2013 Election Edition

The reality of January 2013 is in full force -- no more dreaming of sleepy beaches in Baja California Sur and longing for salted margaritas. Time to get to work!
 
2013 will usher in a round of election cycles across the region. And what political junkie doesn't love a hotly contested and fervently debated election? (Really, it's so much better than the fiscal cliff, especially when it doesn't affect your own tax rate). Elections in Latin America can be colorful, passionate (and unfortunately sometimes violent) affairs. Lucky for us, not only do we have 2013 elections in Ecuador (February) and Honduras (November), but pre-election politicking is already rampant in El Salvador (with elections slated for February 2014). In Colombia, the main newspapers are full of "will Santos run?" coverage.

Here are a few thoughts of what to look forward to in a select few election cycles. Now, Honduras and Ecuador are the only countries I'm mentioning that actually have elections in 2013, but expect El Salvador and Colombia to be consumed with election news this year:

Xiomara throws her (cowboy) hat into the ring

** Honduras: November 2013 **
Oh, Honduras. Three years after the coup, I'm reading the news from Tegucigalpa and the headlines are either focused on how bad the security situation is or how prostitutes raided and stole computers from the Honduran embassy in Bogota when a staffer threw an overzealous Christmas bash.  Amid these stories, who needs an election campaign for entertaining news? In all seriousness, I'm most looking forward to seeing Xiomara Castro's campaign. The new left-of-center Libre party candidate is former President Manuel Zelaya's wife (remember, Mel Zelaya, who was overthrown in the middle of the night and flown to neighboring Costa Rica, all the while in his pyjamas?). Since the 1980s, the Liberal Party and National Party have held a fierce grip on the presidency. I am skeptical that Castro can convince enough voters to win, but she'll probably take a fair share away from some left-leaning factions of the Liberal Party. In the interim, stay tuned for Honduras's (I believe first-ever) sovereign bond issuance.

Correa in campaign mode

** Ecuador: February 2013 **
President Rafael Correa is in full campaign mode right now and most analysts predict that he'll easily win a third term (one poll published by Perfiles shows him with 60% support). It looks like his campaign will be successful, despite no shortage of drama over the past few years: most recently he's warned supporters of an alleged "CIA attack" against him, and Wikileaks founder Julian Assange is still holed up in the Ecuadoran embassy in London. Despite that fun buzz, I'll elect his presidential campaign song as the Most Boring Campaign Slogan of 2013:  "We already have a President. We have Rafael!" Really, Correa? That's all you got?

Correa is pretty amped about it though:

La canción de campaña "Ya tenemos Presidente. ¡Tenemos a Rafael!" Es un éxito completo.
— Rafael Correa (@MashiRafael) January 7, 2013

Yawn. I guess Correa has enough drama within his presidency  that he doesn't need a catchy slogan to catch anyone's attention.

I'm skeptical Sanchez Ceren can win the presidency

** El Salvador: February 2014 **
2014 couldn't come soon enough for the FMLN and Arena parties, both of which had their candidates selected last fall. Current President Mauricio Funes is ineligible to run and I suspect he will happily sit on the sidelines while his VP and FMLN candidate Salvador Sanchez Ceren fails to drum up enough popular support to win the presidency. Meanwhile, conservative Arena party candidate and mayor of San Salvador Norman Quijano may have a slight edge in some recent polls, but it's hard to imagine the troubled Arena party easily gliding to victory at this point.

The big question for 2013: is former President Tony Saca going to throw his hat into the ring? A Saca candidacy will probably split the right-of-center vote and force a run-off. I've heard that the FMLN and Saca could be scheming up a plan to prevent Quijano from winning office.

Vargas Lleras (left) could be contemplating a run

 ** Colombia: June 2014 **
Clearly, Colombia's election is 18 months away, but there is no shortage of speculation right now over whether President Juan Manuel Santos will decide to run for reelection. (He says he'll announce his decision mid-year). I'd be shocked if he didn't run, given his decent approval ratings and the power of incumbency. But Santos has a lot on his plate, most notably the ongoing negotiations with the FARC and the risk that a failed attempt at securing peace could derail his reelection plans. 

In the meantime, it looks like many eyes are trained on current Minister of Housing German Vargas Lleras. Vargas Lleras ran against Santos in the 2010 election with the Cambio Radical party, and there is ample speculation that he could resign his post (looks like March would be an important cut-off date) to run again. Furthermore, don't expect former President Alvaro Uribe to keep quiet... he's likely to present a list of candidates for senate with his blessing, which could shake up the balance of power in congress in 2014.

For a quick, needed laugh today

The lovely graphic designer at my office forwarded this little gem to me today (courtesy of Reuters), noting:

Look how funny the president of Uruguay looks.

He is like, “We are waving… Seriously?”

I couldn't resist sharing this photo:

What Latin America can teach the U.S. about security

It is still gut-wrenching to process and to try to make sense of what happened in Newtown last Friday. On a very personal level, I am hoping that President Obama has the courage to stand up to the pro-gun lobby and move to ban assault weapons. Frankly, if I had my way we'd overturn the Second Amendment and get rid of all guns in the U.S., though I know that will unfortunately never happen. 

What I find most mind-boggling is the argument of many gun owners that having more guns would make us all safer. I could not disagree more, and found an article written by Firmin DeBrabander in today's NYT particularly compelling, especially when we think of how guns change our perception of and ability to interact with each other. Guns separate us, fragment us, and increase suspicion and fear.  They reduce our freedoms and inhibit the ease of interacting with one another. As DeBrabander notes: 

"As ever more people are armed in public, however — even brandishing weapons on the street — this is no longer recognizable as a civil society. Freedom is vanished at that point.... Arendt offers two points that are salient to our thinking about guns: for one, they insert a hierarchy of some kind, but fundamental nonetheless, and thereby undermine equality. But furthermore, guns pose a monumental challenge to freedom, and particular, the liberty that is the hallmark of any democracy worthy of the name — that is, freedom of speech. Guns do communicate, after all, but in a way that is contrary to free speech aspirations: for, guns chasten speech."

On an intense episode of Meet the Press yesterday, former Secretary of Education Bill Bennett argued that a possible solution to better protect our society from mentally unstable, gun wielding attackers would be to increase our security:

"And I’m not so sure -- and I’m sure I’ll get mail for this -- I’m not so sure I wouldn’t want one person in a school armed, ready for this kind of thing.  The principal lunged at this guy.  The school psychologist lunged at the guy.  Has to be someone who’s trained.  Has to be someone who’s responsible.  But, my God, if you can prevent this kind of thing, I think-- I think-- I think we ought to…"

A common sight in Latin America: private armed guards

More armed security at businesses, guns in the hands of elementary school principals and high school teachers? Upon hearing this -- which would require a massive increase in private security all across our country -- I immediately thought of the many violence-stricken countries to which I frequently travel. I often travel to El Salvador, Guatemala, and Colombia -- countries with widespread insecurity fostered by previous civil wars, growing gang membership, and guerrilla groups that kidnap, attack and frighten citizens. There are private security guards everywhere. Armed guards pace in front of virtually every business, patrolling government buildings with rifles and body armor. Bomb-sniffing dogs are led around tourist areas and business centers. 

In Colombia there seems to be no end to security procedures. Visitors are greeted with metal detectors, guards searching your purse (multiple times), police escorts, armed military personnel everywhere. It is frustrating, annoying, time-consuming, and tiresome. Is this the future of the U.S.? As California Senator Dianne Feinstein asked, "is this the way we want America to go?"

The cases of militarized societies are not reassuring. In Guatemala, private security guards outnumber military troops by 6 to 1. In 2008 there were an estimated 218 private security companies (many of them owned by former military officers, and many of them illegal) who oversee approximately 120,000 bodyguards and private policemen. Guatemala's privatization of security has, according to many experts, weakened the government's own control over the use of force.



The thought of expanded private security across the U.S. is not comforting, and granted, police forces in Central America are much more corrupt, inefficient, underfunded and less respected than their U.S. counterparts. But perhaps El Salvador offers us a more compelling idea. The country has suffered from gang crime over the past decade that has driven up murder rates to some of the highest in the world. In the capital city of San Salvador, the streets are deserted and eerily quiet at night. Brightly lit shopping malls, which are patrolled by heavily armed security guards, have become some of the few safe zones for people to socialize. Outside of such areas, however, no one walks on the street. Walls are erected around houses. People stay inside their homes after dark.

Things are changing in El Salvador, however. Instead of promoting the spread of guns, the government, the church and gang members are trying to disarm the country in an effort to improve security.  As Insight Crime reported earlier this month:

"The leaders of the Mara Salvatrucha, Barrio 18, and three other street gangs in El Salvador said they accepted a proposal to end all gang activity in designated "zones of peace" in the country. In a statement released to the public, gang leaders said that they'd already handed over a list of 10 possible municipalities where they would agree to cease all criminal activity.

Within these designated zones, gangs would agree to a non-aggression pact, and would commit to stopping all homicides, extortion, theft, and kidnapping. The municipalities that would include these peace zones have not yet been identified, although gang leaders said the agreement would affect some 900,000 people who live in the proposed areas. In their statement, gang leaders said that they'd already ordered affiliate groups -- or "cliques" -- to begin disarming in these areas, and hand over the weapons to the truce facilitators."

Gang members are willing to put down their arms in order to make El Salvador a safer place. 

Why can't we do the same here in the United States?

How will Santos get his groove back?

I published another piece in Quartz (my new favorite online publication for global news and analysis) today: 

The only way Colombia's President Santos can get his groove back is a peace deal with the FARC. The article looks at Santos's dropping approval ratings as he begins to gear up for a reelection campaign (the next presidential elections are due in 2014).

The numbers don't look that great for Santos -- and it's remarkable how much popular opinion has shifted in two years. Upon assuming office in August 2010, Santos immediately surprised Colombians by taking a markedly different tack from his predecessor, Alvaro Uribe. He smoothed over prickly relations with Venezuela and Ecuador, brought in political parties who had vehemently opposed Uribe (such as the Liberal Party and Cambio Radical), and embraced legislation to compensate victims of the armed conflict and to undertake land reform. Many of my Colombian friends who had voted for Green Party candidate Antanas Mockus in the election told me "if I had known that Santos would have proposed these types of policies, I probably would have voted for him!"

But over the past year, we've seen a real shift. Check out these two graphics of approval ratings/favorability ratings from Gallup and Ipsos Napoleon:

Ipsos has the most recent numbers, since their poll was conducted in November. I haven't seen a Gallup poll published since August 2012, so the second graphic is dated. Looking at Ipsos (which asks about "favorability" -- a slight and important difference from "approval"), it's clear that Santos has seen a slow but steady decline in his favorability ratings. And it's no real surprise-- he's had his fair share of bumps throughout 2012: incessant criticism (Twitter attacks!) from Uribe, a botched judicial reform that diminished Colombians' faith in government institutions; ongoing concerns about security, and a perception that Santos delegates too much without paying enough attention to domestic issues.

(Important caveat here: both these polls' samples, Gallup especially, are heavily concentrated in urban areas. So we don't really know what sentiments are like in rural parts of the country).

With the 2014 elections creeping up on the horizon, Santos may not be feeling too great about his reelection prospects. As of now, he has an incumbency advantage and the political parties in his coalition still have his back. Putting standard factors such as economic growth aside, I'd say the biggest wildcard in 2013 will be the outcome of the FARC negotiations.

Santos can't be pleased with his poll numbers

If Santos strikes a deal, he'll go down in history as the president who ended half a century of armed conflict. If he doesn't -- well, it will only fuel the fire of Uribe's opposition movement and improve the former president's ability to gather support for an opposition candidate to confront Santos. Uribe can't run again, but he'll support his own list of senators and a presidential candidate.

The FARC needs a deal if it wants to demobilize and reintegrate into Colombian society -- and most important, begin to engage as a legitimate political force. Santos needs a deal as well -- but for his own political future.

           

Raul vs Reggaeton

For the last two years the Cuban government has slowly but surely pushed ahead with a number of incremental economic reforms.  The government is slowly opening up the state-run economy to allow small businesses (like restaurants and small farmers) to operate, and announced that it would lift heavy restrictions on visas for international travel for most Cubans (of course, the politically important ones won't be going anywhere). The government also unveiled in late November a new tax plan under which Cubans will begin to pay taxes (including "inheritance, environment, sales, transportation and farm land, various license fees and three contributions" and social security taxes). This was important -- by signaling the development of tax rates, the government is implicitly acknowledging that the state's role in financing and providing for all economic aspects of the island is slowly contracting.

Reggaeton vs Raul 

But alongside the positive developments there are plenty of negative items as well: the three-year detainment of US contractor Alan Gross; heavy restrictions on travel for many Cubans; the suppression of the political opposition; the complete lack of non-state run media. And this week, Raul has announced yet another draconian and mind-boggling law: the banning of reggaeton. 

As Bloomberg reports:

Cuba’s government is banning reggaeton music from radio and T.V. as Raul Castro’s administration cracks down on “vulgar” songs in the island nation, government newspaper Granma reported on its website.  The Cultural Ministry’s music institute will levy severe sanctions or ban musicians including reggaeton artists whose lyrics are deemed sexually explicit or demeaning to women, Granma said, citing the institute’s president, Orlando Vistel Columbie. 

“Neither vulgarity nor mediocrity will be able to tarnish the richness of Cuban music,” Vistel said in an interview posted online today by the Communist Party paper. “Obviously, people can listen to what they want privately. But, that freedom doesn’t include the right to reproduce and disseminate that music.”

Vulgarities aside, the banning of a type of music is a shot in the heart to any music-lover. (It does call to mind the case of 2 Live Crew -- remember how a Florida prosecutor tried --unsuccessfully -- to try the rap group for violating Florida's obscenity laws?). But Raul's ruling must  be wrenching for Cubans... many of whom likely turn to music and dance as a method of personal and passionate expression in an otherwise suffocated society. 

Getting all emotional in Latin America

Gallup did this fascinating survey that asks respondents to track how emotional they felt, asking if they felt well-rested, treated with respect, or if they smiled and laughed a lot. The results aren't too surprising  -- Latin American countries top the list in terms of how emotional their citizens are. Russians and Singaporeans are relatively cool-headed in comparison. The Washington Post put together a cool "heat map" where you can see how different countries' respondents reacted:

Pretty interesting that some of the most hot-headed countries include Colombia, El Salvador, Peru, Ecuador, Chile, and Bolivia. The US is easy to understand -- who hasn't sat at the Thanksgiving dinner table, cringing while Uncle T-- goes off on "wasteful government spending" and welfare reform? But really, Canada? For some reason I have always thought of our northern neighbors as relatively cool headed (it's awfully cold up there, right?) but I suppose North-North America isn't really my forte.

For anyone who has been to Guatemala or El Salvador, it's clear that asking about politics is an easy way to get the blood broiling. These two countries suffered lengthy civil wars, guerrilla attacks, and mass civilian casualties (and massacres). Years later there remains an intense and piercing distrust between political parties who remain on opposing ends of the ideology spectrum. Election campaigns are bitter, often digging up (or fabricating) stories and connections to unpalatable leaders  (Chavez in El Salvador) or unpopular movements (anything to do with communism and Cuba) that would put Karl Rove to shame.  Indeed, the Gallup results below show that El Salvador ranks only second to the Philippines in terms of respondents' sensibilities, with Guatemala not too far behind:

Farther south, it's not surprising to see Colombia near the top of the list. To look purely at anecdotal and informal "evidence", the Colombians I have met over the years are some of the most passionate, loving and family-oriented people I've come across. To be frank though, Colombia also has some of the world's worst people: drug traffickers (think of Pablo Escobar's reign of terror), FARC guerrillas who kidnapped and murdered countless people in the past, paramilitaries who forced thousands of people from their land if they were even suspected of harboring leftist sentiments, and soldiers who killed and then dressed up ordinary civilians as FARC combatants in order to improve their military "body count" metrics.

Such a troubled history is bound to ramp up emotions in any society... though how to balance this with the relatively peaceful past of a country like Costa Rica -- where citizens are ostensibly as emotional?

Then again... any potential border dispute with Nicaragua, or ideas about new mining projects, or government efforts to expand hydroelectric capacity via construction of dams in indigenous territories elicits passionate reactions among Costa Ricans.

I can't explain the relatively less amount of "emotion" in countries in Africa and Asia. In many (most? all?) developing countries, the stakes are high and inequality levels are staggering. I have little training in sociology but could put forth a few suggestions to explain the relatively high levels of passion in Latin America.  History of colonialism? Struggles amid an expanding -- and increasingly urban -- middle class? Disturbing levels of inequality? Weak judiciaries and corrupt government institutions that compel citizens to take justice into their own hands? The list could go on and on. Your thoughts?

Belize Update: Bond proposal smacked down

Looks like Belize and bondholders aren't finding very much common ground: Bloomberg and Reuters broke the story today that the government of Belize (via a statement on the central bank's website, which is available here) has rejected an offer put forth by bondholders on 21 November to address the $550 million Superbond. 

The government's language is pretty clear: the proposal by the bondholders doesn't reduce the net present value (NPV) of the debt, contrary to the government's proposal of a pretty significant haircut last August.

According to the government's statement:

While acknowledging that the Committee’s counter-proposal provides a degree of short-term cash flow relief, the GoB considers it to be wholly incompatible with its objective of placing the country’s debt burden on a sustainable footing – a goal that the Committee itself has indicated it is committed to at various stages. The GoB believes that the counter-proposal ignores Belize’s high overall debt levels, and that it amounts to little more than a short-term fix not dissimilar to the 2007 exercise.

The GoB views the recently-submitted scenarios as unsustainable, and is disappointed that a counter-proposal of this nature has come five months after discussions with the Committee began.

Well, looks like despite some bad news from the IDB the other week (see yesterday's post), Barrow and his government are holding out. It's not too surprising-- Barrow doesn't have too much to lose, as Belize's credit reputation is already battered and his government views the benefits of debt relief (and the ability to invest more heavily in social programs, anti-crime efforts, and infrastructure) as much more important than paying off creditors.