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. In Mexico, President Andres Manuel Lopez Obrador (AMLO) will be making the case for his highly controversial electricity sector reform proposals. Any clarity about Argentina obtaining a new International Monetary Fund (IMF) program will almost certainly have to wait until after the November mid-terms. Meanwhile, Peru experiments with a shift to apparent moderation with a new cabinet.
The details of an impeachment bid against President Sebastian Pinera should be unveiled by the middle of this week. The impeachment attempt, which comes five months before Pinera is scheduled to leave office, follows revelations about the sale in 2010 of a mine owned by the Pinera family that emerged in the “Pandora Papers” leak. Part of the sale price for the Dominga mine was tied to a condition that there would be no change in environmental regulations that might impair the project. Pinera also faces a new legal probe after a previous investigation was shelved in 2017. A simple lower house majority is needed to admit an impeachment – and this appears possible – though the two-thirds Senate majority required to seal an impeachment would be more difficult to reach.
In parallel, the second presidential debate takes place tonight, 11 October. The scandal arising from the “Pandora Papers” puts Sebastian Sichel, the candidate for the governing Chile Podemos Mas (CP+) coalition, in a particularly delicate position because of his association with Pinera. Recent polls show Sichel slipping into third place as the ultra-conservative Jose Antonio Kast gains ground. The most recent Cadem poll based on fieldwork in the second half of last week suggests things have got even worse for Sichel, who is now in fourth place on 10%, having shed nine points in a month. The same poll has Kast on 18%, only slightly behind the leftist Gabriel Boric, who is on 21%.
President Andres Manuel Lopez Obrador (AMLO) is planning on bringing his energy team to his morning press conference today, 11 October, as he tries to win support for his highly controversial electricity sector reform initiative. Under the proposal as it currently stands, the state-run CFE electricity utility would recover a de facto monopoly, while energy regulators would be absorbed into the Energy Ministry. With the governing National Regeneration Movement (Morena) and its allies lacking the necessary two-thirds congressional majorities, AMLO is hoping to win over the Institutional Revolutionary Party (PRI). Many PRI legislators have so far been ambiguous as to their position and will no doubt be waiting to see what allocations and benefits can be obtained as the 2022 budget discussions advance. The controversy over the reform is therefore likely to run over several weeks.
Finance Minister Martin Guzman will be at the International Monetary Fund (IMF)’s annual meetings this week. As much as Guzman hopes to bring back positive news about the direction of travel for Argentina’s program talks with the Fund, any significant developments are unlikely. Guzman’s own position is fragile as the governing Front for All (FdT) coalition appears headed for defeat in November’s mid-terms, in which case Vice-President Cristina Fernandez (CFK) could well demand his scalp. Recent allegations that IMF head Kristalina Georgieva pressured staff at the World Bank to manipulate data in China’s favor in the 2018 Doing Business index are another complication for Guzman. Greater clarity about a new IMF program will have to wait until after the mid-terms.
The coming days will test the government’s new commitment to moderation. New Prime Minister Mirtha Vasquez said after her appointment last week that convening a constituent assembly to draft a new constitution was “not a priority” despite it being a core campaign pledge by President Pedro Castillo. That puts Castillo at odds with the Peru Libre (PL) party boss Vladimir Cerron; relations between the two are strained. The new-look cabinet should prove more acceptable to Congress, though the controversial new Interior Minister Luis Barranzuela could still hinder an eventual congressional vote of endorsement. In parallel, a Congress-led initiative to limit how and when the executive can resort to votes of confidence will remain a source of friction.