Economist, North America

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A pipeline through historically native land has sparked protests in Canada

Thu, 02/20/2020 - 08:49

“STOP THE INVASION! No pipelines on stolen native land!” So chanted dozens of protesters on a chilly afternoon this week in Vancouver. With placards in hand, they blocked traffic on a busy thoroughfare, doing their part to “shut down Canada”. That has become the rallying cry against the Coastal GasLink pipeline, a C$6.6bn ($5bn) project which will transport natural gas 670km (420 miles) across British Columbia to the Pacific coast, where a liquefied natural gas (LNG) plant is under construction.

The pipeline is an “invasion”, detractors say, because about a quarter of its route passes through land traditionally belonging to the Wet’suwet’en, a First Nations people. Since early February, when police broke up a blockade (with an injunction to do so) local disputes have escalated to national unrest. Allies of the Wet’suwet’en have organised copycat demonstrations far away from the pipeline itself.

None of this has scuppered the plans, but it has disrupted the economy and embarrassed the Liberal government. Canadian National Railway (CN) shut down lines in the east of the country and temporarily laid off about 450 workers; Via Rail, a passenger service, is doing the same to nearly 1,000. Food, heating fuel, farm exports and commodities are gridlocked. Cars and ships have been unable to get through bridges, ports and the...

An interview with Uruguay’s president-elect, Luis Lacalle Pou

Thu, 02/20/2020 - 08:49

AT HIS campaign headquarters on Artigas Boulevard, named after Uruguay’s founding hero, the man who hopes to be its next one was energised. Luis Lacalle Pou, the country’s conservative president-elect, is 46 years old but looks younger, with floppy brown hair, no jacket and sleeves rolled up. Days ahead of his swearing-in on March 1st, in an interview with The Economist, Mr Lacalle Pou set out a wide range of plans, from relaxing immigration rules to cutting public spending. But what obsessed him most of all was tackling a recent surge in crime (see chart). He lamented that just down the road were “no-go areas” overrun with violence. “It’s time to take back the streets,” he said, “by force if need be.”

The first step was to take back power. Last November, in a run-off, Mr Lacalle Pou narrowly defeated Daniel Martínez, the candidate of the Broad Front, a leftist coalition that had ruled Uruguay for 15 years. (The last president from Mr Lacalle Pou’s National Party was his father, in the 1990s.) The Broad Front had maintained economic and constitutional stability, and liberalised marijuana use and same-sex marriage. But it also presided over sharp rises in public employment, the fiscal deficit and violent crime. The homicide rate in Uruguay, a traditionally safe country of about 3.5m, shot up by 46% in 2018, to...

“What is Peronism?”

Thu, 02/13/2020 - 08:56

ON FEBRUARY 3RD Argentina’s new Peronist president, Alberto Fernández, joined Angela Merkel for dinner at the German chancellery in Berlin. According to press reports, Mrs Merkel asked her guest a question: “What is Peronism? I don’t understand. Are you on the left or the right?” Bello imagines a conversation that might have followed.

Mr Fernández laughed. He was used to foreigners not knowing much about Argentina besides Evita, tango and hyperinflation. But something about Mrs Merkel suggested that she was only feigning ignorance. “Let me explain,” said Mr Fernández cautiously. “First of all, we’re not populists. That was an invention of Mauricio Macri, my neo-liberal predecessor. We don’t just stir up the masses.”

“Really?” asked Mrs Merkel, sounding unconvinced.

“Really. I’m a social democrat,” the president insisted. “The base of Peronism is the trade unions and the poor, whom we always look after. But we also have the industrialists behind us. They liked General Juan Perón’s protectionism 75 years ago and they like it today. And we have the pope.”

“As always, Perón himself put it best,” Mr Fernández continued. “In 1972 he told a journalist: ‘Look, in Argentina, 30% are Radicals…30% are conservatives and a similar amount Socialists.’ ‘So where are the Peronists?’ asked the journalist. ‘Ah,’ replied...

El Salvador’s president summons the army to bully congress

Thu, 02/13/2020 - 08:56

NAYIB BUKELE, the president of El Salvador, draws notice outside his country for his youth, his jet-black beard and his mastery of social media. Now his authoritarianism is a trending topic. The sight of Mr Bukele entering the National Assembly on February 9th, alongside soldiers toting machine guns, shocked onlookers at home and abroad. He plonked himself in the empty chair reserved for the president of congress. “I liked seeing those empty seats,” he tweeted. “It made it easier for me to imagine them full of honest people who work for the people.”

Congress accused the president of staging an “attempted coup”. The Constitutional Court rebuked Mr Bukele. El Faro, a Salvadorean news website, called his stunt “the lowest moment that Salvadorean democracy has lived in three decades”. He retorted, not very reassuringly, “If I were a dictator, I would have taken control of everything.”

Eight months into his presidency Mr Bukele, who at 38 is the world’s second-youngest head of state, has an approval rating of 90%. But his left-leaning New Ideas party, founded in 2018, has not had a chance to win seats in congress. The legislature is dominated by two parties: the left-wing FMLN, the successor to a guerrilla movement that fought a decade-long civil war in the 1980s, and the right-wing Arena party, which...

Canada ponders a federal programme for pharmaceuticals

Thu, 02/13/2020 - 08:56

IN JULY Bernie Sanders hopped on a bus in Detroit with some Americans who have diabetes. They rode across the Canadian border to buy insulin at a tenth of the price they would pay at home. For Mr Sanders, who won the New Hampshire primary on February 11th, joining an “insulin caravan” had obvious appeal. He promises “Medicare for all”, suggesting that every American should enjoy the lavish public health spending that the elderly receive. He praises Canada for its tough negotiations with drug firms. “We should be doing what the Canadians do,” he declared.

Canadians have their doubts. Canada’s pharmaceutical prices are 25% higher than the average in the OECD, a club of 36 mainly rich countries. American prices are higher still, largely because the United States has powerful drug firms, no price-setting regulator and lots of citizens who receive health insurance through their employers and have little idea how much it costs. Unlike Canada, the United States also lets drugmakers advertise directly to consumers. As a share of GDP, Canada’s pharmaceutical spending is the fifth-highest in the OECD (see chart).

It is the only country with publicly financed universal health care that does not provide universal coverage for prescription drugs. A fifth of Canadians have no drug insurance. Nearly 1m say they spend less on food or...

Ecuador’s trial of the century opens

Thu, 02/06/2020 - 08:51

IT IS ECUADOR’S trial of the century. On February 10th the country’s top court is expected to open criminal proceedings against Rafael Correa, president from 2007 to 2017, and 20 other people. They are charged with taking and giving bribes, which they deny. Mr Correa, who moved to Belgium shortly after leaving office, hopes to play a big role in the presidential and legislative elections due in February next year. His trial may determine whether he can.

Ecuador’s current president, Lenín Moreno, has spent nearly three years trying to undo Mr Correa’s legacy. He had been Mr Correa’s vice-president and was seen as his heir. Once in office, Mr Moreno turned on his patron. He went after corrupt members of Mr Correa’s administration and took steps to restore independence to the judiciary and the press, which Mr Correa had curbed. The new president replaced his predecessor’s incontinent spending with a programme of austerity, backed with a $4.2bn loan from the IMF. He expelled Julian Assange, a co-founder of WikiLeaks, from Ecuador’s embassy in London, where Mr Correa had offered refuge.

But the undoing project has run into trouble. Mr Moreno’s attempt to end fuel subsidies provoked massive protests in October, which forced him to retreat. His approval rating is less than 20%. Mr Moreno says that he does not plan to run for re-...

A share issue in Venezuela, the world’s worst-performing economy

Thu, 02/06/2020 - 08:51

SOME WONDERED if the bosses of Venezuela’s oldest rum company had been sampling too much of their product. In January, with Venezuela in one of the deepest recessions in modern world history, Ron Santa Teresa launched the country’s first public share issue in more than a decade. The new equity was priced in bolívares, the world’s worst performing currency. Others speculated that the rum-maker, which cheekily notes on its website that its distillery in the Aragua valley near Caracas has survived “wars, revolutions, invasions, even dictators”, had decided that change was afoot.

Evidence of the latter interpretation is that the latest dictator, Nicolás Maduro, has recently become a capitalist, sort of. The disciple of Hugo Chávez (whose “21st-century socialism” set Venezuela on its road to ruin) has quietly lifted price controls and restrictions on dollar transactions. He now says firms can issue securities in hard currencies. He is thought to be contemplating a sale to foreign investors of a stake in PDVSA, the decrepit state oil company.

Ron Santa Teresa’s president, Alberto Vollmer, a fifth-generation rum-maker, says the company, whose shares were already listed, needs the money to buy barrels and build warehouses. It signed an international-distribution deal with Bacardi in 2016. Mr Maduro’s tentative...

The costs of Colombia’s closed economy

Thu, 02/06/2020 - 08:51

COLOMBIANS PAY more for wine than most Latin Americans. The price shoots up as soon as a case reaches shore. Each time a shipment arrives, importers must submit at least eight forms to as many agencies. Officials can take up to 15 days to clear it. In the meantime, importers store their bottles in climate-controlled warehouses. When a permit finally comes, bad roads and high trucking charges mean that merchants pay among the highest freight bills in the world to ship the wine to Bogotá, the capital, where most customers are. By the time it reaches a dinner table a bottle of wine costs eight times more than in its country of origin. Its costly journey is the rule, not the exception, for products imported by Colombia.

It used to be easier. The government liberalised the economy in the early 1990s after decades of protectionism. At that time Colombia depended on exports of coffee, the price of which was plummeting. In an effort to diversify the economy and make it more productive, the government reduced tariffs and eliminated lists of items whose import was prohibited.

That openness lasted just a few years. Owners of factories and sugar mills, dairy farmers, rice growers and regional governments, which own distillers of aguardiente, a local tipple, were hurt by competition. They lobbied to restore...

Latin America’s new war of religion

Thu, 02/06/2020 - 08:51

UNDER THE banner of “religion and traditional (ecclesiastical) privileges”, in 1858 Mexican Conservatives rose in arms against a Liberal constitution which declared freedom of worship and ended a rule preventing Catholic church property from being transferred to anyone else. After a three-year war, the liberal principles of religious toleration and the separation of church and state triumphed. In the following decades they spread across Latin America. Now, it seems, this 19th-century political battle has to be fought all over again.

The new blurring of the divide between spiritual and temporal realms owes much to the rise of evangelical Protestantism. Although 69% of Latin Americans were still Catholics in 2014, 19% were Protestants (26% in Brazil and more than 40% in three Central American countries), says a Pew poll. The number of Protestants is likely to have risen since then. Most are Pentecostals.

They emphasise a literal reading of the Bible and a direct personal relationship with God through baptism with the Holy Spirit. Many want their beliefs to shape public policy. Their concern is mainly, but not solely, to oppose gay rights and abortion. In some cases they dismiss science and have intervened in foreign policy. Some question the separation of church and state.

Jair Bolsonaro, Brazil’s populist...

The mystery of quipus—Incan knot records

Thu, 01/30/2020 - 09:29

SAN ANDRéS DE TUPICOCHA starts every year by swearing in new leaders, like many small towns in Peru. Instead of giving the office-holders a sash or medal it gives them a quipu, a coloured skein of knotted cords.

Quipus, or khipu, which means knots or talking knots in Quechua, were used to administer the vast empire of the Incas, which lasted for about a century until 1533. No one alive knows just how. San Andrés, in the highlands near Lima, is the last place in Peru where quipus have an official role, and that is ceremonial. “They represent who we are,” says Tito Rojas, president of one of the town’s ten communities. In December Peru’s government declared its ritual of bestowing them on community leaders like Mr Rojas to be part of the country’s cultural heritage.

The town’s quipus are thought to date from after Peru’s independence from Spain in 1821. They were used until the mid-20th century to record attendance at meetings, says Roy Vilcayauri, a former mayor. But the last person who could read that set died in 1990.

Scholars have been trying to puzzle out what messages are encoded in the knotted tally cords, which are usually made from dyed alpaca wool (they can also contain fibres from llamas, vicuñas and cotton). The type of knot, their number and their spacing...

Bolsa Família, Brazil’s admired anti-poverty programme, is flailing

Thu, 01/30/2020 - 09:29

LAST YEAR Natália Ribeiro sent her five-year-old daughter to live with relatives because she could not afford to feed her. She had tried to sign up for Bolsa Família (Family Fund), a conditional cash-transfer programme that supports millions of poor Brazilians. That includes 80% of families in Belágua, a town of 7,000 people in Maranhão, the poorest state. Ms Ribeiro should have been a shoo-in. She has no income. Her three children get regular health check-ups and will go to school, she promises. That is a precondition for receiving the monthly benefits, which start at 89 reais ($21). She has been waiting since May. “I want a better life for my little ones,” says the 24-year-old, who has long eyelashes like the baby in her lap and the toddler playing with a piece of wood on the floor. 

In June last year Brazil’s populist government, which had taken office five months before, slowed the acceptance of new beneficiaries and started cancelling payments to existing ones. The number of families admitted to Bolsa Família has dropped from 275,000 a month to fewer than 2,500. The number receiving benefits has fallen by 1m. The government says that 700,000 are on the waiting list, which may be an underestimate.

To critics of Jair Bolsonaro, Brazil’s president, this is evidence of his indifference to poverty. Mr Bolsonaro...

The difficulty of reforming Peru

Thu, 01/30/2020 - 09:29

IT WAS THE most popular thing any Peruvian president has done in a long time. Facing a serially obstructive congress widely seen as defending corrupt interests, in September Martín Vizcarra decreed its dissolution. This was constitutionally questionable and set a worrying precedent. But in political terms, the outcome of an election held on January 26th to replace the dissolved congress vindicated Mr Vizcarra. It also highlighted the weaknesses of Peru’s political system, and has not made his project of institutional reform any easier.

Mr Vizcarra, who was elected as vice-president in 2016, took over the top job almost two years ago when Pedro Pablo Kuczynski resigned over conflicts of interest. He inherited a battle with congress, dominated by the opposition led by Keiko Fujimori, the daughter of a former president. When leaked phone calls revealed apparent collusion among some judges and opposition lawmakers, Mr Vizcarra successfully appealed for public support in a referendum on reforms of the judiciary and politics.

That gave him the initiative, but only for a while. To break the deadlock Mr Vizcarra proposed calling an early general election. Ignoring this, the fujimoristas went ahead with a rushed vote to appoint new justices to the constitutional tribunal. The president claimed that this...

Brazilian prosecutors go after Glenn Greenwald, an American journalist

Thu, 01/23/2020 - 08:57

LAST JUNE the Intercept, a news site, published hacked messages that showed improper collaboration between Brazilian prosecutors and judges conducting the anti-corruption investigation known as Lava Jato (Car Wash). The leaks tarnished the image of Sergio Moro, the justice minister, who had been the judge in charge. They enraged Brazil’s nationalist president, Jair Bolsonaro, whose election in 2018 owed much to anger about corruption.

On January 21st prosecutors filed charges against Glenn Greenwald (pictured), a co-founder of the Intercept. They accused him of belonging to a “criminal organisation” that hacked the mobile phones of members of the Lava Jato task-force. The judge overseeing the case may throw out the charges. Even so, they raise questions about how free the press will be in Mr Bolsonaro’s Brazil and whether prosecutors will act independently.

Mr Greenwald, an American, became famous by helping publish Edward Snowden’s leaks of information from the United States’ National Security Agency. In July Mr Bolsonaro suggested that Mr Greenwald might “do jail time” for his Lava Jato revelations, and accused him of marrying his Brazilian husband to avoid deportation. That month, after a rumour surfaced that investigators were scrutinising Mr Greenwald’s bank accounts, a supreme-court judge barred the authorities...

Learning from Carlos Denegri, a crooked Mexican newsman

Thu, 01/23/2020 - 08:57

IN 1939 CARLOS DENEGRI, a young reporter, investigated a murder by gunmen working for Maximino Ávila Camacho, the governor of the state of Puebla and brother of the next president of Mexico. Denegri delivered a detailed account of Ávila’s crimes to the editor of Excélsior, the country’s most important newspaper. The editor did not publish it, explaining that the governor was a source of much paid advertising. “In this business we don’t only sell information and advertising space: above all, we sell silence,” he went on. Denegri quickly lost his idealism, and accepted a monthly stipend from the governor “for publicity and information services”.

These imagined words provide Enrique Serna, a Mexican writer, with the title of his new novel, El vendedor de silencio (“The Merchant of Silence”), a semi-fictionalised biography of Denegri, the country’s most prominent journalist from the 1940s to the 1960s and once named by the Associated Press as one of the ten most influential reporters in the world. Mr Serna offers a rich account of the incestuous relationship between politics and the media and the machismo and impunity that lay at the heart of the authoritarian rule of the Institutional Revolutionary Party (PRI), which governed for seven decades...

The current calm in Bolivia is fragile

Thu, 01/23/2020 - 08:57

ON A RECENT afternoon, workmen were repairing the wall around the Senkata gas plant in El Alto, a working-class city in the mountains above La Paz, Bolivia’s administrative capital. Backers of Evo Morales, the left-wing president who quit on November 10th, had blocked lorries from leaving the plant and knocked down the wall. On November 19th soldiers opened fire, killing ten people. Fresh paint now covers much of the rebuilt wall, but one mural remains from the chaotic presidential campaign that preceded Mr Morales’s resignation: his face and the word estabilidad (stability) in big capital letters. Restoring that to Bolivia will involve much more than fixing the wall. “The country is coming out of shock,” says Milenka García, a vice-president of El Alto’s neighbourhood association (Fejuve) who represents District 8, an area of cinder-block homes and dusty streets that includes the gas plant.

The crisis began on October 20th, when Mr Morales, who became Bolivia’s first indigenous president in 2006, tried to rig his re-election, sparking protests across the country. He fled to Mexico after losing the support of the police and the army, saying he had been toppled in a coup. His supporters set fire to buses and the homes of politicians and journalists who had criticised him. Opposition protesters burned the...

Argentina’s new government gets to grips with the economy

Thu, 01/16/2020 - 09:35

IT IS A MONTH now since Alberto Fernández took over from Mauricio Macri as Argentina’s president and, contrary to some forecasts, the sky over the Pampas has not yet fallen in. Having inherited a dire economic situation, including what Mr Fernández, a Peronist, called a “virtual default” on the country’s debts, his government has begun by doing more or less what he said it would. Adopting almost the opposite approach to its predecessor, it has laid out a tough fiscal policy and a loose monetary policy and has yet to say much about how it will handle the debt. Exchange and price controls, and the southern summer lull, have combined to buy the new team time. But will they use it wisely?

It was trying to buy time to reform a sick economy that got Mr Macri into trouble. A free-market conservative, he ran up debt to finance a gradual fiscal adjustment until investors took fright, prompting a run on the peso and forcing the government into the arms of the IMF. The economy slumped into recession, inflation surged to 54% last year and Mr Macri lost the presidential election. The new team’s first objective, according to Martin Guzmán, the economy minister, is “to halt the fall”.

They have swiftly pushed through an emergency package of mainly fiscal measures. These include tax increases on farm exports and travel abroad, and a...

Baseball-mad Andrés Manuel López Obrador throws money at the game

Thu, 01/16/2020 - 09:35

“TRAITOR. YOU ARE A TRAITOR.” That is how Eduardo Galeano, a leftist writer from Uruguay, greeted Che Guevara in Havana in the early 1960s. The Argentine’s crime had been to abandon Latin America’s favourite pastime, football, for North America’s. A Cuban newspaper had published a photo of him playing baseball. Guevara, who said it was “the first time someone calls me a traitor and keeps living”, learned to play in a Mexican prison while jailed with Fidel Castro in the 1950s. 

He is not the only left-wing leader to have caught the baseball bug in Mexico. Andrés Manuel López Obrador, the country’s president, has been a fanatic since childhood. He won the election in 2018 by pledging to go to bat for the poor and vows to “strike out” Mexico’s “mafia of power”.

Under his programme of “republican austerity”, the government has slashed spending on everything from child care to medicines. Baseball is an exception. In March Mr López Obrador opened an Office for the Promotion and Development of Baseball. It got 350m pesos ($19m) to spot and nurture talent. Bureaucrats at non-baseball agencies were enraged. 

Mexico’s constitution tells the government to “promote and stimulate” sport. It does not say which ones. Mr López Obrador has cut funding for Formula 1 and American-football events. Baseball, though, is “...

Jovenel Moïse tries to govern Haiti without a parliament

Thu, 01/16/2020 - 09:35

PETER CONFIDENCE lounges against a broken lamppost in a park in Petionville, a prosperous suburb of Port-au-Prince, Haiti’s capital, basking in the afternoon sun. As he rubs a tattooed St Peter on his neck he explains that Jovenel Moïse, Haiti’s president, is the only man strong enough to fix the country. Before he can finish, a passer-by selling food from a large metal pot that he lugs around interjects that the Americans should lock Mr Moïse up. Within seconds, a crowd assembles to discuss the state of the nation and the quality of its leader, nicknamed “Banana Man” because he once helped create a big banana plantation. The conversation pinballs between tirades and black humour.

Though such debate is a feature of Haitian life, the country’s parliament is silent. A new session should have begun on January 13th, the day after the tenth anniversary of a devastating earthquake. But a legislative election, due in October 2019, was never held. In the absence of a functioning legislature, the president will rule by decree. For a country with a history of brutal dictatorship, coups and dodgy elections, the prospect of one-man rule is ominous.

Even before it was dissolved, parliament was dysfunctional and its relationship with the president was broken. The 119-seat lower house was divided among 20-odd parties, which mostly...

A crude attempt to stifle what’s left of Venezuela’s democracy

Thu, 01/09/2020 - 08:50

ON SUNDAY JANUARY 5TH Juan Guaidó found himself perched unsteadily atop the ornate wrought-iron railings outside Venezuela’s national assembly, being pushed back by the riot shields of the National Guard. Since Mr Guaidó is the speaker of the assembly and was due to be re-elected to the post that day, the image said everything about the assault on the last vestiges of Venezuela’s democracy by the regime of Nicolás Maduro, who rules as a dictator. It underlined that a year after Mr Guaidó proclaimed himself “interim president” of the country, on the grounds that Mr Maduro’s election for a second term was fraudulent, he has legitimacy but no power. And it suggested that Mr Maduro has no interest in negotiating a solution for Venezuela’s long agony.

In December 2015 the opposition triumphed in a legislative election, the last fair contest the country has seen. It won 112 of the 167 seats in the assembly, a two-thirds majority and thus enough to change the constitution and appoint new judicial and electoral authorities. Mr Maduro’s regime went into action. The puppet supreme court barred three opposition legislators from taking their seats. In 2017 the regime set up a parallel “constituent assembly” of loyalists, which rubber-stamps its actions. The courts have stripped 29 opposition parliamentarians of their immunity. Two are in jail....

Justin Trudeau’s less ambitious second term as Canada’s prime minister

Thu, 01/09/2020 - 08:50

JUSTIN TRUDEAU returned from his Christmas break in Costa Rica with a new look. Canada’s prime minister has sprouted a salt-and-pepper stubble, making him look slightly less youthful. His makeover hints that he intends to govern differently in his second term, which began late last year. He has plenty of reasons to change his approach. The election on October 21st was a close shave. Mr Trudeau’s Liberal Party won 1m fewer votes than it had four years before and lost its majority in Parliament. He now leads a minority government dependent for support on other parties, especially the left-wing New Democrats (NDP) and the Bloc Québécois, which advocates independence for Quebec. The Liberals won no seats in the western prairie provinces of Alberta and Saskatchewan.

Mr Trudeau interprets this setback as a rebuff to his governing style rather than to his policies. He was a global cheerleader for every progressive cause, from welcoming refugees to expanding transgender rights. This grated on some voters. Ethical lapses, especially demoting the justice minister after she refused to help a big engineering firm avoid prosecution for bribery, compounded the damage.

Mr Trudeau’s first-term policies are easier to defend. They included legalising cannabis; a new child benefit, which cut poverty and lifted middle-class incomes; a...