LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Wednesday, July 21, 2021

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, July 21, 2021

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk What Is Behind Haiti Swears CEO, DevryBV Sustainable Strategies Joyce Chang in Henry as Global Head of Research, JPMorgan Chase & Co. Venezuela’s Arrest Prime Minister Paula Cifuentes Ariel Henry took office as Haiti’s Director of Economic & Fiscal Affairs, prime minister, replacing Claude Latin America & Canada, of Freddy Guevara? Joseph who had led the country Philip Morris International following the July 7 assassination Marlene Fernández Corporate Vice President for of President Jovenel Moïse. Henry Government Relations, vowed to work for unity. Arcos Dorados (McDonald’s) Page 2 Peter Hakim President Emeritus, Inter-American Dialogue BUSINESS Donna Hrinak Senior VP, Corporate Affairs, U.S. Extends Royal Caribbean Group Measure to Shield Jon E. Huenemann Council Member, Citgo’s Assets GLG Inc. The U.S. government on Tuesday James R. Jones extended a measure that protects Chairman, Monarch Global Strategies the assets of Venezuela-owned Venezuelan agents earlier this month stopped opposition politician Freddy Guevara as he drove U.S.-based refiner Citgo from Craig A. Kelly along a highway and arrested him. // File Photo: Facebook page of Freddy Guevara. Senior Director, Americas bondholders who want to collect Int’l Gov’t Relations, Exxon Mobil on unpaid debts from parent Barbara Kotschwar Venezuelan agents on July 12 arrested opposition politi- company PDVSA. Executive Director, Visa Economic cian Freddy Guevara, a close ally of opposition leader Juan Page 3 Empowerment Institute Guaidó. Prosecutors accused Guevara of terrorism and John Maisto Director, U.S. Education Q treason on the same day that the administration of U.S. ECONOMIC Finance Group President Joe Biden relaxed some sanctions on Venezuela by allow- Nicolás Mariscal Colombia’s Duque Chairman, ing companies to export propane to the Andean nation. What are the Presents Tax Plan Grupo Marhnos reasons behind Venezuela’s arrest of Guevara? What is the future of Thomas F. McLarty III to Lawmakers U.S. sanctions on Venezuela, and how will Guevara’s arrest influence Chairman, Colombian President Iván Duque McLarty Associates the Biden administration’s Venezuela policy? How will the arrest affect presented a nearly $4 billion tax Beatrice Rangel reform plan to Congress. The re- Director, upcoming talks between the opposition and President Nicolás Maduro’s AMLA Consulting LLC government, which are planned for next month in Mexico? What results form is significantly smaller than a proposal that sparked deadly Jaana Remes Partner, are likely to come out of the talks? protests in April. McKinsey Global Institute Page 2 Ernesto Revilla Head of Latin American Gustavo Roosen, member of the Advisor board and president Economics, Citi of IESA in Caracas: “Following the Cuban Marxist playbook, Gustavo Roosen President, the arrest of Freddy Guevara and the warrants for the arrests IESA of several leaders of the party closest to Juan Guaidó seek Andrés Rozental A to smear Voluntad Popular by connecting it with the criminal acts of President, Rozental & Asociados organized gangs active in the neighborhoods of Caracas. This arrest is Shelly Shetty intended to distance Voluntad Popular from the opposition’s unity in the Managing Director, Sovereigns Fitch Ratings negotiations under the guidance of Norway, which will begin shortly in Mexico. The Biden administration has said it will only reconsider U.S. sanctions if it sees significant progress toward a democratic electoral solution, as well as the release of political prisoners and a halt to the Duque // File Photo: Colombian crackdown on NGOs. The Maduro regime is aware of the low intention of Government. Continued on page 2

POLITICAL NEWS the country’s challenges. “All Haitians have to NEWS BRIEFS unite to fix the crisis,” he said, The Wall Street Henry Sworn in as Journal reported. “I’m not a magician.” Henry Brazil’s Bolsonaro Vows also thanked “sister nations,” though he didn’t to Veto Electoral Fund Haiti Prime Minister, identify them, for working with the Caribbean nation in its investigation following Moïse’s Far-right Brazilian President Jair Bolsonaro Replacing Joseph killing on July 7. [Editor’s note: See related Q&A said on Tuesday that he would veto a proposed in the July 9 issue of the Advisor.] 5.7 billion real ($1.09 billion) taxpayer-paid Ariel Henry was sworn in Tuesday as Haiti’s electoral fund, Reuters reported. The fund prime minister, replacing Claude Joseph who mechanism was set up in 2017 in the wake of had been leading the country following the ECONOMIC NEWS graft scandals and a ban on corporate dona- assassination earlier this month of President tions to campaigns. Bolsonaro’s veto stance Jovenel Moïse, the Associated Press reported. is likely to place him at odds with centrist Moïse had tapped Henry, a neurosurgeon, as Colombia’s Duque lawmakers whose congressional support has prime minister the week of the assassination, Presents Tax Plan protected him from impeachment proceedings but at the time, Henry had not yet been sworn the president faces, according to Reuters. in. Henry called for unity and vowed to meet to Lawmakers with different sectors of the country in order to build consensus. “The task that awaits us Colombian President Iván Duque formally U.S. Bans Honduras’ is complex and difficult,” said Henry, the AP presented a $3.97 billion tax reform bill to Lobo From Entering reported. “I’m from a school that believes in Congress on Tuesday, the country’s inde- dialogue.” The new prime minister also has pendence day holiday, Reuters reported. The Over Graft Allegations promised to establish a provisional consensus measure would raise 15.2 trillion pesos per The U.S. State Department on Tuesday banned government in oder to lead the country until year for state coffers, which is significantly former Honduran President Porfirio “Pepe” it holds elections. Henry said he would help less than the 23.4 trillion pesos the govern- Lobo, his wife and several of their children re-establish security, order and confidence in ment had sought in an April proposal that was from entering the United States over corrup- the government in addition to fighting corrup- later withdrawn in the wake of deadly protests tion allegations. While in office from 2010 to tion, spurring the economy, creating a credible and national strikes. Of the total of 15.2 billion 2014, Lobo accepted bribes from a drug gang elections system and making Covid-19 vac- pesos, businesses will contribute 69 percent in exchange for political favors, Secretary of cines available to all Haitians, the wire service of the taxes collected, while 31 percent will State Antony Blinken alleged in a statement. reported. Henry added that he was relying on come from new cuts in public spending, as The former president has repeatedly denied Haitians to work together in order to confront well as a crackdown against tax evasion, El wrongdoing, Agence France-Presse reported. Former First Lady Rosa Lobo was sentenced to FEATURED Q&A / Continued from page 1 58 years in prison in 2019, but she was freed within months due to judicial errors and is the people to participate in the November re- the country has the resources to do so with awaiting a retrial. gional elections and aspires to comfortably the significant losses that entails.” win most of the governorships in order to be better placed to negotiate next year for a Stephen Johnson, former U.S. general electoral solution for 2024. Maduro deputy assistant secretary of Three Million Covid-19 believes he can handle the economic deba- defense for Western Hemi- Vaccine Doses From U.S. cle and its humanitarian consequences as A sphere affairs (2007-2009): Arrive in Guatemala he has done so far. On the subject of lifting “We’ve seen this movie before. The regime’s sanctions against Venezuela, the reality is actions in detaining and beating up National A donation by the United States of three million that Maduro and those around him are only Assembly Deputy Freddy Guevara were, doses of Moderna’s Covid-19 vaccine arrived interested in personal ones. The lifting of like many in the past, strategic, theatrical Tuesday in Guatemala, the Associated Press sanctions on propane would allow the gov- and intended to serve multiple ends. One reported. The shipment brought to 4.5 million ernment to import domestic gas at interna- might have been to test where the Biden the number of vaccine doses that the United tional prices to sell to the population through administration’s hard line might be—with States has provided so far to Guatemala. The a consumer subsidy. It remains to be seen if no result (at least not yet). Another might White House said Tuesday that the United States would also donate additional doses to Continued on page 4 Honduras and El Salvador, CNN reported.

Tiempo reported. Wary of inciting more riots, the finance ministry has emphasized the new THE DIALOGUE CONTINUES bill will not affect most taxpayers, according to Reuters. However, thousands of protesters joined in marches in the Andean nation’s main Has Latin America Become a Foreign cities Tuesday while Duque outlined the bill Policy Priority for the United States? to Congress, the Associated Press reported. Protesters said the new plan does not do Legislators in the United States highlighted by Representatives Sires, Castro, enough to boost spending on education and have been raising attention Salazar and others. Latino members of job creation in Colombia, where the economy around political turmoil in Latin Congress in particular are recognizing and contracted 7 percent last year and pushed an Q America, helping widen some highlighting the direct connection between additional 3 million people into poverty, accord- of the U.S. Congress’ foreign policy focus economic and social prosperity at home ing to the national statistics department data, to include more issues affecting the region, in the United States and the stability and the AP reported. Axios reported this month. For example, advancement of our neighbors throughout Reps. Albio Sires (D-N.J.) and Joaquin the hemisphere, and their leadership will be Castro (D-Tex.) recently called on the Biden critical to the development and success of BUSINESS NEWS administration to monitor political violence the administration’s hemispheric strategy. during protests in Colombia, while U.S. The political violence in Colombia should Representative María Elvira Salazar (R-Fla.) serve as a reminder that an effective U.S. Extends Measure introduced a bill to review Nicaragua’s free regional strategy must not be limited to the Protecting Citgo trade status amid a government crackdown Northern Triangle, and Ortega’s crackdown against opponents. To what extent has there on political opponents reminds us that a From Bondholders been a significant broadening of inter- Central America strategy must go beyond ests involving Latin America by the U.S. Guatemala, Honduras and El Salvador, to The U.S. government on Tuesday extended Congress, and what is driving this momen- include Nicaragua. The Latin Americanists a measure that protects Citgo’s assets from tum? What role are U.S. legislators playing who serve in the Biden administration bondholders who are seeking to collect on in positioning Latin America as a foreign understand the shortcomings of a strategy unpaid debts from Venezuelan state-owned oil policy priority, and which issues have taken that focuses solely on migration and illegal company PDVSA, which owns the U.S.-based center-stage? Is congressional pressure drugs. In addition to democracy and the rule refiner, Reuters reported. PDVSA’s 2020 bond, influencing the Biden administration’s strat- of law, I expect that the administration will has a majority stake in Citgo Holding, the refin- egy toward the region? prioritize the challenges posed by poverty er’s parent company, as collateral. However, the and inequality, climate change, citizen holders of that bond will be unable to exercise Rebecca Bill Chavez, non- insecurity and corruption. Among the policy rights to that stake before Oct. 21, according to resident senior fellow at the areas that should be in serious consider- a license issued by the U.S. Treasury’s Office of Inter-American Dialogue and ation are infrastructure development, encour- Foreign Assets Control, or OFAC. The admin- A former U.S. deputy assis- agement of nearshoring, skills development istration of then-U.S. President Donald Trump tant secretary of defense for Western and education throughout the region, public issued the measure that protects Citgo’s assets Hemisphere affairs: “We should welcome health improvement and institution building.” after it recognized Venezuelan opposition Congress’ attention to Latin America, a leader Juan Guaidó as the South American region that is far too often overlooked when country’s legitimate president. As part of its it comes to broader U.S. foreign policy. EDITOR’S NOTE: The comment above is a efforts to unseat Venezuelan President Nicolás I’m looking forward to the release of the continuation of the Q&A published in Mon- Maduro, the United States had blacklisted Biden administration’s Western Hemisphere day’s issue of the Advisor. PDVSA and transferred control of Citgo to strategy, which I anticipate will reflect the Guaidó’s government. In a posting on Twitter, concerns about democratic governance Guaidó’s ambassador to the United States, Carlos Vecchio, thanked the administration validity of PDVSA’s 2020 bond in U.S. courts, opposition’s appeal. Despite the initial court of U.S. President Joe Biden for extending the Reuters reported. An initial court ruling upheld ruling last year, the U.S. government has “sig- measure that protects the Citgo assets. “It is the validity of the bond, but the opposition is naled a strong commitment to protect Citgo,” the correct decision in defense of the interests appealing. Last December, a court sided with Francisco Monaldi, a fellow in Latin America of Venezuelans,” Vecchio said in the tweet. the opposition in prohibiting creditors from energy policy at Rice University, told the Energy Allies of Guaidó are seeking to challenge the seizing shares of Citgo until the court hears the Advisor in a Q&A published last October.

FEATURED Q&A / Continued from page 2 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue ISSN 2163-7962 have been to further divide the opposition will intensify as the meetings in Mexico between those already open to participating approach. Nevertheless, international actors Erik Brand in November’s Potemkin elections and hard- involved broadly and directly in dialogue Publisher [email protected] core supporters of Juan Guaidó demanding efforts recognize that the status quo cannot fairness and rules. Clearly, it was intended continue. This includes the Biden adminis- Gene Kuleta Editor to intimidate those in Guaidó’s interim gov- [email protected] ernment planning to sit down with Chavistas Anastasia Chacón González in new talks facilitated by Norway and cow The urgency of an exit Reporter & Associate Editor them into accepting promises of good be- strategy from Venezu- [email protected] havior instead of meaningful change. Finally, ela’s crisis will prevail it was a warning to would-be protesters over responses to in- that state security can come after them too, dividual-level events.” Michael Shifter, President as in Cuba. Whether or not all that is still Rebecca Bill Chavez, Nonresident Senior Fellow — Julia Buxton relevant is another question with guerrillas Bruno Binetti, Nonresident Fellow and gangs beginning to challenge Maduro’s Sergio Bitar, Nonresident Senior Fellow span of control. Yet when push comes to tration. There have been many failed efforts Joan Caivano, Senior Advisor shove, the regime can call on Iranian and at dialogue in Venezuela. The assassination Santiago Cantón, Director, Peter D. Bell Russian assets to aid in a clampdown. The of Jovenel Moïse in Haiti and protests in Rule of Law Program fact that Guaidó’s government and demo- Cuba form a backdrop of particularly high Kevin Casas-Zamora, Nonresident Senior Fellow cratic opposition have survived this long tension going into a new round. The murky Julia Dias Leite, Nonresident Senior Fellow Ariel Fiszbein, Director, Education Program without any real means of applying pressure involvement of Miami-based Venezuelan and Sandra García Jaramillo, Nonresident Senior Fellow on their own is a miracle. But their friends in Colombian mercenaries in Haiti recalls the Selina Ho, Nonresident Senior Fellow the international democratic community—in- May 2020 ‘Operation Gideon’ in Venezuela. Edison Lanza, Nonresident Senior Fellow cluding the United States—must now sharply In that instance, the credibility of claims that Nora Lustig, Nonresident Senior Fellow ramp up efforts to disrupt Nicolás Maduro’s figures close to Guaidó paid $212 million for Margaret Myers, Director, Asia Program iron-fist approach in order to give Venezue- the aborted intervention were deflected. The Manuel Orozco, Senior Fellow la’s democrats a fighting chance.” charges against Guevara revisit alleged ne- Xiaoyu Pu, Nonresident Senior Fellow farious ties at a time when mercenary activi- Jeffrey Puryear, Senior Fellow Julia Buxton, British Acad- ty has been placed firmly in the international Tamar Solnik, Director, Finance & Administration emy Global Professor at the spotlight. Events in Haiti underscore concern Lisa Viscidi, Director, Energy Program University of Manchester: “Ex- that private military companies and other Denisse Yanovich, Director of Development perienced dialogue facilitators forms of externally orchestrated violence A Latin America Advisor is published every will not be derailed by Guevara’s arrest. The are an avenue of last political resort for business day, except for major U.S. holidays, urgency of an exit strategy from Venezu- frustrated regime change proponents around by the Inter-American Dialogue at ela’s crisis will prevail over responses to the world. The timing of this turbulence is 1155 15th Street NW, Suite 800 individual-level events. The arrest—and the significant and a reminder of the hostility in Washington, DC 20005 allegations if substantiated—will be read as some political quarters to the possibility of www.thedialogue.org a sign of weakness on the part of factions Biden easing sanctions.” Subscription inquiries are welcomed at [email protected] in both the Maduro and Guaidó camps that are opposed to compromise. Polarized The Advisor welcomes comments on its Q&A The opinions expressed by the members of the Board of Advisors and by guest commentators do not necessarily groups coincide around a mutual interest section. Readers can write editor Gene Kuleta represent those of the publisher. The analysis is the sole in derailing the talks, and these efforts at [email protected]. view of each commentator and does not necessarily represent the views of their respective employers or firms. 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