Latin America News Round-up
May 10, 2012
Journalist kidnapped in Honduras
For the latest news and developments on Haiti, please see CEPR's blog, "Haiti: Relief and Reconstruction Watch."
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Brazil and Southern Cone
Unasur members open their defence budgets and spending to peers
Brazil shelves plans to build new nuclear plants. AFP
Brazil Senate approves controversial World Cup law. BBC
Brazil April Inflation Jump Unlikely To Sway Central Bank. Dow Jones
Argentina Senate passes 'dignified death' law. BBC
Argentina makes sex-change surgery a legal right. AP
Argentina slows climate action amid energy supply crisis. Reuters
Argentina doesn’t want to start a trade war. Miami Herald
Chile approves hate-crime law after gay bashing. AP
Northern Andean Region
Venezuelan judge talking to US. AP
Colombia Seeks China Oil, Coal Deals. Wall Street Journal
Colombia passes 1st draft of drug crop legalization bill. Colombia Reports
Plot to assassinate Piedad Cordoba uncovered. Colombia Reports
Colombia's police did not help secure Comba's surrender: DEA. Colombia Reports
Western Andean Region
Ecuador law would forgive mortgage debt. AP
Ecuador: 10,000 Workers Left The Public Sector – Report. Dow Jones
Nationalization, Bolivian Style: Morales Seizes Electric Grid, Boosts Oil Incentives. NACLA
Bolivia’s Economy Grows, Thanks to Commitment to Indigenous People. Indian Country Today
Peru president leaves Japan with $250 mn loans. AFP
Korea, Peru agree to raise level of ties to strategic partnership. The Korea Herald
Mexico, Central America and Caribbean
Mexico's Lopez Obrador moves into second place: poll. Reuters
Mexican Crime Reporters Risk Becoming The Story. NPR
Journalist kidnapped in Honduras. AFP
Honduran Government Mobilizes to Find Kidnapped Journalist. EFE
El Salvador won't extradite 1989 slaying suspects. AP
Group: Jamaica swamped by interest on debt. AP
Region: Trade, Security, Economy and Integration
Unasur members open their defence budgets and spending to peers. Mercopress
Twitter politicking causes stir in Latin America. CNN
Brazil and Southern Cone [contents]
Brazil shelves plans to build new nuclear plants
AFP. May 9, 2012
BRASILIA — Brazil said Wednesday it has shelved plans to build new nuclear power stations in the coming years in the wake of last year's Fukushima disaster in Japan.
The previous government led by former president Luiz Inacio Lula da Silva had planned to construct between four and eight new nuclear plants through 2030.
But the energy ministry's executive secretary, Marcio Zimmermann, was quoted as telling a forum Tuesday that there was no need for new nuclear facilities for the next 10 years.
"The last plan, which runs through 2020, does not envisage any (new) nuclear power station because there is no need for it. Demand is met with hydro-electrical power and complementary energy sources such as wind, thermal and natural gas," Zimmermann said in remarks released by the ministry Wednesday.
"The 2021 plan, as far as I know, will not consider nuclear power stations either, " he added, although he did not rule out construction of such facilities in the longer term.
"After the (2011 Fukushima) accident in Japan, not just Brazil but the entire world stopped to analyze and assess," Mauricio Tomalsquim, president of the EPE energy research firm, told the same event.
Tomalsquim said that in the next 10 years, the hydro-electrical contribution to Brazil's energy mix will fall from the current 75 percent to 67 percent while that of renewable energy sources -- wind, solar and biomass -- will rise from eight to 16 percent.
Brazil's sole nuclear power plant, located in Angra dos Reis, a coastal town near Rio, has two pressurized water reactors in operation, with outputs respectively of 657 MWe (megawatt electrical) and 1350 MWe.
After a 24-year dispute, work resumed last June on a third reactor at that facility with a projected output of 1245 MWe. It is expected to be completed in 2015.
The Angras do Reis plant currently generates around three percent of Brazil's energy production, which relies overwhelmingly on hydroelectric installations.
Economic expansion, however, is outstripping supply, resulting in occasional blackouts across regions.
Greenpeace and other environmental lobby groups oppose broadening Brazil's nuclear program, arguing that there is potential for widespread ecological damage in case of an accident.
Brazil, Latin America's dominant power, and neighboring Argentina are the only South American countries operating civilian nuclear power stations.
Brazil Senate approves controversial World Cup law
BBC. May 10, 2012
The Brazilian Senate has passed a controversial and much-delayed bill paving the way for alcohol to be sold in stadiums at the 2014 World Cup.
When Brazil was chosen to host the event it promised to sell alcohol at matches despite a 2003 drinks ban introduced to stop violence.
Football's world governing body, Fifa, demanded the change because brewer Budweiser is a World Cup sponsor.
President Dilma Rousseff is now expected to sign the bill into law.
Although the legislation does not specifically authorise the sale of alcohol inside stadiums, the government says it does allow Brazil to fulfil Fifa's requirements.
"Violence in stadiums has decreased a lot because of the ban against alcoholic beverages," said Sen Lindbergh Farias, who voted in favour.
"They will only be able to sell them during the World Cup; we're not going to allow it in general."
But some senators still voiced concern.
"Fifa's demand doesn't make sense because the most important thing is that alcoholic advertisement is freely available," said Sen Humberto Costa.
"To liberalise the use of alcohol, imagining that 10,000 or 20,000 beers sold in a match would change a company's economic situation is absurd," he said.
Another sticking point in the passage of the World Cup bill has been over cut-price tickets.
In Brazil students and pensioners are entitled to half-price entry to sports matches, but Fifa did not want this extended to the World Cup because of the potential impact on revenues.
It has pledged to set aside 300,000 tickets for students, pensioners and minority groups instead.
Amid the disagreements, the law's approval was delayed, leading Fifa's secretary-general Jerome Valcke to say that Brazil needed a "kick up the backside".
Brazil's lower house passed the bill in March and at a meeting in Zurich this week Brazil and Fifa appeared to smooth over their differences.
Brazil April Inflation Jump Unlikely To Sway Central Bank
JEFF FICK. Dow Jones. May 9, 2012
RIO DE JANEIRO (Dow Jones)--Price hikes to cigarettes and medicines caused Brazil's consumer price index to jump in April, but the data are unlikely to sway the Brazilian Central Bank from further interest rate cuts as broader inflation measures showed price pressures in Latin America's largest economy continued to ease.
The official IPCA consumer price index gained 0.64% in April compared with a 0.21% rise in March, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday. That topped economists estimates and was the largest month-on-month gain since a 0.77% advance in April 2011.
The April inflation data, however, showed that the widely watched rolling 12-month IPCA rate continued to retreat. In the 12 months through April, the IPCA rose 5.10% versus a 5.24% advance in the 12-months through March. That was the lowest reading since a 4.70% increase in September 2010 but remained above the government's official year-end 2012 target of 4.5%, with a tolerance band of plus or minus two percentage points.
"In the first [half] of 2011, the IPCA climbed as the price for food and beverages rose steadily," Eulina Nunes dos Santos, the IBGE's coordinator for the inflation survey. "Now those percentages are being excluded from the rolling 12-month calculation."
Food and beverage prices are exerting less upward pressure on inflation this year, Nunes said. "At the same time, [prices for] vehicles and household appliances are helping to cool inflation," the researcher added.
The latest inflation figures should allow the central bank to maintain the current rate-cutting cycle that started in August, while also granting the government room to implement additional stimulus to boost economic activity. Brazil's economy expanded 2.7% in 2011 after a robust 7.5% advance in 2010 as the country's industrial sector struggled under the weight of a strong real currency and global economic uncertainties related to the ongoing debt crisis in Europe.
In recent months, the central bank's policy dilemma has shifted from concerns about inflation toward concerns about growth. Since August, the bank has slashed the benchmark Selic base interest rate to 9%. The central bank left the door open to further interest rate cuts in minutes from the April policy meeting, while recent changes to Brazil's savings accounts also removed a key technical barrier to lower rates. Economists and analysts now expect the Selic to fall below its 8.75% historical low.
Some economists, however, are starting to sound the alarm about inflationary pressures going forward. April will likely be the trough for Brazil's inflation rate in 2012, with price growth stabilizing at near the 5% through the rest of the year, said Silvio Campos Neto of Sao Paulo's Tendencias consultants group.
"The policies that are being executed now are aimed at stimulating consumption, which is going to raise the risks for inflation in 2013," Campos Neto said. "We're unlikely to see a continuation of the declines that we've seen over the past few months."
Tendencias is in the process of revising its 2012 inflation forecast from 5.5% to something closer to 5%, the economist said. In 2013, Tendencias expects Brazilian inflation to accelerate to 6%.
Food and beverage prices, which carry the heaviest weighting in the index, jumped in April as beans and other vegetable prices increased, the IBGE said. Food prices advanced 0.51% compared with a 0.25% gain in March.
The average 25% increase in cigarette prices combined with higher prices for medicines and domestic employees to boost non-food prices, the IBGE said. Non-food prices surged 0.68% in April after a 0.20% gain in March, the IBGE said.
May's consumer price index will likely see gains related to recent increases to taxi fares in Rio de Janeiro and Porto Alegre, while electricity and sewer rates in several key Brazilian cities were also adjusted higher, the IBGE's Nunes said.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; email@example.com
Argentina Senate passes 'dignified death' law
BBC. May 9, 2012
The Argentine Senate has approved a "dignified death" law to give the terminally ill and their families more say in end-of-life decisions.
The legislation means patients who are dying or suffering incurable illness or injury can refuse treatment, if there is an existing signed consent form.
Until now, a court order was needed to end treatment or life support.
The Senate has also passed a law that allows people to change their gender officially without court approval.
Senators voted by 55-0 in favour of the "dignified death" law, with 17 abstentions. The measure had already passed the lower house and it now goes to President Cristina Fernandez to be signed into law.
All those present were at pains to stress that the legislation does not allow euthanasia.
"The aim is to respect the autonomous will of the patient," said Jose Cano, who heads the Senate's health commission.
Susana Bustamante, whose 19-year-old daughter Melina had pleaded to be allowed to die amid the pain from her degenerative condition, welcomed the new law.
"You have to allow something natural like death. Death is not a dirty word, we've won it as a right," Ms Bustamante said.
Gender rights campaigners outside Congress in Buenos Aires Campaigners for gender rights gathered outside Congress as senators voted
Melina died last year shortly after making her public appeal.
Under the new legislation, a patient who is suffering a terminal illness or has an incurable condition can refuse treatment.
In cases where patients are unable to speak for themselves, the legislation empowers relatives or legal representatives to make the decision.
The main condition is that the patient or his representatives have signed a document setting out their wishes, before a notary and two witnesses.
During the debate, some senators expressed concern about ending life support to or withdrawing feeding tubes from a patient unable to communicate.
The Roman Catholic Church rejected the new legislation, arguing that life support should never be stopped.
Senators also used Wednesday's session to approve a gender rights law.
The legislation gives people the right to be officially recognised by the gender of their choosing, which may in some cases mean undergoing sex-change surgery.
People aged 18 and above will be able to have such an operation or hormone therapy without needing to apply to a judge.
Argentina makes sex-change surgery a legal right
MICHAEL WARREN. AP. May 10, 2012
BUENOS AIRES, Argentina -- Adults who want sex-change surgery or hormone therapy in Argentina will be able to get it as part of their public or private health care plans under a gender rights law approved Wednesday.
The measure also gives people the right to specify how their gender is listed at the civil registry when their physical characteristics don't match how they see themselves.
Senators approved the Gender Identity law by a vote of 55-0, with one abstention and more than a dozen senators declaring themselves absent - the same margin that approved a "death with dignity" law earlier in the day.
President Cristina Fernandez threw her support behind the law and is expected to sign it. She has often said how proud she is that Argentina became Latin America's first nation to legalize gay marriage two years ago, enabling thousands of same-sex couples to wed and enjoy the same legal rights as married heterosexual couples.
For many, gender rights were the next step.
Any adult will now be able to officially change his or her gender, image and birth name without having to get approval from doctors or judges - and without having to undergo physical changes beforehand, as many U.S. jurisdictions require.
"It's saying you can change your gender legally without having to change your body at all. That's unheard of," said Katrina Karkazis, a Stanford University medical anthropologist and bioethicst who wrote a book, "Fixing Sex," about the medical and legal treatment of people whose physical characteristics don't fully match their gender identity.
"There's a whole set of medical criteria that people have to meet to change their gender in the U.S., and meanwhile this gives the individual an extraordinary amount of authority for how they want to live. It's really incredible," she said.
When Argentines want to change their bodies, health care companies will have to provide them with surgery or hormone therapy on demand. Such treatments will be included in the "Obligatory Medical Plan," which means both private and public providers will not be able to charge extra for the services.
"This law is going to enable many of us to have light, to come out of the darkness, to appear," said Sen. Osvaldo Lopez of Tierra del Fuego, the only openly gay national lawmaker in Argentina.
"There are many people in our country who also deserve the power to exist," Lopez said.
Children also get a voice under the law: Youths under 18 who want to change their genders gain the right to do so with the approval of their legal guardians. But if parents or guardians want a gender identity change and don't have the child's consent, then a judge must intervene to ensure the child's rights are protected.
Argentina need not worry about vast numbers of people demanding sex changes, Karkazis predicted.
"This isn't going to create a huge demand on the national health system for these procedures. They're difficult, painful, irreversible. And this is why many people don't do it," she said.
But because the law says people can legally change their identities without having to undergo genital surgery or hormone therapy, these changes can be more benign and even reversible, if some day the person's self-image changes.
Other countries, including neighboring Uruguay, have passed gender rights laws, but Argentina's "is in the forefront of the world" because of these benefits it guarantees, said Cesar Cigliutti, president of the Homosexual Community of Argentina.
"This is truly a human right: the right to happiness," Sen. Miguel Pichetto said during the debate.
Argentina slows climate action amid energy supply crisis
Marcelo Teixeira. Reuters. May 10, 2012
May 10 (Reuters Point Carbon) - While its Latin American neighbors move forward with national climate laws, Argentina is backsliding on actions to tackle its greenhouse gas emissions as the country struggles to meet energy demand from a fast-growing middle class.
Argentina's GDP grew 7.3 percent last year, driving demand for energy that is overwhelmingly derived from fossil fuels. According to Argentine Institute of Petroleum and Gas (IAPG), energy demand rose 5.1 percent in 2011.
Fossil fuels, which are largely imported due to a failure by local refiners to meet demand, account for almost 90 percent of Argentina's energy use. The value of fuel imports doubled last year to $9.3 billion dollars.
In a bid to boost oil and gas production to keep up with local demand, the Argentine government last month decided to seize a controlling stake in oil company YPF from Spain's Repsol, sparking international concern that Argentina may scare off investment.
Experts and government officials have recognized that greenhouse gas emissions are rising as a result of growing energy consumption.
Argentina emitted roughly 167 million metric tons (184.1 million tons) of carbon dioxide in 2009 related to its energy use, a rise of over 20 percent from 2000, according to the most recent data by the U.S. Energy Information Administration.
Argentina's Climate Change director, Nazareno Castillo, acknowledged that some of the country's near-term priorities may be met at the expense of increasing greenhouse gas emissions.
"It is obvious that a country's policies have a number of dimensions and climate change is just of them," Castillo said.
"The priority of this government is to reduce poverty and build a more equal society - not always is this going to result in lower emissions," he added.
Castillo said that although the government is not developing a national climate change law similar to those passed in Brazil, Peru and Mexico, a special government-appointed committee has outlined the first phase of a 14- point national climate change strategy.
The committee is in the process of drafting a second phase, which will address emission reduction targets on a sector-by-sector basis.
"I believe that in some sectors we will be able to define emissions reductions targets. I am not sure if it will be possible to have an absolute target for the country," he said.
Castillo added that while energy-related emissions have led to a rise in CO2 levels, new and more restrictive forest legislation -- approved in 2009 -- may balance out the growth by reducing carbon output from forest degradation.
Some experts said that Argentina's current energy crisis provides a good opportunity for the country to overhaul its energy policy and move toward a less carbon-intensive matrix.
Maria Eugenia Di Paola, executive director of Fundacion Ambiente y Recursos Naturales (FARN), a major environmental research center, said the government should focus on what kind of development the country wants, not whose capital is behind it.
"The situation of Argentine energy mix is delicate. The case involving YPF should be a starting point to also discuss energy sustainability," Di Paola said.
She said President Christina Kirchner announced earlier in 2012 that the government would launch a program to boost clean energy projects, but it never happened.
"We are in an energy crisis. It is time to look for options. Besides biodiesel, there is not much being done on renewables," said Pablo Canziani, a climate researcher at the Pontificia Universidad Catolica Argentina.
"In this moment the country is increasing its CO2 emissions. Argentina is growing and several power units by gas or coal were opened recently."
Natural gas makes up to 53 percent of Argentine energy mix, followed by oil (32 percent), hydro (11 percent), nuclear and coal, with small shares, according to BP Energy Review.
Independent consultant Federico Moyano, a former manager for carbon broker Ecosecurities in Argentina, said he sees climate issues losing importance in the government.
"Argentina used to have an important role in international negotiations on climate, helping to develop regulations and projects. But this was four or five years ago. From there on, there has not been much being done," he said.
With the absence of any plans for a local carbon market and the future restrictions by the EU on sourcing carbon credits after 2012, Moyano sees demand for Clean Development Mechanism (CDM) offset projects declining.
He added that the current nationalization issue will add to the difficulties of local project developers.
"Financing costs will rise and will become more difficult to convince investors to put money in carbon-related projects," he said.
Thiago Viana, project manager for Ecoecurities in Rio de Janeiro, said the company closed its Buenos Aires office around a year ago due to the lack of interest in carbon abatement projects in Argentina.
"We went through a restructuring process and decided to focus on Brazil, where we had more projects," he said.
Argentina doesn’t want to start a trade war
JORGE ARG ü ELLO. Miami Herald. May 9, 2012
What defines a protectionist country nowadays? Is it when a developing country takes precautions against a flood of products with plummeting prices due to an international crisis? Or, is it when an export powerhouse delivers large subsidies exclusively for domestic production? In a world economy like today’s, can protectionism be measured solely by customs measures or those targeting imports?
The answers to these questions will determine if the Americas are headed towards a “trade war,” or if we will need to have a more open dialogue based on new terms and conditions.
I tested some of these answers a few days ago when I appeared on journalist Andres Oppenheimer’s TV show along with the U.S. under secretary of Commerce for International Trade and other participants.
Under Secretary Frank Sánchez expressed concern about Argentina’s current trade policies and mentioned recent claims made by the European Union, the United States — and even by Mexico — against Argentina at the World Trade Organization (WTO), which were widely reported by the media.
First, let me put this into context. Countries file these kinds of complaints against each other periodically; it is common practice within the WTO. While there have been no legal claims against any Latin American country from outside the region, the European Union and the United States have each faced more than a dozen of them in the last four years.
Is a trade war imminent? Speculating on this possibility is excessive. Tensions do exist due to the recent crisis that disrupted global trade. This resulted in lower prices, reduced domestic demand, the adoption of stimulus packages in developed countries, production surpluses, and a great number of products that countries need to sell all around the world.
Perceptions should be based on facts. For instance, why do some argue that Argentina is on the path to protectionism? The most protectionist countries buy the least. In 2011, among all G-20 members, the country that most increased its imports worldwide was Argentina, reaching 30.7 percent. Moreover, since 2003 Argentina’s overall imports have grown fourfold (447 percent)!
In our bilateral relationship, USITC statistics contrast notoriously with any argument that claims otherwise. During the last decade, our bilateral trade doubled (107.7 percent), reaching $13.1 billion. Argentina’s trade deficit with the United States grew 48 percent from January-February 2011 to 2012. Paradoxically, Argentina, the main producer of lemons in the world, which exports to over 60 countries, cannot sell a single lemon in the United States. That is protectionism.
Under Secretary Sanchez asserted that the United States had used subsidies as a tool to boost the economy. He argued that only subsidizing products intended for export was protectionist. Is protectionism being reinvented through regulations, subsidies or technical requirements that have similar distorting effects as a mere customs restriction measure?
This is an old debate. In 1933, in the League of Nations, the U.S. delegate advocated for subsidies on production while rejecting those placed on exports. Other countries such as Australia and Brazil, conversely, demanded that both be regulated, as they could be used for the same protectionist goal.
There is a new “protectionism” that is not covered under the WTO rules. For instance, the U.S. government bailed out General Motors and Chrysler. This distorts competition, discriminates between domestic and imported products, and has a protectionist effect. The same can be said with regard to the American Recovery and Reinvestment Act of 2009, which injected $787 billion into the economy for infrastructure, prioritizing the purchase of American goods.
Any government assistance that promotes social welfare and has no trade implications is healthy. But all other subsidies will inevitably have negative commercial repercussions. This reality can no longer be overlooked in discussions about protectionism, let alone without mentioning agricultural subsidies!
The trade tensions that resulted from the current global economic crisis need not call for the filing of claims or the fear of trade wars. We need to work together with accurate information, a broader view to give new answers to old questions, and the political will to increase trade to recover and strengthen the economies of our Americas and the world.
Jorge Argüello is Argentina’s ambassador to the United States.
Chile approves hate-crime law after gay bashing
EVA VERGARA. AP. May 10, 2012
SANTIAGO, Chile -- Chile's congress passed a hate-crimes law Wednesday night, months after a group of alleged neo-Nazis were arrested in the brutal murder of a young gay man.
The law enables people to file anti-discrimination lawsuits and adds hate-crime sentences for violent crimes. Gay activists waved Chilean flags when it passed by a vote of 25-to-3.
The law was stuck in Congress for seven years, but President Sebastian Pinera put it on the fast track after the death of Daniel Zamudio in March prompted people all across Chile to discuss hate crimes. He was found beaten and mutilated in a city park, with swastikas carved into his body. Lawmakers also are preparing to debate the president's proposed civil union law granting inheritance and other rights to same-sex couples.
"It's an enormous culture change for our country," said Sen. Alberto Espina, with the center-right ruling coalition.
"Chile is a country that discriminates against Mapuche (Indians), homosexuals, that discriminates against people for their nationality and for having disabilities," he added. "We have to assume this as a reality instead of hiding it under the rug."
Four suspects, some with criminal records for attacks on gays, have been jailed in Zamudio's killing. Prosecutors have asked for murder charges.
Many in Chile refer to the measure as the Zamudio law. Opposition Sen. Ximena Rincon said it honors his memory.
"This is the beginning of the end for those who discriminate against sexual orientation, disability, ethnic origin and race," Gay Liberation and Integration Movement President Rolando Jimenez said. "Today citizens have a judicial tool to defend themselves against discrimination. That is very good news. Starting today, Chile is a better place to live."
Northern Andean Region [contents]
Venezuelan judge talking to US
AP. May 9, 2012
Former Venezuelan Supreme Court Magistrate Eladio Aponte is in the United States talking to the Drug Enforcement Administration and Justice Department, U.S. officials said, making him one of the highest ranking Venezuelan officials to cooperate with U.S. authorities.
The former judge has accused Venezuelan officials of having ties to drug trafficking and of corruption and said he has evidence backing his allegations. Venezuela's National Assembly expelled him from the court in March for allegedly helping an alleged drug trafficker.
"If the proceedings advance without delays, in the next weeks Aponte will be ready to speak publicly, once he has finished the relocation of his loved ones," said the official. "Protecting family is something logical that any person would do."
Another U.S. official says a series of indictments and U.S. kingpin designations against alleged drug traffickers would likely result from Aponte's cooperation. Aponte is "singing his heart out," the official said.
Both officials asked to remain anonymous so as not to put others at risk and because they were not authorized to speak publicly on the subject.
Any indictments would remain sealed, one of the officials said, but the broader ramifications of Aponte's cooperation were significant.
In 2008, the U.S. Treasury Department accused then-Venezuelan intelligence chief Gen. Henry Rangel Silva and four other members of President Hugo Chavez's inner circle of helping leftist Colombian rebels by supplying arms and aiding drug trafficking operations. Chavez brushed aside those accusations as politically motivated, and in January he appointed Rangel as defense minister.
Aponte laid out much of his case in an interview after fleeing Venezuela, saying he believes some military officials, including National Anti-Drug Office chief Gen. Nestor Reverol, have ties to drug traffickers. Government officials have vehemently denied those accusations.
Aponte also said in the interview that as a military prosecutor, he had been contacted by Chavez about a case.
Chavez, for his part, has called Aponte "a criminal."
If Aponte provides U.S. authorities with evidence of corruption or drug ties among government officials, such claims could become a larger scandal for Chavez's government and might hurt its image internationally.
The charges have already become fodder for political debate in Venezuela as opposition politicians have called for an investigation into the claims.
However, the U.S. government's previous accusations against the Venezuelan government, including repeated allegations that it has failed in its counterdrug efforts, have not significantly impacted Chavez's domestic support nor his relationships with allied countries in Latin America.
Associated Press writer Ian James contributed from Caracas, Venezuela.
Colombia Seeks China Oil, Coal Deals
SIMON HALL. Wall Street Journal. May 9, 2012
BEIJING—Colombian President Juan Manuel Santos struck agreements with Chinese officials Wednesday thay may help direct much of the nation's future oil and coal exports to Asia and away from U.S. and European markets.
The agreements, signed during a trade and investment promotion trip to China in which Mr. Santos met with Chinese President Hu Jintao, come as the U.S. ally rethinks its traditional reliance on markets in the north and west, Colombian Mines and Energy Minister Mauricio Cardenas said in an interview Wednesday.
With demand growing in China and elsewhere and the evolving energy market in the U.S., "we have to start shifting our markets to Asia," he said.
On Wednesday, state-controlled China Development Bank signed a preliminary agreement to provide financing for an ambitious project to pipe 600,000 barrels a day of Venezuelan and Colombian oil through the jungles of both countries and across the Andes to southern Colombia's Pacific coast, from where it would be exported to China and other Asian markets. Details have yet to be finalized.
Chinese and Colombian officials also agreed to start talks on bringing in state-controlled Sinochem International Corp. as a possible equity partner in the pipeline project. Mr. Santos said Mr. Hu and Chinese companies had shown a strong interest in joining the pipeline project.
The ministerial team accompanying Mr. Santos held talks to develop central Colombia coking-coal reserves, on building a railway to the Pacific coast to cut shipping coasts to Asia, on developing mineral deposits in the Amazon basin and on supplying solar panels to up to 2,000 schools not connected to power grids. Coking coal is used to make steel.
Colombia exported just 56,000 barrels a day of crude to China in the first three months of 2012, a drop in the bucket of China's overall crude imports of 5.69 million barrels a day over that period. About half of Colombia's oil normally goes to the U.S. Colombian oil output will hit the one-million-barrels-a-day milestone in a few weeks, and could rise to 1.5 million barrels daily by the end of the decade.
The country's relationship with China is very different from that of leftist neighbors Venezuela and Ecuador, both of which have huge debts with Beijing.
Colombia has market-friendly investment policies and warm political ties with Washington. Still, U.S. demand has slowed as the economy matures, trimming demand for sources such as coal, and as it shifts its energy mix more toward natural gas, a result of a boom in production from new sources such as shale gas.
"It is absolutely true, and not just with coking coal," Mr. Cardenas said. "It is also with thermal coal, as with the development of shale gas in the U.S. We know that there will be less demand there."
The pipeline project comes as China has increased its investment in oil exploration and production in the region.
Sinochem in 2009 took over Colombian and Syrian oil assets from Emerald Energy PLC for $867 million, and in February it bought Colombia oil and pipeline assets from Total SA. State oil giant China Petrochemical Corp., known as Sinopec Group, also has producing investments in Colombia.
Mr. Cardenas said results of bidding by domestic and foreign companies for 109 oil and gas concessions, in which "four or five" Chinese groups are interested, will be out in November. He also said Chinese officials told him China wanted to be a strategic partner for energy with Colombia, and that oil produced by Chinese companies in Venezuela could be sent through the pipeline.
The final route of the pipeline hasn't been decided. It will carry 300,000 barrels a day of Colombian and Venezuelan crude each when completed in 2018.
Mr. Cardenas said talks also have been held with state-run China Railways Materials Co. on building a railroad from the center of the country to the Pacific coast to permit the exploitation of large coking-coal reserves there and the cheaper export of the steelmaking fuel to China and Asian markets than via the Panama Canal. For now, all Colombia's coal exports go via its Caribbean ports.
He said talks also are under way with Chinese companies about joint ventures to tap reserves of the mineral coltan, which is used as a conductor in a number of consumer-electronic products. Given the ecological importance of the area where the reserves are located and the presence of indigenous peoples, any project decisions would be made with sensitivity, Mr. Cardenas said.
Write to Simon Hall at firstname.lastname@example.org
Colombia passes 1st draft of drug crop legalization bill
Sarah Kinosian. Colombia Reports. May 9, 2012
The Colombian House of Representatives Wednesday passed the first draft of a bill that seeks to legalize illicit crops.
The initiative calls for the decriminalization of growing plants such as coca, marijuana and opium poppies in the country.
Representative Hugo Velasquez Jaramillo, who proposed the bill, explained that although the cultivation of plants would be legal under the new legislation, the processing and trafficking of drugs would remain subject to criminal sentencing.
According to Velazquez, congress cannot move forward with the “failed drug policy pursued by the governments of Colombia and the United States.”
“The important thing is that we have the opportunity to listen to congressmen from [drug] producing regions and hear from different government officials, not just those in opposition [of the bill] with Minister of Justice Juan Carlos Esguerra,” he said.
Velazquez also reminded the government that drug crop legalization is an agricultural issue as well as a legal matter.
Minister of Justice Juan Carlos Esguerra reiterated that the government is staunchly opposed to the proposed legislation, saying this is a “turning point in the fight against drugs” and it is not yet time to make a policy change.
“It’s not the time to anticipate a set of rules on this issue (…) this cannot work like the Lone Ranger,” he added.
Plot to assassinate Piedad Cordoba uncovered
Brandon Barrett. Colombia Reports. May 9, 2012
Former Colombian senator and hostage negotiator Piedad Cordoba claimed that she is the target of an assasination plot Wednesday.
"It is an assassination scheme that is very well designed and very well organized in terms of technology," Cordoba said.
"We are greatly concerned about the plan to assassinate Piedad Cordoba, but there have also been threats from the Black Eagles and the Rastrojos [neo-paramilitary groups] towards human rights organizations," said Olga Amparo Sanches, a member of Cordoba's human rights group, Colombians for Peace.
Cordoba wants the government to ensure the safety of high-ranking officials and increase security measures.
"The government must guarantee us life and must safeguard our right to form organizations to participate in politics and to seek peace," the former senator said.
Andres Villamizar, the director of Colombia's National Protection Agency, responded to Cordoba's request, saying "she can have absolute confidence that officials will receive protection and support for their work from the Colombian state."
He added that the government is open to altering security measures offered to Cordoba if she feels changes are necessary.
The murder plot was allegedly hatched by a group of residents of Turmeque, a town in northern Colombia, responsible for the deaths of "hundreds of human rights defenders," according to Cordoba.
"Paramilitarism is not over in Colombia," she added.
Cordoba, who helped to negotiate the April release of 10 hostages held by the FARC, said that Colombians for Peace will not mediate the release of captured French journalist Romeo Langlois.
The reporter was taken into FARC captivity April 28 when he was wounded in a firefight between the FARC and the army platoon he was embedded with. The Frenchman was filming a documentary on counternarcotics operations for news network France 24.
Colombia's police did not help secure Comba's surrender: DEA
Rosemary Westwood. Colombia Reports. May 8, 2012
The director of the United States Drug Enforcement Agency has said that Colombian police did not work to secure the surrender of the powerful drug lord Javier Antonio Calle Serna, W Radio reported Tuesday.
The comments come amid U.S. refusal to confirm or deny reports that Calle, alias “Comba,” has turned himself over to American authorities.
Colombia’s Deputy Police Director Gen. Jose Robert Leon said Monday that the kingpin of the powerful ‘Rastrojos’ drug cartel surrendered on the island of Aruba, located just off Venezuela’s coast. He was then reportedly flown to New York and arrested on drug trafficking charges.
DEA chief Michele Leonhart told W Radio that Colombian police did not collaborate with American authorities in securing Calle’s surrender.
In the interview Leonhart noted that when law enforcement undermines the power of drug trafficking networks, bosses have few choices other than to surrender.
“If the (Colombian) authorities continue to extradite criminals, they will continue to surrender,” she told the broadcaster.
She also spoke highly of outgoing National Police Director Oscar Naranjo, saying the police force was a “great success” under Naranjo.
Western Andean Region [contents]
Ecuador law would forgive mortgage debt
AP. May 9, 2012
QUITO, Ecuador -- Ecuador's legislature has passed a law that would oblige banks to forgive any outstanding debt on mortgages to first-time home buyers of properties worth up to $146,000 if they default and forfeit the home.
The law would also apply to loans by banks to first-time purchasers of automobiles that cost up to $29,200.
President Rafael Correa praised the law after it passed 68-21 on Tuesday evening. He did not say whether he would sign it or possibly seek amendments.
The bill's sponsor says that if Spain had passed a similar law a decade ago it could have avoided the housing bubble that has caused so many to lose homes.
The director of Ecuador's private banking association has said the legislation would discourage construction, and would make getting mortgages more difficult.
Ecuador: 10,000 Workers Left The Public Sector - Report
Dow Jones. May 10, 2012
QUITO (Dow Jones)--About 10,000 workers have left Ecuador's public sector since last year, Labor Relations Minister Francisco Vacas said.
Vacas was quoted as saying Thursday in newspaper El Comercio that President Rafael Correa administration's has spent about $150 million to trim workers from government payrolls.
A government official who asked to keep his name confidential told Dow Jones Newswires that the government has budgeted about $400 million to trim public workers between 2011 and 2012.
About $180 million will come from an Interamerican Development Bank's loan, the source said.
The process to reduce public workers has been strongly questioned by local analysts and unions, who have said that the government is hiring new workers to replace those who were dismissed.
Vacas said that he doesn't know how many persons have entered into the public sector and that vacancies are fill through competition.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; email@example.com
Nationalization, Bolivian Style: Morales Seizes Electric Grid, Boosts Oil Incentives
Emily Achtenberg. NACLA. May 10, 2012
On May 1, President Evo Morales seized control of Bolivia’s electric grid from a subsidiary of the Spanish-owned Red Eléctrica de España. In a dramatic ritual now familiar to Bolivians as a hallmark of the Morales government on International Workers’ Day, Bolivian soldiers peacefully occupied the company’s Cochabamba offices and draped the Bolivian flag across its entrance.
Coming on the heels of Argentina’s recent move to expropriate Spanish energy company Repsol’s majority stake in its national gas and oil company, the event has generated more than the usual volume of outrage and dire predictions of capital flight from U.S. business interests.
“It’s crazy to invest in Bolivia, and this is a perfect example why," says Eric Farnsworth, vice-president of the DC-based Council of the Americas. "He’s taking actions that guarantee that investment will dry up further.”
“The left-wing populist strategy of demonizing the investor class has one big drawback: the law of diminishing (investor) returns,” warns Mary Anastasia O’Grady in the Wall Street Journal.
In reality, far from abandoning Bolivia, foreign companies have remained actively engaged in its post- nationalization energy sector. This is due in no small part to Morales’s increasingly investor-friendly policies, including his willingness to boost private incentives to meet domestic energy needs.
The takeover of the electric grid, which was privatized in 1997, is part of Bolivia’s overall strategy to re-nationalize companies that were divested by past neoliberal governments, increasing state control over strategic sectors such as natural resources and basic services. Since 2006, Morales has nationalized the country’s gas fields, oil refineries, pension funds, telecommunications, and main hydroelectric power plants.
According to Morales, Red Eléctrica has invested only $81 million in Bolivia’s electric grid since acquiring it in 2002, while drawing around $100 million in cumulative profits. Three of Bolivia’s nine departments remain isolated from the national network. “The government invested $220 million in electricity generation while others profited, so we’re recovering what was ours,” Morales said.
Apart from these ideological and economic considerations, domestic politics also played a role in the May 1 event. Nationalizations have been highly popular in Bolivia, and this one may help Morales shore up support from disaffected constituencies at a time of heightened civic unrest. Still, the increase in power blackouts since the government took over electricity generation in 2010 serves as a reminder that the move could also backfire politically if the level of service does not meet public expectations.
In any case, despite the theatrics of the May 1 announcement, Bolivia’s most recent nationalization has been relatively non-confrontational, especially when compared to Argentina’s move with Repsol. For one thing, the targeted electric company subsidiary generated just 3% of its parent company’s profits, while Argentina’s YPF accounted for 21% of Repsol’s. In an effort to minimize negative fallout, Morales gave Spain 3 days notice of the takeover, whereas Argentina's President Cristina Fernández refused to meet with Repsol in advance.
After its initial criticism, Spain has acknowledged the legitimacy of Bolivia’s nationalization decision, which includes a promise of fair compensation. Red Eléctrica expects to reach a friendly agreement with Bolivia on the value of its investment, and the parties have agreed to retain a joint appraiser.
On the same day as the electricity grid takeover, Morales inaugurated a $600 million natural gas processing plant in eastern Bolivia with Repsol that represents the single biggest foreign investment under his government. The plant will triple the amount of gas sold to Argentina. Repsol is one of ten gas and oil multinationals that were forced to renegotiate their contracts with Bolivia in 2006, giving the state majority ownership and vastly increasing taxes and royalties under a relatively modest form of nationalization.
“We have a relation of great trust with Repsol,” said Morales, contrasting Bolivia’s situation with Argentina’s. “Repsol respects all Bolivian rules, and its promised investments are going ahead in a good manner.” At the same time, Morales noted, Bolivia’s experience with Repsol shows that nationalization (Bolivian style) can be a success, providing an instructive example for Argentina.
As Carlos Arze of Bolivia’s Center for Research on Labor and Agrarian Development (CEDLA) points out, six years after Bolivia nationalized its hydrocarbons reserves, not a single foreign oil and gas company has pulled out of Bolivia. Despite the major shift in revenue splits, the firms’ annual profits have remained about the same in dollar terms ($824 million), due to the vast increase in revenues generated by high commodity prices and natural gas exports. Annual hydrocarbons revenues collected by the state have increased from an average of $332 million prior to nationalization to more than $2 billion today.
Still, there have been major setbacks with oil and gas nationalization. While natural gas production has increased, crude oil production has fallen by more than 20% since 2005. With crude oil prices that the state can pay frozen at $27 per barrel (less than a quarter of today’s world price), companies are unwilling to invest in exploration of new reserves. As a result, Bolivia has become increasingly dependent on fuel imports for domestic consumption, with an escalating annual price tag estimated at $755 million in 2012, to subsidize the cost of imported gasoline and diesel to consumers.959 Repsol gas processing plant. Credit: La Razón.
In an effort to reduce this dependency and stimulate energy sovereignty, the government instituted a new policy on April 19, boosting incentives for crude oil production from $10 to $40 per barrel (through a $30 tax credit).
The new policy effectively repositions the ill-fated December 2010 Gasolinazo, when the government tried to accomplish the same goals on the backs of consumers by abruptly cancelling the fuel subsidy and dramatically increasing gasoline prices. That policy was revoked after massive protests, sending shock waves through Bolivia’s social and political sectors that continue to reverberate to this day.
Critics of the new incentive, including Arze, believe that it’s just another form of giveaway to the oil companies which far exceeds their production costs, and will still be paid by the public through taxes foregone from the national treasury. They question where the funds will come from, since the government claims it can’t afford higher salaries for striking health care workers and other disaffected sectors. According to the government, savings from reduced gasoline and diesel imports will more than offset the tax incentive cost (estimated at $358 million over five years).
In any case, it’s clear that Bolivian-style nationalization is far from incompatible with continued private investment, and that the Morales government is willing to underwrite the incentives it believes are necessary to accommodate foreign capital. Whether this investor-friendly approach is the best policy for Bolivia remains to be seen, but it’s a far cry from “demonizing” the private sector.
Read more on the TIPNIS conflict on Emily Achtenberg's blog, Rebel Currents. See also, the January/February 2011 NACLA Report, "Golpistas! Coups and Democracy in the 21st Century;" the September/October 2010 NACLA Report, "After Recognition: Indigenous Peoples Confront Capitalism;" or the September/October 2009 NACLA Report, "Political Environments: Development, Dissent, and the New Extraction." Or subscribe to NACLA.
Bolivia’s Economy Grows, Thanks to Commitment to Indigenous People
Sara Shahriari. Indian Country Today. May 10, 2012
Evo Morales promised a new economic policy based on indigenous principles and an aggressive redistribution of natural resource wealth to benefit all Bolivians when he became the country’s first indigenous president in 2006. Observers wondered how his plans to increase the role of the state in industry would play out, and some predicted foreign investors would be scared out of the Andean nation for good. So how did a president who bucked prevailing economic policy and raised eyebrows globally build the growing economy Bolivia enjoys today?
The Road to Evo
“They were tragic days, because people were killed who were demanding their rights–natural resources, and who with a clear conscience fought for gas, which is national patrimony and can bring us a better quality of life.” —Valentina Jurado, Voices From Bolivian October
Bands of protesters with bandanas fixed tight over their faces to ward of tear gas as they braved gunshots and blazing gasoline explosions became normal for several weeks in the Bolivian city of El Alto in 2003. This was the Andean nation’s Gas War, a conflict that pitted Bolivia’s government, which permitted cheap natural gas exports via Chile, against the people of El Alto, a city of Aymara Indians. Bolivians were tired of seeing their natural resources exported over hundreds of years while the communities those resources came from remained poor and tired of a government dominated by a white elite that seemed out of touch with the country’s indigenous majority.
Nearly 70 protesters died in the Gas War, and one of its political casualties was Bolivia’s president, Gonzalo Sánchez de Lozada, who resigned. A few years later all eyes then turned toward Evo Morales, head of a powerful coca-growers union. In a country where the political winds change in an instant, he was a popular leader with a remarkably durable base of support. In 2006 Morales, an Aymara Indian and former llama herder with only a high-school education, became president of Bolivia. His election was a milestone in a country where prejudice against Indigenous Peoples runs so deep that the word Indian is considered a slur. Morales answered the demands voiced in El Alto in 2003, vowing Bolivia could have a new kind of economy—one based on the concept of vivir bien, or suma qamaña in the Aymara language, a phrase that means “to live well.”
“Capitalism is the worst enemy of humanity. Capitalism and the senseless development of unlimited industrialization are what destroy the environment,” President Morales said during a 2009 interview with Democracy Now! Morales added that the economic policy must change and luxury consumption end. “It’s ending ‘living better,’ which exploits people and means plundering natural resources, which is egoism and individualism. In capitalism there is neither solidarity nor reciprocity. It’s crucial to think of another way of life: in vivir bien, not living better. Living better comes at the cost of others, and at the cost of the destruction of the environment.”
Despite aggressive opposition concentrated in the eastern part of the country, Morales forged forward, backed by portions of the country’s middle class and most of its Indigenous Peoples, who often refer to him as Brother Evo.
Resources for Bolivians
“We don’t want a beggar state—sadly we have been made beggars; we don’t want Bolivia, her government and her economic teams to go asking for alms from the United States, Europe or Asia. We want that to end, and for it to end we must nationalize our natural resources.” —Evo Morales, address to the Bolivian Congress, 2006
During much of the 1990s, international organizations like the World Bank pushed Bolivia to privatize businesses held by the state, a plan now referred to as a neoliberal model. Operations from water service to gas extraction were transferred from the state to private companies in hopes that international investment would jump-start chronically poor Bolivia’s economy. But economic growth was sluggish prompting questions about who had truly benefitted from the reforms, and protests against water privatization in 2000 and the El Alto conflict in 2003 manifested boiling dissatisfaction with the government’s pro-privatization stance, according to Benjamin Kohl and Linda Farthing, who investigate economic reforms in their book Impasse in Bolivia. “There is a predominant view in academics that considers government direct intervention as less efficient than privately run enterprises,” says Diego Vacaflores, an economist and assistant professor at Texas State University–San Marcos. Vacaflores points out that state-owned businesses before the neoliberal reforms were accused of problems with profitability, corruption and political favoritism, while privately run enterprises in Bolivia are often perceived as socially unresponsive and disinclined to reinvest their profits.
The neoliberal plan also included bringing down out-of-control inflation because the country’s currency was rapidly losing value. On the inflation front the reforms were successful, but sluggish economic growth from 2000 to 2005 prompted questions about who benefited from the reforms, especially as they resulted in the elimination of thousands of jobs in state-run companies, according to Kohl and Farthing. The protests against water privatization in 2000 and the El Alto conflict in 2003 manifested boiling dissatisfaction with the government’s pro-privatization stance.
“It’s ironic that past Bolivian administrations were the faithful pupils of neoliberalism,” says Kathryn Ledebur, director of policy analyst group the Andean Information Network. “They followed all the rules, but the results left a lot to be desired and [left] the bulk of the population impoverished. The demise of their political credibility and clout coincided neatly with demands for a new model.”
Morales’s predecessor, President Carlos Mesa, started the transition in 2005, when he pushed a hydrocarbons law that gave Bolivia a bigger share of the industry’s profits. Morales later brought electricity generation and some telecommunications and mining operations back under government control, and he pushed for the creation of small state-run businesses.
Following that push, government revenues rose. Some of the new money went toward programs called conditional cash transfers that give money to the elderly, mothers with babies, and children who successfully complete a year in school. Ariel Zabala David, director of planning for the ministry of productive development and plural economy, says these rewards are part of the country’s redistributive economic strategy, and promote the concept of vivir bien. “The cash transfers are created specifically for the neediest people in urban and rural areas…[and generate] development in internal commerce and the internal market,” he explains.
Though the amounts range from about $30 to $350 a year, they can make a difference in the lives of Bolivia’s poor, many of whom earn just a few dollars a day. The government estimates that in 2011 30 percent of Bolivians received a cash transfer.
Exactly how much poverty has decreased in Bolivia since 2006 remains unclear, mainly because of a lack of good data. The Bolivian government estimates that moderate poverty fell nearly 12 percentage points from 2006 to 2011, while extreme poverty fell more than 13 points. However, those figures rely on estimates for 2010 and 2011.
The Oxford Poverty & Human Development Initiative (OPHDI) also saw a reduction in poverty when it analyzed data from 2003 and 2008. That group co-created the Multidimensional Poverty Index (MPI) with the United Nations Development Program, which measures three key dimensions of poverty: health, education and living standard. They found that the MPI in Bolivia fell from 36 percent in 2003 to 21 percent in 2008. “The biggest progress was observed in improvements to school attendance and access to improved sanitation,” said José Manuel Roche, a research officer at OPHDI.
Despite that good news there is still much work ahead for Bolivia, which still has one of the highest poverty rates in Latin America.
Economic Growth and Risks
“In 2007 the neoliberals began to notice that the State was driving and controlling the economy, and it was not the market that controlled the economy as it did under the neoliberal model.” —Minister of Finance Luis Arce Catacora, 2011
Bolivia’s gross domestic product has grown steadily in recent years, averaging a 4.7 percent annual increase between 2006 and 2011, compared with three percent between 2000 and 2005. As many observers predicted, instability in Bolivia in the early 2000s led to a fall in net direct foreign investment by 2005. During the first years of the Morales presidency foreign investors seemed wary, but that appears to be changing: foreign investment hit $859 million in 2011, compared with $703 million 10 years earlier, according to Bolivia’s Central Bank.
Bolivia’s international reserves and trade balance also improved over the past decade. International reserves rose significantly, from about $1 billion in 2001 to more than $12 billion in 2011. The country had a negative trade balance in 2001, but in 2011 exports led over imports to the tune of nearly $1.5 billion.
Indigenous groups and environmentalist marched 242 miles to La Paz to block a planned highway.
Hydrocarbons have been selling fairly steadily at high prices and account for a largest chunk of the country’s exports, so a drop in oil prices would hurt Bolivia’s economy. To mitigate its dependence on a few raw material exports, Bolivia is pushing internal demand and striving to industrialize, but a February 2012 Chartis risk assessment noted that, “Attempts to boost industrialization have failed, at least so far, to break Bolivia’s extreme dependency on the export of a handful of volatile commodity exports.”
The Search for Vivir Bien
“A state based on respect and equality between all, with principles of sovereignty, dignity, complementarity, solidarity, harmony and equity in the distribution and redistribution of social product, where the search for vivir bien predominates.” —Preamble to new Bolivian Constitution
“Vivir bien connotes respect for life. Life means living together and asking, ‘Am I going to live throwing things out of order, am I going to live by force? Or am I going to live in harmony and balance?’ ” says Fernando Huanacuni, an Aymara Indian who works in Bolivia’s Foreign Ministry. He says vivir bien is a concept all people can understand, a collective as opposed to individual state of well-being that should be taught in schools and embraced by all.
However, for most Bolivians it’s still not clear what the government means by vivir bien, and ideas on what constitutes living well are as diverse as Bolivia itself.
Tensions between different concepts of vivir bien were thrown into the spotlight last year when indigenous groups clashed with the Bolivian government over construction of a road that would cut through their territory in the Isiboro Secure Indigenous Territory and National Park (TIPNIS). Supporters of the road say it will bring economic opportunities to many communities and provide an important link between east and west Bolivia. Many TIPNIS residents say it will open up their land to exploitation by outsiders—including logging, large-scale farming and possibly oil or gas extraction companies—that will damage their way of life.
For some, extractive industry can never be reconciled with the concept of vivir bien. Raúl Prada helped draft Bolivia’s 2009 constitution, but today he is an outspoken critic of the government. “The model for a society of vivir bien is an alternative model to modernity, capitalism and development,” he says. “The constitution’s model is not an extractive model; the government has chosen to continue the extractive model and to continue the dependent capitalism of Bolivian and Latin American elites, which is a colonial imposition.”
Gregorio Vicente, a highlands indigenous leader, says mining and other extractive industries don’t need to end in Bolivia in order for vivir bien to exist, but that they must be conducted in strict accordance with environmental standards and with respect for Indigenous Peoples. For Vicente, success hinges on balance. “For us vivir bien is not just a slogan, it’s wisdom and balance between mankind and the Earth, men and women, everything is dual,” he says. He worries that today the balance between people and the Earth is broken as some extractive projects contaminate both. “If the environment is poisoned, there is no vivir bien.”
Vicente’s concerns point to one of the Bolivian government’s biggest challenges as it moves forward: How to reconcile a growing extractive economy pushing toward industrialization with the principles of balance and concern for the environment and indigenous rights that helped it rise with the support of many of Bolivia’s Indigenous Peoples.
Peru president leaves Japan with $250 mn loans
AFP. May 10, 2012
TOKYO — Peruvian President Ollanta Humala wrapped up a three-day visit to Japan Thursday, having secured up to $250 million worth of loans for infrastructure projects.
The cash will be used on projects including better water and sewage systems in Lima and boosting energy-saving measures in public transport, the two sides said in a joint statement.
Peru supplies raw materials including copper, zinc and silver to resource-strapped Japan, which is one of the South American nation's largest trading partners.
Japanese Prime Minister Yoshihiko Noda said Wednesday Tokyo would provide up to 20 billion yen in loans.
Humala said Peru wants to increase cooperation with Japan "in the areas of renewable energy, eco-efficiency and clean technologies, for the purpose of progressively reducing his country's dependence on fossil fuels," Kyodo reported.
A free trade agreement that took effect in March will, over the next decade, see tariffs scrapped on goods that represent more than 99 percent of the value of trade between the two countries.
Peru is also one of a number of countries involved in talks to form a huge Pacific-wide free trade area.
Korea, Peru agree to raise level of ties to strategic partnership
The Korea Herald. May 9, 2012
South Korea and Peru on Thursday agreed to elevate their relationship to a “comprehensive strategic partnership,” paving the way for deepened cooperation in business, trade, technology and other areas.
President Lee Myung-bak and his Peruvian counterpart Ollanta Moises Humala Tasso reached the agreement during their summit talks at Cheong Wa Dae in Seoul. It was announced in a joint statement.
The Peruvian president arrived here Thursday for a three-day visit at the invitation of President Lee.
President Lee Myung-bak shakes hands with Peruvian leader Ollanta Moises Humala Tasso during their summit at Cheong Wa Dae on Thursday. (Yonhap News)
On the economic front, the two leaders agreed to enhance cooperation in resource development and investment, as well as exchanges of knowledge and technology, the joint statement said.
The two countries also signed an agreement to avoid double taxation and prevent tax evasion.
Their economic ties have widened and deepened since their bilateral free trade pact went into effect last August. The two-way trade volume reached $3.32 billion last year.
They also agreed to strengthen their political cooperation through exchanges of high-level officials and a bilateral policy consultative meeting.
In science and technology, they decided to explore possible areas of bilateral cooperation including bio-engineering, maritime science, energy, petrochemistry and human resources development.
The two countries will also work together on management of water resources and development and application of green growth technology, as well as share policy experiences concerning other environmental issues.
By Song Sang-ho (firstname.lastname@example.org)
Mexico, Central America and Caribbean [contents]
Mexico's Lopez Obrador moves into second place: poll
Reuters. May 9, 2012
MEXICO CITY (Reuters) - Mexico's leftist presidential candidate Andres Manuel Lopez Obrador has moved into second place in the running for the July 1 election, a poll showed on Wednesday, though he trails badly in overall support.
The poll by GEA/ISA for Milenio newspaper put support for Lopez Obrador of the opposition Democratic Revolution Party (PRD) at 19.5 percent, followed closely by Josefina Vazquez Mota of the ruling National Action Party (PAN) with 18.8 percent.
Front-runner Enrique Pena Nieto of the Institutional Revolutionary Party (PRI) still has the lead with 36 percent support.
The GEA/ISA poll released late on Wednesday marks the first survey from the pollster in which all the data was collected after Sunday's first presidential debate.
The daily survey by GEA-ISA polling firm surveyed 1,152 eligible voters over three days and had a margin of error of 3 points.
Mexican Crime Reporters Risk Becoming The Story
John Burnett. NPR. May 9, 2012
Mexico is reeling from another round of brutal murders of journalists. Four journalists and photographers who covered the police beat have been killed in eastern Mexico's crime-ridden state of Veracruz.
There's a new call for the federal government to take measures to protect journalists in a country where more and more reporters censor themselves out of fear.
The ceremony to remember the most recent killings took place last weekend in Mexico City on the steps of the Monument of Independence between statues depicting peace and law.
As the names of murdered journalists were called, the emotional crowd responded: "He shouldn't have died."
According to the Committee to Protect Journalists, more than 45 journalists have been killed or disappeared in Mexico since 2006. Some press advocacy organizations put the number much higher. They are among the many victims in an organized crime free-for-all that has killed more than 50,000 Mexicans in that time period.
The Latest Killings
Last Thursday, the dismembered bodies of two news photographers, a former photojournalist and another woman were found stuffed in sacks, floating in a canal in the port city of Veracruz in eastern Mexico.
Five days earlier, the body of Regina Martinez, an investigative reporter for the respected newsweekly Proceso, was found in her bathroom, beaten and strangled.
"The thing that characterized her reporting is that Regina gave voice to the vulnerable, to indigenous people and to the oppressed," says a Veracruz-based reporter who fled to Mexico City for his security and asked to remain anonymous.
"The situation of journalism in Veracruz has reached very high levels of fear," he says. "Perhaps it's safer for reporters to become like speaker cabinets that only say what others tell us. And we never investigate."
In fact, this is already the case in many Mexican states where the drug cartel war is raging, particularly where Los Zetas are active. This organized crime group, founded by army deserters, is especially savage against journalists who report unflattering crime news, or who take payoffs from rival cartels.
Attempt To Protect Journalists
With the upsurge in reporter killings, Mexico has attempted to protect journalists. Six years ago, it created a special prosecutor for crimes committed against journalists within the federal attorney general's office. But it's toothless, says journalism advocate Rogelio Hernandez.
"The special prosecutor to investigate the cases of journalists doesn't have a budget, a staff, or the backing of the attorney general, the Interior Ministry or the presidency. It's a game," Hernandez says. "They have demonstrated total inefficiency, ineffectiveness and ignorance."
A priest sprinkles holy water on the coffins of photojournalists Gabriel Huge (bottom) and Guillermo Luna during a public Mass in Veracruz last week. Killed by unknown assailants, the bodies were found dumped in plastic bags by a canal in Veracruz less than a week after the killing of Regina Martinez.
Enlarge Felix Marquez/AP
A priest sprinkles holy water on the coffins of photojournalists Gabriel Huge (bottom) and Guillermo Luna during a public Mass in Veracruz last week. Killed by unknown assailants, the bodies were found dumped in plastic bags by a canal in Veracruz less than a week after the killing of Regina Martinez.
The Mexican attorney general's office did not respond to repeated requests for comment.
Manuel Clouthier is a congressman from the northwestern state of Sinaloa, where the drug cartels are rampant. He's also a former newspaper publisher who is currently running a quixotic independent campaign for the presidency. He says it's easy to blame the drug cartels for threats against the media, but his experience suggests they are not the main problem.
"The majority of the aggressions against journalists come from those in power, not from organized crime," Clouthier says.
He says that up to 2009, when he was publisher of the Noreste newspaper in Culiacan, Sinaloa, threats and intimidation directed at reporters and his own family came more from politicians in power than from drug traffickers.
Last week, overwhelming majorities in both houses of the Mexican Congress approved a bill that would create urgent measures to protect journalists and human rights defenders. Among other actions, it would create a rapid response team that would move threatened journalists to a safe place within 36 hours.
The bill awaits the president's signature.
Such a law might ease anxiety in Veracruz, where skittish news directors have reportedly ordered their reporters not to attend the funerals of their dead colleagues, fearing more attacks.
Journalist kidnapped in Honduras
AFP. May 9, 2012
TEGUCIGALPA — A journalist with a top Honduran radio station was kidnapped Wednesday on his way to work, police and co-workers said, days after another reporter was killed and dumped on the side of a road.
"This morning when he was driving from his house to carry out his duties, our comrade Angel Alfredo Villatoro was kidnapped," HRN radio said in a broadcast.
Police spokesman Hector Ivan Mejia confirmed the abduction at around dawn in eastern Tegucigalpa, but said the kidnappers had not been in communication to demand a ransom.
Tegucigalpa police chief Ramon Martinez said, based on what witnesses said, "young gang members" appeared to have carried out the kidnapping.
A colleague at HRN radio station pleaded with his abductors not to harm Villatoro.
"We're asking his kidnappers to protect his life," said radio journalist Romulo Matamoros. "His family are stricken, and very worried over his sudden disappearance."
The incident came two days after the lifeless body of journalist and gay rights activist, Erick Alex Martinez Avila, 32, was found on the side of a road near Tegucigalpa, showing signs of having been strangled to death.
In the almost three years since a coup overthrew the government of leftist president Manuel Zelaya, 19 journalists have been killed in Honduras and all of the cases remain unsolved.
Journalist groups and news organizations expressed alarm at the wave of kidnappings and executions targeting their profession.
"We're enormously worried that there are next to no investigations in the murders of our colleagues," said Juan Ramon Mairena, president of the Honduran College of Journalists, a professional association.
Authorities "have told us that there are four cases under investigation, but there is no one under arrest and no prosecutions underway," Mairena said.
"They tell us that the murders were not related to their professional duties, but they offer no proof of that," said Mairena.
Human rights groups also condemned the authorities for failing to close a single case.
"The results of the investigations of these crimes is a blank page. There's no interest in investigating them," said Ramon Custodio, head of a governmental human rights commission, speaking to AFP.
Honduras has the world's highest murder rate -- 86 per 100,000 inhabitants -- a year, according to UN statistics.
Honduran Government Mobilizes to Find Kidnapped Journalist
EFE. May 9, 2012
TEGUCIGALPA – Honduran police have enlisted the help of foreign investigators who happened to be in the country for a conference in the search for a radio journalist kidnapped early Wednesday, the office of President Porfirio Lobo said in a statement.
The communique was issued hours after the president voiced solidarity with the family of Alfredo Villatoro and asked for “his prompt release and respect for his life.”
Villatoro is “a great journalist, we pray to God and we have faith that everything will work out fine,” Lobo said during a Cabinet meeting broadcast on state television.
The journalist, who works for HRN, one of Honduras’ leading radio networks, was abducted around 4:45 a.m. while on his way to work.
A police source told Efe that ex-cop Jerson Basilio Godoy, who was dismissed from the force last November, is in custody on suspicion of involvement in the kidnapping.
Villatoro was apparently intercepted by six assailants traveling in two vehicles, according to media accounts. His car was found abandoned in Tres Caminos, a residential neighborhood in Tegucigalpa.
HRN said the kidnappers have already made contact with Villatoro’s family.
Journalism has become a dangerous occupation in Honduras, where a score of media professionals have been slain in recent years.
The latest victim was Erick Alejandro Martinez, a reporter who was also spokesperson for a gay and lesbian rights organization and a member of the resistance front that arose after the June 2009 overthrow of reformist President Mel Zelaya.
The 32-year-old journalist was found dead Monday in Tegucigalpa.
Honduran reporters reacted to Villatoro’s kidnapping by demanding government action to protect journalists and vigorous efforts to find and punish Martinez’s killers. EFE
El Salvador won't extradite 1989 slaying suspects
AP. May 9, 2012
SAN SALVADOR, El Salvador -- El Salvador's government says it will not grant Spain's request to extradite 13 former military officers indicted in the 1989 slayings of six Jesuit priests and two other people.
The country's Supreme Court says nine of its 15 magistrates have ruled against the Spanish request to try a total of 15 former officers for the killings during the Central American country's 1980-1992 civil war. While most of the 15 defendants are still in El Salvador, two now live in the United States.
Five of the priests slain were Spanish and the sixth was Salvadoran.
Supreme Court magistrate Ulises de Dios Guzman did not cite the reasons for the ruling late Tuesday.
Group: Jamaica swamped by interest on debt
DAVID McFADDEN. AP. May 9, 2012
Debt-shackled Jamaica's interest payments as a percentage of gross domestic product were the highest in the world last year even after a domestic debt restructuring two years ago, according to a Washington-based think tank.
A new report on Jamaica's economy by the Center for Economic and Policy Research says the heavily-indebted Caribbean country's total interest payments were about $1.4 billion in 2011, or about 10 percent of GDP. That's about two-and-a-half times what was spent on capital programs.
On Wednesday, economist and center co-director Mark Weisbrot said that it was the highest percentage anywhere in the world, even in crisis-staggered countries in the 17-nation Eurozone.
For years, roughly half of the Jamaican government's budget has been dedicated to paying the debt, and that has forced the middle-income country to scrimp on schools, hospitals and infrastructure.
"The burden of excessively high interest payments will continue to displace public investments, which are needed to restore normal growth and bring down the persistently high levels of poverty and unemployment," the group said in its report.
Ministry of finance officials did not immediately respond to calls seeking comment about the group's report.
Jamaica's economy has sputtered for decades. The island's economy grew by 1.5 percent last year after three years of negative growth rates, but the economy still remains below its 2008 level of GDP, the group said.
Overall, Jamaica's debt was about 130 percent of gross domestic product last year.
Jamaican analysts say that much of the island's public debt was derived from bad bank loans that the government absorbed to resolve a mid-1990s crisis when dozens of banks failed amid a spree of lending.
By 2010, Jamaica's towering debt and the damaging impact of the global recession forced the government to again seek assistance from the International Monetary Fund. It helped the government carry out a domestic debt restructuring and provided $1.27 billion in a standby loan. It also unlocked funding from other global lending groups.
But the Center for Economic and Policy Research believes that the 2010 domestic debt restructuring program did little to solve the underlying problem even if it did reduce interest payments in the short term.
Jamaica is currently trying to forge a new agreement with the IMF.
Weisbrot said a key sticking point between the IMF and the Jamaica government is the cap on the public sector wage bill.
"It's clear workers have had enough of wage freezes, yet if the Jamaican government is unable to ensure more accommodating policy conditions from the IMF, the likelihood of further wage freezes or layoffs is definitely a possibility," said Weisbrot.
But he believes such measures would only further weaken the economy.
The island's last agreement with the IMF stalled last year under the previous Jamaica Labor Party-led government.
Region: Trade, Security, Economy and Integration [contents]
Mercopress. May 9, 2012
The twelve countries members of the Union of South American nations, Unasur have for the first time opened to their peers defence budgets and how much they spend on the military, helping confidence building, according to reports from the group’s Secretary General Office.
“It’s the first time we manage that all South American countries get together and put on the table what are our investments in defence and how large are our budgets”, said the Ecuadorian Defence minister Miguel Carvajal during a ceremony in Quito next to Argentina’s Arturo Puricelli.
“It is essential that we consolidate transparency conditions and mutual confidence in the region”, added the Ecuadorian minister.
Until January six countries had opened their books but since then the rest have joined, said Alfredo Forti, head of the Unasur Strategic Studies Centre which since last year operates from Buenos Aires and has accumulated all the information.
A report on the military expenditure situation and details is expected to be officially announced on Thursday. The event will bring together Carbajal. Argentina’s Puricelli, the deputy defence ministers from Colombia and Brazil, and from Venezuela is not certain who will be sent.
The final and full report is to be delivered in a meeting in Asuncion, next June according to Unasur Secretariat.
The final report represents three years of work by a group with delegates from Chile, Ecuador and Peru which managed to agree on a common methodology to measure military expenditure. The info refers to the 2006/2010 period and ministers must decide how much is made public.
At a Wednesday ceremony in Quito Puricelli underlined the significance of the report. “We are working for an integrated defence, for cooperation in defence for the whole of our South America”.
Puricelli was in Ecuador for the delivery of a drinking water processing plant for the Ecuadorian forces that will set it up in the border area with Colombia to supply water to nearby villages.
The two ministers also considered a project to build the drinking water processing plants in Ecuador with Argentine licence, an effort that should help deliver water to many small distant villages in the jungle and mountainous terrain.
Ecuador during the ceremony also revealed that China had donated a mobile hospital for military and civilian use particularly during natural catastrophes.
Twitter politicking causes stir in Latin America
Mariano Castillo. CNN. May 9, 2012
(CNN) -- Twitter has been adopted by politicians and supporters alike, but recent controversies in Argentina and Mexico question whether some groups have crossed a line.
The most recent dust-up happened in Mexico, where a video was released that revealed the tactics of one group supporting presidential candidate Enrique Peña Nieto, the current front-runner.
The video captures a roomful of activists who support Peña Nieto and the instructions that a speaker is giving the laptop-equipped crowd.
"It's time to start working," the speaker says, instructing those gathered to begin tweeting what they are instructed to tweet and at the same time so as to create favorable popular, or "trending" topics about a presidential debate.
There were some negative "hashtags," or keywords, out on Twitter "that we have to turn around immediately," the speaker says.
This level of organization to sway social media topics has been dubbed "Twittergate" in Mexico.
In Argentina, an investigation on the program "Journalism for Everyone" revealed at least 400 apparently fake Twitter accounts it said comprised a network designed to tilt public opinion in favor of the policies of President Cristina Fernandez de Kirchner.
The show's host, Jorge Lanata, showed how several Twitter accounts purportedly owned by rank-and-file supporters of Fernandez, tweeted and retweeted about the same issue at the same time.
"They all write the same things, as if they were robots," Lanata said.
It was a system designed to create trending topics and give the impression that there was broad support for the policies of the current government, he said.
When people think about politicians interacting with Twitter, the general perception is of them reaching out directly to the public, said Anthony Rotolo, a professor at the School of Information Studies at Syracuse University. But as politicians and their followers become more sophisticated social media users, the tactics can change, he said.
"We're seeing a lot of ideas on how to use the data beyond the two-way interaction," Rotolo said.
There's a sense among social media users that trending topics on Twitter have credibility of being what people are really talking about, and influencing them can add heft to a campaign, he said.
When the traditional media see that certain topics are trending, "they are more likely to assume there is a story there, or something to pay attention to," he said.
In Argentina, the network of alleged false Twitter accounts dates back one year, and creates 6,000 messages a month, or about 200 a day, all with a political bent.
When active, the system injects six to 10 messages on Twitter per second, the investigation found.
The journalists don't know who is behind the scheme, but they argue it is an attempt to sway public opinion at a time of controversial government decisions.
The investigation started with a tip about four suspicious pro-Fernandez followers, which led to the discovery of hundreds of puppet accounts, said Julio Ernesto Lopez, a technology expert and columnist who worked on the task.
Using Google searches the journalists found a number of patterns. First, many of the photos on the Twitter accounts of the Fernandez supporters were actually stolen from other places on the Internet.
One account, for example, had a profile photo of a young, smiling man named "Juna Cruz Geler," who describes himself as a student of politics and a dancer. The photo actually belongs to Mario Alvarez, a Spanish singer who won a reality show and had no idea his image was being used for politicking an ocean away.
Lanata interviewed Alvarez and several others who confirmed that their photos were being used without their knowledge.
By Wednesday, the Cruz Geler account had replaced the photo of Alvarez.
A spokeswoman for the president's office declined to comment on the report.
Opposition politicians in Argentina are known to have used Twitter tactics to influence the agenda, but nothing of this scale or organization has been seen before, Lopez said.
"The problem is that in Latin America, (Twitter) is ideal for governments of this era," he said.
Twitter allows for declarations or opinions, without the space for the reasoning or the arguments behind it.
"We talk like animals on Twitter," he concluded.
The Mexican group caught on the "Twittergate" video is called Ectivismo. After the video was leaked, they confirmed that it was their group, but said that the Twitter campaign is just one of a number of activities they conduct in support of Peña Nieto.
In both cases, the beneficiaries of the Twitter campaign might see a boost, but as the public becomes more savvy to the new style of propaganda, the effect will lessen, Rotolo said.
Once readers learn that visibility does not equal popularity, the benefits of such campaigns are diminished.
There is also the risk of backlash from the internet community, Rotolo said.
As the controversies in Argentina and Mexico may indicate, gaming the system to one's advantage may viewed as underhanded, and the backlash from Twitter users could cause more harm than good.