LatinNews Daily - 30 November 2022 |
Main Briefing |
BRAZIL: Lula under pressure over top military appointments |
On 29 November, Brazil’s media reported that president-elect Luiz Inácio Lula da Silva (Partido dos Trabalhadores, PT) has informed close allies that he intends to nominate his defence minister and new commanders for Brazil’s three armed forces (army, navy and air force) next week. Analysis: Since his campaign, Lula had made it clear that he intended to name a civilian to head up the defence ministry and it was expected that he would make this appointment before making a final decision about the heads of the armed forces. However, according to Brazilian newspapers Folha de S. Paulo and Estado de S. Paulo, the three top commanders have decided to bring their resignations forward to next month, before he takes office in January. Now, Lula is rushing to find replacements that, at the same time would be loyal to the new government but also respected by a large part of the military. Brazil’s society has been deeply divided since the 30 October election, in which Lula narrowly defeated President Jair Bolsonaro (Partido Liberal, PL) and there have also been significant signs of polarisation in the armed forces. Bolsonaro drew members of the military to his support base, giving them power, resources, and positions in his government, so many remain loyal to the outgoing president and it has been a challenge for the PT to deal with some radical military figures.
Looking Ahead: According to Brazilian news web site G1, the favourite candidates for the armed forces are Júlio César de Arruda (army), Aguiar Freire (navy) and Marcelo Damasceno (air force). The three are among the generals that have served for the longest time in Brazil’s armed forces and are well respected by members of the military. |
Andean |
ECUADOR: Legislature votes to repeal tax reform |
On 29 November, Ecuador’s opposition-controlled national assembly voted to repeal the tax reform that was introduced by President Guillermo Lasso’s government in November 2021. Analysis: The vote to repeal the tax reform is for now largely symbolic – President Lasso has the power to veto the opposition’s bill, meaning that his economic programme would be safe for at least a year. However, the vote demonstrated the near-total unravelling of Lasso’s alliance in the national assembly; he has totally lost the support of the indigenous Pachakutik, which offered the key to steering his economic reforms through the legislature. Faced with the prospect of legislative gridlock for the remainder of his four-year term, Lasso is instead preparing to secure constitutional reforms via an eight-question referendum. Yesterday, he issued a decree confirming the calling of this referendum, which must now be organised by the national electoral council (CNE).
Looking Ahead: Lasso is expected to veto the bill, but the tax reform is still at risk in the long run. Under Ecuador’s constitution, the national assembly must wait a year to reconsider a bill following a presidential veto. However, the veto can then be overturned with the support of two-thirds of legislators. |
In brief: Truck drivers’ strike ends in Peru |
* Lorry drivers in Peru have ended a strike that had seen key highways blocked around the country since 22 November. A spokesman for the truckers’ union Gremio de Transportistas y Conductores (GTC), Javier Corrales, told local radio station RPP Noticias that lorry drivers had been ordered to end the strike action following the reaching of an agreement between 37 unions and the transport and communications ministry. This includes a preliminary agreement on a 70% reduction in the consumer tax (ISC) on fuel paid by lorry drivers. Corrales said that “it’s been agreed that this must be done without any sort of restriction”. |
Brazil |
In brief: Brazil’s job creation slows |
* Brazil’s labour ministry has published the latest figures from the national employment registry (Novo Caged), which show that a net 159,454 new jobs were created in the formal sector in October, the lowest number since March 2022. This is the result of 1.78m job openings and 1.63m job losses during the month and brings the total number of formal jobs in Brazil to 42.99m. From January to October 2.32m formal jobs were created in the country. Despite the slowdown, Labour Minister José Carlos Oliveira, said the October figures raise hopes that Brazil could end 2022 with a total of 2.5m formal jobs created. “Our economy is on the right path,” he said. |
Central America & Caribbean |
NICARAGUA: Gov’t further defies international community |
On 29 November, the Inter-American Court of Human Rights (Corte-IDH) declared the Nicaraguan government led by President Daniel Ortega in contempt of court for ignoring its rulings on political prisoners. Analysis: The Corte-IDH is an arm of the Organization of American States (OAS), from which the Ortega government announced its withdrawal in November 2021. This followed the OAS’s condemnation of the election that month which produced a re-election victory for Ortega but was widely slammed as a sham. The Ortega government’s refusal to heed the Corte-IDH rulings is not a surprise, having similarly proven deaf to multiple other rulings, resolutions and sanctions by the international community over its relentless crackdown on dissent and the deteriorating human rights and democracy situation in the country. The Corte-IDH’s declaration, which came days after the United Nations (UN) Committee on Torture (CAT) warned that the government has refused to cooperate in its review, will further leave it open to international condemnation and comes as it is alienating other left-wing governments in the region – notably that led by President Gabriel Boric in Chile.
Looking Ahead: The Corte-IDH instructs its president to present a report before the OAS permanent council regarding Nicaragua’s contempt of court, which is likely to subject the Ortega government to further international condemnation. |
In brief: El Salvador announces another debt repurchase offer |
* El Salvador’s President Nayib Bukele has issued a second offer to repurchase sovereign debt bonds maturing in 2023 and 2025, setting the maximum for the repurchase at US$74m. The 2023 and 2025 bond offerings were US$800m each. President Bukele’s announcement comes amid continued concerns that El Salvador could default on its debt amid the impact of the government’s decision to adopt the cryptocurrency bitcoin as legal tender last year. In September the government announced a voluntary cash buyback of US$360m for its 2023 and 2025 bonds, having proposed a US$560m transaction in July. Bukele tweeted that the September buyback was “was so successful that we have decided to launch another offer for the remainder of the 2023 and 2025 bonds.” Indicative of these default concerns, in September international credit ratings agency Fitch downgraded El Salvador citing the potential risk of default. Also that month, S&P Global maintained El Salvador’s “CCC-plus” rating but said that it could cut its already negative credit rating within six to 18 months if it does not make “adequate progress” on debt reduction. |
Mexico |
MEXICO: Alarms raised over dangers facing migrants |
On 29 November, the local press reported that a migrant shelter in northern Mexico was closing due to threats from organised crime groups. Analysis: Tensions have been on the rise at the border following the implementation of a new bilateral Mexico-US migration agreement allowing US authorities to expel Venezuelan migrants to Mexico under the US federal order Title 42. The agreement has led to a build-up of Venezuelan migrants in Mexican border towns. This latest indication that organised crime groups are capitalising on the vulnerability of migrants will likely heighten scrutiny on what President Andrés Manuel López Obrador’s government is doing to protect migrants in Mexico.
Looking Ahead: Tensions are likely to rise further in the run up to the lifting of Title 42, set for 21 December, with US and Mexican authorities expecting an influx of migrants. |
In brief: Unemployment in Mexico remains stable |
*Mexico’s national statistics institute (Inegi) has published new figures which show that in October the unemployment rate stood at 3.3% of the economically active population – people over the age of 15 who are employed or seeking employment – equating to 2m people. This is slightly up from 3.2% registered in September on seasonally-adjusted figures and is 0.6 percentage points less than in October 2021. According to the Inegi figures, the number of people in Mexico’s economically active population who were employed in October numbered 58.4m – 2m more than in October 2021. According to Inegi, 4.4m people, or 7.5% of the employed population, were underemployed in October 2022, meaning they had the capacity and need to work more hours. This is down from 7.7% in October 2021. |
Southern Cone |
CHILE: Remaining truckers’ unions agree to lift strike |
On 29 November, Chile’s deputy interior minister, Manuel Monsalve, said an agreement had been reached with the remaining striking truckers’ unions and that a working relationship had been established between the government, transport and business sectors. Analysis: Chile’s powerful truckers’ unions initiated coordinated strike action on 21 November, demanding lower fuel prices and better protection from highway crime, and setting up roadblocks which caused serious disruption to food supply chains. The government reached an agreement with several unions on 27 November, but the Confederación Gremial de Transportistas Fuerza del Norte (CGFTN) and Confederación de Camioneros Centro Sur had vowed to continue striking. The fact that these two final unions have now agreed to lift the strike will serve as a relief for the government led by President Gabriel Boric, given that food and fuel shortages were beginning to bite in certain areas of the country.
Looking Ahead: The agreement signed on 28 November included a commitment for all parties to maintain dialogue. An initial meeting is set to take place in Santiago no later than 15 December. |
In brief: Chile’s congress approves revised 2023 budget |
* Chile’s lower chamber and senate have voted to approve a report by congress’s mixed commission, which was written to resolve differences in the versions of the 2023 national budget approved by both chambers of congress. The revised budget, which increases spending by 4.2% compared to the 2022 budget, includes some changes in the way funding is divided across government ministries and makes adjustments to the way student finance is allocated. The mixed commission’s recommendations were approved with 135 votes in favour, one against, and two abstentions in the lower chamber, and with 42 votes in favour and none against in the senate. |