LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Tuesday, June 9, 2020
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LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Tuesday, June 9, 2020 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group ECONOMIC Devry Boughner Vorwerk What Will the Honduras Begins CEO, DevryBV Sustainable Strategies to Gradually Joyce Chang Global Head of Research, Opposition’s Win Reopen Economy JPMorgan Chase & Co. Honduras’ government started Paula Cifuentes to gradually reopen its economy, Director of Economic & Fiscal Affairs, Mean for Suriname? which has been largely shuttered Latin America & Canada, Philip Morris International for three months due to lock- Marlene Fernández downs meant to curb the spread Corporate Vice President for of the novel coronavirus. Government Relations, Page 2 Arcos Dorados Peter Hakim President Emeritus, BUSINESS Inter-American Dialogue Donna Hrinak Argentine Gov’t President, Boeing Latin America to Take Control Jon E. Huenemann Former Corporate and of Vicentin Government Senior Executive Argentina’s government will take James R. Jones control of bankrupt soy-crushing Chairman, company Vicentin in order to save Monarch Global Strategies In Suriname’s May 25 general election, the country’s opposition defeated longtime President jobs and protect the country’s Craig A. Kelly Dési Bouterse, according to preliminary results. // File Photo: Government of Suriname. Director, Americas International food-exporting sector, President Gov’t Relations, Exxon Mobil Alberto Fernández announced in a John Maisto Suriname’s opposition won the country’s May 25 general televised address. Director, U.S. Education elections, a result that the country’s electoral authorities Page 3 Finance Group announced last Thursday, a week and a half after the vote. Nicolás Mariscal Chairman, Q The Caribbean Community, or Caricom, has said the election POLITICAL Grupo Marhnos appears to have been free and fair. However, the party of longtime Thomas F. McLarty III Opposition Eyes Chairman, President Dési Bouterse, who has been seeking re-election, has called Win in Guyana McLarty Associates for a recount in some areas. How peaceful and orderly will the transi- Preliminary data from Guyana’s Carlos Paz-Soldan Partner, tion be if the opposition is confirmed to have won? Is opposition leader elections commission shows DTB Associates, LLP Chandrikapersad “Chan” Santokhi a shoo-in for the National Assembly that opposition candidate Irfaan Ali won the country’s March 2 Beatrice Rangel to choose as the country’s next leader? What policy changes can be Director, presidential election. However, the AMLA Consulting LLC expected with the opposition coming to power, and how will the country’s ruling coalition has rejected the Jaana Remes recount. Partner, economy and business climate be affected? McKinsey Global Institute Page 2 Ernesto Revilla Head of Latin American Ivelaw Lloyd Griffith, senior associate at the Center for Economics, Citi Strategic and International Studies: “Political winds of Gustavo Roosen Chairman of the Board, change blew gustily last week across South America’s sole Envases Venezolanos Dutch-speaking republic, ending Dési Bouterse’s decade-long Andrés Rozental A legitimate rule and setting the stage for the advent of Chandrikapersad President, Rozental & Asociados ‘Chan’ Santokhi’s as president. Notwithstanding Bouterse’s efforts to Shelly Shetty secure a recount and his desperation to avoid imprisonment for the 1982 Managing Director, Sovereigns Fitch Ratings murders, it would be politically inexpedient for him to try to cling to pow- er. His rulership would be ineffectual, his Venezuelan comrades would be unable to aid him as they are themselves mired in multiple difficulties and resisting the handover would wreck his legacy irreparably. Thus, I Ali // File Photo: People’s Progres- expect him to demit office and facilitate the transition. Winds of change sive Party. Continued on page 2 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Tuesday, June 9, 2020 POLITICAL NEWS ruling coalition has said contained no votes for NEWS BRIEFS its candidates, the AP reported. The ruling co- Opposition Eyes Win alition wants those disputed votes invalidated. Honduras Begins Gradual The opposition has rejected the allegations of Reopening of Economy in Guyana, Ruling fraud and says Ali, a former housing minister, should be sworn in while the courts resolve the Following Lockdowns Party Rejects Recount allegations of irregularities. [Editor’s note: See Honduras on Monday began the gradual Q&A on Guyana’s election in the April 8 issue of reopening of its economy after nearly three A preliminary report from Guyana’s elections the Advisor.] months of paralysis due to the coronavirus commission shows that opposition candidate pandemic, even as some doctors warned that Irfaan Ali won the country’s March 2 presi- the health care system may reach capacity, dential election, but the ruling coalition has ECONOMIC NEWS Reuters reported. “The economy could not stay rejected the recount. Initial data shows that closed any longer,” President Juan Orlando Ali’s People’s Progressive Party, or PPP, won Mexico Cannot Make Hernández said. Nearly 500,000 jobs have enough votes in the balloting more than three been lost or suspended during the quarantine, months ago to win 33 seats in the 65-seat Additional Oil Output according to the Honduran Private Enterprise National Assembly, Reuters reported Monday. Council. The central bank expects a contrac- President David Granger’s APNU+AFC coalition Cuts: López Obrador tion of between 2.9 percent and 3.9 percent secured enough votes to win 31 seats in the this year. legislature, according to the preliminary data. Mexico cannot make more cuts to its oil The country’s elections commission has not production beyond those to which it agreed yet announced official results. On Monday, in April during a meeting of the OPEC+ group Wells Fargo Reportedly Guyana’s ruling coalition accused the PPP of of oil producing nations, President Andrés electoral fraud and said it would seek court Manuel López Obrador said last Friday, Reuters Pulling Payments Service action to prevent the elections commission reported. The Organization of the Petroleum Zelle Out of Venezuela from officially naming a winner, the Associated Exporting Nations and its allies two months Wells Fargo has reportedly told clients in Ven- Press reported. On Sunday, the commission ago agreed to lower oil supply by 9.7 million ezuela that it will no longer support payments finished its recount of approximately 400,000 barrels per day in May and June in order to sup- service Zelle there, one of the most popular votes, including about 30 boxes containing port oil prices. The move was in reaction to the services in the Andean nation to send and disputed votes from coastal villages that the plunge in oil prices that occurred earlier this receive U.S. dollars, Decrypt reported Monday. FEATURED Q&A / Continued from page 1 More than 60 percent of payments in Venezu- ela’s urban centers are made with dollars, and tend to highlight challenges and foreshadow tion of governmental ineptitude. Finally, the about 12 percent of these payments used Zelle, opportunities to address them. Suriname country’s economic woes and the recent according to Asdrúbal Oliveros, director of Ven- is no different. I envisage four opportu- offshore oil finds obligate the new leaders to ezuelan economic consultancy Ecoanalítica. nities. First, although Bouterse assumed take the opportunity to bring fresh political Wells Fargo has not made a formal announce- the presidency democratically in 2010, a economy lenses to the country’s economic ment, and it did not reply to Decrypt’s request credibility-legality cloud hovered over the management.” for comment. nation because of his July 1999 conviction for drug trafficking by a Dutch court. The Andrea Ewart, CEO of Develop- clouds now will evaporate. Second is the op- TradeLaw: “The undemocratic portunity for the wheels of justice in relation means by which Bouterse held Petrobras Exports Record to Bouterse’s conviction for the 15 murders A power in the 1980s raises Amount of Fuel Oil in May in 1982 to turn fully. Imprisonment now is questions about his willingness to hand over both plausible and probable. Third, there is power in 2020. A similar situation existed in Petrobras in May broke its record for monthly an opportunity to restore the efficiency and 1991 when the Bouterse-led military allowed fuel exports, Reuters reported last Friday. The credibility of the government, which suffered the electoral process to resume. Since then, Brazilian state-run oil company exported 1.11 considerable damage in recent years, last the Bouterse-led National Democratic Party million metric tons of fuel oil last month, beat- February’s misplacement by the central bank (NDP) has participated in and respected ing the all-time record that it set in February by of $100 million being the latest manifesta- the electoral process. Bouterse has held 10 percent. Petrobras has reportedly prioritized shipments of bunker fuel, which is used in Continued on page 4 ships, to China. COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Tuesday, June 9, 2020 year. The output reductions are to taper down to 7.7 million barrels per day between July and THE DIALOGUE CONTINUES December. Under the agreement reached in April, Mexico’s government agreed to lower its production by 100,000 barrels per day in May Will a Global Deal on Digital and June, despite pressure that it cut daily production by 400,000 barrels. At the time, Taxes Help Latin America? Mexican officials said the United States would A long-debated blueprint from with a moment of weak regional economic cut its own production to make up the differ- the Organization for Economic growth has only exacerbated the necessity ence on Mexico’s behalf. López Obrador told Cooperation and Development, of higher tax revenue for Latin America’s reporters last Friday that countries that have Q or OECD, to standardize legis- governments.