March 22, 2021

Latam

LATAM PULSE

BY Mario Marconini, Nicholas Watson

Share on twitter
Share on whatsapp
Share on facebook
Share on linkedin
Share on email
Share on reddit

Listen to our reports with a personalized podcasts through your Amazon Alexa or Apple devices audio translated into several languages

( 6 mins)

This week, Argentina’s slow-moving talks with the International Monetary Fund (IMF) are unlikely to see any new momentum. Security and migration policy in Mexico will be under scrutiny. In Brazil, new emergency coronavirus assistance is coming as executive-congressional tensions resume. Ecuador’s presidential campaign continues after a hostile debate over the weekend. Cuba’s vaccine trials continue to advance. Chile is experiencing a surge in coronavirus cases that could yet see the April elections postponed. Finally, in Colombia, a debate about term extensions has been quashed but a politically complex fiscal reform is looming.

Argentina

Finance Minister Martin Guzman is in Washington DC where he is expected to hold a meeting with the International Monetary Fund (IMF)’s Kristalina Georgieva tomorrow, 23 March. Expectations for any significant progress or breakthrough in ongoing talks over the repayment of USD 44bn owed to the Fund are low. Guzman was in New York last week, though his meetings failed to elicit much enthusiasm from private investors given the lack of any medium-term economic plan and recent criticism of the IMF by President Alberto Fernandez; the group of Argentina Exchange Bondholders put out a terse statement questioning the value of Guzman’s trip.

Mexico

Three recent security-related developments will continue to have ripple effects this week and well beyond. Remarks last week by Gen. Glen VanHerck, commander of US Northern Command, that as much as 30% to 35% of Mexico consists of “ungoverned areas” where the state’s remit is patchy are a signal of deep US concern over the security environment, which is exacerbating the gathering migrant crisis at the US border. An ambush on a police convoy in Mexico state on 18 March was a timely reminder of the power of drug trafficking cartels. Finally, the announcement that ownership of the 1,525km Mayan Train (Tren Maya) rail project – together with all the profits it eventually generates – will be granted to the armed forces could have implications for years to come. In addition to keeping the military on side, President Andres Manuel Lopez Obrador (AMLO) wants to avoid the future privatization of the Tren Maya. This may be AMLO’s most overtly corporatist move of his presidency thus far.

Brazil

Following the government’s issuing of a new executive order with new rules for the disbursement of a new emergency assistance to 45.6mn people (22.6mn less than in 2020 and at one third of last year’s value on average), congress will now start to focus on economic emergency measures such as the reduction of workdays and salaries, and the refinancing of debts. Discussions will take place amid a significant deterioration in relations between President Jair Bolsonaro and congressional leaders over recent decisions by the president affecting the fight against Covid-19. Bolsonaro’s rejection of a prominent cardiologist favored by House Speaker Arthur Lira as new health minister, combined with his filing at the Supreme Court (STF) of a case against governors who instituted curfews to control infections, has antagonized both allies and foes.

Ecuador

Yesterday’s TV debate between Guillermo Lasso of the center-right Creating Opportunities (CREO) party and Andres Arauz of the leftist Union for Hope (UNES) coalition seems unlikely to move the needle in the presidential race; the run-off vote is scheduled for 11 April. The debate was short on substantive policy proposals. The candidates instead traded a series of personal blows. Lasso hammered home Arauz’s association with former president Rafael Correa (2007-2017) at the same time as Arauz tried to reach out to indigenous voters, who could be kingmakers in the election. Arauz remains the favorite with under three weeks to go until the vote.

Cuba

Phase III trials for a second domestically-developed coronavirus vaccine – Abdala – are getting underway in the east of the island. The Soberana 02 vaccine is already at the phase III trial stage and, according to the local Finlay Vaccine Institute (IFV), could be ready by August. The BioCubaFarma group, which is developing Abdala, says it plans to have production up and running so as to be ready to inoculate the Cuban population as soon as August. Assuming the vaccines are effective, authorities want to be in a position to produce 100mn vaccine doses in 2021. A successful vaccine could represent a significant commercial and soft power opportunity for Cuba; it has also been suggested that the offer of vaccines to foreign visitors could help reactivate the hard-hit tourism sector. In total, Cuba has four vaccines under development, including Mambisa, a nasal spray as opposed to an injection.

Chile

The government could put the whole Santiago Metropolitan Region (RM) under quarantine today, 22 March, amid a continuing increase in Covid-19 cases. There were 40,876 new coronavirus cases over the last seven days; 20 March saw the highest reported caseload for a single day since the outbreak began. Amid the latest outbreak, the government remains reluctant to postpone the 10-11 April local and constituent assembly elections, though the Senate is scheduled to discuss the issue on 24 March; any change to the date would require a two-thirds majority. Meanwhile, another delivery of 2mn Sinovac vaccines yesterday brings the total number of doses of the Chinese vaccine to have arrived in Chile to 12mn out of 20mn contracted for 2021; as of 20 March, 28% of the population has received at least one dose.

Colombia

A proposal to extend the current presidential and congressional term by two years to 2024 will not be on the agenda after it caused a political flare-up late last week. Two dozen congressional representatives from different parties tabled the proposal, apparently at the behest of municipal authorities, which would also have had their terms extended under the plan. The leftist Gustavo Petro was quick to label the proposal a “coup” and called for rallies to oppose it. However, President Ivan Duque was emphatic that he will leave office as scheduled in August 2022, while most leading party figures were quick to dismiss the idea of any term extension. Petro could still try to exploit the episode for electoral gain, especially as the government prepares to launch a political delicate fiscal reform initiative.

LATAM: Pandemic status and outlook

( 6 mins) Covid-19 caseloads have been dropping across Latin America and the Caribbean in recent weeks. During October, South America has accounted for under 6% of new global daily cases versus 35-40% in June. The improving picture

Read More »

LATAM PULSE

( 5 mins) This week, Chile marks two years since the outbreak of protests just as the constituent assembly born out of that unrest starts to debate the content of a new constitution. In Peru, a new stage

Read More »

LATAM PULSE

( 4 mins) This week, Chile‘s President Sebastian Pinera faces a bumpy ride as he seeks to defend himself from allegations arising from the “Pandora Papers” leak; at the same time, another presidential debate takes place later today.

Read More »

LATAM PULSE

( 5 mins) This week, Mexico‘s electricity sector counter-reforms are in the legislature, where they could muffle recent speculation about the battle to eventually succeed President Andres Manuel Lopez Obrador (AMLO). Political tensions in Peru are rising. In

Read More »

PERU: Contradictions and confusion

( 3 mins) Prime Minister Guido Bellido’s threat to nationalize the consortium that operates the Camisea natural gas field unless it agrees to pay higher taxes is unsettling – though not for what might seem the most obvious

Read More »