Drugs and crime gain new priority in Argentina

Subject Drug trafficking and security concerns. Significance On January 19, President Mauricio Macri signed a decree declaring a one-year public security emergency for the purpose of fighting organised crime and drug trafficking. Macri's success in tackling drug trafficking and insecurity, particularly in Buenos Aires province, will be crucial to his chances of bidding for a second term in office in 2019. Impacts Elements of the security emergency decree will face congressional opposition. Insecurity and drug trafficking were key election issues in Buenos Aires province last year, and will remain so in future. Returning border and coast guards to their original task of controlling frontiers will be necessary to improve border security.

Subject The militarisation of security. Significance Lack of police capability and the scale of Guatemala's security challenges mean that the military role in combatting organised crime will continue, despite concerns. President Jimmy Morales recently announced that the military would continue to support police with domestic security. This comes as security challenges remain acute, particularly in urban areas and the northern Peten department. Impacts Peten will remain the focus point of drug trafficking activity, though extortion in urban areas will be a more pressing concern. Public pressure for a tough approach to crime means that periodic excesses by security forces will continue to be tolerated. While Guatemala faces similar security challenges to neighbouring countries, there is little prospect of increased cooperation.


Significance Although a second round had been widely expected, the narrow gap between the ruling Frente para la Victoria (FPV) candidate Daniel Scioli and Mauricio Macri of the centre-right Cambiemos coalition makes the outcome more unpredictable. Moreover, the FPV's loss in Buenos Aires province -- notably in many municipalities of the Greater Buenos Aires area -- deals a blow to its future prospects. Impacts The perception that Macri is now a serious contender will help him -- but may prove mistaken. Economic concerns are not yet a key electoral issue, but the new government will face a difficult outlook. Scioli remains the marginal favourite at present, and could even benefit from greater distance from the president.


Subject Prospects for Mexico and Central America in 2016. Significance Mexico and Central America will weather the economic slowdown that is affecting many emerging economies in 2016, with most countries doing well by broader regional standards. Security and governance are causes for concern regionwide. Both criminal and state violence will be major issues in Mexico and northern Central America, with increasing migration giving organised crime groups opportunities to diversify and potentially spread south, and heavy-handed policing exacerbating insecurity. Border security issues have the potential to strain relations between countries, while allegations of corruption will challenge governments, with numerous politicians potentially facing trial.


Subject Security concerns. Significance Although Costa Rica has long avoided the crime problems of its northern neighbours, a report released in June by its Judicial Investigation Agency found that the number of criminal groups operating in the country has increased over the last decade, with members of gangs (or 'maras') from the Northern Triangle countries of Guatemala, Honduras and El Salvador establishing a presence in Costa Rica. While the country remains one of the safest in the region, mara activity has had an impact on crime levels, pushing the government to take action. Impacts Increased mara activity may cause conflict with local gangs, particularly in urban areas. Initial successes in dismantling gangs may encourage other groups to try to fill the power vacuum. Pre-emptive action will slow the development of organised crime, but could encourage gangs to move to neighbouring countries.


Significance The UN Office on Drugs and Crime (UNODC) has warned that India’s north-east is becoming a major hub for the regional drug trade. Asian drug cartels have long relied on India as a source of drug precursors, the chemicals used in narcotics manufacture. Impacts Pandemic-related hardship will prompt a rise in consumption of relatively cheap drugs such as methamphetamine in the region. Drug cartels based in India and elsewhere in South and South-east Asia will rely increasingly on online platforms to conduct their business. The different states in India’s north-east will struggle to coordinate their efforts to crack down on drug trafficking.


Significance The strong showing by Cambiemos was dominated by its party lists’ victory in the key Buenos Aires province, where it defeated the Unidad Ciudadana (UC) party of former President Cristina Fernandez de Kirchner, who suffered her first-ever personal electoral defeat. However, Cambiemos remains well short of a majority in either chamber and will have to negotiate hard with other parties -- primarily the Peronists, whose own election result was poor. Impacts Macri and his backers need to avoid triumphalism, which could prove premature if the economic environment does not improve. Macri has been underestimated by opponents, but now risks being overestimated by his supporters. The response of domestic and foreign investors will be key and will also depend on improved competitiveness.


Significance The planned protests, on the day of San Cayetano, the patron saint of employment, would have taken place just before the August 13 simultaneous open primaries (PASO) to choose candidates for the October mid-term elections, in which one-third of the Senate and half the Lower House will be up for election. Pro-Kirchner unions held rallies on Independence Day (July 9) last year which turned violent, prompting a backlash in public opinion which Fernandez de Kirchner wishes to avoid in advance of the PASO. Impacts Buenos Aires province will likely have no Peronist senator from December. PASO voter numbers for each party will be an indicator of election results. Peronist presidential hopefuls will step up opposition to Macri’s agenda.


Subject Economic and political challenges in 2015. Significance GDP expanded by 3.5% in 2014, but a less benign regional context and domestic problems will force President Tabare Vazquez to make rapid economic adjustments. Falling competitiveness has affected the current account and deteriorating public finances will require tightening. This will make it harder for Vazquez to fulfill electoral promises to improve education and public security. Impacts Economic and coalition pressures may impede action on campaign promises, cutting into Vazquez's approval rating. Doldrums in Argentina and Brazil and poor bilateral ties with Buenos Aires will weigh on export performance. Competitiveness concerns will worsen if indexation of wages to past high inflation continues.


Subject A profile of Maria Eugenia Vidal. Significance Maria Eugenia Vidal, of President-elect Mauricio Macri's Cambiemos coalition, won a surprise victory in the October elections for governor of Buenos Aires province with 39.5% of the vote, ending 28 years of Peronist government. She defeated the governing Frente para la Victoria (FPV) candidate, Cabinet Chief Anibal Fernandez, who gained 35.2%. Impacts Buenos Aires province represents 36% of GDP, 38% of the population and 48% of manufacturing; the governorship is crucial. Difficult financial and police reforms are likely to be key priorities. Vidal will face strong challenges from Peronists in the legislature and trade unions.


2015 ◽  
Vol 75 (1) ◽  
pp. 77-91 ◽  
Author(s):  
Roberto Dario Bacchini ◽  
Daniel Fernando Miguez

Purpose – Based on the Normalized Difference Vegetation Index (NDVI)-based insurance developed by the Ministry of Agriculture, Livestock and Fisheries of Argentina (MAGyP) with technical assistance of the World Bank (WB), the purpose of this paper is to evaluate the out-of-sample performance of the NDVI-based insurance in Bahía Blanca Department of the south west of Buenos Aires (SWBA) Province in Argentina, by calculating the technical premium with the methodology developed by MAGyP-WB and NDVI information up to 2007, and analyzing the results that would have been obtained in 2008 and 2009. Design/methodology/approach – With the available NDVI information (1982-2009), the authors uses the out-of-sample method to analyze the rating of the contract and the reasonability of the premium payment through a comparison of the frequency and severity of payouts in the NDVI coverage with the losses suffered by droughts in SWBA. Specifically, it has been taken the data until 2006 to set the Triggers and Exits values and to calculate the premium rates, and the payout and loss ratio in 2007 was then analyzed. A similar analysis was done for years 2007-2008 and 2008-2009. Findings – According with the rating methodology described in this paper, payouts determined by the NDVI-based insurance fit with falls in forage production and reduced meat production yields, which confers reasonability to this tool as a coverage option for cattle and fodder producers. Definite technical premiums based on 1982-2007 period, capture the occurrence of severe drought events, defining a risk profile that is consistent with the used information. Adding more observations to the sample, this profile is redefined, showing the sensitivity of the results to the quality and quantity of data used in the analysis. Research limitations/implications – There is a subjective assessment in the determination of the sample and the weighting of this information. The election of the period to be considered, how to incorporate the changes in the patterns of climate behavior in the medium- and long-term and the expected effects in the NDVI, etc. will impact on the values of resulting technical premiums. In the specific case of this analysis, the fact of not having considered in the sample two extreme years (2008 and 2009) has a concrete implication in the obtained premiums. In this paper, only the Bahía Blanca Department was considered. Rainfall pattern and extensive grazing of natural grassland in the SWBA area might vary from Department to Department, so the results and payouts might change according to these circumstances. Practical implications – The situation shown in the findings could be seen as an underestimation of the risk to which the producer is exposed and should be taken into account for further researches and insurance products to be designed. When the considered data series shows atypical or extreme values and these are incorporated into the sample, significant changes can be registered in the triggers and premiums. Originality/value – This paper analyzes how a risk profile is redefined depending on the sample considered and shows the sensitivity of the results to used data when using index-based insurance.


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