27% of Latin America's total private wealth is held in territories that offer favourable tax treatment.

Latin America is the world region with the highest percentage of private offshore wealth. The proximity of tax havens, in various countries or island dependencies in the Caribbean, can facilitate the arrival of this capital, some of which is generated illicitly (drug trafficking, corruption) and all of which evades national tax institutions with little supervisory and coercive force. Latin America lost 335 billion dollars in taxes in 2017, which represented 6.3% of its GDP.

▲ Caribbean beach [Pixabay].

article / Jokin de Carlos Sola

The natural wealth of Latin American countries contrasts with the precariousness of the economic status of a large part of their societies. Lands rich in oil, minerals and primary goods sometimes fail to feed all their citizens. One of the reasons for this deficiency is the frequency with which companies and leaders tend to evade taxes, driving capital away from their countries.

One of the reasons for the tendency to evade taxes is the large size of the Economics underground and the shortcomings of states in implementing tax systems. Another is the nearby presence of tax havens in the Caribbean, which have historically been linked to the UK. These territories with beneficial tax characteristics have attracted capital from the continent.

History

The history of tax evasion is a long one. Its relationship with Latin America and the British Caribbean archipelagos, however, has its origins in the fall of the British Empire.

From 1945 onwards, Britain gradually began to lose its colonial possessions around the world. The financial effect was clear: millions of pounds were lost or taken out of operations across the empire. To cope with this status and to be able to maintain their global financial power, the bankers in the City of London thought of creating fields of action outside the jurisdiction of the Bank of England, from where bankers from all over the world (especially Americans) could also operate in order to avoid their respective national regulations. A new opportunity then arose in the British overseas territories, some of which did not become independent, but maintained their links, albeit loose, with the United Kingdom. This was the case in the Caribbean.

In 1969 the Cayman Islands created the first banking secrecy legislation. It was the first overseas territory to become a tax haven. From offices established there, City banks built up networks of operations unregulated by the Bank of England and with little local oversight. Soon other Caribbean jurisdictions followed suit.

Tax havens

The main tax havens in the Caribbean are British Overseas Territories such as the Cayman Islands, the Virgin Islands and Montserrat, or some former British colonies that became independent, such as the Bahamas. These are islands with small populations and a small Economics . Many of the politicians and legislators in these places work for the British financial sector and ensure secrecy within their territories.

Unlike other locations that can also be considered tax havens, the British-influenced islands in the Caribbean offer a second level of secrecy in addition to the legal one: the trust. Most of those who hold assets in companies established in these territories do so through trusts. Under this system, the beneficiary holds his assets (shares, property, companies, etc.) in a trust which is administered by a trustee. These elements (trust, beneficiary, trustee, shell companies, etc.) are distributed in various Structures linked to different Caribbean jurisdictions. Thus, a trust may be established in one jurisdiction, but its beneficiaries may be in another, the trustee in a third, and the shell companies in a fourth. This is a subject of Structures that is almost impossible for governments to dismantle. This is why when overseas governments agree to share banking information, under pressure from Washington or Brussels, it is of little use because of the secrecy structure itself.

Impact in Latin America

Bank secrecy legislation emerged in Latin America with the goal aim of attracting legally obtained capital. However, during the 1970s and 1980s, this protection on data of current accounts also attracted capital obtained through illicit means, such as drug trafficking and corruption.

During those years, drug lords such as Pablo Escobar used the benefits of the Cayman Islands and other territories to hide their fortunes and properties. On the other hand, several Latin American dictatorships also used these mechanisms to hide the enrichment of their leaders through corruption or even drugs, as was the case with Panama's Manuel Noriega.

Over time, the international community has increased its pressure on tax havens. In recent years the authorities in the Cayman Islands and the Bahamas have made efforts to ensure that their secrecy Structures is not used to launder money for organised crime, but not all territories considered tax havens have done the same.

These opaque networks are used by a considerable part of Latin America's large fortunes. Twenty-seven per cent of Latin America's total private wealth is deposited in countries that offer favourable tax treatment, making it the region with the highest proportion of private capital in these places in the world, according to a 2017 study by the Boston Consulting Group ( agreement ). According to this consultancy firm, this diversion of private wealth is greater in Latin America than in the Middle East and Africa (23%), Eastern Europe (20%), Western Europe (7%), Asia-Pacific (6%) and the United States and Canada (1%). 

Tax havens are the destination of a part that is difficult to pinpoint of the total of 335 billion dollars subject to tax evasion or avoidance in the region in 2017, a figure that constituted 6.3% of Latin American GDP (4% lost in personal income tax and 2.3% in VAT), as specified in ECLAC's report Fiscal Panorama of Latin America and the Caribbean 2019. This UN economic commission for the region highlights that on average Latin American countries lose more than 50% of their income tax revenues.

The London connection

There have been various theories about the role played by London in relation to tax havens. These theories coincide in presenting a connection of interests between the opaque companies and the City of London, in a network of complicity in which even the Bank of England and the British government could have been involved.

The most important one was expressed by British author Nicholas Shaxson in the book Treasure Island. The thesis was later developed by the documentary film Spiders Web, produced by the Tax Justice Network, whose founder, John Christiansen, worked as advisor for the government of Jersey, which is a special jurisdiction.

The City of London has a separate administration, elected by the still-existing guilds, which represent the City's commercial and banking class . This allows financial operations in this area of the British capital to partially escape the control of the Bank of England and government regulations. A City that is attractive to foreign capital and prosperous is of great benefit to the UK's Economics , as its activity accounts for 2.4% of the country's GDP.

British sovereignty over the overseas territories that serve as tax havens sometimes leads to accusations that the UK is complicit with these financial networks. Downing Street responds that these are territories that operate with a great deal of autonomy, even though London sets the governor, controls foreign policy and has veto power over legislation passed in these places.

Moreover, it is true that the UK government has in the last decade supported greater international coordination to increase scrutiny of tax havens, forcing the authorities there to submit relevant tax information, although the structure of the trusts still works against transparency.

Correct the status

Latin America's problems with tax evasion may be more related to the fragility of its own tax institutions than to the presence of tax havens close to the American continent. At the same time, some tax havens have benefited from political instability and corruption in Latin America.

The effects of domestic capital flight to these places of special tax regimes are clearly negative for the countries of the region, depriving them of increased economic activity and revenue-raising possibilities, and hampering the state's ability to undertake the necessary improvement of public services.

It is therefore imperative that certain corrective policies are put in place. At the national policy level, mechanisms should be put in place to prevent tax evasion and avoidance. At the same time, at the international level, diplomatic initiatives should be shaped to put an end to the Structures of trusts. The OAS offers, in this sense, an important negotiating framework not only with certain overseas territories, but also with its own metropolises, since these, as is the case of the United Kingdom, are permanent observer members of the hemispheric organisation.

Criticism of Maduro, the resizing of the Chinese embrace and greater migration control mark the harmony with Washington after ten years of FMLN rule.

The surprising use of the military to pressure the Salvadoran Legislative Assembly in early February to approve a security appropriation has raised international alarm about what the presidency of Nayib Bukele, who came to power in June 2019, may hold. Bukele's first half-year of closer relations with the United States, after two decades of rule by the former FMLN guerrillas, may have led Bukele to believe that his authoritarian gesture would be excused by Washington. The unanimous reaction in the region made him correct the shot, at least for the time being.

▲ Swearing in of Nayib Bukele as president, in June 2019, with his wife, Gabriela Rodríguez [Presidency of El Salvador].

article / Jimena Villacorta

El Salvador and the United States had a close relationship during the long political dominance of the right-wing ARENA party, but the coming to power in 2009 of the Farabundo Martí National Liberation Front (FMLN) brought El Salvador into alignment with the ALBA countries (mainly Venezuela, Nicaragua and Cuba), which led to occasional tension with Washington. Furthermore, in 2018, in the final stretch of Salvador Sánchez Cerén's presidency, diplomatic relations with Taiwan were severed and the possibility of strategic investments by China was opened up, which were viewed with suspicion by the United States (especially the option of controlling the Pacific port of La Unión, due to the risk of its military use in a crisis). status .

Nayib Bukele won the early 2019 elections presenting himself as an alternative to the traditional parties, despite the fact that he was mayor of San Salvador (2015-2018) leading a coalition with the FMLN and that for the presidential elections he stayed with the acronym GANA, created a few years earlier as a split from ARENA. His denunciation of the corruption of the political system, in any case, was credible for the majority of an electorate that was certainly tired of the Bolivarian tone of recent governments.

During his electoral campaign, Bukele had already advocated improving relations with the United States, as it is a partner more economically interesting for El Salvador than the ALBA nations. "Any financial aid that comes is welcome, and better if it is from the United States", said one of his advisors. These messages were immediately received in Washington, and in July the US Secretary of State, Mike Pompeo, visited El Salvador: it was the first time in ten years, precisely the time of the FMLN's two consecutive presidencies, that the head of US diplomacy had visited the Central American country. This trip served to accentuate the partnership at subject in the fight against drug trafficking and the gang problem, two shared problems. "We have to fight the MS-13 gang, which has sown destruction in El Salvador and also in the United States, because we have its presence in almost 40 of the 50 states in our country," Pompeo said.

In line with the change of orientation it was undergoing, El Salvador began to align itself in regional forums against the regime of Nicolás Maduro. Thus, on 12 September, the Salvadoran representation in the Organisation of American States (OAS) supported the activation of the Inter-American Reciprocal Treaty of attendance (TIAR), after years of abstaining or voting in favour of resolutions supporting Chávez's Venezuela. On 3 December Bukele announced the expulsion from El Salvador of Maduro's government diplomats, an action immediately replicated by Caracas.

In the same months, El Salvador accepted the terms of the new migration approach that the Trump administration was outlining. During the summer, the White House negotiated with the countries of the Central American Northern Triangle agreements similar to the safe third country mechanism, whereby Guatemala, Honduras and El Salvador agreed to process as asylum seekers those who had passed through their territory and ended up in the US by formalising this application. Bukele met with Trump in September at the United Nations General Assembly framework and signed the agreement, which was presented as an instrument to combat organised crime, strengthen border security, reduce smuggling and human trafficking. 

The signature of agreement proved to be controversial, as many authorities questioned the guarantees of security and protection of rights that El Salvador can offer, when it is the lack of such guarantees that is driving the emigration of Salvadorans. Rubén Zamora, El Salvador's former ambassador to the UN, criticised the fact that Bukele was conceding a great deal to the United States, with hardly anything in return.

Bukele, however, was able to showcase a US counterpart in October: the extension for one year, until January 2021, of the Temporary Protected Status (TPS) that provides legal cover for the presence of 250,000 Salvadorans and their families in the US. The total number of Salvadorans residing in the US is at least 1.4 million, the largest number of Latin American migrants after Mexicans. This sample shows the strong link between the Central American nation, home to 6.5 million people, and the great power of the North, which is also the destination of 80% of its exports and whose dollar is the currency used in El Salvador.

The new Salvadoran president appeared to cut short this harmony with Washington in December, when he made an official trip to Beijing and met with the Chinese leader, Xi Jinping. The US had warned of the risk of China taking strategic advantage of the door that was opening in Central America with the successive establishment of diplomatic relations with the countries of the American isthmus, which until a few years ago were a stronghold of support for Taiwan. In particular, the US embassy in El Salvador had been particularly active in denouncing the Sánchez Cerén government's alleged efforts to grant China the management of the Port of La Unión, in the Gulf of Fonseca, which could be joined by a special economic zone.

However, what Bukele did on this trip was to resize, at least for the time being, this relationship with China, limiting expectations and calming US suspicions. Not only does the question of the port of La Unión seem to have been shelved, but the Salvadoran president also confined China's attendance to the realm of financial aid at development and not to the granting of credits which, in the event of non-payment, condition national sovereignty. Bukele specified that the "gigantic cooperation" promised by China was "non-refundable" and referred to typical international cooperation projects, such as the construction of a Library Services, a sports stadium and a sewage treatment plant to clean the sewage discharged into Lake Ilopango, near the capital.

The port of Chancay, at position of the state shipping company Cosco, will be operational in 2022.

The Chinese pronounce it almost like Shanghai, but it is not in China but in Peru. The port of Chancay, 75 kilometres from Lima, is to become the first Chinese logistics hub for the Pacific side of Latin America. It is the only port in the region for the state shipping company Cosco, which once established its European gateway in Piraeus entrance and is now preparing its access of goods to South America via Chancay. The infrastructure represents an investment of 3 billion dollars.

Computer design of the facilities of the new port of Chancay, 75 kilometres north of Lima [Volcan].

article / Gabriela Pajuelo

The port of Chancay aims to become one of China's main connections with the countries on the west coast of South America, serving as a bridge for the growing trade in goods from this region to Asia-Pacific. Through the company Terminales Portuarios Chancay, China's Cosco Shipping Ports is contemplating an initial investment of 1.2 billion dollars for the first phase of project - construction of new dykes to gain ground to the sea, achieving a greater depth (16 metres) and surface area for operations (one million containers). The total investment will be USD 3 billion; the entrance is expected to be operational by 2022.

Since 2014, China has been Peru's leading trade partner partner , replacing the United States. In 2017, China was the destination of 26% of Peru's exports (11.7 billion dollars) and the origin of 23% of its imports (8.75 billion). Chinese interest is focused on minerals, the largest Peruvian export sector, and therefore the port of Chancay is emerging as the main exit point for these raw materials to China. Return freight will bring Chinese manufactures, not only to Peru but also to neighbouring countries.

Beijing's interest in Peru's raw materials has already led to a free trade agreement between the two countries in 2009, which was improved last year, signature . It is a relationship that has not been complicated by the granting of large loans that the recipient country then finds difficult to refund: Peru has only received loans from Chinese public lenders to the value of 50 million dollars in 2009, which places it at the bottom of the list of recipients of Chinese loans in Latin America.

Cosco took over 60% of Terminales Portuarios Chancay for $225 million in the first half of 2019, sharing a partnership with Peruvian miner Volcan, which owns the remaining 40%. This is the first port that the large Chinese state-owned shipping company will control in its entirety in the Western Hemisphere, as its presence in the port of Seattle, in the USA, is limited to the operation of one terminal. Cosco has 34 terminals worldwide, 11 of which are outside China (in Spain it has a presence in the ports of Valencia and Bilbao). Other Chinese companies also have a terminal in the region, such as in the mouths of the Panama Canal (China is the second most important Username of this inter-oceanic waterway, after the USA), or are involved in port expansion works, such as in Itaqui (Brazil). Beijing has also expressed interest in managing entire ports - the case of La Unión in El Salvador -but Chancay is the first realisation in this sense.

The new port of Chancay, almost 1,000 hectares in size, will include an entrance complex, an underground viaduct tunnel and an operational port area. This will have a container terminal with two berths, and a bulk, general cargo and roll-on/roll-off terminal with two additional berths. According to the company, the port will reach an annual cargo handling capacity of one million TEU (Twenty-foot Equivalent Unit). It should be added that the port complex will have the capacity to unload Triple E vessels, considered the second largest container ships in the world.

The multi-port is located 75 km north of Lima and will be connected to the centre of the country via a road to Oyón and Ambo, in the Peruvian Andes. This road infrastructure, with a public investment of 450 million dollars, represents a decentralisation effort on the part of the Peruvian government.

The port of Chancay could pose a serious challenge skill to the Callao Port Terminal, managed by DP World Callao (business subsidiary of Dubai Ports World), APM Terminals and Transportadora Callao. This is the de facto port of Lima and is the country's main port in terms of traffic and storage capacity, with a port movement in 2018 of 2.3 million TEUs and 56 million tonnes, representing 51% of the national total.

Cosco Shipping Ports terminals worldwide [Cosco Group].

The Minister of Transport and Communications, María Jara Risco, has announced a plan to double the storage capacity of the port of Callao, but there are questions as to whether this will be enough to compete with the new port of Chancay. The President, Martin Vizcarra, sample is convinced that the two facilities can work in a complementary way, and that the new infrastructure will help to decongest the lorry traffic at the capital's area .

Chinese investment, however, has given rise in some quarters to talk of "chequebook diplomacy", a concept that refers to the use of investments or loans to establish favourable relations with countries occupying strategic positions in regions of geopolitical interest. While infrastructure such as Chancay is highly interesting for the recipient country, it may be obliged to refund in other ways, perhaps by allowing the exploitation of mineral resources. Apart from that, there are internal Chinese regulations, which oblige their companies with port terminals in the rest of the world to host the navy if necessary.

China's growing influence in the Western Hemisphere worries the US. Its own vice-president, Mike Pence, warned Latin American countries that these investments represent a potential threat, because at the very least they establish an excessive dependence on trade and credit ties with China, generating a high trade deficit and high debt. They may also, according to Pence, negatively affect issues such as environmental protection and respect for protected areas. 

The Pentagon has spoken in more dramatic terms. In February 2019, Admiral Craig Faller, head of the Southern Command, warned that in the future "China could use its control of deep-water ports in the Western Hemisphere to increase its global operational position".

In its ten operational years the "Dome" has shown effectiveness, but a comprehensive political regional solution is needed

In 2011 Israel deployed its "Iron Dome" mobile defense system in response to the rocket attacks it suffered the previous years from Lebanon (Hezbollah) and Gaza (Hamas). The Israel Defense Force claims that the system has shown an 85% - 90% success rate. However, it offers mixed results when other considerations are taken into account. Its temporary mitigation of the menaces of the rocket attacks could distract Israelis in seeking out a comprehensive political regional solution; possibly a solution that could make systems like the "Iron Dome" unnecessary. 

▲ How "Iron Dome" works; explanation on an image produced by Rafael Advanced Defense Systems

ARTICLE / Ann M. Callahan

The "Iron Dome" is a mobile defense system developed by Rafael Advanced Defense Systems and Israel Aerospace Industries developed, produced and fielded in 2011 to respond to the security threat posed by the bombings of rockets and projectiles shot into Israel, many of which landed in heavily populated areas.

Bombings into Israel intensified during the 2006 Second Lebanon War when Hezbollahfired approximately 4,000 rockets from instructions in the south of Lebanon. From Gaza to the South, an estimated 8,000 projectiles were launched between 2000 and 2008, mostly by Hamas. To counter these threats, the Defense Ministry, in February 2007, decided on the development of the "Dome" to function as a mobile air defense system for Israel. After its period of development and testing, the system was declared operational and fielded in March 2011.

The system is the pivotal lower tier of a triad of systems in Israel's air defence system.

The "David's Sling" system covers the middle layer, while the "Arrow" missile system protects Israel from long-range projectiles.

The Iron Dome functions by detecting, analyzing and intercepting varieties of targets such as mortars, rockets, and artillery. It has all-weather capabilities and is able to function night or day and in all conditions, including fog, rain, dust storms and low clouds. It is capable to launch a variety of interceptor missiles. 

Israel is protected by 10 "Iron Dome" batteries, functioning to protect the country's infrastructure and citizens. Each battery is able to defend up to 60 square miles. They are strategically placed around Israel's cities in order to intercept projectiles headed towards these populated areas. Implementing artificial intelligence technology, the "Dome" system is able to discriminate whether the incoming threats will land in a populated or in an uninhabited area, ignoring them in the latter case, consequently reducing the cost of operation and keeping unnecessary defensive launches to a minimum. However, if the "Dome" determines that the rocket is projected to land in an inhabited area, the interceptor is fired towards the rocket.

A radar steers the missile until the target is acquired with an infrared sensor. The interceptor must be quickly maneuverable because it must intercept rudimentary rockets that are little more than a pipe with fins welded onto it, which makes them liable to follow unpredictable courses. It can be assumed that the launchers of the rockets know as little as the Israelis as to where the rockets would end up landing.

Effectiveness

The IDF (Israel Defense Force) claims an 85% - 90% success rate for the "Iron Dome" in intercepting incoming projectiles. Operational in March 2011, to date the "Iron Dome" has successfully destroyed approximately 1,500 rockets. The destruction of these incoming rockets has saved Israeli lives offering physical protection and shielding property and other assets. In addition, for the Israelis it serves as a psychological safeguard and comfort for the Israeli people. 

Regarding the "Dome" as an asset for Israel's National Security Strategy, while standing as an undeniable asset, it has had mixed results regarding its four major pillars of Deterrence, Early, Active Defense and Decisive Victory as well as some unintended challenges. 

For instance, regarding the perspective of its psychological protection for the Israeli people, it is thought to also effect Israeli public in a negative manner. Regardless of the fact that it currently offers effective protection to the existing threats it could, in fact, help cause a long-term security issue for Israel. Its temporary mitigation of the menaces of the rocket attacks could distract Israelis in seeking out a comprehensive political regional solution; possibly a solution that could make systems like the "Iron Dome" unnecessary. 

In addition, while the "Dome" suffices for now, it cannot be expected to continue this way forever. Despite the system's effectiveness, it is just a matter of time before the militants develop tactics or acquire the technology to overcome it. The time needed in order to accomplish this can be predicted to be significantly reduced taking into account the strong support from the militant's allies and the considerable funding they receive.  

Still a comprehensive diplomatic solution is needed

Today, the world's militaries of both state and non-state actors are engaged in a technological arms race. As is clearly known, Israel's technological dominance is indisputable. Nevertheless, it, by no means, stands as a guarantee as destructive technology becomes more accessible and less expensive. As new technologies become more available they are subject to replication, imitation and increased affordability. As technologies develop and are implemented in operations, counter techniques can shift and new tactics can be developed, which is what the militias are only bound to do. Moreover, with the heavy funding available to the militias from their wealthy allies, acquiring more advanced technologies becomes more likely. This is a significant disadvantage for Israel. In order to preserve their upper hand, constant innovation and adaptation is a necessity. 

The confusion between the short-term military advantage the technology of the "Dome" offers and the long-term necessity for a comprehensive and original political, diplomatic solution is seen as a risk for Israel. Indeed, Amir Peretz, a minister in Israel's cabinet, told the Washington Post in 2014 that the "Iron Dome" stands as nothing more than a "stopgap measure" and that "in the end, the only thing that will bring true quite is a diplomatic solution".

Despite these drawbacks, however, in all the positive aspects that the system offers clearly outweighs the negative. The "Iron Dome" stands undeniably as a critical and outstanding military asset to Israel's National Security, even while Israel works to address and mitigate some of the unforeseen challenges related to the system.

The island faces the most serious economic crisis in twenty years: Venezuela's collapse and Trump's pressure highlight Havana's immobilism

The end of the USSR, a major subsidiser of the Castro regime, did not lead Havana to the economic and political opening that took place in most of the former communist bloc. After a time of severe hardship in the 1990s, known as the "special peacetime period", Cuba got another saviour in Venezuela, thus avoiding the necessary reforms. Today, the Venezuelan collapse and the pressure being exerted by Washington once again highlight Havana's unwillingness to change, as it faces another "special period", less intense but equally painful for the Cuban people.

▲ Street in the historic centre of Havana [Pixabay].

article / Patricia Urdánoz

agreement Cuba's Economics could have closed 2019 with a growth of barely 0.5% of GDP and could repeat this poor performance in 2020, according to estimates by ECLAC, the UN Economic Commission for Latin America and the Caribbean. These are figures that place the island on the brink of recession, given that there could be a negative quarter. Although the Cuban government puts its economic goal for this year at 1%, its 1.5% target for 2019 may have been off by as much as one percentage point (international organisations, in any case, cannot audit Cuba's accounts); moreover, the elements contributing to the economic performance have worsened.

Growing economic difficulties have generated fears among Cubans of a return to the 'special period', as the 1990s were known when the dissolution of the USSR left the island without the massive financial aid assistance provided by Moscow. That time of special hardship was superseded by the financial aid that from 2002 onwards began to arrive from Hugo Chávez's Venezuela. It was the Venezuelan collapse that prompted Raúl Castro to seek salvation through rapprochement with the Obama Administration, but the Trump Administration's new restrictive measures have left Havana with no prospects.

Cubans have begun to suffer shortages of basic products such as medicines and food, and long, endless queues are once again appearing in the Cuban capital. The Economics has been stagnant since 2014: although there was a clear upturn the following year, 2016 saw a contraction, which the government put at 0.9% of GDP, meaning it had fallen into recession for the first time since the "special period" twenty years ago.

Although it is unlikely that Cuba will reach the dramatic figures of much of the 1990s, when the island's Economics contracted by approximately 35%, some estimates, reported by the Wall Street Journal, consider that if Venezuela were to completely cancel its financial aid there could be a contraction of 8% or 10%.

Before the "special period", the island was 82% dependent on the Soviet Union. Dependence on Venezuela is comparatively less and is also decreasing due to the severe crisis in that country. Venezuela's financial aid , basically by sending oil in exchange for the attendance of doctors, sports trainers and other staff, for which Caracas also pays, accounted for 22% of Cuba's GDP in 2013; by 2017 it had fallen to 8.5%.

The economic outlook, in any case, is not good and a worsening in several areas is to be expected for 2020, which will at least prolong the stagnation.

Venezuelan oil now in Russian hands

Although Venezuela's financial aid has been decreasing, Caracas' contributions continue to be important, so any further erosion of this aid would have an effect on Cuba's Economics . The 100,000 barrels of oil per day that Venezuela has been sending to Cuba for many years has recently been reduced to around 60,000 barrels. A further reduction is not to be expected, but the control of PDVSA's production that Russia is acquiring leaves the regime of Nicolás Maduro less room for political control over oil.

Fewer doctors abroad

Venezuela's out-of-control inflation could force a reduction in the payment Venezuela makes for the services provided on Venezuelan soil by staff Cubans. Carmelo Mesa-Lago, an economist specialising in Cuba, points out that Venezuela, which purchases 75% of this professional Cuban service abroad (an important means of access to hard currency), has already reduced its purchases by 23% between 2014 and 2017 and could be forced to make further cuts. Havana, on the other hand, stopped making cash in 2019 with the doctors it had stationed in Brazil and the same will happen in 2020 with those in Bolivia, after political changes in those countries forced their return to the island.

Below goal of 5 million tourists

The expectations opened on subject for tourism with the increase in travel from the US due to the facilities provided by President Obama have been frustrated by the restrictions again imposed by his successor. issue In 2018 there was a drop of 4.7 million tourists to 4.7 million, a figure that fell by 10% in 2019 to 4.3 million. Although the government says it expects an increase in 2020, it has stopped setting goal as a target to reach 5 million tourists. The limitation already imposed by Trump in 2018 on US-based cruise travel is followed by the recently announced limitation on direct flights, which could affect the income from tourism (those who arrive by plane tend to spend more during their stay).

Moderate exports

Export revenues could improve, but neither production nor prices look set to increase significantly. Nickel production has been rather stagnant and sugar production is recovering from its all-time low in 2017-2018.

Remittances will continue to flow

The restrictive measures imposed by the Trump Administration on remittances arriving in Cuba from the US, which are the majority, do not seem likely to affect their amount, as the established limit remains above the amount of most remittances. As a study by The Havana Consulting Group indicates, the current average amount sent is between 180 and 220 dollars per transaction, and as 95 per cent of Cubans who send remittances to their relatives on the island do so once a month, the limit of 1,000 dollars per quarter imposed by Washington, which came into force last October, is not reached. In addition, the study states that 45% of remittances to Cuba arrive through informal channels. In 2018, Cuba received 3,691 million dollars, a figure that practically doubles if non-cash remittances are taken into account.

Insufficient foreign investment

source Remittances should play an important role in boosting the national Economics , and in fact since the economic opening of 2010 they have functioned as an income source similar to foreign investment, as they were behind the start-up of many "cuentapropista" businesses. These self-employed businesses reached 535,000 workers in 2016, according to official statistics, but the stagnation in the growth of tourism is putting this private activity in difficulties. The Havana Consulting Group study concludes that "unlike most Latin American countries, the Cuban government does not take advantage of the potential of remittances as a way to attract investment capital to the country". Foreign direct investment, in any case, has been increasing, but the slowness in making the special zone of the port of Mariel attractive and the added difficulties from the US with the entry into force in 2019 of degree scroll fourth of the Helms-Burton Act, which encourages the presentation of lawsuits for the assets expropriated during the Cuban revolution, dampens the island's investment attractiveness.

DECENTRALISATION, BUT TIMID OPENING

The problem of the inefficiency of Cuba's Economics is largely due to its model centralisation, which creates shortages for consumers and great uncertainty for businesses. Along with other burdens that the country has carried since its beginnings, such as corruption, illegalities, low levels of savings, indebtedness and insufficient export revenues. Cuba's foreign debt between 1958 and 2017 multiplied by 190 times. And there is a difficult situation for the emergence of the private sector.

The island needs new structural economic reforms by the government, and it would also be interesting to follow the economic strategies of countries such as Vietnam and China, which have known how to open up to the international market under a communist government. For its own geopolitical interests, Washington should take care that its pressure measures do not drive the island into the arms of China and Russia.

Raúl Castro's successor as president, Miguel Díaz-Canel, and his appointed prime minister, Manuel Marrero, have announced the beginning of a process of economic decentralisation this year that will give greater autonomy to state-owned companies. It remains to be seen whether progress will actually be made along these lines and whether this will increase the efficiency of Cuba's Economics , as the reforms promised by Castro have been a very timid opening, not particularly transformative.

Increasingly distant from the Alliance, Turkey is creating discomfort among its Western partners, but is unlikely to be invited to leave.

Its strategy in the Syrian conflict, its rapprochement with Russia through the acquisition of the S-400 anti-aircraft system and its desire for projection in the eastern Mediterranean, where it is damaging Greek interests, have brought Ankara into ongoing friction with NATO over the past few years. But the Alliance is not in a position to do without Turkey. Not only is its geographic status valuable as a bridge between East and West, but without Turkey NATO would be less able geopolitically to act against terrorism or control refugee movements and its military defence capabilities as an alliance would be diminished.

meeting between the Presidents of Turkey and Russia in Istanbul in January 2020 [Turkish Presidency].

article / Ángel Martos

Relations between the Atlantic Alliance and the Republic of Turkey are at their most tense in recent history. Ankara's foreign policy has been in a state of flux given the instability of its governments since the death of the Father of the Fatherland, Mustafa Kemal Ataturk. The Kemalist republic projected a very different image of Asia Minor than the one we know today: the secularism and westernisation that characterised its bequest has been replaced by a moderate Islamic-tinged authoritarianism (according to Recep Tayyip Erdoğan, president of the Republic and leader of the training AKP).

This profound evolution has been reflected in the field of International Office, as is to be expected. The doctrine of neo-Ottomanism has gained ground among its foreign policy makers. Turkey now seeks to exploit to the full its position as a bridge between Western and Eastern civilisation, while gaining influence among its adjacent states and emerging as the stabiliser of the Middle East.

In this scenario, the main headache for Western statesmen is the substantial improvement in Anatolia's relations with NATO's arch-enemy Russia. This improvement cannot be understood without recalling a series of events that have led Turkey to distance itself from the European continent: the lukewarm reaction of Western governments to the 2016 coup d'état; the reticence shown towards the continuous requests for extradition of Fetulah Gülen's refugee followers in the EU and the US; Greece's refusal to extradite military refugees after the coup; the European Commission's continuous condemnations of Turkey's domestic politics; and, above all, the truncated dream of Turkey's accession to the EU. This is why Turkey has decided to redefine its diplomacy in its own interests alone, swinging between Russia's financial aid and NATO's . The acquisition of the Russian S-400 anti-aircraft system and its recent operations in Northeast Syria are examples of this.

The purchase of the aforementioned long-range anti-aircraft missile system is the subject of much controversy within NATO. Turkey's urgent need for such a system is obvious as it faces potential ballistic missile threats from neighbouring countries. But the choice of the Russian S-400 system, after several years of negotiations during which it was not possible to reach an agreement on agreement for the acquisition of the US Patriot system, has caused a real earthquake and Turkey's continued participation in the F-35 fifth-generation fighter programme has even been called into question. Political considerations seem to have outweighed technical aspects in the decision, as the two systems are incompatible and, being strategic-level weapon systems, both from an operational and geopolitical point of view, their employment by an Atlantic Alliance country is problematic. The Alliance is concerned about the Kremlin's access to Alliance information through its radar technology.

The other development that raises questions about the future of Ankara's relations with NATO was the recent Turkish military operation in northern Syria. The Turkish military launched an offensive against Kurdish militias (YPG, which it considers terrorists) in northern Syria on 9 October. The attention to the Kurdish people is the major point of contention between the US and Turkey, as they are staunch allies of the superpower, but at the same time a political and security threat to the stability of Anatolia.

Ankara had been pressing the US to establish a 'safe zone' into Syrian territory and had repeatedly threatened to launch unilateral military action if Washington continued to stand in its way. In early October, the US gave the go-ahead for the operation by ordering its military deployed in Syria to withdraw from the border area. The Trump administration thus abandoned the Kurds with whom it was fighting the Islamic State to their fate, giving Turkey the leeway for greater control of its border with Syria.

The next aspect that must be mentioned when describing the complex relations between Ankara and NATO is the ongoing geopolitical struggle between Greece and Turkey. Although both have been NATO members since the 1950s, relations between these two Eastern Mediterranean countries have always been characterised by a permanent perceived tension that has some consequences for supranational military cooperation. The three main disputes that have shaped this bilateral confrontation since the late 19th century are worth mentioning here: the sovereignty of the Dodecanese archipelago, that of present-day Cyprus, and the maritime dispute over the Aegean shelf. Such was the magnitude of the dispute that the Greek government went so far as to decree its withdrawal from NATO in 1974, although it later rejoined.

While this Greek-Turkish conflict was at its height in the second half of the twentieth century, there are many ethnic and historical aspects that make the two countries seem irreconcilable, except in historically specific exceptions. This means that the eastern flank of the Mediterranean, given its proximity to the volatile Middle East area , has been a constant source of concern for NATO leaders. While Greece has managed, following its transition to democracy, to emerge as a stable NATO ally, Turkey has not followed suit. This undoubtedly works against it both in domestic politics and in its aspirations for maritime sovereignty.

Historically, it is worth noting Turkey's growing role as an inter-regional mediator between the Middle East and the West. Perhaps in response to a strategy designed by Ahmet Davutoglu, who was foreign minister under the AKP government, Turkey sought to distance itself from the US under Bush Jr. Its refusal to collaborate in the 2003 invasion of Iraq won it some sympathy in the region, which it has been able to use in countries as diverse as Iraq, Israel and Iran. However, over the years the Islamist government has repeatedly spoken out against Zionism and the threat it poses to the stability of the region.

Its estrangement from the EU and its rapprochement with Russia at subject has also marked the Turkish administration's image in the Alliance. Relations with Russia, despite having been marked by political disputes such as those over Kurdish and Chechen self-determination (antagonistically supported by both countries), are kept afloat by the hydrocarbon trade. The picture is thus more favourable to the Russian axis than the American-Israeli one in the region. This logically undermines NATO's confidence in this "hinge" country, which is no longer sample interested in acting as such but as an independent and sovereign power pursuing its own interests, seeking support from the Alliance or the East as it sees fit.

This shift away from NATO's roadmap by the Turkish government, coupled with a rapprochement in some respects with the Kremlin and the authoritarian drift of the country's presidency, has prompted analysts and international leaders to open up discussion about a possible expulsion of the Asian Minor Republic from the Alliance. However, it is unlikely that the allies will decide to ignore Turkey's strategic importance. Its geographic status makes it a bridge country between East and West. Without Turkey, NATO would be less able geopolitically to act, for example, in terms of counter-terrorism or controlling refugee movements. Moreover, Turkey has the second largest military of all NATO states: exclusion would severely affect its military defence capabilities as an alliance. On the other hand, Turkey's representations in NATO, while critical of NATO as the Trump administration has repeatedly been, have not expressed a clear desire to leave unilaterally.

Gold mining and oil transport pollute Amazonian rivers

Not only are fires negatively affecting the Amazon, which is undergoing an accelerated reduction in forest mass, but increased activity, driven by deforestation itself - which in turn encourages illegal mining and more fuel transport - increases pollution of the Amazon River and other waterways in the countries that are part of the region. The use of mercury in gold mining is an additional serious problem for the communities living in the basin.

▲ Sunset on the Amazon River, Brazil [Pixabay].

article / Ramón Barba

The increase in illegal mining in the Amazon region, in countries such as Colombia and Peru, and especially in Venezuela, has increased river pollution throughout the basin. Pollution is also aggravated by the transport of oil, which generates crude oil leaks, and by the discharge of wastewater linked to increased human activity, which in turn is related to increasing deforestation.

Illegal mining has spread especially in the last two decades, linked to the increase in the price of minerals. Despite the general fall in the price of raw materials since 2014, the quotation has remained high in the case of gold, because as a safe haven value it resists the global economic slowdown. Obtaining gold requires the manipulation of mercury to extract and separate it from the rocks or stones in which it is found. It is estimated that illegal mining activity discharges an average of 24 kilos of mercury per square kilometer. As the Amazon Cooperation Treaty Organization (ACTO) points out in its report Regional Transboundary Diagnostic Analysis of the Amazon Basin of 2018, it is estimated that the Brazilian Amazon alone received 2,300 tons of mercury until 1994 and then has registered volumes around 150 tons per year.

ACTO indicates that mining is located especially in the Guiana Shield, in the Andean zones of Peru and Bolivia, and in the Colombian piedmont. Information gathered by this organization estimates that between 100,000 and 200,000 people are involved in this activity in Colombia and Peru, a figure that doubles in the case of Brazil.

For its part, the network Amazónica de Información Socioambiental Georreferenciada (RAISG), in its study La Amazonía Saqueada, of late 2018, notes that the area in which illegal mining occurs "is on the rise", especially in Venezuela, where "reports change drastically from year to year". The RAISG computes 2,312 points in the Amazon region where there is illegal mining activity, of which 1,899 correspond to Venezuela.

According to RAISG's report , mining exploitation gives a double functionality to rivers, as they are used for the introduction of machinery and for the disposal of minerals. This has serious environmental effects (soil erosion, contamination of water and hydrological resources, extinction of aquatic flora and fauna, atmospheric impacts...), as well as serious consequences for the health of indigenous peoples, as mercury contamination of rivers affects fish and other living beings that move in the river environment. Given that the main per diem expenses of indigenous peoples is fish, the ingestion of high levels of mercury ends up damaging the health of the populations (cases of loss of vision, heart disease, damage to the central nervous, cognitive or motor system, among others).

Another aspect of mining activity is that it tends to lead to land appropriation and incursion into protected natural areas in the Amazon, increasing deforestation and reducing biodiversity. The Tapajós and Xingú areas in Brazil, together with the Guiana Shield, are the areas most affected by deforestation, according to RAISG. According to programs of study , this organization indicates that deforestation due to gold mining has accelerated in the last twenty years, from 377 km2 deforestation between 2001-2007, to 1,303 km2 deforestation between 2007-2013. In Peru, it is worth noting the case of department Madre de Dios, where 1,320 hectares were deforested between 2017 and 2018.

Other causes of contamination

In addition to illegal mining, other processes also pollute rivers, such as hydrocarbon extraction activities, wastewater discharge and river transport, as warned by ACTO, an organization that groups the eight countries with territory in the Amazon region: Brazil, Colombia, Guyana, Suriname, Venezuela, Peru, Bolivia and Ecuador.

Hydrocarbon contamination. The status affects the five countries to the west of the Basin (Colombia, Ecuador, Peru, Guyana and Brazil), Bolivia being a potential candidate as it has large untapped gas reserves in the area. Contamination in this case comes from the transport of oil by river from the extraction points to the refineries. This has important environmental and socioeconomic consequences, such as soil degradation and air pollution, which also implies loss of flora and fauna, as well as hydrobiological resources, affecting biodiversity and species migration. In the socioeconomic field, these problems translate into increased operational costs, the displacement of indigenous people, an increase in diseases and the emergence of conflicts.

Pollution from domestic, commercial and industrial wastewater. Despite the large amount of water available in the countries of the Amazon basin, the level of sanitation does not exceed 60%. As a consequence, rivers become vectors of disease in many rural communities, as sanitation is lower in these communities. data , which has not been updated, speaks of urban and domestic waste of 1.7 million tons per liter and 600 liters per second in 2007. At the same time, it is important to take into account the damage caused by agroindustrial activities in river courses, since the large number of insects and microorganisms issue implies an abundant use of pesticides, herbicides and fungicides. Among the environmental and social problems caused by this activity are the emission of greenhouse gases, the deterioration of aquatic ecosystems, eutrophication and pollution by agrochemicals, and the loss of wages and increase in water treatment costs.

Pollution from river transport. The Amazon region has about 24,000 km of navigable rivers, which are the main means of communication. Some 50 million tons of cargo were transported on the Amazon at the beginning of the decade just ended. In addition to fuel leaks, the activity produces a dragging of sludge that is not dredged periodically, as well as contamination of riverbanks and beaches, which damages the Economics and tourism.

Impact on indigenous communities   

For many indigenous peoples, as is the case in Colombia, gold is a sacred mineral because it represents the sun on earth. They consider that the extraction of this mineral implies the loss of life in the territory and in order to extract it the shamans of the area must "ask permission" through a series of ceremonies; to do so without the granted permission implies negative consequences, hence the indigenous populations associate the improper extraction of gold with illness and death. An example of this is the area of the Aaporis River, also considered sacred, where Yanomami leader Davi Kopenawa speaks of the xawara wakémi (the smoke epidemic), derived from the burning of gold and which is, according to him, the cause of death of some inhabitants of the area.

However, members of indigenous communities also engage in artisanal mining, either because they reject the tradition of entrance in the face of the economic benefits of illegal extraction, or because they are forced into this occupation by the lack of opportunities. The latter occurs in the Peruvian communal reservation of Amarakaeri, which is very affected by extractive activity, where its inhabitants have been forced to practice artisanal mining, pressured by their subsistence needs and by external mining interests that end up exploiting them.

Uncontrolled mining, on the other hand, has a negative impact on the environment in which indigenous people live. In the Ecuadorian province of Zamora Chinchipie, for example, a mega project open-pit mining operation was carried out, the impact of which has involved deforestation in the area of 1,307 hectares between 2009 and 2017.

It is worth highlighting the fact that mining not only implies an attack against certain indigenous cultural aspects, but also a serious attack against their human rights in that, despite being peoples living in voluntary isolation, mining companies interfere in these reserves and force displacements and uprooting. This status is especially critical in Bolivia, Ecuador and Peru, countries in which there is a "gray zone" between legality and illegality in artisanal mining, increasing the Degree impact on indigenous areas. At the same time, it is worth mentioning the repressive activity of the states in the destruction of dredges and rafts, which leads to a violent response from those affected, as occurred in the Humaita revolt in Brazil.

Indigenous life has also been affected by the presence in these territories of guerrilla or paramilitary groups, as well as organized crime groups. In Colombia, armed groups have taken advantage of mining to finance their activities, which they develop in areas with high levels of poverty and difficult access for the Government. Between 2017 and 2018 there was a 6% increase in this activity, in places where coca can also be grown, whose production has likewise increased in recent years. The OECD 's 2016 Due Diligence in the Colombian Gold Supply Chain report indicates that the FARC, ELN and criminal gangs began their mining activity in the 1980s and increased it in the 1990s as a result of the rising price of gold and the increased difficulty of obtaining stable drug revenues. In 2012, the FARC and ELN had a presence in 40% of Colombia's 489 mining municipalities. Recently, ELN presence has been witnessed in illegal mining in Venezuela, especially in the state of Bolivar, to which FARC dissidents sheltered in Venezuelan territory could be added.

Geothermal energy already accounts for 7.5% of the Central American electricity mix, with installed capacity still far below the estimated potential.

Central America's volcanic activity and tectonic movements offer optimal conditions for the region's small countries to take advantage of an alternative energy source to imported hydrocarbons or an ever more polluting coal. At the moment, the installed capacity -largest in Costa Rica and El Salvador- is barely 15% of the most likely estimated potential.

▲ San Jacinto-Tizate geothermal plant in Nicaragua [Polaris Energy Nicaragua S. A.] [Polaris Energy Nicaragua S. A.].

article / Alexia Cosmello

Central America currently has an installed geothermal capacity of 645 megawatts (MW), far from the potential attributed to the region. This may reach, in the highest band of estimates, almost 14,000 MW, although the most likely estimates speak of around 4,000 MW, which implies a current utilization of approximately 15%, according to data of the World Bank published in 2018.

The energy obtained constitutes 7.5% of the total electricity generation in Central American countries: a not insignificant figure, but one that still needs to grow. Forecasts point to an expanding sector, although attracting the necessary foreign investment has so far been limited by the risks inherent in this industry and national legal frameworks.

Geothermal energy is a clean, renewable energy that does not depend on external factors. It consists of harnessing the heat of the earth's interior - high temperature resources in the form of hot subway fluids - for electrical and thermal generation (heating and domestic hot water). It is governed by the magmatic movement of the earth, which is why it is a scarce resource and limited to certain regions with a significant concentration of volcanic activity or tectonic movement.

Latin America

These characteristics of the American isthmus are also shared by Mexico, where the geothermal sector began to develop in the 1970s and has reached an installed capacity of 957 MW. The friction of the tectonic plates along the South American and eastern Caribbean coast also gives these subregions an energy potential, although less than that of Central America; its exploitation, in any case, is small (only Chile, with 48 MW installed, has really begun to exploit it). The total geothermal potential of Latin America could be between 22 GW and 55 GW, a particularly imprecise range given the few explorations carried out. Installed capacity is close to 1,700 MW.

The World Bank estimates that over the next decade, Latin America would need an investment of between US$2.4 billion and US$3.1 billion to develop various projects, which would add a combined generation of some 776 MW, half of which would correspond to Central America.

Attracting private capital is not easy, considering that since the 1990s the Latin American geothermal sector has had less than US$1 billion in private investment. Financing difficulties are partly related to the very nature of the activity, as it requires a high initial investment, which is high risk because exploration is laborious and it takes time to reach the energy production stage. Other aspects that have made it less attractive have been the policies and regulatory frameworks of the countries themselves and their deficiencies in the local and institutional management .

Geothermal energy, in any case, should be a priority for countries with high potential such as Central America, given that, as the International Renewable Energy Agency (IRENA) points out, it constitutes a low-cost electricity generation source and also stimulates low-carbon economic growth. For this reason this organization has order to the governments of the Central American region to adopt policies that favor the use of this valuable resource , and to develop legal and regulatory frameworks that promote them.

The World Bank and some countries with particular technological expertise are involved in international promotion and advice. Thus, Germany is carrying out since 2016 a program of development of geothermal potential under the German Climate Technology Initiative (DKTI). The project cooperates with the development Geothermal Fund (GDF), implemented by the German development bank KfW, and the Central American Geothermal Resource Identification Program, supported by the German Federal Institute for Geosciences and Natural Resources (BGR). goal The initiative is also supported by the German Agency for International Cooperation (GIZ), which has organized technical courses, together with business LaGeo, located in El Salvador, for geothermal plant operators, teachers and researchers at subject, with the aim of achieving a better management of the installations and a more efficient development of the energy projects.

By country

Although Central American countries have shown a high dependence on imported hydrocarbons as energy source , in terms of electricity generation the subregion has achieved an important development of renewable alternatives, put at the service of all members of the Central American Integration System (SICA) through the Electrical Interconnection System for Central American Countries (SIEPAC). The executive director of the administrative office General of SICA, Werner Vargas, highlighted at the beginning of 2019 that 73.9% of the electricity produced at the regional level is generated with renewable sources.

However, he indicated that in order to cope with the growing electricity demand, which between 2000 and 2013 increased by 70%, the region needs to make greater use of its geothermal capacities. Greater integration of geothermal energy would save more than 10 million tons of CO2 emissions per year.

The share of geothermal energy in the electricity mix varies from country to country. The highest share corresponds to El Salvador (26%), Nicaragua (15%) and Costa Rica (12.5%), while the share is small in Honduras (3%) and Guatemala (2.5%).

In Costa Rica, the Costa Rican Electricity Institute (ICE) delivered last July the Las Pailas II geothermal plant, in the province of Guanacaste, at a total cost of US$366 million. The plant will contribute a maximum of 55 MW to the electric network , so that when it is fully operational it will raise the total installed capacity in the country from 207 MW to 262 MW.

Costa Rica is followed by El Salvador in electricity generation from geothermal energy. The national leader in production is business LaGeo, manager of almost all of the 204 MW installed in the country. This business has two plants, one in Ahuachapá, which produces 95 MW, and the other in Usulután, with a production of 105 MW. With lower electricity consumption than Costa Rica, El Salvador is the Central American country with the highest weight of geothermal generation in its electricity mix, 26%, double that of Costa Rica.

Nicaragua has an installed capacity of 150 MW, thanks to the geothermal interest of the Pacific volcanic mountain range. However, production levels are clearly below, although they account for 15% of the country's electricity generation. Among the geothermal projects, the San Jaciento-Tizate and Momotombo projects are already being exploited. The first one, exploited by business Polaris Energy, was built in 2005 with the initial intention of producing 71 MW, to reach 200 MW by the end of this decade; however, it is currently producing 60 MW. The second, controlled by business ORMAT and the participation of ENEL, was promoted in 1989 with a capacity of 70 MW, although since 2013 it has been producing 20 MW.

Guatemala is slightly behind, with an installed capacity of 49 MW, followed by Honduras, with 35 MW. Both countries recognize the interest of geothermal exploitation, but have lagged behind in promoting it. And yet the Guatemalan government's ownprograms of study highlights the profitability of geothermal resources, whose production cost is US$1 per MW/hour, compared to US$13.8 in the case of hydroelectric power or 60.94 percent for coal.

Brazil's congress approves ratification of agreement Technology Safeguards signed by Trump and Bolsonaro

With the reactivation of its Alcantara launch centre, the best located in the world due to its proximity to the Equator, the Brazilian space industry expects to reach a turnover of 10 billion dollars a year from 2040, with control of at least 1% of the global sector, especially in the area space launch sector. Jair Bolsonaro's government has agreed to guarantee technological confidentiality to the US, reaching a agreement that Washington had already tried unsuccessfully before the Workers' Party came to power.      

▲ area space launch site of the Brazilian space centre of Alcantara [AEB].

article / Alejandro J. Alfonso [English version].

Brazil wants to be part of the new space age, in which private initiative, especially from the United States, will play a major role, alongside the traditional role of the national agencies of the major powers. With the agreement Technology Safeguards, signed last March by Presidents Donald Trump and Jair Bolsonaro, rockets, spacecraft and satellites equipped with US technology can be launched at the strategic Alcântara base.

The guarantee of technological confidentiality - access to certain parts of the base will only be authorised to staff from the US, although jurisdiction will remain with the Brazilian Air Force - will mean that Alcántara will no longer have to negotiate contracts with only 20% of the world market, as has been the case until now, something that hindered the base's economic viability. However, the agreement also has a limiting aspect, as it only authorises Brazil to launch national or foreign rockets and aircraft that contain US-developed technological parts.

The new political context in Brazil meant that the agreement was ratified without problems on 22 October by the Chamber of Deputies and on 12 November by the Senate, a very different status to the one experienced in 2000, when congress blocked a similar agreement promoted by President Fernando Henrique Cardoso. The subsequent arrival of the Workers' Party to power, with the presidencies of Luiz Inácio Lula da Silva and Dilma Rousseff, cooled relations between the two countries and Washington temporarily put aside its interest in Alcántara.

Brazil's space aspirations go back a long way; its aerospace industry is the largest in Latin America. In the 1960s it developed a first launch base, Barrera do Inferno, near Natal. In 1994 the military parent of research was transformed into the civilian Brazilian Space Agency (AEB). In addition to development of satellites, AEB launched its first rocket in 2004. In 2006 a Brazilian astronaut joined the International Space Station, of which Brazil is partner.

The Alcántara launch centre is located in Maranhão, a state in northeastern Brazil. Alcántara is a small colonial town located 100 kilometres from the state capital São Luís. The town has 22,000 inhabitants and has access to the sea. The launch site was built during the 1980s and covers an area of 620 square kilometres. In addition, the launch base is located 2.3 Degrees south of the equator, which makes it an ideal location for launching satellites into geostationary orbit. The unique geographical conditions of the launch site attract companies interested in launching small to medium-sized satellites, typically used for communications or surveillance satellites. Unfortunately, the institution suffered a bad reputation when operations were briefly halted due to a failed launch in 2003, resulting in the death of 21 technicians and the destruction of some of the facilities. In 2002 the Agency

The US is interested in Alcantara because of its strategic location. As mentioned above, the launch site is located 2.3 Degrees south of the equator, which allows US rockets to save up to 30 per cent in fuel consumption compared to launches from Cape Canaveral, Florida. Also, due to its proximity to the equator, the drag to reach orbit is lower than Cape Canaveral, which means that companies can increase the weight of the rocket or the cargo it carries without adding additional fuel. This location therefore offers US companies the same advantages enjoyed by their European counterparts who use a launch site in French Guiana, located nearby, north of the equator. The agreement Technology Safeguards signed between Presidents Bolsonaro and Trump in March aims to attract these US companies by assuring them that US companies that do use the Alcantara facility will have the necessary protection and safeguards in place so that their technology is not stolen or copied by Brazilian operators or engineers.

The Brazilian government is clearly interested in the Americans using the Alcantara site. The global space industry is worth approximately $300 billion, and Brazil, which still has a space agency at development, could use the funds from leasing the launch site to further develop its space capabilities. The Brazilian Space Agency has been underfunded for many years, so additional revenues are particularly desirable. In addition, Brazilian officials have speculated that investment in the launch site will bring further investment in the Alcantara region in general, improving the quality of life at area. For example, the Kourou base in French Guiana generates 15% of the French overseas territory's GDP, providing employment directly or indirectly to 9,000 people. In conclusion, the Bolsonaro government hopes that this agreement will deepen the relationship with the US, and that it will also provide the monetary means to invest in the launch site and its surroundings, and invest in the Brazilian Space Agency.

However, this agreement has also been criticised. In 2000, President Cardoso's government attempted to sign a similar agreement with the George W. Bush administration, which was ultimately blocked by the Brazilian congress for fear that Brazil would cede its sovereignty to the US. These same fears are still present today. Former Brazilian Foreign Minister Samuel Pinheiro Guimarães Nieto declared that the US is seeking to establish a military base in Brazil, thus damaging the sovereignty of the Brazilian people. Criticism is also directed at essay of agreement itself, which states that the money the Brazilian government earns from the US use of the launch site cannot be invested in rockets from development exclusively Brazilian, but can be invested in other areas related to the Brazilian Space Agency.

In addition to arguments about the integrity of Brazilian sovereignty, there is also a defence of the Quilombolas, descendants of Brazilian slaves who escaped their masters, who were displaced from their coastal lands when the base was built. The government is currently proposing to increase the size of the Alcantara launch site by 12,000 hectares, and Quilombo communities fear that they will once again be forced to move, causing them further impoverishment. This has been the subject of discussion on both the Brazilian congress and the UScongress , with Democratic House representatives introducing a resolution calling on the Bolsonaro government to respect the rights of the Quilombolas.

The agreement Technology Safeguards is a primarily commercial agreement in order to attract more US companies to Brazil for the Alcantara site, which would save these companies money due to the ideal location of the launch site, while giving them the opportunity to invest in the Brazilian space programme. However, due to the controversies mentioned above, some may consider this as a unilateral agreement where only US interests prevail, while the Brazilian government and people lose sovereignty over a strategic site. Nevertheless, it should be noted that Brazil has traditionally developed an important aeronautical industry (Embraer, recently bought by Boeing, is an excellent example) and the Alcantara base provides the opportunity for Brazil to leap into the new space age.

For decades, the U.S. closed its doors to Mexican avocados; Today it needs it to meet its growing demand

2019 will see record imports of Mexican avocados into the United States: almost 90% of the one million tons of avocados consumed by Americans will come from the neighboring country, which leads the world in production. After being banned for decades in the U.S. – alleging phytosanitary issues, especially invoked by California producers – the creation of the North American Free Trade Agreement opened the doors of the U.S. market to this Mexican product, first with reservations and since 2007 without restrictions. The arrival of Trump to the presidency marked a decline in imports, but since then they have not stopped rising.

▲ Interest in healthy food has led to an increase in avocado consumption around the world

article / Silvia Goya

Social trends such as veganism or "real fooding" have increased the global production of avocados, a fruit valued for its healthy fat and vitamin content, which enlivens a multitude of dishes. In the United States, moreover, the food tradition of millions of Hispanics – the avocado is born from a tree native to Central and South America (Persea americana) – has encouraged the consumption of a product that, like few others, marks relations between the United States and Mexico.

The department The U.S. Department of Agriculture (USDA) predicts that in order to meet the growing national consumption of avocados (which has multiplied by 5.4 since 2000, from 226,000 tons to 1.2 million in 2018), in 2019 the country will have to increase its imports significantly, so that they will constitute 87% to 93% of the country's economy. availability of product. This will mean an increase in imports from Mexico, which in 2018 already contributed 87% of avocados from abroad. This need for imports is due in part to production problems in California, the state with the highest production in the US (around 80%), well ahead of the second, Florida, and a major litigator in the past to prevent the production of the skill of the Mexican avocado.

Donald Trump's first year in the White House saw a slight decrease in Mexican avocado imports, which in 2017 fell to 774,626 tons. However, in 2018 a new record was reached, with 904,205 tons, with an increase of 17%, in a context of non-materialization of the trade threats launched by the Trump Administration, which finally agreed to the renewal of the free trade agreement with Mexico and Canada. Last year, imports from Mexico accounted for 87% of total avocado purchases abroad; the rest, up to 1.04 million tonnes, corresponded to those from Peru (8%), Chile (2.5%) and the Dominican Republic (2.5%).

History of a veto

The B The rise in avocado sales in the U.S. has attracted the attention of drug cartels, which have clashed to control the business in some Mexican states such as Michoacán – the major producer of avocados, especially of the Hass variety, which is the most commercialized – giving rise to a "new drug trafficking." However, the history of controversy between the two countries over this berry goes back a long way. It was in 1914 that the then U.S. Secretary of Agriculture signed a notice A quarantine decree declaring the need to ban the import of avocado seeds from Mexico due to a weevil that the seed carried. In 1919 the "Quarantine of Nurseries, Plants and Seeds" was enacted. That framework was in place for decades.

During the 1970s, the discussion of the entrance of Mexican avocados in the U.S. market remained in the political spotlight due to the insistence of officials from Mexico's Plant Health Service. Investigations in several Mexican avocado-producing states, however, found weevils in some of the seeds, which did not allow the regulatory policy of the Animal and Plant Inspection Service (APHIS) to be changed. department U.S. Department of Agriculture. For this reason, in 1976 the USDA, in a letter addressed to its Mexican counterpart, stated that it should continue "as in the past, against the issuance of permits for the importation of avocados from Mexico."

Following these events, U.S. policy on avocados from neighboring China remained restrictive until trade liberalization and harmonization of sanitary and phytosanitary measures began to change the context in which governments examined plant health and import issues. For most of the twentieth century, the policy of protection had been to deny access to products that could harbor pests; In the last decade, however, the rules began to change.

The creation of the North American Free Trade Agreement (NAFTA) in 1994 and the World Trade Organization in 1995 paved the way for new Mexican requests for access to the U.S. avocado market. Although the goal One of the main aspects of NAFTA was the elimination of tariffs by 2004, and it also provided for the harmonization of sanitary and phytosanitary measures among trading partners. Nonetheless, this free trade agreement explicitly recognizes that each country can establish regulations to protect human, animal, and plant life and health, so when the risk of pest infestation is high, the country has legitimacy to put restrictions on trade.

With the implementation of NAFTA in 1994, the U.S. government came under increased pressure to facilitate the importation of agricultural products from Mexico, including avocados. This led to a shift in USDA's phytosanitary policy toward a new "mitigation or technological solutions" policy. APHIS is the branch of government in charge of implementing the phytosanitary provisions of NAFTA in the case of the United States. This body considered that fruit flies – present in a wide variety of species – could also be found in Mexican avocados, so officials from Mexico's Plant Health Service had the difficult task of proving that this insect was not present in their avocados and that those of the Hass variety were not susceptible to attack by the Mexican fruit fly. Between 1992 and 1994, Mexico submitted two plans for work with their respective investigations. The former was rejected while the latter, despite pressure from the California Avocado Commission (CAC), was accepted.

This second plan called for Mexican avocado access to 19 of the 50 U.S. states during the months of October through February. At the end of June 1995, the USDA issued a proposal of rule which described the conditions under which Hass avocado grown on approved plantations in Michoacán could enter the U.S. It was at the end of 1997 that the USDA published a rule authorizing the importation of these avocados to the United States. This was the first time the USDA used the so-called "approach systems" to manage the risks posed by quarantine pests.

At the end of the second shipping season, in February 1999, Mexico requested the expansion of the programme to increase the issue of U.S. states to which it could export and allow the shipping season to start a month earlier (September) and end a month later (March). In 2001, the USDA met with the Mexican Plant Health Service and agreed to consider expanding the importing states to 31 and import dates from October 15 through April 15. The good relationship established between Presidents George W. Bush and Vicente Fox had a clear influence on this expansive movement.

Imports in tonnes. In 2018, imports of 1.04 million tonnes (87% from Mexico) [source: USDA]

Liberalization

For five years, Mexican avocados had been shipped to the U.S. without detecting a single pest. Although the expansion of Mexican avocado imports seemed inevitable, the CAC filed a lawsuit against the USDA from California, alleging that Mexican avocados did have pests. In response to this, the USDA carried out a research and published in 2003 a draft from "assessment pest risk" which confirmed that Mexican avocados did not carry the fruit fly.

The USDA had shifted from its previous position of domestic protection to a new position that benefited imports. Thus, in 2004 the USDA issued a new rule to expand the import program to all 50 states for 12 months of the year. This rule It envisaged that in California, Florida and Hawaii the importation of avocados would be delayed for up to a year in order to test the effectiveness of the proposed regulations. Therefore, until January 2007, Mexico was not allowed to export avocados to California and Florida; Since then, it has been allowed to export to all states year-round, quickly making the U.S. the world's largest importer of Mexican avocados.

Until 2017, the import of Mexican avocados remained stable; However, as previously indicated, with the arrival of Trump to the White House, relations between the US and Mexico once again faltered around various issues, one of them being the export of food from Mexico to the US, with avocados as an emblematic case. The new U.S. president threatened a 20% tariff on Mexican avocados to finance the wall he intended to build on the border.

In June 2018, Trump again threatened to impose a 25% tariff on avocados, and later in May 2019 threatened to impose a 5% tariff on all goods from Mexico.

In March 2019, when the migratory wave occurred, the US president threatened to close the border with Mexico and consecutively withdrew his decision, however, the simple fact that Trump threatened to close the border has already caused the price of avocados to rise by 34%.

U.S.-Mexican avocado relations remain unstable. Although much progress has been made since the implementation of NAFTA, various interests are still at stake that could lead the US to reduce the import of Mexican avocados. It is difficult for avocados to escape the uncertainty inherent in the bond between the United States and Mexico.