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La Presidenta Cristina Fernández buscó disipar los temores acerca de la economía de Argentina con esas palabras. Fernández dijo a los argentinos que aunque la economía no estaba en su mejor forma estaba lejos de un colapso, un temor que ha sido alimentado por los recientes anuncios económicos del gobierno. En un evento diferente un día más tarde ella dijo que “Algunos entienden que la competitividad se alcanza reduciendo los salarios o pagando menos impuestos. Ahora tenemos que comenzar a hacer ajustes precisos y analizar la inflación, los subsidios y las ganancias”. Esta fue la primera vez en casi cuatro años en el poder que Fernández mencionó la inflación directamente y reconoció que es un problema que necesita ser abordado, una movida que recibió la bienvenida de los tradicionales (y recientemente adquiridos) partidarios y críticos por igual.

El anuncio de la semana pasada, que algunos hogares de altos ingresos y alrededor de 40 grandes compañías en el sector de los hidrocarburos y la industria agroquímica perderían los subsidios que reciben en  sus facturas de servicios ha recibido una gran bienvenida a lo largo del espectro político; muchos en la oposición alegan desde hace tiempo que el sistema generalizado de subsidios beneficia a los ricos mucho más de lo que bene3ficia a los pobres, que podrían no tener acceso a los servicios subsidiados o, si los tiene, consumen mucho menos energía que las familias de altos ingresos. La movida también señaló que el gobierno hablaba seriamente acerca de sus intenciones de presionar por ajustes fiscales [IL-11-44], incluso aunque ese término no forma parte del vocabulario kirchnerista.

Julio de Vido y Amado Boudou, los ministros de planeamiento y de economía, respectivamente, explicaron ante un auditorio lleno de funcionarios del gobierno que los residentes de la Ciudad Autónoma de Buenos Aires (Caba) serían los primeros afectados por la remoción de los subsidios, pues 53% de todos los subsidios a los servicios van a los residentes de la capital federal –y también debido a que el “PIB per cápita geográfico de la capital federal es de US$35.000 por año, mientras que en el resto del país es de US$9.000”, declaró Boudou.

Desde el 1 de enero de 2012, los residentes de los vecindarios de la Caba de Puerto Madero y Barrio Parque (que incluye los pudientes barrios de Palermo y Recoleta), además de los residentes de todos los llamados ‘country club’ (barrios cerrados), ya no serán elegibles para los subsidios de las facturas de servicios. Eventualmente, la situación financiera de todos los hogares en el país será evaluada y aquellos considerados capaces de pagar sus facturas sin subsidios tendrán que hacerlo así. Un sistema para aquellos que desean abandonar sus subsidios voluntariamente también será establecido esta semana (ver más abajo).

La palabra clave: inflación

Sin duda, la mención de la presidenta de la inflación por su nombre, en vez de usar la descripción preferida de “tensión de precios”, podría ser más efectiva en calmar las agitadas aguas que cualquier cambio de moneda o cambios subsidiados que la administración ha anunciado. Aunque Fernández no fue tan lejos como para decir que las cifras de la inflación oficial informada por el instituto nacional de estadísticas (Indec) eran incorrectas, al reconocer que ahí había un problema, ella también implicó que ella trataría de encontrar una solución. En sí mismo es un mensaje positivo y uno que podría ayudar al gobierno a abordar las arraigadas expectativas inflacionarias de alto nivel.

Fernández deberá jurar para asumir su segundo mandato el 10 de diciembre, y a diferencia de la mayoría líderes con dos mandatos consecutivos, su desempeño (y su rating de aprobación) podrían ser mejores durante su segundo mandato que en el primero. Se podría decir que el próximo mandato podría verse como la ‘real’ administración Fernández, desde que su fallecido esposo y predecesor, Néstor Kirchner (2003-2007), se pensaba que era el que movía los hilos detrás de bambalinas de su primer gobierno, hasta su súbita muerte en octubre de 2010.

En la ‘real’ administración Fernández, que se aseguró un fuerte mandato recientemente [IL-11-43], la confederación general del trabajo (CGT), la más grande organización sindical, que es liderada por Hugo Moyano, el controversial jefe del sindicato de camioneros, tendrá que jugar bajo sus reglas y de nadie más (ver más abajo).

• La presidenta es primera en la línea

“Fernández, Cristina Elisabet” fue el primer consumidor que optó por renunciar online a los subsidios, seguida por “De Vido, Julio Miguel” y “Boudou, Amado” el 23 de noviembre. El resto del gabinete nacional, altos funcionarios ministeriales y los directores de compañías del estado rápidamente siguieron el ejemplo. Poco después, el opositor alcalde de la ciudad de Buenos Aires, Mauricio Macri, se trepó al carro y declaró públicamente que él había ordenado a su gabinete que haga lo mismo. Debido a un fallo técnico en el sistema, el fallecido esposo de Fernández, fue temporalmente uno de los 4.545 usuarios que renunciaron voluntariamente a los subsidios en sus facturas de agua, gas y electricidad.

Renovada tensión con la Caba y la CGT

Las tensiones con Hugo Moyano parecen haberse elevado a propósito y apuntan a desplazarlo como secretario general de la CGT en la elección de julio de 2012. Esta semana, la Presidenta Fernández declaró que ella no apoyará un proyecto de ley propuesto por Moyano e introducido en el congreso por el diputado Héctor Recalde, del gobernante Frente para la Victoria (FPV), que pide que las compañías compartan sus ganancias con los trabajadores.

“¿Está acá el compañero secretario general de la CGT? ¿No está? ¿Se fue? Bien, en todo caso hemos visto su mensaje al ejecutivo en los diarios cada día,” dijo Fernández, haciendo el más severo comentario acerca de él ante la Unión de Industriales Argentinos (UIA), las mismas personas que tendrían que haber compartido las ganancias y que se oponen al proyecto de ley. Con la oposición política hecha jirones y el Partido Peronista bajo su control, Fernández ahora tiene el capital político necesario para hacer a un lado a Moyano, del que se podría decir que es la única figura aún capaz de desafiar al gobierno.

Aunque Fernández y el alcalde opositor de la Caba, Mauricio Macri, parecían haber aliviado las tensiones, luego de sus respectivas victorias de reelección, ellas volvieron y están en curso de colisión sobre la decisión del gobierno (anunciada el 2 de noviembre) de pasar el control del sistema de transporte subterráneo al gobierno local el 1 de diciembre.

El gobierno federal se ha comprometido a completar la modernización de las líneas A y E, pero dijo que no desembolsaría fondos (prometidos en 2005) para otras tareas de mejoras. Eso significa que Macri quedará con un cáliz envenenado, enfrentando la políticamente desagradable decisión de tener que elevar los precios del transporte en metro.

A manera de un compromiso, el gobierno federal ofreció entonces pagar la factura de 50% de los subsidios del metro por el primer año –que suma US$81,6m– pero la administración rechazó la propuesta el lunes. El ministro federal de transporte, Juan Pablo Schiavini, entonces dijo que él recurriría a la justicia a fin de obligar a la Caba a tomar control del sistema de transporte subterráneo.

In last week’s issue, we looked at the US’s relations with China, and in particular at seemingly conciliatory remarks made by Secretary of State Hillary Clinton to mark the 40th anniversary of President Richard Nixon’s historic 1972 visit to China.  We provided evidence to support the view that not too much should be read into the diplomatic protestations of US support for China’s rise and that the reality continued to be one of concern and rivalry.  No such forensic interpretation is required to decipher Japan’s level of concern over China’s rise.  It is doing nothing to hide it.

The latest open acknowledgement of Japan’s fears over China’s rise came in a speech on Sunday by Prime Minister Yoshihiko Noda to a graduation ceremony of Self-Defence Forces cadets in Yokosuka.  Speaking on 18 March, Noda warned about North Korea’s nuclear threat and then added that “moves by...China, which is reinforcing its military capabilities and continuing vigorous activities in surrounding waters, are growing increasingly severe”.  He said that he felt “even more keenly” the bond of the Japan-US alliance and he urged cadets “to support from your fields the efforts to deepen and develop this relationship”.

Just two days earlier, on 16 March, China’s foreign ministry had issued a statement describing its naval patrols near the Japanese-controlled Senkaku Islands (Diaoyu in Chinese) as “lawful”.  Spokesman Liu Weimin said: “Our law enforcement vessels patrolled waters close to the Diaoyu Islands to maintain normal order and safeguard China’s maritime rights and interests.”  On the same day, China’s State Oceanic Administration (SOA) said that two of its surveillance ships had arrived in the area that morning to conduct an inspection tour.

Japan responded immediately by summoning China’s ambassador to protest against what it called the “extremely serious” incursion into Senkaku waters. The foreign ministry said that the Chinese vessels had entered territorial waters despite “repeated warnings” from the Japanese coastguard in what is the first incursion into Senkaku waters by Chinese state vessels since August last year.  In 2010, a clash between a Chinese fishing boat and Japanese coastguard vessel in the area sparked the worst dispute between Beijing and Tokyo in years.

Meanwhile, in the South China Sea, on 19 March a Chinese maritime official said that a China Maritime Surveillance (CMS) patrol team had just finished its third mission “targeted at the illegal exploration of oil and gas”.  The CMS said that the patrol had searched for “illegal offshore oil and gas extraction platforms” and that it had discovered 30 in total.  On 16 March, China had warned the Philippines against unilateral oil and gas exploration in the disputed Spratly Islands.  The Philippines, for its part, has said that oil and gas exploration near the Reed Bank is non-negotiable.

Also on 19 March, South Korea announced that it had deployed additional aircraft to patrol waters around Ieo Island after China claimed the submerged rock was under its control.  Ieo is 149km off Korea’s southern coast and considered to be part of its exclusive economic zone (EEZ).

The cries of coup appear infectious. Police riots across Bolivia this week led President Evo Morales to claim that “right-wing forces” were infiltrating the protests to set the stage for a “coup”. While protesters had clear demands – for better wages and labour conditions – and the political opposition accused Morales of resorting to a familiar tactic of spinning any unrest as a destabilisation plot, the rebellion, which has since ended following a deal struck with the government, is the latest sign of crisis within the institution.

The unrest, which left a handful of people injured overall, gathered force after an elite police unit in La Paz, Unidad Táctica de Operaciones de la Policía (Utop), expelled its commanders on 21 June following attempts to eject police wives from the barracks. Police wives have been key in staging the protests. Revolts also took place in provincial capitals such as Santa Cruz, Tarija, Potosí and Cochabamba. At one point the national police association, Asociación Nacional de Suboficiales, Sargentos, Clases y Policías (Anssclapol) estimated that some 3,000 of Bolivia’s 33,000 police officials had abandoned their functions.

Underpinning Anssclapol’s demands was the need to bring wages and conditions in line with those enjoyed by the military (FFAA). While lower-level police officials are paid B$1200 (US$174), FFAA officials of similar ranking (deputy officials or sergeants) receive an average monthly salary of BS$2,500 (US$364). As well as demands for a full final salary pension upon retirement - another benefit enjoyed by the FFAA - Anssclapol was calling for the creation of a police ombudsman and annulment of the April 2011 Law 101 on police discipline which its detractors claim, denies lower-ranking officials constitutional rights.

The deal struck on 27 June granted some of these demands. Interior Minister Carlos Romero said concessions such as a 9% salary rise; BS$110 worth of food provisions and a BS$400 bonus bumps up the minimum salary to BS$2,055 (US$293). The deal also provides for the creation of a police ombudsman, the pledge to revise Law 101, and the creation of a commission to look into the pension demands. Yet while the agreement saw the Anssclapol call off the unrest, the rebellion served as the latest sign of disaffection within the institution - a problem which has attracted increasing attention in recent months. It follows the rejection by top police officials of Colonel Víctor Santos Maldonado last month to replace General Jorge Santiesteban who went over corruption allegations [WR-12-21] as well as more frustration within the institution over Morales’ handling of the police crackdown last year in relation to protests over the government’s proposed construction of a road through the indigenous territory (Tioc) and national park, Isiboro Sécure (Tipnis) [WR-11-39].

The calls for wages and conditions to be brought in line with those enjoyed by the FFAA also point to more general resentment within the police regarding Morales’ perceived preferential treatment of the military. The Cochabamba-based Andean Information Network (AIN) traces this back to historic rivalry between the military and police which was exacerbated during the drug war which took place under the second administration of Hugo Banzer Suárez (1997-2001) as a result of a mixing of missions, whereby the military received the eradication role accorded to the police and the police received military anti-drug training. The AIN also points out that while the FFAA were used to patrol the streets and repress popular protests under Banzer, the backlash over the 2003 army clampdown, known as “Black October” which took place under Gonzalo Sánchez de Lozada, left the military less willing to intervene. The role of “repressor” thus returned to the police which has since been accused of human rights violations amid violent crackdowns – such as the Tipnis repression.

• Echoes of the past

The revolt in La Paz attracted particular attention due to precedent; a police protest which began in the same barracks in 2003, under the administration of President Gonzalo Sánchez de Lozada (1993-1997, 2002-2003), triggered by government plans to reform the police service, was quashed by the military, resulting in 19 deaths.

*** Paranoia in Sao Paulo.  On 4 August Bolivia’s President Evo Morales told the XIX Forum of Sao Paulo that the lives of anti-imperialist presidents were under threat.  He said “they”, meaning the imperialist powers, “will always try to find ways to end the life of anti-imperialist presidents…Our task now is…to care for the lives of our leaders”.  He said specifically that the life of Venezuela’s President Nicholas Maduro was under threat, but he also suggested that the leaders of Ecuador, Nicaragua, Argentina, Brazil, Uruguay, and Bolivia needed protecting.  He said: “It is our duty to care for our presidents”.  The event brought together representatives of leftist, socialist, and progressive parties in Latin America.  The final declaration emphasized the rejection of interference in the region by foreign powers.

*** Threat to France’s Rafale fighter jet.  France has decided to cut back its orders for the Rafale fighter jet manufactured by Dassault Aviation from the current 11 per year to just 26 over the next six years.  This has put even more importance on the finalizing of a major export deal with India, but the Indians are showing signs of hardening their bargaining position in the face of increased French weakness.  Former finance and foreign affairs minister Yashwant Sinha and Defence Minister AK Antony are among those reportedly stepping up the pressure by arguing that the news from France raises “serious doubts” about the life cycle costs of the Rafale.  To date, the Rafale has not secured a single export order.

*** Hamas targeting Israeli soldiers.  As the Muslim Brotherhood-linked Palestinian group Hamas contemplates the fall of the MB in Egypt and the need to tack back towards its former patron Iran, prominent Hamas leader Mahmud al-Zahhar has said that the group is to redouble its efforts to kidnap Israeli soldiers in order to secure the release of Hamas prisoners.  On 5 August he was quoted by the Palestinian newspaper Al-Risalah as saying: “All options are open before us in the light of Israeli intransigence vis-à-vis the [Hamas] prisoners and its humiliation of them and of the sons of our people.  We will do whatever we can to free them from the occupation prisons.”

On Iran, rather unconvincingly al-Zahhar attributed the current coolness in relations to the presidential election.  He said: “This is a period during which strategic relations and foreign files get frozen in Iran.”  He then added: “Through our contacts we notice that the Iranian leadership has not changed its position and the way it deals with the movement.”  This may sound optimistic, but there is no doubt that Hamas is making a concerted effort to get back in Iran’s good books, and there is no reason to suppose that a beleaguered Iran won’t respond positively.

SECURITY | Shoot-out in northern Nicaragua. On 4 December Nicaraguan police announced that ten people had been killed, including four police officials, in a clash between security forces and a “gang of delinquents” in the town of Bocas de Ayapal, in the northern department of Jinotega.  While the police claimed the shoot-out took place when “common delinquents” tried to rob a local grocery store, such deadly violence is unusual in Nicaragua and has revived concerns about the presence of armed groups operating in the north of the country. Human rights activists like Roberto Petray of the Asociación Nicaragüense Pro Derechos Humanos told the national daily La Prensa that he had been given local eye-witness accounts according to which the clashes took place after an armed group entered the town. The local Catholic Church has raised concerns since 2009 about the presence of armed groups in the north of the country with political aims, although the government and the military continue to downplay them as common delinquents. On 21 October, the auxiliary bishop of Managua, Monsignor Silvio Báez, gave an interview with a local television station, Channel 12, in which he said: “It is true that in these armed bands there is a mix of all sorts, but there are people who have taken up arms for political reasons. This is something that our brother bishops of the north have been able to verify; what the army and the police must do is to accept that truth and deal with it.”

The global economy is not giving Latin America and the Caribbean much help this year. But it is also true that the region is not doing very much to help itself. Exports have pretty much stopped dead in their tracks; the United Nations’ Economic Commission for Latin America and the Caribbean (known by its Spanish /Portuguese acronym CEPAL) says this weak performance is storing up problems for the future.

The numbers are daunting. Back in 2011, with the global commodities boom in full swing, Latin American and Caribbean exports surged ahead by 23.5% over the course of the year, earning healthy dollar revenues and stimulating domestic consumption. But the export drive shuddered to a halt with annualised growth of only 1.6% in 2012, followed by a contraction of 0.2% in 2013. CEPAL says 2014 will be another year of stagnation. Exports fell by 0.3% in the first half of the year and CEPAL is predicting growth of only 0.8% for the year as a whole. Imports have also stopped dead over the last three years, and this year are predicted to contract by 0.6% across the region as a whole.

What is happening? According to CEPAL’s October 2014 annual report, Latin America and the Caribbean in the World Economy 2014, the region is being hampered by slower growth in some of its key export markets, and by a fall in intra-regional trade. The global economy is less accommodating than it was. While in recent years global trade growth has exceeded GDP expansion significantly (by almost 2% in 2001-2007), this gap has narrowed sharply (to around 1% in 2011-2014).

South American exporters in particular are losing out because of sluggish demand for their goods in the European Union (EU). The Mercosur block, dominated by Brazil and Argentina (and also comprising Paraguay, Uruguay and latterly Venezuela), will see exports fall by 2.3% this year. Mexico and Central America, which are more focused on selling to the better-performing US economy, are doing better – they can expect a 4.9% increase in exports this year.

And despite the rhetoric about regional integration, trade between Latin American and Caribbean countries remains low. CEPAL calculates that last year only 19% of total trade was intra-regional, compared to 50% in the Asia Pacific and 59% within the EU. Intra-regional trade within the Caribbean Community (CARICOM, comprising 15 members and five associate members) does not even reach 15% of total exports.

The big message of the report is that the region remains too reliant on commodity exports and is too fragmented – in fact, the opposite of the much talked-about regional economic integration. CEPAL stresses the growing role of multinational value chains, and the way Latin America appears to be missing out on this important opportunity to build more diversified and resilient economies. It identifies three main global value chains in the world - North America, Europe, and Asia - and comments that “with the exception of Mexico, the region is not an important provider of non-commodities intermediate goods to these chains, nor does it carry much weight as an importer of intermediate goods originated in these world regions”. Low participation in these value chains reduces the region’s ability to achieve ‘inclusive trade’, defined as a pattern of imports and exports that “favour growth and productivity, reduces structural heterogeneity, improves the well-being of the majority (employment and salaries), and reduces inequality”.

Para marcar el Día Internacional Anti-Corrupción, el fiscal general de Brasil, Rodrigo Janot, aprovechó la oportunidad para defender su manejo de la investigación en la compañía petrolera estatal, Petrobrás. Lamentando el hecho de que Brasil “permanece como un país extremadamente corrupto”, Janot pidió una revisión completa de la administración de la compañía e insistió en que aquellos que fueron hallados culpables de corrupción “necesitan experimentar la cárcel”.

Aunque nadie aún no ha sido procesado y sancionado con relación al esquema de sobornos, cargos están actualmente en curso de elaboración para al menos 11 ejecutivos acusados de participar en el mismo. Janot describió el escándalo en Petrobrás como un “incendio de grandes proporciones” que amenaza a la “riqueza de la nación”. Bajo el esquema, Petrobrás supuestamente exigía pagos extras a los contratistas que pujaban por obras, con el dinero extra canalizado hacia políticos del gobernante Partido dos Trabalhadores (PT) y sus aliados. Muchas de las más grandes compañías de ingeniería de Brasil están acusadas de complicidad en el esquema, y de actuar como un cártel determinando por adelantado qué compañía ganaría que contrato para determinado proyecto.

“Ante tal desastroso manejo de la compañía, lo que la sociedad brasilera espera es la más completa y total investigación de los delitos, con el castigo que todos aquellos que estaban involucrados merecen”, dijo Janot. “Se espera una reforma fundamental, incluyendo, sin prejuicios o un intento de repartir la culpa, el eventual reemplazo de la administración”.

La semana pasada la revista, Istoé, informó que Janot se había reunido con los abogados de algunos altos ejecutivos acusados. De acuerdo con la revista, los abogados buscan un acuerdo mediante el cual sus clientes aceptarían cierto grado de responsabilidad si sus compañías son permitidas continuar ofertando por contratos de obras públicas. Muchas de estas compañías, y sus accionistas, temen que éstas puedan ser incluidas en la lista negra para obtener contratos con el gobierno debido a su participación en el esquema de corrupción.

Considerando la magnitud del escándalo, y la participación de algunas de las más prestigiosas compañías de Brasil, existe nerviosismo en todas partes acerca de la amplitud de las implicaciones económicas de prohibir a esas compañías de ofertar por obras públicas. El titular de la agencia anti-monopolio de Brasil, Vinícius Marques de Carvalho, alegó recientemente que aunque ninguna compañía debe ser considerada “demasiado grande para ser castigada”, el castigo no debería dejar a la compañías financieramente inviables.

Sin mencionar a Istoé por su nombre, Janot negó que se estuviera considerando cualquier clase de acuerdo con los acusados. “Yo nunca aceptaría ningún acuerdo que absuelva una conducta penal u otorgar impunidad a ningún transgresor”, dijo. “La decisión es llegar hasta el fondo de la responsabilidad penal y civil  para aquellos quienes conducían este esquema. No habrá descanso. La oficina del fiscal general no externaliza o ignora su deber para cumplir con los mayores intereses de la nación”.

Rousseff culpada por el escándalo

Un sondeo de Datafolha publicado en el diario lcoal, Folha de São Paulo, el 7 de diciembre, muestra que una mayoría de brasileros cree que la Presidenta Dilma Rousseff tiene al menos alguna responsabilidad por las ilegalidades en Petrobrás. De acuerdo con el sondeo, el 43% de los brasileros piensa que Rousseff tiene “mucha responsabilidad” por lo que pasó, mientras que el 25% cree que ella tiene “alguna responsabilidad”.

Mientras tanto, las acciones en la compañía continúan descendiendo. La caída en el precio global del petróleo ha golpeado duramente a la compañía, con muchos analistas cuestionando la viabilidad de los planes de Petrobrás para explotar sus yacimientos pre-salinos. Aunque los yacimientos son enormes, el petróleo que contienen son duros y, por lo tanto, costoso de extraer.

Las acciones de Petrobrás operan en el New York Stock Exchange, y el 8 de diciembre la compañía fue golpeada por su primer juicio en EU. Peter Kaltman, un inversionista, presentó una demanda en una corte de Manhattan alegando que la compañía hizo a sabiendas falsas declaraciones y engañó a sus inversionistas. Un día más tarde, al menos 10 fondos de inversión brasileros se unieron a la demanda. Janot, y un equipo de la oficina del fiscal general, viajarán a EU en enero para trabajar con la comisión de valores de EU (SEC) y el departamento de justicia de EU sobre el caso.

• Precio de las acciones

Las acciones Petrobrás PN cayeron un 6,2% a R$11,5 (US$4,4), sus acciones ON cayeron un 6,4% a R$10,7 (US$4,1). Ambos valores son los más bajos desde el 2005. La difusión del diferido informe de ganancias de la compañía está fijada para el 12 de diciembre.

REGIÓN | Comercio con la UE. El 24 de agosto la Comunidad Andina de Naciones (CAN) informó que el comercio bilateral entre la unión aduanera (que comprende a Bolivia, Colombia, Ecuador, y Perú) y la Unión Europea (UE) se elevó un 1,6% año en año en el 2014 llegando a los US$38,8mm. De acuerdo con una declaración de la CAN, el incremento (aunque moderado) muestra que el comercio entre los dos bloques continúa recobrándose luego de haber llegado a un punto bajo de US$20,85mm en el 2009 debido a la crisis económica internacional. El informe de la CAN muestra que después de haber presentado un consistente crecimiento en 2005-2008, el comercio bilateral se hundió en el 2009 pero se ha estado incrementando año en año desde el 2010. Sin embargo, las cifras de la CAN muestran que la recuperación de las exportaciones del grupo a la UE es tentativa, mientras que la balanza comercial permanece ampliamente favorable a la UE. El informe de la CAN muestra que las exportaciones de la CAN a la UE, totalizaron US$18,61mm, un 5,4% menos que en el 2013. De todos modos, la UE fue el segundo mayor mercado para las exportaciones de la CAN, sumando el 15% del total, justo detrás de EU, que acumulo el 26% del total. Las importaciones desde la UE totalizaron US$20,22mm, un 9% más que en el 2013. De acuerdo a las cifras de la CAN, Colombia fue el mayor exportador a la UE, sumando el 49% de todas las exportaciones del bloque, seguido por Perú (31%), Ecuador (16%) y Bolivia (4%). Esto sugiere que el tratado de libre comercio (TLC) firmado entre la UE y Colombia y Perú en el 2012, ha tenido un impacto positivo en el comercio de dos vías entre estos países y continúa conduciendo el comercio entre la CAN y la UE.

BOLIVIA | Exploración petrolera. El 26 de agosto la compañía petrolera de propiedad del Estado Boliviano, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), anunció el inicio de las actividades de exploración de petróleo en el norteño departamento amazónico de Pando, fronterizo con Brasil. YPFB y el gobierno boliviano esperan encontrar alrededor de 50m de barriles de petróleo en el área, que es más de lo que el país actualmente tiene en reservas probadas. El anuncio fue hecho durante una ceremonia a la que asistieron el Presidente Evo Morales, el ministro de hidrocarburos, Luis Alberto Sánchez, y el presidente de YPFB, Guillermo Achá. Sánchez dijo que la firma china, Sinopec, ha recibido permiso para llevar adelante sondeos sísmicos 2D con vista a identificar potenciales yacimientos petroleros en la cuenca de madre de Dios en las municipalidades de Pando de Sena y San Lorenzo por un periodo de 400 días. De acuerdo con Sánchez, YPFB invertirá US$48m en los esfuerzos sin precedentes de exploración en esta área. El Presidente Morales dijo que las comunidades indígenas residentes en el área han aprobado la exploración de petróleo y su potencial exploración en un proceso de consulta previa, a diferencia de otras comunidades indígenas que han expresado su oposición a tales actividades. Morales dijo que esto permitirá el desarrollo de una serie de proyectos de desarrollo en Pando, tales como la construcción de carreteras y puentes vinculando la municipalidad de Puerto Rico (que posee un aeropuerto provincial) a Sena, una inversión de alrededor de US$80m.

El Presidente Morales también anunció que serán implementados una serie de proyectos sociales en la región de Pando. Y reiteró que el objetivo a largo plazo de su gobierno es convertir a Bolivia en “el corazón energético de Sudamérica”, capaz de exportar combustibles fósiles refinados así como también electricidad a sus vecinos.

PERÚ | ‘El Niño’ y China provocan revisión del crecimiento. El 24 de agosto el ministerio de economía & finanzas (MEF) de Perú presentó su borrador de presupuesto del 2016, que pronostica un crecimiento del 3% del PIB para este año y del 4,3% para el 2016. El pronóstico incluido en el presupuesto del MEF es menor que aquel previamente expresado por el ministerio, que en abril predijo un crecimiento de entre el 3,5% y el 4% este año, El titular del MEF, Alonso Segura, dijo que el ajuste estaba basado sobre los temores acerca de una súbita desaceleración económica en China; la esperada fuga del capital internacional a EU una vez que la Reserva Federal de EU avance para elevar las tasas de interés; y la expectativa de que el fenómeno climático del ‘El Niño’ de este año será severo, afectando negativamente al sector agrícola de Perú. Sin embargo, Segura dijo que el gobierno estaba implementando una “política moderadamente expansionista” que incluye un mayor gasto del gobierno en apoyo del crecimiento económico en el borrador del presupuesto de PEN138,4mm (US$42,8mm), un 6,6% mayor que el del año pasado.

• Expansión internacional de ‘Juan Valdéz’

El 25 de agosto la Federación Nacional de Cafeteros (FNC) de Colombia anunció la apertura de dos nuevas tienda de café ‘Juan Valdéz’ en el exterior. En una declaración la FNC dijo que su brazo promotor (Procafecol) había abierto locales de Juan Valdéz en las capitales de Paraguay y Malasia la semana pasada, llevando el número total de locales Juan Valdéz a 326 (incluidos los 225 existentes en Colombia). El presidente de Procafecol, Hernán Méndez, celebró las nuevas aperturas. Señalando que la misión de Procafecol es promover el café colombiano en el país e internacionalmente, Méndez dijo que “nuestra expansión internacional se ha vuelto más dinámica y esperamos abrir nuestro 120^mo local en el exterior para finales de año”.

The head of the Dominican Republic’s attorney general’s office (PGR), Jean Alain Rodríguez, arrived in Washington DC on 3 May to meet his US counterpart, Jeff Sessions. The two officials were scheduled to discuss cooperation in the fight against transnational crime. But the main topic of the meeting appeared to be the ongoing investigations in the Dominican Republic (DR) into the regional government corruption case involving Brazilian engineering firm Odebrecht. Sessions signalled his support for Rodríguez during the meeting, endorsing the PGR’s handling of the case. This provided a significant boon for Rodríguez and the government led by President Danilo Medina, who are under growing domestic and international pressure over the case [RC-17-04].

The Medina administration – and Rodríguez in particular – have been under intense pressure from local anti-corruption group ‘Marcha Verde’, which has called for the attorney general’s dismissal due to the lack of progress made in the Odebrecht investigations so far (in which dozens of suspects have been quizzed but to date not a single person has been arrested, much less charged). But despite several recent sizable protest marches by Marcha Verde, the plodding nature of the investigations look set to continue. On 25 April Rodríguez declared that the PGR was still awaiting more evidence from Brazilian prosecutors before it could proceed further. The announcement heaped the pressure on the Medina government, which faces allegations that the PGR is dragging its feet in the investigations because these implicate senior members of the ruling Partido de la Liberación Dominicana (PLD) – of which Rodríguez himself is a member.

Suspicions about this were exacerbated when on 20 April a local judge approved a plea-bargaining deal struck by the PGR and Odebrecht under which the firm agreed to pay US$184m in compensation for the damages caused by the alleged US$92m in bribes it paid to government officials in the DR in 2001-2014. Odebrecht also agreed to reveal the names of the people to whom it paid bribes, and the PGR argues that this could be critical for clearing up the case. Marcha Verde has rejected this, arguing that the final economic damages figure produced by Odebrecht corruption in the DR may be even higher than the agreed compensation amount. Marcha Verde demanded that the PGR conclude its investigations before any plea-bargaining deal is signed to ensure that it is not detrimental to the Dominican state; and it challenged the deal on these grounds in the courts but this has now been dismissed.

Adding to this pressure, on 2 May a group of civil-society organisations led by Participación Ciudadana (PC), the local branch of international NGO, Transparency International, filed a formal complaint calling for the PGR to investigate whether Odebrecht had made donations to President Medina’s 2016 re-election campaign. DR electoral law prohibits political parties and candidates from receiving donations from foreign individuals or firms. Evidence that Odebrecht provided irregular campaign financing to leading politicians as part of the corruption scheme has been uncovered in other Latin American countries. The PC is calling for an investigation to determine whether this took place in the DR, even if Medina has publicly denied that his campaign received any irregular financing (see sidebar).

Despite these concerns, Sessions offered his support for Rodríguez and the PGR. A PGR statement released after the meeting said it had been very positive and the two had agreed to collaborate in the Odebrecht investigations given that Odebrecht also signed a plea-bargaining deal with US law enforcement in February. The statement adds that the PGR hopes that this collaboration will help expedite its investigations and clear up the case given that following the approval of the plea-bargaining deal it negotiated with Odebrecht, the firm has pledged to provide it with the names of all those to whom it paid bribes by 19 May.

• Irregular financing suspicions

Suspicions that Medina’s re-election campaign may have received irregular campaign financing centres on his links to a public relations adviser, João Santana, who has been sentenced to eight years in prison for his involvement in the Odebrecht corruption scheme in his native Brazil. However, in testimony given to Brazil’s supreme electoral court (TSE) on 4 May, Santana said that while he negotiated financing from Odebrecht for electoral campaigns in Brazil and across Latin America, Odebrecht never financed any elections in the DR – remarks that unsurprisingly were seized upon by President Medina.

The Global Americans think tank has just published a report on ‘The Caribbean’s Extreme Vulnerability to Climate Change’ in which it argues that member states of the Caribbean Community (Caricom) could be heading for “perpetual economic recession”. This warning stems from projections from Caricom’s Climate Change Centre which estimates the annual cost to the Caribbean of inaction could total US$10.7bn by 2025, US$22bn by 2050 and US$46bn by 2100 due to increased hurricane damage, loss of tourism revenue, and infrastructure damage.

One statistic that stands out is that of the 93 disasters recorded in the Americas in 2017, 28 occurred in the Caribbean. The report quotes an International Monetary Fund (IMF) finding in 2018 that for the 1990-2014 period, “damage as a percentage of GDP was six times higher for countries of the Caribbean and disasters occurred with seven times more frequency compared to other states”. A good example of the scale of the damage created in the Caribbean compared with other areas was Hurricane Irma in September 2017. This was hugely damaging to Florida, but for Barbuda it was totally devastating, destroying 95% of all buildings and leading to a complete evacuation of the population.

For the Caribbean, the report points out, “it can take years or even decades for island economies to recover from the impact of a single natural event”. And the problem is compounded by the high levels of debt in many Caribbean countries which makes paying for “protective and adaptation measures simply too costly to bear or to even consider in yearly budget or government development plans”.

Haiti is highlighted as particularly blighted. Having barely survived an earthquake that left 300,000 dead, it suffered another 33 natural events, such as droughts, floods, and storms, between 2010 and 2018. In 2016 Hurricane Matthew destroyed huge swathes of agriculture and affected over 2m people. Then its agriculture was affected again by Hurricane Irma in 2017. Today, it is said 2.6m Haitians out of a total population of 11m still require humanitarian assistance.

Apart from damage to agriculture, other consequences of climate change include a likely increase in dengue fever, decreased fish stocks in local waters, and the destruction of coral reefs. And the threats from climate change to the Caribbean are compounded by the fact that 70% of the population lives on the coast.

One of the main problems for the Caribbean nations is that there is little they can do to affect the causes of climate change. Although they are potentially among the most significant victims of global warming, they are tiny contributors to it. Perhaps for this reason, much of the report’s focus is on increasing global awareness of the Caribbean’s unique vulnerability coupled with building disaster response capabilities.

One interesting recommendation, however, concerns private-sector involvement in building resilience. The report points out that given the Caribbean’s high dependence on tourism, “the private sector can and must play a significant role in installing and developing resistant infrastructure and biodiversity preservation initiatives in the at-risk coastal communities”. The report urges hotel chains and tourism companies to help fund disaster recovery efforts. Reforestation is also singled out as a key preventive measure, and the report points approvingly to initiatives in the Dominican Republic – in contrast to neighbouring Haiti which is suffering a serious loss of its forests, partly through the direct impact of natural climate events, and partly due to the population having little choice but to provide fuel and shelter in their wake.

• Haiti’s forests

A study published in Proceedings of the National Academy of Sciences in 2018, titled ‘Haiti’s biodiversity threatened by nearly complete loss of primary forest’, made dire (and oft quoted) predictions that, with less than 1% of its original primary forest left, all forest in Haiti will be gone by around 2035. However, other researchers familiar with Haiti have raised serious concerns over the study’s methodology, not least querying the newly defined term ‘primary forest’. The reasons for, and consequences of, deforestation in Haiti are complex, and if public policy to improve the situation is to be effective it will require a true understanding of the nuances.

A historic move to increase transparency in Paraguay has laid bare the sometimes extraordinary wealth accumulated by public officials while in office. This has prompted calls for a number of public figures and politicians to be investigated for illicit enrichment.

On 24 June, following a supreme court ruling earlier that month, Paraguay’s comptroller general’s office (CGR) began making public the sworn declarations of assets (DDJJ) of current and former public officials from all three branches of government dating back to 1998. The CGR initially published 2,000 DDJJs, dated from 1998 to 2017, in late June, with plans to make 150,000 public by late August. After consulting this newly available public information, Paraguayan media have flagged the remarkable increase in wealth of some public officials during their time in office (including presidents, judges, and ministers) and called for this to be investigated.

Freedom of information

The supreme court ruling was the result of a two-year legal struggle prompted by journalists asking that the DDJJs be made public as part of a freedom of information request. Juan Carlos Lezcano, a journalist with national daily ABC Color, had previously made the request at least twice, in 2016 and 2017. In 2018, the issue went to the supreme court after then-comptroller general Enrique García (2016-2019) appealed the order to make DDJJs public, upheld by two lower courts, on the grounds that it was unconstitutional (García resigned in April 2019 to avoid being impeached, as he faced investigations over corruption and illicit enrichment).

On 11 June this year, the supreme court delivered a victory to Paraguayan journalists and anti-corruption campaigners by declaring, by eight votes to one, that DDJJs must be made public. The Instituto de Derecho y Economía Ambiental (Idea), a civil society organisation which is vocal on issues of transparency, declared the ruling an “incomparable victory for citizens”, stressing the important role played by civil society and journalists in reaching the final ruling. Justice Carolina Llanes declared the publishing of the DDJJs “an excellent democratic tool to avoid mismanagement, corruption or the abuse of power.”

Corruption concerns

There are concerns that this tool is not going to be used. Intermittent protests against corruption followed the first publication of the DDJJs, with some of the assets declared drawing immediate attention. After the attorney general’s office initially said that legal complaints had to be filed before investigations into suspicions of illicit enrichment could be launched, the head of the anti-corruption secretariat (Senac), René Fernández, insisted that “the public ministry has an obligation to act on any notitia-criminis”. Paraguay’s anti-corruption authorities – including attorney general Sandra Quiñonez and the incumbent comptroller general Camilo Benítez Aldana – held a first meeting to discuss the newly public DDJJs on 29 June, after which they promised to scrutinise allegations of illicit enrichment and stressed that “there will be no impunity.”

• Suspicious wealth

The DDJJ of former president Horacio Cartes (2013-2018), who is by no means facing his first scandal, drew particular attention, as it shows the former president as having a net worth of hundreds of millions of US dollars. Cartes saw his personal wealth increase by US$35m and several private aircraft in his first year as president, declaring assets worth US$235m in 2014. The DDJJ of incumbent President Abdo Benítez, dated 2016 (when he served as a senator), showed him as having a personal fortune of G$6.5bn at the time (just short of US$1m at current value).

President Mario Abdo Benítez (whose DDJJs prior to him becoming president have also been published) completes the second of his five years in office this August, two years during which his stated commitment to fighting corruption has often been brought into question. If his administration is not seen as cracking down on the abuses revealed in the DDJJs – including by incumbent officials – he will face backlash from civil society and the political opposition.

The role of Chinese telecommunications company, Huawei, in Brazil’s ‘5G’ rollout is still uncertain, and an ongoing cause of friction in relations between Brasília and Washington. 

In an interview published by Brazilian daily O Globo on 29 July, US ambassador to Brazil Todd Chapman said that Brazil would suffer “consequences” if it selected the Chinese company to build its 5G cellular telecoms network. The US claims Huawei violates intellectual property rules and collects data for the purpose of espionage by the Chinese state. Huawei denies this. In Chapman’s telling, the “consequences” could involve reduced investment interest in Brazil among companies worried over the protection of their intellectual property. There was also a carrot as well as a stick. The ambassador said the US International Development Finance Corp (IDFC) has US$60bn in its coffers to help allies who chose “trustworthy suppliers” in the place of Huawei, such as Sweden’s Ericsson, South Korea’s Samsung, or Finland’s Nokia.

Brazil’s Vice President Hamilton Mourão responded on 3 August telling a press conference for foreign correspondents that his government did not fear US pressure on the issue. He added that Brazilian legislation does not allow Huawei to be excluded from the bidding process as long as it is transparent in observing the bidding rules. Mourão pointed out that “over one third” of existing 4G telecoms equipment in Brazil has been provided by Huawei. Any decision to ban the company would therefore cause serious difficulty and financial losses to the country’s mobile phone operators. The vice president acknowledged the existence of a trade and technology war between China and the US (respectively Brazil’s first and second most important trade partners) but said that Brazil wished to maintain its links with both.

US pressure on the issue may already have had some impact at the margins. In early July sources at Telecom Italia (TIM) said it had excluded Huawei from a tender for 5G equipment for use in both Italy and Brazil. Company sources said the decision was part of a supplier diversification policy. Officially, however, the company’s Brazilian subsidiary, TIM Participações, said it had not taken any decision over its suppliers and might hold a second tender next year after 5G frequencies are allocated. Brazil’s 5G frequency auction is now scheduled for June 2021, after two earlier postponements. It has been estimated to bring in up to US$5.6bn in government auction revenues and to trigger over US$24bn in private sector investments over the following five years, but these numbers are out of date and are probably underestimates. What is clear is that the quarrel over Huawei may lead to very costly delays limiting the productivity gains 5G offers across the wider Brazilian economy.  

President Xiomara Castro this week sanctioned legislation which revokes the legislative framework for the so-called employment and economic development zones (Zedes). These were passed in 2013 under the right-wing Partido Nacional (PN) government led by Porfirio Lobo (2010-2014) and promoted by Lobo’s successor, Juan Orlando Hernández (PN, 2014-2022), who, in another early indication that Castro means business, was extradited to the US this week.

Zedes are administrative entities with the power to autonomously implement their own administrative, judicial, security, and tax systems, and they have attracted controversy amid concerns that they violate national sovereignty and promote tax evasion. Their abolition was a key campaign promise by Castro, who convincingly won the November 2021 election on various anti-corruption pledges, on which she and her leftist Partido Libertad y Refundación (Libre) government continue to deliver.

In a tweet, Castro declared 25 April to be the “most important of the 88 days of my administration”. This followed her promulgation of the Zedes-related legislation which was approved on 20 April by the 128-member unicameral congress along with a constitutional reform which must be ratified next year, related to the changes. There are currently three main Zedes operating in the country: Ciudad Morazán (Cortés department), Orquídea (Colón), and Próspera (Bay Islands).

Revoking the Zedes had been a major demand of protest movements like Movimiento Nacional Contra las Zede y por la Defensa de la Soberanía Nacional, a group of civil society organisations which formed in June 2021. That month the national anti-corruption council (CNA), a civil-society umbrella group, released a study entitled the ‘30 capital sins of the Zedes’, outlining various objections to the administrative entities – not least their violation of the rule of law.

This echoed concerns raised by the United Nations (UN) office in Honduras regarding the constitutional and legal framework of the Zedes, which the UN office warned could imply serious risks to Honduras’s fulfilment of human rights obligations. In its study CNA also highlighted the cost to state coffers. Pointing out that Zedes only assign 12% of total tax take to the Honduran state, it suggested that tax exemptions would translate into losses with regard to taxes on sales, consumption, and production alone of L27.86bn (US$1.16bn) over the next decade at a conservative estimate.

Hernández extradited

Revoking the Zedes is the latest campaign promise on which Castro has delivered. Others include, inter alia, her request to the UN for support to establish a commission against corruption and impunity in Honduras (CICIH) and legislation repealing a 2014 law on the classification of public documents related to security and national defence – another major demand of civil-society groups [WR-22-10] concerned about corruption.

But the standout pledge so far was to end impunity, to which end, on 21 April, her predecessor, Hernández, was extradited to the US where he is being charged with “participating in a corrupt and violent drug-trafficking conspiracy to facilitate the importation of tonnes of cocaine into the US from 2004-2022”, as well as two related weapons charges.     

This followed the authorisation of Hernández’s extradition by the supreme court (CSJ) after his headline-grabbing arrest in February, less than a month after leaving office [WR-22-07]. Hernández, who has repeatedly denied the allegations, follows in the footsteps of the country’s late former president Rafael Callejas (1990-1994), who also faced justice in the US, pleading guilty to football-related racketeering and corruption charges there in 2016.

Indictment

According to the US Department of Justice, Juan Orlando Hernández is charged with abusing his position as president to “operate the country as a narco-state” and is “alleged to have received millions of dollars from multiple drug-trafficking organizations, including from the former leader of the Sinaloa Cartel, known as El Chapo”. The indictment also alleges that “Hernández corrupted legitimate public institutions in the country - including parts of the national police, military, and national Congress”. He stands accused of involvement in the same drug trafficking ring as his brother Juan Antonio (‘Tony’) Hernández, a former PN national deputy, who was arrested in the US in 2018 and received a 30-year prison sentence in March last year.

MEXICO | López Obrador goes after breweries. President Andrés Manuel López Obrador said this week that companies will no longer be permitted to produce beer in the country’s northern states. If breweries wanted to continue operating in Mexico, the president said, they should do so in the southeast of the country, where the Grijalva, Usumacinta, and Papaloapan rivers flow, rather than in the arid north.

Mexico is one of the world’s biggest beer producers and the largest exporter. Although López Obrador recognised the industry brought in investment, foreign currency, and jobs, he said the priority was to guarantee water for domestic use. “This is not to say we won’t produce any more beer, it’s to say that we won’t produce beer in the north. That’s over,” he said at a press conference on 8 August, without entering into practicalities.

Mexico is currently facing its most severe water crisis in decades with many water reservoirs – particularly in northern states – at critically low levels. The state of Nuevo León has been particularly badly affected, with the metropolitan area of the state capital Monterrey severely lacking drinking water [WR-22-31].

The severe drought which has been afflicting the northern states of Brazil in recent weeks has caused water levels in the Amazon basin to drop to a record low in recent years. The environmental monitoring initiative MapBiomas, run by NGOs, academics, and technology companies, reported on 16 October that Amazonian surface water registered its lowest level this September since 2018, heavily impacting local biodiversity.

In September 2022, MapBiomas registered 4.95m hectares (ha) of surface water in the state of Amazonas. One year later, the surface water dropped to 3.56m ha. The municipality in Amazonas state which registered the greatest yearly drop in surface water was Barcelos, on the banks of the Rio Negro, losing 69,000 ha of water. It was followed by the municipalities of Codajás and Beruri, both on the banks of the Amazon River.

On 16 October, the Brazilian branch of the NGO World Wildlife Fund (WWF) also released a statement expressing concern about the degradation of waterways in the Amazon biome. WWF Brasil pointed out that the increasingly dry conditions have been a long-term trend and are not unique to Brazil, as all the South American countries which include Amazon rainforests in their national territory have been losing water over the past decade, with a total decrease in surface water levels of 1m ha across all nine Amazonian countries.

The NGO also highlighted that the river dolphin population in the Brazilian Amazon has been severely affected by the drought. As of 16 October, more than 150 dolphins have been found dead on the banks of Lake Tefé, in Amazonas state. The dolphin population in the Mamiraurá Sustainable Development Reserve, also in Amazonas state, declined by 65% between 1994 and 2016, which WWF Brasil attributed to the decreasing levels of fresh water. At a global level, freshwater areas have decreased by a third since 1970 and the global populations of freshwater-dwelling animals have fallen by around 83%.

The federal biodiversity conservation agency (ICMBio) reported on 16 October that the rising dolphin deaths in Tefé, first noted on 23 September, coincided with rising water temperatures. The autopsies carried out by ICMBio’s veterinarians have not specified one primary cause of death, but they have not ruled out the possibility of water contamination.

Government reinforces fire-fighting efforts

In addition to the drying up the Amazon region’s waterways, the recent drought has increased the risk of forest fires. On 12 October the federal justice & public security ministry authorised the deployment of the national guard (Força Nacional) to assist local fire-fighters in the northern state of Amazonas. The following day, the environment ministry announced the deployment of an additional 149 firefighters to Amazonas.

Haiti’s ambassador to the Organization of American States (OAS), Léon Charles, a former police (PNd’H) chief (2004-2005; 2020-2021), has become the first high-profile figure to step down after his name appeared on a list of some 50 individuals indicted by local judge Walther Wesser Voltaire in relation to the July 2021 assassination of president Jovenel Moïse (2017-2021). While a parallel investigation has progressed in the US, these are among the first charges unveiled in Haiti in relation to Moïse’s murder. With the mastermind of his murder yet to be identified, the indictments made headlines for featuring the name of Moïse’s widow.

Charles resigned on 21 February, writing on social media that this was “to have free rein to defend myself against the far-fetched accusations included in this ruling of shame!”. His resignation came two days after local media leaked the 122-page report by Voltaire accusing him of murder, possession and illegal carrying of weapons, conspiracy, and criminal association. According to the report, Moïse called Charles during the fatal attack at his residence but, when he failed to act, phoned another official for help after 18 minutes. The document relies heavily on the testimony of Joseph Félix Badio, a leading suspect in the case arrested last November [WR-23-46] and who is on the list of indictments. Badio is cited as saying Charles took part “in many meetings” to plot Moïse’s arrest – the initial aim before a last-minute change to the order to kill him.

Also cited among those indicted is former First Lady Martine Moïse, who was injured in the deadly assault, and former prime minister Claude Joseph (2021), who led the country briefly after Moïse’s murder before Ariel Henry took over unelected. Both are charged with complicity and criminal association. The document states that Martine Moïse refused to cooperate with requests to answer questions about her husband’s killing and made statements “so full of contradictions that they ultimately discredited themselves”. However, the indictment does not directly accuse Moïse of plotting the murder. It also does not provide direct evidence of her involvement. Instead, it cites testimony from Badio as claiming that she was scheming with others to take over the top job.

Crossover with US investigation

There is some crossover between the names of those who feature in Voltaire’s report and those charged in the US in relation to the separate investigation taking place there. Among others these include Joseph Vincent, a Haitian-American, John Joël Joseph, a former Haitian senator (who have both issued guilty pleas), and Christian Emmanuel Sanon, a US-Haitian pastor, who conspirators reportedly were seeking to install as Moïse’s replacement, according to US charges. The US Department of Justice has previously suggested that the motives behind the plot stem from money and power; through ejecting Moïse, his replacement “would serve the co-conspirators’ political goals and financial interests”.

Caricom losing patience with Henry

Prime Minister Ariel Henry’s name did not feature on the list despite previous media reports linking him with Badio [WR-22-03]. However, Henry, who recently faced mass protests calling for his resignation [WR-24-06], is facing pressure from the Caribbean Community (Caricom) which held a regular summit in Guyana from 25-28 February.

In an interview on 26 February, Antigua & Barbuda’s Prime Minister Gaston Browne said that Henry needs to “step aside” and allow for efforts to continue unimpeded in finding a solution to the socio-economic and political situation in Haiti, where no elections have taken place since 2016 and no democratically elected legislative officials have served since January 2023. Browne said Henry’s presence in the government is “part of the problem”.

The latest (15 January) report on Haiti by the United Nations Secretary General attributes the impasse in the country and failure to move on organising elections, in part to continued demands from the Montana Accord, a leading opposition group, for Henry’s resignation as a precondition for dialogue. The Caricom meeting did produce the announcement that Henry had agreed to hold elections by 31 August 2025. Browne also told reporters on 28 February “we have made a lot of progress” in talks at the summit, and Henry had “committed to serve as an honest broker and to share power”. The Bahamas Prime Minister Philip Davis said Caricom would lead an international assessment team to help with election planning in Haiti, reporting back to Caricom by 31 March. 

MEXICO | First USMCA labour dispute panel resolved. On 26 April Mexico’s economy ministry (SE) announced that a dispute resolution panel set up under the US-Mexico-Canada Agreement (USMCA) had ruled in favour of Mexico. The US government requested the panel in August last year – the first to be established under the USMCA’s rapid response labour mechanism (RRM).

The dispute concerned the San Martín mine in Zacatecas state, which is owned by Industrial Minera México SA de CV, a subsidiary of Grupo México, one of Mexico’s biggest conglomerates. The three-member panel ruled that it did not have jurisdiction to rule on the case given it relates to a dispute which predates the creation of the USMCA trade deal in 2019. The SE said the decision set an important precedent in terms of non-retroactivity in such disputes.

This comes as the US requested a second RRM panel on 16 April, in relation to a labour dispute at a facility operated by Spanish firm Atento Servicios in the city of Pachuca, Hidalgo state.

Last month President Javier Milei fired his foreign minister, Diana Mondino, replacing her with Argentina’s ambassador to the US, Gerardo Werthein. The move came after relations between the two had reportedly been deteriorating for months. Mondino’s tenure as the chief of Argentine diplomacy was marked by efforts to ease spats caused by Milei, who has repeatedly insulted various world leaders with whom he is ideologically opposed. The ministerial change is expected to signal a greater push by Milei to align Argentina with right-wing allies such as the US president-elect, former president Donald Trump (2017-2021).

An economist by training, Mondino had experience in academia and in the private sector, and only entered politics in 2023, winning a seat in congress which she ultimately did not take up due to her appointment as foreign minister. This year she led delegations to both Brazil and China, Argentina’s two largest trade partners. On the campaign trail, Milei had suggested cutting ties with both countries but, under Mondino, Argentina’s foreign ministry had sought to defuse the tensions with international partners, not only with Brazil and China but also with other countries such as Colombia and Spain. Milei’s confrontational style and incendiary rhetoric against Colombia’s President Gustavo Petro in March and Begoña Gómez, the wife of Spain’s prime minister, Pedro Sánchez, in May resulted in the threats by Colombia to expel Argentina’s diplomatic staff in Bogotá, while the spat with Spain led to the withdrawal of the Spanish ambassador in Buenos Aires. Both these diplomatic crises were later resolved however and Argentina’s foreign ministry managed to normalise ties with each country.  

Under Mondino, many of the foreign ministry’s most experienced career diplomats retained their posts, but over the past year President Milei and his sister, Karina Milei, serving as secretary general of the presidency, have reportedly been appointing officials to the ministry who are more aligned with their more radical right-wing worldview. Allies of Karina Milei and Santiago Caputo, an influential presidential adviser, increasingly took precedence over Mondino’s preferences. A notable appointment was Nahuel Sotelo, who took office in August as the foreign ministry’s secretary of worship and civilisation, a post which oversees Argentina’s relations with religious organisations such as the Catholic Church. Formerly serving as a deputy in the Buenos Aires provincial assembly affiliated with Milei’s party La Libertad Avanza (LLA), Sotelo declared that he would use his role to champion conservative values on the world stage and challenge the ‘2030 Agenda’ of sustainable development goals of the United Nations (UN).

Mondino was largely a casualty of this trend, of Milei’s inner circle tightening its grip on the foreign ministry. Argentine newspapers had speculated for months that her departure could be imminent, and the trigger came on 30 October, when Mondino voted in favour of a non-binding UN resolution which called for the US to lift its economic embargo on Cuba. The UN has passed this resolution every year since 1992 (except in 2020 when it was postponed due to the coronavirus [Covid-19] pandemic) and Argentina has traditionally voted for the resolution. However, Milei has sought to further align Argentina with the US, and Mondino defied his orders in backing the UN calls to lift the embargo. After firing Mondino, Milei suggested he would carry out a purge of the foreign ministry to root out all staff who supported Mondino’s decision to maintain diplomatic tradition in voting for the UN resolution. This purge is expected to be overseen by Werthein, an appointee who reportedly has the approval of Karina Milei and the president’s closest advisers.

Milei and Trump  

On 14 November Milei travelled to the US for a two-day visit at Trump’s Mar-a-Lago resort in Florida. Milei and Trump had previously met in February this year but this was their first meeting since Trump’s election victory. Milei has suggested that, after Trump takes office in January, Argentina would seek a free trade agreement with the US, in addition to other potential areas of bilateral cooperation.

Peru’s congress, which is dominated by right-wing political parties, has come in for increasing criticism in recent weeks, following a series of faux pas.

Perhaps the most notorious incident bringing the competency of Peru’s lawmakers into question came when congress approved a new law on preventive detention on 12 December, only to realise that it had made a serious mistake. It ended up having to strike the new law down only 48 hours later, on 14 December.

The muddle began when the congressional majority approved Law 32181. This amended the penal code to exempt police offers from preventive detention when they are accused of wounding or killing suspects while in pursuit of their duties. But whether by mistake or for some other reason, the text voted into law extended the exemption to anyone accused of a crime in conditions of “non-flagrancy” (in other words those suspected of a crime who are not caught “in the act”).

The change in approach had an immediate and negative impact. On the same day that the amendment was signed into law, and invoking the new non-flagrancy clause, an appeals court in the city of Huara, north of Lima, freed 10 members of the Las Hienas Verdes criminal gang who are facing charges of extortion, homicide, and carrying illegal firearms. Three of the 10 accused are serving police officers. Congress then voted 79-8 to correct its earlier mistake. A wide group including the attorney general’s office and legal experts had warned against Law 32181 which they described as “a setback in the fight against criminality”.

Reintroducing death penalty

Also coming in for some criticism is the newfound enthusiasm of conservative deputies and President Dina Boluarte for bringing back the death penalty. Following high-profile media coverage of the murder of a 12-year old girl, believed to have been sexually assaulted, in a poor district in Lima, Boluarte and allied deputies have been arguing over the last week for the death penalty to be restored for child rapists. But the opposition and the judiciary argue that this is being done for short-term populist opportunist reasons.

Javier Arévalo, the president of the judiciary, described the death penalty as a “savage measure” no longer applied by democratic societies, adding that it was a matter that “should not even be up for debate”. In fact Peru’s 1979 constitution prohibits the death penalty (except for treason). Peru is also a signatory of various international treaties outlawing the penalty.

Undeterred by this, the populist right-wing Alianza para el Progreso (APP) party presented a bill on 13 December for Peru to withdraw from the American Convention on Human Rights, or Pact of San José, to clear the way for re-introducing capital punishment, as well as denouncing the Inter-American Court of Human Rights (Corte IDH). Peru signed up to the Convention in 1978. The ombudsman, Josué Gutiérrez, who denounced the APP’s initiative as “populist”, said Peru should not be abandoning the regional justice system in order to “apply the death penalty [for unpopular politicians] to possibly gain an extra point of popularity”.

The right-wing Renovación Popular (RP) and the left-wing Perú Libre (PL) have also long advocated Peru’s withdrawal from the Pact of San José, accusing it of imposing restrictions on Peru’s sovereignty. Critics claim that this is for an ulterior motive and that legislators in the scandal-plagued and deeply unpopular congress are determined to shield themselves from future criminal investigations and prosecution and are concerned that they cannot manipulate international courts of justice in the same way that they can national ones.

Tensions with economy ministry

Meanwhile, relations between congress and the economy ministry are not at their best point. The economy ministry has issued a statement saying that two bills presented in congress designed to offer fiscal incentives will cost the state PEN2.6bn (US$697m) in lost revenue.

The economy ministry says the legislation is misleadingly tagged as helping small farmers. In reality, it claims, the legislation will benefit around 500 big agricultural companies which already receive favourable tax treatment.

Unpopularity

Both Peru’s presidency and the leadership of congress continue to be held in dramatically low regard by voters. A Datum Internacional survey published in mid-December showed President Boluarte has a record low approval rating of 3%, almost the same as the margin of error, while the president of congress, Eduardo Salhuana, got only 5% approval. 

Moratorium on death penalty

Despite moves by President Boluarte and several parties in congress to restore the death penalty, Peru’s delegation to the United Nations (UN) voted in favour of a moratorium on the use of the death penalty in a vote in the UN General Assembly on 17 December with a view to its abolition. More than two-thirds of UN members voted in favour of the moratorium.

Boluarte admits nose operation

President Boluarte admitted on 12 December, in a televised address surrounded by members of her cabinet, that she had a nose operation in June-July 2023. She had earlier remained silent on the matter, but finally spoke out after her former prime minister, Alberto Otárola, confirmed a week earlier to the congressional oversight commission that media reports about the surgery were true.

The key issue in the eyes of opposition parties is that Boluarte was absent for 12 days without formally advising congress or appointing a presidential stand-in. Boluarte said the operation was to resolve a respiratory problem and not for cosmetic reasons.

Boluarte insisted that she had continued to carry out her presidential duties as normal. She did not directly address opposition criticism or more recent media claims that her signatures on government decrees issued during her absence may have been falsified. The right-wing-dominated congress appears intent on standing by Boluarte, over whom it can exert control.

Heavy rains hit central and eastern Mexico in early October, killing at least 80 people and leaving a trail of destruction that will have severe economic impacts on local communities and households that now face the prospect of trying to rebuild their lives.

Torrential rain caused severe flooding and landslides in 110 municipalities in Veracruz, Hidalgo, Puebla, Querétaro, and San Luis Potosí states from 6-9 October. Analysts at Mexican private bank Banamex estimate that the rains caused damage worth the equivalent of only 0.01-0.06% of national GDP, citing the fact that the affected areas do not make very large contributions to the Mexican economy. They also forecast a limited impact on the inflation rate of up to 0.02%.

Local economic impact

This seemingly small impact discounts the devastating effects on local economies due to damage to homes, crops, and infrastructure, as well as interruptions to economic activity as roads are blocked, stock is damaged, and people are unable to work. For example, blocked roads around the city of Poza Rica, Veracruz state, a hub for fuel transport, have affected the movement of supplies, while floods have affected port activity at Tuxpan, Veracruz state. The rains have also impacted the local tourism industry, and power cuts due to damaged electricity infrastructure have impacted many businesses and households.

Crop damage negatively impacts production of basic foodstuffs such as beans and corn, reducing local food security and pushing up food prices. For example, the price of courgettes at Mexico City (CDMX)’s Central de Abasto, the capital’s main wholesale market, reportedly increased by M$5 (US$0.27) per kilo in the wake of the rains. Cash crops such as coffee and citrus fruits have also been affected: coffee producers in mountainous areas of Puebla state have lost access to export markets due to landslides, which is potentially ruinous for small producers that do not have the necessary financial buffer to deal with the associated loss of income.

Disruption to economic activity will hit profits at formal businesses but can constitute an existential threat to those that work in the informal economy. Not only do they have no way of making money, the rains may have damaged or destroyed their merchandise and they do not have the same kind of social protection afforded to those in formal jobs, leaving them particularly vulnerable.

Government response

In response to the rainfall, President Claudia Sheinbaum activated Plan DN-III-E, which uses military resources to aid civilians in the aftermath of natural disasters, and 7,300 members of the armed forces were deployed to affected areas. Sheinbaum has said that her government will spare no expense in helping those affected and repairing damaged infrastructure. She has pledged at least M$10bn to deal with the impact of the rains, covering the initial emergency response as well as reconstruction efforts. Sheinbaum stated that this did not include the investment to be made by Agroasemex SA , the government-run insurance company, which has already assigned companies to provide assistance to schools, clinics, and roads.

According to a government census, more than 103,000 households were affected by severe rains and flooding across the five states, and officials have started to pay initial cash transfers of M$20,000 as well as giving out vouchers for food and household items. There will also be further support for rebuilding housing on a sliding scale depending on the level of damage: M$25,000 for moderate damage, M$40,000 for major damage, and M$70,000 for total loss. In addition, the agrarian, territorial, and urban development ministry (Sedatu) will relocate homes located in risk areas. Affected businesses will also receive M$50,000.

Criticism

Despite these pledges, Sheinbaum has come in for criticism for the speed of the government’s response from some residents in affected areas, as well as those who have questioned the government’s preparedness following the dissolution of the Fondo de Desastres Naturales (Fonden) natural disaster fund. Fonden was dissolved in 2020 by Sheinbaum’s political mentor, former president Andrés Manuel López Obrador (2018-2024), citing corruption concerns, meaning that disaster response is now funded from the main federal budget. While Sheinbaum has argued that there are sufficient funds put aside to deal with the impact of the rains, the dissolution of Fonden may have slowed the response.

This will provide a valuable talking point for opposition politicians, who have otherwise struggled to dent Sheinbaum’s approval ratings during her first year in office, and the response to the rains will therefore likely receive considerable scrutiny. This also builds on criticism of López Obrador’s slow response to hurricane Otis in 2023 [EB-23-12], as well as the fact that the-then president made only a brief visit to the affected area, adding to doubts around the ability of the ruling left-wing Movimiento Regeneración Nacional (Morena) party to respond to such events.

The debate around Fonden and emergency responses more widely is also likely to remain pertinent as Mexico is highly vulnerable to natural disasters: in 2024, it was one of the countries worst affected by natural disasters, suffering 30% of global economic losses, according to an annual report from UK-headquartered insurance and risk management firm Aon. 

However as things stand, climate resilience does not appear to be a priority for the government, which has proposed reducing the amount of resources allocated to climate change mitigation efforts in the 2026 budget, sparking criticism from environmental NGOs including Greenpeace [SSR-25-11]. These proposed cuts come at a time when the frequency and intensity of natural disasters is forecast to increase as climate change intensifies, ramping up the pressure on Sheinbaum’s government to invest in better preparations for these kinds of events, rather than making cuts. 

Although the government is attempting to make savings where it can as part of Sheinbaum’s bid to cut the fiscal deficit, political pressure may force a rethink, particularly if the communities affected by the recent rains struggle to recover. Banamex believes that reconstruction efforts could provide a boost to economic growth, which would make up for losses this year, citing a similar effect in Guerrero state following hurricane Otis in 2023. However, there is a risk that some households, particularly those dependent on income from small agricultural producers or the informal economy, could see a reverse in recent progress in social development, with some potentially falling into poverty as they try to rebuild their homes and livelihoods. 

Sheinbaum could attempt to head off further criticism by forming a new disaster response fund along the same lines as Fonden, but this would need to be adequately funded and work in tandem with preventative measures such as improvements in infrastructure and early warning systems. However, with budget pressures mounting this is unlikely to happen, meaning that Sheinbaum and Morena could be vulnerable to further criticism if reconstruction efforts, and the response to future natural disasters, are poorly managed.

Public health

There are also concerns around the potential impact on public health, with Veracruz governor Norma Rocío Nahle García urging people to get vaccinated against tetanus, a potentially fatal disease spread by bacteria spores that are stirred up by flooding and can enter the body through open wounds. Standing water can also encourage the spread of mosquito-borne diseases such as dengue fever, potentially adding to pressure on local healthcare services and adding to the long-term impact on the affected areas.