U.S.-Cuba: How to Stop the Backslide in Relations

By William M. LeoGrande*

Raúl Castro sits at a table with two men.

Cuban President Raúl Castro. / Wikimedia / Creative Commons

Relations between the United States and Cuba are on a downward spiral due to the mysterious injuries suffered by staff at the U.S. embassy in Havana last year, and there is no clear escape path from the vicious circle of recriminations that have damaged the interests of both countries.  Washington’s initial response to the reported injuries a little over a year ago was to work quietly behind the scenes with Cuban authorities, even arranging visits by the FBI to Cuba.  However, once the story went public, calling the injuries “sonic attacks,” the Trump Administration bowed to pressure from Cuban-American legislators – Florida Republican Senator Marco Rubio foremost among them – to impose sanctions on Havana.  Secretary of State Rex Tillerson in late September issued an “ordered departure,” pulling most U.S. diplomats and family out of Havana and closing the consular section.  Days later, he expelled an equal number of Cubans, including their embassy’s consular staff and entire commercial section.  Soon after, Washington issued a travel warning that “we believe U.S. citizens may also be at risk and warn them not to travel to Cuba.”

  • The most recent blow to relations came on March 2, when the State Department announced that the staffing cutbacks would be permanent. Although it has been six months since the last recorded injury, Tillerson refuses to return U.S. diplomats to Havana until the mystery is solved or Cuba provides “credible assurances” that whatever happened will not happen again, but he has not said what assurances would count as credible.  Going forward, the U.S. diplomatic presence in Cuba will be weaker than at any time since former President Jimmy Carter opened the U.S. Interests Section in 1977.  With these actions, Cuban officials have begun to see the whole acoustic episode as an excuse manufactured by the Trump Administration to reverse President Obama’s normalization policy.

The absence of diplomatic boots on the ground means fewer cultural, educational, and business exchanges; slower progress on issues of mutual interest; less help for U.S. visitors who need consular services; and new hardships for Cubans seeking to emigrate to the United States, who now have to travel abroad to get a visa.  The travel warning has already reduced the number of U.S. visitors, hurting the owners of private rental homes (casas particulares) and restaurants (paladares).  U.S. study abroad programs have been hit hardest because many universities prohibit sending students to a country under a warning.  Neither government has suspended technical talks on issues of mutual interest like counter-narcotics and safe and orderly migration, but the State Department’s refusal to meet in Havana is certain to test Cubans’ patience.

As the last incident recedes in time, the chances of solving the mystery recede with it, which does not bode well for U.S.-Cuban relations.  Next month, Raúl Castro, the principal patron of normalization on the Cuban side, will retire from the presidency, raising the question whether his successor will persist in trying to improve relations when there appears to be so little interest in Washington.  Both U.S. and Cuban diplomats seem sincere about finding a way out of this impasse, get their embassies back up to full strength, and resume the dialogues that were underway, but this is a “permanent” reduction in staff without laying out the conditions – such as a particular period of time without new incidents or enhanced security measures – for restoring personnel.  The longer the two embassies operate with skeletal staff, the more damage will be done to the broad range of issues of mutual interest the two countries share.  Without an operating consulate, moreover, the United States will likely fail to meet its commitment – rooted in a 1994 agreement maintained by Presidents from both parties – to issue 20,000 immigrant visas to Cubans each year.  The United States and Cuba made surprisingly fast diplomatic progress in the last two years of the Obama Administration, signing two dozen bilateral agreements and dramatically expanding trade and travel.  Ending the Cold War in the Caribbean was overwhelmingly popular among ordinary citizens in both countries.  The current freeze in relations puts those gains at risk, giving both governments good reason to re-double their efforts to find a way out.

March 13, 2018

* William M. LeoGrande is Professor of Government at American University.  This article is an adaptation of his analysis that appeared in Americas Quarterly on March 6.

Haiti: Increasingly Alone

By Fulton Armstrong

A bird's eye view of a residential neighborhood in Haiti

A residential neighborhood in Port-au-Prince, Haiti. / UNICEF Canada / Flickr / Creative Commons

Haiti’s international backers are increasingly leaving the impoverished Caribbean country to its own devices, but Port-au-Prince remains woefully ill-prepared to face its many challenges alone.  Competing priorities and distractions seem to be the main causes of the international retrenchment.  Perceptions that international aid, particularly the billions of dollars in assistance since the 2010 earthquake, has been squandered – as well as general “donor fatigue” worldwide – appear to be secondary factors.

  • The United Nations, two months after the inauguration of Haitian President Jovenel Moïse in February 2017, determined that Haitian institutions were sufficiently strong for the UN to withdraw last October the remaining 2,300 peacekeepers in the Stabilization Mission in Haiti (MINUSTAH) that had been deployed since the 2004 military coup. In its place, the UN is establishing this April a small “Mission for Justice Support” (MINUJUSTH), meant to strengthen the justice system, policing, and human rights protections – leaving all security responsibilities to Haiti’s 15,000-man police force.
  • International support for UN efforts to stem the cholera epidemic caused by UN peacekeepers after the devastating earthquake in 2010 has been lacking. About 10,000 Haitians (of an estimated 817,000 infected) have died, including 159 (of 14,000 new cases) reported in 2017.  The UN Office for the Coordination of Humanitarian Affairs (OCHA) reported last month that only $4.8 million out of the $34.5 million requested for cholera response has been funded.
  • The United States, Haiti’s biggest benefactor (having disbursed at least $3.9 billion in post-2010 earthquake aid), is pulling back in disruptive ways. The administration of President Donald Trump, who while campaigning in 2016 pledged to be Haiti’s “biggest champion,” in November announced suspension of Temporary Protected Status (TPS) for 59,000 Haitians living legally in the United States since the earthquake – giving them until March 19 to leave the country or face deportation.  Trump’s reported reference to Haiti and Africa as “shitholes” during a meeting with U.S. Congressmen last month also infuriated Haitians.
  • Food aid continues to flow, but donors have come through with less than half of the $56 million the UN urgently called for in the wake of Hurricane Matthew last October. The World Food Program reports that 50 percent of Haiti’s 10.7 million people are undernourished – including 1.3 million in “Phase 3 crisis” and 3 million in “Phase 2 stress.”
  • Even international partners have disappointed Haiti as well. Reports that Oxfam personnel held sex parties and paid for sex have prompted admissions that some staff’s behavior was “totally unacceptable.”  The group’s Haiti country director has conceded that he made “mistakes” by having a sexual relationship with a woman and was aware of the parties and prostitutes.  Other reports indicate that Medicins Sans Frontieres (MSF) repatriated 17 employees for “misconduct” that the organization is not willing to discuss.

President Moïse, who two weeks ago completed his first year in office, has had few options for dealing with these challenges.  His appeals for international support are falling on deaf or distracted ears.  It is by now well established that the international community’s “pledges of aid” invariably fall short of stated commitments, but defending his poor but proud nation from being called obscenities by the U.S. President is a task that his hapless predecessors did not have to deal with.  To prepare for the withdrawal of MINUSTAH, he has reconstituted a Haitian National Army – a force of 3,000-5,000 whom he promises will “help the people … not be an army of repression” – but the move has reopened fresh wounds from years of military abuses.  He has condemned the “sexual predator” international staff who exploit “needy people in their moment of greatest vulnerability,” but he needs to maintain good relations with NGOs in general, since they have often become the sole suppliers of public goods that ideally would be provided by the state.  Haitians’ frustration was palpable last week when a fire destroyed much of Port-au-Prince’s famous Marché en Fer (Iron Market), a historic symbol of popular commerce rebuilt after the earthquake which has become a profitable tourist destination – another sign that fate is simply not on their side.

February 20, 2018

The Caribbean After the Hurricanes: What Path for Recovery?

By Daniel P. Erikson*

A group of man clear debris

Residents and volunteers begin clearing debris from Hurricane Irma on St. Maarten. / NLRC / Flickr / Creative Commons

This fall’s historically fierce hurricane season reminds us once again that the Caribbean remains extraordinarily vulnerable to natural disasters – especially in the lucrative tourist sectors – and needs to move beyond tourism.  The services sector in the Caribbean may serve as an important source of economic growth, but only if the region begins to take advantage of opportunities in banking and financial services; call centers and information and communication technology; off-shore education and health services; and transportation.

  • While the impact of Harvey, Irma, Jose, Katia, and Maria in U.S. states like Texas and Florida has received wide attention, the small island nations of the Caribbean have also been left to contend with extensive damage to infrastructure and loss of life that has resulted in thousands of newly homeless and dozens of deaths. Irma struck the tiny nation of Antigua and Barbuda as a peak-strength Category 5 storm, and Prime Minister Gaston Browne estimated that 95 percent of the properties on the smaller island of Barbuda were destroyed.  Irma then raked across the U.K. territories of Anguilla, the British Virgin Islands, and the Turks and Caicos, the French territories of St. Bart’s, Guadeloupe and St. Martin (including the Dutch half of St. Maarten).  Cuba also suffered as the storm swept across its northern coast and ravaged the third-largest city, Camaguey.  Then, just as Hurricanes Jose and Katia rattled the islands only to retreat as minor threats, Hurricane Maria strengthened into a Category 4 storm that ravaged Dominica and the U.S. territory of Puerto Rico with winds exceeding 150 mph, devastating local infrastructure and knocking out the power grid, possibly for months to come.

Clearly, the focus of the near-term will be relief and recovery efforts, as these small islands seek to cope with the enormous damage.  But rebuilding a stronger and more diversified service sector may offer the best path towards a sustainable and much-deserved recovery for the people of the region.  Several years ago, the Centre for International Governance and Innovation in Waterloo, Canada, asked me to assess what steps the Caribbean islands could take to diversify their economies away from an over-reliance on tourism to create a more sustainable future.  The lessons of that study, Beyond Tourism: The Future of the Service Industry in the Caribbean, remain relevant today.  The bottom line:  Expanding the competitiveness of the Caribbean services sector beyond tourism is a way to draw on regional strengths and broaden the basis for economic growth.

The hurricanes have dealt a tragic and costly blow to the Caribbean, but the reconstruction efforts may also provide an opportunity to build back stronger and more resilient economies.  While the damage is still being assessed, it is already clear that the lives of tens of thousands of people who live on these islands will never be the same and that property damage will extend into the billions.  The recent damage to Puerto Rico from Hurricane Maria will likely jolt those figures substantially higher, while some of the smaller, remote islands hurt by earlier storms may be uninhabitable for weeks to come.  French President Emmanuel Macron and the King of the Netherlands traveled to the region to show solidarity with their afflicted citizens, while the United States deployed teams to assist in disaster relief and deployed over $1 million in aid to the smaller affected islands – and is beginning to launch a major relief effort in Puerto Rico as well.  Once the challenges of treating the injured and assisting with basic human needs are met, much of the early reconstruction effort is likely to focus on rebuilding tourist infrastructure.  This will be necessary, but not sufficient, to create a full recovery.  Caribbean leaders have increasingly recognized that developing globally competitive services industries offers one way to retain high-skilled workers and mitigate the risk of external shocks to the tourist sector. During the Obama administration, Vice President Biden made a major effort to deepen U.S. investments in the Caribbean’s energy sector, and new sources of financing through the Inter-American Development Bank, the Overseas Private Investment Corporation, and private U.S. companies could similarly lead to a major push to modernize services-related infrastructure throughout the islands.  Future storms cannot be prevented, but a more diversified services sector will help the islands to navigate the challenge of reconstruction more effectively.

September 28, 2017

* Daniel P. Erikson is managing director at Blue Star Strategies in Washington, DC, and previously served as a White House and State Department advisor on Latin America during the Obama Administration.

Cuba: Implications of U.S. Tourism

By Emma Fawcett*

Tourists on beach in Cuba

Photo Credit: Emmanuel Huybrechts / Wikimedia / Creative Commons

U.S. regulations still technically ban tourist travel to Cuba by U.S. citizens, but the Obama Administration’s policies have already spurred significant growth in visitor arrivals to the island – with implications for Cuba and its Caribbean neighbors.  Over the last year, Cuba has experienced a 17 percent increase in total visitors, and a 75 percent increase in arrivals from the United States since Washington expanded the categories of permitted travel and, according to observers, relaxed enforcement.  An agreement to begin commercial airline operations between the two countries promises even more travel.  Other elements of the embargo continue to complicate U.S. travel: most U.S.-issued credit cards still do not work on the island; phone and internet connections are limited; and visitors often face persistent shortages of food items, consumer goods, and hotel rooms.  But the surge almost certainly will continue.

The onslaught of U.S. tourists challenges the Cuban tourism industry’s capacity.  Cuba has one the lowest rates of return visits (less than 10 percent) in the Caribbean; on the other islands, 50 percent to 80 percent of tourists make a return visit.  It has serious weaknesses:

  • While Cuba’s unique appeal may draw in millions of first-time visitors, the still relatively poor quality of service apparently discourages tourists from making the island a regular vacation spot. Sustaining arrivals requires higher marketing costs.  Average spending per visitor, moreover, has been on a fairly steady decline since 2008.
  • About 70 percent of Cuba’s tourists come for sun-and-beach tourism – a sector under state control – but private microenterprises have already demonstrated more agility in responding to demand than the state-owned hotels or joint ventures. The government reported last year that 8,000 rooms in casas particulares, or bed-and-breakfasts in Cubans’ homes, were for rent, and the number is growing steadily.
  • Cuba’s “forbidden fruit” factor may have a limited shelf life as visitors sense the imminent end to Castroism and the arrival of McDonalds, Starbucks, and their ilk. Questions remain about how long Cuba’s current environmental protections will continue when tourist arrivals increase.  Nicknamed the “Accidental Eden,” Cuba is the most biodiverse country in the Caribbean because of low population density and limited industrialization.  But rising visitor arrivals (and the effects of climate change) are likely to increase beach erosion and biodiversity loss.

Ministers of tourism in the other Caribbean countries have downplayed fears about competition from Cuba, but their optimism is sure to be tested.  A successful Cuban tourism sector could conceivably spur region-wide increases in visitor arrivals, but it could also cause other Caribbean countries to lose significant market share.  The official Communist Party newspaper, Granma, has suggested the government’s goal is to almost triple tourist arrivals to 10 million per year.  President Danilo Medina of the Dominican Republic, the most visited country in the region (at about 5.5 million tourists a year), has also set a goal of reaching 10 million arrivals by 2022 – setting that country to go in head-to-head competition with Cuba.  Jamaica, the third most visited country in the region, has instead pursued a multi-destination agreement with Cuba, designed to encourage island-hopping and capitalize on Cuba’s continued growth.  Previous attempts at regional marketing and multi-destination initiatives have had mixed success.  But as Cuba’s tourism sector continues to expand, Caribbean leaders – in what is already the most tourism-dependent region in the world – undoubtedly sense that Cuba is back in the game and could very well change rules under which this key industry has operated for the past six decades.

July 25, 2016

*Emma Fawcett is a PhD candidate in International Relations at American University.  Her doctoral thesis focuses on the political economy of tourism and development in four Caribbean case studies: Haiti, Dominican Republic, Cuba, and the Mexican Caribbean.

Latin America (Overall) Embraces Paris Climate Accord

By Fulton Armstrong

cop21 paris accord 2015

Heads of delegations at the 2015 United Nations Climate Change Conference in Paris. Photo Credit: Presidencia de la República Mexicana / Flickr / Creative Commons

Latin American support for the landmark climate agreement signed at the United Nations last week may not have been enthusiastic during the negotiations, but all but Nicaragua seem eager for early ratification and implementation of measures to mitigate the harm of global warming.  A record-breaking 175 countries signed the accord in one day, including a number from Latin America, committing them to take concrete steps to keep the increase in global temperatures from rising 2 degrees Celsius (or, ideally, 1.5 degrees) over preindustrial levels.  To take effect, at least 55 countries producing 55 percent of global emissions must ratify the agreement.  Fifteen small island nations, including several in the Caribbean, already presented their ratification papers last Friday.  China and the United States, the two greatest emitters of greenhouse gasses, have said they’ll ratify this year – as have France and other EU countries.

The region’s leaders have made significant contributions to the accord over the years.  Mexico and Peru, which were hosts of crucial international conclaves leading up to it, have given it a Latin American imprint, and others supported the final round of talks in Paris last December.  Brazilian President Dilma Rousseff’s reference in her speech to her political troubles back home overshadowed Brazil’s leadership, including its commitment to reduce its greenhouse gas emissions by 43 percent of 2005 levels by 2030.  In the past, ALBA countries complained loudly that the wealthy, developed nations, which produce the vast majority of climate-harming gasses, should shoulder the burden of reducing them and should compensate poorer countries for harm that environmental measures cause them.  All but Nicaragua, however, have submitted national plans (called an Intended Nationally Determined Contribution, INDC) required for full participation in international efforts under the Paris Accord.  Nicaraguan Representative Paul Oquist told the media that “voluntary responsibilities is a path to failure” and that wealthy countries should compensate Nicaragua for the $2 billion cost the measures would entail.

Latin America has clear incentives to support the accord.  Various scientific studies underscore the impact of global warming on the region, with potentially dire consequences.  The World Bank and Intergovernmental Panel on Climate Change have reported that failure to act would cause further extreme weather threatening agriculture; rapid melting of Andean glaciers that provide much-needed fresh water; erosion of coastal areas; catastrophic damage to Caribbean coral reefs; and dieback of Amazon forests.  ALBA demands for compensation may be overstated but contain a grain of truth – they aren’t prodigious producers of greenhouse gasses – and skepticism that the big guys will meet their targets isn’t entirely unwarranted.  President Obama has repeatedly demonstrated his personal commitment to addressing the problem, but obstacles posed by the U.S. Senate (which must ratify the agreement), Supreme Court (which in February stalled implementation of his Clean Power Plan), and politicians seeking the Republican Presidential nomination (who have sworn opposition to deals like the Paris Accord) have all but shut down U.S. movement toward ratification.  The ALBA outliers, on the other hand, have made their complaints heard and appear likely to join the rest of Latin America and the Caribbean in pushing for ratification and quick implementation – and probably will soon renew the push for even tougher measures by industrialized nations.

April 25, 2016

How are the Americas Faring in an Era of Lower Oil Prices?

By Thomas Andrew O’Keefe*

Gas Station Guatemala

Photo Credit: Josué Goge / Flickr / Creative Commons

The sharp drop in global oil prices – caused by a combination of a slowing Chinese economy hurting commodities sales and efforts by Saudi Arabia to retain market share – has both downsides and advantages for Latin America and the Caribbean.  By keeping production levels steady, despite decreased demand, so that a barrel of crude remains below US$40, the Saudis’ hope is to put U.S. shale oil producers and Canadian tar sands producers out of business.  The drop in oil prices has had a varied impact elsewhere in the Americas:

  • The effect in Venezuela, already reeling from over a decade of economic mismanagement, has been catastrophic. The ripple effect is being felt in those Caribbean and Central American countries that grew to depend on PetroCaribe’s generous repayment terms for oil imports that allowed savings to be used for other needs.  In 2015, for example, this alternative funding mechanism in Belize was slashed in half from the previous year.  The threat of interest rate hikes on money that must eventually be repaid for oil imports also pushed the Dominican Republic and Jamaica to use funds raised on international capital markets to reduce their debt overhang with Venezuela.  (For those weening themselves off PetroCaribe dependency, however, the lower prices are a silver lining.)
  • Low oil prices have also knocked the wind out of Mexico’s heady plans to overhaul its petroleum sector by encouraging more domestic and foreign private-sector investment.
  • In South America, the decline has undermined Rafael Correa’s popularity in Ecuador because the government has been forced to implement austerity measures. The Colombian state petroleum company, Ecopetrol, will likely have to declare a loss for 2015, the first time since the public trading of its shares began nine years ago.  In Brazil, heavily indebted Petrobras has seen share prices plummet 90 percent since 2008, although that is as much the result of the company being at the center of a massive corruption scandal that has discredited the country’s political class.
  • On the other hand, lower petroleum prices have benefitted net energy importers such as Chile, Costa Rica, Paraguay, and Uruguay.

The one major oil producer in the Americas that has not cut back on production and new investment is Argentina – in part because consumers are subsidizing production and investment by the state petroleum firm YPF, which was renationalized in 2012 and now dominates domestic end sales of petroleum products.  Prices at the pump remain well above real market values.  While successive Argentine governments froze energy prices following the 2001-02 implosion of the Argentine economy, this time policy is keeping some energy prices high.  This encourages conservation and efficiency and spurs greater use of renewable alternatives, but it becomes unsustainable during a prolonged dip because it will, among other things, make the country’s manufacturers uncompetitive.  The Argentine example underscores that predictions of a pendulum shift in Latin America in favor of private-sector investment in the hydrocarbons sector over state oil production are still premature.

The lower prices do not appear likely to harm the region’s continuing substitution of natural gas for coal and oil as a transitional fossil fuel to greener sources of energy.  Natural gas prices remain at their lowest levels in over a decade, and the expansion of liquefied natural gas plants allows for easier transport of natural gas to markets around the world.  They are also unlikely to dent the global shift to greater reliance on renewable energy resources driven by the international consensus that climate change can no longer be ignored and something must be done to address it.  At the UN climate change talks in Paris last December, for example, countries agreed to keep temperature increases “well below” 2 degrees centigrade above pre-industrial levels and made a specific commitment “to pursue efforts” to achieve the much more ambitious target of limiting warming to no more than 1.5 degrees centigrade.  The year 2015 was the second consecutive year in which energy-related carbon emissions remained flat in spite of 3 percent economic growth in both years. 

March 24, 2016

*The author is the President of San Francisco-based Mercosur Consulting Group, Ltd.  He chaired the Western Hemisphere Area Studies program at the U.S. State Department’s Foreign Service Institute between July 2011 and November 2015.

Lobbying Washington: Does it Work?

By Aaron T. Bell*

LatAm Lobbying

Photo credits: Jack Says Relax & AlexR. L., respectively / Flickr and Wikimedia Commons / Creative Commons

Latin American governments, political parties, and business associations have a long history of turning to U.S.-based lobbying, legal, and public relations firms to advance their interests in the United States – with mixed results.  Both national and multinational groups have been utilizing lobbyists since at least the 1940s, when the U.S. government began registering foreign agents.  Their most consistent goal over the decades has been to influence U.S. policy on foreign trade and investment, but they have also aimed to improve governments’ sagging reputation and protect them from adverse policies.  In the 1970s, a number of military regimes and right-wing political groups in Central and South America hired lobbyists to devise and implement strategies to counter criticism of their human rights record – to preserve trade and military assistance.

  • Some 30 Latin American countries and interests groups in 2010-14 registered foreign agents to influence U.S. policies. The Bahamas Ministry of Tourism spent the most, paying $128.9 million to promote tourism – as well as to monitor and speak with Congressional representatives about U.S. legislation related to transnational financial activities in which they are involved, such as the regulation of offshore tax havens and online casinos.
  • In 2013, Mexico ranked fifth worldwide, at $6.1 million. Both federal and local governments pay firms to burnish the image of their respective constituencies.  From 2010-12, for example, Mexico City worked with a firm to “enhance the image of Mexico City in light of recent negative media reports.”  In 2014, the Consejo de Promoción Turístico de México hired another company to “make Mexico an attractive destination.”
  • Ecuador, which at $1.1 million ranked twenty-second in 2013, spent nearly half a million dollars lobbying in support of the ultimately failed Yasuni rain forest oil drilling initiative.
  • More recently, the government of Honduras – burdened with the image as one of the most violent, corrupt, and crime-ridden countries in the world – hired lobbyists to “provide ongoing strategic counsel, media relations (proactive and reactive outreach), and third-party relations.” The firm, winning an initial one-year contract for $420,000, had just completed a nine-year relationship representing Russia.

A review of the U.S. Foreign Agents Registration Act (FARA) records indicates that foreign lobbyists represent almost exclusively governments, state agencies, and the private business sector, and that more popular civil-society actors – such as labor unions and indigenous organizations – are notably absent.  Even though foreign governments obviously judge the investment worthwhile, the impact of foreign-funded lobbyists is difficult to measure.  The Honduran government’s new push to burnish its image has paid off on Capitol Hill, according to observers, but a new initiative to reduce Honduran corruption doesn’t appear to have gone exactly as Tegucigalpa hoped.  Forced to respond to a protest wave calling for the creation of an independent investigative body similar to the Comisión Internacional contra la Impunidad en Guatemala (CICIG), the Honduran government agreed with the OAS to create the Misión de Apoyo Contra la Corrupción y la Impunidad en Honduras (MACCIH) as a collaborative effort.  MACCIH indeed lacks the independence – and the potential bite – that CICIG had, but it is significantly tougher than the Honduran President Juan Orlando Hernández initially proposed.  In this case at least, lobbyists have helped the government gain access and public relations points in Washington but didn’t get it off the hook entirely.

January 22, 2016

* Aaron Bell is an adjunct professor in History and American Studies at American University.

From Lima to Paris … and Beyond

By Evan Berry*

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Photo Credit: Ron Mader / Flickr / Creative Commons

The “COP 21” Climate Conference beginning in Paris this week appears likely to produce meaningful results yet fall short of policymakers and civil society leaders’ high hopes for an international accord.  Strong action on climate change is of particular significance in Latin America – because of its environmental vulnerability and the key role it plays in helping establish a post-carbon global economy.  The coastal communities of the greater Caribbean Basin, the intensely biodiverse forests of the Amazonian region, and the glaciated peaks of the Andes are acutely threatened by climate change.  Concern about climate change is higher in Latin America than in any other region of the world, according to the Pew Research Center.  Several nations from the region have played key roles in putting the international community on a path toward a substantive agreement at COP 21, especially Peru, host of last year’s UN climate talks.

The negotiations in Paris are designed to develop an architecture for international cooperation on carbon mitigation and climate adaption that, while essentially voluntary, will catalyze bolder action in the future.  In anticipation that COP 21 will conclude an agreement signed by all the negotiating parties, the international community finds itself again trying to strike the right balance between critical pressure for stronger action and acceptance of an imperfect, but necessary, policy apparatus.  Although observers expect that more mitigation will be necessary, Paris will provide several powerful tools for states afflicted by climate change.  Most especially, through the vehicle of the Green Climate Fund (GCF), financing for large-scale adaptation projects is now starting to flow.  Because the mandates of the GCF prioritize low-carbon agriculture, climate-compatible cities, resilience in Small Island Developing States (SIDS), and financing for forests, the fund will have a special impact in Latin America, one of the world’s most urbanized and forested regions and home to more than 20 SIDS.  Indeed, the first round of CGF projects, announced this month, includes two in Latin America – an energy efficiency bond in eastern Mexico and an indigenous people’s forest management project in Peru.

While there is room to be optimistic that these talks will make important progress, many probably will be dissatisfied with the outcome.  According to independent evaluations, several Latin American countries have put forward robust plans to limit carbon emissions, including Costa Rica, Mexico, and Brazil.  But many stakeholders, particularly environmental NGOs and leftist governments like Bolivia and Ecuador, are likely to be skeptical about the outcome of the negotiations.  They will be right to point out that the sum total of emissions reductions being discussed at COP 21 is insufficient to keep warming below the consensus 2°C limit, and that the anticipated deal is almost certain not to be legally binding and may also have weak measures for verification.  The “Road to Paris” may not take interested countries as far as they’d like to go, but in Latin America as elsewhere, critics might be well advised temper their skepticism, embrace the incremental progress, and begin preparing for the next round of climate change politics. 

November 30, 2015

* Evan Berry is Associate Professor of Philosophy and Religion and Co-Director of the Ethics, Peace, and Global Affairs master’s program at American University.

Remittances and Sustainable Community Development in Latin America

By Aaron T. Bell and Eric Hershberg

Photo Credit: Futureatlas.com / Flickr / Creative Commons

Photo Credit: Futureatlas.com / Flickr / Creative Commons

Remittances to Latin America hit a record high in 2014 at $65.3 billion, according to the Multilateral Investment Fund of the Inter-American Development Bank, but their impact on development would be much greater with better coordination between sending  and recipient communities.  Mexico receives over one third of those funds, but remittances represent a significant component of GDP for many countries across the region.  The bulk comes from the United States, where 54 million Hispanics include 19 million first-generation immigrants, according to 2013 U.S. census figures.  In several Central American and Caribbean countries, funds sent home by migrants represent the largest single source of foreign exchange.

  • Remittances alleviate poverty by contributing to household income, helping to satisfy basic consumption needs, and sometimes enabling savings and investments in education.
  • Groups of migrants from particular communities sometimes pool resources through hometown associations to support shared objectives back home. A paved road or a new soccer field affects quality of life in tangible ways, and émigré financing of local political campaigns can determine the results of elections for mayors and other officials.
  • But remittances seldom promote local economic development initiatives that will generate sustainable incomes and opportunities for wide segments of the population – missing opportunities to address the causes of migration in the first place.

Some governments, development agencies, and philanthropies look to remittances as a potential mechanism for ensuring that Latin American citizens enjoy living conditions that afford them the “right not to migrate” from home communities.  Last month the Inter-American Foundation (IAF) and the Center for Latin American & Latino Studies (CLALS) convened a workshop to explore the challenges and opportunities for linking diaspora organizations in the United States, their communities of origin in Latin America and the Caribbean, and potential philanthropic partners to advance community development in the region through the effective deployment of remittancesParticipants identified several challenges.

  • Cooperation between immigrant-led diaspora organizations and their sending communities and governments is not a given.
  • Despite some research into hometown associations – created in the United States by migrants to connect with their communities of origin – we have relatively limited knowledge about how they function and the conditions that enable them to support community development.
  • Effective transnational cooperation requires broad multi-sectoral partnerships aligning immigrant-led groups, sending community organizations, and possibly governments and international funding institutions.

Despite information gaps and practical obstacles, there are successes to celebrate, such as the Salvadoran Fundación para la Educación Social, Económico y Cultural, with which the IAF has partnered.  Technical training on how to handle incoming funds and face-to-face meetings between participants and supporters in the United States and El Salvador have promoted transparency and trust.  Participants in the CLALS/IAF workshop offered several potential avenues for community organizations and philanthropic foundations to build enduring institutional connections.  It was agreed that further research should be conducted on hometown associations and other forms of diaspora organization to better understand how they function, how they relate to their affiliated sending communities, and how they can be catalysts to promote local development.  Policy-based research institutions in Latin America should be brought into the conversation, as should mainstream Latino organizations in the United States.  And immigrant associations and their counterparts in Latin America should not have to grapple with complex development challenges alone.  Indeed, U.S.-based community organizations and philanthropies could play a valuable role in catalyzing cooperation aimed at promoting development by making the case for public policies and transnational collaborative efforts that support “the right not to migrate.” Such development-supporting initiatives could, at least in theory, gain resonance across political groupings in the United States, appealing both to those interested in fostering global development and those concerned about immigration.

August 4, 2015

The Impact of Falling Oil Prices on the Western Hemisphere

By Thomas Andrew O’Keefe*

L.C. Nøttaasen / Flickr / CC BY-NC 2.0

L.C. Nøttaasen / Flickr / CC BY-NC 2.0

The sharp drop in the benchmark Brent crude price of oil from just under US$115 per barrel in June 2014 to its current perch around US$50 has important ramifications for the Western Hemisphere.  For Venezuela, which earns some 95 percent of its foreign exchange from petroleum exports, it is a potential disaster.  Underlying political tensions will be exacerbated if there is no money to continue funding social welfare programs or heavily subsidizing gasoline.  It probably also spells the end of PetroCaribe’s generous repayment holidays and what are in essence below-market interest loans for Caribbean and Central American nations.  Sharply lower oil prices also put at risk major energy projects such as the development of Brazil’s pre-salt reserves, which require a minimum price of $50 to $55 to be economically viable.  Equally tenuous are Argentine efforts to regain energy self-sufficiency by exploiting its vast shale oil and gas reserves and Mexican plans to attract foreign investors to participate in deep-water oil exploration and drilling.  The minimum price for a barrel of oil below which new investment projects in Canada’s oil sands are no longer attractive is around $65.  Shale oil producers in the United States are also being squeezed by low petroleum prices.

On the other hand, net energy importers such as Chile, Paraguay and Uruguay benefit from sharply lower oil prices.  Although being weaned off  PetroCaribe will be painful for the Caribbean and Central America in the short term, they will be able to seek oil at the lower prices elsewhere.  The pressure on the Obama administration to lift the ban on U.S. crude oil exports, in response to a glut of domestic shale oil production, could also redound in favor of the Caribbean and Central America by lowering international oil prices further through increased global supply.  Already, 2015 began with U.S. companies authorized to export an ultralight crude called condensate.

In hopes of rallying OPEC to stabilize oil prices, Venezuelan President Maduro last weekend rushed off to lobby Saudi Arabia, which just two months ago refused to decrease production in order to raise prices, but oil industry sources say there’s little chance of a policy change.  Meanwhile, the environment may turn out to be among the biggest beneficiaries of lower oil prices.  Less investment in shale oil production reduces the risk of leaks of methane, a potent greenhouse gas, as well as decreases flaring.  Similarly, slowing down oil sands production in Alberta and Saskatchewan means that the very high levels of greenhouse gas emissions associated with extracting crude oil from bitumen (not to mention the negative impact on water resources) is diminished.  Although lower fossil fuel prices traditionally have undermined incentives to move to greater reliance on renewable and non-traditional energy resources, this may no longer be true.  For one thing many governments around the world are now embarked on ambitious efforts to reduce carbon emissions by, among other things, raising the costs associated with petroleum usage through cap and trade regimes that force companies to buy government-issued pollution permits.  Still others have enacted outright carbon taxes on utilities and large factories per metric ton of carbon dioxide emissions.  In addition, the heavy initial capital investment that was previously associated with things like wind, solar and geothermal power are falling.  For example, a combination of technological advances and Chinese overproduction have resulted in much lower prices for solar panels so that the cost of generation from a large photovoltaic solar plant is now almost 80 percent less than five years ago.  Geothermal energy may be the renewable that most benefits as drilling rigs idled by lower oil prices are now available at a lower cost for geothermal projects.  

*Thomas Andrew O’Keefe is President of San Francisco-based Mercosur Consulting Group, Ltd. and teaches at the Villanova University School of Law.

January 13, 2015