The Americas Blog

El Blog de las Americas

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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Last week, humanitarian aid was at the center of discussion of the Venezuela crisis in the US, and evidently at the center of Juan Guaidó’s plans to challenge the Maduro government’s hold on power in the country. The New York Times noted that:

The battle over the legitimate leadership of Venezuela — which has included rallies of thousands, international diplomacy and oil sanctions — is now focused on a single heavily guarded shipment of humanitarian aid.

Venezuela’s opposition, which has relished a month of victories in its effort to challenge President Nicolás Maduro and take over as the country’s legitimate government, brought the donated supplies of food and medical kits to the country’s border with Colombia.

Its goal was to bring the supplies into Venezuela, forcing a confrontation with Mr. Maduro, who has refused the help. This would cast Mr. Maduro in a bad light, opposition leaders said, and display their ability to set up a government-like relief system in a nation where the crumbling economy has left many starving, sick and without access to medicine.

Meanwhile, the Red Cross and the United Nations have criticized the US approach as politicizing crucial aid and potentially undermining their ongoing work in the country. From the Associated Press:

Alexandra Boivin, ICRC delegation head for the United States and Canada, said Friday that the ICRC had told U.S. officials that whatever plans “they have to help the people of Venezuela, it has to be shielded from this political conversation.”

“It is obviously a very difficult conversation to have with the U.S.,” she said. “We are there also to make clear the risks of the path being taken, the limits of our ability to operate in such an environment.”

And Reuters reported:

“Humanitarian action needs to be independent of political, military or other objectives,” U.N. spokesman Stephane Dujarric told reporters in New York.

“When we see the present stand-off it becomes even more clear that serious political negotiations between the parties are necessary to find a solution leading to lasting peace for the people of Venezuela,” he said.

The Canadian Broadcasting Corporation explained, following investigation by Justin Emery and FAIR.org, that while the CBC and many other outlets shared photos and reports of a bridge allegedly blocked by Maduro’s government to prevent the distribution of aid, the bridge had in fact never been opened:

Over the past week or so, the image of a blockaded bridge between Colombia and Venezuela has been all over news sites around the world. It’s been featured in stories describing how the president of Venezuela, Nicolas Maduro, is keeping international food aid from his desperate citizens.

Trouble is, the photo doesn’t tell the full story…

The bridge, which spans between Cucuta, Colombia, and the town of Pedro Maria Urena in Venezuela, hadn’t been open for years. In fact, it’s never been open.

As the CBC points out, the image came from a tweet by US Secretary of State Mike Pompeo.

On Wednesday, Congressman David Cicilline (D-RI) questioned USAID Acting Assistant Administrator Steve Olive about the politicization of aid in a House Foreign Affairs Committee hearing on Venezuela:

Cicilline: …would you say that in order to provide life-saving assistance in war-zones and dangerous areas humanitarians need to be able to operate in a neutral and apolitical way?

Olive: Correct.

Cicilline: Is it true that the US through USAID is prepositioning humanitarian aid at the border with Venezuela?

Olive: Yes, we are.

Cicilline: Do you have any concerns that tying humanitarian assistance to a particular political outcome could have unintended consequences or harm our ability to deliver assistance in Venezuela or to other countries and what steps is the administration taking to ensure aid does not become a flashpoint?

Olive: Administrator Green has said we will always, as the US Government, be ready to help those in need. There are people in need in our hemisphere right now as a result of this crisis and we already are supporting them in these border areas and doing what we can to build the capacity in country to receive and distribute aid securely and efficiently and be able to monitor those distributions and that is our focus.

Researchers Tim Gill and Rebecca Hanson wrote at The Nation last week that USAID had in fact been deeply involved in fomenting and supporting the student opposition movements that developed Guaidó as a leader:

A former USAID/OTI member who helped devise US efforts in Venezuela said the “objective was that you had thousands of youth, high school, and college kids…that were horrified of this Indian-looking guy in power. They were idealistic. We wanted to help them to build a civic organization, so that they could mobilize and organize. This is different than protesting.” In other words, USAID/OTI sought to take advantage of racialized fear of Chávez to organize middle-class youth around a long-term strategy to defeat him.

How exactly did the United States help these students? One USAID/OTI contractor who worked directly with them on a routine basis revealed to Gill that Washington provided funding and training to the student groups that developed at the same time Guaidó was part of them.

The Venezuelan government alleged that a US company is shipping weapons to its opposition as a Canadian analyst spotted what he considered to be unusual cargo plane movements. McClatchy reported:

An Ottawa-based analyst of unusual ship and plane movements, Steffan Watkins, drew attention to the frequent flights of the 21 Air cargo plane in a series of tweets Thursday.

“All year, they were flying between Philadelphia and Miami and all over the place, but all continental U.S.,” Watkins said in a telephone interview. “Then all of a sudden in January, things changed.”

That’s when the cargo plane began flying to destinations in Colombia and Venezuela on a daily basis, and sometimes multiple times a day, Watkins said. The plane has made close to 40 round-trip flights from Miami International Airport to Caracas and Valencia in Venezuela, and Bogota and Medellin in Colombia since Jan. 11.

The air cargo company involved and its client denied the allegations, but 21 Air is itself linked to a company alleged by Amnesty International to have been involved in a CIA rendition program.

It’s worth noting that Elliott Abrams, the Trump administration’s special envoy to Venezuela, is notorious in part for his role in covering up the US-sponsored smuggling of arms shipments into Nicaragua under the guise of humanitarian aid. As the Los Angeles Times reported in 1987:

Oliver L. North and other Reagan Administration aides deliberately used a 1986 program of “humanitarian aid” for Nicaraguan rebels to help support the secret effort to deliver military aid to the contras , U.S. officials said Monday…

The aid was administered by the State Department’s Nicaraguan Humanitarian Assistance Office, but officials said that all significant decisions were made by a “Restricted Inter-Agency Group,” consisting of North, Assistant Secretary of State Elliott Abrams and Alan D. Fiers, chief of the CIA’s Central America Task Force.

Underlying all this discussion over humanitarian aid is the devastating impact of US sanctions on Venezuela, which were intensified last month but have been in place for years. As CEPR co-Director Mark Weisbrot wrote at The Intercept:

Though the government’s economic policies have played a role in Venezuela’s woes, the Trump sanctions have made things considerably worse since August 2017, decimating the oil industry and worsening shortages of medicine that have killed many Venezuelans. The Trump sanctions also make it nearly impossible for the government to take the necessary measures to exit from hyperinflation and depression.

Though the U.S. media is quiet on the matter, it’s important to note that the Trump sanctions are both violently immoral — again, they kill people — and illegal. They are prohibited under the Organization of American States Charter, the United Nations Charter, and other international conventions that the U.S. is party to. The sanctions also violate U.S. law, since the U.S. president must state, absurdly, that Venezuela presents “an unusual and extraordinary threat to the national security” of the United States in order to impose these measures.

Last week, humanitarian aid was at the center of discussion of the Venezuela crisis in the US, and evidently at the center of Juan Guaidó’s plans to challenge the Maduro government’s hold on power in the country. The New York Times noted that:

The battle over the legitimate leadership of Venezuela — which has included rallies of thousands, international diplomacy and oil sanctions — is now focused on a single heavily guarded shipment of humanitarian aid.

Venezuela’s opposition, which has relished a month of victories in its effort to challenge President Nicolás Maduro and take over as the country’s legitimate government, brought the donated supplies of food and medical kits to the country’s border with Colombia.

Its goal was to bring the supplies into Venezuela, forcing a confrontation with Mr. Maduro, who has refused the help. This would cast Mr. Maduro in a bad light, opposition leaders said, and display their ability to set up a government-like relief system in a nation where the crumbling economy has left many starving, sick and without access to medicine.

Meanwhile, the Red Cross and the United Nations have criticized the US approach as politicizing crucial aid and potentially undermining their ongoing work in the country. From the Associated Press:

Alexandra Boivin, ICRC delegation head for the United States and Canada, said Friday that the ICRC had told U.S. officials that whatever plans “they have to help the people of Venezuela, it has to be shielded from this political conversation.”

“It is obviously a very difficult conversation to have with the U.S.,” she said. “We are there also to make clear the risks of the path being taken, the limits of our ability to operate in such an environment.”

And Reuters reported:

“Humanitarian action needs to be independent of political, military or other objectives,” U.N. spokesman Stephane Dujarric told reporters in New York.

“When we see the present stand-off it becomes even more clear that serious political negotiations between the parties are necessary to find a solution leading to lasting peace for the people of Venezuela,” he said.

The Canadian Broadcasting Corporation explained, following investigation by Justin Emery and FAIR.org, that while the CBC and many other outlets shared photos and reports of a bridge allegedly blocked by Maduro’s government to prevent the distribution of aid, the bridge had in fact never been opened:

Over the past week or so, the image of a blockaded bridge between Colombia and Venezuela has been all over news sites around the world. It’s been featured in stories describing how the president of Venezuela, Nicolas Maduro, is keeping international food aid from his desperate citizens.

Trouble is, the photo doesn’t tell the full story…

The bridge, which spans between Cucuta, Colombia, and the town of Pedro Maria Urena in Venezuela, hadn’t been open for years. In fact, it’s never been open.

As the CBC points out, the image came from a tweet by US Secretary of State Mike Pompeo.

On Wednesday, Congressman David Cicilline (D-RI) questioned USAID Acting Assistant Administrator Steve Olive about the politicization of aid in a House Foreign Affairs Committee hearing on Venezuela:

Cicilline: …would you say that in order to provide life-saving assistance in war-zones and dangerous areas humanitarians need to be able to operate in a neutral and apolitical way?

Olive: Correct.

Cicilline: Is it true that the US through USAID is prepositioning humanitarian aid at the border with Venezuela?

Olive: Yes, we are.

Cicilline: Do you have any concerns that tying humanitarian assistance to a particular political outcome could have unintended consequences or harm our ability to deliver assistance in Venezuela or to other countries and what steps is the administration taking to ensure aid does not become a flashpoint?

Olive: Administrator Green has said we will always, as the US Government, be ready to help those in need. There are people in need in our hemisphere right now as a result of this crisis and we already are supporting them in these border areas and doing what we can to build the capacity in country to receive and distribute aid securely and efficiently and be able to monitor those distributions and that is our focus.

Researchers Tim Gill and Rebecca Hanson wrote at The Nation last week that USAID had in fact been deeply involved in fomenting and supporting the student opposition movements that developed Guaidó as a leader:

A former USAID/OTI member who helped devise US efforts in Venezuela said the “objective was that you had thousands of youth, high school, and college kids…that were horrified of this Indian-looking guy in power. They were idealistic. We wanted to help them to build a civic organization, so that they could mobilize and organize. This is different than protesting.” In other words, USAID/OTI sought to take advantage of racialized fear of Chávez to organize middle-class youth around a long-term strategy to defeat him.

How exactly did the United States help these students? One USAID/OTI contractor who worked directly with them on a routine basis revealed to Gill that Washington provided funding and training to the student groups that developed at the same time Guaidó was part of them.

The Venezuelan government alleged that a US company is shipping weapons to its opposition as a Canadian analyst spotted what he considered to be unusual cargo plane movements. McClatchy reported:

An Ottawa-based analyst of unusual ship and plane movements, Steffan Watkins, drew attention to the frequent flights of the 21 Air cargo plane in a series of tweets Thursday.

“All year, they were flying between Philadelphia and Miami and all over the place, but all continental U.S.,” Watkins said in a telephone interview. “Then all of a sudden in January, things changed.”

That’s when the cargo plane began flying to destinations in Colombia and Venezuela on a daily basis, and sometimes multiple times a day, Watkins said. The plane has made close to 40 round-trip flights from Miami International Airport to Caracas and Valencia in Venezuela, and Bogota and Medellin in Colombia since Jan. 11.

The air cargo company involved and its client denied the allegations, but 21 Air is itself linked to a company alleged by Amnesty International to have been involved in a CIA rendition program.

It’s worth noting that Elliott Abrams, the Trump administration’s special envoy to Venezuela, is notorious in part for his role in covering up the US-sponsored smuggling of arms shipments into Nicaragua under the guise of humanitarian aid. As the Los Angeles Times reported in 1987:

Oliver L. North and other Reagan Administration aides deliberately used a 1986 program of “humanitarian aid” for Nicaraguan rebels to help support the secret effort to deliver military aid to the contras , U.S. officials said Monday…

The aid was administered by the State Department’s Nicaraguan Humanitarian Assistance Office, but officials said that all significant decisions were made by a “Restricted Inter-Agency Group,” consisting of North, Assistant Secretary of State Elliott Abrams and Alan D. Fiers, chief of the CIA’s Central America Task Force.

Underlying all this discussion over humanitarian aid is the devastating impact of US sanctions on Venezuela, which were intensified last month but have been in place for years. As CEPR co-Director Mark Weisbrot wrote at The Intercept:

Though the government’s economic policies have played a role in Venezuela’s woes, the Trump sanctions have made things considerably worse since August 2017, decimating the oil industry and worsening shortages of medicine that have killed many Venezuelans. The Trump sanctions also make it nearly impossible for the government to take the necessary measures to exit from hyperinflation and depression.

Though the U.S. media is quiet on the matter, it’s important to note that the Trump sanctions are both violently immoral — again, they kill people — and illegal. They are prohibited under the Organization of American States Charter, the United Nations Charter, and other international conventions that the U.S. is party to. The sanctions also violate U.S. law, since the U.S. president must state, absurdly, that Venezuela presents “an unusual and extraordinary threat to the national security” of the United States in order to impose these measures.

Last week, the US formally adopted sanctions on Venezuelan national oil company PDVSA, as well as on CITGO, its US-based distribution arm, as part of its press for regime change in Caracas. National Security Advisor John Bolton estimated the actions would affect some $7 billion in assets and would block $11 billion in revenue to the Venezuelan government over the next year. The State Department was quick to add, “These new sanctions do not target the innocent people of Venezuela…”

But of course they do. The Wall Street Journal reported:

The sanctions could create deeper gasoline shortages in Venezuela. The country’s refineries are already operating at a fraction of their capacity, crippled by a lack of spare parts and crude. Venezuela only produced a third of the 190,000 barrels of gasoline it consumed a day as of November, according to Ivan Freites, a leader of the country’s oil union.

“Immediately, it’s going to hurt the average Venezuelan,” Mr. Freites said.

Meanwhile, The New York Times noted:

But just across the street, a group of senior citizens waiting in line to collect their pensions worried that the Trump administration’s actions would further bankrupt their country and deepen the humanitarian crisis that has left so many starving, sick and without basic services.

“The United States has no business meddling in this,” said Aura Ramos, 59, a retiree who can barely afford blood pressure medicine. “It’s the regular people who will be affected.”

The Washington Office on Latin America released a statement criticizing the announced sanctions, writing:

However, we are deeply concerned at the potential for the recently announced U.S. sanctions to intensify the severe hardships and suffering that millions of Venezuelans are enduring. Venezuelans are already facing widespread scarcities of essential medicines and basic goods. Venezuela’s oil exports represent the main source of hard currency used to pay for imports. Without this revenue, it is clear that the importation of food and medicine could be put at risk. In turn, this will further accelerate a migration and refugee crisis that has strained neighboring countries and put many of the over 3 million Venezuelan migrants and refugees at risk.

It appears as though there is increasing acceptance of the basic fact that the US sanctions on Venezuela will have a negative impact on the people of Venezuela, but all this analysis misses two important points. First, the Trump administration had already imposed broad economic sanctions in 2017, though apparently both The Wall Street Journal and New York Times were unaware of this development.

From the same WSJ article:

…this week’s sanctions mark the first targeting of Venezuela’s lifeblood industry, which accounts for nearly all of the country’s hard currency income. Until now, U.S. sanctions were largely limited to individuals in Venezuela’s regime.

Another example from a NYT article a few days earlier:

The oil sanctions amount to the first punitive action taken by the United States against Mr. Maduro since the power struggle in Caracas erupted last week, and it is intended to starve the government of Mr. Maduro of cash and foreign currency. Oil production in Venezuela has already plummeted because of mismanagement and poor policies, and the country’s economy is in shambles.

These examples are certainly not alone in their misunderstanding of the sanctions ? and their impact on the oil industry. But it’s not terribly difficult to find information on the impact of the 2017 sanctions. Venezuelan economist Francisco Rodríguez provided a useful analysis last year explaining just this ? and it is even in English.

Rodríguez’s basic story: the oil industry is critical to the Venezuelan government; underinvestment and the rapid decline in oil prices caused a significant drop in revenue; then, as oil prices began increasing, Trump imposed sanctions making any international financial transaction extremely difficult and potentially “toxic.” Rodríguez explains, using this graph of oil production in Venezuela and Colombia, how Venezuelan and Colombian oil production both declined at the same rate, until the Trump financial embargo was implemented in August 2017. Then, Venezuela’s oil production collapsed:

campbell americas blog 2019 01 fig 1

It is striking that the second change in trend in Venezuela’s production numbers occurs at the time at which the United States decided to impose financial sanctions on Venezuela. Executive Order 13.808, issued on August 25 of 2017, barred U.S. persons from providing new financing to the Venezuelan government or PDVSA. Although the order carved out allowances for commercial credit of less than 90 days, it stopped the country from issuing new debt or selling previously issued debt currently in its possession.

The Executive Order is part of a broader process of what one could term the “toxification” of financial dealings with Venezuela. During 2017, it became increasingly clear that institutions who decided to enter into financial arrangements with Venezuela would have to be willing to pay high reputational and regulatory costs. This was partly the result of a strategic decision by the Venezuelan opposition, in itself a response to the growing authoritarianism of the Maduro government.

It’s not just the the media’s apparent amnesia with regard to those 2017 sanctions and their impact on the oil industry that is the problem here. In fact, the impact of those sanctions was even larger. As my colleague, Mark Weisbrot has previously explained, and as Rodríguez notes in the same article linked above, the sanctions made it virtually impossible for the Venezuela government to take the measures necessary to eliminate hyperinflation or recover from a deep depression. Such measures would include debt restructuring, and creating a new exchange rate system (Exchange Rate Bases Stabilization), in which the currency would normally be pegged to the dollar.

But it actually gets worse. When the US first announced its recognition of Juan Guaidó as president of Venezuela on January 23, the decision was met largely with applause within the foreign policy establishment. It seemed like nobody bothered to think about what, practically and economically, the decision would mean. Since Trump’s election, and his increasingly threatening rhetoric in relation to Venezuela, there has been wide agreement that a full-scale oil embargo would be terrible, both for Venezuela and the US. Yet somehow hardly anyone realized that by recognizing Guaidó, the US was de facto putting an oil embargo in place. Once again we turn to Rodríguez who, for what it’s worth, has been publicly supportive of the decision to recognize Guaidó and wrote the following on January 28,[1] a day before the most recently announced sanctions:

By giving it the legal authority to invoice Venezuelan oil, the decision to recognize the Guaidó administration, therefore, would have the same implications for bilateral trade of an oil embargo. Applied by the countries that provide for nearly three-fourths of Venezuela’s imports, the decisions can be expected to have a significant effect on the country’s capacity both to produce oil and import goods. As a result, we expect Venezuela’s oil production to decline by 640tbd to 508tbd in 2019 (a fall of 55.7%), as opposed to our prior forecast of 1,070tbd. Exports will fall to USD 13.5bn (USD 12.3bn from oil), nearly half our previous estimate of USD 23.8bn. Imports of goods will decline to USD 7.0bn, a 40.3% decline (we expect the entrance of some humanitarian aid as well as the default on payments of all debt to cushion the fall). Venezuela’s economy is highly import dependent, as illustrated by the strong empirical correlation between import and GDP growth. As a result of the additional import crunch, we expect Venezuela’s economy to contract by 26.4%, as opposed to our previous forecast of 11.7%.

The impact is clear. The decision to formally recognize Guaidó will have a massive economic impact on the people of Venezuela ? irrespective of sanctions, oil embargos or whatever else is announced. The Trump administration succeeded in de facto implementing an oil embargo, without taking any of the heat they would have if it were done explicitly. And then this week, the Trump administration announced broader trade sanctions that appeared to make explicit by the recognition of a parallel government, with some specific carve outs for American oil companies already in Venezuela, like Chevron and Halliburton.

Of course, there are plenty of people who will argue that this pain and suffering is worth it in order to force Maduro from power. That’s their right, but the media should force them to make that argument openly, and honestly confront the pain and suffering these policies will inflict.

Finally, if asking for the media to get the sanctions story right is too much, maybe they can give some coverage to the fact that National Security Advisor John Bolton went on national TV and openly said the following:

It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela. It would be good for the people of Venezuela. It would be good for the people of the United States. We both have a lot at stake here making this come out the right way.

A decimated oil industry in the nation with the largest proven oil reserves in the world would appear to serve some alternative interests beyond “democracy” and “human rights.”


[1] Francisco Rodríguez, “Ecuador & Venezuela This Week,” Torino Economics and Torino Capital Group Company, January 28, 2019.

Last week, the US formally adopted sanctions on Venezuelan national oil company PDVSA, as well as on CITGO, its US-based distribution arm, as part of its press for regime change in Caracas. National Security Advisor John Bolton estimated the actions would affect some $7 billion in assets and would block $11 billion in revenue to the Venezuelan government over the next year. The State Department was quick to add, “These new sanctions do not target the innocent people of Venezuela…”

But of course they do. The Wall Street Journal reported:

The sanctions could create deeper gasoline shortages in Venezuela. The country’s refineries are already operating at a fraction of their capacity, crippled by a lack of spare parts and crude. Venezuela only produced a third of the 190,000 barrels of gasoline it consumed a day as of November, according to Ivan Freites, a leader of the country’s oil union.

“Immediately, it’s going to hurt the average Venezuelan,” Mr. Freites said.

Meanwhile, The New York Times noted:

But just across the street, a group of senior citizens waiting in line to collect their pensions worried that the Trump administration’s actions would further bankrupt their country and deepen the humanitarian crisis that has left so many starving, sick and without basic services.

“The United States has no business meddling in this,” said Aura Ramos, 59, a retiree who can barely afford blood pressure medicine. “It’s the regular people who will be affected.”

The Washington Office on Latin America released a statement criticizing the announced sanctions, writing:

However, we are deeply concerned at the potential for the recently announced U.S. sanctions to intensify the severe hardships and suffering that millions of Venezuelans are enduring. Venezuelans are already facing widespread scarcities of essential medicines and basic goods. Venezuela’s oil exports represent the main source of hard currency used to pay for imports. Without this revenue, it is clear that the importation of food and medicine could be put at risk. In turn, this will further accelerate a migration and refugee crisis that has strained neighboring countries and put many of the over 3 million Venezuelan migrants and refugees at risk.

It appears as though there is increasing acceptance of the basic fact that the US sanctions on Venezuela will have a negative impact on the people of Venezuela, but all this analysis misses two important points. First, the Trump administration had already imposed broad economic sanctions in 2017, though apparently both The Wall Street Journal and New York Times were unaware of this development.

From the same WSJ article:

…this week’s sanctions mark the first targeting of Venezuela’s lifeblood industry, which accounts for nearly all of the country’s hard currency income. Until now, U.S. sanctions were largely limited to individuals in Venezuela’s regime.

Another example from a NYT article a few days earlier:

The oil sanctions amount to the first punitive action taken by the United States against Mr. Maduro since the power struggle in Caracas erupted last week, and it is intended to starve the government of Mr. Maduro of cash and foreign currency. Oil production in Venezuela has already plummeted because of mismanagement and poor policies, and the country’s economy is in shambles.

These examples are certainly not alone in their misunderstanding of the sanctions ? and their impact on the oil industry. But it’s not terribly difficult to find information on the impact of the 2017 sanctions. Venezuelan economist Francisco Rodríguez provided a useful analysis last year explaining just this ? and it is even in English.

Rodríguez’s basic story: the oil industry is critical to the Venezuelan government; underinvestment and the rapid decline in oil prices caused a significant drop in revenue; then, as oil prices began increasing, Trump imposed sanctions making any international financial transaction extremely difficult and potentially “toxic.” Rodríguez explains, using this graph of oil production in Venezuela and Colombia, how Venezuelan and Colombian oil production both declined at the same rate, until the Trump financial embargo was implemented in August 2017. Then, Venezuela’s oil production collapsed:

campbell americas blog 2019 01 fig 1

It is striking that the second change in trend in Venezuela’s production numbers occurs at the time at which the United States decided to impose financial sanctions on Venezuela. Executive Order 13.808, issued on August 25 of 2017, barred U.S. persons from providing new financing to the Venezuelan government or PDVSA. Although the order carved out allowances for commercial credit of less than 90 days, it stopped the country from issuing new debt or selling previously issued debt currently in its possession.

The Executive Order is part of a broader process of what one could term the “toxification” of financial dealings with Venezuela. During 2017, it became increasingly clear that institutions who decided to enter into financial arrangements with Venezuela would have to be willing to pay high reputational and regulatory costs. This was partly the result of a strategic decision by the Venezuelan opposition, in itself a response to the growing authoritarianism of the Maduro government.

It’s not just the the media’s apparent amnesia with regard to those 2017 sanctions and their impact on the oil industry that is the problem here. In fact, the impact of those sanctions was even larger. As my colleague, Mark Weisbrot has previously explained, and as Rodríguez notes in the same article linked above, the sanctions made it virtually impossible for the Venezuela government to take the measures necessary to eliminate hyperinflation or recover from a deep depression. Such measures would include debt restructuring, and creating a new exchange rate system (Exchange Rate Bases Stabilization), in which the currency would normally be pegged to the dollar.

But it actually gets worse. When the US first announced its recognition of Juan Guaidó as president of Venezuela on January 23, the decision was met largely with applause within the foreign policy establishment. It seemed like nobody bothered to think about what, practically and economically, the decision would mean. Since Trump’s election, and his increasingly threatening rhetoric in relation to Venezuela, there has been wide agreement that a full-scale oil embargo would be terrible, both for Venezuela and the US. Yet somehow hardly anyone realized that by recognizing Guaidó, the US was de facto putting an oil embargo in place. Once again we turn to Rodríguez who, for what it’s worth, has been publicly supportive of the decision to recognize Guaidó and wrote the following on January 28,[1] a day before the most recently announced sanctions:

By giving it the legal authority to invoice Venezuelan oil, the decision to recognize the Guaidó administration, therefore, would have the same implications for bilateral trade of an oil embargo. Applied by the countries that provide for nearly three-fourths of Venezuela’s imports, the decisions can be expected to have a significant effect on the country’s capacity both to produce oil and import goods. As a result, we expect Venezuela’s oil production to decline by 640tbd to 508tbd in 2019 (a fall of 55.7%), as opposed to our prior forecast of 1,070tbd. Exports will fall to USD 13.5bn (USD 12.3bn from oil), nearly half our previous estimate of USD 23.8bn. Imports of goods will decline to USD 7.0bn, a 40.3% decline (we expect the entrance of some humanitarian aid as well as the default on payments of all debt to cushion the fall). Venezuela’s economy is highly import dependent, as illustrated by the strong empirical correlation between import and GDP growth. As a result of the additional import crunch, we expect Venezuela’s economy to contract by 26.4%, as opposed to our previous forecast of 11.7%.

The impact is clear. The decision to formally recognize Guaidó will have a massive economic impact on the people of Venezuela ? irrespective of sanctions, oil embargos or whatever else is announced. The Trump administration succeeded in de facto implementing an oil embargo, without taking any of the heat they would have if it were done explicitly. And then this week, the Trump administration announced broader trade sanctions that appeared to make explicit by the recognition of a parallel government, with some specific carve outs for American oil companies already in Venezuela, like Chevron and Halliburton.

Of course, there are plenty of people who will argue that this pain and suffering is worth it in order to force Maduro from power. That’s their right, but the media should force them to make that argument openly, and honestly confront the pain and suffering these policies will inflict.

Finally, if asking for the media to get the sanctions story right is too much, maybe they can give some coverage to the fact that National Security Advisor John Bolton went on national TV and openly said the following:

It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela. It would be good for the people of Venezuela. It would be good for the people of the United States. We both have a lot at stake here making this come out the right way.

A decimated oil industry in the nation with the largest proven oil reserves in the world would appear to serve some alternative interests beyond “democracy” and “human rights.”


[1] Francisco Rodríguez, “Ecuador & Venezuela This Week,” Torino Economics and Torino Capital Group Company, January 28, 2019.

Puerto Rico’s economy has had considerable problems over the last decade, and Hurricane Maria, which struck the island just over one year ago and was the worst natural disaster on record in Puerto Rican history, greatly exacerbated them.

Despite nearly unanimous recognition of the island’s ongoing economic woes, Governor Ricardo Rosselló touted employment growth last month as the economy gained 100 jobs in July (this was revised down to a loss of 400 jobs). Rosselló was looking at the household survey, which surveys people, rather than the establishment survey, which surveys businesses — and is the standard for reporting month-to-month employment numbers. (The household survey, which Rosselló used, might be better at including the informal sector, but it’s worse at reliably tracking jobs created and lost.) Employment fell in August as well, with another 1,000 jobs lost. Rosselló has claimed the island is seeing an “economic recovery.”

Based on the establishment survey, there is little to celebrate. From January 2013 to August 2017 (right before the storm), the economy was losing about 1,100 jobs per month (or around 400 private sector jobs per month). In January 2017, the government enacted labor reforms that were supposed to boost the economy and stem these losses. Those policies limited bonuses and paid leave, loosened hours requirements for employers, and reduced overtime benefits among other changes. These reforms were unpopular, and they also failed to curb job loss. From the enactment of the reforms until the hurricane, employment decreased by 14,700 (5,600 private sector), and the rate of loss actually increased to 1,800 jobs per month (700 private sector). Including the time since the hurricane, employment is down by 40,500, or 23,700 private sector jobs.

Hurricane Maria explains much of the decline over the last year. In addition to the lives lost and the catastrophic damage, the storm significantly impacted Puerto Rico’s labor market. In the month after, the island of around 3.3 million people lost almost 40,000 jobs, with total employment plummeting to 836,200 (the lowest level since the early 1990s). Since the hurricane, the economy has gained back just 14,000 jobs, or around 1,300 per month (although much of the gains were directly following the storm). Still, employment is down by about 26,000 over the last year (nearly 3.0 percent of total employment). Although Puerto Rico was losing jobs prior to the storm, the current level of employment is below what had been the trend from 2013 until the hurricane. If the economy had followed this trend, there would be over 12,000 more jobs on the island.

The story changes depending on the sector. Some sectors follow the overall trend, although there are notable exceptions that were hard hit. Manufacturing fell by 1,700 jobs (2.4 percent) over the last year to 70,000 jobs, with all of the loss in nondurable goods (which has not rebounded since the hurricane). Education and health services have lost 5,800 jobs over the past year (4.7 percent), with most concentrated in health and social assistance (4,800) — a sector vital to relief efforts. The overall education and health services sector has gained just 400 jobs since its post-hurricane low of 116,000 jobs. Government employment continues to slide, down 7,700 jobs over the past year as the state government sheds workers as part of austerity packages (state government has lost 6,600 jobs, or 4.4 percent). On the bright side, leisure and hospitality has mostly recovered after losing 13,400 jobs following Maria. The sector is now down just 900 jobs for the year, with total employment at 80,300.

Overall, the labor market in Puerto Rico has improved somewhat since the hurricane, but is still depressed. As the economy recovers from the hurricane, the better-case scenario seems to be returning to the pre-hurricane level of jobs, with a trend of still steady, but slower, job loss. A worse scenario is if the economy does not reach the level of jobs associated with the prior trend, either overall or for specific sectors, and the hurricane shifts the number of jobs on the island downward in the short- and medium-term.

Puerto Rico’s economy has had considerable problems over the last decade, and Hurricane Maria, which struck the island just over one year ago and was the worst natural disaster on record in Puerto Rican history, greatly exacerbated them.

Despite nearly unanimous recognition of the island’s ongoing economic woes, Governor Ricardo Rosselló touted employment growth last month as the economy gained 100 jobs in July (this was revised down to a loss of 400 jobs). Rosselló was looking at the household survey, which surveys people, rather than the establishment survey, which surveys businesses — and is the standard for reporting month-to-month employment numbers. (The household survey, which Rosselló used, might be better at including the informal sector, but it’s worse at reliably tracking jobs created and lost.) Employment fell in August as well, with another 1,000 jobs lost. Rosselló has claimed the island is seeing an “economic recovery.”

Based on the establishment survey, there is little to celebrate. From January 2013 to August 2017 (right before the storm), the economy was losing about 1,100 jobs per month (or around 400 private sector jobs per month). In January 2017, the government enacted labor reforms that were supposed to boost the economy and stem these losses. Those policies limited bonuses and paid leave, loosened hours requirements for employers, and reduced overtime benefits among other changes. These reforms were unpopular, and they also failed to curb job loss. From the enactment of the reforms until the hurricane, employment decreased by 14,700 (5,600 private sector), and the rate of loss actually increased to 1,800 jobs per month (700 private sector). Including the time since the hurricane, employment is down by 40,500, or 23,700 private sector jobs.

Hurricane Maria explains much of the decline over the last year. In addition to the lives lost and the catastrophic damage, the storm significantly impacted Puerto Rico’s labor market. In the month after, the island of around 3.3 million people lost almost 40,000 jobs, with total employment plummeting to 836,200 (the lowest level since the early 1990s). Since the hurricane, the economy has gained back just 14,000 jobs, or around 1,300 per month (although much of the gains were directly following the storm). Still, employment is down by about 26,000 over the last year (nearly 3.0 percent of total employment). Although Puerto Rico was losing jobs prior to the storm, the current level of employment is below what had been the trend from 2013 until the hurricane. If the economy had followed this trend, there would be over 12,000 more jobs on the island.

The story changes depending on the sector. Some sectors follow the overall trend, although there are notable exceptions that were hard hit. Manufacturing fell by 1,700 jobs (2.4 percent) over the last year to 70,000 jobs, with all of the loss in nondurable goods (which has not rebounded since the hurricane). Education and health services have lost 5,800 jobs over the past year (4.7 percent), with most concentrated in health and social assistance (4,800) — a sector vital to relief efforts. The overall education and health services sector has gained just 400 jobs since its post-hurricane low of 116,000 jobs. Government employment continues to slide, down 7,700 jobs over the past year as the state government sheds workers as part of austerity packages (state government has lost 6,600 jobs, or 4.4 percent). On the bright side, leisure and hospitality has mostly recovered after losing 13,400 jobs following Maria. The sector is now down just 900 jobs for the year, with total employment at 80,300.

Overall, the labor market in Puerto Rico has improved somewhat since the hurricane, but is still depressed. As the economy recovers from the hurricane, the better-case scenario seems to be returning to the pre-hurricane level of jobs, with a trend of still steady, but slower, job loss. A worse scenario is if the economy does not reach the level of jobs associated with the prior trend, either overall or for specific sectors, and the hurricane shifts the number of jobs on the island downward in the short- and medium-term.

As the fortunes of South America’s “pink tide” have turned and right-wing movements have recaptured power, conservative judiciaries and legislatures, egged on by elite-controlled media cartels, have engaged in dubious judicial procedures against various left-wing figures. In 2015, Argentina elected a right-wing neoliberal president, Mauricio Macri, and former left-leaning president Cristina Kirchner was charged with treason and other crimes. In Brazil, the Senate impeached sitting president Dilma Rousseff ? though her alleged crimes were dismissed by federal prosecutors ? and replaced her with the conservative Michel Temer. More recently, Lula, who polls suggest would easily win reelection, has been convicted of corruption and jailed, despite the absence of material evidence backing the charges against him. This decade has effectively become one of politico-judicial persecution ? lawfare ? against pink tide political figures, as right-wing movements try to ensure that their left-wing rivals won’t return to power.

Ecuador’s former president Rafael Correa appears to be the latest victim of lawfare against left-wing politicians. On July 3, 2018, a court in Ecuador ordered Correa’s arrest and extradition following his failure to serve a subpoena to appear in court. Judge Daniella Camacho of the National Court of Justice alerted Interpol to detain Correa if he tries to leave Belgium, where now resides with his Belgian wife. His offer to depose testimony at the Ecuadorian diplomatic mission in Brussels was rejected.

Originally subpoenaed to appear in court in mid-June, Correa was included in an investigation concerning the attempted kidnapping of lawmaker Fernando Balda in 2012. A former member of Correa’s Alianza PAIS party, and Correa’s supporter in his 2006 presidential campaign, Balda quickly became a political adversary of Correa after criticizing him over what Balda claims was “arbitrary and exclusionary management” of Alianza PAIS’ national board, as well as later accusing Correa of wiretapping his political adversaries and seeking campaign financing from Colombia’s FARC insurgent guerrilla force. By 2009, Balda had left Alianza PAIS and joined the Patriotic Society Party ? led by former army colonel and ex-president Lucio Gutiérrez, a leading figure in the 2000 Ecuadorian coup who oversaw neoliberal reforms as president from 2003 to 2005 until he was removed by Congress for the alleged abandonment of his constitutional duties.

Balda fled to Bogotá, Colombia in 2009 only to return briefly in 2010 (some have claimed he is responsible for the attempted coup against Correa in September of that year), and remained in Colombia until after the attempted kidnapping. At the time, Balda was facing charges for libel against President Correa. His extradition was being processed, and he would later be brought back to Ecuador and sentenced to a year in jail for threatening national security. Balda has since been released.

All this follows the presidential election victory of Correa’s former vice president, Lenín Moreno. Although his presidential candidacy received decisive support from Correa, the new president has dramatically distanced himself from Correa and worked to reverse many of Correa’s policies. Shortly after his election, he suspended the duties of his vice president ? Jorge Glas, a Correa ally ? and Glas was subsequently sentenced to a six-year sentence for alleged corruption in connection with the Odebrecht scandal. Moreno followed this with a push for a referendum on seven questions over term limits, the barring of officials convicted of corruption from office, the nature of the Council of Citizen Participation and Social Control (CPCCS, by its Spanish acronym), and more. The referendum was put to a vote, despite the absence of a response from the Constitutional Court ? which many have claimed was unconstitutional. Moreno prevailed on all seven questions, with more than 60 percent “Yes” votes. After this victory, Moreno moved to have new members appointed to the CPCCS for a transition period. This Transition Council is responsible for interim appointments of the attorney general and members of the Judicial Council, and later removed many Judicial Council members and then voted to remove all nine judges of the nation’s Constitutional Court. The Inter-American Commission on Human Rights opposed the referendum question on the CPCCS and the appointment of new members to the body, arguing that it jeopardized the principles of separation of powers and judicial independence.

               

After the National Assembly rejected a request to prosecute Correa on June 18, 2018, the National Court of Justice included Correa in the investigation concerning Balda’s attempted kidnapping, with newly appointed attorney general Paul Perez claiming new evidence had emerged in the case. The National Assembly returned the decision to Judge Camacho on the grounds that “it is not for parliament to authorize the prosecution of an ex-president,” asserting that the provision of the Ecuadorian Constitution requiring authorization from two-thirds of the National Assembly for “the criminal impeachment of the President…when the competent authority so requests it on substantive grounds” does not apply to Correa’s case. While there is no clear legal consensus as to whether the National Assembly must give approval for a former president to be criminally prosecuted for actions committed during a presidential term, according to high-level and former high-level Ecuadorian officials the precedent has been for the Court to request the Assembly’s go-ahead, as in the cases against former presidents Jamil Mahuad and Abdalá Bucaram. Correa is being investigated for actions he took in his official capacity as president, implying that the National Assembly should approve such prosecutions ? rather than return them to the court unresolved and “enabling the trial to happen,” as Correa’s former foreign minister Guillaume Long has described it.

The evidence linking Correa to the attempted kidnapping of Balda is shaky. Much of it relies on the testimony of a retired National Police sergeant, Luis Raúl Chicaiza Fuentes, and on letters that Fuentes supposedly sent to president Correa in 2012. Chicaiza claims that Correa called him several times using the alias “Carlitos,” saying he was giving Chicaiza and other alleged plotters “political, economic and institutional support” for their operation in Colombia. Strangely enough, Chicaiza also admits he never heard “Carlitos” mention Balda, and is unable to identify the call’s origin or what phone received it, due to the use of disposable phones for intelligence and counterintelligence purposes (burners, essentially). The prosecutors have used this weak evidence to make wild, unsubstantiated claims, including that these conversations implicate Correa in an assassination plot against Balda ? although they have yet to formalize these charges.

The prosecution also alleges that Correa authored the kidnapping attempt through the then head of the National Intelligence Secretariat (SENAIN), Pablo Humberto Romero Quezada. Sergeant Chicaiza indicates that Pablo Romero was corresponding with Correa, updating him on intelligence concerning Operation Wilson ? the alleged SENAIN operation to return Balda to Ecuador. Chicaiza claims to have met Romero at his office routinely over the matter, as well as in Portugal. Romero’s warning to Chicaiza and Jorge Espinoza (also involved in the attempted kidnapping) to “be careful not to be taken prisoner” by Balda and his associates is taken as evidence that Romero was telling them to conduct an illegal kidnapping, although Chicaiza says this was because of fear of Balda’s network and their own possible criminality. Romero has not returned to Ecuador for trial, and is instead residing in Spain, requesting political asylum.

Overall, the prosecution’s evidence is largely unsubstantiated and relies on the testimony of a former police sergeant. Evidence of the phone calls has not been provided since there is no record of them having occurred, and no proof has been presented showing that Chicaiza’s letters ever made it to Correa. Furthermore, Romero has yet to testify, so information on his purported actions comes from Chicaiza. Others involved in the case also have not testified. Whether Correa will be forced to return to Ecuador is uncertain. Many see the trial as an attempt to neutralize him politically while his reforms are rolled back.

The Lenín Moreno administration’s recent actions seem to fit this narrative. Relations between Moreno and Correa have soured considerably as the former continues to seek to marginalize the latter and his supporters. This fits a pattern seen across Latin America, as former pink tide heads of state and left politicians face political persecution. Whether these changes in Ecuador will effectively end the progressive reforms implemented by Correa and his supporters and usher in a new era of neoliberalism remains to be seen, although recent talks with the IMF indicate such a change may be coming. This also would follow a trend, as countries like Argentina sign new agreements with the IMF. As the pink tide recedes amid right-wing lawfare throughout the continent, Ecuador may be the latest to succumb to the recent neoliberal reaction rippling through Latin America.

Note: This post was corrected on September 25, 2018 to refer to the article of the Ecuadorian constitution pertaining to criminal prosecution of former presidents, not to Article 129 as previously mentioned. A previous statement referring to President Correa’s reported “appeal” to the IACHR has also been removed, as there is no available evidence that such an appeal or petition was ever made.

As the fortunes of South America’s “pink tide” have turned and right-wing movements have recaptured power, conservative judiciaries and legislatures, egged on by elite-controlled media cartels, have engaged in dubious judicial procedures against various left-wing figures. In 2015, Argentina elected a right-wing neoliberal president, Mauricio Macri, and former left-leaning president Cristina Kirchner was charged with treason and other crimes. In Brazil, the Senate impeached sitting president Dilma Rousseff ? though her alleged crimes were dismissed by federal prosecutors ? and replaced her with the conservative Michel Temer. More recently, Lula, who polls suggest would easily win reelection, has been convicted of corruption and jailed, despite the absence of material evidence backing the charges against him. This decade has effectively become one of politico-judicial persecution ? lawfare ? against pink tide political figures, as right-wing movements try to ensure that their left-wing rivals won’t return to power.

Ecuador’s former president Rafael Correa appears to be the latest victim of lawfare against left-wing politicians. On July 3, 2018, a court in Ecuador ordered Correa’s arrest and extradition following his failure to serve a subpoena to appear in court. Judge Daniella Camacho of the National Court of Justice alerted Interpol to detain Correa if he tries to leave Belgium, where now resides with his Belgian wife. His offer to depose testimony at the Ecuadorian diplomatic mission in Brussels was rejected.

Originally subpoenaed to appear in court in mid-June, Correa was included in an investigation concerning the attempted kidnapping of lawmaker Fernando Balda in 2012. A former member of Correa’s Alianza PAIS party, and Correa’s supporter in his 2006 presidential campaign, Balda quickly became a political adversary of Correa after criticizing him over what Balda claims was “arbitrary and exclusionary management” of Alianza PAIS’ national board, as well as later accusing Correa of wiretapping his political adversaries and seeking campaign financing from Colombia’s FARC insurgent guerrilla force. By 2009, Balda had left Alianza PAIS and joined the Patriotic Society Party ? led by former army colonel and ex-president Lucio Gutiérrez, a leading figure in the 2000 Ecuadorian coup who oversaw neoliberal reforms as president from 2003 to 2005 until he was removed by Congress for the alleged abandonment of his constitutional duties.

Balda fled to Bogotá, Colombia in 2009 only to return briefly in 2010 (some have claimed he is responsible for the attempted coup against Correa in September of that year), and remained in Colombia until after the attempted kidnapping. At the time, Balda was facing charges for libel against President Correa. His extradition was being processed, and he would later be brought back to Ecuador and sentenced to a year in jail for threatening national security. Balda has since been released.

All this follows the presidential election victory of Correa’s former vice president, Lenín Moreno. Although his presidential candidacy received decisive support from Correa, the new president has dramatically distanced himself from Correa and worked to reverse many of Correa’s policies. Shortly after his election, he suspended the duties of his vice president ? Jorge Glas, a Correa ally ? and Glas was subsequently sentenced to a six-year sentence for alleged corruption in connection with the Odebrecht scandal. Moreno followed this with a push for a referendum on seven questions over term limits, the barring of officials convicted of corruption from office, the nature of the Council of Citizen Participation and Social Control (CPCCS, by its Spanish acronym), and more. The referendum was put to a vote, despite the absence of a response from the Constitutional Court ? which many have claimed was unconstitutional. Moreno prevailed on all seven questions, with more than 60 percent “Yes” votes. After this victory, Moreno moved to have new members appointed to the CPCCS for a transition period. This Transition Council is responsible for interim appointments of the attorney general and members of the Judicial Council, and later removed many Judicial Council members and then voted to remove all nine judges of the nation’s Constitutional Court. The Inter-American Commission on Human Rights opposed the referendum question on the CPCCS and the appointment of new members to the body, arguing that it jeopardized the principles of separation of powers and judicial independence.

               

After the National Assembly rejected a request to prosecute Correa on June 18, 2018, the National Court of Justice included Correa in the investigation concerning Balda’s attempted kidnapping, with newly appointed attorney general Paul Perez claiming new evidence had emerged in the case. The National Assembly returned the decision to Judge Camacho on the grounds that “it is not for parliament to authorize the prosecution of an ex-president,” asserting that the provision of the Ecuadorian Constitution requiring authorization from two-thirds of the National Assembly for “the criminal impeachment of the President…when the competent authority so requests it on substantive grounds” does not apply to Correa’s case. While there is no clear legal consensus as to whether the National Assembly must give approval for a former president to be criminally prosecuted for actions committed during a presidential term, according to high-level and former high-level Ecuadorian officials the precedent has been for the Court to request the Assembly’s go-ahead, as in the cases against former presidents Jamil Mahuad and Abdalá Bucaram. Correa is being investigated for actions he took in his official capacity as president, implying that the National Assembly should approve such prosecutions ? rather than return them to the court unresolved and “enabling the trial to happen,” as Correa’s former foreign minister Guillaume Long has described it.

The evidence linking Correa to the attempted kidnapping of Balda is shaky. Much of it relies on the testimony of a retired National Police sergeant, Luis Raúl Chicaiza Fuentes, and on letters that Fuentes supposedly sent to president Correa in 2012. Chicaiza claims that Correa called him several times using the alias “Carlitos,” saying he was giving Chicaiza and other alleged plotters “political, economic and institutional support” for their operation in Colombia. Strangely enough, Chicaiza also admits he never heard “Carlitos” mention Balda, and is unable to identify the call’s origin or what phone received it, due to the use of disposable phones for intelligence and counterintelligence purposes (burners, essentially). The prosecutors have used this weak evidence to make wild, unsubstantiated claims, including that these conversations implicate Correa in an assassination plot against Balda ? although they have yet to formalize these charges.

The prosecution also alleges that Correa authored the kidnapping attempt through the then head of the National Intelligence Secretariat (SENAIN), Pablo Humberto Romero Quezada. Sergeant Chicaiza indicates that Pablo Romero was corresponding with Correa, updating him on intelligence concerning Operation Wilson ? the alleged SENAIN operation to return Balda to Ecuador. Chicaiza claims to have met Romero at his office routinely over the matter, as well as in Portugal. Romero’s warning to Chicaiza and Jorge Espinoza (also involved in the attempted kidnapping) to “be careful not to be taken prisoner” by Balda and his associates is taken as evidence that Romero was telling them to conduct an illegal kidnapping, although Chicaiza says this was because of fear of Balda’s network and their own possible criminality. Romero has not returned to Ecuador for trial, and is instead residing in Spain, requesting political asylum.

Overall, the prosecution’s evidence is largely unsubstantiated and relies on the testimony of a former police sergeant. Evidence of the phone calls has not been provided since there is no record of them having occurred, and no proof has been presented showing that Chicaiza’s letters ever made it to Correa. Furthermore, Romero has yet to testify, so information on his purported actions comes from Chicaiza. Others involved in the case also have not testified. Whether Correa will be forced to return to Ecuador is uncertain. Many see the trial as an attempt to neutralize him politically while his reforms are rolled back.

The Lenín Moreno administration’s recent actions seem to fit this narrative. Relations between Moreno and Correa have soured considerably as the former continues to seek to marginalize the latter and his supporters. This fits a pattern seen across Latin America, as former pink tide heads of state and left politicians face political persecution. Whether these changes in Ecuador will effectively end the progressive reforms implemented by Correa and his supporters and usher in a new era of neoliberalism remains to be seen, although recent talks with the IMF indicate such a change may be coming. This also would follow a trend, as countries like Argentina sign new agreements with the IMF. As the pink tide recedes amid right-wing lawfare throughout the continent, Ecuador may be the latest to succumb to the recent neoliberal reaction rippling through Latin America.

Note: This post was corrected on September 25, 2018 to refer to the article of the Ecuadorian constitution pertaining to criminal prosecution of former presidents, not to Article 129 as previously mentioned. A previous statement referring to President Correa’s reported “appeal” to the IACHR has also been removed, as there is no available evidence that such an appeal or petition was ever made.

En español

I have rarely responded to trolls because ? well, what’s the point? It’s not like they care about facts or logic.

For example, Francisco Toro, a blogger who fulminates about Venezuela and appears in the Washington Post, has been trolling me for years and I have almost always ignored him. Dany Bahar, an economist at the Brookings Institution, actually trolled me on a TV show, excitedly holding up to the camera a Guardian article that I wrote nearly five years ago, to castigate me. Cathy Newman, a news presenter for Channel 4 ? one of the top three most-watched TV stations in the UK ? did the same thing in the middle of a newscast in which she was supposedly interviewing me. And now Brian Ellsworth, a journalist  for Reuters who reports from Venezuela, has joined the latest avalanche of trolls, bots, and blowhards who swarmed me because I dared to mention on BBC World TV, on Friday night, that Trump’s financial embargo against Venezuela makes it more difficult for any government to stabilize the economy ? a fact that no economist would dispute. Indeed that is the purpose of the embargo.

Let’s start with what all of these trolls ? including the more educated ones noted above ? have in common.  They all rely on one article (out of dozens) that I wrote about Venezuela. Not one of them challenges a single fact in that article. That tells you a lot right there about the weakness of their “argument.”

Their glorious “gotcha” is not about any facts but rather a prediction. I wrote that Venezuela was not facing any serious threat of hyperinflation. That was certainly true in November 2013, the date of the article. Economists most often define hyperinflation as a rate of inflation that exceeds 50 percent per month. Although we don’t have official statistics for inflation in Venezuela since 2015, available estimates (from the opposition-controlled National Assembly) do not show Venezuelan inflation at that level until November of 2017, four years later.

The trolls imply that I should have known in November 2013 that Venezuela would eventually reach hyperinflation. At the time, as I noted in the Guardian article, Venezuela was facing a dynamic in which there was a significant parallel market for the dollar, and the price of the dollar in that market was rising.  This increased inflation (by increasing the price of imports). The inflation, in turn, drove more people to buy dollars, which pushed the black market price of the dollar up further. If such a spiral is allowed to continue it will eventually lead to hyperinflation.

However, I assumed that the government would at some point break this cycle by unifying the exchange rate, thereby getting rid of (or reducing to irrelevance) the parallel market.  That assumption turned out to be wrong, but it was a reasonable assumption at the time. In fact, economist Francisco Rodríguez, then at Bank of America Merrill Lynch, made the same assumption at that time. Rodríguez knows more than probably anyone in the world about the Venezuelan economy; and he has repeatedly been proven right about the Venezuelan economy while almost all of the sources that the media quotes on this subject ? especially on government finances ? were repeatedly proven wrong.

But most economists would have made the same assumption at that time. Hyperinflations are not that common; there were only about six episodes in Latin America in the twentieth century. And as I noted at the time, Venezuela had more than $36 billion in international reserves, a sizeable current account surplus of $11 billion (2.9 percent of GDP) and was not facing any imminent balance of payments crisis. There wasn’t any reason for thinking that the government would ride its overvalued fixed exchange rate all the way to hyperinflation.

On the contrary, there were other reasons to assume, in November 2013, that the government would take the necessary measures before reaching hyperinflation. In 2002, for example, despite serious political turmoil (including a military coup and devastating opposition oil strike), then president Hugo Chávez floated the currency. Central Bank reserves actually increased during this period. And in 2014, the government announced that it was going to unify the exchange rate, although it did not follow through. In May 2016, as Toro noted, a team of economists from the Union of South American Nations (UNASUR), went to Venezuela and proposed a plan, which included unification of the exchange rate and other measures that could reasonably be expected to stop the acceleration of inflation. I was part of that team. It was not at all clear at that time whether the government would adopt the plan or not.

The trolls would say that they predicted disaster, and indeed they did: they predicted it every year ? ever since Chávez was elected in 1998, even when the economy was booming and inflation was falling. But that is the accuracy of a stopped clock, as the saying goes, that is right twice a day.

Unlikely events happen every day: if you flip a coin eight times, the chance of getting all heads is less than 1 in 250. But it can happen, and when it does, that does not mean that before the event, observers had reason to consider it likely. The trolls are trying to argue that, simply because it eventually happened, observers in 2013 should have seen hyperinflation as a likely outcome. This is not a logical argument.

If I had, like 90+ percent of the economics profession, completely missed the two biggest asset bubbles in world history (the US stock market bubble of the late 1990s, and the $8 trillion dollar housing bubble of the 2000s), the trolls would have a case against me. These bubbles were clearly identifiable and were in fact identified at that time. Their bursting was basically inevitable, as were the recessions that resulted. Venezuela’s hyperinflation had no such inevitability in 2013, or even much later.

The trolls are also taking advantage of the headline, which, as most journalists know, is not written by the author.  The headline stated, out of context, that “this economy is not the Greece of Latin America.” While I did make the comparison to Greece, people who read past the headline would see that it was only to explain that because Venezuela had its own central bank and currency (unlike Greece) it could change its macroeconomic policy and resolve its worst economic problems ? which was also true, even after oil prices crashed in 2014.

The trolls also benefit from the profound and systematic bias on Venezuela in the major media over the past 20 years ? for a nice recent academic study, see here.

Part of the way this one-sided and often misleading public discourse is maintained is through the trolling, harassment, and punishment of anyone who presents a view ? or even inconvenient facts ? that fall outside the dominant narrative. This narrative happens to coincide with a more than 16-year effort by the US government to bring about regime change in Venezuela.

That is why the trolls piled on like a swarm of army ants in response to my simply stating the publicly available facts about the Trump administration’s financial embargo on Venezuela, in a discussion of hyperinflation there. None of the other major media reports over the weekend bothered to mention this highly relevant information, and the trolls don’t want it to happen again.

That’s why I am responding to the trolls this time. It is important to show that they cannot intimidate everyone. As FDR famously said, “I welcome their hatred.”

Of course, if any of the trolls who have some knowledge of Venezuela would like to have a public debate on any of this, they are invited.  I’m sure it would get a large internet audience because there is so little public debate about Venezuela, or US policy in Latin America generally. My invitation extends to any of the non-troll journalists, academics, or others who write about the subject matter. I don’t expect any of the trolls ? or those who share their beliefs ? to have the courage to defend their views in a debate. But if you do, bring it on.

En español

I have rarely responded to trolls because ? well, what’s the point? It’s not like they care about facts or logic.

For example, Francisco Toro, a blogger who fulminates about Venezuela and appears in the Washington Post, has been trolling me for years and I have almost always ignored him. Dany Bahar, an economist at the Brookings Institution, actually trolled me on a TV show, excitedly holding up to the camera a Guardian article that I wrote nearly five years ago, to castigate me. Cathy Newman, a news presenter for Channel 4 ? one of the top three most-watched TV stations in the UK ? did the same thing in the middle of a newscast in which she was supposedly interviewing me. And now Brian Ellsworth, a journalist  for Reuters who reports from Venezuela, has joined the latest avalanche of trolls, bots, and blowhards who swarmed me because I dared to mention on BBC World TV, on Friday night, that Trump’s financial embargo against Venezuela makes it more difficult for any government to stabilize the economy ? a fact that no economist would dispute. Indeed that is the purpose of the embargo.

Let’s start with what all of these trolls ? including the more educated ones noted above ? have in common.  They all rely on one article (out of dozens) that I wrote about Venezuela. Not one of them challenges a single fact in that article. That tells you a lot right there about the weakness of their “argument.”

Their glorious “gotcha” is not about any facts but rather a prediction. I wrote that Venezuela was not facing any serious threat of hyperinflation. That was certainly true in November 2013, the date of the article. Economists most often define hyperinflation as a rate of inflation that exceeds 50 percent per month. Although we don’t have official statistics for inflation in Venezuela since 2015, available estimates (from the opposition-controlled National Assembly) do not show Venezuelan inflation at that level until November of 2017, four years later.

The trolls imply that I should have known in November 2013 that Venezuela would eventually reach hyperinflation. At the time, as I noted in the Guardian article, Venezuela was facing a dynamic in which there was a significant parallel market for the dollar, and the price of the dollar in that market was rising.  This increased inflation (by increasing the price of imports). The inflation, in turn, drove more people to buy dollars, which pushed the black market price of the dollar up further. If such a spiral is allowed to continue it will eventually lead to hyperinflation.

However, I assumed that the government would at some point break this cycle by unifying the exchange rate, thereby getting rid of (or reducing to irrelevance) the parallel market.  That assumption turned out to be wrong, but it was a reasonable assumption at the time. In fact, economist Francisco Rodríguez, then at Bank of America Merrill Lynch, made the same assumption at that time. Rodríguez knows more than probably anyone in the world about the Venezuelan economy; and he has repeatedly been proven right about the Venezuelan economy while almost all of the sources that the media quotes on this subject ? especially on government finances ? were repeatedly proven wrong.

But most economists would have made the same assumption at that time. Hyperinflations are not that common; there were only about six episodes in Latin America in the twentieth century. And as I noted at the time, Venezuela had more than $36 billion in international reserves, a sizeable current account surplus of $11 billion (2.9 percent of GDP) and was not facing any imminent balance of payments crisis. There wasn’t any reason for thinking that the government would ride its overvalued fixed exchange rate all the way to hyperinflation.

On the contrary, there were other reasons to assume, in November 2013, that the government would take the necessary measures before reaching hyperinflation. In 2002, for example, despite serious political turmoil (including a military coup and devastating opposition oil strike), then president Hugo Chávez floated the currency. Central Bank reserves actually increased during this period. And in 2014, the government announced that it was going to unify the exchange rate, although it did not follow through. In May 2016, as Toro noted, a team of economists from the Union of South American Nations (UNASUR), went to Venezuela and proposed a plan, which included unification of the exchange rate and other measures that could reasonably be expected to stop the acceleration of inflation. I was part of that team. It was not at all clear at that time whether the government would adopt the plan or not.

The trolls would say that they predicted disaster, and indeed they did: they predicted it every year ? ever since Chávez was elected in 1998, even when the economy was booming and inflation was falling. But that is the accuracy of a stopped clock, as the saying goes, that is right twice a day.

Unlikely events happen every day: if you flip a coin eight times, the chance of getting all heads is less than 1 in 250. But it can happen, and when it does, that does not mean that before the event, observers had reason to consider it likely. The trolls are trying to argue that, simply because it eventually happened, observers in 2013 should have seen hyperinflation as a likely outcome. This is not a logical argument.

If I had, like 90+ percent of the economics profession, completely missed the two biggest asset bubbles in world history (the US stock market bubble of the late 1990s, and the $8 trillion dollar housing bubble of the 2000s), the trolls would have a case against me. These bubbles were clearly identifiable and were in fact identified at that time. Their bursting was basically inevitable, as were the recessions that resulted. Venezuela’s hyperinflation had no such inevitability in 2013, or even much later.

The trolls are also taking advantage of the headline, which, as most journalists know, is not written by the author.  The headline stated, out of context, that “this economy is not the Greece of Latin America.” While I did make the comparison to Greece, people who read past the headline would see that it was only to explain that because Venezuela had its own central bank and currency (unlike Greece) it could change its macroeconomic policy and resolve its worst economic problems ? which was also true, even after oil prices crashed in 2014.

The trolls also benefit from the profound and systematic bias on Venezuela in the major media over the past 20 years ? for a nice recent academic study, see here.

Part of the way this one-sided and often misleading public discourse is maintained is through the trolling, harassment, and punishment of anyone who presents a view ? or even inconvenient facts ? that fall outside the dominant narrative. This narrative happens to coincide with a more than 16-year effort by the US government to bring about regime change in Venezuela.

That is why the trolls piled on like a swarm of army ants in response to my simply stating the publicly available facts about the Trump administration’s financial embargo on Venezuela, in a discussion of hyperinflation there. None of the other major media reports over the weekend bothered to mention this highly relevant information, and the trolls don’t want it to happen again.

That’s why I am responding to the trolls this time. It is important to show that they cannot intimidate everyone. As FDR famously said, “I welcome their hatred.”

Of course, if any of the trolls who have some knowledge of Venezuela would like to have a public debate on any of this, they are invited.  I’m sure it would get a large internet audience because there is so little public debate about Venezuela, or US policy in Latin America generally. My invitation extends to any of the non-troll journalists, academics, or others who write about the subject matter. I don’t expect any of the trolls ? or those who share their beliefs ? to have the courage to defend their views in a debate. But if you do, bring it on.

With its authority recently upheld by the courts, Puerto Rico’s Federal Management and Oversight Board (known simply as “the Board”) continues to impose harsh austerity measures on the people of Puerto Rico. But while residents face pension cuts, school closures, massive layoffs, and a continued recession, the same austerity does not apply to the Board itself, which is spending hundreds of millions on its own expenses and a myriad of consultants, advisers, and lawyers. Nor does the austerity appear to apply to some of Puerto Rico’s bondholders either.

Last week, the Board, along with the government of Puerto Rico, announced they reached a deal with owners of bonds in Puerto Rico’s Sales Tax Financing Corporation (COFINA), proudly claiming it would save the commonwealth $17.5 billion in debt service. While technically true, the claim obscures the fact that the deal will still see Puerto Rico use its scarce resources to pay these creditors some $33 billion over the next 40 years on what was initially $17 billion in principal. Overall, the bondholders will recover nearly 75 percent of the initial value of their investment, a fairly generous settlement from a bankrupt entity still trying to recover from a lost decade — without economic growth — followed by  the devastation of Hurricane Maria.

In fact, judging from the Board’s most recent fiscal plan, Puerto Rico won’t even have the money to pay for the bonds that would be issued as part of the settlement. The board projects the island to have about a $4 billion surplus over the next 40 years, leaving authorities at least $28 billion short of satisfying this deal with creditors. The settlement is actually based on revenue projections from an earlier version of the Board’s fiscal plan, which were revised down in June when the newest version of the plan was certified. This mistake, rather than the overall generosity of the offer, now puts in question the future of this deal. Will the Board revise its fiscal plan yet again to demand even greater austerity in order to satisfy these creditors’ claims?

To make matters worse, a close look at who the current COFINA bondholders are reveals a series of vulture funds that bought the bonds at steep discounts after the initial default, and immediately after Hurricane Maria. Investors now stand to make huge profits from that move, while most Puerto Ricans suffer through continued austerity. One of the largest investors in COFINA bonds, GoldenTree Asset Management, more than doubled its holdings in the aftermath of Hurricane Maria. Court filings show that as of August 1, 2018, GoldenTree owned $1.5 billion in COFINA bonds, up from $587 million in August 2017. The bonds in question traded as low as 20 cents on the dollar during this time period, which means a 75 percent recovery rate could amount to an enormous profit.

GoldenTree is far from the only vulture fund that stands to benefit though. Initially, one of the loudest voices against reaching a deal with COFINA bondholders was the group representing General Obligation (GO) bondholders, who claimed that they had priority over other creditors for repayment. However, two of the biggest GO bondholders, Aurelius Capital Management, and Monarch Alternative Capital have recently started buying up COFINA bonds, and now stand to benefit from this agreement themselves. Since the storm, court filings show how the two funds have increased their holdings of COFINA securities to $488 million from $39 million.

Given that even its own projections show the island cannot afford such a deal, it seems reasonable to wonder why the Board would approve this generous offering to the vulture funds. Some Board’s members’ connections to those who profited from the initial bond offerings, and now stand to profit from this agreement, might provide some clues.

Board chairman José B. Carrión has family ties to the leadership of Banco Popular, one of the island’s largest banks and an underwriter on much of the debt in question. Carlos M. García, another board member, was president of the Government Development Bank when billions in COFINA debt was issued. At the time, he had just finished a stint at Santander Securities, another of the debt’s underwriters that had previously been led by José Ramón González, another Board member. The revolving door can be hard to keep up with. Though financial disclosures indicate that those board members who held Puerto Rican bonds sold their assets upon joining the Board, the network of banks, lawyers, and officials who pushed Puerto Rico into its current state are the same ones now benefiting from the proposed resolution.

The new bonds will be issued by Citi, another underwriter of the initial offerings. And here is where the web gets even more tangled. Citi has been brought on by the Board as an advisor and has itself hired lobbyist Manny Ortiz, “Puerto Rico’s go-to guy in Washington,” who has close ties to Governor Rossello and active contracts with Puerto Rican government institutions. Until last year, Ortiz was also a registered lobbyist for Ambac, one of the largest insurers of COFINA bonds, with an exposure of $7.3 billion. Ambac’s stock immediately shot up when the deal was announced. Everyone seems to be making money off Puerto Rico’s crisis.

Perhaps worst of all, the same players seem to be making the same mistakes, pushing Puerto Rico into unsustainable debt obligations and continuing the use of a complex financial instrument designed by Goldman Sachs, that has proven devastating to the island. The new bonds will include a type of security called a “Capital Appreciation Bond,” which rather than paying out the interest over the life of the bond, accrues the interest over the years, generating huge returns for investors — and a massive payout down the road for Puerto Rico. On an initial principal of just $2.7 billion, the CAB bonds’ total value is over $15.4 billion.

The timing of the deal also raises questions, since the legality of the bonds in question is being reviewed by the courts, who have yet to issue their ruling. Further, the Board’s investigation into the accumulation of debt in Puerto Rico has also yet to be released (it is scheduled for August 20). Given the involvement of so many of the same players in the original issuances, there could be good reason to reach a deal before the messy details of how these bonds came to be are made public.

Those who initially profited from issuing unsustainable amounts of debt through underwriting and advising fees are now profiting from the restructuring of the same debt. While the actors who pushed Puerto Rico into its current crisis avoid accountability, the island’s residents are left to suffer the consequences, enduring harsh austerity measures imposed upon them for the benefit of those who created the island’s economic ? not natural ? disaster.

With its authority recently upheld by the courts, Puerto Rico’s Federal Management and Oversight Board (known simply as “the Board”) continues to impose harsh austerity measures on the people of Puerto Rico. But while residents face pension cuts, school closures, massive layoffs, and a continued recession, the same austerity does not apply to the Board itself, which is spending hundreds of millions on its own expenses and a myriad of consultants, advisers, and lawyers. Nor does the austerity appear to apply to some of Puerto Rico’s bondholders either.

Last week, the Board, along with the government of Puerto Rico, announced they reached a deal with owners of bonds in Puerto Rico’s Sales Tax Financing Corporation (COFINA), proudly claiming it would save the commonwealth $17.5 billion in debt service. While technically true, the claim obscures the fact that the deal will still see Puerto Rico use its scarce resources to pay these creditors some $33 billion over the next 40 years on what was initially $17 billion in principal. Overall, the bondholders will recover nearly 75 percent of the initial value of their investment, a fairly generous settlement from a bankrupt entity still trying to recover from a lost decade — without economic growth — followed by  the devastation of Hurricane Maria.

In fact, judging from the Board’s most recent fiscal plan, Puerto Rico won’t even have the money to pay for the bonds that would be issued as part of the settlement. The board projects the island to have about a $4 billion surplus over the next 40 years, leaving authorities at least $28 billion short of satisfying this deal with creditors. The settlement is actually based on revenue projections from an earlier version of the Board’s fiscal plan, which were revised down in June when the newest version of the plan was certified. This mistake, rather than the overall generosity of the offer, now puts in question the future of this deal. Will the Board revise its fiscal plan yet again to demand even greater austerity in order to satisfy these creditors’ claims?

To make matters worse, a close look at who the current COFINA bondholders are reveals a series of vulture funds that bought the bonds at steep discounts after the initial default, and immediately after Hurricane Maria. Investors now stand to make huge profits from that move, while most Puerto Ricans suffer through continued austerity. One of the largest investors in COFINA bonds, GoldenTree Asset Management, more than doubled its holdings in the aftermath of Hurricane Maria. Court filings show that as of August 1, 2018, GoldenTree owned $1.5 billion in COFINA bonds, up from $587 million in August 2017. The bonds in question traded as low as 20 cents on the dollar during this time period, which means a 75 percent recovery rate could amount to an enormous profit.

GoldenTree is far from the only vulture fund that stands to benefit though. Initially, one of the loudest voices against reaching a deal with COFINA bondholders was the group representing General Obligation (GO) bondholders, who claimed that they had priority over other creditors for repayment. However, two of the biggest GO bondholders, Aurelius Capital Management, and Monarch Alternative Capital have recently started buying up COFINA bonds, and now stand to benefit from this agreement themselves. Since the storm, court filings show how the two funds have increased their holdings of COFINA securities to $488 million from $39 million.

Given that even its own projections show the island cannot afford such a deal, it seems reasonable to wonder why the Board would approve this generous offering to the vulture funds. Some Board’s members’ connections to those who profited from the initial bond offerings, and now stand to profit from this agreement, might provide some clues.

Board chairman José B. Carrión has family ties to the leadership of Banco Popular, one of the island’s largest banks and an underwriter on much of the debt in question. Carlos M. García, another board member, was president of the Government Development Bank when billions in COFINA debt was issued. At the time, he had just finished a stint at Santander Securities, another of the debt’s underwriters that had previously been led by José Ramón González, another Board member. The revolving door can be hard to keep up with. Though financial disclosures indicate that those board members who held Puerto Rican bonds sold their assets upon joining the Board, the network of banks, lawyers, and officials who pushed Puerto Rico into its current state are the same ones now benefiting from the proposed resolution.

The new bonds will be issued by Citi, another underwriter of the initial offerings. And here is where the web gets even more tangled. Citi has been brought on by the Board as an advisor and has itself hired lobbyist Manny Ortiz, “Puerto Rico’s go-to guy in Washington,” who has close ties to Governor Rossello and active contracts with Puerto Rican government institutions. Until last year, Ortiz was also a registered lobbyist for Ambac, one of the largest insurers of COFINA bonds, with an exposure of $7.3 billion. Ambac’s stock immediately shot up when the deal was announced. Everyone seems to be making money off Puerto Rico’s crisis.

Perhaps worst of all, the same players seem to be making the same mistakes, pushing Puerto Rico into unsustainable debt obligations and continuing the use of a complex financial instrument designed by Goldman Sachs, that has proven devastating to the island. The new bonds will include a type of security called a “Capital Appreciation Bond,” which rather than paying out the interest over the life of the bond, accrues the interest over the years, generating huge returns for investors — and a massive payout down the road for Puerto Rico. On an initial principal of just $2.7 billion, the CAB bonds’ total value is over $15.4 billion.

The timing of the deal also raises questions, since the legality of the bonds in question is being reviewed by the courts, who have yet to issue their ruling. Further, the Board’s investigation into the accumulation of debt in Puerto Rico has also yet to be released (it is scheduled for August 20). Given the involvement of so many of the same players in the original issuances, there could be good reason to reach a deal before the messy details of how these bonds came to be are made public.

Those who initially profited from issuing unsustainable amounts of debt through underwriting and advising fees are now profiting from the restructuring of the same debt. While the actors who pushed Puerto Rico into its current crisis avoid accountability, the island’s residents are left to suffer the consequences, enduring harsh austerity measures imposed upon them for the benefit of those who created the island’s economic ? not natural ? disaster.

Welcome to our live blog of Mexico’s historic elections today. See our introductory post here.

All update times are Eastern time zone.

UPDATE 11:12 PM: FEPADE provided an updated tally on electoral complaints received throughout the day. Throughout the country there were 394 complaints at the federal level, and even more concerning local races. 19 people were arrested for federal electoral crimes. 

UPDATE 11:08 PM: And now President Donald Trump has tweeted his congratulations to president-elect Obrador. 

 

UPDATE 11:01 PM: Mitofsky has now released its Senate exit polls, which indicate a possible majority for Morena and allies with 56-70 seats. There are 128 seats in the senate. 

Mitofsky mex sen poll 

UPDATE 10:36 PM: U.S. Congressional Progressive Caucus co-chairs, Rep. Raul Grijalva and Rep. Mark Pocan, have released a statement following Obrador’s likely victory. 

CPC mexico

UPDATE 10:27 PM: Pollster Mitofsky has just released exit poll data estimating Moreno and it’s allies in “Together We Will Make History” winning between 256 and 291 seats – a majority. 
WhatsApp Image 2018 07 01 at 10.17.10 PM

UPDATE 10:12 PM: Argentina issued a statement congratulating Obrador on his election victory. Again, official results are based on only 0.32 percent of total ballots, but as Richard Ensor of The Economist points out, these early returns indicate a broad-based victory for Obrador:  

UPDATE 9:45 PM: Official results have just started being posted by INE, but the results appear irreversible. Ricardo Anaya of the PAN has also just conceded defeat to López Obrador. 

UPDATE 9:31 PM: More exit polls are giving AMLO around 50 percent of the vote. ADN has AMLO with 51 percent to Anaya’s 23 percent, with Meade again at 18 percent. The Washington Post is reporting: “Several exit polls gave Lopez Obrador a double-digit lead over his two closest competitors….”

UPDATE 9:18 PM: El Financiero is also projecting Morena with 38 percent of the vote for the chamber of deputies (the legislative lower house), the PAN with 22 percent, the PRI with 18 percent, the PRD with 6 percent, and the PT (Workers’ Party) with 4 percent.

UPDATE 9:16 PM: The ruling PRI’s presidential candidate, Jose Antonio Meade, has conceded defeat to Obrador before official results are announced. 

UPDATE 9:11 PM: El Financiero’s presidential exit poll has been released and it shows Morenas’ Obrador with 49 percent of the vote. Anaya of the PAN is in second with 29 percent, and the PRI’s Meade is in third with 18 percent, according to the poll. 

UPDATE 8:52 PM: The 5:00 pm report from Diálogos por la Democracia is now available. They say they “received and tracked and directed” 198 citizen complaints, of which 52 were for “soliciting votes for payment, promises of money, or other consideration.”

UPDATE 8:43 PM: An observer in Tlaxcala reported at 8:20 pm:

[They’re conducting the count for] President and diputado at the same time here In Tlaxcala. All mesas/casillas can decide if they are going to take additional security measures. At this casilla, they signed (have to confirm how many / who) as an extra security measure. Most we visited today were not signing. In another area of Tlaxcala they had stolen some ballots previous to the election. In addition to reprinting, they required signatures (2 mesa, 2 partidos) on every ballot. Wind in a tent is complicating working with lots of paper ballots…

Counting in Tlaxcala.

UPDATE 8:37 PM: In a series of tweets (ongoing), the #Verificado2018 project reported the confirmed cases of electoral violence and irregularities in Puebla state today. A PRI activist was killed in the municipality of Acolihuia. At the Emiliano Zapata school in Barranca Honda, 8-10 gunmen showed up at around 2 PM and fire off shots, temporarily closing the center. At a voting center in Colonia Fuentes de San Aparicio shots were fired and ballots for president and governor were stolen. Ballots were also stolen in San Sebastián by seven armed individuals. 

UPDATE 8:28 PM: An observer in Jilotepec reports:

Here in Section 2260 in Jilotepec, the counting of blank ballots is finished and now a poll worker is reading out the number of registered voters that have voted on each page of the thick voter registry for casilla contigua 3 while all of the party representatives confirm that his count matches their count, page by page. In a few places there are discrepancies which they resolve. In total, 459 of 650 registered voters deposited ballots in the urns of this casilla.

Counting at Jilotepec section 2260.

With that done, on to the tallying, starting with the ballots for the presidential election. They are all dumped on a table by the president of the casilla, and the poll workers begin to unfold each ballot. Another long process. [They’re tallying the municipal ballots and the presidential ballots at the same time.]

UPDATE 8:20 PM: At 8:06 pm, observers reported that rain did indeed begin to pour at casilla 0734 in Coyoacán, “forcing a hurried move inside an auditorium next to the casilla.”

Rain at casilla 0734 in Coyoacan.

UPDATE 8:16 PM: Exit polls being reported by El Financiero project the next governor of Jalisco will be the Citizens Movement candidate Enrique Alfaro, and in Guanajuato the “Por Guanajuato al frente” candidate Diego Sinhué. The governor’s race in Yucatán is projected to be between the PAN and Citizens Movement candidate Mauricio Vila and the PRI-Green Party candidate Mauricio Sahuí. In Veracruz, the race is projected to be down to the “Together We Will Make History” candidate Cuitláhuac García and the “Por Veracruz al frente” candidate Miguel Ángel Yunes. In Puebla, the race is projected to be between Miguel Barbosa of the “Together We Will Make History” coalition, and the candidate of the “Por Puebla al frente,” Martha Erika Alonso.

UPDATE 7:59 PM: An observer reports: “Here at casilla 0734 [in Coyoacán], they are lining up on the ground to help organize the ballots. But there is no electric light. They are trying to run a cable to a nearby store. And it is about to start raining. Lining up sheets of paper. They have a tent, but the ballots are being organized on the ground and if it rains they may get wet.”

Casilla 0734, preparing to count.

UPDATE 7:51 PM: At 7:42 pm, an observer at casilla Tlaxcala 453 reported: “They closed the gate at 6 (people in line within the fence could stay in line/vote) so people broke the fence to get in. Looks like police had it all under control, no further incident.”

Fence at casilla Tlaxcala 453

Broken fence at casilla Tlaxcala 453.

UPDATE 7:42 PM: El Financiero reports exit polls projecting candidates from the “Together We Will Make History” (Juntos Haremos Historia) Coalition (of which AMLO is the presidential candidate) winning the governors’ seats in Morelos, Tabasco, Chiapas, Puebla, and Veracruz  [between two candidates in each] as well as Mexico City.

UPDATE 7:34 PM: More updates are coming in from the network of observers that have been out across the country today: “District 30 in Estado de México: no serious irregularities to report all along our route today, from Valle de Bravo to Tejupilco and back, 9 polling stations and about 30 casillas. High participation, roughly 70%, and calm atmosphere everywhere …Lots of dedicated citizens doing their best to make these elections happen in a peaceful and orderly manner. Polls just about to close back here in Valle de Bravo and the initial counting process will soon begin under a tent in a playground protecting us from heavy rain. Here there are four casillas bunched together in one small space but somehow it has worked.”

UPDATE 7:31 PM: An observer reports on the closing of polls in a different center in Jilotepec. “Here in casilla contigua 3 of section 2260 in Jilotepec they’ve just brought the five ballot boxes from outside into a classroom where the poll workers are setting things up and the party reps, two per party here, are sitting behind desks and waiting. There was a little drama a short while ago when two elderly women came to vote just as the president of the casilla declared the casilla closed. The late-comers were not allowed to vote. A younger woman was irate as she said that the women had arrived at the center several minutes before 6 and had had trouble identifying the casilla where they could vote.”

And, another update a few minutes later which adds more detail on the process at the close of the day: “The poll workers are now counting the blank ballots. Afterwards, the total of blank ballots and filled in ballots will be calculated with the expectation that it will match the total of blank ballots that the casilla was given. Once the blank ballots are counted the president of the casilla draws two lines through each blank ballot, making them null and void. Though the president is marking the ballots quickly it’s a slow process given that there five sets of at least a hundred blank ballots.”
WhatsApp Image 2018 07 01 at 7.27.38 PM

UPDATE 7:12: As a long election day comes to a close, a long night of counting begins. An observer reports: “We are now in the closing of a polling station in Jilotepec. In accordance with Mexican law, they have asked all but one representative of each party to leave. One person from each party will stay behind for the opening of the ballot boxes and the initial organization and counting of the ballots. Here in the Estado de México, there are five races, so five separate ballots, which all need to be opened and organized. This is just the first step in a long process of getting this count started.”

UPDATE 7:10 PM: Bloomberg’s and El Financiero are beginning to release exit poll data. Eric Martin writes for the Bloomberg live-blog

We’re starting to get our first exit polls in, and El Financiero is projecting that Claudia Sheinbaum, the Morena candidate, will be the next mayor of Mexico City.

Sheinbaum’s win was widely expected, as she has been leading polls. Sheinbaum, a 55-year-old scientist, previously served as head of the Tlalpan neighborhood in southern Mexico City. Candidates from the left or left-led coalitions have controlled the mayor’s office in the capital since the 1990s.

Martin notes that governor races in Pueblo and Veracruz are “too close to call.” 

UPDATE 7:06 PM: Update from an observer at 6:03 PM local time: “Casillas 0734 & 0732 in Coyoacán, all quiet. High turnout. 80% & 76.5%. At 6 PM noone was in line. The president declared the casilla closed. everyone applauded and some shouted ‘para democracia.'”

UPDATE 7:03 PM: As polling centers begin to close, INE has begun counting votes from Mexicans abroad. Journalist Jorge Ramos noted earlier that it was “shameful and a failure” that only 98,000 sent votes from abroad when there are more than 12 million Mexicans living outside the country. In a tweet, Ramos wrote: “It seems that the system is made so that we do not participate.”

UPDATE 6:58 PM: The #Verificado2018 project provides an update on reported violent conflicts impacting the vote in Veracruz. According to the local electoral office, casilla 0955 en Coatzintla was forced to close twice due to violence, but voting has continued. In Coatzacoalcos a shootout occured, but not, as had been reported, near a voting center. 

UPDATE 6:46 PM: INE member Ciro Murayama notes that due to high levels of participation many voting centers may not be able to close at 6 PM (local time), which may delay the release of preliminary results (expected to begin around 8 PM). Meanwhile, Leonel Fernandez, the head of the OAS electoral observation mission has issued a statement noting that the election has so far transpired without major incidents, and has seen “massive participation.” 

UPDATE 6:30 PM: There are images posted on Twitter, and media reports, of men burning ballots at casilla 0381 in the Escuela Primaria José María Morelos y Pavón in Chilcota, Michoacán.

UPDATE 6:24 PM: @Andalalucha has been Tweeting about the numbers of people waiting to vote at casillas especiales:

Polling places close at 6:00 pm local time.

UPDATE 6:15 PM: T.M. Scruggs, an observer with the Scholars’ and Citizens’ Network for Democracy, reports:

All 9 casillas visited today in 4 towns and cities in the SW part of Mexico State have proceeded with tranquillity and appear organized and well run. No waiting longer than 20 minutes observed except at the Casilla Especial in Ixtapan de la Sal where the wait was at least an hour for the non-local residents.

The generalized late opening of voting booths appears to be related to the complexity of five ballots due the five levels of voting, from federal to municipal level. Even where the materials arrived on time the poll workers needed to arrive earlier than last year’s comparatively less complicated one. In SW Mexico State for example the ten casillas we have observed started setting up at 7:30 am when they really needed to begin at 7 am, the hour designated as such by the INE. All these casillas opened between 8:30 and 9:30 am [correction: 9:00 am] with exception of one that opened just after 9:30 am.

UPDATE 5:49 PM: MVS Noticias reports that observers from Central America are concerned by the lack of sufficient ballots at the casillas especiales, and plan to report to the INE about it.

El Economista also reports on the “chaos” in special polling places, where people have been waiting several hours to vote.

UPDATE 5:33 PM: An update on casilla Alvaro Obregón 3458 from a different observer: “When we arrived, dozens were milling outside, one woman in particular appeared to be floor manager, on the phone she openly talked about running electoral operation, when I approached she subsequently ducked into house in front of casilla, we approached INE official, claimed not to be aware; subsequently he came out and publicly admitted the PRD was fighting tooth and nail for this casilla, we have audio; after our complaint the area cleared out!”

PRD house across the street from casilla Alvaro Obregón 3458.
PRD house across the street from casilla Alvaro Obregón 3458.

UPDATE 5:19 PM: In Iztapalapa, some 583 ballots were stolen, according to the head of government in Mexico City, José Ramón Amieva (see 2:41 pm update, below). He added that there was no process for the replacement of ballots and so those individuals at Casille 2567 in Ampliación Santiago, will not be able to vote. Arnieva also noted the late opening at various polling centers this morning. 

UPDATE 5:09 PM: FEPADE provides updated figures on electoral complaints. By 2 PM local time, there had been 1,106 denunciations of possible electoral crimes across the country, 640 at the community level and 466 at the federal level. The states with the highest number of complaints are Pueblo (127), CDMX (51), Mexico State (46), Chiapas (38), Oaxaca (27) and Veracruz (25). Seventeen individuals have been detained.  

UPDATE 5:02 PM: Aristegui Noticias reports that a Labor Party activist, Flora Reséndiz González, was killed today when leaving her home in the community of Contepec in Michoacán state. In another report, the Michoacán electoral institute confirmed to Aristegui Noticias that it had cancelled elections in the indigenous community of Nahuatzen and has had to close some voting centers in other communities in the region following electoral violence and other irregularities. 

UPDATE 4:53 PM: More from an observer at casilla 3458 Álvaro Obregón, CDMX: “The Morena representative told us and the INE representative that he had filed a complaint with FEPADE about the obvious vote buying by what he said was the PRD.” The observer noted that the house the PRD is operating from is located across the street from the voting center.

Since Thursday FEPADE, the electoral crimes authority, has received 534 complaints according to the agencies director, Héctor Días Santana. 460 of the complaints came before election day, while 74 were recorded by noon today. 

UPDATE 4:30 PM: An observer reported at 3:17 pm ET: “250/534 have voted in Tchiautempan, Tlaxcala (section 133). Busy, tranquilo, organized. Things have been pretty calm in Tlaxcala (besides the 1 chaotic one we saw with halcones).”

Journalist James Fredrick reported that voters were waiting more than six hours to vote at the Hospital General, Del. Cuauhtemoc due to insufficient ballots:

Another observer reports: “At casilla 3458 Álvaro Obregón, CDMX, we spoke with a woman who made an accusation to us that as soon as we appeared a group scattered that had been checking people’s names and looking at their phones. The INE representative on site and the president of the casilla said they hadn’t seen anything irregular. A bit more than 50 percent have voted here.”

UPDATE 4:16 PM: An observer reports: “In the rural areas around Jilotepec, things have been busy, but calm. There haven’t been many irregularities, but in Soyaniquilpan, Morena representatives had reported to the INE officials excessive use of cell phones inside the polling station by members of other parties – this can be a way of organizing the illegal coercion of voters. Outside that polling place, we saw others, on their phones, with lists of voters. This indicates to us that the party in question – in this case, the PRI – is organizing the mobilization of voters in ways that violate the electoral laws.”

Another observer updates us from elsewhere in Jilotepec: “At 2:50 pm, 58 percent of registered voters had voted in the rural voting center of section 2296 in Doxhicho, Jilotepec, EDOMEX. Everywhere I’ve been poll workers are commenting on the unusually high level of voter participation so far in these elections. And I’ve encountered no major incidents in the seven voting centers I’ve visited in the municipality of Jilotepec.”

UPDATE 4:09 PM: The NGO Democracia sin Pobreza is mapping reports of vote-buying, including locations where the reports have been validated with photographic or video evidence.

The RUCD has posted its first formal report (only in Spanish, for now) here.

Jan-Albert Hootsen of the Committee to Protect Journalists Tweeted: “In Parral (Chihuahua State, northern Mexico), a journalist was reportedly beat up as he was reporting at a voting booth,” and “Media in Veracruz report that a voting station was temporarily closed due to the appearance of a group of unidentified armed individuals. The booth is now open again.”

UPDATE: 3:54 PM: More reports of problems in Ecatepec. @Andalalucha posted a video on Twitter of voters, who reportedly have waited over four hours, demanding more ballots so that they can vote. And the RUCD observation group that includes John Ackerman says: “In Ecatepec, State of Mexico our observation group was threatened by an aggressive individual over our effort to prevent fraud. We also spoke to several residents who said they were offered goods and money in exchange for their vote and a report of someone trying to vote twice.”

UPDATE 3:10 PM: Reports of ballot shortages are coming in from various “casillas especiales,” for voters outside of their regular precincts. Each casilla especial has only 750 ballots, but in some locations, many more than that are turning out to vote. Journalist Martha Pskowski Tweeted around 2:00 pm ET:

An observer reported at 1:00 pm: “In Oxtotitlán, Mexico State, obvious alcohol consumption in the small plaza where the voting area is located. Also multiple small stores selling beer and other drinks.” Mexican states have a “dry law” prohibiting alcohol sales for at least 24 hours around election day.

UPDATE 2:59 PM: Journalist Arturo Cano reports that Morena has denounced vote-buying by the PRD at casilla 1699 en el Barrio Los Reyes, Iztacalco, Mexico City:

UPDATE 2:49 PM: International media, as well as numerous electoral observers, are reporting long lines at polling stations in Mexico City and various locations in Mexico State, and elsewhere:

Meanwhile, rumors of “erased” ballot marks have been a concern today. Dialogos por la Democracia tells voters that they can indeed use their own pen to mark their ballot:


UPDATE: 2:41 PM: The #Verificado2018 project reports that a casilla president in Iztapalapa (a Mexico City borough) says armed gunmen stole ballots from him. And it reports that Instituto Electoral de Michoacán (IEM) electoral officials have confirmed the armed theft of ballots, but say they do not know how many have been stolen.

UPDATE 2:06 PM: An observer reports: “At Jilotepec, section 2260, casilla contigua 1, around 160 people had voted at 12:19 pm.”

Another observer in Coyoacán reports: “Casilla 0354: one basic and 6 contiguous, 4565 voters, full, we managed to get pollsters out of the polling place.”

Casilla 0354, Coyoacán

UPDATE 1:58 PM: At 1:22 pm, an observer reported: “Casilla 0481, Coyoacán. Only evident issue is small size of the local which delays vote.”

Casilla 0481, Coyoacan

UPDATE 1:54 PM: Observers have consistently reported long lines at “special” voting centers, set up to allow people traveling outside their home district to vote. Ciro Murayama, an INE electoral counselor, tweeted that each of these centers has only 750 ballots as stipulated in the electoral law and that many would not be able to vote. Christy Thornton tweeted that at one such voting center in Jilotepec she counted around 200 people in line to vote.

UPDATE 1:47 PM: Duncan Tucker, regional media manager for Amnesty International tweets: 

UPDATE 1:20 PM: INE president Lorenzo Córdova recently made a statement, declaring the electoral process was occurring in a situation of calm and without major incidents. He said that, of the 156,807 casillas, only 4 were not installed. Observers, however, have reported that a large number of casillas did not open on time.

UPDATE 1:14 PM: An observer reports: “A somewhat chaotic voting center in San Isidro Buensuceso (neighborhood), San Pablo del Monte (municipio), sección 363, Tlaxcala. Casillas are close together. We saw a ‘halcón’ ? a boy up on the balcony to watch the votes happening below [which is illegal]. People watching/monitoring voters (no lists). No security. The INE told us that the municipal government refused to provide security or lunch, citing the veda electoral [the pre-election day period in which campaigning and politicking is banned, as is dissemination of government messages].”

Casilla at San Isidro Buensuceso

UPDATE 1:03 PM: More reports are coming in of how widespread the late opening of polling places has been today. A observer tells us, “Here in Districto 1 of Jilotepec, only 11 of 116 casillas were open at 9:20 am.” José Roberto Ruiz, an electoral advisor to the INE, Tweeted earlier today:

UPDATE 12:54 PM: Journalist Jeff Abbott Tweeted to us:

UPDATE 12:49 PM: An RUCD brigade that includes Father Miguel Concha, director of the Vitoria Center; Laura Carlsen, director of the Americas Program at the Center for International Policy; Father Alejandro Solalinde; and law professor John Ackerman of the Instituto de Investigaciones Juridicas at UNAM is beginning their voting observations in Ecatepec, Mexico State, where they will visit 11 casillas. They recorded this message earlier (and are planning to livestream here).

Also in Ecatepec, an observer reports: “A lot of problems in Ecatepec. We already saw two ‘casas amigas’, intimidations, etc.” Latin American studies professor Christy Thornton, who is also observing the elections today, has previously described a casa amiga as a place “where [party] operatives coordinate various kinds of voter coercion, from outright buying of votes to incentivizing individuals to bring five or ten others with them to the polls.”

UPDATE 12:45 PM: Local media have reported that a 45 year old woman was shot and killed while she waited to vote this morning in Cárdenas, Tabasco. 

UPDATE 12:42 PM: Christy Thornton points out that false information has been circulating for months on social networks and today is no different; it is “meant to confuse and intimidate voters.” A message has been circulating on WhatsApp today purporting to come from the president of a voting center saying the markers used are being erased. The message is false. 

UPDATE 12:00 PM: At 11:45 AM, an election observer reported: “At casilla 0740 [in Coyoacán], two young women without INE accreditation were polling voters. But when we asked the president [of the casilla], he asked the police officer to investigate, and they produced this document.”

INE accreditation document?

UPDATE 11:21 AM: The Scholar and Citizen Network for Democracy tweets:

UPDATE 11:13 AM: Electoral officials are pushing back against criticism that the election is disorganized, manifest in the late opening of so many polling places. INE spokespersons are saying that everyone in line before polling places close will be able to vote.

UPDATE 11:01 AM: Here is the ballot that voters will use today to mark their choice for president. (courtesy of @Andalalucha). 

Mex pre ballot

UPDATE 10:56 AM: The New York Timesreports on the impact of electoral violence on local races, especially in more rural areas:

In the long run-up to the vote, much of the national and international focus has been on the presidential contest. Yet for the millions of people living in the most violent parts of the country, elections for local office may have the biggest impact on their daily lives.

And organized crime groups have all but decided many of those outcomes already.

“No one has been more active during these campaigns” than these criminal groups, said Alejandro Martínez, a top official for the center-right National Action Party in Guerrero, one of the poorest and most violent states in Mexico.

Scores, if not hundreds, have abandoned their candidacies out of fear for their lives. Some parties have not been able to field nominees willing to contest certain posts.

Some candidates have been forced to travel in armored cars flanked by bodyguards and to wear body armor in public. In parts of the most violent states, threats have made campaigning impossible.

“You have to be a little crazy to run for office here,” Mr. Martínez said.

Collusion between politicians and criminal organizations in Mexico is not new. But over the past decade, criminals have increasingly sought to co-opt local politics by trying to influence the electoral process, using violence to effectively handpick slates of candidates.

UPDATE 10:51 AM: The permanent session of the INE, where electoral counselors and political party representatives are present, can be viewed live here. Lorenzo Cordova, president of the INE, stated that there is “no room for fraud” in the elections. Political party representatives don’t seem to agree, however.

UPDATE 10:45 AM: Diálogos por la Democracia at UNAM is urging people to report voting irregularities or fraud that they witness today:

Diálogos por la Democracia flyer urging reporting of voting fraud and irregularities.

UPDATE 10:35 AM: An observer reported, at 10:26, a long line of 100 waiting in Ixtapan de la Sal to vote in a Casilla Especial. “These Special Precincts allow for casting the US equivalent of provisional ballots. These are used for people who are outside of their voting precincts, in this case many are visiting from nearby Mexico City. There are only 750 ballots in total, which at the current rate will last only until around noon.”

Long line of voters at Ixtapan de la Sal casilla especial

UPDATE 10:29 AM: Aristegui Noticias reports on electoral violence and attempted vote buying in Chiapas. In Mapastepec, two individuals were detained with envelopes of pesos and lists of intended recipients. In Venustiano Carranza a group of armed people reportedly attempted to steal electoral materials. And the Network of Electoral Observers of Chiapas denounced the intensification of attempts by party and government officials to coerce voters over the last few days, including though conditioning federal and state programs on how individuals voted. Full article here.

UPDATE 10:25 AM: At 9:20, journalist Martha Pskowski Tweeted:

 She reported at 10:20: “It’s open! Over 200 people were in line by the time it opened.”

UPDATE 10:20 AM: Observers reported voting finally started to begin 53 minutes late at Ixtapan de la Sal, and Coyoacán 0729 (Mexico City), respectively:

First votes at Ixtapana de la Sal

Ixtapan de la Sal: 8:53, first votes cast. Indelible ink applied to finger to prevent “Chicago style” multiple voting.

Voters enter Coyoacan 0729

8:53 am: voters entering Coyoacan 0729, election here underway.

UPDATE 10:09 AM: At 9:50 ET, an observer reported: “Voters losing patience with election officials who have not yet opened the polls here in Jilotepec. Some of the polling places are missing the officials who will tally the votes, and they cannot open without them.”

Voters losing patience at Jilotepec

UPDATE 10:04 AM:

There’s a report of more than 15 people in a casilla in Ecatepec, going over the electors list, listening and observing to check who is voting. They are reportedly not all accredited as party or INE representatives, so this is illegal.

UPDATE 9:55 AM: Reports are coming in from various areas of polling stations opening late. In many districts across the Estado de México (Mexico State), polls were still being set up at 8:30, a half hour after they are supposed to open. Party representatives were still being accredited and ballot boxes assembled, while voters began to assemble and ask the electoral officials when they can vote. In Ixtapan de la Sal (in Mexico State, just outside Mexico City) the lista was being reviewed and blank ballots counted, and voting still had not started at 8:45am.

At 8:45, Coyoacán 377 in Mexico City was just starting to open. Voters are protesting the late start at Coyoacan 729. In Coyoacán 0377, CDMX, similarly. the polls still had not opened by 8:30 am. None of the parties have representation because the list given to the presidenta was out of date, and the party representatives did not appear on the list, so they will need to get an updated list from the INE (electoral authority), but that means the poll will not be watched for several hours, at least.

Caja awaiting ballots, Coyoacan.

Caja awaiting ballots, Coyoacán

UPDATE 9:43 AM:La Jornada reports on violence impacting the electoral process in Michoacan state. Three were killed on Friday night in a conflict between PRI and PRD activists. Also, the INE has opted to not set up 12 ballot boxes in Nahuatzen after some 3,000 ballots were burned. Reuters has more on the specifics of the conflict in Nahuatzen, where indigenous communities have rejected the electoral process:

Nahuatzen is part of a growing movement among Mexico’s indigenous communities, who are seeking self-rule and turning their backs on mainstream elections. Dissent in Michoacan ignited seven years ago, ahead of the 2012 presidential election, when just one jurisdiction, the municipality of Cheran, opted out of voting.

This year, the boycott spread to six additional municipalities affecting dozens of polling stations across the 16 towns, home to at least 50,000 voters.

UPDATE 9:29 AM: Photos of preparation for the vote. Here, journalists in Mexico City await AMLO’s arrival to cast his vote.

Journalists await AMLO's arrival

Setting up the casilla in Tlaxcala:

Setting up casilla in Tlaxcala

Line for a casilla in the Coyoacán district of Mexico City:

Line for casilla in the Coyoacán district.

UPDATE 9:10 AM: Polls are meant to open at 8am local time and observers have reported lines forming outside many voting centers. And so begins a historic election day throughout Mexico. Exit polls are expected around 8pm with official results coming hours later. 

UPDATE 8:30 AM: La Jornada reports this morning that four PRD activists were killed and four more were wounded yesterday in the State of Mexico after discovering activists affiliated with the PRI handing out food to potential voters. 

UPDATE 8:15 AM: Already, at 6am, the RUCD team in Jardines de Morelos, Ecatepec, reports that they arrived to find no microbus service running. They went to the base for the buses, and for more than 50 busses assembled. A team member asked a driver there, and she was told there was no service because all were going “to the INE” – the electoral authority. As these busses have no reason to go to the offices of the electoral authority, it was clear that the driver meant they were assembled to transport voters. This is an illegal but quite common process called ‘acarreo,’ where parties arrange to bring voters to the polls in groups – a violation of electoral law.


————–

Welcome to our live blog on Mexico’s 2018 national elections. Throughout the day, we will be bringing you on-the-ground reports from international observers deployed in different parts of the country, as well as sharing updates from Mexican and international media outlets, and from social media sources with a record for reliable and accurate information. This blog will be updated frequently during and immediately following the July 1 elections, so be sure to check back regularly.

On July 1, Mexicans voters will be electing federal, state, and local officials to over 3,400 positions, including a new president, legislators in both houses of Congress, and thousands of local and state officials. The most recent polls suggest that outsider candidate Andrés Manuel López Obrador ? of the left-of-center Morena party ? will likely win the presidential election by a wide margin. For the first time in nearly 90 years, a political party other than the centrist PRI (which had uninterrupted control of the presidency until 2000) or the conservative PAN (which held the presidency from 2000 to 2012) could end up controlling the presidency, and some polls predict that Morena will win a majority of seats in the legislature as well.

However, as in past Mexican elections, various forms of fraud, vote-buying, and voter intimidation and coercion are widely expected to take place. Incidents of vote-buying and voter coercion have already been reported. In addition, the election campaign has been marred by high levels of violence, including the killing of over 130 politicians and candidates, the highest number on record for a campaign in Mexico. There are fears that violent incidents could take place during these elections.

This live blog of the elections will include updates from some of the more than 100 accredited international observers from the Scholars’ and Citizens’ Network for Democracy (RUCD, by its Spanish initials), a project of the Fray Francisco de Vitoria Human Rights Center and the Dialogues for Democracy program at Mexico’s National Autonomous University (UNAM, by its Spanish initials). These observers, who will be accompanied by Mexican counterparts from the RUCD, will be visiting hundreds of voting centers in six Mexican states, including Morelos, Puebla, Mexico State, Chiapas, Veracruz, and Tlaxcala, as well as in Mexico City.

We will also share excerpts and links from news outlets and social media tracking developments surrounding the elections. Given the abundance of false or unsubstantiated information that has circulated during the electoral season ? as Verificado 2018 and other fact-checkers have documented ? we will focus on sources that have a strong record for accurate reporting.

We at CEPR have monitored Mexican elections in the past, notably in 2006, when we conducted an independent review of information made available from 2,534 ballot boxes and found a number of problems with the ballot count. CEPR also concluded that half of the ballot boxes in that election had “adding up” errors, that is, the total number of blank ballots received at the ballot box location before the vote did not equal the total number of votes recorded (including null votes) plus the blank ballots left over. CEPR has previously live blogged several elections in Haiti, Honduras, and Venezuela.

A Brief Introduction to Mexico’s 2018 Elections

On July 1, Mexicans will go to the polls to elect candidates to over 3,400 positions, including a new president, both houses of Congress, nine governors and thousands of other local and state officials. The elections take place as Mexico struggles with a generally stagnant economy and a series of scandals that have shaken public faith not just in the current administration, but in many of Mexico’s institutions. These include reports of state security involvement in the disappearance of 43 young people studying to be teachers in Ayotzinapa, personal enrichment scandals surrounding President Enrique Peña Nieto and his family, and the legacy of a militarized war on drugs and crime begun under former president Felipe Calderon that corresponded with a period of soaring homicide numbers and thousands of disappearances. The murder rate hit a record high in 2017.

As a result of these and other factors, the popularity rating of outgoing president Enrique Peña Nieto, of the PRI party, has sunk to 23 percent, according to recent polls.

The presidential candidates are:

Andrés Manuel López Obrador (frequently known as AMLO)
“Together We Will Make History” (Juntos Haremos Historia) Coalition, made up of the National Regeneration Movement (MORENA), Labor Party (PT), and Social Encounter Party (PES).

This is López Obrador’s third time running for president, though the first with the Morena party, which started as a movement supporting his candidacy in 2012 and officially became a party in 2014. López Obrador, the former mayor of Mexico City (2000–2005), has campaigned on ending rampant corruption and focusing on boosting the domestic economy, including the agricultural sector. While there is some concern from the business community and internationally regarding what López Obrador would do about NAFTA or the 2013 energy reform, he has stated that, if elected, he would work with the US, and that he would not revoke the energy reform, though he would review existing contracts for corruption.

Ricardo Anaya 
“The Forward Front for Mexico” (“Por México Al Frente”) Coalition, made up of the right-wing National Action Party (PAN), the left-wing Party of the Democratic Revolution (PRD), and the left-wing Citizens’ Movement (MC).

Polling (a distant) second behind AMLO, Anaya has presented himself as a youthful (he’s 39) fresh face, promoting a vision of transitioning from manufacturing to a tech-focused economy, while curbing crime and corruption. Anaya is a former legislator who presents himself as a would-be departure from previous presidents, and he was able to secure the unusual backing of both the right-wing PAN, and the left-wing PRD and MC. Anaya nonetheless is the current PAN president, has been a party functionary for several years, and has been a member of the party for his entire political career. He has also been criticized by some within his own party for divisive actions he has taken, and has been dogged by corruption allegations of his own.

José Antonio Meade
Everyone for Mexico (“Todos por México”) coalition, made up of the Institutional Revolutionary Party (PRI), New Alliance (PANAL), and the Ecologist Green Party of Mexico (PVEM).

Although he is the candidate of the ruling PRI, Meade wasn’t a member of the party until recently. Though the PRI’s strategy appears to be an effort to run the little-known Meade as an “outsider” candidate, he is still trailing in third place. Meade may in fact be the consummate “insider-outsider”: he is a former cabinet secretary (energy, foreign relations, social development, and then finance and public credit) with degrees in law and economics from UNAM and Yale, respectively.

Jaime “El Bronco” Rodríguez
Independent candidate

This is the first year that independent candidates can run for president. Rodríguez, better known as “El Bronco,” has focused much of his campaign on that he is not affiliated with a party, the solution he says Mexico needs (although he may also be remembered for his debate response when he said he would solve corruption by cutting off thieves’ hands).

Margarita Zavala, a lawyer and politician, and the wife of former President Felipe Calderón of the PAN party, was also running as an independent candidate, before she withdrew in May (though her name still appears on the ballots, which were printed before her announcement).

The story so far:

Polls have consistently had López Obrador in the lead throughout the campaign; at this point over 20 points ahead, according to the majority of pollsters. His election would represent a historic shift for Mexico. The PRI led Mexico uninterrupted for 71 years, before PAN governments took over in 2000 and again in 2006. When Enrique Peña Nieto of the PRI took office in 2012, he signed the “Pact for Mexico,” along with the heads of the PRI, PAN, and PRD parties. This pact promised, in part, a new era of economic growth and prosperity, which did not materialize. It did, however, consolidate the idea for many of the PRI, PAN, and PRD working in alliance, which may have damaged the standing of all three parties given the unpopularity of the current PRI administration. The traditionally left-leaning PRD eventually left the Pact, though it is in coalition with the center-right PAN in the 2018 elections. If elected, López Obrador, with the Morena party and the “Together We Will Make History” coalition, would therefore represent a significant departure from Mexico’s political history thus far.

Voting Day:

Voting centers will be open from 8:00 am to 6:00 pm (or until all those in line to vote before 6 pm have voted). At 11 pm, the National Voting Institute (INE, by its Spanish initials) will release its initial projections of results based on a broad sample of centers with confirmed voting tallies. Between 8 pm on July 1 and 8 am on July 2, the results tallied in each voting center are electronically transmitted to the INE headquarters in Mexico City. In theory, the preliminary (PREP) results could be processed and made public by late evening on July 1, but past experience suggests that the results may not be publicly released until the early morning of July 2.

Welcome to our live blog of Mexico’s historic elections today. See our introductory post here.

All update times are Eastern time zone.

UPDATE 11:12 PM: FEPADE provided an updated tally on electoral complaints received throughout the day. Throughout the country there were 394 complaints at the federal level, and even more concerning local races. 19 people were arrested for federal electoral crimes. 

UPDATE 11:08 PM: And now President Donald Trump has tweeted his congratulations to president-elect Obrador. 

 

UPDATE 11:01 PM: Mitofsky has now released its Senate exit polls, which indicate a possible majority for Morena and allies with 56-70 seats. There are 128 seats in the senate. 

Mitofsky mex sen poll 

UPDATE 10:36 PM: U.S. Congressional Progressive Caucus co-chairs, Rep. Raul Grijalva and Rep. Mark Pocan, have released a statement following Obrador’s likely victory. 

CPC mexico

UPDATE 10:27 PM: Pollster Mitofsky has just released exit poll data estimating Moreno and it’s allies in “Together We Will Make History” winning between 256 and 291 seats – a majority. 
WhatsApp Image 2018 07 01 at 10.17.10 PM

UPDATE 10:12 PM: Argentina issued a statement congratulating Obrador on his election victory. Again, official results are based on only 0.32 percent of total ballots, but as Richard Ensor of The Economist points out, these early returns indicate a broad-based victory for Obrador:  

UPDATE 9:45 PM: Official results have just started being posted by INE, but the results appear irreversible. Ricardo Anaya of the PAN has also just conceded defeat to López Obrador. 

UPDATE 9:31 PM: More exit polls are giving AMLO around 50 percent of the vote. ADN has AMLO with 51 percent to Anaya’s 23 percent, with Meade again at 18 percent. The Washington Post is reporting: “Several exit polls gave Lopez Obrador a double-digit lead over his two closest competitors….”

UPDATE 9:18 PM: El Financiero is also projecting Morena with 38 percent of the vote for the chamber of deputies (the legislative lower house), the PAN with 22 percent, the PRI with 18 percent, the PRD with 6 percent, and the PT (Workers’ Party) with 4 percent.

UPDATE 9:16 PM: The ruling PRI’s presidential candidate, Jose Antonio Meade, has conceded defeat to Obrador before official results are announced. 

UPDATE 9:11 PM: El Financiero’s presidential exit poll has been released and it shows Morenas’ Obrador with 49 percent of the vote. Anaya of the PAN is in second with 29 percent, and the PRI’s Meade is in third with 18 percent, according to the poll. 

UPDATE 8:52 PM: The 5:00 pm report from Diálogos por la Democracia is now available. They say they “received and tracked and directed” 198 citizen complaints, of which 52 were for “soliciting votes for payment, promises of money, or other consideration.”

UPDATE 8:43 PM: An observer in Tlaxcala reported at 8:20 pm:

[They’re conducting the count for] President and diputado at the same time here In Tlaxcala. All mesas/casillas can decide if they are going to take additional security measures. At this casilla, they signed (have to confirm how many / who) as an extra security measure. Most we visited today were not signing. In another area of Tlaxcala they had stolen some ballots previous to the election. In addition to reprinting, they required signatures (2 mesa, 2 partidos) on every ballot. Wind in a tent is complicating working with lots of paper ballots…

Counting in Tlaxcala.

UPDATE 8:37 PM: In a series of tweets (ongoing), the #Verificado2018 project reported the confirmed cases of electoral violence and irregularities in Puebla state today. A PRI activist was killed in the municipality of Acolihuia. At the Emiliano Zapata school in Barranca Honda, 8-10 gunmen showed up at around 2 PM and fire off shots, temporarily closing the center. At a voting center in Colonia Fuentes de San Aparicio shots were fired and ballots for president and governor were stolen. Ballots were also stolen in San Sebastián by seven armed individuals. 

UPDATE 8:28 PM: An observer in Jilotepec reports:

Here in Section 2260 in Jilotepec, the counting of blank ballots is finished and now a poll worker is reading out the number of registered voters that have voted on each page of the thick voter registry for casilla contigua 3 while all of the party representatives confirm that his count matches their count, page by page. In a few places there are discrepancies which they resolve. In total, 459 of 650 registered voters deposited ballots in the urns of this casilla.

Counting at Jilotepec section 2260.

With that done, on to the tallying, starting with the ballots for the presidential election. They are all dumped on a table by the president of the casilla, and the poll workers begin to unfold each ballot. Another long process. [They’re tallying the municipal ballots and the presidential ballots at the same time.]

UPDATE 8:20 PM: At 8:06 pm, observers reported that rain did indeed begin to pour at casilla 0734 in Coyoacán, “forcing a hurried move inside an auditorium next to the casilla.”

Rain at casilla 0734 in Coyoacan.

UPDATE 8:16 PM: Exit polls being reported by El Financiero project the next governor of Jalisco will be the Citizens Movement candidate Enrique Alfaro, and in Guanajuato the “Por Guanajuato al frente” candidate Diego Sinhué. The governor’s race in Yucatán is projected to be between the PAN and Citizens Movement candidate Mauricio Vila and the PRI-Green Party candidate Mauricio Sahuí. In Veracruz, the race is projected to be down to the “Together We Will Make History” candidate Cuitláhuac García and the “Por Veracruz al frente” candidate Miguel Ángel Yunes. In Puebla, the race is projected to be between Miguel Barbosa of the “Together We Will Make History” coalition, and the candidate of the “Por Puebla al frente,” Martha Erika Alonso.

UPDATE 7:59 PM: An observer reports: “Here at casilla 0734 [in Coyoacán], they are lining up on the ground to help organize the ballots. But there is no electric light. They are trying to run a cable to a nearby store. And it is about to start raining. Lining up sheets of paper. They have a tent, but the ballots are being organized on the ground and if it rains they may get wet.”

Casilla 0734, preparing to count.

UPDATE 7:51 PM: At 7:42 pm, an observer at casilla Tlaxcala 453 reported: “They closed the gate at 6 (people in line within the fence could stay in line/vote) so people broke the fence to get in. Looks like police had it all under control, no further incident.”

Fence at casilla Tlaxcala 453

Broken fence at casilla Tlaxcala 453.

UPDATE 7:42 PM: El Financiero reports exit polls projecting candidates from the “Together We Will Make History” (Juntos Haremos Historia) Coalition (of which AMLO is the presidential candidate) winning the governors’ seats in Morelos, Tabasco, Chiapas, Puebla, and Veracruz  [between two candidates in each] as well as Mexico City.

UPDATE 7:34 PM: More updates are coming in from the network of observers that have been out across the country today: “District 30 in Estado de México: no serious irregularities to report all along our route today, from Valle de Bravo to Tejupilco and back, 9 polling stations and about 30 casillas. High participation, roughly 70%, and calm atmosphere everywhere …Lots of dedicated citizens doing their best to make these elections happen in a peaceful and orderly manner. Polls just about to close back here in Valle de Bravo and the initial counting process will soon begin under a tent in a playground protecting us from heavy rain. Here there are four casillas bunched together in one small space but somehow it has worked.”

UPDATE 7:31 PM: An observer reports on the closing of polls in a different center in Jilotepec. “Here in casilla contigua 3 of section 2260 in Jilotepec they’ve just brought the five ballot boxes from outside into a classroom where the poll workers are setting things up and the party reps, two per party here, are sitting behind desks and waiting. There was a little drama a short while ago when two elderly women came to vote just as the president of the casilla declared the casilla closed. The late-comers were not allowed to vote. A younger woman was irate as she said that the women had arrived at the center several minutes before 6 and had had trouble identifying the casilla where they could vote.”

And, another update a few minutes later which adds more detail on the process at the close of the day: “The poll workers are now counting the blank ballots. Afterwards, the total of blank ballots and filled in ballots will be calculated with the expectation that it will match the total of blank ballots that the casilla was given. Once the blank ballots are counted the president of the casilla draws two lines through each blank ballot, making them null and void. Though the president is marking the ballots quickly it’s a slow process given that there five sets of at least a hundred blank ballots.”
WhatsApp Image 2018 07 01 at 7.27.38 PM

UPDATE 7:12: As a long election day comes to a close, a long night of counting begins. An observer reports: “We are now in the closing of a polling station in Jilotepec. In accordance with Mexican law, they have asked all but one representative of each party to leave. One person from each party will stay behind for the opening of the ballot boxes and the initial organization and counting of the ballots. Here in the Estado de México, there are five races, so five separate ballots, which all need to be opened and organized. This is just the first step in a long process of getting this count started.”

UPDATE 7:10 PM: Bloomberg’s and El Financiero are beginning to release exit poll data. Eric Martin writes for the Bloomberg live-blog

We’re starting to get our first exit polls in, and El Financiero is projecting that Claudia Sheinbaum, the Morena candidate, will be the next mayor of Mexico City.

Sheinbaum’s win was widely expected, as she has been leading polls. Sheinbaum, a 55-year-old scientist, previously served as head of the Tlalpan neighborhood in southern Mexico City. Candidates from the left or left-led coalitions have controlled the mayor’s office in the capital since the 1990s.

Martin notes that governor races in Pueblo and Veracruz are “too close to call.” 

UPDATE 7:06 PM: Update from an observer at 6:03 PM local time: “Casillas 0734 & 0732 in Coyoacán, all quiet. High turnout. 80% & 76.5%. At 6 PM noone was in line. The president declared the casilla closed. everyone applauded and some shouted ‘para democracia.'”

UPDATE 7:03 PM: As polling centers begin to close, INE has begun counting votes from Mexicans abroad. Journalist Jorge Ramos noted earlier that it was “shameful and a failure” that only 98,000 sent votes from abroad when there are more than 12 million Mexicans living outside the country. In a tweet, Ramos wrote: “It seems that the system is made so that we do not participate.”

UPDATE 6:58 PM: The #Verificado2018 project provides an update on reported violent conflicts impacting the vote in Veracruz. According to the local electoral office, casilla 0955 en Coatzintla was forced to close twice due to violence, but voting has continued. In Coatzacoalcos a shootout occured, but not, as had been reported, near a voting center. 

UPDATE 6:46 PM: INE member Ciro Murayama notes that due to high levels of participation many voting centers may not be able to close at 6 PM (local time), which may delay the release of preliminary results (expected to begin around 8 PM). Meanwhile, Leonel Fernandez, the head of the OAS electoral observation mission has issued a statement noting that the election has so far transpired without major incidents, and has seen “massive participation.” 

UPDATE 6:30 PM: There are images posted on Twitter, and media reports, of men burning ballots at casilla 0381 in the Escuela Primaria José María Morelos y Pavón in Chilcota, Michoacán.

UPDATE 6:24 PM: @Andalalucha has been Tweeting about the numbers of people waiting to vote at casillas especiales:

Polling places close at 6:00 pm local time.

UPDATE 6:15 PM: T.M. Scruggs, an observer with the Scholars’ and Citizens’ Network for Democracy, reports:

All 9 casillas visited today in 4 towns and cities in the SW part of Mexico State have proceeded with tranquillity and appear organized and well run. No waiting longer than 20 minutes observed except at the Casilla Especial in Ixtapan de la Sal where the wait was at least an hour for the non-local residents.

The generalized late opening of voting booths appears to be related to the complexity of five ballots due the five levels of voting, from federal to municipal level. Even where the materials arrived on time the poll workers needed to arrive earlier than last year’s comparatively less complicated one. In SW Mexico State for example the ten casillas we have observed started setting up at 7:30 am when they really needed to begin at 7 am, the hour designated as such by the INE. All these casillas opened between 8:30 and 9:30 am [correction: 9:00 am] with exception of one that opened just after 9:30 am.

UPDATE 5:49 PM: MVS Noticias reports that observers from Central America are concerned by the lack of sufficient ballots at the casillas especiales, and plan to report to the INE about it.

El Economista also reports on the “chaos” in special polling places, where people have been waiting several hours to vote.

UPDATE 5:33 PM: An update on casilla Alvaro Obregón 3458 from a different observer: “When we arrived, dozens were milling outside, one woman in particular appeared to be floor manager, on the phone she openly talked about running electoral operation, when I approached she subsequently ducked into house in front of casilla, we approached INE official, claimed not to be aware; subsequently he came out and publicly admitted the PRD was fighting tooth and nail for this casilla, we have audio; after our complaint the area cleared out!”

PRD house across the street from casilla Alvaro Obregón 3458.
PRD house across the street from casilla Alvaro Obregón 3458.

UPDATE 5:19 PM: In Iztapalapa, some 583 ballots were stolen, according to the head of government in Mexico City, José Ramón Amieva (see 2:41 pm update, below). He added that there was no process for the replacement of ballots and so those individuals at Casille 2567 in Ampliación Santiago, will not be able to vote. Arnieva also noted the late opening at various polling centers this morning. 

UPDATE 5:09 PM: FEPADE provides updated figures on electoral complaints. By 2 PM local time, there had been 1,106 denunciations of possible electoral crimes across the country, 640 at the community level and 466 at the federal level. The states with the highest number of complaints are Pueblo (127), CDMX (51), Mexico State (46), Chiapas (38), Oaxaca (27) and Veracruz (25). Seventeen individuals have been detained.  

UPDATE 5:02 PM: Aristegui Noticias reports that a Labor Party activist, Flora Reséndiz González, was killed today when leaving her home in the community of Contepec in Michoacán state. In another report, the Michoacán electoral institute confirmed to Aristegui Noticias that it had cancelled elections in the indigenous community of Nahuatzen and has had to close some voting centers in other communities in the region following electoral violence and other irregularities. 

UPDATE 4:53 PM: More from an observer at casilla 3458 Álvaro Obregón, CDMX: “The Morena representative told us and the INE representative that he had filed a complaint with FEPADE about the obvious vote buying by what he said was the PRD.” The observer noted that the house the PRD is operating from is located across the street from the voting center.

Since Thursday FEPADE, the electoral crimes authority, has received 534 complaints according to the agencies director, Héctor Días Santana. 460 of the complaints came before election day, while 74 were recorded by noon today. 

UPDATE 4:30 PM: An observer reported at 3:17 pm ET: “250/534 have voted in Tchiautempan, Tlaxcala (section 133). Busy, tranquilo, organized. Things have been pretty calm in Tlaxcala (besides the 1 chaotic one we saw with halcones).”

Journalist James Fredrick reported that voters were waiting more than six hours to vote at the Hospital General, Del. Cuauhtemoc due to insufficient ballots:

Another observer reports: “At casilla 3458 Álvaro Obregón, CDMX, we spoke with a woman who made an accusation to us that as soon as we appeared a group scattered that had been checking people’s names and looking at their phones. The INE representative on site and the president of the casilla said they hadn’t seen anything irregular. A bit more than 50 percent have voted here.”

UPDATE 4:16 PM: An observer reports: “In the rural areas around Jilotepec, things have been busy, but calm. There haven’t been many irregularities, but in Soyaniquilpan, Morena representatives had reported to the INE officials excessive use of cell phones inside the polling station by members of other parties – this can be a way of organizing the illegal coercion of voters. Outside that polling place, we saw others, on their phones, with lists of voters. This indicates to us that the party in question – in this case, the PRI – is organizing the mobilization of voters in ways that violate the electoral laws.”

Another observer updates us from elsewhere in Jilotepec: “At 2:50 pm, 58 percent of registered voters had voted in the rural voting center of section 2296 in Doxhicho, Jilotepec, EDOMEX. Everywhere I’ve been poll workers are commenting on the unusually high level of voter participation so far in these elections. And I’ve encountered no major incidents in the seven voting centers I’ve visited in the municipality of Jilotepec.”

UPDATE 4:09 PM: The NGO Democracia sin Pobreza is mapping reports of vote-buying, including locations where the reports have been validated with photographic or video evidence.

The RUCD has posted its first formal report (only in Spanish, for now) here.

Jan-Albert Hootsen of the Committee to Protect Journalists Tweeted: “In Parral (Chihuahua State, northern Mexico), a journalist was reportedly beat up as he was reporting at a voting booth,” and “Media in Veracruz report that a voting station was temporarily closed due to the appearance of a group of unidentified armed individuals. The booth is now open again.”

UPDATE: 3:54 PM: More reports of problems in Ecatepec. @Andalalucha posted a video on Twitter of voters, who reportedly have waited over four hours, demanding more ballots so that they can vote. And the RUCD observation group that includes John Ackerman says: “In Ecatepec, State of Mexico our observation group was threatened by an aggressive individual over our effort to prevent fraud. We also spoke to several residents who said they were offered goods and money in exchange for their vote and a report of someone trying to vote twice.”

UPDATE 3:10 PM: Reports of ballot shortages are coming in from various “casillas especiales,” for voters outside of their regular precincts. Each casilla especial has only 750 ballots, but in some locations, many more than that are turning out to vote. Journalist Martha Pskowski Tweeted around 2:00 pm ET:

An observer reported at 1:00 pm: “In Oxtotitlán, Mexico State, obvious alcohol consumption in the small plaza where the voting area is located. Also multiple small stores selling beer and other drinks.” Mexican states have a “dry law” prohibiting alcohol sales for at least 24 hours around election day.

UPDATE 2:59 PM: Journalist Arturo Cano reports that Morena has denounced vote-buying by the PRD at casilla 1699 en el Barrio Los Reyes, Iztacalco, Mexico City:

UPDATE 2:49 PM: International media, as well as numerous electoral observers, are reporting long lines at polling stations in Mexico City and various locations in Mexico State, and elsewhere:

Meanwhile, rumors of “erased” ballot marks have been a concern today. Dialogos por la Democracia tells voters that they can indeed use their own pen to mark their ballot:


UPDATE: 2:41 PM: The #Verificado2018 project reports that a casilla president in Iztapalapa (a Mexico City borough) says armed gunmen stole ballots from him. And it reports that Instituto Electoral de Michoacán (IEM) electoral officials have confirmed the armed theft of ballots, but say they do not know how many have been stolen.

UPDATE 2:06 PM: An observer reports: “At Jilotepec, section 2260, casilla contigua 1, around 160 people had voted at 12:19 pm.”

Another observer in Coyoacán reports: “Casilla 0354: one basic and 6 contiguous, 4565 voters, full, we managed to get pollsters out of the polling place.”

Casilla 0354, Coyoacán

UPDATE 1:58 PM: At 1:22 pm, an observer reported: “Casilla 0481, Coyoacán. Only evident issue is small size of the local which delays vote.”

Casilla 0481, Coyoacan

UPDATE 1:54 PM: Observers have consistently reported long lines at “special” voting centers, set up to allow people traveling outside their home district to vote. Ciro Murayama, an INE electoral counselor, tweeted that each of these centers has only 750 ballots as stipulated in the electoral law and that many would not be able to vote. Christy Thornton tweeted that at one such voting center in Jilotepec she counted around 200 people in line to vote.

UPDATE 1:47 PM: Duncan Tucker, regional media manager for Amnesty International tweets: 

UPDATE 1:20 PM: INE president Lorenzo Córdova recently made a statement, declaring the electoral process was occurring in a situation of calm and without major incidents. He said that, of the 156,807 casillas, only 4 were not installed. Observers, however, have reported that a large number of casillas did not open on time.

UPDATE 1:14 PM: An observer reports: “A somewhat chaotic voting center in San Isidro Buensuceso (neighborhood), San Pablo del Monte (municipio), sección 363, Tlaxcala. Casillas are close together. We saw a ‘halcón’ ? a boy up on the balcony to watch the votes happening below [which is illegal]. People watching/monitoring voters (no lists). No security. The INE told us that the municipal government refused to provide security or lunch, citing the veda electoral [the pre-election day period in which campaigning and politicking is banned, as is dissemination of government messages].”

Casilla at San Isidro Buensuceso

UPDATE 1:03 PM: More reports are coming in of how widespread the late opening of polling places has been today. A observer tells us, “Here in Districto 1 of Jilotepec, only 11 of 116 casillas were open at 9:20 am.” José Roberto Ruiz, an electoral advisor to the INE, Tweeted earlier today:

UPDATE 12:54 PM: Journalist Jeff Abbott Tweeted to us:

UPDATE 12:49 PM: An RUCD brigade that includes Father Miguel Concha, director of the Vitoria Center; Laura Carlsen, director of the Americas Program at the Center for International Policy; Father Alejandro Solalinde; and law professor John Ackerman of the Instituto de Investigaciones Juridicas at UNAM is beginning their voting observations in Ecatepec, Mexico State, where they will visit 11 casillas. They recorded this message earlier (and are planning to livestream here).

Also in Ecatepec, an observer reports: “A lot of problems in Ecatepec. We already saw two ‘casas amigas’, intimidations, etc.” Latin American studies professor Christy Thornton, who is also observing the elections today, has previously described a casa amiga as a place “where [party] operatives coordinate various kinds of voter coercion, from outright buying of votes to incentivizing individuals to bring five or ten others with them to the polls.”

UPDATE 12:45 PM: Local media have reported that a 45 year old woman was shot and killed while she waited to vote this morning in Cárdenas, Tabasco. 

UPDATE 12:42 PM: Christy Thornton points out that false information has been circulating for months on social networks and today is no different; it is “meant to confuse and intimidate voters.” A message has been circulating on WhatsApp today purporting to come from the president of a voting center saying the markers used are being erased. The message is false. 

UPDATE 12:00 PM: At 11:45 AM, an election observer reported: “At casilla 0740 [in Coyoacán], two young women without INE accreditation were polling voters. But when we asked the president [of the casilla], he asked the police officer to investigate, and they produced this document.”

INE accreditation document?

UPDATE 11:21 AM: The Scholar and Citizen Network for Democracy tweets:

UPDATE 11:13 AM: Electoral officials are pushing back against criticism that the election is disorganized, manifest in the late opening of so many polling places. INE spokespersons are saying that everyone in line before polling places close will be able to vote.

UPDATE 11:01 AM: Here is the ballot that voters will use today to mark their choice for president. (courtesy of @Andalalucha). 

Mex pre ballot

UPDATE 10:56 AM: The New York Timesreports on the impact of electoral violence on local races, especially in more rural areas:

In the long run-up to the vote, much of the national and international focus has been on the presidential contest. Yet for the millions of people living in the most violent parts of the country, elections for local office may have the biggest impact on their daily lives.

And organized crime groups have all but decided many of those outcomes already.

“No one has been more active during these campaigns” than these criminal groups, said Alejandro Martínez, a top official for the center-right National Action Party in Guerrero, one of the poorest and most violent states in Mexico.

Scores, if not hundreds, have abandoned their candidacies out of fear for their lives. Some parties have not been able to field nominees willing to contest certain posts.

Some candidates have been forced to travel in armored cars flanked by bodyguards and to wear body armor in public. In parts of the most violent states, threats have made campaigning impossible.

“You have to be a little crazy to run for office here,” Mr. Martínez said.

Collusion between politicians and criminal organizations in Mexico is not new. But over the past decade, criminals have increasingly sought to co-opt local politics by trying to influence the electoral process, using violence to effectively handpick slates of candidates.

UPDATE 10:51 AM: The permanent session of the INE, where electoral counselors and political party representatives are present, can be viewed live here. Lorenzo Cordova, president of the INE, stated that there is “no room for fraud” in the elections. Political party representatives don’t seem to agree, however.

UPDATE 10:45 AM: Diálogos por la Democracia at UNAM is urging people to report voting irregularities or fraud that they witness today:

Diálogos por la Democracia flyer urging reporting of voting fraud and irregularities.

UPDATE 10:35 AM: An observer reported, at 10:26, a long line of 100 waiting in Ixtapan de la Sal to vote in a Casilla Especial. “These Special Precincts allow for casting the US equivalent of provisional ballots. These are used for people who are outside of their voting precincts, in this case many are visiting from nearby Mexico City. There are only 750 ballots in total, which at the current rate will last only until around noon.”

Long line of voters at Ixtapan de la Sal casilla especial

UPDATE 10:29 AM: Aristegui Noticias reports on electoral violence and attempted vote buying in Chiapas. In Mapastepec, two individuals were detained with envelopes of pesos and lists of intended recipients. In Venustiano Carranza a group of armed people reportedly attempted to steal electoral materials. And the Network of Electoral Observers of Chiapas denounced the intensification of attempts by party and government officials to coerce voters over the last few days, including though conditioning federal and state programs on how individuals voted. Full article here.

UPDATE 10:25 AM: At 9:20, journalist Martha Pskowski Tweeted:

 She reported at 10:20: “It’s open! Over 200 people were in line by the time it opened.”

UPDATE 10:20 AM: Observers reported voting finally started to begin 53 minutes late at Ixtapan de la Sal, and Coyoacán 0729 (Mexico City), respectively:

First votes at Ixtapana de la Sal

Ixtapan de la Sal: 8:53, first votes cast. Indelible ink applied to finger to prevent “Chicago style” multiple voting.

Voters enter Coyoacan 0729

8:53 am: voters entering Coyoacan 0729, election here underway.

UPDATE 10:09 AM: At 9:50 ET, an observer reported: “Voters losing patience with election officials who have not yet opened the polls here in Jilotepec. Some of the polling places are missing the officials who will tally the votes, and they cannot open without them.”

Voters losing patience at Jilotepec

UPDATE 10:04 AM:

There’s a report of more than 15 people in a casilla in Ecatepec, going over the electors list, listening and observing to check who is voting. They are reportedly not all accredited as party or INE representatives, so this is illegal.

UPDATE 9:55 AM: Reports are coming in from various areas of polling stations opening late. In many districts across the Estado de México (Mexico State), polls were still being set up at 8:30, a half hour after they are supposed to open. Party representatives were still being accredited and ballot boxes assembled, while voters began to assemble and ask the electoral officials when they can vote. In Ixtapan de la Sal (in Mexico State, just outside Mexico City) the lista was being reviewed and blank ballots counted, and voting still had not started at 8:45am.

At 8:45, Coyoacán 377 in Mexico City was just starting to open. Voters are protesting the late start at Coyoacan 729. In Coyoacán 0377, CDMX, similarly. the polls still had not opened by 8:30 am. None of the parties have representation because the list given to the presidenta was out of date, and the party representatives did not appear on the list, so they will need to get an updated list from the INE (electoral authority), but that means the poll will not be watched for several hours, at least.

Caja awaiting ballots, Coyoacan.

Caja awaiting ballots, Coyoacán

UPDATE 9:43 AM:La Jornada reports on violence impacting the electoral process in Michoacan state. Three were killed on Friday night in a conflict between PRI and PRD activists. Also, the INE has opted to not set up 12 ballot boxes in Nahuatzen after some 3,000 ballots were burned. Reuters has more on the specifics of the conflict in Nahuatzen, where indigenous communities have rejected the electoral process:

Nahuatzen is part of a growing movement among Mexico’s indigenous communities, who are seeking self-rule and turning their backs on mainstream elections. Dissent in Michoacan ignited seven years ago, ahead of the 2012 presidential election, when just one jurisdiction, the municipality of Cheran, opted out of voting.

This year, the boycott spread to six additional municipalities affecting dozens of polling stations across the 16 towns, home to at least 50,000 voters.

UPDATE 9:29 AM: Photos of preparation for the vote. Here, journalists in Mexico City await AMLO’s arrival to cast his vote.

Journalists await AMLO's arrival

Setting up the casilla in Tlaxcala:

Setting up casilla in Tlaxcala

Line for a casilla in the Coyoacán district of Mexico City:

Line for casilla in the Coyoacán district.

UPDATE 9:10 AM: Polls are meant to open at 8am local time and observers have reported lines forming outside many voting centers. And so begins a historic election day throughout Mexico. Exit polls are expected around 8pm with official results coming hours later. 

UPDATE 8:30 AM: La Jornada reports this morning that four PRD activists were killed and four more were wounded yesterday in the State of Mexico after discovering activists affiliated with the PRI handing out food to potential voters. 

UPDATE 8:15 AM: Already, at 6am, the RUCD team in Jardines de Morelos, Ecatepec, reports that they arrived to find no microbus service running. They went to the base for the buses, and for more than 50 busses assembled. A team member asked a driver there, and she was told there was no service because all were going “to the INE” – the electoral authority. As these busses have no reason to go to the offices of the electoral authority, it was clear that the driver meant they were assembled to transport voters. This is an illegal but quite common process called ‘acarreo,’ where parties arrange to bring voters to the polls in groups – a violation of electoral law.


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Welcome to our live blog on Mexico’s 2018 national elections. Throughout the day, we will be bringing you on-the-ground reports from international observers deployed in different parts of the country, as well as sharing updates from Mexican and international media outlets, and from social media sources with a record for reliable and accurate information. This blog will be updated frequently during and immediately following the July 1 elections, so be sure to check back regularly.

On July 1, Mexicans voters will be electing federal, state, and local officials to over 3,400 positions, including a new president, legislators in both houses of Congress, and thousands of local and state officials. The most recent polls suggest that outsider candidate Andrés Manuel López Obrador ? of the left-of-center Morena party ? will likely win the presidential election by a wide margin. For the first time in nearly 90 years, a political party other than the centrist PRI (which had uninterrupted control of the presidency until 2000) or the conservative PAN (which held the presidency from 2000 to 2012) could end up controlling the presidency, and some polls predict that Morena will win a majority of seats in the legislature as well.

However, as in past Mexican elections, various forms of fraud, vote-buying, and voter intimidation and coercion are widely expected to take place. Incidents of vote-buying and voter coercion have already been reported. In addition, the election campaign has been marred by high levels of violence, including the killing of over 130 politicians and candidates, the highest number on record for a campaign in Mexico. There are fears that violent incidents could take place during these elections.

This live blog of the elections will include updates from some of the more than 100 accredited international observers from the Scholars’ and Citizens’ Network for Democracy (RUCD, by its Spanish initials), a project of the Fray Francisco de Vitoria Human Rights Center and the Dialogues for Democracy program at Mexico’s National Autonomous University (UNAM, by its Spanish initials). These observers, who will be accompanied by Mexican counterparts from the RUCD, will be visiting hundreds of voting centers in six Mexican states, including Morelos, Puebla, Mexico State, Chiapas, Veracruz, and Tlaxcala, as well as in Mexico City.

We will also share excerpts and links from news outlets and social media tracking developments surrounding the elections. Given the abundance of false or unsubstantiated information that has circulated during the electoral season ? as Verificado 2018 and other fact-checkers have documented ? we will focus on sources that have a strong record for accurate reporting.

We at CEPR have monitored Mexican elections in the past, notably in 2006, when we conducted an independent review of information made available from 2,534 ballot boxes and found a number of problems with the ballot count. CEPR also concluded that half of the ballot boxes in that election had “adding up” errors, that is, the total number of blank ballots received at the ballot box location before the vote did not equal the total number of votes recorded (including null votes) plus the blank ballots left over. CEPR has previously live blogged several elections in Haiti, Honduras, and Venezuela.

A Brief Introduction to Mexico’s 2018 Elections

On July 1, Mexicans will go to the polls to elect candidates to over 3,400 positions, including a new president, both houses of Congress, nine governors and thousands of other local and state officials. The elections take place as Mexico struggles with a generally stagnant economy and a series of scandals that have shaken public faith not just in the current administration, but in many of Mexico’s institutions. These include reports of state security involvement in the disappearance of 43 young people studying to be teachers in Ayotzinapa, personal enrichment scandals surrounding President Enrique Peña Nieto and his family, and the legacy of a militarized war on drugs and crime begun under former president Felipe Calderon that corresponded with a period of soaring homicide numbers and thousands of disappearances. The murder rate hit a record high in 2017.

As a result of these and other factors, the popularity rating of outgoing president Enrique Peña Nieto, of the PRI party, has sunk to 23 percent, according to recent polls.

The presidential candidates are:

Andrés Manuel López Obrador (frequently known as AMLO)
“Together We Will Make History” (Juntos Haremos Historia) Coalition, made up of the National Regeneration Movement (MORENA), Labor Party (PT), and Social Encounter Party (PES).

This is López Obrador’s third time running for president, though the first with the Morena party, which started as a movement supporting his candidacy in 2012 and officially became a party in 2014. López Obrador, the former mayor of Mexico City (2000–2005), has campaigned on ending rampant corruption and focusing on boosting the domestic economy, including the agricultural sector. While there is some concern from the business community and internationally regarding what López Obrador would do about NAFTA or the 2013 energy reform, he has stated that, if elected, he would work with the US, and that he would not revoke the energy reform, though he would review existing contracts for corruption.

Ricardo Anaya 
“The Forward Front for Mexico” (“Por México Al Frente”) Coalition, made up of the right-wing National Action Party (PAN), the left-wing Party of the Democratic Revolution (PRD), and the left-wing Citizens’ Movement (MC).

Polling (a distant) second behind AMLO, Anaya has presented himself as a youthful (he’s 39) fresh face, promoting a vision of transitioning from manufacturing to a tech-focused economy, while curbing crime and corruption. Anaya is a former legislator who presents himself as a would-be departure from previous presidents, and he was able to secure the unusual backing of both the right-wing PAN, and the left-wing PRD and MC. Anaya nonetheless is the current PAN president, has been a party functionary for several years, and has been a member of the party for his entire political career. He has also been criticized by some within his own party for divisive actions he has taken, and has been dogged by corruption allegations of his own.

José Antonio Meade
Everyone for Mexico (“Todos por México”) coalition, made up of the Institutional Revolutionary Party (PRI), New Alliance (PANAL), and the Ecologist Green Party of Mexico (PVEM).

Although he is the candidate of the ruling PRI, Meade wasn’t a member of the party until recently. Though the PRI’s strategy appears to be an effort to run the little-known Meade as an “outsider” candidate, he is still trailing in third place. Meade may in fact be the consummate “insider-outsider”: he is a former cabinet secretary (energy, foreign relations, social development, and then finance and public credit) with degrees in law and economics from UNAM and Yale, respectively.

Jaime “El Bronco” Rodríguez
Independent candidate

This is the first year that independent candidates can run for president. Rodríguez, better known as “El Bronco,” has focused much of his campaign on that he is not affiliated with a party, the solution he says Mexico needs (although he may also be remembered for his debate response when he said he would solve corruption by cutting off thieves’ hands).

Margarita Zavala, a lawyer and politician, and the wife of former President Felipe Calderón of the PAN party, was also running as an independent candidate, before she withdrew in May (though her name still appears on the ballots, which were printed before her announcement).

The story so far:

Polls have consistently had López Obrador in the lead throughout the campaign; at this point over 20 points ahead, according to the majority of pollsters. His election would represent a historic shift for Mexico. The PRI led Mexico uninterrupted for 71 years, before PAN governments took over in 2000 and again in 2006. When Enrique Peña Nieto of the PRI took office in 2012, he signed the “Pact for Mexico,” along with the heads of the PRI, PAN, and PRD parties. This pact promised, in part, a new era of economic growth and prosperity, which did not materialize. It did, however, consolidate the idea for many of the PRI, PAN, and PRD working in alliance, which may have damaged the standing of all three parties given the unpopularity of the current PRI administration. The traditionally left-leaning PRD eventually left the Pact, though it is in coalition with the center-right PAN in the 2018 elections. If elected, López Obrador, with the Morena party and the “Together We Will Make History” coalition, would therefore represent a significant departure from Mexico’s political history thus far.

Voting Day:

Voting centers will be open from 8:00 am to 6:00 pm (or until all those in line to vote before 6 pm have voted). At 11 pm, the National Voting Institute (INE, by its Spanish initials) will release its initial projections of results based on a broad sample of centers with confirmed voting tallies. Between 8 pm on July 1 and 8 am on July 2, the results tallied in each voting center are electronically transmitted to the INE headquarters in Mexico City. In theory, the preliminary (PREP) results could be processed and made public by late evening on July 1, but past experience suggests that the results may not be publicly released until the early morning of July 2.

In 1991, Argentina fixed its peso to the US dollar, but the increasing value of the dollar led to a deep recession beginning in mid-1998, and default on dollar-denominated debt in December 2001. The currency board devalued the peso by 29 percent in January 2002, before the peso fell further over the year as the peg was abandoned completely.

The year 2001 also represented a low point in Argentina’s commodity prices. From 2001 to 2011, prices rose 187 percent — much faster than import prices generally, which rose 42 percent over the same period. This was the largest relative increase in commodity prices since 1933, shortly after Argentina abandoned the gold standard.

This has led some observers to attribute Argentina’s rapid economic growth after coming out of recession to a commodity boom, but an increase in commodity prices can cut both ways, increasing the price of purchases as well as sales. Indeed, there was considerable improvement in the terms of trade over 2001–2011, and the price of gross domestic product (GDP) relative to that of domestic demand (domestic consumption and investment) grew only about 7.5 percent. This suggests that the impact on real output was modest — perhaps less than 3 percent over the decade.

In a recent paper, Thomas Drechsel and Silvana Tenreyro study the economic effects of commodity price shocks. In part, they apply a vector autoregression (VAR) statistical model to data from Argentina going back to 1900. In brief, they find that an economy-wide shock[1] that immediately raises commodity prices by 9–11 percent temporarily increases real per-capita GDP 0.6–2.3 percentage points by the following year. They find through this approach no evidence that such a shock has any long-run effect.

Though real commodity prices doubled between 2001 and 2011, Drechsel and Tenreyro’s VAR model suggests that for most of the decade commodity-price shocks do not contribute meaningfully to the evolution of commodity prices over the decade. Figure 1 below shows historical real commodity prices (dark blue) along with simulated results having removed the exogenous price shocks after 2001 (light bands span 80, 90, and 95 percent of simulations). Only after 2010 did exogenous price shocks drive prices above the expected range.

rosnick commodities boom 2018 05 fig 1

Consequently, the accumulated price shocks after 2001 only increased GDP 4 percent by 2012 — raising the annualized rate of per-capita growth over 11 years from 2.8 percent to 3.2 percent. Though it may be that commodity-price shocks contributed to growth in Argentina, we see little evidence that it drove the rapid economic growth of the 2000s. This is seen in Figure 2.

rosnick commodities boom 2018 05 fig 2

Finally, we may repeat the above analysis using our measure of trade windfalls — the price of GDP relative to that of domestic demand — in lieu of real commodity prices. As Figure 3 shows, the additional purchasing power that was made available through changes in trade prices had no observable effect on GDP.

rosnick commodities boom 2018 05 fig 3

[1] Unexpected movements in commodity prices are correlated with unexpected movements in other macroeconomic variables in the model. Drechsel and Tenreyro assume that such movements in commodity prices may have contemporaneous effects on other variables, yet other variables have no contemporaneous impact on commodity prices. The other variables are likewise ordered so that an exogenous “GDP shock” may contemporaneously move consumption, investment, and the balance of trade, but only such a price shock may so move commodity prices. Our counterfactual simulations involve removing the price shocks that affect all endogenous variables, leaving in place those shocks that by assumption do not contemporaneously affect commodity prices.

In 1991, Argentina fixed its peso to the US dollar, but the increasing value of the dollar led to a deep recession beginning in mid-1998, and default on dollar-denominated debt in December 2001. The currency board devalued the peso by 29 percent in January 2002, before the peso fell further over the year as the peg was abandoned completely.

The year 2001 also represented a low point in Argentina’s commodity prices. From 2001 to 2011, prices rose 187 percent — much faster than import prices generally, which rose 42 percent over the same period. This was the largest relative increase in commodity prices since 1933, shortly after Argentina abandoned the gold standard.

This has led some observers to attribute Argentina’s rapid economic growth after coming out of recession to a commodity boom, but an increase in commodity prices can cut both ways, increasing the price of purchases as well as sales. Indeed, there was considerable improvement in the terms of trade over 2001–2011, and the price of gross domestic product (GDP) relative to that of domestic demand (domestic consumption and investment) grew only about 7.5 percent. This suggests that the impact on real output was modest — perhaps less than 3 percent over the decade.

In a recent paper, Thomas Drechsel and Silvana Tenreyro study the economic effects of commodity price shocks. In part, they apply a vector autoregression (VAR) statistical model to data from Argentina going back to 1900. In brief, they find that an economy-wide shock[1] that immediately raises commodity prices by 9–11 percent temporarily increases real per-capita GDP 0.6–2.3 percentage points by the following year. They find through this approach no evidence that such a shock has any long-run effect.

Though real commodity prices doubled between 2001 and 2011, Drechsel and Tenreyro’s VAR model suggests that for most of the decade commodity-price shocks do not contribute meaningfully to the evolution of commodity prices over the decade. Figure 1 below shows historical real commodity prices (dark blue) along with simulated results having removed the exogenous price shocks after 2001 (light bands span 80, 90, and 95 percent of simulations). Only after 2010 did exogenous price shocks drive prices above the expected range.

rosnick commodities boom 2018 05 fig 1

Consequently, the accumulated price shocks after 2001 only increased GDP 4 percent by 2012 — raising the annualized rate of per-capita growth over 11 years from 2.8 percent to 3.2 percent. Though it may be that commodity-price shocks contributed to growth in Argentina, we see little evidence that it drove the rapid economic growth of the 2000s. This is seen in Figure 2.

rosnick commodities boom 2018 05 fig 2

Finally, we may repeat the above analysis using our measure of trade windfalls — the price of GDP relative to that of domestic demand — in lieu of real commodity prices. As Figure 3 shows, the additional purchasing power that was made available through changes in trade prices had no observable effect on GDP.

rosnick commodities boom 2018 05 fig 3

[1] Unexpected movements in commodity prices are correlated with unexpected movements in other macroeconomic variables in the model. Drechsel and Tenreyro assume that such movements in commodity prices may have contemporaneous effects on other variables, yet other variables have no contemporaneous impact on commodity prices. The other variables are likewise ordered so that an exogenous “GDP shock” may contemporaneously move consumption, investment, and the balance of trade, but only such a price shock may so move commodity prices. Our counterfactual simulations involve removing the price shocks that affect all endogenous variables, leaving in place those shocks that by assumption do not contemporaneously affect commodity prices.

Months after Hurricane Maria the lights are still not back on for all Puerto Ricans. The extensive damage caused by the storm, along with the slow pace of restoring electricity have highlighted the struggles of Puerto Rico’s Electric Power Authority (PREPA). Prior to the storm, PREPA was already dealing with old and failing infrastructure, and a debt burden of about $9 billion dollars. When the storm hit, the embattled utility was not prepared to respond to the damage.  

The Fiscal Plan released by Puerto Rico’s government does not question whether privatizing PREPA is needed, but rather presents it as the only viable option. The plan claims that by privatizing the utility, it will “transform” it into an efficient, reliable, and cost-effective energy provider. The proposed privatization process consists of a mix between selling assets, and offering concessions to private companies to run operations.

However, privatization is no panacea for fixing public utilities, and Puerto Rico’s past experience should ring alarm bells. Two failed attempts at privatizing water services resulted in the government having to retake control of the utility in even worse shape. The disastrous results of Puerto Rico Aqueducts and Sewers Authority (PRASA) contracting with private companies to manage its operations are detailed in this report by Puerto Rico’s Comptroller’s Office.

In the 90s, Puerto Rico’s water services were struggling with quality issues, as well as with their finances. As a response to PRASA’s operational issues, then Governor Pedro Rosselló (the current governor’s father) created a commission to negotiate and oversee the privatization of water services. The first contract to oversee and manage water services in Puerto Rico was entered into in 1995 with a subsidiary of the French multinational Veolia.

However, after Veolia took over, things only got worse. Service quality worsened and prices for consumers increased, along with the agency’s operational deficit. To make matters worse, Veolia was not complying with environmental regulations, prompting fines and sanctions from the US Environmental Protection Agency. PRASA was ill-equipped to oversee and enforce its contract with Veolia and for years complied with the increased payments requested by Veolia, despite the lack of tangible improvements.

The contract with Veolia ended in 2001 and was not renewed. Instead Puerto Rico sought a different private contractor to take over operations. This time, Puerto Rican officials claimed they had a “top-notch Evaluation Committee” that selected an operator that would “bring current operations to world-class standards.” PRASA entered into a 10-year, $4 billion contract with Ondeo, a subsidiary of French multinational Suez, that “this time” included clauses to assure compliance with its stated goals, while also promising to bring huge savings for the government.

Less than two years later, after numerous disputes and disagreements with Ondeo, which repeatedly requested more money than the initial agreement from PRASA, while also failing to update the system’s infrastructure, PRASA paid the company a settlement to rescind the contract. After the termination of the second contract, public management of water services was resumed.  

Somehow, this disastrous experience seems to have been quickly forgotten by the ardent proponents of privatization. When PREPA was slow to respond to the damage caused by the hurricane, privatization was aggressively pushed as the only solution to effectively rebuild the power grid. Furthermore, Puerto Rico’s plan for PREPA criticizes the agency in charge of regulating the utility, the Puerto Rico Energy Commission (PREC), and calls for creating a “reasonable regulatory process” for the future private owners. Handing over a public utility to the private sector, while calling for less regulation should be cause for concern.

While there is a clear need to reform PREPA, privatization is not necessarily the answer, as Puerto Rico’s own history shows. While agreeing to hand over a concession to a private firm might appear to save money at first, in practice things do not always work out as planned. And no matter who is in charge of PREPA, there is no doubt it needs a strong and accountable regulator to oversee it and protect consumers.

Months after Hurricane Maria the lights are still not back on for all Puerto Ricans. The extensive damage caused by the storm, along with the slow pace of restoring electricity have highlighted the struggles of Puerto Rico’s Electric Power Authority (PREPA). Prior to the storm, PREPA was already dealing with old and failing infrastructure, and a debt burden of about $9 billion dollars. When the storm hit, the embattled utility was not prepared to respond to the damage.  

The Fiscal Plan released by Puerto Rico’s government does not question whether privatizing PREPA is needed, but rather presents it as the only viable option. The plan claims that by privatizing the utility, it will “transform” it into an efficient, reliable, and cost-effective energy provider. The proposed privatization process consists of a mix between selling assets, and offering concessions to private companies to run operations.

However, privatization is no panacea for fixing public utilities, and Puerto Rico’s past experience should ring alarm bells. Two failed attempts at privatizing water services resulted in the government having to retake control of the utility in even worse shape. The disastrous results of Puerto Rico Aqueducts and Sewers Authority (PRASA) contracting with private companies to manage its operations are detailed in this report by Puerto Rico’s Comptroller’s Office.

In the 90s, Puerto Rico’s water services were struggling with quality issues, as well as with their finances. As a response to PRASA’s operational issues, then Governor Pedro Rosselló (the current governor’s father) created a commission to negotiate and oversee the privatization of water services. The first contract to oversee and manage water services in Puerto Rico was entered into in 1995 with a subsidiary of the French multinational Veolia.

However, after Veolia took over, things only got worse. Service quality worsened and prices for consumers increased, along with the agency’s operational deficit. To make matters worse, Veolia was not complying with environmental regulations, prompting fines and sanctions from the US Environmental Protection Agency. PRASA was ill-equipped to oversee and enforce its contract with Veolia and for years complied with the increased payments requested by Veolia, despite the lack of tangible improvements.

The contract with Veolia ended in 2001 and was not renewed. Instead Puerto Rico sought a different private contractor to take over operations. This time, Puerto Rican officials claimed they had a “top-notch Evaluation Committee” that selected an operator that would “bring current operations to world-class standards.” PRASA entered into a 10-year, $4 billion contract with Ondeo, a subsidiary of French multinational Suez, that “this time” included clauses to assure compliance with its stated goals, while also promising to bring huge savings for the government.

Less than two years later, after numerous disputes and disagreements with Ondeo, which repeatedly requested more money than the initial agreement from PRASA, while also failing to update the system’s infrastructure, PRASA paid the company a settlement to rescind the contract. After the termination of the second contract, public management of water services was resumed.  

Somehow, this disastrous experience seems to have been quickly forgotten by the ardent proponents of privatization. When PREPA was slow to respond to the damage caused by the hurricane, privatization was aggressively pushed as the only solution to effectively rebuild the power grid. Furthermore, Puerto Rico’s plan for PREPA criticizes the agency in charge of regulating the utility, the Puerto Rico Energy Commission (PREC), and calls for creating a “reasonable regulatory process” for the future private owners. Handing over a public utility to the private sector, while calling for less regulation should be cause for concern.

While there is a clear need to reform PREPA, privatization is not necessarily the answer, as Puerto Rico’s own history shows. While agreeing to hand over a concession to a private firm might appear to save money at first, in practice things do not always work out as planned. And no matter who is in charge of PREPA, there is no doubt it needs a strong and accountable regulator to oversee it and protect consumers.

This interview with Marco Ramiro Lobo, a non-voting member of the Honduran electoral authority (TSE by its Spanish acronym) was published on December 3rd by El Faro. In the days since, the TSE has conducted a partial review of actas in an attempt to satisfy concerns raised by international observers and the political opposition, and has agreed to recount the 5000 actas discussed in the interview. However, both the second and third-place finishers continue to reject the results provided by the TSE, which they say has lost all credibility. Both parties filed legal challenges to the results requesting a full vote-by-vote recount and the annulment of the elections, respectively. More than two weeks since the election, many questions remain about how things went so wrong.

He’s an alternate member but, after the president of the Supreme Electoral Tribunal (TSE in Spanish) of Honduras, he is the most visible of the tribunal’s four magistrates. He doesn’t have a vote, but he has a voice and he has made certain that he is heard. Marco Ramiro Lobo was appointed by the Honduran congress three years ago, and today he appears to be the magistrate most opposed to the decisions of the tribunal’s president, David Matamoros. He’s demanding an in-depth investigation of two system failures by the TSE’s vote-tallying technology. He admits that the TSE bears the primary responsibility for the political and social crisis gripping Honduras a week after its presidential election.

The tribunal consists of a magistrate, President David Matamoros, from the National Party, a representative from the Liberal Party, Erick Rodríguez, a member of the tiny Democratic Christian Party, Saúl Bonilla, and Lobo, a member of the small Party of Democratic Unification (UD). The Honduran congress refused to name a representative from the Free Party or the Party for Innovation and Unity (PINU), which make up the Opposition Alliance headed by Salvador Nasralla and Mel Zelaya, who are currently denouncing the reported results as fraudulent.

Without representatives on the tribunal, the opposition has relied on the resistance of magistrate Lobo to legitimate its concerns about the electoral process. But Lobo says there are clear differences of criteria among the members of the Tribunal: on one side Rodríguez and himself; on the other Matamoros and Bonilla.

After a week without official results, and violence breaking out in the streets, the TSE was scheduled to begin a special recount this Sunday [December 3rd], beginning with one thousand actas [tally sheets from voting stations signed by witnesses from political parties] sent to the TSE for special monitoring. Unfortunately, this recount will take place without observers from the Opposition Alliance, which has refused to endorse the process until the TSE commits to reviewing 5000 already processed actas with vote counts that have led to the suspicion that they were altered during the transmission process. Magistrate Lobo insists that these demands should be satisfied or else the final declaration of a winner will lack credibility.

How would you explain the current chaos?

Look, when the court met to outline its proceedings, we decided that we would give a preliminary announcement after tallying 750 actas and seeing a stable trend. But we didn’t end up doing this.

But the president of the Supreme Electoral Tribunal (TSE), David Matamoros, said late on the 26th that there wasn’t a stable trend… What does the tribunal qualify as a stable trend?

It’s a proportional representation of each of the country’s regions. We already had a stable trend that night. The tendency of the results had grown in favor of Nasralla. The president of the tribunal didn’t want to give the announcement because his party was losing.

Tell me a little bit about that night and the discussion to convince Matamoros to announce the results.

Two magistrates, Erick Rodríguez and I, wanted to give the preliminary results. The other two magistrates said the results were too close. We already had 57 percent of the actas, and they indicated a stable trend in voting outcome. At one in the morning (on Monday, the 27th) the Organization of American States (OAS) mediated an agreement. Two people came from the OAS: Gerardo de Icaza and Gerardo Vásquez. A statement needed to be made. I think this is the origin of the conflict, because this ten hour period of silence created enormous doubts. And within the tribunal there have continued to be different visions.

So you and Rodríguez had opposing views to those of Matamoros and Escobar?

Yes.

But you’re an alternate on the tribunal. You don’t have the right to vote. So it was two versus one.

I participate in all of the tribunal’s formal meetings, but I don’t vote. Up until now, we had never voted on anything.

The tribunal didn’t vote on anything? Who decided then, for example, which of the Opposition Alliances’ demands to agree to and which to dismiss?

During this entire process, we haven’t voted. Those issues have been managed by the [tribunal] presidency. I imagine he consults with the other two magistrates, but not with me.

Much of the general population is denouncing fraud surrounding the election. Is there fraud?

There are doubts. Many doubts. First, the tribunal’s silence. Second, the suspension of the vote count the day after the election. Then the first breakdown of the vote-counting system at 9 a.m. on Wednesday. The system went down for five hours. After that the system came back up but the counting was intermittent until it broke down again Thursday morning. It came back online again five hours later. This raised doubts for many, including me.

And what reason was given for these system failures?

They told us that the system broke because the memory was too full, and when they tried to increase the system’s memory capacity, the system broke instead. I’m not a technical person who can determine what happened, but this created even more doubts because before the system went down Nasralla had an advantage with an already stable trend. When the system started running again, the voting trend reversed to favor Hernández and hasn’t changed since. We invested millions so that we could have a reliable voting system. They told us that if there were an emergency, there would be backup servers… They should verify the tribunal’s database and the logs. We have asked for an audit.

Do you think the system failures were an accident?

I’m not sure if it was an accident or was deliberate. But we need an investigation.

So there’s been fraud or the tribunal is highly incompetent. Is there a third option?

It’s a partisan tribunal that represents party interests. I think the biggest problem with the tribunal is that it takes partisan positions that clearly relate to its members’ political tendencies.

And what is your political preference?

I come from the Party of Democratic Unification (UD), a very small party. But look, partisanship should not control this process, because there were already clearly defined protocols. It wasn’t the protocols that failed, but rather the political will of the tribunal to follow its own protocols.

You’re saying that processing the data has been slow because of politicization?

The TSE was initially very successful at transmitting the results. By 7 p.m. the transmission from voting centers was already much more successful than we had expected. This wasn’t the problem, but rather, as I said, the tribunal’s silence despite that fact that we already had the information.

Salvador Nasralla has denounced irregularities in the transmission of the actas.

We are obliged to take into consideration any request from anyone with doubts [regarding the election process]. What’s important is that when we make a final announcement, we do so without any remaining concerns or doubts. We should resolve the issues raised in the complaints. They aren’t difficult to resolve.

Then why haven’t they been resolved?

We’ve begun meeting with the Opposition Alliance. In addition to their current requests, they’ve added a request for access to the database logs. We’re coming up with the best way to get them that information.

What about the demand to recount the five thousand actas transmitted from vote-tallying center at the National Institute for Professional Development (INFOP) that the Alliance suspects were altered?

I think they should check these 5000 actas.

Is there disagreement around this issue?

The tribunal has not met to make a formal decision.

How long would it take to carry out this partial recount?

We could probably check the 5000 actas in three or four days.

Have any of the magistrates received external pressure?

I can only speak for myself. No one has pressured me at all. I can’t speak for the other magistrates because we don’t discuss these matters.

Does the popular action in the streets of Honduras act as a form of pressure on the tribunal?

Yes. The later this goes, the tenser it becomes. There are Hondurans who have died for no reason. If we had done things properly…

But they haven’t been done properly.

No.

Taking this all into account, if the TSE declares Juan Orlando Hernández to be the winner, many people won’t believe them.

It’s going to be difficult. Very difficult. At this point, any result will be complicated regardless of the explanations we give. Doubts are going to persist.

This interview with Marco Ramiro Lobo, a non-voting member of the Honduran electoral authority (TSE by its Spanish acronym) was published on December 3rd by El Faro. In the days since, the TSE has conducted a partial review of actas in an attempt to satisfy concerns raised by international observers and the political opposition, and has agreed to recount the 5000 actas discussed in the interview. However, both the second and third-place finishers continue to reject the results provided by the TSE, which they say has lost all credibility. Both parties filed legal challenges to the results requesting a full vote-by-vote recount and the annulment of the elections, respectively. More than two weeks since the election, many questions remain about how things went so wrong.

He’s an alternate member but, after the president of the Supreme Electoral Tribunal (TSE in Spanish) of Honduras, he is the most visible of the tribunal’s four magistrates. He doesn’t have a vote, but he has a voice and he has made certain that he is heard. Marco Ramiro Lobo was appointed by the Honduran congress three years ago, and today he appears to be the magistrate most opposed to the decisions of the tribunal’s president, David Matamoros. He’s demanding an in-depth investigation of two system failures by the TSE’s vote-tallying technology. He admits that the TSE bears the primary responsibility for the political and social crisis gripping Honduras a week after its presidential election.

The tribunal consists of a magistrate, President David Matamoros, from the National Party, a representative from the Liberal Party, Erick Rodríguez, a member of the tiny Democratic Christian Party, Saúl Bonilla, and Lobo, a member of the small Party of Democratic Unification (UD). The Honduran congress refused to name a representative from the Free Party or the Party for Innovation and Unity (PINU), which make up the Opposition Alliance headed by Salvador Nasralla and Mel Zelaya, who are currently denouncing the reported results as fraudulent.

Without representatives on the tribunal, the opposition has relied on the resistance of magistrate Lobo to legitimate its concerns about the electoral process. But Lobo says there are clear differences of criteria among the members of the Tribunal: on one side Rodríguez and himself; on the other Matamoros and Bonilla.

After a week without official results, and violence breaking out in the streets, the TSE was scheduled to begin a special recount this Sunday [December 3rd], beginning with one thousand actas [tally sheets from voting stations signed by witnesses from political parties] sent to the TSE for special monitoring. Unfortunately, this recount will take place without observers from the Opposition Alliance, which has refused to endorse the process until the TSE commits to reviewing 5000 already processed actas with vote counts that have led to the suspicion that they were altered during the transmission process. Magistrate Lobo insists that these demands should be satisfied or else the final declaration of a winner will lack credibility.

How would you explain the current chaos?

Look, when the court met to outline its proceedings, we decided that we would give a preliminary announcement after tallying 750 actas and seeing a stable trend. But we didn’t end up doing this.

But the president of the Supreme Electoral Tribunal (TSE), David Matamoros, said late on the 26th that there wasn’t a stable trend… What does the tribunal qualify as a stable trend?

It’s a proportional representation of each of the country’s regions. We already had a stable trend that night. The tendency of the results had grown in favor of Nasralla. The president of the tribunal didn’t want to give the announcement because his party was losing.

Tell me a little bit about that night and the discussion to convince Matamoros to announce the results.

Two magistrates, Erick Rodríguez and I, wanted to give the preliminary results. The other two magistrates said the results were too close. We already had 57 percent of the actas, and they indicated a stable trend in voting outcome. At one in the morning (on Monday, the 27th) the Organization of American States (OAS) mediated an agreement. Two people came from the OAS: Gerardo de Icaza and Gerardo Vásquez. A statement needed to be made. I think this is the origin of the conflict, because this ten hour period of silence created enormous doubts. And within the tribunal there have continued to be different visions.

So you and Rodríguez had opposing views to those of Matamoros and Escobar?

Yes.

But you’re an alternate on the tribunal. You don’t have the right to vote. So it was two versus one.

I participate in all of the tribunal’s formal meetings, but I don’t vote. Up until now, we had never voted on anything.

The tribunal didn’t vote on anything? Who decided then, for example, which of the Opposition Alliances’ demands to agree to and which to dismiss?

During this entire process, we haven’t voted. Those issues have been managed by the [tribunal] presidency. I imagine he consults with the other two magistrates, but not with me.

Much of the general population is denouncing fraud surrounding the election. Is there fraud?

There are doubts. Many doubts. First, the tribunal’s silence. Second, the suspension of the vote count the day after the election. Then the first breakdown of the vote-counting system at 9 a.m. on Wednesday. The system went down for five hours. After that the system came back up but the counting was intermittent until it broke down again Thursday morning. It came back online again five hours later. This raised doubts for many, including me.

And what reason was given for these system failures?

They told us that the system broke because the memory was too full, and when they tried to increase the system’s memory capacity, the system broke instead. I’m not a technical person who can determine what happened, but this created even more doubts because before the system went down Nasralla had an advantage with an already stable trend. When the system started running again, the voting trend reversed to favor Hernández and hasn’t changed since. We invested millions so that we could have a reliable voting system. They told us that if there were an emergency, there would be backup servers… They should verify the tribunal’s database and the logs. We have asked for an audit.

Do you think the system failures were an accident?

I’m not sure if it was an accident or was deliberate. But we need an investigation.

So there’s been fraud or the tribunal is highly incompetent. Is there a third option?

It’s a partisan tribunal that represents party interests. I think the biggest problem with the tribunal is that it takes partisan positions that clearly relate to its members’ political tendencies.

And what is your political preference?

I come from the Party of Democratic Unification (UD), a very small party. But look, partisanship should not control this process, because there were already clearly defined protocols. It wasn’t the protocols that failed, but rather the political will of the tribunal to follow its own protocols.

You’re saying that processing the data has been slow because of politicization?

The TSE was initially very successful at transmitting the results. By 7 p.m. the transmission from voting centers was already much more successful than we had expected. This wasn’t the problem, but rather, as I said, the tribunal’s silence despite that fact that we already had the information.

Salvador Nasralla has denounced irregularities in the transmission of the actas.

We are obliged to take into consideration any request from anyone with doubts [regarding the election process]. What’s important is that when we make a final announcement, we do so without any remaining concerns or doubts. We should resolve the issues raised in the complaints. They aren’t difficult to resolve.

Then why haven’t they been resolved?

We’ve begun meeting with the Opposition Alliance. In addition to their current requests, they’ve added a request for access to the database logs. We’re coming up with the best way to get them that information.

What about the demand to recount the five thousand actas transmitted from vote-tallying center at the National Institute for Professional Development (INFOP) that the Alliance suspects were altered?

I think they should check these 5000 actas.

Is there disagreement around this issue?

The tribunal has not met to make a formal decision.

How long would it take to carry out this partial recount?

We could probably check the 5000 actas in three or four days.

Have any of the magistrates received external pressure?

I can only speak for myself. No one has pressured me at all. I can’t speak for the other magistrates because we don’t discuss these matters.

Does the popular action in the streets of Honduras act as a form of pressure on the tribunal?

Yes. The later this goes, the tenser it becomes. There are Hondurans who have died for no reason. If we had done things properly…

But they haven’t been done properly.

No.

Taking this all into account, if the TSE declares Juan Orlando Hernández to be the winner, many people won’t believe them.

It’s going to be difficult. Very difficult. At this point, any result will be complicated regardless of the explanations we give. Doubts are going to persist.

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