Photo Jonathan Blair

Tuesday, February 5, 2019

Check what Guatemala is doing at home while denouncing Venezuela in Ottawa...

Well, apparently, not all eyes are on Guatemala these days...

From The Americas Quarterly and worth reading in full.

All Eyes on Guatemala as Crisis Brews Ahead of Elections

President Jimmy Morales' maneuvering against Guatemala's institutions could give the U.S. a chance to recalibrate its policy.

It’s not every day that a purportedly friendly foreign nation tries to intimidate the United States by dispatching a fleet of military vehicles to the U.S. Embassy. It is rarer still for the vehicles in question to have been donated by the United States itself and diverted from their intended mission of combatting crime and narcotics trafficking. And it is perhaps unprecedented that such a turn of events would elicit only a tepid response from the U.S. government, followed a short while later by the transfer of additional military jeeps to the foreign government in question.

Camilleri is director of the Peter D. Bell Rule of Law Program at the Inter-American Dialogue. Ziff is a program assistant with the Peter D. Bell Program.

Venezuela: Norway looks a lot like the honest broker that Canada could have been

While Canada is calling for the Venezuelan military to change side and support Juan Guaido, Norway takes an "intriguing" position: at some point, it may be useful to have someone between the two sides and their respective allies.

Below, the Google translation of an article published yesterday in Verdens Gang (VG):

Norway does not recognize Juan Guaidó as temporary president of Venezuela

Unlike the United States and several European countries, the Norwegian government does not recognize opposition leader Juan Guaidó as temporary president of Venezuela.

- Norway has the tradition of recognizing states, not governments. We have always expressed our support for Juan Guaidó as the elected and legitimate president of the National Assembly, says Foreign Minister Ine Eriksen Søreide (H).

Guaidó, head of the Venezuelan National Assembly, proclaimed himself president two weeks ago, but still has little real power and seemingly little support from the country's armed forces.

Foreign Minister Ine Eriksen Søreide (H) says that Norway maintains the requirement for respect for democratic rights and new elections. She also reiterates previous statements that Norway encourages the parties to dialogue that may lead to new elections. - We maintain the demand for respect for democratic rights and new elections. The situation in Venezuela is acute and we urge the parties to establish an inclusive political process that can lead to new elections. Norway has a dialogue with both parties and has offered them assistance to such a process if and when they wish, ”she says.

Professor Benedicte Bull, a researcher at Latin America at the University of Oslo, follows developments in Venezuela. Photo: The University of OsloLes all of Norway can try to become facilitator - I look at this as stepping slightly gently. One does not necessarily disagree, but that it is okay to have players with a slightly different position for the government to withdraw. If they are pushed up in a corner, it can be difficult to accomplish something, says political scientist Benedicte Bull, who researches Latin America at the University of Oslo, to VG. She thinks there are two things one is now trying to achieve in Venezuela. One is a government change in new elections. The second is a good process that allows a government change to create a long-term peaceful solution. In this process, Norway may try to be a facilitator.

- There is no doubt that the government is giving clear support to Guaidó, but there is some cautious play, which may not be so stupid in this situation.

- Is there a solution in Venezuela? - I think things happen every day now. I think we're going to see a change in the situation. However, she says that a solution is far ahead.

- A solution had to be a transitional government, peace and a solution to the economic problems.

After President Nicolás Maduro on Monday refused to follow up the demand from seven EU countries to light new elections by Sunday, France, Spain, the UK and Sweden went Monday to announce the public announcement that they recognize Guaidó as Venezuela's acting president. Shortly after, Denmark, Lithuania, the Netherlands, Portugal, Germany and Austria joined.

The countries urge Guaidó to light new elections as quickly as possible.

"We are working to bring democracy back to Venezuela, with human rights, elections and no more political prisoners," said Spain's Prime Minister Pedro Sanchez in a television talk, according to the AP. Maduro, who has a background as union leader, bus driver and foreign minister, blames the United States for conducting economic warfare against Venezuela and raising coups hoping to gain control over the country's oil resources, Reuters writes.

Friday, January 25, 2019

Canada's gamble on Venezuela

Looking bold towards Venezuela is not without risk. Listening to the brief reference to Venezuela by the "At Issue Panel" yesterday on CBC was interesting. Svend Robinson and Niki Ashton's denunciations of Canada's recognition of Juan Guaido's as the legitimate President by interim of Venezuela are obviously of a piece with their support for Latin dictators... of the Left. But that was predictable. What was more surprising, given the usual clear-sightedness of Coyne and Hebert, was their straightforward acceptance of the rationales for Guaido's claim and for Canada's decision to support it. This came, it must be pointed out, after a long discussion of the idiotic public declarations of John McCallum regarding Huawei CFO Meng Wanzhou, and about their implications for Canada's claim to be acting strictly within the boundaries of "the rule of law."

There is no doubt that Maduro is an authoritarian ruler who has manipulated his country's electoral process to get a second mandate. There is no doubt either that his regime is inept and corrupt and that Venezuelan's are paying the price for it. As such, however, he is part of a pretty large club, most of whose members have a cosy relationship with Canada. Among them, it must be pointed out, one finds those economically incompetent dictators that would have prevented any "National Assembly" to keep functioning or a potential challenger to the President to roam around freely and hold a meeting which tens of thousands could join without the military or the police preventing them (hello Niki Ashton's Cuba).

It is obviously easy to take strong stands on issues that have no bearing on us. But in this case, it may not even be true. ICG's Robert Malley's comment should apply to Canada --notwithstanding the apparent consensus of the mainstream commentariat about Canada's courageous stand.

“The administration’s posture toward Venezuela is a foreign policy gamble that in hindsight could look prescient” if Mr. Maduro is forced out “or reckless if that doesn’t happen,” said Rob Malley, the president of the International Crisis Group and a former aide to Presidents Barack Obama and Bill Clinton. “At that point, the ball will be squarely in the U.S. court, with the risk that it does little and displays impotence or, worse, intervenes militarily and demonstrates rashness.”

What exactly are we doing, or more precisely what exactly can we do, with allies or without, to make the Venezuelan military change their mind: Offer them guarantees that they won't be prosecuted before the International Criminal Court?  Promise that they can keep the millions of dollars they squirreled into offshore safe havens? Why not offer them refugee status if they are under threat by the new regime or its supports, which is very likely to happen, given their track record and the bitterness that pervades Venezuela's political arena. After all, isn't this what France did for Haiti's Duvalier when he was thrown out--if this can help the transition? And what do we do if, say, only half the military change their mind and an all-out armed confrontation explodes in the streets of Caracas?

I think Mexico and Uruguay found the right tone, along with the UN, when they proposed, in the face of Guaido's declaration, a new process of negotiation, "inclusive and credible." Mexico in particular--through President Lopez Obrado's spokesperson--, cleverly gave itself some space for manoeuver by stating that their position had not changed "for now" ("hasta el momento"). No such room for those who jumped the gun and basically ruled themselves out as "honest brokers." Germany and Spain also tried to use their power a bit more wisely, announcing that they would recognize Guaido unless new elections are announced, and it is trying to get the EU to adopt the same position.

But Canada decided to jump. Now, will we recognize Martin Fayulu if he declares himself President of the Democratic Republic of the Congo, given the consensus of the international community about the illegitimacy of the December 30th election results? And which side will we pick when either of the likely winners of the Ukraine elections, Poroshenko or Timoshenko, is accused by her/his adversary, with plenty of evidence, of electoral fraud and corruption?

O'Malley is right: this is a gamble. I hope Freeland's will work, but I am not sure that I like the idea of gambling gaining ground as a diplomatic tactic.

Tuesday, November 6, 2018

With a longtime leftist out of the picture, Brazil lurches to the right

Brash, hard-right candidate Jair Bolsonaro is cleaning up in Brazil. How bad could that be for Brazilians and for the world?

The second round of Brazil’s presidential elections will take place on October 28 but the die has been cast: barring a miracle — or a cataclysmic disaster, depending on what side of the political spectrum one falls — Jair Messias Bolsonaro will almost certainly become president of the world’s eighth largest economy and fifth largest country by population.

The man, a former army captain with an unremarkable 27-year political career, sounds like an awkward Donald Trump with an even more explicitly sexist and racist bent. He promises an all-out war against crime in a country where the police already kill thousands every year, denounces human rights as a scheme to protect criminals, and openly longs for the quiet and stability that torture and repression ensured under Brazil’s 21-year military dictatorship. His economic program is ill-defined, but he has spoken about privatization, deregulation and tax reform, and his main economic adviser is reminiscient of the chicago-trained economists known for bringing neoliberal policies to the region in the 80s. 

Bolsonaro campaigned in the first round with little funding and a minuscule allotment of government-funded TV time because his party, the Social Liberal Party (PSL), had negligible representation in Congress and he could find precious few allies among other parties. He was forcefully denounced by all his opponents, the mainstream media and the country’s academics and intellectuals, and was unable to campaign after being stabbed during a rally.

Still, in the first round of voting on October 7, he finished first, and in a crowded field received 46 percent of all valid votes — 17 percent more than Workers’ Party (PT) candidate Fernando Haddad, against whom he will run in this weekend’s second round. The latest polls give Bolsonaro close to 60 percent of the votes in the latter. Most centrist and right-wing parties are now supporting him or refusing to take a strong stand in favour of his adversary, and he enjoys majority support in most regions of the country and in all major demographics, except in the poor Northeast, where the left still appears to maintain significant support.

Well-meaning people the world over have noticed and many are panicking. The New York Times deplored “Brazil’s Sad Choice.” Le Monde published a manifesto of intellectuals asking Brazilians to oppose Bolsonaro’s election. In the run-up to the first round, the Economist devoted its cover, main editorial and lead story to the “menace” he represents for Brazil and Latin America, and Robert Muggah, co-founder of the Igarapé Institute in Rio de Janeiro and an OpenCanada contributor, wondered in The New York Times if Brazil’s democracy could be saved.

Should the world, Latin America and especially Brazil really be scared by this latest incarnation of right-wing populism? To answer this question, one needs to understand why Brazilians are voting for Bolsonaro, and how much power he will have.

It is obviously very early for a post-mortem, but one should probably read much of the support for Bolsonaro as a protest vote. Many Brazilians have plenty of excellent reasons to be mad, and precious few to support a candidate — Haddad — clearly identified with the party that has governed the country for most of the last 16 years. Very little is left of a euphoric decade of growth underlied by China’s massive demand for the resources that Brazil exports. This extraordinary moment coincided with a unique demographic sweet spot in Brazil’s history, during which the ratio of working age population to dependents (children and retirees) was at its apex. It was an exceptional juncture, a golden opportunity. And the opportunity was missed. One could point to sectoral reforms, in health and education for instance, that could have long-lasting impacts, but much of the massive rent available for long-term structural investments was wasted in poorly-designed subsidies to the private sector, a massive expansion of public sector employment and pharaonic projects — most spectacularly, both the FIFA World Cup and the Olympics, held just two years apart.

Today, barely recuperating from three years of recession and stagnation, the country finds itself with poor growth prospects, high unemployment, a massive fiscal deficit, and a social security system that threatens to go bankrupt before much of the population can benefit from it. Add to the mix recurrent public health crises (remember Zika?), a chronic public security disaster (more than 60,000 homicides last year) that did not even let off at the height of the economic boom, and a constant flow of corruption scandals engulfing almost all political parties and reaching all the way up to two of the country’s last presidents, Luiz Inacio Lula de Silva and Michel Temer.

Amid crises, enter Bolsonaro

Weird, vulgar and boasting extreme views, Bolsonaro was a marginal figure in the Brazilian Congress. Like many of his fellow politicians, he has been under criminal investigation, but for racism and incitation for rape, not for corruption. In a most perverse way, he was thus not even in on the corruption schemes that involved many of his colleagues, and he has cleverly used that fact to present himself, with some justice, as an outsider. Haddad, a former mayor of São Paulo, could have made the same claim, but from the start, and very publicly during the first round, he fully identified with former president Lula, who is in prison for corruption. Through that lens, the choice was stark, between the outsider, Bolsonaro, and Haddad, hand-picked by the person who for many embodies the scandal.

The strong rejection of incumbents to the Senate and Chamber of Deputies in the first round also points to a protest vote and to a deep discontent with the political establishment: 85 percent of the senators elected and 52 percent of deputies will be new. Above all, however, the election was a settling of accounts between Brazilian elites and Lula, a man they long despised and were happy to see confined to prison and denied a chance to defend himself. Without Lula as its candidate, the PT proved to be doomed. Had Lula run, many, especially among the poor, would have forgiven the corruption that is largely taken for granted in Brazilian politics. Lula would certainly have made it to the second round and his chances would be much better than those of Haddad, who can’t capitalize on Lula’s personalist appeal, but has to shoulder the revulsion he inspires on the right and in much of the centre.

So President Bolsonaro it will likely be, but, if so, what will that mean, exactly?

Political scientists are notoriously bad at predicting the future, but a number of factors suggest that Brazil is unlikely to take a radical turn, even with Bolsonaro at its helm. More likely, the country will keep muddling through, down a mediocre path of slow and skewed modernization, with modest and inequitable growth, continuing social violence and environmental destruction, limited economic liberalization, deepening fiscal paralysis and continuous political bickering.

Brazil’s 1988 Constitution already made the country’s presidents largely hostage to a highly framented Congress, a weakness amplified by subsequent constitutional amendments. The power presidents have must be wrestled through the constant construction and reconstruction of coalitions with the plethora of parties that populate the two chambers of its Congress.

Bolsonaro’s party, the PSL, has four of the 81 seats in the Senate. It may end up with the largest deputation in the Chamber, but once deputies from parties with too few votes move to larger ones, it will still have at most 75 seats out of 513, and need to weave together coalitions of seven or more parties to pass any measure. Bolsonaro will find broad support for blunt anti-crime measures, regressive environmental policies, conservative social policies and perhaps some privatization. But he hasn’t demonstrated much ability or fondness for coalition-building and will quickly find out that, far from controlling them, he will be the instrument of these lobbies at least as much as they will be his.

The Brazilian judiciary has lost prestige in the eyes many Brazilians, but none of its independence and institutional power. The Lava Jato scandal may have hurt the PT the most, but as the party in power while hundreds of millions were being diverted, this should be expected. Politicians from all parties, and some of the country’s most prominent business people, however, are also in prison. And while they are currently despised by much of the left, a majority of current members of the Supreme Court were named by PT presidents and are unlikely to look kindly at attempts to limit their power or to challenge what remains a democratic and progressive constitution.

Weathering a military leader

Much has been made of Bolsonaro’s military past, of his glorification of the military regime and of its methods, of his commitment to bring generals into the cabinet and of his promise to use violence to put an end to the violence that plagues the country. Some retired military officers have expressed support and one of them stands as his running mate, but Bolsonaro is more at ease with the violent SWAT-type police units of Rio and São Paulo than with most of the well-educated and polished members of Brazil’s higher military ranks. The Brazilian military as an institution is certainly not welcoming the attention. It has been steadily constitutionalist since going back to the barracks, largely on its own it must be added, devoid of a political project — unlike during the dictatorship decades ago. It is also underfunded and worried about getting trapped in urban policing quagmires. Public security, moreover, is a jealously guarded state prerogative, which the federal government rarely challenges, except by invitation, and the federal coffers are in the red, mostly tied up with pensions, including military ones.

Bolsonaro will govern from the hard right, in sum, but he won’t have a free hand. He will have to bargain with a fractious Congress and deal with a strong judiciary, 27 state governments and quite a feisty media. Things could certainly go awry: major national crises, like the truckers’ strike that paralyzed the country last spring, or a new global financial crisis that some see looming, could open the door to bluntly repressive interventions, but it is difficult to fathom a Venezuela-like collapse. Brazil’s institutions, however unable to realize the country’s potential, look robust enough after three decades of consolidation to weather these shocks.

As to ripple effects in the region, or beyond, they are unlikely. Brazil remains the most insulated economy of the continent, its convulsions have little bearing on its neighbours and it is largely oblivious of them. Supportive winks could well come from Washington and Moscow, but the elites with whom Bolsonaro will be forced to come to terms with would not countenance a radical shift in the country’s reserved international posture.

Brazilians themselves, in other words, will alone pay the price of their choice. Sadly, the poor among them will pay more, beginning, most likely, with the young black men who die by the tens of thousands in the countries’ metropolis and who will now be hunted down by the police — as they already are — with the blessing of the president. Women seeking abortions, Indigenous peoples, LGBTQ, human rights and environmental activists can also expect a rough patch. But the dictatorship feared by the global commentariat looks unlikely to materialize.

[This post was first published on Open Canada, right before Bolsonaro's election.] 

Saturday, December 31, 2016

Overdoses are a problem for dealers too

[The little crocodile is not abandoning Latin America, but while home in Canada, it keeps an eye on local drug markets. Comments are most welcome.]

The overdose epidemic risks killing--literally--the customer base of drug dealers, and they have to know it.

Drug sellers have a vested interest in keeping their customers heavily dependent but also alive. Irresponsible legal prescriptions of opioids have enormously broadened their client base: when doctors end up refusing prescriptions as it becomes clear that their client's requests are driven by addiction, dependent users move to the black market. Hence the quick increase of recent years, which may get even quicker as legal prescriptions are likely to get reigned in given media attention and the public outcry that develops as a result of it.

Cheap, powerful and hard to detect synthetic opioids imported illegally from China make it easy for dealers to satisfy demand. With a high much stronger than heroin or good old oxycontin,  synthetic fentanyl and carfentanyl quickly hooks people, for whom heroin becomes , All this is obviously good for business. Concentration, however, is also a problem as it becomes extremely difficult to get a grip on the strength of particular doses, especially once opioids are mixed with other substances. There lies the root of the current crisis, which will have killed about 800 people in British Columbia alone in 2016.

At that speed, unless doctors keep feeding the addiction pipeline--which at last, they may stop doing, in the face of the disaster that they have wrought--many dealers will run out of clients in a few short years.

So, from their standpoint, what is to be done?

One solution would be to find a way to get a grip on the doses that they hand out. "Safe" products would quickly give their dealers a competitive edge. The technical requirements of doing so in an illegal environment, and the power of the products currently entering the market, however, make this unfeasible.

Another solution is to bet that the public health effort will be ramped up substantially, keeping users alive. Better still would be to piggy back on it, basically exploiting the availability of emergency services to ensure that the essentially unavoidable overdoses become less lethal, ideally not lethal at all. The world-famous Insite supervised injection site delivers just that, with no overdose death since it opened its doors in 2003. It can't keep up anymore with increased use, however, and emergency injection sites have been set up in tents right by the alleys where people procure and inject the drug. With more resources--and they should be coming soon--public policy would basically solve the dealers' problem...

In the meantime they appear to bet on the compromise solution that results from underfunded and desperate efforts of volunteers and overworked emergency workers, setting up shop right by both their customers and the people who can keep them alive: "Outside the tent, street-level dealers sell various drugs to dozens of people injecting in the alley. More than 200 people will access the tent before the last group is hustled out at 10 p.m."

Moral hazard, in sum, meets health hazard...

Now, normalizing overdoses cannot be an acceptable solution from a public health perspective. At the same time, framing Insite and the current desperate effort to keep thousands of dependent users alive as simply abetting--if not encouraging--heavy use and trafficking takes one down a narrow, cruel and ultimately ineffective policy path.

In other words the main implication of the argument just developed is that dealers have a vested interest in getting a grip on the epidemic and, consequently that they can be part of the solution.

Thursday, March 17, 2016

Brazil: Dilma's soft auto-coup

While staying as a figurehead, Brazil’s president has relinquished power and left the government in Lula’s hands.

Brazilian President Dilma Rousseff is handing over effective control of the government to her mentor and former president Luis Inácio Lula da Silva. While on Thursday she formally named him head of the government's non-military affairs (chefe da Casa Civil), it is clear to all that he is now in charge and has become de facto president of the country. Rousseff, who was re-elected barely 18 months ago, thus becomes a figurehead devoid of real power. Institutionally, this development makes short shrift of the Brazilian Constitution, putting supreme executive power in the hands of a man who holds no elected office whatsoever.

Four developments have produced this astonishing turn of events. The first is the utter dereliction of Rousseff's popularity and power. Since her election, and in fact since the large demonstrations of June 2013, she has been unable to effectively govern the country, her utter political weakness in the face of a divided and ever-restive Congress paralyzing the government.

Second, the country is going through a shattering and multi-dimensional crisis. The collapse of the commodity-driven boom of the first decade of the century has plunged Brazil into one of its worst economic crises since World War II, with GDP collapsing by almost 4 percent over the last two years and, over the last 12 months or so, unemployment doubling, the currency dropping by a third, and inflation closing in on 10 percent. A corruption scandal of pharaonic proportion is shaking the whole political class and especially the ruling Workers' Party (PT), with hundreds of millions of dollars diverted from the coffer of the state-controlled oil company, Petrobras. To top things off, years of neglect of mosquito control is now blowing back as massive epidemics of dengue, Chikungunya and Zika fever stretch health resources and confront large sectors of its population, mostly the poor, to difficult and sometimes tragic predicaments. The challenges, in other words, would be overwhelming, even for a strong president.

Third, Lula's involvement in the corruption scandal was about to have him arrested and formally accused. As a member of the cabinet, he now enjoys a degree of immunity through executive privilege, which implies that judicial procedure can only be engaged by the Supreme Federal Tribunal, and under very specific conditions. Recordings of conversations between Lula and Dilma herself, made public by the judge responsible for the corruption scandal, show quite clearly that this was a key reason for his nomination.

Fourth, many analysts had seen the growing reach of the investigation into the Petrobras scandal as a proof of institutional consolidation, primarily around an independent judiciary. However, the growing politicization of the process, already visible in the controlled leaks, strategic timeline of arrests, and showy style of operations—including handcuffs for portly sixtyish businessmen—reached symbolic heights with the early morning arraignment of Lula for a simple questioning, which he had previously acceded to voluntarily, and with the possibly illegal publication of the conversation between Lula and the President the day before his nomination. The legitimacy of the whole endeavour is jeopardized, and the image of the judiciary risks being sullied. In that context, "saving" Lula by giving him power could almost take an air of legitimacy.

Facing huge political challenges and increasingly isolated, even from her own party, Dilma Rousseff is now relinquishing power while preserving it for the PT or more precisely for Lula himself. Implicitly taking the blame for the current mess, she may also offer a relatively clean slate on which her de facto successor can build a support base in Congress and muddle through the last phase of the economic crisis, which should peter out by the end of the year.

All this is bad news. Lula's ability to regain governability will likely depend on the kind of deals that led to the current crisis and feed the cynicism of Brazilians towards their political system. None of the reasons for his return to power can be squared with the country's constitution. Rousseff's legitimate path would have been a formal resignation and her replacement by the vice-president, Michel Temer, but this would have meant handing out the PT's hard won prominence to a man of the Right, wholly steeped in the old clientelistic manners of Brazil's traditional elites. Now, Temer himself could be forced to resign as a result of shadowy electoral financing manoeuvres, and new elections may have to be called. None of these options offer much practical hope in the face of the country's challenges but at the very least, some institutional stability would have been preserved. Roussef decided otherwise and chose political expediency over "formal" democracy. As a result, formal institutions are losing ground and "the streets" are taking ever more central a role in the crisis.

(First published on

Thursday, February 4, 2016

Development experts' heads are stuck in the manufacturing sand

Try to forget industrialization: it's essentially over and it won't happen again. The challenge is to grow rich and not too unequal with service economies.

When you have time (it is 46 minutes-long), check this podcast from Brookings, which features one of their fellows, John Page, a former Chief Economist for Africa at the World Bank. Its hook is that about 85 million of China's "bottom-end" manufacturing jobs will have migrated away by 2030 and that Africa's challenge is to capture as many of those jobs as possible. The point is to plug a book by Brookings, UNU-WIDER and the African Development Bank called "Learning to Compete in Industry."

Now, in 2030, there will be 1.6 bn people in Africa, about half of whom will be older than 15 years old. Among the latter, assuming participation rates similar to todays (70-80%), the region's labour force will be about 600 million strong. This means that while 85 million jobs look like a lot, if Africa were to capture ALL OF THOSE JOBS--an extremely unlikely outcome--that would still represent only 13% of the region's labour force. Adding those jobs to the current paltry levels of industrial employment, in other words, would just not make African countries "successful industrializers." Most likely, in fact, these economies will morph—some already have—from mining and agricultural primary goods producers to service economies, without the historically "standard" industrial episode in the middle.

This study, in other words, like much of current development scholarship, is stuck with the assumption that development and industrialization are synonymous and that the first simply will not happen without the second.

Obviously, that assumption may be right, but if it is, Africa is doomed.  because the very evidence mentioned by promoters of industrialization makes it clear that industrialization on any significant scale will not happen in the region. At the very least, however, we should check, which we are not doing, in spite of all our ritual evocations of "evidence-based" research.

What we may find once we start looking may not be that depressing, by the way. Indeed, there is no theoretical reason why service economies can't become more productive. The most compelling explanation of growth today--endogenous growth--sees ideas as its core driver. Why should ideas only impact productivity in the manufacturing sector? Or, from a research perspective, why should we keep thinking of development as if it could only happen as it did in the past, both old, in the West and Japan, and recent, in China?

Oh, and by the way, the industrialization mirage is not just misleading for Africa, it is even more of an illusion for countries—hello Canada—that have long ago become service economies.

To repeat, the challenge is not to find a time machine to reach back to the 1950s (and call it a "revolution") when the path to industrialization crossed indeed manufacturing land, but to see how service economies can deliver reasonably equitable growth in developing countries.

Wednesday, February 3, 2016

Can Brazil's Olympics survive the Zika emergency?

Nearly overnight, the Zika virus has caught the world’s attention. Will Brazil be able to ease concerns before August?

Jean Daudelin

Three recent developments are changing the Zika crisis: global media awareness, new possible vectors, and doubts — at the epicentre of the crisis — about Brazil's capacity and honesty. Together, they threaten the upcoming Rio Olympics.

At the end of November 2015, I peddled a piece about the Zika/microcephaly crisis that was already severe in Recife, the large Northeastern Brazilian city where I am currently working. No one but this site,, would have it: not the Globe, not the Huffington Post, not Foreign Policy, no one else. Worse still, it took a few more weeks for the global media to catch up: the New York Times, measure of "all things fit to print," published its first piece on Dec. 29.

Today, Zika is front-page news every day the world over. This is mostly good as it keeps prodding governments and the increasingly nimble global infectious disease community. As usual, the danger is that, were the epidemic to be less serious than currently speculated, the overblown coverage could lead to public cynicism and, subsequently, less urgency from politicians, less money for research, and public nonchalance when a truly severe one hits: call this the "swine flu" scenario. Fortunately, public health organizations and experts have become very adept at balancing warnings with caveats. In the face of global infectious diseases, panic is not the default mode any more.

The second development is only bad, as researchers — still tentatively — point to new vectors for the disease. Until now, the Aedes family of mosquitos (aegypti and albopictus) were considered the only culprits, which is already scary given the global distribution of those bugs. Now, however, there is a growing worry that their Culex cousins, who reach farther North and South could also be infected and in turn infect the people they bite. Culex is the family of your "friendly" spring and summer mosquito, but also of the West Nile Virus vector. In addition to expanding the potential range of the infection, this would imply a significant increase in vulnerability as, unlike Aedes aegypti, which is still the main apparent culprit for Zika, many Culex mosquitoes are active in the evening and at night. Perhaps most worrying, there is growing evidence that Zika could be sexually transmitted, thus turning your sexual partners, just back from a trip in the South, into a potential vector even in the middle of Winter, and we don't know yet for how long.

There is no real flip side to the third development either, with growing doubts about Brazil's capacity to deal with the crisis and, most worryingly, to honestly tell the world how bad things are. In the last week or so, both Brazil's Health Minister and President Dilma Rousseff have said that the battle against the mosquito was being lost. Rousseff's declaration was framed as a call to arms, but without a single good news on the eradication front, and with Brazilian microcephaly statistics showing growth rates of five to seven percent per week in suspected cases, one is compelled to take her statement literally.

Worse still, the states of São Paulo and Rio, which are crucial to the national effort, appear to be less than candid about the local scale of the problem. El País revealed recently that the government of São Paulo had lied about the number of microcephaly cases on its territory, not reporting 200 cases and thus conveying the impression that the epidemic was largely confined to the poor Northeast of the country. The fact that Rio is currently refusing to test Olympic waterways for viral infection, while not directly Zika-related, nonetheless conveys a worrying lack of transparency about health risks.

Behind Rio's reluctance, obviously, lies the nightmarish scenarios of an Olympic Games participation disaster or of an unprecedented cancellation of the event. Brazil is clearly lobbying hard to save the Games, but its very efforts reinforce global skepticism: as reported by the New York Times, when the WHO declared Zika a global health emergency earlier this week on Feb. 1 but refused to follow the US Centre for Disease Control and recommend that pregnant women avoid countries where Zika is endemic, "some global health experts contended the W.H.O.’s decision was more about politics than medicine."

In the end, full transparency or deceptive manoeuvring of that sort may not matter much: given the massive press coverage Zika currently receives, the tremendous platform the Olympics would provide for the diffusion of the virus, and the increasingly clear inability of Brazilian authorities to get a grip on the epidemic, many countries may follow New Zealand's lead and, at the very least, support those athletes who decide to stay home. Now, this only makes things worse: a public relations disaster for Brazil, it will increasingly suck up government attention and efforts. All-out cancellation would probably be better: with Olympic distraction out of the picture, all energies could focus on the mundane jobs of eradication, vaccine development, and care for the poor kids who end up crippled by the disease.

[This post was first published by]

Thursday, December 3, 2015

Zika virus: trying to make sense of what we have

A friend writes the following: "the public health info released by the Brazilian government on zika and microcephaly is actually pretty good. [Still t]here is a fundamental methodological problem with all of this… zika may not be the source of the issue. The rise in microcephaly is correlated with a spike in zika, but it may not be the factor causing the condition [or it may be a] catalyst of some underlying aetiology."

He is certainly right on the mechanism: nobody knows yet. Maybe something else is causing the surge in microcephalia cases, which is the only really big news here: from 147 to 1248, for Brazil, and from 12 to 646, for Pernambuco, as of November 28 and 30). [References here and here].

For the rest, what we have is less compelling: in an interview, the head of the Dengue and Arbovirus society spoke of experimental results showing Zika to damage the brain of mice, but I have not seen—and I have looked for it—the  research he was referring to. For its part, the government’s acknowledgement of a link is based on the presence of the Zica virus in the blood and tissue of a single new born baby who died in Ceará. The virus was also found in the amniotic liquid of pregnant women in Paraiba (Pernambuco's northern neighbour state).

The broader nervousness is based on a significant number of interviews of mothers of newborns with microcephalia, a large proportion of whom reported suffering from Zika-like symptoms (which could have been dengue) during the first months of pregnancy, and on a time correlation: the surge in mosquito infections, as proxied by diagnosed dengue cases, began 10 months ago and went on for 20 weeks (week 5 to 25 of 2015, see the graph below), which corresponds to the beginning of the surge in affected newborns’ beginning on week 40-41 (beginning of October) and quickly increasing after that, which is more or less what appears to be happening. Nobody knows precisely if, for how long, and where Zika had been transmitted to people by aedes aegypti, but if the hypothesis is right, the next 15 weeks will tell. Moreover, many of the zika cases identified over the last year may have been misdiagnosed as dengue. Carlos Brito, a member of the Health Ministry's Arbovirus technical committee considers for instance that "of the dengue cases identified in the State (of Pernambuco), 80% were, in fact, zika cases."

Now, 80% may look like a lot, so let's do the math. As of November 16, according to the Health Ministry, there had been 83,601 "probable cases of dengue" in Pernambuco.

Most of the cases of dengue being asymptomatic (in a proportion of between 1.8:1 13:1), this must be considered an absolute floor. But to play "safe," let's stay with the cases identified. Zika cases misdiagnosed as dengue would thus number around 67,000 for the state or about 0.8% of the its population.  Assuming that Pernambuco's share of birth is proportional to its share of Brazil's population (4%), it would have had about 120,000 births in 2014 (Brazil's total was about 3 million, or 1.5% of its population). Using this as a proxy for the number of pregnancies, and factoring the fact that the peak infection period is about four months-long, this would imply a floor of about 350 pregnant mothers infected by the Zika virus in Pernambuco over the course of 2015. As noted above, there are already more than 600 cases of microcephalia this year in the state…

In other words: if there is indeed a causal link between zika and microcephalia, the number of zika infections that should be used as a basis of impact assessment has to be much larger than even 80% of the suspected number of dengue cases. In addition, the calculations made above and leading to the projected 350 cases assumes that 100% of pregnant mothers transmit the virus, and that 100% of the foetuses are affected by it. Anything lower than that would massively increase the hypothetical number of infections.

Zika virus: the surreal epidemic that has Brazilian doctors tell women not to get pregnant

A little-known virus called Zika has led, on November 29, to the declaration of a state of emergency in Pernambuco, Brazil's fourth most populous state. An unusually large number of suspected cases of microcephalia  among newborns has been detected here over the last few months. The babies affected have an abnormally small cranium, a condition that is  often associated with intellectual and developmental disabilities. This week-end, Brazil's health ministry has formally established a link between the presence of the virus and that condition, which however may also have a variety of other causes, from syphillis to malnutrition. Still, the number of suspected cases of microcephalia identified up to now this year (more than 1,000 in the country as a whole as of November 30, and around 500 in Pernambuco alone) significantly exceed the normal incidence of cases in Brazil, which have ranged between 139 and 175 per year since 2010. In addition, a small number of infected people have died in recent days, including a few adults, though it is unclear if the virus itself was the cause of death, if it interacted with another disease, or if the person died of an unrelated condition.

The virus is transmitted by a mosquito, aedes aegypti which is also a vector for two increasingly common diseases in Brazil: Chikungunya and especially dengue fever, which has reached epidemic proportion in the country.

Symptoms of Zika are similar to those of dengue fever: high temperature, headaches, joint and muscular pains as well as spots on the skin. They disappear after a few days. A significant proportion of people infected by dengue fever, however, are asymptomatic, and the same could be true of Zika. Finally, many dengue fever diagnoses have been based on clinical assessments instead of blood tests and an unknown proportion of presumed dengue patients or asymptomatic dengue carrier may thus have been in fact infected by the Zika virus.

Specialists and government officials currently think that foetal infection leading to microcephaly occurs when mothers are inoculated with the viruses in the first three months of pregnancy, in a period crucial for the development of the foetal brain and before the placental barrier is fully formed.

The possibility that Zika is already widespread or that it could quickly expand to the whole country is based on the large number number of diagnosed cases of dengue, which increased between 2014 and 2015 from 555,000 to 1.5 million (as of November 16). Such a sharp increase clearly indicates that efforts to get rid of the mosquito are unsuccessful. The prospect that, by infecting pregnant women, aedes aegypti could now produce a large number of cases of microcephaly magnifies the severity of the health challenge that dengue and Chikungunya fevers already represents.

The state of emergency has been declared in Pernambuco, which enables the state government to draw from special federal funds may be extended to other states in the coming days. The federal government has set up an inter-ministerial working group to tackle the crisis and is mobilizing research capacities and seeking international support to better understand what remains an extremely poorly known virus (CDC and WHO missions will come to Brazil later this week to discuss the crisis). The effort at this point focuses on the elimination of the mosquito. In addition, the government encourages pregnant women to wear long sleeves and pants, to close windows and doors and to use insect repellent.

The spectre of large-scale microcephaly occurence is obviously the dominant preoccupation of the government and health specialists. This has led a specialist to make  a most extraordinary health recommendation: in an interview posted last week-end on the website of Veja, Brazil's most widely read weekly, Artur Timerman, a virologist and President of the Brazilian Society for Dengue and Arbovirus (mosquito-transmitted), recommended that Brazilian women postpone pregnancies until the risks involved are assessed, which may take months. When asked by the female interviewer what women who were already pregnant should do, he fell back to dress codes and insect repellent recommendations, though noting that the efficacy of the latter was limited.

The elephant in the room is the issue of abortion, which is illegal in Brazil except for cases of rape or danger to the life of the mother. The question is extremely delicate in a country that is much more conservative, especially on that issue, than its international image would suggest. Given that the surge in dengue fever typically takes place between the end of February and June (week 7-23 of each year), most foetuses affected this year would be due between December and the end of March. This would imply impossible, extremely late or very risky pregnancy interruptions for this cycle, but a significant incidence of microcephaly in coming months would precipitate a huge debate in 2016. The tenor of that debate would be unprecedented, and not just for Brazil.

As the world's governments are meeting in Paris to talk about climate change and what it could mean for the future, a very ugly side of that future may already be showing at the door. A situation is developing in the planet's fifth largest country that may force its society to consider "postponing" or interrupting pregnancies on a massive scale to avoid the birth of a possibly very large number of severely disabled newborns. The fact that the vector of that potential epidemic is an insect that has adapted perfectly to the messy and increasingly warm urban context in which much of the population of the world already lives, and the fact that this insect is already showing resistance to common insecticides just boggles the mind. With Aedes egypti already roaming a very broad strip of the world's surface, and with the Zika virus quickly spreading beyond Brazil, expect this little post not to be the last you read on this topic.

[A slightly different version of this post was first published on]