May 10, 2021

Latam

LATAM PULSE

BY Mario Marconini, Nicholas Watson

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( 5 mins)

This week, Colombia will see talks to try to defuse tensions and calm protests that arose out of the government’s aborted tax reform. Chile’s postponed mega-vote – including elections for a constituent assembly – takes place. Brazil’s Covid-19 inquiry continues, while tax reform moves rumble on. Argentina’s government wants special treatment from the Paris Club despite not having an International Monetary Fund (IMF) agreement in place. Meanwhile, Mexico-US bilateral relations are beginning to take clearer shape. Finally, Ecuador’s new National Assembly starts work later this week ahead of Guillermo Lasso’s inauguration on 24 May.

Colombia

The government and representatives of the National Strike Committee, an ad hoc group of unions and other organizations, will meet later today, 10 May, in an effort to defuse tensions sparked by a tax reform that President Ivan Duque has been forced to withdraw. Tensions remain high following 12 days of demonstrations. After yesterday’s clashes between indigenous protestors and neighbourhood groups in Cali, Duque has increased the security presence in the city. Whether today’s talks can progress remains to be seen. The government has included the Covid-19 vaccination rollout on the talks’ agenda, which some protestors see as a distraction from real issues such as a basic income and a waiver of university enrolment fees. Duque also remains under pressure from his own Democratic Centre (CD) party. In this context, the chances of passing a more modest tax reform proposal are unclear.

Chile

Mayoral, municipal council, gubernatorial, and constituent assembly elections that were postponed from April because of the pandemic will take place on 15-16 May. There is no precedent for the constitutional vote beyond the October 2020 referendum, which produced a landslide in favor of a new constitution. These are also Chile’s first gubernatorial elections. The key question is whether the government’s recent difficulties and President Sebastian Pinera’s dire approval ratings help the Left and Center-Left reach a two-thirds majority in the constituent assembly that champions radical change and/or populism. The results will also have a bearing on the presidential race, with the deadline for registering in presidential primaries coming just days after the weekend voting.

Brazil

The Senate inquiry into the mishandling of the pandemic that started its work on 4 May will continue this week. Two former health ministers were highly critical of the president’s denialism of the pandemic and his forceful narrative all along against social isolation or mask-wearing and in favor of hydro-chloroquine as prophylaxis for Covid-19. Current Health Minister Marcelo Queiroga did not speak against the drug and refused to criticize the president despite his unchanging behavior since the beginning of the pandemic, choosing to assign any blame on the unpreparedness of the national health system. The inquiry, which has so far been fairly harmful to the president and his government, should reach a high point when the longest serving and most conformist health minister under Bolsonaro, Army General Eduardo Pazzuelo, testifies on 19 May.

On another front, House Speaker Arthur Lira unilaterally declared the end of the chamber’s special committee on the tax reform and intends to start anew on the basis of the government’s existing proposal to unify two federal contributions (PIS and COFINS) – thus putting aside taxes at sub-federal levels. Lira’s move indicates his intention to both have a reform to call his own and ensure the Senate does not soak up all the limelight in the media with the pandemic inquiry.

Argentina

President Alberto Fernandez is on a four-country European trip this week. Fernandez’s main objective is to persuade European governments to support Argentina’s request for a delay in making a USD 2.4bn Paris Club payment (officially due on 30 May but with a 60-day grace period). Normally for such a request to be granted, the Paris Club creditors would require an International Monetary Fund (IMF) deal to be in place. However, talks with the Fund are only progressing slowly, with no deal expected until after the October mid-terms. The trip is also a way for Fernandez to demonstrate that under-fire Finance Minister Martin Guzman remains integral to the government. Whether a meeting can be arranged with the IMF’s Kristalina Georgieva remains to be seen; Fernandez may have to reconcile himself to an audience with Pope Francis instead, which could help boost Guzman.

Mexico

There are a couple of takeaways from the virtual meeting between President Andres Manuel Lopez Obrador (AMLO) and US VP Kamala Harris held on 7 May. First, the Joe Biden administration’s need to tackle migration is the priority issue in relations with Mexico, at least for now. Second, bilateral relations are likely to be compartmentalized as Biden and Harris try to ensure more problematic factors do not derail progress on the migration issue. The focus of last week’s meeting was on migration, and the White House was discreet about other issues, including whether there was any discussion of AMLO’s complaint about US financing for MCCI, a leading anti-corruption NGO that AMLO regularly berates. Nor is it clear whether the American Petroleum Institute (API)’s latest complaints about discriminatory treatment were discussed.

Ecuador

The new National Assembly (AN) elected in February holds its inaugural session on 14 May in advance of the inauguration of Guillermo Lasso as president on 24 May. The first order of business will be the elections of the AN president, the assembly leadership committee, and legislative commissions. Lasso’s Creating Opportunities (CREO) party and its Social Christian Party (PSC) ally will not have a majority and will be reliant on two parties that will in theory act together: the indigenous Pachakutik (PK) and Democratic Left (ID) parties. However, both the PSC and PK are insisting on holding the AN presidency. Failure to reach an agreement would foreshadow what could be one of Lasso’s biggest challenges: managing a fragmented legislature. The leftist Union for Hope (UNES) coalition – whose leader in the shadows is former president Rafael Correa (2007-2017) and which has the biggest bloc in the AN – is also hoping to control the Assembly.

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