VOL. XXXVI, NO. 7 JULY 2014

BRAZIL
Rousseff Facing Tough Fight
Brazil played host to the World Cup soccer tournament in June-July 2014, and the event was a trial of sorts for President Dilma Rousseff, who will stand for re-election in four months, as any serious problems would have created a significant risk of the October election being turned into a referendum on whether she is the best person to be heading the government in the summer of 2016, when Brazil is scheduled to host the Olympic Games.
On balance, it is probably fair to say that Rousseff passed the test, to the extent that Brazil did not suffer any lasting damage to its image during its turn in the international spotlight, but the debate over whether the benefits of hosting the World Cup and the Olympics are sufficient to justify the massive outlays required will continue to percolate. In terms of the upcoming election, more general concerns about the state of the economy figure to be the more important factor in influencing the behavior of voters, and, on that score, the outlook is not favorable for the president.
Poll data released in mid-July showed Rousseff’s lead over challenger Aécio Neves, the candidate for the center-right PSDB, narrowing to just four percentage points (within the margin of error) in a hypothetical run-off election. With Rousseff’s overall support slipping to 36%, and that for Neves holding steady at 20%, that hypothetical contest is becoming a virtual certainty.
ECUADOR
Correa Adjusts Strategy after Setback
President Rafael Correa suffered a serious political setback at municipal elections held in February 2014, with candidates from the governing AP going down to defeat in both the national capital, Quito, and Guayaquil, the country’s largest city and its commercial center. The two cities account for more than one-third of Ecuador’s total population, and the twin defeats (along with a loss sustained in Cuenca, a much smaller municipality, but still the third largest city) sent a clear message that voters are receptive to change after nearly a decade of experience with Correa’s program of “socialism for the 21st century.”
Correa’s subsequent moves suggest that he intends to respond not by changing direction, but rather by shoring up the institutional foundation of the status quo. In a May address to the National Assembly, President Correa called on lawmakers to amend the constitution to remove the term limit on the presidency. The president did not explicitly declare his intention to seek a fourth term if legally permitted to do so, but it appears that Correa wants to ensure that he can run again if the political signs suggest that his party would go down to defeat with an untested candidate heading the AP ticket.
In terms of policy, Correa’s political strategy is likely to focus on ensuring that he has sufficient resources to finance his government’s social programs. Toward that end, Correa is taking steps to rebuild Ecuador’s relations with international lenders, whom he castigated as “true monsters” when his administration defaulted six years ago. The government is reopening its accounts with the IMF, and, in June 2014, made its first venture into the international bond market in more than five years, selling $2 billion of 10-year dollar-denominated securities with an interest rate of 7.95%.
GUYANA
Early Election Becoming More Likely
The gridlock that is a hallmark of Guyanese politics shows no signs of abating. Despite dire warnings of serious negative economic consequences if the opposition-controlled legislature failed to approve a stalled Anti-Money Laundering and Countering the Finance of Terrorism bill, the APNU-AFC bloc has persisted in blocking passage, and has stepped up the pressure on the PPP-C government by threatening a no-confidence vote against President Donald Ramotar.
Ramotar has all but dared the opposition to proceed. Although the business community does not share Ramotar’s enthusiasm, the argument in favor of a snap election is rather compelling. The PPP-C could reclaim a majority with the addition of a single seat, and as long as the AFC ran a separate slate of candidates, the PPP-C would most likely remain the single largest party (thereby retaining control of the presidency) even if it lost a seat or two.
For their part, Ramotar and his Cabinet secretary, Roger Luncheon, have said there is no point in negotiating with the opposition since they do not believe that either party. Such pronouncements may be nothing more than rhetorical swipes, but they also may suggest that the administration sees an early election as inevitable.
LIBYA
Coming Apart at the Seams
Less than one-half of registered voters cast ballots in a general election held on June 25, which took place against a backdrop of spreading deadly violence that is threatening to plunge the country into full-blown civil war. The hope is that the members of the new House of Representatives, which is to be located in the eastern city of Benghazi, rather than Tripoli, will display a stronger commitment than their predecessors in the General National Congress to working cooperatively to build a foundation for stable, democratic governance.
However, that hope rests largely on the assumption of a diminished presence for the Islamist forces that controlled a slim majority in the outgoing body. Even if that assumption is borne out, the result could be an influx of new recruits to Islamist militias that have been waging an armed battle against secular counterparts in Tripoli and elsewhere in the country, especially if Islamist parties are granted only a limited role in the next government, or, worse, are excluded entirely.
There have been some positive signs since the elections, most notably the conclusion of an agreement between the government and separatist militias in eastern Libya that allows for the resumption of operations at the Ras Lanuf and Es Sider ports, which have the capacity to ship up to 500,000 barrels of oil daily, but have been inactive since being seized by armed supporters of eastern independence in mid-2013. The agreement appears to have been facilitated by heightened expectations that the new government will be amenable to some form of autonomy for eastern Libya (or Cyrenaica), a plan that has been thwarted in the past by the Islamist factions in the General National Congress.
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