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La Presidenta de Argentina, Cristina Fernández, usó su discurso final como jefa de Estado ante la Asamblea General de las Naciones Unidas para acusar a EU de proteger a Antonio ‘Jaime’ Stiuso, un ex jefe del espionaje argentino, buscado para ser interrogado por la misteriosa muerte del fiscal federal, Alberto Nisman. “¿Está él acá?” preguntó Fernández a la Asamblea, a medida que su discurso se sobrepasaba el tiempo permitido. Algunos informes afirman que Stiuso, quien perteneció al servicio de inteligencia de Argentina desde 1972 hasta su destitución en el 2014, había huido a EU. Se cree que Stiuso ha sido una de las principales fuentes en la investigación de Nisman sobre el atentado contra la Asociación Mutual Israelita Argentina (Amia) en  Buenos Aires en 1994, que dejó 85 personas muertas y cientos de heridos.

A inicios de este año, Stiuso no se presentó ante el actual director de la Secretaría de Inteligencia, Oscar Parrilli. Parrilli había requerido que Stiuso explique su relación con Nisman y sus acciones en el caso de la Amia. Los abogados de Stiuso confirmaron que él deliberadamente había optado permanecer fuera del país.

La Presidenta Fernández había declarado públicamente que Stiuso estaba involucrado en un complot para acusar a su gobierno de estar involucrado en el encubrimiento de la participación de Irán en el atentado. La evidencia presentada por Parrilli mostró que Nisman y Stiuso habían estado regularmente en contacto en las semanas que condujeron a la muerte del fiscal.

Un día después del discurso de Fernández, la cancillería argentina publicó más detalles acerca de su formal pedido por información al gobierno de EU. El Departamento de Estado de EU respondió a cada pedido anónimamente, refiriendo todas las preguntas hacia posibles cargos contra Stiuso de vuelta al gobierno argentino. En una nota, la cancillería de Argentina dijo que “todos y cada uno de nuestros pedidos fueron hechos públicamente, con la firma de quien fuera el responsable, y sin ocultar o mentir acerca de la razón de estos pedidos. Esperamos un tratamiento similar de las autoridades de Estados Unidos”.

El canciller argentino, Héctor Timerman, y Parrilli se reunieron en julio con el embajador de EU, Noah Mamet, para explicarle los motivos de la búsqueda de Stiuso: que bajo la ley argentina, el ex agente de inteligencia estaba obligado a presentarse cada vez que fuera convocado por las autoridades. De acuerdo con el gobierno argentino, Mamet prometió dar una respuesta, pero hasta ahora no lo ha hecho.

En los primeros días de septiembre, la embajadora de Argentina en EU, Cecilia Nahón, tuvo una reunión con un funcionario del Departamento de Estado, Alex Lee, para reiterar el pedido. Aparentemente, Lee respondió mencionando “el asesinato de Alberto Nisman”, pero luego se corrigió diciendo que él no tenía opinión sobre las circunstancias de la muerte de  Nisman.

Nuevas encuestas de opinión ubican a Scioli cerca del triunfo

Tres nuevas encuestas de opinión publicadas por los medios de Argentina durante el fin de semana, muestran que Daniel Scioli, el candidato presidencial del gobernante Frente para la Victoria (FPV), una facción del Partido Justicialista (PJ, Peronistas), tiene una ventaja de 10 puntos porcentuales sobre su rival más cercano, Mauricio Macri. Para ganar en la primera ronda, el 25 de octubre, un candidato presidencial necesita ya sea el 45% de los votos, o el 40% con una diferencia de 10 puntos porcentuales sobre su rival más cercano.

Las tres encuestas publicadas este fin de semana muestran a Scioli con más del 40% de las intenciones de votos y con una ventaja de de 10 puntos sobre Macri. Sin embargo, esta ventaja aún está bastante dentro del margen de error. Por otra parte, solamente una de las encuestas muestra que Sergio Massa, el candidato ubicado en tercer lugar, desafiando a Macri por un posible lugar en la segunda ronda.

Para la consultora Haime, Scioli está con un 40,5%; Macri, de la centro-derechista coalición Cambiemos, tiene el 30,2%; y Massa, de Una Nueva Alternativa (UNA), tiene el 15,7%.

Rouvier, otra firma encuestadora, tiene cifras similares con relación a los dos candidatos principales, Scioli con un 41,2% y Macri con un 31,1%; Massa tiene alrededor del 20%.

Para Aresco, Scioli lidera con el 41,4%, y Macri tiene el 28,5%, mientras que Massa tiene el 21%.

Es interesante señalar que las consultoras hallaron que el 60% de los argentinos creen que, sin entrar a considerar sus opiniones personales, Scioli será el ganador.

• Preparaciones electorales

El 28 de septiembre Alberto Dalla Via, el vicepresidente de la Corte Nacional Electoral (CNE) de Argentina, dijo que algunas provincias no estaban listas para celebrar las elecciones. Dalla Via criticó el bajo nivel de institucionalidad y las “tendencias feudales” de Catamarca, Formosa, La Rioja, Santa Cruz, Santiago del Estero, y Tucumán. Sobre el tema de la reciente polémica elección en Tucumán, Dalla Via dijo que el sistema electoral de la provincia “deja mucho que desear”.

It is looking increasingly unlikely that the presidential and partial legislative election run-offs, suspended last year, will take place on 24 April. This was the date set by the 5 February accord inked by former president Michel Martelly (2011-2016) and the heads of congress ahead of Martelly’s departure on 7 February [RC-16-02]. There has been progress since Jocelerme Privert took up the interim presidency on 14 February for a 120-day term: Enex Jean-Charles was installed as prime minister on 28 March and the new nine-member provisional electoral court (CEP), two days later. Yet, the new CEP head, Léopold Berlanger, suggested that the run-offs were unlikely to take place on 24 April. A major bone of contention which will impact the date is whether to set up a verification commission to address the fraud allegations marring the presidential first round (which produced a run-off between Jovenel Moïse of Martelly’s Parti Haïtien Têt Kalé [PHTK] party and Jude Célestin of the opposition Ligue Alternative Pour le Progrés et l’Emancipation Haïtienne [Lapeh] party).

Jean-Charles’ installation followed the bicameral legislature’s approval of his government programme and cabinet in the early hours of 25 March. A secretary general of the council of ministers under former PM Evans Paul (2015-2016), Jean-Charles had previously served as an advisor to Martelly and figures such as former interim president Boniface Alexandre (2004-2006). He was undoubtedly more of a concession to the political opposition than Privert’s initial choice of PM, former central bank governor Fritz-Alphonse Jean [RC-16-03] who was rejected by the legislature five days earlier. Like Privert, Jean was reportedly an ally of former president René Préval (1996-2001, 2006-2011).

While the installation of the CEP was also hailed as a step forward (see sidebar), the question of who should participate in the presidential run-off persists. A report by the official commission (CEEI) tasked with evaluating the first round – which on official results gave Moïse 32.76% of the vote and 25.29% to Célestin – was clear that the first round was “stained with irregularities” that benefitted “some of the candidates” (although no details were supplied). The CEEI, which verified 1,771 tally sheets selected at random, found that 92% of them contained “serious irregularities”.

The PHTK is resolutely opposed to a verification commission being set up - which Privert is pushing for. The international community also initially appeared to oppose the move. In remarks made to the United Nations (UN) Security Council on 17 March, US Ambassador David Pressman, the alternate representative to the UN for special political affairs, said that “neither we nor international observation missions sent by the European Union and the Organization of American States [OAS] found proof of massive and widespread fraud” in the presidential vote.

However, the tide could be turning. On 8 April, the Miami Herald published an interview with Antigua & Barbuda diplomat Ronald Sanders, the former chair of the OAS Permanent Council, who led an OAS-mission to Haiti in February that looked at the electoral crisis. While stressing that he was not speaking on behalf of the OAS, Sanders was clear that a verification commission was necessary. He said that “If we go ahead and force Privert to hold elections without it, an election that is not ultimately acceptable to the majority of Haitians, we are courting trouble”. Two days later, OAS secretary general Luis Almagro, said that “we should give Haitians the time to organise elections in the best way possible” – signifying a change from calls by the US government, for example on 29 March, for a “new democratically-elected president [to be] seated - as quickly as possible”.

• New CEP

Each proposed by a different sector, the new members of Haiti’s provisional electoral council (CEP) are as follows: Josette Dorcély (proposed by the local trade unions), Marie Hérolle Michel (the private sector), Marie Frantz Joachim (women’s sector), Carlos Hercule (Catholic episcopal conference), Frinel Joseph (protestant religion sector), Kenson Polynice (voodoo/peasant), Léopold Berlanger (media), Lucien Jean Bernard (universities), and Jean Simon Saint-Hubert (human rights).

SURINAME | Seeking debt relief. The government led by President Chandrikapersad Santokhi appealed to creditors on 14 November to defer repayments on the debt principal and interest on its two bonds together totalling US$675m. This was not a bolt from the blue. The government activated a 30-day grace period in late October. It launched a consent solicitation, requesting that bondholders amend the terms of the bonds. If the bondholders agree it will give the government time in which to try and negotiate a programme with the International Monetary Fund (IMF), and stage debt relief talks with holders of its US dollar-denominated bonds.

Upon taking office in July, Santokhi said his government had inherited a “financial catastrophe” after a decade of rule by his populist predecessor Desi Bouterse (2010-2020), whose Nationale Democratische Partij (NDP) administration was a byword for cronyism and corruption. Santokhi has stressed that getting the country’s finances back on an even keel is a top priority, a problem exacerbated by the impact of the coronavirus pandemic, but his government is also pursuing some prominent figures in the previous administration for corruption, notably Gillmore Hoefdraad, Bouterse’s former finance minister for whom an arrest warrant was issued in August: Hoefdraad, who remains at large and is thought to have fled abroad, stands accused, inter alia, of misappropriation, money laundering, and fraud.

The opposition NDP, meanwhile, accused the government of “a serious violation of democracy and also of the rights of members of the National Assembly” after Bouterse’s former vice president Ashwin Adhin, now a legislator, was detained on 16 November as part of a probe being conducted by the public prosecutor’s office into the alleged destruction of media equipment in the vice presidential office shortly before the handover of power. Santokhi insisted that the judiciary was an entirely independent branch of government and that his administration, in full respect for the separation of powers, would not intervene in the matter.

Argentina has slipped in the latest press freedom ranking by NGO Reporters Without Borders (RSF), while press organisations in the country have also raised concerns over the erosion of press freedom. The coronavirus (Covid-19) pandemic is one factor that has darkened the outlook for the media over the last year, but press organisations also cite judicial persecution against journalists, which is often linked to the Argentine government’s crusade against ‘lawfare’ [SSR-20-04]. The ruling Partido Justicialista (PJ, Peronists) considers lawfare to be the use of judicial instruments to persecute its members, a practice in which Peronists accuse the media of being complicit.

RSF’s 2021 World Press Freedom Index, released in April, ranks Argentina 69^th out of 180 countries, down five places on its 2020 position; this is the fourth consecutive year that Argentina has slipped down the ranking. RSF notes that “censorship by judicial means is one of the biggest threats to the media” in Argentina, often targeting journalists and media outlets which carry out reporting on political corruption.

This concern was also raised by representatives from various press organisations, including the Asociación de Entitades Periodísticas Argentinas (Adepa) and the Inter American Press Association (Iapa), at a roundtable virtual discussion on freedom of expression in Argentina, held on 27 May. After citing rising verbal and physical aggressions against journalists, as well as attempts to attack their reputation online, Fernando Stanich from the Foro de Periodismo Argentino (Fopea) said: “Judicial power has also been used to silence the voices of independent journalism, there are emblematic cases such as what happened with Daniel Santoro”, in reference to a journalist who has faced repeated legal proceedings in relation to his work (see below).

In its bi-annual report on the freedom of the press, published in April and entitled ‘Shadows over the exercise of freedom of the press’, the Adepa first notes that press freedom in Argentina has deteriorated since the start of the Covid-19 pandemic. Argentina has seen some of the strictest restrictions on civil liberties amongst democratic countries as part of its efforts to tackle the pandemic. The Adepa stresses that a “coordinated and democratic resolution” to the public health crisis cannot happen without a free press. 

The report then goes on to cite the government led by President Alberto Fernández’s campaign against lawfare as damaging to the press. It notes that “various leaders of the governing coalition” have “intensified” their posturing against lawfare, as they maintain that there is a conspiracy between sectors of the judiciary and of the press to use judicial tools against members of the Peronist government – most likely a reference to Vice President Cristina Fernández in particular, who is under investigation in a swathe of corruption cases and has often maintained she is a victim of politico-judicial persecution, or lawfare.

The Adepa outlines a number of initiatives in both legislative and judicial circles which contribute to attacking the journalistic profession and its integrity, and thus erode press freedom. It cites the Santoro case, as well as a project submitted by Peronist lawmakers to Parlasur, the legislative body of the Southern Common Market (Mercosur) trade bloc, which seeks to make lawfare a crime, according to a definition of the term which includes recognition of the “essential role” that some media outlets play in its practice. The Adepa warns that such an initiative could also be tabled in the Argentine congress.    

Not just Covid and lawfare

Press freedom is also coming under attack from other angles in Argentina. RSF cites “polarisation between state-owned and privately-owned media” and police aggression towards journalists during street protests as growing threats. This latter point was also raised by the Adepa, which referenced specific instances of violence against journalists in recent months and also noted the additional challenges resulting from the economic precariousness of news organisations. 

Daniel Santoro

Daniel Santoro is an investigative journalist who, in the words of the Committee to Protect Journalists (CPJ), a US-based non-profit, “has been subject to repeated legal harassment for at least two years”. In April this year, Santoro was charged with attempted extortion, relating to his connections with Marcelo D’Alessio, a man who posed as a lawyer and has been charged with the extortion of Gabriel Traficante, a businessman implicated in the ‘Cuadernos’ bribes-for-public-works case which also involves former president (2007-2015) and now Vice President Cristina Fernández.

Santoro had previously been charged with spying and extortion in a separate case also linked to D’Alessio, who allegedly arranged contact between Santoro and a source. This charge was dropped in December last year, but was reportedly reinstated by a substitute judge on 18 June this year.

The CPJ, and others, condemn both cases as a failure to understand journalists’ work and their links with their sources, and a dangerous precedent for the exercise of journalism in Argentina. “Holding journalists liable for their sources’ actions sets a deeply troubling precedent that opens the door to criminal charges against investigative journalists working to uncover wrongdoing,” Natalie Southwick, CPJ’s coordinator for Central and South America, said at the time of Santoro’s charges for spying last year.

On 23 May, Mexico’s national statistics institute (Inegi) published its latest quarterly figures on employment based on its national employment survey (Enoe), which showed that in the first quarter of 2022, the economically active population (EAP) totalled 58.1m people, equivalent to 58.7% of the population aged 15 and above. Although an increase on the same period of the previous year, this remains below the level recorded in the first quarter of 2020, before the start of the coronavirus (Covid-19) pandemic, when the EAP was 59.9% of the population of 15 and above.

The ENOE shows that in the first quarter of 2022, 56.1m people were employed, 3.1m more relative to the same period of 2021. Unemployment also fell, reaching 2m people, equivalent to 3.5% of the EAP, and below the 4.4% recorded during the same period of 2021.

According to Mexico’s national social security institute (IMSS), as of 30 April there were 21.01m formal jobs recorded, 87% of which are permanent and the rest temporary. In the twelve months ending April 2022, IMSS recorded 940,859 new jobs, equivalent to an increase in the number of employed people of 4.7% year-on-year. This increase was produced by the growth in employment in the transport and communication sector (11.7%), construction (6.1%), manufacturing (5.8%), trade (5.7%), and extractive industries (4.7%). According to IMSS, the largest increases in employment levels by state during the twelve months to April were recorded in Quintana Roo with 18%, Tabasco with 16.8%, and Baja California Sur with 16.3%. However, the number of new jobs being created has dropped significantly since the start of the year, with only 5,490 new jobs created in April, compared to 64,566 in March and 178,867 in February. Furthermore, in May, 2,855 jobs were lost in the formal sector, ending the upwards trend. The IMSS attributed the monthly decrease in May in part to “the dynamics of employment in the countryside,” which it stated records a period of decline each year between May and July due to agricultural cycles.

Additionally, the ENOE shows that in the first quarter of 2022, 9% of the employed population were underemployed, which means that they worked for fewer hours than they wanted. Nevertheless, this is an improvement relative to the same period of 2021, when underemployment was at 13.8% of the employed population. Labour informality - which comprises those working within the informal sector, but also those in the formal sector that receive no social security benefits – also remains high at 55.2% of the total employed population, equivalent to 31m people, 1.8m more than in the same period of 2021. The ENOE specifies that around half - 15.9m people - worked within the informal economy. The highest rates of labour informality were recorded in Oaxaca (81.3%), Guerrero (78.1%), and Chiapas (73.8%) states, while the lowest rates were recorded in Coahuila (34%), Chihuahua (35.1%), and Nuevo León (36.7%).

However, it is worth noting that, according to Mexico’s national council for the evaluation of social development policy (Coneval), a government body, labour poverty fell slightly in the first quarter of 2022 compared to the same period of 2021. This meant that between January and March 2022, the income of 38.3% of the working population was not sufficient to afford a basic basket of food. This was a reduction of 3.2 percentage points relative to the same period of 2021, when it had reached 42% of the working population. This means that 49.8m people were found in labour poverty during the first quarter of 2022, a reduction of 3.6m relative to the same period of 2021.

The reduction in labour poverty was evident in 26 of the country’s 32 states, despite rising inflation which averaged 7.3% during the first quarter of 2022. Coneval attributed this to an increase in the average real income per capita of 6.7% year-on-year, as well as the growth in the number of employed people which increased by 3.1m. Crucially, however, the number of people living in income poverty remains above the pre-pandemic levels recorded in the first quarter of 2020, when it reached 36.6%, which was the lowest rate recorded since 2008, accounting for 46.1m people. As pointed out by local think-tank México ¿Cómo Vamos?, only six states (Nayarit, Campeche, San Luis Potosí, Baja California, Chiapas, and Colima) have seen their share of population in labour poverty fall below the pre-pandemic levels recorded in the first quarter of 2020. One of the most significant increases is that in Mexico City (CDMX), where the share of working population in labour poverty grew by 6.8 percentage points from 29.1% in the first quarter of 2020 to 35.9% in the first quarter of 2022. The capital was followed by Puebla, where the share of the population in labour poverty grew from 42.9% in the first quarter of 2020 to 49.2% in the first quarter of 2022.

Gender disparity

An endemic problem highlighted by NGO México ¿Cómo Vamos? is the low participation of women in the labour market. While 75.8% of men participated in the labour market during Q1 2022, only 43.6% of women did, a gap of 32.1 percentage points. In addition, this gap increased by 0.4 percentage points relative to the last quarter of 2021. This is well below the international average of 49%. In addition, the share of women living in labour poverty (40.9%) is higher than men (36.6%). This disparity is also observed regarding labour informality, where there are more women (54.3%) working informally in sectors other than agriculture, compared to men (48.7%).

Two former presidents, Juan Carlos Varela (Partido Panameñista, 2014-2019) and Ricardo Martinelli (Cambio Democrático, 2009-2014), are among nearly 50 people recently charged by Panama’s attorney general’s office in relation to the high-profile corruption scandal involving Brazilian construction and engineering firm Odebrecht – one of the biggest corruption schemes in the country’s history. The case is serving as the latest test of the pledge by President Laurentino Cortizo of the Partido Revolucionario Democrático (PRD) to address corruption, a complaint which featured heavily in the July unrest sparked by spiralling living costs [WR-22-29].

The charges were announced on 16 September, four days after preliminary hearings began regarding the case. This involved reports that, as part of a region-wide scheme, over US$59m was paid in bribes to Panamanian government officials between 2010 and 2014 to secure public works and infrastructure contracts.

According to the attorney general’s office, Varela is accused of receiving bribes from Odebrecht for his 2014 electoral campaign through the firm Poseidon Enterprises. As regards Martinelli, an attorney general’s office press release states that his sons, Ricardo and Luis Martinelli, who were found guilty in the US last year of involvement in the same case [WR-22-13], received over US$4m to obtain benefits from Odebrecht for state contracts which included Lines 1 and 2 of the Panama City metro.

Martinelli, who has indicated his intention of seeking a further presidential bid for his new party, Realizando Metas (RM), ahead of the 2024 general election, has faced other corruption allegations in the past although he currently benefits from a controversial ruling shielding him from prosecution, issued in March [WR-22-13].

The case, which is being heard by judge Baloísa Marquínez, who in June threw out charges against 40 people investigated for alleged money laundering in relation to the Odebrecht case [WR-22-25], is set to attract particular scrutiny given public anger with corruption was a major factor in the social unrest which rocked the country earlier this year.

First stage of dialogue concludes

On 17 September President Cortizo announced the conclusion of the first phase of dialogue between the government and protest groups which began on 21 July aimed at ending social unrest.

According to a presidential press release, the dialogue concluded with consensus having been reached on eight topics: reducing and freezing prices of a basic basket of goods without affecting national production; 2) reducing and freezing fuel prices; 3) lowering the cost of and ensuring supply of medicines for the social security institute (CSS) and the health ministry, without privatisation; 4) ensuring that 6% of GDP will be assigned to education; 5) reducing energy costs; 6) discussing the future of the CSS; 7) corruption & transparency; and 8) setting up an inter-sectoral table to monitor the agreements reached in the first phase.

Second phase of dialogue

The Cortizo government announced that the second phase of dialogue would begin on 7 October. This will involve those who participated in the first stage as well as representatives of the business sector, the national government, and other sectors. Topics up for discussion include: 1) food security and sovereignty; 2) human rights, environment, and indigenous groups; 3) housing and habitat (public infrastructure); 4) education, youth, and social development; 5) health and social security; 6) labour; and 7) transportation and logistics. 

Following significant progress in combating hyperinflation, Venezuela is again seeing consumer price increases accelerating.

According to the government, inflation was 237% in 2022. The Observatorio Venezolano de Finanzas (OVF), an independent economic think tank established by the political opposition, put that figure at 305%. That’s still a dramatic improvement from the 686% recorded by the central bank in 2021, or nearly 2,968% the year before. The problem is that the recent increase doesn’t look like a one-off event but a trend. December was the fourth consecutive month that inflation rose.

That is bad news for many reasons. Inflation hits the poor and the elderly the hardest, and spares those with physical or foreign assets the most. Pensioners now need 53 minimum monthly salaries to pay for a single basic food basket worth US$371, according to the OVF. That exacerbates an already stark humanitarian crisis that has triggered one of the world’s biggest migration waves, with over 6m Venezuelans having left their country since 2015. It undermines business confidence and predictability, leading to less investment and credit, potentially triggering a downward spiral just as the economy was beginning to show some signs of recovery [EB-21-11].

One possible consequence is that resurgent inflation could spur the government to accelerate market-oriented reforms and open of the economy to attract much-needed capital. The Venezuelan government last year had managed to slow hyperinflation in part by tightening fiscal and monetary policy but mainly by selling billions of dollars to prop up the currency and thus prevent imported goods from becoming more expensive. That requires a positive current account balance to replenish the dollars the central bank uses to intervene in the currency market.

Estimates by the Venezuelan financial consultancy firm Síntesis Financiera indicate that the central bank plowed some US$3.6bn into the currency market last year, offering as much as US$200m in a single auction. That compares to ceilings of US$80m in 2021 and US$35m in 2020. Official figures show the central bank’s reserves fell by nearly US$1bn last year. But much of the hard currency came straight out of the treasury of state-owned oil company Petróleos de Venezuela (Pdvsa), according to Asdrúbal Oliveros, economist and directing partner at the Caracas-based consultancy Ecoanalítica. 

Then in the second semester of last year the price of oil dropped more than 40%, squeezing Venezuela’s budget and prompting a run on the bolívar. The currency went from B$5.39/US$1 on 27 July to B$17.1/US$1 at year-end, and B$22.65/US$1 in early February. In an economy heavily dependent on imported consumer and capital goods, that translated into sky-rocketing prices on everything from food and medicine to clothes and shoes. Worse yet, the pass-through was across the board and included services. Transport, housing, education, and restaurants were all up more than 50% alone in December, according to the OVF.

Unsurprisingly, President Nicolás Maduro has become increasingly desperate to get his hands on cash, warning that he would break off negotiations with the opposition if frozen Venezuelan funds abroad aren’t released urgently [EB-23-01].

Uruguay’s left-wing opposition Frente Amplio (FA) coalition is leading the way in the race to the general elections which will be held on 27 October this year, according to an opinion poll published on 29 July by the local consultancy Cifra.

Cifra said its polling shows FA has 45% support while the Partido Nacional (PN, Blancos), the senior partner in the incumbent ruling centre-right coalition is in second place with 27% backing. Junior partners in the ruling coalition come further down the ranking. The centrist Partido Colorado (PC, Colorados) is in third place with 9% support, the right-wing Cabildo Abierto (CA) has 3%, and the centre-left Partido Independiente (PI) has 1%. These parties are competing separately in the first round of the presidential race, but if their voting intentions are aggregated, they reach 40% support, five points behind the FA.

Cifra also reported that 13% of respondents are undecided or planning to cast a blank ballot. This suggests that with three months to go before polling day the race is still very much open. In terms of the presidential contest, it is largely a two-horse race between FA candidate Yamandú Orsi and PN candidate Álvaro Delgado.

A noteworthy feature of the survey is that support for Delgado has dropped a significant six percentage points since June. The fall has shown up in other polls too. The candidate has been quick to claim the drop is likely temporary, due to short term “political noise” around a case in the department of Artigas where two PN politicians have been found guilty of irregularities in the management of overtime payments made to departmental employees. If Delgado is right, the gap between him and Orsi will likely narrow again in the coming months.

Gerdau results

Brazilian steelmaker Gerdau released its second quarter earnings results on 31 July, which showed a drop in profits. The company’s adjusted net profit for the quarter came to R$945m, down 24% from the previous quarter and down 56% from the second quarter of 2023. In its financial report, the company highlighted that demand for steel was affected by struggles in Brazil’s automotive industry caused by the impact of severe floods on Rio Grande do Sul’s industrial sector, among other factors contributing to lower profits.

Panama’s President José Raúl Mulino visited France this week, holding a meeting in the Élysée presidential palace in Paris with his French peer Emmanuel Macron on 21 October. Mulino lobbied Macron to pledge support for Panama’s removal from the blacklist drawn up by the European Union (EU) of “jurisdictions which are deemed non-cooperative” in terms of compliance with international standards of tax transparency and fair taxation.

On 8 October, less than two weeks before President Mulino’s visit to France, the EU removed Antigua & Barbuda from its blacklist but opted to leave Panama on it, along with 10 other jurisdictions, including Anguilla, Trinidad & Tobago, and the US Virgin Islands within the region and extra-regional actors in Oceania and Russia. Mulino reacted at the time by summoning EU ambassadors to explain the decision.

The decision by the European Commission (EC) to keep Panama on the EU’s blacklist was a setback for Mulino, who came to power promising to play hardball, saying that his government would not allow countries that blacklisted Panama to obtain “any tenders for work, any contracts, any consultancy”. It was all the more frustrating for the Mulino administration as nearly a year earlier, the Paris-based Financial Action Task Force (FATF) of the Organisation for Economic Co-operation and Development (OECD) announced that it was removing Panama from its ‘grey’ list of countries that are not doing enough to combat money laundering. The Panamanian government hopes that without the stigma attached to being on the lists, the country will receive increased foreign investment, job creation, and more accessible lines of credit.

In a joint statement after the meeting, the French government recognised and welcomed the “efforts” made by Panama that resulted in its removal from the FATF list and congratulated it for the financial sector reforms undertaken in line with the recommendation of the OECD’s Global Forum and the EC with a view to its “swift removal” from the EU’s blacklist. The French government said it would “support the process”, while stopping short of overtly backing Panama’s removal from the blacklist.

Mulino had also hoped to use his European trip to meet German chancellor Olaf Scholz and EU officials in Brussels to drum up further support for Panama’s position against the blacklists, but the foreign ministry said it had not been possible to make these arrangements and that a meeting with Scholz was now being planned for 2025. 

Strengthening bilateral relations

President Macron accepted an invitation from President Mulino to visit Panama next year. Macron also pledged France’s support during Panama’s upcoming stint as a non-permanent member of the United Nations Security Council (UNSC) for the 2025-2026 term. The two heads of state promised to maintain close contact over international crises, including “Russia’s war of aggression in Ukraine, the Middle East, and Venezuela”.

An apparently credible threat to assassinate Christopher White, the mayor of the municipality of San Bernardo in the Chilean capital Santiago and a member of the left-wing opposition Partido Socialista (PS), has been widely condemned across local governments.

The prosecutor’s office said on 1 September that it was investigating a serious threat against White, but it gave no further details. The local daily El Mercurio, however, said the police had intercepted communications that showed Juan Flores Valenzuela (‘Indio Juan’), a criminal who had escaped jail earlier this year from the prison where he had been serving a life sentence for murder, had been planning to attack White on 16 September, with the assistance of an associate, Tomas González (‘El Pelao’).

Police intervened successfully and re-arrested Indio Juan. The case is an important indicator of the rising power of criminal gangs in various parts of Santiago, with some seeking what amounts to effective control of territory. White was apparently targeted because he is seen as symbolic of municipal resistance to the spread of criminal gangs.

• Death threats

Mayor Christopher White says he has received five death threats since taking office in 2021, mainly in response to a municipal crackdown on illegal cigarette sales and drug sales. His administration has also targeted the spread of ‘narco-mausoleos’, brick-built memorial structures erected locally that glorify dead gangsters and mark areas of gang control.

The mayor of La Florida, Daniel Reyes (Independent), said “organised crime is seeking to rule using fear, but this will not work, it won’t intimidate us and it won’t make us retreat. The state must persecute, capture and punish these criminals with maximum severity. We mayors will not hand neighbourhoods or public spaces to them.”

The spread of municipal violence is a challenge to the radical-right government led by President José Antonio Kast, who won last year’s election on an anti-crime ticket. White’s case is being closely watched by other mayors, many of whom fear the country has reached a tipping point: in certain areas crime may no longer be a matter of localised violence and drug trafficking, but rather a direct and comprehensive threat to municipal government across the board.

Lower priority over security law

The government said this week that it is reducing the priority ranking of its controversial package of security reforms, which is currently awaiting senate approval.

The downgrade is purely tactical, designed to give the government more time to persuade senators to back the measure. While still labelled as “urgent”, the downgrade increases from 15 to 30 days the period in which the senate can add amendments.

Arguably the most controversial aspect of the reform is the provision that allows the government to declare an eight-month state of emergency without seeking prior congressional approval.    

Development: On 26 July Daniel Abugattás Majluf, the right-hand-man of Peru’s president-elect, Ollanta Humala, was elected president of congress.

Significance: Abugattás’s assumption, two days before Humala is inaugurated on 28 July, demonstrates that Humala’s team can handle congress - Abugattás’s election was agreed with the other main parties in congress. What these parties get in return, in terms of committee presidencies, will only emerge later.

Key points:

• Congress’s management committee, which Abugattás will chair, looks businesslike: Manuel Merino, from former President Alejandro Toledo’s (2001-2006) Perú Posible is on it as is Yehude Simón, from the right-wing Alianza por el Gran Cambio, and Michael Urtecho, from the centre-right Solidaridad Nacional. Simón had been picked by the outgoing president, Alan García, as prime minister in 2008. Simón resigned after 34 people, mostly police officers, were killed at Bagua in June 2009.

• The ‘Fujimorista’ Fuerza 2011 was the only congressional group not to vote for the slate headed by Abugattás. Fuerza 2011 said that it was opposed to the idea of an agreed slate for the management committee. The ‘Fujimoristas’ have 37 of the 130 seats in congress.

• Abugattás and his slate were backed by 93 of the 109 congressmen present at the vote. The other 21 members did not turn up for the first session of the newly elected congress.

PERU | Equipo económico. El preeminente economista peruano, Hernando de Soto, asesorará a Keiko Fujimori. El dijo al diario El Comercio en una entrevista la semana pasada, que él había sido invitado por Fujimori para usar la estrategia de su Instituto Libertad y Democracia (ILD) un think-tank para “combatir la pobreza a través de medios institucionales” y para mostrar que la inversión podría ser compatible con el desarrollo social. De Soto, que se hizo de una reputación internacional con sus estudios de la economía informal en Perú en los ’80, y que sirvió como representante especial en Washington para el Presidente Alan García para hacer lobby exitosamente por un tratado de libre comercio (TLC) con EU, dijo de Keiko Fujimori era “más abierta que su padre” y que él no consideraba que ella sea parte de la corrupción y las violaciones contra los derechos humanos que existieron durante el gobierno de su padre. Fujimori puede haber sentido que ella necesitaba un apoyo de alto perfil después que su rival Ollanta Humala obtuvo el apoyo del laureado Nobel de literatura, Mario Vargas Llosa.

The lengthy mystery over Venezuela’s executive controlled off-budget National Development Fund (Fonden) is gradually being solved by some tenacious opposition bloggers. Even taking into account the fact that these blogs are openly against the government led by President Hugo Chávez, the numbers as provided by the finance ministry don’t appear to lie. Yet the Fonden doesn’t seem to have much of an economic impact locally, suggesting poor management and, inevitably, official malfeasance.

It all began in April when Carlos Ramos, an opposition deputy in the unicameral national assembly, requested details of Fonden expenditure in 2010 from the AN president, Fernando Soto Rojas of the ruling Partido Unido Socialista de Venezuela (PSUV). Finance Minister Jorge Giordani duly provided a statement of accounts for the period 2006-2010 (the Fonden was created in 2005). Ramos passed the data onto a well-known economist and blogger, Miguel Octavio, who made it public.

According to the figures, the Fonden received some US$69bn in total between 2006 and 2010, mainly from the government’s cash cow, the state oil company Petróleos de Venezuela (Pdvsa), as well as from the petro dollar-flush central bank (BCV). Octavio was quick to spot that some US$29bn in Fonden funds appear to have gone missing since its creation in 2005 – immediately pointing up a US$29bn discrepancy between the reported amount assigned to projects and the reported figure for what has been disbursed (to 140 projects). That is the equivalent of the country’s total national reserves that are unaccounted for. There is some speculation that missing US$29bn is the cooperation aid Venezuela has delivered to its Caribbean and Central American allies under Petrocaribe and the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA).

Octavio and a fellow blogger broke down the accounted-for US$40bn of expenditure by sector, with some intriguing discoveries. Curiously, the biggest share of Fonden assignations went to the Energy and Oil Ministry, which received nearly US$16bn of the $40bn. Of this, an estimated US$6bn was destined for the so-called Comisiones Mixtas Cuba-Venezuela, with the rest apparently heading back to its original source: Pdvsa. The transport and communications ministry received US$7.3bn. This ministry is responsible for the country's infrastructure, arguably the most logical use for windfall funds like the Fonden.

The defence ministry was assigned a whopping US$4.9bn. It’s worth remembering that this amount is on top of official annual budget defence expenditure, which according to London’s International Institute for Strategic Studies, totaled US$13.36bn over the period 2007-2010. Of the US$9.6bn spent through the Fonden in 2010 (which amounts to 13% of the 2010 budget of US$74bn), some US$3bn was given to the electricity ministry to deal with the power crisis.

GDP results
The economy expanded by 2.5% in the second quarter of 2011 compared with the same period last year, the central bank revealed, and by 3.6% in the first half. Venezuela’s GDP slowed, after having grown by 4.5% in the first quarter on the same period in 2010, off the back of an 18-month recession. Oddly, the construction sector declined by 2.3% year-on-year in the second quarter despite President Hugo Chávez setting ambitious targets for housing construction in 2011 and 2012. The most significant figure was for the oil industry, which grew by 0.8% during the second quarter, having contracted by 0.5% in the first quarter. The central bank said the oil sector’s recovery was due to a 4.4% increase in oil production and also higher oil prices. The second quarter saw a 56.3% increase year-on-year in exports from US$16.06bn to US$25.12bn, largely because of the increase in crude prices. Imports grew 25.3% over this period, from US$10.01bn to US$12.53bn.

• On your marks…

On 13 September the head of Venezuela’s national electoral council, Tibisay Lucena, set the scheduled 2012 presidential elections for Sunday 7 October, with the regional elections for state governors scheduled for December 2012 and the local elections (for mayors and municipal councillors) in April 2013.

It’s been another politically tricky year for the administration led by President Sebastián Piñera. Despite Chile’s solid economic performance, the government continues to face simmering social discontent with various social groups, led by students, demanding more equitable wealth distribution. President Piñera has sought to appease these demands by offering minor concessions. This only served to embolden the political opposition, which has made life difficult for the ruling Coalición por el Cambio in congress as it looks to position itself ahead of the upcoming electoral season, which starts with this month’s (October 2012) municipal elections and culminates with the presidential election late next year (2013). The Coalición por el Cambio would like to limit an further political damage ahead of the elections, but it finds itself bracing for yet another bruising battle in congress, as the executive stubbornly sticks to its plans.

Following a deal on the minimum wage [RBS-12-08] and the approval of a fiscal reform to raise funds for education [RBS-12-09], the 2013 budget is the last hurdle in congress for the Piñera government, which is trying to address the various social demands upon it without having to cede too much to the demonstrators. To date it has met strong resistance to its proposals, both in congress and on the streets. The budget negotiations will be no different, as it represents the last chance for the government’s opponents to force it to change its economic policies.

The draft budget was submitted to congress by Finance Minister Felipe Larraín on 30 September, just meeting the constitutional deadline. Larraín proclaimed that it sought to “address the country’s problems and the needs of all Chileans with fiscal responsibility”. He added that the proposal not only looked to fulfil assumed commitments but also to guarantee economic growth. “We don’t want bread today and hunger tomorrow; we want a budget that sets the bases for Chile’s development over the next couple of years”, Larraín stated. According to Larraín, the US$62bn budget represents a 5% increase on the 2011 plan, on the back of last year’s real annual growth rate of 6.0%.

Larraín made much of the fact the bulk of the funds 68.3% have been assigned to social spending. This includes US$1.2bn in additional revenues expected from the newly approved fiscal reform. This will be destined exclusively for education, taking total expenditure on education to US$12.8bn, up 9.4% increase year-on-year (and representing 4.6% of GDP). In concluding his presentation, Larraín called on congress to approve the budget well in advance of the 30 November deadline in order to avoid a repeat of last year, when it was only approved at the last minute. With the municipal elections scheduled for 28 October, the government will also be hoping that the opposition does not try make an electoral issue of the budget talks.

After Larraín’s presentation to congress, President Piñera gave a nationally televised address in which he presented details of the budget to the public. He stressed that the 2013 plan represents the “biggest investment in education in our history”. This may be the case, but some critics were not satisfied, arguing that the government could have been more generous. While such sniping may have been expected from the opposition, there were also complaints from within the ranks of Coalición por el Cambio. Senator Hernán Larraín, a prominent member of the senior coalition partner Unión Demócrata Independiente (UDI), pointed out that in addition to assigning all of the additional funds from the tax reform to the education sector, the government should add additional funds on top of that to reflect the 5% overall increase in the budget. Otherwise, he argued, its “credibility would be jeopardised”. This was quickly rejected by the executive on the grounds that the slated 9.4% increase in education spending will far exceed the general 5% increase in other sectors.

Senator Larraín’s comments may have been intended as a way to tacitly distance the conservative UDI from the executive ahead of the municipals. Curiously, in closing his national address Piñera asked congress to hold a “responsible” debate on the budget and not to “fall for the siren calls of populism, irresponsibility and demagogy”. It was unclear whether the president’s comments were aimed at the opposition or legislators from the ruling alliance.

The municipal campaign begins

The official campaign period for the municipal elections began on 27 September. Mayoral candidates launched their campaigns a little nervously, in the knowledge that the municipal polls will be the first under new electoral reforms approved last year [RBS-12-02] aimed at encouraging younger voters. Also aware of this is the student protest movement, which also in late September re-launched its campaign for a free state-run quality education system, staging mass demonstrations in the capital Santiago and outside congress in Valparaíso that coincided with budget day. The students complain that the proposed education spending is not enough and argue that government’s reform plans for the education sector and not radical enough and will only reinforce the existing system. University students are particularly critical of the plans to assign more funds toward a reform of the current state-sponsored credit system for higher education (CAE), which they say will perpetuate an unfair system. The confederation of university students, Confech, also points out that the bulk of the slated spending increase (US$9.06bn) has been allocated to the primary and secondary school sectors, rather than the third level sector.

On 1 October President Piñera came out in defence of the education sector budget, noting that “1 in 3 pesos in the [2013] budget is allocated to education”. Piñera added that total education spending would go beyond the US$12.08bn directly allocated to the education ministry in the budget to include also two additional fiscal measures: the reform of the CAE system and an increase in direct government contributions to public universities. He asked critics to look properly at the executive’s plans before “irresponsibly” calling for more spending (see sidebar).

On 3 October Education Minister Harald Beyer presented the higher education sector budget in detail to the Confech and the public universities’ deans’ council (CRUch).

Beyer said that US$2.28bn has been directly allocated to higher education and stressed that the total invested in the sector by the government will higher still. According to Beyer, the reform of the CAE - which will reduce interest rates on loans from 6% to 2% upon its take over by the State - represents an additional US$220m cost that will be absorbed by the government. He also noted that public universities stand to receive US$366m in direct contributions from the government, up from US$250m last year, for the improvement of their services. Yet the students and the CRUch seemed unconvinced. The CRUch vice-president, Juan Manuel Zolezzi, responded, “We and Confech expected more”. According to Zolezzi, if the government really wanted to improve public higher education it would have to increase its direct contributions “by at least 20%”.

The following day (4 October) local pollsters Adimark published its September poll findings, according to which the government’s approval rating fell four percentage points to 32%, from 36% previously. According to Adimark, the decline owed to the public’s continued negative perceptions about the government’s handling of certain issues like crime (only 17% approved of its performance) and education (23%). Commenting on the poll, the government spokesman Andrés Chadwick remarked, “No government wants to fall in the polls...but I don’t think that this will have an effect on the municipal elections”. Yet in the same breath Chadwick declared that the municipal vote “ a bigger poll, that will tell us how things stand in the country”.

• Piñera highlights budget’s responsibility

President Piñera described the 2013 budget as “responsible” amidst the global economic crisis. “We could irresponsibly increase spending, but what for? To end up like Greece or Spain?” he queried. He added that it would be all too easy for the government to say yes to everyone’s demands, but that it not “fall into this irresponsibility”. Chile’s budget is a “serious” one that will allow it to address its social issues while maintaining economic growth, he observed.

• Enríquez-Ominami promises free public education

On 4 October Marco Enríquez-Ominami formally launched his bid as the 2013 presidential candidate for his Paritdo Progresista (PRO). At the Caupolicán theatre in Santiago, Enríquez-Ominami promised that if elected as president he would propose drafting a new constitution to include a comprehensive tax reform so as be able to offer free public education for all. A former deputy for the Partido Socialista, Enríquez-Ominami quit the PS in 2009 to launch his first presidential bid as an independent in 2010. He took 20% of the vote in the first round, which many believe contributed to the Concertación’s defeat.

BRAZIL | BMW opts for Santa Catarina. The vice-president of German car-manufacturer BMW, Ian Robertson, revealed last week that the firm had decided to build its first production plant in Latin America in the southern Brazilian state of Santa Catarina. BMW first expressed its desire to open a new plant in Brazil, which has become one of its most dynamic markets, in August last year, but it was undecided as to whether it would be located in Brazil’s industrial hub of São Paulo or elsewhere.

In addition the firm was also looking to secure the full support of the Brazilian government led by President Dilma Rousseff that wherever the company decided to build its plant, it would benefit from some of the tax incentives that were offered to other automobile sector manufacturers and that it would not be negatively affected by the new content rules that are currently being prepared by the government to encourage manufacturers to produce their vehicles in Brazil.

The Brazilian government’s delay in providing a definitive answer not only stalled BMW’s decision, but also sparked intense speculation that the firm would opt to build its first Latin American plant in Mexico instead. However, after almost a year of conversations Robertson made the announcement after holding a private meeting in Brasília with Rousseff and the governor of Santa Catarina, Raimundo Colombo.

According to Robertson, the company has now decided that it will build its new US$500m plant in the town of Araquari, Santa Catarina, where it will carry out the “the complete assembly” of a range of its vehicles to be sold initially in the domestic market. Robertson added that BMW, which has seen its sales in Brazil increase by 40% in the last five years to reach 700,000 vehicles a year, hopes that the establishment of the plant will help it overtake its US and Japanese rivals, General Motors and Toyota, as the main player in the Brazilian domestic market in the next six years.

Meanwhile, Colombo celebrated the decision pointing out that the plant is slated to create 6,000 direct jobs in the next five years, which would help to promote economic activity in the state and also increase its “visibility”.

CHILE | Successful bond issue. On 25 October Chile’s finance minister, Felipe Larraín, said that a proposed US$1.5bn sovereign bond issue in international markets had been a complete success, giving Chile “a vote of confidence”.

Last year Chile issued US$1bn in 10-year bonds with an interest rate of just 3.3%, the lowest in its history. This encouraged the Chilean government to plan for another similar issue this year in order to take advantage of the low yields that the country can now afford to offer. It secured congressional approval for the issue at the start of the year, which meant that the issue could be carried out any time before the 30 December.

Larraín then announced on 25 October that the government had decided to offer two bond issues (one of 10-year bonds and another of 30-year bonds) for US$750m, with the 10-year bonds offering an interest rate of 2.38%, the lowest-ever for any Latin American country. Similarly, the interest rate of 3.71% for the 30-year bonds was also one of the lowest for an emerging economy. The bonds were oversubscribed as demand for them was registered at US$10bn, which resulted in all of them being allocated within just a few hours.

Afterwards in a press conference in New York, where the issue was formally launched, Larraín said that “the extremely low levels of financing and risk premium achieved are proof of investors’ confidence in Chile... [and]...the management of the domestic economy”. In this sense Larraín said that the funds raised would not be repatriated to Chile but rather kept in foreign accounts so that the large amount of capital would not have negative effects on the Chilean peso’s exchange rate, which is currently considered to be overvalued.

Explaining the government’s decision to tap international markets once again, Larraín said that “when a country can contract debt at 2.4% it is not just reasonable but responsible to obtain debt”, once again highlighting that the current scenario presented a very good opportunity for the country to raise funds and restructure its debts.

According to Larraín, the majority of the funds raised from the latest issue would be used to pay off Chile’s US$840m debt that is due to expire in January next year, a significant proportion of Chile’s US$3bn outstanding bond debts.

POLITICS| Polls spell trouble for Villarán. On 27 January a Peruvian daily, La República, published a survey by pollsters GFK in which 60% of respondents said that the mayor of Lima, Susana Villarán, who is facing an unprecedented recall vote on 17 March, should step down. Only 39% said she should remain in her post. The Lima-wide poll suggests growing opposition to Villarán. Her approval rating was 29%, down from 34% in a previous GFK poll in December. Her disapproval rating was 67%, up five percentage points on December. The latest poll comes on the heels of the decision by the Lima district of San Juan de Lurigancho to declare Villarán a ‘persona non-grata’ after a 24 January extraordinary council meeting. The move was in response to remarks made by Villarán, while announcing new infrastructure works to benefit the district, considered insulting by San Juan de Lurigancho residents.

SECURITY | Another prison disaster in Venezuela. Prisons Minister Iris Varela put the death toll from the latest prison riot at 58 on Sunday (27 January), although subsequent local press reports, citing the local hospital director put it at 61. The disaster took place at the Centro Occidental penitentiary, near the city of Barquisimeto. Ruy Medina, director at the Barquisimeto hospital, said 103 people were being treated for injuries. Varela said the riot broke out after authorities moved to confiscate arms – the first such weapons seizure since 2009. She said the government was moving to “close a cycle of violence”.  There were 2,003 men and 132 women held in the prison, according to the minister, well above its capacity (850). The opposition has again called for Varela’s removal over the spate of fatal riots in Venezuela’s heavily overcrowded prisons in the past year.

ECUADOR | Limestone deposit. On 28 January Ecuador’s national mining firm (Enami) announced the discovery of a large limestone deposit in the rural Zumba area of Zamora-Chinchipe province in the southern Amazon region. According to an Enami statement, a series of studies carried out on the Isimanchi deposit and audited by the Committee for Mineral Reserves International Reporting Standards (Crirsco) found that the deposit may contain some 67m tonnes (t) of high purity (85%) limestone.

Limestone is one of the main materials used in the production of cement and Enami has calculated that the deposit has a potential value of between US$300m and US$400m, given that currently the international market price of limestone fluctuates between US$5 and US$6 per tonne. Enami CEO Santiago Yépez said that the results show that the deposit has a lot of potential and that the idea now is to move on to the next phase and begin analysing the viability of commercially exploiting the site.

According to Yépez, this next phase is to be carried out by the Empresa Pública Cementera de Ecuador (EPCE), the national state-owned cement firm. Pointing out that Isimanchi is the first advanced exploration project carried out in the country “by a national firm and Ecuadorean technicians”, Yépez said that the its development “reaffirms Enami’s commitment towards changing the country’s productive matrix” as intended by the government led by President Rafael Correa.

On the same day Strategic Sectors Coordination Minister Rafael Poveda presented the government’s ‘investment catalogue of strategic projects’. Poveda said that the catalogue comprises a set of ‘mega projects’ worth US$28bn all aimed at changing the country’s productive and energy matrix. He reiterated the Correa administration’s goal of promoting the industrialisation of the domestic economy so as to break with the current raw material export-dependent model. The catalogue includes a number of projects, including energy generation, hydrocarbon production and steel production which, according to Poveda, will provide a “useful tool” for national and foreign investors to get a clearer picture of the strategic projects that the government intends to pursue over the next three years.

COLOMBIA | Argos breaks into the top 20. On 22 January Colombia’s leading cement producer, Argos, announced that it had completed the purchase of a cement producing plant and other related assets in Florida (US) from Vulcan Materials for US$720m. The deal, which must still be approved by US regulators, will allow Argos greater access to the US market as well as consolidate the firm’s presence across the Caribbean Basin, where it now has production facilities in Colombia, Central America & the Caribbean and also in North America.

The new plant will allow Argos to increase its installed cement production capacity from 17m tonnes (t) a year to 20m t a year, turning the firm into the second largest cement producer in Florida and the south-eastern US. In fact sector analysts estimate that the deal will allow Argos to go from being the world’s 21st largest private cement producer to the 18th.

Argos president, Jorge Mario Velásquez said that the deal was part of the firm’s bid to take full advantage of the recovery of the US’s construction sector following the pronounced slump it exhibited in 2007. Velásquez explained that back in 2007 cement consumption in Florida amounted to 11m t a year, roughly the same level of cement demand in Colombia today. And, while after the crisis demand of cement in Florida fell to 4m t a year, it is expected that the incipient recovery will result in demand moving back towards 2007 levels by 2020. As Rodrigo Niño, the president of real estate firm Prodigy Network, explained, local demand for new buildings in the US has “shot up” as the recovering US economy and the strengthening US dollar is attracting investors from all over the world.

Meanwhile, Velásquez also pointed out that while Argos expects that real estate construction projects will be one of the drivers in the growth of cement demand in the US this year, the US government’s US$7.3bn road infrastructure development plans would also significantly help boost demand.

• Chevron praises Pdvsa partnership

On 28 January Venezuela’s state owned oil firm, Petróleos de Venezuela (Pdvsa) issued a press release with a statement by Kelly Hartshorn, Latin American manger at US oil major Chevron, in which she praised the recent performance of Petropiar, Chevron and Pdvsa’s joint venture in the Orinoco Belt. According to the statement, after conducting her first visit to the Orinoco Belt, Hartshorn praised the “excellent performance of the human resources that make production possible at Petropiar”. Petropiar produces 158,000 barrels of crude a day from its 507 wells in the Orinoco Belt, and Hartshorn concluded by stating that “We feel proud of the results obtained and of being partners in a firm such as Petropiar”.

Faltando menos de un mes para el comienzo de la Copa Mundial de la Fifa, las huelgas y otras medidas de presión están convulsionando a muchas de las ciudades anfitrionas del torneo en Brasil. En Rio de Janeiro, una huelga de 48 horas de los choferes de autobuses y cobradores de pasajes, resultó en que menos del 18% de la flota de autobuses operasen. La falta de transporte público es solamente el rostro más visible del malestar que actualmente conmueve a la ciudad: los maestros, ingenieros municipales, arquitectos, geólogos, y personal de los museos públicos también han estado en huelga, como lo han hecho los guardias de bancos de seguridad privada.

Los maestros están actualmente en huelga en São Paulo, y Manaus. Los trabajadores de la fábrica de cerveza de Ambev en Manaus están amenazando con acciones de presión antes de la Copa Mundial. Los recolectores de basuras en Belo Horizonte han abandonado sus escobas. Estudiantes del Movimento Passe Livre (MPL), el movimiento que aboga por gratuidad del transporte público para los estudiantes, que dio inicio a las grandes protestas del año pasado, organizó una significativa demostración afuera del ayuntamiento de Porto Alegre. El 13 de mayo, la policía militar y el servicio de bomberos protestaron en Recife; el 14 de mayo fueron a la huelga, forzando al gobierno local a llamar al ejército. En Cuiabá la policía militar está amenazando con declararse en huelga durante el torneo. Personal de la aerolínea Grupo Latam (que comprenda a LAN y TAM) también han amenazado con abandonar sus puestos de trabajo durante la Copa Mundial.

Fuera del país, el personal en 13 embajadas y consulados brasileros, incluidos los de Nueva York, Atlanta, Los Angeles, Londres, Montreal, Bruselas, y París, también están en huelga, justo cuando muchos potenciales turistas de la Copa Mundial están buscando visas. La embajada de Brasil en Berlín también fue atacada a inicios de la semana por un pequeño grupo de activistas que embadurnaron el edificio con el eslogan “Não vai ter Copa” [sic] (“No tendrán Copa Mundial”). El vandalismo indujo a algunos comentaristas brasileros a considerar si la Copa Mundial atraería a manifestantes internacionales anti-capitalistas, quienes podrían incrementar el número de los ‘Black blocks’ locales.

Una prueba clave de la fuerza del movimiento anti-Copa Mundial se producirá el 15 de mayo: ‘el día internacional de lucha contra la Copa Mundial’. Se han planeado actos en 50 ciudades brasileras, aunque es probable que el epicentro sea en São Paulo. Todas las ciudades anfitrionas tienen su propio “comité popular de la Copa Mundial”, pero São Paulo es el más grande y mejor organizado. De acuerdo con un comunicado de prensa del grupo, 90 diferentes grupos se han comprometido a asistir a la protesta, entre ellos el MPL y el Movimento dos Trabalhadores Sem Teto (MTST).

El MTST actualmente está ocupando una extensión de tierra a una distancia de alrededor de 4kms del estadio Itaquerão, que será anfitrión del partido de apertura de la Copa Mundial. La semana pasada, el grupo ocupó brevemente las oficinas de un número de grandes conglomerados de construcción que obtuvieron lucrativos contratos gracias a la Copa Mundial, incluidos Odebrecht, OAS, y Andrade Gutiérrez.

En las ciudades anfitrionas a través de Brasil, la rama de la policía militar que tendrá la tarea de manejar el orden público, el Batalhão de Polícia de Choque, está actualmente realizando demostraciones públicas, aprobadas por la oficina federal de investigación de EU (FBI), sobre cómo ellos deben intentar contener las protestas durante el torneo. En Rio, la próxima demonstración está planeada para el 15 de mayo, pocas horas antes de las protestas anti-Copa Mundial.

El ministerio de turismo predice altas ganancias con la Copa Mundial

Cifras del ministerio de turismo de Brasil publicadas el 14 de mayo, predicen que los turistas que vendrán Brasil para la Copa Mundial de la Fifa gastarán un total de R$6,7mm (US$3mm) durante el torneo, que va desde el 12 de junio hasta el 13 de julio. Se espera que Rio de Janeiro reciba la mayor parte: R$1mm (US$450m); seguida de Brasília, R$888m (US$402m); y Fortaleza, R$782m (US$354m). Curitiba está en el fondo de la lista de las 12 ciudades anfitrionas, con una proyección de R$297m (US$134m). Está proyectado que los 300.000 turistas extranjeros que se espera que visiten Brasil, basado en la venta de entradas desde principios de abril, gasten un promedio de R$5.500 (US$2.500) excluyendo el costo de pasajes aéreos.

• “No reaccione”

La policía civil de São Paulo circulará un folleto en inglés, español, y francés a los turistas durante la Copa Mundial de la Fifa que llegan a la ciudad sobre cómo comportarse en caso de un asalto. El mensaje básico es: “No reaccione. No grite. No discuta”. El presidente del comité organizador de la Copa Mundial en la ciudad, Mario Leite, alega que muchos de los visitantes extranjeros en Brasil no estarán acostumbrados a lidiar con el delito callejero como los turistas brasileros.

President Juan Manuel Santos and his finance minister, Mauricio Cárdenas, celebrated the passage through both chambers of congress over the last week of an urgent tax reform bill designed to cover a Col$12.5 trillion (US$5.2bn) budget shortfall in 2015. The political opposition put up fierce resistance, especially in the senate, where the government also had to weather significant criticism from within the ruling coalition. Cárdenas maintains that the tax reform will help buttress the economy at a time when oil prices are declining rapidly and the US dollar is appreciating. His detractors contend that the reform will damage growth by placing an extra burden on the business sector.

The senate approved the tax reform on 11 December by 61 votes to 20 after a long debate. The bill had been altered to reflect an eleventh-hour compromise thrashed out the day before by finance ministry officials and representatives of the national trade council (CGN), which comprises 21 business organisations, to help smooth its passage through the senate. The standout concession by the government was a promise to phase out the wealth tax. The wealth tax will impact anyone with liquid assets worth more than Col$1bn (US$419,800) to a maximum annual rate of 1.15% in 2015, 1% in 2016 and 0.4% in 2017, before expiring in 2018.

The wealth tax had been the major bone of contention with business leaders, who argued, among other things, that it would deter investment. In exchange they agreed to accept a gradual increase in a surcharge on a tax on profits (CREE in the Spanish acronym) above Col$800m (US$332,000) of 5% in 2015, 6% in 2016, 8% in 2017 and 9% in 2018. They also accepted the extension of the transaction tax dubbed ‘cuatro por mil’ (which sees all customers pay four pesos for each 1,000-peso bank transaction) for a further four years.

The reform also includes a 10% surcharge for all those omitting to declare foreign assets of more than Col$8bn (US$3.9m) and a four-year jail sentence, as well as an initiative to combat tax evasion which the government hopes will net Col$20 trillion (US$9.95bn) between 2015 and 2018.

“The government wanted to cook the reform in a microwave. This will be damaging for the private sector and for job creation,” Senator Iván Duque of the right-wing Centro Democrático, led by Senator Álvaro Uribe, said. Duque added that it was “a myth that the reform only affects a minority, companies”. Uribe himself said that the fact that the business sector had “reluctantly” agreed to the tax reform did not make it good. “The problem is not the members of the public with Col$1bn assets but those with exorbitant sums,” Iván Cepeda, of the left-wing Polo Democrático Alternativo (PDA), said.

More damagingly for the government, senators from within the ruling coalition also criticised what they described as piecemeal tax changes to meet immediate revenue needs when more long-term structural changes were required. “The government should pass a reform for the next 20 years and not a fragile little reform each year,” Senator Juan Carlos Restrepo, of Cambio Radical (CR), said. David Barguil, president of the Partido Conservador (PC), also criticised the fact that the reform did not get to the root of the problems in the tax system.

The senate went some way towards meeting these concerns by approving the creation of a special commission to study a major structural tax reform. How far this goes is a moot point. Cárdenas countered the criticism by arguing that it was more appropriate to make “adjustments that have positive effects like the present reform”. He added: “To rewrite the tax statutes would take our country down a route of too much uncertainty; this is not going to happen (our italics).”

On 15 December the tax reform bill made it through the lower chamber without any further changes. It now just requires ratification by President Santos, who will be relieved that the hole in the budget has been plugged. The trouble is this hole has been caused primarily by falling oil production, but oil prices are also falling alarmingly now. The price of oil has fallen to around US$60 per barrel (/b), while the budget is based on an assumption of US$98/b. The oil sector accounts for 6% of GDP and exports of oil and oil derivatives were worth 54.3% of Colombia’s total exports in 2013 (US$32bn of a total US$59bn).

This will impact on Colombia’s economic growth in the final quarter of the year and 2015, but Cárdenas was able to celebrate the release of encouraging growth figures for the third quarter by the national statistics department (Dane) this week. The third quarter figure of 4.2% growth was down only slightly on the 4.3% growth posted in the second quarter. The main driving force behind growth in the third quarter was the construction industry, which expanded by 12.7% on the same period last year.

Some in the business sector voiced concern that the tax reform would place a heavy burden on business with the economy entering a period of uncertainty as a result of oil prices and the appreciating US dollar. The foundation for high education and development (Fedesarrollo), a Colombian think tank, released a study this week arguing that the tax reform could be very damaging for the economy. While small sized companies will be unaffected by the increase in the CREE profit tax, something which the Santos administration was very keen to emphasise, medium and large sized companies will be affected, which Fedesarrollo calculates will lead to a fall in investment, reducing potential GDP growth by 0.48 of a percentage point and boosting unemployment by some 0.6 of a percentage point, putting 132,000 jobs at risk.

• IMF reaction

The managing director of the International Monetary Fund (IMF), Christine Lagarde, gave the thumbs up to Colombia’s tax reform during a meeting with Finance Minister Mauricio Cárdenas during an IMF conference in Santiago earlier this month, the Colombian finance ministry reported. Lagarde apparently congratulated Cárdenas for implementing policies that guarantee sustainable economic growth in a complex global environment.

• Good by regional standards

Finance Minister Mauricio Cárdenas was quick to note that Colombia’s GDP growth is the highest among the larger regional economies, with the 4.2% growth it posted in the third quarter comparing favourably to 2.2% growth in the third quarter in Mexico and 0.8% in Chile, and a contraction of 0.2% in Brazil.

-The Dominican Republic’s central bank (BCRD) announces intervention in domestic currency market to control rapid appreciation of the US dollar.