Latin America News Round-up
October 1, 2012
Peru's Ailing Fujimori to Ask Humala for Pardon

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
Brazilian president doles out economic advice to David Cameron. The Guardian
Brazil industry activity downturn is slowest in 6 months – PMI. Reuters
Argentina Wants China as Energy Partner. EFE
Argentina's Economy Grew 2.7% in July. Dow Jones
Chile's Pinera presents education-heavy 2013 budget bill. Reuters
Rebel Leader Says Group Is “Armed Wing” of Paraguay’s Poor. EFE
Paraguay economy shrinks again in 2nd qtr as drought hits farms. Reuters

Northern Andean Region
Venezuela opposition flexes muscles. Al Jazeera
Venezuelan Barrios Vote for Chavez and Participatory Democracy. Real News Network
2 Supporters of a Challenger Are Killed as Venezuela’s Election Nears. New York Times
Venezuelan youth could decide if Chavez remains in power. Washington Post
China launches 2nd satellite built for Venezuela. AP

Western Andean Region
Rival Bolivia miners end tin and zinc dispute. BBC
Chevron seeks email logs in Ecuador lawsuit. San Francisco Chronicle
Peru's ailing Fujimori to ask Humala for pardon. Reuters
Peru court reverses sentence reduction in 1991 massacre. AFP

Mexico, Central America and Caribbean
Mexican congress in heated debate on labor reform. AP
Hourly wage in Mexico? Union members express fears of legislation. Los Angeles Times
Plan for Charter City to Fight Honduras Poverty Loses Its Initiator. New York Times
Panama passes intellectual-property protection law that sets $100,000 administrative fines. AP

Brazil and Southern Cone [contents]

Brazilian president doles out economic advice to David Cameron
Nicholas Watt. The Guardian. September 30, 2012

Brazil's president made a timely, though probably innocent, intervention during Britain's party political conference season when she hailed the importance of stimulating economic growth.

President Dilma Rousseff, a former Marxist, said it was important to stimulate the economy during a downturn.

Standing next to David Cameron, who is pushing an austerity programme in the UK, she delivered a speech at the presidential palace in Brasilia that could gave been written by the Labour party.

She said: "I stressed the importance of expanding efforts with a view to improving the conditions that will prove conducive to a recovery of the international economy, not only as regards developed countries but also as regards emerging countries," said the socialist president.

"I have told the prime minister that Brazil has done its share in efforts to improve the recovery of the world economy by means of stimuli to jobs and growth."

The president lavished praise on Cameron for his successful visit to Brazil, saying she was impressed that he visited all three main cities – São Paulo, Rio de Janeiro and Brasilia.

Cameron responded by supporting Brazil's campaign to have a permanent seat on the UN security council. He said: "As Brazil takes its place on the global stage, so it's case for permanent membership of the UN security council becomes ever stronger. We support Brazilian membership.

"We won't always agree about every issue, but what's important is that we have open and honest conversations about the difficult issues and form practical partnerships to get things done together."

Cameron ended his trip to Brazil by launching a treaty to encourage the production of more Anglo-Brazilian blockbuster films.

Speaking at his press conference with Rousseff, Cameron said he wanted to see more productions of films such as the James Bond adventure Moonraker that was shot in Rio.

Cameron, who claims to be a big Bond fan, said: "In film [we have agreed] a new film co-production treaty which will offer incentives for our budding film makers to work together and make a new generation of blockbusters with those unforgettable moments like Bond hanging over Sugar Loaf Mountain."

The treaty, signed by the trade minister Lord Green and the Brazilian foreign minister Antonio Patriota, was one of 10 treaties signed during his visit to Brasilia.
_______________________________

Brazil industry activity downturn is slowest in 6 months - PMI
Silvio Cascione. Reuters. October 1, 2012

SAO PAULO, Oct 1 (Reuters) - The downturn in Brazil's manufacturing activity slackened in September to its slowest pace in six months as industrial employers laid off the fewest number of workers since June and increased output, a private survey showed on Monday.

The HSBC Purchasing Managers' Index (PMI) for the Brazilian manufacturing sector staged its lowest decline to 49.8 in September on a seasonally adjusted basis.

The 49.8 level barely fell short of the 50 mark, which marks the divide from contraction and expansion.

However, it was the third month the number has moved higher, suggesting the downturn in manufacturing activity was becoming less pronounced.

The HSBC PMI survey is comprised of 11 components. One of them, manufacturing output, actually rose in September, as factories stepped up production, at the greatest pace since March, to clear order backlogs.

"The PMI survey reinforces perceptions that Brazil's manufacturing sector experienced a modest rebound at the end of the third quarter and supports the improvement of sentiment regarding the economic outlook for the fourth quarter of 2012," said Andre Loes, chief economist for Brazil at HSBC.

Another survey released last week by think tank Fundação Getulio Vargas revealed confidence among Brazilian industrials jumped in September to its highest level since July 2011.

On top of plans to launch new products, factories boosted output by depleting their order backlogs, said Markit Economics, who compiled the data for HSBC.

Brazilian factories have been hit hard by the current global slowdown. Saddled with onerous taxes, a strong currency and an insufficiently trained labor force, they had less room than foreign competitors to slash prices and fight for waning demand.

But recent data suggests a tentative recovery is underway.

Brazil's industrial output rose in July for the second straight month, surpassing market expectations, according to government data. Brazil's statistics agency IBGE will release industrial data for August on Tuesday.

Automobile output jumped 10.6 percent in August versus July, according to the national carmakers' association Anfavea.

To encourage a recovery, the central bank has cut its benchmark interest rate to a record low of 7.5 percent -- a far cry from over 26 percent just nine years ago. Rousseff also deployed a string of tax breaks and credit incentives to help revive Brazil's flagging industry.

The HSBC survey showed factories cut payroll jobs for the sixth month in a row, reflecting weak demand, but layoffs came at a slower pace than in the prior three months.

Manufacturers' input costs rose, as higher steel and raw material prices pushed inflation to its fastest since June 2011.
_______________________________

Argentina Wants China as Energy Partner
EFE. September 30, 2012

BEIJING – Argentina’s planning minister sought Thursday to attract Chinese interest in his country’s ambitious energy program, which includes plans to build a large hydroelectric complex in 2013 and two nuclear reactors.

In his first day in Beijing, Julio de Vido tried to woo investors for a hydro project in the southern province of Santa Cruz that will include construction of the Nestor Kirchner and Gobernador Jorge Cepernic dams.

Argentina, which is shifting its focus to emerging economies amid the U.S. economy’s struggles and the European sovereign-debt crisis, sent De Vido on a roadshow to Brazil, China and Russia to promote the project face-to-face.

“Trade between Argentina and China has grown by nearly 500 percent in eight years. It’s a clear sign of the (policy decisions) of each country. We have a lot of expectations,” the minister told a packed conference hall.

De Vido has been well received in Beijing, with a sizable number of investors on hand for his presentation and 10 meetings arranged, although some in attendance expressed frustration with certain technical aspects.

“Argentina is a bit stingy with time. It’s tough for them to only give us until Dec. 12 to present ourselves and fulfill all the legal requirements,” Wang Yifu, adviser to the president of the Sinohydro firm, said, though adding that the company remained interested.

Nuclear power also is on the minister’s agenda in Beijing.

On Friday, De Vido will attempt to form a working group consisting of one or more Chinese partners interested in a project to build nuclear power reactors in Argentina.

De Vido’s roadshow follows initial talks on energy partnerships that began during Chinese Premier Wen Jiabao’s visit to the Latin American nation in June.

Negotiations also are ongoing on potential Chinese participation in Argentina’s oil sector.

Earlier this year, Argentina seized a 51 percent stake in oil company YPF from Spain’s Repsol, a move that several analysts say could have been motivated by a plan to bring a Chinese partner on board in Repsol’s place.

YPF boss Miguel Galuccio was scheduled to visit China before the end of this month, but some experts say the trip may have been delayed because of the upcoming political transition in Beijing or due to snags in the talks.

Argentina’s plans for the two dams in Santa Cruz are a response to growing domestic electricity demand. They will have a roughly $5 billion price tag and are to be built over a period of 66 months starting next year.

De Vido stressed the importance of the project, which has already attracted the interest of Brazilian and Chinese firms.

The minister’s visit shows that Argentina is placing no limits on its relationship with China, which has gone from being the workbench of the world to the globe’s banker amid the economic woes in Europe and the United States. EFE
_______________________________

Argentina's Economy Grew 2.7% in July
Taos Turner. Dow Jones. September 30, 2012

BUENOS AIRES--Argentina's economy grew much faster than expected in July, expanding 2.7% from the same month a year earlier, the national statistics agency Indec said Friday.

The expansion contrasts sharply to the 0.1% contraction Indec reported for June, and it seems to support broadly held expectations that the economy will pick up speed in the remaining months of the year.

Indec also said the economy expanded 0.5% from June.

July's year-on-year data are much better than what has been expected, according to the median estimate of more than 50 banks, economic research firms and universities surveyed by Argentina's central bank. That estimate had put growth up 0.8% compared with the same month a year ago.

Securities tied to economic growth--which are known as GDP warrants--were up sharply on the news.

The TVPP warrant rose 1.82% to ARS15.10 Friday.

However, Marina Dal Poggetto, an economist at Estudio Bein & Asociados, voiced skepticism that the economy will grow enough this year to trigger the payment on those warrants.

If the economy grows by less than 3.26% in 2012, the government won't have to pay up to $4 billion in GDP warrants at the end of 2013.

The 2013 federal budget forecasts 3.4% growth this year and sets aside about $4 billion to pay warrants next year. Additionally, officials have said the government plans to make the payment next year.

Even so, many analysts suspect this is unlikely to happen, saying the government will eventually report lower growth and use the $4 billion for something else. Economy Minister Hernan Lorenzino said if the government does not use that money for debt payments, it will spend it on infrastructure projects.

The economy has been suffering thanks in part to weak demand from Brazil, Argentina's top trading partner, and, perhaps more importantly, domestic economic policies, such as severe import barriers and a crackdown on the foreign- exchange market, that have discouraged investment and made it hard for factories to acquire essential capital goods needed to boost output.

Last month, research firm Orlando J Ferreres & Asociados' proprietary monthly activity indicator put July's number down 1.1% on the year, but up 0.9% from June.

Activity in the services sector jumped in July, but manufacturing, construction and farm output continued to languish, according to OJF.

Ms. Dal Poggetto said second-half growth will be better than the first half but far from bold. She also noted that Indec's monthly economic activity index tends to exaggerate growth because Indec underestimates inflation.

Most economists think the annual inflation rate hovers around 25%, while Indec puts it at 10%.

But in recent months some analysts have said the government may have been more accurately reporting growth data because it could save the government billions of dollars next year in reduced GDP warrant payments.

In 2011, GDP officially grew 8.9%, partly because of lax fiscal and monetary policy as well as a consumer spending spree by Argentines flush with cash from double-digit-percentage wage increases. But this year the wage hikes have been slow in coming.

Meanwhile, the economy is expected to expand at a more subdued pace as foreign-exchange controls, import restrictions and high inflation impede growth.

Argentine President Cristina Kirchner acknowledges a more challenging economy, but she has sought to place the blame entirely on negative global factors.

"The world is falling on top of us," Mrs. Kirchner is fond of saying, downplaying the negative impact of her government's economic policies.

She says 2013 will be a better year.

Economists say stronger demand in Brazil for Argentine goods, as well as a bigger crop harvest at home, point toward higher growth in 2013.

"I think the economic prospects are very good," Buenos Aires Province Governor Daniel Scioli said Thursday. "Next year is going to be a good year for Argentina in growth and even greater financing possibilities."

-Write to Taos Turner at taos.turner@dowjones.com
_______________________________

Chile's Pinera presents education-heavy 2013 budget bill
Reuters. September 30, 2012

(Reuters) - Chilean President Sebastian Pinera unveiled an education-heavy 2013 budget bill on Sunday, as he seeks to improve the right's social credentials before municipal elections in October and next year's presidential election.

The budget bill proposes increasing public spending by roughly 5 percent next year, Finance Minister Felipe Larrain said as he submitted the proposal to Congress. The measure would bring total spending to around $63 billion, a record high.

Pinera is under pressure to increase spending after more than a year of massive marches over what protesters charge is a stratified and costly education system.

"Our citizens are rightly every day more conscious of their rights and demand solutions to their problems," Pinera, who cannot run for consecutive terms, said in a national address.

"But we can't fall for the populist cries ... Amid this world in crisis, the Chilean economy is healthy, continues to grow and generate jobs and opportunities. We have to keep advancing."

Chile, the world's largest copper producer, is seen growing around 4.7 percent this year, boosted by its lynchpin mining industry, robust domestic demand and its forestry, salmon and wine exports.

While the Andean country has long been held up as an economic model in Latin America, it has the highest income inequality among OECD countries and the rate has barely fallen since 1990, according to a report by the body last year.

Billionaire Pinera is Chile's most unpopular leader since General Augusto Pinochet's dictatorship ended in 1990, although polls also show the center-left opposition bloc, the Concertacion, as unpopular.

Pinera's Economy, Public Works and Defense ministers are seen as potential presidential candidates in next year's presidential race. The left is pinning its hopes on a comeback by popular former president Michelle Bachelet, who has not said whether she will run.

The 2013 budget puts education spending at a record-high $12.8 billion, Pinera said. But the move is set to fall short in the eyes of many student groups, which are seeking a massive revamp of the system including free schooling for all.

"The president insists in maintaining the fallacy that parents have the right to choose (in terms of education). The ones who choose in Chile are only the ones who have money," student leader Gabriel Boric said on Twitter after the speech.

Pinera also said the bill puts a special emphasis on combating crime and drug trafficking. Congress has 60 days to approve or reject the bill.

(Reporting by Alexandra Ulmer and Antonio de la Jara; Writing by Alexandra Ulmer; editing by Christopher Wilson)
_______________________________

Rebel Leader Says Group Is “Armed Wing” of Paraguay’s Poor
EFE. September 30, 2012

ASUNCION – The purported commander of the shadowy Army of the Paraguayan People, or EPP, said in a video that his small group is the “armed wing” of the Paraguayan poor and called for the elimination of private property in the impoverished South American country.

Paraguayan news Web sites on Friday posted a series of videos featuring suspected members of the EPP, including commander Manuel Cristaldo Mieres, who appears in one of the recordings with the alias “Santiago Vasquez.”

The EPP “is a Marxist-Leninist guerrilla organization ... It is the army of the poor, which defends the interests of the poor in our country. The rich control and manage everything to their liking,” the purported commander said in one of the the videos, filmed in August according to a voiceover.

“In our country, the problem is the poor distribution of wealth. That’s why we have to do away with the private property of the wealthy and we have to give the land to the poor,” the young guerrilla added.

But the affluent will not give up control voluntarily, and therefore “we need support and we have to make our Army of the Paraguayan People strong,” he said.

“The wealthy have their armed wing, which is the police, the military and thugs who guard rural estates, who repress our people with gunfire and kill compatriots who claim rights to land,” the EPP commander said.

“That’s why we the poor have the right to our armed wing and that group is the EPP, which arose to defend us from the rich and defend our lives,” he said.

The EPP is a small armed group that adopted that name in 2008, although its most notable action was the December 2001 kidnapping of the wife of a wealthy Paraguayan business executive, Maria Edith Bordon, who was released a month later in exchange for payment of a large ransom after spending 64 days in captivity.

The alleged perpetrators of that crime have spent several years behind bars.

The federal Attorney General’s Office also says the group is behind other kidnappings and has also planted bombs and carried out attacks on rural estates and police stations.

In one video, the alleged commander is seen in a wooded area and dressed in camouflage and speaks in Jopara, a mixture of Guarani and Spanish, while others show two armed guerrillas – a man and a woman – with an EPP flag behind them.

In both recordings, the purported rebels champion Marxist ideology but also hail Jose Gaspar Rodriguez de Francia, the first leader of Paraguay following its independence from Spain, and Francisco Solano Lopez, president of Paraguay from 1862 until his death in 1870.

Solano Lopez’s death marked the end of the 1865-1870 War of the Triple Alliance, a conflict that Paraguay waged against Argentina, Brazil and Uruguay and which wiped out much of its male population.

The guerrillas also railed against Paraguay’s political class and mockingly described ex-Catholic bishop and ousted former President Fernando Lugo, who while head of state was forced to acknowledge fathering children during his years in the church, as a “sex maniac.”

Hopes for significant change under Lugo – whose 2008 election victory marked the end of 60 years of rule by the Colorado Party, including the 1954-1989 dictatorship of Gen. Alfredo Stroessner – went largely unfilled, due in part to his personal problems.

Another source of frustration for Lugo, who headed a broad-based coalition in favor of reform in the poor, landlocked South American nation, was obstruction and sabotage by Paraguay’s entrenched political establishment.

Paraguay’s Senate voted to oust Lugo three months ago after a turbo-charged impeachment process, finding him guilty of misfeasance for the events of June 15, when seven police and nine squatters were killed in a clash in the northeastern province of Canindeyu.

Land occupations are common in central and northeastern Paraguay. The peasants usually target massive soy plantations owned by businessmen from neighboring Brazil.

Paraguay’s Truth and Justice Commission said in a 2008 report that Stroessner’s regime illegally awarded titles to nearly 6.75 million hectares (16.66 million acres) of land.

Those “ill-gotten” properties represent almost a third of the country’s arable land, according to the commission.
_______________________________

Paraguay economy shrinks again in 2nd qtr as drought hits farms
Reuters. September 28, 2012

ASUNCION: Paraguay's economy shrank 2.3 percent in the second quarter from a year ago, as a severe drought slashed soybean output in the world's No. 4 exporter, the central bank said on Friday.

The economic contraction was slightly less than in the first quarter and stable from the previous three-month period.

A sharp drought that slashed soy output in the world's No. 4 exporter has hurt the small Paraguayan economy. Officials expect a marked recovery next year due to forecasts of better weather.

"From the perspective of production, the agricultural sector continued to see losses in the two most important components: agriculture and ranching, where the first of them was affected by adverse weather," a bank report said.

Central bank official Rodi Ozuna said farm activity declined by 28 percent, partly compensated by a 4.8 percent expansion by the service sector. Public sector consumption jumped 18.2 percent while private sector consumption inched up 0.7 percent.

"GDP has fallen at virtually the same rate in these two (consecutive) quarters. In the next three quarters, we'll see better results," Ozuna said.

Gross domestic product (GDP) fell 2.6 percent year-on-year in the first quarter.

The central bank forecasts growth next year, when the landlocked country will hold a presidential election, at 8.5 percent as the key farming industry rebounds.

Paraguay's new government, which took office in June after the former president's controversial impeachment, plans to sell some $500 million in global bonds in February. That would be the nation's first such issuance since 2000.

Northern Andean Region [contents]

Venezuela opposition flexes muscles
Christopher Arsenault. Al Jazeera. October 1, 2012

It was perhaps the largest rally of Venezuela's opposition since Hugo Chavez's first election victory in 1998, as several hundred thousand people packed Avenue Bolivar, one of the capital’s major arteries, on Sunday.

Wearing the red, blue and yellow colours of the Venezuelan flag, demonstrators began massing for the rally at dawn.

"This is the first time in my life I have seen something like this," said Elias Santana, 61, a marketing administrator. "Thirty years ago, I saw rallies for other presidents, but nothing like this." Getting near the stage was impossible, as throngs of people pushed and shoved to get as close as possible to Henrique Capriles, 40, the presidential candidate representing Venezuela's opposition.

"The man in Miraflores [the presidential palace] failed the Venezuelan people,” Capriles told the roaring crowd. “"Chavez] doesn't behave like the president of all Venezuelans [...] I really want to be the president for all."

The incumbent is promising to continue building "21st century socialism" while the challenger wants a larger role for private business and has pledged to tackle crime and corruption.

'People are tired'

Farid Pena, a gardener with a weather-worn face, is the kind of man many would expect to support the populist president. But Pena says he is voting for Capriles because he is fed up with crime, which he blames on Chavez.

"I have been robbed several times," Pena said. "Chavez has been in power for 14 years, it's time for a change, to change the ideology", the gardener said of the socialist-minded president.

Caracas has become one of the most dangerous cities in the Americas in recent years. Homicides in the capital rose to 19,336 last year, compared with 4,550 in 1998. But it's unclear exactly why crime has gotten so bad.

At the rally, Capriles said "the true ideology is not having violence and having opportunities", in reference to the left-wing policies of his rival.

Other major election issues include unemployment, infrastructure, corruption and the personality of Chavez himself.

"I used to like Chavez," said Jusair Mendez, a student who works part-time at an insurance company. "The people are tired and I'm tired of seeing him on TV all the time talking about things that I don't care about." Chavez is known for giving passionate – and long – public speeches.

The size of the rally emboldened opposition supporters to make exaggerated claims. "The only way Capriles could lose would be if there is fraud," Santana said.

Most polls tell a different story. Public opinion compiled by Consultores 30.11, showed 57.2 per cent of voters backing Chavez and just 37.5 per cent backing Capriles.

Hinterlaces, another firm, released a survey on Wednesday showing 50 per cent of voters backing Chavez and 34 per cent supporting for Capriles. About 16 per cent were undecided.

One survey, released on Wednesday by Consultores 21, showed Capriles leading Chavez by 0.8 percentage points, although this result was within the poll's margin of error.

At the rally, opposition supporters spoke frequently about fears of fraud and intimidation. It is true that two opposition supporters were recently killed at a rally in another city, stoking fear of violence among Chavez opponents. But most observers believe the vote will be free and fair.

"Of the 92 elections that we've monitored, I would say the election process in Venezuela is the best in the world," former US President Jimmy Carter, who monitors international elections with the centre which bears his name, said recently.

Most people at the demonstration seemed to have hated Chavez since he first won office. The country is notoriously polarised and whoever wins on October 7 will be facing an exceptionally divided electorate.

Supporters of Chavez are expected to hold a massive rally of their own on Thursday.
_______________________________

Venezuelan Barrios Vote for Chavez and Participatory Democracy
Real News Network. September 30, 2012

VOICEOVER: This is La Vega, one of the many barrios, or poor neighborhoods, positioned precariously on the sloping hills of the Venezuelan capital, Caracas.

DAVID DOUGHERTY, CARACAS, VENEZUELA: Like in many urban settlements in Latin America, barrios like La Vega were built from the ground up, mostly by the residents themselves, in the absence of the state. People are proud of the communities they have built, but often encounter problems with basic infrastructure that can make life difficult, and at times dangerous.

VOICEOVER: Areas like this section of La Vega called Carretera Negra, or Black Highway, are susceptible to frequent flooding and landslides during heavy rains. Residents had petitioned previous governments for decades to build a proper drainage system to address the problem, which often left homes flooded or inaccessible. Now community residents are almost done with the construction of a drainage system along the side of the road, one of the latest examples of a series of projects proposed and executed by their consejo comunal, or communal council. The communal councils are an initiative of president Hugo Chavez’s government that have grown in Venezuela, described as a new model of participatory democracy. They involve the formation of self-organized neighborhood organizations comprised of residents from the community who propose and vote on development projects and public policies, which they then execute themselves utilizing resources distributed by the state. Alexis Rojas is active in the Carretera Negra communal council and has helped in the construction of the new water drainage system.

ALEXIS ROJAS, COMMUNAL COUNCIL PARTICIPANT, LA VEGA: Here we have seen how not only does the area looks nicer but now there is also a system of water collection that runs the length of the road in the area of our communal council, this has improved our quality of life, water doesn’t leak into the houses now and it avoids the possibilities of landslides…today with this new popular organization we now rely on ourselves the citizens to make decisions in the public policies that do or don’t affect us… here we see behind me that the people from the community are the ones who do the work, and here we are exercising this form of community labor.

VOICEOVER: President Hugo Chavez’s leadership style has been described by critics as authoritarian and top-down oriented, raising questions about who really makes decisions in the communal council model. But many participants like lifelong resident and community organizer of La Vega Freddy Mendoza say that the communal councils constitute a distinct development model that has helped to encourage Venezuela’s poor to lead development initiatives in their communities through processes of self-organization and participatory democracy, addressing decades of neglect from previous governments.

FREDDY MENDOZA, COMMUNAL COUNCIL PARTICIPANT, LA VEGA: Any citizen from any social class can access and form a communal council or commune, they have the right and the duty to participate, this is what we are seeing in Venezuela, the boom of the communal councils in the barrios has come about because we, the poor, were previously not allowed to participate during the governments of the Fourth Republic…it would rain blows on us, from all directions, for us to get a stairwell built we had to endure the blows, for us to get a road built we had to endure the blows, for us to get a good work contract, we had to endure the blows, at the point of police batons, machetes, and teargas. Today we have the organizational instruments, we have empowering laws, like the laws of the communes and communal councils and others,

VOICEOVER: Another example of a communal council project carried out in La Vega is the establishment of a public computer and technological information center in an extra room in the Mendoza family’s home as part of a state’s “infocentro” program, where people can access the Internet, attend computer education workshops, and produce documentaries and community news reports using video editing software. Women constitute the majority of participants in communal council assemblies and elected committee posts, standing at around 60 percent. Thais Rojas of Carretera Negra says the communal councils are empowering women to play a previously unheard of role in public decision-making processes.

THAIS ROJAS, COMMUNAL COUNCIL PARTICIPANT, LA VEGA: Before the only ones who made decisions were the men, why the men? because of the same machista culture in the country that still exists today that said that men were the only ones capable of making decisions…the women see in the communal councils the opportunity to get to know everything they are capable of achieving, because of this the woman has come out of the house, out of the role of only taking care of the children, in order to integrate herself into the council and struggle against all the problems facing her community.

VOICEOVER: The communal councils have been described as the popular motors of the Bolivarian Revolution and Venezuela’s 21st Century Socialism, but they have not grown without their tensions. Some commentators like Venezuelan sociologist Edgardo Lander are critical of a relationship that has developed between the communal councils and the state that he describes as clientelistic.

EDGARDO LANDER, SOCIOLOGIST, CENTRAL UNIVERSITY OF VENEZUELA: We are talking about tensions and contradictions; I think the dominant tendency is a clientelistic relationship, where the state and party structures impose a certain type of uniform logic on the popular sectors, and that this undermines the possibility of autonomy. This is not to say that the struggle for autonomy and self-organization does not exist, and that it does not also exist in part as a consequence of the public policy of this government, because the public policy has gestated, driven, and promoted organizational forms and the people are taking these organizational forms and appropriating them and doing things with them, so it’s not a question of either/or, but it could be said that there does exist a strong tension.

VOICEOVER: Carretera Negra resident and communal council member Freddy Mendoza says there have arisen cases of corruption in some of the councils, and that it is primarily up to community residents themselves, and not just the state, to resolve conflicts and contradictions as they continue developing their new model of participatory democracy.

FREDDY MENDOZA, COMMUNAL COUNCIL PARTICIPANT, LA VEGA: There are cases where the communal councils are taken over by one or two people, this is a continuation of a system based on representation, not participation, there have been communal councils where they are handed the resources and they simply disappear with the money and take the resources, or cases where they haven’t built the project that the resources were destined for… but these are cultural facts, ethical and moral facts, that have still not ceased to impose themselves on our political consciousness as the poor, this is a part of our political struggle, the process is not over after we vote for Chavez, the process is not over when we obtain the solution to a problem in the barrio, there must be a constant discussion and learning process, and reflection, on the role that each of us are playing within this process that must flow into a revolution, establishing a distinct system of production, organization and participation that is participatory democracy, and so on.

VOICEOVER: Opposition presidential candidate Henrique Capriles Radonski has stated that the communal councils have become overly politicized, and has proposed legislation seeking decentralization. A leaked document allegedly outlining Capriles’ economic policy in the event of a victory in the October 7th elections includes a plan to gradually reduce the transfer of state resources to communal councils for development projects.

DAVID DOUGHERTY, CARACAS, VENEZUELA: With elections now less than 2 weeks away, campaigning efforts have heated up in Chavez stronghold barrios like La Vega, where community residents have pledged to defend the model of participatory democracy that is radically reshaping power relations and community development for the Venezuelan poor.
_______________________________

2 Supporters of a Challenger Are Killed as Venezuela’s Election Nears
WILLIAM NEUMAN. New York Times. September 30, 2012

CARACAS, Venezuela — At least two supporters of the opposition candidate in Venezuela’s presidential election were shot to death on Saturday, raising tensions as the campaign enters its final week.

Opposition officials said the two were shot in a confrontation with supporters of President Hugo Chávez, who is seeking re-election. The shooting occurred in Barinas, the state where Mr. Chávez was born and where he maintains strong support.

“Our people are tired of violence, of division, of confrontation,” said the opposition candidate, Henrique Capriles Radonski, at a huge march that filled the streets of Caracas on Sunday. “There was no reason that these three young people had to fall, a result of the intolerance of a few.”

He vowed to “defeat violence” in the election on Oct. 7.

Mr. Capriles referred to three deaths in his remarks, but the authorities have only reported that two people were killed. The reason for the discrepancy was not immediately clear.

Mr. Chávez, who has been in office for nearly 14 years, is seeking a new 6-year term. Mr. Capriles has mounted the strongest challenge to Mr. Chávez in years, tapping into widespread frustration with government inefficiency and corruption.

The country’s justice minister, Tareck El Aissami, said in a post on his Twitter account Sunday morning that a suspect had been arrested in connection with the shooting, but he did not provide further information. In comments on state television Saturday, he called the shooting an “isolated event.”

According to news reports, a group of Capriles supporters was about to begin a motorcade on Saturday afternoon when a group of Chávez supporters tried to block them. Some reports said the pro-Chávez group included local and state employees and officials. When one or more of the Capriles supporters approached them, someone on the Chávez side opened fire, according to the reports, which were based on interviews with Capriles campaign officials.

Julio César Reyes, a supporter of Mr. Capriles who is running for governor of Barinas, called the episode an ambush.

Mr. Capriles was campaigning in another state at the time of the shooting. He has made violence in the country a major issue in the campaign. Venezuela has one of the highest murder rates in the world, and is plagued by kidnappings and other crimes.

The two deaths on Saturday were the first to be attributed to campaign violence in this election, but there have been injuries in other confrontations involving shootings and rock throwing. It is common for Chávez supporters, often on motorcycles and sometimes carrying guns, to try to disrupt opposition events.

Mr. Chávez has repeatedly accused his opponents of planning acts of violence that would be carried out at the end of the campaign or in the aftermath of the election. But he also routinely uses aggressive language in his political speeches. At a rally in Guarenas, a city east of Caracas, on Saturday, he called Mr. Capriles a fascist and a liar and vowed to flatten him and give him a beating.

On Sunday, speaking at a large rally in the western state of Zulia, Mr. Chávez called the deaths regrettable, but did not say who was responsible.

“We will not permit the bourgeoisie to take Venezuela down the road of violence,” he said. “And we should not resort to provocations. No violence.”

At the Capriles rally in Caracas on Sunday, marchers said they thought the two killings would motivate voters. “It will give us more strength to get rid of him,” said Jonathon Cabrera, 37.

There was no official estimate of the crowd’s size on Sunday, but The Associated Press said it appeared to exceed 100,000.

María Eugenia Díaz contributed reporting.
_______________________________

Venezuelan youth could decide if Chavez remains in power
Juan Forero. Washington Post. September 30, 2012

CARACAS, Venezuela — Angie Rivas grew up in a “Chavista” household, one so supportive of President Hugo Chavez that family members participated in the populist leader’s huge rallies and voted with the masses as he fended off challengers in one election after another.

But Rivas, 25, is one of an increasing number of young Venezuelans who have grown tired of the rampant crime and moribund economy, the electrical blackouts and Chavez’s bombastic speeches. This group could be decisive in an election Sunday that will determine whether Chavez rules until the end of the decade.

“I was only 11 when Chavez got into power,” said Rivas, who is campaigning for opposition leader Henrique Capriles. “But there are holes in the roads, you cannot find a job, there is crime and problems with health care and education. That’s because of 14 years in which the government hasn’t done anything.”

In no other presidential election since Chavez’s first successful run in 1998 has he faced a tougher challenge — a vigorous 40-year-old former governor who, in a mad-dash campaign across hundreds of towns, has built a following by appealing to younger voters. Two recent polls put him roughly even with Chavez.

“Young people, undoubtedly, may hold the key that decides this election,” said Juan Mijares, a Capriles campaign coordinator who tracks polling data.

The two sides are fighting over an ever-expanding and politically energized segment of the population: the estimated 7.5 million Venezuelans between the ages of 18 and 30 who make up 40 percent of the electorate.

In previous elections, the young had veered toward the government’s pledges to transform the country. But the Chavez of today is in many ways a far different man from the one who won by 26 percentage points in 2006 over a stodgy politician named Manuel Rosales.

Now 58, Chavez is recovering from chemotherapy, radiation therapy and three operations that he said removed a cancerous tumor discovered 15 months ago in his pelvic area. That has left him bloated and moving gingerly.

‘We were invisible’

But political analysts say that Chavez is a ferocious campaigner and accomplished orator with a keen insight on how to reach voters, as evidenced by other polls that give him at least a 10-point lead over Capriles.

And he has, since the beginning of his political life, adeptly cultivated the young. He created a Ministry for Youth, appointed young people to important positions in a sprawling public sector and hugs his daughters in public.

“Viva the young people!” Chavez said in a speech before thousands of mostly young followers last week. “From the fight for independence until now, the best generation has been you, the young people of Venezuela of today! And so I say, fight hard to assure the future that will be in your hands.”

To be sure, the president draws support from a multitude of young people in poor districts who believe that his policies of nationalizing private industry and spending Venezuela’s oil income on social programs give them possibilities they would otherwise not have had.

“We were invisible, we were questioned, we were criminalized in the past,” said Ruben Loiza, 30, among the organizers of a group of artists, musicians and dancers supportive of the president. “We see Chavez, and we note how our families are thankful because those things that happened in the past are now taking place less and less.”

On a recent day, a determined group of the president’s young supporters flooded a busy street, passing out fliers and posters with his image to motorists stuck in traffic.

Taking a break from shouting slogans, Sony Sanchez, 27, rattled off various state programs — from subsidized markets to neighborhood medical care — that have benefited her family. She noted proudly that she is studying crisis management at a public university tied to the armed forces, for free.

“I think this government has given opportunity to young people to realize their dreams,” she said. “Before, a young person couldn’t be sure of having a place in a university.”

Still, that kind of solid support has dissipated as Venezuelan companies have closed and the economy has become ever more dependent on oil. The soaring homicide rate also is particularly worrisome to young people, since most of the victims and perpetrators are young men. Just Saturday, three Capriles campaign workers were killed in the rural state of Barinas in a confrontation with Chavez supporters, officials said.

After the trouncing Chavez gave Rosales six years ago, in the opposition’s darkest hour, a group of university students rose up when the president pulled the plug on an opposition TV network and tried to push through a constitutional change that would broaden his powers. They held sit-ins and hunger strikes and organized lively street protests.

Roberto Patiño, 23, who recently graduated from college, came of age during those protests. He said an increasing number of young people believe Chavez has become an autocrat whose policies are leading Venezuela to ruin.

“Capriles represents the leadership of a team in which we have a role and something to give, where we are needed to build the Venezuela we want,” Patiño said. “On the other side, there is a messianic leader, where Chavez is the only leader.”

Struggling to earn a living

Genny Zuniga, a sociologist who closely tracks economic data at the Catholic University in Caracas, the capital, said the country’s troubled economy and what she calls the poor prospects for young workers may drive younger voters to Capriles.

She said 42 percent of the working population is in the informal sector, often selling food or clothes on the street, uninsured and without a pension or other benefits. Studies show that half of young adults have only nine years of schooling.

“Here, to sell hamburgers at McDonald’s, they ask you for a high school degree,” Zuniga said.

But she said that government interventions in private business are making things worse, asphyxiating the economy and making it unable to generate high-quality jobs, and that many young Venezuelans are simply leaving the country.

“We don’t have a solid labor market,” she said, “nor do we have a working population that is improving itself.”

Concern about the future is what has made Angie Rivas put her stock in a future with Capriles.

“I think what Chavez had to give he’s given, and so I’m going to vote for progress,” she said. “A young person dreaming of the future with Chavez sees a future in another country. I think the Venezuelans deserve to dream about a future here in Venezuela.”
_______________________________

China launches 2nd satellite built for Venezuela
AP. September 30, 2012

CARACAS, Venezuela -- China has launched a second satellite built for Venezuela's government.

The remote sensing satellite soared into orbit atop a rocket from the northwestern Chinese province of Gansu.

The launch was shown live on Venezuelan TV on Friday night. Venezuelan President Hugo Chavez applauded as he watched alongside aides in Caracas, congratulating those who worked on the project.

Officials have said the satellite cost $140 million and will provide images for tasks such as mapping croplands, counter-drug efforts and monitoring floods.

The launch came more than a week ahead of Venezuela's Oct. 7 presidential election, in which Chavez is seeking another six-year term.

The satellite is named after Venezuelan independence hero Francisco de Miranda.

Venezuela's first satellite was named after independence leader Simon Bolivar. It was launched from China in 2008.

Western Andean Region [contents]

Rival Bolivia miners end tin and zinc dispute
BBC. September 30, 2012

Rival miners' groups in Bolivia have signed a deal with the government to end a dispute over control of rich tin and zinc deposits.

The dispute centred around the Colquiri mine, once operated by Swiss company Glencore, which was expropriated by the government in June.

Groups of public and private sector miners have clashed over who should run the mine ever since.

Earlier this month, the clashes escalated, leaving one protester dead.

The miner died when rival groups threw dynamite charges at each other in street battles in the centre of La Paz.

Months of marches and protests over the mine have paralysed parts of Bolivia for days at a time, cutting off access routes to the seat of the government.

Bolivia's Government Minister, Carlos Romero, said he was pleased that the two groups had finally reached a compromise.

"We are signing an agreement that I think is historic, because it's ending one of the most significant and complicated conflicts that we've had to deal with in the last few years," he said.

The Rosario vein at the Colquiri mine, located some 160km (100 miles) south of La Paz, will now be split into seven smaller sections, and miners from both sides will be able to exploit them for minerals.

Thousands are employed by the mining sector in Bolivia and the country depends heavily on exporting natural resources.
_______________________________

Chevron seeks email logs in Ecuador lawsuit
David R. Baker. San Francisco Chronicle. September 28, 2012

SAN FRANCISCO - As part of a long-running lawsuit in Ecuador, Chevron Corp. has sent subpoenas to Google, Microsoft and Yahoo seeking email logs and computer usage data for 101 email addresses, at least one of which belongs to someone not involved in the case.

The subpoenas, served this month, are Chevron's latest effort to prove that a $19 billion judgment against the oil company in Ecuador was the result of fraud. An Ecuadoran judge last year ruled that Chevron should pay to clean up a portion of the Amazon rain forest where Texaco, bought by Chevron in 2001, used to drill for crude.

Chevron has demanded that the three Internet companies turn over nine years' worth of detailed online information involving the email addresses of people who traded messages with the legal team suing Chevron.

The opposing lawyers, however, insist that some of the addresses belong to former interns no longer working on the case. Other addresses belong to people who have expressed an interest in the lawsuit but were never involved in it, said Karen Hinton, spokeswoman for the lawyers suing Chevron.

"It is clear that Chevron is engaged in a coordinated scheme to invade the privacy of dozens of people who have tried to hold the company accountable for environmental crimes, or who just simply wanted information about the case," she said.

The latter category includes an Australian law professor and blogger who has been critical of Chevron's handling of the lawsuit. Kevin Jon Heller, a senior lecturer at Melbourne Law School, insists that he was never involved in the case and traded only two emails with one of the plaintiffs' lawyers, Steven Donziger.

"Tactics like this need to be exposed and resisted, no matter who uses them or whom they target," Heller wrote in a post on the blog Opinio Juris.

Heller contacted the American Civil Liberties Union, which then called Chevron's lawyers at the firm of Gibson, Dunn & Crutcher. After several discussions, Chevron dropped its request for his data.

Chevron spokesman Kent Robertson said the company is trying to find out whether some of the email addresses actually belong to key figures in the case, including the opposing side's lawyers and a court-appointed expert whom Chevron accuses of fraud. Some of the participants, he said, have set up multiple email accounts, and tracing the communication among them could help the company prove its contention that the lawsuit is nothing more than an elaborate extortion scheme.

In Heller's case, Chevron dropped its demand for his information once the company was satisfied that his Gmail address was indeed his and that he had no involvement in the case.

Chevron has already persuaded several U.S. judges to give it access to many of the opposing lawyers' emails, memos - and even Donziger's own journal. The company also obtained outtakes from a documentary movie about the lawsuit.

A Google spokeswoman said the search company complies with valid legal requests, although it will try to narrow any requests that the company considers too broad.

Microsoft declined to comment for this story, and Yahoo did not return calls seeking comment.

"This subpoena is a really good example of why rules need to be put in place to protect our private and sensitive digital information," said Aden Fine, a senior staff attorney at the ACLU who worked with Heller.
_______________________________

Peru's ailing Fujimori to ask Humala for pardon
Reuters. September 30, 2012

(Reuters) - Former Peruvian President Alberto Fujimori, in prison for corruption and human rights crimes, is in poor health because of oral cancer and will ask President Ollanta Humala for a humanitarian pardon, his daughter said on Friday.

A humanitarian pardon, which could be granted after a series of medical and judicial reviews, might allow Humala to gain support in Congress from Fujimori's right-wing party and solidify a working majority for the ruling Gana Peru party.

But a pardon would anger Peruvians on the left who tried for years to unseat Fujimori, rallied to put him on trial after he stepped down, and who remember Humala as the young army officer who stood up to Fujimori and publicly demanded he resign.

Some sceptics have said a pardon might carry far-reaching political implications by eventually paving the way for Humala to ask Congress to change the constitution to allow his ambitious and telegenic wife, Nadine Herrera, to run for office in 2016, when he cannot run for a second term.

Fujimori's authoritarian government collapsed in 2000 after a decade in power. He was extradited to Peru from Chile in 2007 and later sentenced in a series of trials to 25 years in prison for theft and using death squads to crack down on insurgents.

On Monday the Inter-American Court of Human Rights told Peru to annul a July ruling by its Supreme Court that downgraded crimes committed by the death squads and which Fujimori's lawyers hoped to use to win an early release for their client. The setback dealt by the international court prompted Fujimori's family to say on Friday they would ask for a pardon.

Now 74, Fujimori has cancer in his mouth and is depressed, his family and lawyer say. Critics say prisoners who are much sicker don't receive pardons.

Humala has at times appeared willing to grant a pardon, though some of his aides clearly oppose one.

"We hope there is a change in attitude on the part of people who speak for the government and that this request be evaluated on humanitarian, not political, grounds," said Fujimori's daughter, Keiko Fujimori, a prominent member of Congress. She said the request for a pardon would be filed in the coming days.

Fujimori was credited for slaying hyperinflation and opening Peru's economy to trade and foreign investment, enabling it to become one of the fastest-growing in Latin America.

He also militarily defeated the Maoist Shining Path insurgency, but his authoritarian style and widespread corruption turned Peruvians against him, and he fled to Japan in 2000.

(Reporting By Terry Wade; editing by Philip Barbara)
_______________________________

Peru court reverses sentence reduction in 1991 massacre
AFP. September 29, 2012

Peru's Supreme Court has rescinded a decision to reduce prison sentences meted out to perpetrators of a 1991 massacre, bowing to an order by Inter-American Court of Human Rights, the chief justice said Friday. The high court's ruling on July 20 had reduced the prison sentences of former president Alberto Fujimori's top intelligence official, Vladimir Montesinos, and other senior military officials linked to the massacre.

They had been found guilty of crimes against humanity in the killing of 15 people, including a minor, in a Lima neighbourhood in November 1991 on suspicion of belonging to the Shining Path guerrilla group. In reducing their sentences, the Supreme Court reclassified the massacre to a crime against human rights, drawing an implicit rebuke from the Inter-American Court of Human Rights, which on Monday ordered the Peruvian court to reverse itself.

"We are attentive to and respectful of the international order," chief justice Cesar San Martin told RPP radio. "The sentence in question is without effect, has no juridical value or implication. It's definitive, unappealable, unobjectionable. There is nothing to do," San Martin said.

Mexico, Central America and Caribbean [contents]

Mexican congress in heated debate on labor reform
MARK STEVENSON. AP. September 29, 2012

MEXICO CITY -- Leftist legislators mounted a heated but largely fruitless battle in Mexico's lower house of congress Friday trying to block the passage of legislation that would loosen the country's 1970's-era labor laws.

The measure originally would have democratized Mexico's autocratic unions, but those clauses were largely watered down or left out in the version put to a vote on the floor of congress.

Congress voted to approve the general precepts of the bill by 351 votes to 130, but some of the most hotly contested points had to be voted on one by one. Almost all of the disputed points discussed were being approved as debate extended late into the night. With the end of voting, the measure would go to the Senate for consideration.

What angered the left the most are provisions that would allow part-time work, hourly wages, probationary and training periods, and outsourcing of jobs. Supporters say that will give business more flexibility and encourage hiring, but the opposition Democratic Revolution Party (PRD) said it would create low-wage, temporary jobs with few or no benefits.

The bill weakens seniority provisions and makes it easier to fire employees.

Currently, most salaried Mexican workers are paid by the day, based on a 5 1/2-day work week. Mexican workers earn as little as 60 pesos ($5) a day but have long counted on health, housing and severance benefits to compensate somewhat for their low wages. About one-fifth of salaried workers in Mexico are unionized.

The bill's supporters noted that current regulations allow outsourcing and pay by the hour, and that the reforms seek to better regulate those practices.

Legislators from the leftist PRD and other smaller parties rushed the speaker's platform at one point, standing in ranks before the podium with banners calling the legislation a betrayal of workers' rights.

The lawmakers later left the podium, having forced congressional leaders into leading the session from a spectators' gallery for some time.

Advocates say the reform will help Mexico create the million new jobs each year needed for young people and migrants returning from the United States.

Some critics of the legislation have complained that President-elect Enrique Pena Nieto's Institutional Revolutionary Party, the PRI, stripped out requirements for external audits of union finances and secret ballots for union elections. Those were part of the original bill submitted by outgoing President Felipe Calderon.

Pena Nieto, who takes office Dec. 1, supports loosening labor laws, but the PRI counts some of Mexico's most antiquated, autocratic unions among its strongest supporters, leading to speculation the old guard pressured the party to leave out the union controls. That would weaken Pena Nieto's claims that the PRI has left behind the political favoritism and corruption that marked its 71 years of repressive rule, from 1929 to 2000.

Mexican unions are so undemocratic that, when opening new factories, employers sometimes select a docile union for the new facility, and the first workers enter with a contract already signed behind their backs. Many workers don't even know the name of the union that supposedly represents them, and takes their dues.
_______________________________

Hourly wage in Mexico? Union members express fears of legislation
Los Angeles Times. September 30, 2012

MEXICO CITY -- Mexico's lower house of Congress has passed a major labor-reform law -- the first changes in employment regulations in Mexico since 1970 -- that would alter the way bosses and employees interact before, during and after a job.

For organized workers like Antonieta Torres, a primly dressed 44-year-old government office assistant wearing eyeglasses, the law spells uncertainty.

"It's possible that there could be more jobs, but at miserable wages, with exploitation of workers," Torres said during a large union rally. "It would hurt all of us."

The outgoing administration of President Felipe Calderon, which succeeded in passing the bill with help from the party of incoming President-elect Enrique Peña Nieto, said the law would boost job rolls and competition in the labor market.

For union members, the measure -- which is now on its way to Mexico's Senate -- would strip workers of what they called few relative benefits they enjoy under existing regulations, which they argue favor employers and large companies anyway.

The reforms would permit bosses to hire workers for trial periods and to base promotions on productivity, not seniority. The law also would ease the firing process and permits hourly wages, instead of the day-wage of existing law.

The hourly-wage portion of the new law seemed to crystallize the complaints for Torres and throngs of organized workers and professionals who were rallying on Thursday outside the lower house, the Chamber of Deputies, ahead of the vote. If anything, it reminded union members how little workers make in Mexico's economy.

Minimum wage in Mexico was raised 4.2% this year to 62.33 pesos per day, in the highest of three region-based brackets. For an eight-hour day, that comes to a grim-looking 7.79 pesos per hour -- or about 60 cents.

The measure would not alter the daily minimum wage, which is set by Mexico's Labor Ministry. But opponents fear that employers will use some workers for only a few hours a day and pay them at the hourly rate.

"They pay us so low, and they would pay us even lower by the hour," said Torres, a member of the telephone workers union.

Torres stood among members of unions actively opposed to the bill before it passed early Saturday --telephone workers, jobless electrical workers, and former pilots and flight attendants of the defunct Mexicana airline.

"What do you mean we want competition?" asked Juan Jose Reyes, 52, an unemployed electrical worker since 2009, when the Calderon administration disbanded and replaced the Luz y Fuerza utility.

"If there is no education, no work, and thus no money, so what are we competing with?" Reyes said. "It's like going to war without a weapon."

These union members' impassioned opposition to the law pitted them against other larger unions more beholden to political deals tied to elections.

The Institutional Revolutionary Party (PRI), which is set to return to Mexico's executive branch under Peña Nieto and racked up seats in Congress in the July 1 election, was opposed to the provisions of the Calderon reform that would seek transparency in unions' internal elections.

The major unions, such as the national teachers union led by the feared leader Elba Esther Gordillo, are widely regarded as corrupt, wasteful, and often in electoral alliances with the PRI.

In the revision process for the reform bill last week, those union-transparency portions were in effect removed. The law passed just before 4 a.m. Saturday after a divisive and often dramatic debate in the chamber. It must still pass the Senate before being enacted.

Leftist-coalition legislators called the bill "treason" and "occupied" the chamber's dais, forcing the president of the lower house to conduct some of the debate from a tiered balcony.

But for all their protesting, the left could do little against the majority posed by the PRI and Calderon's right-leaning National Action Party. The bill passed with 346 votes in favor and 60 against, plus one abstention.
_______________________________

Plan for Charter City to Fight Honduras Poverty Loses Its Initiator
ELISABETH MALKIN. New York Times. September 30, 2012

MEXICO CITY — Paul Romer is a respected economist with an unconventional plan to lift people out of poverty. And in Honduras, he thought he had found a government eager to put his ideas into practice.

What if you simply sweep aside the corruption, the self-interested elites, and the distorted economic rules that stifle growth in many poor countries and set up a brand new city with its own law and governance?

The charter city, as Mr. Romer calls it, would be administered by countries that have developed strong institutions and rule of law. If it sounds crazy, think of Hong Kong.

Once Honduras signed on and its Congress passed a law at the beginning of 2011 to start the process, the concept moved from big idea to a tentative possibility. Stories followed in The Economist, The Wall Street Journal and The New York Times Magazine.

But now, Mr. Romer, an expert on economic growth, is out of his own project, tripped up by the sort of opaque decision making that his plan was supposed to change.

An internal contradiction in the theory is playing out: To set up a new city with clear new rules, you must first deal with governments that are trapped in the old ones.

“I do feel disappointed on behalf of the people I have gotten to know,” said Mr. Romer, an economist at New York University’s Stern School of Business and the director of its Urbanization Project. “The Hondurans who hoped this would be a way to escape from business as usual.”

The tipping point came with the announcement a few weeks ago that the Honduran agency set up to oversee the project had signed a memorandum of understanding with its first investor group.

The news came as surprise to Mr. Romer. He believed that a temporary transparency commission he had formed with a group of well-known experts should have been consulted. He withdrew from the project.

The law setting up Honduras’s experiment in a charter city, a special development region, or RED in its Spanish initials, creates flexibility that promotes innovations, but requires strict disclosure along the way, Mr. Romer said. “The one absolute principle is a commitment to transparency,” he said.

Octavio Sánchez, the chief of staff to President Porfirio Lobo of Honduras and the government’s point person for the project, agreed that a transparency commission with foreigners on it would be essential once all the laws were in place. “We would love him to be there,” he said of Mr. Romer. “Because he really believes in this.”

The investor group is led by Michael Strong, an activist who has worked in the past with libertarians like John Mackey, the founder of Whole Foods. He promises that his investors include Silicon Valley entrepreneurs and Central American investors, but when pressed for details, named only one Guatemalan businessman.

With $15 million on hand, he said, the group will begin with a small pilot project to build infrastructure and is already talking to prospective tenants.

Mr. Strong also said he had plans in the future to build low-cost housing and set up schools, but he admitted that “A lot of things we don’t know until the RED government goes up.”

With so few details made public, even the normally pro-government newspapers in Honduras have begun to question whether there is any real money behind the project.

Opponents on the left have been filing challenges with the Honduran Supreme Court against the charter cities plan. The news of the investment deal brought more.

According to Mr. Strong and others involved in the project, including Mark Klugmann, an American consultant who is working with Mr. Sánchez, the transparency board never legally existed. Mr. Sánchez agreed, although he had never disputed the existence of the board in the past.

Mr. Romer said that President Lobo signed the decree in his presence in December. But he acknowledged that the board was on tenuous legal footing because of the challenges in the Supreme Court. The decree was never published.

Indeed, the challenges have held up other parts of the plan, like a bill in Congress to define where the city would be. (Mr. Strong is moving ahead with options to buy land on the Caribbean coast near Puerto Cortés anyway.)

Nobody disputes that impoverished, violent Honduras needs some kind of shock therapy. “You put the bucket list of everything that needs to be changed — you do all the things at once in a small place,” Mr. Sánchez said. “We needed to create the right conditions in the midst of political turbulence.”

Mr. Sánchez, 37, who has a law degree from Harvard, had already been thinking for a decade about many of the same ideas as Mr. Romer, and was working with Mr. Klugmann on ideas for autonomous development zones when a friend gave him a copy of a video talk by Mr. Romer. “The possibility of a foreign country ruling, that didn’t fit. But everything else fit,” he said.

The idea, Mr. Sánchez explained in a telephone interview, is to adopt ideas that have worked in other countries. A team from the government went to South Korea and Singapore. In the nation of Georgia, they found a model in Lazika, an instant city that the government has begun building that is inspired by the charter-city concept.

Mr. Strong has his own version of Mr. Romer’s relationship to the project. “When Sánchez finally saw Romer’s video talk, he saw that this was a high-profile source of external validation that could help push their ideas through,” he wrote in an e-mail. Mr. Romer’s project was “a marketing catalyst.”

Mr. Romer is now looking elsewhere.

“If it were easy to undertake social reform, it would have happened,” he said. “You just have to keep trying.”
_______________________________

Panama passes intellectual-property protection law that sets $100,000 administrative fines
AP. September 27, 2012

PANAMA CITY — Panama’s legislature has approved an intellectual-property law that would allow commerce officials to impose fines of up to $100,000 for copyright infringements without a trial or civil suit.

The legislation is meant to bring Panama into compliance with a U.S.-Panama free trade agreement approved in 2011. It must still be signed into law by Panama’s president.

Some civic groups and organizations representing audio-visual artists and musicians are criticizing the measure, saying it threatens free speech.

Other artists support the law, hoping it will cut down on pirated versions of their works.

Lawmakers passed the measure Wednesday night.

Latin America News Round-up October 1, 2012 Peru's Ailing Fujimori to Ask Humala for Pardon

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.

Latin America News Round-up
October 1, 2012
Peru's Ailing Fujimori to Ask Humala for Pardon

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.