All Categories

MapBiomas, a Brazilian environmental monitoring initiative run by academics, NGOs, and private companies, released its 2023 annual deforestation report on 28 May, which showed an overall drop in deforestation from 2022. However, while the government’s efforts to protect the Amazon rainforest appear to be paying off, the latest figures highlighted the continued threats to the Cerrado biome, which overtook the Amazon as Brazil’s most deforested biome.

The annual report of MapBiomas, the Relatório Anual do Desmatamento (RAD), showed that Brazil lost 1.83m hectares (ha) of its native vegetation in 2023. This marks an 11.6% decrease from 2022. Three of the country’s six biomes registered an annual drop in deforestation: the Amazon rainforest (-62.2%), the tropical and subtropical forests along the coast known as the Mata Atlântica (-59.6%), and the low grasslands of southern Brazil, the Pampas (-50.4%).

Annual increases in deforestation were registered in the Pantanal wetlands along the south-western border with Bolivia and Paraguay (+59.2%), in the semi-arid shrublands of the northeast known as the Caatinga (+43.4%), and in the country’s second largest biome after the Amazon, the tropical woodland-savannahs of the Cerrado (+67.7%). Every year from 2019-2022, the Amazon was the country’s most deforested biome. However, with 1.11m ha of its native vegetation destroyed last year, the Cerrado accounted for 60.7% of Brazil’s total deforestation in 2023, surpassing the 24.8% share of the Amazon.

The states with the highest deforestation rates in 2023 are in the Cerrado biome. The north-eastern states of Maranhão (331,225 ha) and Bahia (290,606 ha) led the rankings, registering an annual increase of 95.1% and 27.5% respectively. Other areas in the Cerrado that registered major annual increases in deforestation include the northern state of Tocantins (+177.9%) and the Distrito Federal, the administration region around the capital, Brasília (+612.5%).     

Brazilian environmental groups, such as Observatório do Clima, reacted to these figures by reiterating their criticisms of the rapidly expanding agricultural frontier known as ‘Matopiba’, named after the four states Maranhão, Tocantins, Piauí, and Bahía. The RAD listed agricultural production as the leading cause of Brazil’s deforestation, as it has been every year since 2019. In 2023, 97.5% of national deforestation was attributed to farming. Other causes included urban expansion (0.31% of total deforestation), renewable energy installations (0.25%) and illegal wildcat mining, or ‘garimpo’ (0.20%).

Miners involved in garimpo have often threatened Brazil’s demarcated indigenous territories (TIs), but the government led by President Luiz Inácio Lula da Silva has sought to protect indigenous communities since taking office in January 2023, deploying federal security forces and military units to remove illegal miners and other land invaders from indigenous territories. The RAD figures show that deforestation on indigenous reserves decreased by 26.9% from 2022 to 2023. Given that the Amazon biome has the greatest number of indigenous territories, including the country’s largest TI, the Yanomami territory, the Lula government’s efforts to tackle crime in TIs has contributed to the annual drop in Amazon deforestation. In late November last year, the government renewed the Cerrado protection programme (PPCerrado), first launched in 2010 during Lula’s second term in office (2007-2011), although it uncertain how much this programme can counter the expansion of intensive farming in the Matopiba region.

Coastal ownership legislation

On 27 May the senate’s constitution and justice committee (CCJ) held a public session to discuss legislation (PEC 3/2023) that proposes transferring federal government-owned land along Brazil’s coasts to municipal governments and to private ownership. In response to recent condemnation from environmentalists, surfing communities, and other critics of the legislation, senators insisted that this initiative was more about transferring land ownership to local governments, downplaying concerns that the legislation would facilitate the mass construction of luxury beach resorts and holiday homes, which could threaten the Mata Atlântica biome.

There are signs that Bolivia’s right-of-centre opposition is uniting in an effort to exploit the turmoil that is rocking the ruling left-wing Movimiento al Socialismo (MAS) ahead of next year’s general election. The opposition, divided between the centre-right Comunidad Ciudadana (CC) and the far-right Creemos, faces enormous obstacles if it is to end nearly 20 years in the political wilderness by recapturing the presidency. Its only real hope is if the left-wing vote is split by former president Evo Morales (2006-2019) being declared eligible to run for the MAS, forcing President Luis Arce to run for another party or as an independent.

The resilience of the MAS has been underlined in recent months by the opposition’s failure to make any serious inroads with voters despite the ruling party being torn in two by the vicious rivalry between Morales and President Arce. Both men have accused each other of harbouring dictatorial and anti-democratic ambitions, committing sex crimes, and sinking the Bolivian economy. Yet, by and large, the only real question has been the scale of the expected MAS victory in 2025 and whether it will be Arce or Morales who leads the party into the election.

If presidential term limits, which are currently obstructing Morales’ hopes for a comeback, are repealed by voters in a 1 December referendum, or by a new constitutional court (TCP) following concurrent judicial elections, then the rupture in the MAS will probably become permanent. The hostility between Morales’ ‘Evista’ wing of the party and Arce’s ‘Arcista’ faction already appears irreconcilable. With neither man willing to drop their presidential ambitions, one of them would likely be forced out of the MAS.

In this scenario, Arce would be the most likely to leave. The MAS leadership is overwhelmingly loyal to Morales and has expelled Arce from the party twice at congresses that have been declared illegitimate by Bolivia’s supreme electoral court (TSE). If he did leave the MAS, Arce would take with him his Pacto de Unidad alliance of civil society organisations, which would function as a grassroots electoral machine similar to Morales’ network of trade unions and indigenous organisations.

Arce already has one party that is publicly calling on him to run for president as its candidate. The secretary of the Partido Socialista-1 (PS-1), Jorge Rolando Espejo, said on 21 October that Arce had been sent a “formal invitation” to represent PS-1 in the election. Espejo said that “we’ll wait for the next events” before any further announcement is made, but he said that Arce joining the party “shouldn’t be ruled out”.

The prospect of a definitive split between the Arcistas and the Evistas is tantalising for the opposition, which aside from the interim presidency of Jeanine Áñez (2019-2020) has spent 18 years sitting on the political sidelines. Opposition leaders have met in recent weeks in a sign that they are keen to bury the divisions between the far-right Creemos, which has a strong following in the eastern department of Santa Cruz but limited national support, and the centre-right CC, which has a broader appeal but does not inspire the devotion of Creemos’ imprisoned leader, Luis Fernando Camacho. CC’s leader, former president Carlos Mesa (2003-2005), met Camacho in prison in Santa Cruz on 8 October, as did his predecessor Jorge Quiroga (2001-2003). Áñez’s running mate in the 2020 election, the cement magnate Samuel Doria Medina, has also called for an electoral alliance between Mesa, Camacho, and Quiroga.

New attorney general

Roger Mariaca was elected as Bolivia’s new attorney general on 21 October, after receiving the support of more than two-thirds of legislators from both chambers of congress. Mariaca, who will serve a six-year term, will be closely watched in his handling of the rape and human trafficking investigation into former president Evo Morales (2006-2019), which Morales claims is highly politicised [WR-24-41]. Mariaca’s predecessor, Juan Lanchipa (2018-2024), was accused by prosecutors in Tarija department of obstructing the case to benefit Morales.

In theory, Chile’s miners should be a happy bunch. A business-friendly right-wing president-elect, José Antonio Kast, is to take office in March; prices for major Chilean export items – copper and lithium – have soared; and interest rates are projected to fall in coming months. And yet mining industry leaders, who are hoping the incoming government will help unleash a project pipeline worth over US$100bn, are wary they may be left out in the cold. Not only did President-elect Kast step back from his expected decision to appoint a top mining executive with years of industry experience as mining minister, but he also did away with the cabinet post altogether and merged it with that of economy minister.

Kast had been widely expected to appoint Santiago Montt, the CEO of Los Andes Copper and a former executive at mining giant BHP, to the role of mining minister. Instead, Kast announced on 20 January that Daniel Mas, a businessman and trained agronomist with no background in mining, would serve as the minister for both mining and the economy.

Chile’s national mining industry lobby group (Sonami) responded in a statement that it did not agree with the decision to merge the mining portfolio with the economy ministry, given the number of urgent issues at hand. The head of the Chilean mining chamber, Manuel Viera, was more emphatic. “This was an opportunity to appoint a professional linked to mining to lead the portfolio,” Viera said. “Today mining, despite being our national emblem and the activity that contributes the most resources to the public purse, is treated as second rate.”

The industry’s concerns include excessive red tape needed to obtain new permits, a host of environmental lawsuits, and uncertainty over the regulatory environment. To help overcome the challenges, miners want Kast to streamline environmental regulations, improve mining-specific infrastructure, and create stable, long-term tax incentives for large-scale investments similar to the Rigi programme introduced by President Javier Milei in Argentina.

During a visit to the Dominican Republic in late January, however, Kast seemed to suggest he was not inclined to water down environmental regulations. “Chile has gone through different stages in mining development, and the most important thing here is to ensure people’s quality of life. Our fight is against poverty, to improve people’s quality of life while always respecting the environment,” Kast said in response to questions regarding possible Chilean mining assistance for the Dominican Republic. “This dispute has taken place in Chile, and we always emphasise that this is done while respecting the environment and the dignity of people.”

Miners also want the new administration to establish the diplomatic conditions to allow for mining projects and infrastructure to expand across borders. Currently there are a number of mines that straddle the Andean border with Argentina and which would gain considerable productivity if they could be merged through a joint-venture or an operational alliance.

Still, mining experts have told Chilean media outlets that they expect Mas to advance some of the industry’s demands, such as the deployment of new infrastructure and the deregulation of permits so that new investment projects can get underway.

New priorities

According to incoming Finance Minister Jorge Quiroz, the Kast administration’s priorities will be to simplify regulations, lower the tax burden, and implement a series of spending cuts. Quiroz said spending cuts of US$6bn would take up to 24 months, not the 18 months that were projected during last year’s election campaign. The corporate tax rate would fall by one percentage point from currently 27% over the government’s four-year term, Quiroz said. On the prospects for the mining industry, the long-time business consultant and Kast advisor was particularly upbeat. “We can increase production in the next 12 to 24 months by at least 10%.”

Development: On 1 February Panama’s human rights ombudsman, Patria Portugal, agreed to mediate between the government of President Ricardo Martinelli and indigenous groups from the Ngäbe Buglé comarca (an indigenous political administrative region) who have been blockading the Pan-American Highway since 30 January in protest over a new mining bill.

Significance: The indigenous groups are up in arms over Martinelli’s apparent backtracking over a promise made last year in relation to a mining law. In March 2011, Martinelli was forced to repeal a law, which would have opened up the sector to foreign government investment, due to popular pressure. Indigenous concerns are based on the fact that Cerro Colorado, believed to hold the biggest copper reserves (25bn pounds, worth US$75bn) in the country, lies within the Ngäbe Buglé comarca.

Key points:

• Last week the congressional Commerce & Economic Affairs committee sent a reformed bill (415) to the plenary, which dropped an article (5); article five addressed the protection of mineral, water and other natural resources in the Ngäbe Buglé region (which spans some 8% of national territory). The article had been agreed as part of the talks between the government and indigenous groups last year.

• The reversal by the pro-business President over the mining law last year was one of his two major U-turns since taking office in July 2009 and followed his failed attempt at weakening labour and environmental legislation (the so-called ‘Ley Chorizo’) in July 2010. His hand was forced by nationwide protests, with unrest most pronounced in the Ngäbe Buglé comarca and, in particular, in the Chiriquí and Bocas del Toro provinces. The latter was the site of the July violence, which resulted in at least two deaths amid clashes with police and forced the U-turn over the ‘Ley Chorizo’.

• While an October 2010 report by the economy ministry put Panama's copper reserves at some 47.2bn pounds, worth an estimated US$141.6bn in situ, previous governments have resisted opening up the mining sector to foreign governments because of public opposition.

Paraguay is just weeks away from the first party primaries to select presidential candidates for the scheduled 21 April 2013 general election. An exemplary electoral process from the very start is critical to the country, which has been become something of a regional pariah following the lightening impeachment in June of the former president Fernando Lugo (2008-2012), which resulted in Paraguay’s temporary political suspension from regional blocs including the Southern Common Market (Mercosur) and the Union of South American Nations (Unasur, which groups all 12 countries in South America), on the grounds that the democratic order in the country had been ruptured.

Given these unusual circumstances, this early stage of the electoral process, which normally would not attract much international (or indeed domestic) attention, is being closely followed by the international community. As a result, the Paraguayan electoral authorities and political parties alike are under intense pressure and their behaviour in the coming weeks and months could have important consequences for the country’s regional and international standing.

Following Lugo’s historic electoral victory in 2008, when he unseated the Asociación Nacional Republicana-Partido Colorado (ANR-PC), which had been in power for over 60 years, the 2013 election was always going to represent another import step for democracy in Paraguay. It would either consolidate democracy with a smooth alternation of power, or result in a setback, with the ANR-PC making a swift return. However Lugo’s impeachment, which was entirely unforeseen by Paraguay’s regional neighbours, including Brazil, has resulted in even more importance being attached to the 2013 election.

Led by President Federico Franco, the administration that replaced the Lugo government has not been recognised by any of the other 11 Unasur member countries. Despite this, Paraguay was spared the prospect of total regional isolation after Unasur’s efforts to get Paraguay also suspended from the main hemispheric Organization of American States (OAS) failed to prosper, for lack of consensus. Unasur and Mercosur have each said that Paraguay’s suspension will only be lifted once “democratic order in the country is restored”, adding that the staging of free and transparent elections could facilitate this.

Thus a transparent electoral process, completely open to scrutiny by the entire international community, is in Paraguay’s best interest. Yet in an attempt to reassert its position the Franco administration, which rejects the argument that the impeachment constituted a break in the democratic order, is reluctant to invite Unasur electoral observers, alleging an inherent Unasur bias against the country.

Welcome & unwelcome observers

Unlike Unasur, which very deliberately took a decision not to engage with Paraguay until after the 2013 election, the OAS opted to actively cooperate with the local authorities, so as to help restore political stability and strengthen democracy. This was positively received by the Franco administration, which accepted the OAS offer of help and extended an invitation for it to send an observer mission to accompany the entire electoral process. The positive experience of the OAS’s first observer mission, sent to monitor the run-up stages, has increased the pressure on Unasur to revise its stance and send its own observer mission to the country to properly evaluate the electoral process [RBS-12-11].

The opportunity to send a Unasur envoy to Paraguay presented itself on 24 October, when upon his re-election as the head of Paraguay’s supreme electoral tribunal (TSJE), Alberto Ramírez Zambonini said that he would open the TSJE’s doors to all organisations interested in monitoring Paraguay’s elections, including Unasur. Two weeks later Ramírez Zambonini received a letter from the head of Unasur’s high-level group in charge of evaluating Paraguay’s political situation, the Peruvian Salomón Lerner Ghitis, in which he expressed his desire to conduct a visit to the country to evaluate the situation first hand. The letter irked the Franco government, which reiterated that it would not formally recognise or even meet with any Unasur official sent as an observer unless it first received some sort of “positive gesture” from Unasur.

Amid this uncertainty, Lerner Ghitis arrived in Asunción on 22 November. During his two-day visit he was not received by any government official, but he did manage to meet with Ramírez Zambonini and various other actors, notably including Lugo and members of his political umbrella group, Frente Guasú (FG). Before his departure on 23 November, Lerner Ghitis gave a press conference in which he said he would convey a “positive view” of the status quo in Paraguay in a report to be presented at a Unasur summit on 29-30 November in Lima, Peru. He said that would note in his report that the electoral process was advancing “normally and with calm”. Despite this, and to Paraguay’s frustration, Unasur failed to amend its stance on Paraguay at the summit, merely stating that it hoped to continue evaluating the electoral process and mooting the possibility of sending a full electoral observer mission to monitor the process.

Soon after Lerner Ghitis’s visit, the OAS dispatched the Nobel peace laureate and former president of Costa Rica, Oscar Arias (1986-1990, 2006-2010), to Paraguay, to lead the electoral observer mission. Arias arrived in Asunción on 28 November and explained that he had been sent down well in advance because the OAS wanted to closely follow all the developments on the ground, starting with the party primaries (see box) to make sure that democracy was being fully respected.

Unlike Lerner Ghitis, Arias has already been received by President Franco, who ensured him that his mission will have unrestricted access to all the political actors and relevant government institutions involved in organising the elections. Since then, Arias has met Ramírez Zambonini as well the president of congress Jorge Oviedo Matto. Echoing Lerner Ghitis, Arias expressed his satisfaction, saying the run-up to the elections was taking place with “absolute normalcy” , with all the political parties appearing to respect the established “rules of the game”.

On 4 December Arias began a series of meetings with political party leaders, starting with Lugo. Lugo expressed concerns about the electoral process: noting that the TSJE had not fully adopted all the OAS recommendations made after the 2008 elections, in particular the need to purge and update the electoral register. He also pointed out that the FG’s presence on the TSJE is small, compared to other parties and called for more international observers. Lugo told Arias that he “could not understand” why Unasur had not been invited to send an observer mission. Arias told Lugo that the OAS would take note of all his concerns and see if anything could be done, but downplaying these, he added that he had “confidence” that “the elections will be carried out peacefully and with transparency”. He added that to date the Franco administration had shown “commitment” to this task.

Primaries panorama

The first party primary is scheduled for 9 December, when ANR-PC registered party members go to the polls. This is bound to be one of the most contested primaries’; 47 different ANR-PC factions have presented candidates. However, the contest for the presidential nomination is a two horse race between Horacio Cartes, a business tycoon accused by Lugo of being one the main promoters of his impeachment, and a former Ciudad del Este mayor, Javier Zacarías Irún, an erstwhile Cartes ally. According to the latest national poll by Ati Snead, Cartes has 48.6% of voting intentions, just ahead of Zacarías Irún on 44.0%. The ruling Partido Liberal Radical Auténtico (PLRA) will hold its primaries on 16 December. The former public works minister, Efraín Alegre (2008-2011), had previously been selected as the consensus presidential candidate; but unexpectedly, other party leaders have now decided to challenge him in the primary. The FG will hold its primaries on 13 January when it is expected that Lugo’s preferred candidate, Aníbal Carillo Iramaín, will be chosen.  END BOX

• Unace

The Unión Nacional de Ciudadanos Éticos (Unace), a small right-wing party led by the retired General Lino Oviedo, will hold a primary in conjunction with Partido País Solidario (PPS) on 23 December. Tightly controlled by Oviedo, Unace has already announced that Oviedo will be its presidential candidate for a third time, but it had to agree to a primary in order to seal an alliance with the PPS. Nonetheless Oviedo will likely get the nod. On 14 November Oviedo announced that Alberto Soljancic, a former president of the powerful Paraguayan national rural association (ARP), would be his vice presidential running mate.

• Avanza País registers as a political coalition

On 25 November the TSJE announced that it had accepted the registration of ‘Avanza País’, a group of six political parties that broke away from Lugo’s FG, as a new political coalition. Avanza País split from the FG in October, after Lugo withdrew his backing for Mario Ferreiro as the FG’s presidential pre-candidate. Ferreiro, a popular TV personality who topped an FG poll of potential pre-candidates, was questioned by more radical FG members, who wanted either Lugo (who is constitutionally barred from seeking re-election) or his close aid, Sixto Pereira, to lead the presidential ticket. Avanza País will now be able to run its own slate in the 2013 race.

GUATEMALA | Anulan condena de Ríos Montt. La corte constitucional (CC) de Guatemala ha anulado la histórica condena y sentencia del ex dictador, Efraín Ríos Montt (1982-1983), por genocidio y crímenes contra la humanidad perpetrados durante la guerra civil de 1960-1996. El 20 de mayo, la CC resolvió por tres a dos anular la sentencia del 10 de mayo y ordenó retrotraer el juicio al punto donde estaba el 19 de abril (cuando fue suspendido por cuestiones de procedimiento) [IL-13-18], en base a que varios desafíos legales presentados por la defensa aguardaban resolución.

La decisión está basada en parte en un desafío constitucional (amparo) interpuesto por el equipo de la defensa, al final del juicio, que afirmaba que la corte no había remediado la violación al debido proceso desde el comienzo del juicio el 19 de marzo –la expulsión del abogado de Ríos Montt, Francisco García Gurdiel. García Gurdiel fue expulsado después de que este buscó recusar a la jueza que presidía el juicio, Jazmín Barrios, y su asociado, el juez Pablo Xitumil en base a que había "enemistad" entre él mismo y Barrios, y "amistad" entre Xitumil y el ex jefe de inteligencia, el retirado General José Mauricio Rodríguez, quien estaba bajo juicio por los mismos cargos pero que fue absuelto como parte del dictamen del 10 de mayo.

El equipo de defensa también afirma que hay 12 desafíos legales provisionales aguardando resolución, con varios otros presentados desde el 10 de mayo –provocando una vez más que la acusación acuse a la defensa de buscar el atascamiento del caso a través del empleo de todas las maniobras legales posibles.

La última decisión de la CC, que ha planteado grandes dudas acerca del futuro del juicio, tuvo lugar en medio de continuados signos de polarización dentro del país. Mientras el Presidente Otto Pérez Molina, él mismo un ex jefe de inteligencia militar (D-2), ha prometido respetar el veredicto final, al completarse el proceso de apelación, el 19 de mayo García Gurdiel dijo que 45.000 partidarios de Ríos Montt estaban dispuestos a "paralizar" el país en el caso de un dictamen desfavorable de la CC contra el ex general.

Development: On 13 August President Nicolás Maduro said he would shortly declare a national emergency and request special decree powers allowing him to speed through legal reforms and institutional/constitutional changes in order to tackle corruption “at its roots”.

Significance: “If it’s necessary to change all the laws, we’ll do it”, Maduro said at a ceremony in the capital Caracas to mark International Youth Day. Since being elected president in April, Maduro has been clear that corruption is the greatest threat to the Bolivarian Revolution. However, while the new government has moved against some corrupt officials, more latterly Maduro has opted to focus on what he calls the ‘war’ (economic and political) being waged against the Revolution by domestic and international extreme right-wing elements; which critics say is a mere smoke screen for the deeply rooted problem of corruption inside the Revolution that for years was either tolerated or ignored by the late former president, Hugo Chávez (1999-2013). Maduro called on young people to join him in the “rebellion” against corruption and asked them to pay attention in coming days to new denunciations of “total putrefaction from the human and moral point of view of those that lead the Venezuelan Right, [who] shield themselves in their false values”.

Key points:

• A day earlier (12 August), the former Chavista minister-turned-journalist, José Vicente Rangel, wrote in his weekly ‘El Espejo’ column in the daily Últimas Noticias that in vindicating the legacy of his predecessor President Maduro was also loyal to the need for an “accurate cut” in this “illness” afflicting Venezuelan society so as to prevent “the collapse of the Republic”.

• Rangel went on to call for “a national debate to determine responsibilities, arbitrate legal and political cases, effective popular participation and social control”. These measures, he said, were a necessary democratic and legal response to flush out those doubling up as “politicians and delinquents”.

• Separately the coordinator of the NGO Observatorio Venezolano de la Violencia (OVV), Roberto Briceño León, accused the Maduro government of overseeing the “anarchisation” of Venezuelan society and said there was “absolute impunity” in the country. Briceño said that the OVV projected the total number of homicides in the country at some 25,000 this year, up from its estimate of some 22,000 last year (the government put it at a lower 16,000 for 2012). Briceño added that Venezuela needed to be “pacified”, which requires dialogue and the implementation of the rule of law. Insecurity has long been the Bolivarian Revolution’s weak spot. Maduro’s response has been to call upon to the Venezuelan military (and the Bolivarian armed militias) for additional policing support.

FOREIGN RELATIONS | Senate gives the nod to Venezuela. On 10 December Paraguay’s senate approved by 29 votes to 10 Venezuela’s full adhesion to the Southern Common Market (Mercosur). The adhesion protocol, sent down by President Horacio Cartes, will now go to the congress, where it is also expected to pass.

Chile’s president-elect Michelle Bachelet, who is due to begin her second (non consecutive) four-year term on 11 March, has unveiled her 23-member cabinet. Her choices were always likely to attract scrutiny given the challenging task of balancing competing interests from the five parties in her Nueva Mayoría coalition, an electoral alliance forged last year between the Partido Comunista de Chile (PCCh) and the traditional quadripartite Concertación (comprising Bachelet’s Partido Socialista [PS] along with the Partido por la Democracia [PPD]; the Partido Democracia Cristiana [PDC] and the Partido Radical Social Demócrata [PRSD]).

The big winner in the new cabinet looks to be the smaller PPD which, with 15 seats in the new 120-seat lower chamber and six of the 38 senate seats, was awarded the most ministerial posts – six in all. While the incoming team will include some new faces, Bachelet above all favoured experience over factors like gender parity (see sidebar). Two of the key portfolios – education and foreign affairs, went to PPD heavyweights and political veterans Nicolás Eyzaguirre and Heraldo Muñoz. Both previously served in the Concertación administration led by Ricardo Lagos (2000-2006) – Muñoz as government spokesperson and Eyzaguirre as finance minister. Muñoz and Eyzaguirre were well received, although Melissa Sepúlveda, the president of the Federación de Estudiantes de la Universidad de Chile [Fech] did grumble that Eyzaguirre’s background was in finance rather than education.

The finance ministry went to another seasoned official, Alberto Arenas (PS), who served as the director of the state budget under Bachelet’s first mandate (2006-2010). One appointment to raise eyebrows was that of the new interior minister and cabinet chief, the most senior position, which went to a core member of Bachelet’s inner circle, Rodrigo Peñailillo, a former governor of Arauca (2002-2005) who coordinated her presidential campaign but has not previously held a cabinet post.

Nueva Mayoría’s biggest party, the PDC (which will have 22 deputies and six senators in the new legislature), got five cabinet posts. Bachelet’s PS, which will have 15 deputies and six senators, also received five cabinet posts. The PRSD, which will have six seats in the lower chamber, got two posts, while the PCCh which also won six seats in the lower chamber, was awarded its first ever cabinet post – the women’s ministry.

A warning sign

Challenges from within the Nueva Mayoría, particularly from the more radical leftist groups over contentious issues like education, has already forced Bachelet to make one U-turn. While Eyzaguirre’s appointment caused some disgruntlement among the student movement, Bachelet’s choice of Claudia Peirano as his number two, which she announced on 30 January, sparked an outcry both within and beyond the Nueva Mayoria, forcing Peirano to step aside five days later.

Former student leaders and now newly-elected deputies like the former Fech leader Camilla Vallejo (PCCh) objected to Peirano because of a letter against free higher education that she co-signed along with other public figures back in 2011. It was published in the national daily El Mercurio. That Peirano also owns a consultancy firm that provides services to a network of private colleges owned by her former husband, Walter Oliva, also prompted complaints about a potential conflict of interests. Members of the outgoing coalition like Cristián Mockenberg, vice-president of Renovación Nacional, were among those to flag up the episode as the first major setback for Bachelet and indicative of the power wielded over the president by the Nueva Mayoría’s radical members.

Another issue that has been highly contentious for the outgoing administration led by President Sebastián Piñera is that of the stalled HidroAysén mega-dam project. A special ministerial committee found, on 30 January 2014, that more studies were required. This effectively defers the final decision as to whether it should proceed to the Bachelet government. Piñera’s energy minister Jorge Bunster told reporters that the two of the 35 discussion points regarding the project – which involves the construction of five dams in Aysén (Region XI) - required additional investigation. The local press is reporting that these studies could take between eight months to a year.

In her manifesto, Bachelet said that “as it stands HidroAysén is not viable”. However her appointment of Máximo Pacheco Matte (PS) as her new energy minister has been ill received by environmentalists. They are suspicious of the fact that Group Matte (with which he has familial links) has a 35% share in the Chilean energy company Colbún, which owns 51% of HidroAysén (with the remainder held by Endesa of Spain). In his acceptance speech, Pacheco hinted at his support for the project, saying that while Bachelet has “many doubts” regarding the “complex project”… “unfortunately decisions regarding energy are all very complex because they have a lot of impact…people need energy in their homes…Chile needs to resolve these issues”. It is worth noting however that the new environment minister, Pablo Badenier (PDC), opposes the project.

• Gender parity

President-elect Michelle Bachelet, the first director of UN Women, appointed just nine women to her new 23-member cabinet, meaning that 39% of the cabinet is female. This is still an improvement on the outgoing cabinet, in which there are just six women.

With the realisation that the government will struggle, once again, to hit its target of a primary fiscal surplus of 0.5% of GDP this year, the finance ministry is mulling the idea of introducing a flexible fiscal target. The idea would be to adjust the target to the country’s economic growth cycle; to create a moveable band of spending, and revenues similar to the government’s current inflation target. Collapsing tax revenues in the midst of Brazil’s worst recession since 1901, combined with political deadlock in the federal congress, are seriously limiting the government’s capacity to balance the books. Any attempt to loosen Brazil’s fiscal responsibility law, however, is also likely to run into political opposition.

On 12 February, the government is expected to announce further cuts of between R$25bn and R$30bn (US$6.3bn and US$7.6bn) in response to the latest forecast of a shortfall. Of this, around R$6.5bn (US$1.6bn) is expected to come from cuts in spending by states and municipalities. The government is also hoping, probably in vain, to win congressional approval of its plans to reintroduce the tax on all financial transactions (CPMF), which would theoretically bring in another R$10bn (US$2.5bn). But when President Dilma Rousseff mentioned the tax in a speech to the joint houses of congress last week, opposition deputies reacted with deafening boos.

State troubles

It is not just the federal government that is in trouble. A report in Folha de São Paulo, published on 9 February, showed that 20 of Brazil’s 27 state governments had failed to comply with their legal obligations to run a surplus due to a fall in tax revenue. According to the report, Brazilian states collected just R$409.3bn (US$105.3bn) in taxes last year, 7% less than forecast earlier in 2015. The worst affected state was Rio de Janeiro, which relies heavily on tax revenues from the oil and gas sector. In São Paulo, the government expected a year-on-year increase in tax collection of 1.5%, but it closed the year taking 3% less. As a result, the state government debt increased by 20 percentage points to 168% of GDP.

In the face of these problems, federal finance ministry officials have briefed the local media that they are looking at the idea of creating a flexible fiscal target. Such an idea has been widely criticised by investors and economists who believe that the proposal will erode yet further the government’s fiscal credentials. For Pauderney Avelino, the leader of the opposition Democratas (DEM) party in the federal congress, the idea is “yet another example of the new economic matrix of the PT [Partido dos Trabalhadores] which is doing away with the fundamentals of the Brazilian economy. For this reason, we are going to fight this proposal.”

The “new economic matrix”, brainchild of Rousseff’s first-term finance minister, Guido Manteiga, consisted of historically low interest rates, a weakened exchange rate partially engineered through currency controls and temporary tax breaks for favoured industries. Critics argue that the government is now returning to these discredited policies with Nelson Barbosa at the helm of the finance ministry.

In order to try to win congressional approval for such a controversial plan, finance ministry officials have mulled linking the approval of fiscal reforms to debt relief in financially strapped states. The government could extend for 10 years the maturity of the debt that states hold with the federal government.

• Social programmes

Brazil’s welfare programmes have suffered a real-terms cut, despite nominal increases, due to the galloping rate of inflation, according to a report published on 8 February in O Estado de São Paulo. Eight out of the government’s nine main welfare programmes, including the flagship conditional cash-transfer scheme, Bolsa Família, had lower funding in 2015 compared with 2014. The year to date rate of inflation in January was 10.71%.

ECUADOR | Bond issue. The economy & finance ministry announced on 18 January that it has successfully placed US$3bn in sovereign bonds in international capital markets. This is Ecuador’s first debt issue of the year, and according to a ministerial statement the 10-year bonds were placed at an interest rate of 7.87%. It is the lowest interest rate offered by such bonds since Ecuador returned to international markets in 2014.

The ministry said that the funds raised by the bond issue would be used to fund part of the government’s 2018 investment plan. It also highlighted that the high demand for the bonds, which were oversubscribed to the tune of US$10bn, shows that foreign investors remain confident about the country’s economy, which according to estimates from the central bank (BCE) grew by 1.5% in 2017, above market expectations of 1%.

Meanwhile, in another sign of the government’s intention to integrate the country’s economy into the global economic system, the foreign trade minister, Pablo Campana, is attending the World Economic Forum (WEF) annual meeting held between 23 and 26 January in Davos, Switzerland, to try to drum up investor interest in Ecuador. This is the first time that Ecuadorean government officials will take part in the WEF Davos meeting. President Lenín Moreno claimed this week that while he was a left-winger convergences with business sectors and right-wing politicians were “a good thing”, adding that some of his former comrades “are stuck in socialism of the last century”.

Just ahead of Venezuela’s presidential election on 20 May and of the next polls in Guyana (due in 2019), the longstanding territorial dispute between the two South American neighbours over the Essequibo region may be heating up again. On 29 March Guyana formally submitted the dispute to the International Court of Justice (ICJ) at The Hague. The Venezuelan government immediately rejected the Guyanese move as “unacceptable, sterile, and unenforceable”: it favours a settlement based on direct negotiations.

The Essequibo is a resource-rich area of around 159,000km², which represents around two-thirds of Guyana’s total territory. For over a century the status quo has been that Guyana has administered the area while the Venezuelan claim to it has been pretty much dormant. But things have gradually begun to change as offshore oil discoveries in the Essequibo have brought the prospects of an oil boom closer to Guyana, and as the embattled Bolivarian Revolution in Venezuela has occasionally seen political gains to be made from playing the nationalist card.

In 1899, more than a century ago when Guyana was a British colony, an arbitration tribunal ruled against the Venezuelan claim. This was originally accepted by Venezuela, but half a century later, based on evidence that the British may have unduly influenced the judges, Caracas rejected its findings. Under the subsequent Geneva Agreement signed in 1966 (the year Guyana became independent) the two sides agreed to hold new direct negotiations to resolve the dispute but these failed to make much progress.

During the Venezuelan presidency of the late Hugo Chávez (1999-2013) good relations between the two governments meant the issue was largely left to one side. But under Chávez’s successor Nicolás Maduro tensions have begun to grow, conceivably fanned by the major oil finds in the area. Guyana, meanwhile, continues to offer oil and gas exploration licences in the Essequibo despite Venezuelan objections.

On 29 March the government of Guyanese President David Granger said it had formally applied for the ICJ to confirm the legal validity of the 1899 arbitration award. This followed a decision in January by the secretary general of the United Nations (UN), António Guterres, to indicate that, in view of the failure of earlier UN-sponsored ‘Good Offices’ negotiations, ICJ arbitration was now the next step forward to resolve the dispute. The Georgetown government said its decision to turn to the ICJ was based on the terms of the 1966 Geneva Agreement.

The Venezuelan government disagreed sharply. In a separate statement it argued that the text of the Geneva agreement, which speaks of resolving the dispute “amicably” and in a way “that is acceptable to both parties” in effect rules out going down the route to a “judicial settlement”. Venezuela, it said, does not recognise ICJ jurisdiction as mandatory.

Guyana’s foreign minister, Carl Greenidge, retorted that UN support had forced other governments ultimately to accept ICJ rulings. What remains to be seen is if this is another short-term flare-up in tension, or if the proximity of the Venezuelan elections will tempt the Caracas government to harden its position further as a way of leveraging nationalist sentiment.

PERU | Increase in pensions approved. Peru’s cabinet has approved increases in pension payments for most of the country’s pensioners. This marks the first pension increase in 18 years. According to the economy & finance minister, Carlos Oliva, it was rendered possible by a 13.8% increase in the tax take in 2018. The specific increases are laid out in a supreme decree. They depend on pension contributions and time in the pension system.

Those with the lowest pension payments of PEN$415 (US$125) will rise to PEN$500 (US$150). The most common type of pension will now be lifted to PEN$857 (US$258). And those with the largest pension will see an increase from PEN$857 (US$258) to PEN$893 (US$269). Overall, 537,000 pensioners will see higher payments, to take effect from June.

PERU | Tullow expands oil exploration in Peru. The British energy company Tullow Oil announced last week that it was expanding its exploration activities in northern Peruvian waters through its Tullow Peru Limited subsidiary. Tullow plans a US$52m investment, divided amongst two different blocks. In one of these blocks, Tullow is in partnership with the Australian company Karoon. Tullow hopes that drilling in the blocks will begin within the first two years.

The blocks begin about five miles off the coast of the northernmost region of Tumbes near the border with Ecuador. Petroperu, the state-owned oil company, says that the sites are sufficiently far off the coast to safeguard against any impact to the fishing or tourism industries. It has sought to provide information to local groups on the development and impact of the project. In addition, it highlighted the financial benefits for Tumbes. The government is hoping that the deal will attract other multinational energy firms to seek out exploration contracts in Peru.

“A negative step in the fight against corruption and impunity”. This was the response by the Organization of American States (OAS) to the announcement that, after failing to reach an agreement with the Partido Nacional (PN) government led by President Juan Orlando Hernández, the OAS-sponsored Mission to Support the Fight against Corruption and Impunity in Honduras (Maccih) would end its mandate on 19 January after nearly four years in the country. President Hernández’s insistence that anti-corruption efforts would continue albeit on a national level is unlikely to assuage concerns which have intensified since the October 2019 conviction by a US court of Hernández’s brother, Juan Antonio Hernández, for drug-related crimes which implicate the PN and Hernández himself.

Maccih’s mandate ended two days after the government and the OAS confirmed their failure to reach an agreement. In a press release issued on 17 January to mark the announcement, the OAS was clear that the Honduran government’s position has “been not to accompany this proposal, which has made it impossible to renew the Mission”. Hernández, however, sought to duck responsibility, insisting that it was not possible without congressional approval. In December 2019, the 128-member unicameral national legislature (some of whose members had been implicated in the investigations pursued by Maccih) had approved a congressional report calling for its mandate not to be renewed. Among other things, legislators complained that the OAS-sponsored mission represented an attack on national sovereignty – the same argument used in neighbouring Guatemala to terminate the mandate of the United Nations (UN)-backed International Commission against Impunity in Guatemala (Cicig) last year [SSR-19-11].

In its 17 January press release, the OAS underlined the impact of Maccih - which was set up in April 2016 in response to protests over a massive corruption scandal involving the embezzlement of at least US$300m from the Honduran social security institute (IHSS) during the PN administration led by Porfirio Lobo (2010-2014), with some of the stolen funds used to fund Hernández’s 2013 election campaign. The OAS noted that the work of Maccih and the attorney general’s office (AG) resulted in the prosecution of 133 people and 14 cases. These included the so-called ‘network of deputies’ case, brought against five national deputies in December 2017 for the embezzlement of public funds.

Other Maccih-backed investigations have implicated some of the country’s most powerful people. One resulted in the conviction of former first lady, Rosa Elena Bonilla de Lobo (2010-2014), on charges of fraud and embezzlement while Lobo himself was accused in late May 2019 by Maccih of money laundering, fraud, falsification of documents, and bribery. Another high-profile investigation involved the ‘Agua Zarca’ hydroelectric dam project opposed by Berta Cáceres, the leader of local indigenous organisation Consejo Cívico de Organizaciones Populares e Indígenas de Honduras (Copinh), whose murder in 2016 stunned the local and international community (see box).

• Sentences handed down in Cáceres case

In December 2019 a Honduran court handed down prison sentences of between 30 and 50 years for seven men convicted of Cáceres’s murder.

   Copinh described the sentences, which came just over a year after the men were found guilty, as a “first fissure in the wall of total impunity” surrounding the case. However, it complained that the sentences don’t go far enough and that the intellectual authors of the crime have yet to be brought to justice.

  In November 2018 the court found that Cáceres’ murder was ordered by executives from Desarrollos Energéticos Sociedad Anónima (Desa), the local company responsible for the construction of the dam, due to delays and financial losses linked to the protests she had coordinated against it.

  In response to the sentences, Copinh said in a statement that “impunity doesn’t end with the sentences of the material authors”, adding that there is “sufficient proof to try and sanction members of the Atala family [one of the country’s most influential families which dominates Desa’s board of directors] and others” for the crime.

   So far only Roberto David Castillo, a former Desa executive president has been accused of being behind the murder. He was arrested in March 2018 but his trial has yet to conclude.  

As well as collaborating with local institutions charged with “preventing, investigating, and punishing acts of corruption”, Maccih’s remit also included proposing reforms and legislation to improve criminal justice, political campaign financing, and the public security system and in its 17 January statement, the OAS highlighted Maccih’s impact in “strengthening national capacities to combat corruption and impunity”. A September 2019 report by the US-based think-tank Washington Office on Latin America (Wola) highlights as examples of these reforms, the creation of a new judicial system against corruption in the country which comprises anti-corruption criminal courts and tribunals as well as the special prosecutor’s unit against corruption and impunity (Ufecic), a unit of the AG set up in 2017 to work alongside Maccih. Wola considers these entities to be “without a doubt” two of the major reforms spurred by Maccih.

Given these achievements, the government’s decision not to renew Maccih’s mandate prompted an international response. US Assistant Secretary of State Michael Kozak tweeted that he was “deeply disappointed” that it had not been extended, adding that Hernández “has put forward no credible alternative to fight corruption” (although Wola has highlighted the US’s role in the failure of these anti-corruption efforts – see sidebar) while the European Union described it as “regrettable and a step in the wrong direction”.

Providing reassurances?

Hernández has since sought to assuage concerns about the direction of anti-impunity efforts following Maccih’s departure. On 24 January the AG announced that a new unit, the specialised unit against corruption networks (Uferco), would be established to replace Ufecic. Meanwhile on 21 January, Hernández tweeted that he planned to ask the legislature to discuss and make decisions on various anti-corruption initiatives proposed by Maccih. Examples include the law on effective collaboration which would enable the AG to negotiate plea deals with those accused of crimes, offering more lenient sentencing in exchange for information that could be used to combat criminal groups and operations as well as the so-called ‘law on official secrets’, which relates to the classification and declassification of documents (which Hernández said had been 98% agreed).

Lobby groups such as Wola have questioned whether the legislature is likely to act on these demands, however, pointing out that as well as rejecting an extension of Maccih’s mandate, it has approved measures counterproductive to anti-corruption efforts. Among other things, these include legislative changes approved in October 2019 which reactivate the departmental social fund (which allows congress members and public officials to receive and execute public funds for social works), and a legislative decree granting the superior court of accounts (which is responsible for ensuring the proper use of state assets and resources), a three year period to audit funds, during which time those officials may not be charged for improper use of funds.

•  New study

Amid the concerns about the direction of anti-corruption efforts, human rights groups have applauded a new study released on 6 February by the national anti-corruption council (CNA), a civil-society umbrella group, and the Honduran social forum on external debt (Fosdeh), a collective of NGOs, which sheds further light on corruption in Honduras, estimating the cost of it, and identifying the sectors involved.

 The study puts the macroeconomic impact of corruption at L85bn (US$3.5bn) in 2018, equivalent to 12.5% of GDP, while the total cost between 2014 and 2018, the period surveyed, was estimated at L254bn.

   A joint statement released on 14 February by Wola and other international NGOs such as Oxfam America and Center for Justice and International Law (Cejil) notes that this report exposes the organisations to “retaliation from those who benefit from corruption” and calls on the international community and the Honduran government to “guarantee the safety and integrity of these two invaluable organisations”. END BOX

• Hernández’s brother convicted

In October 2019 a US court convicted President Juan Orlando Hernández’s brother, Juan Antonio, on four counts, which include conspiring to import cocaine into the US. The verdict caused some discomfort for President Hernández who first won election in 2013 given that the court found that millions of US dollars of drug proceeds had been funnelled to PN electoral campaigns to “impact on Honduras’ presidential elections in 2009, 2013 and 2017”, including from Mexican drug kingpin Joaquín ‘El Chapo’ Guzmán Loera.

• US role

As was the case with the closure of the United Nations (UN)-backed International Commission against Impunity in Guatemala (Cicig) Wola highlighted the failure by the US administration led by President Donald Trump to support anti-corruption efforts in Honduras. In a statement released on 15 January it points to the signing last year of the controversial asylum cooperation agreement (ACA) with Honduras (which the US also signed separately with Guatemala and El Salvador [SSR-20-01]) as a sign that the Trump administration is “prioritising acquiescence to a harmful anti-migrant agenda, rather than addressing the systemic corruption that is driving migration”.

• CNA/Fosdeh study

The CNA/Fosdeh study on corruption in Honduras estimates that organised crime accounted for 40% of the total cost of corruption, followed by the private sector (31%) and central government (16%).

Brazil held the first round of its municipal elections on 15 November. Although 57 major cities – including 18 state capitals – are still to choose their mayor in a second round of voting scheduled for 29 November, the results in the rest of the country have been interpreted as a blow to President Jair Bolsonaro and a vote of confidence for centre-right establishment parties, some of which were crushed in the general election of 2018.

No longer affiliated with a political party, in the weeks running up to the municipal elections President Bolsonaro had endorsed a few dozen candidates running for mayor or councillor in municipalities across the country, calling on his supporters to cast their vote to defeat “the left”. Many other candidates had jumped on the ‘bolsonarismo’ bandwagon, using the president’s name and image to try and attract votes. Few can claim to have been successful.

Of the mayoral candidates publicly endorsed by Bolsonaro, only two were elected on 15 November, in middling-sized cities in the states of Minas Gerais and Piauí. Two others have made it to the run-off in a state capital, both in second place: ‘Capitão Wagner’ Sousa Gomes from the Partido Republicano da Ordem Social (PROS) in Fortaleza, Ceará state; and the incumbent mayor Marcello Crivella in Rio de Janeiro, representing the Republicanos party. Crivella is expected to be roundly beaten by his predecessor as mayor Eduardo Paes (Democratas, DEM) on 29 November.

Celso Russomanno (Republicanos), the Bolsonaro-backed candidate in São Paulo, came fourth with 10.5% of the vote, having slipped from the top of the polls since the president endorsed him – although this mirrors his past performance in the municipal elections of 2012 and 2016, where he similarly foundered on election day after initially polling quite well.

The context of the coronavirus (Covid-19) pandemic – which has now claimed around 167,000 lives in Brazil – and the accompanying economic crisis probably worked in the favour of established parties and candidates with a good management track record, rather than the outsiders that Bolsonaro seeks to represent. The landslide re-election of Alexandre Kalil from the Partido Social Democrata (PSD) in Belo Horizonte, Minas Gerais, is an example of this. Kalil’s strict response to the pandemic made him a target of ‘bolsonarista’ critics but clearly found resonance with the Belo Horizonte electorate, as he was re-elected with 63.2% of the vote; his closest challenger, who had been endorsed by Bolsonaro, managed less than 10%.

Bolsonaro has sought to downplay the poor performance of the candidates he endorsed – which included some running for municipal councillor getting no more than a few hundred votes – and to frame the election as a “defeat for the left” and a continuation of the “conservative wave” that had accompanied his election in 2018. In fact, this year voters returned to the establishment parties which many of them had spurned in favour of Bolsonaro and his allies at national level two years ago.    

The dominant centre-right

Mirroring the fragmentation of politics at national level, elected mayors hail from 28 different parties this year. But over 3,000 of the country’s 5,568 municipalities elected a mayor from one of just five parties: the Movimento Democrático Brasileiro (MDB), Progressistas (PP), the Partido da Social Democracia Brasileira (PSDB), the PSD, and the DEM. These are broadly right-of-centre outfits, although some are known for their ideological flexibility and they are often designated as centrist. The PSDB has been seeking to fashion itself as a viable alternative to Bolsonaro on the right, while at national level the PP and PSD are part of the ‘centrão’ bloc which is currently allied with the federal government in congress.  

These parties have traditionally dominated local politics, although dynamics between them appear to be shifting; this year, the MDB and PSDB have lost some ground (the former retains the highest number of mayors and municipal councillors of any other party), while the number of both mayors and councillors from the DEM, PP, and PSD has increased. The DEM, PSD, and PSDB have already claimed victory in state capitals (three for the DEM, two apiece for the PSD and PSDB), and they could win more in the second round.

The left refreshed

The Partido dos Trabalhadores (PT) elected fewer than 200 mayors, repeating its poor performance in the 2016 elections and confirming that its hegemony over the Brazilian left is over. Several young candidates from alternative leftist parties, however, have emerged as a possible source of hope and renewal.

On 29 November, all eyes will be on the run-off in São Paulo, where Guilherme Boulos, a former leader of the urban landless workers’ movement (MTST) and former presidential candidate representing the left-wing Partido Socialismo e Liberdade (PSOL), will face the incumbent mayor, Bruno Covas from the PSDB. Although Covas is favourite to win, Boulos’ strong performance in the first round has propelled the PSOL to the position, previously held by the PT, of left-wing rival to the PSDB in São Paulo.

The PSOL has also succeeded in garnering a strong presence in the municipal councils of both São Paulo and Rio. In the latter, the PSOL’s Tarcísio Motta displaced Carlos Bolsonaro, one of the president’s sons running for Republicanos, as the city’s most voted candidate for councillor.

In the south of the country, several leftist parties are closing ranks behind Manuela D’Ávila from the Partido Comunista do Brasil (PCdoB), who will face Sebastião Melo from the MDB in the run-off in Porto Alegre, Rio Grande do Sul. The second round in Recife, in the north-eastern state of Pernambuco, will pit two young leftist candidates against each other, who happen to be cousins: the PT’s Marília Arraes and João Campos from the Partido Socialista Brasileiro (PSB).

A shift away from ‘bolsonarismo’?

Many in Brazil have been quick to hail last week’s election as a defeat for Bolsonaro and a decisive rejection of his divisive, offensive, and ultra-conservative populist politics. As political parties are already looking to the 2022 general elections, the moderate right is likely to take heart from its performance on 15 November; meanwhile, different members of the disparate left are emphasising the need for a broad coalition united around a consensus candidate if it is to stand a chance in two years’ time.

Although the results of the election do suggest that the president has lost some of his political clout over the electorate, it would be premature to claim that Bolsonaro and ‘bolsonarismo’ have been defeated, or that the dissatisfaction which contributed to their recent success has disappeared. At around 23.1%, abstention was high for Brazil, where voting is compulsory – above the rate in 2018 (20.3%) and 2016 (17.6%) when voters were known to be disillusioned with politicians in power, although the coronavirus was certainly an influencing factor. Including the number of blank and spoilt ballots, 30% of the electorate did not cast a vote last week. Abstention was highest in Rio (28%) and São Paulo (27.3%).

Macapá

Macapá, the capital of the small northern state of Amapá, was the only city not to hold the election on 15 November. Electoral authorities agreed to postpone the vote amid security fears after a days-long electricity blackout in the state, which began on 3 November following a fire in an electricity substation, prompted protests and looting. Power had slowly been reinstated across the state, with Macapá one of the last areas still suffering from an intermittent supply, but then on 17 November, the whole state was plunged into darkness again. The federal government says it is investigating the cause and that the power supply is being gradually reinstated. Macapá’s election is now due to be held on 6 and 20 December.  

TSE troubles

Brazil’s supreme electoral court (TSE) has had to brush away doubts regarding the reliability of the electronic voting system – some voiced by President Bolsonaro himself – after a problem with a newly acquired supercomputer led to a delay in the release of results on the evening of 15 November. The TSE also deflected a cyberattack on its software on the day of the vote, which TSE president Luís Roberto Barroso denounced as a deliberate attempt to erode public confidence in Brazil’s voting system and democratic institutions. Barroso has asked the police to investigate the source of the attempted hacking.

On 30 September, the Salvadoran government led by President Nayib Bukele presented its proposed 2021 national budget, which is unlikely to be approved by the legislature given concerns about the huge rise in spending.

The proposed budget is for US$7.45bn, up 16% on the US$6.4bn approved for 2020 and would be the largest in the country’s history. It includes big spending increases in education, health, security, and defence. But analysts say it relies on unrealistic forecasts. On 22 October the Guatemala-based economic think-tank, Instituto Centroamericano de Estudios Fiscales (Icefi), warned that the increase in social spending is “uncertain” due to an “exaggerated over-estimation of tax income”, while on 6 October international credit ratings agency, Fitch Ratings, said that implementing the proposed budget in full would “increase pressure on El Salvador's ‘B-’sovereign rating from deteriorating debt sustainability metrics and financing constraints”.

Finance Minister Alejandro Zelaya says the budget aims to bring about a “Salvadoran miracle”. However, Zelaya has admitted that it is difficult to envisage it passing the opposition-controlled legislative assembly - an assessment with which Fitch agrees. The ratings agency emphasised that “short-term borrowing has already hit record levels, and the approach of next year's legislative elections may complicate efforts to secure additional multilateral support”. Fitch forecasts that El Salvador’s GDP will contract by 8.2% in 2020 and expects its fiscal deficit to come in at 11% of GDP, up from 3.1% in 2019. The proposed budget “would imply a 7.5% of GDP fiscal deficit, debt-to-GDP of 94%, and financing needs of nearly US$1.85bn”, which Fitch believes would be challenging to meet. 

Fitch had already raised concerns over El Salvador’s debt sustainability in July, when the government announced a US$1bn bond issue. “The high interest rate on the recent bond (issued at 9.5%) and limited domestic financing options underscore how a sharp rise in debt, higher interest burden and continued financing challenges raise questions around debt sustainability, especially in the absence of concrete strategies to consolidate fiscal accounts in the coming years” Fitch noted. El Salvador’s debt to GDP ratio has increased from 58.8% in 2011 to 93.2% in 2020, according to Icefi, which projects that the proposed budget would push that figure to 95.6%.

Local analysts have also raised concerns over the budget. Carmen Aída Lazo, an economist and dean of the Escuela Superior de Economía y Negocios (ESEN), a private, non-profit university in El Salvador, has pointed out that almost 20% of the planned spending is allocated to servicing public debt. Other criticisms include projections that don’t take into account the impact of the coronavirus (Covid-19) pandemic on public finances, and a reliance on a strong economic recovery in 2021. Icefi believes it is more likely that an economic recovery will be slow, and that public finances will be affected for longer.

Meanwhile Rommel Rodríguez, an economist at Fundación Nacional para el Desarrollo (Funde), the local branch of international anti-corruption NGO Transparency International, also warned that the spending plans fall foul of the constitution, with planned funding for the judicial branch falling short of the level required by law. Rodríguez says that the judiciary should be allocated at least 6% of budget revenue as per the constitution but under the current proposal it would receive only US$290m which is short of this.

The 90-day dialogue process between Ecuador’s indigenous movement and the government led by President Guillermo Lasso concluded on 14 October. It was neither a resounding success nor an unmitigated disaster. The government minister, Francisco Jiménez, was keen to focus on the 218 accords that had been struck in the course of the dialogue process as a sign of its success during his remarks at the closing ceremony. These all now need to be implemented, however, and the president of the country’s largest indigenous movement, Confederación Nacional de Organizaciones Indígenas del Ecuador (Conaie), Leonidas Iza, said it would reserve judgement until then. He also stressed that the thorny issue of fuel subsidies had not yet been fully resolved.

The dialogue table was established after 18 days of nationwide indigenous protests in June, blocking access roads to the capital, and elsewhere in the country, which resulted in at least six fatalities and some 600 people being injured. Fuel was once again the catalyst for the protests, just as it had been in October 2019 when Lasso’s predecessor, Lenín Moreno (2017-2021), removed the four-decade-old fuel subsidy (which he later reinstated). President Lasso narrowly survived an impeachment attempt on 28 June brought by the opposition Unión por la Esperanza (Unes), aligned with former president Rafael Correa (2007-2017), under Article 130 of the constitution for having presided over “severe political crisis or internal unrest”.

The government then sat down with representatives of Conaie and the country’s other two main indigenous movements, Federación Nacional de Indígenas Evangélicos (Feine) and Confederación Nacional de Organizaciones Campesinas, Indígenas y Negras (Fenocin), to discuss a wide range of issues, including citizen security, collective rights, energy and natural resources, employment, labour rights, productive development, healthcare, education, and the targeted fuel subsidies.

Jiménez celebrated the accords that had been signed off on by the negotiating teams, highlighting indigenous decision-making power over the bilingual intercultural education budget; debt forgiveness of up to US$10,000 for small-scale farmers; a moratorium on oil extraction at 15 different sites and a temporary suspension on the granting of new mining concessions until a new law guaranteeing indigenous communities a prior consultation over mining, oil, and gas projects on their land is approved by the national assembly; and a mechanism to determine targeted fuel subsidies to benefit only the most vulnerable sectors of society.

Iza, who signed the accords alongside the president of Fenocin, Gary Espinoza, and the vice president of Feine, Édgar Sáez, acknowledged that some important progress had been made but he was critical of Lasso for failing to take part in any of the discussions (albeit a total of 37 government institutions, represented by cabinet ministers and other officials, did participate). Iza also stressed that none of the accords would be worth the paper they were written on if they were not implemented.

A technical commission will now proceed to monitor the implementation of the accords. Its composition should be decided upon before the end of the week, as well as the duration of its mandate. One immediate priority will be identifying the beneficiaries of targeted fuel subsidies, which could prove contentious and is likely to take some time.

Caution

“For the first time the government and indigenous organisations were face to face with the determination and enthusiasm to obtain results,” the government minister, Francisco Jiménez, said upon the signing of the accords. But Conaie president Leonidas Iza was wary of celebrating any “results” before any of the accords have been implemented. He also called for deputies to expedite the passage of the bill which could grant indigenous communities an effective veto over future mining, oil, and gas projects on their land.

HONDURAS | New energy law approved. On 31 August Honduras’s 128-member unicameral legislature approved a new energy bill in the third and final debate. Promoted by the conservative Partido Nacional (PN) government led by President Nasry Asfura, the initiative amends the legal framework of the electricity sector and transforms the state power company, Empresa Nacional de Energía Eléctrica (Enee), which has long reported massive losses, “without privatising it”.

The bill orders the separation of generation, transmission, and distribution activities into subsidiary companies, maintaining Enee, which has controlled all these aspects since the 1950s, as the parent company. According to a congress statement, this aims to grant these firms “administrative, technical, operational, and financial autonomy”, while Enee retains state ownership of the shares and strategic assets.

The same statement points out that one of the bill’s central points “expressly establishes that Enee will maintain its public status” and the State “will retain 100% of the shares of the companies resulting from its reorganisation”. It stipulates that subsidiaries’ shares cannot be transferred to third parties, and no entity other than the Enee parent company may hold shares.

President Asfura said last month that Enee’s financial losses were running at L50m (US$1.86m) on a daily basis. The new legislation also includes measures to “combat energy losses and theft, modernise metering, strengthen regulation, establish public bidding processes for power procurement, and promote investment and new technologies in the sector”.

The congress statement boasts that the bill, which was first introduced in May, follows an “extensive consultation process” via meetings with key sectors linked to the electricity subsector, including representatives from the private sector, such as leading business lobby Consejo Hondureño de la Empresa Privada (Cohep); international organizations such as the Inter-American Development Bank (IDB); renewable and thermal energy generators; trade unions and civil society organizations; and different political parties.

The reform was approved with 78 votes in favour. The PN has 49 seats following the November general election, and further support came from the main opposition Partido Liberal (PL) with which the PN has forged a loose legislative alliance. The PL has 41 seats.

The leftist opposition Partido Libertad y Refundación (Libre) of former president Xiomara Castro (2022-2026) has rejected the reform. It argues that the reform will pave the way for Enee to be privatised.

EL SALVADOR | Trade deficit. El Salvador’s trade deficit reached US$3.9bn between January and October 2011, a 22.6% increase on the same period the previous year, according to recent figures from the Central Bank (BCR). Exports in the first ten months of 2011 reached US$4.49bn, a 19.5% rise on the same period in 2010 while imports totalled US$8.4bn, a 29.9% increase on 2010. The main exports are maquila products (US$1bn); coffee (US$428m); and sugar (US$106m); while petrol accounts for a sizeable chunk of the country’s import bill (US$1.4bn).

Development: On 6 March Bolivia’s attorney general, Mario Uribe, called for the immediate revision of the criminal code and the code of criminal procedure in order to deal with a crime wave in several cities.

Significance: The government led by President Evo Morales has identified crime as a major priority. Though Bolivia has a relatively low homicide rate when compared to the Latin American average, crime and delinquency are on the increase. In a government survey on crime, published at the start of the year, insecurity and delinquency was identified as a problem in the four largest cities including the capital La Paz, Santa Cruz, Cochabamba and El Alto (the dormitory city next to La Paz).

Key points:

• Uribe made his comments after several protests in El Alto, which is a major bastion of support for President Morales. The protesters called for the death penalty in response to the crime wave.

• According to the 2011 Global Study on Homicide from the United Nations Office on Drugs and Crime (UNODC), Bolivia registered 884 homicides in 2010, or 8.9 per 100,000 inhabitants, According to the official crime survey by the national citizen security observatory (ONSC), which sits under the interior ministry, over the past five years crimes against individuals have risen to 118 per 100,000 in 2011, up from 32 per 100,000 in 2006. Over the same period, crimes against property increased to 187 per 100,000, up from 150 previously.

• In the ONSC survey, which interviewed 2,702 people, 43.6% of respondents cited insecurity and delinquency as the country’s main problem, far above social conflicts (12.4%), unemployment (11.8%) and poverty and inequality (11.1%).

• At last year’s plurinational summit, Morales identified citizen security, the battle against drug trafficking and delinquency as key challenges for his government. The government is also drawing up a new law on citizen security. Last month, the II National Summit on Citizen Security took place in Tarija. It was attended by federal and local government representatives, as well as social organisations and members of the private sector. The aim was to discuss the proposed citizen security bill, which includes provisions to: restrict the sale of alcohol, clamp down on theft (particularly of car parts), and introduce new courts to address non-criminal code civil law contraventions.