Latin America: The Massive Challenge of COVID-19

By Carlos Malamud and Rogelio Núñez*

Bolsonaro & AMLO

Presidents Bolsonaro of Brazil and López Obrador of Mexico have been criticized for downplaying coronavirus concerns// Left: Palacio del Planalto/ Flickr/ Creative Commons (modified)// Right: PresidenciaMX/ Wikimedia Commons (modified)

Latin America has had several advantages as the COVID-19 virus has moved in – including the chance to learn the lessons of Asia and Europe – but it faces it with fundamentally weaker tools: under-resourced health infrastructures, slowing economies dependent on declining commodity prices, comparatively little ability to increase public spending, and politically weakened governments. The WHO numbers are rising and will grow steadily owing both to accelerating infection rates and more widespread testing.

Most governments have taken strong actions, including closing borders, imposing quarantines, and closing schools, but leaders face huge challenges. In many countries, their inability for years to respond to the growing social demands of the emerging middle classes, especially regarding health care, education, and other social services, have already led to major social unrest and incumbent weakness.

  • They’re going to confront the virus with grave institutional problems, including corruption and lack of financing, and a lack of popular goodwill. The worst are Venezuela, Nicaragua, and Haiti (a failed state), but Brazil and Mexico will be most deeply affected. Brazil already has a high infection rate, and Mexico’s will grow as well.
  • In Latin America’s presidential systems, most presidents have put their personal imprint on national policies. Their measures to slow the spread of the virus have faced little backlash. Brazilian President Jair Bolsonaro and Mexican President Andrés Manuel López Obrador have gone out of their way to appear oblivious to the scientific indicators that their countries could face catastrophe. Especially for politically vulnerable presidents – Chilean President Sebastian Piñera has a 10 percent approval rating – the virus entails great personal political risk.
  • Making things worse, regional organizations such as the South America Defense Council (part of UNASUR), the Pan-American Health Organization (PAHO), and the OAS have not yet provided effective international coordination. PAHO is sending “support teams” with unspecified mandates and no new resources. The Central American presidents have met digitally to coordinate strategies.

Failure of the early control measures could have dire health consequences. Health services are vulnerable and easily overwhelmed. The delayed arrival of the virus has given health officials time to prepare, and the best hospitals are in urban centers with greatest need. But the region has several Achilles’ heels, especially the shortage of facilities and resources.

  • “Universal coverage” is actually only “partial” in all but Costa Rica and Uruguay, according to a London School of Economics study. Some countries improved their preparedness in the wake of outbreaks of chikungunya, zika, dengue, and other contagious diseases, but most still lack the laboratories and field facilities to slow a virus of COVID-19’s scope.
  • Most seriously, many of the health systems lack the infrastructure to identify, treat, and isolate patients enough to slow the spread of such a highly contagious disease. The lack of efficient isolation facilities, coupled with shortages of trained personnel and essential supplies and equipment, leave the region – despite its short-term preparations – vulnerable to an outbreak much larger than in Asia, Europe and the United States.

Market crashes and likely recession in Asia, Europe, and the United States are causing collapse of the prices of Latin American exports and a series of profound pressures on economic growth in the region. Our colleague Federico Steinberg notes that the difference between a “soft-impact” scenario and a catastrophic one will depend on whether the virus is brought under control in the second quarter of the year.

  • Many observers believe the impact will be less severe in Latin America than Asia, but that assumes reasonable success keeping the crisis relatively short. Some decline is inevitable, however, because China, Europe, and the United States’ recovery will take time. Among the sobering predictions is that of the EU’s Director for Economic and Financial Affairs, who on March 13 said the EU and Eurozone will enter a recession this year with growth “considerably below zero,” but his reference to a good chance of a “normal” bounce back next year may be optimistic.
  • Experts expect food exports to suffer more and longer than energy and mineral exports, although the drop in oil prices to 1980s levels will squeeze Venezuela, Ecuador, Mexico, Colombia, Brazil and Argentina hard. New oil exploration in Brazil and fracking in Argentina has halted.

Most Latin American leaders are not oblivious to the trials ahead. On March 15, Colombian President Iván Duque said the virus will be “especially difficult for the Latin American countries” and “can overwhelm us.” The crisis requires the region to bring its principal comparative advantages – time and the ability to analyze the successful (and failed) tactics in Asia, Europe, and the U.S. – to bear to compensate for its structural weaknesses.

  • Latin America does not have the resources or mobilizational capacity that South Korea does to carry out a massive campaign to test and treat the population, but the region can avoid total catastrophe if it expands and maintains its drastic measures, adheres to the scientific evidence, and learns from other countries’ efforts to manage the outbreak.

March 26, 2020

* Carlos Malamud is a 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. Rogelio Núñez is a Senior Fellow at the Elcano Royal Institute and Professor at El Instituto Universitario de Investigación en Estudios Latinoamericanos (IELAT), Universidad de Alcalá de Henares. This article is adapted from their recent analysis published here on the Elcano Institute website.

This post has been updated to correctly identify the President of Chile.

Brazil: Politicizing Refugee Policy

By João Jarochinski Silva*

Venezuelan refugees in Boa Vista, Brazil

Venezuelan refugees in Boa Vista, Brazil/ Wikimedia Commons/ Creative Commons License

Brazil’s decision to welcome Venezuelan refugees is based on political calculations — part of President Jair Bolsonaro’s domestic agenda, anti-Maduro policies, and efforts to polish his international image — while asylum-seekers of other nationalities are getting a distinctly colder shoulder. The country’s National Committee for Refugees (CONARE), which includes representatives of the Executive Branch and civil society, granted refugee status to approximately 37,000 Venezuelans between December and January. As permitted by Brazilian law, CONARE granted them prima facie refugee status — by virtue of the serious and widespread human rights violations in their home country — without requiring individual interviews. It was an unprecedented number, with strong support from the government, and responded to appeals from civil society and academic experts.

  • While the number of Venezuelans in other South American countries is greater, Brazil now has the most officially designated refugees. It previously had only a little more than an estimated 5,000 refugees of all nationalities — one-eighth its current total.
  • A generous refugee policy has been a key element of Brazilian foreign policy since the 1990s, often the subject of officials’ speeches in UN contexts. The current Administration’s rhetoric, however, has been different. While visiting India in 2019, Bolsonaro criticized a Brazilian law passed in 2017 (when, he claimed, he was the only deputy to cast a dissenting vote) that liberalized the country’s policies toward migrants — constituting a law in which foreigners would not be seen as threats to Brazilian society and also impacted the reality of refugees.

The recent decision to accept tens of thousands of Venezuelans appears motivated by the Bolsonaro Administration’s opposition to Venezuelan President Maduro — as well as Brazil’s left-leaning parties — more than by the humanitarian ideal of helping people fleeing crisis.

  • The Ministry of Justice has argued that non-Venezuelan arrivals are a security threat and need greater control. It introduced a legal regulation that increased control and facilitated the expulsion and deportation of foreigners, with some provisions that specialists claimed to be contrary to Brazilian laws. The regulation was revoked but made clear that the agency will continue to emphasize the security dynamic created by the entry of foreigners.
  • Minister of Justice Sergio Moro recently sent a message on social media stating that “Brazil will no longer be a refuge for foreigners accused or convicted of common crimes” [emphasis added]. With prior approval of CONARE, he rejected an appeal by three Paraguayans, who received refuge in Brazil in 2003 but were recently facing removal, and maintained the revocation of their refugee status.
  • Critics cite Moro’s use of social media to announce a technical decision as confirmation that his intention was primarily political. They note the ideological affinity between the current Brazilian and Paraguayan governments as being more important than the asylees’ previously determined well-founded fear of persecution — a violation of international law regarding non-refoulement. Critics also point out that the three Paraguayans were politically active with left-leaning groups opposed to Bolsonaro.

The contrast between the government’s and Moro’s attitudes toward asylum-seekers from Venezuela and elsewhere is striking. When confronted with evidence of rising crime by Venezuelan arrivals along the Brazilian border, the Minister said local authorities’ evidence was inconclusive. Bolsonaro’s supporters in the border state of Roraima protested Moro’s statement, but a subsequent decision to close the border for 15 days to foreigners without a permanent residence permit — allegedly in response to the threat of coronavirus — has calmed their concerns.

The CONARE decision on Venezuelans may have been intended in part to remove a glut that had slowed the entire refugee system, but the disparity in the treatment of asylum-seekers primarily reflects Brazil’s deep political polarization. Government discourse portrays its domestic opponents as being irresponsible leftists akin to Venezuelan President Maduro, who is so bad that starving refugees show up on Brazil’s doorstep, while praising rightist governments, to which even 17-year asylees can be repatriated without concern for their treatment. The Brazilian military’s deep involvement in operations regarding Venezuela also incentivizes civilians to help keep the status of refugees from becoming a political embarrassment.

  • Politicization of refugee policies and implementation is not unprecedented in Brazil. CONARE, the Brazilian government, and, indirectly, the UNHCR will determine how long this trend will continue. Altering Brazilian action to meet current political interests weakens the rights of refugees and related protective principles embodied in the Constitution and legislation.

March 23, 2020

* João Jarochinski Silva is a CLALS fellow and professor at the Universidade Federal de Roraima (UFRR).

Brazil: Relative Success – So Far – Receiving Venezuelan Refugees, Migrants

By João Jarochinski Silva*

Venezuelan migrants walk past UNHCR tents at a camp in Boa Vista, Roraima

Venezuelan migrants walk past UNHCR tents at a camp in Boa Vista, Roraima/ Marcelo Camargo/ Wikimedia Commons/ Creative Commons License

The influx of Venezuelan refugees and migrants since 2013 into the Brazilian state of Roraima has challenged the state’s ability to settle them, but a continued or increased flow will require a significant expansion of efforts to relocate and integrate the new arrivals. The flow has not been unmanageable or caused significant problems in public services, as some local politicians claim, and has actually generated some benefits. In the past six years, over 260,000 Venezuelans have applied for refugee or residency status in Brazil, with the vast majority entering through Roraima, which is north of Manaus and shares borders with both Venezuela and Guyana. A voluntary relocation program, called Interiorização, has moved more than 20,000 to other Brazilian cities, but most remain in municipalities near the border. Roraima state itself has less than 600,000 inhabitants.

  • The Venezuelans in Roraima are mostly working age (16-64 years old). National authorities, assisted by UNHCR, the International Organization for Migration (IOM), and others, have developed policies related to education, training, and employment to take advantage of their productive capacity and facilitate their integration in Brazil. These initiatives enhance the emergency benefits the migrants receive and help them become autonomous.

International, national, and local experts, including at the Federal University of Roraima, Getulio Vargas Foundation, and OBMigra, have found that the Venezuelan arrivals’ impact on Roraima has been mixed.

  • The state registered positive economic growth and diversification during 2016‑17, the period of most intense Venezuelan flow, when Roraima’s GDP grew 2.3 percent, compared to the 1.4 percent of other Brazilian states. In the two following years, the state registered significant growth in agricultural production, including Brazil nuts and some livestock items, and showed the largest recorded increase in planted area (28.9 percent), while Brazil as a whole saw a decline of 0.6 percent. Roraima surpassed all other regions with an 8 percent increase in its economic diversification index. Expanded retail trade and exports in 2018‑19 fueled a 25 percent increase in tax revenues.
  • Unemployment and poverty, on the other hand, also rose during this period. While many of the Venezuelans found jobs in services such as restaurants, retail, and construction, unemployment in the state rose by 6.1 percentage points between 2017 and 2019, while Brazil’s national rate fell 0.6 percentage points. The incidence of extreme poverty in Roraima also grew from 1.64 percent in 2015 to 5.7 percent in 2018, compared to 4.2 percent nationally in 2018. (The new Venezuelan workers, however, have not significantly reduced the wages of Brazilians living in Roraima.)

Local anxieties about new strains on social services have not been fully borne out. The Venezuelans have enrolled children in schools and used medical services, but available data do not show unusually high demand. There has been, in fact, a downward trend in outpatient care provided by Roraima municipalities, and the increase in hospitalizations in the state coincided with that seen nationally.

  • The research suggests that the state’s increase in tax revenues is on a par with the additional costs of these and other services provided to the Venezuelans. Both figures are about US$22.5 million.

Roraima’s experience – so far – shows that the influx of refugees and migrants into Brazil has not had a profound impact, but the crisis in Venezuela shows no sign of abating and could get worse. Roraima, the state with the smallest population in Brazil, has a limited ability to absorb new arrivals and settle them locally without significant new resources. Expansion of the successful elements of Roraima’s approach, such as the voluntary Interiorização relocation program, would help. Additional work-related training and professional qualification programs would also help new arrivals contribute economically after relocation. Particularly if flows continue to be strong or increase, Roraima state and its municipalities are likely to feel growing urgency to develop systems to manage them and beef up social protection networks to support relocation – with the same goal of taking advantage of the economic potential of the Venezuelans’ full social and economic integration.

February 3, 2020

* João Jarochinski Silva is a CLALS fellow, professor at the Universidade Federal de Roraima (UFRR), and one of the report’s researchers. The research, funded by the Escola Superior do Ministério Público da União (ESMPU) and the UNHCR, is available here in Portuguese.

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.

Brazil: Will Lula Shake Things Up?

By Fábio Kerche*

lula

Former Brazilian President Lula Da Silva/ Flickr/ Creative Commons/ https://bit.ly/2TxyFJ7

Former Brazilian President Lula da Silva — out of prison but not acquitted of his alleged crimes — is stirring up the country’s political debate, but he faces tough challenges reestablishing his leadership and revitalizing his party, the Workers’ Party (PT).

  • After serving 580 days of a 12-year sentence, Lula was released from prison earlier this month when the Supreme Court ruled that, under the Brazilian Constitution, one can be imprisoned only after judicial appeals have been completed. The court did not explicitly say that prosecutors rushed Lula to prison in order to remove him from the presidential race that led to President Bolsonaro’s election in October 2018, but a number of Brazilian legal experts believe that to be the case. The good news for Lula is that the majority of the Brazilians support his release — 54 percent, according to Datafolha, Brazil’s most important survey center.
  • Even though he is out of prison, Lula will not be able to run for office again unless his previous convictions in lower courts are annulled or overturned by higher courts — which could take a long time. (The electoral law specifies that someone convicted at two different levels of the judiciary cannot run for office.) The former president is apparently hoping that leaks published last June by The Intercept revealing allegedly inappropriate contacts between prosecutors and the judge on Lula’s case, Sérgio Moro, are reason to overturn his convictions. Prospects of such a reversal appear poor, however, because Moro, currently Bolsonaro’s Justice Minister, has a clear incentive to put Lula back behind bars, and observers say he retains considerable influence in the Judiciary.

In the short and medium term, Lula’s strategy appears to be to erode the Bolsonaro Administration’s support and lay the groundwork for his own party’s next campaign, in next year’s municipal elections. His freedom allows him to travel around the country, make political talks, and build alliances.

  • His most ardent supporters remain loyal; he still has strong backing at a popular level; and still projects formidable charisma, according to many observers. While some of his speeches since his release have been more aggressive, his current political drive signals that he will seek to broaden alliances beyond the left.
  • But Lula faces huge political challenges. There are signs that his influence has diminished in recent years thanks to his legal baggage and economic mistakes made by the administration of his successor, former President Dilma Rousseff. Some is also due to unrelenting attacks on him and the PT by the media —portraying him as a radical. Splits in the left, including the lack of an identifiable candidate to replace Lula in the 2022 elections, are also a vulnerability.

Brazil has changed since Lula was arrested: Temer was president; the PT led in the polls; the economic elite’s candidate was from the Social Democracy Party (PSDB), and Bolsonaro was not widely considered a viable candidate. Lula’s challenges as he tries to rebuild his image and his party are huge. An immediate one is an effort by some members of Congress to modify the law that protects defendants from prison until all appeals have been heard, except if the defendant poses a threat to society or investigations. The goal is put Lula in prison again, to reduce his influence in the political game. For a number of jurists, however, this modification would be considered unconstitutional.

  • Next year’s local elections will be the first big test of Lula’s ability to negotiate widely and reorganize opposition to Bolsonaro, win control over the government in major cities, and prepare a PT alternative in the 2022 presidential election.
  • Bolsonaro is not without problems. His popularity is suffering due to the economy — high unemployment, low quality of jobs offered, and very low growth — and some unpopular policies, such as tougher rules for retirement. The president and his sons retain a major edge in social media, but Datafolha this week reported that 36 percent of respondents classified Bolsonaro’s government as “terrible.”

Lula’s best hope seems to convince the Brazilians that the corruption charges were political constructions by his adversaries — a tough task — and that PT and its allies can restore the pace of economic growth obtained during his administrations. Next year’s local elections are key for this project.

December 12, 2019

* Fábio Kerche is a professor at UNIRIO and IESP-UERJ in Rio de Janeiro. He was a CLALS Research Fellow in 2016-2017.

 

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.

 

Latin America: Drug Traffickers Vary Routes as Circumstances Warrant

By Carolina Sampó

U.S officers confiscating narcotics in the Eastern Pacific

Crews from the U.S. Coast Guard Cutter Waesche offload nearly 660 kilograms of narcotics, Feb. 2, 2015 / Coast Guard Compass / Creative Commons / https://coastguard.dodlive.mil/files/2015/07/1785654.jpg

Drug traffickers, who have proven agile at avoiding detection and interdiction in the past, are increasingly creative in moving their product to market through circuitous routes – even moving cocaine through Africa on its way to the United States. Since cocaine is produced only in Colombia, Peru, and Bolivia but consumed in many other countries, the criminal organizations run robust, expansive distribution networks. Routes are not chosen by chance; the traffickers are rational actors who evaluate the risks and advantages depending on circumstances, just as they did by shifting the flow to Central America and Mexico in the early 2000s when counternarcotics operations made the Caribbean less hospitable. My review of the criminal organizations’ shifts indicates they see several basic factors as key to determining a low-risk route:

  • The weakness of the state used as a transit route is key. A state without control of its borders and without effective presence in significant parts of its territory is particularly vulnerable to domination by criminal organizations. Corruption and impunity in government and society in general are also major factors. The availability of logistics networks controlled by local criminal organizations guarantees the secure movement of drugs. To make the business sustainable in the long term, traffickers want groups to have cooperative relations, not competitive tensions, and solid control over operating areas. While some instability has proven helpful to traffickers’ expansion, too much undermines their confidence. Evidence suggests, for example, that the deepening crisis in Venezuela has persuaded some traffickers to choose Brazilian routes. 
  • The countries of the “Northern Triangle” of Central America – Guatemala, Honduras, and El Salvador – are vivid examples of how state weaknesses, corruption, and impunity open the door to Mexican and Colombian criminal organizations’ activities. Traffickers hire smaller criminal organizations – such as maras –to provide them the local support they need. In Venezuela, corruption has long been a factor, but the government’s inability to exercise sovereignty in border areas is increasingly a problem. The Colombian government does not exercise control over large parts of its national territory, and the breakdown of its peace agreement with the FARC suggests the situation will worsen. 

Some trafficking routes seem counterintuitive. Some of the cocaine reaching North America, for example, does not reach that market through Central America. My research indicates that it leaves South America through Brazil or Venezuela and goes to Western Africa, from which it is redirected to a final destination, sometimes entering the United States through Canada. 

  • The UN Office on Drugs and Crime (UNODC) reported last year that only 39 percent of the cocaine reaching the United States in 2016 came through Mexico, compared to 70 percent in 2013. Even though it may seem absurd, especially considering the distances involved in shipping through Africa, criminal organizations reduce risks if they do not take the Central American route. They are apparently using this new route also to create a wider market – some of the drug may go to Russia, for example, or to Asia and even Oceania – as well as to satisfy demand on the African continent. 

Governments seeking to stop the drug trade have not shown as much agility as have the traffickers, who have proven over the years that they can adapt to eradication, surveillance, and interdiction – which remain central elements of governments’ strategies. Colombia’s production surge, despite multi-billion-dollar programs over the past 20 years, shows that much work remains on strengthening the state and reducing corruption and impunity there as well as in transit nations. Addressing drug use as a public health challenge holds promise but requires political commitment that most big consumer countries have so far lacked. Efforts to follow the money trail and freeze suspects’ accounts help but haven’t dealt a mortal blow. No single tactic will work, and no strategy will work as long as governments’ partners show the vulnerabilities that traffickers are so adept at exploiting.

September 27, 2019

*  Carolina Sampó is Coordinator of the Center for Studies on Transnational Organized Crime (CeCOT), International Relations Institute, La Plata National University, and a researcher at the National Scientific and Technical Research Council (Conicet) and Professor at the Buenos Aires University.

Brazil: How Long the Nightmare?

By Luiz Carlos Bresser-Pereira 

Current Brazilian President Jair Bolsonaro shaking hands with former President Michel Temer

Jair Bolsonaro (right) meeting with former Brazilian President Michel Temer (left)/ Flickr/ Creative Commons/ https://www.flickr.com/photos/micheltemer/45044560194

The decline of Brazil’s democratic culture since 2013 has thrust the country into nightmarish times from which only its ample civil society, if mobilized, can rescue it. The media daily reveal evidence that many Brazilians now celebrate violence, irrationality, torture, racism, and the demeaning of education, science and culture. We are witnesses to a blend of authoritarianism and radical economic liberalism, explicit subordination to the United States, and abnormality and evil.

  • Many Brazilians long nostalgically for the 20 years behind us, when two parties – one left- and another right-of-center – alternated as incumbents. They were subject to hits and misses, achieved good and bad outcomes. Each side swore that its policies and results were the best, but they were democratic, and they knew the meaning and rules of politics. Until 2013, politics was not a bitter fight between enemies that hated each other, but a compassionate fight between mutually respectful adversaries.

The two adversaries were the Social Democracy Party (PSDB) and the Workers’ Party (PT) – one standing for liberal orthodoxy, the other for distributive orthodoxy. The former put its chips on the markets, the latter on industrial policy. The PT achieved greater growth because it increased public investment and benefitted from the commodities boom of the 2000s, but the two administrations fell into the macroeconomic trap of high interest rates and an appreciated exchange rate that prevented private-sector investment.

  • On the fiscal level, after the financial crisis of 1998, the two administrations posted satisfactory primary surpluses up until 2013. Crisis in 2014 changed all that. Commodities prices plunged; a fiscal crisis ended surpluses and caused a large primary deficit; manufacturing firms were unable to turn a profit because of an overvalued real that flooded the domestic market with imports and caused excessive corporate indebtedness.

The political crisis might have been resolved or partly addressed if the opposition had won in 2014. The reelection of President Dilma Rousseff deepened it instead as her new term began with no support whatsoever from the economic elites.

  • During his brief period as Minister of Finance, Nelson Barbosa attempted to counter the fiscal crisis with a sharp current-spending cut, while increasing investment. Instead, the country returned to an absurd procyclical policy that persists to this day and keeps unemployment at unacceptable levels.
  • These mistakes were the fruit of the deep political crisis that since 2013 put hatred at the heart of political life. Although classic liberalism is defined by tolerance and some level of relativism concerning truth in politics, a form of intolerant liberalism emerged among the liberals, and Luiz Inácio “Lula” da Silva (president in 2003-2010) and the PT were turned into enemies, even if they were simply adversaries. The leaders of the Lava Jato (Car Wash) investigations took advantage of this hatred for self-promotion. Michel Temer, vice president under Lula’s successor, Dilma Rousseff, took advantage of it to take over, using his “A Bridge to the Future” plan as an instrument. President Jair Bolsonaro, who took office on January 1 this year, harnessed the hatred to win last year’s elections, while relying on economist and investment banker Paulo Guedes as an assurance of a neoliberal economic policy.

For nine months, governmentlessness has resulted, with little or no prospect of a return to right-of-center liberalism or left-of-center developmentalism. Brazil does not appear headed back to the path of normalcy and a healthy alternation of moderate and democratic parties. Brazilians do not know where they are headed, but one thing for sure is that the rule of law and democracy are facing very severe risks. Only a far-right minority truly identifies with the incumbent administration’s policies. But Brazil’s civil society is already well organized, with a working class, a middle class, and a varied and qualitative business class. These are the assets that could help the country overcome the nightmare into which it has plunged. 

September 24, 2019

* Luiz Carlos Bresser-Pereira is emeritus professor of the Getulio Vargas Foundation, has served as government minister in several Brazilian administrations, and is author of numerous books and articles catalogued at www.bresserpereira.org.br.

 

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

By Thomas Andrew O’Keefe*

29/06/2019 Coletiva de Imprensa UE-Mercosul

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

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

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

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

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

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

August 6, 2019

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

Brazil: Corruption of Anti-Corruption

By Fábio Kerche*

Moro, Bolsonaro, and Paraná governor Ratinho Júnior seated during a visit to the Integrated Center of Intelligence and Public Security of the Southern Region in May 2019.

Moro, Bolsonaro, and Paraná governor Ratinho Júnior during a visit to the Integrated Center of Intelligence and Public Security of the Southern Region in May 2019/ Marcus Correa/ Wikimedia Commons

New revelations about the political objectives and operational decisions of Brazil’s Lava Jato anti-corruption investigators have dealt a blow to their credibility and to the legitimacy of President Jair Bolsonaro’s election. The “Car Wash” Operation began in 2014, with prosecutors and Judge Sérgio Moro leading what was seen as a crusade against corruption and in the process becoming heroes for significant portions of society. It started with an investigation into Petrobras, the biggest state-owned company, and spread across several sectors of the economy. Although the activities of several political parties came under scrutiny, the left-wing Workers’ Party (Partido dos Trabalhadores – PT) suffered the most. President Dilma Rousseff was impeached and removed from office, and President Lula da Silva was arrested – opening the path for Bolsonaro, a far-right politician with an undistinguished political biography, to win the 2018 election.

  • Bolsonaro appointed Lava Jato judge Moro as his Minister of Justice – a move cited by some observers as evidence of the new President’s commitment to fight corruption. Others, however, were concerned that Moro’s acceptance of the job confirmed long-held suspicions, based on his own statements against Lula, that the lawsuit against the former president was a political farce to get him out of the race. Critics said the new job was Moro’s reward for putting Lula, who was leading in all polls during the campaign, behind bars. Some political analysts and journalists even speculated that Moro would run for President in 2022.

The Intercept, a news website co-founded by Pulitzer-winning U.S. journalist Glenn Greenwald, has published internal messages between Moro and Lava Jato prosecutors that confirm they had a political agenda. The communications confirm several violations of the law and ethics.

  • According to Brazilian law, prosecutors and judges cannot exchange information about cases outside of court, particularly in a secret way. Judges, according to the legislation, should listen to the prosecution and the defendant’s attorney in an equitable way. A judge exchanging messages by Telegram with a prosecutor about a lawsuit is illegal.
  • Moro took a firm hand in directing the prosecution team – another violation of LOMAN (Organic Law of the Judiciary). The Intercept has so far released only 1 percent of the conversations, but the information already shows that Moro criticized members of the team, gave others tips on how to proceed, asked for new police operations, recommended press strategies, steered investigators away from looking at possible wrongdoing by former President Cardoso, and undertook other initiatives. Lula’s defense did not have the same “opportunity”: the judicial balance weighed heavily on the prosecution side.

Moro has not been dismissed in the wake of these revelations, and the charges against Lula have not been cancelled – as would have happened in a less turbulent political environment. But there are clear signs that Moro has been losing support in Brazilian society. Even the news media who transformed him into a hero now criticize how he handled Lula’s case, and persons who supported Lula’s arrest now affirm that the former president should be released. The Brazilian Bar Association and some Judges Associations are openly criticizing Moro. Talk of Moro getting a seat in the Supreme Court or running for president in 2022 has evaporated.

Moro and his cohorts’ crusade against the alleged corruption of PT leaders whose politics or style they didn’t like amounts to use of the Judicial System to interfere in politics – if not criminalize what, in many ways, are normal political activities. The apparently illegal alliance between Moro and prosecutors seems to leave little doubt that Lula was convicted in an unfair trial based more on biased opinions rather than objective evidence. His supporters’ claim that he is a political prisoner increasingly makes sense. The Brazilian judicial system is supposed to give every citizen a fair and balanced trial. Although annulling Bolsonaro’s election seems impossible, the fact has been established that Moro was able to interfere in the electoral process by removing the leading candidate from the presidential race. The judicial fraud that marred the 2018 election has dealt yet another blow to Brazilian democracy.

June 28, 2019

* Fábio Kerche is a Researcher at Casa de Rui Barbosa Foundation and Professor at UNIRIO and IESP/UERJ in Rio de Janeiro. He was a CLALS Research Fellow in 2016-2017.