Latin America News Round-up
April 18, 2012
Argentina’s Nationalization of YPF Strikes Chord at Home
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Brazil and Southern Cone
China’s Trade with Latin America Grew 31% in 2011
Landless Movement Occupies Brazilian Government Ministry. EFE
Argentina's defiance on YPF strikes chord at home. Reuters
Argentina Official Defines YPF's New Corporate Goals. Dow Jones
Argentina swoop scuppers China oil deal. Financial Times
Argentina's critics are wrong again about renationalising oil. The Guardian
Protests threaten energy-hungry Chile mines. Reuters
Northern Andean Region
Venezuela's PDVSA sees 42% profit jump in 2011. AFP
Venezuela's PDVSA Sends Oil to Asia to Fetch Better Price. Bloomberg
Venezuela worries that OPEC is flooding oil market. Reuters
Israel defence minister hails Colombia ties. AFP
Colombia is fifth worst in the world for unsolved journalist murders. Colombia Reports
Obama gives green light to world's most dangerous place for labor organizers. GlobalPost
Progress or Promises? Free Trade and Labor Rights in Colombia. Upside Down World
Western Andean Region
Ecuador's 1Q Jobless Rate 4.9%; Underemployment 43.9%. Dow Jones
Newmont should improve Peru mine plan-auditors. Reuters
Ministry assigns US$212mn to fund water projects. Business News Americas
Mexico, Central America and Caribbean
Mexican Seeds, the New Spoils for Food Corporations. Inter-Press Service
Honduras poised to criminalise women using emergency contraceptive pill - rights group. TrustLaw
Costa Rica receives $340 million loan for road projects. Tico Times
The U.S.'s Tragic Role in Guatemala and a Chance to Make Amends. Huffington Post
Region: Trade, Security, Economy and Integration
China’s Trade with Latin America Grew 31% in 2011. EFE
US Isolated at Summit of Americas. The Real News
S. American defense spending set to fall. UPI
Brazil and Southern Cone [contents]
Landless Movement Occupies Brazilian Government Ministry
EFE. April 16, 2012
BRASILIA – Some 1,500 members of Brazil’s MST Landless Movement occupied the Agriculture Ministry on Monday and demanded an audience with President Dilma Rousseff, police said.
Some 300 MST members took over the ministry’s offices around 5:40 a.m. while the rest surrounded the building to ward off any attempt by the authorities to eject those inside, according to Brasilia police officials.
Jose Damasceno, one of the MST’s national coordinators, said the ministry invasion kicks off “Red April,” as the Landless Movement calls the demonstrations and occupations it carries out every year at this time.
The Red April protests are used to press the movement’s demands and to commemorate the 19 farm workers killed by police on April 17, 1996, in the Amazonian town of Eldorado dos Carajas.
The MST Landless Movement, which represents thousands of rural laborers and their families, pushes for progress in agrarian reform by occupying farms and ranches it considers unproductive.
According to Damasceno, the MST will continue to occupy the Agriculture Ministry until Rousseff sets a date to give them a hearing.
“During the year and four months it has been in power, the (Rousseff) government still hasn’t begun the agrarian reform it promised because it doesn’t regard it as a political priority,” the leader said.
Besides protesting about agrarian reform going nowhere, the MST also alleges that the government has cut investments for the expropriation of lands and the construction of infrastructure that would benefit small farmers.
“The president has shown that she wants development in Brazil, but to achieve it the social debt has to be resolved,” Damasceno said, referring to the massive concentration of land ownership in the giant South American nation.
Among the demands they plan to make at the audience they seek with the president, MST Landless Movement leaders cite the settling of the close to 186,000 families currently living in camps around the country. EFE
Argentina's defiance on YPF strikes chord at home
Helen Popper and Hilary Burke. Reuters. April 18, 2012
BUENOS AIRES (Reuters) - Argentina's drive to seize control of leading energy company YPF from Spain's Repsol may have outraged European trade partners and foreign investors, but many ordinary citizens hailed it as virtually heroic.
The move by combative President Cristina Fernandez appealed to Argentines who are critical about the vagaries of global finance and the controversial privatizations of the 1990s - a decade remembered for rampant corruption and factory closures in Latin America's No. 3 economy.
Fernandez loyalists pasted "Thank You Cristina" posters on government buildings in the capital Buenos Aires and supporters of the expropriation drive praised the president's boldness.
"It's about recovering what's ours," said Julio Olaz, a passerby in downtown Buenos Aires. "We need to get together and make sure Argentina belongs to Argentina and not to foreigners."
The takeover move could help Fernandez regain the political initiative after a series of unpopular policy moves and a corruption probe involving her vice president that have eroded her approval ratings since her landslide re-election in October last year.
Fernandez, faced with a widening energy shortfall as Argentina's fuel import bill surges, says her only concern is protecting the national interest by guaranteeing future energy supplies and righting the wrongs of the free-market policies widely blamed for precipitating a sharp economic crisis and debt default in 2001/02.
"Companies that operate in Argentina, even when their shareholders are foreign, are Argentine companies. Don't anyone forget that," the fiery Fernandez said on Monday, standing beside an image depicting famous first lady Evita Peron, to whom fellow Peronist Fernandez is sometimes compared.
Argentina's move on YPF, which was fully state-owned for 70 years before its privatization, is thought to be one of the biggest takeovers in the natural resources field since the seizure of Russia's Yukos oil giant a decade ago.
But it follows a steady trend toward resource nationalism in commodities-rich Latin American countries governed by leftists such as President Hugo Chavez of Venezuela and Bolivian President Evo Morales, both close allies of Fernandez.
Chavez applauded her move and rejected European "threats and efforts at intimidation."
Fernandez, who started her political career in an oil-rich Patagonian province, has gradually tightened state control over the economy since she was elected to succeed her late husband, Nestor Kirchner, in 2007.
At the height of the global financial crisis, she shook markets with a nationalization of some $30 billion in private pension funds. At around the same time, she renationalized airline Aerolineas Argentinas, which had also been privatized in the 1990s.
Both measures were popular and won broad support from Argentina's mainly left-leaning opposition in Congress, which Fernandez controls, pointing to easy passage for the YPF expropriation bill despite criticism of Fernandez's approach from some rightist and centrist leaders.
"(Her) objectives are shared, but the expropriation will bring consequences that must be considered," said Oscar Aguad, a lawmaker from the opposition Radical party.
But even as the move on YPF draws condemnation from some quarters, it may strengthen Fernandez's political capital at home.
The country's most-powerful trade union leader, Hugo Moyano, who has been at odds with the government over surging inflation and efforts to cap wage rises, praised Fernandez's plans.
"Despite the pain over the plundering of our resources during 20 years of occupation, we welcome the start of a new era," Moyano's CGT labor federation said in a statement.
Fernandez's Peronist party, which has dominated Argentine politics for seven decades, relies heavily on support from the country's mighty trade unions, explaining Fernandez's emphasis on protecting jobs and local industry whatever the cost to the country's reputation abroad.
Even before the condemnation over YPF, international patience with Argentina was wearing thin, partly due to waning sympathy over the 2001/02 crisis that plunged millions into poverty but also because of Fernandez's rule-breaking policies.
The International Monetary Fund has given the government an ultimatum to overhaul its widely discredited inflation data, and Washington recently suspended trade benefits because of the Argentina's failure to pay two compensation awards.
The U.S. State Department said it was tracking developments related to YPF.
But with YPF's seizure winning broad support at home, Fernandez is unlikely to take a softer line.
"It's the best news we've had of late," Alicia Muzio, a Fernandez supporter, told Reuters Television. "Together with the nationalization of the pension funds, water and post services and Aerolineas, this is excellent news."
Political analyst Graciela Romer said while some leftist supporters back the oil firm's renationalization on ideological grounds, most voters approve because they think the free-market reforms of the 1990s failed so spectacularly.
"They left societies much poorer, with greater inequality. And that's why people turned to the state again, it's less ideological than it is pragmatic," Romer said. "They see this as a possible way to improve people's quality of life."
(Additional reporting by Miguel Lobianco; Writing by Helen Popper; Editing by Leslie Adler)
Argentina Official Defines YPF's New Corporate Goals
Taos Turner. Dow Jones. April 18, 2012
Argentina's deputy economy minister on Tuesday effectively laid out the government's new mission statement for oil and gas producer, YPF SA (YPF, YPFD.BA).
Argentine President Cristina Kirchner seized management of YPF on Monday, after calling on Congress to nationalize the company and force it to boost oil and gas output.
The company's new priority won't be profitability, but providing cheap energy to people and companies.
YPF's goal will be "to keep prices low to foment purchasing power" and "keep companies competitive" by providing consistently cheap oil and gas, Axel Kicillof, Argentina's deputy economy minister, said in congressional testimony.
On Monday, Kirchner asked Congress to nationalize 51% of YPF by expropriating the vast bulk of shares owned by its majority shareholder, Spain's Repsol YPF SA (REPYY, REP.MC).
Kicillof slammed Repsol in his testimony, saying the company had "emptied" YPF and focused on profit when it should have focused on boosting oil and gas production.
Repsol Chairman Antonio Brufau has denied the charges and said Argentina's government is simply trying to cover up the country's economic problems and an unsustainable energy policy.
Kicillof accused private-sector companies of being uninterested in improving the social good in Argentina.
Kicillof said the price of oil in Argentina should remain uncoupled from global oil prices and that the state should keep prices low while also increasing production.
Brufau "would have a heart attack," if he knew how low the cost of a barrel of oil should be in Argentina, said Kicillof.
Famous for his long sideburns and for shunning ties and suits, Kicillof is considered the intellectual architect behind Kirchner's plans to nationalize YPF.
Before coming to the Economy Ministry, he helped manage flag carrier Aerolineas Argentina, which Kirchner nationalized in 2008, wresting control from Spain's Marsans.
Critics say Aerolineas loses money every day. But Kicillof defended the airline, saying it is now a more efficient company.
Repsol's current stake in YPF is about 57%. Under the expropriation bill, Argentina's federal and provincial governments would take 51% of YPF from Repsol, leaving Repsol with a 6% stake.
The remaining 49% would be in the hands of the Eskenazi family, which holds 25%, and other investors.
-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; firstname.lastname@example.org
Argentina swoop scuppers China oil deal
Miles Johnson, Jude Webber and Anousha Sakoui. Financial Times. April 18, 2012
Repsol tried to sell a controlling stake in its Argentinian oil company to a Chinese energy group before it was nationalised by Buenos Aires, according to two people familiar with the talks.
The secret attempt to sell its 57 per cent interest in YPF to the Chinese buyer, which one person involved identified as Sinopec, broke down after the Argentinian government announced on Monday that it would expropriate 51 per cent of the company. Repsol wanted more than $10bn for its stake and did not advise Buenos Aires of the discussions with Sinopec, which the Spanish group hoped to finalise before seeking formal endorsement from Cristina Fernández, Argentine president.
The Argentinian government holds a golden share in YPF and any deal would have required state approval. Sinopec holds 40 per cent of Repsol’s Brazilian operations. Repsol declined to comment. Sinopec could not be reached for comment.
Anger mounted in Europe and Latin America on Tuesday at the Fernández government’s decision to seize a controlling stake in YPF. On a visit to Mexico, Mariano Rajoy, Spanish prime minister, expressed “deep unease” with Argentina’s move and said it lacked “any justification or economic reason”.
Felipe Calderón, Mexican president, called the nationalisation “lamentable”. He added: “No one in their right mind is going to invest in a country that expropriates investments.”
Repsol meanwhile said it would pursue Argentina for at least $10bn in compensation for the YPF stake and is seeking international arbitration. “These acts will not go unpunished,” said Antonio Brufau, executive chairman. “The Argentinian president has committed an illegal and unjustifiable act . . . This is just a way of covering up the social and economic crisis facing Argentina.”
Axel Kicillof, Argentina’s deputy economy minister, said: “We are going to determine [YPF’s] real value. We are not going to pay what [Repsol] say.”
In Brussels, José Manuel Barroso, European Commission president, told reporters he was “seriously disappointed” by Argentina’s move and urged authorities there “to uphold their international commitments and obligations”. The Commission postponed a joint co-operation conference with Argentina scheduled for April 19, and suggested further measures were possible.
Ms Fernández also faced domestic condemnation. “This decision will get us billions of pesos into debt and distances us from the world,” said Mauricio Macri, the mayor of Buenos Aires. “We’re all going to pay for this in Argentina.”
Analysts, however, expressed doubt about Repsol’s chances of winning significant compensation in tribunal. “Argentina already has more disputes pending against it at the World Bank’s International Centre for Settlement of Investment Disputes than any other country,” said Peter Hutton, an analyst at RBC Capital Markets, citing cases stemming from the country's debt default 11 years ago.
Madrid has said it is considering “clear and decisive action” in the coming days, and summoned Argentina’s diplomat on Tuesday morning.
Following earlier warnings over YPF from Madrid, Ms Fernandez said on Monday she would not bow to “threats”. “I’m the head of state, not a hoodlum,” she said.
In response, José Manuel Soria, Spain’s industry minister, said on Tuesday: “With this attitude and hostility there will be consequences that we will see over the next few days.”
Additional reporting by Adam Thomson in Mexico City and Joshua Chaffin in Brussels
Argentina's critics are wrong again about renationalising oil
Mark Weisbrot. The Guardian. April 18, 2012
The Argentinian government's decision to renationalise the oil and gas company YPF has been greeted with howls of outrage, threats, forecasts of rage and ruin, and a rude bit of name-calling in the international press. We have heard all this before.
When the government defaulted on its debt at the end of 2001 and then devalued its currency a few weeks later, it was all doom-mongering in the media. The devaluation would cause inflation to spin out of control, the country would face balance of payments crises from not being able to borrow, the economy would spiral downward into deeper recession. Then, between 2002 and 2011, Argentina's real GDP grew by about 90%, the fastest in the hemisphere. Employment is now at record levels, and both poverty and extreme poverty have been reduced by two-thirds. Social spending, adjusted for inflation, has nearly tripled – which is probably why Cristina Kirchner was re-elected last October in a landslide victory.
Of course this success story is rarely told, mostly because it involved reversing many of the failed neoliberal policies – that were backed by Washington and its International Monetary Fund – that brought the country to ruin in its worst recession of 1998-2002. Now the government is reversing another failed neoliberal policy of the 1990s: the privatisation of its oil and gas industry, which should never have happened in the first place.
There are sound reasons for this move, and the government will most likely be proved right once again. Repsol, the Spanish oil company that currently owns 57% of Argentina's YPF, hasn't produced enough to keep up with Argentina's rapidly growing economy. From 2004 to 2011, Argentina's oil production has actually declined by almost 20% and gas by 13%, with YPF accounting for much of this. And the company's proven reserves of oil and gas have also fallen substantially over the past few years.
The lagging production is not only a problem for meeting the needs of consumers and businesses, it is also a serious macroeconomic problem. The shortfall in oil and gas production has led to a rapid rise in imports. In 2011 these doubled from the previous year to $9.4bn, thus cancelling out a large part of Argentina's trade surplus. A favourable balance of trade has been very important to Argentina since its default in 2001. Because the government is mostly shut out of borrowing from international financial markets, it needs to be careful about having enough foreign exchange to avoid a balance of payments crisis. This is another reason that it can no longer afford to leave energy production and management to the private sector.
So why the outrage against Argentina's decision to take – through a forced purchase – a controlling interest in what for most of the enterprise's history was the national oil company? Mexico nationalised its oil in 1938, and, like a number of Opec countries, doesn't even allow foreign investment in oil. Most of the world's oil and gas producers, from Saudi Arabia to Norway, have state-owned companies. The privatisations of oil and gas in the 1990s were an aberration; neoliberalism gone wild. Even when Brazil privatised $100bn of state enterprises in the 1990s, the government kept majority control over energy corporation Petrobras.
As Latin America has achieved its "second independence" over the past decade-and-a-half, sovereign control over energy resources has been an important part of the region's economic comeback. Bolivia renationalised its hydrocarbons industry in 2006, and increased hydrocarbon revenue from less than 10% to more than 20% of GDP (the difference would be about two-thirds of current government revenue in the US). Ecuador under Rafael Correa greatly increased its control over oil and its share of private companies' production.
So Argentina is catching up with its neighbours and the world, and reversing past mistakes in this area. As for their detractors, they are in a weak position to be throwing stones. The ratings agencies threatening to downgrade Argentina – should anyone take them seriously after they gave AAA ratings to worthless mortgage-backed junk during the housing bubble, and then pretended that the US government could actually default? And as for the threats from the European Union and the rightwing government of Spain – what have they done right lately, with Europe caught in its second recession in three years, nearly halfway through a lost decade, and with 24% unemployment in Spain?
It is interesting that Argentina has had such remarkable economic success over the past nine years while receiving very little foreign direct investment, and being mostly shunned by international financial markets. According to most of the business press, these are the two most important constituencies that any government should make sure to please. But the Argentinian government has had other priorities. Maybe that's another reason why Argentina gets so much flak.
Protests threaten energy-hungry Chile mines
Alexandra Ulmer and Fabian Cambero. Reuters. April 16, 2012
(Reuters) - It took just a handful of fishermen and artisans from this tiny village in northern Chile to threaten a $5 billion coal-fired thermoelectric plant desperately needed by nearby copper mines.
The remote, verdant village of Totoral's bid to block Brazilian billionaire Eike Batista's huge Central Castilla power project on environmental grounds is now in the hands of the Supreme Court.
The plant aims to provide power to major mining projects in the Atacama desert region, but residents say its emissions will harm air quality and that the temperature of water released back into the ocean will hurt fish and marine life.
Their case is seen as a litmus test for a string of other potential flashpoints in Chile, the world's top copper producer.
Protest groups are challenging high inequality in Chile - for long Latin America's poster child economy - and demanding that the benefits of its long mining boom be spread more widely.
They also want stricter environmental protections across Chile, from the Atacama desert in the north to Patagonia in the south, and the challenges have put major projects at risk.
Chile's shaky energy grid needs significant new investment after years of neglect, exacerbated by a devastating 2010 earthquake and droughts. But the mounting opposition to hydro-power, coal-fired thermoelectric plants and wind farm projects is worrying investors.
"There's a very significant supply problem so if investment is delayed ... we could have a very sharp energy crisis in the coming years," said Jorge Rodriguez, president of electric firm Guacolda.
A former mining minister and board president of the state-owned mining giant Codelco, Rodriguez said protests against energy projects could cause serious damage to the economy and push mining firms to look elsewhere for their next projects.
"These appeals appear excessive to me. They're lengthening processes and this will end up prejudicing people."
Mining executives say they already face soaring energy prices and even steeper future costs as supply lags demand.
"With delays in some energy projects, the situation is much tighter. The government needs to take swift decisions so this doesn't brake future economic growth," said John MacKenzie, head of copper at the Anglo American mining firm, which has huge projects in Chile.
Batista's MPX Energia and giant German utility E.ON set up Central Castilla with a goal of providing 2,100 megawatts to mining firms in Atacama. These could include Antofagasta Minerals' Los Pelambres mine, the Cerro Casale project owned by Barrick Gold and Kinross , and Lumina Copper's Caserones mine.
But villagers fought against the project roughly 25 km away from Totoral and won a key battle at an appeals court.
"They thought we wouldn't be able to defend ourselves," said Elena Marin, an outspoken Totoral artisan of indigenous descent who makes olive oil and rosemary-based soaps. "At first, we thought we were lost. But then we leaped to defend ourselves."
The chipped walls of makeshift wooden houses are draped with posters advocating a nature-first lifestyle while school children used rocks to spell out 'No to Castilla' on a barren hill looming over the village.
Residents pluck figs from orchards, grow bulrush and catch shellfish in the Pacific Ocean but they aren't even connected to Chile's energy grid, instead relying on a handful of solar panels. The humble but fertile village is nestled in Atacama's arid hills miles from other villages.
It is broadly made up of four families, with residents moving in and out of each other's houses without knocking. Much of the younger generation has for the nearby town of Copiapo, and clusters of middle-aged women are the most common sight on Totoral's sun-bathed streets.
Lucio Cuenca, the director of environmental group OLCA, which advises Totoral in its legal battle, said the appeals court decision it its favor reflects a "new kind of thinking".
"They aren't insensitive to what's happening to many of these communities," he said of the courts and referring to energy blackouts and water supply cuts.
MPX declined to comment for this article.
It is not the only company facing serious challenges.
Goldcorp, Canada's No. 2 gold miner, had its environmental permit for the $3.9 billion El Morro copper project struck down in February at the request of an indigenous agricultural community, and the case is now also in Supreme Court hands.
An environmental impact study for expansion plans to potentially double output at Collahuasi, the world's No.3 copper mine owned jointly by Anglo American and Xstrata, is also seen at risk from local opposition when it is presented in May.
Potential new mines or expansions of current ones to access better ore grades, which many old mines in northern Chile need to remain efficient, are also at risk of challenges from residents upset over their own scarce water and energy supply.
SHORT ON JUICE
Chile aims to boost copper output from last year's 5.24 million tones to over 7 million tones by 2020, but it needs to ensure mines have enough electricity.
Without that, it could lose ground to rivals like Peru or Mongolia, although Peru - the world's No. 2 producer of copper, zinc and silver - has similar problems of ensuring power supplies compounded by stiff environmental opposition to new transmission lines and generation plants.
Chile's power matrix has a capacity of 17,000 megawatts and the government aims to add another 8,000 megawatts by 2020.
But only about 2,296 megawatts of environmentally-approved energy projects since 2003 are currently being built, according to Central Energia, a Chilean portal on energy, suggesting delays due in part to long, costly legal procedures. Should the Castilla project be struck down, Chile would lose more than a quarter of the extra power the government is hoping to bring on line in the next eight years.
Mines consume 38 percent of Chile's energy supply and are already battling dwindling ore grades, freak weather and an uptick in strikes brought on by high global prices for copper.
Chile has about 28 percent of world copper reserves and needs to avoid blackouts like one in September 2011 that hit major mines and cost Codelco over 1,400 tones in lost output.
If energy supplies aren't beefed up, the country could lose between 2 and 3 million tones of potential production a year from 2015, said Juan Ignacio Guzman, mining professor at the Universidad Catolica in Santiago.
"The mining sector will just stop growing if there isn't more energy," he said.
Some see unsolved energy woes in mining powerhouse South Africa as a cautionary tale. Its national grid nearly collapsed in early 2008, forcing mines and smelters to shut for days, and some firms have begun to expand elsewhere in the continent to minimize their dependence on South Africa.
BHP Billiton base metals president Peter Beaven says Chile's costly energy and fragile electricity grid could hurt investment although BHP is sticking to its plans and may consider building the approved Kelar thermoelectric plant, a project shelved amid the 2007-2009 financial crisis, as it seeks energy alternatives.
Other miners have already made similar moves. Codelco and French energy giant GDF Suez jointly run an LNG terminal in Mejillones in northern Chile.
Codelco, which provides 11 percent of world copper, said its direct cash costs jumped 11 percent to $1.16 per pound of copper in 2011, mainly on higher fuel and energy costs.
Chile's central-southern grid is supplied by hydroelectric and thermal generation, and is seen as more vulnerable than the northern grid which runs almost entirely on thermal generation.
President Sebastian Pinera has promised to overhaul the network, which will likely include building a transmission line to link the two grids, but concrete measures have not yet been taken. Political turnover is part of the problem with Jorge Bunster recently becoming the fifth energy minister of Pinera's two-year administration.
While Chile grew 6 percent last year, it was rated the most economically unequal country of the 34-member state Organization for Economic Cooperation and Development, or OECD.
Social discontent has become more vocal under Pinera, a conservative billionaire who is the most unpopular president since Gen. Augusto Pinochet's dictatorship ended in 1990.
A series of often violent street protests over the high cost of education rocked the country last year, and a spike in unrest also hit the mining industry.
Output from Escondida, the world's largest copper mine, plummeted 24.6 percent in 2011 to its lowest level in nearly a decade on sinking ore grades and a two-week strike.
Until recently, environmental demands against major projects rarely went far but more are now making it to the Supreme Court.
Earlier this year, it paralyzed a wind farm project on the remote island of Chiloe because the company failed to acknowledge indigenous communities' complaints that the park was to be built on an ancient tribal cemetery.
Two weeks ago, the Supreme Court rejected appeals against the $3.5 billion HidroAysen hydro-power project, which involves damming two major rivers and building five power stations in the wild Patagonia region.
The 2,750 megawatt project, a joint venture between leading generator Endesa Chile and partner Colbun, still needs environmental approval for a 1,250-mile (2,000-km) planned transmission line to channel power to Santiago.
No one doubts that major projects face greater environmental scrutiny and legal challenges.
"There are more suits than there were five or 10 years ago," said Joaquin Villarino, head of the country's Mining Council that represents the biggest miners in Chile. "There's absolutely no doubt that the way communities express themselves is changing. You can agree or disagree, but it's happening."
(Writing by Alexandra Ulmer; Editing Simon Gardner, Kieran Murray and Sofina Mirza-Reid)
Northern Andean Region [contents]
Venezuela's PDVSA sees 42% profit jump in 2011
AFP. April 17, 2012
AFP - Surging crude oil prices helped push the 2011 profit of Venezuela's state-owned oil group PDVSA up 42 percent to $4.496 billion, Energy Minister Rafael Ramirez announced Tuesday.
Ramirez, who is also head of the company, released the annual report showing revenues up 31.4 percent from a year earlier to $124.75 billion.
Petroleos de Venezuela, the main source of revenue for firebrand President Hugo Chavez's government, benefitted from the rise in global crude oil prices following the Arab Spring uprisings. The average price was $101 per barrel, up 39 percent, PDVSA said.
Ramirez, quoted by the state news agency AVN, said PDVSA expects to boost investments by 12 percent to $18 billion in a move aimed at increasing production.
The South American nation says it produces three million barrels per day, although the Organization of Oil Exporting Countries estimates production at 2.3 million barrels.
OPEC last year estimated Venezuelan reserves at 296.5 billion barrels, which would make it the largest in the world, ahead of Saudi Arabia. Last month, government officials said the reserves were even higher at 297.57 billion.
The United States last year announced sanctions against "seven foreign entities" including Venezuela's state oil company as part of new efforts to contain Iran's nuclear ambitions.
Venezuela's PDVSA Sends Oil to Asia to Fetch Better Price
Nathan Crooks. Bloomberg. April 17, 2012
Petroleos de Venezuela SA, the state oil company, gets a higher oil price by selling crude to Asia rather than the U.S. and will continue to diversify its export markets, said company president Rafael Ramirez.
Venezuela’s growing exports to Asia accounts for the country’s export basket price being above U.S. benchmark West Texas Intermediate crude, Ramirez said today at an event in Caracas. West Texas Intermediate crude on the New York Mercantile Exchange currently sells for about 11 percent less than Brent oil, according to data compiled by Bloomberg.
“We don’t sell discounted oil to anyone,” Ramirez said today. “We get more for oil that we ship to Asia than we get from oil that we sell to the U.S. and are sending more oil and fuel oil to China as a result.”
Venezuela, South America’s largest oil producer, curtails production to comply with its OPEC quota and keep oil prices from falling, Ramirez said. The country plans to produce an average of 3.13 million barrels a day of oil in 2012 and end the year with daily production capacity of 3.5 million barrels, said Ramirez, who is also the country’s oil and mining minister.
“We’re worried about stability in oil prices and working to construct a price floor of $100 a barrel. We see some OPEC countries producing more than their quotas,” Ramirez told reporters. “Rising inventories are a terrible signal that there is over production.”
The country’s oil export price fell 1 percent in the week ending April 13 to $113.85 from $115.01 the prior week.
Venezuela’s price is above West Texas Intermediate crude oil for May delivery, which advanced $1.27, or 1.2 percent, to $104.20 a barrel at 2:05 p.m.
Brent oil for June settlement rose 32 cents, or 0.3 percent, to $119 a barrel on the London-based ICE Futures Europe exchange.
PDVSA, as the Caracas-based company is called, averaged production of 2.99 million barrels of oil a day last year, a 0.5 percent increase from 2010, the company said today in a presentation on its 2011 financial results. Exports rose 2.2 percent to 2.5 million barrels a day.
PDVSA will need to raise 81 percent of the $236 billion that the company wants to invest through 2018 and its partners will raise 19 percent, the minister said today in a presentation.
The company has no plans to sell new dollar-denominated bonds at the moment, Ramirez said without elaborating.
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 worries that OPEC is flooding oil market
Marianna Parraga. Reuters. April 17, 2012
CARACAS, April 17 (Reuters) - Venezuelan Energy Minister Rafael Ramirez said on Tuesday that the South American OPEC nation was concerned about global oil market stability and that OPEC should aim for a minimum price of $100 per barrel.
Ramirez said Venezuela was worried about surplus supply depressing oil prices and disagreed with the decision of some members of the Organization of the Petroleum Oil Exporting Countries to increase production.
"There are countries in the Gulf that are not following OPEC price policy and are acting more in favor of consumer nations," Ramirez told reporters. "I don't want to name them ... they are over-producing."
On Friday, the world's top exporter, Saudi Arabia, said it was determined to bring down high oil prices and is working with fellow OPEC members to accomplish that.
In March, Brent crude prices surged to a 2012 peak above $128 a barrel, a 19 percent rise from the end of 2011. A conflict between western nations and Iran over the Islamic state's nuclear program had fed worries about supplies.
But recovering Libyan oil exports and higher output from Saudi Arabia and Iraq have helped check the price surge, along with the West mulling a strategic reserves release.
"Unfortunately we have to say that there are countries in the Gulf that are adjusting their oil policies to a strategy that was linked to the destabilization of Libya," Ramirez said.
"We do not understand how an OPEC nation can establish a strategy in favor of consumer nations when it (OPEC) should have been united in defense of the producers."
Venezuela's economy is almost entirely reliant on its huge oil industry, and President Hugo Chavez' socialist government routinely calls for a minimum oil price of $100 per barrel.
In recent months it has got its wish: crude has traded above $100 for all but a couple of days during the past year.
Brent June crude was trading up 10 cents at $118.78 a barrel on Tuesday, while U.S. May crude futures rose $1.32 to $104.25.
Saudi Arabia is pumping 10 million barrels per day, its Oil Minister Ali al-Naimi said in a statement on Friday, reiterating that the Kingdom's production capacity was 12.5 million bpd.
Fellow OPEC producers Libya, Iraq and Angola have increased output, Naimi said. Non-OPEC members including Canada, the United States and Russia had also boosted supplies, he added.
The International Energy Agency said last week that the oil market had broken a two-year cycle of tightening supply conditions as demand growth weakens and Saudi Arabia increases output. High oil prices could be expected to ease when markets woke up to the shift in trend, it said.
Israel defence minister hails Colombia ties
AFP. April 17, 2012
AFP - Colombia is a "true friend of Israel," the Jewish state's defence minister said on Tuesday, adding that military cooperation between the two countries would increase.
During a meeting of more than an hour in Bogota with Colombian President Juan Manuel Santos, Defence Minister Ehud Barak highlighted the joint work "in the fight against terrorism and affirmed that bilateral military cooperation would grow," Barak's office said.
"Colombia is a true friend of Israel, and I will work for an expansion of bilateral cooperation in the fields of technology, industry, agriculture, education and the promotion of excellence," a statement added him as saying.
Barak also thanked Santos for the support his country had given Israel on the international scene and briefed him on the situation in the Middle East.
Barak left on Sunday for a five-day working visit to Colombia and the United States.
He is also to meet Colombia's military chief-of-staff and other senior administration officials.
Last October, Colombia's Foreign Minister Maria Angela Holguin paid a visit to the region to try to encourage Israel and the Palestinians to return to direct talks, which broke down just weeks after they began in September 2010.
Holguin, who met both Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas, was sent to the region by Santos, whose efforts at mediation began earlier that month during a visit by the Palestinian leader.
Abbas had been hoping to secure Colombian backing for a Palestinian bid to secure full state membership at the United Nations.
But Colombia, which is one of the 10 non-permanent members of the UN Security Council, opposes the bid. It backs the position of Israel and the United States that a Palestinian state can emerge only through bilateral negotiations and not through a UN vote.
Colombia is fifth worst in the world for unsolved journalist murders
Rosemary Westwood. Colombia Reports. April 17, 2012
Colombia is the fifth worst country in the world for unsolved murders of journalists for the second year in a row, according to a new report.
It once again led Latin American nations in the Committee to Protect Journalists (CPJ) 2012 Impunity Index, which measures how often members of the media are killed and how frequently those murders are solved.
The CPJ ranked Iraq the worst for unsolved murders of journalists, with Colombia placed fifth after Somalia, the Philippines and Sri Lanka.
The report criticized Colombia's "unacceptably high" ranking, "a legacy of its deadly past and its continued shortcomings in prosecuting open cases."
But it also praised recent judicial efforts to bring killers to justice.
"The fight to end impunity in crimes against the press is a long and complicated struggle," Maria Teresa Ronderos, a Colombian journalist and member of the CPJ's board of directors said in a statement.
The reported praised recent convictions and a slowed pace of journalist killings.
But it also highlighted the unsolved murder of award-winning reporter Guillermo Bravo Vega, who exposed government corruption and was shot dead in his home in 2003.
Ronderos said there remained more work to be done. "While lethal violence has receded, the number of threats has escalated and the investigations into these threats have gone nowhere," she said.
US lawmakers: Colombia trade agreement sacrifices labor rights
Obama gives green light to world's most dangerous place for labor organizers.
John Otis. GlobalPost. April 17, 2012
BOGOTA, Colombia – When a work stoppage shut down production at Colombia’s largest oil field last year, government forces raided the strikers’ encampment and blockaded roads. With the strike broken, about 1,000 unionized oil workers were fired but others were allowed to keep their jobs in exchange for joining a sham, pro-company union.
Such union-busting tactics are common in Colombia and help explain why labor rights activists and some US lawmakers are dismayed by the Obama administration’s announcement that the US-Colombia Free Trade Agreement will take effect May 15.
“The president’s decision was premature,” Rep. Jim McGovern (D-Mass.) told GlobalPost. “This takes the pressure off the powers that be in Colombia from dealing with continued human rights violations against unionists.”
At the Summit of the Americas in the Caribbean port city of Cartagena on Sunday, the trade pact was hailed by both President Obama and his host, Colombian President Juan Manuel Santos, as the beginning of a new era of economic cooperation.
“We have gone from being good friends to being true partners,” Santos told a news conference.
But critics point out that a key side agreement – the so-called Labor Action Plan which sets benchmarks for improving labor conditions in Colombia – has yet to be fully implemented by the Colombian government.
In a joint statement, the leaders of Colombia’s two main labor confederations said declaring the Labor Action Plan a success would halt progress on labor rights, lead to backtracking, and remove a key incentive that had been motivating reform.
Colombia remains the most dangerous nation on earth for labor activists with nearly 3,000 murdered since 1986, according to Human Rights Watch. Only a tiny handful of the killers have been convicted. In addition, illegal firings and death threats often stop unions from forming in the first place.
The ongoing repression had convinced many Democrats in the US Congress to oppose the trade pact. It was signed by the two countries in 2006 but languished as American lawmakers refused to vote on ratification. Signed last year by both governments, the Labor Action Plan side agreement was crucial for convincing several congressional Democrats to switch sides. The trade pact was ratified in October.
The Labor Action Plan contains 37 points and, by most accounts, has helped pave the way for improvements.
In February, for example, Colombian Labor Minister Rafael Pardo announced a broad crackdown against worker cooperatives. The co-ops are a major point of contention because they often serve as glorified temp agencies providing cheap labor to farms and businesses. Yet their members are considered small-business owners and are therefore banned from joining unions.
Union activists acknowledge that President Santos is a huge improvement over past government leaders, some of whom viewed unionists as communist guerrillas in disguise and looked the other way as they were gunned down by death squads. The Santos administration has even sponsored radio spots urging workers to join unions.
“It’s been a huge surprise for Colombians because now the government is saying that unions are good,” said Luciano Sanin, director of the National Labor School, a Medellin-based research center.
But now, Santos is taking heat from both sides — with union activists accusing him of not doing enough and some business leaders blaming him for backing down to Washington by signing off on the Labor Action Plan.
Either way, compliance with the plan remains a sticking point. Though the Labor Ministry is now hiring more inspectors, it has only about 1,200 officials to monitor abuses nationwide.
“We are making the system stronger,” Labor Minister Pardo said in a recent interview. “But we need more inspectors with more capacity. We have relatively few inspectors to cover the whole country. The laws are changing and we need them to be up to date on these changes.”
According to the National Labor School, lack of oversight is one of the main reasons why nine of the 37 points of the Labor Action Plan have been ignored while the remaining 27 have been only partially implemented.
In an April 10 letter to the Colombian Labor Ministry, McGovern and four other US lawmakers who are monitoring compliance with the Labor Action Plan laid out several specific problems.
In order to keep their jobs, the letter said, Colombian banana workers are often forced to prove to their employers that they are not affiliated with any unions. It said worker co-ops are being replaced by similar agencies under different names that continue to provide cheap, non-union labor.
The lawmakers also wrote that despite Colombia’s promises to increase the number of investigators and prosecutors, there has been almost no progress in legal cases involving trade unionists who have been threatened or murdered.
But the Obama administration apparently decided to overlook these problems and focus on the trade pact’s possible benefits. According to US government estimates, the agreement could help create half a million jobs in five years in Colombia, increase the country's output by one percent and lift 1.2 million Colombians out of poverty.
McGovern contends that Obama rushed his decision but said he probably wanted to come away from an otherwise lackluster Summit of the Americas with something concrete.
“I understand the desire to make a big announcement while the president was in Colombia,” McGovern said. “But a better announcement would have been: ‘You have made some progress, but there is still a ways to go.’”
John Otis is GlobalPost's correspondent in Colombia. This story is part of a GlobalPost 'Special Report' on labor rights around the world funded by the Ford Foundation.
Progress or Promises? Free Trade and Labor Rights in Colombia
James Bargent. Upside Down World. April 16, 2012
Rodolfo Vecino has a death sentence on his head. He has been told he will be kidnapped, tortured and his family will be murdered. Already this year one of Vecino’s colleagues has been killed – in January, Mauricio Arrendondo and his wife Janeth were gunned down in front of their children.
Vecino is the president of Colombian oil workers union (USO), which was last year declared a “military target” by right-wing paramilitaries for its campaigns against what the union says are the abusive labor practices of Canadian oil giant Pacific Rubiales. The union’s campaign began last summer; just two months after Colombia signed a Labor Action Plan (LAP) with the U.S. pledging to tackle the very practices used by Rubiales and the type of anti-union violence that USO has suffered. The signing of the pact unblocked negotiations over the Free Trade Agreement (FTA) between the countries, which had stalled over Colombia’s abysmal labor rights record.
A year on, and at last weekend’s Summit of the Americas, the U.S. declared it was satisfied that Colombia had complied with the LAP and was enacting the reforms called for. The decision opens the way for full implementation of the FTA in May, even as unions and human rights groups in both countries continue to accuse the U.S. of “rewarding promises not actions”. Meanwhile, USO’s campaign against Rubiales continues and it is far from an isolated case. Unions across Colombia maintain they face the same problems of violence, worker abuse and anti-union practices, all committed with seeming impunity.
Protests against Rubiales began after workers at the company’s Puerto Gaitan site contacted USO and described how 12,000 sub-contracted workers - the overwhelming majority of the workforce - were enduring low pay, appalling conditions and instability while being denied the right to bargain collectively and associate freely.
Ending the abusive sub-contracting system commonly used in Colombia was one of the principal aims of the LAP. The practice began in the late 70s, when businesses began to take advantage of the fact that many of Colombia’s labor regulations did not apply to worker cooperatives. Companies fired their entire workforce then forced workers to sign on with contractors calling themselves cooperatives. As the workers were then classified as temporary employees and could be laid off without cause, the cooperatives forced them to accept whatever pay and conditions were on the table. It was also a useful tool for preventing unionization as any worker who began organizing or agitating could be immediately fired. “They lost their rights, they lost money [and] they lost their working stability,” said Andres Sanchez from Colombia’s National Union School (ENS). The practice continues today, utilizing Colombia’s army of the unemployed and underemployed as ready replacements for sacked workers.
The LAP called for Colombia to enforce pre-existing but widely ignored legislation banning the cooperatives. However, as the Rubiales workers testified, in many sectors little has changed. Because the cooperatives are now banned, most of the contractors have simply changed names and become Simplified Stock Companies or Temporary Service Companies. “The phenomenon continues the same,” said Sanchez. “It is the same dynamic, they do the same things, workers [still] can’t demand that they benefit from their labor and not the third party,” he added. According to Sanchez, over 2 million workers in Colombia are still employed through these sub-contractors.
In Puerto Gaitan, the sub-contracted Rubiales’ workers have been forced to accept what Rodolfo Vecino called, “truly humiliating and poverty stricken” conditions. “They don’t have the conditions of a dignified life, they don’t have dignified salaries, they don’t have contracts that genuinely give the workers respectable levels of stability,” he said.
The workers have also testified to being pressured and threatened because of their association with the union and being told they would not be employed again while they were still members. “Although I am aware of my rights,” said one worker in a letter to USO, “in this case my need to survive and stay in work is more important.”
The ENS and USO both say they have persistently informed the government of the continued use of the cooperative style sub-contracting but little action has been taken despite the harsh penalties now demanded by law. So far, one company has been hit with a $6.5 million dollar fine over its use of contractors in the African palm sector. However, the fine was only imposed after a 107-day strike and came a week before Colombia’s labor minister traveled to the U.S. to discuss progress on labor rights. According to Sanchez, several months later and the fine has yet to be paid.
The paramilitary right and anti-union violence
After five months of strikes, blockades, occupations and violent clashes between riot police and protesters in USO’s confrontation with Pacific Rubiales, Rodolfo Vecino announced he had been threatened by four men claiming to be from the Auto-defensas (Self-defense forces). According to Vecino, the men told him he had been “sentenced” because USO’s confrontation with Pacific Rubiales made him an “obstacle to development.”
The term Auto-Defensas refers to the United Self-Defense Forces of Colombia (AUC), an umbrella group for Colombia’s right-wing paramilitary movement that controlled vast criminal networks and infiltrated the core of Colombia’s political and economic systems. Its stated mission was to combat Colombia’s leftist guerrilla groups, something it did in part by waging a dirty war against “guerrilla collaborators” – members of leftist political parties, community organizers, human rights workers and unionists. From 1986–2011, nearly 3000 unionists were murdered, and although most of the cases remain unsolved, in Colombia there is little doubt that paramilitary groups such as the AUC were responsible for the overwhelming majority of the killings.
The AUC officially demobilized in 2006 after negotiations with the government of Alvaro Uribe. However, the much criticized process gave rise to a new wave of illegal armed groups. These new organizations mostly consist of former mid-level AUC commanders and foot-soldiers that either never demobilized or simply re-enlisted after demobilization. For the most part they no longer fight the guerrillas – in some cases they even collaborate with them – but instead concentrate on drug trafficking and maintaining the AUC’s criminal networks and commercial interests. However, the end of the ideological war between the paramilitaries and the guerrillas did not lead to a significant drop in anti-union violence and Colombia remains by far and away the most dangerous place in the world for unionists.
According to Vecino, three of these groups operate in the same areas as USO – the Rastrojos, the Urabeños and the Popular Revolutionary Anti-terrorist Army of Colombia (ERPAC). He believes the continuing violence against unions is because of the links between businesses and the paramilitaries. “We believe there are links in the zone,” he said. “Today there are no political lines of definition of these groups but interests around drug trafficking [and] they sell themselves to the highest bidder,” he said. “If [the company] gives them money it wouldn’t be the first time multinationals have associated with paramilitaries or common criminals to strike against the union sector.” Vecino also claimed that some of the cooperatives have ties to armed groups and are used to launder drug money.
Pacific Rubiales has adamantly denied any contact with paramilitary groups. Jorge Rodriguez, the company's head of corporate affairs, told news website Colombia Reports: "We are very sorry for the USO union. We reject any type of threat, any type of intimidation, not only to trade unionists but to anyone in the country."
Andres Sanchez agrees with the theory that the new groups continue to act as the armed wing for powerful commercial interests, pointing to how Chiquita bananas and Coca Cola have been implicated in the murder of unionists. “It is a culture where some businesses have used violence as a way of solving labor relation problems,” he said. “In Colombia, the links between paramilitaries and business have not yet been uncovered.”
For most American politicians and unionists, anti-union violence was the biggest obstacle to the passing of the FTA with Colombia and curbing that violence the LAP’s greatest promise. In the first year of the plan, 27 unionists were murdered and 2 disappeared, according to the ENS. While that remains the highest murder rate for unionists in the world by some distance, it does represent a significant reduction; in 2010, 51 unionists were murdered and 7 disappeared. However, Andres Sanchez believes the drop in homicides does not tell the whole story. “The situation with the violence has shown changes in its logic,” he said. “Now, it is not necessary to murder a unionist to successfully freeze a union. We have seen that threats, injuries and displacement have increased ... homicides have gone down a bit [but] the situation persists.”
In the LAP, the Colombian government pledged to increase protection for unionists by broadening the coverage of its protection program, clearing the backlog of applicants for the program and speeding up the application process. According to the U.S. government this is exactly what it has done. However, while the unions acknowledge there have been some improvements, they remain critical. “They say ‘no one in the program has been killed,’” said Sanchez. “So we say the program is badly designed, because they kill the unionists who aren’t in the program.”
The unions complain that the protection program excludes too many people and that the Colombian authorities have cleared the backlog and sped up the process partly by rejecting more people more quickly. According to Sanchez, this has involved turning down unionists who have received death threats. “They say that if they threaten someone it is a salvation because generally, the ones who are murdered have not been threatened, [and] the threat is to silence someone so it is not necessary to take measures after,” he said.
The approach has had a serious impact on USO leaders. Last August, USO received a letter informing them that protection programs for 23 leaders and a number of regional offices would either be terminated immediately or only extended temporarily. Three of those leaders were involved in organizing in Puerto Gaitan.
The LAP also pledged to tackle the impunity enjoyed by those responsible for the anti-union threats and violence. Less than 10% of the more than 3000 cases of murdered unionists have resulted in convictions. Many of those convictions came not from successful investigations but from confessions by paramilitary killers and, while the perpetrators of the crimes identified themselves, the intellectual authors remained hidden.
In 2007, the Attorney General’s Office set up a specialist sub-unit dedicated to anti-union violence. However, of the 195 murders that took place between the start of the sub-unit’s operations and May 2011, only 6 resulted in convictions. The unit did not obtain a single conviction for the 60 homicide attempts, 1,500 threats and 420 forced displacements in the same period.
The prosecutor’s office’s shortcomings in investigating anti-union violence were supposed to be addressed by 15 measures in the LAP, ranging from assigning more full time investigators to the unit to establishing victims assistance centers. As Congress approved the FTA in October, American union AFL-CIO reported that all but three of the obligations had either not been met, had been met insufficiently or there was no evidence of progress.
Progress for labor or for free trade?
Although he believes the LAP has failed to significantly improve the labor rights situation in Colombia, Andres Sanchez says the plan was an important step. “Yes, [the LAP] was to facilitate the unfreezing of the FTA,” said Sanchez, “but it was also a serious attempt.” However, he thinks the LAP will not be effective unless the government does more to involve unions in the process. “They are important measures,” he said, “expensive measures that could be effective but with this great vacuum of not taking into account the unions, they are measures that could fail.”
In the U.S, the implementation of the LAP has been monitored by the AFL-CIO, which has been critical of the government for using it to push through the FTA. “We don’t think the plan was sufficient to accomplish the goals but we do think it was a step in the right direction, a step towards meaningful change,” said the AFL-CIO’s Celeste Drake. “Unfortunately, with the continued violence against unionists and too little progress on cooperatives and other practices like collective pacts [worker agreements used to sideline unions], it is far too soon for the US government to declare victory on the LAP and move ahead on the FTA. Colombian workers will lose whatever leverage they have to make real progress if the US moves too quickly.”
On the front line of the struggle against the violence and abuse suffered by Colombian workers and unionists, Rodolfo Vecino says he has seen very little change since the LAP came into force. “At the moment it is innocuous,” he said. “It doesn’t matter what is written there, they are dead words, they don’t have life because there isn’t anyone who is putting it into place.”
James Bargent is a freelance journalist based in Colombia. See jamesbargent.com
Western Andean Region [contents]
Ecuador's 1Q Jobless Rate 4.9%; Underemployment 43.9%
Dow Jones. April 18, 2012
QUITO (Dow Jones)--Ecuador's unemployment rate fell to 4.9% in the first quarter from 7.04% in the same period of last year, the National Statistics and Census Institute, or Inec, said Tuesday.
Underemployment, the percentage of Ecuadoreans employed in the informal sector or who work on an occasional basis, declined to 43.9% from 50%.
Ecuador's economically active population is estimated at about 4.64 million.
Thanks to high oil prices and loans from China, Ecuador President Rafael Correa has increased public investment to boost economic growth and promote production in order to address the unemployment and underemployment.
In 2011, Ecuador's economy grew 7.78%. Given an uncertain global economic outlook this year, the government expects growth of 5.35% for this year.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; email@example.com
Newmont should improve Peru mine plan-auditors
Reuters. April 17, 2012
LIMA, April 17 (Reuters) - A team of independent environmental auditors said on Tuesday U.S.-based Newmont Mining Corp should make "substantive improvements" to its $4.8 billion Conga project in Peru, which has been stalled by community opposition.
The proposed gold mine, the biggest investment in the history of Peruvian mining, would replace a string of alpine lakes with reservoirs. Local protesters, led by the president of the northern Andean region of Cajamarca, say it would bring pollution or hurt scarce water supplies.
The Conga dispute has the highest profile of the more than 200 environmental conflicts that President Ollanta Humala is trying to solve to avert delays on Peru's $50 billion pipeline of mining and energy projects.
"There's no such thing as zero environmental impact. You need to find a balance between economics, the environmental, social needs and technical ones," said Rafael Fernandez Rubio, one of three European environmental experts hired by Peru's government to review Newmont's mitigation plan for the mine.
Newmont has indicated it is willing to fine-tune its mitigation plan for the project.
It has also said the reservoirs would provide steadier supplies of water.
"Conga's reservoirs would more than double the current water storage capacity and would provide a reliable, year-round water supply to downstream users, something they don't currently have as a result of the dry season," the company said.
Prime Minister Oscar Valdes, who the president promoted from interior minister in December and charged with quashing local opposition to the mine, told reporters the government will now review the 260-page report from the auditors, who analyzed the water component of Newmont's 7,000-page mitigation plan.
Some of the recommendations by the auditors could drive up the costs of the project.
"It's not our mission to say if the project is viable or not ... we've just tried to improve its technical aspects," said another auditor, Luis Lopez Garcia. "Some measures could be implemented quite easily but others would require economic studies to see if they make sense."
Mines and Energy Minister Jorge Merino Tafur said the independent review showed Peru was paying more attention to environmental concerns after centuries of mining that often went unchecked.
"I hope everyone understands that investments are very important but only when you take into account factors like water and sustainable development," he said.
Gregorio Santos, the left-wing president of the region of Cajamarca, who has defied Humala's calls to let the mine be built, reiterated his opposition to the project.
"The private sector in Peru must understand that you can't cause enormous damage to ecosystems in the pursuit of big profits," he said.
Ministry assigns US$212mn to fund water projects
Business News Americas. April 17, 2012
Bolivia's environment and water ministry (MMAyA), will spend US$212mn this year on 772 potable water, sanitation, irrigation and basin management projects .
Potable water, sewerage and sanitation projects worth US$70mn will be carried out across the country's 334 municipalities, state news agency ABI reported.
This year's spending is expected to extend potable water service to 160,000 residents and benefit 23,696 agricultural producers.
Around 48,000 new potable water connections have been installed in Bolivia since President Evo Morales took office in 2006, supplying water to around 635,000 people.
The current administration has invested 2.61bn bolivianos (US$375mn) in water and sanitation projects to date.
Mexico, Central America and Caribbean [contents]
Mexican Seeds, the New Spoils for Food Corporations
Emilio Godoy. Inter-Press Service. April 18, 2012
(IPS) - Biodiversity and small and medium farms are threatened in Mexico by the looming approval of a reform of the law on plant varieties that will extend patent rights over seeds, activists and experts warn.
The amendment, of the federal law on plant varieties in effect since 1996, was approved by the Senate in November and is now making its way through the lower house of Congress.
"They are trying to expand privatisation in this important sector, as part of an offensive backed by transnational corporations to give more rights to breeders (of plant varieties), which are mainly these big companies," Adela San Vicente, the head of Semillas de Vida (Seeds of Life), a local NGO, told IPS.
The reform, defended by the government of conservative President Felipe Calderón, would cover all plant material, including harvest products, and would introduce the definition of "essentially derived varieties", used to protect genetically modified organisms (GMOs).
In addition, it extends the period of protection for breeders of plant varieties from 15 to 25 years.
One of the risks posed by the reform is that small farmers who receive and grow hybrid seeds without authorisation could face legal action.
"They are paving the way for the industry to charge patent rights if, for example, native maize is contaminated by transgenic crops, because the native maize would contain the genes of the GMO," Alejandro Espinosa, a researcher in the maize programme at Mexico's National Institute of Forestry, Agricultural and Livestock Research (INIFAP), told IPS.
"It would be the last nail in the coffin for the Mexican countryside," complained the scientist, who has developed more than 30 hybrid species at INIFAP and at least a dozen at the National Autonomous University of Mexico, for production by small companies and distribution at the local level.
The amendment would bring Mexico’s legislation into line with the International Convention for the Protection of New Varieties of Plants, as revised in 1991.
The Convention, which is monitored by the International Union for the Protection of New Varieties of Plants (UPOV), was adopted in 1961 and revised in 1972, 1978 and 1991. Mexico, which joined UPOV in 1978, currently follows the standards outlined by the Convention in that year’s revision.
The UPOV system of plant variety protection provides international recognition of the rights of breeders of new varieties that are distinct, sufficiently homogeneous and stable, according to the criteria outlined by the intergovernmental accord.
It also provides double protection, for both patents and plant variety rights.
The Geneva-based UPOV’s mission is "to provide and promote an effective system of plant variety protection, with the aim of encouraging the development of new varieties of plants, for the benefit of society," according to its web site.
The 1991 revision of the Convention, which entered into force in 1998, protects Canadian, U.S. and EU property rights, and introduced the novel feature of recognising rights over new genetic traits – an open concession to GMOs.
More than 250,000 tonnes of seeds are produced annually in Mexico, according to the National Service of Seed Inspection and Certification (SNICS), the government agency that oversees some 55,000 hectares of land where seeds for about two dozen crops are produced.
A collective of researchers and NGOs has urged legislators to halt the reform, and to subject it to an open debate with all concerned sectors, including small and medium farmers, who it will affect the most.
"Native seeds are the only input used by peasant farmers, who are left without any rights," San Vicente said. "And with the problems posed by climate change, they lose seeds or reuse them. Seeds have been a common good of humanity. And (with this amendment, companies) can even go after researchers who use those seeds."
In this country of 112 million people, Latin America’s second-largest economy, there are approximately five million peasant farmer families, according to official figures.
With the projected reform, SNICS would have the authority to impose fines or even block land use for infractions of patents and plant breeders' rights.
SNICS has already registered more than 150 breeders from over 20 countries, involving at least 100 plant species. Of that total, 26 percent are ornamental plants, and the rest are agricultural or forestry species.
The countries of Latin America have filed fewer than 1,000 applications for plant breeders’ rights with UPOV.
Meanwhile, the No Patents on Seeds global coalition of NGOs reports that since 1996, farm-saved or "informal seeds" have been on the decline, while industrial seeds are expanding.
"Hundreds and hundreds of varieties are needed to ensure the sustainability of improved and native seeds," INIFAP’s Espinosa said. "Advances in their yields are environmentally-friendly, because they are genes from the species themselves.
"The improvements are made with the best plants, according to the environment. It’s what farmers have done for decades," he said.
But Mexico is increasingly lax in protecting that system. The government-run national seed production company, PRONASE, has been in the process of liquidation since the early 2000s, which has left the sector in the hands of private Mexican and foreign companies.
In addition, the 2005 Genetically Modified Organisms Biosafety Law and the 2007 Law on the Production, Certification and Trade of Seeds have given industry more and more maneuvering room.
The National Catalogue of Plant Varieties, updated by SNICS in December, contains 1,827 species, most of which are different kinds of maize, beans, sorghum, wheat and potatoes.
Public research institutes and food corporations like the U.S.-based Monsanto and Pioneer have registered their varieties in the catalogue.
Inclusion in that list is the first requisite for registration in a seed production programme.
There are at least 180 commonly used plant varieties in Mexico, such as the nopal cactus fruit, güisquil or pear squash, avocado, and tomato.
SNICS defends patents on seeds, arguing that they protect the genetic patrimony and facilitate access to plant material, which depends on the fair distribution of economic benefits, while respecting special rules for endemic species, preventing the plunder of resources and biopiracy, and strengthening institutional capacity.
Honduras poised to criminalise women using emergency contraceptive pill - rights group
Anastasia Moloney. TrustLaw. April 18, 2012
BOGOTA (TrustLaw) - Honduras is poised to pass a law making it a crime for women to use the emergency contraceptive pill and for doctors to prescribe it, a local women’s rights group has said.
In February, the Supreme Court in Honduras upheld a decree imposing a blanket ban on the sale and use of emergency contraception, even for rape survivors, paving the way for lawmakers to develop laws to enforce the ban.
These laws, if passed, could see women jailed for up to six years, making the Central American nation one of the few countries in the world where women and girls can be prosecuted for using emergency contraception, also known as the morning-after pill.
“It’s almost a done deal that congress will pass this law criminalising emergency contraception,” said Gabriela Diaz, head of reproductive rights at the Centre for Women's Rights in Honduras.
Lawmakers in Honduras could vote on the issue any day, she added.
“There is no schedule and or timetable for when this law will be debated. It could happen at any time,” Diaz told TrustLaw, in a telephone interview from the Honduran capital Tegucigalpa.
In Honduras, abortion is banned under any circumstances, including cases of rape, incest or if the life of the mother or foetus is in danger. The country’s supreme court ruled that the emergency contraceptive pill was a method of early abortion and therefore illegal.
This decision goes against the views of leading global health bodies, including the World Health Organisation and the Pan-American Health Organisation, which say the emergency contraceptive pill is not a form of abortion because it prevents sperm from fertilizing the egg.
“Taking away the right to emergency contraception means women who have been raped will be left with no choice but to go through with the pregnancy and give birth even if they don’t want to,” Diaz said.
“In Honduras, there are no options for women with unwanted pregnancies if emergency contraception is denied. Women here can’t decide if, when and how many children they want,” she added.
Local rights groups say public health issues affecting reproductive rights are largely influenced by the country’s powerful Roman Catholic Church and religious lobby groups.
“In the government there are conservatives and members of the ultra-conservative Catholic Opus Dei movement, who have pushed for bans on abortion and emergency contraception,” Diaz said.
Honduras has the highest rate of teenage pregnancy in Central America, and the possible ban on emergency contraception would only lead to more unwanted pregnancies, rights groups say.
“It’s a terrible situation women face in a country where there is no education on women’s productive rights and sex education. We have very high teenage pregnancy rates, which will only get worse. It’s a complete assault on human rights and the reproductive rights of women,” Diaz said.
Costa Rica receives $340 million loan for road projects
Tico Times. April 16, 2012
Costa Rica’s government on Monday signed a $340 million credit agreement with the Central American Bank for Economic Integration and the National Roadway Council to finance public roads projects.
Among the main projects is the first stage of the Circunvalación Norte (a belt route around the north of San José), access to the Moín Port container terminal on the Caribbean coast, and the widening of a bridge over the Virilla River northwest of San José.
Acting Finance Minister and Vice President Luis Liberman signed the loan, saying “we have dreamed [of] and fought for years [for the projects]. ... These projects need be done to revive the economy.”
President Laura Chinchilla said that “her government has worked hard to find external funding sources to build a robust investment portfolio that Costa Rica has never seen and that improve the quality of life of Costa Ricans and the productivity of the private sector.”
The loan will also finance the construction of bridges over three traffic circles in the capital.
The U.S.'s Tragic Role in Guatemala and a Chance to Make Amends
Dan Kovalik. Huffington Post. April 17, 2012
One would think that the U.S. had it in for Guatemala and its people. As most know, the U.S. was behind a coup in 1954 that brought down the democratically-elected President Jacobo Arbenz. The U.S. then installed a military dictatorship that, with U.S. support, lasted through the 1980s. With lethal assistance from the U.S., that military regime killed around 200,000 civilians.
If that were not bad enough, it has recently been revealed that from 1946 through at least 1953, the U.S. "Public Health Service" (hereinafter, "PHS") engaged in the systematic and deadly experimentation upon thousands of Guatemalans without their knowledge or consent. As a 2011 Report by the U.S. Presidential Commission for the Study of Bioethical Issues confirmed, the PHS conducted highly invasive medical tests on Guatemalan citizens drawn from penitentiaries, the national orphanage, state-run schools and rural communities, the military, a leprosarium, a mental institution, and hired commercial sex workers as a means to spread infection. In order to gain access to such vulnerable people, the U.S. researchers bribed Guatemalan institutions with essential supplies such as epilepsy medication for the mental asylum and malaria medication for the orphanage. The experimentation the PHS performed on these people included the following: deliberately infecting them with syphilis by scraping samples of infected pus and placing it on their genitalia or in their eyes; transferring gonorrhea from infected subjects to non-infected subjects; failing to provide treatment for contracted diseases; and various other medical procedures such as drawing blood and lumbar punctures to obtain cerebral fluid.
For a moving video about these horrifying experiments and how you can help, please click here.
The 2011 Presidential Bioethics Commission Report confirmed that the members of the U.S. medical team knew they were violating the rights of vulnerable populations in Guatemala and concluded that the experiments were a "reprehensible exploitation of our fellow human beings." President Obama, Secretary of State Clinton and Secretary of Health and Human Services Kathleen Sebelius have publicly apologized for these crimes, which they described as "abhorrent research practices." Yet, as the Washington Post decried in a January 13, 2012 editorial, the U.S. government has failed to provide any compensation to those it harmed.
Far from compensating the victims and their families, the U.S. government, through the Justice Department, recently filed motions asking the court to dismiss the class action lawsuit of Garcia, et al. v. Sebelius, et al. -- a case brought in the U.S. District Court for the District of Columbia by the Guatemalan victims asking for a fair remedy. As the Washington Post explained in its editorial piece calling for the U.S. to compensate the victims and their families:
A class action lawsuit, filed on behalf of eight individuals who claim to have been victims, spouses or descendants of victims, has been wending its way through the federal courts in the District. On Jan. 9, the Justice Department made a strong and potentially winning argument that the suit should be thrown out on technical [sovereign immunity] grounds. A victory in the legal arena does not absolve the U.S. government from its moral responsibility. Moreover, it should not take a lawsuit to prompt the government to do the right thing.
In a February 14, 2012 letter to President Obama and Secretary of State Clinton, scores of individuals and organizations (such as the AFL-CIO, Center for Constitutional Rights, CWA, Guatemalan Human Rights Commission, the National Lawyers Guild, the SEIU and the Washington Office on Latin America) implored the U.S. government to withdraw its motion to dismiss the Garcia v. Sebilius case, and to "seek a fair and amicable settement" with the victims of these grisly experiments. Bioethicists also agree that individual victims deserve a remedy for the harm they individually suffered.
If you find the U.S. response as appalling as the Washington Post and the signatories of the foregoing letter and want to add your voice to the call for just compensation of the Guatemalan victims, you can by signing the petition.
Region: Trade, Security, Economy and Integration [contents]
EFE. April 18, 2012
BEIJING – The value of China’s trade with Latin America rose 31.5 percent last year to $241.5 billion, a senior Chinese official said.
Exchanges between the Asian giant and Latin America totaled just $10 billion as recently as 11 years ago, Chinese Trade Ministry Counselor Yu Zhong Lu told foreign correspondents in Beijing.
China exported $121.7 billion worth of goods to Latin America last year while importing $119 billion in merchandise from the region.
Only the United States exceeds China in the level of trade with Latin America.
The Asian nation is interested not only in importing commodities from Latin America, but also in buying high-value-added manufactured goods from the region, Yu said.
“All kinds of products from Latin America will find consumers in China,” the official said, adding that Beijing has “high expectations regarding trade and economic cooperation” with the region.
Authorities in Beijing are also encouraging and fostering Chinese investment in Latin America, in sectors ranging from agriculture, energy and mining to high-tech manufacturing, Yu said.
He identified China’s top five Latin American trade partners as Brazil, Mexico, Chile, Venezuela and Argentina. EFE
US Isolated at Summit of Americas
The Real News. April 17, 2012
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington.
The Summit of the Americas took place last weekend in Colombia, and according to Reuters, United States was more isolated than ever from Latin American countries. Evo Morales of Bolivia said it was a united front of Latin America against the United States. A lot of this was over the question of Cuba and whether Cuba could attend the next Summit of the Americas, but not only about Cuba.
Now joining us to discuss all of this is Alex Main. Alex is a senior associate for international policy at the Center for Economic and Policy Research in Washington, and he focuses on U.S. foreign policy in Latin America and the Caribbean. Thanks for joining us again, Alex.
ALEX MAIN, SENIOR ASSOC., CENTER FOR ECONOMIC AND POLICY RESEARCH: Thank you, Paul.
JAY: So, first of all, let's start with what did the United States hope to accomplish at the Summit of the Americas, 'cause I don't think they accomplished what they wanted.
MAIN: Well, you know, I think the U.S. had very limited expectations from this conference, and, also, ones that were very much defined by the campaign, the presidential campaign in the U.S. So I think what President Obama was most interested in was highlighting the Colombia free trade area that has been agreed to, and he announced over the weekend that it's going to be implemented starting in May. I think he also wanted to show Latino voters in the U.S. that he cares about Latin America, even if Latin American leaders didn't necessarily reciprocate during the summit. And I think they were quite disappointed that the headlines were stolen by an incident that took place before the summit, with some Secret Service agents, and apparently also some soldiers, U.S. soldiers, where they were apparently involved in some sort of monkey business involving at least one Colombian prostitute. And that's really all that the U.S. media seemed to care about, at least most of the U.S. television media, and that's what got the most attention.
JAY: Right. So Reuters, [incompr.] Reuters said this—I don't think it got picked up by a lot of newspapers, but Reuters reported this as a diplomatic coup for Havana. This was—I don't think the Americans were quite expecting all of the Latin American countries to be on board on this, did they? I mean, even Honduras stood with the other Latin American countries in demanding or supporting Cuba's participation.
MAIN: Well, that's right. And more than that, the Latin American countries were all very outspoken, including the U.S.'s biggest ally, Colombia. Presidents Santos made some very strong statements, saying, you know, this has got to be the last Summit of the Americas without Cuba and that U.S. policy on Cuba was anchored in the Cold War—those were his exact words. This coming from the biggest U.S. ally in the entire region I think really is something that smarts, something that hurts for the U.S. administration.
And there were a number of other areas where they didn't really agree with other Latin American countries, including on the issue of the Malvinas, also known as the Falkland Islands. Argentina had been asking everyone to get behind a resolution basically condemning the U.K.'s position towards the Falklands, recognizing Argentinian sovereignty over the Falkland Islands. This is an issue that all Latin American countries support Argentina on, and Caribbean countries, but that neither the U.S. nor Canada were ready to back the U.S. on.
JAY: Well, on the issue of Cuba, the hypocrisy double standard is off the map. But, I mean, obviously the United States has no problem trading and doing engagement with China and participating in every international organization with China. Canada's hypocrisy is even triple that. Canada is maybe Cuba's biggest trading partner, certainly one of its biggest trading partners, so it's okay for Canada to engage with Cuba on every level economically. And then Harper says, oh, they're not a democracy, so they can't be at the summit. But then it's okay for Honduras to be there, a government that comes out of a coup.
MAIN: Well, that's right. Right. I think this is, you know, very emblematic of really how the Harper government has been, in terms of its dealings with the U.S. and sort of constantly supporting the U.S. on every major foreign policy issue, including one that's as contentious as this one on Cuba.
JAY: So what's likely to happen now with the Summit of the Americas? I mean, it sounds like the Latin American countries are saying they're not going to go to another summit if Cuba's not there, or Cuba will—I mean, I guess they need consensus of all the countries to invite Cuba. So if U.S. and Canada stand pat on this position, what—does that mean there's not going to be another summit?
MAIN: Well, and you know it's not just about Cuba, really. It's the fact that for a lot of Latin American countries, perhaps the majority at this point, a summit like the Summit of the Americas is pretty irrelevant. They've just had a very successful summit in Caracas, Venezuela, back in December, where they created a new organization called CELAC, the Community of Latin American and Caribbean States, in which they came to perfect agreement on basically all the issues that were issues of contention in this summit. And I think most Latin American countries now want to focus on this organization, which includes every Latin American and Caribbean country in the region and doesn't include the U.S. and Canada. So I think going forward there's going to be less and less interest in this sort of summit involving the U.S., well, simply because they really can't agree on a whole lot and it doesn't make sense for most of these countries anymore.
JAY: Now, the other issue that was raised that—Harper on this one apparently was a little equivocal, which was the issue of the war on drugs. And all the Latin American countries, including Colombia, are saying this war on drugs isn't working and the United States has to do something about its own drug laws. Harper at least said, yeah, there's something to be talked about here. Where does this—how contentious is this issue?
MAIN: Well, this is a big issue, particularly for Central American countries, although Colombia has also offered a lot of support towards this debate, being a big one and coming out in the open, the debate on whether drugs should in fact be decriminalized in order to deal with this out-of-control security problem throughout the region. And it's interesting to see that the U.S. has actually shown its openness to the debate, or at least in its rhetoric has said that it's open to this debate occurring, but remains extremely opposed to decriminalization going forward anywhere in the region.
JAY: Yeah, and fight even the most modest reforms inside the United States of, like, various kinds of decriminalization in California and other places. So the underlying issue here, though, is the change in the shift of the economy of Latin America into having more options. It's a—the whole Latin American economy is such a bigger economy in terms of the interaction of different Latin American countries, and those countries with China. But how do you explain some of these right-wing governments kind of allying with the left-wing governments on this issue?
MAIN: Well, because I think we've reached this situation of a critical mass of Latin American countries that are now shifting the entire policy debate in the region in another direction. They're shifting it towards no longer focusing on trying to apply neoliberal policies, but rather social agendas—they call them social agendas—addressing the symptoms and the causes of poverty through social programs, with education and health programs and this sort of thing.
There's been a fundamental shift as well in terms of the way the region reflects upon itself. And the call for unity that has come strongly from Venezuela, and originally really just from Venezuela towards the beginning of the 2000s, has really now taken over across the region. And it's very interesting to see countries like Brazil and Mexico being major promoters of this new organization, of the Community of Latin American and Caribbean States, for instance. So I think this has sort of pushed all the governments, whether left or right, in a different direction and one that's very much opposed to the way the U.S. wants to take things in the region.
JAY: It's not that most of these governments don't represent elites who are enthusiastically repressing their own people.
MAIN: No, this is still going on. And one of the unfortunate things that we saw come out of this summit that wasn't mentioned very much in the press is the fact that the Colombia free trade agreement is going forward, that Obama's indicated that Colombia has complied with the terms of the labor action plan that had been agreed to, which was to address all of the killings of union leaders that have taken place. Now, the problem with this action plan is that it doesn't actually set any concrete benchmarks in terms of limiting the killings of union leaders. So, for instance, so far this year four union leaders have been killed, and many more were killed last year. But since Colombia has complied in terms of creating new institutions and creating new safeguards (but they don't seem to be working), Obama therefore has the excuse to go forward with the free trade area. And this is a big disappointment for, I think, labor people throughout the U.S., and certainly in Colombia. And it was interesting to see that the AFL came out very strongly against Obama's announcement, as did the labor unions in Colombia.
JAY: Now, I'm sure with this sort of isolation of the United States and Latin America and the symbolic issue of Cuba, Obama's going to get critiqued from the right as having been too soft on Latin America. And while he continues the economic policies of previous American administrations, is there some truth to the issue that he hasn't been swinging a stick around Latin America the way, for example, you know, a harder-right Republican administration might? And I'm talking about more active in promoting coups or financing more reliably friendly forces in Latin America.
MAIN: Well, you know, I don't really think so, unfortunately. I mean, what we've really seen over the last three years, over three years now that Obama's been in power, is a continuation of the policies of his right-wing predecessor, George W. Bush, certainly in the region. He's continued, certainly, on the free trade agenda side of it, but also in terms of promoting U.S. militarization throughout the region as far as they can possibly go. And nearly three years ago there was an agreement that Obama and the State Department were pushing for with Colombia to allow the U.S. military full access to seven key Colombian military bases. Now, this caused such an outcry in the region that eventually Colombia had to back down.
But the U.S. has continued with this militarization agenda, and this also came up in the summit. Colombia and the U.S. have agreed to a new regional compact where the two countries are going to be promoting, essentially, the experience of Plan Colombia, the plan for a U.S.-backed militarization of the drug war in Colombia, throughout the region, particularly in Central America. This has already being going on. They're now ramping up this effort to back militaries in Central America that indeed have a great deal of very brutal human rights abuses on their records. This doesn't seem to matter, and the U.S. is very proud to show itself as a sponsor of Plan Colombia and to export—they call it exporting the Colombia model throughout Central America.
JAY: Well, this kind of financing of military under the rubric of the war on drugs often means getting militaries also not just enmeshed in the American military web, but also preparing for potential coups in the future.
MAIN: Well, absolutely, and this is something that's come out as well, thanks in part to the WikiLeaks diplomatic cables that have been leaked, where there's been quite a lot of discussion. There was one cable in particular that got quite a bit of attention, from a U.S. embassy in Chile—it was a recent cable; it was in 2008, I believe—where they discussed how part of the whole challenge of trying to contain what they referred to as the Chávez phenomenon—and that is countries swinging too far to the left for the taste of the U.S.—this containment can take place through promotion of better relations with countries' militaries. So they spell this out quite clearly that there has to be more U.S. funding going to Latin American militaries, because they can be counted on independently of the governments that are nominally in charge of those countries, they can be counted on to support the U.S. agenda.
JAY: So how then does one explain the role of Santos, president of Colombia, who's having a fairly friendly rapport with Chávez in Venezuela? They made a kind of deal over Honduras. Santos stands up to the U.S. over Cuba at the Summit of Americas. How do you—it's a little bit contradictory.
MAIN: Well, he has been extremely—he's been extremely capable at juggling these contradictory relationships, and quite to the contrary of his predecessor, Uribe, who completely alienated the rest of the region while becoming a great friend of the U.S. Now, Santos has done a much better job at having friendly relations with Venezuela. The relations with Venezuela, I would say, are probably the best that they've been in the last ten years at the moment. But at the same time, although he comes out against the U.S. on a few issues, certainly on the issue of Cuba, on the issue as well of decriminalization of drugs, I think fundamentally there are some very strong links that are still there. And the U.S. perhaps even appreciates his juggling routine to some extent, because it allows them to still have some leverage in the rest of Latin America through the influence of Colombia.
JAY: Right, 'cause Uribe was so isolated from most of the other Latin American countries.
MAIN: Yeah, that's right.
JAY: Right. Thanks very much for joining us, Alex.
MAIN: Alright. Thank you.
JAY: And thank you for joining us on The Real News Network.
S. American defense spending set to fall
UPI. April 17, 2012
BRASILIA, Brazil, April 17 (UPI) -- Overall arms spending in Latin America is likely to be flat because of heavy cutbacks in Brazilian defense programs and cash constraints on military expenditures by other countries in the region.
Last year Brazil began to row back on multibillion-dollar defense expansion programs, the result of a wide-ranging review of government spending by President Dilma Rousseff soon after she took office.
Defense spending plans initiated by former President Luiz Inacio Lula da Silva were affected in the cutbacks.
Analysts said the downward trend, reported by the Stockholm International Peace Research Institute in its latest review of global arms spending, could be temporary and a rebound couldn't be ruled out.
Brazil is still deciding when to buy replacements for aging fighter jets -- mostly reconditioned French Mirage fighters. The so-called FX-2 fighter jet competition that aims to replace the old inventory has been deferred a few times since Lula da Silva revived it in 2008.
A review that results in a multibillion-dollar purchase is imminent and may lead to a purchase program worth $9 billion or more, officials said.
Current plans call for the purchase of up to 36 fighter jets for the Brazilian air force. Boeing, France's Dassault Aviation and Sweden's Saab are competing to win the deal.
If a deal is struck that will catapult Latin America again into big defense spenders and will likely encourage other regional air forces to follow suit with copycat defense upgrade programs, analysts said.
The trends reported by SIPRI, therefore, may not last long, analysts said.
World military spending leveled out in 2011 after 13 years of increases, SIPRI said.
The military expenditure in 2011 totaled $1.74 trillion, almost unchanged since 2010 in real terms.
The institute this week published a comprehensive annual update of its military expenditure database.
"The small rise of just 0.3 percent in 2011 marks the end of a run of continuous increases in military spending between 1998 and 2010, including an annual average increase of 4.5 percent between 2001 and 2009," SIPRI said.
During the year, Brazil was one of the world's top six military spenders, alongside France, Germany, India, the United Kingdom and the United States, that made cuts in their military budgets, mainly to balance budgets.
Other states, notably China and Russia, increased their military spending markedly.
"The after-effects of the global economic crisis, especially deficit-reduction measures in the USA and Europe, have finally brought the decade-long rise in military spending to a halt -- at least for now," said Sam Perlo-Freeman, head of SIPRI's military expenditure project.ca