Weekly Report - 09 December 2021 (WR-21-49)

Peru’s right-wing dominated congress tried and failed to impeach the country’s left-wing president, Pedro Castillo, on 7 December. It was the fifth impeachment attempt (known as a ‘moción de vacancia’) in the last four years; two of them have successfully removed sitting presidents. Ominously for Castillo, it is unlikely to be the last.

The Peruvian constitution envisages the removal of a sitting president, for what is called a “permanent moral incapacity” as a rare and extreme event. Between 1823 and 2000, the procedure was used just three times. But all of that has changed in the last four years during which time the procedure has been invoked on no fewer than five separate occasions - on average more than once a year - becoming normalised and increasingly deployed as an everyday, tactical, political device. Of those five attempts, two were successful, forcing the departure of Presidents Pedro Pablo Kuczynski in 2018 and Martín Vizcarra in 2020.

This latest attempt also stands out because it comes at such an early stage of the current presidency - a little over four months after Castillo took office in late July. Castillo has certainly had a chaotic and conflictive start to his five-year term in office: the right-wing parties that hold sway in congress saw this as an opportunity to deliver an early knock-out blow.

The right-wing opposition cited their ongoing (and still unsubstantiated) claims that Castillo’s election had been fraudulent; ongoing corruption investigations involving presidential aides; and recent allegations that Castillo’s presidential secretary, Bruno Pacheco, intervened illegally to ensure the promotion of military officers sympathetic to his government (Pacheco subsequently resigned). Under a separate investigation into this case, Castillo has been summoned to appear before a state prosecutor on 14 December. 

In order to succeed, the attempt to oust Castillo needed to meet two requirements. The first was to gather the support of 40% of those members of the 130-seat congress who were present in the chamber at the time the vote was held. As 128 were present, that meant mustering 52 deputies in favour of the impeachment motion.

Supposing that bar was met, the next test would have been to gain a two-thirds majority - at least 87 votes - in the full impeachment hearing, at which the president is required to attend, to answer the charges. In the event, the attempt failed at the first hurdle – the impeachment motion attracted 46 votes in favour, which was six short of the target. A bigger group of 76 voted against, and there were four abstentions.

There were three major parties pushing for impeachment: the ‘neo-liberal’ Avanza País-Partido de Integración Social (AP-PIN), which initiated the process; the right-wing Frente Popular (FP, Fujimoristas) led by Keiko Fujimori, who was narrowly defeated by Castillo in the presidential elections earlier this year), and the far-right Renovación Popular (RP).

Some deputies from the populist party Podemos Perú (PP) and from the populist centre-right Alianza Para el Progreso (APP) also supported the impeachment motion. Perú Libre (PL), the hard-left party which supported Castillo’s presidential campaign but is now somewhat estranged from the president, together with the moderate left Juntos por el Perú (JPP), supported Castillo, accusing the right-wing opposition of still failing to acknowledge its presidential election defeat. Others voting against impeachment included centrist parties Acción Popular (AP) and Somos Perú, together with the liberal Partido Morado.

• Opposition divisions

Mutual recriminations were flying between the leaders of opposition parties in congress after the failed attempt to impeach President Castillo. The president of Alianza Para el Progreso, César Acuña, insinuated that because of their own private interests Somos Perú, Partido Morado, and Podemos Perú could now be considered “government allies”. The secretary general of Partido Morado, Rodolfo Pérez, accused Acuña of being “unhinged” and argued that his party’s position against impeachment was “institutional, in defence of the constitution”.

Far from over

There are signs that this is just the first stage of an impeachment saga that could run and run. Retired Admiral Jorge Montoya, a deputy for RP, said it was likely that there would be further impeachment attempts. “This does not end here. It is not a sprint but a marathon. There will be further attempts to impeach,” Paula Távara, a Peruvian political scientist, said.

Távara believes that the opposition wants to have the president summoned to congress to face impeachment charges, to wear him down politically. Even if it ultimately fails to meet the second two-thirds pro-impeachment majority, the trial would inflict damage on Castillo and weaken his government. New attempts may also be designed to help whittle down the pro-Castillo vote, for example by peeling away some of the centrist parties.

While previous impeachment proceedings have attracted mass demonstrations, on this occasion much of the population appeared disconnected and alienated from what they see as an internal crisis shaking a discredited political system. There were pro and anti-impeachment rallies, but attendance at both was only in the hundreds.

As many as 45% of respondents are in favour of Castillo’s impeachment, according to an opinion survey conducted by the national pollster Datum from 4-6 December, although a majority, 52%, oppose it. Other recent public opinion polls show that Castillo’s disapproval rating is high, at 58%, according to an Ipsos poll published on 25 November, but that the disapproval rating of congress, as is nearly always the case in Peru, is even higher, at 75%.

While the Ipsos poll found that 37% of respondents still support Castillo, as many as 70% felt he had made poor ministerial appointments. It was noteworthy that just 7% of respondents advocated appointing ministers from the ranks of PL or allied parties, while 81% expressed a preference for independent and experienced professionals in the cabinet.

Meanwhile, many on the centre left – Castillo’s most likely allies in any attempt to stabilise the government – are in despair over his administration. Alonso Segura, a former economy minister (2014-2016) under the originally left-leaning government of Ollanta Humala (2011-2016), commented: “It is a chaotic government that has no idea how to manage things and does not dispel doubts as to where it is going.” Several opinion surveys show that a majority of respondents are of the opinion that Castillo will not manage to complete his five-year term in office.

Ecuador’s national assembly rejected a motion to launch impeachment proceedings against President Guillermo Lasso on 7 December, which had called for his removal from office due to his naming in the leaked ‘Pandora Papers’ on international tax havens [WR-21-41]. The vote followed a decision by the comptroller general’s office to shelve an investigation into Lasso’s tax arrangements after finding no evidence of criminal wrongdoing. Lasso may be out of immediate danger, but an investigation into him by the attorney general’s office reportedly remains open.  

The impeachment motion, which was presented by the left-wing Unión por la Esperanza (Unes) coalition, accused President Lasso of the impeachable offence of “causing a grave political crisis”. It was defeated with 77 votes against, 51 votes in favour, and seven abstentions. The motion was based on a damning report by the national assembly’s commission on constitutional guarantees, which accused Lasso of breaking the law with his use of bank accounts in Panama and the US.

During a tense five-hour debate, the legislature also failed to approve subsequent motions that would have called on the attorney general’s office to conduct an audit of Lasso and his wife’s financial records. The only motion that was approved was one put forward by the centre-left Izquierda Democrática (ID), calling on Lasso to appear for questioning by the legislature – Lasso subsequently said that he would not do so.

Lasso’s justification for his refusal to appear before the national assembly was the 7 December announcement by the comptroller general’s office that it had archived its investigation into him after failing to find “objective proof that, when he registered his candidacy for the presidency…he was the direct or indirect owner of goods or capital in jurisdictions considered to be tax havens”. The comptroller’s statement ruled that South Dakota, where the Pandora investigation revealed that Lasso still held funds as of October, “is not considered a tax haven” under Ecuadorean law.

Lasso is not necessarily off the hook just yet. An investigation reportedly remains open in the attorney general’s office. This probe was initiated following a complaint by Yaku Pérez, the defeated candidate for the indigenous party Pachakutik in this year’s presidential election. However, it is unlikely that this investigation will reach a dramatically different conclusion to that of the comptroller general’s office.

The government will likely be more concerned by the political capital it has lost during the Pandora debacle. The scandal highlighted the deep cracks in Lasso’s shaky legislative alliance with Pachakutik, with many of the indigenous party’s deputies effectively moving into opposition in recent months.

Nor can Lasso rely on ID, its other loose ally in the legislature, which has also distanced itself from the government since the Pandora Papers were leaked in October. With Lasso’s centre-right Movimiento Creo holding fewer than 10% of seats in the national assembly, these desertions could create serious difficulties when the government attempts to press ahead with its controversial labour reform in the new year [WR-21-39].

Quito’s metro nears completion

The mayor of Quito, Santiago Guarderas, announced on 6 December that the capital’s long-awaited metro system will likely be inaugurated in the final quarter of 2022. Guarderas said that construction on the 15-station, 22km metro is “99.3% complete”, and that attention is now turning to finding an international operator to run it once it is completed. Construction began on the metro in 2012 and was scheduled to be completed in 2020, but it was delayed by a further two years due to the coronavirus (Covid-19) pandemic.

As indigenous demonstrators packed up their makeshift camps in the eastern Bolivian city of Santa Cruz on 2 December after a fruitless two-month wait for talks with President Luis Arce, protest leaders accused the government of politicking over its refusal to hear their concerns surrounding land invasions. That refusal, protesters maintain, is symptomatic of the tendency of the ruling left-wing Movimiento al Socialismo (MAS) to snub social movements that it has been unable to co-opt.

The protesters, from the Chiquitania region in Santa Cruz department, had been in the city since 30 September, when they completed a 550km march from the city of Trinidad in the neighbouring department of Beni. They were seeking talks with President Arce regarding land invasions by migrant farmers on their ancestral lands.

Claiming that these settlers are mostly Aymara and Quechua farmers from MAS strongholds in central and western Bolivia, the Chiquitanos argue that the government is permitting illegal land grabs by groups of its supporters. They accuse the settlers of violence and environmental destruction, and they claim that their cultural identity is being eroded by the new arrivals.

Marcial Fabricano, a protest leader who has previously served as the president of the Santa Cruz-based indigenous organisation Confederación de Pueblos Indígenas del Oriente Boliviano (Cidob), argued that the government’s failure to respond to the demonstration was typical. “This is their way of governing those who do not kneel at the altar of their regime,” Fabricano maintained on 2 December. He contrasted the Arce administration’s silence with its heavy promotion of a massive demonstration by MAS supporters on 29 November [WR-21-48].

Government officials have responded by saying that, as the protesters did not present a formal petition with their demands, there were no grounds for discussion. Since the presidency of Evo Morales (2006-2009), the MAS has not infrequently been accused of neglecting social movements that it has been unable to co-opt.

Whilst the party retains significant influence over indigenous and labour organisations in much of Bolivia, this is noticeably weaker in the east of the country and, in particular, in the opposition bastion of Santa Cruz department. Those dynamics were reflected in the comparatively warm response that the indigenous protesters received from the right-wing Creemos party during their time in the city.

Camacho’s opportunism

Luis Fernando Camacho, the Creemos governor of Santa Cruz, has sought to capitalise on the protests by escalating his calls for increased federalism in Bolivia, which he claims would enable the departmental authorities to resolve the issue. Camacho is not an obvious ally of the Chiquitanos, having frequently been accused of anti-indigenous racism, and his wading into the dispute has been widely interpreted as political opportunism.

Summit on judicial reform

Justice Minister Iván Lima announced on 5 December that the government will hold a summit in March 2022 to discuss judicial reform, calls for which have intensified in the past year amid concerns of political interference in the justice system [WR-21-34].

Lima did not specify who would be invited to the summit, but a similar event in 2016 featured over 1,600 participants, including magistrates, judges, lawyers, and representatives of social organisations and legal faculties. That summit was criticised by the political opposition, which claimed that the invitees were predominantly MAS sympathisers, and it did not result in significant reform. Lima indicated that the rules surrounding the election of judges would be a key area of discussion.

The commander of Colombia’s national police, General Jorge Luis Vargas, said on 7 December that it is “very likely” that a leading commander in the dissident ‘Segunda Marquetalia’ unit of the Fuerzas Armadas Revolucionarias de Colombia (Farc) had been murdered in Venezuela. Vargas lent credence to media reports that Hernán Darío Velásquez (‘El Paisa’) had been killed by the guerrillas under his command. Media reports are now claiming that another of the Segunda Marquetalia’s leaders, Henry Castellanos Garzón (‘Romaña’), was killed alongside El Paisa. President Iván Duque suggested that these reports are accurate, but he did not directly mention Romaña.

Press reports of El Paisa’s death first broke on 5 December, citing unnamed intelligence officials who said that the commander had been killed in the Venezuelan border state of Apure. According to the most detailed of these reports, which was published in El Tiempo, El Paisa was murdered by his own guerrilla unit in an ambush that targeted the vehicle in which he was travelling.

• Intelligence source

The intelligence source cited by the Colombian national daily El Tiempo maintained that El Paisa was killed as a result of his increasingly authoritarian and erratic nature, which included repeatedly threatening to kill the guerrillas fighting under his command.

General Vargas’ statement on 7 December all but confirmed the reports, with the police commander saying that there is a “very, very, very high probability that he is dead due to criminal disputes inside the organisation”. Vargas did not comment on media reports that had emerged the same day claiming that Romaña had been killed alongside El Paisa. President Duque did allude to those claims, albeit without confirming their veracity, saying that “the fall of these symbols of terrorism, evil, and drug trafficking…is good news and demonstrates that criminals have no hiding place”.

If true, the murder of El Paisa and Romaña, both former members of the Farc’s Estado Mayor Central, may herald a splintering of Segunda Marquetalia, which has now been reduced to just one high-profile leader from the Farc’s old guard – Luciano Marín Arango (‘Iván Márquez’) – following the killing of Seuxis Paucias Hernández (‘Jesús Santrich’) in May [WR-21-20]. Since its formation in 2019, Segunda Marquetalia has developed a strong cross-border presence in Colombia’s northern department of Arauca and the neighbouring Venezuelan state of Apure.

Should the guerrilla unit splinter into separate factions, it could further complicate the security situation in these volatile regions, pitting former allies against each other over control of drug trafficking routes. Internecine conflict within Segunda Marquetalia could also strengthen the hand of the Ejército de Liberación Nacional (ELN) guerrilla group, which also maintains a strong presence on both sides of the Colombia-Venezuela border.           

Controversial anti-corruption bill advances

Colombia’s chamber of deputies approved a controversial anti-corruption bill on 7 December, which press associations warn would expose journalists to defamation charges for exposing corruption. The bill would mandate sentences of between 60 and 120 months in prison for “false accusations against public servants or their family”. There is currently no mention of public servants in the defamation laws in Colombia’s penal code, which mandates prison sentences of between 16 and 72 months.

Fundación para la Libertad de Prensa (FLIP), a press freedom NGO, has warned that the bill “violates basic guarantees of freedom of expression by seeking to impose disproportionate penalties” on journalists, and it argues that the “extraordinary legal protections for public servants” will damage transparency and the fight against corruption. The bill now passes to the senate.

The Argentine government announced new proposals on 6 December to reform the Consejo de las Magistratura, the key body within the judiciary that controls the hiring and firing of judges.

Argentina’s two main political forces, the Partido Justicialista (PJ, Peronists), currently part of the centre-left Frente de Todos (FdT) ruling coalition, and the centre-right parties in the Juntos por el Cambio (JxC) coalition, traditionally accuse each other of politicising the judiciary and of deploying ‘lawfare’ techniques, described as the launching and manipulation of court cases purely to achieve political objectives.

It is perhaps no accident that the last two heads of state, Mauricio Macri for JxC (2015-2019) and Cristina Fernández (2007-2015) for the Kirchnerista wing of the PJ, face several corruption cases which they claim are no more than political vendettas.

The Consejo de la Magistratura, the body that appoints and has the power to remove judges, is often at the centre of claims of political interference. That makes the current government’s latest reform proposal particularly interesting. Presidential spokeswoman Gabriela Cerruti said that the government was preparing a bill which would increase the size of the body from 13 to 17 members, diluting the influence of political appointees.

Under legislation dating back to 2006, when the PJ was in power, a majority of seven out of the body’s current 13 members could aptly be described as being political appointees: they are three senators and three deputies, together with one representative of the executive power. The remaining six members comprise three judges, two lawyers, and one academic, appointed through professional bodies.

According to Cerruti, the government is now proposing to widen the ‘non- politicals’ by adding another judge, two further lawyers, and another academic.  As a result, the non-political appointees would now have a majority, numbering 10, versus the seven ‘politicals’.

At least two factors may explain this move by the government. One is that it comes after the November midterm congressional elections, when the government lost its majority in the senate, as well as losing seats in the lower chamber. It is widely expected that if the administration wants to pass legislation in the new congress (which is due to be sworn in on 10 December) it will need to seek cross-party alliances. The proposal could, therefore, be intended as something of an olive branch to the centre-right opposition.

In fact, at least one member of JxC, Juan Manuel López, a deputy for the anti-corruption party Coalición Cívica (CC), has welcomed the initiative. López said that the recent court decision to acquit Fernández over money-laundering charges (the Los Sauces and Hotesur cases) showed pro-government political bias by the judges, adding that “there is a problem with the training, but also with the integrity of the judges”.

López said that he would be prepared to support the enlargement of the Consejo as suggested by the government. The CC deputy warned, however, that it might be difficult to build the necessary consensus behind the proposal in a deeply divided congress.

Another reading of the situation raises doubts over the sincerity of any government attempt to offer an olive branch to the opposition parties. In this account, government officials are primarily motivated by the fear that the 2006 legislation which dictates the current composition of the Consejo is about to be overturned as unconstitutional by the supreme court.

There have been persistent rumours that the country’s top court is close to resolving a four-year old challenge to the 2006 legislation (itself introduced by Fernández, who at the time was a PJ senator). If that is the case, preparing a new bill capable of attracting some cross-party support may be a tactically defensive political move, rather than a genuine commitment to seeking bipartisan consensus.

Fragmented congress?

The congressional arithmetic is problematic. The new congress due to be sworn in this week reflects opposition gains and some increased fragmentation after the midterm elections. Half of the lower chamber (127 out of 257 seats) and one third of the senate (24 out of 72 seats) were renewed in the elections. In the lower chamber, no coalition now holds a majority, for which a minimum of 129 seats are required. The ruling FdT holds 118 seats, while the opposition JxC has increased its share and now holds 116.

Almost as important as the distribution of seats between coalitions are the internal divisions within them. In the case of the FdT there are three main caucuses, known as bloques. They are, first, the nationalist/populist Kirchneristas, loyal to current Vice President Fernández and led by her son, Máximo Kirchner. In second place come the Albertistas, the generally more moderate supporters of President Alberto Fernández. The third main group is the Frente Renovador (FR) led by Sergio Massa. Massa has been confirmed as president of the lower chamber.

JxC, on the other hand, now has at least seven component bloques. The number has increased because deputies representing the Unión Cívica Radical (UCR), the second largest party in the coalition, have split into two rival groups. A total of 33 deputies have remained in the official UCR caucus, while 15, loyal to former economy minister Senator Martín Lousteau, have broken away to form a new group called Evolución.

Other JxC bloques include Macri’s Propuesta Republicana (PRO), the largest party in the coalition, with 50 seats, as well as those representing the CC and smaller groups. At the lower end of the scale, Ricardo López Murphy, an economist and former defence minister (1999-2001), forms a monobloque or caucus of one. One of the driving factors behind JxC fragmentation is that various of its leaders are jockeying for position with the 2023 presidential elections in mind.

In the 72-seat senate, the FdT loses its longstanding majority, since it has 35 seats. Here too JxC has increased its presence, to 31 seats.

Overall, the main challenge for the new congress will be whether a consensus can be formed around critical legislative initiatives. Among the most urgent are the approval of the 2022 budget, an agreement on a “a multi-year economic programme” that is supposed to help finalise critical negotiations with the International Monetary Fund (IMF). President Fernández promised in November that an economic plan would be submitted to congress this month, but as this issue went to press it had still not materialised.

Consejo’s composition

Luis María Cabral, a former president of the Consejo de las Magistratura, has welcomed the proposal to reform the body as offering a “more balanced” approach. Cabral argues, however, that the supreme court should also have a representative on the body. 

Public perception

In public opinion there are low levels of trust in the judiciary. There is also a sense that judges fall well short of their necessary standards of independence and impartiality.

With less than two weeks to go before the 19 December run-off vote that will determine Chile’s next president, the two candidates – José Antonio Kast from the far-right Partido Republicano (PLR) and Gabriel Boric from the left-wing Apruebo Dignidad coalition – are both attempting a balancing act: trying to attract more moderate voters, without losing their original supporters.

Chile’s rule banning the publication of opinion polls two weeks ahead of a vote means that the last surveys date from the first days of December. At the time, Boric had a relatively solid lead over Kast [WR-21-48], despite finishing second to him in the first round of the elections on 21 November. The last Cadem poll, released on 3 December, projects a 53%-47% result in favour of Boric; the poll gives Boric 40% of voting intentions to 35% for Kast, while 25% say they don’t know or won’t vote.

In a bid to attract some of these undecided voters, Kast unveiled an updated, and pared down, government programme on 7 December, which incorporates proposals from members of the more moderate right, such as the defeated candidate for the ruling Chile Podemos Más coalition, Sebastián Sichel. Kast’s ‘2.0 government programme’ lists as its five main elements: “Recover peace, order, and the law; recover the economy; guarantee a dignified life; tackle climate change and drought; and [give] priority to Chilean women.”

The last point, in particular, marks a departure from Kast’s earlier plan. His ultra-conservative views on social issues had earned him criticism; some of his more controversial proposals, included getting rid of the ministry for women and overturning the law on abortion (which is in any case only authorised in specific cases, such as rape, danger to the mother’s life, and foetal malformation). These have been dropped from the new programme. The emphasis on tackling climate change also marks a shift.

Boric, meanwhile, has also been reworking some of his proposals, specifically on the economy. As part of an attempt to reach a broad consensus, his campaign has worked with economic advisers of the defeated moderate left-wing candidates, Yasna Provoste and Marco Enríquez-Ominami.

After meeting representatives from the business lobby as well as micro, small and medium-sized enterprises (MSMEs), Boric presented his revised economic plan on 8 December and promised a more gradual approach to two of his key proposals, notably raising the minimum wage and reducing the length of the working day. His revised plan centres around three points: fiscal consolidation by stabilising public debt; reincorporating groups which have fallen behind in the labour market, such as young people and women; and economic recovery. He also promises to focus on green investments and prioritising support for MSMEs.  

Tax proposals

Ahead of Chile’s first presidential round, both Gabriel Boric and José Antonio Kast were criticised for presenting unrealistic economic plans. They have both adopted a more moderate position now, including in their opposing proposals on taxes. Kast, who promised to cut taxes, has now said that tax reductions will be gradual and depend on fiscal sustainability and economic growth. Boric, meanwhile, wants to increase the government’s tax revenue through a variety of levies, including mining royalties, a green tax, and through cracking down on tax evasion; but he has also pledged to make any of these changes gradual, as well as promising that he will not raise taxes on MSMEs.  

A victory for equality

On 7 December, Chile’s congress passed a marriage equality law, giving same-sex couples the same right to marriage as heterosexual couples. The bill, dating from 2017, was dusted off for consideration after President Sebastián Piñera unexpectedly announced his support for the legalisation of same-sex marriage in July. It was passed with 82 to 20 votes in the lower chamber and 21-8 in the senate and is expected to be promulgated imminently.

The law has been hailed as an important step on the path to equality and to recognising sexual and gender diversity. It also reflects a shift in the traditionally Catholic and socially conservative Chilean society. 

Brazil’s President Jair Bolsonaro has been widely condemned for his science-denying approach to the coronavirus (Covid-19) since the start of the pandemic in early 2020. The damaging consequences of his denialist discourse and attitude were extensively documented by a senate-led commission of parliamentary inquiry (CPI), which presented its findings in October [WR-21-42]. After the president’s rejection of lockdowns, his promotion of unproven remedies, and his scepticism regarding the vaccine, a new Covid-19 battlefront has opened between Bolsonaro and public health authorities, this time on the issue of vaccine passports.

Currently, anyone travelling to Brazil need only present a negative Covid-19 test taken within 72 hours of boarding their flight to enter the country (land borders remain largely closed). Anvisa, the federal healthcare regulator, has been pushing for the federal government to adopt stricter entry rules, particularly as international travel has started easing. On 25 November, Anvisa recommended that proof of vaccination against Covid-19 be required to enter Brazil by air or land, and that any unvaccinated travellers be required to quarantine.

The agency expressed concern that Brazil might become a favoured destination for unvaccinated tourists. “This is undesirable considering the risk that this group represents for the Brazilian population and for the SUS [national healthcare system],” Anvisa said. Domestically, vaccination rates are high and vaccine hesitancy very low. Almost 65% of the total population is fully vaccinated in Brazil, and official figures show the pandemic continuing on a positive downwards trend at a national level [WR-21-46]. The rolling seven-day average of daily deaths has fallen below 200 to the lowest point since April 2020.

The discovery of the omicron variant – which was named a variant of concern by the World Health Organization (WHO) just one day after Anvisa issued its recommendation on vaccine requirements – has added a sense of urgency to the debate. Brazil has several confirmed cases of the new variant, about which little is known, although preliminary research suggests it is more transmissible than other strains of Covid-19. Concerns over the new variant have led a number of state capitals to cancel official New Year’s Eve events and to tighten sanitary measures, for example maintaining the requirement to wear facemasks in outside spaces in São Paulo.  

Yet President Bolsonaro remains unmovable in his opposition to vaccine mandates, calling vaccine passports a “collar” that some are trying to impose on the Brazilian people. A day earlier, the federal government cancelled a meeting scheduled with Anvisa representatives that same day to discuss the possibility of requiring incoming travellers to present proof of Covid-19 vaccination. The cancellation of the meeting came shortly after a supreme court (STF) justice, Luís Roberto Barroso, gave the government 48 hours to explain its opposition to vaccine requirements.

Health Minister Marcelo Queiroga ended up announcing on 7 December that Brazil will require unvaccinated travellers to quarantine for five days upon arrival and then take a PCR test. But he stressed that the government rejects any kind of vaccine passport. “As the president has just said: sometimes it is better to lose your life than to lose your freedom,” said Queiroga, who is a cardiologist, paraphrasing Bolsonaro.

The issue is also turning into yet another source of friction with local governments, whom the STF ruled last year have the same power as the federal executive to implement Covid-related measures. In the last few months, over 200 Brazilian cities – of which at least 19 are state capitals – have implemented varying rules on vaccine requirements to access certain public spaces. On 5 December, Bolsonaro spoke of changing a 2020 law via executive decree to make the decision on vaccine passports the exclusive prerogative of the federal government. Such a move would likely prompt judicial challenges. São Paulo state governor João Doria said on 8 December that if the federal government fails to require proof of vaccination from international travellers, his state will enforce it from 15 December.    

Another investigation

President Bolsonaro’s denialist attitude to Covid-19 has made him the target of another investigation in the supreme court (STF). On 3 December, STF justice Alexandre de Moraes announced the launch of an investigation into the president’s spreading of misinformation on the coronavirus, responding to a recommendation made by the CPI in its concluding document. Moraes notably cited a comment made by Bolsonaro in a Facebook Live address in late October, in which he associated the Covid-19 vaccine with higher risk of Aids. The video was taken down by social media platforms, and the CPI recommended that Bolsonaro be banned from social media [WR-21-43] – a recommendation Moraes has now asked the attorney general to comment on.

Third-quarter growth figures released by Brazil’s national statistics institute (Ibge) on 2 December show that Latin America’s largest economy has gone into technical recession. Brazil looks set to enter 2022, an election year, plagued with sluggish growth, soaring inflation, and high unemployment.

Quarterly GDP shrank by 0.1% in the third quarter, after a 0.4% contraction in the second quarter on revised figures. In year-on-year terms, Brazil’s economy grew 4% in July-September 2021. The quarterly contraction was driven by an 8% decline in the agricultural sector. The industrial sector saw 0% variation (with a strong performance in construction compensating for the negative performance of other industrial activities, such as manufacturing and extraction). Services, which account for over 70% of Brazil’s economy, grew by 1.1%.

From a demand perspective, a decline in exports of goods and services, which fell by 9.8%, also underpinned the contraction in the third quarter (imports fell by 8.3%). Household consumption, however, expanded by 0.9%. Government spending grew by 0.8%.

Brazil’s overall recovery from the economic crisis caused by the coronavirus (Covid-19) pandemic has been stymied by soaring inflation. The consumer price index stood at 10.67% in October and is expected to close the year in double digits. The central bank (BCB) has responded with a cycle of aggressive rate hikes. The latest was enacted on 8 December, when the BCB’s monetary policy committee (Copom) agreed to increase the Selic, the benchmark interest rate, by 150 basis points to 9.25%. The Selic is now at its highest point in four years. 

Although it is starting to fall, unemployment remains stubbornly high, at 12.6% in the third quarter. Furthermore, Ibge figures show that the average income for employed Brazilians is declining: average monthly earnings were down 11.1% in the third quarter this year compared with a year earlier, reflecting both the erosion of purchasing power through inflation and the fact that lower-paid jobs are driving the slow recovery of the labour market. Other economic indicators add to the gloomy picture. Industrial production was down for the fifth consecutive month in October, while retail trade had dropped for the third consecutive month, back to March 2020 levels, when the pandemic first hit.

The government led by President Jair Bolsonaro tried to remain upbeat in the face of the third quarter GDP figures, blaming the negative agricultural performance on climatic factors outside of its control (namely a drought and frosts). Economy Minister Paulo Guedes stands by his refrain that Brazil’s economy is recovering in a V-shape. Yet private sector economists surveyed weekly by the BCB have cut growth forecasts to 4.71% this year and just 0.51% in 2022. Some private banks are already predicting an economic contraction next year, with concerns exacerbated by uncertainty over the government’s fiscal rigour. 

Reforms and benefits

The Brazilian congress promulgated part of a constitutional reform on 8 December which eases fiscal rules [WR-21-43] and frees up resources to fund the government’s new social programme, Auxílio Brasil. A lot of uncertainty surrounds the new benefit, which started being paid in November, due to pending legislation on the issue. Congress sought to resolve some of this uncertainty with the partial promulgation of the constitutional amendment known as the ‘PEC dos precatórios’, which will free up R$65bn (US$11.75bn) in next year’s budget. Some parts of the PEC, which also concerns the staggered repayment of court-mandated state debts or ‘precatórios’, have returned to the chamber after being modified in the senate.

The ‘Remain in Mexico’ policy, also known as the Migrant Protection Protocols (MPP), has just been renegotiated by the administrations of President Joe Biden in the US and Andrés Manuel López Obrador in Mexico. Ironically, neither of the two heads of state are especially enthusiastic over a procedure that has been deeply criticised by human rights groups as inhumane, but they may still find themselves stuck with it for some time.

‘Remain in Mexico’ essentially means that those seeking to enter the US across the Mexican land border, and who want to apply for political asylum, rather than being held in the US pending an asylum court hearing, are forced to stay in Mexico, often in squalid temporary shelters in cities with high crime rates and drug-trafficking activity, where they are at the mercy of extortionists, racketeers, and people-smugglers.

Introduced under the Trump administration, the aim of the programme was to limit the number of migrants entering the US. At the peak, approximately 70,000 people were in transitory accommodation in Mexico, waiting for their cases to be heard.

President Biden cancelled the programme in January 2021, on just his second day in office, seeking to send a clear signal about introducing a more humane migration policy, but ‘Remain in Mexico’ simply refused to die. The conservative states of Texas and Missouri initiated legal action to reinstate the protocols, and in August the Supreme Court upheld lower court decisions finding in their favour.

As a result of this ruling, the US government is required by law to make “good faith efforts” to reinstate the programme, although it may still, at a future date, cancel the programme so long as it can prove in court that such a decision is not “arbitrary and capricious”. In a press conference on 2 December, White House Press Secretary Jen Psaki stressed the reluctance of Biden to retain the programme, saying that he “continues to believe that the MPP has endemic flaws, imposed unjustifiable human costs, [and] pulled resources and personnel away from other priority efforts”.      

If Biden has been ultimately forced by a legal ruling to extend MPP, President López Obrador’s rationale is that he is responding to heavy diplomatic pressure. Trump threatened to apply punitive tariffs on Mexican exports to the US. Biden has been less confrontational and more diplomatic, but López Obrador knows that being helpful on MPP may earn concessions on other issues in bilateral relations.

Mexico has therefore given qualified support. The Mexican foreign ministry said it had given “temporary” approval to re-starting MPP and has asked the US to make changes on humanitarian grounds. According to US officials these include coordinating housing for asylum seekers to be located away from the more dangerous border areas and providing transport to attend court hearings.

There will also be efforts to speed up asylum requests, which at present take at least six months to process. The US also plans to offer coronavirus (Covid-19) vaccines to those requesting asylum.      

UNHCR responds

The United Nations Refugee Agency (UNHCR) issued a statement criticising the reinstatement of the Migrant Protection Protocols (MPP) and describing the humanitarian adjustments as insufficient. “UNHCR was never involved in supporting MPP and will not be supporting the reinstated policy,” the UNHCR said.  

Former US president Donald Trump was frequently in conflict with Mexico over what he saw as his mission to keep automobile industry jobs within the US, a key part of his ‘Make America Great Again’ agenda. Now, there is a potential for conflict with the administration of President Joe Biden and his ‘Build back Better’ programme. This time the battle is about electric vehicles (EVs).

On 2 December the Mexican government announced that it was considering legal action against the US, over provisions in President Biden’s ‘Build Back Better’ Act which would give subsidies of up to US$12,500 per vehicle for US EV buyers, providing that the vehicles are made in the US by plants where the labour force is unionised.

Mexico’s economy minister, Tatiana Clouthier, said that the arrangement would violate non-discrimination clauses in the United States-Mexico-Canada Agreement (USMCA). She argued that it would hurt potential Mexican EV exports and unfairly protect US-based EV manufacturers.

Clouthier went on to suggest that Mexico might consider trade reprisals (a very Trumpian tactic) or, alternatively, make a case before the World Trade Organization (WTO). Clouthier also argued that giving the US manufacturers’ preferential treatment would accentuate irregular migration flows in North America.

Biden’s bill is expected to come up for a vote in the US senate in mid-December. By attacking it, however, Mexico leaves itself open to the charge of applying double standards: Mexico’s proposed power industry reform bill aims to provide preferential treatment for the state-owned electricity company Comisión Federal de Electricidad (CFE) at the expense of renewable power generators.

• Energy reform

Mexico’s proposed power-industry reform bill would give the state-owned electricity company CFE a dominant market share (“at least” 54%) and seeks to reduce supply unilaterally from US and other foreign-owned, Mexico-based, renewable power generators, as well as banning self-generation by large companies. As such it can also be described as discriminatory.

In November the US ambassador to Mexico, Ken Salazar, said Washington had “serious concerns” about the Mexican electricity industry reform. It is possible, however, that the two sides might ultimately negotiate some kind of compromise or quid-pro-quo that links the two cases.

MEXICO | Inflation. Mexico’s annual inflation increased to its highest level in November since January 2001, rising 7.37% from a year earlier, according to the national statistics institute (Inegi). The consumer price index (CPI) for the month of November was up by as much as 1.14% on the previous month compared with just 0.08% in the same month last year, when annual inflation stood at just 3.33%.

Annual inflation is now more than twice the target figure of 3% set by the central bank Banco de México (Banxico). As such it is highly likely that when Banxico meets for the final monetary policy meeting of the year on 16 December it will raise interest rates for the fifth consecutive time in a bid to contain inflation.

The cost of agricultural products soared by 4.48% in November compared with the previous month, reaching 14.36% on an annualised basis, while energy prices were up by 2.64% for the month (12.61% annually). Underlying inflation, which excludes volatile food and energy price increases, was up by a lower 0.37% for November, but was still 5.67% annually.

The latest survey by the centre for research and policy studies (CIEP) of the Universidad de Costa Rica (UCR) ahead of the 6 February general elections shows that indecision is growing among voters. The think tank links this to concerns about political corruption and the ongoing impact of the ‘Cochinilla’ public works scandal which broke in June [WR-21-25], as well as more recent corruption cases, such as ‘Diamante’, which broke last month and implicates municipal officials.

Released on 24 November, the CIEP survey, which interviewed 900 people and had a 3.2% error margin, showed that those who described themselves as ‘undecided’ had increased to 53.0% in November, up from 48.0% the previous month. It also showed that no presidential candidate garnered 15% of voting intentions and just three candidates managed over 5% support.

The continued frontrunner remains the candidate for the main opposition right-of-centre Partido Liberación Nacional (PLN), former president José María Figueres (PLN, 1994-1998), although his support has slumped to 13.0% down from 19% in October. In second place on 10% is Lineth Saborío, a former vice president (PLN, 2002-2006) who now belongs to the right-of-centre opposition Partido Unidad Social Cristiana (PUSC), up from 8%. The 2014 presidential candidate José María Villalta, of the leftist opposition Frente Amplio (FA), is on 6%, up by two percentage points. Welmer Ramos, the candidate for the ruling centre-left Partido Acción Ciudadana (PAC), is on just 1%, down from 2% in October.

The survey concludes that it is ‘highly unlikely’ that any candidate will secure 40% of the support necessary to avoid a presidential second-round run-off in February 2022. However, commitment to voting has not changed, with 79% of respondents indicating that they plan to cast their ballots.

One notable finding from the survey was that corruption has once again become the main voter concern, and was cited as such by 27.3% of respondents, ahead of unemployment (20.1%), which previously topped the list of voter concerns, and the cost of living (17.3%).

CIEP links this change to recent corruption scandals, such as the cases of ‘Cochinilla’, which drew parallels with the 2017 Cementazo scandal (involving Sinocem Costa Rica, the Costa Rican subsidiary of a Chinese cement exporter, and top public officials). The so-called ‘Diamante’ scandal made headlines on 15 November. Six mayors (four of them aligned with the PLN) were arrested for allegedly participating in a corruption scheme involving public infrastructure contracts.

As regards the Diamante case, Wálter Espinoza, the director of Costa Rica’s judicial investigation agency (OIJ), told the press at the time that 83 raids were carried out across different municipalities to investigate alleged crimes of bribery, influence peddling and corruption following an investigation which began in April 2019 and lasted until August 2021. Espinoza said that the case involves Constructora Meco SA, a major construction firm which was also implicated in the Cochinilla case.

Those arrested on this occasion include long-serving mayors and well-known figures including San José mayor and former PLN presidential candidate Johnny Araya, and three other PLN members: Alfredo Córdoba Soro (San Carlos municipality, Alajuela province), Alberto Cole de León (Osa, Puntarenas), and Humberto Soto Herrera (Alajuela, Alajuela). Also arrested were the mayor of Cartago, in the eponymous province, Mario Redondo Poveda (of the small Partido Alianza Demócrata Cristiana) and the mayor of Escazú, San José, Arnoldo Barahona, of the Partido Nueva Generación (PNG).

According to the CIEP poll, 57.6% of respondents said that they were aware of the ‘Diamante’ case, while 41.2% said that it affected their voting preferences ‘a lot’. The other recent case noted by the CIEP was that of the so-called ‘Azteca’ scandal, which made headlines on 9 November amid reports that the OIJ had carried out 37 raids and arrested 27 individuals for the alleged crimes of narcotrafficking, money laundering, illicit enrichment, and corruption.

Those arrested included 14 public officials from the Instituto Costarricense de Acueductos y Alcantarillados (AyA), the institute of aqueducts and sewers, who, according to local press reports, allegedly colluded with a criminal gang in laundering at least ¢678m (US$1m) using two construction companies that were granted 17 public work contracts in the period 2020-2021. According to the CIEP poll, 78% of respondents expressed concern that narco-trafficking money could affect democracy.

Pandemic spending

On 25 November, Costa Rica’s health ministry and the Pan-American Health Organisation (PAHO) presented a study which showed that Costa Rica had assigned ¢170.6bn (US$279m) for health spending in relation to the coronavirus (Covid-19) pandemic in 2020, equivalent to 0.5% of Costa Rica’s GDP. According to the study, most of this (US$184m) went to the national social security institute (CCSS), followed by the national emergency commission (US$54m), while the health ministry received US$39m.

Days after Xiomara Castro’s remarkable victory for the left-wing opposition Partido Libertad y Refundación (Libre) in the 28 November general elections [WR-21-48], her campaign team has begun meeting with various sectors, including the private sector lobby Consejo Hondureño de la Empresa Privada (Cohep) and a government mission led by the general coordination minister Carlos Madero and finance minister Luis Fernando, among others. Amid the flurry of meetings, members of Castro’s team have begun to give hints as to economic priorities upon taking office in January to address the dire economic situation which the new government will inherit [WR-21-37].

Castro’s transition team includes Hugo Noé Pino, a former finance minister under Castro’s husband and Libre founder, the ejected former president Manuel Zelaya (Partido Liberal [PL], 2006-2009). A well-respected economist and research professor at the Universidad Tecnológica Centroamericana (Unitec), a private university, Noé Pino also served as central bank president under former president Carlos Roberto Reina (PL, 1994-1998). Noé Pino also has diplomatic experience having served as an ambassador to the United Nations (UN) (1998-1999) and to the US (1999-2002).

Other members of the transition team include Marcio Sierra, also a former adviser to Zelaya; economist Rebeca Santos; Castro’s son and campaign manager Héctor Zelaya; and Pedro Barquero, the campaign chief for the Partido Salvador de Honduras (PSH), the party of Castro’s running mate and 2017 presidential candidate, Salvador Nasralla.

In an interview with the national daily El Heraldo that was published on 2 December, Noé Pino outlined some key economic priorities for the new government which will inherit a public debt burden approaching 60% of GDP, up from 48.7% in 2019. These include the need to address the crisis facing the state electricity company Empresa Nacional de Energía Eléctrica (ENEE), which runs a large budget deficit and continues to impact heavily on government finances.

This is in line with recommendations made by the International Monetary Fund (IMF) in a report published in September 2021 in the context of the fourth review under the IMF’s Stand-By Arrangement (SBA) and Arrangement Under the Stand-By Credit Facility for Honduras. The IMF report highlighted as key for fiscal sustainability and improving the business environment, the need to “expeditiously improve governance in the ENEE and strengthen its financial situation”.

• ENEE

According to the IMF report published in September, continued coronavirus (Covid-19) pandemic-related liquidity shortages at ENEE, exacerbated by storms Eta and Iota which hit Honduras in November 2020, have resulted in the accumulation of arrears to generators of about L4.4bn (US$182m - some 0.7% of GDP).

Yet members of Castro’s team have hinted that Libre is intending to backtrack on one of its headline policies, that of establishing diplomatic and trade relations with mainland China, and severing ties with Taiwan, to address Honduras’s debt. This would have seen Honduras following in the footsteps of Costa Rica, El Salvador, and Panama in Central America, as well as the Dominican Republic, in recent years in making the switch.

In an interview with newswire Reuters published on 2 December, Nasralla said that any relations with China had to be weighed against ties with the US. When asked if Honduras would establish relations with China, Nasralla said “no”, adding that “there are no relations with China, relations continue with Taiwan”. Nasralla went on to underline that: “Our trade ally, our close ally, our historical ally is the US. We don’t want to fight with the US, the US is our main trade ally.”

The US remains Honduras’ most important economic partner with bilateral goods trade between the two nations totalling US$8.1bn in 2020, according to the US State Department. Meanwhile, bilateral, regional, and humanitarian assistance through the US State Department and US Agency for International Development (USAID) averaged US$165m per year (FYs 2019-2020). Honduras is also strategically important to the US in terms of security as the host of the US Joint Task Force Bravo air base, which was established in 1984 and is the longest-standing task force in the US military.

Another senior politician aligned with Castro, who spoke on the condition of anonymity, also told Reuters that there would be “no ramping up of China relations as the ‘conditions’ for that do not exist”, while Reuters cited Noé Pino as saying that the decision to establish diplomatic ties with China was “not final” and Castro’s team was “still in consultation with business, trade unions, peasant, and social organisations”.

Uncertainty over congressional results

The latest results presented on 8 December by the national electoral council (CNE) showed that, with 98.83% of the ballots counted, Xiomara Castro had won a decisive 50.63% of the vote, to 36.43% for the ruling Partido Nacional (PN) candidate, Tegucigalpa mayor Nasry Asfura, on a record turnout of 68.55%.

However, while there is little doubt regarding Castro’s victory, uncertainty continues to shroud the result of the 28 November legislative elections after Honduras’s attorney general’s office announced on 3 December that it had opened an official investigation into fraud allegations related to the election of national deputies.

The announcement by the attorney general’s specialised unit against electoral crimes (UECDE) followed tweets by two of the three members of the CNE, Ana Paola Hall and Rixi Moncada, that ballots for the legislative vote had been tampered with.

One of the complaints is against the minister for the presidency, Ebal Díaz, who is accused of tampering with ballots to benefit the PN. He has denied the claims.

The final results of the congressional elections are crucial to governability for Castro’s incoming administration.

Congress composition

Preliminary results suggest Libre will win 51 seats in the new 128-seat congress, with an additional 14 seats for the allied PSH, giving the incoming government 65 seats and the narrowest of majorities. The outgoing PN is projected to win 40 seats, down by 21 on its current total. A two-thirds majority of 86 would require striking a deal with the PL, which is poised to win 21 seats.

The re-run of state elections in the Venezuelan state of Barinas is looking increasingly chaotic. After a narrow opposition victory in the 21 November elections the result in Barinas was disallowed by the government-controlled supreme Court (TSJ). Preparations are continuing for the re-run, scheduled for 9 January.

The ruling Partido Socialista Unido de Venezuela (PSUV) has submitted a new candidate, Jorge Arreaza, who has stepped down from the foreign ministry to run for the governorship. Barinas was the birthplace of the Bolivarian revolutionary hero, former president Hugo Chávez (1999-2013), and the government wants to maintain that symbolic Chávez family link: Arreaza is a former son-in-law of the late president, and a close ally of incumbent president Nicolás Maduro.

After the late disqualification of opposition candidate Freddy Superlano in November for unspecified violations, the opposition first sought to register his wife, but she too was rejected by the electoral authorities. It has eventually been settled for Sergio Garrido, who will represent the Mesa de Unidad Democrática (MUD).

Allegations of dirty tricks are rampant. Arreaza has been quickly registered as a candidate despite never living in Barinas, a registration requirement. ‘Spoiler’ candidates have emerged to split the opposition vote (there are now seven candidates in total). They include Adolfo Superlano for a government linked pseudo-opposition party calling itself MIN-Unidad.

Although not related to Freddy Superlano, who can be described as the genuine opposition candidate in the first poll, Adolfo’s surname and electoral symbols appear designed to confuse voters in the re-run elections. It was Adolfo’s complaint that led to the suspension of the 21 November polls. In the words of the Caracas Chronicles website, “the parallel government-leaning opposition appointed a parallel Superlano to run for the Barinas governorship”. 

Venezuela Súmate, an NGO, has accused Maduro of using official state media to campaign in favour of Arreaza, in violation of both the constitution and the electoral law. PSUV leader Diosdado Cabello has stepped up pressure on the national electoral council (CNE), one of the few official bodies on which the opposition has some representation, threatening to sue its leader, Roberto Picón, and claiming that he was “in the pay” of opposition leader Henrique Capriles Radonski. 

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Brazil’s President Jair Bolsonaro on vaccine mandates.