April 13, 2021

Latam

LATAM PULSE

BY Mario Marconini, Nicholas Watson

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( 5 mins)

This week, Peru’s vote count continues to determine who will the face the radical leftist Pedro Castillo in a June presidential run-off vote. In Mexico, Congress is likely to proceed with another plank of President Andres Manuel Lopez Obrador (AMLO)’s energy reform rollback. Ecuador’s winning presidential candidate Guillermo Lasso has set up a transition team but his immediate focus will be on the health crisis. In Brazil, budget discussions continue as a Senate investigation into the government’s handling of the pandemic looms. Argentina’s coronavirus caseload is surging once again. Finally, in Cuba, Raul Castro is set to finally retire from his powerful watchdog role as head of the ruling Communist Party (PCC).

Peru

The vote count following the 11 April first-round presidential election is continuing in the early part of this week. According to the latest numbers, with around 90% of ballots counted, the radical leftist Pedro Castillo is first with 19% of the vote and has surely booked his place in the June run-off vote. The question now is who Castillo will face. Keiko Fujimori – who has secured 13.3% so far – looks like the most probably contender, though the battle for second place is tight, with Hernando de Soto and Rafael Lopez Aliaga both with 11.69%. A Castillo versus Fujimori run-off – improbable though it seemed until just two or three days before the ballot – would pit the hard Left against Fujimorismo, a brand of conservative populism with authoritarian undertones and a longstanding corruption problem that has high rejection levels.

Mexico

The lower house energy commission is on 14 April expected to approve reforms to the Hydrocarbons Law, allowing for a plenary vote the day after. The bill would grant the government discretionary powers to suspend permits granted to private companies for various mid- and downstream activities including fuel and crude transport, distribution, storage, and sales. State-run entities could even step in to run privately-operated facilities under suspension orders. While the bill is likely to pass easily in Congress, it will face legal challenges that would likely delay or block its implementation on grounds that it violates competition laws and/or could amount to indirect expropriation.

Ecuador

Following his 11 April election victory, Guillermo Lasso yesterday, 12 April, stressed that his immediate priority when he takes office will be the pandemic. Lasso has promised that nine million people will receive at least one vaccine dose within 100 days of his 24 May inauguration. The president-elect also said he would study setting up an international anti-corruption commission, while he would also abrogate the controversial 2013 Communications Law, which grants the government broad powers to muzzle critical media.

In parallel, the outgoing government led by President Lenin Moreno wants to step up the vaccine rollout under new Health Minister Camilo Salinas, who was appointed on 8 April. Salinas is the fifth health minister since the outbreak began. The removal of his predecessors reflects a combination of the mismanagement of the early stages of the outbreak; nepotism; complicity in schemes to facilitate preferential access to Covid-19 vaccines; and the chaotic handling of the vaccine rollout. The most recent incumbent, Mauro Falconi, who only lasted 20 days in the job, reportedly struggled to find out basic information about how many vaccines had been administered and where stocks are located. Moreno wants 4mn doses to have been given by the time he leaves office on 24 May.

Brazil

The week will see a continued negotiation towards an agreement on the 2021 budget. As the draft bill stands, the budget is unenforceable since it violates the official “spending ceiling”. Congress changed it by lowering figures allocated to mandatory expenditures and transferring them to cover parliamentary amendments that dispense cash to politicians and their constituencies. The solution to the impasse will certainly involve a partial veto by President Jair Bolsonaro to avoid trouble with fiscal laws; the official deadline to resolve it is 22 April. Meanwhile, on 14 April, the Supreme Court (STF) should confirm a ruling by one of its members for the immediate instalment of a parliamentary inquiry committee (CPI) in the Senate to investigate the handling of the pandemic by the government. The CPI has received sufficient signatures to be installed for over two months, but pro-government Senate Chairman Rodrigo Pacheco has held it back. The CPI is sure to enhance Bolsonaro’s image as denialist and incompetent.

Argentina

Government health advisors in a meeting that ended late last night, 12 April, recommended further restrictions to contain surging coronavirus cases, which have averaged 20,000 per day over the past week; some advocate a short but total lockdown. The government remains concerned over the economic impact and public non-compliance following the lengthy and only partially effective quarantine measures in 2020. The province of Buenos Aires and the capital are once again the epicentre of the second wave, with the province’s hospital system under most pressure. Although the vaccine rollout continues to proceed in fits and starts, a silver lining is that almost all medical personnel have now been vaccinated. In parallel, President Alberto Fernandez should today receive clearance to end his self-isolation period after testing positive for Covid-19.

Cuba

Former president Raul Castro (2008-2018) is scheduled to step down as First Secretary of the Communist Party (PCC) during the 16-19 April party’s congress. Castro’s retirement means the baton of power finally passes to the next generation led by President Miguel Diaz-Canel. The change comes at a politically delicate moment following the recent exchange rate unification and currency devaluation, which the regime advanced amid the economic crisis sparked by the Covid-19 pandemic. Meanwhile, recent protests over freedom of expression and racial injustice speak to emerging social dynamics catalysed by greater internet access. However, a fundamental shift in US policy towards the island – other than a review of Cuba’s state sponsor of terrorism designation – appears not to be on the cards.

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