Argentina: The Downside of Gradualism

Tortoise heads down a dirt path surrounded by greenery

Towards Turtle Path / Maxpixel / Creative Commons

By Arturo C.  Porzecanski*

President Mauricio Macri made a surprise announcement on May 8 that his government would seek financial support from the IMF to enable the country to “avoid a crisis like the ones we have faced before in our history” – essentially, an admission that time may be up for his policy of gradualism in dealing with the legacy of populism.  Sources in his administration expressed confidence that Argentina could obtain some $30 billion in “precautionary” loans at low interest rates and with few strings attached as an alternative to more borrowing in the international capital markets at higher and rising rates.  His finance minister, Nicolás Dujovne, and other members of the economic team departed Buenos Aires for Washington, DC, that same evening to formalize the request at IMF headquarters and to meet with a top Trump administration official at the U.S. Treasury.  After an initial round of friendly conversations, the parties agreed to meet again starting on May 14 to initiate a negotiation process that they acknowledged would take several weeks.

  • Macri blamed downward pressure on the Argentine peso (despite drastic hikes in short-term interest rates and the sale of one-tenth of hard-currency official reserves), on tighter monetary conditions and on volatility abroad at a time when the government must still raise money internationally to finance its large fiscal deficit.  “The problem that we have today is that we are one of the countries in the world that most depends on external finance, as a result of the enormous public spending that we inherited and are restoring order to,” the President stated.
  • The decision to turn to the IMF surprised observers because it came at an unusually early point in the country’s financial cycle.  Argentina’s central bank still has about $55 billion in international reserves, the equivalent of some 10 months of imports, or three times the amount of foreign-currency government debt maturing in 2018.  Also, foreign investors by no means have slammed the door on Argentina’s face, though admittedly the government probably could not sell another 100-year dollar bond like it did last June, raising $2.75 billion from die-hard optimists.  Argentina in the past, like most other countries, has generally turned to the IMF only in desperation once they were unwelcomed by Wall Street and their vaults were almost bare.
  • The onus placed by Macri on deteriorating financial conditions abroad was also surprising.  After all, the U.S. Federal Reserve has barely begun its monetary tightening process: the overnight fed funds rate, currently around 1.7 percent per annum, is still below U.S. inflation of 2.1 percent, so it has yet to enter positive territory.  Moreover, U.S. bond yields now in the vicinity of 3 percent for 10-year Treasuries, are up from 2.3 percent a year ago but have merely bounced back to a level they were at as of end-2013.  And the financial markets’ “fear” index VIX, a measure of expectations implied by options on the S&P 500 index, has fluctuated in the teens, which while higher than last year’s mostly single digits, remains very far from the range of 30 to 80 seen during prior episodes of extreme risk aversion in the financial markets.

 President Macri’s announcement did not have the favorable intended effect on confidence and market behavior, as evidenced by the peso remaining under downward pressure in the three business days that followed.  Despite renewed central bank intervention to boost the currency, it now takes almost 24 pesos to buy a U.S. dollar when it took fewer than 16 pesos to do so a year ago – a loss of about one-third in the currency’s purchasing power.  One reason is that Macri’s blaming adverse developments abroad for his currency’s woes rings hollow with investors, given how very slowly his administration has moved to reduce a fiscal deficit running above 6 percent of GDP since 2015; how much debt (around $100 billion) he has taken on in just a couple of years; and how timid his central bank has been in its attempt to bring down inflation running at about 2 percent per month.  And the other reason is that it quickly became apparent that any loan from the IMF will come with strict conditionality attached, because Argentina’s request was routed to the Fund’s regular, “stand-by” window – and not to its easier-access, precautionary lending window for highly creditworthy borrowers.  The Fund spelled out its economic policy advice for Argentina in its December 2017 “Staff Report for the 2017 Article IV Consultation,” and it calls for a more assertive reduction in the fiscal deficit, especially by cutting government spending, and for supply-side reforms it called “indispensable” to support economic growth, raise labor productivity, attract private investment, and enhance the country’s competitiveness.  These are all recommendations that fly in the face of President Macri’s gradualist approach to defusing the economic minefield left behind by his populist predecessor, Cristina Fernández Kirchner, and will therefore paint his government into a politically fragile corner.  We are witnessing the demise of Macri’s cherished – and popular – gradualism.

 May 14, 2018

*Dr.  Arturo C.  Porzecanski is Distinguished Economist in Residence at American University and Director of the International Economic Relations Program at its School of International Service.

 

U.S.-Mexico: Trump’s Misguided Approach to NAFTA Renegotiation

By Robert A. Blecker*

Three people stand at podiums with flags behind them

Canadian Foreign Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer, and Mexican Minister of Economy Ildefonso Guajardo (L to R) participate in the fourth round of NAFTA negotiations in Washington, DC in October 2017. / State Department / Flickr / Creative Commons

President Trump has characterized NAFTA as a “win” for Mexico and a “loss” for the United States; his administration is currently working on a renegotiated “deal” that would allegedly reduce the U.S. trade deficit and recapture lost manufacturing employment, but his nationalistic approach fails to recognize the fundamental causes of both U.S. and Mexican economic problems.  In fact, NAFTA was a huge success for President George H.W. Bush and his administration, as it achieved their fundamental goal of enabling U.S. corporations to make products in Mexico with low-cost labor – without fear of expropriation, regulation, or other loss of property rights – and export them to the United States duty-free.  The Mexican government went along because it thought NAFTA would bring in desperately needed foreign investment and provide a growth stimulus, while U.S. and Canadian workers rightly feared that they would lose jobs as a result.  While much discussion has focused on which country “won” or “lost” in NAFTA, that is the wrong way to evaluate a trade agreement.  The two key criteria for judging the accord are which sectors, groups, or interests won and lost in each country, and how it, in conjunction with other policies, has affected long-term growth, development, and inequality in each.

  • Under NAFTA, U.S.-Mexican trade in goods and services has grown exponentially, reaching $623 billion (with a U.S. deficit of $69 billion) last year. However, NAFTA (along with other causes and policies) has contributed to worsening inequality in both the United States and Mexico.  Less-skilled U.S. workers definitely lost, with wage losses up to 17 percent in local areas most exposed to NAFTA tariff reductions.  In Mexico, although consumer gains from trade liberalization were widespread, upper-income groups and the northern region benefited the most.  Real wages for Mexican manufacturing workers have stagnated since 1994.  Labor shares of national income have fallen in both countries since the late 1990s.
  • Domestic policies, exchange rates, financial crises, and the impact of China can make the impact of NAFTA difficult to identify, but effects in some sectors are clear. Mexico gained jobs in automobiles and parts, appliances, electrical and electronic equipment, and seasonal produce.  The United States gained in basic grains, soybeans, animal feed, and paper products.  Although about a half million jobs in automobiles and related industries have “moved” to Mexico, total U.S. job losses in manufacturing (5 million since 2000) have been much more affected by China and technology than by Mexico.  What Trump’s nationalistic rhetoric ignores is that U.S. companies capitalized on these dislocations to raise their profit margins and increase their bargaining leverage over workers and governments both within North America and globally.

Trump’s aggressive posture about NAFTA exploits political discontent with these sectoral effects and the overall worsening of inequality, but the U.S. Trade Representative (USTR)’s key demands in the renegotiation appear unlikely to remedy either problem.  USTR Lighthizer is focused on protection for the auto sector, by requiring higher U.S. content (or higher wages for Mexican auto workers), and on changes to dispute resolution procedures that would favor investment in the United States instead of in Mexico.  At best, these measures could bring back a small number of U.S. jobs; at worst, they could make some U.S. industries less competitive (if costs increase).

All of this debate in the United States ignores the fact that NAFTA has been a huge disappointment for Mexico.  Although export industries like automobiles have prospered, the gains to domestic sectors of the Mexican economy have been limited, resulting in sluggish growth (only 2.5 percent per year since 1994, far below the 7.6 percent achieved in East Asia) and leaving millions in poverty while millions more emigrated to the United States.  Of course, other policies and events (including Chinese competition) played into these outcomes, but NAFTA (and related liberalization policies) didn’t turn out to be the panacea for the Mexican economy that then-President Carlos Salinas promised in 1993.  Yet, in the short run the Mexican economy remains highly dependent on foreign investment and exports to the U.S. market, so Trump’s demands for a revised NAFTA and his threats to withdraw are undermining Mexico’s current economic prospects.  Instead of following Trump’s nationalistic approach, the three NAFTA members should focus on making all of North America into a more competitive region with rising living standards for workers in all three countries.  This would start with policies at home, such as public investment in infrastructure, education, and R&D, that could foster industrial growth, along with redistributive measures like higher minimum wages consistent with each country’s economic conditions.

May 11, 2018

* Robert A. Blecker is a Professor of Economics at American University.

Colombia: Is the Peace Process Failing?

By Christian Wlaschütz*

A man stands on the right side of the frame with a large rifle

Members of the FARC in Tumaco, Colombia waiting to be disarmed last January. / Andrés Gómez Tarazona / Flickr / Creative Commons

As Colombia prepares for its presidential elections, the peace process with the FARC is already seriously jeopardized by shortcomings in its implementation —and it stands to worsen considerably.

  • The strong showing in polls of Iván Duque – nominee of Alvaro Uribe’s Centro Democrático (CD), which has consistently opposed the peace agreement – bodes poorly for implementation in the future. Former Vice President Germán Vargas Lleras is polling poorly, but his Cambio Radical’s antagonism toward the peace agreement enjoys support.  Leftist candidate and former Bogotá mayor Gustavo Petro, second in the polls, supports the accord, but he faces a steep uphill battle.  Centrist candidates Sergio Fajardo, former mayor of Medellín and governor of Antioquia, and Humberto de la Calle, chief negotiator with the FARC, have not been able to gain ground.  The polls do not enjoy much credibility but are influencing public perceptions on the peace process and other key policies.
  • The peace talks between the government and the country’s other main guerrilla group, the Ejército de Liberación Nacional (ELN), have been in a limbo since Ecuador withdrew as host and guarantor of the negotiations two weeks ago. Ecuadoran President Lenín Moreno made the announcement apparently in anger over the assassination of two Ecuadoran journalists by FARC “dissidents” (those rejecting the accords) and over the increasing criticism among locals of the worsening security situation in the border region with Colombia.  It was a big blow to Colombian President Santos’s hopes to conclude an agreement with the ELN during his mandate.  The peace talks have been suspended several times in the past due to bombings and kidnappings, but most observers believe it will be very difficult for talks to resume without Ecuador’s facilitation.

A serious challenge to political consensus to push ahead with the peace process is the dramatic decline in security in several Colombian regions, most notably Catatumbo (near the Venezuelan border) and Tumaco (on the Pacific Coast).  As experts had foreseen, the vacuum left by the FARC’s demobilization was quickly filled by the ELN and criminal organizations linked to the drug trade.  In Catatumbo, a hitherto irrelevant force, the “dissidents” of the Ejército Popular de Liberación (that is, those who did not demobilize with EPL in 1991), have taken advantage of the opportunity to conduct a deadly war against the ELN.  According to the weekly Semana, the dissidents may be supported by the Mexican Clan del Golfo cartel that wants control of strategic corridors for the drug trade.  Armed actors are sowing fear by declaring and suspending curfews at random; the state seems completely absent.  In Tumaco, bloody battles between FARC dissidents, other criminal groups, and state security forces are terrorizing the civilian population.  In these and other regions, threats against community leaders and assassinations are increasing.

  • Deficient implementation of reintegration programs for former FARC combatants is a major concern. Most former combatants are in a limbo regarding their judicial, economic, and social situation.  Lessons learned from the demobilization of paramilitary fighters some 14 years ago have not been applied, and lagging reintegration is tempting fighters to join other illegal actors.  The possible extradition of FARC leader Jesús Santrich to the United States on drug-related charges is also undermining demobilized combatants’ confidence that they’ll get a fair deal.  Santrich has started a hunger strike and claims to prefer dying than being extradited.

Most worrying in the long run is the polarization demonstrated by the inappropriate behavior of most of the presidential candidates.  Instead of offering programs to lead the country into a different future, personal attacks and the settling of accounts are at the core of the campaigns so far.  Colombian society’s contract to integrate into national life an unarmed FARC, free to pursue change through peaceful, democratic means, has never been strong.  But a surge in opposition to the peace process and the former guerrillas – led by politicians without a viable alternative policy – could easily translate into irreversible blows for peace and democratic inclusion.  Colombia is at a risky and decisive crossroad.  The possibility to relapse into former times is real.

May 4, 2018

* Christian Wlaschütz is a political scientist, independent mediator, and international consultant who has lived and worked in Colombia, in particular in conflict zones in the fields of transitional justice, reconciliation, and communitarian peace-building.

Colombia’s Elections: With New Comes Old

By Julián Silva*

Two men sit in white chairs during an interview

Iván Duque (left), appears to be the frontrunner in Colombia’s May 27 presidential election. / Casa de América / Flickr / Creative Commons

The first round of Colombia’s presidential election on May 27 has raised the profile of independent voices but does not appear likely to bring significant changes.  Most of the nine candidates represent new political forces, but the strongest are allied with the traditional elites that ruled under Liberal and Conservative banners during most of the 20th century.

  • Since the 1991 Constitution opened space for new competition to the Liberal and Conservative Parties, “independent” groups have shown increasing willingness to take the presidency for themselves. The old clientelistic machines, associated with the land-owning elites and those parties, have lost popularity in the urban-dominated country, and the rejection of the more traditional families seems to have prompted a certain “rebranding” by their heirs.  This year, only the Liberal Party presented a candidate – former minister, vice president, and peace negotiator Humberto De la Calle – but current polls indicate that he is unlikely to reach one of the two spots heading into the second round.  The youngest of the candidates seem to hold the lead: Iván Duque (42 years old) is pulling 38 percent; Gustavo Petro (58) has 29 percent support; Sergio Fajardo (61) has 12.8 percent; German Vargas Lleras (56) has 8.2 percent; and De la Calle (71) has 3.2 percent.

Several ostensibly independent candidates actually have close ties to well-established local and national elites.  Iván Duque, a fairly new figure in the Colombian political landscape, is aggressively supported by former President and current Senator Álvaro Uribe Vélez, who had deep roots in the Liberal Party and Antioquia Department elite before founding Centro Democrático in 2013.  The party is closely tied to land-owning oligarchs, big corporations, and the military, which gives Duque prospects for victory no truly independent candidate could have.  German Vargas Lleras, grandson of former President Alberto Lleras, is running on a new ticket called “Coalición Mejor Vargas Lleras,” which receives support from his old party, Cambio Radical, as well as stalwarts of the Conservative party and his family’s Liberal allies.

  • Several independents deserve the label. Gustavo Petro, a former guerrilla and mayor of Bogotá, occupies a more leftist space on the political spectrum that was usually excluded by the traditional parties during most of the 20th century.  Former Mayor of Medellín and Governor of Antioquia Sergio Fajardo promises to bring an “academic” perspective to the presidency if elected.
  • In addition to airing complaints about the candidates, social media users have been extremely critical of links that most candidates have to the traditional Colombian political class. Provocateurs mix truthful information with fake news to mislead the electorate and, protected by anonymity and authorities’ loose control over the virtual space, even issue threats of violence.  An unidentified projectile shattered a window of the car in which Gustavo Petro was heading to a rally in the city of Cúcuta.  The Matador, a political cartoonist working for El Tiempo, received death threats after he depicted Ivan Duque as a pig in one of his drawings.

With a little more than three weeks until the first round, the table seems to be set for Colombians to choose between leaders with significantly different political bases.  Current polls suggest they will stick with the neoconservative elite that has improved security and driven economic growth during the last few decades but has been tolerant of corruption, inequity, and even violence in some parts of the country.  But support for a different formula that promises to address some of these chronic problems is not inconsequential, even if the new leaders’ effectiveness is still unproven on a national level.  Colombians will also have a chance to decide if social media will be a vehicle for amplifying the old politics of threats and violence – or perhaps channel legitimate popular voices to demand accountability that exposes “fake news” and hate-mongering for what they are.  On that, too, the old practices and characters seem to have the advantage as they pursue a strategy that creates an image of change to ensure that everything remains the same.  The appearance of change in Colombia probably portends more of the same.

May 2, 2018

* Julián Silva is a CLALS Research Fellow, a Ph.D. Candidate in History at Universidad de los Andes, and Professor of International Relations at several Colombian universities.

South America: Is UNASUR Dead?

By Stefano Palestini Céspedes*

Three men sit at a table with microphones and two flags behind them.

President pro tempore of UNASUR, Bolivian Foreign Minister Fernando Huanacuni (middle), held a press conference last week to discuss the suspended participation of six member countries. / UNASUR SG / Flickr / Creative Commons

The decision of UNASUR’s six center-right members to suspend their participation in the group underscores the immense challenges the regional organization faces but may also lead to its effective reform.  In a letter last Friday to the Foreign Minister of Bolivia, current President pro tempore of UNASUR, his colleagues from Argentina, Brazil, Chile, Colombia, Paraguay, and Peru communicated their decision to suspend participation and budget support for UNASUR immediately.  In the past, single governments have unilaterally withdrawn from a regional organization when they considered it was not serving their interests, but a collective – albeit temporary – exit is unprecedented for an international organization in Latin America.  UNASUR now has only six fully participating members.

  • Although considered by some a left wing organization, UNASUR grew out of an idea that can be traced back to Brazilian President Fernando Henrique Cardoso’s first South American Summit in 2000. Institutionalized under the leadership of Presidents Lula da Silva and Hugo Chávez in 2008, UNASUR successfully grouped together Bolivarian, center-left, and center-right governments during its first 10 years of existence.  Under the leadership of Chilean President Michelle Bachelet, it helped avert a presidential crisis in Bolivia in 2008 and mediated in a conflict between Colombia and Ecuador.  Two years later, it adopted a democracy clause that has been applied once, in Paraguay in 2012.  UNASUR agencies such as the South American Defense Council, the South American Health Council, and the Council for Planning and Infrastructure have enjoyed broad participation and delivered regional public goods.

The six dissenting foreign ministers explained in their letter that their decision was motivated by the “need to solve the anarchy (acefalia) of the organization.”  They referred explicitly to the vacancy of the post of Secretary General since January 2017.  In fact, the organization’s requirement that decisions be by consensus perennially complicates decision-making.  The candidate with majority support – Argentine José Octavio Bordón – was vetoed by Venezuela, which the six believe is in violation of the organization’s democratic commitment.  Venezuela is currently suspended from Mercosur; was not invited to the Summit of the Americas in Lima; and has been singled out by a Resolution of the OAS.  As the application of UNASUR’s democracy clause against President Maduro is also blocked by the consensus rule, the six seemingly had few courses of action to exercise their voice.

  • Some observers say the six– all center-right governments – seek to destroy UNASUR because it is supposedly leftist or Bolivarian. However, the dissenters have not initiated formal procedures to withdraw from UNASUR, which would have de facto started its dissolution.  Indeed, there are different stances among the six signatories of the letter, with some in favor of the dissolution and others in favor of overhauling UNASUR.  The prevailing position seems to be to press the remaining countries, mainly Bolivia, Ecuador, and Uruguay, to convince Venezuela to lift its veto of Bordón.

The impasse may provide opportunities to transform UNASUR into a more effective organization.  A first positive indicator has been the political leadership of the Bolivian foreign minister; instead of overreacting to the letter, he has convened all foreign ministers (including the six signatories) to a meeting to solve the impasse.  The Chilean foreign minister and others have urged reform, which in theory could be achieved by introducing a majority-voting mechanism to overcome the sort of deadlocks that hamper the organization.  The risk is obvious:  Bolivia could fail to persuade Maduro to drop his veto, in which case at least a couple of the dissenters would probably withdraw from UNASUR.  Some of these governments have never been enamored with South American multilateralism and believe their interests are best served by cultivating relations with the United States and China bilaterally.  But bilateralism cannot provide regional public goods – such as peace, infrastructure, and economic stability – and hardly ever results in a balanced global economic insertion because it benefits the party in the stronger position.  As several South American countries – including some of the six dissenters – are facing domestic turmoil, breaches of the rule of law, and threats to good governance, a strong regional organization in which all South American states sit as members is more necessary than ever.

April 27, 2018

* Stefano Palestini Céspedes is a former CLALS Research Fellow and Postdoctoral Fellow at the Department of Political and Social Sciences at the Freie Universität Berlin, where he specializes in international organizations and regional governance.

Nicaragua: Approaching an Inflection Point?

By Kenneth M. Coleman*

Protesters burn a large pink metal tree

On Saturday, April 21, 2018, Nicaraguan protesters burned an “Árbol de la Vida” (Tree of Life), one of several monumental statues that are considered representations of President Daniel Ortega’s government. / Jan Martínez Ahrens / Wikimedia / Creative Commons

The street protests that wracked Nicaragua last week may or may not recede after President Daniel Ortega backed off a controversial increase in social security taxes, but the damage to his image of invincibility will linger and could turn out to be a watershed in his and his wife’s grand plan for one-party rule.  Ortega mobilized the police, which have teamed up with young thugs over the years to intimidate those who protest government policies, to repress what started last week as peaceful protests against the increased taxes but evolved into a challenge of the authoritarian nature of the regime.  The government closed four television stations that were covering the street protests; shock troops from his party’s Juventud Sandinista burned down a radio station in León; and journalists faced harassment, one having been killed.  Local press estimates 20-30 deaths, with surely well over a hundred injured.

The street protesters were not alone in their struggle.  The Superior Council of Private Enterprise (COSEP) and American Chamber of Commerce in Nicaragua (AMCHAM) – which for years had become silent accomplices in the efforts of Ortega and his wife, Rosario Murillo, to consolidate their power – called for solidarity with the popular protests.  For the first time in the current Ortega era (2007-2018), they openly called for street marches to resume today.  More importantly, they used hard language – condemning the use of fuerzas de choque by the government – and issued a set of conditions before a “dialogue” with the government can begin.  Specifically, they demanded that students, university communities, and the Bishops Conference of the Catholic Church be included in any dialogue, surrendering their previous role as privileged interlocutor with the government.  (The Catholic Church provided respite and support – both moral and physical – to student protesters.)

Mass movements can start from little sparks and grow into society-wide convulsions.  The outcome of these new confrontations with the Ortega-Murillo government cannot be foreseen at this point, but the parallels with other governments on their last legs are striking.  The use of excessive force by Mexican police in 1968 triggered massive street protests that directly questioned the legitimacy of a seemingly well-established Mexican one-party state – legitimacy that was ultimately resurrected only by opening the system to genuinely democratic competition.  While the process took two decades, it did lead to an opposition victory in the 1990 presidential election.  In Nicaragua, the fall of Anastasio Somoza in 1979 accelerated when the business community eventually abandoned his dictatorship.

  •  Ortega’s party, the Frente Sandinista de Liberación Nacional (FSLN), for many years has been able to isolate, contain, and discredit those abandoning it, including a former Sandinista Vice President and former members of its National Directorate. Grumbling within the party is already growing louder because of a succession plan bringing Rosario Murillo to power upon the illness or death of Ortega in a manner that far exceeds her status as vice president.  Local press reports indicate that one police commander and her unit of 50 officers have been jailed due to their unwillingness to confront and repress protesters in the streets.  The excessive application of force against peaceful protesters last week and, potentially, in coming days might lead to a more serious rupture, making last week’s events a potential inflection point for Nicaragua – with potentially dire consequences for Ortega and Murillo’s political ambitions.

April 23, 2018

* Kenneth M. Coleman is a political scientist at the Association of American Universities who directed the 2014 AmericasBarometer national survey in Nicaragua.

A Summit in Search of the Americas

By Carlos Malamud*

A large round table encompasses a room with various heads of state from the Americas

Last week’s Summit of the Americas in Lima, Peru. / U.S. State Department / Public Domain

The Summit of the Americas in Lima last weekend has left its organizers and principal participants with a bittersweet feeling, leaning to the bitter.  The absence of Donald Trump, Raúl Castro, and Nicolás Maduro reflects only the existing difficulties.  The bigger problems relate to the impossibility of achieving general consensus about the big hemispheric issues, such as corruption or Venezuela, and – of even greater concern – the lack of clarity and substance of the Latin America policy of the United States.

  • The Summits initially were linked to Washington’s efforts to create the Free Trade Area of the Americas (FTAA), but since that project’s failure they have represented the United States’ ongoing interest in Latin America and the Caribbean. That explains why, since the Summit process was created in 1994, no resident of the White House has missed a Summit – regardless of how complicated national and international situations have been.  That was until Donald Trump gave priority to the conflict in Syria over his relationship with Latin American counterparts.

The disturbing thing is not just Trump’s conflict with Mexico, or his hostility toward Cuba and Venezuela.  Neither is the deterioration of the image of the United States in Latin America since President Obama’s term ended.  The fundamental problem is the lack of clear indications from the Trump Administration about its intentions and objectives in the region.  This is the case even with the closest countries.  For example, several South American countries’ exports to the United States could be affected by the trade war between Beijing and Washington.  But no one has clear answers about the policies driving these events, and no one is taking steps to reduce the impact of them or of Washington’s lack of policy.

  • Even though the official theme of the Summit was “Democratic Governance against Corruption,” it was impossible for the participants to go beyond good words and advance any global solutions. Without a doubt, this is good evidence of the weakness of regional integration.  In their Final Declaration, the leaders were unable to include either a condemnation of Venezuela or a call to disregard its Presidential elections on May 20.  Instead, what we got was a statement by the Grupo de Lima plus the United States expressing extreme concern for the situation in Venezuela.  Despite the decline of the Bolivarian project and Maduro’s isolation, Bolivia, Cuba and some Caribbean states dependent for oil on Petrocaribe remain capable of blocking hemispheric consensus.

This probably will not be the last Summit of the Americas, but future of these hemispheric meetings depends in great part on the capacity of the governments in the hemisphere, beginning with the United Sates, to redefine continental relations and find anew the essence of the Americas.  This means more than just responding to the growing Chinese role; it means putting on the table the real problems that affect the continent and going beyond mere rhetoric about them.  For now, with hemispheric relations buffeted by the unpredictable slams issuing in the form of Trump’s tweets, it will be difficult to get there.

April 17, 2018

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid.  A version of this article was originally published in El Heraldo de México.

Brazil: Is Democracy Under Threat?

By Marcio Cunha Filho*

A large group of Brazilians wave the Brazilian flag

A rally supporting former president Luiz Inácio Lula da Silva in October 2017. / Eduardo Figueiredo / Midia NINJA / Flickr / Creative Commons

Brazil’s ongoing political turmoil hit a new peak last weekend – resulting in former President Luiz Inácio Lula da Silva’s decision to turn himself in to be imprisoned – and strongly suggests that the country’s democracy is in deeper trouble than previously thought.  Lula said he was a victim of political persecution by both prosecutors and the courts, including the six Supreme Court justices who ruled that he not be allowed the courtesy of remaining free during his appeals to Brazil’s higher courts on his conviction on corruption charges.

  • Lula’s Worker’s Party (PT) claims that the decision is part of a campaign against leftwing forces that has intensified since Dilma Rousseff’s impeachment in August 2016. Supporters say that Lula’s imprisonment at a time that he is leading in presidential polls is the culmination of a strategy aimed at making sure that the PT – the only party to have won the presidency in elections since 2002 – remains out of power.  Most mainstream media and some rightwing lawyers have argued that Lula’s arrest obeyed all legal procedures, but PT supporters are not alone in their allegation of impropriety.  José Afonso da Silva, one of the most prominent non-partisan constitutional law professors in Brazil, has written a legal opinion against Lula’s imprisonment.  Other experts claim that Lula’s imprisonment order was strangely rushed (jurist Celso Antônio Bandeira de Mello), while others have expressly criticized the Supreme Court for denying Lula Habeas Corpus (Prof. José Geraldo da Silva Júnior).
  • While proof remains elusive, strong circumstantial evidence of conspiracy persists. The lawsuit against Lula was tried much more rapidly by Judge Sérgio Moro than most cases, and the guilty verdict was reaffirmed by the regional court just in time to keep Lula out of the presidential election scheduled for October 7.  Moreover, the accusations against Lula are fragile:  Moro argues that the former president received a $1 million remodeled beach apartment as a bribe from a construction company in exchange for political favors, but there is no evidence that the apartment was Lula’s or that he used it in any way.  Neither is there evidence that the construction firm received any favors.

Other indications that Brazil is experiencing an “open season” against the left are emerging.  Civil society leaders have reported repressive practices against them, including violent protests at their public events.

  • The assassination of a Rio de Janeiro municipal legislator is widely thought to have been carried out by rightwing elements. At a recent political rally, unidentified gunmen shot at Lula’s vehicle.  A wealthy São Paulo night club owner is offering a reward for anyone willing to murder Lula in prison.  Radical and angry political movements such as Movimento Brasil Livre are gaining strength by angrily advocating and celebrating through social media the imprisonment of political opponents.  Congressman Jair Bolsonaro, a former military officer who praises the military dictatorship, has become the new frontrunner in the presidential race.
  • Another troubling sign was a tweet from the Armed Forces – issued the day before the Supreme Court’s judgment against Lula – that it will not tolerate impunity. It has been widely interpreted as the most direct threat to the Court since the end of military dictatorship.
  • Freedom of expression and academic freedom are under pressure as well, according to many observers. Local, state, and federal legislators are trying to ban the teaching of gender issues in public schools, claiming gender issues are a leftwing ideology should not be taught to young children.  At the university level, in Rio Grande do Sul a local congressman filed a complaint to the Public Prosecutor’s Office asking that a course entitled “The 2016 Coup d’état” – referring to the removal of Dilma Rousseff and inauguration of President Michel Temer – be disallowed.

Democracies rarely die as a result of the acts by one or even a small group of political leaders, but rather as the outcome of repressive actors’ manipulation of popular confusion and anxiety about the country’s direction.  Lula may not have been perfect – he was not – but he deserved fair treatment by the government and fair enforcement of the law.  Democracies cannot endure when one group or another uses government institutions, even with significant popular support, to impose its views on others, often violently.  We should not forget that, in its early stages, the military coup in Brazil was supported by the media (at least by the biggest TV network in the country, Rede Globo), by civil society institutions (such as the Ordem dos Advogados do Brasil), as well as by much of the political leadership.  Radicalization, inability to dialogue, and unwillingness to make political compromises are the factors that made Brazil descend in 1964 into two decades of repression.  We might now be slipping down this same path, and witnessing the rebirth of institutionalized and popularly-supported repression and intolerance.

April 10, 2018

* Marcio Cunha Filho is a Ph.D. candidate at the University of Brasília; federal auditor in Brazil’s Office of the Comptroller General; and former CLALS Research Fellow.

Brazil: Will Marielle’s Murder Help Build Consensus on How to Reduce Violence?

By Marcus Rocha*

A woman with a microphone stands in front of a crowd

Marielle Franco campaigning in 2016. / Mídia NINJA / Wikimedia

The murder in March of Marielle Franco – a popular 38-year-old black, gay city councilor in Rio de Janeiro – has stirred outrage across Brazil, but debate over how to increase security has been stifled by political agendas and fake news.  Marielle and her driver were shot dead on March 14 in what press reports characterized as a professional hit job.  Some commentators have speculated it may have been retaliation for her outspoken criticism of the police and military deployments in the cities and favelas.  One of her final posts on Twitter called attention to police violence, citing the case of a young man gunned down by authorities while leaving church.

  • Tens of thousands of mourners took to the streets in Rio and other cities to protest. MC Carol, a black funk singer from favelas near Rio, reflects the popular anger with her immediate hit song entitled “Marielle Franco,” in which she sings:  “You [the system] want to kill us, control us / But you won’t silence us / even bleeding we gonna make it / marching and screaming / I’m Marielle, Claudia, I’m Marisa.”  (Original Portuguese below.)  Claudia and Marisa were women killed during police operations in favelas.

There is no consensus, however, over the meaning of Marielle’s death within a broader agenda of solutions to curb violence in Rio de Janeiro amid an escalation in federal intervention in the state, now entering its second month.  Proponents of President Michel Temer’s push to mobilize the military and other federal assets claim the Councilor’s murder justified the policy.  Opponents argue that Marielle’s assassination and other high-profile murders underscore that the mobilization has not worked, and, indeed, the deaths have fueled widespread skepticism.

  • A poll conducted by Folha de São Paulo newspaper shows these mixed feelings. Seventy-nine percent of interviewees say they support the federal intervention, but 71 percent believe that nothing has changed since it started.  Moreover, 22 percent of people living in affected communities fear the police more than they do drug dealers (16 percent).  Some 15 percent have more fear of milícias– the gangs, which often include former and current police that control much of people’s lives in these communities – and 13 percent of general criminals.  Of those polled, 28 percent say fear all of them equally.  Criminal activities like car theft and robbery have shown no sign of decline.
  • Complicating discussion of Marielle’s murder has been the torrent of fake news about her. Through Facebook pages and Whatsapp messages, far-right groups have spread unsubstantiated allegations that she had links to organized crime.  One Facebook page shows a woman and a man, supposedly Marielle and Marcinho VP, a famous drug dealer, as a couple.  Marco Feliciano, a rightwing preacher turned lawmaker, said during a radio program that Marielle’s death was “just another number” and offered a crude joke.  “They shot a leftist in the head in Rio de Janeiro,” he said.  “It took a week to die because the bullet didn’t find the brain.”  Brazilian justice directed Facebook and YouTube to remove some of the offensive profiles and videos, but fake news is still being shared through social networks.

President Temer’s official announcement that he intends to run for reelection in October deepens the political dimension of his militarized solution to the violence problem.  The federal intervention in Rio de Janeiro has become a key issue on his agenda, but the lack of results is undermining his efforts to shore up his historically low, single-digit approval ratings.  Investigations into Marielle’s murder haven’t identified any suspects yet, and there’s no discussion about changes to security laws or any other measure other than putting more army troops in the streets.  Despite the general outrage, the window for change opened after Marielle’s murder is closing fast.  The Brazilian political system is looking straight to general elections in October, and the speed and depth of the politicization of the assassination, aggravated by fake news, suggest prospects for serious discussion are nil.

[Excerpt from MC Carol’s “Marielle Franco”]

Vocês querem nos matar, nos controlar
Vocês não vão nos calar
Mesmo sangrando a gente vai tá lá
Pra marchar e gritar
Eu sou Marielle, Cláudia, eu sou Marisa

April 5, 2018

*Marcus Rocha is a CLALS Research Fellow.

“New Transnationalisms” in Latin American Cinemas

By Dolores Tierney*

Guillermo del Toro speaks on a panel

Mexican director Guillermo del Toro, who won the Oscar for Best Director last month. / Gage Skidmore / Flickr / Creative Commons

When Mexican film director Guillermo del Toro won the Oscar for Best Director for The Shape of Water last month, it was another example of the “new transnationalism” of contemporary Latin American cinemas.  Working across cultures while preserving his Mexican creative identity, del Toro follows in the footsteps of his compatriots, Alejandro González Iñárritu (Best Director for Birdman in 2014 and The Revenant in 2015) and Alfonso Cuarón (Best Director for Gravity, 2013).  An examination in my recent book of these and three other Latin American directors – Brazilians Walter Salles and Fernando Meirelles, and Argentine Juan José Campanella – finds that their work is part of a broader shift toward transnational filmmaking: films made in one country produced with capital, creative input, or paradigms borrowed from another, and actors and directors making films in nations other than their own.

  • To a certain extent, Latin American filmmaking has always involved the use of personnel, equipment, and cinematographic styles from Europe and the United States. This comingling has become more radical, however, since the early 1990s, when neoliberal policies in the three major filmmaking nations – Mexico, Brazil, and Argentina – in particular led to a withdrawal of government financial support for the industry.  State-owned film infrastructures, including film institutes, distribution companies, and theater chains, were dismantled.  Production numbers fell from close to 100 annually in each country to less than ten, and Hollywood films increasingly dominated box offices.  In Mexico, government patronage still contributed to Cuarón and del Toro’s first features, respectively Sólo con tu pareja (1991) and Cronos (1993), but large numbers of directors, cinematographers, and actors left to look for work in the United States film industry.

At the turn of the century, however, production shifted toward a new model of transnational production.  Mexican cinema experienced a box office and critical renaissance because deregulation of movie ticket prices encouraged investment in new U.S.-style multiplex theatres situated in upscale shopping malls and neighborhoods.  Among the hits were Amores perros; Y tu mamá también; El crimen del padre Amaro; and Sexo, pudor y lágrimas.  The new multiplex-goers welcomed a range of Hollywood-derived genre films (romantic comedies, teen films), narratives, and practices (tie-in soundtracks) that reflected Mexicans’ own evolving tastes – finding common ground between Mexican and U.S. culture even if, quantitatively, “Hollywood” films still dominated.  In the same general time period, moreover, Mexican state support shifted toward a new model of privately and transnationally financed filmmaking that includes funds from European countries, other Latin American countries, and the United States.  Iñárritu, Cuarón and del Toro straddled two markets and two cultures, and excelled in both.

  • A similar evolution took place in Argentina and Brazil, with state withdrawal in the early 1990s and then a push to filmmaking in a reformed model of co-production in more recent years. Brazil and Argentina’s most successful domestic films are made with a combination of funds from the state (or state-owned businesses such as Petrobras) and private companies working with foreign partners, such as the Spanish Telefe and U.S.-based Disney affiliate Miravista (in Argentina), and a consortium of foreign firms partnered with Globo in Brazil.

Latin American film critics often lament that the region’s transnationalized cinemas borrow too much from the aesthetic models of the north – the genre templates of the crime film, melodrama, and romantic comedy among others.  But closer analysis shows that, while such artistic appropriation and the international co-producers’ distribution muscle are important, the films’ success also depends on their strong elements of “local exceptionality.”  Transnationally funded artists whose films circulate successfully in Europe and North America have leverage to tackle important sociopolitical aspects of their respective national histories.  Argentine director Lucrecia Martel (La ciénaga, La niña santa, La mujer sin cabeza, Zama) and Peruvian Claudia Llosa (Madeinusa, La teta asustada) are able to get around funding bodies’ prescriptive demands to make films that challenge stereotypes of developing nations.  In his recent Oscar-winning film, The Shape of Water, del Toro has made an English-language adult fairy tale with nods to science fiction, spy thrillers, and the musical, but it is much more than a product of U.S. industry.  It is a transnational film that reflects what del Toro refers to as the contradictions of his Mexican identity – a mixing of the “dark” and the “good” – and explores how Latin American and Latinness function in the U.S. political and racial imaginary.  His transnational film doesn’t diminish his Mexican voice; it enhances it.

 April 2, 2018

* Dolores Tierney is Senior Lecturer in Film Studies at the University of Sussex and former CLALS Fellow.  Her book, New Transnationalisms in Contemporary Latin American Cinemas, was published by Edinburgh University Press last month.