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Latam Brief: Ecuador reaches deal with China to restructure debt (September 26, 2022)

Source:IFM, Aid Data as of 2021

Last week, President Guillermo Lasso announced that Ecuador reached an agreement with China to restructure $4.4 billion of its outstanding debt, saving the country $1 billion over three years, reports the Wall Street Journal. Debt restructuring negotiations had begun in February of this year and concluded last Monday. As Ecuador’s most important trade partner, China’s agreement to reschedule payment was crucial for the South American country. Ecuador also currently finds itself in the throes of an IMF repayment plan. The new deal, which allows Ecuador to delay its debt payments to Chinese state banks by three years and reduces interest rates for some payments, comes accompanied by a separate agreement between Ecuador’s state-owned oil company Petroecuador and China’s state-owned Petrochina, delaying a predetermined number of crude oil deliveries from 2024 to 2027 from Ecuador to China and adding about $709 million in oil revenue for Ecuador over the next five years, explains Catherine Osborne in the Foreign Policy Latin America Brief. According to Augusto de la Torre, “The Lasso government has indeed expressed interest in redefining the bilateral dynamic. During his meeting with Xi Jinping on the sidelines of the 2022 Olympics, Lasso asked not only for debt relief but also for greater transparency in debt and investment contracts between the two nations, including by decoupling commercial relations with China involving oil sales from the financial (debtor-creditor) relations with China” (Inter-American Dialogue). 

The Financial Times notes, “Analysts in Ecuador cast the debt restructuring as a political victory for the Lasso government, which has been weakened by the protests as well as its minority status in congress,” providing short-term economic relief for the country. Some analysts worry that China’s increased spending in the region could cause financial dependency on the Asian country, especially as much of its spending is spent in lending initiatives to developing countries with a special focus on infrastructure and energy projects. Others point to the restructuring deal as a potential precursor to an Ecuador-China free trade agreement, something which Ecuador has been pursuing for quite some time and hopes to achieve in December.

Argentina

  • An official internal document of the Chinese government shows China welcoming Argentina to BRICS, reports Ambito
  • Infobae reports that in Argentina, more than three babies per day are born to mothers under 15 years old, according to the country’s Health Ministry. Seven out of ten of these pregnancies were undesired. 

Brazil

  • US officials have told Lula that they plan to quickly recognize Brazil’s election results, reports Reuters. (See last Friday’s LADB).
  • “Despite President Bolsonaro’s bluster about rejecting the results of Brazil’s national elections on October 2nd, the military does not appear likely to intervene on his behalf – preferring instead to use its power with whoever wins the election to avoid accountability, reduce civilian oversight, and protect its own institutional interests,” writes Matheus de Oliveira Pereira at Aula Blog
  • A new Datafolha poll reveals that 69% of Brazilians believe that there is corruption in the Bolsonaro government, reports Globo

Caribbean

  • “Officials in the Dominican Republic have made a series of moves this year to try and prevent a spillover of Haitian organized crime, yet they do not appear to be part of any coordinated strategy,” says InSight Crime, explaining that “no Dominican politician has yet provided evidence that Haiti’s gangs are indeed trying to migrate. Even at the theoretical level, it seems like a strange choice. While the two countries are neighbors, they are utterly linguistically, culturally, and criminally distinct, with the Dominican underworld being notable for its low levels of violence.” 
  • “Trinidad and Tobago has recorded 414 murders so far this year — 40 percent higher than the same day last year,” notes InSight Crime
  • Hurricane Fiona damaged infrastructure and wreaked havoc on Puerto Rico’s fossil fuel-dependent power grid. Ruth Santiago, Catalina de Onís, and Hilda Lloréns write at NACLA that developing the island’s rooftop solar energy production would be environmental justice. (See last Tuesday’s LADB)

Central America 

  • “In 2017, El Salvador’s Legislative Assembly passed a law banning metallic mining throughout the country. Today, there is a new mining threat, because an open pit gold mine being developed just on the other side of the border in Guatemala could have a profoundly negative environmental impact on El Salvador’s largest watershed, the Lempa River,” explains Tim Muth at El Salvador Perspectives, noting that the mine has received pushback from local leaders and activists in Guatemala, Honduras, and El Salvador. 

El Salvador

  • At Infobae, Héctor Silva Ávalos explores President Nayib Bukele’s trajectory and the path towards an unconstitutional reelection. 
  • El Salvador’s military was center-stage for the country’s Independence Day parade, writes Tim Muth at El Salvador Perspectives, arguing that “Since Nayib Bukele assumed the presidency, he has worked assiduously to ensure that he has a military highly loyal to him. He has elevated their position within the country, has announced plans to expand their ranks by 20,000 soldiers, and has increased their annual budget by more than $110 million. The military has gone on a spending spree for armored vehicles, new weapons and body armor, all celebrated by Bukele and the government’s social media image machine. And the Salvadoran military has responded with expressions of its loyalty to Bukele.”

Mexico 

  • Disappearances of LGBTQ+ individuals are severely undercounted in Mexico, reports Pie de Página.
  • “Currently, abortion up to 12 weeks is legal in nine of México’s 32 states: México City (2007), Oaxaca (2009), Hidalgo, Veracruz, Colima, North and South Baja California (2021) Sinaloa and Guerrero (2022),” explains Pie de Página, discussing abortion networks in Monterrey, Nuevo León and providing a FAQ section on the subject. 

Paraguay

  • “Ammunition manufactured for Paraguay’s military is ending up in the hands of organized crime groups as a crippling lack of traceability ensures gangs can fill their arsenals with ease,” reports InSight Crime

Peru

  • Ahead of regional and municipal elections on Sunday, 63% of Peruvians outside of Lima have not yet decided who they will vote for governor, reported La República yesterday. 
  • “Amid rising prices, small farmers in Southern Peru rely on traditional food systems to confront the food crisis,” write Hilda Beatriz Manzano Chura and Fabiana Li at NACLA

Regional

  • At the Foreign Policy Latin America Brief, Catherine Osborn highlights cases of successful UN projects, including “U.N. envoys currently in talks with President Xiomara Castro’s government about opening a special anti-corruption commission in partnership with local prosecutors and judges.” 

Venezuela 

  • The Maduro government “appears to be cracking down” on NGOs with a new draft law in which “NGOs in Venezuela would be forced to register with the new agency and reveal their beneficiaries and activities to the state. The agency would also create a fund where all international donations are held and make the decisions about which NGO activities to finance. Organizations would have six months to “adjust their forecasts and guidelines” to fit with rules created by the agency. This stipulation would potentially force them to align their activities with government policies and make them vulnerable to control, censorship, and even closure,” writes Tony Frangie-Mawad at Foreign Policy.

Arianna Kohan y Jordi Amaral / Latin America Daily Briefing
http://latinamericadailybriefing.blogspot

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