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PERÚ | Venta de acciones de Petroperú. El 24 de marzo el gobierno peruano publicó las reglas para la venta de hasta el 49% de las acciones en la firma petrolera estatal, Petroperú. En diciembre del año pasado, el congreso aprobó una propuesta del gobierno para abrir Petroperú a la participación privada por primera vez, como parte de los planes para reorganizar la firma a fin de fortalecer su gobierno corporativo, y ayudar a reunir fondos para llevar acabo el propuesto proyecto de modernización de US$3.5mm de la ya antigua refinería de Talara de Petroperú para incrementar sus niveles de producción de combustible de 65.000 barriles por día (bpd) actualmente a 95.000bpd; y eventualmente reducir las importaciones de combustible del país.

De acuerdo con las reglas publicadas en la gaceta oficial, Petroperú realizará una Oferta Pública Inicial (OPI) en el mercado de valores local abierta a todos los inversionistas. A este efecto, Petroperú ahora contratará un banco de inversión que lo asistirá con el proceso de la OPI, así como también una firma consultora internacional que le ayudará en el diseño de la estrategia de reorganización de la firma que incluirá la reestructuración de sus activos físicos y financieros, sus operaciones, y su gobierno corporativo.

CHILE | Lacnic convention. On 27 October the Latin American and Caribbean Network Information Centre (Lacnic), the regional internet registry managing body, opened a five-day convention in Santiago. The Lacnic convention is the most important event for the regional internet community as it gathers experts from across the region to discuss the future of the ‘network of networks’ and its administration in the region. This year’s Lacnic also hosts the Latin American Network Operators Group (Lagnoc) 2014 convention, which represents the community of regional internet network operators to discuss issues related to the installation and operation of internet networks across the region.

One of the main discussion topics of this year’s convention will be the region’s upgrade of the Internet Protocol version 4 (IPv4), the current system that assigns a unique alfa-numerical address for each server, webpage and apparatus that helps to route Internet traffic. For a number of years now the Internet Corporation for Assigned Names and Numbers (ICANN), the NGO responsible for the coordination and maintenance of databases of unique identifiers related to the namespaces of the Internet, has been warning that IPv4 addresses are reaching their limit and that there is a need to migrate to a new system- IPv6, developed by the Internet Engineering Task Force (IETF).

The migration from IPv4 to IPv6 will represent the most significant challenge to the region’s internet network over the next few years. According to Arturo Servín, content delivery manager for Google in Latin America and the Caribbean, IPv6 has currently been adopted by just 4.5% of internet users in Chile, Brazil and Peru; a “positive” figure compared to 2011. However, Servín said that there appears to be a “lack of awareness-raising” in the region about the importance of migrating to the new system. This lack of foresight could particularly affect businesses when the use of IPv6 is standardised. Lacnic attendees, such as Patricio Poblete, director of Chile’s network information centre (NIC Chile), underscored the need for participating countries to adopt the new system. Poblete said that Chile has long been looking to upgrade to IPv6; something it brought to the attention of the wider Latin American community at the 2007 conference. Pedro Huichalaf, Chile’s deputy minister of telecommunications, hailed Chile’s role in transforming Latin America’s internet network by hosting Lacnic 22.

Development: On 10 November the governor of the province of Buenos Aires and the presidential candidate of Argentina’s ruling Frente para la Victoria (FPV, Kirchneristas) faction of the Partido Justicialista (PJ, Peronists), Daniel Scioli, said that the provincial government would seek to find a “peaceful and negotiated” solution to the occupation of 60 hectares of land in the Buenos Aires municipality of Merlo.

Significance: Scioli, who is currently concentrating on campaigning ahead of the 22 November second-round presidential run-off, made the remarks after some 600 poor, homeless families, who are demanding the construction of social housing in the Merlo area, invaded the cleared land and began building precarious houses. With local authorities saying that the invasion has political undertones and ordering the immediate eviction of the squatters, concerns about an outbreak of violence quickly spread. This is something that Scioli is keen to avoid as it could severely undermine his electoral campaign with just 11 days left before election day. But Scioli is also aware that he can ill-afford to be seen as being lenient with the squatters or condoning land invasions.

• The homeless families invaded the plot of land adjacent to the ‘Barrio Nuevo’ social housing project, currently under development, yesterday, demanding the construction of additional social housing in the area.

• The episode took place just as Merlo’s FPV mayor-elect, Gustavo Menéndez, who won election in the 25 October general elections, was due to begin planning the transition of power from the long serving incumbent PJ mayor, Raúl Othacehé. Menéndez, who defeated Othacehé in the PJ primaries in August to become the party’s sole mayoral candidate, immediately accused Othacehé of being behind the invasion. Menéndez said that Othacehé, a local caudillo who has held sway in Merlo since 1991, had ordered the invasion to “generate social chaos” and undermine the new administration.

• With tensions mounting, Scioli ordered an emergency meeting between provincial and municipal government officials to analyse the situation, as well as the deployment of a 300-strong provincial police contingent to reinforce security in the Merlo area and prevent further land invasions. From the campaign trail Scioli stated in an interview “we’ll analyse the situation carefully. We have to determine if it’s a political stunt or if it answers to a genuine need for housing”. However, Scioli was clear that “we are totally opposed to illegal [land] invasions”. He said that the police were ready to evict the squatters if ordered to do so by a judge but was adamant that “we don’t want violence, nor anything to regret”.

Looking Ahead: Besides presenting Scioli with a difficult problem to solve in the midst of the campaign, the conflict also exposes the existing deep political divisions within the PJ, which many believe will ultimately lead to Scioli losing the run-off, as more PJ supporters turn away from the FPV.

Just days after Guillermo Lasso managed to squeeze into the second round of Ecuador’s presidential elections by the skin of his teeth he is favourite to succeed President Rafael Correa. Lasso, of the centre-right Movimiento Creo, who finished some 11 percentage points adrift of Lenín Moreno of the ruling left-wing Alianza País (AP) in the elections on 19 February, now enjoys 52.1% of voter intentions to 47.9% for Moreno, according to a survey by the national pollster Cedatos.

Cedatos was the most reliable of the pollsters in the first round. Its exit poll accurately predicted Moreno’s vote of 39.4% to the decimal point and only slightly exaggerated Lasso’s 28.1% result, predicting he would win 30.5% of the vote. The survey of nearly 3,000 respondents was carried out in 15 of the country’s 24 provinces in 23 principally urban centres. A total of 81% of respondents said they had already decided for whom to vote in the run-off.

The result of the survey is disturbing for Moreno because it was in urban centres that he excelled in the first round. Lasso, by contrast, fared well in rural areas, defeating Moreno, for instance, in the country’s six smallest provinces. This suggests that the majority of the voters who backed Cynthia Viteri, of the traditional Partido Social Cristiano (PSC), in the first round have transferred allegiance to Lasso now. Viteri performed strongly in urban areas, especially Ecuador’s largest city of Guayaquil where she soundly defeated Lasso. The long-serving mayor of Guayaquil, Jaime Nebot, President Correa’s most credible political opponent of the last decade, backed Viteri in the first round. Nebot said he would now vote for Lasso “despite the insults heaped on me by [some of his backers]”. Nebot added: “We have to save Ecuador from the socialist plague that would make of it another Venezuela”.

There is a direct parallel between the current sequence of events in Ecuador and what happened in Peru in April last year when Pedro Pablo Kuczynski just crept into the second round a long way behind Keiko Fujimori. Just like Lasso, Kuczynski swallowed all of Fujimori’s lead in an early poll after the first round before the run-off campaign even got going as the anti-Fujimori vote coalesced around him. Lasso might want to bear in mind that Fujimori clawed back the five-percentage-point deficit from that particular poll and eventually the two were separated by fractions in the second-round contest.

The parallel between Lasso and Kuczynski goes beyond the presidential elections. Fujimori’s Fuerza Popular (FP) had an absolute majority of 73 of the 120 seats in congress after the concurrent legislative elections in Peru. Ecuador’s national electoral council (CNE) published the results of the country’s legislative elections on 1 March. Moreno’s AP will not only be the largest single bloc by some distance in the 137-seat national assembly but it will also retain an absolute majority, with which it could approve, reform or annul laws, providing a major obstacle for a Lasso administration, though it has lost its two-thirds majority required to carry out constitutional reforms.

One of the biggest political problems in Ecuador’s history has been the recurrent tension between the executive and the legislative branch of government. Even Correa did not secure a coveted two-thirds majority in the national assembly until 2013. If Lasso wins he will face a large hostile AP bloc. Speaking on his weekend broadcast, Correa expressed his confidence that the AP would win an absolute majority and threatened to resort to the mechanism of ‘muerte cruzada’ (dissolving the national assembly and the presidency to force fresh elections) if Lasso were elected and sought “to pursue us” or “destroy what we have achieved”.

The constitution allows the national assembly, with a two-thirds majority, to call fresh presidential and congressional elections. “The best way to keep me far away is to behave well,” said Correa, who is expected to head to Belgium with his wife Anne Malherbe after his term ends in May. “If they behave badly we will see them in a year and beat them again,” Correa added.

Lasso tries to forge united opposition bloc

Before that point of course Lasso needs to defeat Moreno in the second round. While he has secured the public backing of Viteri and Nebot and, the Cedatos survey suggests, many of their supporters, Lasso faces a sterner challenge to win over the other opposition candidates, who will want something in return for endorsing his candidacy.

Paco Moncayo, who finished fourth in the first round for the left-wing Acuerdo Nacional por el Cambio, has called for a national dialogue with Lasso. Pachakutik, the political arm of the umbrella indigenous organisation Conaie and the mainstay of Moncayo’s coalition, was bitterly opposed to Ecuador’s successive ‘neo-liberal’ governments prior to Correa, and Lasso’s policy proposals puts him squarely in that bracket. That said Pachakutik has been even more stridently critical of the Correa administration. The president of Ecuarunari, Carlos Pérez Guartambel, was clear that Lasso was the lesser of two evils: “a banker is preferable to a dictatorship that has stripped away our land, declared a state of exception, and locked us up in jail.”

The state of exception declared by the Correa administration in the southernmost province of Zamora Chinchipe in response to the murder of a police officer seeking to evict indigenous protesters from an open-pit copper mine, contributed in no small part to Moreno’s thumping defeat at the hands of Lasso in the province in the first round.

• Manabí

Guillermo Lasso condemned the release of a recording this week purporting to be the voice of the president of his party Movimiento Creo, César Monge, referring in derogatory terms to the northern coastal province of Manabí. Lasso said it was part of a dirty campaign “by desperate people”. Tins of tuna were hurled at Creo offices and the Banco de Guayaquil Manabí, where Moreno won his most emphatic victory over Lasso in the first round. Lasso insisted that he had Manabí roots (his mother was born there and married in the provincial capital of Portoviejo, before moving to Manta) and “would never dare to insult the province or allow it to be insulted”. President Correa defended the protest action by some supposed inhabitants of Manabí during his Saturday broadcast.

The government led by President Mauricio Macri has pushed its proposed pension reform through the federal congress. Pension reform is an integral part of the wider economic reforms that the Macri administration is seeking to implement to ensure Argentina’s medium and long-term economic growth, and the approval of the bill in the opposition-controlled congress constitutes a political victory. However, violent public protests organised by groups opposed to the pension reform, which include leftist political groups, civil society organisations, and unions, have depleted Macri’s political capital.

Following the positive performance in October’s mid-term federal legislative elections by the ruling centre-right Cambiemos coalition, which succeeded in increasing its minority representation in congress, the Macri government announced that it would seek to promote a series of structural economic reforms including labour, fiscal, and pension reform, to boost Argentina’s domestic economy. It opted to try to get the pension reform – arguably the most controversial of all the reform initiatives – through congress first.

The government’s proposed pension reform seeks to change the national pension system in order to make it sustainable and to reduce the fiscal deficit. This is to be achieved by changing how pension pay-outs are calculated, linking this to the national inflation rate and average salaries rather than to average salaries and the monthly takings of the national social security administration (Anses). The government argues that, in the long term, the changes will benefit pensioners by ensuring that pension pay-outs keep up with inflation. But opponents of the reform complain that in the short-term the proposed changes would negatively affect the level of pay-outs currently received by pensioners (with these due to fall by 8% next year according to some studies) as the inflation rate is expected to be lower than the average increase in Anses takings in coming years.

Hard-line leftist political opposition and vested interest groups such as the trade unions were always likely to look askance at the government’s proposed reforms. But pension reform affects a larger proportion of the population and so resistance to it is stronger and more widespread. In fact, resistance to the initiative has proved to be much stronger than the government had initially foreseen. The government submitted the pension reform bill to congress in November hoping that it could be approved before the end of year. But, after it was approved by the senate on 30 November, the bill became mired in the lower chamber last week, when opposition legislators obstructed its debate. Meanwhile, outside congress, opponents staged large demonstrations in rejection of the bill.

The turmoil outside congress, where some demonstrators clashed with the police while trying to break into the building, and inside congress, where legislators almost came to blows during heated confrontations, resulted in the suspension of the 14 December session in the lower chamber, when the deputies were scheduled to vote on the pension reform bill. However, the government was undeterred and another vote on the bill was scheduled for four days later. This once again prompted opponents to call for a mass protest march to congress to try to stop the bill’s approval. The protest march was well supported with thousands of people taking part. But this time the police erected an extensive cordon around the congress building to prevent protesters from trying to storm it.

Political costs

This led to a pitched battle between anti-riot police and some 300 hooded protesters who hurled sticks, rocks, and Molotov cocktails at the police line. The police resorted to tear gas and water cannon to repel the protesters. The disturbances left a toll of over 200 people injured (125 police officers and 33 civilians), with over 60 arrests made. Meanwhile, the Confederación General del Trabajo (CGT) umbrella trade union declared a 24-hour general strike in support of the protests. The CGT strike was observed by practically all public transport sector unions leading to the suspension of all bus, metro, and rail services as well as the closure of national and international airports around the country, causing the cancellation of hundreds of flights.

However, none of this stopped legislators in the lower chamber from continuing to debate the pension reform bill. Eventually, after 17 hours of intense debate (in which opposition legislators tried to use up as much time as possible to delay the vote) deputies voted on and approved the bill in the early hours of 19 December. The bill received 129 votes in favour and 117 against in the 257-seat chamber. The minority Cambiemos bench succeeded in securing the votes of sufficient moderate deputies from the majority bench of the main opposition Partido Justicialista (PJ, Peronits) to pass the bill. This feat was achieved in no small part thanks to the fiscal pact that President Macri reached with the governors of the country’s 24 provinces (most of whom are Peronists) under which he agreed to redistribute more federal taxes to the provinces in exchange for their support for the economic reform package.

• Governors come out in support of reform

Underlining their support for the fiscal pact that they have reached with President Macri, 12 provincial governors publicly expressed their support for the pension reform bill on 18 December ahead of the vote in the federal chamber of deputies. After holding a meeting with Macri’s interior minister Rogelio Frigerio, the governors said that the pension reform would help to strengthen the finances of the federal government as well as the provinces. Among the governors that attended the meeting were some members of the hard-line opposition Kirchnerista Peronist faction such as the governor of Tierra del Fuego, Rosana Bertone, and the governor of Tucumán, Luis Juan Manzur, who served as health minister (2009-2015) in the previous Kirchnerista government.

Macri was able to reach a pact with the provincial governors due to October’s electoral result. But with those opposed to the pension reform vowing to continue their protest campaign and extend it nationwide until the reform is scrapped, governors may be hesitant to continue backing the reforms if social discontent becomes more widespread. The CGT’s decision to support the protests could also lead to a breakdown of the working relationship that the Macri administration has been able to establish with the union. This could in turn derail the labour reform. Following negotiations with the government, the CGT leadership agreed to offer its support for the proposed labour reform, but this could change if public opposition to the pension reform grows.

Macri is now trying to shore up public support for his administration to continue advancing with its proposed reforms. The clearest example of this is his decision to approve the payment of a one-off Ar$750 (US$42) bonus to all pensioners who receive less than Ar$10,000 in monthly pension pay-outs, which equates to 72% of all pensioners, to compensate for the lower pay-outs they are expected to receive under the reform next year.

Macri launches naval sweep

Another factor that has negatively affected the government’s image in recent weeks is the disappearance of the ARA San Juan naval submarine. The ARA San Juan and its 44-strong crew disappeared on 15 November while returning to its home port of Mar del Plata, Buenos Aires province, after conducting a routine patrol of Argentina’s southern territorial waters. With the authorities still unable to find the vessel, the case has raised serious questions about the navy’s handling of the emergency.

On 15 December President Macri ordered the replacement of the navy commander, Admiral Marcelo Srur, with Rear Admiral José Luis Villán. The change came amid rumours that Macri was unhappy with the way in which the navy command dealt with the case of the ARA San Juan and was considering conducting a major shake-up of the command. It also came after the defence ministry announced the creation of an investigative commission tasked with determining exactly what happened. Meanwhile, on 20 December, the federal chamber of deputies voted in favour of an opposition-proposed initiative calling for the creation of a congressional investigative commission to look into the ARA San Juan case. The initiative is now with the senate. If approved, the commission could unearth uncomfortable details about the authorities’ failings in the case.

• Macri denounces orchestrated violence

On 19 December, President Macri defended the approval of his government’s pension reform bill and condemned the violent protests organised against the initiative. In a televised press conference from the Casa Rosada presidential palace, Macri insisted that the pension reform would be beneficial for the country and denounced the violent protests as an “orchestrated” attempt by his political detractors to destabilise his government and undermine democracy. “Despite all they did, we showed that democracy works in Argentina; we had a 17-hour debate in which the opposition spoke for 14 hours. They expressed their views and then there was a vote,” Macri said, adding that “nothing justifies the violence…and we will combat it in the judiciary”.

The so-called ‘anti-crime package’ came into force in Brazil on 23 January. The new legislation is a heavily modified version of the bills which Justice & Public Security Minister Sérgio Moro had presented to congress as his flagship public security initiative in February 2019.

Moro’s initial ‘anti-crime package’ aimed to update legislation relating to criminal punishments, police investigations, judicial proceedings and fighting corruption [SSR-19-03]. The final version approved last December leaves out the more criticised points of Moro’s project, while adding some new measures. 

The version which passed congress introduces stricter rules for prisoners’ regime progression, making it harder to be released on bail; increases the maximum prison sentence from 30 to 40 years; makes the immediate execution of a sentence after conviction by jury obligatory (jury trials are used only in cases of crimes against life in Brazil); defines whistleblowing; and updates rules on the confiscation of criminal goods, amongst other measures.

When he sanctioned the law on 24 December 2019, President Jair Bolsonaro vetoed several measures which had been introduced by congress. He notably rejected stricter punishments for crimes committed or disseminated on social networks; the classification as a homicide of any crime committed with a restricted-use firearm; and new rules on the collection and use of DNA information. Bolsonaro also modified the clause relating to the legal defence of public security officers who use lethal force.

A contentious point Bolsonaro did not veto was the creation of the figure of a ‘warranties judge’, but this has since been suspended indefinitely by the supreme court (STF). The measure, criticised by Moro, members of the judicial profession, and several political parties, would have split responsibilities between different judges with the aim of ensuring the impartiality of judicial processes.

Moro, who was initially critical of the many changes introduced by congress to his anti-crime package, celebrated the “important advances” of the law when it came into force in January. He has nevertheless promised to push for more and better legislation against crime and corruption in 2020.

One of Bolivia’s first recorded cases of coronavirus (Covid-19), a 65-year-old woman in the city of Santa Cruz, the capital of the eponymous department, was turned away from four hospitals by panicked patients and staff, before eventually being isolated by local authorities. This debacle sparked national outrage, and yet was in many ways representative of Bolivia’s broader response to Covid-19, coloured by the widespread recognition that the country’s healthcare system is simply not equipped to handle an outbreak on the scale seen elsewhere.

This is as true of the interim government as it is of the general public. While these concerns have been evidenced primarily by a relatively authoritarian approach to the enforcement of quarantine restrictions, foreign minister Karen Longaric has been particularly candid, acknowledging the “awful” state of the country’s healthcare system in early April, and later insisting that the government cannot repatriate nationals stranded abroad by sudden border closures, because Bolivia is “a poor country”.

These latter comments were made in reference to complaints from several groups of Bolivians forced to fund their own emergency return flights. However, a more high-profile scandal, that has come to typify the government’s Covid-19 response, was in relation to a group with no need for flights - the large numbers of Bolivians stranded in Chile, blocked by security forces from crossing back over the border. Since late March, over 1,000 Bolivians arrived at the Chilean border town of Colchane (Tarapacá region), most of them migrant workers who lost their jobs when Chile imposed quarantine measures of its own.

Jeanine Áñez’s interim government was initially reluctant to allow any movement across this border, but as security forces struggled to handle the protests of the growing crowds, and the Inter-American Commission on Human Rights (IACHR) highlighted “the obligation of states to guarantee nationals the right to re-enter the country”, 440 people were allowed to cross into the Bolivian town of Pisiga (Oruro department) on 4 April, to enter the hastily-improvised Tata Santiago quarantine camp.

This did little to solve the government’s problems; those arriving in Tata Santiago reported limited supplies of food and water, as well as only basic protection from the desert conditions, while news of their successful entry meant the crowds in Colchane quickly replenished. Marcel Rivas, head of the government’s migration directorate, insisted that no more border crossings could be allowed until additional quarantine camps had been constructed, a process that took until 27 April.

Critics of the government’s response included international humanitarian actors such as the International Organization for Migration (IOM) and the United Nations High Commissioner for Human Rights Michelle Bachelet, as well as a range of Chilean officials; Colchane’s mayor, Javier García, blamed Áñez’s “irresponsible” strategy for needlessly perpetuating a “humanitarian emergency”. And yet, much of the publicity has been self-inflicted, as efforts to blame the border crisis on the Movimiento al Socialismo (MAS) opposition have turned this problem into a prominent partisan issue.

Rivas had accused the MAS of orchestrating protests at the border in order “to break the quarantine, to generate riots and chaos”, alleging that MAS “political cadres” had been amongst the crowds. Justice minister Álvaro Coimbra went further still, and was later forced to apologise for accusing García, Colchane’s mayor, of working on behalf of the MAS. Víctor Borda, a MAS legislator in the federal chamber of deputies, described Rivas and Coimbra’s claims as “absurd and illogical”, intended to “disguise their inability to face this pandemic”.

The border crisis is not the only element of Bolivia’s pandemic response that has become strongly politicised. As MAS officials have been unsparing in their critiques of the government’s response, Áñez’s administration has reacted by directly attacking the opposition, under the veil of public health policy. Interior minister Arturo Murillo’s ‘cyber patrols’, intended to police online criticisms of the government’s pandemic response, were described by free speech advocates as a tool of political repression, while the ‘encapsulation’ of the Chapare region (a MAS stronghold) appeared to be similarly politically motivated.

This politicisation has likely contributed to the sense of panic that has pervaded Bolivia’s experience of the pandemic and can undoubtedly be attributed in large part to the spectre of the upcoming general elections. The electoral calendar has been amongst the victims of the virus, as the electoral council (TSE) decided in March that the vote, meant to be held on 3 May, should be delayed indefinitely. Exactly when this will be rescheduled to remains uncertain, as the MAS presses for voting to take place by August, while the interim government insists that the risk to public health is too great.

Jorge Hernando Pedraza, the secretary general of the Andean Community (CAN) trade bloc, lauded the Andean Environmental Charter – signed on 1 December by foreign ministers from Bolivia, Colombia, Ecuador, and Peru – as a pivotal step towards achieving “sustainable, inclusive development that is respectful of the environment, in order to maintain and improve the well-being of 111m Andean citizens”.

Pedraza noted that the Andean region is “one of the most biodiverse on the planet”, with 59% of the territory of the CAN’s four member states forming part of the Amazon basin. The text of the charter itself similarly highlights “the wealth and importance of the natural and cultural heritage shared by the Andean countries”. The goal of this agreement is to formalise these four governments’ shared responsibility to conserve endangered ecosystems, but also to protect those who live in them – the document emphasises “the vulnerabilities of these territories and populations to the effects of climate change, and other environmental issues”.

• Member states

The CAN was launched in 1996 – as a successor to the Andean Pact, founded in 1969 – with Bolivia, Colombia, Ecuador, Peru, and Venezuela as members. However, Venezuela left in 2006 to join the Southern Common Market (Mercosur) trade bloc instead (alongside Argentina, Brazil, Paraguay, and Uruguay), although its membership of this group was then suspended in 2016.

It is an initiative that has been championed by Colombia’s President Iván Duque, who is the current pro tempore president of the CAN, and who has faced considerable domestic criticism for the acceleration of deforestation in recent years, and for the lack of protection provided to environmental activists in Colombia [SSR-20-11]. The latter issue was conspicuously absent from the charter, eliciting suggestions in some quarters that it is intended to rival the Escazú Agreement, an international treaty that centres the rights of environmental defenders, and that has recently stalled in its passage through Colombia’s congress.

But beyond this particular oversight, the content of the charter has generally been well received by environmentalists throughout the region. Politicians in the countries of the Amazon basin can ill-afford to neglect the dangers of ecological degradation, but all four of the governments in question have at times faced criticism for focusing solely on the scientific elements of environmental policy, and neglecting the economic and social transformations that are also necessary to protect their countries’ populations and ecosystems. This latest agreement appeared to represent an important step towards engaging with this broader challenge.

This change in approach is immediately visible through the charter’s six key themes. Topics such as the “management of water resources” and the “conservation of biodiversity” acknowledge the role played by local communities in both processes, while themes such as “strengthening waste management” and “the prevention of and response to disasters” address the human impact of environmental issues, and the sections on “the fight against illegal mining” and “the promotion of the circular economy” even explore the need for wholesale changes to economic and social systems, beyond just the realm of environmental policy.

As well as these broad themes, the charter outlines a number of more specific provisions for policy actions to be taken. These range from relatively abstract measures, such as the commitment to incorporate “the right to a healthy and protected environment” into the CAN’s 2002 human rights charter, to more concrete plans for a technical commission to which each member state will report regularly, in order to share knowledge on best practice in environmental policy.

Also notable is that this charter goes beyond addressing localised threats to the environment, to emphasise how these challenges are tied more broadly to “the environmental crisis facing the planet”. At its unveiling, President Duque noted that this agreement “represents the first multilateral instrument within our region that seeks to address environmental issues at this level” and claimed that the charter “represents a call to action for the countries that have contributed the most to greenhouse gas emissions”, the impact of which has disproportionately affected the countries of the Andean region.

The charter therefore sets the stage not only for a shift in internal environmental policy agendas, but also seeks to bolster these four governments’ collective capacity to advocate for change at a global level. Duque called for the Andean region to “raise its voice” in this regard, describing the charter as “a beacon to guide our foreign policy”, while the text of the agreement includes a commitment to “promote co-ordinated actions within the framework of the CAN to face the problems derived from climate change, taking into account the global nature and transversality of its effects”.

Fighting has continued into a second week in the border state of Apure, with clashes between the Bolivarian armed forces (FANB) and a dissident Colombian group. The violence, which forced around 6,000 Venezuelan civilians to cross the River Arauca into Colombia to seek safety, could represent a significant turning point for the government led by Nicolás Maduro.

Until now there has been an uneasy status quo in border areas. Colombian left-wing guerrillas from the Ejército de Liberación Nacional (ELN) and dissident members of the Fuerzas Armadas Revolucionarias de Colombia (Farc), who opted not to demobilise after the 2016 peace agreement, have continued military operations in Colombia, while seeking refuge as and when required on the Venezuelan side of the border, where they have enjoyed discreet support from the FANB. It has been estimated that approximately 1,500 Colombian guerrillas presently use bases and supply lines in Venezuela. As part of this arrangement, FANB officers are believed to receive a share of drug trafficking and other illicit revenues.

But the status quo has been violently shaken in Apure by what could be called a dissident group within the Farc dissidents. This is the 10^th Farc front, led by brothers known as ‘El Nando’ (who the FANB claims has since been ‘neutralised’) and ‘Ferley González’, who controls the finances. Fighting between this group and the FANB appears to have been set off by a dispute over sharing the profits of drug trafficking and other illicit activities.

There is some confusion over the precise sequence of events, with some reports saying the trigger was the death of two FANB soldiers who stepped on a land mine. The reality seems to be that the Farc dissidents are split. One faction, the so-called Segunda Marquetalia, led by ‘Jesús Santrich’ (Seuxis Paucias Hernández) and ‘Iván Márquez’ (Luciano Marín Arango), remains close to the Maduro government. A rival group led by ‘Gentil Duarte’ (Miguel Botache Santillana), which also controls other fronts, is believed to have more sympathy for the cause of the 10^th front.

An important factor is that the FANB, backed up by the feared Faes elite police unit, has been particularly brutal in its treatment of the local Venezuelan population. Houses have been burnt down and air strikes called in. Local NGOs report that ELN guerrillas have also been working with the FANB.

A teacher and her husband were reportedly shot dead on 27 March for failing to evacuate at speed. On the same day five members of a farming family in La Victoria, Apure, were reported to have been shot dead by the Faes, with their corpses photographed with military fatigues and weapons to make them appear like rebels killed in action. This practice, known as creating ‘false positives’, became notorious in Colombia under the presidency of Álvaro Uribe (2002-2010) and has been consistently criticised by Maduro.

From a strategic point of view the fighting in Apure can be seen as a setback for the Maduro government. Under the previous status quo, discreet support for Colombian guerrillas was a relatively low-cost way of trying to destabilise a neighbouring right-wing, ideologically hostile government. Social tensions and military clashes were kept at a comfortable distance, on the other side of the border. Now, however, the fighting has been brought over to the Venezuelan side, and the violent handling of the local population may further undermine its trust in central government.

War of words

Referring to the fighting in Apure, Maduro claimed on 28 March that Colombia was seeking to provoke a border clash between the two countries. Defence Minister Vladimir Padrino López also claimed that the irregular Colombian forces fighting in the state were supported by the US Southern Command and the Colombian government.

Colombia’s defence minister, Diego Molano Aponte, retorted that his country, in contrast with Venezuela, was committed to fighting all “narco-terrorist” organisations with equal force. Unlike the situation in Venezuela, Molano said, the Colombian government did not act as a “godfather” protecting criminal organisations.    

Risk factor

While the fighting in Apure may be contained, there is also a risk that it could actually spread. Put bluntly, the rural insurgencies that have bedevilled Colombian politics for decades might spread their roots further into Venezuela. Farc dissidents, rather than being a convenient instrument to pressurise Colombia, might end up being agents of deepening conflict inside Venezuela.

The virtual trial of Peru’s former president Ollanta Humala (2011-2016) began on 21 February. The leftist-turned-neoliberal ex-president is accused of money laundering in relation to illegal campaign donations received from the Brazilian construction company Odebrecht with the alleged backing of the leftist Brazilian president Lula da Silva (2003-2010), and also from Venezuela’s former president Hugo Chávez (1999-2013).

Humala is one of four former Peruvian presidents accused of receiving illicit finance from Odebrecht. With his predecessor, Alan García (2006-2011), having committed suicide in 2019 when faced with imminent arrest, the proceedings against Humala mark the first presidential trial in a scandal that marred four consecutive administrations. His fate will be closely watched by his successor, Pedro Pablo Kuczynski (2016-2018), who has been under pre-trial house arrest since 2019, and former president Alejandro Toledo (2001-2006), who is currently detained in the US pending extradition to Peru. Also watching closely will be Keiko Fujimori, the leader of the right-wing opposition Fuerza Popular (FP) who is awaiting trial for alleged illegal donations from Odebrecht for her failed presidential bids in 2011 and 2016.

Prosecuting attorney Germán Juárez accused Humala and his wife, Nadine Heredia – the co-founder of the leftist Partido Nacionalista Peruano (PNP) with which Humala won office – of receiving US$3m in illegal financing from Odebrecht for the 2011 presidential election. He said that the payment was opposed by Odebrecht’s then director in Peru, Jorge Barata, as the company was allegedly also funding Fujimori’s campaign, but that the donation was nonetheless paid “because an agreement [to fund Humala] already existed with the Partido dos Trabalhadores [PT]” government in Brazil headed by Lula. The alleged Venezuelan finance concerns Humala’s unsuccessful 2006 campaign, with Juárez claiming that funds were sent from Venezuelan officials to Heredia’s mother, and also smuggled to the PNP by Venezuelan diplomats.

Neither Humala nor Heredia spoke during the opening two days of the trial, which will recommence on 3 March. Juárez has presented a list of 285 witnesses whose testimony he plans to deploy against the couple, including former Odebrecht president Marcelo Odebrecht and two of the company’s former board members.

Mounting tensions with human rights ombudsman

Tensions are continuing to mount between the Castillo administration and human rights ombudsman Walter Gutiérrez, following Gutierrez’s 8 February call for Castillo to resign. Gutiérrez said that Castillo “has shown no respect for minimal standards of integrity or…for democratic values”. On 23 February, the left-wing Perú Libre (PL) with which Castillo won office presented a complaint to the constitutional court, arguing that Gutiérrez’s term concluded on 7 September and that congress should be forced to choose his successor. On the same day, Gutiérrez again criticised Castillo, saying that his use of police to keep journalists away from him during a visit to the outskirts of Lima constituted an “arbitrary restriction on press freedom”.

Contradictions in Castillo’s testimony

Transparency concerns continue to stalk the highest levels of government nearly a decade after Ollanta Humala left office. Incumbent President Pedro Castillo is under mounting pressure from an attorney general’s office investigation into whether alleged backroom meetings with the private sector consultant Karelim López Arredondo led to a US$58.7m bridge-building contract with the Puente Tarata III consortium and a US$74m biodiesel purchase from petrochemicals company Heaven Petroleum Operators.

Following the attorney general’s office raid on the presidential palace on 11 February [WR-22-07], Castillo again found himself under the spotlight on 22 February when Panamericana Televisión released his leaked testimony. According to the transcript obtained by Panamericana, Castillo told investigators in January that he did not meet López at his private residence on 18 October – contradicting comments he made in an interview with CNN earlier that month, when he said that López “came to my office and I let her in”. When questioned about this contradiction on 21 February while touring a school, he replied that “this press is a joke” for “not focusing on key issues”, such as poverty.

Brazil’s state-owned oil company Petrobras released its 2024-2028 five-year investment plan (‘Plano Estratégico’, PE) on 23 November. In its first investment plan under the incumbent administration led by President Luiz Inácio Lula da Silva, the oil giant is anticipating investing US$102bn from 2024 to 2028, which constitutes a 31% increase compared with the previous PE.

Most of the investment (US$73bn) will be allocated for exploration and production, 67% of which will be invested in pre-salt oil projects. Out of the budget for oil exploration, US$3.1bn will be for exploration in the basins off Brazil’s south-eastern coast, another US$3.1bn will be allocated for the equatorial margin, and US$1.3bn will be invested in other countries, such as Colombia.

In terms of production, Petrobras expects that 14 new floating, production, storage, and offloading (FPSO) vessels will be built from 2024 to 2028. Production is projected to reach 3.2m barrels of oil equivalent per day (boepd) in five years.

Environmental activist groups, such as the Brazilian branch of international NGO Greenpeace, have continued to criticise the insistence from Petrobras to drill in the equatorial margin. Greenpeace released a statement on 21 November criticising the government for expressing support for the oil giant’s exploration plans, despite President Lula’s rhetoric about how Brazil could be a global leader in renewable energy.

Regarding decarbonisation, Petrobras has increased its funding for low-carbon projects from the 2023-2027 PE. The latest PE has allocated US$11.5bn (11% of the total investment) for decarbonisation, up from the US$4.4bn (6%) in the investment plan released last year. From 2024-2027, US$5.2bn will be invested in wind and solar power and US$1.5bn will go to renewable diesel fuel production.

Green energy transition

In a press release, Petrobras claimed that it could outpace other oil companies in the green energy transition. It is aiming for its portfolio of low-carbon projects to reach 16% of total investments in 2028.

Cerrado deforestation

The government’s support for the Brazilian oil sector is not the only cause for concern among environmentalists ahead of the United Nations Climate Change Conference (COP28), as the Instituto Nacional de Pesquisas Espaciais (Inpe) released data on 28 November which showed a yearly increase in deforestation in the Cerrado biome of tropic woodland-savannahs spanning large swatches of central Brazil.       

The government can boast its achievements in reducing deforestation in the Amazon biome this year, but in the Cerrado, the total deforested area from July 2022 to August 2023 was registered at 11,011.7km², up 3% on the previous 12-month period.

At the start of July Hurricane Beryl blasted a pathway between Grenada and St Vincent & the Grenadines (SVG), causing widespread damage as it intensified to Category 5, then easing back but still causing destruction in other countries in its flight path, including the north of Venezuela, Barbados, Jamaica, and Mexico’s Yucatán peninsula, before turning into a storm over Texas. Such an early start to the hurricane season has caused worries about what else may be on the way.

Once again, hurricane damage has been extensive, with at least 11 people reported dead and widespread destruction of infrastructure and residential housing.

Referring to the island of Carriacou (which belongs to Grenada), Grenada’s Prime Minister Dickon Mitchell reported “Almost total damage and destruction of all buildings…complete devastation and destruction of agriculture. Complete and total destruction of the natural environment. There is literally no vegetation left anywhere.” SVG’s Prime Minister Ralph Gonsalves said one person had died on Petit Martinique Island and more fatalities might be reported as communications were re-established.

Some communities lost water supplies. The hurricane reportedly ripped off the roofs of 95% of the buildings in both Carriacou and Petite Martinique and almost completely destroyed the electricity grid. Carriacou airport lost its air control towers. The United Nations (UN) Food and Agriculture Organisation (FAO) said key crops were flattened. It was assessing how to restore artisanal fishing capacity and use cash transfer programmes to meet short term demand for food. It estimated 60,000 people needed humanitarian assistance. In Jamaica, the government estimated local agricultural losses at US$6.5m.

A range of governments promised financial aid. The European Union pledged an extra €1m (US$1.09m) for humanitarian funding, to help provide emergency shelter and cash assistance. The US Agency for International Development (Usaid) said that it was contributing US$4.5m in “immediate humanitarian assistance”. It noted it had pre-positioned emergency supplies at various distribution hubs across the Caribbean. The UK pledged £500,000 (US$643,00) in emergency aid.

A rather more substantial cash injection came with the announcement that the Caribbean Catastrophe Risk Insurance Facility (CCRIF) was paying out US$55.6m to Grenada, part of which will be used to assist reconstruction by the country’s electricity company (Grenlec) and its water and sewage authority (Nawasa).  Supported by the Caribbean Community (Caricom), CCRIH was set up in 2007 as a multi-country risk pool offering parametric policies (which release funds rapidly based on ‘trigger’ indicators such as rainfall or wind speed).

Across much of the Caribbean however, Hurricane Beryl raised two connected questions. Crudely these are, first, whether extreme weather events are becoming more frequent and more damaging; and, secondly, whether larger, wealthier countries are willing to fund the necessary investments in climate mitigation and disaster preparedness by poorer and more vulnerable small island economies.

On the first count the outlook is not promising. A majority of meteorological studies suggest hurricanes are indeed becoming more frequent.  The Caribbean hurricane season runs from 1 June to 30 November. Beryl was the earliest hurricane yet recorded to escalate so quickly at the start of the season to Category 5 intensity.

The US-based National Oceanic and Atmospheric Administration (NOAA) is predicting an 85% chance of above-normal activity this current season. It says that of the 17-25 storms that form each hurricane season, its analysis shows that four to seven have a high chance of turning into hurricanes “of categories 3, 4, and 5, with winds of at least 178 kmh (111 mph)”.

On the second question, the prime ministers of Antigua & Barbuda, SVG, and Grenada, Gaston Browne, Gonsalves, and Mitchell respectively, were among other signatories of an open letter to David Lammy, the UK foreign secretary, calling for a ‘Marshall Plan’ to rebuild their island economies.

Dated 11 July, the letter says that this would include “debt restructuring for all SIDS [Small Island Developing States] with high debt service levels and adaptation needs; action to lower future borrowing costs for SIDS; a large-scale programme of green and resilient infrastructure development and economic diversification, to buffer small-island economies; improved access to climate funds, through minimum annual funding allocations for SIDS; and scaled-up support to the Loss and Damage Fund”.

BRAZIL | Central bank expresses uncertainty over interest rates. On 23 June the central bank’s monetary policy committee (Copom) released the minutes from its meeting last week in which it decided to reduce the benchmark interest rate by 25 basis points, bringing it down to 14.25%. However, the minutes suggested uncertainty over the current rate-cut cycle, as the committee stated that “future steps of interest rate calibration” will depend on “new information about the depth and duration of the conflicts in the Middle East”. According to Copom’s latest forecasts, Brazil’s annual inflation for 2026 could reach 5.2%, which would be well above the official inflation target range of 3.0% +/-1.5. 

BRAZIL | BYD to invest in battery production. In an interview with Reuters news agency last week, Alexandre Baldy, senior vice president of the Brazilian subsidiary of Chinese carmaker BYD, said that the company plans to scale up local manufacturing.

BYD plans to invest up to R$500m (US$98m) in a new production line for batteries, which could be used to store electricity for Brazil’s national grid. The company is also to invest a further R$5.5bn in its production complex in Camaçari, Bahia state.

According to Baldy, BYD’s expansion plans are part of a broader push by the car manufacturer to reach 50% domestic content for its Brazilian-made vehicles, so that “we can truly become a Brazilian manufacturer”, with batteries being a vital component to produce domestically.

Green hydrogen

The EU and Brazil have also advanced their cooperation on green hydrogen, including the Northeast Green Energy Park, a project aiming to transform Brazil’s renewable energy potential into green hydrogen, green ammonia, and green steel. To help projects move from the conceptual phase to financing, the EU is investing €3m through the international hydrogen ramp-up programme (H2Uppp) implemented by Germany’s international development agency (GIZ).

El gobierno del Presidente Ollanta Humala reflexionando sobre un radical cambio en las estrategias convencionales en la guerra a las drogas. “La erradicación de la coca es una política fallida,” dijo el primer ministro, Salomón Lerner, la semana pasada. En cambio, dijo, el gobierno estaba evaluando la posibilidad de pagar a los pequeños productores, o campesinos, para no cultivar coca.

La administración Humala provocó controversias a mediados de agosto al suspender por un breve tiempo la erradicación de la coca en el Alto Huallaga a fin de rediseñar las políticas antinarcóticos de Perú [IL-11-34]. Parte del rediseño parece estar tomando forma. Lerner dijo que el gobierno tenía un presupuesto de NS$15m (US$5,4m) para la erradicación de la coca por el resto del año –dinero que él implica que sería mejor gastado en pagar a los productores de coca para comenzar a producir cultivos alternativos, como el cacao y el café.

Lerner se mostró firme en que la erradicación de la coca fue fútil. En las dos últimas décadas dijo que eso había costado casi US$4,2m por hectárea erradicada. Dijo que el gobierno estaba calculando cuánto costaría  durante los próximos tres o cuatro años pagar a los productores de coca para no producir coca. Lerner afirmó que EU aplica una política similar con relación a la cosecha de algodón. Y dijo que el gobierno estaba planeando llevar adelante un plan piloto para aplicar a unas 1.000 a 1.500 hectáreas en los valles de los ríos Apurímac y Ene (Vrae), el principal centro de producción de coca.

Los gobiernos previos han tratado estrategias alternativas para el cultivo de coca, pero a pesar de haber logrado un mínimo éxito en San Martín, ellas han zozobrado ante el hecho que nada crece tan bien o es tan rentable como la coca. También hay obvios problemas morales en el hecho de pagar a la gente por no hacer algo que es ilegal. También podría fácilmente convertirse en una guerra de subasta, con las bandas de drogas simplemente pagando más a los campesinos para plantar coca, de lo que el gobierno está ofreciendo para no cultivarla.

• Tráfico de droga

El primer Ministro Lerner, tal como hizo el Presidente Humala antes que él, subrayó el compromiso absoluto del gobierno en la lucha contra el tráfico de drogas, mejorando la inteligencia financiera para investigar potencial actividad delictiva en el sistema bancario y de seguros; destruyendo fosas de maceración; y tomando medidas enérgicas contra los precursores químicos como el kerosén usado en la producción de cocaína. Y agregó que 80 estaciones de combustibles ilegales, y bombas informales, en el Vrae, que también venden precursores químicos serían cerradas.

Development: On 8 November Omar Chehade, Peru’s second vice-president, asked for a leave of absence to contest influence-peddling accusations.

Significance: It is not clear whether Chehade can be granted such leave. Some constitutional lawyers say that he has to resign. President Ollanta Humala has suggested, confusingly, that Chehade should “stand aside” while the corruption allegations against him are investigated by two separate congressional commissions and the attorney general’s office

Key points:

• Chehade is accused of using his influence to get police to evict workers from the Andahuasi sugar plant so that the factory could be handed over to the Wong Industrial Holdings Limited group.

• Separately, a court issued a warrant for the arrest of Fortunato Canaán, a Dominican Republic businessman, and Jorstein Kar Kjerstad, a Norwegian businessman, over their involvement in the award of five potentially lucrative oil licences to Discover Petroluem, a small Norwegian oil company, in 2008. The scandal caused the resignation of the-then prime minister, Jorge del Castillo.

• The former president Alan García (2006-2011) admitted that he had met Canaán on two occasions while he was in office.

• The legal argument over whether Chehade can obtain leave of absence revolves around the point that the role of the vice-president is ill-defined in the constitution. Essentially, the job of Peru’s two vice-presidents is to step in for the president.

BOLIVIA | Gran paso adelante en acuerdos sobre drogas. El gobierno del Presidente Evo Morales finalmente ha firmado dos acuerdos con EU y Brasil para cooperar en el control de la coca. La firma de los acuerdos constituye un gran avance después de varios retrasos, atribuidos a las preocupaciones del gobierno de Morales en que el acuerdo podría socavar su autoridad en términos de la determinación de cómo se llevaría a cabo el control de las drogas dentro de las fronteras de Bolivia. La firma de los acuerdos provee una plausible explicación para la decisión de Morales de no invitar al presidente de Irán, Mahmoud Ahmadinejad, a La Paz durante su reciente gira por la región [IL-12-02].

De acuerdo con la agencia estatal de noticias boliviana, Abi, los objetivos de los dos acuerdos incluyen: desarrollar una metodología para detectar nuevas áreas de cultivo ilegal de coca; condiciones para monitorear la metodología; y la provisión de apoyo técnico para la reducción de la coca. Bajo los acuerdos, EU proveerá equipos GPS y entrenamiento, mientras que Brasil proveerá imágenes de satélite y entrenamiento para interpretar esas imágenes. La Oficina de la ONU sobre Drogas y Delito (UNODC) también actuará como observador, supervisando el cumplimiento con los términos del acuerdo.

A principios de este mes, Felipe Cáceres, viceministro de defensa social de Bolivia, quien es responsable por los esfuerzos antidrogas, se jactaba que 10.509 hectáreas (ha) de plantaciones ilegales de coca habían sido erradicadas en 2011, mas que las 8.200ha registradas en el 2010. La cifra del 2010 era un 29% superior a la del 2009 y fue la mayor cifra de erradicación desde que Morales asumió el poder. Aunque el límite legal oficial es de 12.000ha, el gobierno ha elevado el límite tolerado a 20.000ha.

La firma de los recientes acuerdos es también probable que acelere la restauración de las relaciones EU-Bolivia, anunciada en noviembre con la firma de un nuevo acuerdo bilateral marco. Las relaciones fueron cortadas en 2008 luego de que Bolivia alegara que el entonces enviado de EU a La Paz, Philip Goldberg, estaba trabajando para socavar al gobierno y resultó en la expulsión  de la Drug Enforcement Administration de EU (DEA), de Bolivia, junto con ambos embajadores. La cooperación antidrogas está, junto con el comercio, entre los objetivos clave del nuevo acuerdo marco; sin embargo, Morales específicamente ha descartado el retorno de la DEA a Bolivia.

ECUADOR | Estímulo fiscal. La toma fiscal se incrementó  en 14,4% en el 2011, sobre el año previo, a US$9,56mm. Esto fácilmente excede la meta del gobierno de US$8,70mm. En noviembre, el Presidente Rafael Correa logró que la asamblea legislativa apruebe una controversial reforma fiscal para tratar de incrementar la toma fiscal por US$353m [IL-11-48]. La oposición a menudo acusa a Correa de hipotecar el país con deuda para elevar su gasto social, pero es importante señalar que la inversión social también ha sido posible por el agudo incremento en la toma fiscal, que ha llegado a más del doble en los cinco años pasados.

PERU | Auge exportador. Las exportaciones de Perú totalizaron US$45,20mm en el 2011, un 26% más que el año anterior, de acuerdo con cifras oficiales. Las exportaciones tradicionales llegaron a US$35,14mm, 78% del total. Las exportaciones mineras, se elevaron un 20,8% año en año, contribuyendo con US$26,45mm, principalmente como resultado de un incremento en las exportaciones de oro. Los productos no-tradicionales se elevaron un 30% sobre el 2010, llegando a US$10,06mm.

Development: On 29 February the US Secretary of State, Hillary Clinton, insisted before the US congress that Cuba should not be invited to the 2012 Summit of the Americas, which Colombia will host on 14-15 April.

Significance: The Colombian government has been tiptoeing around this incredibly delicate issue for weeks; Clinton’s statement, though clearly motivated by the fact that she was speaking in the Republican-controlled House in a US presidential election year, puts the Bogotá administration in a very tricky position. At the end of the day, the government of President Juan Manuel Santos will not want to risk throwing asunder its assiduous efforts to reintegrate Colombia into the region after years of isolation (as a US ‘lackey’) by going against the regional stance, which is to support Cuba’s slow transition with carrots rather than sticks. The risk for the US State Department is that President Barack Obama will be left alone at the dinner table, in a South America increasingly confident on its own two feet.

Key points:

• On 15 February Cuba’s foreign minister, Bruno Rodríguez, clarified that Cuba would be happy to accept an invitation to the summit, but had absolutely no intention of reincorporating into the Organization of American States (OAS). Rodríguez made the statement after a summit of the radical Venezuela-led integration bloc Alianza Bolivariana para los Pueblos de Nuestra América (Alba) in Havana. Alba approved a special declaration supporting Cuba’s presence in Cartagena and threatened to boycott the summit if Cuba were not invited. Given President Hugo Chávez’s struggle with cancer, Ecuador’s Rafael Correa is likely to make the final running on the issue and he takes an even stauncher line than Chávez.

• Testifying before the House of Representatives’ Foreign Affairs committee, Clinton stated, “We do not believe there is any intention to invite Cuba. We’ve made our views well-known. They don’t fit the definition of democratic countries and the development of democracy in the hemisphere. So, at this point, we see absolutely no basis, and no intention to invite them to the summit.”

• In an exchange with David Rivera (R, FL), Clinton underlined that the Obama administration is focused on promoting people-to-people contacts between the US and Cuba (centred on loosening up family travel, remittances and some trade financing). When pressed by Rivera to identify any tangible evidence of democratic reform in Cuba on the back of this policy, Clinton praised the recent economic reforms, saying they were a positive step toward more economic independence for Cubans. “In oppressive regimes, economic freedom very often precedes political freedom”, she said.

La Presidente Dilma Rousseff tomó juramento esta semana a los siete miembros de la nueva comisión de la verdad, que examinará los abusos contra los derechos humanos cometidos por el estado y las guerrillas de izquierda en el periodo 1946-1988, con el foco sobre la última junta militar (1964-1988). A la ceremonia asistieron los ex presidentes de Brasil, José Sarney (1985-1990); Fernando Collor de Mello (1990-1992); Fernando Henrique Cardoso (1995-2002); y Lula da Silva (2003-2010). No todo el mundo está contento. Los familiares de las víctimas se quejan que ellos deseaban una comisión ‘de la verdad y justicia’. Por otro lado oficiales militares retirados  han anunciado una comisión paralela para ‘refutar’ las acusaciones.

La comisión se instalará por dos años y no tendrá ningún poder judicial o fiscal. Sin embargo, a pesar de las quejas de los familiares de las víctimas, se asume que los hallazgos de la comisión podrían abrir las puertas a futuros casos legales. Técnicamente, la Ley de Amnistía de 1979 de Brasil lo impide, aunque en respuesta a un caso presentado por familiares de las víctimas, la Corte Inter-Americana de Derechos Humanos orden ó el año pasado a Brasil que inicie procedimientos judiciales, lo que potencialmente podría forzar al estado a derogar la Ley de Amnistía. La Corte Suprema confirmó el año pasado la Ley de Amnistía, una resolución que fue crucial para la decisión de los militares de acordar con la propuesta de la comisión de la verdad. El gobierno también acordó que la comisión examine abusos de ambos lados como un gesto hacia los militares. Esa decisión permanece controversial. Esta semana, Fernando Henrique Cardoso dijo que él cree que solamente los delitos cometidos por el Estado debían ser examinados, aunque él agregó más tarde que la comisión “abre las puertas para la reconciliación”.

Al anunciar a los miembros de la comisión, la Presidenta Rousseff afirmó “No podemos permitir que en Brasil la verdad sea corrompida por el silencio”. Rousseff, ella misma una ex prisionera política y víctima de torturas, ha insistido repetidas veces que ella no “estaba buscando venganza”.

Los objetivos de la comisión son clarificar los hechos y circunstancias de casos de graves violaciones de los derechos humanos entre 1946 y 1988 y promover las clarificaciones circunstanciales de casos de tortura, muerte, desaparición forzada, el ocultamiento de cuerpos y los autores de los mismos, incluidos casos que ocurrieron en el exterior. La comisión tendrá total acceso a registros públicos y puede requerir entrevistas con cualquiera de interés, quien tendrá un “deber ante el estado” que lo obligue. Los individuos cuyas vidas podrían estar bajo amenaza como resultado de su cooperación, podrán recibir el estatus de protegidos. La comisión también podrá celebrar audiencias públicas. También decidirá su menciona nombres públicamente en el informe final y puede optar por someter estos a la presidencia solamente. Los expertos legales sugieren que la comisión podría también aconsejar si la Ley de Amnistía no es constructiva [para la reconciliación nacional].

Composición de la comisión de la verdad

Los siete miembros de la comisión de la verdad, todos seleccionados personalmente por la Presidenta Rousseff son: José Carlos Dias, un abogado y ex presidente de la comisión de verdad y justicia del estado de São Paulo, quien también sirvió como ministro de justicia (1999-2000) bajo Fernando Henrique Cardoso; Gilson Dipp, un magistrado de la corte suprema de justicia y de la corte suprema electoral; Rosa María Cardoso da Costa, ex abogada de Rousseff durante la junta militar; Cláudio Fonteles, un fiscal general (2003-2005) bajo Lula da Silva; María Rita Kehl, una psicoanalista de alto perfil que editó un importante periódico de oposición durante el régimen militar; José Paulo Cavalcanti Filho, que fue ministro de justicia bajo José Sarney; y el sociólogo Paulo Sérgio Pinheiro. Los siete miembros recibirán cada uno un salario mensual de R$11.179 (US$5.700).

• En busca de la verdad

Una emocionada Presidenta Rousseff, contuvo las lágrimas al declarar que “No nos mueve [...] el revanchismo, el odio o el deseo de escribir la Historia, sino mostrar lo que sucedió [...] Sombras y mentiras no son capaces de promover la concordia [...] La fuerza puede ocultar la verdad, el temor puede retrasarla, pero el tiempo la traerá a la luz. Hoy, ese tiempo ha llegado”.

Argentina no es el único país del Mercado Común del Sur (Mercosur) que está jugando con los costos y los precios. Las señales de política económica que están saliendo de Brasil se están volviendo menos claras con el paso de los días, confundiendo a los mercados y profundizando el sentimiento pesimista del inversionista sobre el país. La bolsa local, Bovespa, ha caído un 3,45% hasta la fecha este año, y ha caído casi un 10% con relación a un año atrás.

El 5 de febrero, la Presidenta Dilma Rousseff dijo que el gobierno estaba buscando eliminar los impuestos federales sobre la canasta de alimentos básicos a fin de reducir la inflación, pero sin proveer detalles. Con el lado productivo de la economía que no consigue reanimarse, el gobierno está tratando de contener la inflación sin tener que elevar la tasa de interés de referencia, Selic, de su record bajo del 7,25%. El gobierno también anunció que temporalmente eliminaría el arancel del 10% a las importaciones de 1m de trigo de afuera del Meccosur, debido a la baja producción en Brasil y en Argentina. Anunciando cambios en el marco de las concesiones a fin de alentar más la inversión privada en la desmoronada red de carreteras del país el ministro de finanzas, Guido Mantega, dijo a un foro de empresarios de São Paulo, que Brasil “está en una cruzada para reducir los costos de producción”.

Rousseff comenzó el año (y su probable intento de reelección en el 2014) con mayores recortes en las tarifas de la electricidad (residencial y comercial); mientras que el gobierno siguió implementando la reforma a las nóminas salariales y otras reformas fiscales en un esfuerzo por recortar los costos operativos de las empresas (y evitar despidos en el sector industrial). Aunque el sector empresarial le ha dado la bienvenida a estos esfuerzos oficiales para recortar el exorbitante ‘Custo Brasil’, la preocupación en algunas partes es que esta ‘cruzada’ se convierta en una interferencia permanente, como en Argentina, que por último podría tener el no deseado efecto de disuadir la inversión del sector privado (como en Argentina).

La Presidenta Rousseff, que ha estado alardeando de las perspectivas económicas para el año, reaseguró a los brasileros que los bajos costos del alimento y la electricidad  compensarían la reciente alza en el precio de los combustibles. La gigante petrolera estatal, Petrobrás, corta de dinero, recibió el visto bueno del gobierno para incrementar los precios mayoristas de la gasolina en las refinerías un 6,6% y del diesel un 5,4% a partir del 30 de enero. Este es segundo incremento en los últimos seis meses, pero el gobierno absorbió el costo a los consumidores del último aumento (en junio del 2012) al recortar impuestos. La jefa ejecutiva (CEO) de Petrobrás, María das Graças Foster, ha dado a entender que la compañía buscará un incrementos de precio adicionales más temprano que tarde, después de que Petrobrás anunció su peor resultado de operaciones en el cuarto trimestre desde 1999.

Petrobrás

En el 2012, Petrobrás produjo un 2,0% menos petróleo y ha informado de una caída del 36% año en año en las ganancias netas a R$21,18mm (US$10,65mm), de R$33,3mm (US$16,74mm) en el 2011. Pese al mejor de lo esperado resultado en las ganancias del cuarto trimestre, el resultado general fue el ingreso anual más bajo en ocho años. Petrobrás culpó en parte al débil dólar de EU, que elevó sus costos de importación de combustibles, y dijo que pagaría menores dividendos a fin de concentrarse en su ambicioso plan de inversión de  cinco años de US$227mm. En respuesta, las acciones ordinarias de Petrobras cayeron en Bovespa un 8,3% a R$16,6, su nivel más débil desde enero del 2006.

El mercado está preocupado acerca de la creciente relación deuda/EBITDA de la compañía (2,8%, por encima del techo fijado de 2,5%) y su capacidad de cumplir con sus metas de producción. Los accionistas privados temen que la compañía podría tener que volver al mercado, en busca de capital nuevo, lo que significa una potencial dilución del valor de sus participaciones. Los críticos de nuevo fustigaron al gobernante Partido dos Trabalhadores (PT), acusándolo de una dañina interferencia en la compañía. Adriano Pires, del Centro Brasileiro de Infraestrutura (CBIE), dijo al diario Valor, “Es una pena [...] ellos han creado PTbras y éste es el resultado. Es lamentable ver a una compañía como Petrobrás presentar resultados como estos, con el petróleo por encima de los US$100”. Das Graças Foster admitió que el 2013 sería otro “año difícil”.

• La producción industrial lenta en recobrarse

La producción industrial se contrajo un 2,7% año en año en el 2012, informó el Ibge, conducida por una caída del 12% en la producción de bienes de capital, señalando un estancamiento en la inversión. La producción industrial ahora ha sido negativa por cinco trimestres consecutivos. A pesar de la serie de medidas de estímulo oficiales, el sector clave de vehículos, que abarca alrededor de un quinto (20%) de la base industrial, ha arrastrado hacia abajo el resultado general. El sector interno de autos de pasajeros permanece fuerte gracias a los incentivos fiscales y créditos para los consumidores, pero las exportaciones ahn sido débiles. El sector de vehículos pesados (agro-vehículos, camiones y buses) está en una profunda retracción. El Ibge enfatizó que el ritmo de declinación en la producción industrial ha disminuido gradualmente, pero reconoció que el sub-sector de bienes de capital aún es el de peor desempeño.

On 9 May Brazil’s President Dilma Rousseff broke with protocol to receive Venezuela’s new president, Nicolás Maduro, with the military honours normally reserved for an official State visit. Maduro was in Brasília on a ‘working’ trip.

Maduro’s four-day tour of his political and commercial allies of the Southern Common Market (Mercosur), Uruguay, Argentina and Brazil, had two goals: to shore up his weak legitimacy in the aftermath of his pencil-thin victory on the 14 April presidential elections; and to secure the supply of food and other essential basic goods that Venezuela needs from its Mercosur partners. Inflation in Venezuela hit 29.4% year-on-year in April, on the back of soaring food prices.

“We have constructed relations with Brazil like never before”, Maduro declared. “We have asked for more support from Brazil for an agri-food revolution in the country, so to become an export power, just as we have already done with rice and maize”. That might come as news to Venezuelans who often can’t find sufficient rice on supermarket shelves. The ‘scarcity index’ compiled by Venezuela’s central bank, which measures the availability of basic goods on shop shelves, was at a 64-month high of 21.3% in April, meaning that of every 100 basic products, 21.3 were scarce. Scarce food products included wheat flour, maize oil, butter, sugar and powdered milk.

The late president, Hugo Chávez (1999-2013), made food sovereignty a State policy from the time he first took office in 1999 but after 12 years in power Venezuela was still importing up to four fifths (80%) of its total food needs. Maduro said that upon the discovery of oil in Venezuela there had been “a mutation, more than a mutation, an amputation” of the rural productive sector. With Brazil’s help, he said, Venezuela aimed to recover it and build a new model.

Brazil is happy to be of service. Its exports to Venezuela have soared in recent years to reach US$5.05bn in 2012, up 10% year-on-year. In 2003, the year the leftist former president Lula da Silva (2003-2010) first took office, the figure was just US$600m. Brazil’s imports from Venezuela were valued at US$996m last year, down 21.3% year-on-year from US$1.26bn in 2011. In 2010, they were worth US$832m.

Brazil’s imports from Venezuela are made up almost entirely of oil, fuel and derivatives, along with urea (the base product of fertilisers) and aluminium. Its exports to Venezuela comprise everything from food and live animals to finished manufactured goods and inputs, machinery and equipment. In the past five years, Venezuela has imported goods worth about US$28bn from its Mercosur partners (mainly Brazil and Argentina), of which about US$12bn corresponded to food supplies. In return it has sold its partners only about US$1.0bn in non-oil exports, as well as oil supplies at heftily preferential financing rates for the likes of Uruguay.

In other words, it’s a win-win situation for both the Mercosur sharks (Brazil and Argentina) and the minnows (Uruguay – and potentially also Paraguay, if its conservative political elite could ever see fit to reach a political ‘understanding’ with Venezuela).

Venezuela’s private sector complains that the only gains from Mercosur members are accruing to state-owned companies that ink lucrative supply deals with their counterparts in Brazil and Argentina, while it struggles to compete with a flood of cheap imports. After their meeting, Rousseff and Maduro announced new deals for fertiliser and chemical factories in Venezuela - to be set up by the Brazilian construction colossus, Odebrecht, and the chemical giant, Braskem, with the output destined for export to Brazil.

• This is our back yard

Brazil’s strong support for Venezuela’s Bolivarian Revolution might well be explained in terms of the commercial relationship favouring Brazil. But it goes beyond that to serve Brazil’s broader foreign policy interests. Welcoming Nicolás Maduro to Brasília, President Dilma Rousseff threw in a political lob at the US (which is still dithering over the Venezuelan election result). Noting that the partnership with Venezuela was important to rejecting any sort of “hegemonic pretensions”, Rousseff stressed that it was “an honour” for Mercosur that Venezuela would take over the bloc’s pro tempore presidency (for the first time) in June. Rousseff will visit US President Barack Obama in Washington in October, with the US vice-president, Joe Biden, due in Brazil in late May.