Weekly Roundup: Uruguay's Legalization Law, Chile's Runoff, Mexico's Energy Reform

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Mexico’s Congress Passes Landmark Energy Reform Bill

In a 353 to 134 vote, Mexico’s lower house of Congress passed a major energy reform bill on December 12, a day after the Senate approved the legislation. For the first time in 75 years, the constitutional reform opens Mexico’s state-run energy and electricity companies to private investment, permitting businesses to drill for oil and gas in partnership with state oil firm Pemex, as well as to produce and sell electricity. Implementation legislation must be passed by a majority of state congresses—a likely scenario, given that the two major parties supporting the reform—the Institutional Revolutionary Party and the National Action Party—dominate these legislatures.

In a viewpoint, COA Director of Energy Christian Gómez explains the significance of the reform’s congressional approval.

Mexico City’s Metro Fare Hikes Met with Protests         

On December 13, Mexico City’s subway fare increased from three pesos (about 23 cents) to five (roughly 39 cents) per ride. Although this still makes the city’s subway one of the cheapest among Latin America’s major metropolitan systems, the 67 percent hike has a lot of riders protesting. Activists are promoting a campaign called “Metro Popular” under the hashtag #PosMeSalto (Well, then I’ll jump) to encourage fellow passengers to jump the turnstiles. Mexico’s Institute for Competitiveness argues that the fare increases won’t be enough to improve the metro, and that instead the service woes reside in the influence of union workers, the lack of measures of service quality, and poor management of the system.

An Americas Quarterly “Just the Numbers” ranks the system against eight others in the Americas, noting that Mexico City sees 4.5 million passengers each year. This makes it the second busiest of the city systems ranked after New York, although Mexico City has 247 fewer subway stops.

In Controversial Move, Bogota Mayor Removed from Office

On December 9, Colombia’s Inspector General Alejandro Ordoñez dismissed Bogota Mayor Gustavo Petro from his post and banned him from public office for 15 years. Ordoñez said Petro’s decision to replace private garbage collectors with a public-sector service was unconstitutional. The mayor called the move a “coup” and plans to appeal the decision. He also appealed to the Inter-American Commission on Human Rights for support, and filed a local lawsuit on the grounds of violating his right to due process. Semana says Ordoñez has become “all-powerful,” and that he dismissed 49 governors, 828 mayors, and 622 city councilors during his first term.

Because Petro is a former M-19 guerrilla, the decision could impact Colombia’s peace talks by lowering guerrillas’ confidence in the negotiations, explains La Silla Vacía. The Revolutionary Armed Forces of Colombia (FARC) issued a statement this week saying that Petro’s removal served as proof of the legitimacy of the group’s armed struggled.

Earlier, on December 8, the FARC announced it would begin a 30-day ceasefire on December 15. But President Juan Manuel Santos said a government ceasefire is off the table.

Bachelet Expected to Win in Chilean Presidential Runoff

Chile holds a runoff election on December 15, as former President Michelle Bachelet of the New Majority coalition runs against Evelyn Matthei of the conservative Independent Democratic Union Party. Bachelet received 46 percent of the vote during the first round on November 17. After the two candidates faced off in a last debate on Thursday, Bachelet is still expected to win. A TNS Chile/Netquest survey found that 41 percent plan to vote for the former president, while 27 percent said they would vote for Matthei. Other polls also put Bachelet in the lead; an Ipsos-Usach survey released this week predicts she will win with over 63 percent.

Uruguay Passes Historic Drug Legalization Bill

On December 10, Uruguay’s Senate passed landmark legislation making Uruguay the first country in the world to regulate the sale and distribution of marijuana. President José Mujica is expected to sign the bill into law as early as December 13; sales would then begin during the second half of 2014. Writing for InSight Crime, analyst Geoffrey Ramsey examines the potential challenges the legislation could face, such as poor public opinion, a referendum, and a court battle. The Transnational Institute’s Drug Law Reform Project provides an infographic explaining how the law will work and how money raised from taxes on the drug will be spent.

Peru’s Congress Approves Partial Privatization of State Oil Company

In a move to expand the country’s energy production, Peru’s Congress approved the partial privatization of state-run oil company Petroperu on December 13. The legislation will open 49 percent of the company to private investors, with 5 percent offered exclusively to the general public. Access to private capital can “increase the efficiency and quality” of the Andean country’s energy giant, said Energy Minister Jorge Merino this week. Petroperu is seeking $2.7 billion to modernize the country’s main oil refinery in Talara.

Brazilian and French Leaders Discuss Defense Deals

French President François Hollande visited Brasilia this week to meet with President Dilma Rousseff, seeking “to take advantage of a chill in U.S.-Brazil relations” to advance a bid for a defense contract with the South American country, reports Reuters. France is competing with Sweden and the United States to sell at least $4 billion in fighter jets to Brazil, though Rousseff may not make a decision until 2015, due to the upcoming presidential election and budget constraints. The two leaders discussed partnering on cyberdefense—both countries were spied on by the U.S. National Security Agency—and signed numerous accords, including a previously announced deal in which France will supply a $600 million telecoms satellite to Brazil.

Study: Where Brazil’s Favelas Are Growing and Shrinking

A study released this month by Brazil’s Institute of Applied Economics (Ipea) found that while the population of people living in slums is increasing slower than the overall population growth rate, many cities have seen a jump in favela populations. Brasilia saw the largest increase in favela populations, rising over 50 percent from 2000 to 2010. Favelas grew by nearly 30 percent in Manaus and 9 percent in Rio de Janeiro over the same period. Meanwhile, favela populations decreased in four cities—Belo Horizonte, Curitiba, Fortaleza, and Porto Alegre—with the largest drop in Curitiba, at 22 percent.

Venezuela’s Municipal Election Results

On December 8, Venezuela held municipal elections for mayors and city council members. In a first election bulletin on Sunday, the country’s electoral authorities announced that the ruling United Socialist Party of Venezuela (PSUV) and its allies won 49 percent of the vote, while the opposition Democratic Unity (MUD) coalition gained nearly 43 percent. Though the PSUV won a majority of mayoralties, the opposition won key cities such as metropolitan Caracas and oil-producing Maracaibo.

Paraguayan Senate Approves Venezuela Mercosur Membership

This week, the upper house of the Paraguayan Congress approved Venezuela’s entry into the Southern Common Market bloc (Mercosur). The vote came at the urging of President Horacio Cartes, as well as member countries Argentina and Brazil. The House of Deputies is expected to approve the legislation in the coming days. Once the legislation is approved, the South American country will be permitted to attend the next Mercosur summit in Caracas on January 17. Paraguay was suspended from the regional organization following the June 2012 impeachment of President Fernando Lugo, and Venezuela became the bloc’s fifth member during Paraguay’s suspension.

Mercosur-EU Trade Talks: Gaining Steam?

The Economist examines the latest developments in the European Union-Southern Common Market (Mercosur) trade talks. Argentina, Brazil, Paraguay, and Uruguay are participating in the negotiations—which first started in 2000—while Venezuela, which became a member last year, will not. Participating countries set a deadline for the end of January to submit bids. Argentina, Brazil, and Uruguay are more eager to move the talks forward because they will lose preferential trade access to the EU in January, as these three countries are no longer considered “developing” by the EU.

Report: Higher Growth in Latin America in 2014

Next year, Latin American and the Caribbean will grow by 3.2 percent thanks to greater external demand, predicts the Economic Commission for Latin America and the Caribbean (ECLAC) in a new report. This year, the region overall only grew 2.6 percent due to greater financial volatility and falling consumption. Panama is expected to lead regional growth in 2014 at 7 percent, followed by Bolivia and Peru at 5.5. percent, and Nicaragua and Dominican Republic at 5 percent. The report forecasts that the Caribbean will experience recovery next year with a 2.1 percent expansion.

Honduras Election: Hernández Declared the Winner

On December 11, Honduras’ electoral court officially named the National Party’s Juan Orlando Hernández the winner of the November 24 presidential election. The final vote count gave Hernández nearly 37 percent of the vote, versus almost 29 percent for the Freedom and Reestablishment Party (LIBRE)'s Xiomara Castro de Zelaya. The wife of deposed President Manuel Zelaya, the LIBRE candidate claimed fraud during the elections.

On December 12, U.S. Secretary of State John Kerry congratulated Hernández on his win.

Nicaraguan Congress Approves Constitutional Reform in First Vote

On December 10, Nicaragua’s National Assembly approved a constitutional bill in a first vote that would eliminate presidential term limits, allow supreme court justices indefinite terms, permit military officers to hold unelected government posts, and establish community-based councils. The Assembly must approve the bill in a second vote early next year before it goes into effect. Constitutional expert Gabriel Álvarez told Otramérica that the reform makes the law “less democratic” and gives President Daniel Ortega larger formal powers.

Obama Greets Cuban Leader in Rare Encounter

World leaders gathered in South Africa on December 10 for a memorial in honor of late leader Nelson Mandela. During the event, U.S. President Barack Obama shook hands with Cuban President Raúl Castro, raising questions about a potential thawing of relations between the two countries. While the move elicited criticism from Cuban-American legislators, former Democratic President Jimmy Carter saw the handshake as "something significant" that could represent an "omen for the future."

LatAm’s First Poll Aggregator Beats Chile’s Pollsters, Could Be New Model

The forecasting accuracy behind U.S. polling aggregators FiveThirtyEight, Princeton Election Consortium, and Votamatic inspired the creation of Latin America’s first polling aggregator, TresQuintos, writes its creators Kenneth Bunker and Stefan Bauchowitz for The Washington Post’s Monkey Cage blog. Chile’s first-round presidential election in November served as a testing ground for the new model, which had the most accurate forecast compared to predictions made by pollsters. Following the success in Chile, Bunker and Bauchowitz will adjust the model to forecast upcoming elections in Brazil, Colombia, and Uruguay.