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Dominican President Luis Abinader unveiled plans on 16 September to save public funds through restructuring public administration, among other measures. According to a press release by the office of the presidency, most of the proposals, which are widely reported as saving some RD$25bn (US$417m) of public funds, require approval by the bicameral legislature, in which Abinader’s Partido Revolucionario Moderno (PRM) has a clear majority.

The same statement adds that the four objectives of the reform, which Abinader presented a month after taking office for a second term, are to optimise funds to free up financial and human resources, redirecting them to areas such as health, education and citizen security; improving coordination between institutions to reduce the disbursement of funds; eliminating the duplication of spending; and cutting red tape.

Key proposed changes include plans to merge the ministry of higher education, science and technology (Mescyt) with education (Minerd); merge the finance ministry with the economy, planning & development ministry; and eliminate the administrative ministry of the presidency, turning it into an administrative secretariat under the presidency. It also proposes that the agriculture ministry absorb the Dominican agrarian institute (IAD), among other changes and calls for the elimination of institutions like the national council for Dominican communities abroad (Condex) and the national population and family council (Conapofa), among others.

Finance Minister José Manuel Vicente also outlined several other cost-cutting measures, such as plans to improve the efficiency of state advertising and to prohibit the purchase of non-essential vehicles. It also proposes a freeze on the number of public employees, keeping these at August 2024 levels, with the exemption of the police, military officials, and medical personnel and teachers, with the public administration ministry able to approve the contracting of extra staff in these areas when required.

The US Department of Agriculture (USDA) expects Brazil to overtake the US as the world’s biggest soya exporter in the current season (2011/12), with 38m t of exports, to forecast US sales of 36.06m t. This will be the second time that Brazil has overtaken the US to become the world’s biggest soya exporter.

The USDA increased its forecast for Brazil’s soya crop in 2011/12 to 75m t and reduced its estimate for the US crop to 82.9m t. The Brazilian crop is currently being sown and the USDA reported that conditions in Brazil’s growing regions have been propitious, while the 2011/2012 US crop, which is now almost harvested, is likely to fall from the 90.6m t reported for 2010/11 because of poor weather conditions. The weather in the first part of 2012 t will be decisive for the size of the Brazilian crop, as that is when the soya crop reaches maturity. Also decisive will be the path of soya prices in November-December.

Some Brazilian farmers have been switching to maize from soya, because the price outlook for that crop looks better.  Over the past 12 months international soya prices have fallen by 16%, while maize prices have been steady, rising 1.6%.

The 2011/12 figures from the USDA represent quite a turnaround from the 2010/11 season. Then, Brazil exported 29.9m t of soya, while the US exported 40.8m t.

Only once before, in 2005/06, was Brazil the world’s biggest soya exporter, when it shipped 26m t, compared to 25.5m t from the US. Although the US will probably recover its position as the world’s biggest soya exporter in 2012/13, this may be the final time it can claim the title. Brazil simply is more productive and has more virgin land available for soya.  These advantages are being compounded by weakness of the Real against the US dollar since September. This has meant that Brazilian soya has become cheaper than US soya.

The US indeed expects to become the biggest soya exporter in 2012/13 but thereafter it will have to yield to Brazil simply because Brazil has so much land which could be used for soya: a further 70m hectares in Brazil are available for soya, according to Brazilian soya producers.

Already, Brazil’s yields are higher than those in the US. In states like Paraná and Mato Grosso,  Brazilian soya producers get yields of about 3t per hectare, which is a bit above the long run US average of 2.9t per hectare.

It is also likely that Chinese investment will bring more land in Brazil into soya production, so that Brazil’s dominance of the world soya market will come sooner rather than later.

It is worth noting that the USDA is far less optimistic about Argentina’s immediate soya crop prospects. It expects Argentina’s 2011/12 soya crop to fall by 1m t to 52m t, as farmers switch back to maize. Over the past 10 years, the acreage given over to soya in Argentina has doubled, as the price of the oil seed has surged. The USDA expects Argentina’s maize crop to increase to 29t in 2011/12 of which 20m t will be exported.

The USDA is forecasting another bumper soya crop for Paraguay, of 7.6m t, of which 5.8m t will be exported.

• Argentina

Argentina’s wheat crop is likely to fall slightly to 13m t in the 2011/2012 season, in the USDA’s view, with exports falling to 7.5m t, down from 9.5m t in 2010/11.

BRAZIL | Missing its target. On 30 January Brazil’s central bank reported that the country’s primary fiscal surplus for 2012 was R$105bn (US$52.5bn), 24.9% less than the R$139.8bn target set by the government of President Dilma Rousseff. Although the primary surplus is still substantial, representing 2.38% of Brazil’s GDP, it is still worrying for the government given that the 2012 figure was lower than the R$128.7bn it posted in 2011.

The central bank attributed the lower figure primarily to the slower growth rate posted by Brazil last year as a result of the “global economic crisis”, pointing out that the government had received lower levels of taxes due to reduced economic activity particularly in the business sector. However, the bank also said that the tax take was affected by the various tax-breaks introduced by the government targeting the manufacturing sector in a bid to coax the domestic economy into increased growth. In other words, the government’s plans to stimulate growth appear to have cost the government a great deal without really producing much of an impact by way of increased economic growth.

This should be cause for concern for the government and in particular for economic policymakers in the Planalto, who are insistent that the various measures adopted by the government will eventually produce the desired results in stimulating the economy. Indeed the Rousseff government has said that despite the lower-than-expected primary surplus, it intends to carry on with its ambitious infrastructure investment plan (PAC).

URUGUAY | Tourism suffers. Tourism revenue fell by 6.1% in 2012 on the previous year to US$2.04bn as visitor numbers dropped to 2.85m, down 3% on 2011 when the record of 3m was set. In the first fortnight of January the figure fell by 14% on the same period in 2012. Tourism minister Liliam Kechichián said there were a number of factors at play, including a loss of competitiveness with Brazil, and the fact that connection problems have not been fully resolved since the closure of the flagship carrier Pluna.

The government is trying to boost the tourism sector with a series of measures. In December Kechichián announced a new tourism promotion programme under which foreign visitors receive a 10.5% value added tax (VAT) rebate on debit and credit card purchases. Meanwhile, the state-owned oil firm, Administración Nacional de Combustibles, Alcoholes y Portland (Ancap), will reduce its airplane fuel prices by 8% as of 1 February in a bid to attract more air traffic to the country.

Sidebar: Adjusting fiscal figures

Brazil’s central bank has pointed out that just as it has done in the last two years, it will adjust the fiscal figures, as it is allowed to do by Brazilian law, in order to meet the set target. “The target established for the year will be met after the expenses from the Programa de Aceleraçao do Crescimento [PAC] are discounted as provided by the budgetary law,” the bank statement concludes. According to the bank the R$34.8bn spent on PAC investment projects will be written off from the books this year, ensuring that the official target is formally met.

ARGENTINA | Transport unions plan strike

Roberto Fernández, the head of Argentina’s Unión Tranviarios Automotor, announced that trade unions affiliated to transport workers would strike on 31 March unless the government altered its income tax thresholds. Nevertheless, Fernández left open the possibility of a change of tact. “It is never too late to reach an agreement,” he said. “We are not trying to defy the government as the workers voted for the government and it will finish its term.”

ARGENTINA | Kicillof attacks Citigroup

Speaking on 25 March, the Argentine economy minister, Axel Kicillof, described as “illegal” a deal between Citigroup and US District Judge Thomas Griesa, which effectively allows the US banking group some breathing space by allowing it to process interest payments on two Argentine debt repayments.

Over the weekend, Citigroup said that Griesa would not restrict it from meeting its payment-processing obligations relating to US dollar-denominated Argentine bond payments, due under local law on 31 March and 30 June.

Argentina has long accused Griesa of operating hand-in-glove with the vulture funds. Effectively, Griesa has said Argentina cannot make payments to the 92% of its bond creditors with which it was not in dispute, unless it made equal and simultaneous payments to the holdouts.
Griesa had jurisdiction because the bonds were issued under US law and payments were made through the US banking system. Because Argentina has refused to make payments to the holdouts it has been in partial default since June last year.

Citigroup argued that a separate set of payments, on bonds issued under Argentine law, and made from Buenos Aires through Citi Argentina, should not be affected by Griesa’s ruling. The judge appears to have made some changes and exceptions to his decisions in an attempt to nudge the two parties towards some kind of deal.

Griesa has also said that the court would not stop the banking group from exiting the Argentine custody business, as it has indicated it wishes to do. It is not yet clear what the impact of the decision will have on its retail banking business in Argentina. “From my point of view, the deal they have signed with the vultures clearly violates Argentine law,” Kicillof said. “Reading the fine print of the deal,” he added, “what we find is a trap possibly aimed at scamming the bondholders.”

BRAZIL | New role for Bndes

Brazil’s state development bank (Bndes) is to function as more of an “originator” of projects, rather than an exclusive financial backer, according to the finance ministry. In effect this will mean that Bndes will put up small tranches of financing for projects, effectively given them a seal of approval that it is hoped will attract other, private investment.

The move marks the end of Bndes’ cycle of expansion. In 2008, Bndes financed R$92.2bn (US$29bn) worth of projects; by 2013 that number had doubled to R$190.4bn (US$60bn); last year marked a slight decline to R$187.8bn (US$58bn).

Despite the real term increase over those years, the percentage of investment in the country fell from a peak of 20.2% of GDP in 2010 to around 17% in the last year. At present, there are rumours in Brasília that, after the state-run oil company Petrobras, Bndes, which has never been properly audited and has a larger portfolio than the World Bank, could provide the next big political and economic scandal in Brazil.

BRAZIL | African investments down

Since 2012, Brazilian interest in African investment opportunities has declined considerably. The budget for cooperation between Brazil and African countries has fallen by 25% over that period.

Fundação Getulio Vargas had 60 projects in Africa three years ago and now has just two. Vale, the giant mining company, has closed its activities in three African countries. The state-run oil company, Petrobras, has returned five exploration blocks in the last two years.

Brazilian exports to Africa have fallen by 20% in the past two years. Even humanitarian cooperation has been affected. In 2012, donations amounted to US$65.2m. In 2013, they fell 89% to US$6.9m.

Lenín Moreno, the presidential candidate for the ruling left-wing Alianza País (AP), has established a decisive lead over Guillermo Lasso, his rival from the centre-right Movimiento Creo, ahead of the second round of elections on 2 April, according to several opinion polls published in recent days. None of these polls have the reputation of Cedatos, which forecast a narrow win for Lasso in a poll conducted shortly after the first round on 19 February (two were commissioned by overtly pro-government media), but there is reason to believe that Moreno might have overhauled Lasso.

When Diagnóstico released two opinion polls in the first week of March showing Moreno ahead of Lasso, first by 9.2 percentage points and then by 12.7 points, there was reason to treat the findings with a degree of caution. The polls were commissioned by the pro-government daily El Telégrafo, and they were published shortly after Cedatos, which came closest to accurately predicting the result of the first round of elections; they showed Lasso ahead by 4.2 points. But then on 11 March the opposition daily El Universo published a poll by Perfiles de Opinión which put Moreno 15.4 points ahead of Lasso. The findings, taken from a survey of over 6,000 people in 23 of the country’s 24 provinces, show Moreno received 51.02% of voting intentions while Lasso languished on 35.53%.

A breakdown of the Perfiles de Opinión survey showed Moreno performing significantly better in coastal areas with a 20-point lead (53.4% to 33.68%), which is consistent with the results of the first round contest, while the gap narrowed to nine points in the 10 highland provinces (48.71% to 37.06%), which were split equally in the first round. Moreno also held a slender lead in the Amazonian provinces (43.89% to 43.76%), which Lasso had won decisively in the first round.

There are two reasons why Moreno might have established a potentially decisive lead over Lasso. The first is that Moreno has shown himself open to reforming elements of the present government, notably the controversial communications law, while Lasso recently promised to tear down the edifice of the Citizens’ Revolution by means of a constituent assembly, even though many aspects of it, especially in the social sphere, remain very popular. And this ties in directly to the second reason. The government has gone into overdrive to pin responsibility for the financial crisis of 1999, the worst in Ecuador’s history, on Lasso, and to portray him as an ‘unfeeling banker’ with no sense of social responsibility.

On 8 March the ruling AP staged a rally in Quito to mark the 18^th anniversary of the financial crisis, which led to hundreds of thousands of Ecuadoreans emigrating after their bank deposits were frozen. Thousands took to the streets in repudiation of Lasso, who was economy minister for a month under Jamil Mahuad (1998-2000). The march ended at the national assembly whose (AP) president Gabriela Rivadeneira urged the demonstrators to remember “who was behind that forced migration of more than 2m Ecuadoreans”. She added: “They lost everything because of the irresponsibility of a few bankers who are today financing the banker’s [Lasso’s] campaign from Miami.” President Rafael Correa, meanwhile, tweeted; “8 March 1999: let us never forget it”, saying that the state had to spend US$8bn propping up the banking sector.

Lasso claimed that the Banco de Guayaquil, of which he was executive president, never borrowed a cent from the government. He also denied that he made the decisions which led to the financial crisis and denounced the accusations as part of a dirty campaign against him. But the polls suggest the mudslinging has met with some success.

• Army chief fired

Luis Castro Ayala was replaced as commander of the army last week by division general Edison Narváez Rosero. Ayala was dismissed after claiming that there were failings in the safeguarding of ballots during the general elections on 19 February, which was firmly denied by both the defence ministry and the national electoral council (CNE). “Electoral material was under the permanent and uninterrupted custody of the armed forces,” the CNE maintained in a statement. The CNE confirmed that the national police would provide security of ballots in the second round on 2 April.

Former president Alvaro Uribe (2002-2010) already faces a range of court investigations over alleged human rights violations and links to paramilitary groups. On 17 February it became evident that there is one more on the list: the supreme court opened a case to investigate whether now-senator Uribe has been involved in witness tampering. The news came just three weeks before the congressional elections on 11 March and may influence the performance of his right-wing Centro Democrático (CD).

The latest legal developments relate to a longstanding vendetta between Uribe and Senator Iván Cepeda of the left-wing Polo Democrático Alternativo (PDA). Since 2014 Cepeda has accused Uribe of supporting the creation of right-wing paramilitary groups in the northern department of Antioquia. Cepeda said he had witness statements from imprisoned former paramilitary fighters testifying that one paramilitary force, the Bloque Metro, had been set up on the Guacharacas farm, owned by Uribe’s family. At the time Uribe took immediate legal action, submitting a case to the supreme court accusing Cepeda of seeking to incriminate him through the use of false witnesses.

This action now seems to have backfired badly. In its ruling on the case, the supreme court has dismissed all the charges against Cepeda and instead ordered an investigation into witness tampering by Uribe. The court says its investigations, which included wiretaps, revealed a concerted campaign to influence witnesses and threaten their families. It also said there had been efforts to pervert the course of justice, including the unexplained disappearance of key evidence files.

Uribe reacted angrily, saying it was legitimate for him to seek out witnesses to defend himself and his family, and repeating allegations that Cepeda had used his position as a member of a congressional human rights commission to visit prisoners and “offer inducements to people to testify against me and my brother” (the former president’s brother Santiago is currently in jail accused of setting up a paramilitary group). Uribe went on to claim that in opening the new investigation against him the Colombian judiciary was motivated not by a desire for justice but by a “persecutory spirit”.

It remains to be seen whether this will influence the congressional elections due on 11 March, and the first round of presidential elections which follow on 27 May. Both Cepeda and Uribe are congressional candidates. Polls in January suggested CD might capture around 15% of the senate vote. The official CD presidential candidate, Iván Duque, has so far had limited impact. His best performance in a handful of opinion polls in early February was to place fourth with 8% support.

Duque and other party leaders may have concluded that the best political defence in these circumstances is to go sharply on the attack, denouncing a wider anti-Uribe conspiracy. Duque has claimed that there is an “unwritten agreement” between former Fuerzas Armadas Revolucionarias de Colombia (Farc) guerrillas and the government led by President Juan Manuel Santos to imprison Uribe after the elections.

• Conspiracy?

Iván Duque tweeted “Farc have never forgiven [Alvaro Uribe] for pinning them down. Colombians must defend the leader whose patriotism defended us and gave us hope”. Other Uribista leaders criticised what they said was a “politicised” supreme court decision. President Santos, on the other hand, said Duque’s claim of an anti-Uribe conspiracy was “absolutely ridiculous”.

Despite their different political complexions, all Latin American governments are seeking a sometimes-elusive holy grail: export-led growth. And you can’t have sustained export growth without the port capacity to handle it. The evidence indicates that the region needs to invest a lot more in its ports.

Container throughput at Latin American ports grew by 7.7% last year, to reach 53.2m TEUs (20-foot equivalent units), according to a sample of 31 countries and 118 ports conducted by the Economic Commission for Latin America and the Caribbean (Eclac). There are various ways of putting this in context. First, it was much faster than regional economic growth of around 1.2%. There are various reasons for this. In times of relative fiscal austerity, the external sector is often more dynamic than the domestic market. As trade diversifies, the containerised share (distinct from bulk commodity cargo) is on the increase. Second, the region’s share of global container traffic is still relatively modest. It accounts for around 8.5% of the world population but represents a lower 7.1% of the world’s container handling.

Some other points are worthy of note. Ten countries account for over 80% of all regional container traffic. In order of volume they are led by Brazil, Mexico, Panama, Colombia, Chile, Peru, and Argentina. The east coast of South America (12%), Pacific Mexico (11%), and the Caribbean (12%) saw the strongest year-on-year container growth. The region’s largest container port is Colón in Panama, which last year handled 4.32m TEUs. Globally speaking this is still relatively small stuff. Last year Shanghai, the world’s largest port, handled 42m TEUS. The world’s ten biggest ports handled 32.2% of global container traffic. The ten biggest ports in Latin America handled around a tenth of that – only 3.5% of global container traffic.

A report last year by CAF Development Bank of Latin America estimated that the gap between cargo demand and port capacity will reach 113m TEUs by 2014, and that to close it a total of US$55bn will need to be invested over the next two decades. At times of fiscal austerity much of that investment may have to come from the private sector via port concessions and public-private partnerships (PPPs). The largest investments will need to go into countries like Mexico, Brazil, and Panama. Investments will need to go not just into the ports themselves but into dredging and multi-modal access routes.

According to Rafael Farromeque, the report’s author, “The outlook by 2040 for the maritime and port sector in Latin America and the Caribbean suggests an attractive environment for investors, based on factors such as expected GDP growth, industrial diversification and modernisation, strengthening of the services sector, improvement of logistics corridors, among others, which along with port modernisation, will lead to port capacity growth to over 150m TEUs (tripling the current traffic), to having more than 20 ports with capacity of over 2m TEUs (currently there are only six) serving fully laden new generation vessels at the main nodes, becoming part of the main maritime routes with direct connections to all markets and extensively developing cabotage and river traffic, among others.”

Long range predictions of trade growth, cargo demand, and required port capacity are of course subject to a considerable degree of uncertainty. One example: whether or not Brazil, the region’s largest economy, will open up more to global trade, as desired by current economy minister Paulo Guedes, remains to be seen. Brazil’s trade represents just under 25% of its GDP, compared with over 55% of GDP for the much more open Chilean economy. If Brazil becomes a little more like Chile in this regard, Latin American port traffic growth could accelerate dramatically.

The Dominican Republic is preparing for May 2020 elections in the face of anti-corruption protests, a bitter divide in the ruling party, and key strategic debates.

President Danilo Medina of the Partido de la Liberación Dominicana (PLD) is entering the final throes of his second consecutive presidential term (2012-2016, 2016-present), and sparked opposition after floating the idea of a constitutional change to allow him to run for a third. 

Medina was challenged from within the PLD by his predecessor former president Leonel Fernández (1996-2000, 2004-2008, 2008-2012) who said he believed a constitutional reform would put democracy at risk. The ensuing internal power struggle worsened as Medina refused to rule out pushing for a third term, until he finally addressed the Dominican people on 22 July and said he would not run again. 

During that speech Medina criticised the internal PLD campaign against him and made repeated references to “new blood” in the party, raising questions over who the pro-Medina wing of the party would support in primaries scheduled for October. Fernández, who has himself ruled the country on three occasions and is married to serving vice-president Margarita Cedeño, will also run in the primaries. 

The PLD has held uninterrupted power since 2004, but the row over Medina’s third term has weakened party unity. The scale of internal divisions was made evident by the intervention of military and police forces, which were called in to keep the peace around the congress building in June. Voters were also split on the issue, with 68.3% of respondents to a 6 May poll by Gallup rejecting the idea of a constitutional amendment, compared with 29.4% who said they supported it. Within the PLD, 55% supported it and 42% opposed it, and 49.5% said they would vote for Medina in a PLD primary compared with 27.9% for Fernández. Medina’s withdrawal will also affect political alliances. The PLD pact with the centre-right Partido Revolucionario Dominicano (PRD) would only have held if Medina ran for president, said PRD leader Manuel Vargas on 10 July, and may consequently now end. 

While politicians wrangle and negotiate, ordinary Dominicans have got other things on their minds. The aforementioned Gallup survey revealed that 69% of respondents said the government has not fought corruption successfully, a major issue in the nation. While Medina and the PLD have ruled during a period of strong economic growth, which averaged 5.1% per year from 2008-2018 according to the World Bank, people are concerned about the government’s handling of the corruption case involving Brazilian construction firm Odebrecht. The region-wide corruption case saw bribes totalling US$92m paid to secure public works contracts in the DR between 2001 and 2014, and large-scale protests have taken place against the Medina government over the past two years. The PLD is tainted by corruption investigations covering its recent administrations, while former Partido Revolucionario Moderno (PRM) senators are also linked to the Odebrecht case. The DR is ranked 129 of 180 countries in Transparency International’s Corruption Perceptions Index 2018, underlining the scale of the problem facing a future government.

Protests have involved various political actors including Movimiento Coalición Democrática, a broad coalition that formed to fight any attempt by Medina to remain in power. These protests have been supported by the PRM, a centre-left party formed in 2014 by expelled members of the PRD, which is now the main opposition. It is led by Luis Abinader, a 52-year-old economist who will stand in the presidential race. Smaller parties such as the Partido Revolucionario Social Demócrata (PRSD) and the Partido Humanista Dominicano (PHD) have also been involved, as have social movements such as Dominicanos por el Cambio (DxC), Movimiento Marcha Verde, Bien Común, and El País que Queremos. Both the Catholic and Evangelical churches also spoke out against a constitutional reform, warning that it would have grave consequences.

Another survey from the Instituto Dominicano de Estudios Aplicados, Mercadeo y Encuesta, published on 22 July, shows that security (33.3%), high cost of living (23.3%), corruption (16.7%), unemployment (13.3%), and Haitian migration (10%) are also worries for respondents. Conservative elements in the DR often cite a supposed threat posed by migrants from Haiti, who have been moving to their wealthier neighbour for decades in search of jobs and an escape from the political instability of their home nation. The Medina government refused to sign the United Nations (UN) global pact on migration in December 2018, a move approved by the PRM and the opposition Partido Reformista Social Cristiano (PRSC). The treatment of Dominicans of Haitian descent has been a hot topic in recent years, and rights groups have criticised a 2013 law that effectively blocks them from exercising their legal and political rights. Irregular migration along a porous border has encouraged the mistreatment of Haitian communities in the DR, as well as a campaign of deportations that violate international norms. Although the labour of Haitian migrants and their descendants continues to contribute to economic growth in the DR, each of the major parties is committed to reducing irregular migration from Haiti. Working out how to guarantee the rights of the descendants of Haitian migrants will also be a key issue for the incoming government.

The next president will also have to carefully manage relations with traditional ally the US, and China, an increasingly important partner. In 2018, Medina opted to end relations with Taiwan in favour of China, in line with a regional trend, with Costa Rica, Panama, and El Salvador having similarly made the change. In September 2018, the president invited Chinese state corporations to consider bids on key infrastructure projects such as modernising ports, railways, and dams. By February 2019 the two nations had signed 18 cooperation agreements, and a foreign ministry official estimated that Chinese investments in the Dominican Republic could reach US$10bn in the next few years. While funding for infrastructure projects may be welcome, a future government runs the risk of alienating the US by cosying up to China, as do the leaders of many other Latin American nations.

More encouragingly, the International Monetary Fund (IMF) predicts favourable economic prospects for DR. The IMF notes that the “economy rebounded to a record high growth of 7% in 2018, with the positive momentum carrying into early 2019”. It expects growth to be around 5.5% in 2019, driven by a slowdown in credit expansion, a less supportive external environment, and expected higher oil prices. This could help to prop up the vote for the PLD, which would surely suffer at the elections if the economy started to falter.

A lot can happen between now and May 2020. Voters go to the polls on 17 May, and there will be a runoff on 28 June if there is no candidate that wins 50% of the vote. A runoff seems likely given the results of a survey from the IDEAME released July 22, which shows Abinader on 40.5%, Medina on 26%, and Fernández on 15%. Former President Hipólito Mejía (2000-2004) of the PRD is on 8.3% followed by a raft of other politicians on less than 5% each. First there is the question of who will win the PLD primary. Then the issue of whether pro-Medina PLD voters would support Fernández if he ends up running for president, and vice-versa. Even if we assume PRD voters will coalesce behind the party’s presidential candidate, it looks set to be a tight-run race between Abinader and the PLD candidate. In the long term, it remains to be seen whether the wounds from intense infighting in the PLD can be healed, or whether a new party will form, much like the PRM did in 2014.

Authorities in some major cities such as São Paulo have been seeking to expand the powers of local law enforcement institutions. The federal government has its various security forces and state governments have their civil and military police, while city halls oversee their municipal guard. The São Paulo city council has approved a decision by the mayor, Ricardo Nunes, to rename the city’s ‘civil municipal guard’ (GCM) as the ‘municipal police’, but the decision has faced legal resistance.

Nunes’ proposal to rename the GCM as a police force came after a ruling by the federal supreme court (STF) on 20 February. The court decided that local lawmaking bodies are allowed to decide whether to expand the roles of their municipal guard’s remit to include a wider range of responsibilities that police forces carry out, such as making on-the-spot arrests. The case arose from an appeal first presented to the top court by the São Paulo city council in 2010. The appeal sought to overturn decisions by lower courts in São Paulo state that struck down sections of a municipal law passed in 2004 which expanded the role of the GCM to include “protecting municipal property, services, and facilities” and other clauses which could have provided a legal basis for municipal guards to make on-the-spot arrests.

Previous rulings in lower courts had declared the expansion of the GCM’s functions as unconstitutional on the grounds that the 2004 law clashed with laws approved by the São Paulo state legislative assembly that defined the remit of the state police forces. However, in February this year, the STF ruled in favour of the city council, highlighting that the municipal guards are officially part of Brazil’s public security system and that Article 144 of the federal constitution grants municipalities the authority to decide the responsibilities of their local law enforcement institution.   

With the STF ruling, the Nunes administration felt emboldened enough to advance a proposal to officially rebrand the GCM as a police force. The city council approved the name change on 13 March, but on 18 March the São Paulo court of justice (TJ-SP) accepted a petition by state prosecutors to suspend the local legislation. The TJ-SP stated that, although the STF had allowed local lawmakers to expand the remit of the GCM to include more policing responsibilities, the ruling by the top court did not equate municipal guards with police officers, and the federal constitution makes clear distinctions between the different levels of federal, state, and municipal law enforcement personnel. The São Paulo city council expressed its intention to challenge this 18 March ruling. Nunes also expressed hope that the TJ-SP ruling could be overturned.

These legal clashes are hindering the mayor’s tough-on-crime posturing. While campaigning for re-election during the municipal elections last year, Nunes and his running mate Ricardo Mello Araújo promised to recruit more municipal guards and boost their security presence in the city. Mello Araújo had formerly served as a commander of the Rota special operations battalion of the São Paulo military police, and on the campaign trail last year he expressed intentions to strengthen the municipal guard and turn it into a force that resembles Rota.

According to public security policy experts cited in the press, the name change represents a bid by Nunes to appeal to conservative voters who appreciate hardline security rhetoric, amid media speculation that the mayor might run for the governorship of São Paulo state in 2026.

Rio municipal guard

Eduardo Paes, the centrist mayor of Rio de Janeiro, has also been seeking to rebrand the Rio municipal guard as a ‘municipal security force’. However, unlike Nunes in São Paulo, Paes reportedly lacks support for this proposed legislation in the Rio de Janeiro city council. Polling firms have suggested that Paes would be one of the leading candidates in the 2026 election for the governorship of Rio de Janeiro state. If the mayor runs for governor next year, he is likely to have the backing of President Luiz Inácio Lula da Silva and the ruling left-wing Partido dos Trabalhadores (PT), so his main rivals will likely come from the right, which could explain Paes’ efforts to increase his appeal to conservative voters by ramping up the tough security rhetoric.

Despite Haiti’s deep political and security crisis, a coalition of different groups is arguing that new investment may be the way forward.

It was an unlikely event. On 29 June a group of Haitian government ministers, together with foreign diplomats, bankers, and business leaders gathered at the Palm Residence Hotel in Pétion-Ville, one of the areas of relative safety in the still largely gang-controlled capital. This was to mark the launch of Global Gateway, the European Union (EU)’s investment strategy, which aims to mobilise over €340m (US$387m) for Haiti by the end of 2027. It was arguably the first event of its kind since an international investors get-together in 2009, during the presidency of René Préval (1996-2001, 2006-2011).

Prime Minister Alix Didier Fils-Aimé said his interim government intends to overcome security and economic challenges to create an environment conducive to investment, especially in infrastructure, ports, airports and logistics, agriculture and agribusiness. He said “The time has come to invest in Haiti’s resilience. The time has come to invest in its youth…[and] in its productive capacity.” Public works minister Joseph Almath Pierre Louis added that “Waiting for perfect conditions cannot constitute a development strategy”.

Earlier the new approach was outlined in an interview with the Miami Herald by the EU ambassador to Haiti, Hélène Roos, which was published on 26 June. She said the EU was moving away from the old model of offering direct budget support to government departments. In its place it was offering support for public and private investment partnerships in areas such as climate resilience, infrastructure, seaports, and renewable energy. EU support is intended to attract additional loans from multilateral banks and private sources to leverage maximum benefits. She added “we shouldn’t wait. We should start now to put people in contact.”

There are of course enormous obstacles to an investment-led recovery, primarily the continuing proliferation of gang violence across the country. Some recent positive developments remain small by comparison with the scale of the challenge. The government says it is aiming to hold elections this year with a new administration due to take office in 2027 – a necessary but not sufficient condition for pacification.

• Violence

On 15 June the United Nations high commissioner for human rights, Volker Türk, said gang violence in Haiti had resulted in at least 2,300 deaths, 1,100 injuries, and 99 kidnappings since the start of the year alone.

The Caribbean Community (Caricom) has said it will support the renewal of the mandate for the 5,500 strong Gang Suppression Force (GSF), which was authorised by the United Nations Security Council last year. The GSF has regained control of some strategic roads and neighbourhoods in the capital. New judicial units are investigating mass crimes, including sexual crimes and corruption.

Among those touting the contribution that investment can make to stabilise Haiti some are pitching tourism projects. Garry Muzeau, of travel agency toursinhaiti.com, says the development of south coast resorts could generate a major surge in revenues but will first require big infrastructure spending. Of concern, however, is that another existing resort on the northern coast at Labadee is to remain closed until June next year because its owner, US-headquartered cruise company Royal Caribbean, is concerned over the security risks. The US State Department continues to classify Haiti as a “Level 4 – do not travel” destination. While new investment can help play a positive role in Haiti’s recovery, the political risks remain a serious disincentive.

The public sector deficit was US$375m in 2011. At around 0.8% of GDP, this was a much better result than the government had expected. The government had been forecasting a deficit of 1.8% of GDP. In 2010 the deficit had been 1.1% of GDP.

The main reason for the better-than-expected performance is probably a change in the way the state owned oil refinery, Ancap, is managing its stocks of oil. Ancap, according to local analysts, tries to play the oil markets by running up stocks when it thinks that oil is cheap and running them down when it thinks that the oil price is set to fall.

Besides that, there was also a marginal improvement in the government’s primary (i.e. operating, before debt-interest payments) surplus.  This was 2.1% of GDP in 2011. The improvement in the primary surplus was largely a result central government effort: the state companies, though profitable, are making smaller contributions to the treasury each year. The strong growth of the economy meant that debt interest as a percentage of GDP fell by 2.9 percentage points in 2011.

On the revenue side, the strong employment figures helped to boost the central government plus the social security system’s income. More impressively, the government managed to keep a tight grip on spending: government spending as a proportion of GDP actually fell in 2011. This is largely an arithmetical consequence of the strong (6%) GDP growth, though it also reflects some cuts in the government’s investment budget.

The main state companies, Antel (telecoms), UTE (electricity), Ancap (oil refining and cement)  and the state-owned banks are all continuing to make profits but year-by-year, their agglomerated profits continue to fall. One reason for this is that the government has not pushed up the prices state companies charge for their goods and services (particularly electricity) by as much as inflation. This strategy has suppressed the overall inflation rate.

Viewed over the long term, the fiscal position has deteriorated: at the end of 2007 the government was running a primary surplus of about 4% of GDP. The surge in oil prices in 2008 and the collapse of Lehman Brothers followed, and the government decided to hold electricity prices down, perhaps because 2009 was an election year. The result of this consistent policy has been a halving of the primary surplus, despite the strong economic growth.

Adjusting for the strong GDP growth suggests that the primary surplus is perhaps as low as 1% of GDP. So if the economy were to contract, the government deficit could shoot up alarmingly as the country’s debt burden increased again.

Some local economists argued that the government is running loose monetary as well as fiscal policies, which may be overheating the economy.

Industrial output: In 2011 industrial output grew by 5.3%, excluding the volatile contribution from the Ancap oil refinery whose performance often distorts the overall figure.  The overall industrial output index dropped by 12.6% in 2011 because Ancap’s refinery underwent a major refit in the final quarter of the year.

In 2010 the industrial output index rose by 4.5%. The best performing industry in 2011 was the (small) motor industry, which increased output by 46%, thus recording its second successive year of 40% + growth. The leather industry also had a good year, increasing output by 29%, and the chemicals industry which registered a 14% year-on-year growth. The food industry, the most important sector in the (non-Ancap) industrial economy, had a mixed year. Meat packing was down by 4% and soya processing was also down heavily. On the other hand, the dairy industry increased output by 20% and rice production was also up by 20%.

*** Clinton explains Israel’s stance on Iran to India.  It would be going much too far to say that US Secretary of State Hillary Clinton has given support to the idea of an Israeli strike against Iran, but comments she made in India on 7 May were understanding of Israel’s position.

Speaking in Calcutta about the possibility of an Israeli attack on Iran, she said: “India knows from its own experience that you have to pay attention to threat and that you have to be prepared for them in your own neighbourhood.  So I think that Israel is very worried that if Iran gets a nuclear weapon there might be a decision by some future leader to actually use it, and that would be devastating.”

*** Iran trying to bolster Hezbollah support.  On 7 February, the leader of the Lebanese-based Hezbollah movement, Hassan Nasrallah, pronounced “Iran does not command us” in an apparent attempt to put some distance between his group and Iran as the controversy over the Iranian nuclear programme escalated.

In Israel this comment was taken as a sign that Hezbollah was running scared and would not launch a retaliatory attack in response to an Israeli strike against Iran.  Then again, on 16 February, Nasrallah denied a Hezbollah role in the attempted attacks against Israeli targets in Georgia, India, and Thailand in what was seen in intelligence circles as another signal from Nasrallah that he does not want to get involved in the looming confrontation between Israel and Iran.

Now Iran’s Vice-President Mohammad-Reza Rahimi has been in Lebanon to see Nasrallah and to stiffen his support for Iran.  They met on 3 May to discuss “the political situation in the region and Israel’s threats to the region’s states and peoples”.  It is not known what was said in private, but Nasrallah announced that Hezbollah was ready to confront “all forthcoming challenges” and that it “remains steadfast in its policy and path”.

*** China first deep-water drilling rig becomes operational.  On 9 May, China’s first deep-water drilling rig was due to become operational, operating 320km southeast of Hong Kong in 1,500 metres of water.  Making the announcement, the official Xinhua news agency noted that about 70% of the oil and gas reserves in the South China Sea are contained in deep-water regions with depths over 300 metres.

Xinhua said that the South China Sea is estimated to have 23bn-30bn tonnes of oil and 16trn cubic metres of natural gas – which it said amounted to one-third of China’s total oil and gas resources.  It did not mention that China’s right to these resources is disputed.

El nuevo canciller de Brasil, Mauro Vieira, viajó de vuelta a Buenos Aires esta semana, donde él había trabajado como embajador (2004-2010). Las relaciones entre Brasil y Argentina están pasando por un delicado momento, con las exportaciones brasileras a Argentina habiendo caído agudamente en el 2014. Brasil también está preocupado acerca del potencial impacto sobre las exportaciones brasileras de los recientes acuerdos comerciales que la Presidenta Cristina Fernández firmó con China. Vieira se reunió con algunos miembros líderes de la comunidad empresarial argentina, quienes comparten estos temores. Pero de acuerdo con informes de medios locales, el principal enfoque de Vieira fue sobre los posibles sucesores de Fernández.

La comunidad empresarial brasilera está preocupada con que los nuevos acuerdos que firmó la Presidenta Fernández con China, podrían convertir al gigante asiático en el principal socio comercial de Argentina. Muchos en Argentina también están incómodos con la letra pequeña de los acuerdos, incluido Héctor Méndez, el presidente de la Unión Industrial Argentina (UIA). El Grupo Techint, un conglomerado Italo-Argentino, también cree que los acuerdos meramente  refuerzan la tendencia de China de comprar materia prima latinoamericana y vender de vuelta productos industrializados. El 11 de febrero, Fernández atacó a Techint a través de la televisión nacional, amenazando con cortar los subsidios de su gobierno debido a  sus críticas.

Ese mismo día, Vieira y el canciller de Argentina, Héctor Timerman, estaban tratando, y fracasando en negociar un nuevo acuerdo comercial. Después de la reunión, Timerman reconoció que el comercio entre los dos países necesitaba una “puesta a punto”, pero el proceso fue dejado para más adelante hasta una fecha no especificada. Antes del viaje de Vieira, el ministro de desarrollo de Brasil, Armando Monteiro, había hablado acerca de la “incomodidad” de Brasil ante los excesivos controles de Argentina sobre las importaciones y los problemas que las firmas brasileras han tenido para conseguir moneda extranjera en el país. Vieira fue diplomático acerca del acuerdo chino, declarando públicamente que “una relación estratégica con Argentina no significa que otros países deban ser excluidos”.

El diario argentino, El Cronista, citó a un empresario presente en la reunión de desayuno con Vieira diciendo que el ministro brasilero quería discutir las propuestas de los probables candidatos presidenciales para la relación Argentina-Brasil. Faltando sólo ocho meses para que Fernández deje el poder, la Presidenta está gradualmente perdiendo influencia, tanto en el país como en el exterior; una situación acelerada por el manejo del gobierno de la muerte de Alberto Nisman, el fiscal especial en el caso del atentado a la Amia.

Candidatos presidenciales

Un sondeo publicado el 8 de febrero por los encuestadores, González y Valladares, halló que Sergio Massa, del opositor Frente Renovador (FR), es actualmente el candidato líder para suceder a Fernández. En la primera encuesta desde la muerte de  Nisman, Massa tiene el 30,8% del apoyo, por delante de Daniel Scioli, el probable candidato del Frente para la Victoria (FPV), la gobernante facción del Partido Justicialista (PJ, Peronistas), en un 25,1% y el alcalde de la ciudad de Buenos Aires, Mauricio Macri, con un 23,1%. La encuesta de González y Valladares halló que el 54% de los entrevistados rechazan el manejo de Fernández y su gobierno durante el affaire Nisman. Esto parece haber afectado los números de Scioli. Sin embargo, significativamente, la encuesta no incluye cifras para Florencio Randazzo, el ministro del interior & transporte, quien crecientemente aparece como la opción preferida por Fernández.

Al ataque

El gobierno ha pasado a la ofensiva siguiendo a las fuertes críticas de EU sobre la muerte de Nisman. En una entrevista telefónica con el Washington Post, Timerman dijo que el incidente estaba “siendo utilizado para atacar al gobierno”. Cuando se le preguntó acerca de la posibilidad de recibir la ayuda de EU para hallar a aquellos responsables, Timerman fue terminante. “Existen algunos problemas en los Estados Unidos que el FBI no puede resolver. No sé porqué ellos piensan que el FBI puede resolver problemas alrededor del mundo”.

• Fernández defiende a Randazzo

En una transmisión nacional del 11 de febrero, la Presidenta Cristina Fernández urgió a los candidatos para las elecciones presidenciales del 2015 que hagan públicas sus declaraciones de bienes mostrando el incremento en riqueza y activos durante los últimos 15 años. El propósito de esta transmisión fue defender a Florencio Randazzo, el ministro del interior & transporte, y posible candidato presidencial, quien vio los detalles de sus activos, publicados por la American Task Force Argentina (ATFA), un grupo de que representa a los tenedores de bonos  ‘holdout’ de Argentina.

ARGENTINA | Union protests. Argentina’s main trade union movement, Confederación General de Trabajadores (CGT), has called for a mobilisation against the government led by President Mauricio Macri on 7 March, and a general strike before the end of next month. The CGT accuses the business and industrial sector of failing to honour an agreement brokered by the labour ministry last November to avoid any lay-offs until this March. It blamed the government for failing to take the business and industrial sector to task.

The Macri administration has managed to avert a general strike in the 14 months since coming to power and will be acutely conscious of the damage that protests in March could do to the prospects of the ruling centre-right Cambiemos coalition just six months out from pivotal mid-term legislative elections. There is a lot at stake for Macri in these elections as he is determined to try and secure a majority in the federal congress, or at least reduce the power of the Frente para la Victoria (FPV, Kirchneristas) faction of the main opposition Partido Justicialista (PJ, Peronists), in order to advance his legislative agenda.

CHILE | Downbeat growth projections. Consensus GDP growth projections by local economists for this year were down to 1.9% from 2% previously, according to the January instalment of the monthly survey of economic expectations released by the Chilean central bank (BCCh) on 10 February. The downwards revision came as the economists surveyed by the BCCh calculated that economic activity in January had increased by a paltry 1.3%, just one percentage point higher than in December 2016. Based on this calculation, the consensus growth forecast for the first quarter of 2017 is now just 1.1%, three percentage points lower than in December 2016.

The factors behind this underwhelming level of economic activity in Chile were exposed by the latest report by the international trade relations general directorate (Direcon), released on 9 February, which showed that while the value of the country’s agricultural and fishing exports increased by 11% in 2016 (to reach a record figure of US$5.8bn), the value of copper exports once again fell (by 14%), resulting in the overall level of exports of US$59.9bn, 3.7% lower than in 2015. On the bright side, the January BCCh survey found that the consensus now is for 2017 inflation to fall to 2.9%, well within the BCCh’s target range of 2%-4%.

URUGUAY | Unemployment creeps up. On 8 February Uruguay’s national statistics institute (INE) reported that the national unemployment rate in the country in December 2016 remained at 7.7%. This result was identical to the result registered the previous month but slightly higher than the 7.4% registered in December 2015. The result has fanned concerns about the loss of jobs in Uruguay amid the current domestic economic slowdown given that the 2016 year-end figure was the highest unemployment rate since 2008.

Nevertheless, the figure was welcomed by the national director of employment, Eduardo Pereyra, who said that at the start of the year the employment prospects seemed bleak but that the year ended “showing more stability”. The 2016 unemployment rate, however, means that there was a net loss of 16,000 jobs in Uruguay last year.

• Uruguay’s gender unemployment gap

The latest unemployment report released by Uruguay’s national statistics institute (INE) shows that there is still is a considerable difference in the level of male and female unemployment. The report shows that, at 6.5%, the level of male unemployment is significantly lower than the female unemployment rate, which stands at 9.2%.

*** DECLINE IN US VISAS FOR GUYANESE. At a time when Guyana is hoping to maximise opportunities for development on the back of massive oil discoveries, interaction with the US appears to be suffering a setback through the restriction of visas to Guyanese. In 2016, just over 51,200 ‘B’ class visitor visas to the US were granted to Guyanese nationals. In 2017, the figure fell to just over 25,300. In the 12 months ending 30 September 2018, the total was 4,923. This is the lowest number of ‘non-immigrant’ visas since 2010.

*** IMF FORECASTS FALLING GROWTH FOR THE BAHAMAS. The latest forecasts from the International Monetary Fund (IMF) for The Bahamas indicate that the bounce experienced by the opening of the Baha Mar megaresort is beginning to wear off. The IMF estimates GDP growth of 2.3% in 2018 and is forecasting growth of 2.1% for 2019, falling to 1.6% in 2020 and then remaining at more or less that level for the first half of the decade. An official IMF staff mission visited The Bahamas from 1-12 April.

Unemployment has improved significantly since 2014, falling from 14.6% to 9.2% in 2018. However, further improvement will require higher growth rates than currently forecast.

*** FURTHER CONTRACTION FORECAST FOR BARBADOS. The IMF is forecasting a GDP contraction of 0.1% for 2019, with marginal growth of 0.6% likely in 2020. In 2018, Barbados was forced into a US$290m Extended Fund Facility with the IMF due to its very high debt level of 160% of GDP.

According to the IMF’s director for the Western Hemisphere, Alejandro Werner, there has been good progress. On 17 April he was quoted by Barbados Today as saying: “The bulk of public debt, which is the domestic part, has already been restructured, and negotiations with external creditors are underway. With this in process, fiscal consolidation is underway as well, and deep structural reforms also being undertaken, the economy is on a sounder footing.”

One big negative for 2019 has been the surge in murders, something that can only have an adverse impact on the tourism industry. Barbados averages around 27 murders annually, but this year there were 20 murders recorded in the first three months alone.

*** CARICOM OPPOSITION TO OAS POSITION ON VENEZUELA. A total of eight Caribbean Community (Caricom) countries have written to the Organisation of American States (OAS) protesting against the decision of the OAS Council to accept as Venezuela’s representative to the organisation the nominee of Juan Guaidó, the rival president to Nicolás Maduro. The eight countries are: Antigua & Barbuda, Barbados, Belize, Dominica, St Kitts & Nevis, St Vincent & the Grenadines, Suriname, and Trinidad & Tobago.

*** OECS PRESS FREEDOM UNDER SPOTLIGHT. The countries of the Organisation of Eastern Caribbean States (OECS) have received a wake-up call in the latest World Press Freedom Index, produced by Reporters Without Borders (RSF). The OECS has dropped from 35 out of 180 countries in 2018 to 50 in 2019. It is not clear what has changed in a year, but the general criticism is straightforward. The RSF says that the profession is under-valued (with little training) and that “many media outlets are under the direct influence of politicians, especially during elections, because officials can withdraw state advertising at any time and deprive them of income they depend on.” The report also notes that “the authorities are monitoring social networks more and more closely”. In some islands, political parties actually own or have a share in media companies.

Under the government of President Jair Bolsonaro, it has been assumed that there is an irreconcilable tension between Brazil’s economic development and job creation on the one hand, and the need for environmental protection on the other. Yet a growing number of business lobbies and research groups are claiming that a ‘green’ economic recovery could actually create more jobs than a fossil fuel-based one.

A joint study by the Inter-American Development bank (IDB) and the International Labour Organization (ILO) published at the end of July suggests that if Brazil and the rest of Latin America were to begin moving to a zero-carbon economy by 2050 there will be a net increase, not a fall in employment. For the region as a whole, running up to 2030 some 7.5m jobs would be lost in fossil fuel electricity, fossil fuel extraction, and animal-based food production. But a much larger number of new jobs – 22.5m – would be created in agriculture and plant-based food production, renewable electricity, forestry, construction, and manufacturing. There could therefore be a net gain of 15m jobs across Latin America and the Caribbean by 2030. As the region’s largest economy, Brazil could account for nearly half of those new jobs – 7.1m, followed by Mexico with 2.1m. The report also claims that a move to healthier diets, reducing meat and dairy consumption while increasing plant-based foods, would create jobs and reduce existing pressure on the region’s biodiversity.

If the report is right, it questions key assumptions of the Bolsonaro government and its supporters, who have argued that the Amazon and Cerrado ecological regions must be opened up to farming, cattle ranching, and carbon-intensive extractive industries to create jobs. Vinicius Pinheiro, ILO regional director for Latin America and the Caribbean, says “The trade-off between jobs, sustainable growth, and environmental sustainability is a myth. The truth is that it is possible to create jobs and combat climate change at the same time”. The report does, however, acknowledge that there will be big obstacles to a green job led recovery, including the need to retrain and redeploy workers in the livestock sector and to develop appropriate technologies.

Increasingly, the case for a green recovery is being heard with interest by Brazilian business. On 6 July leaders of over 50 Brazilian and international companies, including industrial, agribusiness and financial business associations, issued a joint letter to Vice President Hamilton Mourão (who is also head of Brazil’s national Amazon council) calling for action to halt illegal deforestation, fires, mining, and aggressive acts against indigenous people. The statement may have in part been motivated by a desire to head off a consumer boycott of Brazilian goods, but the signatories also made a positive case for the benefits of developing a bioeconomy. Paulo Hartung, president of Brazil’s tree industry association (Ibá), has highlighted the potential for pharmaceuticals and cosmetics derived from açaí berries, Brazil nuts and rubber. Hartung argues that such products will help raise agricultural outputs without increasing land use.

A group of 17 former Brazilian finance ministers and central bank presidents also issued a joint statement in July urging that the government should adopt four green economy proposals to help Brazil prepare for a post coronavirus (Covid-19) pandemic era. These were: first, public and private investments in a low carbon economy; second, a commitment to a zero-deforestation target in the Amazon and the Cerrado; third, measures to increase climate resilience; and fourth, an increase of investment in research and development of new technologies. Former central bank president, Arminio Fraga (1999-2003), said Brazil needs to create new climate change incentives. “If incentives are designed to avoid the use of fossil fuels, and to stimulate new research and technologies, we will have a leap in quality results, not only in foreign investment but also in domestic investment, which is now paralysed”, Fraga said. 

Anglo-American wind deal

United Kingdom-based mining company Anglo-American said in late June that it has signed a 20-year power purchase agreement (PPA) to take 95MW of renewable electricity from a wind farm being built in the northeast of Brazil by Casa dos Ventos. The agreement, billed as the largest private sector renewable PPA in Brazil, will cover around 30% of all Anglo-American’s electricity needs at its different mining installations around the country. The value of the transaction was not revealed. Casa dos Ventos is building an eight-turbine, US$460m, wind farm with 504MW capacity in the state of Rio Grande do Norte. The wind farm will also provide power for other private sector consumers, including Tivit (a digital technology company) and Vulcabras Azaleia (footwear).

Violent clashes between rival factions of Bolivia’s La Paz-based coca growers’ union, the Asociación Departamental de Productores de Coca de los Yungas de La Paz (Adepcoca), have now entered their second week. Far more than an internecine power struggle, the dispute reflects the country’s polarised national politics, with the left-wing Movimiento al Socialismo (MAS) government wading into the fray.

The dispute stems from a chaotic Adepcoca congress to elect a new union president on 20 September, which descended into a brawl and saw three candidates declare themselves leader: the pro-government Arnold Alanes, Fernando Calle (also pro-MAS), and Armin Lluta, who accuses the government of seeking to expand its control over the coca trade.

Since that shambolic election, President Luis Arce’s government has come down in favour of Alanes, who on 21 September took control of Adepcoca’s headquarters with the help of the police, who remain stationed around the building. This has fuelled the anger of Lluta’s supporters, who have since engaged in daily clashes with the police. On 24 September the situation escalated further, with the torching of a police station near the Adepcoca building.

If the rival factions can agree on anything, it is that the government is seeking to extend its influence over Bolivia’s coca growers – a traditional bastion of MAS support. Even Alanes, who has benefitted from the government’s support, has recognised this, stating on 28 September that he “will not allow any interference” from the Arce administration, and that he is seeking to “depoliticise” Adepcoca.

Vice President David Choquehuanca is attempting to resolve the dispute, mediating between the rival factions at a meeting on 25 September. But Lluta’s faction says it will be willing to attend future talks only when it is granted control of the union’s headquarters. With no end in sight, a fourth faction has emerged – the Comité de Autodefensa, led by Yuber Arce, which is calling for new elections to resolve the crisis.

HONDURAS | Remittances surge. On 15 August Honduras’s central bank (BCH) released new figures which show that remittances sent to Honduras in the first seven months of 2022 totalled US$4.91bn, up 19.6% on the same period in 2021. According to the same BCH figures, remittances totalled US$7.4bn in 2021, representing 26.1% of the country’s GDP. The BCH report highlights that, as of July 2022, Honduras was the Central American country to have received the second highest amount of remittances this year after Guatemala, which received US$10.34bn (up 24.3% on the same period in 2021), while El Salvador received US$4.45bn (up 3.8%).

DOMINICAN REPUBLIC | BCRD hails growth. At the end of August, the Dominican Republic’s central bank (BCRD) published new figures which show that the monthly index of economic activity (IMAE) averaged 5.5% in the January-July 2022 period compared with the same period in 2021. The same figures show a year-on-year increase of 4.7% in July. The BCRD’s report highlights that growth was driven by services, which averaged a 7.6% increase in economic activity in the first seven months of the year, followed by manufacturing in free zones (7.2%), local manufacturing (4.3%), and agriculture (2.9%). The latest (23 August) forecast from the United Nations Economic Commission for Latin America and the Caribbean (Eclac) expects the Dominican Republic’s GDP to grow 5.3% in 2022, second only to Panama (7.0%) in Central America, and well above the 2.7% average forecast for Latin America & the Caribbean. As regards the rest of Central America, Eclac is forecasting 3.3% GDP growth for Costa Rica, 2.5% for El Salvador, 4.0% for Guatemala, 3.8% for Honduras, and 3.0% for Nicaragua.

Central America & Caribbean: inflation rate
Percentage variation (year-on-year)

Central America & Caribbean: GDP growth (%)
Quarterly figures are year-on-year growth

El 10 de octubre, 46 prominentes escritores y políticos en México suscribieron un anuncio en la prensa mexicana apoyando un llamado para una coalición gubernamental. Esta fue la primera movida significativa en la campaña electoral presidencial, que oficialmente se lanza el 18 de diciembre y culminará en las elecciones el 1 de julio de 2012. Hasta ahora no hay candidatos oficiales, solamente candidatos eventuales para las nominaciones de sus partidos. Las encuestas de opinión, sin embargo, apuntan todas a una fácil victoria para Enrique Peña Nieto, el ex gobernador del Estado de México y probable candidato por el Partido Revolucionario Institucional (PRI).

Una encuesta realizada por el Gabinete de Comunicación Estratégica (GCE) halló que 63% de los mexicanos piensan que el Partido Acción Nacional (PAN), que ganó la presidencia en el año 2000 y de nuevo en 2006, no continuaría en el poder. Un asombroso 66% piensa que el PRI, que gobernó el país desde el final de la Revolución Mexicana (más exactamente desde 1930) hasta 2000, retornará al poder.

Los encuestadores del GCE entrevistaron a 3.000 personas a lo largo del país desde el 19 al 15 de setiembre, y hallaron una extendida decepción con el PAN. El PAN tiene tres candidatos declarados que competirán por la nominación presidencial en 2012. Ello son: Ernesto Cordero, un ex ministro de finanzas y se presume que es la opción del Presidente Felipe Calderón; Josefina Vázquez Mota, una ex ministra de educación bajo Calderón y ministra de Bienestar social bajo el ex presidente Vicente Fox (2000-2006); y Santiago Creel, ministro del interior bajo Fox a quien Calderón derrotó por la nominación del PAN en 2005.

Creel avaló el llamado a una coalición, como lo hizo Marcelo Ebrard, el alcalde saliente de Ciudad México, e importante candidato de la Izquierda. Ebrard dijo que una coalición era la única manera de evitar que el PRI recobre la presidencia. La sugerencia de una coalición es aún más fascinante porque fue originalmente planteada por Manlio Fabio Beltrones, el líder del PRI en el senado, y el único rival de Peña Nieto para la nominación del PRI. Beltrones ahora se ha distanciado de la idea de una coalición, y sorprendió a muchos de sus seguidores abrazando públicamente a Peña Nieto en un acto político del PRI el 8 de octubre.

El abrazo de Beltrones a Peña Nieto provocó gritos de “¡Unidad! ¡Unidad!” de los priístas reunidos. Beltrones parecía estar actuando espontáneamente, pero los escépticos afirman que fue una escena preparada por Emilio Gamboa Patrón, un operador político clave que fue una vez secretario privado del ex presidente Carlos Salinas de Gortari (1988-1994). Salinas es uno de los que apoyan a Peña Nieto.

La lista de firmantes del llamado a una coalición para gobernar a México más allá de 2012 va más allá de los políticos: está encabezada por Carlos Fuentes, un prominente escritor. Además de Ebrard, Cuauhtémoc Cárdenas, tres veces candidato presidencial por la Izquierda (quien  probablemente fue despojado de la victoria en 1988) y su hijo, Lázaro (igual que Cuauhtémoc  un ex gobernador de Michoacán) también firmó. El principal representante de la Derecha fue Creel. El centro estuvo representado por Juan Ramón de la Fuente, un ex rector de la Universidad Nacional Autónoma de México (UNAM).

Ebrard fue más expresivo acerca de la amenaza planteada por un gobierno del PRI, y dijo que el retorno del PRI a la presidencia sería un “completo desastre”. El dijo que una coalición era la única alternativa. Esta declaración inmediatamente provocó las críticas de los partidarios del otro contendiente de la Izquierda para la presidencia, Andrés Manuel López Obrador, quien fue vencido por muy estrecho margen por Calderón en 2006. Dolores Padierna una prominente partidaria de López Obrador, afirmó que una coalición era una idea para perpetuar las políticas económicas neoliberales.

Ebrard entonces hizo otra interesante movida el 12 de octubre (ver más abajo) que parecía poner fin a su contienda con la Iglesia Católica Romana.

La idea original de una coalición de Beltrones postulaba que si el presidente electo en 2012 no ganaba una mayoría de votos, o no podía obtener una mayoría en el congreso, entonces el mismo congreso debía elaborar el programa del gobierno. Ningún presidente mexicano ha tenido una mayoría en el congreso desde que el Presidente Ernesto Zedillo Ponce de León (1994-2000) perdió su mayoría en las elecciones de mitad de periodo en 1997.

Actualmente, los candidatos eventuales no están atados por la ley electoral. Sin embargo, desde el 18 de diciembre, ellos deberán adquirir sus spots publicitarios y espacios a través del Instituto Federal Electoral (IFE). La otra restricción que regirá desde el 18 de diciembre es la prohibición de hacer falsos alegatos acerca de un rival.

La única cosa que los candidatos potenciales no pueden hacer en este momento, pero que lo podrán hacer desde el 18 de diciembre, es pedir a la gente que voten por ellos. Actualmente ellos tienen que apelar a sus ideas o registros.

• Aborto

Armando Ahued, el más alto funcionario de salud de Ciudad México, dijo que desde 2007 hasta el 11 de octubre, 105.000 habían solicitado un aborto en Ciudad México y que 63.718 terminaciones habían sido realizadas por los servicios médicos de la ciudad. El señaló que Ciudad México provee servicios prenatales para todas las madres expectantes y solamente ayudaron con la adopción si la madre decide no criar el hijo. Ahuel calcula que el sector privado había realizado alrededor de 50.000 abortos desde 2007. De los abortos realizados por el sector público desden 2007, 5% fueron para menores; 53% fueron para mujeres entre 18 y 25 años; 20% para mujeres entre 26 y 30; y 22% para mujeres de más de 30 años.

• Lugar santo

El 12 de octubre el Presidente Felipe Calderón; Marcelo Ebrard, el alcalde de Ciudad México; Carlos Slim Helú , el hombre más rico de México (y quizá del mundo); y el Cardenal Norberto Rivera se reunieron para comenzar un proyecto de M$600m (US$42m)en el principal lugar santo religioso de Guadalupe en Ciudad México. Políticamente, la reunión fue importante debido a que el cardenal agradeció públicamente al gobierno de la ciudad por proveer la tierra para la Plaza Mariana que será pagada por Slim. Previamente, el cardenal y Ebrard habían tenido tensas relaciones, particularmente sobre la liberalización del aborto en Ciudad México.