LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, January 27, 2020 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk How Critical Is Bolivia’s Áñez CEO, DevryBV Sustainable Strategies to Run in May Joyce Chang Global Head of Research, China’s Support Presidential Vote JPMorgan Chase & Co. Interim Bolivian President Jeanine Paula Cifuentes Áñez reversed course, announcing Director of Economic & Fiscal Affairs, for Venezuela? that she will be a candidate for Latin America & Canada, Philip Morris International president in the country’s May 3 Marlene Fernández election. Corporate Vice President for Page 2 Government Relations, Arcos Dorados Peter Hakim BUSINESS President Emeritus, Inter-American Dialogue Banco do Brasil Donna Hrinak Eyes Reforms President, Boeing Latin America The state-controlled lender is Jon E. Huenemann Former Corporate and reportedly looking to implement Government Senior Executive reforms after Brazilian President James R. Jones Jair Bolsonaro intervened in the Chairman, China’s government recently said it would slow some cooperation with Venezuela. Venezuelan bank’s plans to fully privatize it. Monarch Global Strategies President Nicolás Maduro and his Chinese counterpart, Xi Jinping, are pictured in 2018 in Banco do Brasil is seeking to bet- Beijing. // File Photo: Venezuelan Government. Craig A. Kelly ter compete with rivals, according Director, Americas International China’s foreign ministry said this month that it and Venezu- to a report. Gov’t Relations, Exxon Mobil Page 3 John Maisto ela are “slowing down” some of their cooperation initiatives Director, U.S. Education because of “sanctions and other factors.” At the same time, Finance Group Q Venezuelan opposition leader Juan Guaidó has urged the POLITICAL Nicolás Mariscal Chairman, European Union to label as “blood gold” the precious metal that is infor- Peruvian Voters Grupo Marhnos mally mined in Venezuelan jungles and brings in revenue for President Thomas F. McLarty III Elect Fractured Chairman, Nicolás Maduro’s government. To what extent are China and other allies, Congress McLarty Associates such as Russia, propping up Venezuela’s economy? How important is the Carlos Paz-Soldan Peruvian voters on Sunday ap- Partner, gold trade for Venezuela’s economy? Will its economy get any better in peared to elect a Congress made DTB Associates, LLP the coming year, or will it only worsen? up of mostly centrist parties in a Beatrice Rangel special election after President Director, Martín Vizcarra dissolved the AMLA Consulting LLC Luis Vicente León, president of Datanalisis in Caracas: “The body in a controversial move last Jaana Remes September. Partner, general oil and financial sanctions have not achieved the Page 2 McKinsey Global Institute objective for which they were imposed: effecting political Ernesto Revilla Head of Latin American change in Venezuela. It is not a surprise, given the poor track Economics, Citi A record of this strategy in world political history. However, these sanctions Gustavo Roosen Chairman of the Board, have had a relevant impact on the development of Venezuela’s internal Envases Venezolanos economy and its income profile. On the one hand, sanctions have limited Andrés Rozental the operations of the Venezuelan government, not only with the United President, Rozental & Asociados States, but also with some markets that are in line with the revolution, Shelly Shetty such as China, which has been forced to review its public and private Head of Sovereign Ratings, Latin America, Fitch commercial relations, given the risk of sanctions’ secondary effects. However, we could say that the most relevant impact after the contrac- tion of oil revenues has been the diversification and increase of dividend revenue from nontraditional sources. These can be legal or illegal sources that are mostly exempt from sanctions or which are able to evade them, Vizcarra // File Photo: Peruvian Government. Continued on page 3 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Monday, January 27, 2020 POLITICAL NEWS last Sept. 30, saying the move was needed to NEWS BRIEFS break a long-running political impasse with the body, which continually blocked his attempts to At Least 46 Killed in Brazil Peruvians Elect push through anti-corruption reforms. Fractured Congress Flooding, Landslides At least 46 people have been killed in Brazil in Legislative Vote Bolivia’s Interim as a result of flooding and landslides follow- President to Run ing record rainfall in some parts of the South Peruvians on Sunday appeared to elect a American country, The Independent reported fractured Congress made up of mostly centrist in May Election Sunday. At least 37 people died in Minas Gerais parties in a special legislative election to state and nine others in Espírito Santo state, reconstitute the body after President Martín Interim Bolivian President Jeanine Áñez on according to local disaster officials, who also Vizcarra dissolved it last September, the Asso- Friday announced that she will be running said 28 people are missing. Minas Gerais ciated Press reported. Early counts from Peru’s for president in the country’s upcoming May Governor Romeu Zema has declared a state National Office of Electoral Processes and 3 election, which will serve as a re-run of of emergency in more than 47 cities. Nearly a flash poll by the Ipsos polling firm showed October’s disputed voted that brought protests 20,000 people have been evacuated. that no party appeared to be emerging as a and prompted former leader Evo Morales to clear winner in the election, in which 22 parties resign, El Diario reported. Áñez had previ- ously suggested she would not run, saying it Thousands Rally in would not be correct for her to do so, Reuters This is the start Madrid in Support of reported. However, Áñez said Friday that she of a change.” had changed her mind. “The dispersed vote Venezuela’s Guaidó — Lima Mayor Jorge Muñoz and candidates who fail to bring Bolivians Thousands of supporters, some holding signs together has led me to make this decision,” demanding democracy, came out to support competed. Early returns showed the rebranded Venezuelan opposition leader Juan Guaidó Popular Action party and the new Purple Party in Madrid on Saturday, Reuters reported. in the lead, but each with less than 15 percent Guaidó, whom dozens of countries recognize of the vote. The once-powerful Popular Force, as Venezuela’s legitimate president, was in the party led by opposition leader Keiko Fuji- Spain for the last leg of his European tour. mori, appeared to have lost substantial ground. Guaidó did not meet with socialist Spanish It appeared to garner fewer than 10 percent of Prime Minister Pedro Sánchez, but he met with the legislative seats, Reuters reported. “This Foreign Minister Arancha González as well as is the start of a change,” Lima Mayor Jorge Madrid’s mayor and regional president, both of Muñoz of the Popular Action party said Sunday Áñez // File Photo: Bolivian Government. the conservative People’s Party. in a tweet. The new Congress gives Vizcarra a new opportunity to push his legislative reforms, she said in announcing her candidacy at an including anti-corruption reforms that he says event of her social democratic party in La the country needs. However, it could also mean Paz. “We respect the decision of those who Argentine Economy gridlock. Vizcarra will need to build alliances have yet to join, I extend a hand to them and Minister to Meet With IMF, with several factions in order to advance his assure them the door remains open to join this U.S. Treasury Officials agenda. “We think, on balance, that incoming broad and diverse front that seeks to work for Argentine Economy Minister Martín Guzmán lawmakers are more likely to work with the all,” she added. Morales, who is barred from plans to meet today with officials of the Inter- executive on a common agenda,” Abhijit Surya, running in the May election, a week ago named national Monetary Fund and the U.S. Treasury a Peru analyst at The Economist Intelligence his former economy minister, Luis Arce, as during a visit to New York, MercoPress report- Unit, told the AP. It was unclear when the full the presidential candidate of his Movement ed. Guzmán is scheduled to meet with Luis count with official results would be released. to Socialism party. Former Presidents Jorge Cubeddu, the head of Argentina’s IMF mission. The 130 legislators elected on Sunday will Quiroga and Carlos Mesa have also announced He also plans to meet with investors and serve only until next year’s scheduled presiden- their candidacies, as has former civic leader analysts. Argentina is facing difficult negotia- tial and congressional elections and will not Luis Fernando Camacho, América Economía tions over some $100 billion in sovereign debt, be eligible to run for re-election. Vizcarra took reported. On Sunday, Áñez also announced that including with the IMF. the controversial action of dissolving Congress she had asked all of her cabinet ministers to COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Monday, January 27, 2020 resign, El Diario reported. Áñez said the action FEATURED Q&A / Continued from page 1 was a normal step, given her candidacy and the upcoming election. [Editor’s note: See related such as remittances, repatriation of savings, on those doing business with PDVSA or Q&A in the Jan. 13 issue of the Advisor.] nontraditional