Geopolitics

Evolving Populism In Latin America, From Colombia To Mexico

The new presidents of Colombia and Mexico may fit into the populist mould, but their pledges and circumstances differ from those of their most notorious predecessors.

June protest against electoral fraud in Bogota, Colombia
June protest against electoral fraud in Bogota, Colombia
Andrés Hoyos

-Analysis-

BOGOTÁ Colombia's future is never clear, with storm clouds seemingly forever brewing on the horizon. Sure, they'll say that other countries face uncertainty, it's just more extreme here, with never a clue what might come a decade from now.

I am not just talking about prosperous states that have duly established virtuous, working dynamics, but also those mired in misfortune. I am quite sure for example that Haiti will still be in crisis in 10 years' time, and one is almost certain that also Venezuela won't manage to bounce back anytime soon. Chile, Costa Rica and Uruguay meanwhile, just to keep to our region, will have vicissitudes but one doesn't expect exceptional situations there in 2028. Some other countries in the region like Brazil, Argentina and Mexico, are like Colombia in their uncertain futures. In 10 years' time, they could be much better, or much worse off than today.

Javier Sicilia, Mexican peace activist, with President-elect AMLO — Photo: Diálogos por la Paz: AMLO

These countries have dynamic societies and economies, populations with potential and dysfunctional political systems. The uncertainty hovers especially around populism on opposite sides of the political spectrum. Right-wing populism does exist, but the versions on the Left are older and have a longer history.

Classical Latin American populism is a concoction of Argentina's late president Juan Domingo Perón, and an indispensable condition for its implantation was generous national revenues. In 1946, Argentina's public coffers were certainly filled to the brim and used to benefit one sector of the population, without regard for others — or for the sustainability of the model itself. Perón was toppled in 1955 so there was no time for a permanent distortion. A generation later, in Venezuela, Hugo Chávez implemented the model, financing it from 1999 to 2014 with oil revenues to the phenomenal tune of a trillion dollars. Today the country is short of food, medicines and practically everything. Chavismo has lasted for too long and will be remembered for the current debacle, not its years of plenty.

Radical populist, moderate or a mix of the two?

While Colombia's President-Elect Iván Duque will not, as his cabinet choices indicate so far, be a right-wing populist in the manner of his mentor, the former president and Senator Álvaro Uribe, in Mexico, the Leftist Andrés Manuel López Obrador (or AMLO) will become president on December 1 on the back of an overwhelming victory. Needless to say he will not find the state coffers filled as Perón did, nor will he be showered with petrodollars, like Chávez. We do not know what kind of government he will run: radical populist, moderate or a mix of the two? The point of certainty however is that he will not succeed in resolving the problems he promised to solve.

Iván Duque, President-elect of Colombia — Photo: Inter-American Dialogue/

Here, in Colombia, the former socialist presidential candidate Gustavo Petro will seek to remain relevant for the 2022 elections. There are many questions on that horizon: On the one hand Petro now has the probable backing of some political heavyweights and enjoys the support of a big, youthful sector of voters, while the political center has no clear alternative for now. On the other, he depends a lot on how things will turn out up both north with AMLO, and on the quality here of Duque's administration. Will they keep a more or less moderate profile, or return to their respective earlier radicalism? Difficult to say.

Hopefully in any case, the third populist wave will be less harmful than the first two. That too remains a big question.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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