaked in 2003 at 2.1 million b/d, and is now producing less than one quarter of that.
Just as in Colombia, the problem in Mexico does not lie in a lack of resources, but rather in a lack of capital and technology. Mexico in particular maintains extensive shale deposits that remain largely untapped. The roots that bind Petróleos Mexicanos, or Pemex, and the Mexican government run even deeper than those that once bound Ecopetrol and the Colombian government. Mexico’s state oil enterprise pays for approximately 40 percent of the country’s budget—and since the government acts as both a regulator and an owner, transparency and accountability suffer.
From the age of 10, Marina Silva would wake up before dawn to prepare food for her father, so that he could set off through the dense jungle before the heat of the tropical sun made it impossible for him to keep working. In Silva’s community of rubber tappers in Brazil’s northwestern state of Acre, survival depended on the collection of natural latex that bleeds like sap from the Amazon’s seringueira tree.
Today, the vice-presidential candidate and former minister of environment draws upon her past experiences in Acre as a model of sustainable living, promoting a government policy of cooperation with forest-dwellers to develop Brazil.
“Gone is the logic of doing for the people,” Silva said last week during the 66th annual meeting of the Sociedade Brasileira para o Progresso da Ciência (Brazilian Society for the Progress of Science–SBPC). “It is [a logic of] doing with the people…a new vision for the development of Brazil…that takes into account sustainability in all of its dimensions: economic, social, environmental, cultural, political, even aesthetic.”
Silva presented her new vision at the conference, held at her alma mater, the Universidade Federal do Acre (Federal University of Acre–UFAC), in the state capital of Rio Branco. The meeting in the oft-forgotten state of Acre united some 5,400 national and international policymakers, rubber tappers, subsistence farmers, student activists, and individuals from over a dozen Indigenous ethnicities.
This week’s likely top stories: Mercosur leaders meet in Caracas; former General Hugo Carvajal returns to Venezuela; California Governor Jerry Brown visits Mexico; Mexican Congress discusses energy reform; Argentina nears its debt deadline.
Mercosur leaders to address Israel at Mercosur summit: Brazilian President Dilma Rousseff is expected to lead Mercosur leaders in condemning Israel’s military offensive in the Gaza Strip at Tuesday’s summit of Mercosur presidents in Caracas. Last Thursday, Israel referred to Brazil as a “diplomatic dwarf” after Rousseff recalled Brazil’s ambassador to Israel and the Brazilian Foreign Ministry cited Israel’s “disproportionate use of force” in Gaza. All five presidents of Mercosur’s full members—Argentina, Brazil, Paraguay, Uruguay and Venezuela—are expected to attend the summit, along with Bolivian President Evo Morales, whose country is in the process of joining the bloc. Argentine President Cristina Fernández is also expected to deliver a speech condemning “vulture funds” only one day before Argentine debt talks are set to expire.
Venezuelan ex-general freed in Aruba: Former Venezuelan General Hugo Carvajal received a hero’s welcome in Venezuela after he was released from detention by Aruban authorities on Sunday. U.S. officials have accused Carvajal of aiding in drug trafficking and supporting left-wing guerillas in Colombia. While Carvajal was waiting to be confirmed as Venezuela’s consul in Aruba, he was arrested last Wednesday at the request of the United States, but the Dutch government finally agreed that he “should have diplomatic immunity as nominated consul to Aruba.” The United States has accused the Venezuelan government of threatening the governments of Aruba and the Netherlands to release the former general.
California Gov. Jerry Brown trade mission to Mexico: California Governor Jerry Brown has arrived in Mexico to discuss immigration and trade with Mexican President Enrique Peña Nieto and leaders from Central America. The governor will meet with Peña Nieto today and with Central American leaders on Tuesday to discuss the wave of undocumented minors arriving in the United States. The focus of the trip will be the economy and trade, and the governor will be joined by a delegation of more than 100 state government, business, economic development, investment and policy leaders to foster trade, educational exchanges, climate change, and tourism between California and Mexico.
Mexico’s Chamber of Deputies to discuss energy reform legislation: Members of Mexico’s lower house will begin discussion today on secondary legislation for Mexican energy reform. The reform will permit the participation of private national and foreign investment in Mexico’s oil and gas company PEMEX and the Comisón Federal de Electricidad (CFE–Federal Electricity Commission) for the first time in the country’s history. The Partido Acción Nacional (National Action Party—PAN) has promoted the creation of a Fondo Mexicano del Petróleo (Mexican Fund for Oil) with profits derived from the oil industry in order to invest in infrastructure and technology. The director of CFE, Enrique Ochoa Reza, emphasized the benefits of the reform, including generating cheaper and more environmentally friendly forms of energy.
Argentina at risk of default as debt deadline nears: Upon the news that the Argentine government will not meet with a debt mediator until tomorrow, Argentina’s government bonds dropped to a one-month low today. The Argentine government has met with court-appointed mediator Daniel Pollack on four occasions, and negotiations over $1.5 billion in unpaid debts remained deadlocked after no progress had been made with talks on Friday. If negotiations are not completed by July 30, or a court delay is not offered, Argentina will default for the second time in only 13 years.
June 1: This AQ-Efecto Naím segment looks at sustainable cities in the hemisphere.