Anti-government protesters once again took to the streets across Brazil on Sunday, this time in smaller numbers, but with the same demands for President Dilma Rousseff to leave office.
This is the second march in less than a month in which Brazilians have spoken out against Rousseff and the ruling Partido dos Trabalhadores (Workers’ Party—PT). At least 500,000 people gathered in 24 cities throughout the country, chanting slogans like “Out with Dilma” and “Impeachment Now.”
On March 15, nearly two million people participated in one of the largest protests in Brazil’s recent history. Discontent over unpopular austerity measures and a kickback scandal involving state-run oil giant Petrobras and the PT were major catalysts.
“The Workers Party failed Brazil,” Cristiano Jacobs, a Rio de Janeiro businessman, said during the march. “They have left Brazil broke.”
Rousseff is facing historically low approval ratings. In a recent Datafolha poll, 60 percent of Brazilians said they believe she is doing a "bad" or “terrible” job. 2,834 people were interviewed April 9 and 10, with a margin of sampling error of 2 percentage points. The same poll showed that 63 percent of those interviewed support opening the impeachment process against Rousseff.
This week’s likely top stories: Brazilians demonstrate against corruption; Colombian generals investigated; Obama and Castro hold meeting; Puerto Rico seeks debt help; Chilean communities fight mining companies over water.
Hundreds of Thousands Protest Corruption in Brazil: Hundreds of thousands of Brazilians took to the streets on Sunday to protest government corruption. Estimates of participants vary, but police say almost 700,000 citizens protested, while organizers of the demonstrations claim the number was closer to 1.5 million people. The protests, which took place in Rio de Janeiro, São Paulo and across Brazil, were smaller than the ones that took place in mid-March 2015. Demonstrators then and now claim that President Dilma Rousseff was aware of the bribery taking place at Brazil's state oil company, Petrobras, during her tenure there, and yesterday, many called for the president's impeachment. Rousseff’s approval rating sank to just 13 percent following last month’s protests.
Colombian Generals Are Investigated for “False Positives”: The office of the Attorney General of Colombia announced on Sunday that approximately 22 army generals are being investigated for their suspected involvement in the “falsos positivos” (“false positives”) scandal during the term of former President Álvaro Uribe. The case involves thousands of civilians who were promised jobs and then murdered and dressed up as paramilitaries by the armed forces in order to up the military’s kill count. So far, 800 members of the military have been imprisoned and over 5,000 linked to the scheme. Attorney General Eduardo Montealegre Lynett stated that the investigation should conclude by the end of 2015.
Presidents Obama and Castro Meet at Summit of the Americas: At the seventh Summit of the Americas in Panama on Friday and Saturday, a showing of anti-U.S. sentiment by Argentine President Cristina Fernández de Kirchner and the Venezuelan and Bolivian delegations was overshadowed by a historic meeting between Presidents Barack Obama and Raúl Castro. The face-to-face meeting—which was the first between presidents of the U.S. and Cuba in over 50 years—was mostly symbolic, but demonstrated the two leaders' willingness to work together despite ideological differences. Latin American leaders praised the U.S. for renewing relations with Cuba, and experts are now analyzing how Obama can best leverage the renewed credibility. The leaders did not issue a joint declaration at the end of the summit, as a result of President Nicolás Maduro’s demand to include a denunciation of U.S. sanctions in Venezuela.
Puerto Rico Calls on Former IMF Officials to Help with Debt: Puerto Rico’s government and investors have asked former International Monetary Fund (IMF) officials for help in resolving the island's debt crisis. Puerto Rico has hired Anne Krueger, the IMF’s former first deputy managing director, as a consultant, and hedge funds that own Puerto Rican bonds have reportedly approached Claudio Loser, the former director of the IMF’s Western Hemisphere department. Puerto Rico has over $7 billion in debt, and last month, Fitch Ratings downgraded its debt to a “B” rating. On Wednesday, the Puerto Rico Electric Power Authority faces a debt payment deadline, but is currently negotiating with creditors about restructuring.
Chilean Citizens and Mining Company Continue Dispute: Citizens in Caimanes, a small community in the north of Chile, are locked in a dispute with mining company Antofagasta Minerals over water, a precious resource in the arid region. Citizens claim that the Los Pelambres copper mine’s tailings dam is contributing to water scarcity and that the mine’s activity is contaminating water in their community. Juan Olivares, one of the citizens that has criticized Antofagasta Minerals, said this weekend, “They say we are looking for an economic reward. That has never been the goal […] We want the law to be respected in Chile.” A recent court ruling ordered the company to demolish the dam, but the company will appeal the decision, and is also exploring further investment in the area.
The companies being investigated by Brazil's Federal Public Ministry include large banks such as Santander, as well some of Brazil’s largest public and private enterprises, among them Embraer and the country’s embattled state-run oil giant, Petrobras. The companies are suspected of paying bribes to members of Brazil’s Conselho Administrativo de Recursos Fiscais (Administrative Council of Tax Appeals—CARF), a body within the Finance Ministry that deals with tax disputes, in order to reduce or avoid fines for tax evasion.
The federal investigation, called Operação Zelotes (Operation Zealots), began in 2013 but exploded into the public consciousness last Thursday, when federal police raided CARF headquarters and the offices of several of the companies and individuals believed to be involved in the scheme. While no arrests were made, authorities seized 1.3 million reais in cash (about $400,000), as well as reams of documents. Investigators have shown that the scheme has cost government coffers $1.8 billion, but believe that the real number could be as high as $5.9 billion.
Several companies, including Brasil Foods (BRF) and Marcopolo, have released statements denying any wrongdoing. In a press release, BRF stated that it will “take all measures necessary to protect its interests.” Others have taken a different tack. Federico Paiva, one of the prosecutors leading the investigation, indicated yesterday that several of the companies under investigation have signaled their willingness to enter into a plea bargain. The Federal Public Ministry has reportedly begun to analyze those proposals today.
Brazil’s economy is expected to contract by 0.83 percent this year and inflation to climb to 8.12 percent, according to the Brazilian Central Bank’s weekly survey of financial experts, which was released yesterday. The growth forecast for 2016 was also lowered from 1.3 percent last week to 1.2 percent this week. According to Bruno Rovai, an analyst at Barclays, “[…] incoming data supported our view that Brazil will face a recession this year, and that any strong recovery will be hard to achieve next year.”
Yesterday’s survey marks the 12th consecutive week of worsening forecasts on the Brazilian economy, and come at a tense time for Brazilian President Dilma Rousseff, who is dealing with an escalating corruption scandal involving the state-run oil company, Petrobras. Rousseff has also received criticism, including from traditional allies, for austerity measures that her government has introduced to manage Brazil’s deficit and inflation woes.
“We do not discard the possibility that political risks could increase in the next few weeks, given Petrobras’ audit result deadline or corruption investigations escalating further,” said Rovai. Petrobras is due to publish its audited fourth quarter results at the end of the month.
March has been a tough month for the Brazilian government. In the past few weeks, millions of people have taken to the streets to protest against President Dilma Rousseff and demand her impeachment, the country’s local currency devalued to its lowest exchange rate in 12 years and state oil giant Petrobras continued to be engulfed in one of the biggest corruption scandals in the country’s history.
To top it off, national unemployment went up and Rousseff’s popularity hit an all-time low. Pollster Datafolha released figures this week showing the president’s approval rating reached 13 percent, the lowest presidential approval level since 1992.
In an effort to rebound from these negative numbers, Rousseff is schedule to announce some changes to her government roster. This comes after Minister of Education Cid Gomes resigned earlier this week.
She also presented an anti-corruption government package before Congress on Wednesday that introduced reforms such as requiring government officials to have no criminal records (known as “Ficha Limpa” or clean slate), making it illegal for unregulated slush funds to be used in the financing of electoral campaigns, and granting the judicial ministry the power to seize goods and properties of those convicted of corruption.
“Prevent and battle,” Rousseff said as she introduced her latest defensive strategy. “This is what we see as the essential strategy in order to deepen Brazil’s commitment with democracy.”
Brazil’s annual Carnaval had a new entrant this year: Brooklyn Brewery.
Days before the February festivities, Brooklyn Lager was the best-selling beer amid a selection of Brazilian and international craft beers at B33R CLUB in the southern capital of Curitiba. In one day, the specialty shop sold three boxes (72 bottles) of Brooklyn Lager to Brazilians stocking up for Carnaval—three times the store’s average monthly sales of the brew.
“It’s more and more popular; you can find Brooklyn Beer everywhere now,” said Marcio Mathias, the 31-year-old owner of B33R CLUB. “And Brazilians think everything imported is better than local products.”
Brooklyn Brewery has taken notice, and is increasing its presence in Latin America’s most populous nation. Since first entering Brazil in 2011, selling about 25,000 liters a month, sales have multiplied 12 times to an average of 300,000 liters a month last year, according to export manager Claire Moyle. She expects to see another 30 percent jump in sales this year, making Brooklyn Brewery one of the larger craft brewers in all Brazil.
“Brazil kind of surprised us with our success down there,” Moyle said in a telephone interview from the company’s Brooklyn headquarters. “This is real volume with a lot of potential.”
The success of Brooklyn Brewery highlights the growth of Brazil’s craft beer market and the opportunity for niche multinational companies, even at a time of economic hardship.
This week’s likely top stories: Opposition alarmed by President Maduro’s power of decree; U.S. and Cuba continue talks; Brazilian citizens protest corruption; Bolivia and Brazil to sign energy agreement; Cuba allows first public wi-fi center.
President Maduro Given Power to Rule by Decree: Venezuelan President Nicolás Maduro was given the power to rule by decree on issues of defense and public security after new legislation was passed by the National Assembly on Sunday. Maduro asserted that the Enabling Law gives him the power “to defend peace and sovereignty” in the country. The legislation was passed in response to new U.S. sanctions last week on Venezuelan officials. Maduro claimed that the decree, which lasts through December 31, 2015, will help him fight the threat posed by U.S. imperialism. The measure spurred new fears among the opposition about government abuses. On Saturday, UNASUR nations called on the U.S. to retract its recent measures against Venezuela.
U.S. and Cuba to Continue Negotiations: United States Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson traveled to Havana on Sunday to begin the third round of talks between Cuba and the U.S. to discuss the re-opening of embassies in the context of renewed diplomatic relations. Jacobson will meet with Josefina Vidal, Cuba’s lead negotiator on U.S. issues. Talks began on Monday and may continue through Wednesday. The U.S. hopes to come to an agreement before the upcoming Summit of the Americas in Panama on April 10-11. Despite progress, there are still difficult issues to work through, such as Cuba’s desire to be removed from the U.S. list of state sponsors of terrorism and the U.S. request for unrestricted travel for diplomats on the island.
Mass Protests against President Rousseff in Brazil: Protests against President Dilma Rousseff erupted across Brazil on Sunday. In Rio de Janeiro, thousands of citizens participated in the demonstrations against Rousseff and the governing Partido dos Trabalhadores (Workers’ Party—PT). Many protesters called for the president’s impeachment, claiming that she must have been aware of the corruption in the state oil company, Petrobras. Rousseff’s popularity has plunged recently, though she denies any involvement in the scandal. The largest demonstration took place in São Paulo, with over 200,000 participants, according to polling agency Datafolha. On Monday, the government sent a package of anti-corruption laws to Congress for consideration.
Bolivia and Brazil to Sign Memorandum on Hydroelectric Project: Bolivian Hydrocarbons and Energy Minister Luis Alberto Sánchez announced on Sunday that Brazil and Bolivia will soon sign a memorandum of understanding on two hydroelectric power projects, with the goal of increasing electricity generation as well as promoting energy exchanges between the two countries. Sánchez visited Brazil last week and held discussions with Eletrobras officials and Brazilian Mines and Energy Minister Eduardo Braga. The executives are expected to finish up negotiations in Bolivia this week. The planned agreement aims to strengthen the capabilities of the Rio Madera and Cachuela Esperanza hydroelectric projects.
Cuba Allows First Public Wi-fi Center in Havana: Etecsa, Cuba’s state telecommunications agency, has authorized Cuban sculptor Kcho to provide the island’s first public wireless Internet access at his cultural center in Havana. Kcho has strong connections to the Cuban government. Kcho is paying out of his own pocket to run the public Internet service, which is expected to cost him roughly $900 a month. Approximately 5 percent of Cubans currently have Internet access due to prohibitively high costs.
Brazilian President Dilma Rousseff signed a new law on Monday that sets harsher penalties for gender-based killings of women and girls. The new legislation gives a legal definition for femicide under Brazil’s criminal code as any murder that involves domestic violence, contempt or discrimination against women. Convicted offenders will now face jail sentences of 12 to 30 years, with even longer jail terms for crimes committed against pregnant women, girls under 14, women over 60, and people with disabilities.
The new legislation expands on a previous domestic violence law known as the Maria da Penha Law, enacted in 2006 by Rousseff’s predecessor, President Luiz Inácio Lula da Silva. Maria da Penha is a women’s rights activist who became paraplegic after her ex-husband beat her for 14 years and attempted to murder her twice. The 2006 legislation had three main components: it prevented aggressors from being punished with alternative sentences, increased the maximum sentence for domestic violence to three years, and mandated that abusers distance themselves from the women they had attacked.
After Rousseff signed the most recent law, she enumerated statistics about the violence women face in her country—15 women are killed daily in Brazil, many through domestic violence, and an estimated 500,000 Brazilian women and girls are raped annually, but only 10 percent of survivors report the crimes.
On the BBC radio show “World Have Your Say” on Tuesday, women’s rights activists lauded the new law as a victory for women’s rights, but also cautioned the audience not to overestimate the law’s potential to eradicate gender-based violence, due to the difficulty of convicting criminals in the first place. Julia Pá, a filmmaker based in Brasília and a guest on the program, remarked that misogyny “is so ingrained in Brazilian society, and even in the judicial system itself, that you’re going to need to instruct judges and[…] people working with this on women’s issues and the importance of protecting women.”
The Inter-American Commission on Human Rights (IACHR), the independent human rights body of the Organization of American States (OAS), experienced a period of intense political turmoil from 2011 to 2013. Criticism of the Commission by members of the OAS—most notably Ecuador, Nicaragua and Venezuela—was echoed by Colombia, Peru and others in their vocal disapproval of concrete IACHR decisions.
The increasingly antagonistic diplomatic environment came to a head in April 2011, when the IACHR requested that Brazil halt its construction of the $17 billion Belo Monte hydroelectric dam. Brazilian President Dilma Rousseff responded by withholding its dues payment, withdrawing Ruy Casaes, the Brazilian ambassador to the OAS, and temporarily withdrawing Paulo Vannuchi, Brazil’s candidate for a position on the Commission (although he was later elected to the Commission).
Two months after Rousseff’s sharp reaction to the Belo Monte matter, the OAS Permanent Council created a Working Group charged with preparing a set of recommendations on how to strengthen the Inter-American Human Rights System (IAHRS). On December 13, 2011, the Working Group approved a report containing 53 recommendations to the IACHR. The recommendations largely referred to operations, rules of procedure and institutional practices, but some attempted to limit the capacity of the Commission and weaken its mechanisms. In short, this process was a collective catharsis for critics of IACHR decisions, combined with a chance to air broader disdain for the OAS and any institution deemed to be spoiled by U.S. influence.
This week’s likely top stories:U.S.-Cuba talks promising; New delegation for FARC peace talks; Dollar strengthens against Latin American currencies; Tabaré Vázquez takes office; Peruvian businesses to learn from Costa Rican ecotourism.
U.S.-Cuba Normalization Talks Promising: After two rounds of talks—one in Havana last month and the second in Washington DC on Friday—the U.S. and Cuba announced that the re-opening of a U.S. embassy in Havana before the April 10-11 Summit of the Americas is not out of the question. While U.S. Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson and her counterpart—Joséfina Vidal Ferreiro, the director for United States Affairs at the Ministry of Foreign Affairs of Cuba—agreed that the talks were productive, Cuba remains on the State Departments Sponsors of Terrorism list and the Cuban Interests Section in Washington DC remains unbanked. While not a precondition for further normalization, Vidal emphasized that the removal of Cuba from the terrorism list was a top priority. U.S. Secretary of State John Kerry emphasized that the terrorism list was an issue separate from the negotiations, and that the review of Cuba’s position on the list would go through Congress. In simultaneous addresses on December 17, U.S. President Barack Obama and Cuban President Raúl Castro announced the re-establishment of relations after Cuba released 65-year-old former U.S. Agency for International Development (USAID) contractor Alan Gross on humanitarian grounds and the U.S. released the three remaining “Cuban Five.”
Colombian President Announces New Delegation for FARC Peace Talks: Colombian President Juan Manuel Santos announced on Monday that a new delegation of negotiators will be sent to Havana, Cuba on Tuesday to join the ongoing peace talks with the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC). The emissaries—five active generals and one admiral of the Colombian Armed Forces—are joining the peace talks with the purpose of discussing a bilateral ceasefire. Santos also commented on the possibility of reaching a solution with the United States to not extradite FARC leaders, should an agreement ending the conflict be reached. Last week, former UN Secretary-General Kofi Annan attended the talks, declaring that any agreement must be just and meet international standards. “Transitional justice is an issue of concern and controversy,” he said. “However, I would like to emphasize that justice must fit the Colombian context—while respecting international minimum standards. No one shoe fits all.”
Dollar Strengthens Against Latin American Currencies: Several currencies in Latin America are at their lowest levels in years, due to the decline in commodity prices and the expansion of the U.S. economy. Higher U.S. interest rates are expected to drive funds out of riskier emerging markets, contributing to currency weakness in the region. This week, however, several currencies may make profits, with operators seeking to exchange them for dollars to avoid the risk of a currency relapse later in the year, in which the dollar may weaken. In Brazil, the real may decline to 3 reais per dollar this week, causing a further devaluation of the Brazilian currency as market players turn to the dollar. The Colombian peso may move from 2,480 to 2,600 pesos per dollar in the next few weeks. In Peru, the dollar is expected to continue strengthening against the Peruvian Nuevo Sol from 2.96 to between 3.090 and 3.105 Nuevos Soles per dollar. The Argentine peso will likely continue its slight decline to an official 8.77 pesos per dollar, but the informal market levels continue to stay at 13 pesos per dollar. Increased purchasing of dollars may continue the Latin American currency devaluation trend seen in the past five years.
Uruguayan President Tabaré Vázquez Takes Office: Uruguayan President Tabaré Vázquez was inaugurated on Sunday, taking over from 79-year old President José Mujica. Vázquez, a 75-year old oncologist who served as president from 2005-2010, represents the Frente Amplio (Broad Front—FA), a leftist coalition party. In his inauguration speech, Vázquez called for national unity, particularly regarding public education, health and housing. Vázquez will inherit a growing economy and historically low unemployment rates. This transfer of power marks 30 years of uninterrupted democracy in Uruguay since President Julio María Sanguinetti‘s 1985 election ended the country’s 12-year dictatorship. “I would like to earnestly greet the 30 years of uninterrupted democracy we enjoy in Uruguay,” said Vázquez.
Peruvian Businesses to Learn from Costa Rican Ecotourism Best Practices: Sixteen Peruvian businesses are attending the Seminario Internacional de Desarrollo y Gestión de Productos y Servicios Turístico Sostenible (International Seminar for Development and Management of Sustainable Tourism Products and Services) in Costa Rica from March 1-8 to learn best practices regarding ecotourism. Participants in the week-long seminar, organized by La Asociación Costarricense de Profesionales en Turismo (Costa Rican Association of Tourism Professionals—Acoprot), will visit Costa Rican businesses that have successfully created sustainable products and business models. The Peruvian entrepreneurs will learn from tourist guides, sustainable companies and hotels, and will participate in site visits to parts of Costa Rica that have applied sustainable tourism methodologies—the Monteverde Cloud Forest and La Fortuna volcano. The seminar offers technical round tables, keynote speeches and workshops.