LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, January 29, 2020 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Has the Special Death Toll in CEO, DevryBV Sustainable Strategies Brazil Flooding Joyce Chang Global Head of Research, Election Changed Rises to 52 JPMorgan Chase & Co. In addition to the deaths, at least Paula Cifuentes 65 people have been injured and Director of Economic & Fiscal Affairs, Peru’s Politics? two are missing after heavy rains Latin America & Canada, Philip Morris International ponded Minas Gerais state. Marlene Fernández Page 2 Corporate Vice President for Government Relations, Arcos Dorados BUSINESS Peter Hakim President Emeritus, Banco do Brasil Inter-American Dialogue Labor Charges Donna Hrinak President, Boeing Latin America ‘Absurd’: Union Jon E. Huenemann State-controlled lender Banco do Former Corporate and Brasil’s plan to make it easier to Government Senior Executive hire and fire staff is “absurd,” said James R. Jones a bank employees union. A leader Chairman, of the union called the plan an Monarch Global Strategies Peru’s Popular Force party, led by Keiko Fujimori, was previously the biggest opposition party attack on workers’ rights. Craig A. Kelly in Peru’s Congress. After Sunday’s election, it has been left with a fraction of the seats it once Director, Americas International had. // File Photo: TV Perú. Page 3 Gov’t Relations, Exxon Mobil Peruvians selected legislators on Sunday in an election that John Maisto ECONOMIC Director, U.S. Education President Martín Vizcarra called after he dissolved Congress Finance Group last September. Who were the biggest winners and losers IMF Sending Nicolás Mariscal Chairman, Q in the election? What do the results mean for Vizcarra and Mission to Grupo Marhnos his agenda? How well will the president be able to work with the new Argentina Thomas F. McLarty III Chairman, Congress, and will he finally be able to win legislative approval for his Following Talks McLarty Associates contentious anti-corruption reforms? The International Monetary Fund Carlos Paz-Soldan Partner, will send a mission to Argentina DTB Associates, LLP following “very productive” talks Katya Salazar, executive director of the Due Process of Law Beatrice Rangel in New York with Argentine Director, Foundation: “Without a doubt, the big losers of Sunday’s Economy Minister Martín Guzmán, AMLA Consulting LLC election were Popular Force (led by Keiko Fujimori) and a spokesman said. Jaana Remes Page 2 Partner, APRA, who ‘working as a team’ turned the Peruvian Congress McKinsey Global Institute A into a permanent obstacle to the country’s governance and a space for Ernesto Revilla Head of Latin American protecting corrupt networks and actors. After having been the two main Economics, Citi characters of Peruvian politics in recent years (for the wrong reasons), Gustavo Roosen Chairman of the Board, APRA will not have a single representative in the new Congress, and Envases Venezolanos Popular Force won’t have more than eight. The biggest surprises were the Andrés Rozental Popular Agricultural Front of Peru (FREPAP)—which is religious, messian- President, Rozental & Asociados ic and has strong links to the rural sector, as well as the more conserva- Shelly Shetty tive sector of the Evangelical Church—and Unión por el Perú—a combina- Head of Sovereign Ratings, Latin America, Fitch tion of nationalism and indigenism linked to Antauro Humala (the brother of former President Ollanta Humala), currently in prison for the crime of rebellion. Both parties will have at least 32 legislators. The new Congress will be quite heterogeneous, extremely fragmented and integrated by Guzmán // File Photo: @Martin_M_ new actors in politics who will have only a year and a half to learn on the Guzman via Twitter. Continued on page 2 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Wednesday, January 29, 2020 POLITICAL NEWS News reported. Minutes later, she was seen in NEWS BRIEFS a video that circulated on social media. “This Peru’s Keiko Fujimori isn’t justice,” she said. “As woman, as wife, as Death Toll in Brazil mother, I am going to bring out all the strength Flooding Rises to 52 Returned to Prison in that I have.” Fujimori added that her husband would seek backing from foreign governments The death toll from last week’s heavy rains in Laundering Probe and other groups for her release. Her attorney, Brazil’s Minas Gerais state has grown to 52 Giuliana Loza, vowed to appeal the judge’s people, with at least 65 injured and two others A Peruvian judge on Tuesday ordered opposi- ruling. Fujimori’s jailing came just two days missing, the state civil defense agency said tion leader Keiko Fujimori back to prison for after her Popular Force party fared poorly in the on Tuesday, Reuters reported. Most losses 15 months, La República reported. The leader country’s legislative election. Its representation occurred in the state capital of Belo Horizonte, of the Popular Force party, Fujimori is under in Peru’s Congress fell to just 12 seats from 72. with 13 dead. Nearly 33,000 people have been investigation in a money laundering case and displaced or evacuated from their homes, has already spent 13 months in jail. However, rescue workers said. Minas Gerais last week Peru’s top constitutional court ordered her re- ECONOMIC NEWS had the wettest 24-hour period since precipita- lease last November, and prosecutors appealed tion records began 110 years ago, registering that ruling. Fujimori was taken into custody on an accumulated rainfall of 172 millimeters (6.8 Tuesday night, Reuters reported. Prosecutors IMF Sending Mission inches) from Thursday to Friday. accuse Fujimori of illegally receiving more than to Argentina After $1 million from Brazilian construction conglom- erate Odebrecht and hiding the money through Talks With Guzmán Strong 7.7-Magnitude a network of front men, the Associated Press Quake Jolts Caribbean reported. Fujimori denies wrongdoing. Fujimori The International Monetary Fund will send a arrived in court as Judge Víctor Zúñiga was mission to Argentina in February to discuss the An earthquake of 7.7 magnitude and a series finishing the announcement of his decision to South American nation’s economic prospects of aftershocks jolted the Caribbean on Tuesday return her to prison and was immediately taken and debt, IMF spokesman Gerry Rice said Tues- afternoon, and there were no reports of injuries to the Chorrillos women’s prison in Lima, BBC day following a “very productive” meeting with or serious damage. The earthquake struck at 2:10 p.m. local time. It was centered 86 FEATURED Q&A / Continued from page 1 miles northwest of Montego Bay, Jamaica and job. This scenario is not necessarily bad for did well. Meanwhile, Keiko Fujimori’s Fuerza 87 miles south-southwest of Niquero, Cuba, President Vizcarra, who will hardly find an Popular party suffered the greatest loss, as according to the U.S. Geological Survey. The opposition force as well prepared as the one it obtained only a fraction of the seats it won quake had a depth of six miles. he found in the previous Congress, under the in the 2016 elections. A divided Congress in leadership of APRA and Fujimori. Peruvian which no group is even close to a majority citizens should see these results as a wake- and with a diminished presence of Fujimori’s Venezuela’s National up call and attend to deeper processes that party will help lower tensions with President have been taking place discreetly in our Martín Vizcarra. This could facilitate pending Assembly Allocates country. The old left-versus-right dichotomy political reforms he was pushing before $20 Mn for Litigation becomes futile in this new scenario.” dissolving Congress, including changes to Venezuela’s opposition-run National Assembly parliamentary immunity from prosecution, on Tuesday approved $20 million to be held Maria Luisa Puig, Latin America though the window for approval will be in accounts in the United States to pay for analyst at the Eurasia Group: small. Structural reforms beyond some litigation abroad, part of its efforts to shield “Sunday’s legislative elections political initiatives are unlikely. There is no the country’s offshore assets from lawsuits by showed that distrust of the political appetite to advance reforms that A creditors, Reuters. The funds will be collected political class is deep, following three years could become unpopular. Vizcarra will avoid from accounts previously held by members of of turmoil that included clashes between putting at risk his levels of support, which President Nicolás Maduro’s government, which the president and Congress and a series have remained high, largely as a result of his were frozen last year as part of U.S. sanctions. of corruption scandals. Parties not linked confrontation with dismissed lawmakers and Investors holding Venezuela’s defaulted bonds to corruption or ones that made the fight anticorruption efforts. Furthermore, some have long seen the country’s foreign assets, against graft the focus of their campaigns incoming lawmakers could push for some including U.S.-based refiner Citgo, as attractive. Continued on page 4 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Wednesday, January 29, 2020 Argentine Economy Minister Martín Guzmán, the Buenos Aires Times reported. Guzmán met THE DIALOGUE CONTINUES with IMF officials in New York on Tuesday, an event Rice described as “an opportunity to con- tinue the ongoing dialogue and hear from the Are Latin America’s Militaries minister about the Argentine authorities’ eco- nomic plans and exchange views on the debt Taking on Too Much Power? sustainability analysis.” Tuesday’s meeting was Over the past year, Latin as a case in point. When President Calderón Guzmán’s first contact with the international American militaries appear to assigned law enforcement responsibilities be taking on more visible roles to the armed forces in 2006, it was meant to Q in countries’ domestic security be a short-term solution to an urgent public The meeting was Guzmán’s and politics.