Economist, North America

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Updated: 52 min 19 sec ago

Justin Trudeau charms Donald Trump

Thu, 02/16/2017 - 08:44

A good hombre, apparently

GIVE Justin Trudeau credit for emotional intelligence. Paying his first visit to Washington after Donald Trump took office, on February 13th, the Canadian prime minister brought his host the perfect gift: a photograph of the president in his youth with Mr Trudeau’s father, Pierre, a glamorous prime minister of the 1970s. The subtle caress of Mr Trump’s vanity seemed to go down well. Mr Trudeau went home with Mr Trump’s promise that Canada has little to fear from his plan to renegotiate the North American Free Trade Agreement (NAFTA), which gives Canada, Mexico and the United States preferential access to each other’s markets.

Before the meeting, the Canadians were nervous. Mr Trump’s repeated threats either to renegotiate NAFTA or to rip it up were aimed almost entirely at Mexico (which, unlike Canada, has a big trade surplus with the United States). Yet Canada has almost as much to lose if the United States rescinds the 23-year-old agreement or demands one-sided revisions. The value of Canada’s trade worldwide is equivalent to 65% of its GDP; the United States buys three-quarters of Canada’s...

What to expect from Ecuador’s elections

Thu, 02/16/2017 - 08:44

WHEN Rafael Correa first ran for Ecuador’s presidency in 2006, supporters at his rallies brandished belts in homage to their candidate, whose surname means “belt” or “strap”. “Dale correa,” or “give them a whipping,” the crowds roared. It was a demand to punish what they regarded as the corrupt elites who had governed Ecuador since the return of democracy in 1979. Mr Correa promised he would. He won that election and then two more. His presidency brought a rare spell of political stability. Living standards rose and public services improved. But few would say that he kept his promise to clean up government. This year’s national elections, which begin on February 19th, are shrill with accusations of corruption. 

Mr Correa, who has a respectable approval rating of 42%, is not a candidate. He is counting on Lenin Moreno, a former vice-president, and his running mate, Jorge Glas, the current vice-president, to carry on his “citizens’ revolution”. Mr Moreno, who shares his alarming first name with 18,000 other Ecuadoreans, hopes to win in the first round by capturing the bulk of Mr Correa’s support and adding to it. To do...

The blacklisting of Venezuela’s vice-president

Thu, 02/16/2017 - 08:44

THE statement by the United States Treasury Department was blunt. It alleges that Tareck El Aissami, Venezuela’s vice-president, is a “prominent” drug trafficker, who amassed great wealth through his connections to gangs across Latin America, including Mexico’s vicious Zetas. Among the now-frozen American assets linked to him are three lavish apartments in the Four Seasons complex in Miami and a Gulfstream jet. If the allegations are true, Mr El Aissami’s carefully cultivated image as a true believer in the socialist ideology of Venezuela’s government is just a cover.

As normally happens when any outsider accuses anyone in the Venezuelan regime of wrongdoing, the country’s leaders have closed ranks. The foreign ministry accused the United States government of committing “an international crime”. Mr El Aissami himself denounces the allegations as untrue, “miserable and vile”.

But rumours of malfeasance have swirled around the dapper politician since he came to prominence under President Hugo Chávez in the early 2000s. He was interior minister, and then governor of the coastal Aragua state. Defectors accuse him of running his own...

A Peronist on the Potomac

Thu, 02/16/2017 - 08:44

A PRESIDENT is swept into office after whipping up a wave of grievance and resentment. He claims to represent “the people” against internal exploiters and external threats. He purports to “refound” the nation, and damns those who preceded him. He governs though confrontation and polarisation. His language is aggressive—opponents are branded as enemies or traitors. He uses the media to cement his connection with the masses, while bridling at critical journalism and at rebuffs to executive power. His policies focus on bringing short-term benefits to his political base—hang the long-term cost to the country’s economic stability.

Donald Trump? Yes, but these traits come straight from the manual of Latin American populist nationalism, a tradition that stretches from Argentina’s Juan Perón to Venezuela’s Hugo Chávez and beyond. Yes, Mr Trump is a billionaire capitalist whereas Chávez was an anti-capitalist army officer. But populism is not synonymous with the left: conservatives such as Peru’s Alberto Fujimori used its techniques, too. “Post-truth” politics and “alternative facts” have long been deployed in Latin America, from Mr Fujimori’s use of tabloid...

A politically correct Brazilian Carnival

Thu, 02/09/2017 - 08:40

CROSS-DRESSING, undressing, bad taste and ribaldry are features of every Brazilian Carnival (this year’s begins on February 24th). Transgression has always been part of the point. But this year the bacchanal’s political incorrectness is provoking a backlash, especially in Rio de Janeiro, where the festival is at its glitziest. And the demand for sensitivity has created another backlash of its own. In an editorial published on February 4th, O Globo, a liberal newspaper, lamented that “to police this Rio patrimony is to leave samba behind”.

The fuss is mainly about marchinhas, singalongs performed in Carnival street parades known as blocos. Often, the lyrics are unashamedly rude. Classics such as “Mary the Dyke” and “Zezé’s Head of Hair” do not evince respect for homosexuals. Zezé “looks like a perv/don’t know if he is”, goes the latter. Even politer songs are failing to pass politically-correct muster. Mulheres Rodadas (roughly, “well-worn women”), a feminist bloco in Rio de Janeiro, wanted to remove from its repertoire “Tropicália”, a much-loved song by...

Why Latin America is the deadliest place for environmentalists

Thu, 02/09/2017 - 08:40

Fallen friend of the forest

ISIDRO BALDENEGRO LÓPEZ, a farmer and a leader of the indigenous Tarahumara people, had spent much of his life campaigning against illegal logging in the Sierra Madre region of northern Mexico. On January 15th he was shot dead. His father died in the same way, for defending the same cause, 30 years before.

Defending nature is a dangerous occupation, especially in Latin America. According to a recent report by Global Witness, an NGO, 185 environmental activists were murdered worldwide in 2015, an increase of 59% from the year before. More than half the killings were in Latin America. In Brazil 50 green campaigners died in 2015. Honduras is especially perilous: 123 activists have died there since 2010, the highest number of any country relative to its population. Berta Cáceres, an indigenous leader who was a prominent campaigner against dams and plantations, was murdered there last March.

Why is Latin America so deadly? One reason is its abundant natural resources, which attract enterprises of all sorts, from multinationals to mafias. When prices are low, as they are now...

The pitfalls of renegotiating NAFTA

Thu, 02/09/2017 - 08:40

DONALD TRUMP called the North American Free-Trade Agreement (NAFTA) with Mexico and Canada the “worst trade deal ever approved in this country”. Soon it will become clearer what he intends to do about it. He has three choices: tear it up, bully the United States’ partners into making concessions that merely damage the agreement or go for a renegotiation that benefits all three. 

The process for making big changes to NAFTA has started. On February 3rd the Mexican government began a 90-day consultation with businesses on what its negotiating position should be. Wilbur Ross, who will lead the American negotiators after the Senate confirms him as commerce secretary, says NAFTA is “logically the first thing for us to deal with”. Notification to Congress, which must happen 90 days before talks can start, could come soon.

NAFTA is not the failure Mr Trump claims it is. Trade in goods among its three partners has more than trebled since it took effect in 1994; 14% of world trade in goods takes place under its rules. Cross-border supply chains have made American firms more competitive. The manufacturing jobs it has created in Mexico have...

What to expect when the presidents of Brazil and Argentina meet

Thu, 02/02/2017 - 08:47

PRICKLY nationalism is trending in the rich world, but in South America’s two biggest countries the talk is of partnering up. On February 7th Mauricio Macri, Argentina’s president (shown on the left), plans to visit his Brazilian counterpart, Michel Temer. They will promise to encourage trade and to improve a relationship that is frostier than it should be. There are grounds for hope, but also for scepticism.

For most of the 20th century Brazil and Argentina were more rivals than partners. In the 1970s they nearly embarked on a nuclear arms race; until the mid-1980s Brazil’s military-strategy textbooks taught that the likeliest war was with its southern neighbour. Brazil’s population and economy dwarf those of Argentina, though Argentines are richer (see chart). That makes it hard to reproduce anything like the Franco-German collaboration that drew Europe together. When Brazil and Argentina agree, it is usually on nationalist ideology rather than on openness. That was the case in the 1950s under the autocrats Getúlio Vargas in Brazil and Juan Perón in Argentina; and during the 2000s, when both countries adopted variants of left-wing populism.


In Cuba, app stores pay rent

Thu, 02/02/2017 - 08:47

CUBANS, like citizens of most countries in the digital age, are familiar with app stores. But theirs have actual doors, windows and counters. Los Doctores del Celular, a mobile-phone repair shop a few blocks from Havana’s Malecón seaside promenade, is one example. Inside, a Super Mario effigy, kitted out with lab coat and stethoscope, keeps vigil while technicians transfer apps to customers’ smartphones via USB cables attached to the shop’s computers. Although the United States’ embargo on Cuba makes it hard to buy apps and other services online, “Cubans are quickly picking up on app culture,” says Jorge-Luis Roque, a technician. A bundle of 60-70 apps costs $5-10. Customers delete the ones they don’t want.

The bricks-and-mortar app store is an ingenious Cuban response to digital deprivation. The island has some 300 public Wi-Fi hotspots, up from none two years ago. But connections are slow and, especially by Cuban standards, expensive; they normally cost $1.50 an hour. Adhering to the American embargo, app publishers like Apple and Google block downloads in Cuba. Music lovers can browse the iTunes store, but cannot buy songs or apps; Cubans...

The Odebrecht scandal brings hope of reform

Thu, 02/02/2017 - 08:47

PERCHED on a sandy hill overlooking Lima’s oceanfront is a 37-metre-high statue of Christ, a crude copy of the one that looks majestically down on Rio de Janeiro. It was unveiled in 2011 by Alan García, then Peru’s president. Now Peruvians see it as a monument to corruption. It was built with a donation of $800,000 from Odebrecht, Brazil’s biggest construction company, which has admitted that it paid $29m in bribes to secure contracts in Peru under the three governments that preceded the current one.

In the largest anti-corruption settlement in history, reached in December, Odebrecht revealed to authorities in the United States, Brazil and Switzerland that over 15 years it had paid nearly $800m in bribes related to contracts for more than 100 construction and engineering projects in a dozen countries. In Brazil, Odebrecht was at the centre of a cartel that gouged Petrobras, the state-controlled oil company; its former boss, Marcelo Odebrecht, is serving a 19-year jail sentence. The settlement showed that in nine other Latin American countries the company paid a total of $388m in bribes to government officials and their associates.


The Quebec City attack exposes Canada’s dangerous right-wing fringe

Wed, 02/01/2017 - 10:19

TERRORIST attacks in Canada are rare. The worst of recent times came from an unexpected quarter. On January 29th Alexandre Bissonnette, a 27-year-old student, allegedly burst into the Islamic Cultural Centre in Quebec City and killed six Muslims at prayer. The victims included a university lecturer, a pharmacist and a halal butcher. More than a dozen other worshippers were wounded.

The attack came amid the hue and cry provoked by Donald Trump’s order to ban citizens of some Muslim countries from the United States. Some people, both there and in Canada, thought that the perpetrator was a Muslim of some sort. In fact, according to his acquaintances, Mr Bissonnette is an anti-immigration “white supremacist” who supports Mr Trump. Appearing in court the day after the attack, he was charged with six counts of murder and five of attempted murder. He has not so far been charged with terrorism.

The murders have focused attention on Canada’s racist fringe, an uncomfortable topic for a country that prides itself on its tolerance and diversity. Before the attack the prime minister, Justin Trudeau, was burnishing Canada’s image by...

As Venezuela crumbles, the regime digs in

Thu, 01/26/2017 - 08:44

EVERY weekday morning, a queue of several dozen forlorn people forms outside the dingy headquarters of SAIME, Venezuela’s passport agency. As shortages and violence have made life in the country less bearable, more people are applying for passports so they can go somewhere else. Most will be turned away. The government ran out of plastic for laminating new passports in September. “I’ve just been told I might need to wait eight months!” says Martín, a frustrated applicant. A $250 bribe would shorten the wait.

As desperation rises, so does the intransigence of Venezuela’s “Bolivarian” regime, whose policies have ruined the economy and sabotaged democracy. The economy shrank by 18.6% last year, according to an estimate by the central bank, leaked this month to Reuters, a news agency (see chart). Inflation was 800%.

These are provisional figures, subject to revision. They may never be published (the central bank...

A row over money may disrupt Argentine football

Thu, 01/26/2017 - 08:44

Celebrate while you can

BUENOS AIRES has 36 stadiums with a capacity of at least 10,000 spectators, more than any other city in the world. Mauricio Macri, Argentina’s president, used his 12 years as president of Boca Juniors, the most popular football club, to launch his political career. He still enjoys a kickabout at the Quinta de Olivos, the presidential residence.

But an ugly row over money is disfiguring the beautiful game. The government owes 350m pesos ($22m) to Argentina’s football association (AFA), which owes the same amount to the country’s football clubs. Many are unable to pay their players. The dispute may delay the restart of the top division’s season, scheduled for February 3rd.

The crisis stems from Mr Macri’s determination to sweep away the populist policies of his predecessor, Cristina Fernández de Kirchner, which extended to football. He is also using the government’s muscle to force reform on a sport notorious for corruption.

For years, Argentines without cable television could only watch highlights of weekend fixtures. This amounted to “hijacking the goals until Sunday”, Ms...

The diplomatic meaning of El Chapo’s extradition

Thu, 01/26/2017 - 08:44

ONE Mexican whom Donald Trump is unlikely to deport is Joaquín Guzmán, better known as El Chapo (Shorty). The Mexican government put Mr Guzmán, the chief of the Sinaloa drug-trafficking gang, on an aeroplane to New York on January 19th, the last full day of Barack Obama’s presidency. He will stand trial on charges ranging from money-laundering to murder, to which he has pleaded not guilty. If convicted, he will probably spend the rest of his life in an American jail.

Mr Guzmán’s extradition is an opening gambit in Mexico’s diplomacy with Mr Trump, the most anti-Mexican president since James Polk, who waged the Mexican-American war in the mid-19th century. Mr Obama gets the credit because he was still president when the extradition happened. But the dispatch of Mr Guzmán to the United States is also a signal that Mexico is prepared to co-operate with the Trump administration, and to retaliate if ill-treated.

Mr Trump can hurt Mexico by ripping up the North American Free-Trade Agreement (NAFTA) with Mexico and Canada or through a renegotiation that restricts trade. On January 25th he signed an executive order to start building a “...

Death of a Brazilian justice

Thu, 01/26/2017 - 03:48

ON JANUARY 19th Brazil lost a crucial man at a crucial moment. Teori Zavascki, a justice of the supreme federal tribunal (STF), died along with four other people in the crash of a small aeroplane off Brazil’s south-eastern coast. He leaves behind a devastated family, legions of admirers—and the most explosive dossier of cases before the country’s highest court.

Mr Zavascki became a household name—in spite of the string of consonants inherited from his Polish forebears—because he oversaw investigations into the corruption scandal centred on Petrobras, the state-controlled oil company. Known collectively as Lava Jato (Car Wash), these have dominated politics since 2014. They led indirectly to the impeachment last August of the president, Dilma Rousseff; she was not implicated, but her Workers’ Party (PT) was. Before he died Mr Zavascki was about to authorise plea-bargaining deals with businessmen that could lead to more prosecutions of politicians.

Michel Temer, who succeeded Ms Rousseff, must now appoint a replacement. He was not expecting to have a hand in shaping Brazil’s highest court. None of the 11 justices...

El Salvador commemorates 25 years of peace

Thu, 01/19/2017 - 08:42

EL SALVADOR was reborn 25 years ago. On January 16th 1992 the government signed a peace accord with left-wing guerrillas at Chapultepec castle in Mexico City, ending a 12-year civil war in which 75,000 people died. The agreement, followed by a truth commission that laid bare the war’s atrocities and by an amnesty, was a model for reconciliation in other countries. It underpins El Salvador’s political order today. 

Stirring as that achievement was, the festivities held to commemorate it this week fell flat. The convention centre in San Salvador’s Zona Rosa, not far from where guerrillas invaded the capital in 1989, prompting the first peace talks, was emptier than normal for big events. A small exhibition, displaying military uniforms, guerrillas’ weapons and quotes about peace from the likes of Confucius and John Lennon, lined the walkway to the stage. The crowd, clad in white, seemed more interested in free pupusas (bean-and-cheese filled tortillas) than in the speeches. The event ended with a confetti drop, listless applause and a return to the food queues.

The mood was downbeat because El Salvador’s 6m...

Tango in trouble

Thu, 01/19/2017 - 08:42

WHEN couples tango outdoors in Buenos Aires, it is usually to cadge coins from tourists. A recent display, outside the city hall, had a new purpose: to draw attention to the plight of the city’s milongas, tango events where the dancers’ only audience is other dancers.

Perhaps 150 milongas take place weekly in dance halls and community centres across the capital, either in the afternoons or after midnight. “They are the heart of the tango,” says Julio Bassan, president of the Association of Milonga Organisers (AOM). And they are in trouble.

With a weak economy and high inflation cutting into incomes, attendance fell by as much as half last year, Mr Bassan reckons; 17 milongas closed. “When there’s so much uncertainty, the first thing that people cut back on is recreation,” says Jimena Salzman, who runs the Milonga de las Morochas (“Milonga of the Dark-Haired Women”). She charges an entrance fee of 100 pesos ($6.25), the cost of a cinema ticket. That puts some people off. “I love to dance, but I need to eat,” says...

An end to wet foot, dry foot

Sun, 01/15/2017 - 14:50

Floating to Florida is now futile

AMONG a group of young men gathered in a tin-roofed telephone-repair shop in Havana, the topic of conversation is how to leave Cuba. The easiest way, they now reckon, is to marry a European. That is because on January 12th, in one of his final acts as president, Barack Obama ended the 22-year-old “wet foot, dry foot” policy, which allowed Cubans who land on American soil to stay in the country; those caught at sea were sent home. That shuts off the main escape route for Cubans in search of a better life.

Mr Obama’s decision looks like an attempt to protect one of his few foreign-policy successes: his agreement with Cuba’s president, Raúl Castro, in December 2014 to restore diplomatic relations and loosen an economic embargo imposed on the island by the United States in 1960. Donald Trump, who will become the American president on January 20th, has said contradictory things about the rapprochement with Cuba, but his more recent comments have been negative. Some members of his transition team are fierce opponents of the normalisation policy.

Mr Trump’s administration...

Donald Trump’s presidency is about to hit Mexico

Thu, 01/12/2017 - 08:54

WHEN an asteroid hit Earth 66m years ago, wiping out the dinosaurs and 75% of plant and animal species, it hurt Mexico first. Donald Trump’s inauguration is far less frightening, but Mexicans can talk of little else.

Outside a massive Volkswagen (VW) factory in Puebla, two hours’ drive from Mexico City, workers fret about Mr Trump’s threats to whack big tariffs on cars made in Mexico. One American carmaker—Ford—cancelled plans to build a $1.6bn plant in San Luis Potosí, some five hours farther north. It may have had other reasons for doing so, but workers in Puebla are not reassured.

“We’re frustrated,” says Ricardo Méndez, an equipment repairman who works for one of VW’s suppliers. He had expected his employer to send him to work at the new Ford plant. Between bites of spicy chicken taco, Santiago Nuñez, who works for another VW supplier, vows to boycott the American carmaker.

The anger and bewilderment in Puebla is felt across Mexico. Mr Trump’s promises to make Mexico pay for a border wall, deport millions of illegal immigrants and rip up the North American Free-Trade Agreement (NAFTA) were among the few consistent policies...

Toronto’s mayor tries to improve transport

Thu, 01/12/2017 - 08:54

Joining an underground movement

FEW cities these days have the cachet of Toronto. It ranks high on lists of the world’s most “liveable” cities (the Economist Intelligence Unit, a sister company of The Economist, put it fourth last year). Drake, a popular rapper, is an enthusiast for his home town. Lovers of diversity are attracted to Canada’s biggest metropolis. Yet native Torontonians who have moved away are strangely resistant to returning home. John Tory, the city’s mayor, who tries to lure them back, says they give two main reasons for saying no. The first is that the jobs are better in places like London and Hong Kong. The second is that Toronto’s public transport is much worse.

Toronto’s subway system has changed little since 1966, the year an east-west line was added to a U-shaped north-south track. In a ranking of subway systems in 46 cities by the OECD, a club of mostly rich countries, Toronto placed 43rd, with just 19km (12 miles) of track per square km of territory in 2003. The situation has not improved since then, while the population has grown. The last big extension of the network of...