Aerich Decat, Political Analyst At

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Friday, November 13, 2020

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk How Significant Are Thousands March CEO, DevryBV Sustainable Strategies to Protest Ouster Joyce Chang Global Head of Research, the Charges Facing of Peru’s President JPMorgan Chase & Co. Thousands of people took to the Paula Cifuentes streets of Lima and other cities Director of Economic & Fiscal Affairs, Flávio Bolsonaro? in Peru to protest Congress’ Latin America & Canada, Philip Morris International swift ouster earlier this week of Marlene Fernández President Martín Vizcarra. Corporate Vice President for Page 2 Government Relations, Arcos Dorados (McDonald’s) Peter Hakim ECONOMIC President Emeritus, Inter-American Dialogue Mexico’s President Donna Hrinak to Submit Bill on Senior VP, Corporate Affairs, Royal Caribbean Group Job Outsourcing Jon E. Huenemann Mexican President Andrés Manuel Former Corporate and López Obrador said he would Government Senior Executive Brazilian Senator Flávio Bolsonaro (pictured), President Jair Bolsonaro’s son, is facing several submit legislation to prohibit the James R. Jones criminal charges. // File Photo: Brazilian Senate. Chairman, subcontracting or outsourcing of Monarch Global Strategies jobs by private companies without government authorization. Craig A. Kelly Brazilian prosecutors have accused Senator Flávio Bolson- Senior Director, Americas Page 3 Int’l Gov’t Relations, Exxon Mobil aro, a son of President Jair Bolsonaro, on charges including John Maisto embezzlement, money laundering and running a criminal Director, U.S. Education POLITICAL Finance Group Q organization. Flávio Bolsonaro, who has denied wrongdoing, Opposition Nicolás Mariscal has been under investigation in connection with an alleged scheme to Chairman, Trounces Ruling Grupo Marhnos siphon off taxpayer money when he was a state deputy in Rio de Janeiro. Thomas F. McLarty III What is at the root of the case? Where does public opinion stand on the Party in Belize Chairman, The opposition People’s United McLarty Associates accusations? To what extent will the scandal weaken the president’s Party overwhelmingly defeated political standing and ability to govern? Beatrice Rangel the ruling United Democratic Party Director, AMLA Consulting LLC in Belize’s general election. The People’s United Party leader, John- Jaana Remes Felipe Moura Brasil, columnist for Crusoé magazine and an- Partner, ny Briceño, was sworn in as prime McKinsey Global Institute chorman of the Papo Antagonista radio show: “In a scheme minister, replacing longtime Prime Ernesto Revilla known as ‘rachadinha,’ Flávio Bolsonaro allegedly diverted Minister Dean Barrow. Head of Latin American wages of his legislative aides when he was a state deputy in Page 2 Economics, Citi A Gustavo Roosen Rio de Janeiro. Instead of saving taxpayers’ money, he is accused of ap- Chairman of the Board, pointing people in his office who did not work. They allegedly passed on Envases Venezolanos Andrés Rozental most of the remuneration to financial operator Fabrício Queiroz, a friend President, Rozental & of Jair Bolsonaro. One of them, Luiza Paes, confessed that she trans- Asociados ferred 90 percent of her salary to Queiroz for years, without ever working. Shelly Shetty Managing Director, Sovereigns Flávio was elected to the Senate in 2018, the same year his father won Fitch Ratings the presidency. Now we know that Queiroz transferred money to four people that worked in Flávio’s campaign staff. Queiroz also paid Flávio’s expenses, such as school fees for his daughters and health insurance. Jair Bolsonaro was elected on an anti-corruption platform six months after former President Lula was arrested as part of Operation Car Wash. However, when the Queiroz case came to light after the election, Bolsona- Briceño // File Photo: Belizean Government. Continued on page 3

POLITICAL NEWS place as scheduled. Merino is Peru’s third NEWS BRIEFS president in less than three years. In March Thousands March 2018, Vizcarra replaced then-President Pedro One of First Caribbean Pablo Kuczynski, who resigned amid corruption Cruises Ends Early After to Protest Vizcarra’s allegations after less than two years in office. Every Peruvian president since 1985 except for Passengers Test Positive Ouster in Peru one has either been impeached, imprisoned or One of the first cruise ships operating in the sought in a criminal investigation, Bloomberg Caribbean since the beginning of the pan- Thousands of people took to the streets of News reported. demic has ended its trip early after at least Lima and other cities in Peru on Thursday to five passengers tested positive for the novel protest the abrupt ouster earlier in the week of Opposition Trounces coronavirus, officials said Thursday, the Asso- President Martín Vizcarra, La República report- ciated Press reported. The SeaDream I, which ed. Thursday’s protests marked the third day of Ruling Party in Belize departed from Barbados last Saturday and had demonstrations and came as the new interim made stops in St. Vincent and the Grenadines, president, Manuel Merino, named members of Assembly Vote is carrying 66 crew members and more than his cabinet. Analysts said Thursday night’s pro- 50 passengers, most of them from the United tests were the country’s largest in two decades, The opposition People’s United Party, or States, the AP reported, citing a journalist Bloomberg News reported. “These are difficult PUP, trounced the ruling United Democratic aboard the ship. The cruise is operated by the days ahead for the interim government,” Party, or UDP, in Belize’s general election, Norway-based SeaDream Yacht Club. Lima-based political analyst Carlos Meléndez the country’s election authorities announced told the news service. “The government doesn’t Thursday, the Associated Press reported. have control of the streets, and it’s losing on The PUP won an overwhelming 26 of the Pfizer, Brazil in Talks for the international front.” In the northern Peruvi- 31 seats in the House of Representatives, an city of Chimbote, protesters marched with a propelling the party’s leader, Johnny Briceño, Supplying Covid Vaccine large Peruvian flag and carried signs blasting to the position of prime minister. Briceño was in First Quarter of 2021 Congress and the government, video broadcast sworn in Thursday, replacing the UDP’s Dean Pfizer is in talks with Brazil’s government to by the Canal N television network showed. One Barrow, who had been Belize’s prime minister supply the country with its potential Covid-19 sign read, “This isn’t for Vizcarra, this is for my since 2008. Barrow is retiring from politics. vaccine in the first quarter of next year, the country.” Another read, “Merino isn’t my pres- Wednesday’s election happened against the pharmaceutical company’s Brazil head said ident.” Merino, who had been serving as the backdrop of rising Covid-19 infections in the Thursday, Reuters reported. “We are working head of Peru’s Congress, was sworn in Tuesday Central American nation as well as a stagnant strongly with the Brazilian government to try as president, a day after Vizcarra’s ouster. In economy. Turnout was 81 percent, according to to fast-track the availability [of the vaccine] in removing Vizcarra from office, Congress over- the Belize Elections and Boundaries Depart- Brazil as fast as possible,” Carlos Murillo said whelmingly declared him morally unfit to be ment. A representative who has served seven during an online event. Pfizer said earlier this president, citing his handling of the Covid-19 terms, Briceño became only the fifth person to week that the vaccine that it is developing with pandemic, which has hit Peru hard. He also be Belize’s prime minister since the country’s Germany’s BioNTech appears to be more than was accused of taking more than $630,000 in independence in 1981. He is also the first 90 percent effective, according to data from bribes in exchange for construction contracts prime minister from outside Belize City, the AP late-stage trials. during his time as a provincial governor. reported. He represents Orange Walk Central, Vizcarra has denied wrongdoing. Vizcarra has which is north of Belize City. In his inaugural had high approval ratings, but he has been at address in Belmopan, Briceño urged unity war with Congress. He dissolved Congress and said he would govern for all Belizeans. “I Copa Airlines to Resume last year, but his battles with the newly formed assure everyone that we are going to be an Flights to Venezuela legislature have continued amid his push for open, accountable and accessible government Panama’s Copa Airlines announced Thursday anti-corruption reforms. In a recent Ipsos poll, for the people of Belize,” he said. He also that it would resume flights to Venezuela on 78 percent of respondents were opposed to called for people to continue social-distancing Nov. 24, nearly eight months after suspending Vizcarra’s removal from office, and 54 percent measures and wearing face masks to prevent services to the Andean nation due to measures approved of his government, Bloomberg News the spread of Covid-19. “Together we will intended to curtail the spread of Covid-19, Re- reported. Just 22 percent in the poll approved fight this pandemic,” he said. Briceño has also uters reported. The carrier will initially operate of Merino, who has said the April 11 presi- vowed to crack down on corruption, strengthen three flights a week on Tuesday, Thursday and dential and congressional election will take the country’s agriculture industry and revive Sunday from Panama to Caracas.

COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Friday, November 13, 2020 tourism, which has been hit hard by the pan- FEATURED Q&A / Continued from page 1 demic, Bloomberg News reported. The country of 400,000 people also has among the world’s ro did the opposite of what he promised. The federal police, creating new legal problems highest debt loads. Its economy is expected to president softened the penal legislation, ap- for himself. In January, two events will am- contract 16 percent this year, the sharpest drop pointed enemies of the Car Wash task force plify the negative effect of this scandal on since at least 1980, Bloomberg News reported, to control bodies and interfered with the Bolsonaro’s political standing, as well as on citing the International Monetary Fund. Late Federal Police. Sérgio Moro, who had agreed his ability to govern. First, in Rio de Janeiro, Wednesday, after the polls closed and it be- to be a minister in hopes of tightening up came apparent that the PUP had taken a strong criminal law, left Bolsonaro’s government, lead as ballots were being counted, UDP leader alleging interference and the abandonment Evidence to support Patrick Faber called Briceño to congratulate of the anti-corruption agenda. All this, added these charges him. On Wednesday night, Faber delivered a to a downplaying of the pandemic, reduced is compelling.” televised address, calling for unity. “While there Jair Bolsonaro’s popularity in state capitals. — Jessica A.J. Rich were winners and losers, the democracy that Still, he maintains strength with beneficiaries we have continued to enjoy throughout the life of the income transfer programs that he of this great young nation, is by far the greatest criticized as ‘vote-buying’ during the Lula winner today,” he said. government. Despite growing similarities, the court will decide whether to accept the the Bolsonaro family and its militants still prosecution’s charges. Second, in the United portray themselves as a right-wing solution States, Donald Trump will leave the White ECONOMIC NEWS against the Workers’ Party’s return to power, House, taking with him a key source of inter- betting that nothing compares to the magni- national support for Bolsonarismo. Should tude of left-wing corruption. But Brazilians the prosecution move forward in 2021, Mexico’s President are beginning to realize that they do not Bolsonaro’s political survival will depend to Submit Legislation need to restrict their choices to those who even more than it did before on his ability to steal less among left- and right-wing popu- cultivate allies in the legislature and in the on Job Outsourcing lists. In this sense, the possibility of Moro’s judiciary. In the legislature, Bolsonaro will candidacy in 2022 terrifies both sides.” need to court supporters from within the Mexican President Andrés Manuel López Obra- ‘Centrão’—the broad coalition of center-right dor on Thursday said he will submit legislation Jessica A.J. Rich, assistant politicians. In the judiciary, he will need to to Congress that would prohibit subcontracting professor in the Department of further appoint ‘friendly’ judges.” or outsourcing of jobs by private companies Political Science at Marquette in the country without government authoriza- A University: “The charges against Erich Decat, political analyst at tion, the Associated Press reported. The bill Flávio Bolsonaro center on a kickback XP Investments: “The prosecu- would allow subcontract workers to provide scheme, known in Brazil as a ‘rachadinha,’ in tors allege that Flávio Bolsonaro “specialized services or carry out specialized which he is accused of hiring fake employ- A ran a criminal organization when projects that are not part of a company’s line ees as legislative aides who would then he was a member of the Rio de Janeiro of business” with Labor Department approval. allegedly give him back 90 percent of their State Assembly (between 2007 and 2018). Additionally, personnel, staffing or temp firms salaries. Evidence to support these charges Prosecutors allege that some ghost cabinet can help private companies recruit, select or is compelling. One of his former aides gave staff members repaid most of their salaries train workers, but cannot be listed as their em- a sworn statement attesting to her involve- to Flávio’s security chief, Fabrício Queiroz. ployer, the AP reported. Labor Secretary Luisa ment in the alleged scheme, which was then The investigations have also revealed that María Alcalde said outsourcing hurts workers published by newspaper O Globo. This scan- Queiroz was close to the Bolsonaro family, by allowing companies to avoid granting dal seriously threatens Jair Bolsonaro’s po- not just Flávio. Queiroz has been under benefits to subcontracted employees, Milenio litical standing because it cuts to the heart house arrest since August. During the reported. She mentioned other practices such of his political identity as an anti-corruption investigation, prosecutors discovered 483 as companies firing workers before Christmas campaigner. Bolsonaro clearly views this bank deposits in Queiroz’s account from 13 and rehiring them early in the year to avoid scandal surrounding his family as a major former cabinet employees. The deposits to- paying year-end bonuses, the AP reported. political threat, highlighted by his desperate tal 2 million reais. The alleged scheme also Alcalde said the legislation’s provisions would attempts to obstruct the investigation—such involved a chocolate store owned by Flávio. be enforced by fines or tax-evasion charges. as when he tried to replace the head of the Prosecutors allege it was used to launder Continued on page 4

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue, Copyright © 2020 the money. Flávio denies any wrongdoing to be seriously implicated in these investi- and claims that he has been targeted by the gations seems to be very high; it would take Erik Brand opposition, which wants to hurt his father’s strong new evidence, which has failed to Publisher [email protected] administration. The special state court of Rio de Janeiro still has to decide whether Gene Kuleta Editor the lawsuit will go ahead, and there is no These charges against [email protected] deadline for this decision. Despite the head- the president’s son are Anastasia Chacón González lines and the allegations, this case hasn’t not a game changer.” Reporter & Associate Editor yet hit President Jair Bolsonaro’s approval — Silvio Cascione [email protected] rating, which is roughly 40 percent. Currently, the president’s popularity is armored by the

huge success of the emergency assistance, appear so far. Police investigations against Michael Shifter, President which the administration has granted to 67 the president’s inner circle will not stop, as Rebecca Bill Chavez, Nonresident Senior Fellow million Brazilians since the beginning of the judicial authorities in Brazil enjoy significant Sergio Bitar, Nonresident Senior Fellow pandemic.” autonomy, but the president’s chances of Joan Caivano, Senior Advisor being re-elected in 2022 will hinge much Michael Camilleri, Director, Rule of Law Program Silvio Cascione, director for more on how quickly the economy recovers Kevin Casas-Zamora, Nonresident Senior Fellow Brazil at Eurasia Group: “These from Covid-19. Bolsonaro’s main challenge Héctor Castro Vizcarra, Nonresident Senior Fellow charges against the president’s is to remove the massive fiscal stimulus Julia Dias Leite, Nonresident Senior Fellow A son are not a game changer. deployed this year without losing support Ariel Fiszbein, Director, Education Program Bolsonaro has managed to recover his from voters.” Peter Hakim, President Emeritus popularity, after taking a hit early in the pan- Nora Lustig, Nonresident Senior Fellow demic, and corruption allegations against The Advisor welcomes comments on its Q&A Margaret Myers, Director, Asia and his son and close allies are not changing section. Readers can write editor Gene Kuleta Latin America Program Manuel Orozco, Senior Fellow voter perception. The bar for the president at [email protected]. Xiaoyu Pu, Nonresident Senior Fellow Jeffrey Puryear, Senior Fellow Mateo Samper, Nonresident Senior Fellow Tamar Solnik, Director, Finance & Administration Lisa Viscidi, Director, Energy Program Denisse Yanovich, Director of Development, External Relations & Special Projects

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