Latin America News Round-up
April 3, 2012
Colombian Rebels Free 10, Raising Hopes of Peace Talks With Government
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
Brazil Industry Output Improves as Rousseff Readies Stimulus. Bloomberg
Brazil expands role in African arms market. UPI
Argentina Looks to Stem Imports of Mexican-Made Autos. EFE
Confronting Argentina's people-traffickers. BBC
'Chile's Matthew Shepard': country rallies around gay rights after murder. CSM
Northern Andean Region
Venezuela expands price controls to new products. AP
Colombian Rebels Free 10, Raising Hopes of Peace Talks With Government. New York Times
Colombia's Inspector General demands protection for land rights leaders amid assassinations. Colombia Reports
Medellín emerges as a Latin American trailblazer for local economic growth. The Guardian
Western Andean Region
Ecuador to boycott Americas summit over Cuba exclusion. BBC
Ecuador Posted Jan-Nov 2011 Fiscal Deficit Of $824.5 Mln. Dow Jones
Quinoa: How the Virtuous Wonder Food of the Andes Is Getting Down and Dirty. TIME
Peru Court Expects To Rule On Newmont Mine Project In 2 Months –Andina. Dow Jones
Mexico, Central America and Caribbean
US, Mexican leaders trade warnings on gun violence. AP
Mexico's PAN battling to retain presidency. AP
Someday, U.S. may catch up to Mexico on health care. AJC
Costa Rican finance minister resigns after reports that he underpaid property taxes. AFP
Dominican authorities investigating Haitian contracts of senator. Miami Herald
Region: Trade, Security, Economy and Integration
Unasur delivers statement supporting Argentina’s Falklands claim to Ban-ki-moon. Mercopress
"We Need to Change the Economics of Development". Inter-Press Service
Drugs and Business: Central America Faces Another Round of Violence. NACLA
Brazil and Southern Cone [contents]
Brazil Industry Output Improves as Rousseff Readies Stimulus
Andre Soliani. Bloomberg. April 3, 2012
Brazil’s industrial production rose more than economists expected in February, recovering part of the losses at the start of the year that is leading President Dilma Rousseff to unveil a battery of measures to protect manufacturers from weak economic growth.
Output rose 1.3 percent in February, higher than 40 of 44 estimates in a Bloomberg survey of analysts whose median estimate was for a 0.6 percent expansion. Output fell 3.9 percent from a year ago, the national statistics agency said in Rio de Janeiro today.
Rousseff is slated to announce today another round of measures to shore up support for manufacturers and stimulate investment so the government can reach its 4.5 percent growth target this year. The measures, which may include the elimination of payroll taxes for industries hardest hit by Brazil’s strong currency and more funding to the state development bank BNDES, comes on the heels of tax cuts on consumer goods and five interest rate cuts since August.
“I continue to see a very robust demand and only moderate growth for industrial output,”Luciano Rostagno, chief strategist at Banco WestLB do Brasil SA, said in a phone interview from Sao Paulo. “The currency is exacerbating structural problems that Brazil has, including inadequate infrastructure, high taxes and scarcity of skilled labor.”
The yield on interest rate future contracts maturing in January 2013, the most traded in Sao Paulo, fell one basis point to 8.86 percent at 9:21 a.m. local time. The real gained 0.2 percent to 1.8286 per U.S. dollar.
The real was the world’s best performing major currency in the first two months of the year, prompting the government to raise taxes on foreign loans and bonds. Since the beginning of March the currency slid 6.3 percent, the biggest devaluation in the world for the period.
Slowing Growth
Brazil’s economic expansion slowed to 2.7 percent last year, from 7.5 percent in 2010, as investors recoiled from emerging markets in the face of Europe’s debt crisis and after the government raised interest rates in the first seven months of the year, curbed spending and took measures to slow credit expansion amid a surge in prices.
Still, retail sales expanded in January at its fastest pace in 23 months, gaining 2.6 percent. At the same time industrial output plunged a revised 1.5 percent from the previous month in January.
Recovery Underway?
Today’s report shows that a recovery may be under way. Eighteen of 27 industries monitored by the statistics agency expanded output in February, led by a 13.1 percent surge in auto production during the month. Assembly of capital goods, a barometer of investment, rose 5.7 percent after plunging 16.1 percent in January. The moving three-month average rose 0.1 percent, the first positive reading since July 2011.
Still, even though Latin America’s biggest economy may be recovering the central bank sees it expanding only 3.5 percent this year. Analysts surveyed by the bank see growth of only 3.2 percent.
Steelmakers in Brazil struggled last year as slowing growth reduced demand from cars and home appliances. Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest by output, saw profit fall 84 percent in the fourth quarter as production of flat-rolled steel, which Usiminas supplies to carmakers, declined 6.6 percent in Brazil last year.
Carmakers including Daimler AG’s Mercedes-Benz and General Motors Co are among manufacturers that have ordered mandatory worker furloughs in Brazil this year as assembly lines are idled by the weak economy.
Brazil won’t play the “idiot’s role” and let its currency appreciate while rich nations artificially devalue theirs to gain market share for their products, Finance Minister Guido Mantega said on March 13.
To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net or
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
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Brazil expands role in African arms market
UPI. April 2, 2012
SAO PAULO, April 2 (UPI) -- Brazilian manufacturer Embraer is having more success in Africa than in the United States with its winning light aircraft Super Tucano, which is challenging rivals' market share in the category.
Embraer's only deal for the turboprop in the United States collapsed last month after the U.S. Air Force unexpectedly canceled an order for 20 planes to support operations in Afghanistan.
It also dashed hopes of a resulting manufacturing plant creating U.S. jobs in an Embraer partnership with independent defense manufacturer Sierra Nevada Corp.
The cancellation created a diplomatic furor that cast a shadow on Boeing's bid to win a multibillion fighter jet contract in Brazil.
While the Air Force Super Tucano goes through the motions of diplomacy and commercial rivalry, amid U.S. official assurances the aircraft may still win the deal, Embraer is using its substantial marketing resources and financial incentives to secure customers elsewhere.
The EMB 314 Super Tucano, also known as ALX or A-29, is a machine made for financially strapped armed forces, defense analysts said, citing its competitive upfront outlay and running costs.
A turboprop aircraft designed for light attack, counterinsurgency, close air support and aerial reconnaissance missions in low threat environments, the Super Tucano is also good at providing pilot training.
Embraer's success so far lies in the plane's low cost of $9 million-14 million apiece and operational costs of $430-$500 an hour -- factors that drew the Air Force to the aircraft before the deal got snarled up in controversy with rival U.S. manufacturers.
Embraer said it booked $180 million in orders for the Super Tucano to be deployed in counterinsurgency and border missions in Angola, Burkina Faso and Mauritania.
The aircraft is used by the Brazilian air force in similar roles in the Amazonian border region, where Brazil faces drug trafficking and illegal immigration.
Burkina Faso already has received three aircraft for border patrol missions, Embraer said. Another six will be supplied to Angola's air force, three of them this year.
Details of the Mauritanian order, due for delivery next year, weren't immediately available. It was also not clear if the three African countries paid the same price. With the total number of aircraft unknown, defense analysts said they remained unclear about the price paid by each of the countries for their aircraft.
The Super Tucano was a star exhibit at the just ended FIDAE defense and air show in Santiago, Chile.
Embraer Defense and Security President Luiz Carlos Aguiar said, "The Super Tucano is highly efficient and presents low operating costs.
"Its capability for surveillance and counter-insurgency missions makes it ideal for service on the continent of Africa."
Brazilian government support has helped Embraer score successes in markets that would be inaccessible to U.S. rivals because of congressional constraints and administration policies on qualifying recipient countries for U.S.-made military equipment.
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Argentina Looks to Stem Imports of Mexican-Made Autos
EFE. April 2, 2012
BUENOS AIRES – Argentina is looking to reduce its imports of automobiles manufactured in Mexico in light of that country’s refusal to revise the 2002 bilateral automotive trade agreement, the press reported, citing officials.
Mexico is unwilling to discuss the matter and Argentina is determined to revise the agreement, which has led to a deficit in the bilateral automotive trade since 2008, the officials said.
Argentine Industry Minister Debora Giorgi has been awaiting a reply from Mexico since early March, when she requested a meeting with Mexican officials to discuss the matter, the officials said.
Argentina posted a deficit of around $1 billion last year in automobiles and automotive parts with Mexico, and the South American country now wants its trade partner to increase its purchases from Argentine plants.
Retaliatory measures taken by Argentina would affect imports of vehicles made by Japan’s Honda and Nissan, Germany’s Volkswagen and U.S.-based Ford and General Motors, press reports said.
Mexico, meanwhile, has agreed to renegotiate its automotive trade agreement with Brazil.
The two countries reviewed their bilateral free-trade deal on autos over the past few weeks due to Brazil’s concerns about a spike in imports from Mexico and the potential damage that has caused to Brazilian manufacturers.
Mexico and Brazil also agreed to exchange trade missions to bolster trade relations, which had become frayed due to concerns expressed by the South American country.
Argentina rejected the allegations made Friday by the United States, the European Union and other countries in the World Trade Organization, or WTO, that it was seeking to implement protectionist policies.
Buenos Aires contends that the United States and European countries have expanded auto sales in Argentina markedly while racking up the most complaints for protectionism and unfair trade practices before the WTO. EFE
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Confronting Argentina's people-traffickers
Vladimir Hernandez. BBC. April 2, 2012
She has survived two murder attempts, her house was burnt down, she has received countless death threats, but nothing has stopped Susana Trimarco from looking for her missing daughter for the last 10 years.
On 3 April Maria de los Angeles Veron, known as "Marita", went missing.
In February, 13 people accused of kidnapping Ms Veron and selling her to traffickers who forced her into prostitution went on trial in a court in Tucuman province, in the north west of Argentina.
This case has become over the years a symbol of the fight against human trafficking in Argentina and most of South America. Especially because of what Mrs Trimarco has done over the last decade.
In the search for her daughter she infiltrated herself into human trafficking gangs pretending to be interested in "buying" women. The information gathered by these actions led to police raids which rescued dozens of women who were being sexually exploited.
Mrs Trimarco later launched the Fundacion Maria de los Angeles, named after her missing daughter. Since 2007 it has helped rescue hundreds of victims of sexual exploitation and human trafficking.
Acts to commemorate Ms Veron's disappearance will be held today in Tucuman, and her mother is adamant that she will have no rest "until I find Marita".
'Collusion by officials'
"3 April 2002 was the saddest day of my life. I will never forget that day, as it was when my daughter's life was destroyed," Mrs Trimarco tells the BBC.
"This is a terrible pain I have permanently carried in my soul. I'm almost used to living with it."
Talking to Mrs Trimarco is telling. Her stern face rarely seems to smile. She is not rude, but is strong in her words and gestures.
"When Marita did not come back that day, I and my husband felt something terrible had happened. As a parent you just sense these things," she says.
She and her husband Daniel, who died in 2010, asked at hospitals, and spoke to police and neighbours about Marita. No-one knew her whereabouts.
After several days there was a breakthrough. Someone had seen her being pushed inside a vehicle by three men.
And weeks later a prostitute confirmed their worst fears. They were told that their daughter had been "sold" to traffickers.
Mrs Trimarco says the authorities in the province at the time, as well as former members of the police and the judiciary, were in collusion with the traffickers, which is why it was so difficult to find her daughter.
She has recently testified in court, giving names and evidence backing her claims.
There are former police officers among the 13 people accused of Ms Veron's kidnapping. All deny the charges.
Raid on brothel
A police detective, a friend of her husband, was a key figure in their search.
With the detective's help, three months after Ms Veron's disappearance, they finally gathered enough information for the police to conduct a raid at a suspected brothel where their daughter could have been held.
"There were about 60 women, all scantily dressed. Marita was not among them. I told these women that whoever was there against their will, they should step forward and come with us. Immediately a young girl rushed into my arms and did not let me go until we left that place," says Mrs Trimarco.
The girl was called Anahi. Crucially, she gave details that confirmed that Ms Veron had been there, but was taken away before the raid.
Anahi stayed for some time with Mrs Trimarco, until she was able to return to her family after receiving legal and psychological help. She is now a key witness in the trial.
Armed with the information from Anahi, Mrs Trimarco decided to infiltrate human trafficking gangs, pretending to be a procurer of women.
"I was not a public figure then, so that made it simple. I did not even tell my husband I was going to do this."
She arranged a visit to a brothel in her province, where the women were, literally, sold.
"Each one had a price. There were even underage girls as young as 14. All of them seemed terrified. When you looked at them they would lower their gaze and try to cover their barely dressed bodies with their hands", says Mrs Trimarco.
"The coarse language of these girls showed the terror and pain they were going through," she adds.
Mrs Trimarco did this three more times. The information she gathered led to a police intervention.
At least 129 women were rescued by the authorities as a direct consequence of her actions. Many stayed at Mrs Trimarco's home.
New anti-trafficking law
"It came to a point where I just did not have the capacity to help them all. That is when I decided to open a foundation," she says.
In 2007 she set up her foundation, and today nearly 20 people, including lawyers, psychologists and social workers, help women affected by trafficking.
The foundation has managed to get at least 800 cases of alleged sexual exploitation into Argentine courts, which led to the rescue of almost 400 victims.
Mrs Trimarco was among those given the first US Secretary of State International Women of Courage award in 2007 by Condoleezza Rice, for her efforts against human trafficking.
And in 2008 Mrs Trimarco's struggle and story helped get legislation passed in Argentina that for the first time made human trafficking a crime.
Since this law came into effect almost 3,000 people have been rescued from human traffickers in Argentina.
But Mrs Trimarco's daughter is still missing.
"I have found victims who have been forced into prostitution for up to 12 years. My daughter can still be alive," she says.
She is hoping the current trial, expected to end in the next few months, will provide new information about where her daughter may be.
"I told the accused: 'If I can't have peace, you will never have peace until she is given back to me'.
"I will keep looking for her, until I find her."
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'Chile's Matthew Shepard': country rallies around gay rights after murder
Steven Bodzin. Christian Science Monitor. April 2, 2012
Thousands of mourners thronged the family of 24-year-old Daniel Zamudio as they carried his battered body to his grave on Friday, a month after a violent attack apparently motivated by anti-gay sentiment.
As the family drove through Santiago, bystanders threw flowers, cheered, and chanted for justice. The brutal murder has shocked Chileans and has sent support for gay rights soaring in a country that has lagged behind many of its neighbors in addressing discrimination based on sexual orientation. The case spurred the government to fast-track an antidiscrimination law that has been stalled in the legislature for seven years.
“It’s a historic day. Thousands of people came out to mark a 'before' and an 'after' for the country,” Jaime Silva, a lawyer representing Zamudio’s family, said in an interview at the funeral. “This crime grabbed attention for its brutality. It was the most brutal attack we’ve seen since the days of the dictatorship. And it was utterly senseless. If it happened to Daniel, it could happen to you or me or any one of us.”
Zamudio was assaulted March 3 by four men in a park, one of whom apparently knew Zamudio was gay. According to doctors and a confession by one of the alleged attackers, they beat him severely and carved swastikas into his skin. He bled in the park before being taken to a hospital a block away, where, three weeks later, he died.
Like the killing of Matthew Shepard in the US in 1998, the case has brought discussions of gay rights out of private homes and university campuses and into mainstream politics. If anything, the Zamudio case has had a bigger and more immediate impact, as the assault and eventual death took place in the capital, where TV stations profiled Zamudio's family and made his social-media photos into widely recognized icons.
Chile has seen attacks on gay, lesbian, and transgender people before, but none has brought out so much support for the family and such universal condemnation of the attackers, says Zuliana Araya, of the Aphrodite Transgender Union in Valparaiso.
“I think it’s the swastikas,” she said.
Still, there is no guarantee that the gay community’s call for a law against discrimination or hate crimes will be passed. Legislators of the conservative UDI party have said they don’t want to open the door to adoption by gay couples. “Through this window, someone could come along tomorrow and claim that there is discrimination against two people of the same sex who want to adopt a child, to which I am completely opposed,” Felipe Ward, a UDI senator, told the TVN network.
While Chile is ahead of its South American peers on economic output per capita and controlling violent crime, it is falling behind on gay rights. Neighboring Argentina began to allow gay marriage in 2010, and Brazil prohibits most discrimination on the basis of sexual orientation.
Gay sex was illegal in Chile as recently as 1999, while Brazil allowed it as of 1831, according to a report by the International Lesbian, Gay, Bisexual, Trans and Intersex Association. Bolivia, Colombia, and Ecuador all have constitutional provisions forbidding discrimination on the basis of sexual orientation, while no such laws exist in Chile.
The Inter-American Court of Human Rights has put Chile on notice that it needs to do more to protect gays and lesbians. A binding March 21 decision told Chile to compensate a mother who lost custody of her three children because she is a lesbian. The decision, which said Chile had violated the rights to private life, equality before law, and rights of the child, also instructed the country to educate civil servants about gay families.
The real delay to gay rights in Chile may be culture more than law. After Zumudio’s funeral, about a thousand mourners gathered for a march to the site where he was attacked. One woman yelled from a passing bus, “Go home,” using derogatory terms for homosexuals, while others on the bus laughed. Later, the march ran into a rally of soccer fans, who picked that moment to sing a cheer referring to a rival team with racist, sexist, and homophobic slurs.
Asked whether they supported gay rights, several of the soccer fans said yes. They said they saw no contradiction between chanting insults and supporting gay rights.
Northern Andean Region [contents]
Venezuela expands price controls to new products
AP. April 2, 2012
CARACAS, Venezuela (AP) — Venezuela is trying to contain inflation by expanding government price controls to a list of new products including diapers, laundry detergent and bottled water.
The new price controls that take effect starting this week affect 19 types of products.
Karlin Granadillo is the official overseeing the rules, and she told state TV on Monday that businesses caught violating the price controls may be temporarily closed or fined.
The government has for years set prices for various food items. The expanded price controls were approved in a law last year.
President Hugo Chavez said on Saturday that monthly inflation declined from 1.1 percent in February to 0.9 percent in March. Annual inflation stood at 25.6 percent in February.
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Colombian Rebels Free 10, Raising Hopes of Peace Talks With Government
WILLIAM NEUMAN and JENNY CAROLINA GONZÁLEZ. New York Times. April 2, 2012
CARACAS, Venezuela — Colombia’s main rebel group on Monday released four soldiers and six police officers it had held hostage for as long as 14 years. The 10 men were thought to be the last remaining noncivilian captives held by the group, which has used kidnapping and drug trafficking to help finance its nearly five-decade war against the Colombian government.
The emotional release of the hostages was sure to feed hopes for peace talks between the government and the rebel group, the Revolutionary Armed Forces of Colombia, known as the FARC. But many analysts said the two sides were still far from achieving the mutual trust that would allow meaningful progress toward ending the conflict.
President Juan Manuel Santos of Colombia, in a brief television appearance, said the release was an important — but not a sufficient — step for peace talks, and he demanded that the FARC release all civilian hostages it is still holding for ransom. The group pledged in February to renounce kidnapping altogether, although it has not renounced violence. Eleven government soldiers were killed in a FARC attack last month.
The freed men were picked up from a secret rendezvous site by helicopters provided by the Brazilian government. They were led off the helicopters by medical personnel, after touching down at an airstrip in Villavicencio, southeast of Bogotá, the capital, at 5:43 p.m.
“Freedom took a long time, but now it is yours,” Mr. Santos told the men, one of whom led a peccary, a small piglike animal that appeared to be a pet. Another, smiling widely, wrapped himself in a Colombian flag.
The FARC and the Colombian government have had many false starts and setbacks in past efforts to find an end to the conflict, and analysts said that both sides were likely to proceed cautiously.
“At the very least it’s a first step that one should attempt to follow up with other actions on both sides,” said Mark L. Schneider, senior vice president of the International Crisis Group in Washington, a nongovernmental group that works to defuse conflicts. “You want to try and build slowly a set of actions that reflect a greater degree of confidence that permit you to move forward with ways to actually end the conflict.”
Mr. Santos, a former defense minister who took office in 2010, has continued to press militarily against the FARC while taking other steps that are seen as potentially opening the way for a peace process with the group. The United States has designated the group a terrorist organization and has given billions of dollars in military and antinarcotics aid to Colombia.
Last year Mr. Santos signed a law to compensate victims of the armed conflict by paying money to the families of people who were killed and restoring land to those whose property was seized by armed groups, including right-wing paramilitary groups.
Mr. Santos appears intent on treading carefully, keenly aware of the missteps of previous presidents in seeking peace with the guerrillas.
The FARC has been badly battered, which analysts said could make it more willing to enter negotiations with the government. At least 69 of the group’s fighters were killed in two government attacks late last month. Last November its top commander, Alfonso Cano, was killed by Colombia’s armed forces. A year earlier, the military killed one of the group’s key field commanders, a guerrilla known as Mono Jojoy.
A military intelligence official estimated that the group has 9,200 armed members. Other estimates put the group’s strength at its peak in the 1990s at 17,000 fighters.
Humanitarian groups have called on the FARC to release all hostages, including an unknown number of civilians kidnapped for ransom.
“We have to wait to see what the real willingness of the FARC is, translated into concrete actions, to demonstrate to Colombians that they are really going to give up kidnapping,” said Olga Lucía Gómez, director of the País Libre Foundation, a group that focuses on the issue of kidnapping.
The group has documented 405 cases in which it says the FARC kidnapped but did not release people in the last decade, even though ransoms were often paid. In many cases — more than half of which occurred before 2004 — the victims may have died or been killed, but some are thought to still be in the group’s hands.
William Neuman reported from Caracas and Jenny Carolina González from Bogotá, Colombia.
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Colombia's Inspector General demands protection for land rights leaders amid assassinations
Brandon Barrett. Colombia Reports. April 2, 2012
Colombia's Inspector General requested the immediate implementation of a heightened protection plan for people involved in the land restitution process, in a letter to government and state bodies.
"The Inspector General calls on the various government institutions as they are concerned with the issue, to present and put in place an urgent interim plan for the prevention of displacement and the protection of individuals(...)" the letter stated.
Community leaders working to restore land to people displaced by illegal armed groups have long been a target of assassinations, with at least 20 restitution activists murdered between August 2010 and October 2011, according to a report from the NGO United States Office on Colombia.
The letter came days after the high-profile death of land rights campaigner Manuel Ruiz. The community leader from the department of Choco was found dead March 27 after evidence of torture. His 15-year-old son was with Ruiz at the time they disappeared and is also believed dead.
Ruiz had unsuccessfully requested government protection three times since last year, according to documents reviewed by magazine Semana.
Colombian Congressman Guillermo Rivera proposed government officials with more than two security personnel should give up a bodyguard to protect threatened land rights leaders, reported by Radio Caracol Friday.
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Medellín emerges as a Latin American trailblazer for local economic growth
Milford Bateman. The Guardian. April 3, 2012
Latin America has until very recently been marked out by high levels of poverty, inequality, exclusion, informality, social injustice and, not surprisingly, violence. Unfortunately, the neoliberal policies adopted in the region from about 1970 to 2000 played an important part in significantly exacerbating these historic economic and social problems.
Solutions to these issues are widely known, but – frustratingly – cannot easily be undertaken. The unequal structure of land ownership in many Latin American countries, for example, one of the worst legacies of European colonisation, cannot easily be overturned in the face of determined resistance from the current landed elites. These legacies need to be dealt with over the longer term if fundamental change and social justice is to come to Latin America.
However, one important aspect of development strategy today, mainly taking place locally, involves trying to ensure future development outcomes are as equitable, sustainable and pro-poor as possible. A pioneer in this regard is Medellín, in Colombia. Once known as the most violent city on Earth, thanks to its narco-wars and paramilitary violence, Medellín has become something of a laboratory for heterodox local economic development policies paying very real economic and social development dividends, especially for the poor. A new paradigm of community-driven local economic development policy is perhaps in the making, with four key areas gaining ground.
First, as in most parts of Latin America, business taxes in Medellín do not raise anywhere near the required revenue. There are far too many loopholes and ways to avoid paying. Consequently, other sources of revenue have to be sought. The most important of these is found in the shape of Empresas Públicas de Medellín (EPM), the main regional utilities provider, owned by the municipality. In the same way, the huge, state-owned Codelco copper producer has generated a major chunk of Chile's central government budget, EPM has – thanks to effective management – contributed about 30% of its net revenue into the city budget. Importantly, the company's commercial position has not been compromised. If anything, community ownership has strengthened EPM's operations, because locals have become genuinely proud of "their" company's contributions to the city's economic development and culture.
Second, there is growing acceptance in Medellín (as elsewhere) that the high-profile microfinance model has failed to improve the situation of the poor. In Medellín, this negative outcome is increasingly denoted by the phrase "chasita economy", chasitas being the small trolleys the poor use to move around the community while selling simple food and non-food items.
Thanks to microfinance, the streets of Medellín are increasingly lined with chasitas and other unproductive informal microenterprises. Accordingly, moves are now underway to phase out the microfinance model and establish a more proactive developmental financial structure, one that prioritises the longer-term emergence of a sustainable enterprise sector. Change will likely start with Banco de los Oportunidades, a Medellín microfinance initiative. With a major financial injection now confirmed, it is hoped that a reformed version of the scheme will evolve, moving away from microfinance and starting to fund the required base of growth-oriented, innovative enterprises operating at or near minimum efficient scale.
Third, the Medellín authorities have found that financially self-sustaining, private sector-owned, local-led development agencies – inspired by neoliberal "full cost recovery" models – do not work. Such agencies typically shy away from the work most urgently required for local economic development, instead getting involved with more lucrative consulting activities. So Medellín's network of business development agencies, the centres of zonal development of companies (CEDEZOs), is now targeting growth-oriented small and medium businesses, rather than just helping lots of chasita-type microenterprises that typically survive no longer than a year or two. In addition, inter-enterprise efficiency-enhancing structures such as clusters, business chambers and entrepreneurs associations have been created, and are being patiently strengthened.
Finally, and an entirely appropriate development given that 2012 is the UN Year of Cooperatives, there is a new focus in Medellín on co-operative enterprise development. Marketing co-operatives have the potential to reduce the operating costs of individual members through bulk buying of inputs, sharing of information, and technology. With lack of clients an increasing barrier to enterprise development, there is much to be gained from more effectively exploiting the existing level of demand through such collective structures. Genuine workers' co-operatives are also being talked about as a way of promoting a more consensual and equitable way of doing business, especially involving the poor. With huge inequality still prevalent in Medellín, the hope is that the promotion of worker co-operatives will provide important examples of an enterprise structure in which it is perfectly possible to combine economic efficiency with high levels of equality, dignity and democracy.
Hopefully, the positive local economic development model beginning to emerge in Medellín might not only eventually replace the old negative images and associations people have of the city, but also inspire other communities fighting poverty, inequality and social injustice.
Western Andean Region [contents]
Ecuador to boycott Americas summit over Cuba exclusion
BBC. April 3, 2012
President Rafael Correa of Ecuador says he will boycott this month's Summit of the Americas in Colombia because Cuba is not invited.
Mr Correa announced the move in a letter to President Juan Manuel Santos of Colombia.
He called Washington's veto of Cuban participation "intolerable", saying its exclusion was not by consensus.
US President Barack Obama is among regional leaders due to attend the summit, held every three years.
"After some reflection I have decided that while I am the president of Ecuador, I will not attend any Summit of the Americas until it begins to make the decisions required," Mr Correa said in his letter.
"There has been talk of lack of consensus, but we all know that this is the veto of foreign powers."
Havana talks
So far, Mr Correa is South America's only leader to confirm he will not attend the meeting, which opens in Cartagena on 14 April.
He proposed last month that the presidents of the leftist Bolivarian Alliance - which includes Venezuela, Bolivia and Nicaragua - all boycott the summit.
However, the presidents of all three nations have since confirmed they will attend.
President Santos announced last month that Cuba would not be invited, following talks with Cuban President Raul Castro in Havana.
Washington says Cuba should not be allowed to attend as it is not a member of the Organization of American States (OAS), which backs the event.
The US says Cuba does not meet OAS charter requirements that its member countries be democracies.
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Ecuador Posted Jan-Nov 2011 Fiscal Deficit Of $824.5 Mln
Dow Jones. April 3, 2012
QUITO (Dow Jones)--Ecuador's central government posted a fiscal deficit of $824.5 million during the first 11 months of 2011, a Central Bank report said.
In the prior year between January and November of 2010, Ecuador's central government had registered a deficit of $852.3 million.
The report said that during the first 11 months of 2011, revenue totaled $15.16 billion while total expenditures were $15.99 billion. This compares with $12.58 billion in revenue and $13.44 billion in spending a year earlier.
The central government registered a primary deficit of $448 million during the first 11 months of 2011, compared with a primary deficit of $422 million a year earlier.
The primary balance doesn't include interest payments on Ecuador's debt.
Ecuador's central government posted a fiscal deficit of $2.9 billion in 2010.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
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Quinoa: How the Virtuous Wonder Food of the Andes Is Getting Down and Dirty
Jean Friedman-Rudovsky. TIME. April 3, 2012
As a child, Benjamin Huarachi, 55, ate quinoa almost every day, as a matter of practicality. The crop is one of few that thrive on Bolivia's high plains, 13,000 ft. (4,000 m) above sea level, explains the farmer. His impoverished family had no idea that the colorful tall tufts yield one of the healthiest foods on the planet. Nor did Huarachi imagine that his childhood staple would one day bring economic success. "Quinoa was always comida para los indios [food for Indians]," he says, almost laughing, "Today it's food for the world's richest."
Over the past decade, the "Andean superfood" has become a pinnacle product for First World foodies. Often mistaken for a grain, quinoa is actually a chenopod (cousin to a beet); rich in minerals, it's the only vegetable that's a complete protein. To the added delight of politically correct health nuts, it's produced by small-scale Andean farmers like Huarachi who reap direct benefits of its international popularity. Recently, those benefits have skyrocketed: quinoa's price has tripled since 2006, triggering a boom in the poorest region of South America's poorest country. "Now we've got tractors for our fields and parabolic antennas for our homes," says Huarachi, who's also a board member of Bolivia's largest quinoa-growers association, ANAPQUI.
Growers relish in the moment and the attendant prosperity. "My quinoa sells like hotcakes," says Fidencia Huayllas, grinning. She's spent her boom cash on expanding her mud-and-brick home. Seventy percent of the region's high school graduates can now afford to attend university, Huarachi says, "thanks to quinoa." He leans forward, face brightening: "In 1983, 100 lb. of quinoa sold for 25 bolivianos — the price a T-shirt. Now that sack goes for $100 [700 bolivianos]. That's a lot of T-shirts."
But the windfall could become a double-edged sword. In February, violence over prime quinoa-growing territory left dozens injured, and land conflict is spreading. "Sure, the price of quinoa is increasing," says Carlos Nina, a local leader in Bolivia's quinoa heartland, "but so are our problems." Apart from increasing feuds over property rights, these include the collapse of the traditional relationship between llama herding and soil fertilization, with potentially disastrous consequences of quinoa's "organic" status, and the ironic twist that the children of newly prosperous farmers no longer like eating quinoa, contributing to dietary problems.
According to historians, quinoa cultivation originated in the Altiplano around 3,000 B.C. Legend says it was a gift from the gods to the indigenous Aymara: a highly nutritious crop as small compensation for being saddled with one of earth's harshest climates. (It's an easy story to believe, since only divine intervention seems to explain how anything could sprout from the high plateau's rocky, sandy soil.)
The present from the heavens has always been a base of the Andean diet, but only recently did the crop begin its international journey. In 1993, NASA researchers recommended it as part of a potential space-colony diet. Over the following decade, the food gained wider appeal, going from hippie hype to Costco convenient practically overnight. "Quinoa was in the eye of the storm," says Bolivian-born Sergio Núñez del Arco, founder of Andean Naturals, the U.S.'s largest quinoa importer, explaining that the product fit almost every recent health craze: whole grain, gluten-free, fair trade, organic.
Approximately half the world's supply is now grown in Bolivia. (Peru is a close second, Ecuador third.) "We worked hard to keep quinoa out of the hands of middlemen," says ANAPQUI's general secretary Ciprian Mayorga inside the association's processing plant, the entrance to which is now manned by an armed private security guard. Members' harvests arrive there, where a thorough washing removes the seeds' bitter outer layer before its direct export to the U.S. and Europe. Strong growers' unions have also kept multinational agro companies at bay. Production remains family based, average plots range from 1 to 15 hectares (2.5 to 37 acres). Free of genetically modified organisms, or GMOs, Bolivia's export is 90% organic. This fair-trade model has elevated the superfood's image. "You can feel good about drinking well," says reviews for France-based Fair's new (Bolivian-grown) quinoa vodka, echoing virtually every quinoa ad campaign out there. Consumers feel confident supporting a product with just roots.
But despite good intentions, a dangerous cycle may be under way. "When you transform a food into a commodity, there's inevitable breakdown in social relations and high environmental cost," says Tanya Kerssen, a food-policy analyst for the U.S.-based food and development institute Food First. February's conflict is a harbinger, notes Kerssen. Global warming has led to fewer frosts, resulting in more prime land available for quinoa cultivation. That has led to a near free-for-all. For three days in February, hundreds of farmers fought over what was once abandoned land. Four people were temporarily kidnapped, dozens were injured and, according to local leader Nina, a dynamite blast left one man armless. "I've never seen anything like this in my life," says Nina, 70, adding that since the government is ignoring pleas for military monitoring of the upcoming harvest, the situation will likely worsen.
What's more, territorial bickering is spreading. "Every week, I visit two or three communities with land disputes related to quinoa," says Nina, who, as mallku (traditional indigenous authority) must resolve these quarrels personally. Many families don't have land titles, he explains — they weren't needed when the ample arid soil was communal herding ground. Also, quinoa's high sale price is prompting a reverse migration of those who had long ago abandoned the Altiplano, triggering property disagreements.
Environmental problems are emerging too. Traditionally, quinoa fields covered 10% of this fragile ecosystem, llamas grazed on the rest. Now, llamas are being sold to make room for crops, provoking a soil crisis since the cameloid's guano is the undisputed best fertilizer for maintaining and restoring quinoa fields. (Other options like sheep poop appear to encourage pests.) Increased production also means erosion and strains on limited water sources. "It's frightening to think that a region that has sustained Andean civilizations for millennia could become sterile," says Kerssen.
Equally troubling is the fact that growers themselves are eating less of their gift from the gods. Last year, the Bolivian government acknowledged that national quinoa consumption over the previous five years had decreased 34%. Now there's worry of malnutrition in the quinoa heartland as growers admit that it's tempting to sell their entire harvest while prices are high.
But, they add, decline in rural consumption can't be blamed entirely on price spikes. "My kids eat quinoa — because they are obligated to," says Huarachi, explaining that the next generation simply prefers Coca-Cola over homemade quinoa soda, cookies over quinoa bread. Ironically too, growers note that as villagers climb out of poverty, a badge of upward mobility is the replacement of the nutritious comida de indios with processed "city" foods.
The Bolivian government says it includes quinoa-based products in school breakfasts and maternal-nutrition baskets nationwide. "We've got people in [the Amazon] eating quinoa," says Bolivia's Vice Minister for Rural Development and Agriculture, Victor Hugo Vásquez, explaining that before quinoa's mass production for export, Bolivians outside of the western highlands didn't even know it existed. The government also provides low-interest loans to small farmers, aiming to increase production, which could eventually make the product more affordable there.
But it may be too little too late, says Kerssen: "Quinoa is now a free-market phenomenon. This is a boom, and there's definitely going to be a bust."
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Peru Court Expects To Rule On Newmont Mine Project In 2 Months -Andina
Dow Jones. April 2, 2012
LIMA – Peru's Constitutional Tribunal, the country's highest court, is expected to make a decision on a case involving Newmont Mining Corp.'s (NEM) stalled Minas Conga copper and gold project in two months, the president of the court said.
The tribunal began hearing oral arguments for the case last Wednesday. The central government wants the court to declare invalid an ordinance by the regional government of Cajamarca that would ban work on Minas Conga.
"A sufficient debate shouldn't take more than two months. That is approximately when we could have the sentence," state news agency Andina reported on Monday the tribunal's president, Ernesto Alvarez, as saying.
The president of Cajamarca's government, Gregorio Santos, has been one of the main opponents of Minas Conga. Work on the project was suspended in November following days of protests by residents concerned about its potential impact on the local water supply.
The central government has hired three international consultants to review Minas Conga's environmental impact study, an important permit that was approved in October 2010. The review could be completed as early as this week.
Minas Conga is Peru's biggest mining project, requiring an investment of up to $4.8 billion. The company hopes to start production in late 2014 or early 2015.
Production is seen at an average annual output during the first five years of 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper.
Newmont controls 51.35% of Minas Conga, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake and the International Finance Corp. owns the remainder.
Mexico, Central America and Caribbean [contents]
US, Mexican leaders trade warnings on gun violence
AP. April 3, 2012
WASHINGTON — The explosion of drug-fueled violence along Mexico's border with the United States could harm relations between the two nations, President Barack Obama said Monday; Mexico's leader retorted that much of the problem of drugs and guns begins on the U.S. side of the line.
In the thick of political contests in both the United States and Mexico, Obama and Mexican President Felipe Calderon traded unusually direct claims about the cause and effect of the drug violence that has consumed a swath of northeastern Mexico. They were cordial and complimentary to one another, but did not hide the degree of worry on both sides about a six-year spasm of violence that has killed more than 47,000 people.
"It can have a deteriorating effect overall on the nature of our relationship," Obama said. "And that's something that we have to pay attention to."
Calderon made a government crackdown on warring drug cartels the hallmark of his six-year term, which expires later this year. His center-right party has seen its election chances fall in the face of a wide perception in Mexico that the crackdown has not worked.
The Mexican presidential election that formally began last week will culminate with elections July 1.
Beyond the terrible human cost, the battling drug gangs in Mexico and in Central America cause economic problems and political and security concerns for the United States, Obama said.
"If they're undermining institutions in these countries, that will impact our capacity to do business in these countries," Obama said following meetings with Calderon and Canadian Prime Minister Stephen Harper.
The three leaders launched a new bid to pare back regulation and boost North American trade.
After a one-day summit, Obama said the United States has trimmed outdated and burdensome rules in talks with both its neighbors, but all three countries will now go beyond that.
"Our three nations are going to sit down together, go through the books and simplify and eliminate more regulations that will make our joint economies stronger," he said.
Obama noted trade among the three neighbors now tops $1 trillion a year, and he wants to see that number rise. "This is going to help create jobs," he said.
The summit ranged broadly across issues of energy and climate change, immigration and the fight against the drug trade.
Obama warned of a possible "spillover effect" on American tourism and American expatriates living in Mexico and bordering nations that also have had problems with drug cartels.
Sounding testy, Calderon remarked that no American "spring-breakers" were harmed in Mexico this year. Mexico is a favorite place for U.S. college students to spend their springtime holiday breaks from school.
The flow of guns, especially assault weapons, from the United States to Mexico sabotages the work of his government in fighting the drug gangs, and the U.S. government has not done enough to stop it, Calderon said.
"Despite the perception of my country, last year 23 million tourists came to our country by plane, plus another 7 million in cruise ships, plus another 50 million," who came by land, Calderon said, during a rambling defense of his nation's overall safety and stability.
He credited Obama with making an effort to reduce the gun traffic, but said Obama faces "internal problems ... from a political point of view." That is a reference to Republican opposition in Congress and wide opposition from Republicans and gun-rights advocates elsewhere to a new assault weapons ban or other curbs on gun sales that feed the Mexican market.
Calderon singled out the high number of gun shops along the U.S.-Mexico border, dangling the possibility that there is a deliberate attempt to profit from the Mexican market.
The Obama administration claims that in the absence of an assault rifle ban that expired before Obama took office, it is working to tighten inspections of border checkpoints and require reporting of multiple sales of large weapons.
Obama acknowledged the U.S. role in creating the demand the Mexican drug market supplies.
"The Mexican government has taken this very seriously, at great cost to itself," Obama said during a Rose Garden news conference dominated by U.S. domestic political fare. We have an obligation to take it just as seriously, in part because we are the ultimate destination for a large chunk of this market."
The Obama White House has ruled out any consideration of legalizing drugs such as cocaine or heroin, which would undercut the criminal cartels.
Notable by its absence from a post-summit news conference in the Rose Garden was the controversial Keystone XL oil pipeline from Canada's oil sands in Alberta through the United States to the Gulf of Mexico. Obama shelved the plan pending further review - and has endured ferocious Republican attacks ever since, with Republicans calling the move a blow to job creation and U.S. energy needs. He maintains Republican leaders in Congress forced his hand by insisting on a decision before an acceptable pipeline route was found.
Harper has voiced disappointment with Obama's decision. He also visited China in February to explore alternatives. Canada has the world's third-largest oil reserves - more than 170 billion barrels - after Saudi Arabia and Venezuela, and daily production of 1.5 million barrels from the oil sands is expected to rise to 3.7 million by 2025.
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Mexico's PAN battling to retain presidency
OLGA R. RODRIGUEZ. AP. April 3, 2012
MEXICO CITY -- Expectations were high when a maverick businessman favoring cowboy boots and plain talk won the presidency in 2000, defeating the party that had governed Mexico for 71 consecutive years.
Mexicans hoped that their country would take a new course under Vicente Fox's center-right National Action Party, or PAN, with government corruption uprooted, the police and justice systems strengthened and poverty curtailed.
But they have been disappointed by drug trafficking violence, and the failure to prosecute government corruption or correct judicial inefficiency under the PAN's leadership, first under Fox and then under current President Felipe Calderon, who barely squeaked by in a contested 2006 election. Despite a more open economy and a bigger middle class, more than half of the nation's 120 million people still live in poverty.
Amid the dashed hopes of many Mexicans, the PAN is battling to retain the presidency in July 1 balloting as the formerly entrenched Institutional Revolutionary Party known as the PRI seems poised for a comeback.
"When I voted for Fox and for Calderon I expected change," said Homero Aridjis, a Mexican poet, diplomat and environmentalist. "We thought corruption was going to end, that the country would be well-governed but now we see with disappointment that the lack of justice continues, the corruption we knew continues, and now we can add incompetence in governing to that."
Since its 1939 founding, the pro-business PAN has billed itself as an anti-corruption crusader that made pinpointing the abuses of PRI governments its main mission. Fox was elected largely because he promised to break with the past and vowed to crush the corrupt "black snakes" and "toads" of the old regime.
The night Fox was declared the winner, thousands of ecstatic Mexicans donning masks of the mustached leader and waving the country's red, white and green flag rushed to celebrate beneath the gilded angel of Mexico City's Independence monument. A coffin decorated with the PRI logo was passed among the crowd. Many equated the PAN's victory to the fall of the Berlin Wall.
But the euphoria quickly wore off.
Fox "marketed democracy to the Mexican people and sold it as a panacea for all of their individual, personal concerns," said David A. Shirk, director of the University of San Diego Trans-Border Institute and author of a book about the PAN. "The expectations that people had were the expectations that Fox set for himself, and they were frankly unrealistic."
Once president, Fox made accountability for the PRI's past crimes and the fight against corruption the centerpieces of his administration but achieved little in both efforts.
In one of the most high profile cases of government corruption gone unpunished by the Fox administration, a former union leader of the state-owned Petroleos Mexicanos company, known as Pemex, was accused of diverting as much as US$170 million in state oil funds to the 2000 presidential campaign of the PRI candidate, Francisco Labastida. The party was fined $1 billion pesos (about $90 million dollars) but no one was criminally prosecuted in the case dubbed "Pemexgate."
The former rancher and governor of the central state of Guanajuato also had little success prosecuting former PRI officials accused of oppressing dissent, or strengthening the nation's law enforcement.
Faced with growing drug trafficking violence, Fox created the Federal Agency of Investigation, or AFI, shortly after taking office to replace the notoriously corrupt and inept Federal Judicial Police. The AFI was disbanded in 2009 after one-fifth of its agents were suspected of cooperating with drug cartels.
Once seen as the hope for change, Fox is now often remembered for his quips and blunders, including his declaration that he would revive the countryside and solve a guerrilla rebellion "in 15 minutes."
Experts say PAN administrations have been unsuccessful because Fox and Calderon have faced stiff opposition in Congress, where many of their proposed reforms were diluted or killed.
Others blame corruption for the party's woes.
"The problem with the PAN is that it got into power and it started desperately stealing, and they stuffed themselves as if they were dying of hunger," said Manuel Clouthier Carrillo, a former PAN congressman whose father, Manuel Clouthier del Rincon, was among the party's founders.
Many PAN members are enraged that the PAN mayor of Monterrey, Fernando Larrazabal, wasn't kicked out of the party after a video showed his brother receiving wads of cash inside a Monterrey casino, whose owner claimed he was being extorted. He is currently running for a seat in the lower house of Congress.
"Instead of the PAN cleaning up the system, the system corrupted the PAN," said Clouthier, who wants to run for the presidency as an independent. "It's incredible that after two terms of a PAN federal government, there hasn't been a single crusade against corruption."
Mexicans disappointed with the PAN now seem ready to return the PRI to the presidency despite its reputation as a corrupt party that retained power through fraud, political clientelism and by crushing dissent.
The conservative party is gambling that this country known for machismo is ready to be led by a woman and it picked Josefina Vazquez Mota, a 51-year-old economist and devout Roman Catholic as its presidential candidate.
Vazquez Mota, a mother of three, has presented a warm, affable image while pledging to improve public education and to make Mexico safer by continuing Calderon's plan to clean up police departments.
She has declared her one-word campaign slogan to be "Diferente," or "Different," in an apparent effort to distance herself from Calderon, whose approval rating has been dropping.
In launching her campaign last week, Vazquez Mota said she would look to build consensus among parties when governing unlike Calderon, whose cabinet is comprised of PAN allies.
But the former education minister and congresswoman faces an uphill battle against former Mexico State governor and PRI candidate Enrique Pena Nieto, who leads in recent polls.
Vazquez Mota's first pre-campaign and campaign events were marked by poor planning, small crowds, or disruptive hecklers. And on Monday, she suffered a dizzy spell during a speech to anti-crime activists and had to interrupt her speech, sit down and continue speaking while seated.
Later, Vazquez Mota told local media she may have suffered a drop in blood pressure, and said her health is good.
A poll by the Reforma daily newspaper published Wednesday showed Pena Nieto with a 13-point lead over Vazquez Mota.
About 45 percent of likely voters surveyed said they planned to vote for Pena Nieto. Vazquez Mota earned 32 percent of their support. Andres Manual Lopez Obrado of the leftist Democratic Revolution Party trails in third with 22 percent.
The poll, conducted by the newspaper surveyed 1,343 Mexicans between March 22 and 26. It had a sampling error margin of 2.7 percentage points.
Despite losing the presidency, the PRI has continued to govern most of Mexico's 32 states. It currently holds 19 governorships.
The PAN, long an elitist party of businessmen and other upper and middle-class, religious members, now also includes many working class and other people who grew disenchanted with the PRI. But Shirk said it never created the kind of mass-based system that kept the PRI in power for seven decades.
One of the PAN's big mistakes was not building a stronger party base for itself to replace the electoral machinery that the PRI had developed over many, many years," Shirk said. "The PAN had a very weak mass base and without that kind of a strong electoral connection to constituency the PAN was almost a virtual party."
The PAN, of course, enjoyed some successes.
Fox passed a historic freedom of information law allowing for a freedom of the press that hadn't been seen before in Mexico. The Mexican news media has used the newfound freedom to expose corruption scandals in every major party, airing videos of politicians stuffing a suitcase with cash, asking for bribes and gambling away public funds in casinos.
Both Fox and Calderon were also able to maintain a stable economy despite a global financial crisis.
The Mexican economy grew by more than 5 percent in 2010 after a sharp recession in 2009 during the global economic crisis. Inflation and public sector deficits are under control, and public debt is improved. However, a stable economy hasn't translated into better living conditions for the more than 62 million Mexicans living in poverty.
PAN president Gustavo Madero didn't respond to requests for an interview by The Associated Press. But late last month, Calderon defended his administration saying one of his biggest successes was capturing or killing 22 of the country's most wanted drug traffickers.
The main question for Mexicans now is which candidate in the July 1 presidential contest can end the drug violence that has left more than 47,000 people dead since 2006 despite a crackdown on drug traffickers by Calderon's government.
Although most of the bloodshed is among the cartels, Calderon detractors criticize him for stirring up a hornet's nest by going after all the cartels at once, precipitating more bloodshed.
"Throughout my life, we have had devaluations, capital flight, political assassinations, armed uprisings, but for the first time I'm seeing so much violence," Aridjis said. "We're at a crossroads and what no one seems to know is how Mexico will regain the peace we once had."
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Someday, U.S. may catch up to Mexico on health care
Jay Bookman. Atlanta Journal Constitution. April 3, 2012
“… we’re getting close to reaching universal coverage of health care — full, free health care coverage for all people up to 18 years of age, including cancer coverage. Of the 112 million Mexicans, 106 million will have efficient, effective universal health care coverage.
So I would say that I would hope that one of the greatest economies in the world, such as the United States, could follow our example in achieving this, because it was a great thing.”
– Felipe Calderon, president of Mexico, in a press conference with President Obama and Canadian Prime Minister Stephen Harper Monday.
Canada, to the north, provides its people with universal health care. Mexico, to the south, now provides it as well. But here in “one of the greatest economies in the world,” as Calderon puts it, we can’t seem to manage it, allegedly because we can’t afford it.
Because as you know, there are so many things more important than helping your citizens live long, healthy and productive lives.
Julio Frenk, dean of the Harvard School of Public Health and Mexico’s minister of health from 2000 to 2006, explains what motivated Mexico to commit toward an eventual goal of universal coverage beginning in 2003:
“Studies carried out by several academic institutions and think tanks revealed that every year more than four million Mexican households were falling victims of catastrophic expenditures due to health care payments. The reason: half of the population lacked health insurance. These households were being forced to use their lifetime savings, sell their most treasured belongings, or borrow heavily to meet their health needs.
This analysis brought to light an unacceptable paradox: We know that health care is one of the most effective ways of fighting poverty, yet medical care can itself become an impoverishing factor for families when a country does not have the social mechanisms to protect the population against financial shocks derived from the universally human reality of falling sick.”
Medical care in Mexico is on average some 70 percent cheaper than here in the United States, so medical tourism is a growing industry. And while the standard of care in many Mexican hospitals and clinics is undoubtedly below that of the United States, that is changing.
In fact, Calderon has been lobbying Obama to change U.S. law to allow certified high-quality Mexican hospitals to be reimbursed for providing care to American patients on Medicare. You know, just to be neighborly and help out a neighbor in need.
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Costa Rican finance minister resigns after reports that he underpaid property taxes
AFP. April 3, 2012
Finance Minister Fernando Herrero stepped down on Monday after the daily La Nación published an investigation last week revealing that the minister was not paying his fair share of taxes at the same time he was lobbying for a reform package that would hike taxes for most Costa Ricans.
In a letter to President Laura Chinchilla, Herrero said he resigned to “protect [the president] and [her] administration,” and that implementing the president’s policy goals – including a sweeping fiscal reform plan that would hike taxes – “requires the full attention of [Chinchilla] and members of the cabinet, and I'm not going to permit the use of my name to create obstacles for the great changes that we are dreaming of implementing.”
The La Nación investigation revealed that Herrero and other government officials for many years had declared property values at lower than market rates in order to pay less taxes than the law required. Some officials who responded to La Nación’s report erroneously said it was the duty of municipalities to update the values of their properties. Herrero failed to pay at least $600 per year on two family properties that were undervalued.
Chinchilla called on the officials mentioned in the report to bring up to date the declared value of their properties, and said Costa Rica has a culture of underpaying property taxes. She stopped short of asking top members of her cabinet to step down.
The president acknowledged over the weekend that Herrero’s “mistake” had jeopardized administration efforts to push forward a fiscal reform plan aimed at reducing Costa Rica's burgeoning fiscal deficit, now close to 5 percent of gross domestic product.
The reform plan, which includes a 14 percent value-added tax and other tax hikes for businesses, among other measures, has generated opposition among business sectors and unions. Among the supporters of the measure are members of Chinchilla’s own political party, the National Liberation Party, and the Citizen Action Party, who were instrumental in pushing the tax bill through a first round of voting in the Legislative Assembly on March 15.
Currently, the Constitutional Chamber of the Supreme Court is reviewing the constitutionality of the bill. If the court gives the measure the green light, it will return to the assembly for a second and final round of voting.
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Dominican authorities investigating Haitian contracts of senator
Ezra Fieser and Jacqueline Charles. Miami Herald. April 3, 2012
Jcharles@MiamiHerald.com
SANTO DOMINGO -- Dominican prosecutors said Monday they are investigating allegations of corruption against an influential senator whose companies won millions of dollars in construction contracts in post-earthquake Haiti.
The National Directorate of Prosecution of Administrative Corruption told The Miami Herald that Félix Bautista, a senator from San Juan with alleged ties to Haitian President Michel Martelly, is under investigation. He also is a close ally of Dominican President Leonel Fernández.
Bautista is accused of wielding his influence to win contracts for lucrative construction projects in Haiti, totaling more than $200 million, even though they did not meet the country’s procurement rules.
Those accusations took on new life Monday after Nuria Piera, a Dominican investigative journalist, produced spreadsheets allegedly compiled from bank records that showed Bautista’s companies had given $2.5 million to Martelly, both before and after he won the presidency last year.
In her report, Piera said Hadom, one of Bautista’s companies, won contracts worth millions in Haiti. “Now we realize why,’’ she said.
She also showed documents revealing that on Nov. 5, 2011, Martelly, who was already in office, received $150,000 from Hadom.
The report, which focused on the months leading up to Haiti’s presidential runoff, also said Bautista gave a $250,000 campaign contribution to former presidential candidate Mirlande Manigat on Feb. 18, 2011. Manigat said she received campaign contributions from various sources, but always told her team not to accept suspect campaign funds.
Haiti’s National Palace issued a statement saying it “rejects categorically the allegations that the President of the Republic, Mr. Michel Joseph Martelly, has been involved in any corruption case involving firms or individuals from the Dominican Republic.”
The palace called the accusations a “media lynching” designed “to sully the image of President Martelly and undermine” his integrity.
Bautista did not return calls on Monday. But he has denied any wrongdoing. In interviews with Dominican newspapers, he said the contracts were awarded legally.
In an effort to clear his name, he met with prosecutors last week and asked for an investigation into the corruption claims.
On Monday, Haitian lawmaker Tholbert Alexis told a local radio station, Scoop FM, that he plans to mount a commission to look into the allegations.
Outgoing Haiti Prime Minister Garry Conille had called for an audit of the contracts won by the Dominican companies.
Bautista has claimed principal ownership of Hadom and Roffy, S.A., the two Dominican firms at the center of the contract inquiry in Haiti.
According to Haitian officials, Hadom was only incorporated as a Haitian firm on July 2010, and was awarded a contract four months later. Among its contracts: $33 million to construct a new parliament building.
Roffy, meanwhile, was awarded $174 million to construct the Fort National housing project.
The contracts were awarded by former Prime Minister Jean-Max Bellerive, who defended his right to use Haiti’s 18-month post-quake emergency law to award no-bid contracts.
Bellerive said the principals he dealt with from the Dominican firms were all different, and he denied knowing that Bautista was a shareholder.
“It’s true that Felix Bautista presented us with several Dominican companies because we asked Leonel Fernández to help us find companies willing to work right away — even without advance payment. [I] did not know he was owner of shares in those different companies,” Bellerive said.
Bautista plays a prominent role in Fernández’s Dominican Liberation Party, which has said the accusations are lies being spread by the opposition..
Martelly met last week with Fernández during an official visit in which he received a cross under the Order of Merit of Duarte, Sanchez and Mella, the highest honor for a foreign chief of state.
At the meeting, both presidents signed seven agreements, dealing with matters ranging from collaboration on higher education to security along the border that divides the island of Hispaniola, which the countries share.
Region: Trade, Security, Economy and Integration [contents]
Unasur delivers statement supporting Argentina’s Falklands claim to Ban-ki-moon
Mercopress. April 3, 2012
Unasur Secretary General Maria Emma Mejia met on Monday with UN Secretary General Ban Ki-moon and delivered a statement from the twelve countries of the region in support of Argentina’s sovereignty claim over the Malvinas Islands.
The symbolic gesture from the Union of South American Nations coincides with the 30th anniversary of the beginning of the war between Argentina and Britain, when Argentine forces invaded the Falklands 2 April, and also with a strong diplomatic offensive from the government of President Cristina Fernandez to try and convince the UK to discuss the issue of the Islands sovereignty following on UN resolutions.
According to an official release from the organization, Mejia and ambassador Jose Antonio Dos Santos from Paraguay delivered the “latest declaration approved by Unasur Foreign Affairs ministers during their March 17 meeting referred to the Malvinas issue”.
The text which was signed by Unasur Foreign ministers during their meeting in Asuncion, Paraguay, calls on the UK to begin discussions with Argentina “with the purpose of ending, on the shortest time possible, the sovereignty dispute and what it describes as an “anachronic colonial situation in American soil”.
The declaration also recalls UN resolutions on the matter and “the wide international support for negotiations”.
This is a further step in the Argentine diplomatic advance over the Falklands which last December saw Mercosur agree to bar all Falklands’ flagged vessels from regional ports; Peru’s latest decision to turn back the visit of a British frigate and the Ecuadorian president proposal to slap sanctions on the UK.
On 2 April 1982 the Argentine military dictatorship invaded the Falklands but 74 days later, June 14, surrendered unconditionally to a British task force sent to recover them. The loss of lives totalled almost a thousand: 649 Argentines, 255 British and 3 civilian residents from the Islands.
Since then Argentina has been claiming the South Atlantic Islands through diplomatic channels, but the UK has consistently argued that the Islands will remain under British sovereignty as long as the Islanders so wish to, based on their right to self determination enshrined in the UN charter.
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"We Need to Change the Economics of Development"
Rousbeh Legatis interviews ALICIA BÁRCENA, Executive Secretary of the U.N. Economic Commission for Latin America and the Caribbean
Inter-Press Service. April 3, 2012
UNITED NATIONS, Apr 3, 2012 (IPS) - After Latin America and the Caribbean's "lost decade" of the 1980s, the region has experienced a period of "light and shadow", says Alicia Bárcena, executive secretary of the U.N. Economic Commission for Latin America and the Caribbean (ECLAC).
"The real progress in the social arena was in the first decade of this century because we went from 44 percent people living in poverty to 31 percent last year," she says.
But that percentage still represents 177 million people of region's 600 million inhabitants.
In the lead-up to the major international summit in June known as Rio+20, 19 U.N. agencies collaborated to take stock of progress and challenges in the region over the last two decades.
Bárcena spoke with U.N. correspondent Rousbeh Legatis about ways forward on the path of sustainable development in the region, the historic chance of the upcoming world summit to revisit global governance structures, and the role of the South in tackling problems of a common future.
Excerpts from the interview follow.
Q: What are some of the main threats facing the Latin America and Caribbean region?
A: One of the important alerts for our people in the region is that the fertility rates are going down in general. However, the place where more children are being born are with youth pregnancies. Poor young women are the ones who are having children.
This is very crucial, because if our region does not invest in the first ages from zero to five years, the future of this region is going to be in the hands of poverty.
Furthermore, we have also analysed where in Latin America and the Caribbean are the areas most vulnerable to climate change according to its expected impact by 2050.
Take extreme events or natural disasters like hurricanes, earthquakes, floods, etc. as an example. Most affected are going to be Central America on the Atlantic side, Mexico on the Caribbean basin, some areas of Ecuador, Peru and Colombia on the side of the Pacific ocean and Montevideo and the port there [Uruguay] on the frontier with Brazil.
It is true that socially we have improved poverty rates, but unemployment is a very important issue in Latin America and the Caribbean. [The rate is] relatively low compared with Europe or the U.S. - 6.6 percent. The problem is the quality of employment: often it is informal and does not provide social security. As important as reducing poverty is reducing inequality.
Q: If we look at the main foundations of the regional economies, we see exploitation and exportation of commodities and natural resources: mining, oil and gas, coal, agribusiness products. Those are the items moving the Latin American economies forward, due to Asian demand. How could the green economy make any impact in this scenario?
A: Abundance of natural resources has to be seen as a blessing; the curse is not to have policies to handle it. What we need to do is invest the rents of the extraction of those natural resources in other areas, to build other forms of capital and to replace it with other forms of productivity for the future generations.
It has to be done with the lowest impact possible on the environment. And the rents have to be adequately distributed, we need a better mechanism to guarantee that.
So we are discussing the governance of natural resources. What did countries like Norway, Finland, Australia, New Zealand do, since all those countries have an abundance of natural resources and made the transition to a more technology-oriented society and they did it thanks to the rents of their natural resources.
Q: Green economy experiences until now are just case studies, nice examples. In the dominant economic scenario, how can governments find space to take measures like fiscal reforms or subsidies reforms?
A: First of all, in our region the term "green economy" is very polemic, because it is seen as a trend imposed by Northern developed countries without proposing also the mechanisms and the costs of this transition and answering the question of who is going to pay for this transition towards this type of economy. And it is seen with fear in terms of protectionism.
What can the governments do? I believe very much in fiscal reform, which is a very powerful sign. Governments with fiscal reforms give signs to the productive agents but also redistribute resources. To make it successful it has to be a consensus-based fiscal reform.
This is what we need, it cannot be imposed. There has to be internal discussions to see where and what is the society ready to pay for this transition, this is essential.
Q: What can be done in terms of solutions?
A: So what we are trying to tell the governments is "you do not have to invest in everything but in certain things that are essential for people" - electricity being one, potable water being the other, broadband internet access, public transportation and intelligent construction.
Why not build houses which have solar energy, air conditioning facilities or light already included, to have some engineering or design behind (them) that is already available? In Latin America and the Caribbean, we have space to do things better as to urban planning.
The cash transfer programmes were (also) very successful, like "Bolsa Familia". This is a programme that took 20 million Brazilians out of poverty in the last 10 years.
If one expands these programmes and conditional cash transfers so that they are not only for education and health, taking the children to school and to the doctor, but also incorporate sustainability measures there, by saying to the community "we are going to give you money but you have to protect the soil", "you are going to use the water this way", etc. then you also include some of those sustainability measures.
Q: In the report you say that "developed countries have not honored their commitments to provide finance and leadership". Please explain that a bit more.
A: The developed countries commit themselves to provide 0.75 percent of their GDP for the Official Development Assistance (ODA) to transfer money from north to south in terms of financing for development. We are now at 0.33 percent, which is half of the commitment that developed countries made.
Okay: in the moment of financial crisis, it is very difficult to achieve this goal now or soon. However, historically developed countries developed themselves with high consumption of energy and resources of the planet. Now it is very unfair to impose this on developing countries, which is more costly.
The other way of achieving this transfer from north to south is through knowledge sharing and technology transfer. That is why we believe patents, training and free exchange of knowledge could be useful mechanisms.
Investment in science, technology and innovation is essential; that is going to be the key for the transition to sustainable development.
Q: What would be a useful outcome from Rio+20?
A: To have the sustainable development goals agreed upon, because that puts a lot of pressure on everybody and all the institutions to achieve those goals.
Another thing that we are suggesting is a "Tobin Tax" that should go to sustainable development that is on financial transactions. With a tax of 0.0005 percent, we could get a good amount of money for the world to go for this transition.
Secondly, to have clear financing tools. Third, to have clear technology transfer mechanisms and fourth to have institutions that work.
From our perspective, multilaterally, the U.N. Economic and Social Council (ECOSOC) should be strengthened. To bring the economic actors to ECOSOC to discuss economics, because what is wrong is economics, the environment is on the receiving end, but we need to change the economics.
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Drugs and Business: Central America Faces Another Round of Violence
Annie Bird. NACLA. April 2, 2012
On August 23 about 300 campesinos from the Nueva Esperanza community, near the Laguna del Tigre Natural Park in northern Guatemala, were evicted from the lands to which they held title and forced across the border into Mexico. Interior Minister Carlos Menocal justified the action, claiming the families assisted drug traffickers, though he presented no evidence.1
While drug trafficking corridors have proliferated through Central America’s natural reserves over the last decade, Nueva Esperanza’s real crime appears to have been that it was located in the way of the Cuatro Balam mega-tourism project. Cuatro Balam is a planned 14,000-square-mile tourism complex amid the Mayan Biosphere cluster of natural reserves and an array of Mayan archaeological sites, all to be united by a proposed electric train and linked to Chiapas, Mexico, via a new highway.
Three years before the eviction, Guatemalan president Álvaro Colom (2008–12) announced plans to clear the area of “invaders and drug traffickers” to make room for Cuatro Balam. The Inter-American Development Bank (IDB) began funding the project in 2009. On June 30, 2010, Colom inaugurated Cuatro Balam, announcing that six military posts would be installed in Laguna del Tigre.
Nueva Esperanza is just one of dozens of communities across Central America that have recently been evicted, threatened, or repressed by powerful interests promoting large-scale development projects, including tourism corridors, open-pit mines, biofuel plantations, hydroelectric dams, carbon-credit forests, and more. The violence has come from the state, in the name of the “war on drugs” that is spilling over from Mexico and Colombia into the region, and from multinational corporations bent on advancing investments. The result is the same: Communities that suffered through the civil wars of the 1980s and 1990s are once again faced with violence as they defend their land against international interests.
Corporations employ large private-security forces that work in close collaboration with the military and the police. In Guatemala’s Polochic Valley, Mayan communities report that the Chabil Utzaj sugarcane corporation—owned by the Pellas Development Group of Nicaragua—enlists armed gangs linked to drug trafficking to attack them. These are the same armed groups that threatened and assaulted communities in the 1980s, also over land rights disputes; this represents the resurgence of the business- and government-backed death squads of the 1980s, which killed and disappeared thousands.
Killings, intimidation, and violence against indigenous and environmental activists has been widespread in places like Cabanas in El Salvador; Polochic Valley, San Miguel Ixtahuacán, and San Juan Sacatepéquez in Guatemala; and the Siria Valley, the Río Plátano, and the Aguán Valley in Honduras.
Over the last two years, roughly 60 land rights activists have been killed in Aguán, due to conflicts with African palm oil producers Dinant and Jarimar. Private security forces work closely with the police and military. Death-squad-style killings of land rights activists began with the militarization of the region in March 2010.2 Farmers report that the soldiers and security guards swap uniforms depending on the context, and that security guards have been trained in the 15th Military Battalion. The Honduran daily La Tribuna reported on August 30 that the U.S. Army Rangers were conducting trainings for the 15th Battalion.
In the Polochic Valley of Guatemala, 14 communities were violently evicted in March 2011 by Chabil Utzaj, also involved in ethanol production. In the same valley dozens of Kekchi Maya communities await eviction by the Fénix nickel mine, until recently owned by Canada’s Hudbay Minerals. At least four Kekchi land rights defenders have been killed since 2009 in related disputes, and arrest warrants exist for the heads of the Chabil Utzaj and Fénix security forces. Nevertheless, the security forces continue to collaborate openly with the police and military, and all signs are that militarization, under the framework of the war on drugs, will add fuel to the fire.
In early 2011, the Central American Integration System (SICA), a 19-year-old regional bloc, announced that it was establishing a regional security strategy, backed principally by the United States and the IDB. The project builds off the groundwork laid by the United States in Mexico with the 2007 Merida Initiative and its Central American offshoot, the Central American Regional Security Initiative (CARSI).
In a June 2011 SICA conference in Guatemala City, Secretary of State Hillary Clinton announced that SICA’s security strategy was expected to have an annual budget of about $1 billion and that the United States would contribute $300 million.3 The IDB plans to disperse 22 loans for the strategy and promote what it calls the “Colombian model” of police reform. Though the IDB claims militarization is not part of the plan, the reality in the region shows this to be untrue.
On November 30, the Honduran congress passed a law permitting the military to perform police functions. Under U.S. pressure, the same month, left-wing Salvadoran president Mauricio Funes named former general Munguía Payés to head the Ministry of Interior. Guatemala’s new president, former general Otto Pérez Molina, has posed former military operatives and Kaibiles to key positions on all levels, even in the National Program for Reparations to victims of war crimes.
Despite surprising comments in support of legalizing drugs, Pérez Molina has promised to employ the military in anti-drug activities, particularly the Kaibiles, a Guatemalan army special forces unit. His announcement came despite the April 6, 2011, report from Guatemalan vice minister of security Mario Castañeda that current and former Kaibiles were training Zetas in northern Guatemala and participated in drug smuggling.4
In 2011 two regional security operations and training centers were opened in Panama. In April the Operations Center for SICA’s Regional Security Strategy (COSR) was opened in the former Rodman Marine Barracks. CORS will receive military and police representatives from throughout Central America and the Dominican Republic, and logistical support from the Joint Inter Agency Task Force–South (JIATF-S), which coordinates actions between the U.S. military, Coast Guard, Border Patrol, the State Department, the Department of Justice, and others. On December 6, Panamanian minister of public security José Raúl Mulino announced the opening of a regional training center for security forces from throughout Central America, run by U.S. and Colombian forces in Panama.
Direct U.S. security presence in the region is increasing. On January 18, Honduran president Porfirio Lobo went on a surprise visit to Miami, home of the U.S. Southern Command, to meet with high-level Obama administration officials, who announced that the United States would send personnel to assist in security operations in Honduras. State Department security specialist Oliver Garza was among the first to go on February 7, as special adviser to Lobo. U.S. Army Rangers, the Drug Enforcement Administration (DEA), the FBI, and the Border Patrol have all been carrying out direct operations and training in the region. Five years ago the DEA launched Foreign-deployed Advisory and Support Team (FAST), a program that deploys teams of 10 special agents to directly engage in security actions.
The militarization of the region has been concentrated where there are conflicts over control of land and resources. In other words, militarization in Central America is less about controlling crime than ensuring access to natural resources.
In September 2006 the DEA participated in raids in the northern-Guatemalan departments of San Marcos and Quiché, close to the Mexican border.5 This coincided with protests and municipal referenda in indigenous communities opposing the installation of the nearby multimillion-dollar Marlin gold mine, owned by Montana Exploradora de Guatemala, a subsidiary of the Canadian company Goldcorp.
On January 30, Panamanian Ngöbe-Buglé indigenous activists began six days of protests against hydroelectric dam and mining concessions on their land, blocking the Inter-American highway in the departments of Veraguas and Chiriquí. On February 5 Panamanian security forces violently evicted their occupation. One teenage protester was shot and killed, 32 were wounded, and 41 were arrested.
The end of Central America’s brutal wars and repression in the 1990s was followed by a flood of international investment, neoliberal development initiatives, such as Plan Puebla Panama, launched in 2001, and the Central American Free Trade Agreement, largely passed in 2005. Unfortunately, much of the transnational investment has come at the expense of indigenous and impoverished communities. Now, with the support of the U.S. government, the failed policies of fighting crime and drug trafficking in Mexico and Colombia are being launched in Central America and they appear to be the pretext for another round of violence and massive internal displacement.
Annie Bird is Co-director of Rights Action in Washington. She was based in Central America for 14 years and works extensively in partnership with community activists and human rights organizations in the region.
