1. A Supreme Court judge removed Renan Calheiros as the head of Brazil's Senate due to ongoing corruption investigations. The case could be overturned, but at least for the moment, Calheiros is out. Calheiros was one of the architects of President Dilma Rousseff's removal from office, along with Eduardo Cunha, the president of the lower house who was also forced out of his position.

    Many commentators have pointed out that with this recent ouster, Brazil's top three politicians have all been removed within the past 100 days. That is a level of institutional turnover that rarely happens peacefully. Additionally, Temer remains at risk due to several corruption investigations that could force him from office.

    These leaders aren't being replaced with completely fresh faces. Many members of the Congress and the Senate still face significant corruption charges and they continue to attempt to undermine the investigations and judiciary. That means recent protesters are unlikely to be placated by this removal any more than they were by other recent downfalls of top politicians.

    One conclusion is clear: Rousseff's removal did not end the institutional turmoil in Brazil.

    Prior to Rousseff's removal, there were two possible narratives (overly simplistic, but potential frameworks all the same) for how the country could react.
    1) Presidential impeachment could be a pressure release valve that would allow the country's political system to move forward refocusing on policymaking.
    2) Presidential impeachment could justify additional non-electoral turnover of political leadership.

    That second narrative is the one that appears to be winning.
  2. AQ, the Miami Herald and the Washington Post all offer some realistic non-paranoid coverage of China’s potential increased presence in Latin America during the next administration. The country recently published a new policy paper for the hemisphere. It was notable yesterday that China's CNOOC won two deepwater bids in Mexico. The growing conventional wisdom is that the Chinese will move in as the US pays less attention. It’s good to see coverage that offers nuance and even a bit of pushback to that narrative rather than generalized panic.

    At the same time, while there are still some worried about China’s growth in the region, the nightmare scenario goes against the conventional wisdom and is one few talk about: decreased Chinese presence.

    Imagine one or several of the following scenarios. A Chinese economic slowdown or a real estate bubble collapse causes commodities to drop and the country to back down on planned investments and aid in the Western Hemisphere. A potential or actual Venezuela default on Chinese debt makes China less eager to loan or spend money in the region. A US trade war with China somehow leads to the effect of less Chinese activity in Latin America as it tries to shore up its own region first. Next year’s Party Congress and leadership jockeying lead to an increased focus on domestic affairs at the expense of less foreign activity. All of those scenarios are plausible.

    The likely scenario is that China continues to increase its presence in Latin America. However, the small but possible chance of a Chinese pullback at the same time the US reduces its presence would have significant economic consequences for Latin America. It would hit commodity export dependent economies hard and leave Latin America without a key component of its long-stated “diversify” backup plan as the US reduces its role. While policymakers are preparing for China's increased presence, they should spare some thought for what happens if the conventional wisdom is backwards.
  3. Thousands of people attended yesterday's protests in Brazil's major cities. Protesters were angry about the Congress watering down the recent anti-corruption legislation and trying to undermine the investigations and prosecutions of corruption.

    Good news for the government:
    The protests were relatively small. "Tens of thousands" sounds big, but isn't much in a country of 200+ million people. The 15,000 protesters counted in Sao Paulo were one or two orders of magnitude smaller than the large anti-corruption protests that have previously caused problems.

    There are not plans to sustain the protests this week or next weekend. One-off protests are interesting as a show of force, but not destabilizing.

    Protesters are angrier about Congress. To the extent that the protesters are differentiating among the institutions, there is clear anger directed at the Congress. President Temer wasn't the leading target of yesterday's protesters, though they certainly don't see him as part of the solution.

    Bad news for the government:
    The protests were not particularly organized and no single organization took credit for leading them. It's easier to get large numbers to join a protest movement when the movement keeps its organization open and isn't representing a particular political party or agenda.

    Many of the protesters were middle class or wealthy and indicated they had also protested against former President Rousseff. Temer doesn't have the same support base among the poor as Rousseff and the PT, so if he's lost a portion of the middle class and wealthy, it's not clear who will stand up to support his side of the argument.

    What to look for next:
    More protests. A sustained street presence or regular protest presence (more than once per month) will get attention. On the other hand, if protesters can't organize again or the next protest is smaller, it's a sign that this was just a one-off event.

    Different groups joining. If the demographics of the protests start to change, showing a broader representation of Brazilian society, that will impact Temer's ability to govern. On the other hand, if one or two specific groups attempt to take control of the protests, that could alienate the broader population of potential protesters.

    Significant anti-protest repression. One thing that has grown protests in the past in Brazil is a big repression campaign that uses excessive force against protesters. Incidents of police violence against protesters will bring more protesters out.
  4. When the "Panama Papers" were published in April, there were significant promises by Panama to improve its financial transparency. As the NYT reports this morning, many of those promises have fallen through. Some of the reporting is a repeat of Joseph Stiglitz's article in September about the failure of the anti-corruption commission, but it adds details about the financial connections of the other commission members. The key point of the NYT article is "the difficulty of trying to reform a financial system, particularly in a small country where familial ties run deep and the financial interests of elite lawyers and bankers are embedded in offshore businesses."

    Back in April, I wrote:
    If Panama improves its financial transparency, does it impact the local economy? Varela and other Panamanian politicians are walking a careful line right now in trying to call for improved transparency while also not angering the banking, financial service and legal industries in the country upon which much of the recent economic boom has been based.
    The answer so far has been that the economic and political powerbrokers in the country have prevented significant reforms.
  5. Deportation doesn't just happen. There is due process and people have a right to go through the process. Asylum applications, in particular, require significant time, effort and evidence. Today's NYT reports on the backlog of immigration cases that is causing the entire court system to buckle. There are too many cases and not enough judges.

    When it comes to the logistics of Trump's plan for massive deportations, the court system is a bottleneck that can't simply be overcome by hiring more enforcement officers to make arrests.

    Speaking of arrests, a case (Jennings vs Rodriguez) in front of the Supreme Court will determine whether immigrants detained for six months must receive a hearing on their detention or be released. With so many cases backed up in the system, many arrests are leading to prolonged detentions without hearings, which violates some basic human and constitutional rights that every human, whether or not they are a US citizen, is guaranteed.
  6. Brazil's Congress passed a corruption law last night. It was previously an anti-corruption law. Then they amended it. Via the WSJ:
    Lawmakers approved the original bill right after midnight. But they waited until hours later, when most Brazilians were asleep, to radically change the proposed legislation. In addition to establishing potential jail time for judges and prosecutors who act too aggressively, they stripped out a whistleblower clause and weakened authorities’ ability to seize suspected illegal assets from defendants in corruption cases.
    Also see NYT and Bloomberg for more English language coverage.

    Representatives of the judicial branch claim this bill violates separation of powers and could provoke a constitutional crisis. Prosecutors are threatening to resign over the changes. There are planned protests that I would expect to grow if this bill moves forward. Rather than working on fixing the country's problems, Brazil's Congress is likely to provoke a national political crisis in their attempt to protect themselves from corruption investigations.
  7. The Colombian Senate passed the new FARC peace deal by a vote of 75-0.

    The Uribista opposition to the agreement chose to abstain rather than vote against the measure. Uribe said the abstention was an attempt to protest the fact he believes the Congress doesn't have the right to make this decision, which he says should go to yet another public vote. Colombia's courts have given an initial approval for the Congress to take these votes (the Congress is a legitimate and democratic representative of the public), but some judicial fights may remain. A draft opinion of a court ruling suggested that a public referendum may be necessary for the Congress to fast track the agreement.

    That said, this initial easy passage through the Senate certainly increases the likelihood that the new peace deal will go through and the FARC will demobilize in the first half of 2017.
  8. I'm quoted in today's Latin American Advisor about Honduras President Hernandez running for a second term. Here are my comments:
    Hernández is popular, and it’s been known for months that he would likely run for a second term, in spite of the constitutional restrictions that should limit his ability to do so. His National Party controls nearly all the levers of power in the country, having won the recent elections and having manipulated institutions to prevent the opposition from providing a significant check on them. During his term in office, crime is down and the economy is marginally better, making Hernández a favorite to win against a divided opposition. For Honduras’ international partners including the United States government, Hernández’s decision to run for re-election presents a clear challenge. He is an eager partner who has persuaded many in the international community that he has the political will to improve Honduras’ security situation. Still, the United States, OAS and the rest of the international community need to strike a balance, pushing back against the weakening of Honduras’ democratic institutions and continuing the fight against corruption without alienating Hernández, who may be president for the foreseeable future.
  9. NYT:
    The former minister, Marcelo Calero, who was in charge of culture, told federal investigators that Mr. Temer had pressured him to overrule a heritage preservation measure halting the construction of a luxury tower in the northeastern city of Salvador. The ally of Mr. Temer, Geddel Vieira Lima, who held the title of government secretary, had invested in an apartment in the development. Mr. Vieira Lima submitted his resignation on Friday morning, apologizing and explaining in a letter to Mr. Temer that he was leaving the government for the good of the nation.
    Calero may have recorded his conversation with the president, which would be a significant piece of evidence.

    Several members of Congress have called for Temer's impeachment. The case could be investigated by prosecutors. And it's just one of several scandals Temer faces.

    Still hanging over the president's head is the Superior Electoral Court (TSE) investigation into the financing of the 2014 Rousseff-Temer campaign. Lawyers for former President Rousseff filed documents earlier this month they claim prove Temer received a check for a million Reais. If the financing for the campaign is found to be illegal, the 2014 election can be overturned and Temer can be removed.
  10. Jovenel Moise, the handpicked successor to former President Martelly, won 56% of the vote in the first round and will avoid a runoff according to preliminary election results. The results are not final and can be challenged.

    Only 21% of voters turned out, a remarkably low number that allowed Moise to win. Ten percent of votes were thrown out during the vote counting process. Lawyers and supporters for other candidates are arguing that additional votes be thrown out due to lack of verification of identities.
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