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In February Bolivia’s President Luis Arce inaugurated the country’s first steel production plant, the Complejo Siderúrgico del Mutún, located in Puerto Suárez in the eastern department of Santa Cruz. The hope is that the domestic production of steel will help to reduce imports by up to 50%, saving the country over US$200m annually. So far, US$546m has been invested in the project, which has been described by the government as one of the country’s most ambitious industrialisation initiatives, and one that has been fifty years in the making. A large proportion of the investment was provided by the Export-Import Bank of China, and the plant will be operated by Sinosteel Engineering and Technology for the first year.

The Cerro Mutún iron ore deposit is one of the world’s largest, containing an estimated 40bn tonnes of iron. Although it was discovered in the mid-19^th century, numerous efforts to maximise production have failed. Most recently, a steel company founded in 2005, Empresa Siderúrgica del Mutún, stalled under the government of Jeanine Áñez (2019-2020); this followed the decision in 2012 by India’s Jindal Steel and Power to terminate its contract to invest US$2.1bn in the iron ore mine and downstream steelmaking facilities, after the Bolivian government was unable to provide guaranteed gas supply to the site.

It is expected that the new complex, situated on a 42-hectare site, will be able to produce 200,000 tonnes of steel each year, primarily rebar and wire mesh; these materials will be essential for combatting rising construction costs in Bolivia. At the inauguration of the plant, President Arce stressed that this was the first phase of a larger project, with the aim of becoming entirely self-sufficient in steel and producing a surplus for export. Until this point, Bolivia has mostly imported steel from Peru and Brazil, but Mining and Metals Minister Alejandro Santos Laura declared in February that the country is now entering “an era of industrialisation”. This would be a major step away from Bolivia’s reliance on the export of raw materials, and a move towards adding value through the industrialisation of exports.

It comes as figures from the national statistics institute (INE) show year-on-year GDP growth of 1.30% in the third quarter of 2024, down from 3.82% year-on-year growth in the second quarter. Much of this growth was driven by the electricity, gas and water sectors (5.01%) and the ‘other services’ category (including hospitality, as well as communal, social, personal and domestic services – up 5.49% year on year), whilst the hydrocarbons sector contracted by 12.87%. It is increasingly clear that the Bolivian government urgently needs to bring new revenue streams online, as income from oil and gas continues to rapidly decline due to dwindling reserves.

Arce has also stressed the need to move quickly when it comes to the exploitation of lithium resources. On 15 February he warned that the opportunities presented by lithium could “slip through our fingers” and that lithium batteries could be rendered obsolete by hydrogen or sodium-based alternatives before Bolivia is able to capitalise on its reserves. The ruling left-wing Movimiento al Socialismo (MAS) was initially keen for any lithium extraction to be carried out by Bolivian companies, to keep as much revenue as possible within the country. However, there are not currently any Bolivian companies with the technological capacity to carry out the more advanced direct extraction methods needed to obtain the volume and purity of lithium required for battery-grade exports. The government has therefore turned to Russian and Chinese companies to advance the process.

Uruguay was accepted this week as a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom, and Vietnam. President Yamandú Orsi said it was important to “open all possible doors” in a world where many are closing.

Uruguay formally presented its request to join the CPTPP in 2022 under the previous right-of-centre coalition government of Luis Alberto Lacalle Pou (2020-2025). With international economic integration very much seen as a matter of state policy, this application was taken on by President Orsi’s left-wing Frente Amplio (FA) administration.

The deputy foreign minister, Valeria Csukasi, said she saw no reason why the Southern Common Market (Mercosur), which outlaws bilateral trade deals with third parties, would veto Uruguay’s entry into the CPTPP. The foreign minister, Mario Lubetkin, indirectly acknowledged that this could potentially pose a problem, however, by saying that Mercosur was “looking at how to reshape itself for the future, starting from a world that has changed substantially and where we are all moving in order to preserve our own interests and the growth of our countries”.

CPTPP membership

The deputy foreign minister, Valeria Csukasi, said on 21 November that the decision on Uruguay’s application was a reward for “months and months of discreet work, in absolute secrecy, to eliminate all doubts and explain why the CPTPP is the natural place for Uruguay”.

BRASIL | Cosan entra en el negocio del gas. El 3 de abril, British Gas Group (BG) de Gran Bretaña, anunció que había acordado la venta de su participación de 60% en Companhia de Gás de São Paulo (Comgás) al conglomerado local de energía, Cosan, por US$1,8mm. Cosan es el más grande productor de bio-etanol de Brasil y segundo en el mundo, y aunque tiene otras más pequeñas empresas de energía, la compra marcará su primera incursión en el negocio de la distribución de gas natural.

La decisión sigue a otras tomadas por Cosan pues continúa diversificándose en los combustibles fósiles. En el 2008 adquirió los activos de distribución de petróleo de Exxon Mobil en Brasil por US$836m; y en octubre pasado complemento esa compra al concluir la adquisición de los activos de distribución en Bolivia, Paraguay y Uruguay por un monto no revelado.

Sin embargo, la compra de Comgás, si queda concluida, será la más grande compra de Cosán en su historia. Comgás, que opera principalmente en São Paulo, es el más grande distribuidor de gas de Brasil con 4.000kms de ductos de gas que abastecen a 57 ciudades. Es interesante señalar que otro gran accionista  en Comgás es la compañía Anglo-Holandesa, Royal Dutch Shell, con quien Cosan firmó un acuerdo de empresa conjunta en el 2010 para distribuir etanol y otros combustibles en Brasil. Esa empresa conjunta ha sido calificada como la creadora de la más grande compañía distribuidora de bio-energía del mundo.

En una declaración BG dijo que esperaba alcanzar “un acuerdo de venta definitivo en el corto plazo” y que confiaba concluir la transacción antes de fin de año. El director ejecutivo de BG, Frank Chapman, explicó que el acuerdo era parte de la estrategia de la compañía para concentrarse en su exploración de hidrocarburos y el negocio de la producción, particularmente en Brasil y Australia, para lo cual se espera que la compañía reúna un gran monto de capital para ser invertido en esas operaciones. “Miramos hacia adelante para concluir este acuerdo como parte de nuestros planes para liberar unos US$5mm de capital en los próximos dos años a través de desinversiones estratégicas,” explicó Chapman, refiriéndose a las ventas de sus acciones en Comgás al conglomerado Cosan.

ARGENTINA-BRASIL | Empresarios buscan soluciones a las barreras comerciales. Una delegación de 580 empresarios argentinos liderados por los secretarios de Argentina de comercio interior, Guillermo Moreno, y de comercio exterior, Beatriz Paglieri, se reunió con empresarios brasileños en São Paulo esta semana.

Antes de la reunión, Moreno dijo que el objetivo de la reunión organizada por el gobierno de Argentina y la federación de industrias del estado de São Paulo (Fiesp) era “desarrollar nuevas oportunidades de negocios y para obtener un comercio bilateral más equilibrado, diversificando los productos comercializados y promoviendo las cadenas de integración productivas en los dos países”.

Los socios del Mercados Común del Sur (Mercosur), Brasil y Argentina, han estado enzarzados en una riña desde que Argentina comenzó a imponer barreras comerciales para proteger a sus productores nacionales de los competidores extranjeros. Esto ha irritado a Brasil, pero Argentina sostuvo que las asimetrías entre las dos economías significan que la balanza comercial bilateral tenderá a inclinarse a favor de Brasil y que Brasil debería buscar incrementar su nivel de importaciones desde países del Mercosur.

Durante la reunión, la Fiesp difundió un estudio que halló que 24% de las firmas brasileras no importan productos de Argentina debido a su “carencia de conocimiento”. Es más, el estudio también halló que 45% de las 221 firmas encuestadas considera que la sustitución de sus actuales importaciones con importaciones de Argentina era “viable o muy viable” en los próximos cinco años. El presidente de la Fiesp, Paulo Skaf, dijo que el estudio mostraba que las firmas brasileras “podrían comprar más de Argentina”.

Mientras tanto, Paglieri dijo que los empresarios argentinos eran capaces de establecer valiosos contactos y aunque no proveyó cifras para los acuerdos propuestos, dijo que “las empresas argentinas tienen la capacidad para competir en el mercado brasileño”.

PARAGUAY | Recortando tasas. El 8 de mayo, el comité de políticas del Banco Central del Paraguay (BCP) anunció que reduciría su política monetaria en las tasas de interés en 25 puntos básicos, a 6,25%. El BCP justificó su decisión señalando que la esperada contracción en el crecimiento económico este año también podría causar un decrecimiento en la demanda interna. El mes pasado, el banco revisó su pronóstico de crecimiento para todo el año de 3,7% a -1,5% debido a la declinación de la actividad en el sector agrícola. Sin embargo, el anuncio del BCP también advertía que ese era el más bajo nivel en la tasa de interés que podía prever en el actual escenario. El presidente del BCP, Jorge Corvalán, anunció el día previo que el pronóstico de inflación está en 5%, dentro del rango de la meta fijada por el BCP.

• Comercio bilateral

El año pasado, el comercio bilateral entre Argentina y Brasil se incrementó en 20,2%, a US$39,6mm. Brasil informó de una balanza comercial positiva de US$5mm.

URUGUAY-ARGENTINA | Suben las tensiones comerciales. El 5 de noviembre ex canciller de Uruguay, Didier Opertti (1998-2005), sugirió que el gobierno uruguayo denuncie ante el tribunal de resolución de disputas del Mercado Común del Sur (Mercosur) y la Organización Mundial del Comercio (OMC), las nuevas medidas de Argentina que prohíben a los exportadores argentinos de usar puertos uruguayos para transbordar sus productos. Los comentarios de Opertti vinieron después de que la subsecretaría de puertos de Argentina inesperadamente emitió una nueva orden el 29 de octubre estipulando que las importaciones argentinas “sólo pueden ser transbordadas en puertos nacionales o en puertos de Estados miembros del Mercosur y Estados asociados que tengan acuerdos existentes de carga marítima con la República Argentina”.

A diferencia de Brasil, Uruguay actualmente no tiene tal acuerdo en vigencia con Argentina. Para algunos en Uruguay, la medida parece haber sido especialmente diseñada para apuntar a los puertos uruguayos, perjudicando al gran sector del transporte del país. Los puertos uruguayos manejan 100.000 containers de 20 pies con bienes destinados a Argentina cada año, dejándole a la Autoridad Nacional de Puertos (ANP) de Uruguay entre US$80m y US$100m por año.

La pérdida del negocio del transporte argentino tendría un impacto mucho mayor para las firmas de transporte locales. Como declaró Juan Olascoaga, gerente general de la firma local de transporte Montecon: “Somos muy dependientes de la carga de Argentina y si esto fuera a parar hay un gran riesgo de que Montevideo ya no será usado como un punto de escala interoceánico”. Olascoaga explicó que Montevideo actualmente está en las rutas marítimas internacionales de transbordo precisamente debido a que los productos pueden ser transbordados a Argentina; y que si la prohibición continúa podría resultar en que muchas de estas rutas sean re-direccionadas hacia puertos rivales en Brasil. “La medida representa un grave perjuicio para Montevideo y un gran beneficio para Brasil, particularmente para Rio Grande do Sul”, concluyó Olascoaga.

El hecho de que la decisión de Argentina llega poco después de que la disputa bilateral sobre la planta de celulosa UPM  estallara de nuevo levanto sospechas de que la medida era en retaliación. El mismo Presidente de Uruguay, José Mujica, se refirió a esto cuando se le preguntó acerca de la decisión: “Nos encontramos entre la espada y la pared [con la cuestión de UPM] y tuvimos que tomar una decisión con relación a la planta de celulosa y ahora ocurre esto por casualidad”, dijo en un tono irónico. Mujica agregó: “Siempre ha habido dificultades con Argentina […] pero ya se nos ocurrirá algo”.

Opertti, quien también anteriormente fue presidente de la Asociación de Integración Latinoamericana (Aladi), dijo que el gobierno de Mujica debería llevar el caso ante un panel de arbitraje sobre la base de que “Argentina está violando compromisos con Uruguay adoptados bajo el Mercosur, que establece el libre movimiento de bienes”. Según el presidente de la ANP, Alberto Díaz, actualmente la ANP está preparando un informe esbozando el impacto negativo de la medida para el ministerio de asuntos exteriores de Uruguay, para que sea presentado a las autoridades argentinas. Mientras tanto, las pérdidas seguirán subiendo en ambos lados del Río de la Plata. La Cámara de la Industria de Uruguay (CIU) ha advertido que hay unos US$13,5m en bienes destinados a la Argentina, atascados en Uruguay. La Cámara de Exportadores de Argentina (Cera) ha pedido que la medida sea repelida, señalando que “su imposición de un día para otro afecta severamente los contratos de exportación existentes […] exacerbando la saturación de los puertos de Santa Fe, Rosario, y Buenos Aires, generando costos adicionales al comercio internacional”. Los analistas locales dicen que la medida podría causar que los precios de cargas regionales se incrementen tres veces en el corto y mediano plazo.

PARAGUAY-BRASIL | Nuevo puente sobre el Río Paraná. El 30 de octubre ministro de obras públicas de Paraguay, Ramón Jiménez Gaona, anunció que para mediados de noviembre, Paraguay y Brasil lanzarán un proceso de licitación pública para construir un nuevo puente de US$100m sobre el Río Paraná que vincule a los dos países. Jiménez dijo que el nuevo puente, que unirá la ciudad de Presidente Franco en Paraguay con Foz do Iguaçu en Brasil, ayudará a aliviar el pesado tráfico de aproximadamente 35.000 vehículos que diariamente cruzan el ‘Puente de la Amistad’, el único puente existente sobre el Paraná (que une a Foz do Iguaçu con Ciudad del Este). Según Jiménez el plan es que la construcción del nuevo puente comience el próximo año con vistas a concluirlo para el 2016.

At the start of the month, the 15-member Caribbean Community (Caricom) held its annual four day summit in Antigua & Barbuda. Gaston Browne, the host country’s Prime Minister and the conference’s chair, told reporters that the main outcome of the summit was “without doubt the approval of the Community’s first ever [five year] Strategic Plan” – the first such plan since Caricom was established in 1973. This followed a decision taken in 2012 after a major report was published on the future of the floundering regional entity. While the plan was hailed as a step forward, there were other significant developments taking place on the side-lines.

Browne said that the five-year plan, which was based on research and regional consultations conducted by Caricom’s ‘Change Facilitation Team’ (CFT), a working-group established in 2012, was designed to “reposition the Community…to meet the challenges of the international environment”. He identified as strategic priorities: “building economic resilience, social resilience, environmental resilience, technological resilience, strengthening the Caricom identity and spirit of community and strengthening community governance along with coordinated foreign policy; and research and development and innovation”.

As regards “economic resilience” – a major priority given tepid growth and rising debt levels as flagged up by the International Monetary Fund (IMF) in an April 2014 report [RC-14-05], the plan calls for measures to introduce “macro-economic stabilisation and competitiveness; and to unleash key economic drivers to transition to growth and generate employment, [plus] human capital development”.

With the full details of the plan yet to be made publicly available, it remains to be seen how it intends to tackle other problems identified in the 2012 report - namely“ longstanding frustrations with [Caricom’s] slow progress” and “a serious weakening in its structure and operation over a number of years”. While Browne did fleetingly mention “reformation of the Caricom Secretariat and its organs, bodies, institutions” as one of the “top areas of focus”, concrete measures have yet to be specified.

Within the summit's 31-item agenda, various other issues were also discussed that are worth mentioning. These include:

CCJ developments: The Caricom members welcomed Dominica’s 2 July approval of legislation to establish the Trinidad-based Caribbean Court of Justice (CCJ) as its final court of appeal, replacing the UK’s Privy Council. As such, Dominica will soon join Barbados, Guyana, and Belize to become the fourth Caricom country to recognise CCJ jurisdiction. In his opening remarks at the Caricom conference, Browne said that his new government intended to hold a referendum on the issue and that other Caribbean countries should consider following a similar path as “we can never be truly independent in the region while our final appellate court is the court of our former colonial masters.”

Debt advocacy team: As part of a wider effort to promote fiscal sustainability and economic growth in the region, Caricom leaders announced that a ‘Debt Advocacy Team’ would be established within six months, tasked with lobbying international development agencies and financial institutions on behalf of highly indebted Caricom states, for “debt relief and/or debt amelioration”. The IMF April 2014 report noted that public debt levels averaged over 90% of GDP in the Caribbean's tourism-dependent economies in 2013. It singled out the debt levels in Antigua (92.2%), Barbados (92.0%), Belize (75.5%), Grenada (115%), St Lucia (79.8%) and Jamaica - the most indebted of the Caribbean economies, with gross public sector debt of 138.9% of GDP in 2013.

Commission to investigate marijuana use: Of interest to the US will be the Caricom pledge to establish a regional commission to “conduct a rigorous enquiry into the social, economic, health and legal issues surrounding marijuana use in the region and to advise whether there should be a change in the current drug classification of marijuana, thereby making the drug more accessible for a range of users”. This follows a the recent announcement by Jamaica’s justice minister, Mark Golding, that the government had decided to amend the Dangerous Drugs Act in order to decriminalise the possession of small quantities of marijuana for medicinal, religious and personal use.

• Montserrat

At the Caricom summit, Montserrat’s Premier Reuben T Meade notified those present of his government’s intention to accede to the Revised Treaty of Chaguaramas and to participate in the Caricom Single Market and Economy (CSME). Montserrat signed up to the 1973 Treaty of Chaguaramas which established Caricom but has yet to take the steps necessary to join the Revised Treaty, which was signed in 2001.

MEXICO | Getting tough on oil theft from Pemex. On 10 December the lower chamber of congress approved, with cross-party support, a new law providing for the imposition of harsher penalties for the illegal tapping of Pemex oil pipelines. It then passed upward to the senate for final approval. This came after the failure of a policy adopted last February to deter the thieves by pumping only unrefined fuels through the pipelines. Not only did the thefts fail to decline, the number of detected illegal taps increased sharply ¾ a development that has been attributed by the authorities to the spreading influence of organised crime in this activity.

In the first 11 months of this year Pemex reported the detection of 5,091 taps on its pipelines, an increase of 55% on the same period of 2014. A straight projection would take this year’s total to about 9,000, up from 3,348 taps detected in the whole of 2014, and approaching the equivalent of all those detected between 2000 and 2014.

Senator Emilio Gamboas Patrón, coordinator of the ruling PRI’s bloc in the upper house of congress, reckoned that this year’s losses to oil theft could reach M$40bn (US$2.3bn) which, he said, would suffice to repair 80% of Mexico’s public schools.

The bill as approved by the senate imposes prison sentences of 15 to 25 years and fines from M$1.05m (US$61,000) to M$1.65m (US$95,859) on those found guilty of involvement in placing the illegal pipeline taps, financing them, or storing, transporting or distributing stolen oil.

To put the penalties into perspective, rapists are handed down sentences of six to 10 years, and murderers of up to 30 years.

MEXICO | Confrontation with protesting trainee teachers. In early December trainee teachers took over a tollbooth on the Pátzcuaro-Uruapan highway in Michoacán to demand money to fund their campaign. They hijacked two cars and held up buses and, when arrested by state police, were found to be carrying homemade grenades in violation of the federal law on firearms and explosives.

Thirty of the male protesters were arrested and charged with acts of violence. They were remanded into custody without bail, at a prison in Sonora. Twenty-two female students faced similar treatment.

This triggered a protest march by members of the combative teachers’ union Coordinadora Nacional de Trabajadores de la Educación (CNTE) marched to the state congress in Morelia, the capital of Mexico’s Michoacán state, to hand over an official letter demanding that it intercede with the federal authorities to secure the release of the detainees. Relatives of the detainees also took part and took part in the erection of roadblocks.

The governor of Michoacán, Silvano Aureoles, met them and promised to mediate with the federal authorities to resolve the matter. The teachers are protesting the introduction of teacher performance assessments, part of a broad education reform championed by federal education minister Aurelio Nuño, who has adopted a hard line towards the protests.

Two incidents last month brought the issue of children’s rights in Guatemala to the fore – a blaze following a riot at a children’s centre, Hogar Seguro Virgen de la Asunción, on 8 March which killed 41 girls, and a riot at the Centro Estatal Etapa II (Etapa II) prison for juveniles and adults on 19 March which left four prison guards dead. The violence at both institutions (which are administered by the social welfare secretariat [SBS] whose directors have since been fired) shocked the local and international community alike. It serves as the latest reminder of the ways in which the Guatemalan State falls woefully short of protecting children’s rights.

The riot at Etapa II, where there were reportedly 201 adolescents for 160 places, was staged by jailed members of the Barrio 18 – one of the country’s main street gangs. While the protest stemmed in part from their demands for the return of inmates sent to another juvenile centre (see sidebar), it has since emerged that back in October 2016 a judge issued an order calling for the conditions at the prison to be improved. A report published at the time by the human rights ombudsman (PDH) on Etapa II (along with three other detention centres monitored) flagged up major concerns. Noting that nearly 50% of key posts for social workers, psychologists, and teachers were vacant, the PDH estimates that 75% more personnel were necessary.

The violence at the prison came less than two weeks after the fire at Hogar Seguro Virgen de la Asunción made international headlines amid reports that the girls who perished had been initially unable to escape from the fire as they were locked in a room. The local press reported that the protests were over poor conditions at the centre where, according to the Inter-American Commission on Human Rights (IACHR), some 700-800 girls and adolescents were held, well above the facilities’ maximum capacity (of 400).

The incident led the IACHR to issue a statement on 13 March flagging up more general concerns about Guatemala’s child protection institutions. These included “frequent allegations of physical, psychological, and sexual violence – perpetrated by staff or by other residents – in these types of large institutions, as well as negligent treatment, inadequate nutrition, lack of access to age-appropriate educational and medical services, and unwarranted restrictions to contact with family members, all of which constitute serious violations of the rights of children”.

These concerns have long been held by the IAHCR and other international human rights organisations. In a report released at the end of 2015, the IACHR raised multiple concerns warning that “children and adolescents continued to have their human rights severely violated by…the State’s failure to comply with its duty to afford them special protection” as well as “the social and economic situation; domestic violence; collective violence (crime, organized crime, gangs or “maras”)”. The same report cites figures from United Nations Emergency Fund for Children (Unicef) which estimate that, in 2013, there were 5,474 children, including adolescents, in institutions in Guatemala as a measure of protection: 1,925 in public institutions and 3,549 in private establishments. The report notes that while lower than the figures for 2011, the number of children in institutions remains very high, a situation exacerbated by the fact that only 35% of institutionalized children are under proper judicial protection.

Local think tanks such as the Guatemala City-based Central American institute for fiscal studies (Icefi) have gone on to warn that incidents like the deadly blaze at Hogar Seguro Virgen de la Asunción are just the “tip of the iceberg”. In a 12 March press release, Icefi pointed to the woeful lack of investment by the State (Q$7.48/US$1.02 per day) on each child and adolescent – an amount that it notes is “insufficient to guarantee their wellbeing and full development”. Icefi also warns that “the lack of public services for effective social protection means that 3.7m [Guatemalan] children live in poverty” with a further 1.6m “vulnerable” to the threat of poverty as a result of factors like “child labour, familial disintegration, and abuse”.

Another pressing issue – malnutrition

As well as the threat of violence, IACHR and other human rights bodies highlight the prevalence of chronic malnutrition among children as another way in which the State is failing to protect children’s rights.

In a report released in January 2017, the UN High Commissioner for Human Rights (OHCHR) notes that the El Niño climate phenomenon has heightened the malnutrition crisis, especially in the south-eastern regions, where more than 75.2% of the corn harvest of 2016 was lost. The OHCHR report notes that “alarmingly, 12,600 cases of acute malnutrition in children under 5 have been reported to date in 2016, resulting in 113 deaths (a decrease of 18 cases as compared to last year)”. The OHCHR report highlights that still outstanding is the development of an inter-institutional administrative protocol on children suffering from chronic malnutrition, as ordered by the Constitutional Court in 2016, which called upon the State to develop urgent responses to this problem. The report notes that in March 2016 the national strategy to prevent chronic malnutrition for the period 2016-2020 was launched, aimed at reducing chronic malnutrition by 10% over the next four years.

• Mixing gang members and those unaffiliated with gangs

The local press also reporting that inmates’ demands included calls for the return of Barrio 18 members recently transferred to another juvenile detention centre, Centro Juvenil de Detención Provisional (Cejudep). Hilda Morales, a deputy prosecutor for human rights, also pointed out that the facility held gang members mixed with other detainees unaffiliated with gangs. Vladimir López, the deputy director of the social welfare secretariat (SBS), told reporters that while the Etapa II prison is supposed to house minors, of 56 known gang members held in it, 39 were adults. This has fuelled concerns that while street gangs have long used adult prisons as bases of operations and to recruit new members, this process has now extended to juvenile detention facilities as well.

• Government response

As well as sacking three top officials from the social welfare secretariat (SBS), including its director Carlos Antonio Rodas Mejía, who are now being investigated for the crimes of homicide, negligence of duties, and mistreatment of minors, on 14 March Finance Minister Julio Héctor Estrada told reporters that the government would assign a further Q$75m (US$10m) this year to pay for at least 13 new centres (with the capacity to house between 20 and 40 children each) and improve existing centres for children under SBS care.

In its latest Article IV consultation, the International Monetary Fund (IMF) reports that the Trinidad & Tobago economy is “slowly recovering from a prolonged recession”, and positive growth of 1.0% is expected in 2018. But there is likely to be a slight slowdown in 2019 (0.9%) rather than any acceleration of the recovery. In 2017, the contraction was -2.6%.

Over the medium term, the IMF is expecting growth to stabilize at an unexciting 1.5%. Furthermore, it sees risks as being “tilted towards the downside”. These risks include lower energy prices and delays in delivering energy-related projects on time. Nevertheless, perhaps optimistically given the lack of any dynamism in the economy, the IMF argues that the “relatively favourable circumstances in 2018 with stronger energy prices and low inflation provide a window of opportunity to establish a medium-term adjustment strategy”.

One of the key adjustments is seen to be “creating an enabling environment for the non-energy sector to be an engine of growth”. The IMF urges continuing efforts to support tourism, and the removal of “obstacles to non-energy growth” which it lists as including air/sea connectivity, the cost of doing business, and access to finance.

Crime, of course, is another drag on the economy. The IMF puts direct crime-related costs from public, private, and social spending at 3.5% of GDP, which is actually about average for the Latin American and Caribbean regions. However, Trinidad’s homicide rate is amongst the highest in the Caribbean.

Under considerable domestic and international pressure [WR-20-19], Bolivia’s interim government was forced on 14 May to annul provisions in various decrees deemed to have undermined freedom of expression, particularly in regard to criticisms of its management of the coronavirus (Covid-19) pandemic. Its response to the emergency has indeed come under increasing scrutiny in the past week, as street protests in various parts of the country have come to a head, and accusations of corruption against government officials continue to proliferate.

The demonstrations in several Bolivian cities have entered something of a vicious cycle, protesting the interim government’s refusal to lift quarantine restrictions on areas deemed ‘high risk’, but in doing so ensuring that this status is maintained. Attempts at dialogue between government officials and protesters in the cities of Cochabamba and El Alto, as well as the town of Yapacaní, have made little progress, and the interior minister, Arturo Murillo, continues to stir tensions by insisting that the unrest is not an authentic display of popular discontent, but is instead being orchestrated by the left-wing opposition Movimiento al Socialismo (MAS).

Murillo accused the MAS of funding and planning protests to support its efforts to reschedule elections as soon as possible [WR-20-18]. MAS officials denied that any such machinations had been taking place, acknowledging the role of local groups linked to the party in certain protests, but arguing that these spontaneous uprisings instead reflect the failings of the interim government. Murillo insisted that the reluctance to reschedule elections was motivated by health concerns rather than doubts about interim president Jeanine Áñez’s prospects as a candidate, but the steady stream of corruption scandals in recent weeks will undoubtedly be a cause for concern.

• Corruption cases

As well as the emerging scandal regarding the purchase of overpriced ventilators, investigations have continued into allegations of corruption in various state-owned companies. On 15 March, the attorney general, Juan Lanchipa, authorised the formation of a prosecution commission to explore irregularities in contracts signed by the state-owned oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), after documents were seized during a raid on its headquarters in La Paz.

The most recent centred on the purchase of 170 ventilators that were not only found to be unsuitable for treating Covid-19 patients in intensive care units, but were also purchased for US$27,683 per unit, well beyond the US$8,756 quoted by the company that manufactured them, Spain’s GPA Innova. Áñez warned that those responsible “are going to pay for it”, and the list of victims has become increasingly high-profile, culminating in the arrest on 20 May of the health minister, Marcelo Navajas, who was only appointed to the role in April, on suspicion of corruption, along with two advisers from the Inter-American Development Bank (IDB), who reportedly approved the purchase, financed through a US$50m loan from the multilateral organisation.

On 21 July, Mexico’s President Andrés Manuel López Obrador said that oil companies that have suffered leaks, explosions or fires will be investigated. He said that the federal attorney general’s office (FGR) and state-run oil company Pemex will investigate whether any such incidents resulted from poor practices or negligence. This comes after Pemex itself suffered major accidents that not only caused significant material and environmental damages but also fatalities.

Pemex’s poor safety record is among the factors that led international credit rating agency Fitch to downgrade its rating and outlook on 14 July. Fitch downgraded Pemex’s long-term ratings to “B+” from “BB-” and placed the ratings on rating watch negative (RWN). It also downgraded several of Pemex’s environmental, social and governance (ESG) scores as a result of the accidents that it has suffered at some of its facilities since February.

The agency said that the recent accidents cast doubts on Pemex’s operational capacity amidst an increasingly large debt, and that it does not expect oil production to grow from 1.8m barrels per day (bpd). Indeed, according to Fitch, Pemex’s poor record in terms of accidents will make it difficult for the company to secure financing from banks, investors, and suppliers when it is facing a liquidity crisis. It added that the many fires in assets and critical infrastructure are causes of concern regarding the management of its operations and the lack of maintaining expenditure in its main infrastructure.

Similarly, while on 21 July credit rating agency Moody’s ratified Pemex’s corporate rating at “b1” and left its credit risk rating unchanged at “caa3”, it downgraded the company’s outlook from “stable” to “negative” arguing that its credit risk is likely to increase. Moody’s cited the lack of fundamental changes in Pemex’s business strategy as a probable cause of higher credit risks due to its inability to increase capital investment and to improve its financial and operational performance as a result of liquidity restrictions. Moody’s also estimates that Pemex will maintain its production and reserves levels during 2023 and 2024 at current levels given its inability to invest significantly in exploration and production.

Crucially, Pemex’s most recent financial report, released on 28 July shows that its situation deteriorated significantly during the second quarter of 2023. Its net profits added up to M$25bn (some US$1.49bn), equivalent to a contraction of 80% compared to the same period of 2022. The company reported that this was derived from a fall in sales and from the deterioration of its fixed assets. It is important to note that these figures do not include the impact of the fire that took place earlier in July in the Nohoch-A platform of Pemex’s Cantarell complex, which reduced production by 576,00 bpd while some operations were suspended.

Refining activities

Regarding refining operations, Pemex’s report maintains that these increased to an average of 826,000 bpd during the second quarter, even though two of its refineries suffered accidents during the period: Salina Cruz (Oaxaca state) and Minatitlán (Veracruz). Finally, with regards to its debt, Pemex said that this grew to US$110.5bn during the second quarter of 2023, up from the US$107.4bn that it had reported until the first quarter, which it attributed in part to the appreciation of the Mexican peso against the US dollar.

In late July Guatemala’s national council for food security and nutrition (Conasan), the inter-ministerial body that leads policy direction on food and nutritional security, approved its annual operative plan for 2025, which earmarks funding of Q$14.2bn (US$1.84bn), up 33% on the 2024 budget. Addressing food insecurity – an issue which successive governments have declared a priority but failed to tackle – is a key pledge of the left-of-centre government led by President Bernardo Arévalo which took office in January, promising to reduce malnutrition by 10%. An April 2024 update by the World Bank highlights that Guatemala’s child malnutrition rate was 47%, putting Guatemala among the worst ten countries in the world.

Long attributed to structural inequalities, the issue of food insecurity in Guatemala, where 55.1% of the 17.4m population lives below the poverty line on World Bank data, has been exacerbated in recent years by the continuing impacts of Hurricanes Eta and Iota in late 2020, the coronavirus (Covid-19) pandemic, rising prices of energy, fertiliser, and agricultural inputs as a result of Russia’s war in Ukraine, and the impact of climate change, among other factors.

The gravity of the situation was recently highlighted by the Famine Early Warning Systems Network (Fews Net), a leading provider of early warning and analysis on food insecurity, in a report released on 31 July. The report, which warns that crisis outcomes will persist from June to September 2024, notes that irregular rainfall and high temperatures damaged staple grain crops from at least three past cycles, which will affect the availability of food, labour demand, and income sources of poor rural households.

Fews Net also estimates that the population in need will be between 2.0-2.5m people for this period, highlighting that while year-on-year inflation, which was running at 3.78% in July, has slowed, food prices remain above average. It reports that maize and bean prices remain at between 10-25% and 25-45% above the five-year average, respectively, given the distortion of seasonal trends due to the recurrent climate shocks since 2019/2020.

Meanwhile a report by the United Nations World Food Programme (WFP) published on 30 June warns that the humanitarian crisis in Guatemala is intensifying as a result of the impact of the La Niña weather phenomenon, including heavy rainfall, landslides, and floods. The WFP warns the situation is particularly critical in the departments of Alta Verapaz, Chiquimula, Huehuetenango, Sacatepéquez, and Sololá, where 30-45% of the population requires food assistance – a situation expected to escalate in the coming months due to persistent climate-related challenges. Highlighting that, as regards acute malnutrition rates for children under five years, Guatemala reported a cumulative record of 16,384 cases in the first half of 2024, WFP warns that increased food insecurity stemming from climate-related impacts is likely to exacerbate Guatemala’s already severe malnutrition situation.

Against this backdrop, since taking office, the Arévalo government has indicated its intention of addressing what remains a major priority. In Conasan’s first meeting in late March, the secretary of food and nutritional security (Sesan) of the presidency, Mireya Palmieri, highlighted the importance of addressing malnutrition. She cited the need to reprogram the annual operational plan for food and nutrition security (Poasan) and update the national food and nutritional security policy (Polsan) and institutional initiatives such as the strategic food and nutritional security plan (Pesan) and institutional strategic plan (PEI).

Palmieri also said that efforts were being carried out involving different institutions such as the health ministry (MPSPAS) to address the nutrition component in the government’s planning model. She said that as of 22 March, 14.60% of the budget for Poasan 2024 had been executed – worth Q1.5bn which she said would seek to define the “physical goals and financial resources assigned to those issues which impact on food and nutritional security”. Palmieri also revealed plans to carry out the first national maternal and child health survey (ENSMI) in ten years, in conjunction with the education ministry.

Since then, on 30 April President Arévalo unveiled a multidimensional initiative entitled ‘Mano a mano’ (Hand to hand), with the objective of eradicating malnutrition and poverty, which aims to reach 114 of the country’s 340 municipalities over the next four years. Led by the social development ministry (Mides) and Sesan, it involves other institutions and seeks to provide comprehensive assistance in areas spanning infrastructure, health, education, and agriculture. 

Private sector efforts

Efforts to address malnutrition in Guatemala are also taking place through the private sector. In 2022 a local business conglomerate, Castillo Hermanos, announced a US$15m investment in a five-year social initiative, ‘Guatemaltecos por la Nutrición’, to address malnutrition in the country. At the time, José Silva, the initiative’s executive director, said it would be rolled out in Quiché and Huehuetenango, two of the departments most affected by food scarcity. Silva said the initiative would include mobile clinics and is based on five components: attention to primary health, nutritional support, water, and environmental sanitation, strengthening the family economy, and access to food. Since then it has expanded. Most recently on 22 July, Castillo Hermanos announced that it would be rolled out in eight municipalities in Guatemala department.

Other measures

The government has also sought to address poverty in other ways. On 31 May Arévalo announced that the economy ministry would intervene to stabilise supplies of rice, maize, and beans and to reduce price speculation. The same day he announced electricity subsidies for households which consume up to 100 KWh, which he said would reduce electricity bills by up to 80% and would benefit some 3m households.

On 10 June he then unveiled two cash transfer initiatives to help “ease the high cost of living for buying food in Guatemala”. He said that the targeted cash payments, which would cost the government Q150m and would begin on 1 July, would “mitigate” and “alleviate” the cost of living for vulnerable families in the capital and rural areas.

He said that the first initiative would constitute a monthly payment of Q250 to some 50,000 low-income families, benefitting some 250,000 people in total, who reside in 17 municipalities in Guatemala department.

Under the second scheme, 100,000 families living in extreme poverty in rural departments, who lack any connection to the electricity grid, would receive a one-off payment of Q1,000. 

On 18 October the International Monetary Fund (IMF) released a statement praising the recent actions of the Honduran government led by President Xiomara Castro following a visit to the country.

IMF staff carried out a visit to Tegucigalpa from 7-18 October, meeting with officials from the central bank (BCH) and the government, and announced a staff level agreement on policies and reforms to complete the first and second reviews of the country’s programme.

“The Honduran economy remains broadly resilient despite a still-challenging global environment and the impact of the El Niño climate shock,” reads the statement. “Robust growth has continued this year—projected close to 4 percent—and inflation has stabilized between 4½ and 5 percent.” The IMF also said that international reserves are adequate, despite recent declines due to factors such as a severe drought earlier this year, which meant fewer agricultural exports and more energy imports. 

Looking ahead, the Fund said that Honduran officials had agreed to implement “prudent” macroeconomic policies focused on five key pillars. The first is budgetary discipline to maintain debt sustainability. Good tax revenues and better management mean that Honduras has outperformed its targets this year, and the IMF is pleased that the government is taking further measures to improve its fiscal position, including updating public procurement processes. The second pillar is increased social spending targeting society’s most vulnerable, involving more monetary transfers under the Red Solidaria programme, which aims to improve access to basic services; the completion of a survey to find those living in extreme poverty in urban areas; and the introduction of a new information system to monitor social programmes.

The third involves the use of monetary and exchange rate policies to maintain low inflation and good levels of international reserves, while the fourth pillar involves continued work to strengthen the energy sector. This is a key priority for President Castro, who has enacted a wide-ranging energy reform, and the IMF said it “was encouraged by the recent downward trend in electricity losses by the public power company ENEE”.

Nonetheless, it highlights the need for further reforms to improve the financial health of the company, as well as other structural reforms. Lastly the IMF highlighted discussions around fighting corruption, including a new asset declaration system for public officials and the formation of a National Observatory of Transparency and Anticorruption. On the other hand, Castro has failed to advance a campaign promise to form a United Nations-backed anti-corruption commission, and her family has also been credibly linked to taking illicit donations from drug traffickers [SSR-24-10].

Following the IMF visit, Honduras officials travelled to Washington to meet counterparts from the IMF and World Bank (WB) with the aim of securing US$500m in funding before the end of 2024. At the meetings, which took place from 21-25 October, Honduras requested US$200m from the IMF, US$150m from the WB, and US$25.6m from the Inter-American Development Bank (IDB), as well as around US$130m from other multilateral organisations, according to a statement from the finance ministry. The money would be used to fund the “social and productive investment programme” of President Castro, adds the statement.

Honduras was also discussed during an IMF press briefing on 25 October, where Rodrigo Valdés, director of the Fund’s Western Hemisphere Department, expressed support for Castro’s Ley de Justicia Tributaria, Castro’s controversial tax reform that is currently in congress. Valdés applauded efforts to consolidate 15 corporate income tax special regimes, as well as reducing tax exemptions that are currently worth around 7% of GDP. He said that introducing the law “would yield about 1 percent of GDP in revenues in the medium run.”

But while the IMF is satisfied with the proposed tax reform and the government’s other economic policies, Castro is facing a tough time governing the country. There is significant opposition to reform from the private sector, and US officials have also voiced disquiet at her energy reforms.

Corruption scandal

The corruption scandal involving members of President Xiomara Castro’s family, around alleged funding links with a drug trafficking organisation [SSR-24-10], has also affected her government and increased the chances of an opposition victory in general elections scheduled for 2025. These issues may distract the government from the economic programme that the International Monetary Fund (IMF) is keen for it to implement.

President Miguel Díaz-Canel recently claimed that the Partido Comunista de Cuba (PCC) government had approved 80 of the 176 proposals included in a sweeping economic reform package announced last month [WR-26-24], designed to appease the US administration led by President Donald Trump which is carrying out a maximum pressure campaign on the island aimed at extracting significant political and economic reforms. However, Havana’s efforts continue to show little sign of meeting its objective; the day before Díaz-Canel’s latest update, Washington announced the latest round of designations since Trump hardened sanctions on Cuba on 1 May [WR-26-18] – on this occasion targeting Cuba’s overseas medical missions and energy sector, inter alia.

On 24 July President Díaz-Canel gave his latest progress update regarding the proposed economic reforms, the significance of which experts have been quick to highlight, with Daniel Torralbas, a London-based Cuban economist, having described them as “the most profound” economic reform programme since the 1959 Revolution led by Fidel Castro (1959-2008), although others remain more sceptical [WR-26-25].

In recent days the Cuban government has announced various decrees underpinning these changes. One, announced on 16 July, seeks to regulate the general principles of the organisation and functioning of the state business system to transform and develop it, under the national institute of state-owned enterprise assets (Inaee) which was established on 29 June to overhaul the state business model. Also on 16 July, the government announced a decree which includes new regulations on agricultural cooperatives, while less than a week earlier it announced plans to simplify the process for granting land under usufruct, the right to use and profit from another person’s property.

• Restrictions lifted

On 28 July the Cuban government announced new rules reducing the activities prohibited to the non-state sector. While previously there was a list of 125 activities prohibited to the non-state sector, under the new rules, 46 activities have been removed entirely from this list, while there have been modifications relaxing rules for 35 activities. Sectors to benefit include industry and manufacturing; energy and mining; transport; trade; health and education.

The day before Díaz-Canel’s announcement, however, Trump announced new sanctions on nine Cuban entities and two individuals - Cuba’s health minister, José Ángel Portal Miranda, and Gretza Sánchez Padrón, the director of Unidad Central de Cooperación Médica (UCCM), which is responsible for recruiting Cuban medical health professionals to participate in overseas medical missions, historically a key source of revenue for Havana. With Washington having already targeted Cuba’s overseas medical missions, threatening to sanction countries participating in the scheme, which has already had an impact [WR-26-08], the latest sanctions announced on 23 July designated UCCM and Comercializadora de Servicios Médicos Cubanos (CSMC), which manages the missions.

The latest round of sanctions also targeted the energy sector whose existing crisis has been exacerbated by Trump’s oil blockade, leaving Cuba without fuel oil and diesel. With Cuba’s state-owned oil and gas company, Unión Cuba-Petróleo (Cupet), already blacklisted on 11 June [WR-26-24], the latest designations target Cupet’s research arm Centro de Investigación del Petróleo (Ceinpet); Empresa de Energía SA (Enersa), an importer of gas, liquefied gas, and lubricants; and Einarbo SA, an importer of gas, liquefied gas, and lubricants sourced from Mexico and India. The other four entities blacklisted were targeted over what Washington claims is their use to shield the assets of Cuba’s Grupo de Administración Empresarial SA (Gaesa), the state-owned military conglomerate which controls much of Cuba’s economy, which was sanctioned in May [WR-26-19]. These are: Terminal de Contenedores de Mariel SA, Cuba’s main container terminal located in the port of Mariel, and Coral Marítima SA, to which the US maintains Gaesa had transferred the port in mid-June. Also designated were Ceiba Investments Ltd, a Guernsey-based firm invested in Cuban real estate, and Orbit SA, a remittance processor.

Mientras el gobierno de la provincia norteña de Jujuy, liderado por el Kirchnerista Walter Barrionuevo, celebraba el lanzamiento del programa “un terreno para cada familia que lo necesita” como un paso adelante hacia la resolución de las tensiones relacionadas con la tierra en la provincia, los ocupantes aún están en control de 70 grandes extensiones de tierra ocupadas poco después de iniciarse el conflicto hace 26 días. Tal como en previos conflictos relacionados con la tierra en la ciudad de Buenos Aires y en la provincia de Formosa a fines del año pasado, las confrontaciones en Jujuy han costado varias vidas; el gobierno, a pesar de sus afirmaciones en contrario, siempre ha reaccionado a los conflictos de tierra de manera que en vez de abordar la cuestión antes que explote en protesta social. Se estima que de los 40m de habitantes de Argentina, un cuarto vive en viviendas improvisadas.

Milagro Salas, la altamente cuestionada líder social que encabeza el Movimiento Tupac Amaru, celebró esta semana la victoria de la Presidenta Cristina Fernández en las primarias del 14 de agosto, diciendo que eso señala más cambios para los pobres de Argentina sin tierra y sin casas. Sin embargo, la historia de los gobiernos Peronistas apuntan de otra manera y es altamente improbable que, una vez que ceda la violencia, sea implementado un exhaustivo programa, ya sea por el gobierno nacional o el provincial. En 1946, el llamado ‘Malón de la Paz’ marchó desde Abra Pampa, cerca de la frontera de Jujuy con Bolivia, a Buenos Aires, para exigir que se otorguen a las comunidades indígenas nativas, títulos legales sobre sus tierras ancestrales. Irónicamente, Juan Domingo Perón hizo llevar a los manifestantes al Hotel de los Inmigrantes y luego, una vez que las cámaras se habían marchado, envió a fuerzas de la Prefectura para escoltar a los manifestantes hasta un tren que los llevó de vuelta a Jujuy. Las mismas comunidades aún están pidiendo la regularización de los títulos de sus tierras.

El año pasado, mientras visitaba la famosa ‘Villa 31’ en Buenos Aires, ubicada directamente cruzando la calle de los límites sur de La Recoleta, el segundo más caro vecindario, la Presidenta Fernández preocupadamente declaró que el cambio de la dirección de su expansión –de un crecimiento horizontal a otro vertical que ha resultado en viviendas improvisadas de cinco pisos– era un signo de “progreso”. La alta concentración de la tierra nunca ha sido abordada exhaustivamente por los gobernantes de Argentina, muchos de los cuales eran miembros de la aristocracia terrateniente. Para empeorar las cosas, hay un acceso muy limitado al crédito para la compra de tierras y el ingreso promedio necesario para asegurar una hipoteca, significa que las clases altas y medias altas y los ricos son los que más probabilidades tienen de acceder al crédito, más que los pobres que son los que lo necesitan verdaderamente.

La primera respuesta al conflicto de la tierra en Jujuy fue hacer que Salas se involucrase. Sin embargo, la líder, de quien en 2007 se informó que tenía 500 armas de mano (revólveres y pistolas) registradas a su nombre y tiene la reputación de un matón en Jujuy, lanzó un ultimátum al gobierno, exigiendo que un proceso para adjudicar tierras a los ocupantes se complete para el 25 de agosto. Entonces, Barrionuevo lanzó la iniciativa “un terreno para cada familia que lo necesite”, que adjudicará tierras –primero tierras del estado y luego se expropiarán algunas parcelas de tierra ociosa de las grandes empresas agrícolas– a las familias argentinas que cumplen con los requisitos.

Sin embargo, el problema es que un gran segmento de los sin techo de Argentina son inmigrantes pobres de países vecinos. Eso fue claramente demostrado en el conflicto en Buenos Aires, en diciembre pasado: dos personas que resultaron muertas eran bolivianos; el tercero era paraguayo [IL-10-50]. Además, si 23.000 familias ya se han registrado para recibir tierras en el interior de Jujuy –otros varios miles están esperando en la capital, San Salvador de Jujuy para obtener un terreno; la respuesta del gobierno, en vez de estimular el ahorro y el acceso al crédito, alentará más ocupaciones ilegales para exigir tierra sin costo en otras provincias.

• ¿Barrionuevo sorprendido?
  

El gobernador Barrionuevo describe el conflicto en marcha en Jujuy como “una situación inusual”, agregando que como un resultado de las tensiones “los problemas estructurales de Jujuy” finalmente “saltan a la realidad”. Aunque lo preocupante es que el gobernador declaró que el programa de adjudicación de tierra “será perfecto y consolidado como  nosotros lo ejecutemos”, lo que significa que no se ha hecho un planeamiento real.

GUATEMALA | Pérez Molina clears first hurdle. Guatemala’s president-elect, Otto Pérez Molina has achieved one of his main priorities ahead of assuming office in January – approval of the 2012 State budget. Days before the constitutional deadline of 30 November, the 158-member congress passed the budget for Q$59.5bn (US$7.6bn) up from the Q$54.4bn (US$6.96bn) in 2010 (which was increased to US$7.2bn in June 2011).

    The bill was approved by 100-37 votes. Opposed by the ruling Unidad Nacional de la Esperanza (UNE) and the Libertad Democrática Renovada (Líder) of Pérez Molina’s run-off rival, Manuel Baldizón, the 2012 bill (which is equivalent to 15.2% of GDP) was clinched with the agreement that the government could not make transfers to allow NGOs to carry out infrastructure projects – a provision aimed at boosting transparency. With 64.5% of spending to go on operating costs, 20.3% on investment and 15.2% on public debt service payments, the budget is based on projected growth of 3.7% for 2011 according to the central bank, inflation of 4%-6% for 2011 as projected by the IMF and a tax take of Q43.6bn (US$5.58bn). Some Q$4.72bn (US$605m) will come from foreign loans.

Una de las peores tormentas en la historia de la provincia de Buenos Aires aún no se había calmado cuando comenzaron las acusaciones de culpas. Docenas de personas han muerto y al menos 280.000 personas fueron dejadas sin energía a medida que terribles inundaciones súbitas golpeaban Buenos Aires y la ciudad costera de La Plata. Ocho personas murieron en el Gran Buenos Aires, mientras caían entre 140 y 190mm de lluvias en sólo dos horas tempranas del 2 de abril; las más intensas lluvias desde 1906. Varias de las importantes rutas de la ciudad fueron cortadas por la inundación, todo el transporte urbano de la ciudad se paralizó, y 11 vecindarios quedaron sin energía. Algunos de los fallecidos fueron electrocutados; otros atrapados en sus vehículos o casas por la creciente inundación.

Mauricio Macri, el alcalde opositor de la Ciudad de Buenos Aires, resultó estar de vacaciones en Brasil cuando impactó la tormenta. A pesar de que regresó a Argentina tan pronto como la severidad de la tormenta se hizo aparente, su ausencia inicial fue una muy tentadora oportunidad política para Julio de Vido, el ministro de planeamiento. "Una vez más la falta de previsión del gobierno de la ciudad conduce al luto y deja a 450.000 habitantes sin electricidad", De Vido dijo, afirmando que las autoridades de la ciudad tenían suficientes advertencias previas sobre las cuales no actuaron, "Lo que ha pasado acá es que Macri está de vacaciones," concluyó.

El alcalde, que es considerado como el más probable contendiente de la oposición para la presidencia, respondió con furia. "No está bien y no tiene sentido ver a funcionarios del gobierno nacional jugando a la política con esta tragedia, que es el resultado de la falta de obras que ellos nunca llevaron a cabo," dijo él, jugando a la política él mismo en una conferencia de prensa a su regreso. Macri puso la culpa por el desastre a la negativa del gobierno nacional de desembolsar los fondos para mejorar el sistema de drenaje de los ríos subterráneos que cruzan la ciudad. "La licitación para un contrato público para las obras está lista hace cuatro años. Incluso tenemos la aprobación para un crédito internacional, pero el gobierno nacional se ha rehusado autorizar el financiamiento de agencias de crédito internacionales, como el Banco Mundial. Sólo ahora parece probable que el gobierno nacional lo apruebe."

Mientras se desenvolvía la politiquería en la capital, la inundación continuaba creciendo en otras partes de la provincia de Buenos Aires. El número de víctimas fatales en la ciudad de La Plata ya llegaba a 46 y seguía aumentando. Cayeron entre 300 y 400mm de lluvias en tres horas en La Plata, con inundaciones en parques centrales de la ciudad llegando hasta 1,70 metros de altura. El ministro de seguridad de la provincia de Buenos Aires, Ricardo Casal, dijo el 3 de abril que la lista de muertos podría elevarse debido a las continuadas condiciones hostiles del clima. Alrededor de 3.000 personas ya habían sido evacuadas de sus casas, en una situación que Casal describió como "caótica". Los medios locales informaban que muchos de los muertos fueron hallados en el interior de sus autos; algunos cuerpos debieron ser removidos de los árboles.

En contraste con las riñas entre Macri y De Vido, el gobernador de la provincia de Buenos Aires, Daniel Scioli, enfatizó cómo los gobiernos provincial y nacional estaban cooperando. Scioli, aunque un miembro del Peronista Partido Justicialista al igual que la Presidenta Cristina Fernández, no es miembro de la facción del Frente para la Victoria, y es visto con amplia desconfianza por los seguidores de la presidenta por querer posicionarse como un posible sucesor de ella. Con muchos residentes de la ciudad crecientemente preocupados por los saqueos que han venido como secuela de la tormenta, Scioli anunció la creación de una fuerza de seguridad, para proveer seguridad en la ciudad, y prometió subsidios y préstamos a los afectados.

Fernández canceló sus tareas programadas a fin de visitar La Plata. "Mi madre vive en Tolosa [una área de la ciudad] y no tiene electricidad, está sin agua potable, sin gas, igual que cualquier otro vecino", Fernández les dijo a los periodistas al salir de una reunión con Scioli. Ella también se hizo eco del mensaje del gobernador de que los dos niveles de gobierno estaban trabajando duramente juntos. El costo financiero de la tormenta y las implicaciones políticas totales aún deben ser calculados.

• Esperan respuesta de tenedores de bonos

El 2 de abril una corte de apelaciones de EU dio tres semanas a los tenedores de bonos de la deuda en default de Argentina, para responder al plan propuesto por el país para pagarles mucho menos de los US$1,33mm de los que ellos demandan recibir. La Corte de Apelaciones del Segundo Circuito de EU en Nueva York, indicó a los tenedores de bonos que no participaron en las dos reestructuraciones de la deuda luego de su default en el 2002, que sometan una respuesta para el 22 de abril. Estos tenedores están encabezados por NML Capital Ltd y Aurelius Capital Management.

COLOMBIA | FMI pide una reforma fiscal. El 13 de marzo una misión del Fondo Monetario Internacional (FMI) concluyó su Consulta anual del Artículo IV con Colombia y dijo que aunque el panorama del país a mediano plazo luce favorable, las autoridades ahora deberían buscar promover una reforma fiscal que ayude a Colombia a reducir su déficit fiscal y la deuda pública en los próximos pocos años.

Valerie Cerra, la jefa de la misión del FMI que analizó el estado de la economía colombiana durante una visita de días, dijo que Colombia tenía “Un fuerte y competentemente manejado marco de políticas –sostenido por un régimen de metas de la inflación, una tasa de cambio flexible, regulación y supervisión financiera efectivas, y un prudente marco fiscal a mediano plazo– [que] ha permitido a las autoridades responder adecuadamente a los shocks, usando sus herramientas de política monetaria para estabilizar el crecimiento”. Cerra agregó que esto ha permitido a Colombia mantener un sólido desempeño macroeconómico en años recientes “resistiendo bien los episodios globales de estrés económico y financiero”. Ella dijo que las perspectivas económicas para el 2014 eran favorables con su equipo pronosticando un crecimiento de alrededor del 4,3% y una inflación que permanecerá dentro del rango de meta del banco central, de 2% - 4%.

Sin embargo, Cerra señaló que su equipo también espera que la deuda del sector público, que de acuerdo con las últimas cifras del banco central de Colombia (noviembre del 2013) ahora es de US$51,235mm o el 13,6% del PIB (un incremento año en año del 13,3% desde el 2012), en general permanecerá sin cambios. Esto a pesar del expreso compromiso del gobierno liderado por el Presidente Juan Manuel Santos de reducir el déficit fiscal estructural del país y los niveles de la deuda pública, mientras al mismo tiempo continúan en marcha los programas de desarrollo social y de inversión en el desarrollo de la infraestructura del país.

De acuerdo con Cerra, “Para lograr este deseable objetivo, al mismo tiempo que también proporcionar el espacio fiscal para los gastos a fin de reducir la pobreza y superar el déficit de infraestructura de Colombia, las autoridades necesitarán fuertes esfuerzos para expandir los ingresos fiscales no-petroleros”.

The Chilean government presented its draft 2016 budget to congress last week, and it was not a good news story: amid global economic weakness and depressed copper prices, the finance minister, Rodrigo Valdés, said government spending will have to expand more slowly next year; the official forecast for GDP growth in 2016 has also been cut once more (down to 2.75%). Yet at the same time there are signs that President Michelle Bachelet’s long fall in the opinion polls, if not reversing, may at least be bottoming out.

It is too early to make any definitive claims on the subject but last week there was at least a hint that President Bachelet’s policy of ‘new realism’ might be getting some traction in the opinion polls. A poll by Adimark covering voter perceptions in September for the first time suggested that Bachelet’s long fall in the polls may be ending.

Adimark has tracked Bachelet’s approval and disapproval ratings on a monthly basis since she took office. She started out strongly with a 54% approval rating and a 20% disapproval rating in March 2014, but by September/October of that year both indicators were level-pegging; thereafter her disapproval rate exceeded the approval rate by an increasingly wide margin, apparently peaking this August (72% disapproval against 24% approval). Various factors have driven this relentless deterioration, but the most important has been the Caval corruption scandal (involving her son Sebastián Dávalos and daughter-in-law) coupled with a second scandal over political campaign funding, and an ongoing degree of resistance to her tax and education reforms.

Something changed in September. Bachelet’s disapproval rate dropped two percentage points (down to 70%) while her approval rate edged up one point (to 25%). Adimark pointed out that both of these were within its margin of error (+/- 3%) and strictly speaking were therefore not statistically significant. But the change of direction was nevertheless suggestive.

The agency also noted that September was an unusual month, marked by an earthquake and tsunami on 16 September which left a toll of 11 dead, independence day celebrations on 18 September, and a decision by the International Court of Justice (ICJ) on 24 September to continue hearings on the territorial dispute between Chile and Bolivia (which could be interpreted as a setback for Chile’s position [WR-15-39]).

The implication is, however, that public opinion was impressed by the response to the earthquake. The government’s approval rating rose by three points during the month (which is regarded as statistically significant), and those surveyed by Adimark scored it particularly well on its “capacity to deal with crisis situations”. The fine detail of the survey also revealed Bachelet’s approval grew mostly among low socio-economic groups, among men, and among “those who identify with the Right”.

Budget

How the budget will play into this is not year clear, but it is evident that Bachelet is playing to the middle ground. Finance Minister Valdés presented a cautious budget, with government spending set to grow by 4.4% in 2016, the lowest rate in over 10 years and less than half this year’s 9.8%. Factored in are conservative assumptions about international copper prices, and a slower reduction in the fiscal deficit.

In a speech to mark the anniversary of the “no” vote in the 1988 referendum that paved the way to the restoration of democracy in Chile, Bachelet made a point of being modest. “We have made mistakes and we have recognised them,” she said, “we regret not doing things better”. Bachelet described the budget as “prudent and responsible”.

Bachelet has also instructed her cabinet ministers to travel around the country to “explain the budget on the ground”. Their narrative appears to be that against a background of austerity the government is doing what it can to prioritise spending on health, law enforcement, housing and education.

Some normally critical journalists of the centre-right have acknowledged what they see as a decision by Bachelet not to play the populist card and to opt instead for what they describe as “quasi-austerity”. While any significant further deterioration in the economy will be a negative, the government is clearly hoping that it can improve its image by careful management of the current slowdown, and by counting on external factors to help lead gradual economic recovery in 2016 and 2017.

• Electoral system

President Bachelet said that the ruling Nueva Mayoría coalition had made “changes of historic magnitude” during the first 18 months of her second term in power, creating a proportional and inclusive electoral system to replace the binominal system inherited from General Augusto Pinochet. She said the coalition would work with “more energy and discipline” to complete the education reform, “the great task of our government”.

• Economy

President Bachelet was candid about the economic challenges her government faces. “We must confront a complex international economic scenario. We are fully aware of this and we are acting accordingly by presenting a prudent and responsible budget that will allow us to keep progressing and guarantee rights and social spending”. Bachelet also said that “we will shortly begin the process of redrafting the constitution”.

St Lucia’s United Workers’ Party (UWP) returned to power under new prime minister Allen Chastanet at the 6 June general election with a promise to mend fences with the United States, but recent remarks by Chastanet suggest that he harbours a certain amount of animosity towards the US that may not be helpful in this cause.

The problem between St Lucia and the US dates back to the UWP’s last period in power. A crackdown on serious crime in 2010-2011, in response to a surge in homicides and violent crime in 2008-2009, allegedly led to the extrajudicial killing of 12 people by the Royal St Lucia Police Force (RSLPF). As a result, in 2013 the US applied to St Lucia the Leahy Law, which prohibits the provision of security-related assistance to foreign entities that have been involved in serious human-rights violations. An independent Jamaican-led investigation, which reported in March 2015, appeared to support the most serious allegations.

During the election campaign, Chastanet promised that “within 100 days of assuming office” he would appoint a high-level tribunal of former members of the judiciary to review the issue and to recommend “appropriate means of resolving the situation within the parameters of the laws of St Lucia”. Immediately on assuming office, Chastanet received an early reminder of what the sanctions meant for St Lucia. Once again, St Lucia was excluded from the annual Tradewinds maritime exercise which began in Grenada on 5 June and extends through various other exercises to a final seminar for key leaders in Miami from 20-22 July.

During a visit earlier this month to Barbados, when he met with the US ambassador to Barbados and the Eastern Caribbean, Chastanet again appeared keen to resolve the dispute with the US. He was quoted as saying that this was a “priority of my government” and that both sides believe the issue can be resolved “very quickly”.

However, on 11 July, Barbados’s The Nation newspaper published an article in which it quoted Chastanet as describing the US policy of repatriating criminals to the Caribbean as “horrific”, adding that 800 had been deported to St Lucia in one year. He also reportedly accused the US of slashing funding on Caribbean security.

This prompted the US to issue a rebuttal on 13 July in which it denied that it had deported anything like 800 criminals to St Lucia in one year. The press release said: “United States government statistics indicate that the total number of deportees returned to St Lucia in the last five years was less than 100. In 2015, there were only eight such cases.”

On the wider question of security funding, the press release noted: “Funding from the State Department’s Bureau of International Narcotics and Law Enforcement (INL) alone increased by 31% between fiscal year 2015 and fiscal year 2016. INL plans to spend approximately US$3.94m on equipment, infrastructure upgrades, and law enforcement training to combat trafficking, enhance security, and strengthen justice systems in the Eastern Caribbean. The United States is also contributing US$8.25m to a joint US-Canadian project to refurbish the Regional Security System (RSS) Air Wing, which will improve RSS interdiction and search-and-rescue capabilities.”

COLOMBIA | HOMICIDE RATE DOWN TO 15-YEAR LOW. The homicide rate in Colombia has fallen to its lowest level in 15 years, according to the Instituto de Medicina Legal y Ciencias Forenses. This means the homicide rate was 24.03 per 100,000 inhabitants in 2015, down from 26.49 in the previous year. In absolute terms there were 11,585 murders in 2015, down by 1,041 on 2014.

A total of 34% of the murders took place at celebrations, parties, family gatherings and social events. “Leisure in Colombia is one of the risk factors in life,” Carlos Valdés, the director of the institute said.

This is the sixth straight decline in annual homicide figures, falling from 17,717 in 2009, since when they have fallen by 33.15%. The number of deaths associated with the armed conflict between the armed forces and guerrilla groups fell to fewer than 500 in total, which confirms the impact of the peace process with the Fuerzas Armadas Revolucionarias de Colombia (Farc) on the homicide figures.