Chile

Political unrest is sweeping Chile, as impatience with inequality grows in what has been one of Latin America’s most prosperous and stable countries.

Welcome to “Women Around the World: This Week,” a series that highlights noteworthy news related to women and U.S. foreign policy. This week’s post, covering April 15 to April 22, was compiled by LaTreshia Hamilton and Rebecca Turkington.

The ascent of leaders who favor free trade opens space for real integration.

Latin America’s judiciaries are engulfed in corruption scandals. In Colombia a former Supreme Court member was arrested on charges of corruption and bribery. In Peru multiple judges stand accused of trading favorable rulings and shortened sentences for money and perks. In Guatemala, lawyers and justices face charges of rigging Supreme Court appointments. And in Mexico the attorney general's office fired one of its own for delving too deep into alleged bribes to the former head of the national oil company Pemex, a close confidant of President Enrique Pena Nieto. These acts, more than similar crimes by dirty politicians, undermine the region’s fragile rule of law, revealing deep-seated corruption among those responsible for holding others to account. They show that the widespread legal reforms of the last two decades, while necessary, weren’t enough. The next essential step is professionalizing the judiciary itself. Argentina, Chile, Colombia, Mexico, Peru, Uruguay, and others have overhauled their legal systems, introducing oral trials, arbitration, and mediation alternatives, and strengthening due process and the presumption of innocence. As part of larger shifts from inquisitorial to adversarial systems, these efforts have begun to make justice more transparent, effective, and fair. Many Latin American countries have also passed specific anticorruption measures. Brazil criminalized bid-rigging, bribery, and fraud in public procurement. Argentina outlawed nepotism, and along with Peru and Colombia upped the penalties for corporate bribery. Mexico created a new national anti-corruption system, explicitly outlawing bribes, embezzlement, and the failure to disclose conflicts of interest, and creating a dedicated prosecutor to go after perpetrators. Legislators also gave prosecutors new corruption-fighting tools. Brazil’s successful Lava Jato (Carwash) investigations, leading to more than 200 convictions of politicians and business leaders for bribery and kickbacks, including former president Luiz Inacio Lula da Silva, have hinged on plea bargaining, introduced to the fight against organized crime by a 2013 law. Nearly a dozen nations in the region claim similar statutes that enable court officials to ease sentences in exchange for information on accomplices and higher-ups. Yet as the ongoing wave of scandals attests, beyond new laws Latin American nations need judges and lawyers able and willing to wield them. This in turn requires a professional legal bureaucracy. Although harder to conjure than legislation, a qualified civil service is possible to build. Look, for instance, at Chile and Brazil. Chile has a long history of meritocratic public hiring, drawing on credentials and examinations rather than party links. Attesting to the respect afforded their profession, judges, like other bureaucrats, often come from well-heeled families and elite schools. In the wake of Chile's own corruption scandals, one involving former president Michelle Bachelet's son and daughter-in-law, the government expanded efforts to inculcate legal impartiality and professionalism beyond just the courtroom, introducing civic and ethics education to elementary schools nationally. Brazil’s merit-based system for choosing most judges and prosecutors was inscribed in its 1988 Constitution. Over the last 30 years its judicial core has evolved, the politically appointed judges of the past retiring and their replacements rising up through the new technocratic process. Judge Sergio Moro of Lava Jato fame is but one of these new professionals, respected and well remunerated for their technical acumen and political autonomy. Throughout the region citizen anger over corruption is growing. Promises to take on widespread graft helped to catapult Mexico’s president-elect Andres Manuel Lopez Obrador to a historic victory. Corruption preoccupied Colombians heading to polls last spring, and ranks high among voter concerns in Brazil’s upcoming presidential race. In Peru it brought down the previous president and threatens the current head of state, Martin Vizcarra, if he can’t harness the momentum to his cause through a pending referendum. Yet what Latin American leaders must now do is to change career incentives, ensuring that judicial robes aren’t bought but earned, and that merit trumps connections. They need to create respected and rewarding professional paths, enticing the talented and ambitious to the fight against corruption rather than succumb to its temptations. Brazil and Chile show that changing the makeup of the justice system is possible. But a process that takes a generation will surely test the patience of Latin America's voters. View article originally published on Bloomberg.

Scholars of Latin America spent much of the first decade of this century discussing the causes and consequences of the region's turn to the left, under Venezuela's Chávez, Argentina's Kirchners, Brazil's Workers' Party, and other variants of leftist parties. It was therefore perhaps not surprising that as the left began to lose power in the second decade of this century, journalists and academics began to talk of the region's tilt to the right. But looking across South America's political landscape, it becomes apparent that the region hasn't really turned toward right-leaning politics as much as it has chosen deadlock. In country after country, the president is governing with either minority support in Congress, or will be perilously close to doing so after upcoming elections. In Peru, Pedro Pablo Kuczynski (PPK) narrowly won the presidency over Keiko Fujimori, but her Fuerza Popular party gained 56% of Congress. This majority, combined with the divided Left, has empowered the Fuerza Popular to block PPK at every turn, including by removing PPK's ministers or forcing them to resign. Argentina's President Maurício Macri was able to move forward on a variety of reforms in his first year, but now faces a rockier outlook. Four months away from midterm elections that will be crucial to the fate of his market reforms, the ever-surprising former president, Cristina Kirchner last week announced that she was founding her own Unidad Ciudadana party, and declared herself a candidate for an open Buenos Aires Senate seat that she will contest against a close Macri ally. As one local pundit summarized the situation, Macri needs to defeat Kirchner to finally become president and convince investors fearful of a return to populism; Kirchner needs to destroy the Macri presidency if she is to have a political future. The midterm elections are widely thought to be a bellwether for the 2019 presidential election, but although some Macri gains are anticipated, it is not clear such gains would lead to a change in the balance of power in Congress that would enable Macri to move as quickly and surely on reform as he might wish. Brazil's stand-in president, Michel Temer, has lost all capacity to govern the fragmented Congress, whose members are running scared of losing their heads either from the sword of justice or the scimitar of popular disgust.  After some initial success on fiscal reform, social security reform is back on the back burner, labor reform has been narrowly blocked in committee, and tax reform, political reform, and other significant changes are a distant mirage. In Chile, Michelle Bachelet's approval ratings have been improving of late, and she hopes to move forward on same-sex marriage and infrastructure investment plans in her remaining months in office. She may yet do so, but her successor will likely have a harder time of it. Polling in the presidential election continues to tip between Chile Vamos' Sebastián Piñera and the Nueva Mayoria's presumptive nominee, Alejandro Guillier, who have each polled in the 20 to 25 percent range in recent months. The 155-seat lower house, and 23 of 50 Senate seats, are also pending in the November elections. Concomitant elections for the executive branch and much of the legislature may ensure the presidential winner has some legislative coattails. But the extreme fragmentation of this year's primaries, the breakup of the old anti-authoritarian coalition, declining voter turnout, and simmering protests raise questions about the political system's ability to manufacture a convincing legislative majority. This may matter less in Chile than in some parts of Latin America, given the broad Chilean consensus around economic policies, but it does suggest that governance under the next president will not be an easy matter. In Colombia, former presidents Álvaro Uribe and Andrés Pastrana are doing everything they can to make certain that the election campaign is polarized around the peace deal, thus continuing the back-and-forth between those critical of the deal and supporters of President Juan Manuel Santos' effort. The initial candidate of Uribe's Centro Democrático party, Oscar Ivan Zuluaga, has had to withdraw due to allegations in the Odebrecht case, but that does not seem to have weakened the "no" side's resolve. The more that fissures around the peace deal dominate the 2018 election cycle, the less likely that other issues will become a matter of debate. In a political landscape in which former vice president Germán Vargas Lleras leads, but no other candidate is yet a clear second-place contender, emphasizing the shortcomings of the peace deal makes strategic sense. But the longer-term upshot may be a deepening of the polarization that emerged around the October plebiscite on the peace deal. The path toward deadlock is by no means certain. But in a context of sluggish regional growth, a massive regional corruption scandal, declining trust in democratic institutions, and the fracturing of traditional political parties, the possibility of gridlock does raise red flags. Influential social scientists have long warned of the perils of presidentialism, with its tendency toward zero-sum politics and regime breakdown. Over the past twenty years, Latin America has largely managed to avoid these perils through coalition-making and consensus-building. But the region's susceptibility to stalemate suggests these may yet become tense times for the region's democracies.

In my piece published this week on Foreignaffairs.com, I reflect on the end to Chile’s exceptionalism and why, after three decades of democratic growth, protests now envelop the country. I argue that Chile’s next president will have to find a more inclusive economic model, based on more than copper, if it wants to return to stable and prosperous growth, and reassume the exceptional mantle, in the future. You can read the first three paragraphs of the article below: Since its return to democracy in 1990, Chile has been heralded as Latin America’s exception. It has avoided the economic crises, populist governments, deep-seated corruption, and bitter social conflicts that have plagued other countries in the region. Instead, over the last 30 years Chile has boasted sound macroeconomic management; placid, stable, and almost boring politics; and generally restrained and strait-laced social manners. Such steadfastness has served the nation well. Once one of the poorest countries in Latin America, in 2012 Chile moved into the World Bank’s high-income bracket, making it one of only two nations in the region to break out of the so-called middle-income trap. Today Chile outranks its Latin American peers on measures of competitiveness as well as on human development indicators such as infant mortality and life expectancy. These successes, based on years of consistent and often rapid economic growth, have made Chile into a model for Latin American success. Yet over the last half decade, this tranquillity has come to an end, and the economic and social consensus of the postauthoritarian years has crumbled. In the capital, Santiago, it is now common for hundreds of thousands of protesters to fill government plazas and block the city’s main avenues. Miners, longshoremen, air traffic controllers, students, and public employees repeatedly shut down operations, leave classrooms, and walk off the job. And Chile’s prosecutors and courts have upended its previously clean image by uncovering collusion and corruption among the economic and political elite. View full text of article, originally published in Foreign Affairs.

A wave of corruption scandals has roiled Latin America in recent years, from Chile’s campaign finance affairs, through Mexico’s Casa Blanca revelations. Most recently, the information divulged in the December Odebrecht settlement has sent a shudder of fear across regional politics after the Brazilian construction firm admitted to paying nearly $800 million in bribes in twelve countries. The tide of corruption revelations has contributed to massive protests, slumping incumbent polls, and political uncertainty throughout the region. Obviously, the scandals of recent years differ greatly from each other. The Odebrecht scandal was driven by a Brazilian context very distinct from the Guatemalan environment that led to President Pérez Molina’s downfall, or from the Mexican and Chilean cases. Empirical evidence about corruption trends in the region is also quite mixed, with polls showing contradictory findings about the direction of public experiences with corruption victimization and public perceptions of corruption more broadly. For all these differences, there is a common silver lining to the region-wide wave of scandal. As a perceptive study released this week by the Inter-American Dialogue argues, the region has seen declining public tolerance of corruption and a rising normative edifice that makes it easier to tackle abuses. On the public side, authors Kevin Casas-Zamora and Miguel Carter catalogue a variety of factors that are changing the accountability equation. Citizens are angry: three-quarters of the population in Latin America view their society as unjust, and fewer than two in five express satisfaction with their democracies. An economic downturn has driven down incumbents’ average approval ratings across the region. Meanwhile, citizens are not only more motivated to mobilize, they are better able to do so: the revelations come against a backdrop of improving information transparency, changing access to public information through the widespread adoption of social media, and growth of a politically active middle class. Simultaneously, a “new normative edifice” of international agreements and standards, alongside improved national laws and policies, has given teeth to previously weak anticorruption bodies (see figure below). Laws have been introduced or rewritten in ways that constrain money laundering, reduce campaign finance violations, increase fiscal transparency, and facilitate prosecution. The investigative capacities of police and prosecutors have increased. New bodies, such as governmental auditing agencies and civil society anticorruption organizations, have been created in many countries over the past two decades. Anticorruption measures adopted by Latin American countries, 1990-2015 Source: Kevin Casas-Zamora and Miguel Carter, “Beyond the Scandals: The Changing Context of Corruption in Latin America,” Inter-American Dialogue, February 2017. The authors are quick to remind us that there is a big gap between laws on the books and “their effective implementation and enforcement.” But the cautiously optimistic conclusion I draw from their analysis is that the pincer movement of greater public mobilization for effective accountability, on the one hand, and institutional changes, on the other, is having tangible effects in fighting longstanding patterns of impunity for corruption across countries as diverse as Brazil, Chile, Guatemala, Honduras, Mexico, and Panama. This two-pronged process may continue to cause political instability for the foreseeable future. And the list of reforms that are still needed is enormous, from structural changes, such as addressing the economic and political disparities that diminish the equality of citizens before the law, to more “technical fixes” such as improving judicial performance and enhancing political finance oversight. But overall, the trend is a largely positive one, with declining public and institutional tolerance fueling corruption revelations. These in turn often generate the political pressure for legal and institutional reforms that have the potential to create less corrupt and more accountable political systems. Whether one agrees with this hopeful conclusion or not, the report is well worth a read, marshalling substantial cross-national evidence on the evolution of corruption and accountability processes across the region.

A wave of corruption scandals has roiled Latin America in recent years, from Chile’s campaign finance affairs, through Mexico’s Casa Blanca revelations. Most recently, the information divulged in the December Odebrecht settlement has sent a shudder of fear across regional politics after the Brazilian construction firm admitted to paying nearly $800 million in bribes in twelve countries. The tide of corruption revelations has contributed to massive protests, slumping incumbent polls, and political uncertainty throughout the region. Obviously, the scandals of recent years differ greatly from each other. The Odebrecht scandal was driven by a Brazilian context very distinct from the Guatemalan environment that led to President Pérez Molina’s downfall, or from the Mexican and Chilean cases. Empirical evidence about corruption trends in the region is also quite mixed, with polls showing contradictory findings about the direction of public experiences with corruption victimization and public perceptions of corruption more broadly. For all these differences, there is a common silver lining to the region wide wave of scandal. As a perceptive study released this week by the Inter-American Dialogue argues, the region has seen declining public tolerance of corruption and a rising normative edifice that makes it easier to tackle abuses. On the public side, authors Kevin Casas-Zamora and Miguel Carter catalogue a variety of factors that are changing the accountability equation. Citizens are angry: three-quarters of the population in Latin America view their society as unjust, and fewer than two in five express satisfaction with their democracies. An economic downturn has driven down incumbents’ average approval ratings across the region. Meanwhile, citizens are not only more motivated to mobilize, they are better able to do so: the revelations come against a backdrop of improving information transparency, changing access to public information through the widespread adoption of social media, and growth of a politically active middle class. Simultaneously, a “new normative edifice” of international agreements and standards, alongside improved national laws and policies, has given teeth to previously weak anticorruption bodies (see figure below). Laws have been introduced or rewritten in ways that constrain money laundering, reduce campaign finance violations, increase fiscal transparency, and facilitate prosecution. The investigative capacities of police and prosecutors have increased. New bodies, such as governmental auditing agencies and civil society anticorruption organizations, have been created in many countries over the past two decades. Anticorruption measures adopted by Latin American countries, 1990-2015                           Source: Kevin Casas-Zamora and Miguel Carter, “Beyond the Scandals: The Changing Context of Corruption in Latin America,” Inter-American Dialogue, February 2017.   The authors are quick to remind us that there is a big gap between laws on the books and “their effective implementation and enforcement.” But the cautiously optimistic conclusion I draw from their analysis is that the pincer movement of greater public mobilization for effective accountability, on the one hand, and institutional changes, on the other, is having tangible effects in fighting longstanding patterns of impunity for corruption across countries as diverse as Brazil, Chile, Guatemala, Honduras, Mexico, and Panama. This two-pronged process may continue to cause political instability for the foreseeable future. And the list of reforms that are still needed is enormous, from structural changes, such as addressing the economic and political disparities that diminish the equality of citizens before the law, to more “technical fixes” such as improving judicial performance and enhancing political finance oversight. But overall, the trend is a largely positive one, with declining public and institutional tolerance fueling corruption revelations. These in turn often generate the political pressure for legal and institutional reforms that have the potential to create less corrupt and more accountable political systems. Whether one agrees with this hopeful conclusion or not, the report is well worth a read, marshalling substantial cross-national evidence on the evolution of corruption and accountability processes across the region.

Mercosur is under considerable internal strain. As at other times in the trade bloc’s history, shifting political winds and changing trade priorities have placed the member countries at loggerheads. The five-member organization is in the midst of what is perhaps the most severe of its periodic identity crises, exacerbated by the Left’s waning power in the region, the rise of the Pacific Alliance, and renewed member interest in external trade agreements. The most immediate cause of the current tension is the possibility that Venezuela might be given the next six-month term as rotating chair of the organization as early as next week. Foremost among the concerns this raises is the possibility that Venezuela might get in the way of ongoing talks with the European Union (EU). But also lurking in the background is the possibility that with Venezuela in the chair, it will be harder to invoke Mercosur’s “democratic clause” against the Maduro government, which has descended into seemingly intractable crisis and appears intent on sidelining its opposition in a variety of increasingly autocratic ways, including threats to dissolve the National Assembly. Paraguay has called for barring Venezuela from the chair outright. Uruguay seems intent on upholding the pre-established timetable for rotating the chair, noting that Maduro has not yet acted on his threat against the Assembly. In an emergency mission to Montevideo, a delegation led by Brazilian foreign minister José Serra pushed an intermediary solution, noting that Venezuela has not yet met the terms of Mercosur accession, which it must complete by August. Until it has met the terms of membership, Venezuela would not be eligible for the chair. Argentina has said that it will happily take the chair in the interim. Brazil’s criticism of the Venezuelan regime’s human rights record and calls for a referendum on Maduro were met earlier this week by the full twittering firepower of the Venezuelan foreign minister. Delcy Rodríguez let loose a barrage of criticism of the “insolent” and “amoral” statements of her “de facto” colleague, Brazilian foreign minister José Serrá.  For good measure, she alleged that Brazil has joined the “international right” in its efforts against Venezuela, and called attention to the ongoing “golpe” in Brazil. Caught up in her twitter tantrum, Rodríguez did not make the stronger argument in Venezuela’s favor: namely, that Brazil’s justifications for temporarily suspending Venezuela seem contrived, given that Venezuela has been permitted to chair the organization once before, and Mercosur has been famously tolerant of member violations of its rules. Ultimately, the tension within Mercosur is an expression of deeper political changes, including most especially, the shift away from leftist governments with the arrival of the Cartes administration in Paraguay, Macri in Argentina, and Temer in Brazil. The Cartes government harbors deep resentment of the Maduro administration, not least because Paraguay was suspended from the trade bloc under the democratic clause from 2012 to 2013 after the (admittedly questionable) impeachment of Fernando Lugo. Particularly galling to the Paraguayans is the fact that they have staked a great deal on Mercosur—more than 40 percent of imports and 20 percent of exports are to Paraguay’s non-Venezuelan Mercosur partners—even as the Venezuelan Johnny-come-lately seems intent on using the bloc largely as a platform for its regional political pretensions. Lost in the political scrum is trade. From this perspective, Mercosur continues to be an ambivalent accomplishment. The trade bloc has increased trade among the member countries, but also imposes opportunity costs in terms of foregone trade agreements elsewhere. Meanwhile, although trade today is higher than it was at Mercosur’s inception, it is lower as a percentage of total trade than it was at the peak of intra-Mercosur commerce in the late 1990s. Recognizing this, Argentina and Brazil had already exchanged a number of high-level visits this year before Rousseff’s impeachment, and more recently, Foreign Ministers Serra and Malcorra have reiterated their interest in improving bilateral exchanges and reviving Mercosur. Mercosur, though, has had enormous difficulty in moving forward on outward oriented trade agreements, including a deal with the EU. Prospects for such a deal might be more positive than in years past, given the rise of the pro-trade agenda in Brazil and Argentina. But the fact is that the EU is—to put it mildly—distracted at the moment. Closer to home, too, the Pacific Alliance is exerting an enormous pull on some Mercosur members. Argentina’s Macri will be a guest at the Pacific Alliance’s presidential summit later this month, and Chile in particular seems eager to build bridges to members of Mercosur. The foreign ministers of the four original members of Mercosur will meet on Monday, July 11, to discuss the situation in Venezuela. Pushed by Uruguayan foreign minister Rodolfo Nin Novoa, they seem unlikely to invoke the democratic clause against Maduro until or unless there is a more concrete violation of democratic norms. Whatever happens Monday, however, the newly proactive Mercosur is likely to be back in force by early 2017, when Argentina is scheduled to take the helm, beginning a succession of chairs from the center-right governments of Argentina, Brazil and Paraguay. This has the potential to kickstart the most active eighteen-month window of change in Mercosur since the bloc’s formation in the early 1990s. If it succeeds, Mercosur’s potential may be resurrected.  If it fails, the bloc’s long-term prospects will be increasingly in doubt.

This post features Mark P. Jones, the James A. Baker III Institute for Public Policy’s political science fellow and Joseph D. Jamail Chair in Latin America Studies at Rice University, and Kellie Meiman Hock, managing partner and director of the Brazil and Southern Cone and trade practices at McLarty Associates. Latin America’s Moment recently sat down with Jones and Meiman Hock to discuss Argentina’s outlook. What economic challenges does Argentine President Mauricio Macri inherit from the Fernández de Kirchner government and how will he tackle them? Meiman Hock: Critically low foreign currency reserves represent Argentina’s biggest economic challenge. It is estimated accessible reserves stand somewhere between $2 billion and $6 billion at this time. Macri will work toward reaching a settlement with the holdouts in order to access international credit markets, but this will take time. In the near term, he will need to cut deals with the World Bank and the International Monetary Fund (IMF), which will necessitate resolving pending arbitration claims, as well as normalizing Argentine statistics. With reserves at a sufficient level, he will be better equipped to address other challenges: unifying the exchange rate, addressing inflation, loosening price, capital, and import controls, and eliminating most export taxes. Jones: In addition to anemic foreign reserves, Macri must also deal with a fiscal deficit at 7 percent of GDP this year and growing, and an overvalued peso. Macri will try to rein in rising public employee salaries and reduce expensive energy subsidies to consumers in the city and province of Buenos Aires. Are there any economic positives for the new president? Jones: Argentina is blessed with tremendous human capital and bountiful natural resources. If Macri can establish a credible rule of law and economic stability, U.S. and Argentine investors will pour funds into the development of Vaca Muerta and other shale gas deposits in addition to traditional investments in agriculture. Meiman Hock: The current situation in Brazil is both a positive and negative for Argentina. On the one hand, the economic downturn in Argentina’s largest trading partner will diminish demand for Argentine exports. On the other, if Macri can lay out a clear plan forward and build confidence, Argentina stands to attract investors currently disenchanted with Brazil and with pent-up demand for Argentina. Who will make up Macri’s government and what is his strategy for working with Congress? Jones: Macri’s eschewed a European-style coalition or even a president-dominated multi-party one à la Brazil. The government will be mostly made up of members of Macri’s PRO party. His electoral allies, the Radicals (UCR), received only a few second- and third-tier ministry positions. In Congress, Macri will try to garner some Peronist support to move legislation forward, given the PRO has only a small share of seats. But to Macri’s advantage, former President Fernández de Kirchner’s Frente Para la Victoria party is splintering and he can leverage the financial resources at his disposal to work out agreements with governors and other territorial leaders who possess considerable sway with deputies and senators from their respective provinces. Still, as the midterm elections approach in the second half of 2017, Macri will be watchful of both Peronists (including Sergio Massa), as well as the Radicals (UCR)—who realizing further PRO growth will likely come at their expense—may turn against him. Meiman Hock: Macri has chosen—at least nominally—to disperse power within his cabinet. Rather than having a traditional super minister of economy, his goal is to have several centers of power, with his trusted advisors in the presidency ensuring that, rather than a solo act, the Macri administration performs more like an orchestra. How will Macri reshape Argentina’s place in the region? Meiman Hock: Argentina under Macri will attempt to assert a new role in the region. It is telling that Macri’s first foreign trips, even before his inauguration, were to Brazil and Chile, seeking to build closer ties with the two countries. We can expect that Macri will be tougher on Venezuela, and will also leverage Argentine participation in the G20 to make a splash on the world stage. Jones: With the United States, Macri will work to reestablish a stronger relationship. Under former President Fernández de Kirchner, things could not have been much worse. But Macri’s team will have to be strategic in the rapprochement as their hands are tied somewhat by public opinion. Over half of Argentines don’t have a positive view of the United States, and even more don’t trust it. Still, the United States will have a stronger ally in Argentina on issues relating to Venezuela, drug trafficking, Iran, and the growing role of China in the region.