Central America elections pose risks of unrest

Significance Campaigning will be muted, as the impacts of the COVID-19 pandemic will constrain public events. Government handling of the crisis will be a consideration for voters, alongside more traditional issues such as insecurity, perceived corruption and poor economic opportunities. Dramatic improvements in such areas will remain elusive, whoever secures election. Impacts State weakness will hinder governments’ abilities to face health challenges and roll out vaccine programmes. Perceived impunity for politicians suspected of wrongdoing will drive unrest, especially if peaceful political expression is constrained. Costa Rica has no elections this year, but post-pandemic economic damage could hit government support ahead of 2022 polls. Economic hardship will drive more US-bound migration; an issue that will be formative for new governments’ relations with Washington.

Significance The visit follows Panama’s June 12 announcement that it had cut diplomatic ties with Taiwan in favour of establishing official relations with China -- the first such change in the region since Costa Rica switched diplomatic allegiances in 2007. Panama’s switch reflects China’s increasing economic links with Central America more generally and raises questions regarding the diplomatic stances of other countries in the Latin America/Caribbean (LAC) region, which is home to more than half of Taiwan’s remaining diplomatic partners. Impacts Taiwan will be more interested in unofficial but substantive ties than in retaining formal diplomatic recognition at high cost. Funding issues and domestic opposition to Nicaragua’s canal project could dissuade Ortega from any high-profile moves on China or Taiwan. Improved relations between China and Panama may concern Washington, given the level of US investment in the Panama Canal.


Significance Elsewhere in the region, only Panama has so far received a first vaccine shipment, suggesting roll-outs initially will be patchy. Central American governments are sourcing their vaccines either through direct purchases from manufacturers or through programmes run by the World Health Organization (WHO). Impacts A black market is likely to emerge both for vaccines and vaccination certificates. Poorer countries will receive more vaccine support once roll-outs have advanced in wealthier countries globally, but this may take time. Vaccine roll-out in the United States will benefit Central America in terms of tourism, business travel and investment recovery.


Significance Several workers’ unions launched protests in July in anticipation of the reform’s approval, claiming it undermines labour rights. The protests are symptomatic of growing frustration with the government’s efforts to mitigate the economic damage caused by COVID-19 lockdown measures. Impacts Panama’s economic struggles will be exacerbated by an ongoing trade spat with neighbouring Costa Rica. Increased protests will present major infection risks, perpetuating the challenges facing the government. Any surge in COVID-19 cases requiring a return of lockdown measures would further weigh on attempts to spark an economic recovery.


Subject Climate change and Central America. Significance Costa Rica on February 24 launched an ambitious plan to achieve zero net carbon emissions by 2050. The announcement follows grave warnings by the Intergovernmental Panel on Climate Change of the impending impacts of global warming and comes as the region suffers another season of drought. Extreme weather phenomena are becoming a regular occurrence across Central America -- a region local governments consider to be among the most vulnerable in the world to climate change. Impacts Extreme weather threatens tourism income, with hurricanes capable of crippling tourism sectors in a matter of hours. Costa Rica and Panama’s relative success in mitigating climate change impacts may encourage more of the region’s migrants to move south. Costa Rica’s efforts will ultimately prove meaningless if the rest of the world does not take drastic action to reduce carbon emissions.


Significance Mexico, Costa Rica and Panama were also affected, as were the Colombian islands of San Andres and Providencia, the latter reporting damage to 98% of its infrastructure. The crisis revealed once again the region’s vulnerability to natural disasters and the effects of climate change. Impacts Economic struggles, damaged infrastructure and wider health pressures threaten to weigh on COVID-19 vaccination efforts. Damage to agriculture could see hunger and malnourishment worsen across the region. US President-elect Joe Biden may raise the prospects of aid and investment in regional efforts to mitigate the impacts of climate change.


Subject Aviation in Central America. Significance Central America is becoming increasingly important as a Latin American aviation hub, seeing a recent wave of alliances and expansions. However, much of this activity is concentrated in just two of the region's seven countries -- Costa Rica and Panama. Impacts Copa and Avianca will be the dominant airlines in Central America for the foreseeable future. There may be some consolidation among recent entrants to Costa Rica’s domestic market. Avianca will focus increasingly on its core activities, seeking to divert from small domestic airlines in Central America.


Significance The appointments have proven controversial, largely due to questions around the probity of some of the new justices. This is particularly important given growing concerns that Guatemala is backsliding on efforts to crack down on entrenched institutional corruption. Impacts The conflict between the Supreme Court and Constitutional Court looks set to be resolved through the appointment of the new justices. A slow COVID-19 vaccine roll-out will further stoke domestic concerns about the government’s handling of the pandemic. Undocumented migration may spur Washington to outline plans for Central America regarding many issues, including anti-corruption funding.


Subject Southern Central America's preparations to invest more in tourism. Significance The countries of Central America are experiencing mixed fortunes in attracting international tourism, with Costa Rica and Panama benefiting from well-established and dynamic tourist sectors, while the less developed countries to the north of the isthmus -- El Salvador, Honduras, Guatemala and Nicaragua -- trail behind. The countries look set to continue diverging over the medium term, as Costa Rica and Panama diversify their tourist sectors and develop new tourism infrastructure. Impacts With the region's tourism industries heavily reliant on North America, any US economic downturn would be very damaging. Costa Rica's efforts to open up its eastern coast could provide a major new regional hub for resort tourism. A stronger dollar could encourage US tourism in countries, such as Guatemala and Nicaragua, whose currencies are not pegged to the dollar.


Subject SICA's relative ineffectiveness. Significance The partial withdrawal of Costa Rica from the Central America Integration System (SICA) on December 18 serves to highlight underlying regional tensions that undermine the effectiveness of the body. At the same time, common security challenges mean cooperation has become increasingly important. Impacts Costa Rica's dispute with SICA is likely to be short-lived. However, territorial issues will drive periodic tensions between countries. Without greater resourcing, security cooperation will have limited effect.


Significance The migrant crisis was a key theme at December’s summit of the Central American Integration System (SICA). The region’s leaders agreed on a need to address underlying causes relating to crime, violence, inequality and climate change, as well as stem the immediate flow of migrants. Impacts US support for the regional development plan will be limited at best. Access to financing for coffee growers will increase in the near future, securing small producers’ livelihoods and boosting production. Costa Rica and Panama will increase security force capacity to limit any contagion of violence and crime from the Northern Triangle.


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