Nicaragua: Can Ortega Circumvent the Talks?

By Fulton Armstrong

Presidente de El Salvador participa en Cumbre SICA-Nicaragua.

President of Nicaragua Daniel Ortega / https://www.flickr.com/photos/fotospresidencia_sv/30962278823 / Flickr / Creative Commons

While the Nicaraguan government continues to stonewall in negotiations with its broad-based opposition, it is taking a series of unilateral actions that seem intended to preempt the talks – and leave the opposition behind. President Daniel Ortega and his team have flatly rejected key opposition demands, including early elections to replace him (instead of waiting for general elections in 2021) and the immediate, unconditional release of hundreds of political prisoners. They have, however, issued declarations pledging several actions on their own terms.

  • Last week, the Foreign Minister said the government “is complying, and will continue to comply, with all of [its] commitments toward understanding and peace.” Calling itself the “Government of Reconciliation and National Unity,” Managua has issued a “work program” that includes the “definitive release” by June 18 of 100-plus more political prisoners and several hundred others under house arrest. It pledged to work toward a “culture of peace” and “cooperate” with the OAS on reforms of the Supreme Electoral Tribunal to prepare for the 2021 elections. It promised legislation that supposedly will help victims of government violence during the April 2018 protests, although apparently with conditions that offend opposition leaders.

The opposition Civic Alliance for Justice and Democracy, which left the negotiating table last week, continues to enjoy widespread support, but press reports suggest mobilization fatigue is undermining its effectiveness and unity. Sympathetic media judged a hastily called national strike last week – protesting government intransigence in the talks – as effective, but they hinted at reduced enthusiasm. The Superior Council of Private Business (COSEP), a leading opposition force, recently released its assessment that the economy is “in a free fall,” with plummeting domestic and foreign investment. COSEP analysts note that the loss of 100,000 private-sector jobs and a similar number of informal-sector jobs is taking a heavy toll on society. The Catholic Church, which remains consistently critical of the Ortega government, has had a lower political profile since Pope Francis reassigned Managua Auxiliary Bishop Silvio Báez, its most outspoken critic of the government, to a Vatican job.

  • The opposition has also been stung by criticism from OAS Secretary General Luis Almagro, who’s led diplomatic pressure on Ortega to loosen up. In April, Almagro accused both sides in the negotiations of “lying” but listed untruths he attributed specifically to the opposition, claiming that “lying is the most antidemocratic practice.” Although the OAS last week approved a resolution, drafted by Canada with Almagro’s support, calling for Ortega to take concrete steps on human rights and election preparations, some 14 small opposition groups the day after accused the Secretary General of a “double standard” – allegedly being lenient toward Ortega but tough of Venezuelan President Maduro.

Government repression and intransigence in the negotiations are the primary causes of the crisis, but the opposition is, once again, showing a lack of focus and discipline. Ortega’s unilateral moves on political prisoners and electoral reform, after the opposition left the negotiation, suggest an effort to render the opposition and negotiation process irrelevant. By making the release of political prisoners its top priority in recent rounds of talks, opponents have given Ortega an area in which concrete and relatively cost-free steps can give the government momentum. Last week’s strike may have done more to show opponents’ weakness than strength inside Nicaragua, and Almagro’s swipe at “liars” – while possibly a reflection of his own personality and personal beliefs – cannot be helping outside. Some of the “liars” that have irritated him may indeed be mere troublemakers or government shills, but any dilution of international interest will be a victory for the government. The Trump Administration, which has pledged regime change in Nicaragua as well as Venezuela and Cuba, has been relatively quiet. Diplomats at the OAS are working hard to muster the four additional votes to reach the 24 necessary to invoke the Democratic Charter against Nicaragua, but Ortega seems to think he can end-run a negotiated settlement and undermine his opponents at home and abroad.

May 29, 2019

Guatemala: Mortal Doubt and Transnational Gangs

By Anthony W. Fontes*

Family members of slain gang member at his gravesite

Family members of slain gang member at his gravesite (Guatemala, 2005) / Wikimedia Commons / Creative Commons

Central America’s maras, or transnational gangs, are symptoms of societies suffering from legacies of Cold War-fueled atrocities and authoritarian rule, misguided law enforcement policies, and long-term entanglement with U.S. culture and foreign policy. Feuds between Mara Salvatrucha and Barrio18, the region’s most powerful gangs, have helped make the Northern Triangle (Guatemala, Honduras, and El Salvador) the deadliest non-combat zone in the world. My fieldwork in prisons, police precincts, and urban slums in Guatemala City and other cities since 2010 for Mortal Doubt: Transnational Gangs and Social Order in Guatemala City has mapped their dystopian evolution. The gangs are not the problem, and the problem does not begin or end with them. But they are important symbolic figures for societies struggling with out-of-control insecurity that have obscured the complex structural factors driving the countries’ extreme peacetime violence.

When they first took root in Central America in the 1990s, the maras were little more than disorganized groups of kids imitating Latino gangs in Los Angeles, vying for turf in cities struggling to recover from decades of authoritarian rule and extreme inequality. Over the years, they became brutal organizations engaged in extortion, contract killings, and the drug trade.

  • The gangs’ evolution was driven by histories of mass incarceration in both the United States and Central America, making them a symptom of these societies’ predilection to punish. In Guatemala, through the early 2000s, the gangs fought to survive behind bars against cadres of ex-military officers, the most powerful of which was led by Byron Lima, a U.S.-trained special forces Army captain convicted of a 1998 assassination of a Catholic bishop who had catalogued military human rights abuses in the Guatemalan armed conflict. The violence and deprivations of prison life, alongside the unprecedented coordination between gang leaders that being locked up together made possible, drove the gangs to become far more brutal and organized in their street operations.
  • Mara extortion rackets, among the most feared and despised criminal enterprises, are also emblematic of the symbiotic relationships between the state, law-abiding society, and the underworld in Guatemala. While maras are responsible for much of the extortion, they have in fact become a mask and a model for others profiting from it. Bus companies, private security corporations, corrupt police, and even Guatemala’s biggest banks play key roles in the extortion commodity chain.

Perhaps the most painful truth about the maras is that their rank and file are very young – primarily 10-18 years old – and the average age of recruitment is dropping. Youths are killing each other. A young man named Andy had killed and tortured for MS-13 since he was eight, when the gang adopted him after liquidating his family, who were members of a rival gang. In interviews, Andy struggled to make sense of the violence of which he was both victim and perpetrator by seamlessly folding fantasy and reality – swinging between made-in-Hollywood montages, mara myths circulated in newspapers, and actual acts of murder and torture. MS-13 found and executed Andy, who was in a witness protection program, less than six weeks after his last interview. Very real suffering is powerfully intertwined with bloody fantasy, and the dichotomies dividing innocent from guilty, good from evil, are often false. These are key lessons for understanding the maras and for effectively confronting the crisis of criminal violence in Central America that they have come to represent in such spectacular fashion.

May 23, 2019

* Anthony W. Fontes teaches international studies at American University. Mortal Doubt: Transnational Gangs and Social Order in Guatemala City was published by University of California Press. The book was winner of the William M. LeoGrande Award for the best scholarly book or article on Latin American or Latino Studies published by a member of the American University community in 2017–2018.

Venezuela: Inching Toward Negotiations?

By Fulton Armstrong

A group of Venezuelans protest against International Contact Group for Venezuela. The Venezuelan flag is held in the background as a protester holding a young child looks on.

Community of Venezuelans protest against International Contact Group for Venezuela / https://www.shutterstock.com/image-photo/montevideo-uruguay-february-8-2019-community-1307825104?src=qNES6S7x3QlbnYg-a1h2wg-1-0 / Shutterstock

As Venezuelan National Assembly President Juan Guaidó reiterates his welcome to U.S. military intervention, his international supporters – rejecting a military solution – are moving toward promoting a negotiated settlement that would include President Maduro or, in one scenario, a chavista he designates. Guaidó publicly stated this past weekend that he has directed his representative in Washington to meet with the U.S. Southern Command, whose top officer recently said “we’re on the balls of our feet and ready to go,” to discuss “cooperation.” Although the 50-plus countries that recognized Guaidó’s claim as “interim president” in January have not abandoned him, press reports indicate that they are increasingly looking at alternatives to his strategy of instigating the Venezuelan military to overthrow Maduro and, failing that, asking Washington to do so.

  • The failure of Guaidó’s attempted coup in Operación Libertad, on April 30 – after other stalled initiatives over humanitarian aid at the Tienditas Bridge in February and numerous street mobilizations – has dispirited foreign supporters who joined Guaidó’s cause almost four months ago with the expectation that he would replace Maduro within days. Leaders in Latin America and the European Union have repeatedly expressed concerns about senior U.S. officials’ assertion that “all options,” including military action, are under consideration. (Secretary of State Pompeo last week repeated that the United States “will do what’s required.”)

These shifts give momentum to diplomatic initiatives to start and monitor a negotiated internal settlement. Advocates of negotiations, such as Spanish Foreign Minister Josep Borrell, who last week said the United States was acting “like cowboys,” have begun to push harder.

  • On May 3, the “Lima Group,” including 12 Latin American countries and Canada, called for the first time for broader consultations on initiatives undertaken by the International Contact Group (the ICG, consisting of eight EU countries plus Uruguay, Costa Rica, and Ecuador) and, over the objections of Guaidó’s representative at their meeting, called for dialogue with Cuba to explore ways of ending the crisis. The ICG, meeting on May 7 with the important participation of the Vatican and Lima Group hardliner Chile, agreed to send a “high-level political delegation” to Caracas to discuss “concrete options” with both sides. Soon after, Canadian Prime Minister Justin Trudeau called his Cuban counterpart, President Miguel Díaz-Canel, to urge Havana’s help. (Cuba’s position remains that it would gladly participate if Maduro requested it.)
  • Federica Mogherini, the EU’s chief of foreign affairs, has kept up criticism of Maduro, condemning the arrest last week of National Assembly Vice President Zambrano, but press reports indicate that she’s maneuvering the 28-nation community away from absolute support for Guaidó and toward an inclusive negotiation process that produces a “political solution and early elections.” She has softened her previous demand of Maduro’s departure as a precondition.

The United States still firmly rejects any negotiated settlement, steadfastly repeating that Maduro and the “occupation forces” – Cuba and Russia – must leave Venezuela immediately. But, even if starting a negotiation does not ensure a good settlement, most of the international community is reaching the conclusion that sanctions, such as those that are worsening humanitarian conditions in the country by the day, are increasingly unlikely to produce the desired regime change and stable outcome. Anyone watching Venezuela over the years knows that both the opposition and Maduro (the latter more frequently) have thrown wrenches into past negotiations in belief that they would win a war of attrition. Advocates of a return to negotiations are under no illusion that talks this time will be easy. The U.S. sanctions will soon begin to bite harder, but Guaidó’s stumbles have convinced many that humanitarian suffering does not translate into regime change – and they may even think that now is time to begin using the leverage of sanctions and at least try to get a process going. There are few guarantees in world affairs, of course, but pragmatists seem to be betting that the probability of rescuing Venezuela from an even deeper abyss is greater with negotiations than with more sanctions and rhetoric about military attack.

May 13, 2019

Brazil: Bolsonaro Targeting Political Participation

By Paulo Castro*

President Jair Bolsonaro of Brazil looking pensive

Jair Bolsonaro / Fabio Rodrigues Pozzebom – Agência Brasil / https://flickr.com/photos/129729681@N06/35164638165/ Wikimedia Commons

Brazilian President Jair Bolsonaro – unwilling or unable to engage in the coalition-building necessary to pass legislation – has focused an important part of his first 100 days in office on social policies that he can dominate with executive power while reducing citizen participation in policy formation. Elected in one of the most polarized elections in Brazilian history, Bolsonaro ran a campaign focused on fighting corruption and implementing a market-oriented economic agenda that would lead to GDP growth, with pension reform as its main pillar. His first months have been far from a “honeymoon” with Congress; a wide array of problems add up to a legislative inertia as seldom seen in contemporary Brazil.

  • Lacking a strong base in the House and Senate – and facing dissidence even within his own Partido Social Liberal – Bolsonaro has relied on the risky strategy of ignoring the nature of the Brazilian political system, which includes building support for his agenda in Congress, and is focusing instead on attacking adversaries and what he calls the “ideological agenda” of the Workers Party (PT). Meanwhile, key ministries have yet to announce even general policy goals. The Ministry of Education, which has the second largest budget in the federal government and is responsible for one of the most deficient areas of the country, has been largely silent even though reform of the early education system was one of Bolsonaro’s main campaign promises. The President has issued executive measures, such as the bureaucracy reduction decree this week to help business owners and start-ups, but has introduced no relevant legislative agenda.

Shifting social issues is the one area in which the government is running at full throttle. Social accountability, gender equality, and broader human rights initiatives have experienced budget cuts. Because many PT-era policies were implemented by presidential decree or ministerial order, the Bolsonaro administration can cancel or alter them without Legislative Branch approval. (Many changes in the economic area require amending the Constitution, with a three-fifths majority of both houses of Congress.) Far from the prying eyes of the press and markets, small changes in the government processes threaten to increase the country’s democratic deficit.

  • An executive order signed by Bolsonaro abolished more than 600 civil society participation councils that promoted transparency and accountability by bringing civil society into policy discussions. Bolsonaro has eliminated the National Environment Council, the National Council of People with Disabilities, National Council for the Promotion of LGBT Rights, National Commission for the Eradication of Slave Labor, and National Commission for the Eradication of Child Labor, among others. The Ministry of Women, Family and Human Rights, headed by conservative religious leader Damares Alves, has announced it will limit the number of requests analyzed by its Amnesty Committee, created in 2002 to promote remedial actions for victims of the military dictatorship in Brazil.
  • On the environmental front, conflict between farmers and indigenous people has escalated since Bolsonaro limited the powers of the Fundação Nacional do Índio (FUNAI). Along with the National Forest Service, he transferred FUNAIS’s responsibility for the demarcation of new indigenous lands to the Ministry of Agriculture, which is headed by Congresswoman Tereza Cristina, a former leader in agribusiness.

Bolsonaro is trying to appear confident, but the consequences of his inaction on big-picture items such as pension reform – which will affect economic performance and public perceptions of his effectiveness – will reach a point at which his emphasis on social, cultural, and symbolic matters will not be sufficient to maintain his position. By deinstitutionalizing democratic participation on these important social issues, Bolsonaro is further reducing the country’s ability to take up tough issues, such as the priority reforms awaiting Executive and Legislative Branch attention. When it comes to education and health policies, civil society organizations and union representatives have important roles in mobilizing the interests of beneficiaries. While it is natural that opposing governments have opposing political views, Bolsonaro’s actions don’t only reflect policy shifts; they amount to a substantive reduction in accountability and government responsiveness, closing important doors that enable citizens to influence public policy and make political processes more inclusive.

May 3, 2019

* Paulo Castro is Ph.D. Candidate in Political Science at the University of Brasilia and professor at the Brasilia Institute for Public Law. He has worked as an advisor and analyst in the Ministry of Justice and private sector organizations. He was a CLALS Research Fellow.

U.S.-Central America: Suspending Aid Won’t Help

By Joseph Wiltberger*

Honduran President Juan Orlando Hernández, U.S. Vice President Joe Biden, Guatemalan President Jimmy Morales, and El Salvador President Salvador Sánchez Cerén during a Northern Triangle meeting on January 14, 2016

Honduran President Juan Orlando Hernández, U.S. Vice President Joe Biden, Guatemalan President Jimmy Morales, and El Salvador President Salvador Sánchez Cerén during a Northern Triangle meeting on January 14, 2016 / https://commons.wikimedia.org/wiki/File:Reuni%C3%B3n_Tri%C3%A1ngulo_Norte_con_Vicepresidente_Biden2.jpg / Creative Commons

President Trump’s recent announcement to cut off U.S. aid to Guatemala, Honduras, and El Salvador – intended to pressure those governments to stop migrant caravans headed for the U.S.-Mexico border – would suspend and divert an estimated $700 million dollars in funds directed mainly to regional security and economic programs with mixed impacts on migration. A comprehensive impact evaluation of recent U.S. aid to the region has not yet been conducted, so the consequences of this move are open to debate. While some of the aid may help those vulnerable to migration, other allocations to the three countries may be counterproductive to slowing migration.

The three countries have received around $2 billion in aid since 2015, when former U.S. Vice President Joe Biden initially committed Washington’s contribution to the Alliance for Prosperity Plan (A4P) in response to a surge in the migration of Central American families and unaccompanied minors. The A4P, a document drawn up by the Inter-American Development Bank and the three nations’ governments, has guided most of the U.S.’s strategic aid allocations to the region. The U.S. Congress allocated about $750 million in assistance in fiscal year 2016, $655 million in 2017, and $450 million in 2018. About a third of those funds have been aimed at improving citizen security through support for police, the judicial sector, and violence prevention programs. Roughly another third has been geared toward promoting economic development, and the remainder has been split mainly between anti-corruption efforts and support for military personnel through training and arms to fight drug trafficking and human smuggling.

  • NGOs working with communities susceptible to migration complain that the A4P was drafted by Central American leaders without their input, and that its framework – also reflected in U.S. aid priorities – favors elite business and political interests. It gives tax incentives to foreign investors and, opponents say, makes way for resource extraction, maquilas, and other transnational industries dependent on cheap labor and known to contribute to displacement. It directs hundreds of millions of dollars in aid to military and police forces notorious for human rights violations that are rarely prosecuted, a problem that human rights advocates warn endangers citizens and can force more migration.
  • Some of the programs aligned with the A4P, however, grasp the underlying causes of migration from these nations and show how aid can help if properly channeled. They aim to combat corruption and reduce violent crime by improving judicial systems and government transparency, and with community-based violence prevention programs. Many projects – such as initiatives to create economic, extracurricular, and educational opportunities for at-risk youth, and grassroots endeavors such as cooperatives of women and small farmers – are led by local organizations with a long-standing track record of effective local work on the ground in marginalized areas. One of the more rigorous impact evaluations to date found that USAID-funded community-based gang violence prevention programs were effective.

President Trump’s announcement to cut aid did not reflect an assessment of its effectiveness but instead appears to be a political maneuver to counter domestic political opponents who support aid and to punish the governments he believes have “set up” migrant caravans and should do more to stop them. Ending assistance doesn’t help. U.S. aid to Central America should be focused on proven ways to improve security and economic conditions and to combat corruption and guard against human rights violations – problems that drive the region’s emigration today. Cutting off aid will not stop caravans and runs contradictory to the A4P’s stated goal of addressing the root causes of migration. It is counterproductive to the current administration’s interests. Aid strategies would benefit from setting U.S. political and business interests aside to instead focus more on measures that effectively fight corruption, protect human rights, and provide support for trusted organizations proven to be effectively creating opportunities and safer communities for those most vulnerable to migration.

April 29, 2019

* Joseph Wiltberger is a cultural anthropologist. He holds appointments as Assistant Professor of Central American Studies at California State University, Northridge and as Visiting Scholar at the Center for Comparative Immigration Studies at the University of California, San Diego.

Cuba: U.S. Sanctions Underscore the Need for Meaningful Reform

By Ricardo Torres*

Cruise ship at Havana Harbor in April 2018/ kuhnmi/ Flickr/ Creative Commons

Washington’s new measures to tighten the embargo will hurt the Cuban people, especially the private sector, but Havana has little choice but to double-down on reform and make its economy more efficient and independent. Holding Cuba responsible for Venezuela’s resistance to U.S. regime-change policies in that country, and for alleged “acoustic” incidents harming U.S. diplomats in Havana, U.S. Secretary of State Mike Pompeo and National Security Advisor John Bolton last week announced steps that, taken together, amount to almost full reversal of the engagement that former Presidents Barack Obama and Raúl Castro announced four and a half years ago, in December 2014.

  • Among key measures is full enforcement of Title III of the Helms-Burton law of 1996 – ending waivers that three predecessor administrations had invoked – and allowing even Cuban-Americans who were not U.S. citizens at the time to sue companies involved in business dealings (“trafficking”) involving properties nationalized by the Cuban government since 1959. The U.S. officials have also pledged regulations clamping down on remittances to Cuba (which had already been regulated to ensure that senior government officials did not receive them); prohibiting dollar transactions through third-party financial institutions; and stopping “non-family” travel to the island. Details will not be known until the regulations are published, a process that usually takes several months.

The U.S. actions come at a delicate moment for the Cuban economy, will certainly worsen the country’s balance-of-payments situation by increasing the cost of international transactions, and will directly affect key sectors that depend on tourism and remittances.

  • Among the hardest hit will be Cubans engaged in private businesses, who depend on remittances for investment and foreign visitors as customers. At the end of 2018, a little more than 1.4 million formal jobs were in the non-state sector, including the self-employed (cuentapropistas), members of cooperatives, and private farmers – almost equal to the 1.6 million in state enterprises. Many others work in the informal sector to supplement their incomes.
  • The perceived increased risk posed by the U.S. measures will also cause foreign companies to postpone or cancel entirely plans to invest in Cuba.

Trump Administration efforts last year to reverse Obama-era policies, coupled with other challenges – including the weakening of the Venezuelan economy and the shift of a previously key partner like Brazil – are taking their toll on the Cuban economy. In addition, an accumulation of important internal problems has made the country vulnerable. Austerity measures announced as early as in summer 2016, including a reduction in imports and energy rationing in the public sector, have already hurt. Even in the context of a good international environment and improving ties with the United States, the Cuban economy grew slowly over the past decade. The ups and downs in policies dealing with the private sector, agriculture, and in the derailed process of reform in the dominant state sector – as well as setbacks in efforts to attract foreign investment – underscore the economy’s deep structural flaws and damage caused by deficient responses and successive delays.

In these changing times, appeals to “Resist!” are no longer enough. Aggravated by the U.S. measures, the expected worsening of the economic situation will disproportionately affect the most vulnerable of the Cuban people. The external problems could be the argument that the Cuban government needs to push aside obstacles to domestic economic reform. The country has immense internal potential but has been held hostage to the ideological purism that many profess.

  • The government of President Díaz-Canel has already announced new measures to stimulate the development of state enterprises, cooperatives, and the private sector itself. Foreign dependence has proven to be disastrous for Cuba. No foreign power is going to come to resolve the flaws of the Cuban model. Broadening and deepening reform, liberating the domestic productive powers, seems to be the only possible way forward in addition to rethinking international alliances and embracing markets more broadly.

April 23, 2019

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

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).

Venezuela: Washington Trying to Tighten the Noose

By Eric Hershberg

Two side by side images of Venezuela's territory comparing the electrical grid on March 7 and March 12, after six days of blackout

Satellite images of Venezuela. Left image taken on March 7, 2019; right image taken on March 12, 2019 during a blackout / Wikimedia Commons / Creative Commons

As Venezuelan President Nicolás Maduro completes 11 weeks in office since Washington and dozens of other countries recognized National Assembly President Juan Guaidó as “interim president,” the Trump Administration is ratcheting up the pressure. U.S. officials’ rhetoric and actions against both Venezuela and Cuba, which the State Department says is “propping up the former [Maduro] regime,” are escalating. A “senior official” told reporters last Friday that new sanctions would “tighten the noose of financial strangulation of Maduro and his cronies,” while U.S. Vice President Pence, speaking in Houston, reiterated that “all options are on the table.” Pence further focused U.S. regime-change policy on Cuba, citing Guaidó’s wife as the source of evidence that “the only way [Maduro] clings to power is with the help he receives from Communist Cuba.” Pence also said six U.S. businessmen arrested on corruption charges last year “are being held hostage by the Maduro regime,” suggesting another pretext for aggressive action.

  • Last Friday, the U.S. Treasury Department designated 34 vessels owned by PDVSA and two owned by non-Venezuelan companies for sanctions. Treasury Secretary Steven Mnuchin said the move was to block Venezuelan oil exports and cut off supplies to Cuba under the two countries’ “oil-for-repression schemes.”.
  • Press reports on Venezuela’s oil shipments have varied, but Thomson Reuters specialists have reported that Venezuelan oil shipments, after a 40 percent drop in February, remained basically steady in March despite the crisis and electricity disruptions at oil facilities. PDVSA was shipping almost 1 million barrels a day in March, with the bulk going to India, China, and Russia. Reuters calculated that some 65,000 barrels a day went to Cuba.

Electricity blackouts and resulting water shortages have continued for three weeks. While conceivably the result of serious neglect of infrastructural maintenance by Maduro’s Administration, the outages have all the markings of covert sabotage operations. Venezuela has suffered from short power outages many times in recent years, but the latest blackouts have been by far the most extensive, longest, and most damaging. U.S. officials have denied any U.S. role, direct or indirect, in the blackouts. On March 8, Special Representative Elliott Abrams said, “So the United States did not cause those [electricity] problems, the international community did not; the regime caused those problems.”

The U.S. sanctions and related operations are having an impact, but Washington’s initial estimations of Maduro’s strength and the timeline for his collapse were not realistic. Meanwhile, denials of involvement in the blackouts are hard to take at face value. The phrase “all options” surely includes covert action. Turning out the lights is a common disruption tactic, and extraordinary neglect in system maintenance makes the power grid a particularly tempting target in Venezuela. Sabotage and disinformation operations have long been core components of American covert operations in the hemisphere. They were essential tools in successful efforts to depose Guatemalan President Arbenz in 1954 and Chilean President Allende in 1973. The CIA has also formed armed groups, such as the Bay of Pigs force in 1961 and the Nicaraguan Contras in the 1980s (where CIA also mined Corinto harbor). These historical precedents may provide some indications of next steps in the administration’s campaign to bring about regime change in Caracas.

April 11, 2019

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.