A new round of negotiations will begin on March 27 over Panama’s $225 million Barro Blanco hydroelectric project—now 95 percent complete, but the source of a long-standing feud between the Generadora del Istmo S.A. (GENISA) company, the contractor for the dam, and the Ngäbe Buglé Indigenous group, which is vehemently opposed to the project due to environmental concerns.
After a wave of local protests stalled construction work on February 9, the Panamanian government launched negotiations with GENISA and Indigenous communities on February 21. The government has since agreed to investigate alleged environmental violations committed by GENISA, including the mismanagement of solid and hazardous waste and failure to coordinate the use of explosives and flammable substances with the fire department.
GENISA is a Panamanian company created specifically for the construction of the Barro Blanco dam. The project has been financed through equity capital, as well as loans provided by the German Investment Corporation (DEG), the Netherlands Development Finance Company (FMO) and the Central American Bank for Economic Integration (CABEI).
The talks are being led by a high-level committee headed by Panamanian Vice President and Foreign Minister Isabel de Saint Malo de Alvarado, and facilitated by the UN in the district of Tolé, 400 kilometers west of Panama City. Other committee members include Security Minister Rodolfo Aguilera, Interior Minister Milton Henriquez, Labor Minister Luis Ernesto Carles, and Minister for the Environment Mirei Endara.
If the U.S. wants to keep the Summit of the Americas process on track and regain some measure of influence in the hemisphere, it will have to change its Cuba policy, pronto. Reframing our policy and saving the Summit process isn’t as tough as it seems; it just takes leadership.
In coming months, the United States is going to face a tough choice: either alter its policy toward Cuba or face the virtual collapse of its diplomacy toward Latin America. The upcoming Summit of the Americas, the seventh meeting of democratically elected heads of state throughout the Americas, due to convene in April 2015 in Panama, will force the Obama administration to choose between its instincts to reset Cuba policy to coincide more closely with hemispheric opinion and its fears of a domestic political backlash.
During her visit to Washington on September 2, Panama’s vice president, Isabel Saint Malo, indicated her intention to invite Cuba to the Summit, but public U.S. statements failed to commit President Obama’s attendance.
The periodic inter-American summits have become more important than ever for U.S. regional diplomacy, but our Latin American neighbors have said—firmly and unanimously—that unless Cuba is invited, their chairs will be empty. At the same time, the alarming specter of photos of Presidents Barack Obama and Raúl Castro conversing around the same table, apparently as equals, will set off a political reaction among the Cuban-American hardliners, Democrats and Republicans alike—the thought of which gives the White House politicos heartburn.
This week’s likely top stories: Juan Carlos Varela will be Panama’s next president; talks between Haiti and the Dominican Republic are postponed; marijuana legalization goes into effect in Uruguay; a Colombian mine collapse kills at least 12 people; a Brazilian soccer fan is killed in Recife.
Juan Carlos Varela Wins Panamanian Election: Juan Carlos Varela of the Partido Panameñista won a highly anticipated election on Sunday as Panamanian voters elected their next president. With 80 percent of votes counted, Varela had gained a 7 percent lead over his closest rival, José Domingo Arias of the ruling Cambio Democrático (Democratic Change), with Partido Revolucionario Democrático (Democratic Revolution Party—PRD) candidate Juan Carlos Navarro in third. Both Arias and Navarro conceded victory to Varela on Sunday night, although the election results are not yet official. Varela will take office on July 1 with Isabel Sain Malo, who will become vice president.
Talks Between Haiti and the Dominican Republic Postponed Again: A third round of talks between the Haitian and Dominican government have been postponed a fourth time after Venezuelan Foreign Minister Elías Jaua, who is mediating between the two countries, asked to reschedule. Haitian and Dominican leaders were expected to discuss trade, health, tourism and migration on May 6—and to address last year’s Dominican Constitutional Court decision that has left hundreds of thousands of descendants of Haitian immigrants born in the Dominican Republic without citizenship. A first round of talks between the two countries took place on January 7, and a second round took place on February 3. The third round was originally scheduled for March 12, and is now expected to take place on May 8.
Uruguayan Marijuana Law Comes into Force: Uruguay’s marijuana legalization law will go into effect on Tuesday, permitting Uruguayan adults to grow up to six cannabis plants and to purchase up to 40 grams of the drug each month. All Uruguayan pharmacies that choose to sell cannabis must register with the national government, as do all individuals who wish to purchase marijuana from pharmacies. Diego Cánepa, head of the country’s drugs board, said that the sale of cannabis is not expected to begin until late 2014, but that the licensing process for companies to grow the plant will be rolled out within the next 15 days. Uruguayan President José Mujica, who will visit the White House on May 12, has criticized pot laws in the United States, saying that Uruguay’s policies will be more restrictive.
Death Toll Rises in Colombian Mine Collapse: At least 12 people were killed when an illegal gold mine in Colombia’s Cauca department collapsed last Wednesday night. After three victims were identified last week, rescue workers recovered more victims this weekend, and say that at least four other people who are still missing may have perished. The mine collapse was the second in less than a week in Colombia, after four miners in Antioquia department died after inhaling toxic fumes in an illegal mine.
Brazilian Soccer Fan Killed in Recife: A 26-year-old Brazilian soccer fan was killed outside the Estadio do Arruda in Recife on Friday, when unidentified fans ripped toilet bowls out of the stadium bathroom and threw them from the top deck in a match between Santa Cruz and Paraná. Brazilian authorities will bar fans from the stadium for the next two matches and said that Santa Cruz fans will be banned from all stadiums until those responsible for the death are identified. The Arruda stadium will not host any World Cup matches, which start next month.
Panama and Colombia are expected to sign a bilateral free trade agreement in Panama City today, finalizing a commitment that was reached by the two countries last June. Panamanian Minister of Commerce and Industry Ricardo Quijano and Colombian Minister of Commerce, Industry and Tourism Sergio Díaz-Granados will participate in the official treaty-signing ceremony.
During a television interview yesterday, Panamanian President Ricardo Martinelli expressed optimism about the agreement, saying that it is pivotal for Panama’s integration into the Pacific Alliance. Panama currently has free trade agreements with Chile and Peru and seeks to establish bilateral trade agreements with other Pacific Alliance member states—including Mexico, Chile and Colombia.
Martinelli also confirmed that the agreement will end what he has deemed an "unfair and detrimental” aspect of Panama’s trade relationship with Colombia. Currently, Colombia imposes a 10 percent “re-exportation” tariff on Panamanian-produced textiles and footwear before they are shipped internationally from Colombia’s free trade zone, Zona Libre de Colón. Last year, Colombian exports to Panama amounted to $2.857 billion, 80 percent of which was accounted for by crude oil. In contrast, Panama only exported $72 million of goods to Colombia, represented mainly by apparel shipments.
A trade deal between the U.S. and Panama that was negotiated five years ago went into force on Wednesday. The agreement, which will allow increased U.S. exports into the country, was signed by former president George W. Bush in June 2007 and ratified by Panama’s parliament the same year. However, the U.S. Congress held up the agreement with concerns over Panamanian labor protections and tax haven laws. It was finally ratified on October 12, 2011 and signed into law by President Obama on October 21, 2011.
The trade promotion agreement, known in Spanish as El Tratado de Promoción Comercial (the Treaty of Commercial Promotion) will eliminate Panama’s tariffs on 86 percent of U.S. goods such as cars, medical and information technology, chemicals, and electrical equipment. It also eliminates Panama’s tariffs on 50 percent of U.S. agricultural exports. Other tariffs will be phased out over time. The agreement will open the U.S. market to 100 percent of Panama’s industrial and fisheries products, as well as textiles and artisanal items.
Ricardo Quijano, Panama’s minister of commerce and industry, said that the trade agreement would benefit Panamanian consumers, who he said will pay less for products that enter the country without taxes. He argued that the agreement will give Panama the tools it needs to compete in a free market economy while the country is in the midst of a $5.3 billion canal expansion project.
However, members of Panama’s agricultural sector are worried that they are not prepared to deal with a flood of low-priced products from the United States. The Asociación Nacional de Benefactores y Exportadores de Café (National Association of Coffee Benefactors and Exporters) said they were worried about the reduction of tariffs on instant coffee.
“The direct consequence of this measure is the accelerated loss of the national market stocked by national producers, benefitting transnationals with a lot of economic power,” said the coffee producers in a public announcement.
The U.S. is Panama’s principal trade partner, with $163 million of Panama’s $785 million in exports destined for the U.S.
Top stories this week are likely to include: Fidel Castro’s birthday; Buenos Aires subway shutdown continues; public teachers to end striking in Panama; talks to renew in Colombia between the government and the Indigenous Nasa; and a possible dialogue over Venezuela’s detained U.S. Marine.
Fidel Turns 86 Years Old: Cuba’s revolutionary leader and former president, Fidel Castro, turns 86 years old today. He faces health issues, having stepped down from the presidency in 2006 after undergoing intestinal surgery—and has not been seen in public or mentioned in the news since June 19, according to Reuters. AQ Editor-in-Chief Christopher Sabatini notes of the occasion, “Six years ago when Fidel Castro stepped aside to pass the torch to his brother Raúl, people thought the end was near. Give the man's staying power credit, but really, what modern country in the region and in the world remains as centered and fixated on an 86-year-old man? It's a sign of how little Cuba—and U.S. policy toward the island—has progressed. We're all stuck in the past.”
Subway Shutdown in Buenos Aires: A strike by union employees of Buenos Aires’ municipal subway system is entering its tenth day today, with no end in sight after talks broke down on Friday with the administration of Mayor Mauricio Macri. The subway shutdown has inconvenienced between 600,000 and 1 million daily commuters. Macri, the most prominent figure of the opposition Propuesta Republicana (Republican Proposal—PRO) party, is blaming the ruling Frente para la Victoria (Front for Victory—FPV) party, to which President Cristina Fernández belongs. Macri is accusing FPV operatives of inciting the union workers, who are demanding a 28 percent increase in pay. Buenos Aires Deputy Mayor Maria Eugenia Vidal stated that the city officials “just don’t have the means to pay for this.” Pay attention to see if there will be any breakthrough in negotiations this week.
Teacher Strike to End in Panama: Leaders of a teacher strike in Panama reached an understanding with the government on Saturday to end the weeklong strike today. Teachers were protesting over issues such as decaying classrooms and insufficient pay.
Santos-Nasa Mediation To Resume in Colombia: Leaders of the Indigenous Nasa group expect to set a date by this Tuesday for the resumption of mediated talks with the government of Juan Manuel Santos. More than 10,000 Nasas marched in the department of Cauca yesterday demanding the government return to the table. Cauca, in southwest Colombia, is home to many rebels belonging to the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC). The Santos administration, therefore, has placed many Colombian soldiers in Cauca as part of the ongoing internal conflict with the FARC, which the Nasa view as a threat to their territorial sovereignty. The Nasas and the government, however, hope to reach an agreement through mediation.
Venezuela-U.S. Showdown Over Detention: After Venezuelan President Hugo Chávez announced late last week that police have detained an American citizen who claimed to be a former U.S. Marine, tensions have flared between the U.S. and Venezuelan governments. According to the Associated Press, a State Department official said that the U.S. authorities were not notified of his arrest. Chávez has openly suspected that the detainee, whose name has not been released, may be a “mercenary” scheming to destabilize Venezuela. Stay tuned to see if there may be more updates on this case in the coming week.
EXTRA, Rio 2016: After yesterday’s closing ceremony of the 2012 Olympic Games in London, the world’s attention turns to Rio de Janeiro for 2016. But is the city ready? Check out AQ’s television segment on Brazil and the Olympics on the “Efecto Naím” program on NTN24.
On March 29, the U.S. Senate confirmed several of President Obama’s diplomatic nominations, many of whom were tapped to serve in the State Department’s Bureau of Western Hemisphere Affairs (WHA). Here’s a brief rundown of the confirmed WHA officials and their new positions: Roberta Jacobson, Assistant Secretary of State for Western Hemisphere Affairs; Larry Palmer, Ambassador to Barbados; Pamela White, Ambassador to Haiti; Phyllis Powers, Ambassador to Nicaragua; Jonathan Farrar, Ambassador to Panama; and Julissa Reynoso, Ambassador to Uruguay.
Not only do these confirmations provide a celebratory sense of relief, as many of these officials waited months for their nominations to proceed through the Senate, but the timing could not be better as the U.S. delegation prepares to depart for Cartagena, Colombia, to attend this weekend’s Sixth Summit of the Americas.
Jacobson was nominated in late September after becoming acting assistant secretary in July 2011 when her predecessor, Arturo Valenzuela, returned to academia. It’s both notable and laudable that a woman is leading WHA for the first time.
Jacobson’s candidature was challenged by Cuban-American Senator Marco Rubio (R-FL), who placed a hold on her nomination last November with a call to the Obama administration to “review abuses in the people-to-people Cuba travel policy.” Rubio dropped his hold on March 22 following guarantees from the State Department that it would require “applicants to demonstrate how their itineraries constitute purposeful travel that would support civil society in Cuba and help promote their independence from Cuban authorities,” according to the senator’s news release.
AQ Online today launches its weekly Monday Memo that looks ahead to what it expects to be the top headline grabbers for the week. The top anticipated stories for the week of February 27 include: Hugo Chávez’ surgery; U.S. Secretary of Homeland Security Janet Napolitano’s current five-country Latin America tour; U.S. Vice President’s forthcoming visit to Mexico and Honduras; the search for a new prime minister in Haiti; and FARC suspending kidnappings in Colombia.
Chávez' Cancer: As the Venezuelan president heads to Cuba for a second surgical operation, the rumor mill on his real health status will continue as will the discussion about what its implications will be for Venezuela's October presidential election. Christopher Sabatini, AQ editor-in-chief, observes: “While it may translate into sympathy support, President Chávez' lack of transparency about his illness and treatment will likely raise fears among some Venezuelans about their future and a potential successor—irrespective of what the president says upon his release.”
Napolitano on Latin America Tour: U.S. Secretary of Homeland Security Janet Napolitano begins a five-country tour today through Wednesday in Mexico, Guatemala, El Salvador, Costa Rica, and Panama. According to a Department of Homeland Security (DHS) press release, Secretary Napolitano will be accompanied by Acting Commissioner of U.S. Customs and Border Protection David Aguilar and DHS Assistant Secretary for International Affairs Alan Bersin. Her visit is likely intended to reiterate support for security measures like the Central America Regional Security Initiative and reinforce counter-trafficking efforts to interdict narcotics through key transit points.
Biden to Mexico and Honduras: U.S. Vice President Joe Biden will visit Mexico and Honduras on March 4-6, meeting with both Presidents Calderón and Lobo. Why is the Vice President going to Honduras? While Mexico remains an important economic, diplomatic and strategic partner in the war on drugs, the trip to Honduras is a mystery. Since the 2009 coup, Honduras has become the murder capital of Central America. Two weeks ago, a fire at a Honduran prison left 350 inmates dead—an incident that Human Rights Watch blamed on poor and overcrowded conditions in Honduran prisons.
Haiti Prime Minister Watch: The abrupt resignation of Haitian Prime Minister Gary Conille on Friday culminated weeks of disagreement between him and President Michel Martelly. The departure of the former UN diplomat and favorite of the international aid community is a blow for both political stability in Haiti and for donor nations that had great hopes in a government that included his technical skills. Jason Marczak, AQ senior editor, says: “Expect President Martelly to move quickly in naming a successor, with a candidate likely announced this week.” Foreign Minister Laurent Lamothe is one possibility as is Chief of Staff Ann-Valerie Milfort. However, both would face a tough confirmation by an opposition-controlled legislature.
FARC Hostage Release: Colombia's FARC announced on Sunday that it will suspend all kidnapping and free remaining prisoners. Is this a political ploy or a true change in tactics? Given the group's decentralized nature, it is unclear whether the FARC secretariat can actually enforce the order, if it chooses to do so. Expect renewed debate this week on whether this may help to clear the way for an eventual peace dialogue or if the current strategy should continue without talks.
Panamanian President Ricardo Martinelli signed a pledge on Tuesday stating that he will not seek reelection in the country’s 2014 presidential elections. According to media observers in Panama, Martinelli made the pledge in response to controversial rumors of his desire to run again in a country with strict constitutional prohibitions against consecutive presidential terms. Until recently, President Martinelli's approval ratings hovered around 80 percent, but recent actions to quell protests by the Indigenous Ngabes Buglés people regarding mining and hydroelectric activities has brought his job approval and likability figures to around 33 percent—their lowest levels ever.
Martinelli challenged members of the opposition to sign a similar document and accused opposition parties of spreading false rumors about his seeking reelection. However, opposition party leader Francisco Sanchez of the Partido Revolucionario Democratico says the president’s move “shows that no one believes him,” and only serves to underline the Martinelli administration’s desperation to improve its job approval figures.
The latest poll, released Tuesday by research firm Dichter & Neira, questioned 1,200 people and found that 80.3 percent of respondents disapproved of how Martinelli handled the Indigenous strike. In addition, 71.8 percent believed the administration authorized excessive force against the protesters.
As the global marketplace becomes increasingly competitive, the pressures of manufacturing costs have risen to the forefront. These challenges drive the locations of manufacturing, where products are transported and where investors look to spend their capital. It seems that the days of faulty, substandard major projects in Central America are over as individual governments take seriously the attractions for businesses to manufacture in other world regions.
From Guatemala to the end of the isthmus at Panama, Central American nations have all realized that the only way their countries can be competitive in the modern global economy is by building a first-class infrastructure. These outputs must offer sufficient capacity to handle the demands of the movement and delivery of goods, people and services in a cost-effective and efficient manner. Every country is pouring significant funds into infrastructure, with Panama, Guatemala and Costa Rica leading the pack.
Panama, which is often considered to be the “hub of the Americas” in terms of maritime and aviation, has spent over $3 billion in projects related to the widening of the Panama Canal, and another $3 billion in the construction of a metro-rail transportation system, among other initiatives. Meanwhile, Costa Rica has posted an impressive growth rate in recent years due primarily to tourism and producing high-value products. However, Costa Rica has been criticized for its lack of infrastructure and for the bureaucratic delays that surround the approval of any major project. With hopes of sustaining its current growth, Costa Rica has responded to this criticism by reforming its concessions law to further attract investment as well as signing a historic free-trade agreement with China, aimed at attracting heavy infrastructure-related foreign direct investment as it recently did.