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LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, April 16, 2018 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Corporate VP, Global Corporate Affairs Has Brazil’s Oil Tensions Over Cargill Joyce Chang Venezuela Flare Global Head of Research, Sector Gotten at Lima Summit JPMorgan Chase & Co. Dirk Donath The eighth Summit of the Amer- Senior Partner, icas wrapped up this weekend Catterton Aimara Back on Track? with strong statements critical Marlene Fernández of Venezuela’s President, Nicolás Corporate Vice President for Maduro, from the United States Government Relations, Arcos Dorados and its allies that were met with rebukes from Cuba and Bolivia. Peter Hakim President Emeritus, Page 2 Inter-American Dialogue Donna Hrinak ECONOMIC President, Boeing Latin America Jon Huenemann Argentina, U.S. Vice President, U.S. & Int’l Affairs, Philip Morris International Reach Deal on James R. Jones Pork Imports Chairman, Monarch Global Strategies The deal will allow U.S. pork to be Craig A. Kelly imported into Argentina for the Director, Americas International Last month Petrobras, led by CEO Pedro Parente (R) posted a $136 million loss for 2017, its fi rst time since 1992. Agriculture Gov’t Relations, Exxon Mobil smallest annual decline in the last four years. // File Photo: Government of Brazil. offi cials in Argentina had cited John Maisto health concerns over trichinosis, Director, U.S. Education Saddled with at least $85 billion in debt, Brazilian state a parasitic disease caused by Finance Group oil company Petrobras faces a diffi cult path ahead, Fitch roundworms, in keeping the ban. Nicolás Mariscal Chairman, Ratings said last month, as it downgraded the company’s Page 3 Grupo Marhnos Q debt ratings further into junk territory, to BB- from BB. Thomas F. McLarty III POLITICAL Chairman, Meanwhile, Geraldo Alckmin, the governor of São Paulo State and a McLarty Associates presidential hopeful in this October’s national election, said last month Brazil’s Bolsonaro Carl Meacham Associate VP for Latin America he was open to privatizing Petrobras, which already has semi-public Charged With Int’l Advocacy Division, PhRMA ownership aspects. What are the biggest challenges shaping the outlook Hate Speech Carlos Paz-Soldan Partner, for Petrobras? What does Petrobras have working in its favor? How well Brazil’s attorney general on Friday DTB Associates, LLP has the company dealt with a multi-year corruption scandal and related charged Jair Bolsonaro, who has Beatrice Rangel governance changes? been polling strongly in voter Director, surveys ahead of this October’s AMLA Consulting LLC election, with inciting hatred. Gustavo Roosen Page 2 Chairman of the Board, Larry B. Pascal, co-chair of the International Law Section of Envases Venezolanos Haynes and Boone, and Andre Berzins, Rio de Janeiro-based Andrés Rozental President, Rozental & attorney: “Petrobras faces a litany of challenges in its efforts Asociados and Senior to recover from numerous setbacks and obstacles, including Policy Advisor, Chatham House A billions in debt. Its lowered debt rating will mean higher borrowing costs. Roberto Sifon-Arevalo Managing Director, Americas Although it has put in place an ambitious divestiture program, laid off Sovereign & Public Finance Ratings, Standard & Poor’s thousands of employees and contractors totaling more than 185,000 workers, and recently settled a class-action suit in the United States for approximately $3 billion, it still faces numerous challenges. Its large layoffs have hurt worker morale, and the divestiture program has seen certain sales (such as the Liquigas sale) blocked by the local Brazilian competition authorities. Its international reputation has also been dam- Bolsonaro // File Photo: Fábio Ro- aged by the Lava Jato scandal, although the company insists it was the drigues Pozzebom, Agência Brasil. Continued on page 4 COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Monday, April 16, 2018 POLITICAL NEWS ees signed “The Lima Commitment,” a 56-point NEWS BRIEFS document that outlines anti-corruption efforts Tensions Over such as more cross-border cooperation and Citigroup Q1 Profi t tightening of anti-graft laws. But that too gener- Increases on Higher Venezuela Flare ated some pushback. Bolivia’s President, Evo Morales, suggested that a “war on corruption,” Latin America Revenue at Lima Summit like the war on drugs and war on terror, could New York-based Citigroup on April 13 reported be used by the United States and others as an net income for the fi rst quarter of $4.6 billion The eighth Summit of the Americas wrapped excuse to “topple legitimate governments.” on revenues of $18.9 billion. The results sur- up this weekend in Lima with strong state- Some Caribbean leaders worried about the passed market analysts’ expectations. In the ments critical of Venezuela’s President, Nicolás costs and bureaucracy that would be involved company’s Latin America consumer banking Maduro, from the United States and its allies in complying with the accord. Economic ties segment, net income increased 15 percent as that were met with rebukes from Cuba and also garnered headlines. On trade, the delega- compared to the year before, to $1.3 billion. In Bolivia, the Miami Herald reported. U.S. Vice tion from the United States insisted it had not constant dollars, revenues increased 8 percent President Mike Pence, who was fi lling in for turned its back on Latin America, the Financial and retail banking revenues grew 7 percent President Donald Trump, said the United States Times reported. Commerce Secretary Wilbur in the region year-over-year. Card revenues in would not stand by as Venezuela devolved into Ross said the U.S. might be willing to re-en- Latin America increased 13 percent, driven by a dictatorship, calling on the region to ramp gage with the Trans-Pacifi c Partnership, which continued growth in purchase sales and full up sanctions against the Maduro regime. “The Trump abandoned his fi rst month in offi ce. rate revolving loans, the bank said. United States believes now is the time to do more, much more,” he said. The Venezuelan Brazil’s Bolsonaro leader had been disinvited by Peru from attend- Ecuador Police Detain ing the summit amid concerns over unfair elec- Charged With Nine in Killing of Hate Speech Journalists More than 500 police offi cers in Ecuador Brazil’s attorney general on Friday charged raided homes and villages near Mataje along Jair Bolsonaro, the controversial right-wing the border with Colombia over the weekend in presidential candidate who has been running their hunt for members of a gang that killed near the front in polls ahead of this October’s two journalists from El Comercio and their election, with inciting hatred and discrimination driver. The group is led by Walter Artízala, also against blacks, indigenous communities, wom- known as Guacho, a former guerrilla with the en and gays, the New York Times reported. At- Peruvian President Martín Vizcarra hosted the summit. // Revolutionary Armed Forces of Colombia, who torney General Raquel Dodge cited incendiary Photo: Peruvian Government. has now taken over much of the drug trade remarks by Bolsonaro, a congressman, alleging along the border with Colombia, authorities tions and an economic crisis. Pence’s speech they constituted hate speech. If convicted, he say. Interior Minister César Navas said Sunday drew an angry response from Cuban Foreign could face up to three years in prison and a that nine people, including Guacho’s nephew, Minister Bruno Rodríguez, who argued that it $117,000 fi ne. The charges, which Bolsonaro’s are being held, El Comercio reported. was “completely undemocratic” to attack Mad- campaign called “groundless,” came as debate uro when he’d been excluded from the meeting continues in Brazil over the judiciary’s role in and couldn’t defend himself. The United States’ deciding who can run in elections. Earlier this “moral vacuum cannot be, is not, a reference month, the front-runner in the race, former Generali Sells Businesses for Latin America and the Caribbean,” Rodrí- President Luiz Inácio Lula da Silva, lost a court in Panama, Colombia guez said as the U.S. delegation walked out. appeal and began serving a 12-year sentence Italian insurer Assicurazioni Generali an- Pence highlighted an additional $16 million in for corruption. The status of Lula’s candidacy nounced today it had sold its businesses in U.S. funding to help Venezuelans who have fl ed remains uncertain, however, despite his being Panama and Colombia for about $210 million. to neighboring countries but did not offer spe- imprisoned. The fi rst major poll taken since The operations in Panama were sold to ASSA cifi c plans for further action against Maduro’s Lula was jailed, released by Folha de S.Paulo Compañía de Seguros, while the business in government, the Washington Post reported. on Saturday, showed environmentalist Marina Colombia was sold to Talanx Group. In South The summit’s offi cial theme was corruption and Silva technically tied with Bolsonaro in the America, Generali remains active in Brazil, democratic governance. On Saturday, attend- race, Bloomberg News reported. The Datafolha Argentina and Ecuador. COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Monday, April 16, 2018 poll showed Bolsonaro with 17 percent of vote intentions and Silva with 15 to 16 percent. THE DIALOGUE CONTINUES The polling scenario did not include Lula. Ciro Gomes, the leftist former governor of Ceará State who was expected to draw Lula voters, What Does Jailing Lula Mean for Brazil? slipped to 9 percent from 12 percent in the poll taken in January, Reuters reported. Support Former Brazilian President Brazilians were willing to tolerate a certain for São Paulo Governor Geraldo Alckmin, who Luiz Inácio Lula da Silva, who amount of corruption, so long as it went some analysts say has the strongest party Q has been the front-runner hand in hand with economic prosperity.