Two new corruption investigations into former Panamanian president Ricardo Martinelli (2009-2014) were approved by the supreme court on 23 September. One relates to an investigation launched by the Panamanian stock market regulator into whether Martinelli engaged in insider trading; the other relates to a pre-existing case, which alleges that a company contracted by Martinelli’s government was accepting bribes. In response to the latest allegations Martinelli tweeted that the supreme court had been pressured into “falsely accusing me”.

Three other corruption investigations have already been approved. One centers on allegations that Martinelli approved multi-million dollar purchases of dried food at inflated prices as part of a government welfare programme. Another focuses on Martinelli’s decision to order illegal wiretaps on 150 people, including politicians and businessmen. The third alleges that he used the presidential office to issue more 350 illegal pardons to friends and allies towards the end of his tenure.

Other potential legal headaches loom elsewhere. In Italy, Martinelli has been cited as a participant in a corruption scheme involving Panamanian contracts when a judge sentenced a man for attempting to blackmail Italy's former prime minister, Silvio Berlusconi (1994-1995, 2001-2006, 2008-2011). Investigators in Brazil examining the foreign projects of Odebrecht, the construction company, are also looking into its dealings with Martinelli over the Panama City subway.

In an interview with Bloomberg published on 17 September, the billionaire supermarket tycoon argued that all the cases against him were purely political, given that his immense wealth predated his political career and therefore he had no need to pilfer from the state. The former president has a net worth of US$1.1bn, with his top assets being a chain of supermarkets.

  • Vendetta?

In the interview with Bloomberg, Martinelli, who has been in the US since January, said that his former Vice President and current President Juan Carlos Varela is engaging in a “political vendetta”, motivated by anger that the former president raised taxes on the rich – a “cardinal sin” in Panamanian politics, according to Martinelli.

Published in Central America

Development: On 29 September Uruguay’s President Tabaré Vázquez called for parents to support his battle with the local teachers’ unions by sending their children to school.

Significance: According to some calculations Montevideo secondary school students have missed as many as 29 days of classes due the protests and strikes against low pay and poor working conditions staged by the local unions. This has led to the political opposition in congress to go on the attack, accusing the government of not being in charge of the education sector, leaving it to the unions to call the shots. But yesterday, the director-general of secondary education, Celsa Puente, insisted that 70% of teachers had returned to work.

  • Speaking on the fringes of the United Nations General Assembly meeting in New York City, Vázquez said, “the government is going to guarantee that study centres remain open”. The President’s remarks irritated the leadership of the country’s main umbrella union, Plenario Intersindical de Trabajadores–Convención Nacional de Trabajadores (Pit-Cnt), which hours earlier had threatened further “major demonstrations” bringing “thousands” of workers out onto the streets to demand that the government increases the education budget from 4.7% of GDP to 6% in its 2015-2020 draft budget that is now being debated by congress.
  • The president of the Pit-Cnt, Fernando Pereira, said that Vázquez’s comments “were not helpful in the current climate”. Pereira lamented the fact the government appeared to be focusing on the strike actions, such as the occupation of the national education council (Codicen) building, rather than the substance of the teachers’ claims. Pereira accused the government of attempting to criminalise the protests, following the arrest of 12 strikers yesterday.

Looking Ahead: There are no signs that the strike is likely to end soon. Yesterday the main teachers’ union in Montevideo (Ades) said that it plans to continue with its strike until the government addresses its demands.

Published in Southern Cone
Tuesday, 29 September 2015 11:07

Haiti’s CEP announces final results

Development: On 27 September Haiti’s provisional electoral council (CEP) released the final results of the 9 August first round of legislative elections for two-thirds of the 30-seat national senate and the newly expanded 118-seat lower chamber of congress.

Significance: According to the results, just two candidates running for the senate and eight running for the lower chamber managed first round victories, thereby avoiding second round run-offs on 25 October (which will take place concurrently with the first round of presidential elections). The CEP’s announcement, which comes weeks after the 9 September deadline that the electoral authority had set itself, has yet to assuage existing concerns regarding the electoral process raised by civil society groups as well as the political opposition.

  • The successful senate candidates were: Youri Latortue (Ayiti An Aksyon, AAA), the nephew of former interim prime minister Gérard Latortue (2004-2006); and Jean Renel Sénatus (Ligue Dessaliniene, Lide), a former government commissioner for Port-au-Prince (2012) known by his crime-fighting nickname ‘Zokiki’. Both were declared victors after challenging preliminary results which suggested that they had not won sufficient votes for a first round victory (more than 50% of the vote or, following a change introduced to electoral legislation this year, a 25% lead over their nearest competitor).
  • Of the eight successful lower chamber candidates, four were from President Michel Martelly’s Parti Haïtien Têt Kalé (PHTK) – Gracia Delva, Antoine Rodon Bien Aimé, Rony Célestin, Bernard Anouce; two from the AAA – Cholser Chancy and Fritz Chéry; one from Vérité, the new party launched by former president, René Préval (1996-2001; 2006-2011) -– Gabriel Lyonel Jean; and one from Préval’s former party, Inité -Jackie Guerrier.
  • On 24 September André Michel, the presidential candidate for the opposition Jistis party pulled out of the race, complaining that the CEP lacks the credibility to hold the elections. His departure follows Vérité’s 8 September announcement that it was withdrawing from the legislative second round citing similar concerns. Vérité had already raised complaints about the electoral process and the CEP following the latter’s decision to exclude its presidential candidate, Jacky Lumarque, considered a serious contender, in June for allegedly failing to present a key document.

Looking Ahead: The two likely contenders for the presidency according to an August poll by private think-tank, Bureau de Recherches en Informatiques et en Développement Economique et Sociale (Brides), are Jude Célestin (Ligue Alternative pour le Progrès et l’Emancipation Haïtienne) and Jean Charles Moïse (Pitit Dessalines). These two have shown no indication of pulling out of the contest. Both launched their campaigns on 27 September. The poll showed Célestin as the frontrunner with 15.1% of voting intentions and Moïse, second with  9.6%. Meanwhile the PHTK candidate, mechanical engineer Jovenel Moïse, a relative unknown, was in third with 6.1%.

Monday, 28 September 2015 10:27

Cuba: Obama-Castro to meet at UN

Development: US President Barack Obama will meet his Cuban peer, Raúl Castro, at the margins of the United Nations General Assembly tomorrow (29 September), White House officials have confirmed.

Significance: This will be the second time that the two leaders will formally meet, having first met at the Summit of the Americas in Panama in April. Obama also telephoned Castro ahead of Pope Francis’s recent trip to Cuba, which coincided with further US regulatory changes to facilitate travel and trade with Cuba. The White House is continuing to chip away at the US embargo, while urging Congress to approve its removal.

  • As expected, Castro used a 25 September address at the United Nations (UN) to lambast the US embargo and call for its removal. Speaking to a UN summit of world leaders on sustainable development, Castro hailed the restoration of diplomatic relations with the US as “major progress” but declared the embargo “the main obstacle to our country's economic development”, adding that it also affected third countries due to its extraterritorial scope; and was “hurting the interests of American citizens and companies”.
  • Today (28 September), Castro will address the UN General Assembly for the first time since becoming president, where he will repeat that message. Ahead of the annual UN vote on a resolution backing removal of the embargo, US diplomats have suggested that Washington is considering abstaining from the vote, provided that the draft text is toned down a little. Should the US abstain, it would represent another major diplomatic gesture by the Obama administration, and would add to the pressure on the Republican-controlled Congress to reconsider its hardline position, which looks increasingly out of touch, not only with international opinion, but also with US public and business opinion.
  • Separately, US and Cuban officials are scheduled to hold talks today and tomorrow on a new civil aviation agreement, needed in advance of the expected opening of commercial air travel between the two countries. In a sign of the confidence in these talks, the low-cost US carrier JetBlue yesterday (27 September) announced the addition of a second weekly charter flight from New York City’s John F. Kennedy international airport to Havana, in a bid to consolidate its position before commercial airliners begin operating scheduled flights.

Looking Ahead: While general US tourism to Cuba is still banned, the Obama administration has made it significantly easier to travel to the island for Cuban Americans and the 12 permitted categories of US visitors. Legislation proposing the removal of the tourism ban (and the removal in full of the US embargo) is due to go before Congress by year-end.

The double whammy of lower production and a declining world oil price have impelled Petróleos Mexicanos (Pemex) to make budget cuts this year, but the State oil company’s problems have been exacerbated by a surge in fuel theft. In the first eight months of the year, there were 3,547 illegal taps, up 50.6% on the same period in 2014, amounting to losses of M$13.2bn (US$783m), or more than M$50m a day. At the present rate losses will top US$1bn by the end of 2015.

The number of illegal taps along Pemex’s sprawling network of ducts in the first eight months of 2015 has already exceeded the 3,348 taps for the whole of 2014. And the figure for 2014 was more than 25% of the total number of illegal taps registered between 2000 and 2014: 11,872. Last February Pemex announced changes to its nationwide supply methods in an attempt to combat rising fuel theft: using pipelines only for unrefined fuels; and tightening controls to prevent leakage of pumping times (Pemex employees are suspected of tipping off drug trafficking organisations [DTOs]). It does not appear to have acted as much of a deterrent.

The state with the greatest number of illegal taps in the first eight months of 2015 was Tamaulipas, with 561 cases, up 15% on the same period in 2014. This despite the state governor, Egidio Torre Cantú, repeatedly stressing his intention to crack down on the practice. There were admittedly more dramatic increases elsewhere. The second and third placed states on the list, Guanajuato and Puebla, saw increases of 131% to 555 illegal taps and 172% to 511 respectively over this period. Next on the list were Jalisco, up by 82% to 362, and the Estado de México (Edomex), up 78% to 293.

In total there were an increased number of illegal taps in 23 of Mexico’s 32 federal entities. Even in the Distrito Federal (DF) there might have been only eight taps but this was up from just one last year. The most noteworthy declines in the nine states which saw falls were Sinaloa, down by 17% to 151 taps; Nuevo León, down by 20% to 85; and Zacatecas, down by 88% to four.

It is not just a matter of the financial cost sustained by Pemex for the loss of fuel but also the cost of closing and repairing its pipelines, which has resulted in fuel shortages in some states at various points over the course of the year. Once detected, an illegal tap takes in the region of 12 hours to repair and to build up sufficient pressure to resume pumping. There is also the issue of public safety. Pemex has been increasingly prone to leaks and explosions, some of which could be explained by the frequent illegal taps rather than purely poor maintenance.

This all goes to explain why the federal congress is keen to draft legislation to punish fuel theft from Pemex pipelines as a serious crime. A bill to this effect was debated during the last congressional session but failed to advance because of constitutional concerns (should this be a matter for individual state congresses?) and because a number of legislators argued that it required greater definition to ensure that it targeted the actual culprits.

  • ‘El Chapo’

The dismissed director of the maximum security prison, Altiplano I, in the Estado de México, has been imprisoned in his own jail on the orders of a Mexican judge on 21 September for his possible role in the escape of the drug kingpin, Joaquín ‘El Chapo’ Guzmán Loera, last July. A total of 20 arrest warrants have now been issued in connection with Guzmán’s escape. In addition to the fired prison director, Valentín Cárdenas Lerma, the then national coordinator of the federal prison system, Celina Oseguera Parra and the legal director at Altiplano I, Leonor García García, have also been placed under arrest, as well as two members of the national intelligence service (Cisen) and two prison officials in charge of the audio and video surveillance system in the prison.

Published in Mexico & Nafta
Wednesday, 23 September 2015 15:52

POLITICS: Trouble in the mining sector

There has been fresh unrest in the mining and hydrocarbons sectors, both of which already are struggling in the face of lower mineral commodity prices.

On 17 August a local police sergeant, José Luis Quispe de la Cruz, died after falling 200 meters into a ravine following clashes in Tacacoma, La Paz department, between local protesters and security officials. Ten other security officials were injured.

The clashes, in which protestors reportedly attacked police officials with sticks and rocks, took place after months of simmering tensions between local residents and mine workers from a local mining cooperative, Rosario de Ananea. The police had arrived on the scene to enforce a court order to evict locals who had taken over the mine alleging that the cooperative had breached a compensation agreement struck weeks earlier to exploit it. The compensation agreement, in turn, was aimed at quelling unrest that erupted in May after locals accused the cooperative of operating in unauthorised areas – claims denied by the cooperative’s president, Marcelo Yupanqui.

The violence illustrates the continued problem of mine invasions despite legislation (Ley 367), approved in May 2013 by the Movimiento al Socialismo (MAS) government led by President Evo Morales [RA-13-09], specifically aimed at stopping such incidents, as part of efforts to restore investor confidence. Ley 367 followed violent June 2012 clashes at the Colquiri mine, also in La Paz department, and other key mines like Mallku Khota, in Potosí department. Nonetheless according to Carlos Soruco, the director of the administrative jurisdictional mining authority (Ajam), despite the introduction of Ley 367 there are at least 40 cases of mine invasions across the country currently.

The unrest in the mining sector coincided with protests over the Morales government’s insistence on pushing ahead with hydrocarbons exploration projects – which has come in for strong criticism from human rights ombudsman Rolando Villena (see box). In August the indigenous Capitanía Takovo Mora group, which is part of the Asamblea del Pueblo Guaraní (APG) regional indigenous organisation, erected blockades on the Santa Cruz-Yacuiba road linking the city of Santa Cruz in the eastern eponymous department to the Argentine border. The blockades were in response to efforts by Bolivia’s state-owned oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), to drill for oil in the territory. On 18 August a police operation to clear the road of protesters – which resulted in 28 arrests – drew strong criticism from various sectors. As well as Villena, the Catholic Church and human rights organisations like the Asamblea Permanente de Derechos Humanos and legislators from the political opposition Unidad Demócrata (UD) criticised the “excessive use of tear gas” and violence against protesters.

On 23 August, the APG and Morales government agreed to start talks. These have since unraveled and indigenous groups have decried the political persecution of the leaders. As well as being excluded from the new directorate of the government’s indigenous development fund (Fondioc), which was overhauled last month (see sidebar), protesters also complained about the arrest on 3 September of Adolfo Chávez, the president of the indigenous organisation, Confederación de Pueblos Indígenas de Bolivia (Cidob). He was detained as part of ongoing corruption allegations relating to the Fondioc. One of the main opponents of the government’s proposed plan to build the Villa Tunari-San Ignacio de Moxos highway through a local indigenous territory and national park, Isiboro Sécure (Tipnis), Chávez was later released.

Concerns over indigenous rights

As well as criticizing recent police repression of protesters, the human rights ombudsman Rolando Villena also came out against a ruling, issued on 13 September by Bolivia’s constitutional court (TC), rejecting an appeal by the office of the ombudsman against two articles of a November 2014 supreme decree (DS 2195) relating to compensation for hydrocarbons concessions in indigenous territory.

Villena had presented the appeal in June, on the grounds that the supreme decree – which sets out financial compensation for indigenous communities affected by concessions – violates the right of indigenous groups to decide “with their own norms and processes the destination of compensation resources”.

The ombudsman – who is also appealing two other supreme decrees [RA-15-06] relating to the development of the hydrocarbons sector – maintains that DS 2195 violates international agreements that Bolivia has ratified like the United Nations Declaration on the Rights of Indigenous Peoples (which was incorporated into domestic law in November 2007) and the International Labour Organisation (ILO)’s Convention 169 on the right to prior consultation (which Bolivia ratified in 1991).

Trust fund

On 9 September President Morales announced that the government would set up a new trust fund for the country’s nine departmental governments, using the country’s international reserves (RIN) to offset the effects of the fall in international commodity prices. Latest figures from the Instituto Boliviano de Comercio Exterior (IBCE), a private sector trade lobby, valued Bolivia’s total exports in the first half of the year (of which hydrocarbons and mining exports accounted for 81% of the total) at US$4.6bn, down by 30% in value terms and by 4% in volume terms over the same period of 2014.

  • Fondioc

President Morales in late August announced the overhaul of the government’s indigenous development fund (Fondioc), which made headlines in February following a massive corruption scandal [RA-15-02]. A key change is that the government will have increased influence on the new ‘consultative council’, which replaces the old Fondioc’s directorate. The former directorate included representatives from eight of the main indigenous organisations, but the ‘consultative council’ will have representatives from just four. One of those excluded was the Asamblea del Pueblo Guaraní (APG), which is complaining that its exclusion is in punishment for protests against hydrocarbons exploration.

  • Bolivia blacklisted again

On 15 September the US government released the ‘Presidential Determination on Major Drug Transit or Major Illicit Drug Producing Countries for Fiscal Year 2016’, which designated Bolivia and Venezuela (along with Burma) as countries “that have failed demonstrably during the previous 12 months to adhere to their obligations under international counternarcotics agreements”. This is the eighth consecutive time Bolivia has been included.

Published in Bolivia
Friday, 18 September 2015 10:31

Mexico: Progress elusive in Iguala case

Development: On 17 September Mexican authorities reported that Gildardo ‘El Gil’ López Astudillo, considered a key participant in last year’s abduction and presumed murder of 43 training teachers in Iguala, Guerrero state, had been arrested.

Significance: The arrest and earlier news that the remains of one of the missing students (the second so far) had been identified through DNA testing carried out by the University of Innsbruck in Austria have raised hopes of progress in resolving one of Mexico’s most notorious and politically sensitive crimes. But the Iguala case remains as complex and disputed as ever. As the first anniversary of the tragedy comes closer (26 September) the government is likely to remain under intense pressure.

  • The office of the federal attorney general (PGR) has a view of what happened at Iguala, which the latest two developments appear to support. It is that the students, who were commandeering buses to take part in a political demonstration, were mistaken for members of a drug gang. Corrupt municipal police captured them and handed them over to the rival Guerreros Unidos drug gang; they were murdered, their bodies burnt, and the remains thrown in a rubbish dump near the town of Cocula.
  • The problem with this version of events is two-fold: first, it is largely based on confessions, some of which may have been extracted under torture; and second, there is little or no supporting forensic evidence. A group of experts from the Inter-American Human Rights Commission (IAHRC) says it is impossible for 43 bodies to have been burnt without leaving any traces.
  • The news that the remains of Jhosivani Guerrero de la Cruz, have been identified by DNA testing carried out in Austria could be key to clearing up the case. But PGR head, Arely Gómez, was careful to say that there were “indications” of a match. This led a group of Argentine forensic experts (EAAF), who are working have been collaborating with the investigations at the request of the relatives of the disappeared, to say that the results of the DNA testing are “not definitive” and that the two presumed crimes remain “uncertain and problematic”.
  • The capture of ‘El Gil’ could also be key to solving the case, since he is claimed to have sent text messages to other Guerrero Unidos leaders incorrectly identifying the students as being members of the rival Los Rojos gang, as well as ordering the burning of the bodies. He may shed further light on what actually happened.

Looking Ahead: Perhaps mindful that President Enrique Peña Nieto is due to meet the relatives of the victims next week (24 September) the government is trying to show progress is being made in the investigation.  But the relatives remain unconvinced by the official version of events, and many still suspect some kind of cover-up (speculating for example that the military was involved, given that the IAHRC experts were not allowed to interview officers from the local army barracks). The Iguala case is likely to remain one of Peña Nieto’s biggest political liabilities for some time yet.

Published in Mexico
Wednesday, 16 September 2015 15:52

SECURITY: Bachelet faces wider security criticism

With no sign of improvement in President Michelle Bachelet’s approval ratings, the leftist Nueva Mayoría coalition government is now facing fresh criticism over its handling of the long-running Mapuche conflict. Renewed violence in the southern Araucanía Region (where the indigenous Mapuche lay claim to ancestral lands) prompted complaints by truckers, and the government’s dismissal of the Araucanía regional governor, Francisco Huenchumilla.

On 24 August, lorry drivers’ groups including the Confederación Nacional de Transporte de Carga (CNTC) began a march from Temuco, Araucanía’s regional capital, to Santiago to protest at a lack of security. On 7 August, a group of 20 armed men had set alight six trucks and several items of heavy machinery on the Angol-Collipulli highway, in Malleco province. They left behind banners alluding to the Mapuche cause. On 14 August, in separate incidents in the Collipulli commune, two trucks were torched.

In a letter sent to Interior Minister Jorge Burgos on 12 August, the CNTC claimed that since 2006 – the year that Bachelet took office for her first four year mandate –130 lorries in all have been set alight by “delinquents and terrorists” in Araucanía, with three lorries robbed on a average daily basis.

With security already a public concern – as evidenced by cacerolazos in July [RBS-15-08] – the government could ill afford to ignore the latest unrest. On 3 September, Burgos called a meeting of the heads of the investigative police (PDI) and the national intelligence agency (ANI), Héctor Espinosa and Gustavo Villalobos respectively, as well as the outgoing director of the Carabineros Gustavo González (who stepped down five days later, upon the end of his four-year term), to come up with a strategy to address the violence.

As well as calling on the Carabineros to draw up a plan to strengthen “preventive vigilance” in the areas where the arson attacks had been most frequent, Burgos also announced the appointment of Héctor Leiva, the head of the Collipulli prosecution service, as a special prosecutor to handle cases of arson attacks against trucks. Along with other senior officials including the deputy interior minister Mahmud Aleuy, as well as Espinosa, Villalobos and Gustavo González’s replacement, Bruno Villalobos, Burgos then met the CNTC leadership on 4 September to present the authorities’ new strategy.

Mapuche unrest

According to the most recent (6 July) report by the local think-tank, Fundación Chile Intercultural (FCI), there were 67 Mapuche-related conflicts in the month of June. This was four less than the 71 registered in May, but 27 more than registered in April. The FCI put the total number of conflicts between January and June at 270 this year.

Days before his removal on 25 August, Huenchumilla, who had been in his post since March 2014, completed a 47-page document for presentation to the government containing his thoughts on how to tackle the conflict. The document was strongly critical of the government’s current policy. Among other things it ticked off the government for treating the Mapuche conflict as a public security concern rather than a political matter. It also highlighted as a major problem the big forestry companies operating on the Mapuche’s ancestral territories, which Huenchumilla maintained were never the Chilean State’s to award in the first place.

The government swiftly named Andrés Jouannet Valderrama, an advisor to Minister Burgos, as the replacement for Huenchumilla who, in an interview with local radio station Bío-Bío after his dismissal, further criticised the government for refusing to sit down with either lorry drivers or representatives of the government’s department for indigenous affairs (Conadi) to discuss the conflict.

Like Huenchumilla, Jouannet is a member of the centrist Partido Democracia Cristiana (PDC). However, unlike his predecessor, Jouannet is not of Mapuche descent, which has not gone down well with the sector. Indeed Jouannet’s decision to file a formal complaint against those responsible for the attacks, invoking the state security law, which allows the courts to fast-track trials ― but is less open to challenge than the 1984 anti-terrorist law inherited from the Augusto Pinochet régime (1973-1990) – immediately antagonised the Mapuche.

With Huenchumilla’s dismissal and replacement already a cause of anger, the government’s decision to meet with the CNTC while refusing to receive Mapuche representatives further exacerbated the situation. On 10 September, in an interview with Radio Universidad de Chile, Aucán Huilcamán, the leader of Consejo de Todas las Tierras (CTT), one of the most militant Mapuche organisations, called for a Mapuche constituent assembly and complained about the government’s treatment of the Mapuche.

Pressure on the government to address the conflict is coming from other sectors too. On 10 September, the Consejo del Instituto Nacional de Derechos Humanos (INDH) called on the government to address the indigenous sector’s long-running demands. The INDH, noting that the violence was also affecting Mapuche, drew attention to a recent eviction by police of Mapuche protesters occupying Conadi premises in Temuco, in incident in which at least two Mapuche were injured.

Tackling crime

In an Adimark poll released on 2 September, just 6% of respondents said they approved of the government’s response to rising crime and delinquency, down from 9% in July and 12% in June.

President Bachelet recently promulgated a law to strengthen the national prosecution service, as part of efforts to combat crime and insecurity. Insisting that “as the government we are not turning a deaf ear to this enormous concern”, Bachelet said that an additional 577 employees would be recruited for the national prosecution service, increasing staff numbers to a total of 4,255 officials. Of the new recruits, over 15% would be public prosecutors, while the rest would comprise assistant prosecutors, psychologists, caseworkers and administrative personnel.

The new legislation reduces the terms of the national prosecutor general and regional prosecutors to eight years from ten, in order to provide greater incentives for new talented professionals. There are 18 regional prosecution services in Chile, each under a regional prosecutor general and a leadership team.

Tourism concerns

The issue of crime and security was also a major talking point at the annual conference of the Chilean tourism association, Asociación Chilena de Empresas Turísticas (Achet), held between 29 August and 1 September in the northern city of Copiapó, in the Atacama region.

At the conference Guillermo Correa, the president of Achet (which comprises some 200 organisations, representing over 90% of the tourism sector), called on the government to address insecurity, complaining that it risked “destroying the image of the country”, and threatened the tourism sector. “Promoting Chile as a destination, improving its services and developing infrastructure is worthless unless we can satisfy a basic requirement – people’s safety”, he said.

According to latest statistics from Chile’s National Tourism Service (Sernatur), the numbers of foreign tourists visiting the country has increased steadily year-on-year since 2008, reaching a high of 3.7m in 2014. In the first half of 2015 moreover, there was a 20% year on year increase in tourist arrivals. Speaking at the Achet event, where she presented the government’s sustainable tourism development plan, which was drawn up last year and envisages a US$100m investment between 2015-2018, the undersecretary for tourism, Javiera Montes, forecast that Chile would receive 4m visitors overall in 2015.

It is worth noting that the latest Sernatur report includes data from the month of June of this year, during which Chile hosted the Copa América football tournament. The event resulted in an overall 47.1% increase in foreign tourism for June 2015 compared with the same month the previous year. Statistics for the month were flattered by increases of 43.5%, 50.5% and 57.9% in tourists visiting Chile from North, Central and South America respectively to attend the competition.

This Copa-related windfall obscured a 0.1% year on year decrease in visitors from Europe. After South America, Europe is the second largest tourist source market for Chile. Between 2013 and 2014, there was a 7.3% year-on year increase in European visitors to the country.

Correa stressed that for many years Chile has been admired internationally for its political, economic and social stability, “as well as for its high standard of public safety”. He claimed that the “unusual violence” of recent crimes had affected the numbers of tourists visiting Chile.

Presidential escort targeted

In a further embarrassment for the government, on 2 September the security convoy escorting President Bachelet was robbed at a service station on Route 5, the main highway connecting the north and south of the country.

Weapons and other equipment were stolen in the raid, which took place early in the morning. The head of the security escort team, Carabineros Captain Cristián Jones Benavente, and three lower-ranked police officials were relieved of their escort duties following the attack, apparently after they left the vehicles unattended.

Nancy González, a prosecutor in the region where the attack took place, said that there was no evidence that the criminals knew who the escort belonged to. On 10 September two arrests were made in relation to the incident.

Central bank revises down growth estimate

Chile’s economic activity grew by 2.5% in July compared with the same period of 2014, roughly in line with market expectations of 2.4%. While July saw strong growth in value-added services and manufacturing, this was offset by a decline in the mineral extraction industry. The figures come from the monthly economic activity index (Imacec), which gathers around 91% of the goods and services included in the country’s GDP statistics.

The Chilean economy is experiencing a slower-than-expected recovery, following its worst performance for five years in 2014, when it grew by 1.9%, weighed down by low levels of investment and domestic consumption. On 1 September the central bank lowered its GDP forecast for 2015 to 2.0-2.5% and raised its expectation for inflation, which is now predicted to end the year at 4.6%. Some analysts now expect the central bank to raise interest rates to counter inflation.

  • Approval

The latest Adimark poll released on 2 September put President Michelle Bachelet’s approval rating for August at just 24%, down from 26% in July. Her disapproval rating was 72%, up from 70% the previous month.

Published in Chile
Wednesday, 16 September 2015 10:39

Run-off confirmed in Guatemala

Development: On 15 September Guatemala’s electoral authorities (TSE) announced the final results from the 6 September general elections.

Significance: The TSE confirmed that the 25 October second round presidential run-off will be between Jimmy Morales of the small conservative Frente de Convergencia Nacional (FCN-Nación) and former First Lady, Sandra Torres (2008-2012), of the centre-left Unidad Nacional de la Esperanza (UNE). The result that had been widely anticipated, following the surprise decision by Manuel Baldizón, of the main opposition Libertad Democrática Renovada (Líder), to pull out of the race the previous day. With the second-round line-up confirmed, both candidates are now desperately seeking alliances ahead of 25 October.

  • The final results gave Morales 23.99% of the valid vote (1.152m in total); Torres, 19.75% (948,809 in total) and Baldizón, 19.38% (930,905) – meaning that there was just 17904 votes between the first and second placed candidates. Fourth with 6.53% (313,628 votes) was Alejandro Giammattei (Fuerza), a former head of the prison service under the Gran Alianza Nacional (Gana) administration led by former president Oscar Berger (2004-2008). In fifth place with 5.97% (286,730 votes) was Zury Ríos Sosa, the daughter of former dictator Efrain Ríos Montt (1982-1983), who was standing for Visión con Valores (Viva). Lizardo Sosa (Todos) took 5.41% (259,673); while controversial journalist, Mario David García, of the ruling Partido Patriota (PP) took 214,532 votes or ( 4.47%). The PP has been badly damaged by the various government corruption scandals, which ultimately forced the resignations of Otto Pérez Molina and Roxana Baldetti as president and vice-president respectively. Eight other parties made up the remainder.
  • The TSE also announced elections would be restaged in 11 municipalities (out of the country’s 338) as a result of the burning of ballot boxes and other irregularities.
  • While Baldizón has said that he will not endorse either presidential candidate in the second round, his support base (the rural poor) is likely to migrate to Torres, who made her name under the UNE government led by her former husband and president, Alvaro Colom (2008-2012), when she headed up the government’s poverty reduction schemes. Meanwhile Morales – whose party has strong links to the military – has his support base is in urban areas and is likely to attract the vote of the hard Right like the Viva and the PP.

Looking Ahead: Given that public outrage over corruption marked the first round electoral campaign period, Morales and Torres are now likely to come under closer scrutiny. Yesterday a court ordered the arrest of Baldizón’s former running mate, Édgar Barquín, a former head of the central bank (2010-2014), in line with a request filed in July by the United Nations-backed International Commission against Impunity in Guatemala (Cicig) and the attorney general’s office in relation to alleged money laundering.

Development: On 14 September Ecuador’s President Rafael Correa called on his supporters to prepare to offer “resistance” to the demonstrations planned by government opponents this week.

Significance: Correa’s call will fan tensions in Ecuador, which has become increasingly polarised this year following the mass demonstrations staged by local workers’ unions and indigenous groups against various recent government initiatives. These demos are seen as the biggest political challenge to the Correa government to date. President Correa's response - to rally supporters to stage counter-demos - has resulted in clashes taking place in the streets. At times these have produced violence - as was evident most recently last month in Quito.

  • Correa took to Twitter to rally his supporters ahead of the national demonstrations called by the Coordinadora Unitaria de Trabajadores, Indígenas, Campesinos y Organizaciones Populares de Pichincha (Cutcop) protest group for tomorrow (16 September). “Happy week everyone. This week, the usual individuals will return with their assemblies, marches, strikes… attacking democracy and the rights of the majority. We will have to exercise our right to resist these extremely violent and absolute minorities”, Correa said before calling on his supporters to help “protect our roads, public and private property, our right to work and mobility”. This was a reference to the road blocks typically erected by demonstrators as well as to any potential attack on government buildings in the event of confrontation with the police.
  • Despite Correa’s incendiary remarks, Cutcop ratified its plan to hold a national protest day tomorrow. In a statement, Cutcop again called on all workers’ and social organisations to join their demonstrations in all the country's provinces in “rejection of government policies”. Cutcop coordinator, Edwin Bedoya, in particular said the protest action was against the “unpopular policies” such as the government’s ‘water law’ and the constitutional reform that among other things would allow for indefinite presidential re-election, which is currently being debated by the national legislative assembly.
  • Bedoya added that Cutcop is also demanding the immediate release of all the protesters “unjustly detained during the protests held back in August”. Dozens of individuals were detained by the police during violent clashes last month. Many were subsequently released but some remain in custody and government opponents maintain that this is part of strategy to repress the protest movement.

Looking Ahead: With the Cutcop demo set to go ahead and Correa rallying his supporters, the fear is that tomorrow’s demos may again end in violence.

Published in Andean
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