Latin America Risk Report - 28 May 2020
State and local governments strengthen their influence amid coronavirus
In this edition:
State and local governments strengthen their influence amid coronavirus
Earlier this week I covered the “flattening of the curve” of coronavirus cases in Latin America and how it has pushed the peak of cases further into the future. For paying subscribers, I also commented on the recent rise in Mexico’s homicide rates.
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State and local governments strengthen their influence amid coronavirus
Nearly all national leaders in Latin America have seen an approval rating boost due to coronavirus. Citizens have rallied around their leaders as they have attempted to manage the crisis.
In nearly every country where I have seen credible local polling, those polls suggest this boost has been true at the local level too, with governors and mayors seeing an increase in their approval ratings.
However, national and local governments have not always agreed about their policies to combat coronavirus. Here are a few examples from around the region:
In Mexico, local government officials including some from AMLO’s MORENA party have pushed back on the national government’s efforts to reopen the economy.
In Guayaquil, Ecuador, among the earliest and hardest hit cities in South America, mayor Cynthia Viteri has played a key role in national negotiations over the reopening of international flights and the economy of the country.
Claudia Lopez, the mayor of Bogota, Colombia, has used her own decree authority to attempt to stay a step ahead of the Duque government, often enforcing stricter limits than the national government or moving before the national government to force the national government to respond in kind.
The city of Buenos Aires has rejected the national government’s strategy of isolating poor neighborhoods where infection rates are high.
In São Paulo, Brazil, Governor João Doria has imposed very strict restrictions and combatively opposed Jair Bolsonaro’s attempts to reopen the national economy.
In countries where national leaders are failing, especially Mexico and Brazil, local governments have been forced to take the initiative in leading social distancing, enforcing lockdowns, and preparing their health systems.
Even in countries where national leaders have been praised for their efforts to combat the virus, state and local officials have also made efforts to exercise their independence from the national government and develop policies particular to their localities. Opposition politicians who control significant local governments have used the crisis to provide subtle contrast of their leadership with the national government while still promoting political unity.
Impact moving forward
Governors and mayors may try to hold on to the power and influence that they have obtained during this crisis. They may also use their new authorities and responsibilities as a justification for local tax increases. This could reshape federal vs local battles for the next decade.
The rising action and influence by state and local governments has come at significant cost. Many of the local governments rely on national government reimbursements in normal economic times and definitely do not have the budget space to maintain the current level of health efforts, especially as tax receipts decline. Even as many analysts worry about a new wave of sovereign defaults in emerging markets, the dynamics between national and sub-national governments could accelerate potential defaults by state and municipal governments around the hemisphere.
State and local elections will increase in importance. Many analysts (unfortunately, myself included) too often treat the state and local elections in Latin America as a referendum on national governments rather than the local politics that should define them. However, with more governors and mayors forging their own paths during this crisis, the next set of local elections could deliver greater control and influence to the winners. In particular, the municipal elections later this year in Brazil and the many state elections occurring next year in Mexico take on greater importance given the national governments’ failures.
When a new cycle of national elections occurs several years from now, the response to COVID at the city and state level will likely become a key campaign issue. This is a crisis that every voter will remember and be able to relate to, making it a potentially defining political issue. Local leaders who increase their national profiles with their responses to coronavirus may surge in the polls if they are judged to have done well. Others may face criticisms for the long term impacts of their policies and lose their chances at national political office.
Central America Graph
Some readers asked for an updated graph of cases in Central America, so I’ve pasted it below. Reported cases and deaths remain relatively low. Most analysts assume the numbers of cases and deaths are higher than reported in nearly every country. In most countries, that is due to a lack of testing and resources. However, Nicaragua in particular is lying about its numbers and covering up its deaths.
For future reference, this link should provide the updated numbers using data from Europe’s CDC and readers can adapt the charts to their needs.
Corruption Corner
Brazil - On Tuesday, Brazilian police raided the residence of Rio Governor Wilson Witzel on allegations that he was involved in irregular contract awards for hospitals during the coronavirus response. On Wednesday, authorities targeted over two dozen residences of supporters of President Bolsonaro. The president’s son is accused of organizing the spread of false news to support his father’s administration.
Even as coronavirus and the economic situation are the main focus in Brazilian politics, citizens remain staunchly anti-corruption and angry and politicians who engage in acts of corruption amid the global emergency.
Region - AP cited the Rio de Janeiro case above among many instances of corruption that have occurred as governments respond to the coronavirus outbreaks.
Venezuela, US - A Univision investigation dug further into the case of David Rivera, the former Republican Congressman who received $15 million from PDVSA in 2017. Rivera claims he was attempting to help Maduro’s opposition, but the details of the events suggest otherwise.
Reading List
OCCRP - What Lockdown? World’s Cocaine Traffickers Sniff at Movement Restrictions
Economist - Latin America’s economic plight is getting worse
Reuters - Bolsonaro brought in his generals to fight coronavirus. Brazil is losing the battle
The New Yorker - The Coronavirus Hits Brazil Hard, but Jair Bolsonaro Is Unrepentant
Globo - Mesmo com pandemia do coronavírus, Brasil tem alta de 11% no número de assassinatos em março
Associated Press - Video of Cabinet meeting puts Brazil’s Bolsonaro under fire
NYT - ‘It’s Not The Virus’: Mexico’s Broken Hospitals Become Killers, Too
Financial Times - Mexico reopens without knowing if pandemic is under control
InSight Crime - As Officer Murders Soar, Identity Crisis Plagues Mexico’s Local Police
WSJ - Mexico’s Leader Has Answer for All His Needs: The Army
Reuters - U.S. preparing criminal indictment against wife of Venezuela's Maduro - sources
Reuters - Venezuela reaches deal with U.N. to buy food, medicine with gold - central bank
World Politics Review - The Clumsy U.S. Indictment of Maduro Could Actually Help Venezuela’s Transition
Bloomberg - BlackRock, Ashmore Form Ecuador Creditor Group as Swaps Pay Out
InSIght Crime - The Two Deaths of Agent Sherill Hernández in Honduras
Chatham House - Argentina Under Covid-19: Extreme Lockdown, Rule by Decree and Judicial Politicization
Confidencial - US Slaps Sanctions on Nicaraguan Army Chief and Finance Minister
Wall Street Journal - As Coronavirus Spreads in Nicaragua, Official Denials Amplify Risk
New York Times - Suriname’s President Shrugs Off Murder Sentence in Re-election Bid
Economist - Abhijit Banerjee and Esther Duflo on how economies can rebound
Bloomberg - ‘Superforecasters’ Say a Covid-19 Vaccine Is Still a Ways Off
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