August 17, 2021



BY Mario Marconini, Nicholas Watson

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( 5 mins)

This week, Argentina‘s President Alberto Fernandez has been hit by a scandal under four weeks from the crucial mid-term primaries. In Peru, the political chaos and confusion that has marked Pedro Castillo’s first 19 days in office is set to continue this week. Brazil‘s Congress moves ahead on several fronts. Chile‘s center-left aims to make up for lost ground in the presidential race. Venezuela‘s regime-opposition talks have begun in Mexico City. In Ecuador, the thorny issue of fuel subsidy reform is on the agenda. Finally, Cuban authorities are struggling to manage the pandemic.


President Alberto Fernandez desperately needs to shift the campaign agenda this week after some of the most difficult few days of his presidency. Last week, photos came to light showing Fernandez and his partner, Fabiola Yanez, celebrating her birthday with a group of friends at Los Olivos, the presidential residence, during the height of last year’s lockdown in contravention of the rules then in force. The government initially dismissed the photos as fake before Fernandez eventually apologized. A list of other non-essential visits to Los Olivos makes it impossible for Fernandez to deny his rule-breaking. The scandal will undermine public trust in the government (and future coronavirus control measures) just under four weeks from the mid- term primary votes. It also puts existing fractures within the governing Front for All (FdT) under new pressure. However, opposition impeachment filings will not advance; they have been tabled only to prolong the scandal in voters’ minds.


Moves are underway in Congress to question two ministers in President Pedro Castillo’s cabinet; they are Foreign Minister Hector Bejar and Interior Minister Juan Carrasco. Congressional pressure on the cabinet will continue this week ahead of the vote of confidence in the new cabinet scheduled for 26 August. The latest noises from Congress suggest that large numbers of opposition representatives are considering abstaining in the vote to avoid such an early showdown with Castillo. The constitution effectively operates a two-strike rule by which if Congress strikes down two votes of confidence, the executive is empowered to dissolve the legislature. The latest Ipsos poll carried out late last week puts Castillo’s disapproval rating at 45%, which is unprecedented for this stage of a presidency.


Changes in the income tax regime will be discussed at the House of Representatives on 17 August on the basis of a report that maintains the introduction of a 20% rate for profits and dividends but does not simplify or reduce taxes according to experts. The privatization of the postal service ( ” Correios”) will be voted at the Senate following a 286-173 approval at the House, foreseeing a 100% sale of assets. The constitutional amendment on a return to party coalitions in proportional votes, which had been prohibited in the last elections, cleared the House and has to be voted by the beginning of October to be valid for the 2022 elections.


The center-left bloc now going under the name of Unidad Constituyente holds its presidential primary on 21 August ahead of the deadline for registering presidential candidates two days later. The Senate president Yasna Provoste of the centrist Christian Democrats (DC) is the favorite to win the Unidad Constituyente nomination; her main rival is Paula Narvaez of the Socialists (PS). However, Provoste has dipped in the polls against her two main rivals: Gabriel Boric of the more radical left Apruebo Dignidad coalition, and Sebastian Sichel of the center-right Chile Vamos (CV) coalition. This week should also determine whether the Lista del Pueblo (LDP), an anti-status quo group that is positioned to the left of Apruebo Dignidad on some issues, can organize a presidential candidacy. The final candidacies must be settled by 23 August; the first-round vote takes place on 21 November.


Regime-opposition talks began on 13 August with representatives of both sides signing a memorandum of understanding that will underpin the talks. In a goodwill gesture, the regime yesterday released the Popular Will (VP) party’s former deputy Freddy Guevara, who had been arrested in July. The regime’s chief representative in the talks is the National Assembly (AN) President Jorge Rodriguez, while the opposition’s is Gerardo Blyde. Issues on the agenda include electoral guarantees for the November regional elections; Covid-19 and broader humanitarian assistance; bringing forward presidential elections; staging a presidential recall referendum; and sanctions relief. In a sign of how difficult the talks are likely to be, Blyde acknowledged that even agreeing on an agenda and format for the talks had been complicated. The Mexican government, which is hosting the talks, has reportedly suggested they could take six months.


Talks between the government and the transport sector will continue this week as President Guillermo Lasso presses ahead with plans to reduce and better target fuel subsidies. Last week, Lasso indicated that a plan could take another two months to finalize. The whole issue of fuel subsidies is technically complex and – as evinced by October 2019’s outbreak of serious unrest – politically delicate. Last week, the Unitarian Workers’ Front (FUT) umbrella union and the Confederation of Indigenous Nationalities of Ecuador (Conaie) staged protests against a fuel subsidy reform. The cost of the fuel subsidy in H1/2021 has been put at USD 505mn. The Conaie leader, Leonidas Iza, was instrumental in stoking the 2019 unrest which forced the then-government into a U-turn.


President Miguel Diaz-Canel yesterday, 15 August, set up a new government command center to better manage the Covid-19 situation. Officials are also going out of their way to praise doctors and nurses after Prime Minister Manuel Marrero last week criticized health workers for the increasing caseload, which has hit record levels in recent days. The situation is especially tense for authorities given recent protests, as well as the fact that the free and universal health system is the regime’s major inducement to the population, and it cannot afford to lose the support of health workers. The rising caseload also puts domestically-developed vaccines to the test.

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

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( 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

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( 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.

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( 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

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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

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