- GCAM
- Posts
- In Mexico, Morena Approaches Absolute Control
In Mexico, Morena Approaches Absolute Control
GCaM Greater Caribbean Monitor
September 06, 2024
Dear all,
We welcome you to the Greater Caribbean Monitor (GCaM). In this issue, you will find:
•Mexico: Morena Approaches Absolute Control
•Guatemala Weighs Potential CAF Membership
As always, please feel free to share GCaM with your friends and colleagues.
If you’ve been forwarded this newsletter, you may click here to subscribe.
Best,
The GCaM Team
Learn more at [email protected]
•Mexico: Morena Approaches Absolute Control
583 words | 3 minutes reading time
Claudia Sheinbaum will take office as Mexico’s president on October 1, but Congress opened on September 1. With potential legal troubles sorted, Morena (left) and its allies, the Labor Party (PT, left) and the Green Ecologist Party (PVEM, center-left), now control 364 of the Chamber of Deputies’ 500 seats.
In addition to controlling 73% of the lower house, the Morena-led coalition, Sigamos Haciendo Historia, took 83 of the Senate’s 128 seats. A further two senators, drawn from the now-moribund Party of the Democratic Revolution (PRD, center-left), crossed the floor late last week.
Whether 85 senators make up a supermajority is up to interpretation: 85 out of 128 is 66.4%, just shy of the two-thirds required by Mexico’s Constitution; 86 is 67.2%. A rounding error is thus set to become enormously important.
Panorama. Months ago, President Andrés Manuel López Obrador (AMLO) sent Congress a package of 20 reforms, 18 of them constitutional amendments, which have been interpreted as his political last will and testament. The most notable of AMLO’s proposals provides for all judges, including Supreme Court justices, to be appointed by popular vote.
Other elements of AMLO’s package seek to provide constitutional recognition to indigenous peoples and Afro-Mexicans; abolish certain autonomous federal agencies, which have had a difficult relationship with AMLO; and reform—that is, increase—pensions.
The proposal to reform the Judicial Branch is deemed near-apocalyptic by the Mexican opposition. The U.S. ambassador in Mexico City, Ken Salazar, describes it as a “risk” to Mexican democracy and U.S.-Mexico relations.
Be that as it may, last week, the lower house’s Constitutional Law Committee approved the draft, with civil servants calling a strike in response. This Wednesday, the Chamber of Deputies passed the amendment, with the session being disrupted by civil servants on strike. The bill will eventually make its way to the Senate.
Between the Lines. The opposition, which includes the bulk of the Judicial Branch, has sought to place obstacles along the way, but it has so far failed to limit Morena’s power. Indeed, the final seat allocations, published on August 23 by the National Electoral Institute (INE), were the subject of much legal controversy.
The National Action Party (PAN, center-right), the leading opposition party, appealed. This was taken up by the Supreme Court for “express” processing, although pro-Morena justices emphasized that electoral disputes fell within the Electoral Tribunal’s remit. The Electoral Tribunal promptly sided with Morena, shuttering the opposition’s hopes.
The bone of contention is the country’s mixed electoral system: 300 of the lower house’s 500 seats are elected using a district-level first-past-the-post system; the remaining 200 are elected via proportional representation.
Nationwide proportional representation benefits Morena’s junior coalition partners. These small parties were able to inflate their total seats despite coming first in relatively few constituencies.
Why Does It Matter? President-elect Claudia Sheinbaum will not have to contend with the challenges faced by AMLO, who was frequently, if ineffectually, limited by federal judges and independent agencies. Sheinbaum will enjoy near-absolute power, while Mexico’s opposition will languish for at least six years.
While U.S.-Mexico relations may be weakened by Morena’s reforms, this must not be overestimated. Mexico is Washington’s foremost partner on immigration; the White House will continue to tolerate Morena’s indiscretions if Mexico continues stemming the flow of migrants.
The chief risks are economic. Sheinbaum, like AMLO, is hardly a private sector darling; the Mexican peso, which had an excellent 2023, has fallen since her election. Talk of a collapse is over-eager: Mexico remains an attractive destination for FDI, but it will continue underperforming relative to its potential, particularly in light of Washington’s nearshoring efforts.
A STATEMENT FROM OUR PARTNERS AT THE CARVALHO DIALOGUE
Venezuelan National Elections and the Way Forward
Washington, D.C. – We are the Carvalho Dialogue. In 2009, the Brazilian philosopher and educator Olavo de Carvalho warned that the Foro de São Paulo, a broad coalition of communist and quasi-communist groups in the Americas, was dismantling democratic institutions throughout the Americas. This made it necessary for their opponents to develop a new, multilateral perspective, and collectively take action if they were to defend their countries. In 2023, friends and allies from across the United States, Canada, and the Iberosphere who share a commitment to advancing freedom, security, and prosperity released the Miami Statement, addressing the main challenges to liberty and public safety in the Western Hemisphere. Now, recent events in Venezuela are a stark reminder of the deep and endemic threats facing us all. It is time for serious reflection and response.
The tragedy in Venezuela impacts the entire hemisphere. As the corrupt Chavista regime condemns the Venezuelan people to suffering and economic crisis, it also actively sows instability and criminality throughout the Western Hemisphere. The Chavista regime is a major source and cause of the border crises, illegal migration, and human trafficking across the region. The regime is a major contributor to transnational drug-trafficking and other criminal activities and is an avowed ally of Iran, China, and Russia, supporting their political interference and exploitive activities.
An Outrage in Plain Sight
On July 28th, despite facing widespread repression, intimidation, and deeply unfair conditions, the Venezuelan people came out to vote overwhelmingly to elect Edmundo González Urrutia as their president and oust the authoritarian Nicolás Maduro. The opposition, led by María Corina Machado and Edmundo González, has meticulously gathered official tallies from voting centers around the country, which reflect a clear victory for González. Unsurprisingly, the Chavista regime engaged in the most blatant theft of an election in Latin American history, releasing easily falsifiable results and blocking the public from access to detailed results to back up their claim.
Since the election, the Chavista regime has once again shown its true colors, unleashing a new wave of repression against the Venezuelan people, blocking social media in the country, arresting thousands of opponents and critics, and killing and injuring dozens of protestors, committing gross violations of human rights.
A Failed Response
With few exceptions, the United States and the international community have generally responded slowly with equivocation, ambiguity, and mild statements. It is unconscionable, for example, that the representative of the Holy See recently presented their credentials to the illegitimate leader of Venezuela.
What’s worse, the Biden administration has seemingly outsourced responding to the crisis to pro-Maduro leaders in Colombia, Mexico, and Brazil who have put forth proposals that serve only to cement the corrupt and illegitimate regime’s theft of the election.
Calls for a “power sharing” arrangement between the opposition and the Chavista regime run directly counter to the clear will of the Venezuelan people, and such an arrangement would quickly be revealed as a continuation of the total control of the authoritarian Chavista regime. Similarly, calls for a “do-over election” will only enable the regime to steal the election once again.
Beyond discarding the will of the Venezuelan people, such suggestions fail to contend with the nature and track record of the Chavista regime which has continually and cynically manipulated negotiations and electoral processes to maintain control.
Time For Action
The Biden administration’s continual appeasement of the Chavista regime for the previous three-plus years has emboldened it not only to carry out blatant electoral fraud but to increasingly entrench itself into power.
Without real pressure and consequences from the international community and the opposition in Venezuela against the Chavista regime, proposals that seek to elicit the regime’s self-ouster will fail. Instead, we need action.
The following are proposed actions that the Carvalho Dialogue recommends:
Reject the call for new elections or power-sharing agreements.
Recognize Edmundo González Urrutia as the rightful president-elect of Venezuela.
Support the people of Venezuela as they take to the streets to make their voices heard.
Document and make public the extensive human rights abuses in Venezuela and hold Nicolás Maduro and the Chavista regime accountable.
Restore all sanctions against Venezuela and the special exceptions granted by the Biden administration should be removed.
Expose and condemn the Foro de São Paulo, Progressive International, Grupo de Puebla, and the Bolivarian Alliance of the Americas (ALBA) for undermining political freedom and public safety in Venezuela.
Condemn Cuba, Russia, China, and Iran for providing the Chavista regime with its repressive apparatus being used to repress the Venezuelan people’s right to defend their vote.
Deter the Chavista regime from taking any form of military provocation against Guyana.
Cease all policies that facilitate human and drug trafficking in the region and instead empower cooperative efforts to end illegal migration, criminal networks, and malicious foreign actors undermining the region’s peace and stability.
Signatories
Rodrigo Arenas, República
Eduardo Cader, Foro Madrid
James Carafano, Washington, DC
Paulo Figueiredo, journalist, Brazil
Melissa Ford, Texas Public Policy Foundation
Alicia Galván, President, Fundación Patria Unida, Mexico
Humberto López, Executive Director, Fundación Patria Unida, Mexico
Mike González, Washington, DC
Francisco González, Executive Director, Economic Club of Miami
Víctor González Coello de Portugal, former Member of the Spanish Parliament for Salamanca
Simon Hankinson, Washington, DC
Steven Hecht, Guatemala City
Daniel Lacalle, economist and author, Chief Economist at Tressis
Phillip Linderman, Washington, DC
Mark Morgan, former Acting Commissioner of Customs and Border Protection
Sergio de la Peña, former Deputy Assistant Secretary of Defense for Western Hemisphere Affairs
Max Primorac, Washington, DC
David Shedd, former Acting Director of the Defense Intelligence Agency
Joshua Treviño, Texas Public Policy Foundation
Francisco Tudela, former Vice President and Foreign Minister of Peru, Professor at the University of Piura and the Peruvian Army War College
•Guatemala Weighs Potential CAF Membership
545 words | 3 minutes reading time
Guatemala, Central America’s largest economy, faces the considerable challenge of rescuing its infrastructure after years of poor, inefficient public investment. Expanding its portfolio of basic public services also remains a priority. Corruption, budgetary constraints, and a lack of experience in executing large-scale projects make organizations like CAF, the Development Bank of Latin America and the Caribbean, a tempting partner.
Overview. Founded in 1970, CAF began operations as the Andean Development Corporation. It has since expanded its scope to the rest of Latin America, from Mexico to Argentina, and its strategic goals are regional integration and sustainable development. Currently, the bank holds a consolidated portfolio of $34.196 billion.
In 2007, Guatemala was invited to join CAF, a step the country has yet to take despite the institution’s promise of ample loans on preferential terms. This year, however, CAF has renewed its efforts to secure Guatemala’s membership.
In recent weeks, bank representatives have conducted a series of meetings with business leaders and government officials in Guatemala. According to reports from attendees, CAF has pinpointed road infrastructure development, water treatment, and public transportation systems as the top investment opportunities in the country.
Based on their assessment, the bank plans to draft a comprehensive proposal with the goal of making Guatemala a member in the coming months. From CAF’s perspective, its Central American expansion efforts are incomplete without Guatemala.
Data. CAF is a well-established partner for Guatemala’s neighbors in Central America and the Caribbean. Costa Rica, El Salvador, Panama, the Dominican Republic, and Honduras are all members, with their governments approving CAF stock purchases, in return benefiting from CAF’s advantageous credit terms and technical assistance.
Since 2018, CAF has invested $751 million in projects across Panama and El Salvador. Of this total, 58% has been allocated to physical and digital infrastructure, and 30% has been dedicated to water treatment initiatives.
El Salvador joined in December 2021. Since then, its cash-strapped government has secured princely sums from the bank, obtaining a $320 million loan for President Nayib Bukele’s landmark airport project, alongside $145 million for submarine communications cable to boost the country’s ailing digital infrastructure.
Honduras, the bank’s most recently added member, has been quick to seek leverage. In July, Tegucigalpa secured $80 million from CAF; scarcely a month later, a larger $350 million package was agreed, with the bulk of funds going towards the country’s roads.
Between the Lines. Guatemala’s CAF prospects are not nearly as rosy as would appear at first glance. The country’s notoriously divided, gridlocked Congress is unlikely to approve the country’s accession without a fight, and no notable political figures appear willing to spend precious political capital on the matter.
CAF is not a charitable organization. Member-states are required to put up some capital, with the amount determining whether they obtain Class A, B, or C shares. A 10-year capitalization schedule is offered, but Class A shares require prospective members to invest at least $500 million; Class B shares, $250 million.
This sum would not be problematic for Guatemala, which has a debt-to-GDP ratio of 29.3%, commonly hailed as the lowest in Latin America. That said, a considerable number of congressmen oppose accruing greater debt and raising government spending, which, incidentally, form part of CAF’s plans for Guatemala.
Beyond obstructionism in Congress, the Guatemalan public is generally skeptical of debt, often linking it to past governments’ corruption.
Balance. CAF offers generous financing terms, along with the technical assistance required by countries like Guatemala. For national projects, it offers loans worth up to four times a member’s stock holdings; for regional-level products, leverage can amount to up to eight times a member’s holdings.
Guatemala’s public finances are sufficiently stable for the state to embark on a debt-financed investment spree, particularly if future CAF funds are allocated to infrastructure projects, and not ordinary budget entitlements like civil service salaries and pensions.
That said, the road ahead is not terribly clear, and the political obstacles to CAF membership are substantial. Congressional gridlock may prove insurmountable.