Six stories - 27 March 2025
Panama, Peru, Haiti, Brazil, Argentina and Venezuela. How many printed Bolivares will it take to reach Mars? I did the math.
Happy Thursday. I focus on US-LatAm relations on Mondays and then use the Thursday newsletter to highlight stories that aren’t directly about the US.
Most or all of Thursday’s Six Stories posts are usually behind the paywall, but I’ve made it free for everyone today. On Tuesday, I announced a pricing change for the paying subscription. Today’s post is to encourage you to subscribe.
In today’s newsletter:
Panama
Peru’s elections
Will Haiti’s capital fall?
Bolsonaro trial
Argentina’s IMF deal is moving forward
Devaluation in Venezuela
Feel free to respond to this email with feedback, comments, and questions.
In Panama, this morning’s La Prensa has an interview with President Mulino where they ask him about the upcoming visit by US Secretary of Defense Hegseth, the sale of the ports by Hutchinson, the reopening of the Cobre Panama copper mine and the Martinelli case. Mulino is a non-populist who sticks to his talking points and is very cautious in everything he says. As a result, his seven minute interview gives precisely no new or useful information about any of those topics.1
That said, it’s been an eventful month in Panamanian politics. A limited pension reform was passed and signed into law. There were some big expected protests, particularly by teachers, but they don’t appear to be sustained. With that out of the way, Mulino can move on to the mining question. The short answer is that the mine must reopen for Panama to have the money to fund the pension system. How to get to the reopening legally and with public opinion on the president’s side are the two big questions.
Mulino has begun the process to authorize the export of some stored copper concentrate, something that makes sense from an environmental standpoint and also helps the balance sheets of both the mining company and the government. It’s a signal of good faith that I had expected would have been done months ago. Storing the copper in a warehouse in Panama does not make much sense.
While Mulino plays the good cop, promising a future potential reopening in exchange for First Quantum dropping its various arbitration cases, the government also has some bad cops. The minister of environment says they have found issues at the mine that could lead to fines. The Ministry of Commerce and Industry is saying they have not authorized visits to the mine, something the First Quantum is trying to do to build public support for the reopening. I don’t think this is a lack of government unity. Instead, I think this is Mulino and his administration’s way of negotiating hard to get the best deal possible.
President Boluarte announced that Peru’s elections will be held in April 2026. The AP adds: “In a brief nationwide television address, Boularte did not say if she would be a contender.”
For the record, I did laugh out loud when I read that sentence. But then I wondered, why announce now that elections will be held in a year? Something about that seemed odd.
It wasn’t just an announcement, but an official convocation of the election. Following Boluarte’s statement, Peru’s election board (JNE) announced that only the 41 parties that had completed their registrations prior to the election convocation will be allowed to participate. The other three dozen parties that still had their paperwork in process, plus any new potential parties, are out of luck because they didn’t complete all the bureaucratic legwork before Boluarte made the surprise announcement one year out from the elections.
In Latin America, election announcements usually come with a timeline for parties and candidates to complete registration and for voter files to be reviewed and verified. Peru seems to have frozen the whole system so that new entrants cannot compete now that the election date has been announced.
Peruvian trust in the entire political system including the election process is low. By blocking new entrants, the government is limiting the potential for a surprise outsider to disrupt everything. That outsider can still work his or her way into one of the existing parties (that is probably what will happen), but it will require negotiations that could limit them in some way.
This will be a test for election monitors and particularly the new OAS Secretary General. Elections aren’t just about the vote counting, but also the entire process of eligibility and campaigning. I don’t think this restriction is the end of Peruvian democracy, but it’s a signal that the political elite are going to fight dirty in the year against anyone pushing for reform and for the ouster of the current people in power.
A Kenyan police officer was kidnapped and killed by one of Haiti’s gangs. It is the second death of a Kenyan member of the peacekeeping team in the past two months. Jamaica’s prime minister is calling for an expanded international effort to stabilize the country.
An article in the Miami Herald earlier this week asked the ominous question, “what would the fall of Port-au-Prince look like?” Government offices and banks are removing valuables and cash and preparing to shut down. The article suggests the US embassy may close and that the new government may be forced from the capital.
That is the most dire assessment I’ve read recently and suggests the situation is worsening rapidly. Any discussion about “the fall of the capital” is a warning sign. That would be a serious escalation by the gangs and would put them in far greater political control. We’ve been at a point for years where the analysis has been “the security situation is bad/worsening in Haiti.” But as the articles above indicate, it can get far worse.
For the moment, I don’t have any information that is better than what I read in the Miami Herald, but several private sector companies have told me in the past month that they thought the situation had slightly improved where they are operating in the country. It’s possible that the capital is falling, but that there are pockets of improvement elsewhere.
The charges against former President Jair Bolsonaro and several co-conspirators include attempting to stage a coup, the violent abolition of the democratic rule of law, and involvement in an armed criminal organization. Five justices on the Supreme Court voted unanimously to proceed with the trial. Bolsonaro’s claims that this prosecution is too politicized aren’t holding up well in the face of evidence that he conspired to overthrow the country’s democracy and assassinate Lula.
Lula spent over 18 months in prison due to far less serious charges. Brazil is a country that isn’t afraid to jail a powerful former president.
This is going to be a long trial. There will be many, many attempts to compare the situation to the US, and those will be compounded by efforts by Bolsonaro himself to get Trump to influence events.
At the same time, the critical difference is that Brazil’s conservative movement is not successfully led by the unitary figure of Bolsonaro. There are other leaders eager to jump into the 2026 race. There are plenty of politicians and voters on the center-right who find Bolsonaro’s actions reprehensible. Unlike so many other populists around the world (including, arguably, Lula), Bolsonaro never fully consolidated control of his own political movement. Political supporters will use the trial to make critiques of Lula and his governing style, but few are going to rush to the defense of Bolsonaro and put their political careers on the line for him.
Argentina is getting $20 billion from the IMF. While the formal announcement won’t come for another few weeks, everyone seems to agree that the IMF deal will be on the larger end. The unconfirmed rumors are that a substantial portion of the funds will be front-loaded. Milei pushed a decree through the Congress to get this IMF deal approved.
It can’t come soon enough. The Central Bank is spending more to prop up the peso and traders are expecting a devaluation.
That means the conventional wisdom is optimistic about Argentina’s economy over the course of this year, but also thinks that a minor currency crisis could happen next month. That’s how Argentina’s economy works.
Speaking of economic weirdness and devaluation, fun trivia: Since Hugo Chavez took office, the currency has fallen so much that one dollar now equals 10,000,000,000,000,000 of the 1999 version of Bolivares. You can’t do anything with that giant number other than come up with completely absurd scenarios. For example, if you printed that much money out, you would have enough to create a stack where one end is on Earth and the other end on Mars, though I believe a few physics issues, such as the amount of ink and paper needed, the Sun’s gravity, and the fact both planets are moving, would prevent you from doing so.
The difficulty of carrying around all that cash and doing math with those numbers justifies why they’ve cut off 14 zeros over the years.
More seriously, this week, the current version of the Bolivar passed 100 to the dollar on the black market.
Devaluation has returned, halting what had been some temporary economic stabilization.
With the official rate set just below 70 Bolivares to the dollar, the gap between the official and black market rates is once again creating arbitrage and corruption opportunities.
As US sanctions threaten to return, the gap is likely to worsen. The oil the country can sell will be limited and they’ll make less profit as sanctioned oil sells for less, they lose support from skilled providers, and the oil shipments require more money to facilitate the transport and payments. In a lower oil price environment, it’s possible Venezuela will only make $5 to $10 per barrel in profit and will lose some of that to corruption costs and losses. All that is to say, Venezuela’s central bank doesn’t have the foreign reserves to defend the currency and won’t be getting additional foreign reserves any time soon. Devalue away
Thanks for reading.
We’ll have to wait to read Hegseth’s Signal messages to learn anything new on the Canal dispute.