Latin America Risk Report - 12 March 2020
Updates on Coronavirus and protests in Mexico
In this edition:
Region - Coronavirus update
Ecuador - New economic measures as country faces fiscal challenges
Mexico - Protests by women were large and influential
Venezuela - Protests signal a continued stalemate
Paying subscribers this week received an update on Guyana’s post-election political crisis (update from AP here) and an analysis of the new sanctions on Nicaragua’s police force.
Region - Coronavirus update
This long article on Coronavirus spread and why swift measures are necessary has lots of graphs and charts. The good news is that many Latin American countries are taking this seriously and acting swiftly.
Cases in Latin America remain relatively low, though recent increases in Brazil are a cause for concern. The region is lucky in that coronavirus has been slow to arrive, meaning Latin America has been given a buffer of time that much of the world has not received. Governments and societies have an opportunity to prepare, including giving a boost to healthcare systems that are underfunded. When coronavirus reaches Latin America and spreads, it will provide some real evidence for which governments made adequate preparations and which wasted time during these months.
Some countries are implementing travel bans, quarantines and social distancing measures (at times under questionable legal authority). Council of the Americas has a running list of many of the measures that have been taken across the region. The number of countries with travel bans and quarantines is likely to expand rapidly in the coming weeks. For anyone traveling to or from Latin America, being aware of these quarantines and the potential implications is important.
In addition, numerous public events are being cancelled. Many schools and universities are considering cancellation of classes. Those measures are likely to expand in the coming weeks.
Above
Above: Map from AS-COA on the number of reported cases in Latin America
Questions have been raised about the numbers of cases in Mexico in particular. The government has only reported eight confirmed cases as of Wednesday. Some analysts in Mexico doubted whether the Lopez Obrador administration has been as transparent as possible and said that given the ties between the US and Mexico, the number of cases is almost certainly higher.
Venezuela has yet to report a case and has limited capacity to test. Numerous analysts fear that of Latin American countries, the Venezuelan health system will be particularly vulnerable to a pandemic virus given that hospitals already lack many supplies for day to day needs.
In Brazil, President Bolsonaro’s press minister has tested positive for Covid-19 and the president is now under observation (his health being poor after the assassination attempt during the campaign). Both met with Trump last weekend in the United States.
For the moment, the economic impact of coronavirus remains much worse than the health impact. The combination of coronavirus-induced market panic and the drop in oil prices due to the Saudi-Russia feud took a huge toll on Latin American stocks, bonds and currencies this week.
Ecuador - New economic measures as country faces fiscal challenges
President Moreno announced new economic measures intended to raise over US$2 billion and allow the country to pay all its debts this year. Ecuador’s Congress will be asked to approve some of the reforms. Given their relative unpopularity and the current jockeying for position over the 2021 presidential election, that could prove difficult.
Prior to Tuesday’s announcement, there were lines at gasoline stations around the country as people expected a renewed cut in fuel subsidies. While the Moreno government has signalled they will likely cut the subsidies at some point in the near future, they did not make the announcement this week. The Conaie indigenous group had warned they were considering protests before Moreno made his announcement, perhaps influencing his decision.
The risk of Ecuador defaulting on its foreign debt has increased in recent weeks with the fall in oil prices and the failure of the government to get its financial situation in order.
Ecuador’s policies here are a great example of the trap many Latin American countries find themselves in (even if their use of the US dollar makes their situation different). Pressure from external debt and long term fiscal challenges are forcing them to cut budgets and raise taxes right when the global economy is taking a hit and governments should be boosting spending to give local economies a boost.
Mexico - Protests by women were large and influential
The women’s protests on Sunday were huge around the hemisphere, but particularly in Mexico. Images of public spaces filled with women demonstrated the level of anger at femicides and the AMLO government’s lack of response. AMLO’s attempts to dismiss the protests as some sort of politicized conspiracy by conservatives further inflamed the issue and likely drew more people to the streets. While there were some minor incidents of violence and vandalism, they were relatively limited given the large number of peaceful protesters.
Just as striking on Monday were the images of half empty offices, train cars and classrooms as many women and girls stayed home as a form of protest.
There is no immediate followup planned by the protesters. Unlike Chile and Colombia, where women’s marches are expected to be followed by additional political protests later this month, there are not currently plans for Mexico’s protests to build in the coming weeks.
The message to the Lopez Obrador government should be loud and clear. Women are disillusioned with his government’s failure to deliver security results, they dislike the president’s dismissal of their concerns, and they have the ability to mobilize in large numbers.
AMLO, however, said in the days after the protests that he would not change his policies. The president continued to accuse the protesters of having other motives including attempting to undermine his government.
Venezuela - Protests signal a continued stalemate
President Juan Guaido once again pulled off a march large enough to demonstrate his continued influence but too small to make a dent in the Maduro regime’s stability.
Three politicians who support Guaido were unjustly detained during the protest. Two were released after several hours while one was held for over 24 hours. The limited international reaction to that news demonstrates how illegal detentions of peaceful protesters and opposition politicians has become normalized under Maduro.
The limited international reaction can also be blamed on the fact the world is busy with the implications of coronavirus. Guaido and his supporters must contend with the fact that Venezuelan democracy is now a less pressing issue for much of the international community.
Corruption Corner
Mexico, Venezuela - Reuters reported this week that two Mexican companies - Libre Abordo and Schlager Business Group - took on shipments of Venezuelan oil in exchange for food. Neither company has significant experience in conducting oil trades or shipping, raising questions about who negotiated the deal and what the terms were. One of the companies claimed that their US law firm indicated that it would not violate sanctions as no money changed hands.
Reading List
NYT - Conflicts Over Indigenous Land Grow More Violent in Central America
WOLA - Beyond the Narcostate Narrative: What U.S. Drug Trade Monitoring Data Says About Venezuela
International Crisis Group - Imagining a Resolution of Venezuela’s Crisis
Reuters - Master, president, god? On the trail of Peru's mysterious new political power broker
Charged Affairs - Choosing a Captain in the Storm (on the OAS Secretary General campaign)
Washington Post - Yes, Bolivia’s 2019 election was problematic. Here’s why.
Washington Post - As the U.S.-backed government in Bolivia unleashes a wave of political persecution, the Trump administration remains silent
HRW - Colombia: Abuses Amid Massive Demonstrations
NYT - Colombia Is Dealing With a Terrifying Refugee Crisis. Will Wealthy Nations Step Up to Help?
Miami Herald - After another day of violent protests, Haiti to allow police to unionize
Washington Post - Trump’s pushback against China pays off with an important win
AP - The new mask: Wave of global revolt replaced by virus fear
AP - Inside massive DEA raid targeting drug cartel
Reuters - Brazil's gangs emerge as major cocaine exporters, flooding Europe with white powder
NYT - Russia Trying to Stoke U.S. Racial Tensions Before Election, Officials Say
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