Venezuela: Maduro’s Ploy Backfires

By Michael McCarthy*

Maduro and the Venezuelan flag

Venezuelan President Nicolás Maduro. / President of Russia / Flickr / Creative Commons

Almost a month after Nicolás Maduro held a snap presidential vote to strengthen his political power, the ploy appears to have largely backfired and left him weaker.  The dynamics underlying the years-long crisis have not fundamentally shifted, but the deepening impact of the economic implosion on the oil industry poses a threat to vital state interests and regime stability.  Maduro’s crisis management will face another major stress test.

  • Even the government’s own dubious figures on voter turnout – 46 percent – were too low to give the election credibility, limiting Maduro’s ability to claim a strong mandate. Criticism of the government’s efforts to sway voters by distributing food, medications, and other necessities at polling places was intense.  All but a few loyal friends in the international community have been reluctant to congratulate Maduro.  China and Russia accepted the vote count, but Beijing appeared particularly cooler than in the past, while Ecuador and Uruguay issued statements aimed at depolarizing the situation.  The OAS General Assembly lacked the 24-vote threshold necessary to invoke the Inter-American Democratic Charter to suspend Venezuela’s participation in the regional body, but the Dominican Republic’s shift away from its previous support for Maduro must have been a blow.
  • Maduro’s victory is further overshadowed by the fact that as much as 85 percent of the pro-government vote went to the party of Diosdado Cabello, who leads a competing faction under the flag of the Partido Socialista Unido (PSUV), while Maduro’s Movimiento Somos Venezuela got only 5 percent. Longtime observers argue that a battle between Maduro and Cabello, an original member of the Chávez 4F movement that staged a failed coup in 1992, is heating up.  The PSUV will hold a party congress on July 28 – Chávez’s birthday – that promises to serve as venue for Cabello to pursue his leadership ambitions.

Maduro’s weakness appears to have motivated several actions he’s taken since the election.  Most observers believe that he directed a raft of prisoner releases to improve his sagging image, pacify the situation, and set the stage for dialogue.  He reportedly wanted to reshuffle his cabinet to shore up unity, but internal political difficulties apparently have delayed it temporarily.

  • He also released a U.S. national, Joshua Holt, who had been under arrest since 2016 on trumped up charges of espionage and conspiracy to undermine the constitution. Maduro’s goal may have been to disarm U.S. criticism and open a line of communication, but the day after the election he also expelled the U.S. Chargé d’Affaires and his deputy.  The U.S. State Department wasted no time in reciprocating by expelling two Venezuelan diplomats, and later, in the wake of the Holt release, it underlined that policy toward Venezuela “remains unchanged.”

More U.S. sanctions may be imposed, but Maduro’s self-destructive rule is doing his government even more harm.  A combination of increasing hyperinflation and a potential record drop in month-to-month oil production from May-June suggest a rapidly worsening economy.  Press reports suggest state oil company PDVSA will soon announce that it cannot honor its monthly production obligations with a number of key partners – a major blow for a government dependent on oil for 95 percent of its income.  After calling for a boycott of the May 20 vote, the traditional opposition breathed a collective sigh of relief that a majority of voters stayed home, but this does not give them the win they need to regain public trust.  Continually bleak prognoses once again stir speculation that the military will step in.  Yet it is not so simple.  The military seems to operate more according to informal networks and personality-driven hierarchies, creating divisions that make it hard for groups to credibly act in the name of the armed forces.  So far, senior officials seem to have determined that loyalties to a dysfunctional regime do not yet sufficiently threaten business and institutional interests for them to take action.

 June 14, 2018

* Michael McCarthy is a Research Fellow with the Center for Latin American & Latino Studies.  He publishes Caracas Wire, a newsletter on Venezuela and South America.

Colombia: Winners and Losers in First Round of Elections

By Julián Silva*

Iván Duque

Iván Duque addresses a crowd of supporters after winning the most votes in the first round of the presidential election on May 27, 2018. / @IvanDuque / Twitter / Creative Commons

Colombia’s first round of presidential elections on May 27 produced two contrasting candidates for the June 17 runoff – neoconservative Iván Duque and leftist Gustavo Petro – but also highlighted other winners and losers who will shape a new, but still undetermined, political landscape.

Winner:  Iván Duque, of Centro Democrático, won the most votes (39.14 percent).  A total stranger just a couple of months ago, the 42-year-old candidate focused on ensuring benefits for big companies and landowners; criminalization of drug use; restricting LGBTQ rights and blocking gay marriage; and “adjusting” the peace agreement with the FARC to include jail time for former guerrilla leaders.  Buoyed by the endorsement of popular former President Álvaro Uribe, Duque represents some of the most conservative interests on the political scene in Colombia, including those who preached against the peace process.  Considered an Uribe puppet by detractors, he will probably try to lure some moderate voters to consolidate his victory in the next two weeks.  Some of them may think that, just as President Santos was supported by Uribe but moved away from him after being elected, Duque may take an independent path as president too.  In the last few days he has been trying to reassure voters he will take care of the poorest of Colombians and will not extend retirement age.

Loser:  The Liberal and Conservative Parties.  Heads of Colombian bipartisanism throughout most of the 20th century, these parties now seem to be empty shells with no trace of their former glory days.  The Conservative Party didn’t present a candidate and couldn’t even agree on one to support in the first round.  The Liberals ran with Humberto de la Calle – former Minister, Vice President, and head negotiator of the Government with the FARC – who polled fifth (with only 2.06 percent).  They’ve entered an alliance with Duque in hopes of ensuring their relevance for the next four years.

Winner: Left-centered candidates.  Despite the 14-point spread between Duque and his runoff opponent, Gustavo Petro (25.08 percent), the left-leaning parties did very well in view of Sergio Fajardo’s 23.73 percent support – giving them combined almost half of all votes cast.  At least half of Colombian voters sent a clear message that they’re tired of traditional politics.  Fajardo has already announced he will not vote for Petro, ending speculation of an alliance, but support for both candidates’ strong anti-establishment messages and criticism of “politics as usual” will force a Duque government to listen to them.

Loser: Germán Vargas Lleras, former Vice President who has coordinated infrastructure projects for the last three years term and has been ubiquitous at inaugurations, construction projects, and charities – opening him to the accusation of paving his road to the presidency with public funds.  He won less than 1.5 million votes (7.28 percent).  He has forged an alliance with Duque, but his leverage will be considerably lower than he’d projected.

Winner: Juan Manuel Santos.  Not even his appalling poll figures will take one signature accomplishment from him:  Former FARC guerrillas participated in the election as voters –  not as saboteurs – and the image of Rodrigo Londoño (“Timochenko”) casting his vote for the first time will be one for the ages, even with the challenges the peace process has experienced in the last few months.  National and international media have called these “the most peaceful elections in the recent history of Colombia,” and not even Uribe and Duque have been able to tarnish this aspect of Santos’s legacy nor the relevance of the accords, changing their promise from “shredding” the document to “modifying” it once in the presidency.  Santos says he will leave politics when his term ends in two months, leaving his party and supporters free to ally themselves with whomever they want – even Duque, one of his most consistent critics.

If – as at this point appears likely – Duque wins the runoff, his various coalition-building efforts with the Liberal and the Conservative Parties, Cambio Radical (Germán Vargas’s party) and Partido de la U (President Santos’s party) suggest that basic governability won’t be an issue for Duque.  He will face new political challenges, however, as votes seem to be shifting from the stable traditional parties and the conservative side of the spectrum to less durable alliances and bureaucratic pacts.  Candidates focused on social issues, such as education and redistribution, are opposing these traditional structures.  Colombian elites, for their part, will face new challenges and be forced either to accept four years of progressive policies and efforts to reduce corruption and inequality, or keep sinking and pushing the voters away.

June 7, 2018

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

Nicaragua:  Tensions Mount

By Kenneth M. Coleman*

1024px-Protestas_en_Managua,_Nicaragua_de_2018_(1)

Protesters convene in Managua, Nicaragua last month. / Voice of America / Wikimedia / Creative Commons

President Daniel Ortega’s increasing reliance on turbas, the masked and hooded supporters mobilized to beat back protests, suggests he’s confident that he can tough out the challenge posed by growing demands that he and his wife, Vice President Rosario Murillo, resign, or, at a minimum, agree to early elections – increasing the prospect of a prolonged, unequal struggle ahead.  According to Nicaraguan press reports, turbas and police sharpshooters killed at least 15 marchers in May 30 Mother’s Day protests.  Approximately 100 protesters have been killed in street protests since April 18.  A delegation of the Inter-American Human Rights Commission of the OAS issued a preliminary report after four days of in-country hearings expressing “shock” at the extent and depth of human rights violations.

  • An attempt at national dialogue mediated by the Nicaraguan Catholic Bishops Conference (CEN) was initially suspended after the government delegation, headed by Foreign Minister Denis Moncada, claimed an agenda proposed by the bishops was the route to a golpe de estado, and was once again suspended after the Mothers’ Day killings. Death threats have been issued over social media against Cardinal Leopoldo Brenes and the Auxiliary Bishop of Managua, Silvio Báez.  Báez in particular has pushed for discussion of democracy in the dialogue.  The government has firmly refused to discuss protesters’ demand – endorsed implicitly by the Church – for an expedited election calendar (sooner than the currently scheduled presidential election of 2021).  Bishop Abelardo Mata, the Secretary of the CEN, has taken the position that Daniel and Rosario must go – as popular anger is such their own lives may be at risk.

The protesters, who are generally university students, have refused to respond with force to the turbas’ aggression, although there have been isolated reports of burned vehicles and occasional use of home-made mortars.  They have established tranques (roadblocks) on national highways leading into and out of major cities, including Managua.  Initially opened every hour or two so that traffic could move – and even suspended when a tentative agreement with the government was reached – the tranques have been stiffened to include total blockages of traffic on major routes in response to turba attacks.  Some roadblocks have been thrown up by peasants still angry about the government’s now-defunct deal with Chinese investors to build the “Grand Canal” across the country.  Independent media reports indicate that citizens are blaming Ortega and Murillo for the resulting inconvenience, and previously unpoliticized people are calling for them to step down.

  • While resisting violence, protesters are not engaged in “civil disobedience” a la Gandhi or Martin Luther King, as no one willingly goes to jail. To be taken away by the turbas or the Policía Nacional is to greatly increase the probability that one’s body will turn up in the morgue, according to local observers.  Timely intervention by individual priests has saved some lives, but the Catholic Church increasingly finds itself threatened too.

The Catholic Church’s leadership has been key and benefits from the quiet but crucial support of the business community, including the strongest private sector organization, COSEP.  Many of the dynamics in today’s confrontation are similar to those leading to the collapse of the Somoza government 40 years ago, with one glaring difference: the lack of an opposition martyr on a par with revered journalist Pedro Joaquín Chamorro, who was assassinated in January 1978, 16 months before President Somoza fled into exile.  Ortega is clearly willing to escalate the intimidation of his opponents, but – should an oppositionist of Chamorro’s stature assume leadership of the current protests – the president would probably not wish to see him martyred, assuming the president still controls the forces he has unleashed. Given recent events, it is unclear if the president wishes to see any dialogue reconvened.  If he does, he will probably need to look outside the country for mediation, as the CEN has increasingly sided with protesters over the government.

  •  If the crisis drags on and on, Ortega could conceivably agree to early elections, but the opposition would still be leery of any deal that did not include a wholly new Consejo Supremo Electoral and a commitment to allow all parties to register, which are demands that probably cross a red line for Ortega. As Nicaragua mourns its dead, the anger is unlikely to subside – and an unequal struggle between the government and a generally nonviolent opposition is likely to fester if not explode.

June 1, 2018

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

Mexico: Tough Congressional-Executive Relations Ahead

By Daniela Stevens*

Piñata with the Mexican flag in the background

Bandera mexicana en el Zócalo de la Ciudad de México / Wikimedia/ Creative Commons

Whoever wins Mexico’s presidential election on July 1 probably will face a divided and cantankerous Congress – especially if, as appears likely, Andrés Manuel López Obrador of the Morena Party is the victor.  López Obrador has been ridiculed by the Mexican political class, some of whose leaders have called him the next Hugo Chávez, but most polls give the polemical candidate at least a 10-point lead over Ricardo Anaya of the coalition Por México al Frente.  In Congressional races, polls also give the advantage to López Obrador’s party and its coalition partners, including Partido del Trabajo (PT) and Partido Encuentro Social (PES), under the joint banner of Juntos Haremos Historia.  According to the Parametría poll, 32 percent of respondents intend to vote for Morena, five percent for PT, and two percent for PES.  Other polls give them higher numbers.

  • The formerly hegemonic Partido Revolucionario Institucional (PRI) appears likely to fall to third place due to President Peña Nieto’s poor performance and the party’s association with corruption, while the Partido de la Revolución Democrática (PRD), traditionally the largest leftist party, would be the fourth.
  • Under the most likely post-election scenarios, López Obrador’s coalition would constitute the largest minority in the Chamber but still fall short of the 51 percent absolute majority, except perhaps by the thinnest of margins. Under Mexico’s mixed electoral system – with both majority and “proportional representation” determining the allocation of Congressional seats – the larger parties lure the smaller ones into coalitions, but unity is often seriously challenged during legislative and other battles.

The traditional categories of left and right are growing obsolete in Mexico, as parties and candidates increasingly resort to opportunism rather than act based on loyalty to any particular ideology or party.  Personal and political grudges also often trump political agendas.

  • As a result, an alternative scenario may emerge in which alliances shift after election day in a way that enhances López Obrador’s power. Tensions between the left-leaning PRD and López Obrador, who was its leader for many years, were so deep that the candidate split with it and created Morena as a party in 2014, but opportunists in the party could well jump ship and join him if he wins by a comfortable margin.  In the PRI also, frustration with party leadership could also prompt defections, and López Obrador – a prominent Priista in the 1970s and 1980s – could also harness their backing.
  • Party switching from one election to another has long been a common practice of politicians in Mexico, but only recently have representatives switched parties in the midst of legislative periods. In particular the PRD’s ranks significantly dwindled as legislators elected under its rubric defected to join Morena. Were this to be replicated later this year or next, López Obrador’s congressional majority could be larger than polls suggest.
  • Party discipline in Mexico has been comparatively higher than in other multi-partisan presidential systems such as Brazil, because of the constitutional prohibition of consecutive reelection. In the past, incumbents did not have incentives to serve their constituencies because their careers depended strictly on party leaders, who centralized nominations to elective positions.  From 2018 on, representatives in both Chambers may run for reelection.  The promise of a Morena candidacy can fuel even more defections into its ranks if the party keeps growing its electoral base.
  • If Morena achieves such dominance, the Congress’s commissions, the equivalent of U.S. Congressional committees, could be important partners of López Obrador because the executive delivers proposals directly to them, and they, in turn, issue the final dictamen that the plenary votes on. Juntos’ influence in the commissions would translate into a fairly unexamined prioritization of the presidential agenda.

Even a comfortable victory on July 1 will not assure López Obrador a readily compliant Congress.  Most legislators in the Por México al Frente coalition, which includes PAN, PRD, and Movimiento Ciudadano stalwarts, will certainly constitute an obstructionist opposition.  How successfully they can sabotage the president’s agenda will obviously depend on their numbers, but unity in opposition to Constitutional amendments required by some of his campaign promises appears certain.  Constitutional amendments require a two-thirds majority in both chambers of Congress and in a majority of state legislatures – unachievable in any likely political configuration during a López Obrador administration.  His proposals for revocation of presidential tenure, lowering high-ranking officials’ salaries, and reversing education reforms– which would require Constitutional amendments – thus appear dead on arrival.  Absent reliable Congressional support, López Obrador would also have difficulty passing essential budget and revenue bills and gaining confirmation of important appointees such as the attorney general and key prosecutors.  No candidate would have an easy Congress, but the Mexican parties’ willingness to set aside petty divisions and coalesce behind pressing issues, at least early in the presidential term, appears lower than ever before.  Thus, López Obrador would have a lot riding on the willingness of some sectors of the opposition to defect.

May 24, 2018

* Daniela Stevens is a Ph.D. candidate in Political Science in the School of Public Affairs at American University.

Argentina: The Downside of Gradualism

By Arturo C.  Porzecanski*

Tortoise heads down a dirt path surrounded by greenery

Towards Turtle Path / Maxpixel / Creative Commons

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

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

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

 May 14, 2018

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

 

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

By Robert A. Blecker*

Three people stand at podiums with flags behind them

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

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

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

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

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

May 11, 2018

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

Colombia: Is the Peace Process Failing?

By Christian Wlaschütz*

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

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

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

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

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

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

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

May 4, 2018

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

Colombia’s Elections: With New Comes Old

By Julián Silva*

Two men sit in white chairs during an interview

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

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

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

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

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

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

May 2, 2018

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

South America: Is UNASUR Dead?

By Stefano Palestini Céspedes*

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

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

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

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

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

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

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

April 27, 2018

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

Nicaragua: Approaching an Inflection Point?

By Kenneth M. Coleman*

Protesters burn a large pink metal tree

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

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

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

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

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

April 23, 2018

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