Latin America’s Moment

The Petrobras corruption investigation, known locally as Operation Lava Jato (Carwash), entered a new phase last week, when Rodrigo Janot, Brazil’s general prosecutor, implicated 53 politicians from six different political parties. All but two come from President Dilma Rousseff’s Workers’ Party (PT) congressional coalition. The accused include two of the legislature’s most prominent politicians: Eduardo Cunha (PMDB), the president of the Chamber of Deputies, and Renan Calheiros (PMDB), the president of the Senate. Cunha is accused of taking a personal bribe; Calheiros is accused of trading political support for funds for the PMDB; both deny any wrongdoing. Dilma’s former Chief of Staff Gleisi Hoffman (PT) and former Energy Minister Edison Lobão (PMDB) were also accused of receiving illicit money for political campaigns – Hoffman for her own 2010 Senate run; Lobão to support Roseana Sarney’s gubernatorial campaign in the northeastern state of Maranhão. Sarney – the daughter of former President Jose Sarney – was previously implicated in a scandal involving Amazon development funds. Former president, now senator Fernando Collor de Mello (PTB) made the list for allegedly receiving bribes. This isn’t his first scandal; he resigned from the presidency in 1992 rather than be impeached for corruption (he was later found guilty and barred from public service until 2000). The opposition PSDB didn’t emerge unscathed either. Antonio Anastasia, an influential senator and close ally of defeated presidential candidate Aecio Neves, allegedly received R$1 million to run his own gubernatorial campaign in the state of Minas Gerais. These political revelations expand upon the already extensive investigations into Petrobras employees and numerous private sector firms, including construction firms OAS, with over one hundred thousand employees, and Andrade Gutierrez, with projects in more than 40 countries around the world, as well as the Brazilian conglomerate Camargo Correa, with operations in construction, energy, transport, and engineering. With estimates topping $4 billion in illegal kickbacks over the past decade, two high-level Petrobras executives and 24 private sector executives have been indicted so far. Twelve of the 26 have been taken into custody indefinitely, while fourteen remain under house arrest. All this is happening at a difficult time for Brazil as a nation. When the 2005 Mensalão scandal hit, Brazil was growing rapidly and the country’s president, Luiz Inácio Lula da Silva, was near his all-time highs in terms of popularity. By contrast, Dilma faces a stagnant economy, weak currency, and water shortages and electricity blackouts due to a record drought. In a recent poll, just 23 percent of people interviewed rated Dilma’s performance as “excellent or good,” down from 42 percent in December, and she is bracing for a wave of protests this Sunday. The revelations may paralyze Brazil’s government. But combined with general dissatisfaction, it also could create the incentive for real reform. Dilma’s challenge is to not waste this crisis.

During the summer of 2014 tens of thousands of unaccompanied minors surged across the U.S-Mexico border. Over the course of the fiscal year, nearly 70,000—mostly from the Northern Triangle countries of El Salvador, Guatemala, and Honduras—endured brutal and at times even deadly conditions as they made their way to the United States. While most of these children were between the ages of 13 and 17, the fastest growing group was 6 to 12 years old. Of the many factors that influenced their individual decisions, four stand out. U.S. Customs and Border Patrol, “Unaccompanied Alien Children Encountered by Fiscal Year,” 2015. The first is violence. In 2012, the homicide rate in Honduras reached 90 per 100,000—the highest in the world. El Salvador and Guatemala’s homicide rates were 41 and 40 per 100,000, respectively, some of the highest in the hemisphere. Much of this violence is gang related, fueled by robbery, kidnapping, extortion, and drug trafficking. Extreme poverty and inequality also leads children north. Nearly 67 percent of Hondurans, 45 percent of Salvadorans, and 55 percent of Guatemalans live in poverty. One in two Guatemalan children under five suffer from chronic malnutrition, affecting their physical and cognitive development for life. Add in bad schools and few good jobs, there is little reason to stay. The third driving force is family. Over 3 million Central Americans live in the United States, the result of past migration waves. Surveys by Fulbright Scholar Elizabeth Kennedy found that 90 percent of the unaccompanied minors she interviewed from El Salvador had a family member living in the United States. One in three said reuniting with them was the main motivation for leaving home. The importance of family networks is reflected in the disparities in migration paths: despite extreme poverty, few Nicaraguans head to the United States; instead they flock to Costa Rica. Finally, misinformation from client-seeking coyotes pushed many to come. Last spring and summer these traffickers spread rumors that for a limited time United States government would give children amnesty. Pushed out through social media, many families spent upwards of US$8,000 to take advantage of this supposed relaxation in rules. The surge seemed to end as quickly as it began. By September illegal apprehensions were less than half May numbers. One reason for this rapid decline is seasonality. More Central Americans (and Mexicans) come in the spring and summer months when labor needs spike. A second are U.S. efforts to counteract coyotes’ erroneous claims. A US$1 million Spanish-language multi-media “Dangers and Awareness” Campaign ran some 6,500 radio and television advertisements in El Salvador, Honduras, and Guatemala to dispel the falsehoods being spread. Perhaps most importantly, Mexico stepped up its southern border and transit route enforcement; curtailing, for instance, migrants riding the infamous train “The Beast.”In 2014, deportations back to Central America jumped by a third. Still, the United States should prepare for a new influx this spring. Poverty, inequality, and violence continue unabated in the region. And a decent U.S. economy provides opportunities that, for many, outweigh the dangers of the trip. If early trends hold, unaccompanied minors heading north in 2015 will likely be second in number only to the record breaking 2014 flows. To help tackle the root causes, President Obama has asked for over US$1 billion to, in the words of Vice President Joe Biden, support the “difficult reforms and investments required to address the region’s interlocking security, governance and economic challenges.” Skeptics may argue that the billions of dollars spent in the past have little to show. Others may question whether just US$1 billion, divided between three troubled nations, can make a difference. Leadership and political resolve will matter just as much as resources. But without steps to change the calculus, Central America’s youth will continue their treks to the U.S. border.