In this edition:
AMLO under pressure
Macri Implements Price Controls
Venezuela Update
Paying subscribers this week received an outlook on regional cross-border tensions in Central America. Bukele's inauguration, Guatemala's election and Nicaragua's political crisis are creating new divisions the region.
AMLO under pressure
Homicides & statistics: At one of his daily news conferences, President Lopez Obrador faced criticisms from journalist Jorge Ramos over his handling of homicide statistics. While AMLO attempted to defend his claims that homicides had declined, Ramos continued to press on the statistics showing increasing homicides during his opening months in office. As many analysts have noted, AMLO’s use of preliminary statistics have allowed him to falsely claim success.
Military & National Guard: Facing concerns about security, AMLO named General Rodriguez as the head of the National Guard. This naming of an Army general continues the president’s trend of relying on the military in spite of campaign promises to reduce the military role in public security and efforts by many in Congress to demilitarize the new National Guard institution.
Education reform & institutional rule: AMLO issued a decree attempting to undo the educational reform put in place under President Peña Nieto. Education reform was a constitutional amendment process that cannot be undone by decree. This provided another piece of evidence for those portraying AMLO as threatening Mexico’s institutions.
AMLO’s communications strategy: AMLO remains popular, but the above issues chip away at the president’s attempts to control the media narrative. At the same time, the president has tools and methods of his own to shape the communications clash. AMLO retains a swarm of Twitter users; some real human fans and some “Pejebots” who attack those who dare criticize the president. In the hours after Ramos questioned AMLO, numerous Twitter users targeted him in both Spanish and English, going after his credibility and raising past controversies.
Macri Implements Price Controls
President Mauricio Macri announced six months of price controls on 64 “essential items”, ranging from the expected (milk, cooking oil, flour) to the very Argentine (Mate, Malbec and Quilmes beer). Macri also said the government would not raise prices on public utilities including electricity and gas prices, which were a leading concern for voters I spoke with in Argentina earlier this year.
It’s an election year gamble. The six month price freeze will conveniently lower inflation and make life more affordable for voters as the campaign season heats up. It’s a short enough freeze that the benefits will be near immediate while the expected negative effects of these sorts of policies (shortages, market distortions, government budget deficits) won’t be felt until well after the final vote is cast. Argentina should have enough foreign reserves to defend the peso within its current currency band in the process.
Is it too nakedly political? Won’t voters who hate Cristina Kirchner hate the fact Macri is implementing Kirchner-esque policies? Won’t voters who prefer a more interventionist government see this as a political stunt that will revert to austerity if and when the pro-market Macri is reelected? No, no and no.
While there will be plenty of commentary in Argentina’s media over the politics of Macri’s economic policies, most voters care more about how their family is doing economically the day of the election than the grand political philosophy behind it. If these policies successfully freeze prices and make things more affordable, the voters will reward the president.
The fact Macri can do this is one more example of incumbent advantage in Latin America. The ability to move state policies and spending in an election year plays a critical role in why presidents are almost always favored to win reelection.
Venezuela update
Guaido had several diplomatic victories. The OAS accepted Guaido’s representative. The Lima Group issued a statement that harshly condemned foreign interference within Venezuela, a nod to Chinese, Russian and Iranian efforts to prop up Maduro. There was some irony in the fact the “Hands off Venezuela” message long used by the Maduro propaganda machine to oppose US intervention has become a rallying cry for Maduro’s opponents who oppose the foreign powers helping him.
China, in particular, appeared concerned by the statement, believing that their investments elsewhere in the hemisphere may face risk due to their backing of Maduro. Meanwhile, an op-ed by Guaido published in English on the Bloomberg website encouraged China to switch their recognition.
There was continued high turnout at Guaido rallies around the country. He announced his next large “cabildo” to be held on the 19th, Good Friday. This means that those protecting Maduro will not be able to take a vacation for Semana Santa, a small but notable way Guaido can extract a cost from those who benefit from the regime.
The first shipment of Red Cross aid was delivered into Venezuela without incident. Both sides in the ongoing political dispute attempted to take credit for the aid delivery. Each suggested the aid delivery program would weaken their opponent. The Red Cross, meanwhile, worked hard to remain neutral inside of the heavily politicized situation.
Corruption Corner
Peru - Former President Alan Garcia committed suicide when authorities came to detain him on charges related to the Odebrecht corruption scandal. Even prior to Garcia’s death, there was already controversy over whether prosecutors were being too aggressive in targeting elderly former politicians. This is not going to change the public’s demands for anti-corruption action, but it may change the tactics used by the state to prosecute corrupt individuals.
Venezuela - A Russian media outlet revealed there is an ongoing investigation into US$16 million lost during the building of a firearms facility in Venezuela. This news follows a recent Reuters report suggesting Rosneft lost millions to corruption while engaging in joint ventures.
Guatemala - The DEA arrested Guatemalan presidential candidate Mario Estrada while he was campaigning in Miami. According to the indictment, Estrada is accused of taking over $10 million from the Sinaloa Cartel in campaign financing in exchange for agreeing to assist the group in trafficking cocaine through Central America if he won the presidency. In spite of the campaign funding, Estrada was polling below 5%.
Reading list
The Outline - Meth, Murder and Malandros in Guadalajara
Time - 'Venezuelans Are Starving for Information.' The Battle to Get News in a Country in Chaos
Bloomberg - China’s Ambitious Train Plan Crawls Through Chile’s Bureaucracy
Caracas Chronicles - What Do We Talk About When We Talk About U.S. Sanctions in Venezuela
Der Spiegel / InfoBAE - Ruta del oro en Venezuela: cómo y por qué llega el metal a Uganda
Americas Quarterly - Reducing Homicide in Brazil: Insights Into What Works
Thanks for reading
Hope everyone is having a good Semana Santa.