LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Tuesday, July 7, 2020 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Are Big Changes Authorities Arrest CEO, DevryBV Sustainable Strategies Two Sons of Joyce Chang Global Head of Research, in Store for the DR Ex-Panamanian JPMorgan Chase & Co. President Paula Cifuentes Director of Economic & Fiscal Affairs, Under Abinader? Authorities in Guatemala arrested Latin America & Canada, Luis Enrique Martinelli and Philip Morris International Ricardo Alberto Martinelli, sons Marlene Fernández of former Panamanian President Corporate Vice President for Ricardo Martinelli, on money Government Relations, Arcos Dorados laundering charges. Page 2 Peter Hakim President Emeritus, Inter-American Dialogue ECONOMIC Donna Hrinak President, Boeing Latin America Ecuador Reaches Jon E. Huenemann Former Corporate and Debt Deal With Government Senior Executive Bondholders James R. Jones Chairman, Ecuador has reached a provisional Monarch Global Strategies debt-restructuring deal with hold- Luis Abinader won a first-round victory in Sunday’s presidential election in the Dominican Craig A. Kelly Republic, putting an end to 16 years of rule by the Dominican Liberation Party. // File Photo: ers of approximately half of its Senior Director, Americas Abinader Campaign. sovereign bonds. The agreement Int’l Gov’t Relations, Exxon Mobil Opposition candidate Luis Abinader won the Dominican would still have to win approval John Maisto from remaining creditors. Director, U.S. Education Republic’s presidential election on Sunday, ending the cen- Finance Group Page 3 ter-left Dominican Liberation Party’s (PLD) 16-year control in Nicolás Mariscal Chairman, Q the Caribbean nation. Outgoing President Daniel Medina and POLITICAL Grupo Marhnos ruling party candidate Gonzalo Castillo both congratulated Abinader on Thomas F. McLarty III Brazil’s Bolsonaro Chairman, his triumph. What does Abinader’s victory suggest about the Dominican Gets Fourth Test McLarty Associates Republic’s direction, and to what extent will it differ from the policies of Carlos Paz-Soldan for Covid-19 Partner, the PLD? What were the most important factors driving voters’ prefer- DTB Associates, LLP ences this election cycle? What challenges will Abinader face as the Brazilian President Jair Bolsonaro Beatrice Rangel expects to receive the results of Director, country’s next president, and what sort of cabinet will he select? his fourth Covid-19 test today. He AMLA Consulting LLC recently began having symptoms, Jaana Remes including a fever. Ernesto Sagás, professor in the Department of Ethnic Stud- Partner, Page 2 McKinsey Global Institute ies at Colorado State University: “The victory of opposition Ernesto Revilla Head of Latin American presidential candidate Luis Abinader of the Partido Revolucio- Economics, Citi nario Moderno (PRM) marks a new chapter in the recent polit- Gustavo Roosen A Chairman of the Board, ical history of the Dominican Republic. The ruling Partido de la Liberación Envases Venezolanos Dominicana (PLD), which a year ago seemed invincible, fell victim to its Andrés Rozental own hubris. First, President Danilo Medina unsuccessfully maneuvered President, Rozental & Asociados to modify the constitution in order to become eligible for a third term, Shelly Shetty and afterwards he pushed for the nomination of his anointed presidential Managing Director, Sovereigns Fitch Ratings candidate (Gonzalo Castillo). As a result, former President Leonel Fernán- dez left the PLD to form his own presidential movement, splitting the party in the process. Second, after so many years in power, the PLD was undermined by corruption scandals (such as in relation to Odebrecht), Bolsonaro // File Photo: Brazilian its use of extended patronage networks and its inability to present fresh Government. Continued on page 2 COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Tuesday, July 7, 2020 POLITICAL NEWS federal court in Brooklyn, N.Y., did not identify NEWS BRIEFS the official, but it called the men “close rela- Authorities Arrest tives” of the official. The brothers have denied Brazil’s Bolsonaro Gets wrongdoing, the AP reported. “We trust that Fourth Covid-19 Test After Two Sons of the legal situation of the Martinelli brothers in the Guatemalan republic will be resolved as Experiencing Symptoms Panama’s Martinelli soon as possible so that they may continue Brazilian President Jair Bolsonaro expects the process of their return to Panama to attend to get results of another Covid-19 test today, Authorities in Guatemala on Monday arrested to the processes for which they have been after showing symptoms, including a fever, the two sons of former Panamanian President cited,” the Martinelli family said Monday in a Voice of America reported. Bolsonaro, who has Ricardo Martinelli as they attempted to board statement. In 2018, the brothers were detained previously called the disease a “little flu,” told a private plane out of the country, the Asso- in Miami for immigration-related reasons, but supporters that an X-ray had found his lungs ciated Press reported. The arrests of Luis they were each released on $1 million bond. were “clean.” Bolsonaro reportedly tested nega- Enrique Martinelli and Ricardo Alberto Marti- After leaving office, Ricardo Martinelli was tive for Covid-19 three times after several aides nelli followed the issuance by Interpol of an detained for more than two years in Panama were infected with the virus in March following international order for their arrests on money and the United States on accusations of a meeting with U.S. President Donald Trump in laundering charges, said Vinicio Pacheco, a misuse of public money and political espio- Florida, the Associated Press reported. spokesman at the Guatemalan Interior Ministry. nage. He was acquitted and released last year. At the time of their arrests, the two men were Last week, Martinelli and his successor as attempting to travel to Panama, with stops in president, Juan Carlos Varela, were banned El Salvador and Nicaragua, said Pacheco. Pan- from leaving Panama while under investigation Power Outages Reported ama’s government first sought their arrests in in connection with separate money laundering in Several Locations 2017. They are facing extradition to the United cases, Reuters reported, citing Panamanian Across Venezuela States, Reuters reported. In a statement, the government authorities. Martinelli called the Erratic power outages were reported in Venezu- U.S. Department of Justice said the two men charges “political persecution” and accused ela’s capital and several other states on Mon- are accused of acting as intermediaries for the Panama’s judicial system of failing to follow day evening, with the country’s state electrical payment of approximately $28 million in bribes due process. “They want to involve me because company, Corpoelec, saying on Twitter that “an from Brazilian construction giant Odebrecht they want to destroy me,” he said. Varela, who event in the electrical system” had hit power to a high-ranking Panamanian official between was the Central American country’s president in parts of Caracas and states to the west, the 2009 and 2014, the period of time in which from 2014 to 2019, has denied wrongdoing and Associated Press reported. Corpoelec did not their father was the country’s president. The has said all of his campaigns were financed provide further details. Venezuelans on social criminal complaint, which was filed June 27 in with private funds. media said the lights had flickered on and off repeatedly while other areas were still experi- FEATURED Q&A / Continued from page 1 encing blackouts. Corpoelec later said power had been restored in 90 percent of Caracas. alternatives to voters. Dominicans—and in health crisis, an ongoing crime wave and the particular the emerging middle class—were demands of thousands of followers eager to increasingly dissatisfied with the status enjoy the perks of power as he tries to battle quo and wanted change. Third, the Covid-19 corruption.” Brazil’s Itaú Names pandemic exposed the ineffectiveness of New Head of Operations the administration and rolled back economic Mary Fernández Rodríguez, growth in the midst of a contested electoral founding partner at Headrick for Three Countries campaign. And fourth, it was but a matter Rizik Álvarez & Fernández in Brazilian banking giant Itaú Unibanco Hold- of time before the political pendulum would A Santo Domingo: “The Dominican ing has named Álvaro Pimentel as its new swing back. Dominican electoral politics general elections were a cry for change. Luis head of operations for Argentina, Paraguay has been characterized by its competitive Abinader of the PRM won with a comfortable and Uruguay, the bank said Monday, Reuters nature, and the PLD could no longer hold on margin to win the election outright, which reported. Pimentel was the chief executive of to power. But for Abinader, governing will came as a surprise to many. The PLD has the Brazil-based lender’s Colombia unit. In his be a tall order, as he faces an implosion of been in power—both at the presidential and new position, he replaces César Blaquier, Itaú the tourism industry amid a major public congressional levels—for 16 years. Many Unibanco said in a statement, the wire service Continued on page 4 reported. COPYRIGHT © 2020, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Tuesday, July 7, 2020 ECONOMIC