Weekly Roundup: Paraguay's New President, North American Summit, Chile-India Deals

 

Fernando Lugo, a 56-year-old former Catholic bishop who campaigned on a platform of redistributing wealth to help the country’s poor, won Paraguay’s presidential election Monday. His victory broke the 62-year hold on power by the Colorado Party, formerly in the control of dictator General Alfredo Stroessner from 1954 to 1989. Although Mr. Lugo has sought to defy political labels, there is debate over the portents of his election amid the wider leftist movement in Latin America. He may offer a sound alternative to Chavísta leftism if he chooses to follow the model of President Lula Inácio da Silva in neighboring Brazil. Whether he can serve in the interests of Paraguay will not only depend on supporting free-market economic policies, but also in creating a viable government that can work with the nation’s strong congress. Questions remain about Lugo’s proposed policies, including his plans to renegotiate a treaty with Brazil in which Paraguay sells a majority of its energy harnessed from a joint hydroelectric project to its neighbor at a highly reduced rate.

 

 

The leaders of Mexico, the United States, and Canada met in New Orleans April 21 and 22, where they voiced their support for the North American Free Trade Agreement (NAFTA). Mexico’s President Felipe Calderón and Canadian Prime Minister Stephen Harper warned against suggestions by Democratic presidential candidates that NAFTA requires renegotiation. Calderón insisted that the trade pact has created jobs in Mexico to help stem emigration to the United States;  Harper warned that reopening NAFTA would allow Canada to seek higher payments for energy it sells to the United States. Harper and Calderón also voiced support for President George Bush’s push for the U.S.-Colombia free-trade agreement. The North American Competitiveness Council presented a report at the summit, encouraging leaders to broaden public understanding of the benefits that flow from liberalized trade.

 

Appearing on C-SPAN’s Washington Journal, COA Vice President Eric Farnsworth answered questions about the North American Leaders Summit and the recent debate over the trade pact, saying, “For what NAFTA was designed to do, it’s been a success.”

 

Read an AS/COA Online analysis of the leaders summit.

 

 

Despite the global credit crisis stemming from the United States and affecting Europe, Latin America is, unexpectedly, still managing to sustain economic expansion, reports Marcela Sanchez of the Washington Post. Latin America’s resilience has much to do with the sustained commodity price boom, but also with the region’s own efforts and fiscal responsibility, according to the World Bank. However, new projections released by the Economic Commission for Latin America and the Caribbean predict regional growth will slow by a full percentage point in 2008.

Chile, India Ink Agreements

 

During Pratibha Patil’s stop in Santiago, the Indian president signed four agreements with her Chilean counterpart Michelle Bachelet in the areas of science and technology, air services, sports, and expeditions to Antarctica. Bachelet also suggested upgrading its preferential trade agreement with India to a free-trade agreement. Chile serves as India’s second largest trading partner in Latin America, with trade totals reaching more than $2.4 billion in 2007—nearly a 39 percent increase over the previous year.An AS/COA Online analysis takes a closer look at Patil’s trip to Brazil, Mexico, and Chile.

 

Mario Uribe, a former senator and cousin of Colombia’s president, turned himself in after Costa Rica refused to grant political asylum to the former senator, who stands accused of having dealings with an outlawed, far-right paramilitary group. In an interview with the New York Times, President Álvaro Uribe pointed out that his country has a strong judiciary, demonstrated by corruption investigations that have led to the arrests of several Colombian congressmen and a former intelligence chief. In a weekend Q&A with the Washington Post, Uribe answered questions about increased security in Colombia and urged the U.S. Congress to approve a bilateral free-trade deal with Colombia. The Economist offers a closer look at the trade deal, as well as Uribe’s popularity in Colombia.

 

An AS/COA update examines where the trade deal stands in Congress.

 

 

The holdup in a U.S. free trade agreement with Panama may be an additional consequence of the Democratic delay in a congressional vote for a similar agreement with Colombia. "It’s unlikely...that the Panama agreement would be moved ahead of the Colombia agreement," says COA Vice President Eric Farnsworth in a Latin Business Chronicle report. "The fate of the Panama agreement is now tied to the Colombia agreement, though there is nothing that says the two cannot move forward together." Despite becoming an important trade hub in the region for U.S. products because of its having the highest FDI per GDP in Latin America,  along with low inflation and political stability, Panama may have to wait for consideration of the agreement until after next presidential elections in May 2009.

 

Slowing Remittances

 

The U.S. economic downturn and stronger border controls have slowed the movement of undocumented migrants who used to travel back and forth with regularity. This decrease in circularity has led to a reduced flow of remittances sent home to Mexico, reports the Los Angeles Times. Some migrants have stayed put on the U.S. side to avoid the new rigors of reentering illegally from Mexico, while would-be immigrants refuse to accept the risks and fees associated with border-crossing to reach uncertain job situations in the United States. A recent report by the World Bank discusses the positive effect of remittances to Latin American and Caribbean countries, as well as the necessity for governments to help facilitate the flow of remittances and maximize their impact through linking them to financial services.

The Politics of Haiti’s Food Crisis

 

The fallout over the worldwide food crisis has been a setback to progress that had been made in Haiti during the last year by the United Nations and the international community, as demonstrations have deteriorated into widespread violence, looting and vandalism across the country, according to an analysis by openDemocracy. Ramifications include widespread discontent working in the favor of pro-Aristide groups such as the Lavalas movement in advance of 2011 elections.

 

Booming commodity prices have left many South American countries with the cash to fund increased arms build-ups across the region, demonstrated by Venezuelan President Hugo Chávez’s arms spending, reports Bloomberg. In the case of Brazil, the recent increase in global soybean prices has supported a growing military budget. Overall, regional arms outlays surged 55 percent from 2003 to 2007. While some argue that regional arms buildups may enhance a nation’s ability to respond to disasters or contribute to peacekeeping missions, they also increase the chances that a small incident may turn into a regional crisis. Bachelet, whose country hosts this year’s Mercosur meeting of army commanders, called for a regional defense policy this week. 

An AS/COA Online analysis looked at recent discussions between the presidents of Brazil and Venezuela about the creation of a South American defense council.

 

According to a report by Washington, D.C.-based Global Integrity, most Latin American countries have a good legal framework for fighting corruption, comparable to the United States and European countries. However, countries in the region often fail to succeed in implementing these laws effectively. The Global Integrity Report 2007 assessed 55 countries using a “Global Integrity Index”—a comparative country assessment that combines journalism with quantitative data drawn from more than 300 indicators—to evaluate the existence and effectiveness of anti-corruption mechanisms in each country.  

Protesters Arrested in Cuba

The Christian Science Monitor reports on this week’s arrest of the protesting “Damas de Blanco”–a group of wives, mothers, and sisters of 75 Cuban dissidents jailed after a nationwide sweep of arrests in March 2003. On Monday, the women were roughed up by a mob and arrested near the offices of President Raúl Castro. While their protest may reflect an emerging sense of loosened political restrictions in Cuba, the government’s response appeared designed to deflate any expectations that real change is under way. The formulation of social groups reflects the growing pressure from the Cuban people for increased liberties and answers from the government.

Evo Morales Addresses Opponents

Bolivian President Evo Morales, in New York for the opening of a UN forum on indigenous affairs on Monday, warned opposition leaders in resource-rich Santa Cruz and other eastern provinces against defying a ban on holding local referendums. Leaders from the eastern regions have scheduled a May 4 vote on autonomy. That referendum would coincide with another scheduled for the same day by the Morales government on a new constitution seeking to expand the power of Bolivia’s indigenous majority, concentrated in the western highlands and La Paz. 

A Condo Boom in Latin America

As residential projects slow in the United States, those who sell new housing are reaching out for new markets, such as on Mexico’s Pacific coast and other Latin American and Caribbean destinations, reports the Miami Herald. Latin America has emerged as a place of opportunity during the U.S. downturn, and a recent report by consultancy Ernst & Young cited the region for its steady economic growth yet relative affordability when compared to the United States and Europe.