LatinNews Daily - 05 July 2018 |
Main Briefing |
Venezuela’s Maduro exhorts military to defend country |
Development: On 4 July, an Associated Press report citing anonymous sources claimed that on several occasions last year US President Donald Trump met then-Secretary of State Rex Tillerson and National Security Advisor H.R. McMaster to discuss the possibility of a military intervention in Venezuela. Significance: Although President Trump has openly stated – in August 2017, for example – that he would be willing to use military force to resolve the situation in Venezuela, the report of this meeting is the first suggestion that there have been real intentions behind the rhetoric. The report claims that McMaster eventually succeeded in persuading Trump that invasion would be a dangerous approach.
Looking Ahead: Although the reports are only emerging now, these conversations took place several months ago – indeed, Tillerson and McMaster are no longer involved in the Trump administration. What it offers most of all, then, is a rhetorical boost for President Maduro, something that will no doubt be very welcome as he seeks to shore up his draining support. |
Andean |
In brief: Peru |
Peru: Peru’s trade & tourism ministry (Mincetur) has released new figures which show that Peru’s non-traditional exports have grown consecutively over 22 months. Over the first five months of 2018, exports of non-traditional goods amounted to US$5.277bn, up 19.1% compared with the same period of 2017. Among these products, the best performing exports included grapes, avocados, and squid. As regards traditional exports, the ministry announced that during the first five months of 2018 these exports totalled US$14.202bn, up 17.3% compared with the same period in 2017. This growth owed much to an increase in oil, natural gas, and mining exports. In total, all exports between January and May 2018 amounted to US$19.479bn, up 17.7% compared with the first five months of 2017. |
Brazil |
Protest votes lead in latest Brazil poll |
Development: On 4 July Poder360, a local news site, published its latest opinion poll showing that up to 42% of Brazilians plan to abstain or annul their ballot in October’s presidential elections. Significance: The finding highlights again the disillusionment many Brazilians feel over their options. Although voting is obligatory in Brazil, there is only a very small fine for failing to vote which the electoral authorities often struggle to collect. The danger with a low turn-out is that it may undermine the legitimacy of the next administration. Opposition to the manner of President Michel Temer’s rise to power following the impeachment of Dilma Rousseff (2011-2016) has seriously weakened his government, and his administration looks set to achieve very little in his final year of power.
Looking Ahead: Politics is likely to start rising up the agenda again as the World Cup comes to an end in ten days’ time. Campaigning proper begins on 16 August. The unsettled scenario at present shows that the electoral landscape still has the potential to change significantly before the vote. Around half of Brazilians say they won’t change their vote ahead of polling day. |
In brief: Brazil |
* Brazil’s state oil company Petrobras has signed a letter of intent with China National Petroleum Corporation (CNPC) to conclude construction of the Complexo Petroquímico do Rio de Janeiro (Comperj) petrochemical and refinery project. Petrobras had already spent some US$14bn on the Comperj before it was suspended in 2015 in the midst of the ‘Operation Car Wash’ corruption investigation. “The strategic association will strengthen ties between the companies and contribute to deepening the global strategic association between Brazil and China, both members of the BRICS,” a Petrobras statement read. |
Central America & Caribbean |
Pressure mounts on Nicaragua’s Ortega to 'deactivate' paramilitaries |
Development: On 4 July Humberto Ortega, President Daniel Ortega’s brother, called on Ortega to bring forward elections and disband paramilitary groups which have emerged since the crisis erupted in Nicaragua mid-April sparked by State repression of anti-government protesters. Significance: A former head of the army (1979-1995) who has been increasingly critical of President Ortega in recent years, Humberto Ortega addressed his call to those involved in the Catholic Church-brokered national dialogue process (currently at a standstill) between the opposition Alianza Cívica por la Justicia y la Democracia (comprising students, civil-society groups, and the private sector) – which is also calling for the elections to be brought forward from 2021 to 2019 – and the Frente Sandinista de Liberación Nacional (FSLN) government. His call comes as President Ortega is under mounting pressure to disband the paramilitary groups (which along with the police, PNN, have been responsible for the violence) while the military (which has so far refrained from getting involved) is also facing public pressure to intervene.
Looking Ahead: That the threat of violence fails to deter those calling for Ortega to stand down was most recently suggested by the fact that yesterday (4 July) thousands of Nicaraguans formed a human chain in Managua to demand his departure – an event organised by the Alianza Cívica. |
In brief: Honduras |
Honduras: Honduras’s central bank (BCH) has released figures which show that inflation in June was 4.15% year-on-year. This compares with 3.65% the previous year. Accumulated inflation for the first half of 2018 was 2.03%, less than that observed in the same periods in 2016 and 2017 respectively (2.27% and 2.60%). |
Mexico |
Mexico’s López Obrador and big business forge alliance |
Development: On 4 July the victor in Mexico’s presidential elections, Andrés Manuel López Obrador, held a meeting with Juan Pablo Castañón, the president of one of the country’s main umbrella business associations, Consejo Coordinador Empresarial (CCE), to discuss future cooperation. Significance: The CCE arguably provided more effective opposition to López Obrador during the electoral campaign than either of his principal presidential rivals. But that has now been consigned to the past. López Obrador was full of praise for Castañón who, in turn, embraced one of the incoming president’s flagship proposals: youth apprenticeships.
Looking Ahead: López Obrador said he would hold future meetings with the business sector to deepen cooperation. This should instil market confidence. His conciliatory rhetoric saw the peso strengthen against the US dollar yesterday and the Mexican stock exchange (Mexbol) rallied. |
In brief: Mexico |
* Mexico’s virtual president-elect Andrés Manuel López Obrador has announced a M$40bn (US$2.04bn) package to provide a universal pension for elderly Mexicans and to create a universal pension. López Obrador insisted that the funds for the universal pension would be found without the need to raise taxes or issue public debt. Instead, he said that his proposed ‘Republican austerity’, cutting wasteful government expenditure, as well as combating official corruption, would provide his government with the requisite funds. |
Southern Cone |
Chile judge issues contentious decision on emblematic corruption case |
Development: On 4 July a Santiago guarantees judge announced that Carlos Alberto Délano and Carlos Eugenio Lavín, the founders of Penta, a Chilean financial group, as well as Pablo Wagner, a deputy mining minister (2010-2012), would face an abbreviated trial procedure in relation to the illegal campaign finance case involving Penta. Significance: In a decision likely to enrage anti-corruption activists, Justice Daniel Aravena ruled that the two Penta founders would be sentenced for tax offenses rather than the initial charges of bribery and money laundering while, Wagner would be sentenced for the additional charge of illicit enrichment. The case known as ‘Pentagate’ broke in October 2014 and had, along with other illegal campaign finance scandals such as that involving mining company Sociedad Química y Minera SA (SQM), proven highly damaging for both the centre-right Chile Vamos coalition which is now in government led by President Sebastián Piñera as well as the former leftist Nueva Mayoría coalition government led by Michelle Bachelet (2006-2010; 2014-2018).
Looking Ahead: Aravena is due to announce sentences for the three men on 9 July. |
In brief: Uruguay |
Uruguay: Uruguay’s national institute of statistics (INE) has released its latest inflation figures for June 2018 which show that inflation was 0.99% compared with the previous month, bringing the year-on-year rate to 8.11%. |