Costa Rica: Public Finance Plans are Not Sustainable

By ICEFI and CLALS*

President of Costa Rica Carlos Alvarado Quesada

Carlos Alvarado Quesada, President of Costa Rica, April 2018/ Wikimedia Commons/ Public Domain/ https://es.wikipedia.org/wiki/Archivo:Carlos_Alvarado_Quesada_CAQ_PAC_03.jpg

The Costa Rican government’s draft budget for 2020, presented to the Legislative Assembly on August 30, reveals that shortfalls in tax revenues, high deficits, and accelerated public debt endangers the country’s ability to continue its social services and maintain its traditional level of democratic governability. The fiscal reforms that Costa Rica has undertaken – Law 9635 on Strengthening Public Finances – have proven, at best, insufficient to correct the imbalances envisioned in the new budget.

  • The budget proposes a tax burden of 13.2 percent for 2020 – equal to that observed in 2018 before the tax reforms were implemented but below ICEFI’s estimate for the end of 2019 (13.5 percent). This rollback is alarming because it essentially erases the gains expected from the reforms. It is due to increased levels of tax evasion and under-reporting, and illicit capital flows.
  • The government projects public spending to reach 8,475.5 billion Colones (US$14.0 billion), accounting for 22 percent of GDP – slightly below the 22.1 percent approved for this year but higher than ICEFI’s estimate for the end of 2019 (20.9 percent). The 2020 proposal implies cuts to public spending that will affect key ministries, including Education and Public Works and Transportation, the budgets of which will decline 1.4 and 0.4 percent from this year, respectively.

Costa Rica’s fiscal deficit poses another long-term challenge. The draft budget contemplates a deficit that would reach 7.8 percent of GDP, higher than ICEFI’s estimate of 6.1 percent for 2019. For Costa Rica’s fragile public finances, this would suggest an inability to achieve fiscal sustainability in the medium term despite the recent tax reform.

  • The proposed budget would grow national debt to 64.7 percent of GDP in 2020, which is double the debt level observed during the earlier years of the decade (29.9 percent).

The failure of the tax reform law underscores Costa Rica’s urgent need for a fiscal accord that responds to the challenges of economic growth, social development, and democratic governance. To avoid such a scenario, tax officials will have to devise and implement plans and strategies next year that will stop and reverse the steady loss of the Executive’s ability to collect taxes. The cuts to education, public works, and transportation could erode Costa Rican well-being. Public budgets reflect the priorities of a society, and both the Executive and Legislative authorities in San José have the obligation to expand debate to include input from affected sectors. Costa Rica will face even greater challenges if it fails to formulate a budget that includes a responsibly progressive tax regime; reduction in tax evasion and under-reporting; greater control over illicit capital flows, adoption of a principle of worldwide income; increase fiscal transparency and accountability, debt restructuring, and maintenance of spending levels that guarantee adequate universal services. 

November 18, 2019

* The Instituto Centroamericano de Estudios Fiscales conducts in-depth research and analysis on the region’s economies. This is the first in a series of summaries of its analyses on Central American countries.

The OAS and the Crises in Bolivia and Chile: Power Politics and Inconsistencies

By Stefano Palestini Céspedes*

Protests in Chile, October 2019

Protests in Chile, October 2019/ Carlos Figueroa/ Wikimedia Commons/ https://es.wikipedia.org/wiki/Archivo:Protestas_en_Chile_20191022_07.jpg

As political crises emerge one after the other in Latin America, the Organization of American States (OAS) is showing inconsistent behavior based on ideological rifts and power politics. This inconsistency – evidenced by the OAS’s role in the ongoing crises in Bolivia and Chile – undermines its mandate to protect human rights and democracy throughout the hemisphere.

In Bolivia, violence spread in the streets of various states after the opposition accused incumbent President Morales of manipulating the results of the October 20 elections. The OAS Electoral Mission reported possible irregularities, and both the Permanent Council and the Secretary General pressed the government to authorize an audit of the electoral procedures and a vote recount. Morales consented to both requests.

  • The same accusations of electoral irregularities were made two years ago in the Honduran presidential election, but a coalition of states headed by the United States swiftly recognized President Hernández – delegitimizing the OAS electoral mission and the Secretary General’s call for new elections. Those same countries have now pressed Morales, first for a recount of votes and later for new elections. When the OAS Electoral Mission confirmed the existence of electoral irregularities on November 10, the Bolivian military withdrew support for the government, prompting Morales’s resignation – an outcome radically different from that in Honduras.
  • Despite political violence and recurrent accusations by Morales of unconstitutional alterations to the constitutional order voiced by the Bolivian foreign minister at the OAS headquarters, neither the Secretary General nor OAS member states invoked the Inter-American Democratic Charter. President Morales did not explicitly invoke the Charter, thinking that the crisis would follow the same course as in Honduras, or that the military remained supportive. Either way, he was wrong.

In Chile, in contrast, the police have engaged in systematic violations of human rights since an unprecedented social uprising that started on October 18. Twenty-three people have been killed, 1,950 have been injured, and 180 have suffered eye injuries from rubber bullets fired upon protesters by police – many losing their sight. The Inter- American Commission on Human Rights issued a declaration regarding the violations of human rights during the State of Emergency imposed by President Sebastián Piñera in the aftermath of the uprising. But the OAS political bodies have remained silent.

  • Neither Secretary General Almagro nor the Permanent Council have issued a single declaration of concern or condemnation regarding the situation in Chile. Almagro has refrained from convening the Permanent Council or the General Assembly, but he has loudly claimed the existence of destabilization attempts organized by Cuba and Venezuela (which he called “Bolivarian breezes”). To be sure, issuing such a statement without providing evidence or convening the political bodies of the organization jeopardizes the credibility of the OAS and breeds conspiracy theories. In a recent interview, President Piñera also subscribed to the thesis of foreign intervention in Chile’s protests without providing any evidence. The Chilean Attorney General confirmed that the government has not provided any information about the action of foreign groups.

The inconsistency displayed by the OAS in the handling of the political crises in the region suggests that the OAS applies different standards to similar situations. In fact, the organization is split into two coalitions: a larger and stronger one composed of right-wing governments that embrace or accept the foreign policy of U.S. President Donald Trump based on a revival of the Monroe Doctrine; and a smaller, weaker one composed of states with leftist and centrist governments with an anti-imperialist or a non-interventionist rhetoric.

  • Breaches of democracy and human rights violations exist on both sides of the rift, but the OAS political bodies seem to focus only on the side that happens to be weaker. This is bad news for those that would like to see in the OAS an honest broker and mediator in political crises, no matter the ideological color or the power of the concerned state. If this trend continues, it is also bad news for the protection of human rights and democracy and for multilateralism in the region.

November 11, 2019

* Stefano Palestini Céspedes is an assistant professor at the Institute of Political Science, Catholic University of Chile.

Latin America: Total Chaos?

By Carlos Malamud*

47389747662_9be46749b5_z

South American Presidents waving to the cameras in Santiago, Chile / Flickr / Creative Commons

Democracy and democratic values are in crisis throughout South and Central America, but the causes – and solutions – vary across the region, with rays of hope that at least some countries will find their way forward. The Bolivian elections, plagued by suspicions of fraud, reflect some of the problems that affect all of Latin America. The previously unbeaten President Evo Morales, in government since 2006, has now shown his limits and, even if his election is confirmed, will govern without the parliamentary majorities he enjoyed in the past.

  • Latin America witnessed violent protests almost simultaneously in Ecuador and Chile; Mexico blinked during a confrontation with the son of narcotics kingpin Chapo Guzmán; the Congress was dissolved in Peru; an ex-President in the Dominican Republic denounced as fraudulent the primary election he lost and joined another party to be its candidate; and a massive exodus continued pouring out of Venezuela, whose crisis is terminal but without an expiration date.
  • The Argentine and Uruguayan elections on October 27 marked the end of a three-year cycle of elections during which 14 countries voted to elect or re-elect their presidents. Speculation was originally that a swing to the right would counteract the Bolivarianism of the previous swing to the left. That shift never happened. In its place, a more heterogeneous and divided Latin America emerged, reflected in the outcome of the Argentine and Uruguayan elections, and in the not-insignificant fact that Mexico is governed by Andrés Manuel López Obrador while Brazil, the other regional power, has Jair Bolsonaro.

The causes of this wave of divisiveness are the subject of different theories. Many observers speak of a Castro-Chavista conspiracy, orchestrated by Venezuelan President Nicolás Maduro and the leftist São Paulo Forum. Others think it’s a popular reaction to the drastic adjustment programs of the IMF. Yet others argue about a contagion factor and the impact of social networks, which enable real-time communication and the transfer of vivid images of events. Nonetheless, any theory that tries to harness all of these theories will be flawed because each national reality is responding to different logic and dynamics.

  • All of the countries of the region are experiencing inequality, poverty, corruption, violence and narco-trafficking, unhappiness with democracy and its institutions, rejection of politicians, and the impact of the “new politics” of social media and fake news. But they are not present to the same proportions.
  • Neoliberal, Bolivarian, and populist governments are all suffering from rebellions. The Chilean protests over transportation fees under neoliberal President Piñera were preceded by protests in Brazil in 2013 under progressive President Dilma Rousseff. If Piñera resorts to military force to stop the protests, Nicaraguan President Daniel Ortega did something similar in 2018, killing more than 300. The IMF might have been behind the reduction of fuel subsidies in Ecuador, but it had no role in Chile. While elections went as normal in Argentina and Uruguay, in Bolivia, like in Venezuela, the allegations of fraud have been constant.

The solutions to each country’s challenges will have to be as different as their causes. While one country needs deeper economic adjustment, another needs to fix its political institutions. Each is going to have to find its way through the crises. Latin America will find little solace, moreover, in the fact that this high level of conflict is not exclusive to its region. From Hong Kong to Cataluña, or in Libya and Lebanon, similar challenges are disrupting national life.

  • Amid the many indications that representative or liberal democracy is under direct attack – that we may be facing the end of an era with potentially dire implications – some positive notes are visible in Latin America. In addition to the orderly contests in Argentina and Uruguay, the local and regional elections in Colombia in late October were an effective exercise in democracy – won by the center and lost by the extremes. Uribismo on the right and Gustavo Petro on the left were the big losers. The emerging symbol was Claudia López, the first woman elected mayor of Bogotá, who is also a lesbian, environmentalist, and leader against corruption. The path ahead is certainly not going to be easy for Latin America, but there is evidence that, with a big dose of tolerance and respect for each other’s reality, Latin Americans can do a lot better.

November 5, 2019

* 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 originally was published as Turbulencias latinoamericanas in El Clarín of Buenos Aires.

 

Latin America: Grappling with Environmental Displacement

The Honduran refugee caravan crowds a bridge in October 2018

Honduran Refugee Caravan/ October 21, 2018/ Flickr/ Creative Commons/ https://www.flickr.com/photos/boyitchy/31600503428/

By Robert Albro*

Latin America and its faith-based organizations, seeking to expand the definition of refugee beyond just people forced to leave their countries in the face of political persecution, are making slow but steady progress promoting policies that deal with the increasingly serious issue of human displacement as a consequence of environmental change.

  • Since 1951, a large majority of Latin American countries have enshrined the right to asylum in their national constitutions, and the region emerged in the 1980s as a leader in efforts to broaden international standards for refugees and migrants. In 1984, the Cartagena Declaration on Refugees, for example, enlarged the concept of refugees to include people “who have fled their country because their lives, safety, or freedom have been threatened by generalized violence.” A series of conferences organized by the UN High Commissioner for Refugees (UNHCR) produced further breakthroughs during conferences in San José and San Salvador, including rights-based criteria involving, for example, gender and indigenous identity.

Over this decade, the coincidence of surges in migration from the “Northern Triangle” of Central America and international action on the environment – including Pope Francis’s 2015 encyclical on climate change, Laudato Si – have encouraged reassessment of the traditional distinction between “refugee” and “migrant.” Among similar initiatives in the Andean region, in 2014 Bolivia’s migration law introduced legal protections for “groups of people displaced from one country to another for climate reasons, when there exists a risk to life, as a result of nature, environmental, nuclear or chemical disaster, or famine.” What to do about people displaced across international borders as a result of life-threatening rapid-onset natural disasters has become an increasing focus of attention.

  • Discussions in conjunction with the Framework Convention on Climate Change (UNFCCC) – a major component of the 2016 Paris Accord – have given new momentum to addressing environmental migration. Participants called for greater understanding of “climate change induced displacement, migration, and planned relocation,” even though emphasis in multilateral deliberations has shifted to “disasters” and away from “climate change.” 
  • Observers have credited Latin American church groups – as “specialists in the language of ethics” and “sources of moral authority” – with playing an important role in normative deliberations during the UNFCCC processes. A hemispheric dialogue led by the Organization of American States, called the “Protecting Our Home” initiative, was jointly launched with the Holy See after the Pope’s encyclical.

Faith-based responses both to environmental conflict and to the plight of migrants have been significant. Religion’s impact upon international deliberations regarding environmental migration is likely to continue growing as long as religious values are translatable to secular humanitarian efforts. Even when members of religious communities are lumped in with the rest of “civil society,” their emphasis on moral values, their ability to intervene on behalf of affected populations, and their role as service providers serve them well as proponents of efforts to include victims of environmental disaster and climate change as deserving recognition and support from governments and the international community. The “moral authority of faith leaders” is also less about the introduction of alternative moral valuations than a strategic advantage in efforts to gain access to and build trust with victims of humanitarian emergencies. 

  • There is, however, an additional role that faith-based actors have yet to embrace as the international response to increasing numbers of environmental migrants evolves. As multilateral deliberations increasingly consider “loss and damage” as a result of environmental disasters, including climate change, they are unsurprisingly limited to accounting for the loss of livelihoods and material assets, such as farms or homes. To date, little attention has been given to the consequences of non-economic or intangible loss, including loss of community identity, social cohesion, and traditional knowledge. Religion’s focus on moral and cultural questions of meaning and value make it a potential resource in coming to terms with the consequences of intangible loss. 

November 1, 2019

* Robert Albro is the Research Associate Professor at CLALS.

Latin America: Freelance Journalists are Essential but Vulnerable

By Bill Gentile*

Bill on patrol with the Sandinista Army in the northern mountains of Nicaragua in the 1980s.

Gentile on patrol with the Sandinista Army in the 1980s/ Backpack journalism – copyright Bill Gentile

Freelance journalists are at the center of covering many of the most important news stories in Latin America but face increasing threats to their security and well-being. Tough economic realities and competition from the internet have forced most traditional U.S. and European media to close their bureaus across the region since the 1980s. Whereas maintaining a bureau may have cost $250,000 a year (and double that for a TV production team), these companies can now get reporting from freelancers for a small fraction of that cost. Consumers of news in and outside Latin America have become steadily more dependent on unaffiliated journalists for information on key developments.

  • Prize-winning journalist Jason Motlagh, for example, is a freelancer who has done groundbreaking stories on gang activities in El Salvador, even accompanying specialists exhuming the bodies of murder victims whose families yearn to give them proper burial. Independent reporter Frank Smyth has covered violence in Central America, and in Colombia he uncovered that U.S. counter-narcotics aid was being diverted to death squads run by Colombian military intelligence. Ioan Grillo has explored tunnels under the U.S.-Mexico border through which drugs and humans are smuggled. Stories such as these are rarely, if ever, reported by the “legacy media” that used to have full-time staffers in the region.

Although news consumers outside Latin America depend on them for ground truth, the freelancers lack the infrastructure and protections of their brethren in staff media positions. They hire local “fixers” to navigate complex places and gain situational awareness, but they depend mostly on their wits – and luck – to survive. Many report feeling exploited.

  • Security is their top concern. Criminal groups target any reporter looking into their activities, and freelancers – who often have the depth, language, and ideals to cover them aggressively – pose a particular threat. When journalists working as staff for traditional media have been kidnapped, their companies have helped get them released – something that freelancers can only dream of. Protection from governments is important too. The Committee to Protect Journalists has reported that 75 of the 251 journalists arrested for their work in 2018 were freelancers.
  • Some companies’ tendency to pay late, or never, is another problem. Even journalists with strong track records report having been assigned stories, submitting them on time, and then waiting months for payment. Overdue fees of up to $60,000 are not unheard of. Because of declining budgets, even excellent reporters working for serious news outlets have been forced to change careers.

Despite these trying conditions, freelancers still do solid journalism that supports the interests of the countries in which they work and the international community. But fairness dictates that the media who use them and the consumers of their news, including Latin America watchers like us, support ways to better protect them and their jobs. Some organizations, such as the Pulitzer Center on Crisis Reporting, provide assistance to reporters. The London-based organization ACOS Alliance is trying to “embed a culture of safety” throughout the industry. Its “Freelance Journalists Safety Principles” have been endorsed by nearly 100 news organizations, but the code lacks an enforcement mechanism. Some freelancers have proposed forming a trade union, but the mechanisms for binding media to contracts will be difficult to establish. The elements of a solution are not beyond reach, however. The staff foreign correspondent, representing a powerful media organization in North America or Europe, may be a dying breed, but the truth that they seek to report is not.

October 29, 2019

*Bill Gentile, a veteran news reporter, teaches journalism at American University. His video series, FREELANCERS with Bill Gentile, is available on multiple platforms including iTunes, Amazon, Video On Demand and Google Play.

Chile: Can Piñera Contain Popular Rage Against Liberal Capitalism?

By Irina Domurath and Stefano Palestini Céspedes*

Protesters in Chile

Protesters in Chile/ Photo by the Authors

Chilean President Piñera’s declaration of a state of emergency and public statements last weekend suggest he is prepared to suppress demonstrations rather than deal with social and political demands. On Saturday, the center-right president also delegated control of public order to Army Commander General Iturriaga and declared nighttime curfews. What started as citizen disobedience – groups of students entering the subway without paying – quickly developed into a massive, albeit uncoordinated, mobilization. Protesters destroyed several subway stations, forcing closure of the transport system that 2.8 million people rely on daily. Despite the government controls, protests spread to other Chilean cities on Sunday, reaching a scale unseen since the end of the military regime.

While the immediate trigger of the protests was an increase in subway prices, underlying the unrest is a deep social discontent over the results of decades of neoliberal policies. Most of them were implemented during the Pinochet era and largely preserved by successor democratic governments. While they were successful in reducing extreme poverty, they have also led to high levels of socioeconomic inequality.

  • The private pension system has yielded huge market revenues instead of dignified pensions; the health sector is split into an underfunded public system and a privatized system that discriminates against women and the elderly; the public education system fails to deliver social mobility; and the public transport system has not helped to overcome extreme socio-geographic segregation in the capital and beyond. Consumer markets are rigged by anti-competitive practices and collusion. The oligarchic political elite sees social policy not as a matter of citizen rights, but as a matter of charity. Parliamentarians refuse to discuss their salaries, which amount to 33 times the minimum wage. Trust in the police and the military has plummeted due to scandals of corruption and abuse of power.

Although some of the protesters targeted symbols of neoliberalism, the government’s response has reflected a lack of awareness of these underlying issues – or, worse, is trying to lay blame on individual vandals. In a televised address from Army headquarters on Sunday night, Piñera sounded a dark note: “We are at war against a powerful enemy, who is willing to use violence without any limits.” Suggesting he does not distinguish between social protesters and groups of vandals, he said, “We are ready to do everything to not fall into populism.” Piñera had previously shown a tin ear on Friday night, when shortly after eating at a high-class restaurant, he admonished citizens for evading subway fares. His remarks fueled social discontent coming just days after two businessmen were sentenced to take ethics classes as “punishment” for involvement in tax-evasion schemes and irregular payments to political allies of Piñera’s coalition.

The Piñera government is addressing the crisis as it has done it before with the student movement and the Mapuche conflict over indigenous lands in the south: treating what are indeed political issues and social discontent as a security threat. The president is playing deaf to the legitimate social and political demands of Chilean citizens, undermining the government’s credibility as a political interlocutor while also fueling an escalation of violence.

  • Chile now joins Argentina, Ecuador, Peru, and others in facing serious pressure to deal with an array of problems that incumbent governments have failed to address – reminiscent of the social mobilizations in Brazil in 2013 that culminated in impeachment and the rise of a reactionary president, Jair Bolsonaro, whose commitment to democracy is seen by many as questionable at the very least. In this context, the Chilean political elite has a huge responsibility to avoid a breakdown of democracy and the rule of law. The government cannot ignore popular desires for a plan to overhaul the neoliberal Chilean model – and it would be wise not to cast opposing views as a security threat.

* Irina Domurath is a legal researcher at the School of Governance, Catholic University of Chile and external fellow at the University of Amsterdam, and Stefano Palestini Céspedes is an assistant professor at the Institute of Political Science, Catholic University of Chile.

 

 

Hurricane Dorian: Silver Lining for Caribbean Unity?

By Wazim Mowla*

Men loading supplies onto a helicopter

CBP AMO agents deliver food and water to severely damaged Fox Town on the Abaco Islands in the Bahamas, in the aftermath of Hurricane Dorian Sept. 6 2019 / Wikimedia / Public domain / https://commons.wikimedia.org/wiki/File:CBP_Food_and_Water_Delivery_to_Bahamas_after_Hurricane_Dorian_(48693139732).jpg

Hurricane Dorian, which lashed the Bahamas for 68 hours in early September, revealed the severe limitations on Caribbean countries’ ability to  respond to increasingly brutal storms – an awareness that appears likely to contribute to greater regional cooperation.  Wind gusts of 220 mph, up to 15 inches of rain, and storm surges 23 feet above sea level caused more than 50 deaths, and 600 people are still missing a month later. Although the Bahamas opened 14 of its main islands for tourism soon after the storm, the economy has suffered major setbacks.  An estimated 80 percent of the fishery infrastructure is damaged in Grand Bahama, and close to 100 percent on Abaco Island. The country also suffered a large oil spill – more than 5 million gallons.

  • Dorian’s destruction is not without precedent in the Caribbean. Hurricanes Maria and Irma two years prior caused a combined total of $140 billion in damages and killed more than 3,000 people. While hurricanes have always afflicted the region, warm ocean temperatures in the Atlantic – raised by greenhouse gases trapped in the water – have made them more likely to develop into a category 4 or 5.

Caribbean countries were quick to respond to the Bahamas’ needs both individually and through the Caribbean Community’s (CARICOM) institutions. Individually, the national governments provided $1.7 million for recovery efforts and medical supplies. Some also sent soldiers, officers, and personnel to the Bahamas, including 100 soldiers from the Trinidad and Tobago Defense Force and 120 members from the Jamaica Defense Force. Others placed police officers on standby Bahamian internal security needed them and sent small teams of technicians to help restore water, medical, and phone systems.

  • As a regional collective, CARICOM also provided assistance. The Regional Security System, based in Barbados, dispatched more than 30 officers to the Bahamas; the Caribbean Development Bank issued $200,000 for relief aid with a $750,000 loan soon to come; and the Caribbean Disaster Emergency Management Agency (CDEMA) coordinated relief updates and logistics. The University of the West Indies has provided psychological, family, and social support and medical assistance to victims and evacuees.

These actions, however, fall far short of the Bahamas’ needs. Karen Clark & Company’s risk modeler estimates that the country will face close to $7 billion in damages alongside the already high volume of missing persons. On its own, the region does not have the capacity or the financial capabilities to assist more than it currently has. For example, the Caribbean Development Bank’s total of $1 million is already matched or dwarfed by countries outside the Caribbean. India provided $1 million to the Bahamas after Dorian (separate from a $150 million line of credit, announced at an India-CARICOM summit Prime Minister Modi held in New York last month, for cooperation programs to combat climate change).  USAID and the Department of Defense have pledged a combined $34 million. Relief efforts are further stunted because countries in the Caribbean have relatively small populations and limited economies, so they cannot expend large sums of resources or personnel to the Bahamas.

Dorian has overall benefited regional unity and cooperation, even though some neighbors have criticized Nassau’s decision to forcibly repatriate Haitian migrants living in camps destroyed by the storm. In addition to expressing solidarity and providing assistance, CARICOM countries appear to be moving toward a consensus about the implications of climate change for their region, possibly creating a new, almost existential area of cooperation among them, including a strengthening of decades-old – and under-utilized – mechanisms such as the Regional Security System (RSS). At the moment, only seven of the fifteen full member-states in CARICOM have signed the RSS agreement. CARICOM alone isn’t going to sway international opinion on the urgency for combatting climate change, but greater unity among its members will certainly help. Hurricane Dorian will not be the last strong storm to devastate the region.

October 21, 2019

* Wazim Mowla is an MA candidate in the School of International Service and Research Assistant at the William J. Perry Center for Hemispheric Defense Studies.

Ecuador: President Moreno’s Pyrrhic Victory

By John Polga-Hecimovich*

President Lenín Moreno greets an indigenous leader on September 12, 2019.

President Lenín Moreno greets an indigenous leader on September 12, 2019/ Asemblea Nacional del Ecuador/ Flickr/ Creative Commons

Ecuadorean President Lenín Moreno’s agreement with opponents to rescind the austerity measures that sparked the recent crisis has restored calm but leaves his government irreparably weakened. The immediate trigger of the crisis was the president’s announcement on October 1 of a package of austerity measures aimed at reducing the fiscal deficit as part of his government’s $4.2 billion credit agreement with the International Monetary Fund. The key measure was elimination of a $1.3 billion gasoline subsidy expected to result in a 25-75 percent increase in the price of gasoline. Transport unions, student groups, and thousands of members of the country’s largest indigenous organization, the Confederación de Nacionalidades Indígenas del Ecuador (CONAIE), took to the streets, paralyzing roads around the country and demanding Moreno step down.

  • Moreno declared a 60-day state of siege, temporarily suspended the right to freedom of association; and on October 7, flanked by the military high command, said he would not back down against what he called a “destabilization plan” orchestrated by his predecessor, Rafael Correa, and Venezuelan President Nicolás Maduro. Perhaps cognizant that a combination of social pressure and legislative and military action removed all three of Ecuador’s democratically elected presidents from 1996 to 2006, Moreno temporarily moved the seat of government from Quito to Guayaquil and imposed a curfew in Quito.
  • CONAIE President Jaime Vargas and other indigenous leaders, encouraged by the United Nations and the Catholic Church, agreed to direct negotiations on October 12. Two days later, the president signed a decree rescinding the austerity measures and reinstating fuel subsidies, and CONAIE decamped. Moreno removed the head of the military Joint Command and the commander of the army, and on October 15 returned to Quito. (He has so far resisted calls to replace Interior Minister María Paula Romo, a possible 2021 presidential aspirant, and Defense Minister Oswaldo Jarrín.)

The crisis has deeply altered prospects for the Moreno presidency.

  • Moreno survived a degree of social protest and political resistance that toppled previous presidents, but he failed to anticipate the popular reaction to lifting energy subsidies, employed a heavy-handed response to protestors, and ultimately backed away from one of the few significant political decisions his government has made. As a result, Moreno lost an opportunity to make structural economic changes and suffered irreparable damage to his political capital and credibility.
  • Indigenous groups and a resurgent CONAIE – after largely disappearing from national political decision-making under Correa – are once again a key national political actor and informal public policy veto player. They not only forced Moreno and the government to reverse course on energy subsidies, but also literally and figuratively earned a seat at the negotiating table. CONAIE appears more unified than it has been at any moment since the early 2000s and may be emboldened to seek further concessions from the government.
  • Correísmo may well be the biggest political loser. Moreno remains in power despite calls from ex-President Correa and his Revolución Ciudadana party to debate the possibility of impeachment and early elections. Correístas were excluded from discussions over the executive decree that restored the gas subsidies. Moreover, CONAIE tweeted a stinging rebuke of Correa, accusing him of opportunism and holding him responsible for the deaths of three indigenous leaders under his government.

Moreno is a lame duck just a little over halfway through his presidency. It is difficult to imagine any policymaking of consequence in his remaining 18 months in office. The government is severely handicapped politically and economically, and the political space for negotiation until elections is almost nonexistent. Moreno’s government is likely to resemble the interim governments of Fabián Alarcón (1997-1998) or Alfredo Palacio (2005-2007), which essentially served as placeholder administrations without ambitious policy agendas. Against all odds, Moreno – with a legislative minority – neutralized Correa and shifted government policy to the right during his first two-plus years in office, which throws his failure to remove the subsidy into sharper relief.

  • Economically, the picture is not much different. The protests forced Moreno to kick the can down the road on energy subsidies, while making it more difficult for the government to close its fiscal deficit. The weight of these necessary reforms will therefore fall to whoever wins the 2021 elections. The failed implementation of this economic reform and subsequent reversal of policy show the limits of Moreno’s political acumen while laying bare the country’s governability challenges.

October 17, 2019

*John Polga-Hecimovich is an Assistant Professor of Political Science at the U.S. Naval Academy. The views expressed in this article are solely those of the author and do not represent the views of or endorsement by the Naval Academy, the Department of the Navy, the Department of Defense, or the U.S. government.

 

Haiti: Is Anyone Listening?

By Fulton Armstrong

Protesters take to the streets in 2018 over the government's misuse of funds from PetroCaribe.

Protesters take to the streets in 2018 over the government’s misuse of funds from PetroCaribe– once again the subject of public anger/ Rony D’Haiti/ Wikimedia Commons/ https://commons.wikimedia.org/wiki/File:Manifestation_Haiti.jpg

As Haiti enters a fifth week of protests, President Jovenel Moïse’s support for U.S. policies on Venezuela and Taiwan appears to have secured him Washington’s backing, but his government is in tatters and his opponents don’t look likely to fold soon. For weeks, tens of thousands of protesters have held targeted marches in Port-au-Prince and provincial cities across the country demanding Moïse’s resignation. Violence by demonstrators and police has caused 17 deaths and hundreds of injuries, including the shooting of several journalists, according to human rights monitors. School closures have left up to 2 million children without class and the food supplements they receive there.

  • Protesters originally took to the streets to protest fuel shortages caused by government insolvency, but corruption – including the misappropriation of an estimated $2 billion dollars in profits from the sale of fuel under Venezuela’s previous PetroCaribe program – has become the overwhelming issue. Opposition leaders cite Superior Court audits implicating Moïse and other government officials past and present in schemes to personally profit from PetroCaribe security forces’ use of clubs and tear gas (and unconfirmed use of live ammunition) against demonstrators has further fueled anger in the streets. Haiti’s Catholic Bishops have blamed Moïse for the showdown, and their “Justice and Peace Commission” has publicly called for his resignation.
  • Moïse’s leadership has been unsteady throughout the crisis. He was out of public view entirely for one week, returning only in a pre-recorded radio address broadcast at 2:00 am on September 25 that called for calm and dangled the prospect of a “government of national unity.” Since his inauguration in January 2017, he has lived under the shadow of suspicious vote counts and has either failed to get Prime Ministers confirmed by Parliament or to build a good working relationship with them. The country hasn’t had a budget for two years, and a projected 20 percent inflation during 2019 and mere 1.5 percent growth further drive popular fury.

Moïse is clearly winning the competition for international support. However, he has gained U.S. silence about the evidence of his and senior allies’ involvement in PetroCaribe under Venezuelan Presidents Chávez and Maduro. During the UN General Assembly two weeks ago, U.S. Deputy Secretary of State John Sullivan met with Moïse’s Foreign Minister, Bocchit Edmond, with whom he “reaffirmed the strength of the U.S.-Haiti partnership and shared hope that Haiti’s political stakeholders would soon identify a path to forming a government that remains firmly rooted in democracy and the rule of law.”

  • The opposition’s calls for support have been much less successful. U.S. Senator Marco Rubio, a Republican widely seen as President Trump’s top advisor on hemispheric affairs, said it was not the “proper job of the United States to call on a democratically elected President [Moïse] to step down.” (Rubio had praised Moïse for supporting U.S. sanctions to remove Maduro and for preserving diplomatic relations with Taiwan.) The senior Democrat in the U.S. Congress, House Speaker Nancy Pelosi, last week also cited Moïse’s position on Maduro as important.
  • UN officials last week issued a “statement of concern,” noting that the protests were hindering aid deliveries and could lead to a humanitarian crisis. The UN remained neutral, however, and called on “everyone” to refrain from the use of violence. An unofficial OAS delegation to Haiti organized by individuals close to Senator Rubio in June told the opposition to “back off,” according to press reports, and reportedly told Moïse that he should “start governing” but it was “not going to ask him to resign.” Overall, however, the OAS has kept a very low profile, especially during the current crisis.

Haitian politicians have often turned to foreign friends and multilateral organizations to rescue them from crises – which they surely stir up themselves – but the international community, rather than addressing fundamental problems, often tries to paper over highly contested elections (like Moïse’s) and institutional weaknesses. The billions in PetroCaribe revenues that have vanished during the past two presidencies – including that of Moïse’s mentor, Michel Martelly – is strong circumstantial evidence that the opposition’s calls for investigation of the current administration have merit. But Moïse seems to be betting – correctly so far – that support for Washington’s priorities, such as condemning alleged corruption and undemocratic practices in other countries, buys him space to snub opponents’ demands. The UN and OAS just don’t seem to want to get more deeply involved, but the opposition, which has surprised many with the length and level of protests, doesn’t seem ready to give up.

October 11, 2019

Peru: Final Showdown at the Congress Corral

By Carlos Monge*

President Vizcarra speaking to Foreign Press in meeting

Peruvian President Martín Vizcarra meeting with Foreign Press/ Flickr/ Creative Commons/ https://bit.ly/2noHE1m

Peruvian President Vizcarra’s proposals to move up general elections from 2021 to 2020 and reform the election of new members of the highest court in the country – and Congress’s rejection of them – have sparked a crisis that has led him to dissolve Congress and call for new elections to replace it. The Congressional majority, led by the followers of Keiko Fujimori (in pre-trial “preventive prison” on corruption charges) and Alan García (who committed suicide in April to avoid arrest on similar charges), had rejected a series of reform proposals, although polls have consistently shown massive support for them and rejection of the Congress’s obstructionism. Events of the following 48 hours resemble a comedy script as the two sides faced off.

  • On September 30, the Congress rejected Vizcarra’s push for improvement of procedures for the election of new members of the Constitutional Tribunal – proceeding to elect a new member to its liking – and rejected his request for a Confidence Vote. In response, based on the constitutional prerogative the President has if a Confidence Vote is denied two times (his predecessor, Pedro Pablo Kuczynski, PPK, had also been denied one), Vizcarra dissolved the Congress and called for new elections to replace it. At the same exact time, Congress granted the Confidence Vote, but with new rules to be put in place afterwards. In the evening it “temporarily” removed Vizcarra from office, swearing in Vice President Mercedes Aráoz as “temporary” President.
  • On October 1, Aráoz – who the previous evening said she “accepted the [temporary presidency] with fortitude” – explained that she was not really President, said that her appointment was merely political symbolism, and declined the appointment. In the meantime, Vizcarra received the support of the Armed Forces and the associations of Regional Governors and Municipal Mayors, swore in a new Cabinet, and formally called for new elections in January 2020.

The confrontation is more than just a short-term political dispute between a President and opposition parties. It reflects the resistance of liberal and leftist politicians, journalists, church sectors, honest public officials, and social and citizen platforms to the total takeover of the state by a coalition of corrupt politicians, illegal economies, conservative religious groups, and corrupt businessmen. These latter groups have long had representatives in different parliamentary benches, ministries, and regional and local governments. But they did not have the direct total control that, according to many observers, they would have had if Keiko Fujimori, daughter of disgraced President Alberto Fujimori, won the 2016 elections.

  • Keiko lost the very tight race to PPK but never accepted her defeat. Her party devoted itself to bringing the PPK government down by compiling evidence of his involvement in corrupt practices in previous stints as minister and prime minister. But the same corruption scandal that helped them remove PPK in March 2018 became a threat for both Keiko and former President García – and emboldened Vizcarra to move away from initial conciliatory policies. The President embraced a strong anti-corruption agenda, confronted the Congress, and won enormous popular support.
  • The straw that broke the camel’s back was the Congressional attempt to capture the court through an internal election method in which parties presented their candidates in a 30-minute meeting and scheduled a vote for a few days later, with no public scrutiny of the candidates, no public hearings, or actions that could define the process as transparent and accountable.

Vizcarra has survived last week’s showdown, but the constitutional crisis and its underlying tensions are far from over. Leaders of the dissolved Congress insist that the new member of the court they elected last Monday be sworn in, so that a more conservative Constitutional Tribunal decides on the fate of Vizcarra´s move. But it could take months for the Tribunal to reach a decision. Until a new Congress is elected, Vizcarra will legislate via Urgency Decrees, without knowing the composition of the new Congress and his relationship with it.

  • The dispute over the narrative of events is raging. For some, paradoxically aligned with the Fujimori heirs leading the Congress, Vizcarra has staged a coup similar to that of Alberto Fujimori in 1992 and thus become a dictator. For others, he has proceeded according to the Constitution and in defense of democracy. The best hope now is that the country can deliver a new, democratically elected Congress that will collaborate in completing the pending judicial and political reforms and in supporting the ongoing anti-corruption investigations. If it succeeds, Peru will be a better country and have something to celebrate during the July 2021 Bicentenary of its Independence.

October 8, 2019

* Carlos Monge is an Advisor at the Natural Resource Governance Institute in Lima.