LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Wednesday, October 14, 2020

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, October 14, 2020

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Will Nunes Win U.S. Immigration CEO, DevryBV Sustainable Strategies Agents Returned Joyce Chang Global Head of Research, Confirmation to Hondurans From JPMorgan Chase & Co. Guatemala: Report Paula Cifuentes Director of Economic & Fiscal Affairs, Brazil’s High Court? U.S. immigration agents stationed Latin America & Canada, in Guatemala violated the terms Philip Morris International of their funding by detaining and Marlene Fernández returning Honduran migrants, Corporate Vice President for according to a U.S. Senate report. Government Relations, Arcos Dorados Page 2 Peter Hakim President Emeritus, ECONOMIC Inter-American Dialogue Donna Hrinak Venezuelan Coal Senior VP, Corporate Affairs, Royal Caribbean Group Exports Rise Amid Jon E. Huenemann U.S. Sanctions Former Corporate and Government Senior Executive Venezuela’s coal exports to James R. Jones Brazilian President Jair Bolsonaro is nominating Kássio Nunes Marques (pictured) to the Europe have reportedly risen as Chairman, country’s Supreme Court, frustrating some of Bolsonaro’s supporters. // File Photo: Brazilian U.S. sanctions have constrained Monarch Global Strategies Government. the country’s oil exports. Craig A. Kelly Brazilian President Jair Bolsonaro on Oct. 2 announced his Page 2 Senior Director, Americas Int’l Gov’t Relations, Exxon Mobil intention to nominate Kássio Nunes Marques to the country’s John Maisto Supreme Court, frustrating evangelicals whom Bolsonaro BUSINESS Director, U.S. Education Finance Group Q had promised he would nominate one of their own. Bolson- Mexico Signs Nicolás Mariscal aro nominated Nunes to replace Celso de Mello, who is retiring as he Chairman, Deals With Grupo Marhnos approaches the court’s age limit of 75. Why did Bolsonaro nominate Drug Companies Thomas F. McLarty III Nunes? Will he be confirmed by Brazil’s Senate? What are the most for Covid Vaccines Chairman, important cases coming before the court, and how might Nunes sway its McLarty Associates Mexican President Andrés Man- Beatrice Rangel decisions? uel López Obrador’s government Director, signed agreements with three AMLA Consulting LLC pharmaceutical companies to Peter Hakim, member of the Advisor board and president Jaana Remes secure eventual Covid-19 vaccines Partner, McKinsey Global Institute emeritus of the Inter-American Dialogue: “After an excep- for more than 100 million people Ernesto Revilla tionally chaotic and undisciplined first two years in office, through next year. Head of Latin American including a deeply flawed approach to Covid-19, Bolsonaro Page 2 Economics, Citi A Gustavo Roosen finally seems to have turned to a somewhat more pragmatic, organized Chairman of the Board, approach to pursuing his political objectives, rebuilding public support Envases Venezolanos Andrés Rozental and getting himself re-elected two years hence. He has made impressive President, Rozental & progress on all of these fronts in recent months and demonstrated an Asociados unexpected talent for Brazil’s traditional political infighting and maneuver- Shelly Shetty Managing Director, Sovereigns ing. Despite Brazil’s exceptionally high Covid-19 infection and death rates, Fitch Ratings a flailing economy and unprecedented job losses, the president has raised his national approval ratings, mainly by delivering a sizable aid package to lower-income Brazilians. Following months of open feuding, he has also improved his working relations with Congress and the Supreme Court, where Kássio’s appointment was widely welcomed. In Kássio, Bolsonaro chose a conservative, but well-respected, jurist with considerable judicial López Obrador // File Photo: Mexican Government. Continued on page 3

POLITICAL NEWS Comtrade. The increased exports followed NEWS BRIEFS sanctions that the United States imposed on U.S. Agents Returned Venezuelan state oil company PDVSA in Jan- Cuba, China, Russia uary 2019. This year, Venezuela’s coal exports Win Seats on U.N. Hondurans From have already surpassed last year’s total, with the country exporting 365,000 metric tons Human Rights Council Guatemala: Report through the end of June, which generated $37 Cuba, China and Russia on Tuesday won seats million, the database showed. Neither Venezue- on the United Nations Human Rights Council U.S. immigration agents stationed in Guate- la’s information ministry nor state-owned coal despite opposition from activist groups over mala violated the terms of their funding by company Carbozulia responded to Reuters’ their human rights records, the Associated detaining Honduran migrants on their way requests for comment, and the U.S. State De- Press reported. Cuba and Russia were running to the U.S. border and returned them to their partment did not respond to the wire service’s unopposed for the seats, but China was in a home country last January, according to a request for comment. Venezuela has lost five-way race with countries including Saudi report published Tuesday by Democrats on the billions of dollars in oil revenues amid the U.S. Arabia for a contested seat on the rights body. U.S. Senate Foreign Relations Committee. U.S. sanctions. So far this year, Venezuela’s central agents reportedly rented three 12-passenger bank has received just $477 million in hard vans and hired drivers to transport Hondurans currency, as compared to $40 billion in 2014. back to the border on Jan. 15 in an unautho- Venezuela’s annual production of coal grew Laureate Education rized operation. The move “was conducted in from less than 100,000 metric tons in 1988 to Transfers Control of an improvised manner without any protocols eight million metric tons in the mid-2000s, ac- Management in Honduras in place to address security considerations or cording to the U.S. Geological Survey, Reuters Laureate Education announced Tuesday that it ensure the personal safety and human rights reported. That growth made Venezuela Latin had reached a definitive agreement with Fun- of the migrants,” according to the report, America’s third-largest producer of coal, behind dación Nasser to transfer control of Fundaem- which added that the Department of Homeland Colombia and Brazil. The future of U.S. sanc- presa, which manages Laureate’s operations in Security recognized it had violated terms of an tions could change depending on who wins Honduras’ Universidad Tecnológica Cen- inter-agency agreement by using funding from next month’s U.S. presidential election. Marta troamericana (UNITEC), including the Centro the State Department’s Bureau of International Colomar Garcia, a partner at Miami-based law Universitario Tecnológico (CEUTEC). Nonprofit Narcotics and Law Enforcement Affairs for firm Diaz Reus, told the Advisor in an interview foundation Fundación Nasser has more than the operation. The agents were in the Central last month that if Trump is re-elected, his ad- 20 years working in Honduras on initiatives American nation to train local police on coun- ministration could slap “many more sanctions” focused on education, social development and ternarcotics and other security-related efforts, on countries including Venezuela, Cuba and entrepreneurship, according to the statement. The Wall Street Journal reported. The Depart- Nicaragua. If Trump’s challenger, former Vice UNITEC and CEUTEC together enroll more than ment of Homeland Security did not respond to President Joe Biden, is elected, Colomar Garcia 23,000 students in university-level courses. the newspaper’s request for comment. said some U.S. sanctions in Latin America, particularly ones targeting Cuba’s government, could be eased or withdrawn. ECONOMIC NEWS Mexico Freezes More Than 1,300 Bank Accounts in Venezuela Reportedly BUSINESS NEWS Money Laundering Probe Increasing Coal Mexican authorities said Tuesday that they Mexico Signs Deals have frozen 1,352 bank accounts that purport- Exports to Europe With Companies for edly laundered approximately $125 million on behalf of 14 criminal gangs, including some of Venezuela has been increasing its exports Covid-19 Vaccines the country’s largest drug cartels, the Associ- of coal to European nations as it seeks new ated Press reported. Mexico City police chief sources of foreign income amid tightening Mexico’s government on Tuesday signed Omar García Harfuch said some suspects and U.S. sanctions, Reuters reported Tuesday. the agreements with three drug companies in money found in recent raids were linked to the Andean nation’s coal exports tripled last year order to secure Covid-19 vaccines for more Jalisco Cartel, though he said independent to 310,000 metric tons, generating almost than 100 million people through next year, The criminals have been known to use the names $40 million, according to U.S. trade database Wall Street Journal reported. Under the deals, of cartels to intimidate victims without actually belonging to the gangs.

Mexico plans to purchase eventual vaccines FEATURED Q&A / Continued from page 1 from Britain’s AstraZeneca for 39 million people, from U.S.-based Pfizer for as many as experience, rather than an ideological bedfel- the impending corruption investigations 17 million people and from China’s CanSino low. The new judge, however, will replace that threaten his presidency. In Brazil, he is Biologics for 35 million people, the newspaper Bolsonaro’s most vocal critic on the court known as a ‘guarantor judge,’ an informal reported. Additionally, Mexico is participating and its most forceful human rights defender. title bestowed on judges who nearly always in the international Covax vaccine alliance, Still, the appointment will not be enough to vote in favor of protecting ‘the accused’—in through which it plans to secure enough doses end the high-visibility Lava Jato corruption this case, referring to white-collar empresa- for approximately 26 million people. Last probes, as Bolsonaro has called for, but it rios and politicians accused of corruption. Saturday, Mexico’s government announced that may help to protect his politically engaged While 2020 proves anything is possible, it had made a payment of $159.88 million in sons from investigations already in prog- all signs point to Nunes’ confirmation. His order to secure access to Covid-19 vaccines ress. By lowering frictions with Congress nomination faced a potential setback when through the Covax plan, which is backed by the and the courts and shifting toward the more evidence surfaced that he plagiarized his World Health Organization, Reuters reported. traditional politics of Brazil, Bolsonaro has master’s thesis and falsely claimed to have The payment to the alliance that administers enhanced his allies’ chances in this Novem- held a postdoctoral fellowship. Yet he con- Covax will allow Mexico to secure enough ber’s municipal elections, and may open the tinues to count on broad support among sen- way for him to determine the next speaker of ators and judges who wish to weaken Lava López Obrador said he the house, a particularly vital political post. Jato. Nunes’ confirmation would almost Most importantly, he has reduced the pros- certainly sway the court toward weakening hopes to start vaccinat- pects of a conservative candidate emerging ongoing investigations of Bolsonaro and his ing people as early to challenge him in the 2022 presidential family. On all of these questions, a Nunes as December. election. And aside from Lula, who will likely ruling would likely favor a Bolsonaro run for remain ineligible to run, the left seems to re-election in 2022.” have no serious candidates at all.” doses to vaccinate a fifth of the country’s Amanda Mattingly, senior population, the wire service reported, citing Jessica A.J. Rich, assistant director at The Arkin Group Mexico’s foreign ministry. Mexican President professor in the Department in New York: “President Jair Andrés Manuel López Obrador has said he of Political Science at Mar- A Bolsonaro’s decision to appoint hopes to begin vaccinating people in December A quette University: “Bolsonaro Kássio Nunes Marques to Brazil’s Supreme “or in the first quarter of next year at the latest,” nominated Nunes to please the Centrão, a Court surprised many, particularly the evan- The Wall Street Journal reported. Additionally, broad coalition of center-right politicians, gelicals who backed Bolsonaro’s candidacy Mexico plans to participate in phase 3 clinical and to protect himself from corruption in 2018 and thought he would appoint an trials that CanSino is carrying out, and it is in investigations. This nomination shows that ultra-conservative to the court to replace discussions to participate in trials with U.S., Bolsonaro is breaking with his far-right retiring Celso de Mello. Nunes is considered German, Russian, French and Italian compa- ideological faction, led by U.S.-based former a more moderate choice than Bolsonaro’s nies, said Foreign Minister Marcelo Ebrard. The astrologer Olavo de Carvalho, in favor of conservative base would have liked. Nunes vaccines are expected to cost Mexico approxi- embracing established presidential politics. has been a federal judge for 10 years and, mately $1.7 billion. In addition to the more than In Brazil, presidents traditionally build broad in contrast to Celso de Mello who has been $159 million that Mexico has already paid, the cross-party coalitions—a governing strategy a fixture on the high court since 1989, he is government plans to increase prepayments to referred to as ‘coalitional presidentialism.’ not well known. Despite the backlash from $321 million by the end of the year. In a survey Nunes is a perfect appointment to please the conservatives, Bolsonaro must be seeking a of 1,000 Mexicans that polling firm Consulta Centrão. His most clearly defined character- candidate who he thinks can be confirmed Mitofsky conducted from Oct. 9-11, 34 percent istic as a judge is not ideological but, rather, by Brazil’s Senate. Bolsonaro will need more of respondents said they would try to be his good relations with a broad spectrum of than his base to move a candidate through among the first to get an eventual vaccine if politicians. In fact, Nunes was nominated to the Senate, and Nunes could fit the bill. No it were inexpensive or free of charge. [Editor’s his current position as federal judge under matter how unhappy conservatives are over note: See related Q&A in the Sept. 8 issue of President Dilma Rousseff of the Workers’ Bolsonaro’s appointment of Nunes, they the Advisor and the Advisor’s July 1 interview Party (PT) as part of her own effort to court are unlikely to abandon Bolsonaro over it. with Arachu Castro of Tulane University on Centrão support. Nunes is also a perfect Centrists will have a hard time opposing vaccine nationalism.] appointment for Bolsonaro to shut down Nunes as well, given that he is considered to 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 be a jurist with a record of ‘flexible rulings.’ but there are no guarantees of how he will However, Nunes may still be a Bolsonaro loy- rule in the coming years.” Erik Brand alist. Bolsonaro likely wants an ally installed Publisher [email protected] on the court, especially if the investigations Carlos Eduardo Lins da Silva, into his family move forward. Recall that it global fellow at the Woodrow Gene Kuleta Editor was Celso de Mello who was overseeing the Wilson International Center [email protected] investigation into allegations that Bolsonaro for Scholars and professor at A Anastasia Chacón González had interfered in the work of the federal po- Insper College in São Paulo: “Kássio Nunes Reporter & Associate Editor lice force for his own political gain. Make no Marques’ appointment to the Supreme Court [email protected] mistake, despite having run on an anti-cor- by Jair Bolsonaro is the culmination of what ruption platform, Bolsonaro is not interested has been called the president’s ‘normaliza-

in supporting investigations into corruption tion’ process. After having taken the country Michael Shifter, President and certainly not into allegations against to the brink of an institutional crisis with Rebecca Bill Chavez, Nonresident Senior Fellow him or his family.” periodic inflammatory rhetorical outbursts Sergio Bitar, Nonresident Senior Fellow against other branches of government, espe- Joan Caivano, Senior Advisor James Bosworth, founder of cially the judiciary and Congress, he calmed Michael Camilleri, Director, Rule of Law Program Hxagon, LLC and author of down and started to act as his predecessors, Kevin Casas-Zamora, Nonresident Senior Fellow Bloggings by Boz: “The nomi- performing what he called ‘old politics.’ Héctor Castro Vizcarra, Nonresident Senior Fellow A nation of Kássio Nunes helped His attitude change coincided with police Julia Dias Leite, Nonresident Senior Fellow Bolsonaro in Congress with the Centrão coa- investigations on some of his closest former Ariel Fiszbein, Director, Education Program lition of legislators who often trade positions aides and of his elder son, Senator Flávio Peter Hakim, President Emeritus and pork for their support. Nunes is also Bolsonaro, all suspected of graft actions Nora Lustig, Nonresident Senior Fellow supported by members of the Bolsonarro allegedly committed before he was elected Margaret Myers, Director, Asia and family who hope to get more Supreme Court president in 2018. Judge Nunes is poised to Latin America Program Manuel Orozco, Senior Fellow justices as they face inquiries into alleged win easy Senate confirmation as he has an Xiaoyu Pu, Nonresident Senior Fellow corruption. In those two ways, the nomina- excellent relationship with most senators. Jeffrey Puryear, Senior Fellow tion of Nunes was a smart political move to President Bolsonaro now has a political base Mateo Samper, Nonresident Senior Fellow help Bolsonaro where he is weakest. In spite in Congress, formed mostly by members of Tamar Solnik, Director, Finance & Administration of a recent popularity bump thanks to social the ‘big center’ (Centrão) bloc, composed by Lisa Viscidi, Director, Energy Program spending, Bolsonaro still has governability parties that have traditionally supported any Denisse Yanovich, Director of Development, problems with Congress and members of government in exchange for jobs for allies External Relations & Special Projects his own cabinet. This nomination gives him in the executive branch. These lawmakers, some political capital to trade in the short as well as many other politicians around the Latin America Advisor is published every business day, except for major U.S. holidays, term. Longer term, he will definitely get an- country, expect Nunes to be much softer by the Inter-American Dialogue at other Supreme Court appointment next year than Celso de Mello in dealing with cases 1155 15th Street NW, Suite 800 Washington, DC 20005 and has promised to name an evangelical of corruption when they reach the Supreme www.thedialogue.org to shore up his base. One note of caution: Court. This would spell the end of ‘Operation ISSN 2163-7962 presidents in many democracies have been Car Wash,’ which resulted in the imprison- Subscription inquiries are welcomed at surprised by how Supreme Court justices ment of several important politicians and [email protected] have ruled once they take their seats. For businesspeople. Bolsonaro’s 2018 campaign The opinions expressed by the members of the Board of example, José Dias Toffoli was nominated vowed to strengthen ‘Car Wash.’ Its leader, Advisors and by guest commentators do not necessarily by Lula in 2009 and was expected to defend former Judge Sérgio Moro, was Bolsonaro’s represent those of the publisher. The analysis is the sole PT interests, but he certainly has not acted justice minister until he resigned last April, view of each commentator and does not necessarily represent the views of their respective employers or firms. as a consistent PT supporter during his time accusing the president of being lenient with The information in this report has been obtained from on the bench. Nunes may appear to be a corruption.” reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have moderate or a pro-Bolsonaro choice today, any questions relating to the contents of this publication, contact the editorial offices of the Inter-American Dialogue. Contents of this report may not be reproduced, stored in a retrieval system, or transmitted without prior written permission from the publisher.