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BRAZIL | Government raises inflation forecast. Brazil’s finance ministry’s economic policy secretariat (SPE) released a new edition of its Boletim Macrofiscal economic report on 18 May, which showed an annual inflation forecast of 4.5% for 2026, up from the SPE’s previous forecast of 3.7%. The latest forecast would be the upper limit of the official inflation target range of 3.0% +/-1.5. According to the report, the global oil price shock resulting from the conflict in the Middle East was the main reason behind the SPE’s higher inflation forecast.

Regarding inflationary risks for food prices, the report warned of the possibility of the El Niño weather phenomenon occurring in the second half of the year, which could affect crop harvests, as well as the global price volatility for fertilisers.

Private sector economists, whose projections are included in the weekly Focus bulletin of the central bank (BCB), showed a higher projection. The latest bulletin, also published on 18 May, put the annual inflation forecast for 2026 at 4.92%.

BRAZIL | Economic activity falls in monthly terms. Brazil’s economic activity decreased by 0.7% from February to March, according to new figures released on 18 May by the central bank (BCB) for its economic activity index (IBC-Br). Meanwhile, the accumulated activity in the first quarter of this year was up 1.3% on the previous quarter, and annual activity in the 12 months through March 2026 was up 1.8% on the preceding 12-month period. Activity in agriculture and industry both decreased by 0.2% in monthly terms, while the services sector posted an even greater decrease of 0.8%.

On 15 May the national statistics institute (Ibge) also released data showing the recent decline in the services sector. In March, the total volume of services provided in Brazil decreased by 1.2% in monthly terms. This comes amid a stagnant first quarter this year, when a monthly decrease of 0.1% was posted in January, while February registered zero monthly variation in sales. The services that saw the greatest monthly fall in volume in March were those provided to families (-1.5%), transport and postal services (-1.7%), and other services (-2.0%).

BRASIL | Transporte olímpico. El gobierno de Río de Janeiro ha develado su nuevo autobús de transporte público. El vehículo usa la tecnología de combustible flexible (Flex) que fue desarrollado por primera vez por Brasil durante los ’90, que permite al mismo motor de combustión interna funcionar con más de una clase de combustible almacenado en un único tanque. El secretario de transporte de Río, Julio López, explicó que el plan del gobierno local era reemplazar la mayoría de su flota de buses con los nuevos prototipos para las Olimpiadas de 2016. Río está decido a cumplir con los requerimientos del comité olímpico de un sistema de transporte público más saludable ambientalmente. López también explicó que los vehículos fueron diseñados para funcionar con diesel o gas de manera que también podrían usarse en países que carecen de un mercado de combustible desarrollado del gas.

President Ricardo Martinelli is once again stoking concerns about the independence of powers in Panama. In late 2012, he named Ana Belfón, a legal advisor to the presidency, as the new attorney general, replacing a close ally, José Ayú Prado, who was moved to the nine-member supreme court of justice (CSJ). Both appointments, since ratified by the legislature, are controversial.

Belfón, who previously served as chief prosecutor under the military regime led by Manuel Noriega (1983-1989), is Panama’s fourth attorney general since Martinelli first took office in July 2009. Ana Matilde Gómez was controversially removed in late January 2010 [RC-10-01] and her replacement, Guiseppe Bonissi, a close Martinelli ally, was forced to step down less than a year later over an alleged organised crime ring in the attorney general’s office [RC-11-01].

Ayú Prado, whose appointment to the CSJ now means that five of the justices are Martinelli appointees, was criticised as attorney general for a lack of progress in several high profile cases – particularly those implicating current government officials. These include a land titling scandal involving Anabelle Villamonte, the former director of the national land authority (Anati), and the former minister of the presidency, Jimmy Papadimitriu. While Villamonte was eventually forced out, the leading opposition daily, La Prensa, has it that the investigation into Papadimitriu (also forced out) has been closed [RC-12-09].

Along with the two main opposition parties, Partido Revolucionario Democrático (PRD) and Partido Panameñista (PPA), respected local civil society figures came out against the latest promotions for Belfón and Ayú Prado. These include Miguel Antonio Bernal, a well known lawyer and former candidate for the Panama City mayoralty who was jailed for his pro-democracy activism by Belfón under Noriega, and the Alianza Ciudadana Pro Justicia. The latter issued a press release warning that the appointments struck a further blow to the credibility of the justice system.

• First test for Belfón

Belfón took office on 2 January to a fresh scandal implicating President Martinelli. The scandal centres on his alleged links to Financial Pacific, a brokerage house under investigation for insider trading.

  The allegations first were made in late November 2012 by Mayte Pellegrini, an ex employee of Financial Pacific, who quit in May last year after the local market values superintendency (SMV) opened an investigation into embezzlement at the firm. Initially, the alleged wrongdoing was put at US$7.0m, but it’s now thought to be double that. Pellegrini alleged in court that Martinelli is (or was) the owner of High Spirit, a "secret account" at the brokerage house that the president allegedly used for insider trading in shares of a Canadian mining company, Petaquilla Minerals.

  The scandal was seized upon by La Prensa and other opposition newspapers, setting Martinelli on a fresh collision course with the media. It has provoked an outspoken reaction not only from the political opposition, which immediately called on Martinelli to clarify his links with Financial Pacific, but also private sector lobby groups such as the Asociación Panameña de Ejecutivos de Empresa (Apede), which warned of the implications for Panama’s reputation.

  While the government has vehemently denied any links between Martinelli and Financial Pacific, with Martinelli accusing La Prensa of deliberately “manipulating information”, Belfón has offered little reassurance as to whether the allegations will be investigated. In late December, just days after her appointment, she told reporters that the attorney general’s office was not the appropriate authority to investigate the President and that the responsibility lay with the legislature, which is controlled by Martinelli's Cambio Democrático.

• Canal revenue

According to the latest report by the Panama Canal Authority (ACP), the Panama Canal generated US$1.0bn in state revenues for FY 2012 (1 October 2011-30 September 2012).

• Unemployment

In his address to the nation, President Martinelli highlighted that unemployment, (4% in 2012) was the lowest ever in the country’s history. According to Economy Minister Frank De Lima, 180,338 new jobs have been created since September 2009. The Martinelli government took office in July 2009. Unemployment was 6.6% that year.

President Tabaré Vázquez is taking an entirely different approach to dealing with Uruguay’s most powerful lobby from that pursued by his predecessor José Mujica (2010-2015). While Mujica did not hesitate to cross swords with the umbrella trade union, Plenario Intersindical de Trabajadores-Convención Nacional de Trabajadores (PIT-CNT), a hectoring ally of the ruling left-wing Frente Amplio (FA) coalition, Vázquez, as with his government’s foreign policy, has opted for a more diplomatic course. On 15 June Vázquez became the first sitting head of state in Uruguay’s history to attend the PIT-CNT’s annual congress, four days after the union staged a four-hour general strike to mark the end of his first 100 days in office.

Some 40,000 workers participated in a general strike on 11 June to protest against any public spending cuts mooted by the austerity-minded economy & finance minister, Danilo Astori. The strike came days before a new round of collective salary negotiations, and ahead of Astori’s presentation of the government’s five-year budget to congress before 31 August. The participants marched to congress in Montevideo to insist that this budget entrench the gains of recent years but also improve neglected areas such as education (in particular teachers’ salaries) something promised but never delivered by the Mujica administration, and investment in health, housing and productive infrastructure.

The appearance of Vázquez at the PIT-CNT summit four days later was clearly designed as a symbolic gesture to the union, but there was little of substance in his address. The loudest applause was reserved for his assertion that “I haven’t forgotten where I come from”, reminding the audience of his humble origins as a worker selling newspapers on the bus before eventually going on to become a doctor and enter politics. Vázquez ducked out of discussing his government’s five-year budget by saying that was for his labour minister, Ernesto Murro.

Fernando Pereira, the PIT-CNT coordinator, took to the stage next. He praised the FA for its achievements over the last 10 years in government, dwelling on public spending initiatives, but he insisted that salaries must grow above inflation, just as GDP is projected to do over the next five years. He said it was unacceptable that 600,000 Uruguayans still earned less than Ur$15,000 (US$560) a month and that the minimum wage should jump from Ur$10,000 to Ur$15,000 funded through income redistribution, or as he put it “the excessive earnings of the rich”.

Haiti’s provisional electoral council (CEP) has revealed yet another timeframe for the country’s long overdue elections. Crucially it has incorporated the recommendations of a report presented on 30 May by the verification commission (Cieve), set up by interim president Jocelerme Privert to evaluate the 25 October 2015 first-round presidential election results in the wake of fraud allegations. In line with Cieve’s report, the CEP has scrapped the presidential first round and with it the run-off between Jovenel Moïse of former President Michel Martelly (2011-2016)’s Parti Haïtien Têt Kalé (PHTK) – who the opposition maintains was the chief beneficiary of the fraud – and Jude Célestin of the opposition Ligue Alternative Pour le Progrés et l’Emancipation Haïtienne (Lapeh) party. Instead it has set 9 October and 8 January 2017 as the dates for the new presidential first and second rounds respectively,

The need for the Cieve, which audited 25% of the results, or 3,325 tally sheets from 13,000 polling stations across the country, was clear given another official commission (CEEI) set up at the end of last year by Martelly found 92% of 1,771 tally sheets selected at random contained “serious irregularities” [RC-16-01]. The Cieve similarly found multiple problems with the documents verified (see sidebar).

Announcing the new electoral timeframe on 6 June, CEP president Léopold Berlanger said the presidential race would not be reopened, with the 54 candidates who ran in the October 2015 first round having between 8-23 June to confirm their participation. Yet areas of uncertainty persist. One is what to do about the 42 contested legislative elections, which the Cieve suggested should also be re-examined. The local media cited Berlanger as saying that decisions would be taken after each case had been evaluated by the relevant electoral official.

With the PHTK and its allies now threatening unrest and rejecting the Cieve’s findings and the new electoral calendar, the international community, which is pressing for the electoral process to be completed as soon as possible, has issued a mixed response. In a 6 June statement, the United Nations Special Representative in Haiti, Sandra Honoré, and the so-called ‘Core Group’ – the local ambassadors from Brazil, Canada, France, Spain, the US, the European Union, and the Organization of American States (OAS) – urged “all Haitian actors to… respect the electoral calendar to organise transparent and equitable elections in an impartial manner”. It also expressed “deep concern” that “the decision to rerun the presidential elections will have financial consequences and prolong the electoral process started in 2015”. On 8 June, US State Department spokesperson Mark C. Toner said the US “regrets” the CEP’s decision to “restart the presidential elections from the first round” while the same day, the EU announced it was pulling its observer mission, describing the restaging of elections “unjustified”. On 8 June, however, the OAS issued a statement “welcome[ing] the publication of the Haitian electoral calendar”, noting the “continuation of the presidential, legislative and local elections is a critically important step towards the institutional stability of Haiti”.

New electoral calendar

Under the CEP’s new timeframe, the first-round presidential elections and first-round of elections for a third of the 30-seat senate (whose seats are due to expire) will take place on 9 October, with final results from both contests to be announced on 22 November. If no candidate receives 50%+1 of the vote in this set of elections, run-offs will then take place on 8 January 2017, with definitive results from the presidential contest and senate election to be announced on 30 January 2017 and 24 February 2017, respectively. Delayed partial legislative run-offs will also take place on 9 October, with final results to be announced on 5 December while delayed local elections will take place on 8 January 2017 with definitive results to be announced on 2 April 2017.

• Irregularities

In its report presented on 30 May, the verification commission (Cieve) cited various irregularities. These included the trading of accreditation cards, distributed to party representatives and electoral observers (mandataires), which allowed people to vote multiple times. The Cieve’s report also found that the number of untraceable votes (628,000, or 40% of the valid vote) exceeded the legitimate votes cast in favour of politicians. Other problems included the omission of documents including the partial voting list, all of which, the Cieve noted, made it impossible to determine the validity of the vote and therefore who should be in the run-off elections.

“A new era” is how Panama Canal administrator (ACP) Jorge L. Quijano described the official inauguration on 26 June of the Panama Canal expansion project – the first expansion of the waterway since its original construction more than 100 years ago. Completion of the US$5.3bn project, construction of which began in 2007, was a welcome boost for President Juan Carlos Varela who, two years into his five-year term, has suffered a drop in his popularity as a result of transparency concerns stemming from recent scandals like the ‘Panama Papers’ – the biggest leak of secret information in history [RC-16-05].

At a ceremony on 26 June attended by some 20,000 people, with official delegations from more than 60 countries, a container vessel of China Ocean Shipping Company (Cosco), ‘Andronikos’, which has a maximum capacity of 9,400 twenty-foot equivalent units (TEUs), became the first ship to transit the expanded Canal. The third set of locks – the biggest project under the expansion plan, which was carried out by multinational consortium Grupo Unidos por el Canal (GUPC) – are 427m long, 55m wide and 18.3m deep, allowing vessels up to 366m long, 49m wide and 15m deep to pass. Quijano told reporters that “we currently have 170 reservations for Neopanamax ships, commitments of two new liner services to the Expanded Canal, and a reservation for the first LNG [liquid natural gas] vessel, which will transit in late July”.

The ACP calculates that in the first fiscal year after the Canal expansion, revenues will increase by 40% to US$1.4bn. By 2021, it is estimated that revenues will have grown to US$2.1bn or 2.8% of GDP. Panama is already forecast to register the highest growth of any country in Latin America & the Caribbean for 2016. In a January 2016 report, the United Nations (UN) Economic Commission for Latin America & the Caribbean (Eclac) forecasts GDP growth of 6.2% for Panama for 2016, up from 5.9% in 2015 (compared with 6.1% in 2014). Eclac also notes the positive impact of the Canal expansion on other indicators such as foreign direct investment (FDI). A June 2016 Eclac report on FDI to the region notes that in 2015 FDI flows to Panama rose by 17%, to reach US$5.04bn – a record high, positioning the country as the leading recipient in Central America, and the seventh in Latin America and the Caribbean. The Eclac report notes that “during 2016, the work of widening the Panama Canal will be completed and a number of firms involved in Canal-related activities have made major investments to expand their capacities”.

Improved logistics performance index

On 28 June, the World Bank (WB) published its “Logistics Performance Index (LPI) 2016”, an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. The 2016 LPI showed Panama overtaking Chile, the best performer in the previous (2014) report, to take first place, ranking 40^th out of 160 countries. As well as Chile (which ranked 46^th), this is also ahead of Mexico (54^th) and Brazil (55^th). The 2016 LPI also showed Panama ranks fifth in the sub-classification “top-performing upper-middle-income economies” ahead of South Africa (20^th), China (27^th), Malaysia (32^nd) and Turkey (34^th).

In a press release trumpeting the result, President Varela highlighted efforts by his government to boost the logistics sector, such as the approval in October 2015 of a permanent consultative committee with the private sector. This has the objective of guaranteeing dialogue as well as the approval of a priority roadmap for the logistics sector with public and private sector participation and with the support from the Latin American Development Bank (CAF).

• Popularity

The latest survey by pollster Dichter & Neira, released on 21 June, showed President Juan Carlos Varela with just 37% approval. This was his lowest rating of the past 12 months and down from 57% in July 2015. According to the survey, which interviewed 1,200 people across the country bar the comarcas (indigenous administrative regions) and Darién jungle region, just 19% of respondents thought the government – which has been struggling to restore credibility to the country in the wake of the ‘Panama Papers’ and the US government’s blacklisting of one of Panama’s most important business groupings, the Waked family – operated in a transparent manner. This was again the lowest rating of the past 12 months and down from 34% in July 2014.

Brazilian authorities have freed one ally of President Michel Temer and put another behind bars. Rodrigo Rocha Loures, who allegedly solicited bribes on behalf of Temer, was released from jail. Soon afterwards, police detained Temer’s former government secretary Geddel Vieira Lima for obstruction of justice. These developments mark the latest chapter in a long-running power spat between Brazil’s executive and judicial branches.

With his allies slipping in and out of jail, President Temer is under pressure to defend his scandal-plagued administration. But some ask whether Brazil’s judiciary is treating corruption suspects fairly or using them as political pawns to undermine the government.

On 1 July, a visibly greyer, skinnier and more bearded Rodrigo Rocha Loures returned home to a heavily pregnant wife. Following just under a month in jail, which his lawyers described as a form of psychological torture, supreme court (STF) justice Edson Fachin granted Loures the right to serve out the rest of his sentence under house arrest. Loures’ release is a blow for federal prosecutors, decreasing the likelihood he will participate in a plea bargaining agreement and potentially add weight to the corruption charges against Temer.

However, the judiciary soon came up with a new line of attack. Two days later, on 3 July, police arrested Temer’s former minister Lima, once one of the most powerful men in government, charged with managing relations with congress, before he was forced to step down over an influence-trafficking scandal last November.

Lima is accused of disrupting an investigation into funding irregularities at state-owned bank Caixa Econômica Federal (CEF), between 2011 and 2013, where he previously worked as vice-president. Police began investigating the former minister after they intercepted a series of messages between him and jailed former house speaker Eduardo Cunha. Additionally, the duo allegedly took bribes in exchange for diverting CEF funds to various businesses.

Double standards?

Holding group J&F Investimentos, owned by the Batista family, was one of the beneficiaries of the CEF corruption scheme. The group allegedly paid R$1.2bn (US$360m) to Cunha and Geddel to free up resources for their cellulose business, El Dorado. But Brazil’s judiciary has allowed members of J&F and affiliate company JBS to evade jail time, sparking controversy that there are double standards between the way corrupt businessmen and politicians are treated.

Aside from being involved in the CEF scandal, executives from J&F Investimentos and affiliated companies allegedly bribed over 1,800 politicians and made at least R$850m (US$255.49m) in profit from corrupt deals according to Brazil’s federal court of accounts (TCU). To settle these charges, J&F agreed to pay a R$10.3bn (US$3.1bn) fine to Brazil’s attorney general’s office (PGR), which has been upheld by the STF. However, some have bemoaned the lack of transparency about the way authorities negotiated the leniency deal and say the fine is too lenient (see sidebar).

Following the J&F furore, prosecutors have agreed to establish a clearer framework for how future corruption settlements will be reached. This could give greater legal certainty to companies and executives, though discussions are still in their early stages.

• Leniency agreements under scrutiny

A report by Thomson Reuters published on 5 July found the R$10.3bn (US$3.1bn) fine levied on J&F Investimentos is dependent on Brazil’s consumer price index (IPCA) to be paid over the next 25 years, which could reduce the net value of the fine to just R$5.45bn (US$1.64bn). This is different from the way other settlements are reached. For example, the R$3.9bn fine to be paid by the Brazilian construction firm Odebrecht over the next 22 years is pegged to interest rates set down by the benchmark Selic rate, meaning it is likely to increase in value.

Adriano Magalhães da Nóbrega, a suspected leader of a Rio de Janeiro-based death squad linked to paramilitary ‘milícia’ groups, was killed during a police operation on 9 February in Brazil’s north-eastern state of Bahia. The death of Nóbrega, a key figure in Rio’s criminal underworld, raises a number of uncomfortable questions over links between milícias, the police, and politics.    

A statement by Bahia state’s public security secretariat (SSP-BA) explains that the police led an operation to arrest Nóbrega, who was hiding on a property in rural Esplanada, a municipality some 170km north of the Bahia state capital Salvador. Police say they shot at Nóbrega after he opened fire on them first, resisting arrest. He was taken to hospital but died of the injuries sustained.

On the run from Rio state’s authorities since last year, Nóbrega, also known as ‘Capitão Adriano’, was believed to be one of the leaders of Escritório do Crime, a milícia group of hired assassins active in Rio’s West Zone. The SSP-BA notes that he was wanted in relation to the investigation into the murders of Rio city councillor Marielle Franco and her driver Anderson Gomes in March 2018. This has been denied by some Rio-based sources who say Nóbrega has not been personally connected to Franco’s murder, although two men arrested last year accused of being the material authors of the crime have links to the Escritório do Crime [WR-19-10].     

Nóbrega’s name has come up several times in the past year in association with that of Flávio Bolsonaro, President Jair Bolsonaro’s eldest son who is now a senator. Flávio is currently under investigation for a suspected corruption racket carried out while he was a state deputy (2003-2019) in the Rio legislative assembly (Alerj), and run by Fabrício Queiroz, a friend of Nóbrega’s from their time together in Rio’s military police (PM) force. Nóbrega is suspected of having benefited from the scheme, as it emerged that his wife and mother were employed in Flávio’s Alerj office. In his early years as an Alerj deputy, Flávio paid tribute to Nóbrega on two occasions for his work as a PM officer (Nóbrega was expelled from the force in 2014 for involvement in illegal gambling rings).

Flávio has not been found guilty of any wrongdoing, and some might argue that links which have emerged between the Bolsonaro family and Rio’s milícias (which go beyond connections to Nóbrega) are circumstantial. Nevertheless, it is likely that Nóbrega has taken some invaluable, and possibly incriminating, information to his grave. Flávio remained quiet on the issue until 12 February, when he tweeted that the conditions of Nóbrega’s death should be cleared up.

The left-wing Partido Socialismo e Liberdade (PSOL), Franco’s party and whose affiliated deputy Marcelo Freixo has been one of the most vocal and active political figures in challenging Rio’s milícias, was the first to demand that the circumstances of Nóbrega’s death be investigated, in light of the fact that he was “a key piece” in many criminal investigations. Some PSOL affiliates have openly questioned whether his death was witness elimination, a possibility Nóbrega reportedly raised himself in a phone call to his lawyer, Paulo Emílio Catta Preta, days before he was killed.

There have since been reports that Nóbrega knew of the Bahia police operation planning to arrest him, seeming to confirm suspicions that he received inside information from police in Rio. Ties between Rio’s milícias and the state’s police and politicians are coming under increased scrutiny ahead of municipal elections in October, which could see candidates with criminal links running for local office.

Marielle Franco probe ongoing

Following Adriano Magalhães da Nóbrega’s death, Amnesty International Brasil (AIB) put out a statement condemning the fact that there continue to be more questions than answers relating to the murder of Marielle Franco, into which the investigation is ongoing as authorities consider the possibility of an intellectual author of the crime. AIB highlighted the constant leaking of information to the press and the speculation this generates as counter-productive, demanding transparency from the authorities. As the two-year anniversary of Franco’s death approaches, there continue to be vocal demands for justice and the truth behind her murder.    

In a nationwide speech on 1 August, Chile’s President Gabriel Boric called on his political opponents to “come out of their trenches” and support his proposed US$8bn “fiscal pact”. But controversies over ministerial-level corruption are likely to hold back any quick agreement.

President Boric needs extra cash to deliver promised pension, education, and health reforms, as well as boosting police budgets to fight crime. Some of these measures formed part of a tax reform package that was unexpectedly rejected by the lower chamber of congress last March. Following that debacle, the government considered submitting new legislation to the senate (which would require a two-thirds majority) but eventually rejected the idea.

Instead, officials held over 30 consultation meetings with a wide range of political parties and business groups and came up with a new set of measures. They have now been re-baptised as a “fiscal pact”, to emphasise the government’s claim that they originate from a consensual debate.

Boric said the aim would be to fund US$8bn of expenditure, equivalent to 2.7% of GDP. Two bills would be presented to congress, one of which would raise funds equivalent to 1.5% of GDP by modernising tax collection, while reducing evasion and economic informality. The second bill would further raise revenues by reforming corporate and personal income tax. The wealthy would be asked to pay higher income tax: however, Boric did not specify how much higher. The package would also include incentives for investment and small businesses worth 0.5% of GDP.  

In keeping with the consensual approach, the finance minister, Mario Marcel, said the government would not “impose a formula” but would consult further. According to Boric’s timetable, there will be further talks in August and September, a review by an implementation commission by December, and submission of a new income tax reform bill to congress in March-May 2024.

Progress looks difficult. Following recent allegations of corruption, conservative opposition parties are saying the government needs to demonstrate responsibility in the management of its existing cash before they will consider allowing it to raise any more. Central to their stance is a corruption scandal known as the Caso Convenios. The attorney general’s office is investigating a range of potentially improper contracts under which government funds have been transferred to political parties, foundations, and NGOs linked to the Frente Amplio, part of the ruling left-wing coalition.

The most recent cases have led to the forced resignation of the deputy minister for arts and culture, as well as the departure of the same ministry’s regional representative to Santiago. Andrea Gutiérrez, the now-departed deputy minister, was found to have voted in favour of awarding competitive contracts worth approximately US$335,000 to a non-profit, Corporación de Desarrollo de Santiago (Cordesan), without declaring a conflict of interest or recusing herself, since she had previously been employed in a senior capacity by Cordesan. So far the Caso Convenios has triggered the resignation of two deputy ministers and three Seremis (ministerial representatives to the regions).

Renovación Nacional (RN), one of the country’s traditional right-wing parties successfully requested an investigation by the attorney general; another, Unión Democrática Independiente (UDI), has pulled out of the fiscal pact talks, entirely, demanding that Boric dismisses the social development minister, Giorgio Jackson. The UDI alleges that his ministry has misspent public funds, as well as holding him responsible for poor security, evidenced by recent thefts of computers from ministry offices.

Jackson is considered to be Boric’s friend and closest ally in the cabinet. His critics claim, he is involved in the Caso Convenios, as well as bearing responsibility for a recent and mysterious daylight robbery of 23 computers from his ministry. Further to the right, the Partido Republicano (PR), which is not demanding Jackson’s removal, has nevertheless pulled out of talks on pension reform after disagreeing with the government’s approach.

Increasing tax burden

Chile has a relatively low overall tax burden; international organisations such as the International Monetary Fund (IMF) and Organisation for Economic Co-operation and Development (OECD) have recommended that it be increased. According to the OECD, the country’s current tax burden is 19.3% of GDP, below both the Latin American average (21.9%) and the OECD member country average (33.5%).

Slow growth

President Boric’s proposals come amid concerns over sluggish economic growth this year. Economic activity levels dropped in June by 1% year-on-year, according to the Imacec index, the fifth consecutive month of contraction. On 28 July the central bank cut its benchmark interest rate by 100 basis points to 10.25% in an effort to stimulate economic growth.    

*** Taleban suicide bombers.  A recent United Nations report said violence against Afghan civilians was up 15% in the first half of this year, with more than 1,400 civilian deaths.  Roadside bombs were the biggest killer of civilians in the first half of this year.   But there is also evidence that since the beginning of the year, the Taleban has been stepping up its recruitment of young suicide bombers.

On 7 May, the Afghan National Directorate of Security (NDS) said that “hundreds of children” were being prepared in Pakistan for suicide attacks inside Afghanistan.  This allegation was repeated by the NDS on 23 May when it said that both the Taleban and al-Qaeda were “increasingly using children as suicide bombers”.  Other evidence supports these assertions, and it is clear that a campaign of recruitment using the inducement of heavenly joys has been stepped up.  Prospective young recruits are told that they will be rewarded with rivers of milk and honey and compliant virgins.  As one example, a recent broadcast by Taleban radio, based in Miram Shah, urged listeners to “join the company of suicide bombers in order to gain a place in heaven in the hereafter”.  Taleban radio in the Bajaur area of Pakistan starts transmissions with jihadi chants including songs proclaiming: “I will not waste my time, virgins are waiting for me in paradise.”

On 26 July, former Afghan president Borhanoddin Rabbani told a nationwide council of clerics:?“Very poor and destitute children are being recruited to carry out blasts in mosques and public gatherings where helpless and innocent people are getting killed.  Ignorant religious scholars have issued fatwa and some of them preach that they would go to paradise for such acts...”

*** Israel and the Kurds.  Last week we provided a detailed briefing on how the Kurdish question was moving up the Mideast agenda.  In total there are approximately 35m Kurds, which is a large number for a people who do not have a state.  Israel, in particular, seems willing to exploit the Kurdish question to pay back Turkey for its abandonment of their previously close relationship.  Last week we quoted an editorial in The Jerusalem Post which argued on 24 July: “There’s no reason not to express unstinted Israeli support for Kurdish self-determination – as we did for South Sudan’s.”

In the past week, on 28 July, a piece in the Yedioth Ahronoth expressed almost identical views, saying: “The Kurds are close to Israel, which they view as a twin sister who shares a common historical fate and a non-Arab identity in a hostile Middle East.  We are now faced with the prospect of the dismemberment of four countries [Syria, Iraq, Turkey, Iran], each with varying degrees of hostility towards Israel, a prospect that would yield a new ally for the Jewish state.”  The commentary tied the fate of the Kurds to the Palestinians and warned that if these states “decide to ‘fix’ Israel” by supporting Palestinian statehood at the UN, “they themselves will be fixed”.

PUERTO RICO | Rechazan reformas constitucionales. Los votantes portorriqueños han rechazado, por medio de un referéndum, las reformas constitucionales que hubiesen recortado el tamaño de la legislatura (de 78 legisladores a 56) y ponían fin al derecho absoluto a la libertad bajo fianza. El resultado de la votación del 19 de agosto fue una sorpresa: las encuestas previas revelaban un extendido apoyo por los cambios que apuntaban a mejorar la eficiencia de la legislatura local bicameral y abordaba la ola de delitos en el territorio (ver más abajo).

De acuerdo con la comisión electoral del estado (CEE), el 54,22% rechazó la propuesta de reducir el tamaño de la legislatura, mientras el 45,78% votó a favor. Por otro lado, el 55,03% votó en contra de poner fin el derecho absoluto a libertad bajo fianza, mientras que el 44,97% votó a favor.

La enmienda propuesta a los términos de la libertad bajo fianza habría permitido a los jueces rehusar otorgar la libertad bajo fianza por asesinatos premeditados, homicidios cometidos durante robos en viviendas, asaltos sexuales y secuestros. La policía sostiene que la falta de una provisión de este tipo distorsiona los esfuerzos para procesar a asesinos, pues los testigos se sienten amenazados sabiendo que el sospechoso puedan quedar libres bajo fianza.

Un aspecto significativo del referéndum fue que no cayó dentro de líneas tradicionales: las dos propuestas de reformas fueron respaldadas por los dos principales partidos de Puerto Rico –el Partido Nuevo Progresista (PNP) del Gobernador Luis Fortuño, y el Partido Popular Democrático (PPD) de Alejandro García Padilla.

El resultado es un particular golpe para Fortuño que se prepara para enfrentar a García en las elecciones gubernamentales  programadas para el 6 de noviembre. En un referéndum paralelo, el electorado también votará sobre el estatus político de Puerto Rico. Primero se preguntará a los ciudadanos si ellos quieren que continúe el actual estatus territorial. Independientemente de cómo responden esta pregunta, se pedirá, en una segunda pregunta, que elijan entre tres opciones diferentes: ser un estado de EU; independencia; o una soberana libre asociación (esencialmente el status quo).

GUATEMALA | Victoria contra Iberdrola. El gobierno del Presidente Otto Pérez Molina está saludando como una victoria una reciente decisión del centro internacional para la solución de disputas de inversiones (Icsid, siglas en inglés) del Banco Mundial, que ordenó al grupo español de energía, Iberdrola, que pague a Guatemala US$5,3m para cubrir los costos de los tres años de batalla legal del país contra la compañía de energía. En diciembre del 2008, Iberdrola exigió US$672m en compensación, afirmando que Guatemala había expropiado su inversión después de que el regulador de energía del país, la Comisión Nacional de Energía Eléctrica (CNEE) redujo la tarifa de distribución para su entonces subsidiaria, la Empresa Eléctrica de Guatemala S.A. (EEGSA) en agosto de este año. Dos años más tarde Iberdrola vendió sus acciones en EEGSA y el monto de la compensación exigida se redujo a US$185m. El Icsid halló que Guatemala no expropió inversión ni violó un acuerdo justo.

BELICE | Rumbo hacia el default. Las agencias de rating de crédito Moody’s y Standard & Poor’s, han degradado a Belice luego del anuncio del 20 de agosto de que el país no pudo realizar el pago de US$23m, sobre sus US$546,8m en bonos que vencen en el 2029, y el Secretario de Finanzas, Joseph Waight admitió que el pago dentro de los 30 días del periodo de gracia era incierto.

El 21 de agosto, Standard & Poor’s (S&P) redujo su rating de crédito soberano en moneda extranjera a largo y corto plazo de Belice a ‘SD’ (default selectivo)  de ‘CC/C’. También redujo su rating de los bonos de Belice que vencen en el 2029 a ‘D’. El mismo día, Moody’s cambió el panorama del rating de Belice a negativo, aunque el rating en moneda extranjera permanece en Ca y el rating en moneda local permanece en Caa3.

El fracaso en realizar el pago sobre el súper-bono ha causado temores que el país se dirige hacia el default, complicando las conversaciones sobre reestructuración que estaban en marcha con tenedores internacionales de bonos. El Primer Ministro Dean Barrow, que fue reelecto para un segundo periodo en marzo, dijo que Belice no podría hacer frente al servicio del súper-bono, que paga un cupón anual de 8,5% este año. El bono representa la mitad de la deuda pública pendiente del país, que rondaba alrededor del 80% del PIB, o US$1,47mm en términos nominales en el 2011.

• El delito en Puerto Rico

El delito violento se está convirtiendo crecientemente en un problema para el Gobernador Luis Fortuño, la mayoría del cual está vinculado al crecimiento del tráfico de drogas. El año pasado se registró un record de 1.136 asesinatos (subiendo de 983 en el 2010) y la situación el mes pasado hizo que el líder del Partido Popular Democrático (PPD) Alejandro García Padilla, pida a Fortuño que declare el estado de emergencia.

*** Israeli worries over military ties with Egypt.  Although the new regime in Cairo is less hostile to Israel than the ousted regime of President Muhammad Mursi, Israel is concerned that changes in top-level military personnel has damaged military cooperation.  The changes have severed personal ties between top-level Israeli officials and their counterparts in Egypt and as a result relations have become much more formalised and bureaucratic. 

As an example, the new director of Egyptian intelligence, General Muhammad Tuhami, is not at all well known to the Israelis.  Another loss has been Nadir al-Assar, who was in charge of Israeli and Palestinian affairs.  He has been replaced by another Egyptian official, Wahil al-Safdi, who is little known to the Israelis.

*** Protecting Chinese abroad.  The question of the safety of Chinese nationals overseas has been moving rapidly up the agenda for China’s policymakers since the events in Libya in 2011.  The issue was on China’s radar again last week after the 8 August terrorist attack in Kabul in which three Chinese citizens were killed.  Other recent incidents include the murder of four Chinese on 24 June in Papua New Guinea and the killing of two Chinese mountaineers in Pakistani-controlled Kashmir by terrorists on 23 June.

China’s foreign ministry says that it is now handling about 100 consular protection cases every day as a consequence of more than 83m Chinese travelling overseas in 2012.  In addition there are more than 20,000 Chinese enterprises operating overseas and 2m Chinese students enrolled in foreign colleges or schools.

*** Senkaku intrusion ‘longest yet’.  The intrusion last Wednesday/Thursday (7-8 August) by Chinese ships into Japanese territorial waters around the Senkaku Islands (claimed by China as the Diaoyu) was the longest intrusion yet, with the Chinese ships remaining in Japanese territorial waters for over 28 hours.  There was a further incursion by four Chinese coastguard ships on 10 August, and on 11 August the Japanese coastguard reported seeing three more Chinese ships sailing around the islands.  According to the Japanese coastguard, this was the 26th straight day that Chinese vessels had been spotted in Japan’s territorial waters.

When the Japanese coastguard made its usual protests at the latest intrusion, one of the Chinese vessels responded by radio saying that the sea areas within 12 nautical miles of the islands are Chinese waters.

Chile is a relative newcomer to the drug-trafficking world. Over the past decade it has grown in two directions: domestic consumption has risen, in relative terms, to the highest level in South America, and Chile’s role as a transit country for  drugs, mainly cocaine destined for the European market, has grown considerably. Since late 2013 it appears to be moving up the ladder to the role of producer of refined cocaine.

On 11 March the anti-narcotics brigade of the Chilean police announced the seizure in metropolitan Santiago of 500 litres of liquid cocaine, one of the largest hauls of its kind in the past decade. The authorities suspect that the drug was on its way to a processing lab where, using a rule of thumb formula cited by a police source, more than 200 kilos of powder could be recovered. This would make the total seized during March up to about 380 kilos — not a huge amount compared to a shipment of 1.4tonnes (t) from Valparaíso that was interdicted at Le Havre, but in the eyes of the police an indicator of a new trend first detected in August last year: Chile’s progression from transit country to producer.

The police believes that the liquid cocaine was headed for a processing lab in Santiago. The other seizures, in two separate operations, were of cocaine base, which also suggests local processing into cocaine hydrochloride (HCL) for shipment abroad, mainly to Europe. All of the operations involved importing the cocaine from Bolivia. In August 2013 in Hijuelas, Valparaíso, police located the largest cocaine processing lab ever discovered in Chile, which received liquid cocaine. The total amount of the drug found both as liquid, solids and in suspension was calculated at 529kg.

The US State Department’s 2014 International Narcotics Control Strategy Report (INCSR) puts Chile’s total cocaine seizures in the first eight months of 2013 at 10.6t, of which 2.17t was cocaine HCL. In that period 68.3% of all cocaine seizures took place in the three northernmost regions: Arica y Parinacota (bordering on Peru and Bolivia), Tarapacá (bordering on Bolivia) and Antofagasta (bordering on Bolivia and Argentina). The police has put the total of cocaine HCL seizures in the whole year at 3t.

In 2013 the Chilean government allocated US$2.1m to the Plan Frontera Norte, launched in 2011 to enhance the efforts to contain the traffic in drugs across the borders with Peru and Bolivia. The funds were destined mainly to the acquisition of surveillance equipment, which includes unmanned aircraft, and to enhance the capabilities of the investigative police’s anti-narcotics division and that of the Carabineros. The number of drug-trafficking organisations disrupted in 2013 rose by 43% to 127, of which 57 were involved in cross-border operations.

• In Bolivia

Across the border in Bolivia, the police’s special anti-narcotics and anti-crime forces (Felcn and Felcc) were active in operations in the border department of Potosí which led to the disruption of two gangs involved in drug trafficking and other cross border criminal activities, one in the Laguna Colorada area, the other in the tourist resort of Uyuni. The latter was formed by nationals of Chile as well as Bolivia.

Felipe Cáceres, deputy minister for social defence & controlled substances (meaning the anti-drugs effort) stated in early March that drug traffickers formerly active in the area north of La Paz department that borders on Peru have been moving to the south of the country.

In the May 2012 general election, the ruling Free National Movement (FNM), led by then-prime minister Hubert Ingraham, was beaten by the opposition Progressive Liberal Party (PLP) led by the current prime minister, Perry Christie. It was a thrashing, with the PLP winning 29 seats to nine for the FNM. But since its victory, the PLP has found it hard to deliver on its electoral promises of a stronger economy and reduced unemployment, and it should be ripe for the taking - except that the FNM is riven by in-fighting and looks far from ready for an election which could be called at any time.

In 2012, the year in which the PLP came to power, GDP growth was 3.1% and unemployment 14.4%. There then followed three years of zero or negative growth, with 0.0% growth recorded in 2013 and contractions of -0.5% in 2014 and -1.7% in 2015. For 2016, the International Monetary Fund (IMF) is projecting growth of 0.5%. Unemployment peaked at 15.8% in 2013 before falling to 13.4% in 2015, but the IMF is projecting another spike of 15.6% this year, with the planned opening and then stalling of the Baha Mar megaresort blamed for the roller-coaster ride.

On the face of it, all this should provide the FNM with a good shot at returning to power after just one term in opposition, but there has been bitter in-fighting amid attempts by Long Island MP Loretta Butler-Turner and five other MPs to oust leader Hubert Minnis (who replaced Ingraham after the 2012 defeat). In an attempt to clear the air and to prepare the party for the upcoming contest, the party’s convention was brought forward from November to July.

The three-day convention duly opened on 27 July in the full expectation that a vote would be taken on the leadership. But then, on the third day of the convention, Butler-Turner and her proposed deputy, Dr Duane Sands, withdrew their challenge, and this was followed swiftly by a conciliatory statement by Minnis. He said he was offering “the olive branch once again to our sister and brother” and that he hoped “they will accept our offer to continue to be a valuable part of this leadership team”. Minnis was reported to have offered Butler-Turner the post of leader of opposition business in the House of Assembly, a prominent role in the FNM’s general election campaign, and a senior position in the cabinet should the FNM win the election.

But that was very far from the end of the matter. Four days later, on 2 August, Butler-Turner suddenly declared that her support was “not for sale”. She declared: “There are a lot of offers on the table and I want to state emphatically…that Loretta Butler stands on principle and on conviction. I am not a pawn that can be bought and sold.” The next day she repeated the statement, saying: “I am not for sale and if in fact the leadership of this party feels that they are so secure in their win, then why is it so important to offer me gifts?”

This all seemed very categoric, and not at all helpful to the FNM’s cause. But then came one more dramatic U-turn. On 7 August, the erstwhile challenger for the FNM’s leadership issued a press statement saying: “Those of us who offer for public service must acknowledge error, learn from our mistakes and then set out to become better public servants. In this spirit, I take account of public criticism and hope that any errors of mine will be forgiven. My commitment to the common good of our country and to the greater good of the Bahamian people and the FNM remains unshakeable.” She also confirmed that she would accept re-nomination as the candidate for Long Island, but there was no mention of her attitude towards, or the current status of, the other offers made by Minnis immediately after she had withdrawn her leadership challenge.

As insurance premiums and medical costs in developed countries remain high, the falling cost and increasing ease of travel has seen greater numbers of people venture abroad for medical and cosmetic procedures. The Central American sub-region has been one of the world’s most proactive in picking up this slack. Organisations like Costa Rica’s official export promotion agency (Procomer) admit that figures published on the medical tourism market are, for the most part, “highly speculative”. Yet most agree that medical tourism to Central America is on the rise, with the vast majority of patients coming from the US, Canada, or elsewhere in the region.

Tourists travelling to Central America do so to receive a wide range of treatments. Among the most popular are cosmetic surgeries, dental work, cardiovascular surgery, orthopaedics, cancer care, fertility treatment, and weight loss procedures. As there are large numbers of highly-trained doctors in the region and the quality of care has frequently been of a high standard, Central America had been missing opportunities due to the image of the countries offering their services, and the efficiency of the industry. However, the medical tourism sector in Central America has streamlined and organised itself better to harness the burgeoning potential of the sector, while improved connectivity has also accounted for the rise in numbers. There are now more than 20 flights per day to Costa Rica from the US and Canada, and more than 25 per day to the Dominican Republic (DR) from the US alone.

Symposiums gather high-profile representatives of the medical tourism industry, a number of agencies facilitate the introduction of foreign clients to Central American medical facilities, while various countries have institutions devoted to the sector. For example, Costa Rica has a Wellness Tourism Association while the DR has a Dominican Health Tourism Association (ADTS). Advertising and marketing have also played a crucial role in attracting clients.

One of the greatest advances has been in making Central American services attractive to Anglo-American tourists through outreach marketing campaigns. Various bodies insist on their members speaking English, and special mention is always afforded to the overseas – usually US – institutions from which doctors have graduated. While there has been a concerted region-wide effort to streamline and coordinate the medical tourism industry, there have also been a number of country-level initiatives.

Medical Tourism Index (MTI), a private industry research group, releases a yearly ranking based on factors such as the allure of the country to foreign tourists, security, infrastructure, and the quality of facilities and services. The three best-established destinations in the Central American sub-region for medical tourists – Panama, Costa Rica and the DR – all feature in its 2016 index, ranking 13, 14, and 15 respectively.

Panama

In November 2017 the Panamanian Tourist Authority (ATP) estimated that as many as 20% of private patients in the country could be from abroad. At the time Temístocles Díaz, a health ministry representative, told reporters that “Panama has first world hospitals certified by international agencies and doctors trained in certified locations. We want the country to be a reference point for people who need complex operations and medical treatment.” “The large number of specialists who qualify at high-prestige international centres, along with investment in sanitation technology, has allowed Panama to stand out as a destination for medical attention,” said Edwin Villalobos, director of The Panama Clinic, a private clinic.

Dominican Republic

In the DR, ADTS president Alejandro Cambiaso says that significant savings are the biggest reason to come to the country for treatment, while the country’s location allows it to attract local tourists. According to Cambiaso, the premier national health centres claim that more than 35,000 patients visit the DR every year, largely from the Caribbean, US, and Canada. In order to ensure quality and attract North American clients, the ADTS requires its member doctors to belong to the Dominican Medical College (CMD) and speak fluent English, Spanish, or other languages.

Costa Rica

In the industry’s other regional centre, Costa Rica, the country’s tourism board says that between 2015 and 2016, the number of medical tourists arriving in the country rose 34% from 9,774 to 13,131 – the majority of whom came from North America – and on average, each patient spends close to US$7,000 per visit. According to Kenneth Rojas, medical coordinator at the Clínica Bíblica, a large private hospital in San José, the facility receives an average of 110 foreign patients per month. Massimo Manzi, executive director of the Costa Rican Chamber of Health, claims that “the chamber groups together 120 sector-leading private healthcare businesses. The Costa Rican Central Bank indicates that 70,000 international patients are treated every year: of these, 80% are from the US, 11% are from Canada and 8% are from Central America and the Caribbean; generating an income of US$475m.”

Guatemala

There is also growth in the medical tourism industry in other Central American countries. Guatemala has inaugurated nine health and wellbeing facilities for medical tourists – as well as five dental clinics – in 2016 and 2017 alone. The health and wellbeing section of the Association of Guatemalan Exporters (Agexport) announced that in 2016 the country made more than US$67m, through this sector, up 13% on the previous year. At the eighth Medical Tourism Congress held in Mexico’s Ciudad Juárez in August 2017, the president of Agexport’s health branch, Guillermo Contreras, asserted that a medical tourist in Guatemala spends up to six times as much as a regular tourist. According to the country’s tourist commission, 36% of medical tourists in Guatemala travel for dentistry work, 22% for other surgeries, and 12% for plastic surgery.

El Salvador

El Salvador has also seen encouraging growth in the medical tourism sector. In September 2016, the country’s tourism minister José Napoleón Duarte travelled to the US to receive the Emerging Medical Tourism Destination award at the World Medical Tourism & Global Healthcare Congress. As of May 2018, the tourism ministry reported that 16 Salvadorean companies (clinics, hospitals, and tour operators) belonged to the national medical tourism network with a further six companies due to join. According to the same tourism ministry report, as of end-2017 some 24,255 medical tourism visitors had been registered, spending some US$13m in the country.

Nicaragua

In March 2017, the local press reported that just 60 tourists per month were arriving in Nicaragua from Central America, the US, and Canada for medical tourism purposes – indicative that the sector is still in its infancy. The country has taken a slightly different route to others in the region, however, with its thermal springs becoming a selling point for natural treatments and appealing to a different niche in the medical tourism market. The president of the Nicaraguan chamber of tourism (Canatur), Lucy Valenti, said that she hoped that Lake Nicaragua, the largest lake in Central America situated in the south west of the country, could be the focal point for the industry’s growth, helping to diversify the amount on offer for medical tourists.

• Considerations

According to Andy Bezara Higle, a consultant with Costa Rica-based industry group Turismo Médico, “A patient generally considers various factors when choosing where to go for treatment: saving money, international accreditation of hospitals and clinics, short waiting times, quality of service, security, stability and connectivity of the country concerned, and a high level of English.”

• Competitive treatments

The more ‘conventional’ sectoral treatments Nicaragua offers are at least 70% cheaper than in sender countries, according to Mayke Soto of the Vivian Pellas Hospital in Managua.

In an interview broadcast on 5 August, Brazil’s President Jair Bolsonaro once again defended the view encapsulated in the familiar Brazilian saying, “a good criminal is a dead criminal,” by advocating for legislation that would allow security forces to kill suspected criminals without the risk of facing judicial proceedings. In contrast, a public security report published that same day, which lists Brazil’s most violent cities, highlights the need for public security policies focused on improving levels of human development.

The ‘Atlas da Violência – Retrato dos Municípios Brasileiros 2019’ is a joint initiative by the government-led Instituto de Pesquisa Econômica Aplicada (Ipea) and the public security think-tank Fórum Brasileiro de Segurança Pública (FBSP). An offshoot of the annual Atlas da Violência report, it breaks down homicide rates by municipality for 310 cities of over 100,000 inhabitants.

The report shows that Brazil’s North and Northeast regions are home to the country’s most violent cities, where violence is driven by the fight for drug trafficking routes and the illegal timber and mahogany market. Daniel Cerqueira, a researcher at the FBSP and coordinator of the report, notes that the difference in the homicide rate between Brazil’s most and least violent cities is comparable to that between the overall homicide rate in Brazil and in European countries. The more violent cities are also the least socio-economically developed.

The data used by the Atlas da Violência date back to 2017, when a record 65,602 homicides were registered across Brazil. Newer data from other sources shows a reduction in homicides in 2018, which appears to be continuing in 2019 [SSR-19-05]. But recent violent incidents indicate that the Atlas da Violência’s findings remain timely. Indeed, the report lists Altamira, a city in the northern state of Pará, as the second most violent municipality in Brazil with a homicide rate of 133.7 deaths per 100,000 inhabitants. Last week, between 29 and 31 July, 62 inmates were murdered in a clash between gangs in an overcrowded Altamira prison, drawing attention to the perceived violence and lawlessness in this city, as well as the general prison crisis in the country [WR-19-21].

The Altamira prison massacre, the deadliest since a 1992 riot in São Paulo, has been condemned by public security experts and human rights activists as a sign of the Brazilian state’s failure to protect citizens behind bars – many of whom are awaiting trial and have therefore not been convicted. Bolsonaro, however, argues that past security policies and discourses on prisoners’ rights favour criminals over upstanding citizens, something he is determined to change.

In his interview with journalist Leda Nagle, Bolsonaro proposed applying a legal exception known as the ‘exclusion from illegality’ to people who use lethal force while defending the lives, property or possessions of themselves or others. He believes this will help deter crime and fight violence. Yet he presented this proposal in aggressive terms, likening criminals to cockroaches and saying that if he could, he would have shot a homeless man who stabbed two people to death in Rio de Janeiro last week.

Bolsonaro has not yet presented concrete legislation on this to congress, although Justice Minister Sérgio Moro’s anti-crime package does include a measure which would increase leniency towards police who use lethal force [WR-19-05]. But as in other policy areas, words have consequences and many fear the president’s dehumanising rhetoric is already encouraging the use of excessive force amongst the police, as well as failing to tackle the root causes of criminality.

From the absurd to the tragic

On 4 August, a drug trafficker serving a 73-year sentence was caught trying to escape the Gericinó prison complex in Rio de Janeiro dressed up as his 19-year old daughter. A video of Clauvino ‘Baixinho’ da Silva removing a wig, glasses, a silicon mask, and woman’s clothes made a stir on social media. He was put in isolation in the maximum security ‘Bangu 1’ prison after being caught, and on 6 August, was found dead in his cell, having seemingly hanged himself with his sheets. His death is being investigated but advocates of prison reform are pointing to yet another preventable death inside Brazilian prisons.

Faced by signs of a rapidly rising coronavirus (Covid-19) infection curve, on 10 July Claudia López, the mayor of Bogotá, announced the re-imposition of partial and rolling lockdown measures across the capital city.

The mayor has had to react to a new surge in Covid-19 infections. By mid-July Colombia had logged 134,000 cases of coronavirus and 4,714 deaths. Over 32% of infections and one-fifth of all deaths occurred in Bogotá. A month ago the capital city, with a population of 8m people, was reporting around 1,000 cases a day, a number that surged to 1,400 in early July and then rose to over 2,000 in the middle of the month. The city has 1,161 intensive care unit (ICU) beds, and the occupancy rate has risen to a dangerous level: 89.9%. López did not mince her words, saying the figures showed an “enormous spread of contagion”. She added that “July and August are going to be the most difficult months to pass – I insist pass, not postpone – the pandemic’s peak”.

The plan imposes renewed rolling two-week lockdowns on specific neighbourhoods of the city. A first group of eight with a combined population of 2.3m people (including Ciudad Bolívar, Chapinero, Santa Fe, and Usme) started a two-week quarantine immediately. They are to be followed on 26 July by another four neighbourhoods, with a further group of three locking down for two weeks from 10 August. In the affected areas only one person per household is allowed to go shopping for basic necessities once every day. Sales of alcohol are prohibited. Movements are also restricted based on ID card numbers and there is an 8pm to 5am curfew.

Mixed reaction

Claudia López is currently one of Colombia’s most popular politicians (some see her as a potential centre-left presidential candidate in the 2022 elections). Despite that, the renewed lockdown attracted criticism. Shopkeepers in the Federación Nacional de Comerciantes (Fenalco) opposed the rolling quarantine, which they said would paralyse the capital and trigger more lost jobs and bankruptcies among crisis-hit small and medium sized enterprises (SMEs). In contrast a group of 14 medical associations wrote an open letter to López and President Iván Duque calling for the entire city to be fully locked down for two weeks. These groups also called on the Duque administration to implement a “real and effective basic income” scheme for the poor and vulnerable and for informal workers, designed to guarantee food supply and access to basic public services.

Relations between the government and the Catholic Church in Nicaragua, tense at the best of times, took a turn for the worse this week when a fire in Managua cathedral consumed a sculpture of Jesus Christ brought to the country in 1638. Vice President and First Lady Rosario Murillo wasted no time in attributing the fire to candles, a hypothesis adopted by the police, but Cardinal Leopoldo Brenes, the archbishop of Managua, denounced “an act of terrorism to intimidate the Church”.

The fire broke out in a chapel in Managua cathedral on 31 July. Within hours Murillo maintained that it had been caused by candles, saying “our people are very devoted”, that had set alight a curtain. The police released three separate reports in as many days, concluding that the fire was indeed “accidental”. They argued that the blaze was the result of “accumulated vapours” from alcohol sanitiser used by visitors, combined with high temperatures, which rose in the chapel and later descended when they were ignited by a candle. Brenes pointed out that there were no candles and no curtains in the chapel.

Demanding “a serious, careful and transparent investigation”, Brenes said that the fire had been caused by a bomb tossed into the chapel. He connected the fire to an incident on 20 July when a break-in damaged the entrance to the cathedral. “Everything was calculated, how to enter…and how to escape…this was planned,” Brenes said. He urged people to pray in order to “defeat these malign forces”.

Two female witnesses claimed to have seen a man throw an explosive device towards the chapel. One of them changed her testimony after being removed from the cathedral and questioned by the police. The fire prompted a response from Pope Francis who said his thoughts were with Nicaraguans after “the attack” and wrote to Brenes condemning the “act of vandalism”.

This is not an isolated incident. At least five churches in Nicaragua have denounced aggression, theft, and profanation of sacred symbols in the last two weeks alone, while the local human rights group Centro Nicaragüense de Derechos Humanos (Cenidh) has reported 24 such attacks over the course of the last 20 months. It has attributed the attacks to more fanatical supporters of the ruling Frente Sandinista de Liberación Nacional (FSLN), egged on by the government led by President Daniel Ortega, who has accused the Nicaraguan Church of siding with opposition protesters in April 2018 to remove him from power.

The most recent attacks follow a decision by the archdiocese of Managua to suspend the popular annual festival in honour of the capital’s patron saint Santo Domingo de Guzmán in August because of the coronavirus (Covid-19) pandemic, the severity of which has been downplayed by the Ortega administration.

The archdiocese of Managua censured the Ortega administration on 3 August, saying that Nicaragua had reached an “extreme of dehumanisation”, which was made manifest by “negligence in public healthcare services, the abuse of political prisoners, and the harassment of families and independent media, and criminal impunity”. It claimed that more than 100,000 Nicaraguans had gone into exile due to a lack of work, “political persecution”, insecurity, and violation of their fundamental rights, “denying them the right to live with dignity in their own country”.

Police report

Nicaragua’s national police, directed by Francisco Díaz, son-in-law of Daniel Ortega and Rosario Murillo, said in their report that there were no traces of explosive material in the chapel. Social media users questioned how it was that the plastic sanitiser that the police cited as the cause of the fire was nearly intact, while metal structures just above the sculpture of Christ had melted in the intensity of heat from the blaze.

Paraguayan authorities are implementing a new strategy for dealing with the leaders of the powerful Brazilian drug trafficking organisations (DTOs) that operate in the shared border but are based in Paraguay. Following recent episodes in which Brazilian drug traffickers have outgunned and overwhelmed the Paraguayan security forces as they try to release arrested associates, the plan now appears to be to hand over DTO leaders to Brazil as swiftly as possible. The strategy appears to be working, with Paraguayan authorities foiling a new rescue attempt this week.

Brazil’s largest DTOs - the Primeiro Comando da Capital (PCC) and the Comando Vermelho (CV) - are well established along the 1,365km Paraguay-Brazil border. These DTOs exploit the fact that in parts this is a dry border and there is little control, particularly on the Paraguayan side. The Paraguayan security forces’ operational limitations and relative lack of firepower compared with the DTOs themselves, has also led many wanted Brazilian kingpins to set up their base of operations in Paraguay, from where they can often operate unchallenged by law enforcement. The extent of the Paraguayan security forces’ weakness has been exposed through daring prison breaks and heists perpetrated in the border area in recent years, including the infamous 2017 Prosegur heist in Ciudad del Este, Alto Paraná department’s capital and Paraguay’s second city [SSR-17-05].

Since then, concerns have grown that Brazilian DTOs could easily overpower the Paraguayan security forces and release some of their imprisoned leaders. These concerns led in November 2018 to the deportation to Brazil of CV kingpin Marcelo Fernando ‘Piloto’ Pinheiro Veiga, at the time Brazil’s most wanted drug trafficker [SSR-18-12]. Pinheiro was being prosecuted in Paraguay for drug trafficking and murder. But Paraguay’s President Mario Abdo Benítez ordered Pinheiro’s immediate deportation and delivery to the Brazilian police amid intelligence reports about a major operation being planned by his associates to rescue him following six failed breakout attempts. Abdo Benítez justified the decision arguing that this would ensure that Pinheiro faces justice.

A second Brazilian drug trafficker, Rovilho Alekis ‘Bilao’ Barboza, a suspected PCC leader, was also deported three days later, on similar grounds. Paraguayan government officials said that deporting Brazilian traffickers to Brazil could be an effective way to combat transnational drug trafficking and that the Abdo Benítez government would continue to do so in the future. The trend continued when Giovanni ‘Bonitão’ Barbosa Da Silva was summarily deported and delivered to the Brazilian police. The PCC’s suspected leader in Paraguay, Barbosa, who is wanted in Brazil, was arrested by the Paraguayan police late on 9 January during an operation in Pedro Juan Caballero (PJC), the capital of Paraguay’s Amambay department. The operation was the result of months of surveillance on Barbosa by Paraguayan and Brazilian police.

Hours after his arrest, a group of some 20 suspected criminals launched an armed attack on the PJC police station in which Barbosa was being held to try to free him. The criminals managed to capture two police officers, but the police were able to repel the attack, rescue their colleagues, and even arrest two of the attackers. Then at the break of dawn on 10 January the Paraguayan government announced that Abdo Benítez had ordered Barbosa’s “immediate expulsion” to Brazil. Barbosa was delivered to the Brazilian police a few hours later. The Abdo Benítez government claimed that Barbosa’s arrest and deportation “shows that Paraguay is no longer a safe haven for Brazilian criminals”.

‘André do Rap’ next?

The next target for the Paraguayan and Brazilian authorities could be André ‘André do Rap’ de Oliveira Macedo. A key member of the Primeiro Comando da Capital (PCC) in Brazil’s São Paulo state, De Oliveira was detained in São Paulo in 2019 and placed under preventive arrest. But he was released on October 2020 after a Brazilian supreme court judge granted him habeas corpus [WR-20-41]. The court ruling was quickly reversed but De Oliveira could not be found. The Brazilian police expects that he fled to either Bolivia or Paraguay.