10 clues to the relationship between Norway and Latin America in 2016
Every year, I make a list of the top events in Latin America of impact on Norway’s relations to the region (see here for 2014 and here for 2015). Not everything changes over a year and some of the key topics are still on top of the list. Here is my list of events the past year of major impact on the relationship between Norway and Latin America for 2016.
1. The Paris climate deal and expansion of Norway’s effort to protect Latin American forests
The most important Norwegian project in Latin America over the last years is without any doubt the cooperation on saving the forests. In spite of controversies and criticism of the Amazon-fund set up with Brazil it is considered a major and innovative step forward in contributions to reducing global climate emissions. During the climate summit in Paris, a new agreement was signed with Colombia, in partnership with Germany and Great Britain. Norway’s total contribution will be 1.8 billion kroner depending on Colombia’s performance in terms of reducing deforestation. As a result Norway was presented in Colombian press as the new “godfathers of the forest”. At the same summit, an agreement with Brazil to continue the cooperation in the Amazon fund until 2020. At the same time, the first disbursement from Norway to Peru of 5 million dollars for protecting forest, based on an agreement signed in 2014 was announced. There is little doubt that climate and environmental issues will be top priority on the agenda with Latin America also in the year to come.
2. The crisis in Brazil.
There seems to be no end to the Brazilian crisis, with the corruption scandals involving ever larger parts of the country’s economic and political elite. Although the first attempt to impeach President Dilma Rouseff was stopped by the Supreme Court in December the decision will probably not give her much more than a breather. Norwegian companies, several of which have a strong governmental participation, are heavily invested in Brazil. Norwegian investments in Brazil total around 220 billion Norwegian kroner (24.9 billion USD). A major share is in Oil & Gas, but other sectors increase more. And there is little doubt that the economic interest by Norwegian companies was a major driver behind, not only the Norwegian governments focus on Brazil starting around 2007, but indeed the attention to the whole region. Currently, two Norwegian companies – Akastor and Uglands rederi – are investigating allegations of involvement into the corruption scandal, and last week Statoil announced that it would investigate all contracts with Petrobras Although Norway has proven to be a “bad weather friend” to Brazil, by sending a delegation of 70 business representatives and officials headed by Crown Prince Haakon to Brazil in November the crisis with inevitably hit the relationship between Norway and Brazil and indeed the rest of the region, hard.
3. New breakthroughs in the Colombia negotiations
The negotiations for a Peace agreement in Colombia have been on the list for a bit longer than some would have hoped for when they were launched in Oslo in October 2012. However, they are still not concluded and they are still the major diplomatic effort by the Norwegian government in the region. This year there were two major breakthroughs, one on September 23rd and one on December 15th jointly making up innovative mechanisms on victims reparations and transitional justice, and thus resolving point four on the 6 point agenda agreed upon. The items left for this year are the terms for a final bilateral ceasefire, the setting aside of weapons, and ending the conflict; as well as the final item on the mechanisms and procedures for endorsement, verification and monitoring. However, Juan Manuel Santos, travelling to Cuba on September 23rd has already announced the signing of the final accords to be 23rd of March. After having passed through a national process of endorsement, Colombia will – hopefully – move into a post-conflict process. That will mean that Norway’s formal role as a guarantor country will end. There are many perceivable new roles for Norway in a process of implementing the accords, but one could also imagine Norway’s role to be over and thus the strong focus that has been on Colombia and Cuba during the period in which the negotiations have lasted, to end.
4. The budget cuts
As usual, some of the most important events of relevance to the Norway-Latin America relations happened at home. This year the refugee crisis and the proposed budget cuts to cover expenses related to the increased flow of refugees in Norway as well as alleviating the situation in crisis-ridden Middle East, have a major impact on the budget for cooperation with Latin America for 2016. After the Latin America budget was essentially eliminated in the first plan for budget cuts, some 80 million were rescued in the compromise reached in the Storting. However, it is clear that Norwegian development cooperation to Latin America (that has never been very significant) is about to become a thing of the past. While there are good arguments for why Latin America should not be a traditional aid recipient (arguments that indeed have been voiced by the shifting governments for a decade), this government has not made any effort to rethink the relationship. I don’ see it coming in 2016 either, but I could be wrong.
5. The painfully slow process of normalization of the US-Cuba relations
2015 started with the euphoria over the declaration by the United States and Cuba to normalize relations. During 2015 a US embassy has been established in Cuba and a Cuban one in the United States, Cuba was removed from the US list of terrorist countries and commercial air services were restored. However, Cuba is still in an economic crisis and seemingly without a clear plan for the path out of it in a gradually opening economy. The expectations for the US to lift the embargo is not bright for 2016, particularly in the midst of an electoral campaign in which republican frontliners such including Marco Rubio, Ted Cruz, and Bob Menendez fiercely criticize the opening process. In the meanwhile, pushed by the Cuban economic crisis and hurried by the prospects for a tightening of migration-rules for Cubans, thousands have attempted to flee to the United States by Central America where they have been trapped after Costa Rica stopped issuing transit visa, and Nicaragua shut its borders. Although the immediate crisis is resolved it is merely a sign of the deep imbalances and complexity of current US-Cuba relations. The current Norwegian government has largely followed the same strategy of the former government related to Cuba (and not listened to the conservative hardliners within its coalition). That is for both political and economic reasons. However, it has required a lot of patience to stay put waiting for opportunities to occur. With upcoming presidential elections in the United States, 2016 is likely to require more patience and wisdom. However, as Cuba will celebrate its 7th party congress in March 2016, it is also likely that some more clarity is brought to Cuba’s development path.
6. The disenchantment with the “pink tide”
One of the reasons behind the Norwegian approach to Latin America in the mid-2000s was the emergence of progressive, political projects with governments aiming to combat inequality and poverty through social policy and regional cooperation on national development strategies. The election of a right-wing business leader president in Argentina, and the Venezuelan oppositions acquiring of a controlling (now contested) majority in the parliament in the December 6 elections, have led some commentators to predict that we are seeing the return of a “blue tide” resembling the neoliberalism of the 1990s. This could bode well for close relations with Norway currently also governed by a right-wing coalition. However, much more likely than a right-wing wave, is a period of political stalemate, in some cases chaos, and in any event much less clarity in development policies and priorities. That will also mean that many of the countries will be less interesting as cooperation partners, both globally and bilaterally. However, there will still be room for cooperation on particular issues. My prediction is that climate will be on top of the agenda, followed by the search for investment opportunities in an increasingly crisis ridden region.
7. Mexico eking its way out of the shadow of violence but facing potentially violent local elections
In 2014, the Mexican embassy in Oslo opened after having lacked a representation here for more than a decade. The reason for the reopening was clear: to strengthen commercial ties between the two countries, particularly in the petroleum sector. To do that, it has been of key importance to improve Mexico’s image and more specifically reducing the damage done to it by the so called “war on drugs”. However, that has been an uphill battle this year. The escape of Chapo Guzmán from a high security prison in July happened, fortunately for the Mexican officials here, during summer holidays, and it achieved minimal attention. But the various revelations about the deficiencies in the investigation of the 43 disappeared students, as well as the quintuple murder of a famous Mexican journalist and four women in a presumably safe neighborhood in Mexico City did attract attention. While commercial initiatives are moving forward, it has been a slow process. This year Mexico faces a number of state and local elections, including in some of its most violent states (Sinaloa, Chihuahua and Tamaulipas). In Mexico, local and state level elections are always more prone to violence than federal elections as this is where criminal organizations mainly compete and collude with political authorities.
8. Peru – falling from grace?
Peru was for several years the star among the three high-growth Ps in Latin America: Panama, Paraguay and Peru. Between 2009 and 2013, the Peruvian economy grew between 6 and 10 percent annually. With its abundance of energy and fishery resources and over 30 million inhabitants including and expanding middle class, Peru became an attractive destiny for Norwegian investments. But not only that. It has become a close cooperation partner to Norway in environmental issues, and on indigenous consultation processes. However, 2015 meant increasing hardship for Peru. The economy tumbled and will end with a 2.6 percent growth. At the same time, political turmoil might result from the daughter of former authoritarian president Alberto Fujimoris – Keiko Fujimori’s ascendance on the polls for April’s presidential elections. Should she win the combination of a political shift and the low growth could contribute to a more lukewarm relation to Norway as well.
9. The Central American spring – or not – and Norway’s retirement from Guatemala
The first half of 2015 saw something hitherto unseen in Guatemala and Honduras. Thousands of protesters hit the street regularly to demand the resignation of the presidents and investigation of major corruption schemes. In Guatemala they were successful, with the help of the International Commission against Impunity in Guatemala (CICIG). The unraveling of two major corruption scandals brought down most of the Perez Molina government in August, but only to be replaced by a comedian with dubious political credentials after the second round of elections on October 26. It is hard to argue that this was the reason why Norway withdrew its embassy from Guatemala after having been present for 39 years. However, we do face a situation in Central America that is both worrisome and give reason to unprecedented optimism, without Norway’s presence. With that both the CICIG and a number of important social actors will have lost an important ally.
10. El Salvador returning to extreme violence
One of the most depressing occurrences of 2016 was the definitive scrapping of the gang-truce in El Salvador and the descent of the country in to what has become a “low intensity” war, but one that indeed is more intense in terms of casualties than its bloody 12-year civil war (1980-1992). While there has been a reduction in murders in Honduras as well as Mexico (in spite of what you might think from reading the Norwegian press), El Salvador will close the year with stunning murder rate of 104/100 000 (compare that to Mexico’s 13/100 000 that was presented in Norwegian media as extremely high). What happens in the tiny Central American country will not have major impact on relations with Norway. However, the Norwegian immigration authorities UDI is reporting cases of refugees from El Salvador seeking asylum in Norway as they try to escape forced recruitment or extreme violence in gang controlled areas. I would not be surprised if this will increase in 2016.