Latin America News Round-up
July 19, 2012
Jamaica Eyes IMF Loan Deal Later This Year
For the latest news and developments on Haiti, please see CEPR's blog, "Haiti: Relief and Reconstruction Watch."
For archives of past Round-ups, please click here.
Brazil and Southern Cone
Latin America’s climate conundrum
US pushed to reform cotton subsidies in farm bill as Brazil watches. The Guardian
What slowdown? Brazil consumer confidence rises again. Reuters
Brazil youth homicides up 346%. AP
YPF Dividends Cut as Argentina Seeks Oil Output Boost. Bloomberg
Chile: 2 charged for torturing Bachelet's father. AP
Chile announces measures to fight child sex abuse. AP
Post-Coup Paraguay: An Interview with Fernando Lugo. Upside Down World
Northern Andean Region
Venezuela: Chevron to invest $2 billion in field. AP
Human Rights Watch attacks 'abuse of power' in Venezuela. BBC
Rusoro seeks compensation for Venezuela gold mining takeover. Reuters
Clashes in Colombia over military post row. Al Jazeera
Jailed ex-Colombian intelligence chief faces new wiretapping charges. Colombia Reports
Western Andean Region
Ecuador central bank lowers 2012 growth target to 4.8 pct. Reuters
Ecuador to Buy Iranian Fuel in Defiance of Western Sanctions. Bloomberg
Ecuador Finance Minister: Government Has Covered 2012 Financing Needs. Dow Jones
Ecuador: Two Banks Failed to Meet Deadline for Divesting Assets. Dow Jones
Peru's Humala sounds out replacements for prime minister. Reuters
Bolivia to seek new partner after Jindal quits. Reuters
Bolivia agrees to sell more gas to Argentina under an ‘interruptible’ contract. Mercopress
Mexico, Central America and Caribbean
Mexico presidential runner-up alleges money laundering in election. The Guardian
Mexico admits to 67 journalist murders since 2006. The Guardian
In Mexico state, violence against women has surged. Los Angeles Times
Mexico's #Iam132 student protesters weigh next moves. BBC
Lawmakers threaten to cut aid to El Salvador over Supreme Court showdown. The Hill
Guatemala to Seek Mining Tax Rise Next Month, Minister Says. Bloomberg
Belize studies move to decriminalize marijuana possession. Reuters
Jamaica eyes IMF loan deal later this year. Reuters
Region: Trade, Security, Economy and Integration
Latin America’s climate conundrum. GlobalPost
Brazil and Southern Cone [contents]
US pushed to reform cotton subsidies in farm bill as Brazil watches
Paige McClanahan. The Guardian. July 19, 2012
US lawmakers have been busy this summer shaping the latest version of the farm bill, the far-reaching legislation that governs how the US treats its farmers and feeds its poor people, among many other things.
Discussions and hearings have been going on for weeks, but there is one topic that few people on Capitol Hill seem to be paying attention to: how Congress's failure to reform US cotton subsidies may hurt millions of farmers in other countries, along with Hollywood, American pharmaceutical companies and the US music industry.
What is the link? It all boils down to one word: trade.
Ten years ago, Brazil challenged the US at the World Trade Organisation (WTO), claiming that heavily subsidised US cotton had flooded the global market, dragging down prices and making it much harder for Brazil's cotton farmers to earn a profit on their exports. The generous American subsidies violated the commitments that the US made when it joined the WTO, the Brazilians argued. The excessive payments were both unfair and illegal, and they wanted compensation.
The WTO agreed. In 2004, the dispute settlement body, the "judicial branch" of the WTO, ruled that the US had to reform its cotton subsidies or face "retaliation" from Brazil. A subsequent panel ruled that, given the most recent cotton trade statistics, Brazil had the right to impose punishing trade measures worth more than $800m (£500m) against the US.
Usually, when countries are given permission to retaliate, their "countermeasures" have to come in the form of higher-than-usual tariffs on imports from the offending country. That was true in this case, but the WTO went a step further: the panel granted Brazil the right to "cross-retaliate" by lifting patent protections on a wide range of American products. That meant patented drugs could be sold as generics, Hollywood films could be legally pirated and American music could be given away for free.
Cross-retaliation is a powerful tool because it allows the plaintiff country to target its attacks on the most sensitive sectors of the offending country's economy. The WTO has allowed cross-retaliation only twice in its history, but no country has ever actually used it. Brazil may well become the first.
Cross-retaliation "will impact much more than goods – it could set an important precedent and harm the US in other cases," Haroldo Cunha, the head of the Brazilian cotton growers' association Abrapa, told Reuters in 2010.
For now, though, Brazil's retaliation is being held off by a "framework agreement" that was negotiated by American and Brazilian officials in the spring of 2010. Among other things, the US agreed to tweak one of its most egregious subsidy programmes and donate nearly $150m every year to support Brazilian cotton farmers. Both sides agreed that the framework deal would hold until this year, when the next farm bill would be negotiated. Only then, the US officials said, would they have the chance to make far-reaching reforms to American cotton subsidies.
Fast-forward two years, and the 2012 farm bill is quickly taking shape. But will the new law do anything to bring US cotton subsidies in line with WTO rules?
If you ask Brazil, the answer is a resounding no. The new programmes under discussion "are not enough to satisfy Brazil's concerns", said Roberto Azevêdo, Brazil's ambassador to the WTO. Some of the proposed policies "would leave Brazilian farmers worse off than they are now", he says.
Both the House of Representatives and Senate versions of the bill include the stacked income protection programme – known as Stax – which was designed by the National Cotton Council, a lobby group for cotton farmers. Stax is effectively a crop insurance policy for cotton growers; it guarantees that farmers' incomes will not fall below the revenues expected in their regions. That is precisely what Brazil does not like.
"In our view, no farm programme can be WTO-compliant and cover 'shallow losses' – thereby insulating farmers from market forces – to the extent foreseen in the [Stax programme]," Azevêdo said in a letter to Congress in January.
US congressman Ron Kind, a Democrat from Wisconsin, has long pushed for more systemic changes to American cotton subsidies, but to little avail. "The excuse for the last three years … was: 'Wait for the next farm bill, and we'll take care of it then'," Kind said. "Well, that next farm bill is today, and I don't see it getting taken care of."
While the US dallies, cotton farmers overseas are still struggling to compete with artificially cheap American exports. That is happening not only in Brazil, but also in poorer cotton-producing countries such as Burkina Faso, Mali, Benin and Chad. "Those are the big losers," said Azevêdo. "Their treasuries cannot compete with the US funds."
So what will happen if the 2012 farm bill is just like the previous one? Officials in Brasilia are weighing up whether to use their right to cross-retaliate. If they do – and they pull it off – then Brazil could set an important precedent for other countries that are looking to get the attention of the world's biggest national economy.
"[The Americans] seem to only engage when intellectual property comes into play," Azevêdo said.
What slowdown? Brazil consumer confidence rises again
Reuters. Brian Winter. July 17, 2012
SAO PAULO, July 17 (Reuters) - Brazil's economy has barely grown since the middle of last year. But somebody apparently forgot to tell the Brazilians.
A measure of consumer confidence rose in June to its second-highest level in more than a year, reflecting widespread optimism over the Brazilian economy and individuals' own job prospects going forward.
The study published by the government-linked IPEA economic analysis firm on Tuesday laid bare one of the most curious aspects of Brazil's economy this year: No matter how much politicians and executives gripe about stagnant growth, most people on the street are still in a surprisingly cheery mood.
The persistent optimism in Brazil's consumer-driven economy suggests a healthy foundation for retail sales and other purchases to rebound in coming months in response to record-low interest rates. That, in turn, means economic growth could still surprise on the upside in 2012 and 2013, despite repeated downward revisions by economists who now expect an expansion of less than 2 percent this year.
The IPEA's "Index For Families' Expectations," based on polling of 3,810 households throughout Brazil, reached 68.5 in June. That was up from 67 in May, and the second-highest level going back to at least September 2010. The IPEA says a score anywhere between 60 and 80 points reflects "optimism."
When pressed to explain the buoyant national mood, many analysts cite the unemployment rate, which has remained steady at record lows of around 6 percent despite Brazil's struggles with weak manufacturing activity, low investment rates and some financial contagion from the euro zone crisis.
"In general, there's a good expectation on behalf of families, who feel secure in their jobs and believe they have potential to grow in the future," IPEA chief Vanessa Petrelli Correa told reporters in Brasilia.
Some economists believe it is just a matter of time before the darker reality catches up with sentiment. Others worry that the apparent mismatch between euphoric consumers and poor economic fundamentals could cause deeper problems going forward.
"In a number of countries we have seen jobless recoveries ... In Brazil we are presently seeing a job-creating slowdown," wrote Alberto Ramos of Goldman Sachs in late June. "Not good news for productivity growth and potential GDP."
A RESIDUAL GLOW FROM THE BOOM
There is another, less tangible explanation for the optimism: a kind of residual glow from the country's boom of recent years that is proving difficult to shake.
Put another way, many Brazilians are aware of the recent slowdown, and may have even reduced their short-term spending habits as a result. But they remain very happy with the overall trajectory of an economy that has pulled more than 30 million people out of poverty in the past decade and allowed many to buy TVs, houses and trips to Disney World for the first time.
That view was heard in a handful of random interviews in an industrial area of Sao Paulo on Tuesday.
Mateus Pereira, 27, said he wants to buy a new motorcycle in coming months, even if the timing doesn't feel right for the moment. "I'm optimistic I'll do it soon," he said, adding that his family has "more things" than they did a few years ago.
President Dilma Rousseff and members of her economic team have repeatedly cited resilient consumer sentiment as a reason why the economy will bounce back in the second half of 2012. Interest rates have fallen 4.5 percentage points since last August and now stand at a record-low 8 percent, meaning Brazilians such as Pereira who have been delaying purchases might soon pull the trigger.
That expectation for a resumption of faster growth was reinforced on Monday by the International Monetary Fund, which sees growth of 2.5 percent in 2012 but 4.6 percent in 2013.
The IPEA poll did include a few hints of the recent slowdown. Expectations for the economy in the next 12 months declined a bit compared to May, although 65 percent of respondents still expected an improvement.
Three-quarters of respondents also said their financial situation had improved compared to last year - also down a bit.
There were considerable variations by social class and by region. Optimism for the coming year generally increased in line with respondents' income and education level, the IPEA data showed. Brazil's so-called center-west region, which has benefited from an agricultural boom in recent years, was by far the most optimistic, with 87 percent of respondents expecting the economy to improve in the next five years.
A separate study published last month by a Brazilian think-tank showed slightly different results. The FGV study showed consumer confidence fell in June for a second straight month, although the index was coming off an all-time high in April and remained well above the historical average.
The IPEA study had a margin of error of five percentage points.
Brazil youth homicides up 346%
AP. July 18, 2012
Rio de Janeiro - The homicide rate for Brazilian young people under age 19 shot up 346% over the past three decades, according to research published on Wednesday by the Latin American School of Social Sciences.
During that period, youths became a far higher percentage of Brazil's murder victims — rising from 11% of the total in 1980 to 43% in 2010, the report said. The homicide rate for young people rose from 3.1 per 100 000 people younger than 19 years old to 13.8 per 100 000.
This means deadly violence against the most vulnerable members of Brazilian society has surpassed the 10 deaths per 100 000 that mark the accepted threshold of an epidemic, said Julio Jacobo Waiselfisz, a researcher also affiliated with the Brazilian Centre for Latin American Studies.
A country's homicide rate conveys much more than just the number of people who have died, Waiselfisz said.
"Homicide is not a casual act. There is a culture of violence that is leading to the solving of conflicts by exterminating the bothersome element," he said.
Waiselfisz said part of the increase in youth homicides might be due to the improvement in Brazil's record keeping in recent decades.
But, he added, it is undeniable Brazil is experiencing an epidemic of violence against young people. Unlike a disease epidemic, however, the violence is not contained or short-lived because it has become part of society, built into relationships, he said.
"There is a discourse that blames the victims, that says these kids are dying because they are doing drugs, or they got into trouble," Waiselfisz said. "There is a process of institutional omission when faced with these facts, which are taken as natural."
The numbers in Waiselfisz's study rank Brazil as the fourth-worst among 91 countries when it comes to youth homicides, behind El Salvador, Venezuela and Trinidad and Tobago.
Perla Ribeiro, head of the nonprofit Association of Centres for the Defence of Children and Adolescents, called the study shocking, and said she hoped that Brazilians will face up to this reality and bring some change.
"Society needs to reflect on these numbers. This isn't something often discussed, this increase in homicides of adolescents," Ribeiro said. "All levels of government — municipal, state and federal — need to face up to this as a real public policy problem."
Antonio Carlos Costa, a pastor who has worked for years in some of Rio de Janeiro's most violent communities, said the homicide numbers aren't just statistics, but names as well.
"There is Fabiana, who died in Morro dos Macacos, inside her house; there was the case of Juan," he said, remembering an 11-year-old boy shot by police near his home and dumped in a river. "There is Joao Roberto, who died in Tijuca, and the boy Ramon from Costa Barros ...," he added, then his voice trailed off.
The cases of children who met violent deaths are too many to name, Costa said.
The majority of young victims suffer both at the hands of police and of drug traffickers and other criminal gangs, a part of Brazil that the rest of the population easily forgets — "the expendable Brazil", he said.
"One thing I can tell you: This survey doesn't fully reflect reality. Reality is far more dramatic," Costa said.
He noted the numbers used in the study came from the Health Ministry's database, and thus reflect deaths officially recorded, not the untold number of poor or marginalised youths whose disappearance or death is simply never recorded.
"Teenagers who are executed, dumped in rivers, those will never be counted," Costa said.
YPF Dividends Cut as Argentina Seeks Oil Output Boost
Pablo Gonzalez. Bloomberg. July 17, 2012
YPF SA (YPFD) decreased dividend payments and raised investment as the company seized by Argentina’s government in April seeks to bolster oil production.
The South American country’s biggest oil producer allocated dividend payments of $66 million, or 5.7 percent of last year’s profit, according to a regulatory filing distributed after a shareholder meeting yesterday.
Argentina seized 51 percent of YPF from Spain’s Repsol SA as President Cristina Fernandez de Kirchner’s government seeks to halt declining oil output and stem fuel imports that doubled to $9.4 billion last year. The government opposed YPF dividends that exceeded 80 percent of profits.
Shareholders also expressed their opposition to “the previous administration characterized by falling oil and gas reserves, production and exploration,” the company said in the statement.
Chief Executive Officer Miguel Galuccio allocated $1.3 billion of earnings toward total planned investment in 2012 of $3.5 billion. Investment last year was $3.1 billion, according to a filing sent to the stock exchange in February.
YPF shares, unchanged at 85 pesos yesterday, have tumbled 49 percent in Buenos Aires trading this year.
To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at email@example.com
To contact the editor responsible for this story: James Attwood at firstname.lastname@example.org
Chile: 2 charged for torturing Bachelet's father
LUIS ANDRES HENAO. AP. July 17, 2012
SANTIAGO, Chile -- Two Chilean military officers were charged Tuesday with torturing a former president's father who died in their custody.
Gen. Alberto Bachelet, whose daughter Michelle became Chile's first woman president, died in prison in 1974 after Gen. Augusto Pinochet's military convicted him of being a traitor.
Santiago Judge Mario Carroza said last month that a forensic study found that the elder Bachelet probably died of heart problems caused by torture after he was arrested for opposing the 1973 military coup that overthrew Socialist President Salvador Allende.
Carroza on Tuesday charged retired colonels Ramon Caceres Jorquera and Edgar Benjamin Cevallos Jones with torture that led to the 51-year-old's death. Pinochet's regime also arrested the general's wife, Angela Jeria, and Michelle Bachelet in 1974. They were tortured in a secret prison for two weeks before leaving Chile.
"It was a special moment in the history of Chile and these people felt they were in a war," Jeria told reporters at the hall of a Santiago court after the judge's decision was announced. "Now this country can wait for justice to be served."
Isidro Solis, a lawyer for the Bachelet family, said the general mentioned Caceres Jorquera and Cevallos Jones "innumerable times" during his interrogation days at the Chilean War Academy. Cevallos Jones' family has asked that he is placed under arrest at an air force hospital because the 82-year-old suffers from Alzheimer's disease.
Gen. Bachelet had told his family of being tortured by the same young air force members he had trained.
"They broke me from the inside," the general wrote in a letter from prison. "At one point they had morally torn me apart. I never thought to hate anyone, I always thought that the human being is the most marvelous of this creation and should be respected as such, but I found myself confronted with air force comrades whom I've known for 20 years, my own students, who treated me like a delinquent or a dog."
Carroza has also investigated events surrounding the death of Allende and hundreds of his allies who were slain or disappeared during Pinochet's dictatorship, which official estimates say killed 3,095 people.
In 1972, as other high-ranking military officers were conspiring with the U.S. Central Intelligence Agency to lay the groundwork for the coup, Allende put Bachelet in charge of Chile's commerce agency, where he was responsible for overseeing food sales nationwide. Many products were in short supply partly because Allende's right-wing opponents held goods back to create a sense of chaos.
Bachelet remained loyal to Allende to the end, refusing to endorse the Sept. 11, 1973 bloody coup even after Allende committed suicide while taking his last stand in the bombed-out presidential palace. He was arrested the same day, convicted that December and survived in prison until March 12, 1974.
His daughter returned from exile in 1979 and became Chile's first female president in 2006. She has run the U.N. women's agency since 2010, when she left the presidency and is expected to run in next year's presidential race.
Associated Press writer Federico Quilodran contributed to this report.
Chile announces measures to fight child sex abuse
LUIS ANDRES HENAO. AP. July 19, 2012
SANTIAGO, Chile -- Chile's president announced measures Wednesday to combat child abuse, responding to a popular outcry over an increase in reports of such crimes in one of Latin America's most socially conservative countries.
The government already banned convicted pedophiles from working near children last month under a new law that also requires those convicted of sexually abusing minors or of child pornography to be registered in a database.
President Sebastian Pinera said Wednesday the database will be fully working starting in August. He also said Chile will toughen penalties on convicted pedophiles, increase the forensic institute budget by $1.6 million and create a children's ombudsman to protect their rights.
"With sadness and indignation we've heard serious reports in the past weeks of sex abuse by adults who had the responsibility to educate them, to protect them but who instead threatened against that which is most sacred in our children" Pinera said at a news conference.
Several teachers have recently been accused of sexually molesting children at day care centers and schools in affluent Santiago neighborhoods. Reports of sexual abuse of children under the age of 14 rose by 22 percent in the first half of the year, according to official estimates.
Pinera said reports of child sex abuse increased 20 percent last year to 21,176. "That means that almost 60 children in our country were abused each day, one every 20 minutes," he said.
To fight the trend, Pinera also announced stiffer punishments for those involved with distributing child pornography and urged lawmakers to review and fast-track about 100 bills stuck in Congress that could protect children against sexual abuse.
Under new measures, young sex abuse victims will need only to provide a video-recorded statement once so they can avoid the stress of repeatedly having to retell their painful episodes.
The government also plans to split the Sename National Office for Minors into two bodies, one that will focus on protecting vulnerable children while the other handles rehabilitation of teenagers who run into trouble with the law.
"Chilean authorities, react against dramatic situations. It's reactive not preventive, so I'm not surprised that the government has reacted to this pedophilia boom," said Giorgio Agostini, a forensic psychologist who has worked on dozens of child sex abuse cases.
"We didn't expect this announcement but it's very positive," Agostini said, adding that the next step will be to get more funds to treat children who have been sexually abused.
Chile remains strongly conservative in social matters and the Roman Catholic Church retains a firm influence over society.
But the church's influence has been weakened since 2010, when four men alleged that they were abused by one of Chile's most revered priests. They said the abuse by the Rev. Fernando Karadima began about 20 years ago when they were between 14 and 17 years old, in his residence at the Sacred Heart of Jesus church in a rich neighborhood of Santiago.
The Vatican sanctioned Karadima by ordering him to a life of "penitence and prayer." A Chilean judge later dismissed a criminal case because the statute of limitations had expired, but she determined the abuse allegations were truthful.
In the United States, Jerry Sandusky, the former Penn State University assistant football coach, was convicted last month of sexually abusing 10 boys over a 15-year period. He awaits sentencing.
"The announcement of these high-profile cases - Sandusky in the U.S. and Karadima in Chile - have also helped Chileans to become more sensitive" to the problem of child sex abuse, Agostini said. "They caused a huge shock and raised concern among lawmakers to act and among people to denounce the abuse."
Pinera's popularity has been dragged down over the past year by large social protests demanding improvements in education, protection of the environment and a better distribution of wealth.
"Before, these marches were just political, but now there are all types: Some demand bathrooms in the subway, others the protection of children from predators," said Carlos Livacic Rojas, a sociologist at Santiago's Universidad San Sebastian.
"Today people are saying: Yes, we're connected and the economy is growing but there's abuse. In the past it would have stayed as pent up anger. Today there is real demand. It's a huge social change."
Luis Andres Henao on Twitter: http//twitter.com/luisandreshenao
Post-Coup Paraguay: An Interview with Fernando Lugo
Johannes Wilm. Upside Down World. July 19, 2012
The left-leaning bishop Fernando Lugo was elected in 2008 as President of Paraguay. With his election, 61 years of rule by the conservative Colorado Party ended. Similar to what has happened in several other Latin American countries in recent years, the new government set up social programs and longstanding relations with the United States were slowly replaced by alliances with neighboring countries.
During his entire term, Lugo had a large majority in Parliament against him, and his Vice President, who was of a different political party, openly revolted against him in recent years. On June 21-22, Lugo was removed from office through impeachment on the part of parliament through a "political trial". The impeachment of the President through a "political trial" is a special structure provided for by the Paraguayan Constitution. It allows for one chamber of parliament to start an impeachment process against the President, and for the second chamber to pass judgement on whether they find the president guilty of what the first chamber accused him of. Lugo's lawyer Adolfo Ferreiro who defended Lugo in this impeachment trial explains how it could come to an impeachment without the president breaking any law: "Those behind this try to make believe they can start such a political trial without reason, just because they don't like the president. They say that the reason for the trial is not important, as long as they have the necessary votes to win such a trial. They now try to confuse this with a 'vote of non-confidence' as it exists in some parliamentary systems. This type of vote exists in some European countries with a parliamentary system. There the government is elected by parliament and can be removed by parliament again through such a vote. Here, on the other hand, we have a presidential system, so the president is elected directly by the people and there is no direct relationship between who is president and who has a majority in parliament."
Ferreiro was known in 2008 to publicly oppose Lugo's candidacy and he continues to be a critic of close allies, such as the government of Venezuela. His defense of Lugo in the defense procedures is therefore generally considered as being based on an objective reading of the Paraguayan Constitution.
Lugo himself sees the entire thing as a coup d'etat: "You can call this a coup d'etat 2.0, a parliamentary coup or an express coup -- many names for the same thing, a coup that is different than what we saw in the 1970s: there are no tanks or dead in the streets, and they are very careful to try to give the entire thing some kind of legal legitimacy. However, none of that changes the fact that there has been a breach of democratic principles here, and that consequently, what has happened here has been a coup d'etat."
Re-politicization of government institutions
There have been many discussions on what concrete changes the coup-government will enact. One of the most often mentioned points is the issue of employment in the public sector. Lugo's secretary of public employment until March this year was Lilian Soto, and she is quite proud of the changes they did in the hiring process: "Under the Colorado party, what got you a job was that you had political connections and family connections. We changed that to a formal process of checking education and experience of possible candidates." Soto quit her job to run as presidential candidate in the 2013 elections for a feminist party and therefore felt she could not ethically continue to be part of Lugo's government.
Lugo explains that the coup government now is trying to undo this -- by deliberately dismissing people en masse based on their political ideology. "Until now, this has mainly happened in the ministries and government entities that deal with agriculture and pesticide control. In these days the labor unions of the workers in these sectors are starting to get active. That will be the next big fight."
Lugo sees some similarities with the coup in Honduras in 2009, in which President Mel Zelaya was removed: "What is true for both cases is that a violation has taken place of democratic principles, and that the term of a democratically elected president was cut short." But he also sees major differences: "In Honduras, we saw a coup d'etat that was closer to the original of the 1970s, in that the military had a major role. Also, there is a difference in the geo-political circumstances. In South America we are currently experiencing some important advances in regional integration, such as the trade agreement Mercosur and most recently the Community of Latin American and Caribbean States (CELAC). That was not so important when the coup happened in Honduras. I think these organizations represent an alternative to the Organization of American States (OAS), which is rapidly in decline. I will not deny that the OAS has achieved a lot in the last fifty years, but with the current polarization between United States, Canada and Mexico on one end and South America on the other, we have tried to find regional alternatives. The coup d'etat now attempts to attack the regional integration efforts."
None of the three countries neighboring Paraguay, Bolivia, Brazil and Argentina have recognized the new government, nor accepted the process which brought them to power. On the contrary, the governments of these countries are among the strongest critics of what has happened. From the supporters of the coup, a common solution that is given is for Paraguay to instead work with other countries. Lugo believes this is quite unlikely to happen: "Geographically and politically, it is possible for some countries, such as Chile, Peru and Colombia to sign direct free trade agreements with the United States. But in the case of Paraguay, that is very difficult. We do not have our own coastline. And the river is under shared ownership. In order to use them as transport routes for cargo ships, we depend on agreements with Brazil and Argentina. In addition, during the neoliberal decade of the 1990s, Paraguay lost control of its airline. All this makes it difficult for Paraguay to cooperate with other countries without working together with its neighbors.”
National sovereignty vs. multinationals
Lugo believes that one could see the coup as a battle between the state and multinational companies: "If we look at some of the first things the coup makers have done, it is quite clear where this is going: First they opened the doors for genetically modified food, second they decided that soya-production should not be taxed, third the multinational Rio Tinto Alcan was allowed to establish itself in Paraguay. These are three important decisions that we had been discussing in a two year participative process in which we tried to study exactly what the consequences would be. Now all this was rushed through at an incredible pace. This shows just how important the question of national sovereignty in the process is."
The contract with Rio Tinto Alcan is among the most criticized by Paraguayans opposed to the coup. The signing parties agree for it to run for 30 years, during which the company will get a major share of electricity produced by a major water-power plant that Paraguay co-owns for a preferable price. Lugo however believes that such deals signed by the current government will not be honored in the future, once a democratic regime has been reestablished: "I strongly doubt that the Paraguayan people will be respecting such a license that gives a single company the right to the electricity for a price as low as they have been talking about. This whole deal is very questionable."
President of the people and the international community
Although Lugo has no control over the state apparatus, he still sees himself as president: "The people see me as the President. The coup leader Franco has perhaps formal control over the army and police, but that does not mean that he can control the population. And basically we believe that the people are sovereign to decide who should be president. I also doubt that Franco really governs the country. Besides the population, also the international community still sees me as the legitimate president of Paraguay. And in our age that is extremely important, it is almost the sole determining factor. "
Franco had indicated shortly after the coup, that he would ask Lugo for help in asking other countries not to sanction Paraguay. Lugo does not think anything of that plan: "I think most people will understand that we will not cooperate with the organizers of the coup."
To individuals abroad who want to help Lugo democracy in Paraguay, Lugo recommends: "If one wants to support the democratic processes here, then the best you can do is to start following what is going on here. If the media reports on Paraguay, then that helps our democracy the most."
The next presidential elections were already scheduled before the coup took place. The OAS has focused on finding out whether conditions will exist for free elections to take place. Lugo believes this is not enough: "It is a problem only to look at the future like that, and never to see the here and now. It means that one forgets what happens now and that things are not currently OK -- that those formally in charge right now did not get there because the people wanted them to be there. That is why we will continue to focus on the current situation!"
Johannes Wilm is a PhD student at Goldsmiths College, University of London in social anthropology. His blog in english is http://www.johanneswilm.org in spanish http://johannes.si
Northern Andean Region [contents]
Venezuela: Chevron to invest $2 billion in field
AP. July 19, 2012
CARACAS, Venezuela -- Venezuela's state oil company says U.S. oil giant Chevron Corp. plans to invest $2 billion to boost petroleum production at a Venezuelan oil field.
The state-run PDVSA says Chevron is seeking to increase output from the Boscan oil field in the western state of Zulia.
San Ramon, California-based Chevron is a minority shareholder in Petroboscan, a joint venture with PDVSA that produces 115,000 barrels of oil a day.
PDVSA announced Chevron's investment plan Wednesday.
Venezuela is Latin America's largest oil producer and a major supplier to the United States.
Human Rights Watch attacks 'abuse of power' in Venezuela
BBC. July 17, 2012
[Editor’s Note: The last Human Rights Watch report on Venezuela, released in 2008 prompted a response by 118 Latin America experts, who sent an open letter to HRW saying that the report “does not meet even the most minimal standards of scholarship, impartiality, accuracy, or credibility.” The open letter prompted a back and forth between the academics and HRW, which is available here, here, here and here.]
The abuse of power by the Venezuelan government under President Hugo Chavez has increased over the past four years, according to Human Rights Watch.
Legislation limiting free speech and the removal of institutional safeguards give the government free rein to censor and intimidate critics, the group says.
In 2008, Venezuela expelled HRW representatives, accusing them of interfering in the country's affairs.
This latest report comes in the midst of Venezuela's election campaign.
Contacted by the BBC, the Venezuelan government did not have an immediate response, with an official in the information ministry saying it had not seen the report.
In 2008, HRW detailed its view of how President Chavez's government had "squandered a historic opportunity to shore up the country's democratic institutions and strengthen the protection of human rights in Venezuela".
Its latest report, entitled Tightening the Grip: Concentration and Abuse of Power in Chavez's Venezuela, argues that the human rights situation in the country has become even more precarious.
It focuses on the judiciary, the media and human rights defenders, drawing comparisons with the situation in the country four years ago.
"The accumulation of power in the executive, the removal of institutional safeguards and the erosion of rights guarantees have given the Chavez government free rein to intimidate, censor and prosecute Venezuelans who criticise the president or thwart his political agenda," the report says.
Political control continues over the judiciary, with the Supreme Court packed with the president's supporters, according to HRW.
It cites the case of Judge Maria Lourdes Afiuni as the most disturbing example of the lack of judicial independence.
In 2009, Judge Afiuni ordered the release of a Venezuelan businessman and government critic accused of breaking currency controls. He had been held for nearly three years without trial, exceeding legal limits.
She was arrested shortly after President Chavez publicly criticised her ruling and demanded she be jailed for at least 30 years.
Judge Afiuni has been under house arrest since 2011.
The report acknowledges that sharp criticism of the government is common in newspapers and on other broadcast outlets such as opposition TV channel Globovision.
But it argues that the fear of government reprisals has made self-censorship a serious problem.
The government frequently accuses private media companies of using their power to try to undermine the democratic authorities.
In October, Venezuelans go to the polls, with Mr Chavez seeking a third term as president.
His main challenger is Henrique Capriles.
Rusoro seeks compensation for Venezuela gold mining takeover
Diego Ore and Daniel Wallis. Reuters. July 18, 2012
CARACAS, July 18 (Reuters) - Russian miner Rusoro became the latest company to seek compensation from Venezuela through arbitration at a World Bank tribunal, saying President Hugo Chavez's takeover of the gold industry last year meant it had lost all its assets.
Chavez's government already faces about 20 cases, including multibillion-dollar claims by U.S. oil companies Exxon Mobil Corp and ConocoPhillips, before the World Bank's International Center for Settlement of Investment Disputes, or ICSID.
The socialist leader, who is seeking re-election this year, said in January that Venezuela was pulling out of the tribunal. Analysts, however, say ICSID's 140 other member countries will still view its judgments as enforceable, meaning claimants could obtain court orders to seize Venezuelan assets.
Chavez set his sights on the gold industry after quarreling with Rusoro and other foreign companies, which had complained that limits on exports were hurting their efforts to secure funds and develop projects in the South American country.
A new law came in force in September aimed at "overturning the serious impact of the capitalist mining model" by banning all exports and giving the Venezuelan state at least 55 percent of joint ventures.
It also fixed the royalty rate for most projects at 13 percent, which foreign miners said would scare away any investors who were still deciding whether to work in Venezuela.
Toronto-listed Rusoro, which is owned by Russia's Agapov family, was the biggest gold miner operating in the country and had enjoyed good relations with Chavez's government. It produced nearly 150,000 ounces in Venezuela in 2010, and about 80,000 ounces last year before the new rules took effect.
Rusoro's president and chief executive officer, Andre Agapov, told Reuters on Wednesday that the company had spent months seeking a friendly agreement with Venezuelan authorities.
"We tried to find an amicable solution but we never heard anything from the government, so then we decided to file the arbitration," he said in a telephone interview from Moscow.
"We lost it all. We don't understand the situation now. We have no operations in Venezuela."
Rusoro has not said how much it wants in compensation. Last year, a senior executive in Caracas said the company had assets in Venezuela worth more than $1 billion.
VENEZUELA QUITS TRIBUNAL
Rusoro had said last year that if "fair compensation" could be agreed upon, it would be happy to remain in Venezuela as a 45 percent partner with the government.
Agapov declined to give more details on Wednesday about how much money Rusoro was seeking. "It is a long process. It's up to independent experts to make the estimate," he said.
"We spent a lot of money in the last 10 years. And, of course, the value of the company could be very high because the price of gold went up so high in the last few years."
Chavez's administration says arbitration panels violate its sovereignty, and on Jan. 25 it said Venezuela was withdrawing from ICSID because it was incompatible with its laws.
Countries can "denounce" the tribunal via a written notice, but the move only comes into effect after six months.
Agapov said that had a bearing on the timing of his company's decision. "They're leaving (the tribunal) at the end of July. That's why we filed before they left," he said.
Rusoro had been operating Venezuela's open pit Choco 10 mine and the high-grade underground Isidora mine, which was a 50/50 joint venture with the Chavez administration.
It had also hoped to partner with the government in the Las Cristinas project, which is one of Latin America's largest gold deposits and has estimated reserves of 17 million ounces.
In February, Chavez said Venezuela would develop Las Cristinas with Chinese state investment company CITIC instead.
Venezuela is a relatively small player in the gold world, with its legal mining industry producing about 6 tonnes in 2010 and informal, small-scale mining thought to add a further 12 tonnes to the country's annual output.
But it boasts some of Latin America's biggest deposits of the precious metal - its proven reserves are more than 4,600 tonnes - buried below the jungles south of the Orinoco River.
Clashes in Colombia over military post row
Al Jazeera. July 19, 2012
Colombian security forces have clashed with indigenous activists who stormed a hill-top military base that they were occupying.
One person was killed and more than 20 others were injured in Wednesday's clashes in the Cauca province, in south-west Colombia, according to local media reports.
Anti-riot police were sent to Cerro Berlin after Nasa tribesmen carrying sticks had driven about 100 soldiers from the army post they were guarding on the mountain.
Early on Wednesday, police used tear gas to remove the indigenous group from Cerro Berlin, some two hours from the town of Toribio.
Indigenous leaders have called on both government troops and the Revolutionary Armed Forces of Colombia (FARC) to abandon the jungle-covered mountains so they can rebuild their lives after years of bloodshed killed dozens from their community.
Indigenous leader Marcos Yules said his people wanted all armed men, be it rebels or members of the security forces, to leave.
"We profoundly regret having to use force to restore our constitutional rights. This could have been avoided if the army heeded our request in due form and the government had ordered them to leave," the Association of Indigenous Councils of Northern Cauca said in a statement.
War on FARC
Colombian President Juan Manuel Santos has said the government will hold a meeting with Nasa representatives, but only once they stop occupying the army post.
Citing an email from a captured FARC computer, Santos blamed rebel propaganda for stoking tensions: "Without accusing, far from it, the indigenous people of being in cahoots with the FARC, but yes there are elements we know have direct links."
Santos said the government would not remove soldiers from the area, but it was open to dialogue even though pulling troops out from the region was not negotiable.
Santos swept to office in 2010 promising to build on the security advances that began under former President Alvaro Uribe, a US backed offensive weakened the FARC and drug gangs, making Colombia safer and fostering foreign investment.
In late 2011, Colombian forces dealt the rebels a major blow, killing FARC leader Alfonso Cano in Cauca. The province had become an area of intense military operations since Cano took over the insurgent group three years before.
Since then, rebels have fought back, stepping up attacks on economic targets like oil and mining installations and threatening the government's drive to restore Colombia's image.
Jailed ex-Colombian intelligence chief faces new wiretapping charges
Esteban Manriquez. Colombia Reports. July 17, 2012
Prosecutors indicted the former director of the now-defunct Colombian national intelligence agency, DAS, on Monday for illegal wiretapping.
Jorge Noguera, currently serving a 25-year sentence for previous convictions, was charged with authorizing illegal wiretaps on journalists, judges, human rights activists and other public officials and will be tried before the Supreme Court.
The prosecution argued that Noguera made "illegal use of transmitters and receivers" to monitor political opponents of former President Alvaro Uribe.
Noguera was incarcerated in a Bogota jail in 2008 for three years pending his 2011 trial. In September of 2011, the Supreme Court sentenced the ex-DAS director to 25 years in prison for facilitating the paramilitary infiltration of the intelligence organization, criminal conspiracy and the illegal use of privileged information.
Another 20 former government officials associated with the Uribe administrations have been investigated on charges related to unauthorized surveillance.
The wiretapping scandal was the primary motivation for Colombian President Juan Manuel Santos to dismantle the organization and shift its responsibilities to other government agencies.
Although he denies such accusations, Noguera was also held responsible for the murder of university professor Alfredo Correa de Andreis. The academic was assassinated after Noguera passed information about Correa de Andreis to paramilitaries.
In addition to his sentence, the court ruled Noguera was barred from holding public office for 20 years and ordered he pay damages to the family of Correa de Andreis.
The former DAS chief was also implicated in the disappearance of a number of trade unionists, however the charges were not upheld.
Alvaro Uribe appointed Noguera as head of the DAS after he managed the former president’s succesful 2002 election campaign. Noguera held the post until 2005.
Western Andean Region [contents]
Ecuador central bank lowers 2012 growth target to 4.8 pct
Reuters. July 17, 2012
(Reuters) - Ecuador's central bank has lowered its 2012 economic growth forecast to 4.8 percent from 5.4 percent previously, according to a report published on the monetary authority's website on Tuesday.
The central bank report did not explain why it decided to lower its 2012 growth target, but the government has warned that Ecuador's economy could suffer if oil prices drop.
In recent years, higher oil revenues together with increased tax collection have allowed the government to ramp up public spending, which has spurred economic growth.
However, the OPEC-member's economy grew 0.7 percent in the first quarter versus the last three months of 2011, the lowest quarter-on-quarter growth rate since the first quarter of 2010.
Central bank data shows that key crude oil exports decreased 0.6 percent in value in the first quarter versus the last three months of 2011.
Growth in the construction sector slowed to 0.3 percent in the first quarter, the slowest quarter-on-quarter growth rate since the last three months of 2009, ac cording to the data.
Ecuador's economy expanded 7.8 percent in 2011, more than double the 2010 growth rate of 3.6 percent and higher than the paltry 0.4 percent in 2009.
The government has vowed to continue spending heavily to spur growth in 2012 as it heads toward a presidential election scheduled for February 2013.
Leftist President Rafael Correa is expected to run for re-election but has yet to make an official announcement.
The country's good economic performance led Standard & Poor's to upgrade Ecuador's long-term sovereign rating to B from B-minus in early June.
But the Correa government has failed to diversify the economy away from its dependence on oil exports and Ecuador could suffer if crude prices continue falling.
"A failure to accumulate savings during a run-up in oil prices means that the dollarized economy now looks highly vulnerable to a sustained period of weaker energy prices," Capital Economics said in a note earlier this month.
Ecuador produces around 500,000 barrels of crude oil a day and is OPEC's smallest member.
Ecuador Finance Minister: Government Has Covered 2012 Financing Needs
Dow Jones. July 18, 2012
QUITO--Despite global concerns of an economic slowdown, Ecuador's Finance Minister Patricio Rivera said Wednesday that the government has covered all financing needs for 2012 and most of its needs for next year.
"We have no funding concerns. Financing for 2012 is complete and 2013 is almost all financed," Mr. Rivera said at a news conference. "I'm looking at financing for the second half of 2013."
According to Mr. Rivera, the Ecuadorean government has talked with lenders to structure financing packages that will be needed next year.
In the same news conference, National Planning Secretary Fander Falconi said public investment from the central government during the first half of the year totaled $2.88 billion. For full-year 2012, public investments are expected to total $5.7 billion.
Most of the investment went to infrastructure projects as well as to the education and health sectors, among others.
"We have received clear instructions from President Correa not to cut planned investments because there is no reason for a cut," Mr. Falconi said.
The Ecuadorean government has forecast an average price of $79.70 for a barrel of crude oil in the 2012 fiscal budget. Mr. Correa has said that during the first six months of the year, the average price for Ecuadorean crude was $106 a barrel. He said the government would cut investment only if oil prices fall below $53 a barrel in the second half of the year.
Write to Mercedes Alvaro at email@example.com
Ecuador to Buy Iranian Fuel in Defiance of Western Sanctions
Nathan Gill. Bloomberg. July 18, 2012
Ecuador is in talks with Iran to buy $400 million of fuel amid growing efforts by the U.S. and European Union to crack down on the Islamic republic’s crude sales.
Ecuador’s central bank President Pedro Delgado said negotiations are still underway though insisted his government is free to trade with whomever it wishes.
“Ecuador is a sovereign nation and can have relations with any country in the world,” Delgado told reporters in Quito today.
Ecuador’s President Rafael Correa is among a number of allies of Venezuela’s Hugo Chavez that have courted closer economic and diplomatic ties with Iran in the face of Western- led sanctions. Iranian President Mahmoud Ahmadinejad visited Quito on a four-nation tour of Latin America in January, and the two countries have pledged to build a refinery together in South America’s fifth-biggest oil producer.
Ecuador, a member of the Organization of Petroleum Exporting Countries, is trying to guarantee gas supplies as the country’s biggest refinery is scheduled to go offline in October for about a year of maintenance work.
The U.S., which accuses Iran of seeking to develop a nuclear weapon, sanctioned the National Iranian Tanker Co. and four alleged front companies for Iran’s oil trade on July 12 in its latest bid to curtail the country’s petroleum sales until it abandons illicit aspects of its disputed nuclear program.
The U.S. action doesn’t impose penalties on non-U.S. companies that continue to do business with NITC.
The EU, building on sanction by the U.S. and United Nations, embargoed the nation’s oil and banned EU companies from insuring its crude shipments this month.
Iran says its nuclear program is for peaceful energy and medical purposes.
Iran’s crude exports fell to 1.88 million barrels a day in May from 1.905 million barrels in April, according to data posted on the website of the Joint Organization Data Initiative.
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Ecuador: Two Banks Failed to Meet Deadline for Divesting Assets
Dow Jones. July 18, 2012
QUITO--Two Ecuadorian banks have failed to meet the deadline to sell their stakes in businesses unrelated to the banking sector and have moved those companies in a trust in order to complete the sale process, a high-level government official said.
Andres Martinez, a representative of Presidente Rafael Correa on a Banking Superintendency committee, said Tuesday that Banco Internacional has transferred its insurance company and pension-fund company to the trust, while Banco del Pacifico, a state-owned business that operates as private bank, has transferred its brokerage house, insurance company and pension-fund company.
The trust is operated by state-run Corporacion Financiera Nacional.
The "Direccion Nacional de Aviacion Civil" has also transferred a logistic-service company to the trust because it also has shares in Banco Ruminahui.
The three entities have a six-month period in which to complete the sale or they could otherwise face legal sanctions and see their companies go to a public auction.
Pedro Solines, Ecuador's Banking superintendent, said at a press conference that the country's banking regulator will audit all sales to verify that there are no cases of "fictitious sales."
In a May 2011 referendum, Ecuadorians approved a proposal from President Correa to bar banking and media companies from having other commercial interests.
After the referendum, a controversial anti-monopoly law proposed by Mr. Correa, and passed by the National Assembly in September, set last Friday as the deadline for shareholders and directors who have stakes larger than 6% in the financial system to end their participation in companies outside the banking sector.
People close to the private banking sector said the forced sales could result in a reduction of the banks' profits and affect some business plans. The regulation, however, isn't expected to have a major impact on the companies.
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Peru's Humala sounds out replacements for prime minister
Patricia Velez. Reuters. July 17, 2012
LIMA, July 17 (Reuters) - President Ollanta Humala has begun sounding out replacements for his prime minister as part of a widely expected Cabinet shuffle designed to calm a wave of violent anti-mining protests in the world's No. 2 copper producer.
"Changes will be made at the right time - not before or after," Humala told reporters on Tuesday, declining to say when the shuffle would take place.
Martin Vizcarra, president of the southern region of Moquegua, told Reuters he was offered the prime minister's post after meeting with Humala on Monday but doesn't plan to accept it.
"The offer is flattering but I'm going to stay in my current job," Vizcarra said. He did not name other politicians under consideration by Humala's office for the prime minister's position.
A government official who declined to be identified said Prime Minister Oscar Valdes would leave in a matter of days.
Critics have blamed Valdes for a crackdown on protesters opposed to Newmont Mining's $5 billion Conga project in the northern region of Cajamarca that killed five people this month.
Prominent members of Congress have called for Valdes to step down and say the government should emphasize mediation instead of force to solve environmental disputes.
Vizcarra was part of a negotiation team that resolved disputes over water and forged community backing last week for Anglo American's $3 billion Quellaveco copper mine.
Construction on the Quellaveco mine is likely to start this year and would allow Humala to claim a victory after failing to curb eight months of protests against the Conga project.
Humala has sought to push ahead with more than $50 billion in planned mining investments in one of Latin America's fastest-growing economies.
Peruvian leaders often shuffle their Cabinets on July 28, Peruvian Independence Day, which also will mark the anniversary of Humala's first year in office.
Humala replaced half of his Cabinet in December, when he promoted Valdes from interior minister to prime minister as he sought to quell protests with a firmer, more law-and-order tone. Both Humala and Valdes are former military officers.
Bringing in a fresh face to lead his Cabinet could help Humala return to the more progressive policies he promised upon taking office, specifically social inclusion and mediation, a former official said.
"This requires an enormous capacity to build consensus and dialogue ... . The damage caused by the prime minister has affected the entire Cabinet and I believe an outsider is needed," said Jose De Echave, who resigned as vice environment minister last year over the government's handling of the Conga conflict.
Humala's approval rating has hit a new low of 40 percent, a poll showed on Sunday, as he struggles to avert anti-mining violence in rural provinces that say they have been left behind by Peru's decade-long economic boom.
Bolivia to seek new partner after Jindal quits
Carlos Quiroga. Reuters. July 18, 2012
LA PAZ (Reuters) - Bolivia's government said on Tuesday it wants to award a new contract to exploit a huge iron ore deposit within six months after India's Jindal Steel & Power Ltd confirmed it was abandoning the El Mutun project.
Jindal was awarded a 40-year contract to mine about half the El Mutun site, which is believed to contain some of the world's largest reserves of iron ore.
The project also included construction of the Andean country's first steel plant, but it got bogged down by delays and disputes between the government and the company that finally ended in Jindal terminating the contract on Tuesday.
Hector Cordova, head of Bolivia's state mining company Comibol, said the government would launch a new bidding round before the end of the year and hoped it could still fulfill the original target to start producing steel by 2014.
"Mining and steel-making at El Mutun continue to be a top priority. Jindal's exit gives us an opportunity to team up with a serious company that has the technical and economic capacity to guarantee the project's success," he told Reuters.
The collapse of the giant project is the latest in a series of setbacks for foreign mining companies in Bolivia and is a blow for leftist President Evo Morales as he seeks to attract foreign investors.
Morales has steadily increased state control over mining projects, the key natural gas industry and utility companies since he took office in 2006, but he says he wants to attract foreign firms as long as they are willing to be "partners" with the state.
Jindal said the government had failed to meet its side of the agreement, particularly in terms of natural gas supplies to the project.
It accused the Bolivian government of being unwilling to fulfill its obligations and said it planned to pursue international arbitration against Bolivia, which also threatened legal action.
"Jindal was simply trying to make investments on the basis of our potential. They didn't have their own capital, they were just speculating with stock markets and trying to invest on the back of that," Mining Minister Mario Virreira told a news conference.
"Now we want to find a company that shows us they've really got the capital to invest in Bolivia," he added.
(Additional reporting by Bangalore newsroom; Writing by Helen Popper)
Bolivia agrees to sell more gas to Argentina under an ‘interruptible’ contract
Mercopress. July 19, 2012
Argentina and Bolivia signed on Wednesday new agreements to increase the sale of Bolivian natural gas to its southern neighbour but the controversial issue of a price review went unnoticed.
The documents were signed in the city of Cochabamba during the one day visit of President Cristina Fernandez to meet with her peer Evo Morales to address besides energy issues, bilateral relations and the current situation in the region.
The president of Bolivia’s government oil company YPBF, Carlos Villegas and Argentina’s Enarsa, Ezequiel Espinosa signed the “interruptible natural gas purchase and sale” contract with additional volumes.
Under the new wording Bolivia will export an extra six million cubic metres per day of gas in 2012 and 2013, but subject to the ‘interruptible’ clause meaning no side will be forced to pay fines if either of them does not comply with the deal.
Argentine Federal Planning minister Julio De Vido underlined the significance of the agreement since Bolivia has available gas and Argentina is completing a gas pipeline between the province of Salta and Buenos Aires.
Natural gas exports to Argentina jumped last May from 7 to 13.5 million cubic metres per day, mainly because a new processing plant built in Bolivia by a consortia headed by Spain’s Repsol.
Under the new clauses Argentina will purchase additional volumes of natural gas, besides the original contract which commands Bolivia to increase sustainedly shipments up to 27 million cubic metres per day by 2017.
De Vido and his counterpart Juan Jose Sosa signed an intention letter by which Enarsa will purchase propane, butane and liquefied gas beginning the second half of 2014. The sale of these fuels will become effective when Bolivia concludes the construction of two liquid natural gas splitting plants, which will also be exported to Brazil.
The Argentine president described the documents as “very important” and underlined the capacity of the Juana Azurduy pipeline that will have a capacity of 27 million cubic metres per day.
Regarding Bolivian natural gas prices Minister De Vido said that they were not part of the talks, “since there is no reason to modify accords signed by both governments with a parametric which enables to adjust costs every quarter taking into account a basket of international fuel prices”.
“There are no talks on modifying those accords”, underlined De Vido. “This gas has a buyer in Argentina: our manufacturing industries, residential areas among other sectors. Argentina will be a sustained and increasing consumer of Bolivian gas” he added.
Foreign ministers Hector Timerman and David Choquehuanca together with Bolivian communications minister Amanda Davila also signed other cooperation agreements in areas such as digital technology, university degrees, education, technology exchange, health and immigration.
Bolivian president Morales said the visit of his peer was significant and helped boost regional projects and to defend democracy. The country’s first indigenous president also criticized what he described as “the congressional coup” in Paraguay with the purpose of removing a popular and elected leader.
In the afternoon and before heading back to Argentina, Cristina Fernández visited the Heroínas de la Coronilla monument, a memorial to the women who fought the Spanish Empire in 1812.
Mexico, Central America and Caribbean [contents]
Mexico presidential runner-up alleges money laundering in election
Jo Tuckman. The Guardian. July 19, 2012
The runner-up in Mexico's recent presidential election has added the charge of money laundering to his efforts to get the country's electoral tribunal to invalidate the victory of Enrique Peña Nieto of the Institutional Revolutionary Party, or PRI.
Andrés Manuel López Obrador of the left wing Party of Democratic Revolution, or PRD, presented his challenge to the the electoral authorities last week. It contained 58 boxes of documents initially focused on allegations of extensive vote buying, systematic bias in the media, manipulated opinion polls and massive overspending.
The additional charges centre on a bank called Monex and electronic cards it issues in bulk to clients for them to distribute.
A small amount of these cards were directly linked to PRI activists in the central state of Guanajuato before the election in a complaint filed by the governing National Action Party, or PAN, whose candidate came in a poor third in the election on 1 July.
"Peña Nieto benefitted from funds of illicit origin, what is commonly called money laundering" López Obrador said at a press conference on Wednesday. "It would be very serious if the authorities did not investigate. They would be covering up a crime."
Since the election further questions have arisen around Monex from invoices detailing large purchases of the cards by two companies during the electoral period. Investigations by local media have found that these companies do not appear to exist, at least not at the addresses given on the documents.
López Obrador has now produced new documents claiming to show large deposits made in Monex accounts by other companies that it claims are equally questionable. The documents include information that appears to be from official records indicating that one of these depositing companies was registered on the same day with the same shareholders as one of the companies cited in the invoices detailing purchased cards.
Joining the dots, López Obrador's team is claiming that money of deliberately hidden origin that probably came from either "illegally directed public funds or organised crime" was secretly funneled into the PRI campaign through Monex and its clients.
The allegations also come in the context of the embarrassment caused in Mexico by the US Senate revelations about rampant money laundering through HSBC Mexico.
The PRI, that has repeatedly rejected all claims of dirty tricks as groundless, issued a statement accusing López Obrador of desperation. "The only thing this new lie achieves is the escalation of the irrationality of his arguments," the statement said.
With the tribunal not expected to rule on López Obrador's challenge to the election until early September, Peña Nieto himself has focused on cementing his claim to the presidency with statesmanlike interviews and formal meetings, including one with incumbent President Felipe Calderón on Tuesday.
"I hope that the political parties will embrace a democratic attitude and respect the result of this election," he told a press conference shortly before López Obrador revealed his latest allegations.
Mexico admits to 67 journalist murders since 2006
Roy Greenslade. The Guardian. July 18, 2012
Mexico's special prosecutor for crimes against journalists says 67 journalists have been killed and 14 have disappeared in the country since 2006.
But Laura Angelina Borbolla, while testifying at a congressional hearing, said she was aware of only one case involving the murder of a journalist that resulted in someone being sentenced.
She said her unit had identified 74 suspects in reporters' killings, but she didn't say if any of them had been detained.
Press advocates have long called Mexico one of the most dangerous nations for journalists. But there is little agreement about the numbers killed.
According to the New York-based press watchdog, the Committee to Protect Journalists, 48 were killed or disappeared from December 2006 to the end of 2011, and five more were murdered this year. And Mexico's human rights commission lists 81 journalists killed since 2000.
None of the figures reflect incidents of threats and intimidation, either at a personal level or to media outlets. Armed attacks are relatively common in northern Mexico.
For example, on 10 July, there were three grenade attacks on newspaper buildings in a single day.
The targeted publications were El Mañana, a daily based in Nuevo Laredo; La Silla, the weekly supplement of El Norte, a daily based in Monterrey; and Linda Vista, another El Norte supplement produced in Guadalupe.
El Norte has sustained three similar attacks in the past two years, and the authorities have never identified those responsible.
In Mexico state, violence against women has surged
Tracy Wilkinson. Los Angeles Times. July 17, 2012
MEXICO CITY — For hours, gunmen held captive a church group camping on a spiritual retreat.
They raped girls and beat boys. They stole their cellphones.
Finally the gunmen left; the youths wrapped themselves in blankets and walked five miles to find help.
The attack late last week outside Mexico City illustrates the mounting dangers — especially violence targeting women — in the Mexican state that until last year was governed by the man who will be the nation's next president.
The state of Mexico, which surrounds Mexico City on three sides, has seen an "alarming" surge in the number of murders and rapes of women, according to several human rights organizations. Much of that increase occurred during the governorship of Enrique Peña Nieto, whose six-year term ended last fall before he went on to win this month's presidential election.
"We identified a systematic pattern of violence against women, triggered by a lack of investigation, prosecution and punishment by the system of justice that exists in the state," a Mexican watchdog group, the National Citizens' Observatory of Female Murders, concluded this year.
The organization was rebuffed in its efforts to persuade the state legislature under Peña Nieto's government to issue an alert to women to protect themselves. It identified 1,003 slayings of women during Peña Nieto's term, roughly half of which went unsolved and largely uninvestigated.
In 2011, two women a day, on average, were slain or went missing in Mexico state, according to the organization.
In the camping incident, about a dozen gunmen invaded the eco-friendly Hummingbird campground where about 90 youths and adults were on a retreat sponsored by the Church of the Holy Trinity. The attackers held the group captive from late Thursday until the predawn hours of Friday.
One girl told Mexican television that the assailants pointed their guns steadily at the youths, forcing several girls into their tents, where they were raped.
Alfredo Castillo, state prosecutor, said five female members, three under the age of 18, were raped. He said Monday that one suspect had been arrested and several others "identified" and were being sought. Authorities were familiar with the group because of its past criminal activity, he said, adding that the isolation of the campground made it vulnerable.
"It was an area that was totally isolated, remote, wooded," Castillo told Milenio television. "They [the people on retreat] were looking to be completely out of contact with other people.... That's why there was no police presence."
Castillo, who has been quoted in news reports as saying women get killed and attacked in Mexico state because they use drugs, did not return calls to The Times.
In a report this month, Amnesty International said violence against women in the nation had reached alarming proportions.
"In recent years we have witnessed not only an increase in killings of women but a continuing routine lack of effective investigations and justice," the London-based human rights organization said.
In the run-up to his campaign for the presidency, Peña Nieto sought to portray his public security record in more positive terms than the reality would suggest. His government redefined "homicide" in a way that allowed officials to claim the number of murders had declined when, according to most experts, it had soared.
And his government used a legal loophole to assert that there were virtually no extortion cases in the state, when, in fact, Mexico state had one of the nation's highest rates of extortion, a favorite sideline crime of drug traffickers.
Perhaps the darkest mark on Peña Nieto's record was the 2006 incident in San Salvador Atenco, when nearly 30 women were arrested during a protest by peasants and then sexually assaulted by police while in detention.
Peña Nieto has since said it was necessary to use force to put down the protest but also recognized that abuses took place.
Yuriria Rodriguez, an activist with the observatory, said the lack of prosecution of women's slayings in Mexico state has led to a climate of impunity. "They want to close their eyes," she said.
Mexico's #Iam132 student protesters weigh next moves
Valeria Perasso. BBC. July 18, 2012
During Mexico's presidential election, a group of university students voiced their frustration at what they saw as biased media coverage. Their movement, born on social media and known as #YoSoy132 (I am 132), shook up a staid campaign - but what now for the protesters?
"Turn off the stupid TV, turn on the truth," was the call as students marched in their thousands in the Mexican capital and other towns and cities in May and June.
The target of their anger was a supposed alliance between the country's biggest media outlet, Televisa, and Enrique Pena Nieto, front-runner and candidate for the Institutional Revolutionary Party (PRI), which had ruled Mexico for much of the 20th Century.
The students' rage at what they saw as unfair media coverage widened to include allegations of vote-buying and other irregularities during the election itself.
Mexico is now awaiting a ruling by the electoral court on the validity of the 1 July election, which was won by Mr Pena Nieto.
At the same time, members of the #YoSoyy132 movement are deliberating their group's future course.
Some of its leading members see the need for reorganisation.
"We already know what we want in the long term - to awaken society's political consciousness and to democratise the media. We now need to figure out how, and in order to define that we have been working in student assemblies," says student Ari Santillan in Mexico City.
The movement held its first national assembly days after the election, aware the next steps would be crucial for its political survival.
The first goal, activists say, is to outline an agenda that tackles issues of a wider public interest.
"We know that we need to look at broader topics to keep the support of the Mexican society," student Ignacio Martinez told the BBC.
"But we want to keep the original spirit of the group that was born non-partisan."
But many are concerned the student movement will have to compromise and search for allies if it is to enter the political mainstream.
"They should remain independent rather than defining alliances. But this is just wishful thinking, I don´t think their voices will rise above other groups that know how to handle political battles," says Roger Bartra, professor emeritus at the Autonomous University of Mexico (UNAM).
"They are trapped in this dichotomy - they need to find allies to survive but those allies might devour them."
It has only existed for just over two months, but #YoSoy132 has already experienced serious splits.
Some students left saying that, despite its non-partisan character, the movement had tacitly aligned itself with Andres Manuel Lopez Obrador, candidate for the left-wing Party of the Democratic Revolution (PRD). He is challenging the election result.
Others see the group as too close to students' interests and have created the broader National Front Against the Imposition (of Pena Nieto), an offspring of the #132 that now is going its own way.
"The movement has exceeded the #132 goals. The National Front we now have is more inclusive, it welcomes everyone, from workers to party affiliates - not just students," says Herz Jossa, who left #132.
The #YoSoy132 movement was born on the streets, but members have acknowledged the need for "a new era" in which public demonstrations are just one part of their activities.
"Taking the streets is a sign of political muscle, but that's not all we do. We are thinking of engaging citizens in workshops about public media, for example, and that's just one initiative of many," says Mr Santillan.
They are also trying to draft a #YoSoy132 bill that would regulate media access and promote alternative ownership of radio and TV networks, although the debate about how they could move such a proposal forward is still in its early stages.
Mexican competition authorities have offered to involve and inform the group about the granting of a broadcasting licence for a third free-to-air television network.
"To survive as a movement, they would need to take part in the new government, in areas such as youth policy. There is a path that they can follow to translate their activism into political participation," says Prof Alfredo Nateras at UNAM in Mexico City.
But that may be a challenge in itself.
The electoral court is likely to confirm Mr Pena Nieto as the next Mexican president.
A youth movement that contested his victory might not be the PRI's first choice of dialogue partner.
Lawmakers threaten to cut aid to El Salvador over Supreme Court showdown
Julian Pecquet. The Hill. July 17, 2012
The top Democrat and Republican on the Senate's western hemisphere panel on Tuesday urged the Obama administration to cut U.S. aid to El Salvador if the ruling leftist party goes through with its plans to replace judges on the country's Supreme Court.
After the high court ruled that the appointment of new judges ahead of legislative elections in May was unconstitutional, the Farabundo Marti National Liberation Front and its allies appealed to the Central American Court of Justice, which legal experts say doesn't have that authority. That court, which is controlled by leftist Nicaragua, upheld the appointees, creating a constitutional crisis with two sets of competing judges.
“We urge the Obama administration to engage the highest levels of the Salvadoran government to gain a quick resolution to the serious constitutional crisis,” Sens. Robert Menendez (D-N.J.) and Marco Rubio (R-Fla.) said in a joint statement.
“The administration must be clear in its engagement that if concrete measures to restore the constitutional and democratic order in El Salvador are not soon implemented, the United States will have no choice but to consider a variety of bilateral actions that would reflect this lack of a democratic framework. These options would include immediately suspending any further consideration of a second Millennium Challenge Corporation compact, review and denial of U.S. visas for individuals participating in or facilitating the continuation of the existing unconstitutional order, and the immediate termination of any U.S. technical assistance through said individuals or institutions under the Partnership for Growth.”
El Salvador was ravaged by civil war between the Farabundo Marti National Liberation Front and the U.S.-backed military government between 1980 and 1992. The United States signed a $461-million, five-year Millennium Challenge Corporation compact with the impoverished country in 2006, which is up for renewal after its completion in September.
Guatemala to Seek Mining Tax Rise Next Month, Minister Says
Adam Williams. Bloomberg. July 13, 2012
Guatemala President Otto Perez Molina will send a bill to Congress next month to increase royalties on mining companies to 5 percent, Energy and Mines Minister Erick Archila said.
The modification to the mining law is separate from a package of 43 constitutional changes Perez Molina seeks that would let the state have as much as a 40 percent stake in non- renewable resource companies, Archila said in an interview yesterday in Guatemala City. Natural resource companies in Central America’s biggest economy pay a voluntary 1 percent royalty, he said.
“The reform will redefine and strengthen national mining laws and eliminate the voluntary payment of taxes,” Archila said. “If approved, the taxes will be obligatory for the mining sector.”
Guatemala is seeking to broaden its tax base and doesn’t want the measures, opposed by the country’s biggest industrial chambers, to adversely affect investment, Finance Minister Pavel Centeno said in a July 9 interview. The government won’t expropriate stakes in natural resource companies or take a stake in those already in the country, he said.
“There are companies that want to partner with the state to have a better capacity to operate within the country,” Archila said. “It will create more order and responsibility in the mining sector and won’t affect investments in the country.”
Tahoe Resources Inc. (THO), which is awaiting final approval for its Escobal silver mine southeast of Guatemala City, jumped more than 1 percent immediately following the comments. Shares in the Reno, Nevada-based company closed down 2.2 percent at $12.67. Tahoe has met “all operational requirements” established by the ministry, Archila said, without giving more details.
The potential tax increase was expected, said Craig West, an equity analyst at GMP Securities LTD, in an e-mail.
Guatemala, Central America’s largest oil producer, is in talks with Vancouver-based Ivanhoe Energy Inc. (IVAN) (IVAN) to construct a refinery to process the country’s heavy petroleum that is currently used primarily for asphalt, Archila said.
Oil production has fallen to 10,000 barrels per day from 30,000 barrels in the last 30 years and could disappear if exploration falters, Archila said. More oil permits will probably be issued this year in seven untapped areas and the government intends to increase production to 80,000 barrels per day by 2022.
“Ivanhoe is the company that wants to come to Guatemala,” Archila said. “They know of government plans to increase oil production in Guatemala and we are listening to their proposal to come here.”
The economy will grow 3 percent this year after growth of about 4 percent last year, Centeno said. Gross domestic product expanded 3.4 percent in the first quarter from a year earlier, while consumer prices rose 3.5 percent in June from a year earlier, the slowest pace since February 2010.
About 50 percent of Guatemala’s electricity is produced by hydroelectric plants using only 15 percent of the country’s 6,000-megawatt potential, Archila said. Guatemala will hold an auction for bidders to purchase licenses to generate as much as 600 megawatts of hydroelectricity over the next 15 years, he added.
“The country has enormous hydroelectric potential,” Archila said. Guatemala seeks to create 1,500 megawatts of hydroelectricity over the next 15 years, he added.
To contact the reporter on this story: Adam Williams in Guatemala City at email@example.com
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Belize studies move to decriminalize marijuana possession
Reuters. July 19, 2012
(Reuters) - Belize is studying a plan to decriminalize possession of small quantities of marijuana, joining other Latin American nations that are trying to find novel ways to battle drug trafficking.
Belize appointed a government committee this week to study ending jail terms for the possession of up to 10 grams of marijuana and replacing penalties with small fines and drug education courses, the government said in a statement.
Possession of 60 grams or less of cannabis is punishable by up to $50,000 in fines or three years in prison. Advocates of the decriminalization plan say arrests burden courts and jails in the Central American nation of roughly 313,000 people.
Latin American leaders have been pressuring the United States for an overhaul of anti-drug policies, including possible narcotics legalization as a way to take profits out of the trade.
U.S. President Barack Obama has held firm in rejecting calls to legalize either growing or consuming drugs.
Guatemalan President Otto Perez proposed legalizing drugs this year as a way to combat violent drug cartels that use Central America as a key transit route to smuggle cocaine from South America to the United States.
Perez and other Central American presidents will meet with representatives from the Organization of American States to discuss the details of the plan on August 8.
Uruguayan President Jose Mujica said last month that his country will consider legalizing marijuana.
Top officials in Colombia and Mexico, the United States' strongest allies in the region on drug policy, are also pushing for a new approach to the war on drugs.
(Reporting By Mike McDonald; Editing by Stacey Joyce)
Jamaica eyes IMF loan deal later this year
Horace Helps. Reuters. July 18, 2012
KINGSTON, July 18 (Reuters) - Jamaica is in advanced talks with the International Monetary fund on a new lending agreement and another round of discussions aimed at hammering out a deal is set to begin early next week, Finance Minister Peter Phillips said.
In a statement to the Caribbean nation's parliament on Tuesday, Phillips indicated the government hoped to have a new standby agreement with the IMF in place by the end of this year.
"Last week, I visited Washington, D.C., where I had discussions with the staff of the International Monetary Fund and with the Inter-American Development Bank covering Jamaica's macroeconomic program," Phillips said.
"The objective of the visit was to present the fund with an update on the macreconomic developments in Jamaica, including the recently concluded budget exercise and more importantly, to settle definitively on a timetable to bring negotiations closer to an agreement and conclusion," he said.
"I can report that a team from the fund will come to Jamaica for meetings to begin on July 23rd. We will use the opportunity to further advance discussions," Phillips added.
"This will be followed up by a larger negotiating mission in the month of September. It is our hope that we will be able to conclude negotiations with the staff of the fund so that we will be able to have a decision from the Board of Directors of the Fund in the fall," he said.
IMF concerns about Jamaica's tax reform, the need for cuts in the public sector payroll and pension reform were among outstanding issues to be resolved, Phillips said
He also said the government had secured funding to honor a 200 million euro payment due on July 27. The money was raised from the domestic market, he said.
A 27-month standby agreement worth $1.27 billion expired in May, although it effectively lapsed after the previous government was unable to meet performance targets set by the IMF.
The IMF has said Jamaica's debt burden stood at 126 percent of gross domestic product last year, making it the world's eighth most indebted nation. However, its economy has begun to inch forward after struggling during the global recession.
The IMF is predicting that Jamaica will record 2.4 percent growth this year, after growing 1.5 percent during the past year according to the Planning Institute of Jamaica. The growth was the first annual expansion in real GDP since 2007, driven largely by demand for bauxite and alumina as well as increased agricultural production.
A new People's National Party government that took office in January, led by Prime Minister Portia Simpson Miller, has said that although the terms of a new agreement will be tough, the administration will try to protect the most vulnerable in a society where poverty levels have risen to 21 percent of the population from 9 percent four years ago.
Region: Trade, Security, Economy and Integration [contents]
Simeon Tegel. GlobalPost. July 17, 2012
LIMA, Peru — From Tierra del Fuego to Tijuana, Latin America is highly vulnerable to climate change, which is expected to trigger a series of natural disasters that could even reverse local victories in the fight against poverty.
Droughts will grip regions from the southern cone to northern Mexico. Extreme storms are increasingly battering Central America. Rising seas will swallow up vast coastal areas. And many Andean glaciers will disappear forever.
Meanwhile, the greatest threat to the Amazon — home to roughly a third of all plant and animal species — may no longer be logging or cattle ranching but climate change itself.
Gently rising temperatures and shifting rainfall patterns are leaving the world’s largest tropical rainforest more vulnerable to dieback, drought and forest fires.
Some scientists even warn that could trigger “positive feedback” as deforested areas generate less rain — leading to yet more dieback, drought and fires in an unstoppable cycle that could turn much of the Amazon into savannah regardless of any local successes in the fight against loggers.
That would accelerate the global climate crisis as the vanishing jungle unleashes billions of tons of carbon currently locked in its plants and trees.
Although scientists remain wary of blaming individual weather events on climate change, almost all agree that the bigger picture of unpredictable weather, unprecedented storms, floods and droughts leaves no room for doubt that climate change is already upon us.
All of these phenomena will have huge costs, both human and economic. Experts predict that it will be the poor who will be hit hardest.
According to one authoritative study released last month at the Rio +20 Earth Summit in Brazil, climate change will cost Latin America $100 billion per year by 2050.
That price tag will include falling harvests, damage caused by “natural” disasters such as flooding and drought, and the spread of tropical diseases to new areas, says the joint study from the Inter-American Development Bank (IDB), World Wildlife Fund and United Nations’ Latin America economic agency ECLAC.
It also includes $7 billion arising from lost fishery and tourism revenues as a result of coral bleaching in the Caribbean, as warmer waters kill spectacular reefs that have grown over thousands of years.
The calculations are based on a global temperature rise of 2C (3.6F). Judging from current carbon-emission trends, and the political gridlock in reaching an international treaty to curb them, that figure increasingly looks like a serious underestimate.
Now, even a surprise breakthrough in climate negotiations would probably fail to avoid most of these impacts.
“Many climate-related changes are irreversible and will continue to impact the region over the long term,” warned Walter Vergara, the IDB’s head of climate change and sustainability, in a statement.
Although Latin America only accounts for 11 percent of global carbon emissions, environmentalists insist the region’s governments should also be doing more to shrink national carbon footprints.
Venezuela is a particularly obvious offender. The country’s huge oil bonanza has led to state subsidies, resulting in some of the cheapest gas on the planet — and a national fleet of fuel-guzzlers from modern SUVs to outsized 1950s cruisers.
“Governments in the region are pressuring the major emitters to reduce their emissions,” Ricardo Navarro, of CESTA, El Salvador’s branch of Friends of the Earth, told GlobalPost.
“But they are not asking the fundamental questions about an economic model that extracts and consumes natural resources in an unsustainable way.
Navarro, whose organization works with coastal communities grappling with the loss of mangroves destroyed by the rising Pacific Ocean, added: “Like most other governments, Latin American governments are trying to grow and grow and grow, even though we have already passed the limits of what our planet can sustain.”
Even Bolivian President Evo Morales, who has demanded the developed world pay climate reparations to poor countries, has seen his policies come under attack from greens.
Issues include the Bolivian economy’s continued dependence on oil and gas exports and Morales’ attempts to push a road through an Amazon reserve. The latter could mean millions of tons of carbon emissions triggered by deforestation.
Similar issues plague the entire region as governments finance the construction of infrastructure, intended to boost trade and lift millions out of poverty, using revenues from the export of raw materials.
Nevertheless, there are causes for optimism. Mexico has become only the second nation in the world, after the UK, to set itself binding legal emissions reduction targets. That is in part a reaction to an unprecedented drought that hit much of the country this year.
Under the law passed earlier this year, Mexico is required to reduce its carbon footprint by 30 percent by 2020 and 50 percent by 2050, a huge commitment from Latin America’s second-largest economy where millions still live in grinding poverty.
Meanwhile, many Latin American cities are far ahead of their US counterparts in preparing contingency plans for climate change, according to a recent study by the Massachusetts Institute of Technology. Quito, for example, is already investing millions to maintain its water supply as glaciers melt away high above the Ecuadorean capital.
Yet overall, environmentalists remain critical of what they view as most Latin American governments’ inaction on climate change.
The challenge is to find a development path that is truly sustainable even as countries adapt to the inevitable — and sometimes devastating — impacts of the climate crisis.