Will U.S. Aid Address the “Root Causes” of the Crisis in the Northern Triangle?

By Fulton Armstrong*

Women carry home their monthly food aid rations through a USAID-funded program in Guatemala/ USAID/ Flickr/ Creative Commons License

U.S. Vice President Kamala Harris’s statements this month on the need to address the “root causes” – including government corruption – of the ongoing surge of migrants fleeing the Northern Triangle of Central America reflects the strong agreement among analysts that lasting solutions will require deep reform within the region, but the Administration’s kid-gloves treatment of those governments risks repeating the errors of the past. Harris and Ricardo Zúñiga, the U.S. envoy coordinating policy toward the area, have emphasized the difficult task of real reform while also addressing the immediate challenge of the humanitarian crises contributing to migrants’ desperation.

  • While recommitting to a campaign promise to spend $4 billion in the Northern Triangle, the Administration last week announced an additional $310 million in emergency assistance to mitigate suffering from recurrent droughts, food shortages, COVID‑19, and back-to-back hurricanes last November. Even before those calamities, 60 percent of Hondurans lived in extreme poverty, and malnourishment stunted the growth of 23 percent of children nationwide. The World Food Program in June 2020 reported that 2.3 million Guatemalans (14 percent) were suffering from food insecurity, and another 800,000 would soon follow. Malnutrition among Guatemalan children under five has skyrocketed.

Addressing “root causes” will be much tougher than sending aid. Zúñiga argues that success will depend on drastically reducing the corruption that robs citizens of state resources and fuels other crime and violence, particularly senior political and military officials’ cooperation with narcotraffickers. Harris has supposedly mentioned this in several virtual meetings with Guatemalan President Alejandro Giammattei and will stress it during a visit to the region in June. The Administration is also creating an “anti-corruption task force” to enforce the policy, and Zúñiga offered $2 million to El Salvador if it pursues a hybrid anti-corruption effort called CICIES. Corruption is an endemic problem in all three countries, but the Harris initiative seems most sorely tested in Honduras, where President Juan Orlando Hernández has emerged as the poster child of what a U.S. District Judge last month called “state-sponsored” trafficking.

  • The U.S. drug convictions of Hernández’s brother, Tony, in 2019 and of trafficker Geovanny Fuentes Ramírez last month both featured apparently credible testimony about the President’s personal role in protecting the flow of narcotics through Honduras to the United States. These allegations come on the heels of waves of evidence of other corruption, human rights violations, and electoral fraud he has engaged in.
  • Nonetheless, the White House has publicly stated that “we are going to work with [Hernández’s] government and … seek areas of common interest.” While U.S. officials have severely criticized Salvadoran President Nayib Bukele – whose migrant flow is a fraction of Honduras’s – for anti-democratic digressions, they have been relatively silent on Hernández. His efforts to portray himself as an indispensable ally appear to have earned him that latitude. Last year, after U.S. concern about trafficking rose, he won brownie points for supporting legislation deterring private jets from entering the country. Recently, he has mobilized the military several times to stop migrant caravans from leaving the country.

This is not the first U.S. Administration to try to cajole corrupt Central American incumbents to become allies in eliminating their own corruption. The humanitarian crisis requires the Harris team to send aid quickly and to collaborate with the same governments that have aggravated, and sometimes caused, people’s suffering. But the Biden Administration hasn’t given an indication yet that it can avoid being taken to the cleaners as previous administrations have, including President Obama and Vice President Biden when they teamed up with the Inter-American Development Bank for the Alianza para la Prosperidad. That initiative cost hundreds of millions but, as the current migration surge indicates, the “push” factors behind it continue to grow. Obama/Biden also made significant efforts – for example, helping CICIG in Guatemala and MACCIH in Honduras begin important processes – but local officials and their elite allies managed to get out from under both.

  • It’s a long shot that, without threats of sanctions similar to those levied against leaders who are not U.S. “allies,” Washington can get these governments to undertake major reforms that would threaten leaders’ wealth and power. But if the United States and others can break the vicious cycle of corruption, bad governance, poverty, and flight in the Northern Triangle, they will be laying the groundwork for breakthroughs far beyond the migration crisis on the U.S. border.

April 30, 2021

COVID-19: A Race Against Time to Vaccinate

By Eric Hershberg, Christopher Kambhu, and Carla Froy*

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

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

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

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

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

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

April 22, 2021

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

COVID-19: Vaccine Diplomacy Drives Hard Bargain

By Eric Hershberg, Christopher Kambhu, and Carla Froy*

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

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

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

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

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

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

April 16, 2021

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

Ecuador: Beyond the Presidential Contenders

By Christopher Kambhu*

Andrés Arauz Galarza / Wikimedia Commons / Creative Commons License (Modified) | Profile photo of Guillermo Lasso / Mabel Velástegui / Wikimedia Commons / Creative Commons License (Modified)

When Ecuadoreans head to the polls this Sunday to vote in the presidential election runoff, the two candidates on the ballot represent the country’s dominant political movements, but February’s first-round and legislative votes demonstrate a changing political context that will constrain the next president.

  • Andrés Arauz, a little-known economist until he launched his campaign, won the first round with 33 percent and is favored by analysts to win the runoff. His support lies in his ties to former President Rafael Correa, who anointed him to lead his leftist political movement. Correa intended to be Arauz’s running mate but was barred from seeking office due to corruption convictions from his time as president. Arauz’s policies are largely a continuation of Correa’s in substance and style; he has pledged to provide cash payments to a million families during his first week in office and vowed to scrap an austerity plan put in place by outgoing President Lenín Moreno as part of a loan package with the International Monetary Fund.
  • Guillermo Lasso, a major shareholder in one of Ecuador’s biggest banks and former economy minister, has reached the runoff for the third time in as many attempts, with just under 20 percent of the vote. He has the support of the business community, especially in Quito and the coastal commercial hub of Guayaquil. His name recognition and significant finances put him in a strong position heading into the second round, but his role as minister during the country’s 1999 financial crisis and long career in the banking sector remain liabilities. His campaign is working to unite rivals who lost the first round.

This is the third consecutive election in which a rightwing challenger is taking on the leftist politics of Correa, but an environmental lawyer and the third-place finisher in the first round, Yaku Pérez, is poised to play a decisive role in the outcome. Positioning himself as a leftist alternative to the establishment politics that Arauz and Lasso represent, Pérez calls for stronger environmental protections and support for renewable energy – positions that have been adopted, at least rhetorically, by both runoff campaigns.

  • While analysts predict Arauz and Correismo will triumph, the polls are close. Further uncertainty stems from how Pérez’s supporters will vote; for them, deciding between a Correista and a banker is to choose the lesser of two evils. So far, Pérez is not endorsing either candidate and has told his supporters to spoil their ballots. (Voting is mandatory.) Voters are apparently listening; polls show up to 20 percent of respondents will not vote for either candidate.

Whoever wins, they will face several immediate challenges. Cases of COVID-19 are nearing the record levels set a year ago, when scenes of bodies lying in the streets of Guayaquil made international headlines. The outgoing Moreno administration has struggled to obtain vaccines and changed health minsters three times due to poor results and various scandals. Engineering economic recovery from the pandemic will also be a huge test. Both candidates support expansion of extractive industries, which were key drivers of Ecuador’s economic growth during Latin America’s commodities boom in the 2000s. However, this tactic will face resistance from the growing environmental movement energized by Pérez’s campaign.

  • The runoff victor must also contend with the National Assembly, which saw a significant electoral shakeup in February. The Pachakutik Plurinational Unity Movement, the indigenous party which Pérez represented in the presidential campaign, had the best results in its history and will be the second largest party in the legislature after Arauz’s Unión por la Esperanza. Pachakutik generally played a minor role on the national stage until it and other indigenous groups lead nationwide 2019 protests against the Moreno administration’s attempt to end fossil fuel subsidies as part the IMF loan deal. Pachakutik parlayed its new national profile into electoral success and is in a strong position to influence most legislation, regardless of who wins the presidency.

April 8, 2021

*Christopher Kambhu is a Program Coordinator at CLALS.

Cuba: Communists Convene

By William M. LeoGrande*

(From left to right) Miguel Díaz-Canel, Homero Acosta, Salvador Valdés, Ramiro Valdés, and Roberto Morales Ojeda/ Cubadebate/ Flickr/ Creative Commons License

The Cuban Communist Party (PCC) will convene its Eighth Congress on April 16‑19 to choose new leadership and assess policies intended to address longstanding economic and political challenges – with no indication of bold new departures. After all, Raúl Castro’s heir apparent as party leader, Miguel Díaz-Canel, has adopted as his favorite hashtag #SomosContinuidad. The meeting will have three major agenda items: selection of a new First Secretary to replace 89-year-old Raúl Castro and – perhaps – the replacement of other elderly party leaders; an assessment of progress implementing economic policies adopted at the Sixth Congress in 2011; and a review of the party’s political work, as mandated by the First National Party Conference in January 2012.

  • The Cuban leadership is undergoing a generational transition from “los históricos,” who founded the revolutionary regime, to a new generation born after 1959. Castro has affirmed his intention to step down as First Secretary in favor of Díaz-Canel, who succeeded him as President in 2018. However, Castro has not publicly ruled out remaining a member of the Political Bureau, and neither have the four other veterans of the struggle against Batista on the 17-member body – including reputed conservatives Second Secretary José Machado Ventura and Ramiro Valdés. The generational transition will not be complete until they depart; it’s hard to imagine Díaz-Canel would truly be in charge if he is still surrounded by these powerful old-timers.

Pummeled by President Trump’s tightened sanctions and the COVID-19 pandemic that closed the tourist industry, Cuba is suffering the worst economic crisis since the “Special Period” of the 1990s after the Soviet Union collapsed. The central theme of the Party Congress will be an exhortation to the party faithful to go full speed ahead on economic reforms, overcoming the bureaucratic resistance that has impeded them until recently.

  • When Raúl Castro introduced the reforms in 2011, he said it would take a decade to put them in place. Ten years later, they are far from finished, although the pace of reform has accelerated over the past nine months. The number of permitted private-sector occupations has increased from just over a hundred to more than 2,000. The dual currency and exchange rate system that created crippling distortions in the economy has been scrapped. And state enterprises have been put on notice that they have 12 months to become profitable or close their doors. In the short term, however, the economy remains hobbled by inefficiencies and unable to satisfy many basic needs.

The Congress will also review the party’s “political work” the task of building public support for the government. In 2012, Raúl Castro criticized the party’s poor performance. Endless meetings degenerated into “formalism,” in which no real criticism was ever voiced and little was accomplished, thereby “spreading dissatisfaction and apathy” among the membership. These failings weakened the party’s ties to the broader public, for whom it seemed remote and inaccessible. Another indicator of the party’s tenuous standing was an 18 percent decline in membership from 2011 to 2016 – the first decline since the party was founded in 1965.

Cuba’s party congresses always convene on the anniversary of the Bay of Pigs invasion – 60 years ago this April –  to commemorate Cuba’s successful defeat of Washington’s imperial designs. The focus of the upcoming Congress, however, will be on how the party can steer its way past the shoals of Cuba’s internal challenges and “update” its economic model of socialism through reforms that it nominally embraced years ago but has failed to fully carry out. With popular discontent at a peak because of the desperate economic situation and with critics mobilizing through social media to challenge state policy, the party has its work cut out for it.

April 5, 2021

* William M. LeoGrande is Professor of Government at American University. 

Mexico: Setting a “New Social Ethic” of Sustainability?

By Veronica Limeberry*

Maize plot using agro-ecological options in Mexico/ International Maize and Wheat Improvement Center/ Flickr/ Creative Commons License

Mexican President Andrés Manuel López Obrador’s decree phasing out the use of the herbicide glyphosate and genetically modified (GMO) corn has strong support in Mexico – for now – and could conceivably show a way ahead on sustainable development for other countries. Announcing the decree on New Year’s Eve, AMLO framed it as creating a “new social ethic” in food production that puts the wellbeing of the Mexican people before the interests of private companies and profits. The government is moving ahead with implementation of the decree this month despite rapid and harsh pushback from Mexican and U.S. agribusiness. The U.S. Farm Bureau Federation, whose members sell GMO corn to Mexico, appealed to U.S. Agriculture Secretary Vilsack to oppose Mexico’s move.

  • Advocates of sustainable development have long opposed the use of glyphosate, the world’s most commonly used herbicide. The chemical was declared a probable carcinogen in a 2015 World Health Organization (WHO) report. Concern about glyphosate has surged in Mexico since a 2019 study by the University of Guadalajara found that all 148 children in the study had glyphosate in their urine, and all had chronic health conditions. The herbicide’s producer, Bayer-Monsanto, is in the midst of one of the largest settlements in history ($10.9 billion) involving tens of thousands of suits claiming that it causes cancer and death. Despite these growing concerns, glyphosate sales grew from $3 billion in 2015 to $8.5 billion last year, and industry watchers forecast them to be over $13 billion by 2027.

AMLO’s decree on GMO corn also reflects growing interest in Mexico to reclaim the country’s agricultural biodiversity. Mexico is the center of origin of over 59 food varieties, including corn, beans, squash, and cocoa. Mexican corn has long been part of the country’s national identity. The campaign Sin Maíz No Hay País (Without corn there is no country), launched more than a decade ago, embraces the grain as “the basis of our culture, our identity, adaptability and diversity.” Nonetheless, Mexico imported 18 million tons of GMO corn from the United States in 2020, comprising 40 percent of corn consumption. Seeking to reverse this, progressive deputy agriculture minister Víctor Suárez led the push for the decree and emphasizes “achieving self-sufficiency and food sovereignty.”

The decree includes radical terminology and establishes agroecology as national policy informed by Mexican food identity and traditions. AMLO and Suárez have defended its emphasis on sustainable, ethical, and increased food production “through the use of agroecological practices and inputs that are safe for human health, the country’s biocultural diversity, and the environment, as well as congruent with the agricultural traditions of Mexico.” The measure has the support of rural communities and both houses of Congress.

  • Some of the AMLO Administration’s rhetoric seems intended to provide leadership to other countries seeking alternatives to herbicides like glyphosate as well as GMO foods while trying to decenter the needs of industry. Numerous studies point to agrarian crises in many countries – such as the farmers’ movement in India – for which AMLO’s move conceivably offers a model. The Mexican decree offers language of community, sovereignty, and wellbeing attractive to advocates of agricultural sustainable development for the future. It will take some time, however, to see if Mexico’s approach persuades others that it can be implemented and retain popular support over the long term.

March 31, 2021

* Veronica Limeberry is a doctoral student at American University focusing on agroecology, food sovereignty, and indigenous territorial rights.

Nicaragua: Triple-Crisis Threatens More Instability, Poverty, and Migration

By William Vigil*

EU solidarity: helping Central America recover after hurricanes ETA and IOTA / European Union (D. Membreño) / Flickr / Creative Commons License

Three years of political unrest, COVID-19, and back-to-back Category 4 hurricanes last November have created a precarious situation in Nicaragua – raising the probability of increased instability, poverty, and migration into Costa Rica and northward toward the United States. Long ranked the second poorest country in the hemisphere (after Haiti), the country has experienced worsening socio-economic conditions since 2018, and shrinking democratic and civic spaces have deepened political polarization.

  • In 2018, the government cracked down on protests triggered by cuts in social security benefits, followed by months of violent suppression of unrest and demands for a democratic opening. The result was more than 325 dead, thousands wounded, mass detentions, and the exodus of more than 100,000 persons.
  • The turmoil drove a steep downturn in the economy. According to the Nicaraguan Central Bank (BCN), Nicaragua’s economy contracted 4.0 percent in 2018 and 3.9 percent in 2019, while inflation increased to 3.9 percent and 6.1 percent respectively. Other sources estimate a 4.0 percent decline in 2020. According to the World Bank, investment and consumption fell sharply, prompting significant unemployment, particularly in construction, commerce, and tourism. A 2019 household survey by Fundación Internacional para el Desafío Económico Global (FIDEG), a Nicaraguan think tank, indicated that poverty rates had increased at the national level, both in terms of general poverty and extreme poverty.
  • Efforts by national and international groups to advance dialogue to reduce political tensions have not been successful. Framework accords in March 2019 on the release of political prisoners and the restoration of civil rights were only partially fruitful. Targeted international sanctions against government individuals and entities have been intermittent and have not changed government behavior. Some measures have led to retribution, moreover, such as the abrupt closure of the UN and OAS human rights missions in the country.

Nicaragua’s policies regarding COVID‑19 have been erratic and haphazard, and recovery from last November’s hurricanes has been slow. Leaders initially argued that the country’s economic challenges made quarantine largely untenable, and Nicaragua attempted Sweden’s policy of “herd immunity” despite the dramatically different national and institutional capacities of the two countries. In addition, Hurricanes Eta and Iota left tens of thousands of people homeless and without drinking water. According to the Nicaraguan Finance Minister, 3 million people in 56 municipalities were affected, with estimated economic damages of $738 million.

  • Nicaragua has experienced a surge in unemployment, but – in contrast to other countries – has not adopted policies favoring a return to pre-crises levels. Some economists estimate that basic necessities and services now cost more than double the average household income. According to a Gallup poll taken in January, six out of every 10 Nicaraguans would migrate to other countries if they had the opportunity.

These crises do not show credible signs of abating. They significantly increase the likelihood of a challenging outlook, particularly for the country’s most vulnerable population groups. Systematic and comprehensive action has been lacking in and outside the country, however. The international community, including donors, multilateral banks, development agencies, and NGOs, has not been in a position to respond to the crises in a coordinated fashion. Their natural desire to seek a prominent role for civil society in any comprehensive strategy – with accountability and transparency – is frustrated by government resistance.

  • Nicaragua’s volatile political situation could eventually evolve into a humanitarian crisis with repercussions for the rest of the region. Tensions will increase as national elections scheduled for November approach, as all indications are that the government will further restrict civil and political rights. The country’s problems, moreover, could easily spill over its borders. Migration has traditionally been an escape valve. A new wave of refugees could be expected in Costa Rica, but that country’s own economic challenges may well instead drive many to head north.
  • International assistance alone won’t be enough. Conditions of strict accountability, transparency, civil society engagement, and close consultation with affected populations are necessary for it to have significant impact. Together, donors, multilateral banks, the UN, and NGOs have a degree of leverage to ensure the correct use of resources, such as by conditioning it on full respect for human rights. UN human rights chief Michelle Bachelet last month called on the government to “urgently adopt effective electoral reforms and establish a genuine and inclusive dialogue with all sectors of society,” but slowing or stopping the country’s downward spiral will require much more from all sides.

March 23, 2021

* William Vigil is co-director of the South-North Nexus. He is a former Nicaraguan diplomat who served in New York (at the United Nations) and in Washington, D.C. This article is based on a South-North Nexus report entitled Nicaragua’s Converging Crises.

Cuba: Private Sector Gets a (Tentative) Boost

By Ricardo Torres*

Morning Street Market in Trinidad, Cuba/ Bud Ellison/ Flickr/ Creative Commons License

The Cuban government has announced measures that represent a significant shift in its treatment of the private sector, but the reforms will not have the desired impact without supporting legislation and other steps. In one of its more important announcements on reform, authorities abandoned their focus on listing permitted categories of work, and instead issued a list of prohibited activities – leaving open the rest of the economy for private individuals.

  • On February 11, the Labor Ministry issued for public discussion a list of 124 activities, based on an international classification of job categories, that will remain off-limits for cuentapropismo (self-employment). Among the most prominent professions that will remain under state control are journalists, lawyers, accountants, architects, and engineers – as well as some positions in the value chain in tourism.
  • The reasons for these restrictions range from political and social sensitivity; poor coordination and improvisation among various agencies that were working on the initial drafting of the list; and the protection of the narrow interests of various industries, such as in some parts of tourism.

The benefit of these prohibitions is questionable from the perspective of national economic development. The Cuban economy appears likely to continue shifting toward specialization in services, but the next stage in that process will require expansion into areas that are more complex, more deeply integrated into the productive system, and more focused on foreign markets. This stage will require the skills of Cuban professionals, many of whom today, seeing few good prospects at home, are leaving the country frustrated in search of opportunities to use their talents and build a good life for themselves elsewhere. For a country with a demographic profile that’s already adverse, the brain drain will be even more damaging.

  • The International Labor Organization (ILO) reports that, in medium- and high-income countries, companies with up to nine workers represent 32‑38 percent of all employed persons, while another 42 percent work in entities that have between 10 and 49 employees. Cuban labor, in sharp contrast, is divided into state enterprises (with an average of 800 workers); agricultural cooperatives (94 workers); urban cooperatives (typically 39 workers); and cuentapropistas working alone or with one partner. This labor structure is simply not adequate for future needs.

The new measures raise other questions about the objectives of the reforms. Of the 600,000-plus cuentapropistas, some 100,000 are de facto companies – without full legal personality and its protections. Cuba lacks a solid framework for the development of the private sector. Consideration of the small and medium enterprise law promised by the government years ago is still in limbo, with no clear date. Cuban law also does not clearly distinguish between subsistence production and dynamic undertakings, nor between owners and workers. It does not establish the formal channels necessary for communication with the sector, nor how to apply laws dealing with social rights, environmental protection, and similar requirements. There is also no sign of specific legislation permitting work by truly independent workers and cooperatives.

The challenge ahead lies in the fact that the political documents for these and other reforms over the years – such as Conceptualización (during the 7th Party Congress in 2017) and “Plan 2030” present only a narrow, schematic concept of private-sector development. The omissions and ambiguities in them are huge. Without effective follow-up, the full intent of even these new steps will not be realized – and progress will yet again be delayed. A holistic vision of reform and its objectives is necessary now more than ever. No one knows, however, if the Cuban leadership has the appetite and political space within the party and government bureaucracy to make it happen.

March 15, 2021

* Ricardo Torres is a Professor at El Centro de Estudios de la Economía Cubana at the University of Havana and a former CLALS Research Fellow.

United States: Is ICE on the Chopping Block?

By Brandon Hunter-Pazzara*

Enforcement and Removal Operations (ERO) in Chicago, IL/ Flickr/ Public Domain

Even if the Biden Administration does not heed the rallying slogan of hashtag #AbolishICE, the United States Immigration Customs and Enforcement (ICE) could be put on a course that guts the agency’s mission and renders it a non-player in U.S. policy. The new administration’s push for immigration reform and reversal of many of its predecessor’s policies, including overhauling family processing procedures on the U.S.-Mexico border last weekend, signal significant change ahead for ICE – if not elimination of the agency itself.

The agency’s mixed performance on its two principal missions – enforcing immigration laws by removing unlawful migrants and combating transnational crime – has fueled pressure for reform.

Enforcement and Removal Operations (ERO), which account for $5 billion of the agency’s roughly $8.3 billion budget and 8,000 of its 22,000 employees, regularly fall short of ICE’s stated goals even as the mission has gotten easier. 2019 was the only year to date that it reported meeting removal targets. In 2021, the number of undocumented migrants in the United States is 10 million-11 million – the same as in 2003 – despite dramatic declines in new arrivals. According to a 2017 report by U.S. Customs and Border Protection (CBP), unauthorized border crossings were about 1 million in 2003 but had fallen below 500,000 by the time Donald Trump took office in 2017.

  • Significant changes to immigration law such as those contemplated by the Biden Administration could make ICE’s immigrant removal mission obsolete. For instance, its immigration bill creates several paths to legal status for the 11 million undocumented migrants, which if passed would shift the responsibility to U.S. Citizenship and Immigration Services (USCIS). ICE’s interior operations could very well be moved to CBP or eliminated altogether. 

Homeland Security Investigations (HSI), with a budget of $2 billion and some 10,300 employees, is one of dozens of federal and state agencies tasked with combating transnational crime. Observers have long noted that it remains unclear why these tasks are not handled by more effective law enforcement agencies. 

  • ICE each year reports its arrests, convictions, and cash and narcotics seizures – metrics that usually represent a small fraction of the total amount of narcotics reaching the street. ICE claimed it seized 6,105 pounds of fentanyl in 2020 – a year in which opioid-related overdoses increased significantly over 2019.
  • In terms of convictions, ICE reported in 2019 that it arrested 37,547 people for various crimes and won 16,792 convictions, a conviction rate of less than 50 percent. By comparison, the Drug Enforcement Administration (DEA) boasts a conviction rate in the high 80s. Policymakers may be tempted to break up HSI as ICE’s core missions decline and place its agents in other agencies.
  • While ICE claims in its yearly reports that it plays a pivotal role in terrorism prevention, it has yet to provide a public accounting of any successful operations and whether it has prevented an imminent attack during its 18 years of operations. 

ICE is not the only agency of the Department of Homeland Security (DHS) with problems. The U.S. Government Accountability Office (GAO) found DHS employees have a 10-point lower Employee Engagement Index Score – a measure of employee enthusiasm and purpose – compared to the federal average. But ICE and its missions are arguably the most vulnerable.

  • Numerous observers report it suffers from a culture of regular misconduct. As the ACLU documented, between Jan 2017 and April 2020, 39 adults died in ICE custody. During the Trump Administration, none of ICE’s directors was confirmed by the Senate – a sign that legislators don’t hold the agency in high esteem – and leadership resignations were common, including the remarkably brief two-week tenure of Jonathan Fahey this January. These issues only add to the damage done by numerous reports of ICE’s underhanded tactics and abuse of migrants, resulting in one 2019 poll finding that Americans considered ICE the worst federal agency. (Even so, according to a 2018 Politico Morning Consult Poll, most voters also say they do not support abolishing ICE.)
  • These contradictions are likely explained by the inertia of government reform and the rise of party polarization. In the past, a federal agency defined by inefficiency, incompetence, and bloat would have generated sharp criticism from Republicans. Yet, statements of support for President Trump during his presidential campaign and Presidency by ICE officials and the union representing its rank and file seem to have bought them protection. While the #AbolishICE groups are still likely to be frustrated that the agency survives, ICE seems destined to take some serious hits and would be wise to accept a serious conversation about its role and performance rather than wait for Mr. Trump’s return.

March 8, 2021

* Brandon Hunter-Pazzara is a CLALS Fellow and PhD Candidate in Cultural Anthropology at Princeton University.

Mexico: AMLO’s Backwards Move on Fossil Fuels

By Daniela Stevens*

Comisión Federal de Electricidad (CFE) Building/ ThinkGeoEnergy/ Flickr/ Creative Commons License

Mexican President Andrés Manuel López Obrador’s proposal early last month to overhaul the country’s electricity market – which appears likely to become law – will betray the country’s climate change commitments, curtail private investment, and hurt consumers. Rooted in 1960s left-wing nationalism, AMLO’s vision is for a state-led, fossil fuel-powered electricity system. It is blind to what many experts consider the urgency for the government to coordinate with the private sector, which he prefers to portray as an adversary, on strategies to curb carbon emissions.

  • The lower Chamber approved the proposal “without changing a comma,” as the President asked. The Senate passed it last night, but the law will face obstacles in court. The Supreme Court in February declared that some guidelines that the Secretariat of Energy presented last May were unconstitutional because they hindered free competition and unduly benefitted the state electricity utility, La Comisión Federal de Electricidad (CFE).
  • AMLO’s plan reverses the principle of “economic dispatch” – a provision of the 2014 Electricity Industry Law (LIE) that requires the most efficient power plants (those with the lowest production cost) to be the first to upload electricity to the grid. Given the inefficiency of the CFE’s aging hydroelectric and thermoelectric plants, the law currently favors renewables like wind and solar, which are generally inexpensive and in the hands of private investors. AMLO wants to give preference to CFE ahead of private generators.
  • Since hydroelectric plants cannot satisfy electricity demand, the main beneficiaries will be the power plants that generate electricity from fossil fuels. The administration has repeatedly argued, without evidence, that renewables should be downsized because they are unreliable and give undue advantage to private capital. In the President’s view, the initiative would end “price simulation” in a market that favors private participants.

The international community, private sector, and civil society organizations immediately rejected the proposal.

  • The country’s largest business organization, El Consejo Coordinador Empresarial (CCE), called it an “indirect expropriation” of private power plants. Further, the private sector warned that the proposal would lead to national and international lawsuits for state compensation.
  • Diplomats representing the European Union, Canada, and the United States in Mexico said the move will damage the investment climate. The U.S. Chamber of Commerce pointed out that the “deeply worrisome” initiative violates the free trade spirit of the United States-Mexico-Canada Agreement (USMCA), undermining the confidence of foreign investors.
  • Activists and civil society organizations across Mexico said the policy reverses progress toward decarbonization and called it an infringement of international environmental commitments, such as the Paris Agreement and the Sustainable Development Goals of the United Nations’ 2030 Agenda.

López Obrador’s response to the criticism has been to claim his proposal restores Mexico’s energy sovereignty and self-determination, but it ignores the reality of the country’s dependence on U.S. natural gas – brought home when last month’s snowstorm in Texas paralyzed production and eventually caused blackouts in 26 of Mexico’s 32 states. Indeed, he flipped the narrative in claiming Mexico’s handling of the crisis was a “success of CFE’s workers,” compared to the “failure” of the liberalized electricity sector in Texas.

  • Relying predominantly on the fossil fuel intensive CFE only deepens Mexico’s vulnerability. Natural gas – 80 percent of which comes from the United States – is used to cover around 60 percent of Mexican energy needs. The proposal also fails to address some deeper issues, such as the lack of storage capacity, diversity in power generation sources, and investment in the electric grid to incorporate renewables.

The move is typical of AMLO’s fixation with grandiose national projects, such as El Tren Maya and the Dos Bocas refinery, both of which will harm the ecosystem of the Tehuantepec Isthmus, and to waste money in obsolete and polluting technology that shows disregard for climate change in favor of short-sighted energy nationalism. The reform not only defies climate issues; it challenges the energy sector’s autonomy, chills the investment environment, and marks a return to monopolistic and authoritarian practices.

March 3, 2021

* Daniela Stevens is an Assistant Professor at the Centro de Investigación y Docencia Económicas (CIDE) in Mexico City.