Hello, hivers. Here you have the twelfth delivery of my #latamreports series, where I review the last trends in Latin America's political and economic landscape. Let's go ride on it ya.
The Latin American Report | Deep Dream Generator
We have a severe social problem in the region. All concatenated. An economy that doesn't match demand and that, moreover, washes its losses on the most vulnerable, rampant corruption and levels of violence that sometimes border on the absurd. Let's look at Colombia, where at least 20 cats were incinerated to death after unknown persons set fire to a shelter located in a sports center in the Colombian city of Santa Marta (north). The space had been set up by animal activists.
The mayor there, Virna Johnson, asked the Special Group for the Fight against Animal Abuse of the Prosecutor's Office "to take on the investigation, identify and individualize the offender or offenders responsible and ask for their conviction before the judges". A reward of about US$ 3,142 has been set for anyone who offers relevant information to the competent authorities.
Petro advances his reforms proposals
The Colombian government has introduced a pension reform bill in Congress to extend coverage and strengthen the state pension administrator, but it raises doubts about the impact it would have on capital markets and public finances. It's one of the flagship initiatives of Gustavo Petro, the first leftist president in Colombian history. We will see many criticisms from opposition groups to this and other reforms, particularly one aimed at the health system that is being managed in Congress, and another focused on the labor regime that was recently presented.
This pension reform envisages several contribution regimes according to income and includes a proposal to guarantee a basic monthly income of about $46.4 for those who have not met the requirements to obtain a retirement pension. It would be interesting to gather information on the purchasing power of this amount in Colombia. On the other hand, workers who earn more than three minimum monthly salaries will have to contribute to the state system Colpensiones for their retirement, and the surplus can be allocated to a private fund.
The idea, according to the Minister of Labor, is to move from a dynamic in which for every four older adults, only one receives a pension, many more will be able to access this benefit. Critics, including Goldman Sachs, insist that this way would diminish the flow of resources from private pension administrators and would have a boomerang effect on the local financial capacity, but Petro defends the point that it is impossible to guarantee this issue without state intervention.
The drug trafficking route
Jonathan Martínez alias "La J", an alleged drug trafficker who was a fugitive from justice and who operated on the west coast of Puerto Rico, was finally apprehended Wednesday in possession of weapons and seized narcotics, according to a press release from the U.S. Attorney's Office there. "La J" is alleged to be the leader of a criminal organization linked to drug trafficking in the western region of the country, to which more than 25 homicides are attributed.
In Guatemala, a nation that for the second consecutive day appears in our report, the Supreme Electoral Tribunal rejected the candidacy for deputy of José Armando Ubico Aguilar, who was running for reelection when he is under an extradition order to the United States for his possible link to a drug trafficking network. The U.S. Attorney's Office for the Eastern District of Texas alleges that Ubico Aguilar received bribes from drug traffickers to coordinate with police to monitor cocaine shipments from Colombia landing in rural Guatemala. Ten years ago, he was sentenced to 46 months in prison in New Jersey after being caught at Newark airport with a kilogram of heroin he was trying to smuggle into the US. Incredible that with such a record we are talking about a politician seeking re-election.
Tracking violence in the region
The Honduran government will build two new "maximum security" prisons this year to effectively separate dangerous inmates and stop or at least reduce the power of coordination of their actions from the prisons, authorities said Wednesday. The budget for this effort, which emulates that of another Central American country plagued by violence, El Salvador, was not specified. It's sad that instead of investing in education, health, or science, these nations are forced to allocate substantial and at the same time scarce (activating the figure of an oxymoron) resources to the construction of prisons.
Each one will have the capacity to house 1,500 prisoners and will be under the command of the Security Secretariat. Dangerous inmates with a lot of available funds were the real authority inside the prisons for years, even ordering crimes from there, a fact that has been acknowledged by government officials. According to EFE, there are 26 prisons in Honduras, with a total of 19,658 inmates (maximum capacity is 8,000) and less than half of them have been sentenced.
In El Salvador, although several people interviewed by AP report that the country has improved under Nayib Bukele's aggressive campaign against the gangs and criminal organizations that still plague the country, which includes the suspension of a group of constitutional rights, discontent persists and grows in some areas due to the "secondary" effects or "collateral damage" that any progress in security matters implies for its inhabitants.
Bukele, according to AP, has imprisoned more than 65,000 of the country's 6.3 million inhabitants, cramming thousands in a "mega-prison". Large parts of the capital remain militarized and troops break into homes to strip-search families. Tens of thousands of children are reported to have been separated from their parents, thus establishing a shift from fear of gangs to fear of the government of the self-styled "coolest" dictator on the planet. Since November the authorities have not reported the number of deaths in their custody, which was then set at 90.
Currencies and stock markets in the region generally closed with gains again on Wednesday, on a day where expectations were met with the Fed's deliberations at its monetary policy meeting. The Mexican peso was down 0.14% against Tuesday's Reuters reference price, after performing positively in early trading. The main stock index S&P/BMV IPC, which concentrates the 35 most liquid companies in the market there, took a step back valued at 0.28%, due to investors' cautionbeforeo the aforementioned Fed meeting.
The Brazilian real recovered from a negative balance at the beginning of the session to end up 0.17%, while the Bovespa index of Sao Paulo's B3 stock exchange declined 0.81%. The Argentine peso fell by 0.18% per USD in a depreciation managed by the central bank, while the Merval stock index fell by 1.69%, one day after Alberto Fernández's government announced the sale of bonds in dollars to reduce tension in the exchange market.
The Chilean peso had a positive balance of 1.11%, boosted by the rising price of copper, the country's largest exportable commodity, for the fifth consecutive day; the IPSA, the leading index of the Santiago Stock Exchange, fell 0.53%. The Colombian peso outperformed Tuesday's units per dollar by 0.5%, with the MSCI COLCAP stock market index down 0.74%. Finally, the Peruvian sol rose 0.13%, a trend that was not emulated by the Lima Stock Exchange benchmark, which closed down -0.74%.
This is all for our twelfth report. I have referenced the sources dynamically in the text, and remember you can learn how and where to follow the LATAM trail news by reading my work here. Have a nice day.