LATIN AMERICA A DVISOR
www.thedialogue.org

A DAILY PUBLICATION OF THE DIALOGUEBOARD OF ADVISORSFEATURED Q&A

Diego Arria
Director, Columbus GroupIs Lula Ignoring
Rights Violations
in Venezuela?

Merike Blofield
Professor of Political Science,
University of Hamburg
Devry Boughner Vorwerk
CEO, DevryBV Sustainable Strategies
Joyce Chang
Global Head of Research,
JPMorgan Chase & Co.
Paula Cifuentes
Director of Economic & Fiscal Affairs,
Latin America & Canada,
Philip Morris International

TODAY’S NEWS

Barbara Kotschwar
Executive Director, Visa Economic
Empowerment InstituteJohn Maisto
Director, U.S. Education
Finance Group
Nicolás Mariscal
Chairman,
Grupo Marhnos
Thomas F. McLarty III
Chairman,
McLarty Associates
Beatrice Rangel
Director,
AMLA Consulting LLC
Ernesto Revilla
Head of Latin American
Economics, Citi
Gustavo Roosen
President,
IESA
Andrés Rozental
President, Rozental &Asociados
Shelly Shetty
Managing Director, Sovereigns
Fitch Ratings

A migrant from Venezuela wascharged in connection with adeadly fire at a migrant detention
facility in March in the Mexican
border city of Ciudad Juárez.

Ecopetrol Refinery
to Receive MoreThan $1 Bn in
Arbitration Case

Donna Hrinak
Director,
Adtalem Global Education

Craig A. Kelly
Senior Director,
Int’l Gov’t Relations, Exxon Mobil

Migrant Charged
in Mexico Fire
That Killed 40

BUSINESSPeter Hakim
President Emeritus,
Inter-American Dialogue

James R. Jones
Chairman,
Monarch Global Strategies

POLITICAL

Page 2

Marlene Fernández
Corporate Vice President for
Government Relations,
Arcos Dorados (McDonald’s)

Jon E. HuenemannCouncil Member,
GLG Inc.

Friday, June 9, 2023

Brazilian President Luiz Inácio Lula da Silva met last month in Brasília with Venezuelan
President Nicolás Maduro, leading to criticism from some of the region’s presidents. // Photo:
Brazilian Government.

Q

Brazilian President Luiz Inácio Lula da Silva’s embrace of his
Venezuelan counterpart, Nicolás Maduro, led to a rift among
South American leaders gathered for a regional summit on
May 30 in Brasília. The previous day, Lula welcomed Maduroin his first visit to Brazil in eight years and said he had been the target ofa “narrative of anti-democracy and authoritarianism.” Leaders, including
the presidents of Uruguay and Chile, said Lula was downplaying humanrights violations in the Andean nation. What did South American leaders
accomplish at the summit, and what are the most promising avenues
for greater cooperation? To what extent did Lula’s embrace of Maduroprevent progress on issues of shared interest? How will Lula’s warmth
toward Maduro affect Brazil’s relations with other countries in the region
and beyond?

A

Peter Hakim, member of the Advisor board and president
emeritus of the Inter-American Dialogue: “Lula’s recent
comments suggest that he is either badly informed about
today’s world or overreaching in his efforts to restore Brazil’s
stature in global affairs. How else to explain why Lula would declare that
Russia and Ukraine were equally responsible for their ongoing war? Whyelse would Lula, after assuring President Biden a few months ago that
he was committed to advancing human rights and democracy, seemingly
turn a blind eye to massive human rights violations and election rigging
in Venezuela? Still, Lula, despite his egregious misstatements, is right inemphasizing the need for negotiations to end the Ukraine-Russia war. He
may also be right in calling for a major change in dealing with the MaduroContinued on page 3

COPYRIGHT © 2023, INTER-AMERICAN DIALOGUE

Colombian state oil company Ecopetrol said its Reficar refinery will
be awarded more than $1 billion in
an arbitration case following a ruling by the International Chamberof Commerce.
Page 2ECONOMIC

Honduras’Castro Begins
Visit to China
Honduran President Xiomara
Castro today arrived in Shanghai
in her first visit to China since hercountry established relations withthe country and broke them with
Taiwan.
Page 2

Castro // File Photo: Honduran
Government.

PAGE 1LATIN AMERICA A DVISORPOLITICAL NEWS

Venezuelan MigrantCharged in Mexico
Fire That Killed 40
A Venezuelan migrant has been charged inconnection with a fire that killed 40 people inMarch at a migration facility in the northern
Mexican border city of Ciudad Juárez, theAssociated Press reported Thursday. A federal
judge charged the migrant, identified as “Carlos
C,” with homicide and causing injuries anddamage in relation to the fire that also leftdozens of people injured, the AP reported.
Authorities have accused the man, along withanother Venezuelan migrant who has also
been detained, as the people who started thefire at the migrant detention facility. A small
group of migrants who were being held in thedetention center started the fire, apparently inprotest of conditions at the facility. Detainees’
mattresses quickly ignited, filling the areawith smoke, and guards fled without unlocking the migrants’ cell, the AP reported, citing
footage from security cameras. According toan investigation after the blaze, officials andguards were unable to find the keys to free thedetained migrants, the El Paso Times reported.
Prosecutors have said a private security guard
or an immigration official at the facility soldthe men cigarettes and a lighter. In connection
with the blaze, authorities previously launchedcriminal proceedings against Francisco Garduño, the head of Mexico’s National Migration
institute, along with another official, theAP reported. They are accused of failing toperform their duties and unlawful exercise of
public service. Garduño has remained in his
position as he awaits trial, the El Paso Times
reported last month. Authorities previously arrested six additional immigration officers and a
private security guard, who also face homicide
charges, the AP reported. Also as a result of
the fire, the National Migration Institute closed
small- and medium-sized detention facilities
that are similar in size to the one in Ciudad
Juárez and launched a review of conditions inlarger migrant detention facilities.

Friday, June 9, 2023
ECONOMIC NEWS

NEWS BRIEFS

Honduras’ Castro
Begins Visit to China

World Bank’s Banga to
Begin Global Tour With
Stops in Peru, Jamaica

Honduran President Xiomara Castro arrived
today in Shanghai, her first visit to China since
the Central American country establishedrelations with China and broke them with
Taiwan last March, the Associated Press
reported. During the visit, Castro will meet with
Chinese President Xi Jinping “to jointly plan for
the future development” of the countries’ ties,
according to Chinese state-run Xinhua News
Agency. China has already invested nearly $300
million in a hydroelectric dam in Honduras, andthe Central American country is eyeing Chinese
investments in other dams and projects. Castro“has noted that the decision to cut ties to
Taiwan was economically motivated, and thatwould indeed appear to be the case,” Margaret
Myers, director of the Asia & Latin America
Program at the Inter-American Dialogue, told
the Advisor in a Q&A published March 24.

The World Bank Group said Thursday that its
new president, Ajay Banga, will lead a monthslong global tour with the purpose of deepening
the institution’s commitment to climate change
and reinvigorating its development mission.
The tour, which will take place through December, will begin next week in Peru and Jamaica
alongside Inter-American Development Bank
President Ilan Goldfajn. Stops on the tour
include other Latin American and Caribbean
countries, as well as the Middle East, Africa,
Europe, Asia and Pacific islands.

BUSINESS NEWS

Ecopetrol Refinery to
Get More Than $1 Bn
in Arbitration Case
The Refineria de Cartagena, or Reficar, a refinery owned by Colombia’s largest company integrated energy group, Ecopetrol, will be awarded
more than $1 billion following a ruling by theInternational Chamber of Commerce, plus
interest gains from Dec. 31, 2015, the company
said in a statement via Twitter. The arbitration
was brought against a consortium of contractors, CB&I, which is comprised of contractor
Chicago Bridge and Iron Company NV, CB&I
(U.K.) and CBI Colombiana S.A. Ecopetrol had
accused the consortium of increasing theirconstruction costs during its renovation of therefinery, as well as failings in the engineering,procurement and construction (EPC) contract,
Reuters reported. The Tweet also stated that

COPYRIGHT © 2023, INTER-AMERICAN DIALOGUE

Visa Reportedly in Talks
to Acquire Brazilian
Fintech Firm Pismo
Visa is in advanced discussions to acquire
Brazil-based financial technology company Pismo, Bloomberg News reported Thursday, citing
unnamed people familiar with the matter. Visa
may announce an agreement as early as thismonth, the sources said, though they added
no deal has yet been reached, and talks could
still break down. Pismo provides cloud-basedbanking and payment platforms.

Guyanese Judge
Temporarily Stays Orderon Exxon Spill Insurance
A judge in Guyana on Thursday issued a temporary stay on a lower court’s order requiring oil
major Exxon Mobil and its partners to provide
an unlimited guarantee to cover any possible
oil spills, Reuters reported. The appellate court
judge said the group, which includes Hess
and China’s CNOOC, has 10 days to provide aguarantee of $2 billion, or else the stay would
be lifted. Earlier, Exxon said if the stay was notgranted, it could potentially cease output at thefacility, which would cost partners $350 million
per month in lost revenue, Reuters reported.
PAGE 2

LATIN AMERICA A DVISOR
CB&I´s claims for $400 million were dismissed
and, as Reficar had requested, the consortium was ordered to settle the contract. “Theunanimous decision of the arbitration tribunal
confirmed contractor CB&I was responsible
for breaching its obligations under the EPC
contract,” Ecopetrol said in its statement.
Ecopetrol owns Colombia’s two main refineries,
Barrancabermeja and Reficar and most of thecountry´s pipeline network, generating most of
the country´s oil production.

Argentina’s Ualá
Launches High-Yield
Account in Mexico
Argentine financial technology company Ualá
announced Wednesday that it had launcheda high-yield savings account in Mexico after
it received regulatory approval to expand its
operations in the country and acquire Mexico-based ABC Capital Bank, Reuters reported.
The high-yield savings account will have a fixedannual interest rate and pay a 9 percent annual
percentage yield, the wire service reported. A
survey by the Mexican government showed that
54 percent of people in Mexico save money
informally and that 40 percent of Mexicans
receive no interest on their savings, Ualá said.
“We are excited to offer options that bridge
those gaps by promoting savings in a simple,
secure way for everyone, with higher yields
than what has historically been seen in the
Mexican market,” said Andrés Rodríguez Ledermann, Ualá’s vice president of wealth management. The fintech received authorization at theend of May from Mexico’s CNVB bank regulator
to buy ABC Capital, which allowed Ualá to obtain a banking license in Mexico. The approval
was a “milestone” that differentiates the Argentine fintech from others that are operating in
Mexico, said Chief Executive Officer Pierpaolo
Barbieri. Ualá has also agreed to deals to allow
remittances sent through Western Union, Vigo
and Orlandi Valuta to be received via its mobile
phone app, Finextra reported. Brazilian digital
lender Nubank has also been investing in
Mexico and recently started offering a savings
account there.

Friday, June 9, 2023
F E A T U R E D Q & A / Continued from page 1

government. The sanctions and threats,promoted mostly by the United States,
have failed to bring about much more thansuperficial reforms in Venezuela’s dictatorial
regime and its broken economy. Instead,they may have emboldened the regime andmade it stronger and more resistant tochange. Removing the sanctions and bringing Venezuela into a community of SouthAmerican nations may be the start of a more
effective path toward a more moderate andopen government in the country, althoughprogress will likely occur at a snail’s pace.
Lula’s words of support for Maduro, whichsome participants openly rejected, dominated the news reporting on the recent meetingof South American nations. They may havealso contributed to the rather unproductive
session in Brazil, which did little to rejuvenate the prospect of a more integrated
group of nations in South America. Still,
Lula emerged from the meeting as the only
regional leader who had the skill and statureneeded to achieve any serious measure ofSouth American cooperation.”

A

Mariano Machado, principal analyst for the Americas at Verisk
Maplecroft: “Lula inherited afavorable foreign policy situationfrom his predecessor, and he has sought tocapitalize by leveraging the ‘Brazil is back’
narrative. The summit showed Lula’s capacity to convene diverse ideological actors in
the region, as it also speaks volumes about
Lula’s bid to leverage regional leadershipas a source of legitimacy. In particular,
re-focusing on regional integration makes
sense because Lula stumbled on recent
international engagements. But precisely
these blunders (including unclear remarks
on Ukraine and unrestricted praise of Maduro) show the limitations of embracing past
strategies amid a markedly different geopolitical context from the one he knew from hislast presidential stint. These changes haveaffected the neighborhood too, as the political situation is extremely different. The new

COPYRIGHT © 2023, INTER-AMERICAN DIALOGUE

cohort of left-wing leaders is definitively lesscomfortable than the previous one, enduring
challenges within their own ranks, much-consolidated oppositions, and fed-up societies.
This less-than-friendly landscape means thatpushback to Lula’s stab at regional leadership is likely to become a constant, forcing
him to play less of a bricklayer and moreof a fireman role. All in all, we expect Lulato attempt to deliver some regional public
goods to cement his ‘first among equals’
narrative. Yet, in a context dominated bypower diffusion, making good on thesepledges will be beyond Lula’s reach, making
announcements—rather than solutions - themost likely outcome.”A

Patrick Duddy, director of Duke
University’s Center for Latin
American and Caribbean studies
and former U.S. ambassador to
Venezuela and consul general in São Paulo:“At the recent meeting of South American
heads of state, President Luiz Inácio Lulada Silva not only embraced the Venezuelan
dictator, Nicolás Maduro, but he called on
the United States and others to acknowledge Maduro’s legitimacy. He asserted
that Maduro had been the victim of a false
narrative about his regime and criticized U.S.
sanctions. President Lula’s public endorsement of Maduro was both disappointing anddisconcerting. While the Brazilian president’s
criticism of U.S. sanctions was predictable,
he also seemed, implicitly, to dismiss thesubstantial documentation of the Venezuelan regime’s repression provided by the United Nations human rights commission andother international organizations as well as
by credible Venezuelan NGOs. Lula’s support
for Maduro undermines his own interest to
promote regional unity as public comments
by the presidents of Uruguay and Chile madeclear. His disconcerting advocacy for recognizing the legitimacy of the Maduro regime
must be particularly frustrating for thoseSouth American nations saddled with caring
for the millions of Venezuelan refugees, now
Continued on page 4

PAGE 3

LATIN AMERICA A DVISOR

Friday, June 9, 2023

LATIN AMERICA ADVISORF E A T U R E D Q & A / Continued from page 3

more than seven million, who have fled theregime’s human rights abuses, economic
incompetence and corruption. Lula’s solidarity with Maduro will likely make it moredifficult to forge a common agenda with theUnited States. Indeed, since his re-election
to a third term, President Lula has signaled
his determination to bring Brazil closer toChina and Russia, and his willingness to
support Maduro more closely mirrors theirviews than those of the Western Hemisphere
nations that would like to see democracy
restored in Venezuela.”A

Jennifer McCoy, Regent’sProfessor at Georgia State University and nonresident scholar
at the Carnegie Endowment forInternational Peace: “Lula’s inviting Maduro
to his gathering of a dozen South American
leaders overshadowed his intentions torestart regional dialogue and mechanisms.
That intention is important as most regionalorganizations have disbanded or gone into
hiatus due to the polarization within theregion over the last two decades and theshifting of governments. The fact that Lula
invited all the leaders across ideologies wasimportant, as that is the only way to tackle
urgent problems that know no borders,such as the flow of migrants, environmental
degradation, organized crime and corruption
as well as shared political and economic
instability. The decision to include Maduroitself was sound; the comments Lula made,seeming to defend Maduro’s regime as not
authoritarian, were not. Fortunately, otherpresidents called out this misguided attempt
to ease Maduro back into regional diplomacy
by denying reality on the ground and feeding
Maduro’s own narrative of victimhood andpersecution. But the inclusion of Venezuelain regional diplomacy is sound for a simple
reason: governments need to be able tocommunicate with one another to resolve
mutual problems. Venezuela is a sourceof the largest refugee crisis in the region’s
modern history, and isolating its government
makes no sense. Re-inclusion into multilater-

al forums, carefully done, could bring Venezuela back into a rules-based order. It would
open the door for multilateral monitoringmechanisms to help accompany Venezuela’surgently needed democratic and economic
reconstruction.”A

Riordan Roett, professor anddirector emeritus of the Latin
American Studies program at
the Johns Hopkins University’s
School of Advanced International Studies:“Many observers of Brazil remember the‘good’ Lula. A poor child from the impoverished Northeast, he became a fearlessleader of the workers’ protests against
the fascist military government. He wasinstrumental in the formation of the left-ofcenter Workers’ Party. After the restorationof democracy, he entered electoral politics,
eventually serving as president. His firstterm was considered successful -- global
economics favored Brazilian exports. He
supported major poverty-reducing programs, and he represented a foreign policythat proudly supported democracy. The‘good’ Lula has apparently retired and been
replaced by a ‘new’ Lula. Brazil has been
reticent to criticize the brutal invasion of the
Ukraine by Russia’s Putin. Some analysts
point out that Russian-Brazilian trade ties
are significant. Russian fertilizer supports
Brazil’s agroindustry. In turn, Brazil’s agricultural production is a major Russian Import.
Lula’s performance at the regional summit
in Brasília in May is not the ‘good’ Lula but
rather a perverse version of the ‘new Lula.’
The democracy spokesman of the old days
has become a sudden supporter of the fascist president of Venezuela, Nicolás Maduro,to the dismay of some of his colleagues
attending the summit. This portends the endof any leadership role for Lula globally or
regionally. At a time when the world needs
strong supporters of democracy and humanrights, Lula welcomes Maduro as a target ofa ‘narrative of anti-democracy and authoritarianism’ For shame, Lula.”

COPYRIGHT © 2023, INTER-AMERICAN DIALOGUE

is published every business day by theInter-American Dialogue ISSN 2163-7962
Gene Kuleta
EditorLara Kovandova
Reporter
Nili Blanck
ReporterRebecca Bill Chavez, President
Bruno Binetti, Nonresident Fellow
Sergio Bitar, Nonresident Senior FellowÁlvaro Botero, Nonresident Senior Fellow
Joan Caivano, Senior Advisor
Kevin Casas-Zamora, Nonresident Senior Fellow
Cristóbal Cobo, Nonresident Senior Fellow
Ariel Fiszbein, Director, Education Program
Sandra García Jaramillo, Nonresident Senior Fellow
Rasheed Griffith, Nonresident Senior Fellow
Peter Hakim, President Emeritus & Senior Fellow
Selina Ho, Nonresident Senior Fellow
Edison Lanza, Nonresident Senior Fellow
Nora Lustig, Nonresident Senior Fellow
Michael Matera, Nonresident Senior FellowÁngel Melguizo, Nonresident Senior Fellow
Margaret Myers, Director, Asia Program
Manuel Orozco, Director, Migration, Remittancesand Development Program
Jeffrey Puryear, Senior Fellow
Michael Shifter, Senior Fellow
Daniela Stevens, Director, Energy Transition
and Climate Program
Tamara Taraciuk Broner, Director, Peter D. Bell Ruleof Law Program
Lisa Viscidi, Nonresident Senior Fellow
Carlos Winograd, Nonresident Senior Fellow
Latin America Advisor is published every
business day, except for major U.S. holidays,by the Inter-American Dialogue at1155 15th Street NW, Suite 800
Washington, DC 20005
www.thedialogue.org
The opinions expressed by the members of the Board ofAdvisors and by guest commentators do not necessarily
represent those of the publisher. The analysis is the soleview of each commentator and does not necessarily
represent the views of their respective employers or firms.
The information in this report has been obtained fromreliable sources, but neither its accuracy and completeness,
nor the opinions based thereon, are guaranteed. If you haveany questions relating to the contents of this publication,
contact the editorial offices of the Inter-American Dialogue.
Contents of this report may not be reproduced, stored ina retrieval system, or transmitted without prior written
permission from the publisher.

PAGE 4