Latin America - Elcano Royal Institute empty_context Copyright (c), 2002-2018 Fundación Real Instituto Elcano Lotus Web Content Management <![CDATA[ Blackouts in Venezuela: why the power system failed and how to fix it ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-viscidi-graham-blackouts-venezuela-why-power-system-failed-and-how-to-fix-it 2019-04-20T11:05:38Z

When the lights went out on 7 March many Venezuelans would hardly have been surprised. Electricity rationing has become routine over the past decade. However, this blackout quickly proved to be different to most.

]]>
When the lights went out on 7 March many Venezuelans would hardly have been surprised. Electricity rationing has become routine over the past decade, especially in the early months of the year when reservoir levels are low (because of overdependence on hydropower), and large-scale power failures are commonplace despite the country’s vast energy resources. However, this blackout quickly proved to be different to most, affecting all 23 states and lasting for longer than any other (more than five days in most of the country), aggravating a humanitarian situation that was already dire. At least 26 people perished in hospitals, where dialysis machines and ventilators for premature babies failed. People rushed to leaking drainage pipes to collect water as water pumps failed, and looted hundreds of stores as food rotted without refrigeration, including more than 4.4 million pounds of meat in the first two days alone. Public transport and communication systems collapsed, closing most schools and businesses. Early estimates place economic losses above US$875 million.

“A lack of transmission-line maintenance may have been the immediate trigger for the power outage, but it is a symptom of almost two decades of government mismanagement that has debilitated Venezuela’s power sector”.

Venezuelan energy experts were quick to dismiss the explanation of the disputed President, Nicolás Maduro: that the US perpetrated a cyberattack on the Guri hydroelectric complex, which supplies 80% of the country’s electricity. They say that the plant’s operating systems are not connected to the Internet and physical entry would be almost impossible. It now seems clear that wildfires overheated one of the main transmission lines that carry power west from the Guri Dam to most of Venezuela’s population, causing the others to become overloaded and crash. According to two engineers, routine brush clearing beneath power lines ceased three years ago.

A lack of transmission-line maintenance may have been the immediate trigger for the power outage, but it is a symptom of almost two decades of government mismanagement that has debilitated Venezuela’s power sector, draining its reserves of both human and financial capital and nudging it towards collapse. With wages that scarcely cover their daily bus ride to work, almost half of Corpoelec’s skilled employees have left the country, according to the Executive Secretary of Venezuela’s electricity industry union.

Electricity rates have been frozen since 2002 in an economy facing hyperinflation, and consumers pay only 20% of the real costs of producing power, delivering Venezuelans the lowest electricity prices in Latin America. This has encouraged waste (Venezuela has the highest per capita electricity consumption in the region) and wiped out revenue, initiating a vicious cycle of underinvestment and financial deterioration. Corpoelec, the overburdened state power monopoly created when all private power companies were nationalised in 2007, recovered just 30% of its operating costs in 2010.

The failure to invest in grid maintenance and payment collection has led to further revenue declines as transmission and distribution losses (mostly caused by theft) soared to 35% in 2014 –over twice the Latin American average and almost six times the OECD average–.

Caracas sought to diversify away from hydropower and increase generation from other sources after a major drought in 2010 led to rolling blackouts and a nationwide restriction of work schedules to save power, but that effort has also largely failed. The country lacks an adequate pipeline network needed to bring natural gas to power plants, forcing it to overuse diesel in thermal power plants (which can run oil or natural gas), which damaged them. As a result, many of the country’s thermal plants are shut down due to lack of maintenance. According to an internal Electricity Ministry report, power generation was operating at around one third of capacity in October 2018. US sanctions affecting fuel imports since January have further restricted Venezuela’s access to diesel imports.

“Stopping future blackouts will require a short-term fix but also a restructuring of the power sector”.

Meanwhile, part of Corpoelec’s remaining funds have been siphoned out by networks of corruption. Examples abound. In an expedited process to construct thermal power plants in 2010, PDVSA and Corpoelec paid millions of dollars in no-bid contracts to political connections, according to The Wall Street Journal. Another report concluded that up to 50% of expenditure on thermal, hydroelectric and wind projects in 2003-13 was in excess of the costs of equivalent projects elsewhere. The Tocoma Dam, whose cost was quoted at around US$3 billion in 2005, has already devoured more than US$10 billion and produced no electricity. Its construction has been stalled since 2015.

Given the profound problems facing Venezuela’s power sector, such blackouts will inevitably continue. Indeed, on 25 March much of the country was dark once again and on 31 March Maduro announced 30 days of electricity rationing. Stopping future blackouts will require a short-term fix but also a restructuring of the power sector. This process will have to begin with a thorough assessment of the state of Venezuela’s power infrastructure, as statistics about the national power system have not been published for eight years. In the short run, to guarantee reliable electricity access Venezuela will need to import fuel to supplement hydropower, for example in the form of a floating storage and regasification unit to provide natural gas for generation, as well as power generators. In the long run, the country should return to the pre-Chavista model in which generation and distribution were privately managed, largely by regional companies. An independent national electricity system operator alongside an electricity regulatory body should coordinate and oversee private generators, creating a decentralised, diversified and efficient power industry with adequate capital for investment. Finally, while poor consumers’ ability to pay must be considered, Venezuela’s excessive fuel and electricity subsidies create an unsustainable strain on public finances and perverse incentives for high consumption and thus cannot continue in the long run.

“However, further rationing regimes, like that declared by Maduro on 31 March, will only aggravate the country’s astonishing economic contraction (…)”.

Protesters in Caracas and around the country are rightfully demanding the restoration of their most basic services: clean water, food, transport and light; and the destruction of Venezuela’s electricity system has brought economic activity to a virtual standstill at times, halting everything from steel and oil production to small family businesses. Non-governmental organisations on the ground continue working to alleviate the suffering brought on by Venezuela’s collapse. However, further rationing regimes, like that declared by Maduro on 31 March, will only aggravate the country’s astonishing economic contraction when they are not accompanied by a recognition of the systematic lack of available capacity and a proposal to resolve this problem.

Lisa Viscidi
Program Director, Energy, Climate Change & Extractive Industries, Inter-American Dialogue | @lviscidi

Nate Graham
Program Assistant, Energy, Climate Change & Extractive Industries, Inter-American Dialogue.

]]>
<![CDATA[ The political expansion of evangelical churches in Latin America ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari131-2018-malamud-political-expansion-evangelical-churches-latin-america 2018-12-12T02:35:04Z

The presence of evangelical churches in the political life of various Latin American countries has increased significantly in recent years.

]]>
Original version in Spanish: La expansión política de las iglesias evangélicas en América Latina.

Theme

The presence of evangelical churches in the political life of various Latin American countries has increased significantly in recent years.

Summary

The presence of evangelical churches in the political life of various Latin American countries has increased notably in recent years, clearly seen in the outcome of the many elections held in the region. Among the most prominent elections contested in 2018, particularly striking developments in this respect includethe victory of Jair Bolsonaro in Brazil, Fabricio Alvarado’s progress to the second round of voting in Costa Rica and the role played by the Social Encounter Party in Mexico, which has allied itself with Andrés Manuel López Obrador and helped his election as President .

The decline of politics, traditional parties –especially those on the left– and democratic institutions, together with the retreat of the Roman Catholic Church in the greater part of the region, have contributed to this development. Another factor is the emphasis placed on a values-based discourse and support for the family as central strands of the evangelical rhetoric. Thanks to this, and with considerable popular endorsement, they have succeeded in boosting conservative prospects in large parts of Latin America.

Analysis

The boundary between religion and politics, or between divine and temporal power, has never been clear and remains blurred to this day. The conflict between the two powers has been a recurring feature throughout history and at times has been accompanied by acute tension and even violence. Christian democratic parties in both Europe and Latin America were a permanent feature of the 20th century, and they frequently succeeded in securing power, as in Chile, Venezuela, Costa Rica and Guatemala. In our own day, certain strains of radical terrorism take on an Islamist cloak, while a range of religious fundamentalisms vie to increase their presence in the most varied parts of the world. A simultaneous development in Latin America has been the emergence of political movements of an evangelical nature that have acquired considerable heft in the political affairs of their countries and have even become a phenomenon of wider regional significance.

These days it is possible to find an evangelical church or place of worship in virtually any part of the continent, however poor or marginalised it might be. The strong and permanent bond between the pentecostal and neo-pentecostal churches on the one hand and the popular sectors and the poorest strata of their societies on the other has enabled them to impinge on regional politics in a way that no other party or movement has been able to achieve. If this is combined with their particular ideological orientation it may be concluded, as Javier Corrales has done, that evangelical churches are ‘giving conservative causes [in Latin America], and especially political parties, new strength and new constituencies’.

Indeed, Corrales goes further in asserting that ‘the rise of evangelicalism is politically worrisome. Evangelicals are fuelling a new form of populism. They are supplying conservative parties with nonelite voters, which is good for democracy, but these voters tend to be intransigent on issues of sexuality, which feeds cultural polarisation. Intolerant inclusion, which is the classic Latin American populist formula, is being reinvented by evangelical pastors’.

The advent of evangelicalism in Latin America

Marta Lagos, the Director of Latinobarómetro, has been unequivocal about the rise of evangelicalism: ‘there is a tremendous influence of the evangelical church, especially among the poorest people… the candidates are going for the evangelical vote’. We are thus witnessing a wholly novel phenomenon in Latin America, the growing spread of evangelical churches, essentially pentecostal and neo-pentecostal.

The latter have managed to increase their political presence in a range of countries while also making inroads as institutional representatives, both in executive and in legislative positions, starting with national and regional parliaments. It is important, however, to distinguish between the more traditional and longstanding evangelical churches, such as the Methodists, from the more modern pentecostalist and neo-pentecostalist churches, especially those linked to the ‘charismatic movement’, as the former have a different approach to politics.

The origins of this expansion can be traced to the many proselytising campaigns of certain US protestant churches in the mid-20th century that ended up establishing themselves mainly in Central America. In South America, meanwhile, the evangelical churches’ nucleus of expansion was Brazil, to such an extent that these days it is possible to find Brazilian pastors preaching in all Latin American capitals and in many of the larger cities.

As pointed out above, however, the combination of religion and politics is nothing new and nor is the combination of evangelicalism and politics. Alberto Fujimori, when he was virtually unknown to the general public in Peru, secured the support of some evangelical churches for his presidential bid. Pastor Carlos García, the leader of the Baptist Church, was his running-mate on the ticket that Cambio 90 presented for the 1990 presidential elections and was elected as Second Vice-President.

The support given by García and other evangelical church figures in Peru was essential in ensuring Fujimori’s success. It was they who collected the signatures needed to register Cambio 90 as a political party, enabling it to take part in the elections. They also collaborated in setting up local committees throughout the country as a way of securing greater public support. In addition, some 50 evangelical supporters ran as Cambio 90 candidates for election to Congress, of whom 14 were elected as deputies and four as senators. Disappointment with the new President soon set in, however, given that he not only failed to achieve the levels of development that he had promised but also failed to secure for his congregations the same benefits as the Roman Catholic Church enjoyed.

A more recent event clearly illustrates the incessant rise of the evangelical influence in the political life of Latin American countries and the favourable treatment they regularly receive from politicians, from both left and right. In 2014, two months prior to the most closely-fought elections in the country’s history, numerous politicians attended the opening of the Temple of Solomon in central São Paulo, a mega-church covering 100,000 square metres with a capacity for over 10,000 worshippers.

Among those present, despite her past as a guerrilla and her self-professed agnosticism, was the then President of the country, Dilma Rousseff, from the Brazilian Workers’ Party (PT). Also in attendance was the Vice-President Michel Temer (currently leader of the national government but preparing to hand over to Jair Bolsonaro). They were joined by a significant group of Ministers in his cabinet, plus Geraldo Alckmin, the governor of São Paulo, and Fernando Haddad, the city’s Mayor. These were the highest elected officials of the state and the city of São Paulo and later became the respective presidential candidates for the Brazilian Social Democracy Party (PSDB) and the PT in the general election of 2018. The inauguration was also attended by numerous governors and some of the most prominent members of the National Congress. The unveiling of the temple, which became a sort of multi-party convention, was a revealing portrait of the political importance that the evangelicals had succeeded in acquiring over the preceding years in the country’s politics.

This ambitious project was masterminded by Bishop Edir Macedo, head of the Universal Church of the Kingdom of God and, apart from being one of the main evangelical figures in Brazil, an extremely wealthy individual. Macedo, who had previously endorsed Lula, was on this occasion one of Bolsonaro’s main backers to win the election. The most influential tools deployed by the latter, a former army officer-turned-politician, include social media and the powerful network of audio-visual media led by TVRecord, owned by Macedo.

In Mexico, the Movimiento de Renovación Nacional (Morena, or National Regeneration Movement) and the PT forged an alliance with the evangelical Social Encounter Party as it sought to build broader support for Andrés Manuel López Obrador in the run-up to the decisive presidential elections of 2018. Although the election results show that López Obrador would have won anyway, the alliance proved to be a very useful means of achieving his goals and tipping opinion polls in his favour. Thanks to the partnership he was able to secure an overwhelming win and comfortable majorities in both chambers of the federal Congress.

Proof of the importance López Obrador places on his proximity to the evangelicals is the fact that, over the course of six months, the man who is now President-elect swung from saying he would never associate himself with Social Encounter to proposing, on the very day the ultraconservatives announced his candidacy, a ‘moral’ constitution for the country. At Easter 2018, in the middle of electioneering, López Obrador said that he was ‘a Christian in the broadest sense of the word, because Christ is love’.1

Guatemala now has an evangelical President, Jimmy Morales, despite the little-to-no political experience he had at the time of being elected. Costa Rica was on the point of having another evangelical as President, Fabricio Alvarado. In Chile Sebastián Piñera courted the evangelical vote at the last election, to the extent of inviting four evangelical bishops to join his campaign team. In Venezuela and Colombia the evangelical pastors Javier Bertucci and Jorge Antonio Trujillo ran as candidates in the presidential election, in spite of little likelihood of success. More recently, Jair Bolsonaro was elected as the new Brazilian President with the full backing of the evangelical churches.

The evangelical insertion into politics

In order to put their political aspirations into practice, there is one factor that evangelical groups can count on that traditional parties, especially the most conservative, lack: proximity to the masses, people who are tired of elites and who were traditionally drawn to left-wing groupings. They also rely on an extensive network of places of worship widely distributed throughout the countries in which they operate and on a powerful system of media outlets, comprising hundreds and indeed thousands of radio and TV stations, many of them focusing on the local community, plus a strong presence on social media.

The evangelicals are thus not only exploiting the spaces vacated by the Roman Catholic Church but also the widespread public disenchantment with politics and governments. With their strong presence in the most densely-populated neighbourhoods, evangelical churches provide all manner of services to a wide range of people, especially the least advantaged, from healthcare to childcare to help in seeking work. The fact that they offer a broad variety of services to the community provides them, in return, with a more than notable degree of popular support, something that no party –certainly no left-wing party– no NGO and no other political or social movement is capable of matching.

In general, there does not tend to be any regional pattern to the political and campaigning strategy adopted by evangelical churches. In some countries they may take to the street in opposition to particular legislative proposals that they deem contrary to their beliefs. In others they have their own political groups making their point. Sometimes they even put forward their own presidential candidates.

Going beyond particular national circumstances, however, manifestations of evangelical involvement in politics are emerging more and more stridently in the Latin American political landscape. Up until recently, most of the aspirations of the evangelical churches that participated in politics and the parties they supported focused on the local and provincial levels and in gaining a parliamentary foothold rather than fighting for executive power. In light of recent election results. however, this seems to be changing rapidly.

The situation provides a fair portrait of the goals and limitations that characterise evangelical political efforts. What is clear, however, and this is one of their main characteristics, is that they tend to exert increasing pressure on political debate in terms of their values-based agenda: the family, gender and sexuality. And although, as Javier Corrales argues, the ‘ideology of evangelical pastors is varied’, when it comes to subjects such as gender and sexuality, they usually make much of their ‘conservative, patriarchal and homophobic values’.

As pointed out above, evangelicalism’s moral and political agenda focuses on the defence of family values, which fundamentally entails opposition to abortion, in vitro fertilisation, same-sex marriage, divorce and euthanasia. Apart from issues related to the defence of Christian family values, their platform tends to centre more on the rejection of particular proposals than on support for any specific policies. Among the raft of things that they reject, the mis-named ‘gender ideology’ plays a prominent role. The war they wage on this has enabled them to win substantial kudos among their followers. It is not, however, an area where evangelical leaders enjoy exclusive dominion, since the Roman Catholic hierarchy and a large section of the priesthood have openly voiced their opposition to it too.

This definition, stemming from profoundly conservative roots, is typically used to discredit any attempt to defend sexual diversity or gender variation, indicating that it is fundamentally ideological in nature rather than a scientific approach to the problem, consistent with the approach of psychologists and other medical and behavioural professionals. As Corrales points out, ‘the ideology of gender allows them [the evangelicals] to call for the protection of children as cover for their homophobia’.

Another core strand that has mobilised the followers of pentecostalists and neo-pentecostalists has been the fight against corruption and outrage at the role played by politicians in corruption cases. With all these issues it is possible to discern a remarkable convergence between the evangelical churches, the Roman Catholic hierarchy, certain social-Christian movements and political parties of a conservative hue. This proximity is much more visible on certain specific occasions, especially when the degree of scandal turns them into media causes célèbres.

Up until now, however, evangelical leaders, their political associates and their spokespeople in the news media have not tended to make pronouncements on other issues at the heart of government, such as the economy and international relations. It remains to be seen whether this trend will continue, given their greater institutional presence in the highest echelons of their respective countries’ administrations,

Worshippers who follow the evangelical denominations are highly disciplined. They take a lead from the opinions of their preachers, even in terms of voting. Regardless of the candidates’ profiles, when voters get to the ballot box what counts is not only their political allegiance but also the recommendation of church elders. It is a mechanism similar to the one that has existed for decades in communist parties dominated by the idea of democratic centralism.

In light of its recent surge and the discipline exercised at the ballot box, the evangelical vote has been highly sought-after by almost all candidates, irrespective of their political or ideological leanings. It is a phenomenon that Colombia, Brazil and Mexico are each acquainted with, as are other Latin American countries with elections looming. In 2019 elections are due be held in Guatemala, El Salvador, Panama, Argentina, Uruguay and Bolivia, providing fresh opportunities to assess the influence of the evangelical vote in these countries.

In Brazil, the evangelical power in parliament centres around the so-called Bible Group. In the previous legislative term, the evangelical churches mustered 81 congressmen (out of 513) and three senators (out of 81). It is a question of having a cohesive and highly-organised parliamentary group that enables them to block initiatives against the church. Coming under this heading are all attempts to legalise abortion and same-sex marriage, which has been sanctioned by the Brazilian Supreme Court since 2014. Showing its support for Bolsonaro has been a group known as 3B (standing for biblia, bala and buey or bible, bullet and ox), which includes advocates of carrying weapons for self-defence (bullet), large-scale agricultural producers and the meatpacking industry (ox).

The pressure exerted by evangelical churches has even led to the closing down of some art exhibitions on the grounds of immorality. This occurred with the exhibition titled Queermuseu, cartografías da diferença na arte brasileira, run by the Santander Cultural Centre in Porto Alegre, which was forced to close a few days after it opened in September 2017. Arguing that Banco Santander was sponsoring an exhibition that fostered ‘paedophilia, zoophilia and pornography’, both the Free Brazil Movement (MBL) and a range of evangelical groups orchestrated an unremitting campaign on social media that forced the organisers to shut down exhibition.

The evangelical churches’ social presence

The presence of evangelical churches in Latin America and the number of their followers has grown steadily in recent decades, although their growth has been uneven. There is a twofold dynamic underlying the phenomenon. First there is the incessant growth in the number of non-Roman Catholic Christians, something that presents an enormous challenge to the various episcopal conferences; secondly, politicians and parties have been increasingly discredited, paving the way for new options to emerge.

The number of evangelical worshippers currently accounts for rather more than 20% of Latin America’s population. The figure is all the more striking when considering that only 60 years ago they barely represented 3% of the population, according to statistics from the Pew Research Center. More than 10% of the population in Mexico is evangelical; in Peru, Ecuador, Colombia, Venezuela, Argentina and Panama it is said to be in excess of 15%; in Costa Rica and Puerto Rico it is as high as 20%; the figures cited for Brazil fluctuate between 22% and 27%; and in some Central American countries, such as Guatemala, Honduras and Nicaragua, the figure exceeds 40%.

As pointed out, the rise of evangelical churches needs to be seen in relation to the parallel process of Roman Catholicism in retreat. Instead of ‘liberation theology’, which in the 1960s and 70s brought the widespread involvement of revolutionary priests, workers and peasants, evangelical preachers have had a great deal of success in introducing their faithful to so-called ‘prosperity theology’. This is a concept that clearly illustrates the principles and interests that motivate their faithful.

Roman Catholics in Latin America currently number 425 million, which according to the latest Latinobarómetro accounts for 60% of the regional population. It is a significant figure, because it means that 40% of the world’s Roman Catholics are Latin American. Another important consideration in this context is that Pope Francis (Jorge Mario Bergoglio), elected in 2013, is an Argentine. Despite their dominance, however, there is no denying the fact that the Roman Catholic majority has shrunk significantly since recording a figure of 80% in 1996.

The question that arises from this twofold process of a falling Roman Catholic population and a growing evangelical one is how far it can be attributed to the systematic attack on liberation theology ordered by the Vatican and the various regional ecclesiastical hierarchies. In a sense, abandoning the ‘preferential option for the poor’, which was characteristic of liberation theology, entailed the abandonment of the masses by the Roman Catholic church.

In some evangelical churches, alarming signs of a certain degree of paramilitarisation are starting to be seen. One of the clearest examples is the so-called ‘Gladiators of Christ’, affiliated to the Universal Church of the Kingdom of God, which involves the faithful receiving training with military overtones. While this is by no means a new phenomenon, either within or beyond Latin America, as shown by the activities of the Peruvian Roman Catholic organisation Sodalitium of Christian Life, which sought to persuade its followers to live communally as ‘soldiers of Christ’, it needs to be closely monitored.

The Sodalitium, a group run by laypeople, was recognised by Pope John Paul II in 1997 as a Society of Apostolic Life under Canon Law. Another association of Roman Catholic laypeople is Tradition, Family and Property (TFP), which was founded in Brazil after the Cuban revolution and later spread to large parts of Latin America, engaging in an active crusade against liberation theology.

The main question thrown up by the ever-growing presence of the Gladiators of Christ is: what will happen if the neo-pentecostalist churches at a certain juncture go from staking their claims through the ballot box and decide to move on to direct action? As Javier Corrales has argued: ‘There is a return to the classic Latin American polarisation of the 19th century between conservative and anti-clerical groups, which produced a great deal of political tension even up to the mid-20th century’.

Conclusions

In recent years evangelical churches have been acquiring an increasingly central role in the political life of Latin America. The growing dissatisfaction with democracy and the marked deterioration of traditional political parties and democratic institutions is one factor that has speeded up the process, but not the only one. Other elements to be borne in mind are, first, the strong presence of pentecostalist and neo-pentecostalist denominations among the masses, helped by the withdrawal of left-wing parties and the Roman Catholic church, and secondly, the inclusion in their rhetoric of a unwavering defence of the so-called values-based agenda, which includes the rejection of same-sex marriage, abortion and divorce, among other issues.

Although these churches initially restricted their involvement in politics to the local and regional levels, their new-found protagonism has encouraged them to set their sights higher. Thus a greater presence in national politics has become evident, with notable breakthroughs such as those that have recently been secured in Guatemala, Brazil, Mexico and Costa Rica. It is not a self-contained phenomenon, however. Such is the extent of their power and influence that traditional politicians, of all political and ideological hues and persuasions, are trying to win their blessing as endorsement for their own causes.

That said, their value-based rhetoric has caused all the societies in which they operate to become more polarised. Theirs is a black and white view that does not countenance nuances and therefore excludes any kind of compromise or negotiation. This Manichaeism, with its populist appeal, has served to strengthen conservative prospects in Latin America, hastening the decline of left-wing parties and even Bolivarian viewpoints. At the same time, if the growing influence of the evangelical churches in regional and national politics continues unchecked, the possibility cannot be ruled out of serious reversal as far as the separation between church and state is concerned, although the former would no longer be represented by the Roman Catholic hierarchy but by these newly-ascendant religious groups.

Carlos Malamud
Senior Analyst, Elcano Royal Institute | @CarlosMalamud



This phrase is reminiscent of Lula’s ‘Lulinha, peace and love’ slogan devised just before the 2002 election, in his fourth attempt to become President of Brazil, aimed at overcoming the antipathy of traditional sectors, something he easily succeeded in doing thanks to his alliance with the right and the incalculably valuable collaboration of Edir Macedo.
]]>
<![CDATA[ What foreign policy now for Brazil? ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari120-2018-malamud-what-foreign-policy-now-brazil 2018-11-12T01:25:38Z

On 1 January 2019 Jair Bolsonaro will become the next President of Brazil. What could be the key elements of the new Administration’s foreign policy?

]]>
Original version in Spanish: ¿Qué política exterior tendrá Brasil?

Theme

On 1 January 2019 Jair Bolsonaro will become the next President of Brazil. This paper looks at the key elements of the new Administration’s foreign policy.

Summary

Jair Bolsonaro comfortably won the presidential elections in Brazil with an inflammatory domestic discourse but very few hints about how he sees international relations. As a result, debate has naturally arisen over the likely guiding principles of Bolsonaro’s foreign policy. This paper attempts to answer the most central of these questions, many of which remain speculative. Much of the uncertainty stems, on the one hand, from the President-elect’s lack of foreign-policy definition and, on the other, from the still unknown identity of the next Foreign Minister, fundamental to many of the questions raised here.

Analysis

The unconventional character of the candidate Jair Bolsonaro, who spoke abundantly on the most sensitive issues of Brazil’s domestic agenda –although not on any specific policy details as to how he plans to achieve his objectives– is, following his election victory, all the greater as regards foreign policy. His lack of definition, contradictions and the fact that the future Foreign Minister has not yet been appointed all make it difficult to analyse the policies and diplomatic style that will characterise the new government’s relationship with the world as of 1 January 2019.

In a statement on the night of Sunday, 28 October, after being elected President, Jair Bolsonaro hurled a sharp criticism at Itamaraty, Brazil’s Ministry of Foreign Affairs: ‘We will free Brazil and Itamaraty from the ideological bias to which international relations have been subjected in recent years’. Before this pronouncement, foreign policy remained one of the great exceptions over which the President-elect had not yet expressed himself in depth (save for some marginal statements). As such, there have been few clues available as to the kind of foreign policy that Bolsonaro plans to develop.

The criticism against excessive ideology in foreign policy was also reiterated by Paulo Guedes, the future ‘super-Minister’ of Planning, Industry and Finance: ‘Brazil has been caught up in ideological alliances and that is bad for the economy’. The explosive tone of his declaration of principles –starting with his call for economic openness– suggests the direction in which Guedes desires to push his ministerial portfolio. He is also likely to push a pro-market bias in the country’s future trade negotiations. The role of Guedes is important because both the success of Bolsonaro’s presidency and the country’s future international image depend, to a large extent, on Brazil’s economic recovery.

One of Bolsonaro’s obsessions –systematically stated during the recent election campaign– is to eliminate all vestiges of the influence of the Workers’ Party (PT) in national politics. From this perspective, Bolsonaro believes Brazilian foreign policy needs much reform, particularly certain erroneous or counterproductive initiatives of Lula da Silva. Some of these elements of foreign policy were modified or corrected during the government of Dilma Rousseff and more deeply under Michel Temer. At any event, an intensification of foreign policy reform can be expected from the new President.

The most controversial foreign policy issues in Brazil include its relationship with ‘Chavismo’ and Bolivarian populism, its clear support for regional projects such as Unasur and CELAC, and its neutrality –if somewhat biased– with respect to ALBA. Brazil gave strong support to political leaders such as Hugo Chavez, Fidel Castro, Evo Morales, Rafael Correa and the Kirchners during the PT presidencies. In May 2008 Lula claimed that ‘Chavez is the best President that Venezuela has had during the past 100 years’. Other controversial issues include Brazil’s presence amongst the BRICS (and especially its approach to China), its role in Africa and its relationship with Arab countries, plus its attempt to develop a foreign policy independently of the US.

However, until the new Foreign Minister is appointed, any attempt to clarify the guiding principles of Brazil’s future foreign policy will remain speculative. Among the different potential options some female names have been suggested. Should the latter be the case, it would be the first time for a woman to be in charge of Itamaraty. At the same time, such an appointment would also serve as a message from Bolsonaro to counter some of the accusations against him, including that of male chauvinism. Still, the odds are not very high.

One difficulty facing any analysis of the new government’s foreign policy is that before his election victory the President-elect said very little about international relations or Brazil’s role in the world. Rather, he remained focused on the domestic political issues that had most concerned him during his nearly three decades as a parliamentary deputy, especially the most polarising that could provide him with the most short-term electoral gain, although without actually expressing the maxim of Andrés Manuel López Obrador that the best foreign policy is domestic policy. But the President-elect is now being asked to state his position on foreign policy matters and he has begun to offer some hints.

Before his victory at the polls, Bolsonaro had managed to dodge such foreign policy issues with relative success. In the months before and during the campaign he made contradictory statements regarding the Paris Agreement on climate change and on the possible unification of the Ministries of Agriculture and the Environment, raising the alarm amongst environmentalists, given the potential repercussions for the Amazon. He also spoke out against the United Nations (‘a meeting place for communists’) and in favour of Israel (and of moving the embassy to Jerusalem) and advocated a deeper relationship with the US. There were even threats –some less veiled than others but always subsequently denied– of a possible military intervention against Venezuela.

In this respect, the identity of the new Foreign Minister remains a high point in the debate over the direction the new government will take. In the past, Bolsonaro has questioned why a diplomat like Celso Amorim might become Defence Minister while a military official has little hope of becoming Foreign Minister. Not only is such a reflection provocative, its content has also generated some nervousness in Itamaraty, as have Bolsonaro’s declarations on the ideological bias of Brazilian foreign policy under the Lula and Rousseff governments. Clearly, 14 years of PT control significantly influenced not only the training of new diplomats but also the composition of the diplomatic corps itself, along with the country’s international objectives and its way of seeing and inserting itself in the world.

To a certain extent, nationalism and developmentalism are common values shared by important segments of two of Brazil’s most powerful corporations: the military and the diplomatic corps. Today such views –long held by Bolsonaro–stand in stark contrast with the ultraliberal message on economic matters that Paulo Guedes defends. His positions are clearly favourable to free trade and opening up the economy. They include a determined elimination of protectionist barriers and a reduction of the ‘Brazil premium’ –the higher differential cost that investors must pay for doing business in this South American country–. Along with his objective of reforming the pension system and considerably reducing the public deficit, Guedes’ ambitious privatisation plan also stands out.

Little is known of the privatisation plan with respect to its scope and depth, although it is common knowledge that there are contradictory points of view on the issue. Some military voices demand that companies linked to strategic sectors of the economy remain under state control. The scope of protectionism will be another point of contention, as revealed by the proliferation of statements on MERCOSUR which failed to clarify exactly what the new government wants of this regional integration scheme or how it will achieve its goals.

Brazil and its neighbours: MERCOSUR

Bolsonaro’s victory has ignited two debates in Latin America, and especially in South America. The first is over the effect in neighbouring countries of the shock wave generated by his electoral victory. The emergence of xenophobic voices in some Latin American capitals, along with a rising demand to control migration and deport irregulars, seems to suggest that there will be at least some contagion effect. A more complicated question, however, is whether other new national leaders will emerge in the region promoting the same values as Bolsonaro (ie, defending an anti-abortion, anti-gay marriage and cultural-values agenda, and a hard-line policy on crime, with support of the evangelical churches). Such questions are now increasingly commonplace in practically all the countries of the region.

The second debate concerns the relationship of the new government with Brazil’s neighbours. First, the shift in regional balances that began in recent years will not only continue but also gain momentum. This may spell the end of Unasur, and probably also of CELAC, although the death throes of such organisations are usually long drawn. Furthermore, the influence of ALBA in Latin America will be increasingly marginal. In statements made at the beginning of November, the Vice-President-elect, General Hamilton Mourão, corroborated the idea, claiming that Unasur is a ‘dying’ and ‘practically bankrupt institution’.

However, one of the questions of greatest interest, both in Brazil and beyond, regards the future of MERCOSUR. Argentina, Paraguay and Uruguay are concerned about decisions now being taken in Brasilia, especially after Paulo Guedes pointed out that MERCOSUR would not be a priority for Brazil. His subsequent qualifications, invoking a MERCOSUR devoid of ideology, failed to calm such preoccupations. How will the opening moves of the new Brazilian Administration affect an organisation so wedded to protectionism (especially during the Rousseff and Cristina Fernández era)? Will the traditional view that competence for trade negotiations belongs to MERCOSUR and not national governments –despite Uruguay’s long-time aspiration to negotiate bilateral agreement– finally be abandoned?

There is also the additional question of a possible convergence between MERCOSUR and the Pacific Alliance. Such an eventuality should not be ruled out, given the close relationship aspired to by Bolsonaro and Sebastián Piñera (a ‘strategic alliance,’ in the words of the Chilean President). On the other hand, we will have to see what kind of relationship Brazil will pursue with the Mexico of Andrés Manuel López Obrador. Not only are relations between the two countries traditionally difficult, but their national leaders are now positioned at opposite extremes of the political and ideological spectrum. Nevertheless, it is reasonable to expect pragmatism from both.

Furthermore, given what the Brazilian market represents for the Argentine economy and the importance of Argentine-Brazilian relations for both countries, another factor concerning the future of MERCOSUR is the personal and bilateral relationship to be established between Mauricio Macri and Bolsonaro. Traditionally, the first foreign trip undertaken by a Brazilian President-elect has been to Argentina. However, Onyx Lorenzoni, the future Minister of the Civil House (ie, the President’s chief of staff), noted that Bolsonaro’s first informal trips before assuming the presidency would be to Chile (given the current relationship between the two countries), the US and Israel. However, there could be a change of plans in the end because the new President must soon undergo surgery (as a result of the attack he suffered during the campaign), temporarily limiting his movement.

Another important issue will be the relationship with Bolivia –at least while Evo Morales heads the government–. Bolsonaro once said that national interests should prevail over ideology in international relations. It will be interesting to see if he applies the same principle to Bolivia, Brazil’s main source of imported gas (particularly as the current contract expires in 2019). Another contentious issue concerns the route of the so-called bi-oceanic railway corridor that is expected to link Atlantic and Pacific ports (a project closely related to China’s ‘One Belt, One Road Initiative’). Although Michel Temer signed an initial Brazilian commitment with Uruguay, Paraguay and Bolivia, Piñera is now trying to change things by influencing Bolsonaro. Furthermore, Bolivia recently joined MERCOSUR and its membership –now pending only Brazilian ratification– acquires more relevance in such a context.

One last factor affecting MERCOSUR will be the outcome of the negotiations for a Treaty of Association with the EU. Although there has been significant progress in the negotiations, a few outstanding issues prevent the agreements from being closed. MERCOSUR’s highly-protected automotive sector (which produces at higher costs than the international average) has been a major obstacle in negotiations with the EU. Indeed, Bolsonaro has already been pressured to extend such protection for a long transition period. There is one last (albeit tenuous) hope for an agreement to be reached at the next G-20 Summit in Buenos Aires on 30 December. But if the Treaty is not finalised by then, time will begin to work against it. On the one hand, upcoming European parliamentary elections mean that new authorities will subsequently be appointed in Brussels; on the other hand, a new Administration in Brazil introduces further delays in the negotiations.

Venezuela

Much speculation as to the new Brazilian position on Venezuela has been sparked by certain statements suggesting a possible Brazilian military invasion of Venezuela to overthrow the Chavez regime. This possibility has emerged in the wake of the arrival of thousands of Venezuelan immigrants in Brazil and related disturbances in some cities and border towns.

In mid-October, Luiz Philippe de Orleans –a deputy from Bolsonaro’s Social Liberal Party (PSL) and one of possible candidates to head Itamaraty– raised the possibility of a military intervention in Venezuela. At the time, he noted that ‘There is a dictatorship in a neighbouring country and we are doing absolutely nothing politically. We are not taking a stand against it... We must act with principles. We cannot tolerate a dictatorship in Latin America. I do not rule out military intervention’. He nevertheless clarified that the military option would not necessarily imply an invasion; instead, he might offer logistical support and funds to the Venezuelan opposition, in line with Trump’s approach.

However, the day after his election, Bolsonaro completely ruled out any possibility of military intervention, opting instead for a peaceful resolution to the Venezuelan crisis, even despite the ‘serious difficulties’ posed by the ‘dictatorship’ of Nicolás Maduro. A few days later, the future Vice-President, General Mourão, argued that Brazil should not impose trade sanctions but rather exercise greater ‘diplomatic pressure’. One possible way out of the current impasse for the new team at Itamaraty would be to break off diplomatic relations with Venezuela, a decision that would be quite detrimental to Maduro's interests. However, given the large debt the Caracas government owes to Brazil, this issue should be evaluated with greater care before resorting to such a strong measure.

With respect to Brazil’s policy on Venezuela, there are some other issues to be considered, including Brazil's membership in the Lima Group and possible coordination with the US. Brazil will likely remain a member of the Lima Group and attempt to form a core of hard-line countries opposed to the Maduro regime with whom the new government feels greater political harmony. However, not all governments will want to be associated with such a confrontational discourse against Chavismo (depending on public opinion in their respective countries).

The Trump government is interested in expanding regional support for placing increasing pressure (including military) on Venezuela, and it has made some efforts to attract certain Latin American governments, including Colombia, Chile, Argentina and now Brazil. Another option under consideration by the Trump Administration is to support rebel soldiers with the intention of provoking an internal uprising that weakens the Maduro regime. Although there have been some contacts with senior officials in Washington, there have been no concrete results to date given the resilience of the Maduro regime. At the same time, OAS Secretary General Luis Almagro advocates a Venezuela Plan against drug trafficking as the most effective strategy for weakening Chavismo. Such an initiative might also be well received by the new Brazilian administration.

Relations with the US, China and other international actors

The governments of the US and Brazil have exchanged messages expressing an interest in a deeper mutual approach for developing joint regional initiatives over the medium term. The aim would be to influence not just Venezuela, but also Cuba and Nicaragua. In a recent speech in Miami, Trump’s National Security Adviser, John Bolton, called those three countries ‘the troika of tyranny’. On the one hand, the future of the Cuban programme Mais Médicos (More Doctors) that supports primary care in Brazil is in danger, but the depth of the entire relationship with Cuba could also be at stake. Bolsonaro believes that Mais Médicos is financing the ‘Cuban dictatorship’ and he asks: ‘What business can we do with Cuba? Are we talking about human rights?’. With respect to the Brazil-Cuban relationship, he added: ‘Can we maintain (diplomatic) relations with a country that treats its citizens in such a (bad) way?’

On several occasions during the campaign, Bolsonaro pointed out that: ‘Trump wants the US to be great. I also want a great Brazil’. In line with such statements, he has also been willing to back the US’s Israel policy and to adopt Washington’s determination to establish its embassy in Jerusalem: ‘If a country decides where its capital is located, we must act accordingly’. He also criticised the location of the Palestinian embassy (very close to the presidential palace) and suggested the possibility of lowering the level of diplomatic recognition in effect since 2010: ‘Palestine needs to be a state to have the right to an embassy’.

Although the convictions of the President-elect remain firm, many voices have already warned that such measures could affect relations with Arab countries to the detriment of Brazilian interests. The PT governments bet heavily on the maintenance of strong ties with the Arab countries. Brazil was also the principal promoter of ASPA, the Summit of South American-Arab Countries (four summits have been held to date). Furthermore, Arab countries represent the second largest export market for Brazilian meat products. In 2017 total Brazilian exports to the Arab countries totalled US$13.5 billion, generating a trade surplus for Brazil of more than US$7 billion. Some of the major Arab sovereign wealth funds have been considering investing in various Brazilian infrastructure projects, a plan that could be frustrated if the embassy move to Jerusalem goes forward. North Africa is another area that could experience reduced Brazilian presence. This might generate important opportunities for other countries and competing companies.

Bolsonaro has insisted that China does not buy Brazilian products to the same degree that it exports to Brazil. He claims in fact that the Chinese are actually buying Brazil itself. Along the same lines, he also claimed that China is a ‘predator that wants to dominate crucial sectors of (Brazil’s) economy’. Therefore, he believes that the Chinese should not be authorised to buy land or to control strategic industries in Brazil. To complicate matters further, Bolsonaro visited Taiwan in February 2018, prompting an angry response from Beijing, which considered the visit to be ‘an affront to the sovereignty and territorial integrity of China’.

This explains the particularly harsh and threatening tone of an editorial in the Global Times, an official Chinese newspaper linked to the People’s Daily of the Chinese Communist Party (CCP). The title of the article asked ‘Will the new Brazilian government reverse China policy?’. The editorial began by describing Bolsonaro as a ‘tropical Trump’ and recalled his accusations against China during the campaign. However, it also acknowledged the fact that shortly before the second round of the elections, Bolsonaro began to change his tone: ‘we will do business with all countries and China is an exceptional partner’. The editorial therefore concluded that it would be ‘unthinkable’ for Bolsonaro to decide to replace the Brazil-China trade with Brazil-US economic ties, and that ‘China never interferes in Brazil's domestic affairs’.

However, the editorial tone hardened in reference to the Taiwan visit, suggesting that if Bolsonaro ‘continues to disregard the basic principle over Taiwan after taking office, it will apparently cost Brazil a great deal’. Finally, the editorial remarked: ‘Many observers tend to believe that Bolsonaro, who has never visited the Chinese mainland, doesn’t know enough about Oriental power. But it’s worth Beijing’s attention that he was a China-basher during the campaign and believed an unfriendly stance on Brazil's largest trading partner would help him get elected’.

Given that such considerations come from a paper closely linked to the highest echelons of Chinese power, it is worth asking how Bolsonaro will react and what kind of relationship he will strive to have with a China that is now a key counterpart of Brazil in a ‘comprehensive strategic partnership’. Furthermore, China is Brazil’s main trading partner, with whom Brazil enjoys a US$20 billion trade surplus. The President-elect is very concerned with Chinese expansionism in his country and worried in particular about Brazil’s growing financial dependence on China. Brazil is China’s second-largest debtor in the region after Venezuela. Between 2005 and 2017, Brazil received 12 Chinese loans for a total value of US$42.1 billion. This has allowed the Industrial and Commercial Bank of China (ICBC), the Bank of China, the Construction Bank of China and the Bank of Communications of China, among others, to open branches in Brazil.

The accumulated stock of Chinese direct foreign investment (FDI) in Brazil exceeds US$40 billion. It is concentrated in sectors such as energy, agriculture and livestock, telecommunications, equipment manufacturing and mining. In 2016 the Chinese company Molybdenum purchased a Brazilian niobium mine (used to produce steel for aerospace and automotive companies) for US$1.7 billion. Like many of the developmentalist military officers who support him, Bolsonaro believes that certain strategic companies should remain under Brazilian control. In the specific case of niobium, Brazil controls 85% of the global market.

In the current context of fragile economic growth, Brazilian dependence on exports to China, and on capital inflows from the Asian giant (in the form of FDI and loans), is enormous. This weakens the leverage of the new government in the face of Chinese pretensions to maintain positions previously acquired in Brazil. If Bolsonaro chooses a closer relationship with Taiwan –or a China policy more in line with the Trump Administration in its confrontation with the People’s Republic– Beijing’s response could be very forceful and harsh. However, it is worth remembering that Bolsonaro is not Trump and that Brazil is not the US. How far will Bolsonaro go in his confrontation with China? And regardless of what Guedes has claimed, will national interests or ideology prevail?

Finally, there are Brazil’s relationships with the EU and Spain to consider. First, it should be noted that during the campaign Bolsonaro made practically no mention of either. Moreover, neither the EU nor Spain imply any essential points of conflict for Brazil or its future government agenda. From the European perspective, the greatest interest lies in the outcome of the negotiations for the Treaty of Association with MERCOSUR. The possible alliances that Bolsonaro might establish with xenophobic leaders or populist movements are also a cause for concern.

It is unlikely that there will be any major variations in the Spanish-Brazilian bilateral relationship. The Spanish Ambassador in Brasilia, Fernando García Casas, has already held an interview with the President-elect, a conversation that Bolsonaro himself described in very complimentary terms. And if from the diplomatic perspective it is unlikely that there will be noticeable changes (unless there are serious moves against Brazilian democracy), they are even less likely from the business perspective. The pro-market climate promoted by Guedes is also favourable for Spanish companies.

Conclusions

In any case, and similarly to Trump’s arrival at the White House, after an initial bewilderment and the shock of Bolsonaro’s victory, both the governments and politicians of the region are adapting to the new scenario. Not for nothing is Brazil the biggest Latin American economy with which everyone wants to have good relations, beyond the fact that Brasilia has never been too keen to be a regional power.

Lula, for instance, aspired to have Brazil to compete in the major leagues, as shown by his promotion of the BRICS and the failed mediation attempt, alongside Turkey, in the Iranian conflict to reduce Tehran’s commitment to building nuclear weapons. It remains to be seen what the aspirations of the Bolsonaro government might be in this regard. If the so-called ‘strategic alliance’ with Chile is further consolidated, it is possible that Brasilia will assume a more active role in the region.

MERCOSUR is a very special case. After the initial confusion generated by the words of Paulo Guedes, there is a growing consensus among the partners (Argentina, Paraguay and Uruguay) that the regional bloc will not dissolve, although it will be subject to deep revisions. Some such changes had already been requested before Bolsonaro’s victory, such as Uruguay’s petition to be able to negotiate bilateral trade agreements.

With respect to other extra-regional actors, a closer relationship the US seems evident, although it remains to be seen how Brazil’s large interests will position themselves. Too much proximity to Donald Trump could lead them to lose positions in other countries, regions and markets. And if the Arab countries provide a clear example, the case of China is even more of a case in point. China’s presence in Brazil increased considerably during the years of Lula and Rousseff: will Bolsonaro want such a presence furthered, or even maintained? Or, on the contrary, will he join the voices already beginning to speak of the need for greater containment of Chinese expansionism. Only once Bolsonaro begins to exercise power on 1 January 2019 will we be able to answer many of these questions.

Carlos Malamud
Senior Analyst, Elcano Royal Institute
 | @CarlosMalamud

]]>
<![CDATA[ The Brazilian elections ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari111-2018-solanogallego-brazilian-elections 2018-10-04T03:51:54Z

The upcoming Brazilian elections are unfolding in an atmosphere of intense political and economic crisis, and it is not yet clear whether the second round will once again shape up as the classic confrontation between the Workers’ Party (PT) and the Brazilian Social Democracy Party (PSDB).

]]>
Original version in Spanish: Las elecciones brasileñas

Theme

The upcoming Brazilian elections are unfolding in an atmosphere of intense political and economic crisis, and it is not yet clear whether the second round will once again shape up as the classic confrontation between the Workers’ Party (PT) and the Brazilian Social Democracy Party (PSDB).

Summary

With the former President, Dilma Rousseff, out of office as the result of a polemical impeachment and with Luiz Inacio ‘Lula’ da Silva in prison after having been a priority target of Operação Lava Jato, the electoral future of the Workers’ Party (PT), along with the future of Brazilian politics, remains highly uncertain as the country faces the October presidential elections. Before being disqualified by the courts, Lula led the polls while the current President, Michel Temer, was rejected by more than 80% of Brazilians and unemployment was running at 13%. This suggests that Brazil’s next election will be anything but trivial. Some have even to come to see the upcoming contest as a face-off between ‘civilisation and barbarism’: the traditional parties and candidates on the one hand against the extreme authoritarian right on the other, the latter represented by Jair Bolsonaro, a true anti-democrat.

Analysis

A turbulent context

If political analysts agree on anything with respect to Brazil it is that the elections will be historic. Brazilians will go to the voting booths two years after a highly controversial impeachment of the former President, Dilma Rousseff. Described by many as a ‘juridical-parliamentarian coup d’état’, the impeachment gave rise to a dramatic political rupture and a deep social trauma. It increased the fragility of the democratic order and accelerated the processes of political degeneration and a growing loss of confidence in representative structures.

Luiz Inacio ‘Lula’ da Silva –the best-known President in the history of Brazil, who rose to power with a record 87% approval rate– has been detained in the Federal Police Prison in Curitiba since April 2018. Although Lula is in jail, nevertheless, he paradoxically commands the electoral strategy of the Workers’ Party (PT) from his prison cell. And even though he is behind bars and disqualified from being a candidate, he is backed by a 39% intended vote. By contrast, Michel Temer is the most rejected President in the history of the re-democratised Brazil, with an approval rating of less than 4%.

Temer lost the confidence of the markets with his hapless management. The political party closest to him –the Brazilian Democratic Movement (MDB)– is also mired in a number of serious corruption scandals. Its leaders behave more like the ‘strongmen’ owners of Brasilia than like the citizens’ elected representatives. Indeed, post-Lava Jato Brazil has inherited a strong anti-political sentiment and a splintered and polarised society. On the one hand, there are those who think that the anti-corruption campaign is nothing more than the political persecution of the PT, a campaign that crushes the rule of law and ignores the guarantee of due process for the accused. On the other hand, there are those who praise Operação Lava Jato, arguing that political power in Brazil is corrupt and that prison is the only way to bring the plague to an end.

The recent anti-corruption campaign (at least in its Lavajatista form) is led by a politically militant judicial branch that does not respect the balance of power and stoops to the tactic of exploiting the spectacle of populist justice. Preoccupied more with public opinion and media exposure than with the prudence and impartiality that should guide such a process, the judges have engaged in a routine dramatisation of justice, seeking to attract large audiences through marketing techniques. The transformation of justice into a ‘hyper spectacle’ (since the Mensalão scandal in 2005), along with the increasing role of the media as a court of justice, has served to convince the electorate that all politicians are corrupt. The direct association of politics with corruption promotes authoritarian and anti-democratic political stances which are inevitably portrayed as anti-system and controlled by outsiders.

The central issues of these elections have revolved around the economic, political and public security crises plaguing the country. With unemployment at 13%, investment significantly down and GDP growth of only 0.4% in the first quarter of 2018, economic issues continue to dominate political debates. In addition to economic problems, public safety concerns continue to provoke social unrest. The PT failed to address the issue, guided as it was by the flawed perspective that rising incomes and expanding work in the formal sectors would lead directly to a decline in violence and crime. The Temer government has also been incapable of resolving this issue; it has only offered a militarised response to public security challenges –as revealed by the federal intervention in Rio de Janeiro–. Such action is nothing more than electoral fireworks and produces no concrete results. Violence in Brazil cannot be resolved by placing increasingly heavily-armed military personnel on the streets; a better life and future must be made possible for the urban youths who die and kill. Brazil has more than 60,000 violent deaths a year, and there are more than 700,000 people in its prisons. No-one knows how to solve the problem.

Any elected candidate will have to face a broad range of challenges. First, the economy: the markets expect the pension reform to be approved. However, the reform –both polemical and far-reaching–will only be possible with solid parliamentary alliances to back the vote, something that will be difficult to achieve. Other reforms are also urgently needed. Tax reform will be required (as the current fiscal regime favours the richest and places an excessive tax burden on the poor). Political reform is also needed to reduce the number of political parties in Parliament (currently 37), to cut back the increasing cost of election campaigns and to prevent certain partisan coalitions from obstructing parliamentary work.

If the PT wins the election, the rhetoric of coup d’etat, of the political persecution of Lava Jato and of the political imprisonment of Lula will have emerged victorious. However, the party would then be faced with the challenge of regenerating its image and governing with a very conservative Congress that will likely prevent it from approving many of the progressive initiatives included in its electoral programme. The election of 2014 gave rise to one of the most conservative legislatures in Brazilian history (or at least during the most recent period of democracy). There are large numbers of deputies from evangelical and business parties (and from among the large landowners) who favour a tough law-and-order agenda for public security. This 2014 scenario appears set to reproduce itself in 2018.

The centre-left and... the extreme right

Lula is –without a doubt– the outstanding symbol of these elections. On 31 August the Supreme Electoral Court (TSE) determined that Lula da Silva had lost his political right to present himself as a candidate. The PT executive had earlier registered Lula’s candidacy and then decided to officially maintain it, although in practical terms Lula had been disqualified. There are two explanations behind such a strategy: on the one hand, Lula is the most valuable political asset in PT history; on the other, the PT continues to wield the discourse that the former President is indeed a political prisoner, the victim of a coup d’état and of organised judicial persecution to block his candidacy and his otherwise likely victory. In basic terms, it is a battle to win both votes and the narrative.

Lula leads all the polls at levels that could be considered extraordinary (38%-39%). Public opinion surveys from last April reveal that 50% of Brazilians believe Lula’s imprisonment was right (compared with 40% who consider it unjust). Half the country believes that justice should ban him from participating in the elections while 48% think the opposite. It is ironic that a jailed candidate can come close to winning the elections in the first round –were he able to stand as candidate–.

The elections will take place on 7 October. Given the impossibility of Lula’s candidacy, the PT is stretching out the relevant legal periods to the maximum, resorting to appeals and other judicial footwork to keep Lula’s name on the electoral registry as long as possible, before replacing it only at the last possible moment. After the TSE’s decision, the last legal move available is a final appeal to the Supreme Federal Court. But, almost certainly, the high court will also reject Lula’s candidacy. The deadline established by the magistrates is 11 September, when the PT lawyers are expected to definitively rule out the former President as a candidate. All indications suggest his place will be taken by Fernando Haddad, previously registered as the Vice-Presidential candidate. Haddad has an ample curriculum as Minister of Education from 2005 to 2012 and as Mayor of São Paulo from 2013 to 2017 but is little known in many regions of the country. Although Lula no longer appears as the candidate in PT campaign material, his legacy and imprisonment are still clearly emphasised in order to exploit his political capital to the maximum in an attempt to transfer votes from Lula to the definitive PT candidate.

The PT is betting on the possibility that by associating the images of the two leaders, with Haddad taking up Lula’s vote as the campaign progresses: thus, Lula becomes Haddad. The potential to transfer votes from the former to the latter is the single factor that in large part will determine the outcome of the election. According to the latest Datafolha durvey (20 and 21 August), Lula has 39% support, followed by Bolsonaro (Social Liberal Party, PSL) at 19%, Marina Silva (Sustainability Network) at 8% and Geraldo Alckmin (PSDB) at 6%. With Lula out of the race and Haddad in his stead, Bolsonaro rises to 22% and Silva to 16%, but Haddad trails behind with a mere 4%. Intended blank and spoiled votes would also double to almost 22%. However, according to the results of a survey by XP Investments (27 and 29 August), when people are directly informed that Lula is backing Haddad –as electoral campaign material made clear throughout September– support for the former Mayor rises to 13%, guaranteeing he passes to the second round.

For the moment, the other noticeable beneficiary of vote transfers would be Marina Silva, the Minister of Environment under Lula. While Haddad remains unknown to a large part of the electorate, particularly in the North-East, Marina Silva is known to 93% of Brazilians. According to Datafolha, 27% of voters have never even heard of Fernando Haddad. Nevertheless, most if not all analysts argue that as the campaign progresses, Haddad will intensify his trips to the North-East, PT propaganda will increasingly associate his image with that of Lula and the former Mayor of São Paulo will gain visibility in the process and wrest votes from Marina Silva.

The same problems that drained her strength as a candidate in 2014 continue to affect Marina Silva today. During the last election, she was the vice-presidential running mate of Eduardo Campos. However, after Campos died in an air crash, she became the favourite of the electorate. Still, she has not positioned herself clearly during certain crucial national moment and her identity remains confused. She is an evangelical but does not represent many evangelicals. She is a progressive, but many identify her as an evangelical. She is considered to be close to Lula, but she defended Lava Jato. And while she defines herself as the sustainability candidate, her 2014 campaign was financed by Itau Bank and the company Natura. Nevertheless, Silva represents a moderate third way that attempts to elude the polarisation between PT-ism and anti-PT-ism, and she is identified as responsible, ethical and not corrupt, attractive features for many voters.

Another centre-left candidate is Ciro Gomes of the Democratic Labour Party (PDT). In recent polls he clocked up 12% of the intended vote. Both a former Minister of National Integration and former Minister of Finance, Gomes is an intelligent and highly qualified candidate. However, he faces an obstacle in that his electoral fiefdom is the Brazilian North-East (where he was Governor of Ceará from 1991 to 1994) but where the PT also has the extraordinary capacity to weave political alliances that could leave him bereft of support.

Nevertheless, if the centre-left vote is essentially divided between the PT candidate and the former PT member Marina Silva, the same could occur with the centre-right, which is also in dispute. Public opinion believes that the PT has been the party to suffer the most from Lava Jato, but the PSDB has also been hit hard. The latter’s main leader, Aécio Neves –who came in second in the presidential elections of 2014– now has an open case against him at the Supreme Court on charges of passive corruption and obstruction of justice. Meanwhile, the current Governor of São Paulo, Geraldo Alckmin (the ‘tucano’ candidate) has been unable to take off in the polls and continues at an anaemic 6%. A discrete man lacking charisma, Alckmin is also plagued by the shadow of corruption and therefore faces significant difficulties in this election. His strong point is that he represents the traditional and powerful electoral machinery of Brasilia and he enjoys the backing of the press. His alliance with the parties of the so-called centrão politico (the political centre) allows him ample TV advertising time for election promotion. This is his major weapon, but his appalling position in the polls only one month before the beginning of the elections is a cause of concern for those who support him. While Alckmin has commercial blocks of political advertisements that run to five minutes and 32 seconds, the election ads of PT are two minutes and 23 seconds, those of Marina Silva only 21 seconds and those of Bolsonaro a mere eight seconds. In his ads, Alckmin has a serious mien and criticises the authoritarian demagoguery of Bolsonaro, his main competitor.

On the other hand, this will be the first time that the MDB fields its own candidate: Henrique Meirelles, the recent Minister of Finance, a former Chairman of the Bank of Boston and Chairman of the Central Bank from 2003 to 2010 during the Lula presidency. He is the representative of Temer’s government, which currently has an 80% rejection rate. His backing in the polls is only between 1% and 2%. All signs indicate that after the 2018 election, the MDB will return to where it has always been: in the shadows and backrooms of power, a position it comfortably occupies and from which it guarantees the governability of other parties –the PT, in the past, but perhaps now the PSDB, depending on which party emerges victorious–. The three major groups in the Congress are the PT (70 deputies), the MDB (66) and the PSDB (54). As is often said in Brazil: ‘No one governs without the support of the MDB’.

Therefore, the space left by the centre-right has been occupied by the far right. Jair Bolsonaro –a former army Captain and Federal Deputy for Rio de Janeiro since 1991– is now in second place with 19% of the intended vote, behind Lula. He is a typical far-right candidate: a braggart, demagogue and homophobe with simplistic and populist solutions for everything, but particularly in public security. His proposals include a reform of the penal code to toughen sentences, an increase in jailing rates, a reduction in the legal penal age from 18 to 16 years, the militarisation of schools and an iron hand all round. He tells his voters that these policies will resolve the security chaos in Brazil. He is also the candidate who best captures the anti-political sentiment of the slogan reigning in Brazil since Java Jato: ‘They all (the politicians) should leave’. Bolsonaro portrays himself as the only honourable candidate who has not been involved in any of the recent corruption scandals. Finally, he waves the flag of traditional values, articulating a discourse that prioritises law and order, and lauds authority, the family and the value of work and effort.

A paradox of Brazilian political life, Bolsonaro became the victim of his own discourse of hate when he was stabbed on 6 September during an election rally by a clearly deranged individual. Analysts agree that the attack will prove beneficial for his image because it legitimises his rhetoric of victimisation and further strengthens his already popular narrative of an unprotected citizenry and the overriding necessity to be tougher as regards public safety. However, analysts also coincide that while it will help Bolsonaro pass to the second round, he will probably lose in the end. In the last survey by the Brazilian Institute of Public Opinion and Statistics (IBOPE), undertaken on 1-3 September, Bolsonaro was projected to lose under all second-round scenarios –except against Haddad, with whom he would technically tie–. This explains why his rejection level is the highest of all candidates: 44% (followed at a distance by Marina Silva, at 26%).

According to an XP survey of 204 investors in June 2018, the market is most attracted to the candidacy of Alckmin. However, only 31% think he has any real chance of winning and 48% project a victory for Bolsonaro. Some 45% believe that the second round will be contested between Ciro Gomes and Bolsonaro. But a victory for the far-right candidate would not cause a market panic: 49% think that the São Paulo Stock Exchange index would rise if Bolsonaro wins.

Following traditional political science, it might be said that Bolsonaro himself has no real chance of winning the elections. The party to which he is affiliated (PSL) is very small and currently has only eight deputies, allowing him only the minimum eight-second TV ads and much less public finance for his campaign than the other parties. But this is not a traditional election. With 5.3 million followers on Facebook, he is clearly the candidate representing the negative vote, the rejection of the system, the politicisation of anti-politics and a vote of frustration and rage from an electorate that no longer trusts traditional parties or political figures. Bolsonaro is also the candidate most favoured by the anti-PT and anti-Lula discourse.

Conclusions

Everything about this election is atypical. Therefore, projections are complex. Within a scenario of uncertainty, however, some things have become clearer. If two years ago it was believed that the PT would be the great victim of Operação Lava Jato, perceptions have changed completely. No one expected an imprisoned Lula to have 39% support levels, showing that the PT is imposing its narrative, with a discourse of coup d’état and political imprisonment. It is very revealing that the PT is now the preferred party of 24% of Brazilians, far ahead of the MDB and PSDB (preferred by only 4% each). As they say in Brazil: ‘If Judge Sergio Moro did not finish off the PT, he might end up raising it to the Planalto’ (ie, the seat of the presidency of the Republic).

Many analysts believe that the presence of the PT in the second round is guaranteed thanks to the potential for Lula votes to shift to Haddad. But the most significant unknown, without a doubt, is the battle between the traditional centre-right (represented by Alckmin, with all the electoral and political machinery but very low popularity) and the new far right (represented by Bolsonaro, who lacks electoral and party machinery but is highly popular and seen as the heir to political despair and frustration). But should electoral machinery carry the day, there will once again be a classic second round with the PT facing off against the PSDB.

Beyond this struggle for electoral victory, Brazil urgently needs a stable government that takes on the root causes of the economic crisis engulfing the country and that enjoys enough support to undertake political reforms to make its representative system fairer and democratic. Stability will not be easy to achieve in the face of current social polarisation, the imbalance between political forces and especially given the role that the MDB and the other parties of the centrão played in the impeachment of Dilma Rousseff. For the Brazilian middle class these factors do not imply a significant impact but for the country’s poorest the effects are devastating. For instance, the infant mortality rate has begun to rise again for the first time since 1990. So, while some politicise ‘anti-politics’ and others wield demagogic discourses or weave complicated political alliances in the backrooms, the most vulnerable citizens continue to pay the price.

Esther Solano Gallego
Professor at the Federal University of São Paulo

]]>
<![CDATA[ The anger vote: the new (or not so new) Latin American electoral phenomenon ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari107-2018-malamud-nunez-anger-vote-latin-american-electoral-phenomenon 2018-09-20T05:28:44Z

Latin America’s intense electoral season has reflected its broad heterogeneity; nevertheless, the recent elections have also revealed the emergence of a cross-cutting phenomenon –the ‘anger vote’– common to the entire region.

]]>
Original version in Spanish: El voto del enojo: el nuevo (o no tan nuevo) fenómeno electoral latinoamericano

Theme

Latin America’s intense electoral season has reflected its broad heterogeneity; nevertheless, the recent elections have also revealed the emergence of a cross-cutting phenomenon –the ‘anger vote’– common to the entire region.

Summary

This paper analyses the social, economic, institutional and political cultures that have given rise to the ‘anger vote’, an emerging phenomenon particularly visible in the region’s current election cycle (2017-19). The ‘anger vote’ can be defined as the rejection of political parties, traditional political elites and the record of democratic institutions by the majority of a country’s citizens. It also considers the diverse and heterogeneous features that such voting reveals and the types of leadership it promotes, along with some of the main examples of the ‘anger vote’ recently seen in the region. To conclude, it confirms the phenomenon’s existence, regardless of national variations.

Analysis

Introduction

Latin America is now in the midst of an intense election marathon. From October 2017 to the end of 2019, 14 of the region’s 18 countries will have elected (or in some cases re-elected) their Presidents. The election season is politically reconfiguring the region, challenging its balances and putting to the test the so-called ‘turn to the right’. The elections have demonstrated the region’s wide diversity: the victories of the centre-right have coexisted alongside the successes of social-democratic leaders (like Carlos Alvarado in Costa Rica), even more left-leaning figures (like Andrés Manuel López Obrador, AMLO, in Mexico) and even ‘21st century socialism’ (Nicolas Maduro, after a highly questioned election in Venezuela).

Despite the diversity, most of Latin America’s recent elections have something in common. More as a vote ‘against’ than ‘in favour of’, a significant portion of the region’s angry population has voted to punish the ‘establishment’, including the political elites and institutions. There is a general sense of dissatisfaction with the weak inclusiveness of public policies. Citizens also criticise the functioning of the political system and the working of the institutions, seeing them as ineffective mediators between citizens and a State that has become incapable of guaranteeing rights and basic procedures. In this context, many leaders –facing varying situations and distinct national dynamics– have been able to take advantage of discontent to win elections (AMLO in Mexico) or to move from the margins of the political arena onto centre-stage (the Frente Amplio in Chile and Fabricio Alvarado in Costa Rica).

As explained elsewhere, ‘in general, social fatigue with the democratic political system and its central institutions (the political parties, parliament, the judiciary and government administrations) tends to manifest itself as a vote against the system. With their corresponding national differences, corruption and violence have become the wrecking balls that punish the region and its people. In the recent past it was common to find a certain tolerance for corruption. National variations on the expression, ‘they steal, but at least they get things done’, have manifested themselves over time here and there. But the Odebrecht case –with its high-level political, economic and financial implications– has been a watershed. The patience of the citizenry has reached its limit. And although it is not expressed with the same resounding explicitness as when the Argentines, in the wake of the corralito, demanded that “they all should leave”, the lack of confidence in the region’s political leaders is now near complete’.

The political backdrop to the ‘anger vote’

Twenty years ago, as an expression of a desire extending across the region’s societies, Latin America experienced the emergence of a ‘vote of rage’ that condensed itself into the demand that ‘they all should leave!’ (that is, all the politicians of the moment). During the crisis of the ‘Lost Five Years’ (1997-2002), popular discontent did away with numerous governments. Elections in Mexico in 2000 ended 70 years of PRI domination. In 1999, elections in Venezuela brought an end to 40 years of bipartisan (adeco and copeyano) hegemony. Something similar happened in Uruguay in 2000 when the dominance of the colorados and the blancos came to an end. Meanwhile, ‘street coups’ and social explosions toppled governments in Peru (2000), Ecuador (2000 and 2005), Argentina (2001) and Bolivia (2003).

The end of the economic crisis (2002-04) and the boom of the Golden Decade (2003-13) opened a new chapter in the history of the region, driven by the rise in commodities prices and marked by the emergence of new leadership (including many from the so-called ‘turn to the left’). Political stability, enduring party hegemonies and the rise of charismatic leaders of varied ideology –including Hugo Chavez, Evo Morales, Daniel Ortega, Rafael Correa, Lula da Silva, Alvaro Uribe and the Kirchners– were characteristic of the period.

A decade later, such ways of conducting politics began to lose ground. In part, this was a result of the economic slowdown (beginning in 2013) and a growing fatigue among voters with both old and new leaders. Popular unrest re-emerged to form the backdrop to the coalescing ‘anger vote’ which had a treble origin: a rejection of the existing political and institutional frameworks (clientelism, corruption and bad administrative practices); a questioning of the economic model (given the crisis and the slowdown); and ongoing social discontent (reflected in a fall in expectations for intergenerational improvements and a fear of losing achieved status, especially among the heterogeneous middle classes).

Various opinion surveys confirm this. For the past six years, Latinobarómetro has reflected the growing disaffection in Latin American societies with democracy, the political class and republican institutions. However, the problem is not unique to the region: it also plagues the EU and the US. Furthermore, such sentiment has grown in the wake of the expansion of the region’s middle classes and their growing citizen demands –now perceived to be increasingly ignored–. The Latin America Public Opinion Project (Lapop) reveals a decline in public support for democracy of 12 percentage points in only five years: from 69% in 2012 to 57.8% in 2017.

Figure 1. Support for democracy in Latin America and the Caribbean (%)

Democracy itself has seen an in its effectiveness, as have the leaders in charge. The change in the economic cycle made clear the bankruptcy of the official classes, whose governments had fewer and fewer resources as exports fell. Some elites were defeated at the polls because their middle-class societies demanded better-functioning public services and they made their discontent felt in their votes.

The region’s public has indicted their public institutions and political parties: indeed, many of them no longer believe in democracy. What is more, according to a Lapop survey in 2017, support for democracy is even weaker if considering the public’s opinion of related democratic institutions, like political parties. Across the region as a whole, the highest level of public confidence in national political parties (only 35%) is found in Nicaragua (see Figure 2).

Figure 2. Trust in political parties (%)

The widespread inefficacy and inefficiencies of Latin American public administrations in the provision of adequate public services has mobilised the middle classes and eroded presidential popularity. Over the course of the past decade the process has taken root across the region. In 2011 the Chilean middle classes took to the streets to demand better public education. In 2013 and 2014 the same classes swarmed the streets of Brazil seeking improvements in transport and other public services. And in 2015 corruption prompted the Guatemalan middle classes into taking action, leading to the fall of Otto Pérez Molina. All these cases had much in common: in a context of anaemic economic growth, the state maintained neither adequate citizen security nor sufficient public services (health, education and transport), showing signs instead of widespread corruption. This caused intense social protest led by the middle classes.

During the commodities boom, the middle classes grew and poverty declined. From 2003 to 2013, between 70 and 95 million people rose in socioeconomic terms. But this is a highly diverse social segment: its lower fringe is exposed to the vulnerability of dropping back to its previous social stratum given the lack of adequate social coverage or of any protective cushion. The middle segment fears losing its current status and previously acquired purchasing power. Slow economic growth (between 1% and 2% of the average regional GDP) is insufficient to attend to rising expectations and therefore threatens previously consolidated social gains. Nor do current growth rates suffice to reduce poverty or to generate enough quality jobs. On the contrary, anaemic growth now combines with rising inequality.

Characteristics of the ‘anger vote’

The rejection vote has been in the making for years now (at least since the end of the boom in 2013), undermining traditional political systems and parties, and challenging the historical political class. Rejection is aimed at ineffective public administrations and demands a strategy for the improvement of public services. Discontent has deep historical roots but has become more acute over the past five years. Its precedents go back to the beginning of the transition in the 1980s. From 2015, however, and especially today in 2018, its principal manifestation has become the ‘anger vote’. And if it is true that the electoral trend is now spreading across many Latin American countries, the phenomenon’s characteristics are quite diverse, particularly given the region’s heterogeneity and the various political and electoral processes underway.

The ‘anger vote’ is a cathartic act which responds to the deep and widespread unrest and discontent with national institutions and representatives. The electorate seeks alternatives to the traditional parties and leaderships and tends to support figures who present themselves as ‘outsiders’, although they rarely really are. The major exception in this regard is the Guatemalan Jimmy Morales, an actor who plunged into politics as a stranger to the traditional political classes. Others in the group have held positions of responsibility as governors or mayors (AMLO and Petro), as ministers (Juan Diego Castro) or as parliamentary deputies (Jair Bolsonaro and Fabricio Alvarado). Others have had a place within the parliamentary opposition (the Chilean ‘Broad Front’) but without wielding any power or responsibilities at the national level.

After occupying posts below the national or ministerial levels, these leaders have become the opposition. They are not sustained by the large parties but rather draw on support from the political margins. For instance, Bolsonaro is the candidate of the tiny Social Liberal Party, while Fabricio Alvarado was the candidate of the National Restoration Party (which until 2018 had no more than a single deputy in the national parliament). Others have always been in the opposition (like MORENA, in the case of AMLO, despite his early passage through the PRI) and have integrated recently into newly created coalitions (the ‘Broad Front’ in Chile) or have contested elections backed by platforms without links to the traditional parties (as in the case of Gustavo Petro).

These leaders do not seek a reform of the political system but rather to transmit a message of total rupture. They want to sweep away the current system (Juan Diego Castro), push for its refoundation (AMLO) or do away with certain ways of conducting politics (Petro and the so-called ‘marmalade’). This emerging electorate is linked to the formation of what specialists have called the new ‘cleavages’ (Kirchnerism versus anti-Kirchnerism, Uribe-ism versus anti-Uribe-ism, Chavismo versus anti-Chavismo and PRI-ism versus anti-PRI-ism) which are characterised by intense political –as opposed to ideological– polarisation. The phenomenon co-exists with the progressive fragmentation of the political spectrum and the party system, and alongside forces located within the ‘anti’ versus ‘pro’ dynamic. And if AMLO and Petro veered towards pragmatism and moderation during their campaigns, both back re-foundational projects. AMLO has reiterated that he will undertake the fourth transformation of Mexico –following Independence, the Reform and the Revolution– and that he wants to go down in Mexican history like Juarez, Madero and Lázaro Cardenas.

The ‘anger vote’ is neither linear nor monolithic; rather it is diverse and heterogenous. Nor is it highly defined, given those who embody it and express its meaning. It is more a vote ‘against something’ than a vote ‘in favour of somebody’ –more a vote ‘against the system’ than an ‘anti-system’ vote. For this reason, it is carried forward by strong leaders, although they are often of different political tendencies. They range from Bolsonaro on the extreme right to Petro and the Chilean ‘Broad Front’ on the left; they include the nationalist demands of AMLO and Fabricio Alvarado’s mobilisation of the ultraconservative evangelical vote in defence of traditional values. Beyond the nuances that separate Bolsonaro (with his authoritarian, sexist, xenophobic, racist and homophobic messages) from Petro (equal rights for women and homosexuals), they share an anti-establishment and anti-party idiosyncrasy which is fed by the frustrated middle classes in the face of governments overwhelmed by popular disaffection and unrest, given their subpar administrative management and the lack of adequate public policies.

The leaders and movements riding upon this popular anger do not exercise any particular political pedagogy on their electorates. They merely feed the sense of exhaustion and disaffection. They have undoubtedly stoked a ‘revolution of rising expectations’, promising profound and rapid change while simplifying the content of their discourse. To capture the majority of the votes, their proposed solutions are direct, simple and not over elaborate. AMLO is a good example: regardless of his turn towards moderation during the campaign, the message that took hold among the people exhibited such characteristics. The simplicity of AMLO’s message transmitted the idea that only one factor was responsible for poverty, inequality, corruption and anaemic economic growth, summed up by the term the ‘mafia of power’: ‘No, things will not be allowed to continue. We will not play old-school politics according to the traditional political model. This brand of politics was shattered on 1 July. People no longer will tolerate corrupt, lying and high-handed politicians who are nothing more than false puppets’.

In AMLO’s message there is a rapid and simple solution to the structural problems of Mexico: the end of corruption, the origin of all problems. With AMLO’s election victory, Mexican society now has heightened expectations that the new government will enact policies in the short-run to improve the country’s economy and security. According to an opinion survey (‘Mexico after the elections’) by Mitofsky Consultancy, nearly seven out of every 10 Mexicans (67.4%) believe that with AMLO the economy will improve in the short term. Some 65% said that that he would improve security, while 64.8% believed that he would also improve politics in general. More than three-fifths (61.1%) think that the changes initiated by the new government will begin to make themselves felt during its first year.

Figure 3. AMLO’s image, 2006-18 (%)

The ‘anger vote’ has emerged in societies marked by the growing lack of both interpersonal trust and trust in public institutions. This gives rise to scepticism, high and demanding standards, and –ultimately– the creation of hypercritical individuals, unleashing a cycle of ‘distrust-scepticism-demand-criticism’, as Antoni Gutierrez-Rubi has argued.

Latin America is the most mistrustful region in the world. Eight of every 10 Latin Americans do not trust each other –in stark contrast to the Nordic countries, where 80% of citizens do trust each other–. However, Latin Americans trust their institutions even less. Trust in political parties is at the very bottom of the list: only 15% of Latin Americans trust their country’s political parties. This intense mistrust generates a society of sceptics, with political and institutional consequences. Support for democracy, according to Latinobarómetro, ‘has fallen from 61% in 2010 to 53% in 2017, while one in every four Latin Americans (25%) is indifferent to the form of their political regime’.

This mistrust and scepticism give rise to more demanding societies with respect to the functioning of a system that does not meet their expectations for the deepening of democracy. Latin Americans, especially the middle classes, are now more demanding in general. What was once acceptable at the turn of the century (corruption, inequality, violence etc.) is now no longer tolerated, since the traditional clientelism has become incapable of satisfying social expectations. ‘Dissatisfied democrats’ have emerged in diverse social sectors. These are citizens who support democracy but who are not satisfied with its functioning. Such higher demands lead to a more critical society: 73% believe that democracy is governed for the benefit only of a few powerful groups.

These new middle-class social players make new demands (citizen security, transparency, an efficient state, adequate public services and a solid economic expansion) that have not been channelled by a political class still essentially traditional (party-dominated and clientelist) in cultural and political terms. In such a climate of distrust and dissatisfaction, new players appear and prosper, offering alternatives to the parties and their historic leaderships.

These new actors are now capable of winning elections at the national level, or of influencing their outcome. Some of them are outsiders, emerging from beyond the traditional political system, wielding anti-party styles and discourses. They participate in elections without the support of a strong national party, and they have developed their careers beyond the traditional political channels. Their irruption on the scene modifies the structures of clientelist, territorial and historical power, bringing out business magnates and technocrats (Duque), evangelical pastors (Fabricio Alvarado), athletes and showbusiness personalities (Morales) as candidates.

Examples of the ‘anger vote’ in Latin America

During the current electoral cycle, emerging discontent has made itself felt in the ‘anger vote’. It emerged in 2017 in Chile and Honduras, and in 2018 in Costa Rica, Paraguay, Colombia and Mexico, and it is now rearing its head as a possibility in the upcoming Brazilian elections in October. In Chile, the ‘anger vote’ favoured the rise of the leftist ‘Broad Front’ (Frente Amplio) which captured 20% of the vote in the first round of the presidential elections, taking advantage of discontent with the Concertación government since 1990. Not only did it reject the government of Michelle Bachelet (2014-18) and that of Sebastian Piñera (2010-14), it also aimed its critical attack at the Post-Pinochet transition and the path of reform and continuity taken by Concertación since the dictatorship. Beatriz Sánchez, the ‘Broad Front’ candidate, accuses the Socialists and the Christian Democrats of being very unambitious and overly prudent in dealing with the country’s military legacy.

Where did the Chilean ‘anger vote’ come from? It was represented in previous elections by Marco Enriquez-Ominami (2009) and Franco Parisi (2013), and it grew in parallel with the slow and unequal economic growth rate, the corruption scandals, the deficiencies in public services and the growing disconnection between the party system and the electorate. The disaffection towards the political parties continued to grow, along with discontent over the political system and the public administrations and spread to many layers of society. The former President Ricardo Lagos reflected on this phenomenon in an interview with La Tercera. The long quote below sums up the political and ‘sentimental’ moment that Chile and Chileans are currently experiencing:

‘We are facing a grave institutional... crisis. This is not because the institutions no longer function... But they are losing their legitimacy. And this can be seen in the reaction of the citizens to the institutions of the Presidency, the Parliament, the Judiciary... We are not referring to the political parties. I think this is the worst (crisis) that Chile has ever experienced, at least in my memory. Although I leave aside the collapse of our democracy in 1973, when the country split in half. I am speaking exclusively in terms of legitimacy... What we have here is a crisis of legitimacy linked to a crisis of confidence. The citizens no longer trust the institutions or the political actors. We are all being questioned: all of us, whoever occupies positions of high responsibility. While collusion has dragged down the private sector, it is difficult not to speak of the capture of the state apparatus when the distribution of pensions is arranged in a back-handed way. The Church, which had formed part of the moral reserve of the country, has been severely damaged by its scandals involved the abuse of the minors under its charge. Who can be trusted? Where should we begin to rebuild? You will all certainly realise that to fight collusion, corruption, abuses and the privileged castes, we can no longer use a left-wing or a right-wing agenda. Rather we must respond to the need to convoke a great national encounter among all of us –yes, everyone– to regain mutual trust.’

Such words make clear that since the turn of the century the social, political, economic and even cultural environment in Latin America is increasingly influenced by a citizenry that is increasingly vocal and clear in its message that it does not feel represented in public decisions or policies, and that it feels further and further removed from the government and traditional political leaders. The gap between them and the different elites has only widened to the point of creating two parallel worlds with their backs to each other and with very few points of contact. The frustration with the last government stemmed from a failure to meet very high public expectations in the wake of Bachelet’s electoral victory. With respect to political institutions and the public administration, there has been a loss of confidence and a growing recognition of the very poor implementation of policies, inefficiency and poor management, along with a lack of transparency and corruption.

Although in a different way from Chile, Honduras also experienced a rise in the ‘anger vote’ in 2017. It took the form of a reaction to the decadent bipartisan model. The ‘anger vote’ also criticised the status quo, which from 2013 was incarnated by the predominant National Party, led by President Juan Orlando Hernández (JOH). Discontent was channelled by the ‘Opposition Alliance against the Dictatorship’, an unnatural coalition between the Liberty and Refoundation Party of former President Manuel Zelaya and the Anti-Corruption Party of Salvador Nasralla, which is opposed to the re-election project of JOH. Polarisation (zelayismo versus antizelayismo, and between backers and detractors of Hernández) began to take root in 2009 and then became entrenched between 2013 and 2017. Some of the slogans bandied about in the campaign were very revealing: Zelaya, the coordinator of the Alliance, demanded openly to ‘remove the Devil’ from the presidency. For his part, JOH appealed to the fear vote, warning the electorate that an opposition victory would lead not only to government misrule but also to the end of his social policies. His party published a press release challenging rival candidates Nasralla and Luis Zelaya to stop ‘spreading hate’.

After a vote count lasting for weeks, and overshadowed by suspicions, irregularities, tensions and disturbances, the Electoral Supreme Court declared Hernández the winner by a narrow margin: 42.95% to 41.2%. The process wounded Honduran institutions, given the government’s co-optation of the electoral institutions and Nasralla’s accusations of fraud: ‘It is clear that there was fraud committed before, during and after the elections... The President... is an imposter, and the people... know it’. All of this weakened Honduran society, democracy and its party system.

In 2018 fresh examples of the ‘anger vote’ emerged in Costa Rica, Colombia, Paraguay and Mexico (leaving to one side, for now, Venezuela). The elections of 2018 in Costa Rica (like those in 2014) implied a break from political and electoral history, ending an era that had begun in the 1990s and undermining the bipartisan domination of the National Liberation Party (NLP) and the Social Christian Unity Party (USCP). In 2014, for the first time since 1953, an unrelated party (Citizen’s Action Party, CAP) reached the presidency by defeating the NLP, the pre-eminent political force in the country since the 1950s (but especially since 2006).

The victory of Luis Guillermo Solís (CAP) in 2014 responded to a desire for change and social fatigue with traditional alternatives. Solís was the candidate of an emerging party, established in 2002 out of a division within the NLP. He had the image of a new leader, closer to the citizens and well-prepared (as a university professor). He promised a profound change at a moderate pace (an advantage compared with the radical break proposed by the leftist ‘Broad Front’). Solís was a different kind of candidate and he channelled the vote of discontent by prompting higher expectations.

The elections of 2018 were overshadowed by the issue of corruption. In Costa Rica the phenomenon took on the name of the cementazo and hammered Solís’s party, but also other traditional powers and institutions. Corruption infected the previous administrations (NLP and USCP) as well as the CAP, weakening the party system, the executive and the judicial and legislative powers.

During the last Costa Rican election campaign, the electorate sought a candidate that expressed a rejection of the parties, the institutions and the political class. Juan Diego Castro initially led the polls with his anti-party message. ‘He dreams of direct democracy, without parties or corrupt politicians’, was a phrase that appeared in the personal biography on his website in 2016. By the end of 2017 he led the polls, but then in January he slid out of the contest and the evangelical, Fabricio Alvarado, finally emerged. For Alvarado, ‘politics is not for the Devil. I believe that there are people possessed by the Devil that have entered politics. This I believe and unfortunately we have often voted for such people and we have placed them in the position to govern’. A protestant pastor summed up why Fabricio Alvarado and his ultraconservative message based on traditional values had such success, passing on to the second round to receive nearly 40% of the vote: ‘I believe the Church has awoken; the people are also waking up and telling the traditional politicians that no longer can it be more of the same because we want a change’.

The anger was first channelled by Castro, but then later by Alvarado, as Jorge Vargas Cullel points out:

‘... the available data point to the fact that in our country the majority of the people support democracy as the best system of government and they still believe in the promise that, without an army, the country has the capacity to raise the population’s level of well-being. People are increasingly angry with the system. Analysts inform us that the poor performance of governments and institutions end up, with time, undermining the foundations of democracy... The citizens are tired with the fact that democracies seem to generate increasingly unequal societies. Many believe that the same people always win the lottery while the majority always loses.’

Colombia is another particular case. The elections of 2018 yielded a protest vote aimed at the official sector –in power since 2010 and embodied by Santos–. It came both from the right (Uribe’s supporters) and from the left (Petro and his backers). The two candidates that criticised the government of Juan Manuel Santos –by going too far (Uribe’s block thought that Santos conceded too much to the FARC) and by not going far enough (for Petro, the Santos government had been too timid with structural reforms of a social nature)– passed on to the second round. Both Uribe’s movement, led by Duque, and the left, under Petro, sought the votes rejecting the President’s record and the disenchantment with a system plagued by high levels of corruption and clientelism (including the infamous ‘marmalade’ case in which political support was traded for access to financing). Despite his achievements in the peace process with the FARC, Santos had very high disapproval ratings (nearly 80%).

To vote for Duque or for Petro implied two ways of punishing the official caste and the parties. The Uribe front lined up behind the former President himself, but under the auspices of a party created in 2012 (the Democratic Centre). Petro, a hero in the fight against corruption and the ‘marmalade’, was not the candidate of a party but rather of the Progressive movement. Both represented something new –a renovation of the older and traditional frameworks– although with subtle differences. Petro has been in politics since the 1990s and served both as Bogota’s Mayor and as a Senator; Duque is a young man and a technocrat with a short political career as a legislator. However, Duque’s professional ‘godfather’ is Uribe, the strong man of Colombian politics since 2002.

In all of Latin America, AMLO has been the leader who has most fully expressed the sentiments of this ‘anger vote’. He brings together all of the characteristics of the disaffected electorate. He is a charismatic leader with a long political track record and he is backed by a peripheral party of recent creation with an anti-elite and anti-party discourse. He emerged within a context of disaffection and rejection of the current political classes, and of discontent with the inefficacy of the public policies of inefficient state apparatuses.

AMLO has channelled the anger of voters and established a special relationship with the young, despite his age (62) and the fact that he has been in politics since the 1980s. During the latest campaign he toned down some of his more polemical positions, holding in check his demagogic and populist tendencies. As Agustin Basave has pointed out:

‘... elections usually are won more on sentiments than on ideas. What happened... on the first of July occurred because society feels bad; it is enraged by inequality, insecurity and above all corruption. All of this is incarnated in Enrique Peña Nieto, whose disapproval rating now approaches 80%. And it has been Andrés Manuel López Obrador who has capitalised on practically all of this social indignation.’

Without going into many of the details of his programme, or how to implement it, AMLO centred his discourse on a rejection of the political class (the ‘mafia of power’) and the fight against corruption. His simple and direct proposal was to bring down corrupt politicians, which would allow the resolution of the country’s problems. Like Duque, he was not supported by a traditional party (unlike 2006 and 2012 when he was a candidate of the PRD), but rather by a recently created one, forged in his own image: MORENA. The growing feeling of overall social malaise and citizen fatigue with the traditional parties and elites that has come with the ‘revolution of expectations’ created by AMLO carried him to an overwhelming victory. With more than 50% of the votes, he doubled the vote count of his closest rival.

The ‘anger vote’ has many precedents since the return of democracy to the region: Alberto Fujimori (Peru 1989), Fernando Collor de Melo (Brazil 1989), Abdala Bucaram (Ecuador 1996) and, more recently, Chavez, Evo Morales and Correa (between 1998 and 2005), and then Jimmy Morales (Guatemala 2015). The next example of the ‘anger vote’ could manifest itself in Brazil, where the polls have Bolsonaro leading –excluding Lula da Silva– with around 20% of the intended vote. He is a figure who incorporates certain constant features of the ‘anger vote’: a politician of the system –not an outsider– and parliamentary deputy since 1990, Bolsonaro has never been in power and he aspires to an electoral victory with the support of a small party (the Social Liberal Party) and a Manichean and demagogic discourse that feeds on citizen discontent, particularly among the middle classes, with corruption and the breakdown of security, transport, healthcare and education. His discourse is of the ‘radical right’ (perhaps even extreme right, given his attacks on homosexuals and blacks, and his homophobic and male-chauvinistic messages), and he eschews the pragmatism and ‘shift to the centre’ of AMLO, Petro or even in some respects Fabricio Alvarado. However, Bolsonaro has difficulties in forging alliances with other parties to compensate for his weak regional strength.

Conclusions

On the eve of the current electoral cycle, it was widely believed that Latin America was about to experience a ‘shift to the right’, as a new defining political characteristic of the region. Nevertheless, the various elections that have taken place since then have ruled out the idea, at least in part. From the end of 2017 to the present, the results have been quite varied, with victories for very dissimilar candidates situated all along the ideological spectrum: the extreme left (Maduro), the left (AMLO), the centre-left (Carlos Alvarado), the centre-right (Piñera and Mario Abdo Benitez) and the right (Duque).

In reality, the current electoral moment is marked by many distinguishing features in each country, as well as by other characteristics which are common across the region, but the ‘shift to the right’ is not one of them. Latin America is now revealing a series of other traits: for instance, high levels of diversity across the electoral processes, a growing fragmentation of the party system, the persistence of populist and demagogic options, the decline of the traditional left-right cleavage and a trend towards political polarisation.

The common elements that cut across the entire region include the use of elections by the citizens to punish the traditional parties and political classes for the poor functioning of democratic institutions. It is a ‘vote of anger’ against the system –as opposed to an ‘anti-system’ vote– which is cast more ‘against something’ than in ‘favour of someone’. These voters approach the polls with irritation, fatigue and discontent to metaphorically pound their fists on the table and perhaps bring traditional hegemonies to an end. What has intrinsic value for the Latin America voter is that the election might give rise to a change, irrespective of its quality or characteristics.

The ‘anger vote’ is explained by multiple causes but, above all, it is rooted in the profound social change experienced by Latin America since the turn of the century (especially the consolidation and expansion of the heterogeneous middle classes). This has also been accompanied by a cultural change linked to the technological revolution, newly emerging forms of communication and the expansion of social networks. It is in this change that the seed of disaffection giving rise to the ‘anger vote’ can be found.

The ‘anger vote’ prospers in the current socio-cultural context in which the middle-class citizenry is trapped in a vicious cycle by the reigning mistrust of institutions and the spreading mistrust between individuals. Mistrust leads to scepticism, to increasingly demanding standards and finally to hypercriticism, which simply reignites the cycle of ‘mistrust-scepticism-excessive demands-criticism’.

Mistrust, scepticism, high demands and harsh criticism feed the ‘anger vote’. This translates into high levels of citizen disaffection with the political class, the workings of the public administrations and existing democratic institutions. At present, such disaffection is spreading and deepening. In contrast with the past, this sentiment has not resorted to abstention or apolitical behaviour; rather it has begun to shape an electorate in search of a leader to channel its discontent. The malaise has grown, fed by a political and socioeconomic context influenced by economic slowdown, a consolidating and increasingly empowered middle class, the high visibility of corruption scandals and the eroding capacity of states to maintain minimum standards of decently functioning public services.

The ‘anger vote’ has been reactivated by growing citizen malaise and fatigue. The electoral phenomenon will persist as long as economic growth remains weak and expectations for social improvement are unmet. It has fixated on leaders (more than parties or movements) with broad track records within the traditional political system. But while they are not outsiders, neither are they politicians with previous experience in high positions of responsibility at the national level. They attract discontented sectors with demagogic messages from different ideological angles, generating demanding expectations that will be difficult to meet, given party fragmentation, scant fiscal resources and a lack of experience or even sufficient political support.

In circumstances like Mexico’s today, the electorate has chosen to be guided by its anger at the status quo rather than by its fear of the abyss that could open up as the result of pursuing a change that is still shot through with uncertainty. In the words of Luis Rubio, ‘the anger at the status quo –in reaction to the growing evidence of corruption, a closed system of government and a complete disconnect between the citizens and their governors– has won’.

Carlos Malamud
Investigador principal, Real Instituto Elcano
 | @CarlosMalamud

Rogelio Núñez
Profesor colaborador del IELAT, Universidad de Alcalá de Henares

]]>
<![CDATA[ A Brazilian perspective on the challenges facing the EU and Latin American cooperation agenda ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari72-2018-milani-brazilian-perspective-challenges-eu-latin-america-cooperation-agenda 2018-06-11T01:03:07Z

The construction of a cooperation agenda between the EU and South America must take into account the challenges Latin American countries need to overcome to correct their democratic deficits and the negative social and political effects of their economic development models.

]]>
Theme

This paper contends that the construction of a cooperation agenda between the EU and South America must consider a set of exogenous and endogenous variables that encompass geopolitics, security concerns, global governance structures and mechanisms. However, it must also take into account the domestic challenges Latin American countries need to overcome to correct their democratic deficits and the negative social and political effects of their own economic development models.

Summary

During the first years of the 21st century progressive Latin American governments defended regional integration and promoted more autonomous foreign policies. Internally, they implemented social inclusion and poverty-reduction policies. Externally, the narrative of regional integration added a clear emphasis on South-South relations and the broadening of global and interregional political coalitions and partnerships. However, at the end of the second decade, the ‘pink’ tide seems to have reached its limits, and new avenues for regionalism, inter-regionalism and cooperation with the EU may be opening up – not without political controversy and trade-agricultural issues at stake. This paper presents a two-fold argument: the construction of a cooperation agenda between the EU and South America must consider a set of exogenous variables (geopolitics, security and global governance); however, it must also consider domestic politics and the political economy of regional integration in Latin American countries.

Analysis

Introduction

The first years of the 21st century witnessed a turnaround in Latin American regional politics. In several important countries, especially Argentina, Bolivia, Brazil, Ecuador, Paraguay, Venezuela and Uruguay, progressive governments took on the political banner of regional integration and promoted more autonomous international strategies vis-à-vis the US and the Western countries. Internally, although with variations, these governments fostered social inclusion and recognition policies that achieved results that have been recognised world-wide in the fight against poverty, inequality and discrimination. At the external level, the narrative of regional integration has added a clear emphasis on South-South relations and the broadening of global and interregional political coalitions and economic partnerships, including the IBSA Forum (India, Brazil and South Africa), the BRICS grouping and its enlarged summits (with African countries in Durban in 2013 and South-American nations in Fortaleza in 2014), South American-African (ASA) and South American-Arab nations (ASPA) summit meetings, the Bolivarian Alliance for the Peoples of Our America, amongst others.

At the outset of the second decade, however, a series of political events contributed to mitigate the importance of democratic progress and the achievements of social policies in the region. The summary dismissal of Fernando Lugo in June 2012, through a political trial conducted and voted by the Paraguayan Congress in less than 48 hours, revived debates about the processes of institutionalising democracy in Latin America, but also about the role that regional organisations (such as MERCOSUR and UNASUR) might play in guaranteeing democratic order without the interference of external powers. On the one hand, some analysts have pointed out that the entire process was approved by a large majority of deputies and senators, as the Paraguayan Constitution foresees, and therefore that it was an orderly, peaceful and respectful trial in terms of legality and existing political institutions. On the other hand, many have denounced a new version of a white coup with the support of the conservative mass media, the parliament and sectors within the judiciary. The Paraguayan case could be included in a series of coup attempts in South America (such as Jamil Mahuad’s in Ecuador in 2000, Hugo Chávez’ in 2002 and Rafael Correa’s in Ecuador in 2010), the Caribbean (Jean-Bertrand Aristide’s in Haiti in 2004) and Central America (Manuel Zelaya’s in Honduras in 2009). The latest case was Brazil’s 2016 controversial impeachment of President Rousseff. In an article published in the Argentine newspaper La Nación on 24 June 2012, Juan Gabriel Tokatlián called the phenomenon neogolpismo: formally less virulent coups, led by civilians with support or the complicity of the military and preserving a certain institutional appearance (Milani, 2012 & 2017).

Given the context, this paper argues that the construction of a cooperation agenda between the EU and South America must consider not only a set of exogenous and endogenous variables that encompass geopolitics, security concerns, and global governance structures and mechanisms, but also the domestic challenges in Latin America countries that would be necessary to overcome both democratic deficits and the negative social and political effects of their own economic development models. The following two sections focus on each of these dimensions.

Systemic and regional dimensions: the heterogeneity of regional integration processes

The heterogeneity of regional integration and cooperation processes in Latin America since the 1990s is a challenge to the future cooperation agendas between the region and the EU within a new international order currently rooted in economic nationalism and political populism in different geographical contexts. In the dominant narratives in Latin America in the post-Second World War, regional integration was represented as a strategy to cope with the economic and political dominance of the US across the Americas. Regional integration aimed to create alternative scenarios for international relations within the region, thus reducing its excessive dependence on Washington, but also to increase the region’s bargaining power (or the bargaining power of particular countries) in negotiations with the US. Although such an expectation was not homogeneous, regional integration was part of ECLAC’s set of economic policy prescriptions in the 1940s and 1950s. Along with the need to change the development model from exporting raw materials and agricultural commodities towards an industrial economy, ECLAC championed the adoption of the import substitution strategy and advocated regional integration policies.

Over a long period of its history, Brazil was not very enthusiastic about regional integration. Its economic model (based on exports to Europe and the US) and the language factor (being the region’s only Portuguese-speaking country) contributed to its lack of enthusiasm. It all began to change as a Latin American school of thought based on the theory of dependency, and on a new understanding of centre-periphery relations, grew in intellectual and political importance. There was an intense exchange of ideas between Brazilian scholars and their peers in the region and in other countries, and together they created a rich and truly original theoretical framework built from the developing world’s point of view. Grounded in an analysis of the ‘deterioration in the terms of trade’ phenomenon, they argued that countries exporting industrialised goods add more value to their trade than those selling primary products. Furthermore, the difference tends to deepen over time, leading the proponents of this approach to denounce the failures of traditional economic thought, which focuses on the comparative advantages of nations.

Paradoxically, ECLAC and the dependencia theory did not take into account that the import substitution model would discourage the export efforts of Latin American countries and the creation of a common Latin American economic space given the strong inducement to national industrial and commercial protection. This paradox can be considered one of the factors responsible for the relative failure of the various attempts to implement regional integration projects in the 1960s and 1970s. Another restriction stemmed from the relative structural asymmetry between Latin American countries, on the one hand, and the regional economic giants (Argentina, Brazil and Mexico), on the other. Political differences between them might also have weighed on this unwillingness to engage in regional cooperation: democratic transitions boosted interstate cooperation on both economic and non-economic issues (Lima & Milani, 2016).

This suggests three elements to be considered in order to understand the relationships between the development model, the political regime and regional integration processes, and also why these relationships matter for a future cooperation agenda between the EU and South America. The first is the effect of the political and economic contexts on the relationships between the variables. Argentina and Brazil experienced long periods of authoritarian rule, but this political coincidence did not generate cooperation between them. On the contrary, as the bilateral conflict over Itaipu in the 1970s shows, both military regimes extended their historical rivalry for the control of the River Plate area (Lima, 1990). It was only with the return to democracy in the 1980s that it was possible to overcome these historical divergences and initiate a process of cooperation between the two countries that would later lead to the creation of MERCOSUR in 1991. The second aspect to be considered is Washington’s role: during the Cold War, US action was a crucial parameter in determining the degree of freedom of Latin American countries in implementing their models of development and regional cooperation. Third, there are path-dependency effects of integration processes that imply costs embedded in any potential future changes by political decision: at the end of the Cold War, Mexico’s option for NAFTA and Brazil’s for MERCOSUR conditioned any subsequent moves by both countries in their respective choices of regional models and international trade integration.

In general, Latin America’s regional integration initiatives have been neither linear nor convergent with US-proposed regional cooperation initiatives. To understand this, it is necessary to distinguish conceptually the integration processes from those of regional cooperation. In the post-Second World War, the regional integration model that oriented Latin American countries was the European project, aiming at eliminating restrictions on the free exchange of goods, services, capital and people and, in its last stage, reaching the delegation of sovereignty to some new forms of political authority. Latin American countries wanted to emulate the European project of an integrated economic space and a regional coordination of public policies. Regional cooperation, on the other hand, involves cooperation processes in different areas (military, political, economic, energy and technical), thus reflecting foreign policy and geostrategic priorities. Regionalism, unlike integration processes, has much less ambitious objectives and as it is a predominantly intergovernmental dynamic involves varying degrees of coordination of government policies and virtually no delegation of sovereignty, except for the specific coordination of the issues being negotiated.

Figure 1. Integration projects in the Americas: disputes and resistances

With the end of the Cold War, the processes of integration and regionalisation converged under the leadership of the US and neoliberal governments in Latin America. The first step was taken by the US in agreeing to a Free Trade Agreement (FTA) with Canada, changing its previous strategy of stressing multilateral liberalisation alone, followed by its expansion with the creation of NAFTA, including Mexico. This regionalism, under US leadership, will be guided by the logic of economic openness and trade liberalisation. The regional cooperation model was profoundly revised once the neoliberal consensus in politics and economics began to break up in the early 2000s with the election of left-wing and centre-left governments in Argentina, Brazil, Uruguay, Bolivia, Ecuador and Venezuela. South America thus saw a significant change in its political and ideological orientation, which were also diverse in relation to each other but with similar orientations regarding the overthrow of neoliberal dogma, the return of state economic coordination and an adjusted developmental vision of the constraints of globalised capitalism, the priority accorded to the need for social inclusion and a revisionist foreign policy, but also with variations between countries with a progressive orientation. Figure 1 illustrates the complexity and heterogeneity of regional integration and cooperation in Latin America, the Caribbean, and North and South America.

In Brazil, a properly South-American outlook is a recent phenomenon that began in the 1980s; it was further pursued in the 1990s and more decisively bolstered during the Lula government (2003-10). South America came to be seen as an area with greater legitimacy for a regional leadership project. In addition, it was felt that Latin America had lost its legitimacy as a region, after Mexico’s decision to join NAFTA in 1994. In this context, Brazilian diplomacy worked to retrieve the concept of South America during Ambassador Celso Amorim’s first term as Chancellor (under President Itamar Franco), initially by proposing a free-trade area in the region. This diplomatic priority was weakened during the Cardoso government, despite organising the first ever meetings of South American heads of state in 2000 and 2002.

The political focus on South America coincided with a reactive US withdrawal from the region due to its new strategic priorities after 9/11 (the Middle East and Central Asia) and the geopolitical and geo-economic stress on the Asia-Pacific region, due either to the shift of the dynamic axis of capitalism in that direction or as a strategy to contain China’s global emergence. The new regional and global context is much less restrictive than that of the 1990s and the countries of South America will enjoy a greater degree of freedom to deepen or even promote significant changes in their respective models of development and international economic insertion. In the 2000s the homogenising scenarios of the previous decade in economic policy and state vision were revised and the narrative that came to be imposed was the de-concentration of global power and the transfer of the dynamic axis from West to East. It moved from a narrative marked by unipolarity and the victory of liberal democracy and markets to the vision of economic multipolarity and the plurality of modes of organising relations between the State and the market. This description, however, is prey to much simplification, reflecting the underlying ideological component. It is important to highlight a differentiating element with respect to the 1990s: the diversity and heterogeneity of national experiences in the fields of politics and economics. Although capitalism and democracy are the dominant processes, the variations of their different modalities in the political and economic sphere are considerable. South America is one of the regions that exemplifies this diversity even today, despite the crises that mainly penalised the models in Argentina, Brazil and Venezuela (Milani et al., 2016).

The new political configuration is expressed in the non-convergence between the various processes of economic integration and trade regimes, such as: NAFTA, encompassing North America and Mexico; the Pacific Alliance with the participation of Mexico, Chile, Colombia and Peru; MERCOSUR, including Argentina, Brazil, Paraguay, Uruguay and Venezuela; Chile, Colombia and Peru with a clear preference for Free Trade Agreements (FTAs) with the US and countries outside the region; and ALBA, under the leadership of Venezuela, Central American countries and Cuba. Another dimension that distinguishes this moment from the first years of the 21st century is the emergence of sub-regional initiatives involving various areas of cooperation. In a certain sense, the diversity and heterogeneity of trade regimes, which derive from the differentiation between Latin American countries in terms of their productive patterns, models of democracy and foreign policy options, seem to stimulate subregional cooperation initiatives. This is the moment when the dynamics of integration models are removed from the processes of regionalisation, which emphasise the subregional dimension.

In this new configuration, the main regionalisation initiative was the creation of UNASUR in 2008, incorporating all 12 countries of South America and that arose not as an alternative to existing trade regimes but as a way of going beyond mere trade integration, allowing other forms of regional cooperation and, more importantly, overcoming the constraints generated by the existence of their respective trade regimes in the region. The institutional design of UNASUR allowed the creation of councils whose purpose is to assist and propose public policies for the bloc from their respective areas. The Council of Defence of South America and the Health Council were followed by the Councils against Drug Trafficking, Infrastructure and Planning, Social Development, Education, Culture, Science, Technology and Innovation. In addition to establishing an institutional framework for expanding cooperation in a reasonable number of regional public policies, the councils have led to the creation of domestic constituencies in the respective participating countries involving political and economic actors that are also diverse, thus creating within their respective civil societies actors committed to regionalisation in multiple facets. Among them is the South American Council on Infrastructure and Planning (COSIPLAN), created to replace the Initiative for the Integration of Regional Infrastructure in South America (IIRSA), proposed by the Cardoso government in 2000 (Lima & Milani, 2016).

Domestic challenges in Latin American countries

The creation of UNASUR in 2008, changes in MERCOSUR with a greater emphasis on democracy-building and human rights, the creation of civil society participation mechanisms and an unprecedented concern with structural asymmetry and the establishment of structural funds under FOCEM, the constitution of ALBA under Venezuela’s leadership and the 2010 foundation of the Community of Latin American and Caribbean nations (CELAC), among other factors, have led to a model of regionalism rooted in the primacy of the political agenda, the role of the State in economic coordination and a deeper concern with social inclusion policies. In some cases, such as Venezuela, Bolivia and Ecuador (under Rafael Correa), a markedly anti-liberal dimension has been added to their respective constitutional frameworks, and their foreign policies deny the dynamics of open regionalism advocated by the US.

The creation of the Pacific Alliance, with the addition of Mexico, Chile, Colombia and Peru, added further diversity to the regional space. In line with the Free Trade Agreements and formalising the ties that these countries already had with the US on the open regionalism model, the Alliance has a clear geopolitical dimension. In terms of political-ideological debate, it has become common currency to present the idea of competition between two different models of regionalisation, which helps to understand the priority given by Brazil to Venezuela’s admission to Mercosur. Naturally, the Pacific Alliance constitution gives a greater weight to the group of countries that focus on market solutions, trade liberalisation and integration into global production chains, with foreign policies that converge to a greater extent with the US and are favourable to the status quo of global governance.

It is too early to assess whether we are actually facing two alternative models of regionalism since the most pessimistic predictions regarding the consequences of China’s slow-down and falling commodity prices in South America, as well as regarding political scenarios in the region, in particular with the increase in political uncertainty after Hugo Chávez’s death and the current crisis in Venezuela, but also in Brazil. Some countries may have incentives to adhere to new transcontinental initiatives, trade liberalisation and investment arrangements. In any case, we seem to be at the start of a new process of integration and regionalisation in the region due to the changes in the South American political scene with the deep crisis in Venezuela, the political and economic crisis in Brazil that has practically paralysed regional policy initiatives and the results of the presidential elections in Argentina following Macri’s victory. In Latin America as a whole it is worrying to recall that national levels of support for democracy are at around 54% (Malamud, 2017, p. 30).

Will domestic changes influence the foreign policies and regional integration of Latin American countries? Will countries such as Brazil (as the main economy in Mercosur) and Mexico (in the Pacific Alliance) converge in their regional trajectories and foreign policy agendas? At a recent ministerial meeting in Buenos Aires in April 2018, Ministers from Mercosur and the Pacific Alliance signed a declaration that called for trade facilitation measures, the simplification and convergence of customs rules, the harmonisation of rules of origin and support for small and medium-sized businesses. Such a political move would have been unthinkable when the Workers’ Party led the governmental coalition in Brazil. That is, governments do matter in foreign-policy making, and in Latin American liberal democracies with strong presidential systems elections can also prompt significant changes. In 2018 both countries have presidential elections, Mexico in July and Brazil in October.

Aside from electoral results, it is also important to take into account structural and systemic variables, such as the political economy of the two regional integration models and the economic convergence indicators within and across the two blocs. As Ricardo Carneiro recalls, despite the expansion of trade agreements in the 1990s and during the first decade of the 21st century, Latin American regional integration remained stable compared to other regions. On average, less than 20% of the exports from Latin American and Caribbean countries have a regional destination. The figures are smaller in the case of Mercosur (15%) and derisory as regards the Pacific Alliance (4%). The result is mainly due to the characteristics of the productive structures of both North and South America. In the former case, industrial activity is concentrated in assembly (maquilas) and favours linkages with supply centres and consumer markets (mainly the US). In the latter case, the relatively lower weight of industry in relation to commodity production encourages outward linkages, in particular with China, to the detriment of intraregional trade flows, whose growth would depend to a large extent on the deepening of value chains (Carneiro, 2007). In general, South America as a whole depends on commodity exports to finance intra-regional imports, while Brazil is the only country that has recently increased its intra-regional exports of manufactured goods (Bastos, 2012). Considering these trends in political economy, what impact will changes in government have on regional integration models and their respective relations with the EU in the near future?

Conclusions

In June 2015 the latest EU-CELAC Summit was held in Brussels and an Action Plan was defined in 10 priority areas for bi-regional cooperation: (1) science, research, innovation and technology; (2) sustainable development and the environment, climate change, biodiversity and energy; (3) regional integration and interconnectivity to promote social integration and cohesion; (4) migration; (5) education and employment to promote social integration and cohesion; (6) the world drug problem; (7) gender issues; (8) investment and entrepreneurship with a view to sustainable development; (9) higher education; and (10) citizen security. It was expected that the next EU-CELAC Summit would be held in El Salvador in October 2017, which was presented as a great opportunity to take an important step forward in the consolidation of Euro-Latin-American relations. However, at Latin America’s request, due to the Venezuelan crisis, the Summit was postponed (Malamud, 2017, p. 77).

European regionalism differs greatly in its institutional form from other experiences in North America, Latin American, Africa, and Asia. Values related to liberal democracy define the EU’s membership rules and governance in the EU is driven by functional needs, thus having a large bureaucratic component. EU governance occurs at subnational, national and European levels, and its processes lead neither to unification through the creation of a European supranational political community nor to its fragmentation into national or subnational politics. It is true that the European polity suffers from persistent decisional inefficiencies from such an in-between status; despite that, it has been mirrored as a political model by many Latin American leaders, placing development in the region between an open economic perspective and demands for employment and inclusive social policies (Katzenstein, 2005; Santander, 2013).

As Sujatha Fernandes (2008) affirms, it is not clear if the EU is still an inspiration for Latin American leaders but neither is it clear if the US under Trump will exercise any influence in the region. Sebastian Santander (2013) reminds us that the EU is now seeking to bind ‘rising’ powers through ‘strategic’ partnerships. Yet it has long favoured relations with regional blocs rather than individual relations with countries, as in its relations with Latin America. The EU has especially focused on its relations with Mercosur, but it has recently established a direct and regular channel with Brazil through the so-called ‘strategic’ partnership. What are the reasons for this new kind of partnership? What interests are at stake? It would seem that the EU’s strategic partnership with Brazil is not only aimed at capturing new markets for European business but also at increasing the EU’s visibility and recognition as an international actor and demonstrating its ability to play in a state-centric world. However, in doing so, is the EU reversing its strategic logic? Is it moving from a strategy based on the idea of being a normative actor that promotes international regionalism and interregional relations to a Realpolitik approach that enhances the power of ‘rising’ states? In other words, what will the EU give priority to: the region (Latin America), the regional integration actor (MERCOSUR) or the country (Brazil)?

Carlos R.S. Milani
Associate Professor at the Rio de Janeiro State University’s Institute for Social and Political Studies (IESP-UERJ) and Research Fellow at the Brazilian National Science Council (CNPq)*

References

Bastos, Pedro P.Z. (2012), ‘The political economy of South American integration after the world economic crisis’, in Stefan Bojnec, Josef C. Brada & Masaaki Kuboniwa (Eds.), Overcoming the Crisis: Economic and Financial Developments in Asia and Europe, University of Primorska Press, Koper, p. 283-332.

Carneiro, Ricardo (2007), ‘Globalização e integração periférica’, Texto para Discussão, nr 126, Instituto de Economia, UNICAMP.

Fernandes, Sujatha (2008), ‘Latin America looks towards European Union’, Economic and Political Weekly, vol. 43, nr 32, 9/VIII/2008, p. 12-13.

Katzenstein, Peter J. (2005), A World of Regions, Asia and Europe in the American Imperium, Cornell University Press, Ithaca, NY.

Lima, Maria Regina Soares de (1990), ‘A Economia Política da Política Externa Brasileira: Uma Proposta de Análise’ Contexto Internacional, vol. 6, nr 12, p. 7-28.

Lima, Maria Regina Soares de & Carlos R. S. Milani (2016), ‘Política externa, geopolítica e modelos de desenvolvimento’, in Maria Regina Soares de Lima, Carlos R.S. Milani & Enara Echart Muñoz (Eds.), Cooperación Sur-Sur, política exterior y modelos de desarrollo en América Latina, CLACSO, Buenos Aires, p. 21-40.

Malamud, Carlos (2017), ‘¿Por qué importa América Latina?’, Informe Elcano, nr 22, Elcano Royal Institute, December.

Milani, Carlos R.S. (2012), ‘Crise política no Paraguai: um teste para a região?’ Carta Capital, 6/VI/2012.

Milani, Carlos R.S. (2017), ‘Brazil, democracy at stake’Berkeley Review of Latin American Studies, University of California at Berkeley, Spring, p. 52-59.

Milani, Carlos R.S., Enara Echart Muñoz, Rubens de S. Duarte & Magno Klein (2016), Atlas of Brazilian Foreign Policy, CLACSO/EdUerj, Buenos Aires & Rio de Janeiro.

Sebastian Santander (2013), ‘L’Union européenne, l’interrégionalisme et les puissances émergentes. Le cas du partenariat euro-brésilien’, Politique européenne, vol. 1, nr 39, p. 106-135.


* Between January and December 2017, the author was Visiting Researcher at the University of California, Berkeley. His research agenda includes Brazilian foreign policy, comparative foreign policy and development cooperation policies and politics. His latest books are Brazilian Cooperation Agency: 30 years of History and Futures Challenges (2017), Atlas of Brazilian Defense Policy (2017) and Atlas of Brazilian Foreign Policy (2016).

]]>
<![CDATA[ Costa Rica: big election surprises, increased polarisation and eroding governability? ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari57-2018-weisleder-costa-rica-big-election-surprises-increased-polarisation-eroding-governability 2018-04-23T06:33:46Z

The parliamentary elections in Costa Rica, together with the first round of the presidential elections, have opened up a new scenario with some political novelties.

]]>
Original version in Spanish: Costa Rica: grandes sorpresas electorales, mayor polarización, ¿menor gobernabilidad?

Theme

The parliamentary elections in Costa Rica, together with the first round of the presidential elections, have opened up a new scenario with some political novelties.

Summary

This analysis focuses on the principal results, circumstances and implications of the presidential elections in Costa Rica on 4 February 2018, in which no candidate received the minimum of 40% of the valid votes required to be declared the winner. Therefore, the second round comes at a time (1 April) when the political scene is characterised by some novelties and many challenges (particularly fiscal) for the new government. The results of the parliamentary elections also pose some equally important challenges. Costa Rican democracy remains solid, but it faces some profound dilemmas.

Analysis

The elections on 4 February 2018 in Costa Rica inaugurated a cycle of six presidential elections in Latin America this year. Normally, they would not hold such importance or interest, but the irruption of a Pentecostal party, which won the first round, and the relegation of the two most traditional parties to third and fourth place respectively, lends them an unexpected significance meriting special attention. Furthermore, because of the circumstances in which this has occurred, marked in particular by a recent decision by the Inter-American Court of Human Rights (with its headquarters in Costa Rica) concerning family and marriage.

The elections

The first round of the elections for President, two Vice-Presidents and 57 Legislative Assembly (Congress) deputies was held on 4 February 2018. None of the parties obtained the minimum 40% of the valid votes cast. The results could not have been more surprising. A second round had already been projected for months as inevitable, according to the polls, only with different candidates.

Among the most significant of the surprises are the following two: (1) the party receiving the most votes is a religious party embodying a Pentecostal branch of Protestantism (the National Restoration Party, NRP), with Fabricio Alvarado as its candidate; (2) in second place was the CAP (the Citizen’s Action Party), currently in power and holding very low (even negative) favourability ratings (measured by approval-disapproval of the presidential figure), with Carlos Alvarado as candidate.

The two parties that governed between 1953 and 2014 came in third and fourth place, respectively. The first of these, the National Liberation Party (NLP), maintained the same name and party flag for nine terms (37 years, although not continuous). The second of the two, the Social Christian Union Party (SCUD), had various names, compositions and flags over this time, although it maintained its basic core, and governed for six mandates (a total of 24 years, also discontinuously). In addition, Juan Diego Castro –a criminal lawyer with little previous political experience and incendiary rhetoric– ran as the candidate for the National Integration Party (NIP). He was projected by the polls to be a probable winner, but he received far less share of the vote than expected.

Elecciones Nacionales 2018

The following have been some of the key dynamics of the first round of these elections:

  1. The NRP received most of its support from among voters of lower socioeconomic levels, given the geographic areas that it won. The CAP reconfirmed its status as the strong party of the urban zones and medium-level socioeconomic levels.
  2. The election confirmed the decline of country’s traditional biparty system (dominated by the NLP and SCUD, of social-democratic and neoliberal social-christian tendencies, respectively), but not its death or disappearance, given the results of the legislative election.
  3. The Libertarian Party (of ‘extreme’ liberal tendency) and its leader, Otto Guevara, were overtaken by new political options and failed to elect even a single deputy. The party will likely disappear, and its space will likely be occupied by the new ‘Progressive Liberal Party,’ with a similar platform, but with more pragmatic leaders. This party did not have a notable political debut, however, mainly due to internal issues which affected their campaign launch.
  4. Ideological and even policy issues are losing importance as electorally-defining drivers, as are the familiar traditional political affiliations to which voters have gravitated in national elections since the Revolution of 1948, the origin of what is typically called the ‘Second Republic’. Although it is still too early to assume it might be permanent, the profile of the candidates themselves seems to be gaining importance in the definition of voter intention, although policy continues to count. Ideological positions are increasingly losing out to more pragmatic approaches to daily problems, and to ‘values’.
  5. The election was influenced by ‘events’ (unforeseeable phenomena, or those which take on larger dimensions than anticipated) which emerged during the campaign. One was the so-called cementazo (a presumed fraud and corruption scandal that dominated the campaign for several weeks). The other, even more significant, was the response of the Inter-American Court of Human Rights to a consultation presented by the Second Vice-President of the Republic on the rights of persons with non-traditional sexual preferences or from LGBTI groups. The consultation was answered three weeks before the elections. The issue shook up Costa Rican society, taking on enormous relevance and polarising politics and the electorate even more. This significantly affected the first round and will influence the second.
  6. The majority of the polls and tracking surveys reveal that until mid-December the NLP candidate, Antonio Alvarez, remained in first place, with more than 40% of the intended vote needed to win in the first round. Juan Diego Castro of the NIP was in second place. At the beginning of the so-called ‘year-end campaign truce’, Castro was pushed out of second place while Alvarez maintained the lead, although below the 40% threshold. After the decision of the ICHR, Fabricio Alvarado of the NRP experienced a rapid rise in intended vote; but a few days later, Carlos Alvarado of the CAP rose even more rapidly. They ended in first and second place, respectively.
  7. To points (d) and (f) should be added an important observation: the projections based on the polls and surveys assumed high levels of abstentionism (around 40%). In the end, it was less than 35%. To know how important projected abstentionists and ‘undecided’ voters were in provoking such a notable and accelerated shift during the campaign’s final three weeks, would require more granular data and analysis from specialised studies. One such study, undertaken by the ‘State of the Nation Programme’, is an independent effort promoted by the public universities and other public entities. This work concentrates on a horizontal tracking of a group of voters over several months.

The legislative elections and the new parliament

The system for electing and assigning parliamentary seats is a proportional one, based on the provincial lists of the parties and favouring minority parties (those that cannot elect at least one deputy through a strictly proportional share of the vote). Rather, a seat is awarded to those who only obtained a sub-coefficient (half of a coefficient) of that needed for a seat, before it is given to a party that has already been awarded a proportional seat, even if the remainder of its votes is larger than the other’s sub-coefficient.

The results were: NLP 17 deputies (one less than currently); NRP 14 deputies (up 13); CAP 10 deputies (down two); SCUP nine deputies (up one); NIP four deputies (with representation, once again, after eight years without any); the Republic Social Christian Party (RSCP) two deputies (the party’s first representation in the Legislative Assembly); and the Broad Front Party (BFP) one deputy (down eight).

No group achieved a majority (29) of deputies. The first minority is NLP, holding a plurality. Judging from the results of the parliamentary vote, the traditional bi-party system has not died, but it has been weakened by the appearance of new political forces whose permanence (or sustainability) on the landscape will be determined over the next four years, or perhaps only after the 2022 elections.

The basic rules that guide decision-making in the Congress are:

  1. To achieve minimum quorum for a legal, plenary session of the Assembly, 38 votes are required. The same number of votes are needed to change the daily agenda, in turn essential for giving sufficient priority to a specific bill so that it is debated and voted on. In contrast with other Congresses, the legal quorum is obligatory during the entire session, not only at the beginning or at voting time. It is a weapon of the opposition (or, on exceptional occasions, of the governing party) to block the passage of certain bills, to wield pressure in negotiations, and to wield both ‘political’ and ‘agenda control’. It is a mechanism similar to the US Senate’s ‘filibuster’.
  2. An absolute majority is constituted by a minimum of 29 votes and is required to pass the majority of legislative bills and motions to modify with a complete quorum (57) or when regulation otherwise mandates full quorum.
  3. A relative majority is the condition for passage when the quorum is not complete but sufficient, or when the Regulations do not otherwise require full quorum (and those with at least one vote more win).

Given these rules, to achieve a minimum consensus to pass most legislative bills will require the agreement of a minimum of two partisan factions (relative and absolute majorities, according to the case). To achieve qualified majority (two-thirds of the complete quorum, equivalent to 38 deputies), the parliament will need to group together at least three factions.

All the above demonstrates how difficult has become the exercise of government, particularly with regard to everything that requires legislative approval: central government budgets, passage of new laws (or repeal of current ones), and important appointments, like magistrates for the judicial branch, the Controllers of the Republic, the Defender of Residents, etc. Furthermore, the daily management of the Ministries and the ‘Autonomous Institutions of State’ have also become increasingly difficult (including at state companies like banks, the oil refiner, RECOPE, and the Costa Rican Institute of Electricity). All of this reveals the operational complications of the state, an essential actor in the daily lives of Costa Rican citizens, and more so than in most other Western democracies.

The surprising results of the first round –especially in the legislative election– present the strange possibility of improving the operability of the Legislative Assembly. Of course, this would imply the formation of complex alliances (temporary, case by case, or permanent?) between three or more parties (for example, the NLP, NRP and SCUP). With the information currently available and given what the polls apparently indicate for the second round (which are congruent with the results of the first round and should be reasonably reliable), this alliance (NLP-NRP-SCUP) could amass 40 deputies, more than the two-thirds (38) required for a qualified majority. It could therefore elect the Legislative Directory, change the daily agenda for debate and pass legislation according to their interests.

Such a possibility is still only theoretical, but already things are moving in that direction. It would assume a significant sense of pragmatism from all parties involved, especially by the NRP, if it wins the second round. Certainly, the NRP should make compromises, especially on family issues, in exchange for coalition support on urgent projects (like the fiscal and tax reforms). There exists sufficient margin for such compromise. But this requires operational and conciliatory skills, something that this until recently marginal and highly ideological (religious) party will need to learn, in addition to all the other skills required to govern the country responsibly.

At the same time, these three political forces will each make their own calculations as to the implications of such an ‘alliance’ for their respective political futures, and for the conditions they should continue to negotiate for maintaining, limiting or dissolving such an alliance. The other parties represented in parliament will also play their cards. A ‘parliamentary alliance’ of the CAP with the aspiration of forming a government –given the first-round results, recent experience, as well as the origin and composition of the party– appears more difficult for now.

The SCUP and NIP have well-advanced negotiations underway with the NRP, although no agreements have yet been finalized. The CAP emerged into political life by pushing aside the NLP (and also the SCUP to some degree). This has been manifested by the electoral processes in which the CAP has participated since 2002. Since then, five elections have been hotly contested between two parties that are both considered to be social-democratic. The recent campaign intensifies this antagonism still further. Although both parties share values and even political platforms, there are strands in each of them that impede collaboration in parliament or government. This makes such an alliance very difficult today, although for some sectors supporting these parties it will be the most desirable. Nevertheless, the CAP will find it very difficult to accept an alliance (even a temporary one) to facilitate governability. But many things could still happen in the second round.

The rules and results of the presidential election

Rules

  1. In the first round, the winning presidential formula is to obtain a relative majority of the valid votes (ie, not counting nullified votes), as long as it represents at least 40% of vote. Blank votes are considered valid and count for calculating this 40% threshold.
  2. If no party receives this minimum, the two most voted parties will proceed to the second round. This is what occurred on 4 February. As a result, Fabricio Alvarado of the NRP, along with his two vice presidential candidates, will compete in the second round against Carlos Alvarado of the CAP and his two running mates.
  3. The presidential tickets should include at least one representative of each of the two genders (in any position or order on the ticket).

Results

  1. In the first round, the NRP received around 25% (505,000) of the valid votes cast; the CAP received nearly 22% (440,000), for a difference of 66,000 votes.
  2. The NLP obtained 377,000 votes (19%) and the SCUP 325,000 (16%). For the NLP, it was the lowest vote ever received in its history. The NIP received 10%. The rest of the parties received smaller or even infinitesimal shares.
  3. The NRP won 37 of the 81 cantons and it took 26 municipalities from the NLP, nine from the CAP and two from the Broad Front. By comparison, in the 2014 elections the canton that voted most heavily for the NRP was Quepos, where it received only 3.9%. It is a canton with relatively few votes. The biggest surprise came on the coasts, which had been bastions of the NLP during the last three elections. Of the 28 coastal cantons, the NRP won 23: it won all the cities of the Limon province, 10 of 11 in Puntarenas and seven of the 11 cities in Guanacaste.
  4. But the winning party not only took votes and territory from the NLP; it also did the same with the CAP, the winner of the 2014 elections. According to La Nación: ‘The current governing party (CAP), lost nine cantons that it had conquered (in 2014). Fabricio Alvarado has seized the big prizes out of the hands of the CAP, against which it will compete in the second round on 1 April. The incumbent was victorious in five of the six cantons with the most electors (in San José, Desamparados, Pérez Zeledón, Alajuela and San Carlos). To the list of cantons with the most voters should be added Cartago, the only canton that the NRP lost to Carlos Alvarado. These are municipalities with more than 100,000 voters which represent nearly of third (29%) of the total of ‘valid votes’.
  5. The second round takes place on 1 April, Easter Sunday for Roman Catholics (still the majority of the population, whether by tradition or origin). This fact, which in other circumstances might be completely irrelevant or merely anecdotal, is very important in this case because of the religious character of one of the two contending parties. On this day, the last of Holy Week, it is very common for a large part of the citizenry to be returning from vacation (whether from the beach, the mountains or abroad). Will this affect the overall vote? Will it affect the distribution of the vote? It is also worth mentioning that for the ‘Pentecostals’ –the dominant branch within the NRP– this holiday is not so transcendentally important.
  6. The NRP goes into the second round with an advantage of more than three percentage points over the CAP, or some 65,000 votes in absolute terms. But nearly a million votes are in play (depending on the ultimate level of abstentionism). These million votes, distributed among the other parties, together with the nullified and blank votes of the first round do appear inclined –even if people do not always vote in a disciplined way for those indicated by their party or ex-candidate– to vote as a block, at least if we judge by the press, the social media and the only poll taken for the second round since 4 February. In that poll, undertaken in the third week of February, Fabricio had a lead of 12 to 13 percentage points over Carlos.
  7. The CAP’s campaign has focused until now on attacking the positions of Fabricio on ‘same sex marriage’ and on his rejection of the response given by the Inter-American Court of Human Rights, while attempting to maintain and attract what is typically known as ‘the progressive vote’. Its activists on the social and other media emphasise the danger posed by the NRP to human rights.
  8. Fabricio Alvarado, with his advantage shown in the first round, together with the strong animosity among the majority sectors of the CAP toward the NLP and the SCUP, has been able to attract these voters by moderating his positions and statements on such issues and looking to get closer to some leaders of these parties to reach agreements, or by incorporating representatives from these parties into his campaign team.
  9. Carlos Alvarado (CAP) has also had meetings with leaders of other parties, including publicly with two former Presidents from the NLP and another from the SCUP. It is not yet that publicly known he has met with the three other former Presidents (two from the SCUP and the other from the NLP), but there are rumours that he has.
  10. The Political Directorship of the NLP granted liberty of vote to its militants, given both the delicate issues that had polarized the election and the party’s responsibility as the largest group in the next Legislative Assembly. There is an intense debate, and many wish to influence the bases and the leadership of the party in favour of one candidate or the other, but it is not clear towards which candidate the majority with lean or in what proportion.
  11. The SCUP authorities will announce their official position in the first or second week of March, supposedly once conversations and negotiations with both candidates have finished (especially those with the NRP).
  12. The radio and TV debates will be more influential in the second round. First, this is because there will be only two participants. Secondly, the most important issues in general were postposed in the first round, especially the fiscal deficit (projected to be 7% of GDP in 2018), the tax reform, state action on education, infrastructure, access to and quality of public health and public security –all of which are issues of major interest for the population–. It would be naïve to think that the human rights, family matters and marriage issues will not also be included on the debate agenda. Fabricio will try to take advantage of the voter fatigue with the CAP government, given the dissatisfaction of the majority of the population with its performance. Carlos will have to defend his party and its government, in which he was a minister for several years.

Conclusions

  1. The consultation requested by the Vice-President and the ICHR’s response only three weeks before the first round on 4 February radically changed (in the literal sense) the dynamic and result of the election. If the polls in many countries have recently shown a tendency to be surprised by the actual results, none of them even came close to pointing toward the eventual result of the first round. Additional evidence of this is seen in the difference between the party results in the presidential and legislative elections.
  2. This leads one to question the wisdom of the ICHR and the timing of its response. This will be analysed with increasing perspective over the coming months.
  3. Another consequence has been the marginalisation of some important issues for the citizenry, both in the public and private conversations and debates, and also in terms of the criteria followed ultimately for citizen’s voting decisions.
  4. This same trend continues in the political dynamic leading up to the second round, and it remains to be seen whether other important issues will influence the debate, the voting decisions of the people and the result.
  5. Costa Rica is experiencing a process of polarisation in the public debate and in the behaviour of its political actors, the media and the public in general. Its source can be traced to the protests over the ‘combo’ of the Costa Rican Electricity Institute in 1998,1 the corruption scandals surrounding ex-presidents and other government officials and business people, and the negotiations over and approval of the Central American Free Trade Agreement with the US, which was culminated and successively resolved through a referendum that closely passed. Just when it seemed that polarisation was dying down, the polemic over same sex marriage and other related gender issues seems to have provoked a new polarisation.
  6. Whatever the result of the second round, the country will not be able to avoid facing certain pressing problems, including how to deal with the budget deficit (6.2% of GDP in 2017 and 7% in 2018). The international debt rating on the national debt has suffered a downgrade, and interest rates have begun to rise, but they will probably climb more steeply in the coming months. The delay in reaching a political agreement to deal with these challenges (an agreement which cannot avoid grappling with the issue of which family and marriage forms are acceptable and legal in Costa Rica) will affect economic growth and the distribution of the adjustment burden among the different social sectors. This delay will also affect other central elements of democratic life, including social protest, budget assignations to different government sectors, and the quality of life for citizens.
  7. Although political actors and civil society have encountered great difficulties in reaching agreements on the reform of the state and the fiscal challenge, perhaps the new composition of Parliament and the increasing risk of fiscal (and economic) crisis will help produce ‘a miracle’. The communications media also has tasks and responsibilities in this regard.
  8. Among these challenges –over which there is a consensus with respect to priorities (as reflected in political speeches, the governing platforms of the parties, the reports of specialized national and international bodies, and press articles and opinion commentaries)– the following stand out: better efficiency and higher volumes of investment in physical infrastructure; higher quality of education and health; improvement in public security; a reduction in poverty and extreme poverty; and the need for increasing tax ‘progressivity’.
  9. Costa Rica has strong institutions. The electoral process –above and beyond the methods of choosing deputies or of assigning elected posts in a system that is no longer bi-party, and independent of the need to reform election finance– responded solidly. The results were fast and accepted by everyone; this speaks well of the Elections Supreme Court (ESC), which is nearly a ‘fourth constitutional power’ in the government system.
  10. The Costa Rican economy is one of the most open and diversified of the continent. The Central Bank and its auxiliary supervisory and control organs are independent and effective. This neutralises, to a certain point, the possibility of an economic crisis (mainly external), given the need for an urgent and profound fiscal adjustment, with its inevitable costs. But one should not underestimate the risks implied by the current complex fiscal situation.
  11. The general efficiency of the state apparatus, which is complex and perhaps more decentralised than is necessary, has been a pending task for more than two decades, despite some minor changes. The general system of public procurement should be revised and reformed to align incentives toward the general objective of higher efficiency. The redistribution of public funds, raised by taxes, could ameliorate the profundity of the fiscal adjustment and its short- and medium-term consequences.
  12. I am not optimistic with respect to the possibility that a government will be elected on 1 April, assume office five weeks later and prove capable of an ordered and coherent long-term plan. But such a plan needs to be made and executed –even if with fallacies and shortcomings inherent in it– over the coming four years. The government alone will not be enough, technically or politically. But if the government knows how to harness them, the country does have the human resources and democratic reserves to carry this out.

This election in Costa Rica kicks off a cycle of six elections in Latin America in 2018, and it has already acquired larger dimensions than originally anticipated. It has given some lessons to the entire region. Hopefully Costa Ricans will know how to read well both the results and the entire process. All Latin Americans –and all those who interact in the private, public and academic sectors internationally– and any others with a legitimate interest in the region, should analyse these results and study this case, as the Costa Rican elections hold many important lessons.

Saúl Weisleder
Former President of the Legislative Assembly of Costa Rica


1 The so-called ‘Combo del ICE’ was a legislative bill that included in a single proposed law the reform of both the electricity and telecommunications sectors. Until then a state monopoly (ICE) had existed over the telecommunications sector, as well as over the ‘transportation and distribution’ of electrical energy, with significant limitations on private generation. The ICE controlled this monopoly. In response to this move to debate and approve the reform in a single bill, the public-sector unions, especially those linked to the ICE –the strongest in the country– managed to mobilise university students and other sectors, nearly paralysing the country. After a dialogue mediated by various entities, including the Roman Catholic Church and the Defender of the Inhabitants, some important agreements were reached, including the withdrawal of the legal reform and its substitution with another ‘less drastic’ option but which also ended the telephone monopoly, especially in the mobile phone sector, allowing for various private firms. The reassignment of the broadcast spectrum is still pending.

]]>
<![CDATA[ Latin America, the international community and Venezuela ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-malamud-latin-america-international-community-venezuela 2018-02-13T06:09:28Z

The clamour for an answer to the crisis in Venezuela will be even more intense in 2018 as the economic situation worsens (hyperinflation, shortages and growing debt) and the humanitarian drama deteriorates by the minute.

]]>
Original version in Spanish: América Latina y la comunidad internacional frente a Venezuela

The question as to what is to be done with Venezuela has been formulated time and again in recent years by practically all of the Latin American Foreign Ministries, and by the most diverse range of think tanks, journalists and politicians, along with a heterogenous group of others. In general, the question is typically left unanswered due to the complexity of the crisis and the atypical behaviour of most of the actors involved.

And if the clamour for an answer was incessant during 2017, it will be even more intense in 2018 as the economic situation worsens (hyperinflation, shortages and growing debt), as the humanitarian drama deteriorates by the minute, and as the uncertainty generated by the lack of coherent explanations as to how to get out of this painful situation continues. Everything seems to confirm fears that the current junction could give way to even more grave consequences for the Venezuelan people, the central protagonist of the tragedy underway.

“Only the government of Raul Castro has the sufficient capacity and influence to attempt to reach a solution to the Venezuelan conflict”

The magnitude of the crisis and the government’s resistance to progress on any negotiated agreement has led to the failure of practically all proposed solutions. Neither election results nor street protests have proved capable of contributing to any progress, despite the widespread rejection of the Chavista leaders, beginning with Nicolas Maduro himself, as the public opinion polls continually reveal.

The situation has been aggravated by the fact that the opposition’s scope for manoeuvre is very narrow, given the constant reformulation of the rules of the game undertaken by Maduro and the regime’s repressive economic and political actions. To this must be added the weakness, disunity and lack of clear and coherent proposals from the opposition, which, instead helping matters, makes them worse.

Furthermore, the international community faces strict limitations when it comes to mediating the crisis. Positions in favour of dialogue and a negotiated solution are typically rejected by the Venezuelan government, unless it decides to take advantage of the recourse to negotiation to buy time or make compromises that can defuse particularly difficult moments. The support of Cuba, Russia and China has also allowed the Bolivarian regime to protect its flanks.

In the context of the current crisis affecting the country, only the government of Raul Castro has the sufficient capacity and influence to attempt to reach a solution to the Venezuelan conflict. But it is one thing to have the capacity; a very different thing is the political will to carry this out. However, in the face of economic difficulties on the island itself, a change in government in Venezuela would be catastrophic for the Cuban government, given the level of aid it receives daily from its Caribbean neighbour in the form of petroleum.

If, on top of the question of what to do with Venezuela, one adds that of what can be expected from the international community, especially within the Latin American neighbourhood, then the possible responses multiply in number, although this in no way implies that anyone has offered viable solutions of any type, or recommendations that could be taken on by the governments involved.

The positions of the Lima Group, including the condemnation of the lamentable human rights situation in Venezuela and the participation of some Latin American Foreign Ministries in the negotiations that were attempted in Santo Domingo, are important steps forwards. However, in the face of regional fragmentation it is practically impossible to come to consensual solutions. Then there is also the influence that certain principles –like that of territorial sovereignty and non-interference in domestic affairs– exert within regional public opinion.

The formulation of new proposals

At the beginning of 2018 two new proposals offered some innovation on the recommendations presented so far that might be able to pull the country out of the vicious circle in which it has been trapped. One of them, quite polemical, was formulated by Ricardo Hausmann, former Minister in Venezuela (1992-93) and professor of economics at Harvard. The other comes from Emilio Cárdenas, the former Argentine Ambassador to the UN. Both propose that the international community, especially Latin America, adopt a more active role in resolving the Venezuelan crisis.

Hausmann advocates that the legally elected National Assembly, controlled by the opposition, depose the government of Nicolas Maduro using its constitutional prerogatives. An executive capable of petitioning the international community (Latin America, the US and the EU) for military assistance in resolving the humanitarian drama unfolding in the country could be temporarily elected. The crisis is such that, in Maduro’s own words, ‘(the situation) is beginning to move on, inexorably, from being catastrophic to becoming unimaginable’.

For his part, Cárdenas points out that in the face of the growing threat to Latin American peace and security from Maduro’s foreign policy, the region itself should begin to adopt concrete measures that go beyond mere rhetoric. Cárdenas reminds us that the Venezuelan government declared the diplomatic representatives of Brazil and Canada persona non-grata and that Maduro focused a good part of his insults and threats on the Argentine President, Mauricio Macri, whom he called a ‘thief’, a ‘coward’, a ‘bandit’ and even a ‘drainpipe rat’, and the ‘godfather of the fascist Venezuelan right’.

Cárdenas has proposed a ‘joint recall for consultations’ of all the Latin American ambassadors accredited to Caracas, as a form of regional protest against what can be qualified as inadmissible conduct. He also proposes, as a more serious measure, to leave all Latin American diplomatic missions in Venezuela in the hands of Consuls. His proposal has not yet been the subject of many commentaries, but neither has it provoked systematic rejections.

It could not be any other way –given the implications and everything that is at stake, including the very survival of the Chavista project– that such issues as a potential new US military intervention in Latin America, the possible cost in human lives and material damage of such an operation, the role of regional governments in this regard –and the intense reactions of all kinds that such possibilities raise– have generated a diverse range of opinion along with bitter debates.

The responsibility to protect and responsibility while protecting

Implicit in both these proposed contributions to the solution of the Venezuelan crisis is the ‘right to protect’: the capacity of the international community to intervene in the face of humanitarian crises. By the end of the 20th century a debate was underway over the limits of the use of force and of multilateral interventions in situations of humanitarian crisis or acute instability. From that discussion emerged the idea of the ‘responsibility to protect’ (R2P), championed by Kofi Annan when he was UN Secretary General. However, in the face of what appeared to be a general consensus, given the complications stemming from the UN intervention in Libya, the Brazilian President, Dilma Rousseff, in an address to the UN General Assembly, in September 2011, introduced a subtle nuance differentiating the right to protect from the rights of those protected.

“What is at play here is the contradiction between respect for the principles of sovereignty and non-intervention and the need to protect societies and populations threatened by systematic human rights violations

With respect to the former, Rousseff clarified that, despite supporting UN participation in the prevention of conflicts, a warning was in order with respect to the costs of military interventions which often, far for resolving conflicts, have made them worse, and with direct consequences for the civilian populations involved. The Ambassador to the UN, Maria Luiza Viotti, summed up the Brazilian position a year later, saying: ‘The use of force always carries the risk of innocent victims, and tends to spread violence and instability. The fact that they stem from action intended to protect civilians does not make the collateral damage or any unintended destabilization any less tragic’.

Many voices have been raised against this Brazilian nuance, which seemed to question the notion of intervening in internal affairs, and of the use of force to resolve humanitarian crises. Brazil was placing a clear emphasis on conflict prevention, although the risk is that this focus on the principle of non-invention in internal affairs and in defence of national sovereignty could lead to inaction. As a Danish representative argued in a debate at the UN in February 2012: ‘The risk of inaction in the face of massive atrocities is great, possibly larger that of doing too much’.

What is at play here, then and now, is the contradiction between respect for the principles of sovereignty and non-intervention –part of Latin America’s diplomatic and political DNA– and the need to protect societies and populations threatened by grave, massive and systematic human rights violations. At stake also is the role of international humanitarian law.

These are some of the critiques which have responded more or less openly to Hausmann’s article. One of the dilemmas his proposal reflects is that of determining the lesser of two evils: what will cause more harm to the Venezuela people –a military intervention or the continuation of the status quo?–. At the same time, one issue ignored by Hausmann is how the new government, theoretically to be appointed by the National Assembly, could consolidate its authority in a completely hostile context while successfully convoking international assistance.

Although Hausmann spoke of ‘military assistance’, this was interpreted as ‘military intervention’. The responses of Xabier Coscojuela, on the one hand, and of Sean Berges and Fabricio Chagas Basos, on the other, point in this direction. Even the latter two called a supposed invasion of Venezuela a ‘terrible idea’. Such critiques underlined the difficulties of mounting a successful military operation in the face of the fire power of the Bolivarian National Armed Forces (BNAF). They also have concentrated on arguing why a civil war would not only destabilise Venezuela but also the whole of Latin America.

“Negotiate the calling of new elections that are fair and have sufficient guarantees would be the only way forwards for resolving the crisis and commencing with national reconstruction”

At the same time, these critics have also questioned the Latin American regional capacity to intervene, arguing that only the US has the operational and logistical capacity needed to guarantee a change of government and to re-establish social order in the wake of such a military intervention. US participation (on top of the revulsion factor provoked by Trump) would generate widespread discontent and the opposition of most of the region’s governments, all of which jealously guard the principle of non-intervention in internal affairs and the defence of national sovereignty. It was also emphasised that such an intervention would rekindle nationalist sentiment in Venezuela, something which (self-servingly agitated by the government) would reinforce Chavismo.

Many question whether the current juncture still offers any scope at all for a political solution. Some believe that it is still possible, whether in Santo Domingo or elsewhere, to negotiate the calling of new elections that are fair and have sufficient guarantees. This would be the only way forwards for resolving the crisis and commencing with national reconstruction.

In rebuttal, Hausmann underlines the failure of all previous options proposed by the opposition to overcome the current state of affairs. Given the absolutely catastrophic situation in the country, and the horrendous magnitude of the humanitarian crisis which accompanies the crisis, Hausmann reminds us that inaction will only increase exponentially the number of victims and the level of suffering of the Venezuelan people. Therefore, there is a need to intervene.

A final consideration

At present, the question as to what to do in or with Venezuela has no clear answer. Clovis Rossi, in response to the debate raised by Hausmann’s proposal said that ‘all of the other routes for resolving the Venezuelan crisis have failed. The electoral route failed, the protest route failed and now dialogue is failing. Therefore, it is necessary to think the unthinkable’. Still, where are the limits to such unthinkable actions and who among the principal actors is willing to accept them, beginning with the government and the opposition, and including the international community?

Hausmann could be right that the only solution is military, although this at least falls within the category of the thinkable. In any event, what should be the price paid by Venezuelan society in the case of a foreign armed response? In the face of the current determination of the government of Nicolas Maduro to resist at all costs, a rapid intervention of foreign forces with few victims is practically impossible. A civil war –which would immediately be presented by the Chavista regime as the heroic popular resistance in the face of a new imperialist aggression– would leave behind deep wounds that would take years to heal. Appropriating the role of the victim, the myth of Hugo Chávez would be strengthened and Chavismo as a political movement would maintain aspirations to return to power for generations. In this way, the future of Venezuela would be condemned for the coming decades.

Carlos Malamud
Senior Analyst, Elcano Royal Institute
| @CarlosMalamud

]]>
<![CDATA[ The elections in Chile and Honduras and regional political trends in 2018 ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari13-2018-malamud-nunez-elections-chile-honduras-regional-political-trends-2018 2018-02-02T01:38:04Z

The elections in Chile and Honduras should confirm whether or not there is a new regional political trend (‘a turn to the centre-right’). Also present will be the trend towards re-election, the appearance of new forces, along with violence and corruption as central campaign themes.

]]>
Original version in Spanish: Las elecciones de Chile y Honduras y las tendencias políticas regionales en 2018

Theme

Chile and Honduras have kicked off an intense electoral period in Latin America that will last until 2019. These upcoming elections should confirm whether or not there is a new regional political trend (‘a turn to the centre-right’). Also present in the upcoming elections will be the trend towards re-election, the appearance of new forces and emerging leaders, along with violence and corruption as central campaign themes.

Summary

The election victories of Sebastián Piñera in Chile and Juan Orlando Hernández in Honduras marked the beginning of an intense electoral period in Latin America that will define the regional political map well into the next decade. The Honduran and Chilean elections have confirmed the new predominance of the political right and centre-right, while the return of Piñera to La Moneda and the forced continuity of Hernández in Honduras have reinforced the trend across the region towards presidential re-election. Chile and Honduras are also new examples of the ongoing erosion of traditional party systems, the appearance of new political forces and emerging leaders, and the corruption and violence that permeate, directly or indirectly, the electoral processes of the region. Whether or not a new political cycle can be confirmed to have begun, the region emerging from this process is much more diverse and plural than the Latin America of the past. The unanimity and hegemonies of Bolivarian ‘Chavismo’ have come to an end; the region’s actors will need to adapt to the new times, an imperative that some are still resisting.

Analysis

After the presidential election in Ecuador in April 2017, no further Presidents were elected in Latin America until the last two months of the year, with the elections in Chile (first round, 19 November; second round, 17 December) and Honduras (26 November). The Chilean election was marked by the fragmentation of the vote during the first round and a strong drop in support for the historic coalitions: Fuerza de Mayoría (‘Majority Force’) and Chile Vamos (‘Let’s Go Chile’) in its current version. Although in the first round of the 2013 elections these traditional coalitions gained 71% of the vote, in 2017 their support fell to 59%. The decline of such coalitions occurred as the extremes of the political spectrum attracted votes that historically had gone to centre-right and centre-left coalitions. Meanwhile, on the left there emerged the Frente Amplio (‘Broad Front’), which captured 20.2% of the vote, and on the right, the ‘independent’ José Antonio Kast appeared, taking 7.9%.

In the voting Piñera (of the centre-right Chile Vamos) beat the official candidate, Alejandro Guillier (of the centre-left Fuerza de Mayoría) by far more than expected (more than nine percentage points). Guillier was penalised for his weak campaign and suffered only lukewarm support from the Frente Amplio, which remained reticent to back the old Concertacion formation.

In Honduras, where elections have only one round, it took nearly a month for the official result of the presidential election of 26 November to be known. During those four weeks, the ballot counting brought back memories of other times: accusations of fraud, information blackouts, street disturbances (with 17 deaths), curfews and loss of institutional prestige. The Electoral Supreme Court (ESC) finally proclaimed Hernández –the incumbent President and the candidate of the Partido Nacional (National Party) for re-election– as the winner of the election by a narrow margin of only 1.5 percentage points (42.9% to 41.4%) over Salvador Nasralla, leader of the Alianza Opositora (‘Opposition Alliance’).

The election revealed the poor functioning of Honduran judicial and electoral institutions, and their co-optation by private interests. The slowness of the vote count and the scant transparency of the ESC generated suspicions of fraud. Luis Almagro, Secretary General of the OAS pointed out that ‘it is not possible to be certain of the electoral result’, while the OAS delegation of electoral observers concluded that there were ‘irregularities before, during and after the elections’.

Both electoral processes displayed characteristics linked to their country’s own internal dynamics but, at the same time, they foreshadowed certain traits that will be clearly and increasingly present during the 2018 and 2019 elections (in which 14 of the region’s 18 countries will vote).

Consolidation of a new political juncture

These two elections resulted in victories for the centre-right (Piñera) and the right (Hernández). The victories support the idea of a new regional political juncture. Some even speak of a ‘turn to the right’ (or to the centre-right), although this new trend can only be definitely confirmed by the results of the key elections of Mexico and Brazil. The change in trend began in 2015 with the victories of Mauricio Macri in Argentina, Jimmy Morales in Guatemala and Mesa de Unidad Democrática (MUD, ‘Table of Democratic Unity’) in the Venezuelan legislative elections. It was reinforced by the election of Pedro Pablo Kuczynski in Peru in 2016, and continued to deepen in 2017 with the return of Piñera to La Moneda and the triumph of Hernández in Honduras.

Nevertheless, the ‘turn to the centre-right’ needs to be nuanced. First, for the moment at least, it remains more a temporary change of juncture than a definitive change in the political cycle. Although the victories of Macri, Kuczynski and Piñera are significant, it is still too early to raise them to the category of a regional phenomenon. Bolivarian populism has lost only in Argentina (with the defeat of Kirchnerism in 2015) and the left in Chile (the heirs in 2017 of the Concertación). Aside from these two cases, national populism retains power in Venezuela, and has been ratified in Nicaragua (Daniel Ortega) and Ecuador (Lenín Moreno).

In order to speak of a new political cycle, one must wait for the election results of 2018 and 2019. The centre-left and the left have real possibilities of winning, and in key countries like Mexico (Andrés Manuel López Obrador), Brazil (Lula da Silva) and Colombia (Sergio Fajardo) they are leading in the polls. However, if the right were to win in these countries, the result would consolidate the change in trend, giving way to a new political cycle at the regional level. Furthermore, this succession of centre-right victories has been heterogenous. Macri, Kuczynski and Piñera do not represent the same things as Hernández and Morales. The inclination towards republican form, content and style among the former group contrasts sharply with the Honduran’s lack of constitutional scruples.

The reasons for the ‘turn to the right’ are rooted in three factors bound up with the new political juncture: (1) the end of the primary product super-cycle in 2013 and the subsequent economic slowdown) that affected each Latin American country in varying degrees, but especially those of South America; (2) the significant deterioration of the image of some governments in the realm of public opinion, common among leaders and parties in power for long periods of time; and (3) the demands of the new middle classes that weigh heavily on the different administrations and which are characterised by their inclusion of demands befitting their status, such as more political participation, access to education and other public services (ie, security, health and transport), heightened transparency and more efficiency in the fight against corruption and violence.

The re-election ‘revival’

Chile and Honduras have shown two kinds of ‘re-electionism’ and two divergent ways of applying it: in the Chilean case, respect for the constitution and national institutions, while in Honduras the limits of both have been stretched.

In Chile, continuous re-election is not allowed; however, a former President can aspire to be a candidate again, but only after a full presidential term has passed. This has been occurring for more than a decade. In 2017 Piñera’s victory created the unprecedented case of two different Presidents (each from different parties) holding power for 16 consecutive years, as each one succeeded the other every four years.

Honduras has also just experienced a re-election, something without precedent during the democratic period, which goes back to 1982. The precedents for presidential continuity go back many years to Tiburcio Carías Andino, who was re-elected without interruption from 1933 to 1949. However, no Honduran leader has sought re-election since the return of democracy (with the exception of the unsuccessful constitutional reform of Manuel Zelaya in 2009, along with the strategy, also unsuccessful, of Roberto Suazo Córdova in 1985 to remain in power). During the democratic period, the Constitution of 1982 (article 239) expressly prohibited the re-election of anyone who had held presidential power.

In 2015 the Partido Nacional of President Hernández successfully promoted the re-election project. At the beginning of 2016, the Supreme Court –controlled by members close to the government– declared that the articles of the Constitution that prohibited presidential re-election did not apply, opening up the possibility that the president might aspire to a consecutive re-election.

This re-election trend –although very different in Chile than in Honduras, in both form and content– continues to be a regional fixture. At times there is a marked lack of renovation while in some countries (Nicaragua, Bolivia and Honduras) there has been a violation of the letter and spirit of the constitution in favour of the incumbent wielding power. This succession of constitutional changes demonstrates that trend to allowing re-election is not the exclusive property of a single ideology or concrete political tendency: it has been pushed by leaders on the right (Hernández in 2017 and Álvaro Uribe during his time) and by Bolivarian populists (Morales in Bolivia, Ortega in Nicaragua and Chaves in Venezuela).

The re-election trend has now become the norm in Latin America. During the 1980s and up to the first half of the 1990s, most of the region’s countries limited presidential re-election. There were no cases in which indefinite or continuous re-election was allowed, and where re-election possibilities did exist they were limited by the required passing of one or two presidential terms before a President could present himself for re-election. But the constitutional reforms that allowed the re-election of Alberto Fujimori in Peru, of Fernando Henrique Cardoso in Brazil, and of Carlos Menem in Argentina generalised the phenomenon across the region, and it was replicated by the Bolivarian leaders (Chávez, Morales, Correa and Ortega) and by those leaders labelled strongmen or ‘caudillos’: Álvaro Uribe in Colombia, Danilo Medina in the Dominican Republic and Hernández in Honduras.

In contrast to the regional situation at the beginning of the democratic transitions, currently 14 of the 18 Latin American countries allow some type of re-election: ‘alternating’ (Chile, Uruguay, Panama, Peru, Costa Rica and El Salvador), ‘consecutive’ (Argentina, Brazil, the Dominican Republic) and ‘unlimited’ (Venezuela, Bolivia, Nicaragua, Honduras and Ecuador). It remains forbidden in Mexico, Guatemala, Paraguay and Colombia. Colombia is the only recent case in which re-election has been accepted and then reversed (Uribe introduced it, only for Juan Manuel Santos to prohibit it again). In Brazil, halfway into his second term, Lula was pressured by his followers to pursue a third term, but he rejected this possibility, placing the emphasis on ‘alternation’ as a key characteristic of modern democracies.

In 2017 Piñera returned to La Moneda, while Hernández was re-elected in Honduras. In 2016 Ortega had been re-elected in Nicaragua and Medina in the Dominican Republic. In 2018 and 2019 it is highly possible that there will be new attempts at continuity via ‘consecutive’ (Maduro, Morales and Macri) or ‘alternating’ (Lula) re-election.

A scenario favouring outsiders

In both the Chilean and Honduran elections there appeared outsiders –emerging political leaders who come from the margins of the traditional political parties and view the political class and traditional party system as the enemy and principal antagonist to be defeated–. This happened with Nasralla, a sports journalist and TV presenter who in 2013 created the Partido Anticorrupción (‘Anti-Corruption Party’) and in 2017 led an alliance formed by the Partido Libertad y Refundacion (LIBRE, ‘Party of Liberty and Refoundation’, created in 2009 and linked to former President Manuel Zelaya), and the PINU-SD. In Chile, the electorate closest to former President Pinochet (that typically voted for the centre-right Alianza) was captured by Kast, who approached 8% of the vote. The left not linked to the Concertacion tradition supported the Frente Amplio, which received 20% of the vote in the presidential election.

The regional political juncture –characterised by intense dissatisfaction with traditional parties and politicians and a rapid loss of legitimacy of certain governments– along with the economic and social situation –marked by slow growth and frustrated expectations among the empowered middle classes– and the fiscal position –with less state resources for social policies and client networks– creates a political climate that is very favourable to the appearance of surprise candidates (ie, outsiders) but much more difficult for traditional candidates.

In this way ‘Trump-like candidates’ have emerged. They are not linked to the traditional parties (being outsiders), like Nasralla or the Guatemalan Morales, figures that lead movements with high levels of personalism (the Brazilian Jair Bolsonaro) that come from the sphere of the media (Morales, Trump and Nasralla) and carry a polarising and demagogic message which is very critical of the politics and system of the traditional parties (the Mexican Andrés Manuel López Obrador and the Costa Rican Juan Diego Castro) and whose principal (and sometimes only) ‘ideological’ argument is the fight against corruption, violence and the political class. They are opportunistic leaders, without solid parties, political teams or structured political programmes. With their charisma and a very simple message they fan social resentment and the frustrated expectations of the middle classes, creating scapegoats (politicians) and channelling disaffection toward the traditional parties and politicians, and bad feeling towards the State and the public administrations that are incapable of implementing policies and providing public services.

The idea that ‘populism’ is on the decline in Latin America should be questioned and nuanced. Rather than the end of populisms, we are witnessing the appearance of new populist phenomena that are not linked to the Bolivarian ‘socialism of the XXI century’ but rather to movements on the right, as in the cases of Morales, Nasralla, Bolsonaro and even Keiko Fujimori.

Heterogenous and ‘unnatural’ coalitions versus hegemonic parties and leaders

The crisis of the party system and the deterioration of traditional political forces now favours the appearance of new players who form electoral coalitions (heterogenous and ‘unnatural’) in order to defeat hegemonic candidates. In 2017 two alliances, Frente Amplio in Chile and Alianza Opositora in Honduras, transformed the political maps of their respective countries. Some of these changes can take on a structural character to become more than merely conjunctural phenomena, although for the phenomenon to be identified it must already be consolidated.

The Chilean example reveals how the decline in support for the two coalitions which have alternated in power since 1990 –and their difficulties in channelling the demands of new generations and social sectors– generates a political environment favourable to the emergence of new options. This was the case of the Frente Amplio, a broad and heterogenous leftist coalition that gained 20% of the vote in the presidential elections with the journalist Beatriz Sánchez as candidate. It formed its own group in Congress with 20 deputies and it also entered the Senate. The Frente Amplio is a decisive force in Congress (like the Christian Democrats), but it remains to be seen whether they will allow the Congress to govern or simply limit themselves to becoming the opposition, as in the case of Spain’s Podemos, their main international point of reference.

Neither Chile Vamos nor Fuerza Mayoria control the Parliament. Under such circumstances, the votes of the Frente Amplio have more possibilities of becoming consolidated than other options (such as the one Marco Enríquez Ominami led in 2009, when he garnered 20% of the presidential vote, a percentage which then continued to decline to the current 5%).

The main challenge facing the Frente Amplio is to bring order to its ranks and to overcome its heterogeneity so that it might become a credible alternative. However, it has captured the vote of the youth without links to Concertación. Some analysts indicate that 78% of the votes for Beatriz Sánchez came from ‘newly registered voters’ (included in the electoral roll through automatic registration since 2012). Nevertheless, a relatively large number of the voters for Frente Amplio chose Piñera in the second round, presenting a serious challenge to the loyalty of the Frente Amplio’s followers.

In the case of Honduras, the predominance of the PN (in power since 2010) and, especially, of the figure of Hernández and his re-election project, deepened the polarisation. During the elections of 2017 the debate developed between two opposite choices: the defenders of the President’s continuity and the detractors of a lengthened mandate. This led to the formation of a heterogenous and unnatural alliance between two emerging minority forces (the liberal dissidents of LIBRE and the leftists of PINU-SD) and the followers of Nasralla (a demagogue and populist leader). They were united only by their rejection of Hernández and of the re-election project. Hence their name: Alianza Opositora contra la Dictadura (‘Opposition Alliance against the Dictatorship’).

The results of the Honduran election confirmed the change in the party system. The country’s democratic history since 1980 can be divided into two different epochs by the coup of 2009 and its direct consequences for the party system and political model. From 1982 to 2010 the Partido Liberal occupied the central place in the party system, operating as its most preeminent force. It was the party that won the most elections and maintained power for the longest period of time. The victory of Porfirio Lobo in 2009 –after the profound institutional crisis of that year– opened a new period marked by the dominance of the Partido Nacional (PN). Honduras suffered a weakening of the traditional bi-party system due to the internal problems of the Partido Liberal and the loss of votes for both the PL and the PN, the bi-party system that maintained political hegemony since 2010.

From 1982 to 2009 the two most voted formations were the PL and the PN. Together they made up the majority of votes, and the alternative was always one of them. In 2013 Juan Orlando Hernández, of the PN, won 36.8% of the vote (the lowest figure since 1981). In 2013 the second most voted formation was not a traditional party, but rather the emerging LIBRE. The classic bi-party system broke down that year: Hernández won with an electoral margin of eight points over Xiomara Castro (Zelaya’s wife) of LIBRE who received 28.9%. Mauricio Villeda of the PL came in third with 20.28%, and Nasralla of the Partido Anticorrupción (PAC) came in fourth with 13.52%.

The electoral and party system changes that appeared in 2013 were not just temporary; they have been consolidated in 2017. The bi-party system has been rearticulated: this time between a traditional party (PN) and a newly emerging coalition. Until 2013 the winner always captured 50% of the vote, and together the Partido Liberal and Partido Nacional accounted for more than 94%. In the latest election, the traditional parties barely amassed 60% between them, and the winner got only 40%.

Electoral alliances will also be formed in 2018 in other countries. The Están Por México al Frente (‘For Mexico to the Front’) brings together the PRD, the PAN and the MC. There is also the Paraguayan coalition, the PLRA-Frente Guasú. Both of these coalitions seek to challenge the hegemonic parties in their respective countries (the PRI and the Colorados). In Colombia, three large coalitions will likely compete for the presidency: one, on the right, consists of conservatives and Uribe supporters; another, in the centre, with Sergio Fajardo (Coalición Colombia) backed by Claudia López (the Green Alliance) and Jorge Enrique Robledo (Polo); and the third, of the centre-left, comes together around Humberto de la Calle (Partido Liberal), Gustavo Petro (Colombia Humana), Clara López (ASI) and Carlos Caicedo.

These alliances –unnatural in some cases and heterogenous in others– are the only way for minority forces to challenge the large, incumbent hegemonies. In Paraguay, the former President Fernando Lugo, of the Frente Guasú, is now backing the PLRA’s presidential candidate –his liberal ally in 2008, who was nevertheless responsible for his downfall in 2012– in order to bring the dominance of the Colorados to an end.

Recurring campaign themes

Three recurring themes dominated the Chilean and Honduran election campaigns. These same issues have also been central to other elections in the region: corruption, the need for structural reforms to stimulate economic growth and citizen insecurity. These three problems have also been identified for years now by Latin Barometer as those that most concern the region’s citizens.

The big issue in Latin America has been corruption, especially since the outbreak of the Lava Jato scandal. In Chile and Honduras, corruption scandals undermined the ‘official’ candidates and strengthened the arguments of the opposition: the consequences of the Caval case in Chile (which damaged Michelle Bachelet) and the Seguro Social scandal in Honduras. What has occurred with Nasralla is significant in this regard. In 2013 he founded the Partido Anti Corrupción (‘Anti-Corruption Party’) and in 2017 he made the fight against authoritarianism and corruption the main issues of the Alianza Opositora (‘Opposition Alliance’).

In 2018 corruption will be the central issue of the discourse of López Obrador –with his critique of the ‘mafia of power’ in which he groups together all of his rivals (the PRI, PAN and PRD)– and of Juan Diego Castro in Costa Rica. The Lava Jato scandal will impregnate the elections in Brazil, where the courts must decide if Lula da Silva will be a presidential candidate or not. In Costa Rica the traditional officialism (Partido Acción Ciudadana, PAC, ‘Citizen Action Party’) has been negatively affected by the cementazo case. In addition to voter fatigue and the low public opinion rating of the government of Luis Guillermo Solís, the cement scandal explains why only 5% of the electorate intends to vote for the PAC.

In the election campaigns of Chile and Honduras the need for reforms to stimulate growth has also been a principal theme. There is a general consensus among the parties regarding the need for reforms, but not with respect to the required direction for change. In Chile both Guillier and Piñera pushed for transformation, but in different directions: more state-driven in the case of Guillier; more liberal in the case of Piñera.

Personal security has been a recurring theme in Latin American elections since the 1990s. Nor is it absent from current debates, both in countries with low crime rates (Chile and Costa Rica) and in countries with high crime rates (Honduras).

The protest vote against the traditional ruling parties

Ever since the change in the economic cycle that came in 2013, there has been a steady rise in the protest vote against the region’s traditional ruling parties. In Chile the official government coalition was clearly defeated at the ballot box. Its candidate had the worst result (only 22%) of a ruling party since 1989 during the first round. In Honduras more than 57% of the vote was against the re-election of Hernández.

The time of election votes in favour of the traditional ruling parties is now history. In 2011 Cristina Kirchner won with 54% of the vote and led her closest rival by 37 percentage points. In 2013 Rafael Correa gained 57% of the vote to Guillermo Lasso’s 35%. But now the protest vote is dominant. The opposition victories have become more frequent in recent years, especially since 2015, and affect, fundamentally but not exclusively, leaders and Presidents within the sphere of Bolivarian populism, as with Kirchnerism in Argentina.

In Costa Rica the ruling PAC of Solís has very little chance of making it to the second round. The polls show its candidate, Carlos Alvarado, with a low percentage of the intended vote –between 5% and 6%–. In Mexico the PRI is now only the third national political force in terms of intended vote; in Colombia the candidate closest to President Juan Manuel Santos (Humberto de la Calle) is very low in the polls, while in Brazil the PMDB (now the MDB) is no longer among the favoured parties.

The voter fatigue that comes with prolonged governments (eight years of the Partido Nacional in Honduras; Concertación dominance in Chile since the 1990s; eight years of Juan Manuel Santos in Colombia) –together with an economic context of low growth which does not allow the financing of social policies or even for the maintenance of clientelist networks– explains why a voting citizenry with rising expectations is either voting against the ruling parties, escaping into abstention or supporting innovative alternatives. In Chile abstentions were more than 50% in both the first round (with 46.7% participation) and the second round (49.2%), and in Honduras they were 51%. Despite the diversification of alternatives (Frente Amplio and Kast in Chile and the Alianza Opositora in Honduras), abstention rates continued to be very high.

Close results and minority governments

Honduras and Chile have provided another demonstration of the dominant characteristics of the political moment in Latin America: close results (Honduras) and elections which produce minority governments (Chile). From late 2015 most of the elections in Latin America have been decided not only in the second round but also with only a narrow difference between the two candidates. There are some exceptions. In Nicaragua Daniel Ortega was re-elected in 2016 with 72% of the vote against his rival from the PLC who received only 15%. In the Dominican Republic Danilo Medina won by 25 percentage points over Luis Abinader. And in Chile Piñera beat Guillier by nine points. In the rest of the elections the pre-election uncertainty was extended by the result: Macri defeated Scioli only by three points; Kuczynski beat Keiko Fujimori by less than one percentage point; Lenin Moreno won by less than three points over Guillermo Lasso; and in Honduras Hernández had only a 1.5 percentage point advantage over Nasralla.

These close results, and the fragmentation of the vote, had meant that most of the current Presidents lack a parliamentary majority, making it more complicated to govern. ‘Divided governments’ are emerging in Latin America; increasingly the President lacks sufficient backing and ends up in confrontation with Parliament. In Brazil Dilma Rousseff was removed from office. In Peru Kuczynski managed to save himself only by a handful of votes. In other countries the legislative weaknesses of the President give rise to administrative paralysis (as in Guatemala and Costa Rica) or serious difficulties in undertaking reforms (Argentina and El Salvador).

Conclusions

Chile and Honduras have kicked off a new Latin American electoral season, setting certain political trends that might (or might not) be consolidated and confirmed by the electoral results of 2018 and 2019. The victories of Piñera and Hernández strengthen the trend towards an increasing predominance of the centre-right and right, and of those pushing for more economic liberalisation.

The latest triumphs of ruling party and traditional coalition candidates (Chile Vamos and the Partido Nacional) has been accompanied by a significant loss of historic support, while at the same time, new alternatives, led by outsiders and leaders from beyond the margins of the traditional parties have begun to emerge. This is another sign of the crisis of the political system.

The change in the economic and social context has shaped the results in Chile and Honduras and will continue to affect the upcoming elections. The economic slowdown and the demands of the middle classes have eroded support for governments and favour new alternatives that are reinforced by the corruption or incapacity of some administrations to produce improvements in health, education, transport and personal citizen security.

Carlos Malamud
Senior Analyst, Elcano Royal Institute
| @CarlosMalamud

Rogelio Núñez
Lecturer, IELAT, University of Alcalá de Henares

]]>
<![CDATA[ Venezuela and PDVSA: killing the goose that lays golden eggs ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-achutegui-venezuela-pdvsa-killing-goose-golden-eggs 2018-01-19T02:55:58Z

In a country that depends almost entirely on its oil exports it seems very strange that its leaders despise the national oil company.

]]>
Also available the Spanish version: Venezuela y PDVSA: matando a la gallina de los huevos de oro

In a country that depends almost entirely on its oil exports it seems very strange that its leaders despise the national oil company. This, however, is precisely what is happening in Venezuela under the government of President Maduro.

Between December 2014 and December 2017 Venezuelan oil production fell from 2.9 million barrels/day to 1.8 million as reported by the government to the Organisation of Oil Exporting Countries (OPEC). This implies a loss of over US$62 million a day, taking into account the average price of the Venezuelan oil basket in December.

Figure 1. Venezuelan oil production: direct communications to OPEC

A country that is currently undergoing one of the worst economic and social crises in its history would naturally look for ways to halt the decline in order to have access to this much needed foreign currency. Especially considering that according to the Venezuelan Central Bank (2015 data, the latest available official balance of trade statistics) 95% of its total foreign exchange revenue is generated by oil exports and that PDVSA’s total revenue accounted for around 37% of GDP in 2016 (using 2016 GDP estimates by Torino Capital and comparing them with PDVSA’s 2016 published financial results). All actions taken by the government, however, seem to further hinder any possibility of recovery.

“PDVSA has failed to offset the production decline of its traditional oil producing areas”

The decrease in production is a natural occurrence because oilfields become depleted. In order to offset this natural decline it is important to apply effective reservoir management techniques and invest in technologies for maximising recovery. On the other hand, companies should constantly develop new fields so as to ensure a stable total production. This is not what is happening in PDVSA. The company has failed to offset the production decline of its traditional oil producing areas. Such a decline is inevitable since they have been producing oil for over 100 years.

For the country that according to the International Energy Agency has the world’s largest oil reserves this should not be a major concern, given that the production loss can be quickly replaced by new fields. In the past years Venezuelan oil production has shifted from the traditional areas of the north-west to the centre-east where the Orinoco Oil Belt is located (the Faja as it is known in Venezuela), an area covering around 55,500 km². According to PDVSA’s 2008 operational report, oil production in the Faja accounted for 16% of total production that year and PDVSA’s 2016 operational reports show that it has grown to 50%.

In its 2017 annual statistical review, BP estimates that by the end of 2016, 222 billion barrels could be recovered from the region in an economically feasible way using existing technology (as a reference, Saudi Arabia’s total oil reserves stand at 266 billion barrels). The oil in the area, however, is extra-heavy, with an API grade below 10 degrees, and its production and transport therefore require additional efforts. In order to ensure the flow of crude towards the processing plants it needs to be blended with diluents. Initially another Venezuelan crude of higher gravity from the traditional oil fields of the north-west was used (Mesa 30) although, given the natural decline of these fields, the company started using refined products as diluents, particularly naphtha.

In the past three years the Venezuelan refining system has experienced many difficulties, largely related to ageing infrastructure and lack of investment, resulting in a dramatic drop in output. This forced PDVSA to start importing naphtha, and on some particular occasions light crudes, so as to keep the necessary flow of diluents for transporting oil from the Faja. These diluents should, theoretically, be recovered after treating the extra-heavy oil in the upgrading facilities and then sent back to the producing fields so as to maintain a constant flow. The upgrading capacity, however, has not increased at the same pace as the production of this extra-heavy oil, a large part of the production of the Faja is therefore exported with the diluents, as blended crude (naphtha with extra-heavy oil).

The fact that a large part of PDVSA’s production is tied to debt repayments, in addition to the scarcity of foreign currency due to the country’s extremely restrictive exchange control have given rise to an important cash flow problem for the company. This has in turn affected its capacity to import diluents in the required quantities to continue increasing oil production in the Faja to the levels needed to make up for the decrease in the traditional areas.

The Faja, on the other hand, is an inhospitable region, far from the country’s traditional oil centres and therefore lacking the necessary infrastructure to effectively operate the oil fields. Each new development requires hundreds of kilometres of different pipelines (for water, diluents, crude and natural gas) to allow the flow between the oil field and the processing plants. New roads are needed to link urban centres with the fields. This entails enormous investments, time and planning.

Most significant, however, is the need to have qualified personnel for each phase of the development. Unfortunately, PDVSA’s working conditions, where an engineer is paid a monthly salary equivalent to US$20, together with Venezuela’s deep social crisis have forced many qualified workers to leave the country. This, combined with the prioritising of political proselytism over technical qualifications, explains the general demoralisation of the majority of PDVSA’s employees. A few days after being appointed PDVSA’s new CEO, Brigadier General Manuel Quevedo publicly encouraged the workforce to engage in bullying and persecuting anyone not demonstrating unconditional support for President Maduro.

“All managerial posts, including the Board of Directors, have been assigned to people identified with President Maduro, regardless of their qualifications or experience”

All managerial posts, including the Board of Directors, have been assigned to people identified with President Maduro, regardless of their qualifications or experience in the oil industry. Nelson Martínez was the last high executive who had the necessary technical qualifications to solve the company’s serious internal problems, but he was ousted in November. During his short time in office he had to bear constant political attacks that did not allow him to devote himself to running the company. Additionally, the government imposed upon him a military executive vice-president, a few vice-presidents and an executive board with no knowledge of the oil industry, who reported directly to President Maduro and who constantly overruled any of his decisions.

In this very complicated context, it is impossible to develop the oil fields that might offset the natural production decline without the support of operating and financial partners. PDVSA’s partners who are still in Venezuela, however, have complained that they are not allowed to participate in the decision-making processes and that political judgement prevails over operating decisions. In addition, PDVSA has had significant delays in payment in the past years and many have opted to terminate the relationship. With regards to possible financial support, the recent sanctions imposed by the US, combined with PDVSA’s default on its international commitments, have destroyed the company’s credit rating and thus increased the cost of financing to unmanageable levels.

Figure 2. PDVSA’s main challenges

For all these reasons, the decline in total Venezuelan oil production has been unavoidable. Unfortunately, it seems that the trend will not only not be reverted in the short term but will worsen further. A few weeks ago, President Maduro launched a series of strong attacks against the company, claiming that PDVSA was responsible for the country’s current economic crisis. Using the attorney general, appointed personally by him, the government has presented dubious indictments and illegally detained technical executives of PDVSA. Those arrested have been accused on public television, with no right to legitimate defence and with no access to the prosecution files; furthermore, they have been isolated and have allowed no contact with their families. The workforce is demoralised and scared of political persecution, something that has been aggravated by the company’s militarisation, as it is now filled with uniformed military personnel and members of the National Guard who are close to the new CEO.

Given this context in which it is difficult to imagine production being restored, the stabilisation of oil prices might afford new opportunities to PDVSA. But in order to take advantage of the new situation it would vital for the company to focus on restoring the morale and technical capacity of its workforce, a necessary first step to address all other issues.

Asier Achutegui
Independent consultant

]]>