Mexico: Is Peña Nieto Missing the Point?

By Fulton Armstrong

Rodrigo Barquera / Flickr / CC BY

Rodrigo Barquera / Flickr / CC BY

The disappearance and apparent massacre of 43 students from a city in Mexico’s Guerrero state is a rude reminder to President Peña Nieto that economic reform and increased foreign investment aren’t enough to help the country overcome the scourge of narcotics-fueled violence.  Federal and State prosecutors agree that the police in Iguala – who, along with the city’s mayor, have strong ties to the Guerreros Unidos cartel – handed the students over to the narcos after a confrontation during a student protest turned violent, already leaving six students dead.  Residents on a nearby ridge noted an increase in police and truck traffic soon after the showdown, but the dozens of bodies uncovered by searchers at mass graves in the area so far have not been the students’.  The mayor and police chief are in hiding, but Federal authorities say three dozen police and accomplices have been arrested and many have confessed.  None apparently has identified where the bodies were dumped.

As the scope of the crime, which occurred three weeks ago, has become clearer, the President’s rhetoric has been increasingly forceful, committing to investigate and bring the perpetrators to justice.  The Federal police have been directed to take control of security in the area and nearby municipalities.  The government announced last Friday, that the “supreme leader” of the Guerreros Unidos has been arrested, while another committed suicide after a standoff with police.  But critics point out the federal authorities’ own problems with corruption, and criticism of Peña Nieto’s efforts to stem the violence has been growing, especially in the wake of his administration’s many self-congratulatory statements about progress in the security area.  A new 5,000-strong national civilian gendarmerie he rolled out in August was ridiculed as too little, too late.  His continuation of his predecessor’s emphasis on arresting drug kingpins – resulting this year in the spectacular arrests of Joaquín “El Chapo” Guzmán Loera (of the Sinaloa cartel), Héctor Beltrán-Leyva (of the Beltrán-Leyva Organization), Fernando Sánchez Arellano (of the Arellano Félix cartel), and others – has failed to eliminate the underlying systems of the drug trade.

During the presidential campaign in 2012, Peña Nieto promised to reduce violence, and his decision not to obsess over the problem – as his predecessor, President Calderón, had – may have given him a respite.  But his administration apparently ignored clear signals of trouble – such as indications that in Guerrero state and elsewhere the cartels’ were expanding and consolidating their influence over government – and the problem seems to be roaring back with a vengeance.  The President’s focus on reforming the economy and attracting foreign investment makes strategic sense, but its long timeline doesn’t help him fight the fires of violence that envelop parts of the country.  There’s also merit in creating something like the gendarmerie and other institutional tools, but that approach seems to ignore that the rot of corruption has deep roots at all levels – federal, state, and local – that must be dealt with and that an elite unit tied to a federal capital hundreds of kilometers away can do little in places like Guerrero.  Calderón had shown the challenge wouldn’t be easy, but Peña Nieto has not yet shown that he – and Mexican society – are up to it either.

Haiti: Plus ça change …

By Fulton Armstrong

Photo credit: a-birdie and Free Grunge Textures / Flickr / CC BY

Photo credit: a-birdie and Free Grunge Textures / Flickr / CC BY

Haiti buried Jean-Claude “Baby Doc” Duvalier last week, but his and his father’s ghosts continue to haunt Haitian politics and keep institutions so weak that, after two decades of operations, the United Nations decided to renew its mandate there yet again this week.  Duvalier didn’t get the state funeral his family and closest supporters wanted, but his sendoff was dignified enough to demonstrate that political elites have forgiven his excesses – including thousands of extrajudicial killings and unbridled corruption – or were at least nostalgic for his version of “law and order.”  President Martelly tweeted that Duvalier was “an authentic son of Haiti” and sent his personal friend and counternarcotics chief, Gregory Mayard-Paul, to the service.  While a small group of protestors outside the church demanded justice for the dictator’s abuses, several hundred of Haiti’s economic and political elite applauded the eulogies for Baby Doc, who was forced into exile in 1986 and returned in 2011.  Duvalier outlived by three months the first president to be elected after his removal, Leslie Manigat, who himself was overthrown in a bloodless coup after serving less than six months in office (1988).  The next democratically elected successor, Jean-Bertrand Aristide, was ousted in two coups (1991 and 2004) and last month was put under house arrest for alleged corruption.

Institutional weaknesses dating back to the Duvaliers’ rule and before continue to stymie progress in Haiti.  Because the government is unable to provide even basic police services for  the people, this week the United Nations Security Council again – for 20 years in a row – authorized an extension of a mission to provide either peacekeeping or “stabilization” support.  The vote was unanimous and, according to the UN’s own press report, the MINUSTAH mission would continue “for another year, until 15 October 2015, with the intention of further renewal.”  Like past resolutions, this week’s called on Haitian political leaders “to work cooperatively and without further delays to ensure the urgent holding of free, fair, inclusive, and transparent [elections]” at the legislative, partial senatorial, municipal, and local levels.  Senate elections are three years overdue, perpetuating the sort of political crises that have long plagued the country.  Officials’ reassurances to U.S. Secretary of State Kerry and others last week that elections will be held this month lack credibility in the absence of an electoral law and the complex preparations necessary for voting.

It would be inaccurate and unfair to say that Haiti has made no progress since Jean-Claude’s ouster almost 30 years ago.  The vicious and corrupt Haitian military has been disbanded, and – although the Tonton Macoutes that the Duvaliers deployed to force the population into submission were never brought to justice – vigilantes no longer roam the streets terrorizing entire neighborhoods.  Haitian elections have been messy but, in many observers’ estimation, clean enough to give Presidents and legislators a good bit of legitimacy.  But the tragedy of Haiti that keeps repeating itself is one of unfulfilled aspiration.  Individual Haitians are deeply committed to education – sacrificing huge portions of family income to keep children in school – and, when jobs are available, work as hard as anyone in the hemisphere.  Despite billions in aid, the country’s institutions are too weak, and the elites’ interest in keeping them that way is too strong, to move the country faster.  The politically and economically powerful who prospered under Duvalier surely hope that any responsibility they had for his excesses was buried with him, and if Haitian history is any guide, they’ll get away with it – while the UN and international community keep internal Haitian tensions in check and help provide basic services.

Bolivia: Evo Wins Again

By Fulton Armstrong

Photo credit: Eneas / Foter / CC BY

Photo credit: Eneas / Foter / CC BY

President Evo Morales’s landslide election to a third term – fueled by a combination of moderate policies and fiery leftist rhetoric – portends continued stability in the near term, with still no indication of how his party will continue its project after him.  Although official results have yet to be announced, and some preliminary data show Evo garnering around 54 percent of the vote, exit poll estimates gave Evo a massive lead of 60 to 25 percent over the next closest candidate, a wealthy cement magnate named Samuel Doria Medina.  Regardless, the enormous margin separating Evo from his competitors precludes a runoff race.  Doria, who also ran against Evo in 2005 and 2009, claimed that OAS praise for the elections before the polls closed was “not normal,” but he is not disputing the results and has conceded defeat.  Congratulations to Evo poured in first from his left-leaning allies – Presidents Maduro (Venezuela), Mujica (Uruguay), Fernández de Kirchner (Argentina), and Sánchez Cerén (El Salvador) – but other voices soon followed.  The victory set Evo on track to be the longest-serving president in Bolivian history since national founder Andrés de Santa Cruz lost power in 1839.  His party, the Movement Toward Socialism (MAS), is also reported to have expanded its control of the Chamber of Deputies and the Senate, although vote tallies are not final.

Evo has achieved things his domestic and foreign detractors said were impossible.  While his rhetoric has been stridently leftist and anti-U.S. – he even dedicated his “anti-imperialist triumph” to Hugo Chávez and Fidel Castro – his policies have been decidedly pragmatic and disciplined, and the results have curried favor for him among foes.  His economic czar has emphasized Bolivia’s commitment to “have socialist policies with macroeconomic equilibrium … applying economic science.”  The economy grew 6.8 percent last year and is on course to grow another 5 percent this year.  Foreign reserves have skyrocketed; Bolivia’s are proportionately the largest in the world.  Poverty has declined; one in five Bolivians now lives in extreme poverty, as compared to one in three eight years ago.  IMF and World Bank officials, whose policies Evo largely rejected, have grudgingly conceded he has managed the economy well.  Some of his projects, such as a teleférico cable car system linking La Paz with the sprawling city of El Alto, have garnered praise for their economic and political vision.  He even won in the province of Santa Cruz, a cradle of anti-Evo conspiracy several years ago.  In foreign policy, he has good ties across the continent, but strains with Washington continue.  The two countries have been without ambassadors in each other’s capital since 2008, and talks to resolve differences over the activities of DEA and USAID failed and led to their expulsion from Bolivia.

Sixty-plus percent in a clean election for a third term – rare if your initials aren’t FDR – signals that Evo, like Roosevelt, is a transformative figure.  No matter how brilliantly Evo has led the country, however, the big gap between his MAS party and the opposition suggests political imbalances that could threaten progress over time if he doesn’t move to spread out the power.  Evo has given the MAS power to implement his agenda, but he has not given space to rising potential successors.  He has said he will “respect the Constitution” regarding a now-disallowed fourth term, but it would take great discipline not to encourage his two-thirds majority in the Senate to go ahead with an amendment allowing him yet another term.  It would be naïve, moreover, to dismiss out of hand the opposition’s allegations of corruption by Evo’s government, but his ability to grow his base above the poor and well into the middle class suggests that, for now, the fraud and abuse do not appear to be very debilitating … yet.  Washington, for its part, seems content with a relationship lacking substance rather than joining the rest of the hemisphere in cooperating with Bolivia where it can.

Other AULABLOG posts on this and related topics:  ALBA Governments and Presidential Succession; Lessons from the MAS; and Will Bolivia’s Half Moon Rise Again?

Elections in Brazil: The Force of the Latin American Left

By Eric Hershberg and Luciano Melo

Aécio Neves – Senador & World Economic Forum / Foter / CC BY-NC-SA

Aécio Neves – Senador & World Economic Forum / Foter / CC BY-NC-SA

The first round of Brazil’s presidential election has set the stage for a runoff playing primarily to class differences.  By the eve of the election, polls hinted at the real possibility that the center-right candidate Aécio Neves of the Brazilian Social Democratic Party (PSDB) would edge out the other principal opposition contender, former Minister of the Environment Marina Silva.  Silva enjoyed a spike in the polls after she replaced the late Eduardo Campos, who perished in a plane accident in August, as the Brazilian Social Party (PSB) candidate.  Sunday’s results confirmed Silva’s decline, as she captured only 21.3 percent of the votes compared to 33.5 percent for the PSDB and 41.6% for incumbent President Dilma Roussef of the Worker’s Party (PT).  The PT used its potent propaganda machine to portray Silva as a potentially dangerous candidate – an indecisive leader who could not be trusted to sustain popular social programs such as the Bolsa Familia conditional cash transfer program, which has helped lift millions of Brazilians out of poverty.  Also, Aécio and Rousseff built their images upon two iconic ex-Presidents – the former on Fernando Henrique Cardoso (FHC) – seen by the middle and upper classes as the leader who managed to defeat hyperinflation and putting Brazil on track for economic growth – and the latter on Lula, Rousseff’s mentor, who is idolized among the most disadvantaged parts of Brazilian society as the President who helped the poor become less poor.

To win the runoff on October 26, Aécio needs at least 70 percent of Silva’s votes – she has only hinted at supporting him – while Rousseff would succeed with only half of that.  It is clear that Dilma and the PT will double down on their negative advertisements, now aiming at Aécio rather than Marina.  The PT’s barrage over the airwaves will highlight the risks of abandoning the course set out by Lula and followed by Rousseff.  Voters will be told that the opposition may underfund cash transfers, privatize the state oil company Petrobrás or treat it as a profit-making enterprise rather than as a development bank, thus increasing unemployment as occurred during the Cardoso years.  And the PT will no doubt remind voters of its consistent efforts to boost minimum wages and chip away at the vast inequalities that had long characterized Brazil.  Surely they will portray Neves as an elitist out of touch with the majority that has benefited from the PT’s redistributionist agenda.  Aécio and the PSDB, by contrast, will highlight the worrisome slowdown in growth under Rousseff, the failure to significantly improve public services – it was frustration over health, education and, particularly, urban transportation that drove the social protests that began in mid-2013 – and the over-regulated and over-taxed economy.  Most of all, Neves’ campaign will harp on the persistent scandals that have bedeviled the PT over the past decade and that have helped to fuel popular disdain for politicians.

The election results in Brazil are likely to become increasingly polarized in terms of class.  Dilma appears poised to prevail in the poorest states of North and Northeast, where Bolsa Familia and other cash transfer programs, subsidies, wage increases and Lula’s image are compelling.  In turn, Aécio should come out ahead in the richer states such as São Paulo, which offer the largest pool of voters and where highly educated and middle- and upper-income Brazilians are concentrated.  We make divergent predictions: Hershberg anticipates a PT victory, since for all the speculation about the travails of the Latin American left, it has built very substantial foundations of support in societies that credit the left with finally making some advances to tackle Latin America’s yawning inequalities.  Warnings that Aécio represents a return to elite rule will resonate among the PT’s electoral base, and the PT’s success will be nourished by its powerful organizational capabilities.  Melo, by contrast, anticipates a PSDB triumph.  In this scenario, the corruption, disappointing growth rates over the past two years as the commodity boom has slowed, and widespread frustration about the quality of public services will generate an anti-incumbent dynamic that will bring to an end a dozen years of PT rule.

Venezuela: More of the Same Tragedy

By Michael McCarthy*

The gruesome murder of a pro-government Socialist Party deputy and the decision by the opposition coalition’s Mesa de Unidad Democrática (MUD) to suspend a rally in light of the tragedy foretold an opportunity to restart a national dialogue.  But unlike in January 2014, when the murder of beauty queen Monica Spears and her family created momentum for talks on security between the government and opposition, an unfortunate and familiar downward spiral has begun.  High-level government officials’ provocative accusations that the murder of Robert Serra, one of the Venezuelan Parliament’s youngest members, was the work of right-wing actors have deepened yet again the political polarization in Venezuela.  UNASUR’s new Secretary General, former Colombian President Ernesto Samper, surprisingly weighed in, strongly implying that Colombian paramilitaries were involved in Serra’s murder.  The government has long attempted to link members of Venezuela’s opposition with paramilitary groups, and Samper’s impartiality will forever be questioned by the opposition if the allegation is not proven. At Serra’s funeral, President Maduro described the MUD’s new Executive Secretary, Jesús “Chuo” Torrealba, as a piece of “garbage.”  Maduro’s name-calling is another example of the government using polarization as a tool to encourage supporters to close ranks.

Before the stabbing deaths of Serra and his female companion by unidentified assailants, the government was attempting to build momentum to resume the UNASUR-sponsored talks that had been frozen since May 3.  Samper had informed the MUD and opposition members of his intention to restart talks, and had described Maduro as “a man of dialogue, a man of peace,” adding that there were good prospects for “working a lot of things for the good of the region.”  But at this point any good will among the parties seems to have evaporated.  Moreover, for MUD secretary Torrealba, who originally said his goal was to change the MUD’s profile to mobilize a wider base of support, the primary task remains building MUD unity at a moment when different factions of the opposition are promoting widely varying initiatives.  Torrealba has little negotiating experience and does not enjoy the same access to elite sectors as his predecessor did.  His precarious position calls into question whether the MUD could negotiate as a coalition even if talks restarted.

Once again, centrifugal forces seem to be prevailing in Venezuela.  This trend raises the question of whether Venezuelan society is not only “wounded and resentful,” as Jesuit Political Scientist Arturo Sosa says, but on the verge of an estallido social – social explosion.  Mechanisms for mediating conflict through political discussion remain in place and appear unlikely to disappear completely, but confrontations are likely to continue flaring up regularly.

*Michael McCarthy is a CLALS Research Fellow.

Who Will Attend the OAS Presidential Summit in Panama?

By Fulton Armstrong and Eric Hershberg

OAE-OAS & tgraham / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

OAE-OAS & tgraham / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

The Summit of the Americas isn’t until next April, but interest in how Panama as host handles near-unanimous pressure from Latin America to invite Cuban President Raúl Castro, and how the United States and Cuba will respond, is growing fast.  Speaking to reporters at the United Nations last week, U.S. Assistant Secretary of State Roberta Jacobson answered several questions on the U.S. position.  Key excerpts follow:

  • Asked “if the United States is still opposed to Cuba attending.”  On the Summit of the Americas, I think we’ve been pretty clear in our position on the summit, which is that obviously Panama is the host country for the summit, and as the host country they will make the decisions on invitations to that summit.  …  And the fact of the matter is we have said from the start that we look forward to a summit that can include a democratic Cuba at the table.  We also have said that the summit process, ever since Quebec in 2001, has made a commitment to democracy, and we think that’s an important part of the summit process.  But the decision about invitations is not ours to make, and obviously there’s been no invitations formally issued to the United States and other countries. And so there is no acceptance or rejection yet called for or made. …
  • Asked “is there a chance that the U.S. might refuse going.”  Again, I think you won’t be surprised to hear me say that we’re really not going to answer hypotheticals in the future yet.  Obviously, the Summit of the Americas is in April and that’s not a situation that we can answer, although I think we have made clear that we believe the summit process is committed to democratic governance and we think that the governments that are sitting at that table ought to be committed to the summit principles, which include democratic governance. And therefore that’s our position at this point.  Obviously, we have a position on Cuba which does not at this point see them as upholding those principles.

Panama’s likely invitation to Cuba – reflecting the consensus of 32 hemispheric nations at the last Summit – will draw protests from official quarters in Washington.  But it’s far from certain that the Obama Administration would risk blame for torpedoing the 20-year Summit process.  Obama survived a handshake with Raúl Castro at Nelson Mandela’s funeral last December, and being in the same room with him again as a President in the second half of his second term will have little political consequence.  A workshop in Mexico City in June, in which CLALS researchers participated, and another in Ottawa in September, sponsored by the Center and the University of Ottawa, explored likely outcomes.  Mexican international relations specialists speculated that a reasonable outcome was for the United States to show up like a polite guest, and thus avoid having the anachronism of U.S. antagonism toward Cuba overshadow its broader relations with Latin America.  Canadian experts were deeply concerned that Cuba’s inclusion might undermine the centrality to the OAS of the Inter-American Democratic Charter, but they agreed that failure to convene a Summit would constitute a serious blow to the OAS and to the regular summits that provide Canada a seat at the inter-governmental table.

The reality is that Cuba does not conform to the Democratic Charter or to the broader OAS criteria of democratic rule, but equally real is that Latin America sees Cuba as a full member of the hemisphere and has lost all patience with those in Washington who would deny that.  Either Washington — and Ottawa — set aside their objections to Cuba’s inclusion or they bid farewell to such fora and their constructive impact on regional relationships that ought to matter to them.  Moreover, if they acquiesce to Cuban participation but then try to commandeer the agenda and make the Summit a seminar on democracy and human rights, it will only reinforce the widespread sense in the region that Washington cannot move beyond its obsession with the trivial matter of Cuba and get on with a serious conversation among equal partners.  They would thus sacrifice an opportunity to discuss issues on which significant, substantive advances are possible through dialogue among leaders of countries throughout the hemisphere.  The value of the Summit rests with the capacity of all involved to act like grownups.  President Obama did so at Mandela’s funeral, and it will be telling whether he can do it again in Panama this coming April.

Elections in Uruguay: A Bellwether for the Latin American Left?

By Aaron T. Bell

Photo credit: Frente Amplio (FA) / Foter / CC BY-NC-SA

Photo credit: Frente Amplio (FA) / Foter / CC BY-NC-SA

Uruguay’s elections on October 26 – once seen as a sure bet for the ruling Frente Amplio’s presidential candidate, former president Tabaré Vázquez (2005-2010) – have become a tight race, perhaps signaling challenges for other left-leaning Latin American governments as well.  The FA’s slight slip in the polls since the beginning of 2014 has been matched by sustained growth by the Partido Nacional, led by Luis Lacalle Pou, the son of a former president.  While Vázquez still holds a ten-point lead, he’s well below the absolute majority needed to avoid a run-off election, whose numbers look even bleaker for the ruling party.  In February, Lacalle Pou was running twenty-five points behind Vázquez in a head-to-head matchup, but the latest polls now show him only two points back.  Lacalle Pou will need the support of his party’s long-time rival, the Colorado Party, to win a second round against the FA, but Colorado candidate Pedro Bordaberry has thus far refused to concede the first round to the PN despite trailing them by 17 points.  Nonetheless, Vázquez was defeated by just such a second-round alliance in 1999.  Complicating things for him, polling strongly suggests that FA could lose control of both houses of the national legislature this fall.

The Lacalle Pou campaign has focused on public security and education.  Uruguay’s homicide rate remains one of the lowest in the region, but a modest increase in crime in recent years has spurred both urban and rural Uruguayans to rank security as the principal problem facing the nation – well ahead of the second leading concern, education.  The October elections will coincide with a referendum on lowering the age of criminal responsibility from 18 to 16 for serious offensives, with polls showing Uruguayans closely divided but leaning toward approval.  On the education front, the FA’s Plan Ceiba has helped provide laptops to every student, but 2012 assessment data from the Organization for Economic Cooperation and Development still place Uruguay’s students well below the international average in math, science, and reading.

The FA’s political situation is paradoxical: it has presided over major socioeconomic improvements in the last decade and won international acclaim, but earned a more tepid response at home.  Uruguay’s decision to legalize marijuana was widely celebrated abroad as a step toward a more progressive drug policy in the region, but polls continue to show that a majority of Uruguayans oppose legalization, and it has not won the FA much support even among proponents of cannabis, who have resisted the creation of a registry of buyers.  (Vázquez recently suggested the registry would be used to develop rehabilitation programs.)  The FA seems to have not yet figured out how to respond effectively to the perception of insecurity, nor has it overseen a decided improvement in education, which is central to long-term development prospects.  With Brazil’s Partido dos Trabalhadores facing an uncertain future, and political crises in Argentina and Venezuela simmering, the FA may be the first case of a larger regional rollback of the first wave of 21st century leftwing movements.

Historic August for LGBT Rights in Colombia

By Juliana Martínez

Colombia Diversa / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Colombia has again shown itself to be a country of contrasts – a society ostensibly ruled by Catholic and conservative morals with one of the hemisphere’s most progressive Constitutional Courts – with two important legal decisions on LGBT rights.  The Court has defended the democratic, pluralistic, and inclusive spirit of the Colombian Constitution against powerful authoritarian and conservative forces for years.  In 2007 and 2008, it granted pension, social security, and property rights to registered same-sex couples, and it ruled that same-sex couples “constitute a family” in 2011.  In spite of some recent rulings tarnishing its liberal record, last month the Court made two decisions that, though limited, have historic implications.

  • It ruled in favor of step-child adoptions by gay couples.  After much political, legal, and even religious debate, the Court broke a four-year silence on the highly contested issue, ruling 6 to 3 that Verónica Botero could legally adopt the biological children of her wife, Anna Leiderman.  The ruling does not explicitly allow joint adoption by gay couples, but the decision cites ample scientific evidence and declares that parental homosexuality cannot be considered a risk factor for children, thus leaving the door open for further LGBT-friendly jurisprudence in the matter.
  • The court recognized the gender identity of trans women by declaring that they do not have to comply with the compulsory military service required of all Colombian males.  The case centered on Gracy Kelly Bermúdez, a transgender woman who filed a lawsuit against the mayor’s office in Bogotá when she was denied a job for failing to provide proof of her military service.  Bermudez had not entered the military because she identifies as a woman, and therefore did not have the Military Service Registration Certificate (libreta militar) required when applying for jobs, studying at the university level or accessing health care services.  She would have been exempted if she had undergone an official sex change – the right to change one’s sex has been protected in Colombia since 1993 – but this can only be legally done after undergoing sex realignment surgery, a procedure that most trans women do not have access to, cannot afford, or do not want.  Therefore, despite their gender identity and expression, the legal sex of the majority of trans women continues to be “male.”  The Court decided in favor of Bermúdez and ordered the mayor’s office to hire her immediately.

These decisions are far-reaching.  In the Bermúdez case, the Court was essentially prioritizing gender identity over assigned sex at birth.  It declared that asking trans women for the Military Service Registration Certificate when hiring them is unconstitutional because it violates their right to define their own gender.  Furthermore, the Court told Congress to draft a bill that regulates the rights of transgender people in Colombia, paving the way for a much-needed Gender Identity Law.  The ruling also has deep regional implications.  Since Argentina passed a groundbreaking Gender Identity Law in 2012, many countries have been struggling to achieve similar results – and the Colombian legal precedent can become a viable alternative for impact litigation.  Currently, at least ten countries in Latin America have compulsory military service with different levels of enforcement attached to non-compliance.  But as the Bermúdez case illustrates, military conscription mandates can turn into strange, yet effective platforms to denounce how the state routinely imposes gender identity on its citizens, often against their own will, and to catalyze legal reform that advances LGBT rights in the Americas.

* Dr. Juliana Martínez teaches gender and sexuality and Latin American Literature in the Department of World Languages and Cultures at American University.

Argentine Debt and the U.S. Dollar

By Leslie Elliott Armijo

Images Money / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Multiple economic and political challenges have called into question the future status of the U.S. dollar as the world’s dominant reserve currency, but backlash from Argentina’s recent spat with the United States over defaulted bonds appears to be fueling interest in reforms that may have beneficial implications.  According to the IMF, some 61 percent of the world’s known foreign exchange reserves held by central banks around the world remain in low-yielding dollar-denominated assets, mainly U.S. Treasury bonds.  The United Nations Conference on Trade and Development (UNCTAD), China, and heavyweights in the Global South, including Brazil, are calling for international trade agreements that would give emerging economies “policy space” – allowing national governments to impose capital controls, fund exports, subsidize local industry, and keep financial services national.  Private U.S. banks, however, claim that continued U.S. dominance of world capital markets – a crucial pillar of continued reserve currency status – requires ever more open trade in financial services.  The BRICS complain about the U.S. government’s “exorbitant privilege” as the reserve currency country, with some of the sharpest complaints coming from joint statements by Brazil, Russia, India, China and South Africa. Chinese officials, though, worried about their own large dollar investments and ambivalent about the implications of renminbi internationalization, more than once have pulled the group toward a softer tone.

Argentina’s ongoing sovereign debt negotiations provide a different window onto the dollar’s reserve currency status.  Like most countries, Argentina has held a large chunk of its government’s savings in the U.S. and hired private U.S. financial institutions as its international bankers.  Today it is trying to extricate itself from U.S. markets and do its saving and financial intermediation elsewhere. Iran and Russia are doing the same, but Argentina has no foreign policy quarrel with the Obama Administration – and is not subject to U.S. financial sanctions over nuclear or military adventurism.  Buenos Aires is among those who chafe at U.S. power through the dollar, but it is primarily motivated by the U.S. Supreme Court’s decision in July to let stand a lower court judgment in favor of investors holding bonds from Argentina’s $82 billion sovereign debt default in December 2001.  Although 92 percent of the original bondholders accepted the Argentine government’s restructured (lower value) bonds in 2005 and 2010, New York Federal District Court Judge Thomas P. Griesa ruled that Argentina’s failure to settle with the holdouts means that any U.S. financial institutions, or their international affiliates, that intermediate funds enabling Argentina to stay current on payments to the majority will themselves be in contempt of court.  This has sent Argentina into “technical default.” Argentina is suing the U.S. in the International Court of Justice (whose jurisdiction the U.S. refuses to recognize) and in the court of global public opinion – pushing, for example, a recent proposal for global financial reform before the U.N. General Assembly. It has also welcomed an $11 billion currency swap agreement with China, and Chinese state banks have since pledged $6.8 billion in new infrastructure loans.  Some observers speculate that the very first loan of the New Development Bank, newly organized by the BRICS countries, could go to Argentina.

The Argentine bond case harms the perceived fairness and credibility of U.S. financial markets and, by extension, the strength of the U.S. dollar because the recent legal judgments seem capricious to many.  Senior figures at the IMF have long supported the routine inclusion in all international sovereign bond issues of a so-called “collective action clause,” which would make any restructuring accepted by two-thirds of bondholders binding on all.  The European Union already has ruled that sovereign bonds issued within the EU, including many for troubled Eastern or Southern European governments, must contain such clauses.  Moreover, the International Capital Markets Association, representing more than 400 of the world’s largest private investment institutions, has just issued a position paper endorsing obligatory collective action clauses, placing it on the same side of this issue as non-governmental organizations advocating financial architecture reform such as the New Rules for Global Finance and the Jubilee Debt Campaign.  This would give taxpayers in emerging economies – the ultimate backstop of the creditworthiness of their governments – the same bankruptcy rights as firms and households.  It is not in the interest of Latin American and other emerging economies for U.S. currency and financial dominance to end anytime soon – a tripolar reserve currency system based on the dollar, euro, and reniminbi does not yet appear able to sustain the worldwide growth and prosperity of recent decades and may in fact entail significant risks – but fairer rules for sovereign financing would benefit everyone.

* Leslie Elliott Armijo is a Visiting Scholar at Portland State University and a Research Fellow at CLALS.  She has just published The Financial Statecraft of Emerging Powers: Shield and Sword in Asia and Latin America (London: Palgrave, 2014).

Brazil: Is Marina Silva the PT’s Nemesis?

By Luciano Melo

MarinaSilva

Photo courtesy of the Marina Silva campaign website

No politician in recent years has been able to shake and polarize Brazilian politics as Marina Silva has since becoming the Brazilian Socialist Party (PSB) presidential candidate after its original nominee, Eduardo Campos, died in a plane crash last month. She has an alluring biography: born into an extremely poor family and illiterate until she was 16, she worked as a rubber tapper and rose to become one of the most prominent ecologists and defenders of the Amazon region alongside Chico Mendes, a true Brazilian hero. After earning a degree in history, Silva entered politics in the mid-1980s. Several years later she received the most votes as a state representative for Acre, served twice as a senator, and later became the Minister of Environment in Lula’s administration (a position from which she resigned due to fundamental divergences with the Workers Party and Dilma Rousseff). In 2007 she won the UN’s Champions of the World award, and three years later she ran for President under the Green Party banner, amassing 20 million votes on a platform emphasizing environmental issues and education.

Recent polls find roughly a third of Brazilian voters favoring Silva in the first round of balloting scheduled for October 5, and running even with or slightly ahead of President Rousseff in an anticipated run-off election three weeks later. The Brazilian media suggest that a large part of Silva’s appeal comes from a personal aura of transparency and rectitude – a refreshing change from others competing for Brazil’s top job. She has also demonstrated an old-fashioned ability to compromise in order to form alliances. A committed environmentalist, Silva teamed up with Eduardo Campos, a titan of agribusiness, and now, heading up the PSB ticket, her running mate is Beto Albuquerque, a moderate farmer who can bring a certain level of balance in the economic-environmental equation. On the separation of church and state, however, Marina may face a difficult balancing act. She is an evangelical Christian, winning a large chunk of religious voters in 2010, and she has defended the teaching of creationism in schools, saying that God created even Darwin. She rolled out an agenda for advancing LGBT rights recently, but criticism by Pastor Silas Malafaia, one of Brazil’s main evangelical leaders, forced her to reverse course and abandon her position 24 hours after having presented it.

Although Brazil is a religious country, laïcité – a French version of secularism – is a serious matter for the upper and middle classes, and Silva’s religiosity may cost her votes. She has exposed her core weak spot, which the other candidates will exploit in the upcoming debates and electoral campaigns. But popular concerns about corruption run much deeper in the eyes of the Brazilian people. The fact that presidents Dilma and Lula and the PT have become synonymous with misconduct in general, and mismanagement regarding Petrobrás in particular – a scandal involving 40 PT members in a multi-million real scheme – weakens their ability to counterattack amidst Silva’s continuous rise. What we will see in the elections in October is therefore a battle between the PT’s Bolsa Família – one of the most successful social programs in the history of Brazil – and a candidate who theoretically embodies honesty and honor. Whatever the outcome, it seems that PT has met its biggest challenge in 12 years.

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