Latin America News Round-up
                                November 7, 2008

Argentina
House backs Argentine pension bid. BBC

Bolivia
Drugs, unrest and socialism. New Statesman
US encouraged drug trafficking: Bolivian president. AFP

Ecuador
Ecuador changes course, oil co. Repsol YPF to stay. Associated Press

Venezuela
Venezuela, Russia discuss nuclear energy, flights. Associated Press
Venezuela, Russia discuss 46 cooperation projects. Xinhua

Andean Region
Coca Cultivation Up Despite Six Years of Plan Colombia. Inter-Press Service

Southern Cone
Lula demands swift action from Obama with US crisis. MercoPress

México, Central America and the Caribbean
Mexico-US:  Reaching Out to Obama. Inter-Press Service
Educated workers also head north. McClatchy
Mexico: Obama offered U.S. support in anti-drug fight. Associated Press

Region: Trade, Security, Economy and Integration
China Cements Partnership with Latin America. Inter-Press Service


Argentina   [contents]     

House backs Argentine pension bid
Daniel Schweimler. BBC. November 7, 2008
http://news.bbc.co.uk/2/hi/americas/7715002.stm

Argentina's lower house of parliament has approved a government plan to nationalise private pension schemes worth $30bn (£19bn).

President Cristina Fernandez de Kirchner said the move would protect the funds in the face of the global economic crisis.

But the plan faced tough opposition from those who called it a cynical ploy to loot pensioners' money.

It passed the lower house after 14 hours of intense debate.

Protests held

This was a major victory for both the president and the Argentine government, which in the end won the vote more convincingly than many had expected - by 160 to 75.

The move to nationalise private pension funds had faced stiff opposition from a public which simply does not trust the government's intentions and from some members of the president's own party.

A rebellion was feared, like the one which earlier this year saw the government defeated in a major vote over increasing agricultural export taxes.

A second defeat would have been a heavy blow to the president, who says the Argentine economy is strong and she simply wants to protect pension funds in the face of the global economic crisis.

"Other countries," she said, "protect their banks. We protect our pensioners and workers."

Earlier in the day there were large protests outside the congress building, both for and against the plan.

Later this month it goes before the upper house, the Senate, where the government has a majority.

Meanwhile, millions of Argentines with a stake in the pension funds will be watching developments closely.

Bolivia   [contents]     

Drugs, unrest and socialism
Alyssa McDonald. New Statesman. November 7, 2008
http://www.newstatesman.com/south-america/2008/11/bolivia-lazarte-morales

Top Bolivian politician Silvia Lazarte talks about her role in reforming the South American country in the face of bitter internal opposition and US interference

The battle to reform Bolivia faces resistance at every turn

For a politician whose country is wracked by such violent unrest some commentators predict civil war, Bolivia's Silvia Lazarte is surprisingly positive about her nation's prospects - steely, even, in her insistence the outlook is good.

As one of the most senior politicians in the ruling party, MAS (Movimiento al Socialismo, or Movement towards Socialism), Lazarte is understandably keen to emphasise the widespread support enjoyed by Bolivian president, Evo Morales.

At a referendum held in August, she points out, he won 67 per cent of the vote.

But, equally, the division and dispute at the heart of Bolivian politics are clear when she speaks about the government's right wing opposition.

"These are people who never accepted their downfall in the last elections, who don't accept that they were kicked out of power. They were used to being in control and being in power and ignoring the people," she tells me when we meet at the New Statesman's offices in Victoria.

The most recent illustration of the opposition's refusal to submit came on 11 September this year, when at least fifteen people were killed on their way to a pro-government rally in the northern region of Pando.

Bolivia's political polarisation is matched by its shockingly wide poverty gap: despite rich reserves of oil, natural gas and minerals, it is one of Latin America's poorest countries.

Most of the country's resources are concentrated in a few wealthy lowland regions in the east known as the "Half Moon", which are largely populated by a European-descended elite.

However, the majority of the population - about two-thirds - belong to Bolivia's 36 indigenous peoples and live at subsistence level in the country's more mountainous, western regions. The current constitution ignores both women and the indigeous peoples.

So as the president of the Constitutional Assembly, Lazarte's importance to Morales's socialist reforms is clear.

She has led the drafting of the charter - expected to pass into law when it is put to a referendum in January next year.

The new constitution aims to improve the living standards for the indigenous population by redistributing profits from the gas fields in the east of the country.

Like Morales, Lazarte is herself an indigenous Bolivian, and she arrives for interview in full traditional dress: layered skirts, a narrow-brimmed white hat and an almost neon-bright patterned shawl.

For a Brit used to the funereal gloom of Western political fashions, her colourful appearance gives an immediate impression of flamboyance, but in her choice of words, of course, Lazarte is no less calculating than a British cabinet minister would be.

Her comments on the new constitution are unequivocal: "It is inclusive. That is the most important thing about the constitution, that everybody is taken into account," she explains, her expression completely neutral. "The rights of women ... the indigenous, first peoples of Bolivia, all the ethnicities, languages, these are all recognized."

What she glosses over though is the response from the right wing, which has been vehement, sustained and extremely violent: the incident in Pando is only the most recent in a series of anti-government gestures which have erupted repeatedly in the two years since the Assembly was first created. Five of the wealthy regions have also voted for greater autonomy.

However, Lazarte is adamant that the situation has started to improve in recent months. "There really isn't as much division now. We got through this with the formulation of the constitution - the writing of the constitution was everybody's work. The government had their representatives there [on the Assembly] and in congress just like the opposition did."

The MAS government has made several major concessions in order to secure a date for the referendum, including an agreement that the president, Evo Morales, must only seek one more term in office.

Surely this suggests that the opposition has retained its ability to strongarm the government? Lazarte insists not: "the right wing has recently lost a lot of power, it's fighting within itself."

Her view stems from the aftermath of the killings in Pando. Leopoldo Fernandez, Pando's regional governor, has been jailed and stands accused of hiring hitmen to kill farmers on their way to a pro-government rally.

There is also an investigation looking at "the broader network" of regional governors and civic committee members who may have been involved in the killings.

As a result, she says, several suspects appear to have fled: "Branco Marinkovic, who is a key figure in Santa Cruz politics, apparently is no longer in the country, according to the information we have. Ruben Costas, who is the prefecto [regional governor] of Santa Cruz, apparently left, went to his hacienda and is not at large." Lazarte does admit though that there are "a few other groups around the place", such as the Santa Cruz Youth Union, who have been implicated in violence, but as the investigation is ongoing, will not go into further detail.

The US has also waded into this strained relationship. Concerned by Morales' warm relationships with Cuba's Fidel Castro and Venezuela's Hugo Chavez and his support for coca-leaf growers, whose crop is important both culturally and for the Bolivian economy but also provides the raw material from which cocaine is produced, the US has never been supportive of Morales.

In 2005 the then US ambassador warned that if Morales was elected, Bolivia would lose Washington's financial support and goodwill.

Last month his successor, Philip Goldberg, was expelled after holding meetings with opposition politicians including Ruben Costas. Morales accused Goldberg of "seeking the division of Bolivia".

"The US ambassador was constantly meeting up with the right wing," Lazarte claims. "What happened with the ambassador from the United States was that instead of complying with Bolivian law and Bolivian policies, he decided to conspire against the government, and the Bolivian people will not accept that.

"What the Bolivian people don't want are impositions. We don't like it, we never will like it, and we won't allow it."

She claims that, along with Leopoldo Fernandez' arrest, his expulsion was "significant" in weakening the right wing, although Morales clearly didn't feel Goldberg's ejection was enough: just days ago he also suspended the activities of US drug enforcement agency, accusing its agents of working "to conduct political espionage and to fund criminal groups" involved in anti-government protests.

In this context, Lazarte's calm assurances that Bolivia has a united, peaceful future ahead of it - "we are now in a process of consolidation and achieving more consensus every day" - seem less than reliable.

With Fernandez in jail and the US presence in Bolivia weakened, the dangerous minority of right-wingers appears to have been brought under control for the meantime. But it is unlikely that the US will stop meddling in the country's affairs as long as Morales is in power; and how the right wing will behave as the referendum draws closer still remains to be seen.

US encouraged drug trafficking: Bolivian president
AFP. November 6, 2008
http://afp.google.com/article/ALeqM5hJFd_PkWaFSeIzs1lX0o5jLQV_BQ

LA PAZ - Bolivian leader Evo Morales on Thursday accused the US government of encouraging drug-trafficking as he explained his decision to banish the US Drug Enforcement Administration (DEA).

Morales, a staunch opponent of the Washington government, said the staff from the US agency had three months to prepare to leave the country, because "the DEA did not respect the police, or even the (Bolivian) armed forces."

"The worst thing is, it did not fight drug trafficking; It encouraged it," the Bolivian leader said, adding that he had "quite a bit of evidence" backing up his charges.

Presidential Minister Juan Ramon Quintana presented a series of documents and press clippings at a news conference, which he described as "object data" that had influenced Morales' decision to suspend DEA activities last week.

Quintana said Morales was ready to present the evidence to incoming US president Barack Obama "to prove the illegality, abuse and arrogance of the DEA in Bolivia."

Throughout the 1990s, the DEA in Bolivia "bribed police officers, violated human rights, covered up murders, destroyed bridges and roads," said Quintana.

Morales earlier Thursday said that after a 1986 operation in Huanchaca National Park, it was determined that the largest cocaine processing plant "was under DEA protection."

He also charged that the DEA had investigated political and union leaders opposed to neoliberal economic policies, which he said amounted to political persecution.

On Wednesday, he had accused the DEA of shooting and killing Bolivians during their anti-drug operations, including members of the coca farmers' movement.

Morales, Bolivia's first indigenous president, has served as the leader of the Bolivian coca-growers union. The coca plant, from which cocaine is derived, has many uses in traditional Andean culture.

The Bolivian leader announced last Saturday he was suspending the work of the DEA in the impoverished Andean nation, and accused it of having encouraged political unrest that killed 19 people in September.

"From today all the activities of the US DEA are suspended indefinitely," the Bolivian leader had said in the coca-growing region of Chimore, in the central province of Chapare, where he was evaluating efforts to combat drug trafficking.

The DEA has denied Morales' accusations.

US President George W. Bush, in a finding released in September, added Bolivia to a list of countries that have "failed demonstrably" in anti-drugs cooperation.

Ecuador   [contents]     

Ecuador changes course, oil co. Repsol YPF to stay
Associated Press. November 6, 2008
http://www.iht.com/articles/ap/2008/11/07/business/LT-Ecuador-Repsol.php

QUITO - Ecuador said Thursday it has decided not to kick Spanish-Argentine Repsol YPF out of the country after the oil company agreed to change the way it is paid - allowing the government to keep a bigger share of oil income.

In negotiations set up by Spain's government, Repsol agreed to meet all Ecuador's conditions and sign a one-year transition contract in the next few days, Oil Minister Derlis Palacios told a news conference.

Last week, Palacios said Repsol's contract would be terminated because the company refused to accept Ecuador's demand that it be paid a fee for services rather than a share of oil produced.

Repsol's three oil operations produce an average of 50,000 barrels out of Ecuador's daily production of 500,000 barrels of crude.

In the transition contract, Ecuador will raise oil royalties on barrels sold by Repsol from 60 percent to at least 80 percent and lower the state's share of windfall oil profits from 99 percent to 70 percent. Windfall oil profits are earnings on oil sold above prices fixed in company contracts.

Ecuador told five private oil companies in January they must switch to fee-for-services contracts. Only Brazil's state-run Petrobras and China's Andes Petroleum have signed transition contracts, which boost the government's share of oil income and give the two parties a window to continue negotiations.

Revenue from crude oil exports currently makes up 40 percent of Ecuador's national budget.

Repsol spokesman Kristian Rix confirmed that the company has agreed to the contract in principle and told The Associated Press in Spain that the terms are reasonable.

Venezuela   [contents]     

Venezuela, Russia discuss nuclear energy, flights
Rachel Jones. Associated Press. November 6, 2008
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/06/AR2008110602864_pf.html

CARACAS - Venezuelan President Hugo Chavez met with Russian officials on Thursday to discuss bilateral agreements on everything from nuclear energy to direct flights connecting Caracas to Moscow.

Russian Deputy Prime Minister Igor Sechin headed a delegation of business leaders visiting Venezuela to discuss development plans prior to Russian President Dimitri Medvedev's visit later this month.

"On Nov. 26 something historic will happen here," Chavez told state television from the meeting in the presidential palace. "For the first time, a Russian president will visit Venezuela."

Under the socialist leader, Venezuela has strengthened ties with Russia _ purchasing more than $4 billion in weapons since 2005. A Russian naval squadron plans to visit Venezuela for military exercises this month, but both countries have insisted their intentions are peaceful.

"We have the possibility to form an alliance for the peaceful use of nuclear energy," Venezuelan Foreign Minister Nicolas Maduro said Thursday.

He said that the newly planned flight will connect Caracas directly to "the heart of Europe."

Sechin said that Russian aluminum company Rusal plans to build an aluminum-producing plant in Venezuela, and announced that Russia's state-run gas giant Gazprom will soon begin drilling for gas in the Gulf of Venezuela.

"In the coming days we will inaugurate the construction of a platform in the Gulf of Venezuela," Sechin said through an interpreter.

"We can say that our relations are taking on the characteristic of strategic partners," he said.

Chavez's government has said the joint venture with Venezuela's state-run oil company will kick off on Friday in Venezuela's gulf _ home to 27 trillion cubic feet of gas.

Some contracts for the 46 agreements will be signed during the Russian delegation's visit and others upon Medvedev's arrival, Carrizalez said.

The agreements will cover areas including mining, infrastructure, energy, telecommunications, science and technology, space, agriculture, education, and transportation, he said.

Venezuela, Russia discuss 46 cooperation projects
Xinhua. November 7, 2008
http://news.xinhuanet.com/english/2008-11/07/content_10321514.htm

CARACAS - Venezuela and Russia discussed 46 cooperation agreements during the 5th High Level Intergovernmental Commission held here Thursday.

Venezuelan Vice President Ramon Carrizales and Russian Deputy Prime Minister Igor Sechin attended the meeting, which reviewed a series of initiatives to be signed by Venezuelan President Hugo Chavez and Russian President Dimitri Medvedev later this month.

Venezuelan Foreign Minister Nicolas Maduro said after the meeting that "the unipolar world is collapsing and finishing in all aspects, and the alliance with Russia is part of that effort to build a multipolar world."

Projects being discussed include, among others, the creation of a bi-national investment bank, the opening of a direct air route between Caracas and Moscow, the building of an aluminum plant, the construction of a gas platform off the Venezuela coast, plans for automobile production, and Venezuela's acquisition of Russian planes and ships.

The two countries also reached agreements on the development of outer space and the use of nuclear energy. Maduro said the two countries "will develop all what has to do with technology and satellite in the space," and will continue to work at using nuclear energy with peaceful means to generate alternative energy.

Sechin arrived in Venezuela Wednesday to prepare a third meeting within five months between the presidents of the two countries. During the first two occasions in July and September, President Chavez traveled to Russia.

Andean Region   [contents]     

Coca Cultivation Up Despite Six Years of Plan Colombia
Jim Lobe. Inter-Press Service. November 6, 2008
http://ipsnews.net/news.asp?idnews=44610

WASHINGTON - Despite the expenditure of nearly five billion dollars in U.S. military, security, and economic assistance, the cultivation of coca leaf and production of cocaine in Colombia actually increased between 2000 and 2007, according to a major review by the U.S. Congress's independent investigative agency.

In a report released this week by the Government Accountability Office (GAO), investigators found that "Plan Colombia" -- the comprehensive anti-drug scheme initiated under the administration of former President Bill Clinton in 1999 -- has largely failed to achieve its goal of reducing illegal drug production in the Andean nation by at least half by 2007.

While the Plan appears to have reached that goal for opium poppy cultivation and heroin production, the far greater cultivation of coca increased by about 15 percent and cocaine production by about four percent over the six years, according to the report.

The results should prompt a major new assessment of Washington's anti-drug strategy by the incoming administration of President-elect Barack Obama, particularly as it pertains to Colombia and other Andean countries, according to several critics of the Plan.

"The new Congress and administration should take this opportunity to launch a serious debate and establish a realistic drug policy -- one that doesn't expect immediate and dramatic results and that makes the necessary investments in rural development and building strong civilian institutions," said John Walsh, a drug expert at the Washington Office on Latin America (WOLA), a human rights group here that has opposed the disproportionate emphasis under Plan Colombia on military aid and the use of aerial fumigation to wipe out coca crops.

"It should also go without saying at this point that the best-designed and most well-executed programme in Colombia will be for naught if the United States does not finally address cocaine demand here at home," he added.

"This certainly represents an opportunity to re-think a policy that is obviously not working," said Adam Isaacson, a Colombia specialist at the Washington-based think tank, the Centre for International Policy (CIP). "This, combined with the other bad human rights news coming out of Colombia, should inspire a change in direction by the new administration."

He was referring to the dismissal last week of 27 officers, including three generals and 15 who had received training by the U.S., and soldiers accused of summarily executing innocent civilians and dressing up them up as guerrillas in order to claim a high "body count" in the ongoing counter-insurgency campaign against the Revolutionary Armed Forces of Colombia (FARC).

The firings followed a lengthy investigation of a series of incidents that human rights groups insist represent just the tip of the iceberg of a growing scandal. They reportedly resulted in the suspension of U.S. military aid to three army units implicated in the killings, as required under the so-called "Leahy Law," a foreign aid provision named after Senate Appropriations Committee Chairman Patrick Leahy that denies military aid to any foreign military or security unit for which substantial evidence exists of serious human rights abuses.

The firings were followed Tuesday by the resignation of Colombia's U.S.-trained army commander, Gen. Mario Montoya, who also faces serious human rights charges himself.

These events, as well as the GAO report, have so far drawn little attention in Washington due to the presidential election and its immediate aftermath, but they could still have a significant impact once Obama and the new Congress are sworn in Jan. 20.

Obama, like most Democrats, has opposed ratifying the long-pending free trade pact with Colombia due to concerns about worker rights, and particularly the assassination by right-wing death squads of union leaders in Colombia. The burgeoning scandal over civilian executions, as well as the increase in Democratic majorities in Congress, is certain to weigh against the hopes of Colombian President Alvaro Uribe for quick approval.

Moreover, Uribe's perceived preference for Obama's Republican rival, Sen. John McCain -- as underlined by his having been one of the few foreign leaders to have met McCain's running-mate, Gov. Sarah Palin, in New York during the campaign -- is unlikely to endear him to the new administration, according to Isaacson. This despite the fact that Obama's likely choice to direct Latin American affairs in the White House, Dan Restrepo, played a key role in introducing the Colombian president to Democratic leaders earlier this year.

And with Washington facing a serious financial crisis, most analysts believe that Plan Colombia could become a tempting target if Congress moves to cut next year's foreign aid bill. Bogota has been averaging about 700 million dollars for the last few years -- almost all of it from Plan Colombia -- annually in bilateral aid, making it by far the biggest U.S. aid recipient in Latin America and one of the biggest in the world.

Plan Colombia was originally conceived as an anti-drug scheme to halt the importation of cocaine to the United States at its source, so the perception that it has largely failed in its major purpose could resound both in the White House and Capitol Hill.

An estimated 90 percent of cocaine used in the United States comes from Colombia, according to the White House Office of National Drug Control Policy (ONDCP), a strong defender of both military assistance and aerial fumigation.

In an appendix to the GAO report, ONDCP Director John Walters insisted that Plan Colombia had substantially met or exceeded nine of its 10 original goals not covered by the GAO and that the Plan's efforts to maintain security as part of its drug strategy "had fully succeeded".

Indeed, the report noted that the military and security aid components of the plan had indeed "improved (Colombia's) security climate through systematic military and police engagements with illegal armed groups and by degrading these groups' finances." It warned that these gains were "not irreversible" so long as the FARC and other groups remained a threat.

On the other hand, one major finding of the report was that much of the aid earmarked for alternative crop developments for coca farmers is not being used in areas where coca is being grown. "So the end result is that we're spraying massive amounts of herbicides over these peasants in less governed areas, and we're not giving them any other way to support themselves or even provide them basic food security," Isaacson told IPS.

In another report released last week, a consortium of groups, including WOLA, CIP, and the Latin American Working Group called for reallocating the aid under the Plan much more in favour of social and economic development, particularly in rural and relatively ungoverned areas, as opposed to military and security assistance, including aerial fumigation.

From 2000 through 2007, 80 percent of the aid was earmarked for the military and police. For 2008, however, Congress reduced that allocation to 65 percent, with the balance going to economic and social aid. Isaacson, who contributed to the 32-page "A Compass for Colombia Policy" told IPS that economic and social aid should exceed military and police aid beginning in 2009.

The report was initiated last year by the Senate Foreign Relations Committee Chairman and now Vice President-elect, Joseph Biden. Asked for a comment, his office said it had not yet reviewed the report.

Southern Cone   [contents]    
 
Lula demands swift action from Obama with US crisis
MercoPress. November 7, 2008
http://www.mercopress.com/vernoticia.do?id=15121&formato=HTML

US President-elect Barack Obama needs to act swiftly to solve the economic crisis said Brazilian leader Lula da Silva speaking Thursday before the country's Economic Development Council in Brasilia.

President Lula da Silva said that Obama "who has won elections with an unprecedented display of political strength in the history of the US, will have to address immediately the US crisis, he must act swiftly to avoid things getting worse".

Nevertheless he hoped "it won't take longer than one year to solve the crisis", because if the crisis lasts longer, "US citizens will start to blame him for their financial woes".

"Now the blame is on the current administration, not in a year's time, but I think Obama is sufficiently intelligent to act quickly and avoid the crisis from spreading further", said the Brazilian president.

However Lula da Silva was also quoted saying that the worst of the global financial crisis was over and Brazil now needed to prepare for after the crisis.

Economy minister Guido Mantega also underlined that Obama must act fast if he is to avert "a deep recession", although the "critical phase" of the financial crisis is over, "there's light at the end of the tunnel".

Obama is in a similar situation and with the same challenge as President Franklin Roosevelt in 1933 when he took the country in the midst of the depression that begun in 1929, "but Obama has an advantage: the US economy still is not in a full fledged recession; his challenge is how can he recover the US economy, but fast".

President Lula da Silva also said he hoped a G20 meeting of Finance ministers this week in Sao Paulo would help a little to resolve the global financial crisis.

Finance ministers and central bank chiefs from the world's 20 leading economies will meet in Brazil's largest city from Friday to discuss new regulations for the global financial system.

Brazil wants emerging countries to have a bigger role in the governance of global financial institutions.

México, Central America and the Caribbean   [contents]    
 
MEXICO-US:  Reaching Out to Obama
Diego Cevallos. Inter-Press Service. November 6, 2008
http://ipsnews.net/news.asp?idnews=44608

MEXICO CITY - Following President-elect Barack Obama's triumph in the U.S. elections, the Mexican government hopes to enter a new stage in the country's relations with its northern neighbour.

But it will be no easy task, especially considering that Obama has said he is interested in renegotiating the North American Free Trade Agreement (NAFTA), which links the United States, Canada and Mexico, in order to improve its labour and environmental standards.

He also voted for the 2006 Secure Fence Act, which authorised the construction of 700 additional miles (1,100 kilometres) of walls and fences along the lengthy U.S.-Mexican border, although since then he has softened his support for the barrier.

As soon as Obama's victory was confirmed, Mexican President Felipe Calderón invited him to visit the country in the near future. In a letter congratulating the president-elect on behalf of the people and government of Mexico, the conservative Calderón also expressed his desire to begin a "new phase" of bilateral relations.

The election of the Democratic Party candidate opens up "new horizons" for Mexico, but a dose of realism is necessary, because any possible change "will come gradually and will take time," Graciela Pérez, a professor at the Autonomous Metropolitan University (UAM), told IPS.

Mexico is separated from the United States by a 3,200-kilometre border, and trade between the two countries amounts to more than one billion dollars a day, although that figure is shrinking now due to the global financial crisis.

Some seven million undocumented Mexican immigrants live in the United States, and more and more make it into that country every day, despite the fence along large parts of the border.

Mexico and the rest of Latin America have not merited much attention from Obama, but according to Jorge Chabat, an expert with the Centre for. Economic Research and Teaching (CIDE), his historic triumph opens a window of opportunities.

What the Mexican government should do now is present its case to Obama and seek opportunities for dialogue, Chabat said to IPS. He noted that the U.S. president-elect knows very little about Mexico and Latin America in general.

In Pérez's view, however, Obama's "sensible and straightforward" attitude could make it easier to bring about a change in U.S. relations with Mexico.

While relations between the two countries are not at a critical moment, they have been distant and cold since Mexico refused to support the U.S.-led occupation of Iraq in March 2003. There is also constant friction over the United States' use of police force to persecute immigrants.

Pérez believes that Obama's stance against NAFTA and his support of the border fence will be further tempered once he takes office, and that he could shift to "new formulas" through negotiations with the Mexican government.

During his campaign, in reference to NAFTA, Obama declared that the U.S. "should use the hammer of a potential opt-out as leverage to ensure that we actually get labour and environmental standards that are enforced."

The Calderón administration rejected the threat and the possibility of renegotiating or cancelling the trade agreement, in force since 1994. For social activists, however, a revision of NAFTA is just and necessary.

Alejandro Villamar, spokesperson for the Mexican Free Trade Action Network (RMALC), told IPS that Obama's victory is good news for all those who are hoping for a review of NAFTA, as in their opinion the trade deal has only brought trouble.

Article 2205 of the treaty stipulates that a "party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other parties" -- that is, with no other requirement.

At a campaign rally in May, Obama said that Bush's "policy in the Americas (Latin America) has been negligent toward our friends, ineffective with our adversaries, disinterested in the challenges that matter in peoples' lives, and incapable of advancing our interests in the region."

The then presidential hopeful said at the same rally that he supported Mexico's police and military efforts in the war against drug trafficking. On the issue of immigration, he called for keeping the U.S. border heavily secured and requiring employers who hire foreign workers to observe tougher enforcement laws.

However, Obama also said such strong measures would be adopted in the framework of a "comprehensive immigration reform" that would also include "bringing 12 million unauthorised immigrants (the vast majority Mexican) out of the shadows."

Pérez, for his part, said that the election of Obama would enable Mexico and the United States to find new ground for comprehension, as both countries are still weighed down by many biases, differences and interests that prevent them from fully understanding each other.

Mexican Ambassador to the United States Arturo Sarukhan stated that it should be understood that Mexico and Latin America in general are not a "geo-strategic" priority for the United States.

Sarukhan reported that during the U.S. presidential campaign the Mexican embassy contacted the offices of both Obama and his Republican opponent John McCain to "make them aware that maintaining relations with our (Latin American) countries is profitable."

In the ambassador's opinion, the attacks on NAFTA were part of the campaign rhetoric, but it is very unlikely that they will be put into practice.

Educated workers also head north
Alfredo Corchado. McClatchy. November 7, 2008
http://www.miamiherald.com/news/americas/story/760572.html

For years, Mexico's relatively weak economy has pushed thousands of low-wage workers toward the United States. Now, worries about Mexico's long-term direction are pushing highly educated workers on the same path.

The brain drain threatens Mexico's prosperity, but it is creating more jobs in places like Dallas.

"We're permanently losing our best minds and best hands from both the countryside and the urban centers," said Rodolfo Tuiran, Mexico's education undersecretary and a demographic expert. "These people represent a tremendous potential for Mexico's future economic development. Their migration needs to be reversed, or Mexico risks its future."

Juan G. Rolon is part of the exodus.

Living in a place like Dallas never crossed his mind as he was growing up, Rolon said. But after attending an elite Mexican university, he was recruited by a Delaware-based software firm.

Today, a new U.S. citizen and homeowner, he's creating jobs for North Texans as a partner in a Dallas high-tech company formed with former classmates from Mexico. He has no intention of returning to Mexico anytime soon. "I guess you can say that in some way, we're giving up on Mexico," he said.

Today's Mexican immigrants come increasingly from college campuses, including Rolon's alma mater, the prestigious Tech de Monterrey, or Monterrey Institute of Technology, known as Mexico's MIT.

Many of these well-educated immigrants say they're exiling themselves from a country that has failed to close the income and opportunity gap with its wealthy northern neighbor or provide basic security to its population.

The scale of the current brain drain has not been seen since the 1982-86 economic crisis in Mexico, according to U.S. and Mexican studies.

An estimated 14,000 of the 19,000 Mexicans with doctorates live in the United States, many in North Texas, according to the International Organization for Migration, part of a Swiss-based organization that studied the exodus of educated Mexicans to the United States, and the office of Mexico's undersecretary of education.

More than 400 recent graduates of Tech de Monterrey call North Texas home. They join other well-educated and highly trained Mexicans from other top universities.

"It's going from an issue of concern to one of alarm," said Juan Artola, chief of the International Organization for Migration.

"These people represent Mexico's cream of the crop, so their exodus is hurting Mexico."

WORK VISAS

The number of Mexicans making a run for the United States has nearly doubled to an estimated 500,000 a year from 275,000 10 years ago. Nearly half are specialists or professionals, Tuiran said. Many come legally, through special work visas.

Dallas seems to be benefiting from that exodus of talent. A drive along and near North Central Expressway with chef Espartaco "Taco" Borga provides evidence.

There's Taqueria La Paloma, owned by Mexico City native Mario Ramirez near Meadow Road, and Borga's three restaurants, La Duni Latin Cafe on McKinney Avenue and La Duni Latin Kitchen and Baking Studio on Oak Lawn Avenue, and his latest venture, Alo Cenaduria and Piqueos at Knox Avenue. There's Ramir Camu's graphic design office, and Motopia, a new coffee bar at Fitzhugh that's become a magnet for high-end expatriates.

These businesses have two things in common: The owners have college degrees, and they're creating jobs for both Mexicans and Americans.

"Nowadays, Americans are benefiting from both gardeners and engineers coming to the United States," said Jorge Dominguez, professor of Mexican and Latin American politics and economics at Harvard University. "That's a significant shift in migration patterns."

Camu, past president of the Tech de Monterrey local alumni association, said a culture of opportunity that rewards hard work attracts budding entrepreneurs to the United States.

For these young professionals, the free enterprise system works -- particularly when the system is not tainted by state and public monopolies and the patronage that goes with them, as is the case in much of Mexico.

"In Mexico, it's about who you know," Camu said. "In this country, you can actually have an idea, sell it and watch it grow."

ECONOMY GROWING

Paradoxically, Mexico has never looked so promising, at least on paper. The economy is growing, albeit with a few hiccups caused by the reversals in the United States. More students are attending school and graduating. The middle class is growing.

In his visit to Dallas last spring, President Felipe Calderón vowed to create millions of jobs. He said those positions, coupled with Mexico's declining birth rate, might someday stem the flow of immigration, both legal and illegal.

Mexico is trying to reverse the brain drain -- or to at least hang on to the coattails of its sons and daughters.

As part of the Mexicans Abroad Program, a government effort aimed at strengthening ties with Mexican expatriates, the new Red de Talentos (Network of Talents) targets Mexican entrepreneurs. The idea is to encourage investment in Mexico to create jobs there.

"It's difficult to build a country without the brightest minds," explained Carlos Gonzalez Gutierrez, director of the Mexicans Abroad Program. "Our goal is to work with them, remind them that Mexico needs them in order to grow economically and become the country we all strive for."

North Texas newcomers include Maria del Pilar Mendoza, 36, who arrived in Dallas two years ago planning to spend a week taking care of her sister's children.

She soon realized that she was making more in one week as a baby sitter than as a head registered nurse in her hometown of Guadalajara, where she earned $1,300 a month. She now lives in Dallas and works at the Mexican Consulate. She's taking English classes and studying for a state exam to certify her as a nurse in Texas.

"I don't so much feel like I'm giving up on Mexico as much as Mexico has given up on me," Mendoza said. "The country has closed its doors of opportunity to us, so it's goodbye Mexico."

For Rolon and his wife, Fabiola Espronceda, the idea of returning to Mexico is becoming more distant.

A native of the coastal state of Colima, Rolon was raised in Mexico City, speaking English in hopes of someday landing a job with a multinational corporation in Mexico.

He once believed that if only there were a true democracy in Mexico, if only there were a more open economy, if only Mexico were more closely linked to the United States through a free trade agreement, if only there were more jobs and no peso crises -- then Mexican workers would stay home to raise their families and build their country rather than making the journey to the United States.

Now that many of those things have become a reality, the old "if onlys" have been replaced by new ones.

If only jobs in Mexico paid better, if only free trade brought more benefits, if only the political parties weren't always fighting, if only there weren't so many drug killings. And if only there wasn't such a demand in the United States for young, ambitious students like him.

Mexico: Obama offered U.S. support in anti-drug fight
Associated Press. November 7, 2008
http://www.miamiherald.com/news/americas/AP/story/761108.html

MEXICO CITY - Mexican President Felipe Calderón says President-elect Barack Obama has pledged continued support for Mexico's fight against organized crime and drug trafficking.

A statement from the president's office said Calderón called Obama to congratulate him on his election.

The statement said Obama told Calderón on Thursday that he was "conscious of the difficulty of the battle," and offered "decisive" U.S. support.

Calderón has sent thousands of federal police and soldiers throughout Mexico to confront increasingly violent drug cartels that have been fighting turf battles and targeting police.

The U.S. Congress approved $400 million in anti-drug aid for Mexico in June, but the aid has yet to be released.


Region: Trade, Security, Economy and Integration   [contents]   
 
China Cements Partnership with Latin America
Emily Garr. Inter-Press Service. November 6, 2008
http://www.ipsnews.net/news.asp?idnews=44607

WASHINGTON - China's evolving commercial and political affiliations with Latin America and the Caribbean are once again in the spotlight, with the entrance of China to the Inter-American Development Bank (IDB) in late October.

The Inter-American Dialogue recently hosted a panel of experts to discuss these and other recent developments, where David Shambaugh, professor at George Washington University and a leading China expert, concluded that China's intentions are "not negative or clandestine but self-interested".

More than simply diversifying its portfolio of international relationships, China has shattered the status quo of hemispheric relations in the wake of 20th century politics, from presidential visits to trade and investment. In 2007, trade between China and Latin America was more than 13 times what it was in 1995, and totaled 110 billion dollars.

"By almost every conceivable metric...China's relations with Latin America have never been so robust," stated Daniel Erikson of the Inter-American Dialogue, a Washington think tank, in his testimony before the House Committee on Foreign Affairs in June.

China's growing interest in the region was reinforced last month, when the IDB announced that China will become its 22nd donor member. In doing so it commits 350 million dollars to help fund the bank's programmes in the face of the Latin America and the Caribbean's "complex development challenges", according to IDB President Luis Alberto Moreno.

"It is a historic decision that takes China's thriving commercial relationship with our region into the development sphere," he said.

China first submitted an application to become a member state in 1993. Fourteen years later, in March of 2007, negotiations formally began when the U.S. lifted its opposition. After a month-long voting process that ended Oct. 15, China became the third East Asian nation to join the Bank, after Japan (1976) and South Korea (2005).

So why did it take so long for the region's second largest trading partner -- after the U.S. -- to be approved as a donor member to the IDB? While the reason for the delay largely had to do with both the price of entrance and resistance from the U.S. until 2007, the Bank of China's investments appear to be welcomed amidst the onset of economic insecurity worldwide.

Over the 15 years since the country first applied for membership, China has become an increasingly important financial actor on the world stage. China currently has a Gross Domestic Product almost equivalent to that of Latin American and Caribbean countries' entire economy -- 3.3 trillion dollars compared to 3.4 trillion.

The two economies hang in a tight balance between partnership and competition, with political and diplomatic favouritism often tipping the scale. The nuances between partner and competitor have seemed -- at best -- grey until this announcement, which relied on a vote of 26 borrowing member countries that have a slight majority voting power, or 50.02 percent of shares, in the Bank.

While China's political and military alliances have been strengthened with larger countries like Brazil and Venezuela based on China's increased demand for raw materials like soya, iron ore, copper and oil, smaller countries compete with China for labour intensive industries such as electronics and textiles. However, no country, large or small, seems exempt from the fear of their domestic markets being crowded by cheap imports.

Central American countries specifically have lost a competitive edge in recent years, and may harbour angst over China's commercial intentions in the region.

Economic interests aside, Haiti has also been known to question its motives, when the strategic peacemaking arm of China arrived in 2004. Perhaps not coincidentally, Haiti, Honduras and Nicaragua are three of five countries (including Bolivia and Guyana) that are explicitly receiving 125 million dollars in soft loans as part of the 350-million-dollar investment package.

Additionally, 75 million dollars will go to an equity fund directed at small and mid-sized private business, 75 million dollars targets microenterprise (through the Multilateral Investment Fund), and the remaining 75 million will be used as grant funding to strengthen the capacity of municipal governments and private sector institutions.

"China's membership in IDB will provide both sides with a platform and opportunity for increased two-way trade and investment," said China's Ambassador to the United States, Zhou Wenzhong.

"This is a win-win decision that will serve everyone's interest." He also noted that China currently enjoys a "little", though declining, trade surplus with the region.

When asked about the threat that China may pose to the United States on the world stage, Wenzhong responded that "we don't want to compete with the U.S. for anything" and that China favours of harmonious and sustainable development.

China's financial investments in Latin America continue growing, but may be exaggerated in light of the U.S.'s inattention under the present administration. The U.S. still enjoys 30 percent of the shares of the IDB, while China will own a mere .004 percent of overall shares in the Bank. Borrowing member countries maintain ownership of just over half of holdings.

There are 48 member states in the IDB. Collectively, they provide the single largest source of long-term lending for Latin American and the Caribbean. Long-term lending refers to loans that have a maturity date of at least 10 years.

The admission of China into the IDB may represent a shift, from a bona fide competitor in international markets to a veritable partner. Conversely, the vote that took place in October could also have echoed a desperation on the part of emerging economies to keep their heads above water, as the current financial crisis boils to capacity.

As export growth slows and jobs are threatened in China's domestic sphere, the consumption of many Latin American and Caribbean products may decline. And stagnant, if not shrinking, consumption in China's now-slowing economy does not bode well for international markets.

Eyes will now look toward Peru later this month, when the Republic's President Hu Jintao visits Lima for the APEC summit. One thing is certain; China's economic -- and diplomatic -- performance has just become everybody's business.