Political crisis, security challenges and energy opportunities in Latin America.
London Politica
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Welcome to a new edition of the Latam Risk Monitor. In this issue we will analyse:
Haiti's Crisis and U.S. Policy: Impact on Biden's Reelection Prospect
Major events surrounding Haiti continue to rock international news cycles. The Caribbean nation’s governmental capacity to carry out essential functions has been severely hampered due to increasingly complex challenges. The multidimensional crises endanger representatives of foreign nations to such a degree that countries like the U.S. and Canada have significantly reduced resources and staff capacity at their embassies.
Unprecedented levels of instability have led to the emergence and consolidation of large gangs as alternative authority figures in Haiti. Notably, Jimmy Cherizier, also known as “Barbeque”, a former police officer, has gained significant influence due to his charismatic nature. As one of the most powerful gang leaders, Barbeque recently addressed the nation, exerting pressure on the de facto government to relinquish its leadership. Former PM Ariel Henry eventually acquiesced and tentatively resigned last week, further exacerbating the power vacuum in the tumultuous country.
Washington’s? response to Haiti's collapsing state may significantly influence the actions taken by both the international community and Haitian residents. As a regional power, the United States has played a pivotal role in broader strategic efforts, including supporting the Kenyan-led U.N. deployment , contributing over $300 million in aid, and co-facilitating an agreement for a transitional government. However, neighbouring countries such as the Dominican Republic and Jamaica are refusing to accept an influx of Haitian asylum seekers, particularly following the highly publicised fortification of the U.S.–Florida Keys Border, a prominent entry point for migrants from the Caribbean Sea into the United States.
The ambiguity of the U.S. response has drawn condemnation from domestic and international actors. The Biden administration has already faced significant backlash for what is seen as an unequal approach to the humanitarian crisis in Gaza . Continued mishandling or exacerbation of another human rights and humanitarian situation, particularly within its immediate sphere of influence, could prove detrimental for Biden amidst his reelection campaign.
The Black vote is crucial for the Democratic Party, as it has historically remained loyal to its nominees alongside Latino voters. Yet, recent polls indicate a shift, with more Black voters supporting the GOP nominee, Donald Trump, compared to previous elections —rising from 9% in 2016 to 17% in recent surveys
In Florida, where 13% of voters are Black and maintain strong connections to Afro-Caribbean identity and political ideologies, the influence of U.S.-Haitian history is profound. Negative or inconsistent decisions by the U.S. government regarding Haiti’s security and development could prove detrimental to Democrats in a volatile election cycle. Ultimately, President Biden's handling of the crisis in Haiti may jeopardise his re-election bid.
Liberalisation of the Brazilian Energy Market?
On March 15th, an announcement by Santander Bank emphasised the strategic role Brazil plays in the regional economy. Santander is preparing to advance its stake in the Brazilian energy sector, buying 70% of América Gest?o Servi?os em Energia’s share capital. The company specialises in energy management and has over 10,000 clients with diverse portfolios. Its proposal is economically advantageous for the corporation and Brazil’s economy.
Brazil is at the forefront of economic growth and environmental initiatives in Latin America. Its proactive approach, including collaboration with the private sector , promotes foreign investment in the region, with 41% of FDI in 2022 directed towards Brazil.
Generating nearly 90% of its electricity from renewable sources, Brazil boasts the largest share of clean power among the world’s major economies . President Lula da Silva is presenting compelling economic arguments for transitioning to renewable energy whilst ensuring Brazil’s competitiveness in the global clean energy sector.
Meanwhile, as local and international energy demand increases, labour productivity continues to be stagnant . The employment gap between men and women which remains at approximately 20% represents another challenge to overcome. Furthermore, an emphasis on green infrastructure investment will likely increase automation and further displace the labour force.?
The success of Brazil’s green transition serves as a model for other countries' aspirations across South America. Strengthened inclusive and regulatory frameworks are essential tools to navigate this economic shift, and Brazil possesses the resources and leadership to achieve this objective. As the regional economic powerhouse, Brazil's accomplishments pave the way for further progress among its neighbours, fostering socioeconomic growth and encouraging green investment. Therefore, President Lula's strategies for growth must be comprehensive and innovative to ensure the widespread success of this approach throughout the continent.
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Implications of the suspension of the peace treaty between the government and FARC dissidents
Potential threats to the negotiated peace accords with armed militias in Colombia are likely to increase in 2024. On March 20th, the Colombian government suspended a bilateral ceasefire with the dissident offshoot of the FARC, the Central General Staff (EMC), indicating potential cracks in the delicate mechanisms sustaining peace with armed factions within the country. This decision followed an attack perpetrated by the Dagoberto Ramos FARC front, also identified as the 6th front, on an indigenous community in Toribio, Cauca on 16 March.
Subsequently, the government suspended the bilateral ceasefire in the Cauca, Nari?o, and Valle de Cauca departments. This suspension undoubtedly creates uncertainty about the ability of Petro’s government to deal with the armed groups. However, recent years have evinced promising indications of potential enduring peace within Colombia. The government’s insistence to employ dialogue as a tangible mechanism to alleviate, or at the very least, mitigate, persistent conflicts has provided neighbouring nations dealing with crime an actionable reference point. Recent negotiations and ceasefire agreements, particularly with the National Liberation Army (ELN ) and key dissident FARC factions, have bolstered the concept of utilising diplomatic discourse to subdue national instability. Consequently, there has been a reduction in illegal activities by these groups, prominently in their principal strongholds such as Arauca, Cauca, and Norte de Santander.
However, the ceasefire's termination with the EMC, in conjunction with high levels of hostility from ELN and FARC dissidence-controlled groups, may potentially embolden criminal enterprises to dismiss the government’s ‘total peace’ strategy. The government has confirmed a 30% increase in EMC and the Segunda Marquetilla (a major FARC dissident group) presence in the country. Concurrently, ELN, Gulf Clan, and two FARC dissidencies showed an 11% rise in their forces in 2023, compared to 2022. Although a limited ceasefire exists between the government and the ELN, media reports indicate that local factions continue to disregard it, as kidnapping for ransom persists particularly in rural and indigenous regions.?
While the situation appears to be deteriorating, there is still room for optimism. Colombia has demonstrated political will to overcome complex domestic security issues in the past, albeit through precarious agreements. Whether president Petro can maintain that legacy remains to be seen.
What’s ahead for Venezuela? Politics and Oil in the Caribbean Nation
On March 21st, London Politica’s Latin America Programme held a ‘fireside chat’ with José Chalhoub . José is a political risk and oil expert from Venezuela, and he shared with us some very valuable insights into the country’s political and geopolitical landscape, as well as its oil sector. In this piece we are sharing some key issues he shared with us in case you could not join the Live broadcast.?
Firstly, the upcoming elections on July 28th are highly controversial due to the banning of opposition leaders by the Maduro regime, raising concerns among the international community. Despite the regime's manoeuvres and public distrust in the National Council, a significant voter turnout is expected. If Maduro secures victory (which is highly likely given the lack of competitive and free elections), there is a considerable risk of a new migration crisis in the region due to the dire social and economic situation in Venezuela.
Secondly, the relationship between Caracas and the US remains crucial. Despite historical ties in the energy sector, political tensions have marked bilateral relations over the past two decades. On April 18th, the US faces a decision on whether to reimpose sanctions on Venezuela's oil and mining sectors, following their temporary lifting in the Barbados agreement. While it is unclear whether the Biden administration will reimpose the sanctions, recent advancements of US firms in Venezuela may indicate otherwise, as noted by José. However, the outcome of the US presidential elections will be pivotal for Venezuela's future. A Donald Trump administration is likely to signify broader opposition to the regime, although a return to previous 'all options are on the table' strategy is not anticipated.
For further insights on Venezuela's tense relations with neighbouring Guyana, or with external powers such as China, Russia, and Iran, or to explore potential developments in the relationship with the UK, we invite you to watch the event's recording: https://www.dhirubhai.net/events/firesidechat-what-saheadforvene7173354964004630528/theater/
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