LatinNews Daily - 21 November 2024

On 20 November Nicaragua’s authoritarian President Daniel Ortega unveiled a proposed constitutional reform package.

Analysis:

Among a string of changes, the reform package would: increase presidential terms from five years to six years (Art.135); formally amend the post of vice president which Ortega’s wife Rosario Murillo currently occupies to that of “co-president” (Art. 133); and provides for further control by the executive of other branches of government. Set to be approved by the 92-member unicameral legislature which, like all institutions, is controlled by Ortega’s ruling Frente Sandinista de Liberación Nacional (FSLN), it is the latest sign of efforts to cement power by Ortega, who has been in office since 2007, and was last re-elected in November 2021 in a vote widely slammed as fraudulent and lacking democratic legitimacy, amid a brutal crackdown on dissent which has been taking place since 2018. The reform package has drawn condemnation from prominent opposition figures and the foreign community: the Organisation of American States (OAS), which Nicaragua formally left a year ago, described it as a “definitive attack on the democratic rule of law”.

• As well as the proposals to extend presidential terms (with terms also extended for legislators to six years from five [Art.146]) and to introduce the figure of “co-president”, the reform package establishes that the co-presidents would act as “coordinator” of the executive, legislative, judicial, and electoral powers (Art.132). It reduces the number of supreme court (CSJ) magistrates from 16 to nine (Art.157), and the number of electoral court (CSE) magistrates from seven to five (Art.159).
• The proposed reform package also authorises a “voluntary police” force (Art. 97) of citizens who would provide support to the police (PNN), which critics warn formalise FSLN shock troops who have previously helped the PNN quell anti-government protests. It also authorises the presidency to order the army to intervene “in support of” the PNN when required (Art.94), and for military and PNN officials to “temporarily occupy” positions in the executive branch “when the nation's supreme interest demands”. (Art.97).
• Under the reform package “traitors to the homeland” (Art.17) can be stripped of their nationality  – a fate which has already befallen hundreds of opponents, including politicians and journalists. It would also tighten control over the media (Art.68) and the Church (Art.14) (a major target of the Ortega government in its crackdown), stipulating that these should not be subject to “foreign interests”.
• The proposed reforms have been widely slammed by government critics. One prominent dissident Félix Maradiaga, a former presidential pre-candidate expelled in February 2023, was cited by BBC Mundo as saying that the reform package “not only represents a totalitarian consolidation of power in the hands of Ortega and Murillo but formalises on paper, the systemic violations to human rights which the dictatorship has been committing for years.”
• The OAS also did not mince its words, calling it “illegitimate in form and content”, and an “aberrant form of institutionalisation of the matrimonial dictatorship in the Central American country”.
• Manuel Orozco, the Nicaraguan-born director of the Migration, Remittances, and Development Programme at the US think tank Inter-American Dialogue, was cited by the Associated Press (AP) as linking the reform package to the prospect of a new US administration led by President-elect Donald Trump. While Trump’s government may not prioritise crackdowns on democratic freedoms, Orozco said that it isn’t likely to “tolerate provocations” – particularly under Trump’s nominee for secretary of state, Marco Rubio, a hardliner and outspoken critic of the Ortega government.

Looking Ahead: With the foreign community having previously responded to the Ortega government’s dismantling of democracy with sanctions and visa restrictions, yesterday the president also unveiled a bill that would make it illegal for foreign sanctions to be applied “within Nicaraguan territory.”

On 20 November Wigberto Nicanor Boluarte, the brother of Peru’s President Dina Boluarte, did not attend a court session where he was sentenced to three years’ pre-trial detention for alleged influence peddling.

Analysis:

President Boluarte’s brother is officially a fugitive from justice after he skipped his sentencing. Allegedly a central figure in a bribery and corruption racket at the heart of government, Nicanor Boluarte’s fugitive status only adds to the laundry list of alleged criminality and scandal in his sister’s administration. President Boluarte herself is the subject of numerous investigations for alleged bribery, genocide, illicit enrichment, obstruction of justice, money laundering, criminal organisation, and receiving illegal political donations. There is little room for the latest setback to dent her approval rating, which stood at just 3% in a survey by local pollster Datum published on 18 November. Whilst the government claims that the investigations are a politicised attempt to trigger impeachment proceedings against Boluarte, she retains the support of right-wing parties in congress which appear happy to prop up the government until the 2026 general elections.

• The president’s brother skipped the hearing where Judge Richard Concepción Carhuancho sentenced him to three years’ preventive detention. Prosecutors had requested the pre-trial detention arguing that Nicanor Boluarte, who missed his last two court dates, presented a flight risk. He was first arrested in May this year and is being investigated for his alleged role in two influence peddling schemes – the ‘Rolexgate’ scandal, concerning alleged bribery of President Boluarte, and for alleged involvement in another corruption scheme reported by the media in November 2023.
• Prosecutors claim that Nicanor Boluarte is a leading figure in a corruption ring labelled ‘Waykis en la Sombra’, which allegedly also includes President Boluarte’s former lawyer, Mateo Castañeda, and the governor of Ayacucho region, Wilfredo Oscorima.
• Prime Minister Gustavo Adrianzén characterised the court ruling as “the judicialisation of politics”. Playing down the significance of Nicanor Boluarte’s fugitive status, Adrianzén dismissed “the ludicrous idea that there is a criminal organisation [in government]”, which he said had been fabricated to secure President Boluarte’s impeachment.

Looking Ahead: In a separate significant court ruling yesterday, supreme court justice Juan Carlos Checkley ordered the beginning of oral proceedings in the trial of former president Pedro Castillo (2021-2022). Prosecutors are seeking a 34-year prison sentence for Castillo, who was impeached and arrested after illegally dissolving congress, resulting in Boluarte – his vice president – assuming the presidency.

*Colombia’s Environment Minister Susana Muhamad has announced US$92m in funding from the United Nations Green Climate Fund for the Sumapaz-Chingaza-Guerrero conservation corridor, which plays a vital role in supplying fresh water to the capital Bogotá. According to the environment ministry, the funding will enable the restoration of 170,000 hectares of land within the corridor and the conservation of protected areas. This, the environment ministry said, will “ensure the provision of water for Bogotá and the region by protecting essential ecosystems”, benefitting over 10m people in the capital and in 21 neighbouring municipalities. Bogotá has been struggling with falling water levels in the Chingaza water system, forcing the municipal government to impose water rationing measures which have been in force since April.

On 20 November Brazil’s President Luiz Inácio Lula da Silva hosted his Chinese counterpart Xi Jinping in Brasília, where government officials signed 37 bilateral agreements.

Analysis:

In April 2023, Lula led a large Brazilian delegation to China, and throughout 2024 several high-level government officials have visited Beijing, including Vice President Geraldo Alckmin. The meetings with the Chinese delegation yesterday presented a chance to solidify Brazil’s economic ties with its largest trade partner. The recent election victory in the US by former president Donald Trump (2017-2021), with whom Lula is not expected to have good personal rapport, has prompted speculation in the media that Brazil might be drawn further into the arms of China. However, as an indication that Brazil still prioritises maintaining stable relations with Washington, the Lula administration has not become an official signatory of China’s flagship international infrastructure investment programme, the ‘Belt and Road Initiative’ (BRI).

• Media speculation over Brazil’s possible BRI membership intensified during Alckmin’s China trip in June. The vice president neither confirmed nor denied the speculation. If Brazil were to join the initiative, Lula and Xi’s meeting would have been a suitable occasion to announce the decision, but no announcement came yesterday.
• In one of the 37 agreements signed, Brazil “recognised the relevance” of the BRI and declared it was willing to “cooperate with [China] in the promotion of relevant projects”.
• In practice, however, signing up to the BRI would have been a largely symbolic gesture for Brazil, rather than offering a significant boost to its economic cooperation with China. Brazil’s government and largest corporations already have close ties with their partners in China and do not need the BRI to discuss funding for infrastructure projects.
• A testament to the depth of bilateral relations was the wide range of agreements signed yesterday, covering sectors such as agriculture, finance, mining, energy, technology, and environmental protection, among other areas.

Looking Ahead: One of the most controversial agreements from yesterday that could affect Brazil-US relations after Trump takes office in January was a memorandum of understanding with Chinese satellite company SpaceSail. The Chinese firm has been described in the press as a rival to US-based satellite company Starlink, a major satellite internet provider in Brazil which is owned by Elon Musk, a close ally of Trump.

*Brazil’s ministry of ports and airports has registered a monthly record of 10.4m people who travelled by air through Brazilian airports in October, up 7.8% compared with the same month last year. In 2024 so far, a total of 97.5m passengers have taken domestic or international flights in Brazil. In October this year, 8.3m people took domestic flights, up 6.5% year-on-year, while 2.1m passengers took international flights, up 11.0%. The ports and airports ministry also registered 82,700 tonnes (t) of cargo transported by air freight in October, up 18.3% in yearly terms.

*Guatemala’s congress has approved a competition law that seeks to guarantee transparent markets and tackle monopolies and corrupt business practices. The legislation, submitted by President Bernardo Arévalo’s reformist government, establishes an autonomous competition superintendency which will investigate and sanction anticompetitive practices. The economy minister, Gabriela García, stated that “the competition law is a milestone for the nation, as it promotes the development of a more competitive economic environment, generating great opportunities for opening markets, strengthening institutions, attracting foreign investment, and increasing business productivity”.

On 20 November a bill authorising the disappearance of seven autonomous regulatory agencies was passed by Mexico’s lower chamber of congress in a 347-128 vote.

Analysis:

The bill is part of a package of 20 constitutional reforms announced last February by then-president Andrés Manuel López Obrador (2018-2024) and also supported by his successor, President Claudia Sheinbaum. The seven agencies include the anti-trust and competition watchdog Comisión Federal de Competencia Económica (Cofece), telecoms regulator Instituto Federal de Telecomunicaciones (IFT), and data protection office Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales (Inai).

• The governing coalition, led by the left-wing Movimiento Regeneración Nacional (Morena) used its large majority to approve the reform “in general” pending further discussion “in particular” and consideration of the bill in the senate.
• Morena deputies repeated the government line that the functions of the agencies will be transferred to government departments where they will be conducted more efficiently. Morena deputy Katia Alejandra Castillo denied that the transfer was a power grab, arguing that its aim was to “restructure and simplify government, rationalise the use of resources and optimise public administration”. Government officials have said eliminating the agencies will save US$5bn a year and reduce corruption risks.
• Opposition deputy Irais Virginia Reyes of the leftist Movimiento Ciudadano (MC) argued in contrast that the autonomous agencies have been a necessary counterweight to the power of government, protecting transparency, individual rights, and guarantees.
• The government will have to make special arrangements for IFT since its free trade agreement with the US and Canada (known as USMCA) requires each signatory to have a telecoms regulator.

Looking Ahead: A significant risk for the government is that Mexico’s credit rating could be negatively affected. At present Mexico benefits from an investment-grade rating from Fitch, Moody’s, and S&P. But Moody’s recently downgraded the outlook for the country to ‘negative’ from ‘stable’, citing institutional and policy weakening. According to Gabriela Siller, the head of economic analysis at Mexican private bank Banco Base, the elimination of autonomous agencies “implies a further deterioration of Mexico’s institutional framework, which increases the likelihood of credit rating downgrades”.  

*The president of Mexico’s water advisory council Consejo Consultivo del Agua, Raúl Rodríguez, has called for President Claudia Sheinbaum’s government to reconsider its budget proposal for 2025, expressing concern over a decrease in funding for Mexico’s national water commission (Conagua). Rodríguez said that Conagua’s funding had been slashed by approximately 43% in the budget proposal, which was unveiled on 15 November. He described this as a “brutal” reduction which would affect access to drinking water as well as infrastructure development, agriculture, and sewerage.

On 20 November Argentina’s President Javier Milei hosted Italy’s Prime Minister Giorgia Meloni at the Casa Rosada presidential palace.

Analysis:

Both far-right fans of US president-elect Donald Trump, the two leaders share an ideological affinity and are close allies. Meloni was one of the first international politicians to congratulate Milei for winning the Argentine elections in November last year. Meloni, who is on her first official visit to Argentina, arrived having taken part in the recent G20 leaders’ summit in Brazil. As expected, their meeting produced strong pledges of future cooperation.

• The two leaders had previously met in February, when Milei visited Pope Francis in the Vatican, and in June at the G7 summit in the Italian resort of Borgo Egnazia which Meloni was hosting.
• In a joint press conference, Milei railed against what he dubbed the “woke virus” and “gender ideology”, underlining similarities between the two governments, in their defence of “free trade, common sense and private property”.
• Meloni also highlighted alignment on priorities such as “freedom” and foreign policy issues such as Russia’s war in Ukraine (the two are anti-Russia), the Middle East (the two are pro-Israel), and “the Venezuelan crisis”. As regards the latter, neither has recognised Nicolás Maduro as the victor of Venezuela’s 28 July elections, while yesterday Meloni followed the US government in recognising opposition candidate Edmundo González as Venezuela’s president-elect - which the Argentine government did back in August.
• Meloni also revealed the two governments had agreed to work together in three key areas: “political collaboration” on a five-year action plan to identify particular sectors for the two countries to cooperate on. She said the second area was cooperation in the fight against organised crime, with Italy to provide Argentina with technical assistance, while the third area was that of trade and investment. Meloni said 300 Italian companies are currently present in Argentina, employing 16,000 people. She expressed an interest in collaborating in areas such as the energy transition, infrastructure, supply of critical basic materials, air transport, and space.

Looking Ahead: In the joint press conference, Milei also referenced the idea of an alliance of “free nations” – an idea he floated at the Conservative Political Action Conference (CPAC) investor summit which recently took place in the US at the Mar-a-Lago private club and resort owned by Trump. At the summit Milei suggested that the founding members would be Argentina, the US, Italy, and Israel.

*Argentina’s national statistics institute (Indec) has released new figures showing that the country registered a trade surplus of US$888m in October. This is down from the surplus of US$981m in September and marks the second consecutive month in which a monthly decrease was registered, but the latest surplus contrasts with a deficit of US$442m in October 2023.  The total export value in October 2024 came to US$7.02bn, up 30.0% year-on-year, while the import value came to US$6.13bn, up 4.9% in yearly terms. The product category which registered the highest yearly rise in export value in October was manufactured agricultural products, posting a monthly export value of US$2.87bn, up 69.7% from October last year. Argentina’s top export destination in October was Brazil, where exports came to US$1.3bn, up 23.5% in yearly terms. Brazil was also the country from which Argentina imported the most in October, with a monthly import value of US$1.56bn, up 25.9% compared with October 2023.