LATIN AMERICA ADVISOR a DAILY PUBLICATION of the DIALOGUE Thursday, July 29, 2021

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Thursday, July 29, 2021

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Will a New Leader Haiti’s Henry CEO, DevryBV Sustainable Strategies Joyce Chang Vows Elections as Global Head of Research, JPMorgan Chase & Co. Be Able to Bring Soon as Possible Paula Cifuentes Haitian Prime Minister Ariel Henry Director of Economic & Fiscal Affairs, said the country will hold elec- Latin America & Canada, Haiti Together? tions as soon as possible. Henry Philip Morris International said his government will work to Marlene Fernández Corporate Vice President for make elections free and fair. Government Relations, Page 2 Arcos Dorados (McDonald’s) Peter Hakim President Emeritus, BUSINESS Inter-American Dialogue Mexico’s Pemex Donna Hrinak Senior VP, Corporate Affairs, Swings to a Profit Royal Caribbean Group Jon E. Huenemann in Second Quarter Council Member, Mexican state oil company Pemex GLG Inc. reported a net profit of 14.4 billion James R. Jones pesos ($721 million) for the Chairman, Ariel Henry (pictured), whom Haitian President Jovenel Moïse appointed prime minister Monarch Global Strategies shortly before his assassination, took office last week. // File Photo: Pan American Health second quarter of the year. Crude Organization. production rose 3.8 percent as Craig A. Kelly compared to the same period a Senior Director, Americas In a political compromise, Ariel Henry was sworn in July Int’l Gov’t Relations, Exxon Mobil year ago. Barbara Kotschwar 20 as Haiti’s prime minister. Henry took office after Claude Page 3 Executive Director, Visa Economic Joseph, who had led the country since the assassination Empowerment Institute Q of President Jovenel Moïse, agreed to step down as prime POLITICAL John Maisto Director, U.S. Education minister and become Henry’s foreign minister. How likely is Henry to Finance Group Castillo Takes accomplish his stated goals, which include re-establishing confidence Nicolás Mariscal Office as Peru’s Chairman, in the government, fighting corruption, reinvigorating the economy and President Grupo Marhnos making Covid-19 vaccines available to all Haitians? What actions by Thomas F. McLarty III Leftist schoolteacher Pedro Henry will be necessary in order for him to accomplish those goals? Chairman, Castillo took office Wednesday as McLarty Associates Will the country’s elections, scheduled for Sept. 26, happen as planned, president of Peru. In his inaugural Beatrice Rangel address, Castillo said colonial-era Director, and what must be done to assure they are free and fair? How much AMLA Consulting LLC are the United States and other international actors involved in Haiti’s divisions still separate Peruvians Jaana Remes from each other. Partner, politics, and what effects will such involvement have on Henry’s ability Page 2 McKinsey Global Institute to govern? Ernesto Revilla Head of Latin American Economics, Citi Fulton Armstrong, senior fellow at American University’s Gustavo Roosen President, Center for Latin American & Latino Studies and former IESA U.S. National Intelligence Officer for Latin America: “The Andrés Rozental handover from Joseph to Henry itself made sense as a President, Rozental & Asociados A short-term measure to create an impression of order, but the ‘Core Group’ Shelly Shetty players that forced the deal must know that papering over problems is Managing Director, Sovereigns Fitch Ratings not a solution. Henry sits atop a political and social volcano, and he lacks the government, police and judiciary tools with which to prevent further eruptions. The United States, OAS, and others in the hemisphere stood idly by, and even supported, Moïse as he expanded his grip on power and, like his opponents, increasingly resorted to surrogate violence. While Castillo // Photo: Facebook Page of Pedro Castillo. Continued on page 3

POLITICAL NEWS limited support in Congress, the lack of his NEWS BRIEFS own political party, a radical electoral platform Castillo Inaugurated and allies, and high expectations for change,” Salvadoran Judge Orders then-Congressman Gino Costa told the Advisor Arrest of 10 Ex-Officials in a Q&A published July 22. as Peru’s President Including Sánchez Cerén Leftist rural schoolteacher Pedro Castillo, a Haiti’s Henry Vows A judge in El Salvador on Wednesday ordered political novice who has never before held an the pre-trial arrest of 10 former government elected office, was sworn in Wednesday as to Hold Elections officials, including ex-President Salvador Sán- president of Peru. Castillo defeated con- chez Cerén, on corruption charges that involve servative former lawmaker Keiko Fujimori as Soon as Possible $2.6 million in illicit money, the Associated in a razor-thin June 6 runoff that election Press reported. All of the former officials were officials took six weeks to decisively call. In Haitian Prime Minister Ariel Henry held his part of the government of ex-President Mauri- his inaugural speech, which also marked the first press conference on Wednesday, where cio Funes, who has received political asylum in country’s bicentennial, Castillo said colo- he pledged to hold elections as soon as Nicaragua. The court said it would work with nial-era divisions still separate Peruvians from possible following the slaying of President Interpol to seek the arrest of Sánchez Cerén, each other, Reuters reported. “The defeat of Jovenel Moïse on July 7, the Associated Press who is reported to be out of the country, and the Inca Empire gave rise to the colonial era, reported. At least 26 people have been arrested four others who are at large. it was then ... that the castes and differences in Moïse’s killing, including 18 former Colom- that persist to this day were established,” said bian soldiers and the head of Moïse’s security Castillo, whose support was fueled by the rural detail. Authorities are still searching for other Ecuadorean Court poor. “It is the first time that this country will suspects. Henry said in the 10-minute briefing be governed by a peasant,” Castillo added. In a that the mission of his government is to Revokes Citizenship conciliatory message to investors, Castillo said prepare the necessary conditions for “the orga- of WikiLeaks’ Assange nization of free, honest, transparent elections, he would respect private property and set clear An Ecuadorean court this week revoked with the broad participation of the population,” rules for the mining sector. However, he also WikiLeaks founder Julian Assange’s citizenship the Miami Herald reported. Henry will need to called for a new constitution and said he would in the South American country, CNN reported decide whether to keep Sept. 26 as the date for crack down on monopolies in the utilities and Wednesday. Then-Ecuadorean President Lenín the first round of presidential and legislative financial services sectors, leading bonds to fall, Moreno’s government granted citizenship to voting. He will also need to decide whether it Bloomberg News reported. Castillo added that Assange in January 2018. Assange had spent will keep the nine-member Provisional Electoral he would seek to regain Peru’s sovereignty over nearly seven years holed up in Ecuador’s em- Council, which the Supreme Court refused to its natural resources and renegotiate free-trade bassy in London but was eventually arrested in swear in after Moïse handpicked its members, deals. Additionally, Castillo said he will not 2019 and is currently imprisoned in Britain. live in the presidential palace, the House of the Miami Herald reported. Pizarro, and instead will turn it into a museum. “I will not rule from the House of Pizarro, Former Mexican because I believe that we have to break with Union at BHP’s colonial symbols to end the ties of domination Governments Spent Escondida Mine in that have been in force for so many years,” Chile Urges Strike Vote said Castillo, Reuters reported. “We will cede $61 Mn on Spyware this palace to the new Ministry of Cultures The union at BHP’s massive Escondida copper to be used as a museum that showcases our Previous Mexican governments spent $61 mine in Chile on Wednesday urged its members history, from its origins to the present.” Castillo million on spyware from Israeli company to vote to strike, Reuters reported. Negoti- succeeds Francisco Sagasti, whom Peru’s NSO Group, Mexico’s top security official said ations over the past two months between Congress appointed last November following Wednesday, the Associated Press reported. the company and its union have been held in weeks of turmoil in the country’s politics. Governments around the world have reportedly secret, and the union has to submit any offer by Castillo now faces a deeply divided Congress used the spyware, called Pegasus, to spy on the company to a vote by its more than 2,300 that will make it challenging for him to push opponents and journalists. Mexican Public members before the present offer expires on through his agenda. “Castillo’s position was Safety Secretary Rosa Icela Rodríguez said of- Aug. 1. Output levels at the copper mine, the already precarious given his lack of govern- ficials have found records for 31 contracts for world’s largest, play a role in global pricing for ment experience, a narrow margin of victory, the spyware signed during the administrations the commodity as well as Chilean economic activity.

COPYRIGHT © 2021, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Thursday, July 29, 2021 of former President Felipe Calderón, who was FEATURED Q&A / Continued from page 1 in office from 2006 to 2012, and former Presi- dent Enrique Peña Nieto, who served from 2012 Washington, the OAS and others focused on holding national elections is entrusted to the to 2018. Some of the contracts may have been effecting regime change in Cuba, Vene- presidency. However, the normal succes- disguised as purchases for other equipment, zuela and Nicaragua, a poor little country sion involving the head of Haiti’s judiciary she said. Last week, the Mexican government’s nearby, where we could have had influence, could not take place because of his death in top anti-money laundering investigator said careened toward collapse. Henry needs June. This wobbly political apparatus faces officials from the two previous administrations emergency humanitarian assistance to deal unresolved the two hallmarks of Moïse’s had spent some $300 million on spyware. with Covid and some kind of international tenure: a proposed constitutional reform and police presence—even small multinational a referendum process, as well as delayed deployments have worked in the past. national elections, both scheduled for Sept. BUSINESS NEWS 26. Obviously, this is unrealistic. The ambiva- lent position of the United States regarding We can’t run away the constitutional referendum—belatedly Mexico’s Pemex when we hear the opposing it—did not help matters. But nam- Swings to a Profit first gunshots in ing a U.S. special envoy should now be seen the distance as our as a confidence-building measure for Haiti’s for Second Quarter delegation did at key political stakeholders. An initial policy Moïse’s funeral.” adjustment would be for the United States to Mexican state oil company Pemex on Wednes- — Fulton Armstrong view holding elections as a desirable objec- day reported a net profit of 14.4 billion pesos tive, with the caveat that the process needs ($721 million) in the second quarter, Reuters to take stock of the Haiti’s political realities. reported. Crude production rose 3.8 percent Washington and Bogotá need to support How international actors also respond to as compared to the same period a year earlier, an apolitical investigation into the Moïse emerging preferences of key sectors of civil with profits boosted by higher prices for oil. assassination, including the role of their society is also essential—this would suggest However, financial debt at Pemex surpassed citizens and ‘security’ companies. Henry first a reset of the constitutional reform $115 billion at the end of the quarter, raising also needs the United States and others to process toward a more credible outcome, alarms among investors over the sustainability put on notice all Haitian parties, including followed by national elections. The United of its debt burden. In an earnings call Wednes- the wealthy elites who wield massive power States and other actors will need to be agile day, Pemex CEO Octavio Romero pushed back behind the scenes (many of whom have enough to encourage the development of a on a decision this week by Moody’s Investors U.S. residency or citizenship), that they’ll be working consensus that does not have an Service to downgrade Pemex’s ratings further held accountable for obstructing progress open-ended timeline. This will require hard into junk status. “It seems to us that it’s an toward stability and inclusion. Any effort by work.” action taken by the credit rating agency that Henry or a successor to govern and prepare lacks professionalism, ethics—in short, it’s the country for meaningful elections will Cécile Accilien, board member something shameful,” Romero said, Bloomberg be doomed if the international community of the Haitian Studies Asso- News reported. Pemex was also in headlines doesn’t get serious. We can’t run away when ciation: “The key is knowing Wednesday over a proposal from President we hear the first gunshots in the distance as A whether Henry will really Andrés Manuel López Obrador’s administra- our delegation did at Moïse’s funeral.” listen to the majority of Haitians and build tion to set a maximum price for cooking and consensus and trust. The only way to ensure heating gas, a practice that hearkens back to Georges Fauriol, fellow at the an adequate measure of security is by before major energy reforms nearly a decade Caribbean Policy Consortium curtailing the gang violence that has taken ago that introduced competition to Pemex’s and senior associate at the over the country in the last two decades monopoly role in the sector. López Obrador A Center for Strategic & Interna- and which has worsened this past year. To tried this week to invoke emergency powers to tional Studies (CSIS): “Prime Minister Ariel have an economy in the midst of a pandem- decree a six-month price cap, but the country’s Henry governs as Haiti’s interim leader with ic, you must have security for all Haitians federal economic competition commission has thin political and constitutional margins. as it relates to all forms of violence, food pushed back, saying in a statement that current He faces deep challenges that the inter- security, access to education and health law does not allow the president to set price national community can help address but care and respect for all human beings. ceilings, the Associated Press reported. cannot resolve. For starters, the function of People are nervous about the elections, and Continued on page 4

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue ISSN 2163-7962 that is understandable. A president was just to his allies. 2) Disarm the gangs and bring killed in the most horrific and inhumane way, to justice the gang leaders who have been Erik Brand with lots of rumors and no clear answers as accused of murders. 3) Make it safe for the Publisher [email protected] to how it happened; yet there is talk about 15,000 internally displaced Haitians to move elections. Who will the elections benefit? Is back to their neighborhoods. 4) Rescind Gene Kuleta Editor Henry sincere? Does he have a willingness the unpopular decrees that Moïse signed. [email protected] to ‘chavire chodyè a’ (literally ‘overthrow the 5) Allow remittances from the diaspora Anastasia Chacón González boiler’)? That is, is he willing to change the to be given in U.S. dollars. 5) Cancel the Reporter & Associate Editor paradigm and work with all sectors of civil [email protected] society in order to create a new paradigm in which Haitians feel respected, maintain For him to succeed, their dignity and have access to health care, he must break with food security and education—the minimum the very same people Michael Shifter, President that every human being deserves? How will who put him in power.” Rebecca Bill Chavez, Nonresident Senior Fellow Henry be able to build trust in less than — Francois Pierre-Louis Bruno Binetti, Nonresident Fellow two months before the elections? How will Sergio Bitar, Nonresident Senior Fellow he create a space for true conversations Joan Caivano, Senior Advisor among different sectors of society and allow new constitution. 6) Create a truth and Santiago Cantón, Director, Peter D. Bell Haitians to freely choose and elect their own reconciliation commission to investigate all Rule of Law Program leaders? There must be clear transparency the political crimes that took place under Kevin Casas-Zamora, Nonresident Senior Fellow as to how the United States and other coun- Moïse. Haiti needs free and fair elections as Julia Dias Leite, Nonresident Senior Fellow tries and international partners are ‘helping’ soon as possible to restore the democratic Ariel Fiszbein, Director, Education Program Haiti and who exactly they are helping. There order. However, it would be an insult to the Sandra García Jaramillo, Nonresident Senior Fellow are a lot of empty statements about what population if Henry maintained the Sept. 26 Selina Ho, Nonresident Senior Fellow needs to happen in order to support civil election date as conditions do not exist right Edison Lanza, Nonresident Senior Fellow society. Many groups inside and outside now to hold free and fair elections. He must Nora Lustig, Nonresident Senior Fellow Margaret Myers, Director, Asia Program Haiti as well as in the United States are build trust with the population, restart the Manuel Orozco, Senior Fellow working on preventing stability so that they economy and put together a new electoral Xiaoyu Pu, Nonresident Senior Fellow can enrich themselves. The international council. For the past 10 years, the United Jeffrey Puryear, Senior Fellow community needs to stop working behind the States and the ‘Friends of Haiti’ have created Tamar Solnik, Director, Finance & Administration scenes with the 1 percent who monopolize more problems for the people instead of Lisa Viscidi, Director, Energy Program the wealth and instead allow Haitians living helping the country transition to democracy. Denisse Yanovich, Director of Development in Haiti to find their own solution.” The international community should have never accepted Moïse’s decision to skip par- Latin America Advisor is published every Francois Pierre-Louis, professor liamentary and local elections. The United business day, except for major U.S. holidays, by the Inter-American Dialogue at of political science at Queens States should have engaged directly with 1155 15th Street NW, Suite 800 College, City University of New civil society groups, primarily the church, hu- Washington, DC 20005 York: “Interim Prime Minister man rights organizations and the opposition www.thedialogue.org A Subscription inquiries are welcomed at Ariel Henry has an impossible assignment. parties. A major task of the international [email protected] Like Haitians would say in Kreyol, ‘Yo ba community now is to help Henry obtain li yon siga limen nan 2 bout’—he has been the people’s trust by supporting these six The opinions expressed by the members of the Board of Advisors and by guest commentators do not necessarily given a cigar that is lit at both ends. For important measures and letting the chips fall represent those of the publisher. The analysis is the sole him to succeed, he must break with the where they may.” view of each commentator and does not necessarily very same people who put him in power. represent the views of their respective employers or firms. The information in this report has been obtained from Members of the opposition parties would The Advisor welcomes comments on its Q&A reliable sources, but neither its accuracy and completeness, be willing to join his administration if he section. Readers can write editor Gene Kuleta nor the opinions based thereon, are guaranteed. If you have any questions relating to the contents of this publication, takes the following measures: 1) Cancel at [email protected]. contact the editorial offices of the Inter-American Dialogue. the tax privileges Martelly and Moïse gave Contents of this report may not be reproduced, stored in a retrieval system, or transmitted without prior written permission from the publisher.