LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, April 12, 2017 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group ECONOMIC Devry Boughner Vorwerk Corporate VP, Global Corporate Affairs Is Venezuela’s Argentina Cargill Joyce Chang Expecting $14 Bn Global Head of Research, Government in Investment JPMorgan Chase & Co. W. Bowman Cutter This Year Former Partner, Domestic and foreign compa- E.M. Warburg Pincus Irreparably Broken? nies are expected to invest the Dirk Donath Senior Partner, money, making good on previously Catterton Aimara announced investments, said Barry Featherman the head of the government’s Senior Director, Investment and Trade Promotion International Government Affairs, Agency. Gilead Sciences Page 3 Marlene Fernández Corporate Vice President for Government Relations, BUSINESS Arcos Dorados Peter Hakim China Southern President Emeritus, Inter-American Dialogue Airlines Begins Donna Hrinak Flights to Mexico President, Boeing Latin America The inaugural fl ight was the fi rst Jon Huenemann Violent protests, like the one pictured a week ago, have become a regular occurrence this Vice President, U.S. & Int’l Affairs, month in Venezuela. // Photo: Democratic Unity Roundtable. to be operated to Latin America by Philip Morris International a domestic Chinese carrier. James R. Jones Venezuela has been roiled by multiple protests this month, Page 2 Chairman, ManattJones Global Strategies with tens of thousands of anti-government demonstrators Craig A. Kelly marching in Caracas. The unrest was sparked after the POLITICAL Director, Americas International Q Gov’t Relations, Exxon Mobil country’s Supreme Court effectively dissolved the country’s Brazilian Supreme John Maisto legislature but then reversed the move following widespread condem- Court Justice OKs Director, U.S. Education Finance Group nation over fears that the country was lurching toward a dictatorship. New Investigations Nicolás Mariscal Meanwhile, the legislature has begun the process of removing pro-gov- Edson Fachin, the Supreme Court Chairman, justice overseeing the massive Grupo Marhnos ernment Supreme Court justices. Is the relationship among Venezuela’s branches of government irreparably damaged? How can the country Petrobras graft investigation, Thomas F. McLarty III approved new investigations of Chairman, resolve this constitutional deadlock? Is violence in Venezuela likely to McLarty Associates dozens of politicians. The probes Carlos Paz-Soldan spin out of control and lead to regime change before next year’s sched- target nearly a third of President Partner, uled elections? Michel Temer’s cabinet. DTB Associates, LLP Page 2 Beatrice Rangel Director, Michael Shifter, president of the Inter-American Dialogue: AMLA Consulting LLC Gustavo Roosen “Not surprisingly, the Venezuelan Supreme Court’s decision Chairman of the Board, to dissolve the National Assembly, albeit partially rescinded, Envases Venezolanos provoked an international outcry as well as the most signifi - Andrés Rozental A President, Rozental & cant street protests in Venezuela since 2014. The government’s arbitrary Asociados and Senior Policy Advisor, Chatham House and unjustifi ed decision to bar opposition leader Henrique Capriles from Shelly Shetty running for offi ce further aggravated the tension and rancor and fueled Head, Latin America Sovereign Ratings, Fitch Inc. the constitutional crisis between the executive and legislative powers. So Roberto Sifon-Arevalo far, attempts at dialogue between fractured opposition forces and a large- Managing Director, Americas Sovereign & Public Finance Ratings, ly intransigent government—with factions that seem prepared to close Standard & Poor’s ranks—have failed to yield positive results. In light of the extreme gravity Fachin // File Photo: Brazilian of the country’s conditions, there is always the chance that violence could Government. Continued on page 2 COPYRIGHT © 2017, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Wednesday, April 12, 2017 POLITICAL NEWS largest ever of politicians in Brazil. “The list is NEWS BRIEFS enormous … it shows that the [political] envi- Brazilian Judge OKs ronment was rotten,” he told The Wall Street Protesters Hurl Objects Journal. Brazil’s Senate president, Eunicio at Venezuela’s Maduro Investigations of Oliveira, said he would defend himself against any allegations. The newspaper was unable to Venezuelans threw objects and jeered at Dozens of Politicians reach Chamber of Deputies Speaker Rodrigo President Nicolás Maduro at the close of a rally Maia for comment. Some of the politicians on Tuesday amid mounting protests against A Brazilian Supreme Court justice on Tuesday from Temer’s Brazilian Democratic Movement the unpopular leftist leader over an economic approved new corruption investigations into Party as well as the leftist Workers’ Party who and political crisis, Reuters reported. Television the activities of dozens of politicians, including are being targeted were already the subjects of footage showed a crowd swarming the vehicle nearly a third of President Michel Temer’s slower-moving corruption investigations, The Maduro was standing on as he waved goodbye cabinet and the leaders of both chambers New York Times reported. Also, members of at the end of a military event in San Felix in the of Congress. In all, Justice Edson Fachin ap- Temer’s cabinet and sitting members of Con- southeastern state of Bolívar. Five youth males proved more than 74 investigations, including gress are shielded by special protections that were arrested for throwing “sharp objects” at probes of 60 sitting members of Congress and effectively prevent many of them from being the vehicle, according to a report by a local Temer’s powerful chief of staff, Eliseu Padilha. imprisoned. “The cost in terms of reputation National Guard division. Further details were The country’s ministers for foreign affairs, is low since this is something that’s already not immediately available, and the Informa- agriculture, commerce and trade, as well as the priced in,” Marcus Melo, a political scientist at tion Ministry did not respond to a request for secretary-general of the presidency, Moreira the Federal University of Pernambuco, wrote in comment. Franco, are also targeted in the probe. Fachin an analysis published in local daily newspaper is overseeing cases related to the sprawling O Estado de S.Paulo. In his ruling, Fachin noted corruption cash involving state-run oil company that prosecutors had reviewed evidence includ- China Southern Airlines Petrobras. “This is hitting at the heart of ing “mentions of the participation of Michel Begins Flights to Mexico government, especially as these are important Temer” in connection with investigations of ministers for Temer,” Rafael Cortez, a political some of his top allies. However, Fachin also China Southern Airlines fl ew its inaugural fl ight scientist at the Tendências consultancy in São said Temer has “temporary immunity” that pre- from Guangzhou to Mexico City via Vancouver, Paulo, told the newspaper. “This will create vents him from being investigated for actions the fi rst route from China to a Latin American even more turbulence and increase the urgency that did not occur during his presidency, which country to be operated by a domestic Chinese to pass economic reforms.” Thiago de Aragão lasts until the end of next year. [Editor’s note: carrier, the Mexican government said Tuesday, of political consulting group Arko Advice in See Q&A on corruption in Brazil in the Feb. 8 Reuters reported. In recent years, Chinese tour- Brasília said the investigation was likely the issue of the Advisor.] ism to Mexico has been on the rise, with 74,300 Chinese tourists visiting Mexico last year, up FEATURED Q&A / Continued from page 1 35.5 percent year-over-year. The Mexican gov- ernment expects more than 100,000 Chinese spread and even get out of control. More a lot of money, at stake. In this context, the tourists to visit the country this year. likely, however, is that violence will be largely international community should play a con- contained, the government will hold on, and structive role and apply pressure to ensure the country will hold presidential elections that at least minimally acceptable conditions Brazil to Hold New late next year. At that time, Chavismo will for electoral competition are met.” face its most severe test in two decades, Round of Oil Auctions and will probably be voted out of offi ce, giv- Julia Buxton, professor of in November en the widespread misery and discontent. In comparative politics at the Brazil’s National Energy Council on Tuesday the meantime, the opposition needs to focus School of Public Policy of said a third round of pre-salt auctions in on developing effective leadership and a Central European University A four areas in the Santos and Campos Basins broadly appealing alternative vision and set in Budapest: “The Supreme Court did not would be held in November, Reuters reported of policies for Venezuela. To be sure, such a seek to dissolve the legislature; it under- Tuesday. The areas for the auction include the scenario will confront enormous obstacles, took a catastrophically clumsy intervention Pau-Brasil, Peroba, Alto de Cabo Frio Oeste and as many government offi cials will resist giv- that specifi cally focused on the issue of Alto de Cabo Frio Central prospects, according ing up power. There are many interests, and authority to negotiate joint ventures in the to a document released