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LatinNews Daily - 06 January 2022

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Main Briefing

On 5 January the president of Venezuela’s national assembly, Jorge Rodríguez, conditioned any resumption of dialogue with the opposition on various steep demands. 

Analysis:

Rodríguez’s demands – that the US release Alex Saab, an alleged money launderer for President Nicolás Maduro’s government, and that the opposition accepts criminal wrongdoing over its management of Venezuela’s seized foreign assets – are extremely unlikely to be met. In some ways, the government’s need for dialogue has subsided. Venezuela’s economy is showing small signs of recovery after years of catastrophic decline, reducing the urgency to lift sanctions; meanwhile, the opposition’s decision to participate in November’s regional elections, which saw gains for the ruling Partido Socialista Unido de Venezuela (PSUV), has enabled Maduro to present the party’s tight grip over the country’s institutions as legitimate.

  • The Maduro administration had participated in three rounds of dialogue in Mexico with the opposition between August and September, in which the government sought the lifting of international sanctions and the opposition pushed for democratic reforms. These talks were suspended by the government on 16 October in protest at the extradition from Cape Verde to the US of Saab, who the Maduro administration claims was a diplomatic envoy to the dialogue process.
  • Opposition leader Juan Guaidó yesterday reaffirmed the opposition’s willingness to “immediately” resume the negotiations with the aim of striking an “integral agreement” to deliver “free and fair elections.” Such an agreement, he said, would also “ensure the necessary guarantees for all Venezuelans, including the armed forces and the PSUV.”
  • Guaidó also offered something of an olive branch to the Maduro administration, saying that he will support an investigation into the management of Venezuela’s overseas foreign assets that are controlled by the opposition. The government has accused the opposition of embezzling these funds, particularly since the Colombia-based Venezuelan fertiliser company Monómeros – run by the opposition since 2019 due to Colombia’s recognition of Guaidó as Venezuela’s legitimate president – was placed under administration by Colombia’s business regulator (SSC) in September amid allegations of financial mismanagement.
  • Rodríguez, who headed the government delegation in the negotiations, yesterday seemed to pour cold water on hopes for a resumption of dialogue. He conditioned any future talks on the release of the “kidnapped diplomat” Saab, who awaits trial in the US for alleged conspiracy to commit money laundering. Rodríguez also demanded that the opposition “stop stealing assets,” highlighting Monómeros, Citgo (the US subsidiary of state oil company Pdvsa), and the Venezuelan gold reserves in the Bank of England, over which Guaidó and the Maduro administration are locked in a legal dispute. “If they want dialogue they have to first recognise that they made a grave error and committed crimes against the republic,” Rodríguez said.
  • Foreign Minister Félix Plasencia yesterday slammed the US State Department’s 4 January announcement that it continues to recognise Guaidó as Venezuela’s interim president. Plasencia accused the US of “using a statement to try and legitimise the operations of a criminal group that is sadly famous for its role in the theft and squandering of the resources of the Venezuelan people that are currently hijacked abroad.” He called on President Joe Biden’s administration to agree to direct negotiations with the Maduro government and stop “continuing the financial, diplomatic and political persecution” he said had been launched by Biden’s predecessor, Donald Trump (2017-2021).

Looking Ahead: Should the government stand by its decision to condition renewed dialogue on Saab’s release, it will have effectively ruled out any prospect for a resumption of negotiations in the coming months. No date has yet been set for Saab’s trial.

Andean

* Colombia’s national statistics department (Dane) has released the latest figures for the consumer price index (IPC), showing that inflation increased by 0.73% in December compared to the previous month. In year-on-year terms, inflation was up 5.62% on December 2020. Dane stated that inflation in December was principally driven by price increases for food and non-alcoholic drinks (+17.23% year-on-year) and restaurants and hotels (+8.83%). The two categories that saw annual deflation in December were information and communication (-12.1%) and clothing and shoes (-2.6%). The 5.62% annual inflation rate was the highest in Colombia since 2016, and was significantly above the central bank (BCR)’s target rate of 3%.

Brazil

On 5 January, Márcio França, a former governor of the Brazilian state of São Paulo (2018-2019), denounced a police investigation against him for alleged corruption as political persecution.  

Analysis:

França, who was elected vice-president of São Paulo state in 2014 but took on the top job for nine months after Geraldo Alckmin stepped down to run in the 2018 presidential election, is expected to run for the São Paulo governorship in this October’s general election. He represents the centre-left Partido Socialista Brasileiro (PSB). If the corruption allegations and police investigation go any further, they could damage his electoral chances and shift the prospects for the São Paulo gubernatorial race. 

  • Several properties linked to França were searched during an operation by São Paulo’s civil police yesterday, as part of a wider investigation into suspected corruption in São Paulo’s health sector. França is suspected of being implicated in the criminal scheme, through which public funds were embezzled through fraudulent contracts in the public health sector.
  • The politician denounced the police operation as a political one on Twitter, directing veiled criticism at the current gubernatorial administration led by João Doria. “The 2022 elections have started. First political operation,” França wrote, adding that it was “a political operation and not a police one. It is, of course, of a politico-electoral nature”, and denying any connection to the other individuals and companies targeted in the investigation.
  • In a Datafolha poll from mid-December, França appears third in voting intentions with 13%, behind Alckmin (28%) and former São Paulo mayor Fernando Haddad (2013-2017) from the left-wing Partido dos Trabalhadores (PT) on 19%. However, neither Alckmin’s nor Haddad’s candidacy is guaranteed, which could leave França at the head of the race for the governorship of Brazil’s largest state.  
  • Many political figures came out in support of França yesterday, including Alckmin, who publicly defended his former running mate’s integrity, and former president Lula da Silva (2003-2011), who leads the polls for the presidential race. 

Looking Ahead: There is speculation that Alckmin may be joining the PSB to run as Lula’s vice-presidential candidate in October, an alliance which would increase França’s chances of winning the São Paulo race – if his reputation has not taken too much of a hit from the corruption allegations.

* After the Brazilian city of Rio de Janeiro announced that street carnival celebrations would not be permitted this year over concerns with the spread of the coronavirus (Covid-19), notably the omicron variant of the virus, a number of other cities have cancelled part or all of the culturally and economically significant event. The municipalities of Maceió (Alagoas state), Recife, and Olinda (both Pernambuco state) all announced on 5 January the cancellation of official carnival events, which would have been held in the last week of February and first of March. In Olinda, the mayor Lupércio Carlos do Nascimento announced that financial aid would be put in place to compensate artists and street sellers whose livelihoods depend upon the annual event. In São Paulo, where authorities have yet to make a decision about whether to hold carnival celebrations and under which format, a group representing 250 street parades (‘blocos’) has announced they will not be participating due to public health concerns. Salvador in Bahia state, one of the main carnival destinations after Rio, had earlier confirmed the cancellation of its carnival programme.

Central America & Caribbean

On 5 January Cuba’s representative to the United Nations (UN), Juan Antonio Quintanilla, rejected a tweet from UN Special Rapporteur on Human Rights Defenders Mary Lawlor condemning the expulsion of two journalists from Cuba.

Analysis:

The ejection of two journalists – Esteban Rodríguez and Héctor Luis Valdés – is creating new problems for the Partido Comunista de Cuba (PCC) government which has faced continued international condemnation and sanctions over its crackdown on dissidents following the unprecedented July 2021 protests over economic, health and political grievances and ahead of planned protests for November 2021, which it thwarted.

  • Quintanilla tweeted “she [Lawlor] doesn’t know Cuba; our citizens are not expelled from the country, nor persecuted” and went on to accuse her of replicating “anti-Cuban campaigns”.
  • The two journalists, who work for ADN Cuba, an independent audio-visual media outlet, are both members of the Movimiento San Isidro (MSI) that comprises Cuban artists, journalists, and academics demanding freedom of expression.
  • Valdés told the media that he and Rodríguez, who had been held in pre-trial detention for eight months, had fled Cuba on 4 January and arrived at El Salvador’s main airport with the intention of boarding a flight to Nicaragua, but were then told that the Nicaraguan authorities prohibited their entry. Yesterday El Salvador’s migration authority tweeted that the two had been admitted to El Salvador where they are receiving “humanitarian assistance while their migratory situation is resolved”.
  • As well as the response from Lawlor, their situation drew attention from the US embassy in Havana which tweeted concern that they had been forced into exile, adding “This is another method of harassing journalists”. Yesterday José Miguel Vivanco, the Americas director at US-based NGO Human Rights Watch, asked the governments of the region to offer asylum to the two journalists, saying they had been persecuted and expelled by Cuba.

Looking Ahead: The renewed focus on press freedom in Cuba, which also drew concern following the approval of a new cybersecurity law in August, comes as the government is already under pressure over human rights; most recently on 1 January US Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols called on the government to “immediately release all those convicted for peaceful protest” noting that over 600 political prisoners are still behind bars.

* Panama’s Vice President José Gabriel Carrizo has said that the government led by President Laurentino Cortizo assigned US$3.54bn in total to go on its response to the coronavirus (Covid-19) pandemic in 2020 and 2021. Of the total, he said that US$2.1bn corresponded to financing the Plan Panamá Solidario programme, which provides assistance to those affected by the pandemic in the form of food bags and money transfers, as well as “other activities”.

Mexico

On 5 January, Mexican judicial sources confirmed to national media that the federal attorney general’s office (FGR) had requested a prison sentence of up to 39 years for Emilio Lozoya, the former director of Mexico’s state-oil company (Pemex) (2012-2016) for his alleged role in the Odebrecht corruption scandal.   

Analysis:  

The case against Lozoya, who stands accused of receiving bribes of at least US$10m from Brazilian engineering firm Odebrecht, has been dragging its heels for the past year-and-a-half after Lozoya struck a plea-bargain deal with the FGR. The arrest and now charging of Lozoya suggests the evidence he promised of the scheme’s beneficiaries has not materialised. The development is good news for President Andrés Manual López Obrador’s government, which had been criticised for lack of progress in the case.  

  • According to the sources, who asked the Mexican press for anonymity, the FGR formally charged Lozoya with money laundering, criminal association and bribery on 3 January. The FGR also requested a sentence of up to 25 years for Lozoya’s mother, Gilda Margarita Austin, for her alleged involvement in the scheme.  
  • Lozoya has been named for receiving US$10.5m as the main link between Odebrecht and corrupt officials in the Mexican government led by Enrique Peña Nieto (2012-2018). He was extradited to Mexico from Spain in July 2020 but then struck the plea-bargain deal, making accusations against officials including former presidents, presidential candidates and legislators. 
  • Momentum in the case changed when Lozoya was arrested on 3 November after he was seen dining lavishly in an upscale restaurant in downtown Mexico City (CDMX), triggering outrage among Mexicans over the perceived impunity.  
  • Lozoya had offered testimony that Peña Nieto ordered Odebrecht money be used to fund the centrist Partido Revolucionario Institucional (PRI) election campaign in 2012 and to bribe opposition congress members to support his electricity reform in 2013. The hoped-for testimony could have been political gold for López Obrador, who has oft accused his predecessors of corruption and is trying to reverse Peña Nieto’s energy reform.  

Looking Ahead: According to reports, the indictment against Lozoya was presented to José Artemio Zúñiga Mendoza, the judge at the Reclusorio Norte prison where Lozoya is being held. Zúñiga must notify the defence in the next ten days about the opening of the trial. This latest development suggests that progress is finally being made in the high-profile case.   

* Mexico’s national social security institute (IMSS) has released a new report which shows that 846,416 jobs were created in the formal sector in 2021, a 4.3% increase on the previous year. This is the biggest yearly increase the IMSS has ever recorded. According to the same report, as of 31 December 2021, the IMSS had registered a total of 20.6m jobs – a decrease of 1.5% on the previous month. Despite this, the number of jobs exceeds that observed before the start of the coronavirus (Covid-19) pandemic in March 2020. 

Southern Cone

On 5 January, after an 18-hour session and nine voting rounds, Chile’s 155-member constituent convention (CC) elected María Elisa Quinteros as its new president; she will lead its effort to draft a new constitution by July.

Analysis:

The CC was elected last year and has been given 12 months (running to 5 July) to complete a new constitutional draft, which is to be submitted to a referendum at some point in the second half of this year. For the first six months it was led by Elisa Loncón, a Mapuche academic and activist. The election of a new leader at the halfway point had always been expected.

  • Choosing a successor to Loncón proved more complicated than anticipated. The choice required a simple majority - 78 votes - but with a fragmented convention and many independents, achieving this threshold took a big effort. A slow, manual voting system did not help.
  • One of the initial favourites to win the CC presidency, microbiologist Cristina Dorador, a member of the Frente Amplio left-wing coalition that is loyal to president-elect Gabriel Boric, peaked in the sixth voting round, only six votes short of the 78 required. But as her vote count dwindled in subsequent rounds, she withdrew to break the logjam.
  • Quinteros, an epidemiologist and public health expert, achieved the necessary 78 votes on the ninth round. She is a member of an independent block within the CC. Benito Baranda, a member of the Independientes No Neutrales block, said it was important that the CC leadership should be from coalitions other than those supporting the president-elect to maintain a necessary distance between the executive and constituent powers.

Looking Ahead: Quinteros and her vice-president (whose election was still pending at the time of writing) will face a big political challenge this year, since drafting each of the articles of the new constitution will require a two-thirds majority, or 104 votes. While the largest groups in the CC represent the centre, the left, and the independents, to achieve the necessary consensus, she will need to build bridges with conservative groups.

* Uruguay’s national statistics institute (INE) has released the latest figures on the consumer price index (IPC), which show that the country registered monthly inflation of -0.10% in December. This brings annual inflation in the 12 months to 7.96%, outside of the 3%-7% target range set by the central bank (BCU).

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