Networked Notes - 24 February 2016

By Southern Pulse Staff and Network

The arrest of João Santana in Brazil has brought the Lava Jato scandal much closer to President Dilma Rousseff and her campaign team. While investigators have yet to pin corruption specifically to Rousseff, the news that third party payments passed to Santana during recent campaigns could be reason to invalidate her election. This specific scandal also hits former President Lula da Silva, highlight corruption of a key ally and knocking down an important element of his potential 2018 campaign machine. More important this year, Santana’s arrest could hurt the PT’s chances in key mayoral races, particularly São Paulo.

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President Juan Orlando Hernandez is near certain to run for reelection after successfully packing the Supreme Court with allies. After a convoluted process that involved multiple rounds of voting, the legislature finally approved a list of judges that was remarkably similar to the president's original request. In spite of controversy, the president's opponents were unable to stop the judges from being approved.

The day after the judges were approved, the president met with national party officials to begin planning out who would run for various federal and municipal offices in upcoming elections. The clear implication among those who attended the meeting was that the president will be running as well.

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Several Venezuelan journalists have reported rumors that former Economy Minister Luis Salas lost his job in Venezuela because he pushed for default at a cabinet meeting. Salas was a virtual unknown ideologue surprisingly appointed the the top economic position in January. Soon after his appointment, journalists and bloggers dug through Salas's writings to find his incredibly unorthodox views including his opinion that inflation did not actually exist. Salas was also apparently a fan of analyses by many left-wing economists and academics that suggested Argentina’s default in the early 2000’s was justified and worked out well for the country’s ability to return to economic growth.

In the days following the news Salas was replaced, Maduro spoke about emergency economic measures including a rise in the cost of gasoline and a change in the currency exchange regime. While these measures are far from the necessary changes to avoid further economic collapse, analysts view them as a starting negotiating point between Maduro and various international actors who may be able to help Venezuela with financing. They are also a toe in the water to see how the Venezuelan public reacts. Attempts to raise gas prices in the past have nearly always been met with significant protests and opposition from the street.