The region’s last presidential election of the year could be the most conflictual. And Rodrigo Paz’s first moves to handle Bolivia’s economic crisis.
ELECTIONS
Honduras braces for tense vote amid mutual fraud allegations
Elections in Honduras this Sunday will follow the most straightforward rules imaginable: a single round of voting, with the candidate who gets the highest tally declared president for 2026 through to 2030, without the need for a runoff.
Yet the process could end up being the most conflictual the region has seen this year, as the government and opposition have traded accusations of fraud and vote-count manipulation, in a country whose weak institutions could struggle to process a disputed outcome.
👉 Why it matters. Honduras already went through a contested election in 2017, when international observers suggested foul play in right-winger Juan Orlando Hernández’s narrow win over a progressive coalition led by Salvador Nasralla. Fraud allegations led to vast street protests with dozens of deaths, while Hernández ended up jailed by the US in 2022 due to a separate drug trafficking investigation.
Opinion polls in Honduras are not particularly trustworthy, but the consensus among analysts is that only three candidates stand a chance of winning. They are:
- The chameleonic Nasralla is making yet another run for office. This time, the former ally-turned-rival of President Xiomara Castro appears on the centrist Liberal Party ticket.
- Castro’s former Defense and Finance Minister Rixi Moncada, from the ruling left-wing party LIBRE.
- Former Tegucigalpa mayor Nasry Asfura, who served in the capital between 2014 to 2022 before winning the right-wing National Party primary this year.
Crucially, each of these main candidates has one representative on Honduras’ three-member electoral council (CNE), where divisions have led to a year of constant internal strife and mutual accusations — starting with a chaotic March primary whose winners were only announced one month after the vote.
Last month, the right-wing CNE representative was denounced for allegedly plotting to manipulate results against the ruling party. The accusations were based on a series of audio leaks in which he discusses the election with a member of the Honduran military, but the opposition dismissed the recording as an AI forgery.
More recently, the government’s CNE representative declared that the pre-election quick-count simulation had failed, and thus the results on the night of the vote should not be trusted until a full recount, which could take days.
The opposition, meanwhile, denounced the potential for undue military interference from officials close to President Castro in a country that has been under a state of emergency since 2022. Their warning was backed by former center-right presidents from across the region, who, in an open letter, spoke about “grave threats” to “free and fair elections.”
Adding to the intrigue, the Donald Trump administration in the US took an active role in the race in recent days, calling an extraordinary session of the Organization of American States with the backing of its regional right-wing allies Argentina, Ecuador and Paraguay. Republican Latinos in the US Congress also denounced the Honduran government’s ties to Cuba and Venezuela.
In his final intervention, Trump published an open endorsement of Asfura, a decision lamented by the centrist Nasralla, who wants right-wingers to choose him as the pragmatic option to beat the left. He says he will build a constructive relationship with the US leader, were he to win Sunday’s vote.
ECONOMY
Bolivia’s Rodrigo Paz buys time while signalling future reforms
Bolivia’s economic crisis was one of the main drivers of the country’s political change, as rising inflation, basic product shortages and a surging black market for fuel and foreign currency fed discontent against the ruling Movement Towards Socialism (MAS) party, which in August lost its first presidential election in 20 years.
The winner of that vote, centrist Rodrigo Paz, has inherited macroeconomic imbalances that include large fiscal and trade deficits, with government spending comfortably outpacing tax revenue and imports also exceeding exports.
Shortly after taking office, Paz’s top economic appointments signalled their plans to tackle both issues: Economy Minister José Gabriel Espinoza promised to slash fiscal spending by 30% in next year’s budget. Meanwhile, new Central Bank Chairman David Espinoza said the country’s fixed exchange rate model was “a mistake” that “led to all of the economic consequences that we are facing.”
But in terms of actual economic action, Paz’s initial moves have focused on buying time rather than addressing these matters, touring multilateral credit organizations in order to raise more debt and resorting to “buy now, pay later” schemes to resume fuel imports into the country.
👉 Why it matters. Fiscal and monetary reforms would not be painless, and officials have stated that they need to proceed with caution in order to minimize damage to Bolivia’s most vulnerable sectors. While many Bolivian economists call for cuts in fuel subsidies, their effect on food and transportation costs would be significant — and scrapping the currency peg would also create a short-term spike in inflation.
But inaction is also a massive risk, as Bolivia’s subsidies are the second-largest in the region — only behind Venezuela relative to the country’s GDP — and amount to roughly half of its spiralling fiscal deficit, which is one of the continent’s largest. Policymakers also point to their regressive impact, as “over half of subsidy transfers benefit the wealthiest quintile, with only 7 percent reaching the poorest households,” according to a recent IMF report.
The promise of economic reforms has halted a run against the currency in black markets, where the Boliviano strengthened from BOB 18 per USD in May (at the height of MAS’s political and economic crisis) to BOB 10 per USD since Paz’s inauguration. Despite that improvement, the currency is still trading far from its official price of BOB 6.91 per USD, a sign that the status quo is still seen as unsustainable.
In a sign of goodwill towards the country’s business sector, Paz also filed a congressional bill this week eliminating four taxes, including a special wealth tax introduced in 2021, a 0.3% surcharge on all banking transactions, a gambling tax and more.
The government said they brought in very little revenue, discouraged saving and investing within the country, and added excessive bureaucratic waste. But critics argued that the cuts were a favor to businessman and former presidential candidate Samuel Doria Medina, one of the richest men in Bolivia, whose congressional votes Paz will need to secure his reforms.
QUESTION OF THE WEEK
This week, we brought you up to date on the latest political scuffles in Honduras, but which of these former colonies was once known as British Honduras, until its independence in 1981?
- Antigua and Barbuda
- Belize
- Suriname
- Trinidad and Tobago
QUICK CATCH-UP
⚖️ Peru’s former President Martín Vizcarra was sentenced to 14 years in prison over a corruption scandal dating back to his days as governor of Moquegua. Vizcarra, who ruled in an interim capacity between 2018 and 2020, was also handed a nine-year ban from running for office. The 62-year-old politician said he was sentenced for “confronting a mafia pact,” calling his trial an act of “revenge, not justice.”
🚔 Former Peruvian President Pedro Castillo was also sentenced to 11 years, as courts found him guilty of conspiring against constitutional order when he tried to shut down Congress by decree in 2022. Peruvian analysts described Castillo’s move as a “self-coup” similar to that of autocratic right-winger Alberto Fujimori in 1992.
🤝 In a controversial meeting that could split Chile’s centrist Christian Democratic Party, former President Eduardo Frei (1994-2000) endorsed hard-right candidate José Antonio Kast ahead of Chile’s December 14 runoff. The party leadership denounced Frei, saying his endorsement “goes against our historical values and unrestricted respect for human rights” and reinstated its backing for leftist candidate Jeannete Jara.
✈️ The government of Nicolás Maduro revoked air traffic permissions for multiple airlines that suspended flights to Venezuela after the US Federal Aviation Administration issued warnings about heightened risks in the area. Sanctioned airlines include Iberia, TAP, Avianca, Latam, Turkish and Gol, who were accused by Caracas of siding with “state terrorism promoted by the US.”
⚽ South America’s top club football tournaments are coming to an end, with Argentina’s Lanús beating Brazil’s Atlético Mineiro for the Copa Sudamericana title, the region’s second-most important. The main event will come tomorrow, when Brazilian giants Palmeiras and Flamengo face off in the Copa Libertadores final. The match will be played in Lima’s Estadio Monumental and will determine which club will become Brazil’s first four-time Libertadores champion.