Democratic Governance

Cristina Massa: Fighting Monopolies in Mexico

August 3, 2012

by Edgar Moreno

Democracy in Mexico has failed to dismantle the gigantic inheritors of crony capitalism that were born during seven decades of authoritarian rule. One or two big companies dominate almost every market in the country—from the paint industry to broadcasting and mobile telecommunications. Where privatization and market regulation does not benefit a well-connected entrepreneur, the state itself runs the monopoly—as in the energy sector through PEMEX or the CFE (Comisión Federal de Electricidad, or Federal Commission of Electricity).

It is estimated that in 30 percent of the economy, consumers pay prices that are, on average, 40 percent higher than those in competitive markets. This reality hits harder on people with low incomes. The limited number of suppliers of telephone and Internet services, as well as the barriers to entry for new players, increases prices by more than 30 percent. In the pharmaceutical sector, the impact on prices goes up to 40 percent. Prices for dairy products are estimated to be 18 percent higher than they would be with greater competition. 

Consumers, small- and medium-size enterprises, and government authorities are trying to open access to these traditionally closed markets. Last year, Cristina Massa joined the fight against monopolies as the first female regulator to serve as commissioner of the Comisión Federal de Competencia (Federal Competition Commission—CFC). What she and her colleagues do in the foreseeable future will determine the competitiveness of Mexican economy.

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Tags: Mexico, Transparency, Democratic Governance, Antitrust

Legislative Blunders and Expectations in El Salvador

May 9, 2012

by Julio Rank Wright

El Salvador has undergone various political events in the past couple of months. Political drama and institutional bickering have been present in daily news. For one, the legislative and municipal elections that took place this past March were fair and clean, while the same cannot be said about other countries in the region—namely Nicaragua. The outcome of El Salvador’s election results was bleak for the ruling Frente Farabundo Martí para la Liberación Nacional (Farabundo Martí Liberation Front, or FMLN) party; FMLN’s largest loss was in the country’s most populous and important municipalities.

Second, the main opposition party, Alianza Republicana Nacionalista (Nationalist Republican Alliance, or ARENA), simply recuperated what they had historically obtained in legislative elections before the defection of 12 of their deputies in 2009. ARENA’s main win was in taking the larger, emblematic municipalities from the FMLN which are also founding shareholders of Alba Petroleos, the gasoline-importing Venezuelan joint venture with the FMLN. With these results the citizens of El Salvador confirm the country’s preference for the two larger parties.

Changes in electoral legislation allowing for independent candidates proved useless: the most voted independent candidate only obtained a little over 1,000 votes. El Salvador’s strong political party system has allowed, for the most part, defining medium-term policy agendas and a certain degree of accountability toward voters. This is unlike Guatemala, where political parties come and go—creating a real problem for the democratic process.

Unfortunately, the outgoing legislature made some nefarious decisions prior to their term coming to an end on April 30. The most troubling decision was made regarding the anticipated election of Supreme Court magistrates and specifically some magistrates in the Constitutional Tribunal. In essence, the previous President of the Supreme Court—who also heads the Constitutional Tribunal—was removed from his office by the legislature before his term was over. The reason behind the shuffle presumably responded to some decisions that the previous Tribunal had made regarding electoral reform and political parties. Civil society organizations denounced the decision to no avail.

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Tags: El Salvador, Rule of Law, Supreme Court, Democratic Governance

9/11: Also a Call for U.S. Leadership on the Inter-American Democratic Charter

September 9, 2011

by Javier El-Hage

September 11, 2001, is remembered as the day the United States received a dramatic call to lead the world in defeating terrorism. It is also the day the U.S., along with 33 nations of the Americas, signed the Inter-American Democratic Charter (IADC) committing to the collective promotion and protection of democracy. Through ten years of costly wars in Afghanistan and Iraq, the U.S. has failed to lead the implementation of the IADC and has stood in the sidelines as democracy has eroded in the Americas. It is time to take action—a peaceful one.

Just minutes after New York City and Washington DC were hit, then-Secretary of State Colin Powell gave this moving speech in Lima, Peru, at the Organization of American States’ (OAS) General Assembly:

"A terrible, terrible tragedy has befallen my nation, but it has also befallen all of the nations of this region, all the nations of the world, and all those who believe in democracy. [Terrorists] can destroy buildings and kill people—and we will be saddened by this tragedy—but they will never be allowed to kill the spirit of democracy. They cannot destroy our society, nor our belief in the democratic way.
It is important that I remain here for a bit longer in order to be part of the consensus on this new Inter-American Democratic Charter. That is the most important thing I can do before returning to Washington DC.
I hope we can move forward in the order of business to the adoption of the Charter, because I very much want to be here to express the commitment of the United States to democracy in this hemisphere."

Powell’s word on the importance of the IADC and the U.S. commitment to democracy in the face of a massive terrorist attack is not an overstatement. Terrorist organizations are exclusively harbored and sponsored by non-democratic states that deny basic human rights to their citizens. As with the Third Reich’s Germany or the Taliban’s Afghanistan, it is no coincidence that the U.S. has never had to wage war on a democratic nation. In a world where territories and populations are governed by states, the struggle for peace is first and foremost a struggle for a democratic world comprised of a community of democratic nations.

Here’s where the IADC has a purpose. The IADC is the most ambitious pro-democracy document yet to be approved at an international level. It is the cornerstone of an emerging international law on democracy and represents a groundbreaking step toward the consolidation of democracy and human rights around the world.

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Tags: Inter-American Democratic Charter, Organization of American States (OAS), Democratic Governance

5 Reasons Why Latin America Should Care about Upheaval in the Middle East

May 6, 2011

by Christopher Sabatini

Latin America’s new global profile and trade and diplomatic connections mean that it will increasingly be affected by and can positively affect world events—in this case the popular rumblings in the Middle East and North Africa.

If Latin America has truly arrived—as the World Bank and many have proclaimed—we need to understand more the region’s relationship with the world and its events.  Leave aside for a moment legitimate concerns that Latin America’s arrival are overplayed and the fact that these grandiose sweeping statements do not apply the entire region.  (Venezuela, as much as it wants to be a global player, is stuck in some combination of Bolivarian fantasy and 1970s retrograde project—making it just basically a sad, deluded nuisance.)  

What it does mean is that increasingly, whether its economic policymaking in China, drought in Africa or the turmoil in the Middle East and North Africa, Latin America has a stake—often underestimated but real.  It’s time to stop imagining Latin America as an isolated region, like a bug trapped in amber.  

Let’s take one example: the popular uprisings across the Middle East and North Africa (and the repressive reaction in Bahrain, Libya, Syria and Yemen).  Here are five ways they affect Latin America and in which Latin America can play a positive diplomatic and economic role in shaping their outcomes.

1. The Shifting Sands of Relations: During the administration of President Luiz Inácio Lula da Silva Brazil and Mercosur built closer trade and diplomatic relations with the Middle East. Economically, the last two years have seen a flurry of trade negotiations between Mercosur and the Middle East and North Africa that have produced framework agreements and pending FTAs: a framework agreement with Morocco in 2010 an FTA with Israel in 2010, a still pending FTA with Egypt signed in 2010, and a framework agreement with Jordan in 2008 to name just a few.  In addition, the Lula Administration created the Summit of South American-Arab Countries to better coordinate policy between the regions and serve to deepen trade ties.  

Diplomatically, in 2010 President Lula tried briefly to breathe life into the Israeli-Palestinian peace discussions—though the effort failed.  And of course later the same year, Brazil and Turkey negotiated with Iran in an attempt to head off a tightening of international sanctions against the Iranian regime for continuing its nuclear program.  We can debate the merits and results of Brazil’s forays into the region, but they clearly indicate a desire to assert itself into diplomatic deadlocks.  With popular protests now changing the composition of governments in the Middle East and North Africa, will those same desires extend to negotiations between citizens and autocratic governments?   Exchanges with newly elected governments?  From the wave of democratic transitions in the late 1970s and throughout the 1980s Latin America has experience in giving autocrats the boot and electing and sustaining democratic regimes.  Can they help?  Or will they continue to play broker to autocratic regimes?  One area that represents an opportunity now is in the occupied territories of West Bank and Gaza.  With the recently announced accord between Hamas and Fatah, Brazil could leverage its relations there to try to broker negotiations at a time when the U.S. and Israel appear increasingly marginal.  Doing so, however, will require Brazil to accept and push for the acceptance on the part of the Palestinians of the basic conditions for discussions: the renunciation of violence and the recognition of Israel by the Palestinian authorities on the other side of the table.

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Tags: Brazil, Venezuela, Mercosur, Free Trade, United Nations, ALBA, Luiz Inácio Lula da Silva, Middle East, Democratic Governance