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Pope Francis will visit Mexico from 12 to 17 February this year, just a few months after the pontiff returned from his trip to the US and Cuba. The pope’s itinerary is revealing. It is carefully thought out so that he can show his solidarity with the poor and marginalized, including migrants and indigenous people. Perhaps the most eye-catching destination is Ciudad Juárez, Chihuahua, where he will perform mass on the border with the US. President Enrique Peña Nieto immediately tweeted that Mexico was “ready and very enthusiastic” about the Pope’s visit which could also serve to get relations with the Vatican City back on track after the unprecedented diplomatic spat last February when the pontiff’s private remarks to an Argentine friend about drug trafficking entered the public domain.

This is the fourth trip to Latin America by Pope Francis. It follows pastoral visits to Rio de Janeiro in July 2013 (Brazil has the largest population of baptized Catholics ahead of Mexico), Ecuador, Bolivia and Paraguay in July 2015, and Cuba (and the US) in September 2015.

Pope Francis will arrive in Mexico City (DF) on 12 February. The next day will be taken up with official activities, such as a meeting with Mexico’s bishops and giving mass in the Guadalupe basilica to mark the feast day of the patron saint of Mexico and the Americas, Our Lady of Guadalupe. The tourism minister for the Mexico City government (GDF), Miguel Torruco, confidently asserted that the pope’s two-day presence in the area on 12 and 13 February would create a US$50m windfall for the capital from an influx of tourists.

After his stay in the DF, the pope will visit four states - Estado de México, Chiapas, Michoacán and Chihuahua. The first stop, on 14 February, will be the municipality of Ecatepec de Morelos in the Estado de México where the pope will perform mass and visit social welfare projects. The city contains the newest Catholic cathedral in Mexico.

The following day, 15 February, the pope will travel down to the poor southernmost state of Chiapas, where he will meet families in the state capital, Tuxtla Gutiérrez. Chiapas, which borders Guatemala, is the crossing point for hundreds of thousands of mainly Central American migrants carrying out their hazardous passage to the US year-after-year.

The pope will then deliver mass with indigenous communities in San Cristóbal de las Casas, the ‘cultural capital’ of Chiapas and the second-largest city in the state. The city is also the heartland of the insurgent Ejército Zapatista de Liberación Nacional (EZLN), which shot to prominence with its armed rebellion in January 1994.

But there are other reasons for the pope’s decision to visit the area than merely expressing solidarity with the indigenous and the poor and downtrodden – in keeping with the emphasis that his pontificate has placed on social justice. Only 58% of the population of Chiapas defined themselves as Catholic in a census carried out by the national statistics institute (Inegi) in 2010. Evangelical groups have gained ground in the state just as they have been encroaching on traditional Catholic strongholds in Central America in recent years.

Overall, some 84% of Mexicans define themselves as Catholic despite the years of antagonism between the Church and the Mexican Revolution. It was only in September 1992 that President Carlos Salinas de Gortari re-established diplomatic relations with the Vatican, which had been formally severed by the Mexican government 125 years previously in 1867.

Diplomatic spat

On 16 February the pope will visit Morelia, the capital of the western state of Michoacán, which has been at the epicentre of the federal government’s struggles against organized crime. This is a delicate issue and it would be fair to say that the federal government will be following the pope’s words on drug-related violence in Mexico very closely indeed.

The Mexican foreign ministry (SRE) sent the country’s first-ever diplomatic note of protest to the Holy See on 23 February last year. The SRE expressed consternation at a private sentiment expressed in an email written two days earlier by Pope Francis that subsequently became public. In the correspondence, the pope let an Argentine friend know that he hoped that the Argentine government would respond to the advance of drug trafficking in his native country “in time to avoid Mexicanization” (see sidebar).

The pope’s visit will culminate on 17 February in Ciudad Juárez in the northern state of Chihuahua, from where he will fly back to Rome. The pope will perform mass at the Benito Juárez stadium which has a capacity of 220,000. He is certain to address the issue of migrants. Bishop Mark Seitz of El Paso, just across the shared border, said he was in conversation about “celebrating Mass with Pope Francis at the border…which will include the faithful on both sides of the border”.

• Diplomatic spat

The then-Foreign Minister, José Antonio Meade Kuribreña, summoned the papal nuncio in Mexico, Christopher Pierre, to complain about the “stigmatizing of Mexico” last February after the pope’s comments became public, and requested that he relay this message to the Vatican. Meade said the protest note was merely “a mechanism for dialogue” but he seemed very intent on setting the Vatican straight. He said that it would be more fitting for the Vatican “to look for better focuses, dialogue and recognition of Mexico’s huge effort and great commitment to confront drug trafficking” which, he stressed, was “a shared issue”.

The coordinator of the opposition Movimiento Democrático Nicaragüense (MDN), Carlos Bonilla, and his wife Gabriela García, were set upon last week by five assailants outside their home in Managua. Both Bonilla and García have been active in promoting civil-society demands for free and fair elections in Nicaragua, which are slated for November 2016.

On the morning of 26 February, Bonilla and García had planned to protest in front of Nicaragua’s supreme electoral court (CSE), the state institution responsible for organising, directing, and supervising elections in Nicaragua. In October 2015, the MDN began a survey regarding public perceptions of the CSE and the upcoming elections. On 25 February, Bonilla spoke on the television programme ‘Esta Noche’ where he announced his plans to release the survey results the following morning at the CSE’s headquarters.

The details of the attacks have sparked suspicion about the possible involvement of President Daniel Ortega’s government in the incident. According to witness reports cited in the Nicaraguan daily La Prensa, five unknown men attacked Bonilla and García with knives as they attempted to enter a taxi a few blocks from their home. The assailants did not attempt to rob the couple, but grabbed the documents that they were carrying, which included the survey results. Bonilla suffered stab wounds to his abdomen and head, while García experienced less serious head wounds. García told La Prensa on 28 February, the incident was a “failed murder” not perpetrated by robbers but by “directed paramilitaries”. For his part, Bonilla told the local press from his hospital bed that he would not abandon his cause because it is a “conviction” and “for [his] country”.

The attacks have been widely condemned. On 26 February, the US Ambassador to Nicaragua, Laura Dogu, “strongly” denounced the incident through her Twitter account and urged the police to investigate. In press releases published the same day, the opposition Partido Liberal Independiente (PLI) and the Nicaraguan centre for human rights (Cenidh) repudiated and condemned the attacks and demanded a full police investigation.

Garcَía says eyewitnesses in her neighbourhood told her that two of the attackers had been captured and turned into the police, but no information on the matter has been released. She promised that the MDN would not be cowed and would publish the survey results. La Prensa, which received the survey data ahead of its planned release on 26 February, said the MDN found that the vast majority of Nicaraguans are displeased with the management of the CSE (see sidebar).

Opposition politicians and civil-society organisations regularly criticise the CSE for its lack of plurality. Bonilla and other activists began the Wednesday protests (‘miércoles de protesta’) where they have consistently demanded CSE transparency and free elections. On 18 February the national assembly elected Mayra Salinas Uriarte and Norma Moreno Silva as CSE magistrates for the next five years. Both candidates were submitted by President Ortega and have deep ties to the ruling Frente Sandinista de Liberación Nacional (FSLN).

Norma Moreno Silva, the sister of the FSLN political secretary in the mayoralty of Managua, Fidel Moreno, had previously served as Nicaragua’s ambassador to Argentina and Paraguay. Mayra Salinas Uriarte had been the co-director of the institute of culture since August 2015, and before that president of Nicaragua’s tourism office (Intur). Moreno and Salinas replaced former FSLN magistrates Johnny Tórrez and José Luis Villavicencio who resigned in January, citing a desire to open CSE positions to female representation. The opposition argues that the CSE will remain under FSLN control regardless of female representation.

• Public view of CSE

According to La Prensa, of 9,204 people consulted, 81.7% expressed distrust in the institution and 93.22% favoured national and international observation of the upcoming elections. In the last general election of November 2011, the FSLN won 62 seats in the legislature (compared to 38 in 2006), the PLI won 26 and the Partido Liberal Constitucionalista (PLC) won two.

On 18 March, Jamaica’s Prime Minister Andrew Holness announced that a second district was to be subject to special security measures, the St Catherine North Police Division. This follows the earlier imposition of the same measures in St James Parish, which includes the tourist resort of Montego Bay, on 19 January.

The reasons behind the special measures for St Catherine’s were explained by Acting Police Commissioner Clifford Blake as being a rise in the use of firearms, increased drug trafficking, and the activities in particular of the Clansmen Gang.

The murder rate in St Catherine’s provides the headline evidence for Commissioner Blake’s assertions. At the time of announcing the increased security measures, there had been 48 murders in the area so far this year, up from 30 in the same period in 2017. The total number of murders for the area in 2017 was 136; at the time the new security measures were announced the police were predicting that there could be more than 300 this year unless something was done.

For Jamaica as a whole, there were 1,616 murders in 2017, the highest figure for six years and a 20% increase on 2016. The highest number of murders was recorded in St James, where there were 335 murders, followed by Clarendon with 168 and Westmoreland with 147. St Catherine North was next with 136 murders.

Announcing the new measures, the prime minister said: “The security forces will have extraordinary powers, and some rights will be suspended. This does not mean that the use of these extraordinary powers can be arbitrary or are beyond review. The security forces are expected and have been directed to treat citizens with respect and to protect the dignity and safety of all Jamaican citizens.”

The measures include a curfew and a rigorous ‘stop and search’ policy, and joint police and army patrols will be deployed on highways.

The decision to impose the new measures may have been motivated by the spike in violent crime, but it will have been encouraged by the evidence of success of similar measures in neighbouring St James.

In early March, the police reported that between the imposition of the Enhanced Security Measures on 18 January and end-February, a total of 916 people had been arrested. Of these, 65 were charged with offences, and 24 remain in custody. Announcing these figures on 6 March, Deputy Superintendent Ainsley McCarthy said that there had been a noticeable decrease in gang activity and the “parish has been returning to normal”.

On one point, however, the government is likely to be less pleased. Originally the new security measures imposed on St James were referred to as a ‘State of Emergency’. It didn’t take the government long to realise this was not the most positive message to be putting out about a key tourist destination, and more recently officials have been referring to ‘Enhanced Security Measures’. Unfortunately, the message doesn’t seem to have registered. Almost all the headlines about the new measures for St Catherine North referred to the imposition of another ‘State of Emergency’.

President Luis Abinader declared three days of national mourning in the Dominican Republic on 6 June after the environment minister, Orlando Jorge Mera, was shot dead by a childhood friend in his own office. Abinader said the crime had shaken Dominican society and instilled in him a conviction that more must be done to campaign against violence and gun crime.

Jorge Mera was in his office at the environment ministry on 6 June when Miguel Cruz, a childhood friend, later described by witnesses as “agitated”, paid him a visit. After a brief altercation, Cruz pulled out a pistol and shot the minister seven times before fleeing the scene via a rear staircase. He went straight to a nearby church, Iglesia Jesucristo Sumo Sacerdote, in Santo Domingo, where he confessed to having just shot somebody to a priest to whom he handed over his pistol. Shortly afterwards police officers arrived and he turned himself in.

The motive for the murder is unclear. Cruz had recently undergone open heart surgery and was suffering from depression. Local media, however, reported that Cruz, the owner of two companies, Armería Miguel Gun Shop and Constructora Cruz de la Mota y Asociados, had recently been forced to halt an operation to extract raw materials for his cement plant from a river in the northern Cibao region for failing to satisfy environmental requirements, which prompted him to confront the minister.

“I think the world has to reflect. This must change, the only thing that violence leaves behind is more violence and more tragedy,” President Abinader said during a mass for Jorge Mera held in the presidential palace on 7 June. Abinader said violence in the Dominican Republic was responsible for “sickening society”.

Abinader has taken some action since taking office. He launched an operation to crack down on drug trafficking, organised crime, and corruption in September 2021 after surveys revealed that violent crime and insecurity were top of the list of public concerns. But the public perception of violence and insecurity is yet to improve. A survey conducted by local NGO Participación Ciudadana and Transparency International in February in 12 municipalities in the country found that 95% of respondents were fearful of crime, 59% had stopped going out at night, and 56% lacked confidence in the police.

Jorge Mera

President Abinader was a close friend of Jorge Mera with whom he co-founded the Partido Revolucionario Moderno (PRM) eight years ago, breaking away from the traditional Partido Revolucionario Dominicano (PRD) – for which the late environment minister’s father, Salvador Jorge Blanco, won the presidency in 1982 – and ending the 16-year hegemony of the Partido de la Liberación Dominicana (PLD) in 2020. 

In an extended interview with Granma, Cuba’s state-controlled newspaper, published in late March, Energy and Mines Minister Vicente de la O Levy explained what is being done to restore power supply across the island. He was careful not to promise any quick solutions.

The power cuts seem relentless. There were major power outages in February, March, October, and December last year. This year stoppages have continued. On 1 and 2 May, for example up to half the population had no electricity, with an overall demand-supply gap of 1,400MW. These cuts were caused because various of the country’s eight ageing thermoelectric generators had to be taken out of service for emergency repairs and because of fuel shortages.

The energy minister’s comments are unlikely to have instilled confidence. He said the recovery of the power grid (SEN) was “on schedule” and that a “positive outcome of everything planned…will soon be seen”. Critics say this is typical of official rhetoric, long on intentions but short on specifics.

The minister did say, however, that the government is committed to increasing the share of renewable energy in electricity generation to 24% by 2030.  Various new solar parks are reportedly close to completion, as repairs to the thermoelectric generators progress. The minister said this did not mean an end to the power cuts. He described the situation as “a gradual, costly, investment-intensive process for which we can see light at the end of the tunnel”.

De la O Levy made it clear the crisis could drag on. Or even worsen. In normal times, to maintain the SEN in operation, he pointed out that annual investments of US$250m-US$350m are required.  As he put it “if you don’t provide those resources for a year you can’t recover them; and it has been more than a year”. Fuel oil supplies, which must be imported, and paid for in scarce US dollars, are also uncertain although there are efforts to boost domestic production (Cuba produces around 40,000 bpd, or one third of its consumption).  

The government of President Ollanta Humala is mulling over a radical departure from conventional drug war strategies. “Coca eradication is a failed policy,” the prime minister, Salomón Lerner, said last week. Instead, he said, the government was evaluating whether to pay small farmers, or campesinos, not to grow coca.

The Humala administration excited controversy in mid August by briefly suspending coca eradication in the Alto Huallaga in order to redesign Peru’s counter-narcotics policies [WR-11-34]. Part of the redesign appears to be taking shape. Lerner said the government had a budget of NS$15m (US$5.4m) for coca eradication for the rest of the year - money which he implied would be better spent paying coca growers to start cultivating alternative crops such as cacao and coffee.

Lerner was adamant that coca eradication was futile. In the last two decades he said it had cost almost US$4.2m per hectare eradicated. He said the government was calculating how much it would cost over the next three or four years to pay coca growers not to produce coca. Lerner claimed that the US applied a similar policy regarding cotton harvesting. He said the government was planning to roll out a pilot plan to apply to some 1,000-1,500 hectares in the Apurímac and Ene river valleys (Vrae), the main centre of coca production.

Previous governments have tried alternative crop strategies but, despite a modicum of success in San Martín, they have largely foundered on the fact that nothing either grows as well or is as profitable as coca. There are also obvious moral problems with paying people not to do something that is illegal. It could easily become a bidding war, with drug gangs simply paying campesinos a bit more money to plant coca than the government is offering them not to grow it.

• Drug-trafficking

Prime Minister Lerner, like President Humala before him, underlined the government’s absolute commitment to fighting drug-trafficking, by improving financial intelligence to investigate potential criminal activity in the banking and insurance system; destroying maceration pits; and cracking down on precursor chemicals, such as kerosene, used in the production of cocaine. He said 80 illegal petrol stations, informal pumps, in the Vrae, also selling precursor chemicals, would be closed.

Last Wednesday (12 October) despite Chinese objections, India and Vietnam signed an agreement to promote oil exploration in the South China Sea.  In a reminder that actions speak louder than words, the deal was signed only a day after Vietnam and China had signed their own agreement on basic principles guiding “the settlement of sea-related issues”, which they pledged to solve “through friendly talks and negotiations”.

he India-Vietnam deal was signed in New Delhi by Vietnam’s President Truong Tan Sang and India’s Prime Minister Manmohan Singh.  The Indian prime minister said: “India and Vietnam are maritime neighbours.  We face common security challenges from terrorism, piracy, and natural disasters.  We believe that it is important to ensure the safety and security of vital sea lanes of communication.”

China says that Indian exploration projects in Vietnamese blocks in the South China Sea are in areas claimed by China.  Last month, an editorial in the ruling Communist Party’s Global Times called the joint-exploration “a serious political provocation” and said “China should try every means possible to stop this cooperation from happening.”  It accused India of “seeking influence akin to US in the region”.

Meanwhile, on India’s other flank, Pakistan is continuing to grumble about the Strategic Partnership signed the week before between India and Afghanistan.  Pakistan is justifiably worried that Indian involvement in Afghanistan will boost the Northern Alliance at the expense of the Pakistan-supported Taleban and that India will deepen its involvement with the Afghan military.  As Pakistan’s army chief General Kayani put it some while ago: “Strategically, we cannot have an army on the western border which has an Indian mindset.”

But now Pakistan is trying to get Beijing to see the India-Afghan partnership as a significant strategic setback for China as well as for Pakistan.  Islamabad is telling Beijing that a purpose of the India-Afghan accord is to exclude China from the development of Afghanistan, including from the exploitation of oil and mineral resources.

This Pakistani recourse to China when faced with an external challenge is beginning to be a familiar pattern.  In the main briefing in our 28 September issue we looked at how Pakistan has turned to China to help it resist US pressure over its support for militant groups in Aghanistan.

President Cristina Fernández sought to assuage fears about Argentina’s economy with these words. Fernández told Argentines that while the economy was not at its best it was far from collapsing, a fear that had been fuelled by the government’s recent economic announcements. At a different event a day later she said that “Some understand that competitiveness is reached by decreasing salaries or paying fewer taxes. Now we have to start fine-tuning and analyse inflation, subsidies and profits”. This was the first time in almost four years in power that Fernández mentioned inflation directly and recognised it as a problem that needs addressing, a move that was welcomed by traditional (and newly acquired) supporters and critics alike.

Last week’s announcement that some high-income households and about 40 large companies in the hydrocarbons sector and the agrochemical industry would lose the subsidies they receive on their utility bills had been largely welcomed across the political spectrum; many in the opposition had long argued that the generalised system of subsidies benefits the rich much more than it does the poor, who may not have access to the services subsidised or, if they do, consume much less energy than high-income families. The move also signalled that the government was serious about its intended push for fiscal retrenchment [WR-11-44], even though that term is not part of the Kirchnerista vocabulary.

Julio de Vido and Amado Boudou, the planning and economy ministers respectively, explained in an auditorium full of government officials that the residents of Buenos Aires City (Caba) would be the first affected by the subsidy removals, as 53% of all utility subsidies go to the residents of the capital - and also because the “geographical GDP per capita of the federal capital is US$35,000 per year, while in the rest of the country it is US$9,000”, Boudou stated.

From 1 January 2012, residents of the Caba neighbourhoods of Puerto Madero and Barrio Parque (which includes swanky Palermo and Recoleta), in addition to residents of all the so-called ‘country clubs’ (gated communities), will no longer be eligible for subsidised utility bills. Eventually, the financial situation of all households in the country will be assessed and those deemed capable of footing unsubsidised bills will have to do so. A system for those who want to give up their subsidies voluntarily was also set up this week (see sidebar).

The key word: inflation

Without a doubt, the president’s mention of inflation by its name, rather than using the preferred “tension of prices” description, could be more effective at soothing troubled waters than any currency exchange or subsidy changes the administration has announced. Although Fernández did not go as far as to say that the official inflation figures reported by the national statistics institute (Indec) are inaccurate, by recognising that there is a problem she also implied that she would try to find a solution. That in itself is a positive message and one that could help the government address the entrenched high level of inflationary expectations.

Fernández is due to swear in for her second mandate on 10 December and unlike most two-term leaders, her performance (and her approval ratings) may be better the second time round than in the first. Arguably, the next term could be seen as the ‘real’ Fernández administration since her late husband and predecessor, Néstor Kirchner (2003-2007), was thought to be pulling the strings behind the scenes of her first government until his sudden death in October 2010.

In the ‘real’ Fernández administration, which secured a strong mandate recently [WR-11-43], the general confederation of labour (CGT), the largest national union, which is led by Hugo Moyano, the controversial head of the truckers’ union, will have to play by her rules and no-one else’s (see box below).

Renewed tensions with the Caba and the CGT

Tensions with Hugo Moyano appear to have been heightened on purpose and are aimed at dislodging him as CGT secretary general in the July 2012 election. This week President Fernández stated that she did not support a bill proposed by Moyano and introduced to the congress by Deputy Héctor Recalde, of the ruling Frente para la Victoria (FPV), which calls for companies to share profits with workers.

“Is the compañero secretary general of the CGT here? He isn’t? He’s left? Well, in any case we see his message to the executive in the papers every day,” Fernández said, making her most acerbic remark about him to date before the Union of Argentine Industrialists, the very people who would have to share profits and who oppose the bill. With the political opposition in tatters and the Peronist party under her control, Fernández now has the necessary political capital to sideline Moyano, arguably the only figure still capable of challenging the government.

Though Fernández and the Caba’s opposition mayor, Mauricio Macri, had appeared to ease tensions following their respective re-election victories, they were back on a collision course over the federal government’s decision to pass control of the city’s underground system (announced on 2 November) to the local government on 1 December.

The federal government has committed to completing upgrades for lines A & E, but said it would not disburse funds (promised in 2005) for other upgrade works. That meant that Macri would be left a poisoned chalice, facing the politically unsavoury decision of having to raise ticket prices on the metro.

By way of a compromise, the federal government then offered to foot the bill for 50% of the metro subsidies for the first year – amounting to US$81.6m - but the Macri administration rejected that proposal on Monday. The federal transport minister, Juan Pablo Schiavi, then said that he would turn to the judiciary in order to oblige the Caba to take control of the underground system.

• President is first in line

“Fernandéz, Cristina Elisabet” was the first consumer to opt out of the subsidies online, followed by “De Vido, Julio Miguel” and “Boudou, Amado” on 23 November. The rest of the national cabinet, senior ministerial officials and the directors of state-run companies quickly followed suit. Thereafter, the city’s opposition mayor, Mauricio Macri, jumped on the bandwagon and publicly declared that he had ordered his cabinet to do the same. Due to a glitch in the system, Fernandéz’s deceased husband, Néstor Kichner, was temporarily one of the 4,545 users who voluntarily renounced subsidies for their water, gas and electricity bills.

ARGENTINA | El gobierno ordena a los mineros que compren equipo nacional. El gobierno de Argentina ha ordenado esta semana a las compañías mineras que operan en el país, que establezcan un ‘departamento de sustitución de importaciones’ a fin de promover la compra de equipamientos producidos por firmas argentinas.

En su última medida que apunta a proteger su industria nacional, el gobierno anunció en la gaceta oficial que la secretaría de minería (parte del ministerio de planeamiento) ha resuelto que desde ahora en adelante “todas las firmas deberán tener su propio departamento de sustitución de importaciones, para que así la maquinaria, equipamiento y partes, y servicios y otros aportes sean proveídos por compañías nacionales”. Además, la resolución agrega que las compañías mineras “deberán presentar sus pedidos programados de productos con 120 días de anticipación” para que los mismos puedan ser analizados por el recientemente creado grupo de trabajo de evaluación técnica de la minería que estará a cargo de aprobarlos.

De acuerdo con lo expresado en la gaceta oficial, la resolución responde a la idea que “es necesario implementar acciones que refuercen la economía bajo decididas  políticas de inclusión social que buscan preservar los empleos, crear nuevas oportunidades de trabajo y profundizar el proceso de sustitución de importaciones”. El año pasado las inversiones mineras en Argentina llegaron a un récord de US$2,54bn. Lo más importante es que eso fue acompañado con un récord en la actividad de exploración que invirtió US$133m.

Después de la nacionalización de la principal compañía petrolera de Argentina, YPF, el gobierno liderado por Cristina Fernández ha señalado que su próximo objetivo es abordar lo que percibe que es una carencia de control en el sector minero que continúa disfrutando de beneficios fiscales; esto es, probablemente, sólo el comienzo de más medidas que apuntan a la reforma de este sector.

ARGENTINA-CHILE | InvertirOnline toma el control de FIT. El 28 de mayo, la firma operadora de la bolsa de inversiones y finanzas, InvertirOnline, anunció que había adquirido una participación de control en la empresa chilena FIT Corredores de Bolsa. De acuerdo con una declaración de InvertirOnline, la compañía, que ya tiene una participación de 10% en FIT, dijo que ahora había asegurado una participación del 51% en la compañía chilena por un monto no revelado. FIT es una de las principales operadoras de bolsa de Chile, con 5.000 clientes y el año pasado administró activos por un valor de US$2bn.

El presidente de InvertirOnline, Facundo Garretón, dijo que la adquisición era parte del “agresivo programa de expansión regional” de la compañía y que continuarán buscando otras oportunidades en otros mercados regionales. Desde su fundación en el año 2000, InvertirOnline ha establecido operaciones en Argentina, Uruguay, Colombia, y Chile, permitiendo a sus clientes comprar y vender acciones y bonos online en los mercados financieros en todos esos países latinoamericanos y en EU.

BRASIL | Bancos privados reducen sus pronósticos de crecimiento. El último sondeo del banco central de Brasil entre economistas privados, difundido el 28 de mayo encontró que el consenso es por un crecimiento económico para finales de año de entre 2,99% y 3,09%. Este es la tercera revisión hacia la baja de los pronósticos de crecimiento de los economistas privados; pero esta es la primera vez que el pronóstico ha sido reducido a menos del 3%.

El sondeo siguió a la difusión por el banco central, el 18 de mayo, de las cifras de crecimiento del primer trimestre, que mostró que la economía creció sólo en un marginal 0,15%, comparado con igual periodo del año previo.

El pronóstico del sector privado es ahora mucho menor que el del gobierno (4,5%); y el del banco central (3,5%). El ministerio de finanzas ha reconocido que el crecimiento económico en el primer trimestre estaba bastante por debajo de sus proyecciones, pero dijo que el recientemente introducido paquete de estímulos que apunta a incrementar el consumo interno, ayudará a frenar la declinación de la economía.

Incidentalmente, de acuerdo con el sondeo del banco central, los economistas ahora creen que el banco reducirá la tasa de interés de referencia Selic, de 9,5% a una baja sin precedentes de 8% antes de fin de año, si continúa adhiriéndose a la política del gobierno de reducir las tasas de interés estructuralmente altas de Brasil. Del lado positivo para el gobierno, los analistas locales también han ajustado hacia abajo sus pronósticos de inflación para el año a 5,17%, llevándolo más cerca de la meta del banco central de 4,5%.

The Rousseff administration is shifting its emphasis away from consumer stimulus measures towards efforts to tackle Brazil’s very costly business operating environment, known as ‘Custo Brasil’.

On 6 September President Dilma Rousseff announced a package to cut electricity rates in Brazil by up to 28%, starting next year. President Rousseff made the announcement in a nationally televised address to mark Brazil’s Independence Day (7 September). On average, residential electricity tariffs will fall 16.2% from 2013, while business rates will fall by up to 28%.  The president also pressed the local financial sector to pass on lower interest rates to consumers and investors.

Brazilian industry pays an average electricity rate of R$330 (US$162) per mega-watt hour, the fourth highest in the world after Italy, Turkey and the Czech Republic, according to the national industry confederation (CNI). The local business sector welcomed the news with open arms. The association of heavy industrial energy users and free consumers (Abrace) described the decision as “historic” and “signaling a new cycle of development in the country on the basis of structural measures that privilege competitiveness”.

The Rousseff government made the announcement amid talks with local energy operators about renewing contracts due to expire in 2015. The government argues that energy costs can fall under the new contracts, as initial investments have now been amortized.

On 30 August President Rousseff issued a decree allowing regulators to seize operating licenses from power utilities failing to meet their contractual requirements fast enough. A day later the energy regulator, Aneel, voted to intervene in eight units of the debt stricken power company, Grupo Rede Energia (see sidebar). The government insisted that it has no interest in breaking contracts or nationalising the sector, but the message was clear enough.

The national transport regulator also announced big reductions (of 25%-30%) in rail freight rates, the first in 15 years under a new revision of the sector. The changes will affect 11 railway concession operators.

Critics are still concerned about the level of official intervention in the domestic economy; on 4 September Finance Minister Guido Mantega temporarily lifted import tariffs on 100 industrial items in a bid to protect local industry.

Import duties on a range of items including iron pipes, petrochemicals, tyres and glass, were increased to 25% in most cases, up from the high teens previously, for a one year period. The industry and external trade minister, Fernando Pimentel, denied that the move was protectionist, noting that the import tariff ceiling under World Trade Organization rules is 35%.  The risk is that such protectionist measures will end up hindering rather than supporting local industry, not least by raising input costs.

Brazil’s index of industrial production (IP) rose for the second consecutive month in July (0.3% month-on-month), the first back-to-back increase in over a year, sparking hopes that the array of official stimulus measures are finally feeding through.  However industrial output was still down a sharp 3.7% year-on-year in the first seven months of 2012.

• Rede Energia

The regulators move to take control of Rede Energia is the biggest ever state intervention in the sector. Aneel immediately takes control of Bragantina, Caiuá, Celtins, Cemat, CFLO, Enersul, Nacional and Vale Paranapanema, all of which are suffering serious financial and operational problems. (Another company, Celpa, was not included in the intervention because it filed for bankruptcy protection last February). Aneel’s president, Nelson Hubner, said in a press conference that the regulator had given the companies 60 days to come up with a restructuring plan.

The passing of a reform to the military justice law in December aroused strong objections from human rights activists, international organisations, and leftwing legislators. This month, the constitutional court agreed to a request to examine the constitutionality of the new law, following a request by a handful of congressional deputies and NGOs. The reform is widely considered a gesture by President Juan Manuel Santos toward the military top brass, whose support is critical in the peace talks currently under way with the Fuerzas Armadas Revolucionarias de Colombia (Farc) in Cuba.

The reform creates a special court comprising four civilians and four retired military officers to decide jurisdictional disputes among civilian and military justice systems. It stipulates that military courts can under no circumstances try cases of crimes against humanity or violations of international humanitarian law, including forced disappearance, sexual violence, torture, forced dislocation and extra-judicial executions. However, human rights activists warn that given that ‘extra-judicial execution’ is not a crime typified in the legal code, hundreds of cases of extra-judicial executions could be transferred from civilian to military courts.

The key text in the amendment which has stoked much of the controversy refers to the crime of extrajudicial execution as being when “the public servant […] in the exercise of his duties, kills someone who he has control over who is in a position of absolute helplessness”. Other points of contention include absolving the soldier of penal consequences when the crime is the result of an error; or in a case of legitimate defence, or when he is following a superior’s orders. This final mitigating argument has already come under scrutiny from the constitutional court, which, in previous judgements has not permitted this argument as a defence. Other concerns include the scope the new law would allow the Colombian military for crime-fighting. In essence the new law would allow the army to bomb criminal organisations. “Illegal armed groups” would be considered legitimate targets, with the key factor under consideration being their capacity to inflict damage.

The request was sent to the constitutional court on 19 February by Deputies Iván Cepeda, Germán Navas (both of the Polo Democrático Alternativo), Ángela María Robledo (Partido Verde) and Guillermo Rivera (Partido Liberal), as well as two legal scholars and the committee in solidarity with political prisoners NGO. The text of the request argued that “the widening of the military justice law constitutes a risk to a country at war like Colombia, in which impunity has reached high levels and where thousands of young people have been victims of military actions. […] This reform clearly incorporates unconstitutional elements and puts us in the eye of the storm of international human rights’ organisations".

When the senate approved the amendment in December 2012, organisations such as Human Rights Watch (HRW), the Inter-American Commission on Human Rights (ComisiónIDH) and the United Nations High Commissioner for Human Rights (OHCHR) openly rejected the law; HRW director for the Americas, José Miguel Vivanco, called it "an unnecessary and premeditated blow to human rights".

• “El Tuso” released

Former paramilitary drug lord “El Tuso,” who went on record to testify against former President Alvaro Uribe (2002-2010) for paramilitary ties, has been released from a US federal prison. “El Tuso”, whose real name is Juan Carlos Sierra Ramírez, was released from prison on 14 March, according to records kept by the US Federal Bureau of Prisons, even though his release date was set for 2016. “El Tuso” was extradited on 13 May 2008, together with a number of other leaders of the paramilitary group, the Autodefensas Unidas de Colombia.

• Water protests

A demonstration in Yopal, Colombia on 18 March turned violent, as residents took to the streets to protest about a lack of clean water in the city. The town of Yopal is located in the eastern department of Casanare. Its 140,000 residents have been without running water for 22 months, after a landslide in May 2011 caused the collapse of the town's water treatment plant.

The ratings agency Standard & Poor’s (S&P) has warned that it might consider downgrading Brazil’s credit rating if the government decides to implement a massive public spending programme at a time when its fiscal performance is faltering.

With the government led by President Dilma Rousseff making a host of investment promises in response to the latest public protests, and the publicly discredited congress falling over itself to show willing, there is a big question as to how to fund all these promises. Three new bills on transport, health and education dashed through congress in response to the protests will cost the federal government R$115bn (US$52.8bn) a year alone if approved, the business daily Valor estimated.

S&P, which on 6 June lowered its outlook on Brazil’s "BBB" investment grade rating to negative, issued its latest comment on 2 July. Sebastian Briozzo, S&P’s lead analyst for Brazil, stressed a further downgrade could come “if there is a greater sense of intervention in the public sector, which will increase debt levels.” “There is very limited room to maneuver [sic] on the fiscal side,” he noted.

Briozzo said S&P had revised Brazil’s outlook to negative on “some signs of potential use of fiscal policy in a way that is not consistent with the current rating.” He stressed that S&P does not see any governability issues arising from the recent protests. Indeed, as a result it expects a stronger emphasis on structural reforms, but it’s concerned about the cost of meeting the protesters’ demands for better public services. “Before these events happened, the strategy was that private investment had to take the lead, but there was no sense of urgency…These demonstrations have shaken the status quo, and there could be a new sense of urgency. How it translates into action, we’ll have to see.”

Finance Minister Guido Mantega insisted on 27 June that green shoots were apparent in the struggling economy. Tellingly, he refused to put a figure on growth, saying only: “We’re working with numbers based on the budget estimates. We have strong growth in investment in agriculture. Industry is recovering and services are showing a reasonable behaviour, growing at moderate rates. We are getting over the international difficulties and certainly we will have more growth this year than last”. Latest industrial production figures seem to contradict that (see sidebar).

Officially, the treasury is working on the basis of real annual GDP growth of 3.5% this year; its next revision is coming up. The original 2013 budget was based on real GDP growth of 4.5%. On the fiscal side, tax revenues for the first five months amounted to R$458.3bn, up 0.77% over the same period of last year in real (inflation-adjusted) terms.

However, that take is not enough for the treasury to meet its annual budget surplus targets for 2013. The target is a public-sector primary surplus of about 2.3% of GDP. The 12-month surplus as of April was R$86bn, or 1.9% of GDP. Revenues are lagging on slower growth and also due to the cumulative effects of the slew of official tax breaks for producers and consumers put in place by the Rousseff team.

Mantega insisted that spending would be cut if necessary to reach the target, a brave pledge that may not square with political expediencies ahead of the October 2014 general election.

• Forecasts dip again

Industrial production fell more than expected in May, prompting private economists revise down their annual growth forecasts to below 2.0%. The index fell 2.0% month-on-month in May over April. It rose 1.4% year-on-year over May 2012 and 1.7% in the first five months of 2013. Positively, capital goods output, the key indicator of manufacturing sentiment, was up 12.5% year-on-year over May 2012 and rose 13.3% overall in the first five months. However analysts revising down their forecasts are also taking into account the impact of higher interest rates on producers and consumers, sticky inflation (exacerbated by a weaker Real), and the economic disruption caused by the June protests.

President Juan Carlos Varela is keen to be seen to be moving on the now familiar pledge made by new presidents - to end institutional corruption. This problem appears to have worsened under his predecessor, former President Ricardo Martinelli (2009-2014). Since Varela’s Partido Panameñista (PPA)-led administration took office on 1 July, the 71-member unicameral legislature has approved a resolution calling for the supreme court of justice (CSJ) to remove Comptroller General Gioconda Torres de Bianchini, a close Martinelli ally. Meanwhile, an anti-corruption prosecutor, Lorena Coronel, has announced a probe into the Programa de Ayuda Nacional (PAN), a government fund, while a case has also been opened into a former Martinelli minister.

The move against Torres, whose four-year term is due to end in December 2014, followed her appearance before the legislature on 19- 20 August, where she was called to testify in relation to various corruption concerns surrounding the previous administration. Torres, who served as auditor for Martinelli’s company Importadora Ricamar for 15 years prior to taking up her current post, was quizzed on various cases, including that involving the contracts awarded in 2010 to Finmeccanica, Italy’s state-run aerospace and defence conglomerate, for the purchase of radars, helicopters and digital mapping services. The case had caused major embarrassment for the Martinelli administration, following the April 2012 arrest of Valter Lavitola, a former aide to the disgraced former Italian prime minister, Silvio Berlusconi [RC-12-05]. Five days before Torres’ first appearance before congress, Coronel announced that the investigation into the case (which had been shelved under Martinelli) would be reopened.

Coronel has also announced a probe into the PAN, a government fund used for various initiatives aimed at improving disaster mitigation efforts, nutrition and housing among other things. The investigation into the PAN, which critics have long suggested is a slush fund used to buy political loyalty, is in line with a complaint lodged before the attorney general’s office by a PPA legislator, José Luis Varela (the president’s brother). The complaint is against Rafael Guardia, who headed up the PAN under Martinelli, and it alleges crimes relating to public administration. According to local media, the investigation will probe various contracts awarded to companies, including those linked to Heriberto Vega, a former legislative candidate for Martinelli’s Cambio Democrático. On 5 September, the economy & finance ministry (MEF) announced that it had contracted a local company, Rogers Forensic Auditors, to do the audit, a process expected to take six months. The PAN’s new director, Rafael Stanziola, has said the final report will be made public.

Meanwhile, the first corruption-related case has been opened into a former Martinelli minister. On 19 September, a prosecutor sent a case to the CSJ involving alleged irregular expenses incurred by the former labour minister Alma Cortés during a trip to an International Labour Organization (ILO) meeting in Switzerland in 2011.

The Varela government itself has moved quickly to stamp out accusations of nepotism, after two such cases emerged. While the 2004 code of ethics for civil servants prohibits nepotism, civil society groups were quick to complain about the fact that Minister of the Presidency Álvaro Alemán hired his nephew (Jaime Alemán) as an advisor, while Interior Minister Milton Henríquez appointed his sister-in-law (Florita Ciniglio) to an administrative post in his ministry. In the face of mounting criticism from various sectors, including First Lady Lorena Castillo de Varela, the relatives stepped down - Alemán on 31 August and Ciniglio on 2 September.

• Falling competitiveness & corruption rankings

The most recent Global Competitiveness report by the World Economic Forum, released on 3 September, noted that “Panama continues to follow Chile in the regional rankings and once again scores as the most competitive economy in Central America; it is among the top 50 in the world, despite a fall of eight places to 48th position”. The WEF attributes Panama’s drop to “a slight deterioration in the perceived functioning of institutions (74th), most notably in terms of their inability to fight corruption (94th) and raise government efficiency (55th)”. The latest (December 2013) report by the NGO Transparency International noted that Panama had registered the biggest decline in Central America in 2013, dropping 19 places in its Corruption Perceptions Index to finish in 102nd place (of 175 countries), down from 83rd place in 2012.

*** GUYANA WAITS ON. Guyana’s Prime Minister Donald Ramotar prorogued (suspended) parliament on 10 November, and he was widely expected to announce the date of the general election in his New Year’s address.  But this has not happened, and criticism has been mounting, not least from the United Kingdom, about the end to the uncertainty.

On 12 January, the UK’s high commissioner in Georgetown, Andrew Ayre, said: “There is discussion about ‘countries of concern’ in the Commonwealth every few months…Guyana is moving into the category of concern for the Commonwealth.”  The general secretary of the ruling Peoples Progressive Party/Civic (PPP/C), Clement Rohee, responded tartly, saying: “This country has had its independence from Britain since 1966; we don’t have to listen to what Britain says.”

Guyana’s Foreign Minister Carolyn Rodriguez-Birkett added: “President Ramotar did not commit an illegality.  He acted in keeping with the constitution and has already set a date for election which will be announced shortly.”

The cause of the problem is that in November 2011, the PPP/C won its fifth consecutive election, but only partially.  Its 48.6% of the vote was sufficient to secure the presidency, and hence to form the government, but it only secured the PPP/C 32 seats in the 65-seat National Assembly.  The opposition alliance – A Partnership for National Unity (APNU) – gained 33 seats, with the People’s National Congress (PNC) winning 26 and the Alliance for Change (AFC) winning seven. This was the first time that the PPP/C had lost its parliamentary majority in 19 years.  The consequence was that important legislation such as the Anti Money Laundering and Countering of the Financing of Terrorism (AML/CFT) has been held up in parliament.

Under the constitution, the president can prorogue parliament for six months, so theoretically Ramotar could use this six months to negotiate a new modus Vivendi with the opposition, recall parliament, and soldier on until the end of his five-year term in November 2016.  At the moment, however, everything points to an early election.

In his New Year’s address, Ramotar said that what was needed was a “clear mandate”.  He said: “A clear mandate will be needed.  Given political conditions, I anticipate that my Guyanese brothers and sisters will be called upon in the near future to exercise the choice that will be so critical to determining the path our country will follow in years to come…With an opposition that has displayed a remarkable anti-development tendency it is important that we regain the majority in the National Assembly to ensure continued social and economic progress.”

*** TAIWAN COMES TO GRENADA’S AID. During the first week of January, it was announced that Taiwan and Grenada had reached agreement to restructure Grenada’s US$36.6m debt to the Export-Import Bank of Taiwan.  The agreement reduces the principal on the loan by 50%, with the reduced balance repayable over 15 years after a grace period of three and a half years.  The interest rate is to be 7%.

*** FOURTH TERM FOR DOMINICA’S SKERRIT. On 8 December, Prime Minister Roosevelt Skerrit won a fourth consecutive term for his Dominica Labour Party (DLP) and a third term for his premiership.  The DLP won 15 of the 21 seats, with the United Workers Party (UWP) picking up six seats.  The UWP result was disappointing for its leader Lennox Linton, but it did double the miserly score of just three seats that it secured in the 2009 election.  Linton was hardly gracious in defeat, saying that the election had been won by intimidation and bribery.

El Salvador appeared to be on the brink of a public-sector payments default for much of October, as the ruling left-wing Frente Farabundo Martí para la Liberación Nacional (FLMN) government ran out of money and the right-wing Alianza Republicana Nacionalista (ARENA), which has the largest number of seats in congress, refused to authorise further borrowing. The two parties have been trying to agree a fiscal responsibility pact; much of the fiscal problem is due to large unfunded pension liabilities.

Operating in a dollarised economy, El Salvador’s government cannot simply print money to cover its fiscal deficit. The deficit stood at 3.4% of GDP last year and, according to the IMF, will widen to 5.5% of GDP over the next five years unless something is done to bring it under control. The problem is that the government has been borrowing to cover the deficit, mainly through treasury bonds (known as Letras de Tesorería, or Letes), but it has already exceeded its borrowing limits. The government wants to issue US$1.2bn worth of international bonds to repay Letes and meet other commitments, but ARENA has been refusing the necessary congressional authorisation. Officials warned there could be a default in the first week of October, but just managed to avoid it. Hopes for breaking the deadlock rest on the FMLN and ARENA reaching agreement on a fiscal responsibility pact that would balance tax increases (favoured by the FMLN) with spending cuts (sought by ARENA).

Pensions deficit

Whatever the solution, pensions form a large part of the problem. According to Jonathan Menkos of the Instituto Centroamericano de Estudios Fiscales (Icefi), over the last seven years the pensions system has been responsible for about half the total fiscal deficit. This is despite the fact that a pension reform was implemented almost 20 years ago (in 1998) in an attempt to avoid excessive growth in liabilities. The reform introduced private defined contribution (DC) pensions that were supposed to exist alongside and alleviate some of the pressures on the state-owned defined benefit (DB) system.

However, this did not happen, for various reasons. One is that both systems suffered inadequate asset returns and the government committed itself to guarantee pension benefits and regularly top up pension funds. According to Icefi, the special fund created to top up the system by issuing debt, known as the Fideicomiso de Obligaciones Previsionales (FOP), had debts of US$3.48bn, or 13.5% of GDP, by the end of 2015.

According to the IMF’s Article IV consultation paper on El Salvador published in July, “The pension deficit is currently about 2% of GDP and will rise substantially in the next decade without policy change.” Unfunded pension liabilities were estimated to have risen to almost 100% of GDP in net present value terms. In addition, coverage, participation and contribution payments are low, and funds have poor asset diversification. Only about one in four Salvadoreans have pension coverage. Financial returns are low, partly because the private pension funds are forced to buy government bonds, which pay low rates (although a recent decision by the constitutional court has forced the government to offer better rates).

A new pension reform proposal presented by the government in February this year would buy some time, in the IMF’s opinion, but would fall short of securing the long-term sustainability of the system. The proposal would reduce some recent increases in pension benefits, partially transfer some private pensions back into the public sector, and introduce a new flat pension scheme for low-income contributors. However, it would not significantly reduce total unfunded pension liabilities.

The IMF’s conclusion is that there is no alternative to what it calls “parametric” reforms of the system – meaning politically unpopular changes like increasing the retirement age and raising the contribution rate. Currently, the retirement age is 60 for men and 55 for women; both must have made 25 years of contributions to qualify for a minimum pension. However, it is not clear whether such unpopular measures to reduce the pensions deficit will be contemplated within any forthcoming FMLN-ARENA agreement on a fiscal responsibility pact.

In December 2017, the European Union (EU) published a list of ‘non-cooperative tax jurisdictions’. The list includes 17 countries, including four from the English-speaking Caribbean, namely Barbados, Grenada, St Lucia, and Trinidad & Tobago. A further eight Caribbean jurisdictions were given an extension until “early 2018” to respond to the EU’s concerns on the grounds that they were still recovering from the effects of hurricane damage sustained in the summer of 2017. These were Antigua & Barbuda, Anguilla, Bahamas, British Virgin Islands, Dominica, St Kitts & Nevis, Turks & Caicos, and the US Virgin Islands.

In all, 92 countries were chosen for ‘screening’ by the EU. Of those, 20 were given the all-clear while 72 were asked to address deficiencies. Of the 72, 47 countries committed to improve transparency, to stop harmful practices, to “introduce substance requirements”, and to implement Organisation for Economic Co-operation and Development (OECD) specified Base Erosion and Profit Sharing (BEPS) minimum standards; the eight ‘Hurricane Countries’ were given more time; and 17 were put on the blacklist.

In the Caribbean, Curaçao and Jamaica committed to improving transparency standards; Belize, Curaçao, and St Vincent & the Grenadines to improve fair taxation; Bermuda and the Cayman Islands committed to introduce substance requirements; and Aruba and St Vincent & the Grenadines committed to apply OECD BEPS measures.

On the question of ‘fair taxation’, the EU noted: “Those [countries] that choose to have no or zero-rated corporate taxation should ensure that this does not encourage artificial offshore structures without real economic activity.”

With regard to sanctions, an EU statement explained that the list will be linked to EU funding, which cannot now be channelled through entities in the listed countries. Only direct investment, that is the funding of projects on the ground, will be allowed. Other sanctions will include stricter reporting requirements for multinationals with activities in the listed jurisdictions. The European Commission has said that it will also be encouraging member states “to agree on coordinated sanctions to apply at national level against the listed jurisdictions”.

In its statement of 5 December, the EU added: “A country will be removed from the list once it has addressed the issues of concern for the EU and has brought its tax system fully into line with the required good governance criteria.”

The government of Grenada has said that it expects to be removed from the list by the end of January as its inclusion was based on a technical point, namely that it had not clearly committed to complying with certain criteria by 31 December 2018. Grenada says that it has made the necessary commitments and that the reason it had not committed to the end-2018 date in writing was because “a timeline was not in the Code of Conduct request”. However, according to the finance ministry, Grenada had made “high level commitments, complete with timelines, to the EU Code of Conduct group by way of letters on November 17 and 28, 2017”.

The EU list of ‘non-cooperative tax jurisdictions’ is different from its anti-money laundering (AML) list. For countries on the AML list, banks have to apply higher due diligence controls on financial flows towards these countries. The two lists have different objectives and apply different criteria. Nonetheless, according to the EU, “the two lists will complement each other in ensuring double protection for the Single Market against external good governance risks”.

BOLIVIA | New airport. Bolivia’s President Evo Morales opened a new US$28.6m international airport last week in the town of San Ignacio de Velasco, located near the Brazilian border in the eastern department of Santa Cruz. The primary aim of the new airport is to drive tourism to the nearby Jesuit missions, some of the best preserved in the Americas and a United Nations Educational, Scientific and Cultural Organization (Unesco) World Heritage site, but Morales also hopes that it will attract passengers flying to the US and Europe.

The 2,750m runway will be used by state-run carrier, Boliviana de Aviación (Boa), as well as local private companies such as Amaszona. Following its inauguration, the San Ignacio de Velasco airport is now open for daytime flights, with capacity for night flights to be added by the end of the year, making Santa Cruz the first department in Bolivia to boast three international airports.

• Electric cars

Peru’s energy & mining ministry (MEM) has announced its intention to encourage the use of hybrid and electric vehicles in the country via a bill that will be put to the national congress in the next few months. While there are already tax breaks in place for drivers of these vehicles, other incentives such as flexible financing may also be introduced.

Copper production and export earnings look set to increase this year, despite worries over China and the state of the global economy.

Cochilco, the Chilean copper commission, is maintaining a modestly optimistic outlook for production and exports of the metal this year. In January it said it is expecting the international price to rise to US$3.05/lb in 2019, and to US$3.08/lb in 2020. These prices were unchanged on Cochilco’s November 2018 projections. They represent an advance of around 4.8% on the US$2.92/lb average achieved last year. Mining minister Baldo Prokurica said US-China trade tensions were holding prices back in the short term (copper was trading at around US$2.74/lb in mid-January). Uncertainty over Brexit (UK withdrawal from the European Union) might also cause volatility.

However, Cochilco was optimistic that there would be a “positive signal” in relations between the two economic superpowers that would ultimately prove beneficial for global demand of the metal in 2019. The commission expected total production in Chile to rise by 1.6% this year, to 5.941m tonnes, thereby positioning Chile for increased copper export values. Last year (2018), copper exports totalled US$36.495bn. Prices this year would be helped by a 2.5% increase in copper demand from China and by a 10% increase from India. Global demand for copper would increase by 2.4%.

In Chile, both short- and long-term production prospects are reasonably good. Last year’s output growth reflected recovery at the giant Escondida mine (the world’s largest, majority-owned by BHP-Billiton), which had suffered a 44-day strike in 2017, along with growth at Collahuasi (controlled by Anglo American and Glencore). In contrast, output at state owned Codelco dropped marginally during the course of the year. A separate Cochilco report brought encouraging news for the industry. It said total production could increase by nearly 30% in the next ten years to over 7m tonnes. The report acknowledged that output from existing mines will drop by nearly one-fifth due to falling ore grades. However, it argues that according to existing plans for additional capacity and the development of new mines will more than offset this effect.

Although, strictly speaking, no country in Central America has a media monopoly in the sense of a single corporation owning all media outlets, concentration remains high. Moreover, major outlets continue to be owned by oligarchies – typically wealthy landowning elites that made their fortune during the region’s coffee boom – or by powerful Mexican media mogul Ángel González, who has been repeatedly accused of funding election campaigns throughout the region and using his media empire to squeeze out opposition voices. Media concentration in Central America continues to reduce the range of news, information, and perspectives available to citizens and thus remains one of the greatest challenges for the region’s fledgling democracies. Although new digital media outlets are increasingly challenging the power of the mainstream media, illiteracy and low Internet penetration rates continue to limit their influence.

Guatemala: González media empire funds election campaigns

For the past four decades, Guatemala has exemplified Mexican media mogul Ángel González’s political influence in Central America. The Albavisión broadcasting network, owned by González’s wife, Alba Elvira Lorenzana, controls four major television stations: El Super Canal, Televisiete, Teleonce and Trecevisión, as well as the Radio Sonora radio station.

González has a strong influence on Guatemalan politics, giving US$650,000 to the 1985 presidential campaign of former president Vinicio Cerezo (1986-1991), as well as more than US$2.6m and free airtime to former president Alfonso Portillo (2000-2004)’s 1999 campaign, according to a 2001 study by Rick Rockwell and Noreene Janus, entitled ‘Stifling Dissent: the fallout from a Mexican media invasion of Central America’.

And in June 2016, the González media empire’s influence on Guatemalan politics once again came under debate after Interpol issued an international arrest warrant for Lorenzana on charges that she took part in an illegal campaign finance scheme. The United Nations-backed International Commission Against Impunity in Guatemala (Cicig) accuses Lorenzana of funnelling US$23m to former president Otto Pérez Molina’s (2012-2015) Partido Patriota (PP) in exchange for favouring Albavisión’s television stations with 69% of the government’s advertising from January 2012 to April 2015. Rockwell and Janus conclude that González’s ownership practices in Guatemala and Nicaragua “create an atmosphere that undercuts the development of democracy”.

Guatemala has seven daily newspapers: Diario de Centroamérica, the official government gazette, and six newspapers controlled by two family groups. Print media are dominated by the Prensa Libre and Nuestro Diario newspapers, which account for over 80% of the country’s readership. The group is owned by the Sandoval, Girón de Blank, and Zarco families, with Edgar Contreras Molina, Jorge Springmuhl Samayoa, and Gonzalo Marroquín Godoy, the current editor of Prensa Libre, as minority shareholders. A second media conglomerate, Corporación de Noticias, which owned Siglo Veintiuno and Al Día newspapers, collapsed in 2017, after a Cicig investigation exposed that former vice president Roxana Baldetti (2012-2015), who was jailed for 15 years on corruption charges in October 2018, had become a majority shareholder in order to secure a favourable coverage of the Pérez Molina administration.

The ownership of Guatemalan radio frequencies is also highly concentrated, and the market is monopolised by the Alius conglomerate, owned by Eduardo Liu, Central de Radios, which owns Radio Sonora, Grupo A, owned by the Archila Marroquín family, and the Nuevo Mundo group. Grupo A also owns the Canal Antigua and Antigua Sports cable television channels, Publinews, a free newspaper, the Diario Digital digital news site, and Contrapoder magazine. A prominent member of the Archila clan which owns Grupo A, Erick Archila Dehesa, who served as energy & mining minister under the Pérez Molina administration, is wanted by Interpol on corruption charges.

Nicaragua: Ortega government attacks the media

Nicaraguan television and radio stations are run by a duopoly: President Daniel Ortega, First Lady Rosario Murillo (Vice President since 2017), and their family on the one hand, and the Ratensa Group, owned by Angel González on the other. According to an investigation published by Nicaraguan daily newspaper La Prensa, in 2007, shortly after Ortega’s re-election, Murillo spent millions of dollars of Venezuelan aid on buying one media outlet after another.

Today, the Ortega-Murillo clan owns TV channels 4, 8, 9 and 13, as well as Radio Ya, Radio Nicaragua and Radio Sandino, state broadcaster Channel 6, and online news service El 19 Digital.

The Ratensa Group owns channels 10 and 4 with 12 as an affiliate. Following the González empire’s usual strategy, based on aligning its editorial line in each country with the interests of the incumbent government, Ratensa had a close relationship with the Ortega government and as of May 2018, all of its stations were run by Ortega’s sons and daughters.

Nicaragua’s main newspapers have come under attack from the Ortega government (which since April 2018 has been carrying out a crackdown on anti-Ortega protesters) and has ordered customs to withhold imports of paper and ink in retaliation for critical coverage since September 2018, forcing them to reduce their page count and change their format. La Prensa, Nicaragua’s oldest and most widely read newspaper generally supports free-market, liberal economics and is largely pro-US.

El Nuevo Diario, Nicaragua’s second-largest daily newspaper, had been critical of the Ortega government until it was bought by the Promerica Financial Corporation in 2011. Promerica is the majority shareholder of commercial banks in nine countries of Central America, the Caribbean and South America, including Banpro, Nicaragua’s largest bank. Under Promerica’s ownership, El Nuevo Diario toed the official line, until Ortega’s onslaught on press freedom made such a stance unsustainable. “There was a very strong alliance between Ortega and the country’s main business groups and during their honeymoon period, congress passed almost 80 pro-business laws. However, this alliance has fallen apart, and the owners of El Nuevo Diario can no longer support a regime that has lost legitimacy and credibility,” says Alfonso Malespín, a media studies professor at the Universidad Centroamericana (UCA).

Costa Rica: media responds to corporate interests

The González media empire’s tentacles have also spread to Costa Rica. The Repretel group, which belongs to Ángel González, controls an important percentage of the country’s radio stations as well as television channels 4, 6, and 11, while the Picado Cozza family owns the Teletica Canal 7 and Canal 33 television channels, which account for 55.4% of the country’s viewers, as well as cable channels Cable Tica and Cable Color.

The Costa Rican press is controlled by a media conglomerate that owns La Nación, the country’s most widely read newspaper, Al Día and La Teja, both tabloids, El Financiero, a business weekly, as well as a number of magazines. Another important daily, La República, is owned by a Canada-based consortium.

Javier Córdoba, chief editor of Semanario Universidad, an independent weekly, explains that there has been a long-standing alliance between La Nación and Teletica. “Anything that is published by La Nación is also published by Teletica and vice-versa, and Teletica presenter Ignacio Santos hosts a programme with Armando González from La Nación,” says Córdoba. “Media concentration imposes a well-coordinated agenda between different media outlets that responds to corporate interests. For instance, in 2007, when Costa Rica held a referendum on the free trade agreement with the US, the media clearly favoured the ‘yes’ vote.”

El Salvador: former president arrested on corruption charges controls broadcaster

The Salvadoran media is in the hands of large landowning families with huge political and economic clout. El Salvador’s most widely read newspaper, La Prensa Gráfica, is owned by the Dutriz family, which also owns several cable TV and printing companies, as well as the J. Zaldívar y Asociados law firm, while El Diario de Hoy, another widely read daily newspaper, is owned by the Altamirano family, which has strong ties to the right-wing Alianza Republicana Nacionalista (Arena) party that brought disgraced former president Elías Antonio Saca (2004-2009) to power in 2004 (Saca would leave the party five years later to found the breakaway Gran Alianza por la Unidad Nacional [Gana] party).

In September 2018, Saca, who also owns the Grupo Samix radio conglomerate, was jailed for ten years on corruption charges. Saca has been accused of using Grupo Samix to launder the proceeds of various corruption schemes and the radio stations were among the businesses that were confiscated during the course of the investigation.

El Salvador’s main TV stations (channels 2, 4, and 6) are controlled by the Telecorporación Salvadoreña conglomerate, which also owns the Vox FM and Radio Qué Buena radio stations.

Willian Carballo, a media studies professor at the Universidad Centroamericana (UCA), explains that media concentration has seriously hampered Salvadoran democracy. “Democracy requires more than having political parties and elections. One of the cornerstones of democracy is having well-informed voters and citizens can’t be well-informed as long as the media is controlled by a handful of individuals who only publish what’s in the interests of the elite,” says Carballo.

Honduras: media controlled by oligarchies

Most of the country’s TV and radio stations are controlled by the Villeda Toledo, Ferrari, and Sikaffy families (the former owns the Grupo Televicentro media conglomerate), while the Honduran press is controlled by three families: Rosenthal, Canahuati, and Flores.

The Rosenthal family, owners of El Tiempo newspaper, as well as the Canal 11 and Cable Color TV channels, also owned the Banco Continental banking group, the national airport, the Grupo Cementero del Norte cement producer, sugarcane and coffee plantations, the Cervecería Hondureña beer company, the Marathon football team, insurance and telecommunications companies, and a meat exporting business. In 2014, Forbes magazine estimated that the clan’s wealth totalled US$550m.

Jaime Rosenthal, one of the clan’s most prominent members, was a founding member of the Partido Liberal, which brought former president Manuel Zelaya (2006-2009) to power. Although Zelaya, who was ousted by a coup in 2009, was critical of media concentration in Honduras, he failed to acknowledge his own ties to the Rosenthal clan (Yani Rosenthal served as Minister for the Presidency under the Zelaya administration in 2006-2007).

El Tiempo, regarded as Honduras’ most credible newspaper, suffered as a result of the Rosenthal clan’s downfall in 2015, when several of its members were arrested on money laundering charges and most of the clan’s assets were expropriated by the state. Today, only the online version of El Tiempo survives, and is run, on a shoestring, by a small team of journalists who belonged to the paper’s original newsroom.

The Canahuati family, which own La Prensa and El Heraldo newspapers, as well as Diez, a sports publication, and a number of cable TV channels, also owns the country’s main bottling plants, pharmaceutical companies and fast food franchises such as Pizza Hut and KFC. The Flores clan, of which former president Carlos Roberto Flores (1998-2002) was a prominent member, owns La Tribuna newspaper as well as a cable TV channel.

La Prensa, El Heraldo, and La Tribuna are conservative and pro-business and their political coverage has consistently favoured the status quo. “If a bill contrary to business interests – a pro-nationalisation or anti-free market law – is proposed in congress, the media starts to campaign against it,” says journalist Manuel Torres Calderón, co-author of the book ‘Poderes Fácticos y Sistema Político en Honduras’ (‘Factic Powers and the Honduran Political System’).

He adds, that when covering issues such as immigration, the Honduran media systematically protects the status quo by failing to address underlying social and political issues such as poverty, inequality and the concentration of wealth. “Honduras is a very divided and conflictive country, but you’d never guess that by glancing at the country’s newspapers and TV channels,” says Torres.

Torres explains that the 2009 coup had a negative impact on the credibility of the Honduran press, which, with the exception of El Tiempo, staunchly supported Zelaya’s ousting. “Honduran society realised that the Honduran media’s stance in favour of the coup was too arbitrary, and this had an impact on its credibility. In the aftermath of the coup, Honduras never managed to develop an independent press that would give a voice to the opposition,” says Torres.

Panama: Martinelli attempts to control the media

As occurs throughout Central America, the Panamanian media is largely controlled by the country’s oligarchy. “The development of the Panamanian economy has been strongly linked to a small group of families (…). The media is no exception. In fact, most media outlets belong to these families,” writes researcher Rolando Rodriguez in a 2009 report published by the Trust for the Americas and Instituto Prensa y Sociedad.

The print media is controlled by three publishers: La Prensa, which publishes a daily newspaper of the same name, Geomedia, which publishes El Siglo and La Estrella newspapers, and Grupo Epasa. Former president Ricardo Martinelli (2009-2014), who was arrested in the US on corruption and illegal wiretapping charges and extradited to Panama in June 2018, became a major shareholder of the TVN television network, and his family owns the Grupo Epasa conglomerate, which publishes Panamá América, Crítica, and Día a Día newspapers.

An article published by La Prensa newspaper in May 2013 referred to these media outlets as “parastatal media”, as “they are run by private shareholders but serve the interests of certain administrations”.