LatinNews Daily - 21 February 2020

On 20 February, Bolivia’s electoral tribunal (TSE) approved the presidential candidacy of the Movimiento al Socialismo (MAS) nominee Luis Arce, but disqualified former president Evo Morales (2006-2019) from running to become a senator.

Analysis:

Morales’ disqualification was celebrated by opponents of the MAS, who had fought to remove him from power in November 2019, and were concerned that a return to the legislature would provide him with immunity against the numerous charges of terrorism and sedition subsequently issued against him by the interim government. While Morales drew the headlines, the approval of Arce’s presidential candidacy is more politically significant, and while he joined the ranks of MAS officials condemning Morales’ exclusion, his own electoral campaign may ultimately benefit from an opportunity to distance himself from the controversial former president.

• TSE president Salvador Romero confirmed that Morales was disqualified for failing to meet residency requirements, after he claimed refugee status in Argentina in December 2019. Two other senate candidates, MAS former foreign minister Diego Pary (2018-2019) and Creemos nominee Mario Cossío, were blocked on similar grounds. Arce had also escaped Bolivia in November, but apparently evaded disqualification because he did not claim refugee status in Mexico, and so was not formally resident there.
• Romero insisted that the decision was final, but Morales’ lawyers have already discussed issuing an appeal to the Inter-American Commission on Human Rights (IACHR), arguing that the disqualification of electoral candidates on the basis of having claimed political protection is a violation of international refugee law.
• Morales called the decision “a blow to democracy”, accusing the interim government of seeking to undermine the MAS. Arce described the verdict as “a political decision”, and claimed this constituted further evidence “that there are no guarantees for free democratic and fair elections in Bolivia”. He called for MAS supporters to respond by rallying around his presidential campaign.
• A number of Arce’s rivals praised Morales’ exclusion, but were quick to emphasise that their task was not yet complete. Luis Fernando Camacho, who withdrew his candidacy on 18 February in pursuit of a united front behind a single anti-MAS candidate, insisted that “the threat remains”, adding that “we can’t get distracted or lower our arms”. Carlos Mesa, Arce’s closest challenger in a recent poll, called his rival “a proxy for President Morales”.
• The perceived threat of Morales – whose popularity declined after he defied a 2016 referendum that voted against him being allowed to run for a fourth term – is the main electoral weapon available to the opponents of the MAS, a loose grouping united largely by its opposition to him as an individual. With Morales apparently out of the picture, the outcome of the election may well depend on whether they can maintain similar unity against Arce, and convince the population that Morales is still pulling the strings within the MAS.

Looking Ahead: Arce is not yet entirely out of the woods himself, as he still faces allegations of corruption from his time as economy minister (2006-2019), which may yet be used to undermine his electoral campaign.

* Colombia’s state-owned oil company Ecopetrol has announced plans to construct a 50MW solar park which will be owned by its Cenit hydrocarbon transportation and logistics subsidiary. Ecopetrol said the park which will be built across 46 hectares and feature more than 100,000 panels in Castilla La Nueva municipality, Meta department, will be the largest self-consumption power plant developed in the country, more than twice the size of the 21MW Parque Solar Castilla, which was inaugurated in October 2019. It will supply energy over the next 15 years to the San Fernando and Apiay pumping stations as well as oil fields in Castilla, Chichimene and Acacías in the Eastern Plains (Orinoquía region). Construction will begin in the first half of this year on the new park which is expected to begin commercial operations in December. Ecopetrol plans to construct at least five additional solar parks in the departments of Meta, Santander, Huila, and Antioquia over the next two years.

On 20 February, Brazil’s President Jair Bolsonaro signed off on a Garantia da Lei e da Ordem (GLO) decree at the request of Ceará state governor Camilo Santana, allowing for the deployment of the armed forces to reinforce public security in Ceará.

Analysis:

Despite being legally banned from striking, some military police (PM) officers have been revolting in the north-eastern state of Ceará this week, demanding better pay. This is jeopardising the guarantee of public security in the state, as demonstrated on 19 February when a senator was injured by two gunshots fired by protestors outside a PM station, as well as raising questions about the state government’s control over its police force and the possible influence of ‘milícias’, paramilitary groups usually made up of members of the state public security forces, over the PM revolts.   

• The armed forces will join reinforcements from the Força Nacional de Segurança Pública (FNSP) national guard and the federal road police, previously authorised by federal Justice & Public Security Minister Sérgio Moro in reaction to the shooting of Senator Cid Gomes (currently on congressional leave).
• Santana, who belongs to the left-wing opposition Partido dos Trabalhadores (PT), thanked President Bolsonaro for the federal government’s support yesterday after his request for reinforcements through a GLO decree was met. The armed forces are due to reinforce public security in Ceará until 28 February.
• Mutiny from some members of the Ceará PM continues after representatives rejected an attempt to reach an agreement during a meeting with a committee of senators yesterday. Protesting PM officers reportedly have the backing of some local politicians.
• Supreme court (STF) justices Alexandre de Moraes and Ricardo Lewandowski have condemned the PM’s actions in Ceará as illegal and unconstitutional. Brazil’s constitution bans members of the armed forces from unionising and striking, a rule which extends to the PM and firefighting forces.

Looking Ahead: Although these police protests have been most disruptive in Ceará, there have been some in other states also with demands for salary increases being voiced by a number of PM forces (which all fall under the responsibility of state, not federal, governments). The concern now is that these demands might evolve into revolts and unrest in other states across the country.

* The US dollar has reached a new high against the Brazilian real, closing the day at R$3.39/US$1 after having pushed R$3.40/US$1 during trading yesterday (20 February). This is the US dollar’s third consecutive record high against the real, with the Brazilian currency having depreciated 9% against the US dollar since the start of the year. This is largely due to the international scenario, notably the effects on the economy of the coronavirus (Covid-19) outbreak in China, although domestic factors such as continued uncertainty over Brazil’s economic outlook and a historically low benchmark interest rate (the Selic, currently set at 4.25%) are believed to be contributing factors. The rapid depreciation of the real led the Brazilian central bank (BCB) to intervene last week, selling currency swap contracts, a move which contained the fall of the real for a short time only.

On 20 February Nicaragua’s national police (PNN) issued a statement denying that an armed attack took place four days earlier against the Mískitu indigenous community carried out by settlers from other regions of Nicaragua known as ‘colonos’, who invade indigenous land for illegal logging and cattle-raising.

Analysis:

The PNN’s announcement comes despite the United Nations Office of the High Commissioner for Human Rights (OHCHR) and Inter-American Commission on Human Rights (IACHR) denouncing that a 14-year-old girl had been shot in the face in the indigenous Wangky Twi Tasba Raya territory, Waspam municipality, in Nicaragua's North Atlantic Autonomous Region (Raan). This followed a deadly attack which took place less than a month earlier in the Raan, also attributed to colonos. The PNN’s response is likely to attract further international concerns and comes as it has already faced major criticism for its role in the deadly crackdown which the government led by President Daniel Ortega has been carrying out on its political opponents since April 2018.

• In a statement the PNN said that following an investigation, it concluded that there was no attack by colonos and the girl’s injury was sustained as a result of an accident.
• The government has already faced international condemnation from both the OHCHR and IACHR for the previous attack by colonos which took place on 29 January on the indigenous Mayagna community in the Bosawás biosphere reserve, which left six dead and ten missing. On 7 February an OHCHR spokesperson issued a statement expressing concern at the “repeated attacks against indigenous people in Nicaragua, the failure to protect their rights and impunity of crimes committed against them”.
• Noting that “most of the attacks have been perpetrated by colonos”, the OHCHR cites figures from a local human rights NGO Centro por la Justicia y los Derechos Humanos de la Costa Atlántica de Nicaragua (Cejudhcan) which show that since 2015, some 40 indigenous people have been murdered, 47 injured, 44 kidnapped and four remain missing in cases related to the invasion of land. 

Looking Ahead: Also indicative of ongoing general political violence, yesterday the opposition Ciudadanos por la Libertad (CXL) grouping announced that one of its members, José Benito López Méndez, had been shot dead in the Raan and is calling on the police to investigate.

* Following a visit to Panama, the International Monetary Fund (IMF) has said that after a temporary slowdown in 2018-2019, Panama’s economy is “poised for a rebound in 2020 and will remain among the most dynamic in Latin America”. According to an IMF statement, real GDP grew by about 3% in the first three quarters of 2019 (year-on-year) amid easing in the construction and service sectors, following a slowdown in 2018 driven by a construction strike. However, it notes signs that the “economy began to recover in the last quarter as a new copper mine launched full-scale commercial production”, with 2019 growth estimated at 3.5% year-on-year. The IMF projects output growth to rebound to 4.8% in 2020, supported by full-scale copper production and robust private investment. Over the medium term, growth is expected to stabilise at its potential annual rate of 5%.

On 20 February the Mexican government revealed that it had extradited Rubén ‘El Menchito’ Oseguera González, a suspected member of the Cártel Jalisco Nueva Generación (CJNG) drug trafficking organisation (DTO), to the US.

Analysis:

The extradition follows a recent trend by which Mexico has been more amenable to extraditing Mexican nationals to the US to face drug trafficking charges. This trend was started under the previous Partido Revolucionario Institucional (PRI) government led by Enrique Peña Nieto (2012-2018). Oseguera González’s extradition suggests that cooperation between the Mexican and US governments over combating drug trafficking remains strong despite the change in government in Mexico which saw President Andrés Manuel López Obrador of the leftist Movimiento Regeneración Nacional (Morena) party come to power in 2018.

• Oseguera González, who was born in the US and has dual nationality, is the son of Nemesio ‘El Mencho’ Oseguera Cervantes, the main CJNG leader who is also wanted in the US but remains at large. He was arrested in Mexico in 2015, accused of being the leader of the CJNG in Jalisco state, responsible for smuggling drugs into the US. The US government submitted an extradition request in 2017 so that he could be tried at the District of Columbia federal court over charges of conspiring to traffic cocaine and methamphetamines into the US.
• The extradition took place despite complaints by Oseguera González’s legal team that the process was plagued by irregularities. They accused the Mexican government of pressuring the courts to approve the extradition and reject their appeals against it, in what they described as a “judicial terrorism”. They even filed a complaint before the Inter-American Commission on Human Rights (IAHCR) on the grounds that due process had not been followed, undermining Oseguera González’s rights.  
• In an official statement the López Obrador government confirmed yesterday that the supreme court (SCJN) had approved Oseguera González’s extradition. The statement added that Oseguera González has now been delivered to US law enforcement.

Looking Ahead: The US and the Mexican authorities will be hoping that Oseguera González’s trial will help to identify other key CJNG figures and lead to the capture of Oseguera Cervantes.

* Mexico’s President Andrés Manuel López Obrador and representatives from US multinational technology company Microsoft have announced that Microsoft will invest US$1bn in Mexico over the next five years, with the aim of expanding the development of digital technology in the country and improving access to it.

On 20 February the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, warned that the timeline for renegotiating Argentina’s external debt is tight.

Analysis:

Georgieva’s comments follow the release of a statement by the IMF technical mission upon the conclusion of its week-long visit to Argentina in which it urged bondholders to accept a substantial haircut in forthcoming debt-restructuring talks with the government led by President Alberto Fernández.

• Speaking during a press conference in Rabat, Morocco, Georgieva accepted the Argentine government’s line that the country’s debt is “unsustainable”. But she went on to argue that securing a debt write-off from bondholders would depend upon the Fernández administration’s attitude.
• This is a key point. Having the IMF onside is a boon for the Fernández administration, but if it feels encouraged to play hardball as a result, it could alienate rather than persuade investment funds holding bonds to accept a debt write-down, let alone a debt write-off. The failed recent brinkmanship of the provincial government of Buenos Aires in an endeavour to force its creditors just to defer payment on a US$250m bond shows that bondholders will be no pushover.
• Fernández said that the IMF’s decision to grant its imprimatur to a proposed debt restructuring with external creditors demonstrated that his government was not bluffing and that it really cannot pay its debts within the established timeframe.
• The economy minister, Martín Guzmán, will meet Georgieva in Riyadh, Saudi Arabia, on the sidelines of the G-20 summit of finance ministers on 22 February when they might delve into more details of the approach the government intends to pursue with bondholders. At present there is still a lack of clarity on this issue, as well as the government’s plans to boost economic growth rather than weigh the economy down with austerity measures.

Looking Ahead: It is far from clear that even an IMF-backed Argentine government will be able to convince bondholders to make a “meaningful contribution” to ease the country’s “unsustainable” debt burden. Many bondholders view an extension of maturities as a sufficiently generous concession.

*Chilean salmon producer, Camanchaca, has called for the Chilean authorities to intervene to help lift the ban on Chilean salmon imports imposed by the Russian government. The Russian authorities temporarily suspended imports from some Chilean producers after a shipment of salmon was found to contain oxytetracycline, an antibiotic used to prevent diseases in farmed fish which can have harmful effects in people. Camanchaca had not been initially affected by the ban but its CEO, Ricardo García, has said that a shipment from the firm was detained at the Russian border last week and the firm has had to suspend all exports to Russia. García says that Camanchaca has not used oxytetracycline in its aqua farms for years and has questioned the actions by the Russian authorities. “This is becoming a diplomatic issue” García said, asking for the Chilean government to intervene. According to the latest industry figures Chile, the world’s second largest salmon producer, exported US$323m worth of salmon to Russia in 2018.