This Week in Latin America: Dilma visits U.S.—DR defends immigration policy—Honduras protests—Colombia false positives
June 29, 2015
Here’s a look at some of the stories we’ll be following this week:
Dilma and Obama Meet on Climate, Trade: Brazilian President Dilma Rousseff travels to Washington, DC today to meet with President Barack Obama. The trip, partly the product of a yearlong charm offensive by Vice President Joe Biden, is a sign of warming relations between the U.S. and Brazil. Revelations that the National Security Agency (NSA) spied on members of the Brazilian government led Rousseff to cancel a previous state visit in 2013. Obama and Rousseff are expected to focus on areas of mutual interest, particularly trade, defense and efforts to build support for a global agreement on climate change.
Domican Immigration Policy Under Scrutiny: On Tuesday, the Dominican Republic’s foreign minister, Andrés Navarro, will appear before the Permanent Council of the Organization of American States in Washington, DC. He is expected to respond to recent, widespread criticism of changes to his country’s immigration policies, particularly regarding the potential deportation of thousands of Haitian immigrants and their children. In a speech on Thursday at a Central American Integration System (SICA) summit in Guatemala, Dominican President Danilo Medina addressed critics, saying that the country’s policies were respectful of both Dominican law and human rights. “If in the United States, with all its resources, it’s difficult to properly document immigrants, it’s logical that it would be a challenge for us as well,” he added. Meanwhile, Haiti's prime minister last Thursday warned of a humanitarian crisis, saying that 14,000 people had crossed into Haiti in the space of a week.
Anti-Corruption Proposal Rejected by Protestors: Protests continue to swell in Honduras, as thousands of marchers took to the streets on Friday in a fresh rejection of President Juan Orlando Hernández’s government. The protests marked the fifth straight Friday that marchers have gathered in the capital, Tegucigalpa, and came just days after Hernández presented a proposal for combatting corruption, a chief concern among protesters. The proposal calls for the creation of a new, “integrated system” against impunity and corruption. According to government officials, it is intended to spur dialogue among diverse sectors of the population who have been calling for Hernández’s resignation. James Nealon, U.S. ambassador to Honduras, responded to the proposal via Twitter writing that, while it is not the U.S.’ job to dictate how Central American countries deal with corruption, Hernandez’s ideas were “worthy of serious study.”
False Positives Increase Pressure on Santos: Colombia’s President Juan Manuel Santos may have to weather another blow to peace talks with the FARC after a report released by Human Rights Watch implicated high-ranking members of the Colombian army in the false positive killings of the early 2000s. The report argues that several members of the military’s top brass knew about and may have even ordered these acts, in which civilians were killed by the military and falsely identified as guerrillas. Support for the negotiations is slipping and there are calls for the imposition of a deadline on the talks. Many wonder whether any peace deal can be negotiated without first renewing the ceasefire agreement with the FARC, which broke down in April.
This week in Latin America: the Pope on climate change—teacher evaluations in Mexico—Brazil's corruption scandal—the beautiful game
June 22, 2015
Here’s a look at some of the stories we’re following this week:
Religious Leaders Respond to Pope Francis' Climate Views: Reaction was swift and loud following the publication of Pope Francis’ encyclical on the environment, Friday. While his sweeping indictment of the global response to climate change inspired some to question the pontiff's understanding of economic policy, the reception in Latin America was more positive. Catholic leaders from Mexico to Peru echoed Francis' call for action in their own climate-related sermons on Sunday. The publication of the encyclical comes just weeks ahead of the pope’s trip to Bolivia and Ecuador, two countries with complicated histories when it comes to the environment, and Paraguay, where the government has positioned itself as an important player in UN climate negotiations, as Guy Edwards and Timmons Roberts argue this week in an AQ Online exclusive.
Education Reform Stunted in Mexico: An instructor evaluation program that began over the weekend was marked by low participation and protests by teachers groups. More than 17 percent of teachers who had been scheduled to take evaluation exams failed to show up. Emilio Chuayffet, Mexico's public education secretary, must now negotiate terms with the Coordinadora Nacional de Trabajadores de la Educación (CNTE), a powerful and sometimes violent teachers union, whose opposition to reform contributed to low turnout and led to the outright suspension of evaluations in Oaxaca and Michoacan states. The difficulty in advancing even modest reform underscores a dramatic drop in President Enrique Peña Nieto’s political capital. After successfully pushing through changes to the country’s stiffly regulated energy sector last year, a series of scandals and increasing levels of violence have disrupted the president’s agenda. This week, responsibility for righting the ship lies largely with Mr. Chuayffet.
Brazilian Construction Execs Arrested: An ongoing corruption scandal in Brazil reached new heights on Friday with the arrests of Marcelo Odebrecht and Otávio Marques, two high-level construction executives. The arrests came as part of Operation Carwash, a federal police investigation into decades of graft and bribery at the state-run oil company, Petrobras. The scandal has already lead to the indictment of dozens of government and business officials in the country, and weakened President Dilma Rousseff’s standing among a frustrated populace, though she has not been implicated directly. Still, the accusations may be getting a bit too close for the president’s comfort, and just how far the effects of the scandal will reach is an open question.
Soccer Tournaments Near Conclusion: Finally, the beautiful game will be on display this week, as the Copa America (South America’s most important national soccer tournament) and the Women’s World Cup both enter their decisive knockout stages. The Copa America’s round of sixteen gets underway on Wednesday, with tournament host Chile taking on Uruguay. Despite student protests in the lead up to the tournament, drama on the field has captured most of the attention thus far. Meanwhile, three countries from the hemisphere are still competing at the Women’s World Cup. Canada has already locked down its place in the tournament’s final eight, but the other two regional players, the United States and Colombia, will go head-to-head tonight to determine who will progress.
June 10, 2015
On Tuesday, the Brazilian government unveiled a 198.4 billion reais ($64 billion) infrastructure plan aimed at restoring economic growth through private investments in the country’s depleted roads, rail and ports. “The increase of investments in the Brazilian economy must be done by the private sector,” said Brazilian Planning Minister Nelson Barbosa. “There is a huge demand for better infrastructure in Brazil.”
Battered by high inflation, rising unemployment and a corruption scandal at state oil company Petrobras, Brazil is on the brink of a recession that is expected to be the worst in 25 years. During a ceremony to announce the spending plan on Tuesday, President Dilma Rousseff said the government plans to use market-friendly procedures to calculate the return rate on projects such as roads, where concessions will go to bidders that offer the lowest toll rate.
The government also aims to reduce its role in infrastructure projects, as the planned concessions will feature reduced subsidized funding from the Banco Nacional de Desenvolvimento Econômico e Social (National Social and Economic Development Bank—BNDES).
“Our model of concessions will guarantee that consumers get quality services at fair prices and companies get an adequate return on their investments,” said Rousseff during the ceremony. The concessions include about 2, 715 miles of highways, expansion of existing freight railways and even a railway linking the Atlantic Ocean with the Pacific Ocean via Peru. Repairing the roads will allow Brazil to get its commodities like soy beans to the market.
June 4, 2015
At a secondhand bookstore in Brazil, I recently found an old copy of Graham Greene’s novella-turned-screenplay “The Third Man." Set in the shadowy streets and sewers of post-World War II Vienna, a police investigation reveals that the leader of a crime ring has faked his death to evade police. A coffin is exhumed, a body is found missing, and an iconic sewer chase scene ensues for Orson Welles in the 1949 noir film.
I could have opened up a local newspaper to read a similar tale unfolding.
A suspected ringleader in Brazil’s largest corruption investigation was recently alleged to have faked his death in 2010 to escape prosecution, and on May 20, a congressional committee ordered for his coffin in the city of Londrina, in southern Brazil, to be dug up and for a DNA test to be conducted on the corpse. Former congressman José Janene was thought to have died in a hospital of heart disease in 2010, but now rumors swirled that he was living in Central America with a $185 million Luxembourg bank account.
Digging up corpses could be a sign that Brazil’s corruption investigators will leave no stone (or gravestone) unturned, or that the unfolding scandal at Petróleo Brasileiro S.A. (Petrobras) has devolved into a witch-hunt. In either case, the development showed the extent to which officials need to distance themselves from a scandal that has cost Petrobras at least 6.2 billion reais ($2.1 billion) in graft-related losses, implicated dozens of major domestic and multinational firms, and pushed President Dilma Rousseff’s popularity to record lows.
Monday Memo: Marches in Venezuela—Guatemalan Protests—Chilean Education Law—Transgender Inmates in Rio—Colombian Murder Trial
June 1, 2015
Thousands Amass in Venezuela for Anti-Government Protest: Nearly 3,000 Venezuelan demonstrators clothed in white marched in Caracas on Saturday in the largest protest since last year’s surge of anti-government demonstrations. In a video filmed from his jail cell prior to the protests, former opposition Mayor Leopoldo López encouraged supporters to protest peacefully to demand the release of political prisoners, an end to censorship and a date for the nearing legislative elections. López and former Mayor Daniel Ceballos were both imprisoned in 2014 for mobilizing protests in 2014 that resulted in 43 deaths, and both men went on hunger strikes last week to protest their imprisonment. Protestors in Caracas spoke out against inflation, violent crimes and shortages, and smaller protests occurred in other cities across the country.
Guatemalans Call for President Resignation: Nearly 20,000 protestors from across Guatemala gathered in the capital on Saturday to call for the resignation of President Otto Pérez Molina over charges of corruption. Protestors converged in the Plaza de la Constitución for the sixth consecutive weekend after scandals in the government have prompted several government officials, including former Vice President Roxana Baldetti, to resign. While Pérez Molina has not been accused of any crimes, his administration has been troubled by allegations of pervasive corruption. Presidential elections are set for September, and the president has vowed not to step down before completing his term.
May 29, 2015
The U.S. Justice Department accused more than a dozen people this week of being involved in a massive FIFA corruption scandal that spanned more than two decades. Several high-level officials were arrested in a luxury Zurich hotel Wednesday, including former Confederação Brasileira de Futebol (Brazilian Football Confederation—CBF) President José Maria Marin.
“Our investigation revealed that what should be an expression of international sportsmanship was used as a vehicle in a broader scheme to line executives’ pockets with bribes,” U.S. Attorney General Loretta Lynch said during a press conference Wednesday in New York. “These individuals and organizations engaged in bribery to decide who would televise games; where the games would be held; and who would run the organization overseeing organized soccer worldwide.”
Marin, who led the jogo bonito’s governing body from March 2012 to April 2015, is facing charges of corruption, racketeering and bribery. According to the indictment, Marin split an $110 million kickback with four others in order to help Uruguayan company Datisa secure global distribution rights for next month’s Copa América and the four future editions of the tournament, including the special centennial cup to be held in the U.S. next year. He also allegedly requested bribe payments from Brazilian sports marketing firm Traffic for distribution rights of the country’s Copa do Brasil.
Others arrested Wednesday were accused of taking bribes to influence the winning bids of the 2010 South Africa World Cup, 2018 Russia World Cup and 2022 Qatar World Cup, with the latter’s selection facing scrutiny for its poor human rights record. Most of these transactions were done using U.S. bank accounts, which triggered the alarm of American authorities in the FBI, IRS and DOJ.
May 27, 2015
Brazilian President Dilma Rousseff met Tuesday with Mexican President Enrique Peña Nieto in Mexico City to foster a closer relationship between the two largest markets in Latin America and the Caribbean. This event was Rousseff’s first official visit to Mexico since she first became president in 2011.
Rousseff kicked off her official visit to Mexico on Monday evening and was welcomed by the Minister of Foreign Relations José Antonio Meade. She arrived with a delegation of business representatives interested in exploring investment opportunities in Mexico.
On Tuesday, Rousseff and Peña Nieto signed investment agreements and other accords to increase air travel and tourism. They also agreed to review their bilateral preferential trade agreement (the acuerdo de complementación económica Brasil–México, known as ACE 53) in an effort to lower tariffs overall and extend reduced tariffs to over 6,000 new products. As ACE 53 currently stands, less than half of the products that Brazil exports to Mexico are included in the list of goods with reduced tariffs.
Together, the Brazilian and Mexican economies comprise 62 percent of Latin America’s GDP and make up 58 percent of Latin America’s exports. The bilateral trade between the two countries stood at $9.2 billion in 2014, up from $ 5.7 billion in 2006. With the new agreements, the countries hope to double their trade within the next decade.
May 18, 2015
Chinese Premier Li Keqiang begins an eight day trip to South America today, landing in Brazil with a promise of some $50 billion in Chinese investments in Brazilian infrastructure. This trip follows on and is consistent with the promise that President Xi Jinping made in January to invest $250 billion in Latin America and the Caribbean over the next 10 years.
Talk about checkbook diplomacy: whether each of these investments is ultimately consummated—and China has a history of big announcements that go unfulfilled—Latin American and Caribbean nations are paying attention.
The promise of infrastructure development is not unwelcome, even by the United States, which sees chronic underinvestment in Latin America’s creaking infrastructure to be a limiting factor in regional development. Resources are insufficient, and Chinese largesse meets a need. At the same time, China is not pursuing charity. Investments up to this point and into the future are clearly focused on the procurement of strategic natural resources, including energy and agriculture, and also the infrastructure to bring them to market—i.e. get them to China.
Monday Memo: Guatemalan Protests—Costa Rican Discrimination—Chinese Investment—Guyana Election—Technology in Honduras
May 18, 2015
Demonstrators Call for Pérez Molina’s Resignation: Thousands of protestors marched across 13 cities in Guatemala on Saturday to call for President Otto Pérez Molina’s resignation. The protests came as a response to a customs tax fraud scandal uncovered by the Comisión Internacional contra la Impunidad en Guatemala (International Commission Against Impunity in Guatemala—CICIG) in April that led to the resignation of Vice President Roxana Baldetti earlier this month, though she denies involvement in the scheme. The protests were organized via social media, without any clear leadership. While Pérez Molina had originally announced his intent to let CICIG’s mandate expire, the scandal later prompted the president to announce that he will request a two-year extension.
Costa Rica orders Executive Action against LGBT Discrimination: In honor of International Day against Homophobia, Transphobia, and Biphobia on May 17, Costa Rican Vice President Ana Helena Chacón announced new legislation that will punish public workers found discriminating against others on the basis of sexual orientation or gender identity. While the decree does not outline what the sanctions for discrimination will be or how they will be issued, the decree does mandate training on equal access for employees of public organizations, as well as the redefining of a couple or partner to include same-sex partners for all institutions under the executive branch. Chacón, who has long been a supporter of LGBT rights, announced the decree on Friday at Costa Rica’s Casa Presidencial. Despite the new measure, same-sex marriages and civil unions are currently not recognized in Costa Rica.
May 18, 2015
Brazil is up for sale, and bargain-hunters from Sam Zell to Stephen Schwarzman are looking for deals.
If the country’s economy could be spread onto a monopoly board, distressed domestic utilities like Companhia Energética de Minas Gerais S.A. (Cemig) would be selling for a bargain, while infrastructure like airports and railroads would be begging for investment. Meanwhile, any of the dozens of companies implicated in a massive corruption scandal at state-run oil company Petróleo Brasileiro S.A. (Petrobras) might seem impossible to give away amid the ongoing risk of legal liability and financial fallout.
In that context, foreign investors are rolling the dice that Brazil will stage a turnaround. C’mon snake eyes!
It takes a certain type of investor to be drawn to the country right now. The economy is expected to contract more than 1 percent this year. The government is in a state of political paralysis amid calls for President Dilma Rousseff’s resignation and Congress’ refusal to sign off on belt-tightening measures meant to avert a sovereign credit downgrade. Rich Brazilians are fleeing for Miami.
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