Ecuador: Moreno Reverses Another Correa Policy

By John Polga-Hecimovich*

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President Lenín Moreno / Flickr / Archivo Medios Públicos EP / Creative Commons

Ecuadorian President Lenín Moreno’s announcement last week that he had withdrawn diplomatic immunity for Wikileaks co-founder Julian Assange was long in coming and consistent with his efforts to reverse the excesses of his predecessor, ex-President Rafael Correa. In a three-minute-fifteen-second speech via Twitter, Moreno listed the reasons for his decision: Assange’s disrespectful and aggressive conduct, Wikileaks statements against Ecuador and, above all, Assange’s transgression of “international conventions.” Predictably, Correa, who originally offered the asylum protection, accused Moreno of being “the greatest traitor in Ecuadorian and Latin American history” who had committed a crime “that humanity will never forget.” Wikileaks accused Moreno of trading Assange to the United States for debt relief. Rhetoric and accusations aside, Assange had long been on shaky ground with the Moreno administration, and recent leaks of the president’s personal information made the decision seemingly inevitable.

  • Correa offered Assange asylum in 2012 to thumb his nose at the United States and contest claims that he did not protect freedom of the press. After Wikileaks leaked hundreds of Democratic Party campaign emails in 2016, he restricted Assange’s internet access at the embassy in London but, for ideological consistency, continued to support his infamous houseguest. Moreno possessed no such ties when he took office in May 2017 and called Assange “an inherited problem.” Assange’s asylum impeded Moreno’s ability to seek greater security and commercial cooperation with the United States.
  • The Wikileaks founder did not seem to understand the significance of this change. Not only was he messy, demanding, and abusive toward embassy staff; he reportedly violated his asylum conditions and, according to Moreno, tried to use the embassy as a “center for spying” – prompting Ecuador last October to impose a protocol regulating his visits, communications, and other matters. The tipping point for the Ecuadorian government was in February, when an anonymous source sent a trove of emails, phone communications, and expense receipts to Ecuadorian journalists, supposedly linking the president and his family to a series of corrupt and criminal dealings, including money laundering and offshore accounts, leading to a corruption investigation by Ecuador’s attorney general. A website also published leaked personal material unrelated to corruption, including photos of Moreno and his family lifted directly from his phone.

Moreno’s decision is unlikely to significantly affect his political capital. Although polls show his approval rating continues to decline as he pursues fiscal austerity policies, public opinion on this issue is likely to split along existing pro-Correa and anti-Correa lines. Further, given that personal information was already leaked, Moreno does not seem to fear potential reprisals from Wikileaks or others for his action. Nor does he appear to harbor additional political ambitions: he has all but ruled out running in the 2021 elections, and his once-dominant Alianza País (AP) party performed poorly in the March 24 regional elections, managing to win a paltry two of 23 governorships and only 28 of the 221 mayoralties. If anything, Moreno should be more worried about the attorney general’s investigation than the fallout from booting Assange.

Little by little in his two years in office Moreno has neutralized Correa’s political power and reversed his predecessor’s policies – often provoking the ex-president (see previous posts here and here). In the last six weeks alone, Moreno announced he would launch an international anti-corruption commission; hosted and expressed his support for Venezuelan opposition leader Juan Guaidó, saying that Venezuela and Ecuador “are both on the way out of the abyss in which we were placed: this poorly named 21st century socialism”; and signed a $4.2 billion loan from the IMF – all actions that would have been unthinkable from 2007 to 2017. Ultimately, giving Julian Assange asylum was politically costly and brought no benefits to a government that’s too weak to waste political capital on an international troublemaker. Recent events may have triggered his ouster from the embassy, but the writing has been on the wall for some time now.

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

Mexico: Gambling That Austerity Will Be Enough

By Juan Carlos Moreno-Brid*

Mexico City's Paseo de La Reforma

Mexico City’s Paseo de La Reforma / Flickr / Creative Commons

While continuing to emphasize his goal of reversing neoliberalism in Mexico, President Andrés Manuel López Obrador (AMLO) is pursuing a budgetary policy with austerity – not much-needed fiscal reform – as his top priority, at least for 2019-20. In his inauguration speech last December, AMLO repeated campaign themes deriding the neoliberal policies implemented in Mexico since the mid-1980s, blaming them, as well as rampant corruption, for the country’s slow growth, rising inequality, and widespread poverty. Since then, however, the President’s speeches on economic policy and his Secretary of Finance’s main policy documents have stated that all public-sector operations will be subject to strict austerity.

  • They have indicated that 1) there will be no fiscal reform in the first three years of the administration; 2) fiscal revenue will not increase this or next year as a proportion of GDP; and 3) in this period, the public sector will not incur additional debt. In other words, the implementation of AMLO’s proposed social and economic programs will depend on the availability of public revenues subject to the strict constraint of no additional resources through public borrowing or any tax reform. The government has made sharp cuts to government personnel and wages and eliminated various public entities, including ones created to attract foreign investment and tourism.

At the same time, AMLO plans to change the composition of public expenditures significantly to accommodate his top-priority projects, among them Jóvenes Construyendo el Futuro (a massive transfer of $180 per capita for an ambitious, and, in many ways, welcome apprentice program for up to 2.3 million youngsters); Sembrando Vida (planting a million trees); Adultos Mayores; and investment to put in place a Maya Train, building from scratch a new crude oil refinery in Dos Bocas, and revamping an airport in Santa Lucía.

More in line with AMLO’s stated intention of overturning neoliberalism, what Mexico really needs is a profound fiscal reform – strengthening public revenues, modernizing public investment strategies, and strengthening its development banks – to foster growth and equality with long-term debt sustainability and greater countercyclical capacity. It is a paradox that the new government chose to commit itself to a severely austere budget, reflected in cuts in public expenditures and an increased primary fiscal surplus.

  • The decision to refrain from tax reform, coupled with drastic austerity, imposes acute limits on the new administration’s ability to strengthen and modernize infrastructure, reduce income inequality through fiscal tools, or strengthen its capacity to act in a countercyclical way – not to mention alleviate major lags in the socioeconomic conditions of the poor population. The IMF, OECD, World Bank, ECLAC, the Centro de Investigación Económica y Presupuestaria (CIEP), Grupo Nuevo Curso de Desarrollo (UNAM), and many local think tanks have systematically underlined that Mexico’s tax revenues as a proportion of GDP are extremely low. According to the estimates of UNAM, CIEP, and others, those revenues are at least six percentage points short of what is needed to meet long-standing needs in infrastructure, health, pensions, education, and overall social security and protection concerns. By reducing the bureaucratic apparatus and public-sector wages virtually across the board, the administration runs the risk of further weakening the state’s technical capabilities in some key areas of public policy and thus undermining its ability to correct course.
  • The underlying reasons for the new government’s commitment to austerity seem to be more political than economic. It has stated that a significant amount of resources can be freed up by abating the rampant corruption, and it apparently believes that before implementing fiscal reform, the government must prove to the citizens that it can deliver efficiently, effectively, and with honesty. Whether there will be sufficient achievements in terms of economic growth and inclusion and in eliminating impunity to convince the middle and upper classes to accept a progressive fiscal reform three years from now is an open question, but the answer will determine Mexico’s economic growth path and progress in the reduction of inequality, poverty, and corruption, and perhaps too its social stability and the viability of its democracy in the future.

April 16, 2019

*Juan Carlos Moreno-Brid is a professor of economics at the Universidad Nacional Autónoma de México (UNAM).

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.

Haiti: Building Democratic Institutions?

By Fulton Armstrong

A bus burning with thick clouds of black smoke billowing above it, and two men on a motorcycle riding by.

Riots in Haiti, February 2019 / AP/ Wiki Images / Creative Commons

Haitian President Jovenel Moïse is trying to end a months-long political crisis by dumping his Prime Minister, but he doesn’t seem to be addressing the underlying causes of last month’s violent protests, and scandal continues to swirl around his apparent role in a bizarre operation involving heavily armed U.S. “security specialists.” Protesters who took the streets in early February accused Moïse and close allies, including former President Michel Martelly, of diverting billions of dollars gained from the sale of fuel under Venezuela’s Petrocaribe program – money that should have gone to development programs – before he took office in 2017. They also complained about the continued economic decline under Moïse. Roadblocks around Port-au-Prince and elsewhere brought the country to a halt. Some 41 deaths were reported. The U.S. Embassy evacuated non-emergency personnel and warned persons “not travel to Haiti due to crime and civil unrest.”

  • Moïse made no public statements until after eight days of rioting, when he said, “I hear you.” Reiterating his pledge to resist opponents calling for him to step down, he said, “I will not leave the country in the hands of armed gangs and drug traffickers.” He mobilized supporters in Congress to pass a no-confidence resolution removing Prime Minister Jean-Henry Céant, with whom he had been publicly feuding, just days after the six-month anniversary of his appointment, at which point he could legally be removed from office. But Moïse has not addressed the corruption charges, nor announced any plans to revitalize the economy except by negotiating a new loan from the IMF.

The appearance and disappearance of U.S. operations specialists, who were armed with assault weapons, drones, satellite phones, and other equipment, remain a mystery. Members of the team have offered different versions of the purpose of their mission, perhaps reflecting different cover stories they’d been given, but several scenarios involve moving something sensitive – money, people, or computer technology – out of or into the Central Bank, with Moïse seemingly at the heart of the mission. The team was arrested before the operation could be completed, and Moïse and his Justice Minister got them released. The U.S. Embassy helped spring them from police custody and helped them depart the country even before they could be arraigned. U.S. authorities, after meeting them planeside in Miami, released them without charge. (The Embassy reportedly told the Minister of Justice that the U.S. Government would bring arms trafficking charges against them.)

  • Moïse’s opponents claim that Washington aided the exfiltration in return for his increasingly close alignment with President Trump and U.S. Senator Marco Rubio’s priorities, including Haiti’s first-ever vote in January on a resolution rejecting the legitimacy of Venezuelan President Maduro’s second term. Perhaps related: U.S. support was important in the IMF decision earlier this month to extend loans for $229 million at 0 percent interest. The deal will move ahead after Moïse gets a new Prime Minister confirmed. Rubio visited Moïse in Haiti last week, and Trump met the Haitian President, along with other Caribbean leaders who voted with the United States on Venezuela, last Friday at Mar-a-Lago.

If precedent is any guide, Prime Minister Céant almost certainly had a hand in stimulating the February riots, and his accusation that the U.S. security team members were “terrorists” seems far-fetched and politically motivated. But he may have correctly sensed that the armed operations team’s purpose involved an effort by Moïse or his powerful mentor, former President Michel Martelly, to shut down any additional snooping into their activities and the whereabouts of the Petrocaribe profits. Moïse appears likely to continue looking for ways to curry favor with Washington as a means of gaining U.S. support and forbearance. Indeed, U.S. willingness to hustle the security team out of the country before they could face a judge would suggest that Moïse knows how to poke holes in the United States’ stated commitment to the rule of law and democratic institutions.

Central America: Evolution of Economic Elites

By Alexander Segovia*

 

El Salvador landscape

El Salvador landscape / Google Images / Creative Commons

The elites of Central America – traditionally organized in national business groups with strong family ties – have lost power and allowed certain reforms to advance over the past 30 years, but the full impact of this historic shift has been blunted by the lack of broad, inclusive national debates and the growing role of regional economic powers. Until the 1980’s, the powerful interests of the traditional agricultural export economy dominated for more than a century, with enormous influence by virtue of their control over property and every facet of the production, processing, and domestic and foreign marketing of their products.

  • For these traditional elites, the state was to be used for their own benefit. Their decisive influence continued even as economies changed and exports diversified somewhat after World War II. It survived the growth of cities, the emergence of new players in industry, the growth of organized labor, and the expansion of government bureaucracies. Elites obstructed changes that threatened their interests and parried others into minor tweaks of the essentially agro-export model that they dominated. They preserved many inequities in social and economic systems, slowed diversification, and protected governments that were weak, corrupt, disorganized, and often authoritarian, repressive, and undemocratic.

Since the late 1980’s, according to my research, the agro-export model that enabled elites to have such power has changed significantly – facilitating the emergence of new economic models (albeit with different manifestations in each country) and eroding the old elites’ grip on society. The change was driven by the armed conflicts, political and social crises, emigration, and the flow of remittances. Neoliberal economic reforms, including liberalization, deregulation, privatization, and opening to foreign investment, had an impact within the context of the broader capitalist globalization gaining momentum during the period.

  • Although not always with alacrity, elites had to accept the advent of new spaces and patterns in which other actors were able to accumulate wealth and power. Tourism, telecommunications, banking, and other service sectors gave rise to new voices, as did the development in some countries of non-traditional exports. New entrepreneurs brought in new foreign actors, including many from neighboring countries and the rest of Latin America. Powerful transnational economic groups (known by the Spanish acronym GETs), with strong family ties, began to operate across borders – creating both new opportunities and new challenges. The GETs have already flexed their enormous influence over public policies. As a result, the traditional elites gradually have found themselves forced to function within a matrix of national and regional power, with new dynamics, over which their grip had been broken or at least significantly weakened.

National elites such as El Salvador’s have broken with the old stereotype of selfish economic interests united around an extreme right wing ideology – being more heterogeneous today in composition and perspectives than ever before – but deeper, lasting change is going to take time and effort. An inclusive national dialogue in each country to build agreement on the broad outlines of a political project to address how to effect national transformation and modernization would be the best way of reassuring all sides that their voices count, but unfortunately no country is holding one. Generational change – characterized in part by younger family members’ constant connectivity with peers outside strictly national circles – could also be a factor.

  • The increased activism of the GETs may explain why breaking the grip of the nation-based traditional elites has not led to deeper and broader change – essentially swapping one elite’s manipulation of government for another’s. The GETs have important, and sometimes decisive, influence over public policies not just in their home countries, but beyond. The future of reform therefore would appear to depend on the willingness of regional elites to pursue them. Several initiatives, including one undertaken by the Instituto Centroamericano de Investigaciones para el Desarrollo y Cambio Social (INCIDE), of which I am President, aim to promote a constructive dialogue between society and the GETs. Progress hasn’t been easy or quick, but we have proven that change is indeed possible.

March 21, 2019

*Alexander Segovia is a Salvadorean economist and President of the Instituto Centroamericano de Investigaciones para el Desarrollo y el Cambio Social.  He was Technical Secretary of the Presidency of El Salvador (2009-2014). This article is adapted from his recent book, Economía y Poder: Recomposición de las Élites Económicas Salvadoreñas.

Colombia: Ready to Expand Environmental Policies

By Luis Gilberto Murillo*

Lush view of mountain range in Colombia

Jardín, Colombia by Pedro Szekely / Flickr / Creative Commons

Colombia has provided important leadership in implementing integrated, pro-environment taxes in the country, but there is urgent need for it to do more.  In 2017, Colombia became one of three countries with the greatest advances in implementing fiscal mechanisms to control emissions, one of the principal tasks on its agenda for full membership in the OECD.  But experts believe that the deepening of the global socio-ecological crisis caused by climate change demands broader, accelerated fiscal mechanisms to protect the environment and sustainable development.

  • In 2015, Colombia, as part of its Paris Agreement commitments, set the goal of reducing greenhouse gases by 20 percent by 2030. A recent report by the Comptroller General of the Republic concluded that the Colombian national economy will need to undergo a significant restructuring to meet that goal and make the country resilient in the face of extreme climate events such as floods and droughts.  The Comptroller report opened the door to discussion of fiscal tools for action and environmental protection, with special priority given to controlling deforestation, water conservation, and improving air quality. Environment taxes on carbon, plastic bags, and motorcycles with motors above 200cc have been a starting point, but the Comptroller assesses that they haven’t been effective enough.
  • The government today has much greater resources – more than 700 billion Pesos (about US$227 million) per year – than before. Moreover, the launch of Colombia’s unique voluntary carbon market, bringing important projects and a flow of resources to rural and ethnic minorities (Afro-Colombians and Indigenous communities), has already demonstrated the positive impact of green taxes.  The program to tax plastic bags has reduced their use by 30 percent in just the first year of implementation, 2017.

Debate over how and where to invest the resources created by environmental taxes will certainly be important.  Most observers believe that the central criterion should be how well projects change the attitudes and behavior of those involved.  Projects will be key, but the contribution of each individual to save the planet will be even more important.

  • The recent finance law, introduced by the current government and approved by Congress, missed a valuable opportunity to adjust existing green taxes and create new ones, especially regarding progress in promoting electric vehicles, innovative renewable energy production, and control over the use of plastics other than bags. Upcoming legislation provides ample chances to expand environmental taxes to achieve these goals.  A better balance between various taxes – on capital and labor on one hand, and pollution and environmental degradation on the other – could lay the foundation for progress.

The gains made thus far underscore the importance of having a strategic vision and discipline.  Improvisation will fail; steady work, technical rigor, and political wisdom are required for progress.  An important first step will be the designation of a technical mission to head the National Planning Department, which is charged with leading and coordinating the country’s development agenda in the medium and long term.  Such a technical mission, along with the Comptroller team, can guide public debate and keep it squarely on the national public agenda.

March 1, 2019

* Luis Gilberto Murillo is a CLALS research fellow and former Minister of Environment and Sustainable Development of Colombia, with almost 30 years of experience in the areas of environment, sustainable development, and peace building.

Honduras: MACCIH Still Trying

By Aída Romero Jiménez

MACCIH Feb.22.2019

Luiz Antonio Marrey, Special Representative of the Secretary General, Spokesperson of the MACCIH / Flickr / Creative Commons

MACCIH, the OAS-sponsored mission to support the fight against corruption and impunity in Honduras, continues to investigate cases but with a lower profile than one year ago– and under growing political pressure.

  • Without MACCIH, most observers believe, cases like La Caja Chica de la Dama – for which ex‑First Lady Lobo is awaiting trial in prison – would not have developed. MACCIH is also credited with shutting down the Red de Diputados, a network of Congressmen accused of misappropriating government funds; the Pacto de Impunidad o Fe de Erratas, legislation that effectively shielded Congressmen involved in the Red; the Pandora case, which accused 38 lawmakers of stealing funds from the Ministry of Agriculture; and serious charges against former President Lobo’s brother.
  • Although MACCIH provides important leads and analytical capacity to UFECIC, the special prosecutor unit created to investigate corruption cases, its most valuable support comes from the political cover it provides as an internationally sponsored entity. It is often the public face of anti-corruption efforts in the country, even though Luiz Antônio Guimarães Marrey, the spokesman since last June, and his deputy have significantly scaled back their use of social media since the previous spokesman, Juan Jiménez Mayor, irritated the government with his public profile.

MACCIH’s successes have provoked resistance and, at times, a strong backlash from powerful sectors that feel threatened by its work, not unlike what has occurred with the International Commission against Impunity in Guatemala (CICIG).  When Guatemalan President Jimmy Morales banned the head of CICIG, Iván Velásquez, from returning to the country, several Honduran Congressmen were quick to state that the MACCIH mandate similarly had to be revised, and that its involvement in investigations had to be reigned in to ensure it was not overstepping its limits.  Echoing CICIG’s critics in Guatemala, they also alleged that MACCIH was violating the country’s sovereignty.

  • The Honduran Constitutional Court was already gunning for MACCIH when it ruled in May that UFECIC was unconstitutional. (UFECIC has continued its investigations without further interference, but local observers believe this could change at any moment.)  Congress has also redoubled efforts to reform Article 115 of the General Law of Public Administration to effectively shield itself from Public Ministry investigations into their handling of public funds.  Legislators want to transfer authority for such inquiries solely to the Supreme Auditing Tribunal, which civil society actors claim is sympathetic to the Congressional leadership.
  • The lack of judicial independence has remained a serious obstacle. In a high percentage of cases that go to trial, the charges have been reversed or downgraded, signaling just how fragile and corrupt the Honduran justice system is.

MACCIH’s progress in fulfilling its mission makes it vulnerable to attack and, possibly, non-renewal when its mandate expires in January 2020.  MACCIH spokesman Guimarães Marrey said in December that 11 new cases will soon be announced.  Many Hondurans hope that President Juan Orlando Hernández will be among the targets, on the assumption that he was aware of or involved in drug trafficking operations for which his brother, Tony, is under arrest in the United States.  Whether that happens or not, pressure on MACCIH is unlikely to abate.  Guimarães Marrey earlier this month re-released a draft “Effective Collaboration Law” – MACCIH’s main legislative priority – allowing plea-bargaining in return for accurate information leading to prosecutions.  Legislative opposition to the proposed legislation is strong, and its prospects – like MACCIH’s – remain uncertain.

February 22, 2019

*Aída Romero Jiménez is a team member of the CLALS project Monitoring MACCIH and Anti-Impunity Efforts in Honduras.

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).

Colombia: Flaws in Transitional Justice Threaten Peace Accord Implementation

By Néstor Raúl Correa*

Acuerdo de Paz Colombia Feb.15.2019 Flickr

People gather at Bogota’s Bolivar main square on September 26, 2016, to celebrate the historic peace agreement between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC). / Flickr / Creative Commons

The Special Jurisdiction for Peace (JEP), a central part of the Colombia Peace Accord signed in 2016, continues to stumble and is seriously, if not fatally, undermining the justice component for accountability by combatants of both sides of the conflict.  In essence a scheme of transitional justice, the JEP offered a special legal framework and exceptional judicial treatment to create the necessary conditions for peace after decades of massive, systematic violations of human rights.

  • The Accord would not only produce temporary justice; it would be negotiated justice – and it would build on other positive results such as the guerrillas’ surrender of arms and subordination to the political regime it had sought to destroy. It was centered on a quid pro quo: “You give me your weapons and, in exchange, I’ll give you softer penalties and allow you to participate in politics.”  One of three institutions established to promote reconciliation, the JEP’s mandate was to guarantee the rights of the victims.

The Peace Accord in general and the JEP specifically, however, have stumbled over multiple obstacles, in particular the opposition of segments of the Colombian populace that have not forgotten the crimes of the FARC and are interfering with the implementation of the JEP.  While every political faction has constructed its own narrative surrounding the Accord, the most radical and divisive is that of the political right.  Various factors have distorted the role of the JEP to the point that it is no longer a trustworthy reference for the conflicting parties, the victims, or citizens in general.

  • Critical constitutional and legal reforms necessary for the JEP to function, which were already thought to take at least four years, were further delayed when the Legislature diluted or postponed accountability of combatants while providing them quick relief for their crimes, especially in Amnesty Law 1820 of 2016.
  • Having eight units (three courts, four sections and one prosecutorial office) and 38 judges, the JEP was practically guaranteed to have lengthy and convoluted proceedings – a Kafkaesque labyrinth. When a guerrilla defendant has previously served in the military or as paramilitary, the process plunges into chaos.  Further complicating matters, the right has been concerned about the neutrality of current judges in the JEP, arguing that it was conceived as a FARC justice mechanism.
  • JEP management and decision-making – dominated by a handful of judges since 2018 – have become burdened with inefficiencies long present in Colombia´s justice system. Budget squabbles, bloated staffs, contract disputes, and even controversy over holidays and vacation time have become distractions.

As a result, the hope of victims on both sides of the conflict that light sanctions for those responsible for major crimes would be counterbalanced by integral and sustainable protection for themselves has vanished.  Nearly 7 million Colombians were displaced by the internal conflict (out of a total of 8,794,542 registered victims).  JEP dysfunction has denied them their voice in the processes against those who victimized them.  Victims were barred, for example, from attending the hearing of an Army Reserve general accused of murdering innocent civilians he claimed were guerrilla members killed in combat (falsos positivos), while a senior FARC commander firmly rejected victim participation as inconsistent with the Accord.  Former FARC combatants have not been held rigorously accountable.  They move freely within the country, and some FARC commanders remain in hiding and have never presented themselves.  This has further undermined civil society confidence in the JEP and the Accord.

The flaws in Colombia’s transitional justice provide valuable lessons for future peace processes.  The whole process should remain simple and expeditious, with fewer sentencing judges and proceedings.  A competent management unit, independent from the judges, should take charge of administration, including core information systems.  The role of foreign judges, particularly in cases of internal conflicts that have somehow been tainted or affect a vast number of citizens, should be increased, clarified, and protected because of the credibility, legitimacy, and independence they can bring.  It is also critical to avoid creating false expectations among victims, particularly regarding their role in judicial hearings.  An efficient, transparent judicial process provides the best guarantees of justice and effective remedies to victims and civil society.

February 15, 2019

*Néstor Raúl Correa is former Executive Secretary of JEP, a former magistrate, and currently a professor at Pontificia Universidad Javeriana in Bogotá.

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.