LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Tuesday, January 9, 2018
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LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Tuesday, January 9, 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 PPK Be Able More Crews, Cargill Joyce Chang Supplies Headed Global Head of Research, to Complete His to Puerto Rico for JPMorgan Chase & Co. Dirk Donath Recovery Effort Senior Partner, More work crews and supplies are Catterton Aimara Term in Peru? due to arrive in the coming weeks Barry Featherman in Puerto Rico, which was battered Senior Director, International Government Affairs, by Hurricane Maria in September, Gilead Sciences U.S. officials said. Much of the Marlene Fernández island remains without power Corporate Vice President for nearly four months after the storm Government Relations, struck. Arcos Dorados Page 2 Peter Hakim President Emeritus, Inter-American Dialogue BUSINESS Donna Hrinak President, Boeing Latin America Walmex Reports Jon Huenemann Slower Sales Vice President, U.S. & Int’l Affairs, Peruvian President Pedro Pablo Kuczynski last month survived an impeachment attempt and Philip Morris International then controversially pardoned former President Alberto Fujimori. // File Photo: Peruvian Growth for 2017 James R. Jones Government. Walmex reported sales growth of Chairman, Monarch Global Strategies Several public officials in Peru have resigned in the wake of 7.7 percent last year, its slowest rise since 2014. The year’s sales Craig A. Kelly President Pedro Pablo Kuczynski’s near-impeachment and Director, Americas International totaled $29.6 billion Gov’t Relations, Exxon Mobil his subsequent pardoning of former President Alberto Fuji- Page 3 John Maisto Q mori, who was serving a 25-year prison sentence for abuse Director, U.S. Education Finance Group of power and human rights violations. The pardon led to street protests, POLITICAL Nicolás Mariscal leaving Kuczynski’s presidency on shaky ground despite surviving the Ecuador to Audit Chairman, impeachment vote in December. Will Kuczynski be able to complete Grupo Marhnos Debt Incurred his five-year term? How can he regain public confidence and political Thomas F. McLarty III Under Correa Chairman, influence? Will Peru’s fractured politics throttle back investment and McLarty Associates economic growth this year? Ecuador’s comptroller’s office Carl Meacham said it would audit debt incurred Associate VP for Latin America Int’l Advocacy Division, PhRMA during the last five years of former President Rafael Correa’s term to Carlos Paz-Soldan Cynthia McClintock, professor of political science and inter- determine its legality. Partner, national affairs at The George Washington University: “The DTB Associates, LLP Page 2 Beatrice Rangel odds are against President Pedro Pablo Kuczynski (PPK)’s Director, completion of his term. PPK is dangerously isolated. Not only AMLA Consulting LLC A did he incorrectly deny dealings with Odebrecht, provoking the impeach- Gustavo Roosen Chairman of the Board, ment vote, but most Peruvians believe that he traded his survival of the Envases Venezolanos impeachment vote for the pardon of former President Alberto Fujimori. Andrés Rozental President, Rozental & Many Peruvians voted for PPK in the 2016 runoff because he was not in Asociados and Senior Policy Advisor, Chatham House bed with fujimorismo, and they now feel betrayed. PPK has lost three of Shelly Shetty his best ministers and three of his party’s 18 legislators. Although PPK Head, Latin America Sovereign Ratings, Fitch Inc. has promised a cabinet of ‘reconciliation,’ recruitment among members Roberto Sifon-Arevalo of small parties, grassroots politicians and progressive intellectuals—to Managing Director, Americas whom PPK should have turned more at the start—will be difficult. The Sovereign & Public Finance Ratings, Standard & Poor’s largest sector of fujimorismo, led by Alberto’s daughter Keiko, has con- sistently interpreted PPK’s efforts at accommodation as weakness and Correa // File Photo: Ecuadorean Government. Continued on page 3 COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Tuesday, January 9, 2018 POLITICAL NEWS ECONOMIC NEWS NEWS BRIEFS Ecuador to Audit More Crews, Supplies Brazilian Police Seek to Question Temer Over Debt Incurred Under Headed to Puerto Port Regulation Decree Ex-President Correa Rico for Repair Effort Brazilian police have requested that President Michel Temer respond to 50 questions posed Ecuador’s comptroller’s office on Monday said Efforts to repair Puerto Rico’s energy infra- as part of an investigation into whether he took it would be auditing any debt contracted in structure and restore power to the U.S. territory bribes in exchange for influencing a decree that the last five years of former President Rafael in the wake of Hurricane Maria will be getting regulates the country’s ports, a government Correa’s term in order to determine if the oper- a boost in the coming weeks with more work spokesperson said, MercoPress reported to- ations and use of the funds were legal, Reuters crews and supplies due to arrive at the island, day. Police are investigating a scheme in which reported. The announcement followed a report federal officials said, the Associated Press Temer allegedly accepted bribes in exchange by the comptroller’s office that revealed that reported Monday. The U.S. Army Corps of Engi- for guiding the creation of a decree that would some of the documentation related to debt neers said it would be acquiring its own barge have favorable terms for logistics firm Rodri- operations had been kept secret, and that to ship needed materials that it requested mar. The allegations are the latest to come months ago to rebuild infrastructure. Col. John out against Temer, who has so far managed to Lloyd, who is overseeing the efforts to restore avoid a trial over corruption allegations. Temer power, said officials over the weekend discov- has denied any involvement in corruption. ered some needed equipment in a previously overlooked warehouse owned by the island’s public utility, the Puerto Rico Electric Power Authority (PREPA). “We’re doing everything we Chile’s Bachelet Meets can to increase [PREPA’s] ability to do this as With Castro in Havana fast as possible for the people of Puerto Rico,” Outgoing Chilean President Michelle Bachelet Lloyd said. Certain materials, including trans- Moreno // File Photo: Ecuadorean Government. met Monday in Havana with Cuban President formers, splices and hundreds of necessary Raúl Castro and vowed to strengthen economic some of the government’s official reports on smaller pieces, had delayed the energizing of and commercial ties between the two coun- public debt during the Correa administration certain power lines. He said that his agency is tries, China’s state-owned news agency Xinhua had excluded certain debt operations. Since still waiting for the shipment of hundreds of reported. During the visit, Bachelet highlighted his election last year, President Lenín Moreno, thousands of poles, transformers, fuses, tow- joint projects with Cuba in the health sector who had been a protégé of Correa and was a ers, insulators, bolts and other pieces, as well. as well as an iron exploration partnership. member of the former president’s political par- More than 40 percent of PREPA’s customers Bachelet’s term is set to end March 11, when ty, has criticized his predecessor’s handling of remain without power nearly four months after Sebastián Piñera returns to Chile’s presidency. the economy and has made efforts to roll back the hurricane battered the commonwealth, kill- certain reforms enacted by Correa. The former ing dozens of people and causing an estimated president has said Moreno’s efforts amounted $95 billion in damages. to a “coup” against him. The audit will be car- Andorra’s Andbank ried out by a team of economists, lawyers and Mexico’s Vehicle Eyes Expansion in Region businessmen, who will analyze debt operations Andorran private bank Andbank is looking to from January 2012 to May 2017, and are set to Exports to U.S. grow its Latin America operations by entering present recommendations to the government Argentina, as well as by growing its operations this April. Comptroller Pablo Celi said Correa Reach Record High in Mexico and Brazil, said Carlos Moreno, and former officials from the Finance Ministry Andbank’s managing director and its head have been notified of the investigation. Correa Mexico’s vehicle exports to the United States for the Americas, Bloomberg News reported took to Twitter to condemn the investigation, reached a record high in 2017, CNBC reported today. Andbank is Andorra’s largest bank, with which he said was headed by several “haters” Monday, citing data from the country’s auto 25 billion euros, or $30 billion, under manage- of his political movement. In a later speech, the industry. Mexico exported 2.33 million vehicles ment. The bank is seeking to obtain a license former president said the probe amounted to to its northern neighbor over the past year, to operate as a global investment advisor in “persecution.” a 9.4 percent increase over 2016. Also, 75 Argentina, Moreno said. COPYRIGHT © 2018, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Tuesday, January 9, 2018 percent of the vehicles that were exported from FEATURED Q&A / Continued from page 1 Mexico in 2017 were then sold in the United States, far ahead of the total in Canada, which intensified its belligerence. Only the sector Congress tries and succeeds in organizing received just over 8 percent of Mexico’s vehicle of fujimorismo led by Alberto’s son Kenji, another impeachment process or because exports. The increase came amid renegotia- who spearheaded the pardon effort, appears of continuing street demonstrations. The tions of NAFTA. open to collaboration with PPK. Perhaps worst-case scenario may be avoided, due to most problematic for PPK is that the inves- a deeper fragmentation of political parties.