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Silvina Batakis becomes Argentina’s new Economy Minister

Ignacio Portes
Jul 04, 2022 9:28

Argentina has a new Economy Minister, as the government announced late on Sunday that Silvina Batakis would replace Martín Guzmán following the latter’s controversial resignation on Saturday, after a year-long clash with Vice President Cristina Kirchner.

Ms. Batakis was Economy Minister of Buenos Aires province under Daniel Scioli between 2011 and 2015, in a tenure that included some clashes with then-president Ms. Kirchner. She has, however, become much closer to the current vice-president as of late.

Throughout the Alberto Fernández presidency, Ms. Batakis worked under the wing of Interior Minister Wado de Pedro, a very close ally of Ms. Kirchner’s who only dissented from the VP on one issue: supporting Argentina’s historically large deal with the International Monetary Fund.

This means that the deal is unlikely to be repudiated, but other aspects of Argentina’s macroeconomy management could be handled in ways that conform more to Ms. Kirchner’s wishes – though no details of Ms. Batakis economic plans have been leaked to the press so far.

The new minister will have to deal with a massively complex macroeconomic situation, including a crisis at Argentina’s Central Bank and the renewal of billions of peso-denominated debts in the Treasury, all while dealing with spiraling inflation, currently above 60 percent, which the government has tried to curb via rising interest rates, price controls and temporary spending freezes – with few positive results so far.

Martín Guzmán quits Argentina’s Economy Ministry

Ignacio Portes
Jul 02, 2022 18:30

After a dramatic economic week in which Argentina had to close off its imports to meet reserve targets to fulfill its commitments to the International Monetary Fund and in the middle of a bloody internal fight with Vice President Cristina Kirchner, Economy Minister Martín Guzmán announced his resignation on Twitter today.

Mr. Guzmán published a long text highlighting what he sees as the achievements of his three-year tenure, from the deal to restructure Argentina’s debt with private bondholders and the IMF — to navigating the Covid and Ukraine crises. He thanked President Alberto Fernández for his support.

While the letter did not contain any obvious digs at the vice president, its timing said it all: it came right as Ms. Kirchner addressed a crowd of supporters in a speech laden with jabs at President Fernández and his allies.

Mr. Guzmán’s resignation comes only weeks after former Production Minister Matías Kulfas, another close ally of Mr. Fernández, left the government. These moves raise significant question marks about the future of the Argentinian economy in the lead-up to the 2023 presidential elections.

Mr. Fernández could opt to hand power to an ally of Ms. Kirchner, who would likely spook markets further, or try to look for a stabilization plan with an economist closer to House Speaker Sergio Massa, a pragmatist Peronist who is also crucial in the ruling coalition.

Whoever takes office will have to deal with an inflation rate expected to reach at least 70 percent this year, a run against the peso and against the country’s Central Bank dollar reserves, an energy crisis, and a debt crisis that continues despite Mr. Guzmán’s restructurings.

Under fire, Castillo leaves Perú Libre party

Ignacio Portes
Jul 01, 2022 12:31

Political instability is back in Peru after President Pedro Castillo tendered his resignation to the Perú Libre party, which he rode to the country’s top office in last year’s election.

“I have presented my irrevocable resignation from Perú Libre. The decision is in line with my responsibilities as a president of 33 million Peruvians. I am respectful of the party and the bases it built during the campaign,” the president said yesterday.

Mr. Castillo was forced out by Vladimir Cerrón, the real leader of the party, who publicly demanded his resignation after saying he was not following its political principles. 

“The policies carried forward by this government are not in line with its campaign promises,” Perú Libre’s original communiqué said. Mr. Cerrón is a Marxist-Leninist supporter of Cuba and Venezuela, and his political positions led to clashes with the more flexible Mr. Castillo on multiple occasions since the beginning of his term.

The president, a rural teacher who won popularity as a union leader, had used Cerrón’s party to structure his presidential campaign, despite it seeming unlikely to win when it was launched.

Mr. Cerrón’s votes were also fundamental throughout the multiple battles for survival Mr. Castillo faced in Congress, including two impeachment attempts.

Ecuadorian government, indigenous groups reach agreement to end protests

Lucas Berti
Jul 01, 2022 11:43

The Ecuadorian government and representatives of Conaie, the country’s most important indigenous organization, finally reached an agreement to stop nationwide protests that had convulsed the country for 18 days and resulted in six deaths and million-dollar economic losses.

Talks between the government and indigenous leaders began on Monday but were suspended a day later after a soldier was killed during a demonstration, and there is no clear path to a resolution of the crisis. A new sit-down took place on Thursday, with mediation by the Ecuadoran Episcopal Conference.

The government and Conaie signed a joint document that officially paused the riots. The deal establishes a 15-cent reduction per gallon in fuel prices, more than Mr. Lasso’s original 10-cent cut.

The government will also declare a state of health emergency and review its oil and mining sector policies, in view of environmental damages and impacts on indigenous communities. 

A 90-day deadline was given to the Lasso administration to solve pending measures. Conaie also said it will “remain vigilant” and that new protests could be summoned in the future if the government fails to honor its promises. 

Petro names social-democrat Ocampo as future Economy minister

Ignacio Portes
Jun 30, 2022 13:47

The administration of Colombian President-elect Gustavo Petro is taking shape, as key ministerial announcements have begun. On Wednesday, he named José Antonio Ocampo as his future Economy minister.

Mr. Ocampo holds a Ph.D. in economics from Yale University and currently teaches at Columbia. The future minister also has vast experience in public administration, having served under the country’s Liberal Party administrations of the 1990s.

While his résumé has led the international press to tout Mr. Ocampo as “market-friendly,” he can still clearly be seen as a center-left figure. 

Having served as Economy minister under the social-democratic administration of Ernesto Samper between 1996 and 1997, he has co-authored books with Nobel Prize winner Joseph Stiglitz, a critic of the neoliberal turn in the field of economics since the Washington Consensus.

Mr. Ocampo has experience working at the Economic Commission for Latin America and the Caribbean (ECLAC), a broadly liberal-progressive multilateral organization under the UN banner, as well as other international institutions. At home, he has served Colombia’s Central Bank as well as in ministries of Agriculture and Planning.

After a campaign filled with speculation about Petro’s potential radical-left connections, Mr. Ocampo’s announcement was positively received across the spectrum, from business and farming organizations, to centrists such as Sergio Fajardo. 

Among Mr. Ocampo’s immediate priorities will be the initiation of Mr. Petro’s ambitious tax reform proposals, similar to Chile’s Mario Marcel, another credentialed economist with links to the country’s center-left, seen as a moderate option compared to the alternatives in the winning left-wing coalition.

Colombia’s Truth Commission files historic report on political violence

Ignacio Portes
Jun 29, 2022 11:21

Colombia’s Truth Commission made history on Wednesday after presenting its final report on political violence in the country between 1985 and 2018, shortly after a peace agreement was reached between the state and most armed groups. 

The report — a large-scale, 10-volume job that took more than three years of work — counted 450,664 murders between 1985 and 2018, although under-reporting of cases could mean a higher real number of victims, closer to 800,000.

Paramilitary groups were responsible for 45 percent of the murders compiled by the commission (205,028), while left-wing guerrillas were responsible for 27 percent (122,813), led by the Revolutionary Armed Forces of Colombia’s (FARC) 96,952 victims. Another 12 percent died at the hands of state actors.

Looking ahead, the report recommended negotiations with the still-active National Liberation Army (ELN) guerrilla group, reestablishing international relations with Venezuela, an end to drug prohibitionism, and changes in Colombia’s armed forces.

President-elect Gustavo Petro was among the attendants at the presentation, declaring that the commission’s recommendations should be followed to prevent a repetition of the conflict.

To fight inflation, Uruguay greenlights Brazilian bone-in meat imports

Lucas Berti
Jun 28, 2022 14:21

Uruguay’s Livestock, Agriculture, and Fisheries Minister Fernando Mattos recently announced that Montevideo has authorized the import of Brazilian in-bone meat in order to have beef cuts “with more quality, but more accessible to the Uruguayan consumer.” 

The decision was taken as Uruguay — one of the countries with the highest yearly per capita meat consumption rates in the world — deals with a hike in meat prices in 2022. The rising costs are heavily associated with the economic effects of the war in Ukraine.

In March this year, the inflation rate of some beef cuts reached 17 percent, close to a 10-year record. In April, President Luis Alberto Lacalle Pou sent Congress a bill to suspend VAT taxes on the famous asado de tira, one of Uruguayans’ most consumed cuts.

Now, the renowned meat producer is turning to Brazil for new alternatives. Mr. Mattos said that the imported meat will come from the states of Rio Grande do Sul, Paraná, Mato Grosso, and Rondônia, all regions that have “foot-and-mouth disease-free sanitary status without vaccination.” 

According to him, these large Brazilian zones have “better sanitary conditions” than Uruguay. 

“The benefit is to have a quality product with good sanitary conditions that is cheaper for the population,” he said, recognizing that meat is one of the most important items on Uruguayan tables. The recently-announced resolution does not establish tariffs or import restriction quotas. 

Young Central Americans don’t want to migrate, study says

Lucas Berti
Jun 28, 2022 9:52

A recent study conducted by British NGO Save the Children shows that most of the children and teenagers living in Central American nations such as Guatemala, El Salvador, and Honduras would rather remain in their home countries than migrate to escape from violence and poverty.

The survey collected the opinions of 122 people between 7 and 19 years of age and found that 43 percent of the respondents “intend to stay” where they were born, against 24 percent who have a “clear intention” to leave. 

The report highlights that the decision is consistent even in “very poor and unsafe areas, where people suffer the most.”

Save the Children Regional Director for Latin America and the Caribbean Victoria Ward cited “family roots” and “ties to the local community” among the main reasons why young people would rather stay. 

According to Unicef, the dangers for young migrants have multiplied during the pandemic — something laid bare by the discovery of a tractor-trailer in San Antonio, Texas on Monday, filled with the bodies of at least 46 migrants believed to have been traveling into the U.S. from Mexico.