Latin America Risk Report - 14 May 2020
The bodies pile up in Brazil and Mexico as coronavirus hits hard
In this edition:
Region - The bodies pile up in Brazil and Mexico
An extra-long reading list of links
This week paying subscribers received analysis on food prices and the potential for social unrest in the region as well as comments on AMLO’s leadership in Mexico.
As of this morning, I’ve dropped the paywall on the food price article that was published on Monday, so click that link to read it. There is also a good article in the WSJ that I recommend about food price increases elsewhere in the world. While food prices have decreased globally, the current logistical challenges and border closures mean that food isn't moving as freely as it used to. This is leading to shortages and price increases in some locations while food surpluses and price crashes are occurring in others. Meanwhile lost income, particularly by the poorest sectors of society, means more people are experiencing food insecurity even in places where food prices have not moved much.
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Region - The bodies pile up in Brazil and Mexico
This week, the NYT highlighted the growth of the coronavirus pandemic in Latin America. Several cities around the region including Lima and Guayaquil have become hotspots in terms of cases and deaths. The region’s largest countries are also those of highest concern.
Both Brazil and Mexico have seen large increases in coronavirus cases and deaths this week. Statistically, Brazil and Mexico should see the largest numbers of deaths in Latin America because they are the biggest countries in terms of population. However, the health disaster that is occurring in both countries has less to do with the size of the countries than with their failure of national leadership.
Graphic above from Our World in Data
Some analysts will point to the per capita statistics in Mexico and Brazil and underplay how bad the coronavirus situation is in Latin America’s two largest countries. The problem with that methodology at this moment is that the cases and deaths continue to accelerate in both countries. In a situation of uncontained spread, higher populations and lower per capita rates today mean more room to grow over the next four to eight weeks.
As many have written, presidential delays and the downplaying of the coronavirus threat have meant that policies to stop the spread were delayed and not coordinated at a national level. Both countries have been slow to get testing conducted. Both countries have seen deaths misclassified and reports of deaths being miscounted as bodies are buried or cremated.
While every country has undercounting, there appears to be systemic undercounting in both countries. One month ago, I wrote:
Unlike many other issues, this is one where the data being wrong can’t be ignored for too long. If the number of confirmed cases is significantly wrong due to error or malfeasance, we’ll know soon enough. As has occurred in Ecuador, the hospital rooms will overflow and the bodies of the dead who never made it to the hospital will pile up in the streets.
In spite of efforts by the presidents of Mexico and Brazil to gloss over deaths or limit media coverage of the scale of tragedy, journalists are managing to get the story out. The NYT and WSJ both reported on Mexico’s undercounted deaths this past week.
The next hotspots: Venezuela and the Northern Triangle
While Mexico and Brazil will continue to worsen in the coming weeks, Latin America is also likely to see a spike in cases in countries where reported numbers have been low thus far. Venezuela is likely to see an explosion of cases as the Maduro regime remains more focused on attacking its critics than promoting public health.
Several countries in Central America that have managed to maintain remarkably low numbers in the past few months are also at risk of seeing a sudden spike in the coming weeks. Nicaragua, which has been covering up the numbers of dead, could see its hospitals overwhelmed. All three countries in the Northern Triangle, partially due to deportations by the Trump administration, are at risk for an increase in cases as well.
The virus is contagious enough that there may be increases in countries that have previously limited the numbers of cases or deaths. Argentina, Chile and Peru have all seen localized increases, particularly in their capital cities, that are troubling. The positive news for those countries is that their governments are taking the recent increases seriously and attempting to stop them from worsening.
Corruption Corner
Brazil - In a video that has been presented as evidence of corruption, President Jair Bolsonaro says he wants to change the police chief in Rio de Janeiro in order to protect his family from corruption allegations.
Honduras - InSight Crime highlighted a report from Expediente Publico about the links between Mauricio Oliva Herrera, the head of Honduras’s Congress, and money laundering by the Cachiros. Oliva Herrera, a top politician in the ruling National Party, acquired properties in Tegucigalpa linked to a company known to launder money for the Honduran trafficking organization. The accusations against an ally add to the challenges for President Hernandez, who has also been accused of drug trafficking.
US, Venezuela - In 2017, the Maduro regime used PDVSA to hire David Rivera, a former congressman and Republican from Florida, to provide “strategic consulting services.” PDV, a foreign subsidiary of PDVSA now controlled by the Guaido government, is suing Rivera’s consulting firm for failing to provide the services promised. The report adds to concerns of how corrupt individuals connected to the Maduro regime hired people close to the Trump administration including Rudy Giuliani in order to lobby for more favorable policies.
Reading List
New Yorker - The Trump Administration’s Deportation Policy Is Spreading the Coronavirus
Foreign Policy - In the Coronavirus Era, Trump’s ‘America First’ Means ‘Latin America Alone’
InSight Crime - Six Ways Coronavirus is Impacting Organized Crime in the Americas
Carnegie-Tsinghua Center for Global Policy - China’s Regional Engagement Goals in Latin America
Americas Quarterly - Latin America’s Plans to Tax the Rich
El Faro - Latin America’s Next Generation of Authoritarians is Using COVID-19 to Consolidate Power
Bloomberg - Workers at Latin America’s Biggest Port Start to Fall Ill
Financial Times - Sergio Moro, the Brazilian ‘Judge Dread’ who brings down presidents
The Atlantic - Brazil’s Pandemic Is Just Beginning
Washington Post - As Brazil’s challenges multiply, Bolsonaro’s fans call for a military takeover
Reuters - Brazil launches military operations to protect Amazon rainforest
Reuters - Mexico green lights auto industry restart, heeding U.S. calls
InSight Crime - Coronavirus and Crime – Lethal Combo for Mexico’s Riviera Maya
International Crisis Group - More than Cartels: Counting Mexico’s Crime Rings
NYT - A Philosopher-Banker Who’s Shaking Up a Nation (Suriname)
Washington Post - La elección de Joe Biden ayudaría a que regrese la democracia a Venezuela
Bloomberg - Maduro to Tap Sanctioned Dealmaker to Ship Gold to Iran
Foreign Affairs - A Perfect Storm for Venezuela
The Atlantic - Venezuela’s Coronavirus Crisis Is Different
Newsweek - Our Venezuela strategy is failing. What we need is a Cuba strategy
La Silla Vacía - Venezuela: El juego de cartas bajo la mesa
C4ADS - Poison Pathways: Peru's Illicit Trade in Mercury
NYT - Editorial: What Colombia Did With American Spy Tools
Americas Quarterly - Zoom Is Making Colombia’s Congress Crazy, Too.
El Tiempo - Imagen positiva del presidente Iván Duque está en 62 %
Washington Post - In a time of global crisis, should the world cancel poor countries’ debts?
Politico - Experts Knew a Pandemic Was Coming. Here’s What They’re Worried About Next.
RAND - The Future of Warfare in 2030
Economist - Geopolitics and technology threaten America’s financial dominance
Thanks for reading
Day 56 of quarantine here in Bogota. It’s the new normal. Please feel free to email me with your comments, questions and suggestions.