Latin American state deficits are large

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Aspecial prosecutor for corruption in Guatemala since 2015, Juan Francisco Sandoval worked with one commission to obtain convictions against the president and vice president. In mid-2021 he was dismissed by the attorney general of Guatemala, Consuelo Porras. She accused him of an “ideological” approach and procedural errors. He believes it is because he found enough evidence to open an investigation against Alejandro Giammattei, the current president of Guatemala, for allegedly paying bribes to get a docile legislature, after they received from a construction company and several Russian and Kazakh businessmen with mining interests. In 2020 Mr. Sandoval found a lump of cash equivalent to $16m in a house in Antigua Guatemala that he associates with the president, who denies any crime.

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Mr. Sandoval now lives in Washington, d.c. He fled Guatemala “because my life was in danger”, he says. “I knew they would start persecuting me … they have sent evidence. The intention is my shape.” In total, 22 former Guatemalan judges or prosecutors are in exile, ten facing prosecution back home and one in prison. Their situation shows how difficult it is to make lasting progress in the fight against corruption in Latin America. The one The commission had widespread public support, but politicians rebelled against it and Mr Giammattei’s predecessor, Jimmy Morales, expelled it in 2019. “There is interest between corrupt politicians and the economic oligarchy,” Mr. Sandoval said.

The influence of these interests reflects two problems that are widespread in Latin America: the weakness or absence of the rule of law, and the capture of the state by private interests. Democratization across the region brought welcome attempts at legal reform. Many countries replaced fraudulent procedures where crimes were investigated by judges and trials were conducted on paper. They introduced independent prosecutors and oral examinations. Unfortunately, these changes coincided with the expansion of organized crime in Latin America, and were wrongly blamed. The rule of law depends not only on judges but on having the right ecosystem, from police to prisons.

Its weakness in Latin America is shown not only by impunity for corrupt people but by chilling statistics: with 8% of the world’s population, the region accounts for 37% of all murders, according to the one. Once largely confined to Colombia, Peru and Bolivia, drug mafias have spread across Latin America and diversified into extortion and human trafficking. After several gang-related prison murders, Ecuador last year imposed a state of emergency that was renewed in three provinces in April. In February the United States temporarily suspended the import of avocados from Mexico after one of its plant health inspectors was compromised.

There have been some successes, but they tend to be localized and difficult to sustain. In Colombia the homicide rate fell from 69 per 100,000 people in 2002 to 25 in 2017, thanks to a security buildup followed by a peace agreement between the government and Farc guerrillas. But the momentum has been lost and the rate has increased, partly due to the politicization of the security forces under Ívan Duque, president since 2018. Parts of Brazil, such as the state of São Paulo, have seen a successful transition to more work police in the community. And crime has fallen in Mexico City, thanks to a tough and energetic police chief and an increase in police numbers and pay.

But areas of rural Mexico are controlled by criminal gangs. There are fewer murders, but that is mainly because the army has stopped its work against the gangs. Two of the biggest mafias have consolidated their grip and achieved criminal monopolies in areas that were previously bloody disputes, believes Eduardo Guerrero, a security consultant. He says that last year’s elections suggested that organized crime is entering local politics. Hate is a drag on economic growth, discouraging small businesses from expanding. Venezuela’s government does not control the “mining arc”, a large area in the south controlled by paramilitary groups and Colombian guerrillas, according to Ricardo Molina, Mr Maduro’s former environment minister.

At the car wash

Guatemala is not the only place where the fight against corruption has weakened. Operation Lava Jato (Car Wash), which was launched in Brazil in 2014, exposed bribes and contract paddling with construction companies. Prosecutors have secured convictions against around 200 businessmen and politicians, including Lula. But Sérgio Moro, the judge who jailed Lula, pointed to his own deadly goals. Leaked messages showed he breached judicial impartiality by coaching the lead prosecutor in the case. He abolished judicial independence by becoming justice minister in Mr. Bolsonaro’s government. Brazil “has lost its desire to fight corruption”, laments Oscar Vilhena Vieira, professor of law at the Fundação Getulio Vargas University. Similarly, in Peru judges arrested two vice presidents and Ms. Fujimori. But after seven years of investigation, prosecutors only got a handful of convictions, especially against small figures.

State weakness is the single most important source of Latin America’s ongoing problems

“Legal independence is the single sharpest barometer of the state of democracy,” argues International’s Mr. Casas-Zamora. opinion. The picture is mixed. The majority of judges in Brazil are independent, believes Mr. Vieira. The Supreme Court has survived threats from Mr. Bolsonaro. Such in Mexico has not completely fallen under the control of Mr. López Obrador. Colombia’s Constitutional Court remains independent. But chief prosecutors in all three countries are staunch supporters of their presidents. In Argentina Ms. Fernández de Kirchner did not succeed in bringing the courts under control, but other branches of the state are not as strong as a political takeover.

“State weakness is the single most important source of Latin America’s chronic problems, including social inequality, economic stagnation and poor governance,” concluded Sebastián Mazzuca, an Argentine political scientist at Johns Hopkins University. , in a recent book. Most of the Latin American countries had consolidated their territories by 1875. But where European states had been honored by war, trade was essential in Latin America, and that led to treaties with local powers, Mr. Mazzuca says. What emerged were “friendly” states, in which private and public interests were intertwined, rather than impersonal and disinterested bureaucracies.

Modern state building took place in the middle of the 20th century in Brazil, Mexico and other countries but was then undermined by populism, a political dynamic that originated in the region. Democratization brought more reforms. Central banks, finance ministries and electoral authorities became islands of technical excellence. This even spread to social policy through targeted and politically neutral cash transfers to the poor. But state weaknesses remain strong. In Brazil, for example, Mr. Bolsonaro has filled the public sector with soldiers and police, dismantled environmental controls, put unqualified ideologues in charge of education and slashed the budget of universities and scientific research. . “There was a feeling that we were building a country,” says Fernando Reinach, who was the former science minister. “Now the feeling is that we are destroying it.” In Mexico Mr López Obrador has cut public sector salaries. Many experienced officials have left ministries and governing bodies.

The destruction has been particularly rapid in Peru. To give jobs to their supporters Mr. Castillo’s government has reduced qualifications for positions, says Carolina Trivelli, former minister of social development. The director of a state technical institute learned about his dismissal in the official journal; is replaced by a political hack. In May Peru’s Congress voted to split the powers of an independent regulatory body that oversees standards in universities.

Latin American conservatives have never had much trouble with patriotism. But the left is now attacking the meritocracy principle of the civil service because it benefits a “neoliberal” elite. “Behind the changes in the state in Mexico is a redistribution of power, with new groups coming in,” said an official in the government of Mr. López Obrador. They are mainly drawn from new universities and local government. In Argentina public sector jobs have long been the prize for those who deliver the vote for Peronists in the poorer suburbs of Buenos Aires. But the left should be interested in high quality public services. It is surprising that leftist economists so often want to give a large role to the state where it is not technically equipped.

Examination by a cafe, a development bank, found that the quality of government in Latin America is considered lower than anywhere else in the world bar Africa. And on many indicators it seems to be declining. The etc believes that public spending is worth up to 4.4% of gdp is lost, often due to inefficient procurement. And the combination of relentless media scrutiny with legal persecution in the name of anti-corruption has driven many good, honest people out of public service or left graduates to avoid it. Those who remain are afraid to make decisions, especially regarding public contracts. All this adds up to another development trap.

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