Monthly Archives: April 2016

Peru

Fujimori’s daughter leads as Peru faces June presidential runoff

1 Comment
Keiko Fujimori is set to win with ease the first round of Peru's presidential election on Sunday. (Facebook)
Keiko Fujimori is set to win with ease the first round of Peru’s presidential election on Sunday. (Facebook)

In 2011, Peruvian author Mario Vargas Llosa famously compared the choice his country’s electorate faced as a choice between AIDS and cancer.Peru Flag Icon

Five years later, one of those choices from that election, Keiko Fujimori, the daughter of Peru’s former authoritarian president (now serving in prison for corruption), now leads the country’s April 10 vote by double digits. Ollanta Humala, who defeated Fujimori five years ago, once feared as a militarist left-wing firebrand and a chavismo sympathizer, is leaving office widely derived and haunted by corruption, even after hewing to a middle-road path.

Though Humala will step down with as poor of an approval rating as his most recent predecessors, the biggest surprise of his presidency is that he ultimately chose to follow a center-right, business-friendly path in line with the past two decades of Peruvian governance. Humala will leave office, to the dismay of his one-time left-wing supporters, as a defender of neoliberal economics who stood, often with the force of Peru’s military, against striking workers and miners across the country. Though Humala himself is a former army officer, he failed to contain the growth of Sendero Luminoso (Shining Path), a Maoist guerrilla operation that’s made modest gains in southern Peru over Humala’s administration, despite its near eradication a generation ago.

As of February, Humala has also been implicated in Brazil’s widening corruption inquiry, amid allegations from Brazilian police that Humala may have taken bribes from Odebrecht, a Brazilian construction firm. His wife, Nadine Heredia, who once harbored ambitions of succeeding Humala herself, is also under investigation for corruption.

It’s no wonder that, once again, in an election year, Peruvians are looking for a change.

A referendum on a father’s complex legacy

Fujimori, for her part, has positioned herself well since the last election. The frontrunner to win Sunday’s presidential, she is nevertheless unlikely to secure the presidency outright. More likely, Fujimori will face the second-placed candidate in a June 5 runoff.

Still, the prospect of an easy double-digit win for Fujimori spawned a wave of popular protest across the country this week, a sign of the tumult that might follow in the two-month runoff campaign as anti-Fujimori forces coalesce behind a single challenger. Nearly 30,000 flooded the streets of Lima, Peru’s capital, earlier this week in opposition to her candidacy. Protesters worry that a Fujimori victory (either now or in June) will restore the same authoritarianism and corruption that marked the decade of rule under her father, Alberto Fujimori, between 1990 and 2000.

Despite Keiko’s best efforts, the June runoff is likely to become a referendum on her father’s legacy.
Continue reading Fujimori’s daughter leads as Peru faces June presidential runoff →

Iceland

Iceland’s Pirate Party stands to gain from Panama Papers mess

Leave a comment
Birgitta Jonsdottir is the leader of the Pirate Party, which now leads polls in Iceland. (Facebook)
Birgitta Jónsdóttir is the leader of the Pirate Party, which now leads polls in Iceland. (Facebook)

In a normal environment, elections would be due in Iceland only in April 2017.Iceland Flag Icon

But after its prime minster, Sigmundur Davíð Gunnlaugsson, suddenly resigned on Tuesday the small Nordic country could be headed to snap elections. If so, the beneficiary is likely to be the new Píratar (the Pirate Party), a protest movement rooted in the values of direct democracy and transparency, that would, if elected, grant Edward Snowden Icelandic citizenship.

It’s a relatively new party formed in 2012 by Birgitta Jónsdóttir, a former Wikileaks official and social activist first elected as an MP in 2009 from the Citizen’s Movement that emerged out of the ashes of Iceland’s banking crisis and reelected as one of three Pirate MPs in 2013. The party is a motley protest group of hacktivists, anarchists and other outsiders. Staunchly in favor of greater privacy for individuals and more transparency in government, the Pirates want to reduce the working week to 35 hours and liberalize drug legislation.

The weekend’s ‘Panama Papers’ leak revealed that the Icelandic prime minister and his wife owned an offshore company, Wintris, with over $4 million in assets. More damning, the company is a creditor to all three Icelandic banks that collapsed in 2008 and 2009. Previously undisclosed, the company’s existence (and its stake in Iceland’s failed banks) amounts to an unpardonable conflict of interest, given the role that Gunnlaugsson’s government has played in sorting out the post-collapse claims from remaining creditors against those three banks. Gunnlaugsson, who took steps to transfer the interest in the offshore company to his wife, never publicly acknowledged that Wintris was, in fact, one of those creditors, even as he campaigned on negotiating a hard line against those creditors.

Gunnlaugsson came to power after the April 2013 elections, in which his economically liberal Framsóknarflokkurinn (Progressive Party) narrowly trailed the more established, center-right Sjálfstæðisflokkurinn (Independence Party), ushering out a left-wing government elected in the aftermath of Iceland’s banking collapse. Continue reading Iceland’s Pirate Party stands to gain from Panama Papers mess →

Panama, United States

No, Bernie wasn’t right about Panama — and offshore havens have little to do with trade

1 Comment
Even before a bilateral free trade deal with the United States, Panama City was thriving as a center of commerce, banking and shipping in the Caribbean. (Kevin Lees)
Even before a bilateral free trade deal with the United States, Panama City was thriving as a center of commerce, banking and shipping in the Caribbean. (Kevin Lees)

During Barack Obama’s presidential administration, the United States entered into bilateral free trade agreements with not only Panama, but Colombia and South Korea as well.USflagPanama Flag Icon

It might surprise Vermont senator Bernie Sanders, but that didn’t transform Colombia and South Korea offshore tax havens.

Panama, like the British Virgin Islands or a handful of well-known jurisdictions (including Delaware), was known as a top offshore destination for foreign assets well before 2012, when the U.S.-Panama Trade Promotion Agreement took effect. Today, in the aftermath of the jaw-dropping leak of the ‘Panama Papers,’ a 2011 video clip of Sanders, the insurgent candidate for the Democratic presidential nomination, is now going viral.

But it’s far from evidence that Sanders was somehow prescient, and the suggestion that the U.S.-Panama free trade agreement somehow led to Panama’s reputation as a tax haven is disingenuous.

The truth is that offshore jurisdictions have been under siege for years, and the United States has been at the forefront of that fight. It began in earnest in the 1990s, a result of efforts to stymie money laundering related to drug trafficking. But it accelerated to warp speed after the 2001 terrorist attacks in response to concerns about the intricate networks that financed terrorism. Both before and after the aftermath of the global financial crisis in 2008-2009, the Organization for Economic Co-operation and Development took steps to force many of the worst global offenders, named and shamed on its ‘blacklist’ and ‘graylist’ of violators, to weaken their bank secrecy regimes.

That included, perhaps most notably, Switzerland, once the gold standard of secret bank accounts, which agreed to relent its famous standards of bank secrecy in 2009 and 2010. For the record, neither Panama nor the United States signed a more recent effort from 2014 to introduce greater tax transparency. Yet, under the Obama administration, the Foreign Account Tax Compliance Act (FATCA) has put unprecedented burdens on foreign financial institutions in the effort to root out American tax cheats.

Despite the easy meme about Sanders, the U.S.-Panama free trade agreement was always about free trade.

Continue reading No, Bernie wasn’t right about Panama — and offshore havens have little to do with trade →

South Africa

South Africa’s Nkandla scandal finally catches up with Zuma

Leave a comment
South Africa's Constitutional Court has, at long last, ruled that president Jacob Zuma must repay the government for upgrades to his home at Nkandla.
South Africa’s Constitutional Court has, at long last, ruled that president Jacob Zuma must repay the government for upgrades to his home at Nkandla.

Imagine if, as president, George W. Bush diverted $23 million in public funds to improve his ranch in Midland, Texas.south africa flag

Imagine, further, that after a government ruling to reimburse the state treasury for those funds, it took a Supreme Court ruling to force Bush to acknowledge the graft and apologize. That, in essence, is what has happened in South Africa, where years of graft and corruption have caught up with Jacob Zuma, the two-term president and leader of the African National Congress (ANC).

At the end of last week, South Africa’s constitutional court ruled that Zuma violated the country’s constitution in refusing to yield to the findings of a public protector that he should pay back much of those amounts spent to upgrade his Nkandla estate in his home province of KwaZulu-Natal. Zuma and his associates conjured risible explanations for the spending — for example, a magnificent swimming pool was rationalized as a ‘fire pool’ to provide a reservoir of water in case of emergency.

* * * * *

RELATED: Even with victory assured, is the ANC’s future at risk?

* * * * *

South Africa’s public prosecutor disagreed and, after Zuma refused to heed that decision, the constitutional court disagreed as well. Zuma promptly took to national television to apologize, agreeing that he would, at long last, repay the South African treasury. Though opposition parties have called for Zuma’s impeachment, the ANC’s massive parliamentary majority makes that an unlikely possibility.

Set to step down in 2019, the 73-year-old Zuma is no stranger to controversy. He came to power in 2008 as a bitter enemy of then-president Thabo Mbeki, though even then he was under various ethics clouds, including a sensational rape trial that ended in 2006 (he was ultimately acquitted of the charges). Zuma’s rise meant that power would shift from the Xhosa power base of Mandela and Mbeki, for the first time in post-apartheid South Africa, to Zuma’s own Zulu power base. That, in turn, meant an entirely new set of Zulu elites within the ANC looking for their share of party patronage and the other benefits of power. The excesses of Nkandla epitomize the degree of impunity of ANC officials in the Zuma era.  Continue reading South Africa’s Nkandla scandal finally catches up with Zuma →

Canada, Saskatchewan

Saskatchewan’s Brad Wall is Canada’s unofficial opposition leader

Leave a comment
Brad Wall, Saskatchewan's premier, is likely to win a third term in office on Monday. (Facebook)
Brad Wall, Saskatchewan’s premier, is likely to win a third term in office on Monday. (Facebook)

He’s bespectacled, he’s boring and he certainly fits a stereotype of a practical prairie square, campaigning across his province in a Chevy pickup truck. saskatchewanCanada Flag Icon

In the era of Justin Trudeau selfies, Brad Wall doesn’t even have an Instagram profile. In a world that seems to have polarized into ideological extremes and eschews the ‘establishment,’ he is running on an avowed platform of ‘more of the same.’

With Liberals ascendant at the federal level and Liberal or leftist governments in power in each of Canada’s other provinces, he leads the only conservative government left across his country.

But on Monday, when Saskatchewan voters go to the polls, they are almost certainly reelect Wall and his ‘small-c’ conservative party, the provincial Saskatchewan Party, to a third term — probably by a nearly two-to-one margin over the nearest opponent, the left-leaning New Democratic Party (NDP). Polls give Wall’s party nearly 60% of the vote and with it a chance to retain or even increase its 49-member caucus in Saskatchewan’s 58-member Legislative Assembly.

* * * * *

RELATED: How Justin Trudeau became
the world’s first Millennial leader

* * * * *

Wall, who consistently ranks as Canada’s most popular premier, is in some ways a throwback to the pragmatic Progressive Conservative Party of the 20th century, a conservative focused squarely on business-friendly policies with a healthy share of humility about government’s ability to effect sweeping change. In his first term, Wall took pains to acknowledge that Saskatchewan’s boom had more to do with global commodity prices than with his own wizardry. Voters, facing the pinch of low oil and gas prices in a province that depends on natural resources, seem willing to give Wall the benefit of the doubt now that Saskatchewan’s economic fortunes are slumping though.

In his first two terms, Wall, personally and politically the personification of prudence, deployed $2 billion in revenues, on top of his government’s budget surpluses, into the province’s Growth and Financial Security Fund. Under Wall, Saskatchewan has reversed a population decline — so much so that it’s now attracting residents at some of the highest levels in the county. Wall has also been careful to place Saskatchewan’s priorities over ideological concerns, going out of his way to maintain official neutrality in the last federal election, though it must have been clear to anyone that Wall’s views aligned most naturally with then-prime minister Stephen Harper.

Among his peers, Wall is perhaps the most powerful defender of Canada’s oil interests, more so than even oil-rich Alberta’s NDP premier Rachel Notley, elected last May. He’s defended Canada’s projected oil pipeline projects and promoted Canada’s energy economy with such vigour that Maclean’s last month dubbed him ‘Alberta’s other premier,’ acknowledging that Wall has become, and will be for some time, the most powerful and influential voice of the Canadian right in national or provincial government. That’s not to say that Wall is a climate change-denier, and he has even shown that’s he open to small steps toward reducing carbon emissions, if not the sweeping kind of carbon tax that Alberta’s Notley is implementing. (Wall is nonetheless careful to add that any tax measures on the largest carbon emitters should take effect only after Canada’s recession, not today.) Continue reading Saskatchewan’s Brad Wall is Canada’s unofficial opposition leader →