LatinNews Daily - 05 August 2020 |
Main Briefing |
PERU: Confidence vote loss risks constitutional crisis |
On 4 August, Peru’s national congress denied a vote of confidence in President Martín Vizcarra’s new cabinet, forcing the resignation of all 19 ministers, including prime minister Pedro Cateriano. Analysis: Cateriano lasted just 20 days in the job, following a major cabinet reshuffle on 15 July at the strat of Vizcarra’s final year in office. The deepening divisions between congress and the Vizcarra executive have brought Peruvian politics to a stalemate, which now threatens to become a full-scale constitutional crisis. A vote of confidence in the previous cabinet on 28 May was narrowly approved, based on Vizcarra’s public support and legislators’ fears that the president might dissolve congress for the second time in under a year. But with popular approval fading in light of the country’s worsening health and economic emergencies, and the constitution preventing the dissolution of congress in the final year of a presidential term, the balance of power has now shifted. With Peru in urgent need of a functioning government, Vizcarra will now face significant pressure to cede to congress’s demands.
Looking Ahead: Vizcarra has just 72 hours to name a new cabinet, although all ministers except Cateriano are allowed to be reselected. However, with congress now protected from dissolution, some level of compromise is needed to break this deadlock, and to avoid adding a constitutional crisis to the ongoing health and economic emergencies. |
Andean |
In brief: Colombia prepares investment programme to boost employment |
* Colombia’s President Iván Duque has announced a US$30bn investment programme called ‘Commitment to Colombia’, intended to generate 1m jobs over the next two years to replace those lost as a result of the coronavirus (Covid-19) pandemic. Duque outlined plans to invest in a range of public and private sector projects, including port and airport development, industry and mining projects, 17 digital transformation projects, 22 creative and cultural industries projects, and 25 renewable energy projects. The president emphasised that investment plans would be complemented by similarly generous social protection measures for the most vulnerable, such as the expansion of the ‘solidarity income’ subsidy programme. |
Brazil |
BRAZIL: Gov’t asked to explain internal intelligence gathering |
On 4 August, a magistrate in Brazil’s supreme court (STF), Cármen Lúcia Antunes Rocha, gave the justice ministry 48 hours to explain the supposed existence of a file containing information on public security officials who are politically opposed to the government. Analysis: The existence of such a file was revealed in a report by news site UOL, published on 24 July. According to UOL’s report, the Secretaria de Operações Integradas (Seopi) in the federal justice & public security ministry has compiled information on almost 600 officials in the federal and state police forces who are identified as members of the anti-fascist movement (which opposes President Jair Bolsonaro and his supporters’ anti-democratic demands). Justice Minister André Mendonça has for the moment evaded giving clarifications about the Seopi’s work and this alleged file, prompting the STF to intervene amid concerns that the information gathered could be used for political persecution.
Looking Ahead: Mendonça cancelled an appearance before congress planned for yesterday, but is now due to appear remotely before the joint congressional committee of control over the intelligence services’ activities on 7 August, to give explanations on this file and the Seopi’s work. |
In brief: Industrial production continues to pick up in Brazil |
* Brazil’s national statistics institute (Ibge) has released the latest figures for industrial production, which has recorded a positive result for the second month running. Industrial production grew by 8.9% month-on-month in June, with an improvement in 24 of the 26 categories surveyed, and a notable 70% monthly increase in vehicle production. However, this remains insufficient to reverse the deep 26.6% drop in activity recorded in March and April, a direct consequence of the coronavirus (Covid-19) pandemic and measures taken to contain it: industrial production has accumulated losses of 10.9% in the first six months of 2020, and seen -5.6% variation in the 12 months to June 2020. Year-on-year production in June fell by 9%. |
Central America & Caribbean |
SURINAME: Santokhi denounces eye-watering debt |
On 4 August Suriname’s President Chandrikapersad Santokhi said that the country has accumulated debts in excess of US$3bn. Analysis: Santokhi took office on 13 July after Desi Bouterse relinquished power nearly a month early, his10-year tenure marked by allegations of cronyism and corruption on a grand scale, bequeathing his successor a legacy of debt compounded by the coronavirus (Covid-19) pandemic.
Looking Ahead: Santokhi will need to preserve unity within a disparate political coalition to push through unpopular reforms to restore Suriname’s economic stability. His Vooruitstrevende Hervormingspartij (VHP) secured 20 of the 51 seats in the national assembly, necessitating the formation of a governing alliance with the Maroon nationalist Algemene Bevrijdings-en Ontwikkelingspartij (Abop), the centre-left Nationale Partij Suriname (NPS), and the Javanese Pertjajah Luhur (PL), to reach 33 seats. |
In brief: Honduras’s coffee earnings drop |
* The Instituto Hondureño del Café (Ihcafe), the body in charge of promoting Honduran coffee, says that the value of the country’s coffee exports totalled US$856.6m from October 2019 to July 2020, 3.3% less than the US$886m sold during the comparable period last year. Ihcafe attributed the fall to an unfavourable climate which reduced production. It added that so far in the current harvest, the price of a quintal of coffee (100kg) averaged US$125.4, while in the 2018-2019 harvest the price was US$107.09. Honduras, Central America’s largest coffee producer, expects to export 8.5m quintals of coffee in the 2019-2020 harvest, earning US$900m. In the 2018-2019 harvest, Honduras collected US$950m from 8.9 quintals of coffee, making up 5% of the country’s GDP. |
Mexico |
MEXICO: López Obrador pressures energy regulators |
On 4 August a memo sent by Mexico’s President Andrés Manuel López Obrador to officials in the country’s energy sector regulatory bodies, asking them to “adjust” to his government’s energy policy, became public. Analysis: The emergence of the memo has heightened concerns over López Obrador’s apparent intention to in effect revert Mexico’s 2012-2013 energy sector reform. The reform opened Mexico’s energy sector to increased private participation in a bid to attract more investment to revive a flagging industry. López Obrador is a staunch critic of the reform, which he says is not in the national interest and has been adamant that his administration’s objective is to strengthen the state-owned energy firms and protect them from private competition. The worry is that the systematic attempts to undermine the reform will discourage private investment not just in the energy sector but in Mexico in general.
Looking Ahead: In the memo López Obrador does say that regulators must act within the existing legal framework, but he does not rule out promoting new “constitutional reforms” to achieve his government’s energy policy objectives if necessary. |
In brief: Mexico’s hydrocarbon reserves in decline |
* Mexico’s national hydrocarbons commission (CNH) has reported that as of 1 January 2020, Mexico’s ‘3P’ (proven, probable, and possible) crude oil reserves had fallen by 6.9% (a decline of 1.32bn barrels) compared with the previous year, while natural gas reserves fell by 8.2% (down 2.66trn cubic feet). As well as extraction, CNH commissioner Sergio Pimentel attributed this decline to a reduction in exploratory activities. Pimentel noted that there are areas owned or leased by state-owned oil firm Pemex that are yet to be explored, which could lead to further discoveries; he emphasised the importance of increased exploration, stating that “we are in a desirable scenario of energy transition, and the wealth that we fail to take advantage of in the coming years will become useless”. |
Southern Cone |
CHILE: UN calls for dialogue following intensification of Mapuche conflict |
On 4 July Jan Jarab, the South American representative of the Office of the United Nations High Commissioner for Human Rights (OHCHR), called for dialogue following the violent escalation of tensions between the Chilean authorities and the Mapuche indigenous people. Analysis: Jarab’s comments, which came after government buildings were set alight in La Araucanía Region last week, warned against a repressive response to the arson attacks, and called on President Sebastián Piñera’s government to instead address the root causes of the conflict. United Nations (UN) scrutiny of the government’s response will increase pressure on the Piñera administration to seek peaceful solutions to the long-running Mapuche conflict, as well as to investigate and crack down on allegations of excessive use of force by the Carabineros militarised police.
Looking Ahead: Following a meeting with deputy justice minister Sebastián Valenzuela yesterday, Mapuche leader Rodrigo Curipan said that “we’re a long way from finding a solution”, but that he was hopeful that this would be the first of many such discussions. |
In brief: IMF applauds Argentina debt deal |
* The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has praised the “agreement in principle” that Argentina has struck with bondholders for the restructuring of some US$66bn of sovereign debt issued under international law. In a tweet, Georgieva congratulated President Alberto Fernández and his economy minister Martín Guzmán on taking a “very significant step” to resolve Argentina’s debt problems, after the conclusion of a high-stakes negotiation that had been ongoing since Fernández took office in December 2019. The deal reduces Argentina’s debt burden by some US$42.5bn over the next five years, according to Guzmán. The government expects to formally conclude the agreement before a 24 August deadline. In a press conference following the accord, Guzmán announced that the next step is for Argentina to restructure the outstanding US$44bn debt it has with the IMF, which was contracted in 2018 under the government led by former president Mauricio Macri (2015-2019). |