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Weekly Report - 18 June 2020 (WR-20-24)

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LEADER

The old adage that a day in politics is a long time was borne out in Chile on 14 June. President Sebastián Piñera delivered a national broadcast celebrating the signing of an accord with the bulk of the political opposition, sealing support for a US$12bn fund to combat the coronavirus (Covid-19) pandemic and attenuate its impact on the economy. Less than 24 hours earlier, Piñera had been rocked by the departure of his health minister, whose position became untenable after a major disparity in reported fatalities from Covid-19 emerged. The pressure on Piñera remains unrelenting, however, as Chile’s infection rate per capita soars higher than in any country other than Qatar, compelling him to extend the country’s state of exception for a further 90 days to try and flatten the curve of the pandemic, compounding its economic difficulties.

President Piñera was unstinting in his praise of all those involved in securing support for the political accord after two weeks of intense discussions. He said that a “constructive spirit” had prevailed among not just legislators from rival political parties but also economists, social organisations, trade unions, school teachers, and universities, who had contributed to the debate. The ruling Chile Vamos opposition signed the 14-page accord with the three largest leftist opposition parties: Partido Socialista (PS), Partido por la Democracia (PPD), and Democracia Cristiana (DC). The more radical left-wing Revolución Democrática (RD) took part in the discussions but did not subscribe to the pact. The opposition, which also signed an accord with the Piñera administration in November last year in the midst of serious social protests, said that whether this ‘spirit’ endures in the coming months would depend upon what initiatives are sent to congress.

During his broadcast, Piñera outlined details of the US$12bn emergency fund, which he said would help to “protect family incomes, and recover jobs and economic activity through an efficient and responsible use of public resources”. The big bone of contention for the opposition was the Ingreso Familiar de Emergencia (IFE), an emergency basic income payment to vulnerable households unable to work because of lockdown restrictions. The government agreed to increase this from Ch$65,000 (US$81) to Ch$100,000 per person for a family of four, and broaden its coverage to 2.1m (80%) of Chile’s most vulnerable population for three months. PS deputy Isabel Allende was quick to highlight the increase in the IFE, which she said was essential as the government had failed to appreciate “the magnitude of the health and social crisis”.

The ‘Fondo Covid’ will also seek to boost economic growth through investment, subsidies for job creation, and the provision of credit for firms to resume normal activities, as well as assigning US$500m for health services and US$120m of funding for municipal authorities to improve the local response to the coronavirus pandemic, support for civil society organisations, and unemployment protection for parents and those who care for young children. The ‘Fondo Covid’, which will confer significant discretionary spending powers on the Piñera administration, will be financed by budget reallocations, debt issuance, and sovereign funds. It comes on top of other stimulus plans, such as tax breaks for small and medium sized enterprises (SMEs), amounting to some 5% of GDP. Fiscal sustainability will be preserved, however, with public debt stabilising around 45% of GDP.

Health minister forced out

The accord was a welcome fillip for Piñera as it served to divert attention from the resignation of his health minister, Jaime Mañalich, a day earlier. Mañalich departed under a cloud. Already under fire for his response to Covid-19, he resigned just hours after the Centro de Investigación e Información Periodística (Ciper), a nonprofit foundation dedicated to investigative journalism and the pursuit of transparency, revealed that there was a significant disparity between the fatalities reported by the health ministry to the World Health Organization (WHO) and the official figures reported in Chile.

  • Mañalich

The government was compelled to jettison Jaime Mañalich’s ‘strategic and selective quarantines’, which varied in intensity from municipality to municipality, and place the whole of metropolitan Santiago (8m people or some 42% of the national population) under full lockdown in mid-May after Covid-19 cases surged. It also backed away from his “immunity passports” proposal, after the WHO published a ‘scientific brief’ cautioning that there is as yet “no evidence” to suggest that recovered Covid-19 patients are protected against re-infection. Mañalich himself acknowledged that a ‘Carné COVID-19’ could have fuelled discrimination, giving a minority of people privileges when being hired, re-hired or simply entering public buildings.

Up until 13 June, Ciper reported, the health ministry had confirmed 3,101 deaths from Covid-19 but informed the WHO of more than 5,000 fatalities from the virus. The health ministry denied that it was seeking to conceal the true scale of the crisis, contending that the figures supplied to the WHO included deaths suspected, but not confirmed, as having been caused by coronavirus. But opposition parties insisted that Mañalich must go. While Mañalich said he was resigning out of “Republican duty” as “the next stage of the fight against coronavirus requires a new leadership”, the timing of his departure suggested he was given a helping hand, however reluctantly, by Piñera, a personal friend whom he served as health minister during his first administration (2010-2014).

Enrique Paris, a former head of the Colegio Médico (2011-2017), picked up the vacant health portfolio. Piñera left no doubt about the daunting scale of the task facing Paris, saying he would have the dual challenge of combating Covid-19 and overhauling the public and private health system. On the day Mañalich resigned, Covid-19 fatalities in Chile reached a record high of 231, bringing the national total to 3,101, with a further 6,509 new cases.

Accusing the government of a catalogue of ineptitude, the PPD president, Heraldo Muñoz, said Paris would need to “make up for lost time”, while the DC president, Fuad Chahín, and his PS peer, Álvaro Elizalde, said “a change of strategy” was essential. They urged Paris to listen more to the scientific community and make information more transparent. He obliged them by announcing that both mortality figures would be released from now in the interests of transparency.

On 15 June Piñera extended the state of exception, decreed on 18 March, for a further 90 days with a view to flattening the curve of the pandemic. Paris, meanwhile, said that if Chileans failed to respect the quarantines in place, the measures would have to be toughened. This would immediately test the effectiveness of the Fondo Covid. It is far from clear that it will suffice to support the many poor families reliant upon leaving their homes to earn a living.

How far the Fondo Covid can revive economic growth is also a moot point. The central bank is predicting that GDP will contract by 5.5%-7.5% in 2020, which would mark the worst recession since 1982. The Economic Commission for Latin America and the Caribbean (Eclac), meanwhile, calculates that poverty could increase from 9.8% to 13.7% this year, which could see social protests against the Piñera administration resume with renewed vigour in the near future.

ANDEAN COUNTRIES

There are various parallels between recent developments in Bolivia and Ecuador. Social protests erupted in both countries, albeit with different motivations, in October last year. Ecuador was hit earlier and much harder by the coronavirus (Covid-19) pandemic, but even with a much lower caseload, there are signs Bolivia’s health services are struggling to cope, with images of dead bodies on the streets in Santa Cruz (and other cities) evoking the grim scenes in Ecuador’s own business capital Guayaquil in March. But the state of exception imposed in both countries to respond to the pandemic has been far more contentious in Bolivia. While Bolivia’s opposition-controlled legislature approved a bill on 16 June regulating the application of a state of exception on the grounds that it is being abused by the interim government led by Jeanine Áñez, indigenous and trade union movements that spearheaded Ecuador’s protests accepted President Lenín Moreno’s extension of a state of exception in the country a day earlier without demur.

Over the course of the last week Bolivia’s senate and lower chamber of congress, in both of which the left-wing Movimiento al Socialismo (MAS) of former president Evo Morales (2006-2019) enjoys a majority, approved a bill regulating the imposition of a state of exception. The MAS argued that it had been misused by the Áñez government to repress dissent. The bill stipulates that the executive can issue a supreme decree declaring a state of exception in response to internal commotion, a natural disaster (including epidemics such as Covid-19), and external threats, but not to social mobilisations. The legislature would have the power to approve, by means of an absolute majority, binding modifications to the supreme decree, which would be suspended if the executive refused. The MAS president of the lower chamber, Sergio Choque, said “no government can freely use the police and armed forces for as long as it wants”.

The bill would also make the security forces and, pointedly, public servants “responsible…for the orders they pronounce, and actions they take in executing a state of exception”, spelling out possible sanctions. The MAS contended that the regulations are needed to stop misuse of a state of exception by the government and abuses by the armed forces and the police. The bill requires promulgation by Áñez. She is highly unlikely to oblige, leading to fresh tensions with the legislature. The justice minister, Álvaro Coimbra, accused the MAS of attempting to “destabilise” the government; the interior minister, Arturo Murillo, of leaving Bolivia “defenceless”. Pro-Áñez deputy Gonzalo Barrientos argued that it could lead to “confrontation, [social] convulsion, and severely punish the police and armed forces while protecting conspirators”.

Ecuador

Given the severity of the social protests in Ecuador last October, objections might have been expected to President Moreno’s executive decree on 16 June extending the state of exception introduced on 16 March for a further 60 days. But these did not transpire. That is not to say social discontent has dissolved. The trade union movement Frente Unitario de Trabajadores (FUT) has staged small protests in recent weeks directed at the recently approved ‘humanitarian support law’, which would, inter alia, permit firms impacted by Covid-19 to renegotiate the contracts of their employees. And the umbrella indigenous organisation Confederación de Nacionalidades Indígenas (Conaie) has threatened to revive protests. But Conaie remains concerned about the threat of Covid-19 spreading in highland provinces where healthcare services are threadbare compared with those in urban areas which have still been found wanting.

Elections

Bolivia’s interim president, Jeanine Áñez, is holding off on promulgating a bill enshrining 6 September as the date for general elections, calling on the legislature on 12 June to provide a medical and scientific report confirming that it is safe to hold them and not a threat to public health. On 16 June Áñez said elections might need to be delayed by a further “one or two months” because of Covid-19. This incensed the president of Bolivia’s senate, Eva Copa, who called on Áñez to fulfil her “sole purpose”: to call elections. The president of the supreme electoral tribunal (TSE), Salvador Romero, also stressed that “elections are crucial for Bolivia’s democratic future” and contended that the health crisis could be managed without postponing them further.

Venezuela’s supreme court (TSJ) took it upon itself to appoint new rectors to the national electoral council (CNE) on 12 June. The country’s principal opposition parties, led by Juan Guaidó, condemned the move as “an electoral farce staged by the dictatorship for its own convenience”. It is in the gift of the legislature to appoint CNE rectors, but the TSJ took matters into its own hands on the grounds that the national assembly was guilty of ‘constitutional omission’, for failing to fulfil its legislative duty and make the appointments. Guaidó called for more international pressure to be brought to bear on the de facto government led by Nicolás Maduro, without suggesting what measures could be taken or definitively confirming whether the opposition would compete in legislative elections scheduled for later this year.

The TSJ gave the national assembly a 72-hour ultimatum on 11 June in which to present a list of candidates for the new CNE. This was ostensibly in response to a petition by various representatives of small opposition parties cooperating with the Maduro government. A week earlier, they had appealed to the constitutional chamber of the TSJ to declare this ‘constitutional omission’, arguing that the national assembly had neglected its duties by failing to designate the new rectors. In the event, the TSJ acted within 24 hours of its stated deadline. The TSJ president, Maikel Moreno, announced the five new members of the CNE, with Indira Alfonzo replacing Tibisay Lucena as president of the body. He offered no explanation for the criteria applied in the selection process.

The new CNE rectors were formally sworn-in on 15 June, with their first session shown on state television. Alfonzo, who had been serving as first vice president of the TSJ and president of the TSJ’s electoral chamber, was sanctioned by the Canadian government in May 2018, along with 13 other senior Venezuelan officials, over the “illegitimate and anti-democratic presidential elections”. Two of the other rectors have been sanctioned by the US government, while the remaining two are affiliated with the opposition. This will leave the Maduro government with an effective majority on the CNE.

The four main opposition parties - Acción Democrática (AD), Voluntad Popular (VP), Primero Justicia (PJ), and Un Nuevo Tiempo (UNT) - were joined by a further seven smaller opposition parties, including Vente Venezuela, in signing a document on 14 June accusing the TSJ, not for the first time, of “usurping the functions of the legitimate national assembly” by deciding, sua sponte, to declare a constitutional omission.

Guaidó said that a revamped CNE was “just one of the conditions for fair elections” in Venezuela, along with the release of political prisoners, and the presence of international observers. He said it was “time to remobilise” and for “more forceful international action” to be taken. Questioned about what this should constitute, however, Guaidó pointedly avoided mentioning any concrete measures.

Refusing to recognise the new CNE is all well and good but the body has been created and it has started functioning. Its composition provides further evidence that the opposition would not be competing on a level playing field but if it responds by boycotting the legislative elections it will become increasingly irrelevant. The opposition would cease to control the national assembly, albeit an institution emasculated by an anti-democratic alliance between the Maduro government and the TSJ, a pliant appendage of the executive, and be forced to fight on the sidelines, denuded of any power and without a stage on which to play.

US reaction

US Secretary of State Mike Pompeo threw his weight behind Venezuela’s political opposition on 15 June by rejecting the legitimacy of the new CNE. In a statement, Pompeo said that the “regime has selected a [CNE] that will rubber-stamp its decisions and ignore the conditions required for free elections”. He argued that the Maduro government had “continued to manipulate the Venezuelan constitution”, and that the TSJ’s appointment of the CNE rectors “takes Venezuela even further away from a democratic transition”.

BRAZIL & SOUTHERN CONE

Brazil’s supreme court (STF) stands on the Praça dos Três Poderes in Brasília, opposite the Planalto palace, the seat of the federal government. The congressional building, which houses the senate and the chamber of deputies, stands to the west, completing a triangle designed to represent the independence and harmony between Brazil’s legislative, executive, and judicial branches of government. This harmony is currently being severely tested, not least because of escalating attacks against the STF from radical right-wingers who support President Jair Bolsonaro. 

On the evening of 13 June, around 30 supporters of President Bolsonaro set off fireworks outside the STF building, mimicking blowing it up. The night before, a small group had tried to enter congress. The previous weekend, ‘bolsonaristas’ had marched to the STF carrying torches.

Calls for the return of dictatorship-era laws and for the closure of the STF and congress are common demands in the bolsonarista rallies which have been taking place every weekend in Brasília since the start of the coronavirus (Covid-19) pandemic. Bolsonaro has frequently put in an appearance at these demonstrations, as have several of his cabinet ministers.  

Bolsonaristas’ anger at Brazil’s democratic institutions, although not new [WR-19-20], has been fuelled by the perception that these institutions are working against the president – particularly the STF, which has handed out rulings curtailing Bolsonaro’s denialist response to the coronavirus and authorising police investigations into his allies, as well as into the president himself. With simmering institutional tensions and underlying concerns about the state of democracy in the country, the recent escalation of the bolsonaristas’ anti-democratic attacks appears to have prompted a decisive response from those targeted by these attacks.

At a local level, Ibaneis Rocha, the governor of the Federal District against whom bolsonaristas have also railed, has temporarily closed off access to the Praça dos Três Poderes and the Esplanada dos Ministérios leading up to it. On 13 June, prior to the fireworks incident, Rocha’s government had ordered the dismantling of an encampment of armed bolsonaristas from a far-right group dubbed ‘300 do Brasil’, who had been occupying areas of the Esplanada for a month.

Meanwhile, the federal police (PF) has carried out a number of operations against individuals suspected of financing, promoting, or taking part in anti-democratic acts. These police operations are part of an investigation into the organisation of rallies promoting attacks on democracy, launched by the federal public prosecutor’s office (PGR) in April and involving the STF as some of the suspects concerned are elected officials (the government has always maintained that the regular pro-Bolsonaro rallies are spontaneous).

On 15 June Sara Giromini, a right-wing activist and member of ‘300 do Brasil’ who goes by the online name of ‘Sara Winter’, was detained, one of six arrest warrants that were issued on that day. On 17 June, the public prosecutors’ office (MPF) charged Giromini with the crimes of issuing threats and calumny against STF justice Alexandre de Moraes.

  • ‘Sara Winter’

Right-wing activist Sara Giromini, or ‘Sara Winter’, had publicly threatened STF justice Alexandre de Moraes after he authorised a police raid on her house last month. This was part of a separate STF-ordered investigation into the use of fake news to threaten the supreme court’s magistrates.

As part of the PGR-ordered investigation into anti-democratic acts, police carried out over 20 search and seizure warrants on 16 June at the addresses of Bolsonaro supporters. The individuals targeted include people linked to the political party that Bolsonaro has been trying to set up: Aliança pelo Brasil.

According to the PGR, one line of investigation is that those concerned by the raids have acted with public officials to finance activities that could qualify as crimes under the national security law, which defines crimes against the political and social order. Moraes has separately ordered that investigators be given access to the bank accounts of 11 bolsonarista lawmakers.

Escalating war of words

The fireworks outside the STF prompted an outcry and outpouring of support for the court’s magistrates, notably from former presidents. Bolsonaro was not so reactive, but for the first time in weeks, he did not attend the rally of supporters the following day, and later distanced himself from the controversial attendance of his Education Minister Abraham Weintraub.

However, the police operations against his allies did prompt a reaction, albeit not a direct attack on the court. “I cannot watch in silence while rights are violated and ideas are persecuted. I will therefore take all possible legal measures to protect the constitution and the freedom of Brazilians,” Bolsonaro wrote on Twitter on 16 June, concluding a thread in which he defended his government’s commitment to democracy and argued that attempts to suppress the expression of conservative opinions was authoritarian. The following day he criticised “abuses” and “political judgments” against him, while reassuring supporters that all will be resolved shortly.   

This language pre-empts an escalation in verbal sparring between the executive and the judiciary on legal interpretations of the constitution, a debate which has already arisen on the role of the armed forces. For the government, this is possibly a welcome distraction from scrutiny into its response to the coronavirus pandemic, and the various investigations currently closing in on the president’s allies.

Article 142

Following several implied threats of military intervention by members of government, STF Justice Luiz Fux emitted a preliminary injunction on 12 June regarding the interpretation of the armed forces’ role as outlined in article 142 of Brazil’s 1988 constitution. Fux said that the armed forces are a part of the state, not the government, and ruled that the military cannot be used as a moderating force between the different branches of government. President Bolsonaro had previously suggested invoking article 142 to “re-establish order in Brazil”. In comments to weekly magazine Veja on 12 June, the secretary of government, Luiz Eduardo Ramos, an army general, said it was “outrageous” to suggest Bolsonaro is mounting a coup, but seemed to warn his opponents “not to push it”. 

Several state governors in Brazil face suspicions of corruption in their response to the coronavirus (Covid-19) pandemic. This adds yet another element of mistrust to the overall chaotic management of the pandemic in Brazil, which has been marked by conflicting information from the state and federal authorities, political bickering, and, most recently, misgivings that the federal government sought to manipulate Covid-19 data [WR-20-23].

Corruption investigations carried out by the federal police (PF) under the order of the federal public prosecutors’ office (MPF) have notably targeted Wilson Witzel, the governor of Rio de Janeiro state, and Helder Barbalho, the governor of the northern state of Pará. Police carried out raids on properties linked to Witzel in late May as part of ‘Operation Placebo’, the extension of a state-level investigation into suspicions of fraud in the contracting of services for newly built field hospitals. The investigation also implicates now former members of Witzel’s government and his wife, Helena Witzel, whose law firm signed a contract with one of the companies through which funds are suspected of having been embezzled.

Last week, on 10 June, Barbalho was a target in ‘Operation Para Bellum’, which is investigating fraud in the procurement of ventilators. The MPF believes that Barbalho was aware of the details of the Pará state government’s purchase of 400 faulty ventilators at an inflated price and through an expedited contract that was awarded without a bidding process. Barbalho has denied the accusations as well as claims that he enjoys close links with businessmen involved in the procurement process.   

In Rio, the allegations against Witzel have prompted impeachment proceedings. This was formalised on 15 June, after a symbolic vote by Rio state’s legislative assembly (Alerj) on 10 June resulted in unanimous support for the launch of impeachment proceedings. Alerj president André Ceciliano pointed out that Witzel already faced 14 impeachment requests – the one now being taking forward is based on suspicions that he is implicated in the embezzlement of public funds destined to fight the coronavirus health emergency (Witzel denies this).

Alerj deputies have this week picked members to form a special committee which will analyse the impeachment request and determine whether to accept it, after Witzel has been given an opportunity to defend himself. If the impeachment request were deemed admissible by the committee, a simple majority vote in the Alerj would then suffice to relieve Witzel of his duties.

Witzel could therefore still survive the threat of impeachment, but he finds himself politically weakened, and not only due to the corruption allegations. He won election in 2018 by aligning himself with President Jair Bolsonaro, but his relationship with Bolsonaro soured in late 2019 and he has lost the following of those still loyal to the head of state.

The discrediting of Witzel’s Covid-19 response also serves to reinforce Bolsonaro’s criticisms of state governors. Bolsonaro accuses them of being responsible for the economic crisis and accompanying unemployment after they took the decision to impose isolation measures (now being lifted) in a bid to contain the virus.

Furthermore, Barbalho’s and Witzel’s governments are not the only ones to face suspicions of wrongdoing. State or federal police and prosecutors have been investigating a range of suspected wrongdoing in at least seven states, from the mismanagement of public resources destined to the pandemic to the illegal awarding of contracts. In early May, the governor of Amazonas, Wilson Lima, survived the threat of impeachment over general mismanagement of the pandemic and the procurement of overpriced ventilators, at a time when Amazonas state’s public health system was collapsing. 

Roraima

Antônio Denarium, the governor of the northern state of Roraima, has become the latest governor to face the threat of impeachment due to the pandemic. On 17 June, federal deputy Antônio Nicoletti, a former ally of Denarium’s, filed a request for impeachment with the Roraima legislative assembly (ALE-RR), citing the governor’s failed response to the pandemic, his mismanagement of the emergency resources sent by the federal government, and holding him responsible for the collapse of Roraima’s public health system. Denarium had already faced an ultimately unsuccessful impeachment request earlier in May, following signs of irregularities and fraud in the procurement of medical equipment, including ventilators. Roraima has the second highest rate of Covid-19 infections per 100,000 inhabitants in Brazil, after Amazonas.

The Argentine government has extended, for the fourth time, the deadline for the holders of US$66bn of sovereign debt issued under international law to accept its debt restructuring offer. But this might not be the last extension. With the new 19 June deadline looming, there is still no sign that a deal will be struck before then. However, President Alberto Fernández insists that his government wants to reach a deal with bondholders, take the country out of default, and resolve its debt problems once and for all. This suggests that while the Fernández administration may be driving a hard bargain it will ultimately cede to bondholder demands and secure a deal for the sake of the national economy. 

The latest deadline extension was announced by Argentina’s economy minister, Martín Guzmán, hours ahead of the expiry of the previous deadline on 12 June. In a statement, Guzmán explained that the new extension would be used to analyse the latest proposals by bondholder groups of what improvements could be made to the government’s offer in order to make it more palatable.

According to Guzmán, the government is now seeking to “maximise the support of investors” for its offer. To secure a binding deal, the government needs at least 75% of all bondholders to subscribe to it. The negotiations are confidential, but it is being reported that the government is still far from reaching this threshold and that is why it has adopted a flexible stance that contrasts with its initial hard-line strategy.

President Fernández himself confirmed that the government was working on yet another improved offer that “moves a little closer to the creditors”. The economy ministry announced that this new improved offer was presented to bondholders on 17 June. Given that two days does not provide much time for this to be evaluated, the speculation is that the government will have to extend the deadline beyond 19 June to give sufficient scope to bondholders to weigh up the improved offer.

According to local media reports, a new 10-day extension is likely. However, there are no guarantees that the new improved offer will be accepted by a majority of bondholders, with some reportedly losing patience with the government and its negotiating strategy. Bondholders complain that while they have made it clear that the aggressive negotiating style adopted by Argentina does not impress them, the government and Guzmán, in particular, continue to adopt an aggressive stance.

Yet despite all of this there are still hopes that a deal can be struck. The difference between the government’s offer and the bondholders’ demands is not deemed to be insurmountable. And it is evident that the Fernández administration needs to resolve the debt situation to stabilise Argentina’s domestic economy and start plotting the path back to recovery.

Argentina is still reeling from the foreign currency crisis of 2018-2019, exacerbated by the subsequent economic crisis caused by the coronavirus (Covid-19) pandemic this year. The country is set for a third straight year of recession in 2020, with most forecasts pointing to a 6%-7% GDP contraction. Not resolving the debt problem will only make it harder for the country to recover; and the longer it takes to resolve the deeper the damage to Argentina’s economy and its people.

There are growing calls in Argentina for the government to close a deal with bondholders sooner rather than later so as to allow the country to start setting the foundations for an economic recovery. It is worth recalling that resolving the debt dispute with foreign bondholders is only one component of Argentina’s debt problems. The Fernández administration also needs to renegotiate its debt with the International Monetary Fund (IMF). Meanwhile, some provinces, such as Buenos Aires, Río Negro, Mendoza, Santa Fe, and Chubut, have also missed debt repayments and are facing default unless they can restructure their debts. It is unlikely that this will be possible, however, unless the national debt issue is resolved first.

Fernández calls for patience

During a television interview on 18 June, President Fernández was questioned as to why his government had not yet closed a deal with bondholders even though he had said that resolving the debt problem would be his administration’s immediate priority and that he hoped this would be done by March. Fernández said that the government was putting all its efforts into the negotiations and was keen to reach a deal as soon as possible but that this needed to be a fair deal. He also called for patience, noting that it took Argentina a whole year to conclude the 2005 debt renegotiations. “I don’t understand why there is such a hurry now,” Fernández, who was part of the government that conducted those negotiations, said.

Vicentín

The executive director of Vicentín, Sergio Nardelli, met President Fernández and part of his cabinet in the official presidential residence Quinta de Olivos, along with the governor of Santa Fe, Omar Perotti, on 11 June in order to discuss the future of the agro-export firm, which was founded in 1929. Perotti said Fernández had not yet sent the bill to congress to expropriate the company and was open to “alternatives”. On 12 June Vicentín representatives also held a meeting with senor officials at the state-run oil firm Yacimientos Petrolíferos Fiscales (YPF) to discuss alternatives to expropriation. But alternatives now appear to be off the table. Vicentín’s assets will be placed in a trust managed by YPF’s agriculture arm, which will then absorb it entirely.

Vicentín expropriation stirs up controversy

A large convoy of vehicles took part in protests in Argentina’s northern province of Santa Fe on 16 June against the decision by the federal government to assume control of the local agro-export firm Vicentín [WR-20-23]. There have also been street protests and pots-and-pans protests (cacerolazos) in the province in recent days.

President Alberto Fernández, who announced the move on 8 June, defended the decision to “rescue” the company in a radio interview on 14 June, to prevent it “falling into foreign ownership” like four of the other seven major agro-export firms in Argentina, while the production minister, Matías Kulfas, described it as “a virtuous intervention” to save jobs.

“The only alternative left to us is expropriation,” Fernández said. But Vicentín shareholders published an open letter in various local newspapers accusing Fernández of not having considered alternatives at all. The opposition Juntos por el Cambio coalition, meanwhile, denounced the move as “dangerous, illegal, and unconstitutional”, raising the old argument of whether it is Fernández or his vice president Cristina Fernández calling the shots.

Vicentín has debts of US$1.35bn, and the opposition argued that the expropriation would place a heavy burden on the state. This also sends a mixed message to creditors, after the Fernández administration defaulted on its debts last month, arguing that it had no cash with which to honour them

BRAZIL | Pandemic reshapes labour market. On 16 June, Brazil’s national statistics institute (Ibge) published the first coronavirus (Covid-19) edition of its monthly survey of Brazilian households (PNAD Contínua). The PNAD Covid-19, based on phone interviews and undertaken with the support of the federal health ministry, seeks to identify the pandemic’s impact on the labour market as well as quantify the number of people in Brazil who have suffered from flu-like symptoms over the month of May – during which a number of states began to ease isolation measures, despite surging infections.

The Ibge found that, in the last week of May, 10.9m people were unemployed – up from 9.8m in the first week of May, or a 10.8% increase in the number of unemployed. This change is likely due to an expansion of the available workforce rather than a lower number of available jobs, as the employed population remained largely stable throughout the month of May, totalling 84.4m in the final week.

As of the end of May, 13.2% of the employed population (8.8m people) was working remotely, a figure largely unchanged from the beginning of the month. The number of furloughed workers had fallen from 16.6m in the first week of May (19.8% of the employed population) to 14.6m (17.2%). Meanwhile, 17.7m people, categorised as outside of the workforce, said they were not looking for employment because of the pandemic and lack of available opportunities. 

Also on 16 June, the federal senate approved a presidential decree which establishes measures to guarantee employment, notably by allowing employers to suspend contracts or reduce working hours (and salaries accordingly), with the government topping up lost income. The version of the decree approved by congress allows for these measures to be extended until the end of the year.

On 17 June, the federal chamber of deputies voted on a separate presidential decree aimed at easing pressure on employers and employees, by relaxing rules around remote working and taking holiday, amongst other measures. Presidential decrees come into effect from the moment they are issued, but must be approved by congress to maintain their validity. 

BRAZIL | Mansueto out. Mansueto Almeida, a key member of Economy Minister Paulo Guedes’ team, announced on 14 June that he would soon be leaving his post as national treasury secretary. Almeida said he was too tired to work beyond the end of this year on the post-pandemic agenda, but there has been speculation that he was dissatisfied with the fiscal measures taken to tackle the pandemic.

Almeida is a strong defender of the spending cap, which prevents the government from increasing expenses from one year to the next, but which new legislation now essentially allows it to bypass where spending on the coronavirus emergency is concerned. Bruno Funchal, an economist currently working in the finance secretariat, will replace Almeida on 31 July.

MEXICO

A Mexican court has agreed to hear the case brought by two private electricity generation firms against the exorbitant increases in the fees that the state-owned electricity company, Comisión Federal de la Electricidad (CFE), can charge private firms to use its transmission lines to access the national grid. The fee increases have been approved by the energy regulatory commission (CRE). But business organisations have accused the government led by President Andrés Manuel López Obrador of trying to impose an ‘electrolinazo’ illegally designed to increase the price of renewable electricity generation artificially in the latest attempt to reduce competition for the CFE to the detriment of the overall market.

The CRE issued a resolution approving the CFE’s request to increase the fees it charges other firms to use its transmission infrastructure by up to 775% on 10 June. The CRE accepted the CFE’s argument that the sharp increases were justified to ‘level the playing field’. The CFE claims it has been subsidising its competitors by letting them use its infrastructure despite having lower production costs. The CFE added that the increases would mostly affect firms that were established before the 2013-2014 energy reform that opened up the sector to increased private participation and not the newcomers to the market that have also benefited from favourable contracts designed to encourage market entry.

However, private energy firms and business associations said that the increase would nonetheless drive some of the CFE’s established competitors out of business to the detriment of free market competition. Noting that the fee increases come hot on the heels of the controversial changes to electricity market regulations published by the energy ministry (Sener) and approved by the Centro Nacional de Control de Energía (Cenace) that limit the operations of private renewable electricity generators [WR-20-20], the business sector denounced this as another attempt by the government to restrict private participation in the electricity market for the benefit of the CFE but not necessarily consumers.

The private sector lobby Consejo Coordinador Empresarial (CCE) issued a statement on 11 June in which it argued that the approved fee increases violate federal competition legislation, as well as international treaties and complained that they would have a negative impact on businesses as well as households, as the increased costs would likely end up being passed on to them. The CCE said that the increases would “directly impact the productive structure” of many firms that have high electricity consumption (representing 14% of GDP according to the CCE), jeopardising their “capacity to maintain their labour force”. The CCE added that the “repercussions will go further and also affect the final consumer, who will see the cost of living significantly increase”.

Then, on 12 June, the specialised second federal district court on economic competition announced that it had agreed to hear an appeal against the fee increases filed by two private renewable energy firms - Tampico Solar and Saferay Solar. The court agreed to analyse the firm’s argument that the proposed charges would unjustly undermine their operations, and it ordered the suspension of the application of the new fee schedule on the two firms until it issues a ruling. This is the latest judicial setback for the government and its new energy policy as other federal courts have ordered the temporary suspension of new electricity market regulations drafted by the Sener until it is determined whether these are lawful or not. With the government insisting that it will defend its policy against all legal challenges, the disputes look set to reach the supreme court (SCJN), proving politically and economically damaging.

Up for the fight

President López Obrador is adamant that his government will fight all legal challenges to its energy policy initiatives. In his 12 June morning press briefing, López Obrador said that the energy policy is designed to stop the “pillaging” by private firms. “Are they going to continue the pillaging thanks to legal complaints and appeals? ... we will litigate…we will defend the national interest,” López Obrador said, accusing private firms of trying to “ruin” the CFE. He went on to complain that Spain’s Iberdrola has a “monopoly in Mexico”. Iberdrola currently has a 15% share of Mexico’s electricity market but, according to López Obrador, the firm has “bought or built the largest number of electricity generation plants in Mexico”.

The insistence by the government led by President Andrés Manuel López Obrador that the coronavirus (Covid-19) outbreak is under control and that Mexico can start easing containment measures and reactivating its economy has met with another wave of public protests, with even some allies expressing doubts. Should the epidemiological situation fail to improve, the López Obrador administration and ruling Movimiento Regeneración Nacional (Morena) risk losing the public’s faith ahead of elections next year.

Two weeks after the launch of the federal government’s plan to phase out containment measures and gradually return to a ‘new normality’ the number of Covid-19 infections and deaths continues to rise. A total of 5,222 new Covid-19 infections was reported by the federal authorities on 12 June, the highest daily infection figure to date. Daily reported infections have remained above 4,000 since, with the accumulated number of confirmed cases reaching 154,863, with 18,310 fatalities, by 16 June. The death toll is now double the government’s initial worst-case scenario of 6,000-8,000 deaths. Indeed, the deputy health minister, Hugo López-Gatell, is now predicting that as many as 35,000 people could die of Covid-19 in Mexico before the end of the epidemic.

López-Gatell, who said that the outbreak had peaked back in May and that the emergency would be over in the second half of June, is now saying that the epidemic looks set to remain active until October. Meanwhile, official employment data shows that hundreds of thousands of formal jobs are being lost as a result of the emergency. While the government says that addressing job losses is one of the reasons why it is keen to start easing containment measures, its refusal to roll out extensive fiscal relief measures in support of business has amplified the job losses (unlike many other countries the López Obrador government has not implemented any furlough scheme).

The combination of a still precarious public health scenario and a deteriorating economic situation has led to various anti-government protests being held in the past fortnight. There have been street protests in various cities by restaurant workers, artists, and other casual workers demanding the end of restrictions that prevent them from working, or to be given government assistance. These were small and spontaneous protests. But there were carefully organised and widespread demonstrations on 13 and 14 June. Thousands of people took part in ‘claxonazos’ protest motorcades held in 100 different cities across 10 states. These were organised by the Frente Nacional Ciudadano (Frena), a civil society organisation that has been calling for López Obrador’s resignation over his government’s deficient economic and public health policies.

Frena accuses López Obrador of pursuing a clientelist economic policy based on boosting spending on social programmes to target his support base at the expense of broad economic development initiatives. Frena is a right-wing organisation (it accuses López Obrador of leading a ‘Bolivarian’ political project), but not all critics of the government’s response to the pandemic can be tarred with the same brush. Deputy Porfirio Muñoz Ledo, a prominent Morena figure, who has become increasingly critical of the government, has also publicly questioned the government’s claims that the virus is under control. In a series of tweets published this week, Muñoz Ledo said that the official data shows that the infection rate remains high in many parts of the country and that it is premature to start easing restrictions. He cautioned that while López Obrador may have “the support of the masses”, lifting the restrictions is not “an electoral matter or something that can be resolved with a public consultation” but rather a decision that must be based on facts and evidence. He said that if the government fails to get a handle on the emergency, Morena could be punished at the polls next year. 

López Obrador rules out another infection surge

In his 12 June morning press briefing, President López Obrador insisted that the coronavirus infection curve is now falling in Mexico and that there will not be another surge of infections in the country as it starts to ease containment measures. “We don’t think there will be any more surges. Of course we need to be careful about this and open up slowly…following protocols and if we do see a surge, we shall return to voluntary confinement,” López Obrador said. Two days later, on 14 June, López Obrador reiterated that “we have left behind the worst of the pandemic”, adding that “we are not declaring victory but the worst has passed”.

CENTRAL AMERICA & CARIBBEAN

Guyana’s electoral dispute is finally coming to a head. Three-and-a-half months after general elections were held on 2 March, and 34 days after a protracted recount process, the Chief Election Officer of the Guyana Elections Commission (Gecom), Keith Lowenfield, produced a report on 13 June claiming that the opposition People’s Progressive Party/Civic (PPP/C) had won - but not fairly and squarely. The PPP/C savaged Lowenfield’s report, and the Caribbean Community (Caricom) observer team subsequently issued a weighty report of its own for Gecom’s chairperson, Claudette Singh, concluding that it had detected nothing untoward and that the result should stand. Singh concurred. President David Granger of the ruling A Partnership for National Unity-Alliance for Change (Apnu-AFC) coalition has previously said that he would accept Gecom’s final verdict but after such a long-running and acrimonious dispute doubt inevitably remains.

While providing a tabulation of the result and summarising the observation reports for Guyana’s 10 electoral districts for Gecom’s Singh, Lowenfield maintained that “anomalies and instances of voter impersonation [mean that] it cannot be ascertained that the results…meet the standard of fair and credible elections”. He alleged that 7.2% of the votes cast were impacted by anomalies, 39.2% by voter impersonation, 3.4% by both, and 5.7% by unreconciled ballot boxes. His comments echoed claims made by President Granger and the Apnu-AFC last week that there were “numerous reports of irregularities [that] demonstrate a pattern of manipulation of the electoral process”, amounting to some 84,000 “bogus” votes [WR-20-23].

Lowenfield’s interpolations incensed the PPP/C, which issued a statement accusing him of having “arrogated unto himself the role of an investigator, judge and executioner and made conclusive findings, in respect of the wild, reckless and baseless allegations made by Apnu-AFC”. It alleged that he had acted “ultra vires, in excess of and without authority, in violation of natural justice, in abrogation of the separation of powers doctrine, unlawfully, unconstitutionally…and worse yet, [he] has indicted his own elections”.

No sooner had Lowenfield appended his reservations to the election observation reports presented to Singh than the three-strong Caricom observer team sent her a 152-page report which stood in stark contrast to his conclusions. The Caricom team declared its “unshakeable belief that the people of Guyana expressed their will at the ballot box and…that the recount results are completely acceptable”. The report said that the observer team did not “witness anything which would render the recount, and by extension, the casting of the ballots…to have thwarted the will of the people” and that it “was indeed transparent”.

The Caricom report did stress that “there are obvious lessons to learn from this experience” that a future government should take on board “in the best interest of democratic governance”. The report acknowledged that the observer team had witnessed “instances of irregularities” but that many of these could be attributed to “either the incompetence of some of the Presiding Officers at the polling stations…and/or the failure to give adequate training by Gecom to its staff”. Singh echoed these comments on 16 June. But, stressing that Gecom did not have the legal authority “to examine and re-examine witnesses”, Singh instructed Lowenfield to present a final declaration of results certifying the PPP/C as the winner.

Border case

A public hearing into Guyana’s border dispute with Venezuela will go before the International Criminal Court of Justice (ICJ) on 30 June. “We are grateful for this opportunity which we have looked forward to for decades,” Guyana’s foreign minister, Carl Greenidge, said on 14 June. The ICJ will first decide whether it has jurisdiction in the case. The Guyanese government hopes it will then uphold the 1899 Arbitral Award, confirming Guyana’s sovereignty over the Essequibo, a resource-rich area of around 159,000km2, which represents around two-thirds of its national territory. “The court’s decision will promote stability and investor confidence in Guyana. It will lift once and for all this unwelcomed burden that we have been carrying as a nation for such a very long time,” Greenidge said. 

El Salvador’s President Nayib Bukele recently confirmed an end to the strictest lockdown in the region as part of efforts to stop the spread of coronavirus (Covid-19). The easing of lockdown measures, in place since 12 March, has not, however, been accompanied by an easing of the tensions between Bukele’s executive and the other two branches of government, the judiciary and opposition-controlled legislature, which have overshadowed his administration’s response to the pandemic.

On 14 June President Bukele confirmed an easing of the quarantine and the start of efforts to open up the economy via ‘decree 31’, despite concerns, as in neighbouring countries, that this is taking place as the number of infections continues to rise. The economic reactivation plan is divided into five phases from now until August. The first, from 16 June to 6 July, incorporates sectors considered key to the economy, such as textiles, manufacturing, and construction; the second, extends to public transport; the third provides for the reopening of churches and the resumption of non-contact sports; the fourth, tourism; and the fifth, all activities not previously included.

  • Cases continue to rise

On 16 June, the same day that the first phase of economic re-activation began, El Salvador registered its highest number of confirmed new daily cases of Covid-19 (125), bringing the national total to 4,066, including 79 fatalities.

Bukele boasted that this plan was the fruit of discussions with 22 productive sectors, observed by members of the international community. However, on 14 June civil-society groups and think tanks, such as Fundación Nacional para el Desarrollo (Funde), the local branch of international NGO Transparency International, published a statement complaining that ‘decree 31’ is illegal as it restricts constitutional rights to free movement and economic liberty which would require legislative approval. (Since last month the legislative assembly, with which Bukele has repeatedly clashed, has refused to ratify measures proposed by the executive, citing transparency concerns and opting to approve separate initiatives to open up the economy which Bukele has vetoed).

The statement also highlighted Bukele’s failure to heed yet another ruling by the constitutional chamber (SC) of the supreme court (CSJ), with which he has also had frequent run-ins, over his response to the pandemic [WR-20-20]. The SC ruling in question was issued on 8 June in response to Bukele’s 3 June decree extending the national quarantine until 15 June, on the grounds that by authorising continued restrictions of fundamental rights, the executive was overstepping its remit. The SC suspended its ruling for four days to allow the assembly to pass the necessary legislation, but this failed to materialise. While these ongoing clashes continue to spark criticisms that Bukele is acting in an authoritarian manner and failing to respect institutional process, his record approval rating [WR-20-20] provides him with little incentive to heed such complaints.

Further concerns

The US-based NGO Human Rights Watch (HRW) issued a statement on 9 June raising concerns about the government’s decision to suspend public information requests, including for Covid-19 individual test results and quarantine conditions. According to HRW, the national public information access agency (IAIP) has suspended all hearings and processes to comply with the state of emergency since 20 March. As well as reducing citizen oversight of the government’s response to the pandemic, HRW warns this is particularly problematic for local residents in quarantine, as they lack essential information on the number of days they are to be held in quarantine facilities and the results of their Covid-19 tests. HRW warns the suspension of administrative processes has affected thousands of people held at containment centres, which are quarantine facilities for people who return from abroad or violate the nationwide quarantine - a practice against which the SC has ruled on various occasions. As of 16 June, 13,570 people had completed quarantine, while 1,919 people were still being held in 44 centres.

The Dominican Republic’s national legislature has approved an extension to the state of emergency to contain the spread of coronavirus (Covid-19), the fifth such extension since the measure was first implemented on 19 March. The extension was approved on 12 June, the day after the DR registered its highest daily number of new Covid-19 cases (629), casting further doubt on the process of opening up the economy, which began last month [WR-20-21], over which the government led by President Danilo Medina has already had to backtrack.

Having announced the process of re-opening the Dominican economy (which the Economic Commission for Latin America and the Caribbean [Eclac] forecasts will register zero growth in 2020 - the highest in the whole region bar Guyana), the Partido de la Liberación Dominicana (PLD) government revealed on 16 June that the conditions were not in place for starting the third phase of the process. The minister for the presidency, Gustavo Montalvo, told reporters that since 3 June, the start of the second phase, there had been a significant rise in the average daily number of new cases – from 350 in the first phase to 500 currently.

The legislature’s willingness to approve the extension also reflected concerns about the rise in infections - with 23,686 confirmed cases as of 15 June (including 615 fatalities). There had been uncertainty as to whether it would be approved due to complaints by the political opposition that the PLD was exploiting the government’s response to the pandemic in order to favour its candidates ahead of the 5 July general election (pushed back from 17 May).

The opposition Partido Revolucionario Moderno (PRM), whose presidential candidate and current frontrunner Luis Abinader revealed on 10 June that he had tested positive for Covid-19, had complained that the PLD was using the emergency to benefit Gonzalo Castillo, its presidential candidate. Castillo has been an active face of the official response, distributing medical supplies such as face masks. The opposition has also complained that the curfew, which remains in place despite the phased reopening of the economy, has made electoral campaigning difficult.

Voting intentions

The latest electoral surveys show Luis Abinader ahead of Gonzalo Castillo, with the vote going to a second round if no candidate wins over 50% of the vote. A survey by Instituto Dominicano de Estudios Aplicados, Mercadeo y Encuestas (Idéame), published in the local media on 15 June, showed Abinader on 52.5% to 34.4% for Castillo. This is similar to a poll published on 1 June by Mercado y Cuantificaciones which gave Abinader 51.2% to 33% for Castillo. Another survey, published by Noticias SIN on 28 May, showed Abinader defeating Castillo by 39%-37%, within the 3% margin of error, although it suggested Abinader would win at least 46% of the vote in a run-off, while Castillo would not obtain more than 42%.

Concerns in Haiti persist

Jean William Pape, a specialist in infectious diseases and co-chair of the Covid-19 Multisectoral Management Commission in Haiti, recently reiterated warnings that the continued spread of the virus in the Dominican Republic poses a threat for Haiti which, as of 16 June, had registered 4,441 cases with 76 fatalities. These concerns were echoed by Carissa Etienne, the director of the Pan American Health Organisation (PAHO) in her weekly briefing on 16 June. Etienne said “in the Caribbean, where most islands have not reported significant increases in Covid-19, we remain concerned about Haiti and the Dominican Republic. Both countries, which share an active border, continue to report a rise in new cases, particularly Haiti.”

This follows warnings by Etienne last month of a ‘perfect storm’ approaching in Haiti due to Haitians returning from the Dominican Republic [WR-20-21]. According to latest figures from the UN International Organisation for Migration (IOM), 164,441 Haitians crossed the shared border between 17 March and 15 June, despite Haiti’s closure of its border on 19 March, returning to their home country due to a lack of work opportunities amid the Dominican lockdown.

While on 15 June Patrick Dely, the director of epidemiology at Haiti’s National Laboratory, said that the number of cases had peaked in Haiti, NGOs such as Médecins Sans Frontières have warned that, with just two laboratories in Haiti able to process Covid-19 tests, the number of cases is likely to be much higher than recorded.

President Juan Orlando Hernández revealed this week that he has tested positive for coronavirus (Covid-19), along with his wife Ana García. The two become the first presidential couple in Latin America to have tested positive for the virus. Having said initially that he had just mild symptoms, Hernández has since been hospitalised for pneumonia, a health setback which comes at a challenging juncture for the Honduran head of state on various levels.

In a televised appearance broadcast on 16 June, President Hernández, whose government has implemented a strict lockdown as part of efforts to stop the spread of Covid-19, explained that “due to my work, I haven’t been able to stay at home 100%,” referring to how he may have contracted the virus. He added that he would continue to do his work through “virtual media, through teleworking”. The following day, however, government officials confirmed that he had been hospitalised for pneumonia and was receiving medicines via intravenous drip, but generally was in good health.

Hernández’s admission comes at a critical point for Honduras as the economy began reopening on 8 June in a “gradual, orderly, and intelligent” manner, whereby businesses would only welcome back 20% of their workforces, with a further 20% permitted to return every two weeks thereafter provided there is no surge in cases [WR-20-22]. With the Economic Commission for Latin America and the Caribbean (Eclac) forecasting that Honduras’s GDP will contract 2.8% this year, slightly above the -2.3% average for Central America, the executive director of the Tegucigalpa chamber of commerce and industry (CCIT), Rafael Medina, underlined the need to kickstart the economy, warning on 5 June that the failure to do so could risk some 400,000 jobs. He added that, over the past 13 weeks, over 175,000 people have been suspended from their jobs already.

However, as in neighbouring countries, efforts to reopen the economy slowly come as the number of confirmed Covid-19 cases continues to rise, casting doubt on the future of the process. On 10 June, two days after the start of efforts to reopen the economy, Honduras (which as of 16 June had registered 9,656 confirmed cases and 330 fatalities) registered its highest number of daily fatalities (19).

Arrests

Two Guatemalan cousins, Otto Salguero and Ronald Salguero, are in US federal custody for drug trafficking charges and weapons offences and have an arraignment scheduled in a New York court later this week, according to US-based broadcaster Univisión. Charged in December 2019, the two cousins were accused of drug trafficking on behalf of Joaquín ‘El Chapo’ Guzmán, former head of Mexico’s Sinaloa drug trafficking organisation (DTO), in relation to the case involving President Hernández’s brother, Juan Antonio, who was convicted in October 2019 by a US jury on drug trafficking charges. The case has stoked controversy amid claims that El Chapo gave US$1m in cash to Juan Antonio for his brother’s presidential campaign - which President Hernández has firmly denied.

Comandante Cero dies

While President Hernández is the highest-level politician to have contracted the virus in Central America (and Latin America), the number of high-profile deaths linked to the health emergency continues to rise in the sub-region. Neighbouring Nicaragua, where President Daniel Ortega has not implemented a national quarantine or more stringent measures to contain the virus, has registered a particularly high number of deaths of public figures, although not all are explicitly linked to Covid-19 [WR-20-23].

Most recently on 16 June the Ortega government reported the death of former Sandinista guerrilla Edén Pastora, known as ‘Comandante Cero’, at the age of 83. While the Ortega government did not provide details as to the cause of his death, one of his sons Alvaro Pastora, told Reuters that he died of respiratory arrest, while declining to comment on whether he had contracted Covid-19.

A legendary figure, Pastora broke with the first Ortega government (of 1979-1990) in 1982, following differences with the leadership, to become a Contra. Having run as presidential candidate for the Christian Democrat Alternativa por el Cambio (AC) in the 2006 election he subsequently made up with Ortega and was in charge of the controversial project to dredge the River San Juan, which, in October 2010, triggered the revival of a territorial dispute with Costa Rica.

Most recently, Pastora came out in support of Ortega in relation to the crackdown by the government beginning in April 2018 on its opponents who Ortega accuses of attempting to carry out a coup.

POSTSCRIPT

Peru’s President Martín Vizcarra announced a plan on 15 June to revive the economy and create in excess of 1m jobs between now and the end of 2020 as the country seeks to bounce back from the ravages of the coronavirus (Covid-19) pandemic. A three-month lockdown brought an abrupt halt in March to a growth streak which stretched back 127 months. Peru’s worst monthly GDP figure since records began followed in April, the national statistics institute (Inei) revealed this week. But Covid-19 has not been suppressed in Peru. There are on average 3,000 new confirmed cases per day. Balancing economic recovery with public health in the months ahead will be a major challenge.

President Vizcarra’s PEN$6.4bn (US$1.8bn) plan, dubbed ‘Arranca Perú’, aims to drive growth through public works and investment in transport infrastructure improvements, housing, agriculture, and jobs programmes. In a long press conference attended by the majority of his cabinet, Vizcarra said ‘Arranca Perú’ would haul the country out of what he described as “the most serious crisis” in its history from the perspective of health and economic damage.

Vizcarra said that PEN$3.9bn (US$1.1bn) would be invested in repair and maintenance of some 50,000km of roads nationwide, creating 500,000 jobs, and the housing ministry’s budget would be boosted by PEN$535m to increase the number of homes constructed this year from 60,000 to 80,000, providing an additional 80,000 jobs. He added that PEN$373m would be set aside for construction, repair, and maintenance of drainage, irrigation, and water collection systems in the agriculture sector, providing 76,000 jobs, with a further 57,000 jobs created through PEN$937m of investment to improve municipal road surfaces and pavements, and public spaces. He also said the government would assign PEN$694m of investment to expand the ‘Trabaja Perú’ jobs programme to provide a further 226,000 jobs in all sectors of the economy.

In all, the objective is to create just over 1m jobs and lift the economy out of the doldrums. There is a long way to go. More than 2.3m people lost their jobs in metropolitan Lima between March and May, Inei reported this week, while GDP contracted by a record 40.5% year-on-year in May. In a videoconference with foreign correspondents on 16 June, the health minister, Víctor Zamora, said the government faced a quandary: “we need the economy to recover to raise taxes in order to sustain the health service”. Zamora also singled out the major problem the lockdown has been unable to address: “the informal economy [which comprises 70% of the working population], which has no protocols or health standards, has already exited [lockdown] independently of our will, and we have to be vigilant”.

“In its toughest times Chile continues to give of its best [and] set aside legitimate differences for a greater good”.

Chile’s finance minister, Ignacio Briones, on the ‘Acuerdo Covid’ struck with the political opposition.

 

“Bolivia is not the only country carrying out elections in these difficult circumstances.”

The president of Bolivia’s supreme electoral tribunal (TSE), Salvador Romero, argues that delaying the general elections further because of the Covid-19 pandemic is not a viable option.


“We will not ratify or recognise any electoral farce staged by the dictatorship for its own convenience, much less the results given by some so-called rectors handpicked by the dictator from his judicial legion of horror”.

Venezuela’s opposition parties respond to the supreme court’s appointment of new rectors to the national electoral council (CNE).