El Salvador: How Much has COVID-19 Hurt President Bukele?

By Héctor Silva Ávalos*

President of El Salvador Nayib Bukele

President of El Salvador Nayib Bukele/ Wikimedia Commons/ Creative Commons License/ Official Photography from the Presidential House of El Salvador

Salvadoran President Nayib Bukele – Latin America’s most popular leader one year into his presidency– has raised concerns about his Administration because of his authoritarian approach to governing and managing the COVID‑19 pandemic. He won kudos for his strong and early effort to stem the spread of the virus, scoring a 95 percent favorable rating in a recent La Prensa Gráfica poll. But the resulting economic downturn – and his obvious frustration at the need to engage in political give-and-take as he tries to respond – are fragmenting his alliances and highlighting his Administration’s weaknesses.

  • The anti-COVID measures that Bukele instituted back in March were among the first and most bold in Central America, winning him strong domestic and international praise. He closed airports and public schools, enforced isolation-in-place, and ramped up government assistance to hospitals and vulnerable citizens. As remittances from abroad to families in El Salvador nose-dived, a sustainable aid program became even more important.

The crisis has brought to light some of the President’s weaknesses as a manager and leader, however, and how he has compensated with increasingly authoritarian measures, such as a move to augment spending without Congressional approval, that have alienated many. In social media, he has cyber-bullied opponents, and critics report an increase in harassment by government authorities over taxes, labor practices, and other regulatory issues. He has pushed away former political allies in the country’s two strongest parties – ARENA and the FMLN – and thereby reduced his mobilizational capacity in both San Salvador and the departments. The President had resorted to such tactics even before COVID‑19 – he directed heavily armed police and soldiers to occupy the National Legislature back in February during a confrontation over budget issues – but the pandemic has sparked an escalation.

  • As the scope of the pandemic has hit home since March, Bukele has taken actions that, although conceivably attracting popular support, have drawn strong pushback. The Supreme Court overruled his attempt two weeks ago to unilaterally extend emergency measures that would allow him to continue unchecked public spending to deal with the pandemic. The Attorney General is also investigating whether actions by the President and senior staff amounted to criminal behavior.
  • Public protests have begun in forms appropriate for the age of social distancing – cacerolazos, car honking, protest music, and other signs of anger. International human rights groups have also begun expressing concern about the implications of the government’s rough enforcement of pandemic measures. Bukele directed police to be harsh against and detain individuals perceived as violating quarantine, even as they ventured out in search of food for their families. Amnesty International and others have criticized “arbitrary detentions and excessive use of force,” and Human Rights Watch has criticized Bukele’s “flagrant disregard of the role of the Supreme Court” and called on the Organization of American States (OAS), which has remained silent, to “push Bukele to respect the rule of law.”

El Salvador is now nearing one hundred COVID cases per day, and the public health system is pushed to the limits. The economy, which has already ground to a halt, almost certainly is sustaining long-term damage that will prove increasingly costly politically for Bukele. While his personal popularity has held so far, his honeymoon with the economic and political sectors upon whom he depends to move forward ended months ago and – short of a drastic overhaul in his approach – he seems likely to continue facing a number of challenges. In his most recent move, he got into a fight with Congress when the legislative body rejected his request to postpone the state of the union address scheduled for June 1. His staff keeps struggling with ARENA and the FMLN in Congress to pass one last amendment that would allow him 15 more days of unchecked spending to deal with COVID‑19.

  • The pandemic has laid bare a number of social, economic, and institutional problems about which Bukele could push a broad national debate aimed at driving reforms. Popular distaste for the business elites as well as ARENA and the FMLN give him space for such a venture. But, at least as evidenced in recent months, his concerns about his personal power seem likely to preclude any such initiative.
  • U.S. support for Bukele has been crucial and shows no sign of abating in the immediate term. But growing human rights concerns beyond the Administration of President Donald Trump, including among Members of the U.S. Congress, if not addressed, will become a liability.

May 29, 2020

* Héctor Silva Ávalos is a senior researcher and editor at InSight Crime and former CLALS fellow.

 

Latin America: Organized Crime Taking Advantage of COVID-19

By Carolina Sampó*

Favela in Rio de Janeiro, Brazil

Favela Villa Canoas, Rio de Janeiro, Brazil/Phillip Ritz/Flickr/Creative Commons License (not modified)

Latin American criminal organizations have faced some new challenges during the coronavirus pandemic – such as disruptions in transportation routes and markets – but they have also exploited opportunities to expand operations in ways that further threaten governments’ control in vulnerable communities.

  • Shelter-in-place controls in the region and the United States have complicated the groups’ most profitable business area: drug trafficking. Moreover, breaks in supply chains, especially those related to chemical precursors from China, have caused shortages of fentanyl, a synthetic opioid preferred by U.S. drug users, and ingredients used to make methamphetamines.
  • Trafficking of cocaine and other plant-based drugs has not stopped within Latin America, although some reduction in their movement to market has driven up prices somewhat. Quarantines have posed new difficulties for transportation, but traffickers usually avoid legal border crossings and pass through areas with no or minimal government presence anyway. Governments have also moved detection and interdiction resources elsewhere. Brazil, as the region’s main consumer, still seems to be receiving regular shipments of cocaine.
  • Shipping drugs outside the region has been more difficult because airports are closed and commercial ship traffic has declined, but criminal organizations have accepted to run the risks of continuing their own maritime activities, which raises the price to consumers. Authorities say that cocaine shipments tend to be large – over one ton – and narco-submarines are being used.

Supply and demand have both declined during the coronavirus outbreak, but prices of meth and synthetic opioids have risen considerably – some even tripling in recent weeks, according to U.S. official sources. Demand from consumers of illicit drugs at parties is down with the implementation of social distancing, but dealers in food delivery services are distributing their merchandise directly to users’ homes. Supply and demand seem to be balanced, but dealers are charging higher prices for their enhanced service and greater risks.

As in the past, criminal organizations are showing high adaptability. International experts report the groups are increasingly getting involved in cybercrime. They have also been caught peddling counterfeit medical items. Interpol has seized substandard masks and sanitizers as well as drugs the gangs claim will help people combat the virus. The pandemic has also enabled criminals to deepen their ties with vulnerable communities, such as by providing essential goods and services.

  • They are consolidating criminal governance in the communities where they play the role of social order providers. In the slums in Rio de Janeiro, for example, the criminal organizations have been the ones to enforce lockdowns to stop the spread of COVID‑19. Where criminal organizations cannot guarantee social order, they use violence or cooptation to establish territorial control. And they continue efforts to expand prison control, using jails to recruit members and build their power base. During the coronavirus outbreak, the gangs have organized riots and jailbreak attempts in Argentina, Brazil, Colombia, Peru, and Venezuela. Power in the prisons projects into power on the streets.

The pandemic has forced governments to prioritize resources on the health and economic crises it is causing, and efforts to control criminal organizations have by necessity been more lax. The gangs are also scrambling to return to “normalcy,” but they are again demonstrating greater adaptability than are the governments.

  • Governments have no easy solution. While organized crime is diversifying its portfolio of activities, reinforcing its territorial control, building its prison base, and recruiting new members – exploiting the economic and social situation – governments have little choice but to beef up efforts any way they can domestically while paying special attention to cooperation with neighboring countries facing similar challenges, in hopes of hemming in the criminal organizations. It is a huge challenge – against difficult odds – but perhaps the pandemic also gives governments a one-time opportunity to hit the gangs at a time that they face challenges too.

May 22, 2020

* 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.

Central America and the Pandemic: Different Priorities and Risky Bets

By Alexander Segovia*

Presidents of Central America participate on a SICA virtual meeting

Reunión Extraordinaria de Presidentes del Sistema de la Integración Centroamericana (SICA)/Flickr/Creative Commons

In most Central American countries, the social dimension of the COVID‑19 emergency has competed with economic priorities, and in some it hasn’t even been a top priority. Governments have responded independently of one another, showing little regional coordination aside from a $1.9 billion Regional Contingency Plan approved by the Sistema de la Integración Centroamericana (SICA) and funded by the Central American Bank for Economic Integration (BCIE), to support national-level efforts.

El Salvador has designed a response strategy that prioritizes the health dimension of the crisis, not the need for economic recovery. The rigorous implementation of stay-at-home and social isolation measures has caused a number of problems, including essentially shutting down the economy, with enormous political costs. The Legislative Assembly authorized the government to issue coupons worth $3 billion to help families get by, causing a significant increase in the country’s external debt and fiscal deficit.

  • The Salvadoran response has been well-received by the population so far, but this could change quickly in the face of the high economic and social pain it has caused. Moreover, the authoritarian and militarist way the confinement regulations have been enforced, and the government’s lack of respect for the Constitution and the separation of powers, have also troubled many.

Nicaragua is the opposite case of El Salvador. The government has refused to adopt social isolation measures and has encouraged people to take to the streets and participate in large events. The Ortega Administration’s concern is about the economy, which has been in a deep crisis since the social protests in 2018 and the government’s repressive reaction to them. This priority partly explains the government’s resistance to implementing shelter-in-place and social-distancing regulations.

  • The government is playing with fire. If the health crisis spins out of control, it will cause both a great loss of human lives and a profound socio-economic crisis – which sooner rather than later will spark a social and political crisis of massive proportions.

Costa Rica, with its good universal health care system and the region’s most developed state infrastructure, is best prepared. Its initial response to the health emergency was slow and permissive, reflecting a government decision to confront the crisis in a manner that causes the least damage possible to the economy. It has since acted more decisively and has suffered only 10 deaths from COVID‑19.

  • Costa Rica is the only country in the region trying to finance the additional costs by reducing non-priority public expenditures and by introducing a temporary solidarity tax on capital gains and on the salaries of higher-paid managers in government and the private sector, who have economic security and safe jobs.

Guatemala is implementing a response in which the health emergency is competing with leaders’ desire for economic recovery. This reflects the enormous influence over the government and Congress enjoyed by the economic elites, who hold sway over public policies and have a veto over any that affect their interests.

  • By putting the social and economic challenges on an equal plane, the elites have demonstrated, in what they see as a politically correct way, their ability to equate human life with the accumulation of capital.

Honduras has implemented a strategy that gives insufficient attention to the health crisis by assigning higher priority to containing the economic impact. Its response has been fragmented and confusing; it combines emergency measures with economic recovery actions that will take effect only in the second half of the year. In addition, policymaking processes have been opaque, and there are no guarantees that public funds will be used transparently.

  • Concerns that the crisis has also given rise to greater militarization of the country and an increase in human rights violations by security forces are also mounting.

The best way for Central America to confront the COVID emergency is through energetic responses focused on containing the health crisis – with effective stay-at-home and social-distancing measures – and strengthening of social protection systems and programs, including direct financial payments to households. These policies should be backed up with broad political and social agreements and sustained with absolute respect for democracy and human rights.

  • Preliminary evidence indicates that, while addressing the health crisis has high costs in the short term, delaying that investment increases the number of deaths and leads to a deeper and longer economic crisis. Central American governments and economic elites have a clear choice: pay a smaller price now combatting the virus, or pursue short-term benefits and pay a much higher price in the long run.

May 20, 2020

* Alexander Segovia is a Salvadoran economist. This blog article is based on and updated from an analysis originally published here by Análisis Carolina in Madrid.

Ecuador: Growing Political and Economic Repercussions of COVID-19

By John Polga-Hecimovich*

Lenín Moreno speaking at an event

Lenín Moreno, presidente de Ecuador/Flickr/Creative Commons

Despite early aggressive measures against COVID‑19, Ecuador has suffered one of the world’s most devastating outbreaks that, combined with the drop in international oil prices, may be catastrophic for the country’s economy and for President Lenín Moreno. Since March 16, the President declared a national state of emergency and curfew throughout the country; imposed strict social isolation (until May 4) that suspended all face-to-face activities; and established a special security zone in the province of Guayas, epicenter of the pandemic. Even so, Ecuador currently has the second-highest number of documented cases in South America, after Brazil, and the death toll from COVID‑19 may have reached between 7,600 and 11,000 during April.

  • Ecuador’s first case of COVID-19 was detected on February 27 in the port city of Guayaquil. As the virus spread in March and early April, the city experienced an unprecedented humanitarian crisis due to the much-publicized accumulation of hundreds of corpses in homes and on the streets. The local government’s response was erratic, with mayor Cynthia Viteri at one point ordering officials to block the runway at the airport to prevent a flight from Spain from landing, and later comparing the devastation to “the Hiroshima bomb.” Viteri has since estimated that perhaps as many as one-third of guayaquileños have COVID‑19.

Despite the lockdown measures, the national government has also shown a lack of capacity in addressing the public health crisis. Moreno created a task force to deal with the situation in Guayaquil, but even then, the government possessed a limited ability to determine who had the virus, to say nothing of addressing shortages of suits, masks, gloves, and ventilators for hospital personnel. In a national address in early April, the President acknowledged that official coronavirus figures had significantly understated the extent of the country’s health emergency. There have also been worrying accusations of corruption against officials in the Ecuadorian Institute of Social Security (IESS) in outfitting hospitals, and the Attorney General’s office charged the now ex-National Secretary of Risk Management Alexandra Ocles with influence-peddling.

  • The combined impact of the pandemic and oil crisis on the country’s economy may be catastrophic. Petroleum is Ecuador’s largest export commodity and accounts for about a third of its public-sector revenue. The 2020 national budget was planned with an oil price of $51.30 per barrel (currently hovering around $30.00), which will increase the country’s deficit. Ecuador also has little savings to implement a countercyclical fiscal policy and is on the brink of defaulting on its $50 billion debt. Adding to the troubles, due to dollarization, it cannot devalue its currency to reduce its deficit. The collapse of export revenues and massive foreign debt payments have greatly compounded the economic cost of the pandemic, and the country’s GDP may shrink by as much as 7-8 percentage points.
  • The government is just barely muddling through. Private bondholders have accepted the government’s request to defer interest payments on the country’s debt until August 15, freeing up $811 million and buying Moreno some breathing room. However, this could merely postpone a default: a fragmented and intransigent legislature and social sectors have balked at emergency austerity measures. Responding to the country’s social needs and economic well-being is a difficult line to walk. The government has issued a $60 stimulus (bono) that will benefit some 400,000 people, while at the same time it submitted a bill to the National Assembly that proposes an extraordinary tax on both companies and individuals to bring unbudgeted resources into the national treasury.

While the government confronts its public health and economic problems, general elections are nine months away and the National Electoral Council is already debating ways to carry them out. There is too much uncertainty at the moment to determine any potential frontrunner. Moreno is not running for re-election; ex-Guayaquil Mayor Jaime Nebot has suffered due to his city’s lack of preparedness at confronting the pandemic; and the fate of Interior Minister María Paula Romo may rest on the Moreno government’s (so far unconvincing) response. Like leaders around the globe, Moreno is faced with the unpleasant challenge of keeping the country’s economy shuttered longer or risking a resurgence of the virus. The success or failure of his strategy will undoubtedly shape the country’s political and economic future.

May 15, 2020

* John Polga-Hecimovich is an Assistant Professor of Political Science at the U.S. Naval Academy. The views expressed in this article are solely those of the author and do not represent the views of or endorsement by the Naval Academy, the Department of the Navy, the Department of Defense, or the U.S. government.

Regionalism in the Time of Coronavirus: The Only Way Forward?

By Leslie Elliott Armijo*

Coronavirus Latin America

Map of the COVID-19 outbreak in Latin America as of 30 April 2020/ Pharexia/ Wikimedia Commons (modified)

To overcome the multiple challenges of the COVID‑19 crisis, Latin America’s leaders will need to build regional cooperation around pragmatic solutions – an elusive goal for countries with a legacy of disunity and weak collaboration. The coronavirus has hit at a moment of economic vulnerability. Regional growth averaged only 1.9 percent in 2010-19, worse than in the “lost decade” of the debt-crisis 1980s (2.2 percent). Labor productivity, which in 1960 was almost 250 percent of the world average, has fallen steadily in every subsequent decade, and in 2019 sat at a mere 90 percent of the global mean. Persistent squabbling among Latin countries has meant that major global trading states, including the United States and more recently China, could dictate the terms of bilateral trade and investment agreements in ways that favored these larger powers.

  • In negotiating global trade, Latin America and the Caribbean have shown little shared identity or cohesion, whether as a region or as sub-regions. As of late 2018, as global value chains coalesced around three regional hubs – China/East Asia, U.S./North America, and Germany/European Union – Mexico, Central America, and the Caribbean were linked to the U.S. but lacked bargaining power to seize more advantageous positions vis-à-vis the United States. South America has deindustrialized since the turn of the century, returning to its historic role of commodity exporter to all three hubs. Intra-regional trade as of 2017 was only 22 percent of all Latin American trade and had fallen since 2013.
  • This is a shaky foundation from which to face the health and economic challenges of COVID‑19. The IMF’s scenario, which assumes an optimistic return to business mostly-as-usual in the third quarter, predicts a contraction of GDP in 2020 of 5.2 percent in the region, driven by brutal collapses in the two largest economies, Brazil and Mexico, of -5.5 and -6.6 percent respectively. The extra-regional markets for Latin America’s exports certainly will shrink due to both short-term reasons of global depression and longer-term ones of enhanced economic nationalism abroad. Remittances and tourists from the U.S. and elsewhere will not return to their previous numbers for a long time.

A coronavirus-solidarity virtual summit last month showed that some regional leaders realize the need for joint action. Nine of 12 South American presidents participated, although Brazilian President Jair Bolsonaro – who has made intemperate and dismissive remarks about his fellow leaders – gave his seat at the video conference to his foreign minister, Ernesto Araújo.

  • Argentine President Alberto Fernández participated despite Bolsonaro’s snub (including on previous occasions) and his previously chilly relations with the sponsoring body, PROSUR, founded in 2019 by center-right Presidents Iván Duque of Colombia and Sebastián Piñera of Chile as an explicit counter to the pre-existing regional body, UNASUR, which leaned left during the presidency of Bolivia’s Evo Morales (now in exile in Argentina). In so doing, Fernández demonstrated the pragmatism and understanding that Latin American and Caribbean leaders often eschew: if you want to solve policy challenges, you must maintain dialogue with people with whom you disagree.

If there is any light at the end of this tunnel, it could be psychological, as crises tend to focus minds. The disruption in international relations beyond Latin America probably will accelerate the move away from the post-Cold War “unipolar moment” and fuel domestic economic nationalism that will shake up the three major global trading hubs – a reorganization in which the region could redefine its place. In this scenario the best defense for Latin America is a strong offense. As Alicia Bárcena, Executive Secretary of the UN’s Economic Commission on Latin America and the Caribbean (CEPAL), said recently, the region’s resilience likely depends on “investment in strengthening regional production chains” to create “complementarities in production structures and regional integration.”

  • Diplomacy enables states to share knowledge and engage in collective action to meet real cross-border challenges, including those of the current crisis. Regional solidarity does not require headquarters buildings, formal treaties, and summit pageantry, nor even similar domestic political systems. The considerable achievements of the loose, informal clubs known as the G7, the G20, and the BRICS prove the value of cooperative models that need not boast costly institutional scaffolding. The Association of Southeast Asian Nations (ASEAN), formed in 1967 by 10 countries that were at least as mutually suspicious of one another as they were of China, provides another lesson about somewhat effective regional cooperation that Latin America would do well to note.

April 30, 2020

* Leslie Elliott Armijo is an associate professor at the School for International Studies, Simon Fraser University, Vancouver. Her most recent book, coauthored with C. Roberts and S.A. Katada, is The BRICS and Collective Financial Statecraft (Oxford University Press, 2018).

COVID-19 in the Caribbean: So Open, so Vulnerable

By Bert Hoffmann*

rows of empty beach chairs in Jamaica

Beach in Jamaica/ Marc Veraart/ Flickr/ Creative Commons License (not modified)

In the Caribbean, the COVID-19 crisis hits some of the world’s most open, specialized economies, forcing the region to rethink its development model. Eleven of the world’s 20 most tourism-dependent nations are in the Caribbean. The collapse of this sector leaves the import-dependent island states extremely vulnerable beyond the immediate health crisis and beyond the social and economic fallout from the current “shelter in place” rules and lock-down measures.

  • For most Caribbean nations, tourism is by far the most important economic activity. In small states like Barbados, St. Lucia, Antigua and Barbuda, and the Bahamas, tourism makes up more than 40 percent of GDP. In bigger countries like Jamaica, it accounts for more than half of exports and employs almost a third of the workforce. Many in the tourism industry cling to hopes of a speedy recovery, but this is not likely. Travelers’ confidence in cruise ships and exotic flight destinations will not fully rebound before vaccinations against the virus become readily available. Not only the low season this summer is lost, but also much of the crucial winter season.
  • The pandemic is also going to slash remittances from Caribbean emigrants. Most states have sizeable diaspora communities, and money transfers from abroad are a vital part of their economies. Unlike in the aftermath of hurricanes, migrants in the United States, Europe, or neighboring islands are affected by the same crisis. Many will also cancel visits “home.”

Current social policy measures may be able to mitigate some of the hardship, but foreign exchange buffers are hardly sufficient to maintain these on such a scale over a long time. Largely agricultural countries decades ago, most of the region today imports more than half the food they consume – seven CARICOM countries even more than 80 percent. With global supply chains and food production in the United States disrupted, imported food prices will rise. Reviving local farm tradition passes from a “romantic” niche concern to being a key issue of social policy.

  • In the Caribbean’s non-sovereign territories, the crisis underscores their population’s dependence on the welfare systems of the United States, France, the UK, and the Netherlands. At the same time, it casts a spotlight on persisting inequalities. Puerto Rico, for instance, has only one-fourth of intensive care unit beds per capita than the U.S. mainland, despite its much higher share of elderly residents.

The coronavirus crisis is bringing to the fore a number of long-term challenges for the Caribbean. If left solely to the logic of comparative advantages, the region’s world market integration tends to be one of specialization, not diversification. The downside is a high vulnerability to external shocks. In recent years, “resilience” became part of the vocabulary of Caribbean policymakers in the context of climate change, not to face global economic or health shocks. The current crisis demands thinking of “resilience” as a development goal in an even broader sense.

  • The pandemic also highlights the extent to which the Trump Administration takes the United States out of the game of soft policy approaches, and China finds a field left wide open. Beijing’s shipments of medical supplies and protective wear are a small investment, but they have a big impact in countries of some 100,000 inhabitants. Taiwan is also providing face masks and soft loans to those that still recognize it diplomatically. In contrast, what Washington seems to care about more than anything else is that the Caribbean nations should not accept Cuban doctors in to fight the disease.

April 20, 2020

* Bert Hoffmann is a Lead Researcher at the German Institute for Global and Area Studies (GIGA) and professor of political science at the Free University of Berlin’s Latin American Institute.

Cuba: Dealing with the Global Pandemic

By Ricardo Torres*

Cuban nurses carrying the Cuban flag

COVID-19 Response: Over 100 Cuban Nurses Arrive Barbados / Flickr / Public Domain

Cuba faces a “perfect storm” – a global health crisis – that poses the latest in a long list of challenges to its government, but a systematic destabilization of the country is highly unlikely, if not remote, for now. The COVID‑19 pandemic has caused an unprecedented disruption to the world economy, the devastating effects of which no country has escaped. The Cuban economy is critically dependent on tourism and remittances, two areas that have been deeply affected. Those countries from which visitors and cash flow to Cuba are greatest – the United States, Canada, Western Europe, and China – have been hit hard.

  • The shock is compounded by a drop in Cuba’s average annual growth from 2.7 percent in 2010‑15 to 1.4 percent in 2016‑19. The causes of that decline include the economic crisis in Venezuela; the cancellation of medical services agreements in Bolivia, Brazil, and Ecuador; the end of the international tourism bonanza; and the effect of new U.S. sanctions. Washington’s actions have complicated trade, foreign investment, and travel. The measures have limited remittances, reduced Cuba’s ability to import fuel, and clamped down on foreign firms operating in Cuba, such as through the first application of Title III of the “Helms-Burton Act.”
  • Another factor has been the disappointing results of Cuba’s internal economic reform, which has been wrapped up in political contradictions and a lack of clarity of its objectives. One costly flaw in these circumstances has been the government’s inability to stimulate industries that provide essential products, particularly food. Combined with the international challenges, including fresh, tough sanctions by the United States, this problem has contributed to a situation in which the Cuban people face growing shortages of all kinds of products, including food, medicines, and fuel.

The government’s response to COVID‑19 has evolved from caution to the gradual imposition of increasingly radical measures.

  • In mounting a medical response, the centralization and verticality of the Cuban model allows authorities to adapt plans and resources in the face of new priorities. The Cuban health system, for example, is known for its national coverage and access to resources (including 848 doctors and 5.5 beds per 100,000 inhabitants), and it has experience dealing with epidemics. Decisions have been taken around the concept of epidemiological vigilance, including closing the borders on April 2 and bolstering research, although the inability to carry out massive testing has been a weakness. The government has also guaranteed workers’ income and employment, except for parts of the private sector and informal economy, and expanded food-rationing to a broader list of products.

The economic impact in the medium term should not be underestimated. GDP growth will enter negative territory. Financial problems will surely deepen. Shortages of an array of basic necessities are going to worsen. Restructuring of foreign debt is necessary.

  • Internally, Cuban policymakers are going to have to take into consideration the new socioeconomic structure of the country and the need to focus support where it’s needed most. The crisis provides a good opportunity to give substance to longstanding rhetoric about improving agricultural production. Greater flexibility in regulating private businesses is also an obvious policy option. Accelerating and broadening digital access throughout society should also be a priority under the wisdom of “not putting off till tomorrow what can be done today.”

The Cuban Government is not presiding over a terminal crisis, however. Even considering the system’s weaknesses before the pandemic, this perfect storm is not its responsibility. For the medical challenge, Cuba is prepared and probably will overcome some of the criticisms made abroad about its medical missions, as brigades of Cuban doctors deploy to 19 countries. The country’s biotechnology industry also stands to make advances. It’s too early to say whether Cuba will be able to profit from these opportunities, but Havana may benefit from its willingness and ability to be a responsible international partner.

  • Washington’s policies also put it in sharp contrast with China, which continues to provide help during these difficult times. If the pandemic has made anything clear in Cubans’ minds, it’s that the United States is disqualifying itself as a positive force for change on the island.

April 17, 2020

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

 

Nicaragua in the Time of COVID-19

By Kenneth M. Coleman*

Presidente de El Salvador participa en Cumbre SICA-Nicaragua.

President of Nicaragua Daniel Ortega /Flickr / Creative Commons

Nicaraguan President Daniel Ortega and his wife, Vice President Rosario Murillo, have not appeared in public for 28 days, but their response to the threat of COVID‑19 has consistently been the equivalent of “Don’t worry, no problem, we got this!” Government policies suggest it is going out of its way to pretend the virus poses no threat to Nicaraguans.

  • On April 4, the pro-Ortega city council of Altagracia on the tourist island of Omotepe promoted a motorcyclist gathering by offering free fuel and free transport on very crowded ferries. Press photos of the event show no masks and no social distancing.
  • Several days earlier, the government orchestrated the arrival of hundreds of supporters to celebrate the opening of a bridge in Granada, with a similar absence of anti-viral measures.
  • In late March, “health brigades” were mobilized to visit households and provide information on how to avoid COVID‑19, but some citizens refused the visitors because of the lack of social distancing.
  • Private schools have closed, but public schools and universities have not. Media reports are that primary and secondary teachers are being pressured to schedule exams to compel attendance. Some parents are keeping their children at home anyway.
  • On March 13, Murillo convoked a march (but did not personally participate) entitled “Love in the Time of COVID-19,” with thousands of party supporters and public employees and their children marching in close contact.

Citizens say the government’s posture has not been reassuring and are taking action themselves. The government has not revealed the number of tests conducted, but has reported only six cases of coronavirus, all people who had been abroad, with one confirmed death. It reports no community transmission inside Nicaragua, although three Cuban women have tested positive for the virus after visiting Nicaragua. Dora María Téllez, who was a Health Minister in the 1980s, says the government is not seriously pursuing contact tracing. Costa Rica’s admission of 502 confirmed cases makes people doubt Managua’s figures. Local leaders, most affiliated with the government, have shown little willingness to taking independent action on the virus.

  • In a mid-March survey, CID-Gallup found that 65 percent of Nicaraguans were “not at all satisfied” with the government’s handling of the virus, while 11 percent were “dissatisfied.” In the same survey, 57 percent said they felt there was “much risk of contagion” in their neighborhood, and another 25 percent felt there was “some risk.”
  • Taking matters into their own hands, family-owned market stalls in public markets started closing weeks ago. Two major companies in maquila zones last week furloughed 19,000 workers to protect their health. Citizens have created an Observatorio Ciudadano COVID‑19 to collect data on cases and exposures to the virus. The Superior Council of Private Enterprise (COSEP) has pleaded with the government to close schools and allow private hospitals to test for the virus, and it joined the Central American Institute for Business Administration (INCAE) and other private-sector organizations to encourage social distancing, urge debt relief for the poor, and create a Humanitarian Assistance Fund. The government has not responded to their offers to cooperate.

Nicaraguan experts, such as epidemiologist Leonel Argüello, fear the country could eventually have as many as 500,000 COVID‑19 infections, implying thousands of deaths. The consequences for Nicaragua’s years-long political standoff are unclear. While the business community is extending an open hand to deal with the crisis, the government seems disinclined to cooperate. The one situation that would alter this dynamic is if Daniel Ortega himself – who has not appeared in public for four weeks now – were to be incapacitated. On COVID‑19, Rosario appears to be calling the shots, but if Daniel is seriously ill, internal dynamics, over time, might prove unpredictable. Were he to die, it would put in jeopardy the dynastic succession that he and Murillo (and her two sons) have worked hard to put in place. Rosario and the sons are already under sanctions by the U.S. Department of the Treasury. Even members of their party might see some disadvantages to having a president unable to conduct most international banking transactions.

April 9, 2020

* Kenneth M. Coleman is Director for Partner Programs at the Association of American Universities. The views expressed herein are his own.

 

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.