LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, June 16, 2021 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk How Important Violence Has Chief Corporate Affairs Officer, Grubhub Displaced 8,500 Joyce Chang Global Head of Research, Is Debt Relief to in Haiti: UNICEF JPMorgan Chase & Co. A surge in gang violence in the Paula Cifuentes area of Haiti’s capital, Port-au- Director of Economic & Fiscal Affairs, Cuba’s Economy? Prince, has displaced some 8,500 Latin America & Canada, Philip Morris International women and children in just the Marlene Fernández past two weeks, the United Na- Corporate Vice President for tions Children’s Fund, or UNICEF, Government Relations, said in a report. Arcos Dorados (McDonald’s) Page 2 Peter Hakim President Emeritus, Inter-American Dialogue ECONOMIC Donna Hrinak Senior VP, Corporate Affairs, Brazil’s Central Royal Caribbean Group Bank Expected Jon E. Huenemann Council Member, to Hike Key Rate GLG Inc. Brazil’s central bank is expected James R. Jones During his visit to France this month, Cuban Deputy Prime Minister Ricardo Cabrisas met with Chairman, Franck Riester (L-R), France’s minister delegate for foreign trade and economic attractiveness. to raise its benchmark Selic rate Monarch Global Strategies // File Photo: @franckriester via Twitter. for the third time in a row when it meets today. Craig A. Kelly The Paris Club of wealthy nations agreed last week to Senior Director, Americas Page 2 Int’l Gov’t Relations, Exxon Mobil grant Cuba more time to make payments under a 2015 debt Barbara Kotschwar agreement. The decision followed a visit to France by Cuba’s Executive Director, Visa Economic POLITICAL Empowerment Institute Q top debt negotiator, Deputy Prime Minister Ricardo Cabrisas. Castillo Claims John Maisto Cuba in 2015 defaulted on payments to the group and only partially met Director, U.S. Education Victory in Peru, Finance Group them in 2019. How important is Paris Club debt relief for Cuba? How Nicolás Mariscal likely is Cuba’s economy to recover soon from the Covid-19 pandemic, Fujimori Not Chairman, Conceding Grupo Marhnos and what are the major factors holding the economy back? How much Thomas F. McLarty III will the policies of U.S. President Joe Biden affect Cuba’s economy and Socialist Pedro Castillo claimed Chairman, its ability to return to international credit markets? victory in Peru’s razor-thin McLarty Associates presidential race. However, his Beatrice Rangel rival, conservative Keiko Fujimori, Director, has not conceded and has vowed AMLA Consulting LLC Pavel Vidal, associate professor in the Department of Eco- a fight. nomics at Pontifical Xavierian University in Cali, Colombia Jaana Remes Page 2 Partner, and former analyst in the monetary policy division at the McKinsey Global Institute Ernesto Revilla Central Bank of Cuba: “Amending the 2015 arrangement is Head of Latin American A beneficial for both Cuba and the Paris Club. The Cuban government needs Economics, Citi Gustavo Roosen to complete its domestic monetary reform and maintain its commitment President, to debt payments. And the two things go hand in hand. The devaluation IESA of the exchange rate helps to solve the balance of payments crisis. In Andrés Rozental President, Rozental & turn, international capital is essential to maximize the benefits of the Asociados devaluation in exports and minimize inflationary impacts. The Cuban Shelly Shetty Managing Director, Sovereigns economy had to face the pandemic amid an extremely fragile macroeco- Fitch Ratings nomic situation. Cuba’s dependence on tourism deeply affects its private sector. Five years of a balance of payments crisis put into perspective the difficult situation the Cuban economy has been going through after the drop in trade with Venezuela and the tightening of U.S. sanctions. Castillo // File Photo: @PedroCastilloTe via Twitter. Continued on page 3 COPYRIGHT © 2021, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Wednesday, June 16, 2021 POLITICAL NEWS weeks, the United Nations Children’s Fund, or NEWS BRIEFS UNICEF, said Monday in a report. Since early Peru’s Castillo Claims this month, clashes between rival gangs have Biden Taps Salazar as exploded in the areas of Martissant, Fontamara U.S. Ambassador to Mexico Victory, Fujimori and Delmas, leading to hundreds of homes being burned down, said UNICEF. “Every time, U.S. President Joe Biden on Tuesday nomi- Not Conceding clashes between armed groups are more vio- nated former Interior Secretary Ken Salazar lent and every time more women and children to be the U.S. ambassador to Mexico, CNBC Socialist Pedro Castillo on Tuesday claimed are forced to flee their homes,” said Bruno News reported. Salazar’s appointment, pending victory in Peru’s contested presidential runoff, Maes, the organization’s representative for Hai- congressional confirmation, was among the although right-wing rival Keiko Fujimori has ti. “Since the beginning of this year, insecurity president’s first slate of political ambassadors, vowed to fight the result and has not conceded, has been escalating. But the capital city is now as Biden’s previously announced ambassadors Reuters reported. Castillo maintained a ra- facing an urban guerrilla, with thousands of have all been career foreign service officers. zor-thin lead of 44,058 votes as ballot counting children and women caught in the crossfire.” Salazar is a former Colorado state attorney of the June 6 election ended. Fujimori has Displaced families have described “urgently” general, and he was a Democratic senator claimed fraud without providing evidence and needing clean water, food, hygiene items, before leaving Congress to join the Obama is seeking to annul a portion of the votes cast. clothes, blankets and mattresses, Maes added. administration as interior secretary. Electoral authorities have not formally declared In the past two weeks, more than 2,000 women a winner. On Twitter, Castillo celebrated, calling and more than 2,000 children have found ref- himself the country’s president-elect. “A new uge in other areas of Port-au-Prince, and more USAID Chief Meets With time has begun,” he wrote, alongside a picture than 5,000 others are believed to be taken in by of himself with his arms raised and the word host families in neighboring Carrefour and else- Salvadoran, Guatemalan “President” in large font, Reuters reported. where in the country, UNICEF said. Escalating Presidents During Trip He also updated his Twitter profile to include violence and criminal acts have led to the dis- The head of the U.S. Agency for International “President-elect of the Republic of Peru (2021- placement of more than 13,900 people in the Development, Samantha Power, said Tuesday 2026).” Fujimori in a rally on Tuesday promised Port-au-Prince area in the past nine months, that she had met with Salvadoran President supporters that she would keep fighting to according to UNOCHA, the U.N. office in charge Nayib Bukele, who she said had shown “defend Peru’s democracy.” She is calling for of humanitarian coordination. Across Haiti, readiness to discuss a “better path forward,” electoral authorities to evaluate the ballots. some 650,000 people are displaced, including Reuters reported. She described the meeting “We trust the authorities, yes, but we trust half a million in and around the capital. In May, as “frank, wide-ranging talks.” Also on Tuesday, more in the popular will,” she told supporters, UNICEF conducted a study showing that one in Power called on Guatemala to fight corruption Reuters reported. “The narrowness of the elec- five youths in Haiti believes that violence keeps seriously. She met with Guatemalan President toral victory further darkens the prospects for children from attending school. Alejandro Giammattei and separately with stable democratic governance in Peru,” Cynthia the country’s attorney general as well as the McClintock, professor of political science and head of the special prosecutor’s office against international affairs at The George Washington ECONOMIC NEWS impunity. University, told the Advisor in a Q&A pub- lished June 8. “Sadly, dissatisfaction with this election is likely to spell dissatisfaction with Brazil’s Central Bank Brazil’s Banco Inter democracy, too, and democracy is in danger,” Expected to Raise she added. Launches Share Offering Key Interest Rate For Up to $1.09 Billion Brazil-based digital lender Banco Inter has Violence Has Brazil’s central bank is expected to raise launched a share offering in which it is seeking interest rates for the third time in a row in its Displaced 8,500 to raise as much as 5.5 billion reais ($1.09 meeting today, Bloomberg News reported. The billion), Reuters reported, citing a securities in Haiti: UNICEF bank is likely to hike the benchmark Selic rate filing. The price per unit, which is comprised of by 75 basis points to 4.25 percent, as policy- one common share of stock and two preferred A surge in gang violence in the area of Haiti’s makers have previously signaled. All analysts shares, was established at 57.84 reais. In May, capital, Port-au-Prince, has displaced some in a Bloomberg survey agreed on the expected Banco Inter said payments company StoneCo 8,500 women and children in just the past two increase. Brazil is facing a deteriorating infla- Ltd. would buy a stake of up to 4.99 percent. COPYRIGHT © 2021, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Wednesday, June 16, 2021 tion outlook, with demand solidifying despite FEATURED Q&A / Continued from page 1 the ongoing pandemic as the government has maintained emergency spending. Meanwhile, Defaulting on commitments to international tightened the economic siege with 240 new the worst drought in decades has driven up creditors traps the economy in a vicious economic and financial sanctions.