Latin America News Round-up
March 16, 2012
US Says Envoy Exchange With Bolivia to Take Place This Year
For the latest news and developments on Haiti, please see CEPR's blog, "Haiti: Relief and Reconstruction Watch."
For archives of past Round-ups, please click here.
Brazil and Southern Cone
US 'willing to listen' to debate on drug legalization at Summit of the Americas
Brazil launches fresh currency war offensive. Financial Times
Chevron halts Brazil production after new leak. Reuters
Brazil and Mexico end cars battle. Financial Times
Brazil Could Have an Impact by Supporting Sachs' Reform Candidacy for the World Bank. Folha de São Paulo
Argentina: vulture funds may get their money yet. Financial Times
Police in Chile's capital break up student march. AP
Unveiling Canada's Role in Chile’s Environmental and Political Conflicts. Upside Down World
Northern Andean Region
US diplomat hopeful for better relations with Venezuela. AFP
Venezuela to deploy 15,000 troops to borders. AP
Rusoro Expects Venezuela Gold Takeover as Talks Fail. Bloomberg
Venezuela's oil exports to the US down in January and February. El Universal
Colombia oil industry pushes back on tax hikes. Reuters
Journalist assassinated in western Colombia. Colombia Reports
Armed violence on the rise in Colombia – U.N. AlertNet
Western Andean Region
Envoy exchange with Bolivia to take place this year: US. AFP
Bolivia Weighing First International Bond Sale Since 1920s. Bloomberg
Bolivia's President Morales to meet Santos in Colombia. Colombia Reports
Peruvian miners call off protest after 3 die in clashes with police. CNN
Humala Approval Falls First Time in 3 Months, Peru Poll Shows. Bloomberg
Ecuador Jan-Feb Net Tax Collections Rise 37% On Year To $1.74B. Dow Jones
Mexico, Central America and Caribbean
Mothers of Ciudad Juarez Search Everywhere for Missing Daughters. EFE
Honduras seeks to stop U.S. foreign aid cut-off over human rights. AHN
Rights group says Canada a "safer bet" to try accused Guatemalan war criminal. Canada Press
Coke's sentencing in US the talk of Jamaica. AP
Region: Trade, Security, Economy and Integration
US 'willing to listen' to debate on drug legalization at Summit of the Americas. Colombia Reports
Forget the received wisdom: Chinese finance in Latin America is a win-win. The Guardian
Brazil and Southern Cone [contents]
Brazil launches fresh currency war offensive
Samantha Pearson. Financial Times. March 15, 2012
Brazil will no longer “play the fool” and let its currency appreciate while richer nations gain economic advantage by devaluing theirs, its finance minister Guido Mantega, said this week.
It is almost 18 months since Mr Mantega first coined the term “currency war”, but it appears there is no ceasefire in sight. On the contrary, Brazil has embarked on a new offensive to suppress gains in the real. On Monday it extended a tax on foreign loans for the second time this month.
While analysts still predict a long-term appreciation of Brazil’s currency, they believe an arsenal of measures from taxes to interest rate cuts could trap it between R$1.75 and R$1.80 per dollar for most of 2012, diverting investor flows to other Latin American assets.
“The market is beginning to understand that the Brazilian government is willing to pay the price of distortive capital controls and that they are willing to take risks with inflation just to get the foreign exchange rate down,” says Tony Volpon, head of emerging markets research for the Americas at Nomura. “A weaker currency has gone to the top of their priority list.”
Yet the government’s bellicose rhetoric comes at a time when the real is already relatively weak. After hitting a 12-year high against the dollar last July, the real has dropped about 14 per cent, trading at around R$1.80 on Thursday.
One of the main factors behind this depreciation has been a gradual reduction in the real-denominated holdings of Japan’s “Toshin” retail funds. Their exposure has dropped from a peak of $108.65bn in July last year to $90.57bn this month, a decline which Mr Volpon says has broken a traditional correlation with consumer confidence data and which may prove structural.
As such, some suspect Brazil’s recent assault on the currency was politically motivated and prompted by the need to explain economic data this month showing the country’s once China-like rate of growth had slowed abruptly to 2.7 per cent last year.
President Dilma Rousseff has since entered the debate, promising to do the “possible and the impossible” to combat the “monetary tsunami” from richer nations.
The introduction of similarly protectionist measures from Chile to Switzerland over the past 18 months, along with tacit approval for capital controls by the International Monetary Fund, has only strengthened Brazil’s resolve to take action.
“Given the exceptional circumstances, monetary policy became heterodox on a global scale; almost every country is trying to react to measures taken by central banks,” says Antonio Manfredini, an economist at Brazil’s Fundação Getulio Vargas.
The question among traders now is what type of measures could be unleashed next, especially if higher commodity prices push the real towards R$1.70 per dollar, the strongest level the government is expected to tolerate.
Brazil’s high interest rates mean its fixed income market has long been the target of unwanted “hot money” flows, but these declined after the imposition of a 6 per cent IOF transactions tax on bonds and the beginning of an aggressive easing cycle in August.
The problem for the government is that the real now appears to be supported by more desirable flows, mainly foreign direct investment and stock market acquisitions.
However, foreign companies may now be funnelling money through their Brazilian subsidiaries as FDI to buy bonds locally without paying the IOF, says Flavia Cattan-Naslausky, foreign exchange strategist at RBS.
Data from Brazil’s central bank seem to support this theory. In January 2011, foreigners spent $2.65bn on Brazilian bonds, but only $638m in the same month this year. Meanwhile, Brazilians poured $1.19bn more into local bonds this January compared with last year.
Brazil’s decision to extend the 6 per cent IOF on foreign loans to five-year maturities this week could help block some of these flows, which may be disguised as inter-company loans, but analysts say further extensions would cripple smaller companies.
Similarly, a rumoured tax on foreign direct investment is expected to be pushed aside for less-damaging measures such as an increase in the currency derivatives tax.
The relative strength of Brazil’s economy is expected to support the real. But, if the government continues with its new offensive and succeeds in bringing interest rates down to historic lows, investors have said they may move elsewhere in the region.
“I would go back to Mexico where the central bank doesn’t really intervene and Colombia, a smaller market but one with a better sense of directional trade and less volatility,” says Ms Cattan-Naslausky. “There are other more transparent trades you can do with fewer risks.”
Chevron halts Brazil production after new leak
Jeb Blount and Sabrina Lorenzi. Reuters. March 15, 2012
RIO DE JANEIRO (Reuters) - Chevron filed to temporarily halt production operations in Brazil on Thursday after it detected a "small new seep" of oil in the same offshore field where it suffered a high-profile leak in November.
The U.S. oil company said it was taking the step as a precautionary measure to study its "reservoir management plans" in Brazil, where it has spent over $2 billion developing the largest foreign-run oil field.
The announcement came after Chevron and Brazil's petroleum regulator ANP identified a new oil leak in the Frade field off the northeastern coast of Rio de Janeiro where Chevron spilled an estimated 2,400 to 3,000 barrels in November.
The request to suspend output came on the same day that the ANP said it had notified Chevron that it would be fined an undisclosed amount for failing to prevent seepage at the site. Chevron is already facing fines of up to $121 million for the November spill and has had its drilling license suspended in Brazil, one of the world's most promising new oil frontiers.
Chevron said the decision to suspend production at Frade was supported by its partners in the field, Brazilian state oil company Petrobras and Frade Japan, which is controlled by Japan's Inpex. The suspension still has to be approved by Brazilian regulators.
"This decision was taken as a precautionary measure," Rafael Jaen Williamson, Chevron's director of corporate affairs in Brazil, said at a news conference in Rio de Janeiro. He added that he hoped the suspension would only last "a matter of months" and that the decision does not alter Chevron's investment plans in Brazil.
Chevron shares, which were already trading down for the second straight day before the news of the new Brazil leak, slid further. The shares fell as much as 1.1 percent to $109.47, with trading volumes reaching the highest level in three weeks.
The ANP said the oil appeared to be coming from cracks in the ocean floor, not the Chevron well that was sealed following last year's leak. Williamson, the Chevron executive, said there was no evidence that the new leak was caused by drilling or production at the Frade field, which currently produces about 60,000 barrels a day.
The leak was first spotted on March 4, and engineers found the source on March 13, Williamson said. An 800 meter-long crack on the sea floor, only a few millimeters wide, was also found, said Mauro Pagam, an installation engineer with Chevron.
Chevron and rig operator Transocean are being sued for more than $11 billion by Brazilian prosecutors for the November leak, which amounted to less than 0.1 percent of the size of BP's Gulf of Mexico oil spill.
The ANP said on Tuesday that Chevron could win back its drilling rights "within months" if it can convince Brazilian officials it understands exactly what caused the November leak.
(Additional reporting by Reese Ewing, Peter Murphy and Guillermo Parra-Bernal; Writing Todd Benson; Editing by Alden Bentley and Jim Marshall)
Brazil and Mexico end cars battle
Adam Thomson and Joe Leahy. Financial Times. March 16, 2012
Mexico and Brazil on Thursday settled a spat over the automotive sector, with Mexico agreeing to cut future car exports in return for keeping alive a decade-old trade treaty with Latin America’s largest economy.
The agreement, under which Mexico will slash average annual exports to Brazil to $1.55bn for three years, ends a tense month-long dispute between Latin America’s two largest economies.
In February, Brazil said it was considering ending a 2002 treaty, which gives the two countries preferential access to each other’s car markets. Brazil raised the possibility after imports of Mexican cars jumped more than 30 per cent to $1.7bn, according to Mexican figures.
The threat was the latest in a series of moves by Brazil to protect domestic industry from a rising tide of imports.
Brazil has in recent weeks reignited its “currency war” – as it calls its efforts to stem the appreciation of its currency, the real, against the dollar – and taken a string of trade-related measures in a bid to revive its flagging industry.
Industrial production slipped a much worse than expected 2.1 per cent in January compared with December, with part of the fall driven by a 30.7 per cent decline in automotive output.
While part of this was due to technical factors in the truck industry, automotive production has been consistently weaker since the middle of last year as producers have struggled with rising imports, particularly from Asia but also from Mexico.
Mexico is keen to retain its front seat position in Brazil, which in 2010 overtook Germany as the world`s fourth-largest car market and is set to be bigger than Japan by 2015.
Some commentators criticised Thursday’s agreement, suggesting that Mexico had caved in to Brazilian demands. As part of the negotiation, Mexico also agreed that car manufacturers should increase the locally sourced content of vehicles from 30 per cent to 40 per cent during the next five years.
They also pointed out that for most of the life of the 2002 vehicle agreement, Brazil has been the net beneficiary, notching up many successive years of trade surpluses with Mexico.
Francisco de Rosenzweig, Mexico’s under secretary of trade, said that Thursday’s outcome was positive and his country had defended free trade in the region. “We will go back to free trade within three years,” he told the Financial Times in an interview. “We managed to maintain a long-term agreement.”
He added that car manufacturers in Mexico were kept close to the talks throughout the negotiation. “We went hand in hand,” he said.
Global car manufacturers have announced billions of dollars in investment in Mexico in recent years. Mr de Rosenzweig said that in some cases, including Mazda and Honda, those investments had been made with one eye on Mexico’s preferential access to Brazil.
Luis de la Calle, a respected Mexican economist and a negotiator of the North American Free Trade Agreement, said that Thursday’s settlement would preserve most of Mexico’s preferential treatment with Brazil.
“That preference is valuable,” he said. “Mexico is now the only large and efficient car manufacturer to have preferential access to the Brazilian market.”
In an effort to stem rising imports, Latin America’s largest economy late last year hiked tariffs on vehicle imports from other countries by 30 percentage points to 35 per cent.
At the same time, Mr de la Calle criticised recent protectionist moves by Brazil, arguing that raising trade barriers was not the best way of dealing with economic imbalances. “It’s the dilemma of Dilma,” he said, referring to Brazilian president Dilma Rousseff.
“She has to decide if she is going to advance with reforms to make Brazil more competitive or go the other way and put more controls in place.”
Brazil Could Have an Impact by Supporting Sachs' Reform Candidacy for the World Bank
Mark Weisbrot. Folha de São Paulo. March 14, 2012
One of the most important changes that Lula da Silva brought to Brazil was in its foreign policy. As he has described it, prior administrations looked almost exclusively to the United States or Europe for their orientation in the world. But Lula saw that there was much to be gained in the world of South-South relations, including of course Latin American integration, as well as a confidence in Brazil's own abilities and choices.
These efforts have often involved standing up to the United States and its allies in the G-7 counties, as when Brazil helped lead the walkout of developing countries in the WTO negotiations in Cancun, in 2003. Brazil has also run into conflict with U.S. foreign policy: in Latin America, on the proposed Free Trade Area of the Americas, Brazil's support for Bolivia and Venezuela, its opposition to the expansion of military bases in Colombia and the 2009 military coup in Honduras; and the Middle East, where Brazil has tried to slow the march toward war with Iran.
The World Bank is one of the most important multilateral institutions impacting the developing world, and it has always been controlled by Washington, with its president chosen in a secretive process by the U.S. government. Beginning in 2007, when the Iraq war architect Paul Wolfowitz resigned from the Bank presidency in a scandal, Brazil has called for an "open, democratic and transparent process... based on the merits of a plurality of candidates regardless of nationality", to choose the president.
Now for the first time in 68 years there is an open challenge, from economist Jeffrey Sachs. In a few weeks he has gained the support of six countries. If chosen, Sachs would be the first World Bank president who is qualified for the job. All previous presidents were bankers, political appointees, or worse. Sachs, by contrast, has spent the last decade promoting development in poor countries. He was an important advocate for the Global Fund to fight AIDS, Tuberculosis, and Malaria, which has saved millions of lives. He has also been a strong proponent of debt cancellation in poor countries. His Millennium Villages project has shown that foreign aid can be used constructively, in an integrated way, to increase agricultural productivity and reduce the toll of disease.
Of course Sachs is still an American, and many would prefer someone from a developing country. But no such candidate has been nominated, and the nomination process will close in a week. So the choice is between Sachs, and another Washington political appointee -- Larry Summers is the reported first choice at this point -- who will do what the U.S. government and its corporations want. Sachs, by contrast, is independent of both U.S. political parties and their corporate sponsors, and has not hesitated to stand up to all of these interests when necessary.
Poor countries such as Kenya and East Timor have risked punishment from Washington by nominating Sachs; Brazil is much less vulnerable and will have much more impact if it supports the first independent, qualified candidate for the job.
This article was published by Folha de São Paulo (Brazil), March 14, 2012.
Argentina: vulture funds may get their money yet
Jude Webber. Financial Times. March 15, 2012
Argentina considers the issue of its payments to so-called “holdouts” closed and says those investors with bonds on which the country defaulted in its 2001 crash, and who did not participate in its 2005 and 2010 debt swaps, missed the boat. Tough.
It has even less time for the distressed-debt specialist “vulture funds”, even though Argentina has been ordered by court rulings in the US to pay out millions of dollars. One, Elliott Managemetn Corp’s NML Capital Fund, has amassed court rulings ordering Argentina to pay up $1.6bn. Argentina has not, and says it will not. But will it be able to?
If a court ruling from February 23 is upheld on appeal, Argentina must pay interest to Elliott before making any payment to holders of bonds issued in the 2005 and 2010 swaps.
As Bloomberg reports:
While the South American country is poised to pay $68 million in interest on restructured bonds on March 31, subsequent payments will be at risk if a Feb. 23 U.S. court decision is upheld on appeal. Argentina owes 7.4 billion pesos ($1.7 billion) in interest payments on restructured debt this year.
And as Anna Gelpern, a professor of law at American University and Georgetown University in Washington pointed out, the ruling may force Argentina to settle with Elliott to avoid default, and could set a precedent. She told Bloomberg:
This ruling is very significant because, for the first time in years, it gives a holdout creditor a generalizable enforcement strategy. If it stays, it could be generalized across a range of sovereign debt contracts and give holdouts a powerful remedy in a wide range of cases.
This seems rather to have upset the government, as the following opinion piece in business daily Ambito Financiero makes clear. In it, Argentina’s ambassador to Washington says Argentina could potentially be prevented from meeting payments to the World Bank, IMF and Paris Club.
That is slightly ironic, of course, given that Argentina has not yet paid the Paris Club after a decade of default, despite assurances that it is willing to pay.
Of course, it isn’t over yet. But Argentina’s plans to ignore vulture funds and let them stew may suddenly be under threat.
Police in Chile's capital break up student march
EVA VERGARA. AP. March 16, 2012
SANTIAGO, Chile -- Police used water cannons and tear gas to break up a march by thousands of Chilean students on Thursday, the first protest this year by student groups whose demonstrations demanding education reform paralyzed major cities in 2011.
Police said about 50 protesters were detained in Thursday's march on Santiago's main avenue, which drew roughly 2,000 participants. Organizers said 5,000 to 7,000 high school students took part along with some university students.
Police broke up the march when a few hundred students crossed a police barrier and tried to march to the education ministry. The streams of water knocked over some protesters and others dodged tear gas canisters.
"The government is giving us a clear signal that it is intransigent, but we are strong, we know that we are strong, and the government is afraid of us," said student leader Maximiliano Salas.
Police in Chile's capital said the march wasn't authorized by municipal authorities because the students didn't apply for permission 48 hours in advance.
Police detained a cameraman for Colombia's NTN 24 station for allegedly "blocking and impeding" the officers, according to Chile's Foreign Press Association.
The mobilization was called by the Coordinating Assembly of High School Students to demand free quality education and protest the expulsion of about 200 students who joined last year's protests. Some university students also joined them.
The crisis over education reform in Chile remains unresolved despite seven months of mass demonstrations last year by students, teachers and families. The marches have generally been peaceful but often end with clashes between police and a minority of hooded activists throwing stones and molotov cocktails.
Now that summer vacations are over in Chile, both sides expect many more clashes to come.
Unveiling Canada's Role in Chile’s Environmental and Political Conflicts
Cyril Mychalejko. Upside Down World. March 15, 2012
A new report reveals the Canadian mining industrial complex's responsibility for social discord and environmentally-destructive policies in Chile's Patagonia region.
“Far away, on the southern cone of South America in Chilean Patagonia, exists one of the most beautiful, still-virgin territories on Earth. There, an intense struggle is taking place that most Canadians have never heard of, but that intimately involves the Canadian mining industry, the Canadian government, and millions of Canadian pensioners and investors,” notes Council of Canadians chairperson Maude Barlow in the report's introduction.
The report, Chilean Patagonia in the Balance: Dams, Mines and the Canadian Connection, asserts that Canada's mining industry, which leads the world in mining investment with more than half of its assets in Latin America, accounts for 33 percent of electricity demand in Chile while advantageously exercising enormous influence in setting government policy there.
The report focuses on the Aysén region, which has seen protests and social discord since the announcement that the hyrdroelectric “development” plan would move forward last May. The project will potentially affect 12 of Aysén’s major rivers and involve five dams on the Baker and Pascua Rivers.
The project, which also includes the construction of power lines from the Aysén region to Santiago, will cause the “deforestation of 23,000 hectares, and six national parks” and damage to “11 national reserves,” reported The Guardian. The environmental nonprofit International Rivers has also indicated that the project would forcibly displace many families, would flood many of the area's best agricultural and ranching lands, and would endanger rare animal species.
The report states: “Transelec, the only transmission company currently operating in Chile that is even remotely capable of building HidroAysén’s link to energy markets, is owned by a Canadian consortium led by Brookfield Asset Management, with partnership from the Canada Pension Plan Investment Board and another public sector investor, the British Columbia Investment Management Corporation. Canadian capital is instrumental in making HidroAysén and projects like it both attractive and possible.”
As many as 50,000 protesters marched in opposition to the project in May 2011, while the national daily La Tercera reported that 74 percent of Chileans oppose the project.
The HidroAysén dam project's Environmental Impact Assessment (EIA), which was approved in May 9, 2011, has come under fire. According to Chile’s Christian Democrat party Deputy Sergio Ojeda, chair of a congressional committee charged with investigating the EIA, it was riddled with flaws.
“It appears that the HidroAysén project should not have been approved,” Ojeda told El Mercurio. “It is evident that the Environmental Impact Assessment suffers from a number of flaws that allow megaprojects like HidroAysén to not be evaluated with much rigor.”
Social movements in the region and nationally across Chile have remobilized with demonstrations and roadblocks last month to not only protest the project, but to demand reforms to address other social and infrastructure problems.
“We have initiated a process of permanent and long-term demonstrations to trigger a change in the regional development that until now has focused essentially on the benefit of interests that do not belong to those who live in Aysén,” wrote leaders of various constituencies that make up the Social Movement for the Aysén Region in a letter to the government, as the Santiago Times reported.
Protests were met with violence and repression, prompting Amnesty International to call for an investigation into reports of “an excessive use of [police] force, the unwarranted use of tear gas, the use of metal pellets and possible arbitrary arrests,” according to the BBC. Meanwhile, Chilean President Sebastián Piñera recently threatened to apply the country's draconian anti-terrorism law toward protesters.
“By probing the links between Patagonian hydropower, electricity transmission, and the expanding mining sector, we hope to make Canadians stop and think about the implications of our shared investments abroad, and consider what obligations we might have to ensure that those investments are socially and ecologically sustainable,” states the Council of Canadians’ report.
Socially and ecologically sustainable business practices is something Canada's mining industry has had trouble upholding.
In July 2011 Greenpeace claimed that Barrick Gold's operations in northern Chile along the border with Argentina are responsible for the significant shrinking of three small glaciers, which farmers in the region rely on. Barrick initially wanted to remove the glaciers, but widespread opposition due to obvious environmental concerns stopped the plan. However, the Center for Human Rights and the Environment, an NGO from Argentina, reported that local water supplies have been contaminated as a result of Barrick's local projects.
“The media in Canada is fairly silent about protests happening in Chile, unless it ties into some other big news story. I've talked to some reporters that have admitted that they get so many stories about mining conflict that they barely even think that it qualifies as news anymore. … It's a great example of how cynicism promotes systemic injustice,” said Sakura Saunders, editor of ProtestBarrick.net, a website that provides research and organizing information around mining issues. The site focuses on Canadian mining giant Barrick Gold.
The Council of Canadians’ report also notes that in 2010 “five assassinations resulted from conflicts around Canadian mining developments in El Salvador, Guatemala and Mexico.” Part of the problem, the report states, is the Canadian government's “unwillingness to hold the Canadian extractive industry to basic environmental and human rights standards in its international operations.”
A modest piece of legislation that would have empowered the federal government to investigate claims of human rights and environmental abuses and punish companies found guilty by withholding funding was rejected by Canadian legislators—even after receiving testimony that women were gang raped and tortured at a Canadian mine site in Papua New Guinea.
“We have to build a culture of resistance and awareness to these mining abuses. We have to reject these abuses in the strongest terms and demand action. We should investigate where our pensions and mutual funds are invested, and try to divest from mining companies such as Barrick and Goldcorp,” added Saunders. “We have to share the many resources out there (like videos, articles, and books) with our neighbors and friends, and not be fooled by companies’ promises for Corporate Social Responsibility.”
Cyril Mychalejko is an editor at www.UpsideDownWorld.org, a website on activism and politics in Latin America.
Northern Andean Region [contents]
US diplomat hopeful for better relations with Venezuela
AFP. March 15, 2012
WASHINGTON — Attempts to improve strained relations between Venezuela and the United States require "concrete advances" on issues of mutual interest, James Derham, an American diplomat assigned to Caracas, said Thursday.
Both countries withdrew their ambassadors in 2010 as antagonism grew between them.
US officials have said their most difficult relations in South America are with Venezuelan President Hugo Chavez, a hardline socialist who counts former Cuban President Fidel Castro and Iranian President Mahmoud Ahmadinejad as his allies.
Better relations, while possible, must "be more than rhetorical," Derham said. "It needs to be based on some concrete advances."
Cooperation in trade relations and in the battle against illegal drug trafficking could provide the progress sought by diplomats, he said.
Derham spoke Thursday during a debate at the Washington-based Inter-American Dialogue public policy foundation.
"We are always looking for opportunities to work together with the Venezuelan government," Derham said.
However, the diplomat said Washington wants relations with Venezuela to be "respectful but realistic."
"We obviously disagree on many things but we are not interested in provocation or polemics," Derham said.
"Avoiding provocation is not the same as being silent," he said.
He added that the US government "will continue to be clear and forceful" on human rights and issues of democracy and freedom of expression, concerns Washington has raised with Venezuela previously.
Venezuela to deploy 15,000 troops to borders
AP. March 15, 2012
CARACAS, Venezuela -- Venezuela's defense minister says the military will deploy about 15,000 soldiers to regions along the country's borders in order to combat armed groups and drug trafficking.
Gen. Henry Rangel Silva told the state-run Venezuelan News Agency that the troops will spread out along Venezuela's borders with Colombia, Brazil and Guyana in an operation aimed at boosting security.
The defense minister did not say when the deployment will begin, but he said on Thursday that about 2,000 troops have been deployed already to southwestern Tachira state.
Rangel also said that 14 Colombians and three Venezuelans have been detained in the killings of two Venezuelan soldiers on Saturday in the town of Rubio, near the border with Colombia.
Rusoro Expects Venezuela Gold Takeover as Talks Fail
Nathan Crooks. Bloomberg. March 15, 2012
Rusoro Mining Ltd. (RML), the last remaining publicly traded gold miner in Venezuela, expects its gold assets in the South American country to be taken over after a deadline to negotiate with the government lapsed, Chief Executive Officer Andre Agapov said. The stock slid 12 percent.
Rusoro is preparing to seek international arbitration to obtain compensation for the assets as the Venezuelan government’s joint venture offers undervalue the company’s gold resources, Agapov said today in a phone interview from New York.
“As of today, all the assets will be nationalized and they will take control of operations,” Agapov said.
Rusoro, based in Vancouver, began talks to form a joint venture with state oil company Petroleos de Venezuela SA and transfer 55 percent of its gold assets to the government in August after President Hugo Chavez nationalized the industry. Rusoro would be the fifth mining company seeking compensation from Venezuela through the World Bank’s arbitration court following nationalizations.
The government made two verbal offers, including one presented two days ago, to compensate Rusoro for a reduced holding and didn’t put any value on its gold resources or reserves, said Agapov. Yesterday was the negotiations deadline.
“In the past 180 days, we never saw an offer presented to us in writing,” said Agapov. “There were several meetings and several proposals from their side and none of them were acceptable to Rusoro shareholders.”
Rusoro fell 12 percent to 11 Canadian cents in Toronto trading as of 2:05 p.m. The stock has dropped 65 percent in the last year.
Rusoro, which has gold reserves of 5.6 million ounces, operates the Choco 10 mine and the Isidora mine in southeastern Venezuela, according to the company’s website.
The company has the potential to produce a half million ounces of gold a year in Venezuela, Agapov said.
Rusoro officials met with Venezuela’s Oil and Mining Minister Rafael Ramirez shortly after the gold nationalization law was passed and he promised to pay the company a fair value so capital markets would see that the Venezuelan government was willing to seek an adequate level of compensation, said Agapov.
“It was a very optimistic start, and then all the people who started to work with us on the settlement were proposing completely different things and much lower valuations,” he said. “There was no way we could have accepted their numbers or conditions.”
The company has until June 15 to file for arbitration with the ICSID, as the Washington-based arbitration court is known, said Agapov.
“If they would like to continue negotiations and reach an acceptable deal, of course we are willing,” he said. “We have 90 days until we have to file for arbitration.”
President Chavez in January said that Venezuela wouldn’t accept ICSID rulings. The agency is overseeing about 20 cases filed since Venezuela in 2006 began nationalizing assets in industries including oil, mining, cement and telecommunications.
To contact the reporter on this story: Nathan Crooks in Caracas at email@example.com
To contact the editor responsible for this story: Dale Crofts at firstname.lastname@example.org
Venezuela's oil exports to the US down in January and February
ERNESTO J. TOVAR. EL UNIVERSAL. March 15, 2012
Venezuelan oil exports to the United States continued to spiral down in the first two months this year.
According to interim data issued by the US Department of Energy, Venezuela's exports to the US in January and February 2012 averaged 832,000 bpd, an 11 percent decline compared with the first two months of 2011.
In January, Venezuela shipped 765,000 bpd to the US market, while in February exports averaged almost 900,000 bpd.
Overall, exports declined compared to the same period last year. In January 2011, Venezuela shipped 998,000 bpd, while in February 2011 total exports amounted to 888,000 barrels per day.
The steady decline in exports to the United States is part of Venezuela's trade and political preference policy towards oil consumers such as China. While there are no final figures from Pdvsa 2011 management report, the United States is still the main buyer of Venezuelan oil, although there is a downward trend. According to the last available report (2010), the United States bought 52% of Venezuelan oil exports.
Minister of Petroleum and Mining Rafael Ramírez has said that Venezuela is shipping 460,000 bpd of oil and oil products to China, including 200,000 bpd to pay off a Chinese loan.
Meanwhile, windfall oil revenues continue to push Venezuelan government funds up. Ending February, the National Development Fund (Fonden) received an extraordinary contribution of USD 5.65 billion from windfall oil revenues.
Colombia oil industry pushes back on tax hikes
Luis Jaime Acosta. Reuters. March 15, 2012
BOGOTA, March 15 (Reuters) - Leaders of Colombia's oil industry on Thursday urged the government to keep tax rates stable for the sector amid growing insistence by politicians that energy firms pay a greater share of their earnings to the Andean nation.
A group of legislators want President Juan Manuel Santos's upcoming tax overhaul proposal to include royalty and tax hikes on the oil industry, which is one of the fastest-growing in the region thanks to improved security under a U.S.-backed military crackdown on Marxist rebels.
Sector representatives say hiking taxes could limit the competitiveness of the country's oil and gas projects, which already face challenging logistics due to limited pipeline capacity in key production areas.
"The oil sector is not asking for anything in the tax reform other than maintaining the rules of the game," said Alejandro Martinez, president of the association of private oil companies.
"An increase would put at risk the investments needed to maintain the current rate of growth over the next decade," he said during a press conference, adding the sector pays a higher ratio of taxes to earnings than any other in Colombia.
The Santos administration this year will present a proposal to congress to overhaul the tax code to cut tax evasion and lower exemptions, but his government has said it does not favor increasing the tax burden on the oil and mining industry.
Some of the legislators who want higher taxes belong to Santos's party.
Martinez said 81 percent of net revenue from oil operations in Colombia currently goes to the state. The oil sector in 2010 paid 4.2 trillion pesos ($2.4 billion) and royalties of 5.5 trillion pesos ($3.1 billion), according to the association.
Though its reserves are smaller than neighboring Venezuela, Colombia has emerged as a new destination for oil investments in part because it is seen as respecting investors.
Venezuelan president Hugo Chavez has nationalized most of the country's energy sector, creating the perception that it is a risky place to do business.
Colombia's oil sector brought in $6 billion in investments last year, compared to a total of $15 billion in foreign direct investment, according to the association. The country hopes to reach production of 1 million barrels per day (bpd) in 2012, compared with output of 914,000 bpd last year.
A renewed flurry of security incidents, including kidnappings of oil workers and bombings of a crucial pipeline by leftist guerrillas, prevented Colombia from reaching its million barrel per day target last year.
(Writing by Brian Ellsworth)
Journalist assassinated in western Colombia
Charles Parkinson. Colombia Reports. March 16, 2012
A Colombian journalist was shot dead in broad daylight Thursday on a street in western Colombia, reported Colombian media.
Argemiro Cardenas Agudelo was manager of Metro Radio in Dosquebradas, the Risaralda Department town where he had previously served as mayor and where he died.
The Foundation for Press Freedom (FLIP) condemned the murder, but said it was "not clear that the crime is related to his journalistic work," but judicial investigations, "will clarify whether the crime was motivated by his status as a journalist."
The murder occurred at approximately 12:20pm, as Cardenas was walking to a meeting.
FLIP asserted that the journalist had reported threats, while Pereira Metropolitan Police Commander Colonel Gonzalo Lonoño told local media Cardenas "received a call that confirmed an appointment. He then walked to the place where they had arranged to meet and, on the way, an individual shot him, causing his immediate death."
But fellow journalist Juan Antonio Ruiz, who worked with Cardenas at the newspaper La Tarde de Pereira threw doubt over the idea of his murder being motivated by his journalistic work, telling FLIP, "I was at the head of any investigative report in question, he was already in process of retirement."
An unnamed source told FLIP "Dosquebradas is a hot town [...] here are [drug] trafficking bands vying for control over neighborhoods and pockets of neo-paramilitaries. "
Pereira Metropolitan Police offered a reward of up to five million pesos ($2840) for information leading to the apprehension of Cardenas' assailants, while current Mayor of Dosquebradas Rosa Maria Rivera declared three days of mourning.
Cardenas was elected to the mayorship as the Liberal Party candidate in 1997.
Armed violence on the rise in Colombia – U.N.
Anastasia Moloney. AlertNet. March 16, 2012
BOGOTA (AlertNet) – Escalating violence by armed groups has forced thousands of Colombians to flee their homes this year, the United Nations said.
About 5,500 Colombians, many from Afro-Colombian and indigenous communities living in the country’s Pacific coastal areas, have been displaced in 20 separate events during the first two months of 2012, according to the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) in Colombia.
“Increased armed actions are causing serious humanitarian consequences including civilian casualties and displacements,” OCHA said in its latest report.
Some mass displacements took place in areas where government and aid agencies have limited access, and the displaced lack health care, food, protection and education, OCHA said.
Colombia's main left-wing guerrilla group, the Revolutionary Armed Forces of Colombia (FARC), fuelled by its large stake in the cocaine trade, has waged a nearly five decade war against the Colombian army in a bid to topple successive governments and take power.
CHILDREN CAUGHT IN MIDDLE
Indigenous and Afro-Colombian children are often caught in the middle of Colombia's armed conflict. Many of them live in isolated and far-flung jungle regions where rebels tend to have more power because the state military's presence is weak and sporadic.
The threat of rebels using children to fight in their forces is one of the main reasons why Colombians flee their homes.
“Children, adolescents and youth continue to be the victims of forced recruitment, direct threats, kidnappings, attacks and school occupations,” OCHA said.
Earlier this month, 25 children living in the southwestern Colombian province of Narino had to enrol in a school across the border in Ecuador following threats against teachers by illegal armed groups in the jungle region.
With nearly 4 million internal refugees, Colombia has one of the highest displacement populations in the world.
Last year, 144,109 Colombians were uprooted - an increase of 7 percent compared to 2010 - according to government figures.
Colombia spends millions of dollars every year providing humanitarian relief and subsidies to uprooted communities, and last year the government created a rapid response team to provide emergency food and shelter to displaced people.
Despite this, state agencies are overstretched and cannot meet all the needs of the newly displaced, OCHA said.
Western Andean Region [contents]
Envoy exchange with Bolivia to take place this year: US
AFP. March 15, 2012
WASHINGTON — An exchange of ambassadors between Bolivia and the United States could take place as soon as this year, a top US official said Thursday.
"Certainly the goal is to exchange ambassadors this year," said John Creamer, charge d'affaires at the US embassy in Bolivia's capital La Paz, speaking to reporters in Washington.
The move to swap envoys after nearly half a decade brings Washington a step toward normal ties with La Paz after years of diplomatic strain with South America's poorest nation.
Bolivia's leftist President Evo Morales, a staunch US critic, in 2008 ordered the expulsion of then-US ambassador Philip Goldberg, accusing him at the time of backing opposition groups which had been defying his administration. Washington retaliated by telling the Bolivian ambassador to go home.
In 2011, the countries set up a panel to hold talks on improving bilateral relations covering various issues, including cooperation on the fight against the illegal drug trade and on fostering more investment.
Creamer said that while the two countries continue to have "differences over many issues," rapprochement has been possible because "both countries recognize that we have common interests."
One particularly sensitive sticking point has been Bolivia's handling of its trade in coca leaves, the raw material from which cocaine can be made.
Morales, Bolivia's first elected indigenous president, is the former head of a coca growers union and highly sensitive to the criticism.
The plant's raw leaf is an age-old keystone of indigenous Andean culture: it is chewed to fight altitude sickness, taken as a tea, and used in religious ceremonies, and Creamer said he understood its importance to Bolivians.
"We understand and respect the cultural and historical significance of coca leave chewing," the US diplomat said.
Bolivia's main indigenous peoples are Aymara and Quechua. It is South America's only country with an indigenous majority.
Bolivia Weighing First International Bond Sale Since 1920s
Eliana Raszewski. Bloomberg. March 16, 2012
Bolivia is considering tapping international debt markets for the first time since 1920 with a sale of as much as $500 million in bonds this year, Finance Minister Luis Arce said.
Bolivia is working with Bank of America Merrill Lynch and Goldman Sachs Group Inc. in placing the sale, Arce told reporters today at the Inter-American Development Bank’s annual meeting in Montevideo, Uruguay.
The government would use the funds to accelerate economic growth that reached 5.1 percent in 2011, Arce said. The land- locked South American country doesn’t need the funds to fuel deficit spending, he added, saying that Bolivia had an estimated budget surplus of 0.8 percent of GDP last year.
“We want to take advantage of capital flows in Latin America that are escaping from Europe and the U.S.,” Arce, 48, said. “Latin America has great opportunities and Bolivia as well and its important to use this capital to help sustain economic growth.”
Standard & Poor’s raised Bolivia’s credit rating in May last year to B+ from B, four levels below investment grade, putting the country on the same level as Venezuela, Nigeria, the Dominican Republic and Sri Lanka.
Bolivia’s economy is poised to grow 4.5 percent this year, according to estimates by the International Monetary Fund. The country’s central bank forecasts 5.5 percent growth, fueled by public investment and domestic consumption.
Arce, who joined the central bank in 1987, received a degree in economics from the Universidad Mayor de San Andres in Bolivia and a master’s degree in economics from the University of Warwick in England. He became Bolivia’s finance minister in 2006 under President Evo Morales.
Bolivia’s annual inflation slowed in February to 4.64 percent from 5.86 percent in January, the national statistics institute reported. Last year, consumer prices rose 6.9 percent. Central bank reserves climbed to $12.7 billion on March 12 from $9.7 billion a year earlier. Reserves are above the country’s “optimal” level of $8 billion to $8.5 billion, Arce said.
To contact the reporter on this story: Eliana Raszewski in Montevideo at email@example.com
To contact the editor responsible for this story: Joshua Goodman at firstname.lastname@example.org
Bolivia's President Morales to meet Santos in Colombia
Brandon Barrett. Colombia Reports. March 15, 2012
Bolivian President Evo Morales arrived in Bogota for his first official visit to Colombia Thursday.
"On behalf of the Bolivian people, a greeting to the people of Colombia and salute to the Government and all the social forces of the Republic of Colombia," Morales said in a statement from El Dorado airport.
Morales is set to meet Colombian President Juan Manuel Santos to discuss the strengthening of technical, scientific and cultural ties between the two South American nations. The meeting's agenda is expected to include the international drug trade and the 6th Summit of the Americas, taking place in Cartagena next month.
The Bolivian president's visit coincided with the centenary of a bilateral friendship treaty signed between the two countries.
Morales is also scheduled to meet Bogota Mayor Gustavo Petro and visit the Colombia's Congress.
Peruvian miners call off protest after 3 die in clashes with police
CNN. March 15, 2012
Lima, Peru (CNN) -- Wildcat miners in southeast Peru called off a week-old protest Thursday, a day after three people were killed in clashes with police.
Leaders called off demonstrations and agreed to meet with Peruvian officials Monday, Peru's state-run Andina news agency reported.
"We are open to discussions ... and we will search for a solution," union leader Luis Otzuka said, according to Andina.
Miners in the country's Madre de Dios region have been demonstrating ahead of the enforcement of several decrees aimed at cracking down on illegal mining.
The protesters tried to take over an airport, a bridge and a market Wednesday. Police pushed them back with tear gas and warning shots from their rifles. Protesters rained rocks on the riot police.
The government blamed the protesters' actions for igniting the clashes that led to the deaths of Carlos Lanci Yumbato, 46; Julio Ticona Medina, 31; and Francisco Areque Jipa, 35.
According to the government, another 38 civilians and 17 police officers were injured. At least 60 people were arrested.
"The government of Peru rejects the acts of violence by the illegal miners in Madre de Dios and asks the regional authorities and the general public to support the work of the police to re-establish order and peace in that jurisdiction," the government said in a statement.
President Ollanta Humala's Cabinet chief, Oscar Valdes, said Thursday that the government remains firm on its intention to regulate the informal mining sector.
There are thousands of wildcat miners in Peru. The new decrees would impose sentences of as much as 10 years for operating illegal mines. Other informal mines must meet certain environmental standards or be abandoned.
Valdes said the issue is important because illegal mining has negative consequences such as child slavery, deforestation, drug trafficking and mistreatment of workers.
The new decrees also have the support of union leaders in the formal mining sector.
The president of the General Confederation of Peruvian Workers, Carmela Siguentes, said that formalizing the illegal miners would guarantee their right to a fair wage and provide an escape from exploitation by "mafias."
But the protesters say that the new decrees will deny them their right to work.
Humala Approval Falls First Time in 3 Months, Peru Poll Shows
John Quigley. Bloomberg. March 15, 2012
Peruvian President Ollanta Humala’s approval rating fell for the first time in three months on concern he condoned special treatment for his brother, who’s serving a 19-year prison sentence for the killing of four policemen, a poll shows.
His approval rating slid to 55 percent from 58 percent the month earlier, according to the March 9-12 poll by Datum Internacional, which was published in the Lima-based newspaper Gestion today.
Antauro Humala, a former army major, was moved from a maximum security prison to a military lock-up March 4. Justice Minister Juan Jimenez told legislators this week the transfer was for safety reasons and said the government will investigate press reports he had obtained an iPhone and internet access in the penitentiary. According to Datum’s survey, 68 percent of those surveyed said Antauro Humala had received privileges in prison with the knowledge of the president.
Lima-based America Television on March 11 aired an image of Antauro Humala with his arm wrapped around a woman while he took their photo with an iPhone. Jimenez told lawmakers the president was “very worried” by the report, which also published e-mails his brother had sent to a member of staff in Congress and an employee at Newmont Mining Corp. (NEM)’s local unit.
Antauro Humala was jailed in September 2009 for killing the officers during the takeover of a police station in the southern Andean town of Andahuaylas in 2005. He led a group of army reservists who opposed foreign investment and sought to renationalize state industries. The Supreme Court shortened his sentence from 25 years on Sept. 8.
The survey showed 41 percent of Peruvians are in favor of Newmont’s Minas Conga gold project, which was halted following local protests in November, while 40 percent are opposed to the $4.8 billion investment. Of those surveyed, 55 percent said mining investment in Peru will stall or decline if the project is canceled.
Datum questioned 1,206 people and the poll had a margin of error of plus or minus 2.9 percentage points.
To contact the reporter on this story: John Quigley in Lima at email@example.com.
To contact the editor responsible for this story: Joshua Goodman at firstname.lastname@example.org.
Ecuador Jan-Feb Net Tax Collections Rise 37% On Year To $1.74B
Dow Jones. March 16, 2012
QUITO (Dow Jones)--Ecuador's net tax collections rose 37% to $1.74 billion in the January and February period from $1.27 billion a year earlier, on an increase in value-added and income tax collections, the nation's Internal Revenue Service, said Friday.
Collections from the value-added tax in the two months reached $925 million, 15% higher than $804 million a year earlier, according to the SRI, as Ecuador's Internal Revenue Service is also known.
Income tax collection reached $460 million, up 18% from $391 million in the same period of last year.
Other taxes totaled $360 million in January and February, the SRI said.
According to the SRI, in February, Ecuador's net tax collections rose 42% to $747 million from $525 million in the same month of 2011.
Ecuador hopes to collect $9.56 billion in taxes this year.
Last year the Andean country collected $8.72 billion in taxes.
All figures have been rounded.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; email@example.com
Mexico, Central America and Caribbean [contents]
Mothers of Ciudad Juarez Search Everywhere for Missing Daughters
Luis Chaparro. EFE. March 15, 2012
CIUDAD JUAREZ, Mexico – Nearly two decades after the Mexican border city of Ciudad Juarez first gained notoriety for the slayings of young female factory workers, scenes of mothers searching the desert or the municipal morgue for their slain or kidnapped daughters remain commonplace.
The Juarez Valley, an arid area that is home to a stretch of rural towns on the city’s outskirts, has become a clandestine cemetery for murdered women, with at least a dozen bodies found thus far this year.
On Feb. 7, agents with the Chihuahua state Attorney General’s Office combed the area after an anonymous caller said human remains were found in the southwestern part of the town of San Ignacio, a small town in the Juarez Valley.
Authorities found the remains of four young women, some missing since 2010. Days later, the remains of another five females were found in different areas of the same town.
“Nine bodies have been found thus far in 2012, that is skeletal remains belonging to nine bodies; and there are three more probable bodies, but we’re not sure if these are of young women also,” AG’s office spokesman Carlos Gonzalez said.
“Of these nine confirmed bodies, family members already have identified four. The rest remain unidentified,” he added. In addition to those finds, another body also was found in recent hours.
Spanish journalist Javier Juarez – who for several years has covered the phenomenon of female homicides in Ciudad Juarez, located across the Rio Grande from El Paso, Texas – says kidnapping gangs targeting young women have chosen this region due the secretiveness of local residents.
“It’s an area that’s been controlled by drug traffickers. It’s a very secretive and inaccessible place. In our investigations, we even found a safe house where kidnapped women were presumably held captive,” Juarez told Efe.
According to Imelda Marrufo, coordinator of the Red Mesa de Mujeres, a network dedicated to supporting mothers whose daughters have been slain or gone missing in Ciudad Juarez, her organization “regrettably” could see this situation coming.
In the 1990s, Ciudad Juarez became notorious for the brutal murders of hundreds of teenage girls and young women, many of whose bodies have never been found.
Most of the victims were young women from poor families who worked in the assembly plants, known as “maquiladoras,” that sprung up around the city to take advantage of the North American Free Trade Agreement. Many were sexually assaulted before they died.
But some observers, including Juarez, say the current situation is even more dire in Ciudad Juarez, Mexico’s murder capital and a coveted drug-smuggling corridor being fought over by violent cartels.
Over the past four years, we’ve seen the disappearance of nearly 200 adolescents, according to our figures. Authorities give a much lower number, but between the parallel count by the families and ours, we’re talking about between 160 and 200,” the journalist said. EFE
Honduras seeks to stop U.S. foreign aid cut-off over human rights
Tom Ramstack. AHN. March 15, 2012
Washington, D.C., United States (AHN) – Representatives from the government of Honduras hope to meet with congressional leaders as soon at Thursday to discuss a letter 94 congressmen wrote to Secretary of State Hillary Clinton this week.
The letter suggests cutting off aid to the Honduran military and police.
The congressmen said the United States should not fund a government that tolerates, and perhaps encourages, the kinds of human rights violations that have occurred in Honduras recently.
They have included police killings of peasants and unpunished murders of journalists, according to critics of the Honduran government.
At least 19 journalists have been murdered in Honduras since President Porfirio Lobo took office in January 2010. In addition, 45 peasants and seven security guards were killed in property disputes in the Lower Aguan area of Honduras.
The letter from the congressmen was partly a response to the murder this week of radio host Fausto Valle in northern Honduras. His assailants killed him with machetes.
The letter, authored by Rep. Jan Schakowsky, an Illinois Democrat, says, “While it’s unclear how suspending U.S. security aid to Honduras would help the Honduran system of government suddenly become more capable and efficient, given that its problems are deep-rooted and go back generations, the threat of suspending the aid may have the effect of scaring the Lobo administration to try and be more responsive.”
The Honduran mission that left Tegucigalpa Wednesday included Foreign Minister Arturo Corrales, Secretary of Human Rights Ana Pineda and director of the National Agrarian Institute Cesar Ham.
They want to respond personally to the letter from the congressmen that demanded the Honduran government investigate the murders and prosecute the perpetrators, which is suspected of including members of the military and police.
Honduras has received $93 million in U.S. foreign aid for its military and police since 1996.
The United Nations lists Honduras as one of the five most violent countries in the world.
An average of 558 people are killed every month in the small Central American country.
The Washington-based Working Group for Latin America says the Honduran police and military are increasingly linked to some of the killings.
Honduran Human Rights Commissioner Ramon Custodio recently told the country’s parliament that police corruption is responsible for a rise of organized crime and drug trafficking.
Members of the U.S. Congress say the Lobo administration lacks the will to seek out the murderers of journalists. Only four accused killers of the 21 journalists murdered since 2003 have been prosecuted.
Groups such as the Center for Investigation and Promotion of Human Rights in Honduras say the Lobo administration’s inaction in the murders is part of a larger effort to stifle freedom of the press.
The Honduran government denies the accusations.
Miguel Angel Bonilla, the minister of communications, said the difficulty of properly investigating the murders is the real problem.
The letter this week from the congressmen casts doubt on the denial by the Lobo administration by arguing U.S. aid should be cut off until the State Department can certify that the Honduran government “is investigating and prosecuting in the civilian justice system, in accordance with Honduran and international law, military and police personnel who are credibly alleged to have violated human rights, and the Honduran military and police are cooperating with civilian judicial authorities in such cases.”
Some experts warn that cutting off aid could be dangerous for United States.
Marco Caceres, co-founder of projecthonduras.com, a volunteer network that brings humanitarian development projects to Honduras, wrote in a commentary this week that, “The idea that the U.S. would hold back money from Honduran security forces at a time when Honduras is increasingly threatened by organized crime, foreign drug cartels and contracted street gangs is unrealistic, notably because Honduras has become the new Ground Zero for the U.S. ‘War on Drugs.’
“While you can debate the wisdom of this strategy, without it there’s little question that the countries of Central America would be transformed into little narco-states and the flow of drugs from South America into Mexico and the U.S. would dramatically rise, and the U.S. addiction to drugs would become even worse than it already is.”
Rights group says Canada a "safer bet" to try accused Guatemalan war criminal
Bill Graveland. The Canadian Press. March 15, 2012
CALGARY - The hard line being taken by the Guatemalan courts in dealing with soldiers convicted in a 1982 massacre during that country's civil war hasn't softened the stance of a human rights group that is demanding one of the accused soldiers be tried in Canada.
Jorge Vinicio Orantes Sosa, 53, was arrested while visiting family in Alberta last year and was ordered extradited to the United States to face immigration charges. He is also wanted by Guatemalan authorities for the alleged massacre of civilians in the village of Dos Erres during that country's civil war.
A former member of the same unit, Pedro Pimentel Rios, was extradited from the United States in July and this week was sentenced to 6,060 years in prison for his role in the killings. He's the fifth former special forces soldier to receive such a sentence.
Still, the Canadian Centre for International Justice says Sosa should be tried here.
"I still think the safest bet is to have him charged in Canada," said Matt Eisenbrandt, the legal director of the centre.
"I think we've got the proper crimes to charge him with here and he could certainly, if those allegations are proven true, get a long and deserved sentence in Canada."
Eisenbrandt commended the progress made by prosecutors in Guatemala but said there are some concerns about what the future holds.
"We hear concerns from human rights groups in Guatemala that it remains to be seen what is going to happen with the new government there and whether they're going to allow these cases to continue," Eisenbrandt said Thursday in a telephone interview with The Canadian Press.
Retired general Otto Perez Molina was inaugurated as Guatemala's new president in January and has promised to crush criminality with an "iron fist."
It's alleged a total of 251 men, women and children were killed during the massacre at Dos Erres. The military unit believed the village was under rebel control and that its inhabitants were responsible for an ambush on soldiers and the theft of 20 rifles. No weapons were found.
Sosa's extradition hearing was told that he was a sub-lieutenant at the Kaibil School, which trained special commando units in Guatemala in the late 1970s and early 1980s and was one of the commanders of a 60-man unit that surrounded Dos Erres in December 1982.
Many of the villagers were killed with sledgehammers. The women and girls were raped and their bodies thrown down the village well, the hearing heard.
"The evidence from the massacre at Dos Erres clearly establishes that Sosa was present and involved and actively participated in the killings with a sledgehammer, a firearm and a grenade,'' Alberta Court of Queen's Justice Neil Wittmann said in granting the extradition order last summer.
"It is hard for this court to comprehend these murderous acts of depraved cruelty.''
Sosa has denied the allegations and is currently in custody in Calgary, fighting the extradition order.
The length of the sentences handed to the soldiers are symbolic, since under Guatemalan law the maximum time a convict can serve is 50 years.
Eisenbrandt said his group has received no response from the federal government to their calls for a Canadian trial.
Coke's sentencing in US the talk of Jamaica
DAVID McFADDEN. AP. March 15, 2012
KINGSTON, Jamaica -- When drug baron Christopher "Dudus" Coke ruled her slum neighborhood, Gloria Petgrave and her neighbors felt so protected by the area's criminal benefactor that they never locked their doors.
Now, with Coke in New York facing sentencing Friday, Petgrave says is frightened to step outside at night in the West Kingston district of Tivoli Gardens.
Police have patrolled the streets since authorities besieged and raided Tivoli Gardens to capture Coke nearly two years ago, and many residents say they yearn for the more effective order he enforced, as lawless and violent as it was.
"I've never seen it as bad as it is now, lots of robberies," the 67-year-old woman said just outside the bullet-pocked ghetto where's she's lived for four decades. "We want Dudus to come back here, but I doubt he ever will."
Coke faces up to 23 years in prison after pleading guilty in August to federal racketeering and assault charges. He could have faced a life sentence on the initial charges filed against him.
Still, he remains in the spotlight in Jamaica. Many islanders speculate that he has told prosecutors of politicians, businessmen and others linked to crime, possibly opening a new chapter in the fight against corruption.
"I don't see the U.S. government being so generous to him without a cost. They are obviously trying to get as much as possible out of him about who are the people at the top," said Hilton McDavid, a social sciences lecturer at Jamaica's University of the West Indies who has researched the aftermath of the May 2010 security raids in Tivoli Gardens.
Although U.S. authorities portrayed Coke, as among the world's most dangerous drug barons, McDavid says more powerful figures still lurk in the shadows.
"Dudus is basically a sergeant major. We haven't touched the officers as yet: the generals, and the colonels and the majors. And they are probably people who are living very comfortably, people in high circles at the upper echelons of society," he said.
National Security Minister Peter Bunting said last month that officials are trying to crack down on more kingpins and facilitators for organized criminal networks, not the sort of underlings arrested in recent years.
Coke followed in the footsteps of his father, Lester Lloyd Coke, better known as Jim Brown, a leader of the notorious Shower Posse during the 1980s cocaine wars. Authorities say he took over the organization when his father died in a mysterious fire in a Jamaican prison cell in 1992.
In Tivoli Gardens, people said Coke often paid the bills of those in need and made sure the streets were clean. Since everyone knew the penalty for street crimes was severe, thugs committed their assaults elsewhere.
But anyone who disobeyed Coke could suffer harsh punishment. One person accused of thievery "was brought to the 'jail,' tied down and killed by Coke with a chain saw," according to court papers.
Carolyn Gomes, executive director of the Jamaicans For Justice rights group, said there have been few changes in Jamaica since Coke's capture and extradition. She said murders and other crimes dropped last year, but gang violence has been ticking back up in recent months, even after peaceful general elections in December.
The sense of impunity for crime dons "was broken with the extradition of Dudus," Gomes said. "(But) we have not seen any work at all done in communities to sever linkages with politicians and dons."
For nine months in 2009 and 2010, former Prime Minister Bruce Golding denied the U.S. extradition request for Coke because his justice minister said that U.S. investigators had used wiretaps in violation of Jamaican law.
When his government finally backed down in May, Jamaican security forces launched a hunt for Coke in Tivoli Gardens in a confrontation that left more than 70 people dead. He was captured by Jamaican authorities in June 2010 and extradited to the U.S., but investigations into the deaths have barely begun.
Jamaica's two major political parties have long relied on underworld bosses to help produce votes among slum dwellers.
At a recent press conference, Police Commissioner Owen Ellington said Coke's Shower Posse is significantly weakened but remains active in West Kingston.
In the rough area of Denham Town, a maze of narrow roads just across the street from Tivoli Gardens, a spray-painted scrawl in Jamaican patois still vows lifelong allegiance to the crime boss: "Coke fi Life, Dudus."
Region: Trade, Security, Economy and Integration [contents]
Charles Parkinson. Colombia Reports. March 16, 2012
The United States government has said it is "willing to listen" to a "legitimate" debate on the legalization of drugs at the upcoming Summit of the Americas, reported Colombian media Thursday.
Coordinator for the Summit of the Americas for the U.S. State Department John Feeley said, "We are ready to have a good dialogue between all countries to hear their views."
But he admitted, "For us, frankly, legalization is not the solution," during a speech given at the Center for Analysis for Inter-American Dialogue in Washington.
The U.S. position comes a month before the summit is due to take place in Colombia's Caribbean coastal city of Cartagena and at a time when the legalization and decriminalization of drugs are finding increasing support in Latin America.
While Colombian President Juan Manuel Santos has repeatedly backed a debate on the subject, Guatemalan President Otto Perez has firmly advocated decriminalization and will meet other Central American leaders later this month to discuss the subject prior to the Cartagena summit.
Mexico already decriminalized personal drug possession in 2009, with Colombia set to reenact a similar law, which Santos' predecessor Alvaro Uribe had scrapped. Santos has previously backed Mexican President Felipe Calderon's calls for drug legalization.
Forget the received wisdom: Chinese finance in Latin America is a win-win
Kevin Gallagher. The Guardian. March 16, 2012
Eyebrows hit the ceiling last month when it was found Chinese development banks lend more to Latin American governments than the World Bank and Inter-American Development Bank. A large proportion of Chinese finance in Latin America is packaged with oil-sale contracts commonly referred to as "commodity-backed loans", whereby nations ship hundreds of thousands of barrels of oil to China to help repay their debts.
These commodity-backed loans have been scorned, because it is assumed that China forces Latin Americans to "lock-in" to low prices for oil. With oil prices having gone through the roof, China must be making windfall profits: such is the received wisdom. But a closer look suggests the deals are better for South Americans than most believe.
New research shows that between, 2005 and 2011, the China Development Bank and the Export-Import Bank of China provided upwards of $75bn in loan commitments to Latin American governments. The Chinese committed $37bn to the region in 2010 alone, more than the World Bank, Inter-American Development Bank and United States Export-Import bank combined.
The majority of the loans went to non-creditworthy governments such as Argentina, Ecuador, Venezuela and Brazil (the very creditworthy nation in the group) and the lion's share of the finance is for energy, mining, oil, and infrastructure projects.
More than $46bn of the $75bn in loan commitments are commodity-backed.
Contrary to claims that China is making windfall profits, the country buys a pre-specified number of barrels of oil each day and pays spot prices on the day of shipment. China then deposits a portion of the revenue into the borrowers' account before withdrawing the funds from that account for loan repayment.
In fact, the oil-sale agreements allow China to give loans to otherwise non-creditworthy borrowers by reducing the risk of borrower default. The Chinese banks can siphon interest directly out of an oil payment, ensuring that, if the country wants to export oil to China, they will have to pay back the loan. And lower risk of default means lower-risk premiums and reduced interest rates for Latin American borrowers.
Latin Americans already pay a premium for Chinese finance. For example, a $10bn 2009 line of credit to Brazil was at 280 basis points above market rates (Libor), whereas a line from the World Bank to Brazil was 55 basis points above market. A 2010 line to Argentina for a rail system will also be $10bn and was 600 basis points above market, whereas recent World Bank loans to Argentina were 85 basis points above market.
Without the oil-backed loans, these rates could be even higher.
In this light, the deals appear to be win-win for China and Latin America. They allow China to put dollar reserves to productive use, expand the usage of the Chinese yuan, and secure oil. For Latin America, especially its less creditworthy countries, Chinese banks offer a new and large source of finance. Also attractive is that Chinese finance does not come with the infamous "conditionalities" that accompany western finance.
That said, Chinese finance is literally fuelling a region that is increasingly returning to commodity-led growth. Such growth has never proven to be sustaining, nor is it sustainable. The environmental consequences of commodity-driven growth are alarming, and our research shows that China's banks require very little in the way of environmental monitoring of such loans.
So Chinese finance in Latin America is not as bad as we are led to believe. But Latin Americans would do well to invest some of the money into productive development and environmental protection, or there won't be much left when the money and resources are gone.