Latin America News Round-up
July 21, 2011
Mining Firm Agrees to Pay Compensation to Peruvian Farmers
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Brazil and Southern Cone
Brazil Signals Fifth Straight Interest-Rate Increase Might Have Been Last. Bloomberg
Brazil Set To Double Mining Royalties On Iron Ore –Report. Dow Jones
Brazil Fin Min Mantega Says Currency Inflows Now 'Contained'. MNI
Brazil police seek arrests in Amazon killings. AP
Argentina's Top Union Pushing For 40% Minimum-Wage Hike. Dow Jones
Chile Consumer Rights Authority Serves Wal-Mart Lawsuit. Dow Jones
Uruguay economy expands 6.8% in the first quarter and domestic demand, 8.3%. Mercopress
Northern Andean Region
Venezuela court grants parole to Chavez opponent. AP
Venezuela boosts proven natgas reserves by 11.3 tcf. Reuters
Hackers attack Santos, Uribe, and Defense Ministry. Colombia Reports
Indigenous groups demand army and FARC remove bases. Colombia Reports
U.S.-Colombia free trade agreement bad idea for both countries. The Progressive
Western Andean Region
Bolivian department considers marriage equality. Dallas Voice
Ecuador journalists convicted in Correa libel case. BBC
Ecuador Tax Official: Oil Companies Owe $175 Million In Taxes. Dow Jones
12 ex-police found guilty in Ecuador abuses. AFP
UK firm agrees to pay compensation to Peruvian farmers. BBC
Peru’s Humala Will Seek to Renegotiate ‘Harmful’ Gas Deals, Adviser Says. Bloomberg
Peru's Mining Investments Total $2.43 Billion In Jan To May. Dow Jones
Humala picks two moderates for Peru Cabinet. Reuters
Peru moves up to 76th spot for oil and gas investment worldwide. Andina
Mexico, Central America and Caribbean
WTO Sides With Mexico in Tuna Battle With U.S. Wall Street Journal
Ex-mayor of Cancun released as case appears to collapse. Los Angeles Times
The "Disappeared" - New Face of Mexico's Drug War. Inter-Press Service
Guatemala calls for Nato-style regional force. Financial Times
My family progresses, or does it? GlobalPost
Costa Rica: Day 2 Of National Health Strike. Inside Costa Rica
Spunky ex U.S. ambassador, Fernandez meet in the Palace “very discreetly”. Dominican Today
Cuban court to hear jailed American's appeal. AP
Region: Trade, Security, Economy and Integration
Andean presidents to meet in Lima this week. LivingInPeru
House panel votes to defund the OAS. Foreign Policy
House hits foreign aid in late-night markup of foreign-relations bill. The Hill
Role reversal: Latin America taunts U.S. on debt woes. Reuters
Poverty in Latin America: You know it when you see it. The Economist
Brazil and Southern Cone [contents]
Brazil Signals Fifth Straight Interest-Rate Increase Might Have Been Last
Andre Soliani and Matthew Bristow. Bloomberg. July 21, 2011
Brazil’s central bank signaled that a fifth straight increase in borrowing costs may be enough to contain inflation running at a six-year high.
Policy makers, led by central bank President Alexandre Tombini, increased the Selic rate by a quarter point to 12.50 percent yesterday. In a one-sentence statement accompanying the decision, which was expected by all 57 analysts surveyed by Bloomberg, policy makers withdrew a commitment made in April and June to raise rates for a “sufficiently long” period.
Whether policy makers raise rates again this year depends on whether the global economy deteriorates further, helping ease price pressures in Latin America’s biggest economy, analysts from Barclays Plc and Goldman Sachs Group Inc. said. Economists doubt Tombini will succeed in bringing price increases to the 4.5 percent target next year even if he raises the benchmark rate again in August, according to the most-recent bank survey.
“Traders will price in a huge chance that the central bank won’t raise rates in August,” said Marcelo Salomon, chief Brazil economist for Barclays Plc in New York. “If the global situation worsens, this may have been the last increase.”
Salomon expects one more quarter-point rate increase in August, and forecasts consumer prices will rise 5.6 percent next year.
Traders, who correctly predicted yesterday’s move, this morning increased bets that policy makers will hold rates next month. The yield on the interest rate futures contract maturing in January 2012 had its biggest decline in more than two months, dropping 0.03 percentage point to 12.46 percent at 8:07 a.m. in New York.
‘Complexity’
The central bank “removed the language suggesting a prolonged period of rate adjustments, so in a way they are signaling that they could interrupt the cycle in the near term,” said Alberto Ramos, an economist at Goldman Sachs Group Inc. in New York. “They are increasingly attuned to global risk.”
Tombini has repeatedly cited the “complexity” of the global economy as a reason why policy makers need to proceed with caution.
Consumer prices rose 0.10 percent in mid-July, the slowest pace in 11 months, led by declines in food and gasoline costs, the national statistics agency said yesterday. The report surprised analysts, who had forecast a 0.15 percent rise, according to a Bloomberg survey.
The lower-than-expected increase could make the central bank feel “more comfortable” about keeping rates unchanged at 12.50 percent, said Flavio Serrano, senior economist at Espirito Santo Investment Bank in Sao Paulo.
Policy Balance
Still, annual inflation quickened to 6.75 percent in the year through mid-July. Tombini expects annual price rises to start slowing after August. The central bank targets inflation of 4.5 percent, plus or minus two percentage points.
A higher Selic rate may attract more foreign investment, which President Dilma Rousseff’s government blames for a rally in the currency that’s hurting manufacturers.
The real rose to its strongest level since 1999 this month. The currency’s 48 percent advance against the U.S. dollar since the end of 2008 is the best performance among 25 emerging market currencies tracked by Bloomberg.
The real strengthened 0.3 percent to 1.5607 per U.S. dollar at 8.08 a.m. New York time.
Response
Rousseff’s administration is relying on a combination of higher interest rates, budget cuts and curbs on consumer credit to cool demand. The central bank is “very likely” to impose more measures to slow credit expansion, said Enestor Dos Santos, senior Brazil economist for BBVA in Madrid.
Total outstanding credit grew 20 percent in May from a year earlier, led by a 50 percent surge in mortgage credit. In June, the central bank raised its forecast for 2011 credit growth to 15 percent, from its previous forecast of 13 percent.
In December, the central bank raised banks’ reserve requirements to slow credit growth, and in April Finance Minister Guido Mantega doubled to 3 percent the so-called IOF tax on consumer credit.
The measures taken so far haven’t convinced analysts the government has done enough to meet its target for consumer prices.
Inflation expectations for 2012 rose to 5.2 percent, according to a July 15 central bank survey of economists, from 4.5 percent at the start of the year.
By failing to provide investors with clear guidance on its likely next move, the central has left traders free to draw their own conclusions, Andre Perfeito, chief economist at Gradual Investimentos in Sao Paulo, said. This will cause volatility in the interest rate futures market, he added.
“Tomorrow is going to be a busy day,” Perfeito said.
To contact the reporters on this story: Matthew Bristow in Brasilia at mbristow5@bloomberg.net Andre Soliani in Brasilia at asoliani@bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
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Brazil Set To Double Mining Royalties On Iron Ore -Report
Jeff Fick. Dow Jones. July 21, 2011
RIO DE JANEIRO -(Dow Jones)- Brazil is set to double royalty payments on iron ore production as part of an overhaul of the country's mining laws that gives the government a greater stake in natural resource development, the Folha de Sao Paulo newspaper reported in its Wednesday edition.
President Dilma Rousseff is expected to move two laws to Congress next month, which will include a new mining code and regulatory agency as well as changes to mining royalties, Folha said without citing sources for the report. Officials at Brazil's Mines and Energy Ministry weren't immediately available to comment on the report.
The proposed changes would allow the government to capitalize on higher prices for mineral commodities, especially iron ore. Iron ore prices have skyrocketed in recent years, thanks to intense demand from China--the world's largest steelmaker and consumer of iron ore. The proposed changes to royalties for iron ore, one of the country's largest commodity exports, would increase payments to 4% from 2% of sales revenue, Folha said. The law would cap royalty payments at 10% of a company's revenue.
Brazilian mining giant mining giant Vale SA (VALE, VALE5.BR), the world's largest producer and exporter of iron ore, would be hardest hit by the changes. Vale didn't return phone calls seeking comment on the report. Analysts have said that higher mining royalties would affect companies Ebitda, or earnings before interest, taxes, depreciation and amortization.
Shares of local mining companies fell on the report, with Vale declining 0.3% at the open to BRL46.01. Small iron ore producer MMX Mineracao e Metalicos (MMXM3.BR) also slipped 0.2% to BRL8.78 on the report.
Brazil generated about 1.1 billion Brazilian reais ($705 million) in mineral royalties in 2010, with that total expected to rise to BRL1.3 billion this year, Folha reported.
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Brazil Fin Min Mantega Says Currency Inflows Now 'Contained'
Daniel Horch. MNI. July 21, 2011
SAO PAULO (MNI) - Brazil Finance Minister Guido Mantega said Wednesday currency inflows into the country are now "contained," after a spike in recent weeks.
Speaking to journalists following a meeting with President Dilma Rousseff, in response to a question if he was worried about currency inflows, Mantega said "no."
Central Bank figures released earlier Wednesday showed $10.1 billion entered Brazil through July 15, with $7.358 billion entering on a single day: July 11, the first trading day after the Central Bank announced new limits on local banks' long bets on the real.
When confronted with this figure, Mantega explained it as follows:
"It (the currency inflow) was contained. It entered in one day to meet a regulation that the Central Bank began to demand.
"The Central Bank reduced the banks' exposure, and the banks had to raise more (dollars) to fulfill the regulation. The inflow is contained, it is regular, so much so that there has been no change in the exchange rate."
The day before the Central Bank's measure was announced, the real traded at 1.565 to the dollar, and it closed Wednesday trading in Sao Paulo at 1.559.
Commenting on the situation in the world economy, Mantega called it "inevitable" that the U.S. would raise its debt limit and avoid a downgrade.
And in Europe "they will continue managing the situation until they find a solution for Greece and adjacent countries," he said.
As a result he expects "no effect on Brazil" but added, "Brazil is one of the countries with the greatest capacity to confront any consequence of these two situations."
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Brazil police seek arrests in Amazon killings
STAN LEHMAN . AP. July 20, 2011
SAO PAULO -- Police have asked a judge to order the arrest of three men suspected of involvement in the killings of two Amazon activists, authorities said Wednesday.
Jose Claudio Ribeiro da Silva and his wife Maria were gunned down last May near a reserve in the jungle state of Para, where they taught farmers how to use land in a sustainable manner. Para is one of Brazil's most violent and lawless states.
Police spokeswoman Aycha Nunes said that a judge has been asked to issue arrest warrants against Jose Moreira, who allegedly ordered the killings, and the suspected gunmen, his brother Lindon Johnson and Alberto Lopes do Nascimento.
All three are at large she said, and it was not clear when the judge might rule on the request.
Moreira allegedly ordered the killings because the Silvas were opposing the eviction of three families that had occupied his land in the Nova Ipixuna reserve, Nunes said.
Silva's sister Claudelice told the Globo television network's G1 website that there were other motives for the killings.
"There were a lot of people who wanted them dead because they consistently denounced environmental crimes," she said. "Many ranchers, farmers and loggers wanted my brother and his wife to stop bothering them with their denunciations against deforestation and land grabbing."
She said the Silvas reported illegal loggers to police and federal prosecutors and confronted powerful interests that destroy the forest for the quick economic gains to be made from selling timber, or from clearing land to raise cattle or soybeans.
The Catholic Land Pastoral, a watchdog group, says more than 1,150 rural activists have been slain in Brazil over the past 20 years. The killings are mostly carried out by gunmen hired by loggers, ranchers and farmers to silence protests over illegal logging and land rights in the environmentally sensitive region.
The group also has a list of 125 activists whose lives it says are in danger because of their opposition to loggers.
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Argentina's Top Union Pushing For 40% Minimum-Wage Hike
Dow Jones. July 21, 2011
BUENOS AIRES (Dow Jones)--Argentina's most powerful labor union is pushing for a massive rise in the country's minimum wage amid soaring inflation and an election year which has seen lavish spending by the government.
The Confederacion General de Trabajo, or CGT, umbrella labor union, is planning on asking the government for a 40% rise in the minimum wage in upcoming talks, CGT spokesman Juan Carlos Smith said at a press conference Wednesday.
The union will ask for the wage floor to be set at 2,600 pesos ($534) per month during negotiations with the government and business leaders, Smith said.
President Cristina Kirchner increased the minimum wage 23% to ARS1,840 in August 2010.
Inflation, which most private-sector economists said is firmly entrenched above 20%, has become a headache for the business community and investors. Argentina's powerful unions have won wage increases of around 28% so far this year, and rising domestic costs threaten the competitiveness of the country's manufactured exports.
According to the government, June's inflation rate was 9.7%, but nearly all private estimates accuse the government of lowballing the measure and put inflation at double that rate due to high government spending, loose monetary policy, and a booming economy.
According to a report by Torcuato Di Tella University, the median estimate of inflation over the next 12 months is 25%.
The steep wage demands come at a difficult time in relations between the government and the CGT. Kirchner aimed pointed criticism at the CGT in a recent speech, indirectly accusing the CGT of publicly proclaiming that it supports the government, while simultaneously acting to undermine it through protests, strikes and other aggressive tactics.
Kirchner has a complicated relationship with CGT boss Hugo Moyano, courting his political support, but also keeping him at arm's length due to his unpopular strikes and street protests.
Still, the union is continuing to support the president's economic model, Smith said Wednesday.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com
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Chile Consumer Rights Authority Serves Wal-Mart Lawsuit
Anthony Esposito. Dow Jones. July 20, 2011
SANTIAGO -(Dow Jones)- Chile's Sernac consumer rights authority and incoming Economy Minister Pablo Longueira served retailer Wal-Mart Stores Inc.'s (WMT) local unit a class-action lawsuit for irregularities regarding how it reports clients to credit-reporting agency Dicom.
Chileans authorities are particularly keen on tamping down any irregularities in the retail sector, as local department store Empresas La Polar SA (LAPOLAR.SN) is investigated by the government and regulatory authorities for alleged fraud.
Wal-Mart reportedly kept some 11,500 of its in-store credit card clients on Dicom's so-called "blacklist," even after they renegotiated their debt terms.
Being blacklisted on Dicom, as a result of a less-than-perfect credit history, seriously hampers Chileans' chances of landing a job, obtaining a loan or signing rent contracts.
Earlier this week, President Sebastian Pinera shuffled his cabinet and named conservative Senator Longueira to head the Economy Ministry.
Political heavy-weight Longueira, who headed the Independent Democratic Union conservative party from 1998 to 2004, said "Chileans can rest assured that we will defend consumers with a firm hand," according to daily newspaper El Mercurio.
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Uruguay economy expands 6.8% in the first quarter and domestic demand, 8.3%
Mercopress. July 21, 2011
Following on an 8.5% growth rate in 2010, Uruguay’s real GDP continued to expand 6.8% in the first quarter of this year compared with the same period of 2010, according to the Central bank Debt Management Unit.
On a seasonally adjusted basis the level of activity grew 2.3%, over the fourth quarter of 2010, which means 2011 has an inertial “floor” of 4.4%.
In 2011Q1 domestic demand continued underpinning real growth with an increase of 8.3% in consumption and 13.3% in Fixed Investment. As real imports registered a high real growth compared with exports, there was a negative effect of the net sales over the GDP growth.
Construction, Commerce, and Manufacturing sectors were the most dynamic sources of growth. Since then private analysts reviewed upwards their 2011 real growth estimates to 6.3% in June from 5.9% in May, according to the monthly survey published by the Central Bank (CB). For 2012 the analysts foresee an expansion of 4.6%.
During 2011Q1, primary activities increased 2.7% and the inter-annual rate was 4.1%, driven by both livestock production and agriculture. In livestock there was an increase in animals’ weight of live cattle exports plus greater dairy production.
Agriculture was boosted by the good performance of the rice harvest partially offset by a reduction of corn and soybean crops.
Manufacturing increased 2.9% and 3.9% on an inter-annual basis, mainly boosted by the pulp-paper, dairy, and transport equipments sectors.
Additionally, the construction sector posted a new significant increase of 0.8% and 7.2% year to year, boosted by private investment, which offset the fall of construction from public sector.
Commerce, Restaurants, and Hotels recorded a strong growth of 4.4% and 14.9% (inter-annual rate). The performance was sustained on car sales, imported products for intermediate use, and restaurant services.
In contrast, electricity, gas, and water sectors registered a decrease of 12.0% in 2011Q1 and fell 51.4% compared with the same period of 2010. Basically, this result was explained by the higher production of electric power using thermal generation against hydraulic generation due to lack of rain.
On the expenditure side, the increase in the level of activity was explained by the strong growth of domestic demand. Private consumption grew in the first quarter of 2011 at an inter-annual rate of 9.3% explained by an increase in automobile sales and semi-durable consumer goods. Public consumption, in turn, grew only 2.5% in the same period.
Exports of goods and services raised 14.7% in real terms during 2011Q1 pushed by auto parts production and tourist services. Regarding the latter item there was a significant inflow of tourists from Argentina due to the opening of the international bridges shared by Argentina and Uruguay after the resolution of the long pending pulp mills conflict.
Fixed investment increased 13.2% in real terms mainly driven by investment in the private sector (14.8%), in machinery and equipment for the primary sector.
Investment in the public sector rose 5.7% due to the incorporation of machinery and equipment related to an infrastructure project for developing an electrical interconnection with Brazil.
A number of leading indicators confirm that the Uruguayan economy will continue on a positive growth path during the second quarter of 2011.
According to the private think tank Ceres, the level of activity increased 0.1% in April posting a twenty-third consecutive month of growth.
Tax collection in May grew 6.2% in real terms compared with the same year of 2010.
The unemployment rate was 6.6% in April, after tumbling to a record 5.4% in December. In the year ended in April 2011 the average jobless rate was 6.6% which compares positively to the 6.7% in 2010 and 7.3% in 2009. A private analysts’ survey by the CB foresees an increase of 1.9% in labour force for 2011.
Northern Andean Region [contents]
Venezuela court grants parole to Chavez opponent
FABIOLA SANCHEZ. AP. July 21, 2011
CARACAS, Venezuela (AP) — A government opponent was freed on parole Wednesday after a year in prison following President Hugo Chavez's call for clemency for prisoners with health problems.
Alejandro Pena Esclusa, who needs cancer treatment, is awaiting trial on charges of hiding explosives in his home but calls the case bogus and politically motivated. The court's decision to free him came four days after Chavez urged authorities to allow parole or house arrest for inmates with serious ailments.
The president made that appeal shortly before leaving for Cuba on Saturday to undergo his own cancer treatment. Prosecutors have promptly taken up Chavez's request, announcing that authorities are considering granting parole to 54 prisoners for humanitarian reasons.
After being freed from the country's intelligence headquarters in Caracas, Pena told reporters that other "political prisoners" should also go free.
"I want to make a call not to forget them, to keep fighting for all the political prisoners," Pena told reporters.
The government insists that no prisoners are held for their political views, but rather for legitimate crimes.
Pena said he will be required to appear in court every 30 days while awaiting trail and is barred from leaving the country or talking about his case in the news media.
He insisted he is innocent, and said he would meet with his doctor on Thursday to begin cancer treatment. He has said he underwent surgery for prostate cancer one month before his arrest last year and requires additional treatment.
"I should have had treatment that I didn't have done because I was jailed," Pena told the Venezuela television channel Globovision, adding that it was "urgent for me to have that treatment."
Pena was arrested on July 12, 2010, and charged with hiding explosives and weapons in his home. At the time of his arrest, his wife accused authorities of planting the explosives in a drawer of their 8-year-old daughter's desk.
Pena heads Fuerza Solidaria, a small conservative organization that opposes Chavez and other leftist Latin American governments while advocating free-market economics.
Chavez's opponents have been demanding access to medical care for Pena and seven other inmates with health problems, describing them as "political prisoners."
The others include five former police officials who have been sentenced to prison terms ranging from 17 to 30 years for their alleged roles in killings during a protest march that preceded a short-lived 2002 coup against Chavez. The former officials, who insist they are innocent, have ailments ranging from glaucoma to cancer.
Another government opponent, former police official Jose Sanchez, has hypertension and other health problems. He is serving a 19-year sentence for homicide.
Government opponents also cite the high-profile case of Judge Maria Lourdes Afiuni, who has been detained since 2009 for conditionally releasing banker Eligio Cedeno, who was charged with corruption. Chavez had demanded a stiff sentence for Afiuni, but she was granted house arrest earlier this year after she said doctors had detected irregularities in her breasts and bladder.
During a Cabinet meeting Saturday, Chavez said a priest friend had mentioned concerns about the health of some inmates.
"Here in Venezuela there are no political prisoners," Chavez said, adding that what the country does have are some "imprisoned politicians."
Chavez said all prisoners who have shown that they have a serious illness, whether those singled out by the opposition or others, should be granted permission to return home for "all the medical treatment they need."
Associated Press writer Ian James contributed to this report.
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Venezuela boosts proven natgas reserves by 11.3 tcf
Reuters. July 20, 2011
CARACAS, July 20 (Reuters) - Venezuela boosted its proven reserves of natural gas by 11.3 trillion cubic feet (tcf), taking reserves to 195.1 tcf as of the end of 2010, according to the government's gazette circulating on Wednesday.
The gazette did not specify from where the new reserves came.
The OPEC nation last year boosted its gas reserves following a large offshore discovery to be exploited by Italy's ENI SpA (ENI.MI) and Spain's Repsol (REP.MC).
Venezuela has been slow to develop its ample gas reserves because of low prices in its domestic market and limited export capacity due to continual delays in building an export terminal for liquefied natural gas.
It has instead focused mostly on developing its vast reserves of extra-heavy oil in the Orinoco Belt.
OPEC this week said Venezuela surpassed Saudi Arabia as the group's largest holder of crude oil reserves. [ID:nL6E7IJ0QZ]
(Reporting by Eyanir Chinea, writing by Brian Ellsworth; Editing by Dale Hudson)
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Hackers attack Santos, Uribe, and Defense Ministry
Matt Snyder. Colombia Reports. July 21, 2011
The hacker group "Anonymous" on Wednesday took control of the Facebook page of Colombian President Juan Manuel Santos, the Twitter account of ex-President Alvaro Uribe, and caused a shut-down the website for Colombia's Ministry of Defense.
The hackers' offensive took place around 2PM on Colombia's Independence Day.
On Santos' Facebook page, Anonymous posted a link to a YouTube video proclaiming that Colombia was celebrating a "false independence." The video listed what the authors thought was wrong with Colombia. At 5PM, Santos' account was still under control of the hackers, who announced that "surprises" would continue until 6PM.
Santos tweeted that he regretted "the interference on the Facebook account on my name and the messages that have been published from there."
Uribe's Twitter account was similarly hacked and featured a link to the same video as well as a new background featuring the Anonymous logo. Uribe tweeted that "my account has been penetrated by terrorists."
The former president's choice of words led to hundreds of Twitter comments under #uribepenetrado remarking on how Anonymous "had penetrated his flower."
The messages posted by Anonymous on the former president's Twitter page were removed within hours while Uribe called Twitter for help, but the politician failed to replace the background which kept showing the hacker collective's logo.
Anonymous also appears to have hacked or attacked the Ministry of Defense website. An image of the website with an Anonymous logo has been posted on their twitter account and the website of the ministry was down in the afternoon.
Earlier in the day, the presidential website was also down, although Anonymous did not claim an attack on that website.
The hacker collective had announced an "independence offensive" on Tuesday, the day before Colombia celebrated its 201st birthday.
Earlier this year, Anonymous hacked the Colombian Senate's website.
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Indigenous groups demand army and FARC remove bases
Stephen Manker. Colombia Reports. July 21, 2011
Members of indigenous tribes in the southwest of Colombia demanded Wednesday that the government and FARC remove military bases from their territory, reported Spanish press agency EFE Thursday.
The tribes also asked that both the army and FARC resepect international humanitarian law and rejected a proposal from the Colombian army to install a High Mountain battallion in their region.
A demonstration recently occurred in Toribio, a town in the Cauca department that was recently almost completely destroyed after FARC guerrillas attacked the town.
The indigenous groups explained in a statement that the march was meant to "reiterate the need for these actors to dismantle their military bases and camps in indigenous territory, and to stop using civilians for war."
The statement also acknowledged that both groups will not willingly leave the area, and therefore "will require enormous pressure from Colombian civil society."
According to the statement, the Indians, along "with the company of friendly organizations who fight for peace," will soon begin to dismantle the trenches and foundations built on their territories by the national police, army and the FARC.
The UN declaration on Human Rights of Indigenous Peoples states that no military bases may be installed without "effective consultation" with the authorities and communities of indigenous peoples.
On these grounds, the Indians also rejected the installment of a High Mountain Battalion in Toribio, which was announced by President Juan Manuel Santos after the recent FARC attacks.
With the arrival of more than 600 troops in the area, "the government has violated the Constitution," the indigenous say, stating that the additional troops are "useless to protect the civilian population."
The indigenous population in Cauca has also called for "humanitarian dialogues" with the Colombian government and FARC.
"We will send formal invitations to the President of the Republic and the commander of the FARC to set a date for these meetings," reads the document.
They also asked that the FARC immediately halt the recruitment of children as soldiers or informants, the use of landmines and indiscriminate weapons, as well as to have a "respect for autonomy."
The document calls for the government to clarify the orders to destroy the homes of communities from where militants of the FARC have attacked the troops, as happened in several populations of Cauca.
The government should "rebuild Toribio, Corinth and Caldono quick and with dignity." The indigenous groups asked that this be brought forward by the community and through civil proceedings, without military involvement.
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U.S.-Colombia free trade agreement bad idea for both countries
John I. Laun and Cecilia Zarate-Laun. The Progressive. July 21, 2011
In the coming days, the U.S. Congress will be debating a free-trade deal between the United States and Colombia. The agreement, if finalized, will have a negative impact on both countries.
It will not lead to job creation in the United States. Instead, it will cost U.S. jobs, as multinationals will relocate to Colombia in order to avoid paying higher wages here.
But Colombia will not benefit, either.
The elimination of trade barriers to entry of U.S. products will greatly harm Colombia’s working classes. It will decimate the market for a range of products created by peasants, indigenous communities and Afro-Colombians. This will result in an increased exodus from rural areas in a country that already leads the world in internally displaced people, with some 4.5 million displaced persons (nearly 10 percent of Colombia's 46 million population).
Several Colombian industries will be threatened by elimination of import duties. Products made by multinational businesses, which are the real potential beneficiaries of the free trade agreement, will hurt the domestic Colombian manufacturing sector.
And intellectual property provisions will threaten the access to medicinal herbs by members of Colombia's indigenous communities.
Then there’s the labor rights situation in Colombia, a highly dangerous country for trade unionists. Labor leaders in the country will continue to be murdered and threatened. The Obama administration has linked passage of the free trade agreement to greater protection of workers and has promised to attempt to curb employer-controlled “cooperatives” in Colombia, often used as a way to avoid unions. It is doubtful, though, that these proposed measures will show tangible results.
The U.S.-Colombia free trade deal is a bad idea for both nations.
John I. Laun is the president of the Colombia Support Network, and Cecilia Zarate-Laun is the co-founder and director of the organization. They can be reached at pmproj@progressive.org.
Western Andean Region [contents]
Bolivian department considers marriage equality
Dallas Voice. July 19, 2011
While several countries in South America have already embraced marriage equality, Bolivia may be following the U.S. piecemeal model. Legislation has been proposed in one departmental (state) legislature to legalize same-sex marriage.
According to the Bolivian newspaper Los Tiempos, a group of LGBT nonprofit groups presented a proposal to the Cochabamba Departmental Assembly to include same-sex marriage in the state’s Autonomy Statute.
Marco Carrillo, the chairman of the committee that drafts such legislation, is analyzing whether this issue can be determined locally or must be done nationally.
“They are proposing the recognition of same-sex unions and out of that also arises the question of recognition of accumulation of future assets and social benefits,” Carrillo said.
Bolivia is divided into nine departments. Cochabamba is centrally located in the country. Its capital, also called Cochabamba, is the fourth-largest city in Bolivia with a metropolitan population of more than 1 million.
Among other South American countries, Argentina has marriage equality, while Brazil, Ecuador and Uruguay recognize civil unions.
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Ecuador journalists convicted in Correa libel case
BBC. July 21, 2011
A judge in Ecuador has sentenced three executives and a former columnist from the main opposition newspaper to jail for libelling President Rafael Correa.
The libel action was brought by Mr Correa after El Universo published an article questioning an army raid to rescue him from striking policemen.
Convicted columnist Emilio Palacio called the sentence "a barbarity".
The men were each sentenced to three years in prison and fined a total of $30m (£18m).
An additional $10m (£6m) fine was slapped on the newspaper by the court in the coastal city of Guayaquil.
"We will immediately ask for the ruling to be annulled and at the same time we will appeal it," Mr Palacio told Radio Sonorama.
"With an appeal we will go to a second instance and there is still a third instance."
Mr Correa welcomed the court ruling "with great happiness because it is a historic moment", his lawyer Alembert Vera said.
"From now on any citizen can demand that their good name and honour be respected, which is true freedom of expression," Mr Vera added.
Ecuador's President Rafael Correa (file image) President Correa turned down an offer of an out-of-court settlement
Mr Correa was rescued by the Ecuadorean army last October during a violent protest in the capital Quito by police officers over cuts to their benefits.
He was tear-gassed by his own police force and then trapped inside a police hospital surrounded by protesting officers for more than 12 hours.
Several people were killed or injured in the unrest, which Mr Correa insisted was a coup attempt.
In an article published in El Universo in February, Mr Palacio referred to Mr Correa as "the dictator" and said the president had ordered soldiers to fire on the hospital.
The paper later tried to reach an out-of-court settlement and offered to print a correction, but Mr Correa turned both down.
The libel case has been criticised by press freedom groups as part of an effort to muzzle the media in Ecuador.
Mr Correa has accused much of the independent press in his country of being corrupt and of manipulating the truth.
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Ecuador Tax Official: Oil Companies Owe $175 Million In Taxes
Mercedes Alvaro. Dow Jones. July 20, 2011
QUITO -(Dow Jones)- Local and foreign oil companies that had operations in Ecuador for the 2002-2006 period owe the country's revenue service, or SRI, about $175 million in taxes, according to audits conducted by the agency.
Among those companies are Occidental Petroleum Corp. (OXY); Spain's Repsol YPF SA (REP); Brazil's Petroleo Brasileiro (PBR), or Petrobras; Anglo-French company Perenco Corp.; Italy's ENI SpA (E); and China's Andes Petroleum, a shareholder of the Oleoducto de Crudos Pesados Ecuador SA, or OCP.
The OCP is the operator of Ecuador's private heavy crude pipeline, which began operations in 2003.
SRI official Marcelo Leon told Dow Jones Newswires that the audits for the 2002-2006 period show that oil companies paid less than they should have in income taxes.
Officials with OCP in Ecuador said in an email that the company has always respected Ecuadorian laws and has paid all of its taxes.
As companies can appeal the audits, the cases are in local courts.
The process to reach a final decision could take a long time, Leon said.
Occidental left Ecuador in 2006 after the Ecuadorian government seized its fields, claiming the company had broken the terms of its operating contract.
Last year following a long tax dispute, the administration of President Rafael Correa canceled Perenco's oil contracts in Ecuador.
Also last year, Petrobras decided to leave the country after it couldn't reach an agreement with the government to change its contract in Ecuador.
The SRI is carrying out additional audits for 2007, 2008 and 2009.
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12 ex-police found guilty in Ecuador abuses
AFP. July 21, 2011
Twelve police were found guilty of the illegal detention and torture of four people in September 2009, a court said Wednesday.
Six of the accused were found guilty of being the planners of the crime and the rest of being accomplices in carrying it out, the court in Pichinca province said, noting that sentences would be announced in coming days.
Prosecutors said the four people held -- all members of the same family -- were detained without arrest warrants because they were suspected of links to a theft; the four then were tortured in the police station, and one later died, prosecutors said.
At the time of the events, the police were part of an Operational Support Group, set up in 1996 but disbanded in 2009 amid allegation of human rights abuses, human rights activists said.
President Rafael Correa has charged that police being investigated for human rights abuses, aligned with opposition forces, were behind the September 30, 2010 police rebellion in which the president briefly was held against his will. He says the plotters aimed to oust him and murder him.
That uprising left 10 people dead and another 274 injured.
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UK firm agrees to pay compensation to Peruvian farmers
Dan Collyns. BBC. July 20, 2011
A UK-based mining company, Monterrico Metals, has agreed an out-of court settlement to pay an undisclosed amount as compensation to 33 farmers in Peru.
They say they were beaten and tortured by Peruvian police in an incident in 2005.
The farmers accuse the company of complicity.
Monterrico Metals denied the allegations throughout in London's High Court and settled without admitting liability.
What happened in August 2005 was partially recorded in photographs taken by police and security personnel protecting the mine site.
The farmers say they were beaten, threatened, hooded and held captive after being attacked by the police during a march by farmers against the Rio Blanco copper mine, in Piura department, near the border with Ecuador.
Two women were sexually abused and five claimants were shot, one losing an eye.
One protester was shot and bled to death the following day.
'Salutary lesson'
A High Court trial, which was scheduled to begin in October, was to hear from 80 witnesses.
The mine is run by Monterrico, a subsidiary of the Chinese Zijin Mining Group.
As part of the out-of-court settlement, Monterrico Metals imposed a gagging order on the amount of the compensation payouts to the 33 Peruvian farmers and Leigh Day, the British legal firm which represented them.
One of Leigh Day's partners, Richard Meeran, said it had been a costly exercise for Monterrico Metals.
"Our clients suffered deplorable mistreatment and were denied justice in Peru," said Mr Meeran.
"This constitutes a salutary lesson for multinationals operating in developing countries," he said.
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Peru’s Humala Will Seek to Renegotiate ‘Harmful’ Gas Deals, Adviser Says
Alex Emery. Bloomberg. July 20, 2011
Peruvian President-elect Ollanta Humala plans to renegotiate gas contracts deemed “harmful” to the country’s interests, his chief energy adviser said.
Humala may also force gas companies including Hunt Oil Co. to cut exports to Mexico if they can’t meet rising local demand from power plants and petrochemical projects led by Orica Ltd. (ORI), advisor Carlos Herrera said today in a telephone interview.
“There were a lot of shady contracts that were negotiated under the table,” Herrera, a former energy minister under President Valentin Paniagua, said from Lima. “The government will allow exports only if the concessionaires make an effort to find more gas reserves.”
Energy and mining stocks plummeted after former army rebel Humala won the June 5 election on concern he would enact earlier pledges to rewrite oil and mining contracts and halt gas exports. The government will seek investment in gas pipelines and petrochemicals on the south coast, Humala said June 9.
Humala is expected to appoint Herrera as his energy minister today, Lima-based daily La Republica reported today.
To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net;
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.
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Peru's Mining Investments Total $2.43 Billion In Jan To May
Ryan Dube. Dow Jones. July 20, 2011
LIMA -(Dow Jones)- Mining companies in Peru invested $2.43 billion in the first five months of 2011, up 68% compared to the same period last year, the government said.
The investments were made during Peru's presidential campaign that resulted in the June 5 election of left-leaning nationalist Ollanta Humala. Investors have expressed concern that Humala's proposals to increase the state's role in the economy and raise taxes on miners could curb private investments.
In the January to May period, miners spent $416 million on preparation activities for projects, $398 million on mining equipment, $350 million on processing plant equipment, $331 million production and $311 million on infrastructure, the Mines and Energy Ministry said in a release on Wednesday.
Cuzco region had investments of $394 million, representing 16.2% of the sector's total expenditures in the period. It was followed by Apurimac at $390 million, Cajamarca at $373 million and Ancash at $277 million.
Companies investing in the sector include Xstrata PLC (XTA.LN), which has the Tintaya mine and the Antapaccay and Las Bambas projects in southern Peru. Xstrata's investments accounted for more than 30% of the overall investments during the period, the ministry said.
Gold producer Minera Yanacocha accounted for 10.2% of the sector investments, while Compania Minera Antamina SA invested 8.1%.
Peru is the world's largest producer of silver and a large-scale miner of copper, gold, zinc and other minerals.
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Humala picks two moderates for Peru Cabinet
Reuters. July 21, 2011
LIMA, July 20 (Reuters) - Peruvian President-elect Ollanta Humala picked moderates on Wednesday to fill two major Cabinet posts as he tries to reassure investors he will govern as a centrist in one of the world's fastest-growing economies.
The appointments burnish the pragmatic image Humala sought to project during the campaign, in which he convinced many voters he had shed his radical past and strident opposition to foreign investment, private capital and free trade.
Humala, speaking on local television, said his closest adviser, Salomon Lerner, a wealthy businessman who ran his campaign, would lead the Cabinet as prime minister.
The president-elect's press office also said via Twitter that orthodox economist Luis Miguel Castilla was chosen to be finance minister -- rounding out Humala's economic team after he said on Sunday he would reappoint conservative central bank chief Julio Velarde, who is praised by Wall Street, to another five-year term.
Castilla was until Friday the deputy finance minister in current President Alan Garcia's government and is associated with the country's free-market economic model.
On Thursday, Humala is expected to name another centrist, Carlos Herrera, as minister of mines and energy. Herrera, an engineer, held the same post in former President Valentin Paniagua's government. Herrera has indicated natural gas prices need to be reviewed at a time when exports of the fuel have angered voters who want to see domestic consumption made a priority.
Peru is one of the world's top minerals exporters. Foreign companies have pledged $50 billion in mining and oil investments for the next decade in Peru, but conflicts between companies and rural communities over environmental issues have delayed many projects and worried investors.
While Humala's picks could please investors, he risks alienating hard-liners among his core supporters. They complain that free-market policies have caused a surge in growth over the past two decades but left behind a third of Peruvians mired in poverty.
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Peru moves up to 76th spot for oil and gas investment worldwide
Andina. July 21, 2011
Peru is ranked as 76th place in the world for oil and gas investment, a remarkable progress compared to the 85th place obtained a year ago, according to the opinions of international petroleum executives and managers in the Global Petroleum Survey 2011 released this week by the Fraser Institute.
In 2010 Peru was ranked 85th out of 133 countries surveyed, but, this year it was ranked 76th out of 136 countries.
The Fraser Institute reported that Peru has a favorable investment climate for oil and gas investment fueled by the adoption of rules and laws which provide stability and confidence to investors.
It stated that regulatory institutions are constantly monitoring policies pursued by other countries in order to attract and improve investments.
Peru registered investmtns worth US$6.2 billion to explore and produce hydrocarbons in the 2006-2011 period, 290 percent up compared to the number registered in the previous period (2001-2005).
Mississippi, in the United States, vaulted into the top spot in the world for oil and gas investment, according to the Global Petroleum Survey 2011.
Along with Mississippi, American states dominated the top 10, with Ohio finishing second overall, followed by Kansas (third), Oklahoma (fourth), Texas (fifth), West Virginia (sixth), Alabama (eighth) and North Dakota (10th).
The Global Petroleum Survey is administered each year to petroleum industry executives to help measure and rank the barriers to investment of oil- and gas-producing regions. A total of 502 respondents completed the survey questionnaire this year, providing sufficient data to evaluate 136 jurisdictions.
The exploration and development budgets of participating companies account for more than 60% of the annual spending on petroleum exploration and production among international oil companies.
Globally, the top 10 most attractive jurisdictions in this year's survey are: Mississippi, Ohio, Kansas, Oklahoma, Texas, West Virginia, Netherlands-North Sea, Alabama, Hungary and North Dakota.
The least attractive jurisdictions are: Venezuela, Ecuador, Bolivia, Iran, Kazakhstan, Uzbekistan, Democratic Republic of Congo (Kinshasa), Iraq, Libya, and Russia.
Mexico, Central America and Caribbean [contents]
WTO Sides With Mexico in Tuna Battle With U.S.
JEAN GUERRERO. Wall Street Journal. July 20, 2011
MEXICO CITY—The World Trade Organization has sided with Mexico in a two-decade long trade battle with the U.S. over whether Mexico's tuna fish is "dolphin safe," Mexican officials said Tuesday.
The U.S. can appeal the decision, taken this month, but the ruling means Mexico is likely to win the appeal by September, Mexico's National Aquaculture and Fishing Commission said.
The ruling, which had not been made public until Tuesday, brings Mexico one step closer to being able to export yellow-fin tuna again after the U.S. essentially barred imports in 1991.
Since 1991, Mexico's tuna exports to the U.S. have been limited because the U.S. Commerce Department won't label Mexican tuna as dolphin-safe. But Mexico maintains that although its tuna-catching practices and regulations aren't as strict as those in the U.S., they do meet international standards.
Nkenge Harmon, a spokeswoman for the U.S. Trade Representative's office, confirmed that the WTO dispute panel had ruled on the case, but that the report remained confidential.
"The United States will continue to vigorously pursue the objectives of the dolphin-safe labeling provisions," said Ms. Harmon, adding that the labeling restrictions protect dolphins and provide transparency to consumers.
Both the U.S. and Mexico require onboard inspectors on their tuna vessels during fishing trips and are members of the Inter-American Tropical Tuna Commission, which helps enforce international dolphin-protection standards. But unlike in the U.S., Mexican fleets catch tuna by locating and encircling dolphins, with which yellow-fin tuna often swim. The practice can lead to dolphin deaths.
Environmentalists in Mexico have said large U.S. tuna companies like StarKist and Bumble Bee won't buy tuna that was caught in association with dolphins, which means that even if Mexico can use the "dolphin-safe" label, the country's tuna won't make much headway in the U.S. market.
"It's more of a political and a trade issue than it is an environmental issue," said Alejandro Olivera, coordinator of the Oceans Campaign for Greenpeace Mexico. Mr. Olivera said information regarding diminishing populations of tuna in the Pacific has led Greenpeace Mexico to become concerned about the overfishing of tuna rather than that of dolphins.
—Laurence Iliff in Mexico City and Tom Barkley in Washington contributed to this article.
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Ex-mayor of Cancun released as case appears to collapse
Tracy Wilkinson. Los Angeles Times. July 21, 2011
Reporting from Mexico City—
Yet another high-profile drug-prosecution case in Mexico careened toward collapse Wednesday when federal officials were forced to release the former mayor of Cancun, arrested 14 months ago for allegedly consorting with violent cartels.
Gregorio "Greg" Sanchez, toting a red Bible, walked out of a jail cell into the summer light around midday and proclaimed, again, his innocence.
But federal prosecutors said they planned to charge him with the smuggling of undocumented Cubans. Cancun is the piece of Mexican territory that juts out closest to Cuba.
And in a novelty for Mexico, federal authorities ordered Sanchez to wear an electronic ankle bracelet so they could track his movements.
That was necessary, said the head of the attorney general's organized crime unit, Patricia Bugarin, because prosecutors could not immediately find a judge willing to issue an arrest warrant for Sanchez on the new charges. Several judges declined for jurisdictional reasons, and a higher court that could have decided the matter is on summer vacation.
Last week, a judge dismissed the drug-trafficking and money-laundering charges against Sanchez and ordered him freed.
Bugarin said federal prosecutors continued to investigate drug-trafficking allegations against Sanchez and might charge him again.
Some observers see the attempted prosecution as political persecution. Sanchez was arrested in May 2010 as he campaigned for governor of his state for the leftist Democratic Revolution Party, an opposition force.
"This is all a juridical hoax," the party's president, Jesus Zambrano, said Wednesday.
Last month, authorities arrested the powerful former mayor of Tijuana, Jorge Hank Rhon, on weapons and drug-trafficking charges but released him days later.
wilkinson@latimes.com
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The "Disappeared" - New Face of Mexico's Drug War
Daniela Pastrana. Inter-Press Service. July 19, 2011
MONTERREY, Mexico, Jul 19, 2011 (IPS) - Chess player Roberto Galván, 33, was detained Jan. 25 by the police in the northeast Mexican state of Nuevo León as he sat on a bench in the central square of General Terán, a town 100 km from Monterrey. No one has seen him since.
The police did not register the arrest, which many people witnessed, and only admitted that they had detained him after Galván's father pressured them. But they said that after he was questioned – although no reason for the questioning has been given – they dropped him off at a bus station.
"The only thing that is clear is that since the Nuevo León traffic police detained him, my son has been missing," the father, who is also named Roberto Galván, told IPS.
Something similar happened to the family of Jeiu Abraham Sepúlveda, 24, who was taken into custody by the municipal police on Nov. 12, 2010 for committing a parking violation on a street in Monterrey, the state's industrial capital.
When his wife called his cell-phone, Sepúlveda said he was being held at a municipal police station and that they would not let him make phone calls. He never answered his phone again.
His family spent three days visiting police stations, until a municipal police chief informed them that federal agents had handed him over to the navy. A video recording confirmed that the day he was arrested, Sepúlveda left the station in handcuffs, escorted by the federal police.
Only then did the police and navy admit that he had been detained. But they claimed he was released later that day, and left in a taxi.
Sepúlveda worked for a construction company, and had a five-month-old daughter.
"Why did they take him to the station instead of giving him a fine?" asks Verónica Sepúlveda, his older sister. "Why wasn't he turned over to the judge? Why was he taken to naval installations? Why did the federal police who took him tell our lawyer a few days later that he was ok? Why isn't there any record of the detention anywhere?
"I feel furious and impotent; if they're supposed to be the ones protecting us, then who do I have to watch out for?" asks his sister, whose main focus in life has become the search for her brother. "They didn't just kidnap him, they kidnapped an entire family. We are a family of eight brothers and sisters, and we only get together now to talk about the same thing," she tells IPS disconsolately.
The issue of forced displacement has been put on the public agenda by the Movement for Peace and Justice with Dignity led by writer Javier Sicilia, which is opposed to the militarisation of the fight against the drug cartels declared by conservative President Felipe Calderón shortly after he took office in December 2006.
There are no official figures on this aspect of the spiralling violence in Mexico. The only institution that gives a clue to its scope is the National Human Rights Commission, an independent government body, which reported in April that it had received 5,397 reports of people who have gone missing since the start of the Calderón administration, and that nearly 9,000 dead bodies have never been identified.
But non-governmental organisations (NGOs) say the actual number of victims of forced disappearance could be as high as 18,000.
Many disappearances occur in front of witnesses. Hooded, armed men seize the victims from their homes or on the street. In some of the cases, the missing person has been taken away by the police, the army or the navy.
The United Nations Working Group on Enforced or Involuntary Disappearances stated in a preliminary report published Mar. 31 that more than 3,000 people were possible victims of involuntary disappearance since 2006 in Mexico
The Working Group asked the government to create a database and protocol for the search for missing persons.
An NGOs report to the Working Group states that unlike in the past, the people who go missing these days in Mexico are not social or political activists, but are suspected by government security forces of belonging to criminal organisations, or were caught up in the middle of military or police operations and subsequently disappeared.
Their families have put their lives on hold to make an endless round of police stations and offices, looking through files and photographs, combing the streets and holding protests. Along the way, they run across many other people in a similar situation.
Julia Alonso has repeatedly made the 1,300-km trip from the Pacific coast resort city of Acapulco in the south to Monterrey in the north in search of her youngest son, Julio Alberto López, who disappeared in January 2008 with three other youngsters.
López, who lived in Acapulco, was on vacation in Monterrey when he disappeared. His parents searched the area where he was last seen, reported his disappearance to the police, discovered that the four youngsters had been taken away by men in police uniforms, and took out a large ad in newspapers, addressed to the president. But no one has heard a thing about their son and the others who were taken away with him.
The problem for those who are searching for missing loved ones is that nothing is done to record information that could lead to the identification of unidentified bodies, in a country where an estimated 40,000 lives have been lost in the "war on drugs" since 2006, according to news outlets and social organisations.
The government says only one percent of the civilians killed in the vortex of violence are "innocent victims." But local and international studies and investigations and the personal accounts collected by the peace movement led by Sicilia indicate that not only drug cartels are behind the disappearances and killings.
In Mexico there is no protocol for collecting information on missing persons, or for medical examiners to register information. Each state has its own system for identifying bodies, and neither fingerprints nor dental X-rays nor DNA samples are taken. The dead are simply buried as John or Jane Doe.
According to the most recent official statistics, since 2006 more than 150 clandestine mass graves have been found in 22 of Mexico's 32 states, holding a combined total of 712 corpses of people presumably killed by drug cartels.
The recommendations of international bodies on collecting forensic evidence include dealing with human remains in a respectful and dignified manner.
But in the northwest state of Durango, for example, where more than 200 bodies have been found in the last three months, the exhumations have been done with a power shovel.
On Jul. 7, Javier Sicilia and former Mexico City ombudsman Emilio Álvarez presented files on 13 documented cases of disappearances to the Nuevo León chief prosecutor. After a meeting that lasted hours, the activists and relatives of the missing came out with long faces and the promise of another meeting, on Aug. 10.
"There will be no quick or easy solution, but we have to keep pushing," Álvarez told the families. "We can't let them hurt us further; they have already hurt us enough."
The families have not given up hope. "I will not stop or rest until I have an answer," Julia Alonso told IPS. "Nor am I going to hide. If this (the victims' movement) can bring an end to the killings of young people in this country, I will be happy." (END)
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Guatemala calls for Nato-style regional force
Adam Thomson. Financial Times. July 21, 2011
Central American nations straining to contain the threat from violent and well-armed drugs cartels should push for the creation of a regional Nato-style military force, Guatemala’s president has said.
In an interview with the Financial Times, centre-left President Álvaro Colom insisted that only a significant improvement in security intelligence combined with a regional project to combine military strength would rid Central America of the vicious gangs.
His comments come as Guatemala battles against increasingly sophisticated and well-funded drug cartels, which have proved more than a match for the country’s depleted security forces and have undermined governability in Central America’s most populous country.
In a sign of how far the drugs-related violence has penetrated society, a well-known Argentine singer on tour in Guatemala was gunned down this month in the centre of the capital. Mr Colom said that drug gangs were behind the shooting of Facundo Cabral, who was adored by generations of music lovers from Mexico City to Santiago de Chile.
Mexican cartels, displaced by that country’s crackdown on organised crime, have muscled in on local Guatemalan drug routes. The Zetas, originally enforcers for Mexico’s notorious Gulf cartel but now a crime organisation in their own right, have overtaken parts of Guatemala’s Petén region – about one-third of the national territory – to facilitate cocaine smuggling from South America to the US.
Guatemala police stand guard over captured members of the Mexican Zeta drug gang
Guatemala police stand guard over captured members of the Mexican Zeta drug gang
Petén’s thick jungle and low population density provide tailor-made cover for the gangs, which carve clandestine airstrips out of the jungle floor for specially modified planes from South America to drop off the illicit merchandise.
The trade of illicit drugs from South to North America, which some estimate to be worth as much as $40bn a year or about the size of Guatemala’s gross domestic product, has worried regional powers so much that eight Latin American heads of state, together with Hillary Clinton, US secretary of state, met last month in Guatemala to discuss security issues.
Mr Colom, who is now in his final year in office, told the FT that while the region’s governments have learned what sovereignty means, the drug traffickers have not: while they travel through Central America almost at will, the region’s national armies and police forces cannot cross international borders without the permission of each country’s congress.
“What good is it if the forces of one country are pursuing drug traffickers who cross a river but then have to stop to avoid an international incident?” he said. “Why not have a type of Central American Nato?”
As it is, he says, too many security operations are hampered by having to communicate between authorities to solicit and then obtain the appropriate permission. “There are procedures that interrupt operations,” said Mr Colom. “Sometimes it is just a question of minutes but that can make all the difference.”
Mr Colom, who said he was against legalising drugs, added that a regional push to get rid of the drug cartels would only be successful with more funding from consumer countries such as the US.
Guatemala, which Mr Colom estimated is a transit route for 300 tons of cocaine a year – in 2009, its most successful drug intervention year, it seized just nine tons – is currently fighting its drugs war with equipment straight from a war museum. According to Mr Colom, many of the planes and ships that the country depends on date from the second world war.
Meanwhile, the economy, which is still reeling from the effects the global recession, is worth just $41bn. The US, the world’s largest consumer of cocaine, has a GDP about 350 times that.
“Without support of co-responsibility from the consumer markets, this is going to be a permanent war,” he said.
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My family progresses, or does it?
Lomi Kriel. GlobalPost. July 20, 2011
Supporters of Guatemalan presidential candidate and former First Lady Sandra Torres, hold banners as they gather at Constitution square in Guatemala City, on July 17, 2011. The banners read "Work for the people" and "Sandra does fulfill!". (Johan Ordonez/AFP/Getty Images)
Though for decades, Guatemala has had one of the highest rates of chronic malnutrition in the world – one in every two children are stunted – the issue has barely entered the country’s political discourse. Guatemala is the only Latin American country to have failed to decrease its malnutrition rates even as countries with greater income inequality, such as Brazil, or those who are poorer, like Bolivia, made advances.
During his 2007 campaign, President Alvaro Colom pledged to make malnutrition a priority. In addition to food distribution – giving rice, beans, and nutritional supplements to the poorest of the poor -- the government’s strategy focuses on a conditional cash transfer program called “My Family Progresses.” The government pays poor mothers a stipend in exchange for proof that their children are attending school and regularly receiving health check-ups and other preventative services, including growth monitoring, important for identifying and helping malnourished children.
Wildly popular throughout Latin America and the Caribbean, conditional cash transfer programs have generally been viewed as successful: cutting poverty, reducing income inequality, increasing access to educational and health services and, important for policy makers, doing so relatively cheaply.
In Guatemala, however, the program has been mired in criticism, partly due to a lack of transparency and accountability and partly because of Guatemala’s politics and history of corruption.
Colom placed the program under an inter-institutional body not accountable to Congress and chaired by his wife. An astute politician, Sandra Torres has eyed her husband’s seat for years. Critics charged the initiative was a political tactic to reward Colom’s supporters -- who are overwhelmingly rural and indigenous and helped him barely beat his conservative opponent in 2007 -- as well as shore up support for Torres’ inevitable campaign, which she officially declared in May.
Colom is the first left-of-center candidate to rule Guatemala in more than five decades. After attempts at social reforms, particularly land redistribution, the country’s last leftist government was toppled in a U.S.-led coup, catapulting Guatemala into a 36-year-long civil war.
Colom eventually improved the program’s transparency and accountability, but shoddy oversight hasn’t helped its credibility. An investigation last year by one of Guatemala’s biggest newspapers, El Periodico, found many of the identification documents registered in the program belonged to the same individuals. Health workers call the program “The Bar Progresses,” referring to husbands pocketing stipends for alcohol and other frivolities instead of food as intended.
The program has also been blamed for further weakening the already broke Ministries of Health and Education. Over the past two years, Guatemala’s health budget sunk to 1 percent of the gross domestic product because of the global financial crisis, Guatemala’s low tax collection rates, and its skyrocketing population growth. Transferring millions to fund the conditional cash transfer program only added to the crisis.
Critics say additional kids in a classroom hurt rather than help if the budget doesn’t compensate for the increase. The same goes for an already over-burdened health system where many key medications aren’t arriving, some health workers haven’t been paid in months, and many rural communities see a physician only every 30 days. Guatemalan’s health minister has said it would take three times the budget to fund current health needs.
“The health system is really an anemic system,” said Dr. Baudilio Lopez, a project development specialist at the U.S. Agency for International Development (USAID.) “They have almost no resources and the few resources they have aren’t well invested.”
A Mi Familia Progresa spokeswoman didn’t respond to requests for an interview. According to an impact assessment by the Inter-American Development Bank, participating families have higher rates of vaccinations in children younger than two, school enrollment increased by 5 percent, and household consumption increased by up to $8 per adult per month. Its impact on chronic malnutrition remains unknown.
Because of the country’s budget crisis, the future of the program itself also remains unclear. According to figures released last week, it is running short at least $100 million, meaning it could collapse in just two months. Critics said political considerations prevented the program’s dire financial straits from becoming public earlier.
“It’s an irresponsibility of the former first lady, who was running these programs, because for electoral purposes,” the likely collapse wasn’t adequately anticipated, Rosa Maria de Frade, a congresswoman and president of the Legislative Transparency Commissio, told the Guatemalan newspaper Siglo Veintiuno.
Guatemala’s presidential elections are set for September, and Otto Perez Molina, a former head of military intelligence who barely lost to Colom in 2007, is all but assured victory.. In recent polls, his closest opponent was Torres who trailed behind by about 30 percentage points. In late June, electoral officials denied Torres eligibility based on a constitutional clause restricting relatives of the president from running.
Perez Molina, who represents a conservative right-wing party, has said he would continue Mi Familia Progresa, and has vowed it would receive better oversight. What remains to be seen is if a Perez Molina government has the will and capacity to succeed at tax reform, crucial to properly funding the conditional cash transfer program and the education and health ministries on which it relies.
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Costa Rica: Day 2 Of National Health Strike
Inside Costa Rica. July 20, 2011
Today is the second day of the national health strike affecting all state hospitals and clinics, as the two sides are yet willing to sit at the negotiations table. The main point of contention by the worker's union is over cuts in disability pay and benefits.
The union will not give in on this point, while the presidenta of the Caja Costarricense de Seguro Social (CCSS), Ileana Balmaceda, accuses union leaders of being unwilling to reasonable negotiations.
The union wants the disability issue to head the list of any talks, while the CCSS wants to start negotiating the other points leading up to the disability.
Union organizers vow to maintian the stop work until their demands are met and will be stepping up their protests with a major countrywide march for the weekend.
The strike that began Tuesday morning affects general medical care, as well as pharmacy, nursing, laboratory and custodial departments at state hospitals and community clinics known as Ebaís.
The plan by the government and to the opposition of the workers is to cut disability pay by as much as 60%. They now get 100% of the salary.
After the first day of the strike action it hard to believe who is winning, if there is any winner, though the big losers are users of the state medical service.
CCSS officials say that three biggest hospitals in the country: the San Juan de Dios, Calderon Guardia and Mexico in San José, as well as the hospitals in Alajuela, Cartago, Puntarenas and Limón, are well staffed.
However, union organizers say that 90% of the workers have joined the strike.
CSS officials are considering asking the government of Laura Chinchilla to declare the strike illegal.
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Spunky ex U.S. ambassador, Fernandez meet in the Palace “very discreetly”
Dominican Today. July 21, 2011
Ex Hipolito Mejia official Mario Caceres, then ex ambassador Donna Hrinnak, then current U.S. ambassador Hans Hertel, walk down the National Palace. Photo ahora.com.do.
Zoom Picture
Sano Domingo.- Former U.S. ambassador Donna Hrinak met with president Leonel Fernandez in the National Palace Wednesday, but no details were provided by the government.
The ex diplomat is senior director of Latin America government affairs at PepsiCo, Inc., and has also served as U.S. ambassador to Brazil, Venezuela, and Bolivia.
News source diariolibre.com reports that Rhinak arrived “very discreetly in the National Palace and avoided contact with the press.”
Controversy and often vocal disputes with officials and local personalities characterized her diplomatic tenure in the country from 1994 to 1997.
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Cuban court to hear jailed American's appeal
PAUL HAVEN. AP. July 21, 2011
HAVANA -- A hearing before Cuba's Supreme Court on Friday offers jailed American subcontractor Alan Gross a last chance to get his 15-year sentence for sneaking communications equipment onto the island dismissed.
The case of the 62-year-old Maryland native, who has been in jail since his arrest in December 2009, has undermined already faltering efforts at rapprochement between the Cold War enemies. Gross was working on a USAID program meant to foster democracy on the Communist-run island, and Cuba considers such programs subversive, noting that until recently U.S. government literature overtly described their aim as fostering regime change.
American officials say privately they hold little hope of Gross's conviction being thrown out altogether following oral arguments on Friday, but they say the hearing could do something else: clear the way for the Cuban government to release him on humanitarian grounds.
Cuban officials have been quietly telling their American counterparts for months that they are sympathetic to Gross's personal ordeal; he has lost 100 pounds while in jail, his 27-year-old daughter has been diagnosed with breast cancer, his elderly mother is also ailing, his wife is recovering from surgery and the family has been forced to sell their home.
But they have also indicated the legal process must play out before they even consider a presidential pardon or other form of humanitarian release. U.S. consular officials are expected to be present at Friday's hearing, as is Gross's Cuban attorney. Gross's American lawyer, Peter Kahn, issued a statement Wednesday saying his client's wife, Judy, will not be able to attend because she is still recovering from surgery for an undisclosed ailment.
It is not clear when the Cuban high court might rule following the hearing, though the tribunal usually issues decisions within a couple of weeks.
Region: Trade, Security, Economy and Integration [contents]
Andean presidents to meet in Lima this week
LivingInPeru. July 21, 2011
The presidents of Peru, Bolivia, Colombia and Ecuador will meet in the Peruvian capital of Lima later this week for a summit of Andean countries.
Peru’s Alan Garcia, Bolivia’s Evo Morales, Colombia’s Juan Manuel Santos and Ecuador’s Rafael Correa will attend the 18th Meeting of the Andean Presidential Council at the Government Palace on Saturday, July 23.
Colombia will take over the rotating presidency of the Andean Community (CAN) from Bolivia during the summit scheduled to begin at 15:30 hours local time.
A number of preparatory meetings will be held in the days leading up to the Andean Summit, including talks between ministers of trade and foreign affairs.
Representatives from the Andean Integration System, the Latin American Development Bank, the Latin American Reserve Fund and other regional organizations will also attend the gathering.
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House panel votes to defund the OAS
Josh Rogin. Foreign Policy. July 20, 2011
The House Foreign Affairs Committee began its Wednesday markup of the State Department authorization bill by voting to end funding for the Organization of American States (OAS), with Republicans lambasting the organization as an enemy of freedom and democracy.
The one-hour debate over the GOP proposal to cut the entire $48.5 million annual U.S contribution to the OAS is only the beginning of what looks to be a long and contentious debate over the fiscal 2012 State Department and foreign operations authorization bill written by chairwoman Ileana Ros-Lehtinen (R-FL). Democrats accused the Republicans of isolationism and retreat for their proposal, while the Republicans accused the OAS of being an ally of anti-U.S. regimes in Cuba and Venezuela. The OAS Charter was signed in 1948 at a conference led by U.S. Secretary of State George Marshall.
"Let's not continue to fund an organization that's bent on destroying democracy in Latin America," said Rep. Connie Mack (R-FL), the head of the Subcommittee on the Western Hemisphere and the sponsor of the amendment. "You will support an organization that is destroying the dreams of the people of Latin America."
Other GOP members piled on, accusing the OAS of supporting Fidel Castro, Venezuelan President Hugo Chávez, and ousted Honduran President Manuel Zelaya.
"The OAS is an enemy of the U.S. and an enemy to the interests of freedom and security," said Rep. David Rivera (R-FL). He compared U.S. support of the OAS to a scene from the movie Animal House, where a fraternity pledge is being paddled on his rear end and humiliatingly asks for more punishment.
"How much longer will we say to the OAS ‘Please sir, may I have another," Rivera said.
Panel Democrats had a hard time holding back their astonishment and frustration with the GOP for forcing a vote that they argued would signal America's retreat from multilateral engagement around the world.
"I might offer an amendment to pull out of the world, to build a moat around the United States and put a dome over the thing," said Rep. Gary Ackerman (D-NY), sarcastically. "This is getting ridiculous."
"Here we are for a lousy $48 million willing to symbolically turn our backs on our own hemisphere... This is folly. it's more than folly, it's dangerous," Ackerman said. "And you've got the votes to do it, that's the frightening thing. But what we should be looking at are opportunities to reach out to the world."
Ranking Democrat Howard Berman (D-CA) pointed out that the United States has a treaty obligation to pay its dues to the OAS, and argued that the body has made a positive contribution to progress toward democracy since the 1960s.
"The OAS is an enemy? We are really living in two different worlds," Berman said.
Rep. Kendrick Meeks (R-FL) and Gerald Connolly (D-VA) also gave impassioned defenses of the OAS. Meeks praised its help in supporting elections in Haiti, while Connelly made the point that no international organization is going to support U.S. policy at every turn.
But by and large, the two parties couldn't even agree on whether Cuba was a member of the organization. In fact, the organization lifted its ban on Cuban membership in 2009 but stated that the present Cuban government could only join if it adheres to the group's democratic principles.
The defunding amendment passed 22-20 along party lines.
Berman criticized the process Ros-Lehtinen is using to move the bill and said that its provisions restricting foreign aid and the expected amendments would prevent it from gaining traction in the Senate or becoming law.
"Regrettably, I get the sense that what I already consider to be a bad bill is going to get much worse in this markup and on the floor. That will simply ensure that this is a one-house bill," Berman said in his opening statement.
Specifically, Berman criticized the restrictions that Ros-Lehtinen's bill would place on U.S. assistance to Pakistan, notably the $1.5 billion provided by the Kerry-Lugar-Berman aid package.
"On Pakistan, you tie all economic assistance to the certification in Kerry-Lugar that applied to security assistance, toughen the certification, and eliminate the waiver," Berman said. "I agree that we need to get tough with Pakistan on security assistance, but I fundamentally disagree with your approach on economic aid."
Ros-Lehtinen said that her bill would put Islamabad on notice "that it is no longer business as usual" when it comes to the U.S.-Pakistan relationship. She promised that the Pakistani government "will be held to account if they continue to refuse to cooperate with our efforts to eliminate the nuclear black market, destroy the remaining elements of Osama Bin Laden's network, and vigorously pursue our counter-terrorism objectives."
"I think the prospect of a cutoff of assistance will get their attention and that the games being played with our security will finally stop," she said.
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House hits foreign aid in late-night markup of foreign-relations bill
Pete Kasperowicz. The Hill. July 21, 2011
The House Foreign Affairs Committee worked late Wednesday night and into early Thursday morning on the Foreign Relations Authorization Act, and much of the work involved accepting amendments that would significantly limit U.S. foreign aid and improve the transparency of foreign aid programs.
By the time it adjourned at about 2 a.m. Thursday, the committee accepted two amendments that would cut off aid to specific countries. One, from Rep. Connie Mack (R-Fla.), would prohibit the use of funds for any program in Argentina, Venezuela, Nicaragua, Ecuador or Bolivia.
The other, from Rep. Jeff Duncan (R-S.C.), would prohibit any foreign assistance to countries that oppose the U.S. in the United Nations.
The committee reconvened at 9:15 a.m. to consider more amendments, including one from Rep. Dana Rohrabacher (R-Calif.) that would limit assistance to Pakistan, a response to congressional complaints that the nation failed to fully aid the U.S. in finding Osama bin Laden. However, committee members rejected this amendment 5-39.
Last night, the committee accepted two amendments from Rep. Ted Poe (R-Texas). One would require the State Department to publicly list all foreign aid programs, money spent on these programs and other information. Duncan co-sponsored that amendment.
Poe's other amendment would require an evaluation of the effectiveness of these foreign aid programs.
The committee also approved an amendment from Duncan requiring the government to make public a list of companies and other entities that receive U.S. foreign aid.
The committee accepted language from House Foreign Affairs Committee ranking member Howard Berman (D-Calif.) that would set goals for foreign aid programs, such as ending poverty and supporting human rights and democracy.
On Thursday morning, committee members also considered a Berman amendment to strike the so-called Mexico City language in the bill, which prohibits aid to groups that promote or perform abortions overseas. But they rejected his proposal.
After committee passage, the bill would still need to be approved by the entire House.
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Role reversal: Latin America taunts U.S. on debt woes
Brian Winter. Reuters. July 21, 2011
(Reuters) - After three decades spent battling their own debt crises and getting constantly lectured about them by Uncle Sam, many Latin Americans are watching the countdown to a possible default in Washington with a mix of schadenfraude and fear of what a collapse might mean for them.
For everybody from presidents on down to street vendors, seeing U.S. politicians argue over where to make painful budget cuts has also been a reminder that those days are over in Latin America. For now, at least, as most of the region enjoys an era of economic prosperity and comparatively tiny deficits.
In Washington, lawmakers were working feverishly to combine elements of a plan to raise the U.S. debt ceiling with market-pleasing proposals to cut spending. Congress must approve an increase in the $14.3 trillion U.S. debt ceiling by August 2 or the government will run out of money to pay its bills.
"When did the American dream become a nightmare?" gloated Argentina's President Cristina Fernandez, whose own country defaulted on about $100 billion in debt a decade ago.
In a speech at the Buenos Aires Stock Exchange on Monday, she contended that Argentina had prospered since then by focusing on exports and controlling financial speculation -- a lesson that Washington has yet to learn, she said.
The Americans "thought that money just reproduces by itself, and only in the financial sector, without having to produce any goods or services," Fernandez said.
Washington's biggest critics in the region, such as Venezuela's Hugo Chavez and Bolivia's Evo Morales, have also portrayed the crisis as an inevitable outcome for a country that failed to follow its own financial advice and overextended itself militarily -- in Latin America, and elsewhere.
"If they didn't spend money on military bases and keeping troops in other parts of the world, I think the United States could easily resolve its financial crisis," Morales said last week, according to state news agency ABI.
Memories are still fresh of the self-righteous tone that U.S. officials sometimes seemed to take when the shoe was on the other foot. One infamous example: As Argentina spiraled into crisis in 2001, then-U.S. Treasury Secretary Paul O'Neill mocked the country for its debt struggles and said: "They like it that way. Nobody forced them to be what they are."
These days, Latin America's economy as a whole is expected to expand about 4.7 percent in 2011 -- almost twice the expected rate in the United States -- thanks to strong demand for the region's commodities and a decade of mostly prudent fiscal management, itself the product of many hard-learned lessons of the past.
WORRIES CONTAGION COULD SPREAD
It is, in fact, the risk of a U.S. default sparking an old-fashioned financial contagion throughout the Americas -- like the so-called "Tequila Crisis" that spread from Mexico in the 1990s -- that has tempered the triumphalism in some quarters and kept many policymakers up late at night.
Brazil, the region's economic powerhouse, which just a decade ago had to come to Washington to ask the International Monetary Fund for a bailout, is now the United States' fourth-biggest sovereign creditor -- holding about $211 billion in U.S. Treasury securities, according to U.S. data from May.
Brazilian President Dilma Rousseff has met with her team of economic advisers at least four times in the past week, primarily to discuss what a default in the United States or Europe might mean for Brazil, an official told Reuters.
"(Rousseff) starts every day reading the news out of Washington," the official said. "She's fascinated by it."
Even if President Barack Obama and the U.S. Congress manage a last-minute deal to avert a default, as most expect, the role reversal has left many rubbing their eyes in disbelief.
"If you're a survivor of the crises of the 80s and 90s, (this crisis) is unthinkable," wrote Miriam Leitao, one of Brazil's leading columnists, noting that Obama must now confront the kind of issues "that would have seemed like lunacy to us back in the days when they had a monopoly on power."
(Additional reporting by Frank Jack Daniel in Caracas and Hilary Burke and Helen Popper in Buenos Aires; Editing by Todd Benson and Cynthia Osterman)
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Poverty in Latin America: You know it when you see it
The Economist. July 21, 2011
HOW do Latin America’s countries rank in terms of wealth? Whatever answer you have in mind is wrong, according to one measurement or another. Take GDP per capita: as of a few years ago, Brazil has been richer than Mexico. But if you account for purchasing power (that is, the amount of stuff people can buy in their country with the money they earn), Mexico jumps ahead. In Central America, Panama is about to overtake Costa Rica in terms of GDP per head (and already has in purchasing-power terms). But in terms of equality, it lags behind: poor Panamanians are worse off than poor Costa Ricans.
An interesting index published yesterday by Fundación Ethos, a Mexican think-tank, aims to overcome these problems by bundling together a wide range of factors to come up with an overall poverty index. The report (here, in Spanish, but with plenty of easy-to-understand charts) looks at the region’s eight biggest countries, minus Argentina (which was excluded because it doctors its official economic statistics). Chile comes out on top, while Bolivia is at the bottom.
The index takes in 12 different categories, broadly divided into what the authors call “poverty of the home”—things like availability of water and electricity, income and education—and “poverty of the environment”, which includes a broad range of things from the strength of democracy to gender equality. The division throws up some interesting contrasts: whereas Venezuelans are better off than Peruvians and Colombians by the first category of indicators, they fare much worse in the second. Similarly, Mexico beats Brazil on the first measure, but falls behind on the second.
As often with indices like this, there is a question over whether bundling indicators together serves to clarify things or to confuse them. A recent CNN piece (by a former Mexico correspondent of The Economist, no less) makes some good criticisms of this kind of indexing. Does it make sense to say that a country is poorer because it has more plants and animals in danger of extinction, as Fundación Ethos claims? Maybe. But how should one weight the number of rare toads in one country against the independence of the judiciary in another? Can the low representation of women in parliament be cancelled out by a high proportion of homes connected to gas?
Whatever the value of such comparisons, the report is a mine of interesting comparative data. Brazil has the highest proportion of unschooled parents, but the second-lowest (after Chile) of unschooled children, thanks to big recent educational improvements. The average Bolivian lives to be 65 years old; the average Chilean makes it to 78. Venezuela’s murder rate is 16 times higher than Peru’s. Brazil, with a woman president, has the lowest proportion of women in parliament (9%, versus 29% in Peru). Take a look and let us know in the comments what surprised you most.
