LatinNews Daily - 19 November 2021

On 18 November, Mexico’s President Andrés Manuel López Obrador met US President Joe Biden and Canada's Prime Minister Justin Trudeau, at the first North American Leaders’ Summit in five years, hosted in Washington DC. 

Analysis:

The re-launch of this trilateral relationship (also dubbed the ‘Three Amigos’) after a five-year hiatus is testimony to Biden’s efforts to repair the damage caused by his predecessor Donald Trump’s (2017-2021) aggressive and go-it-alone approach to foreign relations. Now bound by the US-Mexico-Canada Agreement (USMCA) on regional trade, the successor to the defunct North American Free Trade Agreement (Nafta), the three North American leaders sought to display their friendly relations - but some key points of contention remain. 

• Biden held bilateral meetings with Trudeau and then López Obrador, before the three leaders met together. This was the first time that Biden, who took office in January, and López Obrador, who rarely travels abroad, met in person. 
• A joint statement released after the meeting between the three leaders speaks of “Building back better: a secure, prosperous North America”, promising collaboration across a number of areas, including overcoming the coronavirus (Covid-19) pandemic, addressing the climate crisis, coordinating a response on migration, and fostering economic competitiveness. 
• A subsequent White House statement highlights, amongst other things, a North American strategy to reduce methane emissions and an agreement to donate Covid-19 vaccines to Latin American nations. “Our North American vision for the future draws on our shared strength”, Biden said. 
• The friendly meeting and display of understanding belied underlying points of friction, notably over energy issues and trade. A contentious electricity sector reform pushed by López Obrador, which would give a bigger market share to the state-owned Comisión Federal de Electricidad (CFE) to the detriment of private renewable energy providers, is criticised by US businesses, and also raises concerns over environmental consequences as it would effectively prioritise fossil fuels. Mexico’s foreign minister, Marcelo Ebrard, said that López Obrador touched upon his reasons for the reform in the trilateral meeting, but that it was not a central issue. 
• Biden’s ‘Buy American’ trade provisions, which would amongst other things give US consumers tax credits for purchasing US-made electric vehicles, are viewed negatively by both Mexico and Canada, although the US denies that this is a protectionist move that violates the USMCA. 
• On migration, an issue on which the US continues to pressure Mexico as Biden faces political pressure domestically, López Obrador questioned restrictive migration policies given the US and Canada’s need for migrant labour. “Why not study the labour demand and open orderly migration flows?” López Obrador suggested, adding that better North American integration is needed for the region to face China’s expansion. 
• In a small win for López Obrador – who has faced criticisms from human rights groups over Mexico’s role in helping the US try to stem irregular migration flows – Ebrard said that the Biden administration agreed to help support the expansion of Mexican social programmes, such as the ‘Sembrando Vida’ tree-planting initiative, to Central America as part of efforts to tackle the root causes of migration.   

Looking Ahead: Testing the US and Mexico’s renewed pledge to “prioritise respect for and the guarantee of [migrants’] human rights” as stated in the trilateral joint statement, a new US-bound caravan of some 3,000 migrants reportedly set off from Southern Mexico yesterday.

On 18 November, campaigning closed ahead of Venezuela’s 21 November regional and municipal elections.

Analysis:

These elections will mark the first time that the opposition has participated in an election since 2017, when it began a policy of boycotting votes in protest at alleged electoral fraud and political violence committed by armed government supporters. The abandonment of the boycott strategy is a recognition that it has enabled the ruling Partido Socialista Unido de Venezuela (PSUV) to dominate every level of government, whilst failing to delegitimise President Nicolás Maduro’s administration in the eyes of enough voters to trigger sustained mass protests. The election campaign has seen greatly diminished violence and repression compared with previous election cycles, and the presence of international electoral observers has raised opposition hopes.

• The vote on 21 November will see the election of 3,082 public officials, including 23 state governors, 335 mayors, 253 state legislators, and 2,471 local councillors.
• The presence of some 300 election observers from the European Union (EU) has added to a sense of relative calm ahead of the election. Opposition parties have been able to canvass freely, and rallies by opposition candidates have not descended into clashes between pro- and anti-government groups, as they did in previous election campaigns.
• Nevertheless, the opposition faces several major obstacles. Many opposition candidates are warning of a strong possibility of fraud, noting that the PSUV retains control over the national electoral council (CNE). Perhaps more significant, however, is a general failing of the fragmented opposition to unite. Rival opposition parties are fielding separate candidates in several gubernatorial races, splitting the opposition vote. Several smaller parties are boycotting the elections, claiming that they will not be free or fair. These boycotts may have a knock-on effect on the main opposition parties by discouraging turnout and feeding a sense of apathy among voters.
• Meanwhile, the PSUV may be boosted by signs that Venezuela’s catastrophic, eight-year economic decline is bottoming out, with hyperinflation cooling amid a de-facto dollarisation of the economy.

Looking Ahead: Voter turnout will be key to the opposition’s chances. The local pollster Datanálisis predicted last month that an abstention rate of 55% or higher could see the ruling PSUV-led coalition win 18 of the 23 gubernatorial races. Datanálisis predicts uneven turnout in different states, of between around 40% and 70% of eligible voters.

* Peru’s economy and finance minister, Pedro Francke, has raised the government’s GDP growth forecast for 2021 to 13%, up from the previous prediction of 10.5%. Francke said that the figure was “quite positive,” but added that a slow recovery in employment is preventing the country from bouncing back faster from the coronavirus (Covid-19) pandemic. He said that a planned tax reform, the details of which have not yet been announced, “will be very important to consolidate private and public investment and to have a strong, sustainable growth path over the next few years.”

On 18 November, Brazil’s national space research institute (Inpe) released its annual Prodes deforestation data, which shows that Amazon deforestation has soared to its highest level in 15 years. 

Analysis:

The numbers are dire. Preliminary monthly figures had indicated that deforestation might have fallen this year compared with the previous one, while the Brazilian government has just committed to ending illegal deforestation by 2028 as part of pledges made at the COP26 climate conference – a target which appears difficult to attain right now. 

• The Inpe has found that 13,235km² of forest were cleared in the Amazon between August 2020 and July 2021. This is a 22% increase on deforestation levels in the August 2019-July 2020 year, and the highest figure recorded since 2006. Deforestation in Brazil dropped dramatically in the late noughties, but began to edge up again from 2015 onwards. Since President Jair Bolsonaro took office in January 2019, deforestation has surged every year.  
• The latest deforestation data casts further doubt over the commitments Brazil made at the COP26 earlier this month to end deforestation and cut emissions – the two are closely linked, with land use changes the largest source of carbon emissions in Brazil. Scientists also warn that the Amazon is approaching a tipping point, where it will emit more carbon than it can absorb.
• Compounding doubts about Brazil’s good faith, it appears that the government deliberately held back on making the Prodes data public until after the international climate conference was over. The Inpe’s report is dated 27 October, while a union representing Inpe civil servants had released a note on 17 November saying the government had the data in hand ahead of the COP26 and deliberately chose to keep it under wraps. Environment Minister Joaquim Leite has denied having access to these deforestation figures prior to yesterday. 
• In a press conference yesterday, Leite said that the government would be more “forceful” in tackling crime in the Amazon, but stressed that these figures did not reflect the recently stepped-up efforts to fight deforestation. Environmental NGOs say that, on the contrary, the deforestation figures reflect the Bolsonaro government’s true intentions and colours. 

Looking Ahead: With the Amazon vital to the global fight against climate change, and such a level of forest loss flying in the face of Brazil’s recent COP26 pledges, a reaction from the international community is to be expected. 

* The Brazilian government has announced that President Jair Bolsonaro signed a series of agreements with Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar, while in Doha, the Qatari capital, in the areas of investment, economy, defence, energy, and sport. The government gave no further detail on the agreements, while noting that trade between Brazil and Qatar totalled US$774.7m last year. Bolsonaro’s visit to Doha concluded a tour which included a visit to the United Arab Emirates (UAE) and Bahrain, with the aim of drumming up investment. Few concrete announcements have been made, but on social media, Bolsonaro said that “we are bringing good results to Brazil from this trip”, mentioning discussions on tourism in the Amazon region.

On 18 November, 15 Nicaraguan human rights organisations presented a report which accused President Daniel Ortega of crimes against humanity and called for the installation of international independent fact-finding mission in Nicaragua.

Analysis:

Ortega has faced similar accusations in the past related to his government’s crackdown on its opponents following unrest which erupted in April 2018. This is the first time that a report, which was endorsed by the Inter-American Commission on Human Rights (IACHR) of the Organisation of American States (OAS), has included the period up to and including the recent November general election which was widely slammed as undemocratic. It is likely to subject the Ortega government, which is already facing the prospect of international isolation, to further condemnation.

• Entitled “Dictatorship and repression in Nicaragua: the fight against impunity”, the report was presented by Centro Nicaragüense de Derechos Humanos (Cenidh) and Colectivo de Derechos Humanos Nicaragua Nunca Más, among other groups.
• It identifies six stages of repression since April 2018, beginning with generalised repression of citizens’ protest and including the imposition of a state of terror via “Operation Clean-up” (where parastatal Orteguista groups in coordination with the state security forces carried out extrajudicial executions to dismantle roadblocks); arbitrary arrests and the detention of political prisoners; express kidnappings, torture and the use of clandestine prisons; and the imprisonment and criminalisation of electoral opponents.
• The report tallies at least 355 dead and some 2,000 injured by state agents or civilians acting in acquiescence with these forces. It reports at least 1,614 victims of arbitrary detention for having participated in acts of protest or opposition, with over 100,000 people forced to flee the country and over 90 journalists forced into exile.
• In February 2021 the International Federation for Human Rights (FIDH) and CENIDH released a 72-page report “Accountability now! Extrajudicial executions and repression in Nicaragua” which monitored the country over the 2018-2020 period and drew similar conclusions.

Looking Ahead: The government, which in 2018 expelled the OAS Interdisciplinary Group of Independent Experts (GIEI) and the IACHR’s Special Monitoring Mechanism for Nicaragua (Meseni), which was sent to monitor the human rights situation there, is unlikely to agree to the request for the international fact-finding mission. However, the report will pile further pressure on the government over the human rights situation in Nicaragua.

* Costa Rica’s finance ministry has released new figures which show the country’s fiscal deficit to October was ¢1.54trn (US$2.4bn), representing 3.96% of GDP. This compares with ¢2.5trn registered at the same point in 2020, which was equivalent to 6.91% of GDP. As of October 2021, public debt was ¢27.5trn (71.03% of GDP). The finance ministry said that these results were favourable but insufficient to ensure financial stability in the long term, and called for the approval of initiatives currently under discussion in the legislature (such as the public employment bill introducing a single pay scale and eliminating other salary components). The finance ministry also highlighted that interest payments on debt reached ¢1.65trn (4.26% of GDP) – the highest of the last 15 years. The government has previously said that the fiscal adjustment outlined in the International Monetary Fund (IMF) agreement approved by the legislature in July would be “transcendental” to reducing this. Last year, following the arrival of the coronavirus (Covid-19) pandemic, Costa Rica posted a fiscal deficit of 8.1% of GDP, and a public debt of 67.5% of GDP.

* The Mexican government led by President Andrés Manuel López Obrador has said that it will seek an agreement with Canada for Canada’s state-owned company Hydro-Québec to upgrade Mexico's network of hydro-electric plants. The announcement by foreign minister Marcelo Ebrard followed a meeting which took place on the side-lines of the North American Leaders’ Summit which took place in the US involving US President Joe Biden, Canada’s Prime Minister Justin Trudeau and President López Obrador. The possibility of Canada assisting Mexico in this area was floated in 2018 when the Mexican government first announced it would seek Canada’s help in modernising 60 hydroelectric projects.

On 18 November campaigns closed ahead of Chile’s 21 November general election.

Analysis:

The elections are widely seen as the most important turning point in Chilean politics since the restoration of democracy in 1990. They are expected to end a three-decade period in which traditional centre-right and centre-left coalitions have alternated in power and dominated Chilean politics. They come after the mass street protests of 2019 which focused attention on inequality and triggered a process of constitutional reform.

• Opinion polling companies have misread the outcome of recent elections, but it is widely expected that no presidential candidate will win an outright majority, triggering a second-round run-off on 19 December.
• Centre-right candidate Sebastián Sichel of Chile Podemos Más (the ruling coalition previously known as Chile Vamos) and Yasna Provoste of Nuevo Pacto Social, a coalition of traditional centre-left parties broadly considered to have succeeded the Concertación coalition, are not expected to go through, with the second round being a contest between the new formations led by far-right frontrunner José Antonio Kast (Partido Republicano) and left-wing Gabriel Boric (Apruebo Dignidad).
• Kast appeals to Chilean conservatives on issues such as reducing immigration and crime and the promotion of religion and family values. At a closing rally in the upmarket district of Las Condes in Santiago, he told supporters that there are recipes for economic recovery but there are none available “to recover freedom after the Left takes power.”
• Boric attended a series of rallies in the port city of Valparaíso stressing the need to build a state “which guarantees rights, dignity and equality as the only way of achieving stability.” The candidate said the state should include, embrace, and not abandon its citizens.
• The polls will be held only five days after the senate rejected an attempt to impeach incumbent President Sebastián Piñera. Analysts believe this may have a polarising effect on the vote, with right wingers celebrating the failure to impeach, while left wingers highlight the seriousness of the charges.

Looking Ahead: With a still-large number of undecided voters, surprises are still possible in the first round, although the balance of probabilities still points to a second-round contest between Kast and Boric.

* Chile’s central bank (BCCh) has released new figures which show that the country’s GDP grew 17.2% in the third quarter of 2021 compared with the same quarter in 2020. The BCCh report noted that this stems from increased opening up of the economy following the restrictions imposed to control the coronavirus (Covid-19); economic measures taken to help households and companies; partial withdrawals from pension funds; and a low basis of comparison due the sharp drop in activity as a result of the pandemic. According to the report, economic activity was driven by services (personal services were up 24.5% and business services up 20.7%), while trade and construction also posted strong growth of 29.0% and 39.4% respectively. However, mining and the agricultural-forestry sectors posted declines of 3.8% and 4.0% respectively. According to seasonally-adjusted figures, economic activity in Q3 grew 4.9% compared with the previous quarter.