Latin America Risk Report, 11 December 2018
Maduro vs 2019; AMLO vs the CJNG; Bukele vs El Salvador's traditional parties
In this issue:
Maduro wins a few small battles prior to a tense January 2019
A grenade in Guadalajara highlights AMLO’s challenges in that city
Bukele leads the polls in El Salvador
Plus links to additional news and analysis.
Nicolas Maduro survived 2018. The fight for 2019 has already begun.
Venezuela’s de facto government obtained a series of small domestic and foreign wins in recent weeks, attempting to legitimize themselves before the official start date of Maduro’s disputed new term on 10 January.
The government overwhelmingly won the municipal elections held last Sunday. As always, government workers were forced to go to the polls and the poor were monitored and may see reduced subsidies if they did not vote. Still, with most of the opposition banned from running and boycotting the election, only 27% of voters turned out. Instead of covering up the low turnout, the government accepted the election as a victory.
The lack of opposition participation and organization strengthened a belief among government elites that they can win a constitutional referendum without manipulating vote counts.
Turkish President Erdogan visited Caracas, a rare visit by a foreign leader, and promised to assist in overcoming the sanctions. Turkey has been a key market for moving gold out of Venezuela.
Maduro visited Russia, where he claimed to receive promises for US$6 billion in investments. Venezuela’s military also claimed they would be receiving more equipment from Russia. Sources familiar with the Russia discussions downplayed the promises, suggesting Maduro was exaggerating or referring to old money. Russia stressed they are providing military training and advice, not equipment.
Russian military planes are visiting Venezuela. Iran is sending naval vessels to Venezuela for exercises. Maduro intends both moves as a way of demonstrating international support and provoking the US into a reaction that he can use domestically.
The US response to Russian and Iranian military has been to contrast it with the US military’s deployment of the USNS Comfort, a hospital ship that has been treating people around Latin America including Venezuelan refugees.
January is looking like a key inflection moment for Maduro and his opponents
Maduro’s opponents disagree whether to name an interim president and who should lead the National Assembly. They also disagree as to the specific actions they should request from the international community.
Around two dozen foreign governments have announced that they will refuse to recognize Maduro as Venezuela’s president after 10 January. Some will withdraw ambassadors or kick out Venezuela’s ambassador to their country.
Analysis: If Maduro can survive January, he’ll be in a strengthened position.
“Strengthened” is relative to the fact the country still faces hyperinflation, economic crisis, declining oil production, malnutrition, a lack of medical care, a repressive government and significant violent crime.
However, surviving January will entrench Maduro in power and make him harder to remove by both his traditional opponents and Chavistas who want new leadership.
AMLO vs the CJNG
Hours before the inauguration of Andres Manuel Lopez Obrador, a grenade attack against the US Consulate in Guadalajara left a 16 inch hole in an exterior wall. While nobody was injured, the rare attack against a US facility drew significant attention to the challenge that the new administration faces in the state of Jalisco.
A few days after the attack, the CJNG posted five banners around the city disclaiming responsibility and saying that the responsible parties were attempting to sully their image. The banners were further evidence that criminal groups in Mexico fear the attention of the US government. This is a group that boldly executes its rivals and local police officers and once shot down a government helicopter, but the one thing it does not want is to be targeted by the US government.
While important to the US, the attack was a minor event in the city’s rising violence. Local media claim that Jalisco was the most violent state during the first week of AMLO’s government. Just on Sunday, the city saw at least ten executions and eight disappearances in less than 24 hours. Much of that violence is driven by the CJNG attempts to consolidate control over the city and surrounding suburbs.
The violent expansion of the CJNG is one of the toughest on the new president’s short term list of security challenges. AMLO needs to halt the expansion of the group into other states and he needs to take them on directly in their home territory of Guadalajara. The new president needs to do so without strengthening the CJNG rivals or creating the dynamics where the groups increase their fights against each other.
The very first significant security action taken by the Lopez Obrador administration was to announce that his administration will target the finances and money laundering fronts of the CJNG. Analysts viewed the move as symbolically important. It was a strategic targeting of finances instead of a military operation, suggesting a different approach though not a comprehensive one.
The banners disclaiming responsibility for the consulate attack were not the first directed at the new government. Prior to his inauguration, the CJNG sent a message to AMLO in late November (in the form of a banner hanging over a highway). In that message, the CJNG called on AMLO to investigate the governor or Guerrero for his links to organized crime. That banner and those that followed in Guadalajara last week demonstrate that the security challenge includes a strategic communications battle that the government must also fight and win.
POLL NUMBERS!!! El Salvador Presidential Preview
Former San Salvador Mayor Nayib Bukele has an almost 20 point lead in the polls for the February/March 2019 presidential elections in El Salvador. Likely to win, his personalistic brand and social media appeal will face off against the country’s traditional institutions and parties.
Paying subscribers to the newsletter can access Hxagon’s El Salvador Election Preview here.
Corruption Corner
Peru - Three anti-corruption initiatives received widespread public support in a referendum on Sunday. The passed referendums will:
Reform the council that selects judges
Reform the campaign finance system
Limit politicians to a single term in office
The referendum was a win for President Vizcarra, who has won public approval for supporting the fight against corruption. It was a loss for Vizcarra’s opponents in Congress who have already been hit hard by anti-corruption investigations.
Colombia - El Tiempo interviews Ivan Velasquez, the head of the CICIG who was forced out of the country by Guatemala President Morales. Most of the interview is about Guatemala and the links between fighting corruption and improving human rights, but he also addresses his native country of Colombia and the potential for greater anti-corruption investigations there. In the interview, Velasquez criticizes Colombia for allowing political pressure to slow down the Odebrecht investigation. The Financial Times also covered the political pressure that has slowed the corruption investigations in Colombia.
Reading List
Michael Shifter, Inter-American Dialogue - George HW Bush and Latin America: An Overlooked Legacy
NYT - A Conflicted War: MS-13, Trump and America’s Stake in El Salvador’s Security
The Economist - Sebastián Piñera tries to put Chile back on track
Dany Bahar and Douglas Barrios, Brookings - How many more migrants and refugees can we expect out of Venezuela?
WSJ - In Latin America, Awash in Crime, Citizens Impose Their Own Brutal Justice
WSJ - Banks, a Food Wholesaler—Even a Condom Factory: Brazil’s Government Is Big Business
The Guardian - 'We’re going to kill you': Nicaragua's brutal crackdown on press freedom
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