South American Megacities, Water Scarcity and the Climate Crisis

By Robert Albro*

Drinking water distribution/ MunicipioPinas/ Flickr/ Creative Commons License

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

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

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

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

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

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

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

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

February 9, 2021

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

U.S.-Latin America: Who Can Learn from Whom about Elections?

By Todd A. Eisenstadt*

Polling station in the outskirts of San Cristóbal de las Casas in Chiapas, Mexico, during the 2003 gubernatorial election in Chiapas.
Polling station in the outskirts of San Cristóbal de las Casas in Chiapas, Mexico, during the 2003 gubernatorial election in Chiapas./ Dr. Todd Eisenstadt

The irony of an increasingly probable electoral crisis in the United States this year is not lost on observers in Latin America, who have endured multiple challenges to the legitimacy of elections for decades – nor is the irony that the United States could learn from the region’s hard, if still incomplete, lessons in democracy. U.S. President Donald Trump’s efforts to raise doubts about the fairness of the November 3 elections have been reported widely in Latin America. Citing unknown sources and unconfirmed events, he has alleged massive voter fraud and predicted court challenges so serious that, he said, it’s especially urgent that his nominee to the Supreme Court be seated immediately.

Such ominous-sounding challenges to elections are not new to most of Latin America. Mexico is not unique in this regard, but I saw its whimsical and exotic election frauds closeup in the 1980s and ‘90s as an international elections observer.

  • In the razor-close 1988 election, the lights went out during the vote count, and by the time they came back on the renegade outsider leftist had lost his lead against the PRI’s candidate. Political operatives called mapaches (“racoons” because they worked only in the dark), breakfast bribes (called Tamale Operations), and voters who made the rounds all day long to cast ballots in different precincts (carruseles or “carrousels”) were common. Crazy Mouse, named after the board game, was a scheme in which opponents of the PRI were sent from precinct to precinct only to be told they were to vote across town. Similar tricks, as well as intimidation, have been common in many other countries. Latin Americans are accustomed to wondering whether the military will have to escort a president who loses an election out the door, but it’s a totally new point of speculation for the U.S. population.

Although still far from perfect, Mexico and other Latin American countries have improved their elections. The unwritten code among political bosses in Mexico has long been to not ruin national institutions (like the postal system) or invite foreign interference (like Russian manipulation of public opinion). But other steps signal a shift away from zero-sum political games.

  • Since the 1990s, post-electoral negotiations to mollify the victors’ opponents – “keep them in the game” rather than make them a destabilizing force – gave them perches from which to eventually mount legal challenges, including rightist Vicente Fox (an interim governor who later became President) and current President Andrés Manuel López Obrador. The U.S. Supreme Court in 2010 in Citizens United reduced regulation of campaign donations, but Mexico has limited campaign finance and TV advertising. It has encouraged the independence of electoral institutions and set federal standards in all 32 states, which have one voter list matched against one voter ID per citizen – rather than 50 states and 3,000 counties with different criteria. Electoral observers are trained about citizens’ rights and responsibilities, not mobilized out of distrust for the system or to intimidate voters.
  • Since the turn of the century, most Latin American countries have put greater emphasis on the rule of law and tried, albeit inconsistently, to address economic inequality and other threats to democracy and stability. They have also learned the hard lesson that sometimes “dirty elections” must be cleaned through broad citizen mobilization with the support of national and international leaders. Some observers wonder whether the Black Lives Matter movement will expand and evolve into a mobilization akin to the cacerolazos in Chile and elsewhere in the 1980s that helped galvanize opposition to the dictatorships of the era.

The chaos, isolation, and economic pain caused by COVID‑19 make Latin America’s democracy lessons even more pressing for the United States. Voters fear going to the polls and are anxious about trusting balloting systems, such as mail-in voting, that President Trump is trying to delegitimize. The U.S. military, wittingly or not, mobilized troops to support the President’s suppression of civil protests. U.S. voters are in unfamiliar territory.

  • The hemisphere is watching closely if – and how – El Norte figures out how to exorcise the fears and the doubt that are undermining its democracy. Bringing in a slew of smart and seasoned international election observers from Mexico and elsewhere would be a start. So would learning from the Mexican opposition parties how to subvert expediency, especially in the time of COVID, in favor of longer-term discipline for democratization.

October 6, 2020

* Todd A. Eisenstadt teaches political science at American University and is author of several books on democratization, including Courting Democracy in Mexico: Party Strategies and Electoral Institutions, for which he observed over a dozen local and national elections there.

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).

Latin American Integration: No New Ideas

By Carlos Malamud*

Heads of state stand for a picture at the 14th ALBA Summit held in Caracas in 2017

Heads of state at the 14th ALBA Summit held in Caracas in 2017/ EneasMx/ Wikimedia Commons

Several proposals claiming to promote regional integration in Latin America, particularly South America, have received attention in recent months, but proponents’ continued reliance on the same political-ideological alignments as always leaves little hope of bridging the deep splits in the region. Coming in the wake of completion of the EU-Mercosur trade agreement, after arduous and complicated negotiations, the proposals appeared to be good news. But that has not been the case.

  • The new push follows the creation of PROSUR by right-leaning governments in March and, more recently, efforts to relaunch UNASUR by left-leaning groups such as the Grupo de Puebla (Progresivamente) – each claiming commitment to unify the region behind their political visions. Two of the main advocates, Chilean President Sebastián Piñera on the right and Argentine Presidential Candidate Alberto Fernández on the left, have taken the easy path of convoking like-minded supporters while rejecting opponents.
  • These groups appear to have learned nothing from the first decade of the 21st century, when Venezuelan President Hugo Chávez pushed his Bolivarian project. The three efforts emblematic of the period – ALBA, CELAC, and UNASUR – all eventually failed. The rise of neoliberal governments in various countries since then has produced an even more complex situation. The new governments have continued emphasizing ideological conformity, reducing prospects for unity. Last December, a “Conservative Summit of the Americas” inspired by Brazilian President Jair Bolsonaro and his son met in Foz de Iguazú to rally the most extreme elements of the region’s right, conditioning participation on total agreement with its tenets.

There are exceptions.  The Pacific Alliance – a trade accord launched by Chile, Colombia, Peru, and Mexico eight years ago – has remained inclusive despite changes of government in each country. MERCOSUR, with its solid foundation and intense commercial exchanges, has also resisted ideological temptation in its way, although dismissive insults between President Bolsonaro and Argentine candidate Fernández do not bode well (even if both know that they need each other in the long run). But the fear is that extreme ideologies will, once again, trump national interests.

The intense electoral cycle of the past three years, and the pending elections in Argentina, Bolivia, and Uruguay, further complicate the situation. As the “turn to the right” has not turned out as predicted, the results of these three races this month will make regional relations even more unstable. The lack of a new vision for promoting Latin American regional integration is aggravated by the growing sense among both extremes of the political spectrum that they have to dig trenches.

  • The need for a new vision is obvious as the growing attacks on multilateralism and the escalation of the U.S.-China trade war are going to force practically all international actors to take sides. Latin America will suffer potentially grave consequences if its governments and political leaders don’t grasp that inclusion, not exclusion, is the only way to advance unity and integration. Acceptance of differences, dialogue, and negotiation are what’s needed now, as is a creative imagination that can accept reality as it is, with all its problems and imbalances. The question is whether the existing leaders will be able to overcome this sad state of affairs.

October 1, 2019

*Carlos Malamud is Senior Analyst for Latin America at the Elcano Royal Institute, and Professor of Latin American History at the Universidad Nacional de Educación a Distancia (UNED), Madrid. A version of this article originally was published in the Elcano Blog.

EU-MERCOSUR: Does Their New Association Agreement Mean Much?

By Thomas Andrew O’Keefe*

29/06/2019 Coletiva de Imprensa UE-Mercosul

Press conference about the trade agreement between the Mercosur and the EU / Palácio do Planalto / Creative Commons

After nearly two decades of intermittent negotiations, the European Union and the four core MERCOSUR nations (Argentina, Brazil, Paraguay, and Uruguay) have finally inked a trade agreement, but its real impact won’t be felt for years, if ever. When the negotiations began in the mid-1990s, the EU was the largest trading partner of the MERCOSUR countries, and the United States was number two. Today China is in first place, the European Union is second, and the U.S. is fourth, behind intra-Latin American trade (EU investors, however, continue to have the largest stock of foreign direct investment assets in the MERCOSUR region). When ratified, the EU-MERCOSUR Association Agreement, signed in Brussels on June 28, will exempt a little more than 90 percent of two-way trade from tariffs.

  • About 93 percent of MERCOSUR exports will eventually obtain duty-free access into the EU market, the bulk as soon as the agreement comes into effect. Agricultural commodities such as beef, chicken, corn, eggs, ethanol, honey, pork, rice, and sugar only get reduced duties, with many also subject to quotas. Another 100 MERCOSUR agricultural items are completely excluded from any type of preferential treatment.
  • Some 91 percent of European exports will get duty-free access to MERCOSUR, but gradually as tariffs are reduced over a 10-year period. The phase-out is over 15 years in the case of European automobiles, furniture, and shoes. MERCOSUR tariffs on the remaining 9 percent of primarily EU manufactured goods will remain in place permanently.
  • The agreement offers service providers from any signatory country full access to the markets of all the other signatory states.

MERCOSUR showed greater flexibility with the EU on agricultural subsidies than it had with the United States, a position that contributed to ultimate rejection of the Free Trade Area of the Americas (FTAA). Subsidies in the EU-MERCOSUR agreement are permitted if “necessary to achieve a public policy objective.” The MERCOSUR countries also capitulated on the use of anti-dumping tariffs on intra-hemisphere trade. The new accord, however, does authorize governments to impose a duty that is less than the margin of dumping if it adequately removes injury to the affected domestic industry. It also includes provisions for ensuring that sanitary and phytosanitary (SPS) measures as well as technical norms are not abused and become disguised impediments to free trade, although it permits enforcement of the European “precautionary principle” notion to restrict the importation of genetically modified food, for example, where the risks to health are not scientifically conclusive.

The agreement – now being “legally scrubbed” and translated into the EU’s 23 official languages – faces an elaborate, multi-year ratification process in the EU, where individual countries and the European Parliament must approve it, as well as each MERCOSUR government. Agricultural forces are already lining up in many European countries in opposition. In the meantime, the accord’s greatest impact is a signal by Brazilian President Bolsonaro and Argentine President Macri that they’re making progress on their stated objective to return MERCOSUR to its original trade focus – in contrast to their predecessors – and to claim an economic “victory” when growth in both countries remains stagnant.

  • Despite the flexibility MERCOSUR showed on agricultural subsidies and anti-dumping, its main sticking points with the United States in the FTAA, a free trade agreement with the United States seems remote as the Trump administration – in contrast to the Europeans – is unlikely to offer meaningful concessions based on the lesser developed status of the MERCOSUR countries. Neither will the Association Agreement with the EU reverse or even slow the region’s shift toward trade with China and the rest of Asia.

August 6, 2019

* Thomas Andrew O’Keefe is the President of New York City-based Mercosur Consulting Group, Ltd. and a lecturer at Stanford University. He is the author of Bush II, Obama, and the Decline of U.S. Hegemony in the Western Hemisphere.

South America: Regional Integration or Presidential Posturing?

By Stefano Palestini Céspedes*

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

Seven South American presidents’ launch of brand-new regional grouping called PROSUR last week was intended to give a boost to their personal agendas rather than take a serious step toward regional integration. The announcement was made on March 22 at a summit organized by Chilean President Piñera and attended by the presidents of Argentina, Brazil, Colombia, Ecuador, Peru, and Paraguay. The declared goal of the summit was to overcome what Piñera called the “paralysis” of the decade-old UNASUR.  Its final declaration emphasized the need “more than ever to work together to update and strengthen the South American countries’ process of integration” in the face of current and future challenges, including “inserting ourselves in an efficient way into the fourth industrial revolution and society based on knowledge and information.”

  • The creation of the Forum for the Progress of South America (PROSUR), however, delivered very little in terms of regional integration. The Santiago Declaration does not tackle the obstacles that hampered UNASUR, such as its decision-making procedure based on consensus. On the contrary, the declaration envisions PROSUR as a forum exclusively based on presidential diplomacy, in which all decisions by definition must be taken by consensus.
  • The Presidents said the new organization will focus on infrastructure, energy, health, defense, and dealing with natural disasters – the same areas where UNASUR had shown some progress. The declaration did not mention any particular ongoing crisis, such as Venezuela, but it made clear that it would work for full respect for democracy, constitutional order, and human rights. Again, this is not a departure from UNASUR, which also had a democracy clause adopted and ratified by the national parliaments.

The summit promised political gains for several participants. For President Piñera, it was an opportunity to project himself as a regional leader able to convene and coordinate South American heads of states, at a time that his domestic popularity is decreasing. Ecuadorean President Moreno – the only central-left president attending the summit – had yet a new opportunity to signal his willingness to coexist with pro-market governments in the region. For Brazilian President Bolsonaro, a well-known skeptic of South American integration, the summit was a platform to show a more palatable image closer to his liberal peers.

President Piñera and his guests blamed UNASUR’s bureaucracy for its lack of effectiveness, opting instead for a lean mechanism based on presidential diplomacy. Most long-time observers believe, however, that UNASUR’s effectiveness was undermined by its very weak organizational capacity, with a powerless Secretary General and personnel made up of low-ranking national diplomats instead of qualified international civil servants. Presidential diplomacy, unburdened by a bureaucracy of specialists who analyze problems and possible solutions, works well when Presidents get along in ideological terms, but precedent shows it is vulnerable to collapse when governments have divergent preferences or when states must agree on complex transnational issues such as migration, drug-trafficking, or deep economic integration.

  • PROSUR will work exclusively as a forum (not as a regional organization) and its decisions and initiatives will have to be executed and monitored by the national bureaucracies of the member states, which by definition look after national interests rather than regional interests. The Santiago Summit has demonstrated that when it comes to regional integration, leftist and right-wing heads of government look and act alike. No matter which ideology they claim, South American presidents fear collective institutions, cherish presidential diplomacy, and prefer to create new initiatives with pompous names from scratch, rather than make necessary reforms to existing ones. As Uruguayan President Vázquez – who did not attend the summit – put it, South America has a long history of integration initiatives that have not brought about integration. The region would be better served by reinforcing and overhauling existing mechanisms such as MERCOSUR, the Andean Community, or the Pacific Alliance, and try to make them convergent in any possible way, rather than adding yet another acronym.

March 29, 2019

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

South America: Can it Navigate the Changes Ahead?

By Leslie Elliott Armijo*

Latin america

Latin America / Google Images / Creative Commons

Venezuela is the latest example of how Latin America, especially South America, has missed an opportunity to demonstrate the sort of hemispheric leadership it has long striven for – and instead has ceded that role to the United States and even Russia and China.  Although the United States, and the rest of the hemisphere more generally, have been slow to realize it, economic drivers are making the world more multipolar.  In a recent article by two colleagues and myself, we analyze international financial statistics covering 180 countries from 1995 to 2013 that reveal the slow relative decline of the United States as the reigning financial hegemon.  U.S. influence, although still formidable by some margin, is eroding.

  • The Trump Administration’s activities in the larger world are also undermining Washington’s influence. Policies in the WTO and other trade actions writ large – such as withdrawing from the Trans-Pacific Partnership (TPP) and threatening and implementing trade sanctions with little apparent logic – have brushed even allies back. Positions on the Paris climate accord, at the United Nations, and in the President’s relations with North Korean leader Kim Jung Un and Russian President Vladimir Putin have left many around the world increasingly reluctant to follow the U.S. lead.

In this increasingly multipolar world, Latin America, especially South America, is going to find itself not so much freed of U.S. influence – as intellectuals in the region have often stated their wishes – as exposed to new pressures.  The change will be manifest mostly in the economic arena.  New research by McKinsey Global Institute suggests that global value chains are ever more concentrated within multinational corporation networks, which tie major markets (essentially the United States, Western Europe, China, and Japan) to geographically contiguous countries.  This is arguably good for closer neighbors, such as Central America and the Caribbean in our hemisphere, but potentially harmful to those left out – including Sub-Saharan Africa, possibly the Mideast, and South America.

South America has diversified its trade – generally a good thing – among the United States, EU, and East Asia, with the latter having become the major trading partner for a number of countries. Chile and others have been pushing hard to build the Pacific Alliance, as well as to institutionalize the alliance’s relationship with Mercosur. This strategy will be put to the test if, as early trends indicate, the world regionalizes and South America comes under great pressure to refocus on its relations with the United States. To protect and advance their interests in the future, South American countries probably will try to find the right balance between embracing and rejecting the declining yet still dominant hegemon to the north and, as in the case of Venezuela, developing their own strategic vision, forging unity among themselves, and putting some muscle behind an agenda that prepares them for the future.

March 18, 2019

* Leslie Elliott Armijo is an associate professor at the School for International Studies, Simon Fraser University, Vancouver. She is the co-author, with Daniel C. Tirone (Louisiana State University) and Hyoung-kyu Chey (National Graduate Institute for Policy Studies, Tokyo), of The Monetary and Financial Powers of States: Theory, Dataset, and Observations on the Trajectory of American Dominance.

Latin America Takes on Big Pharma

By Thomas Andrew O’Keefe*

Colorful pills in capsule form and tablet form

Generic pills / Shutterstock / Creative Commons

For the past decade, Latin America has attempted to reduce the prices of high-cost medications through either joint negotiations, pooled procurement, or both, but so far with limited success.  The incentive for reducing prices is that all Latin American countries have national health care systems, and in some cases (such as Colombia and Uruguay) are legally obligated to provide their citizens with any required medication free of charge and regardless of cost.

  • In the bigger countries, such as Brazil and Mexico, the prices for certain pharmaceutical products and medical devices for public-sector purchase at the federal, state, and even municipal level are negotiated by a single governmental entity. Argentina, Chile, and Mexico also have mechanisms for pooled procurement of public-sector health-related purchases at all levels of government.  Given its huge internal market, Brazil also unilaterally caps prices on medications and threatens to issue compulsory licenses to extract concessions from pharmaceutical multinationals.

Latin American countries have also tried turning to sub-regional mechanisms to protect themselves from excessively high prices, albeit with meager results.

  • The Central American Integration System (SICA) has the most active regional mechanism to negotiate the prices of high-cost drugs and medical devices. The governments of Belize, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Panama have authorized the Council of Central American Ministers of Health (COMISCA) to negotiate lower prices on their behalf.  Those medications and devices that obtain a reduction are then acquired by the public sector utilizing each government’s procurement procedures.  By negotiating as a bloc, the SICA countries report total savings of about US$60 million on dozens of products since the initiative began in 2010.
  • In late 2015, MERCOSUR launched a mechanism to negotiate prices for both the full and associate member states. Since those 12 countries coincided with UNASUR’s membership, that entity was given a supporting role to create a continental data bank of pharmaceutical prices paid by each member government that would be used to support the MERCOSUR negotiations.  That data bank proved to be ineffective, however, as not all countries submitted the required information and the methodologies for determining prices was inconsistent.  To date, MERCOSUR has only obtained price reductions for one HIV medication, manufactured by an Indian firm eager to establish a market presence in South America, and reportedly for an immunosuppressive drug used after organ transplants to lower the risk of rejection.  Reduction offers by Gilead for its Hepatitis C cure have, so far, been rejected by the MERCOSUR governments as inadequate.

MERCOSUR’s limited achievements appear to have encouraged individual countries to press on alone.  Colombia, while initially supporting the MERCOSUR initiative as an associate member, eventually established its own national mechanism to negotiate prices, and in July 2017 announced that it had obtained cost savings of up to 90 percent for three Hepatitis C treatments.  MERCOSUR’s sparse track record also helps to explain why Chile’s Minister of Health announced in October 2018 that his country, Argentina, Colombia, and Peru would utilize the Strategic Fund of the Pan American Health Organization (PAHO) to purchase 10 state-of-the art cancer treatments.  Because of PAHO’s annual bulk purchases, it is often able to obtain significant price reductions from pre-qualified manufacturers and suppliers that are then passed on to member governments.  Member states facing a public health emergency can also make purchases without cash in hand, as the Strategic Fund will extend a short-term loan at no interest.  In the future, the Latin American countries are likely to pragmatically utilize a range of options in trying to contain the rising costs of new medications that include both national and regional mechanisms as well as PAHO’s Strategic Fund.  The challenge will be to avoid Big Pharma “red lining” the region and excluding it from accessing the most innovative medical cures such as gene therapies that can fetch a million-dollar price tag per treatment.

February 19, 2019

* Thomas Andrew O’Keefe is president of New York City-based Mercosur Consulting Group, Ltd. and a lecturer at Stanford University.  He is the author of Bush II, Obama, and the Decline of U.S. Hegemony in the Western Hemisphere (New York: Routledge, 2018).

Seeking Rights from the Left

By Elisabeth Jay Friedman and Constanza Tabbush*

Image of colorful mural with diverse images of women. Text in the mural says: "It is time to act, no more sexual violence. No more impunity"

#TimeToAct Mural in La Paz, Bolivia, by artist Knorke Leaf/ ph: Shawnna Mullenax

The “Pink Tide” of left-leaning governments that came to power in Latin America at the beginning of the 21st century made a significant difference in the lives of women and LGBT people in the region, but its reliance on traditional gendered relations of power and strategic trade-offs among gender and sexual rights reduced its impact.  In a collaborative study we conducted with 12 other scholars from South and North America, we examined the issues of social welfare, political representation, violence against women, women’s bodily autonomy, and LGBT relationship and identity recognition across eight case studies – Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Uruguay, and Venezuela.

  • We found significant progress under the Pink Tide. Most governments improved the basic economic conditions of poor women and their families, often through providing cash transfers.  In many cases, women’s representation in national legislatures advanced to some of the highest global ranks.  Some countries legalized same-sex relationships and enabled their citizens to claim their own gender identity.  They also opened up opportunities for feminist and queer movements to engage state actors and press forward their demands.

At the same time, many of these governments relied on heteropatriarchal relations of power – ones that privilege heterosexual men – thus ignoring, rejecting, or sidelining the more transformative elements of feminist, women’s, and LGBT advocates’ demands.  They also made strategic trade-offs among gender and sexual rights, such as promoting the rights of LGBT people or women’s political representation while denying reproductive health rights for women.  Moreover, the left’s more general political and economic projects have been profoundly, if at times unintentionally, informed by traditional understandings of gender and sexuality.  As a central example across most cases, not only did poor women’s unpaid care work fuel the much-celebrated social programs that reduced extreme poverty, but their unpaid community work undergirded the left political project as a whole.

  • The possibilities for gender and sexual justice seem to depend on institutional contexts as well as the organization and actions of collective actors seeking rights from the left. The degree of state institutionalization, particularly the effectiveness of checks on executive power, is critical in determining the ultimate impact of the left in power.  Moreover, the largely under-analyzed alliances that progressive political forces struck up with conservative religious ones in order to gain or hold onto power play a central role in determining the fate of policy issues – such as abortion – that touch traditional or cultural norms in Latin America.

As the pendulum swings back towards the right, the relationships among political and religious authorities which undergirded some of the challenges to gender and sexual justice under left governance appear likely to continue strengthening.  Indeed, insofar as right-wing nationalists and populists seek to redefine a national project as a counter to the ideals of the Pink Tide, they are deliberately targeting the ideas and people who seek to transform fundamental inequalities, such as those based on gender, sexuality, class, race, and ethnicity.  However, experiences under both the Pink Tide and the rise of the Right have led to alliances among those who continue to seek more just and equitable societies.  For example, consider the broad-based coalitions that undergirded massive mobilizations for legal abortion in Argentina and against Bolsonaro’s election in Brazil. 

February 4, 2019

*  Elisabeth Jay Friedman is professor of politics and Latin American studies at the University of San Francisco (on leave) and visiting scholar at the Interdisciplinary Center for the Study of Global Change, University of Minnesota.  Constanza Tabbush is research associate at Consejo Nacional de Investigaciones Científicas y Técnicas and the Interdisciplinary Institute of Gender Studies, University of Buenos Aires (on leave) and research specialist at UN Women.  Dr. Friedman edited and co-wrote the introduction of Seeking Rights from the Left: Gender, Sexuality, and the Latin American Pink Tide, published by Duke University Press and available here.  Dr. Tabbush co-wrote the introduction and the chapter on Argentina.

Mercosur: Diversifying Partnerships

By Andrés Serbin*

Mercosur Summit

A seminar at the 53rd Mercosur Summit. / Sabrina Pizzinato / UCIM / Creative Commons

Mercosur’s signing of a memorandum to increase economic and commercial cooperation with the Eurasian Economic Commission (EAEU) signals the trading bloc’s interest in diversifying its trade and political relationships beyond the western hemisphere.  The presidents of the Mercosur countries – Brazil, Argentina, Uruguay, and Paraguay –signed the agreement at the 53rd Mercosur Summit, held last month in Montevideo.  At a ceremony at which he accepted the rotating presidency from Uruguay, Argentine President Mauricio Macri emphasized the need for Mercosur to open not just to the Pacific Alliance, but also to Central America, Asia, and Africa.

  • Proposals for closer cooperation with the EAEU have been under study for many years, since Russia first created the Commonwealth of Independent States (CIS) from among the former Soviet republics (except the Baltic countries) after the end of the Soviet Union in 1991. The CIS was intended as a post-Soviet space under Russia’s leadership that would reconnect its members within a “Eurasian” geopolitical region distinct from both Europe and Asia.  The EAEU, formalized in 2015 under the leadership of Russia and Kazakhstan, now also includes Belarus, Kyrgyzstan, and Armenia.  Mercosur ministers agreed to sign the memorandum during meetings immediately before the summit, stating that enhanced cooperation and coordination with the EAEU – with which Mercosur would account for a combined 6.5 percent of world GDP – was consistent with efforts to strike a similar arrangement with the European Union.
  • Mercosur’s decision comes amid international tensions over trade and protectionism, but it cannot be divorced from the ideological, cultural, and geopolitical elements of the vision for “Great Eurasia” of which Russian President Vladimir Putin has spoken (and which Chinese President Xi Jinping has shared). The tensions between Russia and Ukraine, and Western pressures in retaliation, were a key driver of Moscow’s push for formalization of the EAEU as a potential interlocutor with the European Union while at the same time putting a brake on U.S. presence in the region.  Western analysts have debated the power of “neo-Eurasian” identity as a tool of geopolitical projection beyond the creation of a new economic bloc.  China is also a factor in Russia’s calculations.  The “Shanghai Cooperation Organization” (OCS) fostered by both countries and Beijing’s “New Silk Road” project, through Central Asia and to the EU, have also increased the salience of “Great Eurasia.”  Russia and China have increased cooperation in trade, in technology (including military) and against terrorism and extremism.  Through the EAEU and OCS mechanisms, they have extended contacts all the way to India and Pakistan and, potentially in the future, Iran and other countries.

Mercosur’s trade with the EAEU is asymmetrical in favor of the Latin American countries, with the exception of Brazil (with which it is more balanced), according to EAEU officials.  The EAEU has high internal tariffs and limited internal trade – except in bilateral trade between Russia and Belarus – but there are already tariff exemptions for Mercosur members.  Food appears to be the biggest Mercosur export to the region.  Experts believe that trade between the two blocs can be significantly increased, and that a free trade agreement can be signed before the completion of the EU-Mercosur FTA, which has been under negotiation for 20 years.

Although many Western analysts remain doubtful about the success of efforts to form a “Great Eurasia,” Mercosur apparently has determined that engagement with it is low-cost and potentially beneficial.  Beyond the possibility of expanded trade, the memorandum of cooperation signed in Montevideo suggests Mercosur sees a geostrategic interest in signaling openness to such collaboration.  The right-leaning governments of Latin America and the Caribbean are likely to remain generally aligned with the United States, but they have learned the importance of trade diversification over the past two decades.  Setting tradition and ideology aside, most are trying to interact with whomever can bring good deals to their countries in terms of trade, investment, and cooperation.  In the context of Russia and China’s interest in a “Great Eurasia,” Mercosur’s increased outreach to EAEU also reflects an important piece in a strategy to undertake the necessary diversification of its foreign policy in a changing world.

  •  The United States may not appreciate the wisdom of Mercosur’s approach. Eurasia is a blind spot for Washington, which focuses on Russia’s actions in Europe and China’s in Asia – but not in Central Asia itself or as a bridge to India, Pakistan, Iran, Turkey, and the Arab world.

January 7, 2019

* Andrés Serbin is an international analyst and president of the Regional Coordinator of Economic and Social Research (CRIES), a network of more than 70 research centers, think tanks, NGOs, and other organizations focused on Latin America and the Caribbean.  This article is adapted from one published by Perfil.com.