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LATAM PULSE

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This week, Argentina’s creditors will be hoping for greater clarity on the new government’s economic and debt plans. Counting votes from yesterday’s congressional elections in Peru should conclude, with a more fragmented legislature in prospect. In Chile, major reforms need to advance before the February congressional recess. In Mexico, the new congressional session starts on 1 February, with controversial judicial reforms at the top of the agenda. Finally, in Brazil, President Jair Bolsonaro’s values agenda will be back in focus.

Argentina

Finance Minister Martin Guzman is in New York at the beginning of this week, meeting investors and US Treasury and International Monetary Fund (IMF) officials, all of whom will be anxious to hear more about the new government’s plans for the economy and the debt question. While President Alberto Fernandez has said he wants debt negotiations settled by the end of March, and it is clear that the government wants a period of time without interest obligations, the exact details of the government’s offer remain unclear. Meanwhile, uncertainty over a delayed provincial bond amortization payment, combined with recent comments from Joseph Stiglitz – Guzman’s academic mentor – suggesting that creditors should expect “significant haircuts” have cast a shadow over the process.

Peru

Quick count results from the congressional elections held yesterday, 26 January, suggest there will be at least eight parties in the new legislature. Based on these results – which are not final – the biggest blocs in Congress will be the center-right Popular Action (AP), the Alliance for Progress (APP), the Union for Peru (UPP), and the Agricultural People’s Front of Peru (Frepap). The latter – which appears to be the biggest surprise of the elections – is an evangelical party. The UPP is allied to the jailed insurrectionist and extreme nationalist Antauro Humala. The once-dominant Fuerza Popular (FP) looks to have won around a dozen seats in the 130-seat Congress. A fuller picture of results should be forthcoming later this week. The new Congress will probably be inaugurated in March.

Chile

The government’s pension reform initiative goes to the lower house Finance Commission today, 27 January. The government’s plan is for a lower house vote to take place this week before February’s legislative recess, with a Senate vote then going ahead in March. However, in a sign of continuing disagreements, the lower house Labor Commission ended its discussions over the reform in deadlock last week. The prospects for the parallel tax reform look more promising, with final touches likely this week. Beyond Congress, the challenge this week will be to ensure PSU university entrance exams go ahead without serious disruption; earlier this month, radical student groups attacked test sites and leaked some test papers.

Mexico

A judicial reform is supposed to be unveiled on 1 February, or shortly afterwards, as the new congressional session gets underway. Before then, Supreme Court (SCJN) head Arturo Zaldivar is likely to be seeking to shape the initiative. The government recently backed away from draft judicial reform proposals – seemingly authored by the National Prosecutor’s Office (Fiscalia) headed by Alejandro Gertz – after they caused an uproar. Civil society organizations described the proposals as a threat to due process and the presumption of innocence; regressive because they would undo some of the lengthy and painstaking transition to an oral, adversarial criminal trial system; and almost certainly unconstitutional.

Brazil

This week should see a final decision by a soap-opera famous actress, Regina Duarte, on whether she accepts to take on the Special Secretariat for Culture. Following the downgrading of the former Culture Ministry to a secretariat, the culture dossier has been losing in importance, having been transferred from the Citizenship Ministry to the Ministry of Tourism. Duarte will be the fourth person to fill the post but the first to be reasonably tolerant of racial diversity, gender equality, and the LGBT community. In principle, her inauguration should take place on Wednesday following the return of the president from a trip to India. It is unclear so far whether the support from the cultural establishment for her appointment will be sufficient to convince her to take on the post in face of clear differences of approach and ideology with the president.

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LATAM PULSE

This week, Argentina’s creditors will be hoping for greater clarity on the new government’s economic and debt plans. Counting votes from yesterday’s congressional elections in Peru should