The October Roundup

Our inaugural edition

For the inaugural edition of Indications and Warnings, I thought it would be useful to give an overview of the current conditions in Andean nations.

From North to South

Colombia

A country rich in physical and cultural resources, Colombia has a difficult history it is still working to overcome. With the inauguration of former leftist guerrilla Gustavo Pedro as President, much is up in the air politically, socially, and economically. Pedro has implemented a policy of “total peace” with all armed groups (political and/or criminal) in Colombia, which is essentially a mutual cease-fire to start negotiations, and said that his government will not continue its historical support for the US “war on drugs,” to include possible de-criminalization. He has also begun to reduce vehicle fuel subsidies and started the process of re-designing Colombia’s tax system with an eye to redistributing wealth. There is much to watch in the upcoming months.

Ecuador

The country I know best, having lived there for three years. Ecuador is in a difficult place right now between commodity price drops, indigenous strikes and protests, and a worsening security situation driven by organized crime. The current center-right President Guillermo Lasso hasn’t quite found his feet in the first year of his term leading to some uncertainty about Ecuador’s future. For me, the next big test for his administration is how they handle the ongoing negotiations with CONAIE, the indigenous confederation that led the nationwide strikes in June. As a condition for stopping the strikes, the government committed to a 90-day period to negotiate the confederation’s demands. These talks finished on 14 October with 218 agreements signed on a variety of issues. However, the issue that started the strike, fuel subsidies, was not resolved and no firm plan for the implementation of those agreements was included. These issues are being passed to follow-on groups to determine how to move forward, i.e. with legislation, executive order, or something else. From my point of view, the members of CONAIE have to be wondering how long the government is going to drag out action.

Peru

A country with great food, wonderful culture and an awe-inspiring variety of historical sites from thousands of years of culture. Unfortunately, it also has worsening internal security, increasing drug trafficking, and a continuing train wreck of a President. When Pedro Castillo took office in July 2021, there were many questions as to how this nationally unknown ex-school teacher would do as President. Well, after multiple impeachment attempts and formal corruption charges from the Peruvian Attorney General later, it appears he won’t do too well. Of course, some of those impeachment attempts may have been driven by political motivations. But the corruption charges look pretty damning for Castillo and some of his extended family. The situation is bad enough that Castillo has had to deny asking Venezuela’s President about political asylum.

Bolivia

Perhaps the archetype of an Andean nation, we really enjoyed and were challenged by our travels there. Bolivia is the poorest Andean nation with a per capita income of only 60 percent of the region’s average, according to the World Bank in 2021. The Movement Towards Socialism (MAS) party, led by ex-President Evo Morales, has been a force in Bolivian politics for decades and has done much to improve the life of Bolivians. However, all is not well in their house. Following Morales' attempt to run for a fourth term in spite of constitutional prohibitions, the annulment of the 2019 election, his resignation, and self-imposed “exile,” Bolivian politics was in turmoil. Luis Arce, Morales’ chosen successor, was elected President in October 2020. Since then, Morales and Acre have been in a gradually escalating battle for the party.

Chile

Long a bastion of commercialism and conservatism in the Andes, Chile is experiencing a generational change with the election of Gabriel Boric in March 2022. This 36 year old ex-student activist came to power promising wide-ranging social and economic changes via a project to extensively re-write Chiles’ Constitution. An effort strongly rejected by 62 percent of voters during the September 2022 approval referendum. While this defeat doesn’t kill the rewrite effort, it will put pressure on the Boric administration to dial down the changes and move to the center during the next drafting process. Also worth watching is the continuing insecurity in Southern Chile caused by radical Mapuche activists. So far, Boric has continued the use of emergency laws in an attempt to control the situation but has had no new initiatives.

Argentina

I don’t know many Argentines who would say they are an Andean nation. But that comes from mostly knowing residents of Buenos Aires. Since the mountains run the length of the country, I think they belong. In a continuing theme, there are some really difficult challenges facing Argentina. Politically, there is the ongoing presence of Christina Kirchner as the face and King Maker of Peronism. Her performance as Vice President as well as open criticism of President Alberto Fernandez has had an oversized impact on his ability to govern. Economically, Argentina is projected to have 100 percent inflation in 2022 which, in combination with a very strong US dollar, makes meeting their international loan obligations difficult. Fernandez has taken action by appointing a “Super Minister” to oversee the economy, production, and agriculture ministries. So far, the new Minister, Sergio Massa, has had success in re-negotiating debt service but in little else. Oh, there’s also a historic drought taking place that is hitting cattle, soy, and corn growers hard and has made wheat planting impossible this year.

And one more

Venezuela

Although the Andes do start a hundred or so miles North of the Venezuelan border, I do not intend to cover Venezuela. The complex issues and ongoing interesting events deserve more than I plan to give. So let’s leave it at Venezuela is a mess, think really long and hard before you go.

So that’s the Andes; lots of moving parts, lots of uncertainty.

Thanks for reading.

Scott