LatAm Daily Briefing: Mexican President to Meet Trump; Calls for Reopening in Brazil; Colombia Extends Quarantine Measures

Argentina has been threatened with removal from MSCI’s Emerging Markets Index, should it become harder for foreign investors to access its stock market, according to Reuters. MSCI’s warning about Argentina follows the country’s default on its $65 billion debt payments in May and the subsequent stalling of talks with its creditors. “The Argentinian authorities must realize that the prolonged application of capital controls or the introduction of further capital controls may force the reclassification of the MSCI Argentina Indexes from Emerging Markets status to either Frontier Markets or Standalone Markets status,” MSCI said.

Brazil’s President Jair Bolsonaro has again called for the country’s economy to reopen, despite the country now having surpassed 50,000 deaths from Covid-19. In an interview with local media, Bolsonaro claimed the World Health Organization has exaggerated the severity of the pandemic. "It will not be easy to get this economy back on track. So we call on governors and mayors who, obviously with responsibility, start opening up trade," Bolsonaro said. "I have always said: life and employment, both are entirely linked to the other. And in some isolated places, we cannot make the side effects of pandemic treatment more damaging than the pandemic itself,” he added, without making reference to the rising death toll in the country.

Chile has proposed allowing online casinos to operate to offset losses caused by the closure of casinos during the lockdown to mitigate the spread of Covid-19 infections. Finance Under Secretary Francisco Moreno said on Tuesday that the government will propose a bill to allow the automatic renewal of 14 casino operating licenses scheduled to expire this year and grant the casinos permission to develop remote gaming platforms. In exchange, casinos would be asked to agree to a 5% increase in their gross income tax rate, totalling 25% during the 12-month extension. The proposal follows the announcement last week that the country’s 26 casinos might not be reopened until September or October due to the pandemic.

Colombia has extended its quarantine measures until July 15^th, and which had originally been scheduled to be lifted on July 1^st, after coming into effect on March 25^th, following the first reported coronavirus case in the country on March 6^th.  The current death toll from Covid-19 is 2,404, with more than 73,000 confirmed cases, with the country having seen a roughly 8,000 increase in infections following a tax-free shopping day on June 19^th for which the government was heavily criticized. The rate of new infections has since dropped however, with 2,389 new cases confirmed on Tuesday. 

Mexico’s President Andrés Manuel López Obrador has said he will likely meet with US President Donald Trump in July, following the entry into force of the USMCA, the US-Mexico-Canada free trade agreement, on July 1^st, which replaces NAFTA, the trade agreement between the three countries that has been in effect since 1994. The meeting will be held in Washington, and which would be López Obrador’s first trip abroad as head of state since taking office in December 2018. López Obrador told reporters at his daily press briefing that he is inviting Canadian Prime Minister Justin Trudeau to also take part in the meeting with Trump, but the Canadian government has yet to respond to the invitation.

Lockdown measures are being tightened in Peru’s Arequipa region amid a spike in Covid-19 cases. According to the Ministry of Health, the region has reported 188 deaths from the virus, with 5,981 confirmed cases, but the figures are contradicted by the regional health authority (Geresa), which puts the regional death toll at 226 and the number of confirmed cases at 9,092. Javier Gutiérrez, the head of Peru’s Medical College in Arequipa, was quoted by El Comercio newspaper as saying the increase in infections is due to a “voluntary” lifting of quarantine measures among the population over the last 15 days. Peru’s Agriculture Minister Jorge Montenegro, who has been put in charge of the Covid-19 response in the Arequipa region, was quoted as saying that local authorities are imposing a complete shutdown of all public and private sector activities in the region until June 30^th. Peru’s overall death toll from the virus stands at 8,404, with more than 261,000 confirmed cases.