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Trabajadores de 33 sindicatos diferentes, con 22 de ellos del sector transporte, que llevó a grandes partes de Buenos Aires y otros puntos de la Argentina a un alto en las actividades el 31 de marzo, durante una huelga nacional llevada adelante, la cuarta contra la administración de la Presidenta Cristina Fernández. Participaron en la protesta tanto los sindicatos pro-gobierno como los anti-gobierno, exigiendo que la administración de Fernández eleve el actual nivel impositivo a los ingresos. El gobierno no mostró signos de prestar atención a las exigencias en las protestas, y con ese escenario, parecen probables más huelgas.

En Buenos Aires, los autobuses de corta, media, y larga distancia no operaron el 31 de marzo; tampoco lo hicieron los trenes que conectan la ciudad con la región del Gran Buenos Aires. Dos de las líneas del sistema subterráneo fueron cerradas, como también los bancos de la ciudad. Los servicios de recolección de basura fueron suspendidos y al menos 78 hospitales fueron afectados. En otras partes en Argentina, las provincias de Santa Fe y Misiones, y la ciudad de Rosario en Santa Fe fueron malamente afectadas; aunque algunas otras áreas también informaron de interrupciones en la actividad.

Liderados por Hugo Moyano, de la rama anti-gobierno de la Confederación General del Trabajo (CGT); la Central de Trabajadores de la Argentina (CTA) de Pablo Micheli, como también la rama Azul y B Lanco de la CGT, de Luis Barrionuevo, los trabajadores han estado exigiendo un incremento en el umbral del impuesto a las ganancias que, actualmente,  se estableció en Arg$15.000 (US$1.700) como también la expansión de los beneficios y concesiones para los esquemas de cuidados de salud conducidos por los sindicatos.

Incluso Antonio Caló, de la rama de la CGT que apoya al gobierno, aunque no avaló activamente la huelga, permitió que sus trabajadores participen en ella. Los huelguistas alegan que sus salarios están siendo erosionados por la combinación de inflación, que actualmente está en 25%, y los impuestos.

En una conferencia de presencia realizada en las oficinas centrales de la CGT en Buenos Aires, Moyano describió la huelga como un “éxito”, aunque rehusó expresarse sobre aquellos que tomaron parte. “Los trabajadores se han expresado hoy por sí mismos,” dijo. Y agregó, “Ellos exigen una respuesta del gobierno; nosotros esperamos una respuesta del gobierno.”

Los líderes sindicales admitieron, sin embargo, que ellos estaban considerando otra huelga de 36 horas, incluido un acto en la Plaza de Mayo, si el gobierno no respondía a sus demandas.

• Kicillof responde

Hablando un día antes de la huelga, el ministro de economía, Axel Kicillof, dijo que los  niveles actuales del impuesto a las ganancias eran “correctos”. En una conferencia de prensa el mismo día de la huelga, Kicillof cuestionó la motivación para la huelga. “El impuesto a las ganancias afecta sólo al 10% de los trabajadores, quienes son aquellos que ganan más. No afecta al 30% o el 40% o inclusive al 50% de los trabajadores. Por tanto, esta demostración de fuerza del resto de los trabajadores es realmente en solidaridad con aquellos quienes ganan más,” dijo Kicillof.

Last week, against the explicit wishes of President Dilma Rousseff, over 50 federal congressional deputies from the ruling left-wing Partido dos Trabalhadores (PT) voted in favour of a bill raising the salaries of public prosecutors and those working in the attorney-general’s office. With even members of her own party largely disregarding orders from the executive, Rousseff is increasingly looking to the senate to act as a “moderating power” in the political crisis now roiling Brasília.

The vote on one of the so-called “fiscal bombs” – effectively, spending measures which will blow up the government’s plans for austerity - was emblematic of the government’s loss of support in the federal lower chamber. A total of 445 deputies voted in favour of the constitutional amendment linking the salaries of public lawyers to those of supreme court justices; just 16 voted against and six abstained. The measure, if ratified, will cost the government R$2.4bn (US$690m) a year.

More of these bills that would increase government spending are in the pipeline. In the face of a deteriorating macroeconomic situation, the finance ministry has already slashed dramatically its plan for a 1.1% of GDP primary fiscal surplus to 0.15%. Should many of these anti-austerity measures be approved, even that more modest target may prove out of reach.

Many in the PT are openly opposed to the government’s fiscal adjustment plans, which run counter to the party’s election pledges of last year. Others in President Rousseff’s governing coalition are also uneasy. Last week, two smaller parties, the Partido Democrático Trabalhista (PDT) and the Partido Trabalhista Brasileiro (PTB) announced that from now on they would vote independently of the government. Most analysts interpreted this as a bid to gain more jobs in an anticipated cabinet shake-up. Between them, the two parties have 45 seats.

Added to this, Eduardo Cunha, the speaker of the federal lower chamber, from the nominally allied Partido do Movimento Democrático Brasileiro (PMDB) continues to use his position to make life difficult for the executive. Cunha is widely expected to face closer scrutiny in the next few phases of ‘Operation Car Wash’, the investigation into corruption at the State oil company Petrobras, and may even be suspended from his position, but he appears intent on going down fighting. Twelve impeachment requests are currently lodged with the lower chamber. Should the federal court of accounts find against the government later this month, Cunha is expected to table a bill to initiate impeachment proceedings.

Over the weekend, Rousseff determined a plan to negotiate one-on-one this week with the leaders of all of her coalition allies, in an attempt to see off further defections. Rousseff’s aides are also working on shoring up a loyal base of at least 200 congressional deputies who will block any attempt at impeachment. At least two-thirds of the 513 deputies in the federal lower chamber would need to support the motion for it to go forward.

In another tack, Rousseff is also reaching out to the federal senate, where her support base is somewhat more solid. On 10 August, she invited over 40 senators to dinner at the presidential palace Planalto and reminded them of their constitutional role as a “moderating power”. She described the “fiscal bombs” tabled by Cunha as measures “not just against the government but against Brazil”.

After months of estrangement Rousseff is also trying to charm Renan Calheiros, the senate president, who accused the government of being behind the decision to place his name on the list of serving politicians to be investigated by the attorney-general, Rodrigo Janot, over the Petrobras scandal. Calheiros has been working on a package of reforms that would help restore growth to the Brazilian economy. Rousseff has greeted the ideas with enthusiasm. But on 11 August, Cunha warned that he would not be bypassed so easily. “According to the constitution, we live in a bicameral system. […] Both houses have to work and approve bills,” he said.

• Death of a ‘Playboy’

On 8 August, Celso Pinheiro Pimenta, a drug-trafficker better known as ‘Playboy’ was shot dead by police in the Morro da Pedreira in the northern zone of the city of Rio de Janeiro. ‘Playboy’ was the most-wanted criminal in the eponymous state, with a R$50,000 (US$14,500) reward offered for information leading to his capture. Sentenced to 15 years in prison for drug-trafficking and qualified homicide, he was released from prison in Rondônia in 2009 for a seven-day compassionate leave and returned to Rio to resume his criminal activities.

Amid the worse recession since 1901, the Brazilian government’s new finance minister, Nelson Barbosa, appears to be moving away from the austerity measures that characterised the tenure of his predecessor, Joaquim Levy. On 28 January Barbosa, announced R$83bn (US$20.4bn) in extra credit from the country’s state-run banks to help various sectors of the economy. Critics in the Brazilian media argue that President Dilma Rousseff is returning to the looser fiscal policies of her first term. Last month the International Monetary Fund (IMF) forecast that Brazil’s economy would shrink by 3.5% this year, after contracting 3.8% last year.

The government plans to take at least R$32bn (US$8bn) from the workers’ pension fund known as FGTS, with R$10bn (US$2.5bn) going to housing and another R$22bn (US$5.5bn) for infrastructure projects. On top of this, there will be a further R$15bn (US$3.9bn) in credit for financing capital goods, R$10bn (US$2.5bn) for rural credit programmes and R$5bn (US$1.25bn) for the working capital of companies. At a press conference, Barbosa said the new credit measures were aimed at helping Brazilian companies ride out the recession. “There is plenty of demand for these resources,” Barbosa said. “This credit comes at no cost to the treasury. These are resources those banks already have at hand.”

Perhaps unsurprisingly, the measures were well received by some of those sectors of Brazil’s business community that stand to benefit, but there are doubts as to whether they will be sufficient to reverse the declining consumer confidence and increasing unemployment rates. “Our investments are present, the productive capacity is present,” Luiz Moan, president of the national automakers association (Anfavea) was quoted as saying by Agencia Brasil. “What we need is to once again generate consumer confidence. What halts the domestic market today is the fear of losing one’s job,” he said.

The package announced last week is the equivalent of around 1.4% of Brazil’s GDP. Some analysts argue that, at best, the measures will ward off a credit crunch but will do little to actively stimulate the economy. Speaking to the UK’s Financial Times, Neil Shearing, an economist at Capital Economists, said, “Most of the measures are aimed at easing the strain on current debtors – put differently, they are designed to stop things getting worse rather than actually stimulate additional activity.”

Demand a concern

Others argue that the problem is not credit so much as the absence of borrowers. Ricardo Balistiero, a professor of management at Brazil’s Instituto Mauá de Tecnologia, described the government’s approach as “rudimentary” and argued that fiscal measures “are the most important issue for the country today”. But he also acknowledged that the current political turmoil made further progress in that area complicated. “It is difficult to approve any project because the government has no majority,” Balistiero said.

Petrobras faces class-action lawsuit in US

In a decision made public on 2 February, a judge in the US has ordered Petrobras, the state-run Brazilian oil company, to face class-action litigation by investors seeking to recoup billions of dollars in losses stemming from a bribery and political kickback scandal.

In his decision, Judge Jed Rakoff wrote that, “Petrobras was a massive company with investors around the globe. Notwithstanding its size and its numerous and far-flung investors, the interests of the class members are aligned and the same alleged misconduct underlies their claims.”

Petrobras has been accused of inflating the value of more than US$98bn of its stock and bonds through years of corruption. Its market value has plunged to below US$20bn from nearly US$300bn fewer than eight years ago.

• Inflation predictions

On 28 January, the central bank released its latest predictions for inflation in 2016 and 2017. This year, it expects prices to rise by 6.3%, just within the target range of 4.5% plus or minus 2%. Next year, it expects prices to rise by 5%. At present, the annual rate of inflation is 10.7%.

• Unemployment

On 28 January, the national statistics institute (Ibge) released figures showing unemployment at 6.9% in Brazil’s six biggest metropolitan areas in December, the highest result for that month since 7.4% in 2007. In December 2014, the rate was 4.3%. For the full year 2015, the rate was 6.8% - two points above 2014 - and the highest rate since 2009. This is a rare combination of high unemployment and high inflation that caused average workers’ incomes to decline by -3.7% in 2015 to R$2.265 (US$561).

PERU | IDB water and sanitation proposals. On 22 August the Inter-American Development Bank (IDB) organised an event entitled ‘HidroPerú 2030’ in Lima, in which it presented some of the challenges and opportunities of extending the country’s drinking water and sanitation systems over the next 15 years. During the event, which was attended by 400 businessmen, academics, students and government officials including President Pedro Pablo Kuczynski, speakers provided information on water purification, evaluation, treatment, and access and reutilisation methods designed to help improve public access to water and sanitation.

The event was of particular relevance given that providing drinking water and sewerage services for all Peruvians was one of the main long-term objectives that Kuczynski said his government would seek to achieve during his inaugural address on 28 July, along with providing quality public education, adequate public healthcare, formalising the economy; and eradicating corruption, insecurity and crime. At the event, Kuczynski participated in a discussion with IDB president Luis Alberto Moreno, during which he said that he considered it to be “absolutely essential” that all Peruvians have access to quality potable water.

Kuczynski added that given the scarcity of fresh water he would advocate the introduction of a “good payer” system, under which consumers that meet their obligations could receive monthly discounts of 15%-20% in their water utility bills, as a way to reduce losses. He also announced the launch of a new initiative dubbed ‘blue forest’, by which the government would seek to establish afforestation strips in areas between 3,800 and 4,000 metres above sea level to attract rain as glaciers atop Peru’s mountains retreat as a result of climate change.

Other more technological solutions presented by delegates from organisations included plasma discharge water treatment and a biological waste water treatment system, all aimed at improving drinking water and sanitation in Peru. According to official figures, the proportion of Peruvian households directly connected to sewerage systems is 86%, while 88% of households have access to drinking water for 17 hours a day. However, in rural areas four out of five people lack access to adequate sanitation, while one in three (or an estimated 8m) lack access to quality potable water.

• Votes against

The spokeswoman for the left-wing Frente Amplio (FA), Marisa Glave, said she could fully understand why three deputies had refused to grant a vote of confidence to the prime minister, Fernando Zavala, and his cabinet. Glave said that as soon as Fuerza Popular (FP) had obtained the responses it wanted from Zavala et al it had curtailed the debate, preventing FA deputies from posing their own questions.

DOMINICAN REPUBLIC | Anti-corruption march. The social organisation Marcha Verde announced this week that it will stage a march on 12 August to demand justice in the corruption case involving Dominican government officials and the Brazilian construction firm Odebrecht.

Marcha Verde shot to prominence in early 2017 with a series of unprecedented marches against corruption and impunity in the Dominican Republic in relation to the case, which saw bribes totalling US$92m handed out by Odebrecht to Dominican officials to secure public works contracts between 2001 and 2014.

Marcha Verde announced the ‘March of 1m against corruption’ after the attorney general, Jean Alain Rodríguez, announced on 7 June that only seven of the 14 men originally charged with asset laundering, bribery, illicit enrichment, embezzlement, and perversion of justice in relation to the Odebrecht case, including government officials, three politicians from the long-ruling Partido de la Liberación Dominicana (PLD) and opposition politicians, would face trial after all.

• Odebrecht

The seven Dominicans who will face trial in the Odebrecht case are PLD Senator Tommy Alberto Galán, the former public works minister (2007-2012) Víctor Díaz Rúa, former senate presidents Porfirio Andrés Bautista García and Jesús Vásquez, lawyer Conrado Pittaluga Arzeno, former deputy Roberto Rodríguez Hernández of the opposition Partido Revolucionario Moderno (PRM), and businessman Ángel Rondón, who is accused by the attorney general’s office of being responsible for receiving and distributing the bribes. Those let off include Temístocles Montás, the industry and trade minister (and economy minister from 2010-2016), because of a lack of evidence, the attorney general, Jean Alain Rodríguez, said.

“Corruption has stolen the resources that we need to resolve our serious health, security, transport, education, employment, food, and energy problems,” Marcha Verde said in a statement announcing the march. The NGO denounced the “regime of corruption and impunity headed by the PLD and the government led by President Danilo Medina”. It will seek to promote the march on 8 July outside the supreme court of justice (SCJ).

As Brazil’s public health emergency is intensifying, the government has also been facing criticisms over its lagging response to the economic impacts of the coronavirus (Covid-19) pandemic. There are concerns that help for the most vulnerable is insufficient; state governors are demanding more slack from the federal government as their revenues fall; and businesses complain that credit is hard to obtain, despite measures by the central bank (BCB) to pump cash into the financial system.

BCB president Roberto Campos Neto defended its prompt announcement of measures during an online event on 4 April. Since early March, the BCB has taken steps to guarantee liquidity to the tune of R$1.2tn (US$234.2bn). These include decreasing the rate of banks’ compulsory deposits and creating credit lines not just for the banking system, but also for companies. There is, however, no guarantee that the extra cash will then rapidly reach the businesses and individuals who need it. Concerns that money is stuck in the financial system have even been voiced by Economy Minister Paulo Guedes, who signalled on 4 April that the government is working on a way to resolve this.  

The economic team led by Guedes has been facing its own share of criticisms over delays in putting into action measures which, opponents argue, are too timid and were announced too slowly in the first place. As of 2 April, the federal government had directed around R$700bn to mitigating Covid-19’s impact on Brazil’s health system and economy, of which R$224.6bn represents an extra real cost, according to figures outlined by the special finance secretary, Waldery Rodrigues. This real additional spending equates to around 3% of GDP, a negligible amount compared with the size of rescue packages announced by other governments.

The Brazilian government is expecting to lose R$5.3bn in revenue. Transfers to help shore up the finances of states and municipalities total R$16bn (although state governments are asking for more); contributions by the treasury to credit subsidies for small and medium sized enterprises (SMEs) amount to R$34bn; a universal basic income for informal and self-employed workers (dubbed the ‘coronavoucher’) will cost R$98.2bn; and a new programme to subsidise salaries, announced last week, has an estimated cost of R$51.2bn.

• States and municipalities

The federal government announced measures for states and municipalities amounting to R$88.2bn on 23 March (including credit, and the suspension of debt repayments). But a consortium of governors from Brazil’s south and south-eastern states (together representing around 70% of national GDP) appealed on 2 April to the federal government to increase its economic help, citing the sharp decline in their tax revenue. The federal congress is currently discussing a bill which would provide additional assistance; the president of the chamber of deputies, Rodrigo Maia, estimates this extra aid would cost the federal coffers R$35bn. Both Maia and Economy Minister Paulo Guedes favour the approval of existing legislative initiatives regarding the finances of states and municipalities, but these have met with opposition from lawmakers. 

Demands for measures such as those outlined in the R$51.2bn ‘emergency programme for maintaining employment’, unveiled by the economy ministry on 1 April, had been growing for days. In a move aimed at protecting jobs and livelihoods, employers are now allowed to suspend workers’ contracts, while the government has committed to paying an unemployment benefit to furloughed employees, and to topping up the salaries of those who have seen their working hours cut (and pay reduced accordingly). The labour secretary, Bruno Dalcolmo, stressed that the programme was designed to be easily and rapidly implemented by employers. 

Indeed, the execution of emergency measures has hit some logistical snags, as well as exposing the challenges faced by Brazilians who live on the margins of the formal financial system. For example, many of the people eligible to receive the R$600 coronavoucher do not have a CPF (an individual taxpayer identification number).

Public bank Caixa Econômica Federal has said it will create free digital bank accounts for individuals without a CPF to obtain their monthly benefit. Caixa president Pedro Guimarães also said that discussions on ways to assign these people a CPF are being had with the BCB. A mobile app and website were launched this week for informal workers to register for the coronavoucher, which started being distributed on 9 April to Caixa and Banco do Brasil account holders.

Balancing public health and the economy

President Jair Bolsonaro, who has spent the better part of the last month loudly criticising isolation measures while saying he wants to save jobs, lost another political battle on 6 April when Health Minister Luiz Henrique Mandetta gave reassurances that he would not be leaving his post. “A doctor doesn’t abandon their patient,” Mandetta said, putting paid to speculation that Bolsonaro was about to fire him. Pressure from the president’s military advisers was reportedly decisive in this outcome.

Yet on the very same day, the health ministry signalled a shift in its policy on isolation, more closely aligned with what Bolsonaro has been preaching and a sign that concern with the economic impact of isolation measures is growing. In its 6 April epidemiological update, it said that localities where the healthcare system remains at under 50% capacity could begin transitioning to selective social distancing from 13 April. Currently, most states in Brazil are enforcing what the federal health ministry defines as expanded social distancing – where the entire population is asked to stay at home and all non-essential activities are suspended.

For the sake of allowing the resumption of some economic activity, and gradually creating “herd immunity in a controlled manner”, the health ministry suggests the isolation of merely the most vulnerable in municipalities and states that have few cases and unburdened healthcare facilities. It is true that the outbreak is largely concentrated in a few states, and even cities.

The health ministry cites the states of São Paulo, Rio de Janeiro, Ceará, Amazonas, and the Federal District as close to crisis point. News site G1 has calculated that 20 Brazilian cities concentrate 73% of confirmed cases.

• São Paulo

The Instituto Butantan, a biological research centre, projected on 6 April that the state of São Paulo, which currently concentrates around 40% of the country’s confirmed Covid-19 cases, will see 1,300 deaths from the disease by 13 April, and 110,000 total deaths over the next six months, and that is with the current strict isolation measures. The official count of fatalities stood at 428 on 8 April. São Paulo governor João Doria has extended a state-wide lockdown until 22 April, and announced the construction of a third field hospital in the eponymous state capital.

But Brazil is still far from the peak of its outbreak. Official figures stood at 15,927 confirmed cases and 800 deaths on 8 April, but health authorities acknowledge that real figures are certainly much higher. The number of fatalities is growing fast, and there is now no doubt that the disease has spread to communities in which it will be harder to contain, and where healthcare facilities are lacking or less well-prepared.

Rio de Janeiro city confirmed six deaths in four different favelas on 8 April, the same day that the first confirmed Covid-19 case in a prison was reported, in the northern state of Pará. Despite his ministry’s new isolation policy, Mandetta continues to stress that isolation measures are the most effective way of containing the virus, and has called for debates around possible treatments and cures for coronavirus not to be politicised. 

Sourcing ventilators

The unequal distribution of intensive care beds is one concern in Brazil’s public health system (SUS), but another is the provision of ventilators. Brazil has 65,411 ventilators unevenly distributed across the country, of which around 70% are in the SUS. An estimate by the Universidade Federal do Rio de Janeiro (UFRJ) is that 20,000 ventilators will be needed to treat coronavirus patients over the next few weeks, too many for the usual national production rate of 2,000 ventilators per month to keep up.

On 8 April, Health Minister Luiz Henrique Mandetta announced that the government had signed a first contract for a value of R$322.5m (US$62.94m), for the production of 6,500 ventilators by a group of Brazilian companies, with firms such as aeroplane manufacturer Embraer, car manufacturer Fiat Chrysler, and national banks supporting firms from the medical equipment sector. Delivery of the first 2,000 ventilators is expected by the end of April.

Brazil remains heavily dependent on China for not only the provision of medical equipment, but also the pieces needed to produce it. A number of public universities across the country, including the Universidade de São Paulo (USP) and the Universidade Federal do Rio de Janeiro (UFRJ), are now working on prototypes to build ventilators at a lower cost, using pieces directly available on the Brazilian market. 

Date: 28 February.

Type: Legislative (all 84 seats in the unicameral national assembly) and municipal (all 262 mayoral seats in 14 departments).

Main contenders: Nuevas Ideas (NI); Frente Farabundo Martí para la Liberación Nacional (FMLN); Alianza Republicana Nacionalista (Arena); Gran Alianza por la Unidad Nacional (Gana); Partido de Conciliación Nacional (PCN); and Partido Demócrata Cristiano (PDC).

The end of the duopoly

President Nayib Bukele, a businessman and former FMLN mayor of San Salvador (2015-2018), won a first-round victory in the February 2019 presidential election, becoming the first candidate to break the duopoly of the right-wing Arena and left-wing FMLN since the end of the 1980-1992 internal conflict. Corruption exposed within successive Arena and FMLN governments had fuelled voter distrust of the political establishment which Bukele was able to exploit. NI was not formed in time to participate in the 2019 presidential election, so Bukele ran on the ticket of Gana, which won just 10 deputies in the last (2018) legislative election to 37 and 23 for Arena and FMLN, respectively.

The February 2021 legislative and municipal elections are expected to deliver a convincing victory for Bukele and NI. Widely considered a populist demagogue by his critics, Bukele remains popular in part due to a reduction in crime, which he attributes to his security plan ‘Control Territorial’. Police statistics cited by the government tallied 1,322 homicides in 2020, or 3.67 per day on average, down from 2,398 in 2019 which averaged 6.6 a day. Yet doubts persist as to the true causes of this reduction, and there is no doubt that the decline stems in part from measures implemented to stop the spread of the coronavirus (Covid-19) which resulted in fewer people on the streets.

• Gang dealings?

In September 2020 investigative media El Faro published an incendiary report which alleged that, since taking office in June 2019, Bukele’s government had been involved in private negotiations with one of El Salvador’s main street gangs, Mara Salvatrucha (MS-13). Allegations of dealings between government officials and mara street gangs to reduce violence and secure political support are nothing new in El Salvador, and Bukele himself faced similar allegations from El Faro while serving as San Salvador mayor. However, these were the first to emerge since Bukele assumed the presidency.

A pre-electoral survey by Universidad Centroamericana's Instituto Universitario de Opinión Pública (Iudop), published on 8 December, showed 64% of 1,265 respondents saying they would vote for NI in the legislative election while just 6.3% said they would vote for Arena and 5.4%, for FMLN. As regards the municipal election, 44% said they would vote for NI, compared with 10% for Arena, 7.1% for Gana, and 6.3% for FMLN.

Bukele would seem poised for a major victory, which would remove what has been a significant check to his authority. Yet he himself has cast doubt on the integrity of the election with baseless suggestions of fraud. The electoral authority (TSE) has also denounced further acts of intimidation by NI against its magistrates. This all highlights questions over President Bukele’s commitment to the democratic process and rule of law, questions that have persisted throughout his tenure. These doubts notably emerged in February 2020 with Bukele’s deployment of security forces to congress to pressure legislators into approving funds for security. Dubbed ‘9F’ the event was widely condemned and sparked fears regarding the police independence in particular.

These doubts have been further fuelled by the government’s response to the pandemic which has been dominated by clashes between Bukele on the one hand and the legislature and judiciary on the other, where he has repeatedly disregarded orders from the country’s top court, prompting international condemnation. A letter penned by six US Republican legislators to Bukele in September warned of “a slow but sure departure from the rule of law and norms of democracy”. The same month Salvadorean judges wrote to United Nations special rapporteur Diego García-Sayán requesting his intervention, citing “grave violations to judicial independence”.

President Alberto Fernández became the first Argentine president ever to be invited to participate in a G-7 summit this week. A seat at the high table of global diplomacy provided a brief distraction for Fernández from the political divisions within his ruling left-of-centre Frente de Todos (FdT) coalition and the economic challenges confronting his administration.

President Fernández set off for Schloss Elmau, Germany, for the 26-28 June G-7 summit fresh from receiving approval from the executive board of the International Monetary Fund (IMF) on 24 June of Argentina’s first quarter economic performance, the first of 10 quarterly reviews which will be undertaken under the Extended Fund Facility (EFF) programme agreed in March.

• G-7 summit

President Fernández said he had taken advantage of his appearance at the G-7 summit to urge the global powers not to forget “the peripheries”. He said that he had explained the serious difficulties being felt by the whole region as a result of the war in Ukraine. He criticised the international economic order, which he said caused poverty, and he complained about how unjust the fight against climate change was. While expressing Argentina’s commitment to combating climate change, Fernández said “the southern hemisphere is the provider of oxygen and when bringing order to the disorder that others created, they make demands of us without providing the tools to be able to do it”.

Staying with the programme

The managing director of the IMF, Kristalina Georgieva, said Argentina had met “all end-March 2022 quantitative targets and…made progress toward implementing the structural commitments” contained within the programme. As a result, the IMF disbursed US$4.01bn of funds. Georgieva underscored the importance of sticking to the primary fiscal deficit target, set at 2.5% of GDP in 2022, with fiscal targets becoming stricter in the second half of this year. But she stressed that there was “some flexibility in the quarterly paths to accommodate the shocks…associated with the war in Ukraine and broader global uncertainties”, such as higher energy subsidies and “appropriate social assistance to protect the vulnerable from the food price shock”.

That the first quarterly review has been approved without major difficulties can be taken as a relative political victory for Fernández and his embattled economy minister, Martín Guzmán. But future reviews may become more challenging as inflation soars ever higher and economic growth slows. The latest data shows year-on-year GDP growth falling from 8.9% in the fourth quarter of 2021 to 6.0% in the first quarter of this year, while annual inflation, which topped 60% in May, could reach 70% by the end of the year, increasing the likelihood of popular (anti-IMF) protests.

Long-term commitments include improved tax compliance and reduced energy subsidies (the latter politically perilous with fuel prices spiralling). In the short-term, the government has committed to increasing foreign currency reserves by US$5.8bn in 2022. With this end in sight, and after receiving the green light from the IMF according to Fernández, on 28 June the government imposed import restrictions until the end of September.

The restrictions will limit the purchase of US dollars, with the central bank providing importers with a sum no greater than 105% of last year’s purchases, with anything above that having to be covered by commercial loans. Fernández was questioned about the measure during a press conference at the G-7 summit on 27 June. He said the import restrictions were designed to “recover reserves and put the public accounts in order”.

A week earlier Vice President Cristina Fernández, the leader of the Kirchnerista faction of the FdT and an increasingly vocal critic of the government’s economic policy, bemoaned a “festival of imports” which she said was preventing an accumulation of international reserves. President Fernández did not give her any credit for the new policy. “They were measures that we had been thinking about before and we were waiting for the IMF to approve the first quarter review,” he said, emphasising “the extraordinary needs of foreign currency to meet energy imports”. In what had the appearance of a calculated swipe at his vice president and her two administrations (2007-2015), he added “we don’t believe that you can live eternally with a fiscal deficit”.

The pressure on the Argentine peso is mounting. The price of the free-market dollar has surged by 15.5% during the course of this month, increasing inflationary pressures. With Argentina’s country risk premiums widening, Guzmán has had to deny that the government will default on its peso-denominated public debt.

It is against this backdrop that the Mesa de Enlace umbrella group of farming lobbies, composed of Confederaciones Rurales (CRA), Coninagro, Federación Agraria (FAA), and Sociedad Rural (SRA), announced a 24-hour suspension of deliveries and sales of grains and livestock on 13 July to demand that the government address diesel and fertiliser shortages. Agricultural exports, which are seasonal, will be lower in the second half, increasing the risk of new speculative attacks on the peso.

Liza-1, the first offshore oil and gas production block operated by US oil giant ExxonMobil (45%) and partners US firm Hess (30%) and China’s China National Offshore Oil Corporation (CNOOC) (25%), has already begun transforming Guyana’s economy with the International Monetary Fund (IMF) estimating GDP will grow by a stratospheric 37.2% this year. But an unexpected dispute over catastrophe insurance coverage could put the boom on hold.

At first glance, Exxon has put an impressive array of insurance arrangements in place, covering the risk of an oil spill or other catastrophic event. Any losses would in the first instance be met by its local subsidiary, known as ESSO Exploration and Production Guyana Ltd. It also has cover from a wholly owned UK-based insurance company. Together these provide up to US$600m in oil spill cover on media reports. The parent company has in addition guaranteed it will cover up to US$2bn worth of catastrophic losses.

But environmental campaigners in Guyana are not impressed. They point out that comparatively speaking these numbers are pretty small. The Deepwater Horizon explosion and oil spill suffered by British multinational BP in the Gulf of Mexico in 2010 is estimated to have caused total losses of around US$70bn. An offshore oil spill in Guyana could also potentially impact a dozen Caribbean islands which are highly dependent on tourism and fishing.  Essentially, if there is an oil spill, the bulk of the financial burden could still fall on the government – in other words, ultimately on the Guyanese tax payer.

In a ruling on 3 May High Court Justice Sandil Kissoon upheld a complaint which accused both Exxon and the country’s Environmental Protection Agency (EPA) of failing to put adequate oil-spill insurance in place. Kissoon was scathing. Exxon, he said, had “engaged in a disingenuous attempt which was calculated to deceive when it sought to dilute its liabilities and settled obligations expressed in clear unambiguous terms.”

The company’s actions had been “made permissible only by the omissions of a derelict, pliant, and submissive Environmental Protection Agency” the judge said. Kissoon gave Exxon and the EPA 30 days – up to 10 June – to put better insurance coverage in place, or risk formal withdrawal of Liza-1’s environmental operating permit. That would shut down Guyana’s entire oil production, currently running at 380,000 bpd and in effect put the country’s economic boom on hold, as there would be knock-on effects for other offshore drilling projects in the pipeline.

The judge’s interpretation of existing regulations is that the ultimate parent company must provide “unlimited guarantees” to cover all clean-up cost in the event of an oil spill. Exxon described the ruling as “disappointing” and said it failed to appreciate “the financial capabilities of Exxon Mobile Guyana and its co-venturers to meet their obligations, the insurance we already have in place, and the progress toward agreeing to a guarantee that exceeds industry benchmarks”. The Guyanese government said that it would appeal against the ruling since Kissoon “fell into error in his findings”.   

EPA executive director Kemraj Parsram acknowledged the need for the parent company to accept liabilities not covered by local subsidiaries but said his interpretation of the regulations was that it did not require to be “unlimited”.     

Since the ruling, on 16 May Exxon released data showing the value of investments at stake. The company said that along with its partners and contractors it had spent more than US$400m last year, and US$900m since its first oil discovery in Guyana in 2015. It added that by the end of 2022 it was employing over 5,000 local workers which represented 65% of the oil and gas industry workforce. Documents submitted to the court cited by the international media showed that Exxon and its partners had earned US$5.8bn in combined revenues from the Stabroek Block (which includes Lisa-1) last year.

Key protagonists in the dispute are expected to continue attempts to influence the type of insurance cover the industry receives. With Guyana intending to auction a further 14 exploration blocks this year, the government is worried that requiring oil majors to accept “unlimited” oil spill liabilities could scare off new investors. On the other hand environmental campaigners say the oil boom will increase safety risks and distract attention from pressing climate change issues.  Amy Westervelt, an investigative journalist who covers the Guyana oil story, points out that around 90% of the population lives on a thin coastal strip which is not just vulnerable to any eventual oil spill, but also to rising sea levels, with some predictions saying parts of the coast will be underwater by 2030 – in other words, in less than ten years’ time.

Cuba’s President Miguel Díaz-Canel has blamed the tightening of the US “blockade” for the “difficult situation” endured by Cuba in obtaining basic products on the list of subsidised rations. The Partido Comunista de Cuba (PCC) government is responding to protests over shortages that broke out in various cities on 17 March [WR-24-11] with a different approach. Just days later, on 20 March, Díaz-Canel launched a new programme ‘Desde la Presidencia’, broadcast on Youtube and designed to bring the Cuban leader closer to the people, even if familiar foes – counterrevolutionaries and US policies – were blamed. The government has also taken more practical steps as it struggles to avert future protests by going to extra lengths to ensure the supply of products in the basic basket of goods.

The Cuban economy has struggled since 2020, with GDP currently down by 10% compared with its value in 2019, amid shortages of power, food, medicine, and other basic goods. The government regularly blames the 60-year-old US trade embargo for its economic difficulties. During a visit to Spain on 2 April, US Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols said that Cuba was experiencing a “key moment” as the population lacks “electricity, food and work, and the solution is democracy”.

In the second edition of ‘Desde la Presidencia’, on 4 April, President Díaz-Canel acknowledged that the last two years had proved to be “very complex for distribution”, with a lack of resources to pay for imports and a lack of fuel for onwards distribution from Cuban ports. But he said that the government was making “a titanic effort”, spending some US$230m a month to guarantee the supply of subsidised basic goods, such as chicken, rice, sugar, grains, and milk, on the ration book, or ‘libreta’, to more than 12,000 bodegas (government-owned supermarkets), more than US$2bn a year. This annual financial burden is constantly climbing, exacerbated by a decline in domestic agricultural production to the tune of some 35% between 2019 and 2023, according to government figures.

The government has also made an effort to reduce power cuts. The energy minister, Vicente de la O Levy, said that the government was “aware that the lack of electricity provides the spark for any protest”. Cuba requires 8m tonnes of oil every year, of which 3m are produced locally. Oil shipments from Venezuela and Mexico have declined in recent years, although on 31 March a shipment of 90,000 tonnes of Russian oil (the equivalent of 660,000 barrels) arrived in Cuba, the first of its kind from Russia since 2022.

Powdered milk

On 4 March the Cuban government turned to the United Nations World Food Programme (WFP) for assistance for the first time for the provision of powdered milk in order to “guarantee supply to Cuban boys and girls,” the state-run internet portal Cuba Debate said. A shipment containing 375 tonnes of powdered milk from Brazil was sent by the WFP.

Boasting the world’s largest rainforest and one of the cleanest electricity sectors of any major economy, Brazil has long been seen as a natural leader in efforts to combat global climate change. But the country’s track record has been patchy, with ups and downs in combating deforestation and little progress in curbing emissions in the agriculture and energy sectors. Last year Brazil was the world’s fifth-largest emitter of greenhouse gases, according to 2023 data from the Emissions Database for Global Atmospheric Research. Now, coinciding with the COP29 United Nations (UN) climate conference in Azerbaijan and the leaders’ summit of G20 nations gathered in Rio de Janeiro in November, the government of President Luiz Inácio Lula da Silva managed to push through the chamber of deputies a long-stalled bill to establish a carbon market.

Similar to the carbon market operating in Europe, the Brazilian model aims to punish those who emit and reward those who capture greenhouse gases (GHG). The bill establishes an official market regulated by the Comissão de Valores Mobiliários (CVM), the Brazilian equivalent of the Security and Exchange Commission. There, emissions quotas, or CBDs by their Brazilian acronym, can be purchased by companies emitting beyond their assigned amount. The revenue from these certificates will help fund research and other measures to combat climate change. In a second, voluntary market companies can buy certificates of verifiable carbon capture (CRVE by their Brazilian acronym) to help offset part of their emissions.

The regulated market is important because it provides legal security and a mechanism to cap emissions by putting a price on them. The voluntary market provides an incentive and a financing mechanism for conservation. Without the legal framework carbon-trading projects have been operating without clear rules and cases of reported greenwashing have undermined confidence, which in turn slowed the funding for carbon capture projects such as reforestation in the Amazon.

The new rules include the need to consult indigenous peoples before any carbon capture project is launched and to establish clearly how revenues from the project will be distributed. “Most of the G20 countries already have specific laws on the carbon market and are already far ahead. We have a very great potential for reforestation projects,” said lawmaker Nilto Tatto, coordinator of the environmental caucus in congress.

The legislation was seen as a long overdue step for Brazil to catch up in terms of establishing a sound legal framework for a carbon market that would institutionalise the country’s haphazard efforts in combating climate change and reducing emissions, especially before hosting the COP30 UN climate conference in Belém next year.

Still, there is no guarantee if and when real progress will be made. For one, the government must still draft the bylaws and have them approved by congress within two years. Then, the emissions quotas for each sector and industry must be established, subject to public hearings, and a government watchdog must be created to enforce the new rules. In all, it will be six years before the market is fully implemented.

Perhaps the biggest problem with the new legislation is that it doesn’t cover the two biggest sources of GHGs in the country – deforestation and agriculture. The former accounts for 46% while farm emissions, which include fertilizers and methane from cattle digestion, account for 28%, according to GHG estimates made by Observatório do Clima, a network of climate action groups.  

Big polluters ‘self amnesty’

The powerful rural caucus in congress essentially delayed the bill in the lower house until the agribusiness sector was exempt from the official carbon regulations. “The ruralist bench managed to ‘self-amnesty’ the biggest polluters, preventing their inclusion in climate mitigation measures,” said Maurício Terena, legal coordinator at the Articulação dos Povos Indígenas do Brasil (Apib) indigenous network.

DOMINICAN REPUBLIC | Economic boost. The Dominican central bank (BCRD) announced on 16 June plans to inject RD$81bn (US$1.3bn) into the monetary system to improve liquidity and stimulate economic growth at a time of mounting global uncertainty and volatility. It revealed that RD$50bn of this total would be made available in the form of low-interest loans to construction, manufacturing, exports, agriculture, and micro, small, and medium-sized enterprises (MSMEs). The economy grew by 2.5% year-on-year in the first four months of 2025.

The BCRD also revealed that the economy would receive a boost from soaring remittances sent back by Dominican expatriates. Remittances expanded by as much as 11.9% in the first five months of the year to US$4.90bn compared with the same period last year, and by 11.1% in May to US$985.5m.

On 9 May Brazilian supreme court (STF) justice Alexandre de Moraes suspended a law that proposed reducing prison sentences for individuals convicted in relation to the far-right riots in Brasília on 8 January 2023. Former president Jair Bolsonaro (2019-2023), who was convicted last year for plotting a coup after losing the 2022 election [SSR-25-10], could also have benefited from this bill, given that his coup conspiracy was related to the 8 January riots. This marks another instance of the judiciary and legislature locking horns, with lawmakers, especially those affiliated to right-wing opposition groups, reiterating their accusations that De Moraes is undermining democracy through his rulings.

The bill to lighten the sentences for far-right rioters and coup plotters was first approved by congress in December 2025, but earlier this year, President Luiz Inácio Lula da Silva vetoed the bill on the three-year anniversary of the 8 January riots. Congress later overturned Lula’s veto on 30 April, and the senate president Davi Alcolumbre, of the conservative União Brasil party, promulgated the bill on 8 May.

However, De Moraes ordered the temporary suspension of the bill on 9 May while the judiciary reviews its legality. He had the authority to do so because he had been appointed as the lead judge to oversee legal challenges against the bill. Appeals were submitted by the national press association (ABI) and the left-wing Partido Socialismo e Liberdade (PSOL) arguing that the bill violated the constitution. 

In late April, following the congressional decision to remove the presidential veto and restore the bill, civil society groups slammed the move as a major setback to Brazil’s institutions. A coalition of NGOs known as the Pacto pela Democracia (Pact for Democracy) released a statement on 30 April arguing that overturning the veto on the bill weakened the accountability of those who had attempted to undermine the democratic order.

The statement also criticised the rhetoric of some moderate conservative lawmakers in recent months used to justify the passage of the bill. For example, the centre-right president of the lower house of congress, Hugo Motta (Republicanos), frequently used the term ‘pacification’ when discussing the bill during congress sessions. He argued that the bill to reduce the jail time of far-right rioters was needed to ease tensions in Brazil’s polarised political landscape – with the far-right ‘Bolsonarismo’ movement complaining for the past three years that Bolsonaro supporters convicted for storming the seats of government were the victims of human rights abuses, taking up the cause of 8 January rioter amnesty as one of the main rallying cries during Bolsonarista demonstrations.

The Pacto pela Democracia rejected this claim that a reduction of prison sentences was needed to pacify the country, highlighting that the bill does not have popular support – it is a cause dear to the Bolsonarismo movement, not to the average Brazilian. The NGOs also warned that overturning the veto on the bill could signal the “normalisation” of attacks against democracy such as the 8 January riots and the Bolsonaro coup plot.

In response to his decision to suspend the law, De Moraes faced criticism from the main right-wing contenders planning to run in the presidential election this October, including Bolsonaro’s eldest son, Senator Flávio Bolsonaro, who claimed that De Moraes had been conspiring behind the scenes to hinder the bill.

STF nominee 

Tensions between Brazil’s governing institutions also escalated on 29 April when the senate rejected President Lula’s nominee to assume the vacant seat on the supreme court (STF), Jorge Messias. This was the first time since 1894 that congress has rejected an STF nominee. Political commentators cited in the Brazilian media have described the move not only as a blow to President Lula, but also as sending a forceful signal to the supreme court, reminding the judiciary of the power that congress holds.

Remittances: According to Bolivia’s central bank (BCB), remittances in January 2012 reached US$71.8m, 9.4% less than the same month in 2011. The BCB attributes the drop in part to unemployment in Spain (currently at 23%), which is the main source of remittances. According to the president of the BCB, Marcelo Zabalaga, remittances reached US$939m in 2010, rising to US$1.01bn in 2011; he forecast US$1.00bn for 2012 and US$883m for the year after, mainly due to the economic situation in Europe. According to the BCB, 46.8% of remittances come from Spain, followed by the US (20.1%), Argentina (15.3%) and Brazil (2.8%).

Gas revenue: Bolivia’s state oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), recently reported that Bolivia received US$447m in revenue in the first two months of 2012, a 48% increase on the same period the previous year. According to the YPFB, the rise owes to increased demand from Brazil and Argentina as well as a quarterly adjustment in export prices in line with the price of West Texas Intermediate (WTI) - the grade of crude oil used as a benchmark in oil pricing. Of the total amount, US$59.1m went to the Treasury and US$269.4m went on IDH. As regards regional breakdown in terms of royalties, US$76.1m went to the eastern region of Tarija, where the country’s main gas fields are, followed by Santa Cruz (US$21.9m); Cochabamba (US$6.4m); and Chuquisaca (US$3.7m).

La Presidenta de Costa Rica, Laura Chinchilla, acaba de efectuar una visita a China, su segunda desde que asumió el poder en mayo del 2010 y la tercera por un jefe de estado de Costa Rica desde que los dos países establecieron relaciones diplomáticas hace siete años. Con el anuncio de que Costa Rica sería anfitrión de la cumbre de negocios China-América Latina VII, en el 2013; la visita –que ha producido ocho acuerdos que abarcan comercio, infraestructura, seguridad y educación– destaca la continuada importancia geopolítica de Costa Rica para China, como un puente a Centroamérica que, aunque aún debe hacer el cambio de Taiwán, continúa mostrando interés en estimular el comercio y la inversión [IL-11-38].

Mientras el establecimiento de lazos bilaterales fue seguido por la firma de un tratado de libre comercio en el 2010, que entró en vigencia el 1 de julio del 2011 [IL-11-24], las cifras recientes de la agencia pública responsable por la promoción del comercio de Costa Rica, Procomer, sugieren que hay espacio para mejorar: de acuerdo con la agencia, el comercio bilateral llegó a US$1,5mm en el 2011 (de los cuales sólo US$199,7m fueron exportaciones), subiendo un 17% sobre el año anterior. Aunque China es el segundo mayor importador de bienes a Costa Rica, es el 13^er mayor mercado para las exportaciones de Costa Rica, y China representó sólo el 5,6% del comercio total en el 2011. Con relación a la inversión extranjera directa (IED) de China en Costa Rica, esta alcanzó solamente US$1m en el 2011 de un total de US$2,1mm, continuando con una declinación con US$1,7m invertidos en el 2010 y US$3,6m en el 2009.

Por lejos, las más grandes exportaciones de Costa Rica a China, representando cerca del  80% de las exportaciones, son circuitos integrados y micro-estructuras electrónicas, así como materiales eléctricos. Después de su visita, Chinchilla anunció nuevos acuerdos para que productos cárnicos y lácteos ingresen al mercado chino, con planes para permitir el ingreso de productos porcinos mas adelante. Parte de los esfuerzos para estimular el comercio incluyen la posibilidad de que Costa Rica actué como una plataforma de manufacturas y logística para compañías chinas e inversiones, y uno de los ocho acuerdos prevé el establecimiento de un parque industrial libre de impuestos para firmas chinas.

Así como también promesas de que China construiría una escuela nacional de policía en Costa Rica, a un costo de US$25m, y contribuirá 8.400 computadoras para estudiantes de escuelas primarias y 800 para maestros, el gran proyecto que atrajo la atención de los medios fue el plan para expandir una refinería en el puerto caribeño de Moín, la única refinería de Costa Rica. Después de la firma de un acuerdo marco de cooperación entre la compañía petrolera del estado de Costa Rica, Recope, y la Corporación Nacional de Petróleo de China (CNPC) en el 2007, el año siguiente los dos países acordaron establecer una empresa conjunta conocida como Soresco para que sea la propietaria de la refinería expandida que sería alquilada a Recope. El proyecto, que elevaría a más del doble la capacidad de refinamiento de petróleo de Costa Rica a 65.000 barriles por día (bpd) de los 25.000 bpd, aún no se ha iniciado, aunque en junio del 2012, CNPC confirmó que el banco de la corporación de desarrollo de china (CDB) haría un préstamo de US$1mm, que estarían disponibles a finales de diciembre del 2012. Más allá de la promesa de entrenamiento para los empleados de Recope, la visita de Chinchilla arrojó poca luz sobre el progreso del proyecto.

• Impulsando la cooperación con Corea del Sur

La Presidenta Laura Chinchilla también viajó a Corea del Sur, donde se reunió con su par coreano, el Presidente Lee Myung-bak en un esfuerzo por fortalecer el comercio entre las dos naciones. Este llegó a US$504m en el 2011, según el gobierno costarricense, elevándose un 49% sobre el año anterior. Uno de los principales resultados de la visita de Chinchilla fue la promesa de empezar negociaciones para un Tratado de Libre Comercio (TLC).

NICARAGUA | Aprobado el paquete de reforma constitucional. La legislatura unicameral de 92 miembros de Nicaragua ha aprobado el paquete de reformas constitucionales propuestas por el Presidente Daniel Ortega el mes pasado, que removerían la prohibición a la reelección presidencial consecutiva, concentrando aún más el poder en manos del ejecutivo y elevando el rol de los militares [IL-13-44].

El paquete de reformas, que Ortega afirma que es necesario para incorporar cambios territoriales, de acuerdo con las resoluciones del 2007 y del 2012 de la Corte Internacional de Justicia (CIJ) de La Haya, que ahora aguardan la ratificación en la próxima sesión legislativa que comienza el 10 de enero del 2014, antes de entrar en vigencia. Su aprobación el 10 de diciembre por 64 votos a favor y 26 en contra no fue ninguna sorpresa, dabido a el control que ejerce el Frente Sandinista de Liberación Nacional (FSLN) sobre la Asamblea Nacional.

Con los detalles completos de la versión aprobada aún por hacerse públicamente disponibles, el semanario local de análisis, Confidencial, informa que la propuesta inicial de la reforma ha sido suavizada después de una reunión a puertas cerradas con la organización del sector privado, Consejo Superior de la Empresa privada (Cosep). De acuerdo con Confidencial el reconocimiento constitucional de los llamados “gabinetes de familia, salud, y vida”, el proyecto favorito de la poderosa primera dama de Nicaragua, Rosario Murillo, que la oposición advierte que constituye una amenaza a la privacidad individual, ha sido eliminado. Confidencial también informa que fueron impuestos límites a los esfuerzos del FSLN de controlar el Internet, así como también las posiciones que los oficiales militares podrán ocupar en otras instituciones del Estado.

Sin embargo, la reforma permanece controversial y el día de la votación, cientos de manifestantes salieron a las calles de Managua en protesta. Aquellos opuestos a la reforma incluyen las organizaciones nacionales de derechos humanos, el Centro Nicaragüense para el desarrollo Económico y Social (Funides), así como también la Iglesia Católica.

In mid-July, the International Monetary Fund (IMF) revised upwards its projections for Brazil’s GDP. The forecast still makes for grim reading, but it is an improvement. The IMF now expects Brazil to contract by 3.3% in 2016, rather than 3.8%. Instead of zero growth in 2017, the IMF is now forecasting an expansion of 0.5%. The Institute of International Finance (IIF) was even more positive, predicting growth of 1.5% in 2017. Although Brazil’s economy appears to be finally bottoming out, after almost two years of recession, its dysfunctional politics may still hamper prospects for growth.

Confidence returning

Indicators suggest that both industrial and consumer confidence is returning. In June, the ICI-Index of Industrial Confidence was up to 83.4, its highest level since February 2015. Over the course of 2016, the production of capital goods has increased by 9%, with strong growth in March and April. Meanwhile, a survey of ordinary Brazilians by the pollster Datafolha suggests that they are starting to feel more optimistic about the future.

In December 2014, immediately after the re-election of Dilma Rousseff, Datafolha’s confidence index was 121. This declined to 76 by March 2015, but it has now recovered to 98 in July 2016. Asked whether the Brazilian economy would improve, 38% of those surveyed in July said they believed it would, up by 10 percentage points from February, and 24 points from April 2015. Those believing the situation will get worse fell from 58% in April last year to 30% this month.

It is not entirely clear what this optimism is based on. Brazil’s economy continues to contract, inflation remains stubbornly high, at just under 9%, and 11% of Brazilians are now unemployed. Given unemployment tends to be a lagging indicator, it is expected that the situation is likely to get worse before it gets better. There is, however, a good deal of confidence both among international investors and the Brazilian commentariat in the economic team that has been installed by the interim president, Michel Temer. Brazil’s benchmark stock index, the Ibovespa, has risen by about 31% this year, after falling 13% in 2015, and the real has risen by 22% against the US dollar.

Still, Brazil’s recovery is fragile and its public accounts are precarious. While Temer’s administration has promised austerity, nothing will happen until after the municipal elections in October. Public debt is forecast to hit 76.6% of GDP by the end of 2017, up from around 69% currently. Since September, all three major credit rating agencies have downgraded Brazil’s sovereign debt to junk. With unemployment high, retail sales, up to the month of May, fell in 14 of the previous 18 months and are 20% below the August 2012 peak.

Business of kidnapping

According to the popular news magazine Veja, on 22 July Aparecida Schunk, the mother-in-law of Formula One boss Bernie Ecclestone, was kidnapped from her home in Interlagos, in the south of São Paulo. The kidnappers have since demanded a ransom of R$120m (US$36.5m), the highest amount ever requested for a kidnap victim in Brazil. So far the police and Mr Ecclestone’s family have declined to comment.

Although kidnapping was once common in Brazil in the 1990s and 2000s, it is now increasingly rare, due to advances in technology and the sheer complexity of orchestrating the successful capture and release of the victim along with enough financial compensation to make the operation worth the risk.

• Energy problems

A recent report by the financial ombudsman of the federal congress, Tribunal de Contas da União (TCU), presented a “worrying” picture of the state of the 31 largest electricity distribution firms in Brazil. Twenty-three (74%) are in unsustainable financial situations, and should not have distributed profits and dividends that worsened their financial status. These firms distributed R$3.4bn (US$1bn) in dividends from non-existent profits in 2014.

Boosting renewable energy: On 15 September, the Morales government awarded a US$1bn contract to the Chinese company Asociación Accidental Rositas (AAR) for the design, construction and operation of the Rositas dam, the first hydroelectric project in Santa Cruz department.

At a ceremony also attended by Energy Minister Sánchez and Vice President Álvaro García Linera, President Morales said that the dam, which has been in the pipeline for 40 years, would produce 400MW of energy when it was up and running. He also told reporters that the dam was one of eight to be installed in the basin of the Rio Grande, which crosses the departments of Santa Cruz, Cochabamba and Chuquisaca.

Three days earlier, Morales inaugurated the testing process of the "Múltiple Misicuni" dam in Cochabamba department, which is expected to be completed in April 2017 and will generate 120 megawatts (MW). This will be Bolivia’s largest dam and will provide the country with 10% of its energy demand, which currently stands at 1200 MW.

Also on 12 September, Bolivia’s hydrocarbons & energy ministry, national electricity company (Empresa Nacional de Electricidad, ENDE), and Central Bank (BCB) inked a deal for the hydroelectric project Ivirizu, also located in Cochabamba department. Energy Minister Sánchez told reporters that the project represented US$550m in investment and was expected to generate around 300MW.

The MAS government has trumpeted these new initiatives as part of efforts to transform the country’s energy matrix. The national energy development plan (2008-2027) seeks to do this by ending dependence on diesel, gasoline and liquefied petroleum gas (LPG) and replacing this with alternatives.

This plan states that by 2027, 55% of Bolivia’s energy will come from natural gas up from 18% in 2010. Meanwhile diesel will be reduced to 11% by 2027 from 27% in 2010; gasoline from 14% to 12%, LPG from 10% to 4% and biomass from 17% to 11%. Electricity will also be reduced from 11% to 8%, with a greater proportion of it to be generated by hydro rather than thermal sources.

Net international reserves: On 20 September, Bolivia’s central bank (BCB) issued a report showing that the country’s net international reserves (RIN) in the first six months of 2016 reached US$11.6bn. This is 11% less than that registered on 31 December 2015, the figure for the first half of 2016 nonetheless still represents 33% of GDP – one of the highest percentages in the region.

• Nuclear Research and Technology Centre

A press release by Bolivia’s hydrocarbons & energy ministry notes that the first contract inked by the Bolivian nuclear energy agency (ABEN) and Atom Stroy Export S.A , a dependency of the Russian state-owned atomic energy corporation Rosatom, regarding the construction of a Nuclear Research and Technology Centre, was to carry out a diagnostic and evaluation of nuclear infrastructure in Bolivia. The second contract, signed by Aben and Rosatom Service S.A., a dependency of Rosatom, was to carry out engineering prospecting for the evaluation and justification of the site; an environmental impact test; and other studies related to the obtainment of necessary licences ahead of the start of construction of the centre.

TRINIDAD | Fretting over Venezuelan incursions. Over the weekend of 13/14 October, Trinidadian fishermen reported seeing two vessels from Venezuela’s Guardia Nacional in Trinidad’s territorial waters.  

On 15 October, Trinidad’s National Security Minister, Stuart Young, responded to the accusations that the coastguard was allowing Venezuela’s Guardia Nacional to patrol in Trinidad’s territorial waters and to intimidate local fishermen by saying: “Trinidad and Tobago has not waived its sovereign rights over our territorial waters. The allegations being raised are serious ones. As Minister of National Security, I intend to discuss these allegations…with the Trinidad and Tobago Coast Guard. Thereafter discussions will be had with Venezuela, once warranted.”

Local fishermen have also reported seeing Venezuelans in distress at sea but not receiving any help from Trinidad’s coastguard. One MP, Rodney Charles, called on the government to explain why the coastguard, with its 12 vessels, was “never available”.