LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Monday, May 3, 2021

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, May 3, 2021

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group ECONOMIC Devry Boughner Vorwerk What Humanitarian Colombia’s Duque Chief Corporate Affairs Officer, Grubhub Withdraws Tax Joyce Chang Global Head of Research, Needs Are Most Reform Proposal JPMorgan Chase & Co. Colombian President Iván Duque Paula Cifuentes withdrew his government’s tax Director of Economic & Fiscal Affairs, Urgent in Venezuela? reform proposal following violent Latin America & Canada, Philip Morris International protests that left several people Marlene Fernández dead. Corporate Vice President for Page 2 Government Relations, Arcos Dorados (McDonald’s) Peter Hakim BUSINESS President Emeritus, Inter-American Dialogue Venezuela Donna Hrinak Releases Citgo Senior VP, Corporate Affairs, Royal Caribbean Group Executives to Jon E. Huenemann House Arrest Council Member, GLG Inc. Venezuelan authorities have James R. Jones One-third of Venezuelans suffer from food insecurity, according to the United Nations World released to house arrest six Citgo Chairman, Food Program. A grocery store in Venezuela in 2014 is pictured. // File Photo: Wilfredor via executives who were imprisoned Monarch Global Strategies Creative Commons. more than three years ago. Craig A. Kelly The United Nations World Food Program and the government Page 3 Senior Director, Americas Int’l Gov’t Relations, Exxon Mobil of Venezuelan President Nicolás Maduro announced April John Maisto 19 that they had reached an agreement to provide food to POLITICAL Director, U.S. Education Finance Group Q 185,000 children this year in the South American country, Salvadoran Nicolás Mariscal where economic collapse has led to a humanitarian crisis. The U.N. Chairman, Lawmakers Grupo Marhnos agency hopes to expand the program to approximately 1.5 million chil- Sack High Court, Thomas F. McLarty III dren by 2023. How much outside humanitarian assistance does Venezu- Attorney General Chairman, ela need, and how likely is such assistance to be effectively delivered? McLarty Associates El Salvador’s Legislative Assem- Beatrice Rangel What are the most pressing humanitarian needs in Venezuela right now? bly, controlled by the party of Director, What logistical and other roadblocks stand in the way of expanding President Nayib Bukele, fired the AMLA Consulting LLC humanitarian assistance in Venezuela, and how can those obstacles be five magistrates of the Supreme Jaana Remes Court’s constitutional chamber Partner, overcome amid the pandemic? McKinsey Global Institute and Attorney General Raúl Melara. Ernesto Revilla Page 2 Head of Latin American Jacob Kurtzer, director and senior fellow of the Humani- Economics, Citi Gustavo Roosen tarian Agenda at the Center for Strategic and International President, Studies: “Hyperinflation in Venezuela has reduced access IESA Andrés Rozental to food, medicines and other basic goods. Approximately President, Rozental & A 96 percent of Venezuelans live below the poverty line, and more than Asociados three million children need humanitarian assistance. Malnutrition has Shelly Shetty Managing Director, Sovereigns reached emergency thresholds for children under 5; some 280,000 are at Fitch Ratings risk of death. The Covid-19 pandemic has exacerbated pressures on the crumbling health care system and access to food. Venezuelan refugees and migrants in neighboring countries have faced evictions, economic insecurity and increased protection risks since the pandemic began. Some 105,000 Venezuelans have been forced to return, and thousands have been left stranded due to border closures. The crisis is aggravated Melara // File Photo: Salvadoran Government. Continued on page 3

POLITICAL NEWS ECONOMIC NEWS NEWS BRIEFS

El Salvador’s Colombia’s Duque Kidnappers Release Nine Including Clergy Who Legislative Assembly Withdraws Tax Had Been Held for Weeks Sacks High Court Reform Proposal Five priests, two nuns and two other people that had been kidnapped in Haiti for nearly El Salvador’s new Legislative Assembly, Colombian President Iván Duque said on three weeks have been released, Roman Cath- which is controlled by the New Ideas party of Sunday that he would withdraw his govern- olic authorities said on Friday, the Associated President Nayib Bukele, in its first session on ment’s tax reform proposal following protests Pres reported. The France-based Society of Saturday voted to remove the five magistrates that left multiple people dead in cities across Priests of St. James did not describe how they of the constitutional chamber of the country’s Colombia, Reuters reported. Demonstrations, were released or whether a ransom had been Supreme Court, the Associated Press report- which began on Wednesday, continued in some paid. The people had been kidnapped in April, ed. Just hours after the Saturday night vote, cities on Sunday even after the announcement. a move that prompted the church to close insti- lawmakers also voted early Sunday to fire the The prosecutor’s office said in an afternoon tutions, including schools and universities, in country’s attorney general, Raúl Melara. New statement that it was probing 14 deaths related protest. Kidnappings have more than tripled in magistrates were immediately installed, and to the protests, while human rights groups have Haiti over the past year, according to the United Rodolfo Delgado was named attorney general, Nations, the AP reported. Bloomberg News reported. “And the Salvador- an people, through their representatives, said FIRED,” Bukele said in a posting on Twitter. He later tweeted that he was “extremely pleased” Four Killed When Boat with the legislative session. Business groups Suspected of Smuggling and international actors, including members Migrants Breaks Apart of U.S. President Joe Biden’s administration, A boat suspected of carrying smuggled expressed concerns over the developments. migrants broke apart Sunday off the coast of U.S. State Department spokesman Ned Price Duque withdrew his tax reform proposal on Sunday. // Photo: @IvanDuque via Twitter. San Diego, killing four people and injuring more said Secretary of State Antony Blinken spoke than two dozen, the U.S. Coast Guard said, Reu- with Bukele by phone on Sunday to express denounced supposed police abuses and say ters reported. The 40-foot cabin cruiser was “the U.S. government’s grave concern” over more than 20 people have died. “I am asking battered to pieces by the time rescuers arrived, the removal of the high court’s magistrates. Congress to withdraw the law proposed by the a San Diego Fire-Rescue official said. Blinken also raised concerns with Bukele about finance ministry and urgently process a new the attorney general’s removal, saying he has law that is the fruit of consensus, in order to been “fighting corruption and impunity, and is avoid financial uncertainty,” Duque said in a an effective partner of efforts to combat crime video. Among other measures, the original Biden Administration to in both the United States and El Salvador.” reform would have expanded the number of Cancel Contracts Related On Sunday night, U.S. Vice President Kamala items subject to value-added tax, and Colombi- Harris tweeted that the United States had “deep ans with monthly incomes as low as 2,500,000 to Trump’s Border Wall concerns about El Salvador’s democracy, in pesos ($690) would pay income taxes, María The administration of U.S. President Joe Biden light of the National Assembly’s vote to remove Fernanda Valdés, coordinator of tax issues at is returning to the Pentagon more than $14 constitutional court judges.” Ruling party Friedrich-Ebert-Stiftung in Colombia, told the billion in funds that former President Donald lawmakers accused Melara of lacking indepen- Advisor in a Q&A published last Wednesday. Trump had directed toward constructing a wall dence, Reuters reported. In a series of posts The proposal was “the most revenue-ambitious at the U.S.-Mexico border, an unnamed ad- on Twitter, Bukele addressed “the international tax reform in recent Colombian history,” Valdés ministration official told ABC News on Friday. community” in saying that the firings were added. The government has insisted the reform The official also said the Biden administration warranted. “With all due respect, we’re cleaning is necessary for maintaining debt sustainability would scrap all construction contracts related house and this isn’t your concern,” Bukele given an increase in spending over the past to the border wall. The government has also tweeted. The actions came as El Salvador is year to face the Covid-19 pandemic that has said it would launch two new projects along negotiating new financing with the Internation- widened the forecast for the fiscal gap, which the border, one to fill holes in the Rio Grande al Monetary Fund. the government expects will reach about 8.6 Valley levee system and another to manage soil erosion near San Diego.

COPYRIGHT © 2021, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Monday, May 3, 2021 percent of GDP this year. In his announcement, FEATURED Q&A / Continued from page 1 Duque insisted that a reform is still needed, and he called on political parties, local by the denial, manipulation and politiciza- external humanitarian aid is a ’Trojan Horse’ officials, business leaders and civil society to tion of aid by the Maduro authorities. At its intended to provide cover and excuse for a work together to draft a new reform, Reuters core, the humanitarian emergency is rooted foreign intervention, and domestic efforts reported. in economic mismanagement and political are equally suspicious. This year started exploitation; unilateral sanctions have also with systematic attacks against Venezuelan contributed to the economic decline and NGOs providing humanitarian aid, such as BUSINESS NEWS continue to create complications for human- Alimenta La Solidaridad, which offers meals itarian actors. Increasingly, armed groups for children in underserved communities and narco-traffickers are filling a governance across the country through communi- Venezuela Grants vacuum in hard-to-reach areas, creating ty-based kitchens. Compounding the prob- House Arrest to additional security and logistical challenges lem is the kleptocratic and discriminatory for humanitarian organizations negotiating nature of the regime. If the Maduro regime Citgo Oil Executives access. The World Food Program agreement allows humanitarian aid to enter the country, is a critical step to tackling the food security it must be managed through independent Six U.S. oil executives who were imprisoned in crisis, and, if managed correctly, it can help civil society networks under international Venezuela more than three years ago on cor- open the door to other essential humanitar- supervision. Otherwise, it will only serve to ruption allegations were granted house arrest ian activities. The program seeks to scale enlarge the wealth of kleptocrats running on Friday in a move that was widely seen as a substantially to the totality of hunger needs the country. It will be weaponized and turned conciliatory gesture toward the administration but should do so in a manner that preserves into another instrument of political control of U.S. President Joe Biden as the White House operational independence. The WFP should over desperate citizens, and it will provide reviews its policy toward the Andean nation, also maintain a focus on working with, targeted relief to regime acolytes, as the the Associated Press reported. The partial and restoring, existing community food disgraceful handling of Covid-19 vaccines release of the employees of Venezuelan state structures, so as not to create a cycle of has already shown.” oil company’s Houston-based refiner, Citgo, dependence.” was confirmed to the AP by family members Francisco J. Sánchez, part- of the men, who are known as the Citgo 6. Miriam Kornblith, senior ner at Holland & Knight and Tomeu Vadell, José Luis Zambrano, Alirio director for Latin America and former U.S. undersecretary Zambrano, Jorge Toledo, Gustavo Cárdenas the Caribbean at the National A of commerce: “This agree- and José Pereira were detained by masked A Endowment for Democracy: ment between the World Food Program security agents during a meeting in Caracas in “Venezuelans are facing a complex human- and Venezuela’s government is welcome 2017. The men had been released once before, itarian crisis that, among other evils, has news for the people of Venezuela, where in December 2019, and were jailed again two led to the massive migration of 5.5 million the United Nations estimates that one in months later when then-President Donald nationals and to 90 percent of the country’s three Venezuelans lacks the food they Trump welcomed Venezuelan opposition leader families living in poverty. The needs are in- need, placing the country between war- Juan Guaidó to the White House. Biden admin- commensurable. Generations of Venezuelan torn Afghanistan and Ethiopia in terms of istration officials were scheduled to meet last children are facing malnutrition, with lasting food insecurity. The International Rescue week to review U.S. policy toward Venezuela, irreversible consequences. Venezuelan civil Committee estimates that nearly a quarter including sanctions on the oil sector that society organizations have channeled limit- of the population requires some form of have crippled the government’s exports and ed humanitarian aid provided by multilateral humanitarian assistance and that 94 percent revenues. The move was seen as a possi- and private agencies, but these valuable of households live in poverty. At the root ble sign that Venezuelan President Nicolás efforts are limited relative to the devasta- of this is hyperinflation, arguably the most Maduro was willing to work with the Biden tion. The main obstacle to addressing the pressing humanitarian problem in Vene- administration, The New York Times reported. humanitarian crisis and channeling aid is zuela. This scourge prevents Venezuelans Other steps by Maduro that have been seen as the Maduro government, following the path from being able to afford essentials and is pacifying signals including allowing the U.N. set by Hugo Chávez. During the catastroph- spurring approximately 5,000 Venezuelans World Food Program back into the country and ic flooding affecting the central coast in to flee every day. While the WFP announce- working with the opposition on the acquisition December 1999, Chávez turned away a U.S. ment is heartening, the program may face of Covid-19 vaccines, said Geoff Ramsey of the ship carrying humanitarian help. For Maduro, obstacles from a government that is loath to Washington Office on Latin America. 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 admit that a humanitarian crisis is occurring. the noble motivations of those who want to This could take the form of denying key staff help. To regain freedom is the real humani- Erik Brand work permits, which caused Doctors Without tarian vaccine Venezuela needs now. Charity Publisher [email protected] Borders to withdraw from the country in late cannot replace freedom.” 2020. It could also take the form of requiring Gene Kuleta Editor Venezuelans to produce a loyalty card to Gina Montiel, executive director [email protected] receive the aid, like the government is doing at the Office of Panama and Anastasia Chacón González for Covid vaccinations now. Overcoming Venezuela at the Inter-Amer- Reporter & Associate Editor government-imposed challenges will remain A ican Development Bank: “The [email protected] difficult for the WFP and other humanitarian World Food Program’s recent agreement Diana Roy agencies seeking to help Venezuelans. They to feed 1.5 million Venezuelan children for Editorial Intern must walk the line between working with the 15 months is very good news. However, [email protected] government and ensuring that their aid ac- considering the impact that just a month of tually reaches vulnerable people. Hopefully, malnutrition has on human development, it this new deal will provide a model for how to is too little and too late. All the humanitarian Michael Shifter, President do this.” aid that can reach Venezuela’s population Rebecca Bill Chavez, Nonresident Senior Fellow is desperately needed. The main obstacle is Bruno Binetti, Nonresident Fellow Diego Arria, member of the the control of the territory under the Maduro Sergio Bitar, Nonresident Senior Fellow Advisor board, director of regime. But also, global bureaucracy is a Joan Caivano, Senior Advisor the Columbus Group in New major roadblock that stands in the way of Kevin Casas-Zamora, Nonresident Senior Fellow York and former permanent expanding humanitarian assistance. Venezu- Julia Dias Leite, Nonresident Senior Fellow A Ariel Fiszbein, Director, Education Program representative of Venezuela to the United ela’s economic indicators at the IMF and the Sandra García Jaramillo, Nonresident Senior Fellow Nations: “It is terribly wrong to consider World Bank should be redefined so Venezue- Selina Ho, Nonresident Senior Fellow Venezuela strictly a humanitarian catastro- la can access more resources. For instance, Edison Lanza, Nonresident Senior Fellow phe. While it is that, it does not help to the country could have more vaccines right Nora Lustig, Nonresident Senior Fellow disregard or to minimize a worse reality, that now from the Covax facility if the economic Margaret Myers, Director, Asia Program its people are victims of a narco-criminal, indicators were the actual ones, not the ones Manuel Orozco, Senior Fellow militarized corporation that partially oper- based on indicators that the Venezuelan Xiaoyu Pu, Nonresident Senior Fellow ates the country. While it remains in control, central bank stopped producing a few years Jeffrey Puryear, Senior Fellow Venezuelans will continue to suffer from ago. The Inter-American Development Bank Tamar Solnik, Director, Finance & Administration monstrous decisions, such as the blocking is working to redefine those indicators, but Lisa Viscidi, Director, Energy Program of external assistance, including vaccines high-level decisions in the U.N. system need Denisse Yanovich, Director of Development for the general population. The international to be made. Additionally, Venezuela must community—whatever that means today— be classified not only as a low-income or a Latin America Advisor is published every should accept and act upon the fact that lower-middle income country, but also as a business day, except for major U.S. holidays, by the Inter-American Dialogue at the real and greatest cause of the humani- country with conflict and fragile and violent 1155 15th Street NW, Suite 800 tarian catastrophe of this country, once the conditions. This is necessary to promote Washington, DC 20005 richest in the region, is the destruction of its peace efforts and political change. More- www.thedialogue.org economy and the ransacking of its treasury over, this redesignation is critical in order Subscription inquiries are welcomed at [email protected] by the corporation’s corrupt leaders. Vene- to formulate a more accurate operational zuelans’ most pressing humanitarian need framework that will allow for more effective The opinions expressed by the members of the Board of Advisors and by guest commentators do not necessarily is to regain freedom. Without it, the criminal humanitarian assistance. Finally, sustaining represent those of the publisher. The analysis is the sole tyranny will continue to channel any external the existing social fabric requires better view of each commentator and does not necessarily represent the views of their respective employers or firms. aid to those registered with ‘Carnet de la Pa- articulation and global awareness about The information in this report has been obtained from tria,’ an identification card that the Chinese the new threats facing nongovernmental reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have government created as an instrument of organizations from recent legislation that any questions relating to the contents of this publication, social control. 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