Latin America: Is COVID Creating Space for Tax Reform?

By Tasha Fairfield*

National strike in Colombia against the Duque administration’s proposed tax reform/ Oxi.Ap/ Flickr/ Creative Commons License

The COVID‑19 pandemic and associated fiscal stress have pushed taxation to the forefront of national political agendas in Latin America and beyond, but leaders need to learn from past failures to achieve success. The question of taxing the rich has gained salience, giving rise to multiple proposals for wealth taxes around the globe. Debate over raising revenue to finance social spending and other pandemic-related priorities by taxing economic elites is particularly important in Latin America, given its staggering inequality.

  • Economically, raising revenue from the upper crust of the income and wealth distribution can actually be optimal and efficient, as Piketty and Saez have shown. From a normative perspective, almost everyone agrees that, in principle, those with more should bear a larger portion of the tax burden. Taxing the rich should be especially popular in highly unequal countries, where the rich are a tiny fraction of the populations and the vast majority would stand to benefit.  

The politics of taxing economic elites tend to be more complicated, however. On the one hand, big business conglomerates and wealthy individuals often enjoy multiple sources of power that end up mattering more than public opinion during the policymaking process. On the other hand, while the majority may approve of progressive taxation, neither voters nor social movements have given priority to demanding that economic elites be taxed more heavily. They tend to see taxation as not directly affecting average citizens, and the technical details of reform initiatives can be difficult. Public support can nevertheless play an important role in counterbalancing the power of economic elites – especially during electoral periods, when politicians tend to be more concerned about what voters want.

  • When progressive tax initiatives do not visibly and narrowly target economic elites – as occurred in Bolivia’s attempt to reinstate an individual income tax in 2003 – the public may reject them. In the Bolivian case, Finance Ministry experts designed a technically appealing flat tax that would be easy to administer yet progressive in practice, thanks to a threshold exemption that produced higher effective tax rates for higher income earners. But the flat marginal tax rate sparked widespread misperception that the proposal was regressive.
  • Inconsistent government messaging also fostered misperceptions that the tax would affect a wide swath of Bolivians. President Gonzalo Sánchez de Lozada at one point asked the “middle class” to “assume this sacrifice,” even though in reality that “middle class” was only a tiny, privileged group of highly paid wage-earners and independent professionals. The proposed reform ended up provoking popular protests, despite the fact that most participants would have been exempt from the tax, and the reform was quickly abandoned. 

The pandemic era increases the opportunity that a strategy linking tax reform to social spending – an approach that has been used successfully in many previous instances – will gain momentum. Programs that provide tangible benefits naturally draw greater interest and support from popular sectors than taxes targeting economic elites.

  • The more immediate and visible the associated benefits, such as expanded and more generous cash transfers, the more effective this strategy can be. In Chile, for example, center-left governments in the 1990s and 2000s made popular social spending initiatives contingent on tax increases, leaving the rightwing opposition exposed to popular wrath if they the chose to vote against the package. An analogous approach is earmarking tax increases to finance social programs. Technocrats dislike earmarking because it creates budget rigidities, but the political advantages are clear.
  • The pandemic has greatly augmented social need and threatens to exacerbate inequality. Colombia’s experience last May, however, shows that linking spending to taxes alone may not be enough. The Duque administration’s proposed tax reform was explicitly intended to finance expansion of basic income support for poor Colombians, and the measures were presented together within a single reform package. Yet the initiative failed because the tax measures were not adequately targeted at economic elites. A second effort later in the year fared better because the sales tax measures and a proposed income tax threshold reduction were removed.

October 13, 2021

* Tasha Fairfield is an associate professor in development studies at the London School of Economics. Her book, Private Wealth and Public Revenue in Latin America: Business Power and Tax Politics, examines how and when the interests of economic elites prevail in unequal democracies through comparative analysis of tax reform in Chile, Argentina, and Bolivia after economic liberalization.

The Interamerican Democratic Charter Turns 20: Is it Becoming Irrelevant?

By Stefano Palestini Céspedes*

Commemoration of the 10th Anniversary of the Inter-American Democratic Charter, September 2011./ OEA – OAS/ Flickr/ Creative Commons License

Despite the clear merits of its text, the Interamerican Democratic Charter (IADC) has been enforced inconsistently over the 20 years since its singing; its effectiveness in curbing democratic backsliding remains unclear; and, with little chance of being reformed, it risks becoming increasingly irrelevant.

  • The Charter was speedily adopted in Lima on September 11, 2001, while the world was reacting to the terrorist attacks in New York and Washington. It emerged from a proposal by the government of Peru after the resignation of authoritarian President Alberto Fujimori to reinforce existing multilateral instruments for democracy. It became the main multilateral framework to deal with breakdowns of democracy and backsliding in the hemisphere.
  • The IADC developed a shared and precise definition of representative democracy; expanded the scope of action of the OAS to address coups and violations perpetrated by the elected governments; and defined procedures for various enforcement actions ranging from the dispatch of missions to the imposition of sanctions and the suspension states from the OAS.

Limits on the IADC mandate have compromised its enforcement and effectiveness, however. The enforcement of measures is under the control of governments, which take decisions through consensus or qualified majority-voting (in the case of suspensions from the OAS). Even though the IADC is grounded on the principle that democracy is a “right of the people” (Art.1), non-state actors and state institutions other than the executive branches have limited capacity to activate the IADC, and the Inter-American Commission of Human Rights does not play any role in its enforcement.

  • The IADC has not been invoked in cases in which member states have conflicting interests. For instance, it was not applied against Haiti in the wake of the forced removal of President Jean Bertrand Aristide in 2004 or against Honduras after the electoral fraud of President Juan Orlando Hernández in 2017. In both cases, Washington obstructed enforcement of the Charter for reasons other than “the defense of the right to democracy” of Haitians and Hondurans. More recently, Mexico has obstructed enforcement against Nicaragua despite the serious violations of the opposition’s political rights by President Daniel Ortega. Similarly, the IADC has been altogether ignored when the attacks against democracy have taken place in powerful states, such as after the assault against the U.S. Capitol in January.
  • Against this backdrop, the activism of current Secretary General Luis Almagro – who has pressured member states to take a stance through social networks and moral shaming on various occasions – has sought to work around governments’ monopoly of enforcement and break gridlocks. But his actions often compromised the impartiality of his post as he has been perceived as taking sides in the conflicts at hand and overreaching his powers under the IADC.
  • Disappointment with the IADC and Almagro’s performance has led Mexico and other governments to advocate for reinforcing alternative regional forums such as the Community of Latin American and Caribbean States (CELAC). However, these announcements have little credibility if they are not accompanied with sustained political leadership – in the face of certain U.S. opposition – and commitment of resources to build strong regional institutions.

Ironically, the IADC came into existence precisely when the conditions that made it possible – a liberal consensus and an international agenda on democracy promotion – were fading away. These two decades have demonstrated that the democracies of the hemisphere, including Washington, are not always willing to put the defense of democracy in the neighborhood before other foreign-policy interests. Governments are also prone to bypass the OAS and the IADC and go unilateral if they feel that a crisis affects their interests, as the Lima Group and the U.S. unilateral sanctions against Venezuela have recently shown.

  • These two decades have also demonstrated that member states are not up to even discuss reforming the IADC. They are reluctant, for example, to create an enforcement authority, which would render the application of the Charter more impartial and possibly more effective. This is certainly disappointing news for those who believe in Inter-American relations based not only on Realpolitik but also on principles and norms. The IADC will continue being a roadmap for the states in the region and a reminder of the commitment to democracy, but it will be – paraphrasing the first OAS Secretary General Alberto Lleras Camargo – what the states want to make of it.

September 28, 2021

* Stefano Palestini Céspedes is Assistant Professor of International Relations at the Pontificia Universidad Católica de Chile.

China in Latin America: Influential But Not Liked

By Andrei Serbin and Luiza Duarte*

President Michelle Bachelet participates in a document-signing ceremony with the President of the People’s Republic of China, Xi Jinping./ Government of Chile/ FlickrCreative Commons License

An on-line survey of Latin American international relations experts reveals that China is viewed as having great influence in regional commerce, surpassing the United States and Europe, but that its engagement with the region is perceived as relatively negative. Although Chinese media have been increasing efforts to enter the information landscape in Latin America, they are not perceived to be a significant source of news for Latin American opinion leaders and do not appear to have significant influence on public opinion.

The questionnaire was administered by CLALS and CRIES last May and June as part of a broader project to assess the role of China and its communication strategies in Latin America and the Caribbean. It targeted academics and other thought leaders throughout Latin America. Some 379 experts responded.

Key findings:

  • China was perceived by 80 percent of the experts to have a “high” level of influence in Latin America, and only 5 percent said it was low. According to respondents, China’s influence was surpassed only by that of the United States. Madrid and Moscow scored slightly lower than Beijing.
  • The specific areas of Chinese influence were not homogeneous across the region. Asked about Beijing’s role in culture, the economy, health care, and technology, about 90 percent of respondents cited the economy as top area, followed by technology and medicine. (In each of these three categories, it was surpassed only by the United States.) Fewer than 5 percent named culture – higher than Russia and India but lower than six other countries on the list.
  • On the positive or negative impact of that influence, fewer than 10 percent said they had a “very good” opinion of the Asian power, while a little more than a quarter said they had a “good” opinion. About one-third said they had an “intermediate” opinion of Beijing, and the final third had a “bad” or “very bad” estimation. When asked to compare China with other world or regional powers, respondents ranked it among the lowest. A little more than one third view it negatively, 32 percent as neutral, and a little more than 25 percent positively. Germany, Japan, and Spain scored highest as “very good” and “good,” even if they’re ranked as having a lower level of influence. The United States scored somewhat lower, but China and Russia had stronger negatives and weaker positives. Only Russia’s influence is perceived more negatively than China’s.
  • Most of the experts felt the principal priority for having relations with China should be commercial, followed by foreign direct investment and other financial ties. International security ranked as their lowest priority – even lower than multilateral cooperation and human rights. Importantly, this order of priorities is the same as with U.S. relations – with the only statistically significant difference being a preference for cooperation on international security with Washington.

Important among the findings of the survey is that China is failing in its efforts to use media tools to create a positive image for the country and its government. Beijing has made significant investments in establishing a media presence, principally through its China Global Television Network (CGTN).

China’s state broadcaster launched CGTN Español in 2007, and it has significatively expanded operations worldwide in the past decade, multiplying platforms, newsrooms and crew. CGTN doesn’t have a Portuguese-language TV channel, but content in that language is produced by other Chinese media outlets, such as Xinhua, Radio China International, and People’s Daily.

  • Despite these efforts, fewer than 4 percent of those interviewed say Beijing’s influence was “high” or “very high,” while 38.8 percent say it was “low,” and 30 percent say it was “very low.” U.S. media influence, on the other hand, is high. More than 70 percent of the experts said CNN, for example, has “high” or “very high” impact. China’s CGTN international television network also ranked lower than the United Kingdom’s BBC, Venezuela’s Telesur, Russia’s RT, and France24.
  • According to most of the experts consulted, CGTN’s influence is principally “neutral,” but 33 percent of them said they didn’t know how to characterize it. That said, a greater percentage of them say its effect on China’s image is “positive” (about 20 percent) than “negative” (about 12 percent). In this regard, CGTN’s impact is similar to that of CNN (which is not a government entity tasked with burnishing the United States’ image) and RT, and much better than Telesur. But BBC and France24 reflect more positively on the British and French governments.
  • Even if findings indicate that Chinese media have “low” influence among Latin American leaders, a growing number of media-sharing agreements are facilitating the distribution of Chinese content through local media in Latin America. The influence of this indirect consumption has yet to be measured.

September 17, 2021

Luiza Duarte is a journalist, has a PhD in Political Science, and is a Research Fellow at CLALS, the Brazil Institute, and the Wilson Center. Andrei Serbin Pont is the Director of CRIES and an International Relations PhD candidate at the Universidad Complutense de Madrid. The survey is part of a CLALS project on China’s Messaging in Latin America and the Caribbean, supported by the Institute for War & Peace Reporting with funding from the U.S. Department of State

Latin America: Enduring Less Drastic Declines in Remittances than Predicted

By Gabriel Cabañas*

Ria Money Transfer/ Adam Fagen/ Flickr/ Creative Commons License

The decline in remittances during the COVID-19 pandemic has been less severe than predicted for Latin American and Caribbean countries because many migrants are in essential jobs and industries benefitting from generous U.S. income-protection measures, and a good U.S. recovery suggests positive trends will continue.

  • In April 2020, a month after the World Health Organization declared the pandemic, the World Bank estimated the resulting economic shock would cause remittances globally to drop by around 20 percent over the year – the greatest single year drop ever recorded. The Bank said the decline hinged on the fall of wages and employment of migrant workers. Other factors loomed large, such as China’s announcement that its economy had contracted 6.8 percent in the first quarter of 2020, and Europe, especially Italy, faced growing cases of the coronavirus.

More recent data tell a different story. The pandemic reduced global economic growth to -4.5 percent to -6 percent, which, while devastating, was cushioned by good performance in numerous sectors and industries. Contrary to the prediction of a 20 percent decline in 2020, remittances experienced only a 7 percent drop. Some remittance-receiving countries, including Mexico, actually reported growth in remittances from 2019 to 2020.

  • Generous stimulus programs, which the World Bank could not have predicted, preserved an income flow for companies in “essential” industries employing migrant workers, and those losing jobs received generous unemployment benefits.
  • A shift to digital remittances also made it easier and less costly for migrant workers to send money to their families. Western Union, which is the largest single remittance handler (with 10 to 20 percent of the market), reported that revenues increased 16 to 20 percent in 2020. Other channels appear to be growing even faster. The impact of remittances from migrant workers in the United States was further increased by currency devaluations in emerging economies hit hard by COVID.

Policymakers and academics have traditionally viewed remittances as having marginal positive impact on the economies of recipient countries – judging that foreign direct investment (FDI) has a much deeper impact – but that assessment is changing. A report published last year examined 538 estimates of the impact and found that 40 percent showed a positive correlation, 20 percent showed a negative correlation, and the remaining 40 percent were neutral. Observers increasingly think that remittances used by recipient families for consumption are often their optimal use. During periods of income shock, such as environmental catastrophe, increases in remittances replace roughly 60 percent of lost income, according to some estimates. During the Great Recession (2008-09) FDI dropped 39.7 percent, but remittances only dropped 5.2 percent. For a select group of remittance-receiving countries, including El Salvador, remittances have grown to provide more than 20 percent of GDP.

  • In 1970 remittances worldwide totaled less than $50 billion (in 2018 dollars), and in 2018 they exceeded $600 billion – surpassing all overseas development assistance and, in 2019, all FDI (except Chinese investment). Some experts claim much of this growth is a function of measurement error – caused by how banks track remittances – but the fact that remittances have been steadily growing since the 1970s is no illusion.
  • The hemisphere’s continuing challenges emerging from the pandemic raises questions about the future, but – as long as generous stimulus plans, essential work protection, and a strong dollar continue – remittances to Latin America and the Caribbean appear likely to allow recipient countries some continued reprieve from the economic devastation caused by COVID-19 and help them achieve an earlier economic recovery.

September 3, 2021

* Gabriel Cabañas is studying international relations and economics in the School of International Service.

Latin America’s Head-First Dive Toward E-Commerce

By Alexander Borushek*

Left: Tech Park/ Sebastian Bassi/ Flickr/ Creative Commons License (modified)
Right: Informal work/ Alba Sud Fotografia/ Flickr/ Creative Commons License (modified)

The boom in e-commerce during the COVID‑19 pandemic has been stronger in Latin America than in most other regions, presenting profound consequences for traditional informal economies as well as for citizens previously disconnected from formalized economic and financial networks. Since March 2020, long-lasting and recurrent lockdowns have upended informal economies by forcing people away from face-to-face – and often cash-based – transactions. In response, retailers and consumers have been pivoting toward new online alternatives.

  • The growth in e‑commerce has also been a bright spot in an overall bleak economic landscape, with sales growing by an astonishing 63 percent in 2020, topping $100 billion. Not only did this far exceed estimates from prior to the pandemic (12.5 percent projected in November 2019) or in its early days (19.4 percent in June 2020); it was the largest percentage increase of any region in the world.
  • Latin American consumers appear quite content with the shift. More than 80 percent of the region’s first-time online shoppers say they plan on continuing to do so after the pandemic. This is good news for established entities like Argentina’s e-commerce giant MercadoLibre – which already accounted for about half of all online sales in Latin America and saw 2020 revenues double – and international competitors such as U.S.-based Amazon, Singaporean conglomerate Shopee, and China’s Alibaba subsidiary AliExpress, which are looking to make inroads in the region.

Record sales also highlight the region’s urgent need to address the deficiencies that separate its e-commerce sector from the larger and more sophisticated ones in the United States, Western Europe, and the Asia-Pacific.

  • Of particular importance is infrastructure. Beyond underinvestment in bridges, ports, and highways, the region suffers from significant bottlenecks in the logistics planning processes that affect how and at what speed products are delivered.
  • Larger crossborder synergies are hampered in part by a lack of uniform importing schemes, in contrast to the ease with which products pass through borders of the European Union or into the United States. Another obstacle is the chronically low quality, reliability, and “relevance” of the region’s postal services, according to the Universal Postal Union. In its report last October, the UPU concluded that “compared with its level of economic development, the region has the worst relative [postal] performance worldwide.” Moreover, 60 percent of the “last-mile” delivery industry is made up of either small, often informal, businesses or independently contracted drivers who use their own vehicles. This results in a huge lack of cohesive route optimization. MercadoLibre and other big players are trying to build out independent fulfillment networks, but a lot of work remains.

The e-commerce ecosystem is giving other investors, retailers, and consumers a general sense of optimism that positive change can occur.

  • Millions of citizens have been brought into the banking system since the pandemic, often through nimble fintech platforms like MercadoPago or Brazil’s NuBank (the latter having seen record numbers of new users). Coupled with widespread smartphone ownership and the already-high penetration of mobile internet and data, more people than ever are shopping and will be able to purchase items online.
  • International investor interest in the sector is also high. Recently the U.S. e-commerce firm Etsy announced that it had acquired its Brazilian counterpart Elo7 in a $217 million deal. Additionally, SoftBank’s Latin America Fund has at present five e-commerce ventures in its portfolio, including the Colombian super-app Rappi.

While Latin America’s e-commerce sector has yet to display the speed of Amazon Prime or offer the panoply of services available in China, it is highly unlikely to be just a temporary byproduct of the pandemic. Recurring pandemic scares might just provide the momentum the e-commerce industry needs to consolidate its role as an integral piece of the post-COVID economic equation – helping societies address deep-rooted problems that plagued the people simultaneously dependent on the informal economy and most likely to benefit from increased access to banks and other formalized financial networks.

August 10, 2021

* Alexander Borushek is a graduate of American University’s School of International Service and currently a Business Development Representative for Envoy Global, a tech firm that works in immigration and global mobility.

COVID-19: A Race Against Time to Vaccinate

By Eric Hershberg, Christopher Kambhu, and Carla Froy*

A woman receives the COVID-19 vaccine in Brazil/ International Monetary Fund/ Flickr/ Creative Commons License

Latin American governments’ rollout of the COVID-19 vaccine has been plagued by an unequal distribution of doses, a lack of ancillary supplies, and political disharmony – and most have little prospect of making up for lost time. The region has struggled to obtain enough doses despite Chinese, Russian, and U.S. vaccine diplomacy, and only 3 percent of the population is inoculated. There is also intra-regional inequality: Argentina, Brazil, Chile, and Mexico have 90 percent of available doses. Only Chile has implemented a successful immunization program.

  • Argentina’s efforts are hampered by a lack of doses, despite deals with AstraZeneca, Sinopharm, and Sputnik. The administration of President Alberto Fernández has been forced to prioritize delivery of first-round shots and delay second shots. Scientists warn that this decision, similar to that of the United Kingdom, could jeopardize vaccine effectiveness. They have also criticized the pace of immunizations. While Argentina made a deal with Mexico last year to produce 150 million AstraZeneca doses for distribution across the region, it has yet to bear fruit.
  • Mexico is also struggling with a lack of doses, which caused the government to delay its vaccination campaign launch from December to February. While the Argentine-Mexican deal for AstraZeneca doses intends to address this deficit, a lack of ancillary inputs has significantly delayed manufacturing. Fewer than 3 percent of Mexicans have been fully vaccinated, and the government’s plan aims for herd immunity only by March 2022. President Andrés Manuel López Obrador (AMLO) has criticized vaccine inequities as part of his discourse supporting marginalized populations, even speaking at the UN about this issue, but his administration’s list of vaccine priority groups has drawn fierce criticism. In some rural areas, citizens received vaccines before the medical staff administering them, raising concerns that AMLO is prioritizing political considerations over public health.
  • Brazil faces a host of problems. Its vaccination scheme relies primarily on China’s Sinovac, which health experts say has the lowest efficacy of any vaccine, though the government signed a deal with AstraZeneca last month to produce 12.2 million doses domestically. President Jair Bolsonaro has regularly denigrated COVID vaccines, part of his laissez-faire attitude towards the pandemic. Although an estimated 4 percent of Brazilians are fully immunized, an inadequate record-keeping system makes monitoring progress difficult. Furthermore, the spread of a new COVID-19 variant from Manaus threatens to significantly undermine current vaccination efforts.

By contrast, Chile’s vaccination program is a regional success, with nearly 30 percent of its population fully inoculated. Following the program’s December launch, more than 3 million doses were administered in the first three weeks, and the government aims to fully vaccinate 80 percent of the population by June.

  • Chile’s success is due in part to government efforts to procure vaccines from multiple sources (including AstraZeneca, Pfizer, and Sinovac) and hosting clinical trials in exchange for early access and better prices. The health ministry mobilized the national vaccination system to implement its program and established clear guidelines and a national schedule, avoiding the confusion and contradictory messaging that plague other nations.

The disparity between Chile’s and its neighbors’ results was not a forgone conclusion. Brazil also has a robust national vaccination system, and along with Argentina and Mexico secured vaccine deals around the same time as Chile. The key lies in the more aggressive approach of President Sebastian Piñera’s administration in acquiring as many doses as possible – from wherever they could be sourced – and in its ownership of Chile’s vaccination program. Unlike most governments in the region, in the second half of 2020, when many vaccines were still in development, Chile oriented its health infrastructure and bureaucracy toward a successful inoculation program. Most other countries in the region did not, and they have no available roadmap to make up for lost time.

April 22, 2021

* Eric Hershberg is the CLALS Director, Christopher Kambhu is a Program Coordinator at CLALS, and Carla Froy is a graduate student at American University’s School of Public Affairs.

COVID-19: Vaccine Diplomacy Drives Hard Bargain

By Eric Hershberg, Christopher Kambhu, and Carla Froy*

Sinopharm Vaccine Supplies Arriving in Peru/ Ministerio de Relaciones Exteriores, Cancillería del Perú/ Flickr/ Creative Commons License

China, Russia, and the United States are offering millions of desperately needed COVID-19 vaccines to Latin American governments in exchange for policy changes that suit the supplying governments, and – with limited supply and fierce global demand for vaccines – regional governments are playing along.

  • China’s strategy builds on its promotion of medical supplies from its state-owned and private firms to become Latin America’s COVID-19 partner of choice. It has signed deals for vaccines produced by Sinovac and Sinopharm totaling nearly 200 million doses regionally, including with Argentina, Brazil, and Chile. The government has offered $1 billion in loans to facilitate vaccine purchases.
  • Russia, in turn, has secured deals for nearly 125 million doses of its state-developed Sputnik vaccine with Argentina, Mexico, and Peru. It is also negotiating with Brazil and Venezuela to host vaccine trials in exchange for more favorable supply deals. Moscow aims to build upon these connections to forge stronger commercial ties.
  • While the United States has made fewer deals, the administration of President Joe Biden announced in mid-March that it would give 2.5 million surplus AstraZeneca vaccine doses to Mexico. The deal occurred the same day as Mexico announced further travel restrictions limiting Central American migration to the U.S. border, suggesting that Washington, like Beijing and Moscow, is linking vaccine deals with favorable policies in the region.

The three vaccine suppliers’ actions are already influencing relations between them and Latin American countries. Before Mexican President Andrés Manuel López Obrador (AMLO) had his first phone call with President Biden, he had already finalized a deal for 24 million Sputnik doses and extended a state visit invitation to Vladimir Putin. In Brazil, regulators reversed their earlier position, adopted after aggressive lobbying from Washington, and allowed Chinese telecom Huawei to bid on 5G network construction contracts shortly after reaching a deal for tens of millions of Sinovac doses. In the long term, closer regional ties with Russia and China could influence Latin American governments to tilt more favorably toward the preferences of Moscow and Beijing in bilateral relations, at the United Nations, and in regional bodies such as CELAC.

In addition to offering deals to Latin American partners, the three governments promote their own efforts by critiquing their rivals. Chinese officials describe their objective as equitable vaccine access, contrasting it to Western nations stockpiling many more doses than their populations require. Their U.S. counterparts are no less circumspect; a senior Biden official accused China and Russia of “vaccine mercantilism” while promoting Washington’s collaboration.

  • Claims from Beijing, Moscow, and Washington that they merely wish to advance global vaccine cooperation fail to obscure the hard bargains on offer. All three governments are leveraging the desperation of Latin American officials to extract policy concessions that suit their interests. Nowhere is this more evident than in Paraguay – the only South American nation that has diplomatic relations with Taiwan – which is struggling to access Chinese vaccines. Press reports indicate that China is linking a vaccine deal with Asunción breaking those relations; the Paraguayan foreign minister’s recent call for closer economic and cultural ties with China suggests this pressure is working. Latin American governments face a stark choice: reorient their foreign policies in exchange for vaccines or remain mired in the pandemic’s mounting health and economic costs.

April 16, 2021

* Eric Hershberg is the CLALS Director, Christopher Kambhu is a Program Coordinator at CLALS, and Carla Froy is a graduate student at American University’s School of Public Affairs.

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

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

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

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

Ilka Treminio Sánchez*

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

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

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

Fábio Kerche*

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

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

Esteban De Gori*

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

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

February 11, 2021

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

Latin America: Moving Toward Active Non-Alignment?

By Jorge Heine*

IV CELAC Summit, Ecuador 2016/ FAOAmericas/ Flickr/ Creative Commons License (modified)

A new Cold War between the “great powers” outside Latin America – the United States and China – has again undermined the region’s ability to defend its own interests and given impetus to new ways of establishing its autonomy. The COVID‑19 pandemic has been a stark reminder of the human cost of playing favorites. Over 400,000 have died in Latin America, triggering what ECLAC has called the region’s worst crisis in a century. There is plenty of blame to go around – starting with China, where the virus originated, and continuing with the region’s incompetent management. But less remarked upon has been the U.S. role in contributing to this tragedy due to its obsession with all things Cuban and, more recently, Chinese.

  • In 2019, Washington strongly pressured the governments of Bolivia, Ecuador, and El Salvador to expel the teams of Cuban doctors working there. They complied just before the onset of the pandemic, leaving themselves without a critical mass of needed health professionals. At the same time, Washington slashed funding to the Pan American Health Organization (PAHO), leaving it unable to assist as it did in previous pandemics.
  • Ecuador, with 12,000 deaths, is Exhibit A of the effect, and Bolivia, with 8,000, is not too far behind. Brazilian President Bolsonaro’s agreement to withdraw Cuban doctors from the Amazon contributed to the decimation of Aboriginal tribes. Nonetheless, as the virus was ravaging the region, USAID refused to restore funding to PAHO. In addition to the humanitarian crisis, the region faces a projected negative growth of 8 percent in 2020, the worst performance of any region, and the prospect of yet another lost decade.

Alarm at the cost to Latin American governments of engaging in Cold War games is rising, inspiring support for what my colleagues Carlos Fortín, Carlos Ominami, and I call a policy of Active Non-Alignment for Latin America. Just as in the 1950s, when countries unwilling to choose between Washington and Moscow, between capitalism and socialism, formed the Non-Aligned Movement (NAM), the situation today requires some reassessing of international roles.

  • Any new configuration would reflect that the Global South, which represented 20‑30 percent of trade and investment flows in the 1960-70’s, now accounts for 50 percent. The enormous growth of countries from the Global South , particularly of China and India, but also Brazil (under former President Lula), Indonesia and Turkey, does not occur in a vacuum. It has coincided with a growing populism and protectionism in countries of the developed North, which have dismantled the very Liberal International Order they once created, and are now turning inwards.
  • In this emerging Global South, old platforms like the NAM are being replaced by new ones like the BRICS. The old diplomacy of the Cahiers des doleances has been overtaken by the collective financial statecraft of entities such as the Asian Investment and Infrastructure Bank (AIIB) and the New Development Bank (the so-called “BRICS Bank”). These developments suggest that, far from locking herself up within the confines of the Western Hemisphere, as the anachronistic application of a newly dusted-off Monroe Doctrine portends, Latin America will benefit more from opening up to this new “Post Western World,” in Oliver Stuenkel’s expression.

Active non-alignment is not the romantic resurrection of a bygone era, but rather adapting traditions to this new epoch, in a world in flux. It would expand, not limit, the ties of Latin American nations with the vast emerging non-Western world.

  • Genuine non-alignment does not surrender to any major power but focuses instead on the region’s own goals and objectives. For Latin America, it would entail strengthening regional bodies and deepening its commitment to multilateralism; developing an action plan on climate change; establishing a regional Center for Disease Control (CDC); redefining notions of national security to reflect today’s threats; and committing to gender equality and fair labor relations.
  • Chilean Foreign Minister Andrés Allamand has already expressed support for what he has called “active neutralism,” but sitting governments appear unlikely to take up such an unorthodox approach. Nonetheless, the next electoral cycle – in which ruling leaders are likely to pay a heavy price for the COVID debacles – will probably change many minds.
  • The Administration of U.S. President-elect Joe Biden will have its hands full with domestic challenges, and China, fully aware of the sensitive geopolitical situation in place today, does not expect Latin America to take Beijing’s side in its differences with Washington on issues that do not affect the region.  In this conjuncture,  Latin America is at a crossroads, and its current fragmentation and deep-seated crisis call for a fresh approach on how it relates to the rest of the world.

November 13, 2020

* Jorge Heine is Research Professor at the Frederick S. Pardee School of Global Studies, Boston University.

OAS: Almagro’s Veto of IACHR Executive Secretary Threatens Commission’s Independence

By Bruno Boti Bernardi, Isabela Gerbelli Garbin Ramanzini, João Roriz, and Matheus de Carvalho Hernandez*

Regular Meeting of the Permanent Council. From left to right:
Paulo Abrão, Executive Secretary of the Inter-American Commission on Human Rights; Luis Almagro, OAS Secretary General./ OEA – OAS/ Flickr/ Creative Commons License

OAS Secretary General Luis Almagro’s decision to block a second term for Inter-American Commission on Human Rights (IACHR) Executive Secretary Paulo Abrão – citing allegations of mismanagement – is undermining the organization’s autonomy by rejecting the unanimous vote of its Commissioners and ignoring the views of human rights advocates throughout the region. Despite Abrão’s strong reputation, Almagro on August 25 stated the man was unfit to remain on the job.

  • During Abrão’s first term as Executive Secretary (beginning in 2016), the Commission was at the forefront of a number of thorny problems in the region, including U.S. handling of migration, indigenous and environmental causes in Brazil, democratic guarantees in Venezuela and Nicaragua, U.S. police violence, and others. Supporters also credit him with launching institutional transformations and modernizations. Recognizing Abrão’s leadership, the Commission’s seven members in January unanimously approved a second term for him, which would begin last month.
  • Almagro said his veto of Abrão’s reappointment was based on a supposed confidential report stating 61 “functional complaints” against him, including “possible rights violations”. He also alleged that the Commissioners were derelict in not “clarifying the accusations,” which he said included “conflict of interest, differential treatment [favoritism], serious deterioration in the level of transparency of the processes, retaliations and violations of the code of ethics, impunity for sexual harassment accusations.”

Human rights advocates throughout Latin America have accused Almagro of inappropriate interference in the human rights body’s affairs. In one public letter, more than 300 organizations – many with strong records of activism against the sort of workplace and gender issues that Almagro raised – pointed out that the Secretary General violated the IACHR’s statute and longstanding practice requiring prior consultation with Commissioners before taking any personnel actions. They called for dialogue, respect for IACHR’s autonomy, and independent investigations into any allegations made against Abrão or the Commissioners.

  • Experts are also concerned that Almagro’s actions were driven by political factors, particularly his sensitivity to right-leaning governments’ discomfort with the Commission’s criticism. On Almagro’s watch, Argentina (under former President Mauricio Macri), Brazil, Chile, Colombia, and Paraguay in April 2019 issued a declaration demanding greater deference from the Commission to the states. Two months later, a block of critical governments tried to influence the election of Commissioners to favor a Colombian candidate (who lost).
  • Right-leaning governments have applied similar pressure on the Inter-American System and other international organizations – while Almagro was supportive or maintained public silence. The United States pushed hard to invoke the Inter-American Treaty of Reciprocal Assistance against Venezuela, a mutual defense treaty of 1947, and last week succeeded in using its influence to gain the election of its nominee as president of the Inter-American Development Bank, breaking a six-decade tradition of Latin American leadership at the institution. At the UN, U.S. President Donald Trump directed his country’s withdrawal from the Human Rights Council in 2018. The following year, Brazilian President Jair Bolsonaro launched broadsides against the High Commissioner for Human Rights, Michelle Bachelet, when she began speaking out about allegations of abuses in his country.
  • This is not an isolated episode in the IACHR’s history. In addition to the decades of military dictatorships’ resistance, the organization has weathered suspension of states’ payment of dues and even threats – sometimes fulfilled – of the withdrawal of states. In 2011, a controversial process of institutional reform prompted a budget boycott strategy led by some Latin American governments angry at what they considered to be unreasonable interference in domestic affairs.

UN High Commissioner Bachelet’s pledge two weeks ago to push for a solution to the impasse created by Almagro’s veto is key. For 61 years, the IACHR has been the only monitoring forum with oversight over all states in the region, whose main function has been to promote the observance and defense of human rights in the Americas, in accordance with Article 41 of the American Convention on Human Rights. Its Commissioners have worked closely with civil society and the victims of human rights violations, and taken steps to improve monitoring in ways that enhanced protection for the region’s historically marginalized populations. Experience has shown that the expansion of individual and collective awareness of human rights not only remedies violations on a case-by-case basis but also leverages the empowerment of citizens against violations by their governments.

  • These activities are all the more important in difficult times, such as created by the COVID-19 pandemic, during which political leaders’ temptation to resort to un-democratic means of governance can be intense. Protecting the IACHR’s independence and enhancing its ability to function without pressure from governments of any political stripe is essential to consolidating progress made in Latin American human rights and preserving space for more in the future.

September 15, 2020

* Bruno Boti Bernardi is a professor at the Federal University of Grande Dourados (UFGD). Isabela Gerbelli Garbin Ramanzini is a professor at the Federal University of Uberlândia (UFU). João Roriz is a professor at the Federal University of Goiás (UFG). Matheus de Carvalho Hernandez is a professor at the Federal University of Grande Dourados (UFGD).