Photo Jonathan Blair

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]

The cat is out of the bag in Brazil as the PT itself throws Dilma under the bus

It looks like it is the PT itself that has decided to dump Dilma Rousseff from the presidency.
The presidency had asked PT members on the Ethics Council of the Chamber of Deputies to support the Eduardo Cunha, the President of Chamber. The man is completely rotten and everybody knows it BUT he had the power to accept or refuse a formal request to launch the impeachment process. They voted against Cunha and, predictably, the latter immediately answered by launching the process.
More discussions and negotiations are in the works, but Rousseff's position is much weaker as a result.
What could explain the party's attitude? I see two things, that may overlap.
1) The country is going through a massive multidimensional crisis. The economic situation is dire (growth for 2015: -3%; inflation >10%; unemployment bordering 10%, double of last year); a national health emergency could soon develop around the Zika virus; and the Petrobras corruption scandal is reaching ever deeper into the political establishment. Except for the latter--which is getting ever closer to Lula himself--leaving someone else to deal with the mess would increase the chances of a victory in the 2018 presidential crisis, where Lula, if he is still standing, would have the best chance of winning among all possible PT candidates.
2) Many in the party's base--the so-called social movements--are up in arms against the current Finance Minister's austerity package, and deeply critical of Dilma Rousseff's giving cover to it.
The first is most likely, but don’t underestimate the second, as Lula could himself be thrown under the bus by his various close friends who are currently negotiating plea bargaining deals with federal prosecutors. If he falls, it will be civil war inside the party, and looking good right now may pay off. 
For the details (worth translating), see this Folha de São Paulo article and, for background and a very careful presentation of the next steps, this, from the Financial Times.

Tuesday, November 24, 2015

Beyond tragedy and invidious chest-beating

Beyond tragedy and invidious chest-beating

How great we Canadians are compared to those pathetic French, who now pay for their long history of "rejecting the other"...
In the Globe and Mail, Erna Paris points to the disproportional presence of Muslims in French prisons and gloats that Canada doesn’t have the same problem.
She should consider the possibility that  poor social integration in some countries may not regard mainly immigrants. In 2013, according to Canada’s correctional investigator, "aboriginal people represented a staggering 23% of federal inmates yet comprise 4.3% of the total Canadian population. And one-in-three women under federal sentence are Aboriginal.” The latter roughly equals the scale of over-representation that she rightfully denounces in the case of France. Add provincial prisons to the picture and there is little reason to boast about our history.
Writing from a country where "no Jewish refugees were too many" (to paraphrase the title of Irving Abela's and Harry Troper's history of Canada's policy towards Jewish refugees during World War II) Ms Paris should also perhaps thread more carefully when assessing the record of France during the Holocaust, which is more ambiguous than she suggests.
Her basic argument is defensible: citizenship matters, equality matters, and denial of either could well feed violence. And France indeed offers cautionary tales... along with Canada, the United States, and so on. Why, in the midst of the tragedy that strikes France, she felt the need to mar that argument with invidious chest-beating is beyond me.
Now, that argument may well be totally wrong too. Perhaps the very real social exclusion which is epitomized by prison statistics but associated with very distinct outcomes here and in France should make us consider the possibility that the heart of the problem, as the terrorist themselves keep saying, is islamic fundamentalism, not social exclusion.
French historian and philosopher Marcel Gauchet, in a recent interview with Le Monde, makes just that point, and in a way that is completely devoid of islamophobia. His explanation, in fact, harks back to the argument he first laid out in The Disenchantment of the World, which focused on Christianity.

Here is the opening summary of the full article:

Le fondamentalisme islamique est le signe paradoxal de la sortie du religieux 
Historien de la démocratie, Marcel Gauchet explique que l'origine de la violence des terroristes n'est pas -sociale ou économique, mais bien religieuse. Comment penser les attaques du 13 novembre et ce déferlement de haine ? Cette violence terroriste nous est impensable parce qu'elle n'entre pas dans nos grilles de lecture habituelles. Nous savons que c'est au nom de l'islamisme que les tueurs agissent, mais notre idée de la religion est tellement éloignée de pareille conduite que nous ne prenons pas cette motivation au sérieux. Nous allons tout de suite chercher des causes économiques et sociales. Or celles-ci jouent tout au plus un rôle de déclencheur. C'est bien à un phénomène religieux que nous avons affaire. Tant que nous ne regarderons pas ce fait en face, nous ne comprendrons pas ce qui nous arrive. Il nous demande de reconsidérer complètement ce que nous mettons sous le mot de religion et ce que représente le fondamentalisme religieux, en l'occurrence le fondamentalisme islamique. Car, si le fondamentalisme touche toutes les traditions religieuses, il y a une forte spécificité et une virulence particulière du fondamentalisme islamique. Si le phénomène nous échappe, à nous Européens d'aujourd'hui, c'est que nous sommes sortis de cette religiosité fondamentale. Il nous faut en retrouver le sens.

Friday, November 20, 2015

Terrorism: the need for intelligent intelligence, not just more of it

To those who may think that even C-51 is not enough and that Canada should put even more resources into controlling its population, the lesson from France may well be that, at some point, expanding the reach of surveillance becomes counterproductive, and that point may already have been reached in France. 

From The Economist:

"France has robust judicial and security laws that give investigators fairly sweeping powers to monitor, detain and interrogate suspects. In the past these have been envied by their counterparts working in countries with stricter constraints. Yet the French now seem to be overwhelmed by the sheer numbers involved. Manuel Valls, the prime minister, acknowledged this week that fully 10,500 people in France are on a file known as “Fiche S”, meaning that they are suspected of being radicalized.

Assessed on a scale, they range from those who have simply looked at jihadist websites or met radicals outside mosques, to those considered highly dangerous. Only a fraction can be monitored closely, because it requires 20 agents to follow one suspect round the clock. As François Heisbourg, of the Foundation for Strategic Research in Paris, points out, it is in many ways good news that people like Amimour and Mostefai were known to the intelligence services. The trouble seems to lie with the analysis of the risk they posed, and the follow-up.”

Why must so much media coverage about drugs be over the top...

Vox's German Lopez is my favourite reporter on drug issues. Clear, measured, always the right table or graph. Great. Well, most times.

Indeed, I think he blew his last one, on Captagon, ISIS' amphetamine, which was clearly meant to tone done hyperbole and introduce a measure of sanity in the discussion. And indeed, the press coverage of that issue has been very much over the top.

Unfortunately, Lopez swallows whole the latest piece of moral panic coming from the very prohibitionist UNODC and abetted by Time magazine:

"A pill that costs pennies to produce in Lebanon retails for up to $20 a pop in Saudi Arabia, where some 55 million Captagon tablets are seized a year — a number that even Saudi officials admit amounts to only 10% of the overall total that actually makes it into the kingdom, according to the UNODC World Drug Report and a not-yet-published E.U. assessment of drug trafficking in the Middle East."

So, about 550 million tablets make it to the kingdom and 10% are seized, which leaves about 500 million pills on the market. At $20 a pop, we are talking of about $10bn worth of amphetamines...

Now, Saudi Arabia is a country that, in 2013 imported $14bn worth of automobiles. In other words, this article calling for skepticisms towards media reports is telling us that the market for amphetamines is two-third as large as the car market and that every one of the country's 28 million people (men, women, babies, kids and retirees) spends, on average and every year, $400.00 on that particular type of drugs. And remember, this is what "even Saudi officials admit," so the careful reader is to understand that these numbers are low estimates.

Sorry guys, but who is high on what here?

Tuesday, August 11, 2015

Venezuela’s unlikely rescuers? The country is about to explode. An Obama-Castro team might be best placed to diffuse the crisis

Given the scale of its problems and the "quality" of its government, Venezuela could have collapsed into a civil war years ago. It did not. The restraint shown by the opposition and especially the fact that most weapons were on the Chavista side kept the lid on the pot.

The crisis is deeper than ever, with deadly department stores' looting now joining crippling shortages of basic necessities, increasing unemployment, the world's highest inflation rate, stratospheric levels of corruption, disintegrating public services, crumbing infrastructure and terrifying levels of criminal violence.

At the same time, the government's quasi-monopoly of violence is breaking down. President Nicolás Maduro's control over the military and party militias has always been partial with National Assembly President Diosdado Cabello, in particular, keeping a much-purged and corrupt military for himself. There are rumbles, however, both on the party militia side and within the military. Without surprise, the regimes' much used but long unruly street gangs' loyalty is less assured than ever. When it comes, in other words, the violence will start from within Chavista ranks.

Parliamentary elections are approaching and the chances of a government victory in a clean process are dismal. Maduro is a dull-witted bully. He has never been popular and, for obvious reasons, he is now less than ever. While the opposition brings back his asinine declarations about Chavez' reincarnation into a little talking bird, Maduro's putting his wife at the head of the government party's list further reveals the depth of his ineptitude. Arguably, he doesn't have much choice, Chavez and then himself having made sure no one would emerge from the party's ranks to challenge their authority, but Cilia Flores —The Mrs— has to be the worst option.

To make things worse, the government can't use populist spending to secure the masses that have traditionally supported it. The forced sale of electronics at government-set prices, which the government has used before, was a one-shot wonder but it has understandably discouraged retailers from importing any more. With oil production declining, and international prices remaining low, the "system" is now simply running out of fuel. Once the Chavista crust has taken its share of what's left, almost nothing remains to buy votes. In other words, the electoral fraud will need to be even more blunt than the last time and nobody will be on site to defend the government: even the Carter Center, which shamefully joined UNASUL and the OAS in 2015 to give a legitimacy it did not deserve to the elections that kept Maduro in power, is packing and leaving the country—officially because of the cost of operating at the surreal official exchange rate. In spite of its help the last time, the government has pre-emptively dismissed the OAS—although it is now led by a progressive Uruguayan diplomat—as an agent of U.S. imperialism and no other regional organization could offer at once a modicum of global legitimacy and guaranteed backing. Given that the Chavista system depends entirely on the money it extracts from the state-owned oil company PDVSA's coffers, it can't abandon its lifeline and, unavoidably, "authorities" will do whatever it takes to ensure that the opposition loses the election.

Believe it or not, however, the problem is much deeper than that. The shrinking pie and apparently limitless appetite of the Chavista leadership are turning the sharks against one another. Maduro's abysmal incompetence and his unpopularity make him an appealing target for a military coup that Cabello and his friends could present as the beginning of a way out. Maduro's family network and retinue, however, are unlikely to leave the scene quietly. Division at the top would reverberate all though the party's shaky apparatus and its already mutinous informal tentacles. And all those people have guns.

Who could do something? Who could convene the parties, including the opposition, to some kind of national dialogue that would defuse the current crisis or help find a way out after violence explodes? Who could offer a comfy exile to Maduro and Cabellos, taking them out of the game? Well, at this point and unfortunately, the picture is bleak.

As mentioned, and even though it covered the regime's fraud in the last election, the OAS has already been dismissed. UN intervention would be met by all South American countries as an affront to national sovereignty and to the region's much asserted ability to deal with its own problems on its own—pure grandstanding in this case, but still enough to keep it out. The regime's allies in UNASUL—Bolivia, Ecuador and, for now at least, Argentina—ensure in turn that the organization won't be trusted by the opposition.

The real bulwark could have been the region's big players, Colombia, Argentina and especially Brazil. Given the two countries' love-hate relationship, any Colombian attempt to interfere would quickly be seized by the regime as an opportunity to drum up nationalist sentiments, which would obviously serve no useful purpose whatsoever. Decades of silliness have disqualified Argentina as a serious international or regional actor. Brazil could have been the exception and while in power, Lula had used his immense regional legitimacy to effectively control Chavez and keep tensions down. Lula is gone, however, and with his successor and party eye-deep in corruption scandals, the government has turned completely inward. Brazil's refusal to push earlier for reform and reconciliation, as well as the prominence within the foreign Ministry of a PT-pushed nationalist and "sovereigntist" phalanx, moreover, have no doubt burned its long-respected diplomats in the eyes of Venezuela's opposition.

Who is left? Oddly enough, what would perhaps work best would be some kind of joint U.S.-Cuba initiative. Obama is now undoubtedly the global figure that enjoys the most legitimacy and he is very popular in Latin America. The opposition would trust him. The Castro brothers may be on their way out, but the strong presence of their intelligence and military services in the Venezuelan state apparatus and their deep links with all sides in the Chavista establishment gives them more leverage on that unruly crew than anyone else.

The idea may look odd, but think about it: one more feather on Obama’s cap, and a decent exit from the international scene for the Castros.

[First published as] 

Friday, August 7, 2015

Brazil: The Crash of the Chicken

Cynics have long described Brazil's development path as "the flight of the chicken:" brief spurts of growth, sometimes spectacular, followed by more or less brutal declines. After a tad more than a decade of expansion, the country is now going through one of those periodic crashes. And this one is ugly, perhaps because this time the chicken was flying really high, seemingly dreaming that, with all this talk of BRICS and emerging power, it was a chicken no more.

Analysts are predicting between two and four years of recession while inflation has reached its highest level in more than 10 years. Tax revenues are down (minus US$37bn projected for 2015), June's "primary" deficit—excluding interest payments—is larger than the worst predictions of analysts while the overall deficit of the public sector borders 7 percent of the GDP. The Real is down 40 percent since June 2014 and the index of São Paulo's stock exchange—the largest in Latin America—has dropped 20 percent in dollar terms since January 1. Exports were down in 2014, especially for manufactured goods (minus 14 percent) and the country saw its first trade deficit in years. The current account shortfall, at US$93bn, reached 4.3 percent of GDP last year, the largest since 2001 and interest-rates stand at a world's "best" 14 percent. The country has lost more than 300,000 jobs in the first three months of 2015, to the point where the absolute size of the formal labour market has shrunk for the first time in years.

Help won't be coming from the government, which is instead ushering in brutal budget cuts that affect all programs, including health and education, while public investment, already insufficient, has dropped 37 percent in the first five months of 2015 (ECLAC). Understandably, given high interest rates and the general uncertainty, the private sector is wary of jumping in and foreign direct investment flows for the year are now lower than the current account deficit. No wonder Brazil's credit rating could soon fall back to junk status.

To make things worse, President Dilma Rousseff's popularity, at between 7 and 10 percent, is among the lowest ever recorded by a chief executive since the end of the military regime. Congress is as dysfunctional as ever, with the Presidents of both the Senate and the Chamber of deputies under investigation for corruption. And yet, to get the support that she needs to govern, Rousseff's team is about to "give" the Congress' most influential members control over the hiring of hundreds of employees in various state dependencies.

Petrobras, the country's largest company—still de facto under government control—and Brazil's world-class engineering firms are at the centre of a corruption scandal involving the governing Workers Party (PT) and its allies, and reaching back to the golden age of Luiz Inácio Lula da Silva's two presidential mandates. The sums involved boggle the mind: Odebrecht, the country's dominant engineering firm and one of the world's largest, is accused of having transferred R$1bn (US$350m) to secret bank accounts in foreign countries, many of them held by government and party officials. The Workers' Party former treasurer, João Vaccari Neto, is accused of having received R$500m (US$150m) for the party. Renato Duque, an upper-middle level Petrobras official named by the PT and responsible for getting the party a share of over-billed contracts, had 20 million Euros in Switzerland and Monaco bank accounts. In a country where barely half the population lives on more than two minimum salaries (R$1600 per month or less than US$500 at the current exchange rate), this level of corruption, for a government controlled by one of the most admired "progressive" parties in recent history, is quickly destroying the long held assumption that the PT was different from its largely discredited competitors.

Any light at the end of the tunnel?

Well, maybe yes, but mostly no. The flip side of the corruption scandal is that Brazil's justice system is strong and doing its job, which is cause for optimism. The problem is, judges and police officers can't run finance ministries, design infrastructure programs, reform education or implement social policy. A sizable part of the massive resources generated over the last decade of growth were captured by the state and invested in infrastructure, education and security.

After the World Cup's orgy of white elephants (a whole slew of high-tech stadiums with few ripple effects and no hope of profitability), brutally over-budget energy projects and through the ever-expanding corruption scandals, it is becoming clear that such spending was highly inefficient and that the machinery designed to implement state programs remains creaky and, above all, leaky. Now that resources are drying up and the need for efficiency increases, the lack of a serious re-engineering of the state represents a massive obstacle for any attempt to relaunch the country on a sustainable growth path.

Given its immense resources and capabilities, Brazil is not inescapably doomed to "chicken-dom." In recent years, however, the country has been flying high on strong prices for the primary goods that remain its bread and butter, while leaving hard choices—on pensions, education, trade liberalization, taxation, public sector reform—for another day. That day is still not on the horizon. With a political class keener on pilfering public funds than on tackling the county's structural challenges, Brazil should be stuck on the farmyard—or pretty close to it—for a while still.

I am currently a visiting researcher at the Núcleo de Estudios de Política Comparada e Relações Internacionais – NEPI, Federal University of Pernambuco, Brazil.


Monday, April 13, 2015

Harper in Panama: wrapping up

Overall, Steven Harper's Summit performance was eminently sensible. On Cuba, when talking about the need for a new approach that would engage Havana and avoid isolating Cuba, he mostly had the US in mind. Still, it could mean that Canada may not oppose the full reintegration of Cuba into inter-American institutions, in particular full OAS membership. That would be quite a change or hearth and it would imply that Ottawa would basically decide to ignore the Inter-American Democratic Charter, which makes it very clear that respect for human rights, periodic, free and fair elections as well as freedom of the press are necessary conditions for participation in regional institutions.

Now, in the face of a clear regional consensus on "engagement," or more precisely on an unconditional re-integration of Cuba in the system, a consensus that the US now appears willing to join, it would have made no sense for Canada to take a rigid stance. Keeping a hard line, aside from having little or no impact on Cuba, would also entail a degree of diplomatic risk, as Toronto prepares to host the region for the Pan-American Games, this coming August. Given the tone of Venezuela's Maduro, Ecuador's Correa and even Raul Castro at the Summit, the possibility of a boycott could very well have been raised.

On Cuba, moreover, Harper made it very clear that while Canada would be keen to build on what is already a significant relationship, especially around trade and tourism, strong concerns remained regarding human rights violations and the absence of a "democratic space" in the country. In other words, the PM will continue to call a cat a cat, unlike his fellow heads-of-state, who have decided to give Cuba, and obviously also Venezuela, a free pass on those issues.

It is tempting to see primarily economic motivations behind Harper's move, but that would be a mistake. Cuba is a small ($68bn), dysfunctional, poorly governed and vulnerable economy (because of its dependence on imported oil and gas, now provided at a discount by shaky Venezuela). On one side, this obviously implies that growth prospects are excellent: as my Carleton colleague Dane Rowlands put it, you don't get Chinese stratospheric growth rates without a disastrous Great Leap Forward and decades of economic repression and mismanagement. A case in point would be the island's agricultural sector, whose stunning under-development explains why Cuba, with plenty of arable land, is nonetheless a huge net food importer. On the other hand, it is far from clear that the current leadership is ready to make the kind of concessions, on secure property rights for the private sector in particular, that were central to China's remarkable bout of growth. In other words, while there is money to be made here and there, Cuba's importance for Canada will remain marginal. Now, and to insist, with a share of about 1/10th of 1% of Canada's trade, the potential for progress is huge.

Finally, as to Harper's announcements for the region as a whole, the government basically dug up everything it could, from its files including various programs worth about $40m that have been under way for a year, and another one that will be launched in 2016. Some of the initiatives are very interesting, e.g. on security, policing and justice for Central America and the Caribbean, but total commitments at about $200m over three, four or five years (depending on the program), while not negligible, are certainly no sign of a particularly strong new engagement when you consider that Canada's ODA envelope is worth more than $4.5bn...

Canada’s “War on Contraband Tobacco”

The security implications of contraband tobacco and the consequences of the changes to Canada’s Criminal Code introduced by Bill S-16.[1]

Contraband products represent about 15% of Canada’s tobacco market and hundreds of millions of dollars in illicit revenue, lost legal earnings and lost taxes. Existing measures have contained the potential security dangers that derive from contraband tobacco, and have kept smoking rates in Ontario and Quebec, where much of the illicit products are consumed, in tune with the declining trend in the rest of the country. In other words, things are not great, but they may well be as good as can be. As the saying goes, “if it ain’t broke, don’t fix it.”

Well, the Harper government appears keen on doing just that.

The measures contemplated by Bill S-16 flow directly from the kind of thinking that led to the disastrous War on Drugs: punish them all, from the smallest violator to the global drug kingpin. As you may know, the results have not been great, especially for impoverished users everywhere and especially for impoverished people in producing and transit countries. Now that a growing movement towards softening drug laws is developing, not just among potheads and academics but also among the American, Canadian and European public, as well as the US’ and Latin America’s political establishment, Canada’s government under Stephen Harper is moving backward with no solid evidence to support its stand. Following a hardening of the regime against drugs with Bill C-10, Bill S-16 now completes the turn of this country’s crime policy towards a hard line on law and order, when what evidence we have points exactly in the opposite direction: crime is declining.

1- Diagnosis

In theory, contraband tobacco could have significant security implications. We have identified six channels through which it may affect Canada’s public and national security.

1) The protection of the production, smuggling and sale of contraband tobacco products and the enforcement of the many contracts involved cannot rely on the law enforcement and judicial institutions that guarantee a degree of security to normal economic activities. Protection and contract enforcement must instead rely on informal mechanisms and ultimately on the use or threat of violence.

2) The smuggling of illegal tobacco into Canada, from the United States, Eastern Europe or China, involves a whole chain of people and organizations, which may be best thought of as a pipeline. That pipeline can be used to transport tobacco, but also other goods, like weapons, drugs and other controlled substances, as well as illegal migrants.

3) Assessing the value of illicit activities is a hazardous entreprise. Nonetheless, on the basis of what information is available, my team has calculated that the gross revenue generated in Canada by illicit tobacco could represent as much as $350-400 million, with perhaps $75-80 million in profit. Part of this money needs to be reinvested and other illegal activities represent an appealing option, as money laundering through important investments into the legal economy could be detected by law enforcement.

4) Some of the profits from illicit tobacco sales could be diverted to the financing of terrorist organizations.

5) A significant proportion of the smuggling, production and sales of contraband tobacco takes place on First Nations Reserves where these activities, though not their criminal ripple effects, enjoy broad legitimacy. Aggressive enforcement of the law risks provoking confrontations and effective loss of control by government authorities over these territories.

6) Much of the traffic in illicit tobacco takes place over and around the Canada-US border, particularly along the so-called 401 corridor, between Brantford, East of Hamilton, and Montreal. US authorities perceptions of the risks involved for their country’s security can lead to an intensification of border controls, with a negative effect on the flow of people and merchandise through the border, on which Canada depends more than the United States.

We found evidence suggesting that all of those channels except the one regarding terrorism apply here. However, we found the scale of the problem not to be very significant.

Violence related to collateral crime directly linked to contraband tobacco (protection, contract enforcement) has been limited.

We also found limited evidence of “mixed smuggling” or of significant involvement of large criminal organizations, at least since September 2001.

As mentioned, we found no evidence of linkages between contraband tobacco and the financing of terrorist organizations.

Finally, while some US local authorities and senior US public officials have argued that drug trafficking on a large scale is taking place along contraband tobacco in Mohawk reserves around Cornwall, we found little credible evidence that this was the case. Moreover, general risk assessments done by the US government do not consider this area a major source of insecurity.

In other words, the current regime appears to have effectively contained most of the potential security dangers related to contraband tobacco.

2- Implications of S-16

The proposed amendment to the Criminal Code involves the introduction of compulsory sentences for repeat violations of the prohibition of the sale, transport, delivery, distribution or possession for the purpose of sale of illicit tobacco products. As described in the proposed amendment, the minimum sentences (3 months, 6 months, 1 year and 2 years minus one day) would apply in succession from the second infraction involving 10,000 cigarettes or more. This amount corresponds to 50 of the 200 cigarette bags that represent much of the trade, or a single typical case of such bags. Several such cases can fit in the trunk or back seat of a typical passenger car.

It is not clear that the imposition of such minimum sentences would lower the overall level of insecurity stemming from illicit tobacco, for four main reasons.

1) Reducing the differential between the sentences imposed on tobacco and on other illegal goods increases the incentives to use the smuggling  “pipeline” for other things. As things stands, the choice is between something that pays handsomely and involves mild sanctions (tobacco), and a number of other things that might pay much more but also involve severe sanctions, especially given the changes introduced recently to the Criminal Code for drug offenses (Bill C10). In our view, this is possibly what explained the low level of violence and “mixed smuggling” and the limited use of the “pipeline” for other “goods.” Under the new provisions, the relative appeal of higher value smuggling is likely to increase.

The other risks of the changes derive from the fact that, if enforced, the law would mostly affect the First Nations communities of the 401 corridor where much of the contraband tobacco industry is concentrated. That enforcement will be seen as a direct affront because, to repeat, producing, transporting and selling any type of tobacco or tobacco products without charging taxes is broadly considered as legitimate in those communities.

2) Most of the people likely to be arrested under the new rules are young men, many of them aboriginal, further contributing to the over-representation of these demographics in Canada’s prisons.

3) Controlling alternative uses of the pipeline for drugs, weapons or people is likely to become much more difficult to the extent that law enforcement will not enjoy the goodwill of the community, something it currently has. The position of the Mohawk police, in particular, will become extremely uncomfortable.

4) Direct confrontation with the communities cannot be excluded, in which case effective control of a strategic border area will be severely complicated and could be compromised.

3 – Conclusion

Dialogue with the Mohawk communities about the fuller legalization of First Nations tobacco production and trade, shared taxation and economic development in and around the reserves, along with the kind of careful enforcement of the law that currently prevails, represent a much better path to controlling the damages of contraband tobacco than hardening sanctions against small-time smugglers.

Jean Daudelin

[1] This commentary expands on my background notes for a testimony on Bill S-16 before the Senate Committee on Legal and Constitutional Affairs, in Ottawa on May 8, 2013, which was based on a study commissioned by the Macdonald-Laurier Institute that I have done with Stephanie Soiffer and Jeff Willows, two graduate students from NPSIA. “Border Integrity, Illicit Tobacco and Canada’s Security,” Ottawa, Macdonald-Laurier Institute, National Security Strategy for Canada Series #4. March 2013, 41p.

Thursday, April 9, 2015

“The Handshake Summit” and the breakdown of the Americas’ democratic rights regime

In Panama this week, Raul Castro and Barack Obama will meet and shake hands. Their symbolic encounter will add a superfluous nail on the rotting coffin of the Cold War. This pointless gesture will likely be the climax of the Seventh Summit of the Americas. Sound and perhaps even fury won’t be lacking, but real action, on anything, is most unlikely.

Since 1994, the “Summit Process” has progressively lost its relevance. Originally, it embodied regional efforts around two big endeavours: the economic integration of the Western Hemisphere, and the consolidation of the democracies that were emerging from decades of military rule. By the turn of the century, a lack of will in Washington along with Argentina and Brazil’s opposition to free trade had combined to kill the Free Trade Area of the Americas. All economic issues were pushed off the Summit Process agenda. This week’s meeting in Panama now buries the political and human rights component of the project. By next week, nothing of substance should be left.

Signs of the time, the main reasons for such a development have little to do with United States. The rise of Hugo Chavez in Venezuela implied the emergence of a left-wing authoritarian model led by a charismatic and ambitious leader keen on using his country’s massive oil wealth to promote himself and his “model” in the region. Chavez’ template directly challenged the liberal consensus embodied in the OAS Democracy Charter, the only really significant achievement of the Summit Process. “Substantive” and “popular” democracy now mattered more than electoral technicalities or “abstract” press freedom, and Chavez Venezuela showed the way, with the systematic and sometimes violent harassment of the opposition and increasingly strict constraints on independent media.

This should not have doomed the regime. Indeed, its moment of glory had precisely taken place in Venezuela where, in 2002, a military coup against Chavez had been roundly condemned by the region’s governments. In the face of hesitations from Canada and the United States and invoking the Charter, Brazil under Fernando Henrique Cardoso took the lead as the whole region made it clear to the conspirators that no recognition would be forthcoming, which helped cut their wings and bring Chavez back. A few months later, however, Cardoso was out and Lula and his Workers’ Party in, with a much more flexible attitude towards challenges to liberal democracy, as long as they came from the Left. Strong stands were taken against conservative coups or quasi-coups—in Paraguay and Honduras—but nothing was heard about democratic rights violations in Cuba or Venezuela.

The Panama Summit closes the loop as Cuba is re-admitted, with US acquiescence, into the big Inter-American family, in spite of its utter lack of democratic credentials. Venezuela, where the repression of non-violent political opposition has long been bad and is now getting worse, similarly won’t see its human rights record questioned by fellow Latin American governments. In fact, it will present itself as a victim of US destabilization attempts, a line of argument broadly accepted in the region. The freezing of the US-based assets of seven (!) Venezuelan officials has already been roundly condemned by the various groupings of Latin American governments. The colossal ineptitude of the US move is undeniable. Not only was the manoeuver hopeless in the face of a regime whose survival is at stake, but the freezing of foreign officials' assets can only be legally justified when their government represents a threat to the national security of the United States, an argument that is beyond preposterous. The move’s manipulation by the Maduro government, in the last few weeks and now, no doubt, during the Summit, was also utterly predicable. Yet, the willingness of the region’s heads of state to play along is as lamentable as their reluctance to question his record.

In that context, paradoxically, the Canadian government finds itself in a comfortable position. Having signed free trade agreements with all the functional economies of the region and with the ability, on its own, to straighten relations with Colombia and Mexico by liberalizing its visa policy, it has very little at stake at the Summit. Canada has never cut off relations with Cuba and as a result, doesn’t have to “undo” counterproductive policies and in the same movement legitimate the Cubans’ return to the Inter-American family, as Obama will be doing. At the same time, it can also legitimately criticize both Cuba and Venezuela for their rights record and thus stand as the sole principled defender of the Inter-American democratic Charter. This is unlikely to have much impact in the region, but it may flatter the Harper government and also many Canadians’ sense of principled duty. Cheap thrill, but thrill nonetheless.

[First published on]