Latin America Risk Report - 28 June 2019
Mexico's absent foreign policy; Argentina's absent primary fights
In this edition:
Mexico’s absent foreign policy
Argentina Candidates Set
Venezuela Update
Paying subscribers received an analysis of how Bolsonaro’s policies towards pension reform and militia groups will likely increase violent crime in Brazil in the coming years. Thanks to co-author Rafael Saliés on that report.
Mexico’s absent foreign policy
AMLO skipped the G-20 this week, missing a key opportunity to meet with the leaders of the US and China amid the growing global trade war. It continues a streak in which AMLO has not traveled abroad since well before his election one year ago.
Meanwhile, Mexico is almost totally sidelined at the OAS General Assembly in Colombia. Its criticisms related to Venezuela policy went against the majority in the hemisphere were upstaged by even greater criticisms from Uruguay. Mexico’s deal with Trump over migrants has been criticized in the backroom negotiations that have occurred at the OAS. Mexico hasn’t brought any new thinking to the table regarding solutions to the regional migration crisis. There is an election in Guatemala and a political crisis in Honduras and Mexico appears to be a bit player in both in spite of the fact it should be a large and influential neighbor trying to help resolve the issues.
AMLO total focus on domestic politics is keeping his approval ratings high. Foreign policy doesn’t rank high on the list of issues that concern Mexican voters. There is not pro-active foreign policy at the moment. The only times AMLO appears to have engaged in foreign policy have been in brief response to an outside event (such as Trump’s threats to pull out of NAFTA or impose tariffs). AMLO isn’t actively isolating Mexico, but if his disengagement continues, it will have long term negative implications for Mexico’s trade partners and regional influence.
Argentina Candidates Set
Saturday marked the deadline for candidates to register for the PASO primaries set to take place on 11 August. Officially, there are nine candidates in the race.
The three most watched campaigns thus far are:
President Mauricio Macri/Miguel Angel Pichetto (Juntos por el Cambio)
Alberto Fernandez/Cristina Fernandez de Kirchner (Frente de Todos),
Robert Lavagna/Juan Manuel Urtubey (Consenso Federal)
There was some speculation that Sergio Massa, the third place candidate from 2015, would challenge Fernandez under Frente de Todos. In the end, Massa is set to run as a congressional candidate for the party, assuring him of a major role in the legislature whether Fernandez wins or loses. In addition, presidential hopefuls like former nominee Daniel Scioli initially vowed to run against Fernandez, but bowed out at the last minute.
This means all candidates are running unopposed within their parties in the PASO. The need for the primaries has been brought into question by local media and top political figures. There are calls in Congress from Cambiemos legislators to remove the PASO primary all together for those circumstances in which candidates are running unopposed.
If the primaries move forward, despite being a glorified public opinion poll, all candidates need to show how they can organize and mobilize their supporters. The fear among Cambiemos is that a poor turnout in the PASO could cause the market or currency to have issues which would then impact their ability to win later this year.
Venezuela Update
Arrests of military officers. Late last week, at least six military officers were detained including an Air Force general. Sources suggest at least some of the six had been in contact with each other, which alarmed Maduro’s counter-intelligence advisors. There were no immediate indications that the officers detained were disobeying orders or putting together a potential plot. The detentions show a general nervousness by Maduro and the circle of advisors around him about any hints of a plot that could involve the military.
Military promotions. The new round of military promotions has caused anxiety among officers who feel they are not getting their opportunity to serve in key posts because current officials are remaining in the military for too long. At lower levels, Army, Air Force and National Guard colonels as well as Navy captains are grumbling that they are not getting their shots at becoming generals and admirals because the top ranks are way too full. Venezuela has among the highest number in the world of generals/admirals as a proportion of total military personnel.
Who will be the new minister of defense? The largest military promotion controversy will reshape the dynamics of the circle of power around Maduro. Vladimir Padrino Lopez has spent a long time as minister and had his commission extended multiple times in spite of his age. It’s widely acknowledged among the military and civilian leaders in Maduro’s circle that it’s time for a change, particularly after the minister’s questionable role in the events of 30 April. There will be political waves if and when Maduro attempts to replace Padrino Lopez, one of the top five powerbrokers in the country and a critical figure in maintaining military unity during the past six months of political tension. However, if Padrino Lopez is not replaced, it could cause some who are in line for promotions to complain and conspire.
Escapes and Defections. Ivan Simonovis, a high profile political prisoner, posted a picture of himself in Washington DC with the news that he was free and out of Venezuela. Simonovis reportedly escaped his house arrest and fled the country following the events of 30 April. Also in Washington, the Washington Post published a lengthy interview with General Figuera, the former head of SEBIN who helped Guaido on 30 April and then escaped the country.
Oil and Finances. New data confirmed previous reporting that oil imports by India dropped last month. That is important as a portion of India’s oil imports provided new money to the Maduro government’s cash flow. Additionally, China’s imports of Venezuelan oil were at their lowest levels in five years.
Sanctions. The US Department of Treasury issued new sanctions against two Venezuelans who took part in corruption related to the electricity sector.
Russia. A Russian military plane was spotted in Caracas and Russia confirmed they have moved personnel to the country for maintenance and equipment repair. The very public move appeared to be an attempt by Russia to counter recent reports that they have been withdrawing personnel and financial support for Maduro.
Region. The OAS General Assembly voted to recognize Guaido’s representatives to the organization. This caused a number of countries to object. Uruguay, which has an election this fall and primaries this weekend, walked out of the meeting.
Corruption Corner
Region - AS/COA and Control Risks published a new index of corruption that measures Latin American countries’ abilities to combat, prevent, investigate and prosecute corruption. Chile leads the rankings in the Capacity to Combat Corruption (CCC) Index while Venezuela is at the bottom.
Region - The Miami Herald published a series of articles on corruption at Odebrecht, the connection to the Miami area, and the ties between Odebrecht and corrupt politicians in Venezuela.
Reading List
WSJ - Honduras’s Leader Struggles With Ills That Drive Migration
Al Jazeera - Honduras protest crackdown: Five things to know
The Guardian - Brazilian diplomats 'disgusted' as Bolsonaro pulverizes foreign policy
NYT - Mexico’s Workers Can Finally Choose Unions. Old Unions Are Pushing Back.
The Atlantic - Colombia’s Border Czar Stands Against the Anti-Migrant Tide
CAP - Getting Migration in the Americas Right
Americas Quarterly - Brazil’s Energy Sector Needs Reform. Is Bolsonaro Up to the Task?
Thanks for reading
About an hour after I hit send on this newsletter the family and I will be getting in the car and driving out of Montreal after almost three years of living here. Next week’s newsletter will be sent from Chicago (after a road trip through Toronto and Detroit).
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