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

July 19th Anniversary and the New Nicaragua

By Rose Spalding*

Photo credit: Globovisión / Foter / Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Photo credit: Globovisión / Foter / Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Daniel Ortega’s political rebirth has produced a remarkable partnership with the Nicaraguan business sector.  Thirty-five years ago, when he and the Nicaraguan revolutionaries ousted dictator Anastasio Somoza, a U.S. ally known for corruption and human rights abuses, they clashed with the business sector, the Catholic Church leadership, and a heterogeneous band of counterrevolutionaries armed and financed by the Reagan administration.  Ortega lost elections in 1990 but made a remarkable return to power in 2007, ushering in the “second phase of the Sandinista revolution.”  Unlike during his first term, he undertook to collaborate with COSEP, the Nicaraguan association of business chambers, and gave its members, perhaps more than any other group, regular access to high-level officials and a palpable voice in shaping legislation.  According to José Adán Aguerri, the current president of COSEP, 77 out of 81 of the Ortega government’s economic laws have been produced in dialogue with the business association.  These involve wide-ranging negotiations on minimum wage increases, tax reform, housing development, social security expansion, investment incentives, and other issues.

This partnership has contributed to economic growth and direct foreign investment.  The World Bank reports Nicaragua’s economic growth was 5 percent in 2012 and 4.6 percent in 2013, compared to 2.6 percent and 2.4 percent for the Latin American region as a whole.  According to CEPAL, foreign investment in Nicaragua reached $849 million in 2013, a level that was second only to the $968 million reported for 2011.  Nicaragua’s investment promotion agency, ProNicaragua, documents strong investment in tourism, agribusiness, textiles and outsourcing services.  The extractive sector is also growing rapidly.  Responding to strong commodity prices and a cordial reception in Nicaragua, Canadian gold mining company B2Gold recently announced a planned investment of $289 million to expand its operations in La Libertad.  Nicaraguan investors have developed new initiatives, including a major tourism project orchestrated by Carlos Pellas, the country’s richest man.  The relationship has benefited from the ALBA agreement Ortega signed with Venezuela President Hugo Chávez in 2007.  Venezuela assistance has totaled $3.4 billion in loans, donations and investments in the 2008-2013 period.  These funds regularized Nicaragua’s precarious energy supply and subsidized transportation, housing, microcredit and public sector wages, providing a general economic stimulus from which elites also benefitted.  Announcements of a projected $40 billion investment in an interoceanic canal reinforce the image of a new development era in Nicaragua.

The business-government relationship reflects mutual accommodation by Ortega and business leaders.  Nicaragua lost several decades of economic growth during the 1980s and the “contra” war, so upon his return to power Ortega put a premium on promoting growth, tread lightly on issues of tax reform, and eagerly pursued foreign investment.  He met repeatedly in closed sessions with business leaders and called for a “grand alliance” of government, business and workers to combat poverty, promote investment and create jobs.  A formal consultation mechanism brought together leaders from COSEP and the government, such as Bayardo Arce and Paul Oquist, for regular policy discussions.  Offering a stable economic environment and generous investment incentives, a non-conflictual labor force with the lowest wages in the region, a relatively low crime rate, and receptivity to business initiatives, Ortega won over business allies.  The business interests of current and former Sandinista leaders, some affiliated with COSEP, reinforced the collaboration and helped convince a new generation of business leaders to put aside traditional hostility and preoccupation with injuries of the revolutionary 80s.  They accepted the government’s legitimacy and bolstered its domestic and international credibility.  Enthusiastic about the growth of the Nicaraguan economy, economic elites also downplayed lingering questions about deficits in democratic institutionality and accountability.  But the heightened concentration of political power under Ortega and the weakness of other state institutions mean that economic rules are vulnerable to shifting political winds, and questions remain whether this development approach will resolve the problem of widespread poverty.  Even as the government-business relationship warms and the economy grows, these social and political concerns continue to bedevil the country.   

*Dr. Spalding is a professor of political science at DePaul University.