This week, Argentina faces a 72-hour agricultural strike following another arbitrary government intervention. Brazil’s Covid-19 situation will continue to put pressure on the government and legislators for more stimulus, which is unfeasible. In Mexico, independent state entities and regulators are under renewed threat. Ecuadorshould see another presidential debate – this time with the leftist candidate actually showing up. In Chile, the deadline to register candidacies for the April constituent assembly elections is today. Finally, Peru’s presidential race suffers an enforced withdrawal, while the caretaker government scrambles to overcome vaccine delays.
Three out of four major agricultural unions are starting a three-day strike from today, 11 January, to protest against a government order to suspend corn exports for two months. The rationale for the move is to control domestic food prices. However, the agricultural sector has accused the government of arbitrarily intervening in the sector and undermining confidence just as soybean prices have reached a seven-year high. Late last night the government agreed to allow up to 30,000 tonnes of corn exports daily – no doubt in a bid to weaken the strike. However, the partial U-turn is unlikely to fix the damage of an ill-conceived and distortionary initiative.
Concerns with Brazil’s fiscal situation will continue to influence discussions on the 2021 legislative agenda. President Jair Bolsonaro said last week that the country was “broke” and could not extend Covid-19-related emergency assistance that expired on 31 December. Markets did not react to his comment but there is great concern with the prospect that Brazil may need to start rolling debts as early as April or May. The current growth in the number of infections and deaths in the country, approaching levels only seen when the first wave peaked in July 2020, is likely to put pressure on the government and legislators for more assistance and stimulus, which is unfeasible and against the law unless new sources of revenue are found.
Congress will be back from recess on 1 February, when elections for presiding officers will take place. This week will provide further signals regarding the candidacies for house speaker. Baleia Rossi (MDB), the candidate of current speaker Rodrigo Maia, is prevailing in terms of party support over Arthur Lira (PP), the government candidate. Rossi has secured the support of most of the Left so far, who would have supported any non-government candidate but could have chosen to field its own. Lira’s strength is the promise of pork and patronage but many in Congress do not trust the Bolsonaro administration to deliver on promises. Bolsonaro is already liaising with Rossi’s supporters to negotiate concessions and minimize potential conflicts with the emerging house leadership at a time when calls for impeachment may reemerge. This week candidacies for the Senate chairmanship may also take shape.
President Andres Manuel Lopez Obrador (AMLO) will today, 11 January, discuss with his cabinet a proposal to absorb autonomous regulatory entities into existing ministries. AMLO says that the initiative would reduce corruption and save money, which would be better spent on Covid-19 vaccines. AMLO singled out the IFT telecoms regulator and the INAI National Institute for Transparency when unveiling his plan last week. The CCE business chamber has expressed its concern over the removal of checks and balances on executive power and the elimination of technical and specialized know-how. AMLO has long been critical of independent state entities, which were introduced to guarantee a predictable regulatory framework.
The National Electoral Council (CNE) is expected to stage a presidential debate (or possibly two given the number of candidates) on the weekend of 16/17 January. Andres Arauz of the leftist Union for Hope (UNES) coalition has said that he will participate following his no-show in another debate organized by the newspaper El Comercio on 9 January. Yaku Perez of the indigenous party Pachakutik was the only other candidate not to show up for the El Comercio debate. Arauz may want to limit his exposure to attacks from his rivals and instead ramp up his outreach to Correismo’s base in order to secure passage to a run-off vote. The first round of the election takes place on 7 February.
Today, 11 January, is the deadline to register candidacies for the constituent assembly elections, which are scheduled for 11 April. The Left will go into the constituent assembly election race divided after the center-left bloc going under the moniker Constituent Unity failed to overcome deep differences with the Communists (PC) and Broad Front (FA). Parties from the center-right, on the other hand, have succeeded in reaching an agreement with the ultra-conservative Republican party led by Jose Antonio Kast as they look to obtain the all-important one third of constituent assembly seats. The new constitution will require two-thirds approval in the constituent assembly, effectively giving veto power to any group that can muster one third of the seats.
Electoral rules will be under scrutiny this week after Cesar Acuna, the presidential candidate for the Alliance for Progress (APP), was barred from participating in the April election after failing to declare a property he owns; recall that Acuna was barred from running in the 2016 race too. Acuna says he will appeal the decision. Acuna was not a top-tier candidate but the APP is the second largest party in Congress, and confirmation of his exclusion would underline how topsy-turvy elections can be in Peru.
Separately, the exact date for the arrival of the Chinese Sinopharm vaccine remains uncertain following caretaker President Francisco Sagasti’s announcement last week that 1mn doses would arrive in January. The government has signed a contract for a total of 38mn doses of the Sinopharm vaccine, alongside a contract for 14mn doses of the AstraZeneca vaccine, though these are not expected to arrive before September. The prospect of an agreement to acquire the Pfizer-BioNTech vaccine appears unpromising, especially as Sagasti over the weekend described Pfizer’s conditions as “excessive and unnecessary.” The Covid-19 caseload continues to rise, though new cases remain well below the peak seen last August.