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The Americas Blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It will provide information that is often ignored, buried, and sometimes misreported in the major U.S. media.

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This post analyzes SDR holdings as reported by the IMF at the end of November and compares them to previous months’ reports.
This post analyzes SDR holdings as reported by the IMF at the end of November and compares them to previous months’ reports.
A book review of Ioan Grillo's Blood Gun Money: How America Arms Gangs and Cartels.
A book review of Ioan Grillo's Blood Gun Money: How America Arms Gangs and Cartels.
This post analyzes SDR holdings as reported by the IMF at the end of October and compares them to previous months’ reports.
This post analyzes SDR holdings as reported by the IMF at the end of October and compares them to previous months’ reports.

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10:21 P.M. EST: While Libre Party supporters, and opponents of the governing National Party, celebrate, many observers are still voicing caution. While Castro’s lead in the preliminary results appears decisive, if indeed the 16 percent sample is representative of the total vote, it is worth remembering that early results in 2017 also gave the opposition a significant (although much smaller) lead. As our own Alex Main summarized:

After a long, unexplained delay, the TSE announced that Salvador Nasralla ― candidate of the Opposition Alliance Against the Dictatorship ― was in the lead by 5 points with 57 percent of votes counted. But then the electronic vote count was delayed for more than 30 hours. Over the following days, additional “technical failures” occurred. When the count resumed, Nasralla’s lead gradually evaporated and, by late in the day on November 30, Hernández was ahead by 1.5 percentage points.

Considering this precedent, as well as the many irregularities witnessed today (which we have attempted to document on this blog), continued scrutiny of the tabulation process and the official results is warranted. And irregularities should be investigated by credible authorities.

9:52 EST: Announcing preliminary results based on 2,929 presidential actas that comprise 16.01 percent of the total (18,293), the CNE says Libre Party candidate Xiomara Castro obtained 53.4 percent of the vote, with National Party candidate Nasry Asfura second with 34 percent, and Liberal Party candidate Yani Rosenthal third with 9 percent.

The CNE announces preliminary results in Honduras's 2021 elections.

9:38 P.M. EST: CNE President Kelvin Aguirre announced that over 3 million Honduras voted, meaning voter participation of about 62 percent. Watch the CNE press conference underway here.

9:16 P.M. EST: An exit poll from CESPAD, and another reported by right-wing outlet La Tribuna, give Xiomara Castro a decisive lead.

8:38 P.M. EST: Scattered reports of ongoing Libre presence at voting centers, and diminishing National Party presence, continue. The CNE is supposed to announce preliminary results at 8:00 p.m. Honduras time (9:00 p.m. EST).

CORRECTION: 8:26 P.M. EST: Honduras Now reported how the disenfranchisement and chaos at [one JRV] at the Escuela Republica de Panamá in Buenos Aires, Tegucigalpa concluded:

8:15 P.M. EST: Election observer Burke Bindbeutel sends this photo of presidential ballot counting at the Escuela Republica de Panamá in Buenos Aires, Tegucigalpa. Many voters there reportedly were unable to cast ballots today (see below).

Counting presidential ballots at the the Escuela Republica de Panamá in barrio Buenos Aires Tegucigalpa. Photo: Burke Bindbeutel

7:59 P.M. EST: The US government-funded non-profit organization Association for a More Just Society has told the media it too is concerned by many irregularities today, including that people with invalid identity cards being allowed to vote, ballots lacking stamps put in ballot boxes, and “non-application of indelible ink to voters or inclusion of deceased persons in the electoral roll.” 

7:49 P.M. EST: Honduran national and well-known professor Suyapa Portillo Tweeted earlier this evening that voting was “non-operational” at the consulate in Los Angeles, CA, another example of impediments to voting in the US (see below).

7:37 P.M. EST: An election observer at Instituto España Jesus Milla Silva in Colonia Kennedy, Tegucigalpa reports “Crowds rush the polling site after an onlooker says they saw a stack of IDs during the vote count.”

7:26 P.M. EST: Manuel Zelaya, former president and possibly future first gentleman, announced earlier that the Opposition Alliance will hold a press conference at 8:00 p.m. Honduras time, the same time the CNE is expected to make its first statements after the conclusion of the election.

7:18 P.M. EST: Honduras Now reports:

 

7:15 P.M. EST: An election observer at the CEB Monseñor Jacobo Cáceres in Suyapa, Tegucigalpa reports they are “In a vote count preceding calmly and orderly. The public is standing outside the classroom and watching through the windows as the JRV LIBRE and PN members each look at hold up the ballot for the people outside to see.”

6:19 P.M. EST: The PJE and CESPAD have issued a new alert denouncing obstruction of the voting center at the Escuela Republica de Panamá, Buenos Aires, Tegucigalpa, and apparent conflict between electoral authorities and voters there (see below).

6:12 P.M. EST: Election observers documented the lack of accessibility for disabled people to vote at the Escuela Republica de Panamá, Buenos Aires, Tegucigalpa.

6:07 P.M. EST: Honduran media reported at 6:00 ET that CNE president Kelvin Aguirre said voting will be extended for an extra hour at voting centers where there is unanimous agreement.

5:59 P.M. EST: As voting centers prepare to close, election observers talk to media.

An election observer talks to media

Election observer talking to media

5:42 P.M. EST: The CNE statement denouncing an attack on its web server also calls on candidates and media to abstain from publicly (and illegally) declaring victory or other information about election results, in an apparent reference to the National Party press conference earlier today. The CNE also said that voting should be extended so that the last person still in line will be able to vote, in accordance with Article 265 of the Electoral Law, and that the fingerprint registry shows that 36 percent of eligible voters came out to vote today.

5:19 P.M. EST: Contra Corriente’s Jennifer Avila reported at 4:55 p.m. that the CNE claimed there had been an attack on its web server. The site has been offline throughout the day (see below).

5:16 P.M. EST: An election observer reports: “Ruinas Copan 2801: One hour before closing time. Just over 2/3 of the possible votes are in. Things have pretty much ground to a halt. There are no people outside waiting to vote.”

5:15 P.M. EST: National Party leader Fernando Aduray is blaming alleged incidents of “violence” and disorder on the Libre Party, whom he said want to “generate chaos and anarchy” after learning of the adverse primary results at noon” [presumably the National Party’s much-condemned televised press conference declaring victory]. Aduray also linked the Libre Party with “communism in Venezuela and the Sao Paulo Forum.”

5:05 P.M. EST: The PJE and CESPAD have issued a statement denouncing the “threat of fraud” in public statements made by David Chávez, of the central committee of the National Party, declaring victory before voting has concluded. (See below.)

5:00 P.M. EST: Honduran newspaper El País reportsProblems with some people who are not on the voting lists at the Paz Barahona School in San Pedro Sula.”

4:40 P.M. EST: Election observers at a voting center in in Buenos Aires, Tegucigalpa documented the tense scene outside as party representatives worked to determine a more efficient system to allow the many people waiting, for hours, outside, to vote, while inside there are reportedly JRVs with few voters waiting.

4:30 P.M. EST: Just before 4:00 EST, Nuestra Red and Global Exchange, which both have many observers on the ground in Honduras today, denounced the “buying and selling [of] votes in the department of Francisco Morazán through tickets issued by political activists.”

3:57 P.M. EST: An election observer in Buenos Aires, Tegucigalpa, reports: “Allegations at the Buenos Aires voting center that there is a guy in a blue hat (with a B on it) collaborating with police to only let in people voting for the Partido Nacional.”

A man in a blue hat with a letter B on it allegedly works with police to only allow NP voters into a voting center.

3:41 P.M. EST: An election observer documented very long lines outside a voting center in the Buenos Aires neighborhood of Tegucigalpa. “A woman in line told me that they had already been in line for two hours, and that the line isn’t moving at all.  She has worked the polls before, and it’s never been like this.” 

3:33 P.M. EST: An election observer in Lepaera, Lempira sent this photo from inside a voting center:

A voting center in Lepaera, Lempira.

3:22 P.M. EST: Honduran media report that the voting center at the Fraternidad de Villanueva school finally received their technological kit at around 2:00 p.m. local time. Voting center workers had been trying to get the kits since 9:00 a.m. local time.

3:18 P.M. EST: Independent media organization Report Without Fear notes that some voting table supervisors in San Pedro Sula are not stamping ballots prior to depositing them.

3:01 P.M. EST: An election observer documented a lull in voting at Monseñor Cáceres at 2:37 P.M. EST.

"A lull in voting here at Monseñor Cáceres"

2:39 P.M. EST: Honduran TV network HCH broadcast a press conference by governing National Party representatives declaring victory, some four hours before voting centers close. This has drawn condemnation from the Progressive International, among others, who see it as  an “effort to disinform voters, dissuade participation, and endanger democracy in Honduras.” EU Electoral Observation Mission head Željana Zovko has expressed concern about political parties claiming victory already.

2:19 P.M. EST: Right-wing newspaper site La Tribuna posted an article earlier citing the defense secretary as claiming that the armed forces delivered election materials to “each designated place,”  “even in the most remote areas of the country,” But numerous election observer and media reports have shown that this is not true.

2:12 P.M. EST: The CNE census site, which voters rely on to find out their voting location, continues to be offline, drawing complaints and condemnation.

1:44 P.M. EST: The PJE and CESPAD have issued a new alert about election irregularities, including that “at least 17  Voting Table Supervisory Groups” in 5 departments did not receive their technological kits to process votes, that some Voting Table Supervisory Groups do not have equipment to collect fingerprints, and that there are reports of party propaganda inside of 19 voting centers.

1:32 P.M. EST: El Pulso reports, with video, that armed forces closed a voting center in Tela, Atlántida, after a conflict broke out there. 

1:28 P.M. EST: An election observer reports: “At a polling site in Tegucigalpa, a scuffle broke out amid complaints of people taking photos of their ballots in exchange for 5000 Lempiras.”

12:47 P.M. EST: Televicentro HN reported at 12 noon ET that voting kits had finally arrived in Choluteca and Siguatepeque, four hours after voting was supposed to have started.

12:43 P.M. EST: The PJE and CESPAD have issued an alert about election observers being hindered from entering a voting center: “In the Saúl Bueso Castañeda school, a voting center in the municipality of Santa Rita in the department of Copán, the secretary of the Municipal Electoral Council impeded the access of accredited observers of the Youth Electoral Platform into the voting center.”

12:39 P.M. EST: Peninsula 360 Press reports on vote buying, and delays. They interviewed Marco Castillo of Global Exchange, who told the outlet earlier, “We have been observing and, above all, what they are reporting to me is that the whole process is super delayed here in the Colón area…” He also told Peninsula 360 that yesterday they documented a federal government official wearing  a cap promoting a National Party political candidate while making payments for a social program “in the same school” that is serving as a voting center today.

12:24 P.M. EST: Independent media outlet Contra Corriente reports that CESPAD’s Lucía Vijil has witnessed “political patronage” by the ruling National Party, with “state resources being used in voting centers, for example, to buy food in exchange for votes.”

12:17 P.M. EST: The Plataforma Juvenil Electoral (PJE), and CESPAD, which each have observers at various voting centers today, issued an alert that party representatives are instructing people how to vote at the Federico Padilla Rubi school in the town of Arenalitos, La Paz department.

12:02 P.M. EST: The International Honduran Diaspora has issued a statement denouncing that few national ID cards (DNI) have been delivered to Hondurans residing in the United States, “where more than 1 million compatriots live.” “Only 12,858 DNI enrollments were made and only 1,090 were delivered,” the group says, noting that consular offices also used the Thanksgiving holiday as an excuse to delay delivery.

The lack of ID cards among Hondurans abroad has been a major concern ahead of the election.

11:52 A.M. EST: An election observer reports: “A Partido Nacional team is ‘capturing’ votes outside Monseñor Cáceres school. Every time a voter comes to the school, they pick them by the arm and push them to their tent. At the tent they are recording their IDs, and voters get instructions. After voting, they receive a mug.”

Outside Monseñor Cáceres school

A voter with a mug he received from National Party members after he voted.

11:43 A.M. EST: How much will dissatisfaction with incumbent president Juan Orlando Hernández affect how people vote today? Much of US reporting on the elections stresses the scandals, corruption, and repression of the Hernández era, and the current government’s failures in improving the living standards of most Honduras, and in responding to the COVID-19 pandemic. For example, Jared Olson reports for the Los Angeles Times:

Hernandez has left the nation in ruins as tens of thousands of Hondurans flee for better lives in the U.S. and elsewhere. The president’s years in power have been marked by human rights violations, extrajudicial killings, stolen public money, poverty and complicity in drug trafficking at the highest levels of government.

“Juan Orlando is leaving us with a broken country,” said Lenín Laínez, a congressman for the opposition Libre party. “A country in debt, with serious narco-corruption, with high levels of criminality and one of the most unequal populations in Latin America.”

The National Party “has left us with a Honduras where it’s impossible to access quality, free healthcare or education,” said Anabel Melgar, a member of the National Front for Youth in Resistance. “They embezzled the health fund, and thousands of people have died because, with the money from the fund stolen, they handed out [poor-quality] pills.”

This graffiti in Tegucigalpa reflects anti-Hernández sentiment.

Fuera JOH graffiti
(Photo: Burke Bindbeutel)

11:07 A.M. EST: Various purported opinion polls, or images of supposed poll results, are already circulating. Observers caution to be wary of such purported polls, and numerous Honduran media outlets have committed to avoid reporting any such polls until after the CNE makes its first official announcement, which it is supposed to do after 8:00 p.m. Honduras time.

11:01 A.M. EST: Journalist José Luis Granados Ceja is documenting the situation in various voting centers today. These photos illustrate aspects of the voting process, from fingerprint scanning to depositing of ballots:

A voter has their fingerprint scanned. Photo: José Luis Granados Ceja

An election official with ballots. Honduras 2021 elections. Photo: José Luis Granados Ceja

A voter deposits her ballot for president. Honduras 2021 elections. Photo: José Luis Granados Ceja

10:38 A.M. EST: An election observer reports: “The JRV [Voting Table Supervisory Group] where I am stationed [in Distrito Central, Francisco Morazán] opened late (8am instead of 7) because of a problem with the password for the fingerprint ID machine. Voting has been consistent and one of the JRV members told me that she has worked mesas before and it seems like more traffic than before.”

10:15 A.M. EST: The CNE census site is still offline, making it difficult for people to find out where they are supposed to vote, as Honduras Now (which also has a useful podcast episode providing background on this election) explains:

9:51 A.M. EST: Honduran media report long lines at voting centers in Comayagüela (northwest of Tegucigalpa) 
and at the Centro de Educación Básica Gubernamental Dr José Antonio Peraza de la colonia 6 de Mayo del sector Rivera Hernández in San Pedro Sula, where the voting center still had not opened as of 9:00 a.m. EST, an hour after voting was supposed to have started. 

9:42 A.M. EST: Honduras’s major trade association, the Honduran Council of Private Enterprise (COHEP) issued a statement calling on the National Electoral Council (CNE) “to adhere to the constitutional framework, and perform rigorous and transparent work, which guarantees the legitimacy of this electoral process,” and urging “that all relevant information, is communicated in a clear, accurate and timely manner” by the CNE.

9:22 A.M. EST: A number of political candidates, including presidential candidate Xiomara Castro and vice presidential candidate Salvador Nasralla, are voting early. “We set the example of going out to vote early. Honduras needs a real change,” Castro told reporters.

9:13 A.M. EST: Honduran media are reporting late openings of some voting centers, in La Ceiba and la Villa Olímpica in Tegucigalpa where a voting center reportedly opened more than 40 minutes late. Meanwhile, the website of the National Electoral Council (CNE), one of the electoral institutions created as part of reforms following election-rigging in 2017, is experiencing problems.

8:59 A.M. EST: Election observers reportLines at the polls, lots of excitement & lots difficulties with the system that will transmit preliminary results to the CNE center in Tegucigalpa (TREP).” Honduran media and foreign correspondents also are reporting long lines at polling places in some urban areas.

Today, November 28, Hondurans head to the polls for crucial elections amid escalating political violence across the country. Voters will be electing a new president, the entirety of the 128-seat National Congress, every mayor of the country’s 298 municipalities, and over 2000 municipal councilors, as well as 20 representatives to the Central American Parliament.

At the presidential level, the leading contenders are ruling National Party candidate Nasry “Tito” Asfura and Xiomara Castro of the Liberty and Refoundation Party (LIBRE). The most recent polling, from late October (Honduran law forbids polling within one month of scheduled elections) showed Castro with a significant lead over Asfura: 38 to 21 percent, with Liberal Party candidate Yani Rosenthal well behind both.

Honduras has experienced political violence in the run-up to the elections. The United Nations Office of the High Commissioner for Human Rights most recently cited 29 political killings. Recent high-profile assassinations include a Liberal Party mayor running for reelection, Francisco Gaitán, and Luis Casaña, a LIBRE Party candidate for municipal councilor who was shot shortly after leaving a campaign event with presidential candidate Xiomara Castro.

Electoral reforms negotiated after the 2017 elections and subsequent protests, but not approved until after party primaries in March of this year, have given rise to hope for a more transparent process. Crucial technical aspects of the electoral process, however — such as the newly implemented fingerprint identification system — are presenting serious challenges. This includes problems stemming from this year’s electoral census and the administration of new identification cards required for voting. According to reports, more than 350,000 Hondurans were still without these new ID cards as of mid-November, including many in the US. Already, the day before the elections, observers reported irregularities, including apparent vote-buying, voter intimidation, and failure the deliver materials and equipment needed to transmit vote results. 

Also a product of the negotiated reforms is the highly political makeup of the National Electoral Council (CNE), whereby each of the three major parties has one voting member in the CNE. Given that the contenders for the presidency are from LIBRE and the National Party, the Liberal Party CNE councilor could act as a potential key swing vote on Sunday night, and after.

Yet many are expressing cautious optimism — including Gustavo Irías, executive director of Honduras’s Center for Democracy Studies (CESPAD) — that Sunday’s elections could signal a turning point following 12 years of crisis since the coup. In order to monitor conditions on the ground during the elections, CESPAD has partnered with US-based human rights organization Global Exchange to deploy dozens of international, and more than 250 national, observers to polling stations across the country.

Read this post for more background and context on Honduras’s 2021 elections.

10:21 P.M. EST: While Libre Party supporters, and opponents of the governing National Party, celebrate, many observers are still voicing caution. While Castro’s lead in the preliminary results appears decisive, if indeed the 16 percent sample is representative of the total vote, it is worth remembering that early results in 2017 also gave the opposition a significant (although much smaller) lead. As our own Alex Main summarized:

After a long, unexplained delay, the TSE announced that Salvador Nasralla ― candidate of the Opposition Alliance Against the Dictatorship ― was in the lead by 5 points with 57 percent of votes counted. But then the electronic vote count was delayed for more than 30 hours. Over the following days, additional “technical failures” occurred. When the count resumed, Nasralla’s lead gradually evaporated and, by late in the day on November 30, Hernández was ahead by 1.5 percentage points.

Considering this precedent, as well as the many irregularities witnessed today (which we have attempted to document on this blog), continued scrutiny of the tabulation process and the official results is warranted. And irregularities should be investigated by credible authorities.

9:52 EST: Announcing preliminary results based on 2,929 presidential actas that comprise 16.01 percent of the total (18,293), the CNE says Libre Party candidate Xiomara Castro obtained 53.4 percent of the vote, with National Party candidate Nasry Asfura second with 34 percent, and Liberal Party candidate Yani Rosenthal third with 9 percent.

The CNE announces preliminary results in Honduras's 2021 elections.

9:38 P.M. EST: CNE President Kelvin Aguirre announced that over 3 million Honduras voted, meaning voter participation of about 62 percent. Watch the CNE press conference underway here.

9:16 P.M. EST: An exit poll from CESPAD, and another reported by right-wing outlet La Tribuna, give Xiomara Castro a decisive lead.

8:38 P.M. EST: Scattered reports of ongoing Libre presence at voting centers, and diminishing National Party presence, continue. The CNE is supposed to announce preliminary results at 8:00 p.m. Honduras time (9:00 p.m. EST).

CORRECTION: 8:26 P.M. EST: Honduras Now reported how the disenfranchisement and chaos at [one JRV] at the Escuela Republica de Panamá in Buenos Aires, Tegucigalpa concluded:

8:15 P.M. EST: Election observer Burke Bindbeutel sends this photo of presidential ballot counting at the Escuela Republica de Panamá in Buenos Aires, Tegucigalpa. Many voters there reportedly were unable to cast ballots today (see below).

Counting presidential ballots at the the Escuela Republica de Panamá in barrio Buenos Aires Tegucigalpa. Photo: Burke Bindbeutel

7:59 P.M. EST: The US government-funded non-profit organization Association for a More Just Society has told the media it too is concerned by many irregularities today, including that people with invalid identity cards being allowed to vote, ballots lacking stamps put in ballot boxes, and “non-application of indelible ink to voters or inclusion of deceased persons in the electoral roll.” 

7:49 P.M. EST: Honduran national and well-known professor Suyapa Portillo Tweeted earlier this evening that voting was “non-operational” at the consulate in Los Angeles, CA, another example of impediments to voting in the US (see below).

7:37 P.M. EST: An election observer at Instituto España Jesus Milla Silva in Colonia Kennedy, Tegucigalpa reports “Crowds rush the polling site after an onlooker says they saw a stack of IDs during the vote count.”

7:26 P.M. EST: Manuel Zelaya, former president and possibly future first gentleman, announced earlier that the Opposition Alliance will hold a press conference at 8:00 p.m. Honduras time, the same time the CNE is expected to make its first statements after the conclusion of the election.

7:18 P.M. EST: Honduras Now reports:

 

7:15 P.M. EST: An election observer at the CEB Monseñor Jacobo Cáceres in Suyapa, Tegucigalpa reports they are “In a vote count preceding calmly and orderly. The public is standing outside the classroom and watching through the windows as the JRV LIBRE and PN members each look at hold up the ballot for the people outside to see.”

6:19 P.M. EST: The PJE and CESPAD have issued a new alert denouncing obstruction of the voting center at the Escuela Republica de Panamá, Buenos Aires, Tegucigalpa, and apparent conflict between electoral authorities and voters there (see below).

6:12 P.M. EST: Election observers documented the lack of accessibility for disabled people to vote at the Escuela Republica de Panamá, Buenos Aires, Tegucigalpa.

6:07 P.M. EST: Honduran media reported at 6:00 ET that CNE president Kelvin Aguirre said voting will be extended for an extra hour at voting centers where there is unanimous agreement.

5:59 P.M. EST: As voting centers prepare to close, election observers talk to media.

An election observer talks to media

Election observer talking to media

5:42 P.M. EST: The CNE statement denouncing an attack on its web server also calls on candidates and media to abstain from publicly (and illegally) declaring victory or other information about election results, in an apparent reference to the National Party press conference earlier today. The CNE also said that voting should be extended so that the last person still in line will be able to vote, in accordance with Article 265 of the Electoral Law, and that the fingerprint registry shows that 36 percent of eligible voters came out to vote today.

5:19 P.M. EST: Contra Corriente’s Jennifer Avila reported at 4:55 p.m. that the CNE claimed there had been an attack on its web server. The site has been offline throughout the day (see below).

5:16 P.M. EST: An election observer reports: “Ruinas Copan 2801: One hour before closing time. Just over 2/3 of the possible votes are in. Things have pretty much ground to a halt. There are no people outside waiting to vote.”

5:15 P.M. EST: National Party leader Fernando Aduray is blaming alleged incidents of “violence” and disorder on the Libre Party, whom he said want to “generate chaos and anarchy” after learning of the adverse primary results at noon” [presumably the National Party’s much-condemned televised press conference declaring victory]. Aduray also linked the Libre Party with “communism in Venezuela and the Sao Paulo Forum.”

5:05 P.M. EST: The PJE and CESPAD have issued a statement denouncing the “threat of fraud” in public statements made by David Chávez, of the central committee of the National Party, declaring victory before voting has concluded. (See below.)

5:00 P.M. EST: Honduran newspaper El País reportsProblems with some people who are not on the voting lists at the Paz Barahona School in San Pedro Sula.”

4:40 P.M. EST: Election observers at a voting center in in Buenos Aires, Tegucigalpa documented the tense scene outside as party representatives worked to determine a more efficient system to allow the many people waiting, for hours, outside, to vote, while inside there are reportedly JRVs with few voters waiting.

4:30 P.M. EST: Just before 4:00 EST, Nuestra Red and Global Exchange, which both have many observers on the ground in Honduras today, denounced the “buying and selling [of] votes in the department of Francisco Morazán through tickets issued by political activists.”

3:57 P.M. EST: An election observer in Buenos Aires, Tegucigalpa, reports: “Allegations at the Buenos Aires voting center that there is a guy in a blue hat (with a B on it) collaborating with police to only let in people voting for the Partido Nacional.”

A man in a blue hat with a letter B on it allegedly works with police to only allow NP voters into a voting center.

3:41 P.M. EST: An election observer documented very long lines outside a voting center in the Buenos Aires neighborhood of Tegucigalpa. “A woman in line told me that they had already been in line for two hours, and that the line isn’t moving at all.  She has worked the polls before, and it’s never been like this.” 

3:33 P.M. EST: An election observer in Lepaera, Lempira sent this photo from inside a voting center:

A voting center in Lepaera, Lempira.

3:22 P.M. EST: Honduran media report that the voting center at the Fraternidad de Villanueva school finally received their technological kit at around 2:00 p.m. local time. Voting center workers had been trying to get the kits since 9:00 a.m. local time.

3:18 P.M. EST: Independent media organization Report Without Fear notes that some voting table supervisors in San Pedro Sula are not stamping ballots prior to depositing them.

3:01 P.M. EST: An election observer documented a lull in voting at Monseñor Cáceres at 2:37 P.M. EST.

"A lull in voting here at Monseñor Cáceres"

2:39 P.M. EST: Honduran TV network HCH broadcast a press conference by governing National Party representatives declaring victory, some four hours before voting centers close. This has drawn condemnation from the Progressive International, among others, who see it as  an “effort to disinform voters, dissuade participation, and endanger democracy in Honduras.” EU Electoral Observation Mission head Željana Zovko has expressed concern about political parties claiming victory already.

2:19 P.M. EST: Right-wing newspaper site La Tribuna posted an article earlier citing the defense secretary as claiming that the armed forces delivered election materials to “each designated place,”  “even in the most remote areas of the country,” But numerous election observer and media reports have shown that this is not true.

2:12 P.M. EST: The CNE census site, which voters rely on to find out their voting location, continues to be offline, drawing complaints and condemnation.

1:44 P.M. EST: The PJE and CESPAD have issued a new alert about election irregularities, including that “at least 17  Voting Table Supervisory Groups” in 5 departments did not receive their technological kits to process votes, that some Voting Table Supervisory Groups do not have equipment to collect fingerprints, and that there are reports of party propaganda inside of 19 voting centers.

1:32 P.M. EST: El Pulso reports, with video, that armed forces closed a voting center in Tela, Atlántida, after a conflict broke out there. 

1:28 P.M. EST: An election observer reports: “At a polling site in Tegucigalpa, a scuffle broke out amid complaints of people taking photos of their ballots in exchange for 5000 Lempiras.”

12:47 P.M. EST: Televicentro HN reported at 12 noon ET that voting kits had finally arrived in Choluteca and Siguatepeque, four hours after voting was supposed to have started.

12:43 P.M. EST: The PJE and CESPAD have issued an alert about election observers being hindered from entering a voting center: “In the Saúl Bueso Castañeda school, a voting center in the municipality of Santa Rita in the department of Copán, the secretary of the Municipal Electoral Council impeded the access of accredited observers of the Youth Electoral Platform into the voting center.”

12:39 P.M. EST: Peninsula 360 Press reports on vote buying, and delays. They interviewed Marco Castillo of Global Exchange, who told the outlet earlier, “We have been observing and, above all, what they are reporting to me is that the whole process is super delayed here in the Colón area…” He also told Peninsula 360 that yesterday they documented a federal government official wearing  a cap promoting a National Party political candidate while making payments for a social program “in the same school” that is serving as a voting center today.

12:24 P.M. EST: Independent media outlet Contra Corriente reports that CESPAD’s Lucía Vijil has witnessed “political patronage” by the ruling National Party, with “state resources being used in voting centers, for example, to buy food in exchange for votes.”

12:17 P.M. EST: The Plataforma Juvenil Electoral (PJE), and CESPAD, which each have observers at various voting centers today, issued an alert that party representatives are instructing people how to vote at the Federico Padilla Rubi school in the town of Arenalitos, La Paz department.

12:02 P.M. EST: The International Honduran Diaspora has issued a statement denouncing that few national ID cards (DNI) have been delivered to Hondurans residing in the United States, “where more than 1 million compatriots live.” “Only 12,858 DNI enrollments were made and only 1,090 were delivered,” the group says, noting that consular offices also used the Thanksgiving holiday as an excuse to delay delivery.

The lack of ID cards among Hondurans abroad has been a major concern ahead of the election.

11:52 A.M. EST: An election observer reports: “A Partido Nacional team is ‘capturing’ votes outside Monseñor Cáceres school. Every time a voter comes to the school, they pick them by the arm and push them to their tent. At the tent they are recording their IDs, and voters get instructions. After voting, they receive a mug.”

Outside Monseñor Cáceres school

A voter with a mug he received from National Party members after he voted.

11:43 A.M. EST: How much will dissatisfaction with incumbent president Juan Orlando Hernández affect how people vote today? Much of US reporting on the elections stresses the scandals, corruption, and repression of the Hernández era, and the current government’s failures in improving the living standards of most Honduras, and in responding to the COVID-19 pandemic. For example, Jared Olson reports for the Los Angeles Times:

Hernandez has left the nation in ruins as tens of thousands of Hondurans flee for better lives in the U.S. and elsewhere. The president’s years in power have been marked by human rights violations, extrajudicial killings, stolen public money, poverty and complicity in drug trafficking at the highest levels of government.

“Juan Orlando is leaving us with a broken country,” said Lenín Laínez, a congressman for the opposition Libre party. “A country in debt, with serious narco-corruption, with high levels of criminality and one of the most unequal populations in Latin America.”

The National Party “has left us with a Honduras where it’s impossible to access quality, free healthcare or education,” said Anabel Melgar, a member of the National Front for Youth in Resistance. “They embezzled the health fund, and thousands of people have died because, with the money from the fund stolen, they handed out [poor-quality] pills.”

This graffiti in Tegucigalpa reflects anti-Hernández sentiment.

Fuera JOH graffiti
(Photo: Burke Bindbeutel)

11:07 A.M. EST: Various purported opinion polls, or images of supposed poll results, are already circulating. Observers caution to be wary of such purported polls, and numerous Honduran media outlets have committed to avoid reporting any such polls until after the CNE makes its first official announcement, which it is supposed to do after 8:00 p.m. Honduras time.

11:01 A.M. EST: Journalist José Luis Granados Ceja is documenting the situation in various voting centers today. These photos illustrate aspects of the voting process, from fingerprint scanning to depositing of ballots:

A voter has their fingerprint scanned. Photo: José Luis Granados Ceja

An election official with ballots. Honduras 2021 elections. Photo: José Luis Granados Ceja

A voter deposits her ballot for president. Honduras 2021 elections. Photo: José Luis Granados Ceja

10:38 A.M. EST: An election observer reports: “The JRV [Voting Table Supervisory Group] where I am stationed [in Distrito Central, Francisco Morazán] opened late (8am instead of 7) because of a problem with the password for the fingerprint ID machine. Voting has been consistent and one of the JRV members told me that she has worked mesas before and it seems like more traffic than before.”

10:15 A.M. EST: The CNE census site is still offline, making it difficult for people to find out where they are supposed to vote, as Honduras Now (which also has a useful podcast episode providing background on this election) explains:

9:51 A.M. EST: Honduran media report long lines at voting centers in Comayagüela (northwest of Tegucigalpa) 
and at the Centro de Educación Básica Gubernamental Dr José Antonio Peraza de la colonia 6 de Mayo del sector Rivera Hernández in San Pedro Sula, where the voting center still had not opened as of 9:00 a.m. EST, an hour after voting was supposed to have started. 

9:42 A.M. EST: Honduras’s major trade association, the Honduran Council of Private Enterprise (COHEP) issued a statement calling on the National Electoral Council (CNE) “to adhere to the constitutional framework, and perform rigorous and transparent work, which guarantees the legitimacy of this electoral process,” and urging “that all relevant information, is communicated in a clear, accurate and timely manner” by the CNE.

9:22 A.M. EST: A number of political candidates, including presidential candidate Xiomara Castro and vice presidential candidate Salvador Nasralla, are voting early. “We set the example of going out to vote early. Honduras needs a real change,” Castro told reporters.

9:13 A.M. EST: Honduran media are reporting late openings of some voting centers, in La Ceiba and la Villa Olímpica in Tegucigalpa where a voting center reportedly opened more than 40 minutes late. Meanwhile, the website of the National Electoral Council (CNE), one of the electoral institutions created as part of reforms following election-rigging in 2017, is experiencing problems.

8:59 A.M. EST: Election observers reportLines at the polls, lots of excitement & lots difficulties with the system that will transmit preliminary results to the CNE center in Tegucigalpa (TREP).” Honduran media and foreign correspondents also are reporting long lines at polling places in some urban areas.

Today, November 28, Hondurans head to the polls for crucial elections amid escalating political violence across the country. Voters will be electing a new president, the entirety of the 128-seat National Congress, every mayor of the country’s 298 municipalities, and over 2000 municipal councilors, as well as 20 representatives to the Central American Parliament.

At the presidential level, the leading contenders are ruling National Party candidate Nasry “Tito” Asfura and Xiomara Castro of the Liberty and Refoundation Party (LIBRE). The most recent polling, from late October (Honduran law forbids polling within one month of scheduled elections) showed Castro with a significant lead over Asfura: 38 to 21 percent, with Liberal Party candidate Yani Rosenthal well behind both.

Honduras has experienced political violence in the run-up to the elections. The United Nations Office of the High Commissioner for Human Rights most recently cited 29 political killings. Recent high-profile assassinations include a Liberal Party mayor running for reelection, Francisco Gaitán, and Luis Casaña, a LIBRE Party candidate for municipal councilor who was shot shortly after leaving a campaign event with presidential candidate Xiomara Castro.

Electoral reforms negotiated after the 2017 elections and subsequent protests, but not approved until after party primaries in March of this year, have given rise to hope for a more transparent process. Crucial technical aspects of the electoral process, however — such as the newly implemented fingerprint identification system — are presenting serious challenges. This includes problems stemming from this year’s electoral census and the administration of new identification cards required for voting. According to reports, more than 350,000 Hondurans were still without these new ID cards as of mid-November, including many in the US. Already, the day before the elections, observers reported irregularities, including apparent vote-buying, voter intimidation, and failure the deliver materials and equipment needed to transmit vote results. 

Also a product of the negotiated reforms is the highly political makeup of the National Electoral Council (CNE), whereby each of the three major parties has one voting member in the CNE. Given that the contenders for the presidency are from LIBRE and the National Party, the Liberal Party CNE councilor could act as a potential key swing vote on Sunday night, and after.

Yet many are expressing cautious optimism — including Gustavo Irías, executive director of Honduras’s Center for Democracy Studies (CESPAD) — that Sunday’s elections could signal a turning point following 12 years of crisis since the coup. In order to monitor conditions on the ground during the elections, CESPAD has partnered with US-based human rights organization Global Exchange to deploy dozens of international, and more than 250 national, observers to polling stations across the country.

Read this post for more background and context on Honduras’s 2021 elections.

Note: CEPR will live-blog the Honduras elections here on Sunday, with updates from people on the ground in Honduras, statements from candidates and other political figures, media reports, and more. 

This Sunday, November 28, Hondurans will head to the polls for crucial elections amid escalating political violence across the country. Voters will be electing a new president, the entirety of the 128-seat National Congress, every mayor of the country’s 298 municipalities, and over 2000 municipal councilors, as well as 20 representatives to the Central American Parliament.

At the presidential level, the leading contenders are ruling National Party candidate Nasry “Tito” Asfura and Xiomara Castro of the Liberty and Refoundation Party (LIBRE). The most recent polling, from late October (Honduran law forbids polling within one month of scheduled elections) showed Castro with a significant lead over Asfura: 38 to 21 percent, with Liberal Party candidate Yani Rosenthal well behind both.

Castro’s candidacy is supported by a broad coalition of forces opposed to the government of President Juan Orlando Hernández (often referred to by his initials “JOH”), which has been involved in far-reaching corruption within state institutions and has carried out violent repression targeting protest movements and activists. JOH’s brother, Tony Hernández, was sentenced to life in prison in the United States earlier this year for trafficking cocaine to the US, among other charges. JOH himself is under investigation by the US, and is believed to likely face prosecution once he leaves office. The stakes are high for Hernández, as Asfura may protect him from extradition should Asfura win the presidency, while other candidates are not likely to shield JOH (Rosenthal has already said he would consider extraditing Hernández should Rosenthal win).

Castro’s husband is former president Manuel Zelaya, who was deposed in a 2009 coup that succeeded thanks in part to the support of Obama administration officials, including then secretary of state Hillary Clinton.

The 12 years since the 2009 coup have been marked by social, economic, and political crises. According to the World Bank, Honduras currently has the second-highest poverty rate in Latin America and the Caribbean, and one of the highest homicide rates in the world. All of these factors, along with serious human rights violations committed at the hands of state security forces and gangs, have contributed to the high rate of Honduran nationals — nearly one in ten — who have left the country in recent years.

It is widely believed that electoral fraud was committed during the November 26, 2017 elections, which gave JOH a controversial second term in office. As CEPR Co-Director Mark Weisbrot denounced at the time, the electoral process, including the initial tabulation and subsequent partial recount, severely lacked transparency and was rife with irregularities.

On December 17, the Organization of American States (OAS) Electoral Observation Mission released a statement raising concerns as to the validity of the electoral results released by the Supreme Electoral Tribunal (TSE) that same day.

The OAS is once again sending an electoral mission to Honduras for Sunday’s elections. The OAS’s role in creating a narrative of electoral fraud, however — without evidence — around Bolivia’s 2019 elections, have since cost the institution credibility, and have spurred new scrutiny of the OAS’s role in overturning elections in Haiti in 2000 and 2010 as well.

Mass mobilizations against electoral fraud broke out across the country. Security forces brutally repressed the protests, killing at least 31 and detaining more than 1,000 people in subsequent weeks.

As CEPR’s Alex Main explained in a piece published shortly after, the US was far from a neutral party in the 2017 elections. In a December 18, 2017 statement, the US State Department recognized the TSE results and ignored both clear irregularities in the vote count and calls for a redo of the election — including from the OAS. Instead, on December 22, the State Department congratulated JOH on his victory.

If the Biden administration intends to act on its claimed commitment to defending human rights and democracy in the hemisphere, and break with its pattern of unconditional support for corrupt, repressive, and undemocratic governments in Honduras, Sunday’s elections present a good opportunity to do that. To that end, nearly 30 members of the US Congress wrote a letter to Secretary of State Antony Blinken last week, urging him to ensure that the US remains neutral in the Honduran electoral process and “support[s] an outcome that is genuinely democratic and inclusive.”

In a House Foreign Services Committee hearing last week, Assistant Secretary for Western Hemisphere Affairs Brian A. Nichols discussed his plans to visit Honduras to meet with government officials, civil society organizations, and high-ranking members of the Honduran armed forces and police before the elections. Nichols also assured Representative Joaquin Castro that the Blinken State Department will be “judicious in their remarks” regarding this weekend’s elections.

The letter from Congress also raised concerns about the political violence that Honduras has witnessed in the run-up to the elections, noting that the United Nations Office of the High Commissioner for Human Rights “has documented 23 murders of candidates and their family members.” That figure has, tragically, already become outdated in the less than two weeks since the letter was published, as the OHCHR most recently cited 29 political killings. Recent high-profile assassinations include a Liberal Party mayor running for reelection, Francisco Gaitán, and Luis Casaña, a LIBRE Party candidate for municipal councilor who was shot shortly after leaving a campaign event with presidential candidate Xiomara Castro.

Electoral reforms negotiated after the 2017 elections and subsequent protests, but not approved until after party primaries in March of this year, have given rise to hope for a more transparent process. Crucial technical aspects of the electoral process, however — such as the newly implemented fingerprint identification system — are presenting serious challenges with mere hours before voting is set to begin Sunday morning. This includes problems stemming from this year’s electoral census and the administration of new identification cards required for voting. According to reports, more than 350,000 Hondurans were still without these new ID cards as of mid-November, including many in the US.

Also a product of the negotiated reforms is the highly political makeup of the National Electoral Council (CNE), whereby each of the three major parties has one voting member in the CNE. Given that the contenders for the presidency are from LIBRE and the National Party, the Liberal Party CNE councilor could act as a potential key swing vote on Sunday night, and after.

Many are expressing cautious optimism, however — including Gustavo Irías, executive director of Honduras’s Center for Democracy Studies (CESPAD) — that Sunday’s elections could signal a turning point following 12 years of crisis since the coup. In order to monitor conditions on the ground during the elections, CESPAD has partnered with US-based human rights organization Global Exchange to deploy dozens of international, and more than 250 national, observers to polling stations across the country.

Progressives in the US who care about democracy and human rights in Honduras need to pay close attention to these elections, and be prepared to mobilize to ensure that neither the Biden administration nor the OAS secretary general again intervene to recognize a fraudulent process.

CEPR will live-blog the Honduras elections here on Sunday, with updates from people on the ground in Honduras, statements from candidates and other political figures, media reports, and more. CEPR previously live-blogged elections in Honduras in 2013 and closely followed the elections in 2017 and 2009.

Note: CEPR will live-blog the Honduras elections here on Sunday, with updates from people on the ground in Honduras, statements from candidates and other political figures, media reports, and more. 

This Sunday, November 28, Hondurans will head to the polls for crucial elections amid escalating political violence across the country. Voters will be electing a new president, the entirety of the 128-seat National Congress, every mayor of the country’s 298 municipalities, and over 2000 municipal councilors, as well as 20 representatives to the Central American Parliament.

At the presidential level, the leading contenders are ruling National Party candidate Nasry “Tito” Asfura and Xiomara Castro of the Liberty and Refoundation Party (LIBRE). The most recent polling, from late October (Honduran law forbids polling within one month of scheduled elections) showed Castro with a significant lead over Asfura: 38 to 21 percent, with Liberal Party candidate Yani Rosenthal well behind both.

Castro’s candidacy is supported by a broad coalition of forces opposed to the government of President Juan Orlando Hernández (often referred to by his initials “JOH”), which has been involved in far-reaching corruption within state institutions and has carried out violent repression targeting protest movements and activists. JOH’s brother, Tony Hernández, was sentenced to life in prison in the United States earlier this year for trafficking cocaine to the US, among other charges. JOH himself is under investigation by the US, and is believed to likely face prosecution once he leaves office. The stakes are high for Hernández, as Asfura may protect him from extradition should Asfura win the presidency, while other candidates are not likely to shield JOH (Rosenthal has already said he would consider extraditing Hernández should Rosenthal win).

Castro’s husband is former president Manuel Zelaya, who was deposed in a 2009 coup that succeeded thanks in part to the support of Obama administration officials, including then secretary of state Hillary Clinton.

The 12 years since the 2009 coup have been marked by social, economic, and political crises. According to the World Bank, Honduras currently has the second-highest poverty rate in Latin America and the Caribbean, and one of the highest homicide rates in the world. All of these factors, along with serious human rights violations committed at the hands of state security forces and gangs, have contributed to the high rate of Honduran nationals — nearly one in ten — who have left the country in recent years.

It is widely believed that electoral fraud was committed during the November 26, 2017 elections, which gave JOH a controversial second term in office. As CEPR Co-Director Mark Weisbrot denounced at the time, the electoral process, including the initial tabulation and subsequent partial recount, severely lacked transparency and was rife with irregularities.

On December 17, the Organization of American States (OAS) Electoral Observation Mission released a statement raising concerns as to the validity of the electoral results released by the Supreme Electoral Tribunal (TSE) that same day.

The OAS is once again sending an electoral mission to Honduras for Sunday’s elections. The OAS’s role in creating a narrative of electoral fraud, however — without evidence — around Bolivia’s 2019 elections, have since cost the institution credibility, and have spurred new scrutiny of the OAS’s role in overturning elections in Haiti in 2000 and 2010 as well.

Mass mobilizations against electoral fraud broke out across the country. Security forces brutally repressed the protests, killing at least 31 and detaining more than 1,000 people in subsequent weeks.

As CEPR’s Alex Main explained in a piece published shortly after, the US was far from a neutral party in the 2017 elections. In a December 18, 2017 statement, the US State Department recognized the TSE results and ignored both clear irregularities in the vote count and calls for a redo of the election — including from the OAS. Instead, on December 22, the State Department congratulated JOH on his victory.

If the Biden administration intends to act on its claimed commitment to defending human rights and democracy in the hemisphere, and break with its pattern of unconditional support for corrupt, repressive, and undemocratic governments in Honduras, Sunday’s elections present a good opportunity to do that. To that end, nearly 30 members of the US Congress wrote a letter to Secretary of State Antony Blinken last week, urging him to ensure that the US remains neutral in the Honduran electoral process and “support[s] an outcome that is genuinely democratic and inclusive.”

In a House Foreign Services Committee hearing last week, Assistant Secretary for Western Hemisphere Affairs Brian A. Nichols discussed his plans to visit Honduras to meet with government officials, civil society organizations, and high-ranking members of the Honduran armed forces and police before the elections. Nichols also assured Representative Joaquin Castro that the Blinken State Department will be “judicious in their remarks” regarding this weekend’s elections.

The letter from Congress also raised concerns about the political violence that Honduras has witnessed in the run-up to the elections, noting that the United Nations Office of the High Commissioner for Human Rights “has documented 23 murders of candidates and their family members.” That figure has, tragically, already become outdated in the less than two weeks since the letter was published, as the OHCHR most recently cited 29 political killings. Recent high-profile assassinations include a Liberal Party mayor running for reelection, Francisco Gaitán, and Luis Casaña, a LIBRE Party candidate for municipal councilor who was shot shortly after leaving a campaign event with presidential candidate Xiomara Castro.

Electoral reforms negotiated after the 2017 elections and subsequent protests, but not approved until after party primaries in March of this year, have given rise to hope for a more transparent process. Crucial technical aspects of the electoral process, however — such as the newly implemented fingerprint identification system — are presenting serious challenges with mere hours before voting is set to begin Sunday morning. This includes problems stemming from this year’s electoral census and the administration of new identification cards required for voting. According to reports, more than 350,000 Hondurans were still without these new ID cards as of mid-November, including many in the US.

Also a product of the negotiated reforms is the highly political makeup of the National Electoral Council (CNE), whereby each of the three major parties has one voting member in the CNE. Given that the contenders for the presidency are from LIBRE and the National Party, the Liberal Party CNE councilor could act as a potential key swing vote on Sunday night, and after.

Many are expressing cautious optimism, however — including Gustavo Irías, executive director of Honduras’s Center for Democracy Studies (CESPAD) — that Sunday’s elections could signal a turning point following 12 years of crisis since the coup. In order to monitor conditions on the ground during the elections, CESPAD has partnered with US-based human rights organization Global Exchange to deploy dozens of international, and more than 250 national, observers to polling stations across the country.

Progressives in the US who care about democracy and human rights in Honduras need to pay close attention to these elections, and be prepared to mobilize to ensure that neither the Biden administration nor the OAS secretary general again intervene to recognize a fraudulent process.

CEPR will live-blog the Honduras elections here on Sunday, with updates from people on the ground in Honduras, statements from candidates and other political figures, media reports, and more. CEPR previously live-blogged elections in Honduras in 2013 and closely followed the elections in 2017 and 2009.

On August 23, 2021, the International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to its members to add liquidity to the global economy during the unprecedented health and economic crises caused by COVID-19. SDRs, which are an international reserve asset, can be exchanged for hard currency or donated among member countries, meaning the injection by the IMF can be used by governments to stabilize their currencies and shore up their reserves, or for a number of social or health policies — the latter being an especially important use for SDRs during the pandemic, as IMF Managing Director Kristalina Georgieva has said


In September, we reported on the use of SDRs by countries during the first week following the $650 billion allocation of these IMF reserve assets. On this occasion, we analyze SDR holdings as reported by the IMF at the end of September and compare them to previous months’ reports. It is important to note that not all uses of SDRs involve operations at the SDR Department that modify member countries’ SDR holdings; some are domestic operations leveraged on SDR holdings. For example, a recent report by Latindadd discusses domestic SDR operations in Paraguay, Colombia and Mexico. Argentina has also conducted domestic SDR operations that enhanced the impact of its SDRs. These operations are noteworthy but will not appear as changes in the IMF’s accounting.

Here are some key takeaways from the IMF’s September data and other recent SDR news:

  • Lebanon, Ecuador, Malawi, Tunisia, Ethiopia, Guyana and Jordan exchanged all, or virtually all, of their SDRs for hard currency. 
  • Armenia, South Sudan, Ukraine and Haiti exchanged over half of their SDRs for hard currency. 
  • Many countries are transferring or onlending the SDR equivalent amounts to government budgets. 
  • Argentina’s SDR holdings declined by over 43 percent. The country’s president decreed that the SDRs belong to the government, sold them for pesos to the Central Bank, then borrowed them back from the Central Bank and used them to make a significant payment to the IMF. Along with Paraguay, Colombia, and Mexico, more countries are conducting domestic SDR operations to increase the impact of the allocation.
  • The Republic of Congo deposited its remaining amount of SDRs at the Bank of Central African States. 
  • Several richer countries, including some with Voluntary Trading Agreements with the IMF, exchanged hard currencies for SDRs. Fifteen countries saw increases in their holdings of SDRs in excess of $100 million, with China leading the way with a nearly $1 billion increase.
  • In September, there was a net total of $8.2 billion SDRs exchanged, representing about a $6.6 billion increase compared to the previous month.
  • Since the allocation, about $9.8 billion worth of transactions involving SDRs have taken place, according to the IMF data.

The September data further strengthens the case that the $650 billion allocation of SDRs in August was a success. In addition to the calls and Congressional legislation in support of an additional allocation of SDRs  (which has already passed the US House of Representatives) the Prime Minister of Barbados, Mia Amor Mottley, called for annual $500 billion allocations of SDRs to developing countries at COP26.

In addition to the October 4th event Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery, another event on October 5, IMF Surcharges: A Necessary Tool or Counter-productive Obstacle To a Just and Green Recovery, was hosted by the IMF as part of its annual meetings and was co-sponsored by CEPR and many other groups.


IMF Data: SDR accounts with large decreases

While reductions in countries’ SDR holdings usually imply an exchange of SDRs for hard currency, decreases in SDR holdings may also result from a payment in SDRs to the IMF for a loan or a transaction (such as a deposit) with a prescribed holder of SDRs. Countries may also lend SDRs to each other. Countries that exchange SDRs for hard currencies usually cite liquidity problems, dwindling foreign exchange reserves and a need for more imports, as well as a desire to implement measures to address the pandemic.

There was a net total of $8.193 billion worth of SDRs exchanged in September.

Lebanon

$1128 million decline (representing a 132 percent reduction of its new recent allocation) 

Lebanon exchanged not only all of its 2021 allocation, but also exchanged its SDRs from previous allocations. The new Lebanese government initially said SDRs were reserved for transfers to the disadvantaged via ration cards (funded “via the World Bank and the Special Drawing Rights (SDR) of the IMF.”) More recent reporting suggests this is still the case. Lebanon is currently negotiating with the IMF for a separate program due to its severe economic crisis which included a precipitous drop in the value of its currency.

Ecuador

$944.3 million decline (100 percent reduction of its recent allocation)

Ecuador exchanged all of its SDRs. The SDRs were allocated directly to the 2021 government budget and were used to cover financing shortfalls of its capital expenditures while the IMF program in force was under review by IMF staff. The Ecuadorian parliament objected to the fact that the (unexchanged) SDRs were recorded as a liability considering the fact that there is no mandate to repay the principal. The Ecuadorian government said, “[p]roceeds from the SDR distribution will go to investment and social services.

Tunisia

$736 million decline (100 percent reduction of its recent allocation)

On September 14, a Presidential decree established that 100 percent of the SDRs allocated to Tunisia would be retroactively transferred from the Central Bank of Tunisia to the government’s budget. An initial quantity corresponding to 26 percent of the allocation was transferred immediately. According to press reports, most of the amount went to paying government employee wages.

Malawi 

$187.4 million decline (100 percent reduction of its recent allocation)

Malawi is considered a country with a high probability of imminent default on its external debt and Malawi has taken several IMF loans last year. Malawi has stated that SDRs “bolster confidence and strengthen the resilience of the country’s economy.” Given the pressure on its currency, Malawi may be using SDRs to stabilize its exchange rate or import necessities. Malawi received two loan disbursements from the Rapid Credit Facility in 2020.

Republic of Congo 

$219 million decrease (representing a 100 percent of new SDR allocations)

The Republic of Congo had a significant decrease in holdings that exactly matches an increase in holdings of the regional central bank, the Bank of Central African States (BEAC, its acronym in French). The IMF can qualify supranational monetary or financial institutions as “prescribed holders,” which are entities that can also have accounts at the SDR Department and engage in SDR transactions. BEAC is a prescribed holder. 

In August the Republic of Congo delivered 27.9 percent of its new $221 million SDR holdings to the BEAC; in September it delivered the remaining amount to the BEAC. The government has said the resources from the IMF will be used to support the 2022 budget. 

Guyana

$245.1 million decline (99.9 percent reduction of its recent allocation)

In August, Bank of Guyana Governor General, Gobind Ganga said, “The allocation is expected to aid in the fight against the coronavirus pandemic as well boost productivity and growth of the Guyanese economy through its capital spending that focuses on the infrastructural transformation of the country.” The drawdown of SDRs together with the central bank governor’s comments suggest full fiscal use of the SDRs.

Ethiopia 

$405.8 million decline (99.9 percent reduction of its recent allocation)

There is little information on how the SDRs are being used, although the allocation was seen as a boost to the economy and reserves. The IMF is engaging with the Ethiopian government due to worsening economic conditions, but not discussing a separate loan program due to the political situation. Ethiopia received a $411 million loan from the IMF in 2020 via the Rapid Financing Instrument.

Jordan

$455.1 million decline (98.2 percent reduction of its recent allocation)

There is no publicly available information on how Jordan used its SDRs. Jordan received a $396 million loan in 2020 under the Rapid Financing Instrument due to the effects of the pandemic. 

Armenia

$113.9 million decline (65.5 percent reduction of its recent allocation)

There is no publicly available information on how Armenia used its SDRs. In the context of meeting with the IMF, the Armenian government emphasized its commitment to building out education infrastructure. 

South Sudan

$211.3 million decline (63.6 percent reduction of its recent allocation)

South Sudan has said that SDRs “will address budget support and the economic impacts of the COVID-19 pandemic” in the context of “implementing essential economic reforms, including monetary and far-reaching foreign exchange market reforms, which involves refraining from monetary financing of the deficit.” South Sudan received two loans disbursements from the Rapid Credit Facility in 2020 and 2021, respectively.

Ukraine

$1408.9 million decline (51.9 percent reduction of its recent allocation)

SDRs “provide more financing space to meet higher budget needs in the remainder of 2021…” according to ratings agency Fitch. Ukraine has said SDRs could be used for the current budget period or future period. Ukraine entered into a new stand-by agreement in June 2020 due to the effects of the pandemic.

Haiti

$110.6 million decline (50 percent reduction of its recent allocation)

The Haitian central bank will gradually onlend the domestic currency equivalent of the SDR amount to the government budget in exchange for long-term debt. According to the central bank “the [SDR] allocation represents a very positive element for the Haitian economy because it will ease pressure on the central bank’s foreign exchange reserves and it will allow the creation of some fiscal space to face the challenges of the health crisis and the peoples’ hardship after the August 14, 2021 earthquake and the tropical storm Grace.”

Argentina

$1869.2 million decline (43.4 percent reduction of its recent allocation)

The Argentine government used the SDRs for a complex set of operations that helped alleviate its external position marked by its existing IMF debt. It was decreed the SDRs belong to the government’s current budget, not the central bank. Then, the government sold the SDRs to the central bank, for pesos. The government used the pesos to prepay previous central bank financing. The government then borrowed the SDRs from the central bank to pay part of its 2021 obligations to the IMF. The Argentine Minister of Finance has announced it will pay its December obligations with the SDRs recently allocated: “Argentina’s Central Bank paid the maturity with special drawing rights (SDRs) received by the country last month, two sources told the Bloomberg news agency.

Other notable accounts:

  • Somalia. $51.6 million decline (23.3 percent reduction of its recent allocation)
  • Zimbabwe. $70.4 million decline (7.4 percent reduction)

IMF Data: SDR accounts with large increases

These countries likely exchanged or issued hard currencies for SDRs. Alternatively, they could have accepted SDRs as payment for previous loans.

In September, countries with Voluntary Trading Arrangements collectively purchased $5.8 billion in SDRs.[1]

  • China. $995 million increase 
  • Japan. $976 million increase
  • United Kingdom. $706 million increase
  • Belgium. $596 million increase
  • Australia. $579 million increase
  • The Netherlands. $322 million increase
  • Italy. $293 million increase
  • Korea. $282 million increase
  • Spain. $227 million increase
  • Sweden. $211 million increase
  • Mexico. $211 million increase
  • France. $154 million increase
  • Chile. $141 million increase
  • New Zealand. $70 million increase
  • Switzerland. $52 million increase

The participating countries’ total holdings of SDRs was worth $348 billion. They increased their total SDR holdings by 1.7 percent.

In addition, the European Central Bank increased its SDR holdings by $282 million, a major increase in its SDR holdings. The ECB is a prescribed holder; it did not receive a direct allocation from the IMF. 

IMF General Resources Account

$1875.4 million increase in its SDR holdings in September

The IMF received a significant payment from Argentina (see above). The IMF’s SDR holdings increased slightly over the amount that Argentina’s decreased. It is important to remember that no SDRs are allocated to the IMF; its holdings increase primarily due to loan repayments. 


Countries to Watch

Apart from the IMF data, reporting on — or statements from — countries may give information on the use, or future use, of SDRs. It may also highlight the domestic use of SDRs, which would not appear as transactions in the IMF data. These are countries to watch in future months.


[1] The IMF has reached Voluntary Trading Arrangements (VTA) for SDRs with several entities: Australia, China, Japan, Korea, New Zealand; the European Central Bank, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Malta, the Netherlands, Norway, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom; Canada, Chile, Mexico, United States; and Saudi Arabia. Therefore, these countries will likely show increases in their holdings to fulfill the requests of those countries whose holdings have decreased. Conversely, countries not on this list with increases in SDR holdings are candidates for other types of transactions.

The October SDR amounts are very similar and are round numbers for many of the VTA countries; it appears those are proactively requested by the IMF SDR department. From these data, It appears Oman may be a prospective or a new VTA partner.

On August 23, 2021, the International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to its members to add liquidity to the global economy during the unprecedented health and economic crises caused by COVID-19. SDRs, which are an international reserve asset, can be exchanged for hard currency or donated among member countries, meaning the injection by the IMF can be used by governments to stabilize their currencies and shore up their reserves, or for a number of social or health policies — the latter being an especially important use for SDRs during the pandemic, as IMF Managing Director Kristalina Georgieva has said


In September, we reported on the use of SDRs by countries during the first week following the $650 billion allocation of these IMF reserve assets. On this occasion, we analyze SDR holdings as reported by the IMF at the end of September and compare them to previous months’ reports. It is important to note that not all uses of SDRs involve operations at the SDR Department that modify member countries’ SDR holdings; some are domestic operations leveraged on SDR holdings. For example, a recent report by Latindadd discusses domestic SDR operations in Paraguay, Colombia and Mexico. Argentina has also conducted domestic SDR operations that enhanced the impact of its SDRs. These operations are noteworthy but will not appear as changes in the IMF’s accounting.

Here are some key takeaways from the IMF’s September data and other recent SDR news:

  • Lebanon, Ecuador, Malawi, Tunisia, Ethiopia, Guyana and Jordan exchanged all, or virtually all, of their SDRs for hard currency. 
  • Armenia, South Sudan, Ukraine and Haiti exchanged over half of their SDRs for hard currency. 
  • Many countries are transferring or onlending the SDR equivalent amounts to government budgets. 
  • Argentina’s SDR holdings declined by over 43 percent. The country’s president decreed that the SDRs belong to the government, sold them for pesos to the Central Bank, then borrowed them back from the Central Bank and used them to make a significant payment to the IMF. Along with Paraguay, Colombia, and Mexico, more countries are conducting domestic SDR operations to increase the impact of the allocation.
  • The Republic of Congo deposited its remaining amount of SDRs at the Bank of Central African States. 
  • Several richer countries, including some with Voluntary Trading Agreements with the IMF, exchanged hard currencies for SDRs. Fifteen countries saw increases in their holdings of SDRs in excess of $100 million, with China leading the way with a nearly $1 billion increase.
  • In September, there was a net total of $8.2 billion SDRs exchanged, representing about a $6.6 billion increase compared to the previous month.
  • Since the allocation, about $9.8 billion worth of transactions involving SDRs have taken place, according to the IMF data.

The September data further strengthens the case that the $650 billion allocation of SDRs in August was a success. In addition to the calls and Congressional legislation in support of an additional allocation of SDRs  (which has already passed the US House of Representatives) the Prime Minister of Barbados, Mia Amor Mottley, called for annual $500 billion allocations of SDRs to developing countries at COP26.

In addition to the October 4th event Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery, another event on October 5, IMF Surcharges: A Necessary Tool or Counter-productive Obstacle To a Just and Green Recovery, was hosted by the IMF as part of its annual meetings and was co-sponsored by CEPR and many other groups.


IMF Data: SDR accounts with large decreases

While reductions in countries’ SDR holdings usually imply an exchange of SDRs for hard currency, decreases in SDR holdings may also result from a payment in SDRs to the IMF for a loan or a transaction (such as a deposit) with a prescribed holder of SDRs. Countries may also lend SDRs to each other. Countries that exchange SDRs for hard currencies usually cite liquidity problems, dwindling foreign exchange reserves and a need for more imports, as well as a desire to implement measures to address the pandemic.

There was a net total of $8.193 billion worth of SDRs exchanged in September.

Lebanon

$1128 million decline (representing a 132 percent reduction of its new recent allocation) 

Lebanon exchanged not only all of its 2021 allocation, but also exchanged its SDRs from previous allocations. The new Lebanese government initially said SDRs were reserved for transfers to the disadvantaged via ration cards (funded “via the World Bank and the Special Drawing Rights (SDR) of the IMF.”) More recent reporting suggests this is still the case. Lebanon is currently negotiating with the IMF for a separate program due to its severe economic crisis which included a precipitous drop in the value of its currency.

Ecuador

$944.3 million decline (100 percent reduction of its recent allocation)

Ecuador exchanged all of its SDRs. The SDRs were allocated directly to the 2021 government budget and were used to cover financing shortfalls of its capital expenditures while the IMF program in force was under review by IMF staff. The Ecuadorian parliament objected to the fact that the (unexchanged) SDRs were recorded as a liability considering the fact that there is no mandate to repay the principal. The Ecuadorian government said, “[p]roceeds from the SDR distribution will go to investment and social services.

Tunisia

$736 million decline (100 percent reduction of its recent allocation)

On September 14, a Presidential decree established that 100 percent of the SDRs allocated to Tunisia would be retroactively transferred from the Central Bank of Tunisia to the government’s budget. An initial quantity corresponding to 26 percent of the allocation was transferred immediately. According to press reports, most of the amount went to paying government employee wages.

Malawi 

$187.4 million decline (100 percent reduction of its recent allocation)

Malawi is considered a country with a high probability of imminent default on its external debt and Malawi has taken several IMF loans last year. Malawi has stated that SDRs “bolster confidence and strengthen the resilience of the country’s economy.” Given the pressure on its currency, Malawi may be using SDRs to stabilize its exchange rate or import necessities. Malawi received two loan disbursements from the Rapid Credit Facility in 2020.

Republic of Congo 

$219 million decrease (representing a 100 percent of new SDR allocations)

The Republic of Congo had a significant decrease in holdings that exactly matches an increase in holdings of the regional central bank, the Bank of Central African States (BEAC, its acronym in French). The IMF can qualify supranational monetary or financial institutions as “prescribed holders,” which are entities that can also have accounts at the SDR Department and engage in SDR transactions. BEAC is a prescribed holder. 

In August the Republic of Congo delivered 27.9 percent of its new $221 million SDR holdings to the BEAC; in September it delivered the remaining amount to the BEAC. The government has said the resources from the IMF will be used to support the 2022 budget. 

Guyana

$245.1 million decline (99.9 percent reduction of its recent allocation)

In August, Bank of Guyana Governor General, Gobind Ganga said, “The allocation is expected to aid in the fight against the coronavirus pandemic as well boost productivity and growth of the Guyanese economy through its capital spending that focuses on the infrastructural transformation of the country.” The drawdown of SDRs together with the central bank governor’s comments suggest full fiscal use of the SDRs.

Ethiopia 

$405.8 million decline (99.9 percent reduction of its recent allocation)

There is little information on how the SDRs are being used, although the allocation was seen as a boost to the economy and reserves. The IMF is engaging with the Ethiopian government due to worsening economic conditions, but not discussing a separate loan program due to the political situation. Ethiopia received a $411 million loan from the IMF in 2020 via the Rapid Financing Instrument.

Jordan

$455.1 million decline (98.2 percent reduction of its recent allocation)

There is no publicly available information on how Jordan used its SDRs. Jordan received a $396 million loan in 2020 under the Rapid Financing Instrument due to the effects of the pandemic. 

Armenia

$113.9 million decline (65.5 percent reduction of its recent allocation)

There is no publicly available information on how Armenia used its SDRs. In the context of meeting with the IMF, the Armenian government emphasized its commitment to building out education infrastructure. 

South Sudan

$211.3 million decline (63.6 percent reduction of its recent allocation)

South Sudan has said that SDRs “will address budget support and the economic impacts of the COVID-19 pandemic” in the context of “implementing essential economic reforms, including monetary and far-reaching foreign exchange market reforms, which involves refraining from monetary financing of the deficit.” South Sudan received two loans disbursements from the Rapid Credit Facility in 2020 and 2021, respectively.

Ukraine

$1408.9 million decline (51.9 percent reduction of its recent allocation)

SDRs “provide more financing space to meet higher budget needs in the remainder of 2021…” according to ratings agency Fitch. Ukraine has said SDRs could be used for the current budget period or future period. Ukraine entered into a new stand-by agreement in June 2020 due to the effects of the pandemic.

Haiti

$110.6 million decline (50 percent reduction of its recent allocation)

The Haitian central bank will gradually onlend the domestic currency equivalent of the SDR amount to the government budget in exchange for long-term debt. According to the central bank “the [SDR] allocation represents a very positive element for the Haitian economy because it will ease pressure on the central bank’s foreign exchange reserves and it will allow the creation of some fiscal space to face the challenges of the health crisis and the peoples’ hardship after the August 14, 2021 earthquake and the tropical storm Grace.”

Argentina

$1869.2 million decline (43.4 percent reduction of its recent allocation)

The Argentine government used the SDRs for a complex set of operations that helped alleviate its external position marked by its existing IMF debt. It was decreed the SDRs belong to the government’s current budget, not the central bank. Then, the government sold the SDRs to the central bank, for pesos. The government used the pesos to prepay previous central bank financing. The government then borrowed the SDRs from the central bank to pay part of its 2021 obligations to the IMF. The Argentine Minister of Finance has announced it will pay its December obligations with the SDRs recently allocated: “Argentina’s Central Bank paid the maturity with special drawing rights (SDRs) received by the country last month, two sources told the Bloomberg news agency.

Other notable accounts:

  • Somalia. $51.6 million decline (23.3 percent reduction of its recent allocation)
  • Zimbabwe. $70.4 million decline (7.4 percent reduction)

IMF Data: SDR accounts with large increases

These countries likely exchanged or issued hard currencies for SDRs. Alternatively, they could have accepted SDRs as payment for previous loans.

In September, countries with Voluntary Trading Arrangements collectively purchased $5.8 billion in SDRs.[1]

  • China. $995 million increase 
  • Japan. $976 million increase
  • United Kingdom. $706 million increase
  • Belgium. $596 million increase
  • Australia. $579 million increase
  • The Netherlands. $322 million increase
  • Italy. $293 million increase
  • Korea. $282 million increase
  • Spain. $227 million increase
  • Sweden. $211 million increase
  • Mexico. $211 million increase
  • France. $154 million increase
  • Chile. $141 million increase
  • New Zealand. $70 million increase
  • Switzerland. $52 million increase

The participating countries’ total holdings of SDRs was worth $348 billion. They increased their total SDR holdings by 1.7 percent.

In addition, the European Central Bank increased its SDR holdings by $282 million, a major increase in its SDR holdings. The ECB is a prescribed holder; it did not receive a direct allocation from the IMF. 

IMF General Resources Account

$1875.4 million increase in its SDR holdings in September

The IMF received a significant payment from Argentina (see above). The IMF’s SDR holdings increased slightly over the amount that Argentina’s decreased. It is important to remember that no SDRs are allocated to the IMF; its holdings increase primarily due to loan repayments. 


Countries to Watch

Apart from the IMF data, reporting on — or statements from — countries may give information on the use, or future use, of SDRs. It may also highlight the domestic use of SDRs, which would not appear as transactions in the IMF data. These are countries to watch in future months.


[1] The IMF has reached Voluntary Trading Arrangements (VTA) for SDRs with several entities: Australia, China, Japan, Korea, New Zealand; the European Central Bank, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Malta, the Netherlands, Norway, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom; Canada, Chile, Mexico, United States; and Saudi Arabia. Therefore, these countries will likely show increases in their holdings to fulfill the requests of those countries whose holdings have decreased. Conversely, countries not on this list with increases in SDR holdings are candidates for other types of transactions.

The October SDR amounts are very similar and are round numbers for many of the VTA countries; it appears those are proactively requested by the IMF SDR department. From these data, It appears Oman may be a prospective or a new VTA partner.

Two years ago, the streets of Santiago, Chile were overrun by tear gas, fire, and armored military vehicles. The clash between peaceful protesters and armed forces evoked memories of the violent oppression under former dictator Augusto Pinochet. What began as a protest against a $0.04 price hike in subway fares turned into a mass movement against inequality, referred to as the “Estallido Social” (Social Outburst). Fed up with Pinochet-era neoliberalism that had deprived Chileans of educational opportunities, fair access to water, and health care, protesters demanded a complete overhaul of the system. After months of demonstrations, their calls finally came to fruition when the government agreed to a referendum in October 2020 on whether to rewrite the constitution, which was subsequently approved by an overwhelming 78% of voters. 

With the first round of presidential elections this Sunday, November 21, it is imperative to consider the historical implications of the current constitution and the structural changes a new constitution could bring to the very topics that candidates are currently debating. If approved, a new constitution would be put into place under the incoming administration. Moreover, the next president could threaten the autonomy of the Constitutional Convention (CC), the body responsible for rewriting the constitution, and potentially influence its agenda.  

Augusto Pinochet’s Economic Legacy 

The protesters’ grievances, and the push for a new constitution, were rooted in the legacy of Chile’s military dictatorship. In 1973, Chile’s democratically elected socialist president Salvador Allende was overthrown in a violent US-backed coup led by Pinochet. Shortly after, Pinochet ordered the drafting of a new constitution that embodied his views for Chile’s future. In 1980, the new constitution was ratified after a questionable plebiscite that “did not have electoral records,” as EFE notes. 

The new constitution was heavily influenced by the economic philosophy of neoliberal pioneers Friedrich Hayek, Milton Friedman, and James Buchanan. They viewed the constitution as a necessary means to “limit sovereign states, anchor economic freedoms and protect markets from democratic pressures for greater equality” to institutionalize and uphold their neoliberal agenda. Hayek even dubbed Chile as “one of the great economic miracles of our time.” The millions who drew the short end of the privatization stick saw this as anything but a miracle. 

Some historians of Chile’s economy separate the Pinochet era into, roughly, two periods: 1973–1982, and 1982–1990. In the former, the “Chicago Boys,” a group of Chilean economists educated at the University of Chicago under Milton Friedman and Arnold Harberger, rolled out neoliberal reforms — privatization, deregulation, and decreased government spending. A subsequent economic crisis in 1982 forced the military dictatorship to renationalize (temporarily) the Chilean banking system, reverse various liberalization reforms, and reintroduce regulations in the financial sector. By 1990, GDP per capita recovered to $2,494.527, nearly reaching the same levels as in 1981, $2,979.608. It wasn’t until after the nation’s transition to democracy in the 1990s that center-left governments began to implement tax reforms and social programs to reduce unemployment and poverty. 

Even with these reforms, Chile remains one of the most unequal countries among wealthy nations, where “the income of the richest [is] 13.6 times greater than those of the poorest.” Ultimately, the 1980 constitution provided the foundation for policies that prioritized business interests over the well-being and health of Chile’s citizens. Rewriting the constitution has been an ongoing battle for Chileans. In her 2013 presidential bid, former President Michelle Bachelet campaigned on the promise of a new constitution and unsuccessfully pushed legislation to initiate the process of a rewrite just five days before she left office in 2018. Failed attempts and growing inequality led Chileans to take to the streets in 2019. It was both an “awakening” and continued fight against deep-rooted ideologies and policies that were never intended to benefit the majority of Chileans.

The Referendum and Constitutional Convention 

In an attempt to quell the protests, Chile’s right-wing president, Sebastian Piñera, sent in the military and reversed the subway price increase, along with promising higher pensions, better health care coverage, and tax reform. But Chileans weren’t convinced that another round of patchy social programs and empty promises would address their needs. To appease protesters, the Piñera administration agreed to hold a referendum. It asked the Chilean people two questions: Do you want a new constitution? And if yes, who should write it: a combination of parliament members and popularly elected members, or exclusively popularly elected members?

An overwhelming 78 percent of Chileans who participated in the referendum voted “yes” to drafting a new constitution, and 79 percent wanted an exclusively popularly elected body to do it. The Constitutional Convention (CC), responsible for drafting the new constitution, is made up of 155 members, with an equal number of men and women, and with 17 seats reserved for Indigenous peoples. While there is much work to be done, ensuring Indigenous representation and gender parity was a step in the right direction for the CC, especially as the current constitution is the only one in Latin America that does not recognize Indigenous peoples.

The Piñera administration declared the CC would need a two-thirds majority to approve any new constitutional articles. In an astonishing victory, independent, anti-elite, and left-leaning candidates won a majority of seats in the Convention, defeating members of Piñera’s Chile Vamos party and the center-right coalition who ended up with only 37 out of 155 seats. 

The CC convened in July and will have nine months to rewrite the constitution, with a three-month extension period if needed. Chileans will then vote to approve or reject the new constitution in an “exit referendum.” If approved, the new constitution will be put into effect immediately; if rejected, the current constitution will remain. Critics of the CC argue the constitution has transformed over the years, making it distinct from its ties to the military dictatorship, but proponents claim much of the document is intact and must be rewritten to truly address the demands of protesters.

Impact of the 1980 Constitution

The independent, antiestablishment CC members have wide-ranging goals, shaped by their understanding of how the 1980 constitution continues to impact Chilean society and stifle progressive reforms. The 1980 constitution consolidated the power of the president, strengthened the civil-military relationship, restricted political freedoms, and established a new neoliberal social and economic order by giving the state a subsidiary role and enabling private entities to take control of essential industries — including education, health care, and water. 

According to Martín Arias-Loyola, the current constitution equates “freedom with private property, free enterprise and individual rights,” resulting in the privatization of education, health care, water, and the pension system, among a multitude of other sectors. Chilean political scientist Claudia Heiss explains that the constitution does this by guaranteeing citizens “freedoms” rather than “rights.” Chileans have the “freedom” to health care and higher education, but rights to these are not guaranteed under the constitution. In short: if you can pay, the privilege is all yours. The grievances of the Estallido Social and previous student, Indigenous, and feminist-led protests boil down to one main demand: social protection. Instead of overhauling the status quo in order to guarantee such protection, past governments only implemented ad hoc social programs and policies to address the system’s failings. 

Beyond the content of the text, the constitution was designed to be difficult to change. Conservative constitutional lawyer Jaime Guzmán played a role in ensuring that the right wing had the power to prevent any major reforms, thus maintaining the status quo that Pinochet wanted to uphold. Guzmán states the constitution “must ensure that if the adversaries come to govern, they are constrained to follow an action not so different from what one would hope for …” In an attempt to neutralize adversaries, any changes to the constitution had to be made by more than a majority, giving the right wing veto power. While Heiss hopes to see both the dogmatic (i.e., pertaining to rights) and the organic (i.e., distribution of power) sections of the constitution addressed in the rewriting, she argues that more attention should focus on changing the organic parts to rework the distribution of power.

Changes to the 1980 Constitution

While the constitution has undergone many reforms since Chile’s return to democracy in 1990, Contexto, a group of organizations analyzing and encouraging public participation in the constitutional process, finds that at least 43 percent of the constitution remains the same as the 1980 version. The most harmful legacies of the 1980 constitution pertain to education, health care, water rights, transportation, reproductive rights, the pension system, and police reform. New policies in all these areas were implemented in accordance with the 1980 constitution. 

For example, prior to Pinochet, Chile had a state-run centralized education system. Pinochet decentralized the system by giving municipalities control, created new rules for funding public education, and imposed further deregulation, resulting in a 50 percent increase in private schools financed with public funds between 1980 and 1990. The privatization and segregation of education resulted in a massive opportunity gap for primary and secondary school students. Higher education also became a for-profit industry, attainable almost exclusively for wealthy families who can afford to send their children to private universities or to receive high quality primary and secondary education, which can set them up for acceptance into academically competitive public universities.

Another legacy rooted in the 1980 constitution is the denial of reproductive rights. Guzmán drafted a “right-to-life clause” in the 1980 constitution, and helped pass legislation in 1989 that effectively banned abortion. A landmark ruling in 2017 “decriminalized abortion under three circumstances: if the life of the pregnant woman or girl is at risk; if the pregnancy is the result of rape; or if the fetus suffers severe conditions not compatible with life outside of the womb.” However, there is still a concession that allows doctors to deny patients abortion services on moral grounds, with the exception of life-threatening cases. While commendable, it is only a small step toward securing reproductive rights in Chile.

Some critics of the CC argue the constitution has been substantially modified over the past 40 years. In 2005, President Ricardo Lagos declared that after 54 modifications to the constitution, Chile had broken from the military dictatorship and would no longer follow a document that divides the Chilean people. Some positive changes include declaring “men and women are equal before the law” (No.2); guaranteed state legal representation for defendants (No.3); guarantees of political pluralism (No.15); and increases in the right to primary and secondary education (No.10). While these and other changes influenced the state’s role and provided a degree of greater social protection, there are 16 rights that remain the same in relation to the “moral life of citizens and economic development,” as Contexto describes it.

Regardless of the modifications, the real-world impacts and social relations established by the constitution continue to dominate Chilean society long after its transition from dictatorship to democracy in the 1990s. Jonathan Barton argues the authoritarian capitalist state became a democratic capitalist state, maintaining Pinochet’s vision of Chile as emulated in his constitution. In other words, regime change did not include structural economic change. Neoliberalism’s beneficiaries kept control of the means of production, and with inadequate state-provided social protection, Chile continues to be one of the most unequal countries in the region. Chile’s institutions and established social relations kept the Pinochet-era constitution — and neoliberalism — alive, despite some tweaks.

Objectives of the Constitutional Convention 

Despite the modifications made over the years, the constitution has failed to meet the demands of most Chileans. The CC’s left-leaning members are pushing for “ending the subsidiary role of the state, overcoming the extractivist economy, recovering lands for native peoples, plurinationality, recovering labor rights, establishing food sovereignty, changing the pension system and establishing the right to quality public education, among other issues.” The minority of right-wing members from Vamos por Chile, hope to uphold the status quo of a private sector-dominated economy and the “freedoms” outlined in the current constitution. This includes protecting the freedoms of private economic activity and maintaining the central bank’s autonomy.  

However, the CC is not composed of two distinct, cohesive left and right blocs. There are idiosyncratic coalitions and independents, and constant shifting, of both “left” and “right” blocs, that has resulted in no one coalition having a supermajority. The most contentious divides within and among the various blocs include changes to private land, water rights, education, and the pension system. 

What’s next for Chile?

It is unclear yet what this all means for Chile, for the region, for women, for Indigenous peoples, and for other marginalized groups. Some warn that the CC already is not living up to progressives’ expectations. While the popular demand for rewriting the constitution in itself debunks the Chilean neoliberal “miracle,” the success of a new constitution would play a crucial role in fundamentally challenging the status quo. If successful, Chile would no longer have to work within the constraints of the current economic order, and could reimagine a new social formation that promotes collective values and secures rights to education, health care, and water, among others. This reimagining could offer momentum for other countries to follow suit, as already seen in the new constitutions of Bolivia and Ecuador that prioritized Indigenous rights over a decade ago. In addition, the process by which the CC was created can act as a model for other countries to fairly and justly rewrite their constitutions, namely by ensuring gender parity and Indigenous representation in the constituent assemblies.

Without downplaying its importance, the constitution would not, of course, be a panacea to Chile’s deeply entrenched social divisions, racism, sexism, and inequity. The established social relations and geographic divides among the winners and losers of economic growth persist. Constitutional changes must be accompanied by behavioral change and new legislation to provide social protections and wealth redistribution. Therefore, the winner of Sunday’s presidential elections — and the subsequent second round between the top two candidates, scheduled for December 19 — will largely determine how impactful a new constitution could be, as it would be enacted during their time in office. Moreover, the CC’s autonomous status will be put under political pressure with a new president, potentially derailing or uplifting its goals. While a new constitution’s historic impact would not be known for years to come, the 2019 Estallido Social protesters have undeniably left their mark on Chile, and signaled to the world their determination to overhaul a system that institutionalized economic disparities. 

Two years ago, the streets of Santiago, Chile were overrun by tear gas, fire, and armored military vehicles. The clash between peaceful protesters and armed forces evoked memories of the violent oppression under former dictator Augusto Pinochet. What began as a protest against a $0.04 price hike in subway fares turned into a mass movement against inequality, referred to as the “Estallido Social” (Social Outburst). Fed up with Pinochet-era neoliberalism that had deprived Chileans of educational opportunities, fair access to water, and health care, protesters demanded a complete overhaul of the system. After months of demonstrations, their calls finally came to fruition when the government agreed to a referendum in October 2020 on whether to rewrite the constitution, which was subsequently approved by an overwhelming 78% of voters. 

With the first round of presidential elections this Sunday, November 21, it is imperative to consider the historical implications of the current constitution and the structural changes a new constitution could bring to the very topics that candidates are currently debating. If approved, a new constitution would be put into place under the incoming administration. Moreover, the next president could threaten the autonomy of the Constitutional Convention (CC), the body responsible for rewriting the constitution, and potentially influence its agenda.  

Augusto Pinochet’s Economic Legacy 

The protesters’ grievances, and the push for a new constitution, were rooted in the legacy of Chile’s military dictatorship. In 1973, Chile’s democratically elected socialist president Salvador Allende was overthrown in a violent US-backed coup led by Pinochet. Shortly after, Pinochet ordered the drafting of a new constitution that embodied his views for Chile’s future. In 1980, the new constitution was ratified after a questionable plebiscite that “did not have electoral records,” as EFE notes. 

The new constitution was heavily influenced by the economic philosophy of neoliberal pioneers Friedrich Hayek, Milton Friedman, and James Buchanan. They viewed the constitution as a necessary means to “limit sovereign states, anchor economic freedoms and protect markets from democratic pressures for greater equality” to institutionalize and uphold their neoliberal agenda. Hayek even dubbed Chile as “one of the great economic miracles of our time.” The millions who drew the short end of the privatization stick saw this as anything but a miracle. 

Some historians of Chile’s economy separate the Pinochet era into, roughly, two periods: 1973–1982, and 1982–1990. In the former, the “Chicago Boys,” a group of Chilean economists educated at the University of Chicago under Milton Friedman and Arnold Harberger, rolled out neoliberal reforms — privatization, deregulation, and decreased government spending. A subsequent economic crisis in 1982 forced the military dictatorship to renationalize (temporarily) the Chilean banking system, reverse various liberalization reforms, and reintroduce regulations in the financial sector. By 1990, GDP per capita recovered to $2,494.527, nearly reaching the same levels as in 1981, $2,979.608. It wasn’t until after the nation’s transition to democracy in the 1990s that center-left governments began to implement tax reforms and social programs to reduce unemployment and poverty. 

Even with these reforms, Chile remains one of the most unequal countries among wealthy nations, where “the income of the richest [is] 13.6 times greater than those of the poorest.” Ultimately, the 1980 constitution provided the foundation for policies that prioritized business interests over the well-being and health of Chile’s citizens. Rewriting the constitution has been an ongoing battle for Chileans. In her 2013 presidential bid, former President Michelle Bachelet campaigned on the promise of a new constitution and unsuccessfully pushed legislation to initiate the process of a rewrite just five days before she left office in 2018. Failed attempts and growing inequality led Chileans to take to the streets in 2019. It was both an “awakening” and continued fight against deep-rooted ideologies and policies that were never intended to benefit the majority of Chileans.

The Referendum and Constitutional Convention 

In an attempt to quell the protests, Chile’s right-wing president, Sebastian Piñera, sent in the military and reversed the subway price increase, along with promising higher pensions, better health care coverage, and tax reform. But Chileans weren’t convinced that another round of patchy social programs and empty promises would address their needs. To appease protesters, the Piñera administration agreed to hold a referendum. It asked the Chilean people two questions: Do you want a new constitution? And if yes, who should write it: a combination of parliament members and popularly elected members, or exclusively popularly elected members?

An overwhelming 78 percent of Chileans who participated in the referendum voted “yes” to drafting a new constitution, and 79 percent wanted an exclusively popularly elected body to do it. The Constitutional Convention (CC), responsible for drafting the new constitution, is made up of 155 members, with an equal number of men and women, and with 17 seats reserved for Indigenous peoples. While there is much work to be done, ensuring Indigenous representation and gender parity was a step in the right direction for the CC, especially as the current constitution is the only one in Latin America that does not recognize Indigenous peoples.

The Piñera administration declared the CC would need a two-thirds majority to approve any new constitutional articles. In an astonishing victory, independent, anti-elite, and left-leaning candidates won a majority of seats in the Convention, defeating members of Piñera’s Chile Vamos party and the center-right coalition who ended up with only 37 out of 155 seats. 

The CC convened in July and will have nine months to rewrite the constitution, with a three-month extension period if needed. Chileans will then vote to approve or reject the new constitution in an “exit referendum.” If approved, the new constitution will be put into effect immediately; if rejected, the current constitution will remain. Critics of the CC argue the constitution has transformed over the years, making it distinct from its ties to the military dictatorship, but proponents claim much of the document is intact and must be rewritten to truly address the demands of protesters.

Impact of the 1980 Constitution

The independent, antiestablishment CC members have wide-ranging goals, shaped by their understanding of how the 1980 constitution continues to impact Chilean society and stifle progressive reforms. The 1980 constitution consolidated the power of the president, strengthened the civil-military relationship, restricted political freedoms, and established a new neoliberal social and economic order by giving the state a subsidiary role and enabling private entities to take control of essential industries — including education, health care, and water. 

According to Martín Arias-Loyola, the current constitution equates “freedom with private property, free enterprise and individual rights,” resulting in the privatization of education, health care, water, and the pension system, among a multitude of other sectors. Chilean political scientist Claudia Heiss explains that the constitution does this by guaranteeing citizens “freedoms” rather than “rights.” Chileans have the “freedom” to health care and higher education, but rights to these are not guaranteed under the constitution. In short: if you can pay, the privilege is all yours. The grievances of the Estallido Social and previous student, Indigenous, and feminist-led protests boil down to one main demand: social protection. Instead of overhauling the status quo in order to guarantee such protection, past governments only implemented ad hoc social programs and policies to address the system’s failings. 

Beyond the content of the text, the constitution was designed to be difficult to change. Conservative constitutional lawyer Jaime Guzmán played a role in ensuring that the right wing had the power to prevent any major reforms, thus maintaining the status quo that Pinochet wanted to uphold. Guzmán states the constitution “must ensure that if the adversaries come to govern, they are constrained to follow an action not so different from what one would hope for …” In an attempt to neutralize adversaries, any changes to the constitution had to be made by more than a majority, giving the right wing veto power. While Heiss hopes to see both the dogmatic (i.e., pertaining to rights) and the organic (i.e., distribution of power) sections of the constitution addressed in the rewriting, she argues that more attention should focus on changing the organic parts to rework the distribution of power.

Changes to the 1980 Constitution

While the constitution has undergone many reforms since Chile’s return to democracy in 1990, Contexto, a group of organizations analyzing and encouraging public participation in the constitutional process, finds that at least 43 percent of the constitution remains the same as the 1980 version. The most harmful legacies of the 1980 constitution pertain to education, health care, water rights, transportation, reproductive rights, the pension system, and police reform. New policies in all these areas were implemented in accordance with the 1980 constitution. 

For example, prior to Pinochet, Chile had a state-run centralized education system. Pinochet decentralized the system by giving municipalities control, created new rules for funding public education, and imposed further deregulation, resulting in a 50 percent increase in private schools financed with public funds between 1980 and 1990. The privatization and segregation of education resulted in a massive opportunity gap for primary and secondary school students. Higher education also became a for-profit industry, attainable almost exclusively for wealthy families who can afford to send their children to private universities or to receive high quality primary and secondary education, which can set them up for acceptance into academically competitive public universities.

Another legacy rooted in the 1980 constitution is the denial of reproductive rights. Guzmán drafted a “right-to-life clause” in the 1980 constitution, and helped pass legislation in 1989 that effectively banned abortion. A landmark ruling in 2017 “decriminalized abortion under three circumstances: if the life of the pregnant woman or girl is at risk; if the pregnancy is the result of rape; or if the fetus suffers severe conditions not compatible with life outside of the womb.” However, there is still a concession that allows doctors to deny patients abortion services on moral grounds, with the exception of life-threatening cases. While commendable, it is only a small step toward securing reproductive rights in Chile.

Some critics of the CC argue the constitution has been substantially modified over the past 40 years. In 2005, President Ricardo Lagos declared that after 54 modifications to the constitution, Chile had broken from the military dictatorship and would no longer follow a document that divides the Chilean people. Some positive changes include declaring “men and women are equal before the law” (No.2); guaranteed state legal representation for defendants (No.3); guarantees of political pluralism (No.15); and increases in the right to primary and secondary education (No.10). While these and other changes influenced the state’s role and provided a degree of greater social protection, there are 16 rights that remain the same in relation to the “moral life of citizens and economic development,” as Contexto describes it.

Regardless of the modifications, the real-world impacts and social relations established by the constitution continue to dominate Chilean society long after its transition from dictatorship to democracy in the 1990s. Jonathan Barton argues the authoritarian capitalist state became a democratic capitalist state, maintaining Pinochet’s vision of Chile as emulated in his constitution. In other words, regime change did not include structural economic change. Neoliberalism’s beneficiaries kept control of the means of production, and with inadequate state-provided social protection, Chile continues to be one of the most unequal countries in the region. Chile’s institutions and established social relations kept the Pinochet-era constitution — and neoliberalism — alive, despite some tweaks.

Objectives of the Constitutional Convention 

Despite the modifications made over the years, the constitution has failed to meet the demands of most Chileans. The CC’s left-leaning members are pushing for “ending the subsidiary role of the state, overcoming the extractivist economy, recovering lands for native peoples, plurinationality, recovering labor rights, establishing food sovereignty, changing the pension system and establishing the right to quality public education, among other issues.” The minority of right-wing members from Vamos por Chile, hope to uphold the status quo of a private sector-dominated economy and the “freedoms” outlined in the current constitution. This includes protecting the freedoms of private economic activity and maintaining the central bank’s autonomy.  

However, the CC is not composed of two distinct, cohesive left and right blocs. There are idiosyncratic coalitions and independents, and constant shifting, of both “left” and “right” blocs, that has resulted in no one coalition having a supermajority. The most contentious divides within and among the various blocs include changes to private land, water rights, education, and the pension system. 

What’s next for Chile?

It is unclear yet what this all means for Chile, for the region, for women, for Indigenous peoples, and for other marginalized groups. Some warn that the CC already is not living up to progressives’ expectations. While the popular demand for rewriting the constitution in itself debunks the Chilean neoliberal “miracle,” the success of a new constitution would play a crucial role in fundamentally challenging the status quo. If successful, Chile would no longer have to work within the constraints of the current economic order, and could reimagine a new social formation that promotes collective values and secures rights to education, health care, and water, among others. This reimagining could offer momentum for other countries to follow suit, as already seen in the new constitutions of Bolivia and Ecuador that prioritized Indigenous rights over a decade ago. In addition, the process by which the CC was created can act as a model for other countries to fairly and justly rewrite their constitutions, namely by ensuring gender parity and Indigenous representation in the constituent assemblies.

Without downplaying its importance, the constitution would not, of course, be a panacea to Chile’s deeply entrenched social divisions, racism, sexism, and inequity. The established social relations and geographic divides among the winners and losers of economic growth persist. Constitutional changes must be accompanied by behavioral change and new legislation to provide social protections and wealth redistribution. Therefore, the winner of Sunday’s presidential elections — and the subsequent second round between the top two candidates, scheduled for December 19 — will largely determine how impactful a new constitution could be, as it would be enacted during their time in office. Moreover, the CC’s autonomous status will be put under political pressure with a new president, potentially derailing or uplifting its goals. While a new constitution’s historic impact would not be known for years to come, the 2019 Estallido Social protesters have undeniably left their mark on Chile, and signaled to the world their determination to overhaul a system that institutionalized economic disparities. 

After a long holiday, and President Guillermo Lasso’s attendance at the United Nations Climate Change Conference and an official visit to Spain, the Ecuadorian National Assembly readies for the release of the Pandora Papers report by the Congressional Commission investigating the president. The report looks into Mr. Lasso’s offshore dealings since 1978, and the “Pandora Papers” revelations by the International Consortium of Investigative Journalists (ICIJ). The Commission’s members meet today to review and approve the report before heading into the National Assembly plenary session.

A scathing report

A draft copy of the report, which circulated this morning — and was confirmed by various sources — is alarming for the president. Although the Commission does not have prosecutorial capabilities, its conclusions will likely result in further inquiries by the nation’s prosecutor (an investigation is already in its preliminary stages). The first part of the report establishes the role of capital flight and tax evasion in the Ecuadorian economy. It highlights the extensive web of offshore entities by the president and the Ecuadorian elite, and reveals conflicts of interest between public office and billionaire politicians.

The Commission’s recommendations to prosecute include the legal bases of perjury, bank fraud, and tax evasion, among others.

Aside from the ethics and the universal discussion around tax havens, the Commission’s report centers around a critical element: did Mr. Lasso break the law, known as the Ethical Agreement Law, which prohibits candidates and public officials from owning, directly or indirectly, assets or holdings in jurisdictions that Ecuador considers to be tax havens? The law stems from a 2017 referendum that resulted in an amendment to the electoral law (Código de la Democracia), including the inability to register as a candidate while exerting indirect property of an offshore entity. Indirect property is loosely defined to include being an officer, beneficiary, or a member of offshore entities, but also exerting de facto control or benefit.

The Commission summoned officials from the Internal Revenue Service, the Electoral Council, the comptroller’s office, the president, his wife, and his eldest son. Mr. Lasso and his family rejected the invitation to appear before the Commission. In an interview, Mr. Lasso labeled the congressional investigation an ideological circus.” As for officials, their appearances made headlines, not because of the information revealed but by a lack of transparency. Invoking the need for express consent by Mr. Lasso, the Commission did not have access to certain tax filings and other relevant information. Mr. Lasso, in a televised address, wrongly stated that he had lifted confidential restrictions.

Lasso’s offshore accounts come full circle.

In 2017, gearing up to his second run for the presidency, Mr. Lasso made significant offshore moves by merging, name changing, dissolving, transferring, and opening new entities, mainly as a political move to fight off the referendum. He lost to Lenín Moreno.

By 2020, with the new law in effect, Mr. Lasso, with the help of Trident Group, engineered a new organization of his assets abroad. The unearthed trusts revealed in the Pandora Papers establish that two South Dakota trusts, Bretten Trust and Liberty US Trust, were used to hold the dissolved companies and assets. Mr. Lasso and his lawyers contend that he does not have control over those trusts. However, South Dakota trust legislation allows for other possibilities of de facto control, such as by a trust protector, an investment advisor, or a family advisor.

Among the dozens of companies in Ecuador and overseas, five entities stand out in the congressional report: Banisi S.A., Banisi Holdings S.A., Banisi International Foundation, Barberini Foundation, and Pietro Overseas S.A. Mr. Lasso’s children are the beneficiaries of Banisi International Foundation. The report substantiates that Pietro Overseas S.A. transferred its shares of Banisi Holdings S.A., which owns Banisi S.A., to the Banisi International Foundation after September 10, 2020.

According to the report, the Banking Law of Panama mandates that the authorization to transfer shares can only become effective five business days after the filing — in this case, September 17, 2020. This is a crucial date, since on September 14, 2020, Mr. Lasso dissolved Pietro Overseas S.A. The report questions whether a dissolved entity can transfer its shares, and points to a probable simulation and that even though the Banisi Holding S.A. shares are in a private interest foundation, Lasso still exerts indirect control over those shares.

Another key finding is the role of the Barberini Foundation. The ICIJ released Barberinis operating agreement, which designated Mr. Lasso as “protector” of the foundation. Barberini owned Pietro Overseas S.A. This scheme, the report states, can determine whether Mr. Lasso is the indirect owner of the company that owned Banisi Bank in Panama, and would therefore have broken the law.

What’s next?

It’s a complicated scenario. The official stance seems to be to want to run out the clock and take advantage of the complexity of the offshore scheme for the general public. The report’s release will only increase calls for a complete investigation — an investigation that would likely expand to Mr. Lasso’s family and inner circle.

After a long holiday, and President Guillermo Lasso’s attendance at the United Nations Climate Change Conference and an official visit to Spain, the Ecuadorian National Assembly readies for the release of the Pandora Papers report by the Congressional Commission investigating the president. The report looks into Mr. Lasso’s offshore dealings since 1978, and the “Pandora Papers” revelations by the International Consortium of Investigative Journalists (ICIJ). The Commission’s members meet today to review and approve the report before heading into the National Assembly plenary session.

A scathing report

A draft copy of the report, which circulated this morning — and was confirmed by various sources — is alarming for the president. Although the Commission does not have prosecutorial capabilities, its conclusions will likely result in further inquiries by the nation’s prosecutor (an investigation is already in its preliminary stages). The first part of the report establishes the role of capital flight and tax evasion in the Ecuadorian economy. It highlights the extensive web of offshore entities by the president and the Ecuadorian elite, and reveals conflicts of interest between public office and billionaire politicians.

The Commission’s recommendations to prosecute include the legal bases of perjury, bank fraud, and tax evasion, among others.

Aside from the ethics and the universal discussion around tax havens, the Commission’s report centers around a critical element: did Mr. Lasso break the law, known as the Ethical Agreement Law, which prohibits candidates and public officials from owning, directly or indirectly, assets or holdings in jurisdictions that Ecuador considers to be tax havens? The law stems from a 2017 referendum that resulted in an amendment to the electoral law (Código de la Democracia), including the inability to register as a candidate while exerting indirect property of an offshore entity. Indirect property is loosely defined to include being an officer, beneficiary, or a member of offshore entities, but also exerting de facto control or benefit.

The Commission summoned officials from the Internal Revenue Service, the Electoral Council, the comptroller’s office, the president, his wife, and his eldest son. Mr. Lasso and his family rejected the invitation to appear before the Commission. In an interview, Mr. Lasso labeled the congressional investigation an ideological circus.” As for officials, their appearances made headlines, not because of the information revealed but by a lack of transparency. Invoking the need for express consent by Mr. Lasso, the Commission did not have access to certain tax filings and other relevant information. Mr. Lasso, in a televised address, wrongly stated that he had lifted confidential restrictions.

Lasso’s offshore accounts come full circle.

In 2017, gearing up to his second run for the presidency, Mr. Lasso made significant offshore moves by merging, name changing, dissolving, transferring, and opening new entities, mainly as a political move to fight off the referendum. He lost to Lenín Moreno.

By 2020, with the new law in effect, Mr. Lasso, with the help of Trident Group, engineered a new organization of his assets abroad. The unearthed trusts revealed in the Pandora Papers establish that two South Dakota trusts, Bretten Trust and Liberty US Trust, were used to hold the dissolved companies and assets. Mr. Lasso and his lawyers contend that he does not have control over those trusts. However, South Dakota trust legislation allows for other possibilities of de facto control, such as by a trust protector, an investment advisor, or a family advisor.

Among the dozens of companies in Ecuador and overseas, five entities stand out in the congressional report: Banisi S.A., Banisi Holdings S.A., Banisi International Foundation, Barberini Foundation, and Pietro Overseas S.A. Mr. Lasso’s children are the beneficiaries of Banisi International Foundation. The report substantiates that Pietro Overseas S.A. transferred its shares of Banisi Holdings S.A., which owns Banisi S.A., to the Banisi International Foundation after September 10, 2020.

According to the report, the Banking Law of Panama mandates that the authorization to transfer shares can only become effective five business days after the filing — in this case, September 17, 2020. This is a crucial date, since on September 14, 2020, Mr. Lasso dissolved Pietro Overseas S.A. The report questions whether a dissolved entity can transfer its shares, and points to a probable simulation and that even though the Banisi Holding S.A. shares are in a private interest foundation, Lasso still exerts indirect control over those shares.

Another key finding is the role of the Barberini Foundation. The ICIJ released Barberinis operating agreement, which designated Mr. Lasso as “protector” of the foundation. Barberini owned Pietro Overseas S.A. This scheme, the report states, can determine whether Mr. Lasso is the indirect owner of the company that owned Banisi Bank in Panama, and would therefore have broken the law.

What’s next?

It’s a complicated scenario. The official stance seems to be to want to run out the clock and take advantage of the complexity of the offshore scheme for the general public. The report’s release will only increase calls for a complete investigation — an investigation that would likely expand to Mr. Lasso’s family and inner circle.

On August 23, 2021, the International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to its members to add liquidity to the global economy during the unprecedented health and economic crises caused by COVID-19. SDRs, which are an international reserve asset, can be exchanged for hard currency or donated among member countries, meaning the injection by the IMF can be used by governments to stabilize their currencies and shore up their reserves, or for a number of social or health policies — the latter being an especially important use for SDRs during the pandemic, as IMF Managing Director Kristalina Georgieva has said.


Based on the IMF’s August 31 accounting of SDR holdings at the SDR Department as well as media reporting on member countries, we can get a preliminary sense of what countries immediately used the additional allocation of SDRs and for what purposes. Not all uses of SDRs involve operations at the SDR Department that modify member countries’ SDR holdings; some are domestic operations leveraged on SDR holdings. These types of operations will be discussed in upcoming articles. 

Key takeaways from this month’s data:

  • This analysis of the first available data from the IMF demonstrates that several countries immediately exchanged large portions of their share of the new $650 billion allocation for hard currencies. $1.6 billion worth of SDR transactions took place.
  • Countries that exchanged SDRs for hard currencies cited liquidity problems, dwindling foreign exchange reserves and a need for more imports, and a desire to implement measures to address the pandemic.
  • Several richer countries, including some with Voluntary Trading Agreements with the IMF, exchanged hard currencies for SDRs.
  • Many countries expressed that SDRs improved their financial position, increased investor confidence, or that they were developing plans to exchange SDRs for certain uses, but had not exchanged SDRs for hard currencies as of the August 31 IMF data release. These are countries to watch in future months.
  • There was a net total of $1.614 billion worth of SDRs exchanged in the last week in August.

The $650 billion allocation of SDRs, based on this preliminary data, appears to be a success. It is worth noting that in the US Congress there are calls and legislation (which has already passed the US House of Representatives again this year) in support of an additional allocation of SDRs — about $2.2 trillion worth of additional SDRs, which would bring the total issuance up to the amount that was twice approved by the US House of Representatives last year.

Note that there is an upcoming event on October 4, Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery, co-sponsored by CEPR and other organizations and featuring introductory remarks by IMF Managing Director Kristalina Georgieva.


IMF Data: SDR accounts with large decreases

While reductions usually imply an exchange of SDRs for hard currency, decreases in SDR holdings may also result from a payment in SDRs to the IMF for a loan or a transaction (such as a deposit) with a prescribed holder of SDRs. Countries may also lend SDRs to each other.

There was a net total of $1.614 billion worth of SDRs exchanged in the last week in August.

Chad and the Republic of Congo
Collective decrease of $253 million (representing a 100 percent and a 27.9 percent reduction of new SDR allocations, respectively)

Chad and the Republic of Congo had significant decreases in holdings that exactly match an increase in holdings of their common regional central bank, the Bank of Central African States (BEAC, its acronym in French). The IMF can qualify supranational monetary or financial institutions as “prescribed holders,” i.e. entities that can also have accounts at the SDR Department and engage in transactions with SDRs. BEAC is a prescribed holder. 

While Chad delivered 100 percent of its new $191 million SDR allocation to the BEAC, the Republic of Congo only delivered 27.9 percent of its new $221 million SDR holdings to the BEAC. Other BEAC member countries did not show significant movements as of August 31.  

Bosnia and Herzegovina
$362 million decline (representing a 100 percent reduction of its new $362 million allocation) 

Bosnia and Herzegovina had a net decrease of $362 million worth of SDRs, which represented 100 percent of its new allocation of about $362 million. Approximately $120 million of the allocation was distributed by the Federation of Bosnia and Herzegovina to regional governments for reforms, infrastructure, and social and health programs to combat the pandemic. The Republika Srpska receivedabout $120 million as well, which was used to support a budget that includes increases in social spending. 

Comoros
$24.2 million decline (99.7 percent reduction of $24.3 million allocation)

Comoros had a net decrease of virtually all of the $24.3 million worth of SDRs in the new allocation. There are few details on the use, although the government recently announced measures to address a dire food crisis in the country. In 2020, Comoros received a disbursement under the IMF’s Rapid Credit Facility and used the Rapid Financing Instrument to meet urgent financial needs. 

Antigua and Barbuda
$27.1 million decline (99.1 percent reduction of $27.3 million allocation)

Antigua and Barbuda saw a decrease in SDR holdings of about $27.1 million, which represented the vast majority of its $27.3 million allocation worth of SDRs. There are no details on what specifically the liquidity would be used for. Antigua and Barbuda was considering an IMF program earlier this year due to challenges from the pandemic, and just recently was categorized as “highest risk” for COVID-19 by the American Centers for Disease Control. Given the importance of tourism to the economy and that Americans historically represent a large number of tourists, the CDC’s categorization could have an impact on the country’s financial stability.

Sri Lanka
$673 million decline (85.2 percent reduction of $790.1 million allocation)

Sri Lanka received $790.1 million worth of SDRs in the allocation and saw a reduction of 85.2 percent, or nearly $673 million. A loss of tourist income during the pandemic was one of the reasons that Sri Lanka sharply reduced imports, as it faced dwindling foreign exchange reserves. Sri Lanka’s exchange of SDRs improved the situation significantly in the near term, with reserves rising 26 percent to $3.55 billion. This is especially important given the importance of food imports to the country.

The Bank of International Settlements
$76.4 million decline (3.3 percent reduction of previous SDR holdings)

The Bank of International Settlements (BIS) is a prescribed holder. It does not receive SDRs when allocated, but it may transact in SDRs with other prescribed holders or with member countries. In the case of the BIS, it is possible that this decline was a portfolio diversification strategy.

Other notable accounts:

  • Nauru. $1.1 million decline (22.4 percent reduction of $4.9 million SDR allocation)
  • Albania. $25.1 million decline (13.2 percent reduction of $190.1 million SDR allocation)

IMF Data: SDR accounts with large increases in excess of the new allocation

These countries likely exchanged hard currencies for SDRs, or in some cases, could have received a loan of SDRs from other countries. Alternatively, they could have accepted SDRs as payment for previous loans.

The IMF has reached Voluntary Trading Arrangements (VTA) for SDRs with several entities: Australia, China, Japan, Korea, New Zealand; the European Central Bank, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Malta, the Netherlands, Norway, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom; Canada, Chile, Mexico, United States; and Saudi Arabia. Therefore, these countries will likely show increases in their holdings to fulfill the requests of those countries whose holdings have decreased. Conversely, countries not on this list with increases in SDR holdings are candidates for other types of transactions. 

In the first week after the SDRs were allocated, countries with Voluntary Trading Arrangements collectively purchased $1.16 billion in SDRs.

  • Canada. $385.1 million increase over new allocation
  • Mexico. $273.8 million increase
  • France. $151 million increase
  • Italy. $144.9 million increase
  • Portugal. $77.2 million increase
  • Chile. $64.1 million increase
  • Switzerland. $27.4 million increase
  • Cyprus. $24.2 million increase

These countries’ total holdings of SDRs was worth $128.6 billion. They increased their total SDR holdings by less than 1 percent.

IMF General Resources Account
Significantly increased its SDR holdings on August 5

A few weeks before the SDRs were allocated, the IMF received SDR payments corresponding to previous loans from several countries: Argentina ($347 million), Egypt ($134 million), Ukraine ($63 million), and others. It is important to remember that no SDRs are allocated to the IMF. After the allocation, the IMF’s SDR holdings did not increase significantly. It is expected that major increases will take place in November, considering the projected payment schedules to the IMF.

Trinidad and Tobago
$110 million increase (17.1 percent increase in excess of $641 million allocation)

It is possible that some countries, such as Trinidad and Tobago, received SDRs over their allocation as a transfer (loan or donation) from other countries. In this case, the SDR amounts point to a loan in SDRs from another country, possibly to purchase vaccines. Trinidad and Tobago had indicated the liquidity from the recently allocated SDRs could be used to support export sectors, indicating the country may draw down SDRs for hard currency. 

Ghana
$12 million increase (representing a 1.2 percent increase in excess of its new $1 billion allocation)

Ghana has stated SDRs will be used for a post-pandemic recovery program. It is possible Ghana purchased SDRs from New Zealand, a VTA country, to pay its September 8, 2021 Poverty Reduction and Growth Trust loan installment to the IMF for $12 million. The amounts match almost exactly. 


Countries to watch

Many countries expressed that SDRs improved their financial position, increased investor confidence, or that they were developing plans to exchange SDRs for certain uses, but had not exchanged SDRs for hard currencies as of the August 31 IMF data release. These are countries to watch in future months.

On August 23, 2021, the International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to its members to add liquidity to the global economy during the unprecedented health and economic crises caused by COVID-19. SDRs, which are an international reserve asset, can be exchanged for hard currency or donated among member countries, meaning the injection by the IMF can be used by governments to stabilize their currencies and shore up their reserves, or for a number of social or health policies — the latter being an especially important use for SDRs during the pandemic, as IMF Managing Director Kristalina Georgieva has said.


Based on the IMF’s August 31 accounting of SDR holdings at the SDR Department as well as media reporting on member countries, we can get a preliminary sense of what countries immediately used the additional allocation of SDRs and for what purposes. Not all uses of SDRs involve operations at the SDR Department that modify member countries’ SDR holdings; some are domestic operations leveraged on SDR holdings. These types of operations will be discussed in upcoming articles. 

Key takeaways from this month’s data:

  • This analysis of the first available data from the IMF demonstrates that several countries immediately exchanged large portions of their share of the new $650 billion allocation for hard currencies. $1.6 billion worth of SDR transactions took place.
  • Countries that exchanged SDRs for hard currencies cited liquidity problems, dwindling foreign exchange reserves and a need for more imports, and a desire to implement measures to address the pandemic.
  • Several richer countries, including some with Voluntary Trading Agreements with the IMF, exchanged hard currencies for SDRs.
  • Many countries expressed that SDRs improved their financial position, increased investor confidence, or that they were developing plans to exchange SDRs for certain uses, but had not exchanged SDRs for hard currencies as of the August 31 IMF data release. These are countries to watch in future months.
  • There was a net total of $1.614 billion worth of SDRs exchanged in the last week in August.

The $650 billion allocation of SDRs, based on this preliminary data, appears to be a success. It is worth noting that in the US Congress there are calls and legislation (which has already passed the US House of Representatives again this year) in support of an additional allocation of SDRs — about $2.2 trillion worth of additional SDRs, which would bring the total issuance up to the amount that was twice approved by the US House of Representatives last year.

Note that there is an upcoming event on October 4, Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery, co-sponsored by CEPR and other organizations and featuring introductory remarks by IMF Managing Director Kristalina Georgieva.


IMF Data: SDR accounts with large decreases

While reductions usually imply an exchange of SDRs for hard currency, decreases in SDR holdings may also result from a payment in SDRs to the IMF for a loan or a transaction (such as a deposit) with a prescribed holder of SDRs. Countries may also lend SDRs to each other.

There was a net total of $1.614 billion worth of SDRs exchanged in the last week in August.

Chad and the Republic of Congo
Collective decrease of $253 million (representing a 100 percent and a 27.9 percent reduction of new SDR allocations, respectively)

Chad and the Republic of Congo had significant decreases in holdings that exactly match an increase in holdings of their common regional central bank, the Bank of Central African States (BEAC, its acronym in French). The IMF can qualify supranational monetary or financial institutions as “prescribed holders,” i.e. entities that can also have accounts at the SDR Department and engage in transactions with SDRs. BEAC is a prescribed holder. 

While Chad delivered 100 percent of its new $191 million SDR allocation to the BEAC, the Republic of Congo only delivered 27.9 percent of its new $221 million SDR holdings to the BEAC. Other BEAC member countries did not show significant movements as of August 31.  

Bosnia and Herzegovina
$362 million decline (representing a 100 percent reduction of its new $362 million allocation) 

Bosnia and Herzegovina had a net decrease of $362 million worth of SDRs, which represented 100 percent of its new allocation of about $362 million. Approximately $120 million of the allocation was distributed by the Federation of Bosnia and Herzegovina to regional governments for reforms, infrastructure, and social and health programs to combat the pandemic. The Republika Srpska receivedabout $120 million as well, which was used to support a budget that includes increases in social spending. 

Comoros
$24.2 million decline (99.7 percent reduction of $24.3 million allocation)

Comoros had a net decrease of virtually all of the $24.3 million worth of SDRs in the new allocation. There are few details on the use, although the government recently announced measures to address a dire food crisis in the country. In 2020, Comoros received a disbursement under the IMF’s Rapid Credit Facility and used the Rapid Financing Instrument to meet urgent financial needs. 

Antigua and Barbuda
$27.1 million decline (99.1 percent reduction of $27.3 million allocation)

Antigua and Barbuda saw a decrease in SDR holdings of about $27.1 million, which represented the vast majority of its $27.3 million allocation worth of SDRs. There are no details on what specifically the liquidity would be used for. Antigua and Barbuda was considering an IMF program earlier this year due to challenges from the pandemic, and just recently was categorized as “highest risk” for COVID-19 by the American Centers for Disease Control. Given the importance of tourism to the economy and that Americans historically represent a large number of tourists, the CDC’s categorization could have an impact on the country’s financial stability.

Sri Lanka
$673 million decline (85.2 percent reduction of $790.1 million allocation)

Sri Lanka received $790.1 million worth of SDRs in the allocation and saw a reduction of 85.2 percent, or nearly $673 million. A loss of tourist income during the pandemic was one of the reasons that Sri Lanka sharply reduced imports, as it faced dwindling foreign exchange reserves. Sri Lanka’s exchange of SDRs improved the situation significantly in the near term, with reserves rising 26 percent to $3.55 billion. This is especially important given the importance of food imports to the country.

The Bank of International Settlements
$76.4 million decline (3.3 percent reduction of previous SDR holdings)

The Bank of International Settlements (BIS) is a prescribed holder. It does not receive SDRs when allocated, but it may transact in SDRs with other prescribed holders or with member countries. In the case of the BIS, it is possible that this decline was a portfolio diversification strategy.

Other notable accounts:

  • Nauru. $1.1 million decline (22.4 percent reduction of $4.9 million SDR allocation)
  • Albania. $25.1 million decline (13.2 percent reduction of $190.1 million SDR allocation)

IMF Data: SDR accounts with large increases in excess of the new allocation

These countries likely exchanged hard currencies for SDRs, or in some cases, could have received a loan of SDRs from other countries. Alternatively, they could have accepted SDRs as payment for previous loans.

The IMF has reached Voluntary Trading Arrangements (VTA) for SDRs with several entities: Australia, China, Japan, Korea, New Zealand; the European Central Bank, Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Malta, the Netherlands, Norway, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom; Canada, Chile, Mexico, United States; and Saudi Arabia. Therefore, these countries will likely show increases in their holdings to fulfill the requests of those countries whose holdings have decreased. Conversely, countries not on this list with increases in SDR holdings are candidates for other types of transactions. 

In the first week after the SDRs were allocated, countries with Voluntary Trading Arrangements collectively purchased $1.16 billion in SDRs.

  • Canada. $385.1 million increase over new allocation
  • Mexico. $273.8 million increase
  • France. $151 million increase
  • Italy. $144.9 million increase
  • Portugal. $77.2 million increase
  • Chile. $64.1 million increase
  • Switzerland. $27.4 million increase
  • Cyprus. $24.2 million increase

These countries’ total holdings of SDRs was worth $128.6 billion. They increased their total SDR holdings by less than 1 percent.

IMF General Resources Account
Significantly increased its SDR holdings on August 5

A few weeks before the SDRs were allocated, the IMF received SDR payments corresponding to previous loans from several countries: Argentina ($347 million), Egypt ($134 million), Ukraine ($63 million), and others. It is important to remember that no SDRs are allocated to the IMF. After the allocation, the IMF’s SDR holdings did not increase significantly. It is expected that major increases will take place in November, considering the projected payment schedules to the IMF.

Trinidad and Tobago
$110 million increase (17.1 percent increase in excess of $641 million allocation)

It is possible that some countries, such as Trinidad and Tobago, received SDRs over their allocation as a transfer (loan or donation) from other countries. In this case, the SDR amounts point to a loan in SDRs from another country, possibly to purchase vaccines. Trinidad and Tobago had indicated the liquidity from the recently allocated SDRs could be used to support export sectors, indicating the country may draw down SDRs for hard currency. 

Ghana
$12 million increase (representing a 1.2 percent increase in excess of its new $1 billion allocation)

Ghana has stated SDRs will be used for a post-pandemic recovery program. It is possible Ghana purchased SDRs from New Zealand, a VTA country, to pay its September 8, 2021 Poverty Reduction and Growth Trust loan installment to the IMF for $12 million. The amounts match almost exactly. 


Countries to watch

Many countries expressed that SDRs improved their financial position, increased investor confidence, or that they were developing plans to exchange SDRs for certain uses, but had not exchanged SDRs for hard currencies as of the August 31 IMF data release. These are countries to watch in future months.

On August 17, the Interdisciplinary Group of Independent Experts (GIEI in Spanish) released its report on human rights violations committed in the context of the 2019 coup d’état that overthrew President Evo Morales and installed the de facto government of Jeanine Áñez in Bolivia. The 468-page report, based on eight months of research, sheds light on a series of major human rights abuses committed between September and December 2019.

Among its many findings, the report clearly establishes that “massacres” were perpetrated by Bolivian state security forces in the communities of Senkata and Sacaba. The report also includes a number of recommendations regarding the treatment of victims, calls for those responsible for human rights violations to be held accountable, and stresses the need for a greater autonomy and depoliticization of the Bolivian judiciary. Many of the report’s recommendations seek to address structural issues, including the pervasive racism in both the Bolivian state and in Bolivian society. The report concludes “that the [2019] violence had a racial and anti-indigenous character, and that the security forces used excessive or disproportionate force and did not adequately prevent acts of violence.”[1]

In the preliminary section of the GIEI report, which provides general background on the events that preceded the Senkata and Sacaba massacres, the authors clearly identify the audit of the 2019 elections carried out by the Organization of American States (OAS) as a major factor that contributed to the political crisis that led to the forced resignation of President Morales and the installment of Jeanine Añez as de facto president. The report states:

The worsening of the crisis was marked by multiple events, including the police riot, the publication of the preliminary report of the results of the audit of the Organization of American States (OAS) and the statements of the commanders of the Armed Forces and the Police to pressure the resignation of Evo Morales.

The OAS’s delegitimization of the outcome of the 2019 elections in Bolivia was debunked by dozens of statisticians, and in-depth reports and academic papers from researchers at CEPR and by scholars from the MIT and the University of Pennsylvania and the University of Tulane, whose findings were eventually published in The Washington Post and The New York Times, respectively. 

A June 2020 New York Times article stated that the OAS’s claims “heightened doubts about the fairness of the vote and fueled a chain of events that changed the South American nation’s history. The opposition seized on the claim to escalate protests, gather international support, and push Mr. Morales from power with military support weeks later.”

The OAS’s flawed claims were not just used to justify the forced removal of Morales. As the GIEI report shows, they also served to justify the criminalization of electoral officials — both former members of the Supreme Electoral Tribunal (TSE), in charge of overseeing elections nationwide, and former members of the Departmental Electoral Tribunals (TEDs).

Whereas the GIEI report clearly establishes that “the GIEI does not have the mandate nor does it qualify, as valid or invalid, the October 2019 election,” it does show how the OAS’s accusations of fraud helped pave the way for “the human rights violations that were committed against the election officials in the context of the process of alleged electoral fraud.”

The GIEI report finds that “as a general rule, the accusations [against electoral officials] were based on the preliminary report of the OAS, which did not attribute individual responsibility, as well as on information obtained in the media, on statements of the persons detained and, in a few cases, on some testimonies of electoral officials. The detention of all the electoral officials was a generalized measure lacking objective motivation, applied without prior investigation.”

The GIEI report describes how on November 10, the day that the OAS published its preliminary audit report, and the day of the coup d’état, “… the Prosecutor General’s Office … initiated the ex officio prosecution of the members of the Supreme Electoral Tribunal (TSE)” based on “the conclusions of the OAS Preliminary Report.” The GIEI report also cites a statement from the Prosecutor General’s Office that states:

… in view of the report issued by the Organization of American States […]: [the Prosecutor General’s Office] has INSTRUCTED the Departmental Prosecutor’s Office of La Paz, early this morning, to IMMEDIATELY START ALL CORRESPONDING LEGAL ACTIONS for the prosecution and trial of the members of the Supreme Electoral Tribunal and other authors and participants of these alleged irregular acts. … Likewise, the nine departmental prosecutors of the country have been instructed to immediately initiate criminal actions against the members and public servants of the Departmental Electoral Tribunals.

The GIEI report describes how “an investigation was opened against the president of the TSE, María Eugenia Choque Quispe, and others, for the alleged commission of the electoral crimes of forging documents or use of forged documents, computer manipulation, alteration and concealment of results,” as well as a long list of other crimes, including violating Bolivia’s laws and constitution. Choque was arrested a few hours after the OAS preliminary audit report was published, alongside the other members of the TSE: Antonio José Iván Costas Sitic, Lucy Cruz Vilca, Lidia Iriarte Tórrez, Idelfonso Mamani Romero, and Edgar Gonzales López.

The GIEI report recalls that “in a press conference at the police headquarters, the recently apprehended María Eugenia Choque and Antonio José Iván Costas Sitic, president and vice-president of the TSE, respectively, were shown handcuffed.” They were paraded as trophies in a live press conference, looking confused and restrained in images that could only be described as deeply disturbing. Costas held a heap of prison blankets. 

The GIEI report finds that, in Santa Cruz, “most of the [TED] members were deprived of their freedom for periods ranging from one to eight months, until they were granted alternative measures to incarceration.” The GIEI also notes: 

The proceedings against the members of the departmental tribunals were dismissed in March 2021 because of ‘insufficient evidence to support the accusation.’ However, in the case of the TSE officials, as of July 2021, almost all of them were still under alternative measures to pretrial detention, including house arrest without authorization to leave the premises and with work restrictions, freezing of accounts and asset seizure.

The GIEI report also denounces the “various irregularities and arbitrariness on the part of the Prosecutor’s Office, the police and the judicial authorities” in the prosecution of the presidents of the TSE and the nine departmental electoral tribunals (TEDs). The GIEI criticized the “lack of objective criteria in the determination of [the electoral authorities’] legal situation, the treatment they received from the authorities, and the serious procedural irregularities that hindered their right to due process and the presumption of innocence. The same pattern of persecution was identified in basically all cases against election officials in the country.”

The GIEI report finds that the Bolivian police, which mutinied against the Morales government on November 8, 2019, played a central role along with the Prosecutor General’s Office in the persecution and intimidation of election officials, going as far as exerting pressures to force the resignation of a number of the members of the electoral tribunals. The report establishes that:

…the police did not intervene in the face of the threats and the burning of the facilities of several departmental tribunals [TEDs], which considerably affected personnel, property, and electoral material. Nor did it intervene in the persecution and public harassment that took place against the members [of the TEDs] until November 10. Among other events, it is worth mentioning what happened in Chuquisaca, where, when a group of people arrived at the TED to burn it down, the electoral personnel had to escape from the building by jumping over a wall to a neighboring building. The election officials remained hidden in a mezzanine until the following morning when they were rescued by their acquaintances. Most of the election officials interviewed told the GIEI that they decided to leave their homes due to the threats in the media of an attempt on their lives and property.

On [November] 10th and the following days, most of the departmental electoral officials were arrested. It is noteworthy that almost all of the officials interviewed reported having received aggressive and discriminatory treatment since their arrival at the police or Prosecutor’s Office. Similarly, all were deprived of their freedom until they were presented before the judicial authority for the hearing of precautionary measures and during this time were subjected to degrading conditions of incarceration. The prison authorities did not grant them sanitary privacy, did not take into account the preexisting health conditions of some of them, kept them in unhealthy places and intimidated them.

At this stage there was pressure from police, ministerial, and judicial authorities for the members to resign from their positions before the hearing on precautionary measures. Of the 21 people interviewed, only one said that he had not agreed to this measure [resigning], and one had already done so previously.

The OAS did nothing to prevent the persecution of former electoral officials.

It is clear, from the GIEI’s report, that Bolivia’s judicial authorities used the OAS preliminary audit report as a justification for the arrests and for the charges brought forward against Bolivia’s election officials. The GIEI report cites the La Paz Southern Zone’s First Criminal Court, which justified the charges against Bolivia’s electoral authorities by stipulating that whereas “the OAS report does not directly establish criminal responsibility,” “it is clear that this [OAS] audit report makes references to irregularities in the electoral process, as a result, there are indications that illicit acts may have arisen during the course of the elections.”

Throughout Áñez’s de facto rule, the OAS did nothing to oppose the heavy-handed treatment of former election officials. The OAS did not protest the arrest and public humiliation of the members of the TSE who had invited the OAS in good faith to come to Bolivia to act as impartial observers of their country’s elections. Nor has the OAS said anything, to date, to stop its flawed report from being used in legal proceedings against the former members of the TSE and TEDs, or to alleviate the plight of the electoral officials being tried with scant respect for due process, as the GIEI report clearly illustrates.

CEPR has highlighted in the past that the OAS went further than merely listing the irregularities that it considered invalidated the electoral results; the OAS added political and juridical opinions that clearly exceeded its mandate. In presenting the November 10 preliminary report to the OAS, Secretary General Luis Almagro declared that a “coup d’état” had occurred on October 20 in the form of “electoral fraud” in Bolivia. The December 2019 OAS final audit report and accompanying press release in particular spoke of “intentional manipulation.” The Spanish version of the same release — aimed at Latin American and particularly Bolivian audiences at a time when Bolivia’s de facto government, police, and armed forces were cracking down on the Movement Toward Socialism (MAS) opposition — used the term “manipulación dolosa.” In Spanish, “doloso” — which can be roughly translated as “fraudulent” — is used in criminal law to signify a criminal act. These claims made by the OAS in communications about its report heightened the sense of grievances felt by large sectors of Bolivian society, further polarized Bolivian politics, and set the stage for the witch hunt, incarceration, and public humiliation of election officials.

In a recent interview with the Bolivian daily Página Siete, former TSE member Antonio Costas, whose resignation from the TSE on October 21, 2019 has often been hailed by the OAS as a strong indication of wrongdoing on the TSE’s behalf, accused the OAS of being “the trigger for [the events of] that night and the night of Tuesday [October 22, 2019] when the Departmental Electoral Tribunals were burned down, and that was the responsibility of the head of the OAS Observation Mission.” Costas stated that the OAS’s 2019 election audit was “an extremely superficial report, not technical at all. It’s not an audit.” Costas also questioned whether the auditors were in fact the authors of the OAS report, and hinted at the possibility of manipulation from higher up. He raised the question of whether Secretary General Almagro could be prosecuted for being behind a report that caused “such havoc” in Bolivia.

The findings of the GIEI, which were welcomed by the United Nations Office of the High Commissioner on Human Rights, are likely to reignite calls for an investigation into the role that the OAS played in delegitimizing the 2019 elections in Bolivia and in helping to pave the way for the November 2019 coup d’état and the human rights violations that took place during Jeanine Áñez’s de facto rule.

[1] This and the following quotations from the GIEI report are this author’s translations.

On August 17, the Interdisciplinary Group of Independent Experts (GIEI in Spanish) released its report on human rights violations committed in the context of the 2019 coup d’état that overthrew President Evo Morales and installed the de facto government of Jeanine Áñez in Bolivia. The 468-page report, based on eight months of research, sheds light on a series of major human rights abuses committed between September and December 2019.

Among its many findings, the report clearly establishes that “massacres” were perpetrated by Bolivian state security forces in the communities of Senkata and Sacaba. The report also includes a number of recommendations regarding the treatment of victims, calls for those responsible for human rights violations to be held accountable, and stresses the need for a greater autonomy and depoliticization of the Bolivian judiciary. Many of the report’s recommendations seek to address structural issues, including the pervasive racism in both the Bolivian state and in Bolivian society. The report concludes “that the [2019] violence had a racial and anti-indigenous character, and that the security forces used excessive or disproportionate force and did not adequately prevent acts of violence.”[1]

In the preliminary section of the GIEI report, which provides general background on the events that preceded the Senkata and Sacaba massacres, the authors clearly identify the audit of the 2019 elections carried out by the Organization of American States (OAS) as a major factor that contributed to the political crisis that led to the forced resignation of President Morales and the installment of Jeanine Añez as de facto president. The report states:

The worsening of the crisis was marked by multiple events, including the police riot, the publication of the preliminary report of the results of the audit of the Organization of American States (OAS) and the statements of the commanders of the Armed Forces and the Police to pressure the resignation of Evo Morales.

The OAS’s delegitimization of the outcome of the 2019 elections in Bolivia was debunked by dozens of statisticians, and in-depth reports and academic papers from researchers at CEPR and by scholars from the MIT and the University of Pennsylvania and the University of Tulane, whose findings were eventually published in The Washington Post and The New York Times, respectively. 

A June 2020 New York Times article stated that the OAS’s claims “heightened doubts about the fairness of the vote and fueled a chain of events that changed the South American nation’s history. The opposition seized on the claim to escalate protests, gather international support, and push Mr. Morales from power with military support weeks later.”

The OAS’s flawed claims were not just used to justify the forced removal of Morales. As the GIEI report shows, they also served to justify the criminalization of electoral officials — both former members of the Supreme Electoral Tribunal (TSE), in charge of overseeing elections nationwide, and former members of the Departmental Electoral Tribunals (TEDs).

Whereas the GIEI report clearly establishes that “the GIEI does not have the mandate nor does it qualify, as valid or invalid, the October 2019 election,” it does show how the OAS’s accusations of fraud helped pave the way for “the human rights violations that were committed against the election officials in the context of the process of alleged electoral fraud.”

The GIEI report finds that “as a general rule, the accusations [against electoral officials] were based on the preliminary report of the OAS, which did not attribute individual responsibility, as well as on information obtained in the media, on statements of the persons detained and, in a few cases, on some testimonies of electoral officials. The detention of all the electoral officials was a generalized measure lacking objective motivation, applied without prior investigation.”

The GIEI report describes how on November 10, the day that the OAS published its preliminary audit report, and the day of the coup d’état, “… the Prosecutor General’s Office … initiated the ex officio prosecution of the members of the Supreme Electoral Tribunal (TSE)” based on “the conclusions of the OAS Preliminary Report.” The GIEI report also cites a statement from the Prosecutor General’s Office that states:

… in view of the report issued by the Organization of American States […]: [the Prosecutor General’s Office] has INSTRUCTED the Departmental Prosecutor’s Office of La Paz, early this morning, to IMMEDIATELY START ALL CORRESPONDING LEGAL ACTIONS for the prosecution and trial of the members of the Supreme Electoral Tribunal and other authors and participants of these alleged irregular acts. … Likewise, the nine departmental prosecutors of the country have been instructed to immediately initiate criminal actions against the members and public servants of the Departmental Electoral Tribunals.

The GIEI report describes how “an investigation was opened against the president of the TSE, María Eugenia Choque Quispe, and others, for the alleged commission of the electoral crimes of forging documents or use of forged documents, computer manipulation, alteration and concealment of results,” as well as a long list of other crimes, including violating Bolivia’s laws and constitution. Choque was arrested a few hours after the OAS preliminary audit report was published, alongside the other members of the TSE: Antonio José Iván Costas Sitic, Lucy Cruz Vilca, Lidia Iriarte Tórrez, Idelfonso Mamani Romero, and Edgar Gonzales López.

The GIEI report recalls that “in a press conference at the police headquarters, the recently apprehended María Eugenia Choque and Antonio José Iván Costas Sitic, president and vice-president of the TSE, respectively, were shown handcuffed.” They were paraded as trophies in a live press conference, looking confused and restrained in images that could only be described as deeply disturbing. Costas held a heap of prison blankets. 

The GIEI report finds that, in Santa Cruz, “most of the [TED] members were deprived of their freedom for periods ranging from one to eight months, until they were granted alternative measures to incarceration.” The GIEI also notes: 

The proceedings against the members of the departmental tribunals were dismissed in March 2021 because of ‘insufficient evidence to support the accusation.’ However, in the case of the TSE officials, as of July 2021, almost all of them were still under alternative measures to pretrial detention, including house arrest without authorization to leave the premises and with work restrictions, freezing of accounts and asset seizure.

The GIEI report also denounces the “various irregularities and arbitrariness on the part of the Prosecutor’s Office, the police and the judicial authorities” in the prosecution of the presidents of the TSE and the nine departmental electoral tribunals (TEDs). The GIEI criticized the “lack of objective criteria in the determination of [the electoral authorities’] legal situation, the treatment they received from the authorities, and the serious procedural irregularities that hindered their right to due process and the presumption of innocence. The same pattern of persecution was identified in basically all cases against election officials in the country.”

The GIEI report finds that the Bolivian police, which mutinied against the Morales government on November 8, 2019, played a central role along with the Prosecutor General’s Office in the persecution and intimidation of election officials, going as far as exerting pressures to force the resignation of a number of the members of the electoral tribunals. The report establishes that:

…the police did not intervene in the face of the threats and the burning of the facilities of several departmental tribunals [TEDs], which considerably affected personnel, property, and electoral material. Nor did it intervene in the persecution and public harassment that took place against the members [of the TEDs] until November 10. Among other events, it is worth mentioning what happened in Chuquisaca, where, when a group of people arrived at the TED to burn it down, the electoral personnel had to escape from the building by jumping over a wall to a neighboring building. The election officials remained hidden in a mezzanine until the following morning when they were rescued by their acquaintances. Most of the election officials interviewed told the GIEI that they decided to leave their homes due to the threats in the media of an attempt on their lives and property.

On [November] 10th and the following days, most of the departmental electoral officials were arrested. It is noteworthy that almost all of the officials interviewed reported having received aggressive and discriminatory treatment since their arrival at the police or Prosecutor’s Office. Similarly, all were deprived of their freedom until they were presented before the judicial authority for the hearing of precautionary measures and during this time were subjected to degrading conditions of incarceration. The prison authorities did not grant them sanitary privacy, did not take into account the preexisting health conditions of some of them, kept them in unhealthy places and intimidated them.

At this stage there was pressure from police, ministerial, and judicial authorities for the members to resign from their positions before the hearing on precautionary measures. Of the 21 people interviewed, only one said that he had not agreed to this measure [resigning], and one had already done so previously.

The OAS did nothing to prevent the persecution of former electoral officials.

It is clear, from the GIEI’s report, that Bolivia’s judicial authorities used the OAS preliminary audit report as a justification for the arrests and for the charges brought forward against Bolivia’s election officials. The GIEI report cites the La Paz Southern Zone’s First Criminal Court, which justified the charges against Bolivia’s electoral authorities by stipulating that whereas “the OAS report does not directly establish criminal responsibility,” “it is clear that this [OAS] audit report makes references to irregularities in the electoral process, as a result, there are indications that illicit acts may have arisen during the course of the elections.”

Throughout Áñez’s de facto rule, the OAS did nothing to oppose the heavy-handed treatment of former election officials. The OAS did not protest the arrest and public humiliation of the members of the TSE who had invited the OAS in good faith to come to Bolivia to act as impartial observers of their country’s elections. Nor has the OAS said anything, to date, to stop its flawed report from being used in legal proceedings against the former members of the TSE and TEDs, or to alleviate the plight of the electoral officials being tried with scant respect for due process, as the GIEI report clearly illustrates.

CEPR has highlighted in the past that the OAS went further than merely listing the irregularities that it considered invalidated the electoral results; the OAS added political and juridical opinions that clearly exceeded its mandate. In presenting the November 10 preliminary report to the OAS, Secretary General Luis Almagro declared that a “coup d’état” had occurred on October 20 in the form of “electoral fraud” in Bolivia. The December 2019 OAS final audit report and accompanying press release in particular spoke of “intentional manipulation.” The Spanish version of the same release — aimed at Latin American and particularly Bolivian audiences at a time when Bolivia’s de facto government, police, and armed forces were cracking down on the Movement Toward Socialism (MAS) opposition — used the term “manipulación dolosa.” In Spanish, “doloso” — which can be roughly translated as “fraudulent” — is used in criminal law to signify a criminal act. These claims made by the OAS in communications about its report heightened the sense of grievances felt by large sectors of Bolivian society, further polarized Bolivian politics, and set the stage for the witch hunt, incarceration, and public humiliation of election officials.

In a recent interview with the Bolivian daily Página Siete, former TSE member Antonio Costas, whose resignation from the TSE on October 21, 2019 has often been hailed by the OAS as a strong indication of wrongdoing on the TSE’s behalf, accused the OAS of being “the trigger for [the events of] that night and the night of Tuesday [October 22, 2019] when the Departmental Electoral Tribunals were burned down, and that was the responsibility of the head of the OAS Observation Mission.” Costas stated that the OAS’s 2019 election audit was “an extremely superficial report, not technical at all. It’s not an audit.” Costas also questioned whether the auditors were in fact the authors of the OAS report, and hinted at the possibility of manipulation from higher up. He raised the question of whether Secretary General Almagro could be prosecuted for being behind a report that caused “such havoc” in Bolivia.

The findings of the GIEI, which were welcomed by the United Nations Office of the High Commissioner on Human Rights, are likely to reignite calls for an investigation into the role that the OAS played in delegitimizing the 2019 elections in Bolivia and in helping to pave the way for the November 2019 coup d’état and the human rights violations that took place during Jeanine Áñez’s de facto rule.

[1] This and the following quotations from the GIEI report are this author’s translations.

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