LatinNews Daily - 14 March 2022

Preliminary results from Colombia’s 13 March legislative elections point to a fragmented congress that will pose difficulties for the three presidential candidates that won primaries on the same day ahead of the 29 May presidential first round.

Analysis:

The preliminary legislative results pointed to a major shift, with the unpopularity of the ruling right-wing Centro Democrático (CD) costing it dearly. The leftist Pacto Histórico por Colombia (Pacto) coalition made significant gains, but not enough to grant Gustavo Petro, who won the presidential primary elections for Pacto, free reign over congress if his current dominance in the polls leads him to the presidency. Instead, centrist parties look set to exercise significant influence under the next president when the new congress takes up its seats on 20 July, with the potential to restrain radical moves towards either the left or right.

• With 99.41% of the legislative vote counted, preliminary results from Colombia’s national civil registry show that in the 102-member senate, left-of-centre parties are set to hold 31 seats, with Pacto on an unprecedented 16 and traditional centre-left Partido Liberal (PL) party on 15 seats.
• Right-wing parties will however remain the dominant force in the senate, winning a provisional 45 seats between them, headed by the Partido Conservador (PC) (16), making it the joint largest force in the senate alongside Pacto. The right’s success came despite a decline in support for CD, which went from being the largest legislative force with 19 seats, to the fourth-largest force with 14 senators.
• In the lower chamber which comprises 165 seats plus 16 new congressional representatives for so-called “peace” seats (special transitory peace districts, CITREP), PL is leading the provisional vote with 32 seats, followed by Pacto and the PC, both on 25. CD came in with 16 seats – half the number it won in the 2018 election.
• Centrist parties are therefore likely to play an outsized role in coalition negotiations following the presidential election, with centrist parties set to take 24 seats in the senate and 29 in the lower chamber. The PL, whilst nominally a centre-left party, is also likely to act as a restraining force if Petro or a right-wing candidate wins the presidency.
• Meanwhile the primary elections offered few surprises, nominating the favourites for the three main presidential coalitions. As well as Petro (Pacto), Federico Gutiérrez won the right-wing Equipo por Colombia ticket, and Sergio Fajardo the centrist Coalición Centro Esperanza.
• A current senator for the left-wing Colombia Humana and the frontrunner in all polls for the presidential first round, Petro decisively won the Pacto primary with 80.51% of the vote.
• Former Medellín mayor Gutiérrez (2016-2019) also won convincingly in the Equipo por Colombia primary, taking 54.18% of the vote and easily surpassing his nearest rival, Álex Char, who took 17.72%.
• Fajardo, a former mayor of Medellín (2004-2008) and governor of Antioquia department (2012-2016), won less decisively in the Centro Esperanza coalition primary. He took 33.49% of the vote, with his closest rival, Juan Manuel Galán (Nuevo Liberalismo) receiving 22.55%.

Looking Ahead: Petro is the only primary winner unlikely to face fragmentation in his core voter bloc in the presidential first round. Gutiérrez is set to face competition for the right-wing vote from Óscar Iván Zuluaga, the CD candidate who in January announced that he would not be joining the right-wing coalition, and from the populist Rodolfo Hernández, who also did not enter the primary and frequently beats Gutiérrez in the polls. Fajardo may face a similar problem in the centre, given the withdrawal from the centrist primary of Íngrid Betancourt (Partido Oxígeno Verde).

* Ecuador’s state-owned oil company, Petroecuador, has announced that it is seeking US$12bn in investments to fund its planned doubling of oil production by 2026. Petroecuador’s CEO, Ítalo Cedeño, said that oil production, which is currently at around 400,000 barrels per day (bpd), is expected to reach 495,000 bpd by the end of 2022, but that some 45bn barrels of oil equivalent remain in the ground. Cedeño said that the company is seeking investments in eight projects relating to exploration and production, refining, and transport, in order to exploit those reserves.

On 11 March, Brazil’s Instituto Nacional de Pesquisas Espaciais (Inpe), a government body, released preliminary figures showing that Amazon deforestation soared to a new record in February. 

Analysis:

The February figures follow on from record deforestation levels in January also. Deforestation levels are usually low at this time of year, and while the latest monthly figures remain a far cry from the rates of deforestation observed in the months of July and August, at the peak of the Amazon fire season, the fact that they are rising sets alarm bells ringing. Deforestation has already soared under President Jair Bolsonaro, and recent years have seen a pattern of deforestation increasing in election years. Bolsonaro is expected to seek re-election in October.  

• The Inpe’s deforestation alert system (Deter), which gives a preliminary monthly estimate of deforestation, found that 198.67km² of Amazon forest were cleared in February. This is a 62% increase on February 2021 deforestation levels and represents the highest levels for that month since the current data series began in 2015/2016. 
• Combined, Amazon deforestation over the months of January and February this year has tripled compared with January-February 2021. Deforestation reached a 10-year high last year. 
• These figures come as scientists are warning that the Amazon is reaching a tipping point – where the forest dies off and it will start emitting more carbon than it can absorb – on the one hand, and as the Bolsonaro government is pushing for the approval of a package of environmentally damaging bills, on the other. 
• Environmentalists warn that these bills, against which civil society protested in Brasília last week, would doom efforts to control deforestation even if Bolsonaro is voted out at the election in October and a subsequent government seeks to reverse his assault on the environment.  

Looking Ahead: Bolsonaro notably continues to push for the approval of PL 191, a bill which would open up indigenous territories to commercial mining and is ready to be voted upon in the chamber of deputies, arguing that it would help Brazil resolve its current dependency on fertiliser imports. The bill could be tabled for a vote in April. 

* Brazil’s national statistics institute (Ibge) has released the latest figures for inflation, which show that the consumer price index (IPCA) increased 1.01% in February, following on from 0.54% inflation in January. This is the highest inflation figure for the month of February in Brazil since 2015. Inflation in the 12 months to February stands at 10.54%. A 5.61% increase in prices in the education category, with the start of the academic year, and 1.28% inflation in the food & drink category underpinned February inflation, although all categories saw an increase in prices. February inflation was barely impacted by the war between Russia and Ukraine, the effects of which are expected to further pressure inflation in coming months, notably due to rising fuel prices and uncertainty surrounding the agricultural sector.

On 11 March a Nicaraguan judge convicted Cristiana Chamorro, a potential November 2021 presidential contender, of money laundering and other crimes.

Analysis:

Arrested in June 2021, Chamorro, who is the daughter of former president Violeta Chamorro (1990-1997), was the favourite to beat President Daniel Ortega in the election which produced a victory for Ortega but was widely condemned as a ‘sham’. She was the first to be detained in the crackdown targeting opposition leaders ahead of the vote and is the last of the seven presidential pre-candidates to be convicted. Her conviction will exacerbate existing international criticism of the Ortega government over the trials and convictions of opposition figures, which has already produced condemnation from the Organization of American States (OAS) and United Nations as well as more US sanctions.

• The charges relate to Chamorro’s former stint as head of the local NGO Fundación Violeta Barrios Chamorro (FVBC). A handful of others were also convicted on 11 March in relation to the same case, including her brother, Pedro Joaquín Chamorro, a former legislator for the opposition Partido Liberal Independiente (PLI).
• According to local human rights NGO Centro Nicaragüense de Derechos Humanos (Cenidh), those convicted are expected to receive prison sentences of between eight and 13 years.
• The convictions come amid more signs of Nicaragua’s increasing tensions with the foreign community and isolation. On 12 March the Vatican revealed that the Ortega government had expelled Archbishop Waldemar Stanislaw Sommertag, Apostolic Nuncio in Managua, describing the move as “grave and unjustified”. Sommertag had been in Nicaragua since 2018 as a mediator following the crisis stemming from the social unrest which prompted a crackdown by the Ortega government on its opponents. The government has made no statement regarding his departure.
• On 10 March Nicaragua recalled its ambassador to Spain, Carlos Midence, citing “continued pressure and threats of interference” by Spain without providing details. In August 2021 Spain announced it was recalling its ambassador to Nicaragua María del Mar Fernández-Palacios after the Ortega government accused Madrid of “unacceptable interference” among other things. The same month Nicaragua recalled its ambassadors to Mexico, Argentina, Colombia and Costa Rica following similar moves by those countries.

Looking Ahead: The latest rulings will be met with international concern; US Assistant Secretary of State for Western Hemisphere Affairs, Brian Nichols already described them in a 12 March tweet as a “grave injustice”.

*International credit ratings agency Fitch has revised up Costa Rica’s outlook to stable from negative. Fitch said that this reflects “the better-than-expected improvements in the fiscal position and economic activity” following the 2020 coronavirus (Covid-19) pandemic-related shock which caused Costa Rica’s GDP to shrink 4.1% in 2020. Fitch said that its fiscal expectations have improved following “a robust 2021 outturn” (the credit ratings agency estimates real GDP grew 7.6% in 2021), supported by strong revenue performance adherence to a spending cap. It also cites the recent approval of a public employment bill in line with the three-year US$1.76bn International Monetary Fund (IMF) Extended Fund Facility (EFF) approved last year. The government estimates savings of 0.7% of GDP per year in reduced central government wages during the first years of implementation of the law, which would introduce a single pay scale and eliminate other salary components. According to Fitch, Costa Rica’s 2021 primary deficit of 0.3% of GDP was 3.1 percentage points lower than 2020, and far below the EFF target of -1.7%. The total deficit reached 5.0% in 2021 from 8.0% in 2020. Fitch expects the government will reach a 0.4% of GDP primary surplus in 2022, beating the -0.3% EFF target and that the overall deficit will narrow to 4.5%.

On 11 March, Mexico’s President Andrés Manuel López Obrador shared a letter he had penned to the European Parliament, in which he accused its members of “corruption, lies and hypocrisy” over concerns they had voiced around the treatment of journalists in Mexico.

Analysis:

López Obrador was responding to a resolution that European Parliament members (MEPs) backed on 10 March, which condemned the murders of media workers in Mexico and expressed concerns over López Obrador’s hostile rhetoric towards journalists. The comments come amid other signs of strain in bilateral ties with Europe, as López Obrador continues to criticise Spanish firms operating in Mexico and has mooted a “pause” in relations with Spain.

• Speaking at his daily press conference, López Obrador read out the letter he had sent to the European Parliament, in which he accuses MEPs of being “very conservative” and having a “colonialist mentality”. He said Mexico was no longer “a land of conquest”, echoing comments he made when US Secretary of State Antony Blinken raised concerns over the safety of Mexican journalists in February.
• Backed by 607 votes in favour and only two against, the European Parliament resolution said that López Obrador used his daily press conferences “to denigrate and intimidate independent journalists” which “generates an atmosphere of relentless unrest towards independent media”. It noted at least 47 journalists had been killed since López Obrador took office in December 2018, with 95% of these cases going unpunished.
• Eight Mexican media workers have been killed this year, although journalistic work is not believed to be the motive for at least two of these murders. Most recently, on 5 March, the journalist Juan Carlos Muñiz was killed in Fresnillo city, Zacatecas state. Muñiz had covered crime for local online news outlet Testigo Minero.
• López Obrador also criticised the European Union’s response to Russia's invasion of Ukraine, saying it had been unable to avoid war and that sanctions only “harm citizens” by causing a spike in prices of electricity and petrol.

Looking Ahead: Reactions to López Obrador’s comments are mounting. On 11 March, 19 Mexican NGOs and civil society organisations, including the local branch of international NGO Amnesty International, issued a statement saying they “regretted” the Mexican government’s response to the resolution. The NGOs said the response “weakens alliances and ignores the close cooperation that has been maintained for years with the institutions of the European Union”.

*Mexico’s national statistics institute (Inegi) has released new figures for its monthly index of industrial activity (Imai), which show that industrial production rose 4.3% in January 2022 as compared to January 2021. This performance was particularly boosted by increased production in mining (10.1%), with the manufacturing industries increasing 4% and the utilities sector (electricity generation and transmission, provision of water and gas) up 1.1% on January 2021. In month-on-month terms, Imai rose 1% in January 2022. Mining was up 7% on December 2021, with manufacturing industries increasing 0.3% and the utilities sector contracting by 0.2%.

On 11 March Gabriel Boric was inaugurated as Chile’s 34^th head of state, the youngest president in the country’s history.

Analysis:

Boric is the most radical leftist to hold the presidency since Salvador Allende committed suicide during the military coup of 1973; he has not shied away from Allende’s legacy, quoting him during his inaugural address and paying homage to his statue in the La Moneda presidential palace. But Boric is more pragmatic than partisan. He promised not to practise polarising politics, but to admit to his mistakes and “always listen to those who think differently”, and was very clear that respect for human rights was of paramount importance for him “whatever the creed of the government violating them” in a clear allusion to the authoritarian leftist governments in Cuba, Nicaragua, and Venezuela.

• Addressing a crowd from the palace balcony, Boric said he would not be standing there if it were not for the people who had taken to the streets to demand more social justice, and better education and healthcare in 2019, adding that he would seek to “repair the wounds left by that social uprising”.
• There is a strong youthful presence in Boric’s cabinet, with seven of his ministers under 40, and it is also symbolic of the gender equality, diversity, and plurality he maintains will be the hallmarks of his government.
• During his first full day in office on 12 March, Boric held a ceremony in La Moneda with representatives of all of the country’s different indigenous communities, with whom he promised “a new relation”. The interior minister, Izkia Siches, said the ceremony was an important sign of the government’s intentions.

Looking Ahead: Boric will have his work cut out forging a majority in congress. His Apruebo Dignidad coalition has only 37 seats in the 155-seat lower chamber of congress and just five in the 43-seat senate. He has formed an alliance with traditional leftist parties to bolster this bloc by a further 28 deputies and 13 senators, but his government will still be reliant on consensus-building with other parties to advance his reform agenda.

*Argentina’s government led by President Alberto Fernández has announced the suspension of export registrations of soybean oil, soymeal and other related products, a move which comes ahead of the 2021/2022 harvest in the country which is the world’s top exporter of processed soy products. The announcement, which comes amid surging prices due to Russia’s invasion of Ukraine, has been condemned by Argentina’s oilseed industry lobby group, Cámara de la Industria Aceitera de la República Argentina (Ciara). In a tweet, Ciara said the move was “totally contrary to the export interest of Argentina”, adding that as well as “being illegal, it will affect the income of foreign currency and employment in the agro-industrial chain”. According to the government, exports of soy products, the country’s leading export sector, totalled US$23.8bn in 2021, representing 30.6% of Argentina’s exports.

Colombia: On 10 March, Colombia’s President Iván Duque met US President Joe Biden in Washington. The meeting took place amid bilateral tensions following a recent visit by a US delegation to Caracas which fuelled speculation that the US might lift oil sanctions on Venezuela. However, a joint statement released following the meeting reiterated that “the restoration of democracy” is necessary to “bring an end to the political, economic, and humanitarian crises” in Venezuela – implying that the US is not about to abandon its long-running pressure on the Nicolás Maduro administration without first securing democratic reforms. In a further sweetener for the Duque administration, Biden announced plans to grant Colombia ‘Major Non-NATO Ally’ status, a designation for close US allies outside of the North Atlantic Treaty Organisation (NATO). While in the US Duque met various politicians and leaders including US Special Presidential Envoy for Climate John Kerry on 7 March, at CERAWeek, an annual forum for leaders in global energy held in Houston. Duque tweeted that he and Kerry discussed Colombia’s planned steps towards a clean energy transition, ensuring that the private sector commits to zero emissions, and the country’s goal to become carbon neutral by 2050. Kerry highlighted Colombia’s recent progress on climate change and praised its pledge to classify 30% of territory as protected land. As well as meeting Kerry, Duque gave a special address to energy leaders and entrepreneurs at CERAWeek, in which he highlighted his country’s recent environmental achievements and positioned Colombia as a leader in the energy transition market in Latin America and the Caribbean.

Central America: On 2 March US Secretary of State Antony Blinken met his peers from Costa Rica (Rodolfo Solano Quirós), the Dominican Republic (Roberto Álvarez), and Panama (Erika Mouynes) in Washington, DC. According to a readout by US State Department spokesperson Ned Price on 3 March, Blinken expressed strong appreciation for the leadership role that the three governments took in forming the Alliance for Development in Democracy, which launched in September 2021 to promote democratic strengthening and economic growth through the tightening of the three countries’ commercial, demographic, and cultural ties. According to Price, Blinken thanked the three officials for their nations’ efforts to strengthen democratic institutions and norms, including “supporting the Nicaraguan people as they strive to re-establish democracy and protect their human rights from…abuses [by the Nicaraguan government]”. They also advanced ongoing joint efforts to improve safe, orderly, and humane migration throughout the region. On regional issues, the group further noted “Honduras’ progress in carrying out a democratic transition, and the Xiomara Castro administration’s efforts to combat corruption. They discussed the importance of restoring democracy in Haiti through a Haitian-led dialogue”. The group discussed plans to increase coordination on nearshoring, financing, and trade to bolster economic recovery from the effects of the coronavirus (Covid-19) pandemic.

Chile: A US delegation headed by Isabella Casillas Guzman, administrator of the US Small Business Administration, a US government agency, travelled to Chile to attend the inauguration of Gabriel Boric as the country’s new president. Guzman tweeted that the US and Chile “are enduring partners and allies for promoting human rights and regional peace and prosperity” and that US President Joe Biden “looks forward to continued close collaboration” with the new administration. As well as Guzman, the US delegation included US Assistant Secretary for Western Hemisphere Affairs Brian Nichols who, ahead of the inauguration, met senior government officials and representatives from the incoming administration to reinforce US-Chilean cooperation on democracy and democratic institutions, regional migration, climate action, “and our joint commitment to human rights throughout the Americas”, according to a US State Department press release. Nichols was also due to meet with officials from the outgoing Sebastián Piñera administration to “thank them for their governance” as well as the American Chamber of Commerce to discuss economic recovery due to multiple challenges brought on by the coronavirus (Covid-19) pandemic.

Mexico: On 2 March Mexico’s foreign ministry (SRE) said that thanks to the cooperation outlined in the Bicentennial Framework (the US-Mexico security agreement), Mexico’s attorney general’s office (FGR) and US Immigration and Customs Enforcement (ICE) successfully concluded the extradition to Mexico of Rafael Olvera for alleged fraud in the Ficrea case, in which more than 6,000 mostly elderly individuals were defrauded by the credit union Ficrea. According to the SRE, Olvera allegedly committed crimes "which included the violation of the savings act." The SRE highlights that “Mexican and US authorities are providing tangible results in the fight against impunity and corruption as part of the renewed framework of security cooperation between both countries”. According to ICE, Olvera entered the US in Laredo, Texas with an authorised work visa on 8 November 2014. On 22 November 2016, Mexican officials issued a warrant for his arrest for fraud, and he was arrested on 24 May 2019.