Ecuador: Beyond the Presidential Contenders

By Christopher Kambhu*

Andrés Arauz Galarza / Wikimedia Commons / Creative Commons License (Modified) | Profile photo of Guillermo Lasso / Mabel Velástegui / Wikimedia Commons / Creative Commons License (Modified)

When Ecuadoreans head to the polls this Sunday to vote in the presidential election runoff, the two candidates on the ballot represent the country’s dominant political movements, but February’s first-round and legislative votes demonstrate a changing political context that will constrain the next president.

  • Andrés Arauz, a little-known economist until he launched his campaign, won the first round with 33 percent and is favored by analysts to win the runoff. His support lies in his ties to former President Rafael Correa, who anointed him to lead his leftist political movement. Correa intended to be Arauz’s running mate but was barred from seeking office due to corruption convictions from his time as president. Arauz’s policies are largely a continuation of Correa’s in substance and style; he has pledged to provide cash payments to a million families during his first week in office and vowed to scrap an austerity plan put in place by outgoing President Lenín Moreno as part of a loan package with the International Monetary Fund.
  • Guillermo Lasso, a major shareholder in one of Ecuador’s biggest banks and former economy minister, has reached the runoff for the third time in as many attempts, with just under 20 percent of the vote. He has the support of the business community, especially in Quito and the coastal commercial hub of Guayaquil. His name recognition and significant finances put him in a strong position heading into the second round, but his role as minister during the country’s 1999 financial crisis and long career in the banking sector remain liabilities. His campaign is working to unite rivals who lost the first round.

This is the third consecutive election in which a rightwing challenger is taking on the leftist politics of Correa, but an environmental lawyer and the third-place finisher in the first round, Yaku Pérez, is poised to play a decisive role in the outcome. Positioning himself as a leftist alternative to the establishment politics that Arauz and Lasso represent, Pérez calls for stronger environmental protections and support for renewable energy – positions that have been adopted, at least rhetorically, by both runoff campaigns.

  • While analysts predict Arauz and Correismo will triumph, the polls are close. Further uncertainty stems from how Pérez’s supporters will vote; for them, deciding between a Correista and a banker is to choose the lesser of two evils. So far, Pérez is not endorsing either candidate and has told his supporters to spoil their ballots. (Voting is mandatory.) Voters are apparently listening; polls show up to 20 percent of respondents will not vote for either candidate.

Whoever wins, they will face several immediate challenges. Cases of COVID-19 are nearing the record levels set a year ago, when scenes of bodies lying in the streets of Guayaquil made international headlines. The outgoing Moreno administration has struggled to obtain vaccines and changed health minsters three times due to poor results and various scandals. Engineering economic recovery from the pandemic will also be a huge test. Both candidates support expansion of extractive industries, which were key drivers of Ecuador’s economic growth during Latin America’s commodities boom in the 2000s. However, this tactic will face resistance from the growing environmental movement energized by Pérez’s campaign.

  • The runoff victor must also contend with the National Assembly, which saw a significant electoral shakeup in February. The Pachakutik Plurinational Unity Movement, the indigenous party which Pérez represented in the presidential campaign, had the best results in its history and will be the second largest party in the legislature after Arauz’s Unión por la Esperanza. Pachakutik generally played a minor role on the national stage until it and other indigenous groups lead nationwide 2019 protests against the Moreno administration’s attempt to end fossil fuel subsidies as part the IMF loan deal. Pachakutik parlayed its new national profile into electoral success and is in a strong position to influence most legislation, regardless of who wins the presidency.

April 8, 2021

*Christopher Kambhu is a Program Coordinator at CLALS.

Cuba: Communists Convene

By William M. LeoGrande*

(From left to right) Miguel Díaz-Canel, Homero Acosta, Salvador Valdés, Ramiro Valdés, and Roberto Morales Ojeda/ Cubadebate/ Flickr/ Creative Commons License

The Cuban Communist Party (PCC) will convene its Eighth Congress on April 16‑19 to choose new leadership and assess policies intended to address longstanding economic and political challenges – with no indication of bold new departures. After all, Raúl Castro’s heir apparent as party leader, Miguel Díaz-Canel, has adopted as his favorite hashtag #SomosContinuidad. The meeting will have three major agenda items: selection of a new First Secretary to replace 89-year-old Raúl Castro and – perhaps – the replacement of other elderly party leaders; an assessment of progress implementing economic policies adopted at the Sixth Congress in 2011; and a review of the party’s political work, as mandated by the First National Party Conference in January 2012.

  • The Cuban leadership is undergoing a generational transition from “los históricos,” who founded the revolutionary regime, to a new generation born after 1959. Castro has affirmed his intention to step down as First Secretary in favor of Díaz-Canel, who succeeded him as President in 2018. However, Castro has not publicly ruled out remaining a member of the Political Bureau, and neither have the four other veterans of the struggle against Batista on the 17-member body – including reputed conservatives Second Secretary José Machado Ventura and Ramiro Valdés. The generational transition will not be complete until they depart; it’s hard to imagine Díaz-Canel would truly be in charge if he is still surrounded by these powerful old-timers.

Pummeled by President Trump’s tightened sanctions and the COVID-19 pandemic that closed the tourist industry, Cuba is suffering the worst economic crisis since the “Special Period” of the 1990s after the Soviet Union collapsed. The central theme of the Party Congress will be an exhortation to the party faithful to go full speed ahead on economic reforms, overcoming the bureaucratic resistance that has impeded them until recently.

  • When Raúl Castro introduced the reforms in 2011, he said it would take a decade to put them in place. Ten years later, they are far from finished, although the pace of reform has accelerated over the past nine months. The number of permitted private-sector occupations has increased from just over a hundred to more than 2,000. The dual currency and exchange rate system that created crippling distortions in the economy has been scrapped. And state enterprises have been put on notice that they have 12 months to become profitable or close their doors. In the short term, however, the economy remains hobbled by inefficiencies and unable to satisfy many basic needs.

The Congress will also review the party’s “political work” the task of building public support for the government. In 2012, Raúl Castro criticized the party’s poor performance. Endless meetings degenerated into “formalism,” in which no real criticism was ever voiced and little was accomplished, thereby “spreading dissatisfaction and apathy” among the membership. These failings weakened the party’s ties to the broader public, for whom it seemed remote and inaccessible. Another indicator of the party’s tenuous standing was an 18 percent decline in membership from 2011 to 2016 – the first decline since the party was founded in 1965.

Cuba’s party congresses always convene on the anniversary of the Bay of Pigs invasion – 60 years ago this April –  to commemorate Cuba’s successful defeat of Washington’s imperial designs. The focus of the upcoming Congress, however, will be on how the party can steer its way past the shoals of Cuba’s internal challenges and “update” its economic model of socialism through reforms that it nominally embraced years ago but has failed to fully carry out. With popular discontent at a peak because of the desperate economic situation and with critics mobilizing through social media to challenge state policy, the party has its work cut out for it.

April 5, 2021

* William M. LeoGrande is Professor of Government at American University. 

Biden’s North American Reset?

By Tom Long and Eric Hershberg*

Map of North America/ Public Domain/ Creative Commons License

A North American approach to regional cooperation could make a comeback under the administration of U.S. President Joe Biden. Though promoted with little enthusiasm by President Obama and derided by the Trump administration, the utility of North American cooperation is suggested by a combination of factors: the desire to turn the page on Trump’s transactional approach to neighbors, interest in “near-shoring” as a result of the pandemic and frictions with China, and the growing salience of shared transnational challenges.

  • Trump played on anti-NAFTA and anti-Mexican sentiments in his rise to power. He followed his divisive campaign with dramatic standoffs over the border wall, tariffs on Canada and Mexico, and nativist immigration and asylum policies. Policy statements from the Biden campaign, Democratic Party platform, and transition team suggest the new president will be eager to signal his rejection of such policies, making a pro-North American stance attractive in the broader context of a return to multilateralism. To be sure, elements of the Democratic Party long harbored skeptical views of North American cooperation (especially NAFTA), but the anti-North American stance is now thoroughly associated with Trump, and Democrats have found themselves defending the concept during the last four years.
  • The pandemic and rising tensions with China have raised questions about the desirability of far-flung supply chains, at least for sensitive products like medical and telecommunications equipment. Revelations about forced-labor practices in China have also put human rights back on the trade agenda. This is an issue for Canada, too, given its tensions with China over electronics giant Huawei. At the same time, it presents an opportunity for Mexico.
  • Transnational challenges including public health, migration, and security have long provided a rationale for greater policy coordination in North America. Many of these issues have grown from irritants to major problems given the neglect and perverse U.S. policies of the last four years.

Under President Biden, these factors may give North American cooperation a new lease on life. As a regional policy framework, “North America” could give renewed stimulus to North American economic integration, which had stagnated due to China’s rise, increased border controls after September 11, 2001, limited investment in coordination or infrastructure, and various migration and security crises along the U.S.-Mexico border. Trump’s rhetorical and policy barrage has awakened powerful interests to defend economic integration at the same time that it has motivated civil society organizations to defend North America’s integrated transnational communities.

Progress is likely even if the phrase “North America” is slow to return. NAFTA was officially replaced in July 2020 by a new pact that preserved most of its features but stripped “North America” from its name. (The three signatories have named the deal differently – USMCA in the U.S., TMEC in Mexico, and CUSMA/ACEUM in Canada – but none includes “North America.”) The separation of “North America” from the pact creates, counterintuitively, an opportunity to expand the understanding of the region and related policy frameworks.

  • Politically, “North America” could provide a useful space for Mexican President Andrés Manuel López Obrador, who has shown little interest in Biden’s initiatives for bilateral cooperation and has provoked tensions with Washington through his handling of the Cienfuegos case, to provide leadership.
  • Practically, many deeply “North American” issues, particularly migration, suggest a wider understanding of the region to include parts of Central America and the Caribbean. Tensions about Central American migration will be high on the new administration’s agenda, but addressing these challenges through a North American lens offers a constructive contrast to Trump’s narrow nationalism.
  • Economically, given the contrast between countries of South America that have been more deeply reliant on exports to China versus those that are still most closely linked to the U.S. market, a broadened North America could provide a forum – larger and more diverse than NAFTA but smaller and more focused than the Summit of the Americas – to address regional policy challenges.

President Biden inherits an old trilateral region that seemingly has no name and a badly damaged economic partnership, but the gravitational pull of the U.S. market, new rhetoric and policies from Washington, and other underlying drivers should restore the economic and political importance of the region, offering an opportunity to rethink the boundaries and purpose of North America.

January 21, 2021

* Tom Long is Associate Professor at the University of Warwick and Chair of the Robert A. Pastor North American Research Initiative at American University. Eric Hershberg is Director of the Center for Latin American and Latino Studies and Professor of Government at American University.

Why Are Chile’s Protests Continuing?

By Pablo Rubio Apiolaza*

protests in chile

Protests began in Chile October 2019/ Diego Correa/ Flickr/ Creative Commons License

Chile’s political agreement in November to hold a referendum on the country’s Constitution in April reduced protests for a while, but the underlying causes of discontent – deep-seated frustration among many Chilean citizens – continue to fester and drive an array of peaceful and violent protests. Since November, President Sebastián Piñera has promoted an aggressive social agenda, including raising the minimum wage and improving the pension system. A survey by the Center for Public Studies (CEP) in Santiago in early January, however, found that Piñera’s approval rating was around 6 percent – the lowest of any president since Chile’s return to democracy. By almost all accounts, distrust in the government and anger at the corruption of politicians and corporations remains deep. People want solutions “here and now” to many of their demands. Both peaceful and violent protests have continued through the traditionally quiet summer break.

The mobilizations are not as spontaneous as they were in October and November, according to many observers, but there’s little evidence of a conspiracy to disrupt the referendum agreement.

  • Trade unions and traditional social movements organized under the banner of the Mesa de Unidad Social have become important actors, but new activists have also emerged. The loosely organized “Primera Línea” (front line) has engaged in violent clashes with the Carabineros, mainly in Santiago. Anthropologist Magdalena Claude observed and interviewed some members of Primera Línea in January and called them the “ACAB clan,” borrowing an acronym popularized by British punk rockers proclaiming that All Cops Are Bastards. According to Claude’s research, the group is composed of young workers of the service sector, not members of political parties. They do not have a recognized leadership and organize in horizontal networks.
  • Some conservative Chileans are denouncing the protests as the result of “foreign intervention” and a “coup d’état” provoked by the “extreme left.” They cite as evidence a New York Times report on January 19 that the U.S. State Department estimated that nearly 10 percent of all tweets supporting the October protests originated with Twitter accounts that appeared to have links to Russia. Allegations of foreign intervention by Venezuela and other countries have been endorsed by Chilean Foreign Minister Teodoro Ribera and President Piñera. Neither the U.S. nor Chilean government has provided evidence to support any of these claims.

Damage to the government’s credibility and reputation since October seems likely to continue to embolden opponents in the runup to the referendum. Carabinero abuses have been verified and condemned by a host of observers, including Human Rights Watch, Amnesty International, the Inter-American Commission on Human Rights, and various Chilean organizations. The UN High Commissioner for Human Rights, led by former Chilean President Michelle Bachelet, has detailed “multiple allegations of torture, rape and other forms of sexual violence by the police against people held in detention.” More than 30 people have died in protests and, although the great majority of the tens of thousands of protestors detained have been released, anger over their arrest is fresh. The government has convened 15 experts to develop recommendations to reform the Carabineros – to enable them to move “forward with urgency the recovery of the public security with absolute respect for human rights” – but challenge of building public trust will be monumental.

  • A prestigious Chilean polling firm, Cadem, reported two weeks ago that 63 percent of the Chilean population approved of the protests and – importantly – 80 percent believe that Chile will be a better country after this critical situation. In any case, the plebiscite in April will take a place in an unstable context, with an uncertain outcome. For the Piñera administration, the challenges seem unlikely to abate, and pressures may surge when the school holidays end in March.

February 19, 2020

* Pablo Rubio Apiolaza is a historian, visiting researcher in the Department of History at Georgetown University, and researcher at the Library of Chilean Congress.

Brazil: Will Lula Shake Things Up?

By Fábio Kerche*

lula

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

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

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

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

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

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

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

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

December 12, 2019

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

 

Bolivia: Prospects for Post-Evo Transition

By Robert Albro*

Crowd march with boy holding the pan-indigenous flag

March in favor of Evo Morales /Flickr/ Creative Commons/ https://www.flickr.com/photos/santiagosuburbano/49098960458/

Bolivia’s streets have been calmer in recent days, but actions by self-proclaimed President Jeanine Áñez have raised legitimate concerns about what sort of transition Bolivians face after the almost 14-year presidency of Evo Morales. The protests, marches, and violence that have characterized the aftermath of the disputed presidential election on October 20 have left at least 33 people dead – including 30 since Áñez took office and soon thereafter issued a presidential decree (since rescinded) giving security forces immunity from prosecution when engaged in restoring “order.” While Áñez has claimed she is a caretaker whose only charge is to organize new elections within 90 days, she has not behaved like one.

  • Previously an obscure backbencher and opposition senator from an inconsequential political party representing remote Beni, Áñez had planned to retire from politics at the end of her term. Her position as second vice-president of the Senate was largely ceremonial, with little control over budgets. Down the list of constitutional succession, she became acting president only after multiple Morales administration officials resigned.
  • Although unelected and lacking a mandate, Áñez has taken a series of decisive steps to undo Morales’s legacy. A conservative Christian and Morales critic, she has proclaimed Bolivia a “Catholic country” and disparaged its Indigenous majority as “irrational.” She has surrounded herself with a cabinet composed of like-minded critics from Bolivia’s eastern lowlands. This region includes the departments of Santa Cruz, Tarija, Pando and Beni, together often called the Media Luna (Half Moon), and is the heartland of economic elites whose political power was substantially diminished by Morales’s rise. In 2008 the Media Luna was for months in open revolt against Morales and his government, contending for control of the country’s considerable natural gas revenues. Often cast in racist terms, these elites consistently and categorically rejected Morales’s presidency.

As interim president, Áñez has replaced the military’s leadership, cabinet ministers, and heads of major state-owned companies with her own appointees. She reestablished ties with Washington, severed relations with Venezuela, kicked out Cuban doctors working in the country, and is considering Bolivia’s withdrawal from the largely-defunct UNASUR. Áñez has not sought conciliation with lawmakers from Morales’s MAS party, who still command a legislative majority. Instead, seeming to turn to the playbook of the country’s and the region’s dictatorial past, her administration has accused Venezuela and Cuba of supporting subversive groups in Bolivia, threatening to prosecute former government officials now in hiding and to charge MAS lawmakers and journalists critical of her policies with “sedition.”

These moves do not bode well for an orderly electoral do-over. Luis Fernando Camacho, the Santa Cruz civic committee leader who has emerged as Áñez’s vocal and controversial far-right supporter, already seems to be in campaign mode, despite his scant political credentials. Political moderate and second-place finisher in last month’s election, Carlos Mesa, appears to be largely sidelined. Morales himself has been legally barred from participating, and MAS, while still a political force in Bolivia, lacks an obvious figure to replace him. Meanwhile, Áñez and the far-right cabal gathering around her appear to be gearing up for hardball politics, although they lack legitimacy among Morales’s supporters and the many citizens who might have grown tired of Morales but view with alarm the actions and tone of the new caretaker government. The election may be technically wide open, but Bolivia’s far-right appears intent on seizing this opportunity to restore its influence.

  • By alienating the country’s Indigenous majority and exacerbating latent ethnic and class tensions, while signaling a commitment to reverse the gains made during the Morales years, Áñez is setting up conditions for a period of intense social conflict. If present trends continue, it is hard to imagine that in 90 days, and perhaps for a lengthy period thereafter, Bolivia won’t again experience more paroxysms comparable to what it has endured since October’s contested election.

December 6, 2019

* Robert Albro is the Research Associate Professor at CLALS.

Haiti: Is Anyone Listening?

By Fulton Armstrong

Protesters take to the streets in 2018 over the government's misuse of funds from PetroCaribe.

Protesters take to the streets in 2018 over the government’s misuse of funds from PetroCaribe– once again the subject of public anger/ Rony D’Haiti/ Wikimedia Commons/ https://commons.wikimedia.org/wiki/File:Manifestation_Haiti.jpg

As Haiti enters a fifth week of protests, President Jovenel Moïse’s support for U.S. policies on Venezuela and Taiwan appears to have secured him Washington’s backing, but his government is in tatters and his opponents don’t look likely to fold soon. For weeks, tens of thousands of protesters have held targeted marches in Port-au-Prince and provincial cities across the country demanding Moïse’s resignation. Violence by demonstrators and police has caused 17 deaths and hundreds of injuries, including the shooting of several journalists, according to human rights monitors. School closures have left up to 2 million children without class and the food supplements they receive there.

  • Protesters originally took to the streets to protest fuel shortages caused by government insolvency, but corruption – including the misappropriation of an estimated $2 billion dollars in profits from the sale of fuel under Venezuela’s previous PetroCaribe program – has become the overwhelming issue. Opposition leaders cite Superior Court audits implicating Moïse and other government officials past and present in schemes to personally profit from PetroCaribe security forces’ use of clubs and tear gas (and unconfirmed use of live ammunition) against demonstrators has further fueled anger in the streets. Haiti’s Catholic Bishops have blamed Moïse for the showdown, and their “Justice and Peace Commission” has publicly called for his resignation.
  • Moïse’s leadership has been unsteady throughout the crisis. He was out of public view entirely for one week, returning only in a pre-recorded radio address broadcast at 2:00 am on September 25 that called for calm and dangled the prospect of a “government of national unity.” Since his inauguration in January 2017, he has lived under the shadow of suspicious vote counts and has either failed to get Prime Ministers confirmed by Parliament or to build a good working relationship with them. The country hasn’t had a budget for two years, and a projected 20 percent inflation during 2019 and mere 1.5 percent growth further drive popular fury.

Moïse is clearly winning the competition for international support. However, he has gained U.S. silence about the evidence of his and senior allies’ involvement in PetroCaribe under Venezuelan Presidents Chávez and Maduro. During the UN General Assembly two weeks ago, U.S. Deputy Secretary of State John Sullivan met with Moïse’s Foreign Minister, Bocchit Edmond, with whom he “reaffirmed the strength of the U.S.-Haiti partnership and shared hope that Haiti’s political stakeholders would soon identify a path to forming a government that remains firmly rooted in democracy and the rule of law.”

  • The opposition’s calls for support have been much less successful. U.S. Senator Marco Rubio, a Republican widely seen as President Trump’s top advisor on hemispheric affairs, said it was not the “proper job of the United States to call on a democratically elected President [Moïse] to step down.” (Rubio had praised Moïse for supporting U.S. sanctions to remove Maduro and for preserving diplomatic relations with Taiwan.) The senior Democrat in the U.S. Congress, House Speaker Nancy Pelosi, last week also cited Moïse’s position on Maduro as important.
  • UN officials last week issued a “statement of concern,” noting that the protests were hindering aid deliveries and could lead to a humanitarian crisis. The UN remained neutral, however, and called on “everyone” to refrain from the use of violence. An unofficial OAS delegation to Haiti organized by individuals close to Senator Rubio in June told the opposition to “back off,” according to press reports, and reportedly told Moïse that he should “start governing” but it was “not going to ask him to resign.” Overall, however, the OAS has kept a very low profile, especially during the current crisis.

Haitian politicians have often turned to foreign friends and multilateral organizations to rescue them from crises – which they surely stir up themselves – but the international community, rather than addressing fundamental problems, often tries to paper over highly contested elections (like Moïse’s) and institutional weaknesses. The billions in PetroCaribe revenues that have vanished during the past two presidencies – including that of Moïse’s mentor, Michel Martelly – is strong circumstantial evidence that the opposition’s calls for investigation of the current administration have merit. But Moïse seems to be betting – correctly so far – that support for Washington’s priorities, such as condemning alleged corruption and undemocratic practices in other countries, buys him space to snub opponents’ demands. The UN and OAS just don’t seem to want to get more deeply involved, but the opposition, which has surprised many with the length and level of protests, doesn’t seem ready to give up.

October 11, 2019

Argentina: Market Meltdown Can Be Halted

By Arturo Porzecanski*

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

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

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

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

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

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

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

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

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

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

August, 22, 2019

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

Nicaragua: Can Ortega Circumvent the Talks?

By Fulton Armstrong

Presidente de El Salvador participa en Cumbre SICA-Nicaragua.

President of Nicaragua Daniel Ortega / https://www.flickr.com/photos/fotospresidencia_sv/30962278823 / Flickr / Creative Commons

While the Nicaraguan government continues to stonewall in negotiations with its broad-based opposition, it is taking a series of unilateral actions that seem intended to preempt the talks – and leave the opposition behind. President Daniel Ortega and his team have flatly rejected key opposition demands, including early elections to replace him (instead of waiting for general elections in 2021) and the immediate, unconditional release of hundreds of political prisoners. They have, however, issued declarations pledging several actions on their own terms.

  • Last week, the Foreign Minister said the government “is complying, and will continue to comply, with all of [its] commitments toward understanding and peace.” Calling itself the “Government of Reconciliation and National Unity,” Managua has issued a “work program” that includes the “definitive release” by June 18 of 100-plus more political prisoners and several hundred others under house arrest. It pledged to work toward a “culture of peace” and “cooperate” with the OAS on reforms of the Supreme Electoral Tribunal to prepare for the 2021 elections. It promised legislation that supposedly will help victims of government violence during the April 2018 protests, although apparently with conditions that offend opposition leaders.

The opposition Civic Alliance for Justice and Democracy, which left the negotiating table last week, continues to enjoy widespread support, but press reports suggest mobilization fatigue is undermining its effectiveness and unity. Sympathetic media judged a hastily called national strike last week – protesting government intransigence in the talks – as effective, but they hinted at reduced enthusiasm. The Superior Council of Private Business (COSEP), a leading opposition force, recently released its assessment that the economy is “in a free fall,” with plummeting domestic and foreign investment. COSEP analysts note that the loss of 100,000 private-sector jobs and a similar number of informal-sector jobs is taking a heavy toll on society. The Catholic Church, which remains consistently critical of the Ortega government, has had a lower political profile since Pope Francis reassigned Managua Auxiliary Bishop Silvio Báez, its most outspoken critic of the government, to a Vatican job.

  • The opposition has also been stung by criticism from OAS Secretary General Luis Almagro, who’s led diplomatic pressure on Ortega to loosen up. In April, Almagro accused both sides in the negotiations of “lying” but listed untruths he attributed specifically to the opposition, claiming that “lying is the most antidemocratic practice.” Although the OAS last week approved a resolution, drafted by Canada with Almagro’s support, calling for Ortega to take concrete steps on human rights and election preparations, some 14 small opposition groups the day after accused the Secretary General of a “double standard” – allegedly being lenient toward Ortega but tough of Venezuelan President Maduro.

Government repression and intransigence in the negotiations are the primary causes of the crisis, but the opposition is, once again, showing a lack of focus and discipline. Ortega’s unilateral moves on political prisoners and electoral reform, after the opposition left the negotiation, suggest an effort to render the opposition and negotiation process irrelevant. By making the release of political prisoners its top priority in recent rounds of talks, opponents have given Ortega an area in which concrete and relatively cost-free steps can give the government momentum. Last week’s strike may have done more to show opponents’ weakness than strength inside Nicaragua, and Almagro’s swipe at “liars” – while possibly a reflection of his own personality and personal beliefs – cannot be helping outside. Some of the “liars” that have irritated him may indeed be mere troublemakers or government shills, but any dilution of international interest will be a victory for the government. The Trump Administration, which has pledged regime change in Nicaragua as well as Venezuela and Cuba, has been relatively quiet. Diplomats at the OAS are working hard to muster the four additional votes to reach the 24 necessary to invoke the Democratic Charter against Nicaragua, but Ortega seems to think he can end-run a negotiated settlement and undermine his opponents at home and abroad.

May 29, 2019

Brazil: Bolsonaro Targeting Political Participation

By Paulo Castro*

President Jair Bolsonaro of Brazil looking pensive

Jair Bolsonaro / Fabio Rodrigues Pozzebom – Agência Brasil / https://flickr.com/photos/129729681@N06/35164638165/ Wikimedia Commons

Brazilian President Jair Bolsonaro – unwilling or unable to engage in the coalition-building necessary to pass legislation – has focused an important part of his first 100 days in office on social policies that he can dominate with executive power while reducing citizen participation in policy formation. Elected in one of the most polarized elections in Brazilian history, Bolsonaro ran a campaign focused on fighting corruption and implementing a market-oriented economic agenda that would lead to GDP growth, with pension reform as its main pillar. His first months have been far from a “honeymoon” with Congress; a wide array of problems add up to a legislative inertia as seldom seen in contemporary Brazil.

  • Lacking a strong base in the House and Senate – and facing dissidence even within his own Partido Social Liberal – Bolsonaro has relied on the risky strategy of ignoring the nature of the Brazilian political system, which includes building support for his agenda in Congress, and is focusing instead on attacking adversaries and what he calls the “ideological agenda” of the Workers Party (PT). Meanwhile, key ministries have yet to announce even general policy goals. The Ministry of Education, which has the second largest budget in the federal government and is responsible for one of the most deficient areas of the country, has been largely silent even though reform of the early education system was one of Bolsonaro’s main campaign promises. The President has issued executive measures, such as the bureaucracy reduction decree this week to help business owners and start-ups, but has introduced no relevant legislative agenda.

Shifting social issues is the one area in which the government is running at full throttle. Social accountability, gender equality, and broader human rights initiatives have experienced budget cuts. Because many PT-era policies were implemented by presidential decree or ministerial order, the Bolsonaro administration can cancel or alter them without Legislative Branch approval. (Many changes in the economic area require amending the Constitution, with a three-fifths majority of both houses of Congress.) Far from the prying eyes of the press and markets, small changes in the government processes threaten to increase the country’s democratic deficit.

  • An executive order signed by Bolsonaro abolished more than 600 civil society participation councils that promoted transparency and accountability by bringing civil society into policy discussions. Bolsonaro has eliminated the National Environment Council, the National Council of People with Disabilities, National Council for the Promotion of LGBT Rights, National Commission for the Eradication of Slave Labor, and National Commission for the Eradication of Child Labor, among others. The Ministry of Women, Family and Human Rights, headed by conservative religious leader Damares Alves, has announced it will limit the number of requests analyzed by its Amnesty Committee, created in 2002 to promote remedial actions for victims of the military dictatorship in Brazil.
  • On the environmental front, conflict between farmers and indigenous people has escalated since Bolsonaro limited the powers of the Fundação Nacional do Índio (FUNAI). Along with the National Forest Service, he transferred FUNAIS’s responsibility for the demarcation of new indigenous lands to the Ministry of Agriculture, which is headed by Congresswoman Tereza Cristina, a former leader in agribusiness.

Bolsonaro is trying to appear confident, but the consequences of his inaction on big-picture items such as pension reform – which will affect economic performance and public perceptions of his effectiveness – will reach a point at which his emphasis on social, cultural, and symbolic matters will not be sufficient to maintain his position. By deinstitutionalizing democratic participation on these important social issues, Bolsonaro is further reducing the country’s ability to take up tough issues, such as the priority reforms awaiting Executive and Legislative Branch attention. When it comes to education and health policies, civil society organizations and union representatives have important roles in mobilizing the interests of beneficiaries. While it is natural that opposing governments have opposing political views, Bolsonaro’s actions don’t only reflect policy shifts; they amount to a substantive reduction in accountability and government responsiveness, closing important doors that enable citizens to influence public policy and make political processes more inclusive.

May 3, 2019

* Paulo Castro is Ph.D. Candidate in Political Science at the University of Brasilia and professor at the Brasilia Institute for Public Law. He has worked as an advisor and analyst in the Ministry of Justice and private sector organizations. He was a CLALS Research Fellow.