Afrancisco Campbell, Nicaraguan

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, December 5, 2018

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group ECONOMIC Devry Boughner Vorwerk Corporate VP, Global Corporate Affairs Will U.S. Sanctions Cuba to Offer Cargill Internet Access Joyce Chang Global Head of Research, Lead to Changes on Mobile Phones JPMorgan Chase & Co. Cuba’s government announced Marlene Fernández that it will offer Internet access Corporate Vice President for in Nicaragua? Government Relations, for mobile phones across the Arcos Dorados country beginning on Thursday. Peter Hakim The government authorized home President Emeritus, Internet access last year. Inter-American Dialogue Page 2 Donna Hrinak President, Boeing Latin America Jon Huenemann BUSINESS Vice President, U.S. & Int’l Affairs, Philip Morris International Trading Firms James R. Jones Accused in Chairman, Monarch Global Strategies Petrobras Case Craig A. Kelly Brazilian prosecutors accused Director, Americas International Gov’t Relations, Exxon Mobil trading firms of participating in a scheme that paid bribes to John Maisto The United States last month imposed new sanctions on members of Nicaraguan President Director, U.S. Education Daniel Ortega’s inner circle. // File Photo: Nicaraguan Government. employees of state oil company Finance Group Petrobras. Nicolás Mariscal Page 3 Chairman, U.S. President Donald Trump’s administration in late Grupo Marhnos November slapped sanctions on Nicaraguan Vice President POLITICAL Thomas F. McLarty III and First Lady Rosario Murillo and the country’s national se- Chairman, Ecuador’s VP McLarty Associates Q curity advisor, Néstor Moncada. Treasury Secretary Steven Carl Meacham Quits Amid Probe Associate VP for Latin America Mnuchin said the U.S. government is holding Nicaraguan President Dan- Int’l Advocacy Division, PhRMA iel Ortega’s government accountable for this year’s deadly protests and Over Payments Carlos Paz-Soldan “widespread corruption.” Will the newest sanctions lead to any changes Vice President María Vicuña Partner, stepped down amid an investiga- DTB Associates, LLP in Nicaragua? Are the sanctions justified, and will they prompt other tion over payments she received Beatrice Rangel countries or multilateral entities to increase pressure on Ortega? Has from a former advisor. She was Director, AMLA Consulting LLC anything changed in Nicaragua since anti-government protests began in in office less than a year, having replaced Jorge Glas, who was Jaana Remes April, and how likely is the situation to be resolved in the coming year? Partner, embroiled in a corruption scandal, McKinsey Global Institute last January. Ernesto Revilla Francisco Campbell, Nicaraguan ambassador to the United Page 2 Head of Latin American Economics, Citi States: “Nicaragua firmly rejects the interventionist policy of Gustavo Roosen the U.S. administration stated in the Nov. 27 executive order. Chairman of the Board, Envases Venezolanos A Sanctions on officials on the frontline in defense against the Andrés Rozental failed April 18 coup attempt and its aftermath are another example of President, Rozental & Asociados and Senior flagrant disrespect of international law that has been a permanent feature Policy Advisor, Chatham House of U.S. policy toward Nicaragua. In the 1980s, another U.S. administration Shelly Shetty Head of Sovereigns Ratings, and Congress sponsored the Contra forces heralded as ‘freedom fighters’ Latin America, Fitch by President Reagan. This support for perpetrators of violence and terror Roberto Sifon-Arevalo was condemned by the World Court in its 1986 historic ruling, which Managing Director, Americas Sovereign & Public Finance Ratings, found the United States culpable of state-sponsored terrorism against Standard & Poor’s Nicaragua. The damage from this coup attempt is great, resulting in loss Vicuña // File Photo: Ecuadorean of lives, human suffering and destruction of public and private property by Government. Continued on page 2

POLITICAL NEWS reiterated his concern for me. I understand that NEWS BRIEFS relieving me of duties was a way to ensure my Ecuador’s VP Resigns legitimate right to defense,” Vicuña wrote in an Bolivian Court Rules open letter. Vicuña last week acknowledged Morales Can Run Amid Investigation receiving payments from the former advisor, but she said they were contributions made for Fourth Term Over Payments voluntarily to a political organization aligned A Bolivian court on Tuesday ruled that Pres- with Correa’s Alianza País party. Vicuña said ident Evo Morales can seek a fourth term in Ecuadorean Vice President María Vicuña she refused the donor’s request to be named to office in the country’s presidential election resigned Tuesday amid an investigation over a government post, adding that she is now “a next year, Agence France-Presse reported. payments she received from a former advisor victim of slander.” A chamber of the Supreme Electoral Court while she was legislator with former President approved nine candidates for primary elections Rafael Correa’s party, El Comercio reported. in January, including Morales. Opponents of Vicuña’s resignation came a day after current ECONOMIC NEWS Morales say his bid for re-election is unconsti- President Lenín Moreno relieved her of her tutional and have called for a general strike on duties and marked the second time that a Thursday to protest the decision. vice president has departed since Moreno Cuba to Offer took office in May 2017. Last January, Vicuña Internet Access replaced then-Vice President Jorge Glas, who Maduro, Putin to was under investigation in connection with the on Mobile Phones massive corruption scandal involving Brazilian Meet Today in Moscow construction conglomerate Odebrecht. The Cuba announced Tuesday night that it will roll Venezuelan President Nicolás Maduro is company has admitted to paying bribes to out Internet access for mobile phones across scheduled to meet with Russian President officials in several countries in Latin America the country beginning this week for the first Vladimir Putin today in Moscow, where they are in an effort to win infrastructure contracts. time in the island’s history, the Associated set to talk about trade and energy cooperation, In relieving Vicuña of her duties on Monday, Press reported. Mayra Arevich, the president Russian state news agency Tass reported. The Moreno assigned José Agusto Briones, Ecua- of Cuban state telecom monopoly Etecsa, said two presidents will also discuss extra aid for dor’s secretary of the presidency, to handle the company will begin offering 3G services the crisis-wracked South American country, Vicuña’s duties. Moreno said he had decided for Cubans for the first time on Thursday. The where there is a shortage of food, medicine to reassign Vicuña’s duties as vice president Cuban government authorized home Internet and other basic goods. “Practical aid is provid- so that she could defend herself, Reuters last year and has set up more than 800 Wi-Fi ed to the Venezuelan side on a regular basis. reported. “The President of the Republic has hotspots in public spaces, including parks and The issue will be definitely put forward this FEATURED Q&A / Continued from page 1 time,” Russian presidential aide Yuri Ushakov told reporters. so called ‘peaceful protesters.’ A 4 percent response to the radical minority and their reduction in this year’s GDP growth rate is external backers, seeking to destroy the projected. However, the resiliency of the harmony and progress attained through hard Nicaraguan people is on full display, and re- work and perseverance of Nicaraguans of Brazil’s JBS Taps covery in all sectors is increasingly evident. goodwill.” Tomazoni as CEO Confronted by external machinations that Brazilian meatpacking firm JBS on Tuesday seek to subvert our sovereignty and indepen- Manuel Orozco, director of named Gilberto Tomazoni as its new chief dence, Nicaragua reiterates its commitment the Migration, Remittances executive officer, the Financial Times reported. to peace and reconciliation through dialogue & Development program at An engineer, Tomazoni previously was CEO of among Nicaraguan families. In March 2019, the Inter-American Dialogue: A food producer Sadia, which is now part of BRF. elections will be held in the Caribbean Coast “The sanctions are a byproduct of U.S. Tomazoni also previously served as vice presi- Autonomous Regions. Legally established policy warnings to the Nicaraguan govern- dent of Bunge Alimentos. Tomazoni joined JBS political parties are participating, reaffirming ment about the Ortega regime’s abuses of five years ago as the head of the firm’s poultry their respect for the Nicaragua Constitution authority, human rights and property rights. unit. Tomazoni replaces José Batista Sobrinho, and our model of participatory democracy. The type of sanctions imposed represent a 85, who took over the company’s helm after his These elections constitute an unequivocal foreign policy tool that is commensurable to son Wesley Batista was arrested in connection Continued on page 4 with a corruption scandal.

COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Wednesday, December 5, 2018 plazas, around the country. But Cubans until now have only had access to state-run email TECHNOLOGY BRIEFS accounts on their cellphones, the AP reported. Etecsa executives said the company will offer data packages ranging from 600 megabytes for Brazil’s Solinftec Spending $50 Million to Establish U.S. Headquarters in Indiana Brazil’s Solinftec announced on Nov. 29 that it will establish its U.S. headquarters in Indiana, The cost of the service near Purdue University, investing $50.6 million in the move. The digital agriculture company, will keep it out of reach which has created Internet of Things platforms to digitize the farming processes of sugar cane and row crops, is seeking to bring its high-tech offerings to the U.S. market. Solinftec has de- for many Cubans. veloped technology that provides real-time data that helps boost efficiency and increase crop returns by acres, the company said in a statement.

$7 to four gigabytes for $30, CNBC reported. Although the costs are about in line with Movile Raises $500 Million for its Food Delivery App international prices, the services will be out of reach for many Cubans, whose state salaries Brazilian mobile commerce platform Movile average $30 per month. “The devil of the im- announced last month that it had raised pact of the Internet is in the details of the qual- $500 million in new investments for its meals ity of that access in terms of price, universal delivery application, iFood, Reuters reported. openness, speed and government surveillance,” The funds came from current investors in iF- Ted Henken, a professor at Baruch College in ood, among them South African media group New York and a specialist in contemporary Naspers, which owns Movile, and Brazilian Cuban culture, told the Advisor earlier this year. billionaire and business magnate Jorge Paulo [Editor’s note: See related Q&A in the Sept. 11 Lemann, Movile founder and president Eduar- issue of the Advisor.] do Henrique told the wire service. The recent Henrique // File Photo: LinkedIn. investments will go into developing technol- ogies, including using artificial intelligence, to optimize the application’s logistics. “We are BUSINESS NEWS inspired by experiences of companies from the same sector in China, and I think it’s early days in Brazil,” Henrique added. “I think we can triple the number of restaurants.” The food delivery app, the largest in Latin America, made an average of 390,000 deliveries per day in October. It Brazilian Prosecutors operates in 483 Brazilian cities and also has units in Colombia and Mexico. Accuse Trading Firms in Petrobras Case Mexichem to Open Tech Hub in Israel Brazilian prosecutors today accused interna- Mexican industrial firm Mexichem is looking to establish a technology hub in Israel, and it is tional commodity trading companies Glencore, seeking start-ups that fit its businesses, including building and infrastructure, agriculture and Trafigura and Vitol of participating in a scheme data communications and basic materials, according to Chief Executive Daniel Martínez-Valle, that paid more than $30 million in bribes to Reuters reported. Martínez-Valle said the Israeli innovation center would be an investment pri- employees at state oil company Petrobras in ority for Mexichem and would work closely with the recently acquired, Tel Aviv-based Netafim, exchange for business, Folha de S.Paulo re- the world’s largest provider of drip irrigation systems. The Mexican company aims to find tech- ported. It is the latest graft allegation involving based solutions to global challenges such as water scarcity and flooding. the South American country’s massive “Car Wash” corruption investigation. The probe derivatives in return for bribes from employees trading desk in Houston and in its headquarters has unveiled the largest corruption scheme of Glencore, Trafigura and Vitol amounting in Rio de Janeiro. Investigators say at least two in Brazil in decades and has resulted in the to some $15.3 million, half of the total graft of the employees still work at the giant oil firm. imprisonment of former high-level government uncovered in the case, between 2009 and 2014, Petrobras, Glencore and Vitol did not respond officials and business executives. Prosecutors Reuters reported. Prosecutors did not name to Reuters’ request for comment. An official allege that Petrobras workers offered the trad- other companies being investigated. The em- from Trafigura said the company does not ing companies cheaper prices for oil and its ployees allegedly involved worked at Petrobras’ comment on legal matters.

FEATURED Q&A / Continued from page 2 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue, Copyright © 2018 the damage and irresponsible actions of the Katherine Hoyt, former circle of power surrounding Ortega insofar co-coordinator of Alliance for Erik Brand as these individuals, such as Rosario Murillo, Global Justice and its Nicaragua Publisher [email protected] have been responsible for enabling and put- Network program: “Within two A Gene Kuleta ting in motion the state repression against days of each other, the Trump administra- Editor Nicaraguan citizens. This tool is of a rather tion placed further sanctions on high-level [email protected] preventive nature against criminal activity Nicaraguan officials and the Senate passed Anastasia Chacón González from individuals involved in corruption, and the Nicaraguan Investment Conditionality Reporter it does account for individuals like those Act (NICA). While the administration’s [email protected] sanctions on individuals will have minimal impact on the Nicaraguan people, the impact

of the NICA Act, which mandates that the Michael Shifter, President United States vote against loans from Genaro Arriagada, Nonresident Senior Fellow The ripe moment international financial institutions to Nica- for negotiation Bruno Binetti, Nonresident Fellow ragua, could affect a number of important Sergio Bitar, Nonresident Senior Fellow will occur during government programs. The United States Joan Caivano, Director, Special Projects the year ahead...” has an effective veto in the World Bank but Michael Camilleri, Director, Peter D. Bell Rule of Law — Manuel Orozco needs to get European support to stop a Program loan from the Inter-American Development Kevin Casas-Zamora, Nonresident Senior Fellow Bank. Nicaragua has been able to make Ariel Fiszbein, Director, Education Program progress under the Ortega government, with Peter Hakim, President Emeritus the international financial institutions noting Claudio Loser, Senior Fellow supporting Ortega. Since the protests, the it is third in economic growth and second in Nora Lustig, Nonresident Senior Fellow evolution of the dictatorship has consist- reducing poverty in Latin America. The World Margaret Myers, Director, Asia and Latin America Program ed of closing doors to dialogue, targeting Bank said last February that Nicaragua has Manuel Orozco, Director, Migration, leaders for repression, outlawing dissent the best record on project completion in Remittances & Development and protest and now going after nonprofit Latin America. Achievements such as free Jeffrey Puryear, Senior Fellow organizations, think tanks, the media and the education and health care, land titles, de- Tamar Solnik, Director, Finance & Administration private sector. Nicaragua’s economy is dete- pendable electricity, food and transportation Lisa Viscidi, Director, Energy Program riorating and is expected to contract by more subsidies, expanding potable water and sani- Denisse Yanovich, Director of Development and External Relations than 4 percent this year. A continued decline tation, renewable energy, rising minimum

in productivity, employment and investment, wages, farm-to-market roads, low crime, Latin America Advisor is published every as well as more pressure is expected to a declining Gini coefficient and declining business day, except for major U.S. holidays, push the government to negotiate. Although infant and maternal mortality rates, already by the Inter-American Dialogue at 1155 15th Street NW, Suite 800 the conflict is a protracted one, insofar as undoubtedly affected by the upheaval of Washington, DC 20005 one side is using repression as engagement, the recent coup attempt, could be further www.thedialogue.org the nonviolent nature of the opposition, the threatened by a cut-off in loans. The NICA ISSN 2163-7962 economic deterioration disproportionately Act demands that presidential elections be Subscription inquiries are welcomed at affecting the government and international moved forward. However, the OAS recog- [email protected] pressure, dissent will grow in 2019, and nized Daniel Ortega’s 2016 re-election as The opinions expressed by the members of the Board of the circle of power will slowly continue to reflecting the will of the Nicaraguan people, Advisors and by guest commentators do not necessarily weaken to the point of wearing out. The ripe and the government is working with the OAS represent those of the publisher. The analysis is the sole view of each commentator and does not necessarily moment for negotiation will occur during the to put in place needed electoral reforms, so represent the views of their respective employers or firms. year ahead, as the opposition leverages on this is extremely unlikely to happen.” The information in this report has been obtained from national and international solidarity with a reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have firm stance to hold political reforms while The Advisor welcomes comments on its Q&A any questions relating to the contents of this publication, the regime’s repressive nature loses more section. Readers can write editor Gene Kuleta contact the editorial offices of the Inter-American Dialogue. Contents of this report may not be reproduced, stored in a resources and is no longer feared.” at [email protected]. retrieval system, or transmitted without prior written permis- sion from the publisher.