August 31, 2021

Latam

LATAM PULSE

BY Mario Marconini, Nicholas Watson

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( 5 mins)

This week, a new congressional session opens in Mexico. Brazil gears up for potentially stormy protests next week. In Chile, another pension withdrawal is under consideration but faces a more difficult path than previous withdrawal initiatives. Meanwhile, the race to succeed Colombia ‘s President Ivan Duque is likely to move up a gear. In Venezuela, a faint chink of democratic light may be opening up. Finally, in Argentina, the countdown to the 12 September obligatory mid-term primary votes is underway.

Mexico

The new congressional session opens tomorrow, 1 September. President Andres Manuel Lopez Obrador (AMLO) will also deliver his annual state-of-the-nation address on the same day. Following June’s mid-terms, the governing National Regeneration Movement (Morena) and its allies will have 278 out of 500 seats in the lower house, well short of a two-thirds majority but still with a comfortable simple majority. An early priority in Congress will be the 2022 budget, which should be unveiled next week; new Finance Minister Rogelio Ramirez de la O has promised a “responsible and realistic” budget. Enabling legislation to allow a presidential recall referendum to go ahead next year will also be on the congressional agenda; the TEPJF electoral court has given a deadline of 30 September for the legislation to be passed so that the recall referendum can go ahead in March 2022.

Brazil

Senate Chairman Rodrigo Pacheco will meet Supreme Court (STF) President Luiz Fux in an attempt to improve the dialog across branches of government. Top of the agenda is the handling of Independence Day (7 September) protests against the court and congress that are being encouraged by President Jair Bolsonaro. There is concern that the protests may turn violent, in addition to having a clearly anti-democratic character. On the economic front, the government seeks a solution to the legally-mandated payment of judicial claims by citizens and companies, amounting to BRL 89bn (USD 17bn) in 2022. Consensus is shifting towards a payment of only BRL 39.9bn (USD 7.5bn) to be stipulated by a resolution from the National Justice Council (CNJ) as opposed to a constitutional amendment to be approved by Congress. This value would allow sufficient leeway in the budget to fund a new cash transfer program for the most vulnerable – a high priority for the government in the year leading up to the October 2022 presidential elections.

Chile

The lower house constitutional commission is on 1 September set to discuss and vote on a proposal to allow people to withdraw up to 10% of their savings from the private pension (AFP) system – the fourth such initiative since the outbreak of the pandemic. The initiative could be ready for a lower house plenary vote later this month. Unlike on the previous three occasions, the government is quietly confident it can rein in its own legislators and prevent them from voting in favor of another drawdown; in April, 38 legislators from the governing coalition defied the government to approve the third withdrawal. However, the government has extended its Covid-19 Emergency Family Income (IFE) program, while Central Bank (BCCh) Governor Mario Marcel has warned that another withdrawal risks fueling inflation and overheating the economy.

Colombia

The former health minister Alejandro Gaviria on 27 August announced that he would run for president in 2022. In a sign of how highly rated he is – at least among the progressive political class – Gaviria has been courted by the leftist Gustavo Petro and by the Liberal Party. Ultimately, however, Gaviria decided to start his pre-campaign as an independent, though he has left the door open to join the centrist Coalition of Hope or the New Liberalism movement, participating in a primary to be held in March 2022. The Coalition of Hope already has several pre-candidates, led by Sergio Fajardo, who finished third in 2018. Separately, the former Medellin mayor Fico Gutierrez is expected to register as a pre-candidate today, 31 August. A recent Invamer poll put Gutierrez in third place, though the field of candidates is fragmented and will likely get more crowded over the coming weeks.

Venezuela

The National Electoral Council (CNE) has extended the deadline to register candidacies for the 21 November gubernatorial, mayoral, and municipal elections to tomorrow, 1 September. The extension should allow opposition parties to finalize candidacies ahead of their expected confirmation that they will be participating in the vote, ending an election boycott begun in 2018. In parallel, on 3 September regime-opposition talks are set to resume in Mexico City. Opposition leader Juan Guaido’s call for presidential elections to be brought forward from 2024 is unlikely to advance, and it remains difficult to see President Nicolas Maduro accepting opposition demands for deep electoral reforms. However, Guaido is now floating the notion of a presidential recall referendum in 2022.

Argentina

With opinion polls looking inconclusive or contradictory, the opposition Together for Change (JxC) coalition will be hoping that the outcome of the gubernatorial election held in Corrientes province on 29 August reflects the state of national public opinion ahead of the obligatory primary votes scheduled for 12 September. The primary is the prelude for the 14 November partial mid-terms. In Corrientes, the incumbent governor, Gustavo Valdes, who is from the Radicals (UCR) – a JxC coalition member – won a thumping victory against a Kirchnerista challenger. Corrientes is a long-term UCR stronghold. However, the election was the first test of the public mood since the so- called ” Olivosgate ” scandal broke. The scandal centered on the revelation that President Alberto Fernandez broke strict Covid-19 quarantine rules last year to stage a birthday party for his partner, Fabiola Yanez.

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