LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Monday, April 12, 2021

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, April 12, 2021

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Why Has Venezuela Partial Results Chief Corporate Affairs Officer, Grubhub Show Castillo Joyce Chang Global Head of Research, Launched a Border Leading in Peru’s JPMorgan Chase & Co. First Round Paula Cifuentes Director of Economic & Fiscal Affairs, Military Offensive? With 16 percent of ballots counted Latin America & Canada, in the first round of Peru’s presi- Philip Morris International dential race, far-left labor unionist Marlene Fernández Pedro Castillo was in the lead. It Corporate Vice President for is still unclear who he will face in Government Relations, Arcos Dorados (McDonald’s) the runoff. Page 2 Peter Hakim President Emeritus, Inter-American Dialogue BUSINESS Donna Hrinak Senior VP, Corporate Affairs, Royal Caribbean Group Argentina-Based Jon E. Huenemann Ualá Agrees to Council Member, GLG Inc. Buy Wilobank James R. Jones Venezuela has launched a military offensive in Apure state, along its border with Colombia. Argentine financial technology Chairman, Venezuelan soldiers preparing for deployment are pictured. // File Photo: @somos_ejercito company Ualá announced that Monarch Global Strategies via Twitter. it has agreed to buy digital bank Craig A. Kelly Some 5,000 Venezuelan refugees, many of them children, Wilobank. Senior Director, Americas Page 3 Int’l Gov’t Relations, Exxon Mobil have reportedly fled into Colombia in recent weeks follow- John Maisto ing the Venezuelan military’s offensive against Colombian Director, U.S. Education POLITICAL Finance Group Q illegal armed groups near the two countries’ border. Security Nicolás Mariscal experts have described the assault, which began with airstrikes in Ven- Lasso Elected Chairman, Grupo Marhnos ezuela’s Apure state on March 21, as Venezuela’s largest use of military President of Thomas F. McLarty III force in decades. Who are the main targets of the offensive? Why has Ecuador Chairman, McLarty Associates Venezuela launched the operation now, and what does it seek to accom- On his third attempt at Ecuador’s Beatrice Rangel plish? What must Venezuela, Colombia and the international community presidency, conservative former Director, do to address the resulting refugee crisis? banker Guillermo Lasso was AMLA Consulting LLC elected the country’s president, Jaana Remes defeating leftist economist Partner, Andrés Arauz, a protégé of former McKinsey Global Institute Claudia Blum, foreign minister of Colombia: “The current President Rafael Correa. humanitarian situation on the Colombia-Venezuela border, Ernesto Revilla Page 2 Head of Latin American due to internal clashes in the Apure region in Venezuela, is Economics, Citi Gustavo Roosen another consequence of Venezuela’s multidimensional crisis, President, A provoked by the illegitimate regime of Nicolás Maduro. That dictatorship IESA Andrés Rozental has destroyed the rule of law, the productive system and basic social President, Rozental & services, and it is responsible for grave human rights violations against Asociados Venezuelans. Furthermore, the regime has long tolerated and protect- Shelly Shetty Managing Director, Sovereigns ed different illegal armed groups involved in drug trafficking and other Fitch Ratings illegal economies. This is the real context of the situation, and although Maduro’s regime always tries to divert international attention from its responsibility on the Venezuelan crisis, the world knows that the dictator does not respect any international standard related to human rights and rule of law. The humanitarian consequences of the crisis are reflected in more than five million people already expelled in recent years to Colombia Lasso // Photo: @LassoGuillermo via Twitter. Continued on page 3

POLITICAL NEWS Lasso will face tough economic conditions as NEWS BRIEFS Ecuador’s president. Current President Lenín Lasso Elected Moreno was forced to restructure $17.4 billion Honduras Eyes Using in foreign debt last year and accept a new $6.5 U.S. Aid for Rebuilding President of Ecuador, billion loan from the International Monetary Fund. The IMF expects Ecuador’s economy to After Hurricanes Arauz Concedes grow just 2.5 percent this year, The Wall Street Honduran government officials said Friday that Journal reported. Lasso, who is to take office it wants to use U.S. aid aimed at reducing pres- Conservative former banker Guillermo Lasso May 24, also faces a dire situation amid the sure on people to migrate north on rebuilding was elected Ecuador’s president on Sunday, raging Covid-19 pandemic. Variants of the efforts following hurricanes last year, Reuters defeating leftist Andrés Arauz, a protégé of novel coronavirus, including one that was first reported. The Honduran officials expressed former longtime President Rafael Correa, El identified in Brazil, have led to soaring infection that intention during meetings in Washington Universo reported. On his third run for Ecua- and death rates. Hospitals in some South with U.S. officials. dor’s presidency, and with 97 percent of the American countries have been pushed to near ballots counted in the country’s runoff, Lasso collapse. Since the pandemic began, Ecuador was elected with 52.21 percent of the vote, as has recorded more than 346,000 cases of compared to Arauz’s 47.49 percent. “For years, Covid-19 and more than 17,000 deaths from Venezuela Planning to I’ve dreamed about the possibility of serving the disease, according to Johns Hopkins Uni- Manufacture Cuban Ecuadoreans, so the country progresses. versity. [Editor’s note: See the Advisor’s video Covid-19 Vaccines interview with former Ecuadorean Ambassador Venezuela is looking to manufacture two to the United States Nathalie Cely.] We’ll build a more million doses per month of a Cuban-developed just country with Covid-19 vaccine, President Nicolás Maduro more prosperity Partial Results Show said Sunday, Agence-France Presse reported. for everyone.” Castillo Leading in He also said Venezuela would take part in — Guillermo Lasso the Phase 3 trials for Cuba’s Abdala vaccine. Peru’s First Round “We’ve signed an agreement to produce in our laboratories ... two million vaccines a month Today, you’ve made that possible,” Lasso told of the Abdala vaccine .. for August, September, supporters, The Wall Street Journal reported. Partial results from Peru’s Sunday presidential approximately,” Maduro said in a televised “We’ll build a more just country with more election show a surprise lead for leftist candi- address. Cuba is reportedly conducting clinical prosperity for everyone.” Meantime, Arauz date Pedro Castillo, with a June runoff all but trials for four different vaccines. conceded. “This is an electoral setback,” said assured, Agence France-Presse reported. With Arauz, UPI reported. “This is not an end, but 16 percent of ballots counted by early today, a start.” Correa also acknowledged Lasso’s far-left labor unionist Castillo was leading victory. “Your success will be Ecuador’s. I just among the 18 presidential candidates with 15.7 Netherlands’ GrandVision ask that he stops the lawfare, which destroys percent of the vote, substantially higher than Reportedly Selling Chilean lives and families,” said Correa, referring to what polls had predicted but not close to the Units to HAL Trust the use of the judiciary to pursue political 51 percent required to avoid a second-round opponents, The Wall Street Journal reported. vote. The runoff is scheduled for June 6. It is Italian-French eyewear company EssilorLuxot- Lasso’s election was a major defeat for Correa, unclear who Castillo will face, though electoral tica said today that Dutch group GrandVision who had handpicked Arauz, a 36-year-old officials said right-leaning economist Hernando has agreed to sell its Chile units to the main economist, for the race. Correa, who is living de Soto was in second place with 14.4 percent shareholder, HAL Trust, Reuters reported. in exile in Belgium, was among the leaders of the vote. Close behind are far-right candi- EssilorLuxottica, which manufactures eyeglass of the so-called Pink Tide of Latin American date Rafael López Aliaga with 13.3 percent brands such as Ray-Ban and Oakley, is currently leftist presidents who took office starting in the and Keiko Fujimori with 12.19 percent of the attempting to buy GrandVision, though the early 2000s. He was sentenced in absentia last vote, electoral officials said in a live broadcast, acquisition is pending a sign-off from Turkey’s year on corruption charges, though he denies Reuters reported. The latest polls had shown competition authority as well as ongoing arbi- wrongdoing and says the case against him was a sharply fragmented race, with 28 percent of tral proceedings. EssilorLuxottica’s 7.2 billion politically motivated. Correa was sentenced to Peruvians saying ahead of the election that euro ($8.6 billion) bid to take over GrandVision eight years in prison and was banned from par- they would not choose any of the candidates, was one of the largest deals announced in ticipating in Ecuadorean politics for 25 years. The Guardian reported, citing a survey by the 2019.

Institute of Peruvian Studies. The vote came FEATURED Q&A / Continued from page 1 just as the Andean nation ended its deadliest week of the Covid-19 pandemic since it started, and other countries. Colombia has decided Iván Márquez, to whom Maduro has publicly registering the country’s highest-ever daily toll to grant temporary protected status to about avowed asylum. Hence Maduro only refers on Saturday despite having been one of the 1.8 million Venezuelans living in our country. to the combatants there as ‘irregular armed region’s worst-hit countries last year as well. In recent weeks, we have been providing groups,’ rather than the FARC-EP dissidents [Editor’s note: See related Q&A in the March 3 humanitarian assistance to 6,500 displaced with whom he has aligned himself. On issue of the Advisor.] people in 19 shelters in the municipality their way to Brazil, drugs from Apure snake of Arauquita. International cooperation is essential to helping these victims with BUSINESS NEWS solidarity. The international community must In Apure, Maduro’s maintain diplomatic pressure and action friends are now Argentina-Based to prevent impunity on the serious crimes his enemies...” attributed to Maduro’s regime by various — Vanessa Neumann Ualá Agrees to countries and international organizations, and to ensure the restoration of democra- Buy Wilobank cy in Venezuela as the only way to solve across Venezuela and through the Mining this crisis, which affects civilians and the Arc, which is controlled by yet another group Argentine financial technology company Ualá region’s stability.” of Colombian terrorists, the ELN, which is said Friday that it has agreed to buy local now also rising up against the Venezuelan billionaire Eduardo Eurnekian’s digital bank, Vanessa Neumann, former Juan armed forces there for control of the mines. Wilobank, Reuters reported. However, the Guaidó-appointed Venezuelan In short, the Venezuelan military, which has central bank has yet to approve the operation. ambassador to the United King- kept Maduro in power, is getting increasingly Under the deal’s terms, Eurnekian would get a A dom: “The armed conflict that bogged down in open battles against its stake in Ualá, a mobile phone application that began when FARC-EP dissidents attacked allies for control of cocaine and gold. While offers a payment system for people without a Venezuelan army battalion in the town Maduro’s resilience should never be under- a stable income. Ualá is backed by investors of La Victoria could be the beginning of a estimated, he is definitely under pressure. I including George Soros, Steve Cohen and perfect storm that might threaten Maduro’s fear, though, that should the collapse of the Softbank Group Corp., the Buenos Aires Times grip on power. In Apure, Maduro’s friends are Maduro regime come at the hands of foreign reported. The companies “will provide a solid now his enemies, and Venezuelan civil- terrorist organizations, it would be as ever, at platform for the expansion of Ualá, giving it ians caught in the crossfire could at least a high cost to my fellow Venezuelans.” the possibility of continuing to strengthen its temporarily view Maduro—the enemy of their financial ecosystem with a broader range of enemy—as their friend. The FARC-EP mean Humberto de la Calle, former services once Wilobank has been incorporat- business: they are using rocket launchers Colombian vice president, ed,” Ualá said in a statement, Reuters reported. and land mines. In this battle over lucrative interior minister and chief The acquisition would also include Wilobank’s cocaine trafficking routes, the Venezuelan A negotiator in the peace process bank license and would allow the fintech firm armed forces are looting and committing with the FARC: “What is happening along the to target clients it would not have fully served atrocities against Venezuelan residents, border has enormous destabilizing potential. before, such as pensioners and recipients of including the bombardment of a house and For the thousands of migrants from Vene- government welfare, the Buenos Aires Times school in Los Cañitos and the murder of five zuela, a dangerous confrontation involving reported. The statement did not mention the relatives in El Ripial. By contrast, the Colom- Venezuelan military forces is now an addi- transaction’s value, and unnamed sources bian terrorists have been smart: they have tional concern. Colombia has also activated declined to reveal it to the Buenos Aires Times. thus far avoided attacking Venezuelan civil- military units. The Venezuelan military mobi- Ualá’s press office and a spokeswoman for ians, opening the possibility that the locals lization coincides with a change in diplomat- Eurnekian also declined to comment. Ualá might consider rising up with them against ic strategy. For several years, the panorama was valued at between $850 million and $950 Maduro’s security forces. Many desperate was framed by complaints from Colombia million after its last funding round in November Venezuelans have joined the ranks of the over the protection of illegal groups in Vene- 2019, according to the report. [Editor’s note: Colombian terrorist groups, who at least give zuela, to which Venezuela responded with a See related Q&A in the Nov. 19-Dec. 2 issue them food and a job. Apure is an important resounding refusal. Now, in different forums, of the Dialogue’s biweekly Financial Services drug trafficking route under the control of including through letters to the U.N. Security Advisor.] Continued on page 4

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue ISSN 2163-7962 Council, Venezuela is seeking to change the with late President Hugo Chávez. Since the paradigm: it maintains that it is a victim of Colombian peace accords in 2016, many Erik Brand aggressive actions by Colombia. The effect guerrilla fighters have refused to put down Publisher [email protected] is that the two foreign ministries today are their weapons and continue participating speaking the same language, each from in the drug trade, fuel smuggling and illegal Gene Kuleta Editor their own side. These mutual and equivalent mining, departing from ideological beliefs. [email protected] accusations are a Gordian knot that sets Anastasia Chacón González the conditions for an escalation of tensions. Reporter & Associate Editor That is why I welcome the initiative of a Besides the need to [email protected] group of people from both sides of the bor- keep the money flow- Diana Roy der who have petitioned the United Nations Editorial Intern ing, Maduro’s govern- [email protected] to appoint a special envoy for the border ment must use this crisis. It’s about sending a sensible message and avoiding the temptation to escalate the moment to prove he confrontation. Sectors of the Venezuelan can control the terri- Michael Shifter, President opposition have been promoting a proposal tory of Venezuela...” Rebecca Bill Chavez, Nonresident Senior Fellow for a peaceful transition in Venezuela. Biden — Gustavo Roosen Bruno Binetti, Nonresident Fellow is likely to view this favorably. The Trump/ Sergio Bitar, Nonresident Senior Fellow Bolton era is over, and hopefully this can be Joan Caivano, Senior Advisor resolved before it is too late.” The ties between Maduro and these guerrilla Michael Camilleri, Director, Rule of Law Program groups prompted the U.S. Justice Depart- Kevin Casas-Zamora, Nonresident Senior Fellow Gustavo Roosen, member of ment in March 2020 to indict Maduro, sever- Julia Dias Leite, Nonresident Senior Fellow Ariel Fiszbein, Director, Education Program the Advisor board and presi- al other Venezuelan officials and members Sandra García Jaramillo, Nonresident Senior Fellow dent of IESA in Caracas: “The of the FARC leadership on narco-terrorism Selina Ho, Nonresident Senior Fellow deployment of the armed forces charges. Besides the need to keep the A Edison Lanza, Nonresident Senior Fellow is aimed at tamping down fighting among money flowing, Maduro’s government must Nora Lustig, Nonresident Senior Fellow Colombian guerrilla groups and regaining use this moment to prove he can control Margaret Myers, Director, Asia Program territorial control. Venezuelan military pres- the territory of Venezuela, which is facing Manuel Orozco, Senior Fellow ence in the region will continue. Maduro’s a very precarious economic situation. The Xiaoyu Pu, Nonresident Senior Fellow government will allow some degree of illicit heavy-handed response is proportionate to Jeffrey Puryear, Senior Fellow activity by Colombian guerrilla groups in its the risk the regime seeks to eliminate. As Tamar Solnik, Director, Finance & Administration territory. But at a time when his authority is it pertains to the humanitarian crisis this Lisa Viscidi, Director, Energy Program already being seriously questioned, Maduro military confrontation has created, the best Denisse Yanovich, Director of Development cannot allow fighting among the guerrilla avenue open to the international community groups inside Venezuelan borders. What is to support Venezuelan migrants with Latin America Advisor is published every business day, except for major U.S. holidays, is unique about this operation is that the financial contributions and humanitarian by the Inter-American Dialogue at Venezuelan authorities are responding. The services, based on the Colombian law known 1155 15th Street NW, Suite 800 government has turned a blind eye toward as ‘Estatuto Temporal de Protección para Washington, DC 20005 former FARC and ELN guerrillas. The Ven- Migrantes Venezolanos.’ ” www.thedialogue.org ezuelan government has preferred to work Subscription inquiries are welcomed at [email protected] with guerrillas and criminal groups along The Advisor welcomes comments on its Q&A the border to advance common interests. section. Readers can write editor Gene Kuleta The opinions expressed by the members of the Board of Advisors and by guest commentators do not necessarily Ideologically, the FARC had more in common at [email protected]. represent those of the publisher. The analysis is the sole view of each commentator and does not necessarily represent the views of their respective employers or firms. The information in this report has been obtained from reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have any questions relating to the contents of this publication, contact the editorial offices of the Inter-American Dialogue. 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