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Foreign Policy, Latin America, etc.

Updated: 2018-03-23T10:49:22.595-04:00


Peru President Krashes


Under investigation for corruption and facing likely impeachment as well as new allegations of vote buying, Peru President Pedro Pablo Kuczynski submitted his resignation. The presidency will be handed off to Vice President Martin Vizcarra.

The fight is about both corruption and political power. The corruption allegations against PPK are significant and the videos of vote buying to avoid impeachment sealed his fate. At the same time, nobody believes this is an apolitical process. Keiko Fujimori has clearly gained the upper hand in both the Congressional and her family’s power struggle. She successfully outmaneuvered both the president and her own brother to force the change in government.

Vizcarra will have short time to act. Vizcarra must scramble to form a new cabinet and try to get the government back on to working on real issues that affect the population rather than “politicians playing musical chairs,” as my Peruvian Uber driver so elegantly stated yesterday afternoon. Additionally, with the Summit of the Americas still scheduled for next month in Peru, his government will find itself quickly snared into difficult foreign policy issues.

Vizcarra will be constrained. The new president faces some minor corruption allegations as well the same power dynamics that shut down PPK and his agenda. Political survival may be his top challenge.

The Congress retains influence. Keiko Fujimori and her coalition should be able to control a significant portion of the agenda of the incoming president. Yet, nobody should mistake influence for popularity. The Congress is every bit as unpopular as PPK and Fujimori’s ability to win future elections should be in question given the opinion polling.

Winners? PPK and two other former presidents face corruption allegations. Kenji Fujimori’s name will be linked to the videos that brought down the president. Keiko Fujimori is the short term winner of the power struggle, but she has also been damaged in the process. That potentially leaves Julio Guzman and Veronika Mendoza, candidates from the previous presidential election who stayed out of the mud in this fight, as the quiet winners in this power struggle.

A symbolic murder in Rio


The high-profile assassination of Marielle Franco in Rio de Janeiro has become a symbol for the problems facing the country. Her killing was almost certainly related to the councilwoman’s outspoken anger at police abuses. The bullets used in the shooting came from police stockpiles and many people suspect that the men who shot her were police officers.

According to the Washington Post, “last year, 1,124 people died at the hands of police, the highest number in a decade, the institute reports. In recent years, nearly 80 percent of those killed by police were black or mixed-race.” The protests that have occurred since her killing last week have hit at that racial divide as well as the general problem of police abuse.

While impunity is the norm for this sort of event, the local and global attention may rally some action by the Brazilian government.

PPK faces new impeachment vote


Peru’s Congress voted to again open impeachment proceedings against President Pedro Pablo Kuczynski. The 87 votes in favor of opening up debate are the exact number needed to impeach PPK and remove him from office.

PPK saved himself the first time by agreeing to pardon former President Fujimori in exchange for obtaining the support of a faction of politicians associated with the former president’s son, Kenji. That move, however, angered a number of politicians on the left who are likely to join forces with Keiko Fujimori this time in supporting the president’s ouster.

Peru’s system could lead to new elections if both vice presidents were to resign after the president’s impeachment. Vice President Martin Vizcarra has recently suggested he would not resign and would assume the presidency if PPK were impeached.

A poll last weekend showed only 19% approve of PPK and 58% believe he should leave office early.

LatAm corruption cases in the US


Veracruz sued in Florida state court last month saying the ill-gotten funds from former politician Javier Duarte were invested in properties including a Mediterranean-style mansion in Coral Gables that last sold in 2014 for $7.7 million. That was an outlier: the other 40 properties in Miami-Dade had significantly lower sales prices. The state is seeking more than $25 million in damages. 
Venezuelan state oil company PDVSA has sued a group of oil trading companies through a U.S. trust over a multi-billion dollar corruption scheme to buy petroleum products below market value, the lawyer representing the trust said on Thursday.
These two cases are very different, but share a few common trends.

1) The US court system is being used by Latin American governments to challenge alleged corruption in Latin America. That is partially due to the weakness of prosecution and transparency efforts in the region.

2) They can be prosecuted in the US because the corruption flows at least partially run through the US. Mexican governors are laundering money through US properties. Venezuela's corrupt funds are laundered through US-based businesses.

3) It's all about money. These cases are not about getting a guilty verdict or jail time. They are about winning back money that was allegedly lost due to corruption.

Those trends are true regardless on the merits of the cases. The Duarte case clearly has some merit as the former governor did launder a lot of cash through the US, but it's also political as it is brought by his political opponents who now control the state government. The Venezuela case is more controversial, though it is fun to see a PDVSA-linked organization accuse PDVSA officials of corruption in order to make their case against other oil traders.

Good news and bad news for everyone in Colombia’s election


There are plenty of contradictions in the analysis below as the winners faced some negative events and the losers still found some positive aspects to their election performance. That’s what happens in a complicated situation when a presidential primary for two parties occurs concurrently with the national congressional election.Good news for Uribe: Ivan Duque, the candidate for the Centro Democratico, crushed his opponents in the primary and obtained a larger number of votes than expected, overshadowing Petro and the other candidates who had previously polled better than him.Bad news for Uribe: Duque was a big winner, but even as the CD won a plurality of the vote, they performed worse than expected and a number of high profile Uribistas lost their congressional races. The night was a victory for the CD’s presidential hopes but a loss for their Congressional influence.Bad news for Petro: The former mayor of Bogota did worse than Duque and his parties did worse than expected in the legislative elections.Good news for Petro: He won his primary. He also won the narrative as headlines at home and internationally placed him as one of the top two candidates in the presidential race.Good news for Vargas Lleras: Colombia’s former vice president has coattails, with his party gaining a significant number of seats in the legislature. Colombia’s political elite certainly noticed Vargas Lleras’s ability to turnout voters and his new support within the political system.Ok news for Fajardo: The parties supporting the former mayor of Medellin gained seats, but didn’t do that well compared to his opponents, but they also weren’t expected to do well. Even if none of Fajardo’s parties topped the 10% mark, the fact they met the minimum expectations threshold will keep Fajardo in the race for a spot in the second round.Bad news for Santos: The Partido de la U significantly reduced its number of seats in both the House and Senate, coming in fifth or sixth place..Good news for Santos: The two parties that most closely support the peace process and President Santos earned over 12% of the vote each. That is an impressive showing that beat expectations. That quarter of the electorate that supported these two parties may turn out to be quite influential in the first and second rounds of the upcoming presidential election.Bad news for the Peace Process: Though this is far from a single issue election, the two largest parties were opponents of the peace process.Good news for the Peace Process: As Adam Isacson writes, the smaller parties that support the peace process combined slightly edge out the large parties that oppose it.Bad news for the FARC. Just days after they pulled out of the presidential race, the former guerrilla group won less than 1% of the vote in the legislative elections. It was a major defeat for the group and its ideology.Good news for the FARC: They get five seats in spite of their poor political showing, an automatic win for their agreement to lay down weapons.Bad news for Colombia’s political party system: No party won over 20% and the votes were heavily divided among a number of parties with conflicting agendas. The voters for specific parties in Congress don’t fully align with how they will vote in the presidential elections. The next president will contend with a complex challenge of building a legislative majority among all these parties and their internal factions.Bad news for Colombia’s election system: They ran out of ballots and had to photocopy them. Over 1,300 reports of irregularities including vote buying. The technical aspects of the system broke down as more people turned out to vote than expected.Good news for Colombia’s electoral system: Perhaps the previous criticism is overblown. There was high turnout, which is a good sign for the country’s democracy, and the votes (even on photocopied ballots) were counted within hours.[...]

Falcon vs the boycott


Henri Falcon has a strong op-ed in the NYT about why he is choosing to run for president. Falcon's key messages are that he is giving Venezuelan voters a choice, that boycotts don't work, that the current government has failed and he wants to provide pragmatic solutions to fix the countries many problems and that the country needs reconciliation.

Of course, writing an op-ed in English in a US media outlet isn't exactly aimed at the average Venezuelan voter. Instead, he appears to have two goals:
1) Appealing to an elite group of Venezuelan voters both inside and outside the country who read the media and shape the opposition's opinion
2) Appealing to US politicians to not actively oppose his candidacy and view his campaign as a legitimate form of resistance.

The Summit question and Venezuela links


The Inter-American Dialogue's LatAm Advisor asked me to respond to a question about whether Peru did the correct thing disinviting Maduro to the Summit of the Americas. Here is my response published yesterday:
Whether or not Maduro attends doesn’t really matter. This hemisphere wastes too much time every Summit of the Americas debating who is or isn’t invited and not enough time talking substance. Attendance and a speech by Nicolás Maduro wouldn’t legitimize his authoritarian rule or his undemocratic election plans. Peru’s rescinding of the invitation doesn’t feed any hungry Venezuelans, assist refugees or speed up a transition back to democracy. The summit should be discussing real measures to place pressure on Venezuela’s undemocratic government and ease the largest humanitarian crisis in this hemisphere. Those measures should include more coordinated sanctions on individuals as well as aid delivery options that undermine the Venezuelan government’s current blockade of food and medical assistance to its own population. On the issue of Venezuela and beyond, the summit’s big challenge remains moving past arguing over symbolic initiatives to discussing and implementing real policies that affect the lives of people in this hemisphere.
Lots of other news about Venezuela today. Here are a few links of the coverage in English:
Big NYT magazine article on Venezuela and Leopoldo Lopez.
A Marco Rubio op-ed in the Miami Herald basically calls for a military coup.

WashPost also has an analysis of the situation in Venezuela.

The MACCIH needs Almago's backing


Eric Olson offers three realistic improvements to the anti-corruption effort in Honduras following the resignation of MACCIH Spokesperson Juan Jimenez. I absolutely agree.

In addition, it's important for OAS Secretary General Luis Almagro to recommit to anti-corruption efforts in Honduras and around the hemisphere. The MACCIH cannot succeed without strong support from the OAS. After taking a brief bold stand immediately after the presidential election, Almagro has allowed himself to be uncharacteristically pushed around on issues of Honduran democracy and corruption in recent months.

I get the sense that Almagro believes he needs to choose his battles carefully and his desire to focus on helping Venezuela has led to him backing down on Honduras. The reality is that his credibility on the Venezuela issue is impacted by his commitment to the same principles across the hemisphere. He needs to take some of the leadership and grit he's shown on Venezuela and apply it across the board to all governments that abuse democracy and human rights.

Pessimism on NAFTA renegotiations


A rough call between Trump and Peña Nieto led to Mexico’s president cancelling his planned trip to Washington to meet in person.

CFR’s Edward Alden writes in Politico that the Trump administration is strategically stalling on NAFTA renegotiations. They want the Mexican election and US midterms to interfere in the renegotiations and delay the effort. By creating years of uncertainty, they are trying to undermine confidence in the agreement. Businesses with US clients are more likely to invest in the US if they don’t know how the rules in Mexico or Canada will affect them.

Democrats in the US are pushing for stronger labor protections in any NAFTA renegotiation. Canada and Mexico are both preparing for a potential NAFTA collapse.

Moyano vs Macri


Union leader Hugo Moyano organized a large protest against the government of President Macri and his proposed economic reforms. Moyano, who also faces a number of corruption allegations, wants these protests to become a new political opposition movement.

Macri’s response to the protests was to have his government offer technical solutions and compromises to the union’s claimed grievances. Obviously, Macri doesn’t expect Moyano to suddenly start negotiating in good faith. Instead, Macri wants Argentina’s voters to see the contrast between the union leaders blocking the streets and the president who is attempting to find solutions.

While Macri’s economic reforms aren’t popular, neither are the protests. Most people understand Moyano to be corrupt and self-interested. Argentina’s voters showed in the midterms that they are willing to give the government some room to work. For those reasons, Macri’s response to Moyano's protest works for now. However, there is a limit to the time and patience that voters will give the president. Economic results matter and eventually a more credible opponent will surface.

Notes on Colombia and Venezuela issues


As bad as the refugee crisis looks today, Venezuela has still not hit bottom. It is likely that this refugee crisis gets worse in the coming months.

On top of monitoring the human suffering (WSJ, NYT, NPR), analysts need to consider how the math of the refugee crisis impacts their analysis of the upcoming elections and of stability in Venezuela in general. I have been running calculations related to food distribution among the military (because hungry soldiers will rebel). However, if a significant portion of the thousands of soldiers and national guardsmen who have deserted their posts in the past three months flee to Colombia instead of remain in country, that changes the analysis.

Similarly, citizens who would vote against the government if the elections were fair are instead voting with their feet to leave the crisis behind. That changes the strategy for how the government plans to win and/or steal the election.

One big controversy in the past week has been the presence of Venezuelans in the ELN and the presence of the ELN in Venezuela. The ELN appear to be recruiting Venezuelans including members of the military and national guard to commit acts of violence inside of Colombia. The group has also expanded its presence inside of Venezuela’s borders and is operating criminal networks related to food distribution and weapons trafficking.

The Trump administration’s proposal to cut aid to Colombia is horrific. This is a country that is recovering from decades of conflict and dealing with the effects of a failing state on its border. Congress needs to reverse the cuts and add assistance to Colombia.

Beyond the US, the international community should provide additional financial aid and technical assistance to Colombia to handle the refugee crisis from Venezuela along with its own large population of internally displaced people. 

Linking Rio security and pension reform


Brazil’s government announced a federal intervention into Rio, with the military taking over the lead on security. A wave of high-profile violence in recent weeks highlighted the decline in the city’s security. The government says the intervention may be used as a model for security in other cities. Opposition members of Congress say the Temer government failed to follow correct protocol and are calling on courts to overturn the intervention.

The federal intervention means that the Congress is not allowed to vote on constitutional issues including the proposed pension reform. But that pension reform is widely unpopular and lacked the votes in Congress anyway. It’s possible that the federal intervention is just an excuse for the government to skip the losing vote.

US election interference


One of the common refrains in response to charges of Russian interference has been to talk about how the US also interferes in foreign elections. This article does a good job acknowledging the US election meddling of the past while also placing the modern US democracy promotion efforts on different footing with Russia’s election meddling. In its most idealized form (perhaps still not quite reality), the US is no longer trying to pick winners or topple popularly elected democratic leaders, but it is trying to disrupt authoritarians who won’t allow voters to make free and fair choices. US efforts to back civil society groups and promote free media that challenge authoritarian leaders are certainly much more positive forms of interfering than how the US acted during the Cold War or the modern efforts by Russia.

Not mentioned in the article, however, is the modern US tendency to selectively promote democracy when convenient. Corrupt or authoritarian leaders who claim to be pro-US get a much weaker version of democracy promotion efforts. The US backing of the recent election in Honduras is the current shining example of this hypocrisy. That selective democracy promotion undermines the US pro-democracy position in places like Venezuela and Cuba.

Authoritarian leaders around the world use the darker moments of US history along with the modern charges of US hypocrisy to then call for a complete US withdrawal from all efforts to promote democracy. Promoting a US withdrawal from the world is a convenient argument for US antagonists. I’d rather see the US engage actively and stand up for its values more consistently, even when it means calling out the abuses of friends and allies.

Europe's decline of political parties


This article about the decline of traditional parties in Europe rang very familiar as someone who has watched a similar decline across Latin America over the past decade plus. Anyone interested in Latin America should take time to read it.

Latin America has certainly faced the threat of populists at the extremes who have taken advantage of the decline of traditional parties. One possible next step that has occurred in Latin America has been for its centrists to take up the non-traditional party banner. PPK in Peru is great example of the problems that centrists face when they embrace the inchoate and personalized party system model.

This year's round of elections has already broken the traditional two parties in Costa Rica and appears ready to further hit the traditional parties in Colombia and Brazil.

Venezuelan elections in April


Venezuela’s government announced it will hold a presidential election on 22 April. This announcement occurred without an agreement between the government and opposition over the conditions of the election.

As I wrote previously, voters and political leaders in Venezuela should participate, even if the conditions are undemocratic and fraud is likely. Maduro and those around him are hoping for a boycott that keeps his opposition from the polls and makes stealing the election easier. Stealing an election in which the opposition participates is more difficult and places much greater pressure on the government. The government knows that even if they successfully steal the election, the resource use and tensions created by stealing that election could lead to their downfall.

Alvarado vs Alvarado in Costa Rica's second round


My comments on the Costa Rica election were published in the Latin America Advisor yesterday morning. Here is a copy:
Four weeks ago, both of these candidates were in the single digits of support, running fifth place or lower in the polls. A combination of social conservatism and nationalism, particularly by rural voters, propelled Fabricio Alvarado into first place in the polls following the IACHR’s ruling on gay marriage. In contrast, Carlos Alvarado managed to rise to second place by taking a risky strategy of running on the agenda of President Solís. Even in an anti-incumbent environment, enough people supported Solís and his more liberal stances on social issues to give Carlos Alvarado the lead over the traditional PLN.

Though the PRN will try to keep social issues in the spotlight, Fabricio cannot win on his opposition to gay marriage alone. The second round is likely to return to traditional issues, including the economy and corruption. Both candidates will need to engage in creative political dealmaking to build coalitions with smaller parties that can bring them over the 50 percent mark. Only 65 percent of voters turned out in the first round. Given the indecisiveness of first-round voters, it’s possible that even more voters will stay home in the second round, as happened in 2014. That would make political turnout machines much more important.

Of note in this matchup, the PLN of former Presidents Oscar Arias and Laura Chinchilla came in third place in the presidential race, but will have a plurality of the legislative seats (17 out of 57) in the next Legislative Assembly. The PLN’s national support and party machinery make it a potential kingmaker in the second round and a critical legislative ally or opponent of whichever candidate wins."

Correa loses, Moreno wins


In Ecuador, all seven referendum questions passed with over 60% of the vote. That includes a question to limit presidential terms that prevents former President Correa from running for office again. It’s a big victory for President Moreno and will give a temporary boost to his other agenda items in Congress.

To add to Correa’s defeat at the polls, Ecuador’s Attorney General is calling Correa in to testify today in the Petrochina corruption case. The former president is forced to testify because he returned to Ecuador from Europe to campaign against President Moreno’s referendum. Correa denies any corruption in the seven contracts with Petrochina. Investigators have collected over 2,500 documents that they say prove Ecuador received a bad deal from the Chinese.

Correa argues that the referendum was illegal and the corruption case is proof the government is politically persecuting the former president. Not many people feel sorry for the former president given how he treated his political opponents including the media and indigenous groups while he was in office. Correa’s treatment is fully within the norms he set when he was president.

Still, it’s worth considering Correa’s point. Moreno’s populism, even if it is more centrist than his predecessor, is not necessarily better for the country’s institutions. Reestablishing presidential term limits is positive for the country’s democracy, but doing so via popular referendum to get around the Congress is not. There was plenty of corruption during the Correa administration, but it’s also quite plausible that the Moreno administration is finding corruption investigations to be an incredibly useful weapon against the president’s political opponents.

Tillerson outlines his Latin America agenda


Secretary of State Rex Tillerson traveled to America’s backyard, Texas, to give a speech prior to leaving on an extended trip to our neighbors in Latin America. Tillerson offered extended remarks on his Latin America policy, with this being the organizing statement:
“So today I want to focus on three pillars of engagement to further the cause of freedom throughout our region in 2018 and beyond: economic growth, security, and democratic governance.”
That’s not very far off from former Vice President Biden’s regularly statement formulation of building “an Americas that is solidly middle-class, secure and democratic.” The framework has not changed much, even if the details have.

The three most controversial things Tillerson said involved: 1) praising the Monroe Doctrine, 2) stating that militaries have led peaceful transitions in Latin America’s past (and might in Venezuela today) and 3) saying Honduras’s election was free and fair. Most of the media coverage will focus on those comments, all made during Q&A time, but the rest of the speech and comments were important and just as reflective of his approach. I think the focus on a few controversial remarks shouldn’t take away from what was overall a decent speech providing a roadmap to understand how the US is currently conducting policy in the hemisphere.

A few other comments:

Mexico, Colombia, Venezuela, Cuba. Those are the four countries that dominated the speech and the comments. There were certainly other comments about Brazil, Central America, the Caribbean and anti-corruption issues. His opening personal comments about Peru were a great touch. But it's clear from the remarks which four countries dominate the time and attention of the secretary when he thinks about the hemisphere.

Serious confusion over the “war on drugs” remains. Tillerson’s explanation of US policy implies that because people in the US are dying of synthetic opioids from China, we need to eradicate coca from Colombia to stop the business model of the violent cartels in Mexico. Trying to lump all these problems together causes serious issues in developing, implementing and measuring the impact of policy. This isn’t a new problem for US policy under the current administration, but worth noting that the problem continues.

Tillerson’s very positive comments about NAFTA showed him to be on the pro-trade side of the administration. While he would never say this publicly, the secretary’s take on NAFTA renegotiations resembles the Obama administration’s TPP agenda far more than the Trump administration’s protectionist agenda.

Tillerson remains an oil executive. He spent paragraphs discussing energy in the hemisphere but it was all a lot of talk about oil and natural gas without a single mention of solar, wind or other renewable energy. That said, Tillerson did acknowledge the effects of climate change in his brief comments about science and health diplomacy.

CDC reducing operations in the hemisphere


The Washington Post builds on a WSJ story from last month reporting that the CDC is cutting back its global health security initiative. The only country in Latin America that will remain covered is Guatemala. While the full list of cuts is not available publicly, it appears from their website the CDC will be cutting back current operations in Haiti, Colombia and Peru.

The Obama administration policy was intended to improve global health by identifying and responding to disease outbreaks more swiftly. Cutting back on pandemic preparedness is a poor decision. Other countries in the hemisphere plus the OAS and PAHO should work to keep the programs up if possible.

POLL NUMBERS!!! Undecideds rule a divided Costa Rica


The first round of Costa Rica’s presidential election takes place this weekend and the undecided voters are the current plurality. The CIEP-UCR poll says 37% of voters remain undecided while the OPol poll has 19% undecided. With undecideds factored in, no candidates receive over 20% of the vote in any major poll conducted in January. Five candidates have between 5% and 20% support. Graphic below is the average of the final polls from four different pollsters in January.
The top candidates will win higher percentages of the valid vote on Sunday only because the undecided voters eventually have to decide or simply not vote. Once the first round is over, it will be interesting to see how voters view the two remaining candidates.

The legislative elections are being held concurrent with the first round. This division of voters along with Costa Rica’s proportional representation system will lead to a very divided legislature for whomever is elected the next president.

Venezuela currency and food notes


Venezuela announced it is ending its DIPRO 10:1 exchange rate  Given the current free market exchange rate of Venezuela’s currency (over 250,000 to 1 and climbing), the DIPRO rate was the government handing out free money. It was as if the government handed me more than a US $100 bill for every penny I gave to them.

Instead, the government is restarting the DICOM system which is only slightly less ridiculous in the current hyperinflation climate. It’s not a sustainable solution, but the government isn’t looking for a sustainable solution. They just need to make it until the April elections.

That deadline is key. Venezuela’s Bolivar is a dead currency. It is essentially worthless in the sense that the value of whatever amount you are holding will approach zero within a short time frame. But the government believes that they can keep the dead currency system running on life support just long enough to hold elections.

The only currencies that matter in Venezuela right now are foreign currencies and food. The country needs to bring in more foreign currency and then use that foreign currency to import food. The internal consumer market is a mess because of the currency situation, but that fact is less important if there is no food to buy.


How does the current situation in Venezuela change? I’ve been asked some variation on that question for years. Recently, one scenario I have laid out is that the situation will definitely change if there is a moment in which the armed population that cannot eat outnumbers and/or outguns the armed population that can eat. It’s both a quantitative equation and a fairly Hobbesian analysis. There are obviously better scenarios the hemisphere should be working towards, but that starving army moment is the bottom line of what forces change if nothing else does.

Today’s Miami Herald article suggests that the situation isn’t completely unlikely:
Soldiers generally eat in their barracks, but food shortages are forcing some to eat fewer than three meals per day, even though the armed forces are in charge of food distribution throughout the country.

Food services inside military installations “are only receiving 60 percent [of their normal supplies]. There was a cut of 40 percent because they just have no way to provide that 100 percent,” said Garcia Plaza.
The article also points to the government ordering soldiers to remain in their quarters and the fact 2,000 deserted just over the Christmas holiday.

ELN attacks resume as ceasefire ends 3


Colombia’s ELN rebels are responsible for three bomb attacks against police stations that killed seven and wounded dozens more over the weekend, the nation’s defense minister said on Monday, as the government weighs the future of peace talks with the group.
1) Attacks like these make the prospect of renewed peace talks less likely. The Colombian government was already opposed to holding talks under threat and the population is not going to permit a deal with a group that conducts attacks like these.

2) This attack likely strengthens the candidates who are against peace deals in the upcoming congressional and presidential elections. Voters will refocus on security issues and demand greater government action to stop the attacks and bring the perpetrators to justice. Those who have opposed peace negotiations will get an “I told you so” moment.

NAFTA and 5G


Axios reports the Trump administration is considering nationalizing 5G technology and building it on a national scale in the coming years. The issue should impact the current NAFTA renegotiations.

Telecom nationalism and protectionism is an issue in North America. All three countries have fairly closed and regulated markets that have limited competition. Free market advocates have pushed for greater competition to improve service for consumers in all three markets. Perhaps the biggest cross-border deal in recent years involved AT&T’s acquisition of Mexico’s Iusacell. That only happened after a difficult telecom reform under the Peña Nieto administration.

The reported proposal flips the table on that whole issue. It suggests the US is going to stop advocating for greater free markets in its neighbors’ telecom industries. Instead, the US is going to nationalize an important technology of the telecom industry in the US, use government funds to build the network that it will rent to private industry, and then encourage its "democratic allies" (hopefully including Canada and Mexico) to join in that same model. I imagine Canada and Mexico will have something to say about that.

Having just learned about this proposal, I don’t have a position on it yet. What I do know is that the proposal could send the US and its neighbors back to the drawing board when discussing telecom issues in NAFTA. The impact of nationalizing and government funding for 5G doesn’t stop at the US border.

POLL NUMBERS!!! Referendum in Ecuador has support


Polls from both Cedatos and Eureknow suggest 70% or greater support for all seven questions being asked in the Ecuador referendum being held on 4 February.

Former President Correa is in the country campaigning hard for the “No” side of the vote, but his popularity seems to have run out. From WPR:
In his chess match with Correa, Moreno’s referendum may be checkmate. Among other questions, the referendum seeks to bar anyone convicted of corruption from public office, restructure an independent branch of government responsible for the appointment of many public officials and ban indefinite re-election, which the National Assembly voted to allow in a constitutional amendment a little more than two years ago. Re-imposing term limits is widely interpreted as an attempt to prevent Correa from returning to office. 
A victory for Moreno would not just pass the various laws and be a blow to his predecessor. It would solidify Moreno's legitimacy after a very narrow and controversial electoral win. A large margin would also give him political capital to continue reforms in the Congress. 

Hernandez and Zelaya quietly join forces to sink anti-corruption investigations


The OAS Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) has been actively investigating several corruption allegations including the diversion of funds from the social security office (IHSS).In response, the Honduran Congress passed a law that will make it far more difficult to prosecute members of Congress and could halt corruption investigations into dozens of members of Congress. The initiative was pushed through by the National Party of President Hernandez, but it appears to have had a surprising ally in the fight.On top of the IHSS investigation, the MACCIH was also beginning to investigate Odebrecht contracts in Honduras including a large payment that occurred during the 2005-09 Zelaya government. I predicted back in 2015 that former President Zelaya would be a likely target for an independent anti-corruption investigative body. With the Odebrecht investigation, that looked close to occurring prior to the Congress’s passage of the impunity law this week.Politics makes strange bed-fellows and suddenly blocking the corruption investigations was in the interests of both Hernandez and Zelaya.As El Faro reports, while much of Libre boycotted the Congressional proceedings, Zelaya stuck around to negotiate directly with the head of Congress. None of the votes were recorded, so it is unclear what was said or how the former president voted on the measure. Libre’s statement today condemns the measure but also includes criticism of the MACCIH, a contrast to the Liberal Party that is supporting the anti-corruption investigations that are occurring. While Hernandez and his party are the main culprit in this controversy, it appears that the former president who is willing to fight JOH on every other issue is soft-peddling on this one for his own benefit.The OAS and others in the international community are troubled by the passage of the impunity law and the attacks on the MACCIH. The MACCIH is exactly the sort of institution that can help rebuild Honduran democracy over the long term even amid the controversy over Hernandez’s reelection and inauguration this weekend. It’s important that the international community pressure all sides in Honduras to continue independent investigations into corruption wherever they may lead.Edit: A few minutes after I published this blog post The Economist published their own piece suggesting there is a backroom alliance between Mel Zelaya and JOH:Tegucigalpa is buzzing with rumours that he has struck a private deal with Mr Hernández. Mr Zelaya is thought to be planning a presidential run in 2021. That cause might be better served by amassing influence and money with Mr Hernández’s help rather than by leading protests. The president could give Mr Zelaya a say in picking appointees to such important jobs as chief prosecutor. He could allow Mr Zelaya’s Libre party, a constituent of the Alliance, to gain control of congressional committees that allocate money. In return, Mr Zelaya would wind down the protests and let Mr Hernández govern.[...]