LatinNews Daily - 26 November 2021

On 25 November, right-wing opposition parties in Peru’s congress presented a motion of impeachment against President Pedro Castillo.

Analysis:

The impeachment motion accuses Castillo of “moral incapacity” – the same offence that was used to justify the impeachment of former president Martín Vizcarra (2018-2020). It was widely expected that the opposition would at some point seek to remove Castillo from office, with right-wing deputies regularly calling for his impeachment over the course of his scandal-ridden first four months in office. As things stand, the three parties whose members signed the impeachment motion lack the numbers to force an impeachment trial, and Castillo seems likely to avoid that fate. Nonetheless, all eyes will be on the centre-right parties that did not sign the motion but which have been broadly critical of Castillo; if they move decisively against the president, an impeachment trial could ensue.

• The motion of impeachment was presented after it gained 28 signatures, making it eligible for debate in Peru’s 130-member unicameral congress. For the motion to trigger a full impeachment trial, it would require the approval of 52 legislators. Removing Castillo from office would then require the backing of 87 legislators.
• The motion accuses Castillo of the impeachable offence of “moral incapacity”. It highlights alleged campaign financing violations by Perú Libre, the far-left party on whose ticket Castillo won office; the appointment of cabinet ministers alleged to support or to have been members of the Maoist guerrilla group Sendero Luminoso (SL); influence peddling in the military; “weakening of democracy by strengthening relations with anti-democratic governments such as Venezuela”; “mistreatment of the media”; and the alleged enabling of violence against women by appointing ministers accused of domestic abuse.
• The motion was signed by deputies from the right-wing opposition parties Fuerza Popular, Avanza País, and Renovación Popular.
• Castillo yesterday acted unconcerned by the impeachment motion, saying that he is “not worried about the political noise because the people have chosen me, not the mafias or the corrupt.” He urged the opposition to “sit down and talk, to leave behind the useless confrontation that does so much damage to the country, to our teachers and to our children, who are expecting us to be there for them.”
• Verónika Mendoza, the leader of the Juntos por el Perú party which is allied with the Castillo administration, said that the impeachment motion “demonstrates a coup-mongering, authoritarian and antidemocratic attitude, against which it is vital that all the democratic, political and social sectors remain firm… They are not seeking the impeachment of President Castillo, they are seeking to destroy democracy.”
• The efforts to impeach Castillo are likely to inflame already virulent political tensions in Peru. Yesterday, the attorney general’s office opened an investigation into the far-right group ‘La Resistencia’, in relation to an alleged attack on the home of Yonhy Lescano, the defeated candidate for the centre-left Acción Popular in this year’s election. Lescano tweeted that the group “physically attacked my family with sticks”. La Resistencia swears loyalty to defeated Fuerza Popular candidate Keiko Fujimori, who has sought to delegitimise Castillo by claiming that she was the true winner of the election.

Looking Ahead: No date has yet been set for the debate of the impeachment motion. The three right-wing parties whose members signed the impeachment petition have 43 deputies between them, falling short of the 52 votes that would be needed to trigger an impeachment trial. Much will depend on whether the calls for impeachment gain traction with the centre-right Alianza para el Progreso (15 seats) and Podemos Perú (5 seats).

* Bolivia’s economy and finance minister, Marcelo Montenegro, has presented the government's national budget proposal for 2022, which envisages spending of B$235.09bn (US$34.07bn) – a 2.9% increase on the approved version of the 2021 budget. The proposed budget plans for an increased tax haul of 12.1% compared to 2021, which will be used to fund a 25% increase in public investment. Montenegro said that the government expects Bolivia’s GDP to grow by 5.1% in 2022, and for the fiscal deficit to decrease from 9.7% to 8% of GDP. The budget proposal must now be debated and approved or modified by congress.

On 25 November, Brazil’s President Jair Bolsonaro defended giving legal protection to police officers who kill in the line of duty. 

Analysis:

These comments come in the wake of another high-profile deadly police operation in the state of Rio de Janeiro late last week, which prompted calls for a thorough investigation from the United Nations (UN). In defending that police officers who kill in the line of duty be protected from prosecution via a legal mechanism known as the ‘exclusion from illegality’, Bolsonaro is harking back to a promise he made as presidential candidate in 2018, but has so far been unable to deliver.

• “We have to fight for our exclusion from illegality. We will complete this mission. You can be sure that it will reduce violence, and by a lot, in our Brazil”, Bolsonaro said yesterday during an event held to deliver policing equipment to the Brazilian border police. “A police officer can’t carry out his mission and then the next day receive a visit from a judicial official”, Bolsonaro argued. 
• Attempts by the Bolsonaro government to pass legislation protecting police officers in this way, which critics equate to a license to kill, have been unsuccessful so far.
• Violent policing is under scrutiny, particularly in Rio de Janeiro where a supreme court (STF) ruling issued last year banned police operations in favelas for the duration of the coronavirus (Covid-19) pandemic, except in exceptional circumstances. Public security data show the measure was successful in bringing down police killings at the start, but police operations have continued nonetheless and the Rio police were still responsible for 1,563 deaths between June 2020 (when the ban came into effect) and October 2021, according to figures reported by news site G1.  

Looking Ahead: The tough-on-crime public security agenda was an important part of Bolsonaro’s presidential campaign in 2018, and he may return to it as he gears up for his re-election campaign ahead of the October 2022 general election; public security officers, notably members of the military police, form part of his support base.

* Brazil’s central bank (BCB) has released new figures which show that foreign direct investment (FDI) to the country totalled US$2.5bn in October, a figure that was down from the US$3.1bn received in October 2020. However, in the 12 months to October 2021, FDI was up slightly to US$49.2bn (equivalent to 3.06% of GDP), from US$45.9bn (3.05% of GDP) a year earlier. These FDI figures were released as part of data on Brazil’s external sector, which show that the country recorded a balance of payments deficit of US$4.5bn in October, compared with a US$1.2bn balance of payments deficit in October 2020. 

On 25 November Željana Zovko, the head of the European Union Electoral Observer Mission (EU-EOM) in Honduras, urged that the 28 November general elections be held in a peaceful and transparent manner.

Analysis:

Zovko’s call comes amid concerns about electoral violence and fraud ahead of the vote, in which the presidency, vice presidency, all seats in the 128-member unicameral legislature and 298 mayoralties are up for grabs. Fears regarding electoral violence and fraud have mounted as surveys show former first lady (2006-2009) Xiomara Castro, of the leftist main opposition alliance Alianza por el Pueblo, ahead of Tegucigalpa mayor Nesry Asfura, of the ruling Partido Nacional (PN), ahead of the vote, in which a simple majority is required to win. Castro has previously warned that democracy was being threatened by the PN, which election watchers point out has a huge stake in the election given that a defeat for the ruling party, which has been in office since 2010, could open up the possibility of President Juan Orlando Hernández, whose own contentious election in 2017 was slammed as fraudulent and triggered post-electoral violence, facing possible action over drug trafficking allegations in the US.

• Castro is pledging to address corruption, a major voter concern following the ejection in January 2020 of the Mission to Support the Fight against Corruption and Impunity in Honduras (Maccih), which was sponsored by the Organisation of American States (OAS). She is proposing to request another international commission against corruption and impunity in Honduras (CICIH), among other initiatives.
• Her other pledges include plans to establish a national constituent assembly to redraw the 1982 constitution; to repeal the law of the employment and economic development zones (Zedes), a contentious PN project; and to establish diplomatic and trade relations with mainland China (and sever ties with Taiwan) to address Honduras’ rising debt (which totalled 58.9% of GDP in 2020, up from 48.7% in 2019).
• Asfura, who has also been accused of corruption, is widely considered to represent continuity with the current administration. He has said his key priority is creating jobs and has sought to distinguish himself from the president, insisting that he is “different” – perhaps indicative of Hernández’s unpopularity.

Looking Ahead: Amid concerns of fraud, violence and operational glitches on voting day, the elections are due to be observed by missions from the OAS as well as the EU.

* Panama’s association of customs workers (ANFA) has begun a strike calling for various bonuses and labour incentives to be paid. General director of Panama’s national customs authority (ANA) Tayra Barsallo said that the economy & finance ministry (MEF) had approved the necessary funds to pay the bonuses and urged ANFA to call off the strike. The private sector lobby Cámara de Comercio, Industria y Agricultura de Panamá (CCIAP) urged ANFA to lift the strike, warning that it was causing daily losses of over US$27m. It estimated that 1,200 containers containing an average of US$20,000 worth of goods will be prevented from entering the country each day and that around 300 export containers, each with an approximate value of US$10,000, will be prevented from leaving the country.

On 25 November thousands of people took to the streets of Mexico City and other cities across Mexico to protest against gender violence, with at least three people killed during demonstrations.

Analysis:

The protesters condemned not just gender violence, which claims the lives of at least 10 women a day in the country, but also the lack of political will on the part of the government led by President Andrés Manuel López Obrador to address the issue. Although feminist groups supported López Obrador’s presidential candidacy in 2018, the head of state is conservative on social issues, such as abortion and marriage equality, and has taken no action to combat the rising tide of femicides in the country.

• The protest march in Mexico City marked the International Day for the Elimination of Violence against Women. It finished outside the national palace in the Zócalo square, where there were some clashes with the police. Some hooded protesters also broke various windows and damaged bus stops along the route of the march. The worst violence, however, took place outside the city hall in the municipality of Guaymas, in the north-western state of Sonora.
• A group known as Feministas del Mar was staging a symbolic takeover of the city hall in Guaymas, according to the state attorney general’s office (FGJE), when a group of hitmen armed with assault rifles and grenades arrived on the scene and started firing upon the building.
• A shootout with the bodyguards of the mayor, Karla Córdova, ensued during which three people were killed, and two injured. One of the bodyguards, one of the hitmen and one of the feminist protesters were killed. A photographer working for the city hall was injured along with another one of the feminist protesters.

Looking Ahead: Protests against gender violence and in support of the decriminalisation of abortion will continue to pick up support in Mexico unless the government addresses the demands of protesters. But this is unlikely as López Obrador has publicly denigrated feminists who have criticised his government, accusing them of serving the “conservative opposition”.

* Mexico’s national statistics institute (Inegi) has released new figures which show that Mexico’s GDP contracted 0.4% in the July-September 2021 quarter, in seasonally-adjusted terms compared with the previous quarter. This is a bigger contraction that the 0.2% decline initially reported at the end of October, which signalled the first quarterly decline since the Mexican economy began recovering from the coronavirus (Covid-19) pandemic which struck in March 2020. The updated Inegi figures showed that the tertiary sector (services) declined 0.9% compared with the previous quarter while the primary (agriculture) and secondary (manufacturing) sectors were up 1.3% and 0.3% respectively. In annual terms Mexico’s GDP grew 4.7% in the third quarter of 2021 compared with the same quarter in 2020, with the primary sector up 0.3%; the secondary sector up 5.1% and the tertiary sector up by 4.4%. 

On 25 November, 24 hours before the start of ‘Black Friday’ online discounts, the Argentine central bank issued an order prohibiting the sale of holidays and foreign travel through credit-card based quotas.

Analysis

At this time of year many Argentines are planning their summer holidays. Credit card companies, airlines, and travel agents usually offer payment of foreign holidays in quotas. However, concerned over its dwindling US dollar reserves the central bank (BCRA) has banned such payments. In normal times there is a net annual foreign currency outflow of US$5bn on the tourism account, as the expenditure by Argentines travelling abroad exceeds that by foreign tourists visiting Argentina. The latest measures are intended to cut back that net outflow

• A BCRA circular says payment in quotas by credit card can no longer be offered for foreign travel items such as airline tickets, car rentals, and hotels. Holiday makers will have to make a single up-front payment, and any outstanding credit card balances relating to foreign travel items will attract a minimum interest rate of 43%.
• The decision will be unpopular with middle class families (many of whom take summer holidays in neighbouring Uruguay or Brazil) but reflects the acute shortage of foreign currency as the country continues trying to reschedule its debt to the International Monetary Fund (IMF), and to reach agreement on a multi-year economic plan.
• The government has said it will submit this plan to congress in December and aims to finalise a rescheduling deal with the IMF by March. However, the financial markets remain sceptical, with sources saying that the economy minister, Martín Guzmán, is planning only to present a list of economic targets for growth and inflation, rather than lay out a detailed economic programme.

Looking Ahead: Since the proposed rescheduling would extend well beyond the current government’s remaining two years in office, an agreement with the political opposition is seen as an essential part of the solution. There is, however, little sign of the expected cross-party talks, which increases the possibility of further delays and foreign currency restrictions.

* Argentina’s President Alberto Fernández has confirmed that construction of the planned Néstor Kirchner natural gas pipeline will go ahead, increasing Argentina’s hydrocarbon transport capacity and increasing exports to neighbouring countries. Fernández said that a public tender will be opened for the US$40bn project, which he said would enable Argentina to transport 24m cubic metres of gas per day and will result in savings of US$1.45bn per year. The pipeline is viewed as necessary to reduce bottlenecks around the Vaca Muerta shale oil and gas fields in Neuquén, Patagonia.