Political Developments
Haiti went on the boil again in early March. Prime Minister Ariel Henry, who took office after the assassination of President Jovenel Moise in July 2021 by Colombian mercenaries, was abroad finalising an agreement for a 2000-member police force from Kenya. The UN Mission having withdrawn years ago, the blighted nation saw an increase in gang violence led by the G9, a collection of criminal gangs led by Jimmy Cherizier (alias Barbecue), who declared he wanted Henry to resign and would not allow him back into the country. This effectively happened – with neighbouring Dominican Republic refusing entry he continues to live outside his country. Henry himself has a lot to answer for – he has not held presidential elections, nor even for the parliament, leaving the nation without elected representation for over a year. The CARICOM, backed by the US, proposed a 9-member Transitional Council representing the country’s main political forces and the private sector with two non-voting observers. The Transitional Presidential Council has been exercising the powers of the presidency since 25 April 2024. It has a mandate to act that concludes on 7 February 2026. It appointed a Prime Minister to replace the outgoing regime.
Meanwhile the gangs continued to terrorise the capital Port au Prince, shutting down the harbour and attempting to seize the airport. Thousands of prisoners were freed and several killed after a jailbreak. Haiti’s lawless gangs have their origins in the dreaded Tonton Macoute, a militia created by the dictator François Duvalier, known as Papa Doc, and his son Jean Claude “Baby Doc” Duvalier, who ruled with an iron fist. “Baby Doc” went into exile in 1986, but the gangs created by the militias seized power, mainly in the capital in collusion with ruling politicians in most cases, a situation aggravated by the power vacuum after the assassination of former President Moise. Migration from Haiti to the US increased, with about 126,000 arriving as part of the Biden administration’s new humanitarian parole program that allows migrants from Latin America to come and work for two years, outnumbering tens of thousands of Cuban, Nicaraguan, and Venezuelan migrants. Mexico received more than 40,000 Haitian asylum requests in 2023 alone.
Relations between Ecuador and Mexico dived in April with the arrest of former Ecuador Vice President Jorge Glas by Ecuadorian police from the premises of the Mexican Embassy in the capital Quito. Glas was Vice President from 2013 till 2018 under former left-wing President Rafael Correa, himself in exile in Belgium after being accused of corruption. Accused of irregularities during his tenure by the next administration, Glas was sentenced to prison and on his release was convicted again but sought refuge in the Mexican Embassy in December 2023. Mexican President Lopez Obrador granted him asylum. Ecuador’s President Daniel Noboa, claiming the grant of immunity was a provocation and Glas was a flight risk who should account for his crimes, ordered the police to enter the Embassy on 5 April. They dragged Glas out in public, reportedly manhandling Mexican diplomats. In mid-April Ecuador’s Constitutional Court ruled that Glas’s arrest was illegal but he should stay in prison for other convictions. Noboa assumed power last year facing massive violence, including political assassinations sponsored by drug cartels rampant in prisons and outside. He has imposed a state of emergency to bring back the rule of law and launched a referendum in April to increase military involvement in policing, which was resoundingly approved.
The Mexican government immediately suspended diplomatic relations with Ecuador and shut down its Embassy there. Regional governments gathered in a meeting of the regional grouping CELAC, supported Mexico and condemned the violation of its Embassy. This was echoed by the Secretary General of the Organisation of American States. Mexico filed a complaint before the ICJ requesting Ecuador’s suspension from the United Nations “as long as a public apology is not issued recognizing the violations to the fundamental principles and norms of international law”. Ecuador approached the same court against Mexico’s decision to grant asylum to Glas and interfering in its internal affairs. Politicians and others seeking refuge in sympathetic embassies is not uncommon in Latin America. Ironically it was the Ecuador government that granted Julian Assange, the creator of Wikileaks, asylum at its Embassy in London from August 2012 till April 2019. There have also been cases of violation of diplomatic premises in LAC: Guatemala’s dictatorship attacked the Spanish Embassy in Guatemala City in 1980, killing several asylum-seekers, including a former vice president. Uruguay’s military government entered the Venezuelan Embassy in Montevideo in 1976 to arrest a left-wing militant, leading to the breakdown of diplomatic relations between the two countries. The Ecuador incident has highlighted yet again the left-right divide in LAC.
Honduras was in the news with the arrest and sentencing in the US of former Honduran President Juan Orlando Hernandez (2014 to 2022) to 40 years in prison for weapon offences and drug trafficking. Hernandez was arrested and extradited to the US in February 2022, weeks after he handed over the presidency. He was long considered a top US ally in Central America, complying with the US migration agenda. He took over from Porfirio Lobo who became president after the former left-wing president, Manuel Zelaya was forced out in a coup by right-wing supporters in 2009. Lobo reportedly laid the foundations of a regime heavily mortgaged to drug traffickers, which continued during Hernandez’s rule, ably operated by his brother Tony, also arrested and sentenced in the US. Hernández’s political ascent coincided with his country’s plunge into turmoil as drug trafficking routes shifted from Mexico and the Caribbean into Honduras, flooding the nation with easy money and making it one of the world’s most dangerous countries. Honduras shifted its decades-old recognition of Taiwan to mainland China in 2023. Its political history seems to mirror US mis-steps in Latin America as the superpower attempts to balance its priorities for alliances in a region with shifting political sands and the need to control migration and stamp out drug trafficking from the south.
Extra-territorial imprisonment is not unprecedented in the region. In 1989 the US invaded Panama and abducted former President Manuel Noriega, who was convicted on a restricted list of charges, including money laundering and drug trafficking, and sentenced to 40 years in a maximum security jail. Noriega had been a valued CIA cold war asset and go-between in Central America’s dirty wars, but turned into a monster the US could not control. He had been involved in the Iran-Contra scandal under the Reagan administration (in which President George H.W. Bush who ordered his capture, was implicated) and reportedly involved in drug trafficking. Several high profile drug traffickers from Colombia and Mexico – most recently El Chapo – have been extradited to the US, where the justice and correctional systems are more reliable and less amenable to pressure.
The chief of the US Southern Command, which covers Latin America and the Caribbean, General Laura Richardson visited Argentina early April and met with senior figures in the government of Javier Milei. Apart from discussions on strengthening defence collaboration, Richardson also touched upon China’s presence in Argentina, especially the space tracking station in the province of Neuquen. Built at a cost of $50 million and operational since 2018, it is the only Chinese deep space earth station outside China. Even the former US-friendly government of Mauricio Macri decided not to abrogate the agreement, which permits Chinese teams there to track space flight and conduct research. In 2016, Argentine officials stated that China agreed to use the station solely for civilian purposes, but without an Argentine oversight mechanism. Milei claims to ensure China complies strictly with the agreement to not resort to “dual-use” of the property and allow Argentine personnel limited access. But even he does not directly confront China, which is capable of bringing some sections of the Argentine economy – such as soya oil – to its knees, as was evident when it threatened to ban (in 2010) and reduce (in 2016) these imports, not to mention the 2023 $6 billion currency swap from China which Argentina seeks to extend. Another area of contention is the reported Chinese interest in building a port in Tierra del Fuego which would allow Beijing “to monitor the bioceanic passage and place an enclave of its own at the gates of Antarctica.” Richardson visited this southern tip of Argentina, where the leftist Governor of the province declared her persona non grata, whereupon Milei flew to the site in a special plane at night to address the press in her presence! Soon after this visit, Argentine Defence Minister Luis Petri signed an agreement in Denmark to purchase 24 F-16 fighter jets. His next stop was Brussels where he filed a request for Argentina to become a “global partner” of NATO. In January 1998, the United States named Argentina a major extra-NATO ally, reportedly enabling it to secure military and economic cooperation privileges between the two countries. NATO’s only Latin American global partner is Colombia, admitted in 2017. Other such partners are Australia, Afghanistan, Iraq, Japan, South Korea, Mongolia, New Zealand, and Pakistan.
In early April prosecutors entered the residence of Peru’s President Dina Boluarte and searched for jewellery and cash. The haul of expensive watches and cash beyond her known sources of income created a political scandal for the former Vice President, who assumed power when President Pedro Castillo was impeached in December 2022. Boluarte, whose popularity sank below 10 percent, started collaborating with self-seeking politicians in Congress, with whose help she survived two recent impeachment votes. Peru has had six presidents since 2018. The Peruvian Constitution allows impeachment proceedings to be brought on a vague “moral incapacity” provision, which does not require proof of legal wrongdoing but only 87 affirmative votes from the 130-member chamber. Boluarte refused to respond to prosecutors and even changed her story on the watches, finally claiming they were a “loan” from a friend. Her tenure has been marked by severe criticism from left-wing leaders in Latin America, especially Colombia and Mexico who have accused her of collaborating with the right to oust Castillo. She has refused to advance elections despite popular demand for the same.
Economic Developments:
A report by a UK investment bank, BTG Pactual in March indicates that Brazil, the ‘breadbasket of the world’ has become the world’s largest exporter globally of soybeans (56%), corn (31%), coffee (27%), sugar (44%), orange juice (76%), beef (24%), and chicken meat (33%); and is the second-largest seller of ethanol and cotton. With 200 million inhabitants, the “tropical agriculture miracle” currently produces food to meet the needs of approximately 900 million people, or 11% of the global population. Brazil’s grain production grew from 47 million tons in 1977 to the current 312 million tons. Agricultural productivity increased by 58% since the year 2000. For the 2023/24 harvest, 67% of financing resources are private, with only 33% originating from the government. According to the bank’s analysis, only 8 percent of Brazil’s territory is occupied by crops — compared to 14 percent in Argentina, 18 percent in the US and China, 58% in France, and 61% in India. Previous governments have been criticised for deforesting areas of the Amazon rainforest in Brazil to clear areas for agricultural plantations.
With a population around 3.5 million, covering 175,000 square kilometres Uruguay, on the south-eastern coast of South America, has consistently generated over 90 percent of its electricity from renewable sources. In less than two decades, Uruguay broke free of its dependence on oil imports and carbon emitting power generation, transitioning to renewable energy that is owned by the state but with infrastructure paid for by private investment. In fact Uruguay managed during the first two months of this year 100 percent renewable energy generation and had sufficient surplus to supply neighbours Argentina and Brazil. Wind energy was responsible for 50.8%, hydroelectric energy 30.9%, biomass 15.7% and solar 2.7%. Thermal backup was limited to 0.3%. In 2005, oil made up 55 percent of Uruguay’s total energy supply, and residents still experienced blackouts and energy rationing. IMF and World bank rejected Uruguay’s request to fund its energy transition, calling it unfeasible without the government offering heavy subsidies to private energy companies. Instead the government signed agreements for 20 year periods with private energy companies for the state utility monopoly, UTE to purchase all electricity they produced through renewable sources at an agreed rate, priced in US dollars. This ensured consistent revenue to investors, a stable business environment for the companies, and allowed the state to retain full control of distribution.
Focus India LAC:
India’s focus on the diaspora countries in the Caribbean was reaffirmed with the signing of a Line of Credit (LOC) with Guyana in mid-March. Negotiated by India’s EXIM Bank with the Guyanese government, the credit of US $23.37 million is for the purchase by Guyana of two Dornier 228 aircraft from Hindustan Aeronautics Ltd. It is reportedly also interested in procuring patrol vessels, armoured vehicles and radar systems. Guyanese armed forces personnel also avail about 20 slots in Indian military establishments under the Indian Technical and Economic Cooperation program. Guyana – with over one-third population of Indian origin – has been a favoured recipient of Indian largesse, with over $143 million worth of credits over the past years, including the construction of a cricket stadium.
Import of oil from Venezuela is once again under threat with the US not renewing the 6 month sanctions waiver that expired on 17 April, citing President Maduro’s refusal to allow meaningful participation by Venezuela’s opposition in upcoming presidential elections. While a grace period till 31 May is in place to complete ongoing transactions, new deals by Indian companies like Reliance, which availed the window on sanctions to the fullest to import millions of barrels at discounted prices for its Jamnagar refinery, will definitely be off. The biggest potential loser could be public sector ONGC (Videsh) Ltd. which still partners Venezuelan national oil company PdVSA in two joint ventures but is owed $600 million in dividends, which it had hoped to get through oil imports.
