Category Archives: Countries / Regions

LATIN AMERICAN DONORS’ DEVELOPMENT COOPERATION POLICIES

Last February, the Development Policy Centre at Crawford School of Public Policy of ANU hold the 2014 Australasian Aid and International Development Policy Workshop. The event had more than 50 papers spread over some 19 plenary and panel sessions, session topics include: changing aid frameworks, labour mobility, disaster management, health and aid, fragile states and governance, and more.

ANCLAS Deputy Director Dr. Sean Burges and Carmen Robledo, ANCLAS Associate and PhD candidate at the School of Politics of International Relations of ANU represented ANCLAS in the event.

Dr. Burges participated in the  a plenary panel session – Making their mark: the BRICS and aid with the presentation titled “Brazil’s international development cooperation: old and new motivations”. To read an abstract of Dr. Bruges’ presentation visit the DevPolicy blog.

Ms. Carmen Robledo participated in a panel on donors studies. Her presentation focused on the motivations driving developing assistance policies in Latin America. To see the slides of Carmen’s presentation click here and to read an abstract of this presentation see her contribution on the DevPolicy blog.

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Filed under Analysis, Brazil, BRICS, Development, Foreign aid, Uncategorized

MEASURING WELL-BEING IN A CONTINENT OF CONTRASTS

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A few days ago, Forbes magazine released the 2014 list of World’s billionaires. Seven Latin American billionaires made the top 100, with Mexican telecom tycoon Carlos Slim, in the second spot. In total, there are almost 100 billionaires in the continent and their combined fortunes add up to US$500 billion.  But on the other hand,  Latin America is still home of 160 million of poor, equivalent to 35% of the population in the region (World Bank data), despite intense governmental efforts to reduce poverty.

Furthermore, the OECD in the report How’s life in 2013 noted that countries, such as Mexico and Chile are way below the OECD average of GDP per capita and gini coefficient. However, the report also mentions that despite economic difficulties faced by the population, Brazil, Mexico and Chile have higher spreads of life satisfaction. In fact, out of range from 1 to 10, Mexico scored 7.3, Brazil got 6.7 and Chile scored 6.5 just below the 6.6 OECD average score.

The How’s life in 2013 report shows a new approach to quantify and understand poverty. At first well-being of population was measured only on the basis of material resources reflected on the GDP per capita. In the early 1990s, the UNDP Human Development Index (HDI) incorporated health and education. Today, several countries are shifting to more comprehensive forms of measurement. This new methodology seems to take on board the approach based on capabilities (functionings) that Amartya Sen fiercely defended.

In 2008, Mexico started using this method in its poverty measurements and included six basic social rights in the Law for Social Development. Also, Colombia, El Salvador and the Brazilian state of Minas Gerais have included multidimensional approaches to measure poverty. These governments sought to a better assessment of the capabilities and potential of citizens.

But what exactly is a multidimensional approach of poverty? Poverty itself has several aspects. Poverty measurements should include elements that could cause or further increase the situation of deprivation populations. El Salvador, for instance, identified eight dimensions to be observed and addressed as part of its poverty measurements: employment, housing, education, security, recreation, health, nutrition and income. Colombia chose to evaluate social and health conditions by measuring the following five conditions: education, childhood and youth, labour, health and access to household utilities. While Mexico selected educational, access to healthcare, social security, housing quality, access to basic services and nourishment. In turn, based on these elements the Mexican government classified deprivation in three categories: 1) food insecurity (extreme poverty), 2) obstacles to development of capabilities (access to education and health) and 3) material deprivation (access to adequate housing and transport).

This trend is not unique to Latin America; Bhutan, Malaysia and some areas in China have also adopted it. The most commonly known is the Gross National Happiness Index of Bhutan that includes nine dimensions.

The importance of a multidimensional poverty approach is based in the fact that it highlights aspects that are lagging behind and that require intervention. In other words, by having measurements of different dimensions of deprivation, decision-makers are able to identify elements that need immediate attention of public policies. Policy-makers can also observe progress of social policies and can reassess the continuation or reformulation of current strategies.

While developing countries have made significant efforts to better understand and find solutions to address poverty, results are meager and governments still face enormous challenges. The multidimensional index is a photographic representation of the reality of poverty. To change the socio-economic landscape of the continent of contrasts, coordinated public and private efforts, along with civil society engagement, are in most need to eradicate poverty and reduce inequality.

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Filed under Analysis, Countries / Regions, Development, Macroeconomics, Uncategorized

LESSONS FROM MEXICAN ECONOMIC REFORMS.

John Kehoe, from the Australian Financial Review, published today an op-ed on the economic reforms undertaken by Mexican President Peña Nieto.  Kehoe highlights the political agreement reached among the three major parties (PRI, PAN, PRD) that have enable the current administration to pass the much needed reforms (previous post). Despite outstanding challenges to overcome, such as violence and corruption, Mexico earned ‘A’ grade sovereign rate from Moody’s credit rating agency as a result of such reforms.

 

Kehoe further notes Australian Treasurer Joe Hockey comments, on Mexico’s efforts to undertake domestic reforms to cope with global volatility. Last weekend in Sydney, G20 Finance Ministers and Central Bank Governors committed to promote a resilient financial system and to foster a conducive investment environment. The author concludes that Mexico, along with other developing countries, is in a much better position to fulfill the G20 commitments.

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Filed under Foreign investment, Global Governance, Macroeconomics, Mexico, News brief, Uncategorized

Peña Nieto on the front cover of TIME magazine

TIME EPN

Last 16 February, Mexican President Enrique Peña Nieto made the front cover of TIME magazine. This issue spark off a heated debated in social media in Mexico, criticising Michael Crowley, the author, and TIME for allegedly “selling out” themselves to the Peña Nieto government.

As Crowley rightly points out, Peña Nieto only won the presidential election with 38% of the votes and therefore it is evident that his detractors react this way. I agree that perhaps the title of the story would have been better with an interrogation mark at the end: “SAVING MEXICO?”, but I must concede that the author presents both sides of the same coin. He highlights achievements and strengths of the country, but also points out the numerous challenges that the current government still has to overcome.

At the same time, I must recognise the sharp Mexican humor to transform the cover into this one.

In any case, I strongly invite you to read the article (or Spanish version) and make your own judgement.

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Filed under Corruption, Democracy, Development, Foreign investment, Macroeconomics, Mexico, News brief, Security, Uncategorized

AFTER THE FIRST YEAR….

ImageMexico’s President Enrique Peña Nieto (EPN) used his first state-of-the-nation address to present the achievements of the government during the first few months of his mandate. He praised the members of parliament for their support and diligent approval of the reforms that his administration launched. He emphasised the importance of setting the basis to end the inertia and transform Mexico in the great nation that it is. Peña Nieto and his supporters believe that Mexico has the potential to improve in few years the quality of life of all Mexicans.

The Mexican President enounced the outcomes and progress in each of the five axes of the National Plan for Development 2013-2018 (launched at the beginning of his term in office): 1) Mexico in peace; 2) social inclusion; 3) education with quality; 4) economic prosperity; and 5) Mexico as a responsible global actor.  Firstly, he highlighted the decrease on the number of murders, the improved coordination between the law enforcement agencies and the reform of the judicial system. Then, Peña Nieto described the results of social programs, especially the National Crusade against Hunger, the expansion of Oportunidades and the addition of scholarships in the program and the inclusion of gender perspective in all government programs. In terms of education, the Mexican President affirmed that the education reform will produce better facilities, better teachers, better access to computers, internet and teaching technologies and improved facilities for students.

Moreover, he pointed out that the constitutional reforms proposed by his government aim to improve productivity, promote economic growth and create jobs. The current administration considers that it is necessary to lay the legal and institutional foundations that will support the country’s sustainable growth in following decades. In this regard, the private sector commended the government’s actions and noted that benefits from macroeconomic stability are already showing; for instance, Mexico climbed to the 7th position as recipient of foreign direct investment (FDI), only in the first semester of 2013 Mexico received USD$24 million on FDI. The chair of COPARMEX (Mexican Patron’s Confederation) indicated that even when the government has promoted larger efforts against organised crime, it is still necessary to offer more certainty to investors.

Great speculation emerged after the announcement of the energy reform. PEMEX (Petróleos Mexicanos, state-owned oil company) is a symbol of pride and any discussion around it touches the deepest fibres of Mexican nationalism, but the company has become so obsolete and inefficient that its production is constantly decreasing. Without private investment PEMEX is incapable to exploit the rich oil and gas reserves that the country owns. Foreign companies warmly welcomed the reform, since it represents great investment opportunities; for the US, especially, could mean less dependency on OPEC countries supply and therefore less leverage for the cartel. But in the domestic realm, private foreign investment has brought a big debate; detractors believe that it will put the nation’s wealth in the hands of imperialists interests and only very few will see the benefits. Cuauhtémoc Cárdenas (leader of leftist party PRD) and Andrés Manuel López Obrador (AMLO, leader of leftist movement MORENA) have separately called for massive public protests against the reform.

Additionally to the energy sector, Mexico needs to reform the tax system. This will not only decrease the burden on PEMEX, but also will bring sounder fiscal policies, transparency and greater competitiveness to private companies. Among OECD members, Mexico is the country with the smallest proportion of tax collection (it is equivalent to only 10% of GDP, while the average is 25%). Additionally, Peña Nieto announced that in brief his government will submit to Congress a proposal to reform the financial system, which will intend to make funding cheaper and more accessible for micro, small and medium enterprises. This set of structural reforms is designed to create the conditions for a more competitive, productive and dynamic economic environment that attracts larger sums of foreign investment and encourages the creation of more jobs.

Finally, EPN mentioned that Mexico has promoted closer and deeper bonds with its neighbours. With the US, the Mexican government established an integral agenda with the aim to create the most productive region of the world. In the southern border, Mexico finalised a free trade agreement (TLC Unico) with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua and it is negotiating another one with Panama.  Although, Peña Nieto’s administration is promoting more exchanges with Asia-Pacifico and his government wants to encourage larger integration of the Pacific Alliance (Chile, Colombia, Mexico and Peru) and the TPP to take advantage of synergies across the Pacific, its closer neighbours are the main focus of its foreign policy.

Denise Dresser and Lorenzo Meyer, political analysts, commented that Peña Nieto had opened too many fronts with the series of constitutional reforms promoted in Congress. The analysts gave particular attention to the impact of the energy sector reform on PEMEX and CFE (state-owned enterprises for oil and electricity production and distribution), as well as, on the state revenue. It is still necessary to pass complementary bills and then to implement them all, which in reality will take quite a few years to produce results and to spill the benefits down to the masses. To sum up, Peña Nieto presented a large number of actions initiated by his government, but the results are still to be produced…. Will Peña Nieto’s have sufficient political leverage to achieve these objectives? Will the Pacto por Mexico coalition hold together for the next five years?  It seems that the honeymoon is over.

If you wish to consult the full state-of-the -nation document, please click here.

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by | September 4, 2013 · 10:47 am

PEÑA NIETO’S CHALLENGE: CRIMINAL CARTEL AND RULE OF LAW IN MEXICO

International Crisis Group (ICG) recently published a report on criminal cartels activity in Mexico and the government’s strategy against them. The document presents an analysis of the situation and revises the strategies implemented by previous PAN government and the challenges and opportunities to the current administration.

crimenThe report highlights the participation of the three main political parties in the Pacto por Mexico proposed by Peña Nieto’s administration. The pact allowed the government to pass several major reforms, but in this particular case, the three parties backed up the security plan launched by Peña Nieto. ICG notes that the former PAN administration implemented a strategy to “fight a war” but if Peña Nieto wishes to finish with the violence in Mexico, his government needs to include additional actions, such as institutional capacity building, reinforcing police and justice systems and improving social inclusion programs.

The violent situation in Mexico is not only a challenge for the country, but also for Mexico’s Northern neighbour. The report indicates that the violence escalated after the US legislative ban in assault weapons ended in 2004. Mexico is confronted to domestic pressure to finish with criminal activity and externally to stop the flow of narcotics. Furthermore, Mexico’s situation seems relevant for other countries around the globe facing similar circumstances.

To download full report click here.

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Filed under Analysis, Corruption, Mexico, Security

Aztec tiger begins to sharpen its claws

The Financial Times published an interesting article on Mexico’s economic environment. It highlights the prudent fiscal and monetary policies that the country has implemented recently, creating a sound macroeconomic environment.

Furthermore, the journalist underlines the structural reforms that President Peña Nieto was able to promote, as a result of the pact established with the main political forces of the country. Mexico is in the track of industrialisation, but still has a long way to go. Peña Nieto’s government needs to capitalize the momentum and continue further with other important reforms, such as the energy sector and tax schemes.

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Filed under Foreign investment, Macroeconomics, Mexico, News brief, Trade, Uncategorized

‘RELAUNCHING’ CHINA-MEXICO RELATIONS: President Xi Jinping visit to Mexico

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Last week, Chinese President Xi Jinping visited Mexico, as part of his first trip to the Americas. Earlier this year, during a trip to China to participate in the Boao Forum for Asia, President Peña Nieto extended an invitation to the Chinese President to visit Mexico. China and Mexico established diplomatic relations in 1972, but bilateral contacts are much older than that. In the XVIth Century, during the Spanish colony ships sailed the Pacific loaded with precious metals, cacao grains, avocados, tomatoes and other articles from the Americas that were exchanged for Asian spices, Chinese tea, porcelain and fabrics, especially silk.

For most of the last 40 years, the relations between the countries were quite cordial, during the last ten years. However, diplomatic mishaps and a policy that sought to bring Mexico closer to the US, during the Fox and Calderon administrations, provoked the Mexican neglect of strategic partners in other parts of the world, and in particular in Asia. Despite regular high-level encounters in international fora, such as APEC or G20, and the signing of cooperation agreements in numerous sectors, trade rivalry overshadowed  Sino-Mexican bilateral relations.

Unlike the rest of Latin-America, the economic relationship with Mexico has not been based on Chinese investment to ensure the flow of raw materials to fuel China’s industry. In fact, cheap Chinese labour made Mexico and China direct competitors in the US market;  in some cases, Chinese manufactures displaced national production in the Mexican domestic market. Furthermore, the bilateral trade deficit is heavily favorable to China; in 2012 Chinese exports to Mexico accounted for USD$57 billion, while Mexican exports to China were USD$5.7  billion (according to the Mexican Ministry of Trade, www.economia.gob.mx).

The occasion to relaunch the bilateral relationship could not be better. Each President has recently taken office and both countries seek to reaffirm their positions as global actors. On the domestic side, President Peña Nieto’s administration started a series of structural reforms to increase economic productivity, while China seeks to maintain its economic momentum. The increase of Chinese wages and international oil prices has narrowed down the productivity gap between Chinese and Mexican products. China’s products are not as cheap as they used to, in some cases, it is cheaper and certainly quicker to import from Mexico than from China for US companies. These elements helped Mexico to leave aside fears and realise the economic potential of complementing, rather than competing with, Chinese partners.

With the aims to enhance mutual trust, expand cooperation and deepen friendship, Peña Nieto and Xi Jinping announced the Comprehensive Strategic Partnership. This agreement aims to push for comprehensive, in-depth and mutual cooperation between the two countries and to make positive contributions to world peace, stability and prosperity. A permanent bilateral commission and working groups will follow the commitments established in the Partnership by the leaders.

Likewise, the two Presidents agreed to move forward, solving the long standing conflicts on pork, tequila and textiles trade. They committed to increase trade and investment and established a high-level business forum. Mexico and China also signed memoranda of understanding to improve cooperation in energy, biotechnology, mining, financial services and sport.

Additionally, President Peña Nieto and President Xi Jinping will encourage deeper people-to-people links. To start, the Chinese government will increase the number of scholarships offered to Mexican students from 40 to 300 per year. To increase cultural and academic exchanges, a Mexican cultural centre in Beijing and a centre specialising on Chinese studies in the National Autonomous University of Mexico (UNAM) will be opened. Finally, as symbol of the two countries’ endeavours to boost tourism flows, during the last day of the visit, President Xi Jinping and his wife visited the archaeological site of Chichen-Itza.

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Some specialists point out that the Chinese visit to Latin America is a sign to the US. China is pointing out that it has interests in other parts of the world, and is not afraid to contest US hegemony, even in the its back yard. Similarly, the US could interpret the visit as a payback for the recent increase in US engagement in Asia, China’s back yard. In any case, this is a perfect environment for Mexico’s diversification, since it could help to break the Mexican trade dependency on the US and to reaffirm itself as a key global player.

As said by President Xi Jiping in his address to the Mexican Senate*, China has a population of 1,300 million, is the second largest importer, expects to invest overseas more than USD$500, and more than 400 million of Chinese tourists will travel around the world in the next few years. This is an incredible opportunity for countries in Latin America, and of course for Mexico. The Comprehensive Strategic Partnership has opened the path for a promising future for Sino-Mexican relations.

 Mexico cannot waste this opportunity…


* I do encourage you to read President Xi Jinping’s speech to the Mexican Senate.

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Filed under BRICS, Development, Foreign investment, Mexico, News brief, Trade, Uncategorized

5 DE MAYO, MONROE DOCTRINE AND US-MEX RELATIONS

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In 1861, a large contingent of French, British and Spanish troops arrived on Mexican shores to support the imposition of Maximilian of Habsbourg as emperor of Mexico. The French contingent advanced to Mexico City and encountered resistance in the city of Puebla where, on the 5th of May of 1862, they were defeated by a small Mexican battalion  and eventually fled the country.

Every year on the 5th of May large festivities take place to celebrate the Mexican victory  in the Batalla de Puebla against the French Army. To the surprise of many, 5 de mayo is not Mexico’s national day (Mexico commemorates its national day on the anniversary of its independence, 16th of September). In reality,  5th of May is only one of many other celebrations in the Mexican historical calendar. It actually has become famous around the world thanks to huge range of festivities organised by Mexican-American communities in the US.

The battle of Puebla is significant not only because a small unprepared Mexican army defeated and expelled the French from Mexican territory, but because it represents the last attempt of European powers to invade American territory. To the satisfaction of President James Monroe, his famous doctrine “America for the Americans” had finally become a reality (I would like to stress that we refer to America as the continent, and Americans as the population of this continent and not to the narrow and commonly used reference of America as the United States and Americans as its citizens).

Throughout the history of relations between the US and Latin America, the Monroe Doctrine has had many and, in some cases, quite broad interpretations. Although military interventions have become rather rare, cover operations and other forms of interference have been widely used in the continent. The end of the Cold War shifted the attention of the US to other regions of the world. However, despite fervorous calls for national sovereignty, there were still claims of substantial US engagement in Latin America’s domestic affairs.

Unsurprisingly, Mexico has not been spared and in reality perhaps has suffered more than any other nation in the region. Geographical proximity, economic interdependence, social interconnection and common challenges have resulted in a very  complex relationship between the US and Mexico; but at the same time, this complexity has allowed the multiplication of numerous avenues for mutual collaboration.

During his recent visit to Mexico, President Obama highlighted the importance for the two countries to strengthen the bilateral relationship. Both Presidents focused their discussions on increasing efforts for further collaboration on trade and investment, energy security, education, innovation and competitiveness.

Nevertheless, it did not take long for criticisms on both sides of the border. Security and immigration, crucial issues for the bilateral agenda, had not been sufficiently discussed and were barely mentioned in official communiques. On the Mexican side, despite general agreement that these two topics should not overrun the bilateral relation, Mexico would like to see further US engagement in this regard (for instance, the immigration reform and larger arms control). While on the American side, criticism has focused on the importance of deepening cooperation to fight organised crime and see Peña Nieto’s measures to scale down US intelligence and security agents involvement in Mexico, as a sign of mistrust.

Critique became particularly sharp when Mexico’s new administration policies were compared to the wider cooperation and greater access that existed with the previous PAN government. Regular surveyance flights over Mexican territory, the establishment of ‘coordinating’ offices in Mexico City and Nuevo León and the free circulation of armed agents of FBI (Federal Bureau of Investigation), DEA (Drug Enforcement Administration), CIA (Central Intelligence Agency), ICS (Immigration and Citizenship Services), ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) and NSA (National Security Agency) does not appear to be the kind of close bilateral cooperation that PRI would prefer.

Despite restrictions on US involvement in the fight against organised crime and other domestic issues, it appears that we are far away from a definite adiós to the Monroe Doctrine in the hemisphere. Certainly, old style military interventions seem unlikely, but new IT resources, the interdependence of global markets and transnational societies have provided a new arsenal of interference tools that perhaps can prove to be ever more effective than traditional ones.….

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ANCLAS’s Tom Chodor on Post-Chavez Venezuela

The Future of Chavismo Will be Decided in the Barrios as Much as in Miraflores

With the passing of Venezuela’s President Hugo Chávez, debate has erupted on the future of ‘Chavismo’ – the political project that Chávez himself referred to as the ‘Bolivarian Revolution.’ Much of this debate has focused, understandably, on the successor to Chávez, the Vice-President Nicolás Maduro, and his ability to hold together the ruling coalition without the charisma and considerable political skill that Chávez possessed. Maduro, of course, still needs to win the upcoming election, but for many that seems a foregone conclusion, given the recent triumph of Chávez and the ruling party, PSUV in national and regional elections, and the goodwill that Maduro is likely to garner as the ‘Chávez candidate.’ This analysis is probably a fair scenario, though, of course, one can never have complete certainty in democratic elections.

Nevertheless, with Maduro assumed be the next resident in the presidential palace at Miraflores, questions are being posed about his ability to preserve Chavismo, given the cleavages in his own party, economic issues like inflation and dwindling private sector investment and the continuing polarisation of the country. Undoubtedly these are important issues that will play a large role in determining the future of Chavismo. However, one important aspect missing from the analysis, is the role of ordinary Venezuelans themselves – the people in the shanty towns (barrios) who constantly voted Chávez into power, and whose loyalty he repaid not only through the delivery of social services like health, education, housing and subsidised food, but also by facilitating and supporting a number of grassroots institutions through which their self-government could be fostered. These institutions – the communal councils, cooperatives or local communes – mushroomed in Venezuela under Chávez, and form part of the ‘participatory democracy’ model at the core of Chavismo.

Not much attention is usually paid to these institutions, primarily because they fall outside of the traditional institutional framework of representative democracy, leading many critics to decry them as clientelist mechanisms of distributing patronage. While there are undoubtedly problems with some of them – including corruption, waste and political subservience – (problems, incidentally, which the government did acknowledge and try to alleviate), it is also true that a lot of them have worked very well and have led to a flourishing of self-government and democracy at the grassroots level. Contrary to conventional analyses, the citizens organised through these institutions, were not always subservient to Chávez, as evidenced by the failure of the 2007 referendum on constitutional change. If anything, Chávez was reliant on this diverse and amorphous base, as it served as the force that pushed his government further towards reform and experimentation. The political awakening of this previously excluded section of the population could yet be the most significant legacy of Chávez’s time in power.

Now, however, with Chávez gone, the question is whether this experience has left a lasting impression, or whether the critics were right, and that these institutions were no more than structures of patronage. Thus, what happens in the barrios – within the communal councils, cooperatives and communes – is as vital to the future of Chavismo as what happens in Miraflores under Maduro. Will the social movements located there continue to be engaged in the political process? Will they continue to put effective pressure on the government to continue experimenting with social, political and economic structures? Will they continue to demand the further democratisation of the state bureaucracy and party structures in PSUV? Will they be listened to if they do?

These are all important questions to which we may get some partial answers in the coming months and years. There’s no doubt that there are countless obstacles in the way. But for years, Chávez’s supporters and detractors have argued over whether Chavismo is too reliant on one man, or whether it has unleashed something bigger than just the President. The latter view was expressed eloquently by one Chávez’s supporters during his funeral procession on Wednesday, when he declared to The Guardian that ‘the comandante is not dead, no, not dead. He has sowed something in us, the people, and that way he will live.’ In the near future we may get an indication just to what extent these words hold true.

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