The Perils of Quédate en Casa: COVID-19 and Gender Violence in Latin America

By Brenda Werth*

Women performing "A Rapist in Your Path" holding up signs

A Rapist in Your Path – Brasília/ Mídia NINJA/ Flickr/ Creative Commons License (not modified)

Stay-at-home orders during the COVID‑19 pandemic have had a devastating impact on women in Latin America and brought mass protests against gender violence to a screeching, and troubling, halt. Since the foundational march of NiUnaMenos in June 2015 in Buenos Aires, Latin American activists have revolutionized protest against gender violence in a spectacularly public way, bringing together hundreds of thousands of women and allies on the streets of major cities to denounce gender violence and demand protection of gender, sexuality, and reproductive rights. Since its debut last November, the flashmob Un violador en tu camino (A Rapist in Your Path), created by the Chilean feminist collective Las Tesis, has been performed in more than 200 cities around the world, decrying the role of the state and police in perpetuating gender violence.

  • Even as the coronavirus began to spread, movements against gender violence continued to expand. In March, millions of women marched to commemorate International Women’s Day to demand an end to femicide and gender inequality. In Madrid, among the posters condemning gender violence were some declaring “The patriarchy kills more than the coronavirus.” By March 15, however, Spain was on lockdown, and by the end of the month most Latin American countries had instituted either partial or total lockdowns. Suddenly, slogans condemning gender violence and demanding gender equality were replaced by the urgent message for people to stay home: “Quédate en casa.”

The stay-at-home orders have had severe consequences for women across the globe. In Latin America, where seven out of 10 femicides take place in the home, the weeks following the institution of quarantines saw surges in the reporting of domestic violence, primarily against women, children, and LGBTQ individuals. Calls to domestic violence hotlines increased 40 percent in Argentina, 60 percent in Mexico, and over 90 percent in Colombia. Financial precarity, unemployment, and lack of access to child and eldercare all exacerbated preexisting gender inequalities, creating a “perfect storm” for domestic violence.

  • Quarantines have proven crucial and effective in countering the health threat posed by coronavirus, but they have left victims of gender violence trapped under the same roof with their abusers. One unintended effect of quarantine is the reinforcement of the perception of domestic abuse as a private, family affair, separate from the public sphere, and excluded from the jurisdiction of the state.

Government responses to the increased domestic violence in Latin America have varied tremendously, ranging from acknowledgment to denial of the crisis.

  • Elizabeth Gómez Alcorta, Argentina’s Minister of Women, Genders and Diversity, has issued a resolution explicitly allowing individuals to leave quarantine in order to seek assistance and protection against domestic violence. The Argentine government has also collaborated in building innovative campaigns blending awareness of both pandemics – gender violence and COVID‑19. The Barbijo Rojo (red mask) campaign refers to a code word women may employ when talking to pharmacists to let them know they are at risk of harm and unable to seek out help.
  • In comparison, denial has guided Mexican President Andrés Manuel López Obrador’s response. His government has failed to implement any major policy changes to address the increase in gender violence during COVID‑19, and he has maintained that 90 percent of calls to domestic violence hotlines are false. According to AMLO, Mexico does not have the same problem as other cultures with domestic violence because “the Mexican family is exceptional.” The government’s campaign to address domestic violence during quarantine, Cuenta hasta 10, asks family members to “count until ten” before expressing anger in the home. According to Lulú Barrera, the campaign lacks “gender perspective” by disregarding the structural causes of gender violence and ultimately puts women at risk by asking them to sacrifice their wellbeing to maintain peace in the home.

While the health pandemic has highlighted the dire need for movements like NiUnaMenos and messages like that of  Un violador en tu camino to continue and expand, stay-at-home orders have halted collective public mobilizations and forced women to return to the private sphere of their homes. The movements have radically transformed awareness and perceptions of gender violence over the last five years, but the current crisis, including the alarming increase in domestic violence, shows the gender-violence pandemic remains strong and could get worse. Protecting public health through stay-at-home orders should not neglect the need to protect women. Solutions must be jointly envisioned and enacted by public health experts, activists, and political leaders.

June 29, 2020

* Brenda Werth is Associate Professor and Department Chair, World Languages and Cultures, at American University.

Argentina: Yet Another Generalized Default?

By Arturo C. Porzecanski*

Argentine Vice President Cristina Fernández de Kirchner and Argentine President Alberto Fernández during a working meeting with governors last week/ Casa Rosada/ Creative Commons

The Argentine government’s current attempt to force investors to accept a punishing debt-restructuring plan puts the country at risk of yet another sovereign default on foreign-law, foreign-currency debt. The attempt validates the massive loss of confidence that took place last August, when local and foreign investors ran for the exits in the wake of the unexpectedly strong performance of the Alberto Fernández-Cristina Fernández de Kirchner ticket in the country’s presidential primaries.

  • Confidence had already been set back in early 2018, after a series of disappointments with how then-President Mauricio Macri was running overly loose fiscal and monetary policies that encouraged excess government borrowing and facilitated capital flight. Macri’s decision to turn to the IMF for a huge bail-out loan in exchange for a modest fiscal and monetary belt-tightening shored up confidence, but the prospect of Peronism’s return to high office undermined investor confidence anew, causing a steep plunge in Argentina’s stocks, bonds, and the currency from which it has not recovered.

Fernández had a window of opportunity to provide confidence to local and foreign investors – following the example set by Brazil’s Lula da Silva back in mid-2002, when his pulling ahead in presidential polls sparked the beginning of a market rout in that country. However, all that Fernández has done is blame Macri for all that was going wrong, denying that mistrust of Peronism was also a factor in deepening the financial and economic crisis.

  • Absent any reassurance, investors have been reluctant to show up at auctions of new peso- and dollar-denominated treasury bills, preferring to cash out of positions whenever those obligations matured. Therefore, even before Fernández took charge in December, Macri was forced on one occasion to unilaterally postpone repayments of treasury bills falling due.
  • Fernández has institutionalized the practice of deferring by decree the majority of payments coming due each month, thus defaulting time and again on most peso and dollar obligations subject to Argentine law and jurisdiction. Until very recently, however, he and the Governor of the Province of Buenos Aires, Axel Kicillof, were honoring their obligations contracted under New York law and jurisdiction.

The coronavirus disrupted a less investor-unfriendly alternative devised by Fernández to avoid a repeat of the massive default, financial isolation, and bruising legal defeats (in New York courts) that his predecessors had suffered during 2002-2015. The idea was for federal and provincial governments to develop debt-restructuring proposals and present them to bondholders by mid-March, in order to obtain by mid-April creditor approval of a deferral of payments coming due during 2020-23.

  • To cushion the blow of the pandemic, the debt-restructuring plan, delayed to mid-April, included terms and conditions that were substantially worse for bondholders. Investors holding $66 billion of bonds are being asked to write off some principal and most interest payments throughout the decades-long life of new bonds to be issued in exchange for existing ones, in a proposal that would impose (net present-value) losses on bondholders averaging at least 60 percent. The Province of Buenos Aires has presented a similarly aggressive debt-restructuring plan.

A critical mass of investors has spoken out against the government’s proposal, including outright rejections by three groups of bondholders who could block any deals. To ratchet up the pressure, the federal government skipped a $503 million payment due on April 22, setting the clock running on what could easily turn into Argentina’s ninth sovereign default on foreign-law, foreign-currency debt.

  • One constructive way for Argentina to break the impasse with its private creditors would be to ask fewer concessions from them by deciding to seek new financing from, or else a rescheduling of debt service due to, the IMF. This would be achieved by requesting support under a longer-term Extended Fund Facility. Because Argentina’s program with the Fund was a short-term standby facility, under which $44 billion were disbursed, the whole amount plus interest is to be paid back in full between now and 2024. These scheduled payments to the IMF amount to more than 40 percent of total foreign-currency payments the government of Argentina is supposed to make during 2020-24.
  • If the Fernández administration were willing to work with the IMF on an economic program that would impose fiscal and monetary discipline to kick in once the coronavirus pandemic is over, the government would not need such large concessions from its private investors. In fact, such a partnership with the Fund would pave the way for a gradual return of investor confidence and the reopening of its domestic bond market for renewed financing on a voluntary basis.

April 28, 2020

*Dr. Arturo C. Porzecanski is a Distinguished Economist in Residence at American University and a member of the faculty of the International Economic Relations Program at its School of International Service.

Spanish Language: Unlikely Battleground for Gender Inclusion

By Juliana Martínez*

Spanish-speaking communities have become one of the most significant battlegrounds in the push for gender-inclusive language. Often associated with traditional gender norms and anti-LGBT sentiment, Spanish-speakers in general and in Latin America in particular are discussing gender in language, causing as much ire and excitement as use of they as a non-binary singular pronoun has in the United States and beyond. In the English-speaking world, the Merriam-Webster Dictionary’s recognition of they as “word of the year” in 2019 signaled this shift. Many young Spanish speakers are also increasingly unwilling to accept gender hierarchies in any social, political, or cultural realm as natural, innocuous, or unchangeable; and they find the gender binary limiting and exclusionary for themselves or for society more broadly.

  • In the last 15 years few regions have made larger strides in LGBT recognition than Latin America. During this period, some of the most advanced legislation and policies in the world – such as gender identity laws, same-sex marriage, adoption rights for same-sex partners, and non-discrimination statutes – have been passed in Latin America, the great majority in Spanish- and Portuguese-speaking countries.

There are two main issues at the heart of inclusive language efforts: to challenge androcentric conventions, and to expand the gender binary by incorporating gender-expansive options for speakers. In many languages, Spanish included, masculine forms constitute the linguistic and social norm. In society and grammar alike, masculinity, heterosexuality, and gender-conformance have been taken as the unmarked norm through which human experience is measured and communicated. However, just as the mere presence of a gender system in a language does not make it sexist or cis-normative, the push for inclusive language does not put the integrity of the language at risk and does not seek to dismantle its grammatical gender system.

  • As my colleague Salvador Vidal-Ortiz and I note in a recent article, substituting an e for a gender-specific o or a in a noun does not challenge the assigned gender of nouns that do not refer to specific populations. No one is suggesting that carro (the masculine noun in Spanish for “car”) should be “carre” instead. That is a caricature and, more importantly, would suggest denying speakers the right and means to name themselves by claiming that their lives are a grammatical – and also a biological, social, and legal – error or impossibility.
  • These efforts have been around for a while both in Latin America and the U.S as exemplified by the shifts in the term Latino. First came Latina/o, then the “@” in Latin@, then Latinx, and now Latine. All these forms have been (and continue to be) used as gender-neutral and expansive options to the masculine o or the feminine a. The e in particular has been getting traction and considerable (not always positive) attention. Argentina has been a trailblazer. Nowadays, it is practically impossible to attend a political rally or march in the country without hearing words like bienvenides (welcome) alongside or instead of the traditional bienvenidos or bienvenidas, or to see words like todes (instead of todas or todos) written on signs. Last year two events marked the widening spread of these shifts in the country. President Alberto Fernández made history when he used the word chiques (the gender-expansive alternative to the binary chicos or chicas) during a student rally – drawing a standing ovation; and last December Argentina made international headlines when a judge ruled in favor of including “non-binary” as the sex marker of a person’s national identification document

Despite this progress, opposition to gender-inclusive language has been fierce and is unlikely to fade quickly. La Real Academia de la Lengua (RAE), the governing body that presides over Spanish grammar, syntax, and morphology, has resisted it sternly – not surprising for an institution that has accepted only 11 women in 300 years of existence. History has shown, however, that calls for language purity and grammar correctness tend to be covers for social anxieties about upholding gender and sexual hierarchies. What upsets many speakers – particularly those used to being at the center of discourse and accustomed to holding cultural, social, economic, and political power – is not the language; it is the changing worldview that it names and advances. Inclusive language is neither a threat to the language nor a sign of its decline. Rather, it signals plasticity and health, as it illustrates its ability to adapt to shifting cultural and social norms.

February 25, 2020

* Juliana Martínez is Assistant Professor in the Department of World Languages and Cultures at American University. Parts of this post were previously published, with Salvador Vidal-Ortiz, in Latinx thoughts: Latinidad with an X in Latino Studies in October 2018.

Latin America: Growing Threat from Brazil’s PCC

By Ludmila Quirós*

City view of Pedro Juan Caballero

Pedro Juan Caballero City, Paraguay/ Wikimedia Commons

The Brazilian prison gang “First Capital Command” (PCC) is extending its influence far beyond the original base it had in Brazil when it formed around 2005, now threatening security far beyond prison walls and Brazil’s borders. Over the past 10 years, according to my estimates, PCC has consolidated its power in 24 of Brazil’s 26 states. Moreover, the group’s criminal activities – attacks, prisoner escapes, and drug-related activities – now involve branches in Paraguay, Bolivia, and Argentina – and as far north as Venezuela and Colombia. They have sleeper cells (Argentina and Uruguay); alliances with clans linked to narcotraffickers (Bolivia, Colombia, and Venezuela); and deep penetrations of governments (such as Paraguay).

  • In Paraguay, where the depth of its cooptation of state authorities is most obvious, PCC is most active. In mid-January, the dramatic escape from a Paraguayan prison on the Brazilian border underscored the scope of the problem. Some 75 prisoners, including a dozen PCC members, fled the Pedro Juan Caballero Prison through a tunnel that Paraguayan authorities knew about but were unable to close because of corruption at multiple levels, according to numerous sources.
  • In Argentina, national authorities have been tracking the group’s growth since the first infiltration of cells in 2018, when elements attempted to enter a jail in Oberá, in the province of Misiones near the “Triborder Area” with Paraguay and Brazil. Otherwise, the group seems to be keeping a low profile, suggesting an emphasis on the emplacement of sleeper cells for the time being. These individuals could be involved in creating “micro-trafficking” networks and establishing communications with allies under arrest for drug activities, but confirmation is lacking.
  • Other PCC members appear to be setting up in Uruguay, where preliminary circumstantial evidence suggests they’re involved in laundering PCC funds, and in Bolivia, where establishing drug routes into Brazil would be top priority. In Colombia and Venezuela, which are more directly involved in the drug trade, PCC has similar activities, according to research. Efforts in Colombia involve “transfers” of senior PCC members to that country to negotiate the purchase of drugs and to manage their transport through chains that get the product into Brazil.

Although PCC’s corrosive influence is being felt gradually throughout the continent, Paraguay is clearly the group’s most vulnerable target. Its allies function as full franchises of the Brazilian PCC, and the prison escape, indicating that they have bought the cooperation of very senior officials, suggests it is able and willing to assume an even greater role in the country. PCC’s ability to negotiate among gangs in Brazil on issues as sensitive and strategic as levels of violence and truces means that in even more vulnerable societies, such as Paraguay, it could rise to play a kingmaker role on a range of security matters. In that context, prison escapes like last month’s enable it to do more than recruit local members and allies; they give PCC concrete leverage to use in interactions with Paraguayan authorities.

  • This possible contagion effect – infiltrating other countries and developing loyal followers – will increasingly challenge the regional and national security institutions in the region at a time that governments are distracted by other pressing issues and there is relatively little understanding of how organized crime is evolving.

February 6, 2020

Ludmila Quirós is a researcher at the Center for Studies on Transnational Organized Crime (CeCOT) and the International Relations Institute, La Plata National University in Argentina.

Argentina: End of the “Right Turn”?

By Santiago Anria and Gabriel Vommaro*

From right to left, Cristina Fernandez de Kirchner and Alberto Fernandez, and other ministers

From right to left, Cristina Fernández de Kirchner, Alberto Fernández, and other ministers / Wikipedia / Creative Commons / https://es.wikipedia.org/wiki/Archivo:Ministros_de_Cristina.jpg

The inauguration of Argentine President Alberto Fernández and Vice President Cristina Fernández de Kirchner last week confirms that the pronouncements of the death of Latin America’s “left turn” were premature — and that, rather than turning in any clear direction, political winds in the region appear to be blowing in all sorts of directions, with the only discernible underlying pattern being anti-incumbent votes following periods of economic crisis or economic downturns.

  • Obituaries for the “left turn,” which started in 1998 with the election of Hugo Chávez in Venezuela, have been appearing for years, particularly since the election of former President Mauricio Macri in 2015 and other right-leaning politicians in the region. Macri was widely seen as a bellwether of a broader “right turn” in the region — a turn that spread to Brazil, Chile, and elsewhere. For the very first time since the country’s democratic transition, a right-wing political party, in alliance with other parties, gained national power via democratic elections. To avoid the fate of other non-Peronist presidents, none of whom were able to finish their terms of office, Macri built a national coalition with broad societal bases of support.
  • The victory of left-Peronism in October, however, was formidable. The team of Fernández and Fernández obtained 48.1 percent of the votes, well above the 40.3 percent of the incumbent Macri. With two antagonistic camps capturing almost 90 percent of the vote, the elections were probably the most polarized since Argentina entered its democratic transition in 1983.

Rather than represent systemic shifts to either the right or left, the Fernández-Fernández victory is further evidence that Latin American electoral politics follow a routine alternation-of-power explained by retrospective, anti-incumbency voting driven by broad societal discontent — a sharp repudiation of incumbents that couldn’t deliver growth, adequate social services, and security. The left-right axis in Argentina is marked by high levels of polarization, with two major rival coalitions — Peronists and non-Peronists — structuring the electoral supply and disputing the center.

  • The defeat of Macri and his Cambiemos coalition revealed the center-right’s failure to carry out its desired free-market reforms aimed at dismantling the statist economic model based on the domestic market, wide social protections, and state intervention in the economy. Macri’s coalition lacked the unity to achieve pension reform and other difficult measures. Instead, Macri resorted to a “gradualism” that did not work in policy terms or politically. Similarly, his conciliatory approach to foreign creditors did not result in the expected capital inflows and economic growth. That fiscal gradualism was financed with a high rate of external indebtedness that made the Argentine economy even more fragile and ended in a massive financial crisis, after which the Macri government changed its approach towards greater economic orthodoxy.
  • The legacies of the previous Kirchnerist governments, including constraints on the government’s ability to cut spending, were also severe obstacles. Trade unions and social movements retained a high mobilization capacity and blocked attempts to remove state protections, effectively blocking labor reform and other Macri priorities. Once the government lost access to international credit and asked the IMF for a bailout — the largest in IMF history — it began to lose the support of social sectors that had been important to its rise, including business and large segments of the middle-class.

Center-left Peronism may also be unable to escape the left-right alternation. Widely discredited a few years ago and seen as a retreating force, especially due to corruption allegations and mismanagement, it kept strong connections with its societal core not only through the memory of the good old days of redistributive policies associated with the commodity boom, but also because there was no major shift in the political orientation of its main leader, Cristina Fernández. She broke with the conventional wisdom of Peronism that would have anticipated more leadership pragmatism and ideological eclecticism. As in the past, it has made promises that may eventually undermine its popular support.

  • The Fernández-Fernández formula will look and govern differently than it did during the Kirchnerist governments. It will be a broader center-left coalition formed by the Peronists and backed by a wide array of progressive parties and movements. But in addition to facing a hostile regional and global environment, Fernández will face many domestic challenges in a society that accumulated so many pressing demands during the ongoing Argentine economic crisis. Fernández inherits extraordinarily high levels of debt, soaring inflation, and rapidly rising unemployment and poverty levels. The “honeymoon” period, as some of his allies openly say, will be short, and Macri’s Cambiemos is likely going to provide strong opposition. The new government will unlikely escape the routine alternation-of-power dynamics explained by anti-incumbency voting in contexts of deep economic crises after the end of the “commodity boom,” strong inflationary pressures, and broad societal discontent. Polarization and mood swings are likely to remain persistent features of Argentine politics.

 December 17, 2019

*Santiago Anria is Assistant Professor of Political Science and Latin American Studies at Dickinson College. He is the author of When Movements Become Parties: The Bolivian MAS in Comparative Perspective (Cambridge University Press, 2018). Gabriel Vommaro is Full Professor of Political Sociology at the National University of San Martín and Researcher at CONICET. His most recent book is La Larga Marcha de Cambiemos (Siglo XXI Editores, 2017).

Latin America: Total Chaos?

By Carlos Malamud*

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

Democracy and democratic values are in crisis throughout South and Central America, but the causes – and solutions – vary across the region, with rays of hope that at least some countries will find their way forward. The Bolivian elections, plagued by suspicions of fraud, reflect some of the problems that affect all of Latin America. The previously unbeaten President Evo Morales, in government since 2006, has now shown his limits and, even if his election is confirmed, will govern without the parliamentary majorities he enjoyed in the past.

  • Latin America witnessed violent protests almost simultaneously in Ecuador and Chile; Mexico blinked during a confrontation with the son of narcotics kingpin Chapo Guzmán; the Congress was dissolved in Peru; an ex-President in the Dominican Republic denounced as fraudulent the primary election he lost and joined another party to be its candidate; and a massive exodus continued pouring out of Venezuela, whose crisis is terminal but without an expiration date.
  • The Argentine and Uruguayan elections on October 27 marked the end of a three-year cycle of elections during which 14 countries voted to elect or re-elect their presidents. Speculation was originally that a swing to the right would counteract the Bolivarianism of the previous swing to the left. That shift never happened. In its place, a more heterogeneous and divided Latin America emerged, reflected in the outcome of the Argentine and Uruguayan elections, and in the not-insignificant fact that Mexico is governed by Andrés Manuel López Obrador while Brazil, the other regional power, has Jair Bolsonaro.

The causes of this wave of divisiveness are the subject of different theories. Many observers speak of a Castro-Chavista conspiracy, orchestrated by Venezuelan President Nicolás Maduro and the leftist São Paulo Forum. Others think it’s a popular reaction to the drastic adjustment programs of the IMF. Yet others argue about a contagion factor and the impact of social networks, which enable real-time communication and the transfer of vivid images of events. Nonetheless, any theory that tries to harness all of these theories will be flawed because each national reality is responding to different logic and dynamics.

  • All of the countries of the region are experiencing inequality, poverty, corruption, violence and narco-trafficking, unhappiness with democracy and its institutions, rejection of politicians, and the impact of the “new politics” of social media and fake news. But they are not present to the same proportions.
  • Neoliberal, Bolivarian, and populist governments are all suffering from rebellions. The Chilean protests over transportation fees under neoliberal President Piñera were preceded by protests in Brazil in 2013 under progressive President Dilma Rousseff. If Piñera resorts to military force to stop the protests, Nicaraguan President Daniel Ortega did something similar in 2018, killing more than 300. The IMF might have been behind the reduction of fuel subsidies in Ecuador, but it had no role in Chile. While elections went as normal in Argentina and Uruguay, in Bolivia, like in Venezuela, the allegations of fraud have been constant.

The solutions to each country’s challenges will have to be as different as their causes. While one country needs deeper economic adjustment, another needs to fix its political institutions. Each is going to have to find its way through the crises. Latin America will find little solace, moreover, in the fact that this high level of conflict is not exclusive to its region. From Hong Kong to Cataluña, or in Libya and Lebanon, similar challenges are disrupting national life.

  • Amid the many indications that representative or liberal democracy is under direct attack – that we may be facing the end of an era with potentially dire implications – some positive notes are visible in Latin America. In addition to the orderly contests in Argentina and Uruguay, the local and regional elections in Colombia in late October were an effective exercise in democracy – won by the center and lost by the extremes. Uribismo on the right and Gustavo Petro on the left were the big losers. The emerging symbol was Claudia López, the first woman elected mayor of Bogotá, who is also a lesbian, environmentalist, and leader against corruption. The path ahead is certainly not going to be easy for Latin America, but there is evidence that, with a big dose of tolerance and respect for each other’s reality, Latin Americans can do a lot better.

November 5, 2019

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

 

U.S.- Latin America: Policy Shifts Ahead?

By Fulton Armstrong

Former White House National Security Adviser John Bolton speaks to reporters on events occurring in Venezuela Tuesday, April 30, 2019, outside the West Wing entrance of the White House.

Former National Security Advisor John Bolton speaks to reporters on Venezuela in April 2019/ Tia Dufour/ White House/ Wikimedia Commons

The sudden departure of President Trump’s outspoken national security advisor, John Bolton, is unlikely to result in changes in U.S. policy objectives in Latin America but could lead to the same sort of swings in tactics – harder or softer – that characterize other U.S. policies around the world. The continued weakness of the State Department’s input, aggravated by erratic staffing in its Latin America offices, further suggests that it will not play a balancing role.

Trump and Bolton’s statements over their 17 months together indicated no disagreement on objectives and tactics in Latin America, including immigration, close relations with Brazilian President Bolsonaro, efforts to rescue the Argentine economy, and Venezuela. They had identical positions on the waves of sanctions against Venezuela, U.S. commitment to remove President Nicolás Maduro, and unstinting support for National Assembly President Juan Guaidó’s claim to the Presidency, including backing Guaidó’s flopped coup in April. They both also explicitly linked taking down Maduro with achieving regime change in Cuba.

  • Trump and U.S. Senator Marco Rubio, widely seen as his top referent on Latin America and related political matters, are trying to signal that after Bolton’s departure the Administration is going to turn up the heat on Venezuela and Cuba. In apparently coordinated tweets between them, Trump said, “In fact, my views on Venezuela, and especially Cuba, were far stronger than those of John Bolton. He was holding me back!” This complements rumors that Trump has been frustrated that Bolton’s strategy in Venezuela, particularly the fact that Maduro supporters had tricked him into false confidence in Guaidó’s failed coup, has not removed Maduro from office. (It is unclear if one of his concerns is that U.S. sanctions are worsening the refugee flow challenging neighboring countries.)

Most Washington-based observers believe, however, that Latin America is the least important of the five issues that, according to press, caused friction between Trump and Bolton. The President’s personal involvement has been much greater with North Korean leader Kim Jong Un, in efforts to achieve regime change in Iran, in talks with the Taliban for withdrawal of U.S. troops from Afghanistan, and in maintaining good relations with Moscow despite the complex situation in Ukraine.

  • Trump has appeared to lack deep interest in Latin America policy and sees it as primarily a domestic political tool for consolidating his base – among anti-Maduro and anti-Cuba voters in Florida, an important state in his re-election calculus, and among supporters for his wall on the Mexico border and other anti-migration measures. Long ago he essentially handed the Venezuela and Cuba issues over to Senator Rubio, and the National Security Council brought a Rubio ally, lobbyist, and blogger, Mauricio Claver-Carone, to the White House to work the issue. They appointed Elliot Abrams, despite baggage from the Iran-Contra era and the Bush-Cheney Administration, to handle diplomatic operations on Venezuela for them.
  • By all appearances, Secretary of State Michael Pompeo has subordinated his own Latin America team to the White House operators, essentially stifling a traditionally important voice at the policy table. When Assistant Secretary Kimberly Breier resigned last month, only nine months after being confirmed by the U.S. Senate, she said it was to spend more time with her family, but her bureau’s marginalization left questions about her policy impact. Her acting successor, veteran State Department lawyer Michael Kozak, who has spent much of the last 10 years managing “democracy promotion” programs in Latin America and elsewhere, is not likely to challenge Rubio and Claver-Carone unless Pompeo takes the lead, which he shows no sign of doing.

The new national security advisor will have more urgent problems to deal with than wrestling with Rubio, Claver-Carone, and their allies. Indeed, Trump may even give them a green light to escalate provocations even further. For example, Administration allegations that Colombian guerrillas and narcotics-traffickers receive crucial aid from Caracas – buttressed by invocation of the Rio Treaty last week – are logical ways of laying the political groundwork for some sort of military action, perhaps jointly with Colombia, against alleged camps in hopes that the Venezuelan military finally tells Maduro that it’s time to go. 

  • President Trump’s trademark approach to thorny problems has been unpredictability and experimentation with wide-ranging alternatives, including face-to-face negotiations and deal-making with opponents that pose much tougher challenges to U.S. interests than do Venezuela and Cuba. Such flexibility notwithstanding, with the U.S. elections just 14 months off, Trump’s electoral calculus strongly suggests he’s going to stay the course with policies toward Latin America that he’s told are popular in South Florida.

September 17, 2019

Argentina: Market Meltdown Can Be Halted

By Arturo Porzecanski*

From right to left, then-president Cristina Ferdandez de Kirchner, then-minister Alberto Fernandez, and other then-ministers

Ministers of Cristina de Kirchner / Wikipedia / Creative Commons / https://es.wikipedia.org/wiki/Archivo:Ministros_de_Cristina.jpg

The unexpectedly strong performance of the Alberto Fernández-Cristina Fernández de Kirchner (FF) ticket in Argentina’s August 11 presidential primaries has triggered a stampede out of the country’s currency, stocks, and bonds, but FF hold the key to staving off a full-fledged crisis. If the confidence of local and foreign investors is not recovered soon, the market rout has the potential to induce runaway inflation, plunge the economy into a deep recession, and cut off domestic and international financing for both the outgoing and incoming governments, potentially leading to a default.

  • The FF Peronist ticket’s 15.6 percentage-point margin of victory over President Mauricio Macri and his companion was foreseen by none of the pre-election polls. The wide gap shocked investors because it indicates the Fernández duo could win in the first round in the October 27 general election, avoiding a second-round ballot on November 24 in which the pro-market Macri was thought to have a better chance. The coattail effect of FF helped allies in provincial and local primaries around the country. With likely majorities in one or possibly both houses of congress, FF would have a powerful government that could implement much of its agenda, for better and for worse.

Now the challenge is to stop the vicious cycle of capital flight, currency depreciation, accelerating inflation, and plunging economic activity sparked by the electoral results. Failure to do so sooner rather than later will make it very difficult for the government to refinance its maturing short-term debts, and the Central Bank will likely experience a steady drain of its international reserves. In that scenario, the IMF, which has been sending big checks to Argentina every three months, would probably not send the next one in late September.

  • The Macri administration has announced some palliative measures (e.g., a 90-day freeze in gasoline prices and a tax exemption for food purchases), and the Central Bank has tightened marginally monetary conditions. But the government leadership team is powerless to restore the investor confidence that has evaporated.

Given his clear frontrunner status, Alberto Fernández could play a crucial role in reversing the trend. During eerily reminiscent circumstances in Brazil in mid-2002, local and foreign investors were increasingly worried that Luiz Inácio “Lula” da Silva, who was running strong in the polls in his fourth presidential campaign, would end the market-friendly policies of the outgoing Fernando Henrique Cardoso – including a break with the IMF, from which Brazil had been borrowing.

  • Worried about potentially inheriting an economic and financial mess, Lula made a public statement – he called it a “Letter to the People” – making clear his commitment to sound fiscal and monetary policies and the rule of law. He wrote about a “new social contract capable of assuring economic growth with stability,” one of whose premises was “naturally, a respect for the country’s contracts and obligations.” He followed those words with concrete actions. Two months before the elections, he gave his blessing to a new IMF program committing the next government to maintain, with minor modifications, Cardoso’s austere fiscal and monetary policies.

Lula’s actions after his election, including putting a market-friendly and popular mayor in charge of his transition team and choosing a career private-sector banker to run the Central Bank, provide a path that Alberto Fernández could follow as well. Under Lula, the Brazilian Central Bank felt supported in its all-out effort to extinguish the flames of inflation and to buttress the currency. Interest rates were thus hiked as needed before and after the October 2002 elections. He initiated confidence-building meetings with investors before taking office and reassured lenders and investors, both in Brazil and abroad.

  • So far, Alberto Fernández is denying any responsibility for the developing financial and economic crisis, blaming Macri for all that’s gone wrong. But unless he makes announcements that give confidence to local and foreign investors, he will inherit a mess.

August, 22, 2019

*Dr. Arturo C. Porzecanski is the Distinguished Economist in Residence at American University and a member of the faculty of the International Economic Relations Program at its School of International Service. This article is adapted from an essay he wrote in Americas Quarterly.

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

By Thomas Andrew O’Keefe*

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

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

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

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

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

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

August 6, 2019

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

South America: Regional Integration or Presidential Posturing?

By Stefano Palestini Céspedes*

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

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

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

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

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

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

March 29, 2019

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