Friday, June 11, 2021

Castillo poised to win (June 11, 2021)

 Pedro Castillo is poised to win Peru's presidential election, by an exceedingly slim margin of less than 70,000 votes. Castillo has won about 50.2 percent of the votes counted, his opponent Keiko Fujimori 49.8 percent. Tension over the results is pushing democracy to the limit, reports the New York Times, exacerbating the fissures running through a deeply divided society and building on years of political upheaval in Peru.

The sudden rise of a relatively unknown rural school teacher speaks to how the pandemic has thrown politics into upheaval, reports the Wall Street Journal. Castillo has capitalized on anger over a market model that left behind the country's poorest, a gap that has been particularly evident during the pandemic as hospitals collapsed and oxygen tanks ran out.

Adding to the high stakes, yesterday a prosecutor asked a judge to jail Fujimori, who is facing corruption charges related to her 2011 presidential run. She had been released on bail last year as prosecutors sought a 30-year sentence on charges that she denies. Winning the presidency would put the case on hold.

Fujimori has yet to concede her third presidential bid and is asking election officials to throw out about 200,000 votes, most of which come from the poor highlands that overwhelmingly backed Castillo. If her challenge succeeds, it will likely provoke significant social unrest.

Castillo's Peru Libre party says there is no evidence of suspicious activity. Independent electoral observers say the vote was carried out cleanly. (Reuters) Rubén Ramírez, head of a delegation from the Organization of American States, praised the authority for its handling of the “transparent” process and said his team had been made aware of only “isolated” irregularities. (Washington Post)

If the count holds, Castillo, the son of poor Andean farmers, will take office on July 28. Peruvians will now discover which of the contrasting versions of Castillo will govern, explains Foreign Policy's Latin America Brief. Castillo's Perú Libre party describes itself as Marxist-Leninist. And during the campaign, he called for nationalizing mining and gas companies. But economic advisors have sought to assuage market fears this week. One praised the central bank, promised to respect its autonomy, rejected price and import controls and said mines would face a tax renegotiation rather than nationalisation. Another said Castillo would never enact policies that would confiscate assets. (Economist) "Our idea is not to have massive interventionism in the economy," Pedro Francke, a leftwing economist and adviser, told Reuters.

And this week Castillo promised to be “respectful of democracy, the current constitution, and govern with financial and economic stability.”

Moderates won the internal battle within Castillo's campaign, but “moderate” is a relative term noted James Bosworth in an analysis last month. Constitutional reform was firmly on Castillo's agenda, and constitutional and one goal of that reform is to change the government’s role in the economy. (Latin America Risk Report)

Castillo will inherit a country split down the middle, both geographically and socially, and he has a weak mandate, notes the Economist. He is highly likely to face governance challenges from Congress, which has a broadly conservative majority. Castillo has the support of only 42 of its 130 members, most of whom are loyal to Perú Libre's leader, Vladimir Cerrón. Congress will also be an obstacle to his reform ambitions.

“It is easy to imagine his presidency not lasting a full year,” Steven Levitsky told the WSJ.

More Peru
  • InSight Crime looks at some of the core security challenges facing Castillo, including corruption, VRAEM coca cultivation, and environmental crimes in Madre de Dios.
News Briefs

  • Despite high-profile “medical diplomacy” from countries such as the United States and China, Latin America's COVID-19 response has suffered from chronic shortages of critical medical equipment and vaccines. But there are some notable exceptions, notes a recent Wilson Center's Weekly Asado. Argentina, Brazil and Mexico, though ineffective at controlling the coronavirus’s spread, have retooled their local medical manufacturing resources to supplement international supplies and contribute to the regional pandemic response. And Cuba is administering its locally developed Soberana and Abdala vaccines.
  • Nicaraguan police have detained seven high-profile opposition leaders over the past week, including four presidential hopefuls just months before the election. Jose Bernard Pallais Arana -- the leader of Coalición Nacional party -- the latest arrest, yesterday. He was detained for acting "against the independence, sovereignty and auto-determination" of the country. (CNN, see Wednesday's post.)
  • President Daniel Ortega's moves against opposition figures, five months ahead of November's presidential elections, signal a new radicalization of his authoritarian government, writes journalist Carlos Chamorro.  The question faced by Ortega's opponents is whether to pressure for democratic limits now or "wait for the system to collapse under its own wait, at the cost of greater sacrifices from everybody." (Confidencial)
  • The United States is prepared to review "trade-related activities" with Nicaragua, including Managua's participation in a Central America free trade agreement, if the country's coming elections are not free and fair, U.S. State Department senior official Julie Chung said yesterday. (Reuters)
  • The US issued new sanctions against President Daniel Ortega’s daughter and a few other regime insiders this week. "While a necessary step to demonstrate resolve and make the Ortega regime pay some price for its abuses, there is little reason to believe these sanctions will have any real impact on the situation," according to the Latin America Risk Report. Sanctions against dozens of other top Nicaraguan officials in recent years have failed to ease the repression, notes the New York Times.
  • Any hope of reaching global climate goals depends on reining in deforestation in Brazil. But any hope of reining in deforestation depends on Bolsonaro, reports Rolling Stone, which looks at options to sidestep Brazil's national government and work with governors and civil society instead.
El Salvador
  • El Salvador's sudden "Bitcoinization," took two and a half days, and just five hours from the time the bill reached the legislature, reports El Faro. El Salvador is the first country in the world to make bitcoin legal tender, effective in September. By any account, the Bukele administration rushed the bitcoin law through the legislature. (See yesterday's post.)
  • Bukele announced on Wednesday that that the country's state-run geothermal energy utility would begin using power derived from volcanoes for Bitcoin mining. (NPR)
  • After El Salvador made Bitcoin legal tender this week, analysts have turned to the rural fishing village of El Zonte, where the cryptocurrency is already used by 500 fishing and farming families to buy groceries and pay utilities. The "Bitcoin Beach" experiment is the result of an anonymous donor who started working through a local nonprofit group in 2019, reports the Associated Press.
Regional Relations
  • "The fight against corruption is not always what it seems," warn Aaron and Mark Schneider in a Miami Herald opinion piece. "Across the region, populist, proto-fascist, and anti-democratic actors have ridden to power by claiming the anti-corruption mantle. Leaders descending into authoritarianism use trumped up corruption charges to sideline political opponents."
  • Luis Almagro, secretary general of the Organization of American States, has created a commissioner within the multilateral organization focused on combating anti-Semitism across Latin America. (Miami Herald)
  • The U.S. Biden administration is invoking provisions in a new trade agreement to ask Mexico to look into accusations of labor violations at an auto-parts plant near the U.S. border. (New York Times)
  • The wife of the Mexican drug kingpin Joaquín “El Chapo” Guzmán has pleaded guilty to charges in the U.S. and admitted that she helped her husband run his multibillion-dollar criminal empire. (Guardian, Washington Post, see Wednesday's briefs.)
  • Panama’s northern province of Colón, sitting at the Atlantic entrance to the Panama Canal, is seeing a staggering increase in drug seizures, raising questions about its role in the Central American cocaine pipeline, reports InSight Crime.
  • Argentine President Alberto Fernández's racially insensitive remarks this week have sparked a broad conversation about the country's founding myths. (Cosecha Roja, see yesterday's briefs.)
Did I miss something, get something wrong, or do you have a different take? Let me know ... Latin America Daily Briefing

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