Sunday, October 28, 2018

Brazil election: Jair Bolsonaro, hard-right nationalist, wins the presidency. - The Washington Post

Brazil election: Jair Bolsonaro, hard-right nationalist, wins the presidency. - The Washington Post

Saturday, October 6, 2018

A Guide to 2018 Latin American Elections: Brazil | AS/COA

Thursday, July 19, 2018

Protests over fuel prices in Haiti derail the government’s reforms - A gamble gone wrong

Protests over fuel prices in Haiti derail the government's reforms - A gamble gone wrong

Protests over fuel prices in Haiti derail the government's reforms

Jovenel Moïse faces the same obstacles that have bedevilled his predecessors

Jovenel Moïse faces the same obstacles that have bedevilled his predecessors

OF ALL the bets placed on the football World Cup, the biggest gamble took place in the Caribbean. Lacking a competitive side, many football-mad Haitians have adopted Brazil as their team—some because they share African roots with Pelé, Brazil's greatest player ever, others because Brazil has given Haiti financial and military aid. With the public glued to their screens watching the seleção on July 6th, the Haitian government discreetly raised fuel prices by around 40%.

A Brazilian victory might have left Haitians too ecstatic to protest. Instead, Brazil fell to Belgium. Soon after, Port-au-Prince burst into flames. Protesters burned cars, looted shops and closed much of the country with roadblocks. Jack Guy Lafontant, the prime minister, quickly reversed the policy, but could not save his job; he resigned ahead of a no-confidence vote on July 14th. Early estimates put the damage at some 2% of GDP. Three people have died.

Latin American nations far sturdier than Haiti have been brought to a standstill by protests over fuel prices. But in the poorest and most unequal country in the Americas, the unrest is particularly acute. Haiti is still rebuilding itself after an earthquake in 2010 that killed perhaps 200,000 people. And as the flow of aid from foreign donors has ebbed, so too have funds from Venezuela, which sent Haiti $300m a year until it plunged into an economic crisis.

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Jovenel Moïse, the president, took office last year shortly after another disaster, Hurricane Matthew. Mr Moïse grew up in Haiti's poorest region, and ran a banana plantation until 2015. The presidency is his first elected office. Upon coming to power, he combined unrealistic promises, such as providing uninterrupted electricity to every household, with "shovel-ready" initiatives like building roads and canals in the countryside. But the endemic weakness of the state may prevent him from achieving his goals great and small.

The wealth of Haitians

One of Mr Moïse's first moves was to strike a deal with the IMF, which required Haiti to wean itself off the fuel subsidies that consume over a tenth of public spending. In 2011 the government stopped pegging domestic prices to global oil markets, leaving it to foot the bill for any rising costs; crude has appreciated by 50% during the past year. Some 85% of the subsidies go to the richest 10% of Haitians, who tend to own cars. Wilson Laleau, the president's chief of staff, says that 6,000 barrels a day are smuggled to the neighbouring Dominican Republic. Ditching subsidies would free $350m a year badly needed elsewhere: Haiti spends just 5% of GDP on health, education and social protection. Honduras and Nicaragua, the two poorest countries in mainland Latin America, spend 15% and 10% respectively.

Helping the poor by abolishing a practice that benefits the rich should be an easy sell. But by its own admission, the government botched its pitch. It announced the price increase but did not mention its countervailing policies, such as compensation for the poor and working class, and spending the savings on social services.

Even a better-handled rollout might not have prevented lawlessness, given the weakness of Haiti's security forces. UN peacekeepers, who had patrolled the country since 2004, withdrew last October. The foreign troops were not popular. Some forced children into sex in exchange for food and medicine; others brought cholera, causing an epidemic that killed 10,000 people. Nonetheless, they kept the peace and buoyed the economy by filling cafés and restaurants. In their absence, it fell to the underpaid police force to impose order (Haiti's army was abolished in 1995). Its inability to control the riot raises doubts about how it will handle future unrest.

Some government officials wonder whether anyone organised the protests—possibly fuel smugglers, political rivals or powerful families that benefit from the subsidies. Many of the roadblocks and stacks of burning tyres were in place within minutes of the end of the football match. Even if the uprising was spontaneous, however, it makes clear that the president will struggle to implement his agenda.

Mr Moïse's "Shaved-Head Party"—so called because both he and his predecessor sport the party's look—was founded only in 2012, and has built little political infrastructure. Before trying to restore the subsidy cuts, savings from which are already counted in the budget, Mr Moïse will need to win approval for a new prime minister—Haiti's 21st since 1988.

And the government is too poor for the president to buy popular support. Just 70,000 tax returns are filed each year in a country of 11m people. Foreign donors often prefer to supply their aid through NGOs, rather than see a portion lost to corruption. This prevents the state from strengthening its capacities.

Without money or patronage, Mr Moïse must rely on personal popularity. Although he won the election of 2016 easily, turnout was around 20%. He has sought to drum up support by holding rallies around the country under the "Caravan for Change" banner, promoting the government's good works. Unfortunately, the fuel-price fiasco has set back these efforts.

Near the presidential palace, three men chat on a park bench. Patrice Ciresmond, a 48-year-old who cannot find work, sat in the same spot to watch the ill-fated World Cup game on a government-provided screen. "They were waiting for when we were about to be happy because of Brazil, and then they put the knife in our belly," he says, as his friends nod along. "They don't want us to laugh even just once."

This article appeared in the The Americas section of the print edition under the headline "A gamble gone wrong"

Wednesday, July 18, 2018

IMF Staff Concludes Visit to Haiti

IMF Staff Concludes Visit to Haiti

IMF Staff Concludes Visit to Haiti

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. This mission will not result in a Board discussion.

  • Haiti's growth outlook remains positive: GDP growth has accelerated slightly to reach about 2 percent, supported by public investment.
  • Solid economic policies implemented by the authorities under the Staff Monitored Program are expected to catalyze external resources provided by Haiti's technical and financial partners.
  • Haiti needs to continue to implement structural reforms to sustain economic growth and reduce poverty more broadly.

A mission of the International Monetary Fund (IMF), led by Mr. Chris Walker, visited the northern region of Haiti (Cap Haitien, Milot, Caracol, Ouanaminthe) and Port-au-Prince from June 3 to 15, 2018 to conduct the 2018 Article IV consultation and to hold discussions on the first review of Haiti under its Staff Monitored Program (SMP).

At the end of the visit, Mr. Walker issued the following statement:

"Based on preliminary results, Haiti's growth outlook remains positive: GDP growth has accelerated slightly, buoyed by public investment, to reach about 2 percent for the current fiscal year ending in September. Annual average inflation remains below 15 percent. The current account deficit is expected to be contained at a relatively high level of 4 percent of GDP this fiscal year amid investment-related imports and higher world prices for petroleum products and grains, which constitute Haiti's main imports

"The medium-term outlook is generally positive, linked to Haiti's potential for more rapid growth following the envisaged implementation of structural reforms, but downside risks are significant. Economic activity is expected to accelerate in 2019 on the back of both public and private investment. A reduction of the public-sector deficit should allow the private sector to benefit from new financing opportunities. The reduction of the fiscal deficit should also limit monetary financing, which in turn should reduce inflationary pressures. However, the country's economy is subject to significant risks, including externally in the form of climate risks and those related to changes in global oil prices.

"The performance of the authorities' program was satisfactory in the first quarter of 2018. The budget deficit was below 2.2 percent of GDP for the fiscal year to date, after adjusting for expenditures on recovery from Hurricane Matthew. All the structural benchmarks for end-March 2018 were met, one with a delay. All performance criteria were met, except for the floor of the fuel stabilization fund, which was missed due to higher-than-expected global oil prices. Solid economic policies implemented by the authorities under the SMP are expected to catalyze external resources provided by Haiti's technical and financial partners.

"The IMF team and the Haitian authorities have agreed on fiscal policy measures for fiscal year 2018 to achieve the program's objectives. These measures should enable the state to create the fiscal space needed to improve social programs and increase public investment, particularly in health, education, and social services. These measures should also allow the authorities to contain the budget deficit at a sustainable level, thereby limiting the need for central bank financing of the central government.

"We also agreed with the authorities specifically on the need to improve domestic resource mobilization in order to create fiscal space for priority expenditures. In this regard, the mission welcomes the government's intention to eliminate fuel price subsidies. The mission and the government also agreed on the importance of implementing key social measures to mitigate the impact of the subsidy reform on the most vulnerable segments of the population.

"Staff congratulated the Haitian authorities for measures to reform the electricity sector and to contain fiscal losses linked to the operations of the public electricity utility (EDH). In addition to reducing the losses due to EDH's operations, the measures will help to ensure sustainable medium-term growth of the electricity sector and improve the environment for private investment. The team commended the authorities' progress towards greater transparency of the financial and public accounts sectors.

"Together with the authorities, we agreed on the need to accelerate the pace of structural reforms that are essential for sustaining private sector-led growth, thereby boosting economic growth and reducing poverty more broadly. The mission encouraged the authorities to move forward with reforms aimed at streamlining taxation and strengthening tax administration. The mission and the authorities agreed that higher levels of both public and foreign direct investment would help Haiti to achieve higher growth over the long term.

"The IMF team would like to thank the authorities for their warm hospitality and constructive dialogue during the mission."

The IMF mission was hosted by Mr. Jude Salomon, Minister of Economy and Finance and Mr. Jean Baden Dubois, Governor of the Bank of the Republic of Haiti; in addition, it held discussions with other ministers, including the Minister of Planning and External Cooperation, the Minister of Labor and Social Affairs, and the Minister of Agriculture; and conducted meetings with members of Parliament, other senior public officials, and representatives of the private sector and civil society.


PRESS OFFICER: Randa Mohamed Elnagar

Phone: +1 202 623-7100Email:

Friday, July 13, 2018

Peru Update: Vizcarra's First 100 Days in Office | AS/COA

Peru Update: Vizcarra's First 100 Days in Office | AS/COA

Sunday, July 1, 2018

Leftist Wins Mexico Presidency in Landslide With Mandate to Reshape Nation - The New York Times

Leftist Wins Mexico Presidency in Landslide With Mandate to Reshape Nation - The New York Times

Leftist Wins Mexico Presidency in Landslide With Mandate to Reshape Nation

Andrés Manuel López Obrador campaigned on a narrative of social change, including increased pensions for the elderly, educational grants for Mexico's youth and additional support for farmers.Carlos Jasso/Reuters

MEXICO CITY — Riding a wave of populist anger fueled by rampant corruption and violence, the leftist Andrés Manuel López Obrador was elected president of Mexico on Sunday, in a landslide victory that upended the nation's political establishment and handed him a sweeping mandate to reshape the country.

Mr. López Obrador's win puts a leftist leader at the helm of Latin America's second-largest economy for the first time in decades, a prospect that has filled millions of Mexicans with hope — and the nation's elites with trepidation.

The outcome represents a clear rejection of the status quo in the nation, which for the last quarter century has been defined by a centrist vision and an embrace of globalization that many Mexicans feel has not served them.

The core promises of Mr. López Obrador's campaign — to end corruption, reduce violence and address Mexico's endemic poverty — were immensely popular with voters, but they come with questions he and his new government may struggle to answer.

How he will pay for his ambitious slate of social programs without overspending and harming the economy? How will he rid the government of bad actors when some of those same people were a part of his campaign? Can he make a dent in the unyielding violence of the drug war, which left Mexico with more homicides last year than any time in the last two decades?

And how will Mr. López Obrador, a firebrand with a tendency to dismiss his critics in the media and elsewhere, govern?

In the end, the nation's desire for change outweighed any of the misgivings the candidate inspired.

"It is time for a change, it's time to go with López Obrador, and see what happens," said Juan de Dios Rodríguez, 70, a farmer in the state of Hidalgo, a longtime bastion of the governing Institutional Revolutionary Party, or PRI, which has dominated politics in Mexico for nearly his entire life. "This will be my first time voting for a different party."

Jose Antonio Meade, the presidential candidate of the Institutional Revolutionary Party, which has dominated politics for decades in Mexico, casting his vote in Mexico City.Johan Ordonez/Agence France-Presse — Getty Images

In his third bid for the presidency, Mr. López Obrador, 64, won in what authorities called the largest election in Mexican history, with some 3,400 federal, state and local races contested in all.

A global repudiation of the establishment has brought populist leaders to power in the United States and Europe, and conservative ones to several countries in Latin America, including Colombia after an election last month.

"The recent elections in Latin America have exhibited the same demand for change," said Laura Chinchilla, the former president of Costa Rica. "The results are not endorsements of ideologies, but rather demands for change, a fatigue felt by people waiting for answers that simply have not arrived."

Mr. López Obrador, who vowed to cut his own salary and raise those of the lowest paid government workers, campaigned on a narrative of social change, including increased pensions for the elderly, educational grants for Mexico's youth and additional support for farmers.

He said he would fund his programs with the money the nation saves by eliminating corruption, a figure he places at tens of billions of dollars a year, a windfall some experts doubt will materialize.

Realistic or not, the allure of his message is steeped in the language of nostalgia for a better time — and in a sense of economic nationalism that some fear could reverse important gains of the last 25 years.

In this way, and others, the parallels between Mr. López Obrador and President Trump are hard to ignore. Both men are tempestuous leaders, who are loath to concede a political fight. Both men lash out at enemies, and view the media with suspicion.

And even as the electoral rage propelling Mr. López Obrador's rise is largely the result of domestic issues, there will be pressure for the new president to take a less conciliatory line with his American counterpart. Mexico's current government, led by President Enrique Peña Nieto, has suffered a string of humiliations at the hands of Mr. Trump with relative silence.

The core promises of Andrés Manuel López Obrador campaign — to end corruption and address the nation's endemic poverty — were immensely popular with Mexican voters.Mario Vazquez/Agence France-Presse — Getty Images

But Mr. López Obrador is not the typical Latin American populist, nor does his branding as a leftist convey the complexity of his ethos.

In building his third candidacy for the presidency, he cobbled together an odd group of allies, some with contradictory visions. There are leftists, unions, far-right conservatives and endorsements from the Catholic Church. How he will manage these competing interests remains to be seen.

Mr. López Obrador will inherit an economy that has seen only modest growth over the last few decades, and one of his biggest challenges will be to convince foreign investors that Mexico will remain open for business.

If he fails to convince the markets that he is committed to continuity, or makes abrupt changes to the current economic policy, the country could find itself struggling to achieve even the modest growth of prior administrations.

There is some evidence that Mr. López Obrador knows what is at stake. Though political rivals have painted him as a radical on par with Hugo Chavez, the former socialist leader of Venezuela, Mexico's president-elect has vowed not to raise the national debt and to maintain close relations with the United States.

Mr. López Obrador, who is commonly referred to by his initials, AMLO, has a history of working with the private sector, and has appointed a respected representative to handle negotiations the North American Free Trade Agreement.

"Today AMLO is a much more moderate, centrist politician who will govern the business community with the right hand, and the social sectors and programs with the left," said Antonio Sola, who created the effective fear campaign that branded Mr. López Obrador as a danger to Mexico in the 2006 election he lost.

"The great difference between then and now is that the dominant emotion among voters is fury," Mr. Sola said. "And anger is much stronger than fear."

President Enrique Peña Nieto after casting his vote in Mexico City.Alfredo Martinez/Getty Images

On the issue of violence, Mr. López Obrador has largely failed to articulate a policy that goes much beyond platitudes. At one point, he said that amnesty for low-level offenders could be an option, as a way to end the cycle of incarceration.

When the suggestion summoned widespread criticism, he claimed the idea was merely an effort to think outside the box. But analysts say there is little that distinguishes his platform from those of other candidates, or even his predecessor, Mr. Peña Nieto.

More likely, he will find himself in the unenviable position of managing the crisis, as opposed to ending it.

Mr. Peña Nieto came to office in 2012 with a promise to bring Mexico into the 21st century, forging consensus with opposition parties to pass a slate of much needed reforms that overhauled the calcified energy, education and telecommunications sectors.

But to Mr. López Obrador, who has spent much of his political career concerned with the nation's have-nots, these reforms meant to modernize institutions trapped in the past were little more than assaults on the people.

He has promised to review the contracts for oil exploration awarded to international firms, and to respect those that are clean — and take legal measures against those that are not.

It is possible that the awarding of new contracts will cease, potentially placing Mexico's future oil exploration and production back into state hands. From there, it is unclear whether Mr. López Obrador would hand the rights back to the nation's state-run oil company, Pemex, which has suffered severe problems with corruption and inefficiency.

For many, the future of the nation's oil industry exemplifies the central concern of a López Obrador presidency: uncertainty.

Authorities called Sunday's vote the largest election in Mexican history, with some 3,400 federal, state and local races contested in all.Felix Marquez/Associated Press

For all the talk of change, many worry his presidency will be a back-to-the-future sort of moment.

"What concerns me the most about the energy and education is the ambiguity of the alternative road ahead, if he decides to roll them back," said Jesus Silva Herzog, a political-science professor at the School of Government at the Monterrey Institute of Technology and Higher Education.

Some worry about how the president-elect will handle the opposition, as his fiery personality has both delighted and concerned voters.

He has a history of ignoring his detractors, or taking them on in public ways. He refers to the nonprofit community in Mexico, which has been a force for change and democracy, as "bourgeoisie."

For his opponents, this election cycle has brought the three main parties of Mexico to a crisis point. Mr. Peña Nieto's party will be vastly reduced in size and power in the new Congress, while the leftist Party of Democratic Revolution may not even survive.

Perhaps the only party with enough power to serve as a counterweight will be the National Action Party, despite having endured a bruising split in the campaign.

On the issue of fighting graft, perhaps the signature element of his campaign, few believe that it will be easy to address the complex realities of systemic corruption.

That could set up Mr. López Obrador to be a continuation of the disappointment that so many voters are reacting to.

"The biggest problem I see are the expectations he has built," said Carlos Illades, a professor of social sciences at the Autonomous Metropolitan University and a historian of Mexico's left. "The problem is going to be what he is not able to do. There are people who are expecting a lot."

Elisabeth Malkin contributed reporting.

Friday, June 15, 2018

Argentina’s central-bank president resigns - Argentina

Argentina's central-bank president resigns - Argentina