Dominican Republic: Remittances Showing Strong Rebound Despite COVID-19

By Gerelyn Terzo*

Tower and Auditorium of the Central Bank of the Dominican Republic/ Rafael Calventi/ Wikimedia Commons/ Creative Commons License

The Dominican Republic’s economy has not escaped the slowdown caused by coronavirus, but one of its most important engines of growth – remittances from expatriates – has shown a strong resurgence in recent months.

  • The DR’s economy has been on a rollercoaster since the onset of the pandemic. The World Bank projects it contracted 4.3 percent in 2020, with the fallout continuing to reverberate throughout the country this year and next. This comes after decades of expansion, including annual growth of 6.1 percent between 2015 and 2019. Much of the country’s growth for decades has been fueled by personal remittances, hovering around 8.3 percent of GDP as of 2019.

Remittances plummeted more than 20 percent in March 2020, when the shock of the pandemic first hit, but they rebounded soon after, and a broader turnaround in the second half of 2020 appears to be helping the Dominican Republic toward a course of recovery. Families depend on funds from family members abroad for consumption, savings and investing.

  • By May, money transfers into the country from the United States rebounded nearly 18 percent, thanks to a Dominican diaspora that sent approximately $638.7 million home to their families. That was close to double the amount sent the previous month. Remittances have shown particularly strong growth since July, when transfers surpassed $827 million, 29.3 percent over July 2019.
  • Since then, the Dominican migrant community has not disappointed – more than compensating for the dip in remittances during the early COVID period. The Central Bank announced in December that “the flow of foreign currency continues to improve.” It pointed to a 27 percent year-on-year increase in remittances in November 2020, when they reached $707.5 million. For the January-November 2020 period, remittances climbed to nearly $7.4 billion compared to roughly $7.1 billion for all of 2019.
  • Nearly 85 percent of the flows over the past eight months originated from the diaspora in the United States, where unemployment among Latinos dropped about a half percent per month in late 2020. Other major sources are Spain and Italy, where Dominican migrants number 158,000 and 43,000, respectively.

Lockdowns and travel bans have ravaged the tourism industry, which customarily accounts for another 7‑8 percent of GPD. The number of visitors in November was one quarter that of the same month a year ago – making remittances an even more important input for the DR economy. Migrants living in the United States are likely working jobs that are considered essential during COVID in sectors of the economy such as healthcare. Regardless of how tough times get abroad, moreover, migrants from the Caribbean and Central America know that conditions are likely to be even more difficult back home – and these expatriates are more prone to sacrificing meals for themselves to ensure families back home can survive. A Santo Domingo local on social media suggested constructing a statue – similar to one in San Salvador in honor of Salvadoran expatriates – to honor the Dominican diaspora, who “against all odds” got the money through. The trajectory of COVID is still unknowable, but migrants’ commitment to helping family back home is already clear.

February 18, 2021

* Gerelyn Terzo is an analyst and writer on remittance flows and cryptocurrencies. This article is adapted from one she wrote for Sharemoney.

Latin America: Impact of the January 6 Insurrection at the U.S. Capitol

By Ilka Treminio Sánchez, Fábio Kerche, and Esteban De Gori*

Tear gas outside the U.S. Capitol on January 6, 2021/ Tyler Merbler/ Wikimedia Commons/ Creative Commons License

AULABLOG invited three Latin American experts to comment on the impact of the events in Washington, DC, last month on U.S. relations with the region.

Ilka Treminio Sánchez*

During the Trump Administration, the United States revealed regrettable signs of institutional erosion and democratic backsliding. The political engine that allowed and promoted these actions was based on polarizing political discourse that shaped a hostile atmosphere toward Trump’s and his supporters’ opponents. This behavior escalated to the point of attacks on the electoral results and the violent assault on the Capitol by Trump’s followers on January 6, the day Joe Biden’s victory was certified. The insurrection failed as institutions upheld the legitimacy of the electoral process and the popular will of the citizens.

For Latin America, and for Central America specifically, this episode signifies the rupture of the myth of democratic exceptionalism in the United States. It reveals U.S. fissures and defects that are characteristic of the hemisphere’s weakest democracies. Central America has many times experienced authoritarianism, populism, violence against the adversary, social violence against ethnic groups, attacks on Congress, and attempts to alter electoral results. The Trump Administration’s actions have seriously damaged the United States’ image as a country that guarantees democracy – and its future governments could lose moral authority in the region on this matter.

  • The January 6 assault could give new life to undemocratic “zombie ideas” in Central America, undermining progress in political and civil rights made in the last decades. It could further embolden efforts to weaken election processes and increase presidential authoritarianism already present in the region.

Fábio Kerche*

The insurrection at the U.S. Capitol and President Trump’s campaign to overturn the electoral results were a sad scene for more than just the United States. Democracy is the regime in which a government can be defeated in an election and then leaves office peacefully. The events in Washington revealed that, even in a country in which democracy was a consolidated regime, it is vulnerable – with profound implications for younger and more fragile democracies worldwide. This includes Latin America and particularly Brazil.

  • It is important to remember that the Brazilian political crisis started when the runner-up in the 2014 presidential elections challenged the results. Fortunately, the U.S. political institutions were still strong enough to overcome the impasse in Washington. The United States’ most recent crisis gives Latin Americans cause to consider what should and should not be done to protect and consolidate democracy across our continent. In Brazil, where President Jair Bolsonaro is trying to reproduce Trump’s style, the failure of the U.S. Capitol insurrection – and the triumph of the country’s Constitutional order – should discourage any imagining that there is a way out of democracy.

Esteban De Gori*

The insurrection was undoubtedly shocking for South America. No government and no citizenry had imagined that a group of persons could occupy the U.S. Capitol as they did, nor that challenges to U.S. electoral processes could be so intense. Among the most powerful events: persons supported by the President overrunning the building and deepening the runaway polarization; the struggle of the democratic system to overcome the challenges to the electoral competition; and, perhaps most profoundly, the erosion of popular faith in the system. Leaders in most of Latin America, with the exception of Venezuela and perhaps others, showed concern and surprise. A crisis afflicting a great geo-economic player in the context of a pandemic and trade war with China could bring greater uncertainties and risks and, especially now, few opportunities.

  • The insurrection and the singularly belligerent government of Donald Trump are not the only things driving reassessment of the United States as a promoter of democracy and the rule of law. Since 2008, to take the financial crisis as a point of reference, doubts about the effectiveness of the country’s political system have deepened. That discomfort helped bring Trump to power as it eroded faith in the political system and its ability to balance desires and demands. The early statements and actions of the Biden Administration suggest awareness of this discomfort and willingness to begin addressing it.
  • The events (and Biden’s efforts to overcome them) do not appear likely to significantly change the U.S. relationship with Latin America. The pandemic and other challenges to democracy have placed extraordinary pressure on the region’s leaders, for whom the images of U.S. insurrection may have engendered even a certain empathy. They now know that parliaments and democratic institutions can be illegally occupied; that debate can go horribly awry; that polarization can seriously deepen in any country of the hemisphere.
  • More than the turmoil in Washington, the pandemic and its economic consequences appear likely to influence U.S.-Latin America relations. Joe Biden will probably remain focused on the country’s customary interests in the region – no great changes – although with less belligerence than Donald Trump. China, the other great regional power, will continue to promote its position without big conflicts or stridency. Even if the United States retains its economic edge in Latin America, its problems – and China’s gradual expansion in the region – put Washington on the downward path typical of a great power in decline.

February 11, 2021

* Ilka Treminio Sánchez is the director of La Facultad Latinoamericana de Ciencias Sociales (FLACSO) in Costa Rica, and a lecturer and researcher at the University of Costa Rica, specializing in electoral processes, political behavior, presidential reelection, and Latin American comparative politics.
* Fábio Kerche is a professor at UNIRIO and IESP-UERJ in Rio de Janeiro. He was a CLALS Research Fellow in 2016-2017.
* Esteban De Gori teaches sociology at La Universidad de Buenos Aires and is a researcher at Argentina’s Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET).

South American Megacities, Water Scarcity and the Climate Crisis

By Robert Albro*

Drinking water distribution/ MunicipioPinas/ Flickr/ Creative Commons License

Access to fresh water has become a regular flashpoint throughout Latin America, particularly in its largest cities, and threatens to trigger tensions and even war. Sixteen of the region’s 20 largest cities are experiencing water-related “stress,” and three of its largest – Sao Paulo, Lima, and Mexico City – are in danger of running out of water completely in the near future, according to reliable sources.

  • In 1995 World Bank vice president Ismail Serageldin presciently warned that future wars would be fought over water. The 2000 Water War in Cochabamba, Bolivia, kicked off an era of social mobilization around chronic water shortages and control over access to fresh water. Protests against the privatization of water have become common – in Colombia in 2013, Ecuador in 2014, Brazil in 2015, Chile in 2016 and 2019, Peru in 2019, and Mexico in 2020, among others.

Water challenges faced by some of South America’s megacities show that the urban water crisis is a wicked problem with no straightforward solution.

Lima: Peru’s capital is the second largest “desert city” in the world, after Cairo, receiving an average of 0.3 inches of rain annually. The coastal area in which it sits has 62.5 percent of the population but only 1.8 percent of its fresh water. It depends largely on three rivers fed by rapidly shrinking Andean tropical glaciers, reduced by 40 percent since the 1970s. As the glaciers vanish, water stress is expected to become “critical” for the more than 10 million inhabitants of Peru’s capital by 2025. Peripheral barrios are already significantly affected: An estimated 1.5 million of Lima’s residents already lack access to potable water. Shrinking glaciers are expected to dramatically worsen water inequality in many Andean cities, including Quito in Ecuador; Arequipa, Huaraz and Huancayo in Peru; and La Paz-El Alto, Cochabamba, Oruro, Potosí and Sucre in Bolivia.

Sao Paulo: In 2014, the worst draught in 250 years left Latin America’s second largest city less than two weeks away from running out of water, with reserves at 3 percent of capacity. Emergency rationing led to protests, and in 2018 it almost happened again. Brazil has more fresh water than any country on earth, but half is in the Amazon, where only 4 percent of its population lives, and deforestation in the Amazon – a giant water pump – reduces rainfall in Sao Paulo. The city’s watershed is also being deforested, ecologically degraded, and contaminated with large amounts of industrial wastewater. Its freshwater infrastructure is ill-equipped to handle these multiple stressors. Other Brazilian cities, including Rio de Janeiro and Belo Horizonte, face similar problems.

Santiago de Chile: While Santiago currently has adequate water and infrastructure for storage, treatment and distribution, underground aquifers are being depleted faster than they can be replenished, and climate change has introduced a destructive cycle of floods and droughts. The city’s water availability is expected to decline as much as 40 percent this century, and the urban population continues to grow. Oversight bodies have little influence over how water is delivered, compounded by extreme administrative fragmentation and poorly managed participatory reform efforts. High prices and poor service by the city’s privatized water company were a rallying cry of protesters in 2019. Improved water governance, along the lines of what Medellín, Colombia, has achieved, is possible and can dramatically improve water access and quality. But Santiago has much work to do.

In theory Latin America should not be experiencing a water crisis because it has 30 percent of the world’s fresh water but only 8 percent of its population. But it is highly unevenly distributed and concentrated in places where few people live. Glacial melt, deforestation, and inadequate water governance are all factors in why urban water scarcity has become a wicked problem.

  • Adding to the misery, as agricultural economies throughout much of the region collapse as a result of changing climatic conditions, urban in-migration is a continuing challenge. Combine this with poor and neglected infrastructure, unregulated industrial pollution, high levels of freshwater contamination, increasing social contestation around water access and management– and the problem looks daunting. Where Latin America’s urban water crisis is concerned, climate change is neither straightforward nor a stand-alone proposition, but rather part of a complex set of urgent crises that will require especially creative and imaginative problem-solving in the years to come.

February 9, 2021

* Robert Albro is an anthropologist and Research Associate Professor at CLALS.

Argentina: Legalized Abortion Demonstrates Feminists’ Hard-Won Clout

By Cora Fernández Anderson*

March for Safe Abortion in Argentina/ International Women’s Health Coalition/ Flickr/ Creative Commons License

Argentine approval of legal abortion – signed into law by President Alberto Fernández on January 14 – validates activists’ claim that women’s rights are never simply granted; they must be fought for. Fifteen years after the launch of the Campaign for Safe, Free and Legal Abortion in Argentina, the Senate voted 38-29 to legalize abortion until 14 weeks. The Lower Chamber approved the measure on December 11 by a vote of 131-117. On December 30, after Senate approval, the streets of Buenos Aires filled with green – symbol of the movement – and demonstrators’ tears and joy, hugs and chants overwhelmed the scene. Feminist leaders proclaimed, “It is a day that we imagined and dreamed of many times.”

  • A strong abortion rights movement was essential to placing the issue on the national agenda and raising awareness about it. The influence of the Catholic Church, coupled with the stigma around abortion nestled in the identification of womanhood with motherhood, had created a strong barrier to any policy change. (Argentina is the home country of Pope Francis.)
  • Until very recently, most politicians, whether from the right or the left, perceived abortion reform as politically costly – a risky issue commonly referred in Argentine slang as pianta-votos – something that makes votes “escape.” Through decades of intense work, the movement showed politicians that society has changed, that new generations have different priorities, and that it is possible to win elections advocating for legal abortion. President Fernández promised to support the initiative in his campaign and he delivered.

Abortion in Argentina used to be ruled by the 1921 Criminal Code, which said it was legal only when the life or health of the woman was at risk and in cases of rape. For most of the 20th century, this regulation was not challenged, and – because the wealthy could afford the necessary certifications and medically safe abortions – class divides had deadly implications: Those with limited resources risked their lives and health in attempts to interrupt their pregnancies.

  • Only after the transition to democracy in 1983 were feminists able to promote debate on the need to legalize abortion. Led by mostly middle-class professional women, early initiatives were very small and did not have much political impact at the time. In 2001, however, protests over political and economic crises toppled the government and sparked a wave of activism that included creation of the Assembly for the Right to Abortion. This built a cross-class alliance that gave the movement a strong foothold – leading, on May 28, 2005, to launch of the Campaign credited with driving last month’s historic bill. The movement’s iconic green pañuelo – emblazoned with the main slogan, “Sexual education to decide; contraception so as not to have an abortion; legal abortion so as not to die” – became ubiquitous.

The campaign’s success can be attributed to the growth of a broader feminist movement, which shifted some public focus onto women’s realities. For example, the increase in the number of femicides inspired the movement ‘Ni una menos’ (Not one less), a grassroots collective fighting to put an end to violence against women. Recent efforts framed criminalization of abortion as another example of violence against women, making the state responsible for their inaction in the face of preventable deaths.

  • In addition to proving that it was possible to win a presidential election on a platform to legalize abortion, the Argentine campaign has inspired and given renewed hope to activists across Latin America – like those in Colombia awaiting the decision of the Constitutional Court on a case that might lead to the decriminalization. Women in Chile, who in 2017 won a few exceptions to the total ban on abortion, are now pushing harder to remove that legacy of the Pinochet years. This past week, the Chilean Parliament began to discuss a bill that would legalize abortion until 14 weeks in line with the law recently passed in Argentina.
  • The fight is not over even in Argentina, however, because opponents want the law declared unconstitutional and many doctors want to be conscientious objectors. But the movement is aware of the challenges and is ready for the fight. Indeed, feminists are not resting on their laurels. The movement will play an important role in monitoring the implementation of the law and disseminating accurate information about it so as to make abortion access a reality across the country.

January 28, 2021

* Cora Fernández Anderson is Assistant Professor of Comparative Politics at Mount Holyoke College. She is the author of Fighting for Abortion Rights in Latin America. Social Movements, State Allies and Institutions. Portions of this analysis appeared here in Ms. Magazine.

Biden’s North American Reset?

By Tom Long and Eric Hershberg*

Map of North America/ Public Domain/ Creative Commons License

A North American approach to regional cooperation could make a comeback under the administration of U.S. President Joe Biden. Though promoted with little enthusiasm by President Obama and derided by the Trump administration, the utility of North American cooperation is suggested by a combination of factors: the desire to turn the page on Trump’s transactional approach to neighbors, interest in “near-shoring” as a result of the pandemic and frictions with China, and the growing salience of shared transnational challenges.

  • Trump played on anti-NAFTA and anti-Mexican sentiments in his rise to power. He followed his divisive campaign with dramatic standoffs over the border wall, tariffs on Canada and Mexico, and nativist immigration and asylum policies. Policy statements from the Biden campaign, Democratic Party platform, and transition team suggest the new president will be eager to signal his rejection of such policies, making a pro-North American stance attractive in the broader context of a return to multilateralism. To be sure, elements of the Democratic Party long harbored skeptical views of North American cooperation (especially NAFTA), but the anti-North American stance is now thoroughly associated with Trump, and Democrats have found themselves defending the concept during the last four years.
  • The pandemic and rising tensions with China have raised questions about the desirability of far-flung supply chains, at least for sensitive products like medical and telecommunications equipment. Revelations about forced-labor practices in China have also put human rights back on the trade agenda. This is an issue for Canada, too, given its tensions with China over electronics giant Huawei. At the same time, it presents an opportunity for Mexico.
  • Transnational challenges including public health, migration, and security have long provided a rationale for greater policy coordination in North America. Many of these issues have grown from irritants to major problems given the neglect and perverse U.S. policies of the last four years.

Under President Biden, these factors may give North American cooperation a new lease on life. As a regional policy framework, “North America” could give renewed stimulus to North American economic integration, which had stagnated due to China’s rise, increased border controls after September 11, 2001, limited investment in coordination or infrastructure, and various migration and security crises along the U.S.-Mexico border. Trump’s rhetorical and policy barrage has awakened powerful interests to defend economic integration at the same time that it has motivated civil society organizations to defend North America’s integrated transnational communities.

Progress is likely even if the phrase “North America” is slow to return. NAFTA was officially replaced in July 2020 by a new pact that preserved most of its features but stripped “North America” from its name. (The three signatories have named the deal differently – USMCA in the U.S., TMEC in Mexico, and CUSMA/ACEUM in Canada – but none includes “North America.”) The separation of “North America” from the pact creates, counterintuitively, an opportunity to expand the understanding of the region and related policy frameworks.

  • Politically, “North America” could provide a useful space for Mexican President Andrés Manuel López Obrador, who has shown little interest in Biden’s initiatives for bilateral cooperation and has provoked tensions with Washington through his handling of the Cienfuegos case, to provide leadership.
  • Practically, many deeply “North American” issues, particularly migration, suggest a wider understanding of the region to include parts of Central America and the Caribbean. Tensions about Central American migration will be high on the new administration’s agenda, but addressing these challenges through a North American lens offers a constructive contrast to Trump’s narrow nationalism.
  • Economically, given the contrast between countries of South America that have been more deeply reliant on exports to China versus those that are still most closely linked to the U.S. market, a broadened North America could provide a forum – larger and more diverse than NAFTA but smaller and more focused than the Summit of the Americas – to address regional policy challenges.

President Biden inherits an old trilateral region that seemingly has no name and a badly damaged economic partnership, but the gravitational pull of the U.S. market, new rhetoric and policies from Washington, and other underlying drivers should restore the economic and political importance of the region, offering an opportunity to rethink the boundaries and purpose of North America.

January 21, 2021

* Tom Long is Associate Professor at the University of Warwick and Chair of the Robert A. Pastor North American Research Initiative at American University. Eric Hershberg is Director of the Center for Latin American and Latino Studies and Professor of Government at American University.

Femicide in Guatemala: The Double Burden of COVID-19

By Megan DeTura, Skevi Kambitis, and Valery Valdez Pinto*

Stop Femicide in Guatemala Banner/ Karen Eliot/ Flickr/ Creative Commons License

Women in Guatemala are facing a double threat of contagion and violence: the global COVID-19 pandemic and a surge in gender violence. Stay-at-home orders and quarantines have forced victims and perpetrators of domestic violence into close quarters, exacerbating the risk of attacks. While epidemiologists work to highlight the importance of public health data documenting waves of COVID infections, an already high level of femicides has yet to receive such attention. The Guatemalan government has not provided data documenting an increase in domestic violence reports, but women’s groups and NGOs report an increase in anecdotal accounts of attacks.

  • As early as last June, international organizations warned that, although stay-at-home orders offer an effective means of preventing disease transmission, they entail inherent risks for women, children, and the elderly. UN agencies and human rights organizations believe a surge in domestic violence is occurring and is not being reported due to the pressure on women to stay silent. With women’s shelters, community centers, and other “safe spaces” shut down due to COVID, indigenous and other women in Guatemala have few or no options to flee. NGOs are facing various programmatic obstacles as they attempt to restructure their work in Guatemala while observing public health precautions.
  • Femicide in Guatemala is a consequence of deep-rooted, historic factors. Legacies of a patriarchal and conservative culture have long diminished women’s rights, as men used gender-violence for submission and control. This practice was exacerbated during the country’s 36-year civil war, when violence against women was a weapon of intimidation and terror. Peace Accords signed in 1996 were supposed to end it and bring perpetrators to justice, but serious flaws in implementation have prevented women and indigenous groups from fully benefiting. Continuing violence in and outside the home and discrimination based on sex, ethnicity, and class have prolonged persistent socio-economic inequality for women, especially those of indigenous descent.

Legislation has failed to stem the violence against women. In addition to a 1996 Law Against Intrafamilial Violence, the Guatemalan Congress in 2008 passed the Law Against Femicide and Other Forms of Violence Against Women, explicitly recognizing femicide as a criminal offense. And with the passage of the Immediate Search for Missing Women Act in 2016, the state enhanced its domestic infrastructure to combat femicide, creating a DNA database and registries of missing women and perpetrators – efforts spearheaded by a National Search Coordinator.

  • The impact on the ground, however, has been marred by limited access to justice and high levels of impunity. The country’s 29 specialized courts for crimes of femicide are located in just 11 of 22 departments, with many staffed entirely by men. Women residing in rural areas face transportation burdens that limit access and present jurisdictional challenges. When a case is filed by the Public Prosecutor’s office, the possibility of conviction remains uncertain, as less than one third of femicide cases filed from 2014 through 2017 have resulted in convictions. Even perpetrators found guilty are now afforded greater leniency because a 2018 decision by the Constitutional Court gutted the once mandatory 25- to 50-year prison sentence.

While Guatemala is among the worst, it is not alone in its failure to take effective action against femicide and other violence against vulnerable groups. Femicide was recently highlighted in a study by the Pan American Health Organization, which also documented serious gaps in preventing violence against children and adolescents in the Americas. PAHO has also reiterated its call on public health systems in Central America to acknowledge their role in protecting women from violence during the pandemic.

  • Guatemala specifically has the means by which the administration of President Alejandro Giammattei could take action. Much of the epidemiologic infrastructure developed for COVID, for example, can be expanded to create a parallel system for the surveillance of femicide at the local, state, and national levels. NGOs already in close proximity to potential victims and their families could be strengthened to increase the prevention and punishment of violence against women and answer the Femicide Watch Call issued by the Office of the United Nations High Commissioner for Human Rights last year. Much like the response to COVID as a public health challenge, only an orchestrated, multi-level response will curtail future outbreaks of violence against women from reaching epidemic proportions.

January 19, 2021

* Megan DeTura is a graduate student in Comparative Regional Studies and a research assistant at both the National Security Archive and American University’s Accountability Research Center (ARC). Skevi Kambitis is a graduate student in International Peace and Conflict Resolution and a research assistant at the United States Institute of Peace (USIP). Valery Valdez Pinto is a graduate student in Ethics, Peace, and Human Rights and a graduate assistant at CLALS.

Brazil: Congress Shows Leadership on COVID-19

By Beatriz Rey*

National Congress of Brazil, Plenary Session, 2020/ Senado Federal/ Flickr/ Creative Commons License

The Brazilian Congress has been the leading force in combating the COVID‑19 pandemic and its disastrous impact on the Brazilian economy, made necessary by the disorganization of the administration of President Jair Bolsonaro in proposing and securing the approval of legislation. The President of the Chamber of Deputies, Rodrigo Maia, recently pointed out that, following a trend that predates Bolsonaro, no substantial vote would have occurred without legislators’ leadership.

  • Political scientists have ranked Brazilian presidents as among the traditionally most powerful in the world. Unlike their U.S. counterparts, presidents in Brazil can initiate almost any type of bill in Congress, enabling them to be the dominant player behind major policy reforms. However, this pattern began to shift in the 2000s. Political scientist Acir Almeida has documented 2009 as the year in which Congress – for the first time ever – passed more legislation of its own drafting than that proposed by the presidency. In that Congressional session (2007-2010), 371 laws were legislator-sponsored – more than three times the 113 President-sponsored laws passed. The number of laws sponsored by the presidency dropped to 86 in the next Congressional session (2011-2014), compared to 297 by Congressmen. Between 2015 and 2018, lawmakers approved 369 of their own bills, while only 42 executive-sponsored bills became law. 

Congress has especially exerted leadership during the pandemic, during which the coronavirus has dominated the legislative agenda. (Almost half of the 133 bills that Congress passed last year were linked to the public health and economic impact of COVID‑19.) Legislators proposed 96 percent of the total 2,377 pandemic-related bills drafted. Bills initiated by the Legislative and the Executive branches experienced similar approval rates – roughly 47 percent of the Administration’s and 52 percent of the Congress’s – but all but one of the President’s laws were approved as provisional decrees, which are like executive orders in the United States. Executive decrees are arguably easier to pass than other bills. 

  • The coronavirus emergency aid program was one of the legislator-sponsored bills. The country’s most important COVID-19 policy to deal with the economic consequences of the pandemic, its legal framework originated in a bill submitted by Congressman Eduardo Barbosa. The program’s approval also demonstrated Congressional activism in the level of funding. The Federal Government initially proposed a monthly benefit of 200 reals (about $55), but the Chamber of Deputies counterproposal of 500 reals put pressure on the government to increase the benefit to 600 reals (about $110).

The legislative branch naturally embodies a broader array of social, political, and economic interests than the President and his Administration, which, although elected with support from several segments of society, has a much smaller reach.

  • Congress’s performance indicates that it is able to serve – with at least some presidents – as a co-policymaker, potentially improving the quality of policy debates, acceptability among political actors, and the likelihood of successful implementation. A public opinion poll by Datafolha suggests that four in every 10 Brazilians aged 18 years or older requested emergency coronavirus aid. Indeed, a study by Fundação Getulio Vargas estimates that the program decreased the country’s poverty rate by 23.7 percent (compared to 2019). This means that 15 million Brazilians had left poverty by last August. These results validate the Congressional activism and lay the groundwork for more in the future.

* Beatriz Rey is a CLALS Research Fellow. Parts of this article appeared on the Wilson Center website and in the Brazilian Report. 

Mexico and Central America: Taking Aim at Corruption in Pharmaceutical Procurement

By Thomas Andrew O’Keefe*

Secretary of Health Headquarters, Mexico City, Mexico / Diego Delso / Wikipedia, Not Modified / Creative Commons License

Under pressure to reduce the cost of medications and medical supplies, the governments of Mexico, Guatemala, and Honduras have resorted to an international facilitator to combat inefficiencies and a lack of transparency in medical procurement while attempting to build their own capacity to manage purchases and reduce related corruption in the future.

  • The Mexican government has been trying to obtain lower prices from manufacturers and distributors of patented or single-sourced medications and medical devices since at least 2008, when it created a Coordinating Commission to Negotiate the Prices of Medications and Other Health Inputs. A pooled procurement mechanism overseen by the country’s Social Security Institute (IMSS) was established in 2013 to purchase pharmaceutical products and medical supplies on behalf of various federal and state agencies. When President Andrés Manuel López Obrador (AMLO) took office at the end of 2018, he labelled the Coordinating Commission as ineffectual and IMSS’ pooled procurement process as hopelessly corrupt – and terminated both. He consolidated purchasing authority for Mexico’s public health sector in the Secretariat of Finance and Public Credit, which also proved incapable of handling the task. To address widespread shortages throughout the country that were putting lives at risk, the Secretariat was signing contracts at exorbitant prices.
  • Last July, the AMLO administration executed an agreement with the United Nations Office for Project Services (UNOPS), a not-for-profit agency based in Copenhagen better known for implementing humanitarian and development projects. For 2021, the Mexican government is expected to spend some $4 billion to procure medications through UNOPS on behalf of federal entities and 26 of Mexico’s 32 states. UNOPS will reportedly net a 1.25 percent commission for what will be its largest single procurement project to date. In 2022, UNOPS will set up an electronic reverse auction system to conduct the bidding process with international suppliers.

Guatemala and Honduras reached out to UNOPS, with good results, years ago.

  • In 2014, UNOPS began assisting the Honduran Social Security Institute (IHSS) and Ministry of Health to establish a more effective and transparent procurement system for purchasing medications and medical supplies. After a year, UNOPS was able to procure medications at costs at 40 percent or more lower than what had previously been paid. Government funding remains a problem, but allegations of corruption in medical purchases have dropped sharply.
  • Following major corruption scandals at Guatemala’s Social Security Institute (IGSS), the Guatemalan government signed a contract with UNOPS in 2016 that involved both procurement and technical assistance to the IGSS to enhance transparency and strengthen its procurement processes. As a result, the Guatemalan government estimates the IGSS achieved an estimated 57 percent reduction in the prices of procured medicines and a 34 percent savings in surgical medical supplies and cochlear implants. The IGSS claims it was able to utilize these savings to, among other things, build new hospitals and extend health insurance coverage to more Guatemalans.
  • These experiences build on Guatemala and Honduras’ participation since 2010 in a mechanism overseen by the Council of Ministers of Health of Central America and the Dominican Republic (COMISCA) to jointly negotiate the prices of medications and medical devices for subsequent purchase by the public health sector in their countries.

Ensuring efficiency and reducing corruption in medical purchases will ultimately depend on the governments’ ability to reform their own systems, not on developing a permanent dependency on UNOPS or other international entities. UNOPS is scheduled to hand the entire procurement system over to the Mexican government in 2024. The recently created Mexican Institute of Health for Well-Being (NSABI) will initially oversee distribution within Mexico, but the AMLO administration has indicated that this function will eventually be taken over by a more specialized agency that will also have warehousing capabilities (including cold storage facilities).

  • AMLO signed an executive decree at the end of October that recognizes the health safety certificates issued by regulatory authorities in other countries as being equivalent to those issued by the Federal Commission for Protection against Health Risks (COFEPRIS) in Mexico. The decree also simplifies the process for COFEPRIS to issue certifications for the sale and consumption of all imported medications in Mexico. These moves are intended to undermine the ability of unscrupulous pharmaceutical firms to “capture” the regulatory approval process and thereby hinder competition.
  • The positive experiences in Guatemala and Honduras with UNOPS may encourage reformers in other Latin American countries, as just happened in Mexico, to look to the self- financing UN agency for assistance in clamping down on corruption, ensuring better management of the public health care sector, and implementing modern procurement systems to address the longstanding challenge of getting essential medical supplies to citizens who need them. The COVID 19 pandemic has made health a global priority and exposed serious deficiencies that no longer can be ignored. Without robust and equitable public health care systems, there is no sustainable economy.

December 21, 2020

* Thomas Andrew O’Keefe is president of Mercosur Consulting Group, Ltd. and lecturer with the International Relations Program at Stanford University.

Guatemala: Can the OAS Help Solve a Political Crisis?

By Ricardo Barrientos*

Protest in Guatemala, 2015./ hrvargas/ Flickr/ Creative Commons License

Guatemalan President Alejandro Giammattei, who has faced a number of challenges since his inauguration in January 2020, called in the Organization of American States (OAS) for help in the wake of last month’s protests over the 2021 budget, but the OAS’s impact was more negative than positive. As if the COVID pandemic, two tropical storms, and a series of corruption scandals weren’t enough, protests triggered by Congressional approval of the budget, which was plagued with allocations for corruption schemes and other anomalies, evoked the 2015 citizen mass demonstrations that brought down the government of President Otto Pérez Molina. Demands for the Giammattei’s resignation spread widely and became the main citizen demand: after only 10 months in office, the government was reeling.

  • Guatemala City’s Central Square was filled again with peaceful protesters, but a radical difference distinguished these from the 2015 protests. Away from the Central Square, small groups of individuals whom reliable sources have identified as infiltrators carried out violent acts, including setting the Legislative Palace on fire. These incidents were brutally repressed by the police, which brought back tragic memories of the civil war period. Two young boys lost an eye due to the police beating.
  • The crisis escalated even within the Government. The differences between Giammattei and his Vice President, Guillermo Castillo, deepened to the point that in a press conference the latter proposed that both resign, veto the budget, dismiss the Minister of the Interior and the police chief, and dissolve their highly controversial “Center of Government,” an entity headed by a close friend of the President that duplicated functions already assigned to ministries and state secretaries.

One of the government’s main responses was to invoke the OAS Inter-American Democratic Charter, based on an alleged coup threat. The OAS announced a mission to gather information and interview diverse Guatemalan sectors and actors. Right after the announcement, however, the lack of evidence of a coup d’état triggered distrust about the mission’s purpose.

  • Making things worse, the appointment of Fulvio Valerio Pompeo as mission head was not well received because, while serving as Strategic Affairs Secretary of Argentine President Mauricio Macri, he was directly involved in the failed sale of military aircraft to Guatemala last year. Almost immediately, the Guatemalan press highlighted this fact, feeding the perception that Pompeo might be seriously biased in favor of the government and against civil society, which had denounced the attempted plane deal. Moreover, OAS General Secretary Luis Almagro’s representative in Guatemala, Diego Paz Bustamante, and Guatemalan Foreign Minister Pedro Brolo are long-time friends. Brolo worked for Paz Bustamante in the OAS’s office in Guatemala in 2005-2011, further raising concerns of OAS bias in favor of the government. Due to this distrust, many civil society organizations, and even Vice President Castillo, declined an invitation to meet with the OAS mission.

An agreement earlier this month between the President and Vice President has moderated the crisis and reduced tensions. At a joint press conference, Giammattei announced dissolution of the Center of Government and assigned to Castillo control over the budget readjustment and reconstruction programs for storm damages. They also announced a review of the fitness of the Minister of the Interior and top police authorities to remain in their positions.

  • The Guatemalan crisis is far from over, and serious questions about the rationale for calling in the OAS – invocation of the Democracy Charter – and its response remain.  The OAS actions appeared based more on personal relations between its representatives and Guatemalan officials, particularly the appointment of someone with a clear conflict of interest stemming from the failed plane deal . Perhaps one lesson for OAS member countries from this latest round of Guatemalan convulsions is to think twice and carefully before asking for help from that regional organism, and to first use all local means to deal with an internal crisis.

December 16, 2020

* Ricardo Barrientos is a senior economist at the Central American Institute for Fiscal Studies (Icefi).

Cuba: Pursuing Halfway Economic Reforms

By Ricardo Torres*

A sample of the 10 or 20 staples available in a “Bodega” depending on the weekday in Havana, Cuba./ Jorge Royan/ Wikimedia Commons/ Creative Commons License

The Cuban government is once again introducing only partial economic reforms – while preparing for the total reform of the monetary system – but its fear of the impact of these and other changes continues to prompt a rhythm of transformation that can actually worsen the contradictions that plague the economy.

  • Officials last July announced a strategy to deal with the current crisis, including reform measures that had long been postponed as well as new initiatives. Since then, the government has authorized the private sector to carry out certain foreign trade operations; introduced 15 adjustments to rules governing state enterprises; loosened regulations governing the distribution of agricultural products to incorporate new actors; and announced that currency reform was imminent. These steps all were taken in the context of deepening shortages and expansion of the use of the dollar in retail sales.
  • COVID‑19 and other exogenous factors have further fueled the deterioration of the Cuban economy, magnifying the need for reforms, but implementation of promised measures has fallen short of expectations, and the structural measures needed to lift the economy from its decades-long lethargy remain undone. Deeper changes, such as the flexibilization of cuentapropismo (self-employment) and approval of private small and medium enterprises remain mired in technicalities and interminable bureaucratic delays.

Overhaul of the monetary system is, without doubt, the measure of greatest potential impact in the short term – and the most complex. Cuban authorities grasp that it is an essential step needed to maximize the power of other changes, but – from a purely technical perspective – Cuba has a lot of work to do before monetary reform will work. After postponing this major change for two decades, only a minimum of the right conditions have been met.

  • When it takes the plunge, the government’s continued control over the productive sectors and distribution of most essential products will give it some ability to control inflation. But it won’t be able to ignore the real costs. People without stable incomes will face the most severe adjustment as higher prices and more widespread shortages will deepen economic uncertainty. That will be a challenge for a government that already faces political discontent, as exemplified by the recent protest in front of the Ministry of Culture. The emphasis on a careful communications strategy regarding impending economic changes is prudent, but delaying implementation of reforms once announced only worsens things. Indeed, as a direct result of perceptions mismanagement, prices are already going up, even before the monetary reform takes off. Lacking the appropriate instruments to manage inflation, authorities are responding by capping prices, which in turn exacerbates scarcity and threatens a vicious cycle.

As always, the Cuban government is giving priority to caution and stability over bold options – working hard to project legitimacy and self-confidence at home and internationally. Lacking direct external support, such as from the international financial institutions, Cuba has few options for reviving its moribund economy without radical changes. It is well established that partial reforms in centrally planned economies only lead to stagnation, external imbalances, and deterioration of macroeconomic indicators. Cuba suffers from all of these at this moment. But less ambitious and carefully managed reform reduces the risks of losing control, of fueling instability, and of diminishing the government’s ability to deal with the certain unforeseen consequences of the changes.

  • U.S. policies have steadily hardened in recent years, feeding Cuban policymakers’ perception of operating under a state of siege and giving them an excuse to divert attention from internal shortcomings while delegitimizing groups that demand political change. The U.S. pressure also harms the private sector, which is very dependent on foreign clients. The cuentapropistas and entrepreneurs can play a central role in the event of serious economic restructuring by creating jobs and forming a new productive fabric that is necessary for the future. Instead of accompanying these private players on their journey toward a potentially genuine transformation, Washington has taken its cue from immigrants of Cuban origin in suffocating the private alternative as well as the state-dominated economy.

December 9, 2020

*Ricardo Torres is a Professor at the Centro de Estudios de la Economía Cubana at the University of Havana and a former CLALS Research Fellow.