Latin America Risk Report - 2 January 2020

Chile's population supports protests and disapproves of Piñera

In this edition:

  • Chile - Population supports protests and disapproves of Piñera

  • Nicaragua - What happened to the Nicaragua Canal?

  • Venezuela - Military rebellion near Brazil border leads to cross border tensions

  • Venezuela - Thoughts on sanctions


Chile - Population supports protests and disapproves of Piñera

In its final poll of the year, Cadem reported President Piñera had 11% approval and 80% disapproval.

The trend over Piñera’s time in office shows a rather sudden approval drop when the protests began. While low presidential approval ratings are a signal that protests may occur, it’s also the case that protests and a poor response to those protests drive approval lower.

In addition to Piñera’s low approval rating, 94% believe that the pension system in the country needs to be reformed. That’s significantly up since the beginning of the protests. The protests and the efforts by protesters to inform people about the pension system have made it more likely pension reform will be near the top of the agenda this year during the constitutional rewriting process.

As part of pushing for pension reform, 64% believe that the protests should continue. That is up in recent weeks and has not dropped below 50% since the protests began. A majority of Chileans support these protests and believe they are necessary to hold politicians accountable. 

Nicaragua - What happened to the Nicaragua Canal?

On Monday I published an update on Nicaragua’s political situation. The key point is that 2020 is likely to look similar to 2019, with the Ortega regime using violent repression to shut down its political opponents. After publication, the regime announced it would free several dozen political prisoners. However, those prisoners were not really “freed.” Instead, they were moved from prison to house arrest. At that point, at least one of the political prisoners had their house vandalized by a pro-Sandinista mob. It was another example of Ortega and Murillo trying to have it both ways, getting positive international coverage for freeing prisoners while continuing to repress their opponents.

Following publication on Monday, I also received a question: “What happened to the Nicaragua Canal?”

The canal project in the format announced in 2014 is essentially dead.

When the project was originally announced, 22 December 2019 was supposed to be the day the Nicaragua Canal opened. Other than some placement markers and small pre-construction projects (clearing of land in a few places), there still isn’t real progress towards a waterway connecting the Pacific to the Caribbean in Nicaragua. 

As of July 2019, the financing for the project was not provided. HKND, the company that was supposed to finance and build the canal, no longer has the funds to pull it off. The lack of financing at the five year point should have caused the canal project to dissolve, but the Ortega regime has not taken the steps to officially end the project.

At some point decades from now, perhaps there will be a Nicaragua Canal and perhaps China will fund a portion of it. However, it’s not happening under Ortega.

The canal under Ortega was never a serious proposal. The constitutional changes that authorized the canal provided political and economic control of much of the Canal zone to the Ortega-Murillo family. They also authorized land seizures and other infrastructure projects that still may move forward.

Venezuela - Military rebellion near Brazil border leads to cross border tensions

A group of soldiers working with members of the Pemon indigenous community rebelled in southern Venezuelan and briefly took over Fuerte de Luepa, escaping with weapons. The Maduro regime says they arrested 11 people involved in the rebellion and recovered all the weapons. Without evidence, Maduro also blamed the governments of Brazil, Colombia and Peru for backing the effort. Prior to the rebellion, there were reports of both Russian military/mercenary presence as well as illegal armed groups in the area, both of which reportedly upset some local military commanders. 

Five Venezuelan soldiers deserted to Brazil and requested asylum. Venezuela claims the soldiers were part of the mutiny and has demanded their return for trial. The issue of the military deserters is increasing tensions between Bolsonaro and Maduro.

Venezuela - Thoughts on Sanctions

US sanctions on Venezuela are a national debate topic this January for high school students. As there appears to be significant interest, I’m planning to write down some thoughts on sanctions over the coming weeks. For those interested, I published part one on Venezuela sanctions at my blog. I’ll provide links to any other parts I publish in next Thursday’s newsletter.

Corruption Corner

Brazil - Brazilian authorities indicted former President Lula da Silva on charges that Odebrecht paid over one million dollars to the Lula Institute as part of bribing the former president to receive government contracts. Additionally, Paulo Okamotto, the head of the Lula Institute, and former Finance Minister Antonio Palocci were also charged. Prosecutors based their case on the fact that the donations came from a fund the Odebrecht regularly used to bribe politicians. Lula and his institute claim the donations to the institute were registered and legal.

Argentina - A new six-part series on Netflix called “The prosecutor, the president and the spy” speculates that Iranian spies may have contributed to the death of Alberto Nisman as he investigated whether the Cristina Fernandez de Kirchner government covered up Iran’s role in the 1994 AMIA bombing. The prosecutor’s death in January 2015 was ruled a suicide by the Fernandez de Kirchner government. The series includes an interview from 2017 with Alberto Fernandez in which he says he does not believe Nisman committed suicide. Alberto Fernandez is now president and CFK is his vice president. Meanwhile, Clarin reports that an investigation by the Gendarmería Nacional Argentina is likely to rule Nisman’s death a homicide.

Venezuela, US - The Washington Post reported that Rudy Giuliani spoke with Nicolas Maduro in late 2018 as part of outreach on behalf of private sector clients. One columnist speculates that Giuliani’s conversation may have violated the Logan Act. Meanwhile, AP reports that the US Treasury Department is reviewing Erik Prince’s recent trip to Caracas to meet with Delcy Rodriguez as the meeting may have violated US sanctions.


Reading List

Bloomberg - Green Shoots Lurk in Latin America’s Lost Decade

LA Times - Does Trump support democracy in Latin America? Critics say it depends who’s in power

The Guardian - The man (Julián Leyzaola Pérez) who took bullets waging war on Mexico's cartels is now taking on politics

Project Syndicate - Argentina’s Bright Young Hope (Stiglitz profiles Argentina’s new economy minister)

NYT - ‘A Slow-Motion Chernobyl’: How Lax Laws Turned a River Into a Disaster (on the Santiago River in Mexico)

NYT - Climate Change and Political Chaos: A Deadly Mix in Honduras Dengue Epidemic

El Faro - What Are the Consequences of Continued U.S. Support for Honduras?

Kyodo - Tokyo pressed El Salvador to prevent Beijing influence over port

El Pais - “La paz en la calle comienza en las cárceles” (MS-13 in Guatemala)

AFP - 2019 deadliest year for Colombia's ex-FARC combatants: UN

WSJ - Bolivia’s Coca Growers Learn About Life After Evo Morales

FT - Russia fills the void in Cuba left by tougher US embargo

AP - Brazil’s Bolsonaro keeps to far right, faces tough 2nd year


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