Wednesday, May 31, 2006

Venezuela to Mass Produce Kalashnikov Rifles

Venezuela is to become the first foreign country licensed to manufacture Russian AKs.

Chavez is finally moving to diversify Venezuela’s oil dependant economy and he has chosen no other than the lucrative business of arms production to do so. Or at least that is what he said during a recent press conference. This is the deal: Venezuela will partner with Russian weapons giant Rosoboronexport to manufacture its global best-seller product, the Kalishnikov rifle.

"The Russians are going to install a Kalashnikov rifle plant and a munitions factory,"…"So we can defend every street, every hill, every corner," a defiant Chavez was quoted by BBC.

AP checked with Rosoboronexport and the company “confirmed talks were ongoing, but declined to give any further details on when the plant could be constructed or what would be its production capacity”.

This arrangement is part of a deal with Rosoboronexport to acquire 100,000 AK-103 assault riffles. So far the AK production has not been licensed to a foreign country. The Kalishnikov rifle is arguably the most successful assault weapon ever to have entered the arms market; and then people dare to brand Chavez as anti-business.

Evo Morales Accuses U.S. of Assassination Attempt

Uribe has survived twelve attempts but hasn't got killing paranoia.

A Bolivian Presidency website carries the following text I took the liberty to translate to English:

“Escoma. 30 May. President Evo Morales accused the U.S. of organizing teams to chase and kill him but did not achieve their objective. He pointed out that conspiracy accusations made by his colleague Hugo Chávez are “not a lie”.

The president explained that he only learned recently about these unsuccessful attempts against his life.”

It strikes me that Chavez and Morales are constantly crying “assassination attempt” but not a single attack against them has been documented, whereas President Uribe, who is not in the habit of publicizing them, has survived twelve such attempts.

Thursday, May 25, 2006

PRI About to Implode

The Mexican Presidential campaign is about to enter its most critical moment: The collapse of the Institutional Revolutionary Party (PRI) candidacy and a consequent vote stampede.

Manuel Bartell, a PRI Senator, may have started its party implosion by calling PRI followers to support leftist candidate Andrés Manuel López Obrador (AMLO). If Bartell’s position prevails among PRI swinging voters AMLO will regain the lead he lost a month ago.

A recent poll commissioned by El Universal national newspaper and produced the first days of May gives Felipe Calderón, from ruling conservative party PAN, a fragile 4 point advantage. These are the numbers:

-Felipe Calderón (PAN): 39%
-Andrés Manuel López Obrador(PRD): 35%
-Roberto Madrazo (PRI): 21%

Once again the future of Mexico is in the hands of the party that ruled the country for more than seventy years and established what novelist Mario Vargas Llosa famously branded as “the perfect dictatorship”.

Election day is 02 July.

Monday, May 22, 2006

Venezuela’s Coup Not Set “By” Stone

It looked like Oliver Stone got a peculiar spokesperson to announce his new film venture: Hugo Chavez.

The Venezuelan president said during the last allocution of his Sunday program Aló President that Oliver Stone would join forces with British producer John Daly to film a movie about a 2002 Venezuela coup that briefly ousted him and was allegedly supported by the U.S. The information was, however, a lie.

Indeed, Oliver Stone rushed to deny Chavez's annnouncement: "Rumors that I am directing a film about the 2002 coup in Venezuela are untrue and unfounded," said the actual spokesperson of Stone.

Don't blame it on Chavez, Oliver Stone recently produced an apologetic film about his personal friend, perennial gerontocrant, Fidel Castro. It's just natural to wait anything from him.

High Oil Prices Could Trigger Caribbean Crisis

High energy prices could prompt political and economic crises in Caribbean countries, particularly in those juggling with financial imbalances.

Helena Hessel, a senior analyst with Standard and Poor's is quoted in a Caribbean Media Corporation story predicting a regional political and economic fallout: “Apart from the impact on the balance of payments, in a number of countries in the Caribbean, like Grenada, Belize and Jamaica, where socio-political issues are somewhat difficult, if gasolene prices continue to rise, the impact would be negative."

From Hessel’s point of view only two countries would be spared from such a trend: Surinam and Trinidad and Tobago. They both have sound finances.

A regional crisis would strengthen even more Hugo Chavez’s influence in the Caribbean.

Friday, May 19, 2006

The Bolivian 10

Evo Morales’ international policy is not random but carefully planed by a group of 10 people, states a report by Bolivian newspaper La Razón.

The team is led by Bolivia’s Vice-President Alvaro Garcia and also includes the ministers of the presidency, Juan Quintana, development, Carlos Villegas, foreign relations, David Choquehuanca, hydrocarbons, Andres Soliz as well as deputy ministers of international economic relations, Maria Luisa Ramos and governmental coordination, Hector Arce.

Movimiento Towards Socialism (MAS) leader German “Gory” Mueller is the “main operator, and the man closest to President Evo Morales’ personal entourage”.

Gory leads the “vanguard groups” with the help of Pablo Solon, who directs the Solon Foundation. Gory and Solon mainly focus on relations with European countries.

Evo Morales himself presides the group that meets before his international trips and helps setting the president’s agenda. Ministers are consulted about their areas of expertise and a “policy like and a position as chief executive” is then adopted.

Ministers interviewed by La Razon made it clear that “nothing has been left to chance" and also that “his statements have had a "clear objective" during Morales’ trips.

Morales has been accused by the Bolivian opposition of improvisation in the international front and of being manipulated by Castro and Chavez.

Tuesday, May 16, 2006

Brazilian Army: Chavez a “Destabilizing Element”

A story published by Claudio Dantas Sequeira in Correio Brazilense states that recent military situational papers brand Hugo Chavez as an “element destabilizing the continent”. The papers allegedly describe Bolivia as a “satellite of Venezuela” and consider “peace in South America” as “uncertain”. A fragment of Dantas’s story translated by the BBC Monitoring Services follows:

“According to them [Alleged military reports], Bolivia's decision to
nationalize its gas reserves by force - without Brazil outlining any action - is encouraging the Paraguayans to ask for a revision of the energy prices set in the Treaty of Itaipu”... “Chile is reportedly also shocked by Chavez's influence over Bolivia and Peru and has held consultations with the North Atlantic Treaty Alliance (NATO), of which it is an associate.”

Ecuador Under Ripple Effect

Following the footsteps of Bolivia, the Ecuadorian government canceled an operating contract with Occidental, a U.S. oil company, and took over its assets. Ecuador argued that Occidental breached its contract by transferring part of its concession to Canadian company Encana Corporation (ECA). Occidental, which has invested over a billion dollars Ecuador, denies any wrongdoing and is considering its legal options.

Ecuador is living a period of political instability. The country is negotiating a free trade agreement with the U.S. but its prospects have been badly hurt by this recent move. It recently experienced two major oil industry strikes. Presidential elections are scheduled for October

High commodity prices and a political shift to the left are boosting a regional wave of nationalizations and protectionism. Uruguay could be the next country in joining this trend by revising some of its energy export prices.

Monday, May 15, 2006

Zombies Return

Alan Garcia, Daniel Ortega and Alberto Fujimori have a lot in common. They failed as presidents but nevertheless, they are working on a come back.

The electorate’s short memory and the weakness of their country’s institutions make a return plausible. In some cases, such as Garcia’s, the come back is more than a possibility.

As if this was not enough now Argentina also has a zombie plotting a return.

In a recent interview to Chilean newspaper El Mercurio, Carlos Menem said that he will run for president in the 2007 electoral race.

Menem’s reelection looks impossible today. So did Garcia's two years ago.

Garotinho to the Bench, for Now

In Brazil the centrist Democratic Movement Party, or PMDB, voted against presenting a presidential candidate in October.

The decision was a defeat for Anthony Garothino, a former Rio de Janeiro governor with presidential aspirations. However, Garothino’s faction promised to try again next month during a party convention.

Garothino has consistently run as third in the polls. He is currently on a hunger strike to protest for what he calls political persecution by the media.

Observers consider President Lula chances to win in a first round would increase if Garothino doesn’t run.

Friday, May 12, 2006

Venezuelan Tyrant Stars Popular Video Game

Mercenaries 2, the updated version of a best-selling video game produced by Pandemic Studios comes with a peculiar narrative structure: “A power-hungry tyrant messes with Venezuela's oil supply, sparking an invasion that turns the country into a warzone,” the promotional website states. But there is no need to worry: “For you, international crisis is all upside: You are a mercenary, and you profit from chaos”.

Mercenaries 2 characters include Mattias Nilsson. “a prodigiously gifted mercenary who makes his way in the world solving other people's problems with the skillful application of force.”

Lula and Evo to Talk Over Breakfast

The presidents of Brazil and Bolivia will try to solve a recent feud during a breakfast scheduled this weekend in Vienna.

Brazil and Bolivia have been at odds since the nationalization of Bolivian gas. The crisis was intensified by recent comments made by Morales ruling out compensations for companies with seized assets, arguing that they were operating illegally in Bolivia.

Brazil's energy company Petrobras is heavily invested in Bolivia, a country that provides enoough gas to Brazil as to cause an energy crisis. President Lula is being heavily criticized by local media for his handling of this impasse.

Thursday, May 11, 2006

Veja Ridicules Lula

The latest issue of Veja (largest circulation magazine in Brazil with 1.2m), carries a cover picture of Lula with a boot print on his bottom alluding to Venezuela’s President Hugo Chavez recent actions in Bolivia.

The headlines reads: “That one hurt.”

The subtitle elaborates: "Lula took a break on his role of “great leader” of Latin America just to find himself as a courtesan of Venezuela’s Hugo Chavez, who plotted the robbery of Brazil’s assets in Bolivia.”

The lead line marks the tone of a highly critical story: “Hugo Chavez and his Bolivian puppet, Evo Morales, kicked Brazil’s rear end. Before doing so, both asked patriarch Fidel Castro to bless their plans. None of these guys had the delicacy of inviting the Panalto Palace tenant [Lula], who considered himself as a regional leader. Poor Lula, he was the last one in known that president Morales would take over Brazil’s properties in Bolivia and put at risk the supply of gas.”

Veja is arguably the most influential printed medium in Brazil.

Garcia Widens Lead

CPI, a Peruvian pollster, just published a survey giving a 23% to Alan Garcia in the presidential runoff. Here go the numbers:
-Alan Garcia: 61.4% of valid votes
-Ollanta Humala: 38.6% of valid votes

Other recent polls give Garcia a double digit lead namely:
-Apoyo gives him 57 against 43 (Published 05 May).
-Datum gives him 56 against 44 (Published 04 May).

Humala hasn’t been able to increase his popularity in the second round. The Garcia campaign has managed to link Humala to the Fujimori regime, rise doubts about his human right record and characterize him as a dictator in the making.

Judicial Scandal in Colombia

Radio Caracol reported the resignation of Jorge Noguera Cotes, former DAS (Administrative Department of Security) director, as consul in Milan, after being called for questioning by the General Prosecutor Office. Noguera Cotes is being investigated for alleged electoral fraud in 2002.

The alleged fraud would have favored three current senators from the political front of the paramilitary movement (Bloque Norte de las AUC).

In mid April Radio Caracol website quoted President Uribe characterizing Norega Cotes as a honest and transparent man who, however, should go to jail if proven guilty.

Tuesday, May 09, 2006

Lula “Uncomfortable” with Chavez

A quote from Brazil’s Foreign Affairs Minisiter, Celso Amorim’s, addressing congress and published by AFP:

“We have communicated to Chavez how uncomfortable we feel and also how uncomfortable President Lula feels with some of his actions”… “President Lula unequivocally expressed his unconformability to the point of saying that this [Chavez’s actions in Bolivia] is not only puting at risk the gas pipeline but also South America's integration”.

This is the first clear signal sent by the Brazilian administration of disgust with Venezuela.

Friday, May 05, 2006

Fox Says Not to Drugs

Mexican President, Vicente Fox, just sent back for revision a bill decriminalizing illegal drugs. He made clear, under his administration no illegal drug will be decriminilized.

Apparently the U.S. put pressure on the Mexican executive and convinced Fox of halting the proposal.

It is not clear if the Presidential spokesperson was on drugs when he said to the Financial Times: “No way. There hasn't been any [American] pressure."

Thursday, May 04, 2006

Humala Rejects Chavez

Ollanta Humala changed radically his campaign strategy by marking distance
from Hugo Chavez.

The Peruvian Presidential candidate lamented Hugo Chavez´s interference in the Peruvian presidential race on a TV show: ¨I do deplore and reject this interference. I have nothing to do with President Chávez," he said.

And lament he should. Chavez recent threat to break relations with Peru in the event of a Garcia victory, has affected his chances in the runoff. A late April survey gave Alan Garcia an 08 point lead. Analyst expect the lead to have increased in the last few due to the ¨Chavez factor¨.

Being friends with Hugo Chavez used to be a campaign booster. Not any more, or at least that is not the way it is working in Mexico and Peru where the association with Venezuela´s president is affecting the campaigns of left wing candidates Andres Manuel Lopez Obrador and Ollanta Humala.

The Calderon and Garcia campaigns have leveraged nationalistic feelings and fears of political radicalization by associating Humala and Lopez Obrador with the Venezuelan President.

Tuesday, May 02, 2006

Chavez Vote Intention Hits 57%

A recent survey by Venezuelan polling firm Keller y Asociados gives Hugo Chavez a Vote Intention of 57% and a popularity level of 63%. Here go the numbers:

If election day was Sunday, who would you vote for:
-Hugo Chavez: 57% (+8% variation from June)
-Opposition: 35% (-6% variation from June)
-Undecided: 8% (-2% variation from June)

Do you like President Chavez?
-I like him: 63% (+2% variation from June)
-I don’t like him: 24% (-4 variation from June)
-Not sure: 13% (+2 variation from June)

Presidential elections are scheduled for December. The lack of opposition leadership and the solid positioning Chavez is enjoying makes him virtually invincible.

Puerto Rico On Brink of Crisis

And today’s Latin American collapsing country is Puerto Rico.

Puerto Rico’s Government has literally run out of money and can’t pay salaries: “Government closed schools and suspended other nonessential public services on Monday after last-minute bargaining failed to yield a budget deal”, Reuters reported

The reason behind the budgetary crisis is all but a secret: Government
employs 30% of the island work force. Payroll represents more than 80% of government spending.

Since one out of three Puerto Ricans is employed by Government, the potential economic effect of a shut down would be devastating.

Observers expect the crisis to be solved in a matter of days. They reckon Government will resort to taxation and borrow money to keep going.

Hopefully this crisis will help the case for restructuring.