LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Friday, April 3, 2020

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Friday, April 3, 2020

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk What Will Almagro Peru, Panama CEO, DevryBV Sustainable Strategies Limit Days Joyce Chang Global Head of Research, Prioritize in His Outside by Gender JPMorgan Chase & Co. Peru and Panama have limited by Paula Cifuentes gender the days that residents can Director of Economic & Fiscal Affairs, Second OAS Term? go outside to purchase essentials Latin America & Canada, Philip Morris International in an effort to slow the spread of Marlene Fernández Covid-19. Corporate Vice President for Page 2 Government Relations, Arcos Dorados Peter Hakim BUSINESS President Emeritus, Inter-American Dialogue Guyana Project Donna Hrinak Output Unaffected President, Boeing Latin America Jon E. Huenemann by Price Shock: Former Corporate and ExxonMobil Government Senior Executive The recent oil price shock has not James R. Jones Luis Almagro last month was re-elected secretary general of the Organization of American Chairman, affected production at the Liza States. // File Photo: Organization of American States. Monarch Global Strategies project in Guyana, according to a Craig A. Kelly spokeswoman for ExxonMobil. Director, Americas International Luis Almagro, who has been secretary general of the Page 3 Gov’t Relations, Exxon Mobil John Maisto Organization of American States since 2015, was re-elect- Director, U.S. Education ed on March 20 to a second five-year term heading the POLITICAL Finance Group Q organization, garnering 23 of the 33 votes cast by member Nicolás Mariscal Morgues at Chairman, states. What does Almagro’s victory mean for the organization and for Grupo Marhnos Capacity in Western Hemisphere relations? What will be Almagro’s priorities during Thomas F. McLarty III Guayaquil, Bodies Chairman, his second term, and are they the correct ones? What is the OAS’ role Lie in Streets McLarty Associates in the region during such challenging times, and to what extent has the Carlos Paz-Soldan Morgues in Ecuador’s largest city Partner, organization’s stature and credibility been affected by its part in recent have been overwhelmed amid the DTB Associates, LLP electoral controversies in countries such as Bolivia? coronavirus pandemic. Bodies lie Beatrice Rangel in the streets of Guayaquil as “no Director, one wants to recover them,” said AMLA Consulting LLC Ronald Sanders, ambassador of Antigua and Barbuda to the Mayor Cynthia Viteri, who herself Jaana Remes Partner, United States: “During Almagro’s first term, the OAS experi- has contracted the virus. McKinsey Global Institute enced bitter division, leaving the organization weak and lack- Page 2 Ernesto Revilla Head of Latin American ing a coherent way forward. Almagro was almost a ‘one item’ Economics, Citi A secretary general, consumed by events in Venezuela and acting in concert Gustavo Roosen Chairman of the Board, with countries that used the organization in furtherance of domestic polit- Envases Venezolanos ical agendas tied to removing the Maduro government. A majority of only Andrés Rozental 18 votes secured his control of the OAS. To operate based only on satisfy- President, Rozental & Asociados ing a majority, however achieved, neglects the interests of all others. The Shelly Shetty OAS will not survive in constant contention, vexation and division. Alma- Managing Director, Sovereigns Fitch Ratings gro’s second term provides him an opportunity to build bridges between member states and to lead a collective hemispheric agenda, which should include tackling climate change and a failing trading system; financing development; and addressing communicable diseases—all of which are integral to maintaining security, democracy and human rights. The latter Viteri // File Photo: City of Guayaquil. Continued on page 3

POLITICAL NEWS that one.” Bukele has taken among the most NEWS BRIEFS aggressive measures in the region in an effort Morgues at Capacity to contain the virus. He closed the country’s Bank of America Expects borders and its international airport on March Larger Contraction in Guayaquil, Bodies 14, before the country had even confirmed its first case of Covid-19. “The world IS NOT for Brazil’s Economy Lie in Streets doing enough to stop the virus. Its advance is Bank of America on Thursday said it expected ruthless, and it has already brought the world’s a deeper economic contraction in Brazil than Guayaquil has emerged as among the Latin most powerful countries to their knees,” Bukele previously forecast because of the Covid-19 American cities hardest hit by the coronavirus tweeted last week. “We’re also not doing pandemic, Reuters reported. The bank said it pandemic, with morgues in Ecuador’s most enough. The worst part is that there are people now expects a 3.5 percent contraction in Latin populous city overwhelmed and bodies in complaining that we’re being too strict. They America’s largest economy, as opposed to the some cases left lying on sidewalks and in the don’t understand anything.” El Salvador has 46 previously expected 0.5 percent contraction. streets, UPI reported Thursday. Other corpses confirmed cases of the disease and two related Bank of America also said it expected Brazil’s have been left unclaimed in hospitals and deaths. currency to weaken to 5.2 reais per U.S. dollar. clinics as fatalities have happened faster than crews can bury the dead. “They’re leaving them Peru, Panama in the villages, they fall in front of hospitals,” Guatemalan Congress Mayor Cynthia Viteri said last week in a video Limit Days Outside message. “No one wants to recover them.” Approves $130 in Monthly Viteri herself is quarantined after she tested Home by Gender Aid to Families in Need positive for Covid-19. Ecuador has 3,163 Guatemala’s Congress early today approved confirmed cases of the disease and 120 deaths Peru and Panama on Thursday limited the monthly aid of 1,000 quetzals (about $130) for related to it. In the region, only Brazil and Chile times men and women can leave their homes families affected by the Covid-19 pandemic, have more confirmed cases. Authorities in as part of each country’s efforts to curb the Prensa Libre reported. The bill, which Pres- Guayaquil say they have collected at least 400 spread of coronavirus, Reuters reported. In ident Alejandro Giammattei proposed, had corpses in recent days, UPI reported. Images Peru, where President Martín Vizcarra has stalled due to problems with the wording after on social media show people coughing outside mandated a strict quarantine, men and women Congress approved it in an emergency session. of overcrowded hospitals in Guayaquil and will only be allowed to go outside on designat- In total, the economic package will give out six some slumped over on the streets, the Miami ed days divided by gender through April 12, billion quetzals per month to families in need. Herald reported. “What’s happened with our health care system?” Viteri said in a posting on Facebook. “Families are wandering the city, We have to get fewer knocking on doors hoping a hospital will take people to be on the Venezuelan Navy Vessel them in, but there are no more beds.” The city streets every day.” Sinks After Deliberately has raided a $10 million fund that was intended — Martín Vizcarra to celebrate Guayaquil’s bicentennial in order to Ramming German Ship buy 50,000 additional testing kits, 40 portable A Venezuelan Navy patrol boat deliberately ventilators and 20 ventilators for intensive care Vizcarra announced Thursday. On Mondays, rammed a German cruise ship in international units, the newspaper reported. Additionally, it Wednesday and Fridays, only men will be able waters and then sank off the South American has brought in four refrigerated trucks to store to leave their homes to stock up. Women can country just after midnight on March 30, Deut- bodies. Leaders elsewhere have taken notice of go out on Tuesdays, Thursdays and Saturdays. sche Welle reported today. Hamburg-based the dire situation in Guayaquil and are using it No one can leave on Sundays. “We have to get Colombia Cruise Services said the Resolute as a warning. “They said the pandemic wouldn’t fewer people to be on the streets every day,” cruise ship, which was carrying a crew of 32 hit Latin America so hard because we’re used Vizcarra said. Peru has also resorted to calling people but no passengers, was the target of to illnesses, because it’s hot, because the up army reservists in order to enforce the quar- an “act of aggression.” The Venezuelan patrol population is young, etc, etc,” Salvadoran antine measures, given that many Peruvians vessel accused the cruise captain of violat- President Nayib Bukele wrote in a posting on continue to violate them. Vizcarra said earlier ing Venezuela’s territorial waters. After the Twitter. “Look at what’s happening in Ecuador. this week that some 36,000 people had been collision, the Navy boat began taking on water If you don’t see yourself reflected in the mirror arrested for not complying. The Andean nation and went down, but its 44-member crew was of Italy, Spain or New York, look at yourself in has 1,414 confirmed cases and 55 deaths. rescued by another vessel. The cruise ship sustained minor damage.

Meanwhile, Panama’s security minister, Juan FEATURED Q&A / Continued from page 1 Pino, announced that men and women would only be allowed to leave their house during should be strictly applied with no repetition success in his second term may depend less predetermined hours, Metro Libre reported. of the organization’s dubious role in last on the force of his personality and more on “With an absolute quarantine, men and women October’s elections in Bolivia. He would have his ability to effectively manage and marshal will have a schedule to transit,” Pino said, to be attentive equally to the aspirations of the OAS with transparency, consistency and Reuters reported. Panama has registered 1,317 each regional group, forging a vibrant action focus.” confirmed cases of coronavirus and 32 deaths. plan on which there is genuine consensus. Member states must also be committed to John Maisto, member of the that goal and act on it, or the organization Advisor board and former U.S. BUSINESS NEWS will wither into a few states using it as a bull- ambassador to Nicaragua, Ven- horn for their own positions, disdained by A ezuela and the Organization of others tired of being subjugated. If Almagro American States: “Uruguayan socialist Luis Production at Guyana does not play this role, the organization will Almagro has become the secretary general Project Unaffected by become an unsustainable and unattractive of the Inter-American Democratic Charter cauldron for disagreement and discord, and and all the democratic governance parts of Price Shock: Exxon Almagro’s legacy would be calamitous.” the Inter-American System—fair elections; human rights; and fighting corruption, The recent oil price shock has had no impact Michael Camilleri, director of crime and terrorism. His tenure has been on production at Guyana’s flagship Liza project, the Peter D. Bell Rule of Law marked by unflagging attempts to apply the which ExxonMobil operates, according to a program at the Inter-American charter and by pushback from authoritarian company spokeswoman, who added Exx- A Dialogue: “Secretary General governments and their usually bought-off on would make adjustments as necessary, Almagro’s successful re-election was due allies who invoke anti-imperialism ranting. Reuters reported Thursday. An oil price war reward for his energetic style of leadership But, most importantly, he has enjoyed strong between Saudi Arabia and Russia in combi- and, above all, his principled and forceful support from the governments grounded in nation with rapidly dwindling crude demand approach to the democratic and humanitar- representative democracy, led by the United amid the Covid-19 pandemic has left many ian crisis in Venezuela. While a minority of States, whose deft diplomacy helped deliver Latin American producers struggling to cover member states sought a more conciliatory Almagro’s victory. The OAS needs Almagro production costs, which in turn increases the leader who would return the OAS to its tradi- to maintain its newly found credibility and chances of output cuts. “We are managing tional consensus-based approach, Almagro’s relevance. His priorities will focus on the production rates to ensure safe and respon- unapologetic use of the secretary general’s charter to deal with political issues: Venezu- sible operations,” Janelle Persaud, Exxon’s bully pulpit was ultimately vindicated. We ela, Bolivia and Nicaragua. His 2015 elector- public and government affairs advisor in can expect more of the same in his second al pledge—’more rights for more people’— is Guyana, said in a statement, adding that, term. At the same time, Almagro will face shorthand for the charter’s first article “We continue to monitor the situation closely a more complex set of challenges. The on governments’ obligations to promote and will make adjustments as necessary.” crisis in Venezuela is not going away, but and defend democracy. Look for vigorous, Output at the offshore Liza well, which Exxon the OAS must now simultaneously manage professional, impartial, respected election manages alongside partners Hess Corp. and problematic election processes in Guyana observation, as seen in Bolivia and Guyana, China’s CNOOC, is expected to reach some and Bolivia, not to mention the ongoing support for the independent Inter-American 120,000 barrels per day (bpd) in its first phase. democratic breakdown in Nicaragua. A Commission on Human Rights and the San Production began in December. According to Summit of the Americas, to be hosted by the José-based Inter-American Court of Human Guyana’s finance ministry, the country will get United States, looms in 2021. And Covid-19 Rights, and improved horizontal cooperation around $1.2 million in royalty payments from will strain fragile social services, devastate among members through existing commis- Exxon and its partners recently lifting some economies and provide openings for corrup- sions on combating narcotics, terrorism and one million barrels of crude from the Liza well, tion and autocratic behavior. The OAS, even corruption. An OAS role in Venezuela may Stabroek News reported. Crude prices rose on if in its current state of tight budgets and require partnership with the United Nations, Thursday, with Brent—which many producers institutional weakness, has tools to support the European Union or an ad-hoc Latin Amer- use as a benchmark—approaching $30 a barrel governments or hold them to account, as ican group. Almagro is now well positioned after U.S. President Donald Trump said he the case may be. Secretary General Almagro to press the OAS members who supported expects Russia and Saudi Arabia to announce a will continue to lead from the front, but his him to advance the charter-grounded de- major cut in their output, Reuters reported. Continued on page 4

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue, Copyright © 2020 mocracy agenda—the United States, Canada, compel the secretary general to do so. As Brazil—for badly needed increased funding. he put it several times, ‘The Inter-American Erik Brand Without it, the OAS’ new relevance could be Democratic Charter is the constitution of the Publisher [email protected] fleeting.” Americas.’ It must be complied with. Why is the question centered on whether the stature Gene Kuleta Editor Hector Schamis, adjunct pro- [email protected] fessor at Georgetown University Anastasia Chacón González and columnist at Infobae: “When Almagro’s re-election Reporter & Associate Editor A Almagro arrived in May 2015, confirms that the [email protected] the relevance of the OAS had been eroded, OAS has recovered and its credibility was widely questioned. its centrality.”

The framework of multilateralism inspired — Hector Schamis Michael Shifter, President by Castro-Chavismo—ALBA, Petrocaribe, Rebecca Bill Chavez, Nonresident Senior Fellow Unasur, CELAC—was designed to overshad- Sergio Bitar, Nonresident Senior Fellow ow the OAS. Almagro’s re-election confirms and credibility of the OAS was ‘affected,’ Joan Caivano, Director, Special Projects that the OAS has recovered its centrality. and not on whether it was ‘enhanced’? Michael Camilleri, Director, Rule of Law Program It is, again, the main political forum in the Enhancement is, in fact, the outcome of Kevin Casas-Zamora, Nonresident Senior Fellow hemisphere, a goal he pursued from the very the observation and audit of the electoral Héctor Castro Vizcarra, Nonresident Senior Fellow beginning of his tenure. The Inter-American process in Bolivia, which verified malicious Julia Dias Leite, Nonresident Senior Fellow System is about democracy and human actions undertaken to alter electoral results. Ariel Fiszbein, Director, Education Program rights, principles not always remembered by The European Union arrived at similar con- Peter Hakim, President Emeritus those who invoke an archaic conception of clusions. The ‘controversies’ were motivated Nora Lustig, Nonresident Senior Fellow sovereignty and decry an alleged ‘interven- either by ideology or by an attempt to thwart Margaret Myers, Director, Asia and tionism’ of the OAS. There is no such a thing. Almagro’s re-election. They were not based Latin America Program Manuel Orozco, Director, Migration, As in every international regime, the provi- on an objective analysis of what turned out Remittances & Development sion of public goods is dependent on shared to be, plain and simple, an electoral fraud.” Xiaoyu Pu, Nonresident Senior Fellow norms and accomplished through mutual Jeffrey Puryear, Senior Fellow oversight. Almagro should continue to focus The Advisor welcomes comments on its Q&A Mateo Samper, Nonresident Senior Fellow on the offenders and hold them accountable. section. Readers can write editor Gene Kuleta Tamar Solnik, Director, Finance & Administration The founding documents of the system at [email protected]. Lisa Viscidi, Director, Energy Program Denisse Yanovich, Director of Development and External Relations

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