Latin America: COVID-19 Challenges Higher Education

By Eric Hershberg, Alexandra Flinn-Palcic, and Christopher Kambhu*

Left: Classroom in Campinas, Brazil; Right: Universidad de las Américas, Puebla Library

Left: Classroom in Campinas, Brazil/ Wikimedia Commons/ Priscilla Micaroni/ Creative Commons License (modified) // Right: Universidad de las Américas, Puebla Library/ Wikimedia Commons/ Jose Alonso/ Creative Commons License (modified)

The COVID‑19 pandemic has worsened the challenges that Latin American universities already faced and could have a potentially catastrophic impact on higher education in the region.

  • Average gross enrollment doubled – from roughly one-fifth to two-fifths of the college-age population across the region – since the turn of the century, but budget constraints stemming from protracted economic stagnation have left institutions struggling to meet that growing demand. Annual GDP growth languished at 0.4 percent between 2014 and 2019, according to the United Nations Economic Commission on Latin America and the Caribbean (ECLAC). That forced painful cuts at state universities, and private schools have grappled with the stagnant incomes of tuition-paying households.

Due to COVID‑19, ECLAC now projects a regionwide decline in GDP of more than 5 percent in 2020 and forecasts that 29 million people will fall into poverty and 16 million into extreme poverty. To gauge the impact on higher education in the region, last month CLALS surveyed officials at more than 50 Latin American universities. (Read the full report.) More than half are in Brazil, where President Jair Bolsonaro has already slashed public university budgets, but the survey results show substantial adverse impacts throughout the region as well as deep trepidation about future prospects. Highlights our survey revealed:

  • Nearly three-quarters of universities have transitioned to some degree of online instruction since closing campuses in March, but 90 percent of respondents said that some students, because of socio-economic and territorial disparities, are having difficulty accessing the internet. Half of survey respondents considered that their institutions were “well-prepared” or “somewhat prepared” to make the transition, but half deemed their institutions to have been inadequately prepared. Fewer than half of the institutions represented had taken steps to address students’ need for connectivity, and in some instances, particularly in public schools, this gap was a factor in the decision not to move instruction online.
  • Most respondents believe that on-site classes cannot resume for some time; only a third at private institutions and a fifth at public institutions (mostly in Brazil) anticipate offering courses on campus through August 2020. As for the remainder of 2020, respondents were divided evenly on the prospects for reopening their campuses.
  • Fully 84 percent of respondents predict a drop in undergraduate registration, with half estimating a 10 to 25 percent decline. Predictions are only slightly better at the graduate level. Roughly two-thirds of the institutions surveyed host some international students, and of those, 60 percent of respondents from public universities and 30 percent from private institutions predict enrollment to decline by more than 50 percent.

Our survey leaves little doubt that Latin American universities are facing their greatest crisis in decades. Continued expansion of higher education institutions – one-quarter of which have been created since the early 2000s – now appears implausible.

  • Declining enrollments portend severe reductions in revenue. Half of respondents report cuts during the current fiscal year, and only one in 10 anticipate stable financing next year – with most expecting cuts of 10 to 30 percent. Hiring freezes are already widespread, and salary cuts loom on the horizon.

The responses to our survey may actually underestimate the depth of the dislocation in store. To re-open their doors, institutions will have to make substantial, unanticipated investments to ensure the safety of students and staff – reconfiguring facilities and developing testing and isolation protocols that will be extraordinarily difficult to implement.

Students will need additional support as the pandemic affects their families, campuses, and communities. Nearly three-quarters of respondents to our survey regionwide, and 96 percent in Brazil, indicated that their institutions provide psychological support services for students. There was virtually unanimous agreement – 96 percent – that these needs will increase over the coming two years.

  • An estimated 700,000 people in Latin America and the Caribbean have contracted the virus so far, and more than 35,000 have perished. In most countries these numbers are rising rapidly. In an increasingly bleak landscape, there is reason for concern that Latin America’s university sector may prove to be yet another victim of COVID-19.

June 2, 2020

* Eric Hershberg is Director of the Center for Latin American & Latino Studies and Professor of Government at American University. Alexandra Flinn-Palcic and Christopher Kambhu are Program Coordinators at the Center. Read the full report.

El Salvador: How Much has COVID-19 Hurt President Bukele?

By Héctor Silva Ávalos*

President of El Salvador Nayib Bukele

President of El Salvador Nayib Bukele/ Wikimedia Commons/ Creative Commons License/ Official Photography from the Presidential House of El Salvador

Salvadoran President Nayib Bukele – Latin America’s most popular leader one year into his presidency– has raised concerns about his Administration because of his authoritarian approach to governing and managing the COVID‑19 pandemic. He won kudos for his strong and early effort to stem the spread of the virus, scoring a 95 percent favorable rating in a recent La Prensa Gráfica poll. But the resulting economic downturn – and his obvious frustration at the need to engage in political give-and-take as he tries to respond – are fragmenting his alliances and highlighting his Administration’s weaknesses.

  • The anti-COVID measures that Bukele instituted back in March were among the first and most bold in Central America, winning him strong domestic and international praise. He closed airports and public schools, enforced isolation-in-place, and ramped up government assistance to hospitals and vulnerable citizens. As remittances from abroad to families in El Salvador nose-dived, a sustainable aid program became even more important.

The crisis has brought to light some of the President’s weaknesses as a manager and leader, however, and how he has compensated with increasingly authoritarian measures, such as a move to augment spending without Congressional approval, that have alienated many. In social media, he has cyber-bullied opponents, and critics report an increase in harassment by government authorities over taxes, labor practices, and other regulatory issues. He has pushed away former political allies in the country’s two strongest parties – ARENA and the FMLN – and thereby reduced his mobilizational capacity in both San Salvador and the departments. The President had resorted to such tactics even before COVID‑19 – he directed heavily armed police and soldiers to occupy the National Legislature back in February during a confrontation over budget issues – but the pandemic has sparked an escalation.

  • As the scope of the pandemic has hit home since March, Bukele has taken actions that, although conceivably attracting popular support, have drawn strong pushback. The Supreme Court overruled his attempt two weeks ago to unilaterally extend emergency measures that would allow him to continue unchecked public spending to deal with the pandemic. The Attorney General is also investigating whether actions by the President and senior staff amounted to criminal behavior.
  • Public protests have begun in forms appropriate for the age of social distancing – cacerolazos, car honking, protest music, and other signs of anger. International human rights groups have also begun expressing concern about the implications of the government’s rough enforcement of pandemic measures. Bukele directed police to be harsh against and detain individuals perceived as violating quarantine, even as they ventured out in search of food for their families. Amnesty International and others have criticized “arbitrary detentions and excessive use of force,” and Human Rights Watch has criticized Bukele’s “flagrant disregard of the role of the Supreme Court” and called on the Organization of American States (OAS), which has remained silent, to “push Bukele to respect the rule of law.”

El Salvador is now nearing one hundred COVID cases per day, and the public health system is pushed to the limits. The economy, which has already ground to a halt, almost certainly is sustaining long-term damage that will prove increasingly costly politically for Bukele. While his personal popularity has held so far, his honeymoon with the economic and political sectors upon whom he depends to move forward ended months ago and – short of a drastic overhaul in his approach – he seems likely to continue facing a number of challenges. In his most recent move, he got into a fight with Congress when the legislative body rejected his request to postpone the state of the union address scheduled for June 1. His staff keeps struggling with ARENA and the FMLN in Congress to pass one last amendment that would allow him 15 more days of unchecked spending to deal with COVID‑19.

  • The pandemic has laid bare a number of social, economic, and institutional problems about which Bukele could push a broad national debate aimed at driving reforms. Popular distaste for the business elites as well as ARENA and the FMLN give him space for such a venture. But, at least as evidenced in recent months, his concerns about his personal power seem likely to preclude any such initiative.
  • U.S. support for Bukele has been crucial and shows no sign of abating in the immediate term. But growing human rights concerns beyond the Administration of President Donald Trump, including among Members of the U.S. Congress, if not addressed, will become a liability.

May 29, 2020

* Héctor Silva Ávalos is a senior researcher and editor at InSight Crime and former CLALS fellow.

 

Chile: Need to Broaden Support for Public Policies

By Claudio Grossman*

President Piñera speaking from a podium

President Piñera calls for agreements on coronavirus crisis and on social protection plan, jobs and economic reactivation/ Prensa Presidencia, Gobierno de Chile/ Public Domain

Chilean President Sebastián Piñera, after several months of relative calm stemming from political agreements and social policies forged last November, now faces a more complex and potentially dangerous set of challenges. Until last week, it seemed that the political scenario, while complicated, could turn better for him. A broad agreement to hold a referendum on reform of what remained of Pinochet’s Constitution – perceived as the obstacle to fair pensions, access to quality health and education – was signed in November by all the political actors in the country (except the Communists, some of their allies, and other groups on the left).

  • The agreement is credited with having an important impact in reducing public demonstrations demanding social change despite continued dissatisfaction with the government and the political system in general. By creating a path for transformation, it also contributed to significantly reducing public tolerance for violent actions such as looting, burning Metro stations, and attacks on churches.
  • Chile’s low public debt and significant reserves also allowed the government to adopt urgent economic measures to address at least some of the most extreme examples of unfairness (e.g., meager pensions).
  • In response to national and international human rights observers, including the UN and Organization of American States (OAS), identifying serious violations of human rights during the social protests, the government announced plans to undertake reforms – notably of the Carabineros. They are the police body blamed for weak intelligence-gathering and training and for its inability to maintain public order in accordance with human rights norms.

While Piñera’s popularity remained in the single digits until March – his own political base had become disillusioned with his strategy of constitutional reform – the social conflict appeared mostly channeled in the legal, institutional framework of Chilean society. The Chilean summer, during which the country typically moves in slow motion, also helped reduce social tensions. When the first wave of COVID‑19 hit Chile in March, the reaction of the government – a selective quarantine strategy focusing on areas with the most cases – seemed to be containing the spread of the virus without shutting down the whole economy. The health system was not overwhelmed; Congress, the Judiciary, and other institutions continued to work; and civil society operated freely. Piñera’s approval in the country rose from a squalid 9 percent to 28 percent. Congress, where the government does not have a majority, agreed to move the referendum from April to October – showing an important degree of consensus in the political system. The President’s fortunes might shift, however, as the virus moved from affluent neighborhoods to the more populous barrios in Santiago.

  • The infection has increased exponentially, forcing the hand of the government to announce on May 13 a total quarantine of the sprawling Metropolitan Region (MR), affecting almost 8 million people. Piñera announced that the government would start distributing food packages to 2.5 million low-income households, but protests – driven by complaints that it was too little and too late – followed almost immediately. Santiago again experienced barricades in some neighborhoods and renewed clashes with the police. Some protesters claimed that distributions have privileged some areas based on political grounds. For others, some, if not all, of the protests might have been politically motivated.

As the numbers of infections continue to increase, it seems that the quarantine will not cease soon, with the danger of an increase in protests and calls for social reform fueled this time by the lack of work and means of subsistence of millions in the MR. In the dramatic context created by COVID‑19, a crucial question is whether the current political path – increased social assistance and the Referendum in October – will be feasible. The forthcoming flu season in Chile (June-August) can only compound an already grave situation and bring into sharper relief underlying social tensions.

  • Postponement of the referendum as well as other elections due to take place this year can happen only by legal changes that require the opposition’s agreement. In light of the serious challenges facing Chile, broadening the base of governability of the country might be a daunting task. The President and his center-right coalition and a divided opposition might encounter great difficulty finding creative formulas to identify and implement common goals. Politics, and in particular democratic politics, need to respond properly to the gravity of the tremendous economic and social impact of COVID‑19, including seeking to achieve substantive agreements encompassing basic principles to be included in a possible new Constitution. While it is too soon to tell what will happen, time is running short.

May 26, 2020

* Claudio Grossman is Dean Emeritus and a professor at the Washington College of Law.

Latin America: Organized Crime Taking Advantage of COVID-19

By Carolina Sampó*

Favela in Rio de Janeiro, Brazil

Favela Villa Canoas, Rio de Janeiro, Brazil/Phillip Ritz/Flickr/Creative Commons License (not modified)

Latin American criminal organizations have faced some new challenges during the coronavirus pandemic – such as disruptions in transportation routes and markets – but they have also exploited opportunities to expand operations in ways that further threaten governments’ control in vulnerable communities.

  • Shelter-in-place controls in the region and the United States have complicated the groups’ most profitable business area: drug trafficking. Moreover, breaks in supply chains, especially those related to chemical precursors from China, have caused shortages of fentanyl, a synthetic opioid preferred by U.S. drug users, and ingredients used to make methamphetamines.
  • Trafficking of cocaine and other plant-based drugs has not stopped within Latin America, although some reduction in their movement to market has driven up prices somewhat. Quarantines have posed new difficulties for transportation, but traffickers usually avoid legal border crossings and pass through areas with no or minimal government presence anyway. Governments have also moved detection and interdiction resources elsewhere. Brazil, as the region’s main consumer, still seems to be receiving regular shipments of cocaine.
  • Shipping drugs outside the region has been more difficult because airports are closed and commercial ship traffic has declined, but criminal organizations have accepted to run the risks of continuing their own maritime activities, which raises the price to consumers. Authorities say that cocaine shipments tend to be large – over one ton – and narco-submarines are being used.

Supply and demand have both declined during the coronavirus outbreak, but prices of meth and synthetic opioids have risen considerably – some even tripling in recent weeks, according to U.S. official sources. Demand from consumers of illicit drugs at parties is down with the implementation of social distancing, but dealers in food delivery services are distributing their merchandise directly to users’ homes. Supply and demand seem to be balanced, but dealers are charging higher prices for their enhanced service and greater risks.

As in the past, criminal organizations are showing high adaptability. International experts report the groups are increasingly getting involved in cybercrime. They have also been caught peddling counterfeit medical items. Interpol has seized substandard masks and sanitizers as well as drugs the gangs claim will help people combat the virus. The pandemic has also enabled criminals to deepen their ties with vulnerable communities, such as by providing essential goods and services.

  • They are consolidating criminal governance in the communities where they play the role of social order providers. In the slums in Rio de Janeiro, for example, the criminal organizations have been the ones to enforce lockdowns to stop the spread of COVID‑19. Where criminal organizations cannot guarantee social order, they use violence or cooptation to establish territorial control. And they continue efforts to expand prison control, using jails to recruit members and build their power base. During the coronavirus outbreak, the gangs have organized riots and jailbreak attempts in Argentina, Brazil, Colombia, Peru, and Venezuela. Power in the prisons projects into power on the streets.

The pandemic has forced governments to prioritize resources on the health and economic crises it is causing, and efforts to control criminal organizations have by necessity been more lax. The gangs are also scrambling to return to “normalcy,” but they are again demonstrating greater adaptability than are the governments.

  • Governments have no easy solution. While organized crime is diversifying its portfolio of activities, reinforcing its territorial control, building its prison base, and recruiting new members – exploiting the economic and social situation – governments have little choice but to beef up efforts any way they can domestically while paying special attention to cooperation with neighboring countries facing similar challenges, in hopes of hemming in the criminal organizations. It is a huge challenge – against difficult odds – but perhaps the pandemic also gives governments a one-time opportunity to hit the gangs at a time that they face challenges too.

May 22, 2020

* Carolina Sampó is Coordinator of the Center for Studies on Transnational Organized Crime (CeCOT), International Relations Institute, La Plata National University, and a researcher at the National Scientific and Technical Research Council (Conicet) and Professor at the Buenos Aires University.

Central America and the Pandemic: Different Priorities and Risky Bets

By Alexander Segovia*

Presidents of Central America participate on a SICA virtual meeting

Reunión Extraordinaria de Presidentes del Sistema de la Integración Centroamericana (SICA)/Flickr/Creative Commons

In most Central American countries, the social dimension of the COVID‑19 emergency has competed with economic priorities, and in some it hasn’t even been a top priority. Governments have responded independently of one another, showing little regional coordination aside from a $1.9 billion Regional Contingency Plan approved by the Sistema de la Integración Centroamericana (SICA) and funded by the Central American Bank for Economic Integration (BCIE), to support national-level efforts.

El Salvador has designed a response strategy that prioritizes the health dimension of the crisis, not the need for economic recovery. The rigorous implementation of stay-at-home and social isolation measures has caused a number of problems, including essentially shutting down the economy, with enormous political costs. The Legislative Assembly authorized the government to issue coupons worth $3 billion to help families get by, causing a significant increase in the country’s external debt and fiscal deficit.

  • The Salvadoran response has been well-received by the population so far, but this could change quickly in the face of the high economic and social pain it has caused. Moreover, the authoritarian and militarist way the confinement regulations have been enforced, and the government’s lack of respect for the Constitution and the separation of powers, have also troubled many.

Nicaragua is the opposite case of El Salvador. The government has refused to adopt social isolation measures and has encouraged people to take to the streets and participate in large events. The Ortega Administration’s concern is about the economy, which has been in a deep crisis since the social protests in 2018 and the government’s repressive reaction to them. This priority partly explains the government’s resistance to implementing shelter-in-place and social-distancing regulations.

  • The government is playing with fire. If the health crisis spins out of control, it will cause both a great loss of human lives and a profound socio-economic crisis – which sooner rather than later will spark a social and political crisis of massive proportions.

Costa Rica, with its good universal health care system and the region’s most developed state infrastructure, is best prepared. Its initial response to the health emergency was slow and permissive, reflecting a government decision to confront the crisis in a manner that causes the least damage possible to the economy. It has since acted more decisively and has suffered only 10 deaths from COVID‑19.

  • Costa Rica is the only country in the region trying to finance the additional costs by reducing non-priority public expenditures and by introducing a temporary solidarity tax on capital gains and on the salaries of higher-paid managers in government and the private sector, who have economic security and safe jobs.

Guatemala is implementing a response in which the health emergency is competing with leaders’ desire for economic recovery. This reflects the enormous influence over the government and Congress enjoyed by the economic elites, who hold sway over public policies and have a veto over any that affect their interests.

  • By putting the social and economic challenges on an equal plane, the elites have demonstrated, in what they see as a politically correct way, their ability to equate human life with the accumulation of capital.

Honduras has implemented a strategy that gives insufficient attention to the health crisis by assigning higher priority to containing the economic impact. Its response has been fragmented and confusing; it combines emergency measures with economic recovery actions that will take effect only in the second half of the year. In addition, policymaking processes have been opaque, and there are no guarantees that public funds will be used transparently.

  • Concerns that the crisis has also given rise to greater militarization of the country and an increase in human rights violations by security forces are also mounting.

The best way for Central America to confront the COVID emergency is through energetic responses focused on containing the health crisis – with effective stay-at-home and social-distancing measures – and strengthening of social protection systems and programs, including direct financial payments to households. These policies should be backed up with broad political and social agreements and sustained with absolute respect for democracy and human rights.

  • Preliminary evidence indicates that, while addressing the health crisis has high costs in the short term, delaying that investment increases the number of deaths and leads to a deeper and longer economic crisis. Central American governments and economic elites have a clear choice: pay a smaller price now combatting the virus, or pursue short-term benefits and pay a much higher price in the long run.

* Alexander Segovia is a Salvadoran economist. This blog article is based on and updated from an analysis originally published here by Análisis Carolina in Madrid.

Ecuador: Growing Political and Economic Repercussions of COVID-19

By John Polga-Hecimovich*

Lenín Moreno speaking at an event

Lenín Moreno, presidente de Ecuador/Flickr/Creative Commons

Despite early aggressive measures against COVID‑19, Ecuador has suffered one of the world’s most devastating outbreaks that, combined with the drop in international oil prices, may be catastrophic for the country’s economy and for President Lenín Moreno. Since March 16, the President declared a national state of emergency and curfew throughout the country; imposed strict social isolation (until May 4) that suspended all face-to-face activities; and established a special security zone in the province of Guayas, epicenter of the pandemic. Even so, Ecuador currently has the second-highest number of documented cases in South America, after Brazil, and the death toll from COVID‑19 may have reached between 7,600 and 11,000 during April.

  • Ecuador’s first case of COVID-19 was detected on February 27 in the port city of Guayaquil. As the virus spread in March and early April, the city experienced an unprecedented humanitarian crisis due to the much-publicized accumulation of hundreds of corpses in homes and on the streets. The local government’s response was erratic, with mayor Cynthia Viteri at one point ordering officials to block the runway at the airport to prevent a flight from Spain from landing, and later comparing the devastation to “the Hiroshima bomb.” Viteri has since estimated that perhaps as many as one-third of guayaquileños have COVID‑19.

Despite the lockdown measures, the national government has also shown a lack of capacity in addressing the public health crisis. Moreno created a task force to deal with the situation in Guayaquil, but even then, the government possessed a limited ability to determine who had the virus, to say nothing of addressing shortages of suits, masks, gloves, and ventilators for hospital personnel. In a national address in early April, the President acknowledged that official coronavirus figures had significantly understated the extent of the country’s health emergency. There have also been worrying accusations of corruption against officials in the Ecuadorian Institute of Social Security (IESS) in outfitting hospitals, and the Attorney General’s office charged the now ex-National Secretary of Risk Management Alexandra Ocles with influence-peddling.

  • The combined impact of the pandemic and oil crisis on the country’s economy may be catastrophic. Petroleum is Ecuador’s largest export commodity and accounts for about a third of its public-sector revenue. The 2020 national budget was planned with an oil price of $51.30 per barrel (currently hovering around $30.00), which will increase the country’s deficit. Ecuador also has little savings to implement a countercyclical fiscal policy and is on the brink of defaulting on its $50 billion debt. Adding to the troubles, due to dollarization, it cannot devalue its currency to reduce its deficit. The collapse of export revenues and massive foreign debt payments have greatly compounded the economic cost of the pandemic, and the country’s GDP may shrink by as much as 7-8 percentage points.
  • The government is just barely muddling through. Private bondholders have accepted the government’s request to defer interest payments on the country’s debt until August 15, freeing up $811 million and buying Moreno some breathing room. However, this could merely postpone a default: a fragmented and intransigent legislature and social sectors have balked at emergency austerity measures. Responding to the country’s social needs and economic well-being is a difficult line to walk. The government has issued a $60 stimulus (bono) that will benefit some 400,000 people, while at the same time it submitted a bill to the National Assembly that proposes an extraordinary tax on both companies and individuals to bring unbudgeted resources into the national treasury.

While the government confronts its public health and economic problems, general elections are nine months away and the National Electoral Council is already debating ways to carry them out. There is too much uncertainty at the moment to determine any potential frontrunner. Moreno is not running for re-election; ex-Guayaquil Mayor Jaime Nebot has suffered due to his city’s lack of preparedness at confronting the pandemic; and the fate of Interior Minister María Paula Romo may rest on the Moreno government’s (so far unconvincing) response. Like leaders around the globe, Moreno is faced with the unpleasant challenge of keeping the country’s economy shuttered longer or risking a resurgence of the virus. The success or failure of his strategy will undoubtedly shape the country’s political and economic future.

May 15, 2020

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

The Other Pandemic

By Alan M. Kraut*

Donald Trump speaking to supporters

Donald Trump speaking to supporters at an immigration policy speech at the Phoenix Convention Center in Phoenix, Arizona. / Flickr / Creative Commons License

The coronavirus has sparked a virulent wave of racism and intolerance in the United States – as seen in past pandemics – but strong leadership can blunt or even stop it. The current wave echoes a contemporary ethnocentric nationalism that has infected many societies and political leaders around the world.

  • U.S. President Donald Trump denounced the anti-Asian prejudices – including epithets and, at times, spit and punishing blows against Chinese-Americans – that were stirred by his own use of the terms “foreign virus” and “Chinese virus,” but the damage was done. A community was put on notice, “You are the ‘other’ and you endanger us all by your presence.”

Throughout human history, groups defined by race or religion have been persecuted because of their association with disease. The Black Death of the Middle Ages was blamed on Jews, triggering ferocious physical persecution that resulted in tens of thousands of deaths, often by torture. Sociologist Erving Goffman observed that the most essential version of stigma was the abomination of the body – because the disease-causing contagion cannot be detected with the naked eye or easily avoided.

  • Throughout American history, epidemics have often been blamed on a specific immigrant or ethnic group and triggered anti-migrant policies. A cholera epidemic in 1832 was blamed on Irish Catholic newcomers who were poor and lived in congested conditions. The anti-Catholic passions of Protestant evangelicals were a factor.
  • Before the Quarantine Act of 1878 quarantine powers shifted from the states to the federal government. Each state had its own laws and immigration depots, such as Castle Garden in New York, which opened in 1855. Later, at federal depots, physicians used increasingly sophisticated medical instrumentation and diagnostic techniques to admit the healthy and those sufficiently robust to support themselves, but their expertise did not curb xenophobic hysteria or the association of immigrant groups and their behaviors with specific diseases. Chinese laborers were blamed for bubonic plague in the San Francisco area in the 1880s, and Italians were blamed for a polio epidemic that swept through the east coast of the United States in 1916. Anti-Semitic xenophobes dubbed tuberculosis the “Tailor’s Disease” or the “Jewish Disease” despite the lower rates of the disease in Jewish communities than in many non-Jewish communities in the United States.

Xenophobia and racism have not always surged in the United States during pandemics – thanks to greater public awareness of immigrants’ contributions and to strong political leadership.

  • There were fewer incidents of xenophobia during the 1918 influenza pandemic because immigration declined dramatically (from 1,218,480 a year in 1914 to 110,618 in 1918), and critics found it awkward to blame newcomers because over half a million foreign-born soldiers of 46 different nationalities were serving in the U.S. military.
  • Many Presidents of both parties since then have not hesitated to encourage Americans to call upon the better angels of their nature with respect to the foreign-born. Sitting in the shadow of the Statue of Liberty, Democratic President Lyndon Johnson signed an immigration act in 1965 that abandoned the most restrictive immigration policy in American history and replaced it with a more welcoming policy. Years later, former Republican President George W. Bush echoed those sentiments, noting that “America’s immigrant history made us who we are.”
  • Xenophobia during an epidemic may be a “social ritual” that reaffirms a hypernationalism in the native-born, but when the drama concludes and the curtain descends, the prejudice and acts of discrimination can either transfer to a different stage or leaders can lead us away from them.

Little such leadership has come from the current occupants of the White House. Presidential advisor Stephen Miller and his allies claim that stopping new arrivals crossing the country’s southern border is necessary to preserve public health from illnesses borne by migrants. In 2018, the surge of migrants toward the border led to inquiries that Miller hoped would reveal – but did not – the spread of highly contagious diseases that endangered residents of states where they settled. More recently, Miller has encouraged the President to use his public health powers to seal the borders. One such federal law, the Public Health Service Act of 1944, allows the Surgeon General and the President to exclude from the U.S. individuals who might pose a danger because they could bring in “communicable diseases.” Ironically, while it has been Miller’s intention to target Latinos, many of them are doing the “essential work” that has kept the nation going during the crisis – in meat processing plants, grocery stores, and hospitals, where they are involved directly in the care of Covid-19 patients. Many thousands of those providing patient care are Latino “Dreamers” protected by the Deferred Action for Childhood Arrivals (DACA) program that the White House wants to end.

May 12, 2020

* Alan M. Kraut teaches history at American University.

Brazil: Presidential Lockdown?

By João Jarochinski Silva*

Bolsonaro Questioned

Bolsonaro addresses the press, May 2019/Palácio do Planalto/ Flickr/ Creative Commons License

Brazilian President Jair Bolsonaro faces mounting crises that could cut short his term in office and prolong Brazil’s multi-year political turmoil. The departure last month of two of his most widely respected cabinet members – Health Minister Luiz Henrique Mandetta and Justice Minister Sérgio Moro – came on the heels of other bad news as Bolsonaro completed his 16th month in office.

  • Brazil’s GDP grew only 1.1 percent in 2019 despite the government’s promise that pension reform and other measures would make it almost double that. Most of the growth, moreover, came from the informal sector, not the entrepreneurial class that was expected to back Bolsonaro. Moreover, all predictions are that economic performance will decline significantly because of COVID-19.
  • A number of disputes have significantly eroded his political base. In his first year as president, he left the Liberal Social Party (PSL), which gave him a home and crucial help in his campaign and early days of government. Since November, he has been trying to create a new party, Aliança pelo Brasil, but it is unlikely that he will have it ready to participate in this year’s municipal elections (Brazil has 5,000 municipalities) or able to attract politicians, mainly deputies and senators, to form a consistent base in Congress. These likely failings will affect the party budget and its TV time in the national elections of 2022. Social media was central to Bolsonaro’s successful formula last year, but observers wonder if the magic will remain.

In this context, his decision to fire Mandetta and Moro’s decision to resign are particularly severe blows.

  • Bolsonaro and Mandetta had clashed over how to deal with the COVID‑19 crisis. Bolsonaro wanted to reopen some sectors of the economy, but the minister – with apparently strong public support – sought to follow the international protocols established for “flattening the curve” to protect the health system from collapse.
  • Moro disagreed with the President’s decision to fire the commander of the Federal Police when investigations appeared to be closing in on some activities of his sons. As lead ex-judge of the Lava Jato investigations, when Moro joined the administration, he brought credibility among some sectors to the Bolsonaro government’s stated commitment to anti-corruption. Moro’s speech on leaving the ministry suggested that he felt betrayed.

Bolsonaro’s strategy at this point appears to focus on reaching out to two constituencies that he considers reliable: Evangelical Christians and the military.

  • Two of his sons, while managing to keep their government positions, shifted to the Partido Republicano, which has strong links with the Universal Church of the Kingdom of God and the second most-watched TV channel in Brazil, and other Evangelical groups. These groups are historically linked with the Centrão, a group of parties that do not have long-term political allegiances but support anyone who promotes their most immediate interests on issues such as federal administration and control over some areas with great budgetary power in the government.
  • Bolsonaro has also given the military a central political role in his government. Several government posts are held by retired and active-duty military officers, some of whom, like Moro, brought good levels of public approval to the administration. Some were seen as agents capable of taming Bolsonaro’s impulsiveness, even if evidence of success has been lacking. By lashing himself to military officers, however, Bolsonaro has tied the armed forces to his own fate and essentially coopted the officer corps into supporting him. In the event of an impeachment or other trauma, Vice President Hamilton Mourão, a retired general, and others would be held responsible for the government’s failure.

At this point, there is no good scenario for the Bolsonaro government – and COVID and other factors raise the specter of very bad scenarios in which courting the Centrão will be costly politically and financially. His alliances with the Centrão and the military also put at risk what little credibility he may have had remaining on anti-corruption after Moro’s defection. The military may not always want to be the guarantors of the government for public opinion.

  • The military will assume a technical role in dealing with the consequences of the coronavirus, including managing the impact of the economic decline such as a worsening of social tensions, but the results in terms of governance are unpredictable.
  • As Bolsonaro gropes for a way ahead, Vice President Mourão seems unlikely to willfully trip him up. Despite investing in a more thoughtful and responsible image than the president, he has not projected himself as an alternative. But the pressures for impeachment could mount steadily. Former Justice Minister Moro will be an important factor in any future scenario, but he will have to face angry supporters of Bolsonaro, mainly on social networks. A deep sense in the ranks of the other parties that he had a political agenda and lacked impartiality in the trials related to former President Lula by the Brazilian Supreme Court promises to continue the fireworks.

May 5, 2020

* João Jarochinski Silva is a CLALS fellow and professor at the Universidade Federal de Roraima (UFRR).

Regionalism in the Time of Coronavirus: The Only Way Forward?

By Leslie Elliott Armijo*

Coronavirus Latin America

Map of the COVID-19 outbreak in Latin America as of 30 April 2020/ Pharexia/ Wikimedia Commons (modified)

To overcome the multiple challenges of the COVID‑19 crisis, Latin America’s leaders will need to build regional cooperation around pragmatic solutions – an elusive goal for countries with a legacy of disunity and weak collaboration. The coronavirus has hit at a moment of economic vulnerability. Regional growth averaged only 1.9 percent in 2010-19, worse than in the “lost decade” of the debt-crisis 1980s (2.2 percent). Labor productivity, which in 1960 was almost 250 percent of the world average, has fallen steadily in every subsequent decade, and in 2019 sat at a mere 90 percent of the global mean. Persistent squabbling among Latin countries has meant that major global trading states, including the United States and more recently China, could dictate the terms of bilateral trade and investment agreements in ways that favored these larger powers.

  • In negotiating global trade, Latin America and the Caribbean have shown little shared identity or cohesion, whether as a region or as sub-regions. As of late 2018, as global value chains coalesced around three regional hubs – China/East Asia, U.S./North America, and Germany/European Union – Mexico, Central America, and the Caribbean were linked to the U.S. but lacked bargaining power to seize more advantageous positions vis-à-vis the United States. South America has deindustrialized since the turn of the century, returning to its historic role of commodity exporter to all three hubs. Intra-regional trade as of 2017 was only 22 percent of all Latin American trade and had fallen since 2013.
  • This is a shaky foundation from which to face the health and economic challenges of COVID‑19. The IMF’s scenario, which assumes an optimistic return to business mostly-as-usual in the third quarter, predicts a contraction of GDP in 2020 of 5.2 percent in the region, driven by brutal collapses in the two largest economies, Brazil and Mexico, of -5.5 and -6.6 percent respectively. The extra-regional markets for Latin America’s exports certainly will shrink due to both short-term reasons of global depression and longer-term ones of enhanced economic nationalism abroad. Remittances and tourists from the U.S. and elsewhere will not return to their previous numbers for a long time.

A coronavirus-solidarity virtual summit last month showed that some regional leaders realize the need for joint action. Nine of 12 South American presidents participated, although Brazilian President Jair Bolsonaro – who has made intemperate and dismissive remarks about his fellow leaders – gave his seat at the video conference to his foreign minister, Ernesto Araújo.

  • Argentine President Alberto Fernández participated despite Bolsonaro’s snub (including on previous occasions) and his previously chilly relations with the sponsoring body, PROSUR, founded in 2019 by center-right Presidents Iván Duque of Colombia and Sebastián Piñera of Chile as an explicit counter to the pre-existing regional body, UNASUR, which leaned left during the presidency of Bolivia’s Evo Morales (now in exile in Argentina). In so doing, Fernández demonstrated the pragmatism and understanding that Latin American and Caribbean leaders often eschew: if you want to solve policy challenges, you must maintain dialogue with people with whom you disagree.

If there is any light at the end of this tunnel, it could be psychological, as crises tend to focus minds. The disruption in international relations beyond Latin America probably will accelerate the move away from the post-Cold War “unipolar moment” and fuel domestic economic nationalism that will shake up the three major global trading hubs – a reorganization in which the region could redefine its place. In this scenario the best defense for Latin America is a strong offense. As Alicia Bárcena, Executive Secretary of the UN’s Economic Commission on Latin America and the Caribbean (CEPAL), said recently, the region’s resilience likely depends on “investment in strengthening regional production chains” to create “complementarities in production structures and regional integration.”

  • Diplomacy enables states to share knowledge and engage in collective action to meet real cross-border challenges, including those of the current crisis. Regional solidarity does not require headquarters buildings, formal treaties, and summit pageantry, nor even similar domestic political systems. The considerable achievements of the loose, informal clubs known as the G7, the G20, and the BRICS prove the value of cooperative models that need not boast costly institutional scaffolding. The Association of Southeast Asian Nations (ASEAN), formed in 1967 by 10 countries that were at least as mutually suspicious of one another as they were of China, provides another lesson about somewhat effective regional cooperation that Latin America would do well to note.

April 30, 2020

* Leslie Elliott Armijo is an associate professor at the School for International Studies, Simon Fraser University, Vancouver. Her most recent book, coauthored with C. Roberts and S.A. Katada, is The BRICS and Collective Financial Statecraft (Oxford University Press, 2018).

Argentina: Yet Another Generalized Default?

By Arturo C. Porzecanski*

Argentine Vice President Cristina Fernández de Kirchner and Argentine President Alberto Fernández during a working meeting with governors last week/ Casa Rosada/ Creative Commons

The Argentine government’s current attempt to force investors to accept a punishing debt-restructuring plan puts the country at risk of yet another sovereign default on foreign-law, foreign-currency debt. The attempt validates the massive loss of confidence that took place last August, when local and foreign investors ran for the exits in the wake of the unexpectedly strong performance of the Alberto Fernández-Cristina Fernández de Kirchner ticket in the country’s presidential primaries.

  • Confidence had already been set back in early 2018, after a series of disappointments with how then-President Mauricio Macri was running overly loose fiscal and monetary policies that encouraged excess government borrowing and facilitated capital flight. Macri’s decision to turn to the IMF for a huge bail-out loan in exchange for a modest fiscal and monetary belt-tightening shored up confidence, but the prospect of Peronism’s return to high office undermined investor confidence anew, causing a steep plunge in Argentina’s stocks, bonds, and the currency from which it has not recovered.

Fernández had a window of opportunity to provide confidence to local and foreign investors – following the example set by Brazil’s Lula da Silva back in mid-2002, when his pulling ahead in presidential polls sparked the beginning of a market rout in that country. However, all that Fernández has done is blame Macri for all that was going wrong, denying that mistrust of Peronism was also a factor in deepening the financial and economic crisis.

  • Absent any reassurance, investors have been reluctant to show up at auctions of new peso- and dollar-denominated treasury bills, preferring to cash out of positions whenever those obligations matured. Therefore, even before Fernández took charge in December, Macri was forced on one occasion to unilaterally postpone repayments of treasury bills falling due.
  • Fernández has institutionalized the practice of deferring by decree the majority of payments coming due each month, thus defaulting time and again on most peso and dollar obligations subject to Argentine law and jurisdiction. Until very recently, however, he and the Governor of the Province of Buenos Aires, Axel Kicillof, were honoring their obligations contracted under New York law and jurisdiction.

The coronavirus disrupted a less investor-unfriendly alternative devised by Fernández to avoid a repeat of the massive default, financial isolation, and bruising legal defeats (in New York courts) that his predecessors had suffered during 2002-2015. The idea was for federal and provincial governments to develop debt-restructuring proposals and present them to bondholders by mid-March, in order to obtain by mid-April creditor approval of a deferral of payments coming due during 2020-23.

  • To cushion the blow of the pandemic, the debt-restructuring plan, delayed to mid-April, included terms and conditions that were substantially worse for bondholders. Investors holding $66 billion of bonds are being asked to write off some principal and most interest payments throughout the decades-long life of new bonds to be issued in exchange for existing ones, in a proposal that would impose (net present-value) losses on bondholders averaging at least 60 percent. The Province of Buenos Aires has presented a similarly aggressive debt-restructuring plan.

A critical mass of investors has spoken out against the government’s proposal, including outright rejections by three groups of bondholders who could block any deals. To ratchet up the pressure, the federal government skipped a $503 million payment due on April 22, setting the clock running on what could easily turn into Argentina’s ninth sovereign default on foreign-law, foreign-currency debt.

  • One constructive way for Argentina to break the impasse with its private creditors would be to ask fewer concessions from them by deciding to seek new financing from, or else a rescheduling of debt service due to, the IMF. This would be achieved by requesting support under a longer-term Extended Fund Facility. Because Argentina’s program with the Fund was a short-term standby facility, under which $44 billion were disbursed, the whole amount plus interest is to be paid back in full between now and 2024. These scheduled payments to the IMF amount to more than 40 percent of total foreign-currency payments the government of Argentina is supposed to make during 2020-24.
  • If the Fernández administration were willing to work with the IMF on an economic program that would impose fiscal and monetary discipline to kick in once the coronavirus pandemic is over, the government would not need such large concessions from its private investors. In fact, such a partnership with the Fund would pave the way for a gradual return of investor confidence and the reopening of its domestic bond market for renewed financing on a voluntary basis.

April 28, 2020

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