Friday, March 31, 2006

Third Billionaires of the Americas Summit

Unlike traditional Summits this didn't offer the excitment of the demonstrations.

If you think that Anti-Summits are the last thing, you need to know that a group of Latin American magnates are taking the summit concept to a new level, with the introduction of a Billionaires of the Americas Summit.

Invitations for this event are exclusively extended to top regional moguls and their families. The summit includes guest speakers, roundtables and plenty of social activities.

The third edition just took place at the Alvear Palace Hotel in Buenos Aires. Former Spanish President Felipe Gonzalez was a guest speaker. Carlos Slim, Alejandro Bulgheroni and Jorge Gerdau entertained an audience of 200 with speeches on the private industry role. As expected they criticized the public sector and lambasted the evil of populism.

The summit’s first edition was hosted by Carlos Slim in Mexico City in 2003.

Brazil Goes XL

Brazil is now officially the largest Latin American economy in terms of US$ gross domestic product (GDP).

The Government’s Statistics Bureau (IBGE) reported a GDP of US$797 billion for 2005. This ranks Brazil as the 10th largest economy in the world followed by Russia at number 11 and Mexico at number 12. The dramatic GDP increase is due to a 13% appreciation of the real.

Other figures released by the IBGE:

· The Brazilian economy expanded by 2.3% in 2005.
· Per Capita GDP rose 0.8% in local currency but a staggering 30% in US dollars to US$4,326.
· Gross fixed investment in 2005 equaled 19.9% of GDP, a bit more than the 19.6% recorded in 2004.

Tuesday, March 28, 2006

Palocci Capitulates

Antonio Palocci achieved an impossible; he made of the left wing ruling party Partido dos Trabalhadores (PT) a regional model of financial prudence and orthodox economics. Indeed, the markets responded negatively to his resignation to the Brazilian Finance Ministry.

Palocci´s capitulation was triggered by a corruption scandal involving illegal party finance. He is to be replaced Guido Mantega, the current president of the State development bank (BNDES).

With Palocci out of sight PT radicals could gain influence and jeopardize the economic stability achieved by the current administration.

Presidential elections are around the corner. These scandals will tempt incumbent candidate, Luis Inacio Lula Da Silva to become more of a populist and short term planner. If he falls victim to the temptation, Brazil, the largest South American economy will pay the consequences. There is nothing new under the sun.

Monday, March 27, 2006

Running Off

Colombia’s President Alvaro Uribe has lost six points in voter intention in a matter of eight months. Or at least that is what a survey commissioned by a series of Colombian media outlets and produced by Invamer Gallup says. Here go the numbers:

-Alvaro Uribe (Conservative Party): 64.1%
-Horacio Serpa (Liberal Party): 19.6%
-Carlos Gaviria (Former President, Democratic Independent Pole): 9.9%

The question is not whether Uribe will win, but when. A first round victory, a given fact eight months ago, is looking less likely.

Uribe is a free marketer with close ties to the US.

Preval Goes to Washington

Newly Elected Haitian President Rene Preval is visiting the States this week.

The first stop is New York City to meet with Kofi Annnan.

The second stop is Washington to meet a group of Congressmen and then pay a visit to President Bush. IADB, IMF, OAS and World Bank meetings will follow.

Preval has been characterized as an ally of ousted leader Jean-Bertrand Aristide. Aristide’s relationship with the US was so bad he reckons he was deposed by a US sponsored coup.

Preval’s visit is an oportunity for the US to start in good terms with the new Haitian administration. With so little regional allies left this is not a chance to miss.

Friday, March 24, 2006

Presidential Infallibility

Hugo Chavez wants to meet the Pope and is moving heaven and earth to do it.

His envoy to the Vatican, Iván Rincón Urdaneta, recently said that an audience could happen as early as spring time.

The Catholic church is the most trusted institution in Venezuela, with trustworthiness ratings consistently hitting 80%. It is also a pebble in Chavez’s shoes.

During a recent mass commemorating the day of the Divina Pastora virgin, one of the most revered catholic icons in Venezuela, Cardinal Castillo Lara lambasted the government in very unusual terms. He referred to Chavez as an “arbitrary despot” leading a “rotten political plan” to the instauration of a “dictatorship”. Castillo Lara got to the point of comparing Venezuela under Chavez with a "tragic peast lived 150 years ago".

An audience with the Pope would neutralize this kind of attacks and capitalize Venezuelans devotion.

Besides, Chavez wants to reform the constitution so he can stay in power for life, like the Pope. This could be an oportunity to also learn about canonic law and that peculiar concept: Papal infallibility.

Wednesday, March 22, 2006

Partisan Oil

Leftists cut better deals than their right-wing counterparts, providing that they partner with Venezuela´s President Hugo Chavez.

Salvadorian party Farabundo Marti National Liberation Front (FMLN)announced a deal with the Venezuelan government to buy refined fuel at preferential terms.

Under the agreement, cities managed by FMLN Majors will receive up to 100 thousand barrels of refined fuel at a discounted price of US$6 m, to be paid under favorable conditions: a first installment for 60% of the bill within 90 days from delivery, and a second in species (“agricultural products and other locally made goods”, if we are to believe the Mayor of Soyapango as quoted by Al Jazeera).

Salvador’s President, Antonio Saca, reacted to the news with skepticism, saying that the FMLN doesn’t count with the infrastructure to distribute the fuel.

This is the latest of a series of astute deals masterminded by Hugo Chavez, using oil as a political and public relations weapon.

The FMLN is a former guerrilla movement that became a political party after a peace treaty signed in the early nineties.

Tuesday, March 21, 2006

Low Morale

The morale of the Brazilian army is low, judging from a report by Leonel Rocha published in Correio Brazilense. The recent suicides of two Generals, Urano Bacelar (Commander of the peacekeeping force in Haiti) and Luiz Alfredo Jeffe (Minas Gerais State army chief) have added to unprecedented levels of frustration in the military, due to low pay and lack of equipment.

“In the last six years, more than 600 have left the army, navy and air force, trading the uniform for a career in another sector of public service or in private enterprise. In just the first two months of this year, there were around 40 discharges. Nearly all have left the profession earlier than they should have in order to supplement their retirement by working in another area in the reserves,” reports Rocha.

This trend could affect the Brazilian dream of gaining a seat in the UN Security Council.

Friends Again

Cuba and Panama have agreed to rebuild the diplomatic ties severed in 2004, after the Panamanian government pardoned four anti-Castro activists, including Luis Posada Carriles, who is also wanted by Venezuela for allegedly bombing a 1976 airliner.

The newly elected President of Panama, Martin Torrijos, has rebuilt relationships with the Cuban government in a matter of months. This move will increase the regional influence of Cuba.

Humala Gains Momentum

OIlanta Humala rose the the first place in the Peruvian presidential race 20 days before the election. Here are the numbers produced by Apoyo Opinión y Mercado:
-Ollanta Humala: 32% (3 points more than a week earlier)
-Lourdes Flores: 28% (3 points less than a week earlier)
-Alan Garcia: 21% (1 point less than a week ealier)

In a runoff Humala and Flores would score 50%, however Humala candidacy is clearly gaining momentum whereas Flores's is losing ground.

Media have characterized Lourdes Flores as a free marketer, Ollanta Humala as a leftist with close ties to Venezuela’s Chavez and Alan Garcia as an ineffectual but charismatic former president.

Wednesday, March 15, 2006

On Brink of Crisis

Ecuador’s Interior Minister Alfredo Castillo resigned after making controversial comments in support of mounting social unrest. A Castillo quote by Prensa Latina reads: "Amid all this chaos, the government has two choices: either join the nationwide silence that is imposed on all things, or simply quit".

Social unrest erupted after the negotiation of a free trade agreement with the US was announced by the executive. The protests have been led by indigenous groups calling for a referendum on the agreement. Protestors have blocked roads and demonstrated at the Presidential Palace.

Ecuador recently experienced two major oil industry strikes. Presidential elections are scheduled for October

The Contender

Brazil’s main opposition party, PSDB, has finally picked a contender for the presidential race: São Paulo Governor Geraldo Alckmin. He was nominated after Sao Paulo Mayor Jose Serra withdrew from the race. Alckmin, 53, is the current governor of São Paulo State. He studied but never practiced medicine, becoming instead a professional politician at age 19.

Alkmin has been depicted by media as a non charismatic but efficient free marketer. His campaign is expected to leverage a recent corruption case involving the ruling party (PT). Pre-nomination polls show him losing a runoff by 18 points to incumbent left-wing President Luiz Inacio Lula da Silva. Election Day is October 1 with an eventual second round scheduled for October 29.

Tuesday, March 14, 2006


A recent survey commissioned by Mexican newspaper El Universal shows leftist Luis Manuel Lopez Obrador with a 10 point lead over his two contenders, Ernesto Calderon from ruling party PAN and Roberto Madrazo from Partido Revolutionario Institucional (PRI).

These are the numbers:

- Andrés Manuel López Obrador (PRD): 42%
- Felipe Calderón Hinojosa (PAN): 32%
- Roberto Madrazo Pintado (PRI): 24%

And this is how the candidates reacted:

Lopez Obrador said it would be it very difficult for other candidates to reach him. Madrazo pointed out that the only day that counts is election day. A representative from Calderon´s party said he is sure
things will change from here to July.

Lopez Obrador´s victory would further shift the regional political balance to the left. Mexico is by far the largest Latin America economy. Election day is 02 July.

Monday, March 13, 2006

Sunken Submarines

There are two contradictory reports circulating about the sell of French arms to Venezuela.

The first one, published by Spanish newspaper El País, says that French defense company Thales will produce weapons for eight patrol ships Venezuela is buying from Spain. The French company would charge US$275 m for the weapons, says the clip.

The second report comes from Strategy Page website. It says that French President Jacques Chirac turned down a Venezuelan bid to acquire two Scorpene diesel submarines valued in excess of US$ 1b. “Chirac is trying to rebuild relations with the U.S., but there's also serious concern about Venezuela's unstable President Hugo Chavez. French investments in Venezuela have been among those "foreign" interests threatened with "nationalization" by the Chavez regime,” explains the website.

If Strategy Page analysis was right France wouldn’t sale any weapons at all. To me, the submarine story sounds like a PR bluff to divert the attention while cashing a few hundred million.

A Second Presidenta?

If the Peruvian Presidential run-off was today Lourdes Flores would become the second South American female president, says a poll produced by IMA firm. Flores would take 43.1% of the votes compared to 28.8% for Humala in a second round. If she was to face Alan García she would get 40.9% against 28.4%.

As for the first round, here are the figures released by IMA:

-Lourdes Flores: 26.9% (-0.3% less than January)
-Ollanta Humala: 21.6% (6.9% more than January)
-Alan García: 20.1% (2% more than January)

Elections are scheduled for April 09. Current trends indicate a narrow lead by Flores as the most likely outcome.

Media have characterized Lourdes Flores as a free marketer, Ollanta Humala as a leftist with close ties to Venezuela’s Chavez and Alan Garcia as an ineffectual but charismatic former president.


South America’s first female president, Michel Bachelet, inaugurated with the support of 65,3% of the Chilean population, says a poll published and produced by national newspaper El Mercurio. That is almost 12 points more than the 53,5% of votes that took her to the presidency. The survey also found that more than 85% of Chileans expect her to perform as well or better than her predecessor, Ricardo Lagos.

Saturday, March 11, 2006

Socialist Class

Fidel got a new toy, a US$ 55m luxury aircraft with drinks bar, leather seats, ergonomic furniture, DVD player, armored cockpit and even a special compartment to safely detonate bombs.

Cuba has close to 11.5 million inhabitants, so the individual contribution for the dictatorial jet comes to roughly US$ 5 per citizen.

No need to worry about inequality. Fidel got a second made in Russia Ilyushin jet to ferry workers to and from Venezuela, for a total bill of US$110m, increasing the individual contribution to US$ 10 a head.

Exemplary Punishment

Since Hugo Chavez took over the presidency not a single Venezuelan had been charged for corruption. For seven years Government Prosecutors focused exclusively on political cases targeting opposition forces. Not even after President Chavez declared “Fight to Death to Corruption” in 2004 the Venezuelan courts went after the first Bolivarian corrupt.

That is why a recent announcement by a National Assembly Commission investigating a high profile corruption comes as a surprise, and a nice one for that matter. Nineteen people have been declared politically responsible for stealing close to US$ 1.5m from a publicly funded sugar can mill. This means that they won’t be able to hold a public office for the up to fifteen years. Charged parties include a former Minister and a General.

It is a good thing that finally the Chavez’s administration is moving from rhetoric to practice in this front. Still remains to be seen if the punishment will go beyond the symbolic and the guilty parties will spend time behind bars.

Thursday, March 09, 2006

Good for Me, Bad for You

Venezuela’s President, Hugo Chavez, has accused SUMATE, an opossition linked vote advocacy NGO, of treason for receiving US funds trough the National Endowment for Democracy. Indeed, SUMATE is literally facing treason charges brought by Government prosecutors. Its leaders could face up to sixteen years behind bars.

On the other hand Nelson Bocaranda, a Venezuelan journalist, just published a list of US based organizations that have received Venezuela’s funds. It is long, and it’s mostly formed by NGOs politically active in the US. Here it goes:

“Alliance For Global Justice, All-African People's Revolutionary Party, Artist's Network of the Americas, BendCondega Friendship Project, Bolivarian Circle-Oregon, Bolivarian Circle-Washington, DC; Campaign for Labor Rights, Cimarrones Capstone, Howard University Committee in Solidarity with the People of El Salvador (Cispes), Cuba Solidarity New York, FMLN-MD, Freedom Road Socialist Organization, Fight Back, Friends of the Third World, George Washington Univ. Progressive Students Union, Global Exchange, Global Women's Strike, Gray Panthers of Metro Washington, DC; Green Party of the US: Peace Action Committee, Hands Off Venezuela (HOV), Hermandad Mexicana Latinoamericana/MAPA, Howard University Student Association, Interconnect, International Action Center, International Socialist Organization (ISO), Iranian Cultural Association Inc., Latin American Solidarity Coalition (LASC), Latin American Students Assn, University of District of Columbia; Malcolm X Grassroots Movement, New Orleans; Marin Interfaith Task Force on the Americas, Maryknoll Office for Global Concerns, Metro Justice, National Lawyers Guild, National Network on Cuba, Nicaragua Network, No War on Cuba Movement, Ocean Press, Pan-African Roots, People's Hurricane Relief Fund, Philadelphia Cuba Solidarity Coalition, Quixote Center/Quest for Peace, Rochester (NY) Committee on Latin America, Rosewood I.C. Foundation, School of the Americas Watch, US Cuba Sister City Association (PA) and Young Socialists.”

Nuclear Dilemma

Antonio Palocci, Brazil’s Finance Minister, denied claims given by his Science and Technology peer, Sergio Rezende, announcing a plan for the construction of up to seven nuclear power plants. But Palocci’s denial was not exactly definite. “There is absolutely no completed plan on this,” he said, adding that hydroelectric plants are cheaper and safer than nuclear reactors.

The scale of the project as announced by Rezende is unrealistic. Brazil has two active nuclear plants. A third one has been under construction for two decades. At that rhythm it would take the country about a century to hit Rezende’s number.

Wednesday, March 08, 2006

Pariah Nations

The 2005 State Department Human Rights Report is out. Here goes the latest Western Hemisphere pariah list:

Cuba is accused of committing "numerous, serious abuses" including the imprisonment of more than 300 political activists.

Haiti is signaled for retribution killings and orchestrated abuses.

Honduras and Nicaragua are criticized for corruption and impunity.

The strongest criticisms go to Venezuela, accused, among other things, of unlawful killings and torture.

As usual, a country is excluded from the report: the US itself.

Monday, March 06, 2006


Evo Morales’s popularity is going through the roof. A recent poll conducted by Apoyo Opinion y Mercado is giving him a 79% approval rating. That is 5 points more than the 74% recorded in January by the same pollster.

The newly elected Bolivian President is capitalizing his popularity to move ahead with two projects, a Constituent Assembly and a referendum on the setting up of autonomous regions. An electoral process is scheduled for June 02 mixing the referendum with the selection of assembly members.

Evo knows where he wants to go and is moving quickly. Only when the constitution is rewritten we will know how far to the left Evo's project is.

Saturday, March 04, 2006

The Mediator

Two interesting quotes from a recent interview The Economist made to Brazil’s President Luis Inácio Lula da Silva:

The first one is about Chavez and Bush: “Chavez is convinced that a coup attempt against him was organized to benefit American interests. President Bush doesn’t accept that. This will be resolved only if they talk”.

The second is dedicated to Evo Morales, but also applies to his suggestion of a meeting between Chavez and Bush: “Between theory and practice there is a gulf bigger than the Atlantic Ocean”.

Wednesday, March 01, 2006

The Enemies of My Friends

It's official, Colombian guerrillas would support Venezuela in the event of a US invasion:

“If there is an invasion by the US war hawks against the fraternal Venezuelan people, the FARC-EP would forcefully condemn it, and offer their unconditional solidarity with the Bolivarian process in the fatherland that saw the birth of our liberator. We are all united in Bolivar” said Revolutionary Armed Forces of Colombia (FARC) leader Raul Reyes to Anncol website.

A US invasion to Venezuela is, to say the least, very unlikely. With its current political capital the US administration couldn’t invade Lilliput. Bush’s approval rating is at 34%, and a recent survey shows that only 23% of US troops deployed in Irak believe they should stay until the job is done.

In a way, the prospect of a US military invasion to Venezuela is wishful thinking from the guerrillas: It gives meaning to their existence.