LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Wednesday, April 24, 2019

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, April 24, 2019

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICS Devry Boughner Vorwerk Which Issues Are Mexico Has Corporate VP, Global Corporate Affairs Cargill Detained 15,000 Joyce Chang Global Head of Research, Driving Uruguay’s Migrants in Past JPMorgan Chase & Co. Month: Official Marlene Fernández Corporate Vice President for Presidential Race? Mexico has increased its depor- Government Relations, tations of migrants, mainly from Arcos Dorados Central America, following threats Peter Hakim by U.S. President Donald Trump to President Emeritus, close the U.S.-Mexico border. Inter-American Dialogue Page 2 Donna Hrinak President, Boeing Latin America Jon Huenemann BUSINESS Retired VP, U.S. & Int’l Affairs, Philip Morris International Google Completes James R. Jones Chairman, Cable From Monarch Global Strategies California to Chile Craig A. Kelly Google completed a 10,000-ki- Director, Americas International Gov’t Relations, Exxon Mobil Among the front-running hopefuls ahead of Uruguay’s presidential race this year is former lometer undersea cable from Montevideo Mayor Daniel Martínez. // File Photo: Uruguayan Government. John Maisto California to Chile, which the gov- Director, U.S. Education ernment said will benefit millions Finance Group General elections are scheduled in Uruguay on Oct. 27, of Internet users. Nicolás Mariscal Page 3 Chairman, with the ruling Broad Front coalition seeking a consecutive Grupo Marhnos fourth term in office. If no presidential candidate receives a Thomas F. McLarty III Q majority in the first round of voting, a runoff will take place POLITICAL Chairman, McLarty Associates on Nov. 24. Which candidates have the best chances of winning their Brazilian Court Carlos Paz-Soldan parties’ nominations during the June primaries? Which issues will drive Reduces Lula’s Partner, DTB Associates, LLP the campaigns? What effect is current President Tabaré Vázquez, who is Prison Sentence Beatrice Rangel ineligible to run for re-election, having on the race? Brazil’s Superior Court of Justice Director, AMLA Consulting LLC reduced former President Luiz Inácio Lula da Silva’s prison Jaana Remes Francisco Panizza, professor of Latin American and compar- Partner, sentence to eight years and 10 McKinsey Global Institute ative politics in the Department of Government at the Lon- months. Lula was imprisoned a Ernesto Revilla don School of Economics and Political Science: “In the ruling year ago after he was convicted in Head of Latin American two corruption trials. Frente Amplio (FA) party, the front-runner is the former mayor Economics, Citi A Page 2 Gustavo Roosen of Montevideo, Daniel Martínez. A member of the Socialist Party, he Chairman of the Board, Envases Venezolanos has the backing of the moderate sectors within the FA. His main rival is Andrés Rozental Carolina Cosse, a former minister of industry and president of state tele- President, Rozental & Asociados and Senior communications company ANTEL. She has the support of the Movimiento Policy Advisor, Chatham House de Participación Popular (MPP), the biggest grouping within the FA. In Shelly Shetty the main opposition party, the Partido Nacional (PN), the front-runner Head of Sovereign Ratings, Latin America, Fitch is Senator Luis Alberto Lacalle Pou, the scion of one of Uruguay’s most Roberto Sifon-Arevalo prominent political dynasties. If he is nominated, this will be his second Managing Director, Americas Sovereign & Public Finance Ratings, presidential campaign. He is running on a platform of gradual rather than Standard & Poor’s radical change in the hope of attracting disenchanted FA voters. His main rivals are veteran Senator Jorge Larrañaga and Juan Sartori, a millionaire political newcomer. In the other traditional party, the Partido Colorado (PC), the front-runner is 83-year-old Julio María Sanguinetti, who has Lula // File Photo: Brazilian Government. Continued on page 3

POLITICAL NEWS Guatemala, according to Mexican authorities NEWS BRIEFS and migration advocates. Many of the detained Mexico Has Returned migrants are families with young children. Peru’s Vizcarra Visits Some 200 other migrants were detained in the Kuczynski in Hospital 15,000 Migrants in Mexican village of Mapastepec as they waited for temporary visas. Peruvian President Martín Vizcarra visited Past Month: Official former President Pedro Pablo Kuczynski, 80, at a clinic in Lima where Kuczynski has been Mexico has sent 15,000 migrants back to their Brazilian Court complying with pretrial prevention while being home countries over the past 30 days, a top Reduces Lula’s treated for cardiac problems over the past government official said Tuesday, a day after week, EFE reported Tuesday. Vizcarra said the authorities detained hundreds of migrants Prison Sentence visit to his predecessor was a “personal” mat- in what is believed to be the largest single ter and expressed hopes of a speedy recovery raid on a migrant caravan, Reuters reported. Brazil’s Superior Court of Justice on Tuesday for Kuczynski. Vizcarra served as Kuczynski’s Tonatiuh Guillén, the head of Mexico’s National reduced former President Luiz Inácio Lula da vice president before replacing him in 2018 Migration Institute, told reporters in Mexico Silva’s prison sentence from 12 years to eight after he resigned to avoid impeachment for City that 11,800 migrants were returned from years and 10 months, The Rio Times reported. alleged connections to a bribery scandal linked April 1-22. In all of April last year, Mexican In the unanimous decision, the four-judge panel to Brazilian construction firm Odebrecht. authorities returned 9,650 migrants. Guillén did also upheld Lula’s conviction on charges of not say to which countries the migrants were bribery and money laundering. The ruling could sent back, but most of the migrants moving allow the former president to be eligible for Brazil Loses More Than through Mexico in hopes of reaching the United “semi-open” prison later this year. Lula, who 43,000 Jobs in March States are from Guatemala, El Salvador and was in office from 2003 to 2010, was placed Honduras. A third of the migrants that have behind bars a year ago after being sentenced Brazil’s economy lost 43,196 jobs in March, the been entering Mexico are minors, and there in two separate trials for corruption. Lula has Economy Ministry announced today, Reuters are some 3,000 Cuban migrants in the country, consistently denied the charges against him, reported. In a recent poll, economists had Guillén added. Two-thirds of the Cubans are in saying they are politically motivated. During his expected the country to add 79,000 jobs. Since the northern border city of Ciudad Juárez, while campaign, current President Jair Bolsonaro January, the Brazilian economy created a net the rest are in the southern state of Chiapas, he said he hoped Lula would “rot in prison.” 179,543 new jobs, according to the ministry. added. Mexico’s deportations of migrants have “This negative result is directly related to increased amid demands from U.S. President February. Sectors that normally hire in March Donald Trump who has pressured Mexico to ECONOMIC NEWS brought that forward to February, and those block migrants from heading north toward the that lay off [in February] concentrated dismiss- United States. Last month, Trump threatened to als in March,” the ministry said. [Editor’s note: close the U.S.-Mexico border if Mexico did not Venezuela Imports See related Q&A in the April 8 issue of the stop the caravans of migrants. In March, more Crude for First Time Advisor.] than 100,000 migrants either presented them- selves to U.S. authorities or were detained by in Five Years U.S. agents, said the White House, which called Puerto Rico to Demolish the figure the highest level in a decade. Speak- Venezuela imported crude for the first time in 16,000 Structures ing to reporters alongside Guillén, Mexican In- five years as its output plummeted to below terior Minister Olga Sánchez said Mexico is not one million barrels per day to a 16-year low in Damaged in Hurricane to blame for the “unprecedented” number of March, Bloomberg News reported Tuesday. Officials in Puerto Rico said Tuesday that migrants. Anyone entering Mexico must follow As the South American country struggled they plan to demolish 16,000 structures that the country’s laws and register with authorities, amid U.S. sanctions targeting its oil sector sustained damage nearly two years ago when said Sánchez. On Monday, Mexican authorities and sporadic blackouts that shuttered oil Hurricane Maria pummeled the island, the detained nearly 400 migrants near the town fields, pipelines and ports, Venezuelan state Associated Press reported. Officials in the U.S. of Pijijiapan in Chiapas State, The Wall Street oil company PDVSA bought a cargo of crude territory said they are expecting $400 million Journal reported. The migrants, from Central from Nigeria, which is also a member of the in federal funds to pay for the demolition. The America and Cuba, were sent to overcrowded Organization of the Petroleum Exporting money is still pending federal approval. Maria immigration stations near Mexico’s border with Countries, or OPEC. The nearly one million caused more than $100 billion in damage.

COPYRIGHT © 2019, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Wednesday, April 24, 2019 barrels of light Agbami crude is Venezuela’s FEATURED Q&A / Continued from page 1 first oil import since 2014 and may help offset falling domestic production, Bloomberg News twice served as president (1985-1990 and ident José Mujica out of retirement as he is reported. The oil can also be used as a diluent 1995-2000). His main rival is the free-market perceived as a more formidable candidate for the country’s crude, so it can more easily economist Ernesto Talvi. While the economy in the general election than either Martínez be extracted from underground reservoirs. Pro- is doing better than in neighboring Argen- or Cosse. In turn, the center-right Colorado duction of Venezuela’s top exported oil, Merey tina and Brazil, it has stalled over the past Party (PC) has not recovered to date from year. It is likely to be at the center of the its poor performances in the past three pres- campaign, including how to reduce the fiscal idential elections. Former President Julio and pension deficits. Crime and education, María Sanguinetti is the clear favorite to win two areas in which the government is seen the nomination, but polls show him unlikely as having done poorly, are also set to figure to exceed 10 to 15 percent of the vote in Oc- high on the agenda.” tober. In the upcoming campaign, the Broad Front candidate will likely emphasize their Charles H. Blake, professor coalition government’s success in poverty of political science at James reduction and its ability to govern 15 years Madison University’s School of without a recessionary downturn. Opposition Maduro // File Photo: Venezuelan Government. A Public & International Affairs: candidates will criticize rising crime rates 16, which is a blend of light oil with heavier “Public opinion polls have been indicating during the FA’s time in the presidency.” streams, fell by 50 percent between 2006 and that the October 2019 presidential election 2016 to 313,000 barrels per day, according to may end in another runoff between the Héctor B. Viana, partner at the latest official data available. The adminis- center-left Broad Front (FA) coalition and Jiménez de Aréchaga, Viana & tration of U.S. President Donald Trump recently the center-right National Party (PN). Senator Brause in Montevideo, Uruguay: announced a fresh round of sanctions targeting Luis Lacalle Pou (the son of former Pres- A “Parties’ nominations are still oil Venezuela ships to Cuba, one of the South ident Luis Alberto Lacalle) is the favorite quite open, though per latest polls, some American country’s top allies, as it continues to to win the nomination again for the PN, as candidates already seem well-positioned. pressure Venezuelan President Nicolás Maduro he continues to lead fellow Senator Jorge That is the case of former Montevideo to step down. The United States and dozens Larrañaga by roughly 20 percentage points. Mayor Daniel Martínez, who represents the of other countries recognize opposition leader Greater uncertainty surrounds the Broad ruling Broad Front party. The National Party’s and National Assembly head Juan Guaidó as Front’s primary process. Daniel Martínez, the Luis Lacalle Pou maintains his leadership; Venezuela’s interim president. former mayor of Montevideo, is supported however, candidates Jorge Larrañaga and by President Tabaré Vázquez’s sector in the Juan Sartori—the latter in an unpredictable FA. Martínez’s lead over Carolina Cosse, sprint—should not be disregarded. In the BUSINESS NEWS the former minister of industry, has varied Colorado Party, former President Julio María considerably in tracking polls during 2019. Sanguinetti is making a strong comeback Cosse comes from the largest FA sector, the overriding—on short margin—new candidate Google Completes Movement of Popular Participation (MPP). Ernesto Talvi. It is likely that the top issues Undersea Cable From Some in the MPP want to coax former Pres- up for debate will be security and education. Continued on page 4

California to Chile cables linking its global network, local tech- revolution we are living,” she added. Chile is nology blog FayerWayer reported. Its global currently working on deploying a fiber-optic Google has completed a 10,000-kilometer plans include a cable from the United States to network to connect the entire country, as well subsea cable connecting Chile to the coast Denmark and Ireland and another linking cities as a separate plan to install a submarine line of California as it moves to expand its global in Asia, Reuters reported. The Curie cable will with Asia, Reuters reported. Earlier this year, cloud computing infrastructure, Reuters re- “provide advantages and opportunities for mil- Chile announced its plans to begin an auction ported Tuesday, citing Google Chile’s website. lions of Internet users” in Chile, the country’s process to roll out 5G services nationwide as The so-called “Curie” cable, which starts in Los minister for transport and telecommunications, it seeks to boost the country’s connectivity. Angeles, arrived at the Chilean port of Valparaí- Gloria Hutt, said in a statement, FayerWayer [Editor’s note: See related Q&A in the April 2 so on Tuesday. The technology company has reported. The cable “shows our country’s issue of the Advisor.] invested more than $47 billion into expanding commitment to being pioneers in the digital its infrastructure, especially in key submarine

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue, Copyright © 2019 Other issues will include employment and which can boost her chances. Inside Partido the economy, including the fiscal deficit and Colorado, former President Julio María Erik Brand overpricing policies, infrastructure needs Sanguinetti is leading the race and will be Publisher [email protected] and international intervention. The ruling the most likely candidate of his party. His party will be heavily targeted on all of these main rival is Ernesto Talvi, a very well-known Gene Kuleta Editor issues. If anything, current President Tabaré economist without previous political expe- [email protected] Vázquez’s impact on the presidential race rience. Tabaré Vázquez’s government has Anastasia Chacón González could be negative to his party. His admin- Reporter istration is suffering a serious economic [email protected] turndown after many years of bonanza. This Tabaré Vázquez’s may well explain the uncertainty on who the government has

new ruler will be in Uruguay.” been unpopular in Michael Shifter, President recent years.” Genaro Arriagada, Nonresident Senior Fellow Ignacio Zuasnabar, director at — Ignacio Zuasnabar Sergio Bitar, Nonresident Senior Fellow Equipos MORI: “Luis Lacalle Pou Joan Caivano, Director, Special Projects leads the polls in the Partido Michael Camilleri, Director, Peter D. Bell Rule of Law A Nacional’s primaries (around been unpopular in recent years. In March, Program 40 percent), but the race is not decided his job approval was 28 percent, while 47 Kevin Casas-Zamora, Nonresident Senior Fellow yet. His old rival, Senator Jorge Larrañaga, percent disapproved, according to a survey Ariel Fiszbein, Director, Education Program maintains 25-30 percent of the vote, and by Equipos Consultores. Vázquez’s personal Peter Hakim, President Emeritus support for novel candidate Juan Sartori image is better than that of his government. Claudio Loser, Senior Fellow (a young businessman with no previous Thirty-eight percent of Uruguayans view Nora Lustig, Nonresident Senior Fellow political experience) has grown strongly him positively, making him the second most Margaret Myers, Director, Asia and Latin America Program over the past months. Former Montevideo popular political leader in the country. He Manuel Orozco, Director, Migration, Mayor Daniel Martínez is leading the polls in is constitutionally barred from running this Remittances & Development the Frente Amplio (around 50 percent). His year, but his government will make a major Jeffrey Puryear, Senior Fellow most likely rival, former Minister of Industry effort to show its accomplishments to Tamar Solnik, Director, Finance & Administration Carolina Cosse (the only female candidate citizens in several areas.” Lisa Viscidi, Director, Energy Program among more than 20) has about 30 percent. Denisse Yanovich, Director of Development and She has the support of the Movimiento de The Advisor welcomes comments on its Q&A External Relations Participación Popular (MPP), the political section. Readers can write editor Gene Kuleta Latin America Advisor is published every group led by former President José Mujica, at [email protected]. business day, except for major U.S. holidays, by the Inter-American Dialogue at 1155 15th Street NW, Suite 800 Washington, DC 20005 www.thedialogue.org LATIN AMERICA ADVISOR ISSN 2163-7962 Subscription inquiries are welcomed at [email protected]

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