LatinNews Daily - 02 June 2021 |
Main Briefing |
HAITI: Pressure grows on Moïse over contentious referendum |
On 1 June Haiti’s Episcopal Conference (CEH) issued a statement warning that now is "not the moment” to hold a referendum on a new constitution which is scheduled for 27 June. Analysis: The CEH statement adds to mounting pressure on President Jovenel Moïse to suspend plans to hold the referendum ahead of the general election, the first round of which is scheduled for 19 September. As well as being deeply contentious and sparking repeated protests by the political opposition, which already maintains that Moïse’s presidential term ended in February, the proposed referendum has lost the support of the international community, leaving Moïse looking increasingly isolated. Further upping the pressure on Moïse to abandon the proposal is the current health emergency stemming from the coronavirus (Covid-19) pandemic: the government yesterday was forced to announce an extension to a state of emergency announced last month in response to a surge in cases.
Looking Ahead: While the international community has come out against the referendum, it continues to push for a general election as a way out of the political crisis. On 26 May the OAS announced it would deploy a five-member mission to Haiti “no later than mid June” to facilitate a dialogue that would lead to “free and fair elections”. However, Moïse has previously conditioned the elections on the referendum taking place, casting further doubt on the future of the electoral process. |
Andean |
PERU: Anti-Fujimori protests as divisive election nears conclusion |
On 1 June, thousands of Peruvians marched in opposition to Keiko Fujimori, the right-wing Fuerza Popular candidate, who will face off against Pedro Castillo of the far-left Perú Libre party in the presidential election run-off vote on 6 June. Analysis: With many supporters of Castillo and Fujimori entrenched in vehement opposition to the opposing candidate, there is a serious risk of post-election instability. Peru is facing an election between two candidates who portray their rivals as authoritarians in the making, and the consistently vicious rhetoric from both campaigns is creating deep divisions in Peruvian society that will not be easily bridged after the election.
Looking Ahead: The most recent voting intention polls indicate that the election could go either way. A survey published by Ipsos on 30 May gave Castillo 45.1% of the predicted vote compared to Fujimori’s 43.1% - a technical draw, with Castillo’s lead falling within the +/-2.52 percentage point margin of error. |
In brief: Ecuador’s central bank hopeful on recovery |
* Ecuador’s central bank (BCE) has released its latest GDP growth forecast which expects the country’s economy to grow by 2.8% in 2021. This follows an historic 7.8% contraction last year, as a result of the coronavirus (Covid-19) pandemic-induced double-hit to the economy due to both the slide in the global price of oil, as well as the paralysis of many economic activities during the national and regional quarantines. |
Brazil |
BRAZIL: Plans to host Copa América go ahead despite criticism |
On 1 June, a judge on Brazil’s supreme court (STF), Ricardo Lewandowski, asked the federal government led by President Jair Bolsonaro to provide explanations for its plans to host the Copa América regional football tournament in the midst of the coronavirus (Covid-19) pandemic. Analysis: Lewandowski’s order came a few hours before the Bolsonaro government confirmed that Brazil would indeed be hosting the football championship, despite severe misgivings that this could precipitate the onset of a third wave of Covid-19 infections in the pandemic-stricken country and represent a risk to visiting football teams. With criticisms as to the public health implications of welcoming the Copa América games and little economic incentives given the matches will be played to empty stadiums, it is unclear what the Bolsonaro government stands to gain from its decision.
Looking Ahead: The assurance that sanitary protocols will be put in place to minimise the public health risk of hosting an international championship may dispel some of the concerns regarding the Brazil-based Copa América; but should Lewandowski find these protocols and the government’s explanations to be lacking, he could rule that the Brazilian government cannot host the championship. |
In brief: Brazil’s Q1 GDP surprises positively |
* Brazil’s national statistics institute (Ibge) has released the latest GDP figures, which show that the Brazilian economy grew 1.2% in the first quarter of this year, compared with Q4 2020. In year-on-year terms, Q1 GDP grew 1%. With this result, which exceeded economists’ expectations, Brazil’s GDP has returned to the levels of Q4 2019, prior to the coronavirus (Covid-19) pandemic which caused the economy to contract by 4.1% in 2020. This strong performance was driven by the agricultural sector, which grew 5.2% year-on-year, and gross fixed capital formation (investment), which expanded 17% year-on-year. The industrial sector also saw year-on-year growth of 3%, while the services sector (which accounts for three-quarters of Brazil’s GDP) contracted 0.8%. Meanwhile, household consumption and government spending fell in both quarterly (-0.1% and -0.8%) and year-on-year (-1.7% and -4.9%) terms. These results have buoyed economic forecasts for the year, with for example investment bank Goldman Sachs revising up its 2021 GDP projection for Brazil from 4.6% to 5.5% on the back of the Q1 figures. |
Central America & Caribbean |
In brief: Panama announces new natural gas plant |
* Panama’s President Laurentino Cortizo has announced a new US$1bn investment for the construction of a natural gas energy project, Generadora Gatún, to be located in Colón province which will have an installed capacity of 670MW. To be constructed by Consorcio Group Energy Gas Panamá, which comprises US-based InterEnergy Group and AES Panamá, a local subsidiary of US energy company AES, the project will generate over 3,000 direct jobs and “thousands of indirect jobs” in its construction phase according to Cortizo. InterEnergy Group will own a 51% stake, the Panamanian state, 25%, and AES Corporation, 24%. President Cortizo said the investment was in line with a newly unveiled plan for the comprehensive development of the electricity sector which seeks to make it more competitive in terms of price and quality and ability to generate cleaner energy. |
Mexico |
MEXICO: CNTE mobilises against education reform |
On 1 June thousands of teachers affiliated with Mexico’s Coordinadora Nacional de Trabajadores de la Educación (CNTE) teachers’ union staged a march in the southern state of Chiapas demanding the opening of a new dialogue table with President Andrés Manuel López Obrador over the implementation of the federal education reform. Analysis: Teachers’ unions were one of the bases of support for López Obrador and the nationally ruling Movimiento Regeneración Nacional (Morena) party in the 2018 general election. But the CNTE appears to have become disillusioned with the López Obrador government, which it accuses of reneging on its promise to fully repeal the education reform approved by the Enrique Peña Nieto administration (2012-2018). Failure to address the CNTE’s demands quickly could lead to López Obrador and Morena losing the union’s support in the upcoming 6 June midterm federal legislative, state, and local elections, as well as to unrest in Chiapas and other states.
Looking Ahead: The CNTE has set up a protest camp in Tuxtla Gutiérrez and says that it is prepared to extend its protests around the country if its demands are not met, which suggests tensions are likely to rise in the next few days. |
In brief: Mexico-United Kingdom trade agreement comes into force |
* Mexico’s economy ministry (SE) has announced that following the publication in the official gazette of a series of decrees on preferential tariff arrangements, the Mexico-United Kingdom Trade Continuity Agreement (TCA) has now come into full force. The TCA replaces the trade agreement that Mexico has with the European Union (EU) and that governed bilateral trade with the United Kingdom (UK) until it decided to leave the EU. Signed in December 2020, the TCA allows reduced tariff trade to continue between the two countries as it had done under the previous agreement with the EU for the next three years. An SE statement said that the agreement “means that Mexican products have preferential access to the United Kingdom market” while the two countries explore the possibility of signing a broader agreement. “The main objective of the current agreement is to preserve preferential trade conditions… and provide a platform for greater bilateral trade liberalisation”, the SE statement explains. According to SE figures, the UK is Mexico’s fifth largest export market in Europe with bilateral trade reaching US$5.2bn in 2019, a 12.5% increase on the previous year. |
Southern Cone |
ARGENTINA: Another vaccine scandal emerges |
On 1 June Santiago Cornejo, director for country engagement at Covax, the World Health Organisation’s (WHO) initiative aimed at guaranteeing equitable access to coronavirus (Covid-19) vaccines, said that Argentina had rejected offers to receive the Pfizer vaccine through Covax. Analysis: Cornejo’s comments, which suggest that Argentina could have had access to more vaccines than is currently the case, have potentially sparked another vaccine scandal for the government led by President Alberto Fernández as the country faces the most severe moment of the pandemic yet and criticisms that it failed to secure a sufficient number of vaccines. The Fernández government has already lost a health minister over a vaccine queue-jumping scandal and has been pilloried by the political opposition for allegedly seeking bribes from Pfizer; these latest revelations are likely to put it even more on the back foot.
Looking Ahead: Fernández's chief-of-staff, Santiago Cafiero, is due to appear before the senate tomorrow (3 June) to present a report on the government’s policies, in which he replies to a record 1,160 questions presented by senators on a wide variety of issues including efforts to tackle the second Covid-19 wave. Cafiero may now face further questioning on the government’s vaccine procurement process following Cornejo’s comments. |
In brief: Agriculture drives up Argentina’s foreign currency reserves |
* The monthly influx of foreign currency to Argentina from the export of grains and derivatives has reached its highest level in 18 months, according to the Cámara de la Industria Aceitera de la República Argentina (Ciara) and Centro de Exportadores de Cereales (CEC), chambers representing oilseed producers and cereal exporters. In a joint press release, Ciara and the CEC announced that in May, companies from this sector received US$3.545bn from their exports, bringing the total of foreign currency that they have earned in 2021 to US$13.301bn. The amount of foreign currency earned in May was 16.9% greater than the April total, and represented an 82.2% year-on-year increase. Ciara and the CEC attributed the increase to rising commodity prices, and said that it was achieved in spite of difficulties posed by strikes in the shipping industry and the persistent low levels of the Paraná river in Santa Fe province. |