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This week, in Chile, the possible excessive use of force by police is back at the top of the agenda – and threatens further protests – ahead of the one-year anniversary of last year’s outbreak of serious social unrest. Argentina embarks on the long road to a debt renegotiation with the International Monetary Fund (IMF). In Colombia, security policy will be under scrutiny, while in Brazil, funding a cash transfer program remains the priority. Finally, in Mexico, another infrastructure plan has just been announced.
The government will be under pressure this week following an incident that took place during protests in Santiago on 2 October. Video footage appears to show a police (Carabineros) officer manhandling a 16-year old protestor off a bridge into the Mapocho river. The incident revives questions about heavy-handed policing at an especially sensitive moment – the one- year anniversary of last year’s outbreak of serious unrest is coming up on 18 October, while the referendum on a new constitution takes place on 25 October. Opposition parties are now threatening to file a motion of censure against Interior Minister Victor Perez, who has only been in his post since late-July.
Officials from the International Monetary Fund (IMF) will tomorrow, 6 October, start a fact-finding visit ahead of debt renegotiation talks. The visit represents the beginning of what Finance Minister Martin Guzman has already warned will be a lengthy process. A further IMF visit is expected in November. Guzman has set a deadline of April 2021 for an agreement. In the immediate term, Guzman will be hoping that the IMF visit helps restore a measure of market calm following a steady drain on the Central Bank (BCRA)’s limited reserves amid a chronic lack of confidence in the peso.
Defense Minister Carlos Holmes Trujillo faces a grilling from opposition legislators in the lower house on 7 October, which could proceed to a subsequent motion of censure. The threat of a motion of censure is over the minister’s response – perceived as inadequate – to a September Supreme Court ruling that the government must issue a formal apology over the policing of the protests that took place in November 2019. Unusually, Holmes Trujillo faces another motion of censure next week in the Senate, in this instance following the accusation that the minister should have won Senate approval before allowing a small detachment of US military personnel into the country recently. The government has the numbers to shield Holmes Trujillo from a motion of censure but the opposition maneuvers will highlight how complicated the security situation currently is.
Following a week when the government had to back down from fiscally-questionable proposals to finance a new cash transfer program, priority will be given this week to finding alternatives. Among them, discussions will focus on the review of other social programs, the end of income tax deductions, or new taxation on dividends. There are no deadlines to be met this week and the whole body politic is sensitive to the proximity of the municipal elections in November – which tend to delay work in Congress, especially in the lower chamber. The more ambitious items such as the tax reform should not be seriously dealt with this week or any time before the elections.
President Andres Manuel Lopez Obrador (AMLO) and private sector representatives have today, 5 October, been unveiling an infrastructure upgrade and development program. The new plan is supposed to build on similar announcements made last November, which have gained extra significance as the government looks to reactivate the economy amid the Covid-19-induced recession. While it is positive that AMLO recognizes the need for cooperation with the private sector, the reality is that business confidence remains low – which the head of the Business Coordinating Council (CCE), Carlos Salazar, alluded to today when he stressed the need for stable rules and regulations. Gustavo de Hoyos, head of another business chamber, Coparmex, recently said that the AMLO administration was the least business-friendly since the 1970s.