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A new factor that evolved between the first and second waves of the pink tide is that environmental or ‘green’ concerns have risen much higher up the political agenda. This is in line with a global context in which climate change issues have become much more pressing. In some cases, the resource nationalism of the first wave (a focus on gaining more control and higher value from the extraction of raw materials) is being replaced in the emerging second wave by a much wider set of green policies designed to protect the environment and create a pathway towards a net carbon-zero economy at some point near the middle of this century. There is a widespread perception that action to prevent continued global warming is increasingly urgent.

Despite that, in the early 2020s pink tide political leaders have far from united around the desirability of green policies. As we have seen, Mexican President López Obrador places a much higher priority on using the country’s fossil fuels to achieve energy self-sufficiency. He has therefore promoted increased oil and gas production by Pemex, the state-owned oil company, as well as backing the construction of new refining capacity, and the use of fossil fuels in domestic electric power generation. AMLO has also called for the nationalisation of lithium mining.

In stark contrast, during his election campaign in Colombia, left wing candidate Gustavo Petro promised to stop all new oil exploration and to focus instead on renewable energy sources. Petro has said: “We have to move from an extractive economy to a productive one. The energy transition is a decision that can be made on day one. Foreign exchange from oil can be replaced with tourism, and that means jumping from 5m to 15m tourists annually.”

Significantly, Petro appointed a charismatic Afro-Colombian environmental campaigner, Francia Márquez, as his vice-presidential running mate. Márquez has noted that “both the left and the right are fomenting a policy of extractivism, when humanity faces the challenge today of transitioning from this extractivist economy to a sustainable economy. Life isn't possible without our planet.”

in Brazil left-wing presidential candidate Lula has tried to adopt a mid-way position arguing that the country must continue producing oil and gas until renewable capacity rises sufficiently to provide a sustainable alternative. In Lula's first wave presidency oil and gas production (particularly from pre-salt offshore oil fields) played a key part in the extended commodities super-cycle and in the associated economic boom. Put bluntly, extractivism was an integral part of Lula's initial political success.

Lula, in fact, has a mixed record on the environment. His two previous administrations are credited with achieving a major reduction in Amazon deforestation. But these years also saw the building of the Belo Monte hydroelectric plant, notorious for causing environmental damage in the Xingu region. In current circumstances, with international attention focusing on the danger posed by deforestation in the Amazon, Lula has been keen to shift towards a somewhat greener position. Senator Humberto Costa, a close ally of the presidential candidate. has said that if Lula is elected, there will be a faster energy transition, with accelerated development of wind, solar, and bio-mass energy. Costa also says that only “self-sustaining development” will be allowed in the Amazon rainforest. Some of the candidate's advisers recommend a Brazilian version of the Green New Deal or ‘green pact’ advocated in the US.

The new government of Gabriel Boric in Chile is led by a younger generation of activists who are much more sensitive and attuned to environmental issues. They are for example supporting new legislation that would make carbon neutrality obligatory by 2050. Boric appointed Maisa Rojas, a prominent climate scientist, as his minister for the environment. Even in Bolivia, with a long history of resource nationalism, the leftist government of President Luis Arce now says it is prepared to tap outside expertise in the development of natural gas and lithium deposits.

Some experts, such as Mathias Alencastro of the Brazilian Centre for Analysis and Planning, argue that extractivism was a key part of the first move to the left. He says, “the first wave, which ran from 2003 to 2014, coincided with a major commodity cycle that totally defined these government’s successes and failures”. A repeat of that long boom is highly unlikely, but Alencastro believes that, in itself, is a reason for optimism. “Climate policy is precisely what differentiates the first and second wave”, he says, adding “without a positive commodities cycle, the left will be forced to be more daring. The green economy fills that void.”

On 31 August, Nicaragua and China announced the signing of a new free trade agreement (FTA), but there are doubts over how much the deal will benefit the Nicaraguan economy.

The agreement covers customs, tariffs, financial services, and multilateral environment deals, as well as an electronic transaction framework, digital economy cooperation, and online personal data protection. China’s commerce ministry said the two nations “can enhance mutual openness in trade in goods, trade in services and investment market access” in a statement published on 1 September. “It will help to release the dividends of the resumption of diplomatic relations between the two countries, unlock the potential in bilateral trade and investment cooperation, and elevate bilateral economic and trade cooperation to a new level, benefiting people of the two countries,” it reads, referring to Nicaragua’s decision to ditch Taiwan for China in December 2021 [EB-22-01].

Concluded following negotiations which began in July 2022, the agreement will come into force in January 2024. A report from China’s state news agency Xinhua published on 31 August notes that about 60% of goods traded bilaterally will be exempted from tariffs upon the FTA taking effect, and the tariffs on over 95% will be gradually reduced to zero.

• Tariff-free list

Major products from both countries, such as Nicaraguan beef, shrimp, and coffee, and Chinese vehicles and motorcycles, will be on the tariff-free list according to the 31 August Xinhua report.

Nicaraguan presidential adviser Laureano Ortega Murillo, the son of President Daniel Ortega and Vice President Rosario Murillo, said the deal “opens the doors to a huge market” and will generate investment, jobs, and technology transfers to Nicaragua. Ortega Murillo also claimed that Nicaragua will act as a “commercial platform” for China in the rest of Central America. Finance minister Iván Acosta has previously been cited by the international media as saying that the FTA could increase GDP growth by two percentage points, projecting growth of 3.4%-3.5% for the period 2023-2026, and the minister of development, industry, and trade (Mific) Jesús Bermúdez called the deal “a strategic step in the correct direction,” hinting at the wider significance of the deal.

Although Acosta may be optimistic about the economic impact of the deal, experts are sceptical. Trade between the two nations has remained highly asymmetric even since the reestablishment of diplomatic relations former ambassador to the Organization of American States (OAS), Arturo McFields, wrote in an op-ed for Mexican daily El Economista in December 2022. He cites central bank figures showing that in the first nine months of 2022 exports to China were barely US$11.3m, while imports exceeded US$798m. McFields describes Nicaragua’s exports as “pyrrhic” compared with US$1.4bn worth of exports to the US, a relationship likely to come under strain as Beijing and Managua become closer allies.

While some argue that the FTA will boost Nicaraguan exports, others disagree. The kinds of products that Nicaragua could sell to China, such as fruit or agricultural inputs, are cheaper for Beijing to buy from nations such as the Philippines or Malaysia, Evan Ellis, a professor at the US Army War College Strategic Studies Institute, told Nicaraguan media outlet El Confidencial in an article published December 2022. And Hernán Alberro of China Index, a global civil society organisation, believes that FTAs between Latin American countries and China are generally favourable to Beijing, “which sells cheap, low-quality products that it can’t sell to Europe or the US due to quality controls in those markets,” he told Spanish newspaper El País in an article published 9 August.

Then again, even if trade doesn’t get a boost, another attraction of relations with China is the promise of investment and humanitarian assistance. For example, countries such as Costa Rica and El Salvador received a raft of investments as part of negotiations over ending relations with Taiwan in favour of China. In a piece posted on the website of Peru’s army centre for strategic studies (CEEEP), Ellis highlights China’s agreement to purchase US$300m in Costa Rican bonds and construct a new US$100m stadium among other things. Beijing is also funding a new national library for El Salvador. However, thus far Nicaragua has received relatively little in return for its decision to make the diplomatic switch, with the launch of phase one of the “Nuevas Victorias” housing project in April the first major project linked to the new friendship.

It may be the case that Nicaragua simply left it too late to reap the rewards, as economic uncertainties in China have led to “some indications of a tapering of Chinese investment and finance” in the region, according to Margaret Myers, director of the Asia & Latin America Programme at the Inter-American Dialogue, a Washington DC-based think tank. Nonetheless Managua may have had its hand forced due to deteriorating relations with the US and its allies in recent years. This stems from the country’s authoritarian shift, which deepened with the brutal repression of mass protests in 2018 and with the November 2021 general election, which produced a re-election victory for Ortega in a contest widely slammed as fraudulent.

Since then, Nicaragua has sought closer ties with China, as well as Russia. For Beijing, re-establishing relations with Managua meant that it wrested another ally away from Taiwan, and also gained its support in international fora such as the United Nations. Myers believes that Beijing’s relations with Nicaragua are motivated more by these diplomatic considerations than by trade, as Nicaragua represents such a tiny market, she told El País in the 9 August article.

Despite scepticism over the economic impact of the FTA, there are signs that there could be some limited impact. For example, the signing of a new agreement for the export of Nicaraguan beef to China in August could lead to an uptick of trade in the sector. It is also possible that Nicaraguan officials extract more investment from China if they are adept at leveraging their position.

Another point of interest is the potential impact on Nicaraguan domestic politics. The fact that Laureano Ortega Murillo has taken such a prominent role in relations with China, as well as with Russia and Iran, has added to speculation that he is likely to take over from his parents at the head of the government at some point. If he does, it is likely that he will try to take advantage of the relationships he has built up with Chinese officials. However, he, or any other successor, could face more complicated relations with the US as a result of pulling closer to Beijing. Washington has already voiced its concerns over developments in Nicaragua by imposing various rounds of sanctions, but officials have so far refrained from unleashing the full arsenal of economic measures on Managua, perhaps out of fear of sparking a greater wave of migration to its southern border due to the impact on the Nicaraguan economy.

Chile’s President Gabriel Boric hosted a summit on democracy in Santiago on 21 July attended by left-leaning leaders in the region, including Brazil’s President Luiz Inácio Lula da Silva, Colombia’s Gustavo Petro, and Uruguay’s Yamandú Orsi, as well as Spain’s Prime Minister Pedro Sánchez. The attending heads of state emphasised the importance of progressive left-wing leaders presenting a united front in the face of the rise of organised far-right populist and authoritarian movements threatening democratic governance.

“The global right-wing are permanently meeting and are articulated,” President Boric said while addressing the ‘Democracia Siempre’ summit. “We have to do this but in a positive way. We need to confront anger with hope and proposals, and I think we have the means to do it but we need to be more aligned,” he said. President Lula warned that hard-fought advances in social rights were in jeopardy in the face of a far-right spreading disinformation and discrediting democratic institutions. President Petro argued that the far-right “controls the algorithms, sows hatred and spreads fear; they are promoting a real war”.

The five leaders announced action to defend democracy and multilateralism threatened by trade protectionism and tariffs. They supported the somewhat nebulous and idealistic concept of a network of progressive think tanks countering rhetorical assaults on democracy from the far right and working to deepen international coordination and cooperation.

On the other side of the Andes, a day later, Argentina’s President Javier Milei served notice of the challenge facing the region’s progressive leaders. Milei headlined an event called ‘Derecha Fest’ billed as “the most anti-left-wing event in the world”. Some 2,500 people paid Ar$40,000 (US$31) for a ticket to attend the event held in an exclusive hotel in the central province of Córdoba, where they were greeted by life-size cardboard cut-outs like Marvel Super heroes of Milei and a selection of his ideological allies on the global stage, such as US President Donald Trump, El Salvador’s President Nayib Bukele, Hungary’s Prime Minister Viktor Orbán, and Italy’s Prime Minister Giorgia Meloni.

After a few local far-right warm-up acts, the star of the show took to the stage. Milei railed against left-wing Kirchnerismo, branded his Vice President Victoria Villarruel “a traitor” for not preventing a recent senate session from taking place during which an increase in pensions for retirees was approved, which he said he would veto for jeopardising the fiscal surplus, and denigrated opponents as “baboons”. By comparison, Boric’s anodyne assertion at the ‘Democracia Siempre’ summit that “we cannot deny the legitimacy of the other [political adversaries]” was not likely to fire up supporters.

Kicillof and Kirchner

The PJ governor of Buenos Aires, Axel Kicillof, and PJ provincial president, Máximo Kirchner, eventually agreed on the candidates to appear on a joint list knowing that President Milei’s LLA would emerge victorious if they presented separate lists. But if the PJ still goes on to be defeated in Buenos Aires, the party’s traditional electoral stronghold, it is likely to trigger serious internal recriminations from which it might not recover in time for the crucial mid-term federal congressional elections in October.

Electoral lists finalised

During his address at ‘Derecha Fest’, Argentina’s President Javier Milei called for his far-right La Libertad (LLA) to show “organisation and pragmatism”, while urging supporters to rally behind the party in the upcoming legislative elections in the province of Buenos Aires on 7 August and mid-term federal congressional elections on 26 October.

The final deadline at the weekend for presenting completed electoral lists to compete in the key provincial elections saw some eleventh-hour negotiations within the Partido Justicialista (PJ, Peronists) to overcome internal divisions in order to present a joint list to confront Milei’s LLA, which forged an alliance with the right-of-centre Propuesta Republicana (Pro), of former president Mauricio Macri (2015-2019), for the purpose of the Buenos Aires elections (LLA, having defeated the PRO in the legislative elections in the City of Buenos Aires in May, took the plum positions).

The PJ governor of Buenos Aires, Axel Kicillof, struggled to agree on the composition of the eight separate lists for the eight districts in Buenos Aires with Máximo Kirchner, the PJ party president in Buenos Aires and the son of former president Cristina Fernández (2007-2015).

Milei is seeking to nationalise and polarise the elections. “Kirchnerismo or liberty. Poverty or progress,” he wrote on social media, while blasting Kicillof as a “Soviet dwarf”. The LLA is campaigning on the Milei administration’s reduction in inflation and economic recovery as well as a promised improvement in public security, a major voter concern in the province. It even selected Maximiliano Bondarenko, until recently a provincial police chief, to top one of the eight party lists, in the district where Kicillof managed to place his deputy governor, Verónica Magario, atop the PJ list. Bondarenko promised to return security and dignity to “honest people, who get up early, pay their taxes, and want to live in peace”.

Kicillof, for his part, is campaigning on a promise to “stop the chainsaw” in an attempt to tap into voter frustration with the spending cuts, increased unemployment, cuts to education and health, and paralysis of public works under the harsh austerity measures imposed by the Milei administration.

Chaos ensued after a cash-laden Bolivian military cargo plane crashed into traffic on a road near the El Alto international airport on 27 February, killing 24 people and littering the highway with B$423m (US$62m) in banknotes.

The plane, which was carrying a delivery for the central bank (BCB), crashed in the densely populated city of El Alto, on the plateau above La Paz, in bad weather. Most of the victims were bystanders who were in the area where the plane came down. With banknotes fluttering across the streets, a large crowd attempted to gather up the cash and clashed with authorities guarding the site. “Our estimates suggest that at the peak of the conflict there were about 20,000 people,” trying to take the banknotes, of whom 49 were arrested, the deputy interior minister, Hernán Paredes, said. Police fired tear gas to disperse the crowds as money was burned to prevent its theft.

The BCB’s president, David Espinoza, said that around 30% of the cash is believed to have been stolen. The banknotes’ serial numbers have been cancelled, rendering them invalid, although this will not prevent them from seeping into Bolivia’s cash-reliant economy. Meanwhile, the attempt to invalidate the cash has had wider ramifications. The La Paz transport union Asociación del Transporte Libre advised members not to accept payment in banknotes, despite the BCB having set up a website to check serial numbers, saying that verifying each note would be too time consuming. Local media has also reported that many vendors in El Alto and La Paz are refusing to accept B$10, B$20, and B$50 banknotes as these were the denominations being carried on the plane.

Paz plans greater devolution with budget shakeup

President Rodrigo Paz announced on 4 March that he intends to revoke “nearly 60 laws and 40 decrees” as part of his plan to redistribute state funds so that 50% of these are administered by regional and local governments, and 50% by the central government. This proposal, which Paz named the ‘50/50’ scheme on the campaign trail, “is a structural change to the state, it’s not just about sharing out resources,” he said. “Why do people from Chuquisaca migrate? Why don’t they stay in their lands?” he asked rhetorically, saying: “This is about building the future.”

The government of President José Antonio Kast decided on 10 August that the profit earned by state-owned copper giant Codelco in 2025 (US$2.4bn) should be reinvested by the company in its entirety. It was the first time in the company’s history that the state did not take a share of Codelco’s profits. 

One issue that swings with Latin America’s economic policy pendulum is the role of state-owned companies and the treatment of their profits. Left-wing governments have generally been more inclined to use state companies to pursue broader policy objectives, while right-wing governments have tended to favour greater commercial independence or privatisation. When leftist leader Luiz Inácio Lula da Silva returned to the presidency in Brazil in 2023, for example, he moved away from his right-wing predecessor’s policy of exceptionally large dividend payouts by state-controlled oil company Petrobras, placing greater emphasis on retaining profits for investment.

Unlike Brazil’s Petrobras, Codelco is 100% owned by the state and so has no minority shareholders to put pressure on the government to raise dividend payments. Even so, the reason for the change in policy, at least officially, was not ideological but practical. Codelco is heavily indebted and is in the midst of an overhaul of ageing mines that requires considerable amounts of capital, the government argued.

“It gives us great support just when we have to work to implement a deep recovery plan for Codelco,” Codelco’s chairman Bernardo Fontaine said. Indeed, the company has been facing considerable structural headwinds: ageing ore deposits, delays in major expansion projects, a string of safety incidents including a deadly tunnel collapse at the El Teniente mine last year, and net debt of US$25.1bn at the end of 2025.

“In light of the corporation’s production challenges and financial commitments, our goal is to strengthen its capital base in order to safeguard its credit rating, maintain liquidity ratios, and above all avoid responding to major production challenges by further increasing the company’s debt,” Economy and Mining Minister Daniel Mas said on 10 August. Upon taking office in May, Mas had painted a grim picture of the state of Codelco, saying it was marked by a “worrying level of indebtedness” and a “stagnation in production”.

While the previous leftist government led by former president Gabriel Boric (2022-2026) allowed Codelco to retain an average of 30% of profits for reinvestment each year, the current administration is allowing it to retain 100%. But Mas said the additional resources also imply increased responsibility. “This effort by the state must necessarily go hand in hand with an effort by Codelco,” he said on 10 August. “It demands financial discipline, maximum transparency, spending efficiency, and rigorous prioritisation of investments. Every peso that remains within the company belongs to the Chilean people and must be managed with the utmost rigour.”

Codelco’s pre-tax profit surged to US$1.97bn in the first six months of 2026, a substantial increase from US$429m during the same period a year earlier. The improvement came despite an 11% decrease in copper output as the metal’s price rose by more than 40%.

Economy stagnates

According to figures from the central bank (BCCh), Chile’s economic activity fell by 0.2% in the second quarter of 2026, compared with Q2 2025. This result was mainly due to a fall in exports and a decrease in mining activity, which was down 6.4% year-on-year, while non-mining activity was up 0.7%. In seasonally adjusted terms, GDP was unchanged from Q1 to Q2 this year, while there was a quarterly contraction of 0.3% in Q1 2026, a 0.4% quarterly rise in Q4 2025, and a 0.4% quarterly contraction in Q3 2025.

On 2 October Jamaica’s Prime Minister, Bruce Golding, gave a national TV address in which he sketched out the reasons for his decision to resign as prime minister. The decision was initially announced by himself and the Jamaica Labour Party (JLP) on 25 September. Officially, the JLP said that it had tried to talk Golding out of resignation but that Golding was adamant. At that point, neither the party, nor Golding, gave any reason for the change at the top. The new party leader and prime minister will be chosen by delegates at the JLP’s forthcoming annual conference on 18 November. There are already six candidates to succeed Golding, but no-one has formally declared yet. Nominations close on 19 October.

Golding, 63, said that a younger leader was needed to take the party into the general elections next year. He also admitted that questions about his role in the saga which led to the extradition to the US of a Jamaican drug baron, Christopher 'Dudus' Coke, had affected him “deeply” (see box). He said: “I cannot allow the challenges we face and the issues that we as a people must confront to be smothered or overpowered by this saga and the emotions they ignite. It would not be fair to my country; it would not be fair to my party.”

Golding has been in office for four years, after narrowly winning the 2007 election that ended the JLP’s 18 years out of office. His twin goals were to reduce violent crime and to get the economy growing again. There was some evidence that he was achieving these goals. Violent crime has dropped nearly 40% year-on-year in the first half of 2011, according to official figures, thanks to a heavy crackdown on gangs.

The government says that the economy is on the up. The finance minister, Audley Shaw, expects real annual GDP in 2011 to exceed the 2.5% growth target. Furthermore, the opposition has got itself into a tangle after the energy minister, Clive Mullings, asserted that the economy was growing again after 20 years of decline. A former finance minister, Omar Davies, from the opposition, questioned this assertion and produced statistical evidence purporting that there had been no growth since 2008. Davies and the opposition would probably have been better advised to have welcomed the growth but to have argued simultaneously that it was both overdue and feeble.

Before his resignation announcement, Golding was even showing signs of picking up in the opinion polls after the ‘Dudus’ scandal. His popularity was mostly recently marked at 32%, up from 25% year ago.

The front-runner to succeed Golding is Andrew Holness, 39, according to an opinion poll for the Daily Gleaner, a local newspaper. Holness is a three-term member of parliament and currently minister of education. He had by far the highest name recognition, with 43% of those polled by the Gleaner on 1- 2 October naming him as the best candidate to succeed Golding. The other five contenders, Dr Christopher Tufton, 43 (the minister of industry investment and commerce), Dr Ken Baugh (deputy prime minister and foreign minister), Audley Shaw, Mike Henry (transport minister) and Robert Montague (agriculture and fisheries minister) have much less support.  Tufton is a distant second with 9% support, according to the Gleaner poll.

The Gleaner is now floating the idea that Holness may be elected unopposed, such is his strength in the opinion polls.

As Holness is by the youngest of the six contenders, Golding’s comment on “a new generation” suggests that Holness is Golding’s preferred candidate. It is not clear whether Golding will step down from politics entirely. He has not said whether he will fight for his seat in the 2012 elections.

The dig about youth also strikes at Portia Simpson Miller, the leader of the opposition People’s National Party (PNP). She is rising 66 and has been a fixture of national political life for decades. Golding himself was first elected to the House of Representatives 40 years ago. Golding pointed out that the leaders of the US, Britain, Canada, Mexico, Spain, the Netherlands, Finland, Austria, Belgium, Denmark, Norway, Australia and New Zealand were all at least 10 years younger than him.

Golding sought to reassure “major international partners” that his resignation would not result in instability, stating, “the direction of the government is firmly in place and the transition will be smooth and seamless…We will not deviate from the economic reforms on which we have embarked”. While Jamaica, like the rest of the Caribbean, had suffered as a result of the 2008-2009 global recession, an August report by the UN’s Economic Commission for Latin America and the Caribbean (Eclac) noted signs of recovery. According to the report, following estimated annual real GDP contractions of 1.3% in 2010 and 30% in 2009, there will be a recovery of 1.5% in 2011, thanks to stronger exports and a reduction in domestic interest rates.

As inflation has remained subdued (1.7% accumulated for the first five months of the year), the central bank has been able to push interest rates down to a barely positive (in inflation terms) level of 6.25%. The bank’s target for inflation in 2011 is for a rate of between 6% and 8%.

Golding has pulled the government out of loss-making businesses such as the flagship carrier, Air Jamaica, and three of the sugar mills it had previously taken over.

In his TV address, Golding argued that the economy is now creating new jobs again, though he also admitted that so far the number of new jobs had not replaced those that had been lost during the downturn. He said that “while the worst may have passed, we are not out of the woods. There are challenges that remain on many fronts that will require strong leadership to overcome and absolute confidence in that leadership. Questions about the role I played in the Coke/Manatt matter have remained a source of concern in the minds of many people.”

• The ‘Dudus’ Saga

Golding’s leadership and his credibility were called into question after it emerged last year that he had spent almost nine months stonewalling a US extradition request for Cristopher ‘Dudus’ Coke. The US originally issued the request in 2009.

Golding maintained that he objected to the extradition request because it relied on unauthorised wiretap evidence, but he also appeared to hire a US law firm, Manatt, Phelps & Philips, to lobby the US to drop the extradition request.

What made the US request so politically sensitive was that Dudus’s ‘Shower Posse’ controlled the Kingston neighbourhood of Tivoli Gardens, which was the heart of Golding’s parliamentary constituency.

Golding inherited his constituency from the JLP’s longtime leader Edward Seaga in 2002. Seaga had allowed ‘garrison politics’ - in which gangs deliver votes for local politicians - to flourish. Golding had been an outspoken critic of such practices.

When Golding eventually authorised the arrest of ‘Dudus’ in May 2010, there were pitched battles between gang members, police and the army. At least 73 people were killed in four days of fighting. Three security officers were also killed. Coke himself was captured (some say he surrendered) a month later and was extradited to the US, where he pleaded guilty to charges of racketeering and assault.

• Private sector backing

The private sector lobby, Partnership for Transformation (PFT) issued a statement backing Golding’s decision to step down and expressing a willingness to collaborate with the next prime minister to ensure good governance. The PFT includes the Jamaica Exporters' Association, the Private Sector Organisation of Jamaica, the Jamaica Manufacturers' Association, the Jamaica Chamber of Commerce and the MSME Alliance, which represents a significant number of small and medium-sized enterprises

• Party roles

Andrew Holness is the chairman of the Jamaica Labour Party (JLP)’s public relations committee; Audley Shaw and Christopher Tufton are deputy party leaders of the JLP; Mike Henry is party chairman and Robert Montague is deputy party chairman.

El Presidente Rafael Correa apeló ante las fuerzas armadas durante el fin de semana para que no sean engañados por “un plan de venganza” trazado por “traidores” con el objetivo de instigar un golpe. Los “traidores” en cuestión, dijo Correa, eran “los mismos políticos de siempre... oficiales retirados del ejército, totalmente al servicio de la CIA... y unos pocos oficiales en actividad.” Correa dijo que ellos estaban tratando de sembrar la discordia en los militares tal como lo hicieron antes “del golpe del 30S”, el motín policial del 30 de setiembre del 2010, que vio a Correa secuestrado en un hospital antes de ser rescatado por las fuerzas especiales.

Hablando durante su transmisión semanal, Correa dijo que el “plan de venganza” era bastante similar al de 30S, y consiste en esparcir falsos rumores acerca de salarios con el fin de agitar el malestar. Específicamente, acusó al opositor Partido Sociedad Patriótica (PSP), del ex presidente Lucio Gutiérrez, de estar detrás del último “desesperado” complot (Correa insiste que Gutiérrez estaba detrás del motín policial del 30S) diseñado “para crear incertidumbre en las fuerzas armadas”.

Está lejos de ser la primera vez que Correa ha aludido a un complot en su contra sin proveer muchos detalles concretos. En la raíz del motín policial del 30S estaba la desilusión con la nueva ley del servicio público, y su efecto sobre los salarios y los bonos. El gobierno ha acordado hacer pagos retroactivos de salarios hasta el 2010 para mitigar esas inquietudes, pero Correa dijo que el PSP estaba detrás de la introducción en el congreso de un debate pidiendo que esos pagos se retrotraigan hasta el 2008, a un costo de US$70m para el Estado. Correa apeló a las fuerzas de seguridad para que no fueran engañadas y sostuvo que los acuerdos salariales a los que su gobierno había llegado con ellos eran mucho mejores de los que su predecesor había logrado.

La oposición política acusa a Correa de paranoia. Él no hizo mención de esto, y podría no haber tenido repercusiones, pero es ciertamente llamativo que el comandante del ejército ecuatoriano el General Patricio Cárdenas, haya renunciado por “razones personales” días antes de que Correa hiciese su última afirmación de conspiración. Cualquier reestructuración en la jerarquía militar llama la atención: la institución jugó un rol instrumental en sofocar el motín policial –pero se tomó su tiempo antes de actuar. Cárdenas se retira dos meses antes de la culminación de sus dos años en el puesto. Fue reemplazado por el General Marco Vera, ex jefe del estado mayor.

Correa insiste en que debido a que sus oponentes no son capaces de vencerlo en las urnas, algunos de ellos están intentando buscar otros métodos para llegar al poder. La decisión de hacer este último alegato ahora es curiosa, porque al pintarse a sí mismo como la víctima de subversión interna, Correa puede convertir esto en la justificación de algunas de las acciones más autoritarias de su gobierno. Esta semana logró que el congreso apruebe una ley de reforma electoral que severamente restringirá la cobertura mediática en la etapa previa a las elecciones prohibiendo toda cobertura impresa o transmitida que podría considerarse que favorece o denigra a candidatos individuales o sus políticas, durante las campañas electorales [IL-12-03].

La oposición se ha levantado en armas en contra de la ley, la cual alega, es equivalente a la censura de los medios y la persecución de periodistas (ver más abajo). También alega que los candidatos no tendrán ninguna obligación de rendir cuentas a la opinión pública y como consecuencia esta estará inadecuadamente informada para hacer juicio al llegar el día de las elecciones. Correa se muestra firme en que la reforma es necesaria para impedir que los medios sean un “actor político” e influencien las elecciones con su propia agenda. Él sostiene que la ley también se aplica a su transmisión semanal de los sábados, durante la campaña electoral.

La oposición también criticó el retoque hecho al sistema de representación proporcional en la ley de reforma electoral para la elección de diputados para los congresos nacional y regional. El estrecho fracaso de la gobernante Alianza PAIS (AP) de asegurarse una mayoría legislativa en las últimas elecciones ha impedido tratar un número de iniciativas políticas de Corrrea. La oposición insiste que la reforma favorecerá a la AP de Correa, la cual, sostiene la oposición, podría haber obtenido una confortable mayoría de 75 bancas en el congreso de 124 bancas en las elecciones del 2009 bajo este sistema, en vez de las 59 que obtuvo.

• Ecuador en África

Ecuador busca abrir nuevos mercados y firmar acuerdos de cooperación con países africanos, dijo el canciller, Ricardo Patiño, durante un taller en Quito titulado “Ecuador en África” esta semana. Patiño dijo que la conferencia bien podría titularse “Ecuador no está en África” debido a la falta de lazos diplomáticos del país con la región. Dijo que Ecuador estaba interesado en aprender lecciones de Cuba, Brasil y Argentina, sobre cómo expandir los lazos con África, y que agregaría seis embajadas durante los próximos dos años a las dos que tiene actualmente, en Gabón y Sudáfrica.

• Represión a los medios

Una corte ecuatoriana ordenó a dos periodistas, Juan Carlos Calderón y Christian Zurita, a pagar US$1m cada uno por daños al Presidente Rafael Correa, esta semana, además de US$100.000 adicionales por costas legales. Ambos periodistas afirmaron en su libro “El Gran Hermano” que Correa era consciente de todos los contratos que su gobierno había concretado con su hermano mayor Fabricio Correa, por alrededor de US$170m. Correa vehemente negó que ese fuese el caso. Separadamente, otro periodista, Emilio Palacio, formalmente busco asilo en EU esta semana después de haber sido sentenciado a tres años de prisión por un artículo de opinión que él escribió en el diario nacional El Universo sobre el motín policial del 30S.

The International Monetary Fund (IMF), ratings agency, Standard & Poor’s, and the US Senate Caucus on International Narcotics Control have all had worrying things to say about The Bahamas in the past month.

The Bahamas has had a new government since the 7 May victory of Prime Minister Perry Christie’s Progressive Liberal Party (PLP) over the incumbent Free National Movement (FNM) led by Hubert Ingraham by an impressive 29-9 seats in the 38-seat parliament [RC-12-06]. Immediately on assuming power, the PLP government announced that it was “shocked” by the state of the country’s finances.

The PLP accused Ingraham’s government of “mismanagement” and “abuse” of the public purse in leaving behind a US$500m deficit for fiscal year 2012/13. At the beginning of September, the IMF weighed in with a warning that The Bahamas’ debt-to-GDP ratio had risen “much higher than expected”. The ratio is 54%, but contingent liabilities relating to public corporations such as the Bahamas Electricity Corporation (BEC) pushes that ratio above 60%.

Commenting on the debt-to-GDP ratio on 7 September, the IMF’s mission chief for the country, Gene Leon, warned: “In terms of outcome, it [the deficit] is much higher than projected. Once these things start to slip, it can easily get to a point where it becomes a problem.” Before the 2008 financial crisis, the debt-to-GDP ratio was below 40%.

It is this decline that prompted James Smith, an important adviser to the Christie government, to suggest in early September that the country might consider introducing an income tax. He said: “This no tax issue is simply not the same discussion any more. Five years ago, income would have been off the table. But I suspect it will come up. The time has come to look at all options, to the extent The Bahamas has stopped promoting itself as a tax-free jurisdiction. I think we can begin to move away from that model.”

On 24 September, the markets had their say, with Standard & Poor’s issuing a warning that a downgrade was on the cards unless the PLP came up with a credible plan for reducing debt. It revised the country’s outlook from stable to negative. The rating agency said: “The government deficit, instead of peaking and starting to decline, rose even further in the fiscal year ended June 2012. Capital expenditure cost overruns…and continued sluggish growth in recurrent revenue pushed the general government deficit to an estimated more than 7% of GDP.”

Last November, S&P downgraded the country’s sovereign long-term credit from BBB+ to BBB. Slightly more positively, however, it does expect the general government deficit to fall towards 4.4% of GDP in the fiscal year ending June 2014 after a 6.7% deficit in the year to June 2013.

In response to the fears, the government is to hold a National Symposium on Tax Reform from 25-26 October, however S&P has said that any changes are likely to take years to implement.

The one good point for the new government, as we reported last month, has been an apparent improvement in the crime scene. For the period 1 January-24 July, the overall crime rate was down 9% on the same period in 2011, with the murder rates down 14%. The new government was quick to take the credit for a 24% decrease in the murder rate between it being sworn in on 8 May and the end of July. However, a report published in September by the US Senate Caucus on International Narcotics Control – Preventing a Security Crisis in the Caribbean - cautions about the drug trade in The Bahamas.

The background is a very substantial decrease in cocaine trafficking to the US via The Bahamas since the 1982 launch of Operation Bahamas, Turks and Caicos (OPBAT). In the 30 years since the launch of OPBAT, the percentage of cocaine entering the US via The Bahamas has dropped from nearly 80% to less than 5%.

However, the Senate report argues that this is not the time for complacency, noting that in September 2011, President Barack Obama identified The Bahamas as one of four Caribbean countries deemed to be “major transit countries”. The other three are the Dominican Republic, Haiti, and Jamaica.

The Bahamas was also one of eight Caribbean countries designated as “jurisdictions of primary concern for money laundering activities”. The others are Antigua & Barbuda, the British Virgin Islands, the Cayman Islands, Curaçao, the Dominican Republic, Haiti, and St Maarten.

The report also notes that it was as recently as 2010 that The Bahamas recorded its highest murder rate, with 28 homicides per 100,000 inhabitants. This was a lot less than Honduras’s 77 per 100,000 or Jamaica’s 52 per 100,000, but it was higher than many other countries in the region, including Mexico with 18 murders per 100,000 people.

The Senate report warned: “The Caucus is very concerned with the potential shift of drug trafficking patterns back to the Caribbean as a result of increased interdiction efforts in Mexico and Central America.” It said that it agreed with the comments of Assistant Secretary of State for International Narcotics and Law Enforcement Affairs William Brownfield, who said recently: “I do not see it right now, but simple logic and common sense tells you that you are probably going to see it in the next two or three years.”

The concern for the US is the controllability of The Bahamas, with its 700 islands and cays spread over 100,000 square miles. The Senate report warned: “Due to the country’s proximity to the US and the enormous area it encompasses, a number of drug trafficking organizations continue to operate in The Bahamas. The drug trade contributes to violent crime and a murder rate that is fourth highest in the region and rising.”

Deportations

The September report from the US Senate Caucus on International Narcotics Control – Preventing a Security Crisis in the Caribbean – acknowledges the difficulties caused by the deportation of thousands of Caribbean nationals from the US to their countries of origin.

 The problem is twofold. First, US Immigration and Customs Enforcement (ICE) provides only 3-5 days’ advance notice to the receiving countries. Secondly, the only reason provided is the offence for which the deportee is being sent home. ICE is prevented by US law from passing on further details about the deportee’s criminal past without permission from the relevant state of federal authority.

  The Senate report includes the following recommendation: “A full criminal history should be sent with all deportees to their receiving countries’ authorities. In particular, ICE should expand the sharing of serious criminal convictions with Caribbean nations that express a desire for such information.”

A week after the killing of a Terana Indian during a clash with security forces in Mato Grosso do Sul, the justice minister, José Eduardo Cardozo, announced the deployment of 110 soldiers to the region. Protests erupted across the country following the clash. In Rio Grande do Sul, about 2,000 Kaingang and Guarani Indians blocked roads to protest the government’s decision to delay the handover of ancestral lands to indigenous communities. In Curitiba, the capital of Paraná, 30 Kaingang Indians invaded the offices of the ruling Partido dos Trabalhadores (PT) on 3 June and only agreed to leave 10 hours later when they were promised a meeting with President Dilma Rousseff’s chief of staff, Gleisi Hoffmann.

According to the Federal Police, around 100 agents were shot at as they arrived at Buriti farm, in Sidrolândia, Mato Grosso do Sul to implement a judicial decision giving the land to farmers. The area has been disputed by farmers and the Terena for the past 13 years. A member of the indigenous group told the daily, O Globo, that the Terena would “fight to the death” in response to the killing.

On 31 May, the Terena reoccupied the property, set fire to the surrounding fields and blocked roads in the area. In response, Cardozo has decided to send in federal troops, but he stressed that the move was designed to resolve the stand-off peacefully, rather than exacerbate the confrontation.

President Rousseff responded by calling an emergency meeting to discuss both the mounting dispute over Indian land and the occupation of a construction site at a major hydroelectric plant. Last week Indians paralysed work at one of three building sites at Belo Monte, which is due to become the world’s third-largest dam, capable of producing 11,233 megawatts of electricity - equivalent to about 10% of Brazil’s total current generating capacity.

The controversial project on the Xingu River has become a magnet for Indians from other untouched river basins in Brazil, such as Munduruku from the Tapajos, the only major river in the Amazon basin with no dams. Following the emergency meeting, Rousseff dispatched her secretary-general, Gilberto Carvalho, to meet a group of Munduruku Indians who had flown into Brasília on air force planes.

So far the group appears to be implacable in its opposition to the project. “We went to see for ourselves what a hydroelectric dam is and we saw that it has nothing good in store for us,” a Munduruku leader told Carvalho, adding that promised development had not benefited the Indians of the Xingu. “We saw Indians being humiliated and we do not want that for our region.”

• Government dismisses April trade wobble

Brazil posted its worst trade deficit on record in the first five months of 2013. The deficit was US$5.9bn, on exports of US$93.3bn and imports of US$98.7bn.The result was impacted by an accounting measure to carry oil imports worth an estimated US$2.14bn from last year into 2013. Foreign Trade Secretary Tatiana Prazeres pointed out that the trade account is still in surplus on a rolling 12-month basis, with a positive result of US$7.8bn to May. However, the state oil giant Petrobras continues to run a big oil trade deficit; of 454,000 barrels/day in the first quarter of 2013, nine times higher than in Q1 2012 (50,000 b/d) The central bank projects a trade surplus of US$15bn in 2013, down from US$19.4bn in 2012. The current account deficit was 3.0% of GDP in the 12 months through April.

DOMINICAN REPUBLIC | Obama responds to TPP concerns.

On 25 May, a letter sent by US President Barack Obama to the Dominican Republic’s President Danilo Medina addressing the latter’s concerns about the negative effects that the proposed Trans-Pacific Partnership (TPP) trade agreement could have on Central America’s textile industry was released to the press.

The TPP is a proposed expansion of a 2005 economic integration treaty originally negotiated between Brunei, Chile, New Zealand and Singapore, and now set to include the US and a number of other Latin American and Asian countries. Back in November President Medina sent a letter to Obama in which he outlined his concerns that the concretion of the TPP agreement could have very negative effects for US trade partners that had signed up to the US-Central American-Dominican Republic Free Trade Agreement (Cafta-DR). In particular, Medina pointed out that a free trade agreement between the US and Asia-Pacific nations would undermine the delicate balance struck under the Cafta-DR to ensure that the Central American textile industry benefits from preferential access to the supply of intermediate goods produced in the US (yarns and fabrics), as well as to the US’s apparel market.

In his letter, Medina warned that any alteration to this balance could lead to “economic and social instability” in the Central American and Caribbean sub-region if its textile industry suddenly found itself unable to compete and loses its share of the US market, which could lead to job losses. However, in his reply, Obama asserted that US negotiators currently working on the TPP agreement “recognize the unique nature […] in regional economic integration” of the Cafta-DR agreement and that they “are mindful of the degree to which US suppliers are integrated with producers in the Dominican Republic”.

Obama went on to point out that he had instructed the US negotiators to take into consideration Medina’s concerns as well as the extensive discussions about the TPP held in May 2013 between the representatives of the US Department of Commerce and the ambassadors of Cafta-DR signatory countries; and the recent consultation on the topic between officials of the US State Department and the National Security Council with the Dominican ambassador to the US, Aníbal de Castro.

ARGENTINA | Citibank suspended from capital markets

Argentina’s securities regulator, the Comisión Nacional de Valores (CNV), suspended Citibank Argentina from operating in local capital markets on 27 March.

The move follows Citibank’s agreement with US Federal District Judge Thomas Griesa to allow it to process interest payments on Argentine bonds as long as it was a ‘one-off’, which would allow the banking group to exit its local custody business. Griesa has been seeking to block all Argentine debt service payments until the country pays a group of ‘holdout’ creditors with whom it has been in dispute.

The CNV ordered a “precautionary suspension” after finding that the bank did not comply with Argentine banking laws. The suspension means that Citibank will not be able to operate in the local stocks and bonds market, but it will be able to continue with its retail activities.

According to Reuters, Citibank Argentina opened its first branch in 1914. It is the country’s 12th largest bank by deposits, with Arg$22.82bn (US$2.67bn) as of December 2014, about 2.6% of all deposits in the Argentine banking system.

BRAZIL | Industrial production

After rising 2% month-on-month in January, industrial production fell 1.5% in February, according to Brazil’s official statistics institute, Ibge.

Several reasons have been given, some more serious than others. A one-off factor was that Carnival this year was in February rather than March, accounting for at least two days’ holiday.

More worryingly, however, there are signs of job losses and a build up of inventory. Furthermore the deterioration of the Real, means that certain imports necessary for production have added to cost pressures on the sector.

PARAGUAY | Mixed results on poverty

A total of 1.5m Paraguayans, or 22.6% of the 6.78m population, are living in poverty, according to an official report released by the national statistics agency (DGEEC) on 31 March. Of these, 710,173 people, or 10.5% of the population, live in extreme poverty, or indigence. Overall poverty fell by 1.2 percentage points from 23.8% in 2013, but an additional 33,084 people slipped into extreme poverty, up by 4.7% on 2013.

A total of 16% of residents of urban areas are calculated to live in poverty, a figure that doubles to 32% among rural inhabitants.

The report did not take into account the 2% of the population living in the western departments of Boquerón and Alto Paraguay in the Chaco region.

URUGUAY | Economy outstrips projections

Uruguay posted its 12^th consecutive year of economic growth in 2014, one of the longest runs in the country’s history. The economy expanded by 3.5%, according to the central bank (BCU). While this was down on the 5.1% GDP growth registered in 2013, it surpassed the predictions of both local analysts (3.3%) and the economy ministry (3%) for 2014.

Every sector of the economy expanded except construction, which contracted by 1.8% as “the housing market reached a plateau”, according to the BCU. Growth was driven by household consumption, which expanded by 4.2% (down from 5.2% in 2013).

Exports increased by 1% (up on just 0.2% in 2013) to US$9.16bn as a result of the Montes del Plata pulp mill coming on-stream in Punta Pereira in the department of Colonia in the second half of last year, as well as the contentious increase in production at the UPM pulp mill. Imports, meanwhile, fell by 1.2% to US$10.76bn. Uruguay’s trade deficit fell 12.5% to US$1.60bn in 2014, the lowest for four years, according to the BCU.

The economy and finance ministry is still urging “caution” in 2015, however, and is promising to keep a tight rein on public spending. This is primarily because the economies of both of Uruguay’s large neighbours are going through turbulent times: Brazil’s economy stagnated in 2014 and Argentina’s almost ground to a halt.

The cumulative effect of the constant economic expansion in Uruguay can be seen in the constant fall in poverty levels. Poverty fell to single figures in 2014, down 1.8 percentage points to 9.7%. The number of people living in indigence also fell from 0.5% to 0.3% of the population.

These are the lowest levels for both sets of poverty figures since Uruguay’s return to democracy in 1985. In absolute terms, there are now 335,008 people living beneath the poverty line in Uruguay; and a total of 10,360 living in extreme poverty.

• Corruption allegations

On 30 March Máximo Kirchner, son of Argentina’s President Cristina Fernández, denied press reports that he held foreign bank accounts jointly with Nilda Garré, the Argentine ambassador to the Organization of American States (OAS). According to investigations by the Argentine newspaper Clarín and the Brazilian weekly Veja, both Kirchner and Garré were signatories to accounts at Felton Bank in the US (now CNB) – which at one stage held US$61m in funds – and at Morval Bank in the Cayman Islands, with US$19m in funds. It is also claimed that Garré had accounts at Tejarat Bank in Iran. Both strongly deny the accusations.

Trinidad & Tobago has long been in the spotlight over the radicalisation of sections of its Muslim community. As long ago as 1990 a radical Muslim group attempted a coup d’etat, and now there are said to be 130 Trinidadians fighting with Islamic State in Syria. A proposed tightening of anti-terrorist legislation has been welcomed by the United States but has sparked anger in sections of the Muslim community. According to the 2011 census, Muslims make up about 5% of the country’s 1.34m population.

US President Donald Trump had a phone call with Trinidad’s Prime Minister Keith Rowley over the weekend of 18/19 February during which he raised concerns over terrorism. The Trinidad & Tobago government is responding to these concerns by seeking to strengthen its anti-terrorism legislation.

The government’s plans to amend existing anti-terrorism legislation were announced on 2 February by Attorney-General Faris Al-Rawi. He told a press conference: “We are allowing for specific provisions to allow us to meet with the United Nations resolutions which we have not been fully compliant on…. We are expanding the definition of property funds for terrorism and we are specifically going to include oil and other natural resources.”

The attorney-general also said that the government was seeking to expand the scope of the act to cover offences committed overseas. He said: “That is a very important position because as you know the allegations exist that persons may travel outside of this country, participate in events in other countries and what we want to do is to specifically capture any form of activity that can be linked to that.”

He added: “We are also looking to expand the [scope to include]…taking preparatory steps…. We are looking as well to expand the offences for the provision of services for the commission of terrorist acts or financing terrorism and the collection of property.”

“Attending or receiving training” for terrorism will be a criminal offence. And visiting areas where terrorism is taking place without first informing law enforcement officials will be an offence.

The AG said: “If you travel to that geographical area you are going to have a presumption in law that you were there for a terrorist activity.”

The government is combining stronger legislation with outreach to the Muslim community. For several months, National Security Minister Edmund Dillon has been consulting with community leaders and has now formally established a round table for discussions. Representatives from the US are involved in the initiative.

The first of these round-table meetings was held on 10 February in Port of Spain. One of Dillon’s main points was to urge community leaders to be more vigilant about radicalisation, and he urged them to help with the identification of terrorist recruiters.

The Muslim delegation was headed by Hafeez Kahn of the National Islamic Counselling Service. He made the point that the media, both local and international, was at fault in the way they portrayed Muslims in general.

In the meantime, more radical sections of the community are challenging the new legislation. For instance, Yasin Abu Bakr, who led the 1990 coup attempt, told a news conference on 4 February: “It is well known and it is documented that many Trinidadians have gone to the United States and become part of the military…and they have fought in Afghanistan, they have fought in Syria…and they are allowed to come back to America and they walk into Trinidad and nobody asks them a question.” Why, he asked, is not equal respect give to Trinidadians who fought in Syria?

Terrorism is not the only, or perhaps even the most important, security issue challenging the government. There were more murders in January 2017 than in any other January in the country’s recent history.

This January, there were 54 murders, up from 49 last January. The third week of January was particularly bloody, with 20 murders. Of the 54 killings, 39 were shot dead, eight people were stabbed to death, one man was beaten to death, and one was beheaded. Five deaths were unclassified.

People’s Partnership (PP) opposition leader Kamla Persad-Bissessar has tried to make the most of the crime wave, saying that the People’s National Movement (PNM) government led by Rowley “is not only impotent in the fight against crime, but seemingly lacks any genuine ability or desire to combat it on behalf of the citizens”.

The former prime minister called on her successor “to immediately convene an extraordinary session of parliament to debate the unacceptable crime situation, with the specific aim of informing the public of their immediate plans and strategies, the measures it intends to utilise to ensure an immediate short-term reduction of the murder, kidnapping, rape and assault rates”.

The government responded by calling a series of town hall meetings to discuss the crime problem, but at the first of the meetings Rowley got himself into further trouble with an infelicitous answer to a question about domestic violence: “I’m not in your bedroom; I’m not your choice of men.”

Rowley said his comments had been misrepresented and quoted out of context. The opposition and women’s groups didn’t accept this. The women’s arm of the United National Congress (UNC), the main component in the PP coalition, issued a statement saying: “We call on Prime Minister Dr Keith Rowley to issue and apology immediately since these women and their families have undergone tremendous psychological and physical trauma during their ordeals are now placed under similar trauma by this comment.”

There has been a concern that violence against women is rising, and the murder figures for January support this. In January 2016, 4.2% of murder victims were women; this January the proportion was 13.5%.

The Inter-American Development Bank (IDB) has recently conducted a study on the costs of crime throughout Latin America and the Caribbean (LAC). Trinidad & Tobago features among the middle tier of countries. The study shows that crime costs LAC countries between 2.41% and 3.55% of their GDPs on average. The IDB notes that the size of crime-related costs in LAC “is similar to what those countries spend on infrastructure and is roughly equal to the share of the region’s income that goes to the poorest 30% of the population”. Of the countries in the English-speaking Caribbean, the Bahamas has the highest crime related costs as a percentage of GDP (4.79%), followed by Jamaica (3.99%), Trinidad & Tobago (3.52%), and Barbados (2.68%).

Plans by the government led by President Evo Morales to exploit a local nature reserve, Tariquía, Tarija department for hydrocarbon deposits has led the local media to draw parallels with the ‘Tipnis’ dispute. This is a reference to the mass protests that took place in 2011 over government plans to construct a new road through the Isiboro-Sécure Indigenous Territory and National Park (Tipnis) ecological reserve, which dealt a major blow to Morales’ popularity. A repeat of such unrest would be damaging for Morales ahead of October’s general election in which he is seeking a further term for the ruling Movimiento al Socialismo (MAS).

In April 2018 the MAS government promulgated laws approving exploration and exploitation contracts for the San Telmo Norte and Astillero blocks which, combined, would generate US$8.9bn when up and running. Located in the provinces of Gran Chaco, O’Connor and Arce, the San Telmo Norte block has a potential of 1.08 trillion cubic feet (TCF), according to the hydrocarbons ministry. The operator is Petrobras Bolivia, the local subsidiary of Brazil’s state oil company Petrobras which is investing over US$193m. The contract for the Astillero block, which is located in the Gran Chaco and Arce provinces, went to YPFB Chaco SA, a subsidiary of state oil company YPFB, which is investing US$489m.

The hydrocarbons minister, Luis Alberto Sánchez, maintains that just 0.014% of the protected territory (which spans 246,870 hectares [ha]) will be affected by the plans. However, according to a report by local think-tank Centro de Documentación y Información (Cedib), published in October 2017 (which cites hydrocarbons ministry figures), there are five exploration blocks in Tariquía: Huacareta, San Telmo (norte), San Telmo (Sur), Churumas, and Astillero with 136,277ha of the protected territory earmarked for hydrocarbons exploration – considerably more than the 0.014% figure cited by Sánchez. A more recent (22 November 2018) Cedib press release claims that authorisation for the projects was given without the consent of the affected communities or any preliminary investigation, and it poses a risk to the ecological stability of the region.

Protests against the plans to exploit the territory have been taking place since 2017 with the most recent show of unrest, a 24-hour strike staged on 27 March by Tarija residents. Organised by the local civic committee, strikes and street blockades were concentrated in the departmental capital, Tarija city, but also occurred in the Méndez, Arce, O’Connor, Caraparí, and Padcaya provinces. Yet the Morales government maintains that the affected communities support the project.

Worryingly for the government, there are suggestions that the issue could serve as a rallying point for the fractured political opposition ahead of October’s elections. The day after the 24-hour strike, members of the Unidad Demócrata (UD) announced plans to take legal action against the proposed explorations in a bid to protect the biodiversity of the Tariquía reserve. UD national deputy Norman Lazarte told the national daily La Razón of plans to take the case to the constitutional court (TCP) on behalf of the people with letters being drafted to the attorney general’s office and ombudsman to enlist their support. Morales’ bid to run again is already contentious given the February 2016 popular referendum rejecting the proposal to change the constitution to allow him to seek a further term and local commentators are likening the government’s controversial plans with regard to the Tariquís to the dispute over the Tipnis which the government was forced to cancel after a violent crackdown on protesters (although the initiative was again revised in 2017).

• Polls

According to a poll by Latin American-wide independent research organisation Centro Estratégico Latinoamericano de Geopolítica (Celag), which was cited by state news agency Abi on 27 March, 45% of respondents said that they would vote for President Morales while 35% said they would vote for former president Carlos Mesa (2003-2005) who is running for Comunidad Ciudadana (CC), with Oscar Órtiz of Bolivia Dice No, third with 9%. Another poll, published by La Paz-based national daily Página Siete on 1 April, however, showed Mesa creeping ahead on 32% while Morales was on 31%.

BRAZIL | Electricity tariff raised amid drought. On 27 September Brazil’s federal electricity regulator (Aneel) announced an increase in the country’s tariff for power consumption in October from the second highest band (red level 1) to the highest band (red level 2). From April 2022 until halfway through this year, the tariff was set at the lowest band, or green, but it was brought up to yellow in July. It was lowered to green again in August, before being raised to red level 1 in September. A 5.91% spike in electricity bills in September contributed to an acceleration in inflation that month, which came in at 0.44% month-on-month according to data released on 9 October. The increase of energy tariffs to the highest rate, which took effect on 1 October, has brought the cost of electricity to R$7.88 (US$1.44) per 100 kilowatt-hours (KwH), up from R$4.46 last month. The tariff increase is notably due to an ongoing intense drought impacting hydroelectric production. Authorities have raised alarm over severe water scarcity in the rivers that supply the reservoirs of the country’s largest hydroelectric dams, such as Belo Monte on the Xingu River and Itaipu on the Paraná River. 

ARGENTINA | Construction and industry down. Argentina’s national statistics institute (Indec) on 8 October released data on construction activity and industrial production in August, showing a year-on-year decrease of 26.4% in construction and a yearly drop of 6.9% in industrial production. These annual decreases are larger than those registered last month, with construction registering a yearly decline of 20.4% and industrial production dropping 5.4% in July. In monthly terms, construction decreased by 2.9%, whereas industrial production was up by 1.5% on the previous month. In the construction sector, all 13 categories registered annual declines, with the largest yearly drops in granite and limestone slabs (-51.2%) and bathroom ceramics (-40.5%). Eight of the nine categories in the industrial manufacturing production index decreased in August compared to the previous year.

Brazil & Southern Cone: inflation rate
Percentage variation (year-on-year)

Brazil & Southern Cone: GDP growth (%)
Quarterly figures are year-on-year growth

Uruguay’s new foreign minister Rodolfo Nin Novoa was received in Buenos Aires by his Argentine peer Héctor Timerman on 5 March. The meeting took place four days after the investiture of Uruguay’s President Tabaré Vázquez. Argentina’s President Cristina Fernández failed to show up for the ceremony.

While President Fernández admittedly faces some political difficulties at home, it would not have been an arduous journey across the River Plate to attend the inauguration, and her no-show could well owe to rancour over Vázquez’s admission in October 2011 (18 months after his first term in office ended) that he had considered war scenarios with Argentina when the dispute over the construction of a pulp mill on the Uruguayan side of the shared River Uruguay reached fever-pitch in 2007.

The Argentine foreign ministry released a statement highlighting the “traditional ties of friendship” between the two countries, but Timerman has helped these ties to spiral downwards in a succession of diatribes in recent years, including threatening to take Uruguay to the International Court of Justice (ICJ) at The Hague once again over the pulp mill.

Vázquez will not have to spend too much of his second five-year term dealing with Fernández, just the first nine months until she leaves office in December, when it is likely relations with Argentina will become less prickly.

But sensitive issues will remain, such as administration of the River Uruguay and the River Plate and Argentine trade protectionism, which has affected Uruguay directly and stymied any advance in talks between the Southern Common Market (Mercosur) and the European Union (EU) over a free trade agreement, an interminable soap opera without the drama.

• Nin Novoa on Venezuela

Uruguay’s foreign minister Rodolfo Nin Novoa has already made his mark in his new role with some candid remarks that former president José Mujica (2010-2015) might have admired – except that he was on the receiving end of one of them. Nin Novoa said that he would not fall into the temptation of “prioritising politics over judicial matters”, arguing that in his point of view this is exactly what the Mujica administration did “to obtain a political solution to allow Venezuela’s entry into Mercosur”.

PANAMÁ | La Bolsa de Diamantes. La primera bolsa de diamantes de América Latina, la bolsa de diamantes de Panamá (PDE, siglas en inglés), ha comenzado formalmente sus operaciones. La PDE abrió sus puertas después de una inversión de US$200m en la construcción del centro de joyería mundial (WJH, siglas en inglés) en la Ciudad de Panamá, que albergará a la nueva bolsa de diamantes y que actuará como una la Zona de Libre Comercio (ZLC) para la joyería.

La apertura del WJH fue asistida por el Presidente Juan Carlos Varela, quien dijo que esto marcaría un “punto de inflexión” en el comercio de joyería mundial. De acuerdo con una declaración de la PDE, el WJH incrementará el PIB de Panamá un 3% y creará 3.000 empleos directos e indirectos. Se espera que la PDE ayude al negocio de la joyería fina al por menor en América Latina, que actualmente mueve de US$8mm a crecer a más de US$10mm para el 2017.

NICARAGUA | Russian tanks. Last month the Frente Sandinista de Liberación Nacional (FSLN) government led by President Daniel Ortega announced plans to purchase new Russian tanks. On 25 April national daily La Prensa cited military spokesperson Manuel Guevara Rocha as saying that the purchase was planned as part of efforts to overhaul the armed forces. Guevara did not provide further details but the same day Russia’s state-owned news agency, Sputnik, reported that Russia was preparing to hand over some 20 modernised T-72B1 tanks to Nicaragua as part of a deal inked last year regarding the provision of 50 tanks – the total cost of which is projected at US$80m.

The Sputnik report points out that this latest purchase follows that of other military hardware acquired by Nicaragua from Russia in recent years which includes 12 ZU-23-2 anti-aircraft auto-cannons in 2014; a batch of GAZ-2330 Tiger armoured infantry vehicles in 2012; and two Mi-17V-5 helicopters in 2009. Sputnik also reported that Russia and Nicaragua were moving forward with a plan to supply Nicaragua’s navy with two modern Molnia-class missile ships.

While the Ortega government also failed to provide any information as to the possible uses of the tanks, on 29 April, Edwin Castro, the FSLN bench leader in the national assembly, was cited in the local press as saying that they were to be used for fighting drug trafficking. However, the following day the Ortega government issued a statement which appeared to distance itself from Castro’s claims, highlighting that only the president and armed forces are authorised to address issues of national security.

While the announcement regarding the planned purchase attracted international concern (see sidebar), it is also worth pointing out that Nicaragua’s military spending in 2015 is considerably less than its Central American peers (bar Costa Rica and Panama who do not have a military). According to the latest figures from the Stockholm International Peace Research Institute (SIPRI), Nicaragua’s military spending was C$1.952bn (US$68m), down from C$2.113bn (US$74m) in 2014. This compares with Q$2.1bn (US$273m) for Guatemala in 2015, US$223m in El Salvador and L$7.0bn (US$300m) in Honduras.

HONDURAS | Five arrested over Cáceres’ death. This month Honduran authorities arrested five people in connection with the death of high-profile environmental activist Berta Cáceres, the leader of NGO Consejo Cívico de Organizaciones Populares e Indígenas de Honduras (Copinh), murdered on 3 March [SSR-16-03]. The government led by President Juan Orlando Hernández has been under considerable pressure to produce results with regard to the murder of Cáceres, well-known for her work opposing the ‘Agua Zarca’ hydroelectric project located on the Gualcarque River in Honduras’ Santa Bárbara department.

Those arrested include: Sergio Ramón Rodriguez, the manager for social and environmental issues at Desarrollos Energéticos SA (Desa), the local company responsible for constructing the Agua Zarca dam; Mariano Díaz Chávez, an active infantry major; Edison Atilio Duarte Meza, a retired infantry captain; and his twin brother Emerson Eusebio Duarte, while the local press is also reporting that the other person arrested, Douglas Geovanny Bustillo, was a former lieutenant who served as Desa’s deputy head of security. That those arrested include current and former members of the military with ties to Desa will reignite concerns regarding the possible involvement of government forces in Cáceres’s murder.

The arrests have been welcomed by the US but Copinh and other international human-rights groups such as Amnesty International (AI) continue to express doubts regarding the investigation. Cáceres’s family and Copinh issued a statement questioning the arrests, complaining that they had been excluded from the investigation process, denounced continued threats, and reiterated calls for assistance by the Inter-American Commission on Human Rights (IACHR) in the investigation. AI’s director for the Americas, Erika Guevara Rosas, said that the arrests “raise… a number of questions about the investigation” – particularly given the failure to inform Cáceres’s family about developments in the case.

• International concern

At the end of April the Nicaraguan media cited the US ambassador to Nicaragua, Laura F Dogu, as saying that Washington wanted to know the motives behind the purchase of the Russian tanks. Meanwhile Costa Rica’s foreign minister, Manuel González, told Costa Rican daily La Nación that the concern regarding the acquisition of military hardware was not so much that it constituted a threat to Costa Rica as such but rather that a Central American country had decided to embark on an “arms race”. González said that instead of investing in military hardware, the sub-region should spend more on sectors like healthcare, technology, and infrastructure.

Added to these concerns has been the emergence of suspicions of wrongdoing amongst Bolsonaro’s political and personal allies. Proving his superficial commitment to the anti-corruption fight, the president has refused to take responsibility for such allegations, largely ignoring or denying them.

The PSL

Some of these allegations have concerned the PSL, the party which Bolsonaro joined ahead of the 2018 election but has since left following disagreements (in part brought on by these corruption claims). In February 2019, national media reported that several PSL members were under investigation for embezzlement of party funds and the use of ‘front’ candidates during the 2018 election campaign.

Gustavo Bebianno, one of the two PSL members in government and implicated in the case, took the hit and resigned as secretary-general to the presidency in February after a messy fall-out with Bolsonaro. However the central figure in these investigations, tourism minister Marcelo Álvaro Antônio, has remained in his post despite new developments and accusations over the course of the year. Bolsonaro argues that Álvaro Antônio has yet to be proven guilty of any wrongdoing.

Flávio

A more damaging investigation for the president has been the one into his eldest son Flávio, now a senator. Flávio is suspected of having benefited from a salary splitting corruption racket, run by a former parliamentary aide, Fabrício Queiroz, during his time as a state deputy in Rio de Janeiro’s legislative assembly (Alerj).

The investigation, which launched just before Bolsonaro took office, has been proceeding slowly, but it picked up pace again in the last weeks of December and is likely to keep causing trouble for the president. Queiroz has evaded testifying; Flávio denies all wrongdoing; and Bolsonaro has oscillated between washing his hands of the case, saying it does not concern him, and lashing out at journalists who question him about it. Another of Bolsonaro’s sons, Carlos, faces investigations for the use of phantom employees in his municipal councillor office.  

Such cases do taint Bolsonaro’s reputation, and erode the trust and confidence of those supporters for whom the anti-corruption agenda is paramount. However, Bolsonaro for the moment maintains their support. Caio Barbosa, a PhD candidate at the Universidade de São Paulo (USP) who is researching the new Right and Bolsonaro voters, notes that while Moro remains in government on the one hand, and in the absence of any viable alternative to Bolsonaro on the other, the president’s supporters will make excuses for his mistakes and failings, and continue to stand by him.

The judiciary

Brazil’s supreme court (STF), which is responsible for upholding the constitution as well as for putting high-level public officials on trial for white-collar crimes, has been frequently accused of taking on an overly political role in recent years. Such criticisms flared up again this year, notably in June, after the STF suspended a number of presidential decrees relating to indigenous rights and firearms legislation. 

Relations between the executive and the judiciary have been tense at times, and the STF was a target of criticisms during pro-Bolsonaro demonstrations in May, with some of the president’s more radical supporters calling for the court to be shut down (congress, also seen as impeding Bolsonaro’s work at the time, was targeted too). Bolsonaro condemned these attacks.

He is due to appoint two new justices to the STF before the end of his term, one by the end of this year as the court’s dean, José Celso de Mello, will reach the compulsory retirement age of 75 in November. Bolsonaro previously floated the idea of appointing Moro to the STF, although he has more recently expressed a preference for a “terribly evangelical” justice. He is also due to appoint a judge to the supreme court of justice (STJ) and the high military court (STM) before the end of 2020.   

Colombia’s President Iván Duque has long been keen to insist that his criticisms of the country’s transitional justice system (JEP) are based not on ideological opposition to the notion of transitional justice, but rather on his belief that the JEP is not properly equipped to lead this process. Recent attempts by the ruling right-wing Centro Democrático (CD) to float the idea of repealing the JEP were met by a wave of criticism – the International Criminal Court (ICC) notably described the JEP as a model example of transitional justice, a “benchmark for the world”. On 28 November Duque came forward with an alternative suggestion, which could serve to secure the contested future of the JEP.

Duque proposed that the United Nations (UN) peace verification mission in Colombia step in to support the application of criminal sanctions to those found to have committed crimes as part of the country’s armed conflict. “When we speak of justice”, Duque said, “we are talking about effective justice, involving criminal sanctions”, and he called for the JEP to do more to ensure that punishments are applied and upheld, “so that Colombians maintain confidence” in the peace process. Duque has long been critical of the 2016 peace agreement between the Colombian government and the Fuerzas Armadas Revolucionarias de Colombia (Farc) guerrilla group which established the JEP, and that he claims prevents demobilised guerrillas from facing justice [WR-20-40].

And yet, Duque’s critics contend that the JEP should also be allowed to deliver justice for the crimes of the Colombian state. NGO Defendamos la Paz sent its own letter to the UN last week, calling for the Security Council to put pressure on the government to support judicial investigations into paramilitary groups, especially regarding alleged ties between these groups and the Colombian armed forces, especially under former president Álvaro Uribe (2002-2010), a close ally of Duque [WR-20-31].

On 26 November the military had submitted a report to Colombia’s truth commission regarding its alleged historic ties to paramilitary groups. The report acknowledged the military’s role in the formation of the ‘self defence groups’ that would become paramilitary organisations, but it rejected evidence presented by peace campaigners that this relationship persisted at least into the 2000s. On 2 December, groups representing the victims of the armed conflict led a protest outside the JEP in Bogotá, calling for former general Mario Montoya to be excluded from the transitional justice process, in order to face criminal charges for crimes against humanity.

Victims of conflict

Colombia’s national centre for historical memory (CNMH) published a new report on 30 November, offering detailed statistics on the victims of conflict in the country, between 1958 and October 2020. The report registered 357,108 violent crimes during this period, leaving 416,808 direct victims, including 265,505 deaths. The figures also reflect concerns that violence is escalating once again, claiming that 64 people have been killed in massacres so far this year, up from 42 in 2018 and 23 in 2019.

The background

Mexico’s constitution dates back to 1917, born amid the upheavals of the revolution, with the first version drafted by a constituent convention gathered at Santiago de Querétaro. It was one of the first constitutions in the world to set out social rights, including the right to a secular education. It restricted the activity of the Catholic Church and sought to enable land reform. Over more than a century the basic 1917 text has been frequently amended and modified by congress. In the 1990s President Carlos Salinas de Gortari (1988-1994) amended article 27 to strengthen private property rights and allow the privatisation of ejidos (communally owned farming lands). President Enrique Peña Nieto (2012-2018) also pushed through an energy reform which ended the state oil and gas monopoly, part of an attempt to attract new investment.

Unlike the centre-right policy positions taken by Salinas de Gortari and Peña Nieto, Andrés Manuel López Obrador (2018-2024) and his successor, Claudia Sheinbaum (who began a six-year presidential term in 2024) were both of the left, members of a nationalist party known as Morena (Movimiento de Renovación Nacional). AMLO, as López Obrador is known, defined the Morena government as being part of a desired “fourth transformation” of the country (the earlier three being independence from Spain, 19^th century political reform, and the revolution at the start of the 20^th century). AMLO portrayed himself as an outsider, opposed to what he described as an entrenched and corrupt political establishment.

What happened?

In February 2024 AMLO announced a package of 20 reforms to be undertaken at the tail-end of his presidency and in the early days of that of his successor Sheinbaum, who had ensured a strong degree of continuity by winning the June 2024 presidential elections. Key among them was a major constitutional change to permit the direct election of judges, making Mexico the first country in the world to propose that all its judges and magistrates be elected. The change was justified, the president said, because it would be more democratic and would help remove members of the old conservative establishment embedded within the judiciary. AMLO’s proposals came at the tail end of his six-year presidency when the courts, including the supreme court, had issued injunctions halting some government initiatives in the energy sector as being unconstitutional.

The bulk of the reforms were rushed through congress between 1 September and 1 October of that year. The significance of these dates is that effective from 1 September the new congress had been sworn in, reflecting the narrowly won two-thirds majority obtained by Morena and its allies in the June elections. That gave the outgoing government a “window” in which to approve most of the reforms before AMLO officially handed power to Sheinbaum on 1 October. The opposition claimed the government had rushed the reforms through with insufficient debate as well as using strong-arm tactics, threatening an opposition senator with criminal charges to encourage him to change sides and deliver the necessary two-thirds majority for the reform.

Under the terms of the reform around 1,600 federal judges, including those on the supreme court, are to be replaced with directly elected successors from lists of candidates pre-selected by congress. Supreme court membership will be reduced from 11 to nine years. Ordinary judges will serve renewable nine-year terms. A new elected Judicial Disciplinary Tribunal, whose decisions are unappealable, will have the power to replace judges. Judges’ salaries will be linked to, but will not be allowed to exceed, the salary of the president. In addition to these changes, a total of seven autonomous regulating bodies, including the National Electoral Institute (Instituto Nacional Electoral – INE) are to be closed, with their functions absorbed by government.

Criticism of the judicial reform has been widespread. The then-US ambassador, Ken Salazar, was outspoken, saying “I believe popular direct elections of judges is a major risk in the functioning of Mexico’s democracy”, and adding “direct elections would also make it easier for cartels and other bad actors to take advantage of politically motivated and inexperienced judges.” AMLO retorted that such comments were “disrespectful” to Mexico.

Civil society organisations say the reforms are a setback for democratic checks and balances. They open up the possibility of outright authoritarian rule, since Morena currently controls the presidency, congress (where with its allied parties it has a two-thirds majority) and potentially, the judiciary after the elections of judges scheduled in two phases, in 2025 and 2027. Various business groupings, including the Consejo Coordinador Empresarial (CCE) and the Confederación Patronal de la República Mexicana (Coparmex), have called on the government to reconsider the reforms, particularly those relating to the elimination of the autonomous regulatory agencies. Ratings agency Fitch said, “we believe these reforms [will], overall, negatively affect Mexico’s institutional profile”, although it added that it was still too early to measure their severity.

AMLO was quick to shrug off these warnings, describing them as a form of “politicking”. The outgoing president said a downgrade of Mexico’s credit rating, if it came, would have very little effect since Mexico’s debt levels are low and foreign currency reserves are high. Currently, Mexican public debt stands at 47.6% of GDP.

Looking forward

Reform of the judiciary and other constitutional amendments carries serious risks for Mexico’s system of democratic checks and balances. In what could be described as more normal times, Mexico would come under sustained pressure from its two North American partners, Canada and the US, to make concessions to protect the independence and non-partisan role of judges. All three countries are members of the USMCA trade treaty, which includes commitments to an independent judiciary. USMCA, key to massive trade flows and “nearshoring”, is up for review and renewal in 2026.

However, these are not normal times. The new Donald Trump presidency in the US, Mexico’s northern neighbour, has placed top priority on increasing border security, reversing the flow of undocumented migrants, and tackling drug cartels and border crime. Bilateral relations have become increasingly uncertain, with Trump threatening to impose extra tariffs on Mexican goods (something that would also violate the USMCA treaty). Unlike his Democratic Party predecessors, Trump appears to have little interest in strengthening Mexican democracy. This, together with the current weakness of the political opposition, means that the reform of the judiciary is unlikely to be seriously challenged. However, if some of the risks materialise, for example if some of the new judges are poorly qualified, corrupt or clearly linked to the drug trafficking cartels, then President Sheinbaum may have to step in. After the 2027 mid-term congressional elections, for example, Morena may lose its two-thirds congressional majority, opening the possibility of reviewing and correcting the way judges are appointed.

Rule of Law in Latin America and the Caribbean

Source: WJP Rule of Law Index 2024 Regional Ranking